Economic reports published Friday say the U.S. economy is likely to continue expanding over the next few months, while inflation is growing at a “modest” pace.

The consumer price index rose just two-tenths of a percent in January while the index of leading indicators found widespread signs of future growth.

These are the latest in a series of generally upbeat economic reports this week that show the labor market getting better as the number of layoffs drops. The battered housing market is improving a bit with a growing number of homes under construction.

A former high-ranking economist at the World Bank, Uri Dadush, says the U.S. economy is in a slow healing process. Dadush, who is now with the Carnegie Endowment for International Peace, tells VOA he is optimistic about the American economy in the long-term, because it is innovative and flexible.

Dadush says the two largest threats to the world's largest economy come from political bickering and gridlock in Washington, and the possibility that Europe's debt crisis could spread across the Atlantic. Europe is a major U.S. trading partner, and economic problems there lower investor confidence and hurt demand for U.S. goods.