US Economy Looks to Slow but Steady Growth

23 November 2004

The US economy is set to be "cautious, lean and mean" in 2005, according to some of the nation's top financial analysts.

A survey carried out for the newspaper USA Today predicts growth of 3.5%, leading to a drop in unemployment without fuelling inflation.

Says economist Maria Fiorini Ramirez: "It [the economy] doesn't have any fluff or excess in it."

Although interest rates next year are expected to level out at 3.5%, rising from the present 2%, borrowing will still be attractive to companies looking to replace outdated equipment.

Consumer spending is also likely to remain steady in 2005. Low interest rates will keep the housing market buoyant, though a little slower.

Kathleen Camilli, president of Camilli Economics, is confident the housing market will remain strong until the end of the decade as those baby boomer owners now approaching retirement, trade down or buy holiday properties.

Those surveyed say high oil prices and terrorism are the main threats to the nation's economic growth.

Data sourced from USA Today Online; additional content by WARC staff