March 2026 Beige Book Interview – Little Rock

Announcer: Welcome to this Beige Book episode of the St. Louis Fed’s Timely Topics podcast, where you get the latest on what we’re hearing from business and industry contacts in Arkansas and across the Eighth District. The information shared in this podcast is received from contacts outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials.

Matuschka Lindo Briggs: Welcome to our Beige Book podcast. We’re glad you’re joining us today.

Let’s jump right in and talk about what we’re hearing nationally and right here in our District. This is where we share real-world insights on economic conditions, based on conversations with businesses and industry contacts across the country.

I’m Matuschka Lindo Briggs, the Little Rock regional executive for the St. Louis Fed. And I’m joined today by Brooke Dirtzu, from the Cleveland Fed, and Chuck Gascon, here at the St. Louis Fed.

How are both of you doing today?

Brooke Dirtzu: Great. Thanks for having me.

Chuck Gascon: Happy to be back, Matuschka.

Lindo Briggs: Before we get into the details, it’s helpful to note that the information in this report was collected in mid- to late February, prior to the Supreme Court decision on some of the tariffs. So, we’ll have to wait until the next Beige Book to see how that ruling might shape business sentiment moving forward.

This week’s national summary was written by Brooke and her team at the Cleveland Fed, so she has a great perspective on what contacts across the country are seeing and saying.

Brooke, what stood out most as you were pulling the report together?

Dirtzu: Thanks, Matuschka. That’s a really good point about the timing. Some of the folks on our survey actually mentioned having increased clarity around tariffs before the decision came down. And at a recent roundtable, some businesses told us that tariff changes continue to introduce uncertainty into the mix.

So, here’s the big picture: Overall economic activity picked up at a slight-to-moderate pace in a little over half of the Federal Reserve districts. The rest reported flat or declining activity.

Customer spending was up slightly overall, but the districts that got hit by the winter storm said that retail traffic was generally slow. The storms actually brought some shoppers out though. A grocer in Boston reported an uptick in alcohol sales, which went against the long-term trend. They said it was the storms plus the New England Patriots playoff games that did it.

Lindo Briggs: I wonder if alcohol sales have been up for New Englanders since Brady left.

Dirtzu: Auto sales were mostly down in the districts that tracked them; a lot of folks pointed to ongoing affordability issues.

Gascon: I’ll chime in here and note that retailers in our District also reported slightly increased sales, and that they had met expectations despite some cautious spending among consumers.

And then, similar to Brooke’s comments, we heard from auto dealerships that sales have been falling short of expectations, with low volumes of new and used vehicles sold. One dealership noted that it was tied to tightening credit standards and financing constraints.

Similarly, a furniture manufacturer reported that they were pausing some of their expansion designs because they were seeing weaker demand over the next 12 months.

Dirtzu: Manufacturing activity improved since the last report. Contacts in many districts told us about increases in new orders, and several cited getting a boost from data centers and the energy infrastructure that goes along with them. For example, the Richmond Fed heard from an electric panel manufacturer who’s having a record year, and it’s driven by one customer who makes data center equipment.

Lindo Briggs: Thanks for those updates. Brooke, anything specific you want to share from your district?

Dirtzu: It’s pretty similar to the overall picture. Here in the Fourth District, manufacturing and commercial construction contacts told us that demand was up, and multiple contacts mentioned that the majority of this activity came from data center projects. One manufacturer contact said that capital projects outside of data centers were slow.

Another interesting thing that we picked up on is that tax policy changes were driving up demand for accounting services.

Lindo Briggs: When it comes to manufacturing in Arkansas and Missouri, some contacts mentioned adding a third shift back on, which feels like a slight change in momentum.

Okay, let’s talk about jobs. Brooke, what does the national picture on the labor market look like?

Dirtzu: Employment levels have been generally stable lately. Contacts in several districts pointed to rising costs for nonlabor inputs, softer demand or general economic uncertainty as reasons for keeping employment flat or even reducing it. And we’ve heard from multiple firms that they are turning to AI or automation to become more efficient. Most emphasize that they are trying to boost productivity, not necessarily cut jobs. In our district, some firms also mentioned using AI to mostly automate back-office functions.

Gascon: A midsized manufacturer in Memphis reported that their capital budgets are shifting toward automation because of persistent hiring frictions, such as challenges hiring workers. It was making robotics and industrial AI a more reliable way to preserve their throughput and quality—so, not necessarily AI leading to layoffs. But I’m wondering if you’re hearing anything else about layoffs across the country or in your district, Brooke.

Dirtzu: In the Fourth District, labor reductions have been varied. Some manufacturers are making targeted cuts. There are retail workers that are getting their hours reduced, and businesses are closing underperforming locations in some circumstances.

On the availability side, several contacts mentioned that they were seeing more-skilled workers available now because of bigger firms’ slowing their hiring.

In contrast, Richmond talked about a shrinking labor pool. I mentioned one peanut retailer who said they were having a hard time finding part-time workers.

Lindo Briggs: That’s nuts! … God, you guys are tough. Okay, okay, I had to say it.

Okay. Labor seems to be holding pretty steady across Arkansas. I’m not hearing about any major layoffs, and many employers are holding tight to those workers; they worked so hard to recruit them over the last few years. Contacts are still looking to fill some specialty roles—think welders, CPAs and many middle-management positions.

Gascon: Yeah. A staffing contact here in Missouri reported slower hiring and less turnover. That is reflecting that cautious labor market behavior among firms amid this economic uncertainty.

Lindo Briggs: Brooke, can you share a bit about what you’re hearing on the wage side?

Dirtzu: Sure. Nationally, wages went up in a modest-to-moderate pace in most districts. Firms continue to report upward pressure on total compensation, mostly from rising health insurance premiums. In our district, several professional and business services contacts told us that they were selectively raising wages to attract and keep good people. One specifically noted the scarcity of accounting graduates and talent.

Lindo Briggs: It sounds like continued cooling in the labor market, and wage growth is returning to normal.

Moving on to inflation … Affordability—that continues to come up a lot in my conversations. Let’s take a closer look at prices and inflation. Brooke, let’s start with you.

Dirtzu: Sure. Prices went up moderately over the last few weeks. Eight districts reported moderate price growth, and four saw slight-to-modest increases. Nationally, there were cost increases in insurance, utilities, energy, metals, along with other raw materials.

Lindo Briggs: I’m hearing the same thing, especially with copper and aluminum.

Dirtzu: Tariffs contributed to some of these cost increases. For instance, some firms continue to pass tariff-related cost increases to their customers, while others started increasing their prices after absorbing these costs for a while. Still, most district reports mentioned firms holding their prices steady even though costs were up, because their customers had been becoming increasingly price-sensitive. Overall, firms expected prices to rise somewhat at a slower pace in the near term.

Gascon: Within our District, our contacts reported that they were also observing higher costs, but that they needed to pass some of those costs on to their customers because their margins are already tight. Some contacts reported that those price increases may result in some impact on demand, while others thought that there was a market tolerance for price adjustments.

Dirtzu: We had an interesting anecdote on price tolerance: Some of our freight contacts reported that they were able to push through robust rate increases, even though customers pushed back and demand was softer. Two carriers said that it felt similar to pandemic-era pricing but without the surge in demand that they had back then. Another suggested that capacity constraints were keeping prices firm.

Lindo Briggs: A lot of contacts keep bringing up economic uncertainty. Brooke, are we getting any clarity on the outlook of the year ahead?

Dirtzu: Despite this uncertainty, the overall expectations are optimistic. Most districts are expecting slight-to-moderate growth in the coming months. And after those winter storms, our residential construction contacts are ready for spring and anticipate strong growth in the coming months. Some said pent-up demand and lower mortgage rates would make for a busy spring selling season.

Gascon: Here in the Eighth District, our contacts also reported a slightly more optimistic outlook after a year of pessimism. And, Matuschka, I’m really excited about what we’ll hear about the spring buying season as we get into those anecdotes in our next report.

Lindo Briggs: I agree. This has been a great conversation, but we’re coming up on time. Before we close, is there anything we haven’t touched on? Any final thoughts or anecdotes that stood out to either of you?

Dirtzu: We haven’t really talked about the sections on community conditions across our districts. A lot of districts are seeing elevated financial stress for lower-income households because of persistently high costs on food, housing, energy and health care. Nonprofit contacts in the Fourth District mentioned clients were stopping paying bills, skipping meals or even putting off medical care just to get by.

Lindo Briggs: Thanks for adding those highlights into this discussion.

Brooke, Chuck, thank you both for sharing insights today. We have such an opportunity here to bring the national picture and our District-level experiences together in a really meaningful way for our listeners.

If you would like to dig deeper into the latest trends across the Eighth Federal Reserve District, visit the St. Louis Fed’s website at stlouisfed.org.

The next Beige Book will be released on April 15, followed by our podcast April 16. Thanks for joining us.