ROLLING ALONG RECOVERY ROAD

The economy continues to pick up speed with surprising swiftness. The Federal Reserve Board reported last week that U.S. industrial production, led by sharp increases in the output of steel and autos, surged 1.8% in July, the eighth monthly increase in a row. Convinced that consumers will continue spending freely, companies are rushing to rebuild their inventories. And with good reason: retail sales in July increased 10.3% from the same month a year ago. Sales of domestically produced autos jumped 38.5%, while home furnishings, including furniture and appliances, were up 8.5%.

Many economists now forecast that overall growth in the gross national product from July 1 to Sept. 30, after adjustment for inflation, will be in the 7% to 8% range.

That would approach the stunning 9.2% annual rate recorded in the second quarter. Says Walter Heller, who served as President Kennedy's chief economic adviser: "Growth will be brisk."

A few .signs, however, point to a cooling off by year's end. The increase of about 1.5 percentage points in mortgage rates over the past few months, for example, has slowed the pickup in construction. The Commerce Department reported last week that new housing starts in July, at an annual rate of 1,741,000 units, were down .6% from June. Otto Eckstein, a Harvard economics professor, predicts that the housing slowdown will help reduce G.N.P. growth in the fourth quarter to a 5% annual rate. For an economy in which inflation remains a constant threat, that may be a better cruising speed than the current pell-mell pace. This file is automatically generated by a robot program, so viewer discretion is required.