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365-Day Forecast

Will the economy bounce back in 2002? We'll let the experts answer that one.

This story appears in the January 2002 issue of Entrepreneur. Subscribe »

Ken Goldstein, economist, The Conference Board

"It's a recession. It certainly will last at least into the first quarter of 2002. I wouldn't be surprised if it lasted into, though not through, the second quarter of [2002]. What got us into recession is not what happened on September 11, but what happened in terms of profit squeeze. Starting in the fourth quarter of 2000, we had an extremely tight labor market. As a consequence, we had 4 percent-plus wage growth and [increased production costs]. Yet prices were only rising by about 2 percent. That began to erode profitability long before September 11.

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