The Omaha guide., 1948-07-24
~HIGHLIGHTS

Hsooeninqs That Affect the Dinner Pals, Dividend Checks
and Tax Bills of Every Individual National ana Inter
national Problems Inseparable from Local Welfare.
Late, in June, the Federal Reserve Board released its
third annual Survey of Concumer Finances. This study WINCH
is prepared by a University of Michigan research center, Is
designed to find out what typical families want to buy now
their finances shape up, what they think of the economic
future, etc. 1t is based on interviews with severai thousdhu
spending units"-a spending unit being defined as a graup
of people living under one roof whose incomes are pooled
According to a Business Week breakdown Of the survey.
eff consumers make good their intentions, 1913 IS gong to be
even bigger than 19H in purchases OF houses, automoDlies,
and other durable goods. Two years OF postwar production
have made no dent you can see in the backlog OF demand
For example-the waiting market for automobiles IS In the
8 billion dollars Darcket; housing expenditures may run as
high as 10 billion dollars; consumers who want furniture
washing machines and other durable goods apparently are
ready to spend between 3 billion and 4 billion dollars before
the dawn OF 1919.
Some obvious qualifications must enter into consideration
of these findings. The interviews were taken during the first
two months of the year, and in the time that has ensued there
NAV have been changes in thedesires and tie financial positions
of many potential buyers. OF peraps greater moment, even II
consumers are still able and willing to buy they anticipated
months ago, all of the goods will not be available. The market
for automobiles, for instance, may approach four and halt
million units. The industry can't produce that many this
year, and some of its top men think it may be late 1851 before
it will be possible to walk into a showroom and pick a car
of ones choice off the floor. Also, it does not look as if new
housing construction will be able to come anywhere near
meeting the demand for a considerable time to come. The
other durable goods-radios, appliances, etc-are IN good sup
ply, though it is not always possible to Immediately lind some
particular make and model.
In any event, buying is naturally conditioned on pur-
chasing power Here the situation remains bright The survey
found that two-thirds OF the spending units still had a liquid
backlog-though it was not so large as in l947. And there Sas
been a noticeable increase in instalment purchasing.
One Of the most interesting phases Of the survey was
concumer opinion Of what lies ahead, both for themselves and
for the nation as a whole. Twenty-seven per cent expect that
their income. will be larger a year hence, SO percent anticipate
no particular change, and only 10 per cent look for a drop,
with the balance uncertain This is a somewhat more optinis-
tic outlook than was found in similar surveys sponsored by
the Federal Reserve Board in 19H and 1916.
On the subject of the general outlook, AZ per cent forsee
good times, 10 per cent little or no change, and 20 per cent
are afraid that bad times are coming. Thist 900 represents
a brighter point of view than in the preceding surveys.
The survey takes into account spending units at all the
principal levels. AS is to be expected, the reactions varied
greatly between lower level and upper level income groups.
As compared with the previous year, the over $1,000 units
showed a heavy increase in projected purchasing. In the under
$1,000 groups, on the other hand, there was a very heavy
decline. This is the inevitable result Of the continued rise in
prices.
All in all, hoover, the survey supports the widely held
opinion that the period Of high purchasing power wit near
peak employment is here to stay for a while. When people
with money are unable to buy new cars, they will buy used
ones. If they find new housing scarce or too expensive, they
will bolster the old-hone market. And many of them say they
are prepared to pay still higher prices than obtained now.
This and all comparable. surveys are necessarily based on
a short-term outlook. No one is willing to stick his neck out
on what may happen over a period o f some years. There has
been a steady decline in family savings, most marked in the
middle and low income groups. Even so, the countrys savings
backlog is extremely high, so the drop hasn't occasioned too
much worry as yet. j..