While the financial community frets that the nation's economy is growing too rapidly, threatening higher inflation, at least one Wall Street economist predicts a recession next year.

Population age statistics show that significantly fewer new households are likely to be formed in 1997, according to Richard F. Hokenson, chief economist at Donaldson, Lufkin & Jenrette Securities Corp. in New York, and that presages a consumer-led downturn in business conditions.

He said he expects a weak fourth quarter this year and three quarters of negative economic performance next year, with interest rates declining sharply. Instead of inflation, he expects a dose of deflation - falling prices.

The key factor in Mr. Hokenson's unorthodox scenario is a 7.7% decline next year in the number of people turning 25. That age is the point at which Americans are most likely to form new households, making this age group "the principal driver underlying growth in consumption."

Why 25-year-olds? "This is the age at which men are most likely to get married for the first time, a benchmark that has not changed in the past 40 years," he said.

Unlike most Wall Street economists, Mr. Hokenson relies heavily on demographic data to predict business trends. He pays less attention than others to the monthly economic indicators, especially employment reports, that have frequently rocked the stock and bond markets this year.

"The inconsistency of the data and the volatile monthly revisions lead us to believe that the household and payroll data are saturated with problems the Bureau of Labor Statistics has been unable to remedy," he said.

Economists agree that consumer activity accounts for about 70% of economic output, measured as gross domestic product. Mr. Hokenson said he expects real GDP to grow a healthy 2.2% this year but to decline by 0.8% overall next year.

He looks for little change in Federal Reserve monetary policy the remainder of this year, followed by significant rate cutting through next year as economic conditions deteriorate. He expects the Fed to reduce the federal funds rate to 3% by next June 30 and to just 1.75% by Dec. 31, 1997.

Meanwhile, the DLJ economist anticipates a decline in the 30-year government bond rate to 4.75% by mid-1997 and to a record low 4.25% by the end of next year.

The big slide in rates will be made possible by the evaporation of inflation, as Mr. Hokenson sees it, with the consumer price index sinking to an annualized rate of zero by next June and minus-1% by the end of 1997.

"Behavior of prices will be the key economic issue determining the duration of the 1997 recession," he said. "We expect retail prices to fall. Prices falling faster than wages will produce a relatively short - nine months - but not sweet contraction in the economy."

Mr. Hokenson labeled the downturn he foresees as a "no-pricing-power" recession because soft consumer demand from a shortfall of 300,000 new households will dictate price-cutting.

Financial markets, meanwhile, should do fairly well under his scenario. Falling rates should spark a major rally in the bond market, and that should support stocks, he said, although volatility in the equity markets can be expected.

The DLJ economist said the 1973-75 recession was the last slump caused by similar demographic factors - a sharp fall in the number of 25-year- olds.

That recession is usually blamed on the energy price shock imposed by the Organization of Petroleum Exporting Countries, but Mr. Hokenson thinks otherwise. "The reality is that consumer spending and outlays on housing peaked in the first quarter of 1973 and were already down sharply by the time OPEC joined the party," he said.

The huge baby boom generation noted for its materialistic impulses will not help bolster consumption next year in place of the missing 25-year- olds, the economist said.

"They are essentially traders, in that they already own consumer goods," he said, noting that consumers' spending rises at progressively slower rates through age 45 and begins falling by age 55.

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