WASHINGTON (AFP) – The US economy is showing "widespread" signs of deceleration, the US Federal Reserve warned in its latest Beige Book report published Wednesday.
The central bank reported "continued growth in national economic activity" between mid-July and the end of August, "but with widespread signs of a deceleration."
Painting a dour picture of the economy, as expected, the Fed said the recovery continued to be uneven across the country and across sectors.
There was some good news from the manufacturing sector and the slightest of signs that Americans might be returning to the shops.
"Consumer spending appeared to increase on balance despite continued consumer caution that limited nonessential purchases, while activity in the travel and tourism sector picked up relative to seasonal norms," the report said.
Meanwhile "manufacturing activity expanded further on balance, although the pace of growth appeared to be slower than earlier in the year."
But the picture from the real estate market showed how deep the hole is, as private demand struggled to keep pace after a government tax break was removed.
"Home sales slowed further following an initial drop after the expiration of the homebuyer tax credit at the end of June, prompting a slowdown in construction activity as well," the Fed reported.
In a further sign that the Fed will not quickly raise interest rates, the bank said inflation was contained.
"Upward price pressures remained quite limited for most categories of final goods and services, despite higher prices for selected commodities such as grains and some industrial materials."
The report will be used at the next meeting of the central bank's interest rate-setting body, the Federal Open Market Committee, on September 21.
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