China: Economic recover in US

Xinhua

U.S. economic recovery on firmer footing, property sector still weak: Fed

WASHINGTON, March 15 (Xinhua) -- The U.S. economic recovery is "on a firmer footing," but the nation's housing sector continues to be depressed, the Federal Reserve said on Tuesday.

The overall conditions in the labor market is "improving gradually," the Fed noted in a statement released after a meeting of the Federal Open Market Committee (FOMC), the interest rate policy-making body of the central bank.

Based on information received since the FOMC met in January, the Fed said that U.S. household spending and business investment in equipment and software continue to expand.

However, "investment in nonresidential structures is still weak, and the housing sector continues to be depressed."

In a unanimous decision, the Fed said it was maintaining the pace of its 600 billion dollars Treasury bond-purchase program to help the economy grow more strongly and to lower unemployment, which now stands at 8.9 percent.

It also decided to keep the federal funds rate at the historically low level of zero to 0.25 percent for an "extended period."

In the statement, the central bank expressed its attention toward inflation factor.

"The recent increases in the prices of energy and other commodities are currently putting upward pressure on inflation. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations," noted the statement.

The Fed said that commodity prices have risen significantly since the summer, and concerns about global supplies of crude oil have contributed to a sharp run-up in oil prices in recent weeks.

Nonetheless, longer-term inflation expectations have remained stable, and measures of underlying inflation have been subdued, the Fed said.

Oil prices have spiked since January, as investors worry that unrest in the Middle East and North Africa could hurt global supply. Oil prices have dropped in recent days and are now hovering around 97 dollars a barrel. Still, U.S. gasoline prices have stayed high and now average 3.57 dollars a gallon nationwide.

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