WASHINGTON -- Economic growth will slow this year but will still be sufficient to reduce the nation's unemployment rate, business economists say.
In its latest economic outlook, the National Association for Business Economics predicts the economy, as measured by gross domestic product, will expand by 3.6 percent this year and next.
If the projections being released today prove accurate, that would mark a slowing from the 4.4 percent growth clocked in 2004, the strongest showing in five years. GDP measures the value of all goods and services produced within the United States and is considered the broadest barometer of the country's economic health.
''Economic growth in 2005 will moderate but still be solid," said Carl Tannenbaum, chief economist at LaSalle Bank and head of the committee overseeing the economic forecast.
One reason economists give for the expected moderation this year is the belief that a red-hot housing market will cool and mortgage rates will rise. Consumer spending and business investment this year are expected to be solid and to help support economic growth, according to the outlook.
Forecasters anticipate that the unemployment rate, which averaged 5.5 percent last year, will dip to 5.2 percent this year and then to 5.1 percent next year.
On the inflation front, consumer prices are expected to rise 2.2 percent this year and 2.3 percent next year. Consumer prices for all of 2004 increased 3.3 percent, the largest rise since 2000.
A deceleration in consumer prices this year is based partly on the expectation that energy prices, which surged last year, will calm down. Forecasters are predicting a barrel of crude oil will cost around $40 at the end of this year, compared with $48 a barrel at the end of 2004.
A government report on consumer prices for January will be released tomorrow.