Fed: Housing slowdown widespread

The economy's still growing but certain sectors like real estate are showing weakness.

October 12 2006: 2:31 PM EDT

WASHINGTON (Reuters) -- The economy kept growing since early September, the Federal Reserve said Thursday, as four regions reported growth had firmed while a few areas noted growth had cooled.

The remaining districts characterized growth as moderate or mixed, the Fed said in its Beige Book summary of economic conditions, which is composed of reports from the 12 regions covered by each Fed bank.

 
Ben Bernanke's Fed has been trying to engineer a "soft landing" of slower growth and lower inflation, but no recession.
 
The latest report was prepared by the Richmond Fed Bank with data collected before Oct. 2.

A number of regions saw tight labor markets and some shortages of skilled workers. Some areas reported wage pressures, although others said wage pressures were in check.

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Also, while the majority of districts felt price pressures were contained, input prices increased in several areas and a few regions said businesses were passing higher costs on to consumers, the Fed said.

Fed districts reported widespread cooling of housing markets. Home prices fell, inventories rose, and sales softened in most districts, although some regions reported gains in residential activity, the Fed said.