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Steel production set an alltime high of 112 million tons, up 20% from strike-hampered 1952; electricity output, at 442 billion kwh, was up 11% to another record. More people were employed than ever before, and few were unemployed (1,500,000). With the best pay in history (average factory wage: $71 a week without overtime), and more borrowing (consumer credit rose 12% to a new high of $29 billion), Americans spent a record $230 billion at retail. Personal income was up 6% to a new high of $285 billion, and savings hit $18 billion v. $16.9 billion in 1952.
The dynamic force of the U.S. economy was reflected by the Federal Reserve Board's revised index of industrial production (in which the base years are 1947-49 instead of 1935-39). The new index averaged 135, up 9% from 1952 for a new peak and eight full points above the biggest year of World War II. While taxes cut deep, corporations nevertheless netted more after taxes ($20.5 billion) than in any year except 1948 and 1950, and paid out the greatest volume of dividends in history ($9.5 billion).
The gross national product (the total value of all goods and services produced) reached a new peak of $368 billion, up 5% from the year before. What gave meaning to all the figures was that for the most part they represented real gains, not just more inflation. The cost of living during the year edged up a mere 1%, and at year's end had turned down.
The "It" Factor
"You never had it so good." said one side of the Democratic campaign coin of 1952. Said the other: "Don't let them take it away." As 1953 started, many prophets, even those uninfluenced by political slogans, thought that "it" was bound to vanish. The overshadowing factor in all the predictions was the Korean war. Would the new Administration make good its pledge to end it, or get an armistice? If so, what would be the effect of the reduced arms spending on business?
This worry was reflected in the stock market. After hitting a high of 293 in January, the Dow-Jones industrials average started down. But business showed no signs of slipping; there was even a hint of more inflation. When the steel and auto unions asked for more money, they got it with little trouble. General Motors' Harlow Curtice set the pace; G.M. incorporated into its basic wages 19¢ of the 24¢ an hour for cost-of-living increases since 1950. When steel wages went up, steel prices were also hiked.