Evening star., 1949-08-04
Brief Breathing Spell
In Down Trend Seen
By Top Economists
By the Associotsd Press

By the Associated Press
Signs built up today of a
breathing spell-but probably not
definite halt-in business down.
turn that has run through 1949
so far.
A consensus produced by an Of
fetal group of top-flight econ
omists working as team boiled
down-with some Ifs" to this:
l. The immediate outlook is
that economic activity is likely to
hold at the midyear level for the
July August September quarter,
and perhaps rise a bit in Sep
tember.
2. Longer-range prospects are
darker, because it seems that, on
the whole, fundamental readjust-
ment has not been completed and
employment, production, income
and prices may continue to drift
downward from October through
mid-1950.
Erratic Courses Noted.
The men who drew up this ap-
praisal would not be quoted by
name.
The longer-range downdrift. it
was noted, probably will be OBJ
scured from recognition by its
piecemeal character, moderate
tempo, and erratic upturns now
and then in particular lines.
One sign of an economic breath
err or reversal was said to be "a
significant change in the attitude
of businessmen (over the coun-
try) within the last two weeks, y
this involving a swing toward op-
timism.
The Significant change" was
reported by a strategically placed
Washington official with an op-
portunity to keep in touch with
business thought in all parts OF
the Nation and to get bearing on
it's general direction.
Psychology Stressed.
Business PSYCHOLOGY has been
given a leading role in admins
tration analyses of the causes of
the economic downturn that has
been in progress since last fall.
The official making the observa-
tion wouldn't permit identif1ca-
tion, but he licked off some of
the combination of factors" he
said had worked to effect a COM
paratively quick shift away from
pessimism in business sentiment:
The surprise appearance of
orders for an increased quantity
of goods, necessitating in turn an
increase of production by many
concerns that had curtailed out
put earlier.
President Truman's announce
ment against more taxes, confirm
ing the no-tax expectation gen.
Grated previously by Congress-
Also, easy credit policies and the
inf1ationary effects of deficit
financing by Government.
Stock Market Climbs.
Confidence catching hold from
the firm recent climb of the stocl
market as buyers came to the
conclusion they (stocks) were bar.
gains" and should be bought be.
fore their prices went up.
Nevertheless the officials did moi
say that the changed attitude
necessarily would reverse the
downtrend in business. although
he was sure it would be a strong
force in so doing If it persists.
One immediate indication that
business might have bounced up
from a temporary bottom came
in a Federal Reserve Board re-
port that a record-smashing 27-
week-long, $2.757,000,000 drop in
the volume of business loans had
been halted in the week ended
July q and replaced by $16,-
100000 upturn.
Seasonal Pickup Possible.
: 1t might confirm that business
men, bucked up in confidence,
have dropped reluctance to bor-
row to build up inventories. Still,
as one official said. it also could
be an entirely seasonal develop
ment; that is, the start-a month
or two behind normal schedule
on expansion of inventories for
fall and the Christmas season.
This change in the business
loan trend came in the wake OF
two other economic reports yes
terday of mixed import:
l. The July upturn in employ
ment to a new high for the year,
SO, 100000 accompanied by a 81
multaneous increase in unem-
ployment to a Seven-and-haH-
year high of 1905, 100000
2. The dollar value of construE-
ton work broke records for July
and for the first seven months of
the year, thanks largely to a
squirt in private home building.