Word: economists
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Dates: during 1980-1989
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Still, consumer spending accounts for about two-thirds of the economy. If retail sales slow down much more sharply than expected, that would overwhelm the benefits of increased exports and capital outlays. For that reason, the economists admitted that there is a significant chance of a recession in 1988 -- perhaps 20%. Some experts doubt the economy could withstand another body blow from Wall Street. Says Economist Gerald Holtham of Credit Suisse First Boston in London: "The only thing that could push the U.S. into a recession is another panic sell-off on the stock market that hits consumer confidence...
...dissenters in TIME's poll believe a downturn is already on the way. Irwin Kellner, chief economist for Manufacturers Hanover Trust, forecasts that GNP will contract by 1.5% next year. "Consumer spending is weak and likely to weaken further," he says. "Wages have just not kept up with inflation." Johsen Takahashi, of the Mitsubishi Research Institute in Tokyo, predicts a .5% decline for the U.S. economy in 1988: "The stock market will take another plunge next year, as will the dollar." The outlook, he warns, is "very...
Last week's trade report would seem to support Takahashi's pessimism. Although exports climbed 3.6% in October, to $21.7 billion, imports jumped 12%, to $39.4 billion. Admitted a top economist in the Reagan Administration: "This wasn't something you want to try to put a happy face...
Many of the economists are optimistic, however, that the trade gap can be substantially reduced without an economic downturn. They expect increased growth abroad to boost demand for U.S. exports. One especially encouraging sign: Japan's economy grew at an annual rate of 8.4% in the quarter ending in September, thanks in part to a $38 billion government program to stimulate the economy that passed the parliament last spring. Roger Brinner, chief economist of the forecasting firm Data Resources, predicts that even West Germany will spur its economy and increase imports from the U.S. Says he: "The stimulus in Europe...
Forecasters agree that U.S. exports will be the main engine for whatever growth is achieved in 1988. "The export industries appear to be out of the woods," says Thomas Swanstrom, chief economist for Sears. David Hale, the chief economist for Kemper Financial Services in Chicago, predicts that exports of manufactured goods could jump 15% to 20% next year, at the expense of America's trading partners. "We are going to increase our market share," he says, "largely by cannibalizing the foreigners...