Beige book: US economy grows more slowly

OK, US economic growth is not all snap, crackle, and pop.

It's more like cereal five minutes after you add the milk: soggy but still afloat.

That's the picture painted by the Federal Reserve's so-called "beige book," a summary of economic conditions that was released Wednesday.

"Economic growth at a modest pace was the most common characterization of overall conditions," the report summarized, "but with widespread signs of a deceleration compared with preceding periods."

Pessimists could find plenty to complain about. Five of the Fed's 12 districts reported mixed conditions or decelerating growth during the period from mid-July through August. All of those districts were in the eastern half of the United States: New York, Philadelphia, Richmond, Atlanta, and Chicago.

Nationally, home sales tapered off, as did construction. Commercial real estate remained weak although the beige book noted "signs of stabilization in some areas." Financial institutions reported stable or slightly lower demand for loans.

But growth, even if it's slowing, represents an improvement as the economy tries to claw itself out of the deepest economic hole in decades.

The beige book also highlighted that growth was a little stronger than average in the Boston and Cleveland districts, while all five of the Federal Reserve's western districts reported modest growth.

Consumers also opened their wallets slightly wider this summer, especially for necessities and lower-priced goods. Sales of big-ticket items were weak, according to three districts. But sales of new cars and light trucks were stable or increasing.

Professional and other non-financial services saw stable or slightly increasing business during the period, as did manufacturing, although its rate of growth slowed, according to the beige book. Agriculture and mining also experienced growth.

The Fed's mirror on the economy didn't offer a vibrant picture, and Wall Street's rally retreated after the beige book's afternoon release. But the US economy is still alive and growing.