Thursday, April 3, 2025

Election Uncertainty Stalls U.S. Economy: What You Need to Know!

Newsis

A report revealed that economic activity in the United States has effectively stagnated over the past month, just two weeks before the presidential election. Local businesses are notably delaying investments amid increasing uncertainty related to the election.

On Wednesday, the Federal Reserve published its Beige Book report via its website. The Beige Book, which is issued eight times a year, aggregates economic assessments of regions overseen by the 12 Federal Reserve Banks. With the previous report released on September 4, this seventh report of the year, prepared by the Federal Reserve Bank of New York, incorporates survey data conducted up until October 11.

The report indicates that three of the 12 Federal Reserve Banks—Dallas, Chicago, and Richmond—reported slight increases in economic activity. In contrast, Minneapolis, Atlanta, and Philadelphia noted declines. The remaining six banks reported little to no changes in economic activity.

In the report, the Fed stated, “Economic activity has remained largely unchanged across almost all regions since early September,” adding, “Manufacturing activity has slowed in most areas.” It also remarked, “Consumer activity is mixed,” highlighting that “some regions experienced an increase in consumers opting for more affordable purchases.” In the real estate sector, while the housing market shows signs of recovery, the commercial real estate market remains stagnant. The port strike on the East Coast from October 1-3 did not have a significant economic impact, and the Atlanta Fed confirmed damages from last month’s hurricane that struck the southeastern United States.

During the survey period, more than half of the Federal Reserve Banks reported slight increases in employment. Wage growth and inflation rates have remained moderate across most regions. The San Francisco Federal Reserve Bank noted that some employers have started hiring for positions that have been on hold for the past year.

The report referenced the upcoming November presidential election 15 times, indicating that election uncertainty is causing delays in consumer purchases and business investment decisions. The New York Federal Reserve Bank reported that businesses are hesitant to make hiring decisions due to the uncertainties related to the election.

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