Add our voice to the growing chorus of prognosticators: The U.S. economic slowdown (okay, recession) looks like it will be short and shallow and will turn around by next summer.

With help from Daryl Delano, our monthly Economic Outlook columnist, we've prepared a Global Economic Forecast for 2002 (page 48) that predicts business activity will rebuild slowly next year. "Recovery throughout most of the developed world should begin to materialize by the second half of 2002," Delano says.

The global scenario advanced by the World Bank is sober, but hardly "doom and gloom." Overall, it sees world GDP growth of just 1.3 percent this year—down dramatically from the 4.0 percent gain recorded in 2000. Then, GDP gains are expected to accelerate slowly to 1.6 percent next year and to a comforting 3.9 percent during 2003.

Much of this forecast is predicated on a rebound here at home, mostly because of the importance that the U.S. economy has to the world as a whole (namely, an estimated 28 percent of global GDP). So what signs point to a mild, short-lived U.S recession? Here are five.

• By anyone's timetable, the collapse of the Taliban regime in Afghanistan was rapid if not nearly overnight. The threat of future terrorism hasn't been eliminated, but the positive implications of victory are bound to be reflected in a more positive attitude among U.S. consumers and business owners.
• On top of whatever investment tax credits and accelerated depreciation benefits any economic stimulus package will provide, Americans are already reaping the equivalent of a big tax cut in the form of lower oil prices. With oil at nearly half the price of 18 months ago, production and transportation costs can fall enough to allow serious capital-equipment investment to revive.
• There are few of what economists call "imbalances" in the U.S. economy. "Unlike the last recession, neither housing nor commercial construction markets are overbuilt," Delano says. "And manufacturers, wholesalers, and retailers have all been working for the better part of a year now to pare excess inventories." These factors all help to moderate the current downturn, as well as put the economy in a position for solid gains once the recovery starts.
• The recession's mix of lower demand and ample production capacity means that prices of most industrial commodities and supplies should rise more slowly in 2002, and this should also dampen inflationary pressures at the consumer level, Delano says. For example, the U.S. Labor Dept. forecasts producer prices to rise only 1.9 percent and the Consumer Price Index to climb only 2.1 percent next year.
• Nondurable consumer-goods makers are continuing to benefit from growth in export demand. For instance, dairy products, alcoholic beverages, pharmaceuticals and HBA items are all seeing double-digit increases in export dollar values. "U.S. manufacturers are well-positioned to improve their global market share in 2002," Delano says.

These and other positive signs (detailed in an expanded online version of Delano's article on our Web site) point to better times ahead. Now, it's up to us to help make a cloudy economic end to 2001 into a bright, sunny summer of 2002.