June 13 (Bloomberg) -- The Federal Reserve gave a more upbeat assessment of U.S. regional economies, as manufacturing and job growth picked up.

Yet the strength of the economy, along with higher costs of fuel and food, hasn't increased "overall'' pressures on wages and prices, the Fed said in its survey, known as the Beige Book for the color of its cover.

The report came hours after the government said retail sales jumped by the most in more than a year. The Beige Book lends credence to the forecast by Chairman Ben S. Bernanke and his colleagues that U.S. economic growth will rebound last quarter's pace of 0.6 percent, the slowest in more than four years, while inflation gradually drifts down.

``Most districts reported that overall wage pressures do not seem to have increased,'' the Fed said in the report, which reflects information collected before June 4. Even with higher energy costs in most districts and at least two mentioning rising food prices, ``reports generally did not indicate an increase in overall price pressures.''

After the report, U.S. stocks extended gains. The Standard & Poor's 500 Index rose 13.69, or 0.9 percent, to 1506.69 at 2:32 p.m. in New York.

The Fed has left its main interest rate unchanged for almost a year as it waits for the housing recession and inflation pressures to abate.

`Moderately Strong'

The Minneapolis, Philadelphia and Richmond districts reported a pickup in their regional economies, while the Dallas district showed ``moderately strong'' growth, the Fed said. San Francisco, which covers most of the western U.S. and is the largest Fed region, was among the seven districts reporting ``modest or moderate'' growth.

In the previous four Beige Book reports, ``most'' areas reported ``moderate'' or ``modest'' growth.

The economy will probably expand at a 2.6 percent annual pace in the three months ending June 30, the median estimate of analysts surveyed by Bloomberg News from May 30 to June 7.

Earlier today, a new report showed U.S. retail sales jumped the most in more than a year in May as Americans flocked to malls, undeterred by record gasoline prices and falling home values. The 1.4 percent increase was twice the median forecast in a Bloomberg News survey of economists and followed a revised 0.1 percent drop the prior month, the Commerce Department said today.

Luxury Items

Consumer spending and retail sales were ``generally up,'' and several banks reported faster sales of ``luxury items'' than lower-end goods.

The Fed's Open Market Committee is likely to keep its target rate for overnight loans between banks at 5.25 percent for an eighth straight meeting when it gathers June 27-28, according to economists surveyed by Bloomberg. The Fed releases the Beige Book report two weeks before each rate meeting.

Traders have abandoned bets that the Fed will cut the rate by year-end, and yields on 10-year Treasuries yesterday climbed above the Fed's target rate for the first time in almost a year.

Inflation, excluding food and energy costs, has run at or above the upper end of the comfort range of several Fed officials for three years. The Fed's preferred gauge, the Commerce Department's core personal consumption expenditures index, rose about 2 percent in April from a year earlier.

The U.S. unemployment rate was at 4.5 percent last month, close to a five-year low.

``Hiring activity picked up in late April through May, especially for workers with specialized skills,'' the Fed said.

Housing

The length of the housing recession has surprised many economists and forced Fed policy makers last month to acknowledge it will be longer than they anticipated. Bernanke said June 5 that ``tighter'' loan standards will slow housing demand. At the same time, he and other officials have said the slump hasn't spilled over into other parts of the economy.

Residential housing and construction showed ``continuing weakness,'' while there was ``widespread improvement'' in commercial real estate, today's Fed report said. Home-mortgage lending either fell or was little changed in all districts reporting except New York, the Fed said.

At their last meeting on May 9, Fed officials continued to view inflation as the biggest risk to the economy, according to minutes of the meeting. Their statement released that day maintained a forecast for the economy to grow at a ``moderate pace'' in the coming quarters.

The Beige Book said manufacturing gained in a majority of Fed districts. Companies in homebuilding showed ``weakness'' and machinery, while equipment makers in several regions had ``strength.'' Service industries, except for trucking, provided ``generally positive'' reports.

Earlier this month, the Institute for Supply Management said manufacturing growth in the U.S. accelerated in May as orders picked up, while service industries expansion in the unexpectedly quickened to the highest level in more than a year.