Economists say lower growth, higher oil prices coming

Economists are dialing back their expectations for U.S. economic growth this year. A survey from the National Association for Business Economics predicts GDP will grow 2.8% this year—down from the group’s February prediction that it would grow 3.3%. Their outlook for consumer spending and the housing market also dimmed, in part because the economists polled expect oil prices to remain above $100 a barrel through 2012. In the survey that the NABE released today, a panel of 41 economists say they “remain highly concerned” about the growing federal deficit, and that growth in the first three months of the year had been weaker than expected. The predictions of the economists reflect the jitteriness of a public that is still recovering from the financial crisis and now getting squeezed by rising prices for gas, groceries and other household items. Retailers of all stripes are paying more for the raw materials they need to make and transport their products—materials such as fuel, cotton and wood pulp—and they’re saying they have little choice but to pass along the increased costs to customers.