The pace of the economic recovery slowed in much of the U.S. in June and early July, according to a Federal Reserve report that also noted that inflation pressures were beginning to ease in many of its regional districts.
The Fed's latest "beige book" showed the soft patch in the economy has continued to spread, with over half of the central bank's 12 districts reporting a slowdown in activity since the previous report.
"The manufacturing outlook remained generally optimistic, but capital spending plans were somewhat more cautious," the Fed said.
The Fed survey of regional economies, which was prepared by the Philadelphia Fed based on information collected before July 15, will be used at the Fed's next policy-setting meeting Aug. 9.
Other recent data indicate the economy has continued to slow going into the second half of the year, with consumers hesitant to spend in the face of high gasoline prices and rising unemployment. A disappointing report out of the Commerce Department on Wednesday showed durable-goods orders unexpectedly fell last month, a blow to a manufacturing sector that has been one of the few sources of support for the recovery.
Growing concerns about the economic outlook were echoed earlier this month by Federal Reserve Chairman Ben Bernanke, who told lawmakers it is uncertain whether the recovery will prove "durable."
While cracking open the door to take additional steps after the central bank's bond-buying program ran out last month, Mr. Bernanke stressed that Fed officials weren't prepared to take action until they see whether the pace picks up as expected in the second half. The Fed's outlook is based in part on hopes that easing oil prices and Japan's recovery from recent disasters will create less of a drag on U.S. growth.
Wednesday's Fed survey found that price pressures were easing in many districts, though some manufacturers were able to pass on some of the higher costs to customers. The decline in energy prices has also helped consumption, though retailers were being squeezed by higher costs.
"Falling gasoline prices throughout most of this reporting period may have encouraged a pickup in shopping trips and some additional spending since the previous beige book," the Fed said.
On another positive note, most districts reported a modest increase in hiring, though labor conditions remained soft. Wage pressures were still subdued in most job categories, the Fed said.
Supply disruptions in the auto sector from the recent disasters in Japan continued to keep inventory levels low, however, weighing on car sales.
But most districts reported modest growth in non-auto retail sales, a key indicator of the consumer spending that powers the economy.
Meanwhile, the housing market remained weak, though construction in the rental market continued to improve. Overall loan volumes were mixed, with credit quality steady or improving.
Source: http://online.wsj.com
The Fed's latest "beige book" showed the soft patch in the economy has continued to spread, with over half of the central bank's 12 districts reporting a slowdown in activity since the previous report.
"The manufacturing outlook remained generally optimistic, but capital spending plans were somewhat more cautious," the Fed said.
The Fed survey of regional economies, which was prepared by the Philadelphia Fed based on information collected before July 15, will be used at the Fed's next policy-setting meeting Aug. 9.
Other recent data indicate the economy has continued to slow going into the second half of the year, with consumers hesitant to spend in the face of high gasoline prices and rising unemployment. A disappointing report out of the Commerce Department on Wednesday showed durable-goods orders unexpectedly fell last month, a blow to a manufacturing sector that has been one of the few sources of support for the recovery.
Growing concerns about the economic outlook were echoed earlier this month by Federal Reserve Chairman Ben Bernanke, who told lawmakers it is uncertain whether the recovery will prove "durable."
While cracking open the door to take additional steps after the central bank's bond-buying program ran out last month, Mr. Bernanke stressed that Fed officials weren't prepared to take action until they see whether the pace picks up as expected in the second half. The Fed's outlook is based in part on hopes that easing oil prices and Japan's recovery from recent disasters will create less of a drag on U.S. growth.
Wednesday's Fed survey found that price pressures were easing in many districts, though some manufacturers were able to pass on some of the higher costs to customers. The decline in energy prices has also helped consumption, though retailers were being squeezed by higher costs.
"Falling gasoline prices throughout most of this reporting period may have encouraged a pickup in shopping trips and some additional spending since the previous beige book," the Fed said.
On another positive note, most districts reported a modest increase in hiring, though labor conditions remained soft. Wage pressures were still subdued in most job categories, the Fed said.
Supply disruptions in the auto sector from the recent disasters in Japan continued to keep inventory levels low, however, weighing on car sales.
But most districts reported modest growth in non-auto retail sales, a key indicator of the consumer spending that powers the economy.
Meanwhile, the housing market remained weak, though construction in the rental market continued to improve. Overall loan volumes were mixed, with credit quality steady or improving.
Source: http://online.wsj.com
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