Economy grows at moderate pace

NEW YORK (CNNMoney) -- Economic growth continued to expand moderately over the past few weeks, the Federal Reserve said Wednesday.

In its latest snapshot of regional economic conditions, the Fed reported that manufacturing, retail and non-financial services sectors were strong in most regions.

But some sectors did not fare as well. The Fed said residential real estate market remained weak nationwide, as did commercial real estate construction.

The Fed did offer measured optimism on employment, another sector that has not matched the improvement of the economy at large. The Fed reported that the labor market "appeared to be firming somewhat" in most areas, but noted that wages remained stagnant.

Known as the Beige Book, the report summarizes economic conditions in the central bank's 12 districts across the nation, and is released eight times a year. The report will help set the tone for the Fed policy meeting set to take place Jan. 25-26.

Across the board, retailers told the Fed that sales appeared higher in this holiday season than last year, and in some cases, exceeded expectations. That suggests consumers are opening their wallets, a trend reinforced by an increase in tourism in most parts of the nation.

Inflation remained in check, the Fed said. While some producer costs moved higher, the price increases were not passed on to consumers due to competitive pressures.

The Cleveland, Atlanta, Chicago, St. Louis, Kansas City and Dallas districts all said "activity increased modestly to moderately," the report said. Meanwhile, the economy of the Minneapolis district "continued its moderate recovery," while San Francisco "firmed further."