Newspaper article The Florida Times Union

Fed Finds Evidence of Slowing Economic Activity

Newspaper article The Florida Times Union

Fed Finds Evidence of Slowing Economic Activity

Article excerpt

WASHINGTON -- The U.S. economy grew at a moderate pace last month but many parts of the country reported evidence of slowing activity in such key sectors as retail sales and housing, the Federal Reserve said yesterday.

The Fed said its latest survey of business conditions around the country, compiled by its 12 regional banks, indicated "additional signs of slowing growth in some areas."

It reported that business activity had slowed in five regions -- Philadelphia; Atlanta; Cleveland; Richmond, Va., and Dallas -- while other areas indicated growth was continuing at about the same, moderate pace.

The Fed said retail spending had softened in some parts of the country and the outlook was "a little less positive" for the tourism industry. There was also a slowdown in home sales and construction activity generally.

The central bank survey said there was little evidence that rising energy prices or continued tight labor markets were causing overall inflation pressures to accelerate.

The latest survey of economic activity, compiled from information gathered before Oct. 23, will be used by central bank policy-makers when the meet Nov. 15 to decide whether interest rates should be changed.

The views expressed in the report, known as the Beige Book for the color of its cover, were likely to reinforce the view of most economists that the Fed will leave rates alone, believing that six rate increases from June 1999 to May of this year have achieved the desired aim of slowing economic growth to keep inflation under control.

In another report yesterday, the National Association of Purchasing Managers said activity in manufacturing contracted for a third consecutive month in October with its index dropping to 48.3 percent.

A reading above 50 percent on the purchasing managers' index indicates growth in manufacturing while anything below that level indicates a slowdown. …

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