Evening star., 1961-12-14

llllU lSOG anu lllG Ille SlOSS ii
$3.50 billion or better by the Sc
less clear for the second half O
This was reported in the m
anty Trust Co. distributed to-
day.
This authoritative and widely
followed summary said it is ap-
parent that subject to limita-
tons of international factors,
the Federal Reserve Board is
unlikely to apply severe none
tary curbs so long as price pres
sures. now subdued, do not
mount.
Aside from the factor Of mo-
mentum. many specifics point
to an extension of the business
upturn, the review declared.
Automobile production
schedules for coming months
reflect not only the good tone
of retail demand but also the
relatively low level of dealers
inventories" it reported.
steel output has begun to
respond to the general accel-
Grafton of activity. Before long
it also will reflect inventory
accumulation by users fearful
for midyear strike in the steel
industry and mindful Of the
possibility of an increase in
steel prices after the new union
contracts are negorlated.
Sees Spending Rise
"At the same time the impli-
cations of President Kennedy's
budget totals for fiscal 1862
are for a further considerable
rise in Federal purchases of
goods and services during the
first half of the calendar year,
and it can be assumed also
that the virtually regular up
ward march of outlayS by State
and local governments will per-
Sist.
BY midyear the index of in
duStrial production. which in
October stood at 113 Of the
1857 average, ought to be at
120 or higher"
Largely because Of the squirt
in auto sales. consumer eX-
penditures for durables prob
ably have risen in the final
1861 quarter to around an an
nual rate of S45 billion to
match their best progression
reading, the review stated.
The outlook for plant and
equipment expenditures for
1862 seems a good deal better
than the 4 per cent year-to-
year rise indicated by the Nc
Graw-Hlll autumn survey Of
intentions, it commented.
Some showdown in the rate
of expansion can be expected
after midyear, but projections
for this period become much
more difficult, the review de-
clared. A letdoWn in inven-
tory accumulation, completion
of the Berlin military buildup,
were mentioned among the
probabilities.
However, since a downturn
in the general business prior
to the end of 1862 would make
the current expansion the
shortest since the war, there
seems good hope that the COM
bination of factors believed to
have abbreviated the previous
upturn will not be duplicated,
it declared.
Steel StOppage Recalled
1T is impossible to predict
the outcome of the forthcom-
ing wage negotiations in the
steel industry. where a 1l6-day
work stoppage in 1859 dis
rupted the economy. In the
fiscal and monetary fields.
however. there seems slight
prospect of a confluence of re-
strictiye forces as telling as
occurred in 1859" it said.
The principal cloud over
prospects for a longer expan-
sion this time is the continu-
ing halance-o of-paymentS def
icit, which keeps pressure on
the dollar and carries the
threat of serious gold losses
that conceivably could neces-
state 'harshly restrictive meas
ures. Fortunately the prevalent
new spirit of international
monetery cooperation, while it
does not solve the basic prob
lem, holds hope of giving time
in which to work out a solution.
Also shadowing the longer
term outlook is the question of
how robust the profits picture
will look toward the end of
1862. BY that time productivity
gains undoubtedly will have
slowed, causing profit margins
to diminish. This could arrest
the uptrend in funds available
to corporations from internal
sources, with probable breaking
effect over a period of time on
plant and equipment outlays." "
Kroger Sales Hold