March 31, 2007
Housing slump likely to keep economy sluggish
WASHINGTON — After ending 2006 lethargically, the economy is expected to remain sluggish most of this year as businesses and consumers cope with fallout from the painful housing slump.
The broadest barometer of the country’s economic health, gross domestic product, grew at a 2.5 percent annual rate in the final three months of last year, the Commerce Department reported today.
It was a small improvement from the 2.2 percent pace estimated for the fourth quarter and a 2 percent growth rate logged in the third quarter. However, the new reading still marked a lackluster showing that reinforced economists’ predictions for similarly listless activity in the coming quarters.
"I see the economy continuing this well-entrenched, below-trend economic groove that we are in," said Stuart Hoffman, chief economist at PNC Financial Services Group.
According to various projections, GDP growth will remain mediocre, hovering at the 2 percent to 2.5 percent pace in the first half of this year. In contrast, the economy’s average, or trend, growth rate is closer to 3.25 percent, economists said. Gross domestic product measures the value of all goods and services produced in the United States.
