Fed's Beige Book: Economy expanded at a moderate to modest pace

Federal Reserve Building
Hisham Ibrahim | Photographer's Choice RF | Getty Images

Economic conditions remained status quo from early October through mid-November, leaving the Federal Reserve in a policy quandary, according to the central bank's most recent Beige Book report.

Growth was "modest to moderate" during the period, the report said, repeating language the Fed used in the last release in October.

Manufacturing expanded, particularly in autos and tech, while employment "showed a modest increase or was unchanged" throughout the Fed's districts.

Investors were examining the report for clues as to whether the Fed may begin to reduce the pace of its monthly asset purchases—quantitative easing—but the Beige Book offered little direction.

(Read more: Cashin warns: This could be 'tripwire' for stocks)

Markets, though, took some encouragement from the report, lifting stocks a bit off their lows for the day.

Beige Book: Some declines from govt. shutdown
Beige Book: Some declines from govt. shutdown

Most economists and strategists expect the Fed to begin reducing, or tapering, QE late in the first quarter of 2014, though some sporadic strong data points, such as Tuesday's ADP jobs report, indicated strengthening.

The two most critical metrics for Fed policy are unemployment and inflation. The ADP report found a stronger-than-expected 215,000 private-sector jobs created in November, while inflation pressure remains muted.

(Read more: Private job creation jumps, way above expectations)

The Fed survey, though, showed some price pressure.

"Price inflation is contained, with phrases such as 'minimal,' 'no change,' and 'stable' being common across most districts," the Beige Book said. "However, in New York, service-sector firms reported that price pressure was moderate and that a sizable number of firms were planning at least some price increases in the coming months."

Businesses reported concerns over not being able to find qualified workers to fill open positions, as well as increased costs associated with the Affordable Care Act.

(Get the full Beige Book report here.)

—By CNBC's Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.