Wartime Changes in the Cost of Living

Report Outline
Changes in the Cost of Living Since August, 1939
Cost of Living and Real Wages in the World War
Price Increases During the Present Emergency
Measures to Prevent General Inflation
Special Focus

Changes in the Cost of Living Since August, 1939

Latest official figures from the Bureau of Labor Statistics indicate that the cost of living for moderate income urban families has not yet been seriously affected by the defense program. The Bureau's index number, based on the cost of goods purchased by wage earners and lower-salaried workers in 34 large cities, with the 1935–39 average as 100, stood at 101.2 on March 15. On June 15, 1939, before the war started, the index was 98.6, and by September 15, 1939, it had already risen to 100.6. The latest figure is therefore only six-tenths of a point higher than the figure of eighteen months before.

Signs are multiplying, however, that considerable increases in the cost of living may occur in the near future. A special study by the Consumers Division of the National Defense Advisory Council, now incorporated in the new Office of Price Administration and Civilian Supply, revealed that food prices went up from 1 to 8 per cent in 18 cities between April 1 and 15. Rent increases have been reported from all cities where defense industries are located, and the prices of some commodities, especially textiles, have risen considerably more than the general average.

While the cost of living as a whole has not gone up unduly, the level of prices for 28 basic commodities, as calculated by the Bureau of Labor Statistics, has advanced 37.6 per cent since August, 1939. The index of nearly 900 wholesale prices rose 11 per cent between August 19, 1939, and April 19, 1941, indicating that the pronounced increase in the cost of raw materials has been only partially reflected in the price of manufactured articles, and has not yet added a substantial amount to retail prices.