U.S. Fed sees some signs of slowing growth

13:58, June 09, 2011      

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The economic activity in the United States "generally continued to expand," but some parts were recording slowing growth, reported the Federal Reserve on Wednesday.

In its latest economic performance survey, the central bank saw "some slowing in the pace of growth" in districts including New York, Philadelphia, Atlanta and Chicago.

The survey, known as the Beige Book, was based on economic information supplied by the Fed's twelve regional banks and collected during the reporting period from early April to May 27.

The Fed said that manufacturing continued to expand in most parts of the country, but some parts of the country suffered slowing recovery.

Consumer spending was "mixed," with most Districts indicating steady to modestly increasing activity since the last report, said the Fed. However, elevated food and energy prices weighed on consumers' propensity to spend.

Consumer spending, which accounts for about 70 percent of the U. S. economic activity, is the main engine of the economic growth.

In a report released on Tuesday, the Fed said that consumer credit increased at an annual rate of 3 percent in April, but consumers trimmed their credit card spending under the background of uncertain economic prospect.

On housing market, the Fed economic snapshot noted that residential and commercial real estate continued to show " widespread weakness," except in the rental segment, where market conditions have strengthened.

This is a relatively negative tone about the U.S. housing market than the Fed's previous reports.

Housing market, which was considered a major source of this round of financial crisis and economic downturn, remains in troubling water, analysts said.

The Fed also noted that "labor market conditions continued to improve gradually across most of the nation."

Latest data showed that unemployment rate, which edged up to 9. 1 percent in May, remains the top challenge of the world largest economy.

On inflation front, the survey found that there were widespread increases in commodity prices and manufacturers were "passing along a portion of the higher costs in the form of price hikes and fuel surcharges" to customers.

But wage pressures were reported to be "largely contained in most Districts," said the central bank.

Federal Reserve chief Ben Bernanke said Tuesday that "there is not much evidence that inflation is becoming broad-based or ingrained" in the economy.

Economists said that the Fed does not consider inflation a serious concern of the economy currently.

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