STATE OF BUSINESS: Previewing 1960

STATE OF BUSINESS Previewing 1960 How will business be in 1960? From gatherings of economists and businessmen last week came a remarkably unanimous answer: more boom. Some specifics:

Gross national product will pass a rate of $500 billion early in the year and probably hit $525 billion before 1960 ends. It should reach $700 billion by 1970, predicted Emerson P. Schmidt, research director for the U.S. Chamber of Commerce.

Plant expansion will bound back to the 1957 record rate of $37.8 billion and could show a “startling” 30% jump to a rate of $43 billion by the end of the year, said William F. Butler, vice president of the Chase Manhattan Bank.

Automobile sales will rise to 7,000,000 from 6,000,000 this year, in line with the rising U.S. population and a 6% increase in disposable personal income, said Louis J. Paradise, chief statistician for the U.S. Department of Commerce. But car production will be held down for several months because of the steel strike.

New housing starts will ease off to 1,200,000 from 1,350,000 this year, said Paradiso, because of tight money. But the demand for appliances and furniture will continue to go up. Instead of buying a new house, more consumers will fix up the present one, leading to an increase in remodeling expenditures.

The cost of living will rise only slightly, probably 1½% on the BLS index, unless a steel settlement touches off an inflationary round of price increases.

Money will remain tight as industry and business bid for funds, but prospects for a balanced budget or only a small deficit will reduce the competition of the U.S. Treasury for new funds on the money market.

Looking at the aftermath of the steel strike, some economists last week were swinging around to the opinion that for all the harm it did the economy, it also may have done some long-range good. Along with others. Chamber of Commerce’s Schmidt pointed out that the postwar economy has averaged a recession, or at least a leveling in growth, every 30 months. But the steel strike was itself a recession; therefore, the normal setback that might have been expected has been delayed, and business should be good well into 1961.