IF anyone thought the United States economic recovery was running out of steam, he might well take a hard look at the latest economic statistics out of Washington. The recovery is still on course - and in a more heady fashion than many experts had anticipated. That is good news indeed. To ensure that the recovery proves long-lasting and durable, Congress and the Reagan administration must redouble their efforts to reduce massive federal budget deficits.
Late last week the Commerce Department released data showing the economy had expanded more in the fourth quarter of 1983 than had been originally estimated. The United States economy grew at a 4.9 percent annual rate in the quarter, compared with an earlier estimate of 4.5 percent.
And the vigorous growth appears to be continuing right into 1984.
New housing construction last month reached a five-year high. Factory-use rates reached 79.9 percent, a 28 month high. Consumer spending, which has been the driving force in the current recovery, rose 1.2 percent in January. Meanwhile, personal income went up 1.1 percent.
For the moment, the US business community - considered as a whole - is a net supplier of funds to money markets. In other words, because of strong sales, many companies are still flush with cash. That eases pressures on many businesses to have to go out into credit markets to borrow, and thus compete with the federal government, which must borrow to finance its large deficits. But economists point out that the day of reckoning will yet come, later this year or in 1985, when profit growth will slacken somewhat and more companies will have to enter credit markets - thus putting upward pressures on interest rates.
Thus, it is crucial that the White House and lawmakers reach agreement as soon as possible on a tax-increase and budget-cutting plan to reduce the deficits, which, without any action, would run in the $200 billion range for the next several years.
Lawmakers are reportedly working on a package to raise revenues. But as noted recently by Illinois Congressman Dan Rostenkowski, who heads up the House Ways and Means Committee, reaching an accord on budget cuts remains a more formidable challenge. To reach such an agreement, the White House would have to be more willing than it has been to reduce the rate of increase in defense spending.
Reaching such a mutual accord is absolutely vital to ensure that the current recovery proves durable.