The Economic Report
of the President
TRANSMITTED TO THE CONGRESS
January 1948
THE ECONOMIC REPORT
OF THE
PRESIDENT
To the Congress, January 14, 1948
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON : 1948
LETTER OF TRANSMITTAL
THE WHITE HOUSE,
Washington, D. C, January 14} 1948.
The Honorable the PRESIDENT OF THE SENATE,
The Honorable the SPEAKER OF THE HOUSE OF REPRESENTATIVES.
SIRS : I am presenting herewith my Economic Report to the Congress,
as required under the Employment Act of 1946.
In preparing this report I have had the advice and assistance of the
Council of Economic Advisers, members of the Cabinet, and heads of
independent agencies.
Respectfully,
Contents
Page
I. FOREWORD AND SUMMARY
1
II. LEVELS OF ECONOMIC ACTIVITY IN 1947
11
The course of employment and production
11
Employment
11
Production
11
Productivity
15
The flow of goods and purchasing power
15
Consumer income, expenditure, and saving
15
Business investment, income, and
financing
22
International transactions
25
Government transactions
28
Summary: The Nation's Economic Budget
31
III. PRICE AND INCOME TRENDS AND THE COURSE OF INFLATION... .
34
Price trends
34
Wage trends
37
Profits
40
The nature of inflationary pressures
41
Why inflation is dangerous
43
IV. LEVELS OF ACTIVITY AND ADJUSTMENTS NEEDED IN 1948
45
Needed levels of employment, production, and purchasing
power
45
Employment objective
45
Production objective
45
Purchasing power objective
46
Fiscal policy to combat inflation
47
The regulation of credit
48
The need for selective controls
50
The need for voluntary restraint
51
Page
V. LONG-RANGE OBJECTIVES FOR THE AMERICAN ECONOMY
53
Our ability to grow
53
Development of natural resources and capital equipment.
56
Natural resources
56
Business plant and equipment
59
Transportation
62
Urban redevelopment
64
Housing
65
Development of human resources and productivity
68
Size and composition of the labor force
68
Education for the modern economy
69
Research
71
Good health and productivity
72
Secu