The government published a batch of fresh economic statistics yesterday indicating the economy still was growing strongly at the end of last year, despite widespread predictions of a mild recession late in 1979.
The reports showed:
The nation's industrial output grew a respectable 0.6 percent in December, the same as in the previous month, the Federal Reserve Board reported -- bringing overall production levels 7.7 percent above those of a year ago.
The personal income of Americans soared 1.1 percent last month, following a steep 1 percent rise in November, suggesting retail sales volume was high. Personal income rose 11.7 percent in 1978, compared to 10.7 percent in 1977.
Housing starts, which are supposed to be tapering off now, continued at a strong 2.125 million annual rate, only slightly below November's 2.155 million pace. However, building permits fell 3 percent, pointing to a possible housing slowdown.
American factories were operating at 85.9 percent of their capacity in December, up from 85.7 percent in the previous month, the Fed reported -- pushing the economy a bit closer to the point of overheating.
The series of statistics tended to bolster predictions by officials that the economy would turn in an unexpectedly robust performance for the fourth quarter of 1978. A report on the quarter's gross national product is due out today.
The pickup in economic activity is expected to push the growth rate for 1978 as a whole to just over 4 percent, rather than the 3.75 predicted by some private economists earlier last year. Most of the increase came at the end.
Forecasters now expect a visible slowdown -- and possibly a mild recession -- for late 1979 and 1980 leaving the administration with the prospect of a rising unemployment rate at the start of next year's presidential campaign.
President Carter is expected to propose a $533 billion budget on Monday that is designed to combat inflation by holding the deficit below $30 billion. Officials say Carter intends to hold firm even if the economy slips.
As occurred in the previous month. the December rise in industrial output was spread through most major sectors of the economy. The key exception was in auto assemblies, which fell 4 percent to an annual rate of 9.3 million units.
Production of consumer durables rose a scant 0.1 percent in December, following an 0.4 percent boost the previous month. But output of business equipment soared by 0.8 percent, after an 0.6 percent rise in November.
The rise in personal income came mainly in private wages and salaries, which jumped by 0.8 percent over the month, following a sharp one percent rise in November. Overall personal income rose to a $1.805 trillion rate.
Transfer payments climbed 0.4 percent in December, following an 0.7 percent increase the previous month. Farm income also rose sharply, reflecting government subsidies to grain growers under the 1977 farm bill.
The continued high rate of housing starts came as something of a surprise to Carter administration economists. Most analysts have been expecting the housing industry to slow some in the face of recent credit tightening.
Although the decline in building permits implied some falloff in coming months, analysts said the industry still was far healthier than had been expected under current money and credit conditions.
Kenneth M. Plant, economist for the Federal Home Loan Mortgage Corp., predicted the slowdown would be moderate through the first six months of this year. Plant credited the new six-month money-market certificates for the high rate.
The rise in capacity utilization rates left factory operating levels at their highest in relation to potential for any time since mid-1974 -- before the start of the last recession -- and indicated more tightness may be on the way.
One reason the administration is seeking to slow the economy some from its present pace is that analysts already are reporting overheating in selected industries. If this were to spread, it would create shortages and worsen inflation.
Ironically, forecasters twice predicted economic sluggishness for 1978 -- once during the prolonged coal strike that hit the economy last spring and again in mid-autumn. But both times the economy bounced back.