MercoPress. South Atlantic News Agency

White House agrees with Fed's growth slowdown forecast

The United States economy will experience a slight slow down as the once-surging housing market cools but overall growth will soon bounce back, White House economic adviser Al Hubbard said on Thursday.

Hubbard told reporters he agreed with Federal Reserve officials who are predicting a moderating GDP growth.

"We're predicting (third quarter) GDP growth in the 1 or low 2 percentage range" said Hubbard who added that this would likely be a "one-quarter or two-quarter event." However, "we think for the year it'll be around 3%".

President George W. Bush, aiming to help Republicans in their fight to keep control of the U.S. Congress in the November mid term elections, has been promoting his previous tax cuts as a major campaign theme and says the reductions have bolstered the U.S. economy. Bush plans to underscore that message in a speech this Friday in Washington.

Republicans hope their prospects will also be helped by a drop in gasoline prices after a surge this summer above 3 US dollars a gallon. But Hubbard said he hoped to see oil prices head even lower.

"Who would have thought we would think 58 or 59 US dollars pb oil was low? The president is not happy with oil at 59 US dollars. He would like it to be significantly lower" indicated Hubbard. But the White House economic advisor would not predict where the price of oil is headed.

This week while the U.S. stock market hit record highs, some sectors of the economy are struggling, including Detroit automakers Ford Motor Co., General Motors Corp. and DaimlerChrysler AG's Chrysler Group.

With declining market share, sagging sales, and heavy pension and health care costs General Motors and Ford are in the midst of huge restructurings that include plant closings and thousands of layoffs.

These automakers are interested in government-based incentives to research and develop more fuel-efficient vehicles, and some in Congress would like the government to do more, perhaps with loan guarantees.