The report, covering activity through mid-November, shows softening demand, increased price sensitivity and widening signs of strain across lower- and middle-income households. Together, the themes reveal an economy still growing but with flagging momentum as 2026 approaches.
A Final Reading on a Slowing Year
This eighth and final edition of the Beige Book, released on Nov. 26, consolidated nationwide reports from business contacts, community organizations and economic observers. While overall activity was described as little changed, the tone reflects the most broadly cautious readings of the year. Many respondents pointed to weaker demand, persistent cost pressures and rising uncertainty, factors that have steadily accumulated across the 2025 reporting cycle. Compared with the first Beige Book of the year, which showed uniformly positive or neutral readings across major categories, the final report demonstrates a clear shift toward pessimism.
Consumer Spending Softens as Households Adjust
Consumer spending emerged as the weakest part of the economy, with more negative assessments in this area than in any other major category tracked by the survey. The report noted “softening demand,” particularly among low- and middle-income households, who have become increasingly sensitive to higher prices and more selective with discretionary purchases.
Contacts cited reduced general merchandise spending, lower restaurant traffic, weak leisure travel and a noticeable pullback in big-ticket items. Weaker auto sales, including a decline in electric vehicle purchases after the expiration of federal tax credits, further underscored the cooling environment.
Even where affluent consumers remained relatively resilient, the pattern of trading down, delaying purchases or opting for lower-priced alternatives appeared consistent. Several respondents tied the spending pullback to disruptions in SNAP benefits and broader household budget strain following the government shutdown. The report made clear that the shift in spending behavior is not isolated to any one region but reflects a broad, system-wide recalibration by consumers.
Advertisement: Scroll to Continue
Summary of Survey Sentiment Across 12 Federal Reserve Banks. November Release
| |
Domestic Product |
Job Market |
Consumer Spending |
| Very positive |
0 (+0) |
0 (0) |
0 (0) |
| Somewhat Positive |
4 (-2) |
1 (+0) |
2 (-3) |
| Neutral / Mixed Signals |
4 (+2) |
5 (-2) |
1 (-3) |
| Somewhat Negative |
4 (+0) |
6 (+2) |
9 (+6) |
| Very negative |
0 (+0) |
0 (+0) |
0 (-1) |
Source: Federal Reserve, chart by PYMNTS Intelligence
Notes:
1. The Federal Reserve does not aggregate respondent views, classification is subject to the judgment of PYMNTS Intelligence.
2. Values in brackets represent the change from October figures.
Lending Conditions Reflect the Slowdown
Lending activity varied but echoed the same undertone of restraint. While some areas reported stable or slightly improving credit conditions, the dominant theme was caution. Loan demand was mixed, with several parts of the financial system seeing declines in consumer lending, tighter credit standards and borrowers delaying applications amid uncertainty. Small businesses in particular faced pressures from higher costs, slower sales and reduced access to predictable funding, factors that heightened concerns around delinquencies and defaults.
Households showed increased use of debt to cover basic expenses, and lenders reported that loan quality remained generally sound but under growing pressure. The Beige Book noted that underwriting was stable overall but trending more conservative, especially where businesses and consumers signaled hesitance to take on new obligations in the current environment.
Businesses Enter 2026 With Limited Confidence
The outlook component of the Beige Book shows little movement compared with prior months, but the underlying tone has tilted more negative. Respondents increasingly expect slower activity in the early months of 2026 as cost pressures, policy uncertainty and weakening demand weigh on hiring and investment decisions. Many businesses shifted to replacement-only hiring, reduced hours or selective freezes, reflecting both reduced demand and efforts to control costs.
Evolution of Sentiment Across Areas
While some sectors benefited from structurally strong demand, such as those tied to data centers or specific parts of manufacturing, these pockets were not large enough to lift broader confidence. Across many industries, contacts described delaying capital expenditures, holding back on expansion plans and waiting for greater clarity on tariffs, interest rate policy and consumer behavior.
Taken together, the final Beige Book of 2025 portrays an economy navigating a delicate transition.
Growth has not stalled, but households and businesses are adapting to conditions that have become progressively more restrictive.
As the new year approaches, the question is whether renewed stability can help restore momentum, or whether rising caution becomes the dominant theme of early 2026.
