Evening star., 1953-10-18
Our Economic Health

80 The state of the American economy has
been favored subject for speculation and
examination since the first Republican admin
tstration in 20 years took office last January.
Seven "fat" years have followed the ending
of World War II. During the early part of this
period several factors contributed to a high
level of business and industrial activity. Con-
Sunler demand that had been held in check
during the war was released and it's volume
was Swelled by the return to civilian life of
millions Of men from the military services. The
switching of plants from military to civilian
production required rebuilding and retooling,
creating in turn new demand for steel,
machinery and other materials. Construction,
restricted during the war, doomed in all cate
gorieS-of1ce buildings and homes particularly.
When these normal needs approached salts
faction the outbreak of the Korean war pro-
vided a new Stimulant. This led to panic buy
ing of more consumer items and a new ex-
pansion of the munitions industry. Govern
ment policy that favored an economy which
provided both gums and butter" kept en-
ployment, national income and gross national
product all moving toward new record highs.
But when the political change was voted last
fall, and was accompanied by promises of cur
tailed Government spending and, later, by the
end Of the shooting war in Korea, there were
many predictions that some "lean" years were
close at hand.
1t would be raSh perhaps, to be dogmatic
on either side of this question. There have been
some signs of slowing down of the economy
the most marked being sharp drop in farm
income with it's consequent decrease in pur-
chasing of farm equipment and other items
OF consumption in rural areas. The latest
report of the Presidents Council of Economic
Advisers shows that several significant indices
have slipped slightly in the third quarter of
the year from record levels of few months
earlier. For example, gross national product
in terms of dollar values dropped bit below
the second quarter record but was still sub
Stantaly above the level for the third quarter
of 1852. Government spending had dropped also
but personal spending was continuing at a new
high rate. Unemployment was only slightly
higher in September than in August but, at 2
per cent of the civilian labor supply was under
that of a year earlier There were some signs
that retail establishments were slowing their
accumulation of stocks but construction, which
had dipped slightly in August increased again
in September.
From this mixed, but high-level chart of
the national economy the council concluded
that no new peaks are in sight Immediately
but that strong and steady pace is still indi-
Gated for the near future. 1t appears, on the
whole, to be cautious but safe point Of view.
The final quarter of year, with its traditional
Christmas buying, ordinarily is a good period
for consumer purchasing and there have been
indications that the reduced pace of Govern
ment spending has settled to level which will
be maintained during the immediate future,
The question of bolstering the agriculture seq
ment of the economy is probably the one most
demanding of Government attention, but no
other part of the picture seems in the near
critical stage.