The nation's top economic forecasters, who just a year ago were predicting a recession this year, now say the economy will avoid a decline through 1991 and set a new record for business expansion.
The latest survey of 68 professional forecasters by the National Association of Business Economists found 82 percent saying the economy would continue to advance slowly through the end of next year.That reversed the findings of a similar poll last May that found 63 percent of the economists believing a recession would occur this year. Ninety-six percent of those polled for the current survey now rule that out.
If growth continues through 1991, the expansion will have lasted 109 months, topping the previous record when the economy grew 106 months during the Vietnam War years from February 1961 to December 1969.
The current expansion began 90 months ago in November 1982 at the end of the last recession.
The survey was conducted in April and May.
But despite seeing no recession, the forecasters do not foresee strong economic growth either.
"The outlook for 1990 is for slower economic growth than in 1989," when the economy advanced 3.0 percent, the survey found. "Weaker increases in real consumption and business spending on plant and equipment combine with a smaller improvement in the trade deficit to cause much of the slowdown."
The economists also predict unemployment to rise from 5.2 percent in 1989 to 5.4 percent this year. Automobile sales will fall from 9.9 million last year to 9.6 million this year. Housing starts will remain unchanged at 1.39 million.
Overall, the forecasters said the economy as measured by the gross national product would grow 2.0 percent this year and 2.4 percent in 1991. The GNP is the total output of goods and services.
At the same time, the forecasters said inflation, which rose 8.1 percent in the first quarter, reflecting in part weather-related jumps in food and energy prices, will drop to an annual rate of 3.7 percent in the final nine months of the year. That would make the 1990 inflation rate 4.7 percent, down from 4.8 percent in 1989.
On the twin deficits, the economists said trade would fall from a $53 billion imbalance in 1989 to $44 billion this year while the federal budget gap would continue to widen.
The economists forecast a budget shortfall of $154 billion in the fiscal year ending Sept. 30 and $135 billion in fiscal 1991.
The Gramm-Rudman balanced budget law sets deficit targets of $100 billion this year and $64 billion in 1991. The actual deficit for fiscal 1989 was $152 billion.
Interest rates, which are blamed for the current economic sluggishness, are projected to remain near their current levels this year before declining slightly in 1991, the forecasters said.
Rates for 90-day Treasury bills will edge down from 7.9 percent in June 1990 to 7.8 percent at year's end and 7.7 percent by the end of 1991, they predicted. Rates for 30-year Treasury bonds will fall from 8.7 percent next month to 8.6 percent in December and 8.4 percent at the end of 1991.