Regarding the economy, the 50's were a period relatively stable and found that agradual growth which explains why the U.S. was in 1960 a super economic power.
During the 50's, inflation proved to be a big problem because of two major waves of inflationary conditions swept the country at this time: the first followed the end of World War II and the second at the onset of the Korean War in 1950 . Post World War II America waited expectantly for the United States to postwar suffer the Economic Collapse. The recession started in the third quarter of 1948 and lasted until the second quarter of 1950. Slow economic growth and slow increases in the money supply are considered the most probable culprits.
Consumer prices increased significantly over this decade due to a number of factors. The first of which was the slow growth of productivity in the US economy at the time especially in the service sector. The service sector experienced the biggest price increases due to lapses followed by the removal of price controls after W.W.II. The Federal Reserve Bank set policies that were used to try to limit the economy to diving into only mild recessions instead of large economic declines. Large increases in consumer demand and credit were also factors in the increase of consumer prices due to corresponding poor productivity of the industrial sector. Huge increases in indirect business taxes and social security taxes also played a role as both nearly doubled during the decade.
With the great surge in construction and industrial investment as well as with consumer credit reaching previously unattained levels the economy seemed to be booming. The bond market reacted accordingly and it surged over the decade in step with the economy. The average yield in 1950 was 2.86 percent compared to the 4.73 percent average yield in 1960. This increase in bond prices and corresponding decrease in the stock market ( below the averages of all classes of bonds in 1958) was the result of the Federal government's high-interest-rate policy.
Growth in the economy also led to increasing popularity of other financial intermediaries. Life insurance companies flourished for the first half of the decade and a large number of new private firms entered the market to absorb the excesses of personal savings. Savings and Loan Association holdings of mortgage loans during the decade clearly demonstrate the boom in construction at this time. In 1950 $13.6 billion was held rising to $60.1 billion in 1960. Another important growth in the 1950s capital markets was in pension funds. This industry grew from $11 billion in 1950 to $44 billion in 1960.
By mid- 1955, the country had pulled out of the previous year's recession and gross national product was growing at a rate of 7.6 percent. The boom was so great that the budget for 1956 predicted a surplus of $4.1 billion. With the surges in production and the economy, the 1950s is often recognized as the decade that eliminated poverty for the great majority of Americans. Over the decade, GNP per capita almost doubled and the public welfare reacted accordingly as the cost of living index rose by just 1 percent and unemployment dropped to 4.1 percent. An average of three million people per year were added during the postwar "Baby Boom". With their rising incomes and increasing public welfare, booms in consumer spending were prevalent and items that had been previously thought of as luxuries were now necessities. Examples of this include fashion clothing, televisions, washing machines, etc. The propensity of the mid-fifties is attributable to the middle-class family striving for the American dream through increasing their number of material possessions.
The economy turned sharply downward in the summer of 1957 and reached its low point in spring 1958. Industrial production fell 14 percent, corporate profits plummeted 25 percent, and unemployment rose to 7.5 percent. The president did little to stimulate the economy because he worried about inflation - not unemployment - as the real danger. Subsequently, fiscal year 1959 realized a $12 billion deficit, a new record for a budget shortfall during peacetime.
http://homepages.gac.edu/~jcullip/workexamples/mea.html
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