Monday, Jun. 20, 1960
Through the Barrier
Employment, the most worrisome statistic of the U.S. economy, is showing marked improvement. In May, 1,049,000 found jobs, a better-than-seasonal rise that brought total employment to 67,208,000, reported the Labor Department this week. Unemployment dropped seasonally by 201,000--to 3,459,000--pushing the number of unemployed in the U.S. work force below the 5% barrier (to 4.9%) for the first time in a year. Even more encouraging, the chronic sore spot of unemployment--those jobless for 15 weeks or more--fell 300,000 to about 900,000 in May; nearly half of those now seeking work have been out of jobs less than five weeks. Matched with these heartening employment statistics was an improvement in another important indicator: after slipping for the last few months as a result of cutbacks in production, the hours of work in manufacturing started upward in May.
Despite the continuance of worried talk about the future among businessmen, industry was scheduling outlays for plant and equipment at close to the high level predicted three months ago. With private spending in the first quarter at $35 billion and plans for the rest of the year reduced only slightly, the Government announced that it now expects 1960 plant and equipment expenditures to total $36,850,000,000 v. the $37,016,000,000 earlier expected. That figure would be 14% above last year and close t01957's alltime record of $37 billion.
A surprising factor in the economic picture was an unexpected drop in retail sales. The Commerce Department reported that retail sales in May fell 3% from their April record of $19.2 billion, a larger-than-usual drop for the month. The decline hit most major goods, including autos, though it took little of the gas out of Detroit's spring upsurge. May sales of more than 565,000 cars were nearly 7% above May of last year, represented the best daily-average selling rate (22,610) since September 1955. The industry is now running some 13% ahead of 1959's so-so year. Within the next fortnight, the U.S. auto industry expects to turn out its millionth compact of 1960.
There were also signs of a turnabout in steel. The industry last week scheduled a rise in production from 60.6% to 62.3% of capacity, the first increase in seven weeks and the biggest one-week gain since December. Steelmen also heard some other good news: imports of steel in April, the Commerce Department reported, fell from 464,000 to 331,000 tons, while U.S. steel exports rose from 203,000 tons to 235,000 tons for the best exporting month since November 1958.
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