The Federal Reserve Board said Wednesday that the economic recovery is continued to move ahead in the first two months of 2004.

“Economic activity continued to expand in January and February,” the Fed said in its latest survey of business conditions around the U.S. However, on the jobs front, “employment has been growing slowly in most Federal Reserve districts,” the report said.

The report, dubbed the Beige Book for the color of its cover, will be used as a basis for discussion when central bank policy-makers meet on March 16.

Factory activity rose in 11 of the 12 regional Fed districts.

Consumer spending rose in most districts, with gains in general merchandise sales leading the way. However, motor vehicle sales slowed in most districts. Tourism and service sector activity has been expanding. Manufacturing output continued to rise. Housing demand continues to be strong, but commercial real estate is weak.

Agricultural conditions were mixed, it said, noting that demand for beef appears to be recovering from the effects of mad cow disease. But, exports of poultry products have been curtailed by the outbreak of avian influenza.

Oil and gas production remain at high levels and iron ore processing has increased. Bank lending has been growing moderately.

Employment has been growing slowly. Wages and salaries have increased slightly, but employers report substantial increases for employee health-care costs. Medical insurance and workers’ compensation insurance fees remain on the rise it reported, although the rate of increase does not appear to be accelerating.