A Punk Quarter

The economic recovery that began in the spring of 1975 is now almost exactly three years old, and it is showing its age and fatigue.

Consumer prices in February jumped at an annual rate of 7.4%--not as bad as January's 10%, but quite bad enough. For the third month in a row, prices rose faster than wages, and workers' purchasing power declined. The index of leading indicators, those figures that are supposed to foretell the economy's future, showed no change from January, when it had dropped 1.9%. The U.S. trade deficit in February was a startling $4.5 billion, the worst ever in one month. At home the Carter Administration's economists fear that unemployment in the next month or two may rise a bit from the 40-month low of 6.1% recorded in February. That figure had declined largely because unusually few people were looking for jobs, possibly because cold and buzzards kept many at home. Spring sunshine might well prompt more people to seek jobs.

All in all, says one Commerce Department economist, the nation has gone through "a punk quarter." Ice and snow so snarled transport, and the coal strike so curtailed electricity that national production showed little growth. Otto Eckstein, head of Data Resources, Inc., calculates that real Gross National Product rose only 1.5% in the first quarter. With the snow melted and miners back at work, Eckstein thinks real G.N.P. will show a catch-up surge of 7.5% from April through June. For the year, real G.N.P. is still likely to rise around 4.5%. The trick will be to keep inflation from speeding up in the spring as it did in the winter.

This file is automatically generated by a robot program, so viewer discretion is required.