Reported headlines from the report.
Economic activity was little changed since the previous report, according to most of the twelve Federal Reserve districts, though two districts noted a modest decline and one reported modest growth.
Some contacts noted an increased risk of slower activity in coming months, while some optimism was noted among manufacturers.
Wages generally grew at a modest pace; however, some sectors such as manufacturing and construction saw firmer gains. The report was prepared at the Federal Reserve Bank of Dallas based on information collected on or before November 17, 2025.
Prices rose moderately during the reporting period.
Employment
Employment declined slightly, with about half of Districts reporting weaker labor demand.
Firms relied more on hiring freezes, replacement-only hiring, attrition, and hour adjustments rather than layoffs.
Layoff announcements increased, but were not the primary method of reducing headcount.
Some employers adjusted hours worked to match business volume instead of changing staffing levels.
AI adoption replaced some entry-level roles or boosted productivity enough to limit new hiring.
Labor availability improved overall, though shortages persisted in certain skilled positions and areas with fewer immigrant workers.
Wage growth was modest, though manufacturing, construction, and health care faced more moderate wage pressures due to tighter labor supply.
Rising health-insurance premiums continued to lift overall labor costs.
Prices
Prices rose moderately across the economy.
Input-cost pressures were widespread in manufacturing and retail, driven largely by tariffs.
Rising costs were also reported for insurance, utilities, technology, and health care.
Ability to pass higher costs to customers varied, depending on demand, competition, and customer pushback.
Several firms reported margin compression or financial strain due to tariffs.
Some materials saw price declines because of sluggish demand or reduced/delayed tariffs.
Most contacts expect upward cost pressures to persist, though plans for near-term price increases remain mixed.
Regionally:
Boston
Slight economic expansion; home sales strengthened while consumer spending stayed flat. Employment edged lower, wages rose modestly, and price pressures were mild outside of groceries. Outlook mildly optimistic.
New York
Activity declined modestly; slight job losses and some major layoffs. Prices rose more slowly but stayed elevated. Manufacturing improved moderately, but consumer spending softened. Little improvement expected ahead.
Philadelphia
Activity declined modestly, worsened by the government shutdown. Employment fell, and price pressures continue to strain lower-income households. Policy uncertainty is stressing small businesses.
Cleveland
Slight uptick in activity, though expectations are flat. Professional services demand rose, manufacturing slipped slightly but benefited from AI-related demand. Nonlabor costs stayed high; selling prices rose moderately.
Richmond
Modest growth overall. Consumer spending increased slightly, but manufacturing contracted. Employment held steady with moderate wage gains. Price growth also moderate.
Atlanta
Activity mostly unchanged. Employment flat, and wages/prices modestly higher. Retail slowed; travel was flat to down. Home sales fell, but commercial real estate improved. Transportation and manufacturing steady; energy demand up.
Chicago
Slight economic growth across employment, spending, construction, real estate, and manufacturing. Prices rose moderately; wages modestly. Financial conditions loosened slightly. Farm income outlook for 2025 improved.
St. Louis
Activity and employment unchanged but demand continues to soften, worsened by the shutdown. Prices rose moderately, with expectations of stronger price growth ahead. Outlook slightly pessimistic.
Minneapolis
Flat overall activity. Small decline in head counts with somewhat better labor supply. Price pressures increased. Auto sales rose, but overall consumer spending fell. Manufacturing, home sales, and commercial construction rose; agriculture remained weak.
Kansas City
Growth slowed slightly amid softer labor conditions and cooling consumer spending. Wages kept pace with cost-of-living. Prices rose modestly, with only partial pass-through of higher input costs. Firms still expect employment gains.
Dallas
Activity weakened slightly, led by declines in services, retail, and banking. Housing remained weak; energy flat. Manufacturing was the relative bright spot. Employment fell overall, prices rose moderately, and outlooks worsened amid economic and policy concerns.
San Francisco
Mixed conditions. Employment steady, wages up somewhat, prices modestly higher. Retail, agriculture, and housing softened, while services, manufacturing, and commercial real estate held steady. Lending activity improved slightly.
The expectations for a rate cut in December stays a steady at around 84%.
