Evening star. [volume] (Washington, D.C.) 1854-1972, 1958-07-29

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practically by definition. In
crease demand and expand the
supply Of money. When that
happens. buyers bid prices up.
Unfortunately for the bread
winner. this principle some
times breaks down in reverse.
Prices have continued TO climb
= though slowly = throughout
the recession.
Blamed for Increase
Economists blame special cir
cumstances In agriculture, ris-
ing wages and impediments To-
business competition. Prices TO-
day probably would be even
higher II the recession had not
come along.
Consumer prices last month
averaged 23.7 per cent above
the l947-l949 level. This re-
fiected an increase OF l/10 Of Il
per cent above the May index
and a rise Of 20 per cent in the
past year.
While accepting the inevi-
liability Of some price boosts, q
leading administration econ
omist maintained that "the in
fiation need not be serious IL
We resist pressures" for big
Federal spending and IF we
bear down on adult education
about the dangers of high
costs and prices"
He warned that "the greatest
threat to incipient recovery
from the recession would be
rising prices, which would dis
courage expansion of business
and build up buyer resistance"
See Moderate Climb
Most forecasters expect
prices to climb only moderately,
at least in the next year or so,
mainly because they anticipate
only a slow recovery from the
recession.
IF we had a real boom,
prices probably would go up
very fast" a leading Federal
expert said. But that's not
likely. unless we go to war. so
the economy will be highly
competitive at least in the
early stages of recovery. Manu-
facturers will be under pres
sure to hold prices down to
keep consumption rising"
While prices rise wages viii
keep pace, an AFL-CIO
spokesman predicted.
He observed that wage in
creases were not squeezed
much by the recession, and
forecast an even pattern dur
ing recovery. Long-term con-
tracts. he said. have flattened
the wide swings In wage trends.
Slow recovery may prevent
runaway initiation, but it also
will delay the return Of full
prosperity. Impatience prob
ably viii revive controversy
over the Eisenhower admin
STATIONS tight money policies.
Pressure also will build UP for
tax cuts and other Government
action to push the economy
faster.
One pessimiStic Government
economist conceded that most
yardstickS Of business activity
may regain progression peaks
late this year or early in 1863
But" he commended, when we
get back to where we were, re-
covery will be only about half
complete"
Recovery will not be COM
plete, he maintained, until
economic activity surpasses
progression levels and climbs
back to the 'long-term growth
trend" That is, the goal is
TO catch up with where the
economy would have been II
the recession had not inter-
rupted expansion and then to
keep growing at the rate of
about 3 per cent a year.
1T will be a long, tough
pun to close that gap" he
warned. adding: I'm not at
all sure that we won't have
a relapse after the first burst
Of recovery"
He and other dubious an
alysts are troubled by the lack
Of any apparent spark
some major upward drive-to
sustain and accelerate recov-
cry after the early stages.
"Of course" he commented,
tits been the big forces we
seldom see in advance"
Some economists hope auto
mobiles will provide the needed
spark. The auto industry's
skid this year and last has
been q basic factor in the
total economy's decline. A good
year for 1859 models-due in
show rooms this fall-probably
would knock out the recession.
No Big New U. S. Plans
Right now. according to
Labor Secretary Mitchell and
other Informed sources, there
are no plans for major new
Federal programs to spur pros
perity. The Eisenhower admin
istration will content itself with
following through activities
like highway building launched
earlier.
What the Government didn't
do helped end the decline as
much as what the Government
did do" an influential ofiicial
contended. He argued against
drastic pump-priming last
winter when the recession was