FORTUNE'S annual compilation of figures for the nation's 500 largest industrial companies, published this week, serves as a kind of X ray of the corporate sector of the U.S. economy: it illuminates trends that can be discerned only dimly in individual company reports. Among last year's notable tendencies were a somewhat disconcerting ability of the big companies to cut employment while increasing sales, a continued sharp decline in merger activity and what looks like the beginning of a turn away from diversification.

Overall, 1971 was a middling-good year for the 500. They increased total sales 8.4%, to nearly $503 billion,...

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