The US economy has continued to grow modestly but the manufacturing sector is seeing some signs of a slowdown and farms face harder times, the Federal Reserve reported Wednesday.
In its regular survey of business conditions across the country between April and mid-May, the Fed found many industries continued to show steady improvement, with activity rising, generally strong demand for labor and few signs of inflation or wage growth.
But amid the turmoil created by President Donald Trump's escalating trade conflicts, the generally upbeat report included a string of subtle warnings and less upbeat assessments.
The Fed cited signs of "slowing" manufacturing, "tempered" consumer spending, "weak" agriculture, "lower" auto sales, "wide variation" among regions in reports on construction and real estate and "mixed" demand for loans.
The latest "beige book" report comes as anticipation grows on financial markets that the central bank may cut interest rates to preserve the economic expansion, a possibility Federal Reserve Chairman Jerome Powell hinted at this week.
The Fed's rate-setting Federal Open Market Committee holds its next policy meeting June 18-19.
The modest pace of growth in recent weeks was a "slight improvement over the previous period," the report said. "The outlook for the coming months was solidly positive but modest."
GDP growth at the start of the year was stronger than expected but was supported by inventory building and falling exports, which economists say will not support the momentum, and the economy is expected to slow in the second quarter.
Manufacturing activity declined in the Boston, Philadelphia, Cleveland and Richmond regions.
In the St. Louis region, agriculture declined, along with retail and banking, while a wet spring in the Minneapolis region "threatened the planting season for already-struggling agricultural producers."
Likewise, in the Chicago region, farmers continued to be "challenged by poor weather and low crop prices" while farm income "weakened" in the Kansas City Fed's district.
In addition poor weather and a global supply glut, US exports of key crops have been battered since last year by Beijing's boycott of soybeans and other exports in retaliation for the tariffs Trump imposed on Chinese goods.
Sales of soybeans to China fell 75 percent last year, gutting income for many farmers although Trump has renewed pledges of aid.
Elsewhere, in the Dallas region, which is heavily dependent on trade with Mexico, early May saw "scattered signs of a deceleration in growth."
"Outlooks were generally less positive than during the prior reporting period, with tariff and trade negotiations driving up uncertainty," the report said.
However, the survey of the 12 Fed districts was conducted before Trump last week announced plans to impose progressively rising import duties on Mexican goods as part of a dispute over immigration.