Economists: Recovery Slow But Steady

WASHINGTON -- The economy has been in sluggish recovery since at least July and is unlikely to fall back into recession, according to a survey of economists conducted by the National Association of Business Economists.

The economists, representing banks and other corporations, also expect inflation to remain moderate and interest rate spreads to change little over the next few years.

The group's quarterly survey, taken in late August among a panel of 56 economic forecasters, was prepared for the business economists' annual convention in Los Angeles. The results were released Monday.

When It Ended

An overwhelming 79% of respondents said the recession that began in July 1990 ended in the April-to-June quarter. Nine percent said it would end in the third quarter.

They all agreed, however, that the recovery will be abnormally slow, primarily because of the Fed's tight money policy, the high debt load carried by consumers, and reduced spending by federal, state, and local governments.

Last month the Commerce Department reported that the economy contracted at an 0.1% annual rate in the second quarter. That report on the gross national product is scheduled to be revised on Thursday.

The consensus of the panel was for the economy to grow by a fairly modest 2.5% to 3.0% over the next 12 months.

|Double Dip' Discounted

Only 11% of the economists said there was a better than even chance of a "double dip" recession, in which the economy would shrink after one or two quarters of growth. The other 89% answered "no" when asked if they thought there was a better than even chance that the economy would slip back into a recession in the next 12 months.

Most respondents expected modest inflation, with the consumer price index running at about 3.7% next year and at an average of 4% over the next five years. On average, the economists expect little change in the current low level of interest rates over the next two years. A slight majority, 56%, expect the dollar to hold steady over the next 12 months.

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