• Return to previous page.

Text size:

Printable Version

BNA Economic Outlook Panel Says Growth to Continue in 2006; Strongest in First Six Months

NEWS RELEASE

Contacts:
Karen James Cody,
BNA - Press Contact

Washington, DC (January 2, 2006) – Economic growth is likely to slow slightly in the United States while holding steady or improving in most other industrialized economies, according to a group of 23 economists surveyed for BNA's annual Economic Outlook. Inflation should ease as energy costs stabilize after retreating from record highs in 2005. Possible threats to growth include a surge in energy prices or interest rates and a collapse of the U.S. housing market. The analysts believe that:

U.S. Economy

Key underpinnings of the economy will be consumer spending, business investment, and government funding for disaster recovery and the war on terrorism.

Larger trade and budget deficits will exert downward pressure.

Labor Markets

A gain of more than 2 million payroll jobs will lower the unemployment rate to 4.9 percent.

Hurricane rebuilding will boost construction and related employment during the first half of 2006.

Payroll growth will remain steady at 190,000 jobs per month in the first half, slowing to 173,000 in the last half of the year.

Monetary Policy

The overall inflation rate should cool as oil prices stabilize, although core consumer prices may be higher.

Economists see a sizeable risk that the Fed will “overshoot” as it tightens policy.

World Economy

The U.S. will remain the growth engine, but the economies of Japan and Europe will improve, growing around 2 percent.

While the U.S. central bank will come to the end of its interest rate-raising cycle, other central banks are expected to start or continue on their own.

The 23 economists surveyed for the BNA study are from financial institutions, consulting firms, and academia. They were surveyed between November 28 and December 9, 2005.

For press copies of the full report, or to interview BNA co-authors Diana Gregg, Brett Ferguson, or Larry Swisher, contact Karen James Cody at (202) 452-4169.

# # #

BNA is a leading publisher of news and analysis for professionals in business and government. Reporting from Washington, D.C. and the state capitals for more than 75 years, BNA is the oldest wholly employee-owned company in the United States.