The Outlook: Matching This Upturn Against Record Setter
NEW YORK -- Assessing the business scene is always tricky, but especially so when views about the outlook shift as sharply as they have of late. Barely more than a year ago, with the economy in a growth recession, some forecasters worried that the expansion wouldn't make it through 1985, and now, in remarkable contrast, many foresee brisk economic growth through 1986 and well beyond. Some even suggest that the present upturn may eventually match the super-long expansion of the 1960s which, at 106 months, holds the longevity record. No one knows precisely how long this expansion will last, of course, but to assess its prospects it may be useful to compare the performance thus far with that of the record holder.</br></br>The latest upturn, which began in November 1982, already ranks among the most durable. At the 40-month mark, it dwarfs its immediate predecessor, the 12-month upswing of 1980-81, and it also now exceeds four other expansions since World War II -- of 37 months in 1945-48, 39 months in 1954-57, 24 months in 1958-60 and 36 months in 197073. The average duration of all business-cycle expansions comes to 33 months, so this one already is seven months longer than average.</br></br>It remains, to be sure, far short of the record-long 1961-69 expansion, when the Vietnam War was worsening. But if the consensus is remotely accurate, it soon will surpass the 45-month upturn of 1949-53. If it persists through the fall of next year, as many forecasters expect, it will top the 58-month expansion of 1975-80, the longest peacetime upswing.</br></br>The Commerce Department's index of leading economic indicators, to be sure, fell in January, but most analysts view this as a very brief interruption in a long-term rise. The barometer of future activity has risen in eight of the last nine months and further gains are widely anticipated. Last month's jobless-rate jump also is seen as an aberration.</br></br>It's not surprising, in such circumstances, that the current upturn increasingly prompts comparisons with its more durable predecessors, especially with the 1961-69 expansion. In such comparisons, the record book shows heartening similarities, as well as disturbing differences.