Fed Beige Book finds broader price pressures as growth stays uneven

Nine Federal Reserve Districts reported some growth and three were little changed in the Beige Book released Wednesday, while price pressures broadened — three Districts called overall price growth robust and four said the pace of increases picked up — with higher oil and diesel costs showing up in every region.

What the districts reported

Economic activity grew in nine of the twelve Federal Reserve Districts and was little changed in the other three, according to the Beige Book published Wednesday. Two Districts reported moderate growth, three modest growth, four slight growth, and three no significant change. The report no longer leads with a single national label for the pace of activity; the September 2 Beige Book had characterized growth as increasing modestly, with ten Districts in the slight-to-moderate range and two unchanged.

Manufacturing did most of the lifting. Robust, broad-based factory growth led the moderate pace in the Dallas District, and another six Districts reported modest to moderate manufacturing gains. The remaining five saw little or no manufacturing growth. Outside factories, reports on other sectors indicate little growth overall.

Most Districts reported little or no change in consumer spending. Auto contacts reported flat to modestly lower sales in five of the six Districts that commented. More than half of the Districts said spending was driven by high-income households. Even in Dallas, where retail sales were described as solid, contacts cited lower-income customers becoming more cautious. Tourism continued to grow, but Boston, Minneapolis and San Francisco noted a decline in sales from Canadian tourists.

Outlooks stayed positive for the coming months, the report said, but expectations leaned toward slight growth, tilted toward manufacturing and weighed down by persistent uncertainties.

Prices and costs

Price pressures broadened. Three Districts characterized overall price growth as robust, eight as moderate — and three of those eight said input pressures were intensifying, if not already robust — and one reported modest price growth. Four Districts said the pace of price increases picked up from the prior period. In the September 2 report, only one District had described price growth as robust, and only one had said the pace had accelerated.

Higher oil prices showed up in every District report. Firms pointed to elevated diesel costs and said fuel surcharges were pushing those costs through the supply chain. Contacts in multiple Districts also cited commodities, tariffs and insurance. Consumer-facing firms described tighter margins as price-sensitive customers resisted further hikes, managing the squeeze with selective price increases, targeted incentives and menu changes that cut their own costs. Several Districts said firms expect further increases in the months ahead as hedges and fixed contracts expire and get renegotiated.

Jobs, wages and AI

Most Districts described little or no net change in overall employment. Three reported modest gains, five slight gains and four no significant change. Labor supply was generally adequate, though shortages persisted for specialized, technical and skilled-trade workers.

Artificial intelligence appeared more often as a staffing story. Five Districts reported that some firms had reduced staffing through attrition, delayed hiring or expected less job creation after raising productivity with AI investments.

Wage growth was moderate in five Districts, modest in four and slight in two. Several Districts said inflation had brought higher cost-of-living demands and rising benefit costs. Boston staffing contacts said workers were looking for new jobs because raises lagged inflation.

Regional snapshots that matter for the national picture

Dallas stood out for moderate expansion led by manufacturing, with mostly positive outlooks still clouded by inflation and geopolitical and trade-policy uncertainty. Chicago was flat on balance: manufacturing demand rose modestly, employment was up slightly, consumer spending was flat, and construction, real estate and business spending declined slightly. Philadelphia's growth slowed to slight from modest in the prior period, while New York also reported only slight growth, led by manufacturing, with selling-price increases at the high end of the moderate range and input prices still rising strongly.

Cleveland said nonlabor cost pressures remained strong and selling prices grew robustly even as overall activity rose only modestly. San Francisco held activity broadly steady, with retail sales softening somewhat. Manufacturing was mixed and commercial real estate was stable, while agriculture, residential real estate and financial services weakened slightly.

What this report is — and is not

The Beige Book is the Federal Reserve System's qualitative survey of current conditions across the twelve Districts. It is not a forecast, not a vote, and not a statement of policymakers' views. This edition was prepared at the Federal Reserve Bank of Philadelphia from information collected on or before October 5, 2026, and released on October 14. The Federal Open Market Committee's next scheduled meeting is October 27–28.

It lands the same day as September's consumer price index, which showed a 0.6 percent monthly rise and a 3.7 percent twelve-month increase driven largely by gasoline — a separate Bureau of Labor Statistics print already covered on TickerGrove. The Beige Book's contribution is the District-level texture: broader price pressure, flat consumer spending skewed toward higher-income households, factory strength concentrated in some regions, and early signs that AI is changing hiring plans in several Districts.