If you are a candidate for president this year, the American economy likely will provide you plenty of campaign ammunition whether you want to point to developments with pride or with alarm.

On the pride side, the economic ex-pansion is expected to be entering its seventh year around Election Day next November, with civilian unemployment hovering around 6 percent, inflation close to 4 percent and the trade deficit finally falling.

But you could sound alarms, particularly in the first half of the year, as the economy skirts a recession with the gross national product rising at only a 1 percent annual rate or less. For the second year in a row, workers' real wages will be falling. And while the trade deficit will be shrinking, the nation's need for foreign capital to finance its total deficit with the rest of the world will not. The troublesome federal budget deficit will be increasing again.

Meanwhile, Federal Reserve officials will be keeping a watchful eye on the stock market, still not sure that the danger of another collapse has passed.

This outlook for 1988 is encompassed in the forecasts of a variety of private economists, and for the most part by the latest official projections of the Reagan administration. The administration, as usual, has given no quarterly details to go along with its forecast that GNP, adjusted for inflation, will go up 2.4 percent between the fourth quarter of last year and the fourth quarter of 1988.

A rise of 2 percent or 2.5 percent in real GNP -- the total output of goods and services in the United States plus earnings on net U.S. investment abroad -- would represent a significant slowdown from last year's increase of about 3.75 percent and would be the lowest since the recession year of 1982.

However, since labor productivity -- output per hour worked -- is likely to continue to go up quite slowly for the economy as a whole, even growth of 2 percent or so should provide enough new jobs to allow people joining the work force in 1988 to find work. Indeed, the administration forecast shows virtually no change in the unemployment rate -- 5.8 percent in December for civilian workers -- during 1988. Somewhat slower economic growth or slightly better productivity gains could mean a modest rise in unemployment this year.

The major policy question for 1988 is how the Federal Reserve will respond to this slower growth if it occurs as predicted. As the administration put it in announcing its forecast, "The Federal Reserve's pursuit of an appropriate monetary policy is especially important for the forecast for 1988. This means monetary growth in line with the Federal Reserve's targets that will sustain economic expansion without raising the risk of accelerating inflation." Translated, that means administration officials want the Fed to pump enough money into the nation's banking system to make very sure an economic pause in the first half of the year does not turn into something worse.

At a Joint Economic Committee hearing last week, economist David Wyss of Data Resources Inc., a Massachusetts economic consulting and forecasting firm, declared, "At the present time, the Federal Reserve is waiting to see the whites of the recession's eyes before it alters monetary policy. Unless its eyesight is very good, it risks acting too late.

"On the whole, I wish that the Fed were a little more afraid of a recession right now and a little less afraid of inflation," Wyss said.

Some senior Federal Reserve officials say they would not be troubled by less economic growth this year than last, or by a significant slowing in the first half, but they have no intention of waiting idly for a recession to hit.

Declared one official, "My own feeling is that things look pretty good right now. The adjustment is going on. Less consumption will help the trade deficit and ease inflationary pressures further.

"If we felt domestic demand was not collapsing, and that much of the slowdown was due to a swing in inventories, then we might not respond," the official said.

That does not necessarily mean interest rates might not decline in coming months. If the slower growth generated pressure in financial markets for lower rates, the central bank probably would not resist. "That would be a passive reaction," the official explained. "We would be avoiding a tightening. That scenario would not set the stage for an aggressive easing."

But if the economy were to begin to look really weak as a result of continued declines in consumer spending and falling business investment, the official predicted the Fed would respond quickly and as aggressively as need be to put the economy back on track. If there were a recession, he said, "it would only get as bad as we let it."

To critics like Wyss and some Reagan administration officials, the issue is a matter of risk of recession. To Fed officials, it is also a matter of risk of triggering a dollar "free fall." A distinct move toward an easier monetary policy could, the officials fear, hurt the dollar badly only a few weeks after central banks around the world bought billions of dollars worth of the currency to prop up its value on foreign exchange markets.

After the report that the merchandise trade deficit narrowed sharply between October and November, the dollar strengthened somewhat, but most analysts still expect it to decline again. Lower interest rates in the United States following an easing of Fed policy could affect the dollar by making foreign investors less willing to invest their money in the United States -- unless interest rates in other industrial countries came down, too.

If the dollar were to weaken abruptly after the Fed eased policy, the central bank might have to reverse course abruptly and boost rates to support the U.S. currency. That could more than undo any economic benefit from the policy easing, Fed officials worry.

The key to the economy in 1988, in just about everyone's forecast, is a reduction in the inflation-adjusted trade deficit. For instance, William C. Melton, chief economist of IDS Financial Services Inc. in Minneapolis, expects real GNP to increase a modest 1.9 percent during 1988. More than half that growth in output will come in the form of exports, cutting the real trade deficit, as calculated in the GNP accounts, by about one-third over the course of the year.

If exports go up more than imports, it adds to demand for U.S. goods and therefore boosts overall economic growth. According to Melton, the economy's expansion in the first half of this year will be due to exports. Spending in the other parts of the economy, taken together, will be declining.

Economist George Perry of the Brookings Institution has a similar forecast. "We are looking at pretty weak numbers in the first half," said Perry, who thinks real GNP will rise around 2 percent this year. Consumer spending, business investment in capital equipment and new housing construction will contribute to the weakness. One reason for the particularly small gains in the first half will be a cut in the rate at which businesses are adding to their inventories, Perry said.

Consumer spending is already weak. It was strong last year only in the third quarter when a resumption of pricing and financing incentives helped auto makers clear out many of their unsold 1987 models. With that one good quarter offset by declines in the first and probably the final three months of the year, consumer spending increased 1 percent or less during 1987. In each of the previous four years, consumer spending had gone up more than 4 percent after adjustment for inflation.

So far there are few signs that the stock market plunge on Oct. 19 has had a major impact on consumer spending. The latest survey of consumer attitudes by the Institute for Social Research at the University of Michigan found that last month consumer confidence recovered about one-third of the ground it lost in the previous two months.

But changes in wealth, such as the losses associated with the October market drop, affect spending with a substantial lag, and analysts say it could still be a factor in spending levels this year.

The weakness in spending last year showed up well in advance of October. It was due to a variety of factors, including earlier slowdowns in gains in real disposable income by households. Even hitting last year's level of spending meant that personal saving as a percentage of disposable personal income dropped to the unusually low level of 2.8 percent in the third quarter. This year, Perry said, the savings rate will begin to move back toward more normal levels of 5 percent or so.

Other factors behind the weak consumer spending last year were the relatively high level of consumer debt compared to income, and the fact that since the 1981-82 recession households generally have stocked up on consumer durables, such as cars, furniture and appliances.

Most analysts believe a fourth quarter drop in consumer outlays left retailers and some wholesalers with unwanted inventories, which will have to be worked off in the first part of this year.

While consumers are retrenching, and triggering a mini-inventory cycle, businesses continue to be cautious about capital spending. There, Perry believes, the stock market may be partly responsible. "We may be seeing a scared business sector," he said.

The decline in stock values meant that companies became more highly leveraged -- that is, the ratio of their debt to the market value of their assets increased -- making them generally less willing to take on more debt to finance new investments.

The latest forecast from Wyss' firm, Data Resources Inc., shows business investment in equipment and structures going up only 2 percent in real terms over the course of 1988.

Meanwhile, the housing sector is more likely to be a minus rather than a plus for the economy this year. The Commerce Department reported last week that new housing starts dropped 16 percent in December, a much worse performance than most forecasters had expected. Some analysts think starts will bounce back a bit in the January figures. But actual construction spending, which is what counts for GNP, will likely be lower in 1988 than last year.

The remaining significant sector of the economy, government, could also turn out to be a drag on economic activity as efforts to hold down federal government spending to reduce the budget deficit affect purchases of goods and services. State and local government spending probably will continue to rise but only at a 1 percent or slower rate after adjustment for inflation.

As for inflation, it shows few sign of accelerating at the moment. Consumer prices, which had gone up at a 5.5 percent annual rate in the first half of 1987 when oil prices were shooting up, rose at a 3.4 percent pace in the second half. In the last three months of the year, the rate of increase was only 3 percent.

Some commodity prices, such as those of most metals, textiles and chemicals, are still going up strongly in response to tight market conditions. And prices of a wide range of imported goods are rising rapidly in response to the fall in the value of the dollar. But producer prices for finished goods nevertheless fell in the fourth quarter.

Nor has there so far been much of an acceleration in the rate at which wages are going up. The Labor Department's index of hourly earnings rose 2.7 percent in the 12 months ended in December. That was up from 1.9 percent during 1986, the smallest increase on record. The biggest gains, however, came last year in finance, insurance and real estate -- the so-called FIRE sector -- where hourly wages rose 4.6 percent, and in services, where they went up 4.8 percent.

Following the October stock market plunge, employment is falling in the FIRE industries and there are indications hiring in services is also beginning to slow down. In manufacturing, the earnings index increased 2.1 percent, less than the probable rise in productivity in that prospering sector.

Again, how all this adds up in an election year depends on what kind of arithmetic one wants to use. In 1987, there were plenty of signs that the United States was suffering from imbalances in its transactions with the rest of the world. The dollar had to be propped up by massive buying of the currency by central banks here and abroad, and interest rates rose in both the spring and fall as the Fed moved to help the dollar and head off what it called rising inflationary expectations in financial markets.

Now Fed officials say the financial markets are indicating participants believe there will be lower inflation ahead, not higher. If that continues, it could set the stage for lower interest rates.

Whatever policy course the Fed follows, it may not be possible to extend the economic expansion indefinitely. Another witness at one of last week's Joint Economic Committee hearings, Alan Sinai, chief economist of the Boston Co., a Shearson Lehman Brothers subsidiary, observed, "The string is running out on the expansion. The question at this time is less one of whether a downturn will occur but when and how much."

But Sinai said the downturn was more apt to come in 1989 than in 1988. And that's not an election year.