Fed Warns of High Prices, Slow Growth : Economy: The cautionary assessment echoes the concerns of many economists.

The Federal Reserve warned today that the pace of economic growth is weakening and that consumer prices are rising dramatically in many parts of the country.

Although the data in the Fed’s regular “beige book” assessment of the economy was collected before the start of hostilities in the Mideast and the subsequent jump in energy prices, it echoes the concerns of many economists.

“Business and banking contacts . . . generally report continued economic growth, though most noted that the pace was slow or had slackened recently,” the Fed’s report said.

“Wages were reported as rising in a range of 3% to 5%, in most cases excluding benefits,” the Fed said. “Reports on prices did not display as much consensus, with some reporting widespread increases and others noting difficulty in passing on cost increases.”

But gas and oil companies and farmers appeared to be optimistic, “reflecting better weather conditions in major crop and livestock producing areas and an improved energy sector,” the report said.

Retail sales showed marginal improvement over last year, the report indicated, but demand has fallen off for “big ticket” goods, such as expensive household appliances.

In some regions of the country, “retailers indicated they had become less optimistic about the outlook for the rest of the year, though in others they were anticipating a slight pickup in sales,” the Fed said.

Manufacturing was flat, real estate and construction remained weak and borrowed money was difficult to obtain in many places, further evidence of a “credit crunch” on businesses by banks and other lenders.