(Reuters) – The sluggish U.S. recovery failed to gain speed in recent weeks and softened in some areas of the country, as volatile stock markets and sputtering factory activity weighed on growth, the Federal Reserve said on Wednesday.
“Economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity,” the Fed said in its Beige Book collection of anecdotal reports of economic conditions in the Fed’s 12 districts.
A sharp decline in stock markets since mid-July and increased economic uncertainty have made businesses gloomier about the outlook in several regions, the Fed said.
Growth was modest or slight in five districts through late August, while the remaining seven described activity in terms such as “very subdued” or expanding “more slowly.”
U.S. consumer and business confidence nose-dived last month after a bruising political battle over the U.S. budget led Standard & Poor’s to strip the nation of its much-prized triple-A credit rating and sent stock markets tumbling. Employers responded by putting the brakes on hiring.
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