Federal Reserve Beige Book: The U.S. economy overall shows signs of improvement and inflationary pressures have eased

Federal Reserve Beige Book: The U.S. economy overall shows signs of improvement and inflationary pressures have eased.

The Beige Book released by the Federal Reserve on Wednesday showed that between the end of May and June, the U.S. economy overall showed signs of improvement, and the job market continued to grow, but it has not yet pushed up wage costs; inflationary pressure has eased, but it still brings unpleasant impacts.

The Federal Reserve releases the "Beige Book" eight times a year. The Beige Book summarizes the results of 12 regional Feds' assessment of the U.S. economic situation. The report is an important reference for the Federal Reserve's regular monetary policy meetings.

The report showed that economic activity increased at a slight to moderate pace in 11 of the 12 Fed jurisdictions, while another region reported no change in economic activity. Regional Fed contacts generally expect the economy to continue expanding in the coming months.

However, many regions pointed out that there is still high uncertainty about the fuel cost outlook. Prices generally rose moderately. Among the 12 Federal Reserve jurisdictions, 9 reported moderate price increases, 2 had strong increases, and 1 had small increases. The overall increase was the same or slowed down from the previous period.

As for the price trend in the next few months, companies and market participants in various regions have different views. Some sources expect inflation to maintain its current pace, while others expect it to slow further, partly due to lower fuel prices.

With inflation still high, about half of Federal Reserve officials expected to raise interest rates at least once before the end of 2026 at their June 16-17 policy meeting.

Federal Reserve Chairman Kevin Warsh has yet to reveal his specific views on the future path of interest rates, but he has repeatedly emphasized his commitment to restoring price stability and said the Fed has the policy tools to achieve that goal. He reiterated this stance during two consecutive congressional hearings on Tuesday and Wednesday.

Fuel prices fell last month and helped ease inflationary pressures as the United States reached a tentative peace deal with Iran. But the conflict escalated again this month, pushing oil prices up again and reigniting concerns about inflation.

Compared with the previous report, this Beige Book mentions significantly fewer wars between the United States and Israel against Iran.

The reason is that during the period covered by this survey (data collection ended on July 6), the relevant conflicts were in a relatively calm stage, energy prices fell back, and there was also some cautious optimism in the market about conflict resolution. "Builders expect more bid opportunities to emerge in the near term.

One source attributed this to reduced uncertainty while the conflict in the Middle East awaits resolution," the Cleveland Fed said. However, some companies said that as long as the conflict continues, the pressure on commodity prices caused by it may continue.

The renewed conflict this week also confirms companies' previous concerns about continued cost pressures. The report further confirms the recent judgment of Federal Reserve officials on the job market: the job market has improved in many areas, but inflation remains an important pressure facing businesses and consumers.

"High gas prices are hurting the budgets of many consumers," the Minneapolis Fed said. "Job seekers are seeing fewer open jobs in a variety of occupations.

Those looking for jobs as tally clerks, nursing assistants, heavy machinery operators or customer service representatives have a relatively good chance of finding a job." Overall, the Beige Book shows that the labor market is not currently an important factor driving inflation - a point that Fed officials have emphasized many times before.

However, non-labor costs continue to rise. The report found that many industries, including services, construction and manufacturing, are facing rising input cost pressures, mainly reflecting increases in energy, transportation and raw material costs. The 2026 World Cup has also become a highlight in the Beige Book.

The report mentioned about 12 times the role of the World Cup in promoting economic activities in host cities, including Boston, Philadelphia, Miami, New York, Kansas City and many cities on the West Coast of the United States.

"Bar beer sales in Greater Boston have increased significantly, and bar operators believe this is mainly due to the World Cup event," the Boston Fed said. (

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