WASHINGTON — The Federal Reserve says the economy started the new year on weaker footing and the outlook appears equally dim.

The Fed's survey of business conditions nationwide, collected between late November and Jan. 5, suggests the economic picture has darkened over the last two months.

It shows that recession-shocked Americans retrenched further, forcing retailers to ring up fewer sales and factories to cut back production.

The report concludes: "Overall economic activity continued to weaken across almost all of the Federal Reserve's districts."