US economic growth was slow entering the final quarter of the year because of flattening retail sales, stalled manufacturing and lackluster hiring, the Federal Reserve said.
"Most districts reported that economic activity remained sluggish in September and early October," the Fed said in its latest regional economic report card, known as the beige book.
PHOTO: REUTERS
"Retail sales were weak across the nation, including some declines in motor vehicle sales from very high levels."
Fed officials in recent speeches have said they don't expect a pickup in the economy before next year. William Poole, president of the Federal Reserve Bank of St. Louis said today "the overall economy is growing modestly, recovering all too slowly from last year's recession."
Investors are betting that Fed policy makers may decide to reduce the benchmark overnight bank lending rate from its 41-year low of 1.75 percent when they meet in two weeks.
Central bankers next meet Nov. 6. At their last meeting on Sept. 24, policy makers held rates steady and maintained their assessment that the risks to the recovery are weighted toward additional weakness, rather than excessive strength and inflation.
Today's beige book reported signs of inflation were "stable," although there were ``significant increases'' in the cost of health care, insurance and shipping.
Stores in the Fed's Cleveland, Minneapolis and Philadelphia districts noted "weak retail sales," while retailers in Chicago, Dallas, Kansas City and San Francisco said sales growth had slowed, the Fed said in a report that covered developments up to Oct. 15.
Fed Chairman Alan Greenspan said the trend of rising US worker productivity may be here to stay. "It is remarkable and encouraging that, despite all that has transpired over the past couple of years, a significant step-up in the growth of productivity appears to have persisted," Greenspan told a Labor Department conference.
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