Milford chronicle., 1956-10-26
Philadelphia Federal Reserve Bank
Reports On Current Trends

<A%hAfttS ia A4Oct cSCLOtS Vi the
economy in the Philadelphia Fed
eral Reserve District approximates
or exceeds the high levels reached
during 1865. Recovery from the ef-
fects of the steel strike at a faster
pace than most observers thought
| likely has given rise to a high de-
gree of optimism in many quar-
ters. Capital spending plans of
businessmen-one of the brightest
spots in the local picture this year
now seem more likely to proceed
with minimum of delay occasion
ed by shortages of basic materials.
In our larger city areas, labor mar
ket conditions have stabilized or
improved in recent months; fac
tory employment has increased
since midsummer; and retail
sales have maintained a fast pace
SET early in the year Thus, among
major indictors of business activ-
ity, only housing and automobiles
have continued to show signs of
weakness or hesitation in compar-
ison with year-ago trends.
Labor markets in Third District
cities have either maintained or
raised their employment status
since the early months of this year
Atlantic City in New Jersey and
Scranton and Johnstown in Penn
sylvania are areas where condi-
tions have improved. The situa-
ton in Johnstown is particularly
noteworthy. That areas employ
ment status has been upgraded
twice since last fall and unemploy-
ment has been reduced by about
one-fourth, largely because of in
creased activity in steel mills and
bituminOGs coal mipes.
Although poeIs of unemployment
equal to 6 per cent or more of the
local labor forces persist in five
of our thirteen major industries
areas, WIlkes-Barre, TaZleton and
Scranton are the ones where the
| problem remains most critical. Sig
nificantly, these cities are in the
anthracite region, where jobs for
men have been scarce since mining
operations were cut back several
years ago. Over most of 1855 there
were two other areas of critical
labor surplus Altoona, a railroad
town, and Johnstown, where steel
and bituminous coal are leading
industries.
Factory activity in most parts
of this district declined sharply
when the steel mills closed down
in July. The Harrisburg and Lee
high Valley areas with their large
share of heavy industry were
among those hardest hit. However,
By mid-August activity in both
areas had more than regained pre-
strike levels. Seasonal influences
were a factor in the increases in
employment and working time in
many industrial areas since mid
summer. These were especially ap-
parent in non-durables like food
processing, textiles, and. apparel.
Wilkes-Barre, Scranton, and Read
/ ing were among the major city
areas where increased activity ap-
peared in non-durables. Philadel-
| phia and York felt these seasonal
| Influences and, in addition, exper
fenced some solid gain in other
lines attributable to increased or
der volume for the products of
both heavy and light industry.
In the Third District as a whole,
factory employment and working
time were maintained above 1855
/ levels until mid-year. BY late sum-
mer, most of the July losses had
4 <~sxy 10 .tessv1 Dc n 20
seem likely to continue through
most of the fall. Employment
prospects appear to be Frightening
on a fairly bread front as employ
ers appraise their labor needs over
| the period to early November.
Thereafter, it is expected that sea-
+, sonal factors may result in lev
cling off with only narrow employ
ment changes probable through
the turn of the year.
Basic Steel capacity in this dis
trict has been expanding steadily
since the early weeks of 1856 and
this trend shows signs of con-
| tinuing well into next year. The
current pattern of growth how
ever, differs from that of earlier
periods in that emphasis is on
modernization of existing facili-
ties rather than on building en-
tirely new plants. Third District
steel mills operated at or above
rated capacity continuously from
the beginning of this year until the
| final week of June. In 1855, ca
pacity operations were not reached
until the middle of October. With
ir three weeks of the steel settle
ment, mills producing crude steel
and ingots for castings were oper-
ating at 106 per cent of capacity
and better than 100 per cent rate
has been maintained ever since.
Bitumin0Hs coal production in
Pennsylvania ran well ahead of
1855 from January through June.
But when the steel mills closed
down, operations were drastically
curtailed and production in some
of the so-called captive mines"
owned by steel companies was sus-
pended altogether. AS in the case
of basic steel, the extent of recov-
cry from July's low point has been
impressive. Although most indus
trial consumers had accumulated
adequate reserves before the steel
strike, demand is again expanding
from most sources, including the
stoo1 couanauias themselves