STATE OF BUSINESS: Housing Leads the Way

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From U.S. builders last week came one of the brightest signs of the business recovery. Led by housing, construction contracts in July rose to $3,607,056,000, up 24% from July 1957. Though such public projects as schools and highways accounted for 43% of the volume, residential construction, helped on by easier money, also rose 21%.

The steel industry's scheduled operating rate also continued to climb for the eighth straight week, reached 63.6%, highest since June 16. Steelmen expect the rate to rise to about 70% as inventories are rebuilt and construction awards are translated into more orders for structural steel, which hit the highest level in July in 14 months. Steel stocks paced the market; U.S. Steel hit a historic high of 75⅝. Department stores also reported that sales rose 3% over a year ago.

With an eye on the statistics of recovery, the Federal Reserve continued to tighten credit by selling Treasury bills, brought net free reserves down to $306 million, lowest since February and almost $300 million under the $600 million of early July. The Fed also approved a discount rate boost from 1¾% to 2% for the Kansas City and Atlanta banks.