Fed survey: Growth slows across much of US
Wednesday, July 27, 2011
WASHINGTON (AP) — The economy worsened in much of the country earlier this 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 seven of the Fed’s 12 bank regions in June and early July, the report found, compared with the spring. That marks 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.
Further such evidence came in a separate report Wednesday from the Commerce Department, which found that businesses reduced orders for airplanes, autos, heavy machinery and other long-lasting manufactured goods in June.
Orders for durable goods fell 2.1 percent, the department said. It was the second drop in three months. The decline was driven by a big drop in orders for commercial aircraft. Orders for autos, auto parts and computers also fell. And a key category that tracks business investment plans dropped 0.4 percent.
The Fed’s report found that the job market remained weak in most of the 12 districts. 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.
Droughts and severe flooding weakened seven districts with major agricultural sectors, the report said.