Economic activity increased slightly from late May through early July.
The outlook was neutral to slightly pessimistic, as only two districts expected activity to increase and others foresaw flat or slightly weaker activity.
This report was prepared at the Federal Reserve Bank of Boston based on information collected on or before July 7, 2025.
Prices increased across districts, with seven characterizing price growth as moderate and five characterizing it as modest, mostly similar to the previous report.
Below is a summary of the economic activity, the labor market, prices, in the district highlights as presented by the Boston Fed in the July beige book.
Overall Economic Activity
Economic activity increased slightly from late May through early July.
5 Districts reported slight/modest gains; 5 were flat; 2 reported modest declines.
Conditions improved compared to the previous report, where half of Districts reported declines.
Business uncertainty remained elevated, causing continued caution.
Consumer spending (non-auto) declined in most districts; auto sales fell modestly after earlier tariff-driven purchases.
Tourism was mixed; manufacturing edged lower; nonfinancial services were steady but varied.
Loan volumes rose slightly in most Districts.
Construction slowed, partly due to rising costs; home and nonresidential sales were mostly flat.
Agriculture remained weak; energy declined slightly; transportation was mixed.
Outlook: Neutral to slightly pessimistic, with only 2 Districts expecting growth.
Labor Markets
Employment increased slightly overall.
1 District saw modest gains, 6 saw slight increases, 3 unchanged, 2 slight declines.
Hiring remained cautious due to economic and policy uncertainty.
Labor availability improved; turnover fell and job applications rose.
Skilled trade shortages and reduced foreign-born labor were noted.
Some firms increased automation and AI investment to reduce hiring needs.
Wage growth was modest overall, ranging from flat to moderate.
Layoffs were limited, slightly more common in manufacturing.
Firms are postponing major hiring/layoff decisions until uncertainty improves.
Prices
Prices increased across all Districts.
7 described price growth as moderate, 5 as modest—similar to last report.
Tariffs caused input cost pressures, especially in manufacturing and construction.
Insurance costs also a widespread concern.
Many firms passed some costs to consumers, though price sensitivity limited pricing power.
Profit margins compressed where price hikes couldn’t keep pace.
Most businesses expect elevated cost pressures to persist into late summer.
District Highlights
Boston
Flat to slightly up; retail and tourism declined.
Modest price increases, except for tariff-driven cases.
Home sales up modestly; cautious hiring amid guarded optimism.
New York
Modest decline in activity; uncertainty curbing decisions.
Slight job growth, modest wage and price increases.
Input costs spiked due to tariffs.
Philadelphia
Modest business decline overall.
Nonmanufacturing weakened, manufacturing edged up.
Slight declines in employment and modest price gains.
Cleveland
Flat activity, with slight improvement expected.
Weaker manufacturing and transportation demand.
Strong cost growth but modest selling price increases.
Richmond
Moderate growth; retail, leisure, and hospitality improved.
Manufacturing declined due to rising prices hurting demand.
Modest job and price growth.
Atlanta
Little change overall.
Steady labor and wages; moderate price growth.
Travel up, consumer spending and real estate down.
Chicago
Slight economic growth; modest job and wage increases.
Manufacturing declined; prices rose moderately.
Farm income expectations unchanged.
St. Louis
Activity and employment flat; moderate price increases.
Contacts expect continued nonlabor cost pressures from tariffs.
Outlook slightly pessimistic.
Minneapolis
Flat activity; slight employment growth.
Moderate wages, easing price pressures.
Consumer spending down; tourism up; construction and energy fell.
Kansas City
Mostly unchanged activity; some pickup in consumer and financial activity.
Labor availability improved, easing wage pressure.
Moderate price growth.
Dallas
Slight growth; nonfinancial services up, manufacturing steady.
Retail and housing down; oil production flat.
Loan volumes rose; employment unchanged.
San Francisco
Stable conditions; slight drop in employment.
Modest wage and price growth; retail up slightly.
Weaker manufacturing and residential real estate.
