Bush Advisers Lower Economic Growth Forecast to 2.30% This Year

June 6 (Bloomberg) -- The Bush administration today lowered its forecast for economic growth in 2007, reflecting slower growth in the first quarter of the year.
Gross domestic product will grow 2.3 percent this year, the White House said. That's lower than the 2.9 percent growth it predicted six months ago.
The White House's revision reflects the slowdown in economic growth to the weakest pace in four years in the first three months of the year. The new projection brings the administration closer to the consensus of other forecasters. The International Monetary Fund in April cut its 2007 U.S. growth prediction to 2.2 percent, from 2.9 percent.
The updated forecasts show slightly higher monthly payroll job growth and a lower unemployment rate. The economy will add 131,000 jobs per month in 2007 and the unemployment rate will remain at a 4.5 percent average for this year.
``Unemployment remains remarkably low, business inventories are lean compared with sales, and now industrial production is on the rise,'' Edward Lazear, chairman of President George W. Bush's Council of Economic Advisers, said in a statement.
The U.S. economy grew last quarter at the slowest pace in more than four years, a 0.6 percent annual rate that may prove to have been the low point of the expansion. Economists have said that spending may slow as record gasoline prices and falling home values pinch consumers.
Treasury Secretary Henry Paulson, in a statement accompanying the CEA report, said he's ``encouraged'' by the economy's ``solid underlying fundamentals.''
``This forecast shows strengthening growth, a healthy job market and contained inflation,'' Paulson said.
The median forecast of 65 economists surveyed by Bloomberg News last month was for a 2.1 percent increase in gross domestic product this year.
Inflation as measured by the consumer price index will be 3.2 percent this year and the yield on 10-year Treasuries will average 4.8 percent in 2007, lower than the 5 percent forecast six months ago, the report said.