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THE DOLLAR, MONETARY POLICY AND THE ECONOMIC OUTLOOK Remarks of John J. Balles, President Federal Reserve Bank of San Francisco Meeting With Southern California Community Leaders Laguna Niguel, California November 26, 1985 In t r o d u c t i o n Last month marked the e n d of CURRENT BUSINESS CYCLE EXPANSION, FAVORABLE DEVELOPMENTS TO NOTE, the third year of the In MANY WAYS, THERE ARE OVER THESE THREE YEARS ALMOST 9 MILLION NEW JOBS WERE CREATED AND THE TOTAL VOLUME OF GOODS AND SERVICES PRODUCED BY THE U.S. MEASURED BY INFLATION-ADJUSTED, OR REAL ECONOMY/ AS GNP, INCREASED TO A LEVEL MORE THAN TEN PERCENT ABOVE ITS PREVIOUS PEAK IN 1981. AT THE SAME TIME, THE UNEMPLOYMENT RATE WAS BROUGHT DOWN FROM 10.7 PERCENT TO 7.1 PERCENT. ALTHOUGH THIS RATE REMAINS UNCOMFORTABLY HIGH RELATIVE TO HISTORICAL EXPERIENCE, IT IS ALSO TRUE THAT A RECORD NUMBER OF Am e r i c a n s are at w o r k , with approximately ADULT POPULATION WORKING IN OCTOBER — 60 percent of the THE HIGHEST RATE IN THE POST-WAR PERIOD. Mo r e o v e r , this business expansion has been accompanied BY SUBSTANTIAL IMPROVEMENT ON THE INFLATION FRONT. A t THE PEAK OF INFLATION IN 1980, THE TWELVE-MONTH RATE OF CHANGE in t h e C o n s u m e r P r i c e In d e x PERCENT ANNUAL RATE. registered an alarming 14.7 BY CONTRAST, OVER THE LAST TWELVE MONTHS THE INDEX HAS RISEN ONLY 3.2 PERCENT, AND SO FAR IS SHOWING NO SIGNS OF ACCELERATION. GRANTED, WE ARE NOT AT 2 - - PRICE STABILITY YET/ BUT WE HAVE MADE IMPRESSIVE STRIDES OVER THE LAST FIVE YEARS TOWARDS ULTIMATELY ERADICATING INFLATION. Th e r e has been a I HAVE JUST REVIEWED. darker s i d e , h o w e v e r , to the good news In THE LAST EIGHTEEN MONTHS WE HAVE SEEN A MARKED SLOWING IN THE RECOVERY. RELATED TO THIS HAS BEEN THE MARKEDLY UNEVEN COMPOSITION OF THE EXPANSION, WITH SOME SECTORS CONSPICUOUSLY FAILING TO SHARE IN THE OVERALL PROSPERITY -“NOTABLY AGRICULTURE, FORESTRY, MINING AND SOME MANUFACTURING INDUSTRIES. THIS UNEVENNESS HAS SHOWED UP, AMONG OTHER WAYS, IN THE UNCOMFORTABLY LARGE DIFFERENCES IN STATE UNEMPLOYMENT RATES WITHIN THE TWELFTH DISTRICT. So m e decline in t h e rate AS AN EXPANSION MATURES. of economic growth is n o r m a l INDEED, SOME FORECASTERS HAVE BEGUN TO RAISE THE POSSIBILITY OF A RECESSION NEXT YEAR. Al t h o u g h our this possibility research continuation staff of the at the cannot Bank economic be ruled believes expansion at out completely, this point that a through 1986 IS STILL of forecast, THE MOST LIKELY PROSPECT. Before I turn to some particulars this I WOULD LIKE TO GIVE YOU A LITTLE BACKGROUND ABOUT THE FEDERAL BUDGET AND TRADE DEFICITS, THE RECENT BEHAVIOR OF THE DOLLAR, AND THE PROBLEMS THESE DEVELOPMENTS HAVE POSED FOR MONETARY POLICY. - 3 The B u d g e t For and T r a d e De f i c i t s calendar 1985, year the federal government DEFICIT IS PROJECTED TO BE A MIND-BOGGLING Be t w e e n 1981 and 1983 the deficit relative $193 to budget BILLION. GNP almost TRIPLED TO ABOUT 5 PERCENT OF GNP, AND HAS REMAINED IN THAT NEIGHBORHOOD EVER SINCE, THERE IS NO PRECEDENT IN OUR PEACE-TIME HISTORY FOR NUMBERS OF THIS MAGNITUDE. GlVEN THE DEADLOCK THAT HAS PREVAILED IN CONGRESS FOR THE LAST SEVERAL YEARS OVER ATTEMPTS TO COME TO GRIPS WITH THE BUDGET IMBALANCE, I AM NOT OPTIMISTIC THAT THE DEFICIT WILL BE CUT SIGNIFICANTLY IN THE FORESEEABLE FUTURE. THE PROTRACTED DEBATE, FOR EXAMPLE, IN RECENT WEEKS OVER LEGISLATION TO CUT THE DEFICIT IN CONNECTION WITH RAISING THE FEDERAL DEBT CEILING HAS ONLY SERVED TO CONFIRM THIS VIEW IN MY MIND. The FEDERAL DEFICIT REPRESENTS A SUBSTANTIAL CLAIM ON OUR NATION'S SAVINGS, CURRENTLY ABSORBING BETWEEN 45 TO 50 PERCENT OF THE NET SAVINGS MADE BY HOUSEHOLDS, BUSINESSES AND STATE AND LOCAL GOVERNMENTS. THIS HAS RESULTED IN SOME OF THE TRADITIONAL "CROWDING OUT," AS IT IS CALLED, OF HOUSING AND BUSINESS CAPITAL OUTLAYS THAT OCCUR WHEN DEFICITS PUT UPWARD PRESSURE ON INTEREST RATES. In THIS EXPANSION, HOWEVER, THE BURDEN OF FINANCING THE BUDGET DEFICIT HAS FALLEN TO A SIGNIFICANT EXTENT ON THE FOREIGN SECTOR OF THE ECONOMY — IN OTHER WORDS, ON INDUSTRIES WITH IMPORTANT EXPORT MARKETS OR THAT FACE HEAVY COMPETITION FROM FOREIGN IMPORTS. - 4 - I'm sure you're all familiar by now with the story of how the growing budget deficit ultimately translated into a depressed foreign sector of the economy. The massive CAPITAL INFLOW FROM ABROAD PROMPTED BY HIGH INTEREST RATES HERE BID UP THE VALUE OF THE DOLLAR BY APPROXIMATELY 50 PERCENT BETWEEN MID~1980 AND EARLY 1985. THE EFFECT WAS TO MAKE OUR EXPORTS EXPENSIVE IN TERMS OF FOREIGN CURRENCIES/ WHILE THE DOLLAR PRICE OF IMPORTS TO THE U.S. FELL. As A RESULT/ OUR BALANCE ON OUR INTERNATIONAL ACCOUNT DETERIORATED ALARMINGLY AS EXPORTS GREW SLUGGISHLY/ AND IN SOME SECTORS DECLINED/ WHILE IMPORTS SURGED. It NOW APPEARS THAT OUR DEFICIT IN TRADE IN GOODS AND SERVICES PLUS INVESTMENT INCOME FOR 1985 WILL REACH A RECORD OF $140 "$150 BILLION/ AN UNPRECEDENTED FIGURE. L et me note parenthetically that I recognize that the BUDGET DEFICIT IS NOT THE ONLY FACTOR ACCOUNTING FOR THE HIGH DOLLAR AND THE IMPACT ON OUR FOREIGN TRADE. OUR POLITICAL STABILITY/ LOW INFLATION/ VIGOROUS ECONOMY/ AND DIVERSIFIED RANGE OF INVESTMENT OPPORTUNITIES ALL HAVE MADE THE DOLLAR A PARTICULARLY ATTRACTIVE INVESTMENT VEHICLE IN RECENT YEARS. HOWEVER/ IN MY OPINION/ THE BUDGET DEFICIT HAS BEEN THE SINGLE MOST IMPORTANT FACTOR PRODUCING THE SHARP RUN-UP IN THE DOLLAR'S VALUE SINCE 1980. - 5 - Un e v e n Ec o n o m y As we've all been made aware by now, the strong dollar's impact on U.S. COMPETITIVENESS has led to a dual economy, O n one hand, from the standpoint of U.S. and tourists, the strong dollar has been a bonanza. other hand, U.S. consumers O n the firms competing with overseas businesses HAVE BEEN PUT AT A SEVERE COST DISADVANTAGE. MILLION NEW JOBS CREATED SINCE 1982, ALMOST Of THE 9 1\ MILLION HAVE BEEN IN THE SERVICE AND TRADE SECTORS WHICH ARE FAIRLY WELL INSULATED FROM IMPORT COMPETITION. In CONTRAST, THERE HAS BEEN LITTLE GROWTH IN MANUFACTURING EMPLOYMENT, AND AN ACTUAL LOSS OF ALMOST A HALF MILLION JOBS IN AGRICULTURE. This uneven development has led to FOR PROTECTION FOR A WIDE RANGE OF U.S. increasing demands INDUSTRIES INCLUDING AGRICULTURE, STEEL, AND TEXTILES. In MY OPINION, PROTECTIONISM IS NOT THE ANSWER, IT DOES NOT ADDRESS THE FUNDAMENTAL PROBLEM THAT WE AS A NATION ARE NOT SAVING ENOUGH TO FINANCE OUR EXPENDITURES FOR HOUSING AND PLANT AND EQUIPMENT, COVER THE FEDERAL DEFICIT, AND BE IN BALANCE ON OUR INTERNATIONAL ACCOUNT. PROTECTIONISM WOULD ONLY SHIFT THE BURDEN OF THE BUDGET DEFICIT TO SOME OTHER SECTOR, NOT ELIMINATE IT. Re l i e f for Ea r l y the this Do l l a r y e a r , the PROSPECTS FOR THE U.S. emergence of less optimistic ECONOMY, SUBSEQUENT DECLINES IN 6 - - INTEREST RATES/ AND SUBSTANTIAL FOREIGN EXCHANGE INTERVENTION ON THE ORDER OF $10 BILLION BY THE U.S. AND OTHER CENTRAL BANKS IN LATE FEBRUARY HELPED TO PUSH THE DOLLAR DOWN APPROXIMATELY 8 PERCENT BETWEEN FEBRUARY AND Se p t e m b e r . These developments were followed by the Se p t e m b e r AGREEMENT BY THE GROUP OF 5, WHICH CONSISTS OF THE U.S./ Ja p a n / the U n i t e d K i n g d o m / Fr a n c e Ge r m a n y , and to coordinate THEIR OVERALL ECONOMIC POLICIES TO ENCOURAGE FURTHER ORDERLY DEPRECIATION OF THE DOLLAR AND TO SUPPORT SUCH COORDINATION WITH FOREIGN-EXCHANGE MARKET INTERVENTION WHERE APPROPRIATE. S ince the a g r e e m e n t , the dollar has declined PERCENT AGAINST OTHER CURRENCIES AS A WHOLE. February there has been a total drop of 15 a further 7 THUS/ SINCE percent in t h e TRADE WEIGHTED VALUE OF THE DOLLAR. Ho w e v e r , the depreciation HAS VARIED A GREAT DEAL. against individual currencies SlNCE THE G~5 AGREEMENT/ THE DOLLAR ESSENTIALLY HAS REMAINED UNCHANGED AGAINST THE Ca n a d i a n d o l l a r / has depreciated approximately 15.9 percent AGAINST THE JAPANESE YEN, AND HAS DECLINED 6.8 PERCENT AGAINST THE MAJOR EUROPEAN CURRENCIES. T he DECLINE IN THE DOLLAR'S VALUE SINCE FEBRUARY HAS BEEN HEARTENING, BUT NEVERTHELESS THE DOLLAR'S VALUE STILL REMAINS APPROXIMATELY 35 PERCENT ABOVE ITS 1980 BASE. In MY - 7 - OPINION/ FURTHER SIGNIFICANT PROGRESS IN BRINGING THE DOLLAR DOWN WILL DEPEND UPON/ AMONG OTHER THINGS/ MEANINGFUL REDUCTIONS IN THE U.S. FEDERAL BUDGET DEFICIT/ FOR THE REASONS I HAVE ALREADY DESCRIBED TO YOU. ‘ ALSO HAVE I DESCRIBED TO YOU MY VIEWS ABOUT THE LIKELIHOOD OF THAT HAPPENING IN THE FORESEEABLE FUTURE. IN THIS CONTEXT/ IT IS INTERESTING TO NOTE THAT JAPAN/ WHOSE CURRENCY HAS MOVED THE MOST AGAINST THE DOLLAR/ HAS SUPPORTED ITS FOREIGN EXCHANGE INTERVENTION WITH A RANGE OF DOMESTIC POLICY INITIATIVES. SlNCE THE SEPTEMBER MEETING/ SHORT-TERM INTEREST RATES HAVE RISEN SIGNIFICANTLY IN JAPAN. In ADDITION/ THE JAPANESE HAVE ANNOUNCED FISCAL INITIATIVES/ SUCH AS LOW- INTEREST HOUSING PROGRAMS/ TO STIMULATE DOMESTIC DEMANDS/ AS WELL AS VARIOUS TECHNICAL CHANGES THAT WILL OPEN up Ja p a n to foreign pharmaceutical and telecommunications FIRMS. Mo n e t a r y Po l i c y Ov e r the last y e a r - a n d - a - h a l F/ t h e most pressing CONCERN OF MONETARY POLICY HAS BEEN TO FACILITATE THE TRANSITION OF THE ECONOMY TO MORE MODERATE BUT SUSTAINABLE RATES OF GROWTH AS THE NEGATIVE EFFECTS OF THE BUDGET DEFICIT BEGAN TO MAKE THEMSELVES FELT ON THE TRADE ACCOUNT. This goal helps explain the F e d 's concern about how to RESPOND TO THE RAPID GROWTH OVER THE LAST 12 MONTHS OF 11,5 PERCENT IN THE Ml MONETARY AGGREGATE/ WHICH CONSISTS OF - 8 - CURRENCY AND ALL CHECKABLE DEPOSITS, THIS GROWTH HAS PUT HI WELL ABOVE THE ORIGINAL 4 TO 7 PERCENT Ml TARGET FOR 1985 ADOPTED LAST YEAR, AND EVEN SIGNIFICANTLY ABOVE THE NEW/ HIGHER TARGETS FOR THE SECOND HALF OF THE YEAR ADOPTED LAST Ju l y . Un d e r OF SUCH a CONCERN. ordinary c i r c u m s t a n c e s , the inflationary dangers RAPID RATE OF Ml GROWTH WOULD HAVE BEEN CAUSE FOR BUT/ AS CHAIRMAN VOLCKER EMPHASIZED RECENTLY IN HIS LETTER TO CONGRESSMAN WALTER FAUNTROY/ CHAIRMAN OF THE Ho u s e S u b c o m m i t t e e on D o m e s t i c M o n e t a r y Po l i c y / CIRCUMSTANCES HAVE NOT BEEN ORDINARY. M l 'S RAPID GROWTH HAS BEEN ACCOMPANIED BY A SHARP DECLINE IN ITS VELOCITY — THE RATE AT WHICH IT CIRCULATES IN THE ECONOMY. This decline is r e m i n i s c e n t of the decline in v e l o c i t y IN 1982-83 WHICH/ IN RETROSPECT/ APPEARS TO HAVE REFLECTED GREATER BUSINESS AND HOUSEHOLD WILLINGNESS TO KEEP LARGER AMOUNTS OF CURRENCY AND CHECKABLE DEPOSITS ON HAND AS INTEREST RATES DECLINED. ALTHOUGH THE PARALLELS ARE NOT PERFECT, PART OF THE CURRENT DECLINE IN VELOCITY AND ACCOMPANYING SURGE IN ii APPEARS TO BE THE SAME PHENOMENON vl -- A RESPONSE TO THE GENERAL DECLINE IN INTEREST RATES THAT HAS OCCURRED SINCE MID-1984. ADDITIONALLY, THERE HAS BEEN THE EFFECT OF DEREGULATION OF INTEREST RATES PAYABLE ON CHECKABLE DEPOSITS. 9 - Be c a u s e as the of concern BY THE the to e c o n o m y 's uncertainty prevent the - about M l 's expansion b e h a v i o r , as w e l l from being derailed ADJUSTMENTS TO THE BUDGET AND TRADE IMBALANCES, CHAIRMAN VOLCKER INDICATED IN HIS LETTER TO Co n g r e s s m a n F a u n t r o y or FOMC, decided that that Ml F e d e r a l O p e n M a r k e t Co m m i t t e e , the growth above PERCENT TARGETS WOULD BE ACCEPTABLE, the 3 revised to 8 MEANWHILE, THE OTHER MONETARY AND CREDIT AGGREGATES USED AS TARGETS BY THE FED ARE GENERALLY WITHIN THE GROWTH RANGES SET FOR THE YEAR, Un d e r these c i r c u m s t a n c e s , in t h e setting of monetary POLICY, PARTICULAR ATTENTION IS BEING GIVEN TO ON“GOING DEVELOPMENTS IN THE ECONOMY, IN DOMESTIC CREDIT MARKETS, AND IN FOREIGN EXCHANGE MARKETS. Ec o n o m i c O u t l o o k Let me conclude by saying a few w or ds about the ECONOMIC OUTLOOK FOR THE U.S. ECONOMY, AND FOR CALIFORNIA. OUR STAFF AT THE BANK IS PREDICTING A 3.3 PERCENT EXPANSION IN THE NATIONAL ECONOMY, AS MEASURED BY THE GROWTH IN REAL GNP This BETWEEN THIS QUARTER AND THE FOURTH QUARTER OF is somewhat higher than the 2 percent gain 1986. expected THIS YEAR, WHICH REPRESENTED A SLUGGISH FIRST HALF BUT A STRONGER SECOND HALF. W e expect that consumer spending WILL CONTINUE TO GROW THROUGH 1986 BUT SIGNIFICANTLY BELOW THE RELATIVELY ROBUST RATES FOR THE FIRST THREE QUARTERS OF THIS YEAR, AS - 10 - HOUSEHOLDS IN 1986 BUILD UP THEIR DEPLETED SAVINGS. A t THE SAME TIME, A RELATIVELY LOW OPERATING RATE FOR FACTORIES AND WIDESPREAD VACANCIES IN OFFICE SPACE SUGGEST THAT BUSINESS'S EXPENDITURES ON EQUIPMENT AND CONSTRUCTION WILL BE SLUGGISH. A RECENT McGRAW HlLL SURVEY OF BUSINESS CAPITAL SPENDING INTENTIONS SHOWED SLIGHTLY LOWER DOLLAR OUTLAYS NEXT YEAR COMPARED TO THIS. EVEN AFTER TAKING INTO ACCOUNT THAT SURVEY'S CHRONIC TENDENCY TO BE PESSISMI ST IC, AND MAKING SOME REASONABLE ESTIMATES OF PRICE INCREASES FOR CAPITAL GOODS, IT STILL APPEARS THAT WE COULD END UP WITH BUSINESS CAPITAL SPENDING (iN INFLATION-ADJUSTED TERMS) GROWING MORE SLOWLY NEXT YEAR THAN THIS. Ho w e v e r , by the second half of next y e a r , the effects OF THIS year's DEPRECIATION OF THE DOLLAR WILL BEGIN TO GIVE A BOOST TO THE ECONOMY AS OUR EXPORTS BECOME MORE COMPETITIVE ABROAD AND DOMESTIC PRODUCERS ARE BETTER ABLE TO COMPETE WITH IMPORTS. OUR STAFF ESTIMATES THAT THE DECLINE TO DATE IN THE DOLLAR'S VALUE WOULD BE SUFFICIENT TO BOOST GNP GROWTH IN THE SECOND HALF OF 1986 RELATIVE TO ITS A t THE SAME SLUGGISH PACE IN THE FIRST HALF OF THE YEAR. TIME, HOWEVER, THE RESULTING RISE IN THE PRICE OF IMPORTS FROM A DEPRECIATING DOLLAR IS EXPECTED TO RESULT IN A SLIGHT UPTICK IN INFLATION FROM THIS YEAR'S EXPECTED RISE OF ABOUT 3*2 percent. Finally, it a p p e a r s that there will be little CHANGE IN THE OVERALL UNEMPLOYMENT RATE IN THE ECONOMY, RECENTLY AT A RATE OF A LITTLE OVER 7 PERCENT. - 11 - Ca l i f o r n i a S c e n e Finally, let me now turn to a brief discussion of the In recent months some sectors of the California economy. California economy have continued to do very well, despite a SLOWDOWN IN ECONOMIC ACTIVITY STATEWIDE. TRADE AND SERVICES, WHICH TOGETHER MAKE UP MORE THAT 50 PERCENT OF C a l i f o r n i a 's to be n o n -a g r i c u l t u r a l consistently is a l s o true for strong sectors nation. the b a s e , have employment of s t a t e 's e c o n o m y , a s the Ae r o s p a c e proven activity, buoyed by DEFENSE SPENDING, HAS PROVIDED AN ADDITIONAL SOURCE OF strength. Ca l i f o r n i a has increased its share of defense CONTRACTS TO ABOUT 25 PERCENT, ARGUING FOR A BRIGHT FUTURE FOR the aerospace sector as defense contracts continue to GROW. Co n s t r u c t i o n 16 percent activity increase in t h e also has average remained annual STARTS IN THE FIRST NINE MONTHS OF 1985. s t r o n g , with rate of a housing HOWEVER, CONTINUED HISTORICALLY HIGH INTEREST RATES, A DISINFLATIONARY ENVIRONMENT, AND SOME INDICATIONS OF OVERBUILDING IN OFFICE SPACE, CLOUD THE FUTURE. T he AGRICULTURAL SECTOR CONTINUES TO SUFFER FROM THE PROBLEMS OF INCREASED WORLD PRODUCTION, A HIGH DOLLAR, AND TRADE BARRIERS ABROAD, AND THESE PROBLEMS ARE LIKELY TO persist. less in Al t h o u g h Ca l i f o r n i a farmland than prices elsewhere generally in t h e have declined n a t i o n , land used - 12 - FOR SUCH CROPS AS ALMONDS AND WINE GRAPES HAS LOST AS MUCH AS 50 TO 80 PERCENT OF ITS VALUE IN THE PAST TWO OR THREE YEARS. Th e SEMICONDUCTOR INDUSTRY HAS SUFFERED FROM SLOWER GROWTH IN MICROCOMPUTER SALES AND A SEVERE INVENTORY OVERHANG FROM THE RAPID GROWTH PERIOD OF Ad d i t i o n a l l y , there is now an 1983 investigation AND 1984. underway of ALLEGED DUMPING IN OUR MARKETS BY CERTAIN JAPANESE PRODUCERS OF SEMI-CONDUCTORS. OVER THE LONGER-RUN, SEMICONDUCTOR MARKETS WILL EXPAND, PROVIDED TECHNOLOGICAL INNOVATION CONTINUES. BUT CURRENT DIFFICULTIES LEAVE NEARER-TERM PROSPECTS LESS CERTAIN. Th e outlook for the Lo s An g e l e s -Or a n g e Co u n t y area is BRIGHTER THAN FOR THE STATE AS A WHOLE BECAUSE STRONG SECTORS SUCH AS DEFENSE FIGURE MORE PROMINENTLY LOCALLY, WHILE JUST THE OPPOSITE IS TRUE FOR A WEAK SECTOR SUCH AS AGRICULTURE. provide TH IS MIX OF STRONG AND STABLE SECTORS SHOULD So u t h e r n Ca l i f o r n i a with c o n t i n u e d , if moderate, ECONOMIC GROWTH. Co n c l u d i n g R e m a r k s IN SUMMARY, WE SEE THE ECONOMIC EXPANSION CONTINUING AT A MODERATE PACE THROUGH 1986. SOME UPTICK IN INFLATION ALSO IS LIKELY, ALTHOUGH THE RATE STILL WILL BE SUBSTANTIALLY BELOW THE DOUBLE DIGIT RATES THAT BATTERED THE ECONOMY AS RECENTLY AS FOUR YEARS AGO. - 13 Ad m i t t e d l y the uneven tone as between different sectors OF THE ECONOMY IS LIKELY TO CONTINUE/ UNLESS OR UNTIL THE MASSIVE IMBALANCE IN THE FEDERAL DEFICIT IS REDUCED/ WITH A CONSEQUENT FURTHER LOWERING OF BOTH INTEREST RATES AND THE INTERNATIONAL VALUE OF THE DOLLAR, SOLUTIONS TO THESE PROBLEMS ARE BEYOND THE ABILITY OF MONETARY POLICY ALONE TO REMEDY, NEVERTHELESS/ I BELIEVE THAT THE FEDERAL RESERVE CAN TAKE CONSIDERABLE SATISFACTION FROM ITS KEY ROLE IN CURBING INFLATION SINCE 1980/ WHILE AT THE SAME TIME SEEING THE ECONOMY AS A WHOLE ENJOY ONE OF THE STRONGER EXPANSIONS OF THE POST-WAR PERIOD,
