Economy stays stagnant. (Ohio)

Economy stays stagnant

Economic indicators remain mixed as investors continue to see a sluggish economy held back by the unsettled situation in the Middle East and indecision over interest rates.

Small businesses can expect tough times through mid-1991, when the sluggish economy should begin to improve, according to the American Express Climate Index, a quarterly measure of four key economic factors affecting small businesses--optimism, interest rates, demand, and operating costs.

The Climate Index recorded a .34 percent decline for the second quarter of 1990, well before the Iraqi invasion, the first drop in three consecutive quarters.

While the U.S. economy will show little or no growth for the fourth quarter, a modest recovery is likely early in 1991, adds Gail D. Fosler, chief economist for The Conference Board, New York.

The most important economic impact on the economy "appears to be sharply reduced consumer and business confidence," rather than the Middle East crisis, says Fosler.

The Board's Consumer Confidence Index edged down to 61.5 in November following a record decline in October to 62.6. The index was 115.1 a year ago (1985=100).