Statement by the President on the Second Quarter Advance in Gross National Product and Income.

NOTABLE advances in gross national product and personal income in the second quarter bear further witness to our strong and balanced economic expansion.

GNP rose to a rate of $618.5 billion

--nearly $10 billion above the first-quarter GNP (which was itself revised upward).

--$41 billion above the year-earlier rate, the best year-to-year gain in over 2 years.

--a rise fully consistent with our January forecast of $623 billion for 1964 as a whole.

The personal income of all Americans, after taxes, rose faster than we had expected.

It reached a rate of $431.4 billion for the second quarter.

This is a near-record advance of $11.4 billion over the first quarter.

It is an all-time record advance of $32.3 billion over a year earlier.

This means that the average American today is getting $139 more after-tax income annually than he did a year ago--the equivalent of $556 for a family of four--a remarkable advance.

The second-quarter performance set the stage for continued strong advances the rest of the year:

Consumers stepped up their saving, pub ting them in a better position to buy more in the months ahead.

Merchants and manufacturers prudently held their inventories down, so further rises in demand will be quickly reflected in higher production.

Businessmen spent more for plant and equipment, and their plans call for a continued vigorous rise in the months ahead.

On the basis of this fine record--and with the tax cut's major impact yet to come--we fully expect the gains in the second half of the year to be even greater than the first.