The Dow Jones Industrial average rose 33.63 points to 8,970. But after having shot up 21 percent during the first quarter, the Dow average has hovered at its present level since early April. We are pretty sure you cannot continue to accumulate inventories at such a rapid rate without a slowdown. But economic growth is still likely to be quite respectable this year. The latest numbers produced an unusual amount of uncertainty among forecasters about what might happen next.
Inventories are another matter.
Falling exports to Asia accounted for some of the inventory buildup. So did federal government purchases, which fell at a rather sharp annual rate of 9.8 percent in the first quarter as deficit spending disappeared. Not much improvement is likely soon in these areas. Not surprisingly, savings edged down. That willingness to spend might encourage companies to maintain fairly high inventory levels, although not at the first quarter's levels.