NEW YORK, (Reuters):
PRIVATE-SECTOR economists cut their forecasts for United States growth in 2005 compared with three months ago, a Federal Reserve Bank of Philadelphia survey showed on Monday, but the economic outlook remains robust.
In its quarterly Survey of Professional Forecasters, the bank said the 46 economists surveyed now expect real gross domestic product (GDP) will grow 3.4 per cent on a year-on-year basis in 2005, down 0.2 percentage point from the previous survey's estimate.
However, it is said much of the slowing will occur during the first half of the year, with the second half of 2005 now looking stronger.
"The forecasters overestimated the strength of growth in the first quarter, and they have now marked down their projection for second-quarter growth to 3.0 per cent from 3.7 per cent in the last survey," the Philadelphia Fed said.
The respondents now see third-quarter growth of 3.5 per cent, up from their previous projection of 3.3 per cent, and 3.4 per cent in the fourth quarter, unchanged from February.
"The survey is relatively sanguine on the economic outlook and that is my view as well," said Mark Zandi, chief economist at Economy.com in West Chester, Pennsylvania.
"Businesses are flush and slowly but surely they are deploying their capital. There is some risk, notably in higher energy prices, but the economy is pushing forward," said Zandi, who participated in the poll.
U.S. crude oil futures were trading around $48 yesterday, well below the year's peak above $58 per barrel, but still at levels which could pinch consumers and businesses.
