Fed says growth slowing

WASHINGTON The U.S. economy is still growing but at a slowerpace, the Federal Reserve said Wednesday in a report economistsinterpreted as an indication the central bank had room to cutinterest rates further.

In a survey of economic conditions around the country, the Fedfound that the "nation's economy continues to grow slowly" with weakauto sales, generally sluggish consumer spending and some declines inmanufacturing output.

The slowdown this year was caused in part by a yearlong battlewaged by the Fed to drive interest rates higher as a way of dampeningdemand and cooling off inflationary pressures.

The Fed switched course in June, however, and began …