The slump: early '81 looks better
New York — A panel of noted economists and business analysts predicted Thursday the current recession will start to ease early in 1981, which it said will be a year of lower inflation but higher unemployment.
The 10-member Economic Forum of the Conference Board, an independent research group, predicted the recession would begin easing in the first quarter of 1981, leading to 0.7 percent growth in the nation's real gross national product after a 0.5 percent drop in GNP for 1980.
It said that consumer inflation in 1981 would average 9.3 percent, compared with 13.9 percent forecast for this year, but that unemployment next year would average 8 percent, compared with an estimated 7.1 percent for 1980.
The panel recommended the government stimulate the economy by allowing businesses to write off equipment costs faster, cutting taxes on interest and dividend income, and promoting research and development through tax incentives.
The Forum also predicted that producer prices would rise 9.7 percent in 1981, down from an estimated 14.2 percent this year, and industrial production would grow a meager 0.2 percent next year, compared with this year's estimated decline of 2.4 percent.