The Fed’s Beige Book points to a resilient economy and worsening conditions for the agricultural sector.

THE Federal Reserve (Fed) released this Wednesday (15) a new edition of Beige BookThe report indicated that the U.S. economy continues on a path of moderate expansion, supported by improvements in the labor market and a slowdown in inflationary pressures. Conversely, the central bank highlighted worsening conditions for the agricultural sector. According to the report, economic activity advanced in 11 of the 12 Fed districts, maintaining a similar pace to that observed in the previous edition. Growth was primarily driven by the industrial, service, construction, and transportation sectors, while the prevailing outlook remains one of expansion in the coming months, despite uncertainties related to energy costs. Household consumption showed modest growth, but rising prices—especially fuel prices—continued to restrict discretionary purchases. In several districts, businesses reported that consumers began substituting higher-value products for cheaper alternatives, a movement known as [missing word – likely "consumer spending"]. trade downTourism, in turn, received a boost with the FIFA World Cup. The labor market also showed improvement compared to the previous survey. Five districts reported increased employment, compared to only one in the May edition, indicating a more widespread hiring scenario in the US economy. Regarding prices, the Beige Book points out that inflation remained at a moderate pace and was stable or weaker in all districts compared to the previous report. Although energy, transportation, and raw material costs continue to put pressure on businesses, some respondents said they expect a further slowdown in inflation in the coming months. The agricultural sector was identified as one of the main areas of concern. According to the Fed, conditions in the field have deteriorated due to a combination of falling commodity prices, increased production costs, and restrictions on credit conditions. Even with the positive performance of other segments of the economy, the central bank highlighted that the environment remains challenging for rural producers, reflecting reduced profitability and the increased cost of financing agricultural activity.

This text was translated by machine from Brazilian Portuguese.