Beige Book Out….Fed Banks: ‘Widespread Signs of a Deceleration’ In Economy

Posted By on September 8, 2010

The Federal Reserve said the U.S. economy maintained its expansion while showing “widespread signs of a deceleration” in mid-July through the end of August, according to a survey by 12 regional Fed banks.

The New York Fed reported “signs of decelerating” in the district, including “further deceleration” in manufacturing. The Philadelphia region said business conditions were “mixed,” while the Richmond Fed said “signs of slowing or contracting economic activity became more prevalent.” The Atlanta region’s economy “continued to slow” and Chicago’s “moderated” in July and August, the Beige Book said.

Reports received by regional Fed banks “suggested continued growth in national economic activity during the reporting period of mid-July through the end of August, but with widespread signs of a deceleration compared with preceding periods,” today’s report said.

The report showed that manufacturing maintained its expansion while showing signs of slowing. Consumer spending “appeared to increase on balance,” though shoppers were limiting purchases of non-essential items. Home sales were “very low” or “declining” in most Fed districts following the expiration of a government tax credit.

“Demand for commercial, industrial, and retail space generally remained depressed,” the Fed said, though commercial real estate “showed signs of stabilization in some areas.”

Low interest rates have failed to spur renewed borrowing.  “Most Districts reported little or no change from existing low levels of commercial and industrial lending, as businesses remained quite cautious about expansion plans,” the Fed said, also noting that “consumer lending remained sluggish in general.”

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