Overall Economic Activity  Contacts from most Districts indicated economic growth was modest during July and August. Consumer spending on  tourism was stronger than expected, surging during what most contacts considered the last stage of pent-up demand  for leisure travel from the pandemic era. But other retail spending continued to slow, especially on non-essential items. 

Some Districts highlighted reports suggesting consumers may have exhausted their savings and are relying more on  borrowing to support spending. New auto sales did expand in many Districts, but contacts noted this had more to do  with better availability of inventory rather than increased consumer demand. Manufacturing contacts in several Districts  also noted that supply chain delays improved, and that they were better able to meet existing orders. New orders were  stable or declined in most Districts, and backlogs shortened as demand for manufactured goods waned. One sector  where supply did not become more available was single-family housing. Nearly all Districts reported the inventory of  homes for sale remained constrained. Accordingly, new construction activity picked up for single-family housing. But  multiple Districts noted that construction of affordable housing units was increasingly challenged by higher financing  costs and rising insurance premiums. Bankers from different Districts had mixed experiences with growth in loan demand. Most indicated that consumer loan balances rose, and some Districts reported higher delinquencies on consumer credit lines. Agriculture conditions were somewhat mixed, but reports of drought and higher input costs were widespread. Energy activity was mostly unchanged during the final months of the summer. 

Labor Markets  Job growth was subdued across the nation. Though hiring slowed, most Districts indicated imbalances persisted in the  labor market as the availability of skilled workers and the number of applicants remained constrained. Worker retention  improved in several Districts, but only in certain sectors such as manufacturing and transportation. Many contacts  suggested “the second half of the year will be different” when describing wage growth. Growth in labor cost pressures  was elevated in most Districts, often exceeding expectations during the first half of the year. But nearly all Districts  indicated businesses renewed their previously unfulfilled expectations that wage growth will slow broadly in the near  term. 

Prices  Most Districts reported price growth slowed overall, decelerating faster in manufacturing and consumer-goods sectors. 

However, contacts in several Districts highlighted sharp increases in property insurance costs during the past few  months. Contacts in several Districts indicated input price growth slowed less than selling prices, as businesses struggled to pass along cost pressures. As a result, profit margins reportedly fell in several Districts.