UPDATE 1-Fed's Plosser-US potential growth rate has likely been lowered
(Adds more Plosser comment, background)
SAN DIEGO, Jan 4 (Reuters) - Philadelphia Federal Reserve President Charles Plosser said on Friday that the United States had likely suffered a lasting decline in the trend potential growth rate of its economy, as a result of the severe 2007-2009 U.S. recession.
"Any of you who have looked at the data of the most recent ... recession, it certainly looks like we've had a permanent shock," he told a panel during the annual meeting of the American Economic Association. "The problem is we won't know the answer to that for many years to come," he said.
Fed Chairman Ben Bernanke has also recently voiced the possibility that the harm done by the recession might have trimmed U.S. growth potential, which gauges how fast the economy can grow over time without hitting inflationary speed-bumps.
Plosser is one of the more hawkish members of the Fed's policy-setting committee, who has warned about the inflation risks posed by the U.S. central bank's current aggressive policy to spur the country's growth.
"No doubt what will happen over time is you'll go back and see...(economists) revise and change their estimates of potential GDP (gross domestic product), we'll find those things falling down and historically it will look like it was a return to trend. But in fact it was the trend that changed," he said.
Hawks warn a decline in the rate of U.S. trend potential growth means the Fed ought be careful in trying to push the economy to grow much faster.
The Fed last month voted to maintain mortgage-backed and Treasury bond purchases at an $85 billion monthly pace, and to keep expanding its balance sheet through this policy of so-called quantitative easing until it saw a substantial improvement in the outlook for the labor market.
Data earlier on Friday showed that U.S. unemployment remained stuck at the historically high rate of 7.8 percent in December. The Fed has also committed to hold interest rates near zero until unemployment declined to 6.5 percent, provided inflation remained beneath 2.5 percent.
(Reporting By Alister Bull; Editing by Chizu Nomiyama; Editing by Chizu Nomiyama)