Generalizations of the current economic situation in the Seventh District have never been so difficult since the Red Book was launched almost four years ago. The growing ramifications of the energy crisis, continued rapid price inflation in the face of cutbacks in output and employment, widespread shortages, and dissatisfaction with government at all levels have created an unprecedented atmosphere of uncertainty among consumers and businessmen. This mood has been deepened by the independent truckers' strike which began at the end of January and is not yet fully resolved. Communities dependent on the manufacture of full-sized cars and recreational vehicles are economic disaster areas. In contrast, equipment producers generally are experiencing an unparalleled boom, with many firms unable to meet production schedules. While shortages of materials and components seem worse than ever, there are reports of firms doing precautionary advance buying (hoarding) of fuel and supplies of other scarce materials. Most businessmen, apparently, would favor the complete abandonment of price and wage controls.

Although the independent truckers' strike may be ending, the stoppages could be resumed at any time. Consumers and businessmen have an added incentive to add to inventories of required supplies. The strikes have curtailed output and caused layoffs principally in steel, motor vehicles, and meat and poultry processing. Many operations have been conducted "off-the-tailgate" of trucks even before the strike because of short supplies. Lower speed limits and more frequent stops for fuel already had hampered production and had increased inventories in transit.

Since late January, the Chicago area has witnessed long lines of cars at filling stations. Many stations have been closed and others have sharply reduced their hours of operation. Most smaller centers of the District, however, are reported to have plenty of gasoline. (One reason suggested for the disparity is that Chicago area motorists are taking fewer trips out of town.) Gas shortages have substantially reduced receipts at many restaurants and other establishments dependent on auto traffic. Insurance salesmen, and other businessmen dependent on mobility, also have been hurt. Perhaps those affected by fuel shortages can take comfort in the recent words of the District's best know economist: "I don't believe the energy problem changes the economic outlook very much."

In contrast to the gasoline and diesel fuel situations, heating oil problems seem to have faded away—even in Michigan where the problem had appeared most serious. Reductions in output of autos doubtless have released fuel for other uses.

Some major District gas utilities have been telling interruptible customers to plan on switching to electricity or to other fuels. They see no possibility of substantially increasing gas supplies in the next several years. Expansion plans of electric utilities are being expanded in all states, partly because of shortages of natural gas.

Full-sized cars and recreational vehicles continue to be the main casualties of the energy shortages. The largest producer of motor homes has said that the company is virtually "out of business" for the present, although a revival in demand is expected, or hoped for, later in the year. In Flint (home base of Chevrolet and Buick), the local employment service estimates area unemployment at 15 percent in February, compared to 5 percent last year, and as bad as in 1958. A producer of frames for full-sized cars reports output off 60 percent. Layoffs at this firm have affected men with 25 years' seniority.

The steel industry continues to operate at capacity, but is afflicted by inadequate truck and rail transport and shortages, especially of fuel and scrap. Scrap prices have hit a record $120 per ton in the Chicago area recently, more than double the level of a year ago.

Producers of railroad equipment are booked through 1974 and expect to do well next year. Most producers of machine tools, farm equipment, and construction equipment are in the same situation. The market for trucks also continues very strong except for lighter "consumer-type" vehicles. Many producers of capital goods tell of pieces of equipment almost completed but not ready for shipment because of the lack of one or more parts—wheels, axles, castings, and electrical and mechanical components. One reason for strength in capital goods is that in many cases new equipment can do more work per unit of fuel consumed.

The outlook for residential construction overall still appears dismal. Credit has become more available, but customers are said to be reluctant to make deals until present uncertainties are resolved. The mobile home industry has been affected as seriously as on-site housing in many sectors. Some mobile home plants have been closed or sold.