MNI BRIEF: US Economy Expanding But Hiring Flat - Beige Book

U.S. economic activity expanded "a slight to moderate pace" in seven of the Federal Reserve's 12 Districts, while the number of regions reporting flat or declining activity rose to five from four, according to the latest Beige Book published Wednesday. 

The report, which preceded U.S. and Israel attacks on Iran, showed price pressures remained moderate and hiring flat. 

"Contacts in several Districts cited rising nonlabor input costs, softer demand, or uncertainty about overall economic conditions as reasons for flat or lower employment levels. Firms in some Districts and in various sectors looked to AI or other forms of automation to gain efficiencies, with most emphasizing the goal of productivity enhancement rather than worker replacement," the report said.

"Nine Districts mentioned that tariffs contributed to increased costs. Some firms continued to pass tariff-related cost increases through to their customers, and others began to do so after having absorbed previous increases. Still, most Districts received reports of some firms holding selling prices stable despite higher costs because their customers were increasingly price sensitive." (See MNI POLICY: Fed Embraces Pause As Downside Labor Risks Abate)