Beige Book
Current Release

Officially known as the Summary of Commentary on Current Economic Conditions by Federal Reserve District, the Beige Book is a report published eight times per year on scheduled days. The 12 Federal Reserve Banks gather anecdotal information on current economic conditions in their respective Districts from business contacts, economists, market experts, community organizations, and other sources. The Beige Book contains a summary of the information written by each District’s Reserve Bank, as well as an overall summary of the District-level reports prepared by one of the Reserve Banks on a rotating basis.

The report on this page is the Chicago Fed’s latest contribution to the Beige Book. For the latest full report and for the archive of past full reports, visit the Board of Governors of the Federal Reserve System site.

February 2023

Summary of Economic Activity

Economic activity in the Seventh District increased modestly overall in January and early February. Contacts generally expected slow growth in the coming months, though many expressed concerns about the potential for a recession this year. Employment increased moderately; consumer spending increased modestly; business spending and manufacturing increased slightly; nonbusiness contacts saw little change in activity; and construction and real estate activity decreased modestly. Prices and wages rose moderately, while financial conditions were unchanged. Agricultural incomes were expected to be lower in 2023 than in 2022.

Labor Markets

Employment increased moderately in January and early February, and contacts expected a somewhat slower increase in employment over the next 12 months. Many contacts continued to report difficulty finding workers, though the number of applicants for open positions increased. There were also more contacts reporting they were not looking to hire or were reducing their workforce. Wage and benefit costs continued to increase, with several contacts noting higher health insurance costs.


Prices rose moderately over the reporting period, and contacts expected a similar rate of increase over the next 12 months. Producer prices rose moderately, with contacts highlighting higher costs for raw materials and energy. Several contacts noted that growth in shipping costs had slowed noticeably, particularly for long distance shipping. One contact indicated that there was a noticeable increase in wholesale used vehicle prices as dealers stocked up in anticipation of strong demand. Consumer prices generally moved up with the continued elevated level of demand and the passthrough of higher costs, though there was growing customer resistance to paying higher prices.

Consumer Spending

Consumer spending increased modestly over the reporting period. Nonauto retail sales were up slightly, helped by promotional offerings. There was strong sales growth in the personal care and sporting goods sectors, but weaker growth in the grocery, electronics, and apparel sector. Contacts noted softer discretionary spending by consumers, especially for lower-end products. New and used light vehicle sales were unchanged, and low inventories continued to support high prices. Leisure and hospitality activity continued to expand.

Business Spending

Business spending increased slightly in January and early February. Capital expenditures remained stable on balance, with contacts reporting purchases of new software and replacing old equipment. Demand for transportation services was little changed as activity remained at a high level. Shipping backlogs declined but remained elevated. Retail inventories moved down closer to comfortable levels, and contacts said promotions had been successful in helping pare stocks. Auto inventories continued to slowly recover from low levels and were most limited for the most popular models. In manufacturing, inventories remained slightly elevated, though wait times for raw materials improved. Many contacts indicated they were no longer experiencing supply chain disruptions.

Construction and Real Estate

Construction and real estate activity decreased modestly over the reporting period. Residential construction was down modestly. Home remodeling activity was steady, though one contact saw a decrease in quoting. Residential real estate activity decreased moderately. Sales volumes were down across all segments, but one contact noted an increase in leasing of multifamily units. Home prices were little changed overall, while rents increased slightly. Nonresidential construction was unchanged over the reporting period, with contacts noting solid demand from health care and the public sector but weaker demand for distribution center construction. High interest rates and input costs continued to hold back activity, while lead times remained long for critical products such as HVAC and power generation equipment. Commercial real estate activity was little changed over the reporting period. Demand for high quality space remained solid, with one contact highlighting strong interest in retail space previously occupied by big box tenants. Overall, prices and rents decreased modestly, while vacancies and the availability of sublease space were up moderately.


Manufacturing demand increased slightly in January and early February. Manufacturing backlogs were down slightly as contacts continued to struggle with short supplies of certain inputs, though overall, wait times improved. Steel demand rose, with contacts noting growth in sales to other manufacturing sectors and the energy industry (both for renewable and nonrenewable production). Fabricated metals demand decreased slightly across a range of sectors. Auto production ticked up but remained constrained by semiconductor and labor availability. Heavy truck orders increased slightly. Heavy machinery production moved down some but remained at a high level, supported by large backlogs and solid spending from the agriculture and infrastructure construction sectors.

Banking and Finance

Financial conditions were little changed over the reporting period. Bond and equity markets saw a slight increase in asset values and flat volatility. There was a small decline in business loan demand across a range of sectors. Business loan quality edged down, and standards tightened slightly. In consumer markets, loan volumes decreased moderately, with contacts pointing to declines in residential mortgage lending and unsecured consumer loans. Consumer loan quality slightly decreased overall, and one contact noted that credit card and auto loan delinquency rates had edged up and were approaching pre-pandemic levels. Consumer loan standards tightened slightly.


Contacts’ forecasts for District agricultural income for 2023 were mostly for near average returns, down from an above average 2022. Wheat prices were up, in part because of longer Russian inspection times for Ukrainian grain shipments and buyers’ greater reluctance to enter purchase agreements given uncertainty about whether the shipping deal with Russia would continue. Corn and soybean prices were also higher, spurred by uncertainty about the size of South American harvests. Contacts noted that lower costs for some inputs would help farm incomes but rising feed costs were a continuing concern for livestock producers. Egg prices dropped from extremely high levels, and dairy prices were generally lower. There were reports of closures of smaller dairy operations, for which higher interest rates on loans were making it more expensive to expand to a more profitable scale. Cattle and hog prices moved higher during the reporting period.

Community Conditions

Community development organizations and public administrators reported little change in overall economic activity in January and early February. State government officials again saw healthy growth in tax revenues and low demand for unemployment insurance. Small business support organizations reported rising costs for their clients, highlighting higher insurance premiums. Affordable housing developers said they were facing double-digit percentage increases in materials and labor costs, which were stressing the financing structures of projects. As financial supports associated with COVID-19 are coming to an end, nonprofit organizations reported greater demand for job search support as well as challenges to their own revenue streams.

Subscribe to the Beige Book

To sign up for updates or to access your subscriber preferences, please enter your contact information below.

Thank you!

Thank you for your comments.

Having trouble accessing something on this page? Please send us an email and we will get back to you as quickly as we can.

Federal Reserve Bank of Chicago, 230 South LaSalle Street, Chicago, Illinois 60604-1413, USA. Tel. (312) 322-5322

Copyright © 2023. All rights reserved.

Please review our Privacy Policy | Legal Notices