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Bureau of Mines / Minerals yearbook: Metals, minerals, and fuels 1972
Year 1972, Volume 1 (1972)

Sullivan, Daniel E.; Baker, Jeannette L.; Theofilos, Nicholas G.
Review of the mineral industries,   pp. 1-59 ff. PDF (6.2 MB)

Page 1

  IReview of the Mineral Industries By Daniel E. Sullivan,1 Jeannette I.
Baker,2 and Nicholas G. Theolilos3 
 The U.S. economy was expansive in 1972. Output, income, and employment all
increased substantially. The unemployment rate declined only slightly. Inflation
moderated but not for food commodities. Monetary policy was loose at the
beginning of the year but tightened somewhat in the closing months. Fiscal
policy was also expansive. During 1972, Phase II controls on prices and wages
were in effect. This allowed fiscal and monetary policy to be more flexible.
 Output as measured by the gross national product (GNP) increased 9.75% in
1972. Real GNP grew at a rate of 6.5%, the largest full-year advance since
1966; and the implicit price deflator rose 3.8%, the smallest full-year advance
since 1966. All major sectors except for net exports contributed to the overall
increase. Significant increases occurred in gross private domestic investment,
Federal purchases in the first half of the year, and consumer spending. The
Federal Reserve Board (FRB) Index of Industrial Production increased more
than 7%. 
 Employment in 1972 continued the strong growth trend that characterized
the second half of 1971. However, the labor force also increased substantially
so unemployment declined only slightly from 5.9% in 1971 to 5.6% in 1972.
Unemployment was close to the 1971 level in the first 5 months of the year,
but by the fourth quarter it had declined to an average of about 5.3%. The
increase in employment was strongest in the durable goods manufacturing industries.
The increase in the labor force was greatest for adult women. 
 The rate of inflation in 1972 was less than that of 1971 for most commodities.
Agricultural prices not covered by price controls increased at an accelerated
rate during 1972. The overall consumer price index was up 3.3% for the year,
compared with 4.3% for 1971. With food prices ex 
cluded, the index increased 3.0%, Prices for nonfood commodities were up
2.3% for the year 1972, compared with 3.8% for 1971. Service prices rose
3.8% for 1972, which was less than for recent years. Wholesale prices increased
at a greater rate during 1972 than during 1971 wholly because of increases
in the prices of agi-icultural products. The industrial wholesale price index
rose about the same during 1972 as for the previous year, 3.4%. 
 Monetary policy during the year favored economic expansion. Its purpose
was to contribute to the goals of economic growth, increased employment,
less inliation, and fewer balance of payments problems. The money supply
grew at a rate of 8.2% during 1972, the second highest rate since World War
IL In 1971 the increase was 6.2%, and in 1970, it was 5.4%. Interest rates
were stable in 1972 after declining in late 1971. Mortgage interest rates
in 1972 were below those of 1971, and well below those of 1970. 
 An expansionary Federal fiscal policy resulted from rising expenditures
and from the effect of tax reductions instituted in 1971 and 1972. In 1971
there was a small full employment surplus, but in 1972 there was a stimulating
full employment deficit. 
 United States gold reserves declined slightly early in 1972 and then remained
constant until May when their value was increased by a change in the price
of gold from $32 to $38 per troy ounce. The rest of the year they remained
almost unchanged with a slight decline at the end 
of the year. - 
 Significant Federal activity in 1972 included the continuation of Phase
II of the New Economic Policy (NEP). Phase II 
 1Economist, Office of Economic Analysis— Mineral Supply. 
 2Commodity research specialist, Office of Technical Data Services—Mineral
 3Statistical assistant, Office of Economic Analysis 
—Mineral Supply. 

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