Global Insight Lowers U.S. GDP Forecast

ByJohn S. McClenahen Waltham, Mass.-based Global Insight has lowered its projection of second-half real GDP growth in the U.S. to 3.9% from 4.8%. "Every sector [of the economy] except government and construction contributes to the weaker outlook, but consumer spending is by far the major source of the revision," says the economic forecasting firm. It notes that interest rates are rising, tax cuts are past tense and oil prices are above $40 per barrel. Yet Global Insight insists it has not given up on consumers. "The forecast assumes no major consumer retrenchment, merely spending growth roughly in line with income growth in the near future, and a little slower than income growth over the longer term."