campaign, aimed at reducing unemployment, amid fresh evidence of a housing recovery
that could help to bolster those efforts.
Sales of new homes rose 5.7 percent in September to the highest level since 2010,
when the government was offering tax credits to first-time buyers, the Commerce
Department said on Wednesday. The report joins other recent data showing rising
prices and increased construction in affirming that the housing market is recovering
from its prolonged downturn.
The Fed acknowledged that consumer spending, including spending on housing, has
strengthened, but it said that it remained convinced that its efforts were necessary
to bolster an inconsistent and lackluster recovery.
Unemployment remains stubbornly high, the domestic economy is growing slowly,
the global economy is struggling and a so-called fiscal cliff looms at the end of the year.
The committee is concerned that, without further policy accommodation, economic
growth might not be strong enough to generate sustained improvement in labor market
conditions,'' the Fed's policy-making committee said in a statement released after a
regularly scheduled two-day meeting. This was the Fed's last meeting before the
presidential election.
In holding its course, the Fed again defied the criticism of the Republican nominee,
Mitt Romney, who has described the central bank's efforts as ineffective and inflationary
and who has promised to replace its chairman, Ben S. Bernanke. Indeed, the statement
from the policy unit, the Federal Open Market Committee, once again emphasized that
it remained prepared to expand its efforts ''if the outlook for the labor market does not
improve substantially.''
The Fed announced after its last meeting, in September, that it would buy $40 billion in
mortgage securities each month until the jobs outlook improved, a significant expansion
of its stimulus campaign. It also said it intended to keep short-term interest rates near
zero at least until mid-2015.
The new policy is aimed specifically at helping the housing market by interest rates on
mortgage loans. The more people who buy homes, the greater the benefit to the housing
market and to the economy in general.
The housing market remains depressed by historical standards. New home sales have
reached an annual pace of 389,000, better than the last two years but significantly worse
than any other year since 1963.
And housing remains anchored to employment. People need jobs to buy homes.
Under a separate program begun last year, the Fed also is buying about $45 billion
in long-term Treasury securities each month. Those purchases are scheduled to end in
December. Officials have said they will consider extending the program depending on
the condition of the economy.
The central bank appears determined to press its campaign until it is certain of the
results, so long as inflation remains under control. It has been chastened by a series
of misjudgments, after declaring several times in recent years that the recovery was
gaining strength only to conclude that more stimulus was needed.
