U.S. economic activity was flat or slowing in April and May, according to the Federal Reserve's latest anecdotal survey of national economic conditions released on Wednesday -- a report that showed few bright spots in the outlook.

``Most districts report that economic activity was little changed or decelerating in April and May,'' the central bank said in its ``beige book,'' named for the report's cover. The report was compiled by the Minneapolis Fed and is based on information gathered before June 4. 

The information will be used by the Fed's policy-setting Federal Open Market Committee when it next meets on June 26-27 to plot interest-rate strategy. 

The Fed has already slashed rates by a hefty 2-1/2 percentage points since January in a bid to keep the economy from dipping into recession. Many analysts expect another, possibly smaller, rate cut at the end of the June meeting. 

The report found scant signs of inflation and said there was some easing in labor markets for most occupations. ``Wage and price increases are moderate,'' the Fed said, aside from ''significant'' pickups in energy and health-care costs. 

The report's tone was not much more optimistic than the previous beige book issued on May 2, when the central bank said all of its districts were reporting slowing economic activity. 

``The one bright spot is the continued growth in energy exploration,'' the Fed said in Wednesday's report, after citing stagnation in mining, a leveling off in construction and a slower pace of agricultural activity. 

The report also found that most of the Fed's 12 regions reported declining or weak manufacturing activity. 

Many analysts say the nation's manufacturing industries are already in recession, battling to sell off excess inventories. The beige book said the Chicago Fed reported many companies in the Midwest believed ``the worst of high inventory levels is over.'' 

Consumer spending was termed ``lackluster'' in the report as even tourism showed signs of weakening. Hotel occupancy rates in Manhattan in March and April, for example, were 10 percentage points lower than their year-ago levels, the Fed said.