THE WHITE HOUSE

Office of the Press Secretary

                      WHITE HOUSE RELEASES 
               THE ECONOMIC REPORT OF THE PRESIDENT

Today the Clinton Administration releases the Economic Report of the President.

According to the Economic Report, prospects for sustained economic expansion look far brighter now than they did a year ago. The Administration forecasts that the economy will grow at 3 percent in 1994 and will remain on track to create 8 million jobs over 4 years. Growth of real gross domestic product increased steadily over the course of 1993, and the economic expansion has continued into 1994. Consumer spending should remain healthy because of continued gains in employment and output, and investment spending should remain strong because of low long-term interest rates and increasing levels of demand. The recent strength in residential construction is also likely to continue.

The Economic Report argues that the Administration's deficit reduction plan has been a major factor in the dramatic decline in long-term interest rates since the Presidential election of 1992. Lower interest rates, in turn, have sparked an investment-driven expansion that has created more private sector jobs during the last year than were created in the previous four years combined. The fact that investment is leading the recovery is good news for living standards, because investment is the key to productivity growth and hence to growth in real incomes for all Americans.

The Economic Report also lays out the Administration's economic rationale for investing in people, technology, defense conversion, and the environment, and describes the Administration's initiatives to open foreign markets, to improve the efficiency of government, and to reform the Nation's health care system.

The Economic Report is divided into the following six chapters.

Chapter One describes the basic building blocks of the Administration's short-term and long-term economic strategy.

Chapter Two examines the behavior of the U. S. economy during the last year and presents the Administration's forecast for the 1994-99 period.

Chapter Three analyzes trends and recent developments in the U.S. labor market and describes the Administration's policies to create high-wage employment opportunities for all Americans.

Chapter Four analyzes the major shortcomings of our current health care system--including the lack of universal coverage and health security for all Americans and the problem of escalating costs--and describes the Administration's health care reform proposal.

Chapter Five reviews the Administration's major microeconomic initiatives to promote efficiency and productivity through regulatory reform, technology promotion, and sound environmental policy.

Chapter Six discusses the role of the United States in the world economy and describes the Administration's trade policy accomplishments, including the passage of NAFTA and the completion of the Uruguay Round.

             10 Solid Signs of Economic Renewal from 
               the Economic Report of the President

• There was a noticeable acceleration in job creation in 1993. The economy generated 162,000 new jobs per month--twice 1992's 81,000 jobs-per-month pace.
• Over the full 4 years of the Bush Presidency, the economy generated 0.976 million new private nonfarm jobs. In President Clinton's first 12 months in office, the economy has created 1.644 million private nonfarm jobs.
• The unemployment rate has fallen sharply. From December 1992 to December 1993 it declined by a sharp 0.9 percentage point (from 7.3 percent to 6.4 percent). This was the largest December-to-December decline in the unemployment rate since 1987.
• Interest rates have tumbled since the Administration took the lead and developed a credible deficit reduction plan. The 30-year bond yield is down over 125 basis points since election day.
• Business investment is now surging. Over 1993, spending for producers' durable equipment has expanded at the fastest pace since 1972. Lower interest rates have probably had a positive impact.
• Housing has now clearly begun to accelerate. By December housing starts had reached a 1.54 million annual rate--up 25 percent from their July rate.
• Real spending on household durable goods (furniture, major appliances, etc.) was more than 11 percent higher than the year-earlier level in the fourth quarter of 1993. This was one of the biggest annual increases in a decade.
• Inflation turned in excellent performance in 1993. The consumer price index (CPI) increased just 2.7 percent during 1993--the smallest increase since 1986. The "core" CPI (excluding food and energy) increased 3.2 percent--the smallest increase since 1972.
• The "core" producer price index (PPI) increased just 0.4 percent during 1993--the smallest increase since the government started reporting this series in 1974.
• The factory workweek reached its highest level in the post- war period and overtime was the highest it has been since government began collecting overtime data in the 1950s, indicating that future increases in manufacturing output will be coupled with gains in employment.