Federal Reserve's Beige Book signals economic turning points: divergence in consumption and simultaneous weakness in employment

The latest Federal Reserve Beige Book report was released at the end of November, providing market investors and policymakers with an in-depth snapshot of the U.S. economy. According to this authoritative economic monitoring document, recent U.S. economic activity has shown signs of stagnation, with several key indicators exhibiting subtle yet noteworthy shifts.

The Economic Panorama Painted by the Beige Book: High-End Consumption vs. Middle and Low Income Segmentation

Based on detailed survey data from the Federal Reserve Beige Book, overall consumer spending has further contracted in recent weeks. This decline is primarily concentrated among middle- and low-income consumers. In contrast, high-end consumer groups still maintain relatively stable purchasing power, forming a clear polarization in consumption. This trend reflects the vastly different pressures faced by various income groups under the current economic environment. The Beige Book also notes slight signs of softening in the U.S. labor market, with the pace of labor market cooling beginning to accelerate. Meanwhile, inflation remains moderate and does not pose an immediate inflation threat.

Corporate Outlook Turns Cautious: Manufacturing Sector Shows Contradictory Attitudes

The Beige Book records complex sentiments among business decision-makers. The overall economic outlook remains relatively stable, but some surveyed companies have begun warning of potential economic slowdown risks in the coming months. Notably, the manufacturing sector has sent cautious optimistic signals, indicating that this traditional industry still holds some confidence in future prospects. This diversification in corporate expectations reflects that the U.S. economy is at a delicate turning point.

Government Shutdown Causes Data Gaps in the Beige Book: Decision-Making Dilemmas Arise

The Federal Reserve faces an unprecedented challenge. The ongoing U.S. government shutdown, which lasted until November 12, directly interrupted the routine collection of key economic data. This means that although the Beige Book was published as scheduled, the on-the-ground survey data covering October to November is significantly incomplete. Federal Reserve officials will be unable to access comprehensive labor market performance and inflation data for this period before the policy decision meeting in December, adding complexity to the precise formulation of monetary policy.

As an important economic intelligence tool for the Federal Reserve, the integrity of the Beige Book data directly impacts the accuracy of policy decisions. The current data gaps highlight the profound impact political events have on economic monitoring efforts.