The near-term projection for the U.S. economic growth was expected to outpace the first half of this year due to the recent positive data on consumer spending and business outlays, but a string of medium-term headwinds would stay in place, the U.S. Federal Reserve said Tuesday.

The near-term U.S. economic growth would be on a stronger footing, but other important indicators of economic activity including consumer confidence and labor market conditions remained downbeat, the central bank said in the minutes released on Tuesday of a Federal Open Market Committee (FOMC) meeting held earlier this month.

The U.S. economy was expected to expand by 1.6 to 1.7 percent in 2011 and 2.5 percent to 2.9 percent in 2012, the U.S. central bank said in its updated projection.

The pace was lower than its earlier prediction as a set of factors weighing on U.S. economic recovery still remained. The Fed forecast in June that the world's largest economy would grow by 2. 7 percent to 2.9 percent in 2011, and 3.3 percent to 3.7 percent in 2012.

"Many of the factors that have been restraining the recovery, such as the large overhang of vacant houses, tight credit conditions, and elevated risk premiums, remained in place," noted the minutes of the FOMC, the Fed's interest rate policy making body.

In a separate report released Tuesday by the Commerce Department, the U.S. economic growth rate was downwardly revised to an annual rate of 2 percent in the third quarter of this year from the previous reading of 2.5 percent, due to a lower estimate for business investments, consumer spending and government expenditures.

The growth pace in the July-September period was an acceleration from 1.3 percent in the second quarter and 0.4 percent in the first quarter, and it helped tame investors' recession worries.

However, the subpar economic growth pace was not strong enough to put a dent in the painfully high unemployment hovering at 9 percent.

In a campaign-style speech made in New Hampshire, U.S. President Barack Obama Tuesday called on both Republicans and Democrats to boost investments on key areas including education and manufacturing to spur economic growth and create more jobs, after a high-profile bipartisan debt reduction panel failed to produce a proposal Monday.

"It's going to take time to rebuild an economy that's not based on outsourcing or tax loopholes or risky financial deals, but one that is built to last, where we invest in education and small business and manufacturing and making things that the rest of the world is willing to buy," Obama said.

Obama urged Congress to vote next week to extend the payroll tax cuts policy that was set to expire at the end of this year, stating the extension could give about 1,000 U.S. dollars to every typical U.S. household.

VietNamNet/Xinhuanet