Lockhart says U.S. economy in need of Fed stimulus

Fri Nov 16, 2012 4:10pm EST

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Nov 16 (Reuters) - The U.S. labor market has provided some hopeful signs in recent months, but is far from full health and the economy will likely need "aggressive" support from the Federal Reserve for some time, a top Fed official said on Friday.

"I expect that continued aggressive use of balance sheet monetary tools will be appropriate and justified by economic conditions for some time even if fiscal cliff issues are properly addressed," said Atlanta Federal Reserve Bank President Dennis Lockhart.

He said that his base case was for the economy to grow only modestly above a 2-percent trend, adding that his forecast did not take into account the downside risks posed by the $600 billion "fiscal cliff" of automatic tax hikes and spending cuts set to take hold early next year.

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