Fed survey: Growth slowed across much of U.S. in June, July

The economy worsened in much of the country earlier this summer, hampered by high unemployment, weak home sales and signs of a slowdown in manufacturing. A survey by the Federal Reserve, released today, found that weak consumer spending, slow job growth and tight credit are restraining growth into the second half of the year. Growth slowed in seven of the Fed’s 12 bank regions in June and early July, the report found, compared with the spring. That marks the worst showing this year. The Fed’s survey found that factory output weakened in some areas, including the Atlanta district, which includes Baton Rouge. That’s likely to heighten concerns that manufacturing, one of the economy’s few bright spots over the past two years, is sputtering. The Fed’s report found that the job market remained weak in most of the 12 districts. Consumer spending improved, aided by a drop in gas prices, which had peaked at nearly $4 a gallon in early May. But auto sales dropped. Supplies at many dealers remained tight because of disruptions stemming from Japan’s March 11 earthquake.