The U.S. economy remained sluggish in June and July, as the recent slide in the manufacturing sector began to creep into other areas of the economy, the Federal Reserve said on Wednesday.

``Reports from most Federal Reserve Districts point to slow growth or lateral movement in economic activity in June and July,'' the Fed said in its anecdotal survey of national economic conditions, also known as the ``beige book.''

Weakness in the factory sector was seen in almost all regions, the central bank said. ``Sustained weakness in the manufacturing sector spilled over to other businesses, with many Districts indicating declines in demand for office space and trucking and shipping services,'' the Fed said.

The report, compiled by the Federal Reserve Bank of San Francisco based on information gathered before July 30, will be used by the policy-setting Federal Open Market Committee when it next meets to set interest rates on Aug. 21.

The FOMC is widely expected to cut interest rates for a seventh time this year as it attempts to prop up a shaky U.S. economy. The Fed has already cut rates by a total of 2.75 percentage points this year.