Soft Spots

The turning point had been reached. In April, said the Department of Commerce, "the uninterrupted [business] expansion of more than a year was halted." The Bureau of Labor Statistics noted "several soft spots which will bear watching." Employment had begun to fall off slightly in the consumer soft-goods industries. Construction, which had been relied on to take up the slack, was one-sixth less in March than it had been in 1946. For the third consecutive month, new construction was under the corresponding 1946 figure.

This was enough to cause overall production, still in the stratosphere, to drop slightly. The Federal Reserve Board index slipped from 190% (1935-39 average: 100) to 187. Retailers, worried about possible price drops, were not buying as fast as they had been. As a result, the movement of goods from manufacturers slowed down. Another $450 million in goods piled up in manufacturers' inventories in April. This boosted them to $22 billion, almost twice the prewar peak.

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