The U.S. economy weakened in recent weeks as softer demand for workers helped inflation moderate further, "though prices remained elevated," the Federal Reserve's Beige Book report said Wednesday.

"On balance, economic activity slowed since the previous report, with four districts reporting modest growth, two indicating conditions were flat to slightly down, and six noting slight declines in activity," according to the central bank's report, based on evidence gathered from its regional district contacts. "Retail sales, including autos, remained mixed; sales of discretionary items and durable goods, like furniture and appliances, declined, on average, as consumers showed more price sensitivity."

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"Demand for labor continued to ease as most Districts reported flat to modest increases in overall employment," the report said, noting some reductions in headcounts through layoffs or attrition. "Price increases largely moderated across Districts, though prices remained elevated."