Recession watchers desperately searching the statistical horizon for signs that a recovery may be imminent have recently fixed their gaze on the behavior of commodity prices, which have been staging a modest rally in both futures and spot markets. But economist Brian M. Jones of Salomon Brothers Inc. points out that such prices have definite seasonal patterns that have to be taken into consideration before conclusions are drawn regarding their significance.
Salomon's analysis indicates that seasonal patterns affect spot and futures prices of both foodstuffs and industrial commodities. In general, such prices tend to be weak in January and February and then move higher during the spring. "The pickup we've seen so far," says Jones, "seems to be more related to normal seasonal variations than to a strengthening in real business activity."