365-Day Forecast
Will the economy bounce back in 2002? We'll let the experts answer that one.
Ken Goldstein, economist, TheConference Board
"It's a recession. It certainly will last at least intothe first quarter of 2002. I wouldn't be surprised if it lastedinto, though not through, the second quarter of [2002]. What got usinto recession is not what happened on September 11, but whathappened in terms of profit squeeze. Starting in the fourth quarterof 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 erodeprofitability long before September 11.
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