The latest crop of government statistics confirms that 1993 was the economy’s best year since 1988. Industrial production was up a strong 4.2 percent. Retail sales soared 6.2 percent. Business inventories as a percentage of sales dropped to the lowest level in 11 years–and that abundance of empty shelf space in stores and warehouses will keep factories humming. Best of all, the prices industry pays for its components and raw materials rose a scant .2 percent during 1993, a sign that inflation is well under control.
That positive price report may be just what it takes to keep the Federal Reserve from putting an end to the party. Since early January, several Fed officials have gone out of their way to say publicly that inflation doesn’t seem to be a problem–an indication that the Fed has no immediate plans to push interest rates up. “Policymakers face the best of all worlds, healthy growth without price pressures,” says NationsBank economist Mickey Levy. Clinton’s worry now is whether the good news will keep on rolling in: the 1996 election is 34 long months away.
