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R-100 211 BOARD OF GOVEfu~ORS OF THE FEDERAL RESERVE SYSTEM STATEMENT FOR THE PRESS For release in morning papers, Frtday, October 29, 1957 The following summary of general business and financial condi t.ions in tho United States, based upon statlsUcs for September and the first three weeks of October, will appear in the November issue of the Federal Reserve Bulletin and in the monthly reviews of the Federal Reserve b<mks. Declines in industrial production in September and the first part of October reduced output to the level of a year ago, and commodity prices continued to decline. Thu volume of distribution to consumers was maintained at the level of previous months. Production and employment Volume of industrial production, as measured by the Board's seasonally adjusted index, declined in September to 111 percent of the 1925-1925 average as compared with 114 in June and July and 117 in August. At steel mills, where output in August had been at a high level, partly on the basis of orders placed ()arlier in the year, activity was reduced to an average rate of 75 percent of capacity in September. This decline continued in October, as new orders were in limited volume, and the rate of steel output in the fourth week of the month is estimated at about 52 percent of capacity. There were also declines in Septemb€r in activity at woolen mills, shoe factories, and at sugar refineries, and activity at cotton mills showed little change, although an increase is usual at this season. Increases in output were reported at silk mills 212 R-100 -2- und meat packing establishments where activity recently has been at a low level. Automobile production showed a decline from the high level of August, but in the first three weeks of October advanced shnrply as most manufacturers began assembling 1958 models. Mineral output increased in September, reflecting an expansion in coal production. Output of crude petroleum declined somewhat but contlnued in large volume. Value of construction contracts awarded, us reported by the F. W. Dodge Corporation, was smaller in September and the first half of October than in the preceding six weeks, private residential building and sharp ~~th decline~ private work and for publicly-financed work. a modercte decline in in awards for other Currently the dollar volu.me of private work is about the same us a year ago, vrhile awards for public work are in smaller volume. Factory employment showed little change from August to September, although an increase is usual at this season. There were de- clines in the number employed at textile mills, shoe factories, railroad repair shops, and lumber mills. ployment increased seasonally. At canning establishments em- Factory payrolls, which usually expand in September, declined substantially, reflecting principally a reduction in the average number levels of emplo~ent o~ hours worked by those e~ployed. The and payrolls continued to be considerably above last year. Distribution Distribution of commodities to consumers by department stores R-loo213 -3- and mail order houses increased more than seasonally in September, and variety store sales showed about the usual seasonal expansion. Freight- car loadings increased by the usual seasonal amount from August to September. Commodity prices The general level of wholesale commodity prices, according to the Bureau of Labor Statistics' index, declined from 87.5 percent of the 1926 average in the latter part of September to 85.2 in the middle of October. During that period price declines occurred in most com- modi ties traded in on orgc_niz.ed exchanges and in some manufactured products. In the ten days endi.ng October 25 commodity markets were steadier. New models of automobiles are currently being introduced at higher prices. Bank credit Excess reserves of member banks, after increasing in September from $750,000,000 to over $l,OOO,OOO,OOO, showed little further change in October. Total loans and invest:nonts of reporting member banks in 101 leading cities declined sc,mewhat in the four weeks ending October 20, reflecting chiefly a steady reduction throughout the period in loans to security brokers and dealers. Commercial loans increased further. Money rates and security prices Rates on 9-m-::-.nth Treasury bills in October declined to about 5/8 of one percent, the lovvest since last Jnnunry. bonds showed little change in September ~nd Prices of high-grade October, while prices of lower-grade bonds and of ccmmon stocks declined sharply to the lowest levels since the middle of 1935.
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