In Brief: Economics Group Sees Recession During 1999

More than half the members of the National Association for Business Economics predict a recession will strike in 1999, partly triggered by an increase in interest rates by the Federal Reserve.

The economics group, which is holding its annual convention here this week, also predicted that growth in corporate profits would slow from 6.6% this year to 4.6% in 1998.

Speaking at the meeting, Roger E. Brinner, executive director of DRI McGraw-Hill, said consumers may be more optimistic about the economy than the facts warrant.

"I think we are kidding ourselves about how good times are," Mr. Brinner said.

He said this "false sense of optimism" is inflating housing sales, auto sales, and other consumer spending.

He predicted that consumer sentiment could shift abruptly if the Fed were to increase rates or with an announcement of major corporate layoffs.

Mr. Brinner predicted the Fed would increase rates this year and next to trigger a "growth recession." That is, the growth rate would remain positive but slow down enough to increase unemployment.

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