America's Huge 1947 Productivity

Northern Advocate, 15 January 1948, Page 5

America's Huge 1947 Productivity

WASHINGTON, Wed. (11.30 a.m.)—1947 afforded a new demonstration of the United States’ tremendous productivity, when her natural resources, accumulated capital, and able, enterprising labour force were used at high levels of _ activity, said President Truman, presenting his annual economic report to Congress today. The main features of the year’s economic activity were:

(1) Employment during 1947 reached the new record mark of 60,000,000 civilian jobs in June and averaged 58,000,000 for the year—almost 3,000.000 more than in 1940. Unemployment reached probably its practical minimum.

(2) Production was about 7 per cent, above 1946 and 70 per cent, above the 1935-39 average. A slight drop in agricultural output was more than offset by increased production in industry, construction, transport and public utilities.

(3) Consumer income, after taxes were deducted, reached.the new high of an average annual rate per capita of $1240 in the last quarter of 1947. compared with $1074 in the first quarter of 1946. However, the rapid rise in prices caused consumers’ purchasing power to decline nearly 8 per cent, in the same period. BUSINESS, INVESTMENT, INCOME (4) Business, investment and income remained consistently above the level for any previous year. Investment in plant and equipment and increased inventories totalled over $25,000,000,090. compared with $21,000,000,000 in 1946. Corporation earnings, after taxation deductions, were double those of the war years, and four times those of 1929. The flotation of securities provided $1,000,000,000 of new capital, compared with $3,300,000,000 in 1946. Commercial bank loans to businesses increased about $4,200,000,000. with credit expanding so rapidly in the last half of the year as to cause grave concern regarding the inflationary effect. EXPORT SURPLUS Export of goods and services ran at the annual rate of $20,000,000,000 in the early part of the year, but declined later. Imports were much less than exports, resulting in an export surplus of over $11,000,000,000 for the year. Foreign countries’ ability to finance imports declined in the latter part of the year and the future of the United States’ international balance would depend considerably on the size of Government aid and private credits extended.

(6) Government expenditures during 1947 were reduced to $41,300,000,000, leaving a balance of $56,000,000,000, which was used primarily to reduce bank holdings of federal debit. This was a counter-inflationary factor during a year of mounting inflation,. INFLATIONARY SPIRAL (7) President Truman pointed out that the record of rising prices, wages and profits during 1947 showed how they fed upon one another in developing the process of inflation. "Unless we as a nation, show an ability to impose restraints upon ourselves and to use the machinery of our representative Government to devise well-con-sidered regulatory measures we stand in grave danger that runaway prices, over-extended credit, and unbalanced developments will lead to economic recession,” he said. PROSPECTS FOR 1948 (8) Discussing prospects for 1948, President Truman again emphasised the need for adopting his 10-point programme for halting inflation. He appealed for maximum employment, maximum production, and the adjustment of the price-income structure to halt the inflationary spiral, tie considered that 700,000 more workers could be absorbed in_ 1948, and estimated that, with intelligent long-range planning, the United States should be able to increase national- output by 35 per cent in the next 10 years.