The U.S. economy continued to expand from mid-April to early June, but there were signs of slowing growth and inflation, the Federal Reserve said today.

The Fed issued its so-called “Beige Book”, a summary of economic conditions across the United States. The report is based on information collected before June 5.

“Reports from all 12 Federal Reserve Districts indicate that economic activity continued to expand from mid-April to early June, but there were some signs of deceleration,” it says. Economic activity moderated in four districts – Atlanta, Kansas City, Richmond, and San Francisco. The New York district noted increased concern about the outlook for the second half. Seven districts – Boston, Chicago, Cleveland, Dallas, Minneapolis, New York, and St. Louis – reported growth was similar to the pace reported in the last Beige Book. The Philadelphia district was the only one reporting an improvement in overall economic conditions.

Consumer spending continued to increase, but reports suggest that the growth rate slowed, it noted. “Manufacturing activity still expanded quite strongly, but reports indicate more areas of weakness than in March and early April,” it said. “Residential real estate markets continued to cool across the country, with slower homebuilding and sales of existing homes.”

Commercial real estate activity strengthened however, and the Fed noted a few reports expressed concern about too much building in some portions of the real estate market.

Activity in service-producing industries was strong or increased in all districts that reported on that sector. “The financial sector continues to report good credit quality. Commercial lending picked up, but there was some slowing in loans to consumers, particularly for mortgages and home equity loans,” it found. Also, “Growth in the energy industry continued to be robust, with expansion constrained by shortages of equipment and labor. Agricultural conditions varied across the country.”

Labor markets continued to tighten, the Fed said, with more districts reporting employers having difficulty finding skilled workers. “Wage pressures remained moderate overall, with the exception being workers with hotly demanded skills,” it noted.

There are also signs of sustained inflationary pressures. “High energy costs were fueling price increases in manufacturing and, to a much lesser extent, retail. Reports of costs being passed forward varied considerably but were more prevalent than in the last Beige Book,” it concluded.