The U.S. economy contracted over the past six weeks as hiring slowed and consumers and businesses worried about tariff-related price increases, according to a Federal Reserve report Wednesday.

In its periodic “Beige Book” summary of conditions, the central bank noted that “economic activity has declined slightly since the previous report” released April 23.

“All Districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions,” the report added.

Hiring was “little changed” across most of the Fed’s 12 districts, with seven describing employment as “flat” amid widespread growth in applicants and lower turnover rates.

“All Districts described lower labor demand, citing declining hours worked and overtime, hiring pauses, and staff reduction plans. Some Districts reported layoffs in certain sectors, but these layoffs were not pervasive,” the report said.

On inflation, the report described prices as rising “at a moderate pace.”

“There were widespread reports of contacts expecting costs and prices to rise at a faster rate going forward. A few Districts described these expected cost increases as strong, significant, or substantial,” it said. “All District reports indicated that higher tariff rates were putting upward pressure on costs and prices.”

There were disparities, though, over expectations for how much prices would rise, with some businesses saying they might reduce profit margins or add “temporary fees or surcharges.”

“Contacts that plan to pass along tariff-related costs expect to do so within three months,” the report said.

The report covers a period of a shifting landscape for President Donald Trump’s tariffs.

In early May, Trump said he would relax so-called reciprocal tariffs against China, which responded in kind, helping to set off a rally on Wall Street amid hopes that the duties would not be as draconian as initially feared.

However, fears linger over the inflationary impact as well as whether hiring and the broader economy would slow because of slowdowns associated with the tariffs.

Tariffs were mentioned 122 times in Thursday’s report, compared to 107 times in April.

Regionally, Boston, New York and Philadelphia all reported declining economic activity. Richmond, Atlanta and Chicago were among the districts reporting better growth.

In New York specifically, the Fed found “heightened uncertainty” and input prices that “grew strongly with tariff-inducted cost increases. Richmond reported a slight increase in hiring despite Trump’s efforts to trim the federal government payroll.

Bulgaria on Wednesday secured the green light to join the euro zone, meaning the bloc could soon grow from 20 to 21 members.

The European Commission and European Central Bank both assessed that the country met the requirements to adopt the single currency starting next year.

“This positive assessment of convergence paves the way for Bulgaria to introduce the euro as of 1 January 2026 and become the 21st EU Member State to join the euro area,” Philip Lane, member of the ECB Executive Board, said in a press release.

The European Commission described the assessment as “a critical and historic step on Bulgaria’s journey towards euro adoption” in a statement.

European Commission President Ursula von der Leyen congratulated the country, saying the decision “will mean more investment and trade with euro area partners, and more stability and prosperity for the Bulgarian people.”

“Bulgaria will also take its rightful place in shaping euro area decisions,” she added in a social media post.

This marks a shift from last year’s reports, which concluded that Sofia did not meet the so-called convergence criteria to adopt the currency on the grounds that the country’s inflation rate was too high.

One of the obstacles to cross was inflation. Bulgaria’s harmonized consumer price index — which is comparable across European countries — came in at 2.8% in April according to statistics agency Eurostat.

Price stability is just one of the requirements a country needs to fulfil in order to join the euro zone, and thereby the European Central Bank. Others include limitations on the size of a nation’s government deficit and debt ratio, its average nominal long-term interest rate and its exchange rate stability.

There is also a legal requirement that covers central bank independence.

Bulgaria joined the European Union in 2007 and committed at the time to also join the euro zone and relinquish the Bulgarian lev as its official currency. Around 341 million people use the euro across the current 20 euro zone countries, according to the European Union. The ECB says over 29 billion euro bank notes with a value of more than 1.5 trillion euros ($1.7 trillion) are in circulation.

One euro is equivalent to 1.96 lev, a rate set when Bulgaria became part of the board which anchors the currencies.

There are mixed attitudes about joining the euro within Bulgaria. A survey published last year by the EU suggested 49% of the public was in favor of the becoming part of the euro bloc. Political opinion is also split, with several nationalist parties and the country’s president advocating against it, while Prime Minister Rosen Zhelyazkov is supportive.

The European Commission said that alongside its assessment, it had also adopted proposals for a council decision and council regulation on Bulgaria’s euro adoption at the start of next year. The council of the EU has the final say on countries joining the euro zone.