Economic index rose 0.1% in Dec.

January 31, 1991|By New York Times News Service

WASHINGTON -- The government's main economic forecasting index edged up 0.1 percent in December, the first increase in six months and a sign, many analysts said, that the economy may have begun to stabilize after falling into recession during the latter half of 1990.

The report follows similar recent data on gross national product, incomes, unemployment insurance claims and orders for durable goods, all of which were less negative than many had feared.

It tended to support the widely held belief that the recession will be shorter and milder than the 11-month, 2.2 percent average decline posted by the other eight postwar contractions.

The White House spokesman, Marlin Fitzwater, said the administration was encouraged by yesterday's compilation of the Index of Leading Economic Indicators.

But Alan Greenspan, the chairman of the Federal Reserve Board, said the nation could face a long and deep recession if the war with Iraq lasts past the middle of April.

In an interview in his office late Tuesday, Mr. Greenspan said he expected a rapid rebound from the current recession if the war is "relatively short" and oil fields are not seriously damaged.

"But if you get beyond three months," he said, "you begin to risk consumer-confidence erosion, and that would abort any meaningful recovery."

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