Economic recovery: US sounds upbeat

Presenting an optimistic picture of the American economy, the US Federal Reserve has said the recovery is on a 'firmer footing'.

The apex bank's observation on Tuesday comes at a time when global markets remain uncertain about the overall impact of the tsunami and the subsequently unravelling nuclear crisis in Japan.

The Federal Open Market Committee, the key monetary policy making body, noted that 'the economy is on a firmer footing and overall conditions in the labour market appear to be improving gradually'.

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Further, FOMC has decided to maintain benchmark interest rate in the range of 0-0.25 per cent.

"(We) continue to anticipate that economic conditions, including low rates of resource utilisation, subdued inflation trends and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period," it said.

The Federal Reserve has been persisting with very low interest rates since December 2008.

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"Household spending and business investment in equipment and software continue to expand. . . longer-term inflation expectations have remained stable, and measures of underlying inflation have been subdued," the statement said.

US expanded at 2.8 per cent in the last three months of 2010.

However, high level of unemployment remains a concern.

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As announced in November, the Federal Reserve would continue expanding its holdings of securities and plans to purchase $600 billion of longer-term Treasury securities by end of 2011 second quarter.

Ravaged by the worst financial crisis since the 1930s Great Depression, the US has resorted to many policy measures to bolster the national economy.