Federal Reserve chairman Alan Greenspan has painted an upbeat picture of the US economy, at the same time as cautioning against the spiralling budget deficit.
Alan Greenspan is confident of continuing economic recovery
Presenting the twice-yearly central bank report, he predicted that the US economy will grow between 4% and 5% in 2004, up from previous estimates.
Yet he also warned that the country's vast - and seemingly ever-growing - budget deficit could pose a problem in both the short and long terms.
He called for more budget balance.
Mr Greenspan told a House of Representatives panel that the runaway budget deficit - a political hot potato in this year of presidential election - could create serious fiscal difficulties when the 'baby-boom' generation retires.
"The longer we wait before addressing these imbalances, the more wrenching the fiscal adjustment ultimately will be," he said.
"Such a development could constrain investment and other interest-sensitive spending and thus undermine the private capital formation that is a key element in our economy's growth potential."
But moving back to the immediate picture for 2004, Mr Greenspan was rather bullish.
"Looking forward, the odds of sustained robust growth are good, although as always, risks remain," he said.
Mr Greenspan added: "Last year appears to have marked a transition from an extended period of subpar economic performance to one of more vigorous expansion."
And while he admitted that "progress in creating jobs has been limited", he predicted this was about to change.