The Federal Reserve (search) on Wednesday gave the U.S. economy an upbeat assessment, saying economic growth and hiring had picked up in recent weeks.

"Economic activity increased across the nation from mid-February through early April. The growth was widespread as retail sales moved up noticeably, and manufacturing, mining, energy, tourism, and services all grew," the Fed said in its "beige book (search)" report, an anecdotal summary of conditions in the central bank's 12 regional districts.

"Labor markets tightened somewhat with modest wage increases," the Fed said. However, it also noted "significant increases" in worker health benefit costs.

The report was compiled by the Federal Reserve Bank of Minneapolis, based on information gathered before April 12. It will be reviewed by the Federal Open Market Committee (search) when it gathers in Washington on May 4 to mull short-term interest rates.

While the report's tone was brighter than the previous one, which said hiring had increased "slowly" in January and February, it gave little hint the FOMC needs to act soon.

Earlier Wednesday, Fed Chairman Alan Greenspan (search) told a congressional panel rates must rise "at some point," but noted inflation pressures did not appear to be building.

"Many districts reported modest increases in overall consumer prices, but most districts indicated significant increases in numerous commodities and input products," the beige book said.

The report also held good news for the long-suffering U.S. factory sector, noting, "Manufacturing activity increased in all districts. New orders and production were up over a year ago."