The growth of the U.S. economy stalled in recent weeks as businesses took out fewer loans and banks tightened credit standards, the Federal Reserve said in its latest Beige Book report.
“Overall economic activity was little changed in recent weeks. Nine Districts reported either no change or only a slight change in activity this period while three indicated modest growth,” the Fed said.
The Beige Book is compiled by the Richmond Fed based on information gathered from the 12 regional Fed banks. The latest report is based on information collected on or prior to April 10.
Although growth was weak, there were no districts that reported an overall decline in economic activity. That suggests the economy is actually stronger than it was at the start of the year when the January Beige Book recorded slight decreases in activity in three districts and one significant decrease.
Compared with the prior report, released in March, the economy appears slightly more sluggish. In that report, six districts reported eighter no change or slight growth and six reported modest growth.
The report said expectations for future growth were mostly unchanged from the prior report which showed businesses did not expect improvement in the months ahead. Two districts, however, saw outlooks deteriorate.
Several of the regional Fed banks reported that lenders in their districts have tightened credit standards recently, although most did not show a steep tightening. Only the New York, San Francisco, and Dallas Fed reported credit standards had tightened significantly. Many districts reported that demand for loans from businesses had declines and a few also reported lower consumer borrowing.
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