The Federal Reserve's latest report on the US economy says it is being affected by 'widespread cooling' in the property market but other sectors are holding generally firm.
The widely watched Beige Book survey, used by the central bank for its policy-making meetings, said the overall economy continued to expand in the six weeks since the previous report.
The vast services sector 'generally strengthened', the Beige Book said, while manufacturing activity remained 'generally strong'. Consumer spending was mostly improved across the US with the exception of the housing and car markets, the Fed said.
On inflation, the report said wage growth was 'generally modest' outside the categories where workers were in short supply. Inflation pressures from commodity prices including energy appeared to ease, the report said.
The survey was consistent with projections from the Fed and many private economists that the world's biggest economy is slowing but not in immediate danger of recession.
Federal Reserve chairman Ben Bernanke said last week that the latest data indicate a 'substantial correction' in the housing market is hurting the US economy while at the same time inflation is high. Some economists expect US economic growth to slow to around 2% in the third quarter from 2.6% in the second. In light of the slowdown, the Fed has held its base lending rate at 5.25% since August after hiking rates 17 times in a row.
