Economists Cut U.S. Growth Forecast for Third Straight Month

A panel of economists cut its forecast for U.S. economic growth for the rest of 2010 for the third month in a row.

The latest Blue Chip Economic Indicators report said that lower-than-expected consumer spending, business investment and private construction would dampen economic growth, Reuters said.

"Growth in the current quarter now is expected to be little better than the disappointingly soft advance registered last quarter," the survey said.

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The U.S. economy grew at an annual rate of 1.6% in the second quarter, compared with 3.7% in the first quarter.

"For all of 2010, real GDP now is forecast to increase 2.7 percent on a year-to-year basis, 0.2 of a percentage point less than a month ago and 0.6 of a point less than predicted in June," the survey said.

Still, the economists forecast that the economy will gradually improve, with growth slightly surpassing the trend rate in the second half of next year.

The Organisation for Economic Co-operation and Development today cut its growth forecast for the Group of Seven countries. The OECD now forecasts annual growth of 1.5% in the second half of 2010, compared with a previous estimate of 1.75%.

"The uncertainty is caused by a combination of both positive and negative factors," OECD Chief Economist Pier Carlo Padoan said in a statement. "But it is unlikely that we are heading into another downturn."
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