Round the Horn

Businessmen, who had worried over inflation and shortages, last week had a new worry: “soft spots.” They were showing up almost everywhere in industry.

To consumers, most of them were welcome. Food, which had risen so much higher than anything else, was finally dropping enough to be a help to budget-bound housewives; meat, butter, eggs, etc. were all down. Dun & Bradstreet’s weekly index of the wholesale food price (per pound) of 31 items slid to $6.33, lowest in 17 months, and 14% below July’s alltime high.

Despite rising costs, woolen fabric makers were talking price cuts; clothing manufacturers, whose goods were not moving well at the present high prices, had cut back orders. Cotton cloth prices were already down; grey (unfinished) goods were back almost to 1946 OPA levels.

With shelves piled high, retailers were still waiting for the Christmas rush. At week’s end it had not materialized. Department-store sales were still below last year’s, despite a rash of bargain sales.

Even the booming oil industry had done such a good job of expanding to meet the fuel shortage that oil was plentiful: prices of gasoline and fuel oil were being reduced. Soft coal was also piling up, partly because of a drop in exports. Many Kentucky and West Virginia mines had cut back to a three-or four-day work week. Said Bert A. Astrup, assistant general sales manager for Shell Oil Co.: “We’ve rounded the Horn and we’re in a buyers’ market.”

The buyers’ market in oil, textiles, washing machines, etc. was not a blessing to all. It had brought surpluses and layoffs in many an industry. U.S. employment in November had dropped below 60 million (to 59.8 million) for the first time in five months. Part of the drop was due to greater industrial efficiency. Since the first of the year, Western Electric Co. alone had cut back its work force by 25,000. In Connecticut, layoffs were so widespread that the Stamford-Greenwich Manufacturers’ Council called a conference to discuss means of reducing them.

The layoffs were still small enough to have little effect in an economy where production and national income were still at peak levels. But it did underline a fact which many had forgotten. In a buyers’ market, labor, too, is a commodity which has to work harder for its dollar.