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Economy still in slump, Fed says

September 04, 2008|From the Associated Press

WASHINGTON — The nation struggled with slow economic growth and still-high prices that are weighing on consumers and businesses alike as the race for the White House kicks into high gear.

The Federal Reserve's snapshot of business conditions last month, released Wednesday, underscored the toll the housing, credit and financial debacles are having on the economy.

Fed Chairman Ben S. Bernanke and his colleagues are all but certain to leave a key interest rate at 2% when they meet next Sept. 16.

Economic activity continued to be slow, the Fed said in its "beige book" report. Businesses described the climate as "weak," "soft" or "subdued."

Consumers, the lifeblood of the economy, showed caution.

The Fed regions of Chicago, Dallas and San Francisco, for instance, reported noticeable declines in spending on clothing, electronics and jewelry. The report also said manufacturing activity was "weak or declining" in most Fed regions.

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