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R-549 ... 224 BOARD OF GOVEffi~ORS OF THE FEDERAL RESERVE SYST&~ STATEMENT FOR THE PRESS For release in morning papers, Saturday, November 26, 1958. The following summary of general business and financial conditions in the United States, based upon statistics for October and the first three weeks of November, will appear in the December issue of the Federal Reserve Bulletin and in the monthly reviews of the Federal Reserve banks. Industrial production continued to increase sharply in October and the first three weeks of November, reflecting principally larger output of steel and automobiles. change in this period. Wholesale commodity prices showed little Voluma of employment and national income in- creased in October. Production In October the Board's seasonally adjusted index of industrial production was at 96 percent of the 19:C5-1925 average, as compared with 90 percent in September. Steel ingot production increased considerably, averaging 55 pl;)rcent of capacity in October, and in the first three weeks of November there was a. further substantial advance. In the auto- mobile industry output was increased rapidly during October and tho first three weeks of November both to stock dealers with new model cars and to meet the increased volume of retail demand accompanying the intraduction of new models. Production, which in the first nine months of 1958 had been at a considerably lower level, was at nearly the sume rate R-549 -2as in the corresponding period in other recent years. glass also increased sharply .further in october. 225 Output of plate Cement production showed a considerable increase, while lumber production declined slightly. Activity at textile millo, which had risen sharply during the summer, continued at about the August and Sep+Jember rate, although usually there is an increase at this time of the year. Shoe production declined somewhat further in October, and there was a decrease in output of tobacco products, while in most other industries manufacturing nondurable goods changes in output were largely seasonal in character. Mineral production show0d a further moder.:tte rise, reflecting in large part increased output of crude petroleum and nonferrous metals. Lake shipments of iron oro also were in larger volume, although a decrease is usual in October. Coal production increased seasonally. Value of construction contracts awarded in 57 Eastern States increased considerably in October, according to figures of the F. W. Dodge Corporation, re.fl0cting chiefly a sharp rise in awards for public pToj ects. Cont.racts for hospital, educt" tional, and other public build- ings included in the Public Works Administration program were in large volume, c..nd t.he:re was a furthor increase in contracts awarded for slum clearance projects of the Unit<:'d States Housing Authority. Elllployment Employment and payrolls increased somewhat further between the middle of September and the middle of October. At automobila factories employment continued to rise sharply and there were further moderate -3- R-349 increases in most other durable goods industries. 226 The number employed at canning establishments declined and in other nondurable goods in-· dustries showed little change. Employment increased somewhat at mines, on the railroads, and in the construction industry, while in trude the rise was less than seasonal. Distribution Sales at department and variety stores und by mail order h:mses showed less than the usual seasonal increase in Octob:.:r, partly because • consumer buying of winter mcrchundise 1vas retarded by unseasonably warm weather during most of thE:: month. In thG f.irst two vweks of November department store sale::. increased moderately. Freight-car loadings rose considerL:.bly further in October, owing largely to increased shipments of grains, coal, and miscellaneous ') freight. In the first half of November loadings showed a Seasonal decline. Commodivr prices iiholesale commodity prices generally showed little change from the middle of October to the third week of November. and leather advanced. Prices of steel scrap Tin plate prices, on the other hand, were reduced, and there were also decreases in zinc, hides, and rubber. Prices of farm products and foods showed small fluctuations in this period. Bank credit Tott:~.l loans t:llld investments at reporting member banks in 101 lead- ing cities declined by about ~150,000,000 during the first half of November following a substantial increase during October. The decline 227 . -4- R-549 in November was almost c.;ntirely at Neil'; York City banks and reflected the retirement of State and local government obligations held by these banks. Adjusted demand deposits, which reached an all-time peak of ~ls,ooo,ooo,ooo at rGporting banks in the last week in October, also decreased somewhat in the first half of Novemb~r. Member bank reserves in the middle of November wore at about the high level reached a month e&.rlier. Money rates and bond yields The prevailing rate on open-market commercial paper declined slightly in November to 5/8 of 1 percent, a new low level. short-term open-market rntos wore unchanged. Other Yields on U. S. Govern- ment securities and on hlgh-gr.:;.de corporate bonds showed only small ch::..ngss during Novumbor, continuing clos8 to the low levels reached in Oct.ober. -·
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