Federal Reserve BuildingThe latest Beige Book report by the U.S. Federal Reserve confirms what earlier economic data has indicated: The U.S. economy slowed over the summer but, it's still expanding at a modest pace.

In its September report, the Fed said the economy shows "widespread signs of a deceleration compared with preceding periods." Nevertheless, the central bank added that "economic growth at a modest pace was the most common characterization of overall conditions, as provided by the five western Districts of St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco."

In addition, the "Boston and Cleveland districts also pointed to positive developments or net improvements compared with the previous reporting period," the Fed said. However, the remaining districts of New York, Philadelphia, Richmond, Atlanta and Chicago "all highlighted mixed conditions or deceleration in overall economic activity."

Lending Was Mostly Stable

Investors, at least initially, took the regional bank report in stride, as the Dow, up about 60 points to 10,400 before the report, was essentially unchanged in the initial minutes after its release.

On banking conditions, the Fed said "lending activity was stable to down slightly on net. Most districts reported little or no change from existing low levels of commercial and industrial lending, as businesses remained quite cautious about expansion plans." A few districts pointed to increases in nonbank financing, including rising availability of trade credit in Atlanta and further increases in venture capital funding in San Francisco.


Regarding inflation, the Fed said 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 raw materials. Wage pressures were also limited, although a few districts noted increased upward pressures in a narrow set of sectors with a shortage of skilled applicants.

On consumer spending, the Fed said "spending was mixed but suggested a slight increase on balance." "Districts reported that non-automotive retail sales rose compared with the previous reporting period or were above their levels from 12 months earlier."

Concerning manufacturing, which has so far led the U.S. recovery, the Fed said, "activity expanded further on balance, although the pace of growth appeared to be slower than earlier in the year." New York, Richmond, Atlanta and Chicago indicated that the overall pace of growth slowed, while Philadelphia, Cleveland and Kansas City reported that demand had declined compared with the previous reporting period.

About real estate, the Fed said, "Activity in residential real estate markets declined further. Most District reports highlighted evidence of very low or declining home sales, which many attributed to a sustained lull following the expiration of the home buyer tax credit at the end of June." The New York and Dallas districts noted especially weak conditions for lower-priced homes, while Philadelphia and Kansas City reported higher-priced homes as the primary weak spot. Demand for commercial, industrial and retail space generally remained depressed, the Fed said.

Bernanke: The Fed Still Has Ammunition


The Fed's latest Beige Book analysis occurs amid a U.S. economic recovery that Fed Chairman Ben Bernanke, in his recent Jackson Hole, Wyo.,speech said "will require appropriate and effective responses from economic policymakers across a wide spectrum, as well as from leaders in the private sector." He added that "Central bankers alone cannot solve the world's economic problems."

However, Bernanke reiterated that those arguing that the Fed is "out of ammunition" regarding both credit market stabilization and economic stimulus measures are wrong. "The Federal Reserve is already supporting the economic recovery by maintaining an extraordinarily accommodative monetary policy, using multiple tools," Bernanke said Jackson Hole. "Should further action prove necessary, policy options are available to provide additional stimulus."

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Cherie

So when the left is failing false hope is what the media pushes? The left has their foot on the brake and gas and is doing a burn out on may pop tires. Now if the summer of recovery was an actual recovery you be hearing about it at nauseam. Same with Healthcare so all they have left is ranting, blaming, inciting name calling, false hope, because the polices did not produce. That is not how you win Independents. It is how you cater to your base. Polarize divide destroy. On that front the left excels thinking it is all they know. When you put your self on a high horse above others the fall is long and hard. And that fall is coming.

September 09 2010 at 9:35 AM Report abuse +2 rate up rate down Reply
Lars

the banks created this mess, the fed reserve bank creats money out of thin air, many people lost (had stolen) their entire savings to the banks that failed do to wild betting and lost(the fdic only insured i think it was 150,000), obumer (bary soetoro) comes up with a 700,000,000,000 bail out for the "to big to fails". fed reserve bank prints it to lend it + interest. more jobs were lost then gained. the rich got richer, most of middle class went down hill, the "small people" as a group got bigger. none of our tax money goes to pay the national debt. taxs are going up, parts of the healthcare reform start at the end of this year. no new jobs are being created. nothing is getting better. its getting worse. the banksters at the fed reserve are making out like bandits. the whole system is shot.

September 09 2010 at 9:26 AM Report abuse +2 rate up rate down Reply
osujohn58

You idiots would be better off asking how many businesses expect the economy to come back when the average worker is making less now than they did ten years ago and why recently a business that made 500 million in profit is asking their employees to take a pay cut! Just because their pay is higher than the other businesses in the area. Consumer spending makes up 65-70% of the GDP. If you aren't making more, than you are not spending more. Cost are going up, wages are going down ! Don't blame Obama, blame the company who made a record profit and laid you off!

September 09 2010 at 9:14 AM Report abuse +3 rate up rate down Reply
rjmmillis

pgrlights, Are on any social programs? What A dumb comment.

September 09 2010 at 7:55 AM Report abuse +2 rate up rate down Reply
sharank251

what? sounds like more progressive marxist/communist BS from obama.

September 09 2010 at 7:52 AM Report abuse +3 rate up rate down Reply
mornewz

The Three Stooges (Obama, Bernanke & Geithner) play follow the leader. They walk in circles for a year and a half.

September 09 2010 at 7:29 AM Report abuse +6 rate up rate down Reply
jerry

Slowing but Growing is just another term for FAILURE! WAKE UP AMERICA.

September 09 2010 at 7:02 AM Report abuse +8 rate up rate down Reply
dolalanne

What a spin - one day stocks are down due to Euro debt, next they are up cause it isn't as bad as it could be - I support neither major party, and if you do you are perpetuating the problem.

September 09 2010 at 6:29 AM Report abuse +2 rate up rate down Reply
dterraman

all intentional, all by design, and all right on time for your nwo

September 09 2010 at 5:23 AM Report abuse rate up rate down Reply
Retool

Recovery would be growing much faster but, the top 5% have put everything on hold until the reps. can worm their way back into office so they can return to trickle-down economics bushwacker policies. Lord help us if this happens!!!!!

September 09 2010 at 5:09 AM Report abuse -3 rate up rate down Reply