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The U.S. Federal Reserve released its October Bej Book report, which compiles assessments of current economic conditions across the 12 Federal Reserve districts. The report showed moderate growth in two districts, modest gains in three, slight expansion in four, and little meaningful change in the remaining three.

Manufacturing led the stronger performance in the Dallas district, where broad-based growth drove activity. Six other districts reported modest to moderate manufacturing growth, while the last five saw little or no expansion in the sector. Consumer spending barely changed in most districts and was largely supported by higher-income households, with lower-income shoppers remaining cautious even in Dallas, where retail sales were strong.

On prices, three districts reported strong overall increases, eight moderate gains and one modest rise. Input cost pressures intensified in three districts, and four noted a faster pace of price growth. The report cited rising oil prices across all districts, with firms reporting elevated diesel costs and fuel surcharges filtering through supply chains. Contacts also flagged persistent pressure from commodities, tariffs and insurance costs, while employment was largely unchanged and labor supply generally met demand.

Key Takeaways

• The Fed's October Bej Book showed economic activity expanding in nine of 12 districts, led by broad-based manufacturing growth in Dallas.
• Input cost pressures intensified in three districts, with rising oil prices, tariffs and insurance costs cited as key drivers.
• Consumer spending was mostly flat and driven by higher-income households, while employment levels remained largely unchanged.