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The business outlook for 1988. All factors are analyzed, including consumer's activity, trade improvement, a declining dollar, the role of the Federal Reserve, and a picture of a slow-growth year for 1988. A storm is seen gathering for 1989.

Because of `policy paralysis'--unwillingness to cut budget deficits further or adopt a new monetary policy--the dollar may continue its roller-coaster ride in the foreign currency markets. US trade deficit figures and stock-market action as affecting the strength/weakness of the dollar. . See also (Newsweek, 1/18/88, 1c, 1 graph, p52, 2p) See also (Time, 1/18/88, 1 illus, p47, 1p)

Imports swelled the trade deficit from $14.1 billion in September to $17.6 billion in October. Exports did rise but failed to match the pace of the January-March quarter. The dollar continues to decline. Prospects for the economy are not encouraging.

Reports on international protectionist trade policies, giving examples of free trade disputes between the US and Japan, despite Japan's opening of its mobile-telecommunications market to foreigners, the European Community's call for monetary unity, and scheduled negotiations under the Uruguay Round of the General Agreement of Tariffs and Trade, the world trade court.

Report on the economic outlook for the US. Slow growth is beginning to look more likely than a recession; Wholesale prices; Interest rates.

Discusses the decline in US economic dominance. Considers economic rivalry with Japan; Compares the rate of Japanese investment in the US with that of Great Britain.