Up from the Bottom

The U.S. housing industry, over which many tears have been shed this year, had some surprising news for its mourners. For the first time this year, new house starts in August hit a seasonally adjusted rate of 1,010,000. Prophetic of things to come, applications to FHA for commitments to guarantee loans on future house starts reached 22,300--21% over July, and the highest level since 24,884 in March 1956. The month's applications compared with 7,749 last December. Economist George Cline Smith, vice president of the construction-wise F. W. Dodge Corp., foresaw further modest increases in 1958 and sharper increases thereafter. Said he: "We are bumping along the bottom of the housing decline now."

But the news on employment for the month ending in mid-August was not so bright. The nation's employment rolls slipped to 66.4 million, down 800,000 from the record set in mid-July, much of it because of a sharper than usual drop in the farm work force. The one encouraging note was a small pickup in nonfarm jobs. As for tight money, it grew steadily tighter. As a "feeler" in a $3 billion financing last week, the U.S. Treasury included $500 million worth of twelve-year bonds bearing a 4% coupon, the highest long-term rate since 1925. And as expected (TIME, Sept. 16), sales finance companies finally had to offer up to 4^% interest for the short-term funds they borrow in the commercial money market, an added expense that undoubtedly will soon be passed on to every U.S. consumer who buys on the installment plan.

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