University of Virginia Library

Check Inflation

Mr. Kennedy conceded that the current
administration has not "checked the inflation
spiral to the degree we had hoped. But today
the signs that inflation is declining are
unmistakable."

The Secretary of the Treasury cited
numerous data which the administration
considered indicative of the economy's trend.
He noted that interest rates all across the board
have declined. Gross National Product has
actually increased "despite the auto strike."
This is evidence, he added, that the "economy
is again beginning to expand in a favorable
way."

Consumption on the part of the household
sector had not been what the Nixon
Administration had hoped it would be. In the
past quarter the level of personal savings has
increased to 7½ per cent rather than the usual
rate of 5½ or 6 per cent. Looking toward the
next quarter he predicted that "consumers may
be expected to spend more."

Mr. Kennedy observed that during this
period of economic change inventories have not
become excessive and that there is "an
excellent likelihood of an upturn in business
investment."

In addition, the Secretary noted that the
nation's balance of trade could be expected to
improve. In the last few years the United
States' exports have exceeded its imports by
too much. The future export/import ratio
should lessen, he assured his audience.