More and more economists are predicting that the economy, in wimp-like fashion, will backpedal into a recession, and soon. With oil prices spiraling upward, growth may fall to zero, or below. This week will provide several important measures of the economic pulse, including the latest revision of the gross national product for the second quarter, due out tomorrow.
At last measure, GNP was seen to be rising at a barely perceptible 1.2 percent annual rate. Whether that rate has slowed still further is conjectural, but few economists are saying the economy has leaped forward. In fact, 58 percent of the 50 economists and forecasting groups surveyed in the most recent query by Blue Chip Economic Indicators are predicting that a recession will start this year or next.
Watch for: A slight upward revision in the second-quarter GNP figure, to an annual rate of 1.4 percent. An upward move would demonstrate that the nation's service sector remains vital, and that exports continue to impart some vigor. Whatever figure is revealed, watch for complaints that the number is already outdated.
AFTERTHOUGHT: If the economy does tumble into recession, blame consumers, who provide two-thirds of the country's economic activity. "To a large extent, the fate of the economy rests in their hands," said Wayne C. Stevens, president and chief executive of Duff & Phelps Investment Research Co. of Chicago.
He sees some signs of encouragement: "Despite a sharp drop in consumer confidence following the Iraqi invasion . . . there appears to be no major disruption in consumer spending patterns." The recent slowdown in spending, according to Stevens, has "enabled consumers to salt away larger portions of income into savings and pare down debt." That could form the basis of a spending rebound.
MORE EVENTS: Detroit's automakers tell results tomorrow for the middle 10 days of September. The Commerce Department reports Wednesday on orders for durable goods and personal income and spending for August. Commerce releases Friday leading economic indicators for the month.