Evening star., 1938-05-29
OUTPUT EXCEEDED
|. BY CONSUMPTION
IN MOST TRADES
Inventory Cuts Brighten
Otherwise Pessimistic
Picture in Week.
UNFAvORABLE WEATHER
CHECKS RETAIL SALES
Business Men Center Attention
on Question of Pickup in
Industrial Rate.
BY THOMAS E. FLANAGAN,
Associated Press Financial Writer.

BY THOMAS E. FLANAGAN,
Associated Press Financial Writer.
Reports that consumption was out
running production In most lines
served to brighten an otherwise drab
national business record in the week.
just ended.
On the other hand, unseasonably
cold and wet weather hampered retail
sales Major industrial divisions rocked
along unevenly at leisurely pace, at
levels well under those of 1887.
Trifiing gains in freight carloadings
and electricity output contrasted with
slightly lower steel and automobile pro-
| duction.
| While the statistical record afforded
| little cheer regarding the immediate
outlook, some business experts ex-
pressed the opinion that business prob
ably was scraping the bottom OF the
current recession.
The Commerce Department. In its
weekly survey Of conditions in 81 cltiessv
said present consumption In most
lines Is ahead of production"
Bumper Crops Watched.
Business men, noting that tnven-
tories of numerous products had been
reduced. centered attention on one
question: How soon will consumers
buying power be sufficient to jolt the
industrial motor off dead center?
Those who sought an answer had the
following factors at hand:
On the one hand were indications OF
bumper crops of cotton and winter
wheat. While this weighed on prices
during the week, it was stressed that
large crops at moderate prices always
have served to swell general farm purA
chasing power more than limited har-"
vests at fancy prices.
On the other side of the scale re-
manned the fact that sharp downswlngS
in industrial production had cut into
the pay checks of workers.
At some point in the future. experts
said, the combination of reduced in
ventories, slow industrial output and
demand from ultimate consumers
would brace up the entire businesS
structure Some thought the end of
summer might see the readjustment
complete; others predicted it would be
the end of the year.
Higher Prices Forecast.
Buying agents assembled in st. Louis
heard experts say necessary adjust
ments already have been made. They
also heard that higher prices lay
ahead. On the basis of such predic-
tions, they were advised to step up to
the buying counter in order to covex
prospective needs.
The steel industry slowed down to
the lowest pace since the week of jan
uary 10. The American Iron and Steel
Institute estimated production at %
per cent of capacity. compared with
307 the previous week and 81 in the
like week of 1887 The industry's rec
ord continued Spotty. Steel executives
. said that. although demand for steel
| for consumers goods was resistant to
the downward trend, buying of the
heavy steels had ebbed to levels last
witnessed some four years ago. Skimpy
demand from the motor and railroads
industries were held accountable.
Iron Age said steelmakers might look
for moderate improvement by August.
Auto Production Drops.
Production of automobiles was 45.l20
units, compared with 46,8l0 last week
and 132,425 in the like 1887 period,
Wards Automotive Reports showed.
Reports from various cities showed
new car sales tagging, but some scat
tered improvement in the turnover OF.
used cars. New car sales in Wayne
County, Mich.-a traditional barom-
| eter-declined to 504 from 552 the pre-
vious week and compared with 3,O43 in
the corresponding week last year.
In the week ended May 81 electricity
production was slightly higher at l.
| 1863 807 900 kiloWatt hours, but los per
cent under year ago, the Edison Elec-
trio Institute said In the same week,
aided in part by heavier coal ship
ments. carloadings increased 1895 to
545 ,808 from the previous week. but
Jagged 296 per cent under the volume
for the same week of 1887.
The Associated Press index Of in
dustrial activity was unchanged ,G
$685. compared with 1893 in the corr
responding week a year ago. Helping
to keep the index steady in the face of
lower steel and motor output were in
creases in residential building and a
rally in cotton manufacturing.
Some Declines Sharp,
Continued unseasonably cold and
rainy weather in practically all sec
tions of the country seriously retarded
retail buying" the Commerce Depart
ment reported. In some cities there
were declines of IA to Is per cent frote
the like week last year.
The following cities. however.
showed increases over the previous
week: Savannah, Atlanta, Norfolk.
Seattle, st. Louis. Philadelphia. Gin
cinnati. Washington and Dallas.
In most centers wholesale trade
paralleled retail trends. Significant.
some said, was the fact New York had
a pickup in orders for lower priced
goods from various industrial regions
in Pennsylvania and Ohio. .