Economy

Kennedy ended a period of tight fiscal policies, loosening monetary policy to keep interest rates down and encourage growth of the economy. He presided over the first government budget to top the $100 billion mark, in 1962, and his first budget in 1961 led to the country's first non-war, non-recession deficit. The economy, which had been through two recessions in three years and was in one when Kennedy took office, accelerated notably during his presidency. Despite low inflation and interest rates, GDP had grown by an average of only 2.2% during the Eisenhower presidency (scarcely more than population growth at the time), and had declined by 1% during Eisenhower's last twelve months in office.
The economy turned around and prospered during the Kennedy administration. GDP expanded by an average of 5.5% from early 1961 to late 1963, while inflation remained steady at around 1% and unemployment eased; industrial production rose by 15% and motor vehicle sales rose by 40%. This rate of growth in GDP and industry continued until around 1966, and has yet to be repeated for such a sustained period of time.

The major steel companies announced in April 1962 a 3.5% price increase (the first in 3 years) within a day of each other. This came just days after the companies had reached a settlement with the steelworkers' union, providing in chief a wage increase of 2.5%. The administration was furious, with Kennedy saying, "Why did they do this? Do they think they can get away with this? God, I hate the bastards."Amid concern about the inflationary effects of the price increase, the president took personal charge of a campaign against the industry, assigning to each cabinet member a statement regarding the effects of the price increase on their area. Robert Kennedy, echoing his brother's sentiments, said "We're going for broke ... their expense accounts, where they've been a|nd what they've been doing ... the FBI is to interview them all ... we can't lose this." Robert took the position that the steel executives had illegally colluded to fix prices. The administration's actions influenced U.S. Steel to rescind the price increase. The Wall Street Journal wrote that the administration had acted "by naked power, by threats, by agents of the state security police."Yale law professor Charles Reich opined in The New Republic that the administration had violated civil liberties by calling a grand jury to indict U.S. Steel for collusion so quickly. A New York Times editorial praised Kennedy's actions and said that the steel industry's price increase "imperils the economic welfare of the country by inviting a tidal wave of inflation." Nevertheless, the administration's Bureau of Budget reported the price increase would have resulted in a net gain for GDP as well as a net budget surplus. The stock market, which had steadily declined since Kennedy's election, dropped 10% shortly after the administration's action on the steel industry.
Kennedy had little knowledge of the agricultural sector of the economy, and farmers were not on his list of priorities, at least in his 1960 campaign. After giving a speech to a farming community, he rhetorically asked an aide, "Did you understand any of what I just said in there? I sure didn't."