The Michigan Daily-Thursday, June 4, 1981-Page 3
Economic forecast mixed
'U' economists predict slower
inflation, differ on unemployment
By NANCY BILYEAU
Using extensive survey data, a group of University
economists and specialists predict that President
Reagan's supply-side economic package may lower
inflation and generate greater production and em-
ployment by 1982.
Consumer attitudes, the automobile industry in
North America and Japan, and unemployment in
American households were other areas discussed in
"Economic Outlook USA," a quarterly publication of
the Institute for Social Research's Survey Research
Center.
One section stated that although Reagan's policies
will generate greater employment through fiscal
year 1982 than "a status quo fiscal policy," economic
growth may not accelerate fast enough to cut unem-
ployment figures bythe spring of 1982.
ACCORDING TO a report by University economics
Prof. Philip Howrey, next year's University
graduates may face a slightly higher unemployment
Srate thsn this year's class.
The projected unemployment rate for next year is
8.1 percent, compared to 7.6 percent in 1981 and 7.2
percent in 1980, Howrey stated.
The GNP is expected to increase by 2 percent in
1981-82, Howrey said. However, a 3 to 3% percent
climb in output is needed to stem unemployment, ex-
plained Joan Crary, an assistant research scientist in
the University's economics department who con-
tributed to the "U.S. Economic Outlook for 1981-82"
section.
"THE ECONOMY has to be able to keep up with the
amount of people entering the work force," Crary
said, adding that the job outlook varies from field to
field.
Raymond Saulnier, professor emeritus of
economics at Columbia University, was optimistic
about supply-side economics' effect on inflation.
"I have no doubt that supply-side economics
greatly enhances the prospects for lowering the in-
flation rate," Saulnier wrote, adding that, "given a
chance, it could in time even cure inflation."
FIRST OF ALL, the "Reagan group's" better un-
derstanding of the causes of inflation make it less
likely they will be drawn into "counterproductive"
efforts to stem inflation, Saulnier said.
The administration's "attack" on federal budget
outlays coupled with tax changes that "increase in-
centives to save and invest" will help slow inflation,
Saulnier continued.
The former Columbia University economist had
less favorable predictions for Reagan's proposed cuts
in personal income taxes. "Tax cuts, especially those
affecting consumption, are found to dilute the anti-in-
flation effect of budget spending reductions,"
Saulnier concluded.
PROF. RICHARD Curtin, Director of ISRs Survey
of Consumer Attitudes, reported in his section of the
"Outlook" that consumer evaluations of current
economic conditions were less favorable in 1981 than
in 1980, adding that current attitudes toward buying
conditions were especially poor.
However, Curtin's research reveals that "expected
change in government policy" has triggered
significantly greater public expectations for future
improvement in personal finances and business con-
ditions.
Curtin also contributed to a study which explored
attitudes toward unemployment, utilizing five
nationally representative surveys conducted by the
Survey Research Center between December 1979 and
December 1980.
THE DATA indicates that one or more members of
a substantial number of American families have
recently been unemployed. More than three-fourths
ECONOMISTS, WRITING IN the "Economic Outlook
USA," a quarterly publication of the University's In-
stitute for Social Research, presented a generally
favorable view of President Reagan's supply-side
economic program.
of the unemployment spells involved one or more of
the major family earners-the single adult head, or
one or both married adults-with 11 weeks being the
median length of unemployment.
In comparison to studies conducted more than two
decades earlier, there is now a greater incidence of
unemployment among American households, less
participation in the unemployment compensation
program, and families taking more varied and more
frequent measures to offset income loss due to unem-
ployment, the study concludes.
I,
Tornadoes
rip through
Denver;
40 injured
DENVER (AP) - A powerful storm
system spawned a dozen or more tor-
nadoes in the Denver area yesterday,
and one of them roared through part of
Denver and three suburbs, injuring at
least 40 people at a suburban shopping
center, officials said.
As evening approached, police began
receiving scattered reports of looting,
and the Colorado National Guard was
called in to quell any trouble in subur-
ban Thornton, the hardest-hit area.
"AN MP (military police) company
of 100 armed men is taking position in
the area," said John Truby, spokesman
for the Colorado Division of Disaster
Emergency Services. "There's a great
deal of chaos and damage up there and
we want to make sure nothing gets out
of hand."
The worst damage and most of the
confirmed injuries were reported in
northeast Thornton, where a tornado
tore off the roof of the D&B Shopping
Center and smashed all the windows of
an apartment building before con-
tinuing on northeasterly path through
See TORNADOES, Page 7
Fighting the torrent
Andy Griffith, of Ann Arbor, tightly clutches a six-pack as he bravely crosses the torrent of the Huron River rapids at
Delhi Park, several miles northwest of Ann Arbor. For a complete guide to the area's parks, recreation areas and twen-
ty pages of other ideas for filling your weekends in Ann Arbor this summer, look for the Michigan Daily's Summer
Recreation Supplement enclosed in tomorrow's Daily.