Nixon Confident In U.S. Economy

Press, Volume CIX, Issue 32304, 23 May 1970, Page 11

Nixon Confident In U.S. Economy

(N.Z. Press Association —Copyright)

WASHINGTON, May 22.

President Nixon told the chairman of the New York Stock Exchange today that he expected a recovery in the nation’s economy during the last half of this year, and he predicted that his Budget policies would then allow more credit and lower interest rates.

The President invited Mr Bernard Lasker to the White House after the Administration had reported that the rise in cost of living increased during April, and after the stock market had fallen to its lowest point for seven years. The White House press secretary (Mr Ronald Ziegler) said later that during his 40minute meeting with Mr Lasker, Mr Nixon had expressed confidence in the future.

He added that the meeting, which was attended by Mr Paul McCracken, chairman of

the President’s council of economic advisers, dealt with the economy in general and the stock market in particular. President Nixon was quoted as expressing the importance he attaches to a vigorous stock market, and his confidence that America’s economy would recover from what the Democratic Leader of the Senate (Senator Mike Mansfield) had earlier described as a recession. Senator Mansfield, who cited increasing unemployment, high interest rates and continuing inflation, had said: “My belief is that we are in a recession at the present time, if we recognise it or not. I have suggested to several Presidents that they should consider stand-by wage, price and profit controls and larger down-payments in credit buying, but my words have been wasted.” An economist’s rule of thumb is that the nation is in a recession when its output of goods and services declines for two successive quarters. This occurred during the last quarter of 1969 and the first quarter of 1970, when it dropped by four-tenths of 1 per cent and by 3 per cent respectively. The Administration, however, says that the rule of thumb does not apply in this case, because the .4 per cent decline in the final three months of 1969 was too slight to consider.

Also, the Administration argues, unemployment would have to reach 6 or 7 per cent of the total working force beforce the present economic condition could qualify as a recession. Unemployment now stands at 4.8 per cent.