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RATAJCZAK ISSUES QUARTERLY ECONOMIC FORECAST

 ATLANTA, May 12 /PRNewswire/ -- The following quarterly economic forecast, written by Donald Ratajczak, director, Economic Forecasting Center, College of Business Administration, Georgia State University, was issued today:
 In the past year Atlanta created jobs five times as fast as the nation. The nation should create only slightly more than a million jobs this year and 1.6 million in 1994, far below the 2 million per year that the Clinton administration set as its goal. Nationwide, the unemployment rate should fall to 6.9 percent this year and should average 6.5 percent in 1994.
 U.S. economic activity should grow 3 percent both in 1993 and in 1994. Consumer prices should rise only 3.4 percent in 1993, but then rise 3.6 percent in 1994. This inflationary increase will be caused by the price effects from a predicted energy tax and increasing trade restraint over the next two years. Interest rates should remain modest. The prime rate will average 6 percent this year and remain below 7 percent until the end of 1994. Mortgage rates should rise by less than half a percentage point in the next two years.
 Metro areas in Georgia will benefit from nearly all the job growth during 1993. Savannah, Ga. is showing the largest percentage gains, followed by
Columbus, Ga. Job losses in smaller urban areas and in rural Georgia nearly offset those gains. However, Atlanta should generate 60,200 new jobs in 1993 and an additional 57,100 jobs in 1994. Job growth in all of Georgia is projected to be 62,100 in 1993 and 65,200 in 1994.
 A relapse into recession is not anticipated during the next two years. However, reduced military spending and higher taxes will restrain economic growth. Strong gains in capital spending and a rebound in the economies of the industrial world in 1994 will provide enough economic stimulus to offset the weaknesses from reduced government military spending and higher taxes.
 Both autos and housing will be strong performers in the next two years. As the apartment construction market slowly revives, housing starts should exceed 1.4 million early in 1995. Auto sales should rebound by more than a million during the next two years, and more cars will be made in the United States.
 The stock market values will reflect the improved quality of corporate earnings as corporations improve their balance sheets with interest rates at the lowest in 20 years. The Dow Jones Index may reach 3700 before the end of 1993 before a mild correction materializes in 1994.
 -0- 5/12/93
 /CONTACT: GSU Economic Forecasting Center, 404-651-3282, or Public Affairs, College of Business Administration, 404-651-2605/


CO: Georgia State University Economic Forecasting Center ST: Georgia IN: SU:

RA-BR -- AT012 -- 7560 05/12/93 12:02 EDT
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Date:May 12, 1993
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