The Federal Reserve said the economy expanded at a modest to moderate pace last month as auto sales led household spending and the labor market improved.

“Consumer spending expanded across almost all districts,” the report said. “Labor market conditions generally strengthened” with “hiring activity steady to stronger” in most of the U.S.

Seven of 12 districts saw “moderate” growth, with the rest characterized as “modest,” the Fed said in its Beige Book business survey, which is based on reports from its district banks.

The survey, released two weeks before policy makers meet in Washington, supports Chair Janet Yellen’s view that the economy is rebounding from a 1 percent contraction in the first quarter caused largely by harsh winter weather. Fed officials are watching the labor market as they move to complete their bond- purchase program late this year and start considering the timing of the first interest-rate increase since 2006.

Growth accelerated in the Cleveland and St. Louis districts and slowed slightly in Kansas City, the Fed said.

The Federal Open Market Committee in April trimmed monthly bond purchases for the fourth straight meeting and said further “measured” cuts were likely. At the same time, the panel affirmed its commitment to a “highly accommodative” policy.

Rebound Seen

Policy makers, including Atlanta Fed President Dennis Lockhart, are predicting the economy will bounce back after harsh winter weather kept consumers at home and disrupted production in many regions.

“The weak first-quarter performance can be explained mostly by bad weather,” Lockhart said May 27, adding that he sees the pace of growth moving back toward 3 percent.

“Demand for both products and services is likely to rise, supporting overall growth on a more sustained basis,” Kansas City Fed President Esther George said.

The report said that “manufacturing activity expanded throughout the nation” and “transportation activity strengthened in most districts” with ports showing “brisk growth” along the Southeastern coast.