Fed says economic gains tempered by trade worries

Fed says country saw slight improvement in economic activity in spring but gains tempered by rising trade tensions

WASHINGTON -- The Federal Reserve says most areas of the country saw a slight improvement in economic activity in the spring, but those gains were tempered by concerns over rising trade tensions.

In its latest report on economic conditions nationwide, the Fed says businesses reported solid hiring in businesses ranging from retail to manufacturing and construction. However, in many areas employment growth was being constrained by tight labor markets, forcing some companies to boost wages to attract workers.

The Fed report, known as the beige book, will be used for discussion when the central bank meets to set interest rate policy on June 18-19. Fed Chairman Jerome Powell said Tuesday that the Fed was prepared to "act as appropriate" to protect the economy from any fallout from a widening trade war.