Tourism showed strength in hotel bookings, especially for Memorial Day over 2009 figures in some areas. Meanwhile, the Atlanta region reported losses in vacation bookings due to the oil spill in the Gulf of Mexico and floods in Tennessee.
"The potential exists for a much greater impact, although contacts are quite uncertain as to the ultimate effects," the report said.
Manufacturing and transportation activity increased — the manufacturing sector is slowly bouncing back from massive job losses during the past couple of years. The sector has been the main source for the improvement in private sector hiring. The labor market, while still struggling to add jobs, reported slight improvement in all districts.
Residential real estate and construction activity have also improved since the last report, as home buyers took advantage of an up-to-$8,000 tax credit for purchasing a house, the Fed reported. Commercial real estate, on the other hand, remained weak.
Cars sales rose overall, although some districts reported slowing sales through May.
Earlier, Fed Chairman Ben Bernanke told lawmakers on Capitol Hill that while the economy is bouncing back he would like to see a stronger performance. The FOMC will meet June 22-23 and they are unlikely to make any interest rate adjustments, which policymakers have said they need to keep low for an extended period, possibly through this year.