Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, December 10, 1994 TAG: 9412130009
SECTION: BUSINESS PAGE: A8 EDITION: METRO
SOURCE: JOHN D. McCLAIN ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: Medium
``A `soft landing' but no recession is still the best bet,'' said Robert J. Eggert Sr., who conducts a monthly survey of business forecasters for Blue Chip Economic Indicators. The Sedona, Ariz., newsletter being released today. .
Soft landing refers to slowing the economy without braking it into a recessionary nose dive - the goal of the Federal Reserve in boosting interest rates six times so far this year.
By slowing economic growth to about 2.5 percent annually, the central bank hopes to keep inflation under control. The gross domestic product, the broadest measure of economic activity, was growing at a brisk 3.9 percent annual rate during the July-September quarter.
The Blue Chip economists see little inflation ahead.
The consensus of the 53 participants in the survey conducted earlier this month calls for year-over-year inflation of 2.7 percent in 1994 and 3.4 percent in 1995. Consumer prices rose 2.7 percent last year, the smallest gain since a 1.1 percent increase in 1986.
``More than 80 percent of the 53 economists ... raised their 1994 real GDP forecast,'' Eggert said. Real GDP is the gross domestic product, the total output of goods and services within the United States, adjusted for inflation.
``Many cited the government's upward revision to the third-quarter growth rate, the continued sharp gains in employment and the November rise in disposable personal income,'' he said.
The consensus forecast sees economic growth decelerating to 2.9 percent in 1995.
Eggert said the forecasters believe the moderate easing would result from slowing in productivity, job creation and government spending.
The Blue Chip forecasters represent banks, businesses, forecasting services, universities and Wall Street firms.
by CNB