Group Pegs U.S. Growth Rate at 3.4%

The National Assn. for Business Economics trimmed its projection for U.S. economic growth this year to 3.4% and raised its inflation forecast because of higher energy prices and labor costs.

The growth forecast, based on a survey of 50 economists, compares with 3.6% projected in February and actual growth of 4.4% in 2004. The economists also cut their second-quarter growth forecast to 3% from the 3.7% they projected in the February survey.

The group’s survey was taken from April 27 to May 10, before the government reported record exports and a narrower trade deficit in March that led some economists to increase their estimates of growth in the first quarter.

The Commerce Department will probably say May 26 that the economy expanded at a 3.6% rate in the first quarter, more than its initial estimate of 3.1%, according to a Bloomberg survey of 65 economists.

“After a mild slip during the early spring, our panel expects the expansion to regain its footing,” said Carl Tannenbaum, chief economist at LaSalle Bank Corp. in Chicago and chairman of the group’s survey committee.

A 3.4% growth rate for 2005 would make this year’s expansion the second-fastest since 2000.