(Reuters) -U.S. economic activity has expanded slightly in most regions since early October, with employment growth "subdued" and inflation rising at a modest pace and businesses expressing optimism about the future, the Federal Reserve said on Wednesday in a summary of surveys and interviews from across the country known collectively as the "Beige Book."

"Though growth in economic activity was generally small, expectations for growth rose moderately across most geographies and sectors," the U.S. central bank said in its regular temperature check on the economy, drawing on observations from the business and community contacts of each of its 12 regional banks through Nov. 22. "Business contacts expressed optimism that demand will rise in coming months."

While growth in most Fed regions was minimal, it was "modest or moderate" in three districts and was "flat or slightly declining" in two others.

Descriptions of the employment scene largely echoed what the Kansas City Fed, which prepared the latest report, found across its district: "Hiring activity was subdued as few contacts reported adding headcount recently and nearly all businesses reported worker turnover was abnormally low."

Most districts also reported that employee wage growth was moderate and would continue being so, with many reflecting the St. Louis Fed's findings that "contacts expect wages to continue increasing at a similar pace in upcoming months."

Inflation was generally reported as moderate, although contacts in several districts referenced upside risk to prices moving forward due to expectations for new tariffs to be imposed by the incoming administration of President-elect Donald Trump.

"(A) significant number of firms expressed the concern that tariffs would drive prices higher. The trimmed mean for inflation expectations was 3.3% for all firms in the fourth quarter of 2024 - up from 3.0% in the third quarter," the Philadelphia Fed reported.

The findings will help shape Fed policymakers' thinking about how fast and how much further they may need to lower the policy rate, which is currently in the 4.50%-4.75% range after reductions in September and November.

The Fed's last rate-setting meeting of the year is in two weeks, and financial markets are betting it will deliver a quarter-percentage-point cut in borrowing costs despite inflation that has proven to be stickier than hoped for.

One key measure of underlying price pressures, the 12-month change in the personal consumption expenditures price index stripped of food and energy costs, has been stuck in a range of 2.6% to 2.8% since May, well above the Fed's 2% target.