WASHINGTON (AP) — The Federal Reserve said Wednesday that the U.S. economy was expanding at a modest pace in October and early November, supported by growing consumer spending.

In its latest assessment of business conditions nationwide, the Fed struck a more upbeat tone than it had in its previous report when it had worried more about trade tensions and slower global growth.

However, it still noted that the majority of the Fed’s 12 districts were not experiencing growth in manufacturing, which has been hurt by a widening trade war with China.

The Fed report, known as the beige book, will be used when Fed officials meet in mid-December to set interest rate policies. The wide expectation is that the central bank will leave its benchmark rate unchanged after cutting it at its three previous meetings.

Those rate cuts, which followed four rate hikes last year, have given a boost to interest-rate sensitive sectors of the economy such as housing and auto sales.

There are hopes that the United States and China will soon reach agreement on a so-called Phase 1 trade agreement that will keep President Donald Trump from imposing a new round of tariffs on Chinese goods.

The U.S. tariffs have provoked retaliation from China which has hurt American manufacturers and farmers, who have seen their markets in China disappear.

The beige book said that more districts than in the previous report said that manufacturing was expanding again, although that number still remained below half of all districts.

Among the responses, the Richmond Fed district said that manufacturers in its region “saw a pickup in shipments and new orders but continued to face constraints from tariffs and trade uncertainties.”

The report found that agricultural conditions in many districts were under strain from adverse weather and low crop prices which in some cases reflected the loss of Chinese markets for such crops as soybeans.

“More poor weather added to crop farmers’ difficulties,” the Chicago Fed reported.

The St. Louis district said its business contacts continued to experience a “heightened sense of economic uncertainty,” while the Philadelphia district said business contacts there were expressing “cautious optimism but continued uncertainty.”

The report found that employment continued to rise with several districts reporting relatively strong job gains in professional and technical services as well as health care.

Employment in manufacturing was mixed with some districts reporting rising employment in manufacturing while others reported stable headcounts and others reported manufacturing layoffs.

But outside of manufacturing, the majority of districts noted tight labor markets with the shortage of qualified applicants spanning most industries. Despite the tight labor markets, overall wage growth continued to be moderate across most districts although the report said wage pressures had intensified for low-skilled positions.

The report found prices were still rising at a modest pace although some retailers reported higher costs that they blamed in part on the tariffs that have been imposed in the trade war.