President Bush's chief economic adviser said yesterday that the U.S. economy, which has been sluggish for almost two years, faces "substantial risks on the downside if oil prices stay or go up even further for an indefinite length of time."

Michael J. Boskin, chairman of the Council of Economic Advisers, said in an address to the National Press Club, however, that he was not ready "at this point" to say that the economy has entered a recession in the current quarter.

"I think is is too early to tell whether the United States will have a negative fourth quarter or whether we will enter a recession. ... I think we will just have to wait for the data for another couple of months to get a better feel for how the economy is doing," he said.

The real question about the current "lull," he suggested, is "how shallow and brief that is, or how sharp it is and how quick the rebound and how long lasting." Against the risk that higher oil prices could make things worse, "there are opportunities on the upside as well," he said.

Nonetheless, the thrust of Boskin's answers to questions, following an address on prospects for recovery among the Eastern European economies, focused on the accumulating weaknesses in the economy. Bush recently held a brainstorming session at Camp David with Boskin, Treasury Secretary Nicholas F. Brady and other key officials on a potential game plan to deal with economic problems.

Boskin emphasized that one element contributing to the downturn has been a shrinkage of credit available to business, and he raised the possibility that "some regulators" of the nation's savings and loans may have been "overzealous at times."

He said "we need to make sure that {regulators} are prudent and do enforce the safety requirements and discharge their obligations appropriately. But I think that it's likely the case that some, seeing the S&L situation, have perhaps inadvertently overreacted."

As he did in an address last week, Boskin avoided the word "recession." "I think regardless of what one calls it, clearly the economy is at best in a sort of lull with little growth," he said.

The rise in oil prices since Iraq's Aug. 2 invasion of Kuwait has already assured that "we will take some hit to real GNP and employment for the next couple of quarters." But Boskin pointed out that the traditional definition of recession as at least two consecutive quarters of downturn in inflation-adjusted gross national product "is neither a necessary nor a sufficient condition. We have had recessions that ... lasted shorter" periods of time "and sometimes we have had two negative quarters that were not thought of as recessions."