Evening star., 1949-01-30
Symptoms of DefIution

Symptoms Of Deflotion
For the third straight month, according
to the Bureau of Labor Statistics, the cost
of-living index-covering food, clothing,
rents, furniture and other items affecting
the consumers pocketbook-h shown
fractional but significant decline. This
time it is down 0.6 per cent from the mid
November figure, and the indications are
that the next BIS report will disclose a
similar drop-perhaps sharper one-for
the period from nid-December to Jan
uary Is.
This continuing decline, of course, still
leaves the cost of living far above the pre-
war level. In terms of the BIS index, as
of December IS, it stood 2.6 per cent higher
than year ago, 20 per cent higher than
June, l946, and almost "a per cent higher
than August, 1885, Nevertheless, as
result of the steady three month drop, it
is 1.8 per cent under the peak inf1ationary
figure OF last summer and there appears
to be good reason to expect that the down.
ward trend will not exhaust itself for some
time to come, though economists are too
cautious to make unqualified predictions
Such caution is still in order because of
possible inflationary developments in the
international situation and because it is
not yet clear just what labors demands
will be in the months Immediately ahead.
On the latter score, however, it is note
worthy that more than 100000 members
OF the C1O auto unions, under their Gen.
eral Motors contracts providing for either
upward or downward wage adjustments in
accord with the BIS index, will face a
two-cent hourly cut if the present trend
continues another month. 1t is noteworthy,
too, that the CLOS Amalgamated Clothing
Workers have just decided against asking
for fourth postwar pay boost, their deci-
sion being based on the fact that there has
been falling off of customers in the mems
apparel business.
Other symptoms worth noting include
the return of the five-cent cigar in places
like New York, slashed prices in such lux
uries as furs, chain-store bargains in shoes
sacrifice" post-holiday sales of radios and
haberdashery items, cheaper steaks and
vegetables in food stores, a growing
tendency among restaurants and sandwich
shops to offer patrons more for their
money, and the ability of many auto
dealers in key parts of the country to offer
immediate delivery on number of popu-
lar models. The latter development seems
especially significant. Only few months
ago customers had to wait long time for
new cars, but now the industry is making
off-the-f1oor sales and beginning to stress
the need for aggressive salesmanship to
get business
In other words, in the automobile and
other fields, the days of big backlogs Of
orders seem to be nearing an end, If they
are not already over. Owing to our un-
precedented peacetime production, supply
has come more and more into balance with
demand, and buyers are becoming choosier
and less Inclined to spend money on high
priced things which they can put off get
ting. In short. the consumer needs built
up during the period of war shortages are
not nearly so acute now as they were
year or two ago, and our industries. in
increasing numbers. are finding it neces-
sary to look for customers for the first
time in long time
Apparently we are thus entering q. period
(subject to change without notice, ac-
cording to some Of the more cautious
economists when speculation must center
on the defationary outlook Expert opin-
lon (also subject to change) seems gen.
orally agreed that serious recession is
not in sight, but that the present downward
trend will continue until prices are sta
blllZed at sound level considerably above
pre|ar, yet low enough to add substantially.
to the dollars current purchasing value.
So nlSny "ifs' are involved in all this, how
ever, that prophecy is hazardous.