View from the Bottom?

Those who felt that the recession was bottoming out found some facts to back their faith.

P:Overall unemployment was going down, though factory jobs in April fell off another 271,000 to 15 million. For the week ended May 5, the Labor Department reported the year's biggest drop in those collecting unemployment compensation, with a dip of 66,900 to a total of 3,265,700. Part of the drop was due to a seasonal pickup in outdoor workers, yet initial jobless claims for the week also turned down by 19,800. P:Retail sales rose in April to $16.1 billion, 2% better than March. Most important, durable goods registered a gain for the first time this year, while housing, slowed by a cold winter and a wet spring, was picking up speed rapidly. April housing jumped to an annual rate of 950,000, v. a level of 880,000 in March, and is expected to do even better in May. P: Inventories declined still another $700 million in March, bringing closer the time when many industries must start reordering. As steel stocks slipped down to the 1954 level, steelmen report that 10% of all capacity--and 20% of all new orders --is on a rush basis, about as high as the industry can go. With production currently up a bit to 50%, steelmen forecast an upsurge of ten percentage points in the next eight weeks. Said Iron Age magazine: "This is brave talk. Yet some steelmen think it is a conservative estimate."

Wall Street, which has long since discounted much of the bad news, put on a buying spurt. Led by steels, rails, oils and aircraft, stocks on the Dow-Jones industrial average climbed two points higher during the week to hit a new high for the year at 462.56, nearly 43 points better than the recession low of last October. Poor earnings were easily shrugged off. At the annual meeting of Radio Corp. of America, President John L. Burns gave 1,275 stockholders of the world's biggest electronics company the bad news about a 29.7% first-quarter decline in earnings, to $9,000,000. But the stock went down only one-eighth of a point.

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