Federal Reserve Beige Book: Manufacturing activity declines slightly, company hiring remains cautious

On July 16th local time, the Federal Reserve released the "Beige Book" on economic conditions. The "Beige Book" shows that there was a slight increase in economic activity from late May to early July. Uncertainty remains high, causing businesses to continue to be cautious. The tourism industry saw fluctuations in activity, manufacturing activity slightly decreased, and non-financial service sector activity overall remained almost unchanged, but there were differences between regions. The economic outlook is neutral to slightly pessimistic. Overall, hiring remains cautious, with many attributing this to ongoing economic and policy uncertainty. More and more regions are pointing out labor shortages in technical occupations. Some employers in certain regions are increasing investment in automation and artificial intelligence to reduce the need for additional hiring. Prices have increased in all regions. In all 12 regions, businesses reported facing medium to significant cost pressures related to tariffs, particularly for raw materials used in manufacturing and construction. Many businesses are passing on at least some of the cost increases to consumers through price hikes or additional fees. Industry professionals expect cost pressures to continue to rise in the coming months, increasing the possibility of faster consumer price increases starting in late summer.