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U.S. economy is growing fast but not in danger, Fed says

The economy probably is growing as fast as it can without crossing into the area where inflation becomes a danger, Alice Rivlin, the vice chairwoman of the Federal Reserve Board, said Tuesday.

"There are no clear signs of overheating yet,' Rivlin told a conference sponsored by the Federal Reserve Bank of Cleveland.Nor is there any sign that the nation's economic expansion, now in its seventh year, is running out of steam, Rivlin added. The former White House budget director suggested that the current mix of high employment, low inflation and increased productivity means the economy has become more flexible.

"People move to jobs, and jobs move to people,' she said. That combination creates opportunities for workers and incentives for firms to increase training.

"The payoff will be in higher skills, more productivity and higher pay in the long run."

That said, Rivlin emphasized that the central bank would continue to monitor the economy for early indications of overheating that could lead to inflation.