
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, February 11, 1994                   TAG: 9402110130
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

ANALYSTS RAISE THEIR SIGHTS

Although the U.S. economy is slowing from the torrid pace of late last year, it still will post the strongest growth in six years in 1994, top economists suggest.

The consensus of 50 analysts surveyed this month by Blue Chip Economic Indicators forecasts economic growth of 3.3 percent this year, fastest since the 3.9 percent expansion in 1988. The economy grew 2.9 percent in 1993.

The survey, released Thursday, also found growing optimism among the economists, who represent banks, businesses, economic forecasting services, universities and Wall Street firms.

Most participants raised their forecasts from January, when the consensus called for 3 percent growth in 1994, according to Robert J. Eggert Sr., editor of the Sedona, Ariz., newsletter who conducts the surveys. As recently as August, the Blue Chip projection was 2.5 percent.

"Many of the 46 economists who raised their forecasts . . . said they were influenced by the strong growth exhibited in the fourth quarter, when real GDP rose at an annualized rate of 5.9 percent," Eggert said.

The GDP, or gross domestic product, is the total output of goods and services in the United States. Real GDP is adjusted for inflation.

The survey was conducted before the Federal Reserve nudged up short-term interest rates last Friday, a move some analysts say could slow economic growth.

Despite the projected growth, inflation will remain under control, the economists believe. The consensus sees an inflation rate of just 2.8 percent this year and 3.2 percent in 1995. The Consumer Price Index rose 2.7 percent in 1993.

The consensus also forecast a 6.4 percent unemployment rate this year, falling to 6.2 percent in 1995. The rate averaged 6.7 percent last year, although it had fallen to 6.4 percent at year's end.

Although most analysts think the economy will slow from the 5.9 percent fourth-quarter pace, the Blue Chip consensus still calls for a 3.1 percent annualized growth rate during January-March, up from 3 percent in the January survey.

The consensus also sees growth of 2.8 percent in 1995, 0.1 percentage point stronger than the January forecast. The consensus of the 10 most optimistic economists calls for an expansion of 3.3 percent.

Eggert said the only disappointing news in the survey for this year and next was a widening trade deficit. He attributed that to improving domestic demand as economic growth accelerates and disappointing economic growth overseas, limiting exports.

by CNB