The economy is undergoing a slow comeback, according to a series of recent reports. - AP

Economy shows signs of health

WASHINGTON — The U.S. economy's downward slide is slowing with more regions seeing signs of stabilization since mid-June, according to the Federal Reserve's latest snapshot.

The Fed's "beige book," a compilation of impressions collected from businesses across the country that was released Wednesday, offered a brighter assessment than a previous report, which suggested that the economy continued to deteriorate in April and May.

"It anecdotally confirms what the economic indicators have been telling us," said Bernard Baumohl, chief global economist with the Economic Outlook Group. "The economy is transitioning from recession to recovery."

Business spending also appeared to be staging a slow comeback, according to a separate report released by the Commerce Department on Wednesday. Orders for durable goods — appliances, construction equipment and other items made to last at least three years — fell more than expected in June, mainly due to a drop in demand for airplanes and autos. But excluding aircraft, new orders rose by a surprising 1.1 percent, the second straight monthly increase and one that is significantly larger than the increase in May. Orders for non-defense capital goods excluding aircraft, a closely watched barometer of business investment, rose for the second consecutive month.

The durable goods report "doesn't suggest business spending is going to come roaring back," said Wells Fargo economist Tim Quinlan. "You've had corporate belt-tightening for the first five months of the year, and we're finally starting to see business build back essential stockpiles. It's probably just rebuilding core supplies rather than planning for future growth."

The beige book covered a six-week period since the release of the last survey on June 10 and was prepared in advance of the August 11 and 12 meeting of the Federal Open Market Committee, the Fed's policy-setting arm.

That panel is not expected to alter the Fed's strategy for reigniting growth, which has involved keeping a key interest rate it controls close to zero and buying hundreds of billions of dollars in government and mortgage-related debt to help lower consumer borrowing costs.

The latest beige book survey gave the central bank little reason to change course. While the report said that business travel was down, foot traffic in retail stores was slow and many businesses were reluctant to take out loans.

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