US Federal Reserve chairman Mr Alan Greenspan said on Wednesday the evidence indicates that the US economy had climbed out of its recent soft patch and was picking up steam.
"The most recent data suggest that, on the whole, the expansion has regained some traction," Mr Greenspan said in testimony prepared for delivery to the House of Representatives Budget Committee.
The central bank chief said consumer spending and housing starts had rebounded in July and that business investment remained on a solid upward trend, but he noted early readings on retail sales in August have been mixed.
Mr Greenspan said surging oil prices do not appear to have inflicted lasting damage on the inflation picture. "Despite the rise in oil prices through mid-August, inflation and inflation expectations have eased in recent months," he said.