03:29 PM EDT, 07/16/2025 (MT Newswires) -- US economic activity rebounded between late May and early this month, though concerns about rising cost pressures grew, the Federal Reserve said in its Beige Book released Wednesday.

The economy expanded "slightly," according to the document, prepared by the Boston Fed based on data collected by July 7. The previous report, which was released June 4, showed that economic activity slipped as higher tariffs put upward pressure on prices.

"Uncertainty remained elevated, contributing to ongoing caution by businesses," the latest Beige Book showed.

Prices grew across Fed districts, with businesses reporting "modest to pronounced" cost pressures tied to tariffs, especially for raw materials used in manufacturing and construction, according to the document.

"Rising insurance costs represented another widespread source of pricing pressure," the Fed said in the Beige Book. "Contacts in a wide range of industries expected cost pressures to remain elevated in the coming months, increasing the likelihood that consumer prices will start to rise more rapidly by late summer."

Official data showed earlier Wednesday that US producer prices remained unchanged last month, a day after another government report showed an uptick in consumer inflation for June. On Tuesday, President Donald Trump repeated his call on the Fed to lower its benchmark lending rate following the release of the consumer inflation data. On Wednesday, Trump denied a report that he was planning to fire Fed Chair Jerome Powell soon, CNBC reported.

Employment grew marginally, while wages rose "modestly," the Beige Book showed. "Hiring remained generally cautious, which many contacts attributed to ongoing economic and policy uncertainty," according to the report. "Looking ahead, many contacts expected to postpone major hiring and layoff decisions until uncertainty diminished."

On Tuesday, Trump said that Indonesia has agreed to pay tariffs of 19% on goods it exports to the US, which will face no duties. Earlier in the week, Trump reportedly said the US will impose "very severe tariffs" on Russia in the absence of a deal in 50 days. In social media posts Saturday, Trump revealed plans to impose 30% tariffs on the European Union and Mexico, effective Aug. 1.

Non-auto consumer spending dropped in most districts, while auto sales "receded modestly" after consumers rushed to purchase vehicles earlier in 2025 in a bid to avoid tariffs, the Beige Book showed Wednesday.

"The outlook was neutral to slightly pessimistic, as only two districts expected activity to increase, and others foresaw flat or slightly weaker activity," according to the document.