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Sundance, Wyoming
January 3, 1985     The Sundance Times
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January 3, 1985

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,i ~o:x. ~318 ,:&~.o, ! LincoZn ,, NS ~506 Slow- but steady- forecast for 1985 By Babson's Reports Inc., Wellesley Hills, Mass., Decem- ber 27, 1984. A year ago the A~erican economy was running. t~der a full head of steam. After only a mild upturn during the winter months of 1983, the business tempo suddenly quick- ened dramatically in the spring B-~d remained much stronger than ~eX~ved through year's end. e vigor and tenacity of the ~Conomic revival was such that~ One of the major points of concern t%s that the economy would over-: heat and pave the way for a new ~ve of inflation and other devas- tating problems. It was against the backdrop that the staff of Babson's Reports Predicted a period of further ~nomic growth for 1984, albeit Re less spectacular than was the tase in 1983. As 1984 unfol- ded it seemed as though there ~uld be no stopping the onrush f " . , P business, wlth the year s first !.Wo quarters continuing to display ~r and stamina on the econo- ~c front. While this develop ent served to exacerbate anxieties over the possibility of an OVerheated economy, the high Pate of manufacturing capacity Utilization and brisk consumer ~nd business demand for goods iand services thankfully did not tr~slate into renewed inflation ~d a straining of credit. RECESSION FEARS EMERGE . When the long awaited cool- .zng down of the pace of the ~Conomic recovery/expansion did ~, however, the letdown was abrupt and pronounced. 'dway in 1984 the rate of busi- ness advance suddenly slowed to Crawl. The marked contrast of an economy catapulting ahead earlier to one which seemed lack- ing in vitality caused a shift in the focal point of national concern. from the possibility of fresh infla- tionary pressures to the new threat of what might develop into another period of recession. Throughout the second half of the year now drawing to a close, the Babson staff steadfastly main- tained that the slowdown was a necessary correction period--not a prelude to a recession. After all, five of the eight calendar quar- ters of 1983 and 1984 were mar- ked by superb economic growth, at rates far above the nation's historical long term economic growth achievement, and hence the breathing spell was a natural development. Nonetheless, it was disconcerting that the widely watched index of leading econo- mic indicators suffered a down- turn of sufficient duration to constitute at least one wamin_g signal that an economic reces- sion may be in the offing. 1984..SLOW GROWTH, NO RECESSION Six months of listless business have dampened public sentiment considerably. Hence, anxieties that an economic recession may be lurking nearby cannot be sum- marily dismissed. There are, in addition, some major problems confronting the nation which if not brought to heel could ulti- mately produce harmful economic and monetary consequences. Among these are the outsized federal budget deficit, the over- whehning adverse balance of foreign trade, the lingering plight of the farm sector and some of the once indispensable "smoke stack" industries and the regions where they are situated, and the uncertainties of what changes will be wrought by the federal income tax "simplification" effort and the moves to cut the budget deficit. However, Babson's Reports forecasts that 1985 will not suf- fer an economic recession. The drastic slowing of the pace of the economy's uptrend during the second half of 1984 was a wel- comed pause, one needed to keep inflationary pressures at bay. In addition to serving as a relief valve with respect to inflation, the slowdown also paved the way for a subsidence of high-level inter- est rates and facilitated the trans- iton of monetary policy from anti- inflation restraint to an approach which can more readily acco- ~te the credit-easing moves needed to fend off the threat of a recession. The resultant down- turn in interest rates of recent months should bolster public con- fidence, shore up the erosion in the pace of consumer spending, and bolster residential building sufficiently to forestall the onset of an economic recession. Thus, the staff of Babson's Reports looks forward to a year of slow but steady economic growth in 1985. THE ECONOMY REMAINS ~AMENTALLY SOUND Recent months' faltering busi- ness notwithstanding, the Ameri- can economy remains more solid than is generally perceived. Even though public sentiment is not as ebullient as it had been when the economic recovery was burgeon- ing, there is no widespread sense of pessimism. Nor should there be, since the trend of economic acitivity is still upward and employment and income condi- tions remain generally favorable. Moreover, the economy has not developed the major excesses which in the past have toppled advancing phases of the business cycle. This time, consumers became more selective in their spending once pent-up needs were satiated, in response to softening consumer demand, businessmen moved quickly to trim orders, thus averting a seri- ous case of inventory indigestion in most instances, in the housing sector, high interest rates in recent years served as a deter- rent to widespread speculative building. In addition, during this econimic recovery/expansion, businessmen have focused capital expenditures upon productivity enhancing equipment and systems, and there has been no let-up in the vital task of keep- ing a close watch on costs. Withil the economy on firm ground, i therefore, we look for further growth at a moderate, rate will into, and likely through, 1986. : GROSS NATIONAL PRODUCT Although the staff of Babson's Reports does not expect 19~'s economic vitality to rival the con- sistenfly high rates of increases which were prevalont from the second 1983 quarter through mid- 1984, it is anticipated that the pace of business during the year' ahead can be somewhat better than that of the second half ok 1984. The nation's real gross! national product (GNT in 1972 dollars) should trend upward at a pace somewhat above the aver- Fantasy in fog... ~noto by Pat Larsen EIGHTY-SEVENTH YEAR 1985 No. 1 r0blems expected THE SUNDANCE TIMES No serious p due to vaccine shortage IN THEBLACK HILLS TWENTY-PIVE CENTS- " .... Wyom~'s disease prevention ciation of Pediatrics have recom- ing tax emempt interest and one- OF WYOMING ..... PER COPY Official New,paper for Cro~k County, City ~f Sum:lance and U. S. Land Offi~ .