Boom on Boom

The great U.S. housing boom, which the experts have prematurely buried at regular intervals since World War II, was still setting new records. Housing starts in August, reported the Bureau of Labor Statistics, totaled 111,000, up 19% from a year ago. In Dallas the pace was so fast that there was a shortage of such supplies as wallboard, cement and plumbing equipment. In Levittown, Pa., where Mass Builder William J. Levitt showed off a new three-bedroom, two-living-room house (with garage) for $10,990, some 30,000 people stood in line to inspect it. In one week Levitt wrote orders for more than 375 houses, representing about $4,200,000 worth of new construction.

Auto Supply Down. Behind the new housing surge lay plentiful mortgage money, plenty of money in the bank (savings last month hit a new high of $25.5 billion), and that vital factor that no economist can assess, the willingness to buy. In the first half of 1954, said the Commerce Department, spending for personal consumption hit a new peak annual rate of $233 billion. The outlook for the rest of the construction industry also seemed bright. The Associated General Contractors of America polled its members (80% of the industry) and noted that building outlays of all types this year should hit $36.5 billion, up $17 billion from 1953.

In another vital industry, things looked much brighter than they did only a few short weeks ago. Auto dealers reported that their stocks of new cars were down to 402,000, about 11% below a month ago, and the lowest level in more than a year and a half. Last year at this time a wave of "blitz" selling swept the auto industry as dealers frantically tried to clear out their 1953 stocks. This year no blitz selling has yet appeared. To get ready for the tough competition ahead, Studebaker cut prices on its 1955 models by $37 to $287.

Market Up. With all the bullish news, it was small wonder that the stock market continued its spectacular advance. Last week, following such blue chips as General Motors (up $4 to $89 a share) and Standard Oil of Indiana (up $12 to $95), the Dow-Jones industrial average climbed six points, for a fortnight's gain of 13. At 316.67, it was only 20 points below the alltime high of 381.17 in September 1929.

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