October 19, 1987

The President has watched today with concern the continued drop in the stock market. He directed members of his administration to consult with the Chairmen of the Federal Reserve, the Securities and Exchange Commission, the New York Stock Exchange, the Chicago Commodities and Futures Exchanges, and leaders of the investment community.

Those consultations confirm our view that the underlying economy remains sound. We are in the longest peacetime expansion in history. Employment is at the highest level ever. Manufacturing output is up. The trade deficit, when adjusted for changes in currencies, is steadily improving. And as the Chairman of the Federal Reserve has recently stated, there is no evidence of a resurgence of inflation in the United States. The President is keeping close watch on the markets here and in other countries. We will continue to closely monitor these developments.