48 Fed. Res. Bull. 1 (1962)

handle is hein.journals/fedred48 and id is 1 raw text is: Stability in Prices

more competitive in 1961 than in earlier
postwar periods of business expansion.
Prices of some commodities advanced, but
prices of others declined because of larger
productive capacity and of greater competi-
tion from foreign supplies of goods. While
industrial production in December was up
one-eighth from the recession low reached
in February, industrial commodity prices as
a group were a little lower than they were
in early 1961. Moreover, their level was only
slightly above the high reached in 1957.
In the corresponding period of recovery
after the 1957-58 recession, in contrast, in-
dustrial commodity prices advanced nearly
2 per cent. At that time there were increases
not only in prices of materials that are typi-
cally sensitive to business fluctuations, but
also in prices of steel mill products and many
finished metal products in response to de-
layed increases in costs growing out of the in-
flation that accompanied the 1955-57 boom.
Fluctuations in prices of foods in recent
years have reflected other influences more
than short-run changes in industrial activity.
Mainly as a result of larger output and mar-
ketings, prices of livestock and products were
a little lower in late 1961 than a year earlier.
Meanwhile, prices of crops increased mod-
erately as Federal price support levels were
generally raised. Toward the end of 1961
average wholesale prices of food commodi-
ties were somewhat lower than in late 1960.
The consumer price index rose less than
1 per cent in 1961. Retail prices of com-
modities late in the year averaged about the

same as a year earlier, with foods down
slightly and other goods up somewhat. Av-
erage prices of consumer sbrvices continued
to rise, but the increase of 1.5 per cent was
the smallest of any postwar year.

NOEA.Based on Bureau of Labor Statistics data, shifted t(,
1953-54=100. Latest figures shown, December estimates.
Along with the upturn in business activity,
average prices began to rise for such cycli-
cally sensitive materials as steel scrap, lum-
ber, rubber, and hides. As shown in the
chart on the following page, the index of

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