The economy kept growing overall in recent weeks, but unevenly and it actually slowed in a few regions as housing markets softened after the end of a popular tax break, the Federal Reserve said on Wednesday.

The U.S. central bank's latest Beige Book summary of national conditions, based on information before July 19, said activity continued to increase, on balance though Cleveland and Kansas City said business held steady.

Among those districts reporting improvements in economic activity, a number of them noted that the increases were modest, and two districts, Atlanta and Chicago, said the pace of economic activity had slowed recently, the Fed said.

The Beige Book reports on conditions in all 12 districts that are part of the Federal Reserve system and carries a high degree of credibility because it is based on interviews and anecdotal information from coast to coast.

The latest report, compiled by the St. Louis Fed Bank, covers seven weeks from the previous Beige Book in early June and painted a picture of less-than-robust recovery.

While manufacturing continued to expand in most districts, activity had slowed or leveled off in New York, Cleveland, Kansas City, Chicago, Atlanta and Richmond.

That fit with a report issued earlier on Wednesday by the government showing that new orders for costly manufactured goods unexpectedly dropped in June -- a second straight monthly fall that pointed to waning momentum in the factory sector.

Retail sales -- a gauge of consumers' economic participation -- were generally higher but modestly so.

Several districts cited apparel, food and other necessities as recent strong sellers, while big-ticket items were weak sellers, the Fed said.

Most districts said new-car sales were declining and housing markets were sagging.

Activity in residential real estate markets was sluggish in most districts after the expiration of the April 30 deadline for the homebuyer tax credit, the Fed said, referring to a now-expired $8,000 credit offered as an encouragement for first-time home buyers.

There was a modest improvement in labor markets, with several reports of temporary hiring. Consumer prices held steady in most parts of the country while wage pressures were described as contained.

(Reporting by Glenn Somerville; editing by Andrew Hay and Jan Paschal)

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