Fed's Beige Book Reports Slower Growth

Washington, DC, July 29, 2010--The Federal Reserve said U.S. economic growth slowed in some areas over the past two months, hurt by commercial real estate and the expiration of a tax credit for homebuyers.

“Economic activity has continued to increase, on balance, since the previous survey,” the central bank said in its Beige Book business survey, while noting that two of the Fed’s 12 districts reported the economy “held steady” and two said the pace of expansion slowed.

The report underscored the Fed’s view that the recovery is progressing at a slower pace than earlier in the year.

The Fed reported improvements in service industries, an increase in tourism, an expansion of manufacturing and progress in labor markets.

Fed policy makers “expect continued moderate growth, a gradual decline in the unemployment rate and subdued inflation over the next several years,” Fed Chairman Ben Bernanke told Congress last week.

Activity in commercial real estate, especially construction, “remained weak,” the Fed said.