New & Exuberant

Friday, May. 31, 1963
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Just one year to the week after the stock market shuddered through its worst crash since 1929, new records are being set by that intricate, delicate and unpredictable entity known as the U.S. economy. The spectators are surprised, the analyzers are rewriting their textbooks, and even the captains of U.S. business are somewhat amazed. The exasperating, exuberant 1963 economy, whose performance had for months been dismissed as puny and inadequate, is off and running in what the experts now believe will be the longest period of prosperity since the Korean war.

The U.S. economy was shifted into high gear by a combination of concurring factors: a buying splurge by the U.S. public, a more favorable presidential attitude toward business, the use of traditional but effective tools by Government, and the increasing willingness of industry's decision makers to spend, lend, build, modernize and expand. These factors came together at a time when the American people and Government realized that the economy was not living up to its potential—and needed a push to get it moving. Once all pushed together, the economy willingly took off.

The three pistons that propel the economy—consumer spending, businessmen's spending and Government spending—are all pumping once more in unison. Production, profits and purchasing power are running at records. The reports from autos, steel and retail sales are bullish. On Wall Street the stock market has come back to within 15 points of its all-time 1961 high of 734.91. The business pickup has been greeted by every name, from the grudging "seasonal upswing" to the barely restrained "boomlet" now used in an advertisement by staid Standard & Poor's. The economy's performance has not yet earned the title of boom—and may never—but no one is willing to minimize how far and how fast it will go.

Accent on Optimism. That depends, to a considerable extent, on the prime movers of private business, whose massive corporations have been called "the dominant nongovernmental institutions of American life." The men at the top judge the state of the economy with a mixture of facts and instinct. Whenever they meet —whether over candlelit dining tables in the White House or in clubs from San Francisco's Pacific Union to Manhattan's Links—they are constantly poking and prodding the U.S. body economic and creating the delicate consensus known as business mood. What is their mood now?

Having been fooled once, many of them take refuge in the safety of "cautious optimism"—but the accent is on optimism. William Allan Patterson. 63, the breezy former banker who heads United Air Lines, feels "a great weight lifting from my shoulders" as a result of the economy's pickup. Metropolitan Life Insurance President Gilbert Fitzhugh, 53, who puts in an 80-hour week investing the insurance savings of 44 million Americans and Canadians, thinks that nowadays "individual businessmen are more optimistic than the economists." John F. Gordon, 63, an Annapolis-trained engineer who climbed the corporate stairs to the presidency of General Motors, sees "no reason to register anything but optimism."