By Lindsay Dunsmuir

(Reuters) - U.S. economic activity increased slightly from early January through late February while inflation and the jobs market gave a mixed picture on how quickly they will cool further, a U.S. Federal Reserve survey showed on Wednesday, underscoring the complicated picture for central bankers as they seek to tame pricing pressures.

The U.S. central bank released its latest temperature check on the health of the economy after Fed Chair Jerome Powell said earlier on Wednesday that it remains unclear when the Fed may cut interest rates and underpin the current expansion given further progress on inflation was not assured.

Powell and his colleagues are attempting to engineer a so-called "soft landing" for the economy in which economic growth gradually slows and the unemployment rate remains low even as inflation, which spiked to a 40-year high two years ago, returns to the Fed's 2% target rate.

"Economic activity increased slightly, on balance," the Fed said in its survey released on Wednesday, known as the "Beige Book," which polled business contacts across the central bank's 12 districts through Feb. 26. "The outlook for future economic growth remained generally positive, with contacts noting expectations for stronger demand and less restrictive financial conditions over the next 6 to 12 months."

Since March 2022, the central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range, where it has been held since July.

By the Fed's preferred measure, inflation in January was running at a 2.4% annual rate, down from the 7.1% peak reached in June 2022.

While the policy rate is set to remain unchanged at the next interest-rate setting meeting on March 19-20, Fed officials in December provisionally penciled in three rate cuts this year.

Recent stronger-than expected data on employment and inflation has raised fears that the economy is still too robust for pricing pressures to fully return to the Fed's target rate.

Fed policymakers as a result have indicated that they are in no rush to start lowering borrowing costs until they are more confident disinflation will continue.

In the report, there were further signs the labor market had eased further, but wages grew further and there was some renewed inflation pressures.

"Contacts highlighted increases in freight costs and several insurance categories, including employer-sponsored health insurance," the Fed's survey said.

(Reporting by Lindsay Dunsmuir and Ann Saphir; Editing by Andrea Ricci)