Evening star. [volume] (Washington, D.C.) 1854-1972, 1958-09-24
Marked Rise
EPredicted
For Economy
By LEE M. COIN
star Stan Writer


Recovery from the recess
sion is picking UP momentum,
the Commerce Department said
yesterday.
After listing recent modest
gains in key economic indicat-
tors, the department predicted
"a marked rise" in national
output and income during the
July-September quarter Just
ending.
In its monthly Survey of
Current Business" the DEPART
Inent credited the Improvement
toa wide variety Of factors, in
GLIDING accelerated Federal
spending.
Cautious optimism dominated
the tone Of the report, which
noted that gains from last
springs lows have been wide
spread,
Most analysts have agreed
recently that the economy Is
recovering from the recession,
although they warn that un-
employment will continue high
well into next year. Opinions
differ on how fast recovery is
likely to proceed.
Output Up 8 Per Cent
The survey took special note
OF an 8 per cent rise in indus
trial production between last
April's recession low and last
month. While output in August
still was nearly 6 per cent be-
low the August, 1857 peak, the
report said "the difference is
being narrowed"
Employment has been "edg-
ing upward" the department
continued, and average factory
work weeks have been lengthen-
ing.
The slightly frightened lob
picture helped push personal
income to a record peak last
month, the report noted. While
consumer buying reflects in
come gains, the department
said, individuals are still
cautious about mourning new
tnstallment debt obligations"
for autos and other major
purchases.
Sales Up 5 Per Cent
Retail sales last month, on a
seasonally adjusted basis,
totaled an estimated $3.50 BILL
lion - 5 per cent above the
March low but still a shade
below last summers high point.
Sales by manufacturers have
"mirrored" strong retail sales.
rising Government purchases
and a showdown in inventory
liquidation, the survey said
Manufacturers sales in July
were 6 per cent above March.
when the level was IA per cent
below the peak in the summer
of 1857.
New orders also have been
rolling in to manufacturers at
an increased rate, the depart-
ment noted. and backlogS of
new orders have stopped the
long, sharp decline.
The report noted that in
ventories have been sharply
cut back as businessmen tried
to live of existing stocks. This |
practice has slowed, the survey
said, relieving this drag on |
Now, optimism is returning.
and businessmen are starting |
to place orders again.
Plant Spending Rises
Another sign of this increased |
optimism is stepped-up spend
ing on plant and equipment. 4
Businessmen plan to spend at
a seasonally adjusted annual
rate of $31 billion in the Oc-
ber-December quarter, up
from an estimated 1903 billion
In the current quarter.
! The report said increased /
Federal spending. especially
military purchases, has had a
lot to do with recent economic
gains. Furthermore, the de-
partment said, the projected
increase of about 81 billion in
Federal spending during the
fiscal year ending next June
80 will exert an impact on
business in the months ahead.
State and local government
expenditures also are expected
to continue rising, the survey
added.