From the WSJ:

Consumer-Spending Slowdown Weighs on Economy
Fed’s ‘Beige Book’ Cites Job Losses; Prices to Stabilize
By KELLY EVANS
September 4, 2008; Page A4

Consumer spending across the country is weakening, a roundup of reports from the Federal Reserve shows, while price pressures continue to plague a wide swath of industries.

The Fed’s “beige book,” a survey of economic conditions from the 12 regional Fed banks released every six weeks, shows that economic activity has weakened across most of the country since late July.

Eric Rosengren, president of the Federal Reserve Bank of Boston, expressed his concern about the economic outlook in a speech Wednesday. “Over the course of this summer it became clear that the economic headwinds have not subsided as hoped,” he said.

Businesses, according to the beige book, reported a notable slowdown in consumer spending, the largest driver of U.S. economic growth. That suggests the third quarter is off to a rough start. On a quarterly basis, consumer spending hasn’t declined since the 1990-91 recession; forecasters caution it could now do so because of a shaky labor market and ongoing weakness in the housing and credit markets.
…
The report also found that labor-market conditions were weak in most regions of the country and that wage increases were moderate at best, adding to the strain on consumers. The unemployment rate this year has risen to 5.7% from 4.9% as nearly half a million jobs have been lost, according to the Labor Department. The latest employment report will be released on Friday and is expected to show further job losses and perhaps another rise in the unemployment rate.
…
Commercial real-estate activity, which includes office and retail space, has for the past year helped offset the crumbling housing market, but it is increasingly showing signs of strain. The beige book shows that commercial real-estate activity has “moved down or remained weak in all Districts except Dallas” since late July. Many regions noted softening demand, a decline in leasing activity, rising vacancies and slowing construction activity.

From the Federal Reserve:

Beige Book, Second District — New York

The Second District’s economy has shown signs of stabilizing since the last report, though not in all sectors. Manufacturers report that business activity has steadied in recent weeks, after weakening for a number of months, and factories continue to report fairly widespread increases in both input costs and selling prices. Contacts at non-manufacturing firms generally also report some stabilization in business conditions but continue to indicate modest declines in employment. Consumer confidence was reported to be at record lows in July. Still, retail sales remained on or close to plan in July and early August, and were up slightly from a year earlier; moreover, tourism activity in New York City has firmed. Housing markets have been mixed but generally softer, and office markets have slackened. Finally, bankers report weakening demand for both residential and commercial mortgages, widespread declines in refinancing activity, continued tightening in credit standards, and increasing delinquency rates on home mortgages.
…
Housing markets in the District have been steady to weaker. Manhattan’s rental market has slackened somewhat: average asking rents were reported to be running 2 to 4 percent lower in July and August than a year earlier, and the rental vacancy rate, though still below 2 percent, is reported to have climbed noticeably over the past year. A major appraisal firm reports some further softening in Manhattan’s co-op and condo market: sales activity has been increasingly sluggish, with resale prices flat to weaker. A growing number of deals are said to be falling through, due to difficulty in getting financing–largely at the middle of the market. The sales market has weakened more noticeably in Brooklyn and Queens, as well as in eastern Long Island.

On a more positive note, a contact monitoring New Jersey’s housing industry reports that the resale market has shown signs of stabilizing, though at a weak level, especially for single-family homes. Inventories of unsold existing homes have declined in northern New Jersey, as many discretionary sellers have taken their homes off the market and other sellers have become more negotiable. Both prices and sales volume have leveled off, though they remain lower than a year ago. Concerns over foreclosures are noted, though their absolute number is described as relatively low.