Masonry Magazine January 1967 Page.24
Washington Wire
(Continued from page 13) But the heavy impact that leads to ordering machines and materials and to hiring-may be over. If this view is valid, why will businessmen rush to build inventory rapidly or step up their plant-building?
This minority of forecasters and it is a minority-doesn't think a tax increase is a vital necessity, though it might still be a good thing. They look for healthy growth, but bearable inflation. They think that the climb in interest rates has peaked. And the rise in prices may soon slow down.
HIGH INTEREST RATES ARE BEGINNING TO DAMPEN borrowing and do some of the job of restraining inflation at any rate, that is the view of top officials at the credit-controlling Federal Reserve. They believe that the high money costs reached during the yield rise of the last six months can't comfortably be covered by many enterprises. As a result, some are expected to try to get along without borrowing-and that means deferring spending.
Home-building is already starting to feel a bit hemmed in. Rates never did slump during the money easing that occurred early in the year. Recently, they have begun to creep up. Money is still available, but is "pricing itself out of the market." Won't businessmen discover this, too? If so, the "Fed" won't have to tighten hard even if taxes don't go up.
THE CLIMB IN WAGES APPEARS TO BE ACCELERATING, according to recent surveys of labor settlements. Each quarter seems to be bringing increases in average gains in hourly wage rates that are significantly larger than those of preceding periods. For the third quarter, for example:
-In manufacturing, the median hourly rise was 13/½¢, up from 12/½¢ in April-June and 10/½¢ over the same period of 1966.
-In non-manufacturing, the typical increase was 1912-nearly a nickel an hour more than the 154 of third-quarter 1966.
And now comes the fat hike in autos-a big target for others.
CORPORATE PROFITS ARE CLEARLY BACK ON AN UPTREND again, and the rise seems likely to continue on into 1968-though at only a slow rate of climb. After-tax net rose to a $47½ billion-a-year level in the third quarter-a gain of 3% over the $46 billion of January-June. But they were still quite a bit below the record $49 billion peak of the third quarter of last year.
Profits will continue to benefit from several trends:
-Higher sales will contribute to net as 1968 rolls along.
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