US economy growing at slow pace—Fed

WASHINGTON—The US economy continues to grow slowly, with patches of weaker activity, the Federal Reserve said Wednesday in a report used by the central bank in setting monetary policy.

Recent stock market swings and rising economic uncertainty have dampened confidence, the Fed said in its latest Beige Book report.

The report is a compilation of economic assessments from the bank’s 12 regional districts since the August 9 meeting of the policy-setting Federal Open Market Committee.

It will be used by Fed chairman Ben Bernanke and the other FOMC members at their next meeting on September 20 and 21 as a guideline for action needed to boost growth in the stalling economy.

“Economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity,” the report said.

Five districts reported modest or slight expansion, while growth remained sluggish or slowed in the others.

Several districts reported that “recent stock market volatility and increase economic uncertainty has led many contacts to downgrade or become more cautious about their near-term outlooks,” the report said.

Consumer spending, the traditional engine of economic growth in the United States, “increased slightly in most Districts,” but the Fed noted that non-auto retail sales were “flat or down” in several districts.

The cutoff date for the data was August 26.

The world’s largest economy nearly stalled in the first quarter, growing only at an annual rate of 0.4 percent, and posted a tepid 1.0 percent expansion in the second quarter.