But overall, the US central bank’s “Beige Book” survey of conditions showed that economic activity changed little in recent weeks, even as “consumer spending, particularly on retail goods, inched down.”

The Fed made its first interest rate cut this year in September as the key employment market weakened, but officials are proceeding cautiously as they balance risks to inflation as well.

Since returning to the White House this year, US leader Donald Trump has slapped wide-ranging tariffs on trading partners, fuelling worries among economists that these could cause consumer prices to rise.

On Wednesday, the Fed said that business costs in some districts rose at a quicker pace recently due to higher import prices and steeper costs of services like insurance and health care.

“Tariff-induced input cost increases were reported across many districts, but the extent of those higher costs passing through to final prices varied,” the Fed added.

For now, many expect that elevated uncertainty will bog down economic activity, the Fed said.

“In most districts, more employers reported lowering head counts through layoffs and attrition,” it added.

The report said the Fed’s contacts cited “weaker demand, elevated economic uncertainty, and, in some cases, increased investment in artificial intelligence technologies.”

The labour supply in sectors like agriculture, construction and manufacturing were also “reportedly strained” in some districts due to changes in immigration policies, the Fed said.