Five Fed districts reported better employment conditions, up from one in the prior Beige Book, as the US economy kept expanding at a modest pace.
Manufacturing, construction and energy led hiring gains, but employers in those sectors stayed cautious on staffing and investment because broader uncertainty persisted.
Inflation moderated during the reporting period, yet businesses warned that energy, transportation, construction materials and industrial commodity costs could rise again amid Middle East conflict, fuel volatility and tariffs.
Consumer spending held steady but remained uneven, with price-sensitive households cutting discretionary purchases and trading down, while residential real estate stayed subdued despite firmer commercial lending and business investment.
The Fed described overall sentiment as cautiously optimistic and the economy as resilient, though concerns about input costs and global market forces continued to cap enthusiasm.