(MENAFN - Kuwait News Agency (KUNA)) WASHINGTON, Nov 1 (KUNA) -- The Federal Reserve Open Market Committee (FOMC) revealed that the US labor market has continued to strengthen and economic activity has risen despite hurricane-related disruptions.
Although the string of record-breaking storms caused a drop in payroll, unemployment declined and household spending expanded, according to information released Wednesday from the FOMC's meeting in September.
Gas prices rose, boosting inflation due to the hurricanes. However, inflation for items outside of food and energy remained "soft", causing inflation measures to decline below two percent.
As reconstruction efforts from the storms will continue to affect the economy, experiences suggest that the hurricanes are unlikely to alter the course of the economy over the medium term. Therefore, the FOMC believes that with "gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further." The committee thus decided to maintain the target range for the federal funds rate at one to 1.25 percent with hope to further strengthen the labor market return to a two-percent inflation.
In order to assess future adjustments for the federal funds rate, the Committee "will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments," it said.
The Committee expects that the economy will eventually warrant a gradual increase to the federal funds rate but that is "likely to remain, for some time". (end) ak.hb