Solid Signs of Revival

IT is very possible that a surprisingly strong upturn is now under way in the nation's business. Like flowers popping up through the snow, many signs of a resurgence are appearing: -- Christmas sales are particularly brisk. Compared with last year, retail sales rose 11 % in the first week in December and 9% in the month's second week. Says Macy's President K. Wade Bennett: "So far, it's the best Christmas in a long, long, long time."

> Housing starts in November ran at a record annual rate of 2,316,000, all but ensuring that an alltime high of 2,100,000 units will have been begun this year. Sales of home furnishings are certain to rise next year as these houses are completed and tenants move in.

> Industrial production jumped in November by .8%, the biggest monthly boost since May. Significantly, there were increases in the critically important categories of consumer goods and business equipment.

> Auto sales are heading for a record-high 10.2 million or more units this year, including imports. Detroit's manufacturers expect to match or exceed that total next year, and to sell proportionately more domestic cars because of the shift in currency-exchange rates. Retiring General Motors Chairman James Roche predicts 1972 sales of between 10.5 and 11 million units. The manufacturers plan to produce a high total of 2.4 million U.S. cars in next year's first quarter. That rate of output should eliminate the industry's traditional midwinter layoffs and create more overtime and fatter paychecks for workers.

> Partly because of more jobs and overtime work, personal income in November rose $3.5 billion, to an annual rate of $876 billion. That compares with a gain of $1 billion in October.

> The stock market, as measured by the Dow Jones industrial average, climbed 17 points last week, to close at 874. Since Thanksgiving it has jumped 72 points. On the basis of expected increases in earnings for the companies that make up the index, some high mutual fund executives are again indulging in their favorite dreams, forecasting that the Dow will finally top 1,000 next year.

For all these prospects of progress, businessmen remain wary and reluctant to spend heavily for inventories. Durable-goods manufacturers have reduced their inventories for the last three recorded months in a row, and that is a major--if temporary--drag. The problem is that businessmen have seen the economy make too many false starts toward recovery, and they have heard too many rosy pronouncements from Administration officials who later proved to be overly optimistic. But the latest tangible signs of the increase in sales and production will probably force businessmen to increase their own spending --sooner rather than later.

There are other hopeful signs. Industrial productivity is rising fast because manufacturers are increasing their output more rapidly than they are hiring workers. The new tax reductions enacted by Congress, though relatively modest, will add a further fiscal push to the economy. Adding up all factors, more and more economists forecast that the gross national product will rise next year by $100 billion, give or take a few billion, and that the real, noninflationary rate of growth will be close to 6%--roughly double this year's level.

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