--Fed says US consumer spending "lackluster"
--Fed: Labor markets continued to ease in latest beige book survey
--Fed says US manufacturing activity decreased or slowed
--Fed says US wage pressures modest
--Fed says non-energy prices generally stable

By Shihoko Goto Washington, June 13 (BridgeNews) - U.S. economic activity in the April to May period was "little changed or decelerating," the Federal Reserve reported Wednesday in its latest summary of U.S. economic conditions. The survey, known as the beige book, also found that consumer spending was "lackluster" nationwide, while labor markets continued to ease, the Fed said.
* * * In a summary of the report, the Fed said evidence from various sectors of the economy collated by its 12 district banks indicated that manufacturing activity during the past two months declined or remained weak. Meanwhile, new construction appears to have leveled off, even though it remained at high levels. The latest report was prepared by the Federal Reserve Bank of Minneapolis.
The tone of the latest report is largely unchanged from the central bank's previous report released May 2, when it said that economic activity was "slow" and that retailers expected "small gains, at best," in coming months. Still, the Fed pointed out that the housing sector, which has continued to be cited as a bright spot in the sluggish economy, remains strong. "Home buying is generally active," even though "residential construction is mixed," the Fed said. In contrast, demand for commercial real estate and construction "have slackened somewhat in several districts."
Manufacturing activity, which many Fed officials have cited as being at recessionary levels, had decreased or slowed in all districts surveyed, with some reporting weak new orders and higher inventory levels.
But energy exploration continued to grow across the board, due to high prices for natural gas and oil, the Fed reported. In particular, the Fed pointed out that the count of active drilling rigs in the Kansas City district reached an 11-year high.
There was, however, "only modest pressure" on wages, the Fed reported, adding that non-energy prices were "generally reported stable."
Meanwhile, "labor markets continue to ease in all districts, although a shortage of workers is reported for some occupations, the Fed said. "Most people are looking for work, and hiring is considered easier."
Amid a moderate overall rise in prices, "significant increases are noted in energy and health care," the central bank stated.
As for the lending activities, the Fed pointed out that "credit quality has slipped in many districts," notably New York, Cleveland, Richmond, Chicago, Dallas and San Francisco. Demand for commercial and consumer loans were mixed, with demand for both rising in New York alone.
The beige book is released every 6 to 8 weeks, shortly before Fed officials gather for their policy meetings. It serves as a guide for Fed officials as they debate their decisions on short-term interest rates. Its contents are likely to be viewed as a leading indicator of what the regional Fed bank presidents will say about economic conditions at the upcoming June 26-27 Fed policy meeting.
On May 15, the central banks cut the federal funds target rate by yet another 50 basis points to 4.00%, bringing down the key interest rate by a cumulative 250 basis points since January. End