US economy to slow this year

-US economic growth will slow this year as inflation rises, a pattern that will reverse next year, according to participants in an auto outlook symposium held last week by the Federal Reserve Bank of Chicago. US gross domestic product will grow 2.6 percent this year, down from 2.8 percent last year, according to forecasts from 24 symposium participants published on Monday by the Chicago Fed. Participants expected growth to pick up again in 2012, to 2.9 percent.
The survey suggests that members of private industry are less sanguine about the economic outlook than Fed officials, based on their most recent economic projections, published April 27 before the latest rash of soft economic data. Those projections had US GDP growing 3.1 percent to 3.3 percent in 2011, and 3.5 percent to 4.2 percent in 2012. The Federal Reserve has kept interest rates near zero for two and half years and this month completes a $600 billion round of Treasury securities purchases designed to boost an economy still recovering from its worst recession since the 1930s.
A report Friday showing US companies hired far fewer workers than expected in May, suggesting the US economy may have hit another soft patch and raising questions over whether the Fed may need to continue its stimulus longer than expected.