Beige Book: Economic Growth Cooled In Summer

The Federal Reserve acknowledged Wednesday that economic uncertainty is likely to weigh on growth in the near future, the central bank said in its Beige Book.

The Fed’s anecdotal survey of economic activity, prepared in this cycle by the Bank of Kansas City Fed through Aug. 26, described consumer spending excluding autos as flat or trending down in several districts. Manufacturing also slowed in many districts. Loan demand and real estate transactions were weak, sources said.

Five districts reported slight economic expansion while the other seven said activity was flat or “sluggish” at best.

August “stock market volatility and increased economic uncertainty had led many contacts to downgrade or become more cautious about their near-term outlooks,” the Fed said.

Hurricane Irene, which battered the East Coast in late August, caused disruptions along the East Coast, particularly affecting tourism in New York.

Employment in health care and energy services continued to increase, but an overall reluctance to hire remains in place. Specifically, one firm in the Richmond district said it would rather pay employees overtime than hire new workers.

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