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Forecasters expect weaker growth and higher inflation over coming quarters, with recession risk rising due to oil prices even though leading indicators are mixed. Panelists discuss crude oil price ranges, potential mitigation via reduced demand and OPEC supply, and scenarios for real GNP growth through 1991, including delayed output effects and faster inflation transmission.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/the-outlook-after-the-oil-shock-between-iraq-and-a-soft-place-discussion/324742/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/the-outlook-after-the-oil-shock-between-iraq-and-a-soft-place-discussion/324742.png","ImageObject",300,407,{"name":92,"@type":93},"Miles","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-27","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",17,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What was the main focus of the latest Fourth District Economists' Roundtable meeting?","Question",{"text":113,"@type":114},"The meeting focused on the effect of the oil price shock on the U.S. economy and the likely outlook for growth and inflation.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"How do participants define recession in the pre-oil shock discussion?",{"text":118,"@type":114},"A recession is described as a persistent and pervasive contraction in economic activity, not just two consecutive quarterly declines in real GNP.",{"name":120,"@type":111,"acceptedAnswer":121},"What overall growth and inflation outlook do forecasters expect after the oil shock?",{"text":122,"@type":114},"Forecasters expect growth to stagnate in the near term, then rise during 1991, while inflation pressures extend over subsequent quarters, with output effects potentially lagging the shock.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},324742,1790438423,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},13056703019404,"https://ap-avatar.wpscdn.com/davatar_29158cc5080c5b710cf443261637dec0","by John J.Erceg  \nand Lydia K.Leovic  \nTnefect ofAugustsil pice shockon the U.S.economy was the main focusofattention at the latest meeting of theFourt District Economists'Roundiable,held September 14 at the Federal ReserveBank of Cleveland.The price shockcame at a time when the growth rate ofthe economy was already sluggish and,according to some analysts,movingtoward a recession.The 27 forecasters,representing manufacturing,trade,andfinancial institutions,predict sustainedeconomic growth through 1991,but theyalso anticipate that higher oil prices willcause a further slowdown over the nextfew quarters.Participants also expect thatthe inflation bubble that began in thethird quarter of 1990 will extend at leastinto the first quarter of 1991.  \nA majority of the panelists believe thatthe price of crude oil will averagebetween $25 and $30 per barrel throughthe balance of this year,but revert to$20 to $25 per barrel in 1991.Someexpressed the cautiously optimisticview that no oil shortage will occurduring the fourth quarter.These partici-pants believe that reduced demandcoupled with increased production bysome OPEC nations will compensatefor the net loss caused by the Iraqi/Kuwaiti oil embargo.Additionally,noshortage of petroleum products,includ-ing gasoline and distillate fuels,isexpected this year.That outcomeassumes,of course,that there will be no  \n# The Outlook After the Oil Shock:Between Iraq and a Soft Place\n\nfurther disruptionin the supply of crudeoil,especially from Saudi Arabia.  \n## ■ A Pre-Oil Shock Recession?\n\nThe first issue confronted by Round-table participants was whether the U.S.economy was in a recession even beforethe August invasion of Kuwait.TotalU.S.output (real GNP)has been risingat an average annual rate of only 1.5percent since the spring of 1989,whichis less than one-half the average annualgrowth rate attained over the first sixyears of the current expansion.A vari-ety of other data for June and July sug-gested to some business analysts thatthe economy was indeed borderingon arecession by early August.  \nWhat is a recession?According to onebusiness-cycle expert and Roundtablepanelist,it is a persistent and pervasivecontraction in economic activity.It isnot,as some commonly assume,simplytwo consecutive quarterly declines inreal GNP.For example,the breadth anddepth of the economic contraction dur-ing the first six months of 1980 weresufficient to warrant a declaration ofrecession by the National Bureau ofEconomic Research(NBER),althoughthe decline in real GNPlasted only onequarter.'On the other hand,real GNPdecreased in the second quarter of 1986,and yet that episode(along with severalothers that occurred during the 1960s  \nOctober 15,1990  \nThe Fourth District Economists'Roundtable met last month to discussthe economic outlook in the wake ofthe Iraqi invasion of Kuwait.Thepanelists expect a weaker economyand more inflation for severalquarters,followed by a return tomore normal economic conditions.Participants also discussed possiblemonetary policy responses to the risksof recession and higher inflation.  \nand 1970s)was not judged by theNBER as consttuting a recession.  \nAre current economic indicators signal-ing a recession?According to Round-table participants,the answer is not yet,although it is admittedly difficult to dis-tinguish between an economic slow-down and a recession until well afterthe fact.  \nThe Composite Index of Leading Indi-cators has remained relatively flat inrecent months,evidence of a continueddownturm in economic growth but notof a classical recession,since no cleardecline hasoccurred.²In addition,theDiffusion Index of Leading Indicatorshas been hovering around zero (ratherthan below zero,as it does in reces-sions),while the Composite Index ofCoincident Indicators is still positive,atleast through June.However,a slightdecline in the latter index occurred inJuly (the latest month for which data areavailable).The Long-Leading Index,which correlates highly with GNPandconfirms the more co","cbCaiu6UpWjvuMuO","https://ap.wps.com/l/cbCaiu6UpWjvuMuO","pdf",1146682,"English","# The Outlook After the Oil Shock: Between Iraq and a Soft Place\n## A Pre-Oil Shock Recession?\n## The Overall Outlook","[{\"question\":\"What was the main focus of the latest Fourth District Economists' Roundtable meeting?\",\"answer\":\"The meeting focused on the effect of the oil price shock on the U.S. economy and the likely outlook for growth and inflation.\"},{\"question\":\"How do participants define recession in the pre-oil shock discussion?\",\"answer\":\"A recession is described as a persistent and pervasive contraction in economic activity, not just two consecutive quarterly declines in real GNP.\"},{\"question\":\"What overall growth and inflation outlook do forecasters expect after the oil shock?\",\"answer\":\"Forecasters expect growth to stagnate in the near term, then rise during 1991, while inflation pressures extend over subsequent quarters, with output effects potentially lagging the shock.\"}]","The Outlook After the Oil Shock: Between Iraq and a Soft Place - Discussion | PDF",1789968748,13]