Part II
ECONOMIC REVIEW OF 1953
Chapter 2
Performance of the American Economy
THE PAST YEAR was marked throughout most of the free world by
new advances in production, general price stability, salutary readjust-
ment of the international pattern of trade and payments, and further re-
moval of the emergency controls instituted during World War II and its
aftermath. In the United States and Western Europe effective monetary
policies have been established. Domestic price controls and rationing have
disappeared almost everywhere. In nearly all countries monetary inflation
has been stopped and restrictions on foreign trade relaxed. The gold and
dollar reserves of the free world outside the United States have increased
sharply. Further liberalization of international trade and unrestricted con-
vertibility of currencies have become subjects of serious and lively discussion.
Such a conjunction of favorable developments has not existed for some
years. But the dislocations wrought by war and inflation have not yet
vanished, and they are likely to continue to harass the world for some time.
The upsurge of production and employment, which has been sustained
with but brief interruptions in the United States for about a dozen years,
continued in 1953. New records were established in industrial activity, em-
ployment, and the disbursement of incomes. Unemployment reached the
lowest level of any peace-time year in recent decades. The average level of
prices was remarkably steady. The fruits of expanding production and
enterprise were shared widely. Perhaps never before in their history have
the American people come closer to realizing the ideal of high and expand-
ing employment, without price inflation, than in 1953. But some sections
of industry, notably farming, failed to participate in the widespread pros-
perity. The index of consumer prices inched a little higher in spite of
some decline in food prices. And economic activity, taken as a whole,
receded somewhat toward the close of the year.
BROAD CHARACTERISTICS OF RECENT