Fed says economy was sluggish in June

July 23, 2008

The Chicago region experienced a sluggish economy last month, according to the latest Beige Book report by the Federal Reserve Bank of Chicago.

Mixed consumer spending was influenced by federal tax rebates and increased retail discounting as well as by slowing auto sales. Tourism and agriculture was hurt by wet weather, and discretionary spending on clothing, electronics and furniture slumped.

Business spending was little changed. Shortages of skilled labor continued to be a problem.

Manufacturing weakened slightly, although exporters fared well. High demand for equipment used in oil, gas and mineral exploration was offset by a softening in equipment used for construction and agriculture.

Residential construction and house prices continued falling.

Consumer lending tightened as lenders pulled back and raised standards, though demand for business loans remained steady.

The report is issued eight times a year based on interviews and other means of gathering information on economic trends. The area of the Midwest included in the Chicago district includes Iowa and most of Indiana, Illinois, Michigan and Wisconsin.

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