WASHINGTON (Reuters) - The United States faced increasing inflationary pressures in recent weeks amid slowing economic growth, the Federal Reserve said on Wednesday, as it described conditions in some areas as "grim," "morose" or "bleak."

The gloomy Fed report reflected the twin challenges of weak growth and price pressures that limit policy-makers' options going into their next meeting on interest rates on August 5. They are expected to hold benchmark rates steady at 2 percent.

"All reporting districts characterized overall price pressures as elevated or increasing," the Fed said in its Beige Book report on the state of the economy through July 14.

A Fed policy-maker said separately that the central bank must raise rates to curb inflation, but should be of mindful of the shaky state of the economy as it does so.

"It's important to move in a judicious way and be careful about, and be supportive of, the economy at the same time," Philadelphia Federal Reserve Bank President Charles Plosser said in an interview on Bloomberg television. Plosser is a voting member of the Fed's rate-setting committee this year.

The Fed's report portrayed weak or sluggish economic activity in many areas of the country amid slow consumer spending, while higher energy and commodity prices were pressuring businesses to pass along higher prices.

"Clearly the economy is in a what may be called a near-recessionary state. And inflationary pressures are picking up," said Nariman Behravesh, chief economist at Global Insight in Lexington, Mass.

After the Fed report on Wednesday, markets trimmed expectations that policy-makers would start to combat inflationary pressures by raising interest rates at their September meeting to 62 percent from 68 percent earlier.

Stocks turned lower after the downbeat report but ended the day higher and U.S. Treasury debt prices briefly pared losses on the report. The dollar pared gains against the euro and the yen but rallied on the day.

Analysts said there was nothing in the survey to suggest that the Fed would move benchmark interest rate targets higher or lower at its next meeting.

"From the Fed's perspective, the high oil and fuel and food prices haven't yet spread to the rest of the economy, which is very critical to what the Fed does next," Behravesh said.

Prices producers face rose, particularly fuel, petroleum-based materials, metals, food and chemicals, the U.S. central bank said.

"Retail price inflation varied across the country, with some districts reporting increases but others noting stability, at least for the present," the report said.

At the same time, wage pressures were generally limited in most districts, the Fed said.

The Fed said consumer spending was sluggish or slowing in nearly all parts of the country. Government fiscal stimulus checks boosted consumer spending for some items, especially electronics, the report said.

Residential real estate markets declined or were weak across most of the country. Single-family home construction declined around the country, the Fed said.

Also, manufacturing activity declined or remained weak in most districts, the Fed reported. Even so, some areas reported high demand for exports.

Manufacturers in some parts of the country were reevaluating capital spending plans in light of the weak economy, the Fed added.

The Philadelphia Fed's Plosser, who has dissented twice in favor of less aggressive actions in recent months when the Fed cut borrowing costs, said interest rates were below the rate of inflation and could not stay there indefinitely.

"We've got price pressures clearly throughout the economy," he said. "Ultimately, rates are going to have to go up, and I think the question is the timing of that and managing, at the same time, expectations about inflation going forward," he said.

(Additional reporting by Alister Bull; Editing by Leslie Adler)