Out on a Limb?

Pink-cheeked Secretary of Commerce Charles Sawyer last week crawled tentatively out on a limb. Said he: "The end of the recession may be at hand." Sad-faced old Dr. Edwin G. Nourse, chairman of the President's Council of Economic Advisers, was not ready to go quite that far. He was "very definitely encouraged," though he did not think that "disinflation" was ended.

This cautious optimism was provoked by the fact that industrial production and employment were again rising swiftly. The Bureau of the Census reported that its Aug. 13 survey showed the sharpest monthly rise in non-farm jobs (1,368,000) in years, more than enough to offset the seasonal drop in farm employment. Total U.S. employment rose to 59,947,000, the highest so far this year, while the number of jobless fell from 4,095,000 to 3,689,000. Secretary of Labor Maurice J. Tobin thought the rise had continued into September's first week, when unemployment compensation claims again declined.

In spite of such reassuring facts, some businessmen had been hard hit. U.S. retailers reported that their sales were still below the 1948 level, and for 172 department stores, net profits for 1949's first half were 58% below the 1948 period. Some merchants thought that further price cuts were in order. Last week, five men's clothing chains trimmed suit prices from $3 to $10. One of the ten biggest U.S. distillers, Glenmore, announced the first major postwar price slash in bottled-in-bond bourbon whisky (a cut of $1 a bottle on Kentucky Tavern, retailing in Manhattan at $6.94).

On the other hand, the huge U.S. oil industry, which had thought last spring that the boom was over, changed its mind. The vast production of new cars, diesel engines, oil heaters, etc. had swelled oil demand so much that the U.S. Bureau of Mines forecast greater demand this year than last. The bright outlook caused oil shares to pace the recent stock market upswing. The market got a new lift this week from the prospect of a settlement of the steel wage dispute (see NATIONAL AFFAIRS). In the first day's trading, steel shares gained as much as a point.

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