WASHINGTON -- The Federal Reserve said the economy expanded at a "modest to moderate" pace in June and early July, as retail sales and manufacturing cooled in some regions.
"Manufacturing activity continued to expand slowly in most districts," the Fed said Wednesday in its Beige Book business survey, which is based on reports from its 12 district banks. "Employment levels improved at a tepid pace."
The New York, Philadelphia, and Cleveland districts "noted that activity continued to expand, but at a slower pace since the last report."
The report, which gives central bankers anecdotal evidence on the economy two weeks before they meet in Washington, supports Fed Chairman Ben Bernanke's view that the United States lost momentum in the first half of 2012. Mr. Bernanke, in a second day of congressional testimony Wednesday, repeated that progress on unemployment may be "frustratingly slow."
"Overall, the report is tepid," said Diane Swonk, chief economist at Mesirow Financial Inc. in Chicago. "It really echoes what the chairman has been telling us for the last two days, and that is that economic outlook is not looking too great."
The Atlanta, St. Louis, and San Francisco districts were described as having "modest growth," while Boston, Chicago, Minneapolis, Kansas City, and Dallas were "advancing moderately." By comparison, in the June 6 report, seven districts were growing "moderately" and just one was reported to have slowed.
The recovery over the last three years has been marked by periods of solid growth followed by slowdowns, Fed Kansas City Bank President Esther George said. "It looks like this summer's slowdown will be no exception to that."