The Cautious Customer

"The sole end and purpose of all production," said Economist Adam Smith, is the consumer. Last week U.S. business, watching the consumer like a hopeful but apprehensive parent, might have varied Adam Smith's dictum to read that the U.S. consumer is the master key to what will happen to production--and how much will be sold--in the months ahead. What business saw was a consumer growing steadily more cautious about his purchases, but still buying at a rate that is helping to steady the economy.

Enthusiastic Reception. Detroit reported that its 1961 model-automobile year got off to an impressive start, with daily new-car sales up 7.5% over last year (to 19,539 cars) in the first ten days of October, for the best ten-day rate since June. American Motors reported "the best reaction in our history" to its 1961 cars; Plymouth and Valiant daily sales were reported 30% ahead of last year in the first ten days, the best since their record 1953; Dodge delivered nearly twice as many Darts as it did last year; Ford sold 12,361 Falcons in the ten days, expects to have a backlog of 12,000 to 15.000 orders for its new Thunderbird by the time it is introduced Nov. 10. Good sales were reported by Chevrolet. Studebaker and Pontiac. Industry spokesmen expect that 6,600,000 to 7,000,000 1961 models will be sold (including foreign cars), which would make a good if not spectacular year.

Dealers did not share the good sales equally. Atlanta's Beaudry Ford reported sales ahead of last year by one-third. Manhattan's Midtown Chevrolet had "the greatest sales since we have been in business," sold 500 cars in October and expects to sell more than 500 in November. But Los Angeles dealers were disappointed by slower than usual sales, and Tulsa reported new-car sales off 25% from three months ago.

Still Reluctant. The situation in retail sales was even more spotty. A survey of retail trade by Standard & Poor's showed retail sales up 2% over last year for the first nine months, with a 3.8% gain in nondurable goods and a 1.5% loss in durables. Chain-store sales were up 5.4% in September for the second-best gain of the year, and Kresge's reported a 4.5% September sales jump over August for the best September in the company's history. Said Kresge President Harry B. Cunningham: "If we're in a slump, we certainly are working our way out. The pessimistic talk we hear is not right."

In Detroit, retail sales in October are running 4% ahead of last year. Sales of New England retail stores were up 1% from last year in the four weeks ended Oct. 8. Retail sales in Southern California have stopped a steady climb that began early in 1958, and are running about the same as last year, which represents an actual slippage in the face of California's steadily growing population. In the Federal Reserve district covering Texas and parts of Arizona, Oklahoma, Louisiana and New Mexico, department-store sales for the four weeks ending Oct. 15 are down 7% from a year ago.

Despite the good news from many sections, merchants looked at the drops in some areas and kept their fingers crossed.

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