Overall Economic Activity Economic activity increased modestly since early July. Ten of the twelve Federal Reserve Districts reported growth in the slight to moderate range; two Districts reported no change. Consumer spending grew slightly on balance; reports reflected both heightened price sensitivity on the one hand and solid high-end purchases on the other. Auto sales were mostly subdued, dampened by downbeat consumer confidence, high fuel prices, and rising financing costs. Tourism activity increased. Notably, airlines reported strong demand despite higher airfares. Manufacturing activity picked up across most Districts, with some highlighting ongoing strength in demand for defense and data center-related orders. Services firms reported slight to modest increases in activity. Financial conditions improved slightly as loan volumes remained solid or increased across most Districts. Residential construction declined while nonresidential construction increased on balance, with some Districts noting a high concentration of activity related to data center projects. Agriculture conditions saw slight improvement but generally remained strained; the livestock sector was strong while conditions were stressed among crop producers. The general outlook for the coming months was positive, but sentiment was mixed across sectors, with contacts reporting heightened uncertainty surrounding the effects of higher energy prices, policy, and international conflict 02-SEP-2026 02:00 PM ET