No Surprise, No Joy: The Recovery Slows

IT HAD TO HAPPEN: THE U.S. ECONOMY'S 4.8% growth rate in last year's fourth quarter was too fast to last. Still, though a spate of reports showing a marked early-1993 slowdown was no surprise, it was no cause for joy either. January numbers showing the sharpest plunge in new-home sales in 11 years might be shrugged off, since winter housing figures are notoriously unreliable. Slow February sales by major retail chains are a pattern worsened this year by storms. Drops in January factory orders, the late-February selling pace of new cars and an increase in first-time claims for unemployment insurance were not so easily dismissed. One bit of consolation: the unemployment rate dropped a tenth of a percentage point in February, to 7.0%. The bad news is that 90% of the employment gain was made up of workers settling for part-time jobs.

Worse, the recovery has not yet brought much help to the poor -- quite the contrary. The number of people qualifying for food stamps has fallen sharply after previous recessions ended. But it has jumped 40% in the past three years; in December, after 21 months of recovery and six months of rapidly rising production, food-stamp qualifiers reached an all-time high of 26.6 million, or 10.4% of the total population. Economists generally still expect output growth of about 3% this year, up from 2.1% in 1992. They had better be right.

CHART: NOT AVAILABLE

CREDIT: TIME Graphic by Steve Hart

CAPTION: U.S. federal food-stamp program