03:50 PM EDT, 10/15/2025 (MT Newswires) -- US economic activity was little changed since early September as prices increased further, while labor demand was "generally muted," the Federal Reserve said in its latest Beige Book released Wednesday.

Three Fed districts reported slight to modest growth in economic activity, while four saw a softening, according to the document, prepared by the San Francisco Fed based on data collected by Oct. 6.

A US federal government shutdown started Oct. 1 and has delayed key economic data, including the official September jobs report.

The previous Beige Book, which was released Sept. 3, showed that economic activity and employment levels were little changed since July, while firms in most districts expected price increases to continue in the coming months.

The latest Beige Book showed Wednesday that prices continued to move upward since the previous report, with several districts indicating a faster rate of input cost growth partly due to higher import expenses.

"Tariff-induced input cost increases were reported across many districts, but the extent of those higher costs passing through to final prices varied," according to the document. Most districts reported "challenging conditions" in the manufacturing sector amid higher tariffs and subdued demand, the Beige Book showed.

On Friday, US President Donald Trump threatened China with steep tariff increases after Beijing moved to expand its rare earths export controls. However, in a social media post on Sunday about China, Trump said it "will all be fine."

"Employment levels were largely stable in recent weeks, and demand for labor was generally muted across districts and sectors," the Beige Book showed Wednesday. "Wages grew across all reporting districts, generally at a modest to moderate pace, and labor cost pressures intensified in recent weeks due to outsized increases in employer-sponsored health insurance expenses."

Most districts saw more employers reducing headcounts via attrition and layoffs amid weaker demand and high economic uncertainty, the document showed. "Labor supply in the hospitality, agriculture, construction, and manufacturing sectors was reportedly strained in several districts due to recent changes to immigration policies," according to the Beige Book.

"Given the (Federal Open Market Committee's) recent preoccupation with downside job market risks, it is likely to ignore the temporary inflation threat and trim rates again later this month," BMO Capital Markets said in report published Wednesday. The FOMC is widely expected to deliver a quarter-percentage-point interest rate cut Oct. 29, following a similar move last month, according to the CME FedWatch tool.

A few Fed districts saw an improvement in sentiment, with some contacts expecting "an uptick" in demand over the coming six to 12 months, the Beige Book showed Wednesday. "However, many others continued to expect elevated uncertainty to weigh down activity. One district report highlighted the downside risk to growth from a prolonged government shutdown."