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SURVEY OF CURRENT BUSINESS November 1948 National Product and Income in the Third Quarter of 1948 1 HE market value of the Nation's output of goods and services, as measured by gross national product, rose to an annual rate of 256 billion dollars in the third quarter of 1948, an increase of 6 billion over the second quarter. The national income, which measures the Nation's output in terms of the incomes accruing in production, showed a comparable increase, although precise figures cannot yet be given because information on third-quarter corporate profits is not available. Personal income rose by 5 billion dollars to an annual rate of 214 billion. This third major indicator of national economic activity consists of the current income receipts of persons from all sources and differs from national income by excluding incomes that are not distributed (such as undistributed corporate profits), and by including income receipts that are not derived from current production (such as socialsecurity benefits and other transfers). The third-quarter rise in the flow of incomes and of production was due to a continued increase in prices, as well as to larger physical volume based mainly on higher employment and some improvement in materials supplies. Chart 3.—Gross National Product, by Major Components BILLIONS OF DOLLARS BILLIONS OF DOLLARS 300 300 250 - ~ 250 200 - - 200 Three major developments that occurred at the turn of the first quarter contributed to the resumption of inflationary trends in the second: the reduction of individual income taxes, the enactment of the Foreign Assistance Act, and the prospect of increased military expenditures. Prices rose from their February lows; consumer expenditures expanded; Table 3.—National Income and Product, First Three Quarters of 1948 1 [Billions of dollars] Seasonally adjusted, at annual rates Unadjusted Item I II III I II III 53.2 55.5 (') 215.1 221.7 (2) 32.9 33.6 31.6 32.3 27.1 27.7 .9 .9 3.6 3.7 1.3 1.3 35.2 33.9 29.5 .9 3.6 1.3 133.7 128.8 111.1 3.5 14.2 4.9 134. 2 129.3 111.2 3.6 14.5 5.0 140.6 135. 6 116. 4 3.7 15.6 5.0 12.6 6.3 4.5 12.6 6.2 4.5 50.6 25.0 18.0 51.8 25.4 18.9 50.2 24.8 17. 9 7.8 (22) 8.4 (2) 3.3 (2) 5.1 () —.6 -1.0 26.2 31.4 12.2 19.2 -5.3 30.9 33.4 13.0 20.4 -2.5 (22) (2) (2) () -3.9 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 3 Business and professional Farm _ Rental income of persons .... _ _ __ Corporate profits and inventory valuation adjustment 6.5 7.8 Corporate profits before tax __ _ Corporate profits tax liability 3.0 Corporate profits after tax 4.8 Inventory valuation adjustment - -1.3 Net interest __ Addendum: Compensation of general government employees 13.0 6.3 4.7 1.2 1.2 1.2 4.6 4.7 4.8 4.2 4.3 4.1 16.5 16.9 17.8 59.6 61.0 64.2 244.9 250. 4 255. 9 41.1 4.8 23.8 -- __ 12.5 43.3 5.4 25.2 12.7 43.8 5.6 25.2 13.0 172.1 21.2 101.2 49.7 176.5 22.6 103.2 50.6 178. ,5 23. 6 102. 9 51.9 10.1 2.9 1.4 1.5 5.0 2.2 2.3 8.5 3.6 1.7 1.9 5.2 -.3 10.9 4.3 2.1 2.2 5.3 1.3 1.1 38.7 14.3 7.0 7.3 19.8 4.6 5.1 37.6 14.4 6.9 7.4 20.9 2.3 1.8 39. i) 14.8 7.1 7.7 21.4 2.8 1.8 1.0 7.5 4.4 .3 3.4 .7 8.5 4.8 .1 3.8 .2 9.3 5.7 .1 3.7 3.9 30.1 17.6 1.2 13.7 2.9 33.5 19.3 .5 14.7 .7 37.7 22.6 .4 15. 5 51.1 9.2 8.6 .6 41.8 41.1 .7 52.4 3.9 3.3 .6 48.5 43.3 5.2 53.2 4.3 3.8 .5 48.9 43.8 5.1 207.3 23.2 21.1 2.1 184.1 172.1 12.0 209.0 20.8 18.7 2.1 188.2 176.5 11.7 213. 9 20. 2 18.1 2.] 193. 7 178. 5 15. 2 59.6 61.0 3.6 3.5 4.9 4.7 .2 .2 -2.0 -3.1 64.2 3.6 5.1 .2 (2) 244.9 14.0 19.1 .6 -4.2 250.4 14.3 19.7 .6 -6.0 255. & 14.6 20.1 .6 (2) Gross national product or expenditure 150 - - 150 Gross national product „_ Personal consumption expenditures Durable goods _Nondurable goods Services _ _ - -- -Gross private domestic investment New construction Residential nonfarm Other _. _ Producers' durable equipment Change in business inventories, total Nonfarm only 100 - -50 1939 4O 41 42 43 44 45 46 YEARLY TOTALS «/ 1947 1948 QUARTERLY TOTALS, SEASONALLY ADJUSTED, AT ANNUAL RATES £/. 5. DEPARTHENT OF COMMENCE, OFFICE OF BUSINESS ECONOMICS. 1 Data are for goods and services. 2 "Gross National Product" for the years 1942-45 consists of the positive values shown on the chart minus the negative values shown for "Net Foreign Investment." Source of data: U. S. Department of Commerce, Office of Business Economics. Aggregate Demand Continues Strong in Third Quarter Third-quarter expansion was a continuation of secondquarter developments (discussed in the August issue of the SURVEY). It was in contrast to the hesitancy of economic activity which was noticeable in the first quarter (May issue of the SURVEY). As will be recalled, this first-quarter hesitancy was shown in the February break of farm prices and a leveling-off in other prices. It was traceable also in a large accumulation of inventories which, in part at least, could be diagnosed as involuntary and resulting from lowerthan-anticipated purchases by consumers. The first-quarter increase of these purchases was less than any prior quarterly increase in the entire postwar period. Net foreign investment. __ _ Government purchases of goods and services Federal Less: Government sales. .State and local _ __ A Disposition of personal income Personal income Less: Personal tax and nontax payments Federal State and local . . Equals' Disposable personal income Less' Personal consumption expenditures Equals* Personal saving 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 payments _ Statistical discrepancy _ . .. _____ Plus: Subsidies less current surplus of Government enterprises __ . Equals' National income Less: Corporate profits and inventory valuation ad j ustment Contributions for social insurance Excess of wage accruals over disbursements Plus' Government transfer payments Net interest paid by government . Dividends Business transfer payments Equals: Personal income _ 1 2 3 0 53.2 0 55.5 .1 (2) -.2 215.1 -.1 221.7 .3 (2) 6.5 1.3 0 2.7 1.1 1.7 .2 51.1 7.8 1.3 0 2.7 1.4 1.7 .2 52.4 (2) 1.3 0 2.5 1.0 1.8 .2 53.2 26.2 5.0 0 10.9 4.6 7.3 .6 207.3 30.9 5.0 0 10.6 4.7 7.3 .6 209.0 (2) 5.2 -.1 10.2 4.8 7.7 .6 213.9 Detail will not necessarily add to totals because of rounding. Not available. Includes noncorporate inventory valuation adjustment. Source: U. S. Department of Commerce, Office of Business Economics. il/lontnlu BUSINESS STATISTICS J-HE DATA here are a continuation of the statistics published in the 1947 Statistical Supplement to the SURVEY OF CURRENT BUSINESS. That volume contains monthly data for the years 1941 to 1946, and monthly averages for earlier years back to 1935 insofar as available; it also provides a description of each series and references to sources of monthly figures prior to 1941. Series added or revised since publication of the 1947 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 1946 and descriptive notes may be found in the 1947 Supplement to the Survey 1948 1947 September October November December January February March April May June July August September GENERAL BUSINESS INDICATORS NATIONAL INCOME AND PRODUCTf Seasonally adjusted quarterly totals at annual rates National income, total bil. of dol Compensation of employees, total do Waees and salaries, total do Private do Military do Government civilian do Supplements to wages and salaries do Proprietors' and rental income, total do Business and professional do Farm do Rental income of persons do Corporate profits and inventory valuation adjustment total bil of dol Corporate profits before tax, total do Corporate profits tax liability do Corporate profits after tax do Inventory valuation adjustment do Net interest do 215.1 133.7 128.8 111.1 ' ' ' ' 221. 7 134. 2 129. 3 111.2 200.6 127 6 122.5 105 3 3.7 13 5 5.1 44.4 23.0 14.3 7.1 212.8 132 2 127.1 109 § 7.4 50.6 25.0 18.0 75 24 3 29.1 11.4 17.7 -4.8 4.4 27 5 32.4 12.7 19.7 -4.9 26.2 31.4 12.2 19.2 -5.3 30.9 33.4 13.0 20.4 -2.5 4.5 4.6 4.7 Gross national product, total do Personal consumption expenditures,total do Durable goods do Nondurable goods do Services do Gross private domestic investmentdo New construction do Producers' durable equipment do Change in business inventories do Net foreign investment do Government purchases of goods and services, total bil. of dol Federal (less Government sales) do State and local do 227.9 165. 6 21.1 96.8 47.7 25.6 11.6 17.6 -3.5 243.8 171.1 22.1 100.2 48.8 35.4 14.0 18.9 Personal income, total Less: Personal tax and nontax payments Equals: Disposable personal income Personal savings § do do do do 14.5 '5.0 '51.8 25.4 18.9 14.2 4.9 5.0 48.6 24.7 16 5 7.6 r 250. 4 ' 176 5 '22.6 ' 103. 2 ' 50.6 ' 37. 6 ' 14.4 '20.9 2.3 255 9 178 5 23 6 102 9 51 9 39 0 14 8 21 4 2 8 '30.1 ' 17.6 '13.7 '33.5 r 19.3 ' 14.7 37 7 22 6 15 5 207.3 '23.2 ' 184. 1 ' 12.0 '209.0 '20.8 ' 188. 2 ' 11.7 213.9 20.2 193.7 15 2 101. 2 '49.7 '38.7 14.3 '19.8 2.5 8.2 4.6 3.9 28.3 15.7 12.6 29.0 15.5 13 5 196. 7 21.7 175.0 203.1 22.2 180.9 9.7 —3 9 4 8 r 244. 9 ' 172. 1 '21.2 r 8.4 9,4 3.6 3.5 3.6 14 0 140 6 135 6 116 4 37 15 6 50 50 2 24 g 17 9 75 7 '2.9 PERSONAL INCOME BY SOURCE t Seasonally adjusted, at annual rates: Total personal income bil. of dol Wage and salary receipts, total _ _ do Employer disbursements, total _ , 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 . . ___ _ do Proprietors' and rental income do Personal interest income and dividends do Total transfer payments ___ do Total nonagricultural income _ do 206.2 121.9 123.9 55.4 36.0 15.2 17.3 200.0 122.7 124. 7 55.9 36.0 15.2 17.6 201.4 125.5 127.3 57.4 37 1 15.2 17. 6 207.7 127.4 129.4 59.2 37.4 15.2 17.6 209.4 127.5 129.7 59.3 37.5 15.3 17.6 200.8 126.9 128.9 58.0 37.8 15.4 17,7 205.6 125.7 127.8 57.0 37.5 15.4 17.9 207.4 125.0 127.0 56.3 37.2 15.6 17.9 207.2 126.8 128.8 57.2 37.9 15.6 18.1 212.3 129.7 131.9 59.6 38.2 15.8 18.3 212.9 131.8 134.0 60.0 39 0 16.2 18.8 ' 214 6 ' 134 3 ' 136 5 '61.3 39 5 ' 16 3 ' 19 4 214 6 134.5 136.8 61.5 39 5 16.2 19 6 2.0 1.9 45.0 16.2 21.2 2.0 1.9 47.5 15.9 12.0 1.8 1.9 47. 1 16.1 10.8 2.0 1.9 51.3 16.2 10.9 2.2 1.9 52.4 16.5 11.1 2.0 2.0 50.0 16.6 11.3 2.1 1.9 49.3 16.6 12.1 2.0 2.0 51.9 16.7 11.8 2.0 2.0 50.7 16.8 10.9 2.2 2.0 52.8 16.8 11.1 2.2 2.1 51.0 17.0 11.0 2.2 2 1 ' 50 0 '17.3 10 9 2 . qo 49 8 17.6 10 6 187.4 179.7 181.4 184.2 184.7 184.5 184.1 183.7 184.4 187.7 189.3 ' 191 6 192 2 2 1 NEW PLANT AND EQUIPMENT EXPENDITURES r 4 940 4,170 All industries, total mil of dol 4 140 500 Electric and gas utilities do 500 620 1,800 Manufacturing do 2 290 1 870 180 Mining do 180 210 270 r 300 Railroad do 230 180 Other transportation do 200 190 1,240 Commercial and miscellaneous do 1,160 1,340 Revised, i Estimated based on anticipated capital expenditures of business. Personal sayings is excess of disposable income over personal consumption expenditures shown as a component of gross national product above. Revised series. Estimates of national income, gross national product, and personal income have been revised beginning 1944; see pp. 27-29 of the 811275°—48 4 i 4 950 i 69Q i 2 160 i 200 i <36o i 170 1 1. 360 4 810 640 2 140 200 300 190 1,340 Ju]ily 1948 Survey for the revised figures. S-l