WASHINGTON - The Federal Reserve has little good news for President Bush in its final regional economic report before the November election.

The periodic survey, known as the Beige Book, reveals that the U.S. economy has improved slowly but at an uneven pace during the past six weeks.

The Cleveland, Dallas, Kansas City, Philadelphia, and Richmond Federal Reserve districts have shown modest improvement, but conditions have weakened in the Chicago and San Francisco districts.

Slow Expansion Elsewhere

The remaining five districts have shown a continuation of "slowly expanding activity." the Fed reported.

Overall, loan demand has been flat, the Fed found, with stronger mortgage lending offset by languishing demand for both consumer and commercial credit. Several districts reported a continued increase in mortgage refinancing activity resulting from low interest rates.

The Fed's report, which is prepared by all 12 district banks. was released on Wednesday. The report helps guide the monetary policy decisions of the Federal Open Market Committee, which next meets on Oct. 6.

President Bush, who is behind in the polls, could use some positive economic news to boost his popularity. But there's little more the Fed can do between now and November that would stimulate growth. It has already cut the fed funds rate 24 times in recent years.

|It's Too Late'

"Right now there's nothing they can do to impact the election," said Ward McCarthy of Stone & McCarthy Research Associates in Princeton, N.J. "It's too late."

Many economists have urged the Fed to further ease the federal funds rate, which now stands at 3%. in a continued effort to stoke the fires of the economy.

The unemployment figures to be released next week - which are generally expected to be poor - might be an excuse for further easing, some economists say.

Highlights of the Fed's regional economic report follow:

* Boston: Economic activity has remained sluggish, with retailers and manufacturers still awaiting recovery. On a bright note, residential real estate sales have been fairly strong, with first-time homebuyers accounting for the bulk of activity.

* New York: Overall loan demand remained soft, but there was increased demand for residential mortgages. Demand for auto loans fell, with banks unable to compete with lower rates offered by auto financing companies. Senior loan officers at small and midsize banks said their willingness to lend remained steady.

* Philadelphia: Loan volume was steady, with business lending flat, and gains in residential mortgage lending offset by declines in consumer installment lending.

* Cleveland: Business loans declined in August, with bankers speculating that companies generated enough cash flow to meet working capital needs. Home equity loans were the major source of loan expansion.

* Richmond: Retail sales, prices, and wages increased, with retailers and manufacturers reporting optimism about economic performance in the next six months. Commercial loan demand weakened slightly, but consumer loan demand remained steady.

* Atlanta: A surge in economic activity is expected, as communities begin rebuilding after the destruction caused by Hurricane Andrew. Bankers expect new deposits and increased loan activity as aid pours into the region. Consumer and business loan demand was flat, but mortgage refinancings may set records.

* Chicago: The recovery slowed last month, with some sectors - especially the auto industry - weakening. Manufacturing increased, though more slowly and erratically than in past months.

* St. Louis: Total loans outstanding at large banks declined slightly, after remaining flat in previous months. Business and real estate loans fell, but consumer loans increased.

* Minneapolis: Improvements in construction, tourism, and auto and home sales were offset by weak labor markets, with layoffs in manufacturing and mining sectors.

* Kansas City: Prime lending rates remained unchanged last month, and only a few banks expect to lower the rate anytime soon. However, most banks lowered consumer loan rates and expect additional decreases.

* Dallas: Retail sales have been sluggish in most major markets, particularly in the Houston area, but auto sales remained higher than last year.

* San Francisco: Pessimism has increased among business leaders, with only one-fifth of those polled expecting the economy to expand by at least 2.5% during the next year. Loan demand was soft, especially in California.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.