Economic Growth

President Clinton's chief economic advisor said the U.S. economy will probably grow at a 3% rate next year, compared with an estimated 5.1% in the current year. Gene Sperling, chairman of the National Economic Council, said a White House report on the economy due in January will estimate that economic growth next year "is going to be less rapid. I think it's going to be about 3%." Sperling's comments, on television Sunday, were in response to comments from President-elect George W.

The Federal Reserve said Wednesday that economic growth was "generally weak" in April and May as consumer spending slowed, while manufacturers in several regions passed on higher raw material costs to their customers. Three of the 12 regional Fed banks reported "softer, weaker or lower" growth and four found "slower, sluggish or modest" expansion. Five areas reported business was "stable or little changed," the central bank said in its regional economic survey known as the beige book.

According to a report from the nation's purchasing managers, the economy showed improvement in almost all indicators during March. Production was higher; new orders increased, and employment expanded for the first time since August, 1984, the report said. "The economy ended the first quarter with a healthy, if not substantial, improvement," said Robert J. Bretz, chairman of the business survey committee of the National Assn. of Purchasing Management.

Capital spending, after adjustment for inflation, is expected to rise by 7.6% in 1990, a sharp increase from the 4.9% rise estimated three months ago, the Commerce Department said Wednesday. However, the projected increase for this year would still be down from the 8.6% gain in spending by businesses on plant and equipment in 1989, the department said.

The county's economy continued to pick up steam through the first half of 1999, setting a pace to make this year its most successful of the decade. In its midyear review and forecast, the UC Santa Barbara Economic Forecast Project found that the local economy, primed by increased consumer spending and soaring business confidence, had grown through June at a healthy 4.1%. Comparatively, growth in all of 1998, the county economy's most successful year this decade, came in at 3.5%.

A day after congressional elections that repudiated President Obama and slammed the door on any new economic stimulus, the Federal Reserve stepped in with a controversial plan to spur the faltering U.S. economy by pumping $600 billion into the financial system. The Fed's much-anticipated but unconventional strategy is aimed at driving down long-term interest rates in the hope of encouraging more spending and borrowing by both consumers and businesses. Together with funds from an existing purchase program, the central bank could now buy as much as $900 billion in new Treasury bonds by the end of June.

The economy grew at an annual rate of 3.1% in the final three months of last year, up from an earlier estimate, the Commerce Department said. The figure was roughly in line with economists' projections and the widely held view that the recovery, while still moderate, picked up some steam at the end of last year. Economic growth in the third quarter was 2.6% and had been just 1.7% in the second quarter. Overall, the nation's economic output, or gross domestic product, increased 2.9% last year, a significant turnaround from 2009, when the economy shrank 2.6%, the Commerce Department's Bureau of Economic Analysis said Friday.

The Communist Party gave a ringing endorsement to Deng Xiaoping's call for an unswerving pursuit of swift economic growth. The announcement came at the end of a four-day meeting of the party's Central Committee, which had been called to plot the direction of China's economic reform before the death of its main architect. Deng is 89 and ailing.

U.S. housing sales are declining at a greater-than-expected pace that will shave 1 percentage point off economic growth in the second half of 2006, Freddie Mac said in a forecast Tuesday. Sales of new and existing homes probably will total 6.76 million this year, a drop of 9.4% from 2005's record 7.46 million homes sold, the McLean, Va.-based mortgage buyer said. Freddie Mac a month ago had predicted a sales slump of 7.9%.

Mexico's Finance Ministry cut its forecast for economic growth this year to 3.5% after manufacturers hit a soft patch because of weaker U.S. demand and a slump in agricultural output. Alejandro Werner, the ministry's chief economist, said the economy would pick up pace in the second half of the year but gross domestic product growth would be less than earlier forecasts of 3.8%. Mexico's economy grew a tame 3.1% in the second quarter, way below forecasts, as farming output fell and weak U.S.