A new survey released by the Federal Reserve Wednesday
found the US economy growing this summer, even as risks mount.
Of the 12 regions tracked by the Fed, the survey said
that growth held steady in Cleveland and Kansas City, but slowed in Atlanta and
Chicago. Economic activity elsewhere was described as modest.
High unemployment, cautious consumers and businesses, an
ailing housing market and an edgy Wall Street have kept the recovery from
gaining strength.
Manufacturing expanded in most regions. However, half of
them - New York, Cleveland, Kansas City, Chicago, Atlanta and Richmond -
reported that activity had "slowed" or "leveled off." Steel
production declined in both Chicago and Cleveland.
Retailers reported sales gains, although merchants in
some places said shoppers focused on buying «necessities.» Sales of big-ticket
goods were slower. In fact, reports across most regions found that auto sales
had declined.
The housing market turned more sluggish after homebuyer
tax credits expired in April. Commercial real estate businesses continued to
"struggle" across all 12 regions, the survey said.
The findings will figure into deliberations when Fed
Chairman Ben Bernanke and his colleagues meet next on Aug. 10. The Fed has
signaled that it will hold rates at record lows at that time and probably well
into next year to help energize the recovery.
And Bernanke told Congress last week that the Fed is
prepared to take new steps to stimulate economic growth if the recovery were to
flash signs of sliding back into recession.
The Fed's region-by-region survey, traditionally known as
the Beige Book, provides a unique snapshot of the nation.
The central bank's 12 regional arms have their people fan
out to gather information from businesses and talk to local economists and
experts on the markets. The result is a more intimate look at the overall
economy than broad statistics provide.
The Fed survey is based on information collected from the
Fed's 12 regional banks on or before July 19.
Meanwhile, new orders for long-lasting US manufactured
goods unexpectedly fell for a second straight month in June, posting their
largest decline since August, further evidence economic growth cooled in the
second quarter.
The Commerce Department said on Wednesday durable goods
orders fell 1.0 percent after a revised 0.8 percent drop in May.
Analysts polled by Reuters had forecast orders increasing
1.0 percent in June from May's previously reported 0.6 percent fall.
"The number was weaker than expected and it could
add to the idea that the economy is slipping into a double dip recession,"
said Bruce Bittles, chief investment strategist at Robert W. Baird & Co. in
Nashville.
