Fed Banks: `Widespread Signs of a Deceleration' in Economy (Joshua Zumbrun)

Sept. 8, 2010 (Bloomberg) -- The Federal Reserve said the U.S. economy maintained its expansion while showing “widespread signs of a deceleration” in mid-July through the end of August, according to a survey by 12 regional Fed banks.

Five regional banks reported “economic growth at a moderate pace” and two pointed to “positive developments or net improvements.” The remaining five banks said conditions were mixed or decelerating.

The report underscores the Fed’s view that while the recovery from the worst recession in seven decades has cooled, the economy isn’t relapsing into a contraction. In a speech last month in Jackson Hole, Wyoming, Fed chairman Ben S. Bernanke said “the preconditions for a pickup in growth in 2011 appear to remain in place.”

In the previous regional report, released July 28, the Fed said “economic activity has continued to increase, on balance.” Two Fed districts reported the economy “generally held steady,” while two others said the pace of growth “had slowed recently.”

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