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Economic activity across the U.S. continued to expand from mid-April to early June, but there were some signs of deceleration, a report from the

Federal Reserve


According to the central bank's "beige book," activity moderated in the Fed's Atlanta, Kansas City, Richmond and San Francisco districts. The New York district showed increased concern about the outlook for the second half of the year, the Fed said Wednesday.

The other seven districts said growth was similar to the pace reported in the previous beige book. The Philadelphia district, however, had an improvement in overall economic conditions.

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Consumer spending continued to increase, but the rate appears to have slowed. Manufacturing activity expanded strongly. Still, there were more areas of weakness than in March and early April.

Residential real estate markets cooled across the country, with slower homebuilding and sales of existing homes. Commercial real estate activity strengthened, and a few district reports expressed concern about too much building in some areas.

The financial sector continued to report good credit quality. Commercial lending increased, but loans to consumers, especially for mortgages and home equity loans, slowed somewhat. Growth in the energy industry was firm, but its expansion was constrained by shortages of equipment and labor, the Fed said.

Labor markets grew tighter, and more districts had employers who had trouble finding skilled workers. Wage pressures remained moderate overall, and high energy costs led to price increases in manufacturing and, to a lesser degree, retail.

The report was prepared at the Dallas Fed and was based on information collected on or before June 5. The report, released eight times a year, summarizes comments the 12 district Fed banks receive from business contacts, economists and other experts in their regions.

Fed policymakers next meet June 28-29. They have raised short-term rates by a total of 400 basis at 16 straight meetings going back two years. The fed funds target rate is now 5%, and a quarter-point hike to 5.25% at the upcoming meeting is now expected by the financial markets.