Residential real estate a bright spot: Beige Book

Recession less severe in early summer, Beige Book.
WASHINGTON (MarketWatch)

The U.S. economic recession seems to becoming less severe as the summer progresses, according to the Federal Reserve's latest Beige Book report released Wednesday.

While still weak, some regions reported that the pace of the downturn had moderated. Other regions said that activity had begun to stabilize. The Beige Book is designed to give Fed officials a "feel" for conditions on the ground. The report said retail sales remained sluggish, contacts in the factory sector saw a turnaround on the horizon and bank lending was flat or weakening. Perhaps the most significant development is that businesses across the country are finding creative ways to cut wages and benefits. Economists note that as long as wages are under pressure, the threat of deflation remains. Labor market conditions remain slack, the report said