Surprise Boom May Deepen A Recession: An Inflationary Bubble Could Wreck Guidelines
v Industry in the United States is in the middle of a confusing and peculiarly isolated boom thatÛªs causing unexpected inflation headaches.</br></br>All the signs are there. Purchasing agents scrambling to lock up supplies of raw materials by ordering far in advance of when they want delivery, companies beating the bushes for hew workers and prices shooting up in competitive markets.	;</br></br>No one foresaw any of this, least of all the Carter administration economists who early last fall were putting together an anti-inflation planbased on a gradual slowing of economic growth. Now the industrial boomlet has become a major threat to CarterÛªs wage-price standards, and administration officials are uncertain how to deal with it.</br></br>Alfred Kahn, President CarterÛªs chief of the inflation fight, believes that for ÛÏsomething like the last six monthsÛ the U.S. economy has been ÛÏoverheated.Û</br></br>Citing recent large price increases not just for food and energy products, but on everything from iron and steel scrap (up 6.3 percent in February) and cement (up almost 6 percent in two months) to hides and skins (up 12.6 percent in one month), Kahn concluded, ÛÏWhat we obviously are witnessing here is evidence of an overheated economy.Û