The Congress Blog

MICHAEL M. GRYNBAUM
The New York Times
September 4, 2008

The nation’s economy failed to pick up speed in August and the final days of July, as rising prices and a weak job market prompted consumers to reduce spending and shop at discount stores to try to conserve cash.

Economic activity stayed “weak, soft or subdued” across the country, according to the Federal Reserve Bank’s beige book, a regular snapshot of the economy. The latest edition of the survey, released on Wednesday, signaled that the economy spent the summer in a rut, with consumers feeling little relief from the government’s tax rebates.

Although gasoline and oil prices began to subside in August, many businesses reported that they felt squeezed by relatively expensive raw materials. In at least half of the 12 Fed districts — including Atlanta, Boston, Dallas and New York — businesses said they had been forced to raise prices, potentially stoking inflation faster.

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