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8 SUKVEY OF CURRENT BUSINESS aid plans would prevent or at least mitigate the sharp drop in exports which had been expected as the result of the rapid depletion of foreign purchasing power was a major factor improving near-term business expectations. These in turn were reflected in more liberal buying of goods with the result that inventories rose at an accelerated rate. Wage increases contributed to the summer's developments by increasing costs of production as well as by adding to consumer purchasing power. High farm income, largely a consequence of higher prices, in turn contributed to the maintenance of demand. The redemption of the veterans' terminal leave bonds in September also gave a fillip to personal incomes toward the end of the quarter. With domestic demand strong and a continued heavy export demand expected, the reduction in the corn crop constituted a further strong incentive for price rise. Main Developments Summarized The main developments in expenditures for gross national product and in the shares of income which reflect the tendencies discussed above can be summarized as follows: 1. Total demand for domestic business investment increased moderately from 29 billion dollars to 30 billion at annual rates between the second and third quarters. Purchases of producers' durable equipment, whose rise had been progressively tapering off, continued at the high level reached in the second quarter. New private construction activity moved upward, mainly in the nonfarm residential component. The activity figures do not yet reflect fully the pronounced increase in residential starts which followed after the hesitation of winter and spring. Inventory accumulation which had dropped sharply by the end of the second quarter was resumed and rose to substantial levels by the end of the third. The resumption of inventory buying, like the previous slackening, occurred mainly in nondurable goods. Durable goods' inventories continued to be accumulated throughout the year. 2. Approximately offsetting the increase in domestic investment, net foreign purchases of American goods and services dropped from the second quarter high of 10.5 billion to an annual rate of 7.7 billion dollars in the third quarter. The drop was due mainly to the depletion of the dollar and gold holdings of foreign nations which was referred to in the analysis of the second quarter national product figures in the August issue and discussed in greater detail in the quarterly reviews of the balance of payments. About 2 billion of the decline reflected a decrease in foreign purchases of the output of American business. The remaining billion was due to smaller Government sales of surplus property abroad, and is offset by a corresponding increase in Federal purchases of goods and services which are reported on a net basis. 3. Consumer purchases increased by 4 billions at annual rates between the second and third quarters. The increase that occurred in durable goods reflected to a large extent a spontaneous increase in response to more ample supplies of scarce items, and was an independent factor in maintaining economic activity. Other increases, however, are largely explained by the movement of disposable income (see below) and also by increased prices, which consumers were willing to pay rather than to curtail correspondingly their real consumption. 4. Government purchases increased slightly between the second and third quarters reflecting a moderate expansion of State and local expenditures. Gross Federal purchases declined moderately. November 1947 Table 1.—National Income and Product, First Three Quarters of 1947 [Billions of dollars] Seasonally adjusted, at annual rates Unadjusted 1 II III 48.9 30.9 29.5 24.9 1.2 3.4 1.4 11.8 5.6 4.4 50.2 31.7 30.3 25.8 1.0 3.4 1.4 11.8 5.5 4.5 P) 32.3 31.1 27.1 1.0 3.0 1.2 11.8 5.5 4.5 197. 6 124.9 119.4 101.5 4.6 13.3 5.4 47.0 22.4 17.6 200.1 126. 3 120.9 103.5 4.1 13.2 5.5 47.2 21.9 18.0 0) 129.7 124.7 107.3 3.9 13.4 5.0 47.3 22.1 17.9 5.5 5.8 (0 7.1 6.9 0) 2.9 2.7 0) 4.3 4.2 0) -1.7 -1.0 -1.1 .8 .8 .8 22.4 29.0 11.6 17.4 -6.6 3.3 23.3 27.4 10.8 16.6 -4.1 3.3 (0 0) 0) 0) -4.5 3.4 3.7 17.6 17.0 16.4 54 3 56.5 56.7 37.4 40.2 39.9 4.2 4.7 4.6 22.2 24.3 23.8 11.0 11.2 li;5 7.9 6.6 8.1 2.1 2.4 3.0 .9 1.0 1.4 1.3 1.3 1.6 4.1 4.5 4.5 1.7 -.3 .6 2.1 2.6 1.9 6.9 7.0 6.8 4.6 4.4 4.2 .6 .5 .2 2.9 3.1 2.9 223. 1 158.0 18.5 95.3 44.2 29.4 10.3 4.4 5.8 16.5 2.7 8.3 27.4 18.2 2.2 11.4 229.1 232.3 162.0 166.0 19.2 19.9 97.8 100.0 45.0 46.1 29.1 30.4 10.4 9.6 4.1 4.8 5.5 5.6 18.0 18.0 1.5 2.0 10.5 7.7 28.2 27.5 17.4 16.7 .9 1.8 11.9 12.5 Personal income 47.1 48.2 49.7 8.7 4.0 4.6 Less: Personal tax and nontax payments Federal 8.1 3.5 4.2 .4 .5 State and local .5 38.4 44.2 45.0 Equals: Disposable personal income Less: Personal-consumption expenditures . ... 37.4 40.2 39.9 Equals: Personal saving 1.0 3.9 5.2 190.9 21.2 19.4 1.7 169.7 158.0 11.7 192.3 21 A 19.6 1.8 170.9 162.0 8.9 223.1 11.9 17.2 .5 -4.2 229.1 12.1 17.3 .5 -.7 I II III NATIONAL INCOME BY DISTRIBUTIVE SHARES National income-. Compensation of employees Wages and salaries Private Military . _ Government civilian _ Supplements to wages and salaries Proprietors' and rental income 2 _ Business and professional Farm Rental in come of persons. Corporate profits and inventory valuation adjustment. ._Corporate profits before tax Corporate-profits tax liability- _ _ Corporate profits after tax.. .. Inventory valuation adjustment Netinterest.. ..... Addendum: Compensation of general government employees 4.5 4.4 GROSS NATIONAL PRODUCT OR EXPENDITURE Gross national product Personal consumption expenditures ... Durable goodsNondurable goods Services Gross private domestic investment New construction Residential nonfarm.. . Other Producers' durable equipment Change in business inventories Net foreign investment Government purchases of goods and services. _ Federal Less: Government sales State and local DISPOSITION OF PERSONAL INCOME 200.4 21.7 19.9 1.9 178.7 166.0 12.7 RELATION OF GROSS NATIONAL PRODUCT, NATIONAL INCOME, AND PERSONAL INCOME Gross national product . Less* Capital-consumption allowances Indirect business tax and nontax liability Business transfer pavments Statistical discrepancy Plus: Subsidies less current surplus of government enterprises Equals' National income Less: Corporate profits and inventory-valuation adjustment Contributions for social insurance Excess of wage accruals over disbursements.. Plus: Government transfer payments Net interest paid by government ._. _. . . Dividends Business transfer pavments Equals: Personal income 54.3 56.5 56.7 3.0 3.0 3.1 4.2 4.3 4.5 .1 .1 .1 -2.0 -1.1 0) -.0 0) -.2 197.6 232.3 12.2 17.6 .5 C1) 2 -.1 200! 1 (0 5.5 5.8 (0 1.5 1.5 1.3 .0 .0 .0 2.6 2.5 3.3 1.1 1.3 1.0 1.4 1.6 1.5 .1 .1 .1 47.1 48.2 49.7 22.4 5.9 .0 10.4 4.5 6.2 .5 190.9 23.3 5.9 .0 10.1 4.5 6.3 .5 192.3 -.0 48.9 .0 50.2 C1) 5.2 .0 13.7 4.6 6.5 .5 200.4 12 Not available. Includes noncorporate inventory-valuation adjustment. Source: U. S. Department of Commerce, Office of Business Economics. 5. Owing to the absence of information on corporate profits, complete data on national income in the third quarter are not yet available. But it is clear that the outstanding change was the rise in private pay rolls, due to a large extent to wage-rate increases which took effect in the third quarter or whose full effect was reflected in the third quarter for the first time. Comprehensive data on hourly earnings covering all private pay rolls are not available, but information on pay rolls accounting for two-thirds of the total, and including manufacturing, mining, construction, trade, and the railroads indicates that 75 percent of the third quarter increase in pay SURVEY OF CURRENT BUSINESS November 1947 &-1 Monthly Business Statistics The data here are a continuation of the statistics published in the 1942 Supplement to the SURVEY OF CURRENT BUSINESS. That volume contains monthly data for the years 1938 to 1941, and monthly averages for earlier years back to 1913 insofar as available; it also provides a description of each series and references to sources of monthly figures prior to 1938. Series added or revised since publication of the 1942 Supplement are indicated by an asterisk (*) and a dagger (f), respectively, the accompanying footnote indicating where historical data and a descriptive note may be found. The terms "unadjusted" and "adjusted" used to designate index numbers refer to adjustment of monthly figures for seasonal variation. Data subsequent to September for selected series will be found in the Weekly Supplement to the Survey. Unless otherwise stated, statistics through 1941 and descriptive notes may be found in the 1942 Supplement to the Survey 19 46 September October 1947 November December January February March May April June July August September GENERAL BUSINESS INDICATORS NATIONAL INCOME AND PRODUCT * Seasonally adjusted quarterly totals at annual rates: National income bil of dol Compensation of employees _ . _ _ _.do _ Wages and salaries do Private do Military do Government civilian do Supplements to wages and salaries do Proprietors' and rental income do Business and professional do Farm do Rental income of persons. __do. _. Corporate profits and inventory valuation adjustment bil. of dol Corporate profits before tax do Corporate profits tax liability do Corporate profits after tax do Inventory valuation adjustment do Net interest do Gross national product do Personal consumption expenditures do Durable coods do Nondurable goods do Services do Gross private domestic investment do New construction do Producers' durable equipment do Change in business inventories do Net foreign investment do Government purchases of goods and services bil. of dol Federal (less Government sales) do State and local do Personal income do Less: Personal tax and nontax payments do Equals: Disposable personal income do . Personal savings §_ . do 179 9 119.2 113.6 93.8 6.7 13. 2 5. 5 41.9 19.9 15. 2 6.8 191 0 122.2 117. 1 98 0 5.6 13 5 5. 1 46 7 22.0 17 8 7.0 197 6 124.9 119 4 101 5 4 6 13 3 5 4 47 0 22 4 17 6 7.0 r 200 1 15.6 22.9 9.3 13.5 -7.3 3.2 207.5 147.3 16.2 88.9 42.1 27.0 8.9 13.2 4.9 4.5 18.8 27 1 11.0 16 1 -8.3 3 2 218.6 154. 9 18.2 93.6 43.1 30.4 9.3 15.7 5.4 5.2 22.4 29 0 11.6 17 4 —6 6 3 3 223 1 23 3 27 4 10 8 16 6 —4 1 3 3 229 1 28.6 18.2 10.4 179.5 19.1 160.4 13.1 28.2 16.9 11.2 187.5 19.5 168.0 13.1 r (i) 129.7 124.7 107 3 •• 1 26. 3 ' 120. 9 ' 103 5 3.9 4 1 »• 13 2 13 4 r 47 2 f 21.9 18 0 47 3 22.1 17 9 5.5 5.0 7.2 r r 158 0 7.3 • r 162 0 r r 18 5 r 95 3 r 44 2 r 29 4 10 3 r 16 5 2 7 T 8 3 19 2 r 97 8 r 45 o r 29 1 r 96 T 18 0 1 5 r 10 5 T T r r 27.4 16 0 11 4 190 9 r 21 2 r 169. 7 T 11 7 27 5 T 15 g 11 9 T 192 3 * 21 4 T 170 9 r 89 (i) (i) (i) (i) C1) 34 232 3 166 0 19 9 100 0 46 1 30 4 10 4 18 0 2 0 7 7 28 2 15 8 12 5 200 4 21 7 178.7 12 7 r PERSONAL INCOME* Seasonally adjusted, at annual rates: Total personal income bil. of dol.. Wage and salary receipts, total ...do Total employer disbursements do Commodity-producing industries do Distributive industries ... _do Service industries do Government-. _ _ _ _ _ _ _ _ do Less employee contributions for social insurance bil. of dol Other labor income _ _ _ _ _ _ _ _ _ _ . d o Proprietors' and rental income do Personal interest income and dividends^do_ . Total transfer pavments. _ _ __ .do Total nonagricultural income do 178.5 113.0 114.8 49.4 31.8 14. 1 19.5 184.0 113.6 115.4 49.5 32.0 14.2 19.7 188.4 115.4 117.2 50.6 33.0 14.4 19.2 189.9 117.0 118.8 52.3 33.5 14 4 18.6 190.3 117.1 119.2 53.1 33.5 14 6 18.0 190. 7 117.5 119 6 53.2 33.7 14 6 18. 1 191.8 117 5 119 6 53 7 33 7 14 6 17 6 190.2 116 7 118 9 53 2 33 4 14 8 17 5 191.5 118.3 120 4 54 1 34.2 14 9 17 2 195.1 121 1 123 2 55 5 35 3 15 2 17 2 196.1 121 2 123 3 55 1 35 5 15 4 17 3 r 124 6 1.8 1.6 39.5 13.3 11.1 162.0 1.8 1.6 45.3 13.3 10.2 162.7 1.8 1.6 47.6 13.5 10.3 165.6 1.8 1.6 47.2 13.7 10.4 167.3 2. 1 1.6 46.6 13.9 11.1 168.2 21 1.7 46 8 14.0 10.7 168 5 2 1 17 47 7 14 0 10 9 168 8 2 1 46 14 10 167 21 18 46 9 14.0 10 5 169 2 21 18 47 6 14 1 10 5 171 9 21 18 47 8 14 2 11 1 172 3 2 i 18 r 45 9 r 14 3 2 7 9 0 9 8 r 194. 9 r 122 5 r 56 2 35 7 15 3 r 17 4 r 10 4 r 173 1 210.3 124 3 126 3 57 4 36 2 15 2 17 5 20 18 48 2 14 8 21 2 187 5 NEW PLANT AND EQUIPMENT EXPENDITURES* All industries, total mil. of dol Electric and gas utilities ._ . __ ..do Manufacturing and mining do___ Railroad . . _do Commercial and miscellaneous do 3,310 280 1,810 160 1,070 3, 730 360 1,920 180 1,280 3 160 3 940 4 070 1 600 2,010 2 010 1 080 1,260 1 250 330 450 510 220 160 290 FARM INCOME AND MARKETINGS Cash farm income, total, including Government pavments* mil of dol Prom marketings and C. C. C. loans* do Crops* _ _ do Livestock and products* . . .do Dairy products* do Meat animals* _ _ _ _ _ _ _ .do Poultry and eggs* do _ 2, 123 2,110 1,211 899 342 302 236 3 401 3,386 1,862 1,524 343 875 288 of 1947 estimates are] based on anticipated capital expenditures of business, regarding earlier data. 2 999 2,986 1,450 1,536 315 933 274 2 438 2,420 999 1,421 317 829 266 2 284 2,248 918 1,330 330 807 187 1 897 1,853 707 1,146 292 667 181 2 076 2,010 692 1 318 345 743 224 1 974 1,914 594 1 320 345 726 236 2 026 1,989 621 1 368 379 705 261 2 211 2,185 743 1 442 392 782 234 2 662 2, 657 1 205 1 452 382 785 251 2 510 2,505 1 187 1 318 353 711 232 •p o 054 3,049 1 497 1 552 334 958 944 for January 1945-May 1946 for farm income are available on request; see note in September 1947 Survey