The Morning After

(7 of 9)

Housing has had its recession and should lead the overall construction industry to a record $33.8 billion worth of construction contracts in 1958. After two years of slipping sales, builders see a 6% increase in non-farm housing starts to 1,075,000 this year. FHA applications for the first two months of the year are 70% ahead of last year; builders in Los Angeles, Seattle, Boston and many other cities report housing starts 10% to 15% ahead of last year. Yet, like every other merchandiser, builders must hustle hard to sell, put more value into their product to tempt the careful, money-conscious U.S. public. One Los Angeles developer, tracing the course of house-hunting young couples, was astounded to discover that the average couple looked over ten housing developments on a Sunday afternoon; one hard-to-please pair even squeezed in 18 stops searching for just the right house.

Rockets for Recovery. A third strong counter-recession force is Government spending. State and local governments will add another $3 billion to their annual outlay in fiscal 1959, bringing it to a record $43 billion for payrolls, new schools, water plants, etc. The federal road-building program is also proceeding on schedule, so far as the letting of contracts ($3.6 billion to date) is concerned, although actual construction is lagging because of the weather. Finally, defense spending is in the midst of a rocketing, post-Sputnik rise. After dropping to $7.9 billion in the last six months of 1957, defense spending for "hard goods" (tanks, planes, missiles, etc.) will almost double to $13.4 billion in the first six months of 1958. The letting of contracts for future production has also been nearly doubled from what it was in the last six months of '57. In addition, the Administration wants Congress to vote $2.7 billion more for the remainder of fiscal 1958 and fiscal 1959. Some economists contend that new defense spending will not have much effect on the economy, since most of it is for missiles, which do not require huge amounts of materials. One answer to this can be found in the Aerojet-General Corp., which makes rocket engines. It has already expanded its Folsom plant, near Sacramento, from 3,000 to 7,000 men, and now wants another 1,000 men by June. Effect on the Sacramento area of these 1,000 new production workers, plus the service workers that they will draw in: a population increase of 2,960 and 1,120 more households; personal-income increase of $5,900,000; a total of $2,700,000 more in bank deposits; a passenger-car increase of 1,070; a total employment increase of 1,740; a total of $3,600,000 more retail sales annually; and the establishment of 40 more retail businesses.

1. Why McCain Picked Palin
2. The Palin Pick: Bold or Disastrous?
3. McCain's Surprise Pick: Sarah Palin
4. Klein: Obama's Speech 'Very Tough'
5. McCain's Prickly TIME Interview
6. GM Recalling 944,000 Vehicles
7. Will Women Vote for Palin?
8. The Web's Word: Obama Is Not the Antichrist
9. Russia 'to Absorb' South Ossetia
10. Narrowing World Health Disparities