President Carter is facing an incumbent's nightmare in 1980: An inflation that will continue at double-digit rates at least through the spring primaries, and a recession that may hit bottom somewhere around Nov. 4.
To be sure, economists usually don't date their forecasts with quite that much precision. For now, their assessment simply is that the long-expected slump finally has arrived and probably will reach its trough in summer or fall.
Significantly, however, most forecasters now see virtually no chance that things will turn out better than their prediction imply. Rather, if anything, they say the odds are that the economy will prove much worse.
This makes the second year in a row that economicst have been predicting a recession. The first, slated for 1979, did not clearly materialize because the economy proved more robust than expected. Most say it is under way now.
The major reason the recession didn't come as forecast was that consumers changed their patterns in responding to inflation. Instead of pulling back as a result of the price surge, Americans continued spending because of it.
At the same time, U.S. exports increased sharply, partly because of the past few years' declines in the dollar. That kept employment levels here rising rather than falling off as had been expected.
And declining productivity buoyed the job market further. The dip meant it took more hours of work -- and sometimes more employes as well -- to produce a given quantity of goods and services.
But analysts say there are serious questions about how long this spending surge can continue -- a fact that leads them to be more insistent than ever that the recession finally is on the way.
The reason consumers were able to keep spending in 1979 even in the face of a decline in real income was that they financed their continued spree through the back door.
They dipped into savings much farther than they had in previous years. Wives went back to work in record numbers to help bolster family incomes. And homeowners refinanced their houses to tap their housing equity for cash.
But those avenues are closing now. Savings rates have dropped to near-record lows. Job growth is slowing down. And tight money policies are crimping the housing market. Some say consumers may be about to retrench.
There also are these factors to consider:
The Federal Reserve Board's Oct. 6 credit-tightening has brought on a downturn in the housing industry that threatens to continue well into the second half of the year. The crackdown was intended to help dampen inflation. s
The auto industry, another of the economy's staples, also is in a slump, with little improvement expected soon. A downturn in autos, as in housing, tends to have a "ripple" effect throughout the economy.
Inflation is continuing at a double-digit pace, seriously eroding the purchasing power of consumers. More and more families are up to their ears in debt. Wages aren't keeping pace with prices and some belt-tightening is likely.
New boosts in crude oil prices, both by the oil-exporters' cartel and as a result of President Carter's decision to lift price controls on U.S. crude, are expected to serve as an increased "tax" on both business and consumers.
Actual taxes will be increased, also,as inflation pushes Americans into higher and higher tax brackets. In addition, upper-middle-income taxpayers will be paying more in Social Security taxes this year than last.
As a result, economists are predicting that events finally will catch up with their forecasts.
Muses Arthur M. Okun, former Johnson administration economic adviser: "I still think that all those factors will produce a recession -- one of these days." Other economists express similar views.
Their forecasts point to these developments:
GROWTH: The nation's "real" output will decline by 1 1/2 percent between now and year's end, reflecting a recession in the first two or three quarters of this year followed by the beginning of lackluster recovery.
Most forecasters are predicting the dip from peak to trough will be between 2 and 2 1/2 percent, with the hardest-hit sectors likely to be housing, autos and consumer spending. Real output most likely rose just over 2 percent in 1979.
INFLATION: Inflation, as measured by the consumer price index, will ease slightly to between 10 and 11 percent over the next 12 months -- down from 13 percent for 1979 and 9 percent for 1978, but still rapid by any measure.
But forecasters caution relief from the current 13 percent rate probably won't come until summer, if it comes at all. And much of that may stem from declining mortgage rates, which affect relatively few Americans at any time.
UNEMPLOYMENT: As a result of the recession, the jobless rate is considered likely to rise to between 7 1/2 percent and 8 percent, from the 6 percent or so at which it has hovered for the past 18 months.
Most analysts are predicting that joblessness still will be climbing in November -- the worst possible time for Carter. And a weak recovery could keep it going up well into 1981.
That all adds up to what Okun now describes as "a middle-sized recession" -- deep enough to be visible to most Americans, but still well short of the 1974-75 slump.
What's more, Alan Greenspan, President Ford's chief economic adviser, predicts seriously that it's not beyond the pale that the slump will reach its low-point "around election day."
(A brief pause in the recovery -- and a temporary rise in the jobless rate -- helped defeat Ford in 1976.)
All that assumes, however, that the U.S. doesn't go to war in Iran, that the oil-exporters' cartel doesn't boost crude-oil prices again and again, that the Fed doesn't tighten money further and that the dollar doesn't plunge again.
If any of those developments occurs, then all bets are off again, says Otto Eckstein, former Johnson administration economic adviser who now heads Data Resources, Inc., the Massachusetts-based economic consulting firm.
Eckstein says the "spooky thing" in this year's economic outlook is not so much any major domestic uncertainties as the foreign exchange costs of oil, which he says could reach $91 billion -- enough to skew the outcome visibly.
Apart from the various forecasts for the nation's economic performance, there also are these predictions on how individual industries will fare in 1980.
The most certain are for autos and steel: Both are suffering from massive internal changes to meet import competition and, in the case of autos, new marketing realities of high-cost gasoline and mileage standards.
And in both cases the adjustment will be slow.
But other key industries are expected to post strong performances: Information processing -- comprising the entire gamut of computers, electronic communications, silicon chips and the like -- is apt to continue its rapid growth.
And the machinery and chemical industries are likely to remain strong through 1980 -- the first because of retooling in the auto industry here at home and the second from heightened prospects for sales overseas.
For other industries, the outlook is mixed: Oil profits are expected to remain large, though slightly crimped by the pending "windfall profits" tax. Food and paper are expected to make acceptable showings.
And transportation is expected to fall off, particularly if the recession takes hold in force.
At the same time, the impact of any recession is expected to vary widely from region to region.
The defense-oriented West Coast, for example, already is gearing up for Carter's promised step-up in military procurement spending. And the South is still benefitting from the population flow into the Sun Belt.
The heavily industrial areas -- big cities, such as Detroit, which is so largely dependent upon auto production -- are expected to be hurt worst.
Still, to most economists, the major factor nationally in 1980's outlook is the mood of the consumer:
If spending continues despite the statistical loss in real income, the slump could be mild indeed. If consumers retrench sharply, analysts say the downturn could turn out to be fairly substantial.
As of now, it still is too early to predict precisely how consumers will respond. Polls vary widely from week to week, and outside factors -- such as the situation in Iran -- are bound to color consumers' optimism significantly. t
The odds now are that at least some retrenchment will occur, particularly in view of the crimp in mortgage money, which both dampens refinancing of home mortgages and casts a psychological pall over other transactions.
The question is, how far will it all go?
Meanwhile, the forecasters both in and out of government are keeping a low profile this year in the face of the increased uncertainty, with few venturing to insist flatly that anyone's economic predictions are going to come true.
Perhaps no one is as aware of these uncertainties than Carter, who has put off consideration of the expected election-year tax cut until spring, in part because the situation still is so cloudy.
So far, White House planners are betting that it still will make better politics this year to be battling inflation than to be countering a recession. And voters aren't yet blaming Carter for the economic situation.
But top White House political strategists concede they're not at all sure that will be true on Nov. 4.