Growth slows in parts of US
Economic growth in parts of the US is at risk of grinding to a halt, heightening fears of a double-dip recession.
The Federal Reserve’s latest Beige Book survey, released yesterday, and tracking 12 regions showed growth in Atlanta and Chicago had slowed and Cleveland and Kansas City had held steady. Other regions were described as having “modest” growth in economic activity.
While most areas saw some increases in manufacturing, half reported a slowing in activity. Car sales in most regions declined and the housing market continued to struggle.
The staggered road to recovery has been blamed on high unemployment and low consumer confidence.
However, the figures will allay the worst fears that the US economy has stopped growing altogether.
Fed chairman Ben Bernanke has said he will hold rates at their record low levels for the foreseeable future.
Meanwhile, California governor Arnold Schwarzenegger declared a state of emergency over the state’s finances yesterday, raising pressure on lawmakers to negotiate a state budget that is more than a month overdue and will need to meet a $19bn shortfall.