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Leading Business Economists Predict More US Job Growth - 2004-02-17

A leading group of business economists predicts more job growth, a stronger dollar, and economic growth of more than 4.5 percent this year in the United States.

The business economists see positive trends in the U.S. economy. These include low inflation and interest rates, rising employment, and a stronger manufacturing sector.

Carl Tannenbaum, chief economist at LaSalle ABN-Amro Bank in Chicago, expects the creation of 150,000 new jobs per month for the remainder of the year. He said there are several reasons for slow job growth thus far.

"Well, I think the panel identified several factors, chief among them rising productivity. That has happened through a combination of work-place redesign and investments in equipment and technology. Companies, so far, have been able to satisfy the increase in output and revenue growth just by their people being more efficient," he said.

The business economists issued their findings this week, after consulting with 2,500 economists across the country.

They expect the dollar to continue to decline moderately, and then begin a slow rebound by the middle of the year. The 50 percent decline in the dollar during the past two years, says Mr. Tannenbaum, has generally been positive for the economy.

"When the dollar declines, foreign products become a little bit more expensive here and our products become more affordable overseas. So our panel believes export growth will be about 10 percent for this calendar year, which is a significant improvement from what we had been expecting," he said.

The panel of economists expects the record-high U.S. trade deficit to fall slightly to about $524 billion in 2004. The panel foresees no change in interest rates for several months, and believes consumer prices will rise by no more than 1.6 percent this year.