Top Bush economic adviser's 'rough guess' is 1% growth in first quarter

February 06, 1992|By Ed Kean and Steve Marcy | Ed Kean and Steve Marcy,Knight-Ridder Financial News

WASHINGTON -- The U.S. economy will grow at an annual rate of about 1 percent or "somewhat below" that in the first quarter, White House chief economic adviser Michael Boskin said yesterday.

"It would be a very pleasant surprise if we got up to 2 percent," Mr. Boskin said. "I think that's very unlikely in the first quarter."

He said his first-quarter estimate was a "rough guess" and not an official forecast.

Mr. Boskin said the economy will do better in the second quarter and strengthen even further in the third and fourth quarters, particularly if President Bush's economic proposals are adopted by Congress.

His comments are in line with the Bush administration's official forecast, which calls for a 2.2 percent increase in the gross domestic product this year, assuming Mr. Bush's proposals are enacted.

The administration has been predicting that the economy will remain "sluggish" early this year but pick up in the middle of the year.

There could also be a "very slight upward pressure" on inflation and interest rates as the economy begins to strengthen later in the year, Mr. Boskin said.

However, the overall "outlook for inflation and interest rates will continue low," he said.

Assuming Mr. Bush's economic growth plan is adopted by Congress, the forecast is for interest rates on three-month Treasury bills to rise to 4.9 percent in 1993 from 4.1 percent in 1992, on a fourth-quarter basis.

The forecast also sees the Consumer Price Index rising 3.3 percent in 1993 after going up 3.1 percent in 1992, also on a fourth-quarter basis and also assuming Mr. Bush's plan is enacted.

Mr. Boskin spoke about the president's economic report, which was released yesterday.

That report is prepared by the three-member President's Council of Economic Advisers, headed by Mr. Boskin.

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