It says economic activity has weakened across the US in the past two months, with retail sales, and vehicle sales in particular, “down significantly”.

It also reports weak service and manufacturing sector activity, and falling prices in weak housing markets.

The anecdotal report follows a series of bad US economic figures.

The book, based on information collected before 24 November, also says that consumer spending has weakened, while lending has contracted.

The labour market and tourism, it says, also slowed.

Earlier on Wednesday figures from the Institute of Supply Management showed that service sector activity in the US dropped to a record low in November.

“The data today tells you the recession is as severe as most people fear it is at this point,” said Marc Pado at Cantor Fitzgerald.

Last week, the National Bureau of Economic Research confirmed that the US entered recession in December 2007.

The Beige Book is compiled eight times a year and is based on reports and comments from businesses across the US.

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