Business: Business, Dec. 31, 1956

BY virtually every economic measure, 1956 was the greatest year in history. Yet many Americans hardly seemed to notice the amazing performance of the mightiest economy mankind had ever known. Just as the nation was once resigned to a depression psychology, the U.S. was now in the heady grip of a prosperity psychology. The great American boom was almost a standard part of U.S. life, no more surprising than the automakers' ads plugging the "two-car family''—a status more and more Americans achieved in 1956.

Only when measured against the production and consumption of the rest of the world was the size of the boom clearly apparent. In 1956, with barely 6½& of the world's population, the U.S. produced—and rapidly consumed—60% of the world's goods. The U.S. spent more on highways alone than the entire value of Norway's economy; its new homes were worth more than the entire economy of Spain, its new cars more than the combined economies of Mexico, Denmark and Australia. Surveying their bounty, Americans could say with President Thomas Coulter of Chicago's Association of Commerce and Industry: "We've never had it so good."

With a record 65 million employed, the gross national product rose 6% to an alltime high of $412 billion, better by $9 billion than most seers had forecast. Al most every American shared in the unparalleled prosperity. Unemployment was down to 2,463,000 in November, and workers were eagerly baited, cajoled and lured into jobs by ads and employment agencies from coast to coast. The shortage was not only of brawn, but also of brain. Some years ago Planemaker Boeing, for example, needed one engineer for every 15 employees. By this year the ratio was down to one engineer for every ten—and Boeing was desperately searching for more engineers.

The Big Payoff. Part of the cost the U.S. paid for such prosperity was rising prices. The cost of living, stable for three years, edged up 2.4% to 117.8 on the 1947-49 index. Some of the rise was due to higher food prices, which meant that the U.S. farmer, who often complains that he has been the forgotten man of the boom, was finally coming out of his slump. Thanks to increased consumption and an $8.5 billion Government investment in price-support and soil-bank aid, farm income showed a 4% rise, the first upswing in four years. Yet few consumers felt a real pinch. Workers' paychecks jumped 4% for the year, twice the increase in their living expenses. Everywhere, Americans had more money to spend ($325 billion) and spent more of it ($265 billion) than ever before on a shopping list that included 6,700,000 TV sets, 12,500,000 radios, 4,500,000 washing machines, 1,640,000 home dryers. Though sales of durable goods slipped some 5%, consumers bought so much more in soft goods (food, clothes, etc.) that overall retail sales jumped 2% for the year, including 1,102,000,000 tranquilizing pills (six pills for every man, woman and child in the U.S.) for those who worried about paying their bills.