US economic growth should slow over the coming year as consumers cut back on spending but improved business confidence should help beef up hiring, a wide-ranging survey of forecasters found.
The poll from the National Association For Business Economics, published on Monday, showed economists now expect US gross domestic product to grow 4.3 percent, down from 4.7 percent in a survey conducted in May. Growth is then expected to slow to 3.7 percent during 2005.
That would still be an impressive rate by global standards, although analysts warn persistently high oil prices threaten to dent growth even further, as would any major terrorist attack.
Forecasters in the NABE survey predicted the price of a barrel of crude oil would drop from its current level of around $50 to $40 by year-end and $35 at the close of 2005.
If they are right, the economic impact of high oil prices should be muted. But with the energy price spike showing no sign of abating, analysts acknowledged that was a big 'if.'
"Certainly the possibility exists that we could be wrong," said Carl Tannenbaum, chief economist at La Salle/ABN Amro and one of the analysts responsible for compiling the findings.
"It's very clear that energy has the potential to act as a tax on some of the components that we see in the GDP forecasts, consumer spending being chief among them," he added.
Energy will also probably contribute to a pickup in inflation during 2005. Analysts looked for the consumer price index to close 2004 at a 3.1 percent year-on-year pace, and then cool to 2.3 percent next year.