Current State Of The U.S. Economy

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next step. In 1949 and 1955 were the only two other times that the CPI has declined. Despite this obstacle some believe it is a remote possibility. Jane Bryant Quinn reported the pluses of the deflation. “When labor productivity rises-up 2.4 percent by most recent count-prices can fall by the same amount, with benevolent effects. Under this scenario, wages would probably stay the same or rise a bit. But things cost less, standards of living would improve, borrowers could repay their debts. Even people on fixed incomes would get a break, because their dollars go further.” George Bush in 1990 envisioned an interest rate between one and two percent by 1994. This did not happen but some do credit his big budget reform as the start to what is taking place now during the era of Bill Clinton. I doubt that deflation is a reasonable goal or for that matter if it is something that we want to strive for considering the Great Depression but I would like to see inflation ...

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TREAS. BILLS 5.07 5.05
10-YR TREAS. INF(XX) 3.67 3.32
10-YR. TREAS. NOTES 5.61 6.52
30-YR TREAS. BONDS 5.92 6.77
TELEPHONE BONDS 7.11 7.83
MUNICIPAL BONDS(xxx) 5.23 5.76

PRODUCTIVITY

The productivity for 1997 grew a solid two percent, on top of a 1.6 percent increase in 1996. With this there was not an efficiency increase also compensation is growing at a five percent annual rate therefor unit labor costs are likely to have grown at a rapid four percent clip. Most economists feel that wage growth will continue to rise at a fast pace and productivity gains will be harder to come by, because the skilled workers have already been ...

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