Federal Reserve says US economy has decelerated in first half of year, takes no new steps

WASHINGTON – The Federal Reserve says the U.S. economy is losing strength and repeated a pledge to take further steps if the job market doesn’t show sustained improvement.

The Fed took no new action after its two-day policy meeting. But it acknowledged that economic activity had slowed over the first half of the year, unemployment remains elevated and consumer spending has weakened.

Policymakers repeated their plan to hold short-term interest rates at record low levels until at least late 2014.

Most economists say the Fed is likely to go further at its September meeting by launching another bond-buying program to drive down long-term interest rates.

The statement was approved on an 11-1 vote. Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, dissented for a fifth time this year.