Federal Reserve officials see the US economy emerging from recession but in a recovery "restrained" by difficult credit conditions and high unemployment, minutes from a policy meeting showed Wednesday.
The minutes released from the September 22-23 Federal Open Market Committee indicated that participants "agreed that the incoming data and information received from business contacts suggested that economic activity had picked up following its severe downturn."
Many Fed officials had revised up their projections for economic activity in the second half of 2009 and beyond, on the basis of data showing steadying housing and consumer spending as well as other factors.
"Despite these positive factors, many participants noted that the economic recovery was likely to be quite restrained," the minutes showed.
"Credit from banks remained difficult to obtain and costly for many borrowers; these conditions were expected to improve only gradually.
"In light of recent experience, consumers were likely to be cautious in spending, and business contacts indicated that their firms would also be cautious in hiring and investing even as demand for their products picked up."
The report noted that some of the upturn in the economy "probably reflected government policy support," and that Fed officials "expressed considerable uncertainty about the likely strength of the upturn once those supports were withdrawn or their effects waned".
"Overall, the economy was projected to expand over the remainder of 2009 and during 2010, but at a pace that was unlikely to reduce the unemployment rate appreciably," the minutes stated.
AFP
