The Federal Reserve kept its US$85 billion-a-month of bond buying in place as expected, saying it wants more signs of the world's biggest economy is picking up, given recent weak data and the budget impasse in Washington.
"Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months," the Fed's policy-setting Federal Open Market Committee said. "Fiscal policy is restraining economic growth."
The fed's announcement comes in a week when data showed private-sector employers hiring shrank to a six-month low, retail sales fell, consumer confidence recorded its biggest decline in two years and factory output and home sales were weaker than expected. Added to that, was the 16-day fiscal shutdown.
"Taking into account the extent of federal fiscal retrenchment over the past year, the committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy," the FOMC said.
US Treasuries erased gains, with the benchmark 10-year bond rising 2.4 basis points to 2.48 per cent and gold futures rose 0.5 per cent.
US stocks fell after the statement, which underlined the weak state of the US economy. The Dow Jones Industrial Average fell 0.5 per cent to 15595.44 and the Standard & Poor's 500 Index fell 0.8 per cent from a record to 1759.14. The Nasdaq Composite fell 0.4 per cent to 3938.06.
On Wall Street, LinkedIn dropped 8.1 per cent after its quarterly sales outlook missed analyst estimates. General Motors rose 3.2 per cent after the largest US automaker posted third-quarter profit that beat estimates.
US companies added 130,000 workers in October, missing the forecast in a Bloomberg survey of 150,000 and down from 166,000 in September, according to the ADP Research Institute.
Inflation in the US edged up as expected. The consumer price index rose 0.2 per cent in September, Labor Department figures showed. The core measure of inflation, which strips out food and fuel, rose 0.1 per cent.
Among European companies, Paris-based L'Oreal SA, the world's biggest cosmetics maker, posted a 0.8 per cent decline in sales to 5.48 billion euros, missing estimates, on a weaker performance in North America.
One of Europe's weakest economies, Spain, emerged from a two-year recession in the third quarter, growing 0.1 per cent, while inflation ebbed. That marked the first quarterly growth since the start of 2011.