Sparkling Signs

U.S. production, recovering all of its recession drop, is at a new high. The recovery has not only been faster than many an economist dared forecast a few months back, but has actually been faster than official figures showed. The Federal Reserve Board announced that overall industrial production in March rose to 147% of the 1947-49 average, a point more than the previous record of 146% in February 1957. The FRB also revised upward its February industrial output figure from 144%, as previously announced, to 145%. Most encouraging was the fact that the extra boost in production has come from nondurable goods (see chart). Economists are hopeful "that durable goods will pick up faster, give the economy a new push.

Pacing the spiraling output of durable goods is steel production, which last week was the largest in history. U.S. mills, operating at 93.5% capacity, produced 2,647,000 net tons of steel. And many a sign points to the steel boom as being more than mere strike hedging. Steel's key customers, U.S. auto and truck manufacturers, last week scheduled their best performance of the year. Auto output neared the 2,000,000 mark, 34.7% ahead of last year, and truck production was 36.8% ahead of the same period a year ago. Brisk April buying has firmed industry hopes for a 6,000,000-car year (including a brisk 500,000 imports) and automakers have already started lining up steel for 1960 models.

Encouraged by rising consumer buying, appliance makers have increased their production schedules, and some are adding to plant facilities. The Norge Division of Borg-Warner Corp. last week announced that it will boost second-quarter production 90% over the same period last year.

Other signs of boom:

P: Capital spending this year will be 6 1/2% higher than in 1958, hitting an estimated $34.2 billion, according to a survey by McGraw-Hill Publishing Co.

P: Personal income in March rose to a new high of $368.6 billion at a seasonally adjusted annual rate, a gain of $3.2 billion from February's previous high of $365.4 billion.

P: Private housing starts in March rose to the seasonally adjusted annual rate of 1,390,000 from 1,320,000 in February.

P: Department store sales last week were 18% above the level of a year ago.

P: Gross national product in the first quarter increased to a seasonally adjusted annual rate of $465 billion, up from $453 billion in the fourth quarter last year, the President's Council of Economic Advisers reported in a preliminary estimate.

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