U.S. economy sliding

Press, Volume CXIV, Issue 33514, 20 April 1974, Page 15

U.S. economy sliding

(.t.ZP. A.-Reuter—Copyright)

WASHINGTON, April 19. The United States economy has slid during the first quarter of this year into its worst, state for 16 years.

The Department of Commerce reported yesterday that during the period initiation rose to the worst | level in 23 years. . This gloomy picture of the American economic scene is being contested by Adminis-

tration economists who predict a much brighter situation during the second quarter of the year. But concern is evident [within business circles at ;the prospect of a serious 'recession, despite predications by President Nixon (that there will not be one.

The total output of goods services has declined at a seasonally-adjusted rate of 5.8 per cent, the biggest drop since the first quarter of 1958, during a severe recession.

Inflation has risen at an annual rate of 10.8 per cent, the highest since the first quarter of 1951, during the Korean War.

Last year the United States inflation rate for the' 12 months was 5.4 per cent j and the White House has!

predicted that by the end of this year it will have averaged out at seven per cent. This forecast is based on a decline over the next few months to a rate of 4.5 to 5 per cent, because of falls in food and fuel prices. The reports of the economic downturn are expected to stir demands for a cut in taxes. But the Administration is strenuously opposing such a move. The mood among businessmen is such that little faith is evident in the moderate predictions of the White House. On Wall Street, financial experts fear that a serious recession will occur during the next three | months unless action is (taken to stimulate the econlomy.