Wait for Fall

The mood of U.S. business last week was: "Wait for fall." Most businessmen felt that the slide was ended, but few looked for any immediate big pickup in the face of the usual summer shutdowns.

The statistics looked brighter than at any time since the start of the recession, but the National Association of Purchasing Agents said: "None of the reporting members expresses any optimism over the immediate term. The majority look for no major breakthrough in the current lull before the year end or early 1959."

New car sales in the second ten days of June posted a 6.8% increase in daily rate over the first ten days, and last week's production was up 9.6%. Ford Motor Co. returned to full-scale production, while Chrysler Corp. scored a 13% production boost in June. Yet even as the wheels rolled a bit faster, the industry got set for the annual model changeover shutdown. Buick production was stopped last week for approximately six weeks; Chrysler will start shutting down late this month, Plymouth in early August and Ford in September.

Steel production is already starting down after hitting 64.9% of capacity and the highest level (1,751,000 tons) of the year. Part of the decline could be attributed to vacation shutdowns, but much of it was due to a general fall-off in orders as companies finished the buying spurt they put on in anticipation of a price rise this month. One small specialty producer, Pennsylvania's Alan Wood Steel Co., whose 800,000-ton annual production ranks it 23rd in the U.S., said it would boost prices an average $6 a ton, arguing that it could not absorb increased wage costs of 20-c- per hour on July 1.

But the nation's biggest steelmakers seemed in no rush to hike prices. U.S. Steel said only that it was "studying" Alan Wood's move: so were Bethlehem Steel, Youngstown Sheet & Tube, Armco Steel and Jones & Laughlin, which added that it would not raise prices until U.S. Steel took the lead. Said Big Steel's Chairman Roger M. Blough: "Our immediate conclusion is not to attempt to change our prices until the situation is clarified." When that might be, added Blough: "We cannot forecast." But for years, steel prices have climbed, along with boosts in minimum wages (see chart), cost-of-living allowances and other costs.

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