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though there was no significant increase in spending on durable goods. Increasesin spending were confined mainly to nondurable goods and services.By the end of the summer, the expansion of consumer demand ceased.Personal income began to decline in September, and retail sales recededfrom the high levels of the summer. Purchases of services continued to rise,but total consumer spending declined one-half of 1 percent from the third tothe final quarter of the year. For the year as a whole, consumer expendituresincreased 5 percent, about the same as in 1956. However, the higher expendituresin 1957 reflected in large part increases in prices, and only a small increasein the volume of goods and services acquired (Chart 3).CHART 3Personal Income and ConsumptionDisposable personal income rose during most of 1957, but itsbuying power increased little because of price advances.BILLIONS OF DOLLARS325SEASONALLY ADJUSTED ANNUAL RATES300DISPOSABLE PERSONAL INCOME J275250225I I I 1 I I I T1954 1955 1956 1957PERSONAL INCOME LESS TAXES.SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF LABOR, ANDCOUNCIL OF ECONOMIC ADVISERS.Employment and EarningsEMPLOYMENT AND INCOMESAfter nearly three years of sizable gains, nonagricultural employmentreached a peak in the summer of 1957 (Chart 4). A slowing down in therate of growth had become apparent after mid-1956, and hours of work inmanufacturing had turned downward somewhat earlier. In 1957, declinesbegan to appear in employment in manufacturing industries, the mostpronounced decreases occurring in durable goods, especially machinery,primary metals, and transportation equipment. The declines continued