WASHINGTON, Nov. 29 (UPI) -- The Bush administration forecast continued solid U.S. economic growth and labor market performance in a semiannual report released Thursday.
The forecast projects growth to be 2.7 percent during 2007 and 2008, revised to incorporate midyear growth with continuing effects of the housing decline and recent stock market turmoil, the report said.
"We continue to see signs of healthy economic growth, which only underscores the resilience of our economy despite continued challenges in the housing sector," said Edward P. Lazear, chairman of the Council of Economic Advisers.
"The administration's forecast reflects a realistic view of future economic performance and provides a solid foundation for estimating revenue and outlay projections in the years ahead," said Office of Management and Budget Director Jim Nussle.
"The president's 2009 budget will be based upon this forecast and by keeping taxes low and restraining spending, we will balance the federal budget by 2012."
The forecast said overall Consumer Price Index inflation was expected to fall in 2008 and, in the long run, average a 2.3 percent annual rate of increase.
The forecast of interest rates reflected recent declines in short-term and long-term rates but, over time, it remains essentially unchanged.
The forecast was developed by a team from the Council of Economic Advisers, the Department of the Treasury and the Office of Management and Budget, with assistance from other agencies.