U.S. ECONOMY SLOWDOWN RAISES RECESSION FEARS The economy faces lackluster growth and the risk of recession this year if the recent improvement in U.S. exports should falter, economists say. Growth will slow sharply in the next months due to weakness in the key housing and auto sectors and could be further hampered unless consumer spending picks up, they say. "These factors raise the question: Is there enough strength to keep the economy from tipping into a recession?" said Lyle Gramley, chief economist of the Mortgage Bankers Association and a former Federal Reserve Board official. The Commerce Department said this week that the economy grew by a robust 4.8 pct annual rate in the first quarter, but a U.S. monetary official called it a weak report. Housing starts fell 2.7 pct in May, and consumer spending rose a weak 0.1 per cent. "Our two largest visible industries -- autos and housing -- are faltering, but exports are picking up some of the slack, " Martin Mauro, senior economist for Merrill Lynch Economics, told Reuters. Gramley said he is worried that consumer spending may slow because inflation is rising faster than real wages. To offset this, U.S. exports must continue to rise, returning enough jobs to the manufacturing sector to boost personal income and consumption, he says. "I expect to see enough improvement in real net exports to keep a recession from happening, but it is a close call," Gramley said. Federal Reserve Board Governor Martha Seger told reporters that the apparent strength in the 4.8 pct growth figure was the result of a temporary buildup in inventories that will not last and said the recovery was showing anemia. Seger said that with the recovery stumbling along, "The pace of the economy and the lack of robustness must be factored into monetary policy" - possibly a signal that the Fed will be accommodative. Most economists predict growth slower than the 3 pct forecast by the Reagan administration for 1987 and warn that if the dollar drops suddenly, higher inflation will result and add to the risk of a recession. Mauro said a 0.5 pct rise in industrial production in May came despite cutbacks in output in the auto industry, where an inventory overhang still exists. He says the boost in production came from smaller industries like paper, chemicals, and lumber which have improved sales overseas due to the drop in the dollar. "They are not going to be enough for any kind of surge in economic activity, but I think they will keep us out of a recession," Mauro said. In a speech to financial planners this week, Beryl Sprinkel, the chief White House economic adviser, predicted the trade deficit will continue to improve. "Prospects for continued economic growth through 1987 and into 1988 are still quite favorable," he said. But private economists raise concerns about a resurgence in inflation. Allen Sinai, chief economist at Shearson Lehman Brothers Inc., told Congress this week that inflation would rise to 4.5 to five pct this year and stay at that level through 1989 after a 1.1 pct increase in 1986. The rise is coming from a sharply lower dollar, higher oil and energy prices and rising prices for services, he said. "The lesson of history is that once the inflation genie gets out of the bottle, it continues to persist," he said, adding he would like the Fed to tighten credit. A major factor affecting inflation is the value of the dollar, which should continue to fall and feed inflation, says a prominent international banker. Rainer Gut, chairman of Credit Suisse, told the National Press Club that the dollar's downward trend against the yen and the mark will continue for years because the United States is the world's largest debtor nation. The Swiss banker said the economic indicators point to a further slackening of activity and called naive the belief that the five-year boom on world equity markets will go on forever. "It is very difficult to be optimistic," Gut said.