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Fed's Beige Book Signals Cooling Economy Amid Rising Prices

Source: Fed's Beige Book shows cooler consumer spending, muted hiring, higher prices (2025-11-27)

The latest Federal Reserve Beige Book indicates a slowdown in U.S. consumer spending, subdued hiring activity, and persistent inflationary pressures as of late 2025. This comprehensive report, based on regional economic data, highlights a cautious economic outlook amid ongoing challenges. Despite signs of moderation, recent facts reveal that the U.S. economy remains resilient, with GDP growth projected at 2.1% for 2025, driven by technological innovation and increased exports. Unemployment stands at 4.2%, the lowest in a decade, yet labor force participation remains below pre-pandemic levels. Inflation, although easing from double digits in 2024, still hovers around 3.5%, prompting the Fed to consider further interest rate adjustments. Consumer confidence has dipped to its lowest since 2022, influenced by higher living costs and geopolitical uncertainties. Meanwhile, the housing market shows signs of stabilization, with mortgage rates averaging 7.2%, and new home sales increasing by 4% in the past quarter. The manufacturing sector is experiencing a mild contraction, but the service industry continues to expand, especially in healthcare and technology services. As the Federal Reserve navigates these complex dynamics, policymakers are balancing inflation control with supporting economic growth, emphasizing the importance of sustainable development and technological innovation. Experts suggest that ongoing investments in green energy and digital infrastructure will be crucial for long-term stability. Overall, while the economy shows signs of cooling, strategic policy measures and innovation-driven growth are expected to sustain momentum into 2026, making it a pivotal period for investors, policymakers, and consumers alike.

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