STATE OF BUSINESS: Signs on the Road

The U.S. economy picked up some speed last week, but there were still rough spots on the road to recovery, and enough danger signs in rising prices to warn that excessive speed could mean renewed inflation. Items:

¶ Construction contract awards for June reached $3.8 billion, the highest ever reported for a single month and 18.5% above last June. Biggest gains were in residential housing (up 20% from last June) and heavy engineering contracts, which rose 64%, largely on the strength of Government stimulation of road building and public works programs.

¶ Manufacturers' new orders in June rose to $25.3 billion on a seasonally adjusted basis—$300 million above May, despite continued inventory cutbacks. Also up: manufacturers' sales, which rose by $500 million to $25.7 billion in June.

¶ Unemployment continued to spread, partly because of the entrance of graduates, students and other summer job seekers into the labor market. The Labor Department added Milwaukee, Los Angeles-Long Beach and Birmingham—all with troubled heavy industries—to its list of "substantial" labor surplus areas, but predicted a slight improvement in the employment picture within 60 days.

¶ Spurred on by a hike in steel prices (see below), Aluminum Co. of America led other major producers in raising the price of basic aluminum pig 7/10¢ per lb., to 24.7¢. Reflecting lively European demand for copper, custom smelters hiked the price of refined copper by ½¢, to 27¢ per lb.

At week's end shares of aluminum and copper helped lead the stock market to a new high for the year on the strength of price rises. The Dow-Jones industrial average closed the week at 505.43, highest since Aug. 1, 1957, after the market turned over 18,760,460 shares for the heaviest week of trading since last October.