STATE OF BUSINESS: Searching for Signs

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As U.S. businessmen last week anxiously looked for signs of a fall upsurge, there were few sights to cheer them. Stock buyers took such a doleful view that the Dow-Jones industrial average suffered an 8.58-point drop to 612.27—its sharpest one-day decline in more than six months —before steadying and rising at week's end. Best news came from retailers helped by record sales of back-to-school clothing and heavy traffic in auto supplies and small appliances. Sears, Roebuck & Co. and Spiegel both reported that August sales soared to alltime peaks for that month. Though the auto industry carried a heavy 887,800-car inventory on dealers' hands, sales of new cars perked up. The first good-sized shipments of steel for autos were already starting to move out of the mills, although the steel industry was scheduled to operate at only 50.6% of capacity last week.

Nor was there any cheer in the latest Labor Department jobless figures. They showed 3,788,000 unemployed in August. More important, unemployment did not decline as steeply as it should have between July and August, and the seasonally adjusted percentage of unemployed rose from 5.4% in July to 5.9% in August—the highest percentage since the steel strike last fall. Employment in August, though it set an alltime high for the month with 68,282,000 working, actually involved a working force that was 407,000 fewer than in July.

While the figures seemed to show the jobless problem becoming worse, the Labor Department made its survey during the week when auto plants were shut down for model changeovers, and all the temporarily laid-off workers were counted as "unemployed." Not until the September survey, when these unemployed will be back at work, will the Labor Department know whether the rise in jobless is actual, or merely a statistical distortion.