Fed: Economy lost momentum as shoppers tighten belt
WASHINGTON (AP) -- Belt-tightening by consumers and a "pronounced weakness" in housing-related industries leads the Federal Reserve to conclude that the economy lost momentum heading into the new year.
In its "Beige Book" snapshot of business conditions around the country, the central bank says consumers and businesses alike are more cautious because of the persistent housing slump and harder-to-get credit.
The report comes as a recent string of economic reports -- ranging from a plunge in retail sales to a big jump in the unemployment rate -- raises fears that the nation is heading for its first recession since 2001.
The Fed report notes that the economy, in fact, did grow during the survey period, "but at a slower pace" than the previous survey taken during the late fall.