WASHINGTON, July 26: There is little hard evidence that a US economic rebound is underway, Richmond Federal Reserve President J Alfred Broaddus said Friday, saying he sees a “mixed picture” in the economy.

Although there are a few signs that the recovery may be gaining strength, overall economic data still are unclear, Broaddus told a meeting of executives of the Independent Banks of South Carolina.

Focusing in a little more closely on developments during the last several weeks, it has been a really mixed picture, he said.

Broaddus said that recent signs of pickup in consumer confidence and factory output were offset by the recent rise in the unemployment rate.

He said that improvement in the labor market was a key to economic recovery. Although the drop in weekly jobless claims on Thursday was encouraging, he said more data are needed before there could be confidence of a firming in the job market.

To sum up on the current state of the economy, there are a few signs in the recently released data that the recovery may be gaining strength, he said.

But in my view there is not much hard evidence that this is happening yet — certainly no compelling evidence of the pronounced post-Iraq-war boost to activity that many people, myself included, had anticipated.

Broaddus also said this is one of the most difficult economic pictures the Fed has ever had to evaluate. He repeated that deflation was not an immediate threat and said the Fed has effective strategies to prevent further disinflation from developing.

I don’t see deflation as an immediate threat, he said. At the same time, though, I think it is appropriate and important to assure the public — which after all has not experienced deflation for over a generation — that we at the Fed are aware of the downside as well as the upside risks associated with price stability, that we have studied these risks, and that we know how to approach them if we ever need to. —AFP