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January 17, 1997 - Image 55

Resource type:
Text
Publication:
The Detroit Jewish News, 1997-01-17

Disclaimer: Computer generated plain text may have errors. Read more about this.

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quity Trade Program.
We Pay Off Your Trade
Regardless of How
Much You Owe!A•

LINCOLN
TA
MERCURY " MAZDA • VW

Annual Growth Rate of Real GDP

6 Percent, AR

Actual

Forecast

5

4.7

CONTINENTAL

"Best Deal In Town"

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1 2 3 4 1

98

1 99

RSQE: December 1996

Unemployment and Inflation Rates

Percent, AR

5.5

5.2

5.3

5.3

Civilian Unemployment

3.1

2.3

2.6




Private Nonfarm Deflator

1.2

3
3 4 1

2

1 9 44 1 1

LEASE $02CIC* M
24 MOS. VUIJO.

4178 Highland
Rd. Waterford

Ask For Lou Gordo

Forecast

Actual

95

1

2 3
96

4 1 2 3 4 1 2 3 4 1
I
97
98
1
I 99

RSQE: December 1996

my, "Some shock which came
from the fact that there was a re-
cession in Europe, or the Far
East, and that suddenly cut your
export market, so the economy
weakened in the United States.
"Or, the other reason you got
a short cycle like that, a mild re-
cession, was because of what we
call an inventory correction. That
Twas where, during the econom-
ic expansion, everything looked
good, stuff was flying off the
shelves fast, businesses all over
were ordering more goods to
keep their shelves full, so that
customers could come in and find
what they wanted.
"Everybody is doing this at
once, and you overdo it. And
\_ everybody thinks, 'I am invin-
,_)cible, I can't order too much,' and
I everybody winds up ordering too
much.
"And so, suddenly, merchan-
dise piles up on the shelves. This
was not the intended reaction,
and as a result of that everybody
says, 'Whoops, better let this get
used up,' and so they stop or-
dering.
\__. "So you have to stop produc-
and that produces a little re-
cession and the goods fall off the
shelves finally, and then you
start up again."
But, Dr. Hymans has good

news about that form of reces-
sion. "That kind of behavior, the
roughly periodic every-three-or-
four-years overdoing of invento-
ry buying; is something we will
probably not see much of in the
future. And that's because of
computers, and the realization
that it really is expensive to mis-
manage inventories. Because
computers allow you to take
minute-by-minute perpetual in-
ventories of what's on the
shelves, businesses have been
able to keep a closer match be-
tween what's being purchased,
what consumers want to look at
and what's on their shelves."
But Dr. Hymans said there
could still be pitfalls in the econ-
omy. "Right now, computer pur-
chases are driving a lot of what's
going on in this economy in
terms of its growth. If that dried
up, what would replace it? I don't
know.
"What if suddenly everybody
says, 'That's it, who needs any
more computers, I've got enough
now.' And then you have a cou-
ple of years when people aren't
buying. Computer purchases in
the United States economy have
been increasing at double-digit
rates for the past half-dozen
years, 15, 20, 30 percent a year,
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mos. Option to purchase at lease end for predetermined amt. Price determined at lease inception. 15,000 mile/yr. limit on leases. 11c per mile excess (12,000 miles/yr. limit on Import leases, 10c
mile excess). Lessee responsible for excessive wear & tear. Dealer not responsible for typographical errors. Pictures may not represent actual vehicles on sale. Prior sales excluded. Dealer
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