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St. Louis Post-Dispatch from St. Louis, Missouri • Page 11

Location:
St. Louis, Missouri
Issue Date:
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11
Extracted Article Text (OCR)

MAY 1 8 1979 ILL usiEess the economy ST. LOUIS POST-OISPATCH May 18, 1979 8C Operating Capacity Of Factories Drops during April, a steep drop from the 86.1 percent March level. "The economy has definitely cooled off," said one government analyst "No one can deny there is weakness. It could be the harbinger of a recession or it may not. It's anybody's guess." Barry Bosworth, director of the Council on Wage and Price Stability, has said a recession is a certainty unless inflation falls below the double-digit level.

The Commerce Department said April's slower income growth was "partly due to work stoppages," which reduced wages and salaries in trucking, manufacturing and air transportation by about $5.5 billion. In addition, flooding in some sections of the country chopped off another $1 billion in construction pay. Personal income is a closely watched economic indicator. When income rises, it means there are more dollars available for consumers to spend in groceries, department stores and other retail establishments. The Fed said the drop in factory capacity reflected declines in industrial production caused primarily by last month's trucking strike.

Automobile production was heavily affected by the strike because there was no way for auto factories to obtain parts. WASHINGTON (UPI) America's factories operated at only 84.9 percent of capacity in April a sharp decline from the March rate, the Federal Reserve announced late Thursday. The announcement was made shortly after another government unit reported that Americans' personal income advanced during April at the slowest pace since President Jimmy Carter took office. Coupled with Wednesday's twin reports that both industrial output and housing construction fell last month, many private economists now believe the United States may be hard-pressed to avoid a recession later this year. The administration is slightly more optimistic.

The Commerce Department reported personal income rose by just $6 billion or 0.3 percent to $1.86 trillion during April. It was the smallest gain since January 1977, when Carter was sworn in as the nation's chief executive. By comparison, wages and salaries of Americans plus such other monetary factors as Social Security income climbed 1.2 percent during March and 0.8 percent in January. In a separate report, the Federal Reserve Board said U.S. factories operated at 84.9 percent of capacity LEARJETS: STILL FLYING HIGH.

Gates Learjet Corp. of a healthy backlog. Three of the planes, valued at more than! Wichita delivered its 900th business jet this month and reports $5 million, are tested over Kansas recently. (UPI Telephoto) Laclede Steel To Seek Controls Exemption: percent of the company's sales in thf period, which amounted to million. If the rnmnanv had hwn it Ford To Temporarily Shutdown Plant Here comformity with the allowed, rate price increases during the quarter, nq earnings would not have exceeded 0.

percent, a level Akin "terme "untenable." a-ton scrap surcharge to its products. Akin said that competitive pressure forced the company to remove the surcharge on steel pipe earlier this month, but increased prices have "held well" on the balance of Laclede's product line. Akin said that the Council on Wage and Price Stability inquired in mid-March whether Laclede's steel price increases were in compliance with the voluntary standards. "I replied that our present primary effort was to survive the damage that was being inflicted upon Laclede by the failure of the Secretary of Commerce to carry out the provisions of the Export Laclede Steel Co. will request this week that the company be exempted from price and profit limitations set by the Council on Wage and Price Stability, Laclede President Paul B.

Akin said Thursday. Speaking at the company's annual meeting here, Akin said that a shortage of ferrous scrap has caused "severe" increases in scrap prices, adversely affecting Laclede's profitablity. Domestic supplies of ferrous scrap, used in the company's Alton, 111., plant, have tightened significantly because of increased scrap exports from the U.S., he said. In early March, Laclede added a $20- Akin said that although the deman for steel has been very heavy Tor sorn LTDs at Atlanta. Sales of both models have slowed in recent weeks due to growing concerns over tightening gasoline supplies.

However, all of the major U.S. auto firms said plants building fuel-conserving compact and subcompact cars will be working at least on normal shifts next week General Motors said eight car and seven truck plants will work overtime. Chrysler Corp. said three of its car factories will work longer shifts. DETROIT (UPI) Ford Motor Co.

said Thursday it will temporarily halt production at two U.S. assembly plants next week, idling nearly 6,000 workers, to trim stockpiles of slow selling full-size cars. A Ford spokesman said the firm's St. Louis plant (in Hazelwood) will close for the week starting Monday and its Atlanta plant, already shut down this week, will remain closed. The company assembles full-size Mercury cars at St.

Louis and Ford time, the steel shortage is not as severl as it was in 1974 and Laclede has nq been able to recoup much of thl increased scrap costs. Administration Act, and that the Voluntary Price Standards must, accordingly, take a poor second place," Akin told shareholders. He said the Commerce Department should use export controls to prevent an excessive drain of scrap from domestic markets, thereby reducing the inflationary pressures. Akin said data recently supplied to the council by the company shows that Laclede had exceeded its allowable rate of price increases for the first half of the program year. Price increases above the allowable level through April have provided about $3,850,000 in revenues.

During the same period, increased scrap costs amounted to $6,560,000, Akin said. "On Monday, I received a notification from the council that they suspect we are out of compliance. We will respond, to them this week and request that we be given an exception to our price limitations and to our. profit are well aware of our legal, as well as social, obligation to keep this corporation economically strong," he said. Laclede's earnings in the first quarter of 1979 were $1.36 million, or 2.3 The composite price of ferrous sera last October was in the lower $70-a-to range, he said.

By March it was abou $128 a ton, but it has dropped slight! during the last two months. Attending the shareholders meetii was Paul Ivanier, president" of Ivai Industries a Canadian steelmak Outlook: More Inflation, Higher Unemployment and metal fabricator that owns 19 percent of the outstanding v.commq stock of Laclede. Ivanier said in an interview th bill kester economic comment Ivaco has approached Laclede with proposal to gain representation on i board of directors. That proposal not been resolved," he said. Price Council Cites Laclede Steel Comoanies of Tulsa.

Okla. A council SDokesman said that si! firms have now been publicly identifiq aa ucuig ui piuuauic nununnpiiance. In all, the spokesman said, 15 firm are in probable noncompliance, but reruseo to identity nine 01 the mem. The five fnmnaniw ttii'f tuoi-J High interest rates and less money for mortgage loans are hurting the Homebuilding industry. The weakness in new car sales in recent weeks is probably th leading example of consumers' new attitudes, which will be a fundamental force in shaping the future economic scene.

In April, new car sales skidded 1.6 percent from March's pace, which was down 0.3 percent from February. In the first 10 days this month the number of cars sold fell 11 percent from a year earlier. As a result, some automobile assembly plants are being shut down for short periods as dealers try to keep their inventories from becoming too large. Consumers are also reducing their purchases of other things. Total retail sales have risen this year, but the gain has been less than the rate of inflation.

Retail volume in the first four months this year rose at a 5.5 percent annual rate, but consumer prices of goods advanced at a 14 percent annual rate in the first quarter this year. In other words, the physical volume of goods sold at retail stores has declined since last December. Barry Bosworth, the administration's No. 2 inflation fighter, says a recession is coming unless inflation is controlled. He has half the solution, which is better $an his boss has.

Bosworth says American workers must accept lower wage settlements to help slow inflation. The economic statistics for April are worse than those for March, raising the question of whether a business recession has already started. A recession, which had been widely predicted to start this year, would cause unemployment to rise. Even administration officials, who expect only a slower rate of growth but no recession, are saying unemployment will go up. At the same time, inflation is getting stronger.

Facing up to reality, Treasury Secretary Michael Blumenthal recently admitted that inflation will be more than 8.5 percent this year. So, the outlook is grim indeed. We apparently will have the worst economic situation in a long time accelerating inflation and rising unemployment. The economic situation is alarming enough, but to make things worse, at least one official's perception of the problem is wrong. How can we expect a solution, if the diagnosis is wrong? Alfred Kahn, the administration's chief inflation fighter, says consumers are "spoiled" and are bringing on the inflation.

His solution is for consumers to "lower their expectations." I doubt that many will buy that line. The inflation has been caused by excessive money growth which the Federal Reserve, with the administration's blessing, has imposed on the nation. In addition unions, trying to keep wages rising WASHINGTON (UPI) The administration Thursday identified five companies, including a St. Louis-based steel company, as potential violators of President Carter's voluntary anti-inflation program. At the same time, the Council on Wage and Price Stability removed the names of five other firms from their noncompliers list.

The firms identified for the first time as being in "probable noncompliance" were Laclede Steel Co. of St. Louis; Amerada Hess Corp. of New York, a large oil firm; Warner-Lambert Co. of Morris Plains, N.J., one of the nation's largest drug firms; American Hoechst Somverville, N.J., and Williams removed from the list ''werel Hammermill Paper Lone StaJ Industries Reichhold Chemicall Union Camp Corn, and MoosJ Automotive inc.

faster than prices, have forced wages up more than productivity has increased, reinforcing the inflation spiral. However, Kahn is right about one thing when he says consumers are feeling "poorer and poorer." Prices have been rising faster than wages for more than a year, reducing the purchasing power of take-home pay. But rather than being spoiled, as Kahn says, consumers are hurting. Having used credit freely, they are now acting judiciously, reducing their borrowing and buying less. So, instead of causing inflation, consumers are doing the right thing to help slow it by buying less and reducing the ability of business to hike prices.

The first thing to note about the April figures being released is that the declines are partly explained by the Teamsters strike and lockout last month. But even if that caused all of the decreases, one month of lower figures doesn't make a recession. Unemployment rose to 5.8 percent of the labor force from 5.7 percent in February and March and total employment, measured by sampling declined. But the employment figures were confusing, because nonfarm employment, based on a sample of employers' payrolls, was up slightly. Commenting on the decline in total employment, the Bureau of Labor Statistics said it may have been caused by adverse weather conditions, school and religious holiday effects and the trucking strike and lockout.

Because turning points in industrial production generally coincide with those of business cycles, the 1 percent decline in output of factories, mines and utilities last month could be significant. The Federal Reserve Board said the output drop was heavily influenced by the Teamsters strike and lockout and a strike of independent steelhaulers. Housing starts slipped a little and building permits, an indicator of future home construction, declined again last month. Both were down about one-fifth from a year earlier. The cases of those firms were settled to the satisfaction of the council, All but Moog were granted piargin exceptions to the price guidelines.

Landmark Bancshares Purchase Is Approved stockholders and Landmark's directors approved. A contract has been signed by Landmark and Ladue Bank. "We look forward to finalizing this acquisition in the very near future and integrating the new bank into the Landmark family," said S. Lee Kling, chairman of Landmark Bancshares. Shareholders of Ladue Bank and Trust Co.

and directors of Landmark Bancshares Corp. have approved Landmark's purchase of the bank. Approval by regulatory authorities is still pending. Last month, Landmark announced that it was making a tender offer to purchase Ladue Bank for an undisclosed price. It was that offer that the bank's 7.13NOV 1982 93 22 93 26 .8 V.24 7.88NOV 1982 95.26 95.30 treasury notes 9.38Dec 1982 100 100.14-B.OOFeb 1983 96.8 96.12 .1 27 .5 9.23 .10 9.17 .10 9.18 INVESTMENT Small Clayton Office Building.

On-site y.25Mar 100.3 100.7 7.88AAay 1983 95.17 95.21 9.20 3.25 Jun 1978-83 82.30 83.30 .4 7.00NOV 1983 92.8 92.16 .8 7.25Feb 1984 92.17 92.21 .6 6.38 Aug 1984 89.8 89.24 7.25Aug 1984 91.30 92.6 .6 8.00Feb 1985 95.2 95.10 .8 NEW YORK (AP) Closing Over Counter U.S. Treasury Bonds 7.95 9.07 9.19 8.87 9.16 9.07 7.39 7.91 9.19 9.20 9.19 Thursday. BAKEWLL 862-5555 U4iXm Yld Bid Asked Bid Chg 3.25May 1985 79.8 80. 4.25Mav. 1975-65 81 26 82.26 10.17 8.25Aug 1985 95.16 95.20 7.88May 1986 0 91 2 93.10 BOOAufl 1986 93.18 93.26 6.13 Nov 1986 85.20 86.4 9.00Feb 19B7 98 25 98.29 8.68 9.20 9.17 9.23 7.63NOV 1987 90.24 91 8.25AAsy 1988 94 94.4 .11 8.75NOV 1988 97 97.4 .12 9.21 If there's one thing every manufacturer should malke; its money.

If meres one thing every manufacturer should attend its our serninar. Railroads Get Safety Awards Three area railroads were bronze medal winners for employee safety in the E. H. Harriman Memorial Award program. Missouri Pacific Railroad Co.

won a Group A bronze medal for the second consecutive year. Group A is a classification for rail lines whose employees work a total of 20 million hours or more per year. St. Louis-San Francisco (Frisco) Railway took a bronze in Group (five to 20 million employee hours), and The Alton and Southern Railway Co. won a bronze in Group (less than 5 million employee hours).

The annual safety awards were initiated in 1913 by the late Mrs. Mary W. Harriman in memory of her husband, a pioneer in American railroading. Orthodontist Ad Program The American Association of Orthodontists, which is headquartered in St. Louis, said it will launch its first national advertising program.

The association said the informational campaign will point out that orthodontics provides patients with a source of oral health, while improving facial appearance. Batz-Hodgson-Neuwoehner St. Louis, will provide marketing, advertising and public relations services for the program. The association said it represents 8,500 orthodontists in the United States and Canada. 9 25 May 1989 100.2 100.4 .14 9.24 3.50Feb 1990 79.16 80.16 .6 5.99 8.25May 1990 94.6 94.14 .4 9.06 4.25 Aug 1987-92 79.18 80.18 6.46 7.25 Aug 1992 85.12 85.20 .6 9.14 4.00Feb 1988-93 80.8 81.8 1.2 6.75Feb 1993 82.8 83.8 .6 8 88 7.B8Fet 1993 89.14 89.22 .7 9.21 9.13 9.24 9.23 7.50 Aug 1988-93 86.6 87.6 8.63 Aug 1993 94.29 95.S 8.63 NOV 1993 94.29 95.5 9.00Feb 1994 98 98.2 12 9.24 9.91 10.02 9.65 9.73 9.80 9.84 9.94 9.91 10.01 10.03 10 00 9.90 10.05 10.04 9.87 10.06 9.63 10.04 10.06 9.98 9.95 9.78 9.73 9.69 9.80 9.83 9.76 9.63 9.83 9.73 9.78 9.78 8.10 9.76, 9.70 9.33 9.73 9.77 9.73 9.75 9.

7 99.27 99.29 .2 99.lt 99.18 .2 99.21 99.23 .1 99.1 99.10 .2 99.3 99.S .2 99.7 99.9 .2 99.1 99.3 .2 98.2 98.26 .1 99.13 99.15 .1 98.24 98.26 .1 98.6 98.8 .2 98.10 98.M .2 98.17 98.21 .2 98.15 98.17 .2 98.8 98.10 .2 98.16 98.20 .2 98.8 98.10 .2 95.26 96.2 97.15 97.17 .3 98.3 98.7 .1 97.28 98 .2 97.30 98.2 .2 97.7 97.11 .2 98.7 98.11 .2 97.24 97.28 .4 98.9 98.13 .3 98.13 98.17 .2 96.14 96.18 .4 99.1 99.9 .3 98.5 98.9 .3 96.10 96.14 .5 98.14 98.18 .4 98.22 98.26 .3 93.14 93.22 .2 96.10 96.14 .4 99.8 99.12 .5 94.26 94.30 .4 100.3 100.7 .3 99.29 99.31 95.19 95.23 .5 96.5 96.9 .5 99.29 99.31 .5 95.6 95.10 .4 99.22 99.24 .6 4.13M6V 1989-94 79.18 80.18 .2 3.00Fet 1995 79.6 80.6 7.00May 1993-98 83.10 84.10 3.50 Nov 1998 79.18 80.18 .10 BSOMav 1994-99 93.16 93.24 .8 7.88Feb 1995-00 B8 88.8 .10 8.38Aug 1995-00 92.8 92.16 .6 8.00 Aug 199641 88.28 89.4 .7 8.25May mm 91.2 91.10 .5 7.63Feb 200247 85.2 85.10 .8 6.11 4.81 8.70 5.07 9.19 9.15 9.18 9.15 9.13 9.08 7.88 Nov 2002-07 89.22 89.30 .10 8.85 RateMal date 6.l3May 1979 1979 7.75Jun 1979 4.25 Jul 1979 6.2SAug 1979 6.MAug 1979 6.63AUQ 1979 6 63 Sep 1979 B.WSep 1979 7.2SOct 1979 6.25NOV 1979 6.63NOT 1979 7.00Noy 1979 7.13NOV 1979 7. 13 Dec 1979 7.50Dec 1979 7 50 Jan 1980 4.00Feb 1980 6.S0Feb 1980 7.63Feb 1980 7.50Mar 1980 7.75Apr 1980 6 88MJV 1980 OOMay 1980 7.63Jun 1980 8.25Jun 1980 S.SOJul 1980 6.7SAug 1980 9 00 Aug 1980 1 38 Aug 1980 6.88Sep 1980 8.63 Sep 1980 B.MOct 1980 3.50 NOV 1980 7.13Noy 1980 9.25NOV 1980 5 880ec 1980 9 88 Dec 1980 9. 75 Jan 1981 7.0OFeb 1981 7.38Feb 1981 9.75Feb 1981 6.88Mar 1981 93Mar 1981 9. 75 Apr 1981 7.38Mav 1981 7.50May 1981 6 75Jun 198) ,7.00 Am 1981 7.63AU9 1981 8.38AUO 1981 6.7SSep 1981 7.00NOV 1981 7.75NOV 1981 7.25Dec 1981 1982 6.38Feb 1982 7.88Mar 1982 7 OOMay 1982 8 OOMay 1982 9.25May 1982 l.25Jun 1982 I.UAug 1982 l.3BSeo 1912 9.13 8.38 Aug 2003-08 92.2 92.10 .6 8.75 Nov 200348 95.22 95.26 .10 9.16 9. 200449 99.7 99.9 .7 9.20 Please use the coupon, or call us at 576-6690.

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