Economic activity was up slightly since October, and employment grew modestly despite weakening demand, according to the Beige Book report released Wednesday by the Board of Governors of the Federal Reserve System.

Five districts reported slight or modest gains in overall economic activity; the rest experienced either no change or slight-to-modest declines. According to the report, interest rates and inflation continued to weigh on activity, and many contacts expressed greater uncertainty or increased pessimism concerning the outlook.

Employment grew modestly in most districts, but labor demand weakened overall.

“Hiring and retention difficulties eased further, although labor markets were still described as tight. Scattered layoffs were reported in the technology, finance and real estate sectors,” the report noted. “However, some contacts expressed a reluctance to shed workers in light of hiring difficulties, even though their labor needs were diminishing.”

Wages increased at a moderate pace on average. However, a few districts experienced at least some relaxation of wage pressures.

Overall, opinions about the outlook pointed to stable or slowing employment growth and at least modest further wage growth moving forward.

In the Boston district, employment was stable on balance, and wage growth stabilized at a moderate pace, but labor demand weakened for some positions.

“Although headcounts were steady, one retailer recently enacted significant layoffs in response to weaker-than-expected results so far in 2022, and some manufacturers demanded fewer hours,” the Boston district noted in the report.

In the New York district, economic activity continued to decline slightly. At the same time, employment rose moderately as hiring picked up, with scattered signs of further easing in labor shortages, according to the report. A New York employment agency noted that hiring activity has remained fairly steady, led by strong demand for finance and tech workers, but indicated that the labor market has cooled.

Economic activity in Philadelphia appeared to be on the edge of a decline, while employment continued to grow slightly.

“Fewer firms reported increases, while more began noting decreases. The share of firms reporting employment increases fell below 20% for nonmanufacturing and manufacturing firms, and firms reporting decreases rose to nearly 10%,” the Philadelphia district reported.

Reports from the Cleveland district indicated that economic activity slowed slightly in recent weeks while employment growth continued at a slight pace. However, demand for labor remained solid, though there were more frequent reports of employers opting to take down open job postings or declining to fill recently vacated positions.

The Richmond, Virginia district reported economic activity expanded slightly, while employment increased moderately in recent weeks. According to the district, many firms indicated that they still had positions to fill.