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White House economic adviser sees slow growth rate in late summer months

White House economic adviser sees slow growth rate in late summer months

The U.S. economy probably slowed considerably in late summer, reflecting a slumping housing market, a White House economic official said Thursday.
Allan Hubbard, director of the National Economic Council, predicted the pace of growth from July through September could range from 1 percent to 2 percent.
The Bush administration's fresh observations on the economy come with the election season in high gear, and a day before the president was due to appear at a FedEx Express facility in the Washington area to promote his economic policies. Voters' choices at the polls on Nov. 7 are likely to be shaped in part by how they are faring economically. The administration says Americans are mostly better off, while Democrats disagree.
Among those surveyed in an AP-Ipsos poll in early October, people trusted Democrats to do a better job of handling the economy than Republicans.
Hubbard spoke in stark terms about the "big choice" before voters on Election Day and took several shots at Democrats in advance of Bush's event Friday, which was billed as official and not political.
"For them to talk about that they are going to provide fiscal responsibility _ more fiscal responsibility than the president _ is absolutely ridiculous," Hubbard said of the Democrats.
The government will release its first estimate of economic growth for the third quarter on Oct. 27.
The National Association for Business Economics is forecasting that the economy will expand at a 2.6 percent rate in the third quarter. But other economists think the growth rate will be closer to 1 percent, the low end of Hubbard's prediction.
The magnitude of the economy's slowdown will hinge in large part on how much altitude the once high-flying housing market loses.
Federal Reserve Chairman Ben Bernanke on Wednesday said a "substantial correction" was taking place in the housing sector. He estimated the housing slowdown would trim about 1 percentage point off economic growth in the second half of this year.
But the fallout from the cooler housing market should be cushioned by other positive factors, including good job creation and income growth, Bernanke said.
The economy grew at a 2.6 percent pace from April through June, compared with a 5.6 percent pace over the first three months of the year, which was the strongest spurt in 2 1/2 years.
For all of 2006, Hubbard believed the economy will have grown by about 3 percent, a respectable performance according to economists.
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Associated Press Writer Jennifer Loven contributed to this report.


Updated : 2020-12-01 01:49 GMT+08:00