The government published fresh economic statistics yesterday that tended to show the recession so far still is a mild one, despite predictions it will worsen substantially later.
The figures showed that the nation's industrial output -- a key indicator of economic activity -- declined only slightly in July, while housing starts and the personal income of Americans remained relatively robust.
The statistics marked welcome news for the Carter administration, which is hoping to avert a deep recession while still slowing the economy enough to dampen inflation from its current 13.2 percent pace.
Courtenay M. Slater, the Commerce Department's chief economist, said the reports tended to "give more confidence" that the recession will be a mild one. Carter has postponed any decision on a tax cut until the outlook clears.
The figures showed these developments:
Industrial production dipped a scant 0.1 percent in July, the same as in the previous month, with the bulk of the decline in auto and truck manufacturing, where output is being trimmed in the face of large inventories.
Housing starts fell to an annual rate of 1.799 million units, a drop of 7 percent from June's revised pace of 1.935 million units. However, the June rate was considered unusually high, and the July figures held their own.
The personal income of Americans rose a strong 1.4 percent in July following an 0.7 percent jump in June. Almost half of that increase reflected cost-of-living adjustments in Social Security benefits, but the rest was still moderately strong.
The figures on industrial production showed little change from the picture in June. Production of consumer goods fell 1 percent, after an 0.9 percent drop in June. But output of business equipment rose 0.4 percent.
Output of consumer durable goods declined 2.6 percent in July as automakers cut assemblies by more than 3 percent to an annual rate of 8.8 million units. Output of utility vehicles plunged 20 percent during the month.
Nevertheless, the board said despite the cutbacks, auto production still remained well above sales rates in the industry, and automakers were expected to slash assemblies further to a 7.3 million rate in August.
The industry has been hard hit in the wake of the June rise in foreign oil prices and the gas lines that appeared in many parts of the nation during mid-June and July. Moreover, it may face a strike in September.
The sharp dip in housing starts was expected by most analysts. Most economists had believed the June pace was artificially high. Inflows to savings and loan institutions, which provide funds for mortgage money, have been declining.
However, analysts said the effective 1.8 million-start annual rate posted in July was in line with expectations that the recession would prove to be mild. Single-family starts fell to a rate of 1.223 million, from 1.298 million in June.
At the same time, however, building permits dipped another 7 percent in July to an annual rate of 1.521 million -- a sign that housing starts will continue to decline in the months ahead. Permits were 14 percent below their pace a year ago.
The figures on personal income showed a rise of $27.2 billion in July to a new annual rate of $1.933 trillion. In June, personal income had risen $13.4 billion, to a $1.906 trillion rate.
Income from wages and salaries rose 0.7 percent in July to a new annual rate of $1.229 trillion, following an 0.1 percent decline in June. Factory payrolls rose by 0.5 percent to a $331.4 billion annual rate.
Income to farm owners fell 0.3 percent in July to an annual rate of $33.3 billion. Dividend income slid 0.2 percent to a $52.5 billion rate. Both performances were the same as in the previous month.
The rise in income from transfer payments, which bloated the overall figures, reflected a 9.9 percent cost-of-living increase in Social Security and Veterans' benefits. Income from transfer payments soared by 5.7 percent.
Although the figures appeared to show the recession has had relatively little impact so far, the statistics did not alter economists' predictions that the slide will continue. If anything, forecasters have become more bearish in recent weeks.