WASHINGTON — The U.S. economy expanded modestly in June and early July, but growth and hiring slowed in several parts of the country. The key findings of the Federal Reserve survey echoed the gloomier outlook that Chairman Ben Bernanke offered to Congress this week.
Three of the Fed's 12 banking districts — New York, Philadelphia and Cleveland — reported weaker growth, according to the Beige Book survey released Wednesday. A fourth, Richmond, said economic activity was mixed.
The report was a shift from the Fed's previous survey, which noted that growth had picked up or held steady in 11 districts from mid-April through May.
The Fed also said that hiring was "tepid" in most districts in June and early July, retail sales slowed in Boston, Cleveland and New York, and manufacturing weakened in most regions.
One positive note from the survey: All 12 districts reported gains in housing.
The Beige Book, which is anecdotal, helps form the basis of discussions by the Fed's July 31-Aug. 1 meeting.
Bernanke told lawmakers this week that growth has weakened from the start of the year. He said the Fed is prepared to take further action if unemployment stays high, but didn't specify what steps it might take or whether any action was imminent.
Investors are hoping the Fed will launch another round of bond purchases, known as quantitative easing. The bond purchases seek to lower long-term interest rates with the goal of encouraging more borrowing and spending.
Economists noted that Fed policymakers are likely to wait a little longer before taking that step.
"While the report is not a positive one, we believe that it is still not enough to push the Fed over the edge into more quantitative easing at its next meeting in two weeks," said Michael Dolega, an economist at TD Bank.