Masonry Magazine October 1984 Page. 16
WASHINGTON WIRE
continued
A LOT OF OTHER BILLS will also have to wait for action until 1985. Congress will be busy enough passing "must" appropriations before quitting to go home to campaign. There won't be time for matters not thought vital. And there's a tendency to leave things to a new Congress with a new mandate. Besides, Presidents usually get a lot done in the first year of a new term. Some likely to carry over are bills on banking, imports, export controls.
THE ECONOMY IS STILL SHOWING somewhat more strength than forecasters in Washington and the business sector were expecting to see over the summer. The pace is slowing, to be sure. That's obvious in the recent statistics for unemployment, for retail sales (especially autos) and for home-building. It's clear that the third quarter is seeing measurably less business growth. The gain won't match the second quarter's 7.6%, let alone the first's 10.1%.
BUT HOW MUCH LESS GROWTH? The slowing has to be kept in perspective. There is still evidence of underlying strength apparent in many major areas. The number actually working, personal income, and industrial production all continue to show pluses. Spending for defense and new plant remains brisk. And note that inventories have not been building up, despite the decline in retail sales. If sales pick up even a little, supplies may prove sparse and industrial output-and hiring, of course-would have to be stepped up.
Many officials project a 6% rate of expansion in the current half-year. But it is still well above the glide path needed to assure the sustainable noninflation-ary growth that is so desired for 1985. There's still a concern that the economy will come roaring back. People remain confident, and the recent stock-mar-ket upsurge makes many feel more affluent.
THIS WORRY keeps the federal reserve from easing the credit reins-and from letting short-term interest rates fall. That in turn puts a limit on how far bond yields and mortgage rates can drop or stock prices rise. But what would it require to induce the "Fed" to ease up even mod-erately? Chairman Paul Volcker has spelled out his "price" to committees of Congress: Unmistakeable signs that the economy is decelerating to a sustainable pace and will reach it before limits of over-all productive capacity are neared. Otherwise, he and his colleagues fear, inflationary pressures will revive.
CURRENCY EXPERTS are no longer so inclined to pre-dict the dollar's fall, especially now that their numerous previous forecasts have missed the mark. Persistently high interest rates keep demand for dollars high, as foreigners continue to find the U.S. economy attractive for investing. This implies that imports will remain cheap-which in turn means inflation will benefit.
UNIONS WILL BE STRESSING job security, rather than wage increases, in the labor negotiations, especially in au-tos, that will be held this fall. The rank-and-file still want solid pay hikes but security has the priority. The fear among the auto workers is that foreign competition will wash out as much as a third of the American industry's current total of 600,000 jobs. Workers are wary of causing lost sales and the migration of existing plants by pushing up costs; mostly, they want promises they will keep their jobs.
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16 MASONRY-SEPTEMBER OCTOBER, 1984