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BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM R-556 STATEMENT FOR THE PRESS For release in morning papers, Saturday, November 18, 1959. The following summary of general business and financial conditions in the United States, based upon statistics for October and the first half of November, will appear in the December issue of the Federal Reserve Bulletin and in the monthly reviews of the Federal Reserve banks. Rapid expansion of industrial output continued in October, and employment and pay rolls increased considerably. Distribution of commodities to consumers, which had increased in September, was maintained at the higher level in October. In the first half of November industrial activity increased further but, with production in many industries approaching capacity, the advance was less rapid than in earlier months. Commodity prices generally showed little change during October and the first half of November, following the sharp rise in September. Production Volume of industrial production showed a further sharp rise in October and the Board's seasonally adjusted index advanced from 111 to 120 per cent of the 1923-1925 average. Marked increases in activity were reported in the steel and.steel-consuming industries and at mines. In the steel industry ingot production in October was at a rate of SO per cent of capacity and actual volume of output was the greatest for any month on record. Some further increase in the rate of output was -2reported in the first half of November. R-556 163 Pig iron production also advanced sharply and lake shipments of iron ore, which had increased considerably in September, continued in exceptionally large volume. Activity in the machinery and shipbuilding industries and in most other steel-consuming lines rose in October but by a considerably smaller amount than output of steel. In the automobile industry, however, output showed less than the marked rise usual at this season. This was due to the fact that plants of one large producer were closed during most of the month by an industrial dispute. Mineral production in October was at record levels owing chiefly to a high rate of crude petroleum output. In the nondurable goods industries activity was generally maintained at the high levels reached in August and September. Flour produc- • tion declined sharply, however, following an exceptionally large volume of output in September. Value of construction contracts, as reported try the F. W. Dodge Corporation, decreased considerably in October, reflecting principally a reduction in awards for public construction. Private residential con- tracts continued in substantial volume while awards for commercial and industrial building declined somewhat following increases in the previous month. Employment Reports from leading industrial States indicate that factory employment and pay rolls increased sharply between the middle of September and the middle of October. Increases were particularly large at steel mills and in related industries. There was also a considerable increase 163 -3- R-556 in employment on the railroads in October. Distribution Retail distribution of general merchandise in October showed about the usual seasonal rise from the advanced September level. In the early part of November department store sales increased considerably. Freight-car loadings rose further from September to October, reflecting a large increase in shipments of miscellaneous freight, which includes most manufactured products, and smaller increases in loadings of coal, forest products, and ore. Commodity prices Price changes that have occurred since the general sharp rise in September have reflected largely particular developments in individual commodities. From the middle of October to the middle of November prices of a number of foodstuffs continued to decline and there were also decreases in some industrial materials, such as print cloths, wool, tin, and steel scrap. Wheat, cotton, and burlap advanced somewhat while prices of most other commodities, including finished industrial products, showed little change. Government security prices Following a sharp recovery from the low of September 21, prices of United States Government bonds showed irregular changes during the period from October 24 through the first half of November. On November 15 yields on long-term Treasury bonds were at 2.47 per cent as compared with 2.79 per cent on September 21. 164 -4- R-556 Bank credit Total loans and investments at reporting member banks in 101 leading cities increased substantially during the six weeks ending November 8, reflecting largely purchases of Treasury bills by New York City banks. Commercial loans continued to show moderate increases. Deposits at these banks rose to new high levels.
@FedFRASER