The Federal Reserve is expected to maintain aggressive stimulus of the US economy as policymakers end their monthly two-day meeting this evening.
Many economists now think the US central bank will keep buying bonds, to the tune of 85 billion dollar a month, until March of next year.
That is because of weaker hiring of workers, factory output and home sales in September, as well as the bitter budget battle in Washington that triggered a 16-day government shutdown earlier this month.
US inflation rose only modestly last month, giving the Fed scope to maintain its monthly bond purchases.
Weak job growth
As the Fed met, we learned that US private-sector employers took on the fewest number of workers in six months in October.
Employers in the vast private sector added 130,000 new jobs to their payrolls this month, the ADP National Employment Report showed on Wednesday. That was the lowest reading since April and was below economists’ expectations for a gain of 150,000 jobs.
September’s private payrolls gains were revised down to 145,000 from the previously reported 166,000 jobs.
Inflation benign amid tepid domestic demand
In a separate report, the Labor Department said its Consumer Price Index increased 0.2 percent last month as energy prices rebounded, after edging up 0.1 percent in August.
In the 12 months through September, the CPI increased 1.2 percent, the smallest gain since April. It had advanced 1.5 percent in August.
The Fed targets 2 percent inflation, although it tracks a gauge that tends to run a bit below the CPI.
Stripping out the volatile energy and food components, the so-called core CPI nudged up 0.1 percent, rising by the same margin for a second consecutive month.
That took the increase over the past 12 months to 1.7 percent after rising 1.8 percent in August.