U.S. economic activity rose slightly in November, with three of the Federal Reserve's 12 districts reporting modest or moderate growth, offsetting two districts with flat or slightly declining activity, according to the Fed's latest Beige Book report.

The Wednesday report, which is one of eight released by the Fed annually, reported growth in economic activity and expectations for continued growth across geographies and sectors.

Businesses have optimism that demand will rise in the coming months, the report said.

Key Insights From November Fed Beige Book

Consumer spending was stable: Businesses that are consumer-oriented reported sensitivity to price increases and more focus on quality. Softer sales were reported by restaurants as consumers held back on spending for this segment. Apparel and snowmobiles also saw weakened sales in the period due to the weather.

Low Mortgage demand: The report found that mortgage demand was low with home loan demand mixed during the reporting period across districts.

Farm equipment: One of the key takeaways from the report is farm equipment sales being a headwind on investment activity with concerns that the prices of the equipment could see weakened demand continue given weakness in the farm economy.

Energy activity: The oil and gas sector was flat for the November period, but demand for electricity generation experienced a sharp increase, the report said. Rapid expansion of data centers and investments in renewable generation capacity were themes in the report.

Employment: A slowdown in hiring demand was reported, but employment held steady for the period with wage increases listed as "modest." Lower worker turnover in the reporting period and fewer layoffs may have contributed to lower hiring demand.

Outlook: The Beige Book shows a neutral outlook with some businesses still expressing uncertainty about the direction of the economy.

Read Also: Fed Beige Book August: Economic Activity Slows As 9 Districts Report Flat Or Declining Trends, Consumer Spending Weakens

District-Specific Developments

Boston: Economic activity down slightly, while prices increased and employment held steady. Warmer weather led to decreased spending at restaurants and on select goods.

New York: Economic activity expanded slightly, led by growth in the manufacturing sector. Employment in the region was up slightly, with moderate wage growth.

Philadelphia: Economic activity was up after falling slightly in the last period. Growth in the nonmanufacturing sector helped offset flat consumer spending.

Cleveland: Economic activity grew modestly in November, with the outlook expecting increased activity ahead. Employment levels were up slightly and nonresidential construction activity increased.

Richmond: Economic activity grew slightly despite the port worker strike and Hurricane Helene impacting the region.

Atlanta: Economic activity grew during the reporting period with retail sales improving slightly. Employment was steady and wages grew slightly for the region.

Chicago: Economic activity grew slightly with consumer and business spending rising during the period. Construction and real estate activity was flat for the district.

St. Louis: Economic activity slightly increased with prices increasing moderately. Businesses in the region noted increases in inventories ahead of potential import tariffs.

Minneapolis: Economic activity increased slightly alongside employment growth. Commercial and residential real estate saw growth in the district.

Kansas City: Economic activity was modest with balance across sectors. The outlook for consumer spending was strong for the district.

Dallas: Economic activity rose moderately, with growth in nonfinancial services, manufacturing, and retail. The district saw increased employment and higher wage growth.

San Francisco: Economic activity was stable. Manufacturing, residential real estate and financial services increased in the reporting period.

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Image created using artificial intelligence via Midjourney.