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Strong Services, Weak Industrials In 2007

Lakshman Acuthan is keeping a “very close eye” on the home-price index. The managing director of the Economic Cycle Research Institute – contradicting Nariman Behravesh – called the index “the epicenter” of the U.S. growth slowdown. But he agreed with many analysts that the rise “isn’t consistent,” calling for four more months of results to be able to verify the housing market’s health.

In an exclusive cnbc.com interview with Karin Caifa, Acuthan predicted that toward the end of the first quarter and in the beginning of the second, the service sector will top expectations and industrials will fall short of views.

The economist offered his global outlook, calling for slowing but continued growth – with industry as the core of the slowdown, “even in China” and other booming parts of Asia. But he sees such a slip in pace as “probably a good thing,” explaining that it may be more important to achieve sustainable growth than to spike – and plummet. Acuthan is confident that all the world’s major nations – “even older economies like England” – will prosper in 2007, if more modestly.