LOS ANGELES -- Robert Parry, president of the Federal Reserve Bank of San Francisco, said the U.S. economy has entered a phase of "sustained expansion," though at a rate of growth on the anemic side compared to our usual performance following a recession."

In remarks prepared for the Los Angeles Bond Club, Mr. Parry said consumer prices, which have risen at an annual rate of 3.25% so far this year, will average out to an increase of about 3% for all of 1992 and hold at that level in 1993.

"Inflation seems to be on the downward path," he said. "But we still have a long way to go in achieving our goal of price stability," or the long-term elimination of inflation.

The regional Fed chief added that when the recession is declared over, "it's very likely" that the end will be dated the second quarter of 1991.

Cyclical Decline

The National Bureau of Economic Research officially determines when recessions begin and end. It deemed that the last recession began in July 1990, and has yet to declare when it ended, if it has.

Mr. Parry said changing demographic patterns contribute to his forecast for a moderate expansion.

"The growth of the labor force is slowing as the baby-boom bulge in the working-age population dissipates," he said. "The lion's share of the slowdown, though, represents a cyclical decline in the economy," which has led the Federal Reserve to ease monetary policy since mid-1989.

Other contributing factors include cutbacks in federal and state government spending, the overhang of troubled commercial real estate that could take years to work down, and slack demand from major trading partners, including Canada, Germany, and Japan.

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