The Federal Reserve’s Beige Book reports an economy buoyed by business investment yet under consumer pressure, weak job growth, and rising prices.
Energy costs linked to the Middle East conflict are driving inflation across shipping, packaging, groceries, and fertilizer, with the oil shock prompting a shift toward hybrid vehicle purchases.
Inflation measured by the Fed’s core gauge rose to 3.8% in April from 3.5% in March, remaining above the 2% target for over five years.
New Fed Chair Kevin Warsh, who succeeded Jerome Powell in late May, signals a policy shift from anticipated rate cuts to a possible hold or increase, ahead of his first policy meeting in two weeks.
Middle‑income households are tightening spending, squeezing more value from each dollar before making purchases.
Economists expect the unemployment rate to hold at 4.3% when the May jobs report is released, indicating a stabilized labor market.
