Still Growing

Wall Street's baby bull market grew a bit more last week. The Dow-Jones industrial average moved up 1.06 points to 191.06, the highest in 19 months. By week's end the market had slipped back a bit, to 190.74. But there was no hesitation in the rest of the economy.

In April, said the Bureau of Labor Statistics, 90,000 new houses were started, 20,500 more than in the same month last year. Civilian employment, said BLS, is also headed for a new peacetime high of 62,000,000 jobs by September. Industrial production, which had dropped in April for the second consecutive month because of the coal strike, was on the rise again. After the disappointing Easter season, department store sales, reported the Federal Reserve Board, were "at exceptionally high levels" in April and the first half of May.

Say When. How long would it last? A firm answer was given this week in the Federal Reserve Board's third annual survey of durable goods spending. With minor reservations, it was what businessmen wanted to hear: for at least the rest of this year there will be no letup in the demand for durable goods (autos, refrigerators, etc.), the backbone of the boom. About 20 million spending units (families) bought autos, radios, washing machines in 1947.

The cash was there for spending. Though consumers saved less in 1947 than in 1946 and more of them went into debt, they still had enough cash in their pockets to keep demand at its peak. Up to 4,100,000 planned to buy cars, as many as at the beginning of 1947. "There is no change," the survey noted, "in the prospective demand for other selected durable goods."

In housing, the number planning to buy this year--more than 1,000,000--was larger than the estimated number of houses that might be completed. Equally promising to the building industry was the fact that prospective buyers were prepared to pay prices in line with the high ones last year.

More to Come. An increasing amount of such buying would be on credit, said the survey. But consumers were making more (total money income had risen 10%), and the added income was well enough distributed among all income groups to support this financing. Of the 48.4 million spending units, about 2.5 million more had incomes above $5,000 in 1947 than in 1946.

"The outlook," the survey concluded rosily, "is that consumer expenditure . . . will continue in expanding volume . . . It is possible that immediate consumer demand for certain types of durable goods has increased further since the survey, which was taken before the proposed increase in military expenditures."

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