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Economy to cool down, panel says

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The U.S. economy will cool in the new year though there's no risk of a recession until 1999 at the earliest, a survey released this week shows.

The National Association of Business Economists said its panel of 39 analysts sees the economy braking to a 2.4 percent annual growth rate in 1998 from 3.7 percent this year and corporate profit growth will slow.What's more, "none of the NABE panelists sees a recession before 1999," and the fallout from the crisis in Asia should have a limited impact on the United States, the survey said.

Inflation, as measured by the government's consumer price index, will be a tame 2.4 percent next year even as the 1998 unemployment rate remains low, averaging 4.9 percent, the NABE survey showed.

The panelists were questioned earlier this month.

"While all business cycles eventually end, none of the 39 economists who responded to the survey expects a recession in 1998, and only 11 think the economy will turn down in 1999," the NABE said.

When a U.S. recession does occur, it will be triggered by a policy of "tight money," the survey respondents said. That suggests the survey participants expect Federal Reserve policymakers to push up interest rates higher than the respondents believe warranted by the economy's strength.

"The burgeoning financial crisis in Asia will probably not have an impact on prospects for U.S. economic expansion over the next five years," the NABE said. "Indeed, moderate growth and low inflation are likely to continue at least through the year 2003."