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Page 4
THE BATTALION
College Station, Texas Wednesday, February 10, 1971
Economy emerging
from long recession
A slowly emerging recovery
from the longest recession busi
ness has experienced since the
depressed 1930s is underway, a
leading national economist said
here Tuesday.
Dr. Martin Gainsbrugh said
economists are unusually unani
mous about the business direc
tion trend and “they promise,
almost without exception, a better
1971 than 1970.”
Gainsbrugh, senior vice presi
dent and chief economist of the
National Industrial Conference
Board, spoke to 31 participants
in the 19th Executive Develop
ment Course of the College of
Business.
He said economists indicated
the recovery is well under way
and that they believe the emerg
ing expansion will gain momen
tum throughout the year.
“Where they differ is over the
extent of the 1971 recovery and
the threat of renewed inflation
that may arise from reliance up
on the full employment deficit to
help speed the return to full
employment,” Gainsbrugh com
mented.
He said opinions have particu
larly differed since publication of
the President’s economic report.
Gainsbrugh injected his own
thinking on the severity of the
administration-induced recession,
and the magnitude of the recov
ery, based on figures of the Con
ference Board, a non-profit scien
tific research institution serving
business economics and manage
ment.
“Fortunately, this recession, al
though of extended duration, was
largely confined to defense and
defense related industries,” the
EDP speaker stated. He said
employment in services and non
durables remained relatively un
affected. Personal income and
consumer spending was well
maintained.
A continued rise in state and
local spending and business in
vestment in plant and equipment,
aided by elimination of surtaxes,
held up better than in past down
turns Gainsbrugh said.
“In combination, these elements
of strong demand helped trans
form our longest business con
traction in nearly a generation
into one of our mildest reces
sions,” he added.
Gainsbrugh noted that mild re
cessions are usually followed by
mild rather than vigorous recov
eries.
Dimensions he attached to the
upturn, conforming to the Con
ference Board’s Economic Forum,
follow:
—Gross national product:
Should move up about seven per
cent to reach $1,065 billion by
year-end.
—Real economic growth: Infla
tion still taking a high 1971 toll,
but real growth rising from zero
in 1970 to nearly three per cent
by Dec. 31, 1971.
first hours of work will be length
ened, followed by increased ad.
tions to payrolls. The offset will
come from 1.5 million new jot
seekers in 1971.
—Prices: To the consumer, up
nearly five per cent this year,
particularly for services. As a
consequence of wage rates rising
faster than national productivity,
unit labor costs are still advartc-
ing, pushing consumer prices up.
Gainsbrugh noted that NIC!
data indicated the victim groups
of unemployment increases in tin
past year were nonwhite persons
and young people between 16 anl
19 years of age.
—Unemployment: Closer to
5.5 per cent by year-end than
the 4.9 per cent anticipated in the
Economic Report. As recession
ends and real growth resumes,
“As the past decade was tern,
ed the ‘Soaring ’60s,’ I believt
we are entering the ‘Sociallt
Sensitive ’70’s’,” Gainsbrugh said
It will involve changes in out
capitalistic system, to include cor
porations, toward solving social
problems.”
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