A Time for Revisions

Though prospects for solid economic advances for the rest of this year remain good, a strain of uncertainty in recent weeks has brought a slight dip in earlier forecasts. The main cause: the Government's downward revision of last year's estimated gross national product, which fell $4 billion below expectations, to $1,047 billion. Besides lowering the base from which 1972 starts, the revision also automatically shaves down the anticipated totals for this year by lifting the economy off into the new year on a less sharp curve than expected.

Last week members of TIME'S Board of Economists pared their earlier growth forecasts. They now expect G.N.P. increases of $91 billion to $100 billion v. earlier predictions of $94 billion to $103 billion. Not all the estimates were lowered on merely technical grounds. Board Member Alan Greenspan sees a slight deterioration in the "quality of the outlook." He cites continued high personal savings rates, less exuberant consumer buying than foreseen in January, sluggish bank-loan demand and slow inventory accumulation.

Monetarist Beryl Sprinkel believes that the lag effect of the extremely tight money policy pursued by the Federal Reserve in the second half of last year will "knock a few billion dollars off the G.N.P. in 1972." Despite these caveats, most board members agree that the economy should pick up strongly in the months ahead--if only because of the stimulative effects of the Administration's big election-year budget deficit. One early sign: the unemployment rate dropped slightly to 5.9% last month.

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