Show t BUSINESS t i NINO Administration officials and economists are assuring us that the 1974 75 1974 75 recession is bottoming bot bot- bottoming out They base their optimism on a record April spurt of 42 percent in the government index of leading business indicators Following eleven cleven straight months of decline the index has now registered two months of gain that may indeed herald the end of the economic slide for this cycle What The Figures Show While such betterment can hardly be regarded as conclusive conclusive conclusive con con- evidence that a definite turn to the upside has come the signals of improvement are welcomed by the business world Not only do the April figures point upward they do so quite strongly in some specific instances and that would a ap appear appear ap- ap pear to bode well for the brighter future that is an an- ted Building permits for private housing were up percent from March The average workweek advanced 05 percent to 39 hours a development that could prove to be quite significant Best of all new orders for manufactured goods rose almost 10 percent These figures are more heartening heartening heartening heart heart- ening because with release of the April data the government government government govern govern- ment announced that the index of leading indicators had been revised to make it a more precise economic forecasting tool The new index which is expected to to-be to be less susceptible to inflationary distortions retains only four of the twelve indica indicators tors included in the previous one Prognostication Reports reaching Babson's from private sources i signify that the index of leading indicators for May will show some further gain when the final results are released The percentage increase however will not be as dramatic What we are seeing at this time is a gradual brightening of the business picture while thereal the thereal real dawn of recovery is still down the road a piece Business is flexing its muscles right now and nd in the months immediately ahead it will be testing itself and its markets By midsummer we will have a clearer idea of whether the inventory runoff runoff t has been overdone 0 or whether total demand is actually moving up on what promises to 4 4 be a sustained basis Our guess The solid pull of recovery will not be widely and surely felt until near Labor Day Shape Of The Upturn So far there is more whistling in the dark than real optimism among marketing men The Research Department of of Babson's Reports shares that cautious view looking for buying enthusiasm to take time timeto to kindle Although personal income is still heading upward disposable personal income gains are too limited to be truly invigorating And of course unemployment is still a drawback Consumers continue to be bemore i more interested in banking more cash and and reducing debt than in buying But this trend i may change as it becomes apparent that things are looking up and that mob security of those employed may in fact be improving Even so uncertainty and inflation though well down now from earlier peaks will continue continue con con- as checkreins checkrein on consumer consumer consumer con con- sumer enthusiasm We do not look for anything like a real buying binge until the fourth quarter but foresee modest steady gains gams in the interim Hence fueling the upturn will take time More tore Heller For Business So business still has a tough row to hoe hoc and there are few in Washington speaking out tor It u these days Congress remains pretty firmly wedded to the idea that economic recovery can best be encouraged through more public service jobs l higher gher government spending rather rattier than via tax tar and or other aids to business But we feel that there will be some cuts in business taxes enacted toward the end of this year and that these may include in in- clude an art end to the federal taxation of dividends that are reinvested |