Fed says U.S. economy "generally weak"

WASHINGTON, June 11 (Xinhua) -- U.S. economic activity remained generally weak in late April and May as consumers were squeezed by soaring costs for energy and food, the Federal Reserve said Wednesday.

"Three districts described economic activity as softer, weaker, or lower, with an additional four districts reporting slower, sluggish, or modest economic growth," said the Fed in a nationwide survey, which is based on economic information supplied by the Fed's 12 regional banks and collected on or before June 2, 2008.

The remaining five districts described activity as stable or little changed in recent weeks, it said.

It said that consumer spending, which accounts for two-thirds of overall economic activity, slowed as incomes were pinched by rising energy and food prices.

Higher energy prices also appeared to damp domestic tourism.

Manufacturing activity was generally soft in recent weeks, with weak demand for housing-related and some other products but with increasing demand for exports.

Residential real estate markets remained weak across most districts, while commercial real estate conditions varied across districts.

Lending activity also varied across districts and market segments, though tighter credit standards were reported for most categories.

Meanwhile, the Fed suggested there's little danger of wage inflation taking off.

"In most districts, wage pressures were reported as moderate or limited for all but a few skilled-labor positions," it said.

The survey, or Beige Book, summarizes comments received from business and other contacts outside the Fed and is not a commentary on the views of Fed officials.

However, information from the survey will figure into discussions at the Fed's next policy-making meeting to be held later this month.