Fed: Economy still chugging along

@CNNMoney June 8, 2011: 3:53 PM ET
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NEW YORK (CNNMoney) -- The Federal Reserve's Beige Book is a little less blah about the economic recovery than most recent reports.

Despite a few signs that economic growth is slowing, the report covering the Fed's 12 districts reported the recovery is actually chugging along at a solid pace.

"Reports from the twelve Federal Reserve Districts indicated that economic activity generally continued to expand since the last report, though a few districts indicated some deceleration," the Beige Book said Wednesday.

Only four districts -- New York, Philadelphia, Atlanta and Chicago -- said the pace of economic growth slowed in the period that ran from April 5 through May 27.

And one district, Dallas, even reported that economic growth sped up in its region, which includes all of Texas and parts of New Mexico and Louisiana.

Those reports are welcome news after a recent spat of disappointing reports about the economy. May brought weaker-than-expected data on the job market, home prices and overall economic growth.

Even Fed Chairman Ben Bernanke acknowledged Tuesday, that the economy seems to have lost some of its momentum recently, and is still "well below its potential."

Bernanke: Job market 'far from normal'

That said, according to the Beige Book released Wednesday, the labor market in most districts has recently improved. Overall consumer spending continued to grow in many districts, and the tourism and manufacturing sectors were for the most part, bright spots.

Several factors still weigh on economic growth though, the Beige Book said.

"The Beige Book didn't live up to the worst fears, but it does support Bernanke's view that the recovery is not yet truly established," said Jennifer Lee, senior economist, with BMO Capital Markets.

The real estate market, for example, continues to "show widespread weakness" across much of the country, it said -- and consumers and businesses are still feeling pressure from commodity prices, including oil, which surged earlier this year.

The fallout from Japan's March 11 earthquake and tsunami are continuing to weigh on the auto sector, and severe weather -- including flooding and tornadoes in the South -- recently hurt agricultural conditions.

The Fed's Beige Book summarizes economic conditions in the central bank's 12 districts across the nation, and is updated eight times a year. To top of page

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