The Federal Reserve said today the U.S. economy continued growing at a “modest pace” in the latter part of the fourth quarter and early January, as retail sales grew moderately amid tight labor markets and a continued housing slump,

Residential housing continued a downward trend, according to the Fed’s “beige book” report on regional economies. “Nearly all districts reported a continued softening in housing markets, and high inventories of new homes have generally led to a slowing in residential building,” the report said.

The New York and San Francisco Districts reported moderate growth, while the Dallas district reported further deceleration from a high level of activity. The Minneapolis district reported slight growth. The Boston district characterized activity as mixed, and the Cleveland district saw softening activity.

Districts generally reported modest increases in retail sales, and vehicle sales were sluggish in several districts. Tourism spending was up in a number of districts.

Reports on the service sector were generally positive; many districts reported growth in technical, legal and information services.

Manufacturing activity continued to expand in most districts, with weakness reported mainly for products supporting the residential construction industry. Nearly all districts reported a continued softening in housing markets, and high inventories of new homes have generally led to a slowing in residential building.

In contrast to the housing sector, commercial real estate markets continued to see strong activity in most districts. Lending activity was mixed, with commercial and industrial lending generally up while residential mortgage origination and refinancing continued to weaken.

Overall weather conditions and high prices aided the agriculture sector. Energy production and exploration remained at high levels, and the alternative energy sector increased. Mining output grew.

District reports generally described labor market conditions as tightening and cited examples of some businesses having difficulty finding qualified workers. Despite expanded hiring, districts reported relatively moderate gains in wages; however, some districts noted certain business lines that experienced wage increases and have concerns about increases in the benefit portion of compensation.

Reports also indicated moderate price increases overall as prices for energy and a number of materials eased and competition kept prices for final goods in check.

The beige book is a summary report of economic activity for use at the central bank’s next Federal Open Market Committee meeting in late January. The latest was prepared by the Minneapolis district.