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

DATE: FRIDAY, October 7, 1994                   TAG: 9412020005
SECTION: BUSINESS                    PAGE: B4   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: WILLIAMSBURG                                 LENGTH: Medium

MODERATE GROWTH FORECAST

The economy is headed for a ``soft landing,'' with growth slowing to a moderate pace next year as interest rates continue to rise, leaders of the nation's largest corporations predicted Thursday.

Their assessment of the economy, matching that of many analysts, follows a spate of recent reports that suggest the expansion - in its fourth year - has not run out of steam.

The corporate heads also said they expect inflation to increase, but to peak at low single-digit levels well below the price spirals that plagued earlier periods of growth. Only a few predicted the inflation rate would rise as high as 4 percent.

Nearly 100 active and retired chief executives, members of the elite Business Council, gathered for its semiannual conference to compare notes on the economy, rub shoulders with Clinton administration officials and discuss crime and violence in America.

The council's economic forecast does not stray far from the group's outlook six months ago.

``A successful soft landing of the economy is in progress,'' the report said. ``Growth will average a trend-like 2.7 percent in the second half of this year and 2.6 percent in the four quarters of 1995.''

The gross domestic product, which measures total output of goods and services in the United States, grew at an annual rate of 4.1 percent in the second quarter and 3.3 percent in the first quarter.

The Business Council, expressing at least mild surprise at the economy's vigor, said it believes the expansion can continue next year at a moderate pace even if the Federal Reserve pushes rates up another three-quarters of a point, in what would be its sixth boost of interest rates this year.

The corporate leaders said that although they believe economic growth is slowing to a moderate rate, there is a definite risk that the expansion could become more rapid.

None of the corporate officials consulted had detected slower orders or sales, the council said.

In addition, the council said, there are signs that improving economies abroad could pick up any slack from expected diminished consumer spending in the United States.

by CNB