The Half-Trillion Mark

The U.S. economy neared a historic peak during the first quarter: a half-trillion-dollar gross national product. While Government economists were still tallying the final figures. Commerce Secretary Frederick H. Mueller said last week that the total value of goods and services produced in the quarter that ended this week "reached the annual rate of close to half a trillion dollars."

The $16 billion gain from the $483.5 billion G.N.P. in the fourth quarter of last year, said Mueller, demonstrates not only the economy's recovery from the steel strike, but a "firm foundation of business strength." Not since the first quarter of 1955, when gross national product rose $17.2 billion, has the economy grown so fast.

The gains brought along price increases. The Labor Department reported that in February, consumer prices rose two-tenths of 1%, to reach 125.6% of the 1947-49 average and return to the record high set last November. Said Robert J. Myers, Deputy Commissioner of Labor Statistics: "This dispels any hope we might have had that the slight decreases of January and February might be extended." Myers expects that "things are likely to get a little worse before they get better." For the year as a whole, the Labor Department believes that the total increase in prices will be about the same as in 1959: about 1 1/2%.

For U.S. consumers, the expected rise in prices will be no deterrent to purchasing, predicts the University of Michigan Survey Research Center. In its annual survey of consumer financing, the Center found that consumer inclinations to buy "are much improved" since the steel strike, but still below the peak levels reached during 1955-56. The proportion of consumers who think "it is a good time to buy" automobiles and other durable goods is much higher than a year ago. Consumers who plan to buy houses are also increasing in number, and purchase plans for most household-equipment items are "somewhat higher than a year ago." Conclusion: "Consumers' current inclinations to buy promise a positive stimulus to the American economy, without confirming earlier predictions (by others) of a great boom in consumer spending."

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