The Federal Reserve has released its latest report on economic activity in the Fifth District, noting a modest overall increase. Consumer spending has slowed, attributed partly to adverse winter weather affecting retail sales and leisure travel. Nonfinancial service providers have seen modest demand growth but remain uncertain about the economy's direction. Financial institutions reported a modest rise in loan volumes, while manufacturing activity remained flat amid concerns over tariffs impacting supply chains and costs.

Employment levels in the district have not changed significantly. Some federal employees were laid off, and private sector businesses reduced jobs due to cuts or cancellations of federal funding. Hiring slowdowns were noted across various sectors, including an IT recruiting agency and a furniture manufacturer. The challenge of finding skilled workers persists, with increased competition in some industries exacerbating this issue.

Price growth has been moderate annually, with nonmanufacturing firms seeing moderate price increases and manufacturing firms reporting modest growth. Tariffs are cited as a factor leading to increased input costs, although some companies feel unable to raise their prices further.

Manufacturing remains flat, with many contacts expressing uncertainty due to potential tariffs. A few manufacturers reported an uptick in orders as customers anticipate future tariff impacts on prices. However, other manufacturers face challenges such as decreased new orders and retail division weakness.

Cargo volumes have remained stable despite winter weather disruptions along the East Coast causing isolated shutdowns and delays. Ports did not observe a spike in shipments due to potential US import tariffs but maintain a moderately favorable outlook for the year ahead with ongoing capital investments.

Consumer spending increased modestly but was affected by winter weather and consumer price sensitivity. Retailers reported positive growth despite these challenges, while tourism and hospitality sectors saw slowdowns due to weather disruptions.

Residential real estate conditions stayed constant, though buyers face limited inventory and high mortgage rates. Concerns about job loss also deter home purchases. Builders face delays from weather events and regulatory processes.

Commercial real estate activity paused amid policy uncertainty, with slight upticks noted in office space usage as more employees return to work in person.

Financial institutions saw a steady increase in loan demand within commercial real estate portfolios while consumer lending showed mixed results; home equity loans rose modestly while auto and first mortgages softened.

Nonfinancial service providers experienced modest demand increases but remain cautious about future trends amid tariff uncertainties affecting business decisions.

For more detailed information on District economic conditions: https://www.richmondfed.org/research/data_analysis