Stagflation will grip the U.S. economy throughout much of next year, according to the year-end forecast of the Conference Board. Its chief economist, Albert T. Sommers, said the outlook was not for a quick return to "anything resembling normal."
He declared, "Despite the election of a much more conservative administration, we do not foresee general policies directed exclusively to the inflation issue without regard to costs."
The consensus of the board's economic forum, made up of 11 leading U.S. economists, is that real growth will be held to 1.2 percent in 1981. The Gross National Product is expected to rise by 10.7 percent but that increase will be almost entirely offset by inflation.
The panel predicts the consumer price index will climb by 10.7 percent, compared with 13.5 percent in 1980. Producer prices will go up by 11.2 percent, less than this year's 13.5 percent. Meanwhile unemployment is expected to increase in 1981, averaging 7.7 percent, up from 7.2 percent this year. Yet corporate profits before taxes will rise to $240 billion next year, up 3.8 percent after a 2.2 percent decline in 1980.
A majority of the forum's economists said they do not believe fiscal and monetary policies will have much effect on inflation because they do not touch the root causes.