"Reports from the 12 Federal Reserve districts indicated that the economy continued to expand at a modest to moderate pace from mid-February through late March," the central bank said in its latest "Beige Book" summary of national activity.
Positive signs, it said, included stronger manufacturing activity, steady hiring and improved retail business in much of the country. But overlying that was a sense of concern that costlier energy and rising gasoline prices were a threat.
"While the near-term outlook for household spending was encouraging, contacts in several districts expressed concerns that rising gas prices could limit discretionary spending in the months to come," it added.
The report, based on data collected before April 2, comes from business contacts in each of the 12 districts that have regional Fed banks and is thus seen as a real-life complement to the more academic speeches and analyses that flow from the central bank.
Its description of growth at a "modest to moderate pace" was unchanged from the prior summary issued at the end of February. But coming after last week's government report showing only 120,000 jobs created in March, the fewest since October, it sounded a bit more upbeat about the job market.
"Hiring was steady or showed a modest increase across many districts," it said. "Difficulty finding qualified workers, especially for high skilled positions, was frequently reported."
Fed policymakers will use the information to assess the economy when they meet April 23-24 to consider whether to change interest-rate policy.
Atlanta Fed Bank President Dennis Lockhart, a voting member of the policy-setting Federal Open Market Committee, said on Wednesday he would be "somewhat reticent to consider another round of quantitative easing" at this time.
The Beige Book's caution about rising energy prices seemed to be borne out in separate Labor Department data showing imported petroleum costs were still on the rise.
March import prices climbed by the most in nearly a year on sharply higher petroleum costs, the Labor Department said.
Imported petroleum prices alone increased 4.3 percent, the biggest gain since April 2011.
That helped drive overall import prices up 1.3 percent for the biggest monthly gain since April 2011, the Labor Department added.
Economists polled by Reuters had expected import prices to rise 0.8 percent last month. February's data was revised to show a 0.1 percent decline instead of the previously reported 0.4 percent increase.
The data underscores the size of the price shock that is stinging Americans when they refuel their cars.
There are ample signs that higher gasoline prices are a weight on the U.S. economy, still burdened by high unemployment and a soft housing sector following the 2007-2009 recession.
Applications for U.S. home mortgages fell last week despite a drop in the average interest rate for 30-year mortgages, the Mortgage Bankers Association said in a separate report on Wednesday.
As for export prices, the Labor Department report showed they rose 0.8 percent last month, above analysts' expectations for a 0.4 percent gain. Export prices increased 0.4 percent in February.
Markets showed little direct reaction to any of the day's data. Stock prices were higher near the trading session's close but that followed five days of losses. Treasury debt prices were lower.
U.S. data scheduled for release on Thursday is expected to show tame price pressures at a wholesale level, with producer prices seen rising 0.2 percent in March when stripping out food and energy.
(Additional reporting by Jason Lange and Leah Schnurr in New York Editing by W Simon and David Gregorio)
Reuters