Past the $400 Billion Mark

The U.S. boom reached a new peak in the second quarter as the gross national product soared to a record annual rate of $408.5 billion. Making that heady estimate last week, the President's Council of Economic Advisers noted a rise of $21 billion over the same period last year and $5.1 billion more than the booming first-quarter rate.

Consumer spending in the second quarter rose to an annual rate of $264.3 billion, up $12.5 billion from last year's equivalent period. In June, chain-store and mail-order sales climbed 13.8% over June of 1955. Department-store sales for the second week in July jumped 2% over the same week last year, and store buyers predicted that autumn sales will increase slightly. Yet, despite the heavy spending, the Department of Commerce reported that personal savings rose to $5 billion in the first three months of 1956, the highest since the Korean war and $1.7 billion over the last quarter of 1955.

Amid the outpouring of record-breaking figures, there was a lurking worry over the three-week-old strike of 650,000 steelworkers. Another 125,000 workers have already been laid off by coal mines, railroads, trucking and steel-fabricating industries. Ahead loomed another strike. The 30,000 aluminum workers who are represented by the United Steel Workers will walk out when their contracts expire July 31 if a new contract is not settled. Little hope was held for a new aluminum agreement until steel makes peace.

Prospects for a quick end to the walkout seemed dim, though Government-inspired negotiations were expected to continue this week in Manhattan. Despite the deadlock, the National Industrial Conference Board found one bright note: the settlement, when it comes, should produce a new fillip to the economy. The board recalled that the eight-week steel strike of 1952 "produced a strong, but relatively short-lived, boom" as manufacturers built up their inventories, and a strike of similar or less length in 1956 "could well produce the same results again. However unfortunate a steel strike may be on other grounds, most analysts agree that it would materially improve the outlook for business activity late in the second half and early in 1957."

This file is automatically generated by a robot program, so reader's discretion is required.