WASHINGTON – The economy worsened in much of the country earlier this summer, hampered by high unemployment, weak home sales and signs of a slowdown in manufacturing.
A survey by the Federal Reserve, released Wednesday, found that weak consumer spending, slow job growth and tight credit are restraining growth into the second half of the year.
Growth slowed in eight of the Fed’s 12 bank regions in June and early July, the report found, compared with the spring. That marked the worst showing this year.
The Fed’s survey found that factory output weakened in some areas. That’s likely to heighten concerns that manufacturing, one of the economy’s few bright spots over the past two years, is sputtering.
Further such evidence came in a separate report Wednesday from the Commerce Department, which found that businesses reduced orders for airplanes, autos, heavy machinery and other long-lasting manufactured goods in June.
Orders for durable goods fell 2.1 percent, the department said. It was the second drop in three months. The decline was driven by a big drop in orders for commercial aircraft. Orders for autos, auto parts and computers also fell. A category that tracks business investment plans dropped 0.4 percent.
Droughts and severe flooding weakened seven districts with major agricultural sectors, the report said. Manufacturing output rose overall. But many districts reported only “steady or slowing” growth. Only two districts – Kansas City and Cleveland – reported rising manufacturing activity.