The Federal Reserve's Beige Book survey reveals weakening consumer spending is dampening economic growth across most US regions. The central bank reported that eight of 12 districts saw flat or declining activity, with many businesses citing economic uncertainty and lower-income consumers pulling back on purchases.

Employment levels remained generally stable despite businesses exploring artificial intelligence and automation to improve productivity. The report noted that while firms are adopting AI technologies, most emphasize productivity enhancement rather than replacing workers. Moderate inflation persisted in eight districts, though companies expect price increases to slow somewhat in the near term.

Wage growth remained modest to moderate across most regions, with some areas experiencing upward pressure on total compensation due to rising health insurance costs. After three rate cuts in 2025, the Fed held borrowing costs steady in January, with some policymakers considering potential rate hikes if inflation remains elevated. The report, compiled through February 23, preceded recent Middle East tensions that have driven oil prices higher.