Federal Reserve Bank of St. Louis President William Poole said the American economy is “robust” as commercial construction picks up slack from a slowing housing market that may otherwise threaten the expansion.

“I have emphasized the strength of business construction, which is going gangbusters in many parts of the country,” Mr. Poole told reporters after a speech in Boston today. “The economy is really not fragile. It’s robust.'”

The comments came at a conference held by an economists’ group, which released a survey today showing respondents saw a 25% chance of a recession next year.Fed policy makers last month suspended a two-year streak of 17 interest-rate increases, betting that a slowing economy will help reduce a rate of inflation that has run above officials’ comfort level.

“It tells you something about the plans in the corporate world, the confidence in the future,” said Mr. Poole, who hasn’t been a voting member of the rate-setting Federal Open Market Committee this year. “You don’t start those projects if you think the economy is going to tank next year.”

Such investment doesn’t necessarily preclude “a weak quarter or two,” Mr. Poole told reporters at the National Association for Business Economics event.

Futures trading suggests investors see little chance the central bank will raise interest rates again this year after leaving the benchmark U.S. rate at 5.25% on August 8.

Mr. Poole, 69, said in his speech that greater clarity can enhance the public’s understanding of the Federal Reserve’s employment and inflation goals, and the central bank has “room to improve” communication.

“I do not believe that uncertainty about the Fed’s inflation objective is a large issue at present, but do believe that there is an opportunity to improve clarity,” Mr. Poole said.

“Credibility is essential to the stability of longer-term inflation expectations.”

Cathy Minehan, 59, president of the Fed’s Boston district bank, said in a separate speech at NABE earlier today that “growth of demand will roughly match that of aggregate supply, and lead to little change in unemployment.” Inflation should “subside slowly” she said, so long as oil prices stabilize.

“A key risk is that inflation will continue to rise or persist at high levels and embed itself in consumer and business plans,” she said. “Managing that risk is clearly important, and a matter about which central banks need to be quite vigilant — as I believe the FOMC has been and will continue to be.”

The core personal consumption expenditures price index, which excludes food and energy, rose 2.4% for the past 12 months ending July, and at a 2.7% annualized rate over the past three months. Those rates are above the comfort zone of policy makers who have specified a numeric inflation goal, including Fed Chairman Ben S. Bernanke.

“If I didn’t see any sign that we were making progress working it down, I wouldn’t want to wait 18 months” to raise interest rates again, Mr. Poole told reporters today. In July, Fed policy makers forecast, on average, that the core PCE will rise by 2% to 2.25% in the fourth quarter of 2007 from a year earlier.

American home price growth slowed during the second quarter from a year earlier, rising an average 1.17% versus 3.65% in the same period in 2005.

“An even larger downside could result if nominal home prices actually decline, rather than flatten out as projected,” reducing household wealth and spending, Mrs.Minehan said.”However, I continue to think the best guess is that consumption will moderate, not collapse, as the result of cooling housing markets.”

Mrs. Minehan has never dissented from a rate vote since joining the Federal Open Market Committee 12 years ago. Mrs. Minehan has spent her entire career in the Fed system, starting at the New York Fed in 1968. She moved to the Boston Fed in 1991 and became its president in 1994.

Mr. Poole joined the St. Louis Fed as president in 1998. Previously, he was an economics professor at Brown University in Providence, Rhode Island, and a member of the Shadow Open Market Committee, a panel of economists who have traditionally favored keeping inflation close to zero. He has twice dissented from FOMC votes.

“We have evidence that the economy is slowing,” Mr. Poole said in an interview with CNBC today.”It looks like inflation is under control. Whether rates will need to go up more or not remains to be seen based on the arrival of new information.”

Mr. Poole told CNBC that “my own view is that the emphasis on housing is a bit overdone. If you look at housing as a fraction of total employment, it’s about 2.5%.”