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The economic engine that can

THE giant American economy continues to post modest growth, expanding at an annual rate of 2.4 percent for the period from July through September, according to government statistics released yesterday. That's good news, compared with the lackluster growth of 0.6 percent for the prior period. Still, the latest statistics underscore the need for particular vigilance from Washington to ensure that the recovery -- one month away from its fourth anniversary -- is kept on course. The American economy, after all, continues to be the primary engine driving the world economy.

Can the United States economy continue to expand enough to achieve 3 percent growth for all of 1986? That now seems highly doubtful, although the Reagan administration projects real growth for 1986 to come in about 3.2 percent. Still, consumer spending, which has been pushing the economy of late, is expected to taper off, at least until the year-end holiday period. Car incentives are ending. Housing starts are down. Although mortgage rates are in the 10 percent range and credit is available, the big demand for housing seen during the summer appears to have abated.

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Other elements are also somewhat worrisome: The huge US trade imbalance has yet to be substantially dented. Industrial production is posting only minimal improvements. And energy costs -- which mean higher prices for both industry and consumers -- have been rising of late. Indeed, the latest accord out of OPEC (the Organization of Petroleum Exporting Countries) could mean somewhat higher oil prices for the next few months. The latest accord, which limits production until Dec. 31, is expected eventually to unravel as member nations scramble to boost production or prices to increase export earnings. But for the short run, prices could jump by as much as $3 a barrel, according to OPEC.

What does all this mean?

It does not mean that a recession is necessarily lying in wait around the corner. Most economists expect the recovery to continue into next year. But at the same time, modest growth of 3 percent or less will not of itself provide jobs for all the entrants into the labor pool during the next year or so. Moreover, new jobs are largely occurring in lower-paying service jobs, rather than higher-paying manufacturing jobs.

Continued slow growth, moreover, means that an unexpected shock to the economy could have an adverse effect -- tugging the economy downward.

Policymakers -- the White House, the Federal Reserve Board, and Congress -- need to coordinate as much as possible to keep the recovery going. It is lamentable that the budget deficit and the US trade deficit both remain so high.

Congress has now adjourned and the White House is, commendably, deep into arms negotiations. Still, it is time for some careful eyes on the US economic scene as well. Keeping the recovery on track should be at the top of the nation's agenda.

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