Beige Book: Modest Growth as Lower, Middle-Income Feel Strain

Beige Book: Modest Growth as Lower, Middle-Income Feel Strain

June 03, 2026

• Beige Book
• Article
• Regional Economy

The Southeast economy expanded modestly during April and early May, as rising prices attributed to the effects of the Middle East conflict and tariffs weighed on lower- and middle-income households, according to the new Beige Book from the Federal Reserve Bank of Atlanta.

Several contacts highlighted growing financial stress among middle-income households, particularly those who do not qualify for public assistance or are unfamiliar with available support resources. Social service providers reported increased demand for assistance, while nonprofit organizations said fundraising was challenging amid "donor fatigue."

Broadly, business contacts reported that prices and nonlabor costs increased moderately over the six-week reporting period, as rising oil prices drove up gas prices, airline fares, and shipping surcharges. Many firms expect ongoing price hikes for petrochemical products over the coming months as impacts from the conflict in the Persian Gulf work through value chains.

That process could take a while. Energy sector contacts continued to predict that conflict-induced price dynamics and supply chain disruptions will likely have a lasting and unpredictable impact in the months ahead.

The Sixth District labor market continued to soldier on, with employment levels in general reported to be unchanged to slightly lower, as most firms continued to keep head counts even or adjust downward through attrition. Reports of layoffs remained limited. Several firms noted that artificial intelligence and automation more generally have boosted productivity and shifted job roles. At the same time, most contacts said they don't expect AI and automation to lead to significant job cuts in the near term.

In other sectors:

• Retail generally followed its two-track trend: strong demand for premium goods and services, even as price sensitivity among middle- and lower-income consumers fed slower restaurant traffic, increased promotional activity, and constrained demand for discretionary services.
• Travel and tourism contacts said demand weakened as a result of higher energy and travel costs.
• Residential real estate conditions deteriorated a bit across the District as economic uncertainty and high mortgage rates dampened demand. However, high-end sales and certain markets remained durable.
• District ports reported solid shipments of automobiles and other equipment that roll off and onto ships, unlike containers. As for container volume, it declined year over year, but the decrease reflects a comparison to unusually high volume during 2025's pretariff inventory buildup.
• Manufacturing activity grew modestly, according to contacts. Makers of tractor parts, for example, noted significant declines in orders from customers in the Middle East until very recently, but healthy domestic demand.
• Consumer lending declined, driven by credit cards and other consumer loans (excluding auto loans), and more banks reported minor increases in loan delinquencies.

The Beige Book is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve districts. The Fed System and regional reserve banks publish the Beige Book eight times a year, before each meeting of the Federal Open Market Committee. The reports from each District characterize regional economic conditions based on a variety of mostly qualitative information, gathered directly from District sources, including interviews and online questionnaires completed by businesses, community organizations, economists, market experts, and other sources. The Committee next meets June 16 and 17.