The consensus forecast among economists is that the economy will pull out of the recession during second quarter 1991. However, the recovery will be weak when compared to past expansions, during which the economy rebounded with growth rates of 5 percent or more. Further, economists are worried that there is a real possibility the nation could slide back into recession as there does not seem to be any sector of the economy that is in a position to serve as a catalyst for robust growth. 

     There is general agreement that the Gross National Product will grow by approximately 0.5 percent during second quarter 1991, by 2.2 percent in third quarter, and 2.4 percent during the last three months of the year. Expansion during the first six months of 1992 will fall into the 12.3 percent to 2.7 percent range. However this forecast represents an average, with some economists being more optimistic and others expressing more pessimism about the economy than these numbers would suggest. 

     The reason that this recovery may be so weak when compared to other expansions since the end of World War 11 is predicated on the very factors which pushed the country into recession. These factors include cutbacks in consumer spending, caused by poor growth in personal income, high debt levels, and the depreciation of real assets in many parts of the country. On a happier note, recent reports suggest that businesses are planning to increase the amount of investment spending, consumer confidence is rising and construction activity has strengthened to some degree. However tight lending practices by financial institutions in response to government regulatory pressure and an oversupply of buildings in many of the nation's key markets continues to place a drag on the economy. 

     In the area of fiscal policy, the deficit problem in Washington and the fact that over half of the states are now experiencing difficulties in balancing their budgets suggest that little additional fiscal stimulation will come from the government sector in the months ahead. Thus, the traditional approach of addressing a recession by increasing governmental expenditures or lowering taxes seems a remote possibility. A radical change in monetary policy by the Federal Reserve Board is not likely. Recent statements by Alan Greenspan indicate that he believes the economy is on the road to recovery and therefore massive injections of. new reserves and a further easing of credit conditions are unwarranted. To change policy at this time would be inconsistent with the non-inflationary stance of the Fed. 

     Finally, in the international arena, the dollar has trended upward appreciating in value against many of the world's key currencies. This coupled with the fact the many other parts of the world are also experiencing an economic slowdown makes it unlikely that exports will be a major force in propelling the U.S. economy into a rapid expansion. Thus, while the economy appears to be pulling out of the recession, there are many factors that suggest the recovery will by weak.