The US economy grew modestly over the summer amid continued uncertainty about the Covid-19 pandemic and its negative effect on consumer and business activity, according to a Federal Reserve survey.

"Economic activity increased among most Districts, but gains were generally modest and activity remained well below levels prior to the Covid-19 pandemic," Xinhua news agency quoted the Fed as saying in its latest survey on economic conditions, known as the Beige Book, on Wednesday.

"Continued uncertainty and volatility related to the pandemic, and its negative effect on consumer and business activity, was a theme echoed across the country." The survey also showed that the labour market remained volatile, while employment increased overall among districts.

"Some districts also reported slowing job growth and increased hiring volatility, particularly in service industries, with rising instances of furloughed workers being laid off permanently as demand remained soft," it said.

US private companies added fewer-than-expected 428,000 jobs in August, indicating a slow recovery in a labour market ravaged by the Covid-19 crisis, payroll data company Automatic Data Processing (ADP) reported earlier on Wednesday.

Amid fragile economic recovery from the pandemic, Fed Chairman Jerome Powell announced last week that the central bank will seek to achieve inflation that averages 2 per cent over time, a new policy strategy that will likely keep interest rates near zero for years.