(Finance) – US economic activity continued to increase at the end of 2024, but operators were concerned about the potential increase in tariffs and other measures proposed by President-elect Donald Trumpsuch as changes in immigration policy. This is what emerges from Beige Book of January 2025 from the Federal Reserve, the report on the state of the US economy which will form the basis for the next monetary policy decisions.
“Economic activity increased slightly to moderately Consumer spending increased moderately in the twelve Federal Reserve districts in late November and December, with most districts reporting strong holiday sales that exceeded expectations.”
Production “declined slightly in net terms and several districts said producers were stockpiling in anticipation of higher tariffs“.
Residential real estate activity remained unchanged overall, as the high mortgage rates they continued to curb demand.
Agricultural conditions remained weak overall, while the spread of avian influenza it reduced egg supplies and pushed up prices.
“More contacts were optimistic about the outlook for 2025 than pessimistic, although contacts in several districts expressed concerns that changes in immigration policy and tariffs could have a negative impact on the economy”, is underlined.
Regarding the labor market, “employment increased overallwith six districts reporting a slight increase and six reporting no change.” It is noted that “contacts in multiple sectors noted difficulties in finding skilled workers, and reports of layoffs remained rare. However, contacts in some districts expressed greater uncertainty about their future staffing needs.
On the inflation front, the Beige Book highlights that “i Prices increased modestly overallwith growth rates ranging from stable to moderate. Contacts in most districts reported modest increases in sales prices, although there were reports of stable or declining prices, particularly in the retail and manufacturing sectors.”
Contacts “expected prices to continue rising into 2025, with some noting the potential for higher tariffs to contribute to price increases“, is underlined.