Some on Wall Street are suddenly beginning to wonder how far the slowdown in the economy will go.

The issue took on new emphasis after weekly unemployment claims for early December were revised sharply upward and the four-week moving average of claims rose to 343,000, a five-month high.

"Labor market activity is clearly slowing," said Bruce Steinberg, manager of macroeconomic research at Merrill Lynch & Co.

Views of the economy underwent a rapid transformation last week. Reports of stronger-than-expected industrial production and housing starts were quickly superseded by more moderate indicators.

In fact, the latest economic data "all signal slower growth than consensus expectations," said Gary L. Ciminero, an economist based in Providence, R.I.

The rise in joblessness claims is important because much of it happened during the week the Bureau of Labor Statistics collects information for its monthly labor market report, next due in early January.

"We're now looking at a weaker labor picture than just a couple of weeks ago," Marilyn Schaja, money market economist at Donaldson, Lufkin & Jenrette Securities Corp., told Dow Jones News Service.

There was more than just employment data, however. Mortgage applications fell after mortgage interest rates rose earlier this month. At the same time, the Federal Reserve Bank of Philadelphia reported unexpected weakness in manufacturers' expectations shown in its December business sentiment survey.

Regional Fed surveys can sometimes be unpredictable and the Philadelphia index has been prone to large swings this year, but in this instance, several economists said, it appeared to confirm other trends.

Looking forward, Mr. Steinberg expects domestic economic activity "to remain on the sluggish side through the winter."

Mr. Ciminero, whose firm is called Independent Economic Advisory, expects "persistent sluggishness" next year. Indeed, he thinks fourth- quarter results will not reflect the true slowness in business conditions.

"Yet, there is no recession on the horizon," he emphasized. One big impact of the slowdown will be to mute any rise in inflation.

Sung Won Sohn, chief economist at Norwest Corp., Minneapolis, also anticipates "moderate economic growth for 1997" paced by lack of pent-up demand for big-ticket items, the strong dollar and sluggish economic growth internationally.

Mr. Ciminero also thinks the strong dollar, which hurts U.S. exports, will take a toll next year. "Exports declined for the first time in three years under the weight of a lofty dollar that is up 10% over the past year and sluggish economies in Europe and Japan," he noted.

Mr. Ciminero expects economic growth next year to be "close to 2%." Mr. Sohn thinks the rate is "settling down close to Fed Chairman Alan Greenspan's speed limit of 2.25%.

Edward Yardeni, chief economist at Deutsche Morgan Grenfell Inc., expects a 1997 growth between 2% and 2.5%, which he thinks should extend the "Goldilocks economy of 1996." Just like the porridge that Goldilocks found, things will be 'not too hot, not too cold.'"

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