The Federal Reserve said on Wednesday that the U.S. economy slowed during the winter times, a downgrade from its March statement, which said growth had " moderated somewhat." It offered no signal of any rates hike in sight.
Fed said the slowdown was in part due to transitory factors. The pace of job gains moderated, the unemployment rate remained steady, and the underutilization of labor resources was little changed, it said.
Growth in household spending declined, business investment softened, the recovery in the housing sector remained low, and exports declined, the Fed said in a statement after a two-day meeting of its open market committee, its policy arm.
Inflation continued to run below the committee's longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports.
"Although growth in output and employment slowed during the first quarter, the Committee continues to expect that, with appropriate policy accommodation, economic activity will expand at a moderate pace," it said, adding it continued to see the risks to the outlook for economic activity and the labor market as "nearly balanced."
Fed anticipated inflation to remain near its recent low level in the near term, but expected it to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of declines in energy and import prices dissipate.
The statement indicated that the Fed will keep its near-zero interest rates in the near term, without giving further details on when to raise the rates.
The policy statement came just hours after data showed tepid economic growth of the U.S. economy.
U.S. real gross domestic product (GDP) increased at an annual rate of 0.2 percent in the first quarter, as uneven growth still haunted the world's largest economy amid a protracted weak recovery, according to an advance estimate released by the U.S. Commerce Department on Wednesday.