At the same time, though, it projects private and public investment to expand 12 to 13 percent in each of the next two years.

The Administration had forecast that the economy would expand 2.4 percent in 1988.

Productivity typically expanded better than 2 percent a year before 1973.

The government reported last month that the economy expanded just 1.6 percent in the third quarter.

Capacity expanded 3.7 percent over the last 12 months, the Fed said.

"Our exports have expanded 5.9 percent in the first 11 months over the same period last year," she said.

The Administration predicts that the economy will expand 3.2 percent this year.

In fact, the economy is expected to expand 4 to 6 percent this year.

This year, it is expected to top the list again, matching the last two years' growth rates by expanding 5 percent.

It was the country's third straight year of strong growth, with the economy expanding nearly 5 percent.