US Federal Reserve Reports Nationwide Economic Downturn

03 May 2001

The US economy continued to expand sluggishly as it entered the second quarter of 2001, according to the influential Beige Book report from the Federal Reserve.

Compiled from data gathered by the Reserve’s twelve regional units, the report revealed that America’s economy suffered from anemic retail sales, tumbling factory orders and rising energy costs.

“Almost all districts report a slow pace of economic activity in March and early April,” declared the survey. “Industrial activity has continued to weaken, with orders and production having fallen in many districts.” Such findings may strengthen calls for the Federal Reserve to make the fifth cut in interest rates this year at its meeting on May 15.

However, there was also a slight glimmer of hope – both for US observers and for those seeking to limit the effects of America’s slowdown elsewhere – with the news that retail sales seem to have picked up in April.

Despite the overall gloomy nature of the report, the stock markets remained relatively unaffected. Indeed, the tech-heavy Nasdaq closed 52 points up, reaching a two-month high.

News source: BBC Online Business News (UK)