The U.S. economy remained “weak or deteriorated further” from mid-April to May, according to an anecdotal Federal Reserve survey of its twelve regional banks, though some regions of the country did see the rate of deterioration moderating.

The survey released on Wednesday, commonly known as the Beige Book, also said that while economic expectations had improved, most districts don’t expect economic activity to improve notably until after 2009.

The report shows that the Fed, despite a rising stock market and rising business expectations, does not believe the economy has shown any signs of improvement for the past six weeks. The Beige Book is one of the reports used by the Federal Open Market Committee when the central bank makes interest-rate decisions. 

Five of the Fed's 12 districts said that economic conditions in their regions were still deteriorating, but the rate of deterioration had moderated. The commentary is similar to the last survey put out by the Fed six weeks ago.

In the manufacturing sector, the Federal Reserve said activity during the period declined or remained very weak levels in most of the central bank’s districts. The surveys done by the Atlanta and Kansas City banks indicated that the rate of decline moderated or slowed, while New York and Dallas described the sector as stabilizing or having stabilized. 

The Fed said that tight credit conditions were “hampering” the auto sector and vehicle sales, which remained at depressed levels during the period.

The service sector remained weak, according to the Fed. Select districts reported some moderate increases in activity for certain specific sectors, but “for the most part activity continued to decline.”

As noted in other separate reports, the Fed said that a number of Districts reported home sales increasing and that new home construction appeared to have stabilized at very low levels.

Across the country, the Federal Reserve said they did not experience any signs of inflation, saying that all its districts reported that “prices at all stages of production were generally flat or falling.” The only exception was the highly reported story of rising oil prices.