Federal Reserve Beige Book: Manufacturing production in most reserve districts has shown slight to moderate growth, mainly due to increased orders in data centers, machinery, and defense sectors.

This growth pace is very close to the previous reporting period, when economic activity expanded in 10 districts, remained flat in 1, and declined in 1. Consumer spending rose slightly, as higher prices (especially for fuel) suppressed sales in other categories. Several Reserve Districts noted that consumers reduced spending on discretionary goods or shifted towards more affordable varieties. The tourism sector grew, with some Reserve Districts benefiting from World Cup visitors. Auto dealers reported little change in sales, but spending on repairs increased as consumers extended the lifespan of their vehicles. Agricultural conditions worsened due to falling commodity prices, rising input costs, and tightened credit. In the energy sector, oil and natural gas drilling activity increased. Most Reserve Districts saw slight to moderate manufacturing growth, mainly driven by orders in the data center, machinery, and defense sectors. Manufacturers in several Reserve Districts reported more frequent supply chain issues. Overall, construction and real estate activity increased slightly, with several Reserve Districts highlighting growth in data center construction. Financial conditions remained broadly stable, with a slight rise in both commercial and consumer lending. Commercial loan quality remained stable, while consumer loan quality declined slightly. Amid continued supply chain changes linked to tariff hikes and the Middle East conflict, transportation activity rose modestly. Overall, other service industries also saw a slight increase in activity, with Reserve Districts emphasizing growth in healthcare and professional services. Social service providers are adapting to reduced funding, but demand for basic support such as housing, food, and healthcare remains high. Respondents generally expect the economy to continue expanding in the coming months, though several Reserve Districts noted significant uncertainty about future fuel costs.