The Federal Reserve indicated that economic activity in most parts of the U.S. grew at a slight to moderate pace in recent weeks, though an increasing number of regions reported flat or declining activity.

According to the Beige Book survey released on Wednesday, many districts noted that sales were being restrained by economic uncertainty, heightened price sensitivity, and reduced spending among lower-income consumers.

The report highlighted that while businesses are exploring the use of artificial intelligence to improve efficiency, overall employment levels remained stable.

The Beige Book stated, "Some districts and multiple industries are seeking to enhance efficiency through AI or other forms of automation, with most emphasizing the goal of increasing productivity rather than replacing workers."

Among the Fed's 12 districts, eight reported moderate inflation. Overall, businesses expect prices to "rise at a slower pace in the near term." Most regions indicated that wages grew at a modest or moderate rate, with several areas facing upward pressure on overall compensation due to rising health insurance costs.

Following three interest rate cuts in 2025, Fed officials shifted to holding rates steady in January, citing inflation above target levels and recent stabilization in the labor market. According to the January meeting minutes, several policymakers suggested that if inflation remains persistently above target, the central bank may need to raise interest rates. Some officials indicated they expect rates to remain unchanged for some time.

The U.S. will release February employment data on Friday, with updated inflation figures due next week. The Fed’s next policy meeting is scheduled for March 17–18 in Washington.

The latest Beige Book was prepared by the Cleveland Fed based on information collected on or before February 23, prior to the escalation of Middle East tensions and rising oil prices following U.S. military strikes against Iran.