The Beige Book

The Beige Book is published eight times per year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector.

Boston (First District) Beige Book Report, April 15, 2026

Summary of Economic Activity

Economic activity declined slightly overall, reflecting a combination of weaker real estate activity and mostly stable activity elsewhere. Consumer spending was about the same as in the last report, excluding the effects of severe winter snowstorms. Manufacturing activity edged higher, and nonfinancial services activity improved slightly. Banking and financial services institutions reported stable activity, although banks reported a slight increase in nonperforming loans. Commercial real estate leasing and sales activity were flat on balance, and nonresidential construction receded slightly. Home sales slowed further, and apartment leasing declined slightly. Employment and wages were roughly flat. Prices increased moderately, with sharp increases in energy prices linked to the conflict in the Middle East. Also related to the conflict, contacts perceived an increase in uncertainty, although most of them remained optimistic about near-term business prospects.

Labor Markets

Employment and wages were stable on balance, but conditions varied across sectors. Staffing firms reported increased demand for temporary contract workers but not for direct hires, a potential signal that employers resumed hiring but remained cautious. Health care industry and life sciences contacts reported an increase in layoffs attributed to a combination of reduced research funding, AI-driven productivity growth, and general cost adjustments. A construction contact noted reduced hiring compared with last year, as supply bottlenecks and tariff-related uncertainty blunted construction demand. A higher education contact relayed that job market outcomes for recent graduates improved compared with the previous two years but remained weaker than in 2022. The number of job applicants increased modestly across industries, although rural areas continued to report tight labor supply. Wages were unchanged aside from a modest increase at one manufacturer due to cost-of-living adjustments. Benefits were flat, but some contacts noted that rising health insurance costs created upward pressure on labor costs. Contacts in most industries expected stable head counts over the next six months but cautioned that energy-price volatility sparked by the conflict in the Middle East had clouded the outlook. Staffing firms anticipated further increases in hiring for contract workers.

Prices

Prices increased moderately overall, as many contacts reported stronger cost pressures. The conflict in the Middle East was cited as contributing to sharp increases in energy prices for businesses and homeowners and to moderate increases in industrial metals prices. Construction prices rose slightly and are expected to face more upward pressure in response to the recent commodity price increases. Food prices rose further at a modest pace. A higher education contact reported very sharp increases in computing hardware costs and moderate to large increases in software costs. Health insurance costs rose further at an above-average pace. Among manufacturing, retail, and financial and nonfinancial services firms, output prices rose at a slight pace overall and did not keep pace with cost increases. Hotel room rates fell sharply in the Boston area on weak demand but were stable elsewhere in the region. Most firms did not plan to raise prices in the near term, but contacts noted that the pricing outlook was hazy owing to recent cost shocks and lingering uncertainty related to tariffs.

Consumer Spending

On balance, consumer spending was flat in recent months, with contacts reporting mixed results. Heavy snowfalls supported strong tourism and hospitality activity near the region's ski resorts, resulting in modest increases in related consumer spending compared with one year earlier. In contrast, Boston-area hotels reported sharp declines in average occupancy and nightly room rates in February, compared with either January 2026 or February 2025. The reported declines were due in part to snowstorm-related cancellations and in part to the Boston Bruins having a reduced hockey game schedule around the Olympics; at the same time, contacts noted that visitor volumes in Boston were also down throughout February and pre-dated these special factors. On average, retailers reported slight-to-modest increases in revenues linked to output price increases. Restaurants experienced a slight increase in activity in February and March, but cost increases squeezed profits further. Contacts grew slightly more optimistic on average, but many noted the conflict in the Middle East had complicated decision making as they waited to see how their costs would be affected.

Manufacturing and Distribution

Manufacturing activity rose slightly in recent months. Most contacts reported performance consistent with, or modestly above, expectations, though the strength of demand varied across firms. Tariff-related impacts have been largely absorbed into firms' business operations and pricing strategies. The conflict in the Middle East resulted in shortages of raw materials and energy for two firms and boosted uncertainty, according to several contacts, including one that said it had become hard to plan inventory levels of raw materials and finished goods. One polymer manufacturer delayed capital expenditure plans and was considering a temporary increase in inventory to hedge against supply disruptions. Most firms expressed a neutral to slightly optimistic business outlook but noted that current uncertainty remained challenging for consumers and employees.

Nonfinancial Services

Activity increased slightly overall, as staffing contacts experienced modest growth in revenues and a higher education institution experienced somewhat weaker demand. The latter reported notable declines in applications from international students and intended computer science majors, which resulted in a slight reduction in total applications for fall 2026 admissions. Staffing firms reported increased labor demand—though mostly for temporary contract work—indicating a reluctance to commit to longer-term hires. Optimism increased among staffing contacts, who expected labor demand to rise further going forward. The higher education contact, in contrast, expressed strong concerns about the outlook related to a combination of upside risks to costs and downside risks to student demand.

Financial Services

Business activity in the banking and financial services sectors was unchanged on average since the previous report. Banking institutions reported no changes in credit standards, loan volume, or loan demand, although loan pricing eased a bit, and the share of nonperforming loans edged up. Financial services firms experienced stable activity, with steady profits and capital expenditures, and expected no major changes going forward. Contacts in commercial banking industry expected loan demand to increase over the near term but also forecasted a further rise in nonperforming loans. Despite the mostly benign outlook, contacts across the financial services sector noted that the conflict in the Middle East had led to increased uncertainty.

Real Estate and Construction

Commercial real estate contacts reported flat leasing and sales activity on average. Retail leasing and fundamentals remained strong, industrial leasing activity was unchanged, and office leasing was flat or up slightly. Nonresidential construction slowed further slightly, and activity in the sector was largely limited to data centers and government projects. The outlook turned more pessimistic, as contacts expected higher longer-term interest rates to deter borrowing and construction activity going forward and said that rising oil prices presented additional downside risks. Sales of single-family homes and condominiums slowed modestly in February compared with January and were down sharply from the previous February. Contacts cited this year's harsh winter to explain weak sales but acknowledged that the downward trend might transcend the weather. Nonetheless, most contacts expected home sales to see at least a normal seasonal rebound in the spring. Single-family home prices rose slightly throughout the region, but condo prices fell moderately in most New England states. Multifamily leasing activity pulled back slightly, attributed to reduced inflows of international students. A Providence-area contact said new multifamily development was held back by high taxes and proposed rent control policies.

For more information about District economic conditions visit: www.bostonfed.org/regional-economy.

All Beige Book content going back to 1996 can be found at the Board of Governors website.

The Minneapolis Fed hosts the Beige Book archives by district, going back to 1970.