The U.S. Federal Reserve (Fed) policymakers saw "the overall economic activity continued to rise in recent months," but labor market remained a major concern, according to documents released Tuesday.
Minutes of the Federal Open Market Committee (FOMC), the Fed's monetary policy decision meeting, held on Nov. 3-4, showed that Fed Chairman Ben Bernanke and his colleagues saw more positive signs about the economy's prospects compared with an assessment made in September.
The Fed said that manufacturers increased production in September for the third consecutive month. The gradual recovery in construction of
single-family homes from its extremely low level earlier in the year continued, and home sales increased in the third quarter.
Although consumer spending on motor vehicles declined in September after the expiration of government rebates, other household spending rose. Outlays for equipment and software appeared to be stabilizing.
The statement said that Fed officials raised their projection for real GDP growth over the second half of 2009 but left the forecast for output growth in 2010 and 2011 roughly unchanged.
The labor market continued to weaken in September, and job losses remained widespread across industries.
The unemployment rate, currently at 10.2 percent, is the second time in the post-World War II period that unemployment has topped 10 percent.
Most Fed policymakers say it could take "five or six years" for the economy and the labor market to get back on a path of full health.
The Fed says the jobless rate could hover between 8.6 percent and 10.2 percent next year.
On financial situation, the Fed officials said that "overall conditions in short-term funding markets eased a bit further during the intermeeting period."
In the forecast prepared for the November FOMC meeting, the central bank officials expect that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price
stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent "for an extended period."