A new report on the US economy says economic activity appears to have slowed to a crawl in the past weeks, though price pressures intensified.

The Federal Reserve's Beige Book report will be used by its policymakers for their August 5 interest rate meeting. It painted a grim picture of weak activity along with higher inflation.

The report said the five eastern districts 'noted a weakening or softening in their overall economies' while the Midwest regions covered by the Chicago and Kansas City district banks 'noted a moderation in growth'.

The inflation picture was equally downbeat. 'All districts characterised overall price pressures as elevated or increasing,' the report said. It pointed to rise in fuel, other petroleum-based materials, metals, food and chemicals.