Signs of a US economic slowdown are starting to become apparent with consumer spending becoming "soft" amid a deep slump in housing, the Federal Reserve said in its Beige Book report Wednesday.
The report, to be used by the central bank at its December 11 policy meeting, said that the economy "continued to expand during the survey period of October through mid-November but at a reduced pace compared with the previous survey period."
Among the 12 districts, "seven reported a slower pace of economic activity while the remainder generally pointed to modest expansion or mixed conditions," the report said.
The Beige Book report and comments from Fed vice chairman Donald Kohn earlier in the day suggest that the central bank is willing to consider further interest rate cuts despite its official stand that the economic risks are "roughly balanced."
Kohn said the Fed "should not hold the economy hostage" to teach a lesson to financial market speculators and must remain nimble in the face of a rapidly shifting economic picture.
Analysts say Fed policymakers appear divided on the need to cut interest rates and whether the economy faces a serious downturn or recession.
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