THE WHOLESALE PRICE of beef fell last month, which is a welcome development. But then there has also been movement, considerably less welcome, in the price of gasoline. The Labor Department's computer has typed out its monthly profile of the prices that producers get for their goods-prices foreshadowing changes that will eventually work their way through the system to the consumer. The greatest attention goes, naturally enough, to a few signal items, such as meat and fuel, that most people buy more or less continuously. But what else is going on, among the hundreds of commodities that the computer tracks?
Even apart from food and oil, the prices of raw materials in general have been moving upward briskly in recent months. The rise has been upspectacular but steady. Even with farm products and fuel excluded, the index for industrial commoditites has been going up at an annual rate of about 10 percent since the beginning of the year. It has become an important contributor, in a quiet way, to the national inflation rate.
Chemicals, rubber, leather and especially non-ferrous metals; they have all been going up, since January, by more than the general pace of inflation. It's another piece of the evidence that, through the winter and early spring, the American economy was growing at a faster rate, and sucking in raw materials more rapidly, than it could manage without the kind of strain that sends producers' prices up. Since most of these items are traded worldwide, the figures also suggest that the strain is worldwide.
What's normal rate of rise in commodity prices? For a very long time it was zero. From the late 1940s until the end of the 1960s, although consumer prices kept creeping slowly upward, the average price of crude materials did not go up at all.Oil rose a little, although less than consumer prices in general. But foodstuffs were absolutely stable and chemicals did almost as well. Rapid increases in productivity offset the increases in producers' costs, and gave most of them improved profits to boot. But, in the 1970s, productivity gains have been poor.
That long period of stability in the commodity markets was taken for granted at the time. In retrospect, it appears to have been a crucial element in the very rapid growth of the industrial world's prosperity throughout those decades. Since the late 1960s, in nearly every major category of industrial commodities, prices have doubled or worse. Oil continues to be the most spectacular and dangerous example. But the trouble, unfortunately, isn't limited to oil.