Signs of recovery - a time for caution.
Consumer postholiday spending should have been down from the justifiably lackluster preholiday spending in the fourth quarter of '91. But a reported upturn in consumer purchases for both January and February of '92, about 2% and 1%, respectively, is being touted as a positive sign for the final three quarters of 1992. On related financial fronts we noticed that energy prices dropped slightly in January, which may be the reason for producer prices increasing only slightly for the same period. This increase is also evident in the recent rise in interest rates: The 8% mortgage-rate low of first quarter '92 is rapidly rising and is expected to return to 9+% rates by the third quarter '92. The point? This means that American industry may have a somewhat-sooner-than-expected opportunity to work itself out of this monetary morass. There is a glimmer of hope.
If we can gain a financial foothold, sufficient to enable us to work on becoming competitive, and not take this slight upswing as a transition that will come of its own doing, perhaps we can begin to make a difference in our financial future--after all, the economic condition of a nation is its metabolism, we cannot exist without it. Make no mistake about it, the economic climb ahead is going to be very difficult.
Weathering the job cuts that have come and are yet to come is not a mere matter-of-fact consequence of this economy--they are a harsh reality of, at least in part, poor long-term planning and an over-confident posture by individuals, industry, and government. And it's going to take some smart business planning and long-term strategy by individuals, industry, and government if we are to once again assume a formidable economic position in the world market. Yes, we continue to be a power to be reckoned with, but our pecuniary punch is losing its impact.
The next two years are going to be very trying for the U.S. Competition is growing and more major players are coming into the world market, and we must compete under an unstable economy, a dwindling job market, and the threat that we could lapse into another recession by mid-'93. If this truly is the beginning of the climb to economic growth in the '90s for the U.S., we must do whatever it takes to make it work. If, on the other hand, it is another futile start, can we withstand a triple-dip recession?
A cautiously aggressive approach to this recovery is a must for government, industry, and individual alike. For even if this time we are able to bring about change, we have a national debt that will increase hundreds of billions of dollars in 1992 alone. Fact remains that there is no easy out--this is going to be a hard fought decade for all of us.
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|Author:||Ferris, Roger M.|
|Date:||Apr 1, 1992|
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