First, housing starts are in trouble. There has been no pick up in starts, even though the tax rebate bill provided incentive with a tax credit. It has served mainly to liquidate existing homes, however, the housing industry is weak. Auto sales, also, are encouraging, but yet nothing definite. The rebate on automobiles ceased the last day of March and we have seen a sharp decline in auto sales during the first ten days of April, although it now appears that they are beginning to come back.
Retail sales continue to be quite good.
The capital goods area is a concern and the thought of the economic advisers is that capital goods would weaken this year, but it has not as yet, There appears to be a backlog of appropriations and orders that are very high and it looks very good. The expectation is that unemployment will remain quite high for the balance of 1975. Of course, all of the above assumes holding the line on the Federal deficit. Mr. Greenspan High deficit means double digit inflation and that is a serious political problem. The President called on Jim Lynn to discuss the budget.