PARIS: U.S. economic growth is grinding to a halt, stung by what could be the worst housing slump on record, the Organization for Economic Cooperation and Development said Thursday.

Other big industrialized economies, notably Japan, are also flagging somewhat, but the euro zone is faring relatively well so far, the OECD, based in Paris, said in an update to its economic forecasts for the main developed regions.

It predicted U.S. growth of 0.1 percent in gross domestic product in the first three months of the year, then a second quarter of zero expansion in GDP.

“Nobody can say for sure whether the outcome is going to be just north or just south of zero, and the point is also it doesnt matter - this is going to feel bad any way,” the chief economist of the OECD, Jorgen Elmeskov, told Reuters in an interview.

The OECD was less concerned about Europe, where it in fact marginally raised its first-quarter GDP prediction for the euro zone and lowered it for the second quarter, to 0.5 percent and 0.4 percent respectively.

“The skys not falling in,” Elmeskov said, even if business sentiment had tapered off of late.

However, the OECD sounded the alarm over inflation, signaling that the European Central Bank should not yield to calls for lower interest rates.

The Federal Reserve, which has slashed interest rates to try to boost confidence and activity in a shuddering economy, needs to tread carefully with its stimulus efforts from now on, to avoid fueling expectations of higher inflation down the road, it said.

The broadest measure of inflation in the United States stood at 4 percent last month, while core inflation, which excludes volatile items like food and energy, was at 2.2 percent. That suggests some pass-through of higher energy and food prices into other prices.

In the euro area, despite the appreciation of the euro, inflation reached 3.3 percent in February 2008, and statistical measures of core inflation continue to inch up, approaching 2.5 percent.

The strength of the euro exchange rate was doing part of the ECBs inflation-fighting job for it and sparing it the need to raise interest rates, the OECD said. A strong euro makes the import bill cheaper, notably for oil and other commodities.

In the United States and Britain, there were some signs that peoples expectations of future inflation trends were taking a turn for the worse, and central banks needed to make sure this did not get out of hand, Elmeskov said.

In the euro zone, expectations looked “better anchored” so far, he added.

Elmeskov said that declining investment in U.S. residential property construction, if continued at the pace of the past 18 months or so, would turn a sharp slump into the worst in recent memory.

“Assuming it does so for the rest of this year, by the first quarter of next year housing construction would be in the deepest slump since our records began,” in 1960, he said.

“Given the way things are now, there seems to be a very high risk we will be in such a scenario,” he added.

“The risks in Europe are far less pronounced,” he said during a news conference.

Construction booms in Ireland and Spain were already in the process of subsiding, but more generally in Europe the run up in the past decade had been less exaggerated than in the United States, and thus the situation was less threatening now, he said.

The OECD said in passing that less industrialized economies than those of the 30 OECD-member countries were faring better.

For Japan, he gave a grim assessment of an advanced economy unable to shake its way out of deflation and dependence on exports to keep its GDP above water level.

While the country could perhaps do with some stimulants - as the U.S. is doing with some $150 billion of tax cuts that kick in largely in the second half of this year - Tokyo does not have the means, Elmeskov said.

Japans debt was heading toward 200 percent of GDP, and its key official interest rate was already very low.

“One of the problems is that theyve got so little ammunition,” he said.

The OECD forecast Japanese economic growth of 0.3 percent in the first quarter and 0.2 percent in the second.

Within the euro zone, it forecast German GDP growth of 0.6 percent in the first quarter and 0.4 percent in the second, French growth of 0.4 percent in both quarters and Italian growth of 0.3 percent in both.

Elmeskov said he was a bit surprised himself at the British forecasts the OECDs calculations produced: 0.6 percent growth in both the first and second quarters.

Scientists spent 13 years and $300 million in the federally funded Human Genome Project, mapping all 25,000 genes in human DNA by 2003.

Several Applied Biosystems’ () DNA sequencers were used, but that’s history now.

Scientists needed sequencers huge machines with specialized software to analyze disease mechanisms and link criminals to forensic evidence, determine paternity and identify mass disaster victims.

The problem was that at $300,000, Applied Biosystems sequencers used in the project were too expensive for research hospitals, universities, governments and drug companies.

Last October, Applied Biosystems released its $60,000 SOLiD lab kits that can sequence a human genome, helping scientists identify how genes contribute to disease and predict the way individuals with certain genes respond to treatments.

“For sequencing to become a routine diagnostic tool that helps in designing therapies for individuals, the cost must come down,” said Shaf Yousaf, Applied Biosystems’ president for its Molecular and Cell Biology Systems. “Using ABI’s SOLiD technologies, the cost of data is decreasing through advanced chemistry, which means scientists can do more experimentation for less money and better understand the mechanism that causes disease.”

This development is the latest in a number of moves by ABI to maintain its lead in the sequencing industry. But SOLiD may not be enough to keep it on the cutting edge.

“DNA sequencing was once a third of ABI’s business. Once the human genome project was completed, there was a change in demand and investment pulled back. There hasn’t been a big demand for sequencing instruments since,” said Peter McDonald, analyst with Wall Street Access.

ABI management concedes the segment has been growing in the 2% to 3% range since the human genome project ended, but maintains ongoing sales haven’t been affected.

“Our traditional business has experienced low growth, but since the launch of the SOLiD system, we expect growth to come from SOLiD due to the higher throughput and lower cost per experiment,” said Yousaf.

In addition to the high cost of research, development and innovation, the company must keep investors happy with growth. Competitors include Illumina, () Roche, BioRad () and Promega.

“If other companies are able to outpace Applied Biosystems, then the pace of cannibalization within their existing sequencing business will magnify and the potential for upside in the SOLiD rollout will potentially diminish,” said Ross Muken, analyst with Deutsche Bank, () which owns ABI stock. “They need to start rolling out enhancements to their SOLiD platform more aggressively to maintain their leadership in sequencing.”

The company will first report sales of its new device when it releases the current quarter’s earnings.

“We’re very pleased with the market’s strong interest in the product offering. We expected a few months delay between shipment and revenue recognition, and so our first revenue recognition on SOLiD shipments will come in the current quarter, which ends March 31,” said Mark Stevenson, president of ABI in a second-quarter conference call.

In the quarter ending Dec. 31, ABI reported earnings of 50 cents per share, a 35% increase from the year-ago quarter.

Revenue was $561.9 million, a 6% increase.

Another area of concern for analysts is maintaining market dominance with a fresh product portfolio.

“They must stay at the forefront of innovation and research and development with new products,” said Doug Schenkel, research analyst with Cowen.

ABI’s strategy for growth and product development is based on collaboration, acquisitions, innovation and investing in emerging markets, according to Yousaf.

For example, the company acquired Ambion in 2006 to expand its presence in consumables by developing Real Time PCR lab kits for gene expression and pathogen detection in RNA-based research.

“We’re also collaborating with BioTrove in genotyping and in Shanghai we’ve opened a reference demo lab to showcase products to clients in the area of biological research,” Yousaf said.

Real-time PCR is a laboratory method used to detect the amount of nucleic acids present in samples. The process helps researchers assess how RNA contributes to the development of disease.

Another product, launched on March 19, addresses salmonella contamination in pancake mix, pot pies, raw eggs, sprouts and ahi tuna. With its TaqMan pathogen-detection kits, ABI is expanding its presence in the food-testing market.

ABI’s other growth areas include forensics, human identification and quality testing in pharmaceuticals, water, and biosecurity for identifying pathogens, such as anthrax.

“The demand for crime scene and archaeology DNA sequencing is driven by the increased need of various governments to identify individuals genetically,” said Yousaf.

And if Yousaf has his way, a $1,000 genome sequencing lab kit will soon hit the market. The company is working internally and externally to expedite such an invention.

“The technologies that have recently come into the market, including the SOLiD System, are beginning to demonstrate that the $1,000 genome is feasible,” said Yousaf. “It’s simply a matter of time as the technologies continue to evolve over the next few years.”

WASHINGTON: The Bush administration won a commitment Thursday from two prominent foreign government investment funds to disavow “geopolitical goals” in their investments in the United States and elsewhere, a step the administration hoped would set an example for other funds.

The commitment came from the so-called sovereign wealth funds controlled by the governments of Singapore and Abu Dhabi, which is part of the United Arab Emirates. Both funds have stepped up their American investments in the last year and played a major role in purchasing stakes in Citigroup.

Treasury Secretary Henry Paulson Jr. praised the two funds for embracing a set of principles that not only disavowed political motives in investing but also made commitments to maximum disclosure of investment activities and strong internal controls, including management of risk in investments.

“Singapore and UAE have long-established, well-respected funds and are showing real leadership by joining with us today,” Paulson said in a statement.

Paulson reiterated the administrations position that the United States welcomed foreign investments, but his comment came at a time of rising concern in the administration about political opposition to such activities, especially after several government funds bought stakes in major American companies this year.

At the same time, representatives of the funds have hired lobbyists and public relations firms and have gone out of their way to proclaim their intention to invest in the United States based on commercial principles and not out of political motivations.

The United States has enlisted the International Monetary Fund, which has 185 country members, and the Organization of Economic Cooperation and Development, a voluntary group of wealthy countries, to develop a code of “best practices” to guide cross-border investments by government funds.

The International Monetary Funds board is to meet in Washington on Friday to push its study forward with a goal of adopting best practices in the fall.

Part of the exercise of these two group efforts is to make both funds and the countries that receive investments more comfortable with each others motives. “Its a process of mutual self-reassurance,” said an official involved in the process, speaking anonymously to describe the motives of the players candidly.

The drive by the United States and Europe to draw up the code of best practices, including a renunciation of political motives, has stirred resentment among some of the investing funds, particularly in China and some in the Gulf.

At the World Economic Forum, representatives of some of the funds in the Gulf said such a code was unnecessary and an intrusion, since they said the investment funds had never done anything to arouse suspicions. Some Chinese officials have also been quoted as saying the best practices idea was unnecessary.

Bush administration officials say that they are pleased with the level of cooperation from foreign governments, however.

“The general impression I have is that there is an openness to discussing this,” said Clay Lowery, an assistant Treasury secretary for international affairs, referring to a best practices code. “Some funds think this is a really good idea. Some are saying, Lets do a little bit of wait-and-see. ”

A leading Senate proponent of more openness by sovereign wealth funds, Senator Charles E. Schumer, the New York Democrat, praised Paulson on Thursday for agreeing to a set of principles but called on the principles to be adopted by others.

“Now it is up to other sovereign wealth funds to follow this lead,” Schumer said. “I hope the administration, the IMF and other governments will encourage them to do so.”