By Brai Esene

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

And according to forecasts published Monday by the Chicago Fed – the event
was held in Chicago Nov. 30 – auto sales are projected to rise to 15 million
units next year, while benchmark oil prices are expected to average around $94
per barrel.

The median forecast of symposium participants is for the growth rate of
real GDP to be 1.7% in 2012 and 2.3% in 2013. Inflation, as measured by the
Consumer Price Index, is expected to fall to 2.0% this year and then witness a
slight uptick to 2.1% in 2013.

“Consumer spending is predicted to rise at a moderate pace next year,
according to the consensus economic outlook,” the Chicago Fed said. “The pace of
business spending is expected to strengthen in 2013. The housing sector is
forecasted to improve at a faster pace next year.”

The unemployment rate, which rose to 7.9% in October, is predicted to
remain at that rate for the remainder of this year before dropping to 7.6% by
the end of 2013.

Car and light truck sales are projected to rise in 2012 to 14.3 million
units; and then improve further in 2013 to 15.0 million units.

On the housing front, participants anticipate an average annual rate of
770,000 housing starts in 2012, and then a further increase to 950,000 in 2013.

Industrial production is expected to increase by 2.3% in 2012 and 2.7% in
2013.

Oil prices – in this case benchmark West Texas Intermediate crude – are
forecast to average $89.83 per barrel in 2012, and then remain under the $100
mark next year, averaging $93.75 per barrel.

“The short-term interest rate (one-year Treasury rate) is expected to tick
up 2 basis points during 2013, and the long-term interest rate (ten-year
Treasury rate) is predicted to increase 32 basis points over the same period,”
according to the Chicago Fed.

The 10-year Treasury is projected to average 1.70% this year and 2.02% in
2013. The rate on the one-year Treasury is forecast to average 0.18% in 2012,
and 0.20% in 2013.

–MNI Washington Bureau; tel: +1 202-371-2121; email: besene@mni-news.com

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