The US economy posted a growth rate of 1.1% in the final quarter of 2005, substantially below expectations of 3.0%. While this is the lowest growth rate in the last 12 quarters, it is still above the levels where fears of a recession become legitimate. The economic disruptions caused by Hurricane Katrina and high oil prices shaved off the majority of fourth-quarter growth, and the first quarter of 2006 may very well be higher than average in order to revert back to the economy's mean trendline.
Here is a chart of the quarterly GDP growth rates for the US economy for the last 10 years, with the red quarter being the most recent one. The current interruption does seem out of place within the solid growth trend we were on up till this point.
Prediction : The US economy will grow at greater than 3% in 2006, even as oil remains above $50/barrel. We will have adapted to the new reality, and will be permanently able to withstand oil prices as high as $70/barrel without a problem.
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