Real Spendable Weekly Earnings
RECENT ECONOMIC AND POLICY DEVELOPMENTS in the areas of stabilization, allocation, and distribution help explain the current political mood in some parts of the United States in favor of greater protectionism. In the area of macroeconomic stabilization, anti-inflationary policies in 1968-71 led to an undesirably high rate of unemployment. For a number of reasons, these had only limited success in reducing the rate of inflation at the hoped-for speed; the result was the price controls imposed on August 15, 1971. The inflation, an increasingly overvalued dollar, and business cycle developments here and abroad placed pressure on both our ability to export and on U.S. industries that compete with imports, depressing the U.S. merchandise trade balance from a $3.8 billion surplus in 1967 to a $2.7 billion deficit in 1971.