The US is struggling from a combination of sluggish growth and rising prices, the Federal Reserve has stated.

A new report by the Fed showed that the pace of economic activity has slowed as consumers curtail their spending because of the upward pressure on the cost of gasoline and food.

Higher commodity and energy prices are being passed onto consumers by businesses looking to squeeze out a profit.

"All reporting districts characterized overall price pressures as elevated or increasing," the Fed said in its Beige Book report.

Moreover, the real estate market is struggling with weak sales and declining house prices across large swathes of the country.

But Fed chairman Ben Bernanke said he does not believe the US economy will suffer from what analysts sometimes call stagflation.

Many economists expect the Fed to leave interest rates alone when the rate-setting committee meets on August 5th.

Consumers struggling with rising prices or tax debt may need to consider a debt management plan in the near future.

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