The Brighter View

The drop in the market completely ignored the good news that continued to pour out from company after company last week. The auto industry turned out 196,635 cars and trucks, breaking its own record for the third successive week. For the tenth week in a row, steel production was at more than 100% of capacity.

Industrial expansion, which had been expected to drop by 11% this year, was on the rise again. The Department of Commerce reported that U.S. corporations will spend $4.48 billion on new plants and equipment in the third quarter of this year, a 3% gain over the similar 1949 period. Total expenditures for 1950 should hit a whopping $17 billion, barely 6% under the 1949 near-record total.

Retailers, whose sales had been lagging, were also taking a brighter view. In New York City's garment center last week, buyers finished ordering $200 million in fall clothes, some 10% more than they were willing to invest last year.

Despite the big spending, consumers still had plenty of cash in their pockets. The Bureau of Labor Statistics reported last week that average weekly earnings for U.S. production workers hit $57.50 in May, highest in history. Nonagricultural employment also rose to 43.2 million in May, a new high for the year, while total U.S. employment was expected to reach well over 60 million this summer.

The boom in business had an obvious effect on prices. Item: despite prospects of a 99 million pig crop this year, third highest in U.S. history, retail pork prices last month edged up 9.8%. They helped push the cost of living index up .8%, its sharpest advance in 22 months.

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