Close to the Bottom?

"My own feeling," said the President of the U.S. at his press conference, "is that we are going through the worst of it right now." Many signs, he told the newsmen last week, indicated that the "bottom" of the recession "is certainly close, or possibly even now reached." Sticking to the position he has taken all along, the President said that he would recommend tax cuts if they seemed "desirable," but that, with federal spending headed upward, "this is not something to do lightly."

A few days later the Labor Department backed up the President's hope that the economy has just about stopped slipping. New claims for unemployment compensation, the department reported, edged downward for the second week in a row, reaching a 1958 low of 404,500 in the third week of March. Another hopeful sign was an upturn in machine-tool orders, considered an important economic indicator. And one major segment of the economy was enjoying a springtime bloom of prosperity: the Agriculture Department announced that farm prices rose 4% from February to March, with livestock, fruit, potatoes and eggs leading the way. It was the third consecutive monthly rise, put farm prices 10% above the year-ago level.

But there were bearish reports, too. The Labor Department announced that in mid-March nearly half of the U.S.'s major employment areas had a "substantial labor surplus," meaning 6% or more of the labor force out of work. And auto sales were creeping along at a rate of 3,500,000 a year, as against 1957 sales of nearly 6,000,000.

Principally, the President's optimism was based on his hope that the economy would soon be feeling the impact of wide-ranging Government antirecession measures. Last week he asked Congress to authorize immediate expenditure of half the funds requested in his 1959 budget for civilian agency supplies and equipment, e.g., desks, paper clips. Promptly okayed by the House Appropriations Committee, the measure will enable the Administration to pay out or commit some $840 million that otherwise would not be touchable until after midyear.

With the exception of making credit easier, the Administration's antirecession measures have principally been couched in terms of plans of things to come, and will probably not be in full swing until the end of 1958. Behind the plans lie the implicit promise that the policymakers do not intend to let things get worse. But behind the promise lies the persistent hope of the President's economic advisers --backed up, according to persistent report, by the long-distance voice of ex-Treasury Secretary George Humphrey--that the economy is really healthier than it looks and should begin to get well on its own.

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