Washington, Dec 17 - The US Federal Reserve Wednesday kept interest rates at their historic low of near 0 percent and noted signs that the world's largest economy is recovering from recession.

The central bank's board said economic conditions "continued to pick up" since its last meeting in November but were likely to "remain weak for a time," indicating it would keep rates at their current low for some time.

It noted that "the deterioration in the labour market is abating," while consumer spending, which drives two-thirds of US economic output, has also begun to expand moderately despite ongoing restraints. Business are continuing to scale back, but at a slower pace, it said.

"Although economic activity is likely to remain weak for a time, the committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context

of price stability," the Fed said in a statement.

The Fed's benchmark federal funds rate has been kept at a record low of 0-0.25 percent since December 2008, part of an unprecedented effort by the central bank to revive the economy and stabilize the financial system.

The US economy grew at an annual rate of 2.8 percent in the third quarter of this year, the first positive growth period since the second quarter of 2008 and a sign it had emerged from the recession. But unemployment remains at a 26-year high, despite dipping in November to 10 percent from a high of 10.2 in October. (IANS)