Evening star., 1953-01-25

prices, also gagged by BIS, gener.
ally has been upward.
These doings, however, are not
a mystery to BIS Commissioner
Evan Clague and his staff. There
are several reasons for this seeming
inconsistency. The big one is that
there are many commodities sold
at retail which have little or no
connection with the wholesale busi-
ness. Quite a few do not appear
on the, wholesale index at all. It
just happens that nearly all of these
are found in the retail categorieS
which still are moving steadily up
ward in price. The biggest item not
included in the wholesale index is
rent. Others are bus, Streetcar fares
and other forms of transportation,
haircutS. beauty parlor operations
and whole host of other services.
Worrying Rent Indexes
Rents. like other items in the BIS
living cost index, have been gauged
On the basis of the 1935-1939 aver.
age equaling 100. Starting with the
next index, due in late February, the
cost of living will be tied to l947-
1949 base.
In the major cities of the coun-
try as whole the rent index
now stands at slightly over l40, the
lowest of any of the six living cost
categorieS. The index for New York
City, however, where controls have
been on continuously, is under 100.
On the other hand, in Birmingham,
Ala, where controls were removed
some time ago, the index is 205.
Mr.. Clague refers to rents. fuel. elec-
tricity and refrigeration, and the
miscellaneous" category. as "slow-
movers" because the prices of many
of the items are controlled. But it
would be hard to sell that descrip-
ton to the people of Birmingham or
other places where controls have
been removed.
There is another reason for the
difference in retail and wholesale
price trends. It is that the prices
of raw industrial materials and Of
wholesale commodities leaped far
higher in the weeks following the
outbreak in Korea than retail prices
did. Those commodities were sub
ject to wild speculative buying and
to storing UP in anticipation Of
shortages. The buying panic among
consumers was not so pronounced.
So, when the fears of all-out war
were allayed, beginning in early
1851, wholesale levels were forced
downward.
Actually, retail prices have been
fairly stable since early 1851, and
unusually stable the past IL months.
The all-time peak of consumers
prices was reached last August Is
and equaled on November 15.
Price Drop Probable :
The last BIS index, rejecting re-
tail prices as Of December Is, showed
a drop of two-tenths of one per cent.
The index released in February
prboably will show prices at about
the level OF a year ago.
Food prices which carry much
weight in determining living costs
as a whole, are erratic in move.
ment and extremely difficult to
forecast because the supply of food
depends on the weather and other
imponderables. The long-range
forecast now is for a favorable
growing season and large food crops.
If that proves correct, prices will
continue to drop. But the fact that
the Government supports the prices
of many farm products will prevent
any great decline of retail food
prices. High cattle prices have
dropped sharply. but the prospect
is for very small spring pig crop
which, in time, will shift some Of
the meat-eating load onto beef and
tend to steady the cattle market.
1t looks like the consumer can't
win