November 26, 2025
The new Beige Book from the Federal Reserve Bank of Atlanta reports that economic activity in the Southeast in October and early November was broadly the same as in the previous six weeks.
The Federal Reserve has a dual mandate from Congress to pursue price stability and sustainable maximum employment. During the Beige Book reporting period, contacts said prices overall rose modestly, but the inflation particulars and outlook remain complex.
For instance, construction costs stabilized overall as prices of materials like lumber and steel declined. At the same time, many contacts said prices for software and insurance rose substantially.
Also, tariffs and other upward price pressures have affected firms of different sizes differently. Smaller businesses have found little ability to increase prices to customers or to negotiate with suppliers for more favorable wholesale prices. On the other hand, larger firms have been “sharing the squeeze” on margins through the supply chain, with various suppliers absorbing portions of tariff costs.
However, many firms have exhausted cost-cutting methods and plan to raise prices in the coming months, mainly on products with stronger demand in an effort to minimize broader erosion of demand. Several contacts said they expect trade policy questions to be resolved in early 2026, which could offer some clarity on cost and pricing structures.
Turning to the employment picture, payroll levels remained mostly unchanged. Firms that are enjoying strong demand reported they are hiring from an abundant candidate pool. Across firms, turnover remained low. A few large firms in wholesale distribution and hospitality reported recent layoffs, and some other firms were planning for potential layoffs should demand fall. Several firms reduced workers’ hours to avoid layoffs or shifted from full-time equivalent employees to contractors to offer flexibility as business fluctuated.
In other economic sectors:
Many low- and moderate-income households have shown increasing signs of economic distress. Bankers noted customers’ increasing reliance on debt to cover typical household expenses like food and utilities.
Retail sales declined a little, as lower- and middle-income consumers in particular continued to be careful with discretionary spending. Restaurant operators reported that fine dining sales moderated as patrons traded down, and quick service restaurants’ sales declined notably, including delivery orders via services such as Door Dash.
Home sales fell slightly, while commercial real estate conditions improved marginally. The long-troubled office sector saw some increases in sales and construction with growing demand, especially for high-end properties as many companies bring workers back into the office.
Manufacturing activity was generally flat, and many contacts expect it to remain so over the next year.
In banking, loan growth in the region decreased slightly, with declines in the construction and auto segments partially offset by marginal growth in credit card and multifamily portfolios.
In the energy sector, oil refiners and petrochemical manufacturers reported slower investment amid uncertainty and tariff-related cost increases. However, other contacts reported strong demand for primary energy sources—particularly liquid natural gas, solar, and wind—mainly from data centers.
The Beige Book is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve districts. The Fed System and regional reserve banks publish the Beige Book eight times a year, before each meeting of the Federal Open Market Committee. The reports from each District characterize regional economic conditions based on a variety of mostly qualitative information, gathered directly from District sources, including interviews and online questionnaires completed by businesses, community organizations, economists, market experts, and other sources. The Committee next meets December 9 and 10.
