Memorandum for the Chairman of the Council on Wage and Price Stability on the Study of Steel Industry Prices and Costs

Memorandum for Chairman of the Council on Wage and Price Stability
In the year since September, 1976, the price of steel products made in the United States will have risen 12.5 percent. This contrasts sharply with an annual rate of price increase for all industrial commodities of only 7 percent.

There is no doubt that the steel industry has experienced sharp increases in costs. Despite rapid price increases, profitability in the steel industry remains weak.

Nevertheless, the continuation of the kind of price and cost increases that we have been witnessing in one of our most basic industries clearly jeopardizes our efforts to achieve a deceleration in the overall rate of inflation. A steel industry able to produce steel at low cost, using the most modern techniques, is important to the overall well-being of the United States.

I am therefore directing the Council on Wage and Price Stability to begin immediately an updated study of prices, costs, and general economic conditions in the steel industry. I expect the Council to report to me by September 30, 1977. In its report the Council should pay particular attention to:
(1) identifying the sources and reasons for increasing costs in the steel industry.
(2) examining the impact of Federal policies on steel costs, prices, and economic conditions facing the industry.
(3) actions which the Federal Government might take to moderate cost and price pressures in this industry.

JIMMY CARTER