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MARK AUSTIN THOMAS: Well, the year is more than half over so we asked Rachel Dornhelm to check in with some economists. We wanted to find out what they think about the state of the economy so far and where it’s going over the next six months…
RACHEL DORNHELM: Despite the fact inflation picked up a bit, US Global Investors’ John Derrick says he’d give the first half of 2006 an A for strong GDP numbers. However . . .
JOHN DERRICK:“Looking forward in the second half of the year we’re a little bit more cautious on the economy we actually think the economy will slow down.”
For one, he sites a faster than expected slide in the housing market.
Meanwhile, Wachovia senior economist Mark Vitner gave the first half of the year a B. But he’s somewhat optimistic about the second. He says real estate is just one side of the equation.
MARK VITNER:“On the other side, business fixed investment which hasn’t really been all that strong in the last several years has begun to pick up in a major way and businesses are looking at expanding again.”
Vitner says while the GDP will be lower in the second half, that should allow inflation to come back down a bit.
I’m Rachel Dornhelm for Marketplace.