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US economic growth 'hit by snow'

The US economy has continued to grow this year, but only at a "modest" pace,

according to the Federal Reserve's influential Beige Book.

Despite a "slight improvement" in consumer spending, growth was hampered by

"severe snowstorms" in many parts of the country, it found.

The book also reported labour markets remaining weak across the country.

But the book did highlight growth in the manufacturing sector, and an increase

in demand for services.

"Manufacturing activity strengthened in most regions, particularly in the

hi-tech equipment, automobile and metal industries," it said.

Stock falls

The report painted a more downbeat picture of the property sector and the jobs

market.

"Most districts characterised commercial real estate and construction activity

as weak or having declined further," it said.

And although some districts "reported an uptick in hiring or a slowdown in

layoffs, labour markets generally remained soft throughout the nation".

Leading US stocks lost early gains sparked by Greece's additional austerity

measures after the book was published.

The main Dow Jones index closed down 9 points, at 10,396.76.

The Beige Book, compiled eight times a year and used to help set interest

rates, is based on a survey of business views from around the US.

Last week, revised figures showed that the US economy grew at an annualised

rate of 5.9% in the last three months of 2009, faster than the preliminary

estimate of 5.7%.