Indicators: Changing the Base

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As any reader of the U.S. Government's good, grey statistics knows, 1947-49 equals 100. But last week the Budget Bureau announced that in January it plans to change the base period for a wide range of indices—most notably the Consumer Price Index—to 1957-59. According to the bureau, indicators lose meaning unless they are based on a period recent enough for most people to remember.

Though it may help jog memories, the changeover in the base period should not, the government promises, make any difference in the percentage fluctuations shown by the indices from year to year. Thus, the rise in the Consumer Price Index from 1950 to 1960 is 23%, regardless of which base period is used. But the new base will mean a dramatic drop in the apparent level of many indicators, e.g., the Consumer Price Index for November would be 104.6 calculated on the new base v. 128.3 on tne 1947-49 base.

The Consumer Price Index is also in for a considerably more basic revision. On the strength of a survey of consumer buying habits in 1960-61, the Budget Bureau hopes in 1964 to change the weightings given to the various items that make up the index's "market basket," to make it a more accurate measure of what it actually costs the consumer to live. The bureau hopes to reflect such shifts in U.S. buying patterns as the increased spending on recreation and services, the decreased spending on household appliances.