STATE OF BUSINESS: Hellzapoppin'

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"There's going to be hellzapoppin' in the steel industry all the rest of the year." So said Bethlehem Steel's Chairman Eugene G. Grace last week as the steel strike ended (see NATIONAL AFFAIRS) and he took a good look at piled-up demand. Like other steelmen, Grace reported that his company had "never been so low in working inventories of semi-finished steel," while its orders for structural steel were "greater than we've ever seen before." The unleashed steel demand was piling atop an economy already operating "at a record rate, well above the same period a year ago," according to a Commerce Department survey of 1956's first half, released last week. Employment was at a peak; the demand for nondurable goods showed "little or no slackening"; the downslide in orders for durables "appears to have been arrested." Consumer purchasing, one of the economy's biggest props, had been helped by freer credit.

But while installment buying rose, the repayment rate on old debts rose even higher, so that the total debt increase was actually lower in the first five months of 1956 than a year ago. The reports of first half earnings continued to look rosy, except for a few trouble spots, notably in appliances, e.g., Philco reported a second quarter loss of $686,000 v. $1,128,000 profit for the same period last year.

The economy's biggest trouble spot-the automobile stocks in dealers' hands —was clearing up as dealer inventories on July 1 dropped to an estimated 664,019, down 17% from the previous month and 18% below the inventories a year ago.

With supply more in line with demand, Detroit automakers showed their confi dence by upping production to a rate of 440,000 units in July, the second month of the year (besides March) when auto pro duction gained over the previous month.