The Washington times., 1935-12-17
SEAS0NCHANGE
MAKES SURVEY
DIFFICULT
BY LEWIS HANEY,
Professor Of Economics, New York
University

Gently been q little more mixed
and "spotty," the genarel level of
activity is good. The year prom
iSeS to end with a sustained gain.
One important element in the
current uncertainty lies in the sta
tiStical confusion caused by the
change in the automobile season.
This brought a sharp rise in auto
mobile production, which in
creased the demand for steel, and
probably added to railway car
loadingS. The point is that all
this is unusual for the season, and
makes comparisons difficult.
It has exaggerated the re-
cent rise in industrial activity,
thus tending to offset the usual
and normal let-down at the end
Of the year. This means that Cd
comparisons with a year ago are
misleading, and that (2) changes
from week to week are hard to in
terpret.
A year ago, the new automobile
season had not yet begun, and
production was low. Accordingly,
automobile manufacturers were
taking relatively little steel. Thus
It means little now to talk about
how much these induStrialS are
above a year ago.
In studying the movement of
figures from week to week or
month to month, we have to al
low for the usual seasonal
changes. If business in a given
week does no better than make
the same gains or losses that it
usually does, it is really not chang
ing. Thus the new automobile sea-
son makes it impossible for us to
know just how things are really
going, because we do not know
what is usual under the new con-
ditionS.
Various statistical agencies are
trying to deal with the problem.
but there is no satisfactory way.
II we don't allow for seasonal vari-
alton, the figures mean little. If
we do make such allowance, we
have to base it on what used to
happen when the automobile sea-
son began in the spring. One
agency estimates on this basis that
automobile production a week ago
was down from 119 per cent Of
normal to HOS per cent. But no
one knows.
AL we know is that there has
been a sharp rise on account Of
the change in seasons, and that
pepole have bought new cars
freely. This promises well. It
proves that people will buy new
cars in large volume at any time
Of year. And if there is letdown
IN buying for a while now, we
can know theE it is probably just
the result of a new seasonal vari-
alton" It would not mean any
decline in the total number of cars
sold in the twelve months.
For similar reasons, steel pro-
duction movements are now hard
to interpret. We do not know how
much Of the recent gain has been
caused by the motor squirt. A
little Of the usual year-end SLOW
ing down is now affecting steel
production, but this is not disturb
ing.
The current rate Of steel pro-
duction has not been exceeded
since June, 1888, and it is now in
better relation to shipments and
consumption than then.
Lumber production has turned
up. Cotton cloth production
holds about steady at a high
level.
The most doubtful index is that
Of railway carloadings. for in
three of the last four weeks
they have hardly done as well
as usual at this season. 1t is
folly to say that they are "up''
merely because they are higher
than year ago, or because they
were higher in the week follow
ing the Thanksgiving holiday
week.
So it goes with commodity
prices. These averaged lower
last week, but the decline was
chiefly due to the crack in silver
which affected other metals, cot
ton, and probably silk and bur
lap. On the other hand, an
arbitrary political mark-up of the
price of wheat by Argentina
caused a rise in grains. Thus
we do not know how to interpret
the price movement in any
fundamental way.
Political action and changing
conditions affect our statistics.
Obviously, there is at the mo-
ment some uncertainty. as has
been foreshadowed by the recent
let-down in the stock market,
European developments are dis
couraging. But retail trade
seems to be running at the best
volume in five years. Building
activity is on the up grade.
Bank loans have begun to ex.
pand. 1.-THE Government will
provide" We are initiating.