褐皮书 - March 4, 2026

Federal Reserve Bank of Philadelphia Summary of Economic Activity Business activity in the Third District grew modestly this period, up from a slight pace of growth in the prior period. Sales activity continued to grow even as many contacts noted that activity was hampered by adverse weather—significant snowfall and persistent subfreezing temperatures. Employment levels increased modestly, unchanged from the last period. Wage inflation was unchanged at a modest pace. Price pressures remained elevated, and affordability concerns persisted for low-, middle-, and fixed-income households. Firms' own-price inflation ticked down but remained at a moderate pace. Expectations for economic growth over the next six months remained widespread across sectors but were stronger among manufacturers than nonmanufacturers. Labor Markets Employment continued to increase modestly overall; however, manufacturing firms reported declines in February. The full-time employment index for nonmanufacturers edged higher in January and February but continued to reflect a modest pace overall. The part-time employment index, however, fell flat in January then bounced back to a slight increase in February. Manufacturing firms reported a modest increase in employment in January but a slight decline in February. In February, the average workweek index rose sharply among nonmanufacturers but fell sharply among manufacturers. Reports from staffing contacts were mixed during this period. While most contacts reported low rates of turnover, which resulted in less need to hire during the period, some contacts reported increased hiring for unskilled jobs in the manufacturing and distribution sectors. Meanwhile, nonprofit contacts reported higher-than-normal turnover in leadership roles and difficulty in backfilling these positions because of a lack of experienced candidates. Wage inflation remained unchanged at a modest pace. Contacts across all sectors continued to report no wage pressures and annual cost-of-living adjustments in the typical range of 2 percent to 3 percent. In the first quarter of 2026, firms' expectations of the one-year-ahead change in compensation cost per worker registered a trimmed mean of 3.2 percent—largely unchanged for a third consecutive quarter. Expected changes in compensation were higher among manufacturers at 3.7 percent than nonmanufacturers at 2.8 percent. Prices On a quarterly basis, firms continued to report moderate increases in prices received for their own goods and services over the past year. The trimmed mean for reported price changes, based on responses from all firms to our first-quarter survey, ticked down to 2.8 percent from 3.0 percent in the fourth quarter, double the 1.4 percent reported one year ago. Almost 40 percent of the firms reported that their customers have become more price sensitive since last quarter—down from 59 percent in November; 56 percent reported little change. Several contacts reported no plans to increase prices as a result. Nonprofit contacts continued to report increased demand for food; clients are struggling with the increased costs of necessities while reporting stagnant incomes. One nonprofit contact shared that some clients on fixed incomes have begun to cut their discretionary spending to pay for essential goods and services. Looking ahead, firms anticipate higher price growth in the next year. The trimmed mean of price increases for firms' own goods and services was 3.1 percent in the first quarter of 2026, higher than 3.0 percent for three of the past four quarters. It was at 2.6 percent in the first and fourth quarters of 2025. The trimmed mean for inflation expectations was 3.6 percent for all firms in the first quarter of 2026, unchanged from the prior quarter and one year ago. Manufacturing Manufacturing activity rose modestly in January and February on average, up from a slight pace in the last period. The index for new orders increased, with almost 30 percent of the firms reporting increases in new orders. The index for shipments rose in January and fell to near zero in February, with almost equal shares of firms (22 percent) reporting increases and decreases. The index for general activity turned positive in January and strengthened further in February. Surveyed firms cited a lack of skilled workers and a lack of demand due to tariff uncertainty and weather-related disruptions as challenges to business in February. Manufacturers' optimism about growth over the next six months was more widespread over January and February. The indexes for new orders and shipments rose in February. On average, 60 percent of the firms expect increases in new orders and shipments over the next six months, up from 50 percent in January. Each future activity index remained near or above its nonrecession average. Trade and Services Nonmanufacturers again reported a modest increase in activity over January and February. The sales/revenues index started strong in January and ended at a modest level in February. The new orders index was modestly positive in January and turned modestly negative in February. Nonmanufacturing firms most often cited general economic uncertainty as a challenge to business. Retailers (nonauto) reported that activity was up slightly, after being steady last period, despite adverse weather reducing traffic to the stores. Auto dealers reported a moderate decline in sales in January, after a modest decline in December. Contacts attributed decreased showroom traffic to snow and below-average temperatures. Further, contacts noted that affordability challenges persisted for the sector. Tourism activity rebounded and increased modestly in the current period, after a slight decline in the last period. Contacts reported a strong start to 2026 owing partly to several conferences and conventions being held in Philadelphia. Additionally, the increased snowfall has benefited the ski resorts in the District. Expectations for own-firm growth in the next six months remained widespread. The diffusion index increased sharply in January and remained largely unchanged in February. However, the index remained below its nonrecession averages. Real Estate and Construction Existing home sales declined modestly after a slight decline in the last period. Inventory levels remained low, and one contact reported that the snowfall caused potential sellers to delay listing their homes in January. New-home builders again reported slight declines in sales and construction activity overall. Based on existing contracts, one builder has already sold out its supply of homes for 2026, although the inventory was lower than in 2025. Affordability issues persist, as already-high home prices edged up. In nonresidential markets, contacts continued to report a slight decrease in activity this period. Building construction declined slightly, and one contact reported that the major construction projects are data centers and health-care projects, with no new starts yet scheduled for 2026. One contact in the engineering sector reported winning proposals for new work, but some clients have funding challenges, which has stalled some projects. One contact that leases to restaurants noted an increase in vacancies, as this sector appears to be struggling. Credit Conditions The volume of bank lending (excluding credit cards) declined slightly during the period (not seasonally adjusted), after being steady last period. District banks reported a modest decline in auto loans and essentially no change in mortgages and commercial real estate volumes. This weakness was partially offset by slight growth in home equity lines and a modest increase in commercial and industrial loans. Credit card volumes fell sharply—a typical seasonal trend as consumers paid down holiday balances. Two banking contacts reported strong growth in commercial loans, as their clients appear eager to get projects started. Three contacts reported no uptick in consumer loan growth because lending standards were tightened in the fall. Consequently, contacts reported no uptick in delinquencies. Small business contacts continued to have challenges accessing capital. For more information about District economic conditions visit: https://www.philadelphiafed.org/regional-economy.

• •نما النشاط الاقتصادي في المنطقة الثالثة بشكل متواضع، متجاوزاً وتيرة النمو الطفيفة السابقة رغم تأثيرات الطقس السيئ.
• •استمرت مستويات التوظيف في الارتفاع بوتيرة متواضعة إجمالاً، مع ملاحظة تراجع طفيف في قطاع التصنيع خلال شهر فبراير.

Federal Reserve Bank of Cleveland Summary of Economic Activity On balance, contacts reported that business activity in the Fourth District increased modestly in recent weeks, with continued modest growth expected in the months ahead. Manufacturing and commercial construction contacts reported increased demand, with multiple contacts noting that the majority of activity came from data center buildouts. Freight contacts reported that demand for their services grew modestly; however, they attributed this to reduced capacity rather than increased freight volumes. Meanwhile, consumer spending was flat. Overall, contacts said that their employment levels remained flat and that wage pressures grew moderately. Nonlabor cost pressures remained robust, and selling prices continued to grow moderately. Labor Markets Reports indicated that employment levels remained flat on net in recent weeks. While some construction, financial services, and professional and business services firms added staff to support growth, others across sectors reduced head counts because of soft demand, cost pressures, and weak outlooks. Labor reductions varied from targeted cuts by manufacturers and reductions in temporary retail workers' hours to closures of underperforming business locations. Several contacts noted increased availability of qualified candidates as larger firms slowed hiring. Multiple contacts reported leveraging automation and artificial intelligence solutions to gain efficiencies in back-office functions, a situation which one banker anticipated could further reduce head count needs. On balance, wage pressures continued to grow moderately, with many contacts implementing standard annual increases. Several professional and business services contacts reported selectively raising wages to attract and retain talent, with one noting "scarcity of accounting graduates and talent." In freight, while most contacts reported stable wages, a couple regularly raised drivers' wages, citing persistent difficulties finding qualified candidates, particularly with new CDL requirements. Manufacturers and bankers reported awarding typical merit increases, while retailers approached wage increases more cautiously, with a couple holding steady because of elevated cost pressures. Prices Overall, nonlabor input cost pressures remained robust for the sixth consecutive reporting period. Contacts reported higher costs for insurance, professional services, utilities, and materials (especially metals and food). Freight costs surged, with one contact describing spot market rates as "exploding." Many manufacturers cited tariffs as driving materials-cost increases, while some large retailers noted that tariff impacts were stabilizing. To offset these pressures, multiple contacts evaluated new vendors and sought efficiencies to counter increases in non-negotiable areas like utilities. On balance, contacts expected nonlabor costs to grow moderately in the coming months. Overall, contacts reported moderate selling price pressures in recent weeks. Many passed along higher input costs, though some firms absorbed these increases to maintain market share amid competitive pressures and softer demand. Several manufacturers implemented additional price increases to cover tariff impacts; one noted raising prices by 4.25 percent instead of the planned 3 percent to offset additional steel tariffs. Freight contacts reported robust rate increases despite customer pushback and softer demand. Two carriers noted a similarity to pandemic-era pricing conditions without the corresponding demand surge, and another suggested that capacity constraints might explain the price firmness. Consumer Spending Contacts reported flat-to-down consumer spending, with many attributing slow sales to the unseasonably cold temperatures and winter storms. Several automotive dealers expressed concern over vehicle affordability as sales declined, with one noting that low-income consumers were priced out of new car purchases. Retailers and food and hospitality contacts reported reduced discretionary spending due to the high cost of living. Overall, contacts expect a slight increase in consumer spending over the coming months. Most automotive dealers anticipated services and parts demand to increase because of the rising average age of vehicles but expected flat-to-declining vehicle sales as affordability issues persisted. Manufacturing Demand for manufactured goods rose slightly, and contacts generally expected demand to increase modestly in the coming months. Data center buildouts and operation remained a key demand driver for producers of metal products and electrical components, though for some this was the only area of growth amid otherwise soft demand. Other sources of strength included light vehicle manufacturing and aerospace. In reports collected prior to the recent Supreme Court ruling on tariffs, multiple contacts were optimistic that more clarity surrounding trade policy would improve overall economic conditions. Conversely, a small number of manufacturers continued to report flat or softer orders related to home-improvement activity, as existing home sales remained stable at a low level. Real Estate and Construction Demand for homes decreased slightly in recent weeks. Two homebuilders and several real estate brokers reported that harsh winter weather discouraged potential buyers from entering the market. Contacts' views on the impact of mortgage rates were mixed. A homebuilder said that current rates contributed to greater demand for new homes, while a real estate broker suggested that rates would need to decrease further to encourage existing homeowners to move. Contacts anticipated strong growth in the coming months, with some expecting pent-up demand and lower mortgage rates to contribute to an active spring selling season. Commercial construction and real estate demand increased modestly over the last two months. Builders noted continued demand for infrastructure and data centers, offsetting the impact of delayed manufacturing projects. Senior and multifamily housing developers saw steady demand, while retail rental activity softened. Demand for office real estate improved as more firms sought in-person workspaces, though one commercial real estate consultant noted that tenants in the sector remained cautious. On balance, contacts expected continued modest growth in the coming months. Financial Services On balance, bankers reported that overall loan demand grew modestly in recent weeks. A couple of bankers said that merger-and-acquisition activity increased, with some commercial clients increasingly focused on succession planning. On the consumer side, one banker noted that mortgage demand had remained "relatively good" despite typical seasonal stagnation in winter months. Credit demand was generally up, though bankers attributed the growth to varying sources. Some reported that growth came primarily from existing accounts, including slower paydowns and increased utilization of existing credit lines, while a couple cited new account originations. In the months ahead, bankers expected loan demand to increase moderately. Nonfinancial Services Professional and business services firms reported moderate demand and expected robust demand in the coming months. An accountant reported that tax policy changes drove demand for their services, and one consultant attributed demand growth to a rebound in corporate investments. Likewise, a law-and-consulting firm noted that merger-and-acquisition activity increased for large public companies but slowed for middle-market firms. Freight contacts reported modest demand growth and expected moderate growth in the coming months. However, they attributed the recent growth to a reduction in available drivers due to the updated CDL eligibility requirements rather than an increase in freight volumes. Community Conditions Nonprofits reported that clients' financial stress worsened over the past three months because of elevated food, utility, and housing costs coupled with reduced social support services. In response, contacts said some clients stopped paying bills, skipped meals, or delayed medical care. One contact noted seeing more employed individuals requesting food, rent, and utility assistance, and another noticed more seniors seeking employment to make ends meet. To address their clients' increased financial stress, nonprofits provided hotel stays when homeless shelters were full, worked with local grocers to secure more food donations, and furnished funds to cover delinquent rent and utility bills. For more information about District economic conditions visit: https://www.clevelandfed.org/en/region/regional-analysis.

• •شهد النشاط الاقتصادي العام في المنطقة زيادة متواضعة، مع توقعات باستمرار هذا النمو الطفيف خلال الأشهر القادمة.
• •تعتبر عمليات بناء وتوسيع مراكز البيانات المحرك الأساسي والبارز للطلب في قطاعي التصنيع والإنشاءات التجارية.

Federal Reserve Bank of Atlanta Summary of Economic Activity The economy of the Sixth District grew at a modest to moderate pace over the reporting period. Employment levels remained flat to slightly down, with most businesses keeping head counts level. Wages grew modestly. Prices and input costs were flat to up somewhat. However, elevated prices for groceries, energy, and health care continued to put pressure on household finances for lower- to moderate-income consumers, and nonprofit agencies saw increased requests for food and rental assistance. Retailers reported modest to moderate sales growth. Tourism activity rose moderately. Demand for housing improved as home prices moderated and interest rates declined. Transportation activity was flat to slightly down, while manufacturing was slightly up. Loan growth was modest. Energy activity grew at a moderate pace, on balance. Labor Markets District employment levels remained flat to slightly down over the reporting period. Most firms reported keeping staffing levels flat or passively reducing head count through attrition. Pockets of hiring strength were seen in health care (primarily medical roles) and at firms involved in data center construction. The limited reports of layoffs were attributed to slowing demand and rising costs. Most firms expect to maintain staffing levels throughout 2026, and several cited plans to implement AI as a productivity enhancement, not head count replacement, at least in the medium term. Wage growth remained modest, on balance. However, in certain sectors, such as health care, wages continued to grow at a moderate to strong pace. Prices Prices were flat to slightly up as some nonlabor costs were noted as having stabilized since the beginning of the year. Contacts reported that waning uncertainty around tariff policies and moderating wage increases helped with budget planning, though tariff concerns persisted in industries like construction and transportation. Insurance remained a key cost driver across sectors, prompting a few firms to self-insure to avoid rising premiums. Pricing power was limited amid growing consumer price sensitivity, and some wholesalers noted they were unable to push increases to retailers as they leaned into promotional pricing to drive volume. Community Perspectives Concern about the stability of the labor market was pervasive among both employed workers and job seekers. While some individuals expressed confidence that they would be able to find a new job, if necessary, most indicated that the job would likely represent a trade down in terms of wages, schedule, and/or benefits. Workers, jobseekers, and community agencies repeatedly emphasized the negative impact of price pressures on household financial positions, especially the costs of groceries, energy, and health care. Individuals reported employing a variety of strategies for navigating tight household budgets, including selling clothes online, scrapping metal, tapping savings, utilizing buy now/pay later offerings, eliminating dining out, using coupons, and buying in bulk. Social service providers indicated that requests for food and rental assistance increased. Several of these same organizations noted that the combination of rising living costs and a cooling labor market have led many families to deprioritize pursuing pathways to upward mobility (such as investing in continuing education) in favor of meeting immediate needs. Consumer Spending Retailers reported modest to moderate sales growth over the reporting period. Discount stores noted steady to improving sales, supported by price-conscious consumers across various income levels. Still, higher-end retail sales remained resilient. Restaurants saw strong sales, especially upscale establishments and quick service locations. Auto dealerships faced ongoing softening demand for new vehicles, though used car sales were healthy as consumers reflected trade-down behavior. Tourism activity grew at a moderate pace since the previous report. Although some travelers canceled or postponed plans because of Winter Storm Fern, others extended their stays for the same reason. Leisure travel among seasonal visitors to the Southeast remained strong, as many were drawn to new attractions, events, and cruises. Business travel was also a bright spot, with further growth anticipated as more companies negotiated contracts for events. Group travel held steady, with solid bookings through the second quarter. Construction and Real Estate Housing demand increased modestly amid declining mortgage rates and moderating home price appreciation. Although this led to a slight improvement in affordability, homeownership costs remained elevated. On balance, home inventory levels fell as both home sales and delistings increased at a modest pace across the District. Home builders pulled back on housing starts and utilized incentives to shrink speculative inventory. Some builders reported that home buyers were shopping around for the best deals and often presented "low-ball" offers. This is especially true in the entry-level segment. Commercial real estate conditions slowed a bit, as most sectors experienced a pullback in the delivery of new space alongside a contraction in demand. Class A accounted for most new office construction, with activity driven by a desire for smaller spaces. Demand for retail space was also concentrated on smaller footprints, and interest in big-box retail declined. Demand for warehousing ticked up, though vacancy rates remained elevated. High vacancy rates continued to beleaguer the multifamily sector. Office, industrial, and hotel segments saw a slight bump in rent levels, driving a small boost in net operating income. Transportation Transportation activity remained flat to slightly down. Railroads reported that total traffic improved through the first three weeks of January, but winter weather caused significant delays in shipments in the final week of the month. Trucking contacts saw a dip in volumes as compared with year-earlier levels when activity was buoyed by firms' stockpiling of pre-tariff inventories. However, truckloads of data center-related infrastructure and equipment were strong. District ports saw further softening in container traffic and slowing growth in auto shipments, but modest increases in bulk and break-bulk volumes. Most transportation contacts expect flat to slightly higher growth in the first half of 2026. Manufacturing Manufacturing activity was slightly up over the reporting period. Furniture producers noted significant declines in demand for moderately priced furnishings, but strong demand for high-end furniture. Lighting manufacturers experienced volume declines but increased revenues resulting from higher prices. Commercial flooring producers reported low single-digit growth driven by corporate renovations and the "race back to [the] office" trend. Health and wellness product manufacturers projected high double-digit growth in 2026, despite weakness among lower-income customers. However, most manufacturing contacts anticipate flat to slightly positive growth in 2026, with potential upsides for housing-related manufacturers if mortgage rates continue to decline. Banking and Finance Loan growth in the District was modest since the previous report. Commercial lending led performance, particularly in the industrial space as firms focused on strengthening supply chain resilience. Some banks described an environment of "reluctant investment" driven by uncertainty, but outlooks were optimistic because of the potential for deregulation and lower borrowing rates. Consumers and small businesses increasingly drew on existing lines of credit. Delinquency levels remained low, though they ticked up marginally in aggregate. Energy Energy demand grew moderately, with a few segments reporting softening and others experiencing robust growth. Crude oil and liquefied natural gas (LNG) production remained strong, with supply exceeding demand. Refining contacts reported high utilization, although they expect that to moderate as maintenance activities kick in with warmer weather. Industrial contractors noted strong activity driven by LNG projects, pipe fabrication, and data center power infrastructure. Utility contacts continued to report rising electricity demand, driven by continued in-migration to the region and growth in data center energy usage. For more information about District economic conditions visit: https://www.atlantafed.org/what-we-study/regional-economy.

• •نما اقتصاد المنطقة بوتيرة متواضعة إلى معتدلة، مع استقرار مستويات التوظيف أو ميلها للانخفاض الطفيف.
• •شهد قطاع السياحة نمواً معتدلاً مدعوماً بقوة السفر الترفيهي وزيادة نشاط سياحة الأعمال والمؤتمرات.

Federal Reserve Bank of Chicago Summary of Economic Activity Economic activity in the Seventh District rose slightly over the reporting period and contacts expected a slight increase in activity over the next year. Manufacturing demand rose modestly; consumer spending and construction and real estate activity rose slightly; employment and business spending were flat on balance; and nonbusiness contacts saw no change in economic activity. Prices and wages rose moderately, and financial conditions loosened modestly. Farm income in 2026 was expected to be similar to 2025. Labor Markets Employment was flat over the reporting period and contacts expected a slight increase in hiring over the next 12 months. Contacts generally reported stable labor market conditions, with one contact calling it a "no hire, no fire" environment. That said, there was still some interest among contacts in raising head counts, and there were reports of challenges finding certain workers. For example, an employment placement agency reported higher demand for experienced IT staff, and manufacturers and construction contacts continued to say it was difficult filling positions for skilled workers. Wages and benefits costs rose moderately. Several contacts said they received large increases in quotes for health insurance plans, which had led them to shop around and consider benefits cuts. Prices Prices rose moderately overall in January and early February and contacts expected a similar pace of growth over the next 12 months. Producer prices were up moderately. Contacts reported a moderate increase in nonlabor input costs and highlighted higher prices for raw materials and energy. However, some construction contacts saw costs decline in recent weeks. Manufacturers continued to attribute increases in some raw materials prices to tariffs and described various degrees of tariff pass-through. Some manufacturing contacts reported that they had been and would continue to pass on the full cost of tariffs to their customers; one said that after splitting the cost of tariffs with their customers in 2025, they planned to pass the full cost on in 2026. Consumer prices rose moderately, and a retail industry analyst noted that some tariff-related price increases are still on their way. Consumer Spending Consumer spending increased slightly over the reporting period. Non-auto retail spending rose modestly. Contacts highlighted increases in jewelry and apparel purchases, while computers, electronics, furniture, and appliances lagged the pace of overall spending growth and outlays for discretionary items softened. Several retail industry analysts said the potential for higher tax refunds than in previous years could spur sales growth in early 2026. Leisure and hospitality spending was flat overall: spending at restaurants rose while outlays at hotels, airlines, and tourist attractions declined. New light vehicle sales fell modestly with industry contacts noting the impact of inclement weather. Business Spending Business spending was flat on balance in January and early February. Capital expenditures increased slightly and contacts expected a slight increase in expenditures in the coming year. Demand for truck transportation declined slightly, and one contact noted that reduced capacity from winter storms caused freight rates to edge up. Retail inventories were lean, but comfortable, and manufacturing inventories were comfortable as well. Stocks of new vehicles were at desired levels, though stocks of used vehicles were low. There were few reports of shortages of raw materials, though several contacts mentioned a shortage of aluminum. Contacts across several industries noted long lead times for electrical components like transformers and computer chips. Construction and Real Estate Construction and real estate activity rose slightly on balance over the reporting period. Residential construction was unchanged. Lot sales remained steady, though some planned subdivisions were downsized. In multifamily, very little new supply was expected to enter the market over the coming months. One contact who was building new apartments indicated that they were able to purchase higher quality appliances than planned because of improved availability from suppliers. Residential real estate activity was unchanged. Home sales were flat, as were prices and rents. Realtors continued to offer incentives to spur sales, such as by lowering closing costs. Nonresidential construction increased slightly. Data center projects moved forward and buildouts of existing space continued. Contacts said that labor supply shortages due to retirements and immigration enforcement actions had led to project delays and higher costs. Commercial real estate activity increased slightly overall. Prices and rents held firm in the industrial market and concessions for newer space decreased. Contacts noted a rejuvenated secondary market for mid-size industrial spaces. However, in Michigan, some auto industry suppliers supporting the EV market had vacated space as regulatory changes have reduced demand for their products. Manufacturing Manufacturing demand rose modestly in January and early February. Chemicals production declined slightly, in part due to weaker demand from the automotive and medical device sectors. Steel sales rose slightly, with strength in demand from data center and energy infrastructure investment more than offsetting weakness in other construction sectors. Auto industry contacts reported a slight increase in demand and machinery sales increased modestly, while fabricated metals orders were flat and heavy truck production was stable. Banking and Finance Financial conditions loosened modestly overall in January and early February. Bond values increased slightly and equity values were unchanged. Volatility rose moderately. Business loan volumes were up slightly with reports of greater demand from large companies, including those investing in AI, and from the defense sector. Some contacts saw an increase in mergers and acquisitions as well. Business loan quality declined slightly, in part due to deterioration in the trucking and manufacturing sectors. Business loan rates fell modestly and terms were unchanged. In the consumer sector, loan demand was again flat. Consumer rates fell modestly, loan quality decreased slightly, and terms tightened slightly. Agriculture Contacts expected farm income for District producers in 2026 to be similar to 2025. High input prices, especially for fertilizers, continued to concern farmers. Crop prices increased a bit overall, as a decline in corn prices was offset by higher soybean and wheat prices. Farm income received a boost from trade-related government payments; nonetheless, some operators were selling crops from storage to cover bills and pay debts. Contacts expected increased government subsidies associated with the OBBBA to lead to an expansion of coverage and higher levels of participation in crop insurance. Livestock operations were generally under less financial pressure than crop farms. Dairy prices increased, and calves designated for beef production boosted the bottom line for many dairies. Cattle and hog prices were up, while egg prices declined. Slow sales of farm machinery left lots full at dealers. Commercial insurance costs have risen for farm supply and grain warehousing businesses. Community Conditions Community, nonprofit, and other nonbusiness contacts saw little change in economic conditions over the reporting period. They viewed the resiliency of the labor market as supporting these stable conditions, though low- and moderate-income consumers, very small businesses, and those facing barriers to employment remained stressed. State government contacts reported that employment and revenues held relatively steady. Contacts at organizations serving low-income consumers spoke of increased food insecurity across their communities; lack of affordable housing was a frequently mentioned cause. Small business contacts said high insurance and labor costs were putting pressure on profit margins. For more information about District economic conditions visit: https://chicagofed.org/cfsec.

• •شهد النشاط الاقتصادي العام في منطقة شيكاغو ارتفاعاً طفيفاً، مع توقعات بنمو مماثل خلال العام المقبل.
• •استقر سوق العمل دون تغيير يذكر في مستويات التوظيف، فيما وُصف ببيئة 'لا توظيف ولا تسريح'، رغم استمرار الصعوبة في إيجاد العمالة المهرة.

Federal Reserve Bank of Dallas Summary of Economic Activity Economic activity in the Eleventh District expanded moderately over the reporting period. Activity vigorously rebounded in manufacturing while also picking up in the service sector. Bank lending, retail sales, and commercial real estate transactions grew. Energy sector activity declined slightly, and agricultural conditions worsened. Employment grew slightly, while wages and prices increased modestly to robustly. Outlooks remained steady despite persistently elevated uncertainty. Labor Markets Employment grew slightly over the reporting period. Hiring increased at a moderate pace in manufacturing but was flat in the service sector. According to a Dallas Fed survey of 235 service sector firms, 55 percent of businesses are not currently trying to hire workers, the highest reported percentage in three years. Of the 80 manufacturers surveyed, 57 percent reported not currently trying to hire workers; however, this percentage has been stable over the last year. The firms that are looking to hire reported slightly worsening applicant availability but improved ability to retain workers. Firms in both sectors reported that the top impediments to hiring workers were a lack of technical skills, lack of available applicants, and applicants demanding higher pay. Several contacts noted that unease about the overall economy led to better worker retention. Wage growth was generally modest but spiked in manufacturing in February. Prices Price pressure remained moderate in the service sector, while elevated in the manufacturing sector, as prices for both raw materials and finished goods grew at a robust pace. Raw material prices were driven up by high metals—aluminum, copper, steel, tungsten, and silver—prices. Several contacts cited strong demand, inadequate supply, and tariffs as the causes of high metal prices. Finished goods prices rose in response to increased input price pressures. One contact noted that it is difficult to pass along the high metal prices to customers in a timely manner. Another reported that input prices are increasing without notice and occasionally doubling, complicating placing new orders. Manufacturing Manufacturing output grew robustly over the reporting period. Both nondurable and durable production and new orders expanded at an accelerated pace. There were pockets of weakness in paper and printing output and wood and nonmetallic metal manufacturing in February. Growth in capital spending stagnated in February after having increased in January. Outlooks improved but contacts remained cautious due to concerns around high input prices, monetary policy, geopolitics, and persistent uncertainty. Retail Sales Retail sales grew slightly over the reporting period. Retailers continue to observe lower-income households cutting discretionary spending, trading down to less-expensive goods, and pursuing value rather than remaining loyal to brands or higher-end retailers. Food and beverage retailers are being impacted by weak consumer spending and high operating costs; both are putting pressure on profit margins. Auto dealers reported flat sales compared to the previous year. Overall, the outlook for the rest of the year is positive, with retailers anticipating an increase in sales due to improving consumer sentiment. Nonfinancial Services Activity in nonfinancial services grew modestly over the last six weeks. Professional and business services and accommodation and food services reported steady activity. Health care, transportation and warehousing, information, and other services experienced revenue growth, albeit concentrated in January. Airlines reported a strong start to this year in terms of bookings and revenue growth. Cargo volume increased, particularly for small parcels. Staffing firms noted an uptick in demand for their services. Despite growing activity, health-care firms reported that spending and investment decisions are on hold until there is more clarity regarding the extension of enhanced Affordable Care Act (ACA) subsidies. Overall, outlooks remain stable, with a few contacts noting they expect activity to remain steady despite high levels of uncertainty. Construction and Real Estate Conditions in the housing market were little changed since the last report. Traffic and activity ticked up but sales remained sluggish overall, with incentives and price discounts continuing to be widespread. Homebuilders continued to report an elevated level of speculative inventory, with ongoing downward pressure on home prices and margins. Outlooks remained cautious with contacts expecting housing starts to be lower this year compared with 2025. Commercial real estate activity improved. Apartment absorption was slower than normal, with rents and occupancy largely holding steady. Office leasing increased, with solid net absorption reported for top-tier space in desired locations, but continued weakness in demand for lower-tier properties. Demand for industrial and retail space held up and even accelerated somewhat in some markets. Transaction velocity has picked up and there were reports of a few distressed sales in multifamily. Financial Services Loan volume and demand continued to increase in February. The expansion in overall loan volume has been supported entirely by commercial real estate loans; residential real estate, consumer and commercial and industrial loan volumes have been declining since the end of 2025. Credit standards and terms tightened, but loan pricing continued to decline. Overall loan performance deteriorated a touch. Bankers reported increasing general business activity, and their outlooks leaned optimistic. Survey respondents broadly expect sizeable growth in loan demand and business activity six months from now and stable loan performance. Energy Eleventh District drilling activity edged down slightly over the past six weeks, while well completions picked up a bit. Producers broadly reported expectations for WTI to remain around $60 in 2026, but they generally worried that the downside risk to prices was still larger than the upside risk. Midstream energy remains a relatively bright spot as firms note strong demand for construction of infrastructure to serve oil and gas production and the transport of natural gas for exports and power demand. Agriculture Drought conditions worsened across the District, spurring increased concern among farmers and ranchers. Low crop prices continue to weigh heavily on producers, and there have been numerous reports that government assistance hasn't been enough to cover losses in this low-price environment. On the livestock side, cattle prices remained highly elevated, and drought concerns seem to be suppressing expansion of herds. The ban on Mexican cattle imports continues to negatively impact meatpackers, with some reducing operations. The dairy industry is being challenged by low wholesale milk prices. Contacts expressed widespread uncertainty about trade policy and forthcoming weather patterns. Community Perspectives Nonprofits continued to report elevated demand for social services, particularly for food assistance and even after the resumption of the Supplemental Nutrition Assistance Program. The rising cost of health insurance is affecting both social services providers and clients. A food bank had to cut employee health-care benefits in response to higher costs. Another nonprofit reported increased use of its medical clinic. Several contacts noted their concern with the anticipated rise in the uninsured population as the enhanced ACA subsidies expire and changes to Medicaid requirements are implemented in 2026. Contacts worried that individuals will lose out on routine and preventative care, and hospitals will have to bear the financial toll of caring for the uninsured. This comes at a time when rural and smaller metro hospitals are struggling to recruit physicians and other medical staff. The financial pressure could force hospitals to close in these places. For more information about District economic conditions visit: https://www.dallasfed.org/research/texas.

• •توسع النشاط الاقتصادي في منطقة دالاس بشكل معتدل، مع انتعاش قوي وملحوظ في قطاع التصنيع ونمو في قطاع الخدمات.
• •نما التوظيف بشكل طفيف، حيث كان التوظيف معتدلاً في التصنيع ومستقراً في الخدمات، مع تحسن في معدلات الاحتفاظ بالموظفين نتيجة القلق من الوضع الاقتصادي العام.