US Economic Indicators Suggest Start of Recovery Payrolls, Housing Starts, and Retail Sales Are Up Slightly; Some Economists Are Less Optimistic, Citing City Deficits and Low Savings Rates

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ECONOMIC recovery has begun in the United States.

That's what more and more economists are saying. "The recession ended late this spring, probably in April, and the recovery began in May," holds Mark Vitner, an economist with Barnett Banks Inc. in Jacksonville, Fla.

Top central bank officials are more cautious.

Richard Syron, president of the Federal Reserve Bank of Boston, says he's "not certain" the recession has ended but would be "hard-pressed to make a persuasive argument that we are not forming a bottom."

Alan Greenspan, chairman of the Federal Reserve Board, told Congress Wednesday: "It's possible we are at bottom." But he hedged by noting that the latest encouraging data are subject to revision. He said that he did not yet see "any measurable upward thrust" in the nation's output of goods and services.

In a survey early this month of 50 economic forecasters by Blue Chip Economic Indicators (Sedona, Ariz.), 39 percent said the recession ended in April or May.

Another 26 percent said it will wind up in June.

"The consensus (of economists) has been especially good at catching the start of a recovery," says Robert Eggert, editor of the publication.

What has prompted such hopes has been a string of almost uniformly favorable economic indicators in May. Nonfarm payrolls increased by 59,000, the first rise in 11 months. The workweek lengthened; overtime increased. Sales of domestic-made autos and light trucks rose to an annual rate of 6.1 million, up from a 5.5 million rate in April. From June 1-10, the rate rose slightly to 6.3 million.

Retail sales, aided by warm weather, increased 1 percent. Industrial production climbed 0.5 percent, on top of a 0.3 percent increase in April. Housing starts edged up 0.1 percent in May, following an 8.2 percent gain in April. The index of leading economic indicators - the traditional harbinger of recovery - has risen for three months straight.

Moreover, inflation was more subdued. The consumer price index rose in May by only 0.3 percent, suggesting an annual inflation rate below 3 percent.

The good news reversed an inclination for some economists to see the recovery delayed until summer or fall. …


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