THE RECOVERY: Hearing the Sweet Ring of Prosperity

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Of all the bright sounds of spring this year, few are more reassuring to businessmen and election-minded politicians than the persistent jangle of the nation's cash registers. From Maine to Southern California, Americans seem to have shucked their recession-bred caution and set off on a buying binge. The spending spree is swelling sales of almost everything from cars and clothing to houses and appliances, and it has become the biggest single booster behind the rapidly recovering U.S. economy.

Some signs of a leveling off in the rocketing rise in demand are now beginning to appear, but many experts expect the buying pace to remain brisk and salutary in the months ahead. A temporary easing of the sales upturn sometime soon would scarcely be unexpected. Says Paul J. Markowski, chief economist of Argus Research Corp.: "Consumers are merely pausing to reassess the situation. We had a big rush of spending in March, so a slowdown is not surprising."

How long such a slowdown might last seems to depend on what happens to prices. Says Sidney Jones, the Treasury Department's top economist: "The heart of consumer spending is confidence that inflation is under control, and the key to keeping people buying is to keep prices at a reasonable level." Right now, after slowing to a mild 2.9% early in the year, inflation is once again moving up slightly: in April the rate climbed to 4.9%, due largely to higher costs for food and fuel. As a result, several polls, including one by the Conference Board, a business-sponsored research concern, and another by Sindlinger & Co., a private forecast firm, show some recent slippage in "consumer confidence"—that is, Americans' willingness to spend savings or go into debt to buy goods.

Still, most economists forecast that inflation by year's end will be running at about 5% to 6%. Such a rate would be modest by the standards of recent years arid would not greatly dampen consumer optimism, especially if the current expansion in personal income continues to put more money in buyers' pockets. Already the rise in consumer installment credit for the first three months of the year ($3.9 billion) tops the increase for all of 1975 ($3.7 billion).

Auto Sales. The sweetest figures so far this year have been in retail sales. In April they climbed 14% above a year earlier, and now they are about 10% ahead of 1975. Pacing the boom is the dramatic pickup in auto sales, which are now racing at an annual rate of 9.2 million and show every sign of outdistancing even the most optimistic projections, to hit 10.6 million for the year, v. 8.2 million in 1975. Last week Detroit reported that auto sales for the ten days ending May 20 were up an impressive 53% over last year, to 310,800 cars.