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

DATE: TUESDAY, January 11, 1994                   TAG: 9401110085
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

COMING: BEST YEAR SINCE `88

Many of the nation's top economists say the best U.S. economic performance in five years will have little effect on inflation and unemployment this year.

The consensus of 51 economists polled this month by the newsletter Blue Chip Economic Indicators, released Monday, forecast 3 percent growth this year after statistics are adjusted for inflation.

That would be the biggest growth in the economy since it expanded 3.9 percent in 1988. The projection was even stronger than the 2.9 percent estimate in last month's Blue Chip survey.

But the consensus saw the Consumer Price Index rising just 2.8 percent this year, down from 2.9 percent in December.

Robert J. Eggert, editor of the Sedona, Ariz., newsletter, said some price pressures are expected to emerge next year as capacity-utilization rates rise and the economy moves closer to full employment.

"But the CPI is still expected to increase just 3.3 percent in 1995," he said.

The survey found many of the economists also believing the unemployment rate would be 6.4 percent this year, although it would fall to 6.2 percent in 1995. The rate stood at 6.4 percent in December.

"Strength in housing, autos and other consumer durables, as well as business spending for . . . equipment, is expected to persist into the new year," he added. "First-quarter [inflation-adjusted gross domestic product] is expected to grow at an annual rate of 3 percent."

The GDP - the total output of goods and services produced in the United States - expanded 2.5 percent in 1989 and 1.2 percent in 1990 before shrinking 0.7 percent in 1991 as the recession was ending.

The economy then picked up 2.6 percent in 1992 and, according to the Blue Chip consensus, grew 2.8 percent last year. The government will report the 1993 GDP figures on Jan. 28.

The Blue Chip consensus sees economic growth slowing to a 2.7 percent annual rate in the second and third quarters before picking up to 2.8 percent in the final three months.

The panelists' initial look at 1995 foresees more moderate growth of just 2.7 percent.

by CNB