Newspaper article The Christian Science Monitor

Parts of the US Show Economic Strength

Newspaper article The Christian Science Monitor

Parts of the US Show Economic Strength

Article excerpt

IN observing the United States economy and activity on Wall Street these days, the key word is "selectivity."

Despite all the negative reports now being issued about the overall economy - such as tightening credit conditions for small businesses, still nagging inflation, the slump in car sales, the mess in the savings and loan industry, and so forth - there continue to be many pockets of economic strength throughout the US.

"Some parts of the US economy are doing much better than other parts," notes David Wyss, an economist with DRI-McGraw Hill, an economic consulting firm based in Lexington, Mass. For example, New England is in a recession. But other parts of the US, such as the Pacific Northwest, the industrial Midwest, California, and the Southeast US, continue to avoid recession and instead post economic growth.

Concerns are mounting that an unexpected shock to the economy could send it into a tailspin. However, DRI-McGraw Hill still does not see a recession on the horizon for the the US, or the global economy, for that matter.

US gross national product should expand at a modest rate of between 1.5 percent to 2 percent this year, Wyss says, roughly in the range forecast by Federal Reserve Board Chairman Alan Greenspan. And the US economy should grow a little better next year, between 2.5 percent and 3 percent, forecasts Wyss.

In terms of regions, the Pacific Northwest currently looks the best, Wyss says, reflecting strength in the civilian aircraft industry, such as Boeing, based in Seattle. And exports of US lumber products through the ports of Seattle and Portland, Ore., are running at good levels.

Perhaps not surprisingly, regional economic performance usually mirrors what is happening to specific industrial sectors, Wyss notes. Part of New England's current economic difficulty, he explains, is that the region is heavily linked to defense spending and high technology. However, defense spending is currently being reduced, and many high-tech firms have a defense component. …

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