``The evidence accumulated over the intermeeting period confirms that spending is firming, and the labor market appears to be stabilizing,'' the Federal Open Market Committee said in a a statement after its meeting today. ``Business pricing power and increases in core consumer prices remain muted.''

The central bankers again separated the outlook for economic growth from their inflation forecast, as they have done since May, to say the risk of ``undesirably'' low price increases is a ``predominant concern for the foreseeable future.'' The FOMC said it can keep rates low ``for a considerable period'' without triggering faster inflation. Business borrowing is rising, according to some banks.

``We have a more optimistic outlook for loan growth for the balance of the year,'' said Dennis Hudson III, chief executive officer of Seacoast Banking Corp. of Florida, in an interview. Stuart, Florida-based Seacoast is the holding company for the First National Bank and Trust Company of the Treasure Coast with $1.3 billion in assets. ``Borrowing levels are very positive.''

Chairman Alan Greenspan and the 11 other voting members of the FOMC held the benchmark rate at the lowest since 1958. The full committee has 19 members. The FOMC's statement after its last meeting on Sept. 16 had characterized the jobs market as ``weakening.''

Bearing Fruit

The decision to leave policy unchanged was expected by all 99 economists surveyed by Bloomberg News. Treasuries erased their losses in New York after the Fed said a lack of inflation remains a concern, boosting speculation the bank will leave its interest- rate target at a four-decade low for much of 2004. The benchmark 10-year note rose about 1/2 point, pushing its yield down 7 basis points to 4.19 percent, at 3:18 p.m.

Cheaper borrowing costs for consumers and companies are beginning to bear fruit. Growth in the third quarter is estimated at the fastest in almost four years and corporate balance sheets are strengthening.

``Now the profits are really pouring in and that means more money available for investment and also for hiring people,'' said Robert Heller, a former Fed governor, in a televised interview with Bloomberg News.

Third Quarter

Gross domestic product likely rose at a 6 percent annual rate in the third quarter, based on the median forecast. Rising demand, led by an estimated 6.4 percent rise in consumer spending, helped the economy add 57,000 jobs in September, the first gain since January. The number of Americans collecting unemployment benefits fell to the lowest level since April for the week ended Oct. 11.

``We have begun to see some very early signs of a change in direction of payroll growth,'' Federal Reserve Governor Ben Bernanke told the Senate Banking Committee during his confirmation hearing Oct. 14.

The economy needs to add about 100,000 jobs a month to absorb new entrants into the labor force. Much of the lag in hiring has been due to higher levels of output per hour of work, or productivity, which rose at an average annual rate of 4.8 percent over the past eight quarters. That compares with the 1996- 2000 average of 2.5 percent.

Some economists including Greg Mankiw, chairman of President George W. Bush's Council of Economic Advisers, had said a 4 percent economic growth rate should be enough to help lower the unemployment rate, which stands at 6.1 percent.

Some Hiring

Companies including United Parcel Service Inc. have said they are getting ready to hire more workers, and the job market also may pick up with seasonal hiring. The New York-based Conference Board today said its consumer confidence index rose to 81.1 in October from 77 a month earlier, aided by the improved jobs outlook.

Even several months of stronger job growth is unlikely to make the Fed raise interest rates quickly because productivity growth is also keeping inflation low as firms produce more goods at the same or lower cost, economists said. The Fed's preferred inflation indicator, the core personal consumption expenditures index, has been flat, rising at a 12-month rate of change of 1.3 for four the past five months.

Rising productivity has also boosted corporate profits. Earnings for the 330 members of the S&P 500 that have reported quarterly results so far rose 21.6 percent, on average, according to Thomson Financial. That's the fastest pace since the first quarter of 2000.

Discount Rate

While some companies including General Motors Corp. are using the improved finances to help fund shortfalls in pension plans, economists said higher profitability will eventually pay off in rising incomes, stronger investment spending, and, eventually, stronger hiring.

The Bank of Canada's deputy governor, Sheryl Kennedy, said the U.S. economic expansion is ``taking place earlier, and will be stronger, than previously expected.'' Still, she said there are ``significant risks'' to the global economic outlook, including ``the sustainability of U.S. growth beyond mid-2004.''

One information-technology executive said today he's not ready to splurge. ``The economy is still not out of the woods yet, at least in the IT sector,'' said John Chen, chairman and chief executive of Sybase Inc., which makes database software to store and search for information. Chen said low interest rates aren't enticing him to borrow money for expansion. ``I have record cash. There's no reason to have debt.''

Also today, the Fed left the primary credit discount rate on loans to banks from the Fed system unchanged at 2 percent.

In recent years, the central bank has kept the discount rate within a half point of the overnight bank rate. On January 9, the Fed changed the cost of discount window loans. So-called primary credit, the loan rate for healthy banks, is now set at 1 percentage point above the fed funds rate, and secondary credit, a rate for distressed banks, trades at 1.5 percentage points over the overnight rate.