U.S. recession deepens

Press, 14 June 1980, Page 19

U.S. recession deepens

PA Washington! 11 United States wholesale b and retail sales plunged while stockpiles of unsold;, goods and raw materials 1 ■ rose in April, indicating a new downturn in the econo- , mv, the Government report- , ed. The Commerce Department said that sales fell 3.3 per cent, inventories rose 1.31, per cent. A department: analyst, who asked not to be:, named, said this presaged a! ( deepening of the current! recession in coming months, i “With sales dropping, I there will be an involuntary;' l build-up of inventories on; hand, less need to order <

ifrom factories, slower pro-| I duction, higher unemploy- ) Intent,” he said. Thursday’s report came; : after an earlier announce-: ment that retail sales in! May fell a sharp 1.5 perl cent, the fourth consecutive' month of decline. A Commerce Department! survey meanwhile shows! ;that businesses have started: | to reduce investment in newi (plant and equipment, a trend) (which could lengthen the re-; (cession. Companies now plan to; 'increase spending by onlyj [one per cent in 1980. The latest xyarnings of a' deep recession emerged as

■ i the Carter administration, in l •Ithe middle of an election [year, showed signs of .[switching the focus of its j economic policy from fight-1 Jinn inflation to combating; (recession. « J With unemployment up to i nearly eight per cent and in-) . | flation down to about 11 per (Icent from 18 per cent earlier, [I this year, President J has begun saying that the , i Government will take the '[necessary steps to offset the 'effects of the slump. I Private economists and '(Government officials are '(predicting that before the : November election Mr Cari ter will call for a tax cut to > stimulate the economy.