Abstracts » Business

A different sameness expected in next two years

Article Abstract:

The transitional effects of tax reform are expected to have a negative effect on the US economy through 1988. Construction of commercial buildings and multi-family housing is expected to decline. Improving prospects for US trade abroad should somewhat offset the negative effects of tax reform; exports are expected to increase by 7.2 percent in 1987 (after adjusting for inflation) and by another 6.5 percent in 1988. Firmer oil prices and a declining dollar are expected to contribute to a gradual intensification of inflation. The consumer price index is expected to increases by 3.2 percent in 1987 and 4.2 percent in 1988. The composition of economic growth should shift from construction and consumer goods to more industrial goods as imports are displaced.

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Sluggish economic growth to continue two more years

Article Abstract:

Slow growth is forecast for the US economy through the 3rd qtr 1988. Consumer spending is expected to plateau or decline after three years of growth. The housing construction industry will fall into recession, partly due to the effects of 1986 tax reform. The declining dollar will help improve trade balances, but the effect will be limited by importers' reluctance to raise prices. Inflation rates are expected to increase in 1988, caused by modest pressure for higher wages and increasing fuel prices. Possible benefits hidden within the economic outlook include: trimmed construction inventory, increased household savings, and an opportunity for the new tax code to work some favorable economic effects.

Prices and rates, Inflation (Finance), Tax reform, Economic indicators, Dollar (United States), Balance of trade, Inflation (Economics)

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Auto adjustments ending with no recession in sight

Article Abstract:

Slow economic growth is expected in early 1990 while the automobile industry decreases production to eliminate excess inventories, but moderate growth is expected after the inventory adjustment is completed in spring 1990. The only imbalances in the economy will then be the budget deficit and the trade deficit. A recession seems unlikely as long as economic policy is designed to control inflation. Moderate growth is expected to continue through 1991.

Automobile industry, United States economic conditions, column

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