Federal Reserve officials came closer to agreement on an exit strategy from aggressive stimulus, while raising the possibility that it might occur sooner than anticipated, according to minutes of their July meeting.

“Many participants noted that if convergence toward the committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated,” the minutes said.

Fed Chair Janet Yellen has committed monetary policy to stronger labor markets, which she measures with an array of indicators, so long as inflation remains in check. The minutes said “many participants” still see “a larger gap between current labor market conditions and those consistent with their assessments of normal levels of labor utilization.”

In their post-meeting statement last month, Fed officials downplayed recent declines in the unemployment rate highlighting “significant underutilization of labor resources.”

Still, the minutes showed policy makers anticipating further labor-market strength.

“Many members noted, however, that the characterization of labor market underutilization might have to change before long, particularly if progress in the labor market continued to be faster than anticipated,” the minutes said.

Jackson Hole

Yellen will speak on labor markets Aug. 22 at the Kansas City Fed’s annual economic symposium at Jackson Hole, Wyoming.

The Federal Open Market Committee in July continued cutting the monthly pace of asset purchases, reducing it by $10 billion for a sixth straight meeting, to $25 billion. Bond buying has boosted the central bank’s balance sheet to a record $4.43 trillion.

Weak wage growth and low inflation have given the Fed room to keep interest rates near zero in a bid to bolster further progress in the labor market. Average hourly earnings rose 2 percent in July from the year before, matching the mean increase over the past five years and down from 3.1 percent in the year ended December 2007, Labor Department data showed in the latest employment report.

Employers added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997, according to the report. The jobless rate climbed to 6.2 percent as more people entered the labor force in search of work, after falling 0.6 percentage point during the first half of the year.

Fed officials also said in the statement that “economic activity rebounded in the second quarter” and “the likelihood of inflation running persistently below 2 percent has diminished somewhat.”

The Fed’s preferred inflation gauge, the personal consumption expenditures index, rose 1.6 percent in June from a year earlier. The increase was just 1 percent in February.

Another measure, the consumer price index, rose 2 percent in July from a year earlier, following a 2.1 percent advance the prior month, according to Labor Department figures released yesterday.