Economists Issue Upbeat Forecast for Continuing US Growth

Barry Wood
Washington
10 Nov 2003, 23:49 UTC

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.