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On the Ball. This enormous outpouring was due partly to the fact that more people were working; the employment peak in 1950 was 62,367,000—750,000 more than the previous high in 1948. But a bigger reason was the fact that almost everybody worked more efficiently. Example: about 15% more workers in the auto industry turned out 23% more cars. And the nation's gross national product (total of all goods and services) rose to $280 billion, up $24.4 billion from 1949.
For its better job, labor got a bigger slice of the economic pie; the average U.S. manufacturing wage in 1950 rose 14%, from $56 a week to an alltime high of $64. Corporate profits also scaled a new peak. The estimated grand total after taxes: $23 billion, up about 27% over 1949. As their share, stockholders split their biggest melons in history. But dividends of $8.5 billion were still a much smaller percentage of profits than in pre-World War II years, largely because corporations were pouring so many billions into expansion.
The pleasant "results of this flow of goods and money were a high standard of living and an era of industrial good feeling. Management and labor lived together in such reasonableness that man-hours lost from strikes were about 28% lower than '49. As industry shouldered its new social responsibilities, pensions for employees became an accomplished fact, so much so that the year's worst strike, Chrysler's 80-day stoppage, was not over whether pensions should be paid but over the method of paying them.
But the real significance of 1950's industrial record was that it provided the best measure of the economy's strength to perform the job of arming the U.S. and much of the free world. At year's end the question was not only, "How did the boom grow so big in 1950?" It was also, "How big must the economy grow in 1951 to carry its vast new burden?"
What Goes Up. . . The year began inauspiciously. Although industrial production in January was up 14% from 1949's midsummer recession low, there were plenty of signs that it might fall again. Unemployment stood at 4,480,000, the highest since World War II's end; the stock market, which had been climbing steadily for seven months, took a sharp drop. Motorcars were so plentiful that they could be bought readily off any dealer's floor; auto men even shaved their prices. Was a recession on the way? Croaked Montgomery Ward's Sewell Avery: "The time is not far away."
Avery was never more wrong. Like many another businessman, he had overlooked the stimulating effect of easy credit. Unwilling to risk even a slight depression in an election year, the Administration in 1950 had greatly liberalized housing credit, poured out hundreds of millions in RFC loans and farm subsidies.
The $7.4 billion in FHA and VA guaranteed loans made it possible for a veteran to buy an $8,000 house for as little as $56 a month with no down payment. Consumer credit soared above $20 billion, up about $2 billion in a year. Warned gaunt, grey Economist Edwin G. Nourse: the U.S. was traveling too fast down the "slippery road" of credit.