Fed: US economy still weak

Economic activities in the United States contracted further or remained weak amid prolonged recession, the Federal Reserve says. An overall survey by the Federal Reserve found that in some industries, the economy continued to deteriorate; orders and shipments of paper, automobiles, wood products and electrical machinery across the country were down. Business travel was off, with officials in the Atlanta district reporting convention cancellations. Studies indicate that "overall economic activity contracted further or remained weak" although five of 12 districts surveyed noted a "moderation in the pace of decline," the report said. Several districts also "saw signs that activity in some sectors was stabilizing at a low level," said the report to be used by the Federal Open Market Committee, the central bank's policy-making body, at its next meeting on April 28-29. The current report, based on information gathered from early March until April 6, said residential real-estate markets continued to be weak. Bankers reported tight credit conditions, rising delinquencies, and some deterioration of loan quality. The labor situation was bad as employment continued to decline across a range of industries, with only scattered reports of hiring. "Wage and salary pressures eased as labor markets weakened in all districts, and many contacts continued to report job cuts and wage and hiring freezes," the report concluded.