Newspaper article THE JOURNAL RECORD
Majority of U.S. Economists Predict `Modest' Rebound
The National Association of Business Economists said its most recent survey of members found 52 percent expected the country would be in a recession by the end of 1986.
Kathleen M. Cooper, vice president of the association, said this number, while still a majority, was down somewhat from a survey conducted a year ago. At that time, 87 percent of the economists were predicting a recession by the end of 1986.
She said the change in sentiment has occurred because of the weak growth the country has gone through in the past year. This yearlong pause in activity has helped the economy to make adjustments that should prolong the recovery, many economists believe.
""The past year's tepid growth rate provided a nerve-racking but needed respite from the torrid pace of the recovery's first six quarters,'' she said. ""Another factor allowing us to worry less about near-term recession is our strongly held belief that the dollar will move lower over the next year.''
She said a drop in the dollar will expand U.S. exports while cutting down on imports, and thus add to domestic economic growth.
While fewer economists than a year ago are predicting an outright recession, their optimism about total economic growth has weakened as well.
The economists, who provide advice to U.S. businesses, banks and industrial companies, forecast the economy will grow this year at an anemic 2.2 percent rate, rebounding only slightly to 2.7 percent growth in 1986.
By contrast, the Reagan administration is calling for 3 percent growth this year followed by an even stronger 4 percent growth rate in 1986. The economy grew at a 5.7 percent rate in 1984.
The chief reason for the pessimism is a belief that too little has been done to control soaring federal budget deficits. The economists forecast the budget deficit next year will still top $200 billion, compared to an administration expectation of a $178 billion deficit next year. …