"Persistent weakness" in the housing market and the downside risk of further price declines is one of the major factors cited by the Federal Reserve's monetary policy committee for the slowdown in the pace of the economic recovery in recent months.

The slowdown also reflects the "ongoing efforts by some households to reduce debt burdens, the recent sluggish growth of income and consumption, and the fiscal contraction at all levels of government," according to the minutes of the Federal Open Market Committee's (FOMC) meeting of June 21-22.

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