**U.S. Economy Contracts as Hiring Slows and Tariff Concerns Rise, Fed Reports**

The U.S. economy has experienced a contraction over the past six weeks, largely due to a slowdown in hiring and increasing concerns from both consumers and businesses about tariff-related price hikes, as reported by the Federal Reserve. The central bank's latest "Beige Book" summary, which was released on Wednesday, highlighted that economic activity has declined slightly since the previous report issued on April 23.

The report detailed that all regions are witnessing elevated levels of economic and policy uncertainty. This environment of hesitancy has influenced both business and household decisions, prompting a more cautious approach. The employment landscape remained mostly stagnant, with hiring described as "little changed" across most of the Fed's 12 districts. Specifically, seven districts reported flat employment levels, despite an increase in job applicants and lower turnover rates.

Economic activity varied across the U.S., with Boston, New York, and Philadelphia noting a decline. Conversely, regions like Richmond, Atlanta, and Chicago observed better economic growth. New York, in particular, faced heightened uncertainty and significant input price growth driven by tariff-induced cost increases. Richmond saw a slight increase in hiring, which stands out amid broader concerns.

Inflation was marked as rising "at a moderate pace," yet there were numerous reports anticipating an acceleration in costs and prices. The expected tariff-related cost increases were described in some districts as strong or substantial, reflecting a widespread belief that these costs would contribute to future price hikes across various sectors. As businesses grapple with higher tariffs, some have indicated plans to reduce profit margins or introduce temporary fees and surcharges.

The evolving tariff landscape, highlighted by President Donald Trump's recent statements in early May about easing reciprocal tariffs against China, brought a momentary sense of optimism to markets. Nonetheless, apprehensions about inflation and the broader economic slowdown persist. Tariffs were mentioned 122 times in this latest report, a notable increase from the 107 mentions in April.

Overall, the Federal Reserve's findings underscore a period of economic contraction, hindered hiring, and escalating tariff-related anxiety among businesses and consumers alike.