Evening star., 1953-12-27
The Crystal Ball Season

This is the traditional time for all sorts of
analyses, diSsections and forecasts about the
state of the American economy And the fact
that the first Republican administration in 20
years is running the Government provides an
added intriguing element for those who inter-
pret the past and forecast the future from
charts and statistics.
For more than year now, the idea has
been widespread that depression-or at least
a recession-is hiding just around the corner
of the next quarterly reports. The prevailing
thought today, as far as 1854 is concerned
is that there will be at least "leveling off. !"
The official administration viewpoint on the
year now ending and that soon to begin prob
ably will be contained in fullest form in the
Presidents economic report due for trans
mission to the Congress shortly after his state
of-the-U Union and budget messages. Advance
indications are that the Council of Economic
Advisers will inform the President that the
national economy topped virtually all records
in 1858 and is ending the year in sound and
healthy state. The council is reported as seeing
no serious business decline facing the country
in 1954-unless depression psychology" fas-
tens itself firmly on both the business COM
munity and its customers
There are valid and easily recognized rea-
sons why at least the leveling-o process may
be expected next year. The end of the shooting
war in Korea, coupled with the administrations
economy efforts, will cut Government spending.
Civilian demand for consumer goods, booming
along for the past eight years. finally has been
overtaken by production The lines of industry
and business where the salesmen are keeneSt
will have an edge next year.
But there are other reasons why most of
the economists do not expect the leveling off
to SNOWFALL into real depression Tax benefits
already are scheduled-a 10 per cent drop in
individual income tax rates and expiration of
the excess profits taX-and studies now under
way may lead to some additional relief. The
potential consumers still have plenty of money
in savings and other handy places. Furthermore,
the administration is planning to ask Congress
for extension of social security coverage and an
increase in the rate and coverage of the mini
mum wage law-Steps which could add to con-
sumer purchasing power Plant expansion is
not expected to continue much longer at the
pace of recent years but projects in this cate
cory already scheduled for the first quarter of
the new year show higher dollar rate than for
1858. The stock market, incidentally, has been
moving more or less steadily higher since the
years low point in early September and the
"bear market which covered most of 1858
seems to be over.
So it is that signs can be found pointing
in either direction the forecaster prefers to
look Gross national product, personal income,
employment, factory wage rates and dividend
payments all are making new records this
year. There has to be a breathing spell, if moth
ing more, for any economy and there may be
one coming up for this country next year.
There appear to be enough cushions, however,
to ward off anything resembling a collapse.