Economists see oil prices crimping growth

CHICAGO – Soaring crude oil costs, driven to new record highs by Hurricane Katrina, will take a bite out of U.S. economic growth this year and next, even if prices moderate in coming months as expected, according to a survey of business economists.

The economists on average predict crude will decline to $55 a barrel by the end of next year from the current level of about $63. But opinion is sharply divided, with half the 42 economists survey predicting oil will remain over $60 by the end of 2006, and 15 percent calling for oil to rise over $80.
Even if oil prices remain at current levels, the impact will cut 0.6 percent off U.S. growth this year and 0.7 percent next year compared with what could have been achieved with oil trading at last year