Suddenly a Case of Jitters

A.L signs continue to point to a banner year for U.S. business in 1973 --but quite suddenly politicians, investors and economists both at home and abroad have developed a case of jitters about the American economy. Domestically, there is fear of a new surge of inflation. Otto Eckstein, a member of TIME's Board of Economists, predicts that consumer prices, pushed up largely by food costs, may rise at an annual rate of 6% this quarter. Certainly fat increases in retail food costs are in store for the months ahead. Meanwhile, bankers and investors worry about a credit squeeze: Federal Reserve Chairman Arthur Burns disclosed last week that the growth of U.S. money supply had ground to a complete stop in January. Interest rates on bank loans to businesses are being kept from rising still higher only by strenuous Government jawboning. Internationally, the dollar took a severe battering last week, in yet another world monetary crisis. It is likely that other major currencies will rise in value over the next several months, leading to a de facto devaluation of the dollar. Reacting to all this turbulence, the stock market, that supersensitive barometer of economic psychology, continued to drop. The Dow Jones industrial average has fallen 72 points in a month from its all-time high of 1052. For all that, the problems may well turn out to be transitory, and 1973 still "can be a great year," as President Nixon has said--but the new turmoil indicates that it will not be very tranquil.

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