The language was slightly more upbeat than the words the Fed employed after its last meeting in December, when it said the recovery had been insufficient to lower unemployment at all. The government has since reported that the jobless rate fell to 9.4 percent last month from 9.8 percent in November.
The US dollar slipped and prices for US government rose on the statement, while stocks held gains. US interest rate futures showed traders paring bets that the central bank would start raising overnight interest rates this year.
"The statement doesn't acknowledge the uptick in US economic data that we've seen over recent weeks to the extent that we had expected that it would," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
Along with a decision to leave its interest rate target near zero, the Fed reiterated the target would likely stay ultra-low for an extended period.
No Fed officials dissented. Financial markets had been watching closely for any dissent given a new lineup of Fed voters that includes two vocal inflation hawks.
The Fed cut rates to near zero in December 2008 and bought USD 1.7 trillion in longer-term securities to provide an additional boost to the economy and battle deflation risks.
After the recovery appeared to falter in mid-2010, the central bank launched a new program to buy USD 600 billion in US government debt to drive borrowing costs down further in the hope of lowering an unemployment rate stuck near 10 percent.
The Fed's statement made clear policymakers remain concerned about the headwinds confronting the recovery.
"Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit," the Fed said.
Fed officials brought fresh economic forecasts to the table this week, but they will not be made public until February 16.
The US economy is expected to have expanded by a reasonably robust 3.5 percent annual rate in the fourth quarter after growing at a 2.6 percent pace in the July-September period. Similar vigor early in the new year may make the case for an ultra-accommodative monetary policy harder to sustain, even if unemployment remains relatively high.
Low levels of inflation outside of food and energy costs had spurred worry at the Fed about a vicious cycle of falling prices and declining spending and investment, but the brighter economic signs have left Fed officials breathing easier.
"We're seeing some improvement in the labor market. I think deflation risk has receded considerably. And so we're moving in the right direction," Fed Chairman Ben Bernanke said on January 13.