Fed report sees growth slowing

WASHINGTON -- The economy logged decent but slower growth in the early summer as some consumers tightened their belts. Despite high energy prices, overall inflation remained fairly moderate.

That snapshot of America's business climate emerged yesterday from the Federal Reserve Board's so-called beige book, a survey of regional economic performance.

All 12 Fed districts generally indicated continued economic growth during June through the middle of July. Still, there were ``numerous individual reports pointing to evidence that the pace of growth has slowed," the survey said.

Most districts reported that consumers, a major force in shaping economic activity, had less of an appetite to spend. That resulted in weaker sales for merchants. In some cases, high gasoline prices were blamed for squeezing household budgets .

Sales were ``relatively weak among `big box' retailers and other low-price outlets," the survey found. Sales were healthy for luxury shops, whose more affluent customers' are not as strained by high energy bills.

Also yesterday, the dollar fell the most in three months against the euro after the Fed's report.

Traders sold dollars as the report suggested the central bank may be closer to pausing after lifting interest rates 17 straight times since June 2004. The dollar lost almost 1 percent against the euro in the two days after Fed chairman Ben S. Bernanke said July 19 that ``moderation" in the economy is underway.

The Fed's report is based on information supplied by 12 regional Fed banks and collected before July 17. Thus, the survey captures the latest run-up in energy prices. Oil prices surged to a record closing high of $77.03 a barrel on July 14. Gasoline prices are also higher, exceeding $3 a gallon in some areas.