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, July 15, 2026

Summary of Economic Activity

Economic activity continued to expand at a slight pace. Consumer spending rose modestly, supported by the World Cup soccer tournament, but many consumers showed heightened price sensitivity. Manufacturing activity grew slightly, with strong demand from defense and automation. Bank loan volume ticked up, as did nonfinancial services activity. Real estate activity was mixed, with stable nonresidential leasing, softer construction activity, and moderate declines in home sales. Nonprofits faced difficulties meeting growing client needs. Employment was unchanged, as labor demand remained healthy despite isolated layoffs. Wages rose slightly, but manufacturers reported increased wage competition. Output prices rose slightly, and cost pressures remained widespread. The outlook improved marginally, and perceived uncertainty decreased.

Labor Markets

Employment was roughly unchanged overall. Manufacturers reported slight increases in payrolls, and retail and hospitality contacts said seasonal hires exceeded last summer's levels. Services employment was mostly stable, although one firm reported modest layoffs of white-collar staff because of AI-related efficiency gains. In construction, apprentices experienced layoffs, while more experienced workers held their jobs. Wages rose slightly on average, with increases noted for manufacturing, retail, and hospitality workers; wages were flat otherwise. Job openings inched up, but employers reportedly remained cautious, with hiring proceeding at a very slow pace. Grocery and tourism contacts reported easier hiring compared with last summer but noted the market remained tight in spots. Manufacturers experienced a small increase in applications but, in some cases, struggled to hire and retain workers because of increased wage competition. Most contacts did not expect major changes in headcounts going forward, although one hospitality contact planned to increase hiring moderately.

Prices

Output prices increased slightly on average. Construction prices rose modestly, driven by further increases in input costs. Manufacturers likewise cited mounting cost pressures as the source of modest price increases. A large financial services firm left prices unchanged despite facing moderate cost increases, and nonfinancial services prices were mostly unchanged. Lodging prices rose slightly year-over-year at high-end resorts; meanwhile, more budget-friendly accommodations reported increased price sensitivity among consumers and kept room rates flat despite increased costs. A grocery operator reported modest price increases and observed heightened price sensitivity. Energy costs remained elevated, although one contact mentioned a modest decline in diesel prices, partly alleviating cost pressures. Pricing plans for the near term varied across firms. While multiple firms anticipated holding prices steady, hospital prices were expected to rise slightly, as was tuition for at least one public university.

Consumer Spending

Consumer spending increased modestly overall in recent months, as tourism spending posted modest gains and retail spending grew slightly. However, several contacts mentioned discretionary spending was down for households with modest means owing to high necessities prices. Boston hotel contacts said World Cup bookings were initially below expectations but rose to meet them after room rates were reduced to seasonally typical levels. Bars in Greater Boston also saw a marked uptick in beer sales, which they attributed to the World Cup. The volume of Canadian travelers increased slightly from last summer, but remained well below historical levels, disproportionately affecting some towns in coastal Maine and northern Vermont. Other contacts from Maine and Vermont noted continued strength in luxury travel and softer demand for budget-friendly travel. A grocery chain operator reported overall sales that were softer than anticipated but said higher beef prices had led to record sales of chicken and pork as customers traded down to those lower-priced items. Relative to the spring, when uncertainty spiked because of the conflict in the Middle East, optimism increased on average among retail and tourism contacts, while uncertainty decreased but remained elevated.

Manufacturing and Distribution

On average, manufacturing activity expanded slightly in recent months. However, a few contacts indicated slight or moderate declines in activity, a few noted large increases, and several each reported no change or a slight increase. Changes in capital expenditures, profits, and inventories also varied considerably, with small gains in each on average. The factors driving positive results included mergers-and-acquisitions activity (by a pharmaceuticals firm) and increased demand for precision manufacturing coming from the defense and automation industries. Sources of strain included rising freight and materials costs, as well as labor scarcity. The outlook improved slightly on balance, as two-thirds of contacts reported either increased optimism or no change in expectations, and uncertainty diminished on average.

Nonfinancial Services

Nonfinancial services activity increased slightly overall. Legal and accounting firms reported modest revenue gains, while revenues were flat or up a bit among staffing firms. A contact from one of the region's public universities said the school experienced a moderate increase in student enrollment and slight increases in tuition revenues but also received less state funding. Hospitals in Maine saw stable patient volumes and noted an uptick in capital expenditure that was expected to persist for the second half of the year. The outlook was unchanged for most contacts, but several reported increased optimism, and one felt that the economy in general was gaining momentum.

Financial Services

Bank loan volume and loan demand increased slightly, while credit standards were unchanged. Loan pricing was stable on average, but some banks reported slight decreases and others slight increases in loan rates. Nonperforming loans were unchanged at most banking contacts but rose slightly in one case, and some contacts said they were monitoring delinquencies in light of the strain of elevated inflation on household balance sheets. Despite those concerns, the banking outlook was stable or slightly more optimistic in some cases. A large financial services firm reported flat revenues and profits and expected no major changes in activity going forward.

Real Estate and Construction

Nonresidential leasing activity was about flat on balance, with stable retail leasing, diminished industrial leasing, and a slight increase in office leasing. Some contacts noted small declines in office vacancies and increased office property sales. A Boston contact described renewed interest in retail properties and senior housing among institutional investors. Closed sales of residential properties decreased moderately in May from one year earlier. Nonetheless, home sales increased sharply in New Hampshire during the same period. Excluding New Hampshire, where the median single-family sale price rose moderately, single-family prices were flat on average, while condo prices (including New Hampshire) were down slightly on average. Multifamily leasing was stable, with rent increases in greater Boston still matching inflation. Both residential and nonresidential construction activity eased a bit, with contacts citing high construction costs as a deterrent. The outlook was mostly stable, but contacts cited the prospect of higher interest rates as a downside risk and, by contrast, expected multifamily sales and construction in Massachusetts to get a boost following the disqualification of a proposed rent control measure.

Community Perspectives

Contacts serving low- and moderate-income households reported increased demand for assistance along several dimensions, as families struggled with persistently high prices of food, housing, and transportation. Reliance on food pantries increased further, transportation assistance expanded, and nonprofit organizations received more requests for help with housing payments and health-care supplies. Lower-income consumers reportedly added credit card debt to pay for essential goods. However, some nonprofits reported greater financial stability in 2026 after a turbulent 2025. Nonetheless, many struggled with tight budgets in the face of rising costs and reduced funding, making it difficult to meet the growing needs of communities they serve.

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.