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Friday, October 29, 1999 Published at 07:42 GMT 08:42 UK

Business: The Economy

Greenspan issues growth warning

American consumers are making imports rise

US Federal Reserve chairman Alan Greenspan has warned of the risks of rapid growth to economic expansion.

He said expansion could be jeopardised if growth continued to eclipse increases in both productivity and the pool of available workers.

Mr Greenspan said: "The growth in gross domestic product cannot exceed the sum of growth in structural productivity and in the working-age population indefinitely.

[ image: Alan Greenspan: inflation fears]
Alan Greenspan: inflation fears
"Market pressures must eventually emerge that work to contain such unsustainable growth."

He warned that a levelling-off in the pace of worker productivity growth combined with ever-tightening labour markets could spark a rise in inflation.

Earlier, the Commerce Department reported that the US economy had expanded at an annual rate of 4.8% in the third quarter, surpassing expectations of a figure of 4.5%.

But at the same time, three measures of inflation showed that upward price pressures remained well in check.

Greenspan also expressed concern about US consumers' voracious appetite for goods and services.

Rising consumerism could eventually push up inflation, he warned.

The extra demand could be met either through increased imports or by drawing on increased immigration to boost the labour pool, he said.

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