WASHINGTON, Sept 8 (AFP) - The US economic expansion "has regained some traction" after a soft patch earlier this year, Federal Reserve Chairman Alan Greenspan said Wednesday.
In an upbeat assessment, the central bank chief said the economy appears to be weathering a slowdown most likely related to the steep rise in oil prices.
"The most recent data suggest that, on the whole, the expansion has regained some traction," he said in remarks to the House of Representatives Budget Committee.
He said consumer spending and housing starts have "bounced back" in July after a tepid performance in June and business investment "remains on a solid upward trend."
One possible weak area, according to Greenspan, was the retail sector, citing early readings in August that "have been mixed."
In the labor market, he pointed out that "though job gains were smaller than those of last spring, nonfarm payroll employment growth picked back up in August."
Greenspan referred to "a soft patch in late spring" after strong growth in late 2003 and early 2004.
"That softness in activity no doubt is related, in large measure, to this year`s steep increase in energy prices," he said.
But he said that despite the sharp price increases for energy, overall inflation appeared in check.
"Despite the rise in oil prices through mid-August, inflation and inflation expectations have eased in recent months," he stated.
"Moreover, increases in non-oil import prices have lessened -- a development that, coupled with the slowing of profit-margin growth, has helped to lower core consumer price inflation in recent months."