WASHINGTON, Aug. 31 (Xinhua) -- The U.S. Federal Reserve expected economic recovery to remain sluggish in the coming months, according to minutes from the latest central bank meeting released on Tuesday.
"Real GDP growth was noticeably weaker in the second quarter of 2010 than most had anticipated, and monthly data suggested that the pace of recovery remained sluggish going into the third quarter," minutes from the Fed August 10 meeting said.
U.S. economic growth was revised downward to an annual rate of 1.6 percent in the quarter ended in June, compared to an initially estimated pace of 2.4 percent, the Commerce Department reported on Friday. This is the slowest quarterly growth since the U.S. economic activities began to pick up in the second half of last year.
Private payrolls and consumer spending had risen less than expected. Business spending on equipment and software had increased strongly but reportedly was concentrated in replacements and upgrades that had been postponed during the economic downturn, according to the minutes.
Fed officials also saw investment in nonresidential structures continue to be weak. Housing starts and sales remained at depressed levels, falling back after the expiration of the temporary homebuyer tax credits, they noted.
To prop up the anemic recovery, Fed members decided during its last policy meeting to buy more Treasury securities and keep its holdings of securities unchanged instead of letting it shrink as previously planned.
"While they saw growth as likely to be more modest in the near term, participants continued to anticipate that growth would pick up in 2011," said the minutes.
Fed chairman Ben Bernanke said last week that the central bank is ready to provide additional monetary accommodation if economic outlook continues to worsen.
"The committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly," Bernanke said at the Fed annual retreat in Jackson Hole, Wyoming.