Masonry Magazine April 1974 Page. 18
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SOME CAUTIOUS OPTIMISM about the business outlook is beginning to spread among economists in government and industry. Many recent statistics suggest that the current oil-induced slowdown isn't accelerating as feared-isn't spilling over to other sectors. And now stepped-up Arab oil shipments promise another definite plus. The economy isn't out of the woods. Doubts still remain. But talk of a deep, continuing recession has disappeared.
A number of recent statistics have come in stronger than many expected, in contrast to the draggy early-year data.
-Employment has held up very well for a sluggish period. Economists hope that job losses will be held to the oil-depressed areas, and that some of these declines will be offset by pick-ups in other, non-energy-related sectors.
-New orders were up sharply in January-February, after the slump in December. Industry's sales also showed big gains.
And there are several other positive developments:
-Housing starts have shown surprising strength for several recent months after the slump during 1973's second half.
-Business spending for new plant and equipment promises to be a big help to the hoped-for second-half recovery. New surveys show industry investing 13% more in 1974 than 1973.
THE OIL EMBARGO'S END promises the economy its biggest single plus. Consumer psychology could turn brighter as those gasoline supplies increase, and the lines at gas stations don't reappear during this spring and summer. People may be more willing to buy new cars and homes and to take vacations. In fact, car dealers report some increase in sales since the embargo's end. And home builders are encouraged by recent increases in customer traffic. Thus, if consumer demand revives, businessmen will be more certain to carry through their plans to invest heavily in new plant and equipment this year.
But the embargo's end will not mean a burst of economic activity. Current sharply increased oil prices could be a braking force on the economy. Imports of higher priced foreign crude oil foreshadow even higher gasoline prices.
THUS MORE CONSUMER PURCHASING POWER will be soaked up at the gas pump as much as $14 billion more during 1974. and perhaps a lot more. This squeeze on household budgets, along with reported dips in real incomes, will leave the consumer with less to spend for other products and services. Psychology could remain depressed, with fears of new jumps in unemployment.
OVER-ALL, ECONOMISTS THINK the rate of inflation could fall sharply. The Consumer Price Index could be rising at a 5-6% a year rate in the fall, in strikingly sharp contrast to the 12% pace registered this past January. That's still too high for economic health-but it would be a big improvement.
SWEEPING PENSION REFORM LEGISLATION is nearing enactment in Congress. Congressional sources expect the bill to be on the President's desk in May. The measure will make sure that workers actually receive promised benefits, and that all of the nation's private pension plans are adequately financed. It also sets up a Federally-run, employer-paid termination-insurance plan, making certain that beneficiaries are protected against funds that go bust.
The legislation responds to the complaints of lost benefits caused by under-financing, firm failures, and job switching.
New tax breaks will be offered to individuals and the self-employed. Workers not covered by a pension plan may set aside and take a tax deduction on up to 20% of their income, to a maximum of $1,500. The set-aside for self-employed individuals is increased to 15% of earnings up to $7,500.
VIOLATORS OF FEDERAL ANTITRUST LAWS may be open to state suits. The U.S. Justice Department has come out in favor of certain new legislation which would allow states to bring actions to recover damages for citizens. Current provisions call for combining the multiple claims in the courts and for allowing individuals to sue for treble damages in antitrust cases. Neither is effective in cases involving multiple transactions of small size-consumer purchases of products costing as little as 25 cents, particularly.
Justice thinks there is a need for a new remedy for ultimate consumers. Without it, violators of the antitrust laws may completely escape with profits that are illegally obtained.
THE GOVERNMENT IS STEPPING UP its enforcement of U.S. anti-bias laws. It has changed its tactics from company-wide action to industry-wide suits. The first industry-wide action accused trucking companies and their unions of discriminating against minorities by denying them any high-paying jobs. Negotiations are now under way with the steel industry on similar charges.
The Justice Department plans to file more actions against other industries. Consent degree settlements are planned.