Section 12
Prices

This section presents indexes of wholesale, retail, and consumer prices, as well as prices for selected commodities. The primary sources of these data are monthly publications of the Department of Labor, Bureau of Labor Statistics, which include: Monthly Labor Review; Consumer Price Index; Estimated Retail Food Prices by Cities; Retail Prices and Indexes of Fuels and Utilities; and Wholesale Prices and Price Indexes. The Statistical Reporting Service of the Department of Agriculture prepares indexes of prices received and prices paid by farmers; see section 23, Agriculture.

The Bureau of Labor Statistics prepares monthly indexes of wholesale prices for a large selection of commodities; monthly indexes of consumer prices for both commodities and services; and weekly indexes of spot market prices for 22 commodities. The single year 1967 is now the standard reference base period for these and other general purpose index numbers prepared by Federal agencies. It was adopted in March 1970 by the U.S. Office of Management and Budget and replaces the 1957-59 base period which had been in use since 1960. Wholesale and consumer price indexes were changed to the 1967 base effective with the release of data for January 1971. Indexes on the 1957-59 base appear, through 1969, in the 1970 edition of the Statistical Abstract; price indexes for later years on a 1957-59 base may be obtained from the Bureau of Labor Statistics.

Wholesale price index. This index, dating from 1890, is the oldest continuous statistical series published by the Bureau of Labor Statistics. It is designed to measure average changes in prices of commodities sold in primary markets in the United States. The index has undergone several revisions (see Monthly Labor Review, February 1962). It is now based on approximately 2,580 commodity price series instead of the approximately 1,900 included in the 1947-60 period and the 900 included for the period prior to 1947. Prices used in constructing the index are collected directly from sellers, if possible, and generally apply to the first significant large-volume commercial transaction for each commodity-i.e., the manufacturer's or other producer's selling price, the importer's selling price, or the selling price on an organized exchange or at a central market.

The weights used in the index represent the total net selling value of commodities produced or processed in this country, or imported. The values are f.o.b. production point and are exclusive of excise taxes, interplant transfers, military products, and goods sold directly at retail from producing establishments. Effective January 1967, the weights are values of net shipments of commodities as derived from the industrial censuses of 1963 and other data.

Consumer price index. This index measures the average change in prices of goods and services purchased by families of urban wage earners and clerical workers and by single persons living alone. Prior to the most recent revision, completed in December 1963, the coverage of the index was restricted to families of two or more persons. The weights used in calculating the index are based on studies of actual expenditures by wage earners and clerical workers. The quantities and qualities of the items in the "market basket" remain the same between consecutive pricing periods, so that the index measures the effect of price change only on the cost of living of these families. The index does not measure changes in the total amount families spend for living; city indexes do not measure relative differences in prices or living costs between cities.

A study conducted during 1917-19 provided the weights used until 1935. Since then, this index has undergone four major revisions, which involved bringing the "market basket" of goods and services up to date, revising the weights, and improving the

sample and methodology. From 1935 through 1949, time-to-time changes in retail prices were weighted by 1934-36 average expenditures except for certain temporary wartime adjustments. Weights used for 1950 through 1952 represented estimated 1947-49 spending patterns. Beginning 1953, the weights represented average purchases of urban wage-earner and clerical-worker families in 1950. The most recent revision, incorporated in a new series beginning in 1964, introduced expenditure weights relating to 1960-61. The description which follows and the tables in this section refer to the new series.

The list of items currently priced for the index includes approximately 400 goods and services. For some items, several different qualities are priced. The items priced are described by detailed specifications to insure that, as far as possible, the same quality is priced each time, and that differences in reported prices are measures of price change only. All taxes directly associated with the purchase or continued use of the items priced are included in the index.

The national index is based on prices collected in 56 areas. These include the urban portions of 37 standard metropolitan statistical areas (SMSA), the more extensive standard consolidated areas for Chicago and New York-Northeastern New Jersey; and 17 nonmetropolitan urban places. Area definitions are those established for the 1960 census and do not include any subsequent revisions. Foods, fuels, and a few other items are priced monthly in all areas. Prices of most other goods and services are obtained monthly in the 5 largest areas and every 3 months in other areas. Rents are surveyed bimonthly in the 5 largest areas and every 3 months in other areas. Between scheduled survey dates, prices are held at the level of their last pricing for all goods and services except new automobiles. Price data for the 56 areas are combined for the United States with weights based on 1960 population of the several areas represented by each sample area. Separate indexes are compiled for 23 of the 56 areas.

Consumer price index: Food component.-Food price indexes are computed as a subgroup of the consumer price index. Weights used at various times are consistent with those for the index as a whole. The indexes have been computed from prices of varying numbers of foods during different periods. They were based on 60 foods for January 1950 to December 1952, 90 foods from January 1953 to December 1963, and 96 foods beginning January 1964.

Historical statistics.-Tabular headnotes provide cross-references, where applicable, to Historical Statistics of the United States, Colonial Times to 1957. See preface.

No. 568.

PURCHASING POWER OF THE DOLLAR: 1940 TO 1972 (1967-$1.00. Wholesale prices prior to 1961, and consumer prices prior to 1964, exclude Alaska and Hawaii. Obtained by dividing the average price index for the 1967 base period (100.0) by the price index for a given period and expressing the result in dollars and cents]

Source: U.S. Bureau of Labor Statistics. Monthly data in U.S. Bureau of Economic Analysis, Survey of Current Business.

FIG. XXIII. CONSUMER PRICE INDEXES: 1956 To 1972

100

90

80

1972

nmm.m

80

60

60

347

Source of figs. XXII and XXIII: Charts prepared by U.S. Bureau of the Census. Data from U.S. Bureau of Labor Statistics.

No. 569. CONSUMER and WHOLESALE PRICES, PERCENT CHANGE: 1960 TO 1973 [Annual averages, except as indicated. Consumer prices prior to 1964, and wholesale prices for 1960, exclude Alaska and Hawaii. Minus sign (-) denotes decrease]

Source: U.S. Bureau of Labor Statistics, Monthly Labor Review, March 1973, and unpublished data.

No. 570. WHOLESALE PRICE INDEXES-MAJOR COMMODITY GROUPS: 1940 TO 1973 (1967-100. Prior to 1961, excludes Alaska and Hawaii. See Historical Statistics, Colonial Times to 1957, series E 25 and 26, for indexes on a 1947-49 base]

Source: U.S. Bureau of Labor Statistics, Wholesale Prices and Price Indezes, monthly, and Monthly Labor Review. No. 571. GROSS NATIONAL PRODUCT, IMPLICIT PRICE DEFLATORS: 1960 To 1972

Source: U.S. Council of Economic Advisers, Economic Report of the President, January 1973. Data from U.8. Bureau of Economic Analysis.

Wholesale Price Indexes

349

No. 572. WHOLESALE PRICE INDEXES, BY STAGE OF PROCESSING: 1950 to 1973 [1967=100. Prior to 1965, excludes Alaska and Hawaii. See Historical Statistics, Colonial Times to 1957, series E 42-64, for indexes on 1947-49 base]

Source: U.S. Bureau of Labor Statistics, Wholesale Prices and Price Indexes, monthly, and Monthly Labor Review.

No. 573. INDEXES OF SPOT PRIMARY MARKET PRICES: 1950 TO 1973 (1967-100. Index computed daily through 1968; weekly beginning 1969; represents unweighted geometric average of price quotations of 22 commodities, traded on organized exchanges. This index is much more sensitive to changes in market conditions than is a monthly or weekly wholesale price index]

Source: U.S. Bureau of Labor Statistics, Tuesday Spot Market Price Inderes and Prices.

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