Soft Spots

How big a dent had the commodity price break made in the cost of living? Last week Ewan Clague, boss of the Bureau of Labor Statistics, called reporters into his chart-filled conference room to tell them. He had just finished collecting last-minute data, by telegraph, from twelve cities, kept his staff up most of the night assembling it. Said Clague: retail food prices have declined 3 to 4% from their alltime high of Jan. 13.

It was one of the sharpest breaks in the history of the index, but it was far from matching the drop of some 20% in grain prices in three weeks. But Clague hoped that more of the lower prices would soon be passed on, once businessmen were sure that grain prices were going to stay down.

On last week's showing, they could not be sure. Grain prices seemed to have found an uneasy bottom. Corn and wheat seesawed, ending the week about where they started. The stockmarket also caught its breath; trading was small and cautious. Traders, like most other businessmen, were waiting to see how severely the crash in commodities had shaken the boom. Last week, a few soft spots appeared.

Department stores were already beginning to feel buyer resistance. For the first time in many weeks, sales for the week ending Feb. 14 fell below the corresponding 1947 period. They dropped most in clothing. In New York City the garment trades, which should have been hustling with summer business, were hard hit. Some 10,000 had been laid off or put on part time. "Popular"-priced dress manufacturers reported that their clothes were not popular at all. They blamed the "unreasonable" prices charged at the mills for their cloth. But many mills reported that they were booked solidly through June. Nevertheless, many a merchant thought that high-priced textiles were as shaky as high-priced grain had been.

Consumers were also beginning to cut down on food buying. As a result, the Wall Street Journal, surveying eleven cities, found most food sellers holding back, too. Said one Chicago storekeeper: "We don't know how much to buy now or how much to pay for it." No one was worried much yet. But businessmen were keeping an anxious eye on those soft spots.

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