Carrol Daily Times Herald from Carroll, Iowa on May 6, 1974 · Page 8
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May 6, 1974

Carrol Daily Times Herald from Carroll, Iowa · Page 8

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Carroll, Iowa
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Monday, May 6, 1974
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Page 8
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Is the EconomyPast the Worst? Changes in gnp Short-term interest rates Consumer prices By NBA-London Economist News Service WASHINGTON - (LENS) _ Taking all things together, the first three months of 1974 were the worst quarter for the American economy since the Second World War. Total output, as measured by the gross national product, has occasionally declined during recessions by more than the 5.8 per cent, at an annual rate, of the quarter just ended. The unemployment rate has frequently be|n higher than the per cent of the labor force now being registered. Inflation has, once or twice during wars, even exceeded the 14.3 per cent annual rate of consumer price inflation that marked the first quarter. But never before have all these things coincided as they have just done. And to round off the picture, some interest rates, such as the "prime" lending rate of the commercial banks to large business borrowers, have reached record levels; the United States now has "double-digit" interest rates, with the prime at 10 per cent, to go with double-digit inflation. No wonder consumer sentiment about the economy and the outlook for it. as just measured by the University of Michigan survey, has taken its biggest drop on record. There is also a fair degree of uncertainty among economists, government officials and others who try to look ahead. But the prevailing view is not gloomy. While everyone, from liberal Democrats in Congress to the chairman of the Federal Reserve Board, is genuinely and deeply troubled by inflation, among the Times Herald, Carroll, la. Q Monday, May 6, 1974 V professional economic forecasters the predominant view is that the decline in output, at least, will be brief and limited largely to sectors affected by the winter oil shortage and to housing construction. This school includes, but is certainly not limited to, the official forecasters in the government, who see no need for new stimulus to the economy. As for inflation, while forecasts differ and forecasters have a new humility, the prevailing hunch is that there will be some improvement in the picture before the end of the year, and possibly a reduction in the rate of inflation to well under half that of the first quarter. A massive decline in car sales and production was the dominant factor in the decline of the GNP in the first quarter, with, as a reinforcing element, the drop in house building that began last summer as interest rates rose. But both of these sectors apparently have, to use the jargon, "bottomed out". Gasoline is once again fairly easy to buy and this has apparently begun to spur car sales, including even those of the larger models: several of the producers have reopened once-idle assembly plants. The evidence on housing is not conclusive, and the surprising upward spurt of interest rates clouds the outlook further. But the figures for the past four months suggest that the number of houses on which work has begun has hit bottom with an annual rate of about 1,450.000. TEEN LINE An additional private line ends frayed tempers, missed calls. Order from your telephone business office orask any telephone employee. I Northwestern Bell With underlying demand strong for demographic reasons alone, the general forecast is that residential construction is more likely to rise than to fall further. Consumer spending, other than that on cars and housing, has been sluggish but not downright weak. Investment by business in plant and facilities continues strong, though not as strong as the inflation-swollen dollar figures might suggest. Government spending is on the rise. The balance of international trade, while it will not be as good as last year's, is not likely to provide a pronounced negative effect. All this has led government, and also many private, forecasters to the conclusion that the second quarter will be approximately flat and that the second half will show a recovery of sorts. Fairly typical is the latest forecast of Data Resources, Inc., headed by Otto Eckstein, who was a member of President Johnson's Council of Economic Advisers: "The new evidence on the American economy suggests that this business cycle is near its trough and that the economy may already be beginning its upturn." The problem of inflation is another matter. Even those who look for significantly less inflation later this year are deeply troubled by the longer- term outlook. The most encouraging part of the immediate situation is the stabilization, at last, of the prices of raw commodities, with an actual decline since February in the prices of farm products. With any kind of luck in this year's harvests, not only will there be record crops but there should be a significant slowdown in the terrifying rise of food prices; in March they were 21 per cent above those a year earlier. Many problems remain. The prices of hundreds of things people buy still do not reflect fully the huge increase in costs, particularly of raw materials, last year: this is partly because price control did exert at least some restraining influence. The controls ended on April 30. Decontrol will bring a bulge of unknown magnitude to the price indices; to a considerable extent this has already begun. Possibly more ominous is the wages picture. Neither side in the recent peaceful settlement in the steel industry will publish any figures on its cost and, indeed, with a cost-"f-living escalator clause for wages included in the three-year contract, no exact figure is possible. But it is estimated that the increase in total costs to the employer for each hour of work may rise 40 per cent by the end of the three years. If the Administration and the Federal Reserve Board have their way, and they probably will, there will be no new attempt to stimulate the economy by a tax reduction, by higher government spending or by significantly easier monetary policy. Some leading Democrats in Congress, supported by several prominent economists, such as Walter Heller, have urged an early cut in taxes but they seem unlikely to prevail. As for the central bank, it is showing great courage if nothing else. Because of inflation, which the chairman of the Fed's Board of Governors, Arthur Burns, terms of "the Latin American type", it is firmly declining to follow the expansionary policy which is customary at a time of falling output and rising unemployment. LUNCH SPECIAL Only 9 5 HOT, LIGHT, THRIFTY AND FUN we're your Lunch Bucket Kentucky Fried Chicken is great for lunc Try our money-savjng special today. Here's what you get— 2 pieces of chicken • slaw • roll Our Lunch Special is another reason why "Carroll loves what the Colonel cooks."™ c Have a barrel of fun Vochange on previous quarter at annual rate in 1958 dollars -MONTH TREASURY BILLS 1972 1973 1974 1972 1973 1974 1972 1973 1974 This cautious policy, together with an unexpectedly large demand for credit from business, has led to the steep run-up in short-term interest rates, including the prime rate. It may be that the money market has over-reacted to the Federal Reserve policy — which is certainly not overly restrictive — but in any case it is evident that battling inflation is the dominent consideration at the central bank. Dedham Guild Holds Meeting DEDHAM — President Mrs. Robert Peter conducted the St. Joseph's Guild meeting, which opened with a prayer and hymn Thursday. Mrs. John Seidl had the scripture reading. The president reported on the open spring meeting of the CCW in Carroll on April 3. Members were asked to have clean cans, glass and newspapers ready in May for recycling. Church cleaning has been set for May 21. Names were drawn from the membership. The president reminded the membe rs of the 39th anniversary of Fr. Meyers' priesthood on May 12. April Circle report was given by Mrs. Lawrence Klocke. The door prize was awarded to Mrs. Lavern Meiners and the charity prize to Mrs. Randy Irlmeier. Mrs. Robert Lacy Jr., entertained with several songs, accompanying herself on guitar. Mrs. Robert Lacy Sr. was also a guest. Lunch was served and tables were centered with madonnas and spring flowers. Plate prize was awarded to Mrs. Peter Danner Jr. Mrs. Peter Danner Jr. has been elected diocesan treasurer. Recital Honors Music Students MANNING - Susan Crandall, Cindy Barry, Cindy Linder and Kristi Andersen, all members °f tne Young Musicians Club, performed during a recital at the annual Youth Day at the state convention of Iowa Federation of Music Clubs in Des Moines on April 28. The all day program and honors banquet is held for music students who have attained three consecutive superiors at Junior Festival. Parents attending were Mr. and Mrs. Richard Crandall, Mr. and Mrs. Milton Barry and Mr. and Mrs. Keith Andersen. Mrs. Ray Wycoff, club counselor, and Rhonda Opperman also attended. In observance of National Music Week May 5-12, Mrs. Ray Wycoff will present her music pupils in recitals at the First Presbyterian Church on May 5. The first recital will begin at 2 p.m. and the second at 3:30 p.m. The public is invited to attend. GOOD NEWS SERVICE CLINIC on all makes of Upright Sweepers May 8 through May 10 8-POINT FACTORY CHECK-OUT LIST Regular Service Charge $7.95 95 Plus Parts SPECIAL GENIE portable sewing machine with carrying case SAVE 20.95 , REG. 169.95 Enjoy big machine performance with this lightweight portable . . . perfect gilt for brides, graduates, "Mom"! With built-in fashion, zig-zag, blind- hem stitches, snap-on presser feel, more! FASHION MATE ilq-iaq sewing machine 3 DAYS ONLY FREE ESTIMATES ON MMOR REPAIR WORK ONLY GENUINE PARTS USED 1. Check Electrical System . 2. Check Motor & Bearings 3. Check All Moving Parts 4. Check Belt & Brushes 5. Check Bag for Defects 6. Check Filter System 1. Check & Clean Agitator 8. Clean, Grease & Lubricate SPECIAL SALE ON EUREKA MODEL 252 REG. 119.95 Built-in fashion, zig-zag and blind-hem stitches. Has the Singer exclusive front drop-in bobbin, more! CARRYING CASE OR CABINET EXTRA TERRIFIC VALUES FOR YOU...TERRIFIC GIFTS FOR MOM! SEWING BASKETS $C98 $1498 TO WITH 'KNinw wnvnii 5'V14 All shapes and sixes in this diverse assortment of attractive baskets, exclusively styled for Singer. All with comparlmenlcd storage trays. SINGER SEWING BOOK SALE Hwy. 30 & Court St. 792-1677 For beginners and advanced sewers. Special 70-page knit section. 6 REG. 8.95 USED MACHINE CLEARANCE NEW MOTORIZED DEEP-CLEANING ROTO-MATIC CARPET ATTACHMENT! and up SPECIAL FABRIC CLEARANCE 10% to 407. OFF REG. PRICE SINGER Sewing Centers and participating Approved Dealers For store nearest you, see the yellow pages under SEWING MACHINES or FABRIC SHOPS. Singer has a liberal trade-in policy. Also, a Credit Plan is available at Singer Sewing Centers and many Approved Dealers. •A Trademark of THE SINGER COMPANY Copyright (0 1974 THE SINGER COMPANY. All Rights Reserved Throughout the World. Combines the powerful suction of a canister cleaner with the powered-brush feature of an upright. 12-inch beater bar brush gets the deep-down carpet-destroying dirt! Cleans all carpet naps... even shags! LOW AVERAGE HIGH SHAGS 4 Models Are Priced From 122 50 to M89 50 Rutten's Vac Shop Corner Main & Highway 30 Free Parking Phone 792-3001 FREE PICK-UP & DELIVERY

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