The Next Six Months

As 1955 began, just about everybody expected that business would be good for the first six months. At the end of a healthy first quarter, what is the outlook for the next six months?

Last week it seemed even brighter than the start of the year. In January spending for industrial expansion was heading down. Last week the SEC and the Commerce Department reported that in the second quarter, business outlays for new plants and equipment will go up. Full year expenditures are expected to be about $27 billion, slightly higher than in 1954.

Consumers also plan to step up their spending. In its annual survey of consumer spending, the Federal Reserve Board reported that consumers feel better about their own financial position than they did a year ago, expect to have more cash to spend. For example, more plan to buy houses than in either early 1954 or 1953.

Almost every economic indicator pointed to continuing prosperity:

P:February's steel production of 8,503,000 tons, more than any month since October 1953, had the industry working at 88.1% of capacity v. 74.3% in February 1954. Last week the operating rate was up to 92.5% of capacity, and mills, sold out through May, were having a hard time getting scrap. To help out, the Commerce Department slapped tougher regulations on scrap exports.

P:For the fifth week in a row, loans from New York City banks to business, led by the sales finance companies that underwrite consumer car purchases, went up, contrary to the seasonal decline usual at this time of the year.

P: The January sales total of $46.2 billion by manufacturers, wholesalers and retailers, said the Commerce Department, was $2.8 billion over the same month a year ago. As February began, inventories totaled $76.8 billion, down $3.3 billion from the same time the year before, but stocks rose $600 million from December to January. Said the department: "Inventory-cutting looks as if it is ended." As a measure of how well goods are moving, during the first week in March carloadings rose 11.6% over a year ago; department-store sales did even better, going up 15% above the same week a year ago.

P: Polling its members, the National Association of Purchasing Agents found that compared to January, five times as many agents were buying beyond the 60-day range. Cotton mills, an important segment of the soft-goods industries, reported an unfilled-order backlog of about ten weeks, 40% ahead of last year.

P: In February, for the first time since the fall of 1953, the count of unemployed was lower than the same month a year earlier (3,383,000 v. 3,670,000). The average factory workweek was almost one hour longer than a year ago, and during January the average gross weekly pay rose nearly $1, to an alltime high of $74.93.

This file is automatically generated by a robot program, so reader's discretion is required.