(FORTUNE Magazine) – So slow the growth of what is excellent . . . William Cowper, 1731-1800

IN AUGUST this excellent economic expansion enters its 81st month, passing the boom of World War II to become the nation's second longest ever -- and slow growth is certainly the order of the day as GNP wafts gently upward. The overall rate has been lower than the average of previous postwar expansions and particularly moderate in recent quarters, avoiding boom and bust. But growth must continue for better than two more years to surpass history's longest crescendo, the 106-month run that lasted for most of the 1960s. What are the prospects? On the plus side, some of the forces friendly to the expansion should linger. The service sector will continue to swell; that helps because demand for services is less prone to plunge than demand for manufactured goods. Labor costs have not exploded, even though unemployment is quite low, a past harbinger of inflation and the end of the party. Foreign competition has hit / industries where unions are strong, like autos and steel. And, says business cycle expert Geoffrey Moore of Columbia University, the Federal Reserve has shown deftness in fighting inflationary monsters without murdering the expansion: ''You've got to give Greenspan credit for keeping the lid on the money supply.'' But the expansion has depended on luck too, and luck may be a nonrenewable resource. Oil prices collapsed. ''Rolling recessions'' in different parts of the economy -- oil country, the farm belt -- kept activity from getting overexuberant. The high dollar helped keep prices down through the middle of the decade; the low dollar that followed reopened export markets as consumer demand fell off at home. With growing international trade and capital flows linking countries more tightly, the long recoveries abroad helped the recovery in the U.S. The sort of bad news that was a hallmark of the 1970s -- price controls, the OPEC oil embargo, the Iranian revolution -- was mercifully absent in this decade. The present climb has come with a price tag that may in the end be its undoing. Says Nobel laureate James Tobin of Yale: ''The expansion has seen a particularly bizarre mix of policies -- a very profligate fiscal policy and a very tight monetary policy.'' The Fed can only do so much to restrain inflationary pressures without bringing growth to an end. By late 1990, when prices will be accelerating at a 5.5% rate, Alan Greenspan may run out of maneuvering room. Yet, barring shocks, most economists agree that the economy can grow at about a 2.5% rate indefinitely without producing higher and higher inflation if productivity is increasing and labor markets are not drum-tight. Washington can help with a prudent fiscal policy. If companies can keep costs from rising too rapidly, this expansion just might be the one that captures the grand prize.

CHART: NOT AVAILABLE CREDIT: SOURCE: AMERITRUST CO. CAPTION: PUTTING IT IN PERSPECTIVE

CHART: NOT AVAILABLE CREDIT: SOURCE: NATIONAL BUREAU OF ECONOMIC RESEARCH CAPTION: THE FIVE LONGEST EXPANSIONS

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: GNP GROWTH Three cheers for the tortoise years. Slower growth helps account for the long life of the current expansion.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: JOBS CREATED The Great American Job Machine switched into overdrive, bringing record numbers into the work force . . .

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: PRODUCTIVITY . . . but all those inexperienced workers were the main reason that productivity barely grew in the service sector.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: CAPITAL INVESTMENT Spending on bricks and mortar lagged as new equipment and managing smarter helped industry increase output.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: INFLATION The expansion's leisurely pace kept inflationary fires low, while a flood of imports provided wage and price discipline.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: DEBT PRIVATE NONFINANCIAL Americans borrowed their way to prosperity. (This chart omits the Korean war expansion because of lack of data.)

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: CORPORATE PROFITS Earnings come harder when there's no boom -- and even more so with relentless price competition from abroad.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: S&P 500 The takeover frenzy and a flood of foreign investment in U.S. assets sent stock market values to the moon.