Washington  - The Federal Reserve said Wednesday that economic activity in the United States has picked up over the last few months and will continue improving through next year.

But the recovery will not be strong enough to lower unemployment, which currently sits at a 28-year high of 9.8 per cent, according to minutes of the central bank's last board meeting in September. The Fed sees unemployment dropping to 9.25 per cent by the end of 2010.

The economy was "projected to expand over the remainder of 2009 and 2010, but at a pace that was unlikely to reduce the unemployment rate appreciably," the US central bank said.

Yet the Fed said most members agreed that "an economic recovery was underway." They raised growth projections for the coming year, though no new numbers were released. The US central bank's last projection in June was for growth of between 2.1 per cent and 3.3 per cent in 2010.

The central bank warned that the US economic future was uncertain and recovery likely to be "quite restrained," especially as a 787- billion-dollar government stimulus package passed earlier this year begins to wear off in 2010.

The United States has been mired since December 2007 in its longest recession since the Great Depression of the 1930s.  dpa