Evening star., 1947-03-16
Officials See Prices
I0f Food and Textiles
Dropping This Fall
By the Assoeioted Press

expect prices to drop by next fall
on the products which have gone
highest since OPA was removed,
such as cotton goods and food.
The forecast is made in a cau-
tious official report, soon to be pub
lished. Commerce Department
economists gave these unofficial
conclusions yesterday in interviews:
l. The trend down will be mild,
not true recession
2. 1t will start around midyear
with drops in a few lines, then gain
speed as more items come into bal
ance with demand.
3. 1t will be uneven. Some prices
| may still be rising while those
farthest out of line come down.
Overpriced Items.
The study lists these items as
priced 'far in excess of their usual
worth and therefore very likely to
decline:
Food. cotton goods, shoes, lumber.
paint, drugs, leather, fats and oils.
Small declines, if any, are fore
seen this year for automobiles, con-
sumner durable goods generally,
woolens and worsteds, furniture and
house furnishings, iron and steel
products, paper, pulp, grains and
livestock.
The report deals item by item
with the 675 products which make
up the Governments wholesale
price index Prepared by Louis j.
Paradise, chief of the business struc-
ture division, and Lois H. Rodriguez,
economist, it will appear in the
March issue of the monthly Sur
vey of Current Business" to be pub
lished in early April.
Profits can be maintained at q
good level, the report says, despite
the prospective decline in prices.
This will be true even in the soft"
lines like food and clothing, which
will see a decline in demand as
bigger supplies of hard goods" take
an increasing share of the consum-
er'S dollar.
LecWay rs seen.
1.-THE fact that many of these COM
modities-notably those in the farm
category - are yielding unusually
large margins means that there is
leeway for adjustments without de-
stroying the probability of the
trade the study says.
Furthermore, we may expect i'm
provement in the efficiency of pro-
duction and distribution as output
in some industries is better organ
lied on high and Sustained level
an improvement that obviously
should be shared with the consumer
in terms of reduced prices"
The economists report that the
price upsurge after the removal of
price controls was "the sharpest for
any equal period in our history" 1t
amounted to Is per cent from June
to January at wholesale and Is per
cent at retail.
The upswing carried some items
far above their normal relationship
to the all-commodity index, the re-
port says, but this was the result
of Temporary inf1uences"-in most
cases, an extreme shortage.
Changes Predicted.
"As 1947 advances, considerable
change in the price structure may
be expected" the report notes.
The startling" advances have
been concentrated in relatively few
commodities, but ones which have
a major impact on general costs of
living.
Meat was 81 per cent above the
average wholesale price level on
February %, the study says. Shoes
were Is per cent above, drugs 18
per cent, paint 80 per cent, lumbe1
% per cent, cotton goods 10 per cent,
fats and oils IA per cent.
On the other hand, Woolens and
worsteds were "a per cent below the
general price trend at wholesale,
while petroleum products were IA
per cent below. Metals generally
were right in line with the average
movement, as were farm imple-
ments, home furnishings, automo-
biles and trucks.
In the latter lines. little or no
price decline is to be expected. the
Commerce Department officials say.
Neither will there be uniformity
in the timing of price decreases,
they say, since some shortages will
last longer than others. Some cot
ton goods are expected to feel a
softening market around midyear;
lumber, except hardwood flooring,
in the fall; and fats and oils not
until the year-end or beyond.
Meat should be more plentiful
later in the year, lumber is some
what less scarce already, and leather
and shoes will be in better supply
late in the fall, the report indi-
Gates.
Thus, the supply situation will
operate to relieve the pressure ir
those areas where price advances
have been, excessive in recent
months, and should be factor IL
redressing balance" it concludes