U.S. economy headed for soft landing

Wednesday, July 5, 2000 | 11:14 a.m.

The U.S. economy is on track in the second half of this year to achieve the "soft landing" desired by Federal Reserve policy-makers, slowing just enough to hold inflation in check, say economists surveyed by Bloomberg News.

Growth will probably average a 3.7 percent annual rate in the final six months of the year, according to the median forecast of the 33 economists. That's down from a 5.5 percent first-quarter growth pace, and close to the consensus forecast of a 3.5 percent rate for the second quarter that ended Friday.

After six interest-rate increases in the past year from Fed policy-makers, retail and auto sales have fallen for two straight months. Today, the Conference Board reported its index of leading U.S. economic indicators fell 0.1 percent in May after being unchanged in April.

Concerns about too-rapid expansion and fears of inflation have prompted the Fed to raise interest rates six times in the past year. The central bank left rates unchanged at its most recent meeting last week, but left the door open to the possibility of another rate hike at its next meeting on Aug. 22.