A U.S. recession is "very much an open question - a matter of judgment and forecast by economists and not a matter of reality," a leading U.S. bank economist said today.
Frederick W. Deming, senior economist and vice president of Chemical Bank of New York, said that a U.S. recession has noot started, and he rejected the widely held view that the U.S. economy is in a downspin. Deming conceded that consumer purchases are lagging in ley areas such as autos and housing.
He told clients at the bank's Canadian subsidiary here that, although auto sales are down from a 12 million annual rate a year ago, an "11.1 million rate in May isn't bad."
Housing starts of 1.7 million to 1.8 million units have been predicted for this year, down from 2.1 million in 1978.
These reductions from the very high rates a year ago don't necessarily mean an economic slump is inevitable, said Deming, who formerly served with the Federal Reserve Bank of New York and on a number of U.S. federal bodies.
He doesn't believe stock markets and foreign exchange markets have fully adjusted to the impact of rising oil prices on the U.S. economy. He said the current U.S. gasoline price of about $1 a gallon is still cheap by world standards.