Boost for Steel?

After all the backing & filling on steel prices, steel is getting ready for another rise. This week OPS sent out drafts of an order that will allow steelmen to adjust their prices to higher costs, using the Capehart formula. Only steelmen know how much the boost will be. But Washington price controllers, who have been saying no to an increase for months, now guess that steel may jump anywhere from a dollar or two to as high as $8 a ton, thus giving inflation another nudge.

But in other industries last week the signs were of deflation. Because arms production has not yet taken up the slack created by cutbacks in civilian goods, total U.S. output was estimated to have dipped in January, a trend started in December.

While some civilian goods centers (e.g., Detroit and Providence) have been hard hit by unemployment, defense centers (e.g., San Diego and Indianapolis) were short of help. But the jobless showed few signs of abandoning seniority, pension plans, etc., in their old plants and moving to the new.

Many a once-tight raw material was becoming plentiful. This week NPA decided there was enough chrome stainless steel to drop priorities on it, also planned to end similar controls on five other products.

Department stores have already felt the overall slackening of business. Sales last week were 4% under the same period last year, when there was still some Korean war scare buying. The wholesale price index was 3% under a year ago, and just about at the low point for the last twelve months. The drop has already been reflected in retail price cuts in textiles, leather goods and furniture. By spring, other retail prices, which normally lag several months behind, may be down too.

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