Evening star., 1950-04-15
Our 1850 Economic Outlook

In its latest monthly report to Congress,
the Presidents Council of Economic Advisers has
taken largely optimistic view of the immediate
future. At the same time however, it has struck
few SOLDERING notes as regards farm income.
industrial expansion and the long-term employ
ment outlook.
The councils optimism is based on the fact
that the first quarter of 1850 has shown gen.
eral upswing in nearly every segment OF our
economy. Thus, the stock market has been
strong, with most prices higher than at any time
since the 1946 peak; corporation profits have
reached an annual rate of $50, 500 000, 900, up a
billion over the last three months of 1949; and
new gains have been scored in home building.
industrial output and national income. Output,
for example, has risen to an annual rate of
$258 900 000, ,00O Jump of almost So billion over
the closing period year ago, and income has
increased more than billion to an annual rate
of 1920, 300, 100000.
But this generally bright picture has some
blobs of black in it, One blob is made up of
reported 10 per cent decline in farm income as
between February, 1885, and February last year.
Another blob as seen by the Council of Economic
Advisers, is a probable drop of II per cent in
industrial expenditures for expansion. The latter
is tied in directly with the job situation AL
though the number of unemployed has gone
down by more than $4,000 since the beginning
of March-a reduction attributed to seasonal
factors-Leon Keyserling, acting chairman of
the CEA, has warned that the investment cut
back in new and enlarged enterprises constitutes
a serious problem in terms of employment.
Stated another way, as Mr.. Keyserling has
put it, "We are not getting the expansion in
industry and investment that we need to absorb
the steady increase in the labor force" What
he hos in ind ic fha foc hot with md
retirement creating fewer than one million en-
ployment vacancies every twelve months, and
with something like IL million Americans be-
coming new job-hunters each year, we now
have a net annual increase of about 100000
people who are looking for openings that are
just not available. Hence, in his opinion, unless
this growth in our work-seeking population is
matched by growth in our enterprise, the years
Immediately ahead, even though the number
of employed remains at its present high level,
are likely to produce huge army/of idle.
There can be little doubt (there is no doubt
at all In the minds of many industrasts, who
have cogent arguments to offer on the subject
that one of the big reasons why expansion has
not kept pace with the increase in the labor
force is simply this: That potential investors
and potential business expanders have been re-
luctant to take chances in the teeth of union.
management tensions Federal deficits, the con-
stantly mounting national debt and such other
things as taxation policies that offer inadequate
incentives to people who have plenty of money
but who do not care to risk 1t on new or enlarged
enterprises unless they can be sure that they
will not be taxed out Of fair profit.
Another factor in the picture of course,
is our steady increase in productivity as result
of chronological advances. With new labor
saving machinery, many industries while en-
ploying fewer workers, are producing more this
year than last. That trend Is likely to continue.
Though our growing population calls for expan-
sion, and though we need changes in Federal
policy to encourage such expansion, the long
range effort to make our economy absorb the
constant gain in new job-hunters may we'll
require-through the next few decades-marked
cuts in the work week and work year. At any
rate, some very competent economists predict
as much