The Federal Reserve beige book for June and July, a snapshot of the economy, reports that Americans are cutting back on everything from cars to food to brand-name products, in another sign that the economy is slowing.
The report raises concerns that as money from the federal stimulus checks dries up, the recession could become even more severe.
The Fed highlighted fears that economic growth will continue to stagnate as Americans cut back in the face of a weak job market and higher gasoline prices. Consumer spending accounts for more than two-thirds of the nation’s total growth.
The Chicago District (7th) which includes Milwaukee reported that:
Economic activity...was sluggish in June. Consumer spending was mixed and labor market conditions weakened some...Residential construction declined further and nonresidential construction showed signs of slowing. Manufacturing activity weakened slightly. Consumer lending declined, while business lending was stable. Cost pressures from rising material and energy prices remained high, while wage pressures continued to be low. Flooding and cool weather further set back crop conditions in June, although they improved toward the end of the month and in early July.
The full report is linked here.