WASHINGTON DC: Weak consumer spending, job losses and a slump in homes sales are the over-arching themes of the US Federal Reserve's Beige Book, the central bank's octannual snapshot of business activity across the nation.

April and May saw "generally weak" economic activity, according to the Fed's report, which points to slow growth, with both consumers and businesses stressed by high fuel prices and banks increasingly reluctant to lend money.

Although the economy is not in desperate shape, the report suggests the business community and households are facing multiple challenges all at once.
Earlier this week Fed chairman Ben Bernanke tried to persuade anyone willing to listen that despite May's hike in jobless numbers – the highest in more than twenty years – the risks to the economy have "diminished over the past month or so".

He insisted low interest rates and tax cuts are helping the US to overcome its credit and economic problems.

Bernanke did concede, however, that spiralling fuel prices could spur inflation: "The latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations."

Data sourced from BBC Online; additional content by WARC staff