FOMC Leaves Fed Funds Rate Unchanged Today

The Federal Open Market Committee provided a more encouranging appraisal of the United States economy today. However, FOMC members still voted to keep the closely watched Federal Funds interest rate unchanged and there was no indication that the Federal Reserve Bank would raise rates anytime soon despite better-than-expected November 2009 employment numbers.

The Federal Reserve Bank said it will continue its plans to withdraw certain lending programs over the next few months — an indication that the Federal Reserve Bank may start to unwind more significant asset purchases shortly thereafter.

The Federal Reserve Bank and its policymaking colleagues at the FOMC said that "the deterioration in the labor market is abating." This was the Federal Reserve Bank's first formal declaration that an very difficult employment outlook is actually brightening. The national unemployment rate slipped to 10% in November 2009 from 10.2% in October 2009.

The Federal Reserve Bank also stated that, "Financial market conditions have become more supportive of economic growth," in an indication stringent credit markets are loosening a bit. Also, consumer spending seems to be "expanding at a moderate rate," the Federal Reserve Board said, describing income growth as "modest."

Both statements represent upgrades over prior month statements. And, there have been many encouraging signs recently that the economic recovery is building.