While price weakness continues to be a concern for the economy, other developments imply that a recovery is likely, although its timing remains unclear, Federal Reserve Chairman Alan Greenspan told Congress Wednesday.

"Looking ahead, the consensus expectation for a pickup in economic activity is not unreasonable, though the timing and extent of that improvement continue to be uncertain," Greenspan told the Joint Economic Committee. "The stance of monetary policy remains accommodative and conditions in financial markets appear supportive of an increased pace of activity."

Greenspan said recent reports on the labor market and industrial production were "disappointing," but noted they mainly reflected the outlook before the Iraq war. At this time, it isn't possible to "make a firm judgment" about the economy's health, he said.

The Fed chairman repeated a statement contained in the recent Federal Open Market Committee communique that a "substantial fall in inflation" would be "unwelcome." On the other hand, a fall in the price of oil since the end of the war is "another positive factor in the economic outlook."

Still, the jury is out about when a recovery will take hold.

"The economic information received in recent weeks has not, in my judgment, materially altered the outlook. Nonetheless, the economy continues to be buffeted by strong cross-currents," Greenspan said.

"Recent readings on production and employment have been on the weak side, but the economic fundamentals -- including the improved conditions in financial markets, and the continued growth in productivity -- augur well for the future period."

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