From the WSJ:
The overall economy continued to expand at a moderate pace in the past six weeks, say reports compiled by the 12 regional Fed banks. The Fed typically releases the anecdotal reports, known as its "beige book," two weeks before its policy makers meet to consider interest rates.
In an apparent reaction to the housing slump and rising energy prices, consumer spending rose at only a moderate pace in June and July. Many regions indicated retail sales were below expectations. Five of the 12 said sales of housing-related items, such as furniture or home-repair supplies, were weak or declining.
Here are some key points from the report:
On balance, consumer spending rose at a modest pace, although a number of Districts indicated that sales were mixed or below expectations Cleveland, Chicago, St. Louis, and Minneapolis all shared the general assessment that consumer spending rose modestly, while Philadelphia said retail sales growth was quite strong in May but "closer to trend" in June. New York, Atlanta, Kansas City, and Dallas reported sales as flat and/or below expectations. The remaining regions described sales as mixed
This is not the most glowing statement of consumer spending. It seems the housing slowdown and rising gas and food prices are starting to take a toll on discretionary purchases.
Most Districts said that residential construction and real estate activity continued to decline on balance. Many Districts, however, noted increased activity in some individual market locales or segments.
Commercial construction and real estate markets were generally more active than during the previous reporting period.
Over the last year, we've seen commercial/nonresidential construction spending increase. Now this makes up the largest portion of total construction spending. In his Congressional testimony, Bernanke stated residential construction workers had shifted to commercial projects, which explains why construction employment hasn't decreased.
Most District reports indicated that manufacturing activity continued to expand during June and early July.
In most Districts, the increases in demand for factory goods were spread across a number of industries.
This jibes with what the industrial production and various Federal Reserve District manufacturing reports have been saying.
Contacts generally reported ongoing input cost pressures, particularly for petroleum-related inputs, while prices at the retail level continued to increase at a moderate rate. Notable exceptions were the Richmond District, which reported faster rates of price increases as local businesses passed along higher input costs, and the Kansas City region, which experienced an easing in overall price pressures. Almost every region said that oil and gasoline prices were either rising, high, or "an issue."
For an organization that focuses on core inflation, the Fed seems to talk an awful lot about energy inflation.
Short version: consumer spending could be an issue in the upcoming GDP report.