Evening star., 1959-06-28
Economy Keeps Scoring;
1859 Seen as, Boom Year
Nv STERLING n. GREEN
Associated Prsas stan Writer

Midyear 1859 finds Govern
ment economists boosting their
optimistic forecasts Of six
months and even six weeks
ago. Some top administration
advisers-surprised and some
what puzzled-now predict
privately that by the year-end:
National output will have
scared to q rate OF just about
$500 billion q year.
Personal income will be close
to a $400 billion annual rate.
Industry will have rolled up
record profits Of about $50
billion.
AS so often in the past. the
resilient United States economy
has fooled even those who
watch It most closely. White
House and Commerce Depart
ment experts had foreseen
best-ever year, but no boom.
Saw No Zip"
As recently as early May. at
the Business Advisory Council
meeting in Hot Springs. Va.
the Government men agreed
with q score Of corporation
economists that the 1859 pat
tern would be a gradual rise.
but with no Zip"
1t now appears there was
ample zip. Some officials believe
the production rate-the Gross
National Product-rose by $12
billion or more in the April
June quarter to roughly $3.50
billion q year, without the help
Of imitation.
That rate had not been ex-
pected until fall. It brings the
magic figure. $500 billion. with !,
In sight for the final quarter
Of this year. It had not been /
expected until mid-1960.
Joblessness Down
The residue Of 42t million un-
employed remaining from the Il
1878 recession has been cut Z
by more than one-third. The {
million drop in April and May
was bigger than seasonal. Il
There's q good chance, there
fore. that Secretary Of Labor {
James p. Mitchell will not have
to eat his hat in October, as he
promised to do If unemploy-
ment hasn't dropped to 8 mil
lion by then. Last month the
total was 3.3s9,0o0 down ia (
million from a year earlier. I
Most Of the other economic
graphs are pushing through the I
top Of the chart. Construction. {
retail sales, factory workers !
earnings, and industrial produc- I
ton all reached new peaks last {
month.
Dangers Seen
Nevertheless the news is not h
all rosy. Ofncials see danger
signals in these developments:
/. Prices are edging up !.
again, after a year of welcome )
stability. From today's record
high. living costs are expected
to continue rising in second
half 1859. owing partly to the
seasonal trend and partly to
the infiationary factors that Y
underlie any boom. Christmas Z
shoppers may find prices at a
new high and the value Of {
their dollars at @ new low. This {
could generate sales resist
ance, as It did in 1857.
2. Unless the steel wage bar
gamers sign q wage settlement
or extend their truce beyond
July II, Nationwide steel
strike could cut a agged notch
in the rising curve Of 1853
production and income.
Even If there is no strike,
production in the coming quar-
ter probably won't match that
of the quarter now ending. ofh-
cials predict. That's because
steel output has been buoyed
for months by the advance buy
ing Of the auto. oil. machinery
and other industries. Steel
users were laying in stocks in
anticipation Of either a steel
shutdown or price increase.
Their orders viii drop OF in
July.
8. Credit is tightening. Al
ready borrowing costs are COM
parable to those Of the 1857
tight-money squeeze. And Pres
ident Eisenhower, by asking for /,
removal Of the interest rate
ceiling on Government bonds.
has served notice that the ad-
ministration intends to keep
tightening the credit screws
If necessary to choke of infia-
ton.