Tracking The World Economy...-09/09/2010

Widespread Signs Of A Deceleration In The US Economy, But The Fed May Not Make A Major Move

The Federal Reserve’s Beige Book indicated that the US economy continued to grow during the period mid-July through the end of August, but with widespread signs of a deceleration compared with preceding periods. Consumer spending
appeared to increase in general but consumers were still not keen to make non-essential purchases. Activities in professional and other non-financial services were largely stable, while the travel and tourism sector picked up due partly
to seasonal factors. Manufacturing activities, on the other hand, expanded at a more moderate pace during the period.
Similarly, home sales slowed further following an initial drop after the expiration of the homebuyer tax credit at the end of April. As a result, construction activities also weakened during the period. In addition, demand for commercial real
estate remained quite weak but showed signs of stabilisation in some areas. Loan demand was generally lower but there were some modest improvements in credit quality. Upward price pressures remained quite limited for most categories
of final goods and services, despite higher prices for selected commodities such as grains and some industrial materials. Similarly, wage pressures were limited.




Tracking The World Economy...-09/09/2010