Signs of Steam

The new employment tally last week produced a pleasant surprise. Though the flood of graduates swept unemployment to a 17-year high of 5,437,000 last month, the total was far below the 6,000,000 once forecast for June. It dropped to 6.8% of the labor force, from 7.2% in May and 7.5% in April. The number of jobholders actually increased by 920,000 for the month, came close to 65 million. More important, factory employment rose by 156,000. This was a solid sign that the long-depressed manufacturing sector of the economy was steaming up.

There was plenty of other evidence of industrial expansion. One of the best indicators--the average workweek of factory production workers--rose .6 hours in June to 39.2 hours. The Labor Department noted that in the past two months almost a full hour has been added to the factory workweek, more than half of it in overtime. The history of past recessions shows that an upturn in the workweek heralds a steady upturn in employment within a few months. The logic: when manufacturers boost production, they first put workers on longer hours, later hire new workers.

Commerce Secretary Sinclair Weeks predicted last week that unemployment will decline in July. One reason: more jobs will be created because more new businesses are being opened--a sign of general confidence in the economy's immediate future. Dun & Bradstreet reported that the number of new business incorporations rose 5% from April to May to a total 11,943. The number of business failures dropped from 1,341 in May to 1,260 in June. There was one disappointing figure: bigger businesses were failing. Liabilities of the failures rose 9% in June to $61.4 million.

One element in the signs of improvement was the fact that defense contracts are going out faster from Washington. To Boeing winged a $320,600,000 order for B-52G long-range bombers. Smaller but significant awards went to Curtiss-Wright, General Motors, Collins Radio, Hughes Aircraft, General Electric, Douglas, Northrop, Bendix, Texas Instruments and Lear. Missilemen also took a major step forward. General Dynamics' Convair Division dedicated its new $40 million Atlas plant at San Diego, showed off the Atlas assembly line for the first time. Result: stocks of the defense contractors climbed, helped to lead Dow-Jones industrials to the year's peak of 482.85.

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