Fed Survey Shows Slowing Economy

Disappointing holiday sales fuel slowdown verging on recession
By Sam Gale Rosen,  Newser Staff
Posted Jan 16, 2008 2:34 PM CST
Federal Reserve Board Chairman Ben Bernanke is seen during a meeting with House Speaker Nancy Pelosi, D-Calif., on Capitol Hill in Washington Monday, Jan. 14, 2008, to discuss ways Congress might act...   (Associated Press)
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(Newser) – The Federal Reserve's regional business survey—released today, ahead of chief Ben Bernanke's appearance tomorrow before Congress—shows economic activity increasing more slowly, thanks to "disappointing" holiday sales. Some analysts think the survey—nicknamed the Beige Book—is evidence for a general economic slowdown, reports Bloomberg. "We are pretty much on the knife's edge'' of a recession, says one economist.

"Most reports on retail activity indicated subdued holiday spending and further weakness in auto sales," the survey reads. Fed officials will meet Jan. 29-30, and Bernanke has already signaled willingness for more rate cuts, which he has said may "well be necessary." Many analysts predict a cut of half a percentage point, to 3.75%, Bloomberg writes.