Federal Reserve: Economy growing, prices rising

NEW YORK (CNNMoney) -- Businesses are passing on surging costs to consumers. Hiring is modest. Wages are barely rising. The housing market is still struggling.

But the economy is expanding at a"modest to moderate pace", the Federal Reserve said.

That's the picture from the Fed's Beige Book report released Wednesday.

Retailers and manufacturers across all 12 of the Federal Reserve's districts said they're seeing higher input costs. That's no surprise given surging prices on everything from oil to food lately.

But while they told the Fed they're already passing on some of those costs to customers, homebuilders -- especially in the Cleveland and Atlanta districts -- are not, most likely due to the troubled housing market.

Both commercial and residential construction continues to be one of the slower segments of the economy, while manufacturers, retailers and financial firms reported slight growth.

Meanwhile, it's still tough to get credit, and in some regions, banks are actually tightening their standards.

The Fed reported little evidence of wages increasing in most of its districts.

The report echoes recent comments from Fed Chairman Ben Bernanke, who acknowledges rising prices are impacting the average American, but not yet at a level that will derail the recovery.

The Beige Book summarizes economic conditions in the central bank's 12 districts across the nation, and is released eight times a year.