US economic outlook 'optimistic'

US retail spending remains weak

The US economic outlook has become "cautiously optimistic", according to the latest issue of the Federal Reserve's influential Beige Book.

Five of the 12 districts surveyed said there were signs of improvement, with five showing signs of stabilisation since the last report in July.

Overall, economic activity "continued to stabilise", the report said.

Many economists believe the US economy has bottomed out and is slowly starting to recover.

The mildly upbeat report had little impact on stock markets.

Weak demand

Most regions reported some improvement in residential property markets, despite "downward pressure on home prices".

They also reported "modest improvements" in the manufacturing sector.

But the report also found that retail sales in the majority of districts remained flat.

This is particularly important in the US where consumer spending accounts for about two-thirds of overall economic activity.

It also found that demand for commercial property remained weak and that demand for loans was subdued - figures released on Tuesday showed that US consumers slashed their borrowing by a record amount in July.

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.