The Economy Heels

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WASHINGTON: After a torrid 5.5 percent growth rate in the first three months of 1998, the economy has slammed on the brakes, growing only 1.4 percent in the April-June quarter. But if it doesn't worry Alan Greenspan, it shouldn't worry you. "This is exactly what economists were hoping for: The beginnings of a soft landing," says TIME business reporter Bernard Baumohl. "The Asian crisis is starting to hit us, and a slowdown was inevitable. This one, especially balanced with the abnormally high first quarter, isn't so bad."

Certainly the slowdown, caused in great part by the GM strike, should spare the Fed any worries about inflation or having to raise interest rates. But with the July effects of the just-settled strike counting toward next quarter, experts are predicting more of the same for July-September. Is it time to start crying recession? Baumohl doubts it. "So many other indicators, such as consumer spending and new equipment purchasing, are still strong. There isn't much out there that's alarming." If a recession does come, it will come unannounced.