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MICS
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Consumer and Food Economics Research Division, Agricultural Research Servic·c·~
UNI TED STATES DEPARTMENT OF AGRICULTURE ilifill~!lllitiilll!llll~~~~~~~lll~~
A quarterly report on current developments in family and foo d economics and economic aspects
of home management, prepared for home economics agents and home economics specialists of
the Cooperative Extension Service.
PROPERTY OF THE
LIBRARY
DEC 2 9 1965
U.!\'EHSITY OF ht.h 1 H l '"'r<OL!. !!>.
Ai C'REC •• .;,~Ortv
ANNUAL OUTLOOK ISSUE
Contents
Page
NATIONAL ECONOMIC SITUATION AND OUTLOOK FOR 1966 --------------- 3
CLOTHING AND TEXTILES: SUPPLIES AND PRICES ---------------- - --- 5
FOOD CONSUMPTION, PRICES, AND EXPENDITURES ---------------- - ---- 9
HOUSEHOLD EQUIPMENT AND FURNISHINGS: SUPPLIES AND PRICES ------ 12
HOUSING: SUPPLIES PRICES AND OUTLOOK FOR 1966 --------------'
'
16
SOME PROVISIONS OF 1965 HOUSING LEGISLATION ----- --------------- 19
SOCIAL SECURITY .AMENDMENTS .AFFECTING OASDI 21
SOME NEW USDA PUBLICATIONS ------------------------------------- 24
COST OF FOOD AT HOME ------------------------------------------- 25
CONSUMER PRICES ----------------------------- ·------------------
ARS-62-5
December 1965
26
The articles in this issue, except for the last ,
are condensations of papers presented at the
43rd Annual National Agricultural Outlook Conference,
held in Washington, D.C., November 15-18,
1965.
Mention in this publication of commercial companies
and products does not imply endorsement
of any particular commercial concern or product.
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NATIONAL ECONOMIC SITUATION AND OUTLOOK FOR 1966
James P. Cavin
Economic Research Service, USDA
The Gross National Product (GNP) ~or the third quarter of 1965 attained an
estimated annual rate of . $677 billion. This is about 6.5 percent higher than
the same quarter of 1964. Even after allowing for a rise in the general price
level, the increase was nearly 5 percent.
We have now completed the 18th quarter of continuous economic growth--the
.longest peacetime expansion on record. The end product of the expansion, in
real terms, has been a rise of about 27 percent in the disposable income of
consumers and nearly 19 percent in their income per capita.
Private domestic investment, government purchases, and personal consumption
expenditures have contributed to the 1965 advance. In the third quarter
of 1965 gross private domestic investment totaled over $9 billion, or about
10 percent, above the third quarter of 1964. Government purchases of goods and
services were up $6.4 billion, or 5 perceP,t, and consumer expenditures nearly
$28 billion, or 7- percent, above the third quarter of 1964.
The rise in total economic activity has been accompanied by increases in
employment, wages, and consumer incomes. In the third quarter of 1965 unemployment
averaged 4.5 percent of the civilian labor force, compared with 5.1
percent a year earlier. Average weekly earnings in manufacturing were up about
$3.50, and consumer disposable income was up 7 percent above the third quarter
o~ 1964. Retroactive payments to cover increased social security benefits contributed
to this sharp advance.
The rise in consumer expenditures .largely reflects the advance in consumer
incomes. However, a rising volume of consumer credit, the excise tax cut, and
continuing effects of the 1964 tax reduction hgve enlarged the influence of
consumer spending. From early 1961 to early 1964 consumers increased their
purchases about $5 billion a quarter; since the tax cut the increase has been
stepped up to about $7 billion a quarter (see table below).
Consumer income, outlays, and savings, third quarter, 1963-65
Percent change
Item 1963 1964 1965 1963- 1964-
1964 1965
Bil. dol. Bil. dol. Bil. dol.
Disposable personal incom~ 406.1 440.3 471.3 8.4 7.0
Total personal outlays 1 -- 386.3 415.3 444.1 7-5 6.9
Personal savings Y-------- 19.8 25.0 27.2 26.3 8.8
Y Seasonally adjusted.
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Rather marked price rises have occurred in the last 12 months. Wholesale
prices have risen 2.3 percent and consumer prices 1.7 percent. Services
accounted for 55 percent of the rise in consumer prices and food for 30 percent.
Prospects for 1966 indi~ate a further increase in the GNP, accompanied by
advances in employment and consumer incomes. Increases in private investment
in new plant and equipment, government purchases of goods and services, and consumer
expenditures are expected to make the most significant contributions to
the general advance. No large changes are expected in residential construction
and net exports .
The steady uptrend of State and local outlays is expected to continue in
1966. A rise in the rate of Federal spending, largely because of expanding
defense requirements, is also anticipated. In addition, new Federal programs
affecting housing, education, recreation, health, and regional development
programs will directly or indirectly contribute to greater economic activity.
Advances in output and employment in 1966 will be accompanied by a rise in
consumer disposable income which should at least match the percentage rise in
GNP. Consumer incomes are currently being bolstered by higher wage rates, the
7 percent increase in monthly benefits under Social Security, and larger
government payments resulting from military and civilian pay bills. The continued
effect of these factors will help to offset the impact on consumer
income of the increased Social Security tax beginning January 1966. In the
second half of 1966 benefit payments under the Medicare program will provide
new supplements to income.
The anticipated rise in consumer income will be paralleled by increases
in consumer expenditures. Recent surveys of consumer buying intentions indicate
continuing large outlays for automobiles and other durables. The excise
tax cut in January 1966 should provide added stimulus for consumer purchases.
Continuation of the current economic advance is rather generally anticipated
in 1966, but there has been concern with two aspects of the Nation's
economy: The U.S. balance of payments and wholesale and retail prices that
have risen above their longtime trends in 1965.
The balance of payments improved considerably in the second quarter.
Major factors in this improvement were a substantial decline in the outflow of
private capital and an increase in net exports of goods and services. It seems
probable that merchandise exports will be an important positive influence during
1966. The value of agricultural exports is expected to exceed that of the
past 2 years, with dollar sales accounting for a somewhat larger proportion of
the total. It is expected that manufactured goods will maintain their competitive
position in world markets.
Concern about price stability stems from such developments as the rapid
expansion of demand, increases in wage rates, and defense expenditures. However,
important factors making for price stability will be present--the anticipated
rise in business investment means expansion of industrial capacity)
advances in wages have been matched generally by increased productivity, tending
to stabilize average unit labor costsJ the 1965 spurt in food prices is not
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expected to be repeated; and required increases in defense expenditures will
affect limited sectors of the economy.
Taking all factors together, we look to 1966 as another year of vigorous
and generally ~ell-balanced economic growth.
CLOTHING AND TEXTILES: SUPPLIES AND PRICES
Virginia Britton
Agricultural Research Service, USDA
Clothing Expenditures
In 1964 over $33 billion was spent by consumers to buy clothing and shoes,
according to the Department of Commerce series on personal consumption expenditures.
Per capita expenditure in constant dollars was the highest in the history
of the series dating back to 1929. It was 7 percent higher than in 1962
or 1963 and 4 percent above the previous alltime peaks in 1943 and 1946.
Part of the increased purchase of clothing is a result of rising incomes,
and part of it is related to the increasing proportion in the population of
persons at the age of maximum clothing expenditures. The proportion of 15-
to 24-year-olds was up from 13 percent in 1956 and 1957 to 15.3 percent in
1964, and is expected to reach 17 to 17.5 percent in 1970.
In 1964 clothing made up 8.4 percent of personal consumption expenditures
(table·l). Although this is a small increase from the longtime low of 8.2 percent
in 1963 it may signal a reversal of the downward trend.
Table 1. Clothing expenditures per capita, in 1958 and current dollars
and as a percent of expenditures for personal consumption
Expenditures Percent of personal
per capita consumption expenditures
Year 1958 Current 1958 Current
d'ollars dollars dollars dollars
1929 ----- 149 77 13.0 12.1
1930-40 -- 122 51 11.8 10.7
1941-46 -- 151 100 11.8 12.9
1947-61 -- 144 140 9.0 9.4
1962 ----- 152 1,59 8.4 8.3
1963 ----- 153 161 8.2 8.2
1964 ----- 163 174 8.4 8.4
Source: U.S. Department of Commerce.
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Clothing Prices
Consumer prices.--The consumer price level for apparel has risen 1.2 percent
over the year September 1964 to September 1965, as measured by the Apparel
and Upkeep component of the Consumer Price Index (table 2). 'I'his contrasted
with a 1.7 percent rise in the index for all items. The pattern of uneg_ual
increases in prices of the apparel subgroups continued, with footwear and
men's and boys' apparel leading. In the year ending September 1965 the index
for footwear increased 2. 3 percent, men 1' s and boys ' apparel 1. 2 percent, and
women's and girls' apparel 1.4 percent.
According to trade reports, prices of men's suits were rising 5 to 10 percent
this fall. Many shoes for men are $1 above last year in a fall-winter
catalog, but children's clothes show little change in price.
Table 2.--Percentage change in selected indexes of consumer prices
1961 1962 1963 September
Index to to to to
1962 1963 1964 September
Consumer price index --------- +1.2 +1.2 +1.3 +1.7
Apparel and upkeep index ~ + .6 +1.2 + ·9 +1.2
Men's and boys' apparel-- + ·5 +1.4 +1.3 +1.2
Women's and girls' apparel - .1 + .8 + .6 +1.4
Footwear ----------------- +1.4 +1.1 + . 5 +2.3
~ Also includes infants' wear, sewing materials, jewelry, and apparel
upkeep services, for which separate indexes are not available.
Source: Bureau of Labor Statistics.
1964
1965
Wholesale prices.--The index of wholesale prices of apparel rose only
0.8 percent from September 1964 to September 1965. Changes were negligible
for 3 of the 6 apparel categories, but noticeable for 3. Men's and boys'
apparel increased 2.0 percent and knit outerwear 1.3 percent, whereas infants'
and children's apparel fell 1.3 percent. The wholesale price index for leather
footwear advanced 1.8 percent. Men's and boys' footwear increased 2.7 percent,
children's and infants' 2.3 percent, and women's and misses' rose 1.1 percent.
Wholesale prices of the two most important types of household textiles
changed only slightly. Wool and part wool blankets increased 0. 7 percent and
cotton housefurnishings rose 0.2 percent.
Prices and Supplies of Fabrics and Raw Materials
In 1962 farm prices of raw cotton accounted for about 15 percent of the
consumer's dollar spent on cotton apparel and housefurnishings, and raw wool
accounted for 12 cents of the dollar on wool items. Uncured hides accounted
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for less than ~ cents of the retail dollar of leather products as a whole. In
a shoe retailing for $9-95 the value of the raw leather is 50 cents; tanning
and transportation about $1; material for soles and linings $1; labor, profit,
and overhead for the manUfacturer $3; and labor, profit, and overhead for the
retailer $4.45.
While raw fibers comprise a small part of the retail price of finished
apparel and household textiles, they comprise 50 to 60 percent of the cost of
a yard of cloth . Therefore, manUfacturers vary the fiber mix to maximize use
of the fibers with relatively lower prices. Reductions in prices of manmade
fibers , increases in production~ and improvements in quality and suitability
for specific uses have made manmade fibers strongly competitive with apparel
wool and domestic cotton. Prices of these natural fibers have been maintained
above their free market prices by the import tariff on wool and price supports
for cotton. Under new legislation, price support loans to cotton producers
are reduced below world cotton prices for the next 4 years. The new legislation
may increase the minimum support level for wool.
In the 12 months ending September 1965, wholesale prices of fabrics
increased 15 percent for silks (which are small in the total picture), 7 percent
for leather, 3 percent for wool broadwoven fabrics, and 2 percent for
cotton broadwoven goods. Prices fell fractionally for knit outerwear fabrics
of wool, and decreased 2 percent for broadwoven goods of manmade fibers and
7 percent for knit goods of manmade fibers.
In the same 12 months, wholesale prices of filament yarns and fibers
declined 1 percent and spun rayon yarns 0.5 percent, Wool yarns increased
0.6 percent and cotton yarns increased almost 2 percent.
Prices of some raw material changed enough during the year ending
September 1965 to have some influence on the prices and fiber-mix of clothing
in 1966. Hides and skins rose 31 percent, which partly explains the expected
rise in the price of shoes. Raw silk rose 20 percent. But prices fell 7 and
13 percent, respectively, for domestic and foreign apparel wool. Prices of
raw cotton fell 3 percent and, in addition, since August 1964 domestic mills
have received payments designed to equate the prices they pay for raw cotton
to the prices paid by foreign mills. These decreases may lead to increased
use of cotton and wool fibers. They may have a dampening effect on price
advances for apparel of cotton ano wool.
Prospective supplies of fibers appear ample. The 1965 cotton crop is
expected to be 14 percent above expected use in domestic mills and export.
Use by domestic mills is expected to be the highest since 1952-53, because of
advancing economic activity and the improved price of cotton in relation to
its competitors. u.s. mills are expected to use approximately 15 percent more
apparel wool in 1965 than in 1964. If demand for wool increases in the major
manUfacturing countries as it has in the United States, a moderate price rise
can be expected in late 1965 and early 1966.
Production of manmade fibers in 1964 was 14 percent higher than in 1963,
and 63 percent above 1960. In the first 6 months of 1965 it was 18 percent
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above a year earlier, with rayon up 8 percent, acetate yarn 11 percent, textile
glass fiber 18 percent, and noncellulosic fiber (excluding textile glass fiber)
28 percent. The ~uantity of noncellulosic fiber produced was 2.4 times as
great as in the first 6 months of 1960. Construction of several additional
plants is under way, which is expected to increase capacity by 26 percent over
December 1964 in 2 years.
U.S. production of cattle hides in 1965 is expected to be higher than in
1964. Demand for leather is expected to be higher because of the increased
amount used for high leather boots, loafers and casuals, and military footwear.
There is less demand for patent leathers made from leather.
New Products and Developments
Results of recent research and development activities are becoming
increasingly available on the consumer market. Strong consumer interest is
shown in permanently pressed clothing, especially men's and boys' slacks. One
source reports sales of such slacks for boys were up 40 percent from the previous
fall, even though they cost up to $2 more than regular slacks. A large
manufacturer expects good sales of a permanent-press shirt (claimed never to
need the touch of an iron) that he is introducing.
Consumers and producers are showing increased interest in shrink-resistant
wools and other recent developments. WURLA.N-treated wools in woven
fabrics, machine-knitting yarns, and knit garments are available on the retail
market under the manufacturers' trademarks, according to USDA's Western Utilization
Research and Development Division, developer of the process. More companies
are producing stretch yarns. Spandex type yarn is now available in
socks and ladies' support hose.
Vectra hosiery, made of olefin fiber, was launched on the market last
fall and winter. It is claimed to be more snag resistant than nylon, warmer
in winter and cooler in summer. Its limited range of colors and lower
resiliency may slow its capture of the nylon market.
The leather substitute Corfam is now generally available in higher priced
shoes. It is scuff-resistant, durable, and easier to clean than leather. It
does not conform to t he foot as leather does, so the original fit is very
important. Its breathability appears to be sufficient for some consumers.
About 20 leather substitutes are available for low-priced shoes.
An amendment in June t o the Textile Fiber Products Identification Act
permits the mention on labels of fibers constituting less than 5 percent of
the fabric, if they have functional significance. For example, a product may
be labeled 97 percent acetate and 3 percent spandex--~or elasticity--instead
of 3 percent "other fibers. 11 An amendment to the Wool Products Labeling Act
re~uires that a label on wool apparel stating 11Imported Fabric 11
• must name the
country of manufacture of the fabric. The purpose is to prevent consumers
from assuming the fabric comes from a country famous for superior wool
products. This amendment goes into effect in November 1965.
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Outlook
The recent increase in the importance of clothing expenditures in the budget
may herald the start of an upward trend • The outlook for supplies of
apparel is good· Manufacturers will undoubtedly try new blends of manmade
fibers and new varieties of them on the market. We anticipate wider use of
recently developed methods for improving the end-use properties of materials.
The next few months may see notable price advances for certain apparel.
Increased shoe prices may appear with the spring lines in December-February.
These may be 50 cents to $1 a pair on low- and medium-priced shoes, and as
much as $2 on some higher priced shoes. Prices of children r s clothing may be
5 to 10 percent higher in spring 1966 than in 1965.
Food Expenditures
FOOD CONSUMPTION, PRICES, AND EXPENDITURES
Stephen J. Hiemstra
Economic Re£earch Service, USDA
Expenditures for food are totaling about $85~ billion in 1965. Income
after taxes so far in 1965 is up about 6~ percent from a year earlier, and
expenditures for food are up about 6 percent.
Higher retail food prices account for about one-half of the 6-percent
increase in food expenditures in 1965. About 1 percentage point of the
increase is caused by the increase in total consumption of food (a combination
of the 1.3 percent population growth and the one-half of 1 percent decline in
per capita consumption). Two percentage points are attributed to an increase
in marketing services. The much greater increase in sales by eating and drinking
places than by retail food stores shows evidence of this. Food sold i .n
restaurants contains more marketing services per unit of food than does food
sold in grocery stores.
Food expenditures in 1965 are averaging about $439 per capita, compared
with $420 in 1964. The expenditure of the average family, which consists of
3-7 persons, is $1,469. This amounts to $28.25 per week.
Food Consumption and Supply
Food consumption per capita (in terms of the food consumption index) is
declining about one-half of 1 percent in 1965; it rose about 1 percent in 1964.
The decline is centered in livestock products, whereas last year the use of
these products increased. In terms of calories, per capita consumption is
down about 1 percent in 1965. In 1966 per capita consumption of food likely
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will be about e~ual with 1965, but a further decline is expected for livestock
products. Consumption of food from crops increased both in 1964 and 1965 and
a further gain is anticipated in 1966.
Military food procurement is likely to increase in 1966. Military use
usually accounts for only about 1~ percent of total use of far.m commodities,
so it would take a relatively large increase to cut deeply into civilian supplies.
Nevertheless, increased military procurement probably has exerted
price effects in markets for selected products. This situation likely will
continue.
In 1964 foods donated by the USDA to schools, institutions, and needy
persons accounted for about 1~ percent of total food consumed. This is up
from one-half of 1 percent in 1960. The increase in donated foods accounted
for much of the 1~ percent increase in per capita food consumption between
1960 and 1964. The Food Stamp Program, not included in the above estimates
of food donations, also is stimulating food consumption. On September 30,
1965, some 650,000 persons were covered by this program. The USDA's goal is
to extend the program to a million people by mid-1966. The donations also do
not include local purchases for school lunches that accoUnt for about threefourths
of school lunch food, nor the Special Milk Program.
Total production of farm commodities in 1965 is up more than the population.
The increase is all on the crop side, since production of livestock
products is down slightly. The increase indicated for crops is 7 percent,
according to current expectations, so end-of-year stocks are expected to
increase. Both exports and imports of farm commodities are declining slightly
during 1965.
Retail Food Prices
Because fewer food supplies reached the consumer in 1965, retail food
prices increased rather sharply. Farm prices rose strongly for some products,
and the margin between farm and retail prices declined. Price increases so
far in 1965 have been larger for food at the grocery store than food in
restaurants and other away-from-home eating places, but restaurant prices are
beginning to catch up. Food prices have increased more so far in 1965 than
has the Consumer Price Index--a switch from the usual situation.
Average retail food prices are expected to increase again in 1966, but
the increase is not expected to be as large as that in 1965. Increases likely
will be greatest for food purchased and consumed away from home, for livestock
products, and for processed foods.
Livestock Products
Meat prices have been a major factor behind the increase in average retail
food prices in 1965. All meats increased, with the largest increases for pork
and lamb. Pork prices are at record levels, and beef prices are well above a
year earlier.
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The rise in meat prices is a reaction to reduced meat supplies per capita
in an expanding economy. The decline is most pronounced in pork, with consumption
down 5 pounds per capita. Beef is down 1 pound and lamb a half pound
per capita. Poultry consumption is increasing about 2 pounds per capita.
Consumption of other livestock products--dairy products, eggs, and animal
fats--also is declining in 1965. Consumption of fats and oils declined about
1 pound and prices of these products increased sharply, partly as a result of
higher soybean prices early in 1965.
The outlook for 1966 is for a further decline in per capita consumption of
meat, though probably less than ·in 1965. Pork again is expected to account for
most of the decline. With reduced supplies, further price increases can be
expected for meat. However, the increases are expected to be much sma.ller than
those experienced in._l965. If pork supplies increase late in 1966,
as expected, pork prices then likely will be below current levels.
Crop Products
The increase in per capita consumption of crop products in 1965 was due
mostly to an increase in citrus fruit. Fresh citrus consumption is rising
about 3 pounds per capita to about the 1962 level--prior to the major freeze
damage that cut supplies for 2 years--and prices in 1965 are lower than in
1964. Consumption of frozen orange juice concentrate is up about a third in
1965. Current crop conditions point to a further gain in citrus supplies in
1966, arid prices likely will decline again.
The increase in consumption of citrus is more than offsetting some
declines in consumption of other fruits in 1965. Per capita consumption of
fresh apples and pears is down, though fresh peach use is up. Canned fruit
consumption is up slightly, particularly for pears. However, sharply reduced
harvests of fruit for processing are resulting in much lower packs for peaches,
pears, fruit cocktail, and cherries. Prices for these items likely will
increase in coming months.
Short supplies of some fresh vegetables in spring 1965 triggered some
price gyrations but total annual consumption was not materially affected.
Fresh vegetable supplies in fall 1965 are moderately larger than a year earlier.
Supplies of frozen vegetables are larger but supplies of canned vegetables
are about the same as a year earlier. Supplies of processed tomatoes
and dry edible beans are down, so prices for these products likely will rise.
Prices of processed fruits and vegetables averaged lower in 1965 than in 1964,
but increases are probable during 1966. Several price advances already have
been announced at wholesale for canned fruits and vegetables.
Potato consumption dropped off sharply in 1965 because of a short crop in
the fall of 1964 and reduced supplies during the first half of 1965. The
decline in consumption averaged 5 or 6 pounds per capita. Consumption of processed
potatoes increased, but this was more than offset by the decline for
potatoes used fresh. The drop in supplies resulted in a sharp increase in
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potato prices through mid-1965. The potato crop is expected to be about onefourth
larger in 1965 than in 1964, so prices likely will continue considerably
below a year earlier during the first half of 1966.
HOUSEHOLD EQUIPMENT AND FURNISHINGS: SUPPLIES AND PRICES
Ethel D. Hoover
U.S. Department of Labor
Production and sales of household equipment during 1965 were high, and
for a few itemB--like color TV--exceeded the most optimistic forecasts. Part
of the high level of consumer purchases is due to the fact that there are more
people, and that a larger proportion of the population is young people who
marry and begin their life as a separate family. Part is due to increased
spending with the increases in wages and salaries. The influence of goals and
expectations in our daily living must also be accounted a factor. As young
people establish homes they include in them many kinds of convenience equipment
that not too many years ago were thought of as luxuries or were not even
in existence. Older families replace outmoded equipment sometimes long before
it is worn out. During 1964, 50 to 65 percent of the refrigerators, stoves,
washers, and black and white TV sold were replacements.
The consumer's willingness to pay the price for quality products and distinctive
styles, and the industry's wholehearted cooperation in supplying the
products to meet consumers' wants (or generating wants) promise another active
year for household equipment in 1966. On prices, no consistent pressures that
would affect all or most equipment it€Ill.S appear in the making, but rather a
continuation of the moderate increases for some items and decreases for others
that we have been experiencing during the last several years.
Supply .and Demand
In 1965 production of household goods was at an alltime high level. Compared
with 1964, appliances, furniture, rugs, and miscellaneous household
goods are up by 5 to 7 percent, TV and radios 14 percent. The most striking
increases are in the electronics field, with color TV topping all others.
Sales of color TV are estimated at about 80 percent greater in the first
6 months of 1965 than in the corresponding period of 1964. Radios and portable
phonographs increased by 33 percent or mo~e, portable dishwashers 26 percent,
electric clothes dryers 15 percent, and room air conditioners 14 percent.
With a growth rate of about 24 percent in the 20-to-29-year age group of
the population projected for the next 5 years, producers and dealers expect
continued increases in sales of household goods. There are few retailers who
do not feel that there will be some increases in buying by consumers, but
probably not at as large a growth rate as in 1965. Spotty areas of slow retail
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sales are showing up in appliances and furniture. Various reasons are being
advanced, such as sluggishness in new housing starts, the appeal to consumers
of TV and stereo over the more prosaic kitchen and laundry equipment, and the
fact that sales have been so good that some weakness is to be expected as a
higher degree of ownership of appliances and furniture is reached.
All reports indicate that consumer confidence in continued prosperity will
lead to a continuation of the buying patterns of the last several years.
"Trading up" to higher quality, particularly in furniture and furnishings, and
purchases of products to increase convenience and entertainment have been
evident.
Trends in Prices
During the past 5 years the general trend in prices f or all housefurnishings
combined has been slowly downward. In June 1965, the index for housefurnishings
was 2 percent below the average for 1957-59· (See chart.) After
mid-year the removal of Federal excise taxes from some appliance items was a
contributing factor in bringing the index down t o the lowest level since
August 1950. This downward movement for housefurnishings is in contrast with
the upward movement in the Consumer Price Index for all goods and services •.
The latter index in September 1965 was about 8 percent higher than at the
beginning of 1960, while the index for housefurnishings was 3 percent l ower.
Consumer Price Index
ALL HOUSEFURNISHINGS AND SELECTED SUBGROUPS
INDEX 11957 .5 9--1001
110
105
~~~
I'<~
'\N'I'UANCES
100
95
90
85 I l ..1
1957 1958 1959
l 'NITF.D STATES DEPARTMENT OF LABOR
III 'REAI' OF LABOR STATISTlt;s
FURNITURE AND BEDI)fj(l\
,-... .,.-
r-.. ....- ~ -
~
..........
~
1960 1961
INDEX 11957·59• 1001
110
- 105
.... ------ ------- ...
i-' ..................... .,
100 -........
HOUSEFURNISHINGS f
95
~ 1---r--.._
~ 1'--o
90
• • 85
1962 1963 1964 1965
• Quarttfty data available ttu'OUih June 1964; ..m ~ .....,.,
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The major influence in the downward trend of the housefurnishings index
was appliances. The chart shows the moderate upward movement in prices for
furniture and bedding, for an increase of about 3 percent in 5 years, and the
steady downward movement for appliances, TV, and radio, for a decrease of more
than 10 percent. Floor coverings and textile housefurnishings, such as sheets
and towels, fluctuated moderately, for a net increase of about 1 to 1.5 percent.
Over the past year prices of all the appliance items sampled for the index
declined--the decreases ranging from 0.1 percent for kitchen ranges to about
7 percent for room air conditioners. Floor coverings and furniture and bedding
showed the usual pattern of some increases and some decreases.
The price trends discussed relate to merchandise of approximately the same
quality. When quality differs from one pricing date to another, the Bureau of
Labor Statistics uses the best information available on the value of the quality
difference, and eliminates that value from the price before computing the
price change. Hence, the BLS indexes for many commodities differ materially
from simple comparisons of prices for goods that have different quality characteristics
at two periods of time. For example, in one city the average price
for a refrigerator priced at the beginning of an 8-year period was $233 and at
the end $247--an increase of about 6 percent. Over this same period the BLS
price measure showed a decrease of 21 percent, because BLS had eliminated the
effect of size increases, greater frozen food storage capacity, changeover
from manual defrost to automatic or frost free, and addition of accessories.
When the forecasting glass is focused on prices in 1966, this mixture of
quality and price difference must be kept in mind. Some new models in the
appliance, radio, and TV field carry higher price tags than the 1965 models,
but they also incorporate many new features. For these goods, most signs
point to further decreases, when viewed from the "pure" price angle.
Product Developments
Television.--The current glamour item is color TV, with the new rectangular
tube receiving most attention. Since these tubes are about 5 inches
less in depth than the round tubes, the sets are less bulky. Hence, increased
furniture styling of the cases is apparent. A tight supply situation in rectangular
tubes has developed. Many of the color models for 1966 are expected
to be in 21- or 22-inch sizes, with round tubes predominating. Before the end
of the 1966 model year it is expected that color will be available in portable
sets with 19-, 15-, and 11-inch tube sizes. Tentative prices for these models
range from $250 to $450.
"Tinyvision" in black and white is also of considerable interest. These
sets, some with screens as small as 4 inches, were developed in Japan and are
now being manufactured in the United States. Plug-in and transistor models
are available, with prices ranging from about $70 to $200 or more.
-15-
Ranges.--For kitchen ranges there is continuing effort to provide easy
cleaning ~eatures such as teflon-coated and other removable oven liners
intense heat self-cleaning ovens, and lift-off doors, top heating eleme~ts,
cooking surfaces, and rack supports. Some new stoves have such features as
programmed cooking, no-turn broilers, and meat probes. The development of a
microwave oven for home use appears to be almost at the point where production
will be o~ more than token proportions. One producer r€cently announced that
he will begin to test-market a microwave oven in spring 1966 at the $400 level.
Laundry equipment.--One of the 1966 washer models represents a significant
advance in engineering adjustments to automatic washers to provide controls
needed ~or the many kinds of fabrics available. This model has solid state
controls that allow an i~inite number of settings within set limits for agitation
and spin speeds. It is being introduced as the top of the company's
line. The units will be 16-pound capacity and will probably sell for between
$230 and $350. A mat·ching dryer will be available.
Re~rigerators.--For refrigerators the filter-down process o~ desirable or
popular ~eatures is very evident. Some manufacturers have the i'rost free
feature in about half of their total lineJ some in all but the least expensive
models. The automatic ice-maker was in about 90,000 of the units sold last
yearJ the estimate for this year is for about 175,000 units, and even higher
for 1966. Other features being added are 7 -day meat keepers and adjustable
many-position shelves. Attention is also being given to movability. In the
last several years, wheels were provided on some models. This year, one producer
on some models has added an air cushion device activated by fingertip
control that floats the re~rigerator a fraction of an inch above the floor so
it can be moved with little effort.
Vacuum cleaners.--A rec€nt development in cleaning equipment is the cordless
vacuum cleaner. Price differentials over the cord types amount to $50
and more. Some reservations have been expressed as to how satisfactory the
cordless cleaner will be, since running time is short (less than an hour) and
recharging time is long (one estimate of the least time is 17 hours).
Furniture.--The · search for plastics and other materials to replace
veneers and solid woods goes on. There are reports that these substitute
materials have found their way into frames for upholstered pieces and plastics
are being used for drawers and drawer guides. Plastics processed to look like
wood have apparently gained consumer acceptance.
The increase in the average height of men and women--about 2 inches since
1900--is one of the points in the promotion of larger size beds, in addition
to greater cQmfort. The king- and queen-size mattresses, and the sheets and
blankets for these larger sizes represent a much greater outlay than for standard
sizes. For example, one catalog showed mattresses at $150 to $300 for
large sizes compared with $59 to $159 for standard, $52.97 for the king-size
electric blanket, and $28.97 for the standard size.
Household textiles.--One coming development in the curtain, drapery, and
"no-iron" or "durable-press 11 bedspread field is the application of a process
for pleats, creases, and shapeholding.
-16-
Styling.--Promotional efforts this year and undoubtedly next year are on
decorative effects at relatively high prices. Color-keyed appliances have
become quite common. The brochures of' one producer show the same designed
fronts available for all the kitchen equipment, including refrigerator, range,
built-in oven, and dishwasher. Whether a significant volume of buyers will be
willing to pay the price for high style effects is a question that will
probably be answered during the coming year.
HOUSING: SUPPLIES, PRICES, AND OUTLOOK FOR 1966
Mary Jane Ellis
Agricultural Research Service, USDA
Supply, Demand, and Price--the National Picture
By January 1966 the U.S. housing inventory will include about 65 million
housing units for a prospective 58 million households. The estimated 7 million
vacant units include about 3.5 million vacation or second homes; 1 million
units that are rented or sold and not yet occupied, used by migratory workers
in season, or dilapidated; and 2.25 million that are for sale or rent.
Since 1960 annual net gains in the housing inventory are estimated to have
been somewhat larger than the annual increases in the number of' households. As
a result the vacancy rate has increased slightly from 9·7 percent of the inventory
in 1960 to 10.0 percent in 1965. Increased building of vacation or second
homes is responsible for the higher rate, since vacancies in sale or rental
housing have remained at 3.5 percent and the number of unoccupied dilapidated
units has decreased.
Construction of' new units reached a peak in this decade in 1963 and has
since declined. The number of new units started during the first 7 months of'
1965 was about 4 percent less than in the same period in 1964. The total number
of new units started in 1965 may be just under 1.5 million.
Demand for housing changes as changes take place in the number of households.
Households have increased by about 2 percent per year since 1960. The
average annual growth rate was 4 percent for households of' individuals living
alone or with unrelated persons, and 1 percent for families headed by husbands
and wives. These currently make up about 17 and 72 percent of all households,
respectively.
The size of' family income and how much of' it is allotted to housing limit
effective demand for new housing or for improvements. Family income has been
rising in the 1960's--the median was $6,569 in 1964, 17 percent higher than in
1960. Housing (including imputed rental value) now comprises about 15 percent
of' personal consumption expenditures in the national accounts, compared with
10 percent in 1945. How consumers view the housing market and general economic
conditions also affects demann for housing. Surveys of consumer buying
-17-
intentions by the Bureau of the Census show that int entions to purchase a
house have remained fairly stable in the 1960ts.
Since supply exceeds the demand for housing it would be reasonable to
expect that prices have declined, but they have not. The major indexes of
prices all show upward trends for housing. In the Consumer Price Inde~, rent
and homeownership costs have moved up about 1 percentage point each year since
1960. Mortgage interest rates declined, but sharp increases took place in
rates for property insurance and the costs of maintenance and repairs.
PriceE of construction materials in the Wholesale Price Index have moved
upward rather slowly since 1963. Since 1960 average hourly wages of construction
workers have increased about 4 percent annually. In the first
6 months of 1965, the increase was about the same as in comparable periods
since 1960.
The Boeckh index of construction costs of frame houses and brick houses
has been at an alltime high in 1965--about 3 percent higher than in 1964.
Statistics on costs of building privately owned one-family houses (nonfarm
only) show these costs haYe b€en rising at increasing rates in the 1960's.
The average privately owned one-family house cost $161050 to build in 1964
and $13,800 in 1960.
Since most consumers finance the purchase of a house with a mortgage,
mortgage interest rates and terms are important in long-run costs. According
to the Federal Home Loan Bank Board, the average interest rate on conventional
mortgages (not insur-ed by the U.S. government) in Sept~ber 1965 was 5.75 percent
on loans for new homes and 5,89 percent for existing homes. The average
term for loans on new homes was about 25 years, for existing homes about
20 years. These figures represent little change from the previous September.
Conventional mortgages financed about 60 percent of the new private nonfarm
one-family homes sold in the fourth quarter of 1964. About 25 percent
were financed by loans insured by the Federal Housing Administration and
10 percent by loans guaranteed by the Veterans Administration. About 5 percent
did not require a mortgage. The maximum interest rate on FHA and VA
loans has been 5.25 percent since 1961, with an additional 0.5 percent for
mortgage insurance on FHA loans.
Mortgage foreclosures haYe increased every year since 1953 but the rate
of increase has been slowing down since 1961. Foreclosure rates for 1964 are
estimated at about 3 per 1;000 homes with conventional mortgages, 7 per 1,000
homes with VA~uaranteed loans, and 12 per 1,000 homes with FHA-insured loans.
Supply1 Demand, and Price in Segments of the Housing Market
Regional variation.-~ost of the slowdown in construction of nonfarm housing
has been in the Western region where housing starts in the first 7 months
of 1965 were about 25 percent lower than in that period in 1964. Construction
was down about 2 percent in the South, but up 11 percent in the Northeast and
5 percent in the North Central region. In all regions there was a slowdown
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in construction in metropolitan areas, where it declined about 8 percent on the
average. Construction in nonmetropolitan areas was up about 4 percent at the
end o~ 7 months in 1965 compared to the same period in 1964.
The costs o~ rent and homeownership have risen faster during the 1960's in
major cities located in the Northeast and the West than in those in the North
Central or South, according to the Consumer Price Index.
One-family and multi-family housing.--Construction of one-family homes in
the first 7 months of 1965 was at about the same level as in 1964. Construction
o~ apartments was abou~ 11 percent lower than a year earlier, marking at
least a temporary cessation of the boom that produced an over-supply of apartments
in some areas, particularly apartments in the luxury class. Growth in
the number o~ individuals who maintain separate households has increased the
demand for apartments, but not enough to compensate for the relatively small
increase in new marriages, the backbone of this demand.
Low-income housing.--Construction was started on about 33,000 public housing
units for low-income families in 1964. At the end of the first 7 months
of 1965 the number started was up about 34 percent over the same period in
1964. Most o~ these units are apartments in metropolitan areas.
Most new one-family houses are out of reach of the low-income population.
In the ~ourth quarter of 1964, only 11 percent o~ new one-family homes had
sales prices below $12,500. The proportion in this price range was as low as
3 percent in the Northeast and the West and as high as 20 percent in the South.
Outlook
Demand for housing is not expected to increase until 1967-68 when the
bumper crop of babies born just after World War n will be marrying. The
national supply of housing is expected to be adequate even though levels of
new construction for the next couple of years remain about what they have been
in 1965. There may be shortages near military installations if more married
men are called into service.
Consumer income will probably continue to climb and consumers will continue
to spend heavily on housing to satisfy needs that are as much social as
physical. Mortgage money is expected to remain abundant, but home buyers may
have to pay a somewhat higher rate o~ interest and make larger downpayments
than have been required recently.
In new housing the building industry seems set to offer "more house," i.e.
more space, more amenities for the same or generally higher prices. Producer
and consumer alike are caught in an upward spiral that converts today's luxuries
to tomorrow's necessities. Families whose incomes are not rising will
continue to be priced out of a housing market in which standards and prices are
continually rising. The Housing and Urban Development Act of 1965 may bring
them some relief.
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SOME PROVISIONS OF 1965 HOUSING LEGISLATION
Ralph Turner
Farmers Home Administration, USDA
The Housing and Urban Development Act of 1965 contains several new programs
and improves and extends existing authorizations. It is a major step
toward the goal of giving families in cities and rural areas an opportunity
to haye a decent home.
One of the new approaches to providing adequate housing for families who
cannot afford to pay for standard private housing in the regular market is the
authority to make supplementary rent payments. Under this program, families
whose incomes are below the low income levels that would be established for the
area in which they live would receive the benefit of monthly payments sufficient
to enable them to occupy privately financed housing. This program must
await the appropriation of funds before it becomes effective.
To qualify for rent supplements, tenants--in addition to having low
incomes--must be elderly, handicapped, displaced from their homes by Government
action~ or occupants of substandard housing or housing extensively damaged
or destroyed by natural disaster. Tenants would be expected to pay 25 percent
of their income for rent. The difference between their payments and the market
rent for the units would be madeupqythe rent supplement payment to be provided
by Federal funds. The rent supplement payment would be reduced as the tenant's
income increases and would be discontinued entirely when the market rent does
not exceed 25 percent of the tenant's income. Tenants could continue to occupy
the housing even though they were no longer receiving rent supplement payments.
Under the rent supplement program, certain nonprofit groups, limited
dividend corporations, or cooperatives may sponsor housing for low-income families.
The Federal Housing Administration will insure mortgages on housing
built or substantially rehabilitated for this program.
The 1965 law also authorizes the Federal Housing Administration to insure
loans for the development of land for residential subdivisions. Under this
program, mortgages may be insured to finance the purchase of land and the
installation of improvements such as water, sewer lines, streets, curbs,
gutters, sidewalks, and storm drainage facilities. The development must represent
sound land use and comply with a comprehensive plan for the development
of the area. Consideration must be given to facilities necessary to the
orderly development of a community, such as shopping, schools, and recreation.
The new law authorizes the Housing and Home Finance Agency to make grants
to local agencies to finance up to 50 percent of the cost of public water and
sewer facilities and two-thirds of the cost of neighborhood facilities such
as community centers, youth centers, health stations, and other public buildings
for health and recreational services in primarily low- or moderate-income
neighborhoods.
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Of special interest to families in rural areas is the increase from
$11,000 to $12,500 in the maximum loan under the Federal Housing Administration
program designed to encourage use of its insured loans in small towns and
outlying areas.
The 1965 Act made three major changes in the rural housing program of the
Farmers Home Administration: (1) The basic program, under which loans are
made to individual families, was placed on an insured basisJ (2) authority was
broadened to permit a rural family to use the loan to buy a building site for
their home or to buy a previously occupied homej and (3) the concept of a rural
area was extended to include places with not more than 5,500 population that
are rural in character. (In the past the Farmers Home Administration has not
made loans in rural places with a population of 2,500 or more.)
Under this new pxogram, insured loans can be made by the Farmers Home
Administration to families with low or moderate incomes. The interest rate on
these loans is 5 percent. Loans may also be insured for families with incomes
above the moderate level. These will pay interest rates comparable to the
interest and insurance rates on loans insured by the Fedexal Housing
Administration--currently 5-3/4 percent.
The new insuxed loan progxam for rural areas is fUnctionally the same as
that of the Federal Housing Administration, in that it is a means of giving a
family an opportunity to obtain long-term credit from local money sources.
However, it operates somewhat diffexently to meet the needs of rural families,
most of whom have relatively low incomes and little expexience with loan and
construction practices. The insured loan is made available to the family for
the actual construction or improvement of the house. The loan is supervised
and serviced by the Farmers Home Administration. Families interested in
obtaining such a loan may apply at the Farmers Home Administration office
serving the county in which the property is located. FHA employees accept the
application and check on the applicant. A committee of thxee local residents
determines whether the applicant is eligible. Most loans are approved locally.
The Farmers Home Administration has several programs relating to housing
for the rural elderly. One of these provides for direct loans to low-income
elderly rural families to help them build, buy, or improve a home. A cosigner
may be used on the note when the elderly applicant does not have sufficient
income to repay the loan. The 1965 law continues a maximum 4 percent interest
rate on these loans and permits amortization periods up to 33 years.
Another of the Farmers Home Administration housing programs for the rural
elderly provides for direct loans to pxivate nonprofit organizations and consumer
cooperatives to finance rental housing for elderly rural families with
l ow or moderate incomes. This housing may be in separate houses, duplexes, or
apartments designed for independent living. The loans bear 3 percent interest,
a new maximum established by the 1965 housing law. They may be repaid over a
50-year period.
The Farmers Home Administration may also insure loans for rental housing
for the rural elderly. These loans may be made to private individuals or to
organizations interested in providing housing for the rural eldexly and making
-21-
a profit from the rental of this property. The loans bear 5-3/4 percent interest,
and they are repayable over a period of up to 40 years. To date we have
made and authorized approval of 125 of these loans. The average cost per unit
has been about $7,000, with rents ranging from $35 to $105. In 1965 authority
to insure loans for rental housing has been extended for 4 years.
Adequate housing for the elderly can be proVided through community action.
For example, in Oak Grove, Mo., a group of local citizens formed a nonprofit
organization. Membership contributions provided the initial capital needed to
start a senior citizens rental housing project. The Farm~rs Home Administration
made a loan of $108,000 to finance 20 units and a recreational building.
The rents are reasonable, ranging from $35 to $40 a month. The organization
already has requested a subsequent loan to build more units.
Last year the Congress authorized a program under which grants could be
made up to two-thirds of the cost of construction of housing for domestic farm
laborers. These grants are available to public bodies and nonprofit organizations
interested in providing such housing as a community service. In 1965
the amount authorized to be appropriated for grants was increased from $10 million
to $50 million,. and the authority was extended for 4 years. An appropriation
of $3 million is available this year to start this program.
The Farmers Home Administration has for many years had authority to make
loans to finance water systems in the open country and in rural towns with
population up to 2,.500. A new law passed in 1965 recognizes that in many
cases water and waste disposal systems in rural areas are not economically
feasible, if they must be financed solely with loan funds. The law (1) authorizes
grants, not to exceed 50 percent of the construction cost of the project,.
to supplement loans for rural water and waste disposal systems; (2)
authorizes grants for planning water and sewage systemsj (3) increases from
$1 million to $4 million the maximum size of loan--or combined loan and grant-for
such systems; and (4) increases from 2,500 to 5,500 the size of rural
towns eligible for such assistance.
This legislation will reduce the initial cost of rural homes and stimulat~
their construction and improvement. Moreover, the installation of adequate
sewage plants will reduce the pollution of our lakes and streams. The Congress
has made $20 million available for grants to start this program. It. has also
increasea the loan insurance authority for financing water distribut~on and
waste disposal systems.
SOCIAL SECURITY .AMENJ:1.1ENTS AFFECTING OASDI
On July 30, 1965, President Johnson signed into law a group of amendments
to the 'Social Security Act that will affect most U.S. residents. Of particular
interest are the provisions for medical care for the aged and the changes in
the provisions of old-age; survivors, and disability insurance (OASDI).
-22-
OASDI Changes Effective in 1965
A 7-percent increase in monthly payments to OASDI recipients became effect
ive, retroa~tive to January 1, 1965. Persons already receiving such payments
got a special check in September for the amount due for the months January
through August. The regular monthly check reflected the increase beginning
with the one for September received in early October. OASDI benefits for new
applicants will be calculated at the new rate, which boosts the maximum payment
for a retiree from $127 to $135 .·90 a month.
Effective in September 1965 were the following provisions:
•
•
•
•
•
The widow of an insured worker may begin receiving benefits at age
60 if she elects to do so. However, she will get less each month
than if she waits until she is 62 years old.
A divorced woman may receive benefits on her former husband's social
security, if she had been married to him for 20 years before the
divorce and if he was contributing to her support when he became
entitled to benefits or died. Previously she could qualify only if
she had in her care a child receiving benefits based on his earnings.
A woman eligible for a widow's benefits, who remarries after age 60,
can receive whichever is larger: One-half the retirement benefit of
her former husband, or a wife's benefit based on the earnings of her
present retired husband.
Persons 72 years old or over who could not receive benefits before
because they had not worked long enough in covered employment may
be eligible for a small monthly payment. Although some coverage is
required, it is less than previously for certain people 72 and over.
A worker who has been disabled for 12 consecutive months, or whose
disability is expected to last at least 12 months, may qualify for
disability benefits. Previously he could qualify only if his disability
was expected to last indefinitely or to result in death.
Doctors Get Coverage.--Self-employed doctors of medicine will be covered
by social security and have their earnings count toward OASDI benefits. They
will pay the tax on their 1965 earnings.
Amendments Effective After 1965
Three more groups to benefit.--Two groups of workers will begin building
toward larger future benefits by paying the social security tax on more income
than before: (1) Workers who receive tips amounting to $20 or more a month
on one job will pay the tax on these tips beginning in 1966; and (2) selfemployed
farmers with gross income of $2,400 or less may pay the tax on twothirds
of the gross instead of on net earnings, for taxable years beginning
after 1965.
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OASDI beneficiaries who want to supplement their social security payments
by working will also gain by the 1965 amendments. In taxable years ending
after December 31, 1965, they may earn up to $1,500 a year without losing any
of their benefits. (Previously $1,200 was the limit.} If they earn more than
$1,500, $1 will be withheld for each $2 earned between $1,500 and $2,700, and
$1 for each $1 earned over $2,700, Two exceptions are: No deduction will be
made in any month a beneficiary earns no more than $125 working for someone
else or for substantial work in a business of his own, regardless of how much
he earns the rest of the yearj and no deductions will be made if he is 72 years
old or over, no matter what he earns.
Social security tax increased.--To help pay for the increased benefits
and added programs provided for in the 1965 amendments, the social security
tax will go up starting January 1, 1966. Both the tax rate and the tax base
will be higher. A wage or salary worker in a job covered by social security
will pay 4.2 percent "(including 0.35 percent for hospital insurance) of his
earnings up to $6,600 a year, compared with 3,625 percent of earnings up to
$4,800 in 1965. The maximum amount of tax will be $277.20 in 1966, compared
with $174 in 1965. For a self-employed person the tax will be 6.15 percent
(including 0.35 percent f or hospital insurance) of earnings up to $6,600
(formerly 5.4 percent of up to $4,8oo}.
Future Monthly Benefits
Workers in jobs covered by social securit y will be able t o look forward
to larger OASDI benefits, when they or their families become entitled to them,
than beneficiaries formerly received. Their earnings up to $6,600 for years
beginning 1966 will be used in calculating the average income that determines
the size of the benefit payment. The maximum income credited for this purpose
was $4,8oo in 1959-1965, $41200 in 1955-1958, and $3,600 in 1951-1954. Eventually,
the check for a retiree whose average yearly earnings under social
security are $6,600 or more could be $168 a month, compared with the present
maximum of $135-90. The table below gives examples of monthly payments for
various OASDI beneficiaries, under provisions of the 1965 Social Security
Amendments.
For Further Details
Complete details about the 1965 amendments are available from local
Social Security offices.
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Monthly OASDI peyment ~ by type of benefit ana average
yearly earnings after 1950
Type of benefit
:j;Soo or
less $3,000 $4~800
Dollars Dollars Dollars
Retirement at 65, or
disability ------------- 44.00 101.70 135.90
Retirement at 62 -------- 35.20 81.40 108.80
Wife's benefit at 65 ---- 22.00 50.90 68.00
Wife's benefit at 62 ---- 16.50 38.20 51.00
Widow 62 or over -------- 44.00 83.90 112.20
Widow 6o, no child ------ 38.20 72.80 97-30
Widow under 62 with--
1 child --------------- 66.00 152.60 204.00
2 children ------------ 66.00 202.40 306.00
Maximum family payment -- 66.00 202.40 309.20
$?,6oo y
Dollars
168.00
134.40
84.00
63.00
138.60
120.20
252.00
368.00
368.00
y Benefits in this column will not generally be payable for some years to
come, depending on current age of the worker.
Source: Social Security Administration~ OASI-1965-11 page 101 August 1965.
SOME NEW USDA PUBLICATIONS
A GUIDE TO BUDGETJNG FOR THE FAMILY. Home and Garden Bulletin No • 108 :r
October 1965. (Single free copies available from the Office of
Information, U.S. Department of Agriculture, Washington, D.C. 20250.)
Discusses the steps in making and carrying out a family budget.
CONSUMER EXPENDITURES AND JNCOME, RURAL FARM POPULATION, 1961. CES Reports
Nos. 16-20. (Single copies free from the Consumer and Food Economics
Research Division,. ARS, USDA~ Federal Center Building, Hyattsville, Md.
20782.)
These publications give data on the incomes and expenditures of farm families
in 1961 from the Survey of Consumer Expenditures. The first 5 reports
(giving data classified by single characteristics of families) were listed in
the October 1965 issue of Family Economics Review. The following (giving data
classified by pairs of characteristics of families) have been made available
since: No. 16 - Northeastern Region; No. 17 - North Central Region; No. 18 -
Southern Region; No. 19 -Western Region; and No. 20- United States.
CONS1JMERS ALL. The Yearbook of Agriculture, 1965. (For sale by the Super-intendent
of Documents, U.S. Government Printing Office, Washington, D.C.
20402, for $2.75.)
A "how to" book for consumers, including information on family money
management, buying household equipment, and cutting food bills.
-25-
COST OF FOOD AT HOME
Estimated for Food Plans at Three Cost Levels, se p t • 196 5, U.S. Average , 1 ~
Sex-age groups gj Cost for 1 week Cost for 1 month
Low-cost Moderate- Liberal Low-cost Moderate- Libera plan cost plan plan plan cost plan plan
1
FAMILIES Dollars Dollars Dollars Dollars Dollars Dollar s
Family of 2:
20-35 years ~ ..... 15.00 20.00 23.20 64.60 86.60 100.60 55-75 years "JJ ..... 12.40 16.90 19.20 53.80 73.30 83.30 Family of 4:
Preschool children ~ 21.80 29.00 33.60 94.20 125.70 145.50 School children 2/· . 25.10 33.60 39.20 108.30 145.60 169.80
INDIVIDUALS §}
Children, under 1 year 3.00 3.90 4.20 12.90 16.80 18.00 1-3 years .......... 3.80 4.90 5.70 16.40 21.30 24.50 3-6 years ........... 4.40 5-90 6.80 19.10 25.70 29.50 6-9 years .......... 5.30 7.10 8.50 22.90 30.80 36.80 Girls, 9-12 years .... 6.10 8.20 9.20 26.30 35.40 39.70 12-15 years ........ 6.60 9.00 10.50 28.70 39.00 45.30 15-20 years ........ 7.00 9.20 10.40 30.20 39.80 45.20
Boys, 9-12 years ..... 6.20 8.30 9.60 26.70 36.10 41.50
12-15 years ........ 7.10 9.80 11.20 30.70 42.60 48.40
15-20 years ........ 8.40 11.20 12.80 36.30 48.50 55.50
Women, 20-35 years ... 6.40 8.50 9.70 27.50 36.80 42.00
35-55 years ........ 6.10 8.20 9.40 26.50 35.40 40.60
55-75 years ........ 5.20 7.10 8.10 22.60 30.80 34.90
75 years and over .. 4.80 6.30 7.40 20.60 27.40 32.00
Pregnant ........... 7.60 9·90 11.10 32.80 42.80 48.10
Nursing ............ 8.70 11.30 12.50 37.60 48.90 54.30
Men, 20-35 years ..... 7.20 9.70 11.40 31.20 41.90 49.50
35-55 years ........ 6.70 9.00 10.40 29.00 39.10 45.20
55-75 years ........ 6.10 8.30 9.40 26.30 35.80 40.80
75 years and over .. 5.70 8.00 9.10 24.60 _3_4 ._50 39.40
1/ Estimates computed from quantities in food plans published in Family Economtcs
Review, October 1964. Costs of the plans were first estimated by using
average price per pound of each food group paid by nonfarm survey families at
3 income levels in 1955. These prices were adjusted to current levels by use
of etail Food Prices by Cities, released by the Bureau of Labor Statistics.
2 e groups lnc u e e persons of the first age listed up to but not
inc uding those of the second age listed.
~/ Ten percent added for family size adjustment. For derivation of factors
for adjustment, see Family Food Plans and Food Costs, HERR No. 20.
4/ Man and woman, 20-35 years; children, 1-3 and 3-6 years.
)/Man and woman, 20-35 years; child, 6-9 and boy, 9-12 years.
~ Costs given are for individuals in 4-person families. For those in other
si~e families these §djustments are suggested: 1-person, add 20%j 2-personkadd
10~J 3-person, add 5~J 5-person, subtract 5%~ 6-or-more-person, subtract 10~.
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CONSUMER PRICES
Consumer Price Index for Urban Wage Earners and Clerical Workers
(including single workers)
(1957-59 = 100)
Group
All items
Food ............................... .
Food at home .•.....•............•.
Food away from home .............. .
Housing ............................ .
Shelter y ....................... .
Rent ......•............•.•......
Homeownership g( ............... .
Fuel and utilities 1/ ............ .
Fuel oil and coal ........•.•....
Gas and electricity ...........••
Household furnishings and operation
Apparel and upkeep~ .............. .
Men Is and boys r •••••••••••••••••••
Women r s and girls I ••••••••••••••••
Footwear ..........•.......•.......
Transportation ..................... ,
Private ....................•......
Public •.•.........................
Health and recreation ..........•••.•
Medical care ..................•..•
Personal care .........•..........•
Reading and recreation ....•.......
Ot her goods and services 21 ........ .
Oct.
1964
108.5
106.9
105.3
115-7
107.6
109.2
108.2
109.6
107.4
102.9
108.2
102.8
106.2
106.7
102.9
111.4
109.4
108.0
ll9.3
114.0
119·9
109.7
114.5
109.1
110.0
110.1
108.6
118.2
108.2
110.7
109.0
111.4
105.3
103.5
107-7
102.9
106.4
107.2
102.6
112.7
111.0
109.5
121.5
115.6
122.8
109.0
114.3
112.6
Sept.
1965
ll0.2
109.7
108.0
118.8
108.6
110.8
109.1
111.6
107.4
104.3
107-9
103.1
107.2
107-9
103.8
113.4
111.0
109.5
121.6
115.8
122.8
109.2
114.8
112.7
Oct.
1965
110.4
109.7
107.8
119.2
109.0
111.2
109.2
112.1
107.7
106.9
107-9
103.3
107.8
108.7
104.3
114.4
111.2
109.7
121.6
.u6.2
123.0
109.2
115.2
113-3
]J Also includes hotel and motel rates not shown separately.
gj Includes home purchase, mortgage interest, taxes, insurance, and maintenance
and repairs.
3/ Also includes telephone, water, and sewerage service not shown separately. £I Also includes infants 1 wear, sewing materials, jewelry, and apparel
upkeep services not shown separately. 21 Includes tobacco, alcoholic beverages, and funeral, legal, and bank
service charges.
Source: Bureau of Labor Statistics, U.S. Department of Labor.
-27-
CONSUMER PRICE INDEX
%0F1957-59 ____________________________ ~------------------------------------~
120r-~------------~--------------~
115 Health &
110
1051----4--
100~~~~~.~~~?!~~~~-~--------------~
95r---~--------------~--------------~
1958 1962 1966
* INCLUDES SHELTER, FUEL UTILITIES, HOUSEHOLD OPERATION. ~URNISH/NCS EOUIPMEHT.
BLS DATA; CITY WAGE EARNERS AND CLERICAL WORKERS; /PH 3-MOHTH AVERAGES.
U.S. DEP .. RTMENT OF .. GRICUL TURE NEG, 65 16 ) 572• AGRI CUL TUR .. L RESEARCH SER VICE
Index of Prices Paid by Farmers for Family Livi ng Items
(1957-59 == 100 )
Item
Nov. June July Aug . Sept .
1964 1965 1965 1965 1965
Oct .
1965
All items .................. 105 107 107 107 107 107
Food and tobacco • tt ••••••• -- 111 -- -- 109 --
Clothing ................. -- 111 -- -- 113 --
Household operation ...... -- 110 -- -- 110 --
Household furnishings .... -- 96 -- -- 96 --
Building materials, house. -- 101 - - -- 102 --
Autos and auto supplies .. 102 105 -- -- 101 101
Source: U.S. Department of Agriculture, Statisti cal Repor t i ng Servi ce .
Nov .
1965
107
--
--
--
--
--
102
