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February, No. 235

In 2007, the nation’s economic growth will soften slightly, inflation will decrease and the unemployment rate will edge higher, according to the median forecast of the participants at the Federal Reserve Bank of Chicago’s Economic Outlook Symposium.

Last Updated: 01/10/2007

Economic Outlook Symposium: Summary of 2006 Results and Forecasts for 2007

Emily Engel , William A. Strauss

So how did the U.S. economy perform over the past year? Real gross domestic product (GDP) growth was 1.8% in the fourth quarter of 2005. Growth in this quarter was held down by a sharp reduction in energy production following Hurricanes Katrina and Rita and a significant drop in vehicle sales that followed the surge in the summer from “employee pricing” incentive programs by the Big Three automakers. Without the drag from these two events, GDP growth surged to 5.6% in the first quarter of 2006.