Where the Boom Is Brightest

AS bright as the holiday lights decorating crowded stores, the business indicators make it clearer every week that the economy is now in a boom. Auto demand is so high that some plants will remain open during part of Christmas week, even though the companies will have to pay triple-time wages. American industry in October produced 9% more than a year ago. Corporate profits after taxes for the third quarter rose 18%. Housing starts are running at a record 2,400,000.

What counts for most executives and wage earners, though, is not the national but the local scene. People in every state have had a substantial rise in personal income in recent years (see chart). But this year there is a remarkable chiaroscuro of regional lights and shadows in the U.S. economic picture. A guide to the variations, from brightest to darkest:

THE SOUTH is in economic overdrive, powered by new residents and industries. South Carolina textile mills have added 3,100 workers this year and increased the average work week to 41.8 hours. Mississippi, though still the only state with per capita income below $3,000, is increasing total personal income by more than 11% per year. The tourist and construction surge in Florida, sparked largely by the Walt Disney World amusement park, has sent an economist at the Federal Reserve Bank of Atlanta to the Disney movie Mary Poppins to find a suitable description: supercalifragilisticexpialidocious.

THE SOUTHWEST is faring better than the rest of the nation. Dallas is rolling in construction money for a new 55-story skyscraper and the $750 million Dallas-Fort Worth airport scheduled for completion next summer or early fall. Houston has a jobless rate of only 3.1%, v. 5.5% nationally. The city is getting a further boost from the continuing trend among oil companies to relocate their headquarters there. Pennzoil United, despite its name, plans to put up two 34-story buildings in the city to house its operating center. Retail sales are brisk. Typically, one big Houston store by last week had sold more color TV sets than in the entire 1971 Christmas season.

THE MIDWEST is picking up in line with, or slightly better than, the national trend. Unemployment in the Chicago area is down to 3.5%. Along the lakefront ten skyscrapers are being built or planned. In the Kansas City area the dollar volume of residential construction during the first three-quarters of this year ran 43% higher than in the equivalent period of 1971. In Des Moines, Charles Duchen, president of the Younkers Bros. department-store group, basks in a 10% third-quarter increase in sales and says: "The outlook is good. The people are in a relaxed mood because Viet Nam is winding down, the election is over, and there is less uncertainty about who's running the country."

THE FAR WEST is recovering from the aerospace slump but has a long distance to travel in order to come up to the national level. Unemployment in the Seattle area has fallen from a peak of 15% in May 1971 to 8.8%. Boeing has added 7,000 workers to its local payroll in the past year, and more jobs are opening up in the lumber, machinery and electronics industries. The California jobless rate has declined from 7% a year ago to just under 6% now--still well above the national average. Personal income, however, is rising a bit more in California than nationally.

THE NEW YORK CITY AREA is Stuck in neutral. In the city, department-store sales during the first eight months of this year were up an unimpressive 3% from 1971, and unemployment in the metropolitan area has only recently stabilized at around 6%. Joblessness in New Jersey is 7.3%. Wage-price inflation has been much more rapid in the New York area than elsewhere, making its industries increasingly less competitive with those in other regions.

NEW ENGLAND is barely out of the recession. The area's industrial production is still below the 1967 level, and the unemployment rate is around 7%. During the past year, construction of commercial, industrial and public buildings in Massachusetts sank to a five-year low. The region's old factories are being hurt by competition from newer plants in the U.S. South, Europe and Japan.

These regional variations pose a problem for economic planners of the second Nixon Administration. They will have to judge when the national upturn becomes overexuberant and should be dampened to head off a new inflation. But when that point is reached nationally, it may well have been far overshot in Florida, Houston and perhaps Chicago, while New England and New York may still be below economic par.

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