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Fed gives a gloomy glance at economy
Growth, price gauges worse
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More from BusinessWASHINGTON — The country slogged through slower economic growth and rising prices during the past month, packing a double whammy for people and businesses alike.
The Fed's new snapshot of business conditions, released Wednesday, also underscores the challenges confronting Federal Reserve Chairman Ben Bernanke and his colleagues as they try to get the economy back on track.
For now, many economists predict the Fed will probably leave a key interest rate alone when it meets next on Aug. 5, given all the economic crosscurrents. Boosting rates to fend off inflation would hurt the fragile economy and the already crippled housing market. On the other hand, the Fed isn't inclined to lower rates because that would aggravate inflation.
Growth and inflation barometers turned worse since mid-June, according to the Fed report.
Consumer spending — the economy's lifeblood — was reported as "sluggish or slowing" in nearly all the 12 Fed regions, although the government's tax rebate checks spurred sales for some items, especially electronics.
Auto sales, meanwhile, were characterized as "almost uniformly weak" across all Fed regions.
On the manufacturing front, activity also declined in many Fed regions.
Turning to inflation, all Fed regions described "overall price pressures as elevated or increasing," the Fed report says.
Businesses continued to be hit by rising prices for fuel, metals, food and chemicals, among other things. Many Fed regions said manufacturers planned to raise prices to customers as a way of coping with the higher production costs.
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