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mi'- "K-:|cpis My dear Ur* Marascot Ton and other aeabera of the CoKaittas <an Expenditures in the i&scuti'rs lapartaents asked me, after ja^ teatisioay tm Septoaber 25, to supply you with an e$iiisat® of the probable slaa of uaemployiaent in th© calendar year 1946. I pointed oat that thara are special difficulties in preparing saefe estimates at thia tine, and that ax$r astiataias given for thia period of transition* are subject to possible error. Keverthslaas, X an sending you a staff nemoraadaa which 1 hope will serve your purposes, The estimates have been »ada in consultation with various statiatical agencies of the Federal aovawment. Sincerely yours, W*WOf»r> Director Honorable Carter Man&seo, Chatman Coafiittee on Expenditures in tba Jixecutive Departaants House of Representatives Washington, 0. C. Facloaure GColm :mff 10-2-45 October 2, 1945 e s t im a t e o f w m n ,c m m w m 19 4 6 MProjections" of wamptopmmt are made on a hypothetical basis, nsaely, the assumption that present legislation and present policies urill be continued. Mo attompt is sad# to forecast future motion of Congress. On the contrary, tints® estimates are designed to serve as a Uasis for formulating recoraaendations for future action and do not pre suppose ai$r new legislation or new policies. the estimate© are based, furthermore, on an analysis of supply and demand factors and do not take into consideration the effects of possible labor-aanageEient conflicts. These are therefor© bypothetie&l projections, not actual forecasts. Labor fore© estimates as of the week preceding VJ Bay mere as follows* Total labor fore#*.**....#.* (In millions) 66.5 Ar®ed forces.............. Civilian labor force..... 12*2 54.3 emplcpient..*.. Unemployment. . 53.5 ,3 % the first week in September, unemployment had risen to 1 *7 million. In order to estimate the provable development of unemployment during the next six months, it is necessary first to estimate the protoabi© develop ment of civilian employment. The controlling factors in U rn d@Tal©p®eat of civilian fnploysteni are* (a) The cut in war production (b) The speed of reconversion War production (saaitions and war construction) was running at an annual rate of about 160 billion in the months before M Say. far a product!**! d®c2iu«ci gradually after ¥1 Dayr to a rite of M i billion I* «?uly, ami W cutbacks brought tbs rate 4 a m to about H 9 billion In 5&pkmb&r 1945* It is •xpeeted to fall below m mrmal rate of ZXO billion fey th® osuf of tho calersdar ^®ar 1945* it tbe s«as ti»«, roeottversion m i l bo getting under wa^* It is •atttaatsd, bowover, ttat <tain& the rmxt yoar roootiveraioei will not full^ absorb the workers discharge £ r m war production, larl^r ia» Urn next ealanoar year* in the transition o«tw6<m a full war program and Ikll r*!&o©r*version, civilian employsent ma^ fall sov&ral millio&g bo&ow tho figure Just prior to ¥<? Bsy* iltb r©©«sv#r®iori csning into full swl&g, eivili&ii mplcywmi* by th® sad of tha ealsod&r year 1946 pagr approxinate tbe p n ~94 lagr lovel. The d@velopaent of mem£logpMmt is detemlned not only by the levol of civilian ©aploymsnt, but also bj a auabor of other factors affecting the total mssber of people seeking e&ploywent * These factors are of peculiar importance mrimg the period of trsmaitioa* Largely beoause of these factors, an estinat© of future wxmploymmt is espeoiall^ hasardotis at t M s tine* Most important la this respeot is the rat# of demobilise** tion of the armed forces. All arssed, fore^a, which ea&eeded 12 million at the tl»e of ?<Jf ar« expected to be reduced to about Jg million by the slides of calendar |«ir 1946* These estiss&tea are* of course, imb^oot to possible ehssifss* Dosdnp ttoe saae period there will also be a considerable farther re<fcicti©fi in the lafeor for®#* laagr workers, particularly older workers aust married m m m $ aeespted aaplaysimt faring the war* B a m of them will 3 wish to stay in employment* stoat of thcea, foawswr, retire f*ois th* active labor iorai* Al#a, many discbarged s®rvie©m©n aaci wogmmi w i H not soak «®pl03fm€nt, but will make u®a of the ©dttc&tioxial fa*5iliti«» offered to then. wiH partially offsetting tots* ratiressenfcs froa the labor force th© norsal a^Mltioiie resulting fross population growth.. By the end of 1946f it is #s$jected that net m t t r m m t s m&j total || million* faking into account all of thes* factars-~«rid allowing also for the seasonal awing in the lalxwr fore© &a eMlcSmn xm-mt*r school, etc. we obtain aa estimated peak of laMf&ogpMat of 8 ailXion which early to tfee calendar y«ar 1^46* ovwr U rn m sy oc<mr that'is «** laenHMMi of afcoufc. 6 million level of mm&playmx& i» early 3epteab«r« timated that the progress of It is further es may r»d*ace uBaa^loymont can- etdarabljr faring the eale»<ii*r yaar 1946, altbcaigh substantial would continue to exist* It should b€ aapbasisacl again that these estlnatoa are baaed on present legislation ansi policy plans. Ths^ are not aetaal foreeasts.
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