Surprise

From Washington, Wall Street and the nation's major industries came a surprisingly unanimous report last week: the pickup is moving much faster than expected. The recovery led to the coining of a new phrase to characterize the recession--the V recession--a sharp drop followed by sharp recovery (see chart).

Government economists, who had expected the recession to be the same saucer shape as in 1948-49 and 1953-54, were changing their tune because an outpouring of new statistics showed a sudden and simultaneous hardening in the major muscles of the economy--capital expenditures, sales, new orders, inventories (see below). Every major industry counted in the Federal Reserve Board's index of production has boosted output from the low of last spring. The Fed felt recovery had progressed far enough to permit two more of its district banks, Minneapolis and Chicago, to raise their discount rates from 1 3/4% to 2%. Wall Street snorted bullishly at these figures, at midweek sent Dow-Jones industrials to the year's high of 513.71, just 7.34 points off the alltime peak of April 1956.

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