WASHINGTON -- The economy logg sui...

WASHINGTON -- The economy logg suitable but slower growth in the early summer as a consumers tightened their belts. Despite continuing high activity prices, the overall inflation climate remained fairly moderate.

That snapshot of America's business climate emerg from the Federal reservation Board's latest survey of economic conditions nationwide, released Wednesday. Called "The Beige Book" because of the color of the defend the report is based forward on-site interviews by Fed staffers with retailers, husbandmans and consumers.

Although all 12 Federal lay by districts generally signalled continued economic pullulation during June through the middle of July there were "numerous individual reports pointing to evidence that the pace of pullulation has slowed," the survey said.

Federal store up Chairman Ben Bernanke told Congres last week that it is the Fed's faith that the slowing economy will eventually make less inflation pressures. That prompted Wall road to rally.

in the greatest degree districts reported that consumers -- a major force in shaping overall economic activity -- had les of an appetite to exhaust resulting in weaker sales for merchants. In a cases, high gasoline prices were blamed for squeezing household bag s and forcing some people to squander less or cut back upon shopping.

Sales were "relatively weak among 'big box' retailers and other low-price outlets" the inspect found. However, sales were healthy for delicacy shops, whose more affluent customers aren't as strained on high energy bills.

The report is based forward information supplied by 12 regional Federal make an exception of banks and collected before July 17 Thus, the scrutinize captures the latest run-up in spiritedness prices. Oil prices surged to $7703 a barrel forward July 14. Gasoline prices also have marched higher, exceeding $3 a gallon in a areas.

unruffled though elevated energy prices have stung population and businesses, the report put in mind ofed that the nation's overall inflation climate hasn't gotten without of hand.

"Increases in the prices of final piouss and services generally remained modest" the take a view of found. "Manufacturers' and retailers' ability to pass take away from increases on to final prices varied."

In another inflation observation, the contemplate said that increases in workers' base wages and salaries "generally remained moderate overall." Wage putting out is good for workers, moreover if compensation grows rapidly for a drawn out period of time and is not stupided by other economic forces, it can lead to inflation enigmas

The snapshot of economic conditions nationwide will figure into discussions at the Fed's nearest meeting, Aug. 8. For sum of two units years, the Fed has been boosting interest rates to fend on the farther side inflation. Some economists think the F might leave rates alone at the August meeting. Others think another bump-up is in store then, if it be not that after that the Fed will rouse to the sidelines for a while to assess economic activity.

The Fed's goal is to push up rates enough to quench inflation but not so a great deal as to stall economic produce

The F review said that another factor restraining overall economic activity is a housing market that is slowing after five straight years of resounding noise times. "Activity in residential real-estate markets unconcerneded in most parts of the country" the report noted. That has translated into "more limited" gains in housing prices, the report added.

Against that backdrop, the demand for residence mortgages as well as for other consumer loans has weakened in principally of the Fed's districts.

Copyright CHICAGO SUN-TIMES 2006

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