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1938: Cost Of Living

The cost of living for the first three-quarters of 1938 showed an average downward trend as reflected by an analysis of the living expenses of wage earners and low salaried workers in thirty-two large cities of the United States. This survey was conducted and compiled in thirty-two cities by the Bureau of Labor Statistics of the U. S. Department of Labor. The index of the cost of all goods purchased by wage earners and lower salaried workers in these cities is based on a 'standard' cost during the period 1923 to 1925 taken as 100. In the quarter period from Dec. 15, 1937, to March 15, 1938, this index was 83.0 in March as compared with 84.5 in December, showing a decrease in living cost of 1.5 per cent during these three months. Costs were 0.9 per cent lower than they were a year earlier and 16.7 per cent lower than in December 1920. They were 11.4 per cent higher than the low point of June 1933. The cost of living among the cities, analyzed, showed the greatest decline in New York, Boston, Jacksonville and Atlanta, in all cases decreasing more than 2 per cent. This decrease is largely attributed to the drop in the largest single item in a working man's budget — the price of food. The average price of food was 4.9 per cent lower in March 1938 than in December 1937. During this quarter, clothing costs showed an average decline of 1.4 per cent; rent increased 0.1 per cent; the cost of heat and light increased 0.7 per cent. The cost of housefurnishing goods declined 2.4 per cent.

The second quarter, from March to June 1938, showed a fractional increase in the cost of living (0.4 per cent), due largely to an appreciable rise in the cost of food. A 2 per cent increase in food prices during these months is due in part to the rise in the prices of potatoes and apples which normally occurs during the spring months. An increase in the prices of lettuce, carrots, oranges and celery also contributed to the upward trend of food prices. During these months eggs showed the greatest change with a 10.6 per cent advance in price. The cost of clothing decreased 0.7 per cent, price reductions being most noticeable in men's and women's shoes and boy's suits. Rents increased 0.4 per cent, the largest advances being made in Chicago and in Pittsburgh where rentals advanced 3.8 per cent and 1.4 per cent, respectively. Fuel and light costs declined 2.8 per cent, due primarily to a reduction in the price of bituminous coal which in June cost 15 per cent less than in March. The cost of household furnishings decreased 1 per cent, textile furnishings, rugs and suites of furniture being most noticeable in reduced prices.

The second half of the year from June to December showed a continued reduction in the cost of living, the general index being 0.7 per cent below the June average. Food costs during this period went down 1.9 per cent, influenced largely by a 16.8 per cent reduction in the prices of fruits and vegetables. Clothing costs were reduced by 0.7 per cent, reflecting a decline in the price of shoes, men's suits and women's coats. Average rental prices remained practically stationary. Fuel and light costs averaged 1.5 per cent higher toward the end of the quarter following an upward trend in the price of bituminous coal. Household furnishings averaged a 1.4 per cent decrease effected largely by lower prices on rugs and suites of furniture.

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