Mixed Blessings

Every so often the prophets of doom begin mumbling darkly that people have satisfied all their big postwar demands and the boom is ending. Last week, hard at work with slide rule, questionnaire and adding machine, the busy statisticians showed that a vast reservoir of demand still remains.

The Federal Reserve Board, sampling buyer plans, found that consumers are still thirsting for more. No less than 14% of U.S. families plan to buy a car next year; 8% of the nation's non-farm families have tentative plans to buy houses --more, in both cases, than in 1952. Businessmen got the same sort of sounding. Dun & Bradstreet polled 1,277 key manufacturers, wholesalers and retailers, found that 61% of them expect last-quarter sales to top the same period in 1951. One hopeful bellwether: mail-order and chain-store sales in July were 8% ahead of last year.

To keep pace with this seemingly insatiable demand, the U.S. productive machine is growing at a record rate. In the second quarter, said the Commerce Department, gross national output (i.e., the value of all goods & services) hit a new high--an annual rate of $343 billion, up 12% since Korea. One measure of the growth came in a report on nonmanufacturing industries, e.g., transportation and utilities, which keep the others humming. Since the war, reported Commerce and the SEC this week, these industries have poured $85 billion into new plants and equipment, equal to 75% of their total assets at war's end. Last year's outlays were a record $15 billion.

Much of this growth was real (actual physical production has increased 14% since Korea), but much of it also was a result of creeping inflation, reflecting higher prices and higher costs all down the line. And if anybody thought it meant unlimited and universal prosperity, the Department of Labor slide rules came up with some dampening figures of their own: in 1950 the average city family earned $4,300 after taxes, an alltime record up to then, yet it had also overspent its income by $400 trying to keep abreast of rising prices and taxes.

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