Economists cut growth forecast

WASHINGTON - A TOP panel of economists yesterday cut their forecast for the United States' economic growth this year, citing a lower outlook for capital spending, residential investment and business inventories.

The Blue Chip Economic Indicators panel of forecasters said they expect US gross domestic product to expand at a rate of 2.3 per cent this year, the slowest growth since 2002.

The group had predicted growth at a rate of 2.5 per cent last month.

Also of concern to the forecasters were signs that growth in the massive services sector was slowing.

The panel forecast the unemployment rate at 4.7 per cent this year and 4.8 per cent for 2008. The Labour Department last Friday said the unemployment rate fell to 4.4 per cent last month from 4.5 per cent in February.

The Blue Chip survey was done before the jobs data was released.

Seventy-one per cent of the forecasters said they believe the next move by the Fed will be an easing of monetary policy, while only 24 per cent of the economists bet that a US recession would begin within the next 12 months.

REUTERS