Outdoing the Optimists

One day in the fourth quarter of 1959, the U.S. economy will pass a long-awaited milestone far ahead of schedule. Americans by then will be producing, earning, spending and investing at the rate of $500 billion yearly, raising the U.S. to the level of a half-trillion-dollar economy. For each of the nation's 45 million families, the breakthrough will represent some $11,000 worth of goods and services produced by U.S. factories, farms, mines, government and service industries. The total will be many billions greater than the combined gross national products of the Soviet Union, Great Britain, West Germany and France.

This was the good news behind last week's report from the President's Council of Economic Advisers that U.S. economic activity in the second quarter climbed to a record yearly rate of $483.5 billion. Even the Government's economists were surprised at the rise of $13.3 billion from the last quarter, $49 billion up from a year ago. They had hoped that the U.S. economy would show enough strength to reach the $500 billion mark by mid-1960. But the economy has snapped back from the recession--and hurtled on--faster than the most glowing optimists had predicted only a few months ago. It now stands at more than $50 billion above the 1958 recession low.

Even conservative economists now expect that--barring a steel strike more than six weeks long--the economy will roll steadily on to $490 billion in the current quarter. Then only a few weeks will separate it from the half-trillion-dollar threshold. At that rate of growth, the U.S. economy will hit the $750 billion mark before 1970.

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