Buyers' Strike

In the auction rooms of Melbourne, Australia last week, wool prices tumbled from $566 a bale to $466, the sharpest break in history. Reason: U.S. buyers had pulled out of the market in an attempt to force prices down. They were taking their cue from U.S. consumers at home, who were also staging something like a buyers' strike. Department-store sales for the week ended March 31 slumped 14% below the corresponding week last year (two weeks before Easter). Business inventories in February piled up to a record $65 billion.

Even Price Stabilizer Michael Di Salle was aware that the drop in buying, rather than controls, has stopped the rise in some prices. Nevertheless, last week he served up another batch of controls, extended his profit margin restrictions (TIME, April 9) to radio and TV sets, houseware, luggage and chinaware.

At best, price controls and consumer resistance have produced an uneasy price stability. The stock market, which has dawdled in a slow decline while Wall Streeters wondered whether the country was in for an inventory recession, came to life last week. Investors apparently decided that among other things the inventory scare wasn't serious and that there is more inflation ahead. In one day, the Dow-Jones industrial average jumped 3.01 to 250.32, making up all the loss of the last two weeks.

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