Sound & Busy

Like a man walking into a memorial service to report that nobody had died, Bridgeport Brass Chairman Herman Steinkraus said last week: "Wall Street's recession talk wouldn't last very long if Wall Streeters got into and around the country and saw how sound and busy it was." The soundness and busyness was evident in many quarters last week. Some signs:

P: Employment moved higher than ever before, to 63.4 million in August, the Commerce Department reported, while unemployment dropped to a postwar low of 1,240,000, only 1.9% of the total work force. The Labor Department found 16 major areas with "substantial labor surplus," and total unemployment of 101,000 in July. Just a year ago, there were 21 surplus areas, with 481,000 unemployed.

P: Personal income, which has gone up every month this year except April, climbed to an annual rate of $288 billion in July, a new record.

P: Industry plans to spend $7.4 billion for new plants and equipment in the third quarter, a record quarterly total, the SEC and Commerce Department announced, but outlays are expected to fall off in the fourth quarter. Total predicted for the year: $27.8 billion, up 5% from 1952.

P: The Federal Reserve Board expected its index of industrial production for Au gust to snap back to 238% of the 1935-39 average, after plantwide vacations had pulled it down to 2-33% in July from the June level of 240%.

P: Despite slacking off in new-home starts, new construction in August set a record of more than $3.3 billion, up 7% from a year ago.

There were soft spots in the economy, too, and some of them seemed to offer a measure of support for the recession talk that was loose in the land. With farm income down, the farm-machinery busi ness slumped. The petroleum industry showed signs of overproduction; Sin clair Refining Co. and Phillips Petroleum Co. cut their crude-oil refinery runs 3 to 5% for September. Auto production fell moderately during August as auto makers began to feel the Hydra-Matic transmission pinch and output of 1953 models started to taper off in preparation for retooling for 1954. There was softness in some apparel lines and in some home appliances, and defense cutbacks have had a mild effect on aircraft-supplier plants.

There were also localized business slow downs, such as in Washington, D.C., where the federal payroll has been cut, in Kentucky and West Virginia, hurt by the sick coal industry, and in Hollywood.

But retail sales were still running 6% ahead of last year, though many merchants had to work harder to sell. An appliance shop in Idaho Falls and an auto dealer in New Orleans offered to take cows, horses, donkeys or chickens as down payments on freezers and Ford pickup trucks. However, the weak spots were still very much the exception rather than the rule, and no single trend could be pointed to as a sure sign of trouble ahead.

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