U.S. ECONOMY EXPANDING

Press, Volume XCI, Issue 27695, 27 June 1955, Page 13

U.S. ECONOMY EXPANDING

1955 “BIGGEST YEAR” Even without being spurred by war or inflation, which have a '£°? h p e an 1 ' a e s d t maior business upswings m the last two decades, the United States economy in 1Q55 aooears to be headed for its IS? ve£-states the First National City Bank o« New York in its monthly, review of business and economic conditions. The gains of the last nine months have been real and not illusory, says the re view, for both wholesale and consumer prices on the average have maintained the same remarkable stability that they did during the downturn. Nor do the gains represent inventory accumulation for there has been little to date except in automobile dealers stocks. hroakAs business has turned in record-break-ing performances, a sense of confidence and prosperity has grown. Inispitei of taU of “soft spots, misgivings about tne oec nnd half of the year nave diminished. Probably it is a good thing that they have not disappeared entirely. With business moving into new f 11 ?* 1 ground, it is always difficult to avoid crossing the nebulous line between conhripnee and over-confidence, between largescale spending by business and consumers and over-expansion of credit, andl be tween a sound expansion and a shortliJld boom. The likelihood that the pace of expansion will slow m the second half of the year does much to preserve the caution which moderates over-optimism and which has served the economy so weil of the second half of 1955 and beyond have paid a good deal of attention to so-called soft spots m tne economy. These include declining farm incomes, the coming downturn in automobile sales and possibly also in housing, the rapid expansion of consumer debt ana failure of employment to keep pace wica

production. All are legitimate causes of concern, providing sound reasons for expecting moderation of the upswing, ana it is good to keep them in mind to offset the optimism generated by other aspects of the economy. Yet at the moment none of these weaknesses appears sufficiently strong to cast gloom over the prospects for the second half of the year.