US labour market, economy remain weak: FedAugust 31st, 2011 - 5:26 am ICT by IANS
Washington, Aug 31 (IANS) The US Federal Reserve said Tuesday that the pace of the country’s economic recovery remained slow in recent months, and the labour market conditions continued to be weak.
Revised governmental data for 2008 through 2010 indicated that the recent recession was deeper than previously thought and that the level of real gross domestic product (GDP) had not yet attained its pre-recession peak by the second quarter of this year, Xinhua reported quoting the central bank.
“Private nonfarm employment rose at a considerably slower pace in June and July than earlier in the year, and employment in state and local governments continued to trend lower,” the Fed noted in minutes released Tuesday of a Federal Open Market Committee (FOMC) meeting held earlier this month.
The US unemployment rate is still hovering at 9.1 percent, while the nation’s real GDP expanded by a sub-par one percent in the second quarter of this year.
The US central bank decided at the meeting to keep exceptionally low levels for the federal funds rate at least through mid-2013 in an effort to jump-start the economy.
The economic outlook from FOMC participants has dimmed, as they noted a deterioration in labour market conditions, slower household spending, a drop in consumer and business confidence, and continued weakness in the housing sector.
Some members of the FOMC, the central bank’s interest-rate policy making body, pushed for a more aggressive response to the economic slowdown at the meeting.
“Some members expressed the view that additional accommodation was warranted because they expected the unemployment rate to remain well above, and inflation to be at or below, levels consistent with the committee’s mandate,” noted the minutes.
In his latest speech Aug 26, Fed Chairman Ben Bernanke did not propose an immediate new round of quantitative easing monetary policy, dubbed QE3, but left the door open for future monetary stimulus moves to shore up the economic growth.
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