Investing.com -- Economic activity slowed across more districts pressured by softer consumer spending and manufacturing activity, according to the Federal Reserve's Beige Book released Wednesday.
"Economic activity grew slightly in three Districts, while the number of Districts that reported flat or declining activity rose from five in the prior period to nine in the current period," the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed's 12 reserve banks through Aug. 28.
Consumer spending and manufacturing activity declined in most districts weighing on economic growth.
In the labor market, while employment levels were steady, there were "isolated reports that firms filled only necessary positions, reduced hours and shifts, or lowered overall employment levels through attrition," signaling further slowing in the labor market.
"Employers were more selective with their hires and less likely to expand their workforces, citing concerns about demand and an uncertain economic outlook," the report added.
The labor market is under the spotlight ahead of the August job's report due Friday, which may offer clues on whether July's weaker nonfarms payroll report was an aberration or the start of significant slowdown.
The pace of inflation, meanwhile, was modest, with prices increasing modestly in the most recent reporting period. "On balance, prices increased modestly in the most recent reporting period. However, three Districts reported only slight increases in selling prices," the Beige Book showed.
Looking ahead, contacts generally expected price and cost pressures to stabilize or ease further in the coming months, though expectations for future growth faced uncertainty from the upcoming election, geopolitical conflict, and inflation.