(Reuters] – From February to early April the U.S. economy grew at a moderate rate and was subject to high inflation and workers shortages. A Federal Reserve report released Wednesday showed that businesses did not see any relief from these factors.

Anecdotal evidence is showing that the economy has been boosted by falling COVID-19 and continues to be resilient in spite of high inflation due to a glutted supply chain.

It is still a problem. The demand for everything, from labor and goods to food, continues to outstrip the supply. Not helped by China’s recent restrictions to COVID-19 spread and an increase in food and energy prices due to Russia’s invasion of Ukraine.

“Supply chain backlogs, labor market tightness, and elevated input costs continued to pose challenges on firms’ abilities to meet demand,” the Fed said in its survey, known as the “Beige Book,” which was conducted across its 12 districts through April 11. The uncertainty generated by geopolitical developments, rising prices and other recent events clouded the outlook for future growth.

Although the Fed increased interest rates for March for the third time in three year, they remain very low at 0.2% to 0.5%.

At its May 3-4 policy session, it is expected that rates will rise by one-half percentage point and then continue with hikes throughout the year to reduce high inflation. Last month’s consumer inflation was 8.5%. This is the highest since 1981.

Also, in May, it will likely begin to decrease its balance sheet. The Fed tried to lower consumer borrowing costs by keeping them low during the worst COVID-19 epidemic.

U.S. job opportunities remain at record levels, while the unemployment rate remains at 3.6% for two years. Wages have also been increasing at an acceptable pace, even though they are not keeping up with inflation.

The Fed reported that “many companies experienced significant turnover due to workers leaving for more lucrative jobs and better work schedules”