Chicago Fed: Economic Activity Rises Modestly

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.