STATE OF BUSINESS: The Next Six Months

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Across the nation last week the phrase to describe the economy at midyear was that it was pretty fair but had "no bounce." If sales were good, as they were in most industries, businessmen worried that they were not better. If they were poor, as they were in some industries, when would they improve? The economic experts who were in overoptimistic agreement last January that the economy would soar in 1960. were now guardedly optimistic about the next six months, but were no longer talking of the "soaring' sixties."

At a meeting of the U.S. Chamber of ment Bankers Association, warned that "signs of an imminent recession are grow ing all the time and should not be ignored. There is no way to tell whether it will come in the last quarter of this year or the first quarter of next year," because of slackening business activity and the de cline in inventory accumulation. He was promptly challenged by Dr. Emerson P.

Schmidt, the Chamber of Commerce's di rector of economic research. Said Schmidt: "In spite of some soft spots, the U.S.

economy is operating at new high levels.

The prospects for further improvement are good." Moving Sideways. In its July monthly letter, the First National City Bank of New York cautiously clouded its crystal ball, noted that "the good and bad ele ments in the business news have continued roughly in balance in recent weeks and the overall measure of activity has moved broadly sideways." In San Fran cisco, James Black, chairman of Pacific Gas & Electric, the West Coast's largest public utility, took a serious view of the economy's uncertainty, said it spurred the kind of "depression-maybe" talk that was last heard at the low point of the 1958 recession. Said Black: "I don't know anybody who is smart enough to say what's going on." Consumers, too, have their doubts about the pace of the economy, and some mer chants report a buyers' tendency to put off deferable "big-ticket" purchases— furniture, appliances, etc. The University of Michigan's Survey Research Center this week reported "a marked decline in con sumer optimism" in the past two months.

Basically, what worries most businessmen is that 1960 has not lived up to their expectations. Says Stanley Marcus, president of Dallas' Nieman-Marcus: "We all thought the golden '60s were to be a soar ing bird, not a land-based animal. Busi ness is still good, about the same as last year, which was good, but there is disap pointment because things are not as good as they were supposed to be." Disappointing Steel. The reasons for the disappointment in the economy's performance so far this year seem clear. The post-steel strike inventory buildup that began in the final months of 1959 was expected to last well into the middle of 1960. with the industry operating at near capacity. Instead, previous inventories turned out not to be as low as expected.