THE ECONOMY: Muted Cheer

What the Department of Commerce saw in its May report on domestic business last week looked good. In May, most industries were still producing at a high rate. Manufacturing employment was off, but overall unemployment was down to 2,000,000, lowest since last fall. Retail sales were steady; there was no important break in the price structure. Average weekly pay, up 3% over April, was at a new peak of $48.86 in manufacturing industries.

Encouraged, the Department thought it might put out a statement that there was still no recession in sight. Then another group of Department economists brought in a second report. This one was all about U.S. exports, which were running at an annual rate of $15.5 billion in April, nearly 60% over 1946. But foreign countries, warned the report, are using up their dollar exchange so rapidly that “dollar shortages may materialize before the end of the year, with a corresponding decline in U.S. exports” (TIME, June 2). And a serious decline in exports, as the Department of Commerce knows, would cause a decline in business generally.

Commerce dropped talk, of “no recession in sight,” and issued both reports without comment.