Family Economics Review [Jan. 1958]

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In titute of Home Economics, ~gricultural Research Service_,
UN ITED STATES DEPARTMENT OF AGRICULTURE illllll!iii~i!~illill~~imi~~i!fJ
Prepared for home agents and home economics specialists of the Agricultural
Extension Service, this publication reports current developments in family
and food economics, and economic aspects of home management.
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ANNUAL OUTLOOK ISSUE
CONTENTS
THE OUTlOOK FOR 1958
The General Economic Outlook............................... 2
The Agricultural Outlook................................... 6
Farm Family Living Outlook................................. 8
The Outlook for Housing, Housefurnishings and Equipment.... 9
The Outlook for Clothing and Textiles...................... 17
The Outlook for Food....................................... 23
CONS~ PRICES • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 26
ESTIMATED COST OF ONE WEEK'S FOOD............................... 26
ARS 62-5
January 1958
Washington, D. C.
The 1957 Agricultural Outlook Conference was held at the Department
of Agriculture in Washington, D. c., November l8-2l. In attendance at
the conference were delegates from 47 States, Alaska, Hawaii, and Puerto
Rico. The delegates included mainly extension home management special­ists,
farm management and agricultural economics specialists, and
marketing specialists . There were also guests representing several
foreign countries, business organizations, and banks , as well as various
Government agencies .
The first day of the conference was devoted to a consideration of
the world situation as it affects the outlook for agriculture, and the
national economic situation and outlook for 1958. On Tuesday, the various
aspects of the agricultural outlook for 1958 and the effects of marketing
changes on the outlook were reviewed.
Three family living sessions were held. One gave attention to the
outlook in 1958 for specific consumer goods . At the other two, changes
in family spending patterns over the past 15 years were discussed. Con­sideration
was given to changes in spending for current consumption as a
whole, for housing and household furnishings and equipment, for clothing,
food, medical care, recreation and reading, and education. The implica­tions
of these changes for the Extension program were discussed by a
panel made up of Federal and State Agricultural Extension personnel, and
members of the staffs of the Agricultural Research Service and the
Department of Health, Education, and Welfare .
This issue of Family Economics Review presents some of the material
from the conference which is of interest to home economists .
THE GENERAL ECONOMIC OUTlOOK
Excerpts from a talk by Nathan M. Koffsky,
Agricultural Economics Division, Agricultural Marketing Service
After more than 2 years of a steady advance to new highs, economic
activity in the Nation has leveled off. Since early 1957, the Nation's
real output of goods and services has held fairly stable . Prospective
changes in demands from consumers, from business and from Government
indicate that, on balance, the more or less sidewise movement of the
economy can be expected to continue well into 1958. This appears to be
the most probable development . Even so, the course of events could
dictate otherwise. The cold war has spread into space with its impact
on the economy not yet clear.
Economic growth over the past l2 months was relatively small and
most of it occurred by the end of 1956. While the gross national product-·
a measure of the value of all goods and services produced--rose by some
$22 billion, or over 5 percent, between the third quarter of 1956 and the
third quarter of 1957, most of the gain reflected increases in prices .
··3-
Real output was up perhaps 1.5 to 2 percent, contrasted with an increase
of about 3 percent between the third quarter of 1955 and the same quarter
of 1956. This latter is about the rate we have come to associate with
normal economic growth .
Total employment has held fairly steady this year. Nonagricultural
employment remains higher than a year ago while farm employment continues
its long-term decline . The average workweek in manufacturing, however,
is shorter than a year ago. So far this year, the civilian labor force
has grown only some 400,000 persons in contrast with a gain of more than
1.5 million from 1955 to 1956. This reflects the fact that the uptrend
in new entries of married women into the labor force has come to a halt
this year. Unemployment is somewhat higher than last year, but has been
well below 3 million persons in recent months.
While most measures of real activity have leveled off this year, most
retail prices have continued to move up persistently. The Bureau of Labor
Statistics index of consumer prices and the Agricultural Marketing Service
index of prices paid by farmers for family living items have increased
more than 3 percent over the past year. Retail food prices rose about 4
percent.
Changes in demand over past year
What have been the changes in demands which have shaped the economy
over the past year? Consumers increased their expenditures close to $15
bi~lion, or 5 percent . Consumers accounted for almost two-thirds of the
total increase in expenditures over the past year as compared with roughly
ha!f in the preceding year. Private investment rose less than 2 percent.
Government expenditures for goods and services increased almost $7 billion,
or 8 percent .
Consumer sector.--It is noteworthy that expenditures for each of the
major categories--durables, nondurables, and services--increased about the
same percentage . A year ago, expenditures for durables were down substan­tiallj,
largely reflecting a decline in automobile sales. This year, sales
are running slightly ahead of a year ago and prices are higher. Expendi­tures
for nondurable goods, including the impbrtant food group, and for
services continued to move up in response to higher consumer incomes, as
they have in other recent years (table 1).
Consumer expenditures have risen slightly more over the past year
than consumer incomes after taxes. Thus, the rate of savings out of cur­rent
income has declined from about 7 percent in the third quarter of 1956
to 6.5 percent in the third quarter of 1957. Consumer credit outstanding
increased some $3 billion last year and now represents a little over 14
percent of consumer income after taxes, a slightly higher percentage than
a year earlier. Installment credit extended, particularly for automobiles,
continues to exceed repayments.
-4-
Table 1 . --Personal Consumption Expenditures
(Seasonally adjusted annual rates)
Item
3rd quarter
1956
3rd quarter
1957 Change
Billions of Billions of Billions of
dollars dollars dollars
Personal consumption expenditures
Durable gpods • • • ••• • •• •••••••••
Nondurable goods •• • ••••••••••••
Services • • •••• • • , ••••••• • ••••••
Consumer disposable income •• • ••
Savings • • ••• • •• • •••••••••••••••
Personal savings rate • ••••• • •••••
268 .6
33 .0
134.4
lOl. l
288.8
20.3
Source: U. S. Department of Commerce .
283 .2
34 .7
142. 5
106.0
303 . 0
19.8
6 . 5%
+ 14 .6
+ 1.7
+ 8 .1
+ 4 .9
+ 14.2
- ·.5
- · 5%
-~
Consumer incomes have continued to rise most of this year despite the
leveling in employment . Increasing wage rates have augmented the flow of
income, though at a slower rate than in 1956. There has been some increase
in social security payments, reflecting wider participation . Despite the
ri~e in prices and increase in population, the per capita purchasing power
of income available for spending has changed little in over a year .
Investment sector . --Outlays for new residential construction in the
third quarter of this year were 7 percent less than a year earlier . New
nonfarm housing starts this year will total approximately l million units
compared with l.l million in 1956 and 1 .3 million in 1955 . However, the
average cost is higher, partly reflecting bigger homes . Mortgage credit I
is still tight and interest rates are higher than a year ago . Mortgage
debt outstanding increased less in the first half of this year than in the
first half of 1956. It appears , however, that the decline in housing,
which has been substantial over the past 2 years , has been arrested. Hous·
ing starts have leveled off in recent months and the rate of expenditure
in the third quarter was about the same as in the second quarter .
Outlays for farm construction and farm machinery are apparently show­ing
some improvement in 1957 over 1956. The strong uptrend in business
outlays for plant and equipment, which has been a strong expansionary force
in the economy for several years, has leveled off in recent months .
Government sector.--The rate of Federal purchases of goods and serv­ices
increased over $3 billion between the third quarter of 1956 and the
third quarter of 1957. This was largely in expenditures for the national
security, which now account for ab~ut 10. 5 percent of national output
-5-
compared with 10. 2 percent a year earlier. There was a slight decline in
the rate of such outlays between the second and the third quarters. In
the fiscal year 1956-57, the Federal budget showed a surplus of $1.6 bil­lion,
the same as in the previous year. On a cash basis, including re­ceipts
and payments of trust funds, the surplus was reduced to $2.1 bil­lion
compared with $4. 5 billion in fiscal 1955-56, largely reflecting
heavier payments under the Social Security program. State and local
government expenditures continued to expand. The highway program is en­larging
and there appears to be no letup in outlays for schools and other
public facilities .
Prospects for 1958
With these trends as background, showing the diverse forces presently
operating in the economy, let us appraise how the prospective demands and
expenditure flows from these three major sectors--consumers, business and
government--may affect the economy.
Government sector.--There appears to be little doubt that the uptrend
in State and local government outlays which has persisted through the post­war
period will continue in 1958. The highway program will be a more im­portant
factor next year than this year, and will likely grow more important
in the years beyond 1958. The needs for public facilities increase as our
population grows not only in size but in mobility. We need particularly
to prepare for an accelerated onrush on our school systems a few years
hence.
So far as Federal Government outlays are concerned, the Budget Review
of October suggests some reduction from the current rate of defense out­lays
in the first half of 1958. Beyond mid-1958, we do not know. However,
the reduction in defense outlays during the first half of 1958 that may be
realized, is not likely to exceed the rise in State and local government
expenditures and might be less. Thus, the total flow of expenditures from
government should at least hold steady through mid-1958.
Investment sector.--The total flow of expenditures from the investment
sector might well diminish in 1958. Residential construction is expected
to show some improvement from the current relatively low level. The de­cline
has been arrested. FHA terms have recently been liberalized. And
mortgage credit may be more readily available, especially if the demands
for funds by business for capital investment should ease. Such an easing
in capital investment appears to be a fairly strong probability in 1958.
We face the probability that the sum of the flows of expenditures by
business and by Government may gradually work lower as 1958 progresses.
I t seems likely that the major impact of any reduction in defense outlays
will occur in the first half of 1958, while that of investment in new
plant and equipment may come later. The completion of projects presently
underway would provide a considerable cushion to investment outlays for
some months ahead.
-6-
Consumer sector.--Under circumstances of a gradual reduction in com­bined
expenditures by business and Government, the consumer could well
take up the slack. Consumer spending has been strong, and in the most
recent quarter the annual rate of such expenditures increased by more
than $4 billion, or over $1 billion more than the increase. in the rate
of consumer income. Although the rate of saving out of current income is
lower than a year ago, it is still substantially higher than in 1955 . The
saving rate may work lower over the year ahead. Increases in wage rates
will likely maintain the flow of consumer income despite the possibility
that some reductions in employment might occur, especially if productivity
increases rapidly. As the big automobile year of 1955 recedes, there is
reason to be more optimistic concerning purchases of autos this coming
year. Any improvement inr.ew housing would likely be reflected in stronger
consumer demand for household appliances.
We see no real reason why consumer income· and consumer demand for
food during most of the year ahead should be essentially different than
at present. Although there may be some decline in combined Government and
investment outlays, almost certainly we do not face a reduction as large
as that which occurred in the mild recession of 1953-54. Between the t hird
quarters of 1953 and 1954, investment expenditures declined some $4 billion
while Government outlays for goods and services dropped $8 billion. In
that period, Federal expenditures declined $11 billion--largely outlays for
the national security--while State and local government expenditures rose
$3 billion. These reductions total more than we can reasonably anticipate
for the period ahead, and the economy is larger now than in 1953 and could
absorb them better. Even so, the flow of personal incomes in the 1953-54
period was wel l maintained by rising wage rates and increased unemployment
compensation payments. Consumer expenditures, enlarged by a cut in income
taxes of some $3 billion, rose $6 billion between the third quarter of
1953 and the third quarter of 1954. We wauld do well to remember that the
sustained rise in consumer expenditures in 1954 provided the initiating
force to the resumption of the post-war boom later in that year .
THE AGRICULTURAL OUTIDOK
Summary prepared by Frederick V. Waugh,
Agricultural Economics Division, Agricultural Marketing Service
As of now, our best judgment is that in 1958:
1. Farmers will get about the same average prices as in 1957
2. Agricultural output will remain high, and could well set a new
record, depending upon weather
3. Further increases in production expenses may largely offset any
rise in gross farm income, leaving farm operators ' net realized
income from farming about the same as in 1957
4 With increasing income from nonfarm sources, principally wages
and salaries from off-farm employment, and with decreasing .numbers
of persons on farms, this could mean a slight gain in per capita
inc0me of farm people
5
6.
The parity index (prices paid by farmers) is likely to creep up fur­ther,
resulting in a further slight drop in the parity ratio
Retail food prices may rise further, because of increases in mar­keting
charges
~.
Exports of agricultural products will continue high, but will probably
be less than in the fiscal year ending June 30, 1957
Year-end stocks of wheat and cotton may again be reduced, but the
carryover of feed grains will increase still further
Government payments for price supP9rt, for the Soil Bank, and for
export programs will continue to be large, but the acreage reserve
program will be reduced
Farm debt will probably continue to rise, but the value of farm as­sets
will increase, too
Land values will probably rise somewhat, and levels of living of
farm·families will probably continue to improve, due in part to in­creased
income from nonfarm sources
Food consumption and diets of U. S. families will remain at a rela­tively
high level
These judgments about the 1958 outlook are based upon three main as­umptions--
assumptions that now seem to us the most realistic, but none of
hich is certain:
l. That the domestic business situation will continue strong, with no
substantial letdown in production, prices, or employment
2. That the uncertain international situation will not touch off another
burst of inflation, and
3. That there will be no major changes in Government programs affecting
1958 farm income
Looking b~yond 1958, the most serious problem confronting American agri­ulture
is to find ways to keep production in balance with market demand at
rices considered acceptable to farmers. In the past 2 years, some prog-ess
has been made toward reducing the burdensome stocks of wheat, cotton,
nd rice. But stocks of feed grains continue to rise, and probably will be
till larger at the close of the present feeding season. SQoner or later,
armers will either have to reduce the output of feed grains, or else feed
rger amounts to animals, and thereby increase the output of meat, poultry
roducts, and dairy products.
-8-
FARM FAMILY LIVING OUTIDOK
Statement prepared by Margaret L. Brew,
Household Economics Research Division, Institute of Home Economics
Farm families have increased their consumption and improved their
levels of living markedly during the past decade and a half . In l955 ,
they were spending for current ~onsumption approximately two - thirds more
than in l94l, in dollars of constant purchasing power . During this l5-
year period the AMS Farm-Operator Family Level of Living Indexes showed
marked gains .
Last year, 94 percent of the farm dwellings had electricity, whereas
in l940 only one-third of farm homes were electrified, and the figure was
only ll percent as recently as l935 · The proportion of farm dwellings
with piped running water increased from about one-fifth in l940 to nearly
two-thirds last year (see chart) . Mechanical refrigerators were in only
about l5 percent of farm homes in l940; 90 percent of the farm-operator
families owned them early last year . Farm families have better and more
varied diets now than in pre-World War II years, and they are using foods
that are easier for the homemaker to prepare .
~0
PERCENTAGE OF FARM OPERATORS
REPORTING SPECIFIED FACILITIES
o---.....MMO~
M echanical A utomobile Running water Te le vision Telephone
refrigerator
• RURAL-FARM HOUSEHOLDS WITH SPECIFIED FACILITIES
Home
fre ezer
U.S. DEPARTMENT OF .O.t;RICULTURE NEG. ~~89-57 ( 10) AGRICULTURAL MARKETING SERVICE
-9-
Farm families will continue to improve their levels of living as re­sources
are available to them. The rural community as an isolated cultur­a
unit is fast disappearing . About ha·lf the farm operators have off-farm
employment, one- fourth of the farm wives are in the labor force, two-thirds
0 the farms are located on all-weather roads, over half of the farm-opera­t0r
families have TV sets . Urban influences, therefore, are considerable,
a ,d farm families want the household goods and services that urban families
The varied sources of income that many farm families now have and will
to have in 1958 serve as a stabilizing force in their demand for
ods and services . A regular paycheck gives families confidence to use
ds that they have available for large-item expenditures. They feel more
e that their ongoing needs for food and other nondurable goods can be
Another stabilizing force in farm family levels of living is the oppor­ity
they now have to come into the Social security program. By mid-1958,
a out one-half million families who have paid taxes on self-employment in­me
from agriculture will be receiving OASI benefits. While the aggregate
come received from this source will be only a small portion of the aggre­te
income of farm families; its effects will be more widespread than the
ount would indicate . Fewer parents will be encroaching on the needs of
ungf'amilies . Levels of living will be maintained for a substantial por­ion
of farmers aged 65 and over who received benefit payments. Further-ore,
the psychological effect even on those not yet receiving benefits
ust be great . For a small payment, farm families, like urban families,
ill be provided with some protection against the risks of extended old
ge or the death of the breadwinner . Farmers are likely to feel less ur­ency
to trim their current consumption in order to ensure against priva­ion
in later years .
While levels of living are improving and expenditures for current con­umption
increasing, farm families are being pressed by rising prices for
onsumer goods . In each of the past two years (September to September),
rices that farmers pay for fami~y living items have increased at the rate
f 2-3 percent per ·year . The present forecast is for some further price
ncreases in 1958.
THE OUTIDOK FDR HOUSING, HOUSEFURNISHINGS AND EQUIPMENT
Address by Arnold E. Chase,
Division of Construction Statistics, Bureau of Labor Statistics,
U. S. Department of Labor
Over one million new nonfarm dwelling units will be started in the
nited Statesin 1957. Through October 840,000 private and 40,000 public
its had been placed under construction. A large proportion of the new
ublic units were· in "Capehart" military housing. There are no current
eports on the number of new farm houses built .
-10-
A million new homes in one year seems like a large number . Why
then, do we hear talk about the slump in housing starts during 1957?
One reason is that there recently have been much better years; another
is that this rate will not permit any significant improvement in our hous­ing
standards .
As recently as 1955, construction was started on a total of 1 .3 mil­lion
new nonfarm dwelling units, and in 1950 the number was nearly 1 .4
million. Housing starts have been above l million every year since 1949.
In contrast with these past records, the rate of operation in the home­building
industry this year has been disappointing to homebuilders and to
others who would like to see a real beginning made on replacing the mil­lions
of substandard dwellings in our existing housing stock.
The scarcity of mortgage funds has received the major share of blame
for the slow-down in homebuilding since mid- 1955 · However, we should not
overlook the fact that the homemuilding industry has many other problems
to solve before it will be in a position fully to exploit its potential
market and provide decent housing for all American families . Indications
are, however, that the availability of mortgage funds will continue to be
the major limiting factor on homebuilding in 1958 and, therefore, that the
industry's other problems still will not come to the fore next year .
To place 1958 in perspective, it may be helpful to take a brief look
at the forces operating in the housing market and their longer-range impli ­cations
.
Household formation and dwelling units, 1950-1957
We have heard a great deal about the high marriage rate during and
since World War II and the trend toward earlier marriages . The current
rate is about 1 .5 million marriages a yea~ . We are less familiar with the
high rate of dissolution of existing marriages by death of one spouse or
other causes . However, there was a net increase of less than 3 million
in the number of married couples during the 7-year period from March 1950
to March 1957, according to Census Bureau figures~ ·
With prosperity, many of the surviving partners of dissolved mar­riages
apparently have continued to maintain their own households, and
many unmarried individuals have established households . Availability of
housing and higher incomes have permitted the undoubling of secondary and
subf ami l ies. In the spring of 1947, when the housing shortage was crit-ical,
nearly 3 million married couples (8 .7 percent of the total ) were witb·
out their own households '?). By 1957 the number had been reduced to li"
million (3.3 percent of the total) . This rate of doubling up probably rep­resents
about a minimuw,since there will always be some married couples
l i vi ng doubled up for one reason or another .
~ U. S. Bureau of the Census .
Characteristics, Series P-20, No .
~' Ibid.
Current Population Reports: Population
76 . July 1957·
-11-
The net result of these trends was an increase of 6 million in the
t tal number of households between 1950 and 1957, with married couples
( 'ncluding those that undoubled) contributing only 60 percent of the to-
1. It is clear, therefore, that factors other than the marriage rate
d family formation as such had a major influence on the basic demand
~ r housing during this period. Unfortunately for those who attempt co
timate future housing demand, it appears likely that these less predict­le
factors will continue to operate in the years immediately ahead.
Preliminary estimates indicate that our housing stock was increased
about 9 million dwelling units between April 1950 and December 1956 ]/.
is was the net result of additions from new construction and conversions,
fset in part by losses through demolition, disasters and other causes.
e margin of about 3 million additional dwelling units over the net in­ease
in households during this period has produced some increase in the
caney rate, which permits our population to satisfy its desire to migrate
nd move frequently within areas. There has also been an increase in the
ber of seasonal dwellings, which probably reflects a trend toward the
' two-house family . "
Since the downturn in homebuilding, the vacancy rate has stabilized,
emaining virtually unchanged through the first 3 quarters of 1957 ~·
his stability in the vacancy rate suggests that the production of around
million new nonfarm dwellings a year, plus whatever the current output
f new farm houses may be, is just about meeting current requirements for
dditional housing that arise out of net new household formation. This
oes not imply that the current rate pf homebuilding should be considered
dequate from an economic or social point of view, or that it is the max­urn
to be expected if mortgage funds were available on more favorable
erms and if certain other problems of the industry were solved.
ousehold formation in the future
According to projections made by the Census Bureau, the net increase
n households each year between now and 1965 seems likely to run about the
ame as, or slightly below the average of the last 7 years, reflecting the
ow marriage and birth rates of the 1930's and early 1940's 2}. Any strong
pturn due to the jump in marriages and births beginning in 1944 will not
ome until about 1965. Then annual net additions to the number of house­olds
will begin to exceed the average of the past 7 years by a wide margin.
It appears, therefore, that for the next several years the basic an-ual
need for net additions to the housing stock just to supply shelter for
he population will be about the same as this year, somewhere around 800,000
~ts. If we accept this conclusion, we must look elsewhere for factors
hlch might contribute. to a higher rate of homebuilding.
~ U. s. Bureau of the Census, National Housing Inventory. E/ U. S. Bureau of the Census, Housing and Construction Reports: Housing
acancies, Series H-111, No . 10. November 1957·
5 U. S. Bureau of the Census, Current Population Reports: Population
haracteristics, Series P-20, No . 69. August 31, 1956.
-12-
Migration and mobility
The mobility of the population has been cited as an important factor
in the demand for housing. One-fifth of the population moved during the
year from March 1955 to March 1956, according to Census data~· One­third
of the moves were to a different county and one out of six to a dif­ferent
State. The nonwhite population has shown more mobility than the
white population since 1950.
The periods of greatest mobility have accompanied spurts in home­building,
as could be expected. Movement of the population from farms to
nonfarm areas has been one of the most persistent trends. This undoubted­ly
has resulted in abandonment of many farm houses, which has been one
source of losses from the housing supply. In nonfarm areas so far, when­ever
one family moves into a new home another family usually stands ready
to occupy the vacated dwelling. Excess vacancies appear not to have de­veloped,
except possibly for short periods, in areas which have had out­migration.
Unfortunately comprehensive vacancy data are not available for
local areas.
It is logical to conclude, therefore, that mobility of the population
has had more influence in determining where new housing would be built
than in contributing to additional· construction. Certainly, if builders
gauge their markets correctly, this will be the result in the future.
Most of the new building is likely to be in suburban areas, and the con­tinued
exodus from farms will warrant more nonfarm than farm building.
Mobility can be dismissed, therefore, as a factor likely to cause
any significant amount of additional homebuilding for the country as a
whole, though it will be important for individual local areas and for
some entire regions of the country. Even there it can be overrated as
a factor in homebuilding demand, as evidenced by the fact that the West
which has had the largest in-migration also currently has the highest va­cancy
rate.
Relationship of income to construction costs,
s elling prices and housing expense
One of the major problems confronting the residential building indus­try
today is the same as that faced by many other industries--that is, the
squeeze between rising costs and a price level which will retain enough
of the market to permit the most economical operations. The median income'
of nonfarm families rose 44 percent between 1950 and 1956 (table 2). When
adjusted for the increase in the cost of living, however, the median in­come
was up just 28 percent. That is a sizable increase in the short span
of six years, and would appear to support a continued strong basic demand
for housing.
~ U. S. Bureau of the Census. Current Population Reports: Po~ulatiori
Characteristics, Series P-20, No. 73. March 12, 1957.
~13-
Table 2 .--Distribution of Family Incomes and Selling
Prices of 1-Family Houses, 1950 and 1956
- Family income y Percent of
all families
U der $3,500 ··••••••••••
$ ,500- $4,999 ·········
$/,000 and over •••••••••
Median income - $3 , 319
U b.der $4,500 ••••••••••••
~ ,~00- $5,999·········
$ ~,000 and over •••••••••
Median- $4,783
54
23
23
46
21
33
Selling prices of
l-family houses ~
Percent of
all new houses
Under $9, 500 •• • •••••• •• •
$9, 500- $12,499 • ••• ••• •
$12,500 and over •• • • ••••
Median price - $10,200
Under $12,000 • ••• •• •••
$12,000 - $14,999······
$15,000 and over • • •• •••
40
37
23
27
27
44
Not reported •• • • •• •• • • • 2
Median - $14,500
Y u. S. Bureau of the Census . Current P..opulation Reports: Consumer
~ rrcome, Series P- 60, No . 24 . April 1957; and No . 26 . September 9, 1957•
gj U. s. Bureau of Labor Statistics . New Housing in Metropolitan Areas,
1949-51, Bulletin No . 1115 . September 1952; and "Characteristics of l­F3.
mily Houses, 1954- 56." Construction Review, April 1957.
The data for 1950 cover houses completed in the 4th quarter in 10 se­l
~cted areas . Data for 1956 cover houses started in the lst quarter in
DJnfarm areas (urban and rural nonfarm) . Similar coverage for 1950 pre­S
lli~ably would have increased the proportion in the lower price classes .
Family income, without some further refinement, probably overstates
~~ ility to buy houses, however . Families have grown larger on the average
~pd their non-housing expenses, therefore, are up more than proportionally.
Jpey also are paying more taxes . On the other hand, the 11 percent rise
Jp per capita disposable personal income in constant (1956) prices since
950 undoubtedly understates the increase in the relative amount that fami­ies
could afford to put into housing. T4e correct figure would appear to
l e somewhere between 11 and 44 percent more family income available on the
Everage for bousing in 1956 than in 1950.
Construction costs were 20 percent higher in 1956 than six years ear­i
er. However, because of the fact that larger and better-equipped houses
i ere built in 1956, the average construction cost of the houses started
ast year was 41 percent above the 1950 average . The median selling price
Cf new nonfarm houses started during the first quarter of 1956 was $14,500,
.J
-14-
or 42 percent higher than the $10,200 median price of newly completed
houses in 10 selected metropolttan areas in 1950.
Thus it appears that the prospective homebuyer was no better able to
buy the kind of house being built in 1956 than he had been in 1950 to buy
the kind of house built then, in spite of the increase in his income . In
fact, another approach suggests that the pricing of houses was better fit­ted
to incomes in 1950 than in 1956.
A distribution of incomes matched with a distribution of selling
prices for new nonfarm houses indicates that builders were not building
enough lower-priced houses in either 1950 or 1956, on the basis of the rule·
of-thumb that purchase price should not exceed about 2~ times the income
of a housebuyer. In 1950 the deficiency of lower-priced houses was made
up by overbuilding in the middle-price range. Building in the top-price
range appears to have been balanced with incomes in 1950, but not in 1956
when 44 percent of the new houses were priced at $15,000 or more and only
33 percent of the families had incomes of $6,000 and up to qualify them to
buy houses in this price class.
Homebuilders today are faced with the same merchandising dilemma as
many other consumer durable producers. With the housing shortage over,
they can interest prospective customers enough to expand the market only
by offering a new and superior product. With costs as they are, this re­sults
in a price too high for the mass market, so builders lose customers
either way. Until ways are found to reduce costs and prices on houses
which are attractive to prospective buyers, the market will continue to
be limited unless some other factor comes into the picture to increase de­mand.
There was a time after World War II when many families were prompted
to buy new homes because they found monthly payments were less than rent.
A change undoubtedly took place in this relationship between 1950 and 1956.
Rents increased 22 percent, which was considerably more than the 13 per­cent
advance in the Consumer Price Index, but less than the 39 percent
rise in housing expense on new homes insured by the Federal Housing Ad­ministration.
While the latter does not measure housing expense on all
new homes, it should reflect the total trend reasonably well.
It can be concluded that there is nothing in the relationship between
family income, house price, and rent at the present time that encourages
any expectation that these factors will contribute to a significant increa9e
in homebuilding volume in the near future. These relationships will change,
of course, and at some period will set the stage for another housing boom.
Outlook for homebuilding in 1958
Against the foregoing background, 1958 looks like a year for homebuild·
ing which will be not much different from 1957· There is a basic need for
constr~ction of about 900,000 new nonfarm dwellings next year, arising out
-1~-
of the net increase in households, migration from farms to nonfarm places,
and replacement of dwellings lost from the housing supply. This number
will not permit any increase in the vacancy rate or upgrading of the hous­ing
stock, except as new units replace old homes that are destroyed.
American families will want to improve their housing, however, even
at costs and prices which probably will be somewhat higher than they are
now. This pressure should be sufficient to provide a market for at least
1 million new private nonfarm dwellings in 1958. A larger percentage of
this market probably is for rentaJ units than in the recent past. An up­ward
trend in construction of apartments during the last few months has
begun to reflect this.
Mortgage money undoubtedly will continue to be tight, especially in
the early part of 1958. The supply of mortgage money should improve some­what
by mid-year, but it is doubtful that this improvement will come in
time to permit starting 1 million private dwellings in 1958. When public
housing is added, the total of new housing starts is likely to be about
1 million units, an increase of about 7 or 8 percent over 19~7·
Housefurnishing and equipment
In view of the small upturn expected in housing starts in the last
half of next year, some improvement in the demand for major household goods
seems likely by the end of 1958. But equipping newly-built homes accounts
for only a part of the market for such things as furniture, floor cover­ings,
appliances, heaters, radios and television sets. The balance is re­placement
demand which reflects directly the ability of consumers to buy.
This, in turn, will hinge on the general level of business activity, em­ployment
and earnings.
Production of major household goods has declined from the 1955 peak,
with a particularly sharp drop in output of radio and television sets.
Production of appliances and heaters is down so far this year, and for fur­niture
and floor coverings a moderate decline also is indicated. It seems
doubtful that factors will be present to cause a pickup in production of
these items before late next year. Whatever increased demand may eventu­ally
arise out of the anticipated higher rate of homebuilding will not
come until those new homes near completion or are actually completed and
occupied.
Stable prices appear to be in prospect for housefurnishing and equip­ment
as a whole, with upward movements for some items and downward move­ments
for others. By September 1957 the consumer price index for house­furnishings
had risen less than 2 percent above the 1956 average (table 3).
From 1950 to 1956, retail prices of major household goods advanced less
than 3 percent. For appliances alone there was a 13 percent drop in re­tail
prices over this 6-year period. 'This reflects, of course, the influ­enoeof
discount houses and competitive pricing by department stores and
other retailers.
-16-
Table 3.--Consumer Price Indexes for Selected HousefUrnishings
(1947-49 -= 100)
Indexes Percent Change
Item 1950 1956 Sept . 1950- 1956-
1957 1956 Sept . 1957
HousefUrnishings ~/ •••••••• 100.3 103.0 104.8 + 2.7 +1.7
Rugs:
Rugs, wool Axminster ••• 121.4 147.2 157.0 +21 .3 +6.7
Carpets, wool broadloom 112.8 118.8 126.8 + 5·3 +6 .7
Rugs, felt base •••••••• 97·9 121.2 126.8 +23 .8 +4.6
Rugs, cotton~······· · -- 96.5 95·5 -- -1.0
All fUrniture •••••••••••• 101.6 105.4 107.1 + 3·7 +1.6
Living room suites ••••• 100.0 110.3 112.1 +10.3 +1.6
Dinette sets ••••••••••• 98.3 102.2 100.3 - 2.8 -1.9
Sofa beds ............. 101.4 112.7 116.9 +ll.l +3-7
Mattresses ••••••••••••• 103.9 112.9 119.7 + 8.7 +6 .0
Bedroom suites ••••••••• 105.1 102.2 100.3 - 2.8 -1.9
Appliances 1} ............ 96.7 84 .1 83 .7 -13.0 - ·5
Sewing machines •••••••• 107.2 112.1 111.5 + 4.6 - ·5
Washing machines ••••••• 100.3 98 .2 100.6 - 2.1 +2 .4
Vacuum cleaners •••••••• 98 .7 96.7 87 .8 - 2.0 -9.2
Refrigerators, electric 99.0 72.9 63 .8 -26.4 -12.5
Cook stoves •••••••••••• 96.4 101.9 103.9 + 5·7 +2.0
Toasters ~··•••••••••• -- 78.6 83 .0 -- +5 .6
Radios ~··•••••••••••• 90.4 88.7 92 .0 - 1.9 +3.7
Television sets~····· -- 86.6 90.2 -- +4 .2
~ Includes textile bousefurnishings.
~ December 1952 -= 100.0.
}/ Includes refrigerators, stoves, washing machines, vacuum cleaners,
sewing machines, toasters, radios and television sets .
Source: U. S. Department of Labor, Bureau of Labor Statistics.
The decline in retail prices of appliances also contrasts with a 21
percent increase.for wool rugs from 1950 to 1956 and a 4 percent increase
for furniture. Prices for both rugs and fUrniture have continued upward
this year. In September 1957, rug prices were 7 percent above the 1956
average.
-17-
TEE OUTlOOK FOR ClOTHING AND TEXTILES
Address by Harry Kahan,
Prices and Cost of Living Division, Bureau of Labor Statistics,
U. S. Department of Labor
Last November, at the 34th Annual Agricultural Outlook Conference, I
summarized the clothing picture for 1957 as follows:
11
••• The outlook for clothing in 1957 is generally favorable for the
consumer . It has the indications of a buyers' market in which merchants
will be attempting to trade up. This will produce a great variety of
clothing in medium and better priced lines. Average prices are expected
to be slightly higher . The year 1957 may find retail prices reacting more
readily to wholesale increases, with many of the increases made on a se­lective
basis . Consumers are becoming more sensitive to price increases,
which may lead to a wider range of prices between retailers. 11
At this time these observations are still good, although I must admit
that I underestimated consumer sensitivity to price increases. This sen­sitivity
explains why wholesalers were extremely cautious in announcing
price increases and retailers complained bitterly of being obliged to ab­sorb
some increases as part of the cost of doing business.
How this has affected prices can be understood by comparing two arti­cles
which appeared in the Wall Street Journal about 5 months apart. It
concerns men's suit prices .
On April 15, 1957 the headline of the first article read "Men's suit
prices next spring to reflect recent wool cloth rise." It was followed
by 11Note to male shoppers: You will probably pay about $2 to $2.50 more
for a medium-priced suit next spring. And top coats and sport jackets
may carry higher price tags, too . "
On September 24th the second article appeared. It stated "Prices of
'58 Spring, Summer Men's suits expected to change little. Makers abandon
idea of 5 percent hike they had earlier this year, though costs are up.u
Industry and trade association spokesmen in the field of wearing apparel
are still stressing the need for higher wholesale prices or better retail
markup, depending on whiC'.h side of the fence they are sitting. However,
they all seem to agree that substantial price hikes may cut too deeply in­to
sales volume .
NOTE: Opinions expressed in this paper are those of the author and do not
necessarily represent the positions of the Bureau of Labor Statis~
tics or the U. s. Department of Labor.
-18-
Clothing prices in the past year
Retail prices.--Retail clothing prices during 1957 showed remarkable
stability. From September 1956 to September 1957, the apparel group in
the Consumer Price Index rose by less than .8 percent, the least of any
group in the index. In that same period the index as a whole rose 3 .4
percent.
Examining the various segments of the apparel group, we find that the
index for women's and girls' wear remained practically unchanged. Men's
and boys' wear rose approximately 1 .2 percent while the index for footwear
advanced 1 .3 percent .
Textile mill prices . --For the producers that make cloth, the year 1957
can be characterized by reduced hours of mill operation, reduced number of
looms in operation and lower margin of profit . The Federal Trade and Se­curities
Exchange Commissions have reported tbat net operating profits of
textile mills for the first half of 1957 were $297 million as compared to
$357 million for the first half of 1956. This represents a drop of nearly
18 percent. Prices of key cotton print fabrics dropped to a new postwar
low since controls were removed shortly after World War II . Eighty-square
cotton print cloth, a bellwether indicator of the cotton textile market.,
sold a year ago at around 19 icents a yard compared to recent quotations of
1 ' as low as 174 cents .
The synthetic textile market, which suffered heavy pri~e declines in
the secend quarter of 1956, is alsQ faced with the problem of excess supply
relative to current demand. While there has been some upward revision of
prices, often dictated by increased production costs, prices are only
slightly higher than a year ago but still below the first quarter of 1956.
The woolen market up to mid-1957 exhibited an advancing price front
which was primarily due to higher prices for apparel wool. Wool top prices
advanced sharply during the 1956-57 selling season, with weavers and spin­ners
attempting to advance their prices in keeping with the rising costs
of materials. Recent market breaks in wool top prices combined with buy­ers'
caution in placing orders, the trend toward lighter weight materials
for suiting, plus the inroads that man-made fibers have made on wool con­sumption,
have obliged the weavers and spinners to fight against limited
decreases.
The business outlook
This brief review of how the clothing textile industries fared in 1957
provides a hint of what may be expected in sales volume and prices for the
next 12 months.
This outlook for 1958 is based on the premise that general business
conditions will remain substantially the same . The Clothing Manufacturers
-19-
-~erica recently polled 38 banks in 24 cities on the business outlook•
though therewas an expression 0~ uncertainty as to the economic pros­pects
~or the period ahead, especially in smaller cities, bankers in 10
of the largest cities in the nation ~elt that the current level of busi­ness
will be maintained ~or the ~irst ha~ o~ 1958.
Labor outlook - e~~ect on prices
The major single factor that may advance the average price of clothing
next year is increased labor costs . Presently a~fected is women's outer­wear.
For instance, last month 50,000 Internatior£1 Ladies Garment Union
Workers in New York factories (who make three-quarters of all women's
coats and suits) received wage increases averaging 5.5 percent, effective
December 15 . This was the ~irst general pay increase received by these
workers since May ~953 . A higher wage pattern can be expected to include
about 200,000 other members of the ILGUW under wage contracts about to ex­pire
or that permit cost-0~ - living pay reopenings.
The clothing industry has been struggling to keep from falling too far
behind general prosperity o~ the country. For several years this fact has
been a restraining force on an advancing wage level within the industry.
However, even though there has been little increase in the wage level
there have been other increases in direct and indirect costs. In the face
of these higher costs the one factor that has helped to keep apparel prices
from advancing more rapidly in the last ~ew years has been the ability o~
the man~acturer to rearrange his direct costs o~ production and still
keep his garment within a price line. The man~acturer in doing this may
find that he is obliged to absorb part or all of the increase in other costs,
such as financing, advertising and administrative expenses.
The extent to which man~acturers may be able to absorb these addi­tional
costs depends a good deal upon the existing price-quality relation­ship
and the relative profit margin currently being earned. Increased
production costs of this magnitude, however, will be event~ally translated
into price increases . The long range e~fect should be less of low-end
quality production and greater emphasis on better qualities in higher price
brackets .
The increasing cost of labor in itse~ does not allow for a generali­zation
that the clothing price movement should be up in 1958.
Even with the closing down o~ many mills during the last 3 years, the
production capacity of the existing mills is still in excess o~ demand as
evidenced by continued voluntary curtailment of mill production. With the
exception o~ short seasonal ~lurries the past 5 years have seen wholesale
. ) t
pr~ces for cotton and man-made textiles drift downward. The recen strong
upswing in wool and worsted prices, has now been reversed because of sharp
declines in wool top prices and poor selling ~or the spring 1958 season.
According to industry representatives, the wool induBtry is in· the midst
Of its worst slump since World War II.
~ 20 -
Consumer clothing expenditures
This leads us to the problem that the clothmakers and clothing manu­facturers
have wrestled with a long time--the need for increased consumer
demand.
Between 1947 and 1956 personal consumer expenditures for all goods and
services rose from $165 billion to $267 billion, an increase of 61.8 per­cent;
civilian population increased by 24 million or 16.7 percent; and
per capita spending moved up from $1,150 to $1,597 an increase of 38. 9 per ­cent.
In this consumer spending pie, clothing had a 12 .5 percent slice
in 1947. By 1956, this slice had narrowed to 9 .0 percent, a shrinkage
of over one-fourth (table 4) . In current dollars, the 1956 per capita
expenditure for clothing was approximately the same as in 1947. If we
eliminate the effect of price increases as measured by the Bureau of
Labor Statistics apparel index at retail, the per capita expenditure for
clothing has declined about 8 percent between 1947 and 1956.
Table 4.--Expenditures per Person for Total Personal Consumption
and for Clothing, 1947-1956 (in current dollars)
Per capita expenditures Percent of per capita
Year Total personal Clothing expenditure for
consunrptio:n clothing
Dollars Dollars Percent
1947 1,150 144 12.5
1948 1,216 147 12 .1
1949 1,214 136 11.2
1950 1,283 133 10.4
1951 1,358 139 10.2
1952 1,401 143 10.2
1953 1,456 138 9 ·5
1954 1,463 135 9.2
1955 1,549 139 9.0
1956 1,597 144 9 .0
Source: U. S. Bureau of the Census.
For each successive year since 1947, the proportion of total per capita
expenditure represented by clothing has been either lower or unchanged.
The meaning of this trend is that the clothing industry is not even hold­ing
onto its earlier share of the consumer dollar .
However, some recent sr1ifts in expenditures for clothing may indicate
possible reversal of this trend. For instance, from 1954 to 1956 the
er person expenditure for clothing in constant dollars has moved u~ to
.4 percent; in other words, the volume of clothing purchases is on an
trend. Retail clothing sales in 1955 increased 5.1 percent over 1954;
1956, sales figures topped 1955 by 5. 4 percent.
ce trends
of apparel at the retail level have fluctuated within a narrow
over the past 5 years . Comparing the September 1952 Consumer Price
to September 1957, we observe that the index for men's and boys'
~n'~~.T·Pl advanced a modest 1 .7 percent while women's and girls' apparel de-lined
1 .9 percent . Only footwear, with a 11.7 percent increase, ex­bited
a sustained upward price movement . Qver this 5-year period the
group index rose 1 .4 percent. Between September 1956 and Sep-
1957 the women 's and girls' apparel index remained practically un­footwear
showed less than l percent increase, and men's and boys'
advanced 1 .2 percent .
outlook for clothing in 1958 at both retail and wholesale levels
mixed. There is a lack of optimism among sellers. Men's topcoat and
t volume remain poor . Lagging retail coat sales have resulted in
appointing fall coat reorders . Women's coat and suit volume has also
to meet earlier expectations . The sharp competition among women's
manufacturers continues, with many retail outlets featuring hosiery
a sales promotional item.
are bright spots in the area of boys' wear and men's and boys'
with a mixed picture on women's and misses dresses. ~dll shoe
iness, according to trade reports, is up to expectations with good sel­on
children's shoes .
When there is a lack of optimism it is generally accompanied by greater
ution in planning for the next season. Retailers hesitate to lengthen
eir markup or to pass along a full retail markup on many of the wholesale
ice increases, while manufacturers reconsider their proposed price in­eases
. We believe that out of these conflicting pressures for price
ges the price movement for apparel is likely to be up during both the
ing and fall 1958 selling season.
The price outlook for shoes, based on statements made by manufacturers
ttending the National Shoe Fair, points to an average 5 percent price in­ease
at wholesale level with price changes made on a selective basis.
passed on to the consumer the price increase may be about 7 percent.
-22-
For big ticket items in women's clothing--such as coats and suits-­increased
labor cos·t may result in f'ewer manufacturers producing lower
priced lines,with selling emphasis on higher priced merchandise. It
should result also in quality adjustments within limits of' consumer ac­ceptability
f'or a given retail price line. At least part of' the increased
labor cost may show up on retail price tags. In men's coats and suits a
strong f'actor against price increases is the sagging woolen market and
consumer preference f'or lighter weight wool and wool mixtures.
For small ticket items such as skirts, blouses, dungarees and slacks,
increased costs may be more directly applied to the retail price and ac­cepted
by the customer.
Consumer demand f'or clothing
Adequate production facilities in the apparel industry, where small
and medium-sized companies dominate, tend to cause closer competition.
The industry is promotion minded and sensitive to changing styles, new
fabrics, and changing patterns of' consumer preference. Evidently the
inaoility of' the clothing industry to capture its f'ormer share of' the con­sumer's
dollar is the result of' a lower priority f'or clothing on the part
of' consumers. The trend towards home ownership, relaxed social demand
f'or "dressing-up, 11 and the burden of' installment payments of'ten makes the
purchase of' clothing a deferrable expense in the f'amily budget. While
U. S. expenditures f'or all goods and services increased by over $100 bil­lion
since 1947, only about 4 percent of' this increase f'ound its way in­to
expenditures f'or clothing.
I have selected hosiery and men's coats to illustrate this lag in sales
over the 10-year period. These items were chosen in order to eliminate
as much as possible. the f'actor of' replacement by ~ substitution. For ex­ample,
a man's suit may be replaced by a jacket and a pair of' trousers,
a woman's suit can be replaced by a skirt or a dress. For hosiery or
outercoats only limited substitution is possible.
Hosiery.--Between 1947 and 1956 the consumption of' women's hosiery in­creased
by 3.1 percent but populat~on of' women 15 years of' age and over
increased l2 percent. On a per capita basis, consumption of' women's hosierY
dropped 8.9 percent; that of' men's hosiery, 24.5 percent. The per capita
consumption of' children's hose declined 17.9 percent, while the population
of' children under the age of' 15 increased by almost 40 percent.
Men's coats.-- The number of' men's overcoats and topcoats produced in
1947 and 1956 was approximately equal--about 7.2 million. However, during
this period, the population of' men 21 years of' age and over increased by
about 2.3 million. If' we use the production population f'igure f'or 1954
or 1955, the chasm between potential customers and garments manufactured
becomes broader.
-23-
It may be that consumers are making their clothing dollar stretch a
little further by greater care and longer wear. Or it may be that an in­creasing
proportion of total clothing expenditures is being applied to
just clothing replacements rather than wardrobe additions . Although the
clothing industry relies heavily on changing fashions, styles, and colors
to out-date apparel that could otherwise be worn, since the 1950 "new
look" for women and possibly the current "ivy league" tailoring for men,
here have been no sweeping changes in the fashion world. There has been
a shifting of emphasis for specific items of apparel, especially to casual
ear.
The total U. S. expenditures for clothing for each of the years between
947 and 1956 are reasonably close . Such a steady rate of spending seems
o imply that consumers are buying according to current needs based on
udgetary allowances.
THE OUTLOOK FOR FOOD
Statement presented by Harry Sherr,
Agricultural Economics Division, Agricultural Marketing Service
The phrase "little different from 1957" probably best describes the
eneral food situation in prospect for 1958. Supplies are expected to be
lose to the high level of 1957, and the domestic demand for food will
ikely remain strong. Civilian consumption of food probably will about
qual the 1957 high per capita rate, exceeding the prewar (1935-39) av­rage
by l2 percent . Retail food prices are likely to average a little
igher than a year earlier until perhaps mid-1958.
Strong consumer demand for food next year is expected to be sustained
Y the continued high level of consumer income in prospect. Economic ac­ivity
and employment close to the 1957 record level is probable. Con­umer
expenditures for food will likely total a little higher than indi­ated
for this year . The higher level cf average food outlays will be
ue mainly to the larger population and the slightly higher food prices
uring at least the first half of the year.
The forecast of slightly higher than year-earlier food prices reflects
ot only the continued strong demand for food and the slightly smaller sup­lies,
but also the expectation of higher average marketing charges for
ood than in 1957. Most of the increase in marketing costs are likely to
e passed on to consumers.
Food supplies available to civilians in 1958 probably will differ lit­le
from the 1957 near record-high total. Carryover stocks of food next
~nuary l will be substantial, and if weather is average food crop produc­lon
in 1958 will be large . The number of livestock on farms and ranges
-24-
at the beginning of the year will be close to that of last January 1,
and the large supplies of feed grains will contribute substantially to
keeping output of livestock products at a high level.
Meat.--About as large a volume of meat will be available to consumers
next year as in 1957, according to present prospects. The composition of
the supply probably will differ slightly, with pork likely to be a little
more plentiful and both beef and veal slightly less so. Retail prices of
meat may average a little higher than in 1957, with the difference narrow­ing
after mid-1958 as bog marketings increase seasonally. Civilian con­sumption
of meat per person next year may be a shade below the 1957 rate,
but will likely be higher than in most of the years from 1900 to 1955.
The slightly smaller output of beef and veal in prospect for 1958 will
reflect mainly the likely reduction in the number of cattle and calves
marketed for slaughter. The effect of this will to some extent be offset
by somewhat heavier average slaughter weights than in 1957. Abundant lower
priced feed grains and prospects of a strong demand for beef will encour­age
farmers to feed cattle to heavier weights. Another consequence of
heavier weight slaughter cattle next year would be a higher proportion t han
in 1957 of better grades of beef, most of which reach consumers as red meat
cuts.
The expected increase over this year in pork supplies will likely be
much greater in the seoond half of 1958 than in the first half. The 3
percent larger fall pig crop this year than in 1956 indicates ~re pork
for consumers next spring and early summer than in the · same part of 1957.
Reports from 10 important States indicate that in September farmers there
planned to have 7 percent more bogs farrow this December-February th~~
last. The total 1958 spring pig crop--the most important one of the year-·
may be up by at least as large a percentage. Spring-crop pigs are mar­keted
from late summer through about ~idwinter .
Dairy productsr-Contjnued large supplies of milk and dairy products
are expected in 1958. Total stocks of dairy products will be much higher
this January 1 than last, with the increase likely to be almost entirely
in Government-owned stocks. Milk production on farms may exceed by 1 to
2 billion pounds the record total of 127 billion estimated for 1957. The
increased output is expected to reflect higher milk output per cow; dairy
cow numbers may be no greater than this year.
Civilian consumption of dairy products in 1958 is expected to be close
to this year's per capita rate, with shifts for most of the individual
items likely to be slight. The Special Milk Program will continue to pro­vide
an important outlet for fluid milk next year even though the percent­age
increase may not equal those of the recent past when participation in
the program was expanding rapidly. Retail prices of milk and dairy prod­ucts
are expected to differ little from those of 1957, with any changes
likely to be mainly the result of adjustments in gross processing and mar­keting
costs, unless the price-support level is altered.
.,.25-
Poultry and eggs .--Compared with this year, more chicken meat but
eggs and less turkey meat are in prospect for 1958. The increase
chicken meat is expected to come largely from commercial broilers .
feed prices next year are likely to encourage expanded production
commercial broilers and have a moderating influence on a probable re-ion
in the number of turkeys raised. Because of the 5 percent fewer
s expected to be on hand this January l than last, egg production
likely remain lower than this year at least until mid or late sum­The
volume of "flock-replacement" chickens raised in 1958 will de­whether
supplies next fall will equal or exceed those of this
Civilian per capita consumption of chicken meat next year will likely
record high, exceeding somewhat the estimated 1957 rate, while the rate
turkey meat may be second to this year's record level. Consumption
f eggs per person may be moderately lower next year, and at the lowest
te since 1942. Retail prices of poultry meat in 1958 may average close
this year's level, while those of eggs will average higher.
Fats and oils .--Food fats and oils will continue in heavy supply dur.­the
coming year, probably a little larger than in 1957. The probable
ease will be due to somewhat greater output of lard and vegetable oils.
of edible fats and oils will be encouraged next year again. Re­prices
of these food products are expected to average close to those
1957. Civilian consumption of food fats and oils in 1958 is expected
average around 44 pounds (fat content) per person, about the same as
is year 1 s rate.
Cereal foods. --Abundant supplies of good grain will be available in
year ahead. Per capj+a consumption of cereal food products in 1958
be no greater than in 1957. Retail prices of these food products will
average a little higher than in 1957, reflecting slightly increased
ing charges.
Fruits and vegetables .--Supplies of processed fruits and vegetables
next spring, when the present marketing season ends, will continue
ge but not quite equal to the heavy volume available in the same months
1956-57. However, current supplies are adequate to maintain civilian
er capita consumption of these products in the months ahead at the year­lier
rate . MOre fresh deciduous fruit will be available next winter
spring than last, and current indications point to larger supplies of
sh citrus . If weather conditions are average, supplies of fresh vege-s
this winter will be at least moderately larger than the relatively
ones of last winter. Supplies of potatoes through the winter months
be smaller than the burdensome ones of last winter, but still more
sufficient to permit civilians to consume potatoes at the year-earlier
Military procurement of food next year may be no larger than in 1957.
exports may be down a little since world food supplies will likely be
ger than a year earlier, and a little better distributed geographically.
-26-
ESTIMATED CQST OF ONE WEEK'S FQOD
Table 5 (page 27) presents the estimated cost of one week's food
to be prepared and served at home. The estimate is based on the quan­tities
of food in the low· cost, moderate cost and liberal plan published
in the October 1957 Family Economics Review . These plans are also avail­able
as a separate leaflet--Low Cost, M0derate Cost, and Liberal Family
Food Budgets, Revised 1957, HHE (Adm.)-53 · The weekly cost of food for
a specific family can be estimated from table 5, since costs are given
for individuals of different ages . The costs presented are based on
averages of food prices collected by the Bureau of Labor Statistics in
46 u. S. cities, and may not apply to any specific city or region.
CONSUMER PRICES
The index of prices paid by farmers for commodities used in family
living (table 6, p . 28 ) was about 3 percent higher in November 1957 than
a year earlier. It had been at this higher level since June this year .
September indexes for food and tobacco, and for autos and auto supplies
were slightly lower than those of June, while clothing, household opera­tion,
house furnishings were slightly higher.
The Consumer Price Index for City Wage-Earner and Clerical-Worker
Families (table 7, p. 28 ) was approximately 3 percent higher in October
1957 than in October 1956. Among the various components of the index
there were minor gains between September and October for 5 items, and a
small drop for food.
-27-
Table 5.- -Estimated C0st of One Week's FQod, ~October 1957
Sex-age groups
FAMI LIES
Family of twoJ 21-34 years of age~ ······
Family of twoJ 55 - 74 years of age~ ······
Family of four with preschool children 3/.
Family of fourJ school age children~ .: ••
INDIVIDUALS
Children:
Under 1 year ... • ....•....•.•.. . • • ...••..
1-3 years • •...• • . • ••••...•.•.•.••...••••
4-6 years ••••••••••••.••••••••••••••••••
7-9 years ........•..... • ...• . .•.........
GirlsJ 10-12 years ••••••••••••••••••••••••
13-15 years ••••••••••••.••••••••••••••••
16~20 years ...........• • .............•..
Boys, 10-12 years •••••••••••••••••.•••••••
13-15 years . ....•................. . .....
16-20 years •••••••••••••••••••• .- ••••••••
Women:
21-34 years •••••••••••••••••.•••••••••••
35-54 years ••••••••••••••••••••••••··~··
55-74 years •••••••••.•••••••• • ••••••••••
75 years and over •••••••••••••••••••••••
Pre g:n.an t . . . . . • • • . . . • . . . . . • . . . . . . . • . • • • • •
N'lll"s ing • ••••••••••••••••••••••••••••••••
IMen:
21-34 years ••••.••••••••••• • ••••••••••••
35-54 years ••••••••••••••••••••••••••• • •
55-74 years •••••••••••••••••••••••••••••
75 years and over •••••••••••••••••••••••
~er capita 2/• ••••••••••••••••••••••••••••
Low- cost
plan
Dollars
15.00
13 . 50
20.50
23 . 50
3 .00
3.50
4 . 25
5 .00
5 ·75
6 .25
6 . 50
6 .00
6.75
8.25
5· 50
5. 25
5.00
4 . 75
6. 00
8 . 00
7.00
6 . 50
6 . 25
6 . 00
5·50
Moderate­cost
plan
Dollars
20.50
18.50
27.00
31.50
3·75
4.50
5·50
6.50
7-75
8.25
8.50
8 .00
9.25
11.00
7·50
7.25
6.75
6.25
8.00
10.75
9.50
8.75
8.50
8.00
7·50
Liberal
plan
Dollars
22.50
20.00
30.00
35.00
4.00
5.00
6.50
7-50
8.50
9. 50
9·50
9.00
10.50
12.50
8.25
8.00
7.50
7.00
9.00
11•75
10.50
9·75
9·25
8.75
8.50
!/ These estimates were computed from quantities in low-costJ moderate­cost)
and liberal f'ood plans published in ·tables ·2J 3,. and 4 of the
Pctober 1957 issue of' Family Economics Review. The cost of the food plans
~as first estimated by using the average prices per pound of each f'ood
group paid by nonfarm survey f'amilies at 3 selected income levels. These
~~ice~ were adjusted to current levels by use of Average Retail Prices of
_90d 1n 46 Large Cities Combined released periodically by the Bureau of
~bor Statistics . Estimates for individuals have been rounded to nearest
~0;75 and for families to the nearest half dollar.
~ - Twenty percent added f'or small f'amilies.
~ Man and woman 21-34 yearsJ children, l-3 and 4-6 years.
Tjj Man and woman 21-34 yearsJ child 7-9., and boyJ 10-12 years.
h L/ Base on estimate of age distribution of U. s. population for 1955·
~· 8• Bureau of' Census .
-28-
Table 6.--Index of Prices Paid by Farmers for Commodities
Used in Family Living (l947-49cl00)
November 1956: March-November 1957
Item Nov. Mar. Apr.
1956 1957
May June July Aug. Sept.
All commodities •••••••••••• ll5 ll6 ll7 ll7 ll8 ll8 ll8 ll8
Food and tobacco ••••••••• -- ll5 -- -- ll8 -- -- ll7
Clothing ••••••••••••••••• -- ll3 -- -- ll3 -- -- ll4
Household operation •••••• -- ll5 -- -- ll5 -- -- ll7
Household furnishings •••• -- lo8 -- -- lo8 -- -- 109
Building materials) house -- 120 -- -- l2l -- -- l2l
Autos and auto supplies •• -- 136 -- -- 136 -- -- 135
Source: Agricultural Marketing Service.
Table 7.--Consumer Price Index for City Wage-Earner
and Clerical-Worker Families (1947-49~100)
October 1956; February-October 1957
Oct. Feb.
Oct.
ll7
--
--
--
--
--
--
Item 1956 1957 Mar. Apr. May June July Aug. Sept.
All items •••••••••••••••••• ll8 ll9 ll9 ll9 l20 120 l2l l2l l2l
Food •••••••••••••••••••• ~ ll3 114 ll3 ll4 ll5 116 ll7 ll8 ll7
Apparel ••••••••••••••••• - 107 106 107 106 106 107 106 107 107
Housing •••••••••••••••••• l23 124 125 l25 l25 126 l26 l26 l26
Rent •••••••••••••••.••. 133 134 134 134 135 135 135 135 136
Gas and electricity •••• ll2 ll2 ll2 ll2 ll2 ll2 ll2 ll3 ll4
Solid fUels and fuel oil 133 139 139 138 135 135 136 136 137
Housefurnishings ••••••• 104 105 105 105 104 105 104 104 105
Household operation •••• 124 126 126 126 l27 128 l28 l28 l28
Transportation ••••••••••• 133 134 135 136 135 135 136 136 136
Medical care ••••••••••••• 134 136 136 137 137 138 138 139 139
Personal care •••••••••••• l2l 123 l23 123 l23 l24 l25 125 125
Reading and recreation ••• lo8 llO llO ll2 lll ll2 ll2 ll3 ll3
Other goods and services. l23 124 124 124 124 l25 127 127 127
Nov,
ll8
--
--
--
--
--
--
Oct .
121
116
lo8
l27
136
ll4
138
105
l29
136
140
126
ll3
l27
.....
S9urce: Bureau of Labor Statistics. >l'U. S. GOVERNMENT PRINTING OFFICE : 195' 0 -41 11~