Business Economists Doubt A |Double-Dip' Recession
WASHINGTON -- Business economists do not believe the sluggish U.S. economy will slide back into recession, but they see the recovery as nothing to get excited about.
The latest survey of members of the National Association of Business Economists showed less optimism about the economy than in a previous survey in August survey. But still only about 10% of the 45 respondents said they expected a "double dip" recession.
The rest of the group said they foresaw a "subdued" recovery with gross national product rising 3% next year, about half the normal post-recessionary rate.
Optimism Is Sparse
"Not a single participant in the survey expects a recovery stronger than the historical norm and only one thinks that the economy will manage to record even an average rebound."
The business economists said GNP would rise at a modest 2% annual rate in the final three months of 1991. While it is better than the contraction suffered during the first half of the year, it is far less optimistic than the 2.8% the group predicted a few months ago.
But the group's prediction was in line with the 1.9% growth rate that White House economic adviser Michael Boskin said he expected in the fourth quarter.
Growth Figures Trimmed
The business economists also reduced their expectations for growth during the first three months of 1992 to a 2.5% annual rate, from 2.7% in the August survey.
The economists saw a few true bright spots.
They predicted the implicit GNP price deflator, the widest measure of inflation, would rise by 3.1% in 1992, down from the August figure of 3.5%. The inflation rate was 4.1% in 1990.
The economists expect housing starts to be up by 20% next year. "If realized, this would be sufficient to generate a double-digit increase in real residential investment next year, making this the fastest-growing sector in the economy," the group said.