Still, the Beige Book said data from the 12 regional Federal Reserve banks indicated that economic activity generally continued to expand since the last report in mid-April.
Even in Philadelphia, it said, overall business activity improved since then, though "the pace has softened."
Most of the Beige Book's details for Philadelphia, sector-by-sector, reflected that weakness.
"We are off the bottom, but it's going to be a slow comeback," said a Philadelphia-area real estate agent. Sales for low- and mid-priced homes are stronger than for high-priced houses. Overall, local housing sales for 2011 are expected to be about the same as last year, the survey found.
Perhaps the biggest disappointment was reported by local manufacturers, who early this year enjoyed robust growth in demand for their goods. But in the new report, the Fed said that demand "gave way to two months of easing in the breadth and pace of recovery" from the 2007-2009 recession.
In the April-May period, area makers of electronic equipment and instruments, apparel and rubber goods, among others, reported declines in orders.
Philadelphia-area retailers said sales in the latest Beige Book period were up slightly from the same time last year. While some cited rainy, cool weather for the sluggish sales growth, one local merchant told the Fed, "Only confidence in the job situation will prompt broader buying."
The nation's jobless rate remains stubbornly high - at 9.1 percent in May, with 13.9 million Americans out of work. That's nearly double the number at the start of the recession.
Nationally, the report confirmed an abundance of recent data that portray an economy whose growth has faltered. Hiring has slowed, orders to factories have declined and home prices have fallen.
But in contrast to Philadelphia, Atlanta, Chicago and New York, Fed regions in Boston, Cleveland, Richmond, St. Louis, Minneapolis, Kansas City, and San Francisco said growth there remained steady.
The Dallas region was the only one to report accelerating growth. That was mostly because of higher oil prices that benefited that region's energy industry.
The Beige Book, named for the color of its cover, is based on anecdotal information gathered by officials at the 12 Fed regional banks. It is released eight times a year and provides a more in-the-trenches review of the U.S. economy than the flow of monthly and quarterly government statistics do.
Japan's March 11 earthquake and tsunami have disrupted both auto production and sales. Many factories in the U.S. owned by Japanese automakers, including Toyota and Honda, rely on Japanese suppliers for electronic components and other parts. They have had to cut production because of shortages of those supplies.
Contact staff writer Paul Schweizer at 215-854-2487 or pschweizer@phillynews.com.
This article contains information from the Associated Press.
