ECONOMIC

deflator. The rate during 1973 was substantially above the high rates during1969 and 1970, but the differences between 1973 and 1969-70 are greatlynarrowed when attention is focused on the private nonfarm deflator alone(Table 11). Similarly, because farm and food prices have greater weightsin the wholesale and consumer price indexes, the latter show larger increasesfrom 1972 to 1973 than the private nonfarm deflator (Chart 3).TABLE 11.—Changes in gross national product price deflators, selected periods, 1948 to 1973[Percent change; seasonally adjusted annual rates]PeriodTotalGNPPrivateGNPPrivatenonfarmGNPNonfinancialcorporations1948 to 1973 average 12.72.42.52.11968 IV to 1969 IV1969 IV to 1970 IV1970 IV to 1971 IV . . .1971 IV to 1972 IV1972 IV to 1973 IV15.35.33.63.37.15.04.83.13.27.14.85.32.92.55.52.85.11.62.924.41 Preliminary.2 Estimate by Council of Economic Advisers.Source: Department of Commerce, Bureau of Economic Analysis (except as noted).Table 12 brings together changes during 1972 and 1973 for the majorindexes and some of their components. The acceleration in the advance ofprices is evident throughout the indexes, but the sharp advances in prices offarm products, food, and energy products dominate the extraordinary pricebehavior of last year.The role of import prices is also noteworthy. The price deflator for importsrose 26 percent during 1973. If these rising import prices were merelypassed through dollar for dollar to final purchasers in the United States,they would have accounted for about one-fourth of the rise in prices paidby U.S. purchasers in 1973.The farm deflator rose 54 percent from the fourth quarter of 1972 to thecorresponding quarter of 1973, reflecting exceptional increases in the first 3quarters of the year. The great increase in U.S. farm and food prices beganin 1972 as a reaction to the reduced world output caused by adverse weatherin several parts of the world. The single most important shortfall occurredin the Soviet Union and led that country to enter world markets for extremelylarge quantities of food and feed grains. Poor weather in other countriesalso contributed to the tightening of world food markets, and the UnitedStates, as the major source of additional supplies, was faced with a hugeincrease in demand.The sharp increase in demand continued in 1973. Rising incomes in thiscountry contributed to an increase in the demand for food, especially duringthe first part of the year. International events again added to the demandpressures on U.S. food supplies. Two devaluations of the dollar in a 15-month period, followed by further depreciation in the dollar exchange rateafter February, added to the export demand for U.S. food commodities, as67