White House Lowers Economic Growth, Citing Weak Housing Market

The U.S. government cut its economic growth forecasts through 2008 on Tuesday, citing the weakness of America’s housing market. In an updated economic forecast, the administration said it expects inflation-adjusted GDP to increase 3.1% this year, down from its June forecast of 3.6%. GDP growth is firther expected to slow to 2.9% in 2007, down from its previous estimate of 3.3% (WSJ). In 2008, the government sees growth of 3.1%, slightly lower than its prior estimate of 3.2% Economy 2006

GDP : 3.6%
Inflation: 2.3%
Unemployment: 4.6%

Te White House lowered its 2006 estimate for inflation, and expects  consumer-price-index growth of 2.3% vs. its June forecast of 3%. In 2007 and 2008, however, the administration upped its inflation estimates to 2.6%, compared with its prior forecast of 2.4%.

The White House expects the economy to add about 129,000 jobs a month going forward. The unemployment rate in 2006 is estimated to an average 4.6%, down from the previous 4.7%. The unemployment will remain at 4.6% in 2007 and rise to 4.8% in 2008.

In another data release, The Labor Department reported that in the week ending Nov. 18, initial jobless claims increased 12,000 to  321,000. The 4-week moving average was 317,000, an increase of 3,000 from the previous week's revised average of 314,000

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