CHAPTER 3. MAINTAINING PRICE STABILITY AND REDUCING UN EMPLOYMENT.. CHAPTER 4. Selected USES OF ECONOMIC GROWTH. CHAPTER 5. GROWTH AND Balance in tHE WORLD ECONOMY... Page 99 135 170 199 207 ECONOMIC REPORT OF THE PRESIDENT To the Congress of the United States: A healthy and productive economy is a bulwark of freedom. Around the world and here at home, our trials of strength, our works of peace, our quest for justice, our search for knowledge and understanding, our efforts to enrich our environment are buttressed by an amazing productive power. Americans have confronted many challenges in this century. The ones we face in 1967 are as trying of men's spirits as any we have known. But the overwhelming majority of us face our challenges in comfort, if not affluence. The sacrifices required of most of today's generation are not of income or security; rather we are called on to renounce prejudice, impatience, apathy, weakness, and weariness. In purely material terms, most Americans are better off than ever before. That fact expands our responsibilities, as it enlarges our resources to meet them. RECENT ECONOMIC GAINS An average of 74 million persons were at work in 1966–2 million more than in 1965. Nonfarm payrolls averaged 64 million, a gain of 3 million. On the whole, these jobs were better paying than ever, and more regular and more secure than most workers can remember. The value of our total production of goods and services in 1966 was $740 billion $58 billion, or 82 percent, higher than in 1965. More of the increase than we wanted represented higher prices. Still, the gain was nearly 52 percent after correction for price changes. Labor, business, and the farmer all contributed to this major gain in production, and they rightly shared the benefits. Aggregate compensation of employees rose 10.3 percent. Average compensation per man-hour in the private economy rose 6.5 percent, reflecting increased wages and fringe benefits, more overtime, the shift to higher-paying jobs, and increased employer contributions to Social Security. Corporate profits after taxes advanced more than 8 percent; per dollar of sales they were roughly unchanged from the high rate of 1965. Net income per farm rose more than 10 percent. The single most meaningful measure of economic well-being is real disposable income per person-the after-tax purchasing power in stable dollars, available on the average to every man, woman, and child. It rose 32 percent or $89 per person in 1966. Although this advance was somewhat smaller than in 1965, it was still three times as large as the average yearly gain in the 1950's. February 1961 launched the strongest and most durable economic expansion in our economic annals, and it still continues. Almost 9 million jobs have been added in the last 6 years. The rate of unemployment has fallen from 7 percent in early 1961 to under 4 percent. The rate for white adult males fell from 5 percent to 2 percent; for Negro men, from nearly 12 percent to less than 5 percent. Early in 1961, more than two-thirds of our major labor markets were "areas of substantial unemployment"; today only 8 of the 150 are so classified, and 66 have unemployment below 3 per cent. • While total population rose 11 million between 1961 and 1965, the number of Americans in poverty declined 51⁄2 million, and probably fell at least another 14 million in 1966. (The poverty definition is adjusted for the increase in living costs.) • Our gross national product (GNP) has grown 50 percent in 6 years. In constant prices, the gain has averaged 52 percent a year. The physical output of our factories and mines is up over 50 percent. Private output per man-hour in 1966 was 19 percent higher than in 1961. The 6-year addition to our gross stock of private productive capital-machines, buildings, transportation equipment, land improvements, and inventories—is valued at $220 billion. American families have added $470 billion to their accumulated financial assets. They have added $150 billion to their debts. So their net financial position is $320 billion stronger than 6 years ago. OUR ECONOMIC PROBLEMS Prosperity is everywhere evident. But prosperity is never without problems, and in 1966-some of them were serious. |