White House lowers US economic growth forecast

06 June 2007 22:12  [Source: ICIS news]

HOUSTON (ICIS news)--The White House lowered on Wednesday its projected growth rate for the US economy for this year.

Because growth in the first quarter was so slow, the US president's Council of Economic Advisers said the US gross domestic product will grow by 2.3% in 2007, down from an earlier forecast of 2.9%.

The rate is nearly a percentage point lower than last year's growth rate of 3.1%. The council's economic forecast resembled those made by the Manufacturers Alliance.

The updated forecast predicts that the economy will add 131,000 jobs per month, and the unemployment rate will remain at 4.5%.

The forecast predicts that overall inflation will be higher due to higher energy prices. However, once the forecast removes volatile food and energy prices, inflation should remain moderate.

The administration said it expects that interest rates will remain unchanged.
By: Al Greenwood
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