–See 14.5 Million Car,Light Truck Sales In 2012, 15 Million 2013

By Brai Odion-Esene

WASHINGTON (MNI) – Participants at the Chicago Federal Reserve
Bank’s Automotive Outlook Symposium expect U.S. economic growth to be
slightly above 2% this year and in 2013, while projecting consumer
prices to moderate and the unemployment rate to decline.

And according to forecasts published Monday by the Chicago Fed —
the event was held in Detroit May 31 to June 1 — auto sales are
projected to rise to 15 million units next year, while oil prices are
expected to average close to $104 per barrel this year.

The median forecast of symposium participants is for the growth
rate of real GDP to be 2.3% in 2012 and 2.6% in 2013. Inflation, as
measured by the Consumer Price Index, is expected to fall to 2.1% this
year and remain at that rate in 2013.

The unemployment rate, which rose to 8.2% last month, is predicted
to fall to 7.9% in the final quarter of 2012 and then move further down
to 7.6% in the last quarter of 2013.

Car and light truck sales are projected to rise in 2012 to 14.5
million units; and then improve further in 2013 to 15.0 million units.

“The pace of economic growth is forecasted to edge higher in 2013,
with activity improving across many sectors of the economy,” the Chicago
Fed said. Industrial production is expected to increase by 3.2% in 2012,
followed by a more moderate rate of 2.4% in 2013.

Oil prices — in this case West Texas Intermediate crude — are
forecast to average $103.6 per barrel in 2012, and then creep over the
$104 mark to average $104.3 per barrel next year.

“Interest rates (one- and 10-year Treasury rates) are anticipated
to rise this year and next year,” the Chicago Fed said. The 10-year
Treasury is projected to average 2.21% this year and 2.52% in 2013. The
rate on the one-year Treasury is forecast to average 0.20% in 2012, and
0.25% in 2013.

On the housing front, participants anticipate an average annual
rate of 710,000 housing starts in 2012 and 850,000 in 2013.

** MNI Washington Bureau: 202-371-2121 **

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