Economists Cut U.S. Growth Forecasts as Companies Limit Hiring

A lack of jobs will shackle consumer spending and restrain the U.S. recovery more than previously estimated, according to economists polled by Bloomberg News.

Gross domestic product will expand at an average 2.55% annual rate in the last six months of 2010, according to the median of 67 estimates in a survey taken July 31 to Aug. 9, down from the 2.8% pace projected last month. Household purchases will climb at a 2.25% rate, compared with a 2.6% gain previously forecast.

Federal Reserve policy makers yesterday also lowered their sights on the projected speed of the economic rebound, prompting officials to take additional steps to bolster the economy for the first time in a year. Slack growth will push back the first increase in the central bank's target interest rate until the second half of 2011, according to the Bloomberg survey.