U.S. Economic Growth to Slow as Car Rebates End, Survey Shows

By Timothy R. Homan and Alex Tanzi

Sept. 11 (Bloomberg) -- The U.S. economy will pull out of the recession at a faster pace than previously forecast, before slowing as the end of the government’s auto-rebate program weighs on consumer spending, a survey of economists showed.

The economy will expand at a 2.9 percent annual rate in July through September, according to the median of 61 estimates in a monthly Bloomberg News survey, compared with a forecast of 2.2 percent the previous month. Growth is projected to slow to a 2.2 percent pace during the last three months of the year.

The new projections follow a record drop in borrowing by Americans and an unemployment rate that jumped last month to a 26-year high, suggesting that business and government spending rather than consumer purchases will determine the strength of recovery from the worst economic slump since the Great Depression.

“This is some of the payback from the cash for clunkers, the feeling that a lot of that activity was just pulled forward from future months,â€