The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
. . X-4781 FEDERAL RESERVE BOARD STATEMENT FOR THE PRESS For release in :v:orning Papers, -:r.<i.lrsday, J'Ocnuary 27, 1927 T~e following is a summary of b~neral business and financial conditions throughout the severa.l Federal Reserve Districts, based u~on statistics for the months of December and January, as contained in the forthcoming issue of the Federal Reserve Bulletin. Vohc..;ne of out-mt of industry decreased fu.rther i::J. December to t~1e level in :r:ore tna"l. a year, and w:tolesal.e Drices continued to decline. lowest Easier co'ldi tions in the money market in Janu.q.ry re?f1ected t[le Qsual seasonal liquidation after the turn of the year. Proci.uction.- In Dece:nber, for the tnird consecutive month, there was a uecrease in industrial production, and the Board's new index, with adjustment for seasonal variations, was 105 on the basis of t:ne average for 1923, 1924, and 1925 as 100. Tl1is compares with 113 in Se;>tember, the .. igh 90int of the year, and with 108 a year ago. The decline since tne recent high point has been entirely L1 the manufacturing industries, as the output of minerals was at a :record high level in November and showed only a slight decline in December. By far the greatest recession of recent months .Clas "been in the automobile inciustry, output of passenger cars and trucks in the United States decreasing from 425,000 in August to 165,000 in December, of automobiles is usual at the end of the year, Reduction in the manufacture '.~~Then plants close for inventory ta.lcing a:1d re1Jairs, but in December, 1926, the decline wa.s considerably larger than usual. Production of iron and stePl has also been sbarnly reduced since the middle of autumn, and activity in the woolen a:nd worsted and silk industries has oeen somewhat curtailed. Production of lu.nbe r, cerrent, end otter building materials has reflected the usual winter decrease in demand. Cotton consU'J!"'?tion, on the other hand, wa.s larger t11an in any ?revious December. DigitizedFactory for FRASERemolo;y!Ilent and -s>ayrolls decli;1ed further in December, reflecting de- x-4731 - 2 - creases in nearly all i:ndustries exce)t cotton goods, cloL.ing, foundries and machine shor>s, and 1rinting and. "'1u1;Es' inJ?;. Tbe value o+' bui 1din.g co:1tracts a ..·::;rded. in Dece;:cber, · s in ?'ovembe r, wa.s larger than in the corres-oo:r:di:1g ueriod a ;yesr e~:rlier, but for the first three weeks of Jarruary contracts v·ere in s:r,aller volu:ne t:1an during tl1e saile weeks of 1926. l T~·~is decline in Jan\lar;/ v;:is largel;>r concentrateO. in the :Jew York and Atlanta Federal reserve districts, ago. w:~ere ouildin~"· '.ivas unusually active a year Residential contracts were sialler in Dece:nbe::- than a year earlier in nearly all districts, the incre&.se in the total for the ir,ontl1 being in other types of building. Trade.- Retail sales during the holiday trade in December exceeded all previous records. Sales of de;Jart:"ent stores were a:Jproximately 4 per cent larger than in December of last year, and sales of mail order houses, while slig:1tly smaller tban i:J. any other year. 1925, were larger than in the corres .90nding month of Sales at wholesale, on the otl1er hand, declined in December and were S'11aller than a year ago in practically all leading lines, exce"?t shoes. ~lerchandise stocks carried by is usual in December and '."•ere de~Jart·:::ent so~e·Hhat stores were reduced slightly more tlwn smaller at the end of the month than in 1925, and wholessle stocks were also sligl:.tly smaller t:1an a year ago. "reight car loadings showed about the us~al seasonal decline in December, with shi -;;r.nents of all groU')S of co·,.mnodi ties, exci:l:Jt coal and mercnandise in less than car load lots, in Prices.- s~aller vol~~e tha~ ~~~olesale ~rices a year earlie::-. declined further in December, ~~d the Bureau of Labor Statistics index at 147 for that :nonth was at the lowest level since the middle of 1924. Prices of agricultural products, which declined consider- ably in October and November, increased slig.C.tly in December, owing to advances in prices of grains and cattle. In the first three weeks of Ja.~uary tnere were further increases in grains, and advances also in cotton, hogs, and flour. Prfces of non-agricultural 9roducts declined in December owing chiefly to de- ,, - ) x-'+7£1 creases in bi tu.~inous coal, clothing :-:1aterials, nonferrous metals, ::::nd buildi!lg :naterials. ·~:ere In Jan.U9.ry iron and steel wices slightly reduced and there were furti:cr d.ecl ines in bi tumi::wus co::..l c.nd. noafurrous ..'C::to.ls, ·,vhile :;>rices of cotton goods and coke advanced. Bank Credit.- At the reserve banks during the four weeks following the peak of tho seo.sonal curreacy demand., there was a return flow of Federal reserve notes and oth0r cash from circulation amounting in the aggregate to about $400,000,000. This return flow pf currency y;as in ~:.~.bout the saue volume as a year ago, and, together wi tl1 substantial gold imyorts, was reflected in a reduction of the volume of reserve b~~k credit in use to a level on January 19 lower than at a.YJ.y time since the SU'!tner of 1925. Loans and investments of member ba!lks in leading cities, after increasing to a record level at the end of the year, declined shar·9ly in Jarmary. Com- mercial loans, which l1ad reached their se'.lSOnal :;>ea'.<: in lJove:'!!ber were in the :nidc~le than of JailW:J.ry about $200,0 1JO,il00 oeloi"! the rr.axi"'-lm figv.re b".J.t still more ~300, 000,000 aoove the le-.rel of a re·?orting banks also decl L1ed after the ~rear ago. ~'-J.r"'c cre<:tse in Dece:nber and were slightly s:naller Easier money conditions prevailed in the Loans on securities of the of t:'ll:' t~an ~-ear fo llo•::ing a large i::t- in Jam::J.ry of last year. .~1oney market i::1 January, and rates on prime commercial paper declined from 4 l/2 to 4 l/4 9er cent, and those on bankers' acce9t~1ce~ from 3 7/3 to a range of 3 5/3- 3 3/4 per cent.
@FedFRASER