Economists at Merrill Lynch & Co., New York, believe the U.S. housing sector is now in recession and is lowering its GDP growth forecast for the second half of 2006 and all of next year.
Merrill now believes the U.S. economy will grow at an inflation-adjusted annual rate of just 2% during the second six months of this year. Previously the financial services had projected a 2.5% rate.
For 2007, Merrill now expects real growth of 1.8%, half a percentage point below its earlier forecast of 2.3%.
