The U.S. Federal Reserve said on Wednesday that the nation's economic activity continued to grow, but the pace had moderated in many districts due to a sluggish housing market and businesses' cautious capital spending plans.
In its latest national economic performance survey, the central bank said that six districts near the Atlantic coast reported a slowdown in economic activity.
The survey, known as the Beige Book, was based on economic information supplied by the Fed's twelve regional banks and was released eight times each year to provide a snapshot of the local economy.
The report revealed that the Dallas district slowed to a moderate pace of growth, and the Minneapolis district reported political and weather-related disruptions that temporarily slowed growth, while the remaining four districts continued to grow modestly in June and early July.
The performance of 12 districts was poorer than the previous survey, as the previous report showed a slower growth rate for four districts, seven districts growing at a steady pace, and one district with faster growth.
Consumer spending increased overall, with modest growth of non- auto retail sales in a majority of districts, but price pressures from food, energy, cotton and other supplier inputs continued to squeeze retail margins, noted the report.
Activity among nonfinancial service sectors improved overall in most districts. The manufacturing outlook remained generally optimistic, but capital spending plans were more cautious, said the central bank.
Most residential real estate activity was little changed and remained weak, though construction and activity in the residential rental market continued to improve since the previous Beige Book, said the report.
Most districts observed modest hiring increases, but labor market conditions remained soft, said the Fed.
The U.S. unemployment rate edged up to 9.2 percent in June from 9.1 percent in May and nonfarm sector added only 18,000 new jobs last month.