Abstract

The economy of the U.S. will continue to expand throughout the year and 1962 will set a new record for total business activity. Most of the nation's industries and geographic regions will share in this increasing prosperity. This is the prediction of 23 professors of the University of California at Los Angeles, California Graduate School of Business Administration in their tenth annual forecast. The 1962 forecast represent the average value of the 23 separate predictions for seven economic series. Although production and employment will rise substantially in 1962, no "superboom" with widespread shortages and strong upward price pressures is expected because of excess capacity now available in many industries. On the other hand, stock market prices, now at very high levels considering past relationships of prices to earnings and dividends, are not expected to decline very far below current levels in the year ahead. A collapse in stock prices might discourage business investment in plant and equipment and so reduce the rate of economic expansion below that predicted here.