US Economic Activity Little Changed Ahead of Next Fed Meeting

• U.S. economic activity was little changed in recent weeks, though employment was weaker in about half of the Federal Reserve's (Fed) 12 districts and consumer spending declined, the U.S. central bank in its latest "Beige Book" report said on Wednesday, November 26, 2025. This is likely reinforcing concerns about the job market as the next interest rate decision nears. The report entails a compendium of survey results, interviews, and other qualitative data from its 12 regional banks.
• Published two weeks ahead of each Fed policy meeting, the report is meant to help central bankers assess the economy's health with timelier, and often more colourful, insight than is available in the official statistics.
• With the data vacuum left by the record 43-day government shutdown that extended into mid-November, the Beige Book should get more weight than usual in the deliberations among deeply divided Fed policymakers, following their decision last month to cut rates by a quarter of a percentage point for the second consecutive meeting. The policy rate now stands in the 3.75%-4.00% range.
• The data flow has resumed since the shutdown ended, but most of the reports issued over the past two weeks have been significantly dated, covering the period just before the shutdown began on October 1, and have offered almost no fresh insight into the health of the economy.
• One of the most current indicators, however, suggests the job market remains in a stable, gradually softening state.
• New claims for unemployment benefits fell last week to the lowest level since April, though the ranks of those remaining on benefits beyond a first week of assistance have plateaued near the highest level in about four years. Together, the figures point to no notable increase in layoffs despite a wave of job-cut announcements from big employers like Amazon, though those out of work are finding it harder to land a new job.
• Overall, interest rate futures markets reflect a high probability of another quarter-percentage-point reduction in borrowing costs at the Fed's December 9-10 meeting. Whatever the decision at next month's meeting, it is likely to be made over the objections of several policymakers and will come alongside a fresh batch of forecasts from Fed officials that will show how inclined they are to bring rates down further next year.

(Source: Reuters)