The U.S. economy continued to expand in recent weeks, with manufacturing activity widening and employers in several parts of the country reporting difficulties finding skilled workers, the Federal Reserve said on Wednesday.

In its Beige Book report of anecdotal information on business activity collected from contacts across the nation, the U.S. central bank said five of its 12 districts described the pace of growth as "moderate," with the remaining districts viewing the expansion as "modest."

"Most districts were optimistic about the outlook for growth," the Fed said.

The report, compiled by the Federal Reserve Bank of Kansas City from data collected before July 7, fits in with employment, manufacturing and other data that have pointed to strong growth in the second quarter and buoyed the economy's prospects for the remainder of this year.

Output contracted sharply in the first three months of the year as the economy was slammed by bad weather, a slow pace of inventory accumulation and the end of long-term unemployment benefits.

The Beige Book found that consumer spending had increased in recent weeks in most districts, with automobiles dominating sales growth. Manufacturing continued to improve in all districts, with growth occurring across many sub-sectors, the Fed said.

Not only were labor market conditions improving in all districts, employers in several districts were finding it difficult to find skilled workers, it said. While that had pushed up compensation in those areas, overall wage pressures remained contained. (Reporting by Lucia Mutikani; Editing by Paul Simao)