The U.S. Federal Reserve has reported a decline in economic activity, attributing the downturn to rising tariff rates that have increased costs and prices. According to the Fed’s latest Beige Book, which aggregates data from its 12 regional banks through May 23, the economic outlook remains pessimistic and uncertain. Many businesses anticipate faster cost and price increases, with some describing these as “strong” or “substantial.” The New York Fed noted that some businesses have stopped stocking goods due to rising prices, while the San Francisco Fed highlighted that tariff-related price hikes were not reversed even after tariffs were removed. Consumer spending has flattened, and retailers report a pullback in discretionary spending. Employment trends vary by industry and location, with some companies increasing hiring while others pause due to economic uncertainty. The Beige Book provides a contrast to national economic data, which still shows a solid labor market and improving inflation. However, recent surveys indicate a contraction in the service sector and rising input costs for businesses.
— new from Reuters
