Economic activity in the United States has picked up slightly since the start of the year, but inflation is still present, the US Federal Reserve said in its economic report on Wednesday, AFP reported.

Since early January, the U.S. economy has remained “balanced and growing modestly,” a sign that it remains strong, while inflation is gradually moving closer to the Fed’s 2 percent target, the report said.

The sustained increase in the price of the American economy is good news for President Joe Biden, who has made this topic one of his main arguments in the new duel looming with Donald Trump.

But the outgoing president appears to be struggling to convince himself that his measures are effective, given that prices for a number of goods and services have risen sharply over the past two years, and that slowing inflation by no means means that prices have returned to level to boom.

Despite the still solid economic performance, the Fed notes a slight slowdown in consumer spending as some households are forced to cut back on non-essential spending and turn to cheaper products.

The report also pointed to a “slight increase” in employment across much of the US as the labor market “relaxed somewhat”.

This situation makes it easier for companies to hire and retain existing employees.

Also, while price pressures are “persistent,” the Fed notes that several regions have reported “some moderation in inflation.”

The finding echoes recent reports on inflation in the United States, which has shown a gradual slowdown even as it remains above the central bank’s 2% target.

In January, the CPI index, which is the Fed’s best gauge for setting its monetary policy, fell to an annual rate of 2.4% from 2.6% in the previous month.