Prediction of Bounty

After taking a long look at the U.S. economy, Commerce Secretary Sinclair Weeks last week predicted: "We have a good chance of putting up the best year on record," better even than the record year of 1953. Basis for his prediction was the first-quarter record. Said Weeks: "It is clear from preliminary indications that the gross national product in the first quarter . . . was larger than any previous first quarter in our history."

The pace is continuing. While the first quarter's gross national product topped the old record for the period (1953's $362 billion), the increasing tide of U.S. business in the last few weeks has pushed the annual rate very close to the alltime peak of $372 billion, set during the second quarter of 1953.

In March the Federal Reserve Board's industrial production index climbed to 137 (1947-49 = 100), eleven points above a year ago and only one point shy of the alltime peak set in March 1953. Residential construction was one-third higher than in 1954's first three months, and business spending for new plants and equipment in the second quarter is going to increase so much that outlays for the year as a whole will be well ahead of last year.

Wall Street was just as bullish. The stock market usually declines around income-tax time as investors sell securities to pay their taxes. But last week the market rose every day. The Dow-Jones industrial average hit 425-25, up 7.25 points for the week and 5.77 points above the previous bull-market high in March.

First-quarter earnings continued good. Du Pont said that its first-quarter sales of $470 million were 17% above a year ago, and added that its earnings should show "at least as great" a gain. Monsanto reported that its first-quarter sales were 23% better than 1954, while earnings soared 59%. Meanwhile, automakers kept on smashing records. Last week's output was 206,458 cars and trucks, topping the high set during the previous week and totaling 66,834 more units than were produced in the same week last year.

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