Economy in lower gear through 2008 by ProQuest

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According to participants in the Chicago Fed's annual Automotive Outlook Symposium, the US' economic growth in 2008 is forecasted to be slower than in 2007, with inflation staying high and the unemployment rate rising. Light vehicle sales are predicted to fall sharply this year and then improve in 2009. The weakness in housing and the increase of gasoline prices appeared to weigh heavily on light vehicle sales (car and light truck sales), which totaled 16.1 million units in 2007, lower than the 16.5 million units sold in 2006. With economic growth well below trend this year, the unemployment rate is expected to move higher to average 5.4% in the fourth quarter of this year and then edge just a bit lower in the second half of 2009. Inflation, as measured by the CPI, in 2008 is expected to remain relatively high at 3.9% and then ease next year to 2.8%.

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