Don't believe everything you hear about the nation's economy right now, suggests veteran economist Lacy H. Hunt of HSBC Markets Inc.

He said he thinks interest rates, after surging on recent reports of unexpected strength in business conditions, are probably about as high right now as they will get in 1996.

"There's a good chance of a very dramatic reversal during the second half of the year," he said. "Rates could decline by a hundred basis points, bringing us back to where we started the year."

Several Wall Street analysts think that would be good news for banks - if the economy doesn't skid into a recession, of course.

Carole S. Berger and other analysts at Salomon Brothers Inc. recently noted that bank stocks will keep pace with other stocks "as long as rates do not rise much further."

On the other hand, they said, outdoing the market "would require a fairly dramatic decline in rates, without recession."

Right now, Mr. Hunt, a soft-spoken Texan known for cautious views on business conditions, doesn't see a recession looming. What he does see are signs that some important things in the economy are not quite as they appear.

Notably, the federal government last week estimated that the gross domestic product grew at a 2.8% annual rate during the first quarter. The figure shocked the financial markets and pushed the government bond rate over 7% on fears of renewed inflation.

But Mr. Hunt regards the GDP figure as far enough at odds with other measures of business activity to "suggest two very different views for the rest of 1996."

For instance, while the first quarter's economic output rose at a 2.8% rate, aggregate hours worked fell at a 0.2% annual rate. These two indicators normally move together.

The biggest reason, he said, is that the average workweek for nonfarm workers, a leading indicator of the economy, has been falling. During the first four months of the year, the average nonfarm workweek dropped by 1% from the same period last year, to 34.3 hours.

"If the workweek is rising, it presages healthy demand for employment. Declining, it indicates slack demand for people going forward," said Mr. Hunt, who has a doctorate in economics from Temple University and leads a group of four economists at HSBC.

HSBC Markets is a unit of HSBC Group, parent of Hongkong and Shanghai Bank and New York's Marine Midland Bank.

The bond market also has been unnerved for several months by larger- than-expected gains in payroll employment. But Mr. Hunt points out that the average 166,000 monthly increase in new jobs this year is virtually unchanged from the 171,000 monthly pace of a year ago, when the economy overall was much weaker.

In addition, relatively high-paying jobs in the manufacturing sector have been declining every month. They fell by 1.7% in the 12 months through April.

The economist, who previously held posts at Fidelity Bank and Chase Econometrics in Philadelphia and the Federal Reserve Bank of Dallas, expects these fundamental labor market trends to begin subduing other economic indicators, perhaps starting with retail sales.

April sales figures are due to be released Tuesday. Mr. Hunt will be watching them closely for clues about the future.

In the meantime, he thinks bond market rates may edge up a bit further. The government has scheduled several additional Treasury auctions, with the flow of new bonds expected to lower prices and raise yields.

The inflation-sensitive bond market also is likely to be jarred by both the consumer price index and producer price index, two much-watched inflationary yardsticks.

The CPI and PPI are going to "look horrible for a month or two," reflecting recent rises in food and energy prices, he said. The April CPI, also due for release Tuesday, may increase 0.5%, with gasoline prices the biggest reason for the gain.

But higher inflation is actually not in the cards, he said, because the Federal Reserve continues to maintain a tight grip on the nation's money supply. Inflation, by classic definition, is too much money chasing too few goods.

"Total (banking system) reserves and M1 continue to contract sharply in real terms," he said. "With income tax refunds falling in the last two weeks below the comparable levels of last year, M2 also should turn much weaker."

In short, Mr. Hunt says, the second half of 1996 shapes up as far different from the first. Indeed, worries about rapid economic growth and inflation may be just a memory by year's end, and concerns may again be focused on a sluggish economy.

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