The Omaha guide., 1937-09-11
E ConOmiCsRevieW

GfICe5 continue 10 fISc. Oufllg
the first half Of this year, accord
ing to a Business Week survey,
wholesale prices were 8 per cent
higher than in 1886. Raw materials
were up ID per cent. Farm pro-
ducts cost 18 per cent more. Food
increased 6 per cent. The general
cost of living was 5 per cent great.
er.
Ono Of the few manufactured
articles whose price had not been
generally advanced, was the auto
mobile. Car makers always dread a
price increase - because, they
think, it will result in a large num-
Der Of motorists driving their old
cars q few months longer, and so
reduce sales. And the business is
SO highly competitive today, es-
pecially in the $60-$1,s0O price
field, that every maker is 10th to
take the step and charge more for
his cars.
A short time ago, however, de-
finite signs appeared that the mo-
tor industry is at last falling in
line with the general upward price
trend. Ford announced price in
creases of from SIS to S35 on his
line of ears. General Motors fol-
lowed suit almost Immediately,
with increase starting at S35 in
the low-priced Chevrolet, and rang
ing to 500 on the relatively high
priced Cadillac. A number of Chry.
sler cars likewise were given higher
price tags. 1t is believed that the
entire industry will soon fall in
line, from necessity, with this pol
icy, though some makers may de
fer price boosts until the 1898 mo-
dels come out this fall. Even so, il
is doubtful if the additional ex-
pense in manufacturing operations
experienced by motor makers this
year-caused by higher material
and labor prices-will be passed on
to the public. Chances are that
around half of the increase will be
added to the selling price of the
cars and the rest absorbed by the
companies, which will then show a
smaller profit per unit and will de-
pend on great sales.
Higher a prices are of import
ance as a sign Of the times-in
the last two years, there have been
steady, continuous increases in the
cost of practically everything, with
the exception of the rates of GER
tain service industries. Big worry
to businessmen is whether the pu-
! bile will accept higher prices with
equanimity-in a few lines, such
as meats, higher prices have re-
suited in decreased sales. However,
most business have no choice in
the matter-operating expenses
have risen so materially that it is
necessary to consistently raise
prices to avoid losses.
Other business news OF interest:
Construction: The long antici-
pated boom" in home building
sens to be underway. Residential
construction during the first half
of the year was AZ per cent ahead
Of the same period last year. The
steady upsurge in rentals, plus a
deficiency of houses for rent in
many cities, is an important fac
tor.
Railroads: Will probably begin
buying new equipment on a big
scale soon. Traffic has increased so
rapidly that a number of lines fear
chat their facilities will be made
quate for fall and winter freight.
Retailing: A big fall season is
anticipated, perhaps the best since
1880. Department stores in most
sections are stocking heavily.
Power and light: Electric output
recently hit an all-time high peak.
Result is that major public service
companies are steadily increasing
generating capacity, in line with
their policy of always being ahead
Of demand. Fall and winter power
use will undoubtedly set o re
cords.
Wages; Continue to rise slowly.
Employment during the summer.
when seasonal adjustment is made
was at a good level. There have
been fewer labor troubles lately
and it would seem that the unions
are slowing down on direct action
tactics, in order not to ALLEVIATE
public sympathy. In spite Of the
progress of unemployment, Cover
ment relief rolls are still almost
as big as ever.