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Fed's survey: Growth slows across much of the nation

WASHINGTON — The economy worsened in much of the United States in early summer, hampered by high unemployment, weak home sales and signs of a slowdown in manufacturing.

A survey by the Federal Reserve, released Wednesday, found that weak consumer spending, slow job growth and tight credit are restraining growth into the second half of the year.

Growth slowed in eight of the Fed's 12 bank regions in June and early July, the report found, compared with the spring, the worst showing this year.

The Fed's survey found that factory output weakened in some areas. That's likely to heighten concerns that manufacturing, one of the economy's few bright spots over the past two years, is sputtering.

Manufacturing output rose overall. But many districts reported only "steady or slowing" growth, the Fed's report said. Only two districts — Kansas City and Cleveland — reported rising manufacturing activity. Companies in three districts — Philadelphia, Richmond and Atlanta, which includes all of Florida — reported slower growth.

The Fed's report found that the job market remained weak in most of the 12 districts. Hiring was scant, for example, in the Boston district, except among advertising and consulting firms.

Consumer spending improved, aided by a drop in gas prices, which had peaked at nearly $4 a gallon in early May. But auto sales dropped. Supplies at many dealers remained tight because of disruptions stemming from Japan's March 11 earthquake.

The overall dim picture of the national economy echoes recent data on hiring and manufacturing. Economists expect growth for the April-June quarter, which will be reported Friday, will be only 1.7 percent, the second straight quarter of anemic expansion.

In June, employers added only 18,000 jobs, the fewest in nine months. And the unemployment rate rose to 9.2 percent, the highest in a year.

The report, known as the "Beige Book," is based on anecdotal information gathered by officials at the 12 Fed regional banks. It's released eight times a year and provides an on-the-ground snapshot of the economy.

Durable goods orders fall

U.S. businesses cut back on orders for aircraft, autos, heavy machinery and computers in June, sending demand for long-lasting manufactured goods lower for the second month in the past three, the Commerce Department said Wednesday. Orders for durable goods fell 2.1 percent last month, with the weakness led by a big drop in orders for commercial aircraft. A number of other categories also showed weakness including autos and auto parts.

.Fast facts

Durable goods orders fall

U.S. businesses cut back on orders for aircraft, autos, heavy machinery and computers in June, sending demand for long-lasting manufactured goods lower for the second month in the past three, the Commerce Department said Wednesday. Orders for durable goods fell 2.1 percent last month, with the weakness led by a big drop in orders for commercial aircraft. A number of other categories also showed weakness including autos and auto parts.



. Fast facts

Durable goods orders fall

U.S. businesses cut back on orders for aircraft, autos, heavy machinery and computers in June, sending demand for long-lasting manufactured goods lower for the second month in the past three, the Commerce Department said Wednesday. Orders for durable goods fell 2.1 percent last month, with the weakness led by a big drop in orders for commercial aircraft. A number of other categories also showed weakness including autos and auto parts.

Fed's survey: Growth slows across much of the nation 07/27/11 [Last modified: Wednesday, July 27, 2011 9:23pm]
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