The US economy is showing "widespread" signs of deceleration, the US Federal Reserve warned in its latest Beige Book report which was published Wednesday. Another report on Wednesday put the federal government budget deficit at about $1.3trn in the first 11 months of fiscal year 2010, which ends at the end of September.

In the summary of anecdotal reports on economic activity in the 12 districts of the regional Federal Reserve Banks, the central bank reported "continued growth in national economic activity" between mid-July and the end of August, "but with widespread signs of a deceleration."

However, the so-called Beige Book also says that factories, farms and mines were all seeing "continued gains in demand and sales," while housing sales - - and the related construction industry - - slowed after the expiration of a federal tax credit that encouraged housing sales.

Five Fed districts, including New York and Atlanta, have experienced "mixed conditions or a deceleration in overall economic activity," according to the report. The other regions all reported growth at a modest pace or improving conditions.

The Boston district said: "Recent business developments are positive on average across the First District but performance continues to vary between and within sectors."  The adjacent New York district reported: "On balance, the Second District's economy showed signs of decelerating since the last report."

Also Wednesday, there was further evidence of American consumers continuing to reduce their indebtedness, but at a slower pace than forecast. Consumer credit dropped by $3.6bn in July, the Fed said, compared with the $4.7bn fall analysts had forecast.

The drop was steepest in revolving debt, indicating consumers were paying down their credit card bills. The decline in debt is helping Americans adjust their finances to a more sustainable position, but using money to reduce debts is also impacting the consumer spending engine of the economy.

The Labor Department also on Wednesday published detailed information on the job market in July, which showed that the number of open positions rose by 178,000 that month, reflecting a slight improvement in conditions for people looking for work.

But the Job Openings and Labor Turnover survey also revised down its estimate of the number of job openings in June.

Job openings in July, at 3.042m, were up from 2.864m in June. But that compared with pre-recession levels in excess of nearly 5m. The economy isn't creating enough jobs to absorb 14.9m unemployed workers.

The CNBC news team parses the Fed's Beige Book report:

The non-partisan Congressional Budget Office (CBO) said the pace of growth after the recent recession is likely to be slower than usual as the economy recovers from the effects of the financial crisis and as the support to economic activity provided by fiscal policy diminishes. The CBO said in the past, many recoveries from deep recessions have been quite robust. After deferring purchases during a slump (especially for expensive goods like homes, automobiles, and capital equipment), households and businesses typically boost their spending quickly as economic prospects improve.

However, international experience suggests that recoveries from recessions that were spurred by financial crises tend to be slower than average - - perhaps because the losses in wealth and damage to the financial system that occur during such crises weigh on spending for a number of years. Following such a crisis, it takes time for consumers to rebuild their wealth, for financial institutions to restore their capital bases, and for nonfinancial firms to regain the confidence required to invest in new plant and equipment; all of those forces tend to restrain spending. In addition, under current law, both the waning of fiscal stimulus and the scheduled increases in taxes will temporarily subtract from growth, especially in 2011.

In CBO's projections, real GDP increases by 2.8% between the fourth quarter of calendar year 2009 and the fourth quarter of 2010 and by 2.0 percent in 2011. Such rates of growth are well below historical norms for a recovery from a severe recession; for example, following the deep recession of 1981 and 1982, real GDP surged by nearly 8% in 1983 and by roughly 6% in 1984. In CBO's forecast, the growth of real GDP picks up after 2011, averaging 4.1% annually from 2012 through 2014 and closing the gap between GDP and its potential level (the amount of production that corresponds to a high use of labour and capital) by the end of 2014.

The federal government spent about $1.3trn more than it collected during the first 11 months of fiscal year 2010, a report said Wednesday.

The CBO estimated the deficit is about $100bn less than the shortfall for the same period in fiscal 2009.

"Outlays are about 2% less than they were in the first 11 months of 2009, whereas revenues have increased by 1 1/2%," said the CBO said.

The CBO estimates the deficit for 2010 will be about $70 billion below last year's total but will still exceed $1.3trn.

"Relative to the size of the economy, this year's deficit is expected to be the second-largest shortfall in the past 65 years: At 9.1% of gross domestic product, that deficit will be exceeded only by last year's deficit of 9.9% of GDP," the CBO said.

On Wednesday, near Cleveland, Ohio, President Obama proposed business tax breaks but rejected pressure to renew expiring Bush era tax cuts for earners above $250,000. The top rate of income tax would be restored to 39% for them.

Treasury Secretary Timothy Geithner breaks down President Obama's new economic proposals, which include a tax break for businesses.: