Back on the Treadmill

The payoff for rising unemployment was supposed to be a tapering of inflation. That looked reasonable in August, when retail prices rose at an annual rate of only 2.4%. Last week, however, the Government reported that consumer prices in September jumped at a seasonally adjusted annual rate of 6%--almost equal to the fastest pace last winter. The rise, combined with a shrinkage in the average working week, ended a four-month increase in workers' purchasing power. Weekly spendable earnings, measured in 1957-59 dollars, dropped 83-c- in September to $77.68.

The September price spurt might be a misleading one-month wiggle--as the Administration claims it is. There are disquieting portents, however, that the index in October will be no better, and perhaps worse. The full impact of increases on new cars will be reflected in the October index, and fuel oil prices are also expected to boost the figures.

Food was the fastest riser in September's index. The second largest jump occurred in women's apparel, partly because, in addition to its other disadvantages, the midi is expensive. Presidential Economic Adviser Paul McCracken took some comfort in reporting that the rate of rise in the consumer price index has declined slightly quarter to quarter, despite the September increase. On the other hand, the more comprehensive price index, the so-called G.N.P. deflator, rose from the second quarter to the third quarter.

The Nixon Administration's insistence that inflation is being curbed no longer convinces all its business supporters. Fifteen chiefs of major U.S. corporations called at the White House early last week to repeat to President Nixon a plea that they had made earlier at the Business Council meeting. Inflation will not be ended, they said, until the Administration does something more to slow wage-and-benefit increases, especially in construction. Increases in major union settlements this year have been averaging 10% annually. The businessmen were not specific about just what action the Administration should take, but they seemed to want more direct and vigorous presidential preachment of wage restraint--especially to Nixon's newfound friends, the hardhats.

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