Indicator of the Week

It seemed almost too good to be true. After a summer of roller coasting up and down, the Wholesale Price Index for September dropped 1.5%, seasonally adjusted--its steepest slide in a quarter-century. Prices of farm goods, the worst culprits in this year's inflationary saga, led the decline, dropping 5.2%. Costs for livestock, corn, vegetables, fruit, live poultry and eggs were all substantially lower.

Alas, it was too good to be true. The September fall in wholesale prices canceled only part of the index's explosive 6.2% rise in August. Administration spokesmen quickly warned consumers not to expect a sudden downturn in store prices; indeed, Herbert Stein, chairman of the Council of Economic Advisers, bluntly predicted a continued "fairly rapid rise in retail food prices" in the next six months. Industrial prices, which most economists regard as a better gauge of basic inflationary trends than mercurial farm prices, rose a substantial .7%. Even if the rise in living costs tapers off somewhat in the months ahead, the consumer would still not be getting any bargain. Despite the September drop, wholesale prices are 16.6% higher than they were a year ago.

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