(MENAFN- The Journal Of Turkish Weekly) >Consumer spending showed signs of softening in 12 major regions across the U.S. from mid-May through the end of June, the Federal Reserve's Beige Book, which gauges economic conditions, said Wednesday.
Retail sales activity was mixed with slight to modest declines reported in Philadelphia, Cleveland, and Richmond; mixed results reported in Atlanta and Chicago, and modest to moderate growth reported in St. Louis, Minneapolis, Kansas City and San Francisco.
On the positive side, the outlook for consumer spending was mainly optimistic in Boston, Philadelphia and Kansas City.
Consumer spending is a significant indicator of overall economic activity for the Fed in its interest rate decision. Although spending was strong in April, it was relatively lower during May.
Personal spending rose by 0.4 percent in May compared to the previous month, the Department of Commerce announced last month, but that was still lower than data in April when spending increased by 1.1 percent -- the strongest monthly jump in almost seven years.
Meanwhile, economic activity continued to expand at a modest pace across most of the regions between mid-May through the end of June, while labor market conditions remained stable and hiring continued to grow modestly, the Beige Book noted.
On a higher note about the overall economy, manufacturing activity generally improved across all districts and real estate activity continued to strengthen since American banks reported an overall increase in demands for loans.
Yet, the districts reported that they expect overall economic growth "to remain modest".
After growing 1.8 percent in 2007, the U.S. economy contracted 0.3 percent in 2008 and 2.8 percent in 2009 during the financial crisis. While the economy grew more than 2 percent after 2012, growth is expected to be 2.7 percent this year and 2.4 percent next year, according to the World Bank.
The Fed's next meeting will be at the end of the month as financial markets anticipate a rate hike decision.
The bank rose its benchmark interest rate in December -- the first in almost a decade.
While the Fed remains cautious against market stability for another rate hike and awaits economic indicators to strengthen, analysts expect at least one rate hike at the end of this year.