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R-9h9
15
BOkR.D OF GQVE.ii.NORS
Of' THE,
F'EDERAL RESERVE SYSTEM
For release in morning papers,
Wednesdey, Janua~:-y 21, 1942.
The i'oll<.>Y:ing sumrr.a.'Ff r;.f genera.] business and financi"ll concH tions in the
United States, based upon statistics
for .DecembrJr and t.he firs·t- oo:;.f of
January, will appear in the Februa;r:r
issue o1' the F'ederal Reserve Bulletin
and in tt:.e monthly reviews of tl-te
Federal Reserve Banks.
11~·
• l.n
•
Decem
. b er
IndustriRl s.ctivit..y declined. less t .nan sea.sona......
and the first he.lf of Junua17, retail trade continued in large volume, end
prices of many commodities rose further.
Production
In December totc..l vu.Lu.11e of industrial out.put declined less than
is usual p.t thi:::: seast)n and the Board's a.d.justed inJex rose furth€-r to 1613
per cent of the 19.35-1939 average. In the armam(;nt industries output continued to advance and at m.ichin<Jr;.r plc:n-ce activit,J rose sht·;rply, f'ollo\drig
little change in !•Jov,91D.bcr. Output of inaterials·, such :.w iron and steel
and nonf crrous met<;,l~, continu>.::d at peak levels P.nd lumbc:r prodtlct ion showej
less than the usual seasonal decrao.se. Au:om?bile pr-oduction declined
sharply in the latter half of December, follovnng arlt'1ou.nccment or sharp reductions in passenger car quotas, but early in Jauua~r -.111otns for tlwt month
were increased and output rose cousiderc..bly. SaJ.es of new automobiles to
civilians were halted at the begir.ning of Js.11U<:.zy p.:mding t.h~ estnblishment
of a rationing srst~u.
Textile productior. declin~~-~ somevrhat in Decembe1~ owing to a :reduction in activity at cotton· mills frou the record ~~ev~l re .ched in November •. Out. put of wool and raycn textiles was susta.ined at about capa.cit.y.
Output of' manufactured food prvduets and shoe production showed about the
customar,y seasona:.. declines. Coill ou1.put decreased scme>':~u.t in December,
while petroleum production and mini11g of .nonferrous m-et1.us !o'T•.;re roolntain~d
at the high No,rember rat~·-·
Value of ~onstructivn .:!ontracts awarded in 0ecember declined less
truin is usual at this time of yr.n.r, according to .figures ~'f tl~e F. \{. Dodge
Corporation. Awards for pliblic _9roJecr.s showed lit.~,le change, while those
for residential construction decline•:l less than season:.1ll,y following a considel~able reduction in Hovem.ber.
16
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R-949
Distribution
Voltune of retail trade, which had been large during most of the
ati.tl.lrr'..n, increased less ths.n seasonally in December. This reflected to
some extent a temporary slackening in sales around the middle of the wonth
following tl:is coun:r;: 1 s entry ir;to the war. In the first half of J e.nuary
sal;~s at department stores showed less than the custotaar;:,-· sharp rc;du.ction
from the Christmas bu,ying peak and were 1.t a level substantiaLLy higher in
comparison with a year ago than that _?revailing in other recent months.
Freight-car loadings of most products decreased by less than the
ctcstorrni"J seasonal amount in December. Coal shipments declined consider"Lbl;r in the latter part of the month but then increased sharply in the
first half of January. Shipments of miscell:-~neous freight, v'rhich includes
most manufactured products, vcere mc·.intained in large volume for this sen..son
of the year.
Comn10dity prices
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V'v'holesale corrm100.l L,'' prices increased sharply when this country
entered the war early in Deca'Uber and then showed li::.tle change during the
latter talf of t,he rr.onth. In the first half of January prices agr:lin advanced, the principal in-:::rcases b<::ing in agricultural commocli t.ies ."i.nd chemicals.
Federal action to impose Jmximu..rn ;Jrices -,vas accelerated with the
outbreak of war cmd applied on il wider scale to industrial products. Geilings v;ere extended to products in later stages of production and distribution and in most inst,mces covered consur:.KY'S 1 goocis. Cert'lin of the ::1.ctions,
like those relating to rubber rmd wool products, were associated ·ai th n~__w
FederCJ.l production r·.:::strictions. In this period also there were advances
in a nw1ber of price c<:ilings eEtab.Lished earlier.
Bank credit
To-t,al locms and investments of banl·~s in leading c1·ues, which haci
ndvanced sharply during the first half of December, have subse;Cjuently shown
little f'.lrther change.
•·
Treasury financing in the middle of Decc;;mber r.md hen:vy currency
wi"..;hd:nawals during tl1e holiday se~tson absorbed close t8 7JO ;nillion d~Jllars
of excess reserves during the :11on':h. About 500 million of this was recoveree, u; the first half of J(;.nuary, as the result of ~t decline in Trc'J.sury
de:;osit.s at the Reserve Bo.nks and a return C'f currency from circulation.
Eecent c~mn;es in excess rc;scrves r,ave been alJnost entirely at b:.;nks outside of 1-lew York Cit;/•
United States Government securi tx prices
•
Prices of Governmr:nt sec uri tiss wcr:; steady in the first half of
J3.nU'l.ry, following a decline in Dece.rabe:c ,':J,ftcr tnc entry of the United
St<:~tes into the war •
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@FedFRASER