WASHINGTON Federal Reserve officials know what they are doing when they adjust interest rates even though government economic statistics are often flawed, Fed chairman Alan Greenspan told a House subcommittee yesterday.

"Recognizing that economic understanding is imperfect and measurement is imprecise is not a reason to despair about conducting monetary policy," Greenspan said in an unusual appearance before the Government Operations Committee's subcommittee on consumer and monetary affairs. "Imprecision in published data on the macroeconomy does not pose a crippling hardship."

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