2 THE COST OF LIVING IN UNITED STATES IN 1926
are the prices of commodities, the cost of living tends to
change less rapidly than the wholesale price level of com-
modities. This may be seen by reference to the chart on
page 3 of the comprehensive volume on “The Cost of Living in
‘he United States, 1914-1926.” So far as past experience
affords any guide, however, in the long run the cost of living
tends to follow the wholesale price level, with a lag of some
months and with considerable less degree of change. This is
to be expected because, with food, clothing, fuel and many
sundry items, a large part of the cost of living represents
commodities, and a large part of these commodities are of
the kind directly represented in the index of wholesale
prices. For the future it is a question, however, whether we
may expect as great a correspondence between wholesale
prices and the cost of living as we have had in the past,
because there has been a marked tendency for many of the
other kinds of prices mentioned above to move very dif-
ferently from the prices of commodities.
The Total Cost of Living
Table 1 shows for the year 1926 the monthly level of the
cost of living compared with July, 1914, and also that of each
of the principal groups of commodities and services which
:nter into the cost of living. The chart facing page 1 presents
the same facts in graphic form.
Bearing in mind the general considerations discussed above,
two interesting features of the movement of the cost of
living in 1926 appear in the table and chart. In the first
place, taking the year 1926 alone, there was a general down-
ward drift in the cost of living as a whole, the index in
january, 1926 standing at 170.4 and in December, 1926 at
168.4, a drop of two points, equivalent to a decline of 1.2%.
This change in the year as a whole, however, is less significant
than the two movements of which it is composed, namely,
the decline up to August and the rise from August to Decem-
ber. The decline was a continuation of a downward move-
ment that began November, 1925 and may be considered a
more or less direct reflection of the falling tendency of whole-
sale prices which set in early in 1925. This decline in whole-
sale prices has been more marked than in the cost of living,
