Fed Beige Book shows modest growth as data centers drive U.S. activity

  • Federal Reserve Beige Book reports slight to moderate growth in 10 of 12 districts, supported by private demand, AI infrastructure and defense-related activity.
  • Data centers were mentioned 25 times, while separate Census Bureau data put July data-center construction spending at a $75 billion annual rate, up 57% from July 2025.
  • Employment rose only slightly with half of districts reporting unchanged headcounts, as household incomes grew but consumer weakness, labor shortages and cost pressures persisted.

The U.S. economy continued expanding at a modest pace through late August, supported by private-sector demand, household income growth and sustained business investment in AI infrastructure. Ten of the Federal Reserve’s 12 regional districts reported slight to moderate growth and two reported no change in the latest Beige Book, compiled by the Minneapolis Fed from information collected through Aug. 24. Data centers and related projects supported construction, manufacturing, services and power generation, while employment rose only slightly overall and labor-market conditions remained broadly stable. Consumer spending diverged by income, and energy, insurance, materials and fuel costs continued to pressure businesses and households.

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