WASHINGTON -- The U.S. economy coped with "slow and uneven growth" in late summer as manufacturers struggled with weak orders and retailers reported disappointing results from back-to-school sales, the Federal Reserve said Wednesday in a report that kept the door open to further interest rate cuts.

Many analysts were struck by the gloomy tone of the central bank's latest survey, based on interviews by the Fed's 12 regional banks in August. The survey will be used by policy-makers when they meet Sept. 24 to decide whether to change interest rates.

"It was a weaker report than I had expected them to put out," said David Wyss, chief economist at Standard & Poor's in New York. "We had a summer slowdown but more recently we have had signs of economic strength with the stock market coming back."

The report found that business activity had slowed in most parts of the country with "little or no gain in employment."

While the bank could use the survey to justify further cuts, many economists said they expected the Fed will continue to hold rates steady, at a 40-year low, as they have done all year.