CHICAGO (MNI) – The Chicago Federal Reserve Monday released the
forecasts from its annual Automotive Outlook Symposium held June 3-4, in
which participants gave a consensus outlook for real GDP to rise by 3.1%
this year and in 2011. The following is the full text of the release by
the Chicago Fed:

The seventeenth annual Automotive Outlook Symposium was held in
Detroit on Thursday and Friday, June 3-4, and drew more than 60
participants from manufacturing, banking, consulting and service firms,
and academia. This year, 20 individuals provided a consensus outlook —
forecasts for major components of real gross domestic product (GDP), as
well as several key statistics for the U.S. economy. The median forecast
results are presented in the table.

According to the median forecast of Symposium participants, the
nations economic growth is expected to increase at a substantially
faster rate in 2010 than in 2009, inflation is predicted to edge higher,
and the unemployment rate is forecasted to move lower. In 2011, growth
is expected to remain slightly above trend, with inflation moving a bit
higher and the unemployment rate continuing to head lower.

Real GDP, after having increased 0.1% last year, is forecasted to
rise by 3.1% both this year and in 2011. After rising 1.5% last year,
inflation, as measured by the Consumer Price Index, is expected to rise
1.7% this year and then rise 1.9% in 2011. The unemployment rate, after
having averaged 10.0% in the fourth quarter of 2009, is forecasted to
fall to 9.5% in the final quarter of 2010 and down to 8.8% by the end of
2011.

Most of the major components of real GDP — particularly consumer
spending and business fixed investment — are expected to contribute to
the improved forecast for economic growth in 2010. Economic growth is
forecasted to remain solid in 2011, in large part because of an
expansion of spending in business fixed investment and residential
investment.

Industrial production is forecasted to increase at a strong pace in
2010 and then increase at a solid rate in 2011. Net exports are
predicted to decline somewhat in 2010 and 2011. Car and light truck
sales are projected to improve in 2010, with sales at 11.6 million units
— the slowest selling rate since 1983; and they are expected to improve
to 13.3 million units in 2011 — the slowest rate since 1992.

Interest rates (oneand ten-year Treasury rates) are anticipated to
rise this year and next year. Oil prices are expected to average $82 per
barrel by the end of 2010 and then rise to just under $88 per barrel by
the end of 2011. The trade-weighted U.S. dollar is expected to rise both
this year and next.

A summary of the seventeenth annual Automotive Outlook Symposium
will be published in an upcoming issue of the Chicago Fed Letter.

** Market News International Chicago Bureau: 708-784-1849 **

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