US economy will grow 3.4 percent this year: expert

Despite higher-than-expected oil prices, the US economy should grow 3.4 percent this year as projected in December, the Wall Street Journal cited a White House top economist as saying on Wednesday.

"We are in the midst of a healthy and sustainable economic expansion," Ben Bernanke, the new chairman of President Bush's Council of Economic Advisers, said in a speech to the American Enterprise Institute.

He said that the economy should post solid growth this year, with inflation remaining low and job growth continuing at its current pace.

Payroll-employment growth has averaged 181,000 a month this year, "in line" with the administration's recently revised forecast of a monthly average of 178,000 for the year as a whole, Bernanke said.

Moreover, wage growth has been "revised upward substantially, raising the possibility that the labor market may be even stronger than we thought."

About the budget deficit, Bernanke said "higher-than-expected levels of tax collections" should bring this year's budget deficit to below the 427 billion dollars projected earlier this year.

Bush's tax cuts have helped spur economic growth and thus tax receipts, he said. The administration is scheduled to release updated projections for the budget deficit on Wednesday.

Ben Bernanke is a former Federal Reserve (Fed) governor and has been considered a candidate to succeed Fed Chairman Alan Greenspan, whose term at the central bank ends in January 2006.

Source: Xinhua