WASHINGTON (AFP) - Supply bottlenecks and labour shortages have slowed US economic growth and contributed to a sharp rise in prices, the Federal Reserve said on Wednesday (Oct 20).

The constraints and shortage of goods caused "significantly elevated prices" in most areas of the country, the Fed said in its "beige book" report on economic conditions, which noted rising uncertainty about the outlook.

While economic activity increased at a "modest to moderate" rate over the last several weeks, in much of the country "the pace of growth slowed... constrained by supply chain disruptions, labour shortages, and uncertainty around the Delta variant of Covid-19," the report said.

The analysis, based on discussions with business and community contacts in the central bank's 12 regions, was prepared in advance of the Fed's next policy meeting Nov 2-3.

Despite again reporting the US pandemic recovery losing steam, Fed officials are expected to announce plans to start to pull back on stimulus measures amid concerns about rising inflation.

The shortage of workers continued to constrain business, notably in the transportation sector - a factor that has been adding to the supply challenges.

"Child-care issues and vaccine mandates were widely cited as contributing to the problem, along with Covid-related absences," the report said, citing "high turnover" rates.

The Fed said employers have responded by raising wages for new and existing workers and "many also offered signing and retention bonuses, flexible work schedules, or increased vacation time to incentivise workers to remain in their positions."

The Fed's report comes in the wake of tens of thousands of nurses, factory workers and other labourers going on or threatening strike across the US this month, with workers citing long hours, low wages and unsafe working conditions.

According to the Fed, while the sentiment abou the near-term economic outlook "remained positive, overall," some areas reported "increased uncertainty."