WASHINGTON – For the first time this year, the economy has slowed in several U.S. regions, burdened by high gas prices that have weakened consumer spending and crises in Japan that reduced manufacturing output.
All 12 of the Federal Reserve’s bank regions grew this spring. But four regions endured slower growth in April and May compared with earlier this year, a Fed survey released Wednesday showed.
It was the weakest survey since fall, when two regions failed to grow at all. And it confirmed a slew of recent data that portray a national economy whose growth has faltered. Hiring has slowed, orders to factories have declined and home prices have fallen.
Still, many economists agree with comments Fed Chairman Ben Bernanke made Tuesday. Bernanke noted that the economy has weakened in recent weeks, but he suggested that the slowdown from high gas prices and Japan’s crises is temporary and growth should pick up later this year.
“The report is consistent with the softening in consumption and production seen in recent data,” said Michael Gapen, senior U.S. economist at Barclays Capital. “We believe that the main factors constraining activity – higher energy prices and supply-chain disruptions – will be transitory.”
The Fed’s reports have brightened since it concluded that the economy slowed in all its districts in the fall of 2008, after the financial crisis erupted.
Fed banks in New York, Philadelphia, Atlanta and Chicago said growth weakened in those regions. By contrast, the Fed regions in Boston, Cleveland, Richmond, St. Louis, Minneapolis, Kansas City and San Francisco said growth there remained steady.
The Dallas region was the only one to report accelerating growth. That was mostly because of higher oil prices, which benefited its energy industry.
The report, known as the “Beige Book,” is based on anecdotal information gathered by officials at the Fed regional banks. It provides a more in-the-trenches review of the economy than government statistics do. Wednesday’s report covered the roughly seven weeks between April 5 and May 27.