Economic activity continued to expand in all twelve U.S. counties between mid-April and the end of May, but the pace of growth was mostly slight or modest, according to a regional survey published by the Federal Reserve System (Fed), which is called the Beige Book by the color of the cover.

Only four Federal Reserve Banks reported a moderate upturn, up from a majority in early spring. At the same time, four FRBs explicitly said economic growth in their regions had slowed, the report said.

Respondents in most of the nation’s counties reported continued growth in manufacturing. However, there was some weakening in the retail sector as consumers faced higher prices. Deterioration in the residential real estate sector was attributed to both higher prices and higher interest rates.

Tensions in the labor market have been one of the biggest issues of late, followed by supply chain disruptions. Also among the top negative factors affecting household and business plans, respondents include rising interest rates, the situation in Ukraine and new COVID-19 outbreaks.

Eight FRBs reported worsening expectations for future economic growth, while three reported concerns about the possibility of recession.

Employment grew at a subdued to moderate pace in most regions. However, staff shortages continued to force many firms to operate below capacity. In response, firms continued to introduce automation, offer more flexible work arrangements, and raise wages.

In most counties, companies talked about increasing wages at a moderate to strong pace. Meanwhile, across the country, respondents expect pay increases to continue next year, the survey said.

Also, companies in nearly all districts said raw material price increases were strong. And in about half of the districts, companies were able to pass the rising costs on to customers and consumers. Still, more than half of the FRBs said there was some resistance from customers, who, for example, were buying less or seeking substitutes for expensive brands.

The Beige Book survey, which is generated from data from twelve FRBs, is traditionally published about two weeks before the Fed meets.