Inflation Merry-Go-Round

In Washington, the Fair Dealers' wonderful theory that the U.S. can enjoy inflation without paying for the ride had all but gone out the window last week. There was no longer much pretense, except for some cheerful whistling by Commerce Secretary Charlie Sawyer, that the big ($500 million-plus) steel wage boost would not have to be paid for by the customer. The OPS flooded with demands for higher ceilings by 1,800 manufacturers, got ready a "pass-through" letting them tack on their higher costs from the $5.20-a-ton price boost in steel, plus additional markups for higher copper and aluminum prices.

The merry-go-round of inflation was already starting new circles. Higher costs had brought the cost-of-living index in July to a new alltime high (see NATIONAL AFFAIRS). That meant still higher wages--an immediate boost of 3-c- an hour for 1,000,000 auto workers. And that meant still higher costs for the auto industry. The OPS has already authorized a 1% boost in the price of cars, and more will probably soon be asked.

But it began to look as if U.S. customers were holding their pocketbooks tighter. Consumers still had money, and plans, for plenty of future buying, according to all the surveys, but in recent weeks they had not been in any hurry to start. Auto dealers last week were worried about the fact that the strike-born car shortage had not brought any increase in demand. And many department stores reported that the customers were showing a similar stay-at-home attitude.

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