Economic Outlook for 1983

Twenty-nine economists met at the Federal Reserve Bank of Cleveland this March to discuss the economy. Known as the Fourth District Economists Round Table, this meeting produced a rather subdued economic outlook, indicating that 1983 would be a year of relatively slow recovery. The median of 29 forecasts anticipated real gross national product (GNP) growth of 4.1 percent over the year (fourth quarter to fourth quarter), compared with an average 6 percent increase in the first year of the six previous postwar recoveries. The expected growth, however, will not be distributed evenly among sectors; some industries that are important to the Fourth District economy, such as capital goods and primary metals, will recuperate more slowly. The Round Table economists also expressed concern about the viability of the recovery beyond 1983. Monetary policy, interest rates, and inflation psychology are variables that add a great deal of uncertainty to the economic outlook. This Economic Commentary reviews the major factors shaping the Round Table's 1983 forecast, touching on some of the uncertainties for 1984 and beyond.