Federal Reserve Says US Economy Remains Weak

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Last updated at: (Beijing Time) Thursday, January 17, 2002

Federal Reserve Says US Economy Remains Weak

The U.S. economy remained weak in the past two months as activities at the manufacturing and retail sectors were still weak, the Federal Reserve said Wednesday.

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The U.S. economy remained weak in the past two months as activities at the manufacturing and retail sectors were still weak, the Federal Reserve said Wednesday.

"Reports from the Federal Reserve districts suggest that economic activity generally remained weak from late November through early January," the Fed said in its latest survey of the economy.

The survey, compiled from information supplied by the Fed's 12 regional banks, will be used by policy-makers when they meet January 29-30 to consider changes in interest rates.

But the Fed noted that there were scattered signs that the country's first recession in a decade could soon be ending. "Many districts indicate that their contacts believe a recovery will begin by mid-year, but the timing and strength are uncertain, " the Fed said.

The Fed said manufacturing activity was weak or down in most districts in the past two months, but showed signs of stabilizing or rebounding in several regions.

Retail sales picked up in late December and early January but for the period overall posted generally weak results in most districts, the Fed said.

The survey also found construction and real estate activity continued to soften in most districts.

The U.S. economy entered a recession last March and declined at an annual rate of 1.3 percent in the third quarter of last year.

Most economists expect the economy to further contract in the fourth quarter. In an effort to revive the economy, the Fed cut interest rates 11 times last year, driving down the federal funds rate from 6.5 percent to 1.75 percent, the lowest level in more than 40 years.

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