Economic growth has decelerated over the last six weeks amid an increasingly uncertain outlook, according the Federal Reserve's regional business survey. Known as the Beige Book, it found that "economic activity continued to expand in all districts in September and early October, but the pace of growth decelerated since August." The report said five of the 12 regions (Cleveland, Dallas, Kansas City, Richmond and San Francisco) reported a slower rate of growth, while the other seven districts said growth was similar to the last report, which found four districts reporting a slower pace of expansion. The survey noted that the consumer spending, manufacturing and service industries weakened, and also said labor shortages may be restraining expansion. The situation in the housing market grew more dismal as it spread beyond housing, with contacts in a number of industries indicating a higher-than-usual degree of uncertainty about the outlook for economic activity on concerns credit tightening and slowing construction might hinder activity in their industries. Nevertheless, there was "cautious optimism because few see much evidence of such spillovers at this time." The study was based on information collected through October 5.
Commentary: Full Recovery from Credit Crisis May Take Time - Bernanke • Economic Report Summary: Real Economic Growth Estimates Revised Upwards • Greenspan: Credit Crunch Will Take A Toll
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