WASHINGTON -- The U.S. economy is continuing to improve slowly in many regions with the help of a rebounding industrial sector, but a full-scale recovery fueled by consumer spending is not yet under way, the Federal Reserve Board reported yesterday.

"The economic recovery continues to be uneven across the country," according to the Fed's so-called beige book report. The report is based on a survey of business and other contacts in the 12 Federal Reserve Bank Districts and is expected to serve as a basis for monetary policy talks among members of the Federal Open Market Committee.

The committee is scheduled to meet Oct. 1.

Many private economists say they believe Fed officials are inclined to lower interest rates again to nudge what is turning out to be a weak recovery by historical standards.

On Friday, when the Federal Reserve Board cut the discount rate to 5.0%, members cited continuing concerns about the economy as one reason for their action.

The Fed report yesterday said industrial production "has provided considerable impetus to recovery," as firms continue to get orders for exports and to slow their pace of inventory reductions, which technically adds to U.S. output.

On Tuesday, the Fed reported that industrial output rose 0.3% in August, the fifth consecutive monthly increase.

But, the report added, "there is little sign of a sizeable rebound in consumer spending that will contribute to a strengthening business recovery."

Outlays for durable and nondurable goods showed few signs of picking up, the report said, and retail sales since July were described as "relatively flat or slightly higher than their levels earlier in the summer."

The report said the housing sector showed signs of faltering after a brief rebound in the spring following the end of the Persian Gulf war.

Construction starts of new housing as well as housing sales were found to have slowed, although the report noted that recent declines in home mortgate rates and prices made homes more affordable to potential buyers.

On Friday, the Federal Home Loan Mortgage Corp. said the average fixed mortgage rate slipped to 9.02%, the lowest in over 13 years. The Veterans Administration yesterday cut the rate on V.A.-backed mortgages to 8.5% from 9.0%.

The Commerce Department reported yesterday that housing starts in August advanced a modest 0.6% to a seasonally adjusted annual rate of 1.07 million units, the fifth consecutive monthly rise. But permits -- which measure future building activity -- tumbled 4.9% to 956,000 units.

Nearly all district banks said that loan activity remained "relatively flat, or has eased further in recent months," the Fed reported. "Demand for business loans continues to be weak and has softened further in some districts."

The report cited weakness in the districts of Philadelphia, Cleveland, Chicago, and St. Louis.

In addition, the Fed said hot weather is hurting farm production in many regions, and several districts reported declines in commodity prices.

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