Agriculture is one weak spot. Residential building and appliances
are others. An apparent let-up in plans for new capital investment
and some limited defense production cutbacks are in prospect.
As we look ahead, we see some indicators—some straws in the wind
—which seem to say that no immediate vigorous upturn is in sight.
The apparent slackening in the sustained increase in consumer buying
and in intentions to buy should be mentioned, along with the weak-
ness of the stock market, the whole problem of inflation, and the
uncertain economic position of a number of foreign countries.
But, generally speaking, we tend to overlook these weak spots,
especially in any analysis embracing more than a year or two. They are
overshadowed by the general picture of economic strength elsewhere.
EMPLOYMENT AT RECORD LEVEL
In these circumstances, and despite the general tendency to look
for soft spots, it is not surprising to find that employment—currently
around 67 million in civilian occupations, including agriculture—is
also at record levels.
Unemployment is at the low rate of approximately 4.2 percent
of the civilian labor force. After adjustment for the normal seasonal
changes, it has been fairly stable at 4 to 4.5 percent for over two
years. This is true in spite of the fact that we have added more than
2.5 million people to the labor force since mid-1955, and in spite of
actual declines in employment in some industries. This over-all growth
in employment is due in good part to the almost insatiable demand for
help in trade, the services, recreation, and state and local government.
You may not realize how much the employment center of gravity
of our economy has shifted in recent years, but by 1954 fewer people
were employed in the so-called “basic industries”—agriculture, mining,
manufacturing, construction, and transportation and public utilities—
than in other industries and occupations, for the first time in history.
At the same time, we have more “white collar” workers than “blue
collar” workers. Only a very rich country, with very high rates of
productivity in all its basic industries, can afford such luxury as is
implied by so much service as this. This situation is, in itself, an indi-
cator of our extraordinary high national standard of living.
REAL WAGES RISE
When labor is in great demand, workers are in a strong position to
bargain—and they do. Consequently, wages have been rising, especially
in manufacturing, transportation, mining, the utilities, and construc-
tion, where business has been especially active, profits have been con-
siderable, and generally speaking, labor is well organized to bargain.
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