U.S. economic activity was unchanged since early July, according to the Federal Reserve's Beige Book report released on Wednesday. That compares with the "modest pace" indicated in the central bank's previous snapshot of the U.S. economy in July.

Five districts of the 12 that comprise the Federal Reserve system reported "slight to modest growth" and five others reported "slight to modest softening."

Inflation is clearly taking a toll. "Most districts reported steady consumer spending as households continued to trade down and to shift spending away from discretionary goods and toward food and other essential items," the report said.

Perhaps more telling, the "outlook for future economic growth remained generally weak, with contacts noting expectations for further softening of demand over the next six to twelve months."

Here are some of the key points:

Earlier this month, the U.S. unemployment rate increased to 3.7% in August and job gains moderated to 315K