How Much?

A month after it started, the great wave of price-cutting calmed down last week into a tiny ripple. Most of the merchants in Newburyport, Mass., who had started it all, abandoned their program to refund 10% on all retail purchases. So did Newburyport's imitators across the nation. Merchants called it all a mistake. In the last eddy of the wave kicked up by Newburyport, a grocer in Byington, Tenn. posted invoice prices on his goods, let his customers decide the markup. They decided 20%, which was his normal markup, was about right. His business improved. But by & large, price-cutting had ceased to be the exciting catchword for a nationwide crusade.

Had the campaign done any real good? No one thought so. The Bureau of Labor Statistics last week reported that its index of wholesale prices, which had started down at the end of March, had edged up again for the week ending May 17.

While the price front stood firm, there were other cracks in the surface smoothness of the economy. The Department of Commerce reported that manufacturers' new orders, at last count, were lagging behind shipments, while wholesalers' inventories, up from $5 billion in November to $6.7 billion at the end of March, were still rising. In short, current production in many industries was higher than current demand. The Bureau of Labor Statistics reported that factory employment had dropped by nearly 140,000 between mid-March and mid-April, the first decline since the reconversion low of 15 months ago. Some of this was "seasonal."

Noting such troublous signs, many businessmen were no longer talking about whether there would be a business recession. They were wondering how much business would recede.

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