SPATE of singularly aimless and ill-informed specu- lation about the
course of the American economy in the year 1954 has flooded the British press in the past few days. The Times leads the way to a guardedly jaundiced conclusion; the Daily Herald brings up the rear with s(mne particularly dismal warnings of a possible slump, which it accompanies, by some peculiar logic of its own, with support for demands for higher wages. Only the Manchester Guardian correspondent seems to have hit on the sensible conclusion that the Americans may know more about their own economy than anyone else. And-the Americans, who have more up- to-date information than anyone else, and a vastly superior aPParatus for, the expert scrutiny and appraisal of that information, are not unduly worried. The body of 300 economists meeting in Washington under the auspices of the American Statistical Association expects a slight decline, but nothing that could be called a slump. Perhaps that is because most of them, according to The Times's. dark comment, are thought to be Republicans. But a more likely reason for their relative confidence is that they know what they are talking about-=-or at least enough to justify British observers in giving them the benefit of the doubt.
For us there are two separate questions. First, is theie to be a serious depression in America or merely a slight decline ? precisely posed in two stages. Stage one—if there is a fall in American home demand for goods, will suppliers decide to reduce their stocks as well, thus intensifying the immediate depressing effect on production and imports ? Stage two— to what extent will a fall in demand affect imports into the. United States from the Sterling Area ? Shall we have, to take a more than proportionate share of the strain ? We shall not know until we have, later in January, some more up-to-date American trade statistics. But in the meantime we do know that the recent weakening of prices in America has not been serious for the commodities, such as rubber, wool and cocoa, on which much of our dollar income depends. So far, the Americans are not alarmed, and there is no particular reason why we should be.
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