Fed Beige Book: Tariffs Concern Manufacturers

While manufacturers generally reported favorable business conditions all over the United States, companies in all the Federal Reserve Districts pointed to Trump administration tariffs as cause for concern, according to the Fed’s July 18 Beige Book report.

Economic activity continued to expand across the United States, with 10 of the 12 Federal Reserve Districts reporting moderate or modest growth. The outliers were the Dallas District, which reported strong growth driven in part by the energy sector, and the St. Louis District, where growth was described as slight. Manufacturers in all the Fed Districts expressed concern about tariffs and in many reported higher prices and supply disruptions that they attributed to the new trade policies. All Districts reported that labor markets were tight and many said their inability to find workers constrained growth. Contacts reported higher input prices and shrinking margins. Six Districts specifically mentioned trucking capacity as an issue and attributed it to a shortage of commercial drivers.