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

DATE: WEDNESDAY, January 11, 1995                   TAG: 9501110037
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

FORECAST: GROWTH, BUT SLOWER

Although many of the nation's top economists think the economy will skirt a recession soon, they are becoming more cautious as the expansion grows.

A poll of 53 economists by Blue Chip Economic Indicators released Tuesday shows a consensus forecast of 2.2 percent growth in 1996, slower than the estimated 3.1 percent this year and 3.8 percent in 1994.

``That's hardly a barn-burner of a forecast, but the cautiousness of the panel members is not surprising,'' said Robert J. Eggert Sr., who conducts the monthly survey and edits the Sedona, Ariz., newsletter.

``The average post-World War II expansion has lasted only 50 months and the current upturn is already 46 months old,'' he explained.

In addition to the length of the expansion, the survey participants attributed the slowing in part to six Federal Reserve interest rate increases last year in an attempt to slow the economy and keep inflation in check. Many analysts expect more boosts early this year because of continuing economic strength.

As the effects of the recent increases are felt, the Blue Chip consensus sees the economy slowing to an annual rate of growth of 2.3 percent in the last two quarters of 1995, down from an estimated 3.8 percent in 1994 and 2.8 percent in the first six months of this year.

``Strength in business investment and personal consumption of durable goods will keep economic growth fairly robust in the first half of 1995,'' Eggert said. He added that domestic consumption would slow later in the year but said the expansion should continue into 1996.

``The economy does not now display the kind of excesses that have typically warned of a coming recession,'' he said.

The Blue Chip forecasters expect Fed rate increases to keep inflation subdued. They expect prices to rise slightly this year, ``but peak well below that of the last expansion,'' Eggert said.

The consensus for 1995 calls for inflation of 3.3 percent, up from 2.7 percent in 1993.

``Interest rates may peak by this summer as the Federal Reserve responds to slowing economic growth and easing inflation fears by halting its tightening of monetary policy,'' Eggert said.

The Blue Chip economists represent major corporations, business organizations, financial institutions, universities and economic forecasting services.

by CNB