Necessities: New Definition

The Bureau of Labor Statistics last week completely revised its cost-of-living index to bring it up to date and include what Americans now consider "necessities." New BLS additions to the index: television sets, frozen foods, canned baby food, cola drinks, men's rayon tropical suits, home permanents, velocipedes, electric toasters.

Despite all these bountiful additions, the index was little changed; the importance of some items already in the index was lessened to allow for the new things. On the old basis, the index stood at 181.6 in January, up 3.2 points from December; on the new basis, it stood at 181.5, up 2.7 points. Reason for the slower rise: the new1 index gives less weight to food and rent. While the cost of food and rent has been going up, so have incomes. Since 1941, when the index was last overhauled, consumers have been spending a smaller proportion of their incomes on food and rent, a larger proportion on such things as autos and television. Thus in the new index food accounts for only 33.3% of the total v. 41.6% before, rent accounts for 11.6% v. 13.8%, and miscellaneous (including autos and TV) has been boosted from 22.1% to 32.9%.

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