The US economy is expected to recover after a tough first quarter to grow at 2.5 per cent this year, US investment bank Lehman Brothers forecast today.
Economists expect the US economy to post gross domestic product growth of about 5 per cent last year but a slowdown is forecast for 2001 after slowing demand in 2000 for cars and other consumer goods.
Lehman economist Mr Graham Parry said: "Basically our story is a sharp slowing, particularly in the first quarter, but then steady improvement and a more rapid acceleration by the second half of the year."
"Most of the contraction has been caused by the manufacturing sector," said Mr Parry.
"Provided that the services sector holds up, as the interest rate cuts flow through we should see a steady recovery in the US so we still have a fairly optimistic picture," Mr Parry added.
Reuters