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To: pbull who wrote (1702)	6/10/2001 9:53:44 AM
From: stockman_scott	Respond to of 13815

U.S. Economy on Thin Ice, Blue Chip Poll Says Sunday June 10, 12:24 am Eastern Time <<WASHINGTON (Reuters) - The U.S. economy should manage to escape a full-blown recession but its growth is meager and it is ''skating on thin ice,'' the closely watched Blue Chip survey of economists said on Sunday. ``A large majority of our panel members continue to believe the U.S. economy will manage to avoid suffering even one quarter of negative GDP (gross domestic product) growth, much less the two consecutive quarters that traditionally define a recession,'' Blue Chip Economic Indicators said in its latest monthly poll. ``But faith in that favorable outcome is being tested on an almost daily basis as one indicator after another signals that activity in many key sectors of the economy continues to deteriorate,'' it added. Blue Chip said that in the most recent consensus forecast, private economists slashed its projections on second-quarter economic growth to 1 percent from 1.5 percent in the survey a month ago. They predicted growth would accelerate to 2.1 percent in the third quarter and 3 percent in the fourth -- rates that experts believe would still leave the economy with plenty of slack. Economists expected that the economy would get some help from the Fed's sharp interest rate reductions, plus the recently enacted tax-cut package that gives American households lump-sum rebate checks of up to $600, with a gradual lowering of income-tax rates. ``But the economy currently appears to be skating on thin ice,'' Blue Chip said. As indications of the fragile state of the economy, the survey cited, among other things, the dismal data on the factory sector and the May U.S. employment statistics. The government said the jobless rate fell to 4.4 percent in May from 4.5 percent in April. But the drop in unemployment came about because American left the labor market in droves as the prospects for getting new jobs weakened. The economy shed 19,000 jobs in May, the second straight monthly drop.>>