The Michigan Daily-Saturday, June 30, 1979-Page7
Summit freezes oil
imports at present
level through 1985
TOKYO (AP)-The United States and 60 per cent since December to an
six other industrial nations agreed average price of $20.90 a barrel, would
yesterday to place specific ceilings on have "serious economic and social con-
oil imports to help escape the OPEC sequences" for the world.
stranglehold on their economies. THE UNITED STATES prevailed in
President Carter hailed the its insistence that each of the seven
agreement, reached at the end of the nations set specific import curbs.
seven-nation economic summit con- However, the United States accepted
ference here, as a "superb European demands that it set a ceiling
achievement." But he would not through 1985.
promise that it will ease the plight of U.S. officials wanted to set import
American motorists waiting in long restraints only through 1980, saying
lines for gasoline. future needs are too difficult to predict.
Tornadoes sweep Iowa
A string of 15 tornadoes ripped through central Iowa within a few hours Thursday
night, leaving five persons dead and at least 50 injured. The governor's office
called in National Guardsmen and highway police to help maintain order amid
the rubble left by the twisters as in cities such as Algona, pictured above.
Analyss redict oil prices
will orce recession soon
I DON'T THINK we can expect any
immediate alleviation of the energy
problem in the United States on a
collective basis," he said. "Lack of ac-
tion over a number of years has caught
up with us."
It was learned, meanwhile, that Car-
ter may resubmit to Congress a stan-
dby gasoline rationing program within
weeks. Congress rejected an earlier
Carter left Japan at the end of the
two-day summit for a 43-hour visit to
South Korea, spending last night at
Camp Casey, an American military
base 13 miles from North Korea.
THE PRESIDENT planned to return
to Washington tomorrow and said he
would explain to Congress and the
American people the decisions made
The United States pledged in the
agreement to freeze oil imports through
1985 at 1979 levels, 9.5 million barrels a
day. The other six nations-West Ger-
many, Japan, France, Britain, Italy,
and Canada-also agreed to set specific
The summit participants said in a
communique they "deplore the
decision" taken Thursday by OPEC to
raise oil prices.
CARTER SAID the price increase, up
IN ADDITION to setting import
limits, the summit communique
pledged the seven nations to:
" Open to greater public scrutiny the
operations of oil markets and com-
panies, by requiring a record of inter-
national transactions. They said they
would seek "better information" on oil
company profits and spending.
" Raise domestic oil prices in the in-
dividual countries to the world price
"as soon as possible and keep them
" Increase the use of coal.
" Expand alternative sources of
energy, including nuclear power "un-
der conditions guaranteeing our
" Insure that sufficient funds are
available to develop new energy
technology and to establish an inter-
national group of coordinate such
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WASHINGTON (AP) - Higher
prices for imported oil and an in-
creasingly sluggish economy have
made recession almost a certainty in
the United States this year with no
relief from inflation, economists in and
out of government predicted yesterday.
"It's really a question of how deep
will the recession be," said
Congressional.Budget Office analyst
MEANWHILE, one of the nation's top
private forecasting firms, Data
Resources Inc. of Lexington, Mass.,
confirmed that it now is predicting
declines in economic growth for the
final three quarters this year.
If the forecast of economic declines at
annual rates near two per cent in each
of those quarters is correct, the nation
faces "a recession near the magnitude
of the 1970 recession," said Data
Resources research econoptist Patricia
A recession traditionally is defined as
two consecutive quarters of negative
INFLATION, Mosser added, could
rise above ten per cent and some 1.4
million persons could lose their jobs by
Also yesterday, the Commerce
Department's reading of an index
designed to forecast future economic
trends showed a weak 0.4 per cent
bounce-back in May from a sharp two
per cent decline the month before.
"It's all doom and gloom around
here," said one government analyst
who asked not to be named. "I don't
think you'll find a single optimistic
THE PESSIMISM relates to the
decision Thursday by the Organization
of Petroleum Exporting Countries
(OPEC) to raise its base price for crude
Some OPEC countries will be able to
add another $5.50 in surcharges and
other adjustments, putting the top price
at $23.50 - nearly double the $12.70
price only seven months ago.
Economists agreed that oil price in-
creases will affect Americans on all
" Alfred Kahn, the administration's
chief inflation fighter, told Congress
that inflation this year probably will
exceed last years nine per cent rate.
Kahn anticipates price rises of more
than ten per cent for 1979, nearly three
percentage points above the Carter
*Administration officials predicted
that the OPEC increases since Decem-
ber would slow the nation's economic
growth, as measured by its gross
national product, by one per cent this
year and the same amount next year.
And some 800,000 jobs will be lost.
" Gasoline and fuel oil prices,
already rising at annual rates in excess
of 50 per cent, could go up another five
cents per gallon, analysts say. Some, in
fact, predict increases triple that.
The new forecast from Data Resour-
ces reflects data showing that "May
was not a good month and June will be
even worse," said Mosser.
The group is predicting that real
gross national product, an inflation-ad-
justed measure of the value of the
nation's goods and services, will drop at
annual rates of two per cent in the
second quarter, 1.9 per cent in the third
quarter..and.2.2 per cent in .the fourth.
quarter, she said.
ST ATE '1-2-3-4 Phne:62-2
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