The Peak

The U.S. war economy is at its peak. Last week the Department of Commerce reported: the national income for the first half of this year was at the annual rate of $158 billion, and the gross national product (total amount of goods and services produced) was also at a new peak of $196 billion. This was a far greater increase over 1939's national income of $74 billion than even the most optimistic economic seer had foreseen, even allowing for the rise in the price level. Thus, in the peak year of war, the Department of Commerce pointed out that the U.S. had both guns ($86 billion spent for war) and butter ($95 billion spent for consumer goods and services).

Actually U.S. production had reached its war peak by the end of last year. Factory payrolls, which had long led the way, stopped expanding then. But the national dollar income continued to increase, chiefly because of payments by the Federal Government to the armed forces and their dependents. By the middle of this year, the Department found, even these payments, along with all Governmental spending, were leveling off. (In July, Federal spending dropped 7.6%, the lowest point in seven months.) But the U.S. citizen went right on saving more than ever before. He may tuck away an estimated $36 billion this year.

The Department now estimates that at year's end U.S. citizens may have more than $115 billion usable for postwar buying, if they are not fearful of hard times ahead.

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