CGTN
05 Jun 2025

The US Federal Reserve stated in its latest Beige Book on Wednesday that economic activity in the United States has declined in recent weeks. The slowdown is partly due to increased economic and policy uncertainty, driven in part by tariffs, which continues to affect the broader economy.

People shop at a store in Manhattan, New York City, US, April 30, 2025. /VCG

The manufacturing sector has experienced a slight slowdown, while consumer spending remains mixed. Some of the 12 Federal Reserve Districts reported increases in spending on items likely to be affected by tariffs, according to the report.

Regarding inflation, the report noted that prices have risen "at a moderate pace." However, it highlighted widespread concerns that growth of costs and prices may accelerate due to mounting pressures from higher tariffs. Several districts described these anticipated cost increases as "strong," "significant," or "substantial."

A pilot boat seen in front of an ocean freight ship at the Port of Los Angeles, California, US, April 30, 2025. /VCG

The outlook remains slightly pessimistic and uncertain, with no change from the previous assessment, the report says.

According to the US-based Institute for Supply Management (ISM), manufacturing activity contracted for the third consecutive month in May. The ISM Manufacturing PMI fell to 48.5 in May, down 0.2 percentage points from April.

A worker is welding a metal door at a factory in Sacramento, California, US, May 27, 2025. /VCG

Susan Spence, chair of the ISM Manufacturing Business Survey Committee, noted that the ongoing uncertainty surrounding tariff policies is hindering business planning and investment decisions.

Source: CGTN