al
Page 2-Friday, October 1, 1982-The Michigan Daily
Economic index resumes decline
WASHINGTON (AP) - Flying in the
face of President Reagan's predic-
tions of recovery, the government's
main economic forecasting gauge has
nosed down for the first time since
March and a record number of
Americans have lined up for unem-.
pldyment benefits, officials said
yesterday.
Commerce Secretary Malcolm
Baldrige insisted the economy was still
heading for an upturn. Some private
analysts agreed, though cautioning the
improvement would be relatively
weak, but the chief economist for the
National Association of Manufacturers
said the new figures mean "we will not
see meaningful recovery until 1983."
House Speaker Thomas O'Neill (D-
Mass) said "the worst may be ahead"
and raised the possibility of the
economic depression.
In the specific reports:
" The Commerce Department said its
index of Leading Indicators - designed
to show future national economic tren-
ds - dropped 0.9 percent in August after
rising for four straight months.
" The Labor Department said initial
claims for state jobless benefits soared
to 703,000 in the week ending Sept. 18,
the highest recorded since the depar-
'tment began its current form of
tabulation in 1967.
In addition, a Commerce measure of
current economic conditions continued
to decline in August, hitting its low
point of the recession and thereby
signaling strongly that the downturn
was not over.
Reagan had said in advance that the
expected decline in the leading in-
dicators was no more than a "glitch" or
"blip" in the overall pattern of
recovery.
Baldrige told reporters that "at this
point we are in the interim period bet-
ween a recession and a recovery. The
signs of recovery will be more clear as
the fourth quarter unfolds." He also
predicted September's leading in-
dicators index would be up, reversing
the August decline.
Jerry Jasinowski, senior vice
president and chief economist for the
association of manufacturers, said
"The renewed decline in leading in-
dicators, particularly the decline in
building permits, suggests that we will
not see meaningful economic recovery
until 1983. Although we can expect
some pickup in retail sales later this
year, this will be largely offset by fur-
ther declines in construction and heavy
industry activity."
But Albert Cox, chairman of Merrill
Lynch Econimics, said the index "is
still signaling recovery" which will
arrive before long.
Donald Straszheim, vice president of
Wharton Econometrics, said the in-
dicators are forecasting "an unin-
spiring recovery" but a recovery
nonetheless - a forecast with which he
agrees.
And Robert Gough, a vice president
with Data Resources Inc., said the
economy seemed to be "teetering on
the edge of a turn" almost surely
toward "a kind of wobbly recovery."
O'Neill, meeting with reporters at the
Capitol, called Reagan "Hoover with a
smile," a reference to Herbert Hoover.
O'Neill
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Reagan bloops his way
through news conference
mi
r,'
,.
.;
(Continued from Page 1)
tage points. Since Reagan has been in
office, the jobless rate has climbed
from 7.4 percent to 9.8 percent - an in-
crease of 2.4 points.
ADDING TO the confusion was a goof
by the White House press office, which
prepares written transcripts of
presidential news conferences. The
transcript leaves out the word "last"
from Reagan's statement, quoting him
as saying instead that "the rate of in-
crease in unemployment in the six mon-
ths of 1980, was just about as great..."
The press office confirmed yesterday
that it had omitted the word "last."
Asked yesterday about the
president's misstatements, White
House aides refused comment. "I don't
have anything to say about it," said
deputy press secretary Larry Speaks.
"I really don't."
ON TUESDAY night, in answer to a
question about when the long-promised
economic recovery would arrive,
Reagan said: "For four quarters we
have seen a growth in the Gross
National Product."
Reagan's statement is literally
correct, since he did not say whether he
meant four consecutive quarters, the
last four calendar quarters of inflation-
adjusted GNP.
But economists always adjust GNP
figures for inflation in measuring
economic growth. By that standard,
GNP has shown growth for only two
straight quarters - the spring and
summer. During the prior two quar-
ters, inflation-adjusted GNP declined
sharply.
When inflation is not taken into ac-
count, the GNP grows almost every
quarter, which is why economists make
the adjustment to determine "real"
economic growth.
CAMPUS INTERVIEWS
11 OCTOBER 1982
CHALLENGING
ENGINEERING POSITIONS
WITH PROFESSIONAL GROWTH
IN BRIEF
Compiled from Associated Press and
United Press International reports
Dems propose budget vote
WASHINGTON- House Democratic leaders, trying to keep President
Reagan from parlaying congressional delay on the balanced-budget con-
stitutional amendment into a major campaign theme, moved yesterday to
propel the measure to a vote within 24 hours.
The change of strategy on the part of key Democrats, who earlier sought to
keep the Senate-passed proposal bottled up, came as Reagan planned a trek
to the Capitol for a pep talk to supporters of the measure.
Speaker Thomas O'Neill Jr. (D-Mass.), calling Reagan's advocacy of the
measure "blatantly political," challenged the president to "bring his balan-
ced budget with him" when he comes.
The Congressional Budget Office said Reagan's fiscal 1983 budget will
produce at least $155 billion in red ink, with deficits in both fiscal 1984 and
1985 projected at $152 billion.
Though known as the "balanced-budget" amendment, the proposal is no
guarantee that future federal spending would be kept in the black. It
requires that deficits be affirmed by a three-fifths vote in both the Senate
and House. That rule would be waived in time of war.
Even if passed by Congress and quickly ratified by the states, the mneasure
would have no impact on Reagan's current term. It would not take effect un-
til two years after ratification.
FDA seizes new diet pills
WASHINGTON- Federal agents are seizing stocks of "starch blocker"
pills from producers across the country who are defying a Food and Drug
Administration order to halt traffic in the popular weight-loss products.
The FDA charges that the pills, which use a kidney bean extract, are
classified as a drug and are marketed illegally because they have not been
approved by the agency for safety and effectiveness.
Some of the producers in the $100 million-a-year business are ignoring the
FDA's July 1 order on the ground that starch blockers are a food product, not
a drug requiring government approval.
The FDA announced yesterday that at its request, U.S. marshals dispat-
ched by the Justice Department have raided six starch blocker manufac-
turers and distributors in five states since Sept. 17, and seized pills valued at
$481,000.,
Other, unidentified producers will be raided as court warrants are ob-
tained, said FDA spokesman Bruce Brown. He said most of the more than
300 manufacturers and distributors of starch blocker pills had complied with
the agency's order to halt operations.
Hurricane Paul hits Mexico
CULIACAN, Mexico- Hurricane Paul smashed into mainland Mexico
with 120 mph winds yesterday, forcing 50,000 people to flee their homes and
leaving dozens more missing.
Army troops began evacuating 40 towns hit by the hurricane in the nor-
thern state of Sinaloa and struggled to reach 10 fishing villages cut off by
flooding, state officials said.
Thousands of people crowded into churches, schools, clubs and gover-
nment buildings to take shelter from the torrential rains and 120 mph winds
that struck Mexico's west coast early Thursday.
"Dozens of people have disappeared," a spokesman for the Culiacan fire
department said. Officials said many people had been injured, but they ad-
ded it was too early to establish an exact casualty figure.
In San Francisco, the National Weather Service said the hurricane was
responsible for bad weather as far north as Arizona.
U.S. group plans mideast
trip to increase trade
WASHINGTON- Secretary of Commerce Malcolm Baldrige will lead
some 50 U.S. officials and businessmen on a trip to drum up trade in Saudi
Arabia and Algeria, the Department of Commerce announced yesterday.
The trip, scheduled for Dec. 1 to 8, will be the first mission of this kind to
the region, the department said.
Baldrige led a similar mission to Africa in January.
This one will include officials from thegovernment's Export-Import Bank,
which finances exports, and from the Oversees Private Investment Cor-
poration, which insures American businessmen against losses from war and
expropriation. There will be businessmen from the fields of electronic com-
munications, agriculture, aviation and other industries
Spermicides may reduce
risk of VD in women
CHICAGO- Women who use spermicide contraceptives appear to be
much less likely to contract gonorrhea than those who use the pill or who
have been sterilized, new research suggests.
There has been some belief in the past that spermicides reduce the risk of
vaginal infections, but this has been based on test-tube 'studies or other
research lacking adequate controls.
The new report surveyed 77 women who developed gonorrhea and a con-
trol group of 164 who did not, all of whom used the'services of the Group
Health Cooperative of Puget Sound in Seattle.
The researchers, who reported their findings in 'the Oct. 1 issue of the
Journal of the American Medical Association, concede their methods for
determining any link between disease protection and spermicides were not
foolproof.
Nonetheless, the researchers said, "the results are encouraging and
provide further evidence favoring the idea that these substances prevent
venereal disease."
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SATURDAY, OCTOBER 9
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Vol. XCIII, No. 20
Friday, October 1, 1982
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