Sluggish U.S. growth but no recession-Blue Chip

WASHINGTON, Nov 10 (Reuters) - Leading economists predicted sluggish U.S. economic growth through June, but said the Federal Reserve's recent interest-rate cuts would help prevent a full-blown recession, according to a survey released on Saturday.

"Despite surprisingly healthy rates of real GDP growth during the middle quarters of this year, the consensus predicts the pace of activity is poised to slow considerably in the current quarter and remain quite modest through the first half of 2008," the monthly Blue Chip Economic Indicators newsletter said.

"The projected slowing in the rate of growth in the near-term will leave the economy vulnerable to unanticipated shocks, but our panelists currently say an outright recession will be avoided, putting the odds of such an outcome at only one-in-three."

For the current fourth quarter, economists polled by the group expect real gross domestic product growth will slow to a 1.7 percent annual rate, down 0.1 point from the October forecast.

That would be less than half the unexpectedly robust 3.9 percent growth rate recorded in the third quarter.

For 2008, the consensus growth forecast for real GDP remained at 2.4 percent, which would put the economy below the long-term trend growth rate of 3 percent for a third consecutive year.

The economists concluded that the Federal Reserve's interest rate cuts, strong exports, and cautious hiring and inventory management on the part of businesses would help protect the broader economy from a housing sector recession.

Still, they listed a number of risks to their outlook, including the threat of an even deeper and more protracted housing slump, unexpectedly high inflation, and a potential widening of the credit crunch.

The economists expected sharp increases in gasoline and home heating oil prices to hit consumer spending, with growth in personal consumption expenditures slowing to 2.1 percent in the current quarter from 3.0 percent in the recently ended third quarter. They said spending growth in the first half of 2008 "may not look appreciably better."

After five years of double-digit gains, the consensus forecast was for pretax corporate profits growth to drop to 3.9 percent this year and only 3.3 percent in 2008. (Reporting by Emily Kaiser; Editing by Andrea Ricci)