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Economists Issue Upbeat Forecast for Continuing US Growth - 2003-11-10

Economists who keep a close watch on U.S. monetary policy met Monday here in Washington, and issued an upbeat forecast for continuing robust economic growth in the months ahead.

The Shadow Open Market Committee predicts healthy economic and employment growth for the next several months. Analyzing just released statistics, the group says U.S. economic growth has averaged 3.2 percent for the last 12 months and five percent for the last two quarters.

Shadow committee chairman Charles Plosser expects growth will remain strong and interest rates steady. "We believe the economy is improving. It is improving at an increasing rate. And as an implication of that, that means more jobs and more money in people's pockets," he said.

Mr. Plosser is an economics professor at the University of Rochester, New York.

The shadow committee, a group of academics and representatives of private organizations, makes no prediction as to when interest rates, now at a 45-year low, will begin to rise. But it expects no increase for several months. The economy has now generated new jobs for three consecutive months, and the latest quarterly growth figure was seven-point-two percent.

Another academic member of the committee, Bennett McCallum of Carnegie Mellon University in Pittsburgh, faults the Bush administration for calling on China and Japan to stop manipulating the value of their currencies, and instead, let their values be determined by the market. "I just think this whole business of trying to browbeat other nations into doing (what we want with their monetary policy) in a way that is designed to improve our real trade deficit just strikes me as absolutely [crazy]," he said.

The Bush administration, as well as both parties in Congress, are increasingly frustrated with the surge of industrial imports from China and the accompanying loss of U.S. manufacturing jobs.