WASHINGTON — The U.S. economy weakened further in the past month across almost all regions, hurt by a lack of credit and declines in retail sales, the Federal Reserve said in its regional business survey.
“Most districts noted reduced or low activity across a wide range of industries,” the Fed said Wednesday in its Beige Book release, published two weeks before officials meet in Washington to set monetary policy. “Overall economic activity continued to weaken across almost all” regions, the report said.
The Beige Book underscores the picture of a downturn that both private forecasters and Fed officials predict will be the longest since the 1930s. Fed Chairman Ben Bernanke and his colleagues are forecast to keep the main interest rate close to zero and explore taking on more assets to unfreeze credit when they meet Jan. 27-28.
“It paints a dire picture of the economy and the consumer,” said Doug Roberts, chief investment strategist for , a Shrewsbury, N.J.-based research firm. Fed policymakers “understand clearly the situation and are quite aware of the need to not get caught behind the curve.”
“Growth declined slightly in the third quarter, but it is likely to record a much sharper decline in the fourth quarter,” Philadelphia Fed president Charles Plosser, below, said Wednesday. “The first half of 2009 is not likely to be much better.” Bloomberg News; photo by Bradley C. Bower, The Associated Press
