For seven years, as wages, prices and employment rose, the U.S. had poured forth goods and foodstuffs like a great machine being pushed to its ultimate, agonizing peak of performance. Last week the nation heard the wheels slow down a few revolutions. Though they had cursed inflation to a man, U.S. citizens had grown so used to the howl of high-speed gears that any change in pitch sounded ominously like warnings of a slowdown.

Many thought they heard a faint warning when the Bureau of the Census announced that employment had fallen off by 700,000 jobs since December, and that...

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