WASHINGTON – The White House said Wednesday the nation's economy is expected to continue growing at a 3.4 percent rate, a fraction less than the administration forecast in December.
With rising energy prices, the administration increased its inflation forecast to 2.3 percent for 2005, and predicted that it would drop to 2.1 percent after that as previously projected.
The administration predicts an average of 178,000 payroll jobs being added per month this year.
"Economic growth is steady, it is strong and our economy's underlying fundamentals are robust," Treasury Secretary John Snow said in a statement accompanying the Council on Economic Advisers' (search) updated economic forecast.
In December, the administration had projected a 3.5 percent economic growth rate.
Economic growth is expected to slow from 3.4 percent during 2005 and 2006 in the years beyond, tapering off to 3.1 percent in 2009 and 2010. The predicted slowdown reflects slower anticipated growth in the working-age population and the retirement of the baby-boom generation.
The unemployment rate for the year was projected at 5.2 percent. The forecast in December was 5.3 percent. The revised forecast of adding 178,000 jobs a month compares with a prediction of 175,000 in December.
Snow said the report was good news for job seekers.
"With the unemployment rate at a low that we've rarely seen in history and 3.5 million new jobs created over the past two years, there is considerable good news to report on, as well as to look forward to," Snow said.
Harvey Rosen (search), chairman of the Council of Economic Advisers, said the updated forecast was largely what the administration projected six months go. "The economic expansion is continuing," he said.