THE US economy continued to expand modestly on the back of consumer spending but the labour market remained bleak, the Federal Reserve said in its Beige Book report Wednesday.

The report, to be used by members of the central bank’s policy making body on March 16, said data from the 12 Federal Reserve districts indicated that “economic conditions continued to expand” although severe snowstorms in early February “held back activity” in several areas.

Consumer spending, a critical component of the US economy, “improved slightly” in many districts since the last survey, the Fed report said.

Among sectors that saw improvement were services and manufacturing.

It pointed out that the jobless situation remained bleak.

“Although some districts reported an uptick in hiring or a slowdown in layoffs, labor markets generally remained soft throughout the nation, which resulted in minimal wage pressures,” the report said.

The US economy expanded in the final two quarters of last year after a year of contraction following a home mortgage meltdown.