U.S. economic activity “increased slightly” between late May and early July, the Federal Reserve said in its Beige Book survey of regional business contacts.
“That represented an improvement over the previous report, in which half of districts reported at least slight declines in activity,” according to the report published today. “Uncertainty remained elevated, contributing to ongoing caution by businesses.”
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All 12 regions of the country reported price increases, with businesses experiencing “modest to pronounced input cost pressures related to tariffs,” the Beige Book said.
“Many firms passed on at least a portion of cost increases to consumers through price hikes or surcharges, although some held off raising prices because of customers’ growing price sensitivity, resulting in compressed profit margins,” according to the report.
President Donald Trump in recent days has unleashed a flurry of tariff demands, informing trading partners of new duties that will kick in on August 1 if they cannot negotiate better terms with the United States. The letters extended what was initially a July 9 deadline for another three weeks, setting off a frantic dash for those looking to avoid higher levies.
The Boston Fed compiled the latest edition of the Beige Book using information gathered on or before July 7. The report includes commentary and anecdotes from business leaders and other contacts in each of the Fed’s 12 regional districts. Fed officials next meet on July 29 and 30.
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