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 ... worst may be ahead CA N"T FIND A TEACHING JOB??? Tadi Overseas How, where, when to apply, PLUS comprehensive direc- tory and inside secrets to successful interviews. Send cheque for $19.95 to Wasosky, Jakarta Internotional School.(V) Box T9KBT, Jakarta, Selaton, Indonesia Subscribe to The Michigan Daily 764-0558 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. 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