LUXURY PRICES COLLAPSE

Press, Volume LXXXIII, Issue 25090, 23 January 1947, Page 8

LUXURY PRICES COLLAPSE

SIGNIFICANCE OF TREND IN AMERICA The possible significance to the American economic future of the recent collapse of luxury prices is discussed in an article in the New York “HeraldTribune” of December 28. The collapse started in the fur trade: sales were slow; stores were caught with heavy inventories; and prices fell, furs being offered in December at markdowns of 25 to 40 per cent. Other goods fol-lowed—high-priced antiques and jewellery, and numerous other luxury items. People spent less on race tracks, some takings falling as much as 40 per cent.; patronage fell at the higher-priced restaurants, and every business catering to the "big money” was hit. “There is some opinion that the luxury price collapse merely means the washing off of the big war money—the easy money of Qie black market, the profiteer, the foolish war-time spender—and that it has no over-all significance.” the article states. “There are professional pessimists who believe that the pattern of the early twenties will be exactly repeated, with a sudden collapse all along the line, and a really painful business recession, with widespread unemployment to follow. There are many variable factors, of which tiie demands of the labour unions are the most important. “But the most widely held and reliable view of the immediate economic future is along the following lines; "Some time between now and the middle of 1947, there will be a sharp decline in farm prices and in clothing, particularly women's clothing. Economists believe that both food and clothing are now sharply overpriced in relation to supply and demand. By mid-1947, farm prices are expected to fall as much as 25 or 30 per cent. When food prices drop agricultural income will drop, which will in turn a force industrial prices down. Lumber and building materials will fall sharply. This all adds up to a dip. or recession in 1947. “But the economists hasten to add that the dip will be very short. Too many people will still need cars, and refrigerators, and radios, and above all, a place to live, to permit a really serious recession to develop. After the dip, the economy will again level out, and a period of general prosperity will ensue. How long that period will last not the most courageous gazer into the economic crystal ball cares to predict.” MINING Clutha River.—The Clutha river gold ?L edge °P era t>ng at Alexandra worked 126 hours for 184 oz for the week ended January 16.—(P.A.) The Canterbury Fire and Accident Underwriters Association, at its annual meeting, elected Mr N. D'. Bowman (Guardian Assurance Company) as chairman. ana Mr J. W. Arnold (Australian Alliance Assurance Company) as vicechairman.