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X-7104 T i a s i A L a a s i a i s 1 8 7 i s i n STATEMENT FOR THE PRESS For r e l e a s e in Morning Papers, Monday, February 29, 1932. The following summary of general business and f i n a n c i a l conditions in the United S t a t e s , based upon s t a t i s t i c s f o r the months of January and February, w i l l appear in the forthcoming issue of the Federal Reserve B u l l e t i n and in the monthly reviews of the Federal reserve banks. In January production of manufactures increased by about the usual seasonal amount, while output of minerals and value of building c o n t r a c t s awarded continued to d e c l i n e . Wholesale p r i c e s declined f u r t h e r during January and e a r l y February, but more r e c e n t l y p r i c e s of c e r t a i n leading commodities showed an advance. Production and employment - Volume of i n d u s t r i a l production, which includes both manufactures and minerals, increased from December to January by an amount somewhat smaller than i s usual at t h i s time of year, and the Board's seasonally a d j u s t e d index declined from 71 per cent of the 1923-1935 average to 70 per c e n t . In the s t e e l i n d u s t r y there was a seasonal increase in a c t i v i t y during January, followed by a s l i g h t d e c l i n e during the f i r s t three weeks of February. Production of automobiles, which u s u a l l y increases considerably a t t h i s season, showed l i t t l e change in January, following an increase in December. Activity at textile m i l l s increased by more than the usual seasonal amount and a t shoe f a c t o r i e s there was a seasonal increase in production. Output of coal and petroleum was s u b s t a n t i a l l y reduced. Volume of f a c t o r y employment declined by more than the usual seasonal amount between the middle of December and tk> middle of January. Number employed a t foundries, c a r - b u i l d i n g shops, clothing f a c t o r i e s , and establishments producing b u i l d i n g m a t e r i a l s declined s u b s t a n t i a l l y , while employment in the tobacco 168 X-7104 - 2 - i n d u s t r y decreased l e s s than i s u s u a l a t t h i s season, and employment in the woolen goods i n d u s t r y i n c r e a s e d , contrary to seasonal tendency. Total value of "building c o n t r a c t s awarded in 37 Eastern S t a t e s , as reported by the F. W. Dodge Corporation, declined sharply in January, and f o r the t h r e e month p e r i o d ending in t h a t month was about one-half of t h e amount awarded i n the corresponding p e r i o d a year ago. Approximately o n e - f o u r t h of the decrease was in r e s i d e n t i a l "building, and t h r e e - f o u r t h s in other types of c o n s t r u c t i o n . D i s t r i b u t i o n - Total f r e i g h t - c a r loadings decreased i n January, contrary to seasonal tendency, r e f l e c t i n g c h i e f l y smaller shipments of merchandise, m i s c e l laneous f r e i g h t , and c o a l . Department s t o r e s a l e s d e c l i n e d by about the u s u a l seasonal amount. Wholesale -prices - The g e n e r a l l e v e l of wholesale commodity p r i c e s , as measured by the index of the Bureau of Labor S t a t i s t i c s , declined 2 p e r cent f a r t h e r from December to January, although p r i c e s of some important commodities, such a s wheat, showed l i t t l e change and the p r i c e of c o t t o n advanced. During e a r l y February p r i c e s of c e r t a i n l e a d i n g commodities i n c l u d i n g g r a i n s and c o t t o n d e c l i n e d , but l a t e r i n the month t h e r e was some advance i n the p r i c e s of these commodities. Bank c r e d i t - Volume of reserve bank c r e d i t o u t s t a n d i n g d e c l i n e d in January and the f i r s t h a l f of February. This decrease has r e f l e c t e d a r e t u r n flow of currency from c i r c u l a t i o n , which has been smaller than u s u a l t h i s y e a r , t o g e t h e r with a continued r e d u c t i o n i n member bank r e s e r v e b a l a n c e s , o f f s e t in p a r t by a demand f o r r e s e r v e bank c r e d i t caused by an outward movement of gold amounting to $100,000,000 since the t u r n of the y e a r . A. d e c l i n e in money i n c i r c u l a t i o n a f t e r the f i r s t few days i n February r e f l e c t e d some r e t u r n of hoarded currency, accompanying a decrease i n bank f a i l u r e s . 189 3 M X-7104 At member banks in leading c i t i e s volume of c r e d i t continued to decline during January and the f i r s t half of February. Between January 13 and February 17, t o t a l loans and investments decreased by $550,000,000, r e p r e s e n t i n g d e c l i n e s in loans on s e c u r i t i e s , in other loans and in investments. Deposits of these banks also declined s u b s t a n t i a l l y during t h i s p e r i o d . Money r a t e s in the open market showed l i t t l e change. On February 26 the discount r a t e of the Federal Reserve Bank of New York was reduced from to 3 per, cent, and buying r a t e s on bankers' acceptances of short m a t u r i t i e s were reduced from 2 3/4 to 2 5/8 per cent.
@FedFRASER