White House Predicts 2.7% Growth in 2008

Nov. 29, 2007
Says credit problems 'haven't made it into the real economy' so far

The 2.7% pace "is a good solid growth rate, especially in that we have been hit with a pretty strong decline in the housing market," said Ed Lazear, chairman of the Council of Economic Advisers.

The forecast is more optimistic that the outlook from many private economists and the latest revised projections from the Federal Reserve, which earlier this month cut its outlook for gross domestic product growth to a range of 1.8% to 2.5%.

The White House however "projects continued solid economic growth and labor market performance," according to a statement from the president's Council of Economic Advisers.

Lazear said the housing slump "has been more pronounced than we had expected" earlier this year, accounting for much of the downward revision. He said another factor was a lower revised estimate of growth in previous years, suggesting overall productivity would be lower than anticipated. But Lazear said the highly publicized credit problems "have not made it into the real economy" so far. That is because companies "still have plenty of cash flow, so they still have cash in order make investments," he said.

A Commerce Department report released earlier on Nov. 29 showed the economy surged at a revised 4.9% pace in the third quarter despite the impact of credit and housing ills. But many economists see a much slower pace and some say a recession is possible in the coming quarters.

"While the difficulties in housing and credit markets and the effects of high energy prices will extract a penalty from growth, the U.S. economy has many strengths and I expect the expansion to continue," said Treasury Secretary Henry Paulson . "The U.S. economy remains broadly healthy -- the unemployment rate is low, core inflation is contained, and strong foreign growth is boosting exports."

Copyright Agence France-Presse, 2007

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!