V 
u.s 
o 
. HOUSTON 
State Bulletin 
7 August 1938 
Denver 94; and Phoenix 96. 
Economic Review 
The following is a review of the economic situation in the United 
S ta te s prepared by the Department of Commerce: 
Business activity showed definite improvement in July after al- 
lowance for the usual seasonal fluctuations. Hie aggregate volume 
of industrial production increased contra-seasonally and retail 
sales of general merchandise after allowance for the usual midsum- 
mer let down continued the improvement noted in June. Sales of 
new passenger cars have responded to the betterment in general 
business conditions particularly in middle western farming areas. 
The recent advance in prices of industrial raw materials has 
tended to level off. Security prices have moved within a narrow 
range in the past fortnight retaining the substantial gains made 
since mid June. 
Residential building activity remains a favorable factor in the 
current situation. The volume of home mortgages accepted for ap- 
praisal by the Federal Housing Administration during July . showed 
a larger relative gain over a year ago than in June. Residential 
construction contracts in the first three weeks of July were 
awarded at a slightly higher rate th n in June whereas a sizable 
reduction is the normal June to July movement. Residential con- 
tracts were not only larger than in June but were four percent 
above awards in the same period of last year. 
Industrial activity in July according to seasonally . adjusted weekly 
data was roughly six percent higher than the composite June rate 
and was slightly above January "the previous high month of the year. 
The advance in steel mill operations during the month was notable. 
Ingot output approximated thirty three percent of capacity as com- 
pared with twenty eight percent in June - a substantial contra- 
seasonal gain. Further acceleration in steel mill -activity oc- 
curred in the current week the rate of ingot output increasing 
three points to forty percent of capacity. 
The July advance in industrial activity included all major sectors 
except automobile production which dropped more them seasonally - 
assemblies in the United States and Canada approximated on hundred 
forty thousand cars and trucks for July as compared with one hun- 
dred eighty nine thousand in June; a large reduction even after 
allowance for the normal seasonal let down. Further contraction in 
automobile assemblies is indicated for August as some plants have 
completed assembly of 1939 models and as an important producer will 
interrupt operations with a two week investory and vacation 
shutdown. 
Freight car loadings increased somewhat more than seasonally dur- 
ing July reflecting the heavy grain movement, an expansion in 
coal production and a small contra-seasonal gain in miscellaneous 
freight (which includes a large proportion of the manufactured 
good" shipped by rail). Shipments of forest products were unchanged 
from June whereas a moderate reduction is usual. Lumber production 
rose to the highest point this year in the week ended July 23 and 
orders for lumber have increased substantially. Incoming orders for 
lumber in the first three weeks of July were about one sixth higher 
than in the same period of last year and exceeded the rate of 
production by a largo margin. 
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