INFLATION: Perils of a Breakneck Boom

A LONG string of danger signals began to blink ever more insistently last week. The message: like a runaway freight train, the economy is hurtling forward at an inflationary speed that could send it off the rails into recession next year.

"The warnings came in a series of statistical reports. During the first quarter, the Commerce Department disclosed, U.S. output rose a stunning 14.3%, tying the first quarter of 1971 —when the economy was recovering from a General Motors strike—for the largest advance since the Korean War. Ballooning prices pushed the gross national product up about 6%, but the rise in...

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