www.time.com/time/magazine/article/0,9171,908956,00.html
RSS Related Articles Not for many years has a Christmas season begun with so many tidings of spreading discomfort and lack of joy about the US economy. Already racked by a devastating double-digit inflation, the nation is now also plunging deeper into a recession that seems sure to be the longest and could be the most severe since World War II. Consumers who a few weeks ago worried mostly about rising prices now fear for their jobs and incomes as well. For many Americans, the Yuletide will be a time of less elaborate meals, infrequent parties, fewer and cheaper presents. Ford and Chrysler announced massive new layoffs for this month. Automakers now plan to close at least 14 assembly plants and put as many as 230,000 production workers, clerks, accountants and executives out of work before Christmas, and about 20% of General Motors' 500,000 US employees will be idle in January. But the decline is no longer confined to autos and home building, which is down 33% from early 1973, as it has been for most of this year. In classic fashion, the recession* has begun to work its way through the entire economy. Although demand for home freezers is still high, with housewives stocking up on food to beat rising prices, sales of other major appliances--TV sets, washing machines, dryers, vacuum cleaners--are turning sick, and layoffs are spreading in the plants that make them. General Electric last week announced the sixth in a series of production cutbacks that have slashed the 23,000-man payroll at its sprawling Appliance Park in Louisville by about 50% since August. For retailers, Christmas 1974 may be black rather than just blue. Department stores and retail chains normally count on ringing up about 25% of their annual sales in the weeks (four this year) between Thanksgiving and Christmas, but they may be unable to do so this year. While retail sales rose 7% in dollars over the past year, that was equivalent to a drop in real terms once the impact of inflation was discounted. Several big chains, among them FW Woolworth and WT Grant, have suffered steep declines in third-quarter profits; at the biggest of them all, Sears, Roebuck, earnings fell 29%. Korvettes discount department stores in Manhattan are offering scrip worth $ 110 in merchandise to customers who bring in $100 in Christmas Club checks. Chicago's Montgomery Ward chain, which has an unusually high inventory of unsold goods, has decided to bring back last year's energy saving and cut down on costly Christmas lighting displays. The grim mood is evident in the talk of business and Government leaders.
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