ANOTHER RECESSION?: When & If, It Should Be Mild & Brief

WITH the boom still picking up speed, most U.S. economists have stopped worrying about the present, started looking into the future to answer a prime question: When will the U.S. have another recession? They have little doubt that a slowdown will come. "One of the outstanding facts of the postwar economy is the re-emergence of the classic business cycle," says Presidential Economic Adviser Don Paarlberg. Other economists throughout the land are in surprising agreement that business will boom into 1960, slump somewhat in 1961.

They based their forecast on the fact that each postwar cycle has had two or three years of expansion, followed by one or two years of contraction. The current boom got under way 17 months ago, and the key indicators are cycling ahead of schedule. Manufacturers' new orders snapped back to pre-slump peaks in 13 months v. 17 months in the 1953 slump, 16 months in the 1948 slowdown; personal income recovered peak levels in 14 months v. 16 months in the other two postwar recessions. Last week the Commerce Department announced that spending for new plant and equipment will hit an annual clip of $35.4 billion in the fourth quarter (against a 1957 peak rate of $38 billion and a 1958 slump low of $30 billion); many crystal-bailers see a pace close to $40 billion in 1960. "Here's what will happen next," says Vice President Russell H. Metzner of Cleveland's Central National Bank. "The cost of living will rise. Hard goods will be immediately affected because a bigger share of consumer spending will go to the cost-of-living items [mostly soft goods]. And then we will have a drastic reduction in inventories and capital expenditures. I expect to see the downturn in late 1960 or early 1961." -

Economists worry that businessmen tend to "bunch up" their investments, overspend for capital goods and inventories in good times. "The up-and-down cycle exists simply because businessmen do not believe it exists," says a top Washington economist. "They base capital-spending decisions on a straight-line projection. Because business has been good in recent months, they figure it will never slack off."

On the other hand, some economists are suspicious of such pat theories. They argue that the economic future is not necessarily a precise reflection of the past, that steps have already been taken to keep expansion from getting out of hand. "One way to moderate a recession," says Chase

Manhattan Bank Economist William Butler, "is to moderate the boom."