Stock Market Update

[BRIEFING.COM] The broader economy continued to expand modestly since early July, with ten of twelve Federal Reserve Districts reporting slight to moderate growth and two seeing no change. Consumer spending increased slightly overall, reflecting heightened price sensitivity among some households alongside continued strength in high-end purchases. Auto sales remained subdued amid weak consumer confidence, high fuel prices, and rising financing costs, while tourism activity improved and airlines reported strong demand despite higher fares. Manufacturing activity picked up across most Districts, supported in part by continued demand for defense and data center-related orders, while services activity rose slightly to modestly. Financial conditions improved slightly as loan volumes remained solid or increased across most Districts. Residential construction declined, though nonresidential activity increased, with data center projects accounting for a notable share of construction demand. Agricultural conditions improved slightly but remained strained overall, as strong livestock conditions contrasted with continued pressure on crop producers.

Overall, the economic outlook for the coming months remained positive, though sentiment was mixed across sectors as businesses continued to cite uncertainty surrounding higher energy prices, policy developments, and international conflicts.

• Employment: Employment rose very slightly overall, with seven Districts reporting slight to modest gains and five reporting no change. Labor demand remained healthiest in manufacturing, construction, and some service sectors, while retail and hospitality saw softer demand. Skilled trades and technical workers remained difficult to find, and Districts reported both positive and negative effects from AI on labor demand. Wage growth was modest to moderate, with larger increases concentrated among skilled construction and manufacturing workers.
• Prices: Prices increased moderately in eight Districts, while the remaining Districts reported modest, slight, or robust increases. Input cost pressures remained elevated in manufacturing and construction, driven by higher energy, transportation, raw material, metal, and petrochemical costs. Businesses also continued to report tariff-related pressures, along with significant increases in health care and insurance costs. At the consumer level, heightened price sensitivity limited some firms' ability to fully pass higher costs through to customers.

Currently, the yield on the benchmark 10-year Treasury note is now flat following the Beige Book release to 4.800%.