The Federal Reserve Bank’s latest update of the so-called Beige Book reports that total economic activity across the 10th District, based in Kansas City, declined slightly in March and April.
The good news? Almost every business contact surveyed for the update reported no pull back in planned capital expenditures, hiring plans or planned wage increases in response to recent financial market volatility. Hiring activity slowed somewhat, leaving total District employment mostly unchanged. Worker retention was reportedly much higher, even as wage growth slowed.
Consumer spending, which accounts for more than two-thirds of GDP, declined slightly as households pulled back on big-ticket items like cars or home maintenance and improvements. Inflation, while down from its 2022 peak, is still a concern, as prices continued to rise at a moderate pace. Several food manufacturers indicated they do not expect to be able to negotiate the same pace of price increases as they did over the past year in the coming months.
And on the banking front, with depositor jitters over the collapse of major banks in recent weeks, outflows at community and regional banking organizations raised funding challenges for many organizations. However, community development financial institutions, which typically serve microbusinesses and low-to-moderate income borrowers, reported stable funding conditions despite recent financial volatility.
The report is issued eight times a year, and you can read the latest update here.