Fed survey: US economy still expanding but growth and hiring slowed in some regions
July 18, 2012 - 3:11 PM
WASHINGTON - The U.S. economy expanded modestly in June and early July, but growth and hiring slowed in several parts of the country, according to a Federal Reserve survey released Wednesday.
The survey said three of the Fed's 12 banking districts — New York, Philadelphia and Cleveland — reported weaker growth. A fourth, Richmond, said economic activity was mixed. That's a shift from the Fed's previous survey, which noted that growth had picked up in 10 districts from mid-April through May.
Hiring was "tepid" in most districts in June and early July, according to the survey, officially known as the Beige Book. Retail sales slowed in Boston, Cleveland and New York, and manufacturing weakened in most regions.
One positive sign: All 12 districts reported gains in housing.
The report, which is anecdotal, largely echoed Chairman Ben Bernanke's comments to Congress this week and will form the basis of discussions by the Fed's July 31-Aug. 1 meeting.
Bernanke told lawmakers that growth has weakened from the start of the year and the Fed is prepared to take further action if unemployment stays high. He didn't specify what steps the Fed might take or whether any action was imminent.
Investors are hoping the Fed will launch another round of bond purchases, which seek to lower long-term interest rates and encourage more borrowing and spending.
In his testimony, Bernanke noted that the economy, after growing at a 2.5 per cent annual rate in the second half of 2011, slowed to roughly 2 per cent from January through March. And it likely weakened further in the April-June period.
Job growth has slumped to an average of 75,000 a month in the April-June quarter from 226,000 a month from January through March. The unemployment rate was stuck in June at 8.2 per cent.
Consumers spent less at retail businesses in June for a third straight month, the government said earlier this week.
News from © The Associated Press, 2012