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The United States is making a transition from the postwar boom to a period when the demand for goods will depend largely on current needs, Sumner H. Slichter, Lamont University Professor, told a Chicago audience yesterday.
Slichter, speaking before the Dairy Industries Supply Association, emphasized that the trend to a "self-sustaining economy" is still in progress. Before it is over, he said, production will drop and unemployment will rise. But the dip in unemployment and production will not come until late 1950, and will not be steep, he predicted.
$2,800,000,000 worth of insurance dividends to veterans will sustain the demand for goods for some months, Slichter said. The present large volume of construction and heavy demand for automobiles will also bolster production and employment for a time.
Investment Rate Will Drop
One reason for a probable decline in employment and production during the transition, Slichter said, is a current above normal rate of investment that is likely to drop.
Another reason for the dip, said Slichter, is that prices of farm products are "substantially" above the level where they are likely to remain.
Slichter does not expect the decline to be sharp because, among other things, the economy is better equipped than ever before to withstand contraction.
Slichter also expects the demand for housing and autos to continue long enough to brake the decline.
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