Fed's Olson expects solid growth from US economy

"For the fourth quarter, most observers expect that growth will be in the 4-1/2 to 5 percent range ... the sense is that moving into the first quarter of 2004, that growth at rate in the economy probably will continue," Olson told the Charlotte Economics Club.

He also said the weak December payrolls report of just 1,000 new jobs, versus forecasts for 130,000, had been unexpected, but he did not shift his view that the outlook for employment was encouraging.

"Particularly over the holiday season, there can be some noise in those numbers," he said. "While the (December) numbers were a surprise to the downside, I would say let's look at both December's and January's numbers before we draw a conclusion."

"We are finding clear indications of economic recovery. But with both the output gap and the employment gap indicating slack in the economy, we are not yet noting evidence of inflationary pressures," he said.