Fed's Williams says seeing broader signs of wage growth

SANTA BARBARA, Calif. (Reuters) - U.S wage growth has been modest but recently there have been broader signs of growth, a top Federal Reserve official said on Friday.

John Williams, president of the San Francisco Fed, told the California Bankers Association in Santa Barbara he expects wage growth to rise to 3 percent to 3.5 percent as the jobless rate falls.

The U.S. job count surged in December, a report earlier on Friday showed, signaling the domestic economy is on a solid footing despite weak growth abroad.

Williams also said that while lower oil prices last year did not deliver the boost to the economy the Fed had predicted, consumers now view the decline as longer lasting and "we may see more of a kick" to spending as households use more of their extra funds.

He also said it will likely take five to six years for the Fed's $4.5 trillion balance sheet to shrink to about $1.5 trillion.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)

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