Forecast: Real Consumer Outlay Growth Near Zero This Quarter

Global Insight, a Waltham, Mass.-based economic forecasting firm, expects that growth in consumer spending, adjusted for inflation, will slow to two-tenths of a percentage point during the current calendar quarter. The culprit: high energy prices.

The forecasting firm expects that the retail price of gasoline will be about $2.50 a gallon at yearend, down from post-Hurricane Katrina prices above $3.00 a gallon. However, during the current calendar quarter and the first quarter of 2006, consumer energy prices will average 25% higher than the year before, led by a 48% price increase for natural gas, predicts Global Insight. Energy costs, it figures, will take 6.1% of disposable income this winter, compared with 5.2% last winter.

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