Economic activity continued to expand at a modest to moderate pace across the 12 Federal Reserve Districts in March and early April. Outlooks remained positive, but contacts in various sectors including manufacturing, agriculture, and transportation expressed concern about the newly imposed and/or proposed tariffs. Consumer spending rose in most regions, with gains noted for nonauto retail sales and tourism, but mixed results for vehicle sales. Manufacturing activity grew moderately, and demand for nonfinancial services was mostly solid. Residential construction and real estate activity expanded further, although low home inventories continued to constrain sales in several Districts. Loan demand increased, and commercial real estate activity and construction improved since the last report. Transportation services activity expanded in over half of the reporting Districts, buoyed by increases in port traffic and/or air, rail and/or trucking shipments. Agricultural conditions were little changed or worsened on net, in part due to persistent drought conditions. Contacts in the energy sector cited a pickup in activity, except in the Richmond District, where coal production was flat and natural gas production dipped slightly.

Employment and Wages
Widespread employment growth continued, with most Districts characterizing growth as modest to moderate. Labor markets across the country remained tight, restraining job gains in some regions. Contacts continued to note difficulty finding qualified candidates across a broad array of industries and skill levels. Reports of labor shortages over the reporting period were most often cited in high-skill positions, including engineering, information technology, and health care, as well as in construction and transportation. Businesses were responding to labor shortages in a variety of ways, from raising pay to enhancing training to increasing their use of overtime and/or automation, among other strategies. Upward wage pressures persisted but generally did not escalate; most Districts reported wage growth as only modest.

Prices
Prices increased across all Districts, generally at a moderate pace. There were widespread reports that steel prices rose, sometimes dramatically, due to the new tariff. Prices for building materials continued to rise briskly, especially for lumber, drywall, and concrete. Transportation costs also generally rose, with contacts citing higher fuel prices and shortages of truck drivers as the primary causes. There were scattered reports of companies successfully passing through price increases to customers in manufacturing, information technology, transportation, and construction. Businesses generally anticipate further price increases in the months ahead, particularly for steel and building materials.
Highlights by Federal Reserve District

Boston
Revenues and sales were moderately higher than a year earlier at almost all contacted retailers, manufacturers, and software and IT services firms. Most commercial real estate markets recorded positive results; residential markets continued to see inventory shortages and rising median prices. Business sector respondents' outlooks remained positive.

New York
Economic activity grew at a modest pace, while labor markets have remained tight. Input price pressures have persisted, and selling price increases have picked up somewhat. Housing markets and commercial real estate markets have been steady to slightly softer.

Philadelphia
Economic activity continued to grow at a modest pace, in particular for nonauto retail sales, tourism, nonfinancial services, and nonresidential leasing. Manufacturing accelerated to a moderate pace, while existing home sales declined. Auto sales continued to decline, while construction activity was flat. On balance, employment, wages, and prices continued to grow modestly.

Cleveland
The District economy expanded at a moderate pace. Labor markets tightened, with wage pressures noted broadly. Rising commodities prices and transportation costs are pressuring goods producers. Stronger confidence in the economy supported rising demand in manufacturing, retail, and nonfinancial services. Construction activity remained robust.

Richmond
The regional economy expanded at a moderate rate. Ports and trucking firms continued to report robust activity but faced capacity constraints. As a result, manufacturers faced longer delivery times and, in some cases, began stockpiling raw materials. Prices grew moderately, overall, but steel and aluminum prices rose sharply and were expected to rise further as a result of the tariffs.

Atlanta
Economic activity increased modestly. Contacts continued to report difficulties filling positions in high-demand/high-growth sectors. Many contacts noted steady but modest wage pressures. Overall, nonlabor input costs were subdued. Retail sales were stable. Manufacturers noted an increase in new orders and production. District bankers reported solid commercial and consumer loan growth.

Chicago
Growth in economic activity remained at a moderate pace. Employment, consumer spending, and manufacturing production increased moderately, and business spending and construction and real estate activity grew slightly. Wages and prices increased modestly and financial conditions improved slightly on balance. Income prospects for the agricultural sector improved a bit.

St. Louis
Economic conditions continued to improve at a modest pace. District bankers reported an increase in lending activity driven by robust commercial and industrial loan growth. Some steel and aluminum manufacturers announced plans to reopen facilities and call back workers. District acreage for the four major crops for the year is expected to be the same as in 2017.

Minneapolis
Ninth District economic activity grew moderately. Employment grew modestly even as hiring demand was robust, due to tight labor supply. Wages grew moderately, as did prices overall, but price pressures at the wholesale level appeared to accelerate. While growth was noted across sectors, activity in professional services, energy, and mining was particularly strong.

Kansas City
Overall economic activity in the Tenth District increased moderately, with further growth expected in coming months. Manufacturing, energy, and consumer spending activity expanded at a moderate pace, while real estate and business services activity grew modestly. Agricultural conditions remained weak, while District employment and wages rose modestly.

Dallas
Economic activity grew moderately, with a rebound in retail sales and an acceleration in financial and nonfinancial services activity. Robust expansion in the energy industry continued, while growth in manufacturing eased somewhat. Hiring was solid despite a tight labor market, and wage and price growth remained elevated. Numerous contacts expressed concern about new tariffs and trade policy uncertainty, although outlooks overall were still positive.

San Francisco
Economic activity in the Twelfth District continued to expand at a moderate pace. Sales of retail goods were down slightly, and growth in the consumer and business services sectors remained solid. Conditions in the manufacturing sector picked up modestly. Activity in residential real estate markets remained strong, and conditions in the commercial real estate sector were solid. Lending activity ticked up.