US Federal Reserve remains concerned over growth

The US central bank has admitted concerns that the employment gains seen recently could dissipate if growth is unable to pick up, reports the BBC.

The minutes of the Federal Reserve’s March meeting revealed that some members within the organisation perceived a non-negligible risk that gains in employment of late may diminish as 2012 progresses. The Fed decided in March to again hold interest rates at all-time lows until late 2014 at the earliest.

The unemployment rate in the US has fallen to 8.3 per cent, its lowest point for three years. The rate of employment has been on the up for the last six months, but the rate of unemployment has remained above eight per cent since the first few months of 2009.

The amount of new jobs which are being created has remained consistently above 200,000 during each of the last three months, increasing hopes that the recovery in the US is gathering momentum.

At the Fed’s March meeting, staff revised the near-term forecast of the central bank’s real gross domestic product growth slightly upwards. The Fed said that there was a continued improvement in labour market conditions and unemployment has fallen in recent months.

It went on to say, however, that nearly all members viewed the rate of unemployment as still elevated in relation to levels which they saw as consistent with the mandate of the committee in the longer run.