Washington, DC, September 7, 2006--Economic activity continued to move forward in August, but there were signs of a downshift in the rate of growth, according to a Federal Reserve Beige Book survey of current economic conditions released on Wednesday.
Five of the 12 Fed districts reported a "deceleration" in growth in their regions, while the other seven reported continued moderate growth. Read full Fed survey results.
The Beige Book report was prepared by the New York Fed and was based on surveys completed before the end of August. It is designed to give Fed officials a better feel for economic conditions in the run-up to their next meeting to set monetary policy on Sept. 20.
The reports of slower growth were clustered in the Northeastern region and in Kansas City. The Dallas Fed also reported slower growth, but only from super-strong to strong.
There was no sign that inflationary pressures are heating up.
Although there were sustained increases in the cost of metals and energy and other raw materials, the report found "most of these increases do not appear to have passed through to finished consumer goods."
There was little change in strong labor markets, with only scattered reports of labor shortages and upward wage pressures.
The report said that consumer spending increased slowly in most regions, held down by sluggish auto sales and less spending on home improvement.
The Fed said most non-auto retailers are satisfied with inventory levels.
The report found that residential real estate markets were uniformly weak across the country.
The factory sector continued to expand across the country, despite "pockets of weakness" related to auto and residential construction.
Drought-like conditions in much of the nation have hampered crop production.
