DRI/WEFA Is Cautious About U.S. GDP Growth

By John S. McClenahen Even as some other economic forecasters -- such as Merrill Lynch & Co. and UBS Warburg LLC -- are raising their estimates of GDP for the calendar quarter that ends next week, Lexington, Mass.-based DRI/WEFA is cautious. It's estimating third-quarter GDP growth at just 2.6%, compared with the 3% -- or higher -- estimates of the others. "Over the next several quarters, growth will be held back by weak investment," DRI/WEFA says in its latest forecast report. "At the present time, a considerable amount of capital sits idle; more is not being used to capacity," its economists say. Nevertheless, the forecasters believe that the U.S. economic recovery from the 2001 recession "still has legs." They state: "Consumers are spending a bit more cautiously than earlier in the year, and businesses see little reason to hire or invest, but the story is one of slower progress, not relapse into recession."

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