October 5, 2003	Sunday	Sha’aban 8, 1424

COLORADO SPRINGS (Colo), Oct 4: Federal Reserve Board Governor Mark Olson said on Friday there were enough good signs in the economy to make him optimistic about the US recovery.

Not all the signs are positive, but there are enough positive ones for there to be optimism, Olson told a conference of the Western Independent Bankers and the American Association of Bank Directors.

While America has struggled to fully recover from the 2001 recession, a report on Friday showed US payroll employment rose for the first time in eight months in September, surprising analysts who had been braced for more losses.

Olson said that while it was difficult to suggest a trend was developing based a single month of employment figures, the increase of 57,000 jobs in September at least gave a clear picture of the labor market because it was not distorted by one-off events.

When you have one month’s numbers, you question, ‘Is there some noise?’ or ‘Was there a holiday?’ But in this case it looks like a pure number for us, he said.

Olson noted that the economy grew in the second quarter at a more rapid rate than financial markets had expected, with business fixed investment improving and plenty of stimulus in the pipeline.

The government said last week that US gross domestic product grew at a 3.3 per cent annualized pace in the three months from April to June, up from an earlier reported 3.1 per cent rate. The pace of expansion was more than double the 1.4 per cent in each of the two preceding quarters and was the strongest since a 4 per cent advance in the third quarter last year.

GDP growth is widely predicted to accelerate to 4 per cent or higher in the third and fourth quarters, supported by a buoyant housing market and lean inventories, which imply businesses have more incentive to make new investments.

But corporate America has been reluctant to hire new workers, wanting more assurance the economy is growing strongly.

The market is still waiting to see new job growth, Olson said.

Olson also said he was still not feeling increased inflationary pressure, and he reiterated that the risk of deflation — or a general decline in consumer prices was “remote.”—Reuters