WASHINGTON (Reuters) - St. Louis Federal Reserve President Alberto Musalem said on Monday he expects the U.S. economy to continue to expand this year, but recent weaker-than-expected consumption and housing data and reports from business contacts have raised concerns about possible risks to growth.

"The outlook for continued solid economic growth looks good, the labor market is healthy, and financial conditions are supportive. But recent data have been weaker than expected,

especially consumer spending and housing market data, posing some downside risk to growth," Musalem said in comments prepared for delivery to a National Association for Business Economics conference.

"Recent anecdotal reports from business contacts are more mixed, and some measures indicate that business activity has slowed, suggesting increased caution at least among some firms," he said.

"While I continue to expect the economy to grow at a good pace in coming quarters, I would become concerned if we begin to see more evidence of a consumer pullback or a dampening of business confidence and investment plans," Musalem said.

For now, however, he said he views current monetary policy as "modestly restrictive," an appropriate setting given inflation remains above the Fed's 2% target.

"More monetary policy work is needed to achieve price stability," said Musalem, endorsing the U.S. central bank's current "patient" approach to further changes to its benchmark policy rate.

Recent data showed personal consumption spending declined unexpectedly in January. Coupled with inflation that has been only slowly improving, some Fed officials have begun raising the possibility that their two aims of controlling inflation and maintaining maximum employment may come into conflict.

The Fed is expected to hold its policy rate steady in the current 4.25%-4.50% range at its March 18-19 meeting, with officials hoping for more confirmation that price pressures are easing, and awaiting more detail on the possible impact of Trump administration trade and other policies.