ISTANBUL 

US economic uncertainty remained elevated in July, contributing to cautious sentiment among businesses, the Federal Reserve said in its Beige Book report published Wednesday.

"Economic activity increased slightly from late May through early July. Five Districts reported slight or modest gains, five had flat activity, and the remaining two Districts noted modest declines in activity," the Fed said.

Compiled from reports by the Fed’s 12 regional banks, the document said businesses continued to face “modest” to “pronounced” input cost pressures largely due to tariffs on raw materials used in manufacturing and construction.

Many companies passed on at least part of those increased costs to consumers through price hikes or surcharges. Others chose not to raise prices due to customers’ growing sensitivity, which resulted in tighter profit margins, according to the report.

"Contacts in a wide range of industries expected cost pressures to remain elevated in the coming months, increasing the likelihood that consumer prices will start to rise more rapidly by late summer," the report said.

Employment growth was limited, with only a slight overall increase. One district reported modest gains, six noted slight growth, three saw no change, and two reported mild declines.