Chicago Fed: Economic Activity Rises Modestly


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- Economic activity in the Federal Reserve's Seventh 
District, which includes Illinois, Indiana, Michigan, Wisconsin and Iowa, 
increased modestly in late May and June, according to the July Beige Book 
released by the Federal Reserve Bank of Chicago on Wednesday (7/15).

   Manufacturing demand increased moderately during the reporting period, with 
machinery sales rising strongly across several sectors, including defense and 
data center construction. Primary metals demand also increased slightly, 
supported by sales to the defense sector and data center builders, while heavy 
truck production increased slightly and auto industry demand was flat overall.

   According to the same report, business spending increased slightly in late 
May and June, with capital expenditures ticking higher as companies invested in 
new buildings, equipment and software. Demand for truck transportation also 
increased slightly, while freight rates rose amid elevated fuel prices.

   In the agricultural sector, contacts said expectations for 2026 farm income 
deteriorated as crop prices weakened and most livestock prices were flat. Corn, 
soybean and wheat prices all declined during the reporting period, while 
fertilizer and fuel prices dropped as transportation blockages eased in the 
Middle East.

   Across the district, contacts reported moderate increases in producer 
prices, driven by higher costs for energy, shipping, and raw materials such as 
chemicals and plastics, with many contacts linking the increases to the 
conflict in the Middle East. Wages increased modestly, while benefits costs 
rose at a moderate pace.

    




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