Economic activity in the US has slightly revived, but uncertainty remains

The American economy is gradually coming back to life — that’s the short summary of the latest Federal Reserve report known as the Beige Book. While the overall figures don’t show a dramatic turnaround, some signs of revival are visible. Still, business sentiment remains cautious: companies are hesitant to expand, and investment decisions are often postponed.

Caution is especially evident in industries where decisions are tied to long-term spending, such as construction, manufacturing, and real estate. Even where slight growth is observed, few are ready to call it a sustainable trend.

Consumers are no longer as active

At the beginning of the year, Americans were spending confidently, especially on cars and electronics. By July, that trend had reversed. The spring surge in consumer activity has tapered off, and in most regions, spending has declined.

Buyers have become more selective, watching prices and avoiding nonessential purchases. This is impacting the entire retail sector — from furniture to clothing. Auto dealerships have also felt the slowdown: the early-year rush, driven by fears of rising tariffs, has passed, and shoppers are no longer eager to buy as they were just a few months ago.

Tourism, construction, and manufacturing

Business activity in these sectors remains mixed. Tourism has picked up in some states, supported by local travel and domestic demand. But in regions where the industry relies heavily on international visitors, the slump continues. The construction sector shows an overall decline in volume. Companies are dealing with rising material costs and a shortage of labor. Manufacturing faces a similar reality — lower output due to weak demand and expensive components.

Real estate, especially in the commercial segment, remains stable, largely thanks to long-term contracts. The residential market is stagnant — not growing, but not collapsing either. Most players are in wait-and-see mode, tracking the central bank’s actions and interest rate movements.

Regional differences

The report highlights that the national picture is made up of many local realities. What works in one district may not work in another. For example, in the Northeast, education and technology support stability, while in the South, logistics and domestic tourism are driving modest growth.

A mosaic of regional developments includes the following:

• In Cleveland, Boston, and Minneapolis, business activity remains stable with little change.
• Atlanta and Chicago show moderate growth, especially in services and logistics.
• Richmond and San Francisco see cautious job expansion, but businesses remain conservative in their forecasts.
• Some regions report increased costs for raw materials, adding price pressure in construction and manufacturing.
• Stricter lending conditions are also mentioned, creating obstacles for new investment.

Despite this mixed landscape, the overall trend still suggests a tentative move out of the uncertainty phase — though progress remains slow and uneven.

Employment: growth exists, but it’s not universal

The labor market continues to experience pressure. While overall employment has grown slightly, the gains are largely the result of selective hiring rather than broad expansion. Six districts report minor job growth, while others see stagnation or slight declines. The situation is particularly tough in sectors requiring skilled workers — including technical fields, healthcare, and manufacturing.

Many companies are struggling to find qualified candidates. In some areas, the shortage is worsened by reduced immigration: fewer foreign workers are arriving, and the domestic workforce isn’t filling the gap quickly enough. To retain staff, businesses are being forced to reconsider wages and working conditions.

Why this matters for markets and investors

The Beige Book is released about two weeks before each Federal Reserve meeting and serves as a kind of economic temperature check. At the moment, that signal is neutral: growth exists, but not enough to inspire confidence. As a result, forecasts remain cautious, and there’s no clear sign of an imminent interest rate cut. Inflation remains under close watch.

Chances are the Fed will continue to take a wait-and-see approach. The market isn’t currently offering strong reasons for drastic decisions. Investors, in turn, are advised to watch sectors showing resilience and avoid rushing into major strategy shifts. Calm, prudence, and calculation — these are likely to be the most valuable traits in the months ahead.