With mounting evidence that the economy is pulling decisively out of its recession, a growing group of economists is clamoring for an immediate interest-rate hike from the Fed. Latest pronouncement from the self-styled Shadow Open Market Committee: "Monetary policy is too accommodative and must be reversed. The Fed must raise its federal funds target in order to drain the excess liquidity it provided last year." Reason: Current policy stance points toward inflation rates rising to 4%. "This is unacceptable," SOMC says.

Leading economic indicators continue to provide nothing but positive news. Conference Board's U.S. Leading Economic Index rose another tenth of a percent in April, bringing the growth rate from September 2001 to 2.9%. "The gains would have been more robust had it not been for the weakness in building permits and claims for unemployment insurance," CB says.

Don't let suppliers feed you any lines about rising wage costs in 2002. Wage pressure is now at its lowest ebb since 1996, reports Washington, D.C.-based BNA Inc. The company's Wage Trend Indicator (WTI) fell to 99.36 in first quarter 2002, representing its fifth consecutive quarterly decline. At the current level, WTI suggests companies will feel pressure to boost workers'wages by 3.5% or less through the remainder of 2002, according to BNA.

Industrial production has risen for three consecutive months. Manufacturing output hopped up 0.8% in March, its biggest increase since March 2000. High-tech industrial production has risen in five of the last six months. The first quarter annualized growth rate for high-tech production was a whopping 17% fueled by strong inventory replenishment activity. As corporate earnings begin to rally, economists say final demand (in the form of renewed capital spending) will supplant restocking activity as the primarygrowth driver.

Attention all forecasters. To enter PURCHASING Magazine's 2002 Crystal Ball economic forecasting competition, go to www.purchasing.com. Deadline for entering is midnight on June 30, 2002. Prizes: $500 for first place, $150 for second, $100 for third. Previous winners can enter, but can claim no prize money. If there's a tie in the scoring, earlier time stamp wins. PURCHASING's Web location also features links to data sources necessary for formulating forecasts. Tip: Advance first quarter GDP data was released on April 26. Final revisions to Q1 data will be out on June 27.

Tracking the high-tech economy