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ECONOMIC FORECAST FOR 1959
Before the Philadelphia Rotary Club,
12:30 p.m. on Wednesday, January 14, 19 59
Burgundy Room, Bellevue-Stratford Hotel.
Philadelphia Rotary Club, Burgundy Room,
Bellevue-Stratford Hotel, Philadelphia,
12:30 p.m., Wednesday, January 14, 1959«
THE BUSINESS OUTLOOK FOR 1959
MEMBER:
L.H.B.M.A. - a perquisite of office.
December Motto:
"It's a Nice Day.
it up Some Way."
Let's Louse
Charles Hoeflich asked me to speak informally, off the record.
Hazards yet necessity to forecast.
No crystal ball.
Tail-end of forecasting season.
1.
Agree with standard forecast
2.
Go out on limb to be dramatic
-
audience
nothing new
—
and probably wrong
—
or a scoop if right - not necessarily.
—
as an unknown poet reminds us:
"As we approach life's gray December,
These in the main are our regrets.
When we're right no one remembers,
When we're wrong no one forgets."
Forecasting is analyzing the behavior of people
—
w hether we like that
behavior or not.
Philadelphia Rotary, p. 2
So before talking of 1959, let us look at what we as a people have
been doing for the past decade.
I find some basic facts have been overlooked.
Where I differ from standard forecast is in the implications
of these changes.
Not too different for 1959*
Is it a mere interlude -
Between the post war explosion
in population
and restocking durables
or
a transition to something different?
,7 > -
oROWTH
Total
in
GROW TH
POPULATION
North- North South West
east Central
Farn
in
P O P U LA T IO N
Nonfarn
(X ÿ
J
6 r
-I
* ^
at-trO'
$0%
^
fine*
to*4
GROWTH IN LABOR FORCE
NONFARM EMPLOYMENT
140
120
100
80
MANUFACTURING EMPLOYMENT
MANUFACTURING
160
140
120
100
80
1948
1950
1952
1954
1956
1958
1948
PRODUCTION, UNEMPLOYMENT
140
120
100
5
4
3
2
1948
1950
1952
1954
1956
1958
1950
1952
1954
1956
1958
S '
LA BO R FORCE, E M PLO Y M E N T , AN D U N EM P LO YM EN T
[Bureau of the Census estimates without seasonal adjustment. Thousands of persons 14 years of age and over]
V
iW
Civilian labor force
Year or month
Total noninstitutional
population
Total
labor
force
Employed 1
Total
Total
1945......................................
1946......................................
1947......................................
1948......................................
1949......................................
1950.................................................
1951.................................................
1952.................................................
1953.................................................
1954.................................................
1955.................................................
1956.................................................
1957.................................................
105,370
106.370
107.458
108.482
109,623
110,780
111,924
113,119
115,095
116.220
117,388
118,734
120,445
65,140
60,820
61,608
62,748
63,571
64,599
65,832
66,410
67,362
67,818
68,896
70,387
70,746
53,860
57,520
60,168
61,442
62,105
63,099
62,884
62,966
63,815
64,468
65,848
67,530
67,946
52,820
55,250
58,027
59,378
“ 58,710
59,957
61,005
61,293
62,213
61,238
63,193
64,979
65,011
1957— N ov......................................
D ec.......................................
1958— Jan........................................
Feb.......................................
Mar......................................
Apr.......................................
M ay.....................................
June.....................................
July......................................
Aug......................................
Sept......................................
Oct.......................................
N ov......................................
121,109
121,221
121,325
121,432
121,555
121,656
121,776
121,900
121,993
122,092
122,219
122.361
122,486
70,790
70,458
69,379
69,804
70,158
70,681
71,603
73,049
73,104
72,703
71,375
71,743
71,112
68,061
67,770
66,732
67,160
67,510
68,027
68,965
70,418
70,473
70,067
68,740
69.111
68,485
64,873
64,396
62,238
61,988
62,311
62,907
64,061
64,981
65,179
65,367
64.629
65,306
64,653
• Includes self-employed, unpaid family, and domestic service workers.
2 Beginning 1957 persons waiting to start new wage and salary jobs and
those on temporary layoff, previously considered as employed (with a job
but not at work), are classified as unemployed, and a small group in school
and waiting to start new jobs (previously included as employed) are classi
fied as not in the labor force.
Unem
ployed
N ot in the
labor force
In nonagricultural industries
In ' !
agriculture
44,240
46,930
49,761
51,405
50,684
52,450
53,951
54,488
55,651
54,734
56,464
58,394
58,789
8,580
8,320
8,266
7,973
S.tJT«
7,507
7,054
6,805
6,562
6,504
6,730
6,585
6,222
1,040
2,270
2,142
2,064
3 ,395
3,142
1,879
1,673
1 ,602
3,230
2,654
2,551
2,936
40,230 c**
45,550 \
45,850
45,733
46.051 _
46,181
46,092
46,710
47,732
48,402
48,492
48,348
49,699
59,057
59,012
57,240
57,158
57,239
57,349
57,789
58,081
58,461
58,746
58,438
58.902
58,958
5,817
5,385
4,998
4,830
5,072
5,558
6,272
6,900
6,718
6,621
6,191
6,404
5,695
3,188
3,374
4,494
5,173
5,198
5,120
4,904
5,437
5,294
4,699
4,111
3,805
3,833
50,318
50,763
51,947
51,627
51,397
50,975
50,173
48,851
48,889
49,389
50,844
50,618
51,374
...
y
N o t e . — Information relating to persons 14 years o f age and over is
obtained through interviews o f households on a sample basis. Monthly
data relate to the calendar week that contains the 12th day; annua)
data are averages o f monthly figures.
EM PLOYM ENT IN NONAGRICULTURAL ESTABLISHMENTS, BY INDUSTRY DIVISION
[Bureau o f Labor Statistics.
In thousands o f persons]
1950.
1951.
1952.
1953.
1954.
1955.
1956.
1957.
1,824
1,892
1,967
2,038
2,122
2,219
2,308
2,348
5,077
5,264
5,411
5,538
5,664
5,916
6,160
6,336
6,026
6,389
6,609
6,645
6,751
6.914
7.277
7,626
2,372
2,365
2,368
2.367
2,360
2,356
2,370
2.367
2,363
2,377
2,392
2,389
2,383
6.367
6,382
6.368
6,367
6,330
6,352
6,360
6,392
6,433
6,420
6,440
6,403
6,424
7.671
7,747
7,754
7,766
SEASONALLY ADJUSTED
1957— Nov.
Dec..
1958—Jan..
Feb..
Mar.
Apr..
May.
June.
July.
A u g..
Sept.
Oct..
N o v .,
51,758
51,516
51,223
50,575
50,219
50,054
50,147
50,315
50,411
50,570
50,780
50,586
50,773
16,455
16,252
15,965
15,648
15,389
15,243
15,202
15,275
15,312
15,330
15,529
15,369
15,599
789
784
766
747
733
723
718
713
709
701
707
707
704
2.710
2.679
2,652
2,455
2,573
2,624
2.698
2.698
2,693
2.711
2.698
2,700
2.680
4,104
4,070
4,045
3,990
3,930
3,890
3.877
3,888
3.877
3,867
3,858
3,882
3,872
11,290
11,237
11,305
11,235
11,116
11,050
11,087
11,105
11,121
11,175
11,151
11,160
11,133
7,788
7,816
7,835
7.877
7.903
7,989
8,005
7,976
7,978
W ITH OUT SEASONAL ADJUSTMENT
52,316
52,610
50,477
49,777
49,690
49,726
49,949
50,41J
50,1^8
50f576
fl ,237
51,135
51,325
N o t e . — Data include all full- and part-time employees who worked
during, or received pay for, the pay period ending nearest the 15th o f the
month. Proprietors, self-employed persons, domestic servants, unpaid
?
11,552^
12,are
IV,140
10,948
10.939
10.940
10,961
11,035
10,984
11,011
11,151
11,231
11,397
family workers, and members o f the armed forces are excluded. Figures
for October and November 1958 are preliminary. Back data may be
obtained from the Bureau o f Labor Statistics.
Philadelphia Rotary, p* 6
Some implications:
Teenagers and Retired people are not great
Home buyers
Car
buyers
Durable goods buyers
~
flt-f’t
Returning G*I* in a hurry to establish family*
Will be confronted increasingly with
costs of education - which are rising*
Suburbia and big cars have created needs for
Streets
Highways
Garages
Severs
j
.
14
.
*T ~
Philadelphia Rotary
Net effect not great on 1959«
I do not differ much from standard forecast for 1959*
Incidentally, these have become more optimistic
month by month«
g
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Philadelphia Rotary
Objectively - on the over-all - it should be a recordbreaking year in -
G.N.P.
Possibly in Industrial Production
But it will not be a comfortable year»
Nagging unemployment
Dissension
internationally
domestically
The critical second and third quarters -
Steel negotiations.
So prediction on Federal Reserve Policy!
TiU
»vc
When to stop I
+*
f
S^uj
OVER-ALL OUTLOOK
GROSS NATIONAL PRODUCT
Billions $_____________________________
Adjusted, Annual Rate
420 iiiiiMiM
Index
(1947-49*100)
— I— I— L
INDUSTRIAL PRODUCTION
______
Adjusted
Index
(1 9 4 7 - 4 9 -1 0 0 )
OONSUMER PRICES
130
«
♦Year and fourth quarter estimated
o Average for the year
CONSUMER
PERSONAL CONSUMPTION
Billions $__________ _________________
Adjusted, Annual Rate
*».
71
,
AUTOMOBILE PRODUCTION
Millions
Annual Rate
OOOOOOO
Có
HOUSING STARTS
Millions
Annual Rate
ooeooo
1958*
♦Year and fourth quarter estimated
BUSINESS
PLANT AND EQUIPMENT
Bl 1lions $____________________________
, Annual Rate
CHANGE IN INVENTORIES
Billions- $_____________________________
Adjusted, Annual Rate
STEEL PRODUCTION
Millions
of tons
Annuàl Rate
CORPORATE PROFITS BEFORE TAXES**
Bi l lions $
Adjusted, Annual Rate
—
1958*
♦Year and fourth quarter estimated
♦•Third quarter 1958 estimated
1958*
1959
20
Adjusted, Annual Rate
♦Year and fourth quarter estimated
SUMMARY
OF
BUSINESS
FORECASTS
Prepared by the Research Department
FEDERAL RESERVE BANK O F PHILADELPHIA.
January
J,
1959
FOR
1959
BUSINESS
FORECASTS
FOR
GENERAL
FORECASTS? AHD DAOK
SOMART
GNP
($ b il.)
CONSUMER
In d u strial
Production
Prices
(1947-49 = 100) (1947-49 = 100)
Ormnmwnt Ecoocnists; J/C 9/16/58
Steady 3-6 mos.
Forecasters Club; Oct. 1958
Slower ris e in 1959. Rise in GBP
more rapid than in d u stria l production
lfcasiness Advisory Council;
J/c 10/20/58
M ajority expect continued
strengthening throughout next
year
Consensus o f Housing Experts
Housing depends upon a boost in FHA
rate and a n ti-in fla tio n actions of
FHB
a. Jules Bactasan, Prof.,NYU
d. U illlm Doyle, Mortgage
Banker
House & Heme. Hot. 1068
(m il,)
Business
Outlays
($ b il.)
Steel
(Production)
(m il.net tons)
P ro fits
($ b i l. )
Government
Outlays
($ M l.)
Lag behind
recovery
Uncertainty due Capital outlays
to exhausted
uncertain
government
stim ulants
A neutral or a
minus facto r,
tip to 1.15 from
1.07
Housing slowdown due to lack of
dRimnd and tig h t money.
Housing drop-off - discount too
much fo r builders
More gradual recovery
Avg. $460 up 4-551 from
1958. Model
was $457
Agriculture Department's
ftitlook Conference
M ajority expect steady but unspec
tacular advance; record conatr.
gain; in fla tio n check
HouseB
(Starts)
P u ll by 2nd
h a lf
"As fa r as housing is concerned,
we' ve had it ."
O fllie rsity of M ichigan's Annual
Conference o f Economists;
m 11/8/58
Xcanoaist,
Bank
(m il.)
$480 by mid
year
Rise $5 a Q.
H it $460 by 4th
Q. Just as many
picked $480 as
chose the
median of $460
Board
A sst. D ir.,
Autos
(Sales)
peak may occur
Improvement in major business in d i
cators. Characterized by stead ily
r is in g output and continued In fla tio n
a. Vfederal Reserve
b . Louis Paradlso,
OS
c . W llH m B u tler,
Chase Manhattan
m 11/22/58
Personal
Consumption
($ b il.)
Capital outlays:
1st d $31. 5;
2nd Q $32.0;
3rd Q $33*0;
4th Q $34.0;
Avg. $32.6
(4th Q 1958 $31.0)
$470 - $475 by Rise slower
next summer
in 1959; new
T. V. Dodge Survey o f 212 Econ.
(taken about Ju ly )
ftrlldlng ftisiiwM. Hov. 1osfi
Baployment
(m il.)
ocv e r t ís ::r
BUSINESS
1st q - $1+55.5;
2nd Q - $1+63;
3rd Q - $1+67;
4th Q - $1+72.5;
Avg. - $464.5
(4th Q 1958 $448)
Bivln George, D irector o f Economic
Research, Sun & Bradstreet;
J/c 10/10/58
b. Arnold Chase, Head o f Con
struction S ta tis tic s BUS
c . W illi«a tyon, Pres.,HAMSB
1959
Slowdown ea rly in 1959 - la stin g
throughout year
$470 by Ju ly 1
$470 by year's
end
H it $493 be
fore 1959 over
Rise faster
than (30?. H it
147 in Sec.
(150 was popula r) Rise
over 1958
Consumer rise
ste ad ily; h it
125.5 In Sec.
Wholesale up
but le ss than
consumer; h it
121 by Sec.
Possible la g In
May be harmed
recovery of
by excessive
cre d it re s tric cap ital outlsys.
tio n s. 1.1 rate Rise 6£ to $33
($31 in 1958)
fa r 1s t h a lf,
1.0T5 rate fo r Conatr. gain
modest
2nd
r
R elatively slow $300
decline in
number unem
ployed
Won't ris e much.- Unemployment
Ho re a l spree
1$ or so
to decline
modestly. Avg.
unemploy. - 3*7
Model: to 2.2
Increase In
nondurables.
Indecision
about durables
C ru cial
mystery
Lagging p ro fit
margins
Rebuilding of
inventories.
Modest upturn
in cap ital out
lays In late
1959
Increase at a ll
Up 20%. ttodal
le ve ls
was $47.7
($32.2 In 1958)
Indecision
about cap ital
outlays
Rise
-
2
-
GENERAL
FORECASTER AND DATE
StBMAHT
GIF
(# Ml.)
Surrey of Business Execu tives,
fction's Business, Dec. 1958
Majority expect continued vigorous
improveasnt through 1959» 93Î
thought money and credit market
-would have no effect on 1959 plans
Sertaxd Colm, C h ie f Econom ist, NPA
tooting Ahead. Dec. 1958
Probably will not reach full employ
ment level - would have to hit a
GNP of $505 for that
$1(68 - $488.5
by 4th Q
Conference Board Economic Forun
Higher level of activity In 2nd
half. Optimise tinged with reser
vations about year' 8 staying
power. Worried about emerging
inflationary psychology.
$464 in 2nd Q
($450 end of
1958) $478 In
4th
Avg.
$470-$475
(in 1958
prices)
Industrial
Production
Prices
(1947-49 - 100) (1947-49 - lOd
38$ expect to
raise prices;
59Ì not to
change
145 by June;
148 by Dec.
1959; less
gain in 2nd
half than GNP
Employment
(mil.)
50% expect to
raise es^loy. j
48jt not to
change. Avg.
gain 2 ]t
lot quite re
Stability consumer up 1 turn to full
point in each employment.
half. Whole (Unemployment
Unmplqy.
sale 19 1 point W
1 st half, about l6jt above
2 points in 2nd avg. in June
and about
normal in Dec.
*• George H ltch in g s, Economist,
Ford Motor Co.
b. Malcolm McNair, P ro f., Harvard
c. Bradford Sm ith, Econom ist,
U.S. Stee l
M iles Colean, Econom ist, BL5
nCB Business O utlook, 1959.
Dec. 195B
...—
ftrst national Bank o f Chicago,
^Surrey o f Bankers, WSJ 12/3/5S
Majority say conditions will show
Improvement over 2nd half of 1953
lobert Dockaon, Econo oist, U niv.
C a lifo rn ia . C h ro n icle 12/4/58
Several factors working against
increased prices despite expected
rise in production
$465 ($435
In.1958)
Standard & P o o r's I 959 Annual
rtttecast, Ote Outlook 12/8/58
Complete recovery & start of new
highs. "Golden Sixties” boom may
start. Upsurge shows great vigor.
$471 - up 8jt. Avg. about 146
Nay hit $480
- hit peak of
by end of 1959 152 before end
■0 general rise Sane as 1958
Has potential
Ho M g rise,
rather creeping of reaching
full employ
ment
Somewhat
greater gala
than in labor
force
CONSUMER
Personal
Consumption
($ bil.)
G0viK:z::r
BUSIHESS
Autos
(Sales)
(mil.)
Houses
(Starts)
(mil.)
Business
Outlays
($ bil.)
Steel
(Production)
(mll.net tons)
Profits
($ bil.)
Goverr.r-er.~v
Outlaws
($ bil.)
48jt expect
profits per $
of sales to
rise; 39$ no
change
85^ reached min.
stocks for sales
expected. 52]t to
expand facili
ties
$310-$324 by
4th Q
Stock accwulation *L-$3 in
4th Q. Capital
outlay $60»$62
in 4th
$96-$98by
4th Q
Up k~3Í> cor $10$E5î nondur.
$149 by 4th Q;
services up ÿf>
- $120 by 4th
Qj dur. up lOjl
- $40 by 4th Q
Higher but lag
ging. By 4th 4:
?l6-$17 for
constr., $25
for equip.,
$1.5 inventory
accisn., $20
res. constr.,
Total $63.5
State & local
hit $43.5 in
4th Q., Fed.
$54.5 - up
$1.5. Total
$98 in 4th Q
5.5-6 (tad.
Imports)»
T»5 (lnd.
0.5 laports)
Reduced rate
of increase.
Tending to
flatten out
1(85
05-UO
in 1958)
1 .2 (1*17 in
1958)
Bo sharply
sales of con
sumer goods
Optloiam
mixed with
caution
1958
All 3 cate
gories up; may
be big year
for cars &
appliances
Capital out
lays up $l-$2 ;
slow rise In
Inventories
State and
local iQ $3
Production
Up almost
at least 5*5
5.5*J *306
*390 in 1958) «P 3
Spending on
services & non
durables con
tinued gradual
rise. Durables
up
- sales
of cars 19
sharply. Avg.
$117, $147.5 *
$41.5 respec
tively.
Stock accumu
lation at $3
($5.4 decline
In 1958). Capi
tal outlsys up
- Increase as
year passes accent on
modernization
of equip.
Total 19 230
to $66 ($53.5
in 1958)
Total up T$i
Fed.up 6.7%
to $56 ($52.5
in 1958);
state & local
up 7 *6£ to
$42.5 ($39.5
in 1958)
-
3
-
G E H E B AL
FORECASTER AHD DATE
Journal of Commerce. 12/9/58
SUMART
GIP
(* bil.)
Profits' rebound may slacken; will
continue only I f Industrial produc
tion hits pre-recession level.
Industrial
Production
Prices
(1947-49 - 100) (1947-49 - 100)
fiaployaent
(mil.)
Uncertain it
will hit record
lk7 ln 1959.
May well avg.
140+
Annal Panel Discussion of
Flrat latlo n al Bank of Chicago
a. Joseph Block, Pres.
Inland Steel Co.
Rise steadily in 1st half and most
likely 2nd half
Increasing
b. Nark Cresap, Pres.
Weatlnghouse E le c tric Corp.
c. Charles KeU stadt, Pres.
Searr, Roebuck & Co.
Ugher level of activity in 1959.
Consuaer in good financial shape
to incur instalment debt to buy
iuro^les
Nay tun up
tatlook fo r Business. 12/9/58
Lionel S. Edle
Volune about sane as 1957; dollar
total higher than 1957 peak. 4
trend up both in dollars & voluae;
1st Q a little higher; next two
up aoderately from 1st; 4th Q
highest
0.8. Chaaber o f Coomerce Business
Outlook Panel; WSJ 12/12/58
Prospects favorable
ftialne*« M
Capital outlays vlll rise fairly
vigorously as recovery goes along
lo/n/ifi
d ty tlip A Trust Company
Aulnesa Bulletin. 1;>/l£/■;«
William Story, Pre«., Institute
°f Scrap iron * steel;
ftronlcla. 12/18/58
Degree of laprovaoant likely to
depend on behavior of iwmwasr
durables, Inventories, capital out
lays, residential building fc
Federal outlays
1959 «111 *bov luprnr— nt ovar
1958, but «111 not be spectacular
*462 (*437
in 1958) up 6fl) Incon
stant dollar
terms sane as
1957
144 (134 in
1958) - up 7*;
about same as
1957
<* 5*
Higher
5*
TllWjflID»111111
In early
1959 - 4.5
♦474 (1436
la 1958) up 8.7*
0]t—X0)b higher
than 1958's
134
CCHMdlty
prices up not
■or* than 1-50
Will rise
CONSUMER
Personal
Consumption
(* bll.)
B08IIIS3
Bouses
(Starts)
(all.)
Autos
(Sales)
(oil.)
Business
Outlays
(* bU.)
Steel
(Production)
(all.net tons)
Continuation of tittle evi
the high current dence that sub
rate Is haapered stantial stock
by tight aonay. rebuilding Is
lflBilPfntt
1st half a
record. Hoadurables
rise steadily*
Moderate gala
la durables
rabull&log; mmm 19*
turn In capital
outlays
Increase
ll
¿ovaruaent
(XitlaTS
(* bll.)
196 (*92 la
1958) - up 14.
Q trod iv«ard
163 (*54 in
1958) - up 17%.
Capital outlays
rise In 2nd
half. Stock
*303 (*291 la
1958) - up
Profits
(* bU.)
Prospects are
less reassurIsf thin hsvt
bean during
past 6 aonths
Seas stock
1st half 55-58;
accianilatloo; year 110-116
constr. rise
(85 in 1958)
as 1959
progresses
Acorn,of stock
will start In
1st half. Slow
rise In capital
Marked gain production
up 30#
OOVHOMDT
^
factor
5.5 produced
U S (85 la
1958)
Nay taper off
In 2nd half
das to tight
Capital out
lays gttn la
njr
i
Household dur
ables up - hut
hatt building
a factor. Auto
gain. *310
(*290 In 1958)
Off so mch is
1958 that sub
stantial re
bound likely.
Output vlthln
5$, either «as
of 5.7
tlfcaly <(0 gBlH*
5.5 produced
Qain In starts
Dollar Is*
creases partly
das to greater
costs 1.2
*f8*
110
Stock 1
latlon *4
(fl in 1958)
(-♦5.5 la 1958)
Capital outlays.
lecarny pace
slower than la
19^9 or 1953.
Accent on
aodemlcatlaa.
Riant h equip.
$32 (*30 la
1958)
U5
federal up at
least 7%. Total
199.2 (*92 in
1958)
i
-
4
-
GENERAL
SOMARI
GBP
(* b il.)
ttieraon Schmidt, Director o f Research Expansion v i l i continue, but possibly
U.S. Chamber o f Commerce;
at a reduced rate
Chronicle. 12/18/58
Rise *25 to
*470-*480;
*500 in i960
(1450 In 4th
Q 1958)
Up
Gordon McKinley, D ir. o f Economics
4 Investment Research, Prudential
Insurance Co.
Chronicle. 12/18/58
Strong consumer buying and Increased
general a c tiv ity . By end, near
capacity operations-
Over *470;
up *34
Increased
substantially
national Securities & Research
Corp.; J/C 12/24/58
Further substantial gains in basic
economic forces
*473
144 (134 In
1958)
Eiuner Slich te r;
Chronicle. 12/2S/*58
GHP will be above 1958 even If
capital spending remains unchanged
Avg. *468;
hit *480 by
4th Q
Assuming a strong upturn
*470
^JW tnent of Commerce's Survey
of Industries; WSJ 12/26/58
Week. l?/?7/5fl
Business
Outlays
(* bil.)
J . A. Livingston’s Survey o f
*°°oanistg; B u lle tin 12/28/58
Slow, steady rise
*460 by Arne;
*471 by D#c.
(*453 In 4th Q
1958)
S fe j 12/29/58
GBP rise of $10 bll. In each of
1st two 4s; then flatten out
Up 6* - *400
by year's end
BUSINESS
OOVOBMETiT
Steel
(Production)
fmll.net tans]
Government
Outlays
(* bil.)
Scne stock re
building; un
evenness la
constr* - seas
fields up,
others down;
no strong
expansion
tfe - but
uneven
Of *6-*7
Up 1.6. Unem
ployment at
normal level
by 2nd half
1.2 (includ
ing 50.000
public)
Outlays up
*1 bil.
Capital out
lays up *2;
constr up la
2nd half; equip,
throughout year.
Inventory ace»»
mulatlon - *2.5»
aostly retail
Marked
laproveMnt
Federal up
$3.5; atate
ftlocal up
*4. fetal
hit *UX>
Up *16 to
*307; trend
toward
durables
After tax,
*21.5 - up
20% trm *17.8
la 1958
Unemployment
at adj. rate
of 4.0% In
Dec.
Ut to *306
XJt *5.0 t*m
*92 In 1958.
n t *97
Modest rise in
business lavest. - *2;
sow stock accaBilation - *3;
total outlays
*65*5
Ttaahle *48
(*36 la 1958)
147
145 by June;
149 by Dec.
(■or. 141)
Profits
(* bll.)
1.15-1.2
XO5-UO
Production up
30% - 5.5 %
(4.2 la 1558)
*485 bjr 4th Q;
*463 in 1st 4
Hbuses
(Starts)
(mil.)
Unemployment Good financial 5.5 4.3 in
not likely to condition to
1958
drop to pre- b«y durables
recession
levels
Recovery will continue Into 1959
at a good pace
Gradually Increasing activity;
no major relapse
f cflMSS
Steady in
first half
Bnployment
(m il.)
Personal
Consumption
(* b il.)
i l l
FORECASTER AND DATE
CONSUMER
In d u strial
Production
Prices
(1947-49 - 100) (1947-49 - 100)
Creep hi¿tor
Ttwpl nymit
above 3*8)1
Whole. - 119.5
by Jane; 120*1
by Dec* Cons.124.2 by Jtanej
124.9 by S sc.
tfcemplaynent:
3*6 In A n ;
3*5 in Dec.
Btld do« by
pirodagtlvHqr
Thwntflnysnt
stay at 4*1
la winter;
then drop to
2.5
*5 each far
IMI tight
■mar pinch
la lut half
Upturn la capi
tal outljgrs
not strongly
fait until
■id-1959
I.I9 la Asm;
1U.5 la See.
Cspltal out
lays *32.25 by
Jte e ; *33.75 by
Sec. (*29.? la
4th 4 1958)
Stocks slowly
19. Capital
ootlqrs up $L
to *331
C*fortahle
lnereaae over
1958
-
5
-
G1I1IAI
FORECASTER ADD DATE
StMMRZ
GXP
(* M l.)
Itartun«. January 1959
Economy entering new high ground hit *500 bll. In i960. 1959 "best
year ever". Face of advance is 2nd
half about half that of preceding
12 months.
**>75 " up 9%
D.8. fcw* «. World Report, 1/2/59
Good times back; by late 1959 activ
ity will be considerably higher;
1st Q - better than any time of 1958;
2nd Q - little higher than 1st - in
ventory accumulation; 3rd Q - seme
slowing; 4th q - new highs - capital
outlays up
*1*80 by year's Record 150 is
end
4th Q (140 in
4th of 1958)
American Econaaic Association
Convention (Consensus according
to Business Week)
Recovery carried through 1st half by
stock accumulations and government
spending. Mill it be enough to re
vive capital spending which is
necessary to raise econcny fclghert
*470 or higher
a. Ezra Solomon, University of
Chicago; BW 1/3/5S
Avg. - *473.
*1(80 in 4th q
UP 12*
Consigner rise
less than 2%
Prosperity. Good year, but no
boom if auto sales drag
*460 in 1st Q; UP to 145 or
*466 is 2nd q* 146 and cell
*473 in 3rd <k ing there
iltfio in 4th q.
(*453 in 4th q
1958)
Consumer won't
advance much
Consensus of Economistsj
WSJ 1/6/59
Improve over 1958; business dotted
with soft spots: unemployment,
housing starts, capital spending,
and fans income
*463
little rise
la consmer
Guaranty Trust Co.;
The Guaranty Survey. Jan. 1959
Outlook for continuing gains
generally promising. Rise may not
be as spectacular as in the 1955
recovery, but this could be a
blessing, since 1955 boom produced
troublesome distortions
end could be
naming at *475
*480
Autos
(Sales)
(mil.)
ut.
Up. Bit 66.6
*310 by 4th 4
by end (64.7
(*296.5 sow);
end 1958)
durables up
Unemployment
3.5 «nd 1959
(3.9 end 1958)
'full by
year's end
147
Personal
Consumption
(* bll.)
Bmloyment
(mil.)
Little change
J. A. Livingston, Financial Editor;
Bulletin. 1/5/59
BUSI1BS8
COHSUKBR
Industrial
Production
Bdees
(1947-49 - 100) (1947-49 - 100)
Output up 5.5 (4.2 in
1958), for
eign sales
0.5
Up smartly;
durables up
about *6
Bouses
(Starts)
(ml1 .)
Business
Outlays
(* Ml.)
Down t r m re
cent high
rates (1.33
la Bov.)
Inventory and
capital out
lays up
1.2 (1.2 in
1958)
*70.2 by 4th q 112 I85.3in
(*62.1 now)
1958
tfc
Stock acctwlation of *3
(-*6 in 1958)
Bnplayment up. Rise
Urmplojnnent
won't decline
as rapidly as
after pre
vious two re
cessions; hit
5 in June
Drag an
econcny in
1959
Strang in
1st half;
may decline
in 2nd
Stock rebuild
ing; capital
outlays won't
rise
Unemployment
.decline, but
still Mgher
than Immedi
ately before
recession
5-5.25 proflUTilH
Bowsing
hampered tqr
t ij iit mocmgr
Capital out
lays below
pre-recession
levels
tktcertaiirty
as to in
crease
levellng-oot
will occur
early in 1959
Capital out
lays reaming
several bll.
* above
present rata
by end of 195£
Stock acwulatlon of saw»
end. Ml. * tqr
and of 1959
Vtartbar risej
*i»-*a.3
thsxx
present rate
by end of
year
Steel
(Production)
fmU.net toaa)
Oovenmwnt
(kitlays
(* Ml.)
Profits
(* Ml.)
if t c r t tx •
*25.9 by 4th q
(*21.6 now)
Avg. *24.2;
1958 - *17.9
*99 »or 4th q
(*94.7 now)
*99 (*92 in
1958)
Better
Vf
State ft local
*3 MgNer than
present rata
by and of 1959*
Ted. alao above
present rate
Bersey Rlley, Head BIS;
W, Dee. 27, 1958
Expects wholesale prices to rise 1 - 2
per cent in 1959* Consumer prices to
remain steady
ccw raucT i oB
P. W. Dodge Corps
WSJ. Hov. 17, 1958
Contract awards up 3$ to $35.6 billion.
All major groups increasing. Tight
money restraint on housing starts
Cowerce Sttabor Dept.,
WSJ. Bov. 17, 1958
Record in physical and dollar terms.
Total up 7% to $52.3 billion. Mortgage
money to be tight.
Associated General Contractors;
Realtors Headlines. Dec. 29, 1958
Expect construction to rise 6 per cent
to *72 billion
FBBSCBM. CCBSUMPTICH
Survey of Consumer Attitudes,
University of Michigan;
P.S. Hews. Dec. 12, 1958
Consumers not in mood to go on spending
spree. Recovery in durables slower
than in 195^-1955
AUTOMOBILE SALES
Stahl Bdmonda, Economist, Ford Motor Co.;
B), Bov. 8 , 1958
Automobile sales of 5.5 million
Hans Brems, Prof., University of Illinois;
W, Bov. 8 , 1958
Automobile sales of 6 million or more
BODSnC STARTS
Albert Cole, Administrator, Bousing
and Borne finance Agency;
W8J, Oct. 14, 1958
Same number of
starts as In
1958 - 1.12 million. Does not expect
tight money to stop 1959 from being
a very good year
Coonerce * Labor Depts;
WSJ. Bov. 17, 1958
Housing starts to be 1.2 million com
pared with 1.17 million in 1958
Will taper off after early months
because of tight money
Walter Graves, Pres., BARKB;
House k Bom. Dee. 1958
Starts win equal or exceed 1958's
1.12 million
Joseph Motoka, Pres., U.S.S.I&. League;
Bouse t Borne. Dec. 1958
Between 1.1 - 1.2 minion
Arthur Welmer, Economist, U.S.S.4L. League;
Bouse fc Home. Dee. 1958
About 1.2 million
Walter C. Belsoa, Pres., Mortgage Bankers
Aaaa. of America;
American Banker. Dee. 24, 1958
Predieta that starts will total
1.2 million
Batlooal Aaaa. of Borne Builders1 Survey;
0.5. lews. Dee. 26, 1958
Bxpect more starts than in 1958
Associated General Contractors;
Baaltors Headlines. Dee. 29, 1958
8tarts will total at least
1.19 million
fla w
imp
m u b b h
gpam n om
McGraw-Hill Survey of Plant ft Equipment
Spending Plans;
W , «or. 8, 1958
Outlays up 1% to $33 billion. Growing
eaphasls an BodernizatloQ
SBC and Cooaerce Dept. Survey of Capital
expenditures;
WSJ, Dee. 10, 1938
Capital outlays in first quarter $30.5
billion coopered with $29.9 billion
In fourth quarter of 1958
{BUL
Steelnen's Consensus;
BW, Hör. 1, 1958
Up 30% to 110 •1111m tons; 75Jt of
capacity. First half best
Max Howell, V.P., American Iran ft
Steel Institute;
WSJ. Dec. 22, I958
A steel eoatback year, but prospects
■erred soaswhat by strike possibility
Production to be 100 - 110 alllioB
net tons compared with 85 alllion
in 1958
R.L. Gray, Pres., Araeo Steel;
WSJ. Dec. 30, 1958
Expects steel production in 1959 *111
total 108 allllon net tons compared
with 85 allllon In 195Ô
Arthur Hewer, Pres., Bethlehem Steel;
WSJ. Jan. 2, 1959
Bstlaates 1959 steel production at
110 Billion tons (Puts 1950 tonnage
at 85 allllon)
John leudoerfer, Chairman of Board,
Wheeling Steel;
WgJ, Jan. 2, 1959
Steel output in first half between
55 - 58 aillion net tons. Tear output
will hit U O - lié aillion tons.
Placed 1958 production at 8k - 85
aillica tons
ccBPOum PRcrns
Federal K*serre Economists;
W, Jan. 3, 1959
Lewis 1. ScheUbach, Standard ft Poor's;
W, Jan. 3, 1959
Think that profits win soar to $50 billion
la 1959
Thinks profits Increase will probably be
Halted to less than $9 billion - or a
total of $t5 billion, at best
@FedFRASER