Economic activity in the Fifth District of the United States has seen modest growth, according to a recent report by the Federal Reserve. Consumer spending increased slightly, with a rise in business travel offsetting a decline in leisure travel. Residential real estate activity experienced a minor slowdown, while commercial real estate remained stable.
The labor market showed slight improvement as some firms raised wages to attract skilled workers who were difficult to find. A chartered bus company noted an increase in driver availability but had to "dramatically" raise wages for mechanics. Similarly, a lighting manufacturer implemented a $2 per hour wage increase for production workers.
Hurricane Helene significantly impacted parts of the Fifth District, particularly western North Carolina, causing damage and leading to increased unemployment claims. The hurricane's effects are still being assessed.
Price growth has eased slightly, with manufacturing firms reporting modest price increases compared to last year. Service providers noted moderate annual price growth, while some consumer-facing businesses hesitated to raise prices further due to customer resistance.
Manufacturing activity was flat or slightly up for some producers. A fuse panel manufacturer reported strong backlogs into 2025 due to large orders, while other manufacturers faced delays due to uncertainty.
Port activity increased slightly as ports worked quickly ahead of an anticipated worker strike that ended with minimal disruption. Despite this, trucking demand remained flat with decreased industrial equipment movement.
Consumer spending picked up modestly since the previous report. Retailers saw increased sales and shopper traffic, although transaction volumes remained flat compared to last year. Business travel saw an uptick, but leisure travel slowed down partly due to the active hurricane season.
Residential real estate experienced a slight downturn attributed to seasonal factors and anticipation of rate cuts. Online buyer traffic stayed strong despite fewer in-person viewings.
Commercial real estate leveled off with decreased vacancies in prime spaces but continued vacancy growth in lower-grade markets. Some companies delayed major capital expenses until 2025 amid economic uncertainties.
Financial institutions reported modest increases in loan demand driven by refinancing activities following interest rate cuts. Credit quality remained stable despite heightened competition for deposits.
Nonfinancial services providers saw little change in demand or revenue stability amid election-related uncertainties and international conflicts affecting investment decisions.
For further details on District economic conditions: https://www.richmondfed.org/research/data_analysis
