Wednesday's release of the so-called Beige Book, which is a summary of outlooks from the 12 district banks from across the country, certainly didn't portray a robust economy.

"Many districts described the pace of growth as 'modest' or 'slight' and contacts generally noted weaker or less certain outlooks for business conditions," said the Beige Book report.

But amid growing fears that the economy has already fallen into a new recession or is about to do so, the Fed's report said growth was still present in most of the country.

"Overall economic activity continued to expand in September," said the Fed, as it said consumer spending was up in most districts and business spending is also increasing "somewhat."

The central bank said a few districts even reported improvement in the long-suffering construction and real estate industries. And it said cost pressures are easing in the majority of districts.

But financial activity is declining in much of the country with loan volumes either flat or down slightly in most districts, an indication of weak confidence and lowered business investment. And there was little good news for unemployed job seekers.

"Hiring was being restrained by elevated uncertainty or lower expectations for their future growth," said the Fed.

The Richmond and Chicago districts reported retailers reducing their seasonal hiring plans due to concerns about a weak holiday shopping season, although the New York district reported an increase in seasonal hiring.