though the economy shows some signs of slowing down, the Federal Reserve reported Wednesday. Loan demand increased in the Fed's New York, Philadelphia, Cleveland, Kansas City, and San Francisco regions, while it was flat in the Richmond, Va., Atlanta, and Dallas areas. To help the central bank craft monetary policy, the Fed compiles the Beige Book, its periodic review of economic conditions around the country. Most of the 12 Federal Reserve banks attributed the increased loan demand to commercial borrowers, although the New York Fed said borrowing by consumers led the way. Banks may be making more loans, but they aren't lowering their underwriting standards. Only three Fed banks mentioned credit standards - a hot button just months ago. The Philadelphia Fed said banks in its region have toughened their credit standards while the New York and Kansas City banks said loan standards are steady. More generally, the Fed said consumer spending is off, signaling a slowdown in retail sales. But manufacturing activity increased slightly, and residential and commercial construction held steady. Inflation also appeared in check, with wage and price pressures easing. Economists were split on what the data mean. "This is like stepping onto a beach and trying to figure out if the tide is going in or out," said Jim Chessen, the chief economist at the American Bankers Association. "The reason I say that is the results are so mixed in this report. There are things that are a little worse and things that are a little better." Still, strong loan demand is definitely a good sign, Mr. Chessen said. "This suggests bankers are confident about lending in this environment, that this economy is going to be strong enough, and that the risk of not getting repaid is not so great," he said. Other economists interpreted the data differently. David Littmann, senior economist at Comerica Bank in Detroit, said he believes the report shows a slowing economy. That means bankers shouldn't expect loan demand to remain strong, he said. "The consumer won't be knocking the door down to borrow money," agreed Richard I Sichel, senior vice president at the Bryn Mawr Trust Co. "Slow growth, low inflation, and no great demand for loans" lie ahead, he said. The economists agreed on one point - the Federal Open Market Committee, the central bank's policy-making committee - won't change interest rates when it meets Nov. 15. Banking-related details by region include: New York: Loan rates lower, squeezing spreads. Delinquencies falling. Credit standards unchanged. Loan demand slightly higher, especially in consumer loans. Philadelphia: Loan demand up, particularly for commercial and industry loans and credit cards. Consumer loan growth may ease soon because of "deterioration in consumer confidence and tightening of credit standards by banks." Cleveland: Loan growth strong, although consumer demand slowed. Delinquency rates remained "quite low." Deposit growth slowed and maturities shortened. Richmond: Interest rates down slightly on all loans and demand unchanged. Atlanta: Credit needs steady, but consumer demand softening. "Several bankers reported that commercial real estate and company buyouts were two of the stronger areas of demand for financing." St. Louis: Loan demand waning, especially by consumers. Kansas City: Lending rose slightly as security holdings declined. Rates on consumer loans rose, but further hikes not expected. No change in underwriting standards. San Francisco: Loan demand high and credit quality good, except in Southern California.

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