WASHINGTON (AP) â€” There are no serious threats on the horizon to the current record-breaking economic expansion, although growth will be a bit slower this year and inflation will be higher, the nation's top business executives said Wednesday.
The Business Council, composed of chief executives of the nation's largest corporations, issued a revised outlook predicting that the U.S. economy, now in a record 10th year of uninterrupted growth, is continuing to show remarkable vitality.
``The United States clearly continues to defy expectations and council members don't see too much change over the near term,'' the group said in a report presented by Sanford I. Weill, chairman of financial giant Citigroup.
For their own companies, the business executives generally characterized current business activity as either stronger than six months ago or little changed.
For the economy overall, the executives did forecast a slowdown in growth this year after three straight years in which growth as measured by the gross domestic product has been above 4 percent.
The Federal Reserve has already raised interest rates five times since last June in an effort to slow the economy and keep inflation under control.
Analysts believe there will be a sixth rate increase when the Fed meets again next Tuesday, given the fact that the economy in the first three months of this year grew at a 5.4 percent annual rate, well above the Fed's 3.5 percent speed limit.
The business executives believe that inflation will increase this year but remain in a moderate range this year and in coming years between 2 percent and 3.9 percent. Consumer prices rose last year by 2.7 percent, the fastest advance since a 3.3 percent increase in 1996.
Even though they were forecasting a rise in overall inflation, most council members said their own firms' pricing power is either weaker than it was six months ago or little changed.
Nearly all the council members reported that labor market conditions remained tight, with very few executives looking for that to change over the next six months.
In response to the tight labor markets, a majority of the business executives said they had been increasing salaries to retain employees or boosting benefits, such as sweetening company stock options.
The business executives were evenly split over whether Democrat Al Gore or Republican George W. Bush will win the White House in November, while a slim majority believed that the Republicans would retain their slim majority in the House of Representatives.
The business executives were nearly unanimous in their support for President Clinton's push to get Congress to eliminate its annual review of China's trade privileges with the United States, thereby giving China permanent normal trade status.
The Business Council is composed of more than 300 current and former chief executives of large U.S. corporations who meet three times a year to review business conditions and meet with government officials. The discussions over the next two days will take place at a resort in White Sulphur Springs, W.Va.