Economy's Growth Slows

Grew At Only 3.1 Percent Rate In First Quarter, Slowest In 2 Years

(CBS/AP) 
Economists also are lowering their estimates for growth in the current April-to-June quarter — to around a 3 percent rate — or possibly less.

For now, economists believe any soft patch will be temporary and don't believe that it would be a harbinger of recession.

"If energy prices moderate, which I think at this point is still the most likely scenario, then the economy should have a reasonably good year," said Zandi.

Although a 3.1 percent growth rate may disappoint economists, it is a decent pace of expansion, nevertheless.

President Bush wants to see the economy on solid ground as he tries to sell Americans his vision of overhauling the Depression-era Social Security program. He is promoting the idea of letting workers set up individual investment accounts in stocks and bonds, using a big chunk of payroll taxes to do that.

The signs of slowing economic growth are especially disconcerting because they raise new questions about the state of the labor market, whose recovery from the 2001 recession has been uneven. Payrolls expanded by just 110,000 in March, the fewest new jobs in eight months.

"Business aren't going to create as many jobs as we thought they were, and as such, the job market is not going to be as strong, and workers are just not going to be able to get those bigger pay increases that they probably had hoped for," said Zandi.

The employment report for April will be released by the government next week.