The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
R-885 BOARD OF GOVER~ORS OF THE FEDERAL RESERVE SYSTEM Statema,t for the Press For release in morning papers, Friday, September 19, 1941 The following summarJ of general business and financial conditions in the United States, based upon statistics for August and the first half of September, will appear in the October issue of the Federal Reserve Bulletin and in the monthly reviews of the Federal Reserve Banks. Industrial activity increased further in A~1st and the first half <>f September, and commodity prices continued to advance. Distribu- tion of commodities to consumers e:x:panded considerably. Production In August industrial output increased somewhat more than seasonally and the Board's adjusted index advanced from 160 to 161 per cent of the 1935-39 average. There were sharp further advances in activity in the machinery, aircraft, shipbuilding, and railroad equipment industries. Lumber production also increased, while furniture production, which had been unusually large in July, showed less than the customary seasonal rise in August. Output of steel and nonferrous metals continued at near-capacity rates. In the automobile industry output of finished cars declined sharply as plants were closed during the changeover to new model production and output in factoriHs producing bodies and parts also was reduced considerably. In the first half of September automobile assemblies R-885 -2- increased as production of new models was begun but from now on, owing to Government restriction on passenger car production, output will be considerably below that during the previ.ous model year. In most nondurable goods industries production in August continued around the high levels reached earlier this year. tivity declined slightly from the record level re~:~.ched At cotton mills acin ,July, while at woolen mills there w.qs some increase. Rayor. output continued at peak levels. In th.::. silk ir.dustry opc:rations were curtailed shar;Jly, as the Gov~ ernment re4_uisitioned, all supplies of raw silk, <..nd deliveries of silk to mills declined from 28,000 bales in July to 2,000 in August. Rubber consumption also decreased, owing to a Government curtailment program. Shoe production, which had been unusually large, increased less than seasonally in August, and output of manufactured food products and chemicals showed seasonal increases from the high levels prevailing in June and July. At mines coal production in August, as in other recent months, was unusually large for the season, and output of crude petroleum rose to a record level of 4,000,000 barrels daily in the latter part of the month. Iron ore shipments down the Lakes amounted to 11,500,000 tons, the largest monthly total on record. Value of construction contract aw:~.rds showed a further sharp increase in August and was about four-fifths h.rger than a year ago, according to F'. W. Dodge Corporation reports. The rise from July was sub- stantial for all general types of construction but was most pronounced • R-885 -3for publicly-financed projects. Awards for residential building contin- ued to increase. Distribution Sales of general merchandise rose sharply in August and were at an extremely high level for this time of year. The Board's seasonally ad- justed index of department store sales advanced to 133 per cent of the 1923-25 average as compared with 115 in J1llY and an average of 103 in the first half of this year. In the early part of September department store sales declined from the peak reached in the latter part of August. Railroad freight-car loadings in August were nu1intained in the large volume reached in Jl.IDe and July. Coal shipments increased., follow- ing some reduction in July, while loadings of grain, which had been large since last spring, declined. Commodity orices Wholesale prices of most groups of commodities continued to advance from the middle of August to the middle of September. Prices of grains, other foodstuffs, and cotton showed large increases and there were advances also in prices of a number of industrial commodities not covered by Federal price ceilings. Fragmentary dn.ta available indicate that re- tail prices of foods and other conunod.i ties rose further during this period. Agriculture The outlook for agricultural production in 1941 showed little change during August. Crop prospects wer~ reduced slightly by drought but aggregate crop production is expected to be two per cent larger than • 9'"1 R-885 -4last year and the largest for any year except 1937. Total marketings of livestock and livestock products will probably be the largest on record. Preliminary estimates of the Department of Agriculture indicate that cash farm income, including Government payments, will be about ~310, 700,000,000, compared with $9,120,000,000 in l9h0. Bank credit Commercial loans at reporting member banks in 101 cities continued to rise substantially during the four weeks ending September 10. Bank holdings of United States G-overnment securities showed little net change, while holdings of other securities increased somewhat at City banks. New York As a result of the expansion in loans and investments bank deposits continued to increase. United States Government sec~ri t,y Prices of Treasury bonds ll'.D.rke"t incr0r~"sed in the latter part of Aut;,rust but subsequently declined somev:-hat in the first part of September. On September 15, the partially tax-exempt 2-3/4 per cent 1960-65 bonds were yielding 2.06 per cent compared with the record low y:idd of' 2.02 per cent •. Yields on Treasury notes showed little ch<mge in the period.
@FedFRASER