The economy performed well throughout 2005 with GDP gaining nearly 4.0%. This is especially impressive considering the Federal Reserve Board raised the federal funds rate from 2.25% to 4.00%, the price of oil increased approximately 40% and the country experienced three major hurricanes. We anticipate solid but more modest growth during the new year. Industrial production, job growth and capital spending, in our opinion, will remain strong while corporate proÑts will continue to grow, but at a reduced pace. Housing starts and auto sales will have a more difficult time this year, but non-durable consumer spending will show modest growth. We expect somewhat higher interest rates and believe the inÖation rate will remain in the 3% range. SigniÑcantly higher oil prices pose a risk to our growth outlook.
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