U.S. Fed survey shows slowdown in economic recovery

Economic activity in the United States has continued to increase since early June, but the recovery seems to have lost some momentum in some parts of the country, the Federal Reserve said on Wednesday in its latest survey on business conditions.

The survey, known as the Beige Book, was based on economic information supplied by the Fed's 12 regional banks and collected before July 19.

The snapshot of economic conditions found that 10 districts reported "increased" economic activity, while Cleveland and Kansas City Districts described conditions there as "generally held steady."

This represented a less positive view on the economy compared with that of the last survey, released on June 9, which reported " improved" economic activity across all 12 districts.

The latest version also noted that even though most districts reported improvements in economic activity, a number of them noted the increases were modest, and two Districts, Atlanta and Chicago, said that the pace of economic activity had slowed recently.

However, there were still bright spots amid a general moderation of recovery. Manufacturing continued to expand in most districts and the service sector showed improved conditions. Retail sales continued to rise due to strong demand of necessities, while big-ticket items moved more slowly.

Housing markets still posed downside risks to the economic recovery. Residential real estate market was "sluggish" in most districts after the expiration of the April 30 deadline for the homebuyer tax credit. Commercial real estate markets, especially construction, remained "weak."

The report said that credit standards remained "tight" in most districts, and labor market conditions improved modestly. Consumer prices of goods and services mostly held steady and wage pressures continued to be contained on the whole.

Findings in this report will figure into discussions when Fed policymakers meet to consider their stance on interest rates and other monetary issues on Aug. 10. Economists predict the Fed will continue to hold rates unchanged to boost the recovery.

The Fed has been keeping its federal funds rates at a historical low level of zero to 0.5 percent since December 2008.
(Source:xinhua)