End in View?

Since almost everyone seems to have decided that the recession will not get any worse, the main topic of business conversation last week centered around when the recession would end. The answer depended somewhat on who was talking. New York's Guaranty Trust Co. took a banker's grey view: "Prospects for a definite end . . . remain highly uncertain, despite . . . comment that the bottom may be close at hand." Said the equally august Chase Manhattan Bank: "It is possible that we may see an end before long."

Those who kept their eyes on heavy durable goods, especially steel and autos, found the picture still depressing. Operating at only 48.2% of capacity, steelmen revised their production figures for the year, now think 85 million tons, off 30 million tons, will be about the size of it for 1958, though they expect the worst to be over by Labor Day. Auto production last week was 33.1% less than last year, and General Motors announced wholesale shutdowns of its Fisher-body and Chevrolet assembly plants to help dealers trim their unsold stocks.

But with FHA loan requests up to 75,000 last month--the highest level since May 1950--few builders were crying the blues. Neither were food stores, drug and cigarette makers, many of whom reported record first-quarter profits (see Earnings). The U.S. consumer's personal income had dropped hardly at all. The annual rate of $341.4 billion in March was down only $300 million from February and was $1.2 billion higher than last year. But consumers were cautious. Retail sales of $15.4 billion for the month of March were down, though only 1% v. a 4% drop the month before.

While few businessmen were willing to pinpoint the day on which the economy would come out of its slump, the Guaranty Trust knew what could delay the recovery. Said the bank: "The longer management clings to old methods, old products and old pricing policies, the longer it will take to recover lost markets. The more tenaciously labor insists upon maintaining, or raising, the cost of employment, the less employment there will be."

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