Is Everyone Celebrating?

America remains in the virtuous portion of the business cycle, even as headlines point to global conflicts, inflationary pressures, and ongoing contention in our nation’s capital. That said, economic growth is not being felt evenly across the country. Still, moments of collective celebration may be helping sustain momentum in an otherwise uncertain environment. During this long weekend (stock markets are closed tomorrow), our nation is simultaneously celebrating the FIFA World Cup and America’s 250^th anniversary.

Both celebrations were mentioned in the latest Beige Book produced by the Federal Reserve. While it is not typically a celebrated publication, even the dismal scientists across the nation could not help but note the positive impacts these two events are having on the American economy.

This year’s World Cup was mentioned by four of the regional banks in the beige report (New York, Atlanta, San Francisco, and Philadelphia). Their sentiment mostly expressed optimism for the labor market as well as spending within services and the hospitality and leisure segments of the economy. Expectations weren’t universally positive, however. The New York branch noted weaker-than-anticipated ticket sales and advance hotel bookings. It’s probably no surprise the Philadelphia branch noted that their contacts were expecting sustained tourism this summer as a result of America’s 250^th anniversary.

Of the twelve Federal Reserve Districts, ten noted slight to moderate growth in economic activity, while one district reported a slight decline and one reported no change. Consumer spending was mixed across the nation, separated by income groups as affordability becomes more pressing for those on the lower end of the spectrum. Higher-income households are doing fine, while middle-income households are “squeezing more life out of every dollar before deciding to spend it.”  Manufacturing was highlighted as expanding in nine of the districts with just one seeing it slow. More generally, business outlooks for the next six months didn’t move much as uncertainty and concerns about consumption held sentiment back.

Crowds fade from soccer matches and firework displays. Similarly, after the energetic bursts of athletes and mortars dissipate, our economy will be left with the unevenness of the present moment. Folks on the upper rungs of the economy are driving statistics higher while the rest hope for marginal improvements. As America celebrates this weekend, an economy driven more by fundamentals and not one-off events will be waiting when the smoke clears and the cup has been awarded.