Beige Book says US economy is slowing down.
The assessment by the US central bank disappoints those who expected a more encouraging result.
Economic activity remained slow across most of the U.S. between the second half of July and almost all of August, according to the Federal Reserve's Beige Book. In some areas, activity fell considerably amid a slowdown in industrial production, a still weak housing market, and the impact of Hurricane Irene.
Among the 12 districts assessed by the U.S. central bank, five reported "modest or slight" expansion. The other seven districts reported either slow growth, a mixed scenario, or slower economic activity overall.
"Several districts also indicated that recent stock market volatility and increasing economic uncertainties led many of the sources consulted to downgrade or adopt a more cautious stance regarding their near-term outlook," the Fed said.
According to the central bank, the US economy suffered several blows during this period. Discussions about raising the debt ceiling undermined business confidence, affecting hiring. Fears that the debt crisis in Europe would trigger a recession on both sides of the Atlantic had a major impact on financial markets. And, to make matters worse, a hurricane and an earthquake struck the country's east coast.
Consumer spending grew slightly in most of the 12 districts surveyed. However, sales in the non-automotive retail sector showed no change or declined in some regions, according to the Beige Book.
The labor market remained generally stable, although some areas experienced modest growth in employment levels. Wage pressures remained minimal. Many districts reported a shortage of skilled workers.
The Beige Book also states that Hurricane Irene caused extensive damage to crops in North Carolina.
The document released today will be used by the Fed at its next monetary policy meeting, which takes place on September 20 and 21. This information comes from Dow Jones.