Scorecard on the Freeze

As a result of President Nixon's wage-price freeze, 10% surtax on imports and suspension of the dollar's convertibility into gold, both the domestic economy and the world monetary system remain dominated by an uncertain blend of international politicking abroad and hopeful but guarded confidence at home. Some of the week's developments: THE ECONOMY. With the first rush of excitement subsiding, businessmen and consumers began looking for signs of the impact that Nixon's new program was having on the economy. The New York Stock Exchange's Dow Jones industrial average, which had soared to a high of 908.37 the previous week, started the week lower as Wall Street investors consolidated their gains and began to digest the possibility of an excess-profits tax; but it ended strongly at 912.75. The wholesale cost of food, industrial raw materials and manufactured goods rose .3% during the month -a seasonally adjusted rate of 8.4%, the fastest rate of increase in six months. But the increase is largely calculated from price surveys made before the freeze, and hence does not show what effect-if any-the freeze has had. Unemployment in August rose to 6.1%, bolstering the Administration's argument that Nixon acted none too soon. WAGES. Taking their cue from top labor leaders, few unions decided to fight the freeze. But a group of unions representing 650,000 postal workers went to court seeking a ruling that Nixon's ban on pay raises already agreed to in collective bargaining is unconstitutional. To set an example for private employers, Nixon announced that he would ask Congress to delay pay raises for civilian federal employees and the military for six months beginning Jan. 1, 1972. THE DOLLAR. In the world's major money markets, the value of the dollar remained generally unstable. Throughout the Common Market countries and in Japan, exchange rates continued to be set as much by the actions of foreign bankers anxious to guard their own currencies as by any overall success in Nixon's efforts to devalue the dollar. In Japan, the dollar lost 6.4% of its value during its first full week of floating against the yen. TRADE. The Treasury Department ruled that more than $1.5 billion of imported goods in transit to U.S. ports or in bonded warehouses on Aug. 15 were exempt from the 10% import surtax. Secretary of Defense Melvin Laird announced that the U.S. would sell 175 F-4 Phantom jets to West Germany for $1 billion. Laird said that the decline of the value of the dollar in relation to the Deutsche Mark, which in effect cuts the price of the fighters for the West Germans, helped make the sale possible. GUIDELINES. Arthur Okun, chairman of the CEA under President Johnson and a member of TIME'S Board of Economists, suggested limiting wage hikes to 5% and price increases to 2% following the freeze. The Cost of Living Council ruled that prices that fluctuate seasonally, like those of tourist hotel rooms and of automobiles during year-end sales, may change during the freeze-but price hikes may not exceed the seasonal increases during the same period of 1970.

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