STATE OF BUSINESS: Solid Underpinning

"This confirms the solid underpinning of purchasing power in the economy. It is a darned good sign." So this week a top Government economist welcomed the news that personal income in March rose by $500 million, despite bad weather, to a record high of $393.5 billion. There were signs that the consumer is using his record income to bolster the economy.

Autos continued to sell well (see Autos). Housing starts in March showed up better than expected. Said U.S. Housing Administrator Norman Mason: "This indicates that the upturn in housing has begun. Despite the severe weather which made March one of the worst building months in a long time, home building has increased to a normal rate." The estimate is still for 1,115,000 starts in 1960—by no means a record, but not bad. Department store sales for the second week in April set an Easter season record. They rose 18% over the same week in 1959.

One item of darkening news was the March rate of industrial production. It dropped a point on the 1947-49 index to 165, and a point on the Federal Reserve Board's new index, from 110 to 109. But against this could be set another indicator suggesting a pickup in business. Reversing a downward spiral that started in early March, the average interest rate on the Treasury's issue of $1.1 billion in 91-day bills jumped by nearly a point to 3.622%, indicating that money is once again tightening up as business rolls forward.