Beige Book Flags Hiring Chill as Bank Profits Soar Amid Data Blackout

The Federal Reserve’s Oct. 15 Beige Book, which surveys business conditions across the central bank’s 12 regions, offers a mixed portrait of the U.S. economy. Overall activity was “little changed” from late summer and employment levels remained “largely stable,” but under the surface the report highlights a hiring chill and growing signs of fragility. Business contacts in several districts said they were reducing headcount through layoffs or attrition. Employers cited weaker demand, elevated economic uncertainty and increased investment in artificial intelligence—automation is allowing firms to slow hiring. At the same time, labour supply remained tight in hospitality, agriculture, construction and manufacturing because recent immigration policies have reduced the available workforce.

Consumer spending, the main engine of U.S. growth, inched down and was soft in five of the 12 districts. Retailers reported a drop in discretionary purchases; diners are skipping desserts and alcohol, and shoppers are seeking out discounts and promotions. Anecdotes point to what some called a “middle‑class recession”: households with moderate incomes are relying more on food banks and buy‑now‑pay‑later services, while hotel owners said travel demand has weakened over the past few months. By contrast, higher‑income consumers are still spending on luxury travel and merchandise, highlighting a widening divide.

The Beige Book also underscores how tariffs are driving price pressures. Businesses across multiple districts reported higher import costs; some firms have been able to absorb the increases or renegotiate with suppliers, but many have passed higher costs to consumers. Executives warned that the tariff shock is just beginning to filter through to retail prices and predicted further price increases into 2026.

Economic context and key indicators

The eSNAP dashboard, updated on Oct. 16, provides important context for interpreting the Beige Book anecdotes. It assigns the U.S. economy an Economic Health Score of 65 out of 100, classifying conditions as “moderate risk” with a stable trend. The score’s component breakdown shows strength in growth (80) and employment (70) but weakness in housing (35) and household fragility (40).

Key data points:

• Unemployment rate: 4.3 % (as of Aug. 1, 2025).
• Inflation (CPI, YoY): 2.94 % (unchanged from the prior month).
• GDP growth: 3.8 % (as of Oct. 19, 2025), up sharply from the previous reading.
• Consumer sentiment: 58.2 (University of Michigan index), down 5.7 % from the previous survey.
• S&P 500: 6,664 points on Oct. 17, 2025.
• 30‑year mortgage rate: 6.27 % on Oct. 16, 2025, down slightly from earlier in the month.
• Consumer spending: $21.1 trillion (up 0.6 % month‑over‑month).
• Personal income: $26.3 trillion (up 0.4 %).
• Savings rate: 4.6 %.

The eSNAP Economic Forecast expects GDP growth to slow modestly to 3.6 % next quarter and 3.4 % next year. Unemployment is projected to stay near current levels in the near term but drift down to 4.1 % by 2026. Inflation is forecast to decline toward 2.5 % over the next year.

Main Street implications

The Beige Book and eSNAP data reveal how economic trends are affecting everyday Americans. Cost of living remains a concern: grocery and healthcare costs are rising faster than wages, squeezing household budgets. Housing affordability is deteriorating; 30‑year mortgage rates above 6 % make homeownership out of reach for many would‑be buyers, pushing more people into rental markets. Savings rates remain low and credit‑card debt is climbing, suggesting that households are struggling to build emergency funds. Yet there are bright spots: gas prices have fallen recently, and job openings in sectors like healthcare and technology mean employment opportunities are still available for those who are able to move or retrain.

Conclusion

Today’s economic picture is one of divergent narratives. The Federal Reserve’s Beige Book shows an economy that is holding steady overall but developing soft spots as layoffs rise and middle‑class spending wanes. Tariffs are adding to price pressures, and immigration restrictions are constraining labour supply. At the same time, some firms—particularly in the financial sector—are reporting robust profits, investment in artificial intelligence is booming and high‑income households are keeping retailers afloat. With official data temporarily suspended by the government shutdown, these qualitative reports and private indicators take on extra significance as policymakers gauge whether the economy is headed for a soft landing or a sharper slowdown.