Deciding Factor

The U.S. economy, which had not seemed sure of where it was going, last week showed signs of making up its mind. The deciding factor was the U.S. consumer, who has not shared the gloom that enshrouds many businessmen. Said the Federal Reserve Bank of New York in its business review: "Consumer purchasing, in particular, brought a breath of springtime to businessmen."

Detroit got the strongest sniff (see below). U.S. department store-sales, after one of the best Easter seasons on record, were up 10% over last year's in the last week of April, helping to push seasonally adjusted sales for the month to a new April record. Sales were running 17% ahead of last year's in the New York area, 16% in Cleveland, 11% in Atlanta, 7% in Chicago. The consumer has shaken his earlier caution about buying on credit; consumer installment credit is still climbing, after a seasonally adjusted $408 million gain in March, that brought it to a total of $39.6 billion.

What all this meant to U.S. business at large was that though manufacturers' new orders have lately dropped, businessmen will have to reorder if the consumer keeps on buying at his present rate. Even the skittish stock market showed some cheer at this prospect. Though the bears on Wall Street had widely prophesied that the skidding market would break through its previous low for the year (reached in March) and continue its drop, they were disappointed. The market went right down to its low, then turned around and rallied. It ended the week at 607.62 on the Dow-Jones industrial average, up six points for the week.

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