Toward the Peak

The U.S. economy, as measured by the gross national product, has climbed almost back to its alltime high. So Commerce Secretary Sinclair Weeks told the Commerce Department's Business Advisory Council last week at Hot Springs, Va. On top of the fact that the gross national product rate in July-September apparently was around $440 billion, v. the recession's low of $425.8 billion in January-March, Weeks predicted that the final-quarter G.N.P. rate will hit $450 billion, v. the prerecession peak of $445.6 billion in the summer of 1957--and go even higher in 1959.

Unemployment, which dropped 600,000 in September, is expected to drop that much more in October. This would take the nation's work force into Thanksgiving and the pre-Christmas shopping season with 3,500,000 out of work--well below the 5,000,000 average for the first eight months of 1958.

Income Up. Equally good recovery news was the fact that personal income in September rose to a seasonally adjusted rate of $357.5 billion from $356.1 billion in August. This third consecutive record-breaking month made certain that 1958 would surpass 1957. For the first nine months of 1958 personal income has run at the rate of $351.6 billion, v. a rate of only $347.5 billion in 1957. Wage and salary disbursements in September rose $40 million to a rate of $239.1 billion.

September private housing starts, at 108,000, lifted the seasonally adjusted rate to 1,220,000, making last month the homebuilders' best September since 1955. Counting 10,000 public housing starts, it was the residential construction industry's best all-round September since 1950. Freight carloadings continued their five-week climb, rising 9,122 in the week to a new 1958 high of 686,138. Estimated steel production last week pushed to 73.6% of capacity, up from 71.6% during the week before.

Durables Down. The consumer durables industry still lagged. Largely because of a 40% drop between August and September in auto assemblies, total September industrial output rose only to 137% of the 1947-49 average, a one-point increase over the 136% recalculated for August, which was the smallest monthly rise since the recession turned around last spring.

As the wildcat strikes that cut auto output were being gradually settled, auto production was starting up. Last week Ward's reported weekly car output at 45,003 units, v. 34,834 the week before. Chrysler production was rescheduled at 60% and Ford 25% ahead of the previous week. General Motors had not produced a car since Oct. 2, but this week at least two G.M. plants, the main Olds plant at Lansing, Mich, and the Buick-Olds-Pontiac plant at Wilmington, Del., are scheduled to get back into production.

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