Business Notes the Economy

Harry Truman used to complain that he needed a "one-armed economist" because his advisers were always starting briefings with "On the one hand . . . but on the other hand . . ." Last week economists had to use both hands as they confronted a puzzling mixture of good and bad news.

On the bright side, the U.S. trade deficit fell from a record $16.1 billion in July to $13.3 billion. A sustained drop in the deficit would be a tonic for domestic economic activity, which is still showing signs of weakness. The Government reported last week that new-home sales dipped 13.4% in August and the unemployment rate jumped from 6.8% to 7% in September as manufacturers eliminated 38,000 jobs. Concludes Economist Charles Schultze, a senior fellow at Washington's Brookings Institution: "The economy just hasn't shaken off its lethargy."