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Economic Report
of the President

Transmitted to the Congress
February 1984
TOGETHER WITH

THE ANNUAL REPORT
OF THE

COUNCIL OF ECONOMIC ADVISERS
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON : 1984
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402




C O N T E N T S
Page

ECONOMIC REPORT OF THE PRESIDENT

1

ANNUAL REPORT OF THE COUNCIL OF ECONOMIC
ADVISERS*

11

CHAPTER 1. T H E STRATEGY OF ECONOMIC POLICY
CHAPTER 2. T H E

UNITED

STATES

IN THE WORLD

21
ECONOMY:

CHALLENGES OF RECOVERY

42

CHAPTER 3. INDUSTRIAL POLICY

87

CHAPTER 4. FOOD AND AGRICULTURE

112

CHAPTER 5. FINANCIAL MARKET DEREGULATION

145

CHAPTER 6. REVIEW AND OUTLOOK

175

APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF
THE COUNCIL OF ECONOMIC ADVISERS DURING 1983
APPENDIX B. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND PRODUCTION
*For a detailed table of contents of the Council's Report, see page 15.




(Ill)

205
213







ECONOMIC REPORT
OF THE PRESIDENT




ECONOMIC REPORT OF THE PRESIDENT
To the Congress of the United States:

I have long believed that the vitality of the American economy and
the prosperity of the American people have been diminished by inappropriate policies of the Federal Government: unnecessary government regulations that discouraged initiative and wasted scarce capital
and labor; an inefficient and unfair tax system that penalized effort,
saving, and investment; excessive government spending that wasted
taxpayers' money, misused our Nation's resources, and created
budget deficits that reduced capital formation and added to the
burden of the national debt; and monetary policies that produced
frequent business cycles and a path of increasing inflation.
I came to Washington to change these policies. The needed reforms are far from complete, but substantial progress can already be
seen: the burden of regulation has been reduced, tax rates have been
lowered and the tax structure improved, government spending on a
wide range of domestic programs has been curtailed, and a sound
monetary policy has been established.
Although the full favorable effect of those reforms on our Nation's
rate of economic growth will take time to develop, some of the benefit of our economic policies is already visible in the current recovery.
The economy's performance in 1983 was very gratifying to me. The
3.2 percent rise in consumer prices between 1982 and 1983 was the
lowest rate of inflation since 1967. The recovery produced a sharp
drop in unemployment and a substantial increase in the income of
American families. The number of people at work increased by more
than 4 million and the unemployment rate fell from a high of 10.7
percent in December 1982 to 8.2 percent in December 1983. The 6.1
percent rise in real gross national product (GNP) last year means that
real annual income per person in the United States rose $700.
Reducing Unemployment

Despite the substantial reduction in unemployment, the number of
unemployed workers remains unacceptably high. Continued economic recovery will mean millions of additional jobs in the years ahead
and further declines in the rate of unemployment. In 1984 alone, the
American economy is expected to add more than 3 million additional
jobs. By the end of the decade, we will need 16 million new jobs to
absorb a growing labor force. Only a strong and expanding economy




can provide those jobs while achieving a progressively lower level of
unemployment over the next 6 years.
Although economic growth is by far the most important way to
reduce unemployment, special policies to help the structurally unemployed and particularly disadvantaged groups can also be helpful. To
assist these individuals in developing job-related skills that will lead
to productive careers in the private sector, I proposed the Job Training Partnership Act that I signed into law in 1982. Last year I proposed additional measures to increase opportunities for training and
retraining. Although the Congress has enacted some of my employment proposals, I am still waiting for congressional action on others.
Of particular concern to me is the unemployment among teenagers. Such unemployment is not only a problem in itself, but is also
indicative of lost opportunities to acquire on-the-job training and
job-related skills. It is widely recognized that the minimum wage law
is a substantial barrier to the employment of teenagers, especially minority teenagers. I have proposed that during the summer months
the minimum wage for teenagers be reduced to 75 percent of the
regular minimum wage. This reform would give many teenagers the
opportunity to get a first job and acquire the skills needed to help
them with subsequent employment and would not hurt adult employment. With an unemployment rate of nearly 50 percent among black
teenagers and with only about 20 percent of black teenagers employed, we must act. The Federal Government must not be the
source of barriers to employment.
Inflation and Monetary Policy

Reducing the rate of inflation was my most immediate economic
goal when I arrived in Washington. In the preceding 24 months, the
consumer price level had increased more than 27 percent. Many
people feared the U.S. Government had lost its ability to control inflation. Until inflation was brought under control, a healthy recovery
could not get under way.
The inflation rate has declined dramatically over the past 3 years.
Between 1982 and 1983, the consumer price index rose only 3.2 percent. Americans can again have confidence in the value of the dollar,
and they can save for the future without fearing that the purchasing
power of these savings will be destroyed by inflation. I am firmly
committed to keeping inflation on a downward path. We must never
relax in our pursuit of price stability.
The basic requirement for a continued moderation of inflation is a
sound monetary policy. I continue to support the Federal Reserve in
its pursuit of price stability through sound monetary policy. Last year
was a particularly difficult time for monetary policy because of the




substantial changes in financial regulations. I am pleased that, in
spite of these difficulties, the monetary aggregates at the end of the
year were within their target ranges. I expect that in 1984 the Federal Reserve will expand the money stock at a moderate rate that is
consistent with both a sustained recovery and continuing progress
against inflation.
There are those who advocate a fast rate of money growth in an
attempt to depress interest rates. Experience shows, however, that
rapid money growth inevitably leads to an increased rate of inflation
and higher interest rates. The only monetary policy that can bring
interest rates down, and keep them down, is one that promotes confidence that inflation will continue to decline in the years ahead.
The Dollar and the Trade Deficit

The high interest rates in the United States and our low rate of
inflation continue to make dollar securities an appealing investment
for individuals and businesses around the world. In addition, the
United States has been an attractive place for stock market investment and for direct business investment. The result has been a continued rise in the dollar's exchange value relative to other currencies
of the world.
The sharp rise in the value of the dollar since 1980 has made it
cheaper for Americans to purchase products from overseas, thereby
helping us fight inflation. But the dollar's sharp rise has made it difficult for American businesses and farmers to compete in world markets. The decline in U.S. exports and the substantial rise in our imports has resulted in record trade deficits in 1982 and 1983. The
trade deficit has been temporarily exacerbated by the international
debt problems and by the more advanced stage of recovery in the
United States than in the world at large.
Despite these problems, I remain committed to the principle of
free trade as the best way to bring the benefits of competition to
American consumers and businesses. It would be totally inappropriate to respond by erecting trade barriers or by using taxpayers' dollars to subsidize exports. Instead, we must work with the other nations of the world to reduce the export subsidies and import barriers
that currently hurt U.S. farmers, businesses, and workers.
I am also firmly opposed to any attempt to depress the dollar's exchange value by intervention in international currency markets. Pure
exchange market intervention cannot offset the fundamental factors
that determine the dollar's value. Intervention in the foreign exchange market would be an exercise in futility that would probably
enrich currency speculators at the expense of American taxpayers, A
combination of exchange market intervention and expansionary mon-




etary policy could reduce the dollar's exchange value, but only by
causing an unacceptable increase in the rate of inflation. The dollar
must therefore be allowed to seek its natural value without exchange
market intervention.
Regulation

One of the four key elements of my program for economic recovery is a far-reaching program of regulatory relief. Substantial progress has been made during the last 3 years. The growth of new regulations has been reduced by more than a third. The demands on the
private sector of government paperwork have been reduced by several hundred million hours a year. The Congress approved legislation
that has led to substantial deregulation of financial markets and intercity bus transportation. The Federal Communications Commission,
with our support, has reduced the regulation of broadcasting and of
new communications technology, and the Interstate Commerce Commission and the Civil Aeronautics Board have gone far down the
path of deregulation of competitive transportation markets. The
benefits of these and other deregulation measures are now increasingly apparent to American consumers and businesses.
It is also apparent that substantial further deregulation and regulatory reform will require changes in the basic regulatory legislation. I
urge the Congress to act on the several measures that I proposed last
year on natural gas decontrol, financial deregulation, and reform of
private pension regulation. I remain confident that there is a basis
for agreement on measures that would reduce the burden of Federal
regulations, while protecting our shared values and not jeopardizing
safety.
Tax Reforms

The final installment of the 3-year personal tax cut took effect in
July, giving a helpful boost to the economic recovery. The income
tax rate at each income level has been reduced by about 25 percent
since 1980. In 1984 a median income four-person family will pay
about $1,100 less than it would have without these tax reductions.
And, beginning in 1985, the tax brackets will be adjusted automatically so that inflation will no longer push taxpayers into higher brackets and increase the share of their income taken in taxes.
The Economic Recovery Tax Act of 1981 went beyond reducing
tax rates to establish important reforms in the structure of the tax
system. For businesses, the Accelerated Cost Recovery System increased the after-tax profitability of investments in plant and equipment. The sharp fall in inflation has also increased after-tax profit-




ability. As a result, investment in business equipment has recently
been quite strong despite the high real interest rates.
For individuals, the Economic Recovery Tax Act reduced the marriage tax penalty, the estate tax burden, and tax discrimination
against saving. The response to the universal eligibility of Individual
Retirement Accounts (IRAs) has been far greater than was originally
expected. It is estimated that more than 15 million individuals now
use IRAs to save for their retirement. Last year, I proposed to
expand the opportunity for all married couples to use IRAs fully by
allowing them to contribute up to $2,000 each per year to an IRA even
if only one has wage income.
Further improvement and simplification of our tax system are
sorely needed. The burden of taxation depends not only on the
quantity of tax revenue that is collected but also on the quality of the
tax system. I have asked the Secretary of the Treasury to develop a
plan of action with specific recommendations to make our tax system
fairer, simpler, and less of a burden on our Nation's economy. By
broadening the tax base, personal tax rates could come down, not go
up. Our tax system would stimulate greater economic growth and
provide more revenue.
Government Spending

One of my principal goals when I came to Washington was to reverse the dramatic growth of Federal spending on domestic programs
and to shift more resources to our Nation's defense. Although many
doubted this could be done, both goals are being achieved. We must
do everything that we can to avoid waste in defense as in other areas
of government. But we must also be willing to pay the cost of providing the military capability to defend our country and to meet our responsibilities as the leading Nation of the free world. Outlays for defense had declined to only 5.2 percent of GNP in 1980, less than
one-fourth of total government outlays. By the current fiscal year, defense outlays have increased to 6.7 percent of GNP and 28 percent of
total outlays. Real defense outlays have grown 39 percent since 1980.
Our spending on defense, however, remains a far smaller percentage
of our national income than it was in 1960, when defense outlays
took 9.7 percent of GNP.
Real spending has been cut on a wide range of domestic programs
and activities. Many wasteful bureaucratic activities have been eliminated and the number of nondefense employees on the Federal payroll has been reduced by 71,000. We have examined every area of
Federal Government spending, and sought to eliminate unnecessary
and wasteful spending while protecting the benefits needed by the
poor and the aged. As a result, total nondefense spending now takes




a smaller share of our GNP than it did in 1980. Moreover, under
present law, nondefense spending will continue to take a declining
share of our GNP in the years ahead.
This reduction has been accomplished without any decrease in existing social security benefits or any change in the medicare benefits
for the elderly. Spending on all other nondefense activities and programs has actually declined over 12 percent in real terms since 1980.
Even with no further reductions in these activities and programs,
their share of GNP in 1986 will be nearly back to the level of 1965.
I am committed to continuing the search for ways to reduce government spending. The budget that I am submitting to the Congress
identifies significant savings in entitlement programs and reductions
in outlays for other programs that are excessive or that are not the
proper responsibility of the Federal Government. The Grace Commission has given us some 2500 ways to reduce wasteful spending
that could save billions of dollars in the years ahead.
Budget Deficits

I have long believed that our Nation's budget must be balanced. A
pattern of overspending by the Federal Government has produced a
deficit in 22 of the last 23 years. My most serious economic disappointment in 1983 was therefore the failure of the Congress to enact
the deficit reduction proposals that I submitted last January in my
budget for fiscal 1984. We would be much closer to a balanced
budget today if the Congress had enacted all of the spending cuts
that I have requested since assuming office, and if the long recession
and the sharp decline in inflation had not substantially reduced real
tax revenue. In last year's budget I proposed changes in outlays and
revenues that could put the deficit on a sharply declining path that,
by 1988, would have been less than 2 percent of GNP and on its way
to a balance of revenues and outlays.
The unwillingness of the Congress to accept the proposals that I
offered has made it clear to me that we must wait until after this
year's election to enact spending reductions coupled with tax simplification that will eventually eliminate our budget deficit. But we
cannot delay until 1985 to start reducing the deficits that are threatening to prevent a sustained and healthy recovery. I have therefore
called on the Democratic and Republican leaders in the Congress to
designate representatives to work with the Administration on the development of a "downpayment" deficit reduction program.
I believe that this bipartisan group could develop a package that
could be enacted this spring which would reduce the deficit by about
$100 billion over the next 3 fiscal years. The package could include a
number of the less contentious spending cuts that are pending before




the Congress plus additional outlay savings based on the proposals
of the Grace Commission. Additional revenue could be provided by
measures to close certain tax loopholes—measures that the Department of the Treasury has previously said are worthy of support.
These deficit reductions can increase the public's confidence in our
economic future and their faith in the ability of the political system to
deal satisfactorily with the deficit. The downpayment package can be
a first step toward full elimination of the remaining deficits. Even
with a 3-year $100 billion package, the deficits projected for fiscal
1986 and beyond are totally unacceptable to me. They would be a
serious threat to our Nation's economic health and a heavy burden to
future generations. I am committed to finding ways to reduce further
the growth of spending and to put the budget on a path that will
lead to a balance between outlays and receipts. In 1985 I will submit
a budget that can achieve this goal. But we must go further and make
basic structural reforms in the budgetary process—including the lineitem veto and the balanced budget amendment—that will keep
spending under control and prevent deficits in the future.
Looking Ahead

As I look ahead, I am very optimistic about the prospects for the
American enonomy. Substantial progress has been made in reforming the economic policies that will shape our economic future. If we
continue to develop and pursue sound policies, our Nation can
achieve a long period of strong economic growth with low inflation,
and the American people can enjoy unprecedented prosperity and
economic security.

February 2, 1984







THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS







LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,

Washington, D.C, January 31, 1984.
MR. PRESIDENT:

The Council of Economic Advisers herewith submits its 1984
Annual Report in accordance with the provisions of the Employment
Act of 1946 as amended by the Full Employment and Balanced
Growth Act of 1978.
Sincerely,




Martin Feldstein
CHAIRMAN

William A. Niskanen

William Poole

13




C O N T E N T S
CHAPTER 1. THE STRATEGY OF ECONOMIC POLICY

Economic Recovery
Monetary Policy
Government Spending
The Decline of Domestic Spending
The Change in Tax Structure
Reducing the Budget Deficit
Deficit Projection
Long-Term Consequences
Deficits and the Recovery
Budget Strategy
CHAPTER 2. THE UNITED STATES IN THE WORLD ECONOMY:
CHALLENGES OF RECOVERY

The U.S. Trade Deficit and the Dollar
Sources of the Trade Deficit
Sources of the Strong Dollar
The Capital Account Surplus
Measures to Reduce the Trade Deficit
Developments in Other Industrial Countries
Europe
Japan
Third World Debt Problem
The Nature of the Problem
Origins of the Problem
Will Debt/Export Ratios Improve?
Sharing the Burden
Easing the Debt-Service Burden
Conclusion
CHAPTER 3. INDUSTRIAL POLICY

22
23
26
28
32
35
35
37
38
40
42

42
43
50
55
57
62
62
64
71
71
73
76
78
83
85
87

Is the United States Deindustrializing?
Comparison with Other Nations
Problems of U.S. Manufacturing
Implications for U.S. Policy
Japanese Industrial Policy
The Instruments of Japanese Industrial Policy
Private Investment and Government Subsidies




Page
21

15

88
90
91
94
95
95
97

Page

Has Japanese Industrial Policy Been a Success?
European Industrial Policies
European Industrial Policy Tools
Lessons from Europe
Should the United States Have an Industrial Policy?
Coordinating Agencies and Tripartite Councils
Government Development Bank
Aid for Declining Industries
Conclusion
CHAPTER 4. FOOD AND AGRICULTURE

The Food and Agricultural Sector
Farm Income
Special Character of Farming
Five Decades of Change
Demand for Farm Products
The Broader Economic Environment
International Trading Environment
Macroeconomic Environment
Federal Policies Affecting Agriculture
Policies that Reduce Production Costs
Price and Income Support Policies
Policies that Augment Demand
Net Effects of Farm Programs
Guidelines for Future Farm Policy
CHAPTER 5. FINANCIAL MARKET DEREGULATION

Major Historical Forces Shaping Financial Regulation
Financial Instability
Credit Powers of Financial Institutions
The Forces of Competition
Ceilings on Interest Rates
Deregulation and Monetary Control
Geographical and Line-of-Business Restrictions on Depository Institutions
Geographical Market Regulation
Economic Issues in Geographical Market Deregulation
Line-of-Business Restrictions....,
Economic Issues in Line-of-Business Deregulation
Deposit Insurance Reform
The Impact of Deposit Insurance
Proposals for Reform
Summary
Reform of the Regulatory Structure
Conclusions




16

98
99
99
100
102
102
103
107
109
112

113
113
115
116
117
124
125
126
127
127
131
136
139
142
145

146
146
147
148
151
153
155
155
158
159
159
162
164
165
171
171
174

CHAPTER 6. REVIEW AND OUTLOOK

175

Review of the 1983 Economy
Personal Income and Consumption
Residential Investment
Business Fixed Investment
Inventory Investment
The Farm Economy
The International Sector
Government Purchases of Goods and Services
Employment, Unemployment, and Productivity
Prices, Wages, Compensation, and Profits
Financial Markets
The Outlook for 1984
The Outlook for 1985-89
Growth in Real GNP
Inflation
Interest Rates
The Full Employment and Balanced Growth Act of 1978...
Economic Goals
Investment Policy Report

175
179
181
182
183
183
185
186
186
189
192
195
196
198
199
200
201
201
202

APPENDIXES

A. Report to the President on the Activities of the Council
of Economic Advisers During 1983
B. Statistical Tables Relating to Income, Employment and
Production

205
213

List of Tables and Charts
Tables

1-1. Budget Outlays and Receipts as Percent of GNP, Fiscal
Years 1960, 1970, and 1980-89
1-2. Cyclical and Structural Components of the Deficit,
Fiscal Years 1980-89
2-1. U.S. Trade Balance by Country, 1980-83
2-2. Decreases in Expected Inflation Rates and Increases in
Real Interest Rates, 1980 to 1983.....
2-3. Distribution of GNP by Component, 1970-83
2-4. Debt/Export Ratios for Argentina, Brazil, and Mexico
Aggregated, 1974-83
3-1. Size and Share of the Manufacturing Sector, Selected
Years 1950-80
3-2. Shares of Value Added and Employment by Industry
Group, 1960, 1970, and 1980
3-3. Changes in Manufacturing Output and Employment in
Selected Industrial Countries, 1960-80




17

29
36
49
52
55
76
89
89
90

List of Tables and Charts—Continued
Tables

page

3-4. Net Exports in Selected High-Technology Industries,
1970 and 1980
4-1. Farm Income, 1980-83
4-2. Farm Input Use, 1910-80
4-3. World Net Imports and Exports of Grain, Selected Periods, 1934-83
4-4. Major Federal Farm Programs by Commodity, 1982
5-1. Number and Assets of Selected Financial Institutions as
of December 31, 1982
5-2. State Restrictions on Intrastate Branch Banking, Selected Years, 1929-83
6-1. Growth in Output and Employment Over First Year of
Business Cycle Recoveries
6-2. Contribution of GNP Components to Total GNP
Growth Over First Year of Business Cycle Recoveries.
6-3. Real Household Income, Consumption, Saving, and
Residential Investment, 1979-83
6-4. Labor Market Developments, 1979-83
6-5. Output, Productivity, Costs, and Prices in the Nonfarm
Business Sector, 1979-83
6-6. Price Changes, 1979-83
6-7. Changes in Wages and Compensation, 1979-83
6-8. Funds Raised in Credit Markets by the Nonfinancial
Sector of the Economy, 1979-83
6-9. Components of Ml and M2, 1979-83
6-10. Economic Outlook for 1984
6-11. Administration Economic Assumptions, 1984-89

91
114
118
123
140
149
156
176
177
180
188
189
189
192
193
194
197
197

Charts

1-1. Nondefense Non-Interest Spending Excluding OASDHI
2-1. Balances on Current Account, Trade, and Services as
Percent of GNP...
2-2. Nominal and Real Effective Exchange Rate of the U.S.
Dollar
2-3. Change in U.S. Bilateral Trade Balances from 1981 to
1983
2-4. Bilateral Exchange Rates
2-5. Interest Rates on the Yen
2-6. Sources and Uses of Foreign Exchange: Argentina,
Brazil, and Mexico Aggregated
3-1. Unemployment Rates by State in Fiscal Year 1983
4-1. Farm Productivity, Output, and Input
4-2. Agricultural Exports as Percent of Farm Cash Receipts ..




18

30
44
46
48
67
69
79
93
118
122

Charts

4-3.
5-1.
5-2.
5-3.
6-1.
6-2.
6-3.
6-4.
6-5.

Page

Real Wheat Prices
Savings Deposit Inflows versus the Interest Rate Gap
Bank Failures
Existing Regulation of Banks and Their Holding Companies, December 31, 1983
Real Business Inventories/Final Sales Ratio
Civilian Unemployment Rate
Change in the Consumer Price Index
Ml: Actual versus Target Range
Real Gross National Product Forecast and Trend -




19

134
152
163
172
184
187
190
196
200




CHAPTER 1

The Strategy of Economic Policy
THE ECONOMIC RECOVERY IN 1983 was a very favorable combination of rising output, falling unemployment, and declining inflation. These economic improvements and the long-term economic
strategy that the Reagan Administration has been pursuing since
1981 are a welcome change for the American economy.
The Administration's redirection of economic policy was a necessary antidote to the poor economic performance of the 1970s. The
real earnings per week of the average employee were actually lower
in 1980 than they had been a decade earlier. The unemployment rate
doubled between the end of the 1960s and the start of the 1980s.
The level of consumer prices more than doubled and the rate of inflation increased from 5.5 percent in 1970 to 12.4 percent in 1980.
Net private capital investment declined from 7.1 percent of gross national product (GNP) in the 1960s to 6.4 percent of GNP in the
1970s and only 4.1 percent of GNP in 1980.
During these same years, the government expanded and tax burdens rose. Federal Government outlays for all nondefense programs
rose from 10.3 percent of GNP in 1970 to 15.1 percent in 1980.
Total Federal outlays rose from 20.2 percent of GNP to 22.4 percent
of GNP despite the sharp fall in the GNP share devoted to defense.
Although Federal tax receipts took one-fifth of GNP in both 1970
and 1980, many taxpayers found themselves pushed by inflation into
higher marginal tax brackets despite the absence of any rise in real
income. A two-earner family earning twice the median income faced
a marginal tax rate that was 26 percent in 1970 but 43 percent in
1980. The number of taxpayers facing marginal tax rates of 50 percent or higher rose more than five-fold during the decade. Inflation
not only pushed people into higher tax brackets, but also distorted
the measurement of interest income and capital gains, causing dramatic increases in the effective tax rates on real income from savings.
Nevertheless, the Federal budget moved from a position of near
balance in 1970 (a deficit of only 0.3 percent of GNP) to a deficit of
2.3 percent of GNP in 1980.
By 1980 there was widespread agreement that the direction of economic policy had to be changed if economic performance was to im-




21

prove. The accelerating growth of the money stock would have to be
slowed in order to bring down inflation. The high marginal tax rates
would have to be reduced and the tax structure reformed in order to
lower the adverse effects on the incentives to work, save, invest, and
take risks. The share of government domestic spending in GNP
would have to be reduced in order to decrease the distorting effects
of government programs, raise defense outlays, and reduce the
budget deficit.
These aims guided the formation of the Administration's economic
policy in 1981 and in the years since then. Now, 3 years later, monetary policy has been successful in reducing the rate of inflation. Government spending on domestic programs has been reduced to a
smaller share of national income. Tax rates have been lowered and
the tax system has been improved.
This chapter begins with a brief review of the economic recovery
of 1983; a more complete analysis is presented in Chapter 6. Here
the primary focus is on the strategy of economic policy. Three elements of the Administration's long-term economic strategy will be
discussed: sound monetary policy, reduced government spending on
domestic programs, and a tax structure that is conducive to individual initiative and economic growth. The fourth facet of the Administration's economic strategy, the reduction in regulation, was discussed in detail in the 1983 Economic Report; the deregulation of financial markets is the subject of Chapter 5 of this year's Report The
final section of the present chapter describes the medium-term problem of reducing the projected budget deficits.
ECONOMIC RECOVERY
The inherent vitality of the American economy was amply demonstrated in 1983. In this first full year of economic recovery, real GNP
rose 6.1 percent and business output climbed 7.0 percent. Industrial
production rose 16.3 percent in the 13 months following its November 1982 low, and the capacity utilization rate in manufacturing
bounced back from 68.8 percent to 79.4 percent during this same
period.
Civilian employment rose by 4.0 million in 1983 and the civilian
unemployment rate declined from 10.7 percent in December 1982 to
8.2 percent a year later. Although unemployment remains unacceptably high, the progress in raising employment and reducing unemployment in virtually every demographic group has been gratifying.
Civilian employment rose 4.0 percent between December 1982 and
December 1983, while employment among blacks rose 5.0 percent
and among teenagers rose 1.7 percent. The unemployment rate de-




22

dined 2.5 percentage points, while the unemployment rate for blacks
declined 3.1 percentage points and for teenagers declined 4.2 percentage points. Despite this progress, it is clear that more than cyclical recovery will be needed to reduce the very high unemployment
rates among these problem groups. The Administration's employment and training policies and proposals (discussed in detail in
Chapter 2 of the 1983 Economic Report) offer several ways of helping
these individuals and others with temporary unemployment problems
to find work.
The sharp increases in output and employment were accompanied
by an inflation rate that was even lower than in the previous year.
The GNP implicit price deflator rose only 4.1 percent in 1983 after
rising 4.4 percent in 1982 and more than 8.7 percent in 1981. The
consumer price index at the end of 1983 stood only 3.8 percent
above the level of a year earlier, after rising 3.9 percent in 1982, 8.9
percent in 1981, and more than 12 percent in 1980. And the index of
producer prices for finished goods rose only 0.6 percent in 1983, the
smallest increase in nearly two decades and far below the 3.7 percent
in 1982, 7.1 percent in 1981, and 11.8 percent in 1980.
The decline in price inflation accompanied smaller nominal wage
increases and a slower rise in nominal compensation per hour. The
5.6 percent increase in compensation per hour was the slowest rise
since 1967. In combination with the substantial cyclical improvement
in productivity, the slow rise in compensation raised unit labor costs
only 2.4 percent in 1983, far below the 7.9 percent rise in 1982 and
the lowest since 1965.
Despite the slow rise in nominal compensation per hour, the low
rate of inflation meant that real earnings and incomes increased significantly. Real average weekly earnings rose 2.5 percent in the 12
months to December 1983, after rising 0.5 percent in 1982 and declining in each of the 4 preceding years. Real personal income per
capita rose 3.0 percent between the final quarter of 1982 and the
final quarter of 1983 after rising a total of only 1.4 percent in the
entire 3-year period between 1979 and 1982.
A significant problem in the otherwise outstanding recovery was
the sharp decline in net exports. American imports rose while our exports of goods to the rest of the world declined. The U.S. merchandise trade deficit—the excess of imports of goods over our exports of
goods—reached a record of about $65 billion in 1983, nearly twice
1982's record level of $36 billion. This trade deficit, and the even
larger trade deficit projected for 1984, reflects several causes, including the decline of imports among less developed countries and the
relatively advanced stage of the U.S. recovery, but of primary importance is the high real value of the dollar relative to other currencies.




23

(For discussion of the trade deficit and the high dollar, see Chapter
2).
MONETARY POLICY
The fundamental guiding principle of the Administration's approach to monetary policy is that the rate of growth of the money
stock should be reduced gradually until the rate is consistent with
price stability. This principle is consistent with the general approach
enunciated in recent years by the independent Federal Reserve.
Controlling the growth of the money stock may be viewed as a
means of achieving a desirable path of nominal GNP. Because the
growth of nominal GNP tends to follow the growth of the money
stock, this strategy of monetary policy can be expected to be consistent with a gradual decline in the trend rate of growth of nominal
GNP, although the mix of real growth and inflation is subject to
other influences. In the remaining years of this decade, this decline
in the rate of growth of nominal GNP should be compatible with
both a continuing growth of real GNP and a continuing decline in
the rate of inflation.
Last year's Economic Report discussed the difficulty of applying the
principle of steady monetary deceleration in a time of rapid institutional change. An appropriate monetary policy must balance the principle of steady monetary deceleration with the need to take account
of changes in asset preferences or institutional arrangements that
cause sustained shifts in the velocity of money, i.e., sustained shifts in
the ratio of nominal GNP to the money stock. There are, however,
many uncertainties about the timing, magnitude, and direction of the
effects of such financial changes on velocity.
The year 1983 was a time of significant change in financial regulations that substantially altered the nature of the monetary aggregates
(Ml, M2, and M3) and the pattern of portfolio demand for monetary
assets. In December 1982 depository institutions were permitted to
offer money market deposit accounts, a form of small-denomination
time deposit with no limit on the permitted interest rate. These deposits are classified as a part of M2. Beginning in January 1983,
Super-NOW accounts—checkable deposits with no ceiling on the interest rate—were permitted. These accounts are classified as part of
Ml.
The desirability of stable money growth rests on the stability of the
demand for money relative to the stability of other relationships in
the economy, and on the role of stable money growth in reducing
inflationary expectations. A change in the available mix of financial
assets or in the characteristics of the monetary aggregates may




24

change the equilibrium ratios of nominal GNP to the monetary aggregates. The Federal Reserve can in principle adjust the supply of
money to compensate for the shift in demand without altering the
degree of liquidity in the economy or, equivalently, the likely growth
of nominal GNP; however, because of the uncertainties mentioned
above in practice it is often difficult to do so. As an example of these
uncertainties, it is not clear at this time the extent to which the
increases in the monetary aggregates in the early part of 1983 reflected
demand shifts that will produce a sustained shift in the velocity of
money.
In 1983 especially, there was no way to know by exactly how much
the financial deregulation changed the demand for each of the monetary aggregates. The Federal Reserve appears to have followed a relatively passive strategy during the early months of the year, not putting pressure on bank reserves. This policy had the effect of not putting much pressure on interest rates. Between December 1982 and
May 1983, the monthly average of the 91-day Treasury bill rate
varied between 7.9 percent and 8.4 percent. After May, however, the
Federal Reserve permitted short-term interest rates to increase.
The Federal Reserve's approach to the very difficult task of adjusting the monetary policy to the new regulatory environment permitted
major adjustments to occur in 1983 with minimal disruption in the
financial markets. Some observers, however, are concerned that the
rapid expansion of the monetary aggregates in early 1983 may lead
to much higher inflation by the end of 1984. Some also fear that the
slow growth of Ml in the second half of 1983 may cause output
growth to decline sharply, or even turn negative, by the middle of
1984. All that can be said with certainty at this time is that monetary
policy has come through a very difficult year of substantial deregulation without destabilizing either real growth or inflation in 1983. It
may be noted also that on the basis of data currently available, all
three monetary aggregates ended the year 1983 inside the target
ranges that the Federal Reserve had established in February for M2
and M3 and in July for Ml.
All too often at this stage of an economic recovery, as growth
slows from the unsustainable pace of the recovery's first year, political pressures have built to try to reduce interest rates through raising
money growth. The Administration rejects calls to abandon a sound
monetary policy. Interest rates cannot prudently be lowered by creating more money. The Administration recognizes that if the Federal
Reserve were to try to maintain a strong recovery through excessive
expansion of money and credit the rate of inflation would inevitably
rise and undercut the prospect for sustained growth of employment
and output.




25

The Administration desires a steady growth of real GNP and a
gradually declining inflation rate. The monetary policy consistent
with this outcome is expected to be one of gradually declining rates
of growth of the monetary aggregates. Although no regulatory
changes comparable to those of 1982 and 1983 are expected, future
shifts in institutional arrangements could cause changes in velocity
that would require a recalibration of the money growth targets. It is
important that any such recalibration be made only in response to a
significant and persistent shift in velocity.
GOVERNMENT SPENDING
The second major aspect of the Administration's economic strategy
is to reduce the burden of government domestic spending. For the
first time in a half century, total appropriations for domestic programs began a sustained decline in real terms and total Federal
spending on all nondefense programs began to take a declining share
of the Nation's potential output.
In 1929, Federal Government spending was only 3 percent of
GNP. But the Great Depression ushered in a new era for American
Government. In the half century after 1930, government spending
exploded. By 1960 nondefense spending (excluding interest payments) by the Federal Government was 7.5 percent of GNP. Even
after adjusting for inflation, the Federal Government spent nearly
four times as much on nondefense programs in 1980 as it had spent
in 1960. Between 1930 and 1980 there was a dramatic increase in the
role of the government and of government outlays in American economic life.
Of course, not all government outlays represent government purchases of goods or services. By 1980, 56 percent of Federal Government expenditures were transfers to individuals or to State and local
governments. But transfers as well as direct purchases shift the use of
the economy's resources and require a sacrifice by present or future
taxpayers.
The speed at which many of the outlays grew was itself unintended
and unanticipated, reflecting the so-called "entitlement" character of
many of the programs introduced or modified in the 1960s or early
1970s. In such programs, the basic legislation does not appropriate a
fixed amount of money for a particular purpose, but establishes rules
that define who is eligible for benefits and the nature and amount of
the benefits for which each person is eligible. Funds must then be
made available for these benefits.
The medicare program is a good example of the unintended and
unanticipated growth in outlays. Medicare was introduced in 1966




26

and immediately experienced costs that were far greater than had
been generally anticipated. A decade ago, medicare outlays were less
than $10 billion; in the current fiscal year, they will exceed $50 billion. Medicare actuaries now project that by 1989 the cost of the program will exceed $100 billion, or more than 2 percent of GNP. The
dramatic growth of this program reflects greater utilization of health
care services than had been anticipated and a very much faster rise in
the cost of hospital care than had been forecast. For example, the
cost of a day of hospital care, relative to all consumer prices, rose 67
percent in the decade before medicare was introduced, but jumped
more than 100 percent in the decade after medicare began. This very
rapid rise in the real cost of a day of hospital care reflected primarily
the use of more personnel, equipment, and supplies for every patient. The increase in utilization and the rapid rise in cc :s were not
accidents of history but were in large part a direct response to the
medicare program itself.
The medicare example is paralleled in a wide variety of other programs in such disparate areas as housing, nutrition, and disability insurance. Other new programs were enacted and old programs expanded without a proper understanding of the future burdens that
they would impose on the economy. The members of the Congress
who enacted these programs and the analysts who advised them frequently underestimated substantially the future costs of the programs
that they were creating. They failed to anticipate that introducing
new programs or liberalizing old program rules would markedly
change economic behavior—that a higher level of retirement benefits
would significantly reduce the average age of retirement, that the introduction of medicare and medicaid would contribute to an explosive growth of hospital costs, and that the more generous provision
of disability benefits would be followed by a four-fold increase in the
number of persons collecting disability checks.
In addition to underestimating future program costs, many analysts
in the 1960s and early 1970s also overestimated the future growth of
economic resources with which to pay for them. The first half of the
1960s was a period of unusually rapid economic growth, with real
GNP rising at a 4.7 percent annual rate. In the mid-1960s, when the
Great Society programs were launched, and even in the late sixties
and early seventies, there was a comforting but mistaken assumption
that continued rapid growth would make it easy to finance an everincreasing level of government spending. Unfortunately, the real rate
of growth fell from the 4.7 percent experienced in the first half of
the 1960s to 2.8 percent in the years since then. If that earlier rate of
growth had continued, real GNP would now be nearly 40 percent




27

higher and, with current tax and expenditure rules, the Federal
budget would now be in substantial surplus.
If the public had foreseen the future costs of the expanded social
programs or the modest rate of economic growth during the past two
decades, the Congress might not have enacted all of those programs
and government would be smaller today. But once those programs
were started, it became extremely difficult to stop them or even to
reduce the level of benefits,
THE DECLINE OF DOMESTIC SPENDING

Between 1960 and the end of the 1970s, government outlays on
nondefense programs nearly doubled as a share of GNP. The government took a larger and larger share of the typical family's income and
used it to finance programs that came to be widely regarded as neither
generally useful nor directed at the truly needy. Many observers
concluded that many well-intentioned programs were actually often
exacerbating the very problems that they set out to solve and usually
creating adverse side effects of their own.
Since 1980 there has been a remarkable revolution in government
spending. Social security benefits now take a decreasing share of
GNP and all nondefense spending other than social security and
medicare has already declined significantly as a share of GNP. Table
1-1 presents Federal Government outlays and receipts as percentages
of GNP in fiscal years 1960, 1970, and 1980 through 1989. The
values for 1984 through 1989 reflect current services levels for all domestic programs, the Administration's 1984 budget proposal for defense, and the economic assumptions with respect to real growth and
interest rates used in the Administration's current budget calculations. (These economic assumptions are discussed in detail in Chapter 6.)
Spending on social security benefits (including disability benefits as
well as benefits for retirees and dependents) rose dramatically from
2.3 percent of GNP in 1960 to 5.3 percent in 1983. Although social
security benefits will continue to grow in the future because of the
increased number of retirees and rising benefit levels, the social security share of GNP has begun to decline and will shrink to 4.7 percent
of GNP over the next 5 years.
The reduced share of GNP spent on all nondefense programs
except social security and medicare (line 5 of Table 1-1) has been
even more dramatic. In 1980 government spending on these activities took 9.3 percent of GNP. In the 1984 fiscal year, that share is
down to 7.5 percent of GNP, a decline of one-fifth.
Between fiscal years 1980 and 1984 real government spending on
all nondefense activities except social security and medicare will have




28

TABLE 1-1.—Budget outlays and receipts as percent ofGNP, fiscal years 1960, 1970, and
1980-89
[Percent; fiscal years]
Estimates

Actual

Current services

Item
1960
Total outlays

Other

1983
1984

1985 1986 1987

Poti1989
1988

18.5

,

20.2

22.4

22.8

23.8

24.7

24.0

24.3

24.1

23.8

23.4

23.0

9.7

National defense
Net interest

1970 1980 1981 1982

8.4

5.2

5.5

6.1

6.5

6.7

7.3

7.6

7.7

7.7

7.8

7.6

1.4

1.5

2.0

2.4

2.8

2.8

3.0

3.0

3.0

3.0

2.8

2.6

2.4

22.1

7.5

10.3

15.1

15.0

15.0

15.4

14.3

14.0

13.4

13.1

12.9

12.6

12.1

Non-OASDHI

5.1

6.5

9.3

8.8

8.4

8.4

7.5

7.2

6.7

6.4

6.2

5.8

5.5

OASDHI

2.3

3.8

5.8

6.2

6.6

6.9

6.8

6.7

6.7

6.7

6.7

6.7

6.6

Social security

2.3

3.1

4.6

4.8

5.1

5.3

5.0

4.9

4.8

4.8

4.7

4.7

4.6

Medicare

0

.6

1.2

1.4

1.5

1.6

1.7

1.8

1.9

1.9

2.0

2.1

1.9

19.9

20.1

20.8

20.2

18.6

18.7

19.0

19.0

19.0

19.3

19.4

19.8

Total receipts
OASDHI
Other
Deficit

18.6

2.1

3.9

5.3

5.6

5.8

5.7

5.9

6.1

6.1

6.2

6.5

6.6

6.7

16.4

16.0

14.8

15.2

14.4

12.9

12.9

12.9

12.9

12.9

12.9

12.8

13.1

2.3

2.0

3.6

6.1

5.3

5.3

5.1

4.8

4.1

3.6

2.3

-.1

Sources: "Budget of the United States Government, Fiscal Year 1985" and Council of Economic Advisers.

fallen by 12.5 percent. This real 4-year decline, which includes outlays for everything from entitlement programs to the administrative
costs of running government departments, is absolutely unprecedented. During each of the five 4-year periods between 1960 and 1980,
this spending rose between 11 percent and 38 percent even after adjusting for inflation
The changes that have been enacted since 1980 mean that the
share of GNP spent on all nondefense activities except social security
and medicare will continue to decline in the future even if the Congress adopts no further spending cuts. By fiscal 1986 this domestic
spending share will be down to 6.7 percent of GNP and therefore
back to the same GNP share that such nondefense spending took in
the late 1960s. This decline as a percent of GNP means that total
spending on these nondefense government activities will average $84
billion less a year in the 3 fiscal years from 1984 through 1986 than
it would have if the 9.3 percent GNP share of 1980 had continued.
Although future spending could of course be increased by legislative
action, it is significant that the Congressional Budget Resolution for
1984 through 1986 also called for essentially this same declining
share of GNP.
Moreover, under current law this spending share will continue to
decline to only 6.2 percent of GNP by 1988, back to the level of the
early 1960s. And this lower level of outlays means savings that aver-




29

age $157 billion a year from 1987 through 1989 relative to what would
have been spent if the 1980 share of GNP had been maintained.
Chart 1-1 shows the share of potential GNP that nondefense
spending excluding social security and medicare would represent at
full employment. The growth in the 1960s and 1970s of these outlays
will have been almost completely reversed by 1989.
Chart 1-1

Nondefense Non-Interest Spending
Excluding OASDHI
Percent of potential GNP

8

-

7

-

6

-

5

-

I

1960

I
62

I I I I I I I I I I I I I I I I i I I I I I I I I
64

66

68

70

72

74

76

78

80

82

84

86

88

Fiscal Ye^rs
Sources: Office of Management and Budget and Council of Economic Advisers.

These projected spending reductions relative to the 1980 GNP
share reflect the current rules of entitlement programs and the assumption that the Congress will continue to appropriate funds to
maintain the current level of service for all programs governed by
annual appropriations. The President's 1985 budget proposes additional reductions in nondefense spending in each year from 1985
through 1989. These spending reductions total an additional $74 billion.




30

Total nondefense government spending as a share of GNP, including social security and medicare as well as all other domestic programs, is now falling and will, on the basis of current law and the
current services levels of annually appropriated programs, decline
from 15.1 percent of GNP in 1980 to 12.6 percent of GNP in 1989.
This decline represents an annual saving of more than $138 billion a
year in 1989.
One implication of the very substantial reduction in nondefense
spending is that it permits an increase in defense spending without
an equal increase in tax revenue. The Administration's budget calls
for a rise in defense spending from 5.2 percent of GNP in 1980 to
7.6 percent of GNP in 1989. For comparison, defense spending was
8.4 percent of GNP in 1970 and 9.7 percent of GNP in 1960.
Unfortunately, the rapid rise in interest on the national debt will
absorb a substantial share of the budget savings achieved by reduced
domestic spending. The net interest paid by the government will increase from 2.0 percent of GNP in 1980 to 2.6 percent in 1989, even
if the rate of interest on Treasury bills declines from the current level
of nearly 9 percent to less than 6 percent by the end of 1989.
Putting these pieces together shows that nondefense spending excluding social security and medicare will decline by 3.5 percent of
GNP between 1980 and 1989 while defense spending will rise by 2.6
percent of GNP and the net interest paid by the government will rise
by 0.6 percent of GNP. The reduction in domestic outlays financed
by general revenues is thus slightly more than sufficient to balance
the increase in defense spending and interest costs, leaving total outlays excluding social security and medicare virtually unchanged as a
share of GNP.
Despite the dramatic progress in reducing spending on domestic
programs, government outlays are still projected to equal 23 percent
of GNP in 1989, about 3 percentage points higher than in 1970 and
5 percentage points higher than in 1960. This increase in outlays
does not reflect greater defense spending, because the GNP shares
devoted to defense would actually be lower in 1989 than in either
1970 or 1960. The rapid growth of social security and medicare outlays (from 2.3 percent of GNP in 1960 to 3.8 percent of GNP in 1970
and 6.7 percent of GNP in 1989) accounts for nearly all of the increases in outlays as a fraction of GNP since 1960 and 1970. The additional source of increased outlays, the rise in interest payments on
the national debt, will be more than offset by the fall in defense
spending as a share of GNP between 1960 and 1989.
These are the fundamental facts that define the budget dilemma.
Despite the remarkable reduction in domestic spending on a wide
range of activities, the growth of the social security and medicare




31

programs raises the share of Federal Government outlays in national
income. With the budget balanced in 1960 and with taxes taking the
same share of GNP in 1984 as in 1960, the growth of spending since
then implies large budget deficits. Before discussing the problem of
the budget deficit, this chapter considers the changes in the nature of
the tax system that have occurred in the past 3 years.
THE CHANGE IN TAX STRUCTURE
The third principal part of the Administration's economic strategy
is to reduce the tax burden and restructure the tax system. The Economic Recovery Tax Act passed in 1981 substantially changed the
quantity and quality of taxation. It reduced personal income tax rates
by a cumulative 23 percent over 3 years. Special provisions reduced
the tax on two-earner families, introduced the indexing of tax bracket
and personal exemptions, and lowered the effective tax rates on
income from saving and investment. The total Federal taxes paid by
a median-income family, including both the personal income tax and
the social security payroll taxes, will be $1,750 lower in 1984 than
they would have been without the tax cuts. These changes represent
a reduction of 36 percent in Federal income tax liabilities and of 26
percent in total tax liabilities.
The total share of GNP taken by taxes has come down significantly
(see Table 1-1, line 9). In fiscal 1980, all Federal taxes took 20.1
percent of GNP. In the current fiscal year, this tax share will be 18.7
percent of GNP. Continuing economic recovery and the rise in social
security payroll taxes will raise the tax share of GNP to 19.4 percent
by 1989, if there are no further legislative changes. Without the 1981
changes, the tax share would have risen substantially from the 20.1
percent share of 1980.
These tax reductions occurred despite the rise in the social security
payroll tax. If the social security payroll tax is excluded, the reduction in all other taxes has been even greater, falling from 14.8 percent of GNP to 12.9 percent of GNP. This fall is equivalent to a $68
billion tax cut in 1984 alone.
The tax changes in the past 3 years have, however, gone far
beyond reducing the amount of taxes and have achieved fundamental
improvements in the nature of the tax system. The tax burden on the
economy depends not only on the quantity of taxes but also on the
quality. Although most taxes have adverse economic effects, some
taxes are more harmful than others. Taxes are undesirable not only
because they take away the fruits of labor, of risk-taking, and of
saving, but also because they distort economic decisions and thereby
lead to a wasteful misallocation of resources. Although there is no




32

simple rule for improving the quality of taxes, there are a few useful
principles. The most basic principle is to minimize the tax-induced
distortions of economic choices—choices about which goods to buy,
how much to work, how hard to save, and how to invest the capital
that results from savings. A key implication of this principle is that
the marginal tax rates paid on additional income or profits are more
important than the average tax rates. A second implication is that
taxes do more harm when levied on individuals or activities that are
more responsive to tax rules. Taxes that reduce the incentive to save
or that cause a misallocation of capital among different uses are particularly undesirable, because they unnecessarily increase the total
economic burden of the tax system and reduce productivity and economic growth.
The 1981 tax changes improved the quality of the tax system in
several ways. The top marginal individual income tax rate was reduced from 70 percent to 50 percent and marginal tax rates at all
income levels were reduced nearly one-fourth. Moreover, the reduced tax rates for two-earner families focuses tax relief on married
women, a group whose labor supply is known to be particularly sensitive to tax rates.
In addition to reducing marginal tax rates, the Economic Recovery
Tax Act provided for the indexing of tax brackets, beginning January
1985, to prevent inflation from pushing individuals into brackets with
higher marginal tax rates. Without indexing, a decade of 5 percent
inflation would more than offset the 23 percent reduction in tax
rates.
Perhaps the most fundamental change has been in the taxation of
personal saving. The American tax system has long been biased
against saving and in favor of current consumption. The tax law
changes in the Economic Recovery Tax Act represent a major shift
away from this antisaving bias. The universal extension of eligibility
for Individual Retirement Accounts (IRAs), the expansion of IRA and
Keogh plan limits, the reduced tax rates on investment income,
and other specific changes should spur private saving in the years
ahead.
The favorable effect of these tax changes on saving can be expected to occur only gradually. At first, by transferring previously saved
funds from existing accounts, many individuals can deposit the maximum $2,000 a year to an IRA without doing any additional saving.
Some individuals may extend this period by borrowing. But, after a
few years, most taxpayers will have exhausted all previously accumulated funds; they can then make additional IRA contributions only if
they save more.




The new tax treatment of saving represents something far more
basic than just an increased stimulus to saving. The universal availability of IRAs and the increase in IRA and Keogh limits will allow
most American taxpayers to pay tax only on that part of their income
that they do not save—that is, only on the part of their income that
they consume. It is also true that two-thirds of taxpayers do not itemize deductions and therefore cannot deduct interest expenses. Thus,
for most Americans, the income tax system has now been virtually
transformed into a consumption tax. This is a very fundamental
change in the character of our tax system.
An indirect but important source of reduction in the effective tax
rate on the income from savings has been the fall in the rate of inflation. Because our tax law bases tax liability on nominal interest
income and nominal capital gains, a lower rate of inflation implies a
substantial reduction in the effective rate of tax. An individual in the
30 percent tax bracket who earns a 15 percent nominal interest rate
when the inflation rate was 10 percent had an after-tax nominal yield
of 10.5 percent and an after-tax real yield of only 0.5 percent. By contrast, if the individual earns a nominal 10 percent interest rate when
the inflation rate is 5 percent, the nominal after-tax yield is 7 percent
and the real after-tax yield is 2 percent. The effective tax rate on the
same real interest income falls from 90 percent when inflation is 10
percent to 60 percent when inflation is 5 percent. With no inflation
and an interest rate of 5 percent, the effective tax rate would fall to
30 percent and the real after-tax rate of return would be 3.5 percent,
or 7 times as great as it was with a 10 percent inflation rate.
The tax climate for business investment has also been substantially
improved in the past 3 years. During the 1970s the rising rate of inflation combined with the old depreciation rules to raise very substantially the effective rate of tax on the income from investment in
business plant and equipment. The 1981 changes in the tax rules
governing depreciation, as modified in the Tax Equity and Fiscal Responsibility Act, and the sharp decline in inflation reduced this effective tax rate substantially. The result is higher after-tax rates of
return on business investment, and therefore a renewed incentive to
invest in plant and equipment.
The present strength of business investment in the face of very
high real rates of interest can be attributed at least in part to the
lower effective tax rates on business income and the higher real
after-tax rates of return that result. What matters for investment is
not just the rate of interest or the profitability of investment, but the
difference between the net-of-tax real cost of funds and the after-tax
real profitability of investment.




34

Similarly, the strength of the stock market in the face of very high
real interest rates reflects in part the improved after-tax profitability
that investors now expect. Indeed, one way to explain the current
level of investment is to note that the change in business tax rules
has raised the value in equity markets of new physical capital (or,
equivalently, reduced the cost of equity capital to finance new investment). This has stimulated business to increase its investment.
The recent reductions in high marginal tax rates and the improved
tax treatment of saving and investment represent major improvements over earlier tax rules. Much more can and should be done,
however, to reduce the adverse effects of the tax system on individual
and business incentives and therefore on the potential income and
growth of the economy. The President has emphasized his interest in
further improvements of the tax law. The Administration will continue to examine possible directions for tax reform and will propose reforms aimed at making the tax system simpler, fairer, and more efficient.
REDUCING THE BUDGET DEFICIT
Despite the dramatic reduction in the share of national income
taken by government domestic spending and the fundamental improvement in the character of our tax system, the Nation still faces
the serious potential problem of a long string of huge budget deficits. Vigorous economic growth can eliminate the cyclical component
of the deficit. But without legislative action, the structural component
is likely to grow just as fast as the cyclical one shrinks. The Administration's economic projections imply that the budget deficit will
remain roughly $200 billion a year—or about 5 percent of GNP—for
the rest of the decade unless there is legislative action to reduce
spending or raise revenue. Deficits of that size would represent a serious potential threat to the health of the American economy in the
second half of this decade and in the more distant future.
DEFICIT PROJECTION

The cyclical component of the budget deficit is the part of the deficit that occurs because the unemployment rate exceeds the inflation
threshold level of unemployment, i.e., the minimum level of unemployment that can be sustained without raising the rate of inflation.
This excess unemployment raises the deficit by depressing tax revenues and by increasing outlays on unemployment benefits and other
cyclically sensitive programs.
The remaining part of the budget deficit, known as the structural
component, is the amount of the deficit that would remain even if




35

the unemployment rate were at the inflation threshold level. The Administration estimates that the inflation threshold level of unemployment is now 6.5 percent and will decline in the coming years as the
relative number of inexperienced workers declines and as the Administration's employment policies are enacted and take effect.
Table 1-2 presents the cyclical and structural components of the
budget deficit for 1980 through 1989. The 1983 deficit of $195 billion was divided about evenly between the cyclical and structural
components. Because of the lower level of unemployment projected
for 1984, a much larger share of the current year's deficit is structural. The projected deficit of $187 billion includes a cyclical component of $49 billion and a structural component of $138 billion. By
1989, the entire projected budget deficit is structural.
TABLE 1-2.—Cyclical and structural components of the deficit,fiscalyears 1980-89
[Billions of dollars]
Total

Fiscal year

Structural

Cyclical

Actual:
60

4

55

58

19

39

111

62

48

195

95

101

1980
1981

....

1982
1983

..

..

Estimates (current services):

187

49

138

208

44

163

1986

216

45

171

1987

220

34

187

203

16

187

193

—4

197

1984
1985

.

1988
1989

,

Sources: Budget of the United States Government Fiscal Year 1985 and Council of Economic Advisers.

A rate of economic growth for the next 5 years that is sufficiently
greater than the growth forecast by the Administration and by virtually all private forecasters could in principle eliminate the deficit
without legislative action. However, a 1 percent increase in the current level of real GNP would reduce the budget deficit by only about
$12 billion. It would require an increase of 40 percent in the projected growth rates over the next 6 years to eliminate the budget deficit
by the end of the decade without a change in spending or tax rules.
It would clearly be unwise to rely on such an unprecedented and improbably fast rate of growth. A prudent policy at this point must
assume that economic growth alone will not eliminate these deficits.
The economic assumptions that are used to project the budget
outlays and receipts are based on the premise that there will be a




36

sound monetary policy and that future legislative changes will reduce
budget deficits sharply in the years ahead. In the absence of legislative changes to reduce deficits substantially in future years, interest
rates will be higher than projected and the real growth rate will probably be lower than projected. The budget calculations assume that
real GNP grows at an average annual rate of 4.3 percent from 1983
to 1989. The calculations also assume that the Treasury bill rate will
fall from the current 8.9 percent to 5.0 percent by 1989. These assumptions are reasonable if the budget deficit in that year is about
1.5 percent of GNP and is moving toward complete balance. But if
legislative changes to reduce outlays and increase receipts are not enacted and the Treasury bill rate remains at its current level, the
higher interest payments on the national debt will raise the 1989
deficit by about $60 billion, bringing the total deficit in that year to
approximately $250 billion. Growth rates of real income slower than
those assumed in the budget calculations would raise the deficit even
more.
LONG-TERM CONSEQUENCES

The projected budget deficits would directly and substantially increase the future size of the national debt. If legislative action is not
taken, the cumulative budget deficit would be more than $1,100 billion over the next 6 years. The annual interest on this extra debt
alone would represent a permanent cost of about $60 billion in 1989,
if interest rates fall as assumed, or at least $100 billion a year if the
interest rates remain at their present level. These amounts are equivalent to between 10 percent and 17 percent of the personal and corporate income tax revenue now projected for 1989.
This growth of the national debt and the interest on the national
debt shows that budget deficits do not eliminate the need for spending cuts or tax increases, but just postpone the time when extra
spending cuts or larger tax increases must take effect to pay for current deficits.
The most important long-term economic effect of the prospective
budget deficits would be to absorb a large fraction of domestic
saving, and thereby reduce the rate of capital formation and slow the
potential long-term growth of the economy. Federal borrowing to finance a budget deficit of 5 percent of GNP would absorb about twothirds of all the net domestic saving that would otherwise be available to finance investment in plant and equipment and in housing.
The reduced availability of investable funds means that the real
rate of interest must rise until the demand for funds for private investment is reduced to the available supply. Stated more generally,
the real net-of-tax cost of capital must increase relative to the real




37

net-of-tax return on capital until the demand for funds is reduced to
the available supply.
Although the 1981 tax changes and the reduced rate of inflation
will direct a higher share of the remaining capital formation to business investment and away from owner-occupied housing, the effect of
the budget deficits nevertheless would be a lower rate of investment
in business plant and equipment as well as in housing.
Each dollar of additional budget deficit does not necessarily reduce
capital accumulation by a dollar. The actual impact varies over time,
with less crowding out of capital formation likely in the first year or
two after an increase in the budget deficit than in subsequent years.
This is particularly so when, as in recent years, the increase in the
budget deficit occurs when there is substantial excess capacity in the
economy.
The current situation also shows how the extent of the crowding
out of capital formation in the United States can be temporarily reduced by an inflow of foreign funds that are attracted to the United
States by the rise in our real interest rate and increased real after-tax
return on equity investments. This capital inflow usually begins after
a lag, rises to a peak, and eventually shrinks. Even if the budget deficit remains at a high level, the inflow of capital from abroad eventually contracts as foreigners become increasingly unwilling to hold
even more U.S. assets in their portfolios.
If the current services budget deficits that are currently projected
were actually to occur, the likely result would be to reduce net investment in plant and equipment to a substantially lower share of GNP
than prevailed in the 1960s and 1970s. Net private investment has
fallen from 6.7 percent of GNP in the three-decade period through
1979 to only 3.2 percent of GNP in the past 3 years. Much of this
decline is attributable to the stage of the business cycle. The 1983
deficit strengthened the recovery and thereby boosted business fixed
investment, although the government's competition for funds to finance the structural deficit also depressed the level of investment
below what it would otherwise have been.
DEFICITS AND THE RECOVERY

The deficits will have effects on the economic recovery as well as
on the capital stock and on long-term economic growth. To understand the effect of budget deficits on the economic recovery, it is important to distinguish the deficits in the early years of the recovery
from the deficits that are projected for subsequent years. Although
the projected future deficit would be likely to have serious adverse
consequences on the character and possibly the duration of the recovery, the near-term deficits probably have a positive impact on the




38

pace of recovery in 1983 and 1984. The tax cuts in 1982 and 1983
raised after-tax incomes and therefore contributed to the rise in consumer spending that has been responsible for so much of the recovery. Similarly, the direct fiscal stimulus of the large 1984 deficit will
do more to raise demand in 1984 than the increased real interest
rates that result from the 1984 deficit will do to depress demand.
It is the continuing string of large deficits projected out through
the end of the decade and beyond that is the serious threat to the
health of the near-term recovery. The prospect of such prolonged
deficits inevitably raises the real long-term interest rate above what it
otherwise would have been, reducing current activity in key interestsensitive sectors and causing the recovery to be lopsided. The most
conspicuous example of such current crowding out is the sharp decline in net exports. High interest rates in the United States attract
funds from the rest of the world, causing the exchange value of the
dollar to rise. The strong dollar makes it difficult for U.S. products
to compete in world markets and makes foreign products more attractive to American buyers. In addition, the high real interest rate is
no doubt also causing the demand for housing, for some consumer
durables, and for some plant and equipment investment to be lower
now than it would otherwise have been. In these ways, the anticipation of future deficits may weaken the pace of recovery now even
though the current deficit strengthens the pace of the current recovery.
If the deficits persist, the crowding out would also persist but the
pattern of crowding out would change over time. As the value of the
dollar declines, the merchandise trade deficit is likely to shrink, focusing more of the crowding out on the domestic capital market. The
current rise in profits and retained earnings that result from the cyclical upturn and from the 1981 tax changes temporarily protects
business investment and concentrates more of the domestic crowding
out on residential construction. This too will change with time, placing more of the burden of future crowding out on business investment in plant and equipment.
No one can be sure of exactly how the pattern of crowding out
would evolve through time. It is clear however that the persistence of
large structural budget deficits would contribute to producing a lopsided recovery. The recovery would not be shared fully by the export
industries and by those firms that compete with imports from abroad.
Nor would the construction industry and those industries that are directly involved in the production of capital goods and consumer durables be likely to keep pace with overall economic activity.
As a result, employment and economic activity would shift from
these contracting interest-sensitive sectors to the areas of expanding




39

demand in the services and nondurable goods industries and in the
defense-related industries. If this shift of demand proceeds smoothly
enough, the overall recovery would continue at a satisfactory pace
with declining total unemployment. It is quite possible, however, that
the additional demand would concentrate in sectors that are operating close to capacity while the crowding out withdraws demand from
industries where a great deal of excess capacity exists. If so, much of
the additional demand might be absorbed in price increases while the
crowding out adds to unemployment. If this occurs, the resulting recovery would be slower paced, more fragile, and more inflationary
than a more balanced recovery.
No one can predict in detail the effects of a continuing series of
such large deficits. The economy could continue to experience a satisfactory overall pace of recovery for several years with declining
rates of unemployment and inflation. But deficits of this magnitude
could lead instead to imbalances within the economy that cause the
recovery to lose momentum. There is also the risk that the persistent
deficits could lead to inappropriate economic policies in the future.
An overly expansionary monetary policy would cause increased inflation while a sudden large fiscal contraction could depress economic
activity. Although no one can be sure just how the economy would
behave in the face of such unprecedented deficits, the longer the
deficits are allowed to persist, the greater are the risks to our economic future.
BUDGET STRATEGY

A major reduction in the structural budget deficit must therefore
be achieved over the next several years. This must be done without
causing a contraction of economic activity. Because the direct effect
of reducing the budget deficit is to reduce government spending and
private consumption, there must be an increase in investment and
net exports if real incomes and economic activity are to remain at
high levels.
A reduction in the level of the current or future budget deficits
automatically stimulates investment and net exports by lowering the
real rate of interest and the exchange value of the dollar. However,
experience shows that the rise in investment and in exports follows
the fall in interest rates and the exchange rate only with a substantial
lag.
It would be unwise, therefore, to reduce the 1984 deficit by a very
substantial amount. To reduce the deficit by a significant amount
without jeopardizing the recovery, the financial markets should be
given adequate advance notice of the intended deficit reduction. The




40

result would be a stronger economy that could absorb the deficit reduction without a contraction of overall economic activity.
In the fiscal year 1984 budget that was presented to the Congress
in January 1983, the Administration proposed a deficit reduction program that would begin with small reductions in the deficits of 1984
and 1985 but then would reduce the 1986 deficit by 41 percent and
cut the 1988 deficit by 61 percent to only 1.6 percent of GNP. Unfortunately, the Congress failed to adopt those proposals.
The Administration is now taking a two-stage approach to dealing
with the prospective budget deficits. The President has called upon
the leaders of the Congress to establish a bipartisan group to work
with the Administration to develop a "down payment" package that
will reduce the deficit by about $100 billion over the next 3 fiscal
years. The aim of these negotiations is to achieve a deficit reduction
package in the next few months. This package would be comprised of
some of the less contentious spending cuts still pending before the
Congress, certain measures to close tax loopholes, and additional
outlay savings achieved through improvements in management procedures and elimination of unnecessary or inefficient activities.
Such legislation to reduce the deficit by about $100 billion during
the next 3 fiscal years would make a significant contribution to reducing deficits and the future national debt. It could also give increased confidence to the financial markets, business investors, and
consumers that the projected deficits can be controlled and eventually eliminated. The result should be a stronger economy in 1984 and
1985.
Enacting a "down payment'* package is just a first step in reducing
budget deficits. The President has indicated that he will propose legislation in early 1985 that will further reduce deficits and point the
way toward budget balance. If these proposals are enacted, the economy can enjoy continuing expansion and a reduced burden of national debt.




41

CHAPTER 2

The United States in the World
Economy: Challenges of Recovery
THE INTERNATIONAL ECONOMY is in a much stronger position today than it was one year ago. In late 1982 the world was still
in a severe recession, and prospects for recovery were uncertain; the
third world debt crisis was a source of deep concern; and economic
stagnation had given rise to strong protectionist pressures. In 1983 a
vigorous recovery, originating in the United States, began to lead the
world out of recession. Many of the high-debt countries made major
strides toward successful adjustment. Despite increasing protectionist
pressures, the open international trading system remained fundamentally intact.
But the outlook is not entirely sunny. The recovery is not a cure-all
for the serious strains that remain in the world economy." From the
U.S. point of view, the focus of these strains is the emergence of
record trade deficits. Closely related to the problem of the trade deficits is the problem of the continued high value of the dollar in foreign exchange markets. There are also other economic troubles
around the globe. Trade relations among the United States, Japan,
and the European Community remain a source of friction. Much of
Europe is lagging behind the recovery in North America. The highdebt countries are finding the road back to financial health to be
slow and painful.
This chapter takes the U.S. trade balance as a starting point for an
examination of the challenges that still face the world economy. It is
organized in three sections. The first section examines the rise in the
trade deficit and the related problem of the strong dollar. The
second section covers developments among industrialized trading
partners: Japan, Canada, and the European countries. The third section explores the third world debt problem.
THE U.S. TRADE DEFICIT AND THE DOLLAR
The most dramatic recent development in U.S. international economic relations is the rising trade deficit and associated capital
inflow. The 1983 deficit in merchandise trade was about $65 billion,




42

approaching twice the previous record, which was set in 1982. A deficit in the neighborhood of $110 billion is forecast for 1984, three
times the 1982 level. The deficits signify loss of income and employment in those U.S. industries that depend on exports or compete
with imports. A common reaction is one of concern. It is easy to
draw the impression that there is a serious adverse long-run trend in
the competitive standing of the United States in the world economy.
The greatest danger is that such ideas will come to be believed, and
that as a result, the Nation will opt for major departures from its traditional economic system.
Understanding the source of the rising trade deficit is an essential
precondition to making intelligent policy choices. If policy is charted
in an atmosphere of panic, then crucial mistakes will be made. Mistakes in trade policy, once committed, cannot be easily undone. Foreign trading partners often react to protectionist measures in kind,
while, domestically, powerful interest groups coalesce around the
new status quo.
SOURCES OF THE TRADE DEFICIT

Although the 1983 and likely 1984 trade deficits are without precedent, they are not difficult to explain. To begin with, the United
States has a normal or "structural" deficit in merchandise trade that
is offset by a surplus in exports of services and therefore need not be
a cause for special concern. But it is the recent increase in the trade
deficit that has attracted attention. The increase can be broken down
into three parts. First, the appreciation of the dollar has made it difficult for U.S. firms to compete in world markets. Second, there has
been a substantial loss in net exports to debt-troubled countries.
Third, the United States is experiencing more rapid growth in
income, and therefore, in imports, than are Europe and Japan. These
three factors concern economic perturbations that, though large, are
believed to be temporary. The structural deficit is normal in that it
would exist even in the absence of the temporary factors.
The Structural Trade Deficit

In the 1970s, the United States ran a merchandise trade deficit that
was on average equal to 0.5 percent of gross national product (GNP),
with a gradual increasing trend, as Chart 2-1 illustrates. This deficit
in merchandise does not imply a failure of the Nation to pay its way
in international trade. The United States normally runs a surplus in
services to offset the deficit in merchandise trade. The largest component of the surplus is the earnings on overseas investments that
American residents have made in the past; these earnings are counted as services because they are payments for the use of U.S. capital.
But such exports as the services of lawyers, engineers, and computer




43

programmers, and banks, insurance companies, hospitals, and universities are also an important and growing component of the U.S. balance of payments. The balance in services trade has a gradual
upward trend, as Chart 2-1 shows.
Chart 2-1

Balances on Current Account, Trade,
and Services as Percent of GNP
Percent of GNP
8-Quarter Moving Average

-1

-2

1970

71

I i i i I i i i I i i i I i i i I i i i I i i i I i

h i i l

I i I l I I I l1
72

73

74

75

76

77

78

79

80

81

82

Note.—-Based on seasonally adjusted data.
Source: Department of Commerce.

Indeed, it is possible that, because of measurement errors, the true
U.S. surplus in services is greater than that recorded. Statistics show
that the sum of the services balance of all countries is a large negative number, on the order of —$80 billion. Because one country's exports are another country's imports, this number should in theory be
zero. It must necessarily be that some countries are underreporting
their services balance. For example, fleets of open registry (i.e., flying
"flags of convenience") often do not report their earnings to any
country. Another example is investment income that is channeled
through tax havens and is thus unrecorded in the recipient country.
Given the importance of the United States in services trade, it is possible that part of the unreported service exports are American.




44

Adding together the balances in merchandise trade, services, and
transfers (such as immigrants' remittances to their countries of
origin) gives the balance on current account. A country's current account balance indicates its changing investment position vis-a-vis its
trading partners. A current account deficit means that foreigners are
on net accumulating claims on assets located in the domestic country.
Countries with profitable investment opportunities, such as South
Korea, Taiwan, Singapore, and other rapidly industrializing countries, are normally in this situation, borrowing savings from abroad to
finance their development. A current account surplus means that the
domestic country is on net accumulating claims on assets located
abroad. Capital-rich countries with high saving rates, such as Japan
and West Germany, are normally in this situation, lending their savings to other countries where they can earn a higher rate of return.
There is no clear argument as to whether the United States should
normally be a net borrower or net lender at this stage in its history.
The United States has been a capital-rich country throughout the
20th century, and before the 1970s the current account was normally
in surplus. But the U.S. saving rate now appears to be the lowest
among major countries. As it happens, the U.S. current account balance, as shown in Chart 2-1, was on average virtually zero during the
1970s.
The point is that a certain amount of the U.S. merchandise trade
deficit is normal: it would be there, offsetting the surplus in services,
even if the U.S. current account balance were zero. Judging from the
long-run trends in the merchandise trade deficit and the services surplus, this structural trade deficit now appears to be in the range of
$20 to $25 billion. Most of the recent trade deficit is thus still to be
explained.
Effect of the Strong Dollar

The high value of the dollar in foreign exchange markets is the
most important cause of the recent increases in the trade deficit. As
Chart 2-2 shows, the dollar has appreciated sharply over the past 3
years. As of December 1983, the dollar had risen 52 percent against
an average of 10 trading partners' currencies weighted by their
shares in world trade, relative to the average for 1980. (Weighting
countries by trade with the United States alone, which gives relatively
less weight to Europe and relatively more to Canada and Japan,
yields a smaller number.) Exchange rate trends sometimes match international differences in inflation rates, but that has not been the
case in this episode. Very little of the appreciation of the dollar was
offset by a more rapid increase in the foreign price level than in the
U.S. price level. In other words the dollar appreciated not only in
nominal terms, but in real terms as well. The real appreciation of the




45

dollar between 1980 and December 1983 came to 45 percent. This
means that U.S. firms are now offering their products on world markets at prices that on average have risen significantly relative to those
of their competitors, when compared in a common currency.
Chart 2-2

Nominal and Real Effective
Exchange Rate of the U.S. Dollar
March 1973-100
140

130 -

120 —

Q llHiiliiiiiliiiiiliiiiiliiuiliniiliiiiiliiiiihniiliuiiliiiiiliMiiliiNilnMilMMihiiiiliiiiilniiiliiiiiliii liiiiihiiin

1973

1974 1975 1976 1977 1978 1979 1980 1981 1982

1983

Source: Board of Governors of the Federal Reserve System.

The year 1980 does not constitute a proper standard of comparison because the dollar had depreciated in real terms in the late
1970s: in 1980 U.S. firms were offering their products on world markets at prices that on average had fallen relative to those of their
competitors, when compared in a common currency. If one takes the
average over the period 1973-79 as the standard of comparison, then
the real appreciation of the dollar as of December 1983 comes to 33
percent.
This real appreciation represents a large loss in competitiveness of
U.S. producers. In response, foreign residents are more likely to buy
their own country's products than to buy the more expensive U.S.
exports, and U.S. residents and companies are more likely to buy
cheaper imports than to spend their money on products made at
home.




46

The effect on the trade balance is complicated by questions of
timing. Although the dollar's rise began in 1980, it was not until
1981 that the negative effect on the trade balance began to show up.
It was not until late 1982 that the balance on goods and services
turned to deficit. This pattern is in line with historical experience.
The immediate effect of a dollar appreciation is actually to improve
the trade balance, because it takes fewer dollars to buy a given quantity of imports. As time passes, more and more customers, both domestic and foreign, switch to the less expensive foreign producers. The
real volume of imports rises and of exports falls, and the trade balance
worsens. The dollar had completed a real appreciation of 27 percent
by late 1982, relative to the 1973-79 standard of comparison. If the
usual pattern of recent years holds up, the full effect on the trade
deficit will be reached in late 1984. Estimates indicate that every 1
percent real appreciation adds about $2 billion to the deficit at the
peak. Thus the 27 percent real appreciation of the dollar translates
into about $54 billion of the projected deficit in 1984. The continued
appreciation of the dollar through 1983 portends further deterioration of the trade balance in 1985.
Effect of Debt Problems in Latin America

In the last couple of years, a number of highly indebted third
world countries have experienced great difficulty meeting their debt
obligations. They have had to take strong measures to reduce their
imports and to boost their exports, in order to generate the foreign
exchange to pay the interest on the debt. Many of these countries are
in Latin America and conduct an especially high proportion of trade
with the United States. Mexico alone accounted for 7.6 percent of
U.S. exports in 1981. Seven of the most indebted Latin American
countries together accounted for 13.9 percent of U.S. exports. The
reductions in net imports that these countries have been obliged to
undertake because of a shortage of foreign exchange are so great
that the U.S. share looms large in the U.S. trade balance. Exports of
U.S. industries such as farm and construction machinery have been
particularly hard-hit.
As Table 2-1 shows, the U.S. bilateral trade balance with Mexico
alone, which changed from surplus to deficit in 1982, registered a decline of $12 billion between 1981 and 1983. The U.S. loss in net exports to Latin America was about $21 billion. By comparison, the
projected U.S. loss in net exports to Japan from 1981 to 1983 was
only $4 billion, and to all of Western Europe about $12 billion, as
illustrated in Chart 2-3. (The only source of improvement, U.S.
trade with the Organization of Petroleum Exporting Countries
(OPEC), is registering smaller deficits than in the past as a consequence of a decline in the demand for OPEC oil and in the dollar




47

price of oil.) As many of the Latin American debtors still have further
economic adjustments to make, the loss in U.S. net exports to that
region is not expected to diminish much in 1984.
Chart 2-3

Change in U.S. Bilateral Trade Balances
From 1981 to 1983
Change in billions of dollars
30
OPEC
20

10

JAPAN
-10

CANADA
OTHER

WESTERN EUROPE
-20
LATIN AMERICA
-30
Note.—Based on preliminary data for 1983.
Source: Department of Commerce.

Effect of Relative Cyclical Position of the United States

A country's level of imports varies with its level of income during
the course of the business cycle. Thus world trade in general contracted in the 1980-82 period of recession.
As of late 1982, cyclical factors were a plus for the U.S. trade balance. In the first place, even when business cycles are synchronized
across countries, the U.S. trade balance historically tends to improve
in recessions and worsen in expansions. U.S. imports from other
countries are usually more responsive to U.S. income than other
countries* imports are to their incomes. In the second place, as of
1982, the recession had been more severe in the United States than
for most trading partners. Real GNP had been on average almost
constant in the United States from 1980 to 1982, but had grown at




48

TABLE 2-X.—U.S. trade balance by country, 1980-83

[Balance of payments basis, millions of dollars]
Country

1980

1981

-25,544
-1,277

Canada
Western Europe
United Kingdom..
Germany
Other
Japan

-28,067
-2,242

20,348
2,970
-243
17,621

Total..

12,235
-263
-887
13,385
-15,802

Other developed countries..

-10,411
584

Latin American republics....
Brazil
Mexico
Venezuela
Other

5,860
629
2,647
-740
3,324

3,388
7,481
-676
4,440
-122
3,839

OPEC (non-Latin America)...

-37,476
-4,584

-28,546
-7,490

Other developing countries 2

1982
-36,389
-9,198
6,793
2,352
-2,688
11,833
-16,991
2,623
3,389
-863
3,808
429
853
10,978
7,908

1983 *
-63,521
-9,810
98
-2,099
-4,344
6,541
-19,886
1,585
-13,911
-2,491
=7,762
-2,328
-1,330
-7,111
= 15,909

1

Preliminary estimates.
Residual excluding Eastern Europe and international organizations.
Source: Department of Commerce, Bureau of Economic Analysis.
2

an average annual rate of 1.4 percent in other industrialized countries. As of December 1982, U.S. industrial production was 12 percent below its previous peak, but industrial production in the other
six major industrialized countries had fallen only 4 percent over the
same period. Thus, the recent recession tended to reduce U.S. imports from the rest of the world more than it reduced the rest of the
world's imports from the United States.
The cyclical position of the United States relative to its trading
partners began to turn around rapidly in early 1983. In the third
quarter of 1983 the United States reattained its previous peak in the
level of economic activity as measured by industrial production; most
of the major industrial countries had not yet done so. For the year,
real GNP grew at an annualized rate 3.8 percent faster in the United
States than among a weighted average of trading partners. Thus
sometime in the middle of the year the two output paths crossed; the
relative cyclical position was a positive factor in the trade balance in
the first half of the year and a negative factor in the second half. The
overall effect in 1983 was probably close to neutral.
With U.S. growth from 1983 to 1984 expected to continue well
above that of its major trading partners, U.S. imports from other
countries will rise faster than other countries' imports from the
United States. The relative cyclical position becomes an increasingly
negative factor for future trade balances. Estimates suggest that the
relative cyclical position will account for $15 to $20 billion of the
projected worsening in the trade deficit between 1983 and 1984.




49

Each of the three sources of the increase in the trade deficit—the
exchange rate, the third world debt problem, and the relative cyclical
position of the industrialized countries—warrants further analysis. In
each case, the impact on U.S. trade may be the channel through
which the problem is most forcefully brought to the attention of the
American citizen; but each topic bears examination for its own sake.
The exchange rate and related topics are considered in the remainder of this section; the cyclical position of other industrialized countries and the third world debt problem are considered in the second
and third sections of the chapter.
SOURCES OF THE STRONG DOLLAR

In the 1950s and 1960s central banks were committed to maintaining their countries' exchange rates at fixed levels. This effort became
increasingly difficult over time, due particularly to divergent inflation
rates among countries. By 1971 the dollar had become unsustainably
overvalued in the sense that the supply of dollars greatly exceeded
the private demand for dollars. Central banks made up the difference, buying unwanted dollars in exchange for foreign currencies.
The effort was abandoned in 1973 and the major currencies moved
onto a system of floating, i.e., market-determined, exchange rates.
When exchange rates float, there is no such thing as undervaluation
or overvaluation, in the sense of excess market supply or demand for
currencies. The value of the currency is whatever the market dictates
that it should be.
The Floating Exchange Rate System

It is nearly impossible to imagine the world economy going
through the past 10 years in the straightjacket of fixed exchange
rates. Given the events of this period, notably the large changes in oil
prices and the divergent macroeconomic policies among the industrialized countries, floating exchange rates have performed well.
Nevertheless, some critics argue that the system is not working as
it should. They base their case on the large fluctuations that exchange rates have exhibited over the past 10 years—short-term variability as well as longer term swings such as the large rise of the
dollar from 1980 to 1983. The critics also point to the fact that many
exchange-rate fluctuations cannot readily be explained. Few believe
that an early return to fixed exchange rates is possible, but there is
sentiment in some quarters for government action to try to dampen
the fluctuations.
Transactions costs in financial markets and government-imposed
barriers to the flow of capital across national boundaries are today
very low among most of the larger industrialized countries. The high
international mobility of capital means that the foreign exchange




50

market is now dominated by capital transactions, not by trade transactions. The foreign exchange market is an asset market, like the
stock or bond market; the exchange rate is the price of one currency
in terms of another. It is not surprising that it is difficult to explain
all the month-to-month ups and downs of the exchange rate, just as
it is difficult to explain all the ups and downs in stock prices or bond
prices. But most observers agree that an increase in the demand for
dollar assets underlay the 1980-83 appreciation. An increase in the
demand for a currency results in an increase in its price, for the same
reason that an increase in the demand for any commodity results in
an increase in its price.
Three reasons are often given for the recent increase in demand
for dollar assets. They are (1) reduced expectations of U.S. inflation,
(2) increased U.S. real interest rates, and (3) "safe-haven" and other
possible portfolio shifts. We consider each in turn.
Effect of Reduced Expectations of Inflation

In the long run, the exchange rate tends to follow the differential
trend in the domestic and foreign price levels. If one country's price
level gets too far out of line with prices in other countries, there will
eventually be a fall in demand for its goods, which will lead to a real
depreciation of its currency.
Investors in international money markets are fully aware of the relationship between the price level and the exchange rate. If market
participants think that a currency will be losing value in the future
through inflation, then they will seek to avoid losses by immediately
shifting their holdings out of that currency and into other assets.
This attempt to sell the currency will cause its price to decline, even
before the anticipated inflation occurs. For example, in the late 1970s
the value of the dollar declined, in large part because of heightened
expectations of U.S. inflation.
There is no way to know exactly what the market expects the inflation rate to be in the future, as opposed to what the inflation rate
actually is. Table 2-2 shows three alternative measures of expected
inflation: the actual inflation rate over the preceding year; a weighted
average of actual inflation over the preceding 3 years (with more
weight on the most recent years); and forecasts of future inflation
made by Data Resources, Inc. Regardless which measure is used,
there was a large drop in the expected U.S. inflation rate between
1980 and 1983. The market reduced its expectations of U.S. inflation
in response to the firm anti-inflation policies of the Administration
and of the Federal Reserve, to the 1980 and 1981-82 recessions, and
to the actual decline in the observed inflation rate. As the table
shows, expected inflation also fell in other countries between 1980




51

and 1983, but not as much. The differential between U.S. and foreign expected inflation declined.
The fall in the expected inflation differential is the first of the
three reasons for the appreciation of the dollar. Investors who had
previously shifted out of dollar assets because of fears of inflation,
now shifted back. The increase in the demand for dollar assets
caused an increase in the price of dollar assets, i.e., the exchange
rate.
TABLE 2-2.—Decreases in expected inflation rates and increases in real interest rates, 1980 to
1983
1980 average
Item

November 1983

Change

Trading
partners 1

Trading
partners 1

Trading
partners 1

United
States

Difference

United
States

Difference

1-year inflation 2

11.39

11.34

0.05

11.92

Difference

Percentage points

Percent per annum
Long-term government bond rate

United
States

10.29

0.53

-1.05

1.58

-1.98 -10.35

1.63

13.54

11.38

2.16

3.19

5.17

-6.21

-4.14

-2.16

-.05

2.11

8.73

5.11

3.61

10.88

5.16

5.72

3-year distributed lag inflation 3

11.67

9.35

2.32

4.90

6.46

-1.56

-6.76

-2.88

-3.88

Real interest rate 2

-.28

1.99

-2.27

7.02

3.82

3.19

7.30

1.84

5.46

DRI 3-year forecasted Inflation *

10.05

8.56

1.49

5.29

5.90

.60

-4.76

2.67

-2.09

1.34

2.77

1.44

6.63

4.39

2.23

5.29

1.62

3.67

Real interest rate 1 . .

Real interest rate 3

Canada, France, Germany, Italy, Japan, and United Kingdom. WeUm™ u, *.
Change in the consumer price index <CPt) over the preceding 12 months.
Weights beginning with the immediately preceding 12-month change in the CPI are .5, .3, and .2.
4
Forecasts of CPI inflation over the subsequent 36 months. 1980 is the average of the four quarters' forecasts.
Sources: International Monetary Fund and Data Resources, Inc. (DRI).
2
3

Effect of Increased Real Interest Rates

The effect of the decline in expected inflation is only part of the
story. If exchange rate movements were determined solely by inflation rates, the decline in expected inflation could explain the nominal
appreciation of the dollar, but not the real appreciation of the dollar.
The latter is the important concept for the question of the competitiveness of U.S. producers in world markets.
A second cause of the appreciation of the dollar between 1980 and
1983—and the major cause of its real appreciation—is the increase in
the U.S. real interest rate. The real interest rate is defined as the
nominal interest rate corrected for expected inflation. If nominal interest rates had come down as quickly as the expected inflation rate,
then there would have been no increase in the real interest rate. But
by the three measures in Table 2-2, the U.S. real interest rate rose
between 1980 and 1983. This is typical of historical experience with
monetary disinflation: it takes time for reduced expectations of infla-




52

tion to be reflected in reduced nominal interest rates. Real interest
rates rose somewhat in other countries too, but not by as much. The
real interest differential shifted in favor of dollar assets.
Because U.S. assets now pay a higher expected real rate of return
than foreign assets, they have become more attractive to hold. The
increase in demand for dollar assets arising from a higher real interest differential can explain an increase in the exchange value of the
dollar, above and beyond the increase that would be due to a lower expected

inflation differential in the absence of a change in the real interest differential. It explains why the dollar appreciated not only in nominal
terms but in real terms as well.
Large real appreciations of a currency tend to be temporary. In the
long run, the real value of the dollar is widely expected to fall back
to a level that allows U.S. firms to compete in world markets on an
equal basis. To believe otherwise would be to believe that U.S. producers can continue to be priced out of world markets, and the
United States can continue to run 12-digk trade deficits, indefinitely.
It is impossible to say when the dollar will come back down. The decline could start in 1984 or it could come later. To judge by past experience, even if there were no unforeseen developments, it could be
as long as 10 years before the dollar returns to its long-run value.
It is possible to get a rough idea of how much above its long-run
real value the dollar is currently, in the market's view, by looking at
the long-term real interest differential in favor of the dollar. The
long-term interest rate is the one reported in Table 2-2. The 10-year
real interest differential is the compensation that investors get for
holding assets in a currency that is expected to depreciate, in real
terms, over the next 10 years. Taking the present 10-year real interest differential to be 3.2 points, the implication is that the market expects the dollar to depreciate, in real terms, at an average rate of 3.2
percent a year over the next 10 years, or 32 percent altogether (ignoring compounding). This arithmetic example would suggest that
the market regards the dollar as currently being about 32 percent
above its long-run real value.
In 1980 the real interest differential was negative; the market regarded the dollar as being about 23 percent below its long-run real
value. Taking the increase in the real interest differential between
1980 and 1983 to be 5.4 points, the implication is that this factor by
itself is sufficient to explain an increase in the dollar's value over this
period of about 54 percent (without any change in its long-run real
value). One can get different answers by choosing different horizons
or different measures of the rise in the real interest rate. It is possible that none of the three alternative measures of expected inflation
in Table 2-2 adequately reflects true expectations over the 10-year




53

horizon that is relevant. Nevertheless, it is evident that the real interest differential is capable of explaining the sort of real appreciation
that the dollar has experienced.
Effect of "Safe-Haven"

and Other Possible Portfolio Shifts

The third reason that is commonly given for the current strength
of the dollar is the "safe-haven" effect: capital flees social and economic instability in other countries for the safety of the United
States. There is some danger here of using the term "safe-haven" as
a vague label for unexplained shifts in investors' portfolios. But one
concrete interpretation is that investors have shifted their portfolios
into dollar assets in response to the increased riskiness of investments in other parts of the world, Latin America in particular.
A decision by Latin Americans to move capital into the United
States generates partly offsetting capital outflows from the United
States to Europe and other countries. But in the eyes of some observers, investments in Europe have also become riskier, as a result
of economic and political developments. Thus, a worldwide portfolio
shift into U.S. assets in response to a change in relative risk may explain some part of the dollar appreciation. Other factors that are
sometimes mentioned are the more favorable tax treatment for capital investment in the United States and the strength of the U.S. recovery in 1983.
The Source of High Real Interest Rates

If high real interest rates are the most important explanation for
the high real value of the dollar, what is the explanation for the high
real interest rates? This question is a subject of some controversy.
The real interest rate equilibrates the supply of saving, both private and public, to the demand for saving, in the form of investment.
The real interest rate will rise either if the supply of saving shifts
down or if investment shifts up. The contribution of the corporate
income tax to the cost of capital facing firms has been reduced under
this Administration. It is hoped that the increased incentive to firms
will stimulate investment in the future. Unfortunately, as the second
column of Table 2-3 shows, investment as a percentage of GNP was
still lower in 1983 than in 1980, or than the average since 1970.
Thus an upward shift of investment cannot be the sole explanation
for the increase in real interest rates. A decrease in the supply of
saving also must have played a major role. Indeed, there has been a
decline in private saving, probably because of the recession, and a
large decline in government saving, i.e., a large increase in the Federal budget deficit.
Although the decline in private and public saving is the most
widely cited explanation for high real interest rates, other explana-




54

TABLE 2-3.—Distribution ofGNPby component, 1970-83
[Percent]

Period

Personal
consumption
expenditures

Fixed
investment

Government Net exports
purchases
of goods
of goods
and services and services

Inventory
investment

1970-79 average

62.4

15.3

21.0

0.6

0.8

1980

63.4

15.6

20.4

.9

-.4

1981

62.9

15.5

20.2

.9

.6

1982

64.8

14.3

21.1

.6

-.8

1983 l

65.2

14.4

20.9

-.3

-.2

1

Preliminary estimates.
Source*. Department of Commerce, Bureau of Economic Analysis.

tions are sometimes given. One is that an increase in uncertainty,
usually ascribed to increased variability in the U.S. money supply,
makes nominal dollar assets less attractive, so that they must yield a
higher expected real return as a "risk premium" if they are to be
willingly held. This argument could account for why real interest
rates are high, but it cannot also be an explanation of the strength of
the dollar. Any increased uncertainty attaching to dollar assets would
cause a fall in demand for them and therefore in the price of the
dollar, not a rise. Only increased uncertainty in other countries could
induce the observed portfolio shift. Indeed that was one possible interpretation of the safe-haven argument discussed above.
THE CAPITAL ACCOUNT SURPLUS

The U.S. current account deficit in 1983 was nearly three times the
previous record, which was set in 1978. The immediate connotation
of the current account deficit, as of the trade deficit, is lost production in import-competing and export industries. But there is another
way to look at it. The current account deficit is financed by a capital
inflow from abroad. Foreigners have been investing in the United
States, for example participating in the rising stock market and
buying Treasury bills.
Relation to Crowding Out

This capital inflow has an important implication for the U.S. economy. Under the natural assumption that the capital inflow is not
somehow offset by an equal decrease in domestic saving, it keeps real
interest rates lower than they otherwise would be. As such, it allows
those components of GNP that are especially sensitive to the real interest rate—housing, consumer durables, and business investment in
plant and equipment—to be higher than they otherwise would be. Of
course, the capital inflow has not been large enough to prevent real




55

interest rates from rising since 1980, as reported in Table 2-2, or investment as a share of GNP from falling, as reported in Table 2-3.
Table 2-3 also shows how two other components of demand, consumption and government expenditure, have risen since 1980 as a
percentage of GNP. Indeed, it was the increases in these components
of spending that drove up real interest rates and crowded out investment, as explained in Chapter 1. The important point regarding
the inflow of capital into the United States from abroad is that it
dampened the rise in the real interest rate, and thus reduced the
degree of crowding out of investment. This bonus did not come free.
The counterpart to the capital inflow is the appreciation of the dollar
and the worsening of the trade deficit. In effect, much of the crowding out is now borne by the import-competing and export industries,
with the consequence that less of it is borne by the construction, consumer durable, and capital goods industries.
In 1984 the U.S. current account deficit is forecasted to be roughly
40 percent the size of the Federal Government budget deficit. This
means that a capital inflow from abroad is financing the equivalent of
40 percent of the budget deficit, and the crowding out of other sectors of domestic demand is reduced correspondingly. International
capital flows of this magnitude are consistent with the increasing integration of world capital markets.
Benefits of the Capital Inflow and Dollar Appreciation

Is the inflow of capital and the associated strength of the dollar desirable? In one sense it is not; the appreciation of the dollar imposes
great costs on import-competing and export industries in terms of
lost income and employment. But the strong dollar has substantial
benefits too. It keeps down the general price level, both directly
through lower dollar prices of imports, and indirectly through lower
prices for domestically produced goods that compete with goods produced abroad. The important question for policy is whether the costs
of artificially reducing the capital inflow are greater than the costs of
the existing trade deficit.
In the long run, expansion of potential GNP is limited by such factors as growth of the labor force and of the capital stock. Even in the
short run, monetary policy puts a limit on the expansion of actual
dollar GNP, because the Federal Reserve is currently committed to a
monetary policy that avoids a resurgence of inflation. It follows that
if the capital inflow were somehow shut off, the dollar allowed to depreciate, and export and import-competing industries stimulated to
increase production, the gains in those industries would probably be
offset by losses in other industries so as to leave total GNP unchanged. The mechanism whereby this would happen is an increase
in the real interest rate; the industries that would lose include con-




56

struction and other interest-sensitive industries, whose customers are
primarily firms undertaking investment.
There are two reasons why the investment sector should not have
its share of the national pie reduced in favor of the export and
import-competing sectors, as it would be if the capital inflow were
shut off. The first is that there is no reason to think that the profitability of investment has fallen. Investment determines how big the
national capital stock will be in the future, and thus how big output
can be. It is true that a capital inflow, which constitutes the sale of
assets to foreigners, represents a loss of future income in the form of
capital earnings paid overseas. This loss in income is as great as the
loss of returns to plant and equipment never built. Indeed if the
United States continues to run current account deficits at anything
like the rate forecasted for 1984, sometime in 1985 the Nation will
pass from being a net creditor to being a net debtor, for the first
time in 68 years. But from the viewpoint of maximizing domestic
output and employment, it is better to have machines working in the
United States, even if owned by foreigners, than not to have them at
all.
The second reason for sharing economic expansion proportionately among sectors, to whatever extent possible, has to do with inflation. Expansion is often associated with an increase in inflation.
Whether U.S. inflation is reignited depends, among many other
things, on the distribution of expansion across sectors. It seems possible that industries that sell their goods and services primarily to the
consumer and government sectors will begin to run into capacity
constraints before the rest of the economy. At that point, any further
increases in demand in those sectors are more likely to be reflected
in higher prices than in higher production. In the industries that sell
their products to firms undertaking investment, by contrast, there is
still tremendous room for expansion. Some industries, such as nonresidential construction, have only begun to share in the recovery.
The noninflationary payoff to expansion in these industries is large.
But if the country had never had the capital inflow, the interest rate
would be even higher, and production in the interest-sensitive industries would be lower without much gain in reduced inflation. The
export and import-competing industries would be benefiting from a
cheaper dollar. But they might now be starting to run into capacity
constraints more quickly, with an adverse effect on the overall inflation rate.
MEASURES TO REDUCE THE TRADE DEFICIT

Four kinds of policy measures have at times been proposed to improve the trade balance: protectionism to keep out imports, foreign




57

exchange intervention to reduce the value of the dollar, capital controls with the same aim, and a change in macroeconomic policy. Each
of these has costs. Of the four, protectionism is the most dangerous.
Protectionism

In a dynamic economy there are always some sectors expanding
and others contracting because of technical change, shifting consumer tastes, and so forth. This is particularly true of an economy exposed to the rigors of competition in world markets. Earlier in its
history, the U.S. economy, with its large domestic market, diversified
economic resources, and geographic remoteness from Europe, was
less dependent on international trade. But as domestic economies of
scale were exhausted, as tariffs were reduced worldwide, and as declining transportation costs made geography increasingly irrelevant,
international trade became increasingly important. The growth in exports allowed many U.S. sectors to expand rapidly that otherwise
might not have been able to do so. Major examples in recent decades
include agriculture, high-technology products, and services. But the
increase in U.S. imports, which sooner or later must accompany any
increase in exports, meant a loss in demand for other U.S. sectors.
Some sectors that had previously had the domestic market to themselves found that their foreign counterparts could produce quality
products at costs far below what they had become accustomed to receiving. Some major examples are the auto and steel industries.
The economic strains associated with long-term structural trends
have always generated political pressure on the government to protect the adversely affected industries. In recent years temporary
macroeconomic factors—the rise in unemployment during the last recession and the high value of the dollar—have exacerbated the economic difficulties of sectors vulnerable to import competition, and
have intensified accordingly the political pressure to protect them. In
addition, some exporters are finding that the strong dollar, and subsidies by some foreign governments, are making it more difficult to
compete in foreign markets. This group traditionally forms a constituency for free trade but is now in some cases generating political
pressures of its own for government action.
The Administration's stated policy is to resist these pressures. Protectionism usually succeeds in increasing the income of the sector
seeking protection. However, it imposes costs on other sectors that
more than outweigh the benefits for the protected sector. These
costs are of three kinds. First are the effects on the purchasing power
of consumers. A tariff or quota on imports cannot succeed in raising
the prices received by domestic producers without at the same time
raising the prices paid by domestic consumers. Second are the effects
on other industries that use the output of the sector in question as an




58

input into their own productive process. Protection for the steel industry raises costs for the auto industry, protection for sugar growers
raises costs for candy manufacturers, and so forth. Third are the effects on export industries. The dollars that foreign countries earn by
selling to the U.S. market are useless to them unless, sooner or later,
they spend them on U.S. exports. If the United States cuts off imports of foreign goods, foreigners will not have the dollars to buy
U.S. exports. Usually it is difficult to identify the specific U.S. export
industry that would benefit from increased trade. When the dollars
come back to the United States, it will not necessarily be in the form
of spending by the same foreigners that originally earned them, nor
in the same year. But in one recent example, the connection is clear:
China has indicated that if the United States cuts off imports of textiles from it, China will cease purchases of agricultural products from
the United States.
The American public retains a broadly based commitment to the
ideals of free trade. Nearly all political factions support free trade in
principle. But there is a common fallacy that the arguments for free
trade are theoretical arguments that lose applicability if other countries are not practicing free trade, that market distortions imposed by
trading partner governments automatically warrant retaliation by the
U.S. Government.
The desire to retaliate against a foreign government that is, for example, subsidizing exports, is understandable. Such retaliation has
two effects, one predictable and one unpredictable. The predictable
effect is to impose immediate costs, on domestic consumers and
other domestic producers, that exceed the immediate benefits for the
protected sector. It is irrelevant to this effect why foreign producers
were underselling domestic producers, whether it was because of
government subsidies, the level of the exchange rate, or lower labor
costs. Export subsidies by foreign governments are in essence
income transfers—i.e., foreign aid—to the importing country.
The unpredictable effect is the reaction of the foreign government.
If the foreign government were to respond by removing its subsidies
in exchange for the domestic country removing its measures, then
both sides would be better off. All too often, however, the foreign
government retaliates with more of the same. U.S. measures must be
well targeted and explicitly temporary if they are to have the desired
effect on foreign governments. There are no winners in a trade war.
The issue of the duration of protectionist measures is an important
one. Frequently, measures that are originally adopted as temporary,
such as quotas imposed to protect a domestic industry "just until it
can get back on its feet," turn out later to be very difficult to remove.




59

Often protection encourages the industry to delay making needed adjustments, rather than to speed them up.
Foreign Exchange

Intervention

A second measure that has been proposed to improve the trade
balance is intervention in the foreign exchange market by the monetary authorities to force down the value of the dollar and thus to restore price competitiveness to American industry. At the beginning
of August 1983, and later in the year, U.S. authorities did intervene
on a small scale, buying marks and yen in exchange for dollars, in
cooperation with monetary authorities in other countries. The intervention did not noticeably depress the value of the dollar, nor was it
intended to. It is U.S. policy to intervene only to calm disorderly
markets.
There are two kinds of foreign exchange intervention, known as
sterilized and unsterilized. Sterilized foreign exchange intervention
occurs when the central bank, at the same time that it is buying foreign currencies with domestic currency, sells Treasury securities in
the market in order to take the domestic currency back out of circulation. The point of sterilizing the foreign exchange intervention is to
keep the domestic money stock unchanged. This is the type of intervention the U.S. monetary authorities undertake when they do intervene.
Unsterilized intervention has the effect of increasing the domestic
money supply. This would have a strong downward effect on the
value of the domestic currency. But like any other increase in the
money supply, it can be inflationary.
The effect of sterilized intervention is much less clear than the
effect of unsterilized intervention. The 1983 summer intervention
amounted to $254 million on the part of U.S. authorities. This was
only 1 percent of the flow through the U.S. interbank foreign exchange market on a typical day in 1983. It was even less significant
relative to the trillions of dollars in funds that investors around the
world can commit to the foreign exchange market if they think that
the exchange value of the dollar has been temporarily pushed below
the true market level. Investors will move in quickly to exploit the
potential profit opportunity, buying dollars, and thereby returning
the price of the dollar to its previous level. This process ensures that,
unless monetary authorities are prepared to intervene on a massive
scale, any effects on the exchange rate will be transitory. After the
Versailles Summit of 1982, a working group with representatives of
the seven Summit countries was set up to study exchange market intervention. Its report, released in April 1983, concluded in part, that
there was "broad agreement that sterilized intervention did not generally have a lasting effect.'*




60

If monetary authorities were prepared to intervene on a sufficiently
massive scale, there could conceivably be some permanent effect on
the exchange rate, even if the intervention were sterilized so as to
leave the money supply unchanged. But to the extent that sterilized
purchases of foreign currency were successful in reducing the value
of the dollar, they would also be successful in raising the U.S. interest rate. The reason is that sterilized intervention does not leave
market participants holding any more dollar currency than before; it
leaves them holding more dollar Treasury securities than before. The
interest rate would have to rise to induce the market to hold a greater quantity of Treasury securities, just as it does whenever the government sells large enough quantities of Treasury securities. The exporting and import-competing industries would be happy with the
lower value of the dollar. But the capital goods, construction, and
other interest-sensitive industries would be unhappy with the higher
interest rate.
Capital Controls

The third kind of measure that has been suggested to reduce the
U.S. deficit is the adoption of an international "interest equalization
tax" or other restrictions on the international mobility of funds. The
aim would be to shut off or reduce the inflow of capital and thus
reduce the exchange value of the dollar.
The case against restrictions on the international flow of capital is
analogous to the case against restrictions on the international flow of
commodities, i.e., the case for free trade. Controls on international
borrowing and lending interfere with the efficient allocation of capital among countries. The Administration is opposed to capital controls as a matter of general principle.
What effect would controls on capital inflow in the United States
have in the present context? As with exchange market intervention,
there are two possibilities. One possibility is that the controls would
not even be effective. The experience of the United States in the
1960s, and of other countries today, is that there are many ways to
circumvent capital controls. The alternative possibility is that the
controls would be strong enough to reduce the capital inflow, and
thereby reduce the value of the dollar. But if so, the reduced supply
of saving from abroad would also raise the real interest rate and,
once again, concentrate all the crowding out in the interest-sensitive
sectors.
Macroeconomic Policy

The fourth kind of measure that has been suggested to reduce the
U.S. trade deficit is a change in macroeconomic policy.




61

One possibility is a more expansionary monetary policy. This
would clearly reduce the value of the dollar. In the short run, before
prices throughout the economy had time to adjust, it would reduce
the value of the dollar not only in nominal terms, but in real terms as
well. Thus it would succeed in stimulating the demand for U.S. products. Unfortunately, a more expansionary monetary policy would also
have adverse consequences for inflation. In the long run, when prices
have had time to adjust, there would probably be no effect on the
real exchange rate or real output, only an increase in the general
price level. Because of the inflationary consequences, the Administration does not advocate using expansionary monetary policy to depress the value of the dollar.
On the other hand, for those who are concerned that monetary
policy should be tightened, it is worth taking note of the undesirable
consequences for the exchange rate in the short run. The fact that
the price of the dollar in foreign exchange markets remained high
throughout 1983 is a clear signal that the market had confidence in
the Federal Reserve and that the money growth rate was not excessive.
The last possibility is a policy of reducing the budget deficit. Measures to reduce the budget deficit would lower real interest rates and
thus allow the investment sector to share more fully in the recovery
that is now taking place primarily in the government and consumer
sectors. But, further, it would also lower the real value of the dollar
and thus allow the exporting and import-competing sectors to share
in the recovery as well. Of course, just as there are costs to the other
proposed measures to improve the trade balance, there are also costs
to reducing the budget deficit, whether by reducing government expenditure or by raising taxes.
DEVELOPMENTS IN OTHER INDUSTRIAL COUNTRIES
One of the challenges facing the world economy is the uneven geographical distribution of the recovery. Among the industrialized
countries, only in Canada is real growth in 1984 expected to be as
strong as in the United States. The implication for U.S. trade is negative: slower growth among trading partners than in North America
means slower growth in U.S. exports than in U.S. imports. As Chart
2-3 shows, U.S. trade with both Europe and Japan is deteriorating.
EUROPE

The 1983 recovery in the United States and Canada is in the process of spreading to Europe as well. The United Kingdom and West
Germany seem to have embarked on a path of renewed growth. Ex-




62

pansionary policies in France in 1981 postponed the recession there,
but deteriorating inflation and balance of payments situations led to
the adoption of austerity measures. Though the French trade balance
improved in 1983, worries about inflation remained serious enough
to keep a lid on expectations of future French expansion. In Italy and
most of the smaller European countries there was no significant recovery for 1983 as a whole, although there were some signs of a
pickup in economic activity toward the end of the year.
Effects on Europe of U. S, Economic Developments

Inflation has declined in all the larger European countries since
1980. This accomplishment has not been easy. The weakness of their
currencies against the dollar has meant higher prices for oil and
other imports in Europe. To limit the damage from both domestic
and imported inflation, most European countries have accepted
higher real interest rates than they would have accepted otherwise.
Indeed, this is the mechanism through which recession was transmitted to Europe in 1981. Just as capital flowing into the United States
has kept real U.S. interest rates lower and U.S. investment higher
than they would otherwise be, so has capital flowing out of some European countries probably kept real European interest rates higher
and European investment lower than they would otherwise be. In
effect, the low U.S. rate of private and public saving is crowding out
investment not just in the United States, but in the rest of the world
as well.
The counterpart to a capital outflow is a current account surplus.
This is the positive side of the ledger from the viewpoint of the European countries. Their depreciated currencies give their exporting
and import-competing industries a competitive advantage in world
markets. Until now, the Europeans have not on the whole considered
that they were benefiting from the strength of the dollar and the U.S.
trade deficit, despite their sizable share of it illustrated in Chart 2-1.
Some have found it politically convenient to focus exclusively on the
negative aspects of the exchange rate movement. The world current
account discrepancy may also be part of the explanation: it is as if
each country thinks it is running a deficit in goods and services, and
someone else must be running the surplus.
In any case, in 1984 U.S. growth will lead to greater demand for
European goods and thus is likely to help pull Europe out of its recession. The prospective reversal of the 1980-83 appreciation of the
dollar is another development to which the Europeans can look forward. If the dollar depreciates, as many expect, the reduction in
import prices will make the task of fighting inflation easier in Europe.
Of course, the reversal in the gain in European competitiveness
would also lead to an eventual reversal in the gain in net exports to




63

the United States. But it might allow European monetary authorities
to bring down interest rates and stimulate domestic demand, at least
in those countries such as West Germany and the United Kingdom
that have relatively strong current account and inflation positions.
The weaker-currency countries in Europe would find it difficult to
expand on their own. The French franc, for example, might come
under renewed pressure within the European Monetary System if a
prospective world portfolio shift out of dollars were accompanied by
a portfolio shift into marks.
Structural Problems in European Labor Markets
Regardless of what happens in the international financial markets,
the problem of 18 million unemployed workers still plagues Western
Europe. Indeed, in 1983 the unemployment rate continued to climb
throughout Europe. In sharp contrast to the United States, Western
Europe employs about the same number of workers, on an absolute
basis, as it did in 1968. The most commonly cited cause of the bleak
employment picture is excessive labor costs. Due to wage contracts
indexed to consumer prices, and other less institutionalized social
forces, real wages in Europe never adjusted in the 1970s to reflect
the negative effect of oil shocks on the productivity of labor. Some
observers argue that the greater rigidity of real wages in Europe than
in the United States explains European governments* lack of enthusiasm for expansionary demand policies, despite low growth. For example, some European governments have taken steps to reduce government expenditure. They have also expressed the wish that the
United States would reduce its budget deficit. Whether or not it is
correct that expansion requires real wages to fall, it seems likely that
any expansion of employment in Europe will greatly lag expansion of
output. The implications for investment and long-term growth are
also disturbing.
JAPAN
Economic performance in Japan has been impressive by the standards of most countries, even though the 1980-82 world recession was
reflected in Japan as a clear slowdown in real growth. The Japanese
trade account moved into substantial surplus again in 1983, as declining oil prices reduced the import bill and recovery in the United
States and some others of Japan's trading partners boosted exports.
Domestic demand remained somewhat sluggish.
Trade with the United States and Japanese Commercial Policy
As Table 2-1 shows, the U.S. trade deficit with Japan, known as a
bilateral trade deficit, is larger than with any other single country.




64

Trade relations between the two countries are a source of special
concern, and warrant a careful analysis.
To some extent the bilateral trade imbalance follows naturally
from three other facts:
1. Japan usually runs a merchandise trade surplus with the rest of
the world, as a consequence of its high rate of saving and its deficit
in services.
2. The United States usually runs a merchandise trade deficit, as a
consequence of its low rate of saving and its surplus in services.
3. Japan and the United States are the two largest market economies in the world and account for large shares of each other's trade.
There is an important reason why, even if Japan's overall trade balance were zero, it would still run a large bilateral trade surplus with
the United States, and a very large surplus in manufactured goods in
particular. Japan has few natural resources, and is dependent on imports for its supply of primary products, especially oil and other mineral fuels. It must earn the foreign exchange to pay for the oil by
exporting other goods. If the United States were willing to sell
enough Alaskan oil to Japan, for example, the bilateral trade imbalance would be reduced. As it is, Japan buys its oil elsewhere, running
a large bilateral deficit with OPEC countries. And Europe normally
runs a bilateral deficit with the United States. It is as though the
United States sells to Europe in order to be able to buy from Japan,
Japan sells to the United States in order to be able to buy from
OPEC, and so forth around the circle of trading partners.
The important point is that it is neither necessary nor desirable
that any two countries' bilateral trade be in balance, any more than it
is necessary or desirable for an auto manufacturer to be in bilateral
balance with its steel supplier, or a household with its plumber. One
looks at the overall balance of a household, company, or country, not
at bilateral balances, to see if it is earning more—from all its trading
partners together—than it is paying out.
One widely held belief is that Japanese trade policy is responsible for the fact that Japan does not buy as much from the United
States as the United States buys from it. Because the Japanese
have accelerated tariff reductions agreed to in the Tokyo Round of
multilateral trade negotiations, their tariffs are now lower than those
of the United States and the European Community. But the Japanese
maintain a number of nontariff barriers against imports that are a
source of friction with the United States. These include import
quotas for some agricultural products, and less tangible barriers to
imports of manufactured goods, such as inspection requirements and
government purchasing policies. Recent negotiations between the
two governments in such areas as beef and citrus products, metallur-




65

gical coal and natural gas, cigarettes, and telecommunications equipment, have made some progress in reducing these barriers. But frictions remain.
Import barriers in every country protect those sectors that would
not have the comparative advantage in a fair fight, at the expense of
those sectors that would. In the Japanese case, it is agriculture that is
easily the least competitive sector and therefore the most protected,
with beef and citrus products the most highly visible examples. Japan
already imports a lot of agricultural products; indeed, it is the largest
customer of U.S. agricultural exports. But, in general, a high observed degree of "import penetration*' does not preclude the existence of a high degree of protection. In fact, import penetration is
often the cause and protection the effect, rather than the other way
around. Many countries invoke national security arguments as a justification for protectionist measures; it should be noted that Japan
does so on behalf of its agricultural sector.
It would be in the Japanese interest to reduce or remove the agricultural barriers because they can import these products far more
cheaply than it costs to produce them domestically. Japanese liberalization would, of course, also be in the interest of U.S. farmers. It
probably would not be in the interest of the U.S. manufacturing
sector, however. In view of Japan's deficits in oil and services, it must
run surpluses in its trade in other goods. If Japan were to start importing more agricultural products, its trade balance would not
simply worsen by the same amount. Rather, the yen would eventually
depreciate in order to generate the required trade surpluses in other
sectors, i.e., manufactures. The point is that Japanese protectionism,
like all protectionism, distorts the pattern of trade in such a way as to
hurt both countries on net; but it is not a major source of the Japanese trade surplus.
The Yen Exchange Rate and Japanese Foreign Exchange Intervention

Another common claim is that an undervalued yen is the source of
the trade problem. One version of this view is that the Japanese are
deliberately keeping the yen undervalued, presumably either through
foreign exchange intervention or through capital controls. No aspect
of this view stands up well to the facts, however.
The value of the yen has indeed fallen in terms of dollars since
1980, though this movement was largely reversed in late 1982. As of
December 1983, the yen had depreciated 3 percent, relative to the
1980 average. This depreciation has not been an offsetting reaction
to different rates of inflation. Rather, the opposite is the case: because of superior inflation performance, the gain in Japanese competitiveness over this period has been 13 percent, as measured by
consumer prices.




66

However, the dollar has appreciated against all foreign currencies,
not just the yen. Chart 2-4 shows the value of the yen, mark, franc,
and pound, each in terms of dollars. The mark, franc, and pound are
all clearly down in value by more than the yen. In fact, relative to the
1973-79 average, the yen has actually risen.in nominal terms by more
than 10 percent against the dollar. It is difficult, given Chart 2-4, to
single out the yen as the troublemaker.
Chart 2-4

Bilateral Exchange Rates
1973-79=100
160

60

U.S. dollars per unit of foreign currency

-

0 11 f 1111111111MIL111M111J111 • 1111111111111111111111 r 111111111111 i 11111111111111111M11111111111111111 i 1111M111111 i L1111111J111
1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

Source: international Monetary Fund.

The bilateral exchange rate between the yen and the dollar remains a source of difficulty for U.S. businessmen who compete with
Japan in domestic or foreign markets. Have the Japanese intervened
to keep the yen at a lower level against the dollar than it otherwise
would be? Although the Japanese authorities practice occasional exchange market intervention, their intervention has, if anything, prevented a further decline of the yen relative to the dollar. The Japanese monetary authorities have long followed a policy of trying to
dampen fluctuations in the exchange rate, known as "leaning against
the wind." In 1977 and 1978 when the dollar was weak against the
yen, the Japanese authorities bought dollars to dampen the down-




67

ward movement of the dollar against their own currency. In the
period since April 1981, when the dollar has been strong against the
yen, the Japanese have sold dollars to dampen the upward movement
of the dollar against their own currency. The intervention does not
appear to have been effective at moderating the swings in the yen/
dollar rate. But it has worked in that direction.
Liberalization of Japanese Capital Markets

The cause of the decline in the exchange value of the yen against
the dollar since 1980 is the flow of capital out of Japan and into the
United States. A primary reason for this capital flow is the high real
U.S. interest rate. But it has been suggested that Japanese restrictions on the international flow of capital may also be a factor.
Japan, like the United States and European countries, maintained
into the 1970s controls on the international flow of capital that had
originated under the fixed exchange rate system. After the shift to
floating exchange rates in 1973, the United States, West Germany,
and the United Kingdom, one by one removed their capital controls.
As recently as 1978, Japan still retained formidable barriers to both
inflow and outflow. For example, foreigners were not allowed to hold
many Japanese securities, such as gensaki, a 3-month repurchase
agreement. Chart 2-5 shows the Tokyo gensaki interest rate and the
London 3-month Euro-yen interest rate. The fact that the Tokyo
gensaki rate exceeded the London Euro-yen rate in 1978 is clear evidence that capital controls were operating to reduce capital inflow
into Japan. Otherwise foreign residents would not have been willing
to hold Euro-yen in London when a higher interest rate was available
in Tokyo. The yen was then at an all-time high against the dollar and
the Japanese were trying to dampen its appreciation by keeping capital from flowing into the country.
When the yen depreciated rapidly in 1979, the Japanese moved
quickly to remove controls on capital inflow, making it possible for
foreigners to hold Japanese securities. Japan's Foreign Exchange and
Foreign Trade Control Law of December 1980 established a presumption that international capital flows are permitted. Chart 2-5
shows that the de jure liberalization took place de facto as well. The
differential between the gensaki and Euro-yen rates dropped sharply.
In fact, the differential, though small, became negative in 1979 and
1980. This is evidence that Japanese controls on the inflow of capital
were liberalized more quickly than controls on capital outflow. If
some barriers to capital outflow had not remained, Japanese investors would not have been willing to hold assets in Tokyo when a
higher interest rate on comparable yen securities was available in
London. Thus those capital controls that remained were more a force
keeping capital inside the country than outside, and thus more a




68

Chart 2-5

Interest Rates on the Yen
Percent per annum
16
Euro-Yen
(London)

14

1975

1976

1977

1978

1979

1980

1981

1982

1983

Source: Morgan Guaranty Trust Company of New York.

force keeping the yen value up than keeping it down. By 1983 the
gensaki-Euro-yen differential was so small as to suggest that Japanese
capital markets for short-term negotiable instruments were as open
as, for example, European capital markets.
The governments of both Japan and the United States recognize
that the yen/dollar exchange rate remains a source of concern, particularly insofar as it heightens protectionist pressures in the United
States. One proposal is that the Japanese government take positive
action to bring about some capital inflow. In 1984 some Japanese
government-affiliated agencies plan to issue foreign currency bonds
in New York. However, the governments of both countries feel that
more direct measures, such as reinstatement of some of the controls
on capital outflow, even if they were effective, would be counterproductive to the longer term goal of completing the integration of
Japan into world financial markets.
In the past the yen has not occupied a place in world financial arrangements that is commensurate with Japan's importance in world




69

trade. For example, the yen's share in world official holdings of foreign exchange, though it has risen rapidly, still falls short of, not only
the dollar's share, but the mark's share as well. Similarly, the percentage of Japan's exports that are denominated in its own currency,
though it has risen rapidly, is still below the corresponding percentage for other large industrialized countries. At the time of the President's trip to Japan in November 1983, the Japanese agreed to promote increased "internationalization" of the yen. This includes such
concrete measures as relaxing the rules that previously restricted use
of the yen forward exchange market to transactions arising from foreign trade. There is no reason to expect such measures to have a noticeable upward effect on the value of the yen in the short run. Nevertheless, in the long run an enhanced role for the yen in world
financial markets is considered by some to be desirable in that it reflects Japan's importance in the world economy, and is hoped to contribute to some increase in its exchange value against the dollar as
well
A related goal is continued deregulation of domestic Japanese capital
markets, which lags behind deregulation in the United States. Here
the major beneficiary of liberalization would be Japanese households,
who in the past have not been paid competitive interest rates on their
savings. But it is also sometimes argued that, if interest rates rose in
Japan, there might be a decline in capital outflow from Japan and an
appreciation of the yen.
Changes in the Japanese-U.S. Trade Balance

The Japanese government is not using either foreign exchange intervention or capital controls to keep the yen "undervalued." Indeed,
it would be more accurate to say that the dollar is "overvalued" than
to say that the yen is "undervalued." The other major currencies are
down against the dollar to a greater extent than is the yen. One
would expect that the U.S. bilateral trade balance with Japan would
not have worsened more than the bilateral trade balance with other
countries.
This is indeed the case. As Chart 2-3 and Table 2-1 show, the bilateral balance with Japan has worsened. But the deterioration in the
U.S. bilateral trade balance with Japan represents less than oneeighth of the total 1981-83 decline in the overall U.S. trade balance.
The deterioration in the bilateral balance is less severe, as a proportion of U.S. imports from Japan, than the 1981-83 deterioration in
the overall U.S. trade balance. The deterioration in the U.S. bilateral
trade balance with Japan is also far less severe, on either an absolute
or relative basis, than the deterioration in the U.S. bilateral trade balance with Mexico over the same period.




70

This is not to say that U.S. trade with Japan does not remain a
source of concern. The point is that the trade balance with Japan has
deteriorated for the same reasons as the balance with other countries.
THIRD WORLD DEBT PROBLEM
The decline in the U.S. trade balance is good news for many trading partners. In the cases of Canada, Japan, and Europe, it represents
a pickup in exports that has helped to pull their economies out of
recession. But in the cases of the third world countries, particularly
those in Latin America, the changing pattern of trade represents
something quite different. As seen in Chart 2-3, the decline in the
U.S. trade balance with Latin America is much greater in magnitude
than the decline in the U.S. trade balance with other parts of the
world. The increase in their trade balances is not good news for the
Latin Americans; it is the reverse. It is a symptom of the severe debt
problem that afflicts most of these countries, and many in Asia,
Africa, and Eastern Europe as well, and of the wrenching adjustments
that they are finding it necessary to undertake.
THE NATURE OF THE PROBLEM
Recent Developments in the Debtor Countries

Although there had been previous isolated cracks in the international debt terrain, it was not until 1982 that the problem erupted in
dramatic proportions. In August of that year, Mexico announced that
it was unable to meet its debt obligations to foreign creditors, although it was taking steps to rectify the situation. In response, the
U.S. Government mounted a rescue operation, involving the creditor
banks, the International Monetary Fund (IMF), and other creditor
governments. The package included a strict program of adjustment
for the Mexican economy and a rescheduling of much of the debt.
Nervous banks began to cut back lending to other countries that appeared to be heavily indebted, with Brazil the most obvious target.
As long as the banks had been willing to continue lending, the
debtor countries had had the foreign exchange necessary to continue
servicing their accumulated debt, i.e., making scheduled payments of
interest and amortization of principal. As the banks cut back, the
debtors found debt-service obligations increasingly difficult to meet.
One by one, Brazil, Argentina, and many other debtor countries
found it necessary to seek debt relief from their creditors, while implementing programs of economic adjustment monitored by the IMF.
The most important result of these programs of adjustment has
been a sharp improvement in trade balances, so that interest pay-




71

merits do not have to be met entirely out of new loans, but can be
largely met out of foreign exchange earnings from international
trade. In 1983 the adjustment efforts of several of the most troubled
debtors were successful to the point of achieving significant surpluses
in their balances of trade. By the end of the year the situation looked
considerably brighter, especially in Mexico. If all concerned parties
continue their efforts, and there are no unforeseen calamities, the
system can be expected gradually to work its way back to normalcy.
The increases in debtors' trade balances have been achieved largely by cutting imports. Cutting imports is the only practical way of
achieving a large increase in the trade balance in a short period of
time. But, past a certain point, it is difficult to sustain. It means that
the population's standard of living is falling, inventories of raw materials and spare parts have been exhausted, and investment is at a
standstill. In some cases, inadequate supplies of imported inputs
have forced firms to curtail production, even firms producing for
export markets. Beginning in 1984 further progress will depend most
critically on expansion of exports, rather than further contraction of
imports. Only then will adjustment be compatible with a world of
economic growth.
Liquidity Versus Solvency

Central to an analysis of the current debt problem is the distinction between liquidity and solvency. Because countries do not go out
of business* as do firms, the distinction is not absolute but is rather a
matter of degree. A country might be defined as insolvent if it is
likely to find servicing its debt increasingly difficult over time, and
eventually to have to default. A country is merely short of liquidity if
its economy is believed to be fundamentally sound and its debt-servicing difficulties are believed to be temporary. In that case, continued
lending to keep the country liquid is justified, so as not to cause unnecessary damage to the local economy, and so as not to risk more
drastic solutions, with their adverse economic and political repercussions. In the case of insolvency, however, there would be no point in
the country making it through another year, only to face the same
difficulties next year that much further into debt; more drastic solutions would be called for.
Argentina, Brazil, and Mexico are the three debtor countries that
have dominated the discussion, not only because of their size, but
also because of the acuteness of their financial distress. One indication of their difficulties is that in all three cases, debt-service obligations (interest and amortization, including short-term debt, as originally scheduled) exceed 100 percent of exports of goods and services. This means that even if the countries could somehow cut their
imports to zero, their export earnings would not be sufficient to serv-




72

ice the debt in the absence of continued new lending. But many
healthy, developing countries borrow abroad to finance their development, and would be hard put to meet their debt obligations if for
some reason they were suddenly cut off from new lending. Furthermore, debt-service numbers are particularly sensitive to yearly fluctuations in interest rates. A longer term measure of "how far in over
their heads" the debtor countries have gotten is the ratio of debt to
exports. This ratio is reported in the first row of Table 2-4 for Argentina, Brazil, and Mexico taken together. The ratio increased rapidly between 1981 and 1982, and now exceeds 300 percent. If the
debt/export ratio were expected to continue to increase in the
future, the countries could be considered insolvent.
ORIGINS OF THE PROBLEM

The solvency issue is analyzed below. But to evaluate the future, it
helps first to recount the past.
The 1970s: Incurring the Debt

The present pattern of lending to third world countries, with its
heavy concentration on bank lending, is only 10 years old. In the
aftermath of the 1973-74 oil price shock, banks "recycled" billions of
dollars of savings that the OPEC countries could not in the short run
absorb. World inflation rates were high and real interest rates very
low—even negative—through the remainder of the decade, signaling
a high level of savings in search of investment opportunities. The
funds went, not to all the third world countries that were having difficulty paying their higher oil bills, but mainly to those judged to
have good prospects for future growth, and thus good prospects for
full repayment of the debt.
This lending seemed sensible at the time. The high world inflation
rates and low real interest rates meant it was advantageous for the
countries in question to borrow, and that servicing the debt did not
look difficult. A high level of indebtedness is not necessarily a source
of concern, as long as the borrowing countries are expected to grow.
Corporations whose income is expected to grow in the future often
have a high ratio of debt to earnings. Countries do the same. The
United States in the 1880s had debt/export ratios as high as those in
Table 2-4. Nor were the banks* expectations of high growth rates in
the debtor countries in the 1970s disappointed. The rate of growth
of exports from 1975 to 1980 was as great as the rate of growth of
debt, in Argentina, Brazil, and Mexico taken together. Thus the key
measure, the debt/export ratio, did not rise during this period.
Prior to 1970, private capital flows to third world countries had
predominantly taken the form of foreign direct investment, bonds
issued for specific projects, and short-term trade credit for specific




73

imports. The pairing of loans to projects has the virtue of ensuring
that the sum of the lending equals the sum of the investment. The
bank lending of the 1970s was more often for general balance of payments financing. There is nothing wrong with this in itself. But it allowed total lending to exceed total project investment. The fact that
a large number of banks were involved, and that good aggregate statistics on lending did not at first exist, added to the confusion. The
banks may not have realized the extent of their collective investment.
The debtor countries also made policy mistakes. The mistakes fall
into two broad categories: overexpansion of demand and overvaluation of currencies. Both kinds of mistakes led to excessive trade deficits and therefore excessive borrowing to finance those deficits. But
beyond this observation, generalization is difficult. In many countries
the government sector expanded too quickly, especially in the form
of credit to inefficient state enterprises. Often government deficits
were monetized, and the currency was not devalued fast enough to
keep up with inflation; then the loss in competitiveness of export industries led to trade deficits that were financed by borrowing from
abroad. The end result was the same as when the governments financed their deficits by borrowing from abroad directly. Though
much of the money was used for profitable investment, some went to
unwise projects, to consumption, and to capital flight out of the
countries involved.
In some countries, a capital inflow and consequent real appreciation of the currency were the unintended effects of favorable developments. For example, the discovery of oil in Mexico brought about
an increase in indebtedness—financing the investment necessary to
develop the oil. Furthermore, the monetary inflow added to inflationary pressures, and the loss in price competitiveness had an adverse
effect on the exports of other industries, especially the manufacturing
sector on which previous hopes for growth had been pinned.
In other countries the simultaneous adoption of an array of monetarist and free market policies did not prevent indebtedness. Monetary stabilization made the country's assets seem attractive to hold,
trade liberalization increased the trade deficit, and removal of capital
controls allowed foreign capital to flood in. In several countries, real
overvaluation of the currency was an intentional element of the plan
to reduce inflation quickly. The magnitude and duration of the loss
in export competitiveness that followed were not intentional.
1980-82: A Change in the International Environment

As of 1980, there was little reason to doubt the ability of most of
the debtor countries to sustain high rates of growth. If the international economic environment had remained favorable, it is possible
that the debtor countries could have gone for years without having to




74

adjust their policies. But beginning in 1980, they were buffeted by
several blows not of their own making. First, inflation rates fell and
real interest rates rose in the United States and in other countries.
Because the percentage of the debt that was short term had been increasing, and most of the rest carried floating interest rates, the rise
in the market rate of interest showed up quickly in debt-service requirements.
Second came the 1980-82 world recession. The export earnings of
the debtor countries fell sharply. The demand for the primary products that many of the countries produce has always been highly sensitive to income in the industrialized countries. The years 1981 and
1982 saw sharp drops in the prices of these products relative to
goods produced in the industrialized countries. In addition, the nontraditional exports that had grown rapidly in the 1960s and 1970s
were hurt by the increased application of protectionist measures in
the industrialized countries. Protectionist measures sometimes operated to limit exporters to their past levels of sales, in which case exports from the "new arrivals" in the market were hurt disproportionately. In Argentina, Brazil, and Mexico, total export revenue fell
about 8 percent in 1982 in dollar terms.
A third factor that contributed to the debtors' loss in export revenue was the large appreciation of the dollar. The strength of the
dollar was in particular a source of the fall in primary product prices
when expressed in dollars, which is the appropriate measure because
most of the debt is denominated in dollars.
A fourth factor for some countries was the decline in dollar oil
prices after 1981 (which in turn derived partly from the other three
factors). The oil price decline of course helped the oil-importing
countries, which are the majority. But it added to the list of problem
debtors a number of oil-exporting countries, OPEC members such as
Venezuela and Nigeria, as well as nonmembers such as Mexico.
The loss in export earnings attributable to the world recession
shows up immediately in the denominator of the debt/export ratio.
The higher interest payments show up immediately in the current account deficit, which in turn shows up over time as a rise in the
numerator of the debt/export ratio. As seen in Table 2-4, the ratio
rose sharply in 1982.
It is worth noting that virtually all the major Latin American countries got into trouble, the oil exporters as well as the oil importers,
those that followed monetarist and free market policies as well as
those that increased the money growth rate and expanded the role of
the government in the economy. This suggests that in retrospect the
key factor, which they all shared, was getting deeply into debt in the
first place.




75

TABLE 2-4.—Debt/export ratios for Argentina, Brazil, 2nd Mexico aggregated, 1974-83
<
Item

1974

1975

1976

1977

1978

2.1

(1) Debt/export ratio

2.6

2.8

2.7

2.7

3.4

4.3

4.9

6.6

7.6

8.9

5.0

0.6

1979

2.7

1.8

2.8

1980

2.4

1981

2.7

1982

3.2

1983

3.2

Billions of dollars
(2) Interest payments

.

{3) Trade deficitl
(4) Debt2

43.4

52.5

63.9

75.7

95.0

10.3
6.6
118.7

15.1
10.4

22.6
7.8

143.2

185.1

10.5

12.2

28.4

?67

-6.5

-?0.3

205.3

213.9

Percent
(5) Implied interest rate (2)/{4)
(6) Trade deficit/debt (3)/(4)
(7) Current account deficit/debt (5)+ (6)...
(8) Change of exports to next period

6.2

6.5

6.7

6.5

6.9

8.7

7.8

0.8

1.9

5.6

17.5

17.0

23.7

23.4

14.5

-2.8

16.6

22.8

7.3
18.6

8.8
30.1

7.3

4.2

14.2

17.8

16.4

34.6

16.5

=7.9

13.8

12.2

-3.2

-9.5

10.7
4.6

2.8
11.5

1

Trade deficit on goods and services excluding interest.
Gross debt including short-term debt.
Sources: International Monetary Fund, Morgan Guaranty Trust Company of New York, and Council of Economic Advisers.
2

It is, however, true that South Korea and other Asian countries
that had become as indebted as many of the Latin American countries, as measured by debt/output ratios, encountered less severe
problems in the 1980s. What distinguishes South Korea and other
Asian debtors from most Latin American countries is not the degree
of government intervention in the domestic economy, but the degree
of export-orientation. Exports of goods, services, and private transfers are 44 percent of GNP in South Korea, as the result of 20 years
of vigorous export promotion. By contrast they are 17 percent of
GNP in Mexico, 16 percent in Argentina, and just 8 percent in Brazil.
Indeed, of the major Asian debtors, the one to run into the most serious problems, the Philippines, also has the lowest ratio of exports
to output. While many other factors are relevant, a debtor country
with a high ratio of exports to GNP is less likely to get into debtservicing difficulties than an otherwise similar debtor country.
WILL DEBT/EXPORT RATIOS IMPROVE?

Argentina, Brazil, and Mexico are all expected to receive new loans
in 1984. One point of view is that this is throwing good money after
bad, that the loans will never be repaid, that the problem is one of
insolvency rather than illiquidity. According to this view, the present
case-by-case approach is unrealistic, and should be replaced by some
sort of general write-down of the debt. This view is accompanied by
widely ranging degrees of sympathy for the debtors. Some observers
call for a new agency to buy the written-down debt and extend more
favorable terms to the debtors. Others believe that the countries
should be left to fend for themselves.




76

An evaluation of the insolvency versus illiquidity issue is critical.
The question is what debt/export ratios are likely to do over the
course of the next decade. Ever-rising debt/export ratios imply insolvency. Ratios that decline over time, and eventually reach reasonable
levels, imply that the difficulty is only one of liquidity.
The debt/export ratio will decline if the rate of growth of debt is
less than the rate of growth of exports. The growth of the debt can
be identified with the current account deficit. (In the past, current account deficits could also to some extent be financed by foreign direct
investment and temporary drawing-down of international reserves. In
the long-term future, a successful resolution of the debt problem
would include a revival of foreign direct investment. But, as of 1984,
in many countries there is now little likelihood of a continuation of
these flows.) The current account deficit consists of interest payments plus the deficit in merchandise trade and non-interest services
and transfers. Rows 5 and 6 in Table 2-4 report interest payments
and the trade deficit, respectively, each as a percentage of the level of
the debt. If the expected rate of growth of exports is greater than the
sum of these two numbers, i.e., greater than the current account/
debt ratio reported in row 7, then the debt/export ratio can be expected to decline over time. This criterion was easily met by the 25
percent average annual growth rate in exports that prevailed from
1975 to 1980.
The sharp increases in interest rates after 1980 made the criterion
much more difficult to meet. If the trade balance had remained in
deficit or had been zero, the criterion would not now be met. But
Argentina, Brazil, and Mexico succeeded in switching their trade balances from deficit to surplus by 1983. Comparing expected export
growth with the average interest rate being paid on the debt (the
number in row 5, 12.2 percent in 1983) alone would be too strict a
criterion. It would not give the countries credit for the adjustment
they have accomplished. But the total current account deficit/debt
ratio in row 7 was only 2.8 percent in 1983. This is a more reasonable target against which to compare the rate of exporj growth.
What is export growth expected to be in coming years? The
answer depends on the growth rate in the industrialized countries,
among other factors. Even assuming the industrialized world's real
growth rate has now returned to that of the late 1970s, there is little
likelihood of the growth rate of export earnings returning soon to
the 25 percent average annual rate of the earlier period. The quantity of debtor country exports demanded is expected to respond less
favorably to this recovery than to past recoveries, in part because in
recent years the debtors had come to rely to a greater extent on exports to each other and to OPEC, and strong recovery in the near




77

term is expected only in the industrialized countries. But, allowing
for some improvement in the dollar prices that the debtor countries
are paid for their products—and the improvement might be large
over the next few years if the dollar depreciates—there does not
seem to be much doubt that the rate of growth of export revenue
will exceed 2.8 percent by a comfortable margin in 1984 and into the
indefinite future. Thus there is not much doubt that the debt/export
ratio will decline. Eventually, as export growth and lender confidence
are restored, the debtors can be expected to return to the trade balance deficits appropriate to developing countries.
SHARING THE BURDEN

Because the debt problem seems to be one of liquidity rather than
one of solvency, i.e., continued lending will permit exports to grow
more quickly than the debt burden, it is important to keep the lending going. Chart 2-6 illustrates the amount of foreign exchange available to Argentina, Brazil, and Mexico taken together. In the 1970s
imports exceeded exports, that is, they ran trade deficits. Because the
prospects for future growth looked good, voluntary private lending
was sufficient to finance both the trade deficit and interest payments
on previously incurred debt. By 1983 interest payments had become
very large and—because of worsened prospects—banks had become
reluctant to extend enough new lending to cover the interest payments, let alone any trade deficit. It was only as part of a cooperative
effort among the debtors, banks, industrialized country governments,
and the IMF that the debtor countries were able to get through the
year. The next four subsections consider in turn each of the four parties to this cooperative effort.
Adjustment by the Debtor Countries

By far the greatest share of the burden was borne by the debtors
themselves. Between 1981 and 1983 the three Latin American countries taken together succeeded in improving their aggregate trade
balance in goods and services (excluding interest) by $28 billion. In
the larger debtor countries, most of the change was accomplished by
cutting imports sharply, mainly by contracting income and expenditure, although partly by devaluation and other methods. From 1981
to 1983 imports were slashed about 52 percent in Argentina, 30 percent in Brazil, and 66 percent in Mexico. All three countries have had
to suffer severe recessions in order to reduce expenditure on traded
goods. Real GNP has been falling rapidly. In these and other countries, unemployment is very high, and the standard of living of most of
the population, including the middle class, has deteriorated sharply.




78

Chart 2-6

Sources and Uses of Foreign Exchange:
Argentina, Brazil, and Mexico Aggregated
Billions of dollars
80
Sources

Uses

Sources

70

Uses

60

50

40

30

20

10

1976

1982

1983

Notes:
Capita! Inflow/Outflow: Nonbank long-term lending from private sources and non-debt-creating
flows {such as foreign direct investment); net (of capital flight).
Official: Long-term borrowing from official sources, official transfers, and reserve-related
liabilities (such as loans from the Bank for International Settlements).
IMF: Use of Fund credit.
Services:' Net payments for services, excluding interest, less private transfers.
Source: International Monetary Fund.

Calls for solutions to the debt problem through adjustment by the
debtor countries must acknowledge the fact that an enormous
amount of adjustment is already taking place. Indeed, it was the large
swing in the trade balance from deficit to surplus that allowed the
debt/export ratio to begin falling.
New Bank Lending

As can be seen from Chart 2-6, the increase in the debtor countries* trade balances in 1983 was still not enough to pay for all of the
interest they owed. In other words, most of them ran current account
deficits. The largest source of financing of the deficits was the banks.
New bank lending to Argentina, Brazil, and Mexico in 1983 was
about $9 billion.




79

The role of the banks has been controversial. One commonly expressed point of view is that the banks made unwise loans, and they
now deserve to suffer the consequences. A related viewpoint is that,
regardless of whether in the 1970s one could have foreseen the debt
crisis, a necessary part of the discipline of the marketplace is the
taking of losses when things go wrong, unmitigated by help from national or supranational government institutions. Proponents of this
philosophy will be skeptical of solvency calculations like those in
Table 2-4. They may ask why it is necessary for the IMF, and the
United States and other governments, to get involved, if the loans
are profitable and repayable.
In the current international financial system, an individual bank,
particularly one of the many smaller banks, has an incentive to discontinue new lending to a problem debtor. A new loan adds to the
amount of capital the bank has at risk. Yet—if the bank's share is
small relative to the total—a new loan does not visibly add to the
debtor's ability to remain current in its payments on its previously incurred debts. If all the banks, as part of a package, continue new
lending, this does add significantly to the ability of the country to
service its debt on schedule. But an individual bank has no incentive
to take into account that its actions might contribute to the failure of
the package, and thus precipitate the default that it fears. Left to
itself, the bank would be a "free rider," allowing the quality of its
portfolio to benefit from the new loans of others, without putting up
any new money itself. This free-rider problem is one justification for
a role for the IMF and other public institutions.
The International Monetary Fund

The IMF is the third of the four legs, after the debtors and the
banks, on which responsibility for managing the debt problem rests.
In 1983 the Administration sought, and eventually won, congressional approval for the U.S. share of an increase in resources for the
IMF.
The IMF lends money to any of its 146 member governments that
are in balance of payments difficulty. No member has ever defaulted
on an IMF loan. In the past the two biggest borrowers have been the
United Kingdom and the United States.
The IMF has increased total lending in the 1981-83 period of financial distress in the third world and tight liquidity worldwide, as it
did in the aftermath of the 1973 oil shock. However, the magnitude
of the resources supplied by the Fund is often less important than its
role as a catalyst. In the past this has meant giving a "seal of approval" to countries that have agreed to follow particular programs of
needed policy changes, enabling them to borrow from banks and
other sources. In the financial packages of the past 2 years, the Fund




80

has gone a step further. In these cases, as a precondition to the IMF
stamp of approval to a particular debtor country and to the availability of IMF resources, not only must the country agree to a set of policies, but the banks to which the country is indebted also must agree
to extend new loans. In this sense, the IMF is "bailing in" the banks,
rather than bailing them out. Chart 2-6 shows that the total amount
of Fund lending to Argentina, Brazil, and Mexico in 1983, about $4
billion, is less than half the amount of new bank lending, which is in
turn less than the reduction of net imports achieved by the three
countries.
In recent years, the Fund, recognizing that many countries' balance
of payments problems require more than short-term stabilization
policy and short-term financing, has at times extended financing for
longer term structural adjustment. However, longer-term development loans remain the special province of the Fund's sister institution, the World Bank. Neither institution offers substantially concessional interest rates. Only the World Bank affiliate, the International
Development Association (IDA), provides "soft" loans to poor countries. The recipients of IDA loans are not the debtors with which this
chapter has been concerned. The debtors were rapidly growing
economies until recently. Most of the IDA recipients are African and
Asian countries that are poor and have always been poor. They do
not have big debt problems because banks in the past have not been
willing to lend to them.
Thus the purpose of the IMF is neither to bail out banks, nor to
give foreign aid. The IMF is rather, as the President has described it,
"the linchpin of the international financial system."
The Role of National Governments

The fourth leg in the cooperative effort to resolve the debt problem, after the debtor countries themselves, the banks, and the IMF, is
the governments of the creditor countries. Besides supporting the
IMF, there are two ways in which the governments play a crucial role
in the process: direct credit and trade policy.
In a variety of ways, credit is extended directly by governments to
the debtors that are the most afflicted and the most important to
them. First, a crisis sometimes comes up so quickly that an IMF package cannot be assembled in time. Then the Bank for International
Settlements (the "central bank for central banks" in Basle, Switzerland), or monetary authorities in the industrialized countries acting
on their own, may extend a short-term "bridge loan," to tide the
debtor over until the longer term financing and adjustment program
are in place.
Second, most industrialized countries have government trade
credit agencies that grant short-term trade credit to countries buying




81

their exports. Many U.S. firms that normally export to the debtor
countries, especially Mexico and Brazil, are currently unable to do so,
as trade credit from private sources has disappeared. The U.S.
Export-Import Bank, as currently constituted, has a mandate to raise
its levels of credit in these circumstances, when reasonable assurance
of repayment exists. Such credit simultaneously increases the ability
of U.S. firms to export, and the ability of the debtor countries to
import. Other wealthy countries* trade credit agencies are granting
corresponding credits for their own firms' exports to the large debtor
countries.
Third is the Paris Club, a forum where debtor countries can negotiate debt-relief terms on credits extended by, or guaranteed by, official government agencies. Paris Club rescheduling, along with the
other forms of direct credit from national governments, is a significant element in the financing picture for many of the problem debtors.
Government financing for Argentina, Mexico, and Brazil, was
about $3 billion in 1983. This amount, like the IMF lending, is much
smaller than the shares of the burden borne by the banks and the
debtors themselves, as Chart 2-6 shows.
In the longer run, more important than the role of the national
governments in lending may be their role in trade. Currently, for the
debtor countries to meet their debt obligations, they must necessarily
run trade surpluses. Up until now they have mainly been cutting imports, but in the future they will have to boost exports. Even in the
short run, the promise of future export growth is necessary to keep
private capital flowing in.
In order for these countries to export, the industrialized countries
must import from them. Real growth in the industrialized countries is
the most important determinant of imports from the debtor countries. The 1983 U.S.-led worldwide recovery was the best possible development for the debt problem. While policies that bring down real
interest rates and sustain the recovery are desirable in any case, their
implications for the debt problem make them doubly desirable.
Trade policy in the industrialized countries is the second most important determinant of imports from the debtor countries. The industrialized countries have a variety of tariff and nontariff barriers
against imports from these countries. It would be inconsistent for the
industrialized countries to expect the debtors to meet their debt obligations, and at the same time expect their trade balance with the
debtors not to turn negative. It is essential to the successful resolution of the current international debt problem that the industrialized
countries not shut out the products that these countries wish to sell.




82

EASING THE DEBT-SERVICE BURDEN

The soundness of the current four-way strategy, and its success to
date, do not mean that future crises, even major ones, cannot occur.
It would take a major unforeseen event, such as a sudden end to the
world recovery, to change the outcome of the debt/export calculations; but it might take somewhat less than that for the four-way cooperation to fall apart.
The breakdown of the strategy could hypothetically come from
either of two directions: (1) declaration of default and withdrawal of
lending, by nervous banks, or (2) suspension of payments or even repudiation of the debt, by suffering debtor countries. Both of these
worst-case scenarios are unlikely. Nevertheless, there is an undesirable all-or-nothing element to the present system. From the viewpoint
of the creditor nations, a default or repudiation means that the value
of the loans drops essentially to zero. From the viewpoint of an individual debtor country it might mean ostracism from the world system
of trade and finance. Not only would many years pass before the
debtor could resume the long-term borrowing necessary for economic development, but it would be subject to legal entanglements and
probably cut off even from the short-term banking services necessary
to carry on trade. Ways might be found to reinforce the current strategy that, although not necessarily altering the distribution of gains
and losses in an average sense, would take some of the instability out
of the system.
Credit Terms Versus the Level of Financing

One way to ease the burden on the debtor countries would be to
increase the level of financing, and thus allow them to import more.
The obvious drawback to allowing too high a level of financing is
that it leaves the accumulated debt that much higher at the end of
the year and reduces the pressure on the country to adjust.
There is a more promising alternative to ease the burden of adjustment that is being implemented for the case of Mexico in 1984. The
banks, rather than increasing new lending to Mexico in 1984, are reducing it below 1983 levels, but are agreeing to lower the interest
rate and loan fees charged. This tradeoff reduces the banks' total exposure relative to what it would otherwise be, and at the same time
increases the probability that they will eventually be repaid in full.
Mexico's financial position is improved because, for a given trade
surplus, lower interest payments mean a lower current account deficit
and thus a lower level of indebtedness at the end of the year.
Any easing of terms on bank lending must be tied to good performance on the part of the debtor. If the criterion for granting reduced interest rates were the seriousness of the country's difficulties,




83

as measured for example by debt-service figures, then the incentives
facing the debtor governments would be perverse. Reducing the
costs of economic mismanagement can make it more likely to occur.
One possibility is to use as the criterion an improvement in the trade
balance to the point of a substantial surplus in the balance on goods
and (non-interest) services. This would ensure that the benefit is limited to those countries that have serious debt problems and have
taken the necessary steps to adjust.
Expenditure-Reducing

Policies Versus Relative Price Policies

The level of financing and the level of interest payments together
determine the trade surplus that a debtor is obliged to run to generate the foreign exchange needed to make interest payments. These
levels still leave open the question of whether to attain that trade surplus through high levels of exports and imports, or low levels of exports and imports. The course up until now has been closer to the
latter: expenditure on imports has been cut, largely through cuts in
government expenditure and in national expenditure generally. Both
Mexico and Brazil appear to have cut imports in 1983 below the
levels that had been agreed upon with the IMF. The price has been
low levels of output, income, employment, consumption, and investment. Particularly in the cases of the larger countries, where imports
are a small share of expenditure, cutting expenditure is an inefficient
way of cutting net imports.
The alternative strategy is to slow the rate at which budget-cutting
and other expenditure-reducing policies are implemented, and to
substitute policies that raise the prices of traded goods relative to the
prices of nontraded goods. Such "supply-side" policies would provide the incentives for labor and capital to shift into the production
of the now more profitable traded goods. (In the case of Brazil, for
example, a shift of resources into export production equal to 4 percent of gross domestic product would itself be enough to pay all the
interest on the debt.) At the same time, such policies would provide
the incentives for consumers to switch expenditure away from traded
goods. The trade balance, which is the difference between the production and consumption of traded goods, would increase without a
drastic decline in the level of output.
The obvious way to raise the prices of traded goods relative to
nontraded goods is to devalue the currency. Devaluations cause immediate corresponding increases in the prices of traded goods, at
least in the case of agricultural and mineral products. But there is no
reason why devaluations need to be reflected as fully or as quickly in
wages and the prices of nontraded goods. It is always easier to provide firms the incentive to export by reducing wages relative to the




84

prices of traded goods, rather than by reducing wages relative to the
general price level.
Three arguments are heard against an approach of substituting
some increases in the relative prices of traded goods for some decrease in the level of expenditure. The first is that devaluation is contractionary because of its negative effects on real wages, the real
money supply, and the balance sheet of firms with dollar-denominated liabilities. But this argument applies more strongly to the approach of attaining a given trade surplus through expenditure reduction than to the relative-price approach.
The second argument is that devaluation is a ''beggar-thy-neighbor" policy that is unlikely to be effective when other countries are
trying to do the same thing. This argument, however, applies equally
to the alternative expenditure-reduction approach. In other words
both the "contractionary'* and "beggar-thy-neighbor" arguments are
really arguments for allowing smaller trade surpluses through increased financing; they are not arguments about the best way to
attain a given trade surplus.
The third argument is that devaluation would result in a higher inflation rate than would expenditure reduction. Inflation is undesirable, and overexpansionary policies in the past were to some extent
responsible for both the inflation and the debt problem. But it does
not necessarily follow that there is an ironclad connection between
continuous progress on the inflation problem and progress on the
debt problem. The need to generate foreign exchange to meet interest obligations and the need to put a limit on the rate of decline of
production, consumption, and investment, would seem to be absolute
constraints. This calls for a judicious mix of policies that reduce expenditure and policies that change relative prices.
CONCLUSION
The strong U.S. recovery is creating jobs both at home and
abroad. It is helping to pull the other industrialized countries out of
recession, and is providing markets for the exports of the debtor
countries as well. For the first time since the 1973 oil shock, Canada,
Japan, and the European Community are all running current account
surpluses. Many of the debtors are showing sharply improved international payments positions; a few such as Mexico have even attained
current account surpluses. The United States is acting as an engine
of growth in the world economy.
The composition of the recovery remains lopsided as a result of
high real interest rates. If real interest rates can be brought down in
the United States, it will alleviate the pressure for capital inflow and




85

for current account deficits vis-a-vis Japan, Europe, and other trading
partners. At the same time, lower real interest rates would alleviate
the debt-service burden on the debtor countries, thus reducing the
trade surpluses that they must run and making things easier for all
concerned.
In the meantime, the greatest danger, in the United States as elsewhere, is that the desire to boost exports and reduce imports will be
reflected in protectionist measures. The only sound way to improve
the U.S. trade balance is to adopt macroeconomic policies consistent
with a recovery in which all sectors of the U.S. economy share. The
only sound way to promote world trade is to adopt policies consistent with a recovery in which all members of the world economy
share. In particular, it is essential to the favorable outcome of the
debt problem that the debtor countries be allowed to increase exports to the industrialized countries. The liberal world trading system
can only lose if its members resort to heightened barriers to the international flow of goods, services, capital, and labor. All parties can
only gain if the debtor countries are restored to health.




86

CHAPTER 3

Industrial Policy
SHOULD THE UNITED STATES adopt an industrial policy? Proponents argue that such a strategy is necessary to revitalize our manufacturing sector. They claim that U.S. manufacturing has done
poorly compared with the manufacturing sectors of other countries,
and that we are losing our international competitiveness. These
claims have led to the perception that manufacturing's share of our
economy is eroding and that we are "deindustrializing."
To reverse this alleged decline, some industrial policy advocates
propose that the government encourage new high-technology industries and help older industries regain their former strength. They
also recommend that the government assist declining industries to
adjust more smoothly to lower levels of output and employment.
Others propose government aid to prevent a decline in selected basic
industries.
Industrial policy solutions seem attractive to observers who think
that such policies have contributed to Japan's emergence as a major
economic power. Since World War II Japan has had rapid growth in
manufacturing output, productivity, and exports. The main sources
of this growth have been high rates of saving and investment, the migration of workers from farms to factories, and the adoption of
modern technology. In addition, the Japanese government has used
an array of tools to encourage certain industries to develop and
others to adjust to decline. Some observers argue that unless the
United States adopts an industrial policy of its own, Japanese growth
will contribute to U.S. decline.
In this country, industrial policy advocates have advanced several
proposals that would increase the government's role in directing resources into or out of specific industries. First, there would be a central agency to shape the Federal Government's industrial policy.
Second, councils including representatives of business, labor, and
government would gather information on specific industries and
forge a consensus strategy. Third, a Federal development bank would
invest money in industries deemed to receive inadequate capital from
private financial markets. Fourth, declining industries would receive




87

government aid and import protection to adjust to new economic
conditions.
Some industrial policy advocates claim that the United States already has an industrial policy. They argue that such policies as trade
protection and subsidies for exports and research and development
are components of an industrial policy simply because they affect the
composition of industrial output. The difference between our present
policies and what they advocate, they say, is that the former is ad hoc
industrial policy while the latter is coherent.
It is true that many Federal policies affect industrial output. But
the argument about whether they constitute industrial policy, like all
arguments about definitions, is pointless. What is relevant is whether
the proposals of industrial policy advocates are a good idea. Should
the U.S. Government have a larger role than it now has in deciding
the composition of U.S. industry?
The answer is "no." An industrial policy would not solve the problems faced by U.S. industry and would instead create new problems.
Industrial policy has a mixed record in Japan and has been unsuccessful in Europe. Most of the problems of U.S. industries can be
solved with prudent monetary and fiscal policies. The best way to
deal with the many changes in demand that occur in a dynamic economy is to allow investors and workers to respond to such changes.
Because they reap the rewards of their successes and bear the costs
of their failures, investors will seek out industries that pay the highest
rates of return. Similarly, workers have incentives to work where they
can earn the highest wages. The free movement of capital and labor
in response to new profit opportunities and wage differentials increases growth. Government allocation of investment that ignores
market signals usually stunts growth by diverting labor and capital
from more productive uses.
IS THE UNITED STATES DEINDUSTRIALIZING?
Although selected manufacturing industries face serious problems,
the United States is definitely not "deindustrializing." Table 3-1
shows that the output, employment, and capital stock of U.S. manufacturing grew from 1950 through 1980. Moreover, manufacturing's
share of total output and capital stock was roughly constant between
1960 and 1980. The manufacturing share of total employment progressively declined, but the decline is a sign of relative productivity
growth, not a sign of industrial demise. There is no evidence of
either an absolute or relative long-run decline of U.S. manufacturing
output.




88

TABLE 3-1.—Size and share of the manufacturing sector, selected years 1950-80
Manufacturing
Output
(billions
of 1972
dollars)

Year

Employment
(millions)

Share of total
Capital
stock
(billions
of 1972
dollars)

Output

Employment

Capital
stock

Percent
1950

131.1

15.2

106.4

24.5

33.7

28.4

I960

171.8

16.8

140.4

23.3

31.0

25.8

1970

261.2

19.4

202.2

24.1

27.3

23.5

351.0

20.3

287.0

23.8

22.4

23.4

1980

.

Sources: Department of Commerce (Bureau of Economic Analysis) and Department of Labor (Bureau of Labor Statistics).

It is true that the composition of U.S. manufacturing has changed
substantially over the past two decades. As Table 3-2 shows, between
1960 and 1980 U.S. manufacturing shifted away from capital-intensive, labor-intensive, and resource-intensive industries toward hightechnology-intensive industries. High-technology industries are defined as those with a high ratio of research and development spending to value added. (Value added equals industry revenue minus the
cost of inputs purchased from other industries.) In high-technology
industries, value added increased by more than 40 percent, and employment increased by more than 20 percent.
This shift in the composition of manufacturing output and the
movement of capital and workers toward other sectors is not a threat
to our economy or to our international competitiveness. Although we
commonly call some industries "basic/* the products of these industries are no more important than the products of the agricultural or
service sectors. Nor is our position in world markets endangered if
our exports shift from steel and machinery to engineering services.
Using industrial policy to halt the decline of our basic industries
would not increase growth. It would merely shift investment and employment from one sector to another. Increasing the total level of
saving and investment is the best way to increase economic growth.
TABLE 3-2.—Shares of value added and employment by industry group, I960, 1970, and 1980
[Percent of manufacturing total]
Employment

Value added
Group

1960

1970

1980

1960

1970

1980

High-technology

33

Capital-intensive

28

Labor-intensive

19

Resource-intensive

20

Source: Robert Z. Lawrence, Brookings Papers on Economic Activity, 1.1983.




89

COMPARISON WITH OTHER NATIONS

U.S. manufacturing output and employment have generally performed well compared with other major industrial nations. Table 3-3
presents manufacturing data for France, West Germany, Japan, the
United Kingdom, and the United States from 1960 to the first oil
shock in 1973, and from 1973 to 1980. The data show that the slowdown in the growth of output and employment in manufacturing
since 1973 was not limited to the United States, but also occurred in
Europe and Japan. Whatever the causes of this slowdown, it is shared
by our international trading partners, many of whom have industrial
policies.
TABLE 3-3.—Changes in manufacturing output and employment in selected industrial countries,

1960-80
[Average annual percent change]
Output

Country

Employment

1960-1973

1973-1980

1960-1973

1973-1980

France

5.0

1.3

0.5

-1.3

Germany

5.2

1.0

.9

-1.7

12.5

2.4

3.4

-1.5

United Kingdom..

3.0

-1.8

-.6

-1.9

United States

5.4

1.8

1.4

.1

Japan

Source: Organization for Economic Cooperation and Development.

The U.S. manufacturing sector grew more rapidly than most European manufacturing sectors between 1960 and 1980. Japanese manufacturing output increased most rapidly during this period, but the
difference between the Japanese and the U.S. growth rates declined
substantially after 1973. Between 1973 and 1980, U.S. manufacturing
employment grew slightly, while manufacturing employment fell in
France, West Germany, Japan, and the United Kingdom.
Some industrial policy advocates also claim that the United States
is losing its competitive edge in high-technology. Since World War
II, other countries have followed the United States in developing this
sector. As the number of producers has increased, the U.S. share of
this rapidly expanding market has gradually declined. Between 1962
and 1980 the U.S. share of industrial countries' high-technology exports fell from 30.3 percent to 23.9 percent. During the same period,
the Japanese share rose from 4.1 percent to 12.3 percent and the
German share stayed constant at about 18 percent.
However, the United States is still the leading exporter of hightechnology products. In 1980 the United States exported $7.6 billion
of high-technology goods, compared to $7.5 billion for West Germany, $4.8 billion for Japan, $3.7 billion for the United Kingdom




90

and $3.2 billion for France. In that year we were the leading exporters of office machines and automatic data processing equipment, and
professional and scientific instruments. As Table 3-4 shows, from
1970 to 1980 the real value of net exports in many high-technology
industries increased more in the United States than in Japan, West
Germany, France, and the United Kingdom.
TABLE 3-4.—Net exports in selected high-technology industries, 1970 and

1980

[Millions of 1980 dollars]

Medicinal and
pharmaceutical
products
1970

Country

France
Germany

.

Artificial resins
and plastic
materials

1980

1970

148.5

796 3

-62 2

546.1

981.4 1,573.5

1980

Electrical
machinery
1970

1980

272.5

664.0

Professional,
scientific, and
controlling
instruments
1970

1980

-72.9

-56.0

2,590.0 2,914.2 4,480.1 1,094.9

1,573.0

33.2

- 2 5 9 . 8 -779.5

1,092.0

907.6

562.5

United Kingdom

439.6 1,217.1

243.3

261.3 1,076.3

655.0

304.9

476.5

United States

575.0 1,216.9

1,635.5

3,171.1 1,378.8

169.8

966.0 3,712.7

Japan

1,315.1 3,638.1 7,230.1

Sources: Organization for Economic Cooperation and Development and Council of Economic Advisers.

PROBLEMS OF U.S. MANUFACTURING

Although U.S. manufacturing in general is not in a long-term decline, it has experienced serious short-term difficulties. In addition,
certain industries have serious long-term problems.
Macroeconomic Problems

In the short run, U.S. manufacturing, like other cyclically sensitive
industries such as housing, declined during the recent recession.
Manufacturing employment fell from its peak of 20.4 million in July
1981 to 18.2 million in November 1982. Manufacturing output declined by 12.5 percent over the same period. However, employment
has risen sharply since then, and stood at 19.3 million by the, end of
1983, while output rose 17.8 percent between November 1982 and
December 1983. As the recovery continues, manufacturing employment and output will also continue to grow. In any event, monetary
and fiscal policies are the appropriate tools for avoiding cyclical
problems. Industrial policy cannot hope to eliminate the effects of
the business cycle on manufacturing.
A second short-run problem is the high value of the dollar relative
to other currencies. The dollar appreciated 45 percent between 1980
and December 1983, after taking inflation into account. This increase
in the dollar's exchange value has put U.S. producers at a serious
competitive disadvantage in world markets. However, the problem is
not limited to manufacturing, but extends to agriculture and such




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services as construction, engineering, and tourism. As Chapter 2 explains, the solution once again lies with fiscal and monetary policies.
Problems of Basic Industries

Unfortunately, industries such as autos and steel, which have been
hurt by the recession and the rise in the dollar, also face longer run
problems. Foreign competition increased in both of these industries
during the 1970s. The two oil shocks increased the U.S. demand for
small cars, much of which was met by imports. Competition from imported steel increased as shipping costs fell and as foreign steel producers cut their prices in response to excess worldwide capacity.
During this period, management decisions may have worsened the
competitive positions of these industries. U.S. auto firms let quality
control slip, and they did not respond quickly to the shift in demand
toward smaller cars. Some observers claim that steel firms were slow
to adopt new technologies. In addition, labor costs increased more
rapidly in autos and steel than in other manufacturing industries. In
1970 hourly compensation for auto and steel workers was about 30
percent higher than the average compensation in manufacturing. By
1981 the difference had grown to 70 percent for steel workers and
50 percent for auto workers. Since then, workers in both industries
have made significant wage and benefit concessions, which may or may
not be temporary.
These industries are now going through significant adjustments. If
foreign firms continue to produce goods at lower costs than U.S.
firms, then domestic output and employment in the affected industries
will fall. The only ways to reduce the cost differentials are to increase
productivity or to reduce or even reverse the growth in real wages.
Otherwise, preserving output and employment would require a continuing subsidy from consumers or taxpayers to workers and stockholders in these industries.
Regional Problems

Employment declines in manufacturing have created serious problems because of the regional concentration of job losses. In the late
1970s manufacturing employment grew by about 1 percent a year for
the country as a whole but fell in the Middle Atlantic and Great
Lakes States. The recent recession exacerbated these regional disparities. Chart 3-1 shows the uneven distribution of unemployment
in fiscal 1983. Many of the States with high unemployment depend
heavily on basic manufacturing industries for jobs.
These State unemployment rates hide a wide diversity of economic
health within a State; real trouble spots are much smaller areas. In
Ohio, for example, the unemployment rate in Columbus was half of
Youngstown's in fiscal 1983. In Indiana, the unemployment rate in
Lafayette was half the rate of Gary's.




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Chart 3-,i

Unemployment Rates by State
in Fiscal Year 1983

Percent

H H 10t.4to17.8
8.6 to 10^3
[

|

5.7 to

8L5

Source: Department of Labor.

These small pockets of real distress persist in spite of job opportunities elsewhere because of the reluctance among some workers to
move. Many unemployed workers do move, and broad regional population changes reflect these movements. One detailed study of two
depressed areas found that among people who changed jobs, onethird found new jobs outside the region. However, many unemployed
workers in depressed areas do not move. Some are tied to their communities by financial and family commitments—working spouses,
homes that are hard to sell, and children in school. Unemployment
benefits and the hope of returning to a high-wage job near home
reduce the incentives for unemployed workers to move in order to
find new jobs.
But unwillingness to move is not sufficient to cause lengthy unemployment—workers who are unwilling to move can still find work if
their local economies are healthy. As one study shows, in regions
with healthy local economies unemployed workers from declining industries are not out of work any longer than unemployed workers
from other sectors. Geographic immobility together with depressed




93

local economies is the source of the special distress associated with
the decline in specific manufacturing industries.
For people in these depressed local areas, the shift in manufacturing
employment has been difficult. But the total amount of long-term
unemployment caused by shifts in the manufacturing sector is relatively small. Workers from declining industries who suffer long-term
unemployment are only about 2 percent of the unemployed. Other,
larger groups appear to have bigger labor market problems.
Since hardships caused by economic adjustment are often regional
problems, programs to ease adjustment should be targeted regionally. Otherwise, those in need do not get enough aid or budget costs
of the program become too large. But the prospects for regionally
specific programs are dim. Federal programs to extend unemployment benefits illustrate this problem. The original intent of the Federal program was to channel benefits to States with the highest unemployment rates. Under the current Federal Supplemental Compensation program, all States get benefits regardless of their unemployment rate. Complicated clauses in the law reduce the decline in benefits when State unemployment rates fall.
The general history of regionally targeted programs is a steady expansion of eligibility rules until all States get some portion of the
program. The prospects for a good Federal adjustment program may
be limited by the same problems that would plague industrial policy
initiatives in general—possibly deserving groups would be crowded
out by their less deserving but politically powerful competitors.
IMPLICATIONS FOR U.S. POLICY

There is no evidence of a general deindustrialization of the U.S.
economy. Over the long term, U.S. manufacturing has accounted for
approximately 24 percent of real output. Although manufacturing's
share of total employment has declined, the number of workers employed in manufacturing rose by nearly 5 million between 1950 and
1980, and productivity growth was higher than in the rest of the
economy. Nevertheless, the combination of a recession at home and
a strong dollar abroad caused manufacturing output and employment
to suffer. However, manufacturing output is currently rising almost
three times as fast as the rest of the economy.
This suggests that the most important contribution of Federal
policy to the strength of American manufacturing would be monetary
and fiscal policies that are consistent with long-term economic
growth and a sustainable trade balance. Such policies would not resolve all the problems of the few industries in long-term trouble. But




94

they would probably resolve most of the concerns that have led to
the calls for industrial policy.
JAPANESE INDUSTRIAL POLICY
Proponents of an industrial policy often use Japan as a model for
the United States. First, Japan has enjoyed rapid economic growth
since World War II. Second, many Japanese products compete successfully in export markets. Although Japan has had great economic
success, it is not clear that industrial policy contributed on net to this
success. Other features of the Japanese economy, such as the high
saving rate and the transfer of labor from agriculture to industry,
were undoubtedly more important. Net saving in Japan over the past
three decades has been over one-fifth of Japan's net domestic product. By contrast, net saving in the United States has averaged less
than one-tenth of net domestic product.
THE INSTRUMENTS OF JAPANESE INDUSTRIAL POLICY

The first step in formulating an industrial policy for an emerging
or declining sector of the Japanese economy is gathering information
and creating a consensus. To gather the information about potential
growth industries and the best way of developing them, the Japanese
government meets with outside experts and convenes councils of informed individuals from banks, trading firms, producing and consuming firms, universities, and trade unions as well as relevant government agencies.
The final product of the council process is either a general
"vision" urging private firms to develop a sector, or a specific plan to
produce certain goods by some future date. The detailed plans, however, are simply targets that the government officials and private
experts believe are both possible and desirable to meet. Japan's
economy is not centrally planned, nor is there much government
ownership of manufacturing firms. Although the government may
provide incentives to encourage the development of certain industries, it does not force individual firms to comply with its targets.
The incentives provided by the Japanese government have included tariffs or import quotas, special tax treatment, research subsidies,
subsidized loans, antitrust immunity, and administrative guidance.
During the early postwar period of reconstruction Japan had steep
barriers against all imports. Japan began to relax these barriers over
20 years ago. Since the mid-1970s, Japan's tariffs on manufactured
goods have been similar to those of the other major industrial nations, and today they are among the lowest of all major industrial nations, including the United States. However, Japanese tariffs are




95

markedly higher than average on some manufactured goods in which
Japanese producers are relatively uncompetitive.
Significant nontariff barriers continue to protect parts of Japan's
manufacturing sector. Standards and certification requirements
impede imports of automobiles and many other consumer durables.
Government procurement restrictions protect Japanese electronics
and computer industries. These restrictions have recently been relaxed somewhat but they remain significant obstacles to trade.
Special tax treatment, subsidized loans, and loan guarantees have
been used to stimulate emerging industries, and to ease the adjustment of declining sectors. Until recently, firms purchasing numerically controlled machine tools were eligible for depreciation schedules
more generous than those available for other equipment. Today,
computer software producers and investments in robotics receive
special tax benefits. Subsidized loans and loan guarantees also have
helped to develop the steel, computer, shipbuilding, and semiconductor industries, and have assisted firms in the aluminum and petrochemical industries in reducing capacity and employment.
The Japanese government has also encouraged the development of
certain industries by providing subsidies for applied research. The
work subsidized with tax dollars is usually only part of larger joint
research projects financed mainly by private firms. Japanese firms
have used joint research successfully in developing several important
products, including the 64K RAM chip.
Finally, firms in industries with temporary or permanent declines
in demand are sometimes allowed to form cartels to restrict output in
order to raise or maintain prices. Cartels have been formed during
cyclical downturns in some segments of the aluminum, paper, and
steel industries, and have also been used to maintain prices and
reduce capacity in declining industries, including synthetic fiber, ammonia, and urea. In these cases, the government has allowed firms to
cooperate in restricting output in exchange for promises by firms to
scrap excess capacity. Higher prices have often meant lower domestic
consumption, reduced exports, and either increases in imports or increased trade barriers.
This list of industrial policy tools may understate the role of the
Japanese government in the development of specific industries. Various government agencies review conditions in industries within their
jurisdiction in consultations with outside experts. If they see problems or opportunities, these agencies look for solutions and then try
to persuade the private sector to follow their advice. The advice may
be accompanied by promises of loans, research subsidies, or other
government aid. The total effect of the advice and the aid on private




96

investment decisions may be greater than the actual amounts of aid
would suggest.
PRIVATE INVESTMENT AND GOVERNMENT SUBSIDIES

These industrial policy tools—import barriers, special tax treatment, research subsidies, subsidized loans, and antitrust immunity—
may have been important in stimulating the growth of Japanese industries such as steel, shipbuilding, machine tools, and computers.
However, government financial aid to many of these industries—including steel and computers—is only a small fraction of the investments made by the private sector.
Subsidized lending by the Japan Development Bank, for instance,
averaged only 1.4 percent of total bank lending to the steel industry
between 1961 and 1970, and only 3.8 percent between 1971 and
1980. Japan Development Bank loans to the electrical machinery
sector, which includes computers and semiconducters, were only 0.6
and 0.8 percent of total bank lending to those industries during the
same periods. Although they may have been instrumental in encouraging private banks to invest in favored sectors, government loans
were not a large factor in the growth of these industries.
Furthermore, Japanese subsidies to encourage the development of
certain manufacturing industries have been only a small fraction of
total government subsidies to specific sectors. As seems to be the
case for all developed countries, by far the largest subsidies and the
highest trade barriers go to agriculture. Energy projects designed to
decrease Japanese reliance on imported oil, subsidies to small businesses, and Japan's government rail system also claim a large share
of subsidies. Subsidies to emerging manufacturing industries are
small by comparison with subsidies to these other sectors.
The sectoral distribution of the Japan Development Bank lending
program reflects these priorities. In 1981 about 37 percent of the
total loans of $4.9 billion was earmarked for energy projects. The
next largest shares went to urban and regional development, ocean
shipping, and "quality of life" projects such as pollution control.
About 9 percent or $441 million was allocated to the development of
technology, which encompasses the computer, electronics, and semiconductor industries. For comparison, plant and equipment investment in Japan in 1981 was about $180 billion, and electronic computer production was $6.7 billion.
Total spending for research and development in Japan as a percent
of GNP exceeds that of France, but is less than that of Germany and
the United States. Furthermore, in contrast to these countries, the
Japanese government accounts for a small share of Japan's total research and development expenditures, and provides less than 2 per-




97

cent of the funding for all research and development undertaken by
the business sector.
Government research and development funds in the late 1970s
have been estimated to account for 6.7 percent of total research and
development in the computer and semiconductor industries, versus
18 percent in agriculture and 28 percent of transportation research
and development. The Ministry of International Trade and Industry
(MITI), Japan's most important industrial policy agency, controlled
about 12 percent of public research and development funds in 1983,
or about $708 million, and allocated about one-half of these funds to
energy-related research and development. About $350 million went
to manufacturing industries.
Finally, Japanese government spending goes primarily to social
welfare, aid for local governments, and public works rather than to
develop emerging industries. In spite of its unique industrial policy
process, Japan allocates government support to many of the same
sectors that are favored in other advanced market economies, including the United States.
HAS JAPANESE INDUSTRIAL POLICY BEEN A SUCCESS?

Japanese industrial policy has had both successes and failures.
Some targeted industries, including semiconductor and machine
tools, are almost certainly stronger than they would have been without government support and can be claimed as successes for Japanese industrial policy. Other industries, such as shipbuilding and
steel, probably grew more quickly because of government aid, but
undoubtedly would have developed without any government intervention. However, the Japanese government has also picked losers.
Aluminum smelting and petrochemicals were favored industries 15
years ago, but the public and private investments have paid off very
poorly and now their capacity is being reduced. There are also several examples of successful industries that did not receive government
assistance, including motorcycles and consumer electronics. Nevertheless, these industries have dominated world trade in the products
they produce.
The Japanese automobile industry also received protection from
imports. But the auto industry followed a course very different from
that suggested by MITI. In 1961 MITI tried to force the industry's
many firms to merge into a few. In 1965 MITI exhorted the industry
to develop a prototype "people's" model of its product so MITI
could designate the winning firm as the single producer. In both
cases, the industry rebuffed MITI. Moreover, although import protection helped the Japanese auto industry develop, protection given
to other industries hurt the auto industry by raising the price of




98

inputs such as steel. Furthermore, the auto industry has not received
special tax treatment or subsidized loans for over 20 years. Therefore
the success of Japan's auto industry cannot be attributed to industrial
policy.
Furthermore, Japanese industrial policy did not create additional
investment. It simply directed the existing pool of savings from one
industry to another. It is possible that the industries that lost funds
as a result of government industrial policy would have been at least
as successful as the industries that received the government's blessing.
In conclusion, Japanese industrial policies have undoubtedly influenced Japan's industrial structure. However, the government and its
councils of experts have a mixed record of success. They have indeed
picked some industries that turned out to be winners in part because
of their efforts, but they also picked industries that ended up losers.
They failed to pick some big winners and they also picked industries
that would have become winners without any help. The net effect of
these policies on economic growth is not clear.
EUROPEAN INDUSTRIAL POLICIES
European economies have grown rapidly since World War II, primarily because of high rates of saving and investment, increases in
education, and migration from agriculture to other sectors. However,
many European policies that aid specific industries have been costly
failures. Large scale efforts by European governments to promote
high-technology industries have rarely produced commercially successful products. And attempts to ease the adjustment of declining
industries have generally produced little reduction in excess capacity
despite enormous government subsidies.
EUROPEAN INDUSTRIAL POLICY TOOLS

The tools used to implement industrial policies differ considerably
among European countries. In France, the country with the most
elaborate industrial policy, state efforts to develop the economy can
be traced at least as far back as the time of Louis XIV. Since World
War II, a series of 5-year "indicative" plans has set comprehensive
targets for the French economy, often with specific sectors selected
for special support. Although these targets have been voluntary, they
have been designed as a framework for French economic growth.
The government owns a large portion of France's manufacturing
and financial sectors, and thus is able to allocate resources directly
into targeted industries, projects, or companies. Most of the capital
for several emerging industries, including civil aircraft and comput-




99

ers, has come from the government. France has also used research
and development subsidies and government procurement to encourage high-technology industries. In addition, the French government
owns, subsidizes, and protects certain declining industries, including
steel. Other declining industries, such as textiles and shipbuilding,
receive subsidies and trade protection but are privately owned.
Britain does not have comprehensive economic plans or government ownership of banks and insurance companies, but government
equity involvement in heavy and high-technology industries is
common. Steel, autos, and semiconductors have received state equity
support. In addition, many declining industries have received trade
protection, manpower training grants, and financial subsidies.
As members of the European Community (EC), all the major industrial countries of Europe have common external trade barriers,
most notably in steel and textiles. But West Germany, with its relatively efficient steel industry, has been less energetic than France or
Britain in lobbying for barriers to protect declining industries. The
West German government has provided substantial subsidies for research and development, but its subsidies for declining industries are
low by European standards. There is little public ownership of manufacturing firms, but an important share of West Germany's banking
system is state owned.
LESSONS FROM EUROPE

In spite of massive aid to favored European industries such as aircraft, computers, and semiconductors, most of the firms in these industries are not commercially successful. The explanation for this
record may stem from the competing goals that governments generally pursue.
The Concorde is probably the most famous product of European
industrial policy. Built by a British-French joint venture and flown
only by their national airlines, the Concorde had cost French taxpayers $4.4 billion by 1979. At no time have revenues covered the costs
of operating the Concorde, much less the capital costs of the firms that
built it. Work on the Concorde helped develop France's aerospace
industry and may have achieved certain political and social objectives.
But, these benefits aside, the Concorde project is a clear reminder of
the costs of government encouragement of emerging industries.
The Airbus is another large scale project that has so far been a
commercial failure. Produced by a firm owned mostly by a consortium of European governments, the Airbus has been a profitable investment for the airlines that bought it, but a costly burden for the
sponsoring governments. The Airbus still requires production subsi-




100

dies despite the sale of about 350 planes. Bolstered by government
guarantees, Airbus did not follow the usual commercial practice of
collecting purchase agreements before beginning production. As a
result, early production levels were too low to benefit from scale
economies.
The French government also decided to develop an internationally
competitive computer industry in the mid-1960s. Today, neither of
France's two recently nationalized computer companies is profitable,
in spite of over $1 billion in direct subsidies, support through government procurement programs, and research and development subsidies. Many analysts conclude that the French government pursued
an unrealistic goal of self sufficiency and ignored its competitors'
comparative advantage and market share. Business decisions were
made by the government and did not always reflect commercial realities.
Britain's computer and semiconductor industries seem similarly
unable to overcome the competitive advantage of foreign producers
in the British market, despite aid programs that include equity financing, loan guarantees, and government procurement policies.
Neither the government-owned semiconductor firm nor the computer firm most heavily supported by the government is profitable.
Once again, the appeal of technological independence outweighed
economic considerations.
Aid to declining industries also reflects the sometimes competing
goals of government intervention. Efforts to ease the adjustment of
declining industries apparently slow that adjustment process, at enormous cost to European taxpayers. It appears to be difficult for governments to encourage an industry to decline sufficiently after giving
it subsidies. Government assistance to the steel, shipbuilding, and
textile industries has been designed to protect employment while
encouraging restructuring. Despite massive infusions of aid and trade
protection over a long period, there is still much excess capacity in the
steel and shipbuilding industries.
Since the establishment of the European Coal and Steel Community in 1951, steel has been the most closely regulated and protected
industrial sector in Europe. After years of import protection, subsidies, and output controls designed to raise prices, many European
steel producers continue to sustain large losses. Although steel employment in the United Kingdom fell by almost 60 percent between
1974 and 1982, and has also declined in other EC countries, substantial restructuring remains to be done.
Restructuring of the European textile industry has also not been
generally successful according to most analysts. Even when progress
has been made in reducing excess capacity and modernizing equip-




101

ment, trade barriers have remained in place. Indeed, from bilateral
quotas on cotton in the early 1960s to the current form of the Multifiber Arrangement, protection from imports has increased in scope
and intensity.
European governments may be learning from their failures. The
current French policy in electronics seems to be more competitively
oriented than earlier policies, and since 1981 the British government
has cut subsidies to declining industries. However, the French commitment to early development of a new commercial airplane suggests
a continued belief that government can outguess the market.
SHOULD THE UNITED STATES HAVE AN INDUSTRIAL
POLICY?
The perception that the United States is deindustrializing has
spurred interest in industrial policy in this country. But we are not
deindustrializing. Moreover, Japan's record with industrial policy is
mixed, and industrial policy in Europe has generally failed. Industryspecific measures are not well suited to deal with the special problems of some U.S. industries and workers. Unemployment problems in
declining industries are best solved with programs that focus aid on
individuals rather than on entire industries. Allocating resources to
different industries is best done by the market. Profit opportunities
and wage differentials give investors and workers powerful incentives
to seek out industries where their capital and labor are most valued
and most productive.
Nevertheless, some people argue that industrial policy could promote growth and smooth adjustment. Many claim that government
now fails to take account of the effects on industries of its various
policies, and that better coordination within the government would
improve the situation. Others claim that investors are reluctant to finance emerging industries because the time horizons of private investors are too short. These advocates therefore propose government
aid to help emerging industries. Still others argue that government
aid is needed for industries with learning curves, high value-added
industries, linkage industries, and industries that compete with products subsidized by foreign governments. Finally, some industrial
policy advocates argue that special aid should be given to declining
industries to help them adjust.
COORDINATING AGENCIES AND TRIPARTITE COUNCILS

Industrial policy advocates argue that current Federal Government
programs often conflict with each other. Creating a new agency and
establishing tripartite councils of business, labor, and government,




102

they say, would bring these conflicts to the attention of government
officials who would then make more judicious tradeoffs among competing goals.
Different government programs sometimes do have conflicting effects on an industry. Unintended consequences are inevitable in a
complex economy where each policy affects a large number of sectors. More important, many policies have conflicting effects because
governments have competing goals. Reducing air pollution, for example, raises the cost of producing steel and conflicts with the goal
of a more competitive steel industry.
There is little reason to believe that introducing another agency
would improve coordination. Government agencies and forums already exist to coordinate policies, and many government departments already have advisory committees to provide information on
private sector views. Additional tripartite councils and a new agency
would not necessarily be able to obtain better information than what
is already available.
Tripartite councils are proposed to promote a consensus on policy
decisions. This would strengthen the current tendency of government policy to take inadequate account of the interests of consumers
and taxpayers, who have very weak incentives to organize on any particular issue. Business and labor groups are already heavily represented in Washington. An additional agency with stronger representation
of business and labor interests would make the policy debate even
more one-sided.
GOVERNMENT DEVELOPMENT BANK

Many industrial policy proponents propose a government development bank to augment private investment in certain industries. Some
proposals include other types of aid, such as research and development subsidies to specific industries. These proponents claim that
government support is necessary because the market does not invest
enough in several types of industries—emerging industries, industries
with learning curves, high value-added industries, basic or "linkage"
industries, and industries that have been targeted by foreign governments. To supplement private capital, the proposed bank would lend
additional money to industries in these categories.
Emerging Industries

Government investment in emerging industries is said to be desirable because private investors are too risk averse or have time horizons that are too short. Therefore they invest too little in risky ventures with long-delayed payoffs.
Investors may appear shortsighted or risk averse when they cannot
capture all the returns from their investments. For example, patent




103

and copyright protection for computer software and integrated circuits is probably inadequate and may have deterred investors from
taking risks and investing their time and money in these areas. More
generally, research and development gains are often spread among
many firms, not just the firm that incurs the costs.
The solution to these problems is not government investment in
specific firms, but policy changes that improve incentives for all firms
to invest in research and development. The Administration supports
the provision of copyright-like protection for integrated circuit designs, and in 1981 supported enactment of a temporary tax credit for
research and development expenditures.
The proposal to target emerging industries suggests that government can obtain better information than the private sector. It is difficult to understand how government officials, together with private
business and labor leaders, will be able to gather more accurate information and use the information more wisely than the private
sector. The United States has numerous investors willing to finance
new ventures through equity or bank loans. Private investment analysts spend a great deal of time and effort evaluating new technologies and advising private investors on the most promising firms. Information on emerging industries is also exchanged by job shifting
among scientists and engineers who are close to the development of
new technologies. Ties between industry and the academic community also contribute to the spread of new ideas. In the United States
the private sector already has information at least as good as the proposed government councils and banks could expect to gather.
In any event, a government agency is more likely to be shortsighted and risk averse than private investors. Since politicians face frequent elections, they often have very short time horizons. A government agency is also more likely to make decisions based on the
shared expectations that are the conventional wisdom of the time;
these processes tend to neglect or reject the idiosyncratic information
that is the basis for decisions by the most successful private entrepreneurs.
Finally, government officials will often make investments based on
politics rather than economics. One country tries to develop a computer industry before it has sufficient technical workers. Other countries invest in highly visible but wasteful energy projects that private
firms think are likely to fail.
Learning Curves

In some high-technology industries, production costs drop significantly as firms gain experience. Some proponents of industrial policy
say that the government should subsidize these industries or protect
them from foreign competition to allow them to move down a




104

"learning curve." This would presumably speed up the drop in costs
and increase their ability to compete in international markets.
Learning curves may exist for individual firms, for entire industries
within a country, or for an industry in the world as a whole. If the
learning curve is at the level of the firm, the U.S. market is likely to
be far larger than the cumulative production required to advance an
individual firm along its learning curve. Moreover, choosing a single
firm to subsidize and protect in the beginning stages of a new technological development would be very risky. In every new industry
there are false starts. Having government and private experts determine the best approach to a technical problem early in the process
will generally produce a worse result than letting different firms compete to see whose idea is best.
If the learning curve is for the entire world, then the optimal strategy may be to let other countries go first and enter the industry only
after initial research and development costs have been borne by foreigners. The Japanese have profited enormously by adopting U.S.
technology.
While there may be special cases in which learning curves justify
import protection, identifying them in practice would be very difficult.
Because of this difficulty, many firms and industries would incorrectly
claim that their learning curves justify import protection or subsidies.
A similar problem arises in the Federal procurement process. Firms
sometimes claim to have steep learning curves in order to justify
becoming the only supplier to the government. Often, actual learning
curves are flatter than predicted.
In short, knowing that a theoretical case exists may be of little
practical importance. The end result of protecting or subsidizing a
high-technology industry could be a domestic industry unable to
compete in international markets. The trade protection granted to
such industries could force U.S. buyers to pay higher prices and
erode their competitive position in other markets.
Industries With High Value Added

Some proponents of industrial policy advocate redirecting investment to industries with high value added per worker. Value added is
the revenue earned above that needed to purchase inputs from other
industries. Value added is therefore the return to labor, capital, and
know-how.
Total value added or, equivalently, real income in the economy is
raised when a dollar of investment is moved from a use where its
productivity is low to a use where productivity is higher. There is no
reason, however, to believe that a dollar of investment in an industry
with high value added per worker will be more productive than a
dollar of investment in a low value added industry. What matters is




105

not the average productivity of labor or capital in that industry but
the return on one more unit of capital. When markets work properly,
investment is distributed among industries until the rate of return on
additional investment is the same in all industries. In this situation,
shifting investment from one industry to another will not raise total
real income or value added.
The same is true of reallocating labor among industries. Although
the average productivity and value added per worker differ among industries, a well-functioning labor market assures that employees will
end up in industries where their contribution to output is highest. If
this were not so, the employee would have an incentive to shift jobs in
pursuit of a position with a higher wage.
The best way to promote high value-added industries is to expand
the total capital stock of the economy. Investors will naturally seek to
put that capital to its most productive use. If our tax laws distort the
relative payoffs from investing in different uses, then it is the tax laws
that need to be changed. Incentives to save and invest, such as Individual Retirement Accounts and accelerated cost recovery, are more
likely to expand and modernize the Nation's capital stock, and thereby promote economic growth, than a government bank that merely
reallocates a fixed amount of savings from one industry to another.
Linkage Industries

Some industrial policy proponents advocate government aid to
"linkage" industries, that is, manufacturing industries whose output
is a vital input into other industries' products. Steel and semiconductors are often cited as examples of "linkage" industries. However, if
such an industry is vital, then the industries that rely on it will
demand its output. The profit motive will ensure that this demand
will be filled. If the demand can be met more cheaply by producers
abroad, then it makes good economic sense for the firms that use the
input to buy it abroad. The more uses the input has, the more important it is for the U.S. economy that the companies obtain this vital
input at the lowest possible cost. Otherwise, the competitive position
of the U.S. companies that use the input would be threatened.
Proponents of aid to linkage industries may have another idea in
mind. They might be saying that producers of a particular good need
to have producers of inputs nearby so that they can coordinate their
plans. There do appear to be examples of industries that grew because they were near producers of vital inputs and therefore able to
coordinate plans. Some observers have attributed part of the success
of the U.S. personal computer industry to its location in the Silicon
Valley, near the semiconductor industry. But if the advantages of locating nearby outweigh the disadvantages, companies will do so. Just
as steel plants located close to coal mines earlier in this century, so




106

computer producers have located near semiconductor firms in the
Silicon Valley. No government direction is needed.
Industries Targeted by Foreign Governments

Some industrial policy proponents also argue that the United
States should subsidize industries targeted by foreign governments.
If we do not, they claim, our industrial structure will be determined
by other countries. A foreign subsidy that reduces the price of U.S.
products clearly distorts the market, but a policy of countersubsidy
by the United States would further depress prices and the return on
capital. A general policy of countersubsidy would lead to increasing
misallocation of capital and labor and lower economic growth.
Our present trade laws authorize countervailing duties on subsidized foreign products sold in the United States. In addition, selective subsidy of export financing may deter foreign export subsidies.
The Export-Import Bank of the United States provides loans, loan
guarantees, and export credit insurance for U.S. exports to counter
foreign export subsidies. The Administration has been successful in
the past 2 years in sharply reducing the export credit subsidies of
other countries.
Some observers think that certain foreign industrial policies are responses to what they perceive as a U.S. industrial policy. They point
to the stimulus provided by defense spending to our computer, aircraft, and nuclear reactor industries, and observe that our space program has made the United States the world leader in commercial
telecommunications satellites. It is certainly true that the billions of
dollars spent by the United States since World War II to develop
new weapons and explore space have given a fortunate boost to
some high-technology industries. However, the primary purpose of
this spending has been to protect the United States and its allies and
to pursue space science. If the main reason for this spending had
been to develop commercial computer, civil aircraft, or satellite industries, our defense and space programs would certainly not have
been the least expensive way of doing so.
AID FOR DECLINING INDUSTRIES

Most industrial policy proponents recommend government action
to slow or reverse declines in "basic" industries. In addition to loans
and special tax treatment, many proposals include government-sponsored restructuring plans that would spread adjustment burdens
among labor, management, shareholders, suppliers, and creditors. In
declining industries that face competition from imports, industry
commitments to restructure would be extracted in exchange for trade
protection, while expanded compensation and retraining programs
would be used to help workers whose jobs are lost.




107

A basic problem with such proposals is that they would divert resources from emerging industries and from healthy established firms.
Workers, stockholders, and suppliers in declining industries would
exert political pressure to gain government aid. Experience here and
abroad strongly suggests that resisting the pressure from declining
industries would be difficult.
Aid to Firms

Proponents of aid to declining industries often cite Chrysler as an
example of a company that has survived because of a government
loan guarantee tied to a restructuring plan. But the Chrysler case
should not be used as a model for several reasons. First, Chrysler
might have survived even if it had gone bankrupt. The concessions
extracted from workers, suppliers, and creditors in return for the
loan guarantee might well have been made as part of an ordinary
bankruptcy proceeding. Second, even if government aid were required to keep Chrysler in business, the auto industry and the economy as a whole may have derived little benefit from the guarantee.
Many of the autos produced and jobs saved at Chrysler were at the
expense of other U.S. automakers and their employees. Similarly, the
loans that went to Chrysler would have gone to other sectors, possibly including emerging industries.
Third, loan guarantees to Chrysler may have been successful because such guarantees to failing companies are now the exception,
not the rule. If loan guarantees became standard practice in such situations, workers, management, creditors, and suppliers might be less
willing to make sacrifices. They might come to expect government
aid whatever they did. Establishing a loan guarantee program would
certainly encourage many other firms to apply for aid, and could lead
to even more costly Federal commitments to firms that did not pull
through after the first round of aid. This has been the common European experience, and it could well happen here.
Import Protection and Restructuring

Some observers suggest that trade protection be granted to industries hurt by imports in exchange for commitments to restructure and
adjust. Without such commitments, trade protection reduces the
pressure on firms and workers to make painful changes. Under existing trade law, import protection is granted with no guarantees that
the workers and firms who benefit from the import protection will
make the necessary investments or take other measures to become
more competitive. The result is higher prices for consumers, often with
little long-term improvement in the industry. The protected industry
seldom becomes competitive and usually continues to pressure government for more protection.




108

Strictly enforced agreements, it is argued, could encourage workers
and firms to use the financial benefits of temporary protection either
to become more competitive or to scale down production. The current practice of granting import protection often has the opposite
effect. It forces consumers to pay higher prices without requiring the
industry to undergo difficult adjustments.
The main objection to this proposal is that once the presumption of
aid is established, it is difficult to extract concessions from an industry.
How often will government officials in this country be able to tell
workers that they must accept lower pay, suppliers that they must cut
their prices, and banks that they must write off loans in order to obtain
import protection? Political pressure as well as economic considerations would undoubtedly influence the process.
In addition, an agreement to grant trade restraint in exchange for
restructuring by an entire industry would be more difficult to enforce
than a loan agreement with one firm. Should the government
expect efficient firms as well as inefficient firms to make the same
sacrifice? How would conflict between different segments of an industry be resolved? How would the agreement be enforced if some
firms complied and others did not?
Aid to Workers

Industrial policy proponents who want to aid declining industries
are motivated in part by concern for the workers in these industries.
They often argue that manufacturing provides "good" jobs that
cannot be replaced by jobs in other sectors of the economy. In fact,
basic manufacturing jobs are no more important for the economy as
a whole than jobs in, say, the service sector. The real difference between manufacturing jobs and service sector jobs is that the former
often pay more than the latter because of differences in worker skills,
or in some cases, because of the monopoly power of the manufacturing firm or of its union.
CONCLUSION
Many people advocate industrial policy as a way of stemming the
alleged long-term decline in the U.S. manufacturing sector. But there
has been no such long-term decline. Manufacturing's share of national output in 1980 was virtually the same as its share in 1950. Moreover, since 1973 the U.S. manufacturing sector has grown more rapidly than the manufacturing sectors of many of the major European
industrial nations. And while our growth of manufacturing since 1973
has been less than Japan's, the difference in the U.S. and Japanese
growth rates is less than half of what it was between 1960 and 1973.




109

While there was a short-run decline in U.S. manufacturing due to
the recent recession, this was to be expected. Manufacturing is cyclically very sensitive, and our experience in the most recent recession
was similar to our experience in earlier postwar recessions. Since the
recovery began in the last quarter of 1982, manufacturing output has
increased at almost three times the rate of total output. The answer
to the short-run problems of most of our manufacturing industries is
economic recovery.
A few industries, however, may be in long-term decline, in part because they face foreign competition. The problems of these industries stem partly from past mistakes by management, partly from
wage increases that exceeded productivity gains, and partly from factors outside the industries' control. If these industries do not continue to make significant adjustments, either they will suffer additional
declines in output and employment, or they will require permanent
trade protection or subsidies at substantial cost to American consumers and taxpayers.
Using industrial policy to solve the problems of these few industries would be mistaken for two main reasons. First, industrial policy,
in the form of either subsidies or trade protection in return for industry restructuring, would slow adjustment. Once the government
helped these industries, it would find it very difficult to cut off or
even phase out the aid, as various European governments' experiences with declining industries have shown.
Second, if the goal of industrial policy is to help the long-term unemployed, then helping declining industries is not an effective way of
doing so. In healthy local economies, unemployed workers from declining industries find jobs as quickly as unemployed workers from
other industries. Depressed local economies, not declining industries,
are the real problem. The solution to the problem of the unemployed from declining industries is to enable them to find new jobs
and to focus aid on those workers who are hurt by industrial change,
as the Job Training and Partnership Act of 1982 is intended to do.
While some people advocate industrial policy to stem the alleged
decline in U.S. manufacturing, others see it as a way of nurturing
emerging industries, or industrial "winners." Some of these advocates argue that entrepreneurs in the United States have too much
difficulty getting "patient" capital, that is, capital whose owners or
lenders are willing to invest in a risky idea and to wait a few years for
their returns. These advocates therefore want the government to give
subsidies or subsidized loans to entrepreneurs with new ideas.
But to the extent the United States underinvests in new ideas, it is
because the investors cannot capture the returns from such investments. The straightforward solution to this problem, if it is general,




110

is to increase tax incentives to research and development, as this Administration did with the 1981 Economic Recovery Tax Act. If the
problem is specific to a few industries, the solution is to strengthen
patent and copyright protection.
Moreover, even if there were too little "patient" capital, there is no
reason to think that government finance would improve the allocation of capital. Government officials simply do not have the right incentives to make wise choices about which industries or companies to
invest in. Governments often invest in projects with high political
value but little economic value, or in safe projects favored by the
conventional wisdom of the time. Neither way of choosing is likely to
pick the potentially winning industries that lack capital and both kinds
of investments siphon off capital that could have gone to the real
winners.
To foster more rapid economic growth, the primary focus of government policy should be to strengthen the natural forces of the private economy by reducing the burdens and disincentives imposed by
existing government laws. The most important goal of these changes
should be to increase the rate of capital formation. A higher rate of
capital formation fosters growth directly and permits a more rapid introduction of new technologies. The lower cost of capital and the
faster technological advance also enhance the competitiveness of
American industrial products in world markets.
To increase the rate of capital formation, the tax laws were reformed in 1981 in ways that reduced the burden of taxation on personal saving and on business investment in plant and equipment.
The sharp decline in the rate of inflation since 1980 has also raised
real after-tax rates of return and thereby increased the incentives to
save and invest. As we look to the future, it is important to raise the
Nation's rate of saving by reducing the government budget deficits.
We must also seek new ways to revise the tax laws in order to reduce
the disincentives that still restrict the rate of capital formation.
Our market economy and its system of rewards for superior performance have made the American economy the most productive and
innovative in the world. An industrial policy that increases government planning, government subsidies and international protectionism
would only be a burden on our economic life and a threat to our
long-term economic prosperity.




Ill

CHAPTER 4

Food and Agriculture
AMERICAN AGRICULTURE is one of the most successful examples of agricultural development in the world. The industry is very
productive: only 3.1 percent of the civilian labor force produces
enough to feed the entire domestic population at low cost and still
export enough to earn almost 20 percent of the total export revenue
of the United States. Although farmers in most countries earn much
lower incomes than nonfarm workers, the average disposable income
of the U.S. farm population over the past decade has averaged close
to that of workers in the rest of the economy. Average wealth per
farmer is much higher than of people employed in the rest of the
economy, and half of American farmers have no debt.
Despite these successes, all is not well with American agriculture.
Farm export earnings and asset values have declined for the past 2
years. Recent entrants and farmers who have recently expanded their
businesses have experienced cash flow difficulties. Although the farm
bankruptcy rate is well below that for nonfarm businesses, the
number of farm bankruptcies has substantially increased. The fraction of the farm population with incomes below the poverty level is
still almost double that for the nonfarm population.
In fiscal 1983, Federal Government outlays for farm price and
income support programs totaled $18.9 billion, an increase of $12.3
billion in 2 years. To this must be added another $9.4 billion worth
of payment-in-kind (PIK) commodities committed in 1983 to compensate farmers for reducing their crop acreage in order to reduce
inventories These programs cost taxpayers almost $12,000 per farm.
While Federal expenditures have been curtailed in many domestic
program areas, the cost of farm programs has exploded.
Farm programs affect not only the taxpayer but also the consumer.
Some farm policies clearly benefit the consumer. In particular, federally sponsored research has lowered food costs by generating a
steady increase in agricultural productivity. Other policies artificially
raise food prices through price supports and restrictive marketing
and trade practices. This reduces consumers' purchasing power.
The present Federal farm programs were designed to address the
problems of farming as it existed in the 1930s, but American agricul-




112

ture has changed dramatically since then. Farming has become a
much more specialized, capital-intensive, and high-technology business. Many people justify farm income and price support programs
on the basis of low farm incomes. But average farm family incomes
of the commercial producers, to whom most benefits of the Federal
programs go, are above income levels in the rest of the economy.
Net farm incomes, however, vary substantially from year to year.
Exports now account for one-quarter of all farm sales. Yet present
price support programs, along with the strong dollar, make U.S. agricultural products less competitive on world markets. If we value the
foreign exchange earnings generated by farm exports and the market
this provides for a quarter of the Nation's farm sales, our farm
price and income support policies must become more market oriented than they are now.
THE FOOD AND AGRICULTURAL SECTOR
In 1982 the farm sector employed 3.1 percent of the U.S. civilian
labor force and generated 2.4 percent of national income. In 1930,
for comparison, 22 percent of the labor force was employed in farming and produced 9 percent of national income. With this shift have
come increases in employment and income in industries producing
goods and services purchased by farmers and processing farm products. Farmers now spend almost half of their gross income on inputs,
such as seed, feed, pesticides, fuel, and fertilizers, 58 percent of
which is produced in the nonfarm sector. After the products leave
the farm, for every dollar's worth of sales destined for domestic consumption, processing, packaging, transportation, and other services
add another $2 before it reaches the retail purchaser.
FARM INCOME

In 1983 farm cash receipts from product sales totaled about $144
billion (Table 4-1). This includes the net purchases by the government to support the prices farmers received for grains, cotton, tobacco, and milk. For example, to support the price of milk the government purchased $2.7 billion worth of dairy products. American farmers also received direct government payments in cash and in kind totaling about $9 billion. These total less than the fiscal 1983 budget
authority for price and income support programs because part of
those outlays occurred in the fourth quarter of 1982 and because
farmers will take delivery of over half of their PIK commodities in
1984. The PIK program was designed to reduce the stocks that had
accumulated following 2 years of bumper crops and weak demand,




113

particularly from exports. The acreage cutbacks, plus the severe
drought of 1983, reduced grain and cotton inventories by $9 billion.
Gross income of the farm sector totaled $159 billion. Production
expenses, which dropped substantially from 1982 because of reduced
plantings, came to $136 billion. This left net farm income of $23 billion, up marginally from 1982. Net cash income, which excludes nonmoney income, the value of inventory change, depreciation, and perquisites to hired labor, reached a record high of $43 billion in 1983.
In addition, farmers earned $41 billion of income from nonfarm
sources.
TABLE 4-1.—Farm income, 1980-83
[Billions of dollars]

Item

1980

1982

1983*

150.1
..
.... .

Production expenses5

167.1

162.2

158.6

140.0
0.5
1.3
1.6
121
-5.3

Gross farm income
Cash receipts
Net CCC loans
Direct Government payments2
Other cash income 3 ....
Nonmoney income 4
Value of inventory changes

1981

140.3
2.0
1.9
2.0
13.3
7.6

135.5
9.1
3.5
2.1
139
-1.9

144.4
2.0
9.1
1.9
14.0
8.8

128.6

137.0

140.1

136.0

Net farm income

21.5

30.1

22.1

22.6

Addenda:
Net cash incomefl
Off-farm income.
Change in loans outstanding7
Capital expenditures

38,1
37 7
15.2
18.0

34.7
39.9
15.5
16.8

36.3
394
6.8
13.9

43.4
40.8
3.8
14.1

1
Preliminary.
2
Cash Government payments, except 1983, which includes $4.2 billion of payment-in-kind (PIK) commodities.
3
Custom work, machine hire, and farm recreational activities.
4
Value of home consumption of farm products and imputed value of dwelling.
5
Cash expenses plus depreciation and perquisites to farm labor, but excluding expenses associated with
6

farm dwellings.
Excludes nonmoney income, value of inventory change, depreciation, and perquisites to hired labor. Includes net Commodity
Credit Corporation (CCC) loans.
7
Excludes CCC loans.
Source: Department of Agriculture.

As officially defined, a farm is a place that sells at least $1,000
worth of agricultural products per year. So defined, there are 2.4 million farms, which in 1982 had an average net income from farming of
$9,188 and an average income from nonfarm sources of $16,430, for
a total $25,618. The average family income for the whole population
that year was $27,391.
More than one-third of the 2.4 million farms sell less than $5,000
worth of products per year, and 71 percent sell less than $40,000.
These smaller farms are not generally full-time commercial operations, produce only a small share of national farm production, and,
on average, have negative net income from farming.
The 29 percent of the farms with annual sales of more than
$40,000 generate 87 percent of total farm receipts. In 1982 these
690,000 commercial farms had average annual gross receipts of
about $190,000 and net farm income of about $36,000. Their net




114

farm income, however, varies substantially from year to year. These
farms have average assets of about $1 million and average equity of
about $800,000. This group received 78 percent of all direct government payments under farm programs in 1982. This accounted for 11
percent of their net farm income. These averages mask considerable
diversity. For example, the largest 1 percent of all farms, which have
annual sales of over $500,000, produce 30 percent of all farm sales.
SPECIAL CHARACTER OF FARMING

The commercial farm, like the small manufacturer, is a business
that buys raw materials, transforms them through a capital-intensive
process, and sells the finished products.
How then does a modern commercial farm differ from a small
manufacturing company? Its most distinguishing characteristic is a
biological production process that involves lags arising from growth
cycles. This severely constrains the speed with which farmers can respond to changing market conditions. In addition, the volume of
farm production is less predictable than in the nonfarm economy because of the random effects of weather, disease, insects, and genetics.
These supply conditions contribute to substantial year-to-year variability in farm incomes. Since the annual output of major field crops
is harvested within a few weeks in the autumn, this requires storage
capacity for most of a year's output.
Agriculture and manufacturing also differ in the role played by
land. Because crop production and livestock grazing are land based,
they have to be dispersed over a wide geographic expanse from
which the marketing system must assemble the production. The geographic differences in climate and soil limit what products can be
produced in each location.
Land has characteristics that distinguish it from other inputs. As
the demand for land increases, users must bid against a relatively
fixed supply. They bid on the basis of expected future returns to the
use of that land. The price of farm land increases in response to expectations of higher returns—whether from strong demand for what
it can grow, from inflationary expectations, or from artificial price enhancement associated with government policy. Appreciation of land
prices tends to increase the wealth of its owners, and often represents a significant fraction of an owner-operator's total returns. It
also raises the entry cost for new farmers. Physical capital, being reproducible, tends not to appreciate over time in this manner, but
rather to depreciate.
A third way in which farms differ from manufacturing plants is in
the proportions in which they use labor and capital. Most farms are
family owned and operated, with little hired labor. (Only 0.2 percent




115

are owned by nonfamily corporations.) In 1979 American agriculture
used $43,000 of physical capital stock (machinery and buildings) per
worker, compared with $21,500 for the economy as a whole. Farming
used three times as much physical capital per unit of production
(GNP basis) as the average for the total U.S. economy. In both agriculture and the rest of the economy, this capital stock tends to be
quite specialized, although machinery used to produce field crops has
multiple uses.
FIVE DECADES OF CHANGE

In the 20th century the structure of U.S. agriculture and the wellbeing of farmers have undergone profound change. Farm production
has tripled, while employment in agriculture has fallen by 80 percent
(Table 4-2). The increase in labor productivity and, in turn, farm
family income was achieved by improving technology and by increasing the land and capital used per worker. As a result, employment in
farming fell substantially.
In the 1930s disposable farm family income per capita was less
than 40 percent of that in the rest of the economy. Over the past
decade, however, farm family income has averaged 88 percent of that
in the rest of the economy and exceeded that in the nonfarm sector
in 1973. This income differential was the driving force behind the
structural change in agriculture. As the proportion of the labor force
employed in agriculture fell and the proportion employed in higher
productivity nonfarm employment rose, migration contributed to national economic growth.
The rate of migration from farming to the rest of the economy was
strongly motivated by the income differential. As the differential narrowed in the 1970s, the rate of migration slowed. The rate has also
been sensitive to the nonfarm unemployment rate—slowing when the
perceived chances of getting a nonfarm job were low and accelerating when the unemployment rate fell.
Rural industrialization has increased the number of off-farm jobs in
rural America. Most farmers who did not acquire more land and capital have become part-time farmers; almost two-thirds of all farm
family income now comes from nonfarm sources. This additional
farm family income has reduced significantly the farm-nonfarm
income differential.
The number of farms and the farm labor force peaked during the
1930s. Employment in farming went into a pronounced decline after
World War II, when a major technological revolution occurred in agriculture. The replacement of draft animals by the tractor, which had
begun in the 1930s, was virtually completed by 1960. This released




116

about one-fifth of our cropland, which had been used to grow feed
for draft animals.
The increased mechanization of farming permitted the amount of
land cultivated per farm worker to increase five-fold from 1930 to
1980. The amount of capital used per worker increased more than 15
times in this period. As Chart 4-1 shows, total farm production grew
140 percent, but total input use rose only 5 percent. Total productivity (production per unit of total inputs) more than doubled because
of adoption of agricultural research results such as hybrid seeds and
improved livestock feeding. Table 4-2 illustrates that use of both agricultural chemicals and feed grew very rapidly in the postwar period.
Agricultural production now relies heavily on the nonfarm sector for
machinery, fuel, fertilizer, and other chemicals. These, not more land
or labor, produced the growth in farm production. These changes
have also greatly increased the capital investment necessary to enter
farming; they have also generated new requirements for operating
credit during the growing cycle.
Education has been an important stimulus to growth in the economy as a whole and agriculture in particular. Rural education facilitated the move from farm to off-farm jobs. As the rate of technological
change accelerated, rural education also helped farmers to adopt new
technology and adjust to technological change.
The farm sector has undergone a major shift in what it produces.
Total farm production is now split about equally between crops and
livestock, as it was early in the century. The composition of each,
however, has changed in response to changes in demand and in technology. In value terms, the largest increases have been in beef cattle
and oilseeds production and to a lesser extent in feed grains and
poultry. The proportions of cotton, hogs, eggs, sheep, lambs, and
wool in farm output have fallen.
The two largest components of farm cash receipts today are beef
cattle and dairy products, making up 21 and 13 percent, respectively,
of the total. These are followed by corn and soybeans with 9 percent
each, and hogs and wheat with 7 percent each. Cotton, chickens,
greenhouse products, eggs, and tobacco each contribute about 3 percent of the total.
DEMAND FOR FARM PRODUCTS

Changes in demand have been an important factor underlying the
changes in the product mix of the farm sector. In 1982 the total
value of farm marketings was $144.6 billion, with $70.2 billion from
livestock production and $74.4 billion from crops. The largest
market for crops is domestic human consumption, which absorbed 43
percent of the value of crop sales. The second largest component of




117

Chart 4-1

Farm Productivity, Output, and Input

40

-

20

-

1870

1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980

Source: Department of Agriculture.

TABLE 4-2.—Farm input use, 1910-80
[Index, 1910=100]

Real estate

Mechanical
power and
machinery

Agricultural
chemicals

Feed and seed

1910

100

100

100

100

100

1920

106

105

159

167

135

1930

102

104

200

200

159

1940

91

106

212

300

229

1950

68

108

424

633

341

1960

45

102

488

1067

453

1970

28

104

506

2500

565

1980

?0

101

618

4000

635

Source: Department of Agriculture.




118

demand is exports (31 percent) followed by livestock feeding (16 percent). The remaining 10 percent goes to industrial use and seed.
Within the crop sector there is great variation among these proportions. For example, most fruit and vegetable output goes for human
consumption, while virtually all of the tobacco and cotton is for domestic industrial use or exports. Most of the livestock production
goes to feed the domestic population, while by-products such as
hides and animal fats go to industry or exports.
Domestic Consumption

In 1982 Americans spent $350 billion for food (excluding alcoholic
beverages), of which $255 billion was for consumption at home and
$95 billion for eating away from home. On the average this represents 16 percent of their disposable personal income, although the
poor spend a larger percentage of their income on food than do the
more affluent. Of the total retail expenditures for domestically produced food, consumers spent 29 percent for meats, 21 percent for
fruits and vegetables, 15 percent for dairy products, 10 percent for
bakery products, 7 percent for poultry and eggs, and the remaining
18 percent for miscellaneous food items.
Eighty-five percent of retail food expenditure originates from domestic farm production, and 15 percent is from imported foods.
About one-third of our agricultural imports are products that we
cannot produce in a temperate climate, in particular, coffee, tea,
cocoa, spices, and bananas. Other imported goods that are produced
domestically, although perhaps less efficiently, include sugar, dairy
products, grass-fed beef, and some fruits, vegetables, edible oils, and
beverages. In 1982, agricultural imports totaled $16.9 billion, making
the United States the world's third largest agricultural importer, after
the European Community (EC) and the U.S.S.R.
Food consumption per capita appears to have reached saturation
levels in the United States, with most growth in aggregate consumption now coming from population growth. Total consumption (by
weight) per person of foods other than beverages (coffee, tea, and
soft drinks) has changed little since 1910. However, there have been
major changes in what products are consumed. In the 20th century,
direct consumption of grain products has fallen by more than half,
while use of fats and oils more than doubled. Consumption of meat,
poultry, fish, and sweeteners has risen sharply; consumption of dairy
products and eggs first rose and then fell. Nonalcoholic beverage
consumption has almost doubled since 1910.
Aggregate food purchases tend to be less sensitive to changes in
price and in family income than are purchases of manufactured
goods. However, within their food budgets, consumers select from
among many choices in food items. Purchases of meats and of miscellaneous foods are quite sensitive to changes in family income, while




119

consumption of fruits and vegetables and particularly of cereals and
bakery products are quite insensitive. Consumption of the more
income-sensitive products, such as meats, tends to be more cyclical.
As family income increases, people tend to purchase relatively
more services in the food they buy, including eating out more often.
The share of the retail food dollar received by the farmer, therefore,
has declined to about 28 percent. Labor, packaging, and transport
account for much of the additional cost after products leave the farm.
As a result, retail prices, particularly of bakery and cereal products,
tend to adjust much less than proportionately to changes in farm
prices.
Livestock consume about 16 percent of U.S. crop sales. This includes corn and other grains, protein meal, by-products from milling
grains, and forage. This understates the feed use of farm output,
however. For example, 35-40 percent of corn production is fed to
livestock on the same farm where it is produced. The demand for
feed is derived from consumers' demand for livestock and poultry
products. Forces that alter the demand for meat, in particular
income, are reflected in the demand for livestock feeds. Therefore,
feed demand tends to have a stronger cyclical response to the level
of economic activity than does consumer demand for cereal products.
Livestock feed demand for crop output also tends to be more responsive to price changes than does consumer demand for the final
products. An increase in feed prices that turns the profit margin on
livestock feeding negative can trigger a substantial slaughter of livestock. In the short run, consumers benefit from cheaper meat at the
supermarket. However, to rebuild their herds, farmers must later
withhold animals from slaughter for breeding. This rebuilding takes
time, during which meat supplies are reduced and retail prices tend
to be higher than normal. The use of crops in livestock feeding, then,
varies cyclically with herd size. In a sense, the livestock herd functions as a buffer stock of grains. In times of crop shortfall, high grain
prices trigger a herd liquidation, thereby freeing up grain for more
direct human consumption or exports.
The smallest component of domestic crop demand is industrial
uses. Tobacco and fibers, such as cotton and wool, are industrial raw
materials. There are also industrial uses of cereals, such as in alcohol
and starch production. Many livestock by-products, such as hides and
animal fats, are also industrial raw materials. Part of this industrial
demand is satisfied by imports, including rubber, wool, and other
fibers. Because there are many synthetic substitutes, industrial
demand for farm products tends to be quite sensitive to price changes.




120

Farm Exports

The United States supplies almost 20 percent of world agricultural
trade and is the world's largest agricultural exporter. In recent years
we have supplied half of the world soybean and product shipments,
55 percent of the coarse grain, 40 to 45 percent of the wheat, 30 percent of the cotton, and 25 percent of the rice that move in world
trade.
In fiscal 1983 agricultural exports of $34.8 billion represented
about one-quarter of U.S. farm sales revenue and the output of about
35 percent of the harvested cropland. Half of U.S. farm exports are
for direct food use—wheat, rice, fruits, vegetables, and meats—while
more than a third go for feed and other farm uses; the remainder are
raw materials used in industrial processes, such as textile, cigarette,
and shoe production. In 1983 we exported three-fifths of our wheat,
two-fifths of our rice, soybeans, and cotton, one-third of our tobacco,
and one-fourth of our corn and sorghum. In contrast, only 2 percent
of U.S. meat production and 5 percent of fruit and vegetable output
are exported.
During the 1970s the value of U.S. farm exports increased more
than five-fold, and the percentage of farm receipts coming from exports increased from less than 15 percent to almost 30 percent. This
growth in farm exports represented a major internationalization of
American agriculture. Chart 4-2 provides a historical perspective to
illustrate that after several decades of reduced importance, U.S. farm
exports recovered in 1980 the share they represented in farm marketings 60 years earlier. U.S. farm exports were relatively strong
during World War I and its aftermath. As European agriculture recovered after the war, grain exports fell and U.S. agriculture went
into depression in 1921. World trade in farm products shrank further
as protectionism grew during the 1920s and the Great Depression.
U.S. farm exports fell from 22 percent of farm sales revenue in 1922
to 6 percent in 1940. Because U.S. agriculture had a larger export
exposure than the manufacturing sector, the collapse of world trade
tended to have a relatively greater effect on farm than nonfarm incomes during the Depression.
In the 1920s and 1930s more than half of farm exports were industrial raw materials, mainly cotton, tobacco, hides, and tallow. Since
World War II, food, rather than industrial raw materials, has dominated our farm exports. In the 1960s, as economic growth occurred,
consumption of livestock products grew in the industrialized countries and in some developing countries. This was reinforced by a
major technological change in livestock feeding practices, which dramatically increased demand for feed grains and high protein feeds.
The widespread adoption of hybrid seed by U.S. corn growers after




121

Chart 4-2

Agricultural Exports as Percent of
Farm Cash Receipts
Percent
35

10

1111111111111111111111 n 1111111111 M 111111111 n 1111 n 11111 1111 II
1910

1920

1930

1950

1940

1960

1970

1980

Source: Department of Agriculture.

World War II, which substantially increased the profitability and use
of fertilizer, greatly expanded corn output and depressed its price.
Corn Belt and Mississippi Delta farmers discovered that the soybean,
a novelty crop before World War II, did well in their regions. With
the postwar productivity growth, production capacity grew faster than
domestic consumption, expanding U.S. agriculture's export potential.
Corn and soybean products, in particular, became high-growth exports.
During the 1970s the volume of world agricultural trade grew 45
percent, while global farm production grew only 24 percent. In the
1960s and 1970s, world trade in feed grains, soybeans, high protein
feeds, and vegetable oils grew fastest. Sugar, food grains, tropical




122

beverages, and cotton experienced low rates of growth, and meat was
intermediate. Trade in other fibers declined.
The pattern of world grain trade shifted dramatically in the past 50
years. The United States substantially increased its share of a rapidly
growing market. As Table 4-3 illustrates, as recently as the 1930s
Asia, the U.S.S.R., Eastern Europe, North Africa, and the Middle East
were net exporters of grains. All have become significant net importers. From the mid-1950s to the late 1970s, world grain trade grew
from about 30 million to 130 million tons per year. The largest increase in exports was from North America.
TABLE 4-3.— World net imports and exports of grain, selected periods, 1934-83
[Millions of metric tons: annual averages]
Net imports ( - ) or net exports
1934-38

1948-52

1960-62*

1969-71 *

1979-81 1

1982-83 1

Developed countries:
United States
Canada
....
South Africa ...
Oceania
Western Europe
Japan
Centrally planned countries:
USSR and Eastern Europe
China
Developing countries:
Latin America
North Africa and Middle East
Asia
...

0.5
4.8
.3
28
-23 8
-1.9

14.0
6.6
.0
3.7
-22.6
-2.3

32.8
9.7
2.1
6.6
-25.6
-5.3

39.8
14.8
2.5
10.6
-21.4
-14.4

106.4
18.6
6.2
14.2
-11.1
-23.2

99.0
25.8
.5
12.0
-4.5
-23.7

4.7
-10

2.7
-.4

.5
-3.6

-3.6
-3.1

-39.3
-11.4

-44.6
-14.7

9.0
1.0
2.4

2.1
-.1
-3.3

1.5
-4.6
-5.6

5.3
-9.2
-11.0

-5.3
-23.3
-13.4

.2
-27.8
-14.1

1
Marketing years.
Note: Grain includes wheat, milled rice, corn, rye, barley, oats, sorghum, and millet.
Source: Department of Agriculture.

The growth in world cereals imports in the last decade has been
fueled mainly by growth in per capita income, with growth in population being a significant but less important factor. The growth in imports occurred mainly in the centrally planned economies, the
middle-income developing countries, Japan, and the oil-exporting
countries. The U.S.S.R. and Eastern Europe alone accounted for 40
percent of the increase. These, like Japan and the middle-income developing countries, experienced rapid growth in incomes and in meat
consumption but they lacked a comparative advantage to increase
feed production. This effect is reinforced in the centrally planned
economies by their policy of subsidizing food so that consumers pay
less than the world price for meat and other livestock products.
A small fraction of the growth in grain trade over the last decade has
gone to meet food needs of low-income countries. These economies
do not have the foreign exchange to pay for cereals imports, and
their food aid imports have risen.




123

Since the global recession began in 1981, growth in world trade
has slowed. This, together with record world production and third
world debt problems, has reduced the volume of agricultural trade.
The appreciation of the dollar has raised the cost of U.S. exports relative to other suppliers. Federal agricultural policies have also driven
up the price of U.S. exports. This and the strength of the dollar contributed to a fall in the U.S. market share in world agricultural trade
as well as the value of its exports.
The growth of exports in the last decade has radically changed the
structure of demand for U.S. farm output. From World War II until
about 1973, when exports were relatively unimportant, overall
demand was quite insensitive to price. However, because there are
other exporters and because most countries import farm products
only after consuming their own domestic production, export demand
tends to be more responsive to price and income changes. This
means, for example, that when supply grows faster than demand, the
market price may fall less than proportionately, and total farm revenue may increase.
Growth in exports has also introduced greater instability in the
markets for American farm products. Exports are affected by weather, trade policy, exchange rates, population, and income in the rest
of the world. All but population tend to be unpredictable and, therefore, generate shocks to the U.S. farm sector through the variability
they cause in export demand.
In the 19th century, a country's competitive position in agriculture
was strongly influenced by its endowment of fertile land and favorable climatic conditions. Today our fertile, abundantly rain-fed land
base, while still important, accounts for only part of the competitiveness of U.S. agriculture. Other countries less well endowed with fertile land have followed the U.S. pattern of agricultural development
by shifting to a more capital-intensive, science-based agriculture. A
relative scarcity of land is no longer as severe a constraint on agricultural growth as formerly. If U.S. agriculture is going to maintain its
competitive position, productivity growth must be sustained.
THE BROADER ECONOMIC ENVIRONMENT
American farmers responded strongly to the agricultural export
boom of the mid-1970s. They substantially expanded their capacity
by bringing previously retired land back into production and by
buying more and larger machinery and equipment. The price of land
was bid up to unprecedented levels. The boom attracted new entrants and encouraged many farmers to mortgage their present farms
to buy more land. When the global recession hit in 1981 and the




124

dollar appreciated substantially in foreign exchange markets, U.S.
farm exports and, in turn, prices and incomes, fell. This left U.S. agriculture with excess capacity relative to current demand. Many
recent entrants and farmers who expanded in the 1970s suffered
severe cash flow problems. These farmers have experienced capital
losses as land prices have declined from their 1981 peak.
INTERNATIONAL TRADING ENVIRONMENT

The current world trading environment is characterized by weak
demand and keen export competition. In the early 1980s the global
recession, third world debt, and the strong U.S. dollar have reduced
export demand.
Farm exports are not expected to grow as fast in the 1980s as they
did in the 1970s. A decline in the value of the dollar would help all
export sectors. However, in the past decade other major exporters
have made large capital investments in agriculture and in marketing
facilities to expand export capacity. They can be expected to compete
aggressively for our share of the growth in world farm trade even
when the dollar returns to a lower exchange rate.
Japan, Europe, and the U.S.S.R. are expected to continue to be
large importers of U.S. agricultural products, although further
growth is likely to be slow. The EC will probably continue to be a
protectionist, slow-growth market even for those farm products that
it imports. Eastern Europe, which was a rapid growth market in the
1970s, is experiencing such severe foreign debt problems that the
outlook for rapid expansion in imports of farm products in the next
few years is not bright.
The newly industrializing countries, particularly of East Asia, also
expanded their imports rapidly in the 1970s. Resumption of this
growth will depend upon their ability to generate foreign exchange
earnings from exports. This will depend in part on the trade barriers
erected against their exports by the developed countries. While the
low-income countries are likely to need significant amounts of agricultural imports to feed their rapidly growing populations, their limited foreign exchange earnings will severely constrain their effective
demand in the world market.
U.S. agriculture has a large interest in economic development of
the low-income countries and in growth in world trade. Until the
debt problems and foreign exchange earnings of Eastern Europe and
the low- and middle-income developing countries improve significantly, the prospects for much growth in farm product imports by
these countries are limited.
Competition is keen among exporters for the available markets in
the current situation of depressed world farm trade. This has been




125

reinforced by the increases in agricultural protectionism and in predatory export practices. In particular, the U.S. Government has protested to the EC that its use of agricultural export subsidies to erode
U.S. markets is a form of unfair competition. The internal price supports generally exceed world market prices by a substantial margin,
yet the EC has chosen not to build up large stocks of grains. Instead
the EC subsidizes farm exports in order to sell the surplus on the
world market. Unlike the United States, the EC has not until recently
required acreage or marketing reductions for farmers to qualify for
price supports. The EC recognizes the problems with its agricultural
policy, which now absorbs two-thirds of the total EC budget and imposes substantial additional costs on its consumers. The EC, like the
United States, now has excess capacity induced in part by high price
supports and is exploring means of reforming its farm policy to
reduce the cost to taxpayers. It is unclear how the necessary adjustment will occur in the EC, but the United States has emphasized that
other countries cannot be expected to bear the major burden of European adjustments.
MACROECONOMIC ENVIRONMENT

Modern American agriculture's relative capital intensity, reliance
on purchased intermediate inputs, and export earnings integrate it
tightly into the rest of the U.S. economy. Cyclical changes in the level
of economic activity now have larger effects on agriculture than formerly. The agricultural sector, like other trading sectors of the U.S.
economy, is strongly affected by interest rates and the value of the
dollar. The agricultural sector therefore has a strong interest in reducing the Federal deficit to which recent farm programs have contributed significantly. Macroeconomic policy may have as great an absolute effect on agriculture today as do the direct effects of farm
policy.
Prices of agricultural commodities tend to adjust to changes in the
rate of money growth more quickly than do many other prices. This
is true in part because contracts for raw materials tend to be written
for shorter durations than for other goods and services. In addition,
because of biological lags, agricultural supply tends to be very unresponsive to price changes in the short run. There are large differences among commodities in the degree to which demand responds
to changes in consumer incomes. While demand for farm products
tends to be less responsive than demand for many other goods, there
nevertheless is a positive response to income changes. Therefore, agricultural prices tend to increase relative to other prices during the
early phase of a monetary expansion and fall in relative terms at the
start of periods of monetary stringency.




126

Because contemporary agricultural production requires a larger
capital investment and uses more purchased inputs, a modern farmer's requirements for both mortgage credit and short-term operating
credit are larger than in recent decades. Interest rates, therefore,
have a greater effect on the cash operating costs of the modern
farmer. Moreover, because one could earn interest on the capital invested in commodity inventories, the expected increase in agricultural commodity prices during the year must be at least as large as the
forgone interest earnings if inventories are to be held.
Although the increasing overvaluation of the dollar impeded farm
exports in the 1960s, depreciation of the dollar in the 1970s encouraged larger exports. The move from fixed to floating exchange rates,
however, subjected all traded goods sectors to a new source of shortrun instability. Because the present strong dollar has made imports
cheaper to Americans and U.S. exports more expensive to foreigners,
all traded goods sectors, including agriculture, have suffered reductions in demand and lower incomes. Agriculture, which earns around
25 percent of its gross revenue from exports, has a larger export exposure than most sectors of the American economy. Therefore it has
been buffeted relatively more by the shifts in export demand that
have accompanied the floating dollar over the last decade.
FEDERAL POLICIES AFFECTING AGRICULTURE
The development of U.S. agriculture and the well-being of American farmers have been strongly influenced by Federal policies since
the Civil War, but particularly since 1933. During the Civil War a
number of policy measures were taken to stimulate farm production.
This helped satisfy the growing export market for grains. When the
export market shrank in the 1920s and 1930s* farm prices and land
values fell; bankruptcies became common. Several measures were
taken in 1933 to support farm prices and incomes and save farmers
from bankruptcy. When these, together with rapid technological
change, caused production to grow faster than demand, another set
of policies was implemented to expand demand. All three types of
policies exist today in forms not greatly different from their original
structure, despite the fact that conditions have changed markedly in
the past 50 years.
POLICIES THAT REDUCE PRODUCTION COSTS

In the 19th century the construction of canals and later the transcontinental railroad opened up the fertile interior of the country to
urban markets in the United States and Europe. Subsidized loans
from the Rural Electrification Administration in the 20th century




127

helped extend electric and telephone service to remote rural areas at
low cost. Because farm production is so geographically dispersed,
these policies not only stimulated its expansion, but also lowered its
cost. Federal regulation of transport and communication until recently kept rates to remote rural communities at or below cost. The implicit subsidies paid by high-density routes in other parts of the country, however, have been reduced recently by deregulation.
The Homestead Act, passed in 1862, provided a means of distributing public land in the unsettled regions of the Midwest and Great
Plains free to settlers who would cultivate it for 5 years. The Morrill
Act, also passed in 1862, established a land-grant college of agricultural and mechanic arts in every State. At first these were teaching
institutions, but they later took on important agricultural research
and extension roles as well. The Hatch Act of 1887 provided annual
Federal support for agricultural research in each State, and the
Smith-Lever Act of 1914 created the cooperative agricultural extension service. This land-grant system has developed and diffused
higher productivity technologies adapted to the conditions of each
State.
Research Policy

Since passage of the Hatch Act, a substantial portion of the cost of
agricultural research in the United States has been directly borne by
the Federal Government, especially in the biological area. The private sector has developed more of the mechanical and chemical technologies. Government support for agricultural research was appropriate because it was difficult to protect biological research results, such
as wheat breeding. A private firm carrying on such research would
not be able to control the dissemination of the results to capture
enough of the payoff to recoup its investment costs. The research results have been an important source of growth in agricultural production and exports. The annual rate of return to taxpayers from investing in agricultural research has been about 50 percent.
Farm Credit and Crop Insurance

Historically, the rural banking system was weakly integrated into
the national financial markets. Between 1916 and 1933, an independent, federally funded farm credit system was established. Although
now autonomous from the Federal Government, the close association
of the system to the Federal Government means that it can borrow
from the national financial markets at close to the same rate as the
Federal Government. Because the Federal rate is always less than the
prime rate, this provides to farmers an interest rate advantage over
what they could get at commercial banks. The system, which is cooperatively owned by its member borrowers, holds about one-third of




128

all credit outstanding to farmers. The Commodity Credit Corporation of the Department of Agriculture also provides shorter-term
credit at favorable interest rates to farmers who participate in price
support programs.
The lending activities of the Farmers Home Administration, another agency of the Department of Agriculture, tend to involve a
greater subsidy element and to incur a larger Federal budget cost.
The Farmers Home Administration makes real estate loans and other
loans to farm borrowers who cannot obtain credit from commercial
sources. The borrowers are mainly new entrants, small farmers, and
farmers who have lost their creditworthiness. Loans to these borrowers often result in higher risks and therefore larger losses than would
be acceptable to private lenders.
The Farmers Home Administration also has made emergency loans
at well under market interest rates in areas hit by natural disasters.
This program has been criticized for making subsidized credit available to farmers who already had access to credit from commercial
sources. Despite very generous repayment terms, this program has
not been noted for restoring financially troubled farms to profitability. During the 1970s the government also made direct payments to
farmers who suffered financial losses due to natural disasters. By
shifting part of the risk of failure to the Federal Government, these
programs have encouraged larger crop production in areas of the
country where the risk of crop failure is greatest.
The direct disaster payment program is being phased out as a
result of the 1981 farm bill. It is being replaced by Farmers Home
Administration lending and by a new and expanded Federal Crop Insurance program. Participation rates in the former crop insurance
program were low, in part because the premiums did not adequately
reflect individual differences in risk or in individual farmers' resources and management skills. The program was redesigned to encourage more commercial producers to participate than under the
previous program, and the government now subsidizes up to 30 percent of the cost of crop insurance to farmers.
Together, emergency loans, disaster relief, and subsidized crop insurance tend to induce excessive crop production in areas of the
country that are subject to a wide range of weather-related yield variation. The programs do this by raising farmers' expected returns
from crop production in such areas by shifting part of the risk of failure to the Federal Government.
Income Tax Policy

Several features of the income tax law, some of them unique to
farming, may encourage greater investment in productive capacity
and expanded production. First, most farms use cash accounting




129

rather than accrual accounting. Farmers enjoy some flexibility in reducing taxable income by paying for purchased materials in high revenue years and by delaying sales into years of lower revenue. Second,
under current tax laws, depreciation schedules for many capital assets
are considerably shorter than the economic life of the assets. Reducing near-term taxable income in effect gives the farmer interest-free
funds during part of the productive life of an asset. Third, use of the
investment tax credit lowers the effective cost of capital items. Finally, sales of breeding animals and dairy cattle held longer than 1 year
are treated as capital gains rather than ordinary income. This can
substantially reduce the tax on such receipts for higher-income taxpayers, especially those with high off-farm income.
Tax policy does not affect the profitability of all types of farms
equally. The tax laws encourage the substitution of capital for labor.
Larger farms, which generate higher incomes, appear to gain proportionately greater benefits than smaller farms. People in higher marginal tax brackets can benefit more from the tax provisions. This creates an incentive for higher-income people to invest in farming. In
practice, losses from farm operations reduce taxes on other income
by more than the total Federal tax revenue from farm profits, implying that total farm income for tax purposes is negative.
Input Subsidies

Some Federal policies raise agricultural output by stimulating the
uneconomic use of certain inputs. For example, the government
often sets the price of water artificially low by granting public subsidies to construct and maintain irrigation projects. These low prices
give farmers an incentive to use water in arid regions on crops that
require a great deal of water. If the price of water were set higher,
farmers would tend to grow less water-intensive products, leaving
production of crops that use more water to humid regions. Without
these public subsidies, some products now produced in arid regions
could not compete with the same goods from more humid regions of
the country.
There are other input subsidies for U.S. agriculture. For example,
in the name of conservation, the government has shared the cost of
terracing and contouring the land, applying lime, and otherwise improving the soil. The United States' relatively low energy prices have
also encouraged mechanization and energy-intensive practices, such
as irrigation and grain drying.
Farm Labor Policy

Farm labor policy mainly affects the labor-intensive agricultural activities, principally fruit, vegetable, and sugar production. The extension of minimum wage legislation to agricultural labor in 1966 pro-




130

vided an incentive for farmers to accelerate the pace of mechanization. Only about 1 percent of farm workers belong to labor unions,
which formed in the farm sector in the 1960s, compared with 20 percent of all American workers.
The farm labor market has been greatly affected by the entrance of
foreign workers into the United States. Until 1965, about 100,000
workers per year, mostly from Mexico, were authorized to enter temporarily under the Bracero program. Since the passage of the Immigrant Nationality Act in 1952, migrant workers have been given temporary immigrant status, under Section H2, if they do not compete
with American workers. In recent years, Section H2 has covered only
about 20,000 workers, mostly for sugar and apple harvesting.
PRICE AND INCOME SUPPORT POLICIES

The policies of the 19th century increased supply and helped the
farm sector satisfy the growing domestic and export demand. The
drop in export demand in the 1920s sent the farm sector into depression, and the effect was reinforced in the 1930s when protectionism increased and demand fell further. Farm prices and cash flow fell
so low that many farmers could not make their loan payments; foreclosures became widespread. The Federal Government then turned
to policies to support farm prices and to restrict the supply of agricultural products.
Origins of Price Supports

Although the depression in agriculture continued through the
1920s, it was viewed as a transitory problem resulting from excess capacity relative to demand. The Congress appropriated $500 million
for the Federal Farm Board, created in 1929, to purchase cotton and
wheat in order to bid up prices and thereby increase farm incomes.
The Board was expected to resell these products when the market
strengthened. The Board exhausted its capital stock in 3 years with
no perceptible effect on prices.
After the Board's failure to support farm prices, the Agricultural
Adjustment Act of 1933 created the Commodity Credit Corporation
(CCC). The CCC was permitted to borrow funds directly from the
U.S. Treasury to carry out its price support programs. These programs were viewed as a temporary expedient when they were initiated in 1933, but our present price support instruments are remarkably
similar to those put in place 50 years ago.
The CCC employs two measures for supporting farm prices—
direct commodity purchases and nonrecourse loans. Under the
former, the CCC stands ready to acquire any quantity of a supported
commodity offered in the market at a guaranteed minimum price, the
support price. This technique is still used today to support the price




131

of milk. (Because of the perishability of fluid milk, the CCC supports
its price by purchasing butter, cheese, and nonfat dry milk.) By authority of Section 32 of the Agricultural Adjustment Act of 1933, as
amended in 1935, the Agricultural Marketing Service, an agency of
the Department of Agriculture, purchases commodities whose prices
are depressed. Chicken, pork, fruits, and vegetables are periodically
purchased, although no formal support price is involved.
The CCC's other instrument is the nonrecourse loan. Under this
program the CCC offers loans to farmers with their crops pledged as
collateral. The size of the loan equals the support price (the "loan
rate") times the quantity of the farmer's crop put under loan. Most
loans are made for less than 1 year. If the market price rises sufficiently during the period of the loan, the farmer may pay off the loan
plus interest and reacquire control of his crop. If the market price is
not sufficiently above the loan rate when the loan comes due, the
farmer can then freely default. The CCC accepts the commodity as
payment in full and cancels the loan and interest. Loan rates were
originally established to support the prices of wheat, corn and cotton.
Rice, peanuts, and tobacco were soon added to the program.
In principle, both types of price support operations can be viewed
as involving buffer stocks. A price support puts a floor under the
market price in periods of slack demand, thereby protecting farmers'
incomes. If the market price rises to a sufficiently high level, the CCC
can sell the commodity back into the market at a profit, helping
thereby to defray its cost of operation. It has to pay interest to the
U.S. Treasury on its operating capital. A buffer stock is designed to
protect farmers against abnormally low prices and consumers against
unusually high prices. In practice, however, the support prices and
loan rates have often been set above the long-run market-clearing
level taking into account both domestic and international demand.
Although the loan rate has often been set above the market-clearing price for some commodities, farmers often argue that government stocks "hang over the market" and depress the price. They
therefore lobby to ensure that government stocks are released in a
manner that does not depress the price.
Rise of Restrictions on Input Use and Marketing

As government stocks of commodities accumulated under price
support operations, it quickly became apparent that the programs
were treating a symptom, not the root, of the problem—the excess
capacity of the farm sector relative to market size at current prices.
Three approaches have been used to address that—acreage allotments, marketing restrictions, and voluntary land retirement.
Acreage allotments are quantitative restrictions on the acreage a
farmer may plant to a given crop. Although these have been used on




132

wheat, rice, cotton, tobacco, and peanuts, only the last two remain in
effect. In practice, farmers tend to retire their least productive land
first. They also raise crop yields on the acreage planted by using
more fertilizer and other inputs per acre. Production, therefore, falls
by proportionately much less than the reduction in land area. Marketing quotas have also been imposed, at times in conjunction with
acreage allotments, such as with tobacco. Quotas based on historical
sales freeze the structure of the industry. Later entrants are forced to
buy or lease marketing rights from present quota holders.
While marketing restrictions were authorized in the Agricultural
Adjustment Act of 1933, another variant was authorized when the act
was amended in 1935. This 1935 act authorized the creation of marketing orders to regulate the sale of milk and various fruits, vegetables, and specialty crops. Once an order is approved by two-thirds of
all producers, all regulated processors or handlers must comply with
the regulations. While some marketing orders are only concerned
with grading and packaging standards, or collective support for research or advertising, others regulate the flow of products to market
and enforce price discrimination.
Allotments cause all producers to cut back jointly on marketing,
just as if they had formed a cartel with the government agreeing to
police the members. Examples include the marketing orders for
brewers hops and spearmint oil. These are now being phased out.
Other marketing orders permit price discrimination among markets
with different demand characteristics. A higher price is charged in
markets for certain fresh fruits and fluid milk, where demand is less
responsive to price, and a lower price is charged for identical fruit
used in canning or for milk that goes into butter, cheese, or other
manufactured dairy products. This raises producers' total revenue at
the expense of consumers. There is nothing unique about the commodities regulated by such marketing orders that requires volumecontrol on sales of fresh produce. For example, sales of California
and Arizona oranges and lemons, tart cherries and walnuts are controlled, while Florida citrus, sweet cherries and pecans are not.
While World War II and the Korean war provided a period of high
prices for U.S. agriculture, the lower farm prices and incomes which
followed brought renewed attempts to restrict acreage or marketings.
A voluntary land retirement program known as the Soil Bank was established in 1956, in which the government paid farmers to take land
out of production. By the late 1960s, farmers had retired more than
60 million acres under this program.
Nevertheless, with rapid productivity increases, surpluses continued to mount despite the downward drift of real support prices
through the 1960s. Chart 4-3 illustrates this trend for wheat. The in-




133

creasing overvaluation of the dollar in the late 1960s made this price
reduction less pronounced when viewed from the perspective of importing countries. Despite their downward drift, the support prices
appear to have exceeded market-clearing levels in most years
through 1972, when the dollar was devalued and farm exports and
prices increased dramatically. The effect of the dollar devaluation
was reinforced by simultaneous crop failures in many parts of the
world, the ready availability of credit, and a change in Soviet agricultural import policy that led to a large grain purchase from the United
States.
Chart 4-3

Real Wheat Prices
1977 dollars per bushel
5.50

5.00

4.50

-

4.00

-

3.50

-

3.00

-

2.50

-

2.00

-

1.50

-

1951

1955

1960

1965

1970

1975

1980

Source: Department of Agriculture.

The Last Decade

As farm exports expanded, government programs were adjusted to
allow farmers to bring most of the retired land back into production.
In 1973 farm incomes exceeded those in the rest of the economy for




134

the only time in history. The excess capacity of the 1950s and 1960s
disappeared, and farmers quickly expanded their production capacity
to satisfy the export demand.
The moves toward an increasingly market-oriented farm policy,
begun in the late 1960s, culminated in the Agriculture and Consumer
Protection Act of 1973. Recognizing that loan rates, by interfering
with market prices, may limit our ability to compete in world markets, the 1973 act attempted to divorce the policy objective of farm
income support from price supports. The act retained loan rates as a
form of minimum price insurance, but established a system of target
prices and deficiency payments to provide farm income insurance.
Participating farmers can make production decisions based on the
target price, but unlike loan rates, the entire crop is sold on the
market for whatever it will bring. The difference between the target
price and the average market price (or the loan rate, whichever is
higher) in the first 5 months of the marketing year is paid to the
farmer in the form of a deficiency payment per unit of production.
By this means, the government avoids accumulating stocks unless the
market price falls to the loan rate.
One disadvantage of target prices and deficiency payments is their
large potential cost to the government, particularly if there is a wide
spread between the target price and loan rate. To overcome the cost
disadvantage and the tendency for target prices to encourage larger
production, the program often requires a farmer to reduce the acreage planted as a condition for participating in the benefits of the program. The forgone production on this acreage is, in effect, the premium paid for the price insurance provided by the loan rate and the
income insurance provided by the target price.
Because market prices were high during the export boom of the
mid-1970s, the then-existing farm policies had little effect. Concern
arose, however, about the much larger price instability that had accompanied the export growth in the absence of government stocks. A
3-year CCC loan program, known as the Farmer Owned Reserve, was
established by the Food and Agriculture Act of 1977. In exchange for
a higher loan rate, a farmer who satisfies any acreage reduction requirements can place commodities in the Farmer Owned Reserve for
a 3-year period. After the first year, the loan is interest free. The Department of Agriculture pays for the storage cost for all years of the
loan. In exchange, the farmer agrees not to sell the grain until the
market price rises to a specified release price.
Although the Farmer Owned Reserve was designed as a buffer
stock scheme for stabilizing market prices, in practice the price bands
have been altered frequently. In particular, since the 1980 embargo
of grain sales to the U.S.S.R., the Farmer Owned Reserve loan rate




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has at times been set high enough to provide incentives to produce
for storage under the program. This is contrary to its objective of
providing price insurance when the market price falls below its longrun equilibrium level.
With the onset of the global recession and the strengthening of the
dollar 2 years ago, farm exports fell and farm prices dropped well
below loan rates. There were bumper crops in 1981 and 1982, and
stocks in the Farmer Owned Reserve and in CCC inventories burgeoned. With no imminent increase in exports foreseen, a Federal
policy decision was made early in 1983 to offer farmers payment-inkind if they would reduce their crop acreage in 1983. Farmers found
this proposition so lucrative that they cut back their harvested acreage by 55 million acres from the previous year. In addition, a devastating drought struck, drastically reducing production of corn, soybean, and cotton in particular. The payment-in-kind program is not
viewed as a permanent addition to the instruments of Federal farm
policy.
POLICIES THAT AUGMENT DEMAND

Farm production has grown more rapidly than demand during
most of the past 50 years, exerting downward pressure on farm
prices. Several Federal policies have attempted to increase domestic
and foreign demand in order to provide some price support to
farmers.
Consumer Policies

A number of Federal programs directly related to food have sought
to aid low-income consumers, who spend a larger fraction of their
income on food. When the government began purchasing agricultural commodities to support farm prices and farm income in the 1930s,
certain commodities were distributed free to the urban poor and unemployed. Direct distribution of surplus commodities acquired by the
CCC continues to this day, for example, the recent distribution of
surplus cheese and other CCC-owned products. In addition, the government subsidizes school lunches and donates commodities to
schools. These include meats, fruits, vegetables, eggs, and poultry.
The largest program is the food stamp program, which had a
budget cost in fiscal 1983 of $11.2 billion. This program distributes
food stamps to low-income consumers to augment their purchasing
power in a form that must be spent specifically on food. Nevertheless, because food stamps substitute for cash within a household
budget, low-income consumers tend to spend only about 12 cents
more on food for each dollar's worth of food stamps received. The
food stamp program probably added less than 1 percent to aggregate
consumer expenditures on food in 1983. This program is mainly a




136

welfare program for low-income consumers rather than a program to
expand food demand.
Agricultural Trade Policy

A country's agricultural trade policy is generally a consequence of
its domestic price support programs* Major changes in a country's
trade policy, therefore, generally require changes in that country's
domestic agricultural policy as well.
When price supports are set above the world market-clearing level,
they have particularly adverse side effects for internationally traded
commodities. Unless trade is constrained, a large trading country like
the United States cannot support the domestic price of a commodity
without also supporting its price for farmers in all other trading
countries. When the support price exceeds the world market price on
export products, the U.S. Government withdraws enough supplies
from the market to raise the world price to the domestic support
level. Exports fall, raising the world price for the commodity. This
higher price encourages farmers in other countries to expand their
production capacity. This has occurred for tobacco, cotton, and
wheat—at various times among our most important export crops.
To support the domestic price of goods that we import, the government must buy up domestic production and even imported supplies until the world market price is bid up to the support level. This
appears to be happening today under the price support program for
honey, although this is not typical. Instead, by authority of Section
22 of the Agricultural Adjustment Act of 1933, as amended in 1935,
quotas or fees can be imposed on imports of any product whose domestic program is threatened by imports because of price supports
set above the market-clearing level. The United States currently has
such import quotas on sugar, dairy products, cotton, and peanuts.
The United States received a waiver for these quotas in the 1950s by
the General Agreement on Tariffs and Trade.
Although there is no price support program for beef, the Meat
Import Act of 1979 mandates annual quotas to limit imports when
domestic supplies are large. Voluntary export restraints have been
negotiated with the principal beef exporting countries to avoid triggering the beef import quota.
In 1954, Public Law 480 created the Food for Peace program as a
means of reducing the large CCC stocks acquired through price support purchases. This act and subsequent amendments provided for
donations of commodities to poor countries and sales for local currencies. These funds are used for development projects or local expenses of the U.S. Government, such as embassy operation. Almost
40 percent of all U.S. grain exports in the 1960s were under Public
Law 480. While concessional sales have helped to reduce burden-




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some government inventories and to develop new markets for U.S.
farm products, the years when government stocks have been largest
have often failed to coincide with years of crop shortfalls in developing countries.
Government stocks also have been reduced through export subsidies. Export subsidies on agricultural products are permitted under
the General Agreement on Tariffs and Trade, subject to certain conditions. In particular, export subsidies must not be used to obtain
more than an "equitable" share of world exports or to "materially
undercut" other suppliers' prices. Export subsidies were used by the
United States to avoid accumulating larger CCC stocks from the
1960s until 1972. In recent years, "blended credit" and special subsidized sales have been used to encourage other countries, particularly
the EC, to reduce their farm export subsidies. "Blended credit" consists of a mixture of no-interest loans "blended" with guaranteed or
nonguaranteed commercial credit.
Export subsidies set up a two-price system that permits producers
collectively to charge a higher price in the domestic market, where
demand is less price responsive, and a lower price in the export
market, where demand is more sensitive to price changes. By this
means, total revenue to producers is increased. Total revenue to producers is, of course, further enhanced by the fact that farmers receive
the higher domestic price for all they sell, but taxpayers pay the
entire cost of the export subsidy.
The target price system can also act as an export subsidy under
certain circumstances. Unless sufficient acreage reduction is required,
target prices tend to cause larger production and lower market prices
than would otherwise occur. Such price reductions have the same
effect, when viewed from other countries' perspective, as export subsidies, unless loan rates are set at or above the long-run world
market-clearing prices. For example, it appears that the wheat loan
rates were sufficiently low in 1977, 1978, and 1979, that the target
prices did depress market prices. Since 1980, however, the wheat loan
rates have been set at such high levels that exports have been reduced.
The United States generally endorses free trade. During the various rounds of multilateral trade negotiations, the United States has
regularly urged that trade in agricultural commodities be treated simultaneously with other goods, only to see it split off for separate
treatment. The various rounds of trade negotiations have significantly lowered tariffs but have been relatively unsuccessful at achieving
similar reductions in nontariff barriers, the principal barriers to trade
in agricultural commodities.




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On several occasions in the 1970s, the U.S. Government embargoed exports of certain agricultural products—either globally or to
selected destinations. Exports of soybeans, for example, were embargoed in 1973 to hold down domestic prices to livestock producers
who use soybean meal as an input, and indirectly to protect domestic
consumers from higher prices of livestock products. In 1980 a partial
embargo was imposed on grain sales to the U.S.S.R. in response to the
invasion of Afghanistan. As a result of these embargoes, questions
have been raised about the reliability of the United States as a supplier
and about the sanctity of U.S. export contracts. This Administration
has publicly stated that farm exports will not be selectively embargoed
in the future, and has entered into long-term sales agreements with
China and the U.S.S.R.
Since 1981 the adverse trade effects of the strong dollar, third
world debt problems, and high price supports have motivated legislative requests for special export assistance through price or credit
subsidies and expanded export credit guarantees. Credit guarantees
have become a major tool in the effort to maintain U.S. farm exports.
In addition, public expenditures in support of U.S. agricultural
export promotion and foreign market development activities have increased.
NET EFFECTS OF FARM PROGRAMS

Table 4-4 lists the major Federal farm programs for the most important American farm products. In fiscal 1983 the Federal price and
income support programs cost the taxpayer more than $28 billion,
but this number tells only part of the story. Price supports and restrictive marketing and import practices impose an additional cost on
consumers by reducing their purchasing power.
Federal farm policies tend to have two opposing effects on consumer prices. Public support for agricultural research and development has produced a stream of productivity-increasing, cost-reducing
technological improvements, which have lowered market prices. Food
price reductions benefit the poor in particular, because they spend a
larger fraction of their income on food than do middle- and upperincome groups.
Offsetting this positive effect on consumer prices are public policies that artificially raise farm product prices above the market-clearing level through price supports and restrictive marketing and trade
practices. By raising food prices, these policies tend to reduce consumers' purchasing power. Because the policies alter relative prices,
they also distort the mix of products consumed. They have stimulated the development of synthetic substitutes for natural products, for
example, high-fructose corn sweeteners and low-calorie sweeteners




139

TABLE 4-4.—Major Federal farm programs by commodity, 1982
Billions of dollars

Sates
rank

Commodity

Farm sales
value

Nature of program

Value of net
exports

1

Beef cattle and calves

29.9

2

Dairy

18.4

-.3

3

Feed grains

16.1

6.4

4

Soybeans...

12.4

6.2 No effective program (price supports).

5

Hogs

10.6

6

Wheat

9.8

7

Poultry and eggs

9.5

.4 Section 32 purchases.

8

Vegetables

8.1

.0 Some products free market, but some import restrictions and marketing orders.
Section 32 purchases.

9

Fruits and tree nuts

6.7

.1 Some products free market, but'some import restrictions and many marketing orders.
Section 32 purchases.

10

Cotton

4.9

2.0 Price supports.
Deficiency payments.
Acreage restrictions.
Import quotas.

11

Tobacco

3.3

1.2 Price supports.
Acreage and marketing controls.

12

Hay
Rice

Sugar beets and cane

1.7

15

Peanuts

Price supports.
Deficiency payments.
Acreage restrictions.
Storage incentives for participants.

.5 Section 32 purchases.

1.7

14

Price supports.
Import quotas.
Classified pricing.

6.9 Price supports.
Deficiency payments.
Acreage restrictions.
Storage incentives for participants.

2.1

13

= 1.2 Import restrictions.

.0 No program.
1.0 Price supports.
Deficiency payments.
Acreage restrictions.
-.8

Price supports.
Import quotas, fees, and duties.

.2 Price supports.
Acreage restrictions.
Import quotas.
Domestic marketing quotas.

.8

Sources: Department of Agriculture and Council of Economic Advisers.

for sugar, synthetic fibers for cotton and wool, margarine for butter,
nondairy creamers for cream, and artificial cheese for natural cheese
on frozen pizzas. Such substitutions have offset part of the adverse
effects of price-enhancing policies on consumer welfare. Finally, lowincome consumers have realized some benefits through income-augmenting programs such as food stamps and commodity distribution.
Public policies also affect the farm sector's export performance.
Past public investments in agricultural research account for part of
the increase in farm exports. At least in the long run, export demand
is elastic, so this export growth has increased agricultural export revenue. On the other hand, policies that administratively set U.S. farm
support prices above the world market-clearing level tend to reduce




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export revenue in the long run. This occurred in the 1960s and again
for some commodities in the early 1980s. Such policies prevent agriculture from realizing its full potential as a trading sector.
What matters to producers is how government policy affects the
net returns to their land, labor, and capital. For a given technology,
any public policy that raises the price of products or lowers the cost
of purchased goods and services raises net returns. This has been the
effect of price supports, import quotas, and export subsidies, as well
as of cheap water and cheap energy policies. On the other hand, the
price supports on grains have raised the price of feed to the livestock
and poultry sectors. In this way, public policy raises the net returns
to one set of farmers, while lowering those to another.
different rates of protection to different sectors tend to cause inefficient resource allocation. Resources tend to move to where they
earn the highest returns. If public policy artificially raises the returns
in one sector relative to another, this will attract excessive investment
and result in excess capacity. Inefficient resource allocation lowers
the potential production of the economy as a whole and reduces per
capita income. When public policy diverts, say, investment capital or
water from more to less productive uses, this lowers national income.
While farming has changed a great deal since the 1930s, farm
policy instruments have not been adapted to the changing structure
of farming and the environment in which it operates. Average sales
of commercial farmers have grown rapidly, and the benefits from
farm programs tend to be concentrated on the largest producers, despite payment limitations for some programs. Moreover, the benefits
from the programs have tended to become capitalized into land
values, thereby increasing landowners' wealth. Once this happens,
land values can fall unless the government continues to support the
product price. The threat of reduced land values and reduced returns
on past capital investments provides farmers with a strong incentive
to lobby against reductions in price supports, even when it has
become obvious that existing price supports are well above marketclearing levels. The prospect of continued price supports thus creates
false expectations and encourages investments that would be unprofitable if price supports fell. Farmers who act in good faith upon these
expectations feel they have been cheated if price supports are later
reduced or eliminated. Nevertheless, short of paying farmers to retire
resources from production, the only way to induce the needed resource adjustment is to allow capital losses and attempt to ease the
adjustment by reducing price supports gradually.
Public policy appears to have induced excessive investment in parts
of U.S. agriculture at various times. The cost of these misallocations
does not always show up in the Federal budget. For example, sugar




141

producers and processors enjoy substantial income transfers as a
result of protection from imports. Because of the way the program
operates, the consumer bears all of the cost of these income transfers. Nevertheless, the costs are no less real than if the prices were
supported by direct Federal Government purchases.
GUIDELINES FOR FUTURE FARM POLICY
Modern American agriculture has become well integrated into the
world market and into the rest of the U.S. economy. As exports have
grown, total demand for American agricultural products has become
more price responsive, but the variability of that demand has also increased. This deepens the sector's susceptibility to periodic excess
capacity, as at the present. When the Agriculture and Food Act of
1981 was passed, most observers thought that real farm prices would
rise through the 1980s. In less than a decade, we have gone from
fears of worldwide food shortages to such large stocks that we paid
farmers to reduce harvested acreage by 55 million acres in 1983.
This experience illustrates the need for flexibility in setting farm support prices. The present U.S. farm policies support the price to farmers in countries that compete with us for export markets and impede
our ability to export. We need to allow prices to reach market-clearing levels if we wish to compete in the export market. If this is not
done, a significant part of the resources in American agriculture will
remain underemployed until the total quantity of these resources is
significantly reduced.
Price supports do little to help farmers with below-average income
because benefits are distributed in proportion to sales. A more efficient and equitable way to help low-income farmers would be to
transfer income to them directly. While most commercial farmers do
not have low average incomes, their incomes are variable, because
variability in weather and in exports create instability in both supply
and demand. The resulting instability in cash flow makes modern
American farming a risky business.
There are better ways to reduce risk besides outright price supports. One is through insurance. Historically, when farmers lacked insurance markets in which to insure against fluctuations in yield and
prices, the government provided price supports and various forms of
subsidized crop insurance. Today farmers can ensure a specific price
through forward contracting or selling futures contracts, although
relatively few avail themselves of this opportunity. Farmers generally
prefer not to commit themselves early, worried that they may lose the
opportunity to sell at a higher price later if the market price rises.




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This year trading in commodity futures options is scheduled to recommence on a trial basis for the first time in 50 years. With a put
option, crop producers will be able to buy the right to sell their
future production at a specified price without incurring the obligation to sell at that price. This may be more attractive to producers
than selling on the futures market. In a similar manner, livestock producers will be able to buy insurance against increases in the price of
their feed by buying call options. Thus, the resumption of trading in
commodity futures options will allow farmers to insure against price
risk. If the experiment is successful, there will be less need for the
Federal Government to provide price insurance through price supports.
Buffer stock programs such as the Farmer Owned Reserve are designed to reduce variability in agricultural commodity prices. If these
programs are continued, the acquisition price should be set below
the expected long-run world market-clearing price. Setting the acquisition price too high would reduce exports and support the whole
world market price structure. Stocks would become excessive, as happened in 1981 and 1982. In addition, the price band needs to be adjusted over time on the basis of world price movements, as is now
done with soybeans, to reflect long-run trends in market conditions.
Agriculture, like other trading sectors, is strongly affected by interest rates and the value of the dollar. Therefore, macroeconomic
policy is as important to farmers as farm policy. Special measures to
shield one sector from the adverse effects of macroeconomic policy
draw resources away from other sectors and place a greater adjustment burden on them. It would be more efficient to alter the macroeconomic policies that are damaging the traded goods sectors.
Because the United States is a large agricultural trading country, it
has a large interest in further liberalization of agricultural trade and
in securing more satisfactory rules concerning use of agricultural
export subsidies. In past rounds of multilateral trade negotiations,
substantial progress was made in lowering tariff barriers to agricultural trade. However, little progress on reducing nontariff barriers,
such as quotas and variable import levies, has occurred. If we hope
to persuade other countries to liberalize access to their markets for
our exports, we have to be ready to offer freer access to our market
for their exports. Freer access would also tend to stimulate economic
growth in developing countries, and, over the longer run, increase
their demand for our exports.
American agriculture has a long and remarkable record of producing abundant supplies of wholesome food for a growing Nation and
for export around the world. But, the budget cost of farm programs
has reached a level that is not sustainable. We must adopt policies to




143

encourage the necessary resource adjustment. National income would
likely increase as a result of more efficient resource allocation, consumers would pay an even smaller fraction of their income for food
than they do now, and farmers would benefit from greater economic
health of their industry.




144

CHAPTER 5

Financial Market Deregulation
OVER THE PAST FEW YEARS, financial markets have undergone
sweeping changes of a magnitude not seen since the 1930s. Despite
these changes, the process of market restructuring and regulatory
reform remains incomplete. Additional regulatory changes of historic
dimensions are being debated. The shape and scope of these reforms
will be important to the American economy for decades to come.
The issues in financial regulation are many and complex. They include the safety and soundness of financial institutions, the problems
of dealing constructively with changing technology, and the reduction
of regulatory burdens to the maximum extent possible. Similar concerns are important in other industries where regulatory reform is
being debated. But the financial regulatory reform issues are in many
respects far larger.
Financial regulation is not simply a matter of protecting poorly informed investors—the usual focus of consumer protection regulation—but of protecting everyone. In the financial crises experienced
in 1933 and earlier in U.S. history, well-informed, prudent investors
and depositors found themselves ruined financially. From painful experience, we know that a failure of public policy with respect to financial markets can create damage that extends far beyond the financial services industry. Financial market failure can mean economywide failure—recession, widespread unemployment, and bankruptcies.
The essential functions of financial regulation are to ensure the
safety and soundness of the financial system, and to foster efficient
allocation of capital by promoting competition and limiting opportunities for fraud and self-dealing. The competitive capital markets in
the United States, long encouraged by public policy, have provided
highly efficient links between the providers of funds and the users of
funds, directing resources into the most productive investments in
the economy. But instability in financial markets has been a continual
concern, and at times a highly disruptive fact, throughout U.S. history. The challenge for regulatory policy is to maintain stability while
realizing the benefits of competition.




145

MAJOR HISTORICAL FORCES SHAPING FINANCIAL
REGULATION
It is best to begin the analysis of the key financial regulatory issues
by considering the major forces that have shaped the industry and
led to the present regulatory environment. These forces have included public reaction to periods of financial instability that occurred in
the 1930s and earlier, public concerns over the credit powers of financial institutions and their ties with other institutions, and strong
competitive pressures coming from both within and among the various segments of the industry.
FINANCIAL INSTABILITY

Much of our inherited regulatory structure involves extensive and
far-ranging legislation enacted in response to crisis. Periods of acute
financial instability have resulted in the disappearance of major institutions and the introduction of new governmental regulations. For
example, in the 1860s, problems of Civil War finance and increasing
currency disorders led the Congress to establish the national banking
system and the Office of the Comptroller of the Currency. The Congress also defined the arrangements under which national banks
would issue a national currency. Later, a series of banking panics—
periods of numerous bank failures and bank suspensions of payments—culminating with the panic of 1907, created demands for a
stronger Federal mechanism to prevent instability. This led to the establishment of the Federal Reserve System in 1913.
In the 1930s, the collapse of the banking system and the Great Depression led to major banking and securities acts that set the basic
structure of our banking and financial regulation. The legislation,
among other things, established the Federal Deposit Insurance Corporation, the Federal Home Loan Bank System, and the Securities
and Exchange Commission.
The basic problem of financial instability that existed before extensive Federal involvement to stabilize the system arose because banking is based on a fractional reserve system. Banks accept deposits
payable on demand. To meet depositors' demands, banks maintain
reserves of cash and liquid assets that are a fraction of total deposits.
In normal circumstances, the net drain on a bank's cash and liquid
assets is small, because some depositors are putting funds into the
bank while others are taking funds out. Moreover, if one bank is running short, another bank ordinarily has surplus funds. Bank funds
can be borrowed and lent in the interbank market, known as the Federal funds market. This market is extremely large and well developed.




146

In the financial panics that occurred in the 1930s and earlier, however, depositors came to distrust banks; they withdrew funds and held
them in the form of currency. One bank's deposit drain was not
offset by another bank's deposit inflow. Because bank assets consist
partly of cash reserves but mostly of loans to households and businesses, banks experiencing cash drains were forced to curtail lending,
and perhaps to liquidate outstanding loans. As a result, borrowers
were forced to scramble for funds. Business activity and employment
fell, and interest rates on business and consumer borrowing often
rose.
As the business contractions continued, previously sound firms
found that they could not service their debt, nor could unemployed
workers pay theirs. Banks that had been unaffected by the developing
crises found that their once sound loan portfolios had become shaky.
Fearing more bank failures, depositors rushed to withdraw funds
from those sound banks. As the downward pressures accumulated,
the financial crises deepened.
This brief description of the development of financial crises shows
that a financial system based on fractional reserve banking is potentially unstable: given a big enough shock or disturbance, rational and
predictable responses by banks, businesses, and households will tend
to make the problem worse. There need be no villains for a financial
crisis to occur. A crisis could develop even though every participant
acted responsibly.
Two types of governmental institutions now serve to prevent a financial panic from cascading into a collapse of the banking system.
First, the Federal Deposit Insurance Corporation, the Federal Savings
and Loan Insurance Corporation, and the National Credit Union Administration provide deposit insurance so that the failure of one unhealthy institution will not produce panic runs on healthy institutions. Second, the Federal Reserve System, as the Nation's central
bank, stands ready to provide extra liquidity to the banking system.
When a scramble for a relatively fixed amount of currency threatens
to produce a crisis, the Federal Reserve can increase the total
amount available, thus meeting extraordinary demands. A scramble
for currency forces cumulative reductions in the total money stock,
but the Federal Reserve can prevent the process from starting in the
first place by using its policy instruments to keep the money stock
growing reasonably smoothly.
CREDIT POWERS OF FINANCIAL INSTITUTIONS

A major theme running through U.S. financial history is that of
concern over the power of financial institutions, primarily banks, as
lenders, and not just as depositories. This concern is responsible for




147

many banking and financial market regulations. Issues of competition
and concentration, of fair and reasonable interest rates, and of equitable access to credit, have long been controversial topics in the regulatory debates.
It is essential that monetary and credit issues be kept analytically
separate. We have tended to extend regulation over the credit activities of financial firms because of incomplete understanding of the
monetary functions of banks. For example, although there is no evidence to support this proposition, bank failures in the early 1930s
were attributed in part to the role of banks in the securities business.
This belief led to provisions in the Banking Act of 1933 (Glass-Steagall Act) requiring the separation of banking and securities activities.
Similarly, regulations setting minimum margin requirements for securities purchases, prohibiting the payment of interest on demand deposits, and limiting the interest paid on time and savings deposits,
were based on the view that regulation of the credit markets was necessary to ensure financial stability.
The evidence, however, indicates that banking abuses are not
themselves the basic cause of financial instability. A steady stream of
bank failures occurred in the 1920s without causing generalized financial stress. On the other hand, in the absence of a proper governmental monetary framework, there is a danger of banking system collapse even if all banks individually pursue sound and conservative
banking policies.
THE FORCES OF COMPETITION

Competitive pressures have been an important force in shaping the
financial industry. Yet much of the legislation of the 1930s, and in
other periods as well, has been designed to restrict competition, particularly in banking, so as to maintain financial stability. Much of this
legislation rested on faulty analysis. Indeed, restrictions on competition have not only led to costly inefficiencies in the provision of financial services and reduced consumer choice, but also may have
contributed to instability.
The forces of competition in financial markets are powerful. The
organized exchanges and over-the-counter markets in standardized financial instruments are obviously highly competitive. What is less obvious is the competitive nature of transactions involving nonmarketable financial instruments. For example, a bank's loan to a small business or a household, which is ordinarily not a marketable financial
instrument, is often negotiated in a competitive setting. In many
areas of the country borrowers can choose among numerous possible
lenders. By shopping around, they can select the most favorable com-




148

bination of interest rate, terms, and service. In doing so, they constrain lenders to provide competitive loan rates and terms.
Although most financial markets are highly competitive for most
participants, there are exceptions. In some cases geographical restrictions reduce the competition in local markets because financial firms
from other areas are denied entry. The loss of competition primarily
affects smaller local businesses and households; larger businesses can
place deposits with, and obtain credit from, the larger financial firms
competing in regional or national markets.
One measure of the depth of competition among financial firms in
the United States is that there are more than 35,000 independent
banks, mutual savings banks, savings and loan associations, and
credit unions with approximately 100,000 offices nationwide. To be
sure, some part of this large number may reflect unit banking and
other restrictions, but it is likely that even without such restrictions
the number of depository institutions would be large. In addition, insurance companies, securities firms, money market mutual funds, finance companies, and other types of financial institutions compete
with * the depository institutions in providing many services.
Table 5-1 provides data on the numbers and assets of these institutions. Finally, many large borrowers can bypass financial intermediaries altogether by selling stocks, bonds, and commercial paper directly
to the market.
TABLE 5-1.—Number and assets of selected financial institutions as of December 31, 1982
Assets
(millions)

Type of institution

1,862,724

Commercial banks
Branches
Savings and loan associations1...

706,045

Branches

174,197

Mutual savings banks
Branches
Credit unions 2

76,120

Money market mutual funds 3

221,558

Life insurance companies

588,163

SEC-registered broker-dealers
1
2
3

Data are preliminary.
Excludes approximately 3,400 nonfederally insured State credit unions.
Data as of December 29, 1982 for funds reporting to Donoghue's Money Fund Report.

Source: Compiled by Council of Economic Advisers.

There is an important consequence of this competitive environment. Many of the regulations put in place in the 1930s that were
designed to prevent "excessive competition" have been eroded by
pressure for efficiency and innovation. In many instances profitability
can be improved by avoiding costly regulation. When firms find ways
to avoid regulation, other firms are attracted to similar strategies,




149

both to maintain their profitability and to protect their competitive
positions.
Although the forces of competition usually prevail in the long run,
the costs of unnecessary regulation should not be ignored. The
amount of unproductive labor devoted to regulatory compliance and
avoidance is far from trivial. Moreover, established firms can find
their market positions, expertise, and capital eroded as they attempt
to cope with outmoded regulatory constraints while competing
against less constrained firms. Regulation, more than restraining
competition, forces it into new channels. As a result, resource allocation is distorted and unnecessary costs are imposed on consumers,
shareholders, and taxpayers.
The importance of the competitive constraint on financial regulation can hardly be overemphasized. But neglect of it in the past has
led to many of the regulatory problems the Nation has faced. Important recent examples include the market distortions engendered by
ceilings on the interest rates financial institutions were permitted to
pay to their depositors, and the growing banking competition from
nonbanking firms such as securities firms that are not subject to traditional banking regulations.
Many observers decry the effects of competition in breaking down
regulation, but it is not possible to obtain the benefits of competition—the market constraint on interest rates, the incentives for efficiency and innovation, and the dispersion of economic power—without having these same forces work toward the avoidance of regulation. Indeed, competition may break down unwise regulation that
never should have existed.
It is often the case that legislation designed to solve one problem
creates others. Most observers agree that the danger of a financial
crisis has been reduced to an extremely low level. However, deposit
insurance, interest rate controls, and other restrictions on bank activities introduced in the 1930s—initiatives viewed at the time as contributing to financial stability—have had unexpected side effects.
Recent legislation, the Depository Institutions Deregulation and
Monetary Control Act of 1980 and the Garn-St Germain Depository
Institutions Act of 1982, have begun to deal with these new issues.
Fortunately, the new legislation has been enacted in a setting very
different from the crisis atmosphere existing in the 1930s. To be
sure, recent years have seen major stresses on the financial system;
the failure rate of financial institutions has risen. But the driving
force behind recent and newly proposed legislation has been an attempt to modernize the regulation of financial markets and institutions—to retain what is essential in earlier legislation and sweep away
what has proved unnecessary or counterproductive.




150

CEILINGS ON INTEREST RATES
The market's response to interest rate ceilings on time and savings
deposit accounts provides an example of regulatory avoidance in a
highly competitive market and the unnecessary costs incurred in the
process. Interest rate ceilings evolved from the legislation of the
1930s. The intent was to restrain "excessive price competition/' then
thought to have contributed to the banking collapse in 1933. It was
also felt that the introduction of Federal insurance of bank deposits
gave the government a special responsibility to protect the commercial banking industry from competitive pressures that might strain the
resources of the insurance funds.
Until 1966 interest rate ceilings on commercial bank deposits were
intermittently changed to remain above market interest rates. In
1966, however, market interest rates rose significantly above the rates
thrift institutions were earning on their long-term mortgage portfolios, threatening their solvency. The ceilings on bank rates were allowed to become binding in an attempt to prevent commercial banks
from bidding funds away from mortgage lending. To prevent thrift
institutions from engaging in a self-destructive bidding war, ceilings
were also extended to federally chartered savings and loan institutions and mutual saving banks.
In the short run, this emergency 1966 legislation may have helped
to stave off the bankruptcy of some thrifts. However, as the "emergency" ceilings were extended year by year, the artificially low rate of
interest on bank and thrift accounts encouraged savers to withdraw
their funds from financial intermediaries in favor of other forms of
saving. This phenomenon came to be known as disintermediation.
Chart 5-1 shows savings deposit inflows at banks and thrifts against
the interest rate gap between the ceiling on passbook accounts and
market rates. It illustrates the volatility of deposit flows with binding
interest rate ceilings in place.
In many ways the effects of the ceilings were the opposite of those
intended. For example, the ceilings were intended to ensure a stable
flow of mortgage funds. However, they actually led to widespread
disintermediation whenever rising market interest rates made other
savings vehicles more attractive, so that they effectively destabilized
the flow of mortgage money. The ceilings were supposed to make it
easier for lower-income families to afford housing by lowering mortgage rates. In fact, the interest rate ceilings advantaged wealthier investors who could meet minimum balance requirements on higher
yielding accounts, and who had access to unregulated investments.
As a result, the greatest burden of the regulation was borne by small-




151

Chart 5-1.

Savings Deposit Inflows versus
the Interest Rate Gap
Percentage points

Billions of dollars

15

Monthly

Savings Deposit Inflows^
(left scale)

10

5

;

'i . •

n
1

f •

A/

A
I/'V . . i
/ ' V 1*1 11
II /
V* I T

1

^^^ L

%

'.II

» ' /^\1"

1

In i

0

w
1

1
•

•(V;; ; i -'
• i,i

17
y,
••

-5 -

/ '

-2

I
rl if 1
u*i \\ i

">,

Interest Rate Gap- 3 /
(right scale)

10 -

1

15
1965

1

1

1967

1

1

1969

1

1

1971

1

1973

1

1

1975

1

1

1

i

1977

1979

-^Change in savings deposits at commercial banks and thrift institutions (seasonally adjusted averages
of dally figures).
-^Ceiling on passbook savings accounts at commercial banks less rate on 3-month Treasury bills
(both measured in percent per annum).
Sources: Department of the Treasury and Board of Governors of the Federal Reserve System.

er savers. Moreover there is little evidence to suggest that the rate
ceilings were effective in keeping mortgage interest rates down.
Rate ceilings were often effectively circumvented through nonprice
competition and through investment in unregulated instruments. Extensive branching, free checking and financial services, expensive
promotions, and "free" gifts were among the many forms of implicit
interest that banks and saving institutions used to attract customers.
As market interest rates rose through the 1970s, the diversion of
funds into unregulated instruments led to attempts to "tune" the
ceiling structure for different categories of deposits. The number of
different accounts subject to ceilings went from 2 in 1965 to 24 by




152

1979. These attempts to restrain disintermediation were not very successful. A new ceiling-free investment vehicle, the money market
mutual fund, became increasingly popular. Balances in these accounts jumped from $6.4 billion in 1978 to $150.9 billion by 1981.
Unintended effects and widespread opportunities for avoiding the
ceilings, among other things, led to the passage of the Depository Institutions Deregulation and Monetary Control Act in 1980, which
mandated the gradual removal of ceilings by 1986. At the Administration's request the Depository Institutions Deregulation Committee
has accelerated the phaseout of rate ceilings. By the end of 1983
fewer than one-fourth of interest-bearing deposits were in rate-restricted accounts.
DEREGULATION AND MONETARY CONTROL
Interest rate ceilings not only provoked bouts of disintermediation,
but also damaged the ability of the Federal Reserve to measure and
control the money stock. The ceilings also reduced the stability of
the link between changes in the monetary aggregates and changes in
nominal income, making the task of managing monetary policy more
difficult.
When market interest rates rose significantly above ceiling rates,
funds flowed out of traditional financial intermediaries, new deposit
categories were defined by the regulators, and money market mutual
funds emerged to offer deposit-like accounts that were beyond the
direct control of the monetary authorities. As a result, market reaction to binding interest rate controls resulted not only in a less predictable environment for making monetary policy, but also in conceptual changes in the definitions of the monetary aggregates.
The 1980 Depository Institutions Deregulation and Monetary Control Act contained provisions that, when full adjustment to them is
completed, will significantly improve the potential for accurate Federal Reserve control over the monetary aggregates. For one, the act
mandated a phaseout of interest rate ceilings on interest-bearing accounts. The Garn-St Germain Depository Institutions Act of 1982
continued the process by authorizing a new ceiling-free account, the
money market deposit account. Both steps should prevent circumstances in which these components of the broader monetary aggregate, M2, become suddenly less attractive than savings vehicles not
included in M2. As a result, new episodes of large-scale disintermediation are unlikely to occur.
A proposal currently being discussed, that would go still further in
the direction of decontrolling deposit interest rates, would allow
banks to pay interest on ordinary demand deposit accounts, and




153

would require the Federal Reserve to pay interest on required reserves held against deposits. The cost of paying interest on reserves
could be offset by increasing taxes or charges on institutions subject
to reserve requirements. There are good arguments for such a proposal. Paying interest on reserves would eliminate the disadvantage
that deposit accounts subject to reserve requirements have in relation
to nonreservable accounts, such as money market mutual fund accounts. But perhaps the strongest is that once portfolio adjustments
associated with the change are completed, paying interest on deposits
and reserves would tend to stabilize Ml velocity—the ratio of gross
national product (GNP) to the narrowly defined money stock, Ml—
and therefore facilitate monetary policy.
One cause of fluctuations in velocity is changes in the opportunity
cost of holding money—the difference between market interest rates
and interest rates on deposit accounts. Because ordinary demand deposits do not earn interest, the willingness of individuals and businesses to hold deposit balances changes inversely with market interest rates. For example, when market rates rise, depositors may attempt to economize on their holdings of non-interest bearing deposits by acquiring interest-earning assets. In the process, monetary velocity rises; for any given level of GNP, depositors hold less money.
Changes in the velocity of money complicate the job of stabilizing
nominal incomes. If interest were paid on both demand deposits and
reserves, the spread between the rate that competition would force
banks to pay on those deposits and the rate that could be earned on
other assets would reflect the resource costs associated with providing transactions services to depositors. As a result, the opportunity
cost of holding money would be more stable, and it is likely that this
would tend to stabilize Ml velocity.
Another provision in the Depository Institutions Deregulation and
Monetary Control Act that has improved the climate for monetary
control is the imposition of uniform reserve requirements for most
types of accounts. Under the legislation, the Federal Reserve is empowered to set reserve requirements, not only for member banks, but
also for nonmember banks and nonbank depository institutions, such
as savings and loans, mutual savings banks, and credit unions. The
reserve requirements cover all transaction accounts, including negotiable order of withdrawal (NOW), Super-NOW, and other automatic
transfer accounts. Uniform reserve requirements are being phased in
gradually. The process will be complete in 1987.
When uniform reserve requirements are fully phased in, the link
between reserves and transactions balances should be tighter than in
the past. Transaction deposits at depository institutions have been
subject to widely varying treatment. These institutions have faced dif-




154

ferent reserve requirements depending on their size, location, and
whether they were members of the Federal Reserve System. Some
State-chartered institutions have not been subject to any reserve requirements. As deposits have shifted among accounts subject to different reserve requirements, the lending and money-creating capacity
of the banking system would change without any change in the
supply of reserves. Thus, the relationship between reserves and deposits has been subject to unexpected changes. Uniform reserve requirements will reduce this source of variability, and enhance the
ability of the Federal Reserve to control the money stock.
GEOGRAPHICAL AND LINE-OF-BUSINESS RESTRICTIONS ON
DEPOSITORY INSTITUTIONS
Depository institutions have historically been subject to a number
of Federal and State laws that restrict their entry into new geographical markets and nonbanking lines of business. These laws were generally intended to prevent capital outflows from rural areas into financial centers and to stabilize the banking system. However, there is
little evidence that they have served either purpose. Instead, they
have impeded the development of integrated financial service companies and resulted in a financial services sector with smaller and more
numerous firms than would have otherwise developed. They also
have impeded the development of businesses that offer both financial
and nonfinancial services, despite possible economies from such a
structure.
Technological changes, limited deregulation, and the introduction
of bank-like services by securities firms and others have eroded the
force of these legal prohibitions and encouraged some expansion and
diversification by banking firms. These changes have intensified the
debate over further loosening geographical and line-of-business restraints. At issue is whether further deregulation will lead to more efficient and competitive financial services markets or promote concentration, instability, and undesirable trade practices.
GEOGRAPHICAL MARKET REGULATION

A complex set of Federal and State laws governs expansion of depository institutions into new geographical markets. In general, the
controlling law depends on the type of institution, whether it is chartered under Federal or State law, and the State in which it is located.
The most cumbersome restrictions are those imposed on commercial banks. With few exceptions, interstate branching is prohibited for
banks, whether national or State chartered. Intrastate branching of
both national and State banks is controlled by the law of the host




155

State. Historically, most States have restricted intrastate branching,
either by prohibiting it altogether or limiting the number or location
of branches (Table 5-2). Some relaxation of these restrictions has occurred, but approximately half the States still place some limitations
on intrastate branching. Federal geographical restrictions generally
conform to State policies.
TABLE 5-2.—State restrictions on intrastate branch banking, selected years, 1929-83
[Number of States]
Classification
Branching prohibited
Branching permitted but geographically limited..
Unlimited branching

1983

1961

1951

1929

18

9

17

19

24

Sources: American Bankers Association and Board of Governors of the Federal Reserve System.

The restrictions on geographical expansion by State savings and
loan associations are similar to those on banks, except that many
fewer States limit intrastate branching. There are no statutory limitations, intrastate or interstate, on branching by Federal savings and
loan associations. However, the Federal Home Loan Bank Board
limits interstate branching except where necessary to rescue failing
institutions, and it observes the limitations imposed by the few States
that do restrict intrastate branching of State-chartered savings and
loans.
States generally enacted geographical restrictions on bank expansion for two reasons. First, it was thought that such restrictions
would prevent the outflow of funds from localities into financial centers and thereby increase the availability of loans to farmers and
small businesses. Second, the laws were intended to preserve local
ownership and management of banks.
There is no evidence that branching limitations do in fact constrain
the flow of loanable funds. Interinstitutional and interregional capital
markets are so well developed that local deposits are as easily loaned
out across the country as across the neighborhood.
Even the effect of these laws in promoting local control is questionable. Depository institutions have been able to circumvent the
prohibitions either by using holding companies or by offering only
limited services in geographical areas where they cannot establish
regular branches. In all but five of the States that impose restrictions
on intrastate bank branching, for example, bank holding companies
may be used to create a statewide banking system by acquiring multiple charters. The growth in the use of multibank holding companies
over the past 20 years, from approximately 50 independent companies holding less than 10 percent of total bank deposits to more than
600 companies with over 57 percent of total bank deposits, is attrib-




156

utable in substantial part to the ease with which they can be used to
circumvent intrastate branching limitations.
Until the enactment of the Bank Holding Company Act of 1956,
the holding company structure could be used to circumvent interstate
as well as intrastate branching prohibitions. Provisions of the act,
however, prevent a bank holding company from acquiring more than
a small interest in a bank outside the States in which it is already engaged without the approval of the State to be entered.
In 1970 changes to the Bank Holding Company Act permitted
most banking-related services to be offered interstate, except for deposit-taking. The 1970 changes also narrowed the definition of
"bank" to include only institutions that both accept demand deposits
and make commercial loans. As a result, bank holding companies and
others have been able to establish interstate networks of "nonbank
banks," consumer finance companies, mortgage companies, and the
like, that escape regulation by either not accepting deposits or not
making commercial loans. More recently, the Garn-St Germain Depository Institutions Act of 1982 empowered bank regulatory authorities to permit acquisition of failing institutions across State lines.
These changes, plus recent advances in communications and data
processing technologies that appear to have reduced the costs of
managing multi-office banks, have led to a substantial increase in the
level of interstate banking activity. Of approximately 55,000 offices
engaging in banking-related activities, more than 7,800 are now located outside the home State of the parent entity. Even these numbers understate the amount of interstate banking activity because
they do not reflect the substantial use of shared interstate automated
teller machine networks or the phenomenal growth in the provision
of bank-like services by interstate securities firms.
The rapid pace at which de facto interstate banking is emerging—
despite seemingly substantial legal barriers—is one obvious indication of the strength of the forces for change within the financial services industry. These forces are also manifest in the numerous proposals for changes in both Federal and State law. Three New England
States have recently adopted laws that provide for entry by out-ofState banks headquartered in other New England States with similar
laws, and similar regional reciprocal entry arrangements are under
active consideration in several other areas of the country. Other
States have modified their banking laws to permit at least some entry
from out-of-State, and the evolutionary movement away from intrastate limitations continues. At the Federal level, a number of legislative proposals are now pending that would reduce Federal restrictions on interstate banking.




157

ECONOMIC ISSUES IN GEOGRAPHICAL MARKET DEREGULATION

If geographical restrictions are relaxed, the number of independent
banking entities would almost certainly be reduced. States with unitbanking laws presently have approximately 107 independent banking
entities per million residents, compared with 72 for limited branching
States and only 20 for States with unrestricted branching. The most
credible explanation is that branching restrictions impede access by
large banks to deposit accounts and small loan business outside their
home territories. Deposit accounts have historically been the lowest
cost source of funds for banks, and full-service branches are important in marketing consumer and small business loans. Impeded
access has therefore inhibited the growth of large firms and favored
smaller firms.
However, geographical market deregulation would probably increase the number of banking offices operating in most communities.
"Unit-banking*' States, those that prohibit all branching, have approximately 182 commercial bank offices per million residents compared with 243 offices per million residents for other States. Although other factors may contribute to the difference, branching prohibitions are probably a significant reason for the lower ratio of
banking offices to population in unit-banking States.
On balance, these two changes should increase competition and
benefit consumers. The relevant market for retail deposits and small
loan customers is compact—the locality or even the neighborhood.
Although geographical market deregulation is likely to decrease the
total number of depository institutions nationally, each competitor
will compete in more local markets. Moreover, the number of potential entrants into each local market will also increase.
Nor would deregulation eliminate all smaller institutions. A recent
study concluded that there are unlikely to be large, if any, economies
of scale for most important banking services. The best existing data
indicate that the costs of providing traditional banking services reach
a minimum for institutions in the $50 million to $100 million asset
range. Moreover, it does not appear that most bank customers will
pay a premium to bank with interstate firms. The experience in
States without intrastate branching restrictions is that many small institutions survive and prosper. In fact, smaller banks and thrifts not
only coexist with larger ones, but generally have higher profitability
on bank assets. Although some institutions, particularly less wellmanaged ones, will disappear as separate entities, they will most
likely be acquired by more efficiently run organizations that will operate them as branches.




158

LINE-OF-BUSINESS RESTRICTIONS

Federal law embodies a long-standing policy of separating banking
from unrelated lines of commerce. Today, as a general rule, banks
may not engage in nonfinancial businesses unrelated to banking,
either directly or through subsidiaries, nor may bank holding companies or their affiliates. Similar, though somewhat less stringent, prohibitions apply to savings and loan associations and holding companies controlling two or more savings and loan charters. Holding companies that control a single savings and loan association or any
number of "nonbank" banks, however, are not subject to Federal
line-of-business limitations.
The line separating commercial banking from other financial services is much less distinct. Until the 1930s, State and national banks
regularly engaged in underwriting and dealing in securities, often circumventing legal prohibitions by pursuing such activities through affiliated companies. Because of the popular belief that banks had contributed to the Great Crash by promoting speculative securities and
unloading worthless issues into trust and customer accounts, the
Banking Act of 1933 (the Glass-Steagall Act) was passed. Provisions
of the act attempted to divorce banking and the securities industry by
barring banks from underwriting or dealing in nonbank securities,
whether debt or equity.
The Glass-Steagall separation is incomplete in a number of ways.
First, the act's prohibitions against the affiliation of banks with securities firms apply only to banks that are members of the Federal Reserve System, and not to the many State-chartered nonmembers. All
banks, however, are prohibited from underwriting securities directly,
and securities firms may not take deposits. Second, Glass-Steagall
allows all banks to distribute and trade in general obligation government securities. Third, the act authorizes banks to buy and sell any
securities for the account of bank customers, provided that such
transactions are "without recourse" against the bank.
Until recently, the gaps in the Glass-Steagall Act, except those permitting trading in government securities, were inconsequential.
Banks did not aggressively pursue brokerage business because regulatory restraints made it unprofitable. In January 1983 these restraints were relaxed, and as a result thousands of depository institutions now engage in securities brokering.
ECONOMIC ISSUES IN LINE-OF-BUSINESS DEREGULATION

Proposals to ease line-of-business restrictions on depository institutions have spurred much debate. Proponents argue that economic efficiency would be increased by permitting these institutions to underwrite and deal in securities and by expanding their power to engage




159

in collateral lines of business such as insurance underwriting and
sales, real estate development, and management consulting. Opponents argue that these changes would increase the riskiness of banking, result in unacceptable concentrations of market power, lead to
self-dealing and conflict-of-interest abuses by banking firms, and be
unfair to bank competitors.
Product-line deregulation may promote economic efficiency in two
ways. First, it may reduce the total cost of providing multiple services
by consolidating their provision within a firm. Such savings can result
from spreading fixed costs over more activities, improving communications, and effecting synergies in production. Second, customers
may benefit from the extra convenience associated with conducting
their business with a single firm.
The magnitude of the economic benefits from relaxing line-of-business restrictions is uncertain. Specific cost data for depository institutions and their customers are limited, and reliable estimates of the
cost savings from product line deregulation do not exist. Over the
past several years, however, several large firms have integrated over a
broad spectrum of businesses, including insurance, real estate, and
securities underwriting and brokering. Although it is too early to
assess the economic success of these ventures, their development is
evidence that the market believes that substantial economies from the
integration of these businesses are possible. Indeed, much of the
pressure for reconsidering line-of-business restrictions on banks has
come from members of the banking community who argue that relaxation of these restrictions is necessary for them to meet competition
from nonbanking firms offering integrated services.
Product line diversification does, however, raise issues of some
concern regarding banking stability. The existence of Federal deposit
insurance gives insured institutions an incentive to take undue risks
in the hope of earning greater than normal returns. Accordingly,
much of the supervisory efforts of banking regulators is directed at
preventing excessively risky banking practices. As a practical matter,
as the range of business activities increases, it may become much
more difficult for regulators to thwart excessive risk-taking.
The Administration's proposed legislation, the Financial Institutions Deregulation Act, strikes a balance by easing restrictions on
nonbanking activities but requiring that they be conducted only by
separate corporate affiliates that are not bank subsidiaries. This approach has two significant advantages. First, by removing nonbanking
activities to affiliates, the bank itself can be regulated and supervised
on the basis of the traditional methods developed by the regulatory
agencies over many years. Second, because the affiliates are to be
subsidiaries of the holding company rather than of the bank itself,




160

the bank would be insulated from any financial problems that occur
in the subsidiary.
There is, of course, no way to guarantee that difficulties in an affiliate will not affect the bank. But with proper safeguards the problems
can be minimized. Moreover, it is important to recognize that attempts to seal off banking from collateral activities is a recipe for an
endless expansion of regulation. Brokerage firms are now expanding
bank-like activities rapidly. Extending regulation to these bank competitors would simply push regulatory avoidance to another channel.
There is, in addition, far more danger of financial instability from unregulated banking substitutes than from properly supervised banks
permitted to expand their powers within well-designed corporate
structures.
A similar point may be made with respect to predictions that increases in self-dealing and conflicts of interest will result from repeal
of Glass-Steagall. The potential for these abuses is already present in
both commercial and investment banking. For example, broker-dealers already represent both purchasers and sellers, deal for their own
account, provide investment advice, manage mutual funds, and act as
fiduciaries with respect to trust or discretionary accounts. Bank trust
departments may transact in the securities of bank customers.
In fact, legal and market forces have limited self-dealing and conflict-of-interest abuses. Legal standards governing fiduciary behavior
are strict, and the conduct of fiduciaries is subject to regulation. In
addition to legal mechanisms, market forces are extremely important.
Systematic abuses by a bank's trust department would, for example,
reduce the return on the portfolios it manages, causing it to lose
business to competitors. Although one cannot say that no such
abuses will occur, existing controls should keep them to a minimum.
Line-of-business deregulation also poses issues of fairness. Opponents of changes to existing law have argued that depository institutions could operate collateral lines of business with low-cost capital,
benefiting from access to the Federal Reserve's discount window, and
an implicit subsidy from Federal deposit insurance. They charge, for
example, that some industrial companies and retailers have acquired
a deposit-taking "nonbank" bank or a single savings and loan association to finance their own activities or customer purchases of their
products and services with low-cost capital.
This argument ignores the fact that the profitability of a consolidated enterprise cannot be increased by charging an affiliated business or customer a submarket rate of interest. Any attempt to do so
will reduce the profitability of the bank, leaving the earnings of the
enterprise unchanged. In other words, if a bank has access to lowcost capital, it will be profitable to its owner even if the bank pro-




161

vides no financing whatsoever for the parent company or its customers. As long as the capital market is competitive, the cost-of-funds
differential between financing customers from bank deposits on the
one hand and from selling commercial paper on the other will only
be enough to cover the costs of operating the bank and to earn the
going rate of return on the assets invested in the bank.
Another argument is that financial intermediaries would be able to
compete unfairly by tying loans to the purchase of other services. It
is not likely, however, that many financial intermediaries would find
tying arrangements advantageous. Tying arrangements are a way in
which a firm with market power can circumvent laws against price
discrimination and increase its profits by selling different customers
different quantities of tied-in products. It is unlikely that many banks
have such market power, but even if some do, they could directly
price discriminate by charging different interest rates to different customers.
Banking organizations, however, enjoy certain regulatory and tax
advantages over nonbank competitors, particularly securities firms.
Banks are largely exempt from regulation under Federal and State
securities laws and, therefore, could enjoy a cost advantage in
broker-dealer, underwriting, and investment management activities.
Moreover, in determining taxable income depository firms may
deduct interest paid on deposits, even if they are used to finance
holdings of tax-free securities. This provision of the tax law may give
them an advantage in carrying inventories of securities relative to
nonbank securities dealers.
The problem of asymmetrical tax and regulatory treatment could
be solved, either by modifying tax and securities laws or by allowing
only affiliated entities to undertake such activities. The latter approach has been adopted in the Administration's Financial Institutions Deregulation Act. Under this act affiliated entities would not be
exempt from the securities laws, nor be subject to favorable tax treatment.
DEPOSIT INSURANCE REFORM
In today's financial market, the traditional depository institutions,
commercial banks, and thrifts compete with money market mutual
funds and brokerage firms in offering highly liquid deposit accounts
that pay competitive rates of interest. Commercial banks and thrifts,
however, retain a unique position relative to their newer competitors,
because their liabilities are federally insured. The system of Federal
deposit insurance was created as part of the Banking Act of 1933.
Under this law the Federal Deposit Insurance Corporation (FDIC) in-




162

sures deposit accounts for banks that are members of the corporation. A year later the Federal Savings and Loan Insurance Corporation (FSLIC) was established to provide a similar arrangement for the
savings and loan industry.
The purpose of the FDIC was to eliminate the financial panics and
bank runs that had long plagued the economy, one of which culminated in the collapse of the banking system in 1933. Measured by
that criterion, deposit insurance has been tremendously successful.
There is wide agreement that earlier problems with financial market
instability were not solved by creating a national currency, nor by imposing reserve requirements on banks, nor by the establishment of
the Federal Reserve System, but by deposit insurance. Chart 5-2 illustrates the dramatic decline in bank failures after the FDIC was established.
Chart 5-2

Bank Failures
Number
4000

—

3500
Number (Enlarged Scale)
3000

60

2500

-

2000

1500

I

-

-

40

-

A
0
1960

1

1000

500

0

-

J

I l l l l l l
1970

1980

A

-

/
I t I Illlllll
1921

4~H~ht44J I I I i I I I I I I I i I I I ] I 111 I I 111111 I 111 I I

1930

1940

1950

1960

Note.—Data for 1983 estimated.
Sources: Comptroller of the Currency and Federal Deposit Insurance Corporation.




163

1970

I I IIJO.
1980

The volume of deposits insured by the FDIC and FSLIC has increased greatly in recent years as coverage limits have been raised
and as new insured accounts have been introduced. Since 1950, the
limits have increased at faster rates than inflation, and now stand at
$100,000 per depositor. The introduction of money market deposit
accounts in mid-December 1982 and ceiling-free Super-NOW accounts in January 1983, and the elimination of ceilings on most small
time deposit accounts in October 1983 have also produced increases
in the amount of insured deposits, as many customers have switched
out of the uninsured accounts issued by money market mutual funds
into the insured deposit accounts issued by banks and thrifts.
Federal deposit insurance gives banks, savings and loans, and
credit unions an advantage in the competition for funds, and alters
the structure of incentives in the industry. To some extent these advantages have been offset by competition-inhibiting restrictions on
the amount of interest payable on deposit accounts, on allowable activities, and on opportunities for expansion into new markets. In
recent years, deregulation and private market innovation have eliminated or reduced the force of many of these restrictions on competition, thereby increasing efficiency in the industry. However, the FDIC
and the Federal Home Loan Bank Board, the parent of FSLIC, have
argued that their ability to control risk-taking by institutions offering
insured accounts has been impaired in the new environment. As a
result, the deposit insurance system is currently being reassessed.
Because most of the expansion in the range of opportunities available to insured depository institutions has taken place only recently,
conclusive evidence on the effect of these changes on failure rates of
insured institutions and the dollar magnitude of actual payouts is difficult to determine. There has been a large increase in the number of
failures in recent years. But this increase can be attributed primarily
to the depth of the recent recession, which has exacerbated problems
associated with insufficient diversification and mismatches between
asset and liability maturity structures at some institutions that have
long existed.
Nevertheless, changes in the risk characteristics of financial institutions that are taking place now may have a significant effect on failure rates in the future. In addition, financial institutions are still refining their strategies and tactics in the new financial environment,
and so further changes in market practices can be expected.
THE IMPACT OF DEPOSIT INSURANCE

If deposit insurance were unavailable, depositors would have incentives to evaluate the riskiness of a depository institution's balance
sheet and policies, because their deposits would be at risk. The exist-




164

ence of these incentives, and competition among intermediaries for
funds, would impose strong discipline on managers to adopt sound
portfolio policies. One obvious consequence of insuring deposits is
that the incentives of insured depositors to evaluate risk are eliminated, so that market discipline is greatly diminished. As a result, it is
up to the insurer either to design an insurance system that provides
the correct incentives for the intermediaries or to impose restrictions
on intermediaries that limit possibilities for excessive risk-taking.
Currently, the premiums charged by the FDIC and FSLIC are proportional to the amount of assessable deposits regardless of the riskiness of the intermediary's assets. Under this system, insured institutions have an incentive to take on more risk than they would otherwise, either by making riskier loans or by increasing leverage. Doing
so does not subject them to higher premiums, and they obtain the
benefits of the higher yields that normally accompany the assumption
of greater risk.
With premiums unrelated to risk, therefore, regulation of insured
intermediaries is justified. It is not coincidental that many restrictions
on competition accompanied the introduction of deposit insurance in
the Banking Act of 1933. In fact, the primary thrust of financial legislation through the 1930s, much of which is still in place, was to supplant or limit competition in the market for financial services, both to
prevent bank failures and to protect the assets of the insuring agencies.
The undesirable consequences associated with many of these restrictions have already been discussed. To some extent the restrictions have simply redirected competition into other areas, some of
which are socially wasteful, and have caused the industry to evolve in
a less efficient manner than it otherwise would have. Moreover, to
the extent that competition has been limited, the restrictions have
served to reduce incentives to lower costs, and therefore prices.
Reform must focus on incentives for limiting risk, rather than on restrictions on competition.
PROPOSALS FOR REFORM

Many proposals have been advanced to strengthen private incentives to control risk-taking by institutions offering insured accounts.
The proposals can be grouped into the following categories:
•
•
•
•
•

Tie insurance premiums to some measure of risk.
Strengthen capital requirements.
Increase the risk exposure of large depositors.
Strengthen disclosure requirements.
Privatize all or part of the deposit insurance system.




165

It appears that none of these proposals, taken alone, offers a completely satisfactory solution, but a combination could accomplish the
goal of strengthening private incentives to control risk-taking, while
preserving stability of the financial system.
Relate Insurance Premiums to Risk

Charging insurance premiums that reflect the riskiness of an institution's balance sheet and management capabilities is a solution with
great theoretical appeal. If the premium paid to the insurer were actuarily fair, in the sense of covering the expected losses of the insurer given the risk and capital of the firm and the terms of the insurance contract, the incentive to take on additional risk at the expense
of the insuring agency would disappear. This approach would seem
to obviate the need for extensive regulatory constraints. Insured institutions would be free to structure their assets and liabilities and to
compete in the financial marketplace on terms of their own choosing.
Those electing to adopt aggressive strategies with respect to risk and
return would simply pay higher premiums to compensate the insurer
for their higher expected claims.
There are problems with risk-related premiums, however, stemming from the difficulties associated with measuring risk properly
and determining an appropriate schedule of premiums. One important measurement problem arises from the role that diversification
plays in reducing risk. The riskiness of a portfolio cannot be evaluated simply by examining the riskiness of individual assets. Portfolio
risk depends more on the interrelationships among the assets and
how they match up with the structure of liabilities.
Banks and thrifts have traditionally faced different types of portfolio risks. This is reflected in the experiences of failed or troubled institutions in these two industries. A major cause of bank problems
and failures has been insufficient diversification. For example, many
of the banks that have recently failed, or are now experiencing difficulties, had heavily invested in real estate loans, loans to the oil and
gas industry, or to foreign borrowers. For savings and loans the principal problem has been excessive exposure to interest rate risk—the
result of borrowing short, by accepting deposits either payable on
demand or with comparatively short duration, and lending long, by
writing long-term, fixed-rate mortgages. Until recently, savings and
loans were subject to regulatory and tax provisions that encouraged
them to accept substantial interest rate risk, since the provisions provided strong incentives to invest in long-term fixed-rate mortgages
and since they were prohibited from reducing their exposure by
other means.
In principle it is possible to quantify certain types of risk, for example, interest rate risk, provided that complete enough balance sheet




166

information is available. However, other types of portfolio risks are
more difficult to assess objectively. The bank examination process,
though important, contains subjective elements that make it unsuitable as an exclusive basis for setting premiums.
For these reasons, sole reliance on risk-based insurance premiums
is impracticable. However, risk-based premiums may play a useful
role as part of a package of reforms designed to deter excessive risktaking. To implement a risk-based system, the elements of risk that
are measured must be clearly related to failure, and the premium
structure must not create perverse incentives for institutions to
assume other risks that are not used as a basis for premiums. Given
the limited present ability to meet these criteria, premium differentials across risk categories should probably be kept small, at least initially.
Strengthen Capital Requirements

Ratios of deposits to bank capital for the banking .and thrift industries have increased steadily over the past 30 years. Under the
present policy for pricing insurance, it may be advantageous for
owners of insured intermediaries to drive these ratios to very high
levels, unless other restrictions are in place. Strengthening capital requirements would be advantageous for two reasons. First, the additional capital would directly provide an extra margin of safety both
for the insuring agencies and uninsured depositors. Second, by placing more of an intermediary's own capital at risk, incentives to control risk-taking would be strengthened.
It may be desirable to allow strengthened capital requirements to
be satisfied either through the issuance of new equity or subordinated debt—bonds whose claim on bank assets is subordinate to the
claims of depositors and the insuring agencies, but prior to the
claims of equity holders. Bondholders would be another class of investors with incentives to monitor an intermediary's practices.
Proposals that rely solely on strengthened capital requirements
without any other reforms have some serious drawbacks. For one, the
question of the appropriate level of capital should not be addressed
apart from the riskiness of the rest of an institution's portfolio—two
institutions with identical ratios of deposits to capital can represent
very different risks to the insuring agency. There are also problems
with properly measuring net worth. Large discrepancies can exist between true and accounting values of assets and liabilities. The measure of true net worth that many prefer—the market's estimate—is
generally not available since the majority of financial institutions are
not publicly held. Further, the market value of banks that are publicly
traded may reflect the guarantees that are implicit in deposit insurance.




167

Increase the Risk Exposure of Large Depositors

Many observers have argued that any reform of the deposit insurance system should include provisions that would increase the risk
exposure of large depositors as a way of imposing greater market discipline. Insured depositors presently have little or no incentive to
evaluate the soundness of an intermediary. If virtually all depositors
are effectively insured, the discipline of the market that would come
from private sector scrutiny of the intermediary's policies is lost. The
existence of ceilings on the amount of insured deposits in any given
account suggests that some large depositors are at risk, so that intermediaries competing for their business would be subject to private
sector scrutiny. However, this discipline has not been important in
recent years.
The reasons for the current lack of market discipline differ somewhat for savings and loans and commercial banks. Savings and loans
have few uninsured deposits—fewer than 4 percent of total deposits
at the end of 1982. In contrast many banks have sizable uninsured
deposits. The FDIC has estimated that as of June 1983 approximately
27 percent of all domestic deposits in commercial banks were uninsured. For large banks with more than $10 billion in deposits the
figure is approximately 40 percent, and for the largest money center
banks the figure approaches 80 percent. However, particularly for
medium- and large-sized banks, the FDIC's procedure for handling
failures—which involves arranging a merger with a sound bank while
covering the failed bank's losses—has meant that few uninsured depositors have suffered losses. Since the establishment of the FDIC,
no depositor has ever incurred a loss as a result of a failure of a
member bank with more than $1 billion in total deposits.
A recent FDIC report submitted to the Congress on the subject of
deposit insurance reform stresses the importance of restoring the
perception that large depositors are at risk, possibly by abandoning
the policy of arranging mergers. However, as recently as October
1983, the FDIC provided de facto insurance for uninsured depositors
at a large bank by arranging a merger. The FDIC appears to face a
classic problem in its management of bank failures: it would like to
represent itself as being willing to permit uninsured depositors to
suffer losses so as to restore private incentives to monitor risk, but
for any given failure the FDIC often finds it cheaper to assume the
losses in the process of arranging a merger. Moreover, under present
arrangements, doing otherwise might require a lengthy bankruptcy
proceeding perhaps lasting years and tying up billions of dollars of
assets and deposits. If the institution were large, this could be highly
disruptive.




168

One factor complicating the task of increasing the risk exposure of
large depositors is the emergence of the deposit brokerage industry.
In recent years a network of brokers has emerged to parcel large deposits into insurable increments and place them in financial institutions nationwide. Deposit brokers perform the useful function of facilitating interregional flows of funds. However, they also have been
known to place insured funds in banks without any credit analysis, or
worse yet, place them in known problem banks in order to collect
higher fees. In an attempt to check this type of activity, both the
FDIC and FSLIC have recently announced that problem institutions
would be subject to limitations on the amount of brokered deposits
they could accept.
A common prescription for increasing market discipline is to lower
the limits on insured accounts. However, the emergence of the deposit brokerage industry suggests that unless the limits are lowered
very substantially, the impact may be slight. A more promising way to
accomplish large reductions in the coverage levels, and at the same
time protect small depositors, would be to return to the fractional
coverage scheme that was a part of the original Federal deposit insurance legislation. The act President Roosevelt signed into law
called for full coverage of the first $10,000 of a deposit, 75 percent
coverage of the amounts between $10,000 and $50,000, and 50 percent coverage for amounts above $50,000. This plan never took
effect, as a temporary plan adopted by the Congress was extended
indefinitely. A partial coverage plan of this type is in effect in the
United Kingdom, where 75 percent of deposits in failed banks are reimbursed up to a ceiling amount.
There is one significant advantage of a fractional coverage system.
When a failure takes place, depositors maintaining funds above the
ceiling amount for full coverage could receive immediate payment up
to the amount of their coverage. Additional amounts could be paid
later, depending on what is realized from the failed institution's portfolio. As a result, the disruptive effects on the payments system that
could be associated with the liquidation of a large institution's portfolio would be minimized.
There is, however, an important tradeoff associated with implementing a fractional coverage system. In order for market discipline
to be a credible deterrent to excessive risk-taking by financial intermediaries, uninsured depositors must be prepared to move funds out
of troubled institutions. Exposing large depositors to greater risk,
therefore, increases the likelihood of deposit flight from those institutions. Because deposits can be moved quickly and cheaply to a new
institution, such a system might mean that an intermediary subject to
moderate but well-reported problems would experience deposit out-




169

flows that could prevent its recovery. The recent expansion of access
to the Federal Reserve discount window to both nonmember banks
and thrift institutions should be important in preventing unwarranted
deposit flights from causing the failure of marginal institutions.
Improve Disclosure

Any proposal that relies heavily on increased market discipline
should be accompanied by improved disclosure and strengthened reporting requirements. Federal bank regulators have not required insured institutions to carry assets and liabilities on their balance
sheets at market value, or until recently to report financial information that would permit an assessment of the interest rate risk and
credit risk to which an institution is exposed. However, the Securities
and Exchange Commission does now require bank holding companies to report some market value data and data that could lead to an
assessment of interest rate and credit risk.
Privatize Deposit Insurance

The provision of deposit insurance is now a virtual Federal monopoly. Consequently, it is impossible to use market measures to assess
the performance of the FDIC and FSLIC in setting premiums, either
under the current system or under a new system with variable premiums. Further, if incorrect assessments were applied under a system of
risk-related premiums, the insured institutions might have few other
sources of insurance. In principle, a private market for deposit insurance would seem to avoid these problems; market forces could be
relied upon to guarantee that intermediaries were evaluated fairly. In
addition, private insurers would have an incentive to share many of
the costs of monitoring their behavior. Privatizing deposit insurance
might, therefore, be another means of bringing the discipline of the
market to bear on financial institutions.
It may be possible to introduce some elements of a joint publicprivate deposit insurance system. There is already some private participation in the market for financial guarantees. For example, at least
one major money market mutual fund has obtained private insurance
for its shareholders, and private insurance of mortgages and credit
union deposits is well established.
It is not likely, however, that responsibility for insuring deposits
can be shifted to any great extent to the private sector. Some ultimate Federal guarantee may be necessary to maintain public confidence. In addition deposit insurance was established primarily to
protect against the risk of a banking crisis—the prospect of many
bank failures occurring simultaneously. It is precisely this kind of risk
that the private insurance industry is least equipped to handle.




170

SUMMARY

The benefits of a credible deposit insurance system should be
achievable in an environment with fewer restrictions than the present
one, provided certain basic reforms are implemented. A deposit insurance system tied to risk would be a significant reform. Strengthened capital requirements, the introduction of fractional coverage for
relatively large accounts, and improved disclosure should also play
roles. A deposit insurance system relying more heavily on incentives
of this kind can be expected to involve significantly lower net costs
than restrictions on entry, activities, and the pricing of financial services that serve either to limit competitive pressures in the marketplace, or to redirect competition into other areas.

REFORM OF THE REGULATORY STRUCTURE
Today the regulatory structure is characterized by considerable
overlap and duplication of function among numerous Federal and
State authorities. In December 1982 the Administration announced
the creation of the Task Group on Regulation of Financial Services,
chaired by the Vice President to study Federal regulation of financial
institutions and to develop proposals for comprehensive reform. A
principal objective of the Task Group has been to address the overlap and duplication in Federal banking regulation.
The regulatory structure for depository institutions developed in a
piecemeal fashion over many decades. Until the Civil War, all banking activities, with only minor exceptions, were conducted by Statechartered institutions. Between 1863 and 1865 the Congress enacted
legislation that was designed to force State banks to recharter under
Federal law. State-chartered banks did not disappear, however, largely because State bank regulations were often less stringent than Federal regulations. Hence a dual banking system developed, in which
banks could operate with either a Federal or State charter, under the
jurisdiction of separate regulatory authorities. This aspect of the regulatory structure for banking, and more recently thrifts, has played
an important role in shaping the industry. It has fostered innovation
by permitting many possible paths of evolution instead of one. Two
important examples of innovations first permitted by State regulators
are branch banking and NOW accounts.
Successive layers of Federal regulation of commercial banks were
applied in response to financial crises and the emergence of new institutions and forms of organization. A bank today can hold a national charter, in which case it is supervised by the Comptroller of the
Currency, or a State charter. All nationally chartered banks are also
members of the Federal Reserve System, but State-chartered banks




171

can be either members, in which case they are regulated by the Federal Reserve Board, or nonmembers, in which case they are regulated
by the FDIC. However, holding companies of both national banks
and State nonmember banks also fall under the jurisdiction of the
Federal Reserve. Because of tax, regulatory, and financing advantages, the holding company form of organization has become dominant. As a result, the Federal Reserve has at least some jurisdiction
over the majority of commercial banking entities, particularly the
larger ones. Although Federal deposit insurance is not mandatory for
State-chartered banks, virtually all commercial banks are members of
the FDIC, and so come under its jurisdiction as well. Chart 5-3 illustrates the complexity of current arrangements.
Chart 5-3

Existing Regulation of
Banks and Their Holding Companies
December 31,1983

Regulatory Agencies Board of
Governors
of the
Federal
Reserve
System

Comptroller
of the
Currency

Federal
Deposit
Insurance
Corporation

State
Bank
Departments

I

Securities
and
Exchange
Commission

Department
of
Justice

1

J
n

f
NATIONAL
BANK

j

1

I

(
STATE
MEMBER
BANK

HOLDING
COMPANY

Types of Regulated Firms

i
HOLDING
COMPANY

r
STATE
NONMEMBER
BANK

HOLDING
COMPANY

-

-^Antitrust enforcement only.
Source: Vice President's Task Group on Regulation of Financial Services.

Because several agencies typically share responsibility for regulating a particular bank, and because different banks are regulated by
different agencies, depending on their charter and form of organization, gaps and overlaps of regulatory power among the many agencies have developed. In addition, these agencies have sometimes had
conflicting objectives and motivations in dealing with regulatory




172

issues. For example, the Federal Reserve has traditionally exerted a
conservative influence, while the chartering agencies at both the Federal and State levels have been more inclined to encourage growth
and development.
An advantage of the regulatory structure for the savings and loan
industry is that the problems of duplication of effort and gaps and
overlaps of authority are much less pronounced, since the FHLBB
performs the functions that three separate Federal agencies—the
Federal Reserve, the Comptroller of the Currency, and the FDIC—
now perform for commercial banks. Of course, if federally insured, a
State-chartered savings and loan association is regulated by both
FSLIC and its State-chartering agency.
In the 1930s when separate regulatory structures were established
for commercial banks, thrifts, and securities dealers, those firms comprised distinct industries with little competition across industry lines.
Because of differences in the products and services offered (for example, between brokerage houses and commercial banks), or between customer groups (for example, commercial borrowers using
commercial banks and small savers and home buyers using savings
and loan associations), regulatory decisions applying to those industries could be made independently. Consequently, there was, at first,
little reason to consider reform of the regulatory structure.
In recent years the lending and investment powers of thrift institutions have been broadened as a result of both Federal and State legislation. As a result of these new powers, thrift institutions may now
engage, with some limitations, in virtually all the activities that are
lawful for commercial banks. This new state of affairs has highlighted
differences in their regulation and supervision. For example, it is now
legally possible for a thrift institution to become functionally equivalent to a commercial bank, while remaining eligible for regulatory
programs designed to create incentives for traditional thrift activities.
In addition, banks and thrifts now face aggressive new competition
from brokerage firms, money market mutual funds, and "nonbank"
banks in their traditional markets. At the same time, technological
change, notably computer-based accounting and communication, has
opened up opportunities for substantial increases in the scope of
business across a broadening range of products and customer
groups. As a result, there has been renewed interest in reforms that
would produce a level playing field on which the various providers of
financial services could compete on equal terms, and that would
permit emerging economies in the provision of financial services to
be exploited to the fullest extent possible.
The long-standing opportunities banks have had for selecting a
charter and form of organization that places them under different




173

primary regulators, and the growing similarities in the legal powers
of banks and thrifts, have implications for the behavior of the regulatory agencies. The various regulatory agencies must offer sufficiently
attractive terms to institutions operating under their charters to
maintain their existing clientele bases and to attract new firms. There
are different opinions as to whether this situation is desirable. One
view is that the present scheme leads to "competition in laxity" and
therefore insufficient restraints on unsound practices. Another view is
that it tends to eliminate the most onerous regulatory strictures, and
fosters innovation and efficiency.
Because of the enormous changes that have occurred in financial
markets in recent years, the regulatory structure has become progressively out of date. As a result the case for regulatory reform is now
very strong. The Administration's Task Group on Regulation of Financial Services is expected to issue its report in early 1984. The
report will focus debate and attention on a specific set of legislative
proposals to streamline Federal regulation and reduce the overlap
between Federal and State regulators.
CONCLUSIONS
Of all the goals of financial regulation the goal of financial stability
is paramount. In the 1930s, financial instability was widely attributed
to the natural operation of competitive markets, and this view supported a very substantial extension of regulatory controls over financial markets. More recently, however, a renewed respect for the efficiency of competitive markets has developed, as well as increased recognition of the costs of regulation. Regulation tends to spread in unproductive directions and often causes industries to evolve less efficiently than they otherwise would. For these reasons, the promotion
of efficiency by furthering competition is also an important regulatory goal. The purpose of regulation should not be to protect poorly
managed individual firms from failure, but rather to prevent such
failures from shaking the stability of the financial system as a whole.
Regulations should be designed to achieve stability of the system,
while individual firms are afforded the maximum possible freedom to
compete and innovate.




174

CHAPTER 6

Review and Outlook
IN 1983 THE U.S. ECONOMY experienced a year of vigorous cyclical recovery. As the economy snapped back from recession, employment increased by 4.0 million persons and the unemployment
rate fell by 2.5 percentage points. Real gross national product (GNP),
the broadest measure of output, rose by 6.1 percent, while industrial
production rose by 16.1 percent. These gains in employment and
output were achieved in an environment in which the rate of inflation
continued to decline—the increase in the consumer price index of
3.8 percent was the lowest in 11 years. Both productivity and real
wages rose, continuing an advance that began in 1982. For both
series the 2-year increase was the largest in 6 years. Major stock price
indexes rose significantly through the first half of the year and then
leveled off, while interest rates increased somewhat starting in the
spring. The U.S. dollar appreciated in the foreign exchange market,
continuing a trend that began in late 1980.
The performance of the economy involved much more than a
simple reversal of the output declines experienced during the recession. The decline in inflation and resumption of productivity growth
are expected to provide the base for a long continuing expansion in
coming years. The Administration's outlook for 1984 and economic
assumptions through 1989 are described in the final section of this
chapter, following the review of the economy's performance in 1983.
REVIEW OF THE 1983 ECONOMY
Gains in output were widespread across most sectors of the economy. By the end of 1983 the expansion was 1 year old—the quarterly
dating of the business cycle trough is the fourth quarter of 1982,
while the monthly dating is November 1982. In discussing the 1983
recovery a comparison with other recoveries is useful. Table 6-1 provides summary information on the other recoveries since 1949. From
Table 6-1 it can be seen that in 1983 real GNP grew slightly less and
employment considerably more than over the comparable period of a
typical recovery. Indeed, the employment gain was larger than experienced in any of the seven recoveries reported in Table 6-1 with the




175

exception of the recovery following the 1949 trough. Industrial production in 1983 rose somewhat more rapidly than over the first year
of a typical recovery.
TABLE 6-1.—Growth in output and employment over first year of business cycle recoveries
[Percent change, except as noted}
First 4
quarters
after trough
Quarter and month of business cycle trough
Real GNP

1982 IV (November)..
1949
1954
1958
1961
1970
1975
1980

First 12 months after trough

Industrial
production

Civilian
employment

Civilian
unemployment rate
(percentage
point
change)

6.1

3.6

-2.3

27.7
14.0
20.9
13.4
6.2
15.2
9.7

4.4
2.9
3.4
1.4
2.1
3.3
1.9

-3.7
-1.6
-2.2
= 1.4
.1
-1.0
= .5

7.4
6.8

Average of seven recoveries'
Average of five recoveries 2 ..

15.7

13.3
7.4
8.4
7.0
4.7
6.7
4.2

IV (October)
II (May)
II (April)
I (February)
1V (November)....
1 (March)
III (July)

15.3
13.9

2.8
2.6

= 1.5
-1.2

1

Excludes 1982.
Excludes 1949, 1980, and 1982.
Note.—Business cycle troughs are as determined by the National Bureau of Economic Research.
Sources: Department of Commerce (Bureau of Economic Analysis), Department of Labor (Bureau of Labor Statistics), and
Board of Governors of the Federal Reserve System.
2

In order to provide a reference standard for interpreting the
growth of GNP and its components in 1983, a "typical** recovery may
be defined by averaging the first year of business expansion following the earlier cyclical troughs listed in Table 6-1 excluding those in
1949 and 1980. The strength of the recovery from the 1949 trough
was greatly distorted by the outbreak of the Korean war in mid-1950
and the accompanying expectation of a renewal of wartime production and price controls. The expansion from the 1980 trough lasted
only 12 months—a recovery only half the length of any recovery in
the last 50 years.
A perspective on the composition of the expansion in real GNP is
provided in Table 6-2. The major categories of real GNP are reported in terms of percentage point contributions to the total change in
GNP over the four quarters of 1983. For example, real personal consumption expenditures accounted for 3.6 percentage points of the
total 6.1 percent growth in real GNP; by comparison, during the first
four quarters of the typical postwar recovery, personal consumption
accounted for 3.6 percentage points out of the total 6.8 percent increase in real GNP. The major conclusion to be drawn from
Table 6-2 is that the magnitude and composition of the 1983 expansion was similar in most respects to the typical first four quarters of
business expansion following a cyclical trough.




176

TABLE 6-2.—Contribution ofGNP components to total GNP growth over first year of business cycle
recoveries
[Percentage point change]
Typical
postwar
recovery2

Item
Real GNP

...

Personal consumption expenditures
Durable goods
Nonresidential fixed investment
Producers' durable equipment
Structures

6.8
3.6
1.3
.5

.

.0

Residential investment

1.0

Change in business inventories

1.8

-.4
.0

Net exports of goods and services
Exports
Imports (minus denotes increase)
Government purchases of goods and services
Federal
Federal excluding CCC3
State and local

-.4
.3
-.3

Final sales4

5.0

1
2
3

Preliminary.
Recoveries following business cycle troughs in 1954 II, 1958 II, 1961 I, 1970 IV, and 1975 I.
Memo item not usually reported in national income and product account tables.
4
Real GNP less change in business inventories.
Note.—Business cycle troughs are as determined by the National Bureau of Economic Research.
Source: Department of Commerce (Bureau of Economic Analysis).

Fluctuations in output over the business cycle are ordinarily larger
for durable consumption and investment goods than for other sectors. In 1983 despite apparently high real (inflation adjusted) interest
rates, durable consumption, business fixed investment, residential investment, and inventories all experienced growth matching or exceeding that of the typical postwar recovery, based on the accounting
in Table 6-2. Business investment in equipment was especially
strong.
This strong performance can be attributed to several factors. Both
disposable personal income and after-tax business profits recovered
significantly from their 1982 levels. Relative prices for consumer durable goods and fixed investment goods fell. Tax policies, especially
accelerated depreciation allowances, increased the after-tax return on
business investment. The rising stock market probably also contributed both to the demand for durable goods and business fixed investment. The decline in mortgage rates that began in mid-1982 was important for the housing recovery.
Rising profits and incomes are likely to have a large effect on investment expenditures in the early stages of the recovery when the
swing in output from contraction to expansion is relatively large and
disposable personal income and business cash flow increase significantly. Later in the expansion, output and income growth tend to




177

slow relative to business investment as firms approach high utilization rates. At this stage, interest rates become more important in determining the level of investment and subsequent growth in total
output.
In addition, business fixed investment may have been subject to
"accelerator" effects. As final demand rises, so too does the capital
stock needed to produce the higher volume of goods and services efficiently. With a resumption of economic expansion, even a relatively
small increase in the desired capital stock may result in a substantial
increase in the rate of investment spending. Inventory investment
also tends to increase with rising final sales in order to keep the ratio
of inventories to sales within the desired range. An expansion of inventories requires additional production, further increasing the use
of existing capacity. These types of effects are likely to play a significant role through 1984.
Expenditures on consumer durables and housing may have been
affected by a similar phenomenon. During recessions, with real
income growing slowly or falling, desired stocks of housing and consumer durables rise slowly if at all. Most purchases reflect replacement demand. In the early recovery phase, with rising employment
and income, purchases of consumer durables may expand rapidly as
efforts to increase stocks of durables and housing create additional
demand above normal replacement demand.
In 1983 total real domestic demand rose by 7.4 percent, and
export demand added another 0.3 percent. However, of this 7.8 percent increase of aggregate demand, 1.7 percentage points were satisfied by imports of goods and services. Thus, U.S. real output and
income rose by 6.1 percent; in an accounting sense, net exports reduced real GNP growth by 1.4 percentage points in 1983 compared
to a reduction of 0.4 percentage point for a typical recovery. As can
be seen from Table 6-2, the decline in net exports in 1983 was more
a reflection of growing imports than of declining exports. However,
exports had declined significantly in 1982; thus, the small growth in
exports in 1983 was from a depressed base.
Government purchases of goods and services declined over the
four quarters of 1983 by an amount sufficient to lower GNP by 0.4
percentage point in the accounting reported in Table 6-2. State and
local government purchases grew more slowly than is typical of the
first four quarters of recovery. Total real Federal purchases actually
declined somewhat as a rise in Federal defense purchases was more
than offset by a fall in nondefense purchases. It is important to note,
however, that a comparison of real Federal purchases in the fourth
quarter of 1983 with those in the fourth quarter of 1982 is distorted
by a large shift from net purchases to net sales (which include pay-




178

ment-in-kind) of agricultural commodities by the Commodity Credit
Corporation (CCC). As shown in Table 6-2, Federal expenditures excluding CCC contributed 0.3 percentage point of GNP growth compared to a negative contribution of 0.3 percentage point for the typical recovery.
In summary, the major differences in the composition of GNP
growth between the 1983 and the typical recovery are these: a) nonresidential fixed investment rose more than usual in the 1983 recovery; b) net exports, which fall somewhat in the typical recovery, fell
substantially in 1983; and c) Federal purchases, which are usually
about unchanged, fell in 1983 due to an atypical swing in CCC purchases.
PERSONAL INCOME AND CONSUMPTION

Over the course of the year real personal income rose by 4.0 percent, while real disposable income grew somewhat more rapidly, by
5.1 percent, reflecting the third stage of the Administration's tax reduction program. These increases in both personal and disposable
income continued advances that started in 1982.
As shown in Table 6-3, the 4.0 percent rise in real personal
income reflected a 5.1 percent rise in real payroll disbursements and
related fringe income. Higher employment and hours worked and an
increase in real hourly earnings all contributed to this increase.
Other sources of income including interest and dividend income,
rental income, and proprietors' income recorded a 4.7 percent increase. Real net transfer payments declined 3.7 percent as unemployment payments dropped, and as the surge in employment produced a
large increase in contributions to social insurance. Federal personal
income tax liabilities fell by 6.2 percent while other taxes—largely
State and local—rose by 11.1 percent.
Increases in consumption expenditures were widespread across
various product categories. As is typical of periods of cyclical recovery, the expansion of real consumption expenditures was led by expenditures on durable goods. Real consumer durables expenditures,
which in 1982 were below their 1978 level, rose substantially in 1983.
Expenditures on automobiles, representing about 43 percent of total
consumer durables expenditures, rose by 19.3 percent. Furniture and
household equipment, linked to the housing recovery, grew by 11.5
percent and other durables by 8.4 percent.
In real terms, the services component of personal consumption expenditures has grown every quarter since the first quarter of 1954,
reflecting stable growth of services generally, and especially of imputed
services of owner-occupied dwellings which represent one-quarter
of total services outlays. The nondurable goods sector—of which




179

TABLE 6-3.—Real household income, consumption, saving, and residential investment, 1979-83
[Percent change, fourth quarter to fourth quarter and 5-year average]
Item

1979

1980

1981

5-year
aver-

1982

1983 *

-0.9
-3.6
11.8

5.1
4.7
-3.7

1.2
3.2
5.2

Income by type-.
Labor income3
Other income4
Net transfer payments5..

-0.2

115

1.1
11.9
-.1

Personal income

1.0

3.4

-.3

4.0

2.0

Less: Federal tax payments
Other tax and nontax payments6

1.6

3.0
3.8

-4.9
4.5

-6.2
11.1

1.2
3.9
2.1

Disposable personal income

3.4

5.1

2.5

5.4

2.3

29.1 - 2 7 . 6

-1.2

-2.4

6.6

5.8

4.8

5.8

- 4 . 0 -42.2

44.9

34.2

-3.4

-29.2
-7.9

-5.0
-2.0

^44.9
37.1

50.1
36.6

26.6
47.8

-5.7
1.6

-9.9

-4.3

12.3

11.7

-8.3

-13.6

2.1

9

Single family
Multifamily
Mobile (manufactured) home shipments8

19.1

5.9

Personal saving rate (percent) 7

.1

11.4

Personal saving

Housing starts

.1

1.7

-23.1

Personal consumption expenditures...

6.0

9

25.5
38.2

-3.3
Residential investment
1
Preliminary.
2
Based on annual data.
3
Wage and salary disbursements and other labor income.
4
Proprietors' income, rental income, personal dividend income, and personal interest income.
r
>Transfer payments less personal contributions for social insurance.
6
State and local tax and nontax payments plus Federal nontax payments.
7
Annual average.
8
Units.
9
Based on data through November 1983.
Note, jncome items, consumption, and saving deflated by the personal consumption deflator; residential investment deflated
by the residential deflator.
Sources: Department of Commerce (Bureau of Economic Analysis and Bureau of the Census) and Council of Economic Advisers.
-19.6

3.0

food represents about one-half and clothing about one-quarter—fluctuates over the cycle but is dominated by trend. Real nondurable
consumption rose 4.7 percent over the year.
By the second quarter of 1983, the vigorous recovery had already
lifted durable consumption expenditures above the prior peak quarter in 1978. The increase began in the fourth quarter of 1982 when
special promotional efforts by the automobile industry and declining
fuel prices increased auto sales and substantially reduced inventories.
The growth of consumer spending in 1983 exceeded that of disposable income. Hence, the personal saving rate fell over the course
of the year. The average rate for the year, 4.8 percent, was below the
5.8 percent rate in 1982 and substantially below the 6.9 percent average for the 1950-80 period. In comparing 1983 to prior recoveries, it
is better to examine the average saving rate for the year because the
personal saving rate can be rather volatile from quarter to quarter.
There has been no consistent pattern for the saving rate over the
first year of business cycle recoveries. In this stage of the cycle, sub-




180

stantial declines on the order of the 1983 decline are certainly not
unknown; for example, in the first year of recovery following the
1954 trough the saving rate averaged 6.0 percent, down from an
average of 7.2 percent over the preceding four quarters. The main
issue concerning the 1983 personal saving rate is that it declined
from a 1982 level that was already considerably below the average
for the last three decades.
The decline in the saving rate in 1983 may reflect in part the effects of a vigorous stock market advance in encouraging rising consumer spending. After rising 27 percent from its July low to December 1982, the Standard & Poor's composite index rose by another 19
percent over the 6 months ending June 1983. The index ended the
year at about its June level, having increased the value of outstanding
stock held by households by about $500 billion from July 1982. This
stock market advance was somewhat larger than the average over
comparable phases of previous business cycles.
RESIDENTIAL INVESTMENT

In 1983 monthly housing starts fluctuated between an annual rate
of 1.5 million and 1.9 million units, averaging 1.7 million units, the
highest level since the 1.75 million units reached in 1979. The increase in starts from 1982 was the largest year-to-year advance in
over 35 years. In addition, mobile homes—not included in the starts
figure—averaged about 300,000 units, bringing total new dwelling
units to about 2 million. About two-thirds of the starts were singlefamily units and one-third were in structures with two units or more,
a split that was about typical of the average in the 1970s. Expenditures on residential housing construction increased 38.2 percent in
real terms from the fourth quarter of 1982.
The recovery in new housing construction was accompanied by a
rise in sales of existing homes, which rose 16.4 percent in the first 11
months of 1983. Total gross mortgage originations for one- to fourfamily nonfarm housing in the first 9 months of 1983 was over $148
billion compared to $65 billion in 1982. The proportion of mortgage
loans devoted to refinancing was the highest ever recorded, with a
major portion devoted to refunding short-term financing, which was
widely used in 1981-82 when long-term mortgage money was scarce
and rates high.
Over the first three quarters of 1983, thrift institutions provided
about one-half of the net increase in mortgage borrowings, including
mortgages and mortgage-backed pool and agency securities. This
marked a return to the market share that prevailed in the 1970s. In
1982 thrift institutions contributed less than 10 percent of the increase in net mortgage borrowings, as mortgages were swapped for




181

agency securities in an attempt to increase liquidity. The rising share
for the thrifts reflects a variety of factors including a lower average
level of mortgage rates and the introduction of new, more competitive savings instruments. There was a large flow of savings into the
thrifts; their total deposits were at a rate of $143 billion over the first
three quarters of 1983 compared to $55 billion for the same period
in 1982.
Of even more significance, perhaps, has been the growth of mortgage-backed certificates. Unfortunately much of this growth reflects
governmental activity that has probably stunted the growth of privately issued certificates. Federally sponsored mortgage-backed pool
purchases of home mortgages that are used to back pass-through certificates exceeded $67 billion at an annual rate over the first 9
months of 1983. Combined with a total of $12 billion of home mortgages acquired by Federal, State, and local government credit agencies, government participation—chiefly as a mortgage market intermediary—exceeded two-thirds of the $116 billion net dollar volume
in the home mortgage market.
The increase in housing construction and mortgage lending was
spurred by increases in disposable income and employment and by
the decline in mortgage interest rates that occurred over the second
half of 1982. Compared to mortgage rates in the middle of 1982 the
average rate in 1983 reduced the monthly payment on a 20-year term
$60,000 mortgage by about $120.
BUSINESS FIXED INVESTMENT

Real nonresidential fixed investment grew by 11.5 percent over the
four quarters of 1983. Strength was concentrated in business equipment while nonresidential structures investment declined 2.7 percent.
Real expenditures on producers5 durable equipment rose 18.3 percent from the fourth quarter of 1982 to the fourth quarter of 1983.
This rapid growth reflected the relatively short lead times on many
equipment purchases, a rising capital utilization rate as the recovery
proceeded, and the investment incentives in the 1981 and 1982 tax
legislation. The growth was particularly strong in the office, computing, and accounting machinery category, and in cars and trucks. Real
outlays for office equipment have almost doubled since 1979, reflecting the high productivity of computers in many lines of activity.
Growth in business purchases of motor vehicles accounted for 29
percent of the total rise in equipment expenditures.
The decline in real expenditures on structures reflects the depressing effects of high interest rates, long lead times in large construction
projects, and excess capacity existing at the beginning of 1983. Office




182

building had been especially strong before 1983; office construction
peaked in late 1982 at a level three times greater than in 1977.
A sharp drop in the relative price of business fixed investment was
an important element in the rise in investment. The fixed-weight
price index for nonresidential fixed investment rose by 1.3 percent in
1983. By comparison, the fixed-weight index for final sales rose by
4.2 percent in 1983.
INVENTORY INVESTMENT

Inventory fluctuations are important in the business cycle process.
Inventories have a buffer stock role, permitting a more constant rate
of production in the face of transitory demand fluctuations. Under
normal circumstances demand fluctuations for individual firms* products largely offset one another; growth in aggregate demand and in
aggregate inventories is relatively smooth. Over a business cycle,
however, demand fluctuations are larger and more pervasive. Then,
inventories tend to be destabilizing as aggregate inventory adjustments move in the same direction as final demand. The impact on
total output of a change in aggregate demand is then amplified by an
inventory cycle. In 1983 inventory accumulation did not begin until
the third quarter, in contrast to the usual recovery pattern in which
accumulation begins somewhat sooner. In each of the first two quarters of 1983 the decline in inventories was smaller than in the prior
quarter. Consequently, the swing in inventory investment from an
unusually large liquidation of $22.7 billion (1972 dollars) in the last
quarter of 1982 to an accumulation of $7.5 billion in the last quarter
of 1983 added significantly to the growth in production over the
year.
With final sales rising and inventories declining in the first half of
the year and rising only modestly in the second half, the real business inventories/final sales ratio, shown in Chart 6-1, fell substantially
over the course of 1983. By the fourth quarter of the year that ratio,
at 3.02, was below the average of 3.33 in the fourth quarter of previous recoveries. The lean inventory situation at the close of the year
reflects the effects of high interest rates and conservative inventory
management policies. It could also be a consequence of underestimating the growth of final demand. With inventories lean at the end
of 1983, predicted future gains in final demand will likely be met by
increases in production and employment rather than by reductions in
inventories.
THE FARM ECONOMY

Reflecting the combined effects of a severe drought and the payment-in-kind (PIK) program, agricultural output fell in 1983. From




183

Chart 6-1

Real Business Inventories/Final Sales Ratio
Ratio
3.7

Seasonally Adjusted

3.6

3.5

3.4

3.3

3.2

3.1

3.0

-

0 I

I I
1961

I I
63

I I
65

I I
67

I I
69

I i
71

I

I
73

I I
75

I

I
77

I

I
79

1 I I
81 8 3

Source: Department of Commerce.

the fourth quarter of 1982 to the fourth quarter of 1983 real farm
output fell 16.5 percent to $33.9 billion. Reflecting the decline in
output, real farm inventories, excluding those under government
loans, fell $2.9 billion. Real exports of agricultural products were
roughly unchanged, falling only $0.4 billion. Nominal exports, however, rose 13.6 percent, to $37.6 billion, in the fourth quarter of
1983 as agricultural export prices rose 16.3 percent over the year.
The cost of Federal programs to support farm incomes probably
exceeded total net farm income in 1983. Farm production expenses
fell in 1983, for only the third time since 1940. This was primarily
due to the reductions in acreage under cultivation that farmers made
in reponse to the PIK program. The decline had significant adverse
effects on producers of farm inputs including fertilizers, other chemicals, and seeds. The farm situation is discussed in detail in Chapter 4
of this Report.




184

THE INTERNATIONAL SECTOR

Exports of goods and services in constant (1972) dollars rose
slowly in 1983, but imports of goods and services grew at a much
faster rate (Table 6-2). The result was a decline of net exports in
constant dollars, from a surplus of $23.0 billion in the fourth quarter
of 1982 to a surplus of only $2.5 billion in the fourth quarter of
1983.
In the national income and product accounts net exports measured
in constant (1972) dollars registered a surplus while net exports in
current dollars registered a deficit. The difference is due to a higher
price deflator for imports than for exports. Further, the current
account deficit in the balance of payments accounts, which is widely
discussed, is considerably larger than the net exports deficit in the
national income accounts. Most of that difference is accounted for
by the fact that the balance of payments accounts include, and the
national income accounts exclude, transfer payments and government
interest payments to foreigners. However, the interpretation of major
trends in the foreign sector is little affected by alternative accounting
systems. By either measure, the deficit has been rising in current dollars, and the surplus has been declining in constant dollars.
The merchandise trade balance, which has been in deficit since
1976, further deteriorated in 1983. However, the United States has a
substantial surplus from investment income and a smaller surplus in
the "other services" component of net exports.
One cause of the decline in net exports in 1983 was the strong
dollar, which made imported goods and services relatively less
expensive to American buyers and exported goods and services relatively more expensive to foreign buyers. U.S. exports also were limited by the problems of financially troubled debtor nations, particularly those in Latin America. Another cause was the earlier recovery in
the United States relative to that abroad. In 1983 the rate of increase
of real GNP in the United States was three times that expected for
the other 23 industrialized countries that are members of the Organization for Economic Cooperation and Development (OECD). As
output and income in the United States grew rapidly over the course
of the year, imports of goods and services also grew. However, with
the expansions in the economies of major trading partners lagging
behind that in the United States, growth in demand for U.S. exports
of goods and services was restrained.
These events demonstrated an important result of the growing integration of the world economy. In 1983 countries outside the
United States had a substantial influence on U.S. output, and the vigorous recovery in the United States was a source of stimulus to the




185

world economy. These matters are discussed in more detail in Chapter 2 of this Report
GOVERNMENT PURCHASES OF GOODS AND SERVICES

Growth in government purchases of goods and services was not a
major element propelling the expansion of output in the economy in
1983.
Over the year, Federal purchases of goods and services in 1972
dollars fell by $7.5 billion. The decline was a consequence of a special factor not likely to recur in 1984, namely a swing in CCC purchases of $12.6 billion. CCC purchases in the fourth quarter of 1982
were unusually large, while the PIK program and the drought led to
net sales of commodities in the fourth quarter of 1983. Excluding the
CCC component, real Federal purchases rose by 4.4 percent over the
four quarters of the year. In 1972 dollars national defense purchases
rose from $81.4 to $85.6 billion, while the nondefense purchases
other than CCC rose from $33.3 to $34.1 billion.
The growth in State and local government purchases of goods and
services was small in real terms. Over the four quarters of the year
expenditures rose by only 0.6 percent. The small growth in purchases continues a pattern that has been apparent for several years.
Indeed, in real terms, purchases for the entire year of 1983 are
slightly below their level in 1979.
The fixed-weight price index for Federal purchases increased 2
percent over 1983, while the State and local price index rose 5.4
percent.
EMPLOYMENT, UNEMPLOYMENT, AND PRODUCTIVITY

Employment, as measured by the household survey, rose by 4.0
million persons over the 12 months of 1983. As shown in Chart 6-2,
the civilian unemployment rate, after reaching a peak in November
and December of 1982, dropped by 2.5 percentage points over the
next 12 months, the largest 12-month decline in 32 years.
Changes in the unemployment rate are the result of conditions determining labor force growth—growth in the working-age population,
and changes in the fraction of that population participating in the
labor force—and changes in employment. Labor force participation
rates and employment details are reported in Table 6-4. The increase in employment was by far the largest determinant of the decline in the unemployment rate. Civilian employment, as measured
by the household survey, grew by 3.6 percent over the 12 months
following the cycle trough in November 1982, an above-average increase compared to previous postwar recoveries.




186

Chart 6-2

Civilian Unemployment Rate
Percentage point change
.5

Trough=0

0 __

—
( I
/

-.5

—

j

f

\

Ji
-1.0

-1.5

-2.0

-2.5

\
A\
'\
i
•

A
» //
~/
;
L

K/V

\\

/

-.WA

—

/

/

"

V

^^v

\
\

—

\ 1982-83 Cycle

']
1

\

—

1
-10

/

i

i

- If

-3.0

Average of 5 Preceding Cycles1'

^

Trough

I

I

i

i

i

i

i

12

24

36

48

60

72

84

Months from Trough
-^Excludes 1949 and 1980 cycles.
Sources: Department of Labor and Council of Economic Advisers.

Lower growth in working-age population, taken alone, reduced the
unemployment rate by 0.4 percentage point compared to what it
would have been with average population growth. The number of 16
to 19 year olds, the population group that provides many of the new
additions to the labor force, actually declined over the year. The
labor force participation rate was essentially unchanged over the
year. Thus the slower-than-average labor force growth in this recovery is a demographic phenomenon; it is not an unusual economic response of participation rates to labor market conditions.
Above-average growth in employment raised the employment to
population ratio—the ratio of civilian employment to working-age
population—by 1.7 percentage points. At the end of 1983, 58.8 percent of the population was employed, compared to postwar peaks of
60.1 percent in February and December 1979.
All demographic groups have shared in the recovery. Employment
gains were strong among blacks, particularly among black men over
20 years of age, who experienced an 8.5 percent employment gain




187

TABLE 6-4.—Labor market developments, 1979-83

[Fourth quarter of indicated year]
1979

Component

1980

1981

1982

1983

Percent change from year earlier >
Change in civilian employment

2.3

0.6

1.0

3.5

- 5
1.6
-6.2

2
2.8
-8.6

14
.8
-7.3

36
40
-.6

2.2
3.3

White
Black and other

-0.2

15
4.1
= .8

Mates 20 years and over
Females 20 years and over
Both sexes 16-19 years

-.1
-.6

' .7
-.1

1.2
.4

34
4.2

Percent l
2

5.9

7.4

8.2

10.6

8.5

Males 20 years and over
Females 20 years and over
Both sexes 16-19 years

44
5.7
16.2

62
6.7
18.2

71
7.2
21.0

99
9.0
24.1

78
7.2
20.6

White
Black and other . . .

5.2
11.2

6.5
13.8

7.2
15.4

9.5
18.7

74
16.4

Civilian unemployment rate

Participation rate 3
Males 20 years and over
Females 20 years and over
Both sexes 16-19 years

63.8

White
Black and other

. ........

63.7

63.8

64.0

64.0

79.6
510
57.8

..

79.1
515
56.2

78.7
52.3
54.6

78.7
52 9
54.1

7R4
53 2
53.2

64.0
62.3

64.0
61.8

64.1
61.5

64.4
62.1-

64 S
61.5

1

Seasonally adjusted.
Unemployed as percent of civilian labor force.
Civilian labor force as percent of civilian noninstitutional population.
Note.—Data relate to persons 16 years and over.
Source: Department of Labor, Bureau of Labor Statistics.
2

3

over the year. However, the employment picture for black teenagers
(aged 16 to 19) remains bleak. Compared to white teenagers, black
teenagers have lower participation rates. In addition, the unemployment rate for black teenagers was twice as high as that for white
teenagers. Consequently, fewer than 20 percent of black teenagers
are employed, compared with almost 50 percent of white teenagers.
Job opportunities for Hispanics improved markedly during 1983.
Employment among Hispanics grew by 10.4 percent, more than twice
the increase in the working-age Hispanic population. The Hispanic
unemployment rate fell from 15.5 percent in December 1982 to 11.6
percent in December 1983.
Following a period of little growth from 1977 to early 1982, labor
productivity began to rise in the third quarter of 1982. Productivity
trends in the economy are most reliably measured for the nonfarm
business sector, which accounts for about 83 percent of total GNP.
Nonfarm business output and related measures are shown on Table
6-5.
Productivity began to rise before the end of the last recession as
employment continued to drop after output leveled off. Productivity
in the nonfarm business sector rose at a 1.8 percent annual rate in




188

TABLE 6-5.—Output, productivity, costs, and prices in the nonfarm business sector, 1979-83
[Percent change, fourth quarter to fourth quarter and 5-year average]
Item

1979

Output

1980

1981

1982

1983 *

0.2

.8

3.5

.6

10.8

9.0

7.2

4.9

8.5

10.5

7.7

6.3

1.3

7.9

8.5

Implicit price deflator....

1.2

11.6

Unit labor cost

1.0

2

9.2

Compensation per hour..

-0.8

-2.1

Output per hour

10.6

9.4

3.7

3.6

7.5

-2.6

8.3

5-year
aver1.0

1

Preliminary.
Based on annual data.
Note.—Data relate to all persons.
Source: Department of Labor, Bureau of Labor Statistics.
2

the last two quarters of 1982 and at a 3.5 percent rate over 1983. In
the recovery unemployment fell without a lag. Consequently, the unemployment rate fell more rapidly than usual for the increase in
output.
PRICES, WAGES, COMPENSATION, AND PROFITS

Over the 12 months from December 1982 to December 1983 consumer prices rose by 3.8 percent and producer prices by 0.6 percent.
For consumer prices the increase was the smallest since 1972; for
producer prices the 12-month increase was the lowest for any calendar year since 1964. Table 6-6 provides detail for major components
of the price indexes, and also a comparison of the past year's inflation with the average rate over the last 5 years.
T A B L E 6-6.—Price changes, 1979-83
[Percent change, fourth quarter to fourth quarter and 5-year average]
79

Item

1980

1981

1982

1983 i

5-year
average12

GNP price measures:
Fixed-weighted index..
Implicit deflator

9.3
8.2

10.1
10.2

8.8
8.7

5.1
4.4

4.3
4.0

7.9
7.5

12.8
10.7

12.5
12.2

9.5
10.2

4.5
5.2

3.3
4.3

8.8
8.7

12.8
14.0
8.9

12.4
12.6
11.7

7.3
6.8
9.1

3.6
3.5
4.1

.9
.4
2.3

7.8
7.9
7.6

Consumer prices: s
All items
All items less food and energy..
Producer prices—finished goods:
Total..
Consumer goods
Capital equipment..
1
2
3

Preliminary.
Based on annual data.
All urban consumers.
Source: Department of Commerce (Bureau of Economic Analysis) and Department of Labor {Bureau of Labor Statistics).




189

Inflation as measured by the consumer price index for all urban
consumers (CPI-U) was somewhat higher over the second half than
over the first half of 1983 (Chart 6-3). Over the 6 months ending
June the CPI-U rose at a 2.9 percent annual rate; over the 6 months
ending December, the annual rate was 4.7 percent. To some extent
the slight increase in inflation over the course of the year reflected
the timing of changes in energy prices which fell in the first quarter
due to reductions in crude petroleum prices.
Chart 6-3

Change in the Consumer Price Index
12-Month Change in the CPI-U
Percent change
16

14 -

12

-

A

10

8

6

4

\

/

V

2

0

i

t

I

I

i

I

t

I

I

I

I

I

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

1983

Source: Department of Labor.

Reflecting the drought and unexpectedly large acreage reductions
for the PIK program, food prices rose more rapidly in the second
half of the year than they had in the first. The tendency toward
slightly higher inflation as the year progressed is indicated by the fact
that the CPI-U, excluding food, energy, and shelter, rose at a 4.1
percent rate over the first 6 months and at a 5.8 percent rate over
the 6 months ending in December.




190

The tendency toward a slight increase in inflation over the year
was also registered by the producer price index. Over the 6 months
ending June, the index for total finished goods fell at an annual rate
of 0.9 percent, but over the second half of the year this index rose at
a 2.0 percent annual rate. Even so, inflation by this measure was
lower than that in the recession phase of the cycle. The GNP implicit
price deflator, the broadest measure of inflation, rose by 4.0 percent
over the four quarters of the year.
The rate of increase of money wages declined in 1983. An important contributor to this decline was the slack in labor markets. However, the reduction in the rate of inflation was also important as
many wage increases are tied, formally or informally, to the rate of
price inflation. Collective bargaining agreements with escalator
clauses ordinarily tie wages to the consumer price index for urban
wage earners and clerical workers (CPI-W), which differs from the
CPI-U primarily with respect to the method used to measure housing
costs. Over the 12 months ending December, the CPI-W rose 3.2
percent, slightly less than the CPI-U increase of 3.8 percent.
Based on the first three quarters of 1983, it appears that for the
second consecutive year both union and nonunion wage increases
were less than the previous year, as contracts and wage patterns established in the highly inflationary 1980-81 environment represented
a diminishing portion of wage agreements. Major collective bargaining agreements negotiated in the first three quarters of 1983 have resulted in wage adjustments that are the lowest for the entire 15-year
period over which these data have been collected, and less than half
the rate of increase when the parties last negotiated.
Because price increases in 1983 were lower than wage increases,
real hourly wages rose, as they had in 1982. As shown in Table 6-7,
the adjusted hourly earnings index for the private nonagricultural
sector (production or nonsupervisory workers) rose by 3.9 percent
over the four quarters of 1983, compared to 6.0 percent for the previous four quarters. In constant (1977) dollars the increase in the
hourly earnings index was 0.9 percent in 1983 compared to 1.5 percent in 1982. These gains in real hourly earnings may be compared
to declines averaging 2.7 percent per year from 1978 to 1981.
In addition to the higher real hourly earnings, an increase in average weekly hours worked raised average weekly earnings. Average
weekly hours in the nonagricultural sector rose from 34.8 in December 1982 to 35.2 in December 1983. The net result of higher hours
and higher real hourly earnings was an increase of 2.4 percent in
average real weekly earnings over the 12 months ending in
December.




191

TABLE 6-7.—Changes in wages and compensation, 1979-83
[Percent change, fourth quarter to fourth quarter and 5-year average]
Measure

1979

Adjusted hourly earnings index3

1980

1981

1982

5-year

1983 1

average I*

8.0

9.6

8.3

6.0

3.9

7.5

-4.3

Real adjusted hourly earnings index...

-2.7

-.9

1.5

,9

-1.2

Employment cost index4

8.7

9.0

8.8

6.3

"5.0

7.6

Union workers
Nonunion workers..

9.0
8.5

10.9
8.1

9.6
8.5

6.5
6.1

«5.2
*5.0

8.3
7.2

9.2
-3.2

10.8
-1.6

9.0
-.5

7.2
2.6

Nonfarm business sector:6
Compensation per hour
Real compensation per hour..

8.5
-.3

1
Preliminary.
2
Based on annual data.
3
Private nonfarm employees.
4
Wages and salaries, private
6
Third quarter 1982 to third
6

nonfarm industry workers.
quarter 1983.
All persons.
Sources: Department of Commerce (Bureau of Economic Analysis), Department of Labor (Bureau of Labor Statistics), and
Council of Economic Advisers.

Overall, 1983 was an excellent year for real incomes. With a higher
real hourly wage, higher average hours worked by those employed,
rising employment, and the third stage of the Administration's tax reduction program, real per capita disposable personal income rose 4.1
percent over the year. This increase was the highest since 1977.
The combination of restrained increases in money wages and continued productivity growth served to hold the increase in unit labor
costs to only 1.3 percent. This increase was the lowest since 1965.
Corporate profits before tax totaled about $205 billion in 1983.
Corporate profits after tax were about $130 billion, a level well
above 1982 but still below 1981.
FINANCIAL MARKETS

Most market interest rates rose somewhat over the 12 months of
1983. In December 1982 the 3-month Treasury bill rate averaged 7.9
percent; in December 1983 it averaged 9.0 percent. Over this same
period 30-year Treasury bonds rose from 10.5 percent to 11.9 percent, and Aaa corporate bonds rose from 11.8 percent to 12.6 percent. The effective new home mortgage closing rate fell over the
course of the year, from 13.7 percent in December 1982 to 12.5 percent in December 1983.
The Standard 8c Poor's composite stock price index rose sharply
over the year, with all of the gains coming in the first half. In December 1983 the average was 17.9 percent above its level 12 months earlier. This rise was on top of the 27 percent increase in the second
half of 1982.




192

As shown in Table 6-8, the credit markets absorbed a very large
flow of financing in 1983. Reflecting record U.S. Government deficits, Treasury debt in the hands of the public rose by $187 billion
over the year. As noted above, the markets also financed a very large
flow of mortgages.
TABLE 6-8.—Funds raised in credit markets by the nonfinancial sector of the economy, 1979-83
[Billions of dollars, except as noted]
1979

Sector
Total funds raised

,

Households
Business

1980

1981

1982

19831

406.2

370.4

404.4

411.0

509.1

176.4

117.5

120.6

86.3

149.4

151.7

126.1

159.6

111.5

95.9

Federal Government

37.4

79.2

87.4

161.3

205.9

State and local government...

20.5

20.3

9.7

36.3

42.7

Foreign

20.2

27.2

27.2

15.7

15.0

16.8

14.1

13.7

13.4

15.6

Funds raised as percent of GNP...
1

Average of first three quarters at seasonally adjusted annual rate.
Note.—Detail may not add to total due to rounding.
Sources: Department of Commerce (Bureau of Economic Analysis) and Board of Governors of the Federal Reserve System.

The nonfinancial corporate sector did not place significant demands on the credit markets in 1983. As cash flow rose markedly due
to the strength of the recovery, corporations obtained most of their
funds from internal sources. Despite increases in business fixed investment outlays and a move from inventory liquidation to accumulation within the year, the nonfinancial corporate sector is estimated to
have borrowed about $33 billion in the first three quarters of 1983,
well below the amount borrowed over the same period in 1982. The
1983 borrowing was also considerably less than the amount borrowed in the second half of 1981. The strong stock market led to a
significant increase in common stock offerings. Over the first three
quarters of the year, gross proceeds from primary public offerings of
common stock totaled $33.8 billion, compared to $25.4 billion over
the entire year of 1982. As reported in Table 6-8, funds raised by
nonfinancial business through debt and equity issues together have
been falling since 1981.
Growth in the monetary aggregates in the first half of 1983 was
high. Ml grew at a 14.5 percent annual rate, up somewhat from the
11.2 percent annual rate over the last 6 months of 1982. The two
other monetary aggregates reported by the Federal Reserve, M2 and
M3, grew at rates of 16.4 percent and 10.5 percent, respectively, over
the same period. These two aggregates had grown at rates of 10.5
percent and 10.7 percent, respectively, over the last 6 months of
1982. The high rates of money growth in the first half of the year
were the result of an accommodative monetary policy stance that had




193

the effect of avoiding sizable changes in interest rates during a
period in which the Federal Reserve was uncertain about the significance of the large deposit flows associated with new deposit instruments.
The new money market deposit accounts (MMDAs), first offered by
depository institutions in mid-December 1982, attracted $320 billion
by March 1983. Funds in MMDAs, which are included in M2 and M3
but not in Ml, grew to about $370 billion at the end of the year.
Another significant innovation was the introduction in early January
of Super-NOW Accounts which have unlimited checkwriting privileges and are not subject to interest rate ceilings. Funds in these accounts, which are included in Ml, grew to about $27 billion by the
end of March, and to $37 billion by the end of the year.
Most of the adjustment to the new accounts appears to have taken
place early in the year. In addition, most of the funds flowing into
MMDAs seem to have come from other components of M2. Between
December 1982 and March 1983, while MMDAs were attracting $320
billion, general purpose and broker/dealer money market mutual
funds lost $28 billion and conventional time and savings accounts
lost $162 billion. The components of Ml and M2 are shown in Table
6-9.
TABLE 6-9.—Components of Ml and M2t

1979-83

[Averages of daily figures; billions of dollars; seasonally adjusted, except as noted]
December

Item

1979

1980

1981

1982

1983 J

Currency

106.3

116 2

123.2

132.8

146.0

Plus: Demand deposits2

2657

2709

2409

244 0

247.9

17 0

269

76 6

1013

1271

Equals: M l

389 0

4141

440 6

478 2

5211

Plus* Savings deposits

423 1

400 7

344 4

3593

312 3

43 2

372 4

Other checkable deposits

o

Money market deposit accounts (MMDAs) 3 4
Small time deposits

o

o

635 9

7317

828 6

8591

792.1

Overnight repurchase agreements (RPs) and overnight Eurodollars4

21.2

28.4

36.1

44.3

56.1

Money market mutual fund balances (excluding institution accounts) 4.

33 4

614

150 9

182 2

1380

1,497.5

1,630.3

1,794.9

1,959.5

2,184.6

Equals: M2 «
1
2
3
4
6

Preliminary.
Includes travelers checks.
Introduced December 14, 1982.
Not seasonally adjusted.
M2 will differ from the sum of components by a consolidation adjustment that represents the estimated amount of demand
deposits and vault cash held by thrift institutions to service time and savings deposits.
Source: Board of Governors of the Federal Reserve System.




194

In the middle of 1983 the Federal Reserve became less accommodative in its provision of reserves. As a result, interest rates rose
moderately. Also, the greatest part of the portfolio adjustment to the
introduction of the new deposit accounts was probably complete by
that time. Growth of the monetary aggregates slowed; over the 6
months ending in December, Ml, M2, and M3 grew at annual rates
of 3.7 percent, 6.8 percent, and 8.2 percent, respectively.
In February the Federal Reserve announced 1983 target growth
ranges for M2 and M3. But because of the uncertainty it felt over the
effect of the new accounts on the demand for money, the Federal Reserve announced only a "monitoring" range for Ml, which was set at
4 to 8 percent from its average level in the fourth quarter of 1982.
The M2 target growth range was set at 7 to 10 percent from its average level in February and March. The M3 range was set at 6.5 to 9.5
percent from its average level in the fourth quarter of 1982. Following rapid growth in Ml over the first half of 1983, in July the Federal
Reserve revised the Ml growth range to 5 to 9 percent from its average level in the second quarter. Chart 6-4 shows Ml and its target
ranges in 1983.
THE OUTLOOK FOR 1984
Table 6-10 summarizes the basic elements in the Administration's
economic projections for 1984 and corresponding data for 1983. The
rate of growth in real GNP is expected to decline as is typical in the
second year of expansion. Real GNP is projected to grow at 4.5 percent over 1984. The unemployment rate is expected to fall to an
average of 7.6 percent in the fourth quarter of the year.
The inflation rate as measured by the GNP implicit price deflator is
expected to rise slightly in 1984, to 5.0 percent over the four quarters of the year. The slight increase in projected inflation reflects the
view that 1983 inflation was depressed to some degree by cyclical
factors and two special factors that seem unlikely to recur in 1984.
The two special factors were the decline in energy prices early in
1983 and the continuing appreciation of the foreign exchange value
of the dollar over the year. These cyclical and special factors should
be viewed as transitory disturbances to the underlying rate of inflation determined by money growth and trends in the income velocity
of money.
The Administration's economic outlook is based on an analysis of
business cycle regularities and other information, including forecasts,
obtained from the private sector. The projections for real GNP and
inflation in 1984 are close to the median of private sector forecasts




195

Chart 6-4

M1: Actual versus Target Range
Billions of dollars*
600

-

-

550 -

-

575

2Q83to4Q83

J^,

525 —

500

^

^

475

—

4Q 82 to 4Q 83

4Q 81 to 4Q 82
'

450

-

.

5.5%

—

• 2.5%

_

425
I
J

I
M

A

I

I

F

M

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

J

J

A

S

O

N

D

J

F

M

A

M

J J
1983

A

S

1982

I I
O

N

D

M Monthly averages of daily figures, seasonally adjusted.
Source: Board of Governors of the Federal Reserve System.

for those variables. Further details on the Administration's outlook
are reported in Table 6-10.
THE OUTLOOK FOR 1985-89

The Administration's economic assumptions for 1985-89 are reported in Table 6-11. These economic assumptions reflect the Administration's view on probable basic economic trends under the assumption that the Federal budget deficit and the rate of money
growth decline over time. A different set of economic assumptions
would, of course, be appropriate if different policies were pursued.
Because economic outcomes are dependent on numerous conditions other than the assumed economic policies, it is appropriate that
the long-run economic assumptions reflect underlying trends. Moreover, because the primary use of the long-term economic assump-




196

TABLE 6-10.—Economic outlook for 1984
1984
forecast

19831

Item

Percent change (fourth quarter to fourth quarter):

6.1

Personal consumption expenditures..
Nonresidential fixed investment
Residential investment
Federal purchases
State and local purchases

4.5

5.4
11.5
38.2
-6.0
.6

Real gross national product

2.0
9.5
6.0
3.7
4.2

GNP implicit price deflator

4.1

5.0

Compensation per hour 2

4.6

5.5

Output per hour 2

3.2

2.1

Unemployment rate (percent) 4

8.4

7.6

Housing starts (millions of units, annual rate)..

1.7

1.8

Level in fourth quarter: 3

1
2
3
4

Preliminary.
Nonfarm business, all persons.
Seasonally adjusted.
Unemployed as percent of total labor force including persons in the Armed Forces stationed in the United States.

Sources: Department of Commerce (Bureau of Economic Analysis and Bureau of the Census), Department of Labor (Bureau of
Labor Statistics), and Council of Economic Advisers.

TABLE 6-11.—Administration economic assumptions, 1984-89
[Calendar years, except as noted]
Item

1984

1985

1987

1986

1988

1989

Level
Employment (millions)

l

Unemployment rate (percent) 2

106.3

108.4

110.7

113.2

116.0

118.3

7.8

7.6

7.3

6.8

6.1

5.7

Percent change
Consumer prices

3

Real GNP
Real compensation per hour 4
Output per hour 4
1
2
3
4

4.4

4.6

4.5

4.2

3.9

3.6

5.3

4.1

4.0

4.0

4.0

3.9

.5

1.3

1.5

1.9

1.9

1.8

1.9

2.1

1.8

1.5

1.0

.9

Employment series includes persons in the Armed Forces stationed in the United States.
Unemployed as percent of total labor force. See footnote 1.
Wage earners and clerical workers.
Nonfarm business, all persons.

Source-. Council of Economic Advisers.

tions is program and budget planning, no issue of Federal policy depends on precise predictions of year-to-year fluctuations in GNP.
The Administration's economic assumptions for 1985-89 involve
higher real growth and lower inflation than many private forecasters
are predicting; Administration and private sector nominal GNP
growth rates are similar. Compared to many private forecasts the Administration's higher real growth assumption probably reflects a different fiscal policy assumption and a different analysis of the growth




197

prospects for the U.S. economy. The underlying fiscal assumption is
that reduced growth in Federal spending and lower budget deficits
will enhance the economy's long-run growth. The Administration's
real growth assumptions are based on the assumption that labor productivity growth will be higher than that over the last decade, reflecting an environment of lower inflation and higher rates of saving and
capital formation. In contrast, many private forecasters seem to be
anticipating a continuation of the low productivity growth that characterized the 1970s.
GROWTH IN REAL GNP

Administration policies are designed to achieve a long, sustainable
economic expansion that takes the economy back to full employment
with declining inflation. The assumption of 4.0 percent growth in
real GNP for the 1985-88 period is a trend or average growth rate
projection; the economy may grow somewhat more or less rapidly in
any given year. In the Administration's view, any attempt to induce a
substantially higher real growth rate by monetary stimulus might be
temporarily successful, but growth accelerated in this way would not
be sustainable. The result would soon be rising inflation and another
recession.
The Administration's real growth assumption falls to 3.6 percent
by the fourth quarter of 1989. This assumption for 1989 does not
reflect a "forecast" as that term is normally used, but rather the recognition that the economy's long-run growth potential most likely is
below 4 percent. For example, over the 33-year period between the
business cycle troughs in 1949 and 1982, real growth averaged 3.4
percent per year.
The Administration's economic assumption of 4 percent real
growth for the 1985-88 period, therefore, assumes a gradual increase
in the utilization of the economy's labor and capital resources. For a
number of reasons, however, it is impossible to determine the specific year in which real GNP growth will slow. One of the principal reasons for this indeterminacy is that the sustainable level of resource
utilization is not known with precision; moreover, that level can be
altered through changes in microeconomic policies. The underlying
rate of growth of the economy is not known with precision either.
The importance of this factor is well illustrated by a simple calculation. A difference of only 0.1 percentage point in the underlying
growth rate accumulates to 0.5 percentage point in 5 years, sufficient
in one direction to permit 4.0 percent real GNP growth to continue
after 1989, or, in the other direction, to cause growth to slow in 1988
instead of 1989. The year-to-year variations in real GNP growth rates




198

require an allowance for errors several times the size of the one in
this illustration.
Another perspective on the Administration's real growth assumptions may be obtained by comparing them with real growth following
prior business cycle troughs. Under the Administration's economic
assumptions, average annual real GNP growth over the 7 years from
the cycle trough in the fourth quarter of 1982 to the fourth quarter
of 1989 is 4.3 percent. Real growth over comparable periods following prior business cycle troughs, excluding the ones in 1949 and
1980, averaged 3.8 percent. The highest of these 7-year growth rates
followed the 1961 trough; the rate for that period was 5.0 percent.
The lowest was 3.0 percent following the 1954 and 1975 troughs.
A visual perspective on the Administration's real GNP assumptions
through 1989 can be obtained from Chart 6-5. This chart shows
actual quarterly real GNP from 1970 through 1983, and projected
real GNP from 1984 through 1989. Superimposed on the chart is a
trend line fit to the data from the business cycle peak in the fourth
quarter of 1969 to the business cycle peak in the third quarter of
1981 and then projected forward.
From the chart it can be seen that the Administration's economic
assumptions take real GNP back to the indicated trend line by 1989.
Differences in the way the trend is fit would affect the relationship
between the 1989 trend and assumed levels of real GNP.
INFLATION

As seen in Table 6-11, the Administration has assumed a gradually
declining rate of inflation over the 1985-89 period. This assumption
reflects the view that the goal of stability in the general price level is
appropriate because inflation not only is costly and inequitable in
and of itself but also is disruptive of economic growth and employment stability. Also, eliminating inflation can be expected to reduce
volatile changes in inflationary expectations, which are a major contributing factor to business cycle fluctuations.
The gradual reduction in inflation assumed by the Administration
does not depend on a policy assumption that such a result will be
"forced" by deliberate actions to choke off economic growth whenever there is any sign of a rise in inflation. Rather, the decline in inflation is the anticipated outcome of the assumed steady and predictable monetary and fiscal policies. As with real growth, it is expected
that inflation may sometimes be higher and sometimes lower than
the Administration's assumption, but that the trend will be downward
as indicated.




199

Chart 6-5

Real Gross National Product
Forecast and Trend
Billions of 1972 dollars
2000

Seasonally Adjusted Annual Rates

1800

Trend

X

/ \
/

Forecast

1600

1400

1200

1000

I

1970

I

I

1972

I

I

1974

I

I

1976

I

1978

I

I

1980

I

I

1982

I

I

1984

I

I

1986

1

1

1988

Note.—Trend fitted from data for 1969 fourth quarter through 1981 third quarter.
Sources: Department of Commerce and Administration Forecast.

INTEREST RATES

Given the assumed decline in the inflation rate, it is reasonable to
assume that the expected rate of inflation will also decline, thereby
reducing the inflation premium in nominal interest rates. In addition,
under the assumptions of a declining budget deficit and a more stable
economic environment, the real rate of interest should decline,
ultimately reaching a level approximating the real rate prior to the
onset of the inflationary 1970s.
Interest rates, of course, have been quite variable historically and
very difficult to forecast. Although the Administration's economic
policies are designed to produce a more stable economy than in the
1970s, interest rate fluctuations around the declining trend should be
anticipated.




200

THE FULL EMPLOYMENT AND BALANCED GROWTH ACT OF
1978
The Full Employment and Balanced Growth (Humphrey-Hawkins)
Act of 1978 sets certain national economic goals and requires that
the Economic Report of the President, together with the Annual Report of
the Council of Economic Advisers, provide an analysis of the Nation's
progress toward meeting those goals. This section contains such an
analysis. In addition, as required by the act, it contains an Investment
Policy Report. The requirement for such a report reflects the finding
of the Congress, stated in this act, that "high rates of capital formation are necessary to ensure adequate rates of capacity expansion and
productivity growth, compliance with governmental health, safety,
and environmental standards, and the replacement of obsolete production equipment.'*
ECONOMIC GOALS

In setting goals for the unemployment and inflation rates in the
Balanced Growth Act, the Congress was mindful of the fact that "aggregate monetary and fiscal policies alone have been unable to
achieve full employment and production . . . and reasonable price
stability." In the act, the Congress made clear that exclusive concentration on any one goal could impede progress in achieving other
goals.
A central economic goal of the Congress, as indicated by the title
"Full Employment and Balanced Growth Act,'' was and is the
achievement of full employment. That goal is also a high priority for
this Administration.
A key observation from experience over the last two decades is that
rising inflation has been associated with rising unemployment. Each
time inflation accelerated, as measured by the change in the consumer price index—to 6.0 percent over the 12 months of 1969, to 12.2
percent in 1974, and to 13.4 percent in 1979—a temporary boost in
employment was achieved at the cost of a subsequent recession.
Moreover, the recessions became more serious. The unemployment
rate rose from a monthly low of 3.4 percent in May 1969 to a monthly peak of 6.1 percent in December 1970; from 4.6 percent in October 1973 to 9.0 percent in May 1975; from 5.6 percent in May 1979
to 7.8 percent in July 1980; and from 7.2 percent in April 1981 to
10.7 percent in November 1982. As interest rates rose to new
peaks—the monthly 3-month Treasury bill rate reached 7.9 percent
in 1970, 9.0 percent in 1974, 15.5 percent in 1980, and 16.3 percent
in 1981—strains accumulated in the financial system. Few accurately
forecasted the severity of these recessions, and consequently it was




201

difficult for both the private sector and the Federal Government to
deal with them. During each recession some businesses were forced
into bankruptcy and unemployment rose sharply.
From this experience it is clear that rising unemployment and
rising inflation can occur together. Indeed, each time prices accelerated substantially it proved impossible to avoid higher unemployment. Moreover, economic expansion and essentially stable, or declining, inflation can also occur together, as they did in the early
1960s, 1975-76, and most especially 1983. The tradeoff from inflationary economic policies is between lower unemployment temporarily and higher unemployment a short time later.
The Administration is committed to macroeconomic policy designed to avoid this boom-bust cycle and to achieve long-run balanced growth through steady and sustainable policies. Stable and
predictable policies offer the greatest promise of achieving a high
rate of employment over an extended period of years, with the smallest risk that the economy will experience severe recession.
The Balanced Growth Act set a goal that unemployment not
exceed 3 percent among individuals aged 20 and over, and 4 percent
among individuals aged 16 and over, by 1983. The act also set an
inflation goal of 3 percent by 1983 and zero by 1988, provided that
achieving the inflation goal did not impede achieving the unemployment goal. Finally, the act provided that the President could, if he
deemed necessary, recommend modification of the timetables for
reaching these goals.
Given the experience of the last two decades, recounted very briefly above, it is clear that the essential ingredient of Federal policies to
further the employment and inflation goals of the Balanced Growth
Act must be sustainability. Table 6-11 above, which reports the Administration's economic assumptions for 1984-89, provides a timetable for progress toward the employment and inflation goals of the
act. This table is pursuant to the act's requirement that this Annual
Report contain numerical goals. Reflecting the situation inherited by
the Administration when it assumed office and the severity of the
1981-82 recession, the table does not project complete realization of
the act's unemployment and inflation rate goals, but substantial progress toward them.
INVESTMENT POLICY REPORT

The 1983 Annual Report of the Council of Economic Advisers contained,

in Chapter 4, an extensive analysis of capital formation issues. That
analysis serves as the foundation for this much briefer report.
Updating the information published a year ago, and as discussed in
more detail earlier in this chapter, 1983 was a year of rising invest-




202

ment spending from the recession trough. Nevertheless, for the full
year 1983 real gross business fixed investment rose by only 1.1 percent over 1982 and'real net investment fell by 11.4 percent, however, rising equipment investment over the course of 1983 suggests
that the investment incentives in the tax acts of 1981 and 1982 are
now having the desired effect.
In addition to the investment incentives in the tax law, a higher
rate of investment is being encouraged by the lower rate of inflation.
Lower inflation increases the real value of capital depreciation allowances. Lower inflation also helps to provide the more stable economic environment needed to reduce risks and make business planning
easier.
The Administration's efforts to provide a stable and more productive business environment conducive to rising investment also include a number of microeconomic policies. Deregulation reduces
costs and promotes efficient use of the economy's resources. A general policy of relying on the market reduces the risks to the profitability of investment from future extensions of regulation. Financial
deregulation, discussed in Chapter 5 of this Annual Report, can be expected to improve the efficiency with which financial capital is allocated. Expanding international trade by resisting protectionism, as
discussed in Chapter 2, will also assist in raising real growth.




203




Appendix A
REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1983







LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,

Washington, D.C., December 31, 1983.
MR. PRESIDENT:

The Council of Economic Advisers submits this report on its activities during the calendar year 1983 in accordance with the requirements of the Congress, as set forth in section 10(d) of the Employment Act of 1946 as amended by the Full Employment and Balanced
Growth Act of 1978.
Sincerely,
MARTIN FELDSTEIN, Chairman




WILLIAM A. NISKANEN
WILLIAM POOLE

207

Council Members and their Dates of Service
Name
Edwin G. Nourse
Leon H. Keyserling

John D. Clark
Roy Blough
Robert C. Turner
Arthur F. Burns
Neil H. Jacoby
Walter W. Stewart
Raymond J. Saulmer
Joseph S. Davis
Paul W. McCracken
Karl Brandt
Henry C. Walhch
Walter W. Heller
James Tobin
Kermit Gordon
Gardner Ackley
John P Lewis
Otto Eckstein
Arthur M. Okun
James S. Duesenberry
Merton J. Peck
Warren L. Smith
Paul W. McCracken
HendrikS. Houthakker
Herbert Stem
Ezra Solomon
Marina v.N. Whitman
Gary L Seevers
William J Fellner
Alan Greenspan
Paul W. MacAvoy
Burton G. Malkiel
Charles L. Schultze
William D. Nordhaus
Lyle E Gramley
George C. Eads
Stephen M. Goldfeld
Murray L. Weidenbaum
Jerry L Jordan
William A. Ntskanen
Martin Feldstetn
William Poole

Oath of office date

Position
Chairman. . .
Vice Chairman...
Acting Chairman
Chairman
Member
Vice Chairman
Member
Member
Chairman.
Member . .
Member.
.
Member.. .
Chairman
Member
Member .
Member
Member ..
Chairman
Member
Member
Member
Chairman
Member
Member
Member.
Chairman.. .
Member.
Member
.. .
Member
Chairman
Member
Member
Chairman .
.
Member
Member
..
Member
Member
Chairman
Member..
Member
Chairman..
Member
Memhpr
Member
Member
Chairman
Member
Member
Chairman
Member .




.

...
. .

.

. .

. .

Separation date

November 1,1949.
... August 9, 1946
August 9, 1946
November 2 , 1 9 4 9 . .
.
.
January 20,1953.
May 10,1950
August 9, 1946
February 11,1953.
May 10, 1950
August 20, 1952.
June 29, 1950
January 20,1953.
September 8, 1952
December 1, 1956.
March 19, 1953
February 9, 1955.
September 15, 1953
April 29, 1955.
December 2 , 1 9 5 3
. . April 4, 1955
January 20, 1961.
December 3, 1956 .
October 3 1 , 1958.
May 2, 1955
December 3,1956
.
. . . January 3 1 , 1959.
January 20, 1961.
November 1, 1958
January 20, 1961.
May 7,1959
November 15,1964.
January 29, 1961
July 3 1 , 1962.
January 29, 1961.
December 27, 1962.
January 29, 1961
. . . August 3, 1962
February 15,1968.
November 16,1964
August 3 1 , 1964.
May 17 1963
February 1, 1966.
September 2, 1964
November 16, 1964
January 20, 1969.
.
.
. . February 15, 1968
June 30, 1968.
February 2, 1966
January 20, 1969.
February 15, 1968 .
. . .
January 20,1969.
July 1, 1968
December 3 1 , 1 9 7 1 .
February 4 , 1 9 6 9
July 15, 1971.
February 4, 1969
February 4, 1969 .
August 3 1 , 1974.
January 1, 1972
March 26, 1973.
September 9, 1971
August 15, 1973.
March 13, 1972 . . .
April 15, 1975.
July 23, 1973
February 25, 1975
October 31 1973
January 20, 1977.
September 4 , 1 9 7 4
November 15, 1976.
June 13, 1975 . . . .
January 20, 1977.
July 22, 1975
January 20, 1981.
January 2 2 , 1 9 7 7 . . .
March 18, 1977
February 4, 1979.
March 18 1977
Mav 27 1980
June 6 1979
January 20 1981
January 20, 1981.
August 20, 1980
February 27, 1981
. . . August 25, 1982.
July 14, 1981
July 3 1 , 1982.
June 12, 1981
October 14, 1982
December 10, 1982 . . .

208

Report to the President on the Activities of the
Council of Economic Advisers During 1983
The Employment Act of 1946 (P.L. 304-79th Congress), as amended, provides the statutory base for the activities of the Council of
Economic Advisers. The Council, through the Chairman, provides
advice to the President on a wide range of domestic and international
economic policy issues, assists in the preparation of the President's
Economic Report to the Congress, and conducts analyses and studies
on a wide range of economic issues in support of its primary mission.
Martin Feldstein, William A. Niskanen, and William Poole continued to serve as Council Members in 1983, with Mr. Feldstein as
Chairman. Mr. Feldstein is on leave from Harvard University where
he is a Professor of Economics. Mr. Niskanen is on leave from the
University of California at Los Angeles where he is a Professor of
Business Administration. Mr. Poole is on leave from Brown University where he is a Professor of Economics.
MACROECONOMIC POLICIES
As is its tradition, during 1983 the Council devoted much of its
time to assisting the President in the formulation of broad economic
policy objectives and the programs to carry them out. The development of economic assumptions and monitoring of current developments, under Mr. Poole, were areas of major interest. Monetary
policy developments received especially close attention.
Mr. Poole chaired the interagency subcabinet forecasting group,
consisting of representatives from the Department of the Treasury
and the Office of Management and Budget, with participation by the
Department of Commerce. The Chairman of the Council continued
his responsibility for presenting to the President the economic assumptions developed with the Office of Management and Budget and
the Department of the Treasury.
MICROECONOMIC POLICIES
A wide variety of microeconomic issues received Council attention
during the year. Council Members chaired or participated in numerous Cabinet level groups dealing with such issues as international
trade, economic statistics, Federal credit programs, alternatives to
Federal regulation, Federal housing programs, and fuel economy




209

standards. Mr. Niskanen chaired Cabinet Council working groups
dealing with employee pension legislation.
The Chairman actively participated during the early months of the
year, and then during the late fall budget cycle, in Cabinet level reviews of the Federal budget.
PUBLIC INFORMATION
The Council's Annual Report is the principal medium through which
the Council informs the public of its work and its views. It is also an
important vehicle for presenting and explaining the Administration's
domestic and international economic policies. Distribution of the
Report in recent years has averaged about 50,000 copies. The Council
also assumes primary responsibility for the monthly Economic Indicators, a publication prepared by the Council's Statistical Office, under
the supervision of Catherine H. Furlong. The Joint Economic Committee issues the Indicators, which has a distribution of approximately
10,000 copies. Information is also provided to members of the public
through speeches and other public appearances by the Council Members.
ORGANIZATION AND STAFF OF THE COUNCIL
OFFICE OF THE CHAIRMAN
The Chairman is responsible for communicating the Council's
views to the President. This duty is performed through discussions
with the President and written reports on economic developments.
The Chairman also represents the Council at Cabinet meetings and
at many other formal and informal meetings of government officials.
He exercises ultimate responsibility for directing the work of the professional staff.
COUNCIL MEMBERS
The two Council Members are responsible for all subject matter
covered by the Council, including direct supervision of the work of
the professional staff. Members represent the Council at a wide variety of interagency and international meetings and assume major responsibility for selecting issues for Council attention.
In practice, the small size of the Council permits the Chairman and
Council Members to work as a team on most policy issues. There
was, however, an informal division of subject matter among them in
1983. Mr. Poole assumed primary responsibility for domestic and international macroeconomic analysis, economic projections, and monetary and financial issues. Mr. Niskanen is primarily responsible for




210

mieroeconomic and sectoral analysis, international trade questions,
and regulatory issues.
PROFESSIONAL STAFF
At the end of 1983 the professional staff consisted of the Special
Assistant to the Chairman, the Senior Statistician, nine senior staff
economists, five junior staff economists, and three research assistants.
The professional staff and their special fields at the end of 1983
were:
Geoffrey O. Carliner
Special Assistant to the Chairman
Senior Staff Economists
Lincoln F. Anderson
Jeffrey A. Frankel
Stephen K. Halpert .,
William S. Haraf
David R. Henderson
Lawrence B. Lindsey
Robert L. Thompson
Kathleen P. Utgoff
Robert S. Villanueva

Macroeconomic Analysis
International Finance
Legal and Regulatory Policy
Macroeconomic Analysis and Financial Regulation
Health and Energy
Public Finance and Taxation
Food and Agriculture
Labor and Employment
Macroeconomic Analysis and Housing Policy
Statistician

Catherine H. Furlong..

Senior Statistician
Junior Staff Economists

Kenneth A. Froot
Gail G. Ifshin
William S. Milberg
John F. Navratil
Charles N. Schorin

International Trade and Finance
Transportation and Regulation
International Trade
Taxation
Macroeconomic Analysis and Labor
Research Assistants

Andrew G. Berg
Suzanne G. Greenspun
Andrew R. Myers

Fiscal Policy
Current Economic Conditions
Macroeconomic Analysis

Catherine H. Furlong, Senior Statistician, continued to be in
charge of the Council's Statistical Office. Mrs. Furlong has primary
responsibility for managing the Council's statistical information
system. She supervises the publication Economic Indicators and the
preparation of all statistical matter in the Economic Report. She also
oversees the verification of statistics in memoranda, testimony, and




211

speeches. Natalie V. Rentfro, Linda A. Reilly, and Barbara L. Sibel
assist Mrs. Furlong.
In preparing the Economic Report the Council relied upon the editorial services of Joseph Foote. Donald Uttrich worked at the Council
during the fall as an intern.
SUPPORTING STAFF
The Administrative Office of the Council of Economic Advisers
provides general support for the Council's activities. Serving in the
Administrative Office were Elizabeth A. Kaminski, Staff Assistant to
the Council, and Catherine Fibich, Administrative Assistant.
Members of the secretarial staff for the Chairman and Council
Members during 1983 were Patricia A. Lee, Susan A. Lindsey, Georgia A. O'Connor, and Alice H. Williams. Secretaries for the professional staff were Carolyn L, Bazarnick, Bessie M. Lafakis, Rosemary
M. Rogers, Margaret L. Synder, and Lillie M. Sturniolo.
DEPARTURES
The Council's professional staff are in most cases on leave of absence from universities, other government agencies, or research institutions. Their tenure with the Council is usually limited to 1 or 2
years. Senior staff economists who resigned during the year and their
subsequent affiliations were Daniel J. Frisch (Department of the
Treasury), Thomas J. Kniesner (University of North Carolina), Paul
R. Krugman (Massachusetts Institute of Technology), Evan R. Kwerel
(Federal Communications Commission), Thomas S. McCaleb (Florida
State University), Stephen K. McNees (Federal Reserve Bank of
Boston), Glenn L. Nelson (University of Minnesota), Lawrence H.
Summers (Harvard University), Adrian W. Throop (Federal Reserve
Bank of San Francisco), and Benjamin Zycher (California Institute of
Technology). Eric I. Hemel, Special Assistant to the Chairman,
joined the Federal Home Loan Bank Board.
Staff economists who resigned during the year were N. Gregory
Mankiw (Harvard Law School and the Massachusetts Institute of
Technology) and Robert H. Meyer (The Brookings Institution).
Junior staff economists who resigned in 1983 were Christopher B.
Ballinger (University of California, Berkeley), John H. Cochrane
(University of California, Berkeley), John S. Earle (Stanford University), Thomas W. Gilligan (Washington University, St. Louis), David S.
Reitman (Stanford University), and Dan C. Roberts (Chase Manhattan Bank).




212

Appendix B
STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION







C O N T E N T S
NATIONAL INCOME OR EXPENDITURE:
Page

B-l.
B-2.
B-3.
B-4.

Gross national product, 1929-83
Gross national product in 1972 dollars, 1929-83
Implicit price deflators for gross national product, 1929-83
Fixed-weighted price indexes for gross national product, 1972
weights, 1959-83
B-5.
Changes in gross national product, personal consumption expenditures, and related price measures, 1929-83
B-6.
Gross national product by major type of product, 1929-83
B-7.
Gross national product by major type of product in 1972 dollars,
1929-83
B-8.
Gross national product by sector, 1929-83
B-9.
Gross national product by sector in 1972 dollars, 1929-83
B-10. Gross national product by industry, 1947-82
B-ll. Gross national product by industry in 1972 dollars, 1947-82
B-12. Gross domestic product of nonfinancial corporate business, 192983
B-l 3. Output, costs, and profits of nonfinancial corporate business,
1948-83
B-14. Personal consumption expenditures, 1929-83
B-15. Gross and net private domestic investment, 1929-83
B-16. Gross and net private domestic investment in 1972 dollars, 192983
B-17. Inventories and final sales of business, 1946-83
B-18. Inventories and final sales of business in 1972 dollars, 1947-83
B-19. Relation of gross national product, net national product, and national income, 1929-83
B-20. Relation of national income and personal income, 1929-83
B-21. National income by type of income, 1929-83
B-22. Sources of personal income, 1929-83
B-23. Disposition of personal income, 1929-83
B-24. Total and per capita disposable personal income and personal consumption expenditures in current and 1972 dollars, 1929-83
B-25. Gross saving and investment, 1929-83
B-26. Saving by individuals, 1946-83
B-27. Number and median income (in 1982 dollars) of families and persons, and poverty status, by race, selected years, 1947-82
POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY:
B-28. Population by age groups, 1929-83
B-29. Population and the labor force, 1929-83
B-30. Civilian employment and unemployment by sex and age, 1947-83 ..
B-31. Unemployment by duration and reason, 1947-83




215

220
222
224
226
227
228
229
230
231
232
233
234
235
236
238
239
240
241
242
243
244
246
248
249
250
251
252
253
254
256
257

B-32.
B-33.
B-34.
B-35.
B-36.
B-37.
B-38.
B-39,
B-40.
B-4L

Civilian labor force participation rate and civilian employment/
population ratio, 1948-83
Unemployment rate, 1948-83
Civilian labor force participation rate by demographic characteristic, 1954-83
Civilian unemployment rate by demographic characteristic, 194883
Unemployment insurance programs, selected data, 1950-83
Wage and salary workers in nonagricultural establishments, 192983
Average weekly hours and hourly earnings in selected private nonagricultural industries, 1947-83
Average weekly earnings in selected private nonagricultural industries, 1947-83
Productivity and related data, business sector, 1947-83
Changes in productivity and related data, business sector, 1948-83.

258
259
260
261
262
263
264
265
266
267

PRODUCTION AND BUSINESS ACTIVITY:
B-42.
B-43.
B-44.
B-45.
B-46.
B-47.
B-48.
B-49.
B-50.
B-51.

Industrial production indexes, major industry divisions, 1929-83....
Industrial production indexes, market groupings, 1947-83
Industrial production indexes, selected manufactures, 1947-83
Capacity utilization rate in manufacturing, 1948-83
New construction activity, 1929-83
New housing units started and authorized, 1959-83
Nonfarm business expenditures for new plant and equipment,
1947-84
Sales and inventories in manufacturing and trade, 1947-83
Manufacturers' shipments and inventories, 1947-83
Manufacturers' new and unfilled orders, 1947-83

268
269
270
271
272
274

Consumer price indexes, major expenditure classes, 1946-83
Consumer price indexes, selected expenditure classes, 1946-83
Consumer price indexes, commodities, services, and special
groups, 1939-83
Changes in consumer price indexes, 1958-83
Changes in consumer price indexes, commodities and services,
1948-83
Producer price indexes by stage of processing, 1947-83
Producer price indexes by stage of processing, special groups,
1974-83
Producer price indexes for major commodity groups, 1947-83
Changes in producer price indexes for finished goods, 1950-83

279
280

275
276
277
278

PRICES:
B-52.
B-53.
B-54.
B-55.
B-56.
B-57.
B-58.
B-59.
B-60.

282
283
284
285
287
288
290

MONEY STOCK, CREDIT, AND FINANCE:
B-61.
B-62.
B-63.
B-64.
B-65.
B-66.

Money stock measures and liquid assets, 1959-83
Components of money stock measures and liquid assets, 1959-83...
Commercial bank loans and investments, 1939-83
Total funds raised in credit markets by nonfinancial sectors, 197583
Federal Reserve Bank credit and reserves of depository institutions, 1929-83
Aggregate reserves of depository institutions and monetary base,
1959-83




216

291
292
293
294
296
297

B-67.
B-68.
B-69.
B-70.
B-71.

Bond yields and interest rates, 1929-83
Consumer credit outstanding, 1950-83
Net change in consumer credit outstanding, 1950-83
Mortgage debt outstanding by type of property and of financing,
1939-83
Mortgage debt outstanding by holder, 1939-83

GOVERNMENT FINANCE:
B-72. Federal budget receipts, outlays, and debt, fiscal years 1974-85
B-73. Federal budget receipts and outlays, off-budget outlays, and debt,
fiscal years 1929-85
B-74. Relation of Federal Government receipts and expenditures in the
national income and product accounts to the unified budget,
fiscal years 1983-85
B-75. Government receipts and expenditures, national income and product accounts, 1929-83
B-76. Federal Government receipts and expenditures, national income
and product accounts, 1959-85
B-77. State and local government receipts and expenditures, national
income and product accounts, 1946-83
B-78. State and local government revenues and expenditures, selected
fiscal years, 1927-82
B-79. Interest-bearing public debt securities by kind of obligation, 196783
B-80. Maturity distribution and average length of marketable interestbearing public debt securities held by private investors, 1967-83,
B-81. Estimated ownership of public debt securities, 1976-83
CORPORATE PROFITS AND FINANCE:
B-82. Corporate profits with inventory valuation and capital consumption
adjustments, 1929-83
B-83. Corporate profits by industry, 1929-83
B-84. Corporate profits of manufacturing industries, 1929-83
B-85. Sales, profits, and stockholders' equity, all manufacturing corporations, 1950-83
B-86. Relation of profits after taxes to stockholders' equity and to sales,
all manufacturing corporations, 1947-83
B-87. Sources and uses of funds, nonfarm nonfinancial corporate business, 1946-83
B-88. Current assets and liabilities of U.S. corporations, 1940-83
B-89. State and municipal and business securities offered, 1934-83
B-90. Common stock prices and yields, 1949-83
B-91. Business formation and business failures, 1940-83
AGRICULTURE:
B-92. Farm income, 1929-83
B-93. Farm output and productivity indexes, 1929-83
B-94. Farm input use, selected inputs, 1929-83
B-95. Indexes of prices received and prices paid by farmers, 1946-83
B-96. U.S. exports and imports of agricultural commodities, 1940-83
B-97. Balance sheet of the farming sector, 1929-84
INTERNATIONAL STATISTICS:
B-98. Exchange rates, 1967-83
B-99. U.S. international transactions, 1946-83




217

298
300
301
302
303
304
306
307
308
309
310
311,
312
313
314

315
316
317
318
319
320
321
322
323
324
325
326
327
328
329
330
331
332

B-100. U.S. merchandise exports and imports by principal end-use category, 1965-83
B-101. U.S. merchandise exports and imports by area, 1974-83
B-102. U.S. merchandise exports and imports by commodity groups,
1965-83
B-103. International investment position of the United States at year-end,
selected years, 1970-82
B-104. World trade: Exports and imports, 1965, 1970, 1975, and
1979-83
B-105. World trade balance and current account balances, 1965, 1970,
1975, and 1979-83
B-106. International reserves, selected years, 1952-83
B-107. Growth rates in real gross national product, 1960-83
B-108. Industrial production and consumer prices, major industrial countries, 1960-83
B-109. Civilian unemployment rate, and hourly compensation, major industrial countries, 1960-83




218

334
335
336
337
338
339
340
341
342
343

General Votes
Detail in these tables may not add to totals because of rounding.
Unless otherwise noted, all dollar figures are in current dollars.
Symbols used:
p
Preliminary.
Not available (also, not applicable).




219

NATIONAL INCOME OR EXPENDITURE
TABLE B-l.—Gross national product, 1929-83
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross private domestic investment

Personal consumption
expenditures

Fixed investment
Year or quarter

Gross
national
product

Nonresidential
Total

NonDura- durable
ble
goods goods

Serv-

Total
Total

StrucTotal tures

Change
Residential

Producers
durable Total
equipment

ProNonducers
farm Farm durstruc- struc- able
tures tures equipment

1929
1933
1939

103.4
55.8
90.9

77.3
45.8
67.0

9.2
3.5
6.7

37.7
22.3
35.1

30.3
20.1
25.2

16.2
1.4
9.3

14.5
3.0
8.8

10.6
2.4
5.9

5.1
1.0
2.0

5.5
1.4
3.9

3.9
.6
2.9

3.6

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

100.0
125.0
158.5
192.1
210.6
212.4
209.8
233.1
259.5
258.3

71.0
80.8
88.6
99.4
108.2
119.5
143.8
161.7
174.7
178.1

7.8
9.7
6.9
6.5
6.7
8.0
15.8
20.4
22.9
25.0

37.0
42.9
50.8
58.6
64.3
71.9
82.7
90.9
96.6
94.9

26.2
28.2
31.0
34.3
37.1
39.6
45.3
50.4
55.3
58.2

13.1
17.9
9.9
5.8
7.2
10.6
30.7
34.0
45.9
35.3

10.9
13.4
8.1
6.4
8.1
11.7
24.3
34.4
41.1
38.4

7.5
9.4
6.0
5.0
6.9
10.1
16.9
23.0
26.3
24.4

2.3
3.0
1.9
1.4
1.9
2.8
6.9
7.7
9.0
8.7

5.2
6.4
4.1
3.7
5.0
7.3
9.9
15.3
17.3
15.7

3.4
4.0
2.2
1.4
1.3
1.5
7.4
11.4
14.9
13.9

3.2
3.6
1.9
1.2
1.1
1.4
6.7
10.4
13.7
12.8

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

286.5
330.8
348.0
366.8
366.8
400.0
421.7
444.0
449.7
487.9

192.0
207.1
217.1
229.7
235.8
253.7
266.0
280.4
289.5
310.8

30.8
29.8
29.1
32.5
31.8
38.6
37.9
39.3
36.8
42.4

98.2
108.8
113.9
116.5
118.0
122.9
128.9
135.2
139.8
146.4

63.0
68.5
74.0
80.6
86.1
92.1
99.2
105.9
112.8
121.9

53.8
59.2
52.1
53.3
52.7
68.4
71.0
69.2
61.9
78.1

47.0
48.9
49.0
52.9
54.3
62.4
66.3
67.9
63.4
72.5

27.3
31.3
31.3
34.5
34.2
38.5
44.0
47.0
42.0
45.9

9.5
11.4
11.6
12.9
13.4
14.6
17.7
18.4
17.2
17.6

17.8
19.9
19.7
21.5
20.8
23.9
26.3
28.6
24.9
28.3

19.8
17.6
17.7
18.4
20.1
23.9
22.3
20.9
21.4
26.6

18.6
16.4
16.5
17.3
19.0
22.8
21.2
19.7
20.3
25.3

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

506.5
524.6
565.0
596.7
637.7
691.1
756.0
799.6
873.4
944.0

324.9
335.0
355.2
374.6
400.5
430.4
465.1
490.3
536.9
581.8

43.1
41.6
46.7
51.4
56.4
63.0
68.0
70.1
80.5
85.7

151.1
155.3
161.6
167.1
176.9
188.6
204.7
212.6
230.6
247.8

130.7
138.1
147.0
156.1
167.1
178.7
192.4
207.6
225.8
248.2

75.9
74.8
85.4
90.9
97.4
113.5
125.7
122.8
133.3
149.3

72.9 48.5
72.5 48.0
79.2 52.2
84.9 54.8
91.7 61.0
103.7 72.7
111.6 83.1
112.5 83.9
125.4 90.7
139.5 101.3

18.8
19.1
20.1
20.5
22.4
27.0
30.1
30.3
32.4
36.7

29.7
28.9
32.1
34.4
38.7
45.8
53.0
53.7
58.2
64.6

24.5
24.5
27.0
30.1
30.7
30.9
28.5
28.6
34.8
38.2

23.3
23.2
25.8
28.9
29.4
29.6
27.1
27.2
33.3
36.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

992.7
1,077.6
1,185.9
1,326.4
1,434.2
1,549.2
1,718.0
1,918.3
2,163.9
2,417.8

621.7
672.2
737.1
812.0
888.1
976.4
1,084.3
1,204.4
1,346.5
1,507.2

85.2
97.2
111.1
123.3
121.5
132.2

265.7
278.8
300.6
333.4
373.4
407.3
441.7
478.8
200.2 528.2
213.4 600.0

270.8
296.2
325.3
355.2
393.2
437.0
485.7
547.4
618.0
693.7

144.2
166.4
195.0
229.8
228.7
206.1
257.9
324.1
386.6
423.0

141.0
158.8
184.8
211.3
214.5
213.0
246.0
301.0
360.1

103.9
107.9
121.0
143.3
156.6
157.7
174.1
205.2
248.9
290.2

38.7
40.5
44.1
51.0
55.9
55.4
58.8
64.4
78.7
98.3

65.2 37.1 35.4
67.4 50.9 48.9
76.9 63.8 61.5
92.3 68.0 65.6
100.7 57.9 54.8
102.3 55.3 52.4
115.3 72.0
140.8 95.8
170.2 111.2 107.0
191.9 118.6 114.0

1980
1981
1982
1983 ".

2,631.7
2,954.1
3,073.0
3,309.5

1,668.1
1,857.2
1,991.9
2,158.6

214.7
236.1
244.5
278.6

668.8 784.5
733.9 887.1
761.0 986.4
804.3 1,075.7

401.9
474.9
414.5
471.3

411.7
456.5
439.1
478.2

308.8
352.2
348.3
347.7

110.9
133.4
141.9
131.4

197.9 102.9 98.1
218.8 104.3 99.8
206.4 90.8 86.0
216.3 130.5 125.5

2,866.6
2,912.5
3,004.9
3,032.2

1,802.8
1,835.8
1,886.1
1,904.1

236.9
233.4
243.5
230.8

716.3
730.6
741.1
747.7

849.6
871.8
901.5
925.6

455.5
472.1
495.8
476.2

444.7
457.1
462.2
461.8

333.1
347.6
360.6
367.6

121.6 211.5 111.6 107.5
129.4 218.3 109.5 105.2
137.0 223.6 101.7 97.0
145.5 222.1 94.3 89.5

3,021.4
3,070.2
3,090.7
3,109.6

1,938.9
1,972.8
2,008.8
2.046.9

239.4
242.9
243.4
252.1

749.7 949.7
754.7 975.2
766.6 998.9
773.0 1,021.8

422.9
432.5
425.3
377.4

448.6
443.7
430.2
433.8

361.3
352.7
342.3
337.0

144.7
144.2
140.0
138.6

3,171.5
3,272.0
3,362.2
3,432.0

2,073.0
2,147.0
2,181.1
2,233.1

258.5
277.7
282.8
295.2

777.1
799.6
814.8
825.9

1,037.4
1,069.7
1,083.5
1,112.0

404.1
450.1
501.1
529.8

443.5
464.6
492.5
512.1

332.1
336.3
351.0
371.2

132.9 199.3 111.3 106.7
127.4 208.8 128.4 123.3
130.9 220.2 141.5 136.3
134.5 236.8 140.8 135.6

m

27

1981:

\\ZZZZ
Ill
IV

1982:
HI

IV
1983:

\\ZZ'Z'Z

in
IV *
See next page for continuation of table.




220

216.5
208.5
202.2
198.4

87.3
91.0
87.9
96.8

83.2
86.1
83.4
91.2

TABLE B-l.—Cross national product, 1929-83—Continued
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Net exports of goods and
services
Year or quarter

Federal
Net
exports Exports m ports Total

Total

Nation- Nondeal
defense fense

Gross
national
product

Final
sales

3.9

6.6
4.2
7.0

3.9
3.2
2.6
1.6
2.0
1.1
2.8
3.7
6.0
7.2

8,1
8.0
7.8
7.5
7.6
8.2
9.9
12.8
15.3
18.0

97.8
120.6
156.7
192.8
211.6
213.5
203.5
233.5
254.8
261.4

10.0
25.0
26.7
21.3
9.6
.9
-1.2
11.1
11.3

8.1
23.2
30.0
23.0
9.8
.9
-4.7
14.8
9.1
2.6

14 0
33.5
45.8
48.6
41.1
38.4
40.2
44 0
45.6
45.6

4.7
4.8
6.5
8.9
6.8
6.0
5.7
5.9
8.3
8.3

19.8
21.8
23.2
25.0
27.8
30.6
33.5
37.1
41.1
43.7

279.7
320.5
344.8
366.3
368.4
394.1
417.0
442.6
451.2
482.2

10.9
15.5
5.2
5.4
.0
9,0
5.4
5.3
1.3
8.5

7.0
14.6
7.6
6.2
.6
7.0
5.8
6.1
1.9
6.9

53 7
57.4
63 7
64.6
65.2
67 3
78.8
90.9
98 0
97.6

44 5
47.0
511
50.3
49 0
49 4
60.3
715
76 9
76 3

93
10.4
12 7
14.3
16.2
17 8
18.5
19.5
212
21.2

46.5
50.8
54.3
59.0
64.6
71.1
79.8
89.3
1010
111.2

503.6
522.2
558.8
590.7
632.1
681.2
741.9
789.3
865.5
934.2

3.8
3.6
7.7
5.6
6.9
8.4
9.4
5.8
9.2
8.1

4.4
3.7
7.0
5.7
7.0
7.8
8.9
6.4
9.7
7.9

2201
234 9
253.1
270 4
304.1
339.9
362 1
393 8
431.9
474.4

95.7
96 2
101.7
102 0
111.0
122.7
129.2
143 4
153.6
168.3

73.6
70 2
73.1
72 8
77.0
83.0
86 0
92 8
100.3
111.8

111
26 0
28.5
29,1
33.9
39.7
43.2
50 6
53.3
56.5

124.4
138.7
151.4
168.5
193.1
217.2
232.9
250.4
278.3
306.0

989.5
1,070.0
1,175.7
1,307.9
1,420.1
1,556.1
1,706.2
1,895.3
2,137.4
2,403.5

5.2
8.6
10.1
11.8
8.1
8.0
10.9
11.7
12.8
11.7

5.9
8.1
9,9
11.2
8.6
9.6
9.6
11.1
12.8
12.4

314 8
342 5
330.2
346.4

537 8
595 7
649.2
690.2

197.0
229.2
258.7
275.2

131.2
154 0
179.4
200.3

65.9
75.2
79.3
74.9

340.8
366.5
390.5
415.0

2,641.5
2,935.6
3,097.5
3,316.4

8.8
12.2
4.0
7.7

9.9
11.1
5.5
7.1

367.3
369.2
367.5
3710

335.4
348.1
344.7
341.7

576.3
583.5
600.3
622.8

215.7
220.4
232.4
248.5

143.3
151.2
154.9
166.7

72.4
69.2
77.5
81.8

360.5
363.2
367.9
374.3

2,855.7
2,897.5
2,971.4
3,017.9

20.5
6.6
13.3
3.7

16.1
6.0
10.6
6.4

29 9
33.3
.9
5.6

358 4
364.5
346.0
321.6

328 5
331.2
345.0
316.1

629 8
631.6
655.7
679.7

249.7
244.1
261.7
279.2

1681
175.2
183.6
190.8

81.7
68.9
78.1
88.5

380.0
387.5
394.0
400.5

3,047.1
3,081.4
3,095.6
3,165.9

1.4
6.6
2.7
2.5

3.9
4.6
l.S
9.4

17 0
-8.5
-18.3
-32.6

326 9
327.1
341.1
348.1

309 9 ,677 4
335.6 683.4
359.4 698.3
380.7 701.7

273.5
273.7
278.1
275.6

194 4
199.4
201.2
206.2

79.1
74.3
76.9
69.4

404.0
409.7
420.2
426.1

3,210.9
3,286.6
3,353.7
3,414.3

8.2
13.3
11.5
8.6

5.8
9.8
8.4
l.t

7.0
2.4
4.6

5.9
2.0
3.4

8.8
8.2
13.5

1.4
2.1
5.2

1.2

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

18
15
.2
-19
17
_5
7.8
119
6.9
65

54
6.1
5.0
4.6
55
74
15.1
20 2
17.5
16 3

36
4.7
4.8
6.5
72
7.9
7.3
8.3
10.5
9.8

14 2
24.9
59.8
88.9
97.0
82.8
27.5
25.5
32.0
38.4

6.1
16.9
52.0
81.3
89.4
74.6
17.6
12.7
16.7
20.4

22
13.7
49.4
79.7
87 4
73.5
14.8
9.0
10.7
13.2

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

22
44
3.2
13
2.5
30
5.3
73
3.3
1.4

14 4
19 7
19.1
18 0
18.7
210
25.0
281
24.2
24.8

12 2
15.3
15.9
16.7
16.2
18.0
19.8
20 8
21.0
23.4

38.5
60.1
75.6
82.5
75.8
75.0
79.4
87.1
95.0
97.6

18.7
38.3
52.4
57.5
47.9
44.5
45.9
50.0
53.9
53.9

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

55
6.6
64
7.6
10 1
88
6.5
63
43
42

28 9
29.9
318
34.2
38 8
41 1
44.6
47 3
52 4
57 5

23 4
23.3
25 4
26.6
28.8
32 3
38.1
410
481
53 3

100 3
108.2
118 0
123.7
129.8
138 4
158.7
180 2
199 0
208 8

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

67
41
.7
14 2
13.4
26 8
13 8
40
-1.1
13.2

65 7
68 8
77.5
109 6
146.2
154 9
170 9
182 7
218.7
281.4

59 0
64 7
76.7
95 4
132.8
128.1
157 1
186 7
219.8
268.1

23 9
26 3
17.4
-10.6

338 8
368 8
347.6
335.8

1981:
I
||
Ill
tv

31.9
21.1
22 8
29 2

1982:
I
||
||f
IV

1

Final
sales

101.7
57.4
90.5

1.1
4
1.2

1983:
|||
Ill p
IV

State
and
local

7.4
6.1
8.3

1929
1933
1939

1980
1981
1982 p
1983

Percent change
from preceding
periodl

Government purchases of goods and
services

5.3

Changes are based on unrounded data and therefore may differ slightly from changes computed from data shown here.
Source: Department of Commerce, Bureau of Economic Analysis.




221

T A B L E B-2.—Gross national product in 1972 dollars, 1929-83
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Personal consumption
expenditures

Gross private domestic investment

Fixed investment
Year or
quarter

Gross
national
product

Total

NonDurable
durable Services
goods
goods

Total
Total
Total

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983".

315.7
222.1
319.8
344.1
400.4
461.7
531.6
569.1
560.4
478.3
470.3
489.8
492.2
534.8
579.4
600.8
623.6
616.1
657.5
671.6
683.8
680.9
721.7
737.2
756.6
800.3
832.5
876.4
929.3
984.8
1,011.4
1,058.1
1,087.6
1,085.6
1,122.4
1,185.9
1.254.3
1,246.3
1,231.6
1,298.2
1,369.7
1,438.6
1,479.4
1,475.0
1,513.8
1,485.4

Residential

Nonresidential
Producers'
Strucdurable
tures
equipment

Total

Nonfarm
structures

20.9
10.7
18.6

98.1
82.9
115.1

96.1
76.9
86.1

33.6

51.2
13.2
32.0

37.5
10.4
20.9

21.1
5.0
8.7

16.4
5.5
12.1

13.7
2.8
11.1

13.0
2.5
10.4

0.6
.2
.6

21.2
24.2
15.7
14.0
13.0
14.4
25.4
30.1
32.5
35.5

119.9
127.6
129.9
134.0
139.4
150.3
158.9
154.8
155.0
157.4

88.8
91.8
95.5
100.2
102.8
106.3
116.7
120.9
124.7
126.5

44.5
55.8
29.5
18.1
19.7
27.7
70.9
70.0
82.1
65.4

38.3
43.8
24.3
18.0
22.0
31.4
58.7
70.2
76.6
69.8

25.8
30.4
17.6
14.0
18.7
27.6
42.1
48.9
51.1
46.0

10.0
12.0
6.8
4.2
5.5
8.3
18.9
17.4
18.4
17.9

15.8
18.5
10.9
9.8
13.2
19.2
23.2
31.5
32.6
28.1

12.5
13.3
6.7
4.0
3.4
3.8
16.6
21.3
25.6
23.8

11.6
12.3
6.0
3.5
3.0
3.4
15.3
19.7
23.8
22.1

.8
.9
.6
.4
.4
.3
1.1
1.3
1.5
1.4

42.6
39.1
38.0
42.1
42.5
51.1
48.8
48.6
45.3
50.7

161.8
165.3
171.2
175.7
177.0
185.4
191.6
194.9
196.8
205.0

132.9
137.2
140.9
145.6
150.5
157.6
165.0
170.3
175.9
184.8

93.5
93.9
83.0
85.3
83.1
103.8
102.6
97.0
87.5
108.0

83.0
80.2
78.7
83.8
85.3
96.1
96.8
95.5
89.3
100.9

50.0
52.9
52.1
56.3
55.4
61.3
65.4
66.2
59.3
63.6

19.2
20.7
20.6
22.6
23.6
25.4
28.3
28.4
26.8
27.4

30.8
32.2
31.5
33.7
31.8
35.9
37.0
37.8
32.5
36.2

33.0
27.3
26.6
27.5
29.9
34.8
31.5
29.2
30.0
37.4

31.3
25.7
25.1
26.1
28.5
33.5
30.0
27.8
28.6
35.9

1.3
1.3
1.2
1.2
1.1
.9
1.0
1.0
.9
1.0

51.4
49.3
54.7
59.7
64.8
72.6
78.4
79.5
88.3
91.8

208.2
211.9
218.5
223.0
233.3
244.0
255.5
259.5
270.5
277.3

192.4
200.2
208.8
217.8
229.8
240.9
251.8
263.7
275.6
288.8

104.7
103.9
117.6
125.1
133.0
151.9
163.0
154.9
161.6
171.4

101.2
100.9
109.7
117.5
125.9
140.1
146.2
142.7
152.6
160.4

66.9
66.7
72.0
75.1
82.7
97.4
108.0
105.6
109.5
116.8

29.5
30.2
31.6
31.9
34.4
40.6
43.4
42.0
42.8
45.0

37.4
36.5
40.4
43.1
48.3
56.8
64.5
63.6
66.8
71.8

32.9
32.8
36.3
40.9
41.5
41.2
36.6
35.4
41.3
41.7

.8
1.0
.9
.9
.9
.8

89.1
98.2
111.1
121.3
112.3
112.7
126.6
138.0
146.8
147.2

208.5
227.6
194.5
218.4

154.8
165.8
184.8
200.4
183.9
161.5
176.7
200.9
220.7
229.1
212.9
219.1
203.9
220.7

113.8
112.2
121.0
138.1
135.7
119.3
125.6
140.3
158.3
169.9

1,534.8 1,011.4

299.3
309.9
325.3
339.2
348.0
359.3
374.7
393.0
412.0
427.3
438.8
453.1
466.2
479.2

158.5
173.9
195.0
217.5
195.5
154.8
184.5
214.2
236.7
236.3

137.5
141.2
139.8
156.0

283.7
288.7
300.6
307.4
302.5
307.5
321.9
333.4
344.4
353.1
355.6
362.5
364.2
376.3

165.8
174.4
166.1
168.0

43.9
42.8
44.1
47.4
43.6
38.3
39.5
40.4
44.6
49.1
48.8
52.5
53.4
49.8

69.9
69.3
76.9
90.7
92.1
81.1
86.1
99.9
113.7
120.8
117.0
121.9
112.7
118.2

34.2
34,3
37.7
42.5
43.1
42.7
38.2
37.1
43.1
43.6
41.0
53.7
63.8
62.3
48.2
42.2
51.2
60.7
62.4
59.1
47.1
44.7
37.8
52.7

44.2
42.1
35.2
50.1

1,510.1
1,512.5
1,525.8
1,506.9

953.6
954.7
962.9
955.7

145.4
140.5
143.9
134.8

359.8
362.7
363.6
363.8

448.3
451.5
455.5
457.1

222.7
229.5
236.3
221.7

219.7
220.7
220.2
215.7

170.9
173.4
177.0
176.3

50.1
51.6
53.5
54.6

120.8
121.7
123.5
121.8

48.8
47.3
43.1
39.4

46.3
44.8
40.5
36.8

1,485.8
1,489.3
1,485.7
1,480.7

961.4
968.8
971.0
979.6

138.5
139.5
138.2
143.2

362.6
363.5
364.7
366.0

460.4
465.7
468.2
470.4

199.7
201.4
198.4
178.4

209.9
204.9
199.8
201.1

173.6
167.1
163.3
160.5

54.3
54.0
53.0
52.2

119.3
113.1
110.3
108.3

36.3
37.8
36.5
40.6

33.9
35.2
34.1
37.8

1,490.1 986.7
1,525.1 1,010.6
1.553.4 1,016.0
1.570.5 1,032.2

145.8
156.5
157.9
163.6

368.9
374.7
378.1
383.3

472.0
479.4
480.1
485.3

190.0
210.2
230.7
242.5

205.4
215.6
227.0
235.0

159.9
163.0
170.1
178.9

50.3
48.3
49.6
50.8

109.6
114.7
120.5
128.1

45.5
52.6
56.8
56.1

43.0
50.0
54.1
53.3

215.1
170.5
219.8
229.9
243.6
241.1
248.2
255.2
270.9
301.0
305.8
312.2
319.3
337.3
341.6
350.1
363.4
370.0
394.1
405.4
413.8
418.0
440.4
452.0
461.4
482.0
500.5
528.0
557.5
585.7
602.7
634.4
657.9
672.1
696.8
737.1
767.9
762.8
779.4
823.1
864.3
903.2
927.6
931.8
956.8
970.2

55.8
8.4

39.2
51.6
61.5
59.9
45.3
39.8
48.7
57.9
59.5
56.3

1981:

II
III....
IV....
1982:
I
III
IV
1983:

I
II
Ill

Producers'
Farm
struc- durable
tures equipment

See next page for continuation of table.




222

0.1

Change
in
business
inventories

TABLE B-2.—Gross national product in 1972 dollars, 1929-83—Continued
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates]

Year or quarter

Federal
Net
exports Exports Imports Total

1929.
1933
1939

Percent change
from preceding
periodl

Government purchases of goods and
services

Net exports of goods and
services

Totat

National
defense

Nondefense

State
and
local

Final
sales

Gross
national
product

Final
sales

37
.4
3.4

16.7
9.1
14.3

12 9
8.6
10.9

410
42.9
63.0

70
10.9
22.8

33 9
32.0
40.3

3110
227.0
318.2

1940
1941...
1942
1943
1944
1945
1946
1947
1948
1949

4.4
3.2
-.6
-59
-6.2
-37
13.2
18 9
10.8
10.7

15.5
16.4
11.4
9.8
10.5
13.8
27.3
32 2
26.3
25.8

11.1
13.2
12.0
15.7
16.8
17 5
14.0
13 3
15.5
15.2

65.3
97.8
191.6
2713
300.4
2654
93.1
75 7
84.7
96.8

26.7
61.0
157.4
239 6
269.7
233 7
58.2
36 3
42.8
49.2

38.6
36.8
34.3
317
30.7
317
34.9
39 4
41.9
47.5

337.9
388.4
456.5
5315
571.4
564 0
466.1
470 6
484.3
496.6

1950
1951....
1952
1953..
1954
1955....
1956
1957.
1958
1959

5.9
101
7.9
48
6.9
73
10.1
118
5.6
2.7

23.6
28.6
27.9
?6.6
27.8
30.7
35.3
38.0
33.2
33.8

17.7
18.5
20.0
21.8
20.9
23.4
25.2
261
27.6
31.1

98.1
133.7
159.8
170.1
156.0
152.3
153.5
1612
169.8
170.6

47.3
82.2
107.2 ... .
114 7
96.1
88 2
86.8
90 6
93.4
91.4

50.8
51.5
52.7
55.3
59.9
64.1
66.7
70.6
76.4
79.2

524.2
565.6
596.5
622.1
618.2
649.8
665.8
682.2
682.7
714.7

8.7
8.3
3.7
3.8
-1.2
6.7
2.1
1.8
-.4
6.0

5.6
7.9
5.5
4.3
-.6
5.1
2.5
2.5

1960
1961
1962
1963
1964...
1965
1966
1967
1968
1969

7.7
8.5
7.5
9.4
12 8
10.1
6.5
5.4
1.9
.9

38.4
39.3
41.8
44.8
503
51.7
54.4
56.7
61.2
65.0

30.7
30.9
34.3
35.4
37 5
41.6
47.9
51.3
59.3
64.1

172.8
182.9
193.2
197.6
202 6
209.8
229.7
248.5
260.2
257.4

90.4
95.3
102.8
101.8
100 2
100.3
112.6
125.1
128.1
121.8

82.4 733.7
87.5 753.7
90.4 792.4
95.8 825.0
102 4 869 3
109.5 917.5
117.1 968.0
123.4 999.2
132.1 1,049.1
135.6 1,076.6

2.2
2.6
5.8
4.0
5.3
6.0
6.0
2.7
4.6
2.8

2.7
2.7
5.1
4.1
5.4
5.5
5.5
3.2
5.0
2.6

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

3.9
16
7
15.5
27 8
32 2
25.4
22.0
24 0
37.2

70.5
71.0
77 5
97.3
108.5
103 5
110.1
112.9
126.7
146.2

66.6
69.3
76 7
81.8
807
714
84.7
90.9
102.7
109.0

251.1
250.1
2531
253.3
260 3
265 2
265.2
269.2
274.6
278.3

110.6
103 7
1017
95.9
96 6
97 4
96.8
100.4
100 3
102.1

731
68.3
66.9
66 4
64.9
65.4
65.7
67.4

28 5
27.6
29.7
310
31.8
35.0
34.7
34.8

140.5
146.4
1514
157.4
163.6
167 8
168.4
168.8
174.3
176.2

1,081.8
1,114.3
1175 7
1,237.1
1,234.7
1238 4
1,290.4
1,356.4
1,422.6
1,472.2

~3A
5.7
5.8
-.6
-1.2
5.4
5.5
5.0
2.8

3^0
5.5
5.2
-.2

1980
1981
1982
1983"..

50 3
43.0
28.9
11.7

1591
159.7
147.3
138.9

108 8
116.7
118.4
127.2

284 3
286.5
291.8
293.3

106 4
110.4
116.6
118.0

70 0
73.6
78.8
84.2

36 4
36.8
37.8
33.7

177.9
176.1
175.2
175.4

1,479.4
1,505.3
1,494.8
1,537.2

-.3
2.6
-1.9
3.3

.5
1.8

1981:
|
II
HI
IV..

48.3
44.1
39 8
39.9

160.6
160.7
159.0
158.7

112.4
116.6
119.1
118.8

285.6
284.1
286 8
289.6

107.3
107.9
1118
114.5

71.0
73.3
74.4
75.7

36.3
34.6
37.4
38.7

178.3
176.2
175.0
175.1

1,507.0
1,503.6
1,509.7
1,500.9

9.0
3^6
-4.9

6.8
-.9
1.6
-2.3

1982:
I
II
Ill
I
V

35.2
33.4
24.0
23.0

151.8
154.5
146.4
136.5

116.6
121.1
122.4
113.5

289.4
285.8
292.2
299.7

114.5
110.3
116.9
124.4

75.5
77.8
80.4
81.4

39.1
32.5
36.5
43.0

174.9
175.4
175.3
175.2

1,495.9
1,492.7
1,487.0
1,503.4

-5.5
1.0
-1.0
-1.3

-1.3
-.8
-1.5
4.5

1983:
1
II
HI.
IV P

20.5
12 3
114
2.5

137.3
136.2
140.7
141.5

116.8
123.9
129.2
139.0

292.9
292.1
295 2
293.2

118.4
117 6
118 9
116.9

82.7
84.2
84.2
85.6

35.7
33.4
34.7
31.2

174.5
174.5
176.3
176.3

1,505.5
1,530.5
1,549.7
1,563.0

2.6
9.7
7.6
4.5

.6
6.8

1

6.6
-2.2
7.8

-3.1
6.3

6.2
7.6
14.9
16.3
17.5
15.3
16 4
15.1
7.1
7.5
-15
-13
-14.7 -17.4
-1.7
10
4.1
2.9
2.5
.5

47

4.2
5.1
4.9
3.5

"is

5.1
3.5

Changes are based on unrounded data and therefore may differ slightly from changes computed from data shown here.

Source: Department of Commerce, Bureau of Economic Analysis.




223

TABLE B-3.—Implicit price deflators for gross national product, 1929-83

[Index numbers, 1972=100, except as noted; quarterly data seasonally adjusted]
Gross private domestic investmentL

Personal consumption
expenditures

Year or
quarter

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983 *
1981:
I
II
Ill
IV
1982:
ll"!!!!!!!!!!!!
Ill
IV
1983:
|
in

iv *
.

Gross
national
product 1

Fixed investment
Nonresidential

Total

NonDurable durable Services
goods goods

Total

Total

Total

Nonfarm
structures

Farm
structures

28.2
20.7
26.6

27.8
19.8
26.3

28.6
19.5
23.4

23.4
24.9
28.4
32.4
33.8
33.9
36.6
44.0
48.8
48.4

33.4
26.2
32.0
32.8
34.9
37.3
37.3
38.0
37.9
42.8
48.6
53.0
56.0

27.4
30.0
32.4
34.9
38.1
40.8
44.6
53.7
58.1
58.7

27.2
297
31.8
34.3
37.3
40.0
43.9
53.0
57.5
58.1

23.6
26.6
30.7
35.7
40.8
42.9
46.6
52.8
57.3
58.0

54.5
59.1
60.1
61.2
617
62.9
67.3
71.0
70.9
72.2

49.3
55.1
56.3
57.4
56.5
57.6
62.4
64.9
63.9
64.2

57.8
61.7
62.6
63.8
65.5
66.6
71.1
75.5
76.6
78.3

60.0
64.4
66.4
66.9
67.1
68.7
71.0
71.4
71.2
71.1

59.5
63.8
65.8
66.3
66.6
68.2
70.5
70.9
70.7
70.6

59.4
63.8
657
66.2
66.5
68.3
70.6
70.9
70.8
70.7

72.1
71.8
72.2
72.3
72.9
74.0
76.3
78.8
82.2
87.0

72.5
72.0
72.5
73.1
73.8
747
76.9
79.5
82.8
86.7

63.7
63.3
63.6
64.1
64.9
66.4
69.2
72.2
75.8
81.5

79.4
79.3
79.4
797
80.1
80.6
82.1
84.3
87.2
89.9

71.4
71.3
71.5
70.9
71.2
72.3
74.6
77.0
807
877

70.9
70.9
71.1
70.5
70.8
72.0
74.3
767
80.5
87.5

71.1
707
71.2
70.6
70.9
72.2
74.2
767
80.6
87.5

90.5
95.6
100.0
104.7
113.0
121.6
129.6
139.3
150.0
162.3

91.1
957
100.0
105.5
116.7
131.9
139.2
149.8
163.2
178.5

91.3
96.2
100.0
103.8
115.4
132.2
138.6
146.3
157.2
170.8

88.2
94.5
100.0
107.7
128.2
144.8
149.0
159.4
176.4
200.2

93.2
97.2
100.0
101.8
109.3
126.2
133.9
141.0
1497
158.8

90.5
94.8
100.0
109.1
120.3
131.0
140.7
158.0
178.3
200.5

90.3
947
100.0
109.4
120.8
131.6
141.3
159.0
179.8
2027

90.6
95.0
100.0
109.2
120.5
131.9
1407
157.0
180.0
2027

188.1
202.5
209.0
213.8

211.6
224.5

193.4
208.4
215.3
216.6

186.2
201.9
2097
206.9

227.4
254.2
265.8
264.0

169.1
179.5
183.1
182.9

218.5
233.5
240.2
247.4

221.6
237.1
244.0
250.5

218.1
234.0
245.9
251.4

162.9
166.1
169.3
171.2

199.1
201.4
203.8
205.5

189.5
193.1
197.9
202.5

202.4
207.2
210.0
214.1

194.9
200.5
203.7
208.5

242.6
250.5
255.9
266.6

175.1
179.3
181.0
182.4

228.8
231.6
235.7
239.2

232.1
234.9
239.4
243.3

225.5
231.4
235.8
239.2

201.7
203.6
206.9
209.0

172.9
174.2
176.1
176.1

206.8
207.6
210.2
211.2

206.3
209.4
213.4
217.2

2137
216.6
215.3
2157

208.1
211.1
209.6
209.9

266.4
267.1
264.3
265.4

181.5
184.4
183.3
183.2

240.8
240.9
240.9
238.4

245.0
244.8
244.9
241.5

240.6
246.5
242.4
249.9

210.1
212.5
214.7
216.3

177.3
177.5
179.1
180.4

210.6
213.4
215.5
215.5

219.8
223.1
225.7
229.1

215.9
215.5
217.0
217.9

207.7
206.3
206.3
207.5

264.0
2637
2637
264.5

181.8
182.1
182.7
184.9

244.9
243.9
249.0
251.2

248.2
246.8
251.9
254.2

248,2
249.8
251.5
254.9

35.9
26.9
30.5

44.2
32.5
35.9

38.4
26.8
30.5

31.6
26.1
29.2

28.3
22.4
27.7

28.3
22.9
28.2

24.3
19.2
23.0

30.9
33.2
367
40.1
42.4
44.1
47.8
52.9
56.0
55.8

367
40.0
43.7
46.7
51.3
55.5
62.1
67.8
70.3
70.5

30.9
33.6
39.1
437
46.2
47.8
52.1
58.7
62.3
60.3

29.5
30.8
32.4
34.2
36.1
37.3
38.8
41.7
44.4
46.0

28.5
30.7
33.5
35.7
37.0
37.2
41.3
49.0
53.7
54.9

29.1
31.0
33.9
35.9
36.8
367
40.0
46.9
51.5
53.0

56.9
60.6
62.0
63.2
63.7
64.4
65.6
67.8
69.2
70.6

72.2
76.3
76.7
77.2
75.0
75.6
77.7
80.9
81.3
83.8

60.7
65.8
66.5
66.3
66.6
66.3
67.3
69.4
71.0
71.4

47.4
49.9
52.6
55.4
57.2
58.4
60.1
62.2
64.1
66.0

567
60.9
62.3
63.1
63.6
65.0
68.5
71.1
71.0
71.8

71.9
72.6
73.7
74.8
75.9
77.2
79.4
81.4
84.6
88.4

83.8
84.3
85.4
86.2
87.1
86.8
86.7
88.2
91.1
93.3

72.6
73.3
73.9
74.9
75.8
77.3
80.1
81.9
85.3
89.4

67.9
69.0
70.4
717
72.7
74.2
76.4
78.7
81.9
86.0

92.5
96.5
100.0
105.7
116.4
125.3
131.7
139.3
149.1
162.5

957
99.0
100.0
1017
108.2
117.3
123.9
129.2
136.4
145.0

93.6
96.6
100.0
108.5
123.4
132.5
137.2
143.6
153.4
169.9

179.0
194.1
205.3
213.4

156.2
167.3
174.8
178.6

189.83
192.56
196.94
201.22

189.1
192.3
195.9
199.2

203.36
206.15
208.03
210.00
212.83
214.55
216.44
218.53

32.76
25.13
28.43
29.06
31.23
34.32
36.14
37.01
37.91
43.88
49.55
52.98
52.49
53.56
57.09
57.92
58.82
59.55
60.84
62.79
64.93
66.04
67.60
68.70
69.33
70.61
71.67
72.77
74.36
76.76
79.06
82.54
86.79
91.45
96.01
100.00
105.75
115.08
125.79
132.34
140.05
150.42
163.42
178.42
195.14
206.88
215.63

Residential

Producers'
durStructures able
equipment

See next page for continuation of table.




224

TABLE B-3.—Implicit price deflators for gross national product, 1929-83—Continued
[Index numbers, 1972=100, except as noted; quarterly data seasonally adjusted]
Exports and
imports of goods
and services'
Year or quarter

Government purchases of goods and services
Federal
Total

Total

National Nondefense defense

State
and
local

Final
sales

Percent change
from prf seeding
perk)d 2
Final
GNP
sales
implicit implicit
price
price
deflator deflator

Exports

Imports

1929
1933
1939

42 2
26.5
321

45.5
23.6
31.0

21.5
19.2
21.4

20 5
19.4
22.7

21.8
19.1
20.7

32 7
25.3
28.4

0.0
-2.1
-.8

-2.6
-.9

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

34.9
37.3
43 6
46.8
51.9
53.6
55.4
62.8
66.5
63.1

32.8
35.4
40.0
41.3
42.7
44.9
51.8
62.3
67.8
64.6

21.7
25.5
31.2
32.8
32.3
31.2
29.6
33.6
37.7
39.7

22.7
27.8
33 0
34.0
33.1
31.9
30.2
35.0
39.0
41.4

20.9
21.7
22 8
23.7
24.8
25.8
28.5
32.4
36.4
37.8

29.0
31.0
34 3
36.3
37.0
37.9
43.7
49.6
52.6
52.6

2.2
7.5
99
5.3
2.4
2.4
15.7
12.9
6.9
-.9

1.8
7.2
106
5.6
2.1
2.2
15.3
13.7
6.0

1950
1951
1952....
1953
1954
1955
1956
1957
1958
1959

61.0
68 8
68.6
67 5
67.2
68.5
71.0
74 0
73.1
73.5

68.8
82.6
79.9
76 7
77.2
77.1
78.4
79 6
76.1
75.2

39.2
45.0
47.3
48 5
48.6
49.2
51.7
54 0
56.0
57.2

39.6
46 6
48.9
501
49.9
50.4
52.9
551
57.7
59.0

38.9
42.3
44.1
45 2
46.5
47.6
50.2
52.6
53.8
55.1

53.3
56 7
57.8
589
59.6
" 60.5
62.6
64 9
66.1
67.5

2.1
6.6
1.4
1.6
1.2
2.2
3.2
3.4
1.7
2.4

1.3
62
2.0
1.9
1.2
1.8
3.3
3.6
1.9
2.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

75.2
76.1
76.0
76 3
111
79.4
819
83.5
85 5
88.5

76.1
75.5
74.2
75.2
76.8
111
79 4
79.9
811
83.2

58.0
59.1
61.1
62.6
64.1
66.0
691
72.5
76 5
81.1

59.4
60.2
62.0
63.5
651
67.1
70 0
72.7
76 5
80.1

56.5
58.0
60.1
61.6
63.1
64.9
68.2
72.4
76.4
82.0

68.6
69.3
70.5
71.6
111
74.2
76.6
79.0
82.5
86.8

1.6
.9
1.8
1.5
1.5
2.2
3.2
3.0
4.4
5.1

1.7
1.0
1.8
1.5
1.5
2.1
3.2
3.1
4.4
5.2

1970
1971
1972
1973
1974
1975
1976
1977
1978..
1979

93.2
97.0
100 0
112.7
134 8
149 6
155 3
161.9
172 6
192.5

88.6
93.3
100 0
116.7
164.6
179.6
185.6
205.5
214 1
246.1

87.7
93.9
100 0
106.7
116.8
128.2
136.6
146.3
157 3
170.4

86.6
92.7
100 0
106.3
114 9
126.0
133 5
142.8
1531
164.8

91.5
96.0
100.0
105.7
115.0
125.7
132.2
139.7
150.3
163.3

5.4
5.0
4.2
5.8
8.8
9.3
5.2
5.8
7.4
8.6

5.4
5.0
4.1
5.7
8.8
9.3
5.2
5.7
7.5
8.7

1980
1981
1982 p
1983

212.9
230.8
236.0
241.7

289.4
293.4
278.9
272.3

189.2
207.9
222.5
235.3

1981:
|
II
III..
I
V

228.7
229 7
2312
233.8

298.5
298.5
289.4
287.7

1982:
1
||
Ill
I
V

236.1
236.0
236 3
235.6

1983:
1
||
Ill
IV P

238 0
240 2
242 5
246.0

IIII

iob'o

iob!d

105.6
114.2
128.2
135.7
144.6
153.8
162.5

88.6
94.7
100.0
107.0
118.0
129.4
138.3
148.4
159.7
173.7

185.2
207.7
222.0
233.3

187.5
209.3
227.7
237.8

180.8
204.5
210.0
222.0

191.5
208.1
222.9
236.6

178.6
195.0
207.2
215.7

9.2
9.4
6.0
4.2

9.4
9.2
6.3
4.1

201.8
205.4
209.3
215.1

201.0
204.2
207 9
217.0

201.9
206.4
2083
220.0

199.3
199.7
207.0
211.2

202.2
206.1
210.2
213.8

189.5
192.7
196.8
201.1

10.6
5.9
9.4
9.0

8.7
6.9
8.8
8.9

281.8
273.6
2818
278.5

217.6
221.0
224 4
226.8

218.0
221.3
223 8
224.4

222.7
225.1
228 3
234.3

209.1
212.3
213.9
205.7

217.3
220.9
224.7
228.5

203.7
206.4
208.2
210.6

4.3
5.6
3.7
3.8

5.3
5.5
3.4
4.7

265.4
270.7
2781
274.0

231.3
234.0
236 5
239.3

230.9
232.7
233 8
235.8

234.9
236 7
238 8
240.7

221.7
222.6
221.7
222.2

231.6
234.8
238.3
241.6

213.3
214.7
216.4
218.4

5.5
3.3
3.6
3.9

5.2
2.8
3.2
3.8

106.6
1151
124.9
132 4
141.9
152 7
166.0

1
Separate deflators are not calculated for gross private domestic investment, change in business inventories, and net exports of
goods and services.
2
Changes are based on unrounded data and therefore may differ slightly from changes computed from data shown here. Quarterly
changes are at annual rates.

Source: Department of Commerce, Bureau of Economic Analysis.




225

TABLE B-4.—Fixed-weighted price indexes for gross national product, 1972 weights, 1959-83
[Index numbers, 1972—100, except as noted; quarterly data seasonally adjusted]
Gross private domestic
investment1

Exports and
imports of goods
and services1

Government purchases of goods and services
Federal

Percent
change
from

Fixed investment
Year or quarter

Personal
conGross
national sumption
product expenditures

Total
Total

Presidential

Residential

Exports

Total

Imports

National
defense

Non-

State
and
local

gross
national
product
weighted price
index*

1959

69.8

73.1

74.4

74.1

74.9

73.4

75.0

56.9

58.5

55.8

1960
1961
1962
1963
1964

70.8
71.6
72.4
73.2
74.1

74.1
74.8
75.5
76.3
77.2

74.7
74.4
74.2
74.0
74.3

74.5
74.3
74.4
74.7
75.3

74.9
74.7
73.9
72.6
72.6

75.0
76.0
76.0
76.3
77.1

76.0
75.2
73.7
74.7
76.3

58.3
59.5
61.3
62.8
64.4

59.6
60.5
61.7
63.3
65.3

57.4
58.9
61.0
62.5
63.9

1.5
1.1
1.2
1.1
1.2

1965
1966
1967
1968
1969

75.3
77.5
79.8
83.1
87.3

78.2
80.1
82.0
85.0
88.7

75.2
77.0
79.3
82.5
87.3

76.1
77.9
80.3
83.3
87.0

73.5
75.3
77.5
81.0
87.8

79.4
81.8
83.3
85.5
88.5

77.1
78.8
79.3

66.2
69.2
72.4
76.4
81.3

67.1
69.6
71.5
75.7
79.8

65.6
68.8
73.1
76.9
82.3

1.7
2.9
3.0
4.1
5.0

1970
1971
1972
1973
1974

91.8
96.2
100.0
106.0
115.9

92.7
96.6
100.0
106.1
117.1

91.2
95.8
100.0
105.8
117.9

91.6
96.3
100.0
104.0
116.5

90.6
94.9
100.0
109.2
120.5

93.1
97.0
100.0
112.6
137.4

100.0
116.7
161.5

87.9
94.0
100.0
106.9
117.9

86.7
92.9
100.0
106.7
117.0

100.0
106.9
117.5

100.0
106.1
115.6

88.7
94.8
100.0
107.0
118.4

5.2
4.8
4.0
6.0
9.4

1975
1976
1977
1978
1979

126.4
133.7
142.2
153.3
167.8

126.3
133.0
141.2
151.6
166.3

132.3
140.2
151.8
167.0
185.4

132.9
139.9
148.5
160.9
177.2

131.2
140.8
158.0
178.4
200.8

151.8
156.9
164.0
174.9
197.2

175.1
178.7
195.0
210.1
244.5

129.2
137.3
147.0
158.4
173.2

128.0
135.4
145.0
155.4
169.5

127.9
135.6
145.5
156.5
171.7

128.3
135.0
143.6
152.6
164.0

130.0
138.5
148.4
160.4
175.7

9.1
5.8
6.3
7.8
9.5

1980
1981
1982
1983 P

184.2
201.8
214.7
223.9

184.8
201.7
213.2
222.0

204.1
221.1
231.5
235.1

195.9
213.7
225.7
230.3

219.5
235.0
242.4
244.3

218.4
238.3
244.1
249.2

304.4
319.4
309.4
299.5

193.8
212.2
226.4
236.9

192.7
215.0
230.6
238.1

196.7
220.1
236.7
244.0

182.6
201.7
215.0
222.9

194.5
210.4
223.6
236.2

9.8
9.5
6.4
4.3

195.8
199.5
203.8
208.0

196.4
199.9
203.6
207.0

215.1
219.1
223.3
227.2

207.2
211.9
215.7
219.8

230.0
232.9
237.5
241.2

235.2
237.6
239.5
241.3

321.9
324.3
316.2
315.7

206.1
210.1
213.4
219.3

208.0
212.4
215.0
224.5

212.3
217.5
220.0
230.6

196.9
199.4
202.2
208.7

204.9
208.5
212.4
215.8

10.2
7.9
8.9

210.7
213.1
216.2
218.7

209.4
211.3
214.7
217.4

229.7

231.5
232.8
232.5

222.4
225.2
227.2
228.6

243.4
243.4
243.3
240.0

243.7
244.8
244.2
243.9

315.6
309.1
306.7
306.1

222.2
224.6
227.5
231.4

227.1
228.8
230.8
235.6

233.2
234.9
236.6
241.9

211.6
213.0
215.8
219.7

218.9
221.9
225.3
228.6

5.3
4.7
5.9
4.7

220.6
222.9
225.5

218.3
220.9
223.3
225.8

235.6
235.2
237.4
238.6

229.9
230.1
230.9
231.6

246.5
244.9
249.7
252.0

245.8

303.2
298.2
299.4
299.0

233.7
235.2
238.3
240.6

237.0
236.2
238.7
240.3

242.9
241.8
244.7
246.4

221.7
221.9
223.3
224.6

231.5
234.5
238.0
240.9

3.4
4.3
4.7
4.5

80.7
83.0
88.4
93.3

1981:

\CZZZZZ

III
IV

1982:

\\ZZZZZZ
III
IV

1983:
I
II
Ill
iv p.ZZZ"Z

228.0

247.4
249.8
253.6

1

Separate deflators are not calculated for gross private domestic investment, change in business inventories, and net exports of
goods and services.
2
Quarterly changes are at annual rates.
Source: Department of Commerce, Bureau of Economic Analysis.




226

TABLE B-5.—Changes in gross national product, personal consumption expenditures, and related price
measures, 1929-83
[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]
Gross national product

Year or quarter

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983 P
1981:
I
II
Ill
IV
1982:
I
II
Ill
IV
1983:
I
II
Ill
IV P

Current
dollars

Constant
(1972)
dollars

6.6
-4.2
7.0

6.6
-2.2
7.8

10.0
25.0
26.7
21.3
9.6
.9
-1.2
11.1
11.3
-.5
10.9
15.5
5.2
5.4
.0
9.0
5.4
5.3
1.3
8.5
3.8
3.6
7.7
5.6
6.9
8.4
9.4
5.8
9.2
8.1
5.2
8.6
10.1
11.8
8.1
8.0
10.9
11.7
12.8
11.7
8.8
12.2
4.0
7.7

7.6
16.3
15.3
15.1
7.1
-1.5
-14.7
-1.7
4.1
.5
8.7
8.3
3.7
3.8
-1.2
6.7
2.1
1.8
-.4
6.0
2.2
2.6
5.8
4.0
5.3
6.0
6.0
2.7
4.6
2.8

20.5
6.6
13.3
3.7

Implicit
price
deflator

Personal consumption expenditures

Chain
price
index

0.0
-2.1
-.8
2.2
7.5
9.9
5.3
2.4
2.4
15.7
12.9
6.9
-.9
2.1
6.6
1.4
1.6
1.2
2.2
3.2
3.4
1.7
2.4
1.6
.9
1.8
1.5
1.5
2.2
3.2
3.0
4.4
5.1
5.4
5.0
4.2
5.8
8.8
9.3
5.2
5.8
7.4
8.6

Fixedweighted price
index
(1972
weights)

Current
dollars

Constant
(1972)
dollars

Implicit
price
deflator

Chain
price
index

9.2
9.4
6.0
4.2

1.6
1.2
1.4
1.3
1.4
1.9
3.1
3.0
4.3
5.0
5.3
4.9
4.1
6.0
9.1
9.2
5.7
6.1
7.6
8.9
8.9
9.4
6.5
4.4

1.5
1.1
1.2
1.1
1.2
1.7
2.9
3.0
4.1
5.0
5.2
4.8
4.0
6.0
9.4
9.1
5.8
6.3
7.8
9.5
9.8
9.5
6.4
4.3

-5.7
4.6
6.0
13.8
9.7
12.2
8.8
10.5
20.3
12.5
8.0
1.9
7.8
7.9
4.8
5.8
2.7
7.6
4.9
5.4
3.2
7.4
4.5
3.1
6.0
5.5
6.9
7.5
8.1
5.4
9.5
8.4
6.9
8.1
9.6
10.2
9.4
9.9
11.0
11.1
11.8
11.9
10.7
11.3
7.3
8.4

9.0
.7
3.6
-4.9

10.6
5.9
9.4
9.0

9.6
7.6
9.0
8.2

10.2
7.9
8.9
8.4

14.7
7.5
11.4
3.9

5.9
.5
3.5
-3.0

8.3
7.0
7.7
7.0

9.9
7.3
7.8
7.0

-1.4
6.6
2.7
2.5

-5.5
1.0
-1.0
-1.3

4.3
5.6
3.7
3.8

5.6
5.2
5.9
5.0

5.3
4.7
5.9
4.7

7.5
7.2
7.5
7.8

2.4
3.1

.9
3.6

5.0
4.0
6.5
4.1

5.2
3.9
6.4
5.1

8.2
13.3
11.5
8.6

2.6
9.7
7.6
4.5

5.5
3.3
3.6
3.9

3.6
4.3
4.5
4.6

3.4
4.3
4.7
4.5

5.2
15.1
6.5
9.9

2.9
10.0
2.2
6.5

2.2
4.6
4.2
3.1

Fixedweighted price
index
(1972
weights)

2.3
4.7
4.2
4.5

-.2
3.4
5.7
5.8
-.6

-1.2
5.4
5.5
5.0
2.8
-.3
2.6
-1.9
3.3

2.2
5.6
5.0
4.5
2.7
.5
2.7
1.4
4.2

-3.8
-J
1.3
7.4
10.8
9.0
5.8
4.1
8.3
10.7
5.8
-.3
2.0
6.5
2.3
1.9
.9
1.0
1.9
3.3
2.2
1.9
1.9
1.0
1.5
1.6
1.4
1.8
2.9
2.4
4.0
4.5
4.6
4.3
3.7
5.7
10.1
7.6
5.1
5.8
7.0
9.0
10.2
8.4
5.8
4.0

1.7
1.1
1.1
1.4
1.2
1.5
2.7
2.5
3.8
4.5
4.6
4.3
3.6
6.1
10.4
7.7
5.3
6.0
7.3
9.3
10.7
9.0
5.9
4.2

-2.0
5.3

4.6
5.9
-1.0
2.9
2.8
6.2
11.1
1.6
2.1
2.3
5.6
1.3
2.5
3.8
1.8
6.5
2.9
2.1
1.0
5.4
2.6
2.1
4.5
3.8
5.5
5.6
5.1
2.9
5.3
3.7
2.2
3.7
5.8
4.2

Note.—Changes are based on unrounded data and may differ slightly from changes computed from data shown elsewhere in these
tables.
Source: Department of Commerce, Bureau of Economic Analysis.




227

TABLE B-6.—Gross national product by major type ofproduct, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Goods
Year or
quarter

Gross
national
product

Final
sales

Inventory
change

Durable goods

Total
Total

Final
sales

Inventory
change

Final
sales

Inventory
change

Nondurable goods
Final
sales

Inventory
change

Services Structures

1929..
1933..
1939..

103.4
55.8
90.9

101.7
57.4
90.5

1.7
-1.6

56.1
27.0
49.0

54.4
28.6
48.6

1.7
-1.6
.4

16.1
5.4
12.4

"'.3

38.3
23.2
36.2

0.3
-1.1
.1

35.9
25.9
34.4

11.4
2.9
7.5

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

100.0
125.0
158.5
192.1
210.6
212.4
209.8
233.1
259.5
258.3

97.8
120.6
156.7
192.8
211.6
213.5
203.5
233.5
254.8
261.4

2.2
4.5
1.8
-.6
-1.0
-1.0
6.4

56.0
72.5
93.7
120.4
132.3
128.9
125.3
139.8
154.4
147.7

53.8
68.0
91.9
121.0
133.3
129.9
118.9
140.3
149.7
150.8

2.2
4.5
1.8
-.6
= 1.0
= 1.0
6.4

15.4
23.8
34.5
54.2
58.5
50.1
31.8
44.4
48.0
50.0

1.2
3.1
1.0
.0
-.6
-1.3
5.3
1.4
1.0
-1.8

38.4
44.2
57.4
66.8
74.8
79.8
87.1
95.9
101.7
100.9

1.0
1.4
.7
-.6
~\l
1.1
-1.9
37
-1.3

35.7
40.8
50.8
63.0
72.3
77.0
68.8
71.6
77.2
82.2

8.3
11.8
14.0
8.7
6.1
6.5
157
217
28.0
28.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

286.5
330.8
348.0
366.8
366.8
400.0
421.7
444.0
449.7
487.9

279.7
320.5
344.8
366.3
368.4
394.1
417.0
442.6
451.2
482.2

6.8
10.3
3.1
-l!5
6.0
4.7
1.3
-1.5
5.7

162.4
189.5
194.6
203.1
196.1
214.5
223.3
232.3
228.2
248.5

155.6
179.2
191.5
202.7
197.6
208.5
218.6
231.0
229.7
242.9

6.0
4.7
1.3
= 1.5
5.7

56.2
66.4
72.5
77.8
73.9
81.4
85.9
91.3
84.4
90.8

3.6
6.1
1.2
1.5
-2.5
3.4
2.1
.5
=2.8
3.1

99.4
112.8
119.0
124.9
123.7
127.1
132.7
139.6
145.3
152.1

3.2
4.2
2.0
-1.1
1.0
2.6
2.6
.8
1.3
2.5

88.5
103.5
113.9
121.6
126.2
136.1
146.2
158.7
167.7
179.8

35.6
37.8
39.4
42.0
44.5
49.5
52.2
53.0
53.8
59.5

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

506.5
524.6
565.0
596.7
637.7
691.1
756.0
799.6
873.4
944.0

503.6
522.2
558.8
590.7
632.1
681.2
741.9
789.3
865.5
934.2

3.0
2.3
6.3
6.0
5.6
9.9
14.1
10.3
7.9
9.8

254.2
257.4
278.5
290.3
309.8
338.4
375.0
389.4
421.3
450.2

251.3
255.0
272.2
284.3
304.2
328.5
360.9
379.1
413.4
440.4

3.0
2.3
6.3
6.0
5.6
9.9
14.1
10.3
7.9
9.8

93.3
92.7
102.9
109.4
118.9
131.6
147.0
153.5
167.9
178.5

1.6
2.7
4.0
6.7
10.2
5.5
4.7
6.4

158.0
162.4
169.3
174.9
185.3
196.9
213.9
225.6
245.5
261.9

1.3
2.4
2.8
3.3
1.6
3.2
3.9
4.9
3.1
3.4

193.8
207.0
222.0
237.1
255.0
273.3
299.0
326.5
358.2
391.9

58.5
60.2
64.5
69.3
72.9
79.3
82.0
83.6
94.0
101.8

1970...
1971....
1972....
1973..
1974
1975
1976.
1977.
1978.,
1979

992.7
1,077.6
1,185.9
1,326.4
1,434.2
1,549.2
1,718.0
1,918.3
2,163.9
2,417.8

989.5
1,070.0
1,175.7
1,307.9
1,420.1
1,556.1
1,706.2
1,895.3
2,137.4
2,403.5

3.2
7.7
10.2
18.5
14.1
-6.9
11.8
23.0
26.5
14.3

459.9 456.6
485.3 477.7
529.6 519.4
604.1 585.6
646.7 632.5
694.0 700.9
771.1 759.3
855.0 832.0
958.6 932.1
1,065.6 1,051.3

3.2
7.7
10.2
18.5
14.1
-6.9
11.8
23.0
26.5
14.3

179.2
187.1
207.4
237.6
250.7
279.4
312.5
354.9
402.1
454.3

~2l8
7.2
13.1
12.0
=8.4
7.7
10.4
19.1
10.5

277.5
290.6
312.0
348.0
381.8
421.5
446.7
477.2
530.1
597.0

3.3 429.9
4.8 472.0
3.0 519.0
5.3 571.5
636.1
2.2
1.5 705.2
4.2 779.3
12.6 867.2
7.3 972.2
3.8 1,089.7

102.9
120.3
137.3
150.8
151.4
150.0
167.6
196.1
233.1
262.5

1981
1982

2,631.7 2,641.5 =9.8
2,954.1 2,935.6
18.5
3,073.0 3,097.5 -24.5
3,309.5 3,316.4 =6.9

1,140.6
1,291.8
1,280.9
1,362.0

1,150.4 =9.8
1,273.4
18.5
1,305.4 -24.5
1,368.9 - 6 . 9

482.0 - 4 . 1
524.3
3.6
516.3 = 15.5
549.0 - 4 . 2

668.4
749.1
789.1
819.9

-5.7
14.8
=9.1
=2.8

1,225.2
1,374.2
1,511.1
1,637.8

265.9
288.0
281.0
309.7

2,866.6 2,855.7
2,912.5 2,897.5
3,004.9 2,971.4
3,032.2 3,017.9

10.9
15.0
33.6
14.3

1,260.8
1,273.9
1,325.2
1,307.5

1,249.9
1,258.8
1,291.6
1,293.2

= 1.4
8.1
14.0
-6.3

729.6
733.2
755.9
777.6

12.3
6.9
19.6
20.6

1,319.2
1,3497
1,392.5
1,435.5

286.5
288.9
287.3
289.2

3,021.4 3,047.1 =25.7
3,070.2 3,081.4 -11.2
3,090.7 3,095.6 - 4 . 9
3,109.6 3,165.9 = 56.4

1,281.1
1,290.8
1,286.6
1,264.8

1,306.8 -25.7
1,302.0 -11.2
1,291.5 - 4 . 9
1,321.2 -56.4

517.2 -20.8
516.8 =2.5
512.0
6.4
519.0 =45.0

789.6
785.2
779.5
802.2

=4.9
-87
-11.3
= 11.4

1,460.6
1,496.4
1,527.2
1,560.5

2797
283.0
276.9
284.3

3,171.5 3,210.9 = 39.4
3,272.0 3,286.6 -14.5
3,362.2 3,353.7
8.5
3,432.0 3,414.3
17.7

1,292.2
1,346.8
1,388.9
1,419.9

1,331.6 -39.4
1,361.3 -14.5
1,380.4
8.5
1,402.2
17.7

520.9 -38.2
545.7 =8.9
13.1
555.9
17.4
573.5

810.6
815.7
824.5
828.7

= 1.2 1,588.4
- 5 7 1,623.4
=4.5 1,651.0
1,688.5

290.9
301.9
322.3
323.6

1983 p.

1981:

nZ

Ill
iv

1982:

li'.'.ZZ
III
IV

1983:

IIZZ"

~47
-3.1

1J
-3.1
6.8
10.3.
3.1

-is

10.9
15.0
33.6
14.3

III
IV P.
Source: Department of Commerce, Bureau of Economic Analysis.




228

520.4
525.6
535.7
515.6

1.4

l!4

TABLE B-7.—Gross national product by major type of product in 1972 dollars, 1929-83
[Billions of 1972 dollars; quarterly data at seasonally adjusted annual rates]
Goods
Year or
quarter

Gross
national
product

Final
sales

Inventory
change
Total

1929
1933
1939

315.7
222.1
319.8

311.0
227.0
318.2

4.6
-4.9

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

344.1
400.4
461.7
531.6
569.1
560.4
478.3
470.3
489.8
492.2

337.9
388.4
456.5
531.5
571.4
564.0
466.1
470.6
484.3
496.6

6.2
12.0
5.2

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

534.8
579.4
600.8
623.6
616.1
657.5
671.6
683.8
680.9
721.7

Durable goods

Total
Final
sates

Inventory
change

Final
sates

Inventory
change

Nondurable goods
Final
sales

144.3
97.5
154.3

139.7
102.3
152.7

4.6
-4.9
1.6

40.4
17.5
35.5

3.5
-2.1
.7

99.3
84.9
117.2

-2.3
-3.6
12.2
-.2
5.5
-4.4

171.7
198.6
221.4
263.3
287.3
278.5
238.3
237.7
244.8
240.3

165.5
186.6
216.2
263.3
289.6
282.2
226.2
237.9
239.4
244.7

6.2
12.0
5.2
.1
-2.3
-3.6
12.2
-.2
5.5
-4.4

43.1
57.8
75.7
118.8
135.9
121.2
60.3
75.5
77.3
78.3

3.4
8.2
3.5
.7
-1.8
-3.7
10.8
1.4
1.6

-2.9

122.4
128.7
140.5
144.4
153.7
161.0
165.8
162.4
162.1
166.4

524.2
565.6
596.5
622.1
618.2
649.8
665.8
682.2
682.7
714.7

10.6
13.7
4.3
1.5
-2.2
7.7
5.8
1.5
-1.8
7.0

261.5
283.7
292.1
306.8
292.7
316.7
320.9
321.7
311.6
332.5

250.9
270.0
287.8
305.3
294.9
309.0
315.1
320.2
313.4
325.5

10.6
13.7
4.3
1.5
-2.2
7.7
5.8
1.5
-1.8
7.0

86.1
98.2
107.9
116.2
109.0
117.2
117.8
119.4
109.2
113.6

5.5
9.0
1.7
2.3
-3.7
4.5
2.9
.9
-3.4
3.9

1960
1961
1962
1963..
1964
1965
1966
1967
1968
1969

733.7
737.2
753.7
756.6
792.4
800.3
825.0
832.5
869.3
876.4
917.5
929.3
968.0
984.8
999.2
1,011.4
1,058.1 1,049.1
1,087.6 1,076.6

3.5
3.0
7.8
7.5
7.1
11.8
16.8
12.2
9.0
11.1

335.8
338.0
361.3
372.2
393.8
422.6
456.4
463.4
483.1
496.0

332.3
335.0
353.5
364.7
386.7
410.8
439.6
451.2
474.1
484.9

3.5
3.0
7.8
7.5
7.1
11.8
16.8
12.2
9.0
11.1

115.6
114.7
125.7
132.5
143.0
157.2
174.0
178.3
187.4
193.0

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

1,085.6
1,122.4
1,185.9
1,254.3
1,246.3
1,231.6
1,298.2
1,369.7
1,438.6
1,479.4

1,081.8
1,114.3
1,175.7
1,237.1
1,234.7
1,238.4
1,290.4
1,356.4
1,422.6
1,472.2

3.8
8.1
10.2
17.2
11.6
-6.7
7.8
13.3
16.0
7.3

486.9
497.2
529.6
572.3
562.5
547.4
587.2
628.1
662.0
677.7

483.2
489.1
519.4
555.1
550.9
554.2
579.4
614.8
645.9
670.4

3.8
8.1
10.2
17.2
11.6
-6.7
7.8
13.3
16.0
7.3

1,475.0
1,513.8
1,485.4
1,534.8

1,479.4
1,505.3
1,494.8
1,537.2

-4.4
8.5
-9.4
-2.4

668.1
692.6
661.6
687.0

672.5
684.1
671.0
689.4

1,510.1 1,507.0
1,512.5 1,503.6
1,525.8 1,509.7
1,506.9 1,500.9

3.0
8.9
16.1
6.0

691.2
692.3
703.2
683.7

688.2
683.4
687.1
677.7

1,495.9 -10.2
1,492.7 - 3 . 4
1,487.0 - 1 . 3
1,503.4 -22.7

668.1
664.6
661.6
652.1

1,490.1 1,505.5 -15.4
1,525.1 1,530.5 - 5 . 4
3.8
1,553.4 1,549.7
1,570.5 1,563.0
7.5

656.9
681.8
699.0
710.4

,

1980
1981
1982
1983 *
1981:
I
II
Ill
IV
1982: .
t
H
til
[V
1983:
t
II
Illp
IV .

1,485.8
1,489.3
1,485.7
1,480.7

1.6

Services Structures

Auto
output

127.4
110.7
135.2

43.9
14.0
30.3

1.3
-1.6
3.8
-1.5

139.9
158.5
193.9
242.0
263.7
263.0
200.8
188.1
192.5
198.3

32.5
43.3
46.3
26.2
18.1
18.8
39.1
44.6
52.4
53.6

12.3
13.9
18.0

164.8
171.8
179.9
189.1
185.9
191.9
197.2
200.8
204.3
211.9

5.1
4.7
2.6
-.8
1.5
3.2
2.9
.6
1.6
3.1

207.4
231.3
243.2
247.5
249.1
260.1
270.2
282.4
287.6
299.4

65.9
64.3
65.5
69.3
74.3
80.7
80.5
79.7
81.7
89.8

23.0
19.3
17.1
22.6
21.6
29.8
23.0
24.5
18.6
23.2

2.0
-.1
4.2
3.4
5.1
8.2
12.3
6.6
5.4
7.2

216.6
220.3
227.8
232.2
243.7
253.6
265.6
272.9
286.7
291.9

1.6
3.0
3.7
4.2
1.9
3.6
4.5
5.6
3.6
3.9

312.5
326.9
341.5
356.2
374.0
390.7
412.6
434.1
453.0
469.2

89.0
91.7
97.4
104.1
108.6
116.0
115.9
113.9
122.0
122.5

25.3
21.2
26.0
28.7
29.4
35.7
34.8
31.8
38.5
37.4

187.5
188.7
207.4
236.1
234.1
230.2
242.7
264.7
285.4
299.1

.0
3.0
7.2
12.7
9.4
-6.4
5.4
6.9
11.8
6.2

295.7
300.4
312.0
319.0
316.8
324.0
336.7
350.1
360.5
371.3

3.7
5.1
3.0
4.5
2.2
= .3
2.4
6.3
4.3
1.1

482.4
497.8
519.0
542.8
562.8
575.9
595.0
617.3
644.7
670.7

116.3
127.3
137.3
139.1
121.0
108.3
116.0
124.4
131.9
131.0

29.8
38.9
41.6
46.4
37.1
35.7
45.3
50.7
50.3
47.0

-4.4
8.5
-9.4
-2.4

290.4
292.5
276.1
291.2

-1.9
1.6
-6.5
-1.5

382.1
391.7
394.9
398.3

-2.5
6.9
-2.9
-.9

687.7
702.7
712.2
725.2

119.1
118.5
111.6
122.6

39.4
42.6
38.5
49.9

3.0
8.9
16.1
6.0

298:9
294.8
295.1
281.2

-1.5
4.4
5.8
-2.4

389.4
388.7
392.0
396.5

4.5
4.5
10.3
8.4

696.9
700.0
705.4
708.5

121.9
120.3
117.2
114.7

44.0
45.9
43.4
37.2

678.3 -10.2
668.1 - 3 . 4
663.0 - 1 . 3
674.8 -22.7

280.9 - 9 . 1
276.5 - 1 . 1
3.2
271.6
275.3 -18.9

397.4
391.6
391.3
399.4

-1.0
-2.3
-4.6
-3.8

707.1
712.8
713.9
715.0

110.6
111.9
110.2
113.6

33.1
40.5
42.0
38.3

672.3 -15.4
687.2 - 5 . 4
695.3
3.8
702.9
7.5

277.0 -15.7
291.1 - 3 . 7
5.8
294.1
7.7
302.4

395.2
396.1
401.2
400.5

.3
-1.7
-2.0
-.2

717.8
723.0
727.0
732.9

115.4
120.3
127.3
127.1

44.9
46.0
53.1
55.6

Source: Department of Commerce, Bureau of Economic Analysis.




Inventory
change

229

1.1

-2.8
.9
2.8
3.8
1.7
-.6

TABLE B-8.—Gross national product by sector, 1929-83
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross domestic product

Year or quarter

Gross
national
product

Business1
Total
Total *

Nonfarm l

Farm

Statistical
discrepancy

Households
and
institutions

Government2

Total

Federal

State
and
local

1929
1933
1939

103.4
55.8
90.9

102.6
55.5
90.5

95.4
49.1
80.6

84.7
43.8
72.9

9.7
4.6
6.3

1.1
.7
1.4

2.9
1.7
2.3

4.3
4.7
7.6

0.9
1.2
3.4

3.5
3.5
4.2

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

100.0
125.0
158.5
192.1
210.6
212.4
209.8
233.1
259.5
258.3

99.6
124.5
157.9
191.6
210.1
212.0
209.0
231.8
257.9
256.9

112.6
139.9
162.8
174.2
172.8
183.8
210.0
234.9
231.5

81.8
103.1
127.7
149.3
156.2
152.7
164.4
188.2
213.1
212.2

6.4
8.9
13.0
15.3
15.3
16.0
18.8
20.2
23.3
18.8

1.1
.6
-.8
-1.8
2.7
4.1
l!5
-1.6
.6

2.4
2.5
2.9
3.2
3.7
4.1
4.5
5.1
5.6
5.9

7.8
9.4
15.1
25.6
32.2
35.2
20.8
16.7
17.4
19.4

3.5
5.0
10.6
20.9
27.2
29.8
14.6
9.4
8.9
10.0

4.3
4.4
4.5
4.7
4.9
5.4
6.2
7.3
8.5
9.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

286.5
330.8
348.0
366.8
366.8
400.0
421.7
444.0
449.7
487.9

284.8
328.7
345.7
364.6
364.5
397.3
418.5
440.5
446,6
484.6

257.5
294.4
307.3
324.9
323.9
354.0
372.1
390.8
393.1
428.3

236.3
268.3
283.4
302.3
302.3
333.9
355.7
373.7
372.2
410.6

20.0
22.9
22.2
20.3
19.7
18.8
18.6
18.4
20.7
19.0

1.3
3.2
1.7
2.3
2.0
1.3
-2.1
-1.2
.2
-1.3

6.4
6.9
7.2
7.8
8.1
9.1
9.8
10.5
11.4
12.3

20.9
27.4
31.2
31.9
32.5
34.2
36.6
39.1
42.1
44.0

10.7
16.2
18.9
18.6
17.8
18.4
19.0
19.6
20.5
20.9

10.1
11.2
12.3
13.3
14.7
15.8
17.6
19.6
21.6
23.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

506.5
524.6
565.0
596.7
637.7
691.1
756.0
799.6
873.4
944.0

502.9
520.7
560.5
591.8
632.3
685.2
750.3
793.7
866.7
937.1

442.0
455.7
490.6
517.2
551.6
598.4
652.6
685.1
745.4
803.2

424.2
435.7
468.1
495.0
532.2
577.7
628.4
663.3
725.0
782.1

20.2
20.2
20.4
20.5
19.3
21.9
22.8
22.1
22.6
25.1

-2.4

-3.9

13.8
14.4
15.5
16.6
17.8
19.2
21.1
23.4
26.1
29.4

47.1
50.5
54.3
58.0
62.9
67.6
76.5
85.1
95.2
104.5

21.7
22.6
24.1
25.2
27.0
28.3
32.4
35.6
39.3
41.9

25.5
27.9
30.2
32.9
35.9
39.3
44.1
49.5
55.9
62.6

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

992.7
1,077.6
1,185.9
1,326.4
1,434.2
1,549.2
1,718.0
1,918.3
2,163.9
2,417.8

985.4
1,068.5
1,175.0
1,310.4
1,414.4
1,531.9
1,697.5
1,894.9
2,134.3
2,375.2

837.3
907.1
998.6
1,118.7
1,206.4
1,301.7
1,447.3
1,624.0
1,837.2
2,052.1

813.1
875.4
963.4
1,068.0
1,155.0
1,247.3
1,396.3
1,574.2
1,781.0
1,982.1

25.8
27.6
31.9
49.9
47.7
48.9
45.9
48.4
58.7
71.6

-1.5
4.1
3.3
.8
3.7
5.5
5.1
1.4
-2.6
-1.5

32.3
35.4
38.6
42.1
45.8
50.6
55.6
60.5
67.8
75.6

115.8
126.0
137.8
149.6
162.2
179.6
194.6
210.3
229.3
247.4

44.8
46.8
50.1
51.9
54.9
59.0
62.4
66.3
71.7
75.7

71.1
79.3
87.7
97.7
107.3
120.6
132.3
144.0
157.6
171.8

1980
1981
1982
1983 '

2,631.7
2,954.1
3,073.0
3,309.5

2,586.4
2,904.5
3,025.7
3,263.4

2,228.1
2,509.0
2,594.6
2,802.0

2,158.2
2,432.8
2,520.0
2,730.9

67.7
81.1
74.1
71.0

2.3
-4.9
.5

85.3
96.2
107.0
114.9

273.0
299.3
324.1
346.5

82.9
92.8
101.1
106.1

190.0
206.5
223.0
240.4

1981:
I
II
Ill
IV

2,866.6
2,912.5
3,004.9
3,032.2

2,819.0
2,865.9
2,955.2
2,977.9

2,434.8
2,475.5
2,558.4
2,567.2

2,354.4
2,399.8
2,483.9
2,493.1

75.4
79.8
86.6
82.5

5.1
-4.2
-12.0
-8.5

92.7
94.9
97.2
100.2

291.5
295.5
299.6
310.5

90.2
90.8
91.5
98.5

201.3
2047
208.1
212.0

1982:
I
II
Ill
IV

3,021.4
3,070.2
3,090.7
3,109.6

2,974.5
3,020.6
3,044.2
3,063.5

2,555.2
2,593.8
2,610.1
2,619.1

2,482.4
2,521.8
2,536.6
2,539.1

79.5
70.3
70.9
75.8

-6.7
1.7
2.5
4.2

103.3
105.6
108.5
110.8

316.0
321.2
325.7
333.7

99.5
100.1
100.7
104.2

216.5
221.1
225.0
229.5

1983:
I
II
Ill
IV *

3,171.5
3,272.0
3,362.2
3,432.0

3,127.2
3,227.9
3,314.1
3,384.0

2,675.5
2,769.8
2,849.8
2,912.7

2,601.8
2,700.5
2,779.0
2,842.4

74.9
72.7
68.3
67.9

-1.2
-3.5
2.5
2.5

112.2
114.1
115.6
117.7

339.5
344.1
348.8
353.6

105.6
106.0
106.2
106.6

233.8
238.1
242.6
246.9

1
2
3

~U
1.7
-12
1.4

-1.1

Includes compensation of employees in government enterprises.
Compensation of government employees.
Changes are based on unrounded data and therefore may differ slightly from changes computed from data shown here.

Source: Department of Commerce, Bureau of Economic Analysis.




230

TABLE B-9.—Gross national product by sector in 1972 dollars, 1929-83
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates]
<
iross domestic product
Year or quarter

Gross
national
product

Business *
Total
Total*

Nonfarm1

Farm

Statists
pal
cat
discrepancy

Households
and
institutions

Government2
Total

Federal

State
and
local

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

315.7
222.1
319.8
344.1
400.4
461.7
531.6
569.1
560.4
478.3
470.3
489.8
492.2

313.2
220.9
318.2
342.8
398.7
460.1
530.3
567.7
559.3
476.4
467.8
486.8
489.4

271.5
180.0
261.0
282.7
327.6
361.8
385.6
403.6
397.9
385.5
393.8
412.0
409.8

244.7
152.5
231.3
254.6
299.8
335.3
362.1
370.1
362.8
358.6
367.0
389.0
383.4

23.6
24.9
25.2
24.5
26.2
28.6
27.7
27.1
25.6
25.8
24.0
25.8
25.6

3.1
2.6
4.6
3.6
1.6
-2.1
-4.2
6.4
9.4
1.1
2.9
-2.8
.8

15.6
12.2
15.1
16.1
15.9
16.4
15.2
15.1
15.0
15.1
16.0
16.7
17.3

26.2
28.8
42.1
44.0
55.2
81.9
129.4
149.1
146.4
75.9
58.0
58.1
62.3

5.2
6.6
16.9
18.6
29.6
56.7
105.0
125.2
121.8
49.7
29.8
29.2
31.3

21.0
22.1
25.2
25.4
25.6
25.2
24.5
23.9
24.6
26.2
28.2
29.0
31.0

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983 *>

534.8
579.4
600.8
623.6
616.1
657.5
671.6
683.8
680.9
721.7
737.2
756.6
800.3
832.5
876.4
929.3
984.8
1,011.4
1,058.1
1,087.6
1,085.6
1,122.4
1,185.9
1,254.3
1,246.3
1,231.6
1,298.2
1,369.7
1,438.6
1,479.4
1,475.0
1,513.8
1,485.4
1,534.8

531.8
575.6
596.9
619.8
612.1
653.0
666.5
678.3
676.2
716.8
732.0
751.0
793.8
825.6
868.9
921.4
977.5
1,003.9
1,050.0
1,079.7
1,077.6
1,112.8
1,175.0
1,239.2
1,229.0
1,217.8
1,282.6
1,352.8
1,418.7
1,453.2
1,449.3
1,488.2
1,462.3
1,513.3

448.7
478.0
492.8
515.6
508.5
547.0
557.4
566.1
561.7
600.0
610.1
625.1
663.2
691.6
730.3
777.7
824.0
842.0
882.1
907.1
904.8
938.6
998.6
1,060.7
1,047.4
1,032.4
1,095.4
1,163.7
1,224.3
1,255.6
1,248.2
1,285.8
1,259.6
1,309.8

419.4
447.2
463.7
484.3
477.0
516.0
531.5
539.5
532.0
574.0
584.2
596.3
631.5
659.7
701.3
749.6
794.1
812.8
855.6
881.9
875.4
901.7
963.4
1,028.4
1,0124
994.5
1,059.5
1,129.5
1,193,5
1,222.4
1,211.9
1,247.7
1,220.4
1,273.2

27.0
25.8
26.4
27.7
28.4
29.3
28.9
28.2
29.3
27.8
29.2
28.9
28.8
29.6
28.8
29.8
28.2
29.5
29.0
29.5
31.1
32.6
31.9
31.6
31.8
33.6
32.1
33.1
32.6
34.2
35.0
40.6
39.0
36.6

2.4
5.0
2.6
3.6
3.1
1.8
-3.0
-1.7
.3
-1.9
-3.3
-.2
2.9
2.3
.2
-1.6
1.7
-.3
-2.5
-4.4
-1.7
4.2
3.3
.7
3.2
4.4
3.8
1.0
-1.8
-1.0
1.3
-2.5
.2
.0

18.3
18.7
18.6
19.3
19.4
21.4
22.5
23.1
24.2
24.7
26.6
27.0
28.1
28.9
29.8
30.9
32.6
34.3
35.4
37.0
36.7
37.6
38.6
39.4
39.3
40.5
40.9
41.5
43.3
44.6
45.5
46.4
46.7
47.5

64.7
79.0
85.5
85.0
84.1
84.6
86.7
89.1
90.3
92.2
95.3
98.9
102.5
105.2
108.8
112.7
120.8
127.7
132.4
135.7
136.1
136.7
137.8
139.1
142.3
144.9
146.3
147.7
151.2
153.0
155.6
156.0
156.1
156.0

32.7
46.2
51.6
49.6
47.2
45.9
45.6
45.8
44.5
44.5
45.2
46.2
48.3
48.2
48.5
48.7
53.0
57.2
58.0
58.2
55.2
52.5
50.1
48.2
48.5
48.4
48.5
48.6
49.3
49.0
49.6
50.0
50.5
50.8

32.0
32.8
33.9
35.4
36.9
38.6
41.0
43.3
45.8
47.7
50.1
52.7
54.3
57.0
60.4
64.0
67.9
70.5
74.4
77.4
80.9
84.2
87.7
90.8
93.8
96.5
97.8
99.1
101.9
104.1
106.0
106.0
105.6
105.2

1981:
I
II
Ill
IV

1,510.1
1,512.5
1,525.8
1,506.9

1,484.8
1,488.0
1,500.3
1,479.6

1,282.3
1,285.7
1,298.1
1,277.2

1,243.9
1,247.7
1,261.2
1,237.9

35.8
40.1
43.1
43.5

2.7
-2.2
-6.1
-4.2

46.4
46.4
46.3
46.6

156.1
156.0
155.9
155.9

49.8
49.9
50.1
50.1

106.3
106.1
105.7
105.8

1982:
I
II
Ill
IV

1,485.8
1,489.3
1,485.7
1,480.7

1,462.5
1,465.0
1,463.1
1,458.6

1,259.9
1,262.1
1,260.4
1,255.9

1,220.8
1,224.0
1,223.4
1,213.2

42.4
37.3
35.7
40.6

-3.3
.8
1.2
2.0

46.6
46.6
46.8
46.9

156.1
156.3
156.0
155.8

50.2
50.3
50.5
50.7

105.9
106.0
105.4
105.1

1,490.1
1,525.1
1,553.4
1,570.5

1,469.2
1,504.4
1,531.1
1,548.5

1,266.1
1,301.2
1,327.5
1,344.4

1,227.5
1,265.1
1,290.9
1,309.3

39.2
37.7
35.5
33.9

-.6
-1.6
1.1
1.1

47.1
47.3
47.6
48.0

155.9
156.0
156.0
156.1

50.8
50.8
50.8
50.8

Rest
of the
world

105.1
105.1
105.2
105.2

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

1983:
I
II
Ill

IV
1

Includes compensation of employees in government enterprises.
Compensation of government employees.
Changes are based on unrounded data and therefore may differ slightly from changes computed from data shown here.
Source: Department of Commerce, Bureau of Economic Analysis.
2
3




231

TABLE B-10.—Gross national product by industry, 1947-82
[Billions of dollars]
Gross domestic product

Year

GovernFiGross
Manufacturing
ment
Tranc
Ufhnlo
Baef
nation- Agriculiransmeni Qtaticti of the
ture,
portation wnoie- nance,
sale insurand dlallSII- nesi
Pnn
at
Cdl
nn\
conance, Services governand
and
prod- forestry, Mining
Dura- Nonworld
struction Total
ment discrepretail
and
uct
ble durable public
and
fisheries
goods goods utilities trade real
enterancy
estate
prises
66.2
74.7
72.1

33.5
38.1
37.1

32.7
36.5
35.0

20.5
23.1
23.4

44.2
48.4
48.0

23.2
26.2
28.6

20.2
21.9
22.6

19.3
20.2
22.5

1.5
-1.6
.6

1.2
1.6
1,4

9.3
10.2
10.1
10.6
10.9

13.0 83.7
15.4 98.7
16.6 103.0
17.1 112.1
17.2 106.4

45.8
55.4
58.9
65.9
60.8

37.9
43.3
44.1
46.2
45.6

25.7
29.2
31.0
32.9
32.6

51.3
56.4
58.5
59.8
60.8

31.9
35.2
38.7
42.8
46.5

24.0
25.9
27.5
29.4
30.5

23.8
30.8
35.3
36.4
36.9

1.3
3.2
1.7
2.3
2.0

1.6
2.1
2.3
2.2
2.3

19.9
19.7
19.5
21.9
20.2

12.4
13.4
13.5
12.4
12.3

18.5
20.6
21.4
21.0
22.8

120.9
126.8
131.4
123.8
141.3

70.6
73.7
77.7
69.7
81.2

50.3
53.2
53.7
54.1
60.0

35.6
38.3
40.2
40.4
43.7

66.2
70.4
73.9
75.2
81.9

50.0
53.5
57.6
62.4
67.3

34.0
37.3
40.2
42.3
46.3

38.5
40.7
44.0
47.1
50.0

1.3
-2.1
-1.2
.2
-1.3

2.8
3.2
3.5
3.0
3.3

506.5
524.6
565.0
596.7
637.7

21.4
21.5
21.9
22.0
21.0

12.6
12.7
12.8
13.1
13.4

23.2
24.0
25.7
27.4
29.8

143.8
144.4
157.9
167.4
179.4

82.1
81.3
91.5
97.6
105.3

61.7
63.1
66.4
69.8
74.2

45.8
47.4
50.2
53.0
56.3

84.2
86.3
92.1
96.1
104.7

71.6
75.4
80.6
85.3
91.0

49.2
52.3
56.1
60.0
65.3

53.4
56.7
61.1
65.9
71.2

-2.4
— 1
2X
1.7
.1

3.6
3.9
4.6
4.9
5.5

1965
1966
1967
1968
1969

691.1
756.0
799.6
873.4
944.0

23.8
24.8
24.2
25.0
27.8

13.5
14.2
14.6
15.3
16.1

32.8
35.9
37.5
41.3
46.3

197.7
216.6
222.3
242.8
256.7

118.0
130.4
133.6
146.0
154.5

79.7
86.3
88.7
96.8
102.2

60.5
65.3
68.6
74.0
80.0

112.6
121.5
130.1
144.4
157.0

98.0
105.9
114.2
123.8
133.6

70.8
78.4
86.1
94.2
105.3

76.7
86.4
96.3
108.1
118.2

-1.2
1.4
—3

-i\9
-3.

5.9
5.6
5.9
6.7
6.9

1970
1971
1972
1973
1974

992.7
1,077.6
1,185.9
1,326.4
1,434.2

28.6
30.8
35.4
53.8
52.2

17.6
17.4
19.0
21.7
32.2

48.9
53.6
59.4
66.3
69.2

252.2
265.6
292.5
326.1
340.7

146.2
153.9
173.2
195.9
201.3

105.9
111.7
119.3
130.2
139.4

85.7
93.8
104.3
114.3
122.9

166.5
181.4
199.5
221.5
241.5

142.4
156.4
169.8
184.9
202.0

114.4
123.6
136.5
153.1
167.5

130.5
14L8
155.4
167.8
182.7

-1.5
4.1
3.3
.8
3.7

7.3
9.2
10.9
16.0
19.8

1975
1976
1977
1978
1979

1,549.2
1,718.0
1,918.3
2,163.9
2,417.8

53.3
51.2
54.6
66.0
79.6

38.8
43.0
47.4
52.0
66.8

69.9
76.6
86.6
102.1
115.7

358.2
410.4
464.8
518.7
563.2

207.6
240.0
277.7
316.7
344.3

150.6
170.4
187.1
202.0
218.9

135.7
152.6
170.9
193.3
209.6

266.2
291.4
322.3
362.3
401.4

216.2
238.6
275.5
317.4
358.3

186.2
208.2
234.3
265.9
302.4

202.0
220.4
237.2
259.1
279.6

5.5
5.1
1.4
-2.6
-1.5

17.3
20.5
23.5
29.6
42.6

1980
1981
1982

2,631.7
2,954.1
3,073.0

76.8
90.6
84.3

96.0
126.5
116.1

119.8 581.5
124.6 644.4
122.4 630.9

350.4
389.8
367.8

231.1
254.6
263.1

231.9
262.4
279.7

428.8 398.7
474.2 461.6
490.2 507.1

342.6
387.6
431.1

308.1
337.5
363.4

2.3
-4.9
.5

45.3
49.6
47.3

1947
1948
1949

233.1
259.5
258.3

20.8
24.0
19.5

6.8
9.4
8.1

1950
1951
1952
1953
1954

286.5
330.8
348.0
366.8
366.8

20.8
23.8
23.1
21.3
20.7

1955
1956
1957
1958
1959

400.0
421.7
444.0
449.7
487.9

1960
1961
1962
1963
1964

9.1
11.5
11.5

Note.—The industry classification is on an establishment basis and is based on the 1972 Standard Industrial Classification.
Source: Department of Commerce, Bureau of Economic Analysis.




232

TABLE B-ll.—Gross national product by industry in 1972 dollars, 1947-82
[Billions of 1972 dollars]
Gross domestic product

Year

AgriGross
national culture,
forestproduct ry, and
fisheries

FiTranspor- Whole- nance,
tation sale insur- Servand
Dura- Nonand
ance, ices
ble durable public retail
and
goods goods util- trade
real
ities
estate

Manufacturing
Mining

Construction Total

1947
1948
1949

470.3
489.8
492.2

26.3
28.2
28.0

10.8
11.3
9.9

22.9 114.9
26.5 121.4
26.5 115.1

1950
1951
1952
1953
1954

534.8
579.4
600.8
623.6
616.1

29.3
28 4
29.2
30.5
313

11.1
121
11.9
12.2
11.8

1955
1956
1957
1958
1959

657.5
671.6
683.8
680.9
721.7

32.1
31.7
311
32.2
30.6

1960
1961
1962
1963
1964

737.2
756.6
800 3
832.5
876.4

1965
1966
1967
1968
1969

Government
and
government
enterprises

StaRest
tistical Resid- of the
world
1
dis- ual
crepancy
2.9 - 7 . 4
-2.8 -1.2
.8 - . 6

68.5
72.0
66.3

46.4
49.4
48.8

42.3
42.1
39.2

75.9
78.0
79.8

54.7
56.6
59.8

55.9
57.5
57.6

68.7
69.2
73.3

29.3
32.5
33.8
34.8
36.0

131.1 78.1
146.0 89.9
150.8 94.3
161.1 102.6
149.6 91.7

53.0
56.1
56.5
58.5
57.9

41.2
45,5
45.5
46.6
45.8

87.5
88.3
91.0
93.9
94.5

63.9
66.7
70.9
73.9
77.3

59.7
60.8
61.6
62.7
62.9

75.6
90.0
96.9
96.3
95.2

2.4
5.0
2.6
3.6
3.1

.8
.2
2.6
4.1
4.6

3.0
3.7
3.9
3.7
40

13.2
13.9
13 8
12.7
13.3

38.2
40.9
40.9
42.1
45.5

165.7
166.9
167.7
153.3
171.2

103.4
102.5
102.9
88.8
100.9

62.3
64.4
64.8
64.5
70.3

49.7
52.1
53.2
51.9
55.4

103.1
106.2
107.9
107.8
115.4

81.8
85.8
89 8
93.4
98.5

67.6
70.9
74.1
76.2
80.8

95.7
97.8
100.4
101.7
104.0

1.8
-3.0
-1.7
.3
-1.9

4.2
3.4
9
4.5
4.0

4.5
5.1
5.5
4.6
4.9

321
31.8
317
32.5
31.8

13 5
13.6
13 9
14.5
15.1

461
46.7
484
49.9
52.2

1718
172.0
186 7
202.2
216.7

101.0
99.5
110.0
119.5
129.8

70 8
72.5
76 7
82.8
86.8

57 5
58.6
615
65.0
68.1

117.5 102 7
118.7 107.3
126.3 113 3
131.1 116.8
139.1 122.1

83 5
86.6
90 3
94.0
98.8

107.7 - 3 . 3
111.6
115.5
2.9
118.7
2.3
.2
123.1

31
4.4
32
-1.5
1.7

52
5.7
65
6.9
7.5

929.3
984.8
10114
1,058.1
1,087.6

32.8
31.3
32 6
321
32.7

15.7
16.5
17 0
17 6
18.2

54.4
54.6
53 4
56.9
55.8

236.7
254.9
254 3
268.2
277.2

144.6
157.3
157.4
165.5
170.3

92.0
97.6
96 9
102.7
106.8

73.4
79.4
816
88.2
92.6

148.2
156.3
160.1
169.9
173.6

128.5
133.9
139 4
145.7
152.9

103.1
109.0
115.0
118.8
124.0

127.8
136.9
144.1
148.9
152.5

-1.6
1.7
-.3
-2.5
-4.4

2.3
3.0
6.7
6.2
4.6

7.9
74
7S
8?
7.9

1970
1971
1972
1973
1974

1,085.6
1,122.4
1,185.9
1,254.3
1,246.3

34.4
35 9
35.4
35 3
35.8

18.9
18 4
19.0
19 2
19.2

53.4
57 9
59.4
601
53.3

261.2
266.8
292.5
3253
311.7

155.2
156.4
173.2
194 2
186.3

106.0 94.9
1104 97.9
119.3 104.3
1311 110 6
125.3 111.9

176.4
185.5
199.5
211.1
207.0

155.8
162.6
169.8
177.2
184.5

126.7
128.4
136.5
144.8
147.9

152.9
153.9
155.4
157.2
161.2

-1.7
4.2
3.3
3.2

4.7
1.2
.0
-2.5
-6.5

10.9
151
17.3

1975
1976
1977
1978
1979

1,231.6
1,298.2
1,369.7
1,438.6
1,479.4

37.1
35.8
36.9
37.0
38.9

18.9
19.1
19.5
20.1
20.8

48.3
52.8
55.0
58.8
58.2

289.6
317.4
339.2
357.2
367.0

168.8
187.2
202.9
217.4
223.4

120.8
130.1
136.3
139.8
143.6

209.7 187.9
220.2 194.8
231.0 207.2
244.6 217.8
250.7 229.4

148.5
154.7
164.3
174.2
183.0

4.4
164.3
165.7
3.8
167.5
1.0
171.7 - 1 . 8
174.3 - 1 . 0

-4.2
-.2
6.0
4.9
-8.1

13.8
15.6
16.9
19.9
26.3

1980
1981
1982

1,475.0
1,513.8
1,485.4

39.9
45.6
44.2

21.6
22.5
21.6

52.2 351.0 210.2
50.5 361.1 217.2
47.7 336.1 197.4

177.5
177.9
177.6

-4.6
-5.8
65

25.7
25.6
23.1

113.5
118.6
125.1
134.2
140.0

140.8 139.6
144.0 142.9
138.7 138.9

246.0
251.8
248.0

235.6 189.1
245.4 198.7
251.0 203.5

1.3
-2.5
.2

2.5
3.0
2.7

8.0

1
Equals GNP in constant dollars measured as the sum of incomes less GNP in constant dollars measured as the sum of gross product
by industry.
Note.—The industry classification is on an establishment basis and is based on the 1972 Standard Industrial Classification.
Source: Department of Commerce, Bureau of Economic Analysis.




233

T A B L E B-12.—Gross domestic product of nonfinancial corporate business, 1929-83

[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Met domestic product

Year or
quarter

Gross
domestic
product
of
nonfinancial
corporate
business

1929
1933
1939

50.1
24.4
43.7

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

50.4
65.6
82.9
98.7
102.1
95.3
99.3
120.0
137.3
133.5

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961....
1962
1963
1964
1965
1966
1967
1968
1969

Capital
consumption
allowances
with
capital
consumption
adjustment

5.5
4.3
4.8
4.9
5.4
6.1
6.2
6.3
6.5
7.6
9.3

Domestic income

Total

Indirect
business
tax,

Corporate profits with inventory vatuatior and capital
consumption adjustments

Total

cTC.

44.5
20.2
39.0

3.4
3.8
5.1
5.5
6.4
6.8
7.3
8.1
8.9

41.2
16.3
33.9

CompenProfit >
Inven- Capital Net
sation
tory consump- interof
Profits after tax
Profest
valuaemploy- Trttat Prnfitc
tion
iion
lOldl rroiiis
its
tion
ees
before tax
Divi- Undis- adjust- adjustment
tax liabili- Total Honrle tributed ment
oenas profits
ty

7.5
32.3
16.7 - 2 . 1
28.2
4.2
7.4
31.2
39.8 12.7
51.0 17.7
62.2 21.8
65.1 21.6
61.9 17.1
67.2 13.8
79.1 19.7
87.8 25.6
85.3 22.9

16.4
20.1
23.6
22.2
17.8
22.0
29.1
31.8
24.9

8.4
.6
6.1
8.8

1.2
.5
1.4
2.7
7.5

10.9
11.7

10.1
11.2
12.1
12.6

40.0
53.8
70.0
85.2
87.7
79.9
81.6
99.6
114.3
109.2

151.9
174.5
182.3
195.0
191.9
216.7
231.6
242.3
236.3
266.0

12.6
14.6
15.8
16.8
17.9
19.1
21.8
23.8
24.8
25.8

139.3
159.9
166.6
178.2
174.0
197.6
209.8
218.5
211.6
240.2

14.1
15.2
16.8
18.2
17.4
19.2
20.8
22.4
22.8
25.4

125.2
144.7
149.7
160.0
156.6
178.4
189.0
196.1
188.8
214.8

94.7
110.2
118.3
128.7
126.5
138.5
151.4
159.1
155.9
171.6

29.6
33.4
30.2
30.0
28.6
38.3
35.9
34.9
30.2
40.1

38.5
39.1
33.8
34.9
32.1
42.0
41.8
39.8
33.7
43.1

16.9
21.2
17.8
18.5
15.6
20.2
20.1
19.1
16.2
20.7

21.6
17.9
16.0
16.4
16.4
21.8
21.8
20.7
17.5
22.4 10.0

277.0
285.0
311.3
331.8
358.4
393.6
431.5
454.1
500.2
544.1

26.8
27.5
28.4
29.4
30.8
32.7
35.6
38.9
42.6
47.1

250.2
257.5
283.0
302.3
327.6
360.9
395.9
415.2
457.6
497.0

28.3
30.1
33.0
35.6
38.4

221.9
227.3
249.9
266.8
289.3
319.8
353.0
369.5
406.1
439.1

181.1
185.1
199.8
210.7
226.3
246.1
273.5
291.9
322.8
358.5

37.4
38.3
45.6
51.2
57.7
67.7
72.2
68.8
73.3
67.5

39.7
39.5
44.2
48.9
55.4
65.2
70.3
66.3
72.9
69.4

19.2
19.5
20.6
22.8
24.0
27.2
29.5
27.7
33.4
33.1

20.5
20.1
23.5
26.2
31.4
38.0
40.8
38.6
39.5
36.2

378.4
402.0
447.0
506.2
556.5
581.1
654.4
738.5
844.3
958.1

52.7
62.1
72.7
78.6
63.6
86.1
107.3
129.5
142.1
134.7

56.8
65.4
76.6
96.0
105.3
107.3
135.0
156.5
178.4
191.8

41.1
42.9
45.8
51.5
58.0

11.2
13.8
12.6
10.2

8.6 13.4

18.3
20.0
9.3 15.6

10.8
11.8

9.6

1.9

14.1
10.8

-5.0
-1.2

1.0
8.8
9.1 - 1 . 0
9.0 - . 3

13.4
12.7

-1.7
-2.7

U.4 - 1 . 5
8.2 — 3
12.4
-3
9.9 -2
9.5
.3
12.2
.0
13.5
.1
17.7
-.5

-6.6
-4.6
-6.6
-20.0
-40.0
= 11.6
-14.7
-16.2
-24.0
-43.1

67.0 110.8 43.7
65.5 117.5 53.5
41.2 90.3 57.2
55.1 96.7 64.9

1,540.7
1,739.9
1,776.7
1,918.4

170.0
192.2
210.0
218.2

1,370.7
1,547.7
1,566.8
1,700.2

147.6
176.5
179.0
196.9

1,223.0
1,371.2
1,387.8
1,503.2

1,046.5
1,155.8
1,198.6
1,269.3

120.3
150.2
124.0
174.5

177.8
183.0
131.5
151.9

Ill
I
V

1,683.3
1,718.8
1,778.6
1,778.9

183.0
189.1
195 3
201.3

1,500.2
1,529.7
1583 3
1^5777

172.1
176.2
178 6
179*0

1,328.1
1,353.5
1404 6
1*3987

1,123.7
1,146.4
1173 2
l]l79J

148.1
145.1
158.8
149^0

195.3 71.7
177.2 63.0
1871 67 5
1722 599

1982:
I
II
Ill
IV

1764 9
1,780.2
1,786.8
1,775.0

204 0
2084
212.3
215.1

1560 8
1,571.8
1,574.5
1,559.8

176 2
177.7
179.6
182.4

1 384 6
U94.1
1,394.9
1,377.4

1187 7
1,199.7
1,205.6
1,201.2

127 7
126.5
127.5
114.3

137 0
136^6
134.4
117.9

1,817.6
1,892.4
1,957.8

215.3 1,602.3
216.7 1,675.7
219.6 1,738.2
221.2

186.4 1,415.9 1,222.4 133.9
197.6 1,478.1 1,253.9 165.7
201.1 1,537.1 1,283.7 194.5
1,317.4
202.7

119.7
149.0
173.8

123.6
114.2
119.6
1124

50.2
52.2
55 2
56^3

914 55 2
4X6 93.0 55.7
45 7

-1.4
=-.6
-1.1
-1.2
-1.3
-1.2

-.9

-.3

-.2

-3.0
-3.5
-4.0
-3.9
-3.9
-4.6
-4.5
-3.9
-3.2
-2.0
-3.2
-3.4
-3.2
-2.7
-2.1
-1.5

1.4
2.3
2.9
3.7
3.9
4.0

1.4
1.7
1.5
1.4
1.3
1.3
1.1
1.0
1.0
.7
.8
.9
1.0
.9
1.1
1.2
1.3
1.5
1.6
1.7
2.2
2.7
3.1
3.5
3.9
4.5
4.8
5.3
6.1
7.4
8.7

- 4.0 10.1
4.0 13.1

2.4
1.3
2.7
2.6

-1.8
-9.7
-13.0
-10.8
-12.3
-13.9

17.0
18.0
19.1
23.0
29.6
30.8
29.5
32.1
36.9
43.9

67.1 - 4 2 . 9
64.0 - 2 3 . 6
33.1 - 8 . 4
31.8 - 9 . 8

-14.7
-9.1

56.3
65.2

73.4
62.0
64 5
56*1

-10.5
-9.6

-36.7
-22.6
— 19 4
-15J

92.4 58.5
84.4 59.2

36 2 — 55
37^3 -8!5
33.9 - 9 . 0
25.1 -10.3

41.8 77.9 63.3
55.0 94.0 65.6
63.9 109.8 65.1
65.7

14.5 - 1 . 7
28.4 -10.6
44.8 -18.3
-8.5

42.0
33.6

1
Indirect business tax and nontax liability plus business transfer payments less subsidies.
Source: Department of Commerce, Bureau of Economic Analysis.

234

-5.9
-2.2

11.3
17.1
22.9
35.0
41.9
40.4
52.2
64.9
73.8
82.8

1980
1981
1982
1983 »




12.8
14.0

27.0 29.8 18.5
29.8 35.6 18.5
33.6 43.0 20.1
40.0 56.0 21.1
42.0 63.3 21.4
41.2 66.1 25.7
52.6 82.3 30.1
59.6 96.8 31.9
66.9 111.5 37.7
69.2 122.5 39.8

63.4
448.1
482.1
70.5
538.7
76.7
83.7
607.9
649.7
89.7
97.1
697.9
105.3
791.2
112.6
900.1
122.0 1,023.3
130.5 1,136,7

\\ZZ1

0.5
-2.1

1.4 -.7
2.6 - . 2
5.0 - 2 . 5
5.2 - 1 . 2
5.8 - . 8
5.6 - . 3
3.5 - . 6
8.6 - 5 . 3

-1.2
-2.1
-1.6
-3.7
-5.9

52.2
511.4
57.3
552.6
62.6
615.5
67.9
691.6
739.4
79.5
94.9
795.1
104.8
896.5
115.7 1,012.7
130.9 1,145.3
149.6 1,267.3

III
IV »

10.6
10.6
11.4
12.6
13.7
15.6
16.8
17.5
19.1
19.1

2.2
= 1.9

22.4
24.0
21.2
20.4
17.1

563.7
609.9
678.0
759.4
818.9
890.0
1,001.3
1,128.4
1,276.2
1,416.8

1983:

5.1
2.0
3.3
3.5
3.9
3.7
3.9
4.1
4.1
4.8
5.5
6.0
6.0
7.5
7.1
7.1
7.3
7.4
8.5
9.0
9.3
9.3

45.4
60.2
76.8
92.4
95.8
88.8
91.8
110.7
126.4
121.8

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

1981:

7.3
.1
4.7
6.1
9.0
8.9
9.8
9.6
7.6

.8 65.2

32.5 59.3

56.3
62.1

- 8 8 72 6
76 70*C
—38 69 2
- 1 . 6 6L9
2.1 61.8
6.7 61.9
15.9
27.3
39.0
47.7

59.7
58.6
58.9
60.2

T A B L E B-13.—Output, costs, and profits of nonfinancial

corporate business,

1948-83

[Quarterly data at seasonally adjusted annual rates]

Year or
quarter

Gross domestic
product of
nonfinancial
corporate
business (billions
of dollars)

Current
dollars

1972
dollars

Current-dollar cost and profit per unit of output (dollars) 1

Total
cost
and
profit 2

Capital
consumption
allowances
with
capital
consumption
adjustment

Indirect
business
tax,
etc.*

Compensation
of
employees

Corporate profits with
inventory valuation and
capital consumption
adjustments
Net
interest
Total

Profits
tax
liability

Profits
after
tax4

Output
per hour
of all
employees
(1972
dollars)

Compensation
per hour
of all
employees
(dollars)

1949

137.3
133.5

229.7
219.9

0.598
.607

0.047
.053

0.053
.057

0.382
.388

0.112
.104

0.051
.042

0.060
.062

0.004
.004

1950
1951
1952
1953
1954

151.9
174.5
182.3
195.0
191.9

247.5
270.2
275.2
292.0
283.4

.614
.646
.663
.668
.677

.051
.054
.057
.058
.063

.057
.056
.061
.062
.061

.383
.408
.430
.441
.446

.120
.124
.110
.103
.101

.068
.079
.065
.063
.055

.051
.045
.045
.040
.046

.004
.004
.004
.004
.005

1955
1956
1957
1958
1959

216.7
231.6
242.3
236.3
266.0

315.1
324.1
328.3
313.4
347.4

.688
.715
.738
.754
.766

.061
.067
.073
.079
.074

.061
.064
.068
.073
.073

.439
.467
.484
.497
.494

.122
.111
.106
.097
.116

.064
.062
.058
.052
.060

.057
.049
.048
.045
.056

.005
.005
.007
.009
.009

5.206
5.433

2.589
2.684

1960
1961
1962
1963
1964

277.0
285.0
311.3
331.8
358.4

358.4
367.2
399.7
426.3
455.6

.773
.776
.779
.778
.787

.075
.075
.071
.069
.068

.079
.082
.083
.083
.084

.505
.504
.500
.494
.497

.104
.104
.114
.120
.127

.054
.053
.052
.053
.053

.051
.051
.062
.067
.074

.010
.011
.011
.011
.012

5.536
5.727
5.997
6.248
6.469

2.797
2.887
2.998
3.089
3.213

1965
1966
1967
1968
1969

393.6
431.5
454.1
500.2
544.1

495.2
530.7
543.0
578.9
604.0

.795
.813
.836
.864
.901

.066
.067
.072
.074
.078

.083
.081
.084
.089
.096

.497
.515
.538
.558
.594

.137
.136
.127
.127
.112

.055
.056
.051
.058
.055

.082
.080
.076
.069
.057

.012
.014
.016
.017
.022

6.673
6.776
6.847
7.074
7.092

3.316
3.492
3.680
3.945
4.209

1970
1971
1972
1973
1974

563.7
609.9
678.0
759.4
818.9

599.6
626.8
678.0
731.9
708.2

.940
.973
1.000
1.038
1.156

.087
.091
.092
.093
.112

.106
.113
.113
.114
.127

.631
.641
.659
.692
.786

.088
.099
.107
.107
.090

.045
.047
.049
.055
.059

.043
.052
.058
.053
.030

.028
.029
.028
.031
.042

7.115
7.450
7.664
7.849
7.555

4.491
4.778
5.052
5.429
5.937

1975
1976
1977
1978
1979

890.0
1,001.3
1,128.4
1,276.2
1,416.8

694.2
745.5
795.8
846.3
876.1

1.282
1.343
1.418
1.508
1.617

.137
.141
.145
.155
.171

.140
.141
.141
.144
.149

.837
.878
.928
.998
1.094

.124
.144
.163
.168
.154

.059
.071
.075
.079
.079

.065
.073
.088
.089
.075

.044
.040
.040
.044
.050

7.774
8.002
8.144
8.216
8.201

6.507
7.024
7.558
8.198
8.969

1980
1981
1982
1983 "...

1,540.7
1,739.9
1,776.7
1,918.4

859.5
887.5
857.7
893.9

1.793
1.960
2.072
2.146

.198
.217
.245
.244

.172
.199
.209
.220

1.218
1.302
1.397
1.420

.140
.169
.145
.195

.078
.074
.048
.062

.062
.095
.097
.134

.065
.074
.076
.066

8.126
8.332
8.373

9.894
10.850
11.700

883.7
888.7
898.6
878.9

1.905
1.934
1.979
2.024

.207
.213
.217
.229

.195
.198
.199
.204

1.272
1.290
1.306
1.342

.168
.163
.177
169

.081
.071
.075
.068

.086
.092
.102
.101

.064
.070
.081

IV

1,683.3
1,718.8
1,778.6
1,778.9

8.290
8.319
8.392
8.323

10.541
10.730
10.957
11.171

1982:
I
I
I
Il
l
IV

1,764.9
1,780.2
1,786.8
1,775.0

864.3
860.5
859.5
846.4

2.042
2.069
2.079
2.097

.236
.242
.247
.254

.204
.207
.209
.215

1.374
1.394
1.403
1.419

.148
.147
.148
.135

.053
.051
.049
.040

.095
.096
.099
.095

.079
.072
.073

8.342
8.330
8.409
8.421

11.463
11.614
11.795
11.952

1,817.6
1,892.4
1,957.8

856.0
885.8
909.4

2.123
2.136
2.153

.252
.245
.241

.218
.223
.221

1.428
1.416
1.412

.156
.187
.214

.049
.062
.070

.108
.125
.144

.070
.066
.065

8.492
8.627
8.716

12.126
12.213
12.304

1948

1981:
I

1983:

1
Output is measured by gross domestic product of nonfinancial corporate business in 1972 dollars.
2
This is equal to the deflator for gross domestic product of nonfinancial corporate business with the decimal point shifted two
places to the left.
3
Indirect business tax and nontax liability plus business transfer payments less subsidies.
4
With inventory valuation and capital consumption adjustments.

Sources: Department of Commerce (Bureau of Economic Analysis) and Department of Labor (Bureau of Labor Statistics).




235

TABLE B-14.—Personal consumption expenditures, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Nondurable goods

Durable good;

Personal
consumption
expenditures

Year or quarter

Durable
goods

Nondurable goods

Services

Motor
vehicles
and parts

Furniture
and
household
equipment

Other

Food

Clothing
and
shoes

1929
1933
1939

77.3
45.8
67.0

9.2
3.5
6.7

37.7
22.3
35.1

30.3
20.1
25.2

3.3
1.1
2.3

4.7
1.9
3.4

1.2
.5
1.0

19.5
11.5
19.1

9.4
4.6
7.1

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

71.0
80.8
88.6
99 4
108.2
119.5
143.8
161.7
174.7
1781

7.8
9.7
6.9
6.5
6.7
8.0
15.8
20.4
22.9
25 0

37.0
42.9
50.8
58.6
64.3
71.9
82.7
90.9
96.6
94 9

26.2
28.2
31.0
34.3
37.1
39.6
45.3
50.4
55.3
58.2

2.8
3.5
.8
.8
1.0
4.1
6.6
8.0
10.6

3.8
4.8
4.6
3.9
3.8
4.5
8.4
10.6
11.5
11.3

1.1
1.3
1.6
1.9
2.1
2.5
3.2
3.3
3.4
3.2

20.2
23.4
28.4
33.2
36.7
40.6
47.4
52.3
54.2
52.5

7.5
8.8
11.0
13.4
14.6
16.5
18.2
18.8
20.1
19.3

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

192 0
207.1
2171
229.7
235 8
253.7
266 0
280.4
289 5
310 8

30.8
29.8
29.1
32.5
31.8
38.6
37 9
39.3
36 8
42.4

98 2
108.8
113.9
116.5
118 0
122.9
128 9
135.2
139 8
146.4

63.0
68.5
74.0
80.6
86.1
92.1
99.2
105.9
112.8
121.9

13.7
12.2
11.3
13.9
13.0
17.8
15.8
17.2
14.8
18.9

13.7
14.0
14.0
14.6
14.6
16.2
17.1
16.9
16.6
17.8

3.3
3.6
3.9
4.1
4.2
4.6
5.0
5.2
5.4
5.8

53.9
60.4
63.4
64.4
65.4
67.2
69.9
73.6
76.4
79.1

19.6
21.2
21.9
22.1
22.1
23.1
24.1
24.3
24.7
26.1

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

324 9
335 0
355 2
374 6
400 5
4304
4651
490 3
536.9
581.8

43.1
416
46.7
514
56.4
63 0
68.0
701
80.5
85.7

1511
155 3
1616
1671
176 9
1886
204 7
212 6
230.6
247.8

130.7
1381
147.0
1561
167.1
178 7
192.4
207 6
225.8
248.2

19.7
17 8
21.5
24 4
26.1
30 0
30.4
301
36.3
38.7

17.7
17.9
18.9
20.3
22.8
24.7
111
29.5
32.3
34.1

5.8
5.8
6.3
6.7
7.6
8.3
9.9
10.5
11.8
13.0

81.1
83.2
85.5
87.8
92.7
98.9
106.6
109.6
118.7
127.5

26.7
27.4
28.7
29.5
31.9
33.5
36.6
38.2
42.1
45.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

6217
672.2
7371
812.0
888.1
9764
1,084.3
1204 4
1346 5
1,507.2

85 2
97.2
1111
123.3
121.5
132 2
156.8
178 2
200 2
213.4

265 7
278 8
300 6
333.4
373.4
407 3
441.7
478 8
528 2
600.0

270 8
296.2
3253
355.2
393.2
437 0
485.7
547.4
618 0
693.7

36 2
45.4
52.4
57.1
50.4
55 8
72.6
84.8
95 7
96.6

35.2
37.2
41.7
47.1
50.6
53.5
59.1
65.7
72.8
81.8

13.9
14.6
16.9
19.2
20.5
22.9
25.2
111
31.7
35.1

138.9
144.2
154.9
172.1
193.7
213.6
230.6
249.8
275.9
311.6

46.8
50.6
55.4
61.4
64.8
69.6
75.3
82.6
92.4
99.1

1980
1981
1982
1983"

16681
1857 2
19919
2,158.6

214 7
236.1
244 5
278.6

668 8
733 9
7610
804.3

784 5
887.1
986 4
1,075.7

90 7
101.6
109 9
132.8

86.3
93.3
93.5
101.8

37.7
41.2
41.1
44.0

345.1
375.9
396.9
422.5

104.6
115.3
119.C
125.6

1,802.8
1835 8
18861
1,904.1

236.9
233 4
243 5
230.8

716.3
730 6
7411
747.7

849.6
871.8
9015
925.6

103.9
98.5
107 7
96.5

92.7
93.3
93.8
93.4

40.3
41.5
42.0
40,9

367.7
373.7
378.9
383.2

112.1
115.0
116.8
117.2

1938 9
1972 8
2 008 8
2,046.9

239 4
242 9
243 4
252.1

749 7
754 7
766 6
773.0

949.7
975 2
9989
1,021.8

106.4
107 6
109 4
116.1

91.7
93.9
93.5
94.9

41.3
41.4
40.5
41.0

388.1
394.7
400.4
404.5

118.4
119.0
119.2
119.6

2 073 0
2147 0
21811
2,233.1

258.5
277 7
282 8
295.2

7771
799 6
814 8
825.9

1,037.4
1069 7
1 083.5
1,112.0

118.4
133 9
135 6
143.2

97.3
100.8
102.9
106.4

42.9
43.1
44.3
45.7

411.7
419.6
426.4
432.4

120.0
126.4
125.1
130.9

1981:
II
III
I
V
1982:
I
II
Ill
I
V

.

...

1983:
||
til
IV P

See next page for continuation of table.




236

TABLE B-14,—Personal consumption expenditures, 1929-83—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Nondurable goods—cont'd
Year or
quarter

Gasoline
and oil

Fuel oit
and coal

Services
Household operation

Other

Housing 1
Total

Electricity
and gas

Other

Transportation

Other
Total

Medical
care

1929
1933
1939

1.8
1.5
2.2

1.6
1.2
1.4

5.4
3.5
5.3

11.7
8.1
9.4

4.0
2.8
3.8

1.2
1.1
1.4

2.9
1.7
2.4

2.6
1.5
2.0

12.0
7.7
10.0

2.2
1.5
2.1

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

2.3
2.6
2.1
1.3
1.4
1.8
3.4
4.0
4.8
5.3

1.5
1.7
1.9
2.0
2.0
2.2
2.5
3.0
3.4
3.1

5.6
6.4
7.5
8.7
9.6
10.8
11.3
12.8
14.1
14.7

9.7
10.4
11.2
11.8
12.3
12.8
14.2
16.0
17.9
19.6

4.0
4.3
4.8
5.2
5.9
6.4
6.8
7.5
8.1
8.5

1.5
1.5
1.6
1.7
1.8
1.9
2.1
2.3
2.6
2.9

2.6
2.7
3.2
3.5
4.1
4.5
4.7
5.1
5.4
5.6

2.1
2.4
2.7
3.4
3.7
4.0
5.0
5.3
5.8
5.9

10.3
11.2
12.2
13.9
15.2
16.4
19.4
21.7
23.6
24.1

2.2
2.4
2.6
2.9
3.3
3.6
4.5
5.5
6.3
6.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

5.5
6.1
6.8
7.4
7.8
8.6
9.4
10.2
10.6
11.3

3.4
3.5
3.4
3.4
3.5
3.8
3.9
4.1
4.2
4.0

15.8
17.6
18.3
19.3
19.2
20.3
21.6
23.0
24.0
25.9

21.7
24.3
27.0
29.8
32.2
34.3
36.7
39.3
42.0
45.0

9.5
10.4
11.1
12.0
12.6
14.0
15.2
16.2
17.3
18.5

3.3
3.7
4.1
4.5
5.0
5.5
6.1
6.5
7.1
7.6

6.2
6.7
7.0
7.5
7.6
8.5
9.2
9.7
10.2
10.9

6.2
6.7
7.1
7.8
7.9
8.2
8.6
9.0
9.3
10.1

25.6
27.0
28.8
31.0
33.3
35.6
38.7
41.4
44.3
48.3

6.9
7.3
8.0
8.9
9.7
10.3
11.0
12.0
13.1
14.3

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

12.0
12.0
12.6
12.9
13.5
14.7
16.0
17.0
18.6
20.7

3.8
3.7
3.7
4.0
4.1
4.4
4.7
4.8
4.7
4.5

27.5
29.0
31.1
32.8
34.6
37.2
40.9
43.0
46.5
49.6

48.1
51.2
54.7
58.0
61.4
65.5
69.5
74.1
79.8
87.0

20.1
21.0
22.2
23.4
24.8
26.3
28.0
30.0
32.2
35.0

8.3
8.8
9.4
9.9
10.4
10.9
11.5
12.2
13.1
14.2

11.8
12.2
12.8
13.6
14.4
15.4
16.5
17.8
19.2
20.8

10.7
11.2
11.7
12.2
12.8
13.7
15.0
16.2
17.6
19.5

51.7
54.8
58.3
62.5
68.1
73.3
79.9
87.2
96.2
106.8

15.4
16.4
18.0
19.5
22.3
23.9
26.0
28.4
31.4
36.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

22.4
23.9
25.4
28.6
36.6
40.4
44.0
48.1
51.2
66.6

4.4
4.5
5.0
6.2
7.7
8.2
9.8
10.7
11.9
16.1

53.2
55.5
59.8
65.0
70.5
75.5
82.1
87.6
96.9
106.6

93.9
102.7
112.5
123.8
137.4
149.8
166.5
185.9
209.6
236.0

37.7
41.0
45.2
49.6
55.2
63.3
71.6
81.1
90.1
99.3

15.4
17.0
18.8
20.5
24.0
29.2
32.9
38.5
42.9
47.8

22.2
24.0
26.4
29.1
31.2
34.1
38.7
42.6
47.2
51.5

22.0
25.1
27.5
28.8
30.9
33.2
38.6
46.4
51.2
56.3

117.2
127.4
140.1
153.0
169.8
190.7
209.0
234.1
267.1
302.0

41.0
45.9
51.4
57.4
64.5
73.7
83.3
96.5
108.4
124.1

1980
1981
1982
1983 P

84.8
94.6
91.5
90.6

18.6
20.7
20.0
20.9

115.7
127.4
133.5
144.8

266.2
302.0
334.1
363.6

113.0
128.4
144.3
154.8

57.6
66.8
76.3
82.0

55.4
61.6
68.0
72.9

61.1
65.5
68.4
72.9

344.3
391.3
439.6
484.3

145.1
173.6
196.6
213.4

1981:
|
II
Ill ".
..
IV

93.1
94.8
95.1
95.6

20.3
20.7
21.1
20.9

123.1
126.4
129.2
130.8

288.0
297.0
306.6
316.5

121.7
125.8
130.5
135.5

62.9
65.1
68.2
71.0

58.8
60.7
62.3
64.5

65.4
64.5
66.0
65.9

374.5
384.5
398.4
407.7

162.8
169.9
177.9
183.9

1982:
I
II
III
IV

94.0
89.6
91.3
91.1

19.4
19.6
20.9
20.2

129.8
131.9
134.8
137.7

323.8
329.7
337.8
345.2

140.2
144.6
145.2
147.1

74.9
77.2
76.2
76.8

65.3
67.4
69.0
70.3

66.5
68.0
69.8
69.2

419.2
432.9
446.1
460.3

188.7
194.4
199.9
203.5

1983:
I
II
Ill
IV '

87.3
90.3
93.1
91.6

17.7
21.2
23.0
21.6

140.4
142.1
147.2
149.5

352.6
359.5
367.2
375.2

145.9
155.4
155.8
162.2

74.1
82.8
83.3
87.6

71.8
72.6
72.5
74.6

70.1
70.9
74.0
76.6

468.8
483,9
486.6
498.0

207.0
211.7
215.1
219.7

1
Includes imputed rental value of owner-occupied housing.
Source: Department of Commerce, Bureau of Economic Analysis.




237

TABLE B-15.—Gross and net private domestic investment, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Gross
private
domestic
investment

Less:
Capital
consumption
allowances
with
capital
consumption
adjustment

1929
1933
1939

16.2
1.4
9.3

9.7
7.4
8.7

6.5
-6.0
.6

-4.5
.1

3.1
-3.5
-.6

1.7
-1.6
-1.0

1.4
-1.8
.3

1.7
-1.0
,8

1.7
-.9
.8

-0.1
-.1
-.0

0.0
-.0
.0

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

13.1
17.9
9.9
5.8
7.2
10.6
30.7
34.0
45.9
35.3

9.1
10.0
11.2
11.5
11.7
12.2
14.0
17.3
20.2
21.8

4.1
7.9
-1.3
-5.7
-4.6
-1.6
16.6
16.6
25.6
13.5

1.9
3.4
-3.0
-5.0
-3.6
-.6
10.3
17.1
20.9
16.6

.7
2.0
-2.5
-3.5
-1.7
1.3
6.6
10.2
11.3
8.1

-.7
-.3
-1.7
-2.6
-2.0
-1.2
2.4
2.1
2.7
2.3

1.4
2.2
-.7
-.9

1.2
1.5
-.6
-1.6
-1.9
-1.8
3.7
6.8
9.7

.0
.0
-.1
-.1
-.1

.0
.0
-.0
-.1
-.1
-.1
,1
2

8.5

1.1
1.4
-.5
-1.4
-1.7
^1.6
3.4
6.4
9.1
7.9

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

53.8
59.2
52.1
53.3
52.7
68.4
71.0
69.2
61.9
78.1

23.5
27.2
29.3
31.0
32.7
34.8
38.7
41.7
43.5
44.9

30.3
32.0
22.8
22.4
20.0
33.6
32.3
27.5
18.4
33.2

23.5
21.7
19.7
21.9
21.6
27.6
27.6
26.1
19.9
27.5

9.6
10.7
9.1
10.8
9.1
11.9
13.9
14.3
8.1
10.6

2.9
3.9
3.8
4.8
5.1
5.9
7.9
7.9
6.4
6.4

6.7
6.7
5.3
6.0
4.0
6.0
6.0
6.4
1.8
4.2

13.9
11.0
10.6
11.1
12.5
15.7
13.7
11.8
11.8
16.9

13.4
10.6
10.3
10.8
12.2
15.6
13.4
11.7
11.6
16.7

.3
.3

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

75.9
74.8
85.4
90.9
97.4
113.5
125.7
122.8
133.3
149.3

46.3
47.5
49.0
50.6
52.9
56.0
60.7
65.9
72.1

29.6
27.3
36.5
40.3
44.5
57.5
65.0
57.0
61.2
69.3

26.7
24.9
30.2
34.4
38.9
47.6
50.9
46.6
53.3
59.5

12.3
10.9
14.0
15.3
19.7
28.9
35.4
31.9
33.6
38.1

7.3
7.3
7.9
7.8
9.1
12.9
14.8
13.8
14.5
16.6

5.0
3.6
6.1
7.5
10.6
16.0
20.6
18.2
19.1
21.5

14.4
14.0
16.2
19.0
19.1
18.7
15.5
14.7
19.8
21.3

14.3
13.9
16.1
18.8
18.9
18.6
15.3
14.5
19.6
21.0

1970
1971.. . .
1972.
1973
1974
1975.
1976. .
.
1977 .
1978
1979

144.2
166.4
195.0
229.8
228.7
206.1
257.9
324.1
386.6
423.0

88.1
96.5
106.4
116.5
136.0
159.3
175.0
195.2
222.5
256.0

56.2
69.9
88.6
113.3
92.7
46.8
82.8
128.9
164.1
167.0

52.9
62.3
78.4
94.8
78.5
53.7
71.0
105.9
137.7
152.7

33.9
31.1
37.0
51.9
49.2
30.3
34.3
50.7
73.6
89.0

16.3
15.6
16.6
20.7
18.9
13.1
14.1
16.0
23.3
33.7

17.6
15.5
20.4
31.2
30.3
17.3
20.2
34.7
50.4
55.3

19.0
31.2
41.3
42.9
29.3
23.4
36.8
55.2
64.0
63.7

18.9
30.9
40.9
42.5
28.4
23.1
36.5
54.5
63.3
63.2

1980 . . .
1981. .
1982

401.9
474.9
414.5
471.3

293.2
329.5
359.2
377.4

108.7
145.4
55.3
93.9

118.5
127.0
79.9
100.8

77.0
89.7
59.0
44.6

36.2
49.1
48.8
36.8

40.9
40.6
10.2

41.5
37.3
20.8
56.2

41.2
37.7
21.3
56.6

455.5
472.1
495.8
476.2

314.8
324.2
334.4
344.6

140.7
147.9
161.4
131.6

129.8
132.9
127.8
117.3

422.9
432.5
425.3
377.4

349.3
356.1
363.0
368.3

73.6
76.4
62.3
9.1

99.3
87.6
67.2
65.5

404.1
450.1
501.1
529.8

370.8
373.3
381,7
383.6

33.3
76.8
U9.4
146.2

72.7
91.3
110.9
128.5

Year or quarter

1983"
1981:

\\ZZZZ.
III
IV
1982:
|
II
ill
IV
1983:

I
tl
til
IV

Equals: Net private domestic investment
Net fixed investment
Presidential
Total
Total
Total

Source: Department of Commerce, Bureau of Economic Analysis.




238

Structures

Residential

Producers'
durable
equipment

24
4.2
8.2
8.6
5.8

7.8

Total

Nonfarm
structures

Farm
structures

~2
.3
.4
.4

^3
.0
.1
.1
-.0

!o
.0
.0
-.0
.0
.0
-.1
-.0
.2
-!2
-.4
.2
-.2

~'.\

-2
-'.9

Producers'
durable
equipment

\\
.2
.1
.1
.1
.1
.1
.1
.1
.1
.2
.1
.1
.1
.1
.2
.2
.2
.2
.3
.4
.4
.5
.6
7
.5
.5
.6
.6

.6
.5
.3
.4

TABLE B-16.—Gross and net private domestic investment in 1972 dollars, 1929-83

[Billions of 1972 dollars; quarterly data at seasonally adjusted annual rates]
Equals: Net private domestic investment

Less:

Year or quarter

Gross
private
domestic
investment

consumption
allowances
with
capital
consumption
adjustment

Net fixed investment
Nonresidential

Total
Total
Total

Producers'
durable
equipment

Total

Nonfarm
structures

Change

Farm
structures

Producers'
durable
equipment

in
business
inventories

7.8

3.8

6.0

6.2

= 8.5
-4.0

= 6.2

-5.1

-4.6

.9

3.0

3.0

-2.6
— 7
-5^8
-8.2
-6.6
-3.6

4.2
6.3

-1.5
-2.0

4.3
5.0

4.1
4.7

16.6
21.5
21.6
14.8

6.8
5.0
5.8
5.0

16.5
15.8

40.1
35.0
31.1
34.1
33.3
41.8
40.3
36.9
29.0
39.3

17.0
17.8
15.1
17.5
14.7
19.0
21.1
20.4
12.2
15.4

6.1
7.2
6.9
8.5
9.1

10.4
12.8
12.3
10.2
10.2

41.4
38.9
50.7
56.0
61.4
77.2
84.3
72.1
74.5
79.8

37.9
35.9
42.9
48.5
54.3
65.4
67.5
59.9
65.5
68.8

17.6
16.1
20.1
21.6
27.3
39.4
46.7
40.8
41.0
44.4

11.8
11.9
12.8
12.4
14.3
19.8
21.7
19.3
19.2
20.5

96.1
100.2
106.4
110.8
116.1
120.8
125.1
129.9
135.8
143.0

62.4
73.6
88.6
106.8
79.3
34.0
59.4
84.3
100.9
93.3

58.7
65.6
78.4
89.6
67.7
40.8
51.6
71.1
84.9
86.0

37.7
32.7
37.0
50.3
43.4
23.0
25.6
36.3
49.2
54.6

18.6
16.6
16.6
19.4
14.9

208.5
227.6
194.5
218.4

149.8
155.9
162.5
169.1

58.7
71.6
32.0
49.3

63.1
63.1
41.4
51.7

44.3
47.5
33.3
29.5

222.7
229.5
236 3
221J

153.7
155.1
156.6
158.2

69.0
74.4
79.7
63.5

66.0
65.5
63.6
57.5

3.0
8.9
161
6.0

199.7
201.4
198 4

40.0
39.8
35 3
12^9

50.2
43.2
36.6

= 10.2
-3 4

V8A

159.7
161.6
163 1
165*5

190.0
210 2
2307
24Z5

166.3
167 8
1707
17L5

23.7
42.4
60 0
7i!o

39.1
47.8
56 2

1929
1933
1939

8.4

33.6
33.0
32.1

22.3
-24.6

33.6

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

44.5
55.8
29.5
18.1
19.7
27.7
70.9
70.0
82.1
65.4

32.4
33.1
33.3
32.6
32.1
32.3
34.0
36.1
38,5
40.7

12.2
22.7
=3.8
= 14.6
= 12.4
=4.6
36.9
33.9
43.6
24.7

10.6
-9.0
-14.7
-10.1
-1.0
24.8
34.1
38.1
29.1

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

93.5
93.9
83.0
85.3
83.1
103.8
102.6
97.0
87.5
108.0

42.8
45.3
47.5
49.8
52.1
54.2
56.5
58.6
60.3
61.6

50.7
48.7
35.4
35.6
31.1
49.5
46.1
38.4
27.2
46.4

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

104.7
103.9
117.6
125.1
133.0
151.9
163.0
154.9
161.6
171.4

63.3
65.0
66.9
69.0
71.6
74.8
78.7
82.8
87.1
91.6

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

158.5
173.9
195.0
217.5
195.5
154.8
184.5
214.2
236.7
236.3

1980
1981
1982
1983 "

55.8

1981:
I

if!"Z"
HI
iv
1982:
I
II
Ill
IV
1983:
I
II
Ill
IV

Structures

Residemtial

P.

1.5

17.7
-19.8

-.1
6.0

11.7
-14.7
-3.1

1.6
5.7

-7.3
-10.2
-5.1

3.6

-1.6
-4.1
-4.6
-4.1

=.5
.0

.2
.2
-.1
-.3
-.4

_ 4

0.0
.0
.0
.1
.1
.0

— .1
— 1

4.6
=4.9

1.6
6.2
12.0

5.2
.1
=2.3
=3.6
12.2

12.6
16.5
14.4

11.9
15.6
13.5

A
.6
.8
.7

.0
.1
.2
.2
.1

23.2
17.1
16.0
16.6
18.6
22.8
19.2
16.5
16.9
23.9

22.4
16.5
15.5
16.1
18.2
22.7
18.8
16.3
16.6
23.6

.6
.5
.4
.4
.3
.0
.2
.1
.1
.1

.2
.1
.1
.1
.1
.1
.1
.1
.1
.2

13.0
19.7
25.0
21.5
21.8
23.9

20.3
19.8
22.8
26.9
27.0
26.0
20.8
19.1
24.5
24.3

20.2
19.6
22.6
26.7
26.8
25.8
20.6
18.9
24.3
24.0

-.1
.1
.0
.0
.1
-.1
.0
.0
-.1

.1
.1
.1
.2
.2
.2
.2
.2
.3
.4

21.0
32.9
41.3
39.3
24.3
17.8
26.0
34.7
35.6
31.4

20.9
32.6
40.9
38.9
23.5
17.5
25.8
34.2
35.1
31.0

-.3
-.2

.4
.5
.6

13.0
16.5

19.1
16.1
20.4
30.9
28.5
14.2
16.3
26.8
36.2
38.1

.2
-.2
-.1
.1
.0
-.1

.6
.4
.4
.5
.5
.5

15.3
17.9
17.5
13.3

29.1
29.6
15.7
16.2

18.7
15.6

18.4
15.7

-.1

.4
.3

=4.4

.2
.3

-9.4
-2.4

8.8
9.3
9.5

9.7
10.9
10.6

8.2
9.0
5.6
8.6
8.3
8.1
2.0
5.2
5.8
4.2
7.3
9.1

8.2

8.2

22.2

7.7

8.3

22.2

= .1

= .2
-.3

— .4
— 3
= .3

.7

-2
5.5

-4.4

10.6
13.7

4.3
1.5

-2.2

7.7
5.8
1.5

= 1.8

7.0
3.5
3.0
7.8
7.5
7.1

11.8
16.8
12.2

9.0

11.1

3.8
8.1

10.2
17.2
11.6
=6.7

7.8

13.3
16.0

7.3
8.5

13

22 7
-15.4

~3£
7.5

615

Source: Department of Commerce, Bureau of Economic Analysis.




1.5
7.2
9.8

-1.8
-4.5
-5.0
-4.6

-0.2

239

TABLE B-17.—Inventories and final sales of business, 1946-83
[Billions of dollars, except as noted; seasonally adjusted]
Inventories1

Inventor Minal
sales
Jonfarm

Quarter

Total

Farm
Total

Fourth quarter:
1946
1947
1948
1949

Manufacturing

Wholesale
trade

Final
sales 2
Retail
trade

Total

Other

Nonfarm3

72.0
82.6
87.2
78.7

22.7
251
22.9
19 8

49.3
57 5
64.3
59 0

26.7
29.3
32.5
28.9

10.1
10.5
11.7
11.8

11.4
13.1
15.1
14.0

3.5
4.6
5.0
4.3

16.0
18.3
19.6
19.5

4.50
4.51
4.44
4.03

3.08
3.14
3.27
3.02

1950
1951
1952
1953
1954

98.0
110.5
109.2
1101
107.6

26.1
28.3
26.0
24 6
23.8

719
82.2
83.1
85 5
83.9

35.2
43.4
44.4
46.4
44.3

13.8
14.6
14.8
15.0
15.3

17.5
18.0
17.7
18.3
18.5

5.4
6.1
6.2
5.8
5.9

21.7
24.6
26.1
27.2
27.5

4.53
4.49
4.18
4.05
3.91

3.32
3.34
3.18
3.15
3.05

1955
1956
1957
1958
1959

114.8
124.0
127.6
127.3
132.0

22.5
22.9
24 3
25.6
24.4

92 2
101.0
103 3
101.7
107.6

48.8
54.5
54.8
53.2
55.7

16.6
17.9
18.2
18.3
20.0

20.9
21.7
22.9
22.9
23.9

6.0
6.9
7,3
7.3

29.7
31.4
32.7
33.7
35.6

3.86
3.95
3.90
3.77
3.71

3.10
3.22
3.16
3.01
3.02

1960
1961
1962
1963
1964

136 0
137.9
144 6
150.4
156.2

25 6
25.9
27 3
27.6
26.5

1104
1121
117 3
122 7
129.7

56 6
57.7
60 9
62.9
66.4

20.4
20.S
21.5
23.1
24.4

25.3
24.9
26.3
27.6
29.0

9.9

36.9
38.8
41.1
43.7
46.2

3.69
3.55
3.52
3.44
3.38

2.99
2.89
2.85
2.81
2.81

1965
1966
1967
1968
1969

170.5
187.4
199.4
213.5
234.6

29.9
29 6
29.5
30 6
33.3

140.6
157 8
169.9
182 9
201.3

71.5
817
88.7
95 2
104.8

26.3
29.9
32.4
34.3
37.7

31.9
34.6
35.3
39.0
42.8

10.9
11.6
13.5
14.4
16.0

51.0
54.1
57.6
63.3
67.4

3.34
3.46
3.46
3.37
3.48

2.76
2.92
2.95
2.89
2.99

1970
1971
1972
1973
1974

244.0
260.8
288.7
357.7
434.4

32.3
36 7
45.6
66.6
62.4

211.6
2241
243.1
291.2
372.0

108.4
109 9
116.8
141.1
189.6

41.7
44.9
49.4
60.2
76.9

44.3
50 5
55.7
64.8
74.1

17.3
18.8
21.2
25.0
31.3

70.8
77.2
85.8
94.5
102.0

3.45
3.38
3.37
3.79
4.26

2.99
2.90
2.83
3.08
3.65

1975
1976
1977
1978
1979

439.4
473.6
519.5
602.3
705.0

64 5
60.6
599
73.9
81.9

374 9
413.0
459 6
528.3
623.1

189 8
207.5
224 7
254.2
306.6

77.3
86.9
98.7
114.6
135.7

74 6
82.9
93.7
109.0
121.0

33.3
35.7
42.5
50.6
59.8

113.6
124.1
138.9
159.5
176.9

3.87
3.82
3.74
3.78
3.99

3.30
3.33
3.31
3.31
3.52

1980
1981
1982
1983 "

775.4
819.3
798.4
816.9

86.3
83 7
80.7
82.4

689.0
735 6
717.7
734.6

341.4
363 2
341.5
343.1

155.9
164 6
163.5
167.3

128.0
139 4
141.3
153.0

63.8
68.4
71.3
71.1

194.6
212.7
223.0
241.3

3.98
3.85
3.58
3.39

3.54
3.46
3.22
3.04

791.2
802.2
811.9
819.3

85 6
87.5
83.1
83.7

705 6
714.7
728 8
735.6

350 7
355.4
362.9
363.2

159 6
160.6
162.5
164.6

129 8
133.4
137.3
139.4

65.4
65.4
66.1
68.4

202.0
205.0
210.4
212.7

3.92
3.91
3.86
3.85

3.49
3.49
3.46
3.46

ii
Ill
IV

810.4
814.6
814.9
798.4

86.8
88.5
84 6
80.7

723.6
7261
730 3
717.7

355.7
351.4
349.4
341.5

160.6
164.4
165.0
163.5

137.3
139.0
143.2
141.3

69.9
71.3
72.7
71.3

215.1
217.1
217.9
223.0

3.77
3.75
3.74
3.58

3.36
3.34
3.35
3.22

1983:
|
||
III
IV

791.5
793.9
807.5
816.9

84.3
82.6
81.9
82.4

707.1
711.3
725.5
734.6

332.7
334.9
341.1
343.1

159.1
159.2
164.1
167.3

143.3
145.6
149.3
153.0

72.1
71.6
71.1
71.1

226.2
232.0
236.8
241.3

3.50
3.42
3.41
3.39

3.13
3.07
3.06
3.04

1981:
||
III
IV
1982:

1
2

8.0
8.1

8.7
8.6
9.2

End of quarter.
Quarterly totals at monthly rates. Business final sales equals final sales less gross product of households and institutions,
government, and rest of the world, and includes a small amount of final sales by farms.
3
Ratio based on total business final sales, which includes a small amount of final sales by farms.
Note, The industry classification of inventories is on an establishment basis and is based on the 1972 Standard Industrial
Classification (SIC) beginning 1948 and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau of Economic Analysis.




240

TABLE B-18.—Inventories and final sales of business in 1972 dollars, 1947-83
[Billions of 1972 dollars, except as noted; seasonally adjusted]
Inventories »

Inventor Minal
sales

1
Yonfarm
Quarter

Fourth quarter:
1947
1948
1949

Total

Farm

Totat

Manu- Wholesale
facturing trade

Retail
trade

Final
sales 2
Other

Total

Nonfarm3

1161
121.6
117.2

25 7
26.7
26.2

90 5
94.8
91.0

47 4
48.8
46.2

16 0
17.2
17.2

18 3
20.3
19.8

87
8.6
7.8

33 2
34.4
34.6

3 50
3.53
3.38

2 73
2.76
2.63

1950
1951
1952
1953
1954

127.7
1414
145.7
147.2
145.0

27.5
291
30.4
30.2
31.1

100.2
112.3
115.4
117.1
114.0

49.3
600
62.7
64.5
60.9

19.2
19.7
20.1
20.3
20.6

23.0
23.0
23.0
23.6
23.7

8.7
9.5
9.6
8.7
8.8

36.9
39 8
41.6
43.0
43.1

3.46 .
3 55
3.51
3.42
3.36

2.72
2 82
2.78
2.72
2.64

1955
1956
1957
1958
1959

152.8
158.6
1601
158.3
165.3

31.5
30.7
314
32.4
32.4

121.2
127.8
128 7
125.9
132.9

64.3
69.1
68 7
66.1
69.1

22.1
22.8
22.5
22.5
24.6

26.5
26.8
27.8
27.5
28.7

8.4
9.2
9.8
9.8
10.5

45.6
46.5
47.1
48.1
49.7

3.35
3.41
3.40
3.29
3.33

2.66
2.75
2.73
2.62
2.68

I960
1961
1962
1963
1964

168.8
1718
179 7
187.2
194 3

32.8
33 2
34 5
35.7
351

136.1
138 6
145.2
151.5
159.2

69.9
717
75.6
78.2
82.0

25.1
25 7
26.6
28.4
29.9

30.3
29 8
31.6
33.0
34.5

10.7
114
11.4
12.0
12.8

50.7
531
55.3
58.3
60.9

3.33
3.24
3.25
3.21
3.19

2.68
2.61
2.62
2.60
2.61

1965
1966
1967
1968
1969

2061
222.9
235.1
244.1
255.1

36.2
36.0
36.8
37.0
37.3

169.9
186.8
198.3
207.0
217.8

87 0
97.2
1041
108.4
112.8

316
35.3
37 8
38.9
41.2

37.4
40.0
40.0
43.0
45.9

13.8
14.3
16.3
16.8
17.9

66.1
67.5
70.1
73.8
74.7

3.12
3.30
3.36
3.31
3.41

1970
1971
1972
1973
1974

258.9
267 0
277.2
294 4
306.0

37.7
39 2
39.8
421
41.8

221.2
227 8
237.4
252 3
264.2

112.9
1118
114.4
1218
130.9

44.0
45 9
47.9
50 4
54.1

46.1
512
54.6
58 8
58.3

18.2
19 0
20.5
214
20.9

75.2
789
84.7
87.2
85.0

3.44
3.38
3.27
3.38
3.60

2.57
2.77
2.83
2.81
2.92
2.94
2 89
2.80
2.89
3.11

1975
1976
1977
1978.
1979

299.2
307 0
320.3
336 3
343.6

43.0
411
40.8
40 8
43.2

256.3
265 9
279.5
295 5
300.4

127.1
1309
1341
139 8
145.0

52.2
55 5
59.7
63 5
64.7

55.8
588
63.1
67 3
66.1

21.1
20 8
22.6
24 9
24.6

88.1
92.2
97.6
103.0
105.4

3.40
3.33
3.28
3.27
3.26

2.91
2.88
2.86
2.87
2.85

1980
1981
1982 p
1983

339.2
347 7
338 3
335.9

40 9
44 2
434
40.5

298 4
303 5
294 9
295.5

1459
147 9
139 6
136.9

662
67 2
67.1
66.8

63.2
65 6
65.1
68.8

23.0
22 8
23.2
23.0

104.9
105.9
106.6
111.4

3.23
3.28
3.18
3.02

2.84
2.86
2.77
2.65

1981:
1
II
HI
IV..

340.0
342 2
346 2
347.7

41.1
42 2
43 3
44.2

298.9
300 0
303 0
303.5

146.8
147 2
149 0
147.9

66.1
66.2
66 5
67.2

63.1
64.2
65.2
65.6

23.0
22.5
22.2
22.8

106.6
106.4
106.8
105.9

3.19
3.22
3.24
3.28

2.80
2.82
2.84
2.86

1982:
|
II
til
IV...

345.2
344 3
344 0
338.3

44.5
44 2
43 8
43.4

300.7
300.2
300 2
294.9

146.0
144.3
143 0
139.6

66.5
67.6
67 7
67.1

64.9
64.8
66.1
65.1

23.4
23.4
23.4
23.2

105.8
105.5
105.1
106.6

3.26
3.27
3.27
3.18

2.84
2.85
2.86
2.77

334.5
333.1
3341
335.9

43.3
42.8
415
40.5

291.2
290.3
292 5
295.5

136.5
136.3
136 6
136.9

65.4
64.7
65 7
66.8

65.9
66.3
67.3
68.8

23.4
23.0
22.9
23.0

106.8
108.9
110.3
111.4

3.13
3.06
3.03
3.02

2.73
2.67
2.65
2.65

1983:
|
II
HI

IV
1
2

End of quarter.
Quarterly totals at monthly rates. Business final sates equals final sales less gross product of households and institutions,
government, and rest of world, and includes a small amount of final sales by farms.
3
Ratio based on total business final sales, which includes a small amount of final sales by farms.
Note.—The industry classification of inventories is on an establishment basis and is based on the 1972 Standard Industrial
Classification (SIC) beginning 1948 and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau of Economic Analysis.




241

TABLE B-19.—Relation of gross national product, net national product, and national income, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Year or quarter

Gross
national
product

Less:
Capital
consumption
allowances
with
capital
consumption
adjustment

Less:
Equals:
Net
national
product

Indirect
business
tax and
nontax
liability

Business
transfer
payments

Statistical
discrepancy

Plus:
Subsidies
less
current
surplus
of
government
enterprises
-0.2
-.0
.4

1929
1933
1939

103.4
55.8
90.9

9.7
7.4
8.7

93.7
48.4
82.2

7.1
7.1
9.4

0.6
.7
.5

1.1

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

100,0
125.0
158.5
192.1
210.6
212.4
209.8
233.1
259.5
258.3

9.1
10.0
11.2
11.5
11.7
12.2
14.0
17.3
20.2
21.8

91.0
115.0
147.3
180.7
198.9
200.2
195.8
215.7
239.3
236.5

10.1
11.3
11.8
12.8
14.2
15.5
17.1
18.4
20.1
21.3

.4
.5
.5
.5
.5
.5
.5
.6
.7

1.1
.6
-.8
-1.8
2.7
4.1
1.5
-1.6

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

286.5
330.8
348.0
366.8
366.8
400.0
421.7
444.0
449.7
487.9

23.5
27.2
29.3
31.0
32.7
34.8
38.7
41.7
43.5
44.9

263.0
303.6
318.7
335.8
334.1
365.3
383.0
402.3
406.2
443.0

23.4
25.3
27.7
29.7
29.6
32.2
35.1
37.5
38.7
41.8

.9
1.0
1.2
1.1
1.2
1.4
1.5
1.6
1.8

1.3
3.2
1.7
2.3
2.0
1.3
-2.1
-1.2
.2
-1.3

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

506.5
524.6
565.0
596.7
637.7
691.1
756.0
799.6
873.4
944.0

46.3
47.5
49.0
50.6
52.9
56.0
60.7
65.9
72.1
80.0

460.2
477.0
516.1
546.1
584.8
635.0
695.3
733.7
801.3
864.0

45.4
48.0
51.6
54.6
58.8
62.6
65.3
70.2
78.9
86.6

2.0
2.0
2.1
2.4
2.7
2.8
3.0
3.1
3.4
3.9

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

992.7
1,077.6
1,185.9
1,326.4
1,434.2
1,549.2
1,718.0
1,918.3
2,163.9
2,417.8

88.1
96.5
106.4
116.5
136.0
159.3
175.0
195.2
222.5
256.0

904.7
981.1
1,079.5
1,209.9
1,298.2
1,389.9
1,543.0
1,723.2
1,941.4
2,161.7

94.3
103.7
111.5
120.9
129.1
140.1
151.7
165.7
178.2
189.6

4.1
4.4
4.9
5.5
5.8
7.4
7.9
8.6
9.3
10.3

-1.5
4.1
3.3
.8
3.7
5.5
5.1
1.4
=2.6

2.9
2.6
3.8
3.4
1.1
2.4
1.0
3.1
3.7
3.4

1980
1981
1982
1983 " .
.

2,631.7
2,954.1
3,073.0
3,309.5

293.2
329.5
359.2
377.4

2,338.5
2,624.6
2,713.8
2,932.1

213.4
250.0
258.3
285.8

11.7
12.9
14.1
15.5

2.3
-4.9
.5

5.5
6.4
9.5
16.3

1981:
I
I
I
Ill
IV

2,866.6
2,912.5
3,004.9
3,032.2

314.8
324.2
334.4
344.6

2,551.7
2,588.4
2,670.5
2,687.6

244.0
249.1
252.4
254.3

12.5
12.8
131
13.4

5.1
-4.2
-12.0
-8.5

5.6
6.5
6.4
7.2

1982:
I
I
I
Ill
IV

3,021.4
3,070.2
3,090.7
3,109.6

349.3
356.1
363.0
368.3

2,672.1
2,714.1
2,727.7
2,741.3

252.6
256.0
259.9
264.8

13.7
14.0
14.3
14.7

-6.7
1.7
2.5
4.2

7.2
6.4
8.0
16.6

1983:
I
I
I
Ill
IV ".
,.

3,171.5
3,272.0
3,362.2
3,432.0

370.8
373.3
381.7
383.6

2,800.7
2,898.7
2,980.5
3,048.4

270.6
285.8
291.1
295.7

15.0
15.3
15.7
16.1

-1.2
-3.5
2.5

12.3
11.8
15.8
25.2

Source: Department of Commerce, Bureau of Economic Analysts.




242

l.A

-2.4
-.1
17
-L2
1.4
-.3
-19

.4
.1
.1
'.B
.7
.9
-.2
-.3
.1
-.1
-.5
-.0
.7
.7
1.1
.1
.4
1.7
1.8
1.1
1.7
1.6
2.5
1.6
1.4
1.9

TABLE B-20.—Relation of national income and personal income, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Less:

Equals:

Plus:

Corporate
profits
with
Year or quarter

National
income

GovernWage
ment
Contribu- accruals
valuation
transfer Personal Personal Business Personal
tions for
Net
and
less
transfer
payments interest dividend payments income
social
interest
capital
income income
insurance disburseto
consumpments
persons
tion
adjustments

inventory

84.8
39.9
71.4

9.0
-1.7
5.3

4.7
4.1
3.6

0.2
.3
2.1

0.0
.0
.0

0.9
1.5
2.5

6.9
5.5
5.4

5.8
2.0
3.8

0.6
.7
.5

85.0
47.0
72.4

1940....
1941....
1942....
1943....
1944....
1945....
1946....
1947....
1948....
1949....

79.7
102.7
135.9
169.3
182.1
180.7
178.6
194.9
219.9
213.6

8.6
14.1
19.3
23.5
23.6
19.0
16.6
22.3
29.4
27.1

3.3
3.3
3.1
2.7
2.4
2.2
1.8
2.3
2.4
2.7

2.3
2.8
3.5
4.5
5.2
6.1
6.1
5.8
5.4
5.9

.0
.0
.0
.2
-.2
.0
-.0
.0
.0
-.0

2.7
2.6
2.7
2.5
3.1
5.6
10.8
11.2
10.6
11.7

5.3
5.3
5.2
5.1
5,2
5.9
6.6
7.6
8.1
8.7

4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2

.4
.5

77.9
95.4
122.6
150.8
164.5
170.0
177.6
190.1
209.0
206.4

1950....
1951....
1952....
1953....
1954....
1955....
1956....
1957....
1958....
1959....

237.6
274.1
287.9
302.1
301.1
330.5
349.4
365.2
366.9
400.8

33.9
38.7
36.1
36.3
35.2
45.5
43.7
43.3
38.5
49.6

3.0
3.5
4.0
4.4
5.3
5.9
6.6
7.9
9.6
10.3

7.1
8.5
9.0
9.1
10.1
11.5
12.9
14.9
15.2
18.0

.0
.1
-.0
_.l
.0
.0
.0
.0
.0
.0

14.4
11.6
12.1
12.9
15.1
16.2
17.3
20.1
24.3
25.2

9.7
10.5
11.2
12.5
13.7
14.9
16.7
18.8
20.3
22.5

8.8
8.5
8.5
8.8
9.1
10.3
11.1
11.5
11.3
12.2

.8
.9
1.0
1.2
1.1
1.2
1.4
1.5
1.6
1.8

227.2
254.9
271.8
287.7
289.6
310.3
332.6
351.0
361.1
384.4

I960....
1961....
1962....
1963....
1964....
1965....
1966....
1967....
1968....
1969....

415.7
428.8
462.0
488.5
524.9
572.4
628.1
662.2
722.5
779.3

47.6
48.6
56.6
62.1
69.2
80.0
85.1
82.4
89.1
85.1

11.4
13.0
14.7
16.4
18.3
21.0
24.4
27.6
30.0
34.8

21.1
21.9
24.3
27.3
28.7
30.0
38.8
43.4
47.9
55.0

.0
.0
.0
.0
.0
.0
.0
.0
.0
.0

27.0
30.8
31.6
33.4
34.8
37.6
41.6
49.5
56.4
62.8

25.0
26.4
29.0
32.2
35.6
39.7
44.4
48.3
53.4
61.1

12.9
13.3
14.4
15.5
17.3
19.1
19.4
20.2
21.9
22.4

2.0
2.0
2.1
2.4
2.7
2.8
3.0
3.1
3.4
3.9

402.3
417.8
443.6
466.2
499.2
540.7
588.2
630.0
690.6
754.7

1970....
1971....
1972....
1973....
1974....
1975....
1976....
1977....
1978....
1979....

810.7
871.5
963.6
1,086.2
1,160.7
1,239.4
1,379.2
1,550.5
1,760.3
1,966.7

71.4
83.2
96.6
108.3
94.9
110.5
138.1
167.3
192.4
194.8

41.4
46.5
51.2
60.2
76.1
84.5
87.2
102.5
121.7
153.8

58.6
64.6
74.2
92.4
104.3
110.9
126.0
140.6
161.8
186.9

.0
.6
.0
-.1
.0
.0
.2
-.2

!o

76.1
90.0
99.8
114.0
135.4
170.9
186.4
199.3
214.6
240.0

69.4
74.8
80.9
93.9
112.4
123.2
132.5
152.8
179.4
218.7

22.2
22.6
24.1
26.5
29.1
29.9
36.5
39.6
45.3
50.8

4.1
4.4
4.9
5.5
5.8
7.4
7.9
8.6
9.3
10.3

811.1
868.4
951.4
1.065.2
1,168.6
1,265.0
1,391.2
1,540.4
1,732.7
1,951.2

1980
1981
1982
1983 *...,

2,116.6
2,373.0
2,450.4
2,646.9

175.4
192.3
164.8
226.3

192.6
249.9
261.1
247.2

203.7
237.0
253.0
272.3

-.0
.1
-.0
-.4

285.9
324.3
360.4
387.9

266.0
341.3
366.2
366.3

56.8
62.8
66.4
70.5

11.7
12.9
14.1
15.5

2,165.3
2,435.0
2,578.6
2,741.9

2,295.8
2,337.2
2,423.4
2,435.6

194.7
185.0
197.6
192.0

223.7
242.6
268.0
265.3

231.7
234.8
239.0
242.5

311.9
314.9
332.8
337.4

308.7
329.8
361.9
364.7

59.6
61.9
64.5
65.3

12.5
12.8
13.1
13.4

2,338.3
2,394.2
2,490.9
2,516.6

2,419.7
2,448.9
2,458.9
2,474.0

162.0
166.8
168.5
161.9

265.0
268.3
256.4
254.7

249.9
252.4
254.3
255.4

-.1
.0
.0
.0

340.9
350.3
366.1
384.3

364.9
371.9
364.8
363.1

65.6
65.6
66.4
67.9

13.7
14.0
14.3
14.7

2,528.1
2,563.2
2,591.3
2,632.0

2,528.5
2,612.8
2,686.9

181.8
218.2
248.4

248.3
243.8
246.1
250.4

265.4
270.1
274.4
279.1

.0
-1.3
-.4
.0

383.6
390.0
386.8
391.4

357.2
357.1
369.9
381.0

68.8
69.3
70.9
72.9

15.0
15.3
15.7
16.1

2,657.7
2,713.6
2,761.9
2,834.2

1929
1933
1939

1981:
It
Ill
IV
1982:
I
II....

.5
.5
.5
.6

1983:
III
IV P.

Source: Department of Commerce, Bureau of Economic Analysis.




243

TABLE B-21.—National income by type of income, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Compensation
of employees
Year or
quarter

National
income1
Total

Wages
and
salaries

Proprietors' income with inventory valuation and capital consumption
adjustments
Supplements
to
wages
and
salaries 2

Total

Total

Capital
Propri- consumpetors'
tion
income3 adjustment

Total

Inven- Capital
Propri- tory consumpetors' valuation
intion
come4 adjust- adjustment
ment

=0.2
-.0

14.3
15.0
18.7
32.8
26.5
24.6
19.1
19.1
26.3
31.9

6.3
2.6
4.5
4.5
6.5
10.3
12.2
12.2
12.7
15.2
15.7
18.2
13.5
14.4
16.9
16.0
13.9
13.3
12.2
12.1
12.1
14.1
11.9
12.6
12.9
13.0
12.8
11.5
13.8
14.9
13.5
13.7
15.7
15.6
16.4
20.4
34.6
29.0
28.0
22.8
23.3
31.3
37.8

-1.3
-1.4
-1.6
-1.8
=2.5
-3.4
-3.7
-4.3
-5.0
-5.9

35.5
36.5
37.6
38.5
41.7
43.8
46.4
48.6
51.3
52.5
51.9
54.4
58.1
61.0
62.2
65.4
75.0
84.8
92.2
100.2

117.4
120.2
109.0
128.6

21.8
30.5
21.5
21.0

28.9
38.4
29.9
29.4

-7.1
= 8.0
-8.4
-8.4

95.6
89.7
87.4
107.6

100.3

267.1
272.8
279.2
285.0

121.1
118.9
123.5
117.1

26.5
29.1
35.0
31.3

34.1
37.0
43.1
39.6

94.7
89.8
88.5
85.8

97.4
90.3

1,542.7
1,563.9
1,579.8
1,586.0

291.6
296.0
299.7
302.9

111.2
104.9
103.6
116.2

27.4
16.8
15.8
26.0

35.7
25.1
24.2
34.6

-8.2
-8.3
-8.4
-8.6

1,610.6
1,647.1
1,681.5
1,716.6

313.1
321.6
330.3
339.3

120.6
127.2
126.7
139.7

22.2
21.0
15.5
25.3

30.6
29.4
23.9
33.6

-8.4
-8.4
-8.4
-8.3

50.5
29.0
46.0

15.0
5.9
11.8
13.0
17.5
24.2
29.1
30.4
31.8
36.7
35.9
40.9
36.4
38.7
43.2
43.4
41.8
41.2
42.9
43.9
45.3
47.7
47.6

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974.
1975
1976
1977
1978
1979

84.8
39 9
71.4
79.7
102 7
135.9
169 3
182.1
180 7
178 6
194 9
219 9
213.6
237 6
2741
287.9
3021
301.1
330.5
349.4
365.2
366.9
400.8
415.7
428.8
462.0
488.5
524.9
572 4
628.1
662 2
722.5
779.3
810.7
8715
963.6
1,086.2
1,160.7
1,239.4
1,379.2
1,550.5
1,760.3
1,966.7

51.1
29.5
48.1
52.1
64.8
85.3
109.5
121.2
123.1
118.1
129.2
141.4
141.3

49.9
62.1
82.1
105.8
116.7
117.5
112.0
123.1
135.5
134.7

2.3
2.7
3.2
3.8
4.5
5.6
6.0
6.1
5.9
6.6

154.8
181.0
195.7
209.6
208.4
224.9
243.5
256.5
258.2
279.6
294.9
303.6
325.1
342.9
368.0
396.5
439.3
471.4
519.9
572.9
612.0
652.2
718.0
801.3
877.5
931.4
1,036.3
1,152.1
1,301.1
1,458.1

147.0
171.3
185.3
198.5
196.8
211.7
228.3
239.3
240.5
258.9
271.9
279.5
298.0
313.4
336.1
362.0
398.4
427.0
469.6
515.7
548.7
581.5
635.2
702.6
765.2
806.4
889.9
983.2
1,106.5
1,237.4

7.8
9.7
10.4
11.0
11.6
13.2
15.2
17.2
17.7
20.6
23.0
24.1
27.1
29.5
31.8
34.5
40.9
44.4
50.3
57.2
63.2
70.7
82.8
98.7
112.3
125.0
146.4
168.9
194.6
220.7

47.2
48.6
49.9
50.5
52.5
56.9
60.5
61.2
64.0
67.0
66.2
69.4
76.9
93.8
88.7
90.0
94.1
103.9
118.5
132.1

1980
1981
1982.
1983 "

2,116.6
2,373.0
2,450.4
2,646.9

1,599.6
1,769.2
1,865.7
1,990.1

1,356.6
1,493.2
1,568.1
1,664.0

243.0
276.0
297.6
326.1

I
l
l
I
V

2,295.8
2,337.2
2,423.4
2,435.6

1,718.8
1,750.9
1,791.7
1,815.6

1,451.7
1,478.1
1,512.6
1,530.6

1982:
1
|
|
Il
l
IV

2,419.7
2,448.9
2,458.9
2,474.0

1,834.2
1,859.9
1,879.5
1,889.0

2,528.5
2,612.8
2,686.9

1,923.7
1,968.7
2,011.8
2,056.0

1981:
I
II

Nonfarm

Farm

6.1
2.5
4.4
4.4
6.4
10.1
12.0
12.0
12.4
14.9
15.1
17.6
12.8
13.7
16.1
15.1
13.1
12.5
11.5
11.2
11.1
13.2
10.9
11.7
12.1
12.3
12.0
10.8
13.1
14.1
12.6
12.7
14.6

~'.S
-.7

8.9
3.3
7.4
8.6
11.1
14.1
17.1
18.4
19.4
21.8
20.8
23.3
23.6

.9
-.9
-.9
-1.0

25.0
27.2
28.2
28.6
28.7
31.4
32.7
34.2
34.5
36.7

.1

-3

-.9
-.7
-.7
~'.B
-.9
-1.0
-1.2

3.9
7.6
8.6
11.7
14.4
17.1
18.3
19.3
23.3
21.8
23.1
22.2
25.1
26.4
26.9
27.6
27.6
30.5
31.8
33.1
33.2
35.3
34.2
35.3
36.4
37.2
40.2
42.7
45.3
47.5
50.6
51.9
51.7
54.5
58.1
62.3
65.8
67.4
77.1
86.8
94.9
103.2

97.3

0.1
-.5
-.2
-.0
-.6
-.4
— 2

-il
-.1
-1.7
-1.5
-.4
.5
-1.1
-.3
.2
—2
-.0
—2
= !5
= .3
= .1
=-.0
.0
.0
-.0
-.0
_ i
-'.2
= .2
= .2
-.4
-.5
-.5
=.6
-.7
-2.0
-3.7
-1.2
-1.2
-1.2
-2.0
-2.9
-3.1
-1.5
-.6
-.9

84.7

-2.6
-1.4
-1.2
-1.0

83.7
88.1
87.8
90.2

85.3
84.5
86.0

-.1
= .8
-.7
-.8

98.4
106.2
111.2
114.4

91.0
96.8
100.6
100.9

— 2
-LI
-1.5
-.6

1983:
II. ..
Ill
IV »

1
National income is the total net income earned in production. It differs from gross national product mainly in that it excludes
depreciation charges and other allowances for business and institutional consumption of durable capital goods and indirect business
taxes. See Table B-19.
2
Employer contributions for social insurance and to private pension, health, and welfare funds; workers' compensation; directors'
fees; and a few other minor items.
See next page for continuation of table.




244

TABLE B-21.—National income by type of income, 1929-83—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Rental income of persons

Year or quarter

Corporate profits with inventory valuation and capital consumption adjustments

adjustment

Profits with inventory valuation adjustment and without
capital consumption adjustment

Rental Capital Total
conTotal income sumption
of
adjustpersons ment

Capital
Net
Invencontory sumption interest
Profits after tax
valua- adjustProfits Profits
tion
ment
before tax
Divi- Undistaxes liability Total dends tributed adjustment
profits
Profits

Total

1929
1933
1939

4.9
2.2
2.6

5.7
2.3
3.1

08
-.1
6

9.0
-1.7
5.3

10.5
-1.2
6.5

10.0
1.0
7.2

1.4
.5

8.6
.4
5.7

5.8
2.0
3.8

2.8
-1.6
2.0

0.5
-2.1
—7

14
-.6
-1.1

4.7
4.1
3.6

1940
1941
1942
1943
1944
1945
1946
1947...
1948
1949

2.7
3.1
4.0
4.4
4.5
4.6
5.5
5.3
5.7
6.1

3.3
3.9
5.0
5.6
5.9
6.2
7.3
7.7
8.5
8.9

-.6
_8
-1.0
-12
-1.4
-16
-1.8
-2.5
-2.8
28

8.6
141
19.3
23 5
23.6
190
16.6
22.3
29.4
27.1

9.8
154
20.5
24 5
24.0
19 3
19.6
25.9
33.4
31.1

10.0
17.9
21.7
253
24.2
19 8
24.8
31.8
35.6
29.2

2.8
7.6
11.4
14.1
12.9
10.7
9.1
11.3
12.4
10.2

7.2
10.3
10.3
11.2
11.3
9.1
15.7
20.5
23.2
19.0

4.0
44
4.3
44
4.6
46
5.6
6.3
7.0
7.2

3.2
58
6.0
67
6.7
45
10.2
14.2
16.2
11.8.

-.2
-2 5
-1.2
-8
3
-6
53
-5.9
-2.2
1.9

-1.2
-13
-1.2
-10
_*2
-3.0
-3.6
-4.0
-3.9

3.3
33
3.1
27
2.4
22
1.8
2.3
2.4
2.7

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

7.1
7.7
8.8
10.0
11.0
11.3
116
12.2
12.9
13.6

10.0
11.0
12.2
13.4
14.4
14.8
15 2
15.9
16.7
17.4

-2.9
-33
34
-34
33
-3.5
36
-3.6
38
-3.8

33.9
38 7
36.1
36 3
35.2
45.5
43 7
43.3
38 5
49.6

37.9
43.3
40.6
40.2
38.4
47.5
46 9
46.6
416
52.3

42.9
44.5
39.6
41.2
38.7
49.2
49 6
48.1
419
52.6

17.9
22.6
19.4
20.3
17.6
22.0
22 0
21.4
19 0
23.6

25.0
21.9
20.2
20.9
21.1
27.2
27 6
26.7
22.9
28.9

8.8
85
8.5
88
9.1
10.3
111
11.5
113
12.2

16.2
13 4
11.8
121
11.9
16.9
16 6
15.2
116
16.7

50
-1.2
1.0
-1.0
3
-1.7
27
15
_3
3

-4.0
-4.6
-4.5
-3.9
-3.2
-2.0
32
34
-3.2
27

3.0
3.5
4.0
4.4
5.3
5.9
66
7.9
9.6
10.3

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

14 5
15.0
15.8
16.5
17.1
18.0
18.7
19 7
19.5
19.6

18 0
18.4
19.1
19.7
20.2
21.2
22.3
23 6
24.0
25.2

49 8
49.7
55 0
59.6
66.5
77.2
83.0
79 7
88.5
86.7

22 7
22.8
24 0
26.2
28.0
30.9
33.7
32 5
39.2
39.5

27 1
26.9
311
33.4
38.5
46.3
49.4
47 2
49.4
47.2

12 9
13.3
14 4
15.5
17.3
19.1
19.4
20 2
22.0
22.5

14 3
13.6
16 6
17.9
21.2
27.2
29.9
27 0
27.3
24.7

_2
.3
0
.1
-.5
-1.2
-2.1
-1.6
-3.7
-5.9

-2.0
14
1.5
2.5
3.1
4.0
4.2
4.3
4.3
4.3

11.4
13.0
14.7
16.4
18.3
21.0
24.4
27.6
30.0
34.8

19.7
20.2
21.0
22 6
23.5
23.0
23.5
24 8
26 6
27.9

25.8
27.1
29.0
321
35.3
36.8
39.2
440
50 0
56.2

47 6
48.6
56 6
62.1
69.2
80.0
85.1
82 4
89.1
85.1
71.4
83.2
96.6
108 3
94.9
110.5
1381
167 3
192 4
194.8

49 7
50.0
551
59.7
66.0
76.0
80.9
781
84.9
80.8

1970
1971
1972
1973
1974
1975
1976
1977...
1978
1979

35
-3.4
34
-3.2
-3.2
-3.3
-3.6
39
-4.5
56
-6.1
-6.9
80
95
-11.8
-13.8
15 6
191
23 4
-28.3

68.9
82.0
94.0
105 6
96.7
120.6
1516
178 5
205 1
209.6

75.4
86.6
100.6
125 6
136.7
132.1
166 3
194 7
2291
252.7

34.2
37.5
41.6
49 0
51.6
50.6
63 8
111
83 2
87.6

41.3
49.0
58.9
76 6
85.1
81.5
102.5
122 0
145 9
165.1

22.5
22.9
24.4
27 0
29.9
30.8
37 4
40 8
47 0
52.7

18.8
26.1
34.5
49 6
55.2
50.7
65.1
812
98 9
112.4

-6.6
-4.6
-6.6
-20.0
-40.0
-11.6
-14.7
-16.2
-24.0
-43.1

2.5
1.3
2.7
2.7
-1.8
-10.1
-13.5
-11.3
-12.7
-14.8

41.4
46.5
51.2
60.2
76.1
84.5
87.2
102.5
121.7
153.8

1980
1981
1982
1983 '

31.5
414
49 9
54.8

63.9
77 0
86 3
93.4

-32.4
35 6
36 5
-38.6

175.4
192 3
164 8
226.3

191.7
203 3
165 9
195.5

234.6
227 0
174 2
205.3

84.8
82 8
59 2
75.7

149.8
144.1
1151
129.6

58.6
64 7
68 7
73.3

91.2
79.5
46 4
56.3

-42.9
-23.6
-8.4
-9.8

-16.3
-11.0
-1.1
30.8

192.6
249.9
261.1
247.2

37.4
39.9
42 7
45.6

71.7
74.8
78 7
82.6

34 3
-34.9
36 0
-37.1

194 7
185.0
197 6
192.0

207 1
196.4
208 3
201.5

243.9
219.0
227 7
217.2

91.7
80.4
83 7
75.6

152.2
138.6
144 0
141.7

61.3
63.7
66 4
67.3

90.9
74.9
77 6
74.4

-36.7
-22.6
-19.4
-15.7

-12.4
-11.4
-10.7
-9.5

223.7
242.6
268.0
265.3

II
III
IV

47 4
49 0
50 9
52.3

84 7
85 7
87 6
87.4

37 3
36 7
36 7
-35.2

162 0
166 8
168 5
161.9

167 7
170 3
168 3
157.2

173 2
178 8
177 3
167.5

60.3
61.4
60 8
54.0

112.9
117.4
116.5
113.5

67 7
67 8
68 8
70.4

45.2
49.5
47 7
43.1

-5.5
-8.5
-9.0
-10.3

-5.6
-3.5
.1
4.7

265.0
268.3
256.4
254.7

1983:
|
U
Ill
IV

541
54.8
53.9
56.2

916
92.2
94.0
95.7

37 5
-37.4
-40.0
-39.4

1818
218.2
248.4

168 0
192.7
210.8

169 7
203.3
229.1

61.5
76.0
84.9

108.2
127.2
144.1

714
72.0
73.7
75.9

36.7
55.2
70.4

-1.7
-10.6
-18.3
-8.5

13.9
25.6
37.6
46.3

248.3
243.8
246.1
250.4

1981:
1....
)||"
IV
1982:

!."....

3

With inventory valuation adjustment and without capital consumption adjustment.
Without inventory valuation and capital consumption adjustments.
Source: Department of Commerce, Bureau of Economic Analysis.
4




245

TABLE B-22.—Sources of personal income, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Wage and salary disbursements1

Year or quarter

Personal
income

Commodityproducing
industries
Total
Total

GovernDistrib- Service ment
and
utive
indus- indus- government
tries
Manutries
enterfacturing
prises

Other
labor

Proprietors' income
with inventory
valuation and
capital
consumption
adjustments
Farm

1929...
1933...
1939...

85.0
47.0
72.4

50.5
29.0
46.0

21.5
9.8
17.4

16.1
7.8
13.6

15.6
8.8
13.3

8.4
5.2
7.1

5.0
5.2
8.2

0.5
.4
.6

6.1
2.5
4.4

1940...
1941...
1942...
1943...
1944...
1945...
1946...
1947...
1948...
1949...

77.9
95.4
122.6
150.8
164.5
170.0
177.6
190.1
209.0
206.4

49.9
62.1
82.1
105.6
116.9
117.5
112.0
123.1
135.5
134.8

19.7
27.5
39.1
49.0
50.4
45.9
46.0
54.2
61.1
57.8

15.6
21.7
30.9
40.9
42.9
38.2
36.5
42.5
47.1
44.6

14.2
16.3
18.0
20.1
22.7
24.8
31.0
35.2
37.5
37.7

7.5
8.1
9.0
9.9
10.9
11.9
14.3
16.1
17.9
18.5

8.5
10.2
16.0
26.6
33.0
34.9
20.7
17.5
19.0
20.8

.6
.7
.9
1.1
1.5
1.8
2.0
2.4
2.7
2.9

4.4
6.4
10.1
12.0
12.0
12.4
14.9
15.1
17.6
12.8

1950...
1951...
1952...
1953...
1954...
1955...
1956...
1957...
1958...
1959...

227.2
254.9
271.8
287.7
289.6
310.3
332.6
351.0
361.1
384.4

147.0
171.3
185.4
198.6
196.8
211.7
228.3
239.3
240.5
258.9

64.8
76.3
82.0
89.6
85.7
93.1
100.6
104.2
100.0
109.6

50.3
59.3
64.1
71.2
67.5
73.8
79.4
82.4
78.6
86.8

39.8
44.3
46.9
49.7
50.1
53.4
57J
60.5
60.8
64.8

19.8
21.5
23.1
24.9
26.1
28.6
31.3
33.6
35.6
38.5

22.6
29.2
33.3
34.4
34.9
36.6
38.8
41.0
44.1
46.0

3.7
4.6
5.2
5.9
6.1
7.0
8.0
9.0
9.4
10.6

13.7
16.1
15.1
13.1
12.5
11.5
11.2
11.1
13.2
10.9

1960...
1961...
1962...
1963...
1964,..
1965...
1966...
1967...
1968...
1969...

402.3
417.8
443.6
466.2
499.2
540.7
588.2
630.0
690.6
754.7

271.9
279.5
298.0
313.4
336.1
362.0
398.4
427.0
469.6
515.7

113.1
113.7
121.8
126.9
135.4
146.0
161.0
168.3
183.4
199.6

89.7
89.8
96.7
100.6
107.1
115.5
128.0
134.1
145.8
157.5

68.2
69.3
72.8
76.3
81.4
87.2
94.4
100.9
110.0
120.8

41.4
44.1
47.2
50.2
54.4
58.9
64.7
71.3
79.6
89.7

49.2
52.4
56.3
60.0
64.9
69.9
78.3
86.4
96.6
105.5

11.2
11.8
13.0
14.0
15.7
17.8
19.9
21.7
25.2
28.5

11.7
12.1
12.3
12.0
10.8
13.1
14.1
12.6
12.7
14.6

1970...
1971...
1972...
1973...
1974...
1975...
1976...
1977...
1978...
1979...

811.1
868.4
951.4
1,065.2
1,168.6
1,265.0
1,391.2
1,540.4
1,732.7
1,951.2

548.7
580.9
635.2
702.7
765.7
806.4
889.9
983.2
1,106.3
1,237.6

203.0
208.3
227.3
254.3
274.7
275.0
307.3
343.6
389.4
438.4

158.2
160.3
175.4
196.2
211.4
211.0
237.4
266.0
299.2
333.9

130.3
139.4
152.1
168.3
184.6
195.6
216.6
239.5
270.7
303.4

98.3
106.7
118.2
131.3
145.6
159.7
177.4
197.7
226.6
259.7

117.1
126.5
137.5
148.7
160.9
176.1
188.7
202.4
219.5
236.2

32.5
36.7
43.0
48.8
55.8
64.5
75.9
89.4
102.5
114.9

14.3
15.0
18.7
32.8
26.5
24.6
19.1
19.1
26.3
31.9

1980...
1981...
1982...
1983 ».

2,165.3
2,435.0
2,578.6
2,741.9

1,356.7
1,493.2
1,568.1
1,664.4

468.1
509.5
509.2
529.6

354.6
385.3
383.8
402.7

330.7
361.6
378.8
397.2

297.6
337.7
374.1
411.5

260.3
284.4
306.0
326.1

128.0
143.5
156.6
173.4

21.8
30.5
21.5
21.0

1981:
I
II
III....
IV....

2,338.3
2,394.2
2,490.9
2,516.6

1,451.7
1,478.1
1,512.3
1,530.6

497.5
506.9
518.2
515.5

375.9
386.1
391.6
387.5

351.5
359.4
366.9
368.4

325.3
331.1
342.1
352.4

277.4
280.8
285.1
294.2

137.6
141.5
145.7
149.4

26.5
29.1
35.0
31.3

1982:
I
II
III....
IV....

2,528.1
2,563.2
2,591.3
2,632.0

1,542.8
1,563.8
1,579.8
1,586.0

514.8
513.7
508.9
499.5

386.2
386.8
384.8
377.4

371.6
378.1
381.9
383.5

357.6
369.1
381.2
388.5

298.7
303.0
307.7
314.5

152.4
155.4
158.2
160.4

27.4
16.8
15.8
26.0

1983:
I
II
III....
IV »..

2,657.7
2,713.6
2,761.9
2,834.2

1,610.7
1,648.4
1,681.9
1,716.7

508.6
522.2
537.8
549.8

385.4
397.4
409.2
418.6

386.4
394.3
398.9
409.2

396.4
407.3
416.4
425.9

319.2
324.6
328.8
331.8

164.3
170.1
176.4
182.7

22.2
21.0
15.5
25.3

1
The total of wage and salary disbursements and other labor income differs from compensation of employees in Table B-21 in that it
excludes employer contributions for social insurance and the excess of wage accruals over wage disbursements.
See next page for continuation of table.




246

TABLE B-22.—Sources of personal income, 1929-83—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Year or quarter

Rental
income
of
persons Personal Personal
with dividend interest
capital income income
Total
conadjustment

Transfer payments
Old-age,
Governsurvivors, Government
ment
disability, unememployand
ployment Veterans ees
health
insur- benefits retireinsurance
ment
ance
benefits
benefits benefits

1929
1933
1939

4.9
2.2
2.6

5.8
2.0
3.8

6.9
5.5
5.4

1.5
2.1
3.0

0.0

0.4

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

2.7
3.1
4.0
4.4
4.5
4.6
5.5
5.3
5.7
6.1

4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2

5.3
5.3
5.2
5.1
5.2
5.9
6.6
7.6
8.1
8.7

3.1
3.1
3.1
3.0
3.6
6.2
11.3
11.7
11.3
12.5

.0
.1
.1
.2
.2
.3
.4
.5
.6
.7

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

7.1
77
8.8
10.0
11.0
11.3
11.6
12.2
12.9
13.6

8.5
8.5
8.8
9.1
10.3
11.1
11.5
11.3
12.2

9.7
10.5
11.2
12.5
13.7
14.9
16.7
18.8
20.3
22.5

15.2
12.6
13.1
14.1
16.2
17.5
18.7
21.6
25.9
27.0

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983 "

14.5
15.0
15.8
16.5
17.1
18.0
18.7
19.7
19.5
19.6
19.7
20.2
21.0
22.6
23.5
23.0
23.5
24.8
26.6
27.9

12.9
13.3
14.4
15.5
17.3
19.1
19.4
20.2
21.9
22.4
22 2
22.6
24.1
26.5
29.1
29.9
36.5
39.6
45.3
50.8

25.0
26.4
29.0
32.2
35.6
39.7
44.4
48.3
53.4
61.1

28.9
32.8
33.8
35.8
37.4
40.4
44.7
52.6
59.8
66.7

69.4
74.8
80.9
93.9
112.4
123.2
132.5
152.8
179.4
218.7

31.5
41.4
49.9
54.8

56.8
62.8
66.4
70.5

37.4
39.9
42.7
45.6

0.6

0.1

.5

.5

.3

!4
.1
.1
.4
1.1
.8
.9
1.9

'.5
LO
3.0
7.0
7.0
5.9
5.3

'.3
.4
.4
.5

1.7
1.8
1.8
1.8
2.0
2.0
2.1

1.0
1.9
2.2
3.0
3.6
4.9
5.7
7.3
8.5
10.2

1.5
.9
1.1
1.0
2.2
1.5
1.5
1.9
4.1
2.8

7.7
4.6
4.3
4.1
4.2
4.4
4.4
4.5
4.7
4.6

1.0
1.1
1.2
1.4
1.5
1.7
1.9
2.2
2.5
2.8

80.1
94.4
104.7
119.5
141.2
178.3
194.3
207.9
223.8
250.3

11.1
12.6
14.3
15.2
16.0
18.1
20.8
25.5
30.2
32.9
38.5
44.5
49.6
60.4
70.1
81.4
92.9
104.9
116.2
131.8

3.0
4.3
3.1
3.0
2.7
2.3
1.9
2.2
2.1
2.2
4.0
5.8
5.7
4.4
6.8
17.6
15.8
12.7
9.7
9.8

4.6
5.0
4.7
4.8
4.7
4.9
4.9
5.6
5.9
6.7
7.7
8.8
9.7
10.4
11,8
14.5
14.4
13.8
13.9
14.4

3.1
3.4
3.7
4.2
4.7
5.2
6.1
6.9
7.6
8.7
10.2
11.8
13.8
16.0
19.0

266.0
341.3
366.2
366.3

297.6
337.2
374.5
403.5

154.2
182.0
204.5
222.8

16.1
15.6
24.8
25.5

15.0
16.1
16.4
16.7

29!0
32.7
36.9
43.0
49.3
54.2
58.5

59.6
61.9
64.5
65.3

308.7
329.8
361.9
364.7

324.4
327.7
345.9
350.7

171.0
173.4
190.5
192.8

16.1
15.0
14.4
16.8

16.0
15.9
16.0
16.4

47.4
49.0
50.9
52.3

65.6
65.6
66.4
67.9

364.9
371.9
364.8
363.1

354.6
364.2
380.4
399.0

195.0
197.3
209.3
216.5

19.0
23.2
24.9
32.2

\\.ZZZ
III p
IV

54.1
54.8
53.9
56.2

68.8
69.3
70.9
72.9

357.2
357.1
369.9
381.0

398.5
405.3
402.6
407.5

217.4
221.1
223.8
229.0

29.0
30.0
22.6
20.6

Less:
Persona!
contribu- Nonfarm
tions for personal
income2
social
insurance

0.8
1.4
1.7

2.5
2.9
3.3

1.2
1.8
2.2
2.3
2.0
2.1
2.2
2.2

159.9
171.9
188.2
190.4

3.5
3.6
3.8
4.1
4.1
4.3
4.5
4.9
5.3
5.8

2.9
3.4
3.8
4.0
4.6
5.2
5.8
6.7
6.9
7.9

210.2
235.4
253.1
271.3
- 273.9
295.5
318.0
336.6
344.4
369.8

1.0
1.1
1.3
1.4
1.5
1.7
1.9
2.3
2.8
3.5
4.8
6.2
6.9
7.2
7.9
9.2
10.1
10.6
10.7
11.0

6.2
6.4
6.7
7.3
7.8
8.3
9.2
10.2
11.1
12.5
15.0
17.4
19.0
21.1
25.6
32.8
35.1
36.9
40.7
46.3

9.3
9.7
10.3
11.8
12.6
13.3
17.8
20.6
22.9
26.2
27.9
30.7
34.5
42.6
47.9
50.4
55.5
61.1
69.8
81.1

386.7
401.6
427.1
449.7
483.7
522.6
568.9
611.9
672.1
733.9
790.0

12.4
13.5
13.4
14.3

56.9
60.8
61.2
65.6

88.7
104.6
112.0
119.5

925.3
1,023.7
1,131.8
1,229.1
1,359.3
1,506.5
1,689.7
1,899.3
2,119.5
2,377.0
2,527.6
2,691.2

47.4
49.2
49.8
50.9

13.3
13.5
13.6
13.5

60.6
60.6
61.6
60.3

102.2
103.6
105.6
106.8

2,285.8
2,337.9
2,427.9
2,456.6

16.4
16.2
16.3
16.6

51.5
54.5
55.1
55.8

13.3
13.4
13.3
13.5

59.4
59.7
61.6
64.3

110.7
111.7
112.7
112.9

2,471.3
2,516.8
2,546.0
2,576.5

16.9
16.6
16.6
16.5

56.6
58.3
59.3
59.7

14.1
14.4
14.3
14.5

64.5
64.9
66.0
67.1

116.5
118.6
120.5
122.5

2,606.1
2,663.3
2,716.6
2,779.0

1981:

II
llj
IV
1982:
I
IJ
lit
IV
1983:

Aid to
families
with
depend- Other
ent
children
(AFDC)

2

7
.7
.9

846.5

Personal income exclusive of farm proprietors' income, farm wages, farm other labor income, and farm net interest.
Note.—The industry classification of wage and salary disbursements and proprietors' income is on an establishment basis and is
based on the 1972 Standard Industrial Classification (SIC) beginning 1948 and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau of Economic Analysis.




247

TABLE B-25.—Disposition of personal income, 1929-83
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Less: Personal outlays

Year or quarter

Personal
income

Less:
Equals:
Personal Dispostax and
able
nontax personal
payments income

Total

Personal Interest
paid by
consumption consumexpendi- ers to
busitures
ness

LO
1.4
1.7

.2
.2
.1
.2
.4
.5
.7
.7
.7
.5

3.4
10.3
27.2
32.9
36.6
28.7
13.7
5.2
11.1
7.5

35.5
88.8
76.7
75.3
74.8
80.8
91.4
96.9
94.1
96.0

94.2
87.6
76.0
74.7
74.3
80.1
90.5
95.9
93.0
94.8

192.0
207.1
217.1
229.7
235.8
253.7
266.0
280.4
289.5
310.8

2.3
2.5
2.9
3.6
3.8
4.4
5.1
5.5
5.6
6.1

.4
.4
.4
.5
.5
.4
.5
.5
.4
.4

11.9
16.1
17.4
18.5
17.0
16.4
21.3
22.3
23.6
21.1

94.2
92.9
92.7
92.7
93.4
94.0
92.7
92.8
92.6
93.8

92.9
91.6
91.3
91.1
91.7
92.3
90.8
90.9
90.7
91.8

332.3
342.7
363.5
384.0
411.0
442.1
477.7
503.6
551.5
598.3

324.9
335.0
355.2
374.6
400.5
430.4
465.1
490.3
536.9
581.8

7.0
7.3
7.8
8.8
9.9
11.1
12.0
12.5
13.8
15.6

.4
.4
.5
.6
.6
.7
.7
.9
.8
.9

19.7
23.0
23.3
21.9
29.6
33.7
36.0
44.3
41.9
40.6

94.4
93.7
94.0
94.6
93.3
92.9
93.0
91.9
92.9
93.6

92.3
91.6
91.8
92.3
90.9
90.5
90.5
89.5
90.5
91.1

695.3
751.8
810.3
914.5
998.3
1,096.1
1,194.4
1,314.0
1,474.0
1,650.2

639.5
691.1
757.7
835.5
913.2
1,001.8
1,111.9
1,236.0
1,384.6
•1,553.5

621.7
672.2
737.1
812.0
888.1
976.4
1,084.3
1,204.4
1,346.5
1,507.2

16.7
17.7
19.5
22.3
24.1
24.4
26.7
30.7
37.4
45.5

1.1
1.1
1.1
1.3
1.0
.9
.9
.9

55.8
60.7
52.6
79.0
85.1
94.3
82.5
78.0
89.4
96.7

92.0
91.9
93.5
91.4
91.5
91.4
93.1
94.1
93.9
94.1

89.4
89.4
91.0
88.8
89.0
89.1
90.8
91.7
91.3
91.3

336.5
387.4
402.1
406.3

1,828.9
2,047.6
2,176.5
2,335.6

1,718.7
1,912.4
2,051.1
2,222.5

1,668.1
1,857.2
1,991.9
2,158.6

49.6
54.3
58.1
62.7

110.2
135.3
125.4
113.1

94.0
93.4
94.2
95.2

91.2
90.7
91.5
92.4

2,338.3
2,394.2
2,490.9
2,516.6

370.7
383.8
398.9
396.1

1,967.6
2,010.4
2,092.0
2,120.5

1,855.3
1,890.2
1,942.3
1,961.5

1,802.8
1,835.8
1,886.1
1,904.1

51.7
53.5
55.3
56.5

112.2
120.2
149.7
159.0

94.3
94.0
92.8
92.5

91.6
91.3
90.2
89.8

2,528.1
2,563.2
2,591.3
2,632.0

400.2
404.2
399.8
404.1

2,127.9
2,159.0
2,191.5
2,227.8

1,997.0
2,031.9
2,068.4
2,107.0

1,938.9
1,972.8
2,008.8
2,046,9

57.0
57.8
58.5
59.1

130.8
127.1
123.0
120.8

93.9
94.1
94.4
94.6

91.1
91.4
91.7
91.9

2,657.7
2,713.6
2,761.9
2,834.2

401.8
412.6
400.1
410.6

2,255.9
2,301.0
2,361.7
2,423.6

2,134.2
2,209.5
2,245.9
2,300.1

2,073.0
2,147.0
2,181,1
2,233.1

60.2
61.4
63.6
65.8

121.7
91.5
115.8
123.5

94.6
96.0
95.1
94.9

91.9
93.3
92.4
92.1

79.1
46.5
67.8

77.3
45.8
67.0

1940...
1941...
1942...
1943...
1944...
1945...
1946...
1947...
1948...
1949..

77.9
95.4
122.6
150.8
164.5
170.0
177.6
190.1
209.0
206.4

2.6
3.3
5.9
17.8
18.9
20.8
18.7
21.4
21.0
18.5

75.3
92.2
116.6
133.0
145.6
149.1
158.9
168.7
188.0
187.9

72.0
81.8
89.4
100.1
109.0
120.4
145.2
163.5
176.9
180.4

71.0
80.8
88.6
99.4
108.2
119.5
143.8
161.7
174.7
178.1

1950 .
1951 .
1952..
1953..
1954..
1955.
1956..
1957 .
1958.
1959

227.2
254.9
271.8
287.7
289.6
310.3
332.6
351.0
361.1
384.4

20.6
28.9
34.0
35.5
32.5
35.4
39.7
42.4
42.1
46.0

206.6
226.0
237.7
252.2
257.1
275.0
292.9
308.6
319.0
338.4

194.7
210.0
220.4
233.7
240.1
258.5
271.6
286.4
295.4
317.3

1960
1961
1962
1963....
1964....
1965....
19G6
1967
1968
1969

402.3
417.8
443.6
466.2
499.2
540.7
588.2
630.0
690.6
754.7

50.4
52.1
56.8
60.3
58.6
64.9
74.5
82.1
97.2
115.7

352.0
365.8
386.8
405.9
440.6
475.8
513.7
547.9
593.4
638.9

811.1
868.4
951.4
1,065.2
1,168.6
1,265.0
1,391.2
1,540.4
1,732.7
1,951.2

115.8
116.7
141.0
150.7
170.2
168.9
196.8
226.4
258.7
301.0

2,165.3
2,435.0
2,578.6
2,741.9

1982:
I
II ..
..

1983:
I
IV P....

Personal
consumption
expenditures
93.8
100.5
95.6

82.4
45.6
70.0

1981:
I

Total

96.0
102.0
96.9

2.6
1.4
2.4

1980
1981
1982
1983 *

Personal outlays

3.3
-0.9
2.2

85.0
47.0
72.4

:::
::;

Percent of disposable
personal income

0.3
.2
.2

1929...
1933...
1939...

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

Personal
transfer Equals:
payPersonal
ments
saving
to
foreigners
(net)

Source: Department of Commerce, Bureau of Economic Analysis.




248

.9
.7
.5
!5

TABLE B-24.—Total and per capita disposable personal income and personal consumption expenditures in
current and 1972 dollars, 1929-83
[Quarterly data at seasonally adjusted annual rates, except as noted]
Disposable personal income
Year or quarter

Total (billions of
dollars)

Personal consumption expenditures

Per capita
(dollars)
Current
dollars

1972
dollars

Total (billions of
dollars)
Current
dollars

1972
dollars

Per capita
(dollars)
Current
dollars

Population
(thousands) 1

Current
dollars

1S72
dollars

82.4
45.6
70.0

229.5
169.6
229.8

676
363
534

1,883
1349
1,754

77.3
45.8
67.0

215.1
170.5
219.8

634
364
511

1,765
1,356
1,678

121,878
125,690
131,028

75.3
92.2
116.6
133.0
145.6
149.1
158.9
168.7
188.0
187.9

244.0
277.9
317.5
332.1
343.6
338.1
332.7
318.8
335.8
336.8

570
691
865
973
1,052
1,066
1,124
1,170
1,282
1,259

1,847
2,083
2,354
2,429
2,483
2,416
2,353
2,212
2,290
2,257

71.0
80.8
88.6
99.4
108.2
119.5
143.8
161.7
174.7
178.1

229.9
243.6
241.1
248.2
255.2
270.9
301.0
305.8
312.2
319.3

537
605
657
727
781
854
1,017
1,122
1,192
1,194

1,740
1,826
1,788
1,815
1,844
1,936
2,129
2,122
2,129
2,140

132,122
133,402
134,860
136,739
138,397
139,928
141,389
144,126
146,631
149,188

206.6
226.0
237.7
252.2
257.1
275.0
292.9
308.6
319.0
338.4

362.8
372.6
383.2
399.1
403.2
426.8
446.2
455.5
460.7
479.7

1,362
1,465
1,515
1,581
1,583
1,664
1,741
1,802
1,832
1,911

2,392
2,415
2,441
2,501
2,483
2,582
2,653
2,660
2,645
2,709

192.0
207.1
217.1
229.7
235.8
253.7
266.0
280.4
289.5
310.8

337.3
341.6
350.1
363.4
370.0
394.1
405.4
413.8
418.0
440.4

1,266
1,342
1,383
1,439
1,452
1,535
1581
1,637
1,662
1,755

2,224
2,214
2,230
2,277
2,278
2,384
2,410
2,416
2,400
2,487

151,684
154,287
156,954
159,565
162,391
165,275
168,221
171,274
174,141
177,073

352.0
365.8
386.8
405.9
440.6
475.8
513.7
547.9
593.4
638.9

489.7
503.8
524.9
542.3
580.8
616.3
646.8
673.5
701.3
722.5

1,947
1,991
2,073
2,144
2,296
2,448
2,613
2,757
2,956
3,152

2,709
2,742
2,813
2,865
3,026
3,171
3,290
3,389
3,493
3,564

324.9
335.0
355.2
374.6
400.5
430.4
465.1
490.3
536.9
581.8

452.0
461.4
482.0
500.5
528.0
557.5
585.7
602.7
634.4
657.9

1,797
1,823
1,904
1,979
2,087
2,214
2,366
2,467
2,674
2,870

2,501
2,511
2,583
2,644
2,751
2,868
2,979
3,032
3,160
3,245

180,760
183,742
186,590
189,300
191,927
194,347
196,599
198,752
200,745
202,736

751.6
779.2
810.3
864.7
857.5
874.9
906.8
942.9
988.8
1,015.7

3,390
3,620
3,860
4,315
4,667
5,075
5,477
5,965
6,621
7,331

3,665
3,752
3,860
4,080
4,009
4,051
4,158
4,280
4,441
4,512

621.7
672.2
737.1
812.0
888.1
976.4
1,084.3
1,204.4
1,346.5
1,507.2

672.1
696.8
737.1
767.9
762.8
779.4
823.1
864.3
903.2
927.6

3,031
3,237
3,511
3,831
4,152
4,521
4,972
5,468
6,048
6,695

3,277
3,355
3,511
3,623
3,566
3,609
3,774
3,924
4,057
4,121

205,089
207,692
209,924
211,939
213,898
215,981
218,086
220,289
222,629
225,106

1,828.9
2,047.6
2,176.5
2,335.6

1,021.6
1,054.7
1,060.2
1,094.3

8,032
8,906
9,377
9,968

4,487
4,587
4,567
4,671

1,668.1
1,857.2
1,991.9
2,158.6

931.8
956.8
970.2
1,011.4

7,326
8,078
8,581
9,213

4,093
4,161
4,180
4,317

227,694
229,916
232,118
234,297

1,967.6
2,010.4
2,092.0
2,120.5

1,040.7
1,045.6
1,068.1
1,064.3

8,588
8,757
9,088
9,188

4,543
4,554
4,640
4,612

1,802.8
1,835.8
1,886.1
1,904.1

953.6
954.7
962.9
955.7

7,869
7,996
8,194
8,250

4,162
4,159
4,183
4,141

229,097
229,580
230,187
230,797

2t127.9
2,159.0
2,191.5
2,227.8

1,055.1
1,060.2
1,059.3
1,066.1

9,199
9,315
9,430
9,562

4,562
4,574
4,558
4,576

1,938.9
1,972.8
2,008.8
2,046.9

961.4
968.8
971.0
979.6

8,382
8,511
8,644
8,785

4,156
4,179
4,179
4,204

231,304
231,790
232,387
232,990

2,255.9
2,301.0
2,361.7
2,423.6

1,073.8
1,083.0
1,100.1
1,120.3

9,661
9,834
10,069
10,307

4,599
4,629
4,690
4,764

2,073.0
2,147.0
2,181.1
2,233.1

986.7
1,010.6
1,016.0
1,032.2

8,878
9,176
9,299
9,497

4,226
4,319
4,332
4,390

233,501
233,984
234,564
235,138

1972
dollars

1
Population of the United States including Armed Forces overseas; includes Alaska and Hawaii beginning 1960. Annual data are for
July 1 through 1958 and are averages of quarterly data beginning 1960. Quarterly data are averages for the period. Data beginning
1970 reflect results of the 1980 census of population.

. Source: Department of Commerce (Bureau of Economic Analysis and Bureau of the Census).




249

TABLE B-25.—Gross saving and investment, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Gross saving

Gross investment

Government surplus or
Capital
deficit ( - ) , national income grants
received
and product accounts
by the
Gross
Personal business
State United
saving saving*
States
Total
and
Federal
2
local (net)

Gross private saving
Year or
quarter

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983 »
1981:
I
II
Ill
IV
1982:
I
IV....
1983:
III
IV..

Total

Total

0.9
.7
.7
.0
«-2.0
.0
.0
.0
.0
1.1
1.2
1.1
.0
.0

0.8
16.2
.2
1.4
1.0
9.3
1.5
13.1
1.3
17.9
-.1
9.9
5.8 - 2 . 1
7.2 -2.0
10.6 - 1 . 3
4.9
30.7
9.3
34.0
2.4
45.9
35.3
.9
53.8 - 1 . 8
.9
59.2
.6
52.1
53.3 - 1 . 3
52.7
A
68.4
2.8
71.0
4.8
69.2
.9
61.9
78.1 -1.2
2.8
75.9
3.8
74.8
3.4
85.4
90.9
4.4
97.4
6.8
113.5
5.4
125.7
3.0
122.8
2.6
133.3
.6
149.3
.4
3.2
144.2
-7
166.4
195.0 - 5 . 1
229.8
6.5
2287
2.9
206.1
18.3
257.9
5.1
324.1 -13.6
386.6 -14.3
423.0 - 1 . 8
8.3
401.9
4.0
474.9
414.5 - 8 . 3
471.3 -35.2

1.1
1.1
1.1
1.1

466.8
471.6
495.5
4817

455.5
472.1
495.8
476.2

28.8
32.0
31.3
32.9

.0
.0
.0
.0

427.7
441.3
400.5
355.5

4.8
422.9
87
432.5
425.3 -24.8
377.4 -21.9

40.4
51.7
55.5

.0
.0
.0
.0

397.4
417.1
457.9
472.0

404.1 -6.7
450.1 -33.0
501.1 -43.2
529.8 -57.8

14.9
2.2
11.0
14.2
22.4
42.0
49.6
54.3
44.7
29.6
27.3
41.4
39.0
42.7
50.8
54.8
56.7
58.1
64.4
70.7
74.3
75.3
79.9
78.0
83.0
90.5
92.9
106.3
119.7
128.6
139.9
142.0
143.6
158.6
180.3
189.2
227.7
234.5
282.7
294.4
326.9
374.0
407.3
435.4
509.6
521.6
567.8

3.3
-.9
2.2
3.4
10.3
27.2
32.9
36.6
28.7
13.7
5.2
11.1
7.5
11.9
16.1
17.4
18.5
17.0
16.4
21.3
22.3
23.6
21.1
19.7
23.0
23.3
21.9
29.6
33.7
36.0
44.3
41.9
40.6
55.8
60.7
52.6
79.0
85.1
94.3
82.5
78.0
89.4
96.7
110.2
135.3
125.4
113.1

10.8
12.1
14.8
16.7
17.6
16.0
15.9
22.1
30.2
31.5
30.7
34.8
37.4
38.2
41.1
47.9
49.4
52.0
51.7
58.7
58.3
60.0
67.2
71.0
76.7
86.0
92.7
95.6
100.0
103.0
102.8
119.7
136.6
148.7
149.4
188.4
211.9
248.9
284.6
310.6
325.2
374.3
396.1
454.8

-63.8
-36.5
-17.8
.8
14.3
-30.7
-26.9
-115.8
-131.8

1.2
-1.3
-2.2
-1.3
-5.1
-33.1
-46.6
-54.5
-42.1
3.5
13.4
8.3
-2.6
9.2
6.5
-3.7
-7.1
-6.0
4.4
6.1
2.3
-10.3
-1.1
3.0
-3.9
-4.2
.3
-3.3
.5
-1.8
-13.2
-6.0
8.4
-12.4
-22.0
-16.8
-5.6
-11.5
-69.3
-53.1
-45.9
-29.5
-16.1
-61.2
-62.2
-147.1
-182.9

461.8
475.8
507.6
490.1

468.8
485.2
531.6
552.8

112.2
120.2
149.7
159.0

356.6
365.1
381.9
393.8

-8.1
-10.6
-25.2
-63.7

-43.4
-47.3
-62.4
-95.8

35.3

434.4
439.5
397.9
351.3

514.1
520.7
524.9
526.6

130.8
127.1
123.0
120.8

383.3
393.6
401.9
405.8

-79.7
-81.2
-127.0
-175.3

-108.5
-113.2
-158.3
-208.2

398.5
420.6
455.4

541.5
535.0
587.2

121.7
91.5
115.8
123.5

419.8
443.5
471.4

-142.9 -183.3
-114.4 -166.1
-131.8 -187.3

1.0
-1.4
-2.2
-.7
-3.8
= 31.4
=44.1
-51.8
-39.5
5.4
14.4
8.4
-3.4
8.0

6.1
-3.8
-6.9
-7.1
3.1
5.2
.9
-12.6
-1.6
3.1
-4.3
-3.8
.7
-2.3
.5
-1.3
-14.2
-6.0
9.9
-10.6
-19.4
-3.3
7.8
-4.7

Gross
Net
private
domestic foreign
investinvest- ment 3
ment

17.0
1.6
10.3
14.7
19.2
9.8
3.7
5.2
9.3
35.6
43.2
48.3
36.2
52.0
60.1
52.7
52.1
52.9
68.8
73.8
74.0
62.8
77.0
787
78.6
88.8
95.3
104.2
119.0
1287
125.4
133.9
1497
147.4
1657
189.9
236.3
231.5
224.4
263.0
310.4
372.3
421.2
408.2
478.9
406.2
436.1

15.9
.9
8.8
13.5
18.6
10.7
5.4
2.4
5.2
35.1
417
49.8
35.6
50.7
56.9
51.0
49.8
50.9
67.5
75.9
75.2
62.6
78.3
81.1
78.7
86.7
93.6
104.0
120.2
127.3
125.7
136.0
153.6
148.9
161.6
186.6
235.5
227.8
218.9
257.9
309.1
374.8
422.7
405.9
483.8
405.8
436.0

11.6
3.1

Total

-0.2
~'.Q

.6
1.3
1.8
2.5
2.7
2.6
1.9
1.0
.1
-7
-1.2
-.4
-.0
.1
-1.1
-1.3
-.9
-1.4
-2.4
~A
.5

~!o
-ill
.1
1.5
1.9
2.6
13.5
13.4
6.8
5.5
16.6
28.0
30.3
30.4
30.6
35.3
31.3
51.0
367
37.3
32.0

11.3
-.5
-.3
5.5

1
Undistributed corporate profits with inventory valuation and capital consumption adjustments, corporate and noncorporate capital
consumption allowances with capital consumption adjustment, and private wage accruals less disbursements.
2
Allocations of special drawing rights (SDRs), except as noted in footnote 4.
9
Net exports of goods and services less net transfers to foreigners and interest paid by government to foreigners plus capital grants
received by the United States, net.
4
In February 1974, the U.S. Government paid to India $2,010 million in rupees under provisions of the Agricultural Trade
Development and Assistance Act. This transaction is being treated as capital grants paid to foreigners, i.e., a - $ 2 . 0 billion entry in
capital grants received by the United States, net.
Source: Department of Commerce, Bureau of Economic Analysis.




250

T A B L E B-26.—Saving by individuals, 1946-83 *
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Net investment i n 1

Increase in financial assets

Year or
quarter

Total

Checkable
deposTotal
its
and
currency

Securities
Time
and
Money
sav- market
ings
fund
deshares
posits

Government
securities 2

Corporate
equities 3

NonInsurcorOther
ance
Owner- Conporate
finanand
occu- sumer
cial
busiOther
pension
pied duraasness
securiresets 6 homes bles
asties 4
serves5
sets 8

Less: Net increase in
debt
Mortgage
debt ConOther
on sumer
debt89
non- credit
farm
homes

-1.5
1.6
1.3
1.8

-0.9
-.8
.0

5.3
5.4
5.3
5.6

2.8
2.4
2.2
1.6

3.6
6.7
9.1
8.4

6.1
9.0
9.8
10.6

2.3
1.8
6.9
1.8

3.6
4.7
4.6
4.4

3,1
3.7
3.2
3.2

-0.4
2.2
2.8
2.2

7.8
8.1
9.1

-.1
-.6
2.5
2.5
1.0

-.7
.3
.0

6.9
6.3
7.7
7.9
7.8

1.9
1.9
2.0
2.1
2.1

11.8
11.7
11.3
12.3
12.7

14.8
11.3
8.6
10.1
7.1

6.8
4.5
2.3
1.0
1.9

6.7
6.6
6.2
7.6
8.7

4.8
1.6
5.3
4.2
1.5

5.0
3.7
2.7
1.9
5.5

1.2
1.8
-.4
3.8
1.0

8.6
9.4
11.9
13.9
11.0

5.8
3.9
2.3
-2.5
10.1

.8
1.2
1.0
1.1

8.5
9.5
9.5
10.4
11.9

2.1
2.5
2.8
3.5
3.3

16.7
15.6
13.2
12.3
16.3

12.2
8.5
7.7
3.6
7.3

2.9
1.2
2.7
2.6
5.0

12.2
11.2
8.9
9.5
12.8

7.2
3.9
2.9
.5
8.0

6.4
3.2
3.8
6.0
7.2

36.7
35.9
42.0
467
56.8

1.0
32.1
35.4 - . 9
40.1 - 1 . 2
4.2
46.6
5.3
55.7

12.0
18.3
26.1
26.2
26.1

2.2
1.4
1.3
.6
4.8

.3
-2.1
-2.6

2.4
.1
.1
1.4
. .4

11.5
12.1
12.7
13.9
16.1

3.6
4.3
3.2
2.9
3.2

14.8
12.7
13.5
14.3
15.0

7.0
4.3
8.5
11.8
15.0

3.6
4.7
7.5
9.8
9.2

11.7
12.2
14.1
16.2
17.5

4.4
2.5
6.3
8.9
9.8

4.9
6.5
7.2
10.7
10.8

1965
1966
1967
1968
1969

65.0
72.8
77.0
80.5
71.5

7.6
58.8
2.4
57.9
9.9
69.8
75.6 11.1
65.2 - 2 . 5

27.8
19.0
35.3
31.1
9.1

3.7
11.3
-1.2
5.2
25.9

-2.1
-.7
-4.7
-7.5
-2.8

1.3
2.4
5.2
7.9
10.0

16.9
19.2
18.6
19.8
21.5

3.7
4.4
6.7
8.1
4.0

13.5
11.7
15.7
16.3

20.2
23.1
21.1
27.0
26.3

13.3
10.8
10.2
10.0
12.7

17.0
13.8
12.5
16.9
18.6

10.6
6.5
5.7
11.5
10.8

14.3
12.2
17.6
19.2
19.4

1970
1971
1972
1973
1974

86.4
95.6
109.3
132.0
128.3

81.5
102.1
131.5
148.5
147.3

8.9
12.2
13.9
14.1
7.4

43.6
67.7
74.4
63.6
55.7

-1.7
-5.5
-5.1
-5.8
-.6

6.9
6.5
4.9
11.1
6.8

23.9
27.4
29.4
33.0
36.2

5.4
5.8
11.4
8.3
11.1

13.6
20.7
28.0
31.0
25.2

20.0
26.6
34.6
40.4
28.4

11.5
17.5
20.6
26.6
10.6

14.1
26.2
41.4
46.5
38.0

5.4
14.7
19.8
24.3

2.4

-5.4
-12.2
2.7
24.2
28.3

9.9

20.7
30.3
44.2
43.8
35.4

1975
1976
1977
1978
1979

153.0
165.1
169.5
196.0
202.9

174.3
210.5
235.4
275.3
293.6

6.9 83.4
15.7 107.5
20.1 107.5
22.5 100.3
22.0 78.5

1.3
-.0
.2
6.9
34.4

25.0
11.7
18.2
33.6
56.0

-3.8
-4.6
-3.5
-5.1
-15.2

4.4
8.6
6.5
13.6
13.9

43.5
52.4
67.4
73.8
68.2

13.6
19.2
18.9
29.6
35.8

23.5
36.1
53.2
65.7
71.8

26.5
40.0
49.6
56.7
52.5

5.8 40.6
3.3 61.4
90.8
14.;
23.3 111.5
22.4 121.2

9.6
25.4
40.2
48.8
45.4

26.9
37.9
51.9
64.7
70.8

1980
1981
1982

236.1
286.7
306.9

323.1
354.2
365.2

3.8 125.6
25.8 66.3
23.0 120.5

29.2
107.5
24.7

39.5
58.1
59.7

.0
-31.6
3.5

-2.6
-7.3
-17.6

89.6
101.8
120.4

37.9
33.6
30.9

52.6
48.3
26.1

32.8
39.7
35.3

2

98.3
78.8
55.8

4.9
24.1
18.3

72.6
77.4
53.5

222 2
259.8
320.8
344.0

294.0
356.4
379.8
386.3

42.7
6.2
5.5

21.0
92.6
88.9
62.7

148.4
59.9
137.3
84.3

3.0
89.7
73.0
66.7

-17.9
-28.6
-55.8
-24.3

-14.4
-5.9
-20.:
11.8

76.7
103.5
117.7
109.4

34.6
39.1
33.7
27.0

53.0
52.2
47.9
40.2

45.8
38.4
45.2
29.4

21.5
30.1
26.6
21.0

97.2
71.8
57.6

26.3
31.5
32.3
6.3

77.4
88.6
74.5
69.0

287.0
272.5
334.7
333.1

316.2
347.1
389.6
409.9

25.9 113.3
.7 97.9
19.9 87.0
45.2 183.3

38.2
40.5

-8.6
12.2

-33.9
-29.4

88.1
-68.1

54.0
64.1
37.8
81.8

104.3
120.5
119.6
137.2

22.9
40.6
37.0
27.6

28.3
28.5
24.2
27.4

35.5
36.9
33.1
35.5

11.7
5.6
2.3

64.9
47.6
55.0
57.7

2.6
35.9
11.1
23.6

33.7
68.1
51.7
60.7

320.7
255.6
292.5

414.6
405.4
439.:

75.4 272.8 - 1 0 5 . 2
50.8 163.2 - 6 2 . 7
17.1 218.0
-6.5

22.1
96.8
50.0

7.6
28.6
7.9

-16.4
-27.3
3.2

145.9
140.6
139.8

15.4
9.7

32.5
45.6
56.8

36.4
8.2 89.1
50.6
4.8 106.3
51.5 - 4 . 7 127.8

28.1
49.5
49.1

53.8
95.1
73.4

1946
1947
1948
1949

24.6
20.1
24.3
20.9

18.8
5.6
13.2
.1
9.1 - 2 . 9
9.9 - 2 . 0

1950
1951
1952
1953
1954

30.6
34.7
31.3
32.5
28.2

13.7
19.1
23.2
22.8
22.2

1.6
1.0
2.2

1955
1956
1957
1958
1959

34.1
37.2
36.5
34.1
38.0

28.0
30.2
28.6
31.6
37.4

1960
1961
1962
1963
1964

1981:
I
IV
1982:
I
II
Ill
IV

10.0

3.4

?J

1983:

ii"Z
1

Saving by households, personal trust funds, nonprofit institutions, farms, and other noncorporate business.
Consists of U.S. savings bonds, other U.S. Treasury securities, U.S. Government agency securities and sponsored agency securities,
mortgage pool securities, and State and local obligations.
3
Includes mutual fund shares.
* Corporate and foreign bonds and open market paper.
5
Private life insurance reserves, private insured and nonjnsured pension reserves, and government insurance and pension reserves.
6
Consists of security credit, mortgages, accident and health insurance reserves, and nonlife insurance claims for households and of
consumer credit, equity in sponsored agencies, and nontife insurance claims for noncorporate business.
7
Purchases of physical assets less depreciation.
8
Includes data for corporate farms.
9
Other debt consists of security credit, policy loans, and noncorporate business debt.
2

Source: Board of Governors of the Federal Reserve System.




251

TABLE B-27.—Number and median income (in 1982 dollars) of families and persons, and poverty status,
by race, selected years, 1947-82
Families l

Persons
. below

Year

Number
(millions)

Female
householder

Total
Median
income

Number
(millions)

Rate

Number
(millions)

Median income of persons 14 years old
and nup.r with income

poverty level

Below poverty level

Rate

Females

Males

Number
(millions)

Rate

Alt
persons

2

Yearround
full-time
workers

All
persons

Yearround
fulltime
workers

ALL RACES

1947

37.2
39.9
42.9
45.5
46.4
47.1
47.5
48.0

15,926
18,317
18,504
19,005
19,701
20,442

48.5
49.2
50.1
50.8
51.6

21,283
22,402
22,934
23,949
24,837

52.2
53.3
54.4
55.1
55.7

24,528
24,513
25,648
26,175
25,254

1975
1976
1977
1978
1979 *

56.2
56.7
57.2
57.8
59.6

24,604
25,363
25,500
26,099
26,047

1980
1981
1982

60.3
61.0
61.4

24,626
23,761
23,433

46.5
47.6
48.5
48.9
49.4

25,445
25,435
26,647
27,357
26,244

1975
1976
1977
1978
1979 4

49.9
50.1
50.5
50.9
52.2

25,589
26,345
26,664
27,176
27,180

1980
1981
1982

52.7
53.3
53.4

25,658
24,959
24,603

1970
1971
1972
1973
1974 3

4.9
5.2
5.3
5.4
5.5

15,608
15,349
15,837
15,789
15,671

1975
1976
1977
1978
1979 *

5.6
5.8
5.8
5.9
6.2

15,744
15,671
15,232
16,096
15,391

1980
1981
1982

6.3
6.4
6.5

14,846
14,079
13,598

42.4
42.1
42.9
40.4
36.4
38.4
33.1
33.3
32.3
32.7
32.5
33.9
32.7
32.2
32.1
32.5
33.0
31.7
31.4
30.4
32.7
34.6
36.3

39.9 22.2
39.6 21.9
38.6 21.0
36.4 19.5
36.1 19.0
33.2 17.3
28.5 14.7
27.8 14.2
25.4 12.8
24.1 12.1
25.4 12.6
25.6 12.5
24.5 11.9
23.0 11.1
23.4 11.2
25.9 12.3
25.0 11.8
24.7 11.6
24.5 11.4
26.1 11.7
29.3 13.0
31.8 14.0
34.4 15.0

25.0
26.5
24.3
24.5
24.8
25.9
25.2
24.0
23.5
22.3
25.7
27.4
27.9

17.5
17.8
16.2
15.1
15.7
17.8
16.7
16.4
16.3
17.2
19.7
21.6
23.5

9.9
9.9
9.0
8.4
8.6
9.7
9.1
8.9
8.7
19.0
10.2
11.1
12.0

17,428
17,248
18,029
18,360
17,330
16,679
16,849
16,889
16,945
16,363
15,612
15,172
14,748

23,483
23,600
25,191
25,630
24,269
23,732
24,200
24,495
24,205
23,915
23,100
22,476
22,232

54.3
53.5
53.3
52.7
52.2
50.1
52.2
51.0
50.6
49.4
49.4
52.9
56.2

7.5
7.4
7.7
7.4
7.2
7.5
7.6
7.7
7.6
8.1
8.6
9.2
9.7

33.5
32.5
33.3
31.4
30.3
31.3
31.1
31.3
30.6
31.0
32.5
34.2
35.6

10,334
10,286
10,920
11,106
10,738
9,971
10,145
10,022
10,151
10,299
9,382
9,022
8,838

15,996
16,138
17,011
17,274
17,387
17,661
17,332
16,887
18,539
17,382
16,253
15,903
15,790

13,308

1955
1960
1961
1962
1963
1964
1965
1966 3
1967
1968
1969
1970
1971
1972
1973
1974 3

$9,635
10,304
12,104
13,299
13,517
13,951
14,221
14,460
15,367
15,781
16,054
16,591
16,927
16,580
16,452
17,189
17,498
16,543
15,877
.15,983
16,124
16,179
15,664
14,678
14,299
13,950

$13,098

1950

8.2
8.4
8.1
7.6
7.2
6.7
5.8
5.7
5.0
5.0
5.3
5.3
5.1
4.8
4.9
5.5
5.3
5.3
5.3
5.5
6.2
6.9
7.5

18.1
18.1
17.2
15.9
15.0
13.9
11.8
11.4
10.0
9.7
10.1
10.0
9.3
8.8
8.8
9.7
9.4
9.3
9.1
9.2
10.3
11.2
12.2

3.7
3.8
3.4
3.2
3.4
3.8
3.6
3.5
3.5
3.6
4.2
4.7
5.1

8.0
7.9
7.1
6.6
6.8
7.7
7.1
7.0
6.9
6.9
8.0
8.8
9.6

1.5
1.5
1.5
1.5
1.5
1.5
1.6
1.6
1.6
1.7
1.8
2.0
2.2

29.5
28.8
29.0
28.1
26.9
27.1
27.9
28.2
27.5
27.8
28.9
30.8
33.0

2.0
2.0
2.0
2.0
1.8
1.9
1.7
1.8
1.8
1.8
2.0
2.1
2.2
2.2
2.3
2.4
2.5
2.6
2.7
2.6
3.0
3.3
3.4

$4,394
3,821

$15,289
17,712
18,271
18,592
19,138
19,554
20,185
20,687
21,072
21,680
22,823
22,830
22,954
24,314
24,909
23,805
23,196
23,499
24,004
23,764
23,244
22,459
21,961
21,655

4,037
4,111
4,128
4,283
4,326
4,509

$9,860
10,741
10,781
11,032
11,211
11,546

4,653
4,873
5,207
5,602
5,613

11,675
11,974
12,136
12,674
13,368

5,561
5,739
5,997
6,073
6,033

13,523
13,587
13,966
14,092
14,042

6,071
6,063
6,277
6,019
5,787

13,843
14,094
14,039
14,264
14,004

5,763
5,793
5,887

13,578
13,221
13,663

5,633
5,834
6,036
6,132
6,101

13,761
13,745
14,240
14,331
14,161

6,134
6,114
6,373
6,091
5,842

13,876
14,202
14,128
14,399
14,127

5,795
5,857
5,967

13,709
13,441
13,847

5,128
5,112
5,639
5,534
5,508

11,276
12,136
12,182
12,153
13,069

5,572
5,762
5,503
5,435
5,350

13,257
13,278
13,205
13,345
13,016

5,365
5,204
5,263

12,786
12,139
12,376

WHITE

1970
1971
1972
1973
1974

3

BLACK

.8
.9
1.0
1.0
1.0
1.0
1.1
1.2
1.2
1.2
1.3
1.4
1.5

^ h e term "family" refers to a group of two or more persons related by blood, marriage, or adoption and residing together; all such
persons are considered members of the same family. Beginning 1979 based on householder concept and restricted To primary families,
b e g i n n i n g 1979, data are for persons 15 years and over.
3
Based on revised methodology; comparable with succeeding years.
4
Based on 1980 census population controls; comparable with succeeding years.
Note.—The poverty level is based on the poverty index adopted by a Federal interagency committee in 1969. That index reflected
different consumption requirements for families based on size and composition, sex and age of family householder, and farm-nonfarm
residence. Minor revisions implemented in 1981 eliminated variations in the poverty thresholds based on two of these variables, farmnonfarm residence and sex of householder. The poverty thresholds are updated every year to reflect changes in the consumer price
index. For further details see "Current Population Reports," Series P-60, No. 138.
Source: Department of Commerce, Bureau of the Census.




252

POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY
T A B L E B-28.—Population by age groups, 1929-83
[Thousands of persons]
Age (years)
July 1

Total
Under 5

5-15

16-19

20-24

25-44

45-64

65 and
over

1929

121,767

11,734

26,800

9,127

10,694

35,862

21,076

6,474

1933

125,579

10,612

26,897

9,302

11,152

37,319

22,933

7,363

1939

130,880

10,418

25,179

9,822

11,519

39,354

25,823

8,764

1940
1941
1942
1943
1944

132.122
1331402
134,860
136,739
138,397

10,579
10,850
11,301
12,016
12,524

24,811
24,516
24,231
24,093
23,949

9,895
9,840
9,730
9,607
9,561

11,690
11,807
11,955
12,064
12,062

39,868
40,383
40,861
41,420
42,016

26,249
26,718
27,196
27,671
28,138

9,031
9,288
9,584
9,867
10,147

1945
1946
1947
1948
1949

139,928
141,389
144,126
146,631
149,188

12,979
13,244
14,406
14,919
15,607

23,907
24,103
24,468
25,209
25,852

9,361
9,119
9,097
8,952
8,788

12,036
12,004
11,814
11,794
11,700

42,521
43,027
43,657
44,288
44,916

28,630
29,064
29,498
29,931
30,405

10,494
10,828
11,185
11,538
11,921

1950
1951
1952
1953
1954

152,271
154,878
157,553
160,184
163,026

16,410
17,333
17,312
17,638
18,057

26,721
27,279
28,894
30,227
31,480

8,542
8,446
8,414
8,460
8,637

11,680
11,552
11,350
11,062
10,832

45,672
46,103
46,495
46,786
47,001

30,849
31,362
31,884
32,394
32,942

12,397
12,803
13,203
13,617
14,076

1955
1956
1957
1958
1959

165,931
168,903
171,984
174,882
177,830

18,566
19,003
19,494
19,887
20,175

32,682
33,994
35,272
36,445
37,368

8,744
8,916
9,195
9,543
10,215

10,714
10,616
10,603
10,756
10,969

47,194
47,379
47,440
47,337
47,192

33,506
34,057
34,591
35,109
35,663

14,525
14,938
15,388
15,806
16,248

1960
1961
1962
1963
1964

180,671
183,691
186,538
189,242
191,889

20,341
20,522
20,469
20,342
20,165

38,494
39,765
41,205
41,626
42,297

10,683
11,025
11,180
12,007
12,736

11,134
11,483
11,959
12,714
13,269

47,140
47,084
47,013
46,994
46,958

36,203
36,722
37,255
37,782
38,338

16,675
17,089
17,457
17,778
18,127

1965
1966
1967
1968
1969

194,303
196,560
198,712
200,706
202,677

19,824
19,208
18,563
17,913
17,376

42,938
43,702
44,244
44,622
44,840

13,516
14,311
14,200
14,452
14,800

13,746
14,050
15,248
15,786
16,480

46,912
47,001
47,194
47,721
48,064

38,916
39,534
40,193
40,846
41,437

18,451
18,755
19,071
19,365
19,680

1970
1971
1972
1973
1974

205,052
207,661
209,896
211,909
213,854

17,166
17,244
17,101
16,851
16,487

44,816
44,591
44,203
43,582
42,989

15,289
15,688
16,039
16,446
16,769

17,202
18,159
18,153
18,521
18,975

48,473
48,936
50,482
51,749
53,051

41,999
42,482
42,898
43,235
43,522

20,107
20,561
21,020
21,525
22,061

1975
1976
1977
1978
1979

215,973
218,035
220,239
222,585
225,055

16,121
15,617
15,564
15,735
16,063

42,508
42,099
41,298
40,428
39,552

17,017
17,194
17,276
17,288
17,242

19,527
19,986
20,499
20,946
21,297

54,302
55,852
57,561
59,400
61,379

43,801
44,008
44,150
44,286
44,390

22,696
23,278
23,892
24,502
25,134

1980
1981
1982
1983

227,704
229,849
232,057
234,249

16,457
16,943
17,372

38,820
38,046
37,620

17,136
16,682
16,205

21,612
21,946
21,935

63,474
65,496
67,625

44,493
44,476
44,474

25,714
26,260
26,824

Note.—Includes Armed Forces overseas beginning 1940. Includes Alaska and Hawaii beginning 1950.
Source: Department of Commerce, Bureau of the Census.




253

TABLE B-29-—Population and the labor force, 1929-83
[Monthly data seasonally adjusted, except as noted]

Period

Labor
force EmployCivilian
Resi- includ- ment
noninsti- dent
ing
tutional Armed resi- including
popula- Forces * dent resident Total
Armed
tion 1
Armed Forces
Forces

Unemployment rate

Civilian labor force
Employment
Total

Agri- Nonagricultural cultural

Unemployment

Labor force
participation
rate

CivilAll
ian
work- work- Total3
ers
Percent

Thousands of persons 14 years of age and over
1929...

49,180 47,630 10,450

37,180

1,550

3.2

1933...

51,590 38,760 10,090

28,670

12,830

24.9

1939...

55,230 45,750

9,610

36,140

9,480

17.2

55,640
55,910
56,410
55,540
54,630

47,520
50,350
53,750
54,470
53,960

9,540
9,100
9,250
9,080
8,950

37,980
41,250
44,500
45,390
45,010

8,120
5,560
2,660
1,070
670

14.6
9.9
4.7
1.9
1.2

53,860 52,820
57,520 55,250
60,168 57,812

8,580
8,320
8,256

44,240
46,930
49,557

1,040
2,270
2,356

1.9
3.9
3.9

3.9
3.3
5.9

1940
1941
1942
1943
1944

99,840
99,900
98,640
94,640
93,220

1945
1946
1947

94,090
103,070
106,018

Thousands of persons 16 years of age and over
59,350 57,038
60,621 58,343
61,286 57,651

7,890
7,629
7,658

49,148
50,714
49,993

2,311
2,276
3,637

60,087
62,104
62,636
63,410
62,251

62,208
62,017
62,138
63,015
63,643

58,918
59,961
60,250
61,179
60,109

7,160
6,726
6,500
6,260
6,205

51,758
53,235
53,749
54,919
53,904

3,288
2,055
1,883
1,834
3,532

5.2
3.2
2.9
2.8
5.4

5.3
3.3
3.0
2.9
5.5

59.7
60.1
60.0
59.7
59.6

67,087
68,517
68,877
69,486
70,157

64,234
65,764
66,019
64,883
66,418

65,023
66,552
66,929
67,639
68,369

62,170
63,799
64,071
63,036
64,630

6,450
6,283
5,947
5,586
5,565

55,722
57,514
58,123
57,450
59,065

2,852
2,750
2,859
4,602
3,740

4.3
4.0
4.2
6.6
5.3

4.4
4.1
4.3
6.8
5.5

60.0
60.7
60.3
60.1
59.9

1,861
1,900
2,061
2,006
2,018

71,489
72,359
72,675
73,839
75,109

67,639
67,646
68,763
69,768
71,323

69,628
70,459
70,614
71,833
73,091

65,778
65,746
66,702
67,762
69,305

5,458
5,200
4,944
4,687
4,523

60,318
60,546
61,759
63,076
64,782

3,852
4,714
3,911
4,070
3,786

5.4
6.5
5.4
5.5
5.0

5.5
6.7
5.5
5.7
5.2

60.0
60.0
59.5
59.3
59.4

126,513
128,058
129,874
132,028
134,335

1,946
2,122
2,218
2,253
2,238

76,401
77,892
79,565
80,990
82,972

73,034
75,017
76,590
78,173
80,140

74,455
75,770
77,347
78,737
80,734

71,088
72,895
74,372
75,920
77,902

4,361
3,979
3,844
3,817
3,606

66,726
68,915
70,527
72,103
74,296

3,366
2,875
2,975
2,817
2,832

4.4
3.7
3.7
3.5
3.4

4.5
3.8
3.8
3.6
3.5

59.5
59.8
60.2
60.3
60.8

1970
1971
19725..
1973«..
1974

137,085
140,216
144,126
147,096
150,120

2,118
1,973
1,813
1,774
1,721

84,889
86,355
88,847
91,203
93,670

80,796
81,340
83,966
86,838
88,515

82,771
84,382
87,034
89,429
91,949

78,678
79,367
82,153
85,064
86,794

3,463
3,394
3,484
3,470
3,515

75,215
75,972
78,669
81,594
83,279

4,093
5,016
4,882
4,365
5,156

4.8
5.8
5.5
4.8
5.5

4.9
5.9
5.6
4.9
5.6

61.0
60.7
60.9
61.3
61.7

1975
1976
1977
1978»..
1979

153,153
156,150
159,033
161,910
164,863

1,678
1,668
1,656
1,631
1,597

95,453 87,524
97,826 90,420
100,665 93,673
103,882 97,679
106,559 100,421

93,775
96,158
99,009
102,251
104,962

85,846
88,752
92,017
96,048
98,824

3,408
3,331
3,283
3,387
3,347

82,438
85,421
88,734
92,661
95,477

7,929
7,406
6,991
6,202
6,137

8.3
7.6
6.9
6.0
5.8

8.5
7.7
7.1
6.1
5.8

61.6
62.0
62.6
63.5
64.0

1980
1981
1982
1983

167,745
170,130
172,271
174,215

1,604
1,645
1,668
1,676

108,544
110,315
111,872
113,226

106,940
108,6/0
110,204
111,550

99,303
100,397
99,526
100,834

3,364
3,368
3,401
3,383

95,938
97,030
96,125
97,450

7,637
8,273
10,678
10,717

7.0
7.5
9.5
9.5

7.1
7.6
9.7
9.6

64.1
64.2
64.3
64.4

1947
1948
1949

101,827
103,068
103,994

1950
1951
1952
1953 * .
.
1954

104,995
104,621
105,231
107,056
108,321

1,169
2,143
2,386
2,231
2,142

63,377
64,160
64,524
65,246
65,785

1955
1956....
1957
1958
1959

109,683
110,954
112,265
113,727
115,329

2,064
1.9G5
1,948
1,847
1,788

I960'..
1961
1962 ^ .
.
1963
1964

117,245
118,771
120,153
122,416
124,485

1965
1966
1967
1968
1969....

100,907
102,042
101,194
102,510

See next page for continuation of table.




254

TABLE B-29.—Population and the labor force,

1929-83—Continued

[Monthly data seasonally adjusted, except as noted]

Period

Civilian
noninstitutional
population 1

Resident
Armed
Forces *

Labor
force
including
resident
Armed
Forces

Unemployment rate

Civilian labor force
Employment
including
resident
Armed
Forces

Employment

Total
Total

Nonagricultural cuttural

Unemployment

All Civilian
work- work- Total2
ers 2
ers

Thousands of persons 16 years of age and over
1981:
Jan
Feb
Mar...

Labor force
participation
rate
Civilian 4

Percent

May....
June...

169,104
169,280
169,453
169,641
169,829
170,042

1,632
1,632
1,636
1,633
1,627
1,629

109,657
109,899
110,233
110,598
110,834
110,063

101,583
101,849
102,245
102,707
102,723
102,008

108,025
108,267
108,597
108,965
109,207
108,434

99,951
100,217
100,609
101,074
101,096
100,379

3,421
3,355
3,367
3,536
3,376
3,340

96,530
96,862
97,242
97,538
97,720
97,039

8,074
8,050
7,988
7,891
8,111
8,055

7.4
7.3
7.2
7.1
7.3
7.3

7.5
7.4
7.4
7.2
7.4
7.4

64.2
64.3
64.4
64.6
64.6
64.1

63.9
64.0
64.1
64.2
64.3
63.8

July....
Aug....
Sept...
Oct
Nov....
Dec...

170,246
170,399
170,593
170,809
170,996
171,166

1,648
1,664
1,661
1,654
1,659
1,665

110,237
110,345
109,918
110,631
110,828
110,547

102,353
102,302
101,674
101,978
101,814
101,250

108,589
108,681
108,257
108,977
109,169
108,882

100,705
100,638
100,013
100,324
100,155
99,585

3,305
3,365
3,357
3,393
3,410
3,231

97,400
97,273
96,656
96,931
96,745
96,354

7,884
8,043
8,244
8,653
9,014
9,297

7.2
7.3
7.5
7.8
8.1
8.4

7.3
7.4
7.6
7.9
8.3
8.5

64.1
64.1
63.8
64.1
64.2
64.0

63.8
63.8
63.5
63.8
63.8
63.6

1982:
Jan
Feb
Mar....
Apr
May....
June...

171,335
171,489
171,667
171,844
172,026
172,190

1,656
1,664
1,671
1,668
1,665
1,664

110,731
111,167
111,335
111,569
112,207
111,797

101,338
101,474
101,425
101,266
101,844
101,317

109,075
109,503
109,664
109,901
110,542
110,133

99,682
99,810
99,754
99,598
100,179
99,653

3,381
3,391
3,380
3,375
3,453
3,339

96,301
96,419
96,374
96,223
96,726
96,314

9,393
9,693
9,910
10,303
10,363
10,480

8.5
8.7
8.9
9.2
9.2
9.4

8.6
8.9
9.0
9.4
9.4
9.5

64.0
64.2
64.2
64.3
64.6
64.3

63.7
63.9
63.9
64.0
64.3
64.0

July....
Aug....
Sept...
Oct
Nov....
Dec...

172,364
172,511
172,690
172,881
173,058
173,199

1,674
1,689
1,670
1,668
1,660
1,665

112,073
112,162
112,349
112,358
112,583
112,538

101,177
101,252
101,082
100,814
100,696
100,644

110,399
110,473
110,679
110,690
110,923
110,873

99,503
99,563
99,412
99,146
99,036
98,979

3,417
3,380
3,366
3,443
3,499
3,429

96,086
96,183
96,046
95,703
95,537
95,550

10,896
10,910
11,267
11,544
11,887
11,894

9.7
9.7
10.0
10.3
10.6
10.6

9.9
9.9
10.2
10.4
10.7
10.7

64.4
64.4
64.4
64.4
64.4
64.4

64.1
64.0
64.1
64.0
64.1
64.0

1983:
Jan
Feb
Mar...,
Apr
May...,
June..,

173,354
173,505
173,656
173,794
173,953
174,125

1,667
1,664
1,664
1,671
1,669
1,668

112,344
112,352
112,399
112,646
112,619
113,573

100,821
100,836
100,980
101,277
101,431
102,411

110,677
110,688
110,735
110,975
110,950
111,905

99,154
99,172
99,316
99,606
99,762
100,743

3,420
3,415
3,386
3,392
3,374
3,479

95,734
95,757
95,930
96,214
96,388
97,264

11,523
11,516
11,419
11,369
11,188
11,162

10.3
10.2
10.2
10.1
9.9
9.8

10.4
10.4
10.3
10.2
10.1
10.0

64.2
64.1
64.1
64.2
64.1
64.6

63.8
63.8
63.8
63.9
63.8
64.3

July...,
Aug...
Sept..
Oct
Nov...,
Dec...

174,306
174,440
174,602
174,779
174,951
175,121

1,664
1,682
1,695
1,695
1,685
1,688

113.489
113,799
113,924
113,561
113,720
113,824

102,889
103,166
103,571
103,665
104,291
104,629

111,825
112,117
112,229
111,866
112,035
112,136

101,225
101,484
101,876
101,970
102,606
102,941

3,499
3,449
3,308
3,240
3,257
3,356

97,726
98,035
98,568
98,730
99,349
99,585

10,600
10,633
10,353
9,896
9,429
9,195

9.3
9.3
9.1
8.7
8.3
8.1

9.5
9.5
9.2
8.8
8.4
8.2

64.5
64.6
64.6
64.3
64.4
64.4

64.2
64.3
64.3
64.0
64.0
64.0

1

Not seasonally adjusted.
Unemployed as percent of labor force including resident Armed Forces.
Labor force including resident Armed Forces as percent of noninstitutional population including resident Armed Forces.
4
Civilian labor force as percent of civilian noninstitutional population.
6
Not strictly comparable with earlier data due to population adjustments as follows: Beginning 1953, introduction of 1950 census
data added about 600,000 to population and about 350,000 to labor force, total employment, and agricultural employment. Beginning
1960, inclusion of Alaska and Hawaii added about 500,000 to population, about 300,000 to labor force, and about 240,000 to
nonagricultural employment. Beginning 1962, introduction of 1960 census data reduced population by about 50,000 and labor force and
employment by about 200,000. Beginning 1972, introduction of 1970 census data added about 800,000 to civilian noninstitutional
population and about 333,000 to labor force and employment. A subsequent adjustment based on 1970 census in March 1973 added
60,000 to labor force and to employment. Beginning 1978, changes in sampling and estimation procedures introduced into the
household survey added about 250,000 to labor force and to employment. Unemployment levels and rates were not significantly
affected.
2
3

Note.—Labor force data in Tables B-29 through B-35 are based on household interviews and relate to the calendar week including
the 12th of the month. For definitions of terms, area samples used, historical comparability of the data, comparability with other series,
etc., see "Employment and Earnings."
Source: Department of Labor, Bureau of Labor Statistics.




255

TABLE B-30.—Civilian employment and unemployment by sex and age, 1947-83

{Thousands of persons 16 years of age and over; monthly data seasonally adjusted]
Civilian employment
Males
Year or
month

Total

Total

57,038 40,995
58,343 41,725
57,651 40,925

16-19
years

Unemployment
Females

20
years
and
over

Total

16-19
years

Females

Males
20
years
and
over

Total
Total

16-19
years

20
years
and
over

Total

16=19
years

2,218 38,776 16,045
2,344 39,382 16,617
2,124 38,803 16,723

1,691
1,682
1,588

14,354
14,936
15,137

2,311
2,276
3,637

1,692
1,559
2,572

270
256
353

1,422
1,305
2,219

619
717
1,065

144
153
223

58,918
59,961
60,250
61,179
60,109

41,578
41,780
41,682
42,430
41,619

2,186
2,156
2,107
2,136
1,985

39,394
39,626
39,578
40,296
39,634

17,340
18,181
18,568
18,749
18,490

1,517
1,611
1,612
1,584
1,490

15,824
16,570
16,958
17,164
17,000

3,288
2,055
1,883
1,834
3,532

2,239
1,221
1,185
1,202
2,344

318
191
205
184
310

1,922
1,029
980
1,019
2,035

1,049
834
698
632
1,188

195
145
140
123
191

62,170
63,799
64,071
63,036
64,630

42,621
43,379
43,357
42,423
43,466

2,095
2,164
2,115
2,012
2,198

40,526
41,216
41,239
40,411
41,267

19,551
20,419
20,714
20,613
21,164

1,547 18,002
1,654 18,767
1,663 19,052
1,570 19,043
1,640 19,524

2,852
2,750
2,859
4,602
3,740

1,854
1,711
1,841
3,098
2,420

274
269
300
416
398

1,580
1,442
1,541
2,681
2,022

998
1,039
1,018
1,504
1,320

176
209
197
262
256

65,778
65,746
66,702
67,762
69,305

43,904
43,656
44,177
44,657
45,474

2,361
2,315
2,362
2,406
2,587

41,543
41,342
41,815
42,251
42,886

21,874
22,090
22,525
23,105
23,831

1,768
1,793
1,833
1,849
1,929

20,105
20,296
20,693
21,257
21,903

3,852
4,714
3,911
4,070
3,786

2,486
2,997
2,423
2,472
2,205

426
479
408
501
487

2,060
2,518
2,016
1,971
1,718

1,366
1,717
1,488
1,598
1,581

286
349
313
383
385

71,088
72,895
74,372
75,920
77,902

46,340
46,919
47,479
48,114
48,818

2,918
3,253
3,186
3,255
3,430

43,422
43,668
44,294
44,859
45,388

24,748
25,976
26,893
27,807
29,084

2,118
2,468
2,496
2,526
2,687

22,630
23,510
24,397
25,281
26,397

3,366
2,875
2,975
2,817
2,832

1,914
1,551
1,508
1,419
1,403

479
432
448
426
440

1,435
1,120
1,060
993
963

1,452
1,324
1,468
1,397
1,429

395
405
391
412
413

78,678
79,367
82,153
85,064
86,794
85,846
88,752
92,017
96,048
98,824

48,990
49,390
50,896
52,349
53,024

3,409
3,478
3,765
4,039
4,103
3,839
3,947
4,174
4,336
4,300
4,085
3,815
3,379
3,300

45,581
45,912
47,130
48,310
48,922

2,735
2,730
2,980
3,231
3,345
3,263
3,389
3,514
3,734
3,783
3,625
3,411
3,170
3,043

26,952
27,246
28,276
29,484
30,424

4,093
5,016
4,882
4,365
5,156
7,929
7,406
6,991
6,202
6,137

30,726
32,226
33,775
35,836
37,434
38,492 7,637
39,590 8,273
40,086 10,678
41,004 10,717

2,238
2,789
2,659
2,275
2,714
4,442
4,036
3,667
3,142
3,120
4,267
4,577
6,179
6,260

599
693
711
653
757
966
939
874
813
811
913
962
1,090
1,003

1,638
2,097
1,948
1,624
1,957
3,476
3,098
2,794
2,328
2,308
3,353
3,615
5,089
5,257

1,855
2,227
2,222
2,089
2,441

48,018
49,190
50,555
52,143
53,308
53,101
53,582
52,891
53,487

29,688
29,976
31,257
32,715
33,769
33,989
35,615
37,289
39,569
41,217
42,117
43,000
43,256
44,047

3,486
3,369
3,324
3,061
3,018
3,370
3,696
4,499
4,457

506
568
598
583
665
802
780
789
769
743
755
800
886
825

53,116
53,210
53,083
53,091
53,255
52,926
52,862
52,776
52,736
52,620
52,508
52,483

43,005
43,052
43,160
43,059
43,367
43!487
43,430
43,464
43,384
43,228
43,218
43,214

3,191
3,202
3,216
3,224
3,219
3,174
3,161
3,140
3,174
3,149
3,136
3,052

39,814
39,850
39,944
39,835
40,148
40,313
40,269
40,324
40,210
40,079
40,082
40,162

9,393
9,693
9,910
10,303
10,363
10,480
10,896
10,910
11,267
11,544
11,887
11,894

5,411
5,482
5,674
5,862
5,894
6,119
6,293
6,336
6,672
6,828
6,984
6,969

1,037
1,055
1,059
1,096
1,107
1,054
1,086
1,091
1,109
1,118
1,137
1,133

4,374
4,427
4,615
4,766
4,787
5,065
5,207
5,245
5,563
5,710
5,847
5,836

3,982
4,211
4,236
4,441
4,469
4,361
4,603
4,574
4,595
4,716
4,903
4,925

865
918
831
870
901
811
921
906
902
902
908

52,508
52,508
52,673
52,830
52,963
53,492
53,765
53,804
53,947
54,140
54,457
54,658

43,351
43,379
43,421
43,547
43,546
43,899
44,154
44,415
44,597
44,563
44,751
44,898

3,096
3,064
3,053
3,016
2,963
3,052
3,031
3,117
3,047
2,993
3,013
3,055

40,255
40,315
40,368
40,531
40,583
40,847
41,123
41,298
41,550
41,570
41,738
41,843

11,523
11,516
11,419
11,369
11,188
11,162
10,600
10,633
10,353
9,896
9,429
9,195

6,683
6,756
6,673
6,722
6,604
6,409
6,248
6,200
6,049
5,759
5,457
5,258

1,060
1,039
1,078
1,040
1,021
1,057
1,031
1,050
984
950
861
866

5,623
5,717
5,595
5,682
5,583
5,352
5,217
5,150
5,065
4,809
4,596
4,392

4,840
4,760
4,746
4,647
4,584
4,753
4,352
4,433
4,304
4,137
3,972
3,937

861
827
855
867
836
916
828
835
792
771
757
756

99,303
100,397
99,526
100,834

51,857
53,138
54,728
56,479
57,607
57,186
57,397
56,271
56,787

99,682
99,810
99,754
99,598
100,179
99,653
99,503
99,563
99,412
99,146
99,036
98,979

56,677
56,758
56,594
56,539
56,812
56,166
56,073
56,099
56,028
55,918
55,818
55,765

3,561
3,548
3,511
3,448
3,557
3,240
3,211
3,323
3,292
3,298
3,310
3,282

99,154
99,172
99,316
99,606
99,762
100,743
101,225
101,484
101,876
101,970
102,606
102,941

55,803
55,793
55,895
56,059
56,216
56,844
57,071
57,069
57,279
57,407
57,855
58,043

3,295
3,285
3,222
3,229
3,253
3,352
3,306
3,265
3,332
3,267
3,398
3,385

1
See footnote 5, Table B-29.
Note.—See Note, Table B-29.
Source: Department of Labor, Bureau of Labor Statistics.




256

TABLE B-31.—Unemployment by duration and reason, 1947-83

[Monthly data seasonally adjusted1]
Duration of unemployment
Year or month

Total
unemployment

Less
than 5
weeks

5-14
weeks

15-26

27
weeks
and
over

Reason for unemployment

Average
Median
(mean) duradura- tion in
tion in weeks
weeks

Thousands of persons 16
years of age and over

Job
losers

Job
leavers

Reentrants

entrants

Thousands of persons 16
years of age and over

1947
1948
1949

2,311
2,276
3,637

1,210
1,300
1,756

704
669
1,194

234
193
428

256

8.6
10.0

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

3,288
2,055
1,883
1,834
3,532

1,450
1,177
1,135
1,142
1,605

1,055
574
516
482
1,116

425
166
148
132
495

357
137
84
78
317

12.1
9.7
8.4
8.0
11.8

2,852
2,750
2,859
4,602
3,740

1,335
1,412
1,408
1,753
1,58^

815
805
891
1,396
1,114

1,719
1,806
1,663
1,751
1,697

1,176
1,376
1,134
1,231
1,117

336
232
239
667
571
454
804
585
553
482

13.0
11.3
10.5
13.9
14.4

3,852
4,714
3,911
4,070
3,786
3,366
2,875
2,975
2,817
2,832

1,628
1,573
1,634
1,594
1,629

983
779
893
810
827

366
301
321
785
469
503
728
534
535
491
404
287
271
256
242

351
239
177
156
133

11.8
10.4
8.7
8.4
7.8

4.5
4.4

1,229
1,070
1,017

4,093
5,016
4,882
4,365
5,156
7,929
7,406
6,991
6,202
6,137
7,637
8,273
10,678
10,717

2,139
2,245
2,242
2,224
2,604

1,290
1,585
1,472
1,314
1,597

4.9
6.3
6.2
5.2
5.2

1,811
2,323
2,108
1,694
2,242

2,484
2,196
2,132
1,923
1,946

235
519
566
343
381
1,203
1,348
1,028
648
535
820
1,162
1,776
2,559

8.6
11.3
12.0
10.0
9.8

2,940
2,844
2,919
2,865
2,950
3,295
3,449
3,883
3,570

428
668
601
483
574
1,303
1,018
913
766
706
1,052
1,122
1,708
1,652

14.2
15.8
14.3
11.9
10.8

8.4
8.2
7.0
5.9
5.4

4,386
3,679
3,166
2,585
2,635

11.9
13.7
15.6
20.0

6.5
6.9
8.7
10.1

3,947
4,267
6,268
6,258

9,393
9,693
9,910
10,303
10,363
10,480
10,896
10,910
11,267
11,544
11,887
11,894

3,882
3,809
3,918
3,979
3,912
3,579
3,987
3,899
3,947
3,881
3,961
3,898

3,088
3,116
3,120
3,244
3,312
3,435

1,215
1,480
1,598
1,602
1,647
1,646
1,769
1,859
1,864
1,951
2,131
2,077

1,182
1,268
1,351
1,500
1,612
1,803
1,820
1,851
2,043
2,250
2,354
2,583

13.4
14.1
14.0
14.4
14.8
16.0

7.2
7.5
7.7
8.1
8.4
9.1

5,314
5,275
5,646
5,909
5,916
6,172

15.4
16.1
16.6
17.2
17.4
18.4

9.6
9.8
10.1
10.4

6,404
6,385
6,890
7,359
7,361
7,114

11,523
11,516
11,419
11,369
11,188
11,162
10,600
10,633
10,353
9,896
9,429
9,195

3,600
3,732
3,535
3,595
3,568
3,630
3,529
3,633
3,740
3,504
3,328
3,382

3,331
3,169
3,173
3,139
3,012
2,950

1,954
1,928
1,861
1,691
1,774
1,593
1,794
1,597
1,383
1,372
1,337
1,284

2,669
2,685
2,726
2,705
2,736
2,893
2,604
2,481
2,506
2,283
2,190
2,085

19.4
19.1
19.2
19.2
20.2
21.4

11.3
9.8
10.4
10.8
11.9
10.8

6,810
6,864
6,848
6,767
6,753
6,525

21.3
19.9
20.2
20.1
20.2
19.6

10.1
9.4
9.4
9.5
9.4
9.0

6,235
6,133
5,938
5,601
5,226
5,017

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1982:
Jan
Feb
Mar
May.;;;.;
June
July
Aug
Sept
Oct
Nov
Dec
1983:
Jan
Feb
Mar
May";;;
June
July
Aug
Sept
Oct
Nov
Dec

2,470
2,539
3,311
2,937

3,330
3,280
3,510
3,458
3,485
3,419

2,841
2,951
2,784
2,725
2,616
2,504

164

US

12.8
15.S
14.7
14.0
13.3

1
Because of independent seasonal adjustment of the various series, detail will not add to totals.
Note.—See footnote 5 and Note, Table B-29.
Source: Department of Labor, Bureau of Labor Statistics.




257

1,927
2,102
2,384
2,412

396
407
413
504
630
677
649
681
823
895
953
885
817
872
981
1,185
1,216

829
928
876
904
.870
841
831
836
784
787
790
826

2,083
2,285
2,285
2,348
2,427
2,389

1,077
1,119
1,081
1,099
1,155
1,069

2,485
2,412
2,443
2,242
2,576
2,684

1,223
1,292
1,279
1,300
1,242
1,282

826
830
888
816
808
799
752
799
858
866
868
855

2,557
2,505
2,460
2,491
2,404
2,436

1,199
1,188
1,182
1,251
1,246
1,412
1,229
1,214
1,234
1,127
1,154
1,150

438
431
436
550
590
641
683
760
827
903
909
874
880
891
923
840
830

945
909
965
1,228
1,472
1,456
1,340
1,463
1,892
1,928
1,963
1,857
1,806

2,415
2,479
2,362
2,322
2,250
2,246

TABLE B-32.—Civilian labor force participation rate and civilian employment/population ratio, 1948-83
[Percent; monthly data seasonally adjusted]
Civilian employment/population ratio2

Civilian labor force participation rate1
Year or month

1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959 .
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1982:
Jan
Feb
Mar
Apr
My
a
June
July
Aug
Sept
Oct
Nov
Dec
1983:
Jan
Feb
Mar
Apr
/ay
June
July
Aug
Sept
Oct
Nov
Dec

Total

Both
sexes
16-19

over

over

FeBoth Males males
20
20
sexes
Total 16-19 years years
and
and
years over
over
47.7
45.2
45.5
47.9
46.9
46.4
42 3
43.5
45.3
43.9
39.9
39.9
40.5
39.1
39.4
37.4
37.3
38.9
42.1
42 2
42.2
43.4
42.3
41.3
43 5
45.9
46 0
43.3
44 2
46.1
48 3
48.5
46.6
44.6
415
41.5

85.8
83.7
84.2
86.1
86.2
85.9
83 5
84.3
84.6
83.8
81.2
82.3
81.9
80.8
80.9
80.6
80.9
81.2
81.5
815
81.3
81.1
79.7
78.5
784
78.6
77 9
74.8
75.1
75.6
76.4
76.5
74.6
74.0
71.8
71.4

30.7
30.6
31.6
32.6
33.0
32.9
32 3
33.8
34.9
35.0
34.6
35.1
35.7
35.6
35.8
36.3
36.9
37.6
38.6
39 3
40.0
41.1
41.2
40.9
413
42.2
42.8
42.3
43.5
44.8
46.6
47.7
48.1
48.6
48.4
48.8

"55.2
56.5
57,3
56.8
55.3
55.9
55.9
55.3
55.4
55.3
55.5
56.0
56.8
57.2
57.4
58.0
57.5
56.8
57.4
58.2
58.3
56.7
57.5
58.6
60.0
60.6
60.0
60.0
58.8
58.9

58 0
5R7
59.5

FeMales males
20
20

White

Black
and
other

Black
and
other

58.8
58.9
59 2
59.3
590
58.9
588
593
60.0
59 6
59.5
59 3
59.4
59 3
58.8
58 7
58.7
58 9
59.2
59 6
59 6
60.1
60.4
60.2
604
60.8
613
61.2
616
62.3
63 2
63.7
63.8
63 9
64 0
64.0

52.5
52.2
518
52.2
513
50.2
483
489
50.9
49 6
47.4
46 7
47.5
47 0
46.2
45 2
44.5
45 7
48.2
48 4
48 3
49.5
49.9
49.7
519
53.7
54 8
54.0
54 5
56.0
57 8
57.9
56.7
55 4
541
53.5

88.6
88.5
88 4
88.4
88 3
88.0
87 8
87 6
87.6
86 9
86.6
86 3
86.0
85 7
84.8
84 4
84.2
83 9
83.6
83 4
83.1
82.8
82.6
82.1
816
81.3
810
80.3
79 8
79.7
79 8
79.8
79.4
79 0
78 7
78.5

31.8
32.3
33 3
34.0
341
33.9
34 2
354
36.4
36 5
36.9
37 0
37.6
38 0
37.8
383
38.9
394
40.1
411
41.6
42.7
43.3
43.3
43 7
44.4
45 3
46.0
47 0
48.1
49 6
50.6
51.3
521
52 7
53.1

58 2
58 7
59.4
591
58.9
58 7
58.8
58 8
58.3
58 2
58.2
58.4
58.7
59 2
59.3
59.9
60.2
60.1
604
60.8
614
61.5
618
62.5
63 3
63.9
64.1
64 3
64 3
64.3

64 3
64.3
64.9
64.4
64.8
64.3
64.5
64.1
63.2
63.0
63.1
62.9
63.0
62 8
62.2
62.1
61.8
60.9
60 2
60.5
60 3
59.6
59 8
60.4
62 2
62.2
61.7
613
616
62.1

56.6
55.4
56.1
57.3
57 3
57.1
55 5
56.7
57.5
57.1
55.4
56.0
56.1
55.4
55.5
55.4
55.7
56.2
56.9
57 3
57.5
58.0
57.4
56.6
57 0
57.8
57 8
56.1
568
57.9
59 3
59.9
59.2
59.0
57 8
57.9

63 7
63.9
63.9
64 0
64.3
64.0
64.1
64.0
64.1
64.0
64.1
64.0

54 2
54.8
54.2
54 5
55.5
52.4
53.2
53.9
54.1
54.2
54.5
53.7

78 6
78.7
78.7
78 8
79.0
78.8
78.8
78.6
78.9
78.8
78.8
78.6

52 2
52.4
52.6
52 6
52.9
53.0
53.0
53.0
52.8
52.7
52.9
53.0

64 0
64.3
64.2
64 4
64.6
64.3
64.4
64.4
64.5
64.3
64.4
64.4

611
61.3
61.5
611
61.7
61.2
61.6
61.9
61.7
62.1
61.9
62.2

58 2
58.2
58.1
58 0
58.2
57.9
57.7
57.7
57.6
57.3
57.2
57.1

42 3
42.4
42.3
421
42.8
40.6
40.4
41.2
41.3
41.3
41.4
40.7

72.6
72.7
72.4
72 3
72.5
71.9
71.7
71.5
71.4
71.1
70.9
70.7

48.4
48.4
48.4
48 2
48.5
48.7
48.6
48.6
48.4
48.1
48.1
48.2

59.2
59.3
59.1
59 0
59.3
58.9
58.8
58.8
58.6
58.4
58.3
58.2

51 7
51.4
51.2

63.8
63 8
63 8
63.9
63.8
64.3
64 2
64 3
64.3
64.0
64.0
64.0

53.5
531
53 2
53.0
52.6
54.7
53 7
54 4
53.8
52.8
53.3
53.7

78.2
78 2
78 2
78.4
78.4
78.7
78 7
78 6
78.6
78.4
78.4
78.3

53.0
52 9
52 9
52.9
52.8
53.2
53 1
53 3
53.4
53.2
53.2
53.2

64.1
641
64 0
64.1
64.0
64.5
64 4
64 6
64.6
64.4
64.5
64.5

61.9
62 0
62 1
62.2
62.1
62.7
62 4
62 3
62.3
61.5
61.4
61.5

57.2
57 2
57 2
57.3
57.3
57.9
581
58 2
58.3
58.3
58.6
58.8

41.2
410
40 7
40.6
40.5
41.8
41.5
42 0
42.1
41.4
42.5
42.9

70.6
70 5
70 7
70.8
70.9
71.5
71.8
717
71.8
72.0
72.3
72.5

48.2
48 2
48 2
48.4
48.4
48.6
48.9
49 0
49.3
49.2
49.4
49.4

58.3
58 2
58 2
58.4
58.4
58.9
59.1
59 3
59.4
59.4
59.8
59.9

50.3
50 7
50 fi
50.6
50.6
51.0

1

Civilian labor force as percent of civilian noninstitutional population in group specified.
Civilian employment as percent of civilian noninstitutional population in group specified.
Note.—Data relate to persons 16 years of age and over. See footnote 5 and Note, Table B-29.
Source: Department of Labor, Bureau of Labor Statistics.
2




White

258

56.7
57 5
57:9
5fi?
56.3
5fi?
57.0
57 R
58.4
5R0
58.1
56.8
54.9
541
55.C
51.4

s?n
52.5
55.2
53 6
5? 6
51.0

51.2
50.9
50.9
51.0
50.5
50.6
50.3
50.4

51 ?
51.5
51.2
51.5
51.5

TABLE B-33.— Unemployment rate, 1948-83
[Percent; monthly data seasonally adjusted]
Unemployment rate, all workers*

Year or
month

Unemployment rate,

all
workers l

All
civilian
workers

Males

Total

1619
years

Females
20
years
and

1619
years

Total

20
years
and

Both
sexes
1619
years

White

Black
and
other

Experienced
wage
and
salary
workers

Married
men,
spouse
present

9.8
14.3

1948
1949

8.3
12.3

9.2
13.4

3.5
5.6

5.9
8.9

4.3
6.8

3.5

1950....
1951
1952
1953
1954

5.2
3.2
2.9
2.8
5.4

12.7
8.1
8.9
7.9
13.5

11.4
8.3
8.0
7.2
11.4

12.2
8.2
8.5
7.6
12.6

4.9
3.1
2.8
2.7
5.0

9.0
5.3
5.4
4.5
9.9

6.0
3.7
3.4
3.2
6.2

4.6
1.5
1.4
1.7
4.0

1955
1956
1957
1958
1959

4.3
4.0
4.2
6.6
5.3

11.6
11.1
12.4
17.1
15.3

10.2
11.2
10.6
14.3
13.5

11.0
11.1
11.6
15.9
14.6

3.9
3.6
3.8
6.1
4.8

8.7
8.3
7.9
12.6
10.7

4.8
4.4
4.6
7.3
5.7

2.6
2.3
2.8
5.1
3.6

1960
1961
1962
1963
1964

5.4
6.5
5.4
5.5
5.0

15.3
17.1
14.7
17.2
15.8

13.9
16.3
14.6
17.2
16.6

14.7
16.8
14.7
17.2
16.2

5.0
6.0
4.9
5.0
4.6

10.2
12.4
10.9
10.8
9.6

5.7
6.8
5.6
5.6
5.0

3.7
4.6
3.6
3.4
2.8

1965
1966
1967
1968....
1969

4.4
3.7
3.7
3.5
3.4

14.1
11.7
12.3
11.6
11.4

15.7
14.1
13.5
14.0
13.3

14.8
12.8
12.9
12.7
12.2

4.1
3.4
3.4
3.2
3.1

8.1
7.3
7.4
6.7
6.4

4.3
3.5
3.6
3.4
3.3

2.4
1.9
1.8
1.6
1.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

4.8
5.8
5.5
4.8
5.5
8.3
7.6
6.9
6.0
5.8

15.0
16.6
15.9
13,9
15.6
20.1
19.2
17.3
15.8
15.9

15.6
17.2
16.7
15.3
16.6
19.7
18.7
18.3
17.1
16.4

15.3
16.9
16.2
14.5
16.0
19.9
19.0
17.8
16.4
16.1

4.5
5.4
5.1
4.3
5.0
7.8
7.0
6.2
5.2
5.1

8.2
9.9
10.0
9.0
9.9
13.8
13.1
13.1
11.9
11.3

4.8
5.7
5.3
4.5
5.3
8.2
7.3
6.6
5.6
5.5

2.6
3.2
2.8
2.3
2.7
5.1
4.2
3.6
2.8
2.8

1980

7.0
7.5
9.5
9.5

18.3
20.1
24.4
23.3

17.2
19.0
21.9
21.3

17.8
19.6
23.2
22.4

6.3
6.7
8.6
8.4

13.1
14.2
17.3
17.8

6.9
7.3
9.3
9.2

4.2
4.3
6.5
6.5

1981
1982....
1983....
1982:
Jan....
Feb....
Mar....

8.5
8.7
8.9
9.2
9.2
9.4

8.6
8.9
9.0
9.4
9.4
9.5

9.7
9.7
10.0
10.3
10.6
10.6

9.9
9.9
10.2
10.4
10.7
10.7

Jan....
Feb. .
Mar
ADr .
May .
June.

10.3
10.2
10.2
10.1
9.9
9.8

10.4
10.4
10.3
10.2
10.1
10.0

July..
Aug..
Sept..
Oct...,
Nov..,
Dec...,

9.3
9.3
9.1
8.7
8.3
8.1

wfay".
June...
July....
Aug....
Sept...
Oct....
Nov....
Dec...

22.6
22.9
23.2
24.1
23.7
24.5

7.6
7.7
8.0
8.2
8.2
8.7

8.5
8.9
8.9
9.3
9.3
9.1

21.3
22.3
20.5
21.3
21.9
20.4

22.0
22.6
21.9
22.8
22.9
22.5

7.6
7.8
8.0
8.3
8.2
8.4

15.4
16.1
16.6
16.7
17.0
16.9

8.2
8.4
8.7
9.1
9.1
9.2

5.4
5.4
5.6
6.0
6.1
6.5

10.1
10.1
10.6
10.9
11.1
11.1

25.3
24.7
25.2
25.3
25.6
25.7

9.0
9.0
9.5
9.8
10.0
10.0

9.6
9.5
9.6
9.8
10.2
10.2

22.6
22.4
22.1
22.3
22.5
22.8

24.0
23.6
23.7
23.9
24.1
24.3

8.7
9.0
9.2
9.6
9.6

17.5
17.5
18.1
18.6
18.7
18.9

9.5
9.4
9.8
10.1
10.5
10.5

6.8
6.8
7.2
7.5
7.5
7.5

10.7
10.8
10.7
10.7
10.5
10.1

24.3
24.0
25.1
24.4
23.9
24.0

10.0
9.9
9.9
9.6
9.5

21.8
21.3
21.9
22.3
22.0
23.1

23.1
22.7
23.6
23.4
23.0
23.6

9.1
9.2
9.1
8.9
8.8
8.6

18.9
18.2
18.6
18.7
18.5
18.6

10.1
10.1
10.0
9.9
9.8
9.4

7.2
7.2
7.1
7.1
7.0
6.7

21.5
21.1
20.6
20.5
20.1
19.8

22.7
22.8
21.8
21.6
20.2
20.1

8.2
8.2
8.0
7.7
7.3
7.1

17.9
17.9
17.3
16.7
16.1
16.3

9.1
9.1
8.8
8.5
8.1
7.9

6.2
6.3
6.1
5.7
5.5
5.2

8.7
8.8
9.1
9.4
9.4
9.8

1983:

1
2
3

9.5
9.5
9.2
8.8
8.4
8.2

9.9
9.8
9.6
9.1
8.6
8.3

23.8
24.3
22.8
22.5
20.2
20.4

Unemployed as percent of labor force including resident Armed Forces.
Unemployed as percent of civilian labor force in group specified.
Data for 1949 and 1951-54 are for April; 1950, for March.

Note.—Data relate to persons 16 years of age and over. See footnote 5 and Note, Table 8-29
Source: Department of Labor, Bureau of Labor Statistics.




259

TABLE B-34.—Civilian labor force participation rate by demographic characteristic, 1954-83
[Percent;1 monthly data seasonally adjusted]
White
Year or month

All
civilian
work- Total
ers
Total

16-19
years

Black and other

Males

Females
20
years Total
and
over

16-19
years

Males
20

Total

and
over

Total

16-19
years

Females
20
years
and Totat
over

16-19
years

1954

58.8

58.2

85.6

57.6

87.8

33.3

40.6

32.7

64.3

85.2

61.2

87.1

46.1

31.0

1955
1956
1957
1958
1959

59.3
60.0
59.6
59.5
59.3

58.7
59.4
59.1
58.9
58.7

85.4
85.6
84.8
84.3
83.8

58.6
60.4
59.2
56.5
55.9

87.5
87.6
86.9
86.6
86.3

34.5
35.7
35.7
35.8
36.0

40.7
43.1
42.2
40.1
39.6

34.0
35.1
35.2
35.5
35.6

64.3
64.9
64.4
64.8
64.3

85.0
85.1
84.3
84.0
83.4

60.8
61.5
58.8
57.3
55.5

87.8
87.8
87.0
87.1
86.7

46.1
47.3
47.2
48.0
47.7

32.7
36.3
33.2
31.9
28.2

1960
1961
1962
1963
1964

59.4
59.3
58.8
58.7
58.7

58.8
58.8
58.3
58.2
58.2

83.4
83.0
82.1
81.5
81.1

55.9
54.5
53.8
53.1
52.7

86.0
85.7
84.9
84.4
84.2

36.5
36.9
36.7
37.2
37.5

40.3
40.6
39.8
38.7
37.8

36.2
36.6
36.5
37.0
37.5

64.5
64.1
63.2
63.0
63.1

83.0
82.2
80.8
80.2
80.0

57.6
55.8
53.5
51.5
49.9

86.2
85.5
84.2
83.9
84.1

48.2
48.3
48.0
48.1
48.5

32.9
32.8
33.1
32.6
31.7

1965
1966
1967
1968
1969

58.9
59.2
59.6
59.6
60.1

58.4
58.7
59.2
59.3
59.9

80.6
80.7
80.4
80.2

54.1
55.9
56.3
55.9
56.8

83.9
83.6
83.5
83.2
83.0

38.1
39.2
40.1
40.7
41.8

39.2
42.6
42.5
43.0
44.6

38.0
38.8
39.8
40.4
41.5

62.9
63.0
62.8
62.2
62.1

79.6
79.0
78.5
77.6
76.9

51.3
51.4
51.1
49.7
49.6

83.7
83.3
82.9
82.2
81.4

48.6
49.3
49.5
49.3
49.8

29.5
33.5
35.2
34.8
34.6

1970
1971
1972
1973
1974

60.4
60.2
60.4
60.8
61.3

60.2
60.1
60.4
60.8
61.4

80.0
79.6
79.6
79.4
79.4

57.5
57.9
60.1
62.0
62.9

82.8
82.3
82.0
81.6
81.4

42.6
42.6
43.2
44.1
45.2

45.6
45.4
48.1
50.1
51.7

42.2
42.3
42.7
43.5
44.4

61.8
60.9
60.2
60.5
60.3

76.5
74.9
73.9
74.0
735

47.4
44.7
46.0
46.3
47.2

81.4
80.0
78.6
78.6
78.0

49.5
49.2
48.8
49.3
49.3

34.1
31.2
32.3
34.4
34.1

1975
1976
1977
1978
1979

61.2
61.6
62.3
63.2
63.7

61.5
61.8
62.5
63.3
63.9

78.7
78.4
78.5
78.6
78.6

61.9
62.3
64.0
65.0
64.8

80.7
80.3
80.2
80.1
80.1

45.9
46.9
48.0
49.4
50.5

51.5
52.8
54.5
56.7
57.4

45.3
46.2
47.3
48.7
49.8

59.6
59.8
60.4
62.2
62.2

71.9
71.2
71.6
72.6
72.5

42.9
42.3
43.6
45.4
44.0

76.8
76.1
76.2
77.1
77.1

49.4
50,4
51.2
53.5
53.7

35.6
33.6
33.6
38.0
37.8

1980
1981
1982
1983

63.8
63.9
64.0
64.0

64.1
64.3
64.3
64.3

78.2
77.9
77.4
77.1

63.7
62.4
60.0
59.4

79.8
79.5
79.2
78.9

51.2
51.9
52.4
52.7

56.2
55.4
55.0
54.5

50.6
51.5
52.2
52.5

61.7
61.3
61.6
62.1

71.5
70.6
71.0
71.3

43.5
41.7
40.6
40.9

75.9
75.0
75.4
75.6

53.6
53.6
53.9
54.4

35.9
34.5
34.5
33.4

June

63.7
63.9
63.9
64.0
64.3
64.0

64.0
64.3
64.2
64.4
64.6
64.3

77.4
77.6
77.5
77.6
77.9
77.3

61.2
60.9
60.6
60.8
62.7
57.9

79.1
79.3
79.2
79.3
79.4
79.3

51.9
52.1
52.2
52.4
52.6
52.5

54.4
55.2
54.3
55.9
55.6
54.3

51.6
51.8
52.0
52.0
52.3
52.4

61.1
61.3
61.5
61.1
61.7
61.2

70.4
70.6
70.8
70.8
71.0
70.6

40.1
42.3
42.0
39.9
40.7
36.9

74.8
74.7
75.0
75.4
75.5
75.6

53.5
53.7
53.8
53.1
54.0
53.6

34.1
35.7
34.5
31.4
34.3
30.7

July
Aug
Sept
Oct
Nov
Dec

64.1
64.0
64.1
64.0
64.1
64.0

64.4
64.4
64.5
64.3
64.4
64.4

77.3
77.3
77.6
77.5
77.5
77.3

58.0
59.5
59.3
59.3
60.0
59.5

79.2
79.1
79.4
79.3
79.2
79.1

52.7
52.6
52.5
52.4
52.5
52.6

55.1
54.8
55.4
55.5
55.3
54.2

52.5
52.4
52.3
52.1
52.3
52.5

61.6
61.9
61.7
62.1
61.9
62.2

71.0
71.1
71.1
71.5
71.4
71.4

38.3
41.7
41.3
41.8
40.9
40.6

75.8
75.5
75.5
75.8
75.8
75.9

54.0
54.3
53.9
54.3
54.0
54.5

35.7
36.1
35.8
35.0
35.0
35.3

63.8
63.8
63.8
63.9
63.8
64.3

64.1
64.1
64.0
64.1
64.0
64.5

76.8
76.9
76.8
76.9
76.9
77.3

59.1
59.2
59.1
58.6
58.9
59,9

78.6
78.7
78.6
78.7
78.7
79.0

52.6
52.4
52.3
52.4
52.2
52.8

55.0
54.3
54.9
53.9
53.0
55.4

52.4
52.2
52.1
52.2
52.2
52.6

61.9
62.0
62.1
62.2
62.1
62.7

70.9
70.6
70.9
71.7
71.1
72.7

40.4
38.9
39.5
39.1
39.3
45.6

75.2
75.1
75.4
76.2
75.6
76.6

54.5
54.8
54.9
54.5
54.7
54.5

33.3
32.0
31.7
34.8
33.0
35.6

64.2
64.3
64.3
64.0
64.0
64.0

64.4
64.6
64.6
64.4
64.5
64.5

77.3
77.3
77.3
77.1
77.3
77.2

59.7
59.9
60.0
58.6
59.6
59.8

79.0
78.9
79.0
78.9
78.9
78.9

52.7
53.0
53.0
52.8
52.8
52.9

54.6
55.9
54.5
53.8
53.9
54.6

52.5
52.7
52.8
52.7
52.7
52.8

62.4
62.3
62.3
61.5
61.4
61.5

72.3
71.8
71.5
70.6
70.8
70.5

42.5
41.9
42.3
40.2
41,0
40.0

76.7
76.1
75.5
74.9
75.1
74.7

54.3
54.4
54.6
54.0
53.5
54.0

32.7
34.7
33.5
33.1
32.9
33,8

1982:
Jan
Feb
Mar

1983:

Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec

,

1
Civilian labor force as percent of civilian noninstitutional population in group specified.
Note.—Data relate to persons 16 years of age and over.
See footnote 5 and Note, Table B 29.
Source: Department of Labor, Bureau of Labor Statistics.




260

TABLE B-35.—Civilian unemployment rate by demographic characteristic, 1948-83
[Percent;1 monthly data seasonally adjusted]
White

Year or month

All
civilian
workers

Black and other
Females

Males
Total
Total

16-19
years

20
years
and
over

Males
20

Total

16-19
years

Total
Total

and
over

16-19
years

1948
1949

5.9
8.9

13.4

10.4

9.0
5.3
5.4
4.5
9.9

9.4
4.9
5.2
4.8
10.3

14.4

1955..
1956..
1957..
1958..
1959..

11.3
10.5
11.5
15.7
14.0

9.1
9.7
9.5
12.7
12.0

8.7
8.3
7.9
12.6
10.7

8.8
7.9
8.3
13.7
11.5

13.4
15.0
18.4
26.8
25.2

I960..
1961..
1962..
1963..
1964.

14.0
15.7
13.7
15.9
14.7

12.7
14.8
12.8
15.1
14.9

10.2
12.4
10.9
10.8
9.6

10.7
12.8
10.9
10.5
8.9

1965
1966..
1967
1968
1969

12.9
10.5
10.7
10.1
10.0

14.0
12.1
11.5
12.1
11.5

8.1
7.3
7.4
6.7
6.4

1970
1971 . . . .
1972
1973
1974

13.7
15.1
14.2
12.3
13.5

13.4
15.1
14.2
13.0
14.5

1975...
1976...
1977...
1978...
1979...

18.3
17.3
15.0
13.5
13.9

1980...
1981...
1982...
1983...

Total

16-19
years

5.8
9.6

1950
1951
1952
1953
1954

Females
20
years
and
over

1982:
Jan...
Feb...
Mar..

9.9

8.4
6.1
5.7
4.1
9.2

20.6

8.4
7.4
7.6
12.7
10.5

8.5
8.9
7.3
10.8
9.4

19.2
22.8
20.2
28.4
27.7

24.0
26.8
22.0
27.3
24.3

9.6
11.7
10.0
9.2
7.7

9.4
11.9
11.0
11.2
10.7

24.8
29.2
30.2
34.7
31.6

7.4
6.3
6.0
5.6
5.3

23.3
21.3
23.9
22.1
21.4

6.0
4.9
4.3
3.9
3.7

9.2
8.7
9.1
8.3
7.8

31.7
31.3
29.6
28.7
27.6

8.2
9.9
10.0
9.0
9.9

7.3
9.1
8.9
7.7
9.2

25.0
28.8
29.7
26.9
31.5

5.6
7.3
6.9
5.8
6.9

9.3
10.9
11.4
10.6
10.8

34.5
35.4
38.4
34.4
34.5

17.4
16.4
15.9
14.4
14.0

13.8
13.1
13.1
11.9
11.3

13.6
12.7
12.3
11.0
10.4

35.2
35.1
36.6
34.0
31.3

11.6
10.6
10.0
8.7
8.5

13.9
13.6
13.9
13.0
12.3

38.3
38.8
39.6
38.1
35.6

16.2
17.9
21.7
20.2

14.8
16.6
19.0
18.3

13.1
14.2
17.3
17.8

13.2
14.1
18.2
18.5

34.4
37.5
44.0
45.0

11.3
12.1
16.2
16.5

13.1
14.3
16.4
17.1

36.5
38.3
43.8
44.6

8.6
8.9
9.0
9.4
9.4
9.5

7.7
7.8
8.0
8.3
8.3
8.7

20.8
20.5
20.2
21.8
21.0
21.7

18.4
19.4
17.8
18.9
18.6
17.6

16.1
16.6
16.7
17.0
16.9

16.7
17.5
17.2
17.5
17.9

40.3
45.6
43.1
43.9
47.6

14.7
14.7
15.2
15.2
15.4
15.7

14.5
15.6
15.7
16.2
16.5
15.8

42.6
42.1
42.3
41.1
46.7
41.5

July
Aug
Sept
Oct
Nov
Dec

9.9
9.9
10.2
10.4
10.7
10.7

9.1
9.1
9.4
9.7
10.0
10.0

22.5
22.1
22.2
22.6
22.7
22.8

19.1
18.7
19.1
19.9
19.8
20.4

17.5
17.5
18.1
18.6
18.7
18.9

17.8
18.2
19.5
20.1
19.8
20.3

44.7
41.8
44.5
44.3
48.6
47.0

15.8
16.2
17.5
18.1
17.6
18.2

17.0
16.8
16.6
16.9
17.5
17.3

48.0
49.8
43.8
41.3
43.2
42.5

1983:
Jan....
Feb....
Mar...
Apr....
May...
June..

10.4
10.4
10.3
10.2
10.1
10.0

21.5
21.4
22.6
21.4
20.4
20.4

19.0
18.7
19.6
19.1
19.4
19.7

18.9
18.2
18.6
18.7
18.5
18.6

19.9
19.2
19.3
19.8
19.8
19.6

44.7
43.2
43.9
46.5
49.1
47.4

18.1
17.5
17.5
17.9
17.5
17.2

17.7
17.1
17.8
17.5
17.2
17.6

42.7
41.4
41.6
45.3
41.4
45.9

9.5
9.5
9.2
8.8
8.4
8.2

20.3
20.7
18.9
19.8
17.6
17.5

18.4
18.2
17.4
16.9
16.6
16.5

17.9
17.9
17.3
16.7
16.1
16.3

19.1
18.7
17.7
16.8
16.1
15.9

46.0
48.5
48.2
41.7
39.0
41.1

16.9
16.3
15.4
14.9
14.3
14.0

16.6
17.1
16.7
16.6
16.1
16.7

44.7
44.7
44.8
48.3
46.6
48.1

June..

fczz

Sfczzi
Nov
Dec
1

Unemployment as percent of civilian labor force in group specified.

Note.—See footnote 5 and Note, Table B-29.
Source: Department of Labor, Bureau of labor Statistics.




261

TABLE B-36.—Unemployment insurance programs, selected data, 1950-83
All programs

Year or month

Covered
employment 1

State programs

Total
Insured
unemploy- benefits
Insured
paid
ment
unem(millions ployment
{weekly
averdolfars) 2 *
age)"

34,308
36,334
37,006
38,072
36,622
40,018
42J51
43,436
44,411
45,728
46,334
46,266
47,776
48,434
49,637
51,580
54,739
56,342
57,977
59,999
59,526
59,375
66,458
69,897
72,451
71,037
73,459
76,419
88,804
92,062
92,659
93,300
« 91,628

1982:
Jan....
Feb....
Mar...
May...
June..
July...
Aug...

S3!

Nov
Dec
1983:
Jan
Feb
Mar

fcz
June....
July...
Aug...
Sept..
Oct....
Nov
Dec

Exhaustions 8

Total
(millions
of
dollars)4

Average
weekly
check
(dollars) o

1,373.1
840.4

20.76
21.09
22.79
23.58
24.93
25.04
27.02
28.17
30.58
30.41

Weekly average; thousands

Thousands
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982

Initial
claims

Insured
unemployment as
percent
of
covered

4.6
2.8
2.9
2.8
5.2
3.5
3.2
3.6
6.4
4.4

236
208
215
218
304
226
227
270
369
277
331
350
302
7
298
268
232
203
226
201
200
296
295
261
247
363
478
386
375
346
388
488
460
533

1,467.6
862.9
1,043.5
1,050.6
2,291.6
1,560.2
1,540.6
1,913.0
4,290.6
2,854.3

1,513
969
1,044
990
1,870
1,265
1,215
1,446
2,510
1,684

3,022.8
4,358.1
3,145.1
3,025.9
2,749.2
2,360.4
1,890.9
2,221.5
2,191.0
2,298.6

1,908
2,290
1,783
* 1,806
1,605
1,328
1,061
1,205
1,111
1,101

4,209.3
6,154.0
5,491.1
4,517.3
6,933.9
16,802.4
12,344.8
10,998.9
9,006.9
9,401.3
16,175.4
15,287.1
23,774.8

1,805
2,150
1,848
1,632
2,262
3,986
2,991
2,655
2,359
2,434

4,681
4,723
4,892
4,760
4,387
4,328

1,836.0
1,904.5
2,298.1
2,141.1
1,871.9
2,003.9

3,577
3,582
3,775
3,982
3,972
4,011

563

4,495
4,398
4,282
4,391
4,635
5,074

1,966.7
2,034.1
2,004.4
1,928.1
2,065.3
2,410.0

5,459
5,437
5,134
4,642
3,947
3,481
3,274
2,917
2,580
2,478
2,602

1,605
1,000
1,069
1,067
2,051
1,399
1,323
1,571
2,773
1,860
2.071
2,994
1,946
U.973
1,753
1,450
1,129
1,270
1,187
1,177
2,070
2,608
2,192
1,793
2,558
4,937
3,846
3,308
2,645
2,592
3,837
3,410
4,590

4.8
5.6
4.4
4.3
3.8
3.0
2.3
2.5
2.2
2.1

998.2
962.2
2,026.9

1,350.3
1,380.7
1,733.9
3,512.7
2,279.0
2,726.7
3,422.7
2,675.4
2,774.7
2,522.1
2,166.0
1,771.3
2,092.3
2,031.6
2,127.9

32.87
33.80
34.56
35.27
35.92
37.19
39.75
41.25
43.43
46.17

3.4
4.1
3.5
2.7
3.5
6.0
4.6
3.9
3.3
2.9
3.9
3.5
4.6

3,848.5
4,957.0
4,471.0
4,007.6
5,974.9
11,754.7
8,974.5
8,357.2
7,717.2
8,612.9

50.34
54.02
56.76
59.00
64.25
70.23
75.16
78.79
83.67
89.67

13,761.1
13,262.1
20,650.0

98.95
106.70
119.39

573
579
560

61
67
74
82
80
86

4.1
4.1
4.3
4.6
4.5
4.6

1,765.1
1,783.4
2,075.5
1,849.9
1,573.4
1,736.3

114.95
117.05
117.44
117.90
118.33
118.32

3,988
4,136
4,379
4,615
4,635
4,428

539
617
654
659
618
546

82
83
80
83
87
92

4.6
4.7
5.0
5.3
5.3
5.1

1,682.1
1,747.3
1,711.3
1,647.3
1,820.0
2,138.0

117.67
119.22
121.03
122.90
123.46
123.55

2,463.3
2,349.7
2,780.2
2,182.9
1,908.5
1,798.0

3,941
3,907
3,894
3,832
3,586
3,329

509
485
493
484
458
411

100
99
102
102
90
87

4.5
4.5
4.5
4.4
4.1
3.8

2,205.6
2,052.4
2,370.7
1,816.5
1,587.9
1,537.3

124.29
124.47
125.56
124.85
124.49
123.44

1,412.3
1,425.4
1,167.4
1,066.5
1,147.8

3,110
2,991
2,896
2,848
2,799
2,729

384
414
393
403
405
397

3.6
3.5
3.4
3.3
3.3
3.2

1,298.2
1,337.2
1,104.4
1,010.8
1,094.2

121.59
121.42
121.36
123.06
109.33

3,350
3,047
4,061

59
2
54
7

**Monthly data are seasonally adjusted.
1
Includes persons under the State, UCFE (Federal employee, effective January 1955). and RRB (Railroad Retirement Board) programs.
Beginning October 1958, also includes the UCX program (unemployment compensation for ex-servicemen).
3
Includes State, UCFE, RR, UCX, UCV (unemployment compensation for veterans, October 1952 January 1960), and SRA
(Servicemen's Readjustment Act, September 1944-September 1951) programs. Also includes Federal and State extended benefit
programs. Does not include FSB (Federal supplemental benefits), SUA (special unemployment assistance), and Federal Supplemental
Compensation programs.
3
Covered workers who have completed at least 1 week of unemployment.
4
Annual data are net amounts and monthly data are gross amounts.
5
Individuals receiving final payments in benefit year.
8
For total unemployment only.
7
Programs include Puerto Rican sugarcane workers for initial claims and insured unemployment beginning July 1963.
8
Latest data available for all programs combined. Workers covered by State programs account for about 97 percent of wage and
salary earners.
Source: Department of Labor, Employment and Training Administration.




262

TABLE B-37.— Wage and salary workers in nonagricultural establishments, 1929-83
[Thousands of persons; monthly data seasonally adjusted]

Year or
month

Total
wage
and
salary
workers

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983"

31,324
23,699
30,603
32,361
36,539
40,106
42,434
41,864
40,374
41f652
43,857
44,866
43,754
45,197
47,819
48,793
50,202
48,990
50,641
52,369
52,853
51,324
53,268
54,189
53,999
55,549
56,653
58,283
60,765
63,901
65,803
67,897
70,384
70,880
71,214
73,675
76,790
78,265
76,945
79,382
82,471
86,697
89,823
90,406
91,156
89,596

1982: Jan
Feb
Mar....

Nov...
Dec...

90,396
90,417
90,207
90,024
90,016
89,775
89,450
89,264
89,235
88,938
88,785
88,665

1983: Jan....
Feb....
Mar...
Apr....
May...
June..
July...
Aug...
Sept..
Oct....
Nov p .
Dec".

88,746
88,814
89,090
89,421
89,844
90,152
89,748
90,851
91,087
91,413
91,644

May!!!!
June...
July....
Aug....

Manufacturing

Total

10,702
7,397
10,278
10,985
13,192
15,280
17,602
17,328
15,524
14,703
15,545
15,582
14,441
15,241
16,393
16,632
17,549
16,314
16,882
17,243
17,174
15,945
16,675
16,796
16,326
16,853
16,995
17,274
18,062
19,214
18,447
19,781
20,167
19,367
18,623
19,151
20,154
20,077
18,323
18,997
19,682
20,505
21,040
20,285
20,170
18,853
18,678
19,528
19,450
19,308
19,160
19,078
18,918
18,802
18,666
18,555
18,358
18,222
18,193
18,244
18,245
18,267
18,376
18,493
18,582
18,733
18,793
18,871
19,064
19,182
19,271

Durable
goods

4,715
5,363
6,968
8,823
11,084
10,856
9,074
7,742
8,385
8,326
7,489
8,094
9,089
9,349
10,110
9,129
9,541
9,833
9,855
8,829
9,373
9,459
9,070
9,480
9,616
9,816
10,405
11,282
11,439
11,626
11,895
11,208
10,636
11,049
11,891
11,925
10,638
11,077
11,597
12,274
12,760
12,187
12,109
11,100
10,931
11,625
11,561
11,469
11,350
11,289
11,169
11,095
10,961
10,862
10,685
10,577
10,559
10,594
10,608
10,617
10,689
10,788
10,844
10,961
11,022
11,081
11,235
11,326
11,394

Nondurable
goods

5,564
5,622
6,225
6,458
6,518
6,472
6,450
6,962
7,159
7,256
6,953
7,147
7,304
7,284
7,438
7,185
7,341
7,411
7,321
7,116
7,303
7,337
7,256
7,373
7,380
7,458
7,656
7,930
8,007
8,155
8,272
8,158
7,987
8,102
8,262
8,152
7,635
7,920
8,086
8,231
8,280
8,098
8,061
7,753
7,747
7,903
7,889
7,839
7,810
7,789
7,749
7,707
7,705
7,693
7,673
7,645
7,634
7,650
7,637
7,650
7,687
7,705
7,738
7,772
7,771
7,790
7,829
7,856
7,877

Mining

1,087
744
854
925
957
992
925
892
836
862
955
994
930
901
929
898
866
791
792
822
828
751
732
712
672
650
635
634
632
627
613
606
619
623
609
628
642
697
752
779
813
851
958
1,027
1,139
1,143
1,021
1,216
1,219
1,218
1,204
1,177
1,150
1,125
1,113
1,100
1,082
1,066
1,053
1,037
1,014
1,006
997
994
1,003
1,017
1,023
1,026
1,044
1,044
1,053

Construction

1,512
824
1,165
1,311
1,814
2,198
1,587
1,108
1,147
1,683
2,009
2,198
2,194
2,364
2,637
2,668
2,653
2,646
2,839
3,039
2,962
2,817
3,004
2,926
2,859
2,948
3,010
3,097
3,232
3,317
3,248
3,350
3,575
3,588
3,704
3,889
4,097
4,020
3,525
3,576
3,851
4,229
4,463
4,346
4,188
3,911
3,949
3,967
4,001
3,957
3,943
3,971
3,933
3,916
3,893
3,875
3,847
3,843
3,815
3,905
3,790
3,757
3,786
3,860
3,933
3,974
4,014
4,038
4,060
4,096
4,110

Transportation
and
public
utilities

3,916
2,672
2,936
3,038
3,274
3,460
3,647
3,829
3,906
4,061
4,166
4,189
4,001
4,034
4,226
4,248
4,290
4,084
4,141
4,244
4,241
3,976
4,011
4,004
3,903
3,906
3,903
3,951
4,036
4,158
4,268
4,318
4,442
4,515
4,476
4,541
4,656
4,725
4,542
4,582
4,713
4,923
5,136
5,146
5,165
5,081
4,943
5,142
5,136
5,123
5,117
5,117
5,099
5,075
5,056
5,054
5,033
5,019
5,008
4,979
4,966
4,963
4,988
4,993
4,992
4,984
4,341
5,031
5,019
5,027
5,024

Wholesale
and
retail
trade

6,123
4,755
6,426
6,750
7,210
7,118
6,982
7,058
7,314
8,376
8,955
9,272
9,264
9,386
9,742
10,004
10,247
10,235
10,535
10,858
10,886
10,750
11,127
11,391
11,337
11,566
11,778
12,160
12,716
13,245
13,606
14,099
14,705
15,040
15,352
15,949
16,607
16,987
17,060
17,755
18,516
19,542
20,192
20,310
20,547
20,401
20,508
20,426
20,461
20,447
20,427
20,454
20,454
20,438
20,410
20,380
20,344
20,320
20,256
20,355
20,343
20,350
20,329
20,356
20,494
20,529
20,580
20,612
20,666
20,705
20,732

Finance,
insurance,
and
real
estate

1,494
1,280
1,447
1,485
1,525
1,509
1,481
1,461
1,481
1,675
1,728
1,800
1,828
1,888
1,956
2,035
2,111
2,200
2,298
2,389
2,438
2,481
2,549
2,629
2,688
2,754
2,830
2,911
2,977
3,058
3,185
3,337
3,512
3,645
3,772
3,908
4,046
4,148
4,165
4,271
4,467
4,724
4,975
5,160
5,298
5,340
5,456
5,320
5,322
5,326
5,328
5,331
5,339
5,342
5,344
5,351
5,350
51356
5,367
5,374
5,384
5,391
5,423
5,435
5,451
5,465
5,488
5,499
5,503
5,523
5,537

Government
Services
Federal

3,425
2,861
3,502
3,665
3,905
4,066
4,130
4,145
4,222
4,697
5,025
5,181
5,240
5,357
5,547
5,699
5,835
5,969
6,240
6,497
6,708
6,765
7,087
7,378
7,620
7,982
8,277
8,660
9,036
9,498
10,045
10,567
11,169
11,548
11,797
12,276
12,857
13,441
13,892
14,551
15,303
16,252
17,112
17,890
18,619
19,064
19,685
18,919
18,970
18,957
18,984
19,020
19,046
19,083
19,097
19,136
19,144
19,187
19,215
19,238
19,262
19,356
19,478
19,546
19,568
19,770
19,335
19,913
19,956
20,051
20,122

533
565
905
996
1,340
2,213
2,905
2,928
2,808
2,254
1,892
1,863
1,908
1,928
2,302
2,420
2,305
2,188
2,187
2,209
2,217
2,191
2,233
2,270
2,279
2,340
2,358
2,348
2,378
2,564
2,719
2,737
2,758
2,731
2,696
2,684
2,663
2,724
2,748
2,733
2,727
2,753
2,773
2,866
2,772
2,739
2,753
2,741
2,737
2,737
2,733
2,731
2,738
2,737
2,739
2,735
2,742
2,746
2,747
2,748
2,742
2,742
2,738
2,756
2,742
2,738
2,746
2,778
2,764
2,771
2,771

Note.—Data in Tables B-37 through B-39 are based on reports from employing establishments and relate to full- and part-time wage
and salary workers in nonagricultural establishments who worked during or received pay for any part of the pay period which includes
the 12th of the month. Not comparabje with labor force data (Tables B-29 through B-35), which include proprietors, setf-employed
persons, domestic servants, and unpaid family workers; which count persons as employed when they are not at work because of
industrial disputes, bad weather, etc., even if they are not paid for the time off; and which are based on a sample of the working-age
population. For description and details of the various establishment data, see "Employment and Earnings."
Source: Department of Labor, Bureau of Labor Statistics.




263

TABLE B-38.—Average weekly hours and hourly earnings in selected private nonagricultural industries,
1947-83
[For production or nonsupervisory workers; monthly data seasonally adjusted, except as noted]
Average gross hourly earnings,
current dollars

Average weekly hours

Year or
month

Total
private
nonagricultural »

Apr

May
June
July
Aug
Sept
Oct
Nov
Dec

Construction

Wholesale
and
retail
trade

Total
private
nonagricultural1

Manufacturing

40 5
40 4
40*5
40.5
40.5
40.0
39.5
39.5
39.4

$1131
1225
1.275
1.335
1.45
1.52
1.61
1.65
1.71

$1216
1.327
1.376
1.439
1.56
1.64
1.74
1.78
1,85

391
38>
386

180

404
400

38 2

39.1
40.5
40.6
40.7
40.5
39.6
40.7

36.1
36 0
35*8
35.7
35 3
35.2
34 8
35.0

41.4
40 6
40.7
40.6
39.8
39 9
40.5
40 7
40.0
39 5
40.1
40 3
40.4
40.2
39 7
39.8
38 9
40.1

37.7
37.4
38.1
38.9
37.9
37.2
37.1
37 5
37*0
36.8
37.0
36 7
36.9
37.0
37.3
37.2
37.4
37.6
37 7
37.3
37.9
37.3
37 2
36.5
36 8
36.6
36 4
36.8
36 5
36.8
37.0
37 0
36.9
36 7
37.2

34.3
35.1
34.9
34.9
35.0
34.9
34.9
34.8
34.8
34.7
34.7
34.8

1947
1948.
1949..
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963...
1964
1965
1966
1967
1968
1969
1970
1971...
1972
1973..
1974
1975
1976
1977.
1978
1979
1980
1981
1982
1983 P
1982:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1983:
Jan
Feb
Mar

Manufacturing

37.5
39.5
39.0
39 0
39.1
39.1
39.1
39.0
38.8
38.9
39.0
39.0

35.1
37.0
37.1
36 8
37.3
36.8
37.1
36.8
36.5
36.3
36.4
36.8

31.7
32.0
31.9

35.1
34.5
34.8
34.9
35.1
35.1
35.0
35.0
35.2
35.3
35.2
35.2

39.7
39.2
39.5
40.1
40.0
40.1
40.2
40.3
40.8
40.6
40.6
40.5

38.9
36.6
36.5
36.9
37.2
37.2
37.3
37.2
37.5
36.5
36.5
37.0

40 3
40*0
39*4
39.8
39.9
39.9
39.6
39.1
39.6
39.3
38.8
38.5
39.0

386

!.

38!6
38.7
38.8
38.7
38.8
38.6

"

380

37.8
37.7
37.1
36 9
37.0
36 9
36.5

361

::

404

39.8
39 2
40.3
39 7
39.8
40.4
40.5
40.7

412

381

195

1.89

2.04

195

210

Construction

$1 540
1.712
1.792
1.863
2.02
2.13
2.28
2.38
2.45
2 57
2.71
2 82
2.93
3 07
3.20
3.31
3.41
3.55
3 70
3.89

Wholesale
and
retail
trade
$0 940
1010
1.060
1.100
1.18
1.23
1.30
1.35
1.40

147

1.54

160

2.02
2 09
2.14
2.22
2.28
2.36
2 46
2.56
2 68
2.85
3.04
3.23
3 45
3.70
3 94
4^24
4 53
4^86
5 25

2.19
2 26
2.32
2.39
2.45
2.53
2 61
2.71
2 82
3.01
3.19
3.35
3 57
3.82
4 09
4^42
4.83
5.22

568
617

771
810
866

6.16
6.66
7^25
7 67

&01

6.70
7.27
7^99
8.50
8.84

9.27
9 94
10*82
11.62
11.91

8.39
8.35
8.38
8 43
8*47
8.51
8.54
8.56
8.57
8.58
8.61
8.63

11.59
11.40
11.46
1148
11*57
11.57
11.63
11.65
11.66
11.77
11.71
11.88

6.09
6.09
6.12

32*0
31.9
32.0
32.0
31.9
31.9
31.8
32.1

7.53
7.54
7.56
7 59
7^65
7.67
7.70
7.73
7.73
7.76
7.78
7.82

31.9
31.4
31.7
31.7
31.9
32.0
31.9
31.8
31.8
32.1
32.0
32.1

7.88
7.91
7.91
7.95
7.97
8.00
8.03
7.98
8.08
8.13
8.13
8.17

8.68
8.76
8.75
8.78
8.79
8.82
8.85
8.84
8.87
8.94
8.99
9.00

11.86
12.00
12.00
12.02
11.86
11.85
11.82
11.83
11.96
11.92
11.88
11.94

38.8
38 6
38.3
38.2
38.1
37.9
37.7
37.1
36 6
36.1
35.7
35.3

351

34.9
34 6
34.2
33 9
33.7
33 3
32.9
32.6
32 2
32 2
31.9
31.9

319

569

1
Also includes other private industry groups shown in Table B-37.
2
Adjusted for overtime (in manufacturing only) and for interindustry
3

411

4.41
4.79
5.24
5 69
6.06

641
6'81
7.31

1.66

171
1.76
1.83
1.89
1.97
2 04
2.14
2 25
2.41
2.56
2.72
2 88
3.05
3 23
3.48
3 73
3.97
4 28
4 67
5.06

548
5^92
6,21
6.49

Adjusted hourly earnings, total
private nonagricultural 2
Index.
1977-100
Current
1977
dollars dollars3

216
23 4
24.5
25.4
27.3
28.7
30.3
31.3
32.4
34 0
35.7
37.2
38.5
39 8
41.0
42.4
43.6
44.8
46.4
48.4
50 8
53.9
57.5

613
65 7
69.8

741

80.0
86 7
92*9
100 0
108*2
116.8
127 3
138*9
148 3
155*1

58 5
58.9
62.3
64.0
63.6
65.5
68.7
70.5
73.3
75.9
76.9
78.0
80.0

814
83.0
85.0
86.3
87.5
89.0
90.3
92.2
94.0
95.0
95.7

983
101.2
1011
98.3
97 6
99*0
100 0
100.5
97.4
93 5
92*6
93 3
94.7

Percent change
from a year
earlier4
Current
dollars

1977
dollars

8.3
4.7
3.7
7.5
5.1
5.6
3.3
3.5
4.9
5.0
4.2
3.5
3.4
3.0
3.4
2.8
2.8
3.6
4.3
5.0
6.1
6.7
6.6
72
6.2
62
8.0
84
7.2
76
8.2
7.9
90
S.l
6.8
4.6

0.7
5.8
2.7
-.6
3.0
4.9
2.6
4.0
3.5
1.3
1.4
2.6
18
2.0
2.4
1,5
1.4
1.7
1.5
2.1
2.0
1.1
.7
27
3.0
= 1
-2.8
- 7

1.4
Id
.5

=3.1
-4 0

-L0
.8
1.5
.1
.1
.6
7
.7
.1
.7
.7

93.1
93.1
93.5
93 8

8.3
7.5
7.2

6!l8
6.20
6.23
6.24
6.24
6.29
6.32
6.33

144.9
145.1
145.5
146 4
147*5
148.0
148.8
149.6
150.0
150.7
151.1
151.9

92.8
92.8
93.0
93.1
93.1
93.4
94.1

6.1

1.2

6.2
5.7
6.0

1.2
1.1
2.0

6.35
6.39
6.40
6.43
6.45
6.49
6.51
6.52
6.54
6.59
6.59
6.61

152.7
153.4
153.4
154.0
154.6
154.8
155.2
155.0
155.9
156.8
156.8
157.6

94.7
95.3
95.0
94.8
94.7
94.8
94.7
94.0
94.2
94.4
94.3
94.6

5.4
5.7
5.4
5.2
4.8
4.6
4.3
3.6
3.9
4.1
3.8
3.7

1.8
2.4
1.6
1.2
1.4
2.1
2.1
1.2
1.2
1.4
1.0
.5

614

915

7 i

1.2
7.0
7.0
6.6

employment shifts.
Current-dollar earnings index divided by the consumer price index for urban wage earners and clerical workers on a 1977-100
base.
4
Monthly data are computed from indexes to two decimal places and are based on data not seasonally adjusted.
Note.—See Note, Table B-37.
Source: Department of Labor, Bureau of Labor Statistics.




264

TABLE B-39.—Average weekly earnings in selected private nonagricultural industries, 1947-83
[for production or nonsupervisory workers; monthly data seasonally adjusted, except as noted]
Average gross weekly earnings
Year or month

1977
dollars"

Manufacturing
(current
dollars)

Construction
(current
dollars)

$45.58
49.00
50.24
53.13
57.86
60.65
63.76
64.52
67.72
70 74
73.33
75.08
78.78
80.67
82 60
85.91
88.46
91.33
95.45
98.82
10184
107.73
114.61
119.83
127 31
136.90
145 39
154.76
163.53
175.45
189 00
203.70
219.91
235.10
255 20
266.92
280.35

$123.52
123.43
127.84
133.83
134.87
138.47
144.58
145.32
153.21
157.90
158.04
157.40
163.78
164.97
167.21
172.16
175.17
178.38
183.21
184.37
184.83
187.68
189.44
186.94
190 58
198.41
198 35
190.12
184.16
186.85
189 00
189.31
183.41
172.74
17013
167.87
171.15

$49.13
53.08
53.80
58 28
63.34
66 75
70.47
70.49
75.30
78 78
81.19
82.32
88.26
89.72
92 34
96.56
99 23
102.97
107.53
112.19
114.49
122.51
129.51
133.33
142 44
154.71
166 46
176.80
190.79
209 32
228 90
249 27
269.34
288 62
318 00
330.65
354.48

$58.83
65.23
67.56
69.68
76.96
82 86
86.41
88.54
90.90
96 38
100.27
103.78
108.41
112.67
118 08
122.47
127.19
132.06
138 38
146.26
154.95
164.49
181.54
195.45
21167
221.19
235 89
249.25
266.08
283.73
295 65
318.69
342.99
367.78
399 26
426.45
443.05

$38.07
40.80
42.93
44 55
47.79
49.20
51.35
53.33
55.16
57 48
59.60
61.76
64.41
66.01
67.41
69.91
72.01
74.66
76.91
79.39
82.35
87.00
91.39
96.02
101.09
106.45
111.76
119.02
126.45
133.79
142.52
153.64
164.96
176.46
190 62
198.10
207.03

7.5
2.5
58
8.9
4.8
5.1
1.2
5.0
45
3.7
2.4
4.9
2.4
2.4
4.0
3.0
3.2
4.5
3.5
3.1
5.8
6.4
4.6
6.2
7.5
6.2
6.4
5.7
7.3
7.7
7.8
8.0
6.9
8.5
4.6
5.0

-0.1
3.6
4.7
.8
2.7
4.4
.5
5.4
31
.1

258 28
264 65
263.84
264.89
267 75
267.68
268.73
269.00
269 00
269 27
269.97
272.14

165 88
169 87
169.56
169.69
169 78
167.93
167.54
167.18
166.98
166 32
166.96
168.61

314 63
329 83
326.82
328.77
331 18
332.74
333.91
333.84
332 52
333 76
335.79
336.57

40681
421 80
425.17
422.46
43156
425.78
431.47
428.72
425 59
427 25
426.24
437.18

193 05
194 88
195.23
195.87
197.76
197.78
199.36
199.68
199.06
200 65
200.98
203.19

3.7
63
5.1
4.8
5.3
4.8
4.9
4.3
4.0
3.4
3.4
4.4

-4.1
-1.0
-1.3
-1.4
-1.1
-2.0
-1.3
-1.4
-.9
-1.6
-1.1
.5

276 59
272.90
275.27
277.46
279 75
280.80
281.05
279.30
284.42
286 99
28618
287.58

17148
169.61
170.45
170.85
17142
171.85
171.37
169.48
171.85
172.78
17198
172.62

344 60
343.39
345.63
352 08
35160
353.68
355.77
356 25
36190
362 96
364 99
364.50

46135
439.20
438.00
443.54
441 19
440.82
440.89
440.08
448.50
435 08
433 62
441.78

202.57
200.65
202.88
203.83
205.76
207.68
207.67
207.34
207.97
211.54
210 88
212.18

6.8
3.1
4.3
4.7
4.6
4.9
4.8
3.7
6.0
6.4
5.6
5.8

3.1
-.2
.6

Current
dollars
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972 ..
1973
1974
1975
1976
1977
1978
1979
1980
1981. ..
1982
1983*
1982:
Jan
Feb
Mar
Apr
IVfay
June
July
Aug
Sept
Oct
Nov
Dec
1983:
Jan
Feb
Mar
Apr
May ....
June
July
Aug
Sept
Oct p
Nov
Dec

.

...

1

Also includes other private industry groups shown in Table B-37.
Earnings in current dollars divided by the consumer price index on a 1977=100 base.
Based on data not seasonally adjusted.
Note.—See Note, Table B-37.
Source: Department of Labor, Bureau of Labor Statistics.
2
3




Percent change from
a year earlier, total
private
nonagricultural3

Wholesale
and retail

Total private
nonagricultural1

265

traHa

(current
dollars)

Current
dollars

1977
dollars

.7
1.4
3.0
1.7
1.8
2.7
.6
.2
1.5
.9
-1.3
1.9
4.1
-.0
-4.1
-3.1
1.5
1.2
.2
-3.1
-5.8
-1.5
-1.3
2.0

1.2
2.4
2.5
1.3
3.2
3.7
2.6
2.5

TABLE B-40.—Productivity and related data, business sector, 1947-83
[1977=100; quarterly data seasonally adjusted]

Output per hour
of all persons

Hours of 2all
persons

Output l

Compensation per Real compensation
hour 3
per hour 4

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

ness
sector

Nonfarm
business
sector

1947
1948
1949

43.7
46.0
46.7

49.9
52.0
53.1

35.0
37.2
36.5

34.0
36.0
35.3

80.2
80.7
78.1

68.1
69.2
66.6

17.0
18.4
18.7

18.5
20.1
20.6

46.1
46.4
47.6

50.1
50.5
52.5

1950
1951
1952
1953
1954

50.4
51.8
53.5
55.2
56.1

56.3
57.2
58.6
59.5
60.4

39.8
42.1
43.5
45.4
44.6

38.6
41.1
42.5
44.3
43.4

78.9
81.3
81.4
82.2
79.5

68.7
71.9
72.6
74.5
71.9

20.0
22.0
23.4
24.9
25.7

21.8
23.8
25.1
26.5
27.3

50.5
51.3
53.4
56.4
58.0

1955
1956
1957
1958
1959

58.3
58.9
60.4
62.3
64.2

62.7
62.9
64.0
65.5
67.7

48.1
49.3
49.8
49.0
52.6

47.0
48.3
48.9
48.0
51.8

82.5
83.7
82.5
78.8
81.9

74.9
76.8
76.4
73.2
76.5

26.4
28.1
29.9
31.2
32.6

28.3
30.0
31.7
32.9
34.2

1960
1961
1962
1963
1964

65.2
67.3
69.9
72.5
75.6

68.3
70.3
72.8
75.1
78.1

53.5
54.4
57.4
59.9
63.5

52.5
53.5
56.6
59.1
62.8

82.0
80.8
82.1
82.6
83.9

77.0
76.1
77.8
78.7
80.5

33.9
35.2
36.8
38.2
40.2

1965
1966
1967
1968
1969

78.3
80.7
82.5
85.3
85.5

80.5
82.5
84.0
86.8
86.5

67.8
71.5
73.1
76.8
79.0

67.2
71.2
72.7
76.6
78.8

86.6
88.6
88.6
90.1
92.5

83.5
86.3
86.5
88.2
91.1

1970
1971
1972
1973
1974

86.2
89.2
92.4
94.7
92.5

86.8
89.7
93.0
95.3
92.9

78.4
80.7
86.1
91.7
89.9

78.0
80.3
85.8
91.7
89.8

91.0
90.5
93.2
96.8
97.3

1975
1976
1977
1978
1979

94.5
97.6
100.0
100.6
99.4

94.7
97.8
100.0
100.6
99.1

88.2
93.8
100.0
105.5
107.8

87.8
93.7
100.0
105.7
108.0

1980
1981
1982
1983 "..
...

98.9
101.3
101.2
103.8

98.4
100.3
100.2
103.4

106.5
109.8
106.7
111.0

100.5
101.1
102.3
101.2

100.1
100.1
101.1
99.9

101.1
1007
101.1
101.9
102.5
if""!".....; 103.9
Ill
104.2
IV
104.8

II
Ill
IV

Unit labor cost

Implicit price
deflator»

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

38.9
40.0
40.1

37.0
38.6
38.9

38.1
40.8
40.3

36.6
39.1
39.4

55.0
55.4
57.2
59.9
61.6

39.8
42.5
43.8
45.1
45.9

38.8
41.5
42.8
44.4
45.2

41.0
44.0
44.5
44.9
45.3

40.1
42.8
43.5
44.4
45.0

59.6
62.6
64.4
65.5
67.7

64.0
66.8
68.2
68.9
71.1

45.2
47.7
49.5
50.2
50.7

45.1
47.6
49.5
50.2
50.5

46.0
47.6
49.2
49.8
50.8

46.0
47.6
49.3
49.7
50.9

35.7
36.8
38.3
39.6
41.4

69.5
71.3
73.7
75.5
78.4

73.0
74.6
76.7
78.4
80.9

52.1
52.3
52.7
52.7
53.1

52.3
52.4
52.6
52.7
53.1

51.6
51.9
52.6
53.2
53.7

51.6
51.9
52.7
53.3
53.9

41.7
44.6
47.0
50.7
54.2

42.8
45.4
47.9
51.5
54.8

80.1
83.3
85.3
88.3
89.6

82.2
84.7
86.9
89.6
90.6

53.3
55.3
56.9
59.4
63.4

53.2
55.0
57.0
59.3
63.4

54.7
56.4
57.9
60.3
63.2

54.8
56.3
58.1
60.4
63.3

89.8
89.5
92.3
96.2
96.7

58.2
62.0
66.1
71.3
78.0

58.7
62.5
66.7
71.7
78.5

90.8
92.8
95.7
97.3
95.9

91.5
93.5
96.6
97.8
96.4

67.5
69.5
71.5
75.3
84.4

67.6
69.7
71.7
75.3
84.5

66.0
69.0
71.3
75.3
82.4

66.3
69.3
71.3
74.0
81.6

93.3
96.0
100.0
104.9
108.5

92.7
95.8
100.0
105.0
109.0

85.5
92.9
100.0
108.6
118.7

86.0
93.0
100.0
108.6
118.4

96.3
98.9
100.0
100.9
99.1

96.8
99.0
100.0
100.9
98.9

90.5
95.1
100.0
108.0
119.5

90.8
95.1
100.0
108.0
119.5

90.4
94.7
100.0
107.5
117.2

90.0
94.6
100.0
107.1
116.5

106.5
109.3
106.3
110.9

107.6
108.4
105.4
106.9

108.2
109.0
106.0
107.3

131.2
143.9
155.1
163.1

130.7
143.5
154.7
163.5

96.5
95.9
97.4
99.2

96.1
95.6
97.1
99.4

132.7
142.1
153.3
157.1

132.8
143.0
154.4
158.1

128.1
140.1
147.7
153.2

128.1
140.4
148.6
154.1

109.2
109.8
111.2
108.9

109.2
109.4
110.5
108.2

108.6
108.6
108.7
107.7

109.1
109.2
109.4
108.2

139.7
142.2
145.5
148.2

139.3
141.8
145.1
147.7

96.3
96.1
95.6
95.6

96.0
95.8
95.3
95.4

139.0
140.7
142.3
146.4

139.2
141.6
143.5
147.8

136.3
138.2
141.5
144.3

136.2
138.4
141.8
145.0

100.0
99.9
100.4
100.8

107.2
106.9
106.6
106.0

106.5
106.7
106.5
105.4

106.0
106.2
105.4
104.0

106.5
106.8
106.0
104.6

151.6
153.9
156.5
158.7

151.3
153.5
156.1
158.3

97.1
97.4
97.1
98.0

96.9
97.1
96.9
97.8

149.9
152.9

151.3
153.6

155.6

157.1

145.5
147.5
148.5
149.4

146.4
148.3
149.1
150.5

101.7
103.5
104.0
104.3

107.1
110.4
112.4
113.9

106.7
110.2
112.5
114.2

104.5
106.2
107.9
108.7

104.9
106.5
108.2
109.5

160.7
162.1
163.6
166.4

161.0
162.7
164.2
166.0

99.4
99.2
98.9
99.5

99.5
99.6
99.3
99.3

156.9
156.0
156.9
158.8

158.3
157.2
157.8
159.2

151.5
152.5
153.8
155.2

152.4
153.4
154.7
155.9

Busi-

1983:

1
2

Output refers to gross domestic product originating in the sector in 1972 dollars.
Hours of all persons engaged in the sector, including hours of proprietors and unpaid family workers. Estimates based primarily on
establishment data.
3
Wages and salaries of employees plus employers' contributions for social insurance and private benefit plans. Also includes an
estimate of wages, salaries, and supplemental payments for the self-employed.
4
Hourly compensation divided by the consumer price index for all urban consumers.
5
Current dollar gross domestic product divided By constant dollar gross domestic product.
Source: Department of Labor, Bureau of Labor Statistics.




266

TABLE B-41.—Changes in productivity and related data, business sector, 1948-83
[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]
Output per hour
of all persons
Year or quarter

Nonfarm
Business business
sector
sector

sector

Compensation per
hour 3

Hours of 2all
persons

Output 1

Nonfarm
Nonfarm
business Business business
sector
sector
sector

sector

Unit labor cost

per hour*

Nonfarm
Nonfarm
business Business lusiness
sector
sector
sector

sector

Nonfarm
lusiness
sector

Nonfarm
business
sector
4.1
.9

7.0
-1.0

6.9
3.0
3.1
1.6

-.2
6.9
3.1
3.9
1.7

1.6
7.4
1.1
.9
1.0

3.9
4.4
2.2
1.0
3.2

-1.4
5.5
3.9
1.3
1.0

-.3
5.7
3.9
1.4
.6

1.6
3.3
3.5
1.3
2.0

2.6
2.7
3.4
2.5
3.8

2.7
2.1
2.8
2.2
3.2

2.7
.5
.7
.0
.8

3.5
.3
.4
.2
.6

1.4
.6
1.5
1.1
1.0

3.4
6.0
5.5
7.5
6.5

2.2
4.0
2.4
3.5
1.5

1.7
3.0
2.6
3.2
1.1

.3
3.8
3.0
4.4
6.7

.3
3.5
3.5
4.1
6.8

1.9
3.0
2.7
4.0
4.9

7.3
6.6
6.5
8.0
9.4

7.0
6.6
6.7
7.6
9.4

1.3
2.2
3.1
1.6
-1.4

1.0
2.2
3.3
1.3
-1.4

6.4
2.9
2.9
5.3
12.1

6.6
3.1
2.8
5.0
12.2

4.5
4.4
3.4
5.5
9.5

-4.1
3.4
4.4
5.0
3.7

9.6
8.6
7.7
8.6
9.4

9.6
8.1
7.5
8.6
9.0

.5
2.6
1.2
.9
-1.7

.4
2.2
1.0
.9
-2.0

7.3
5.1
5.1
8.0
10.7

7.5
4.8
5.2
8.0
10.7

9.8
4.7
5.6
7.5
9.0

-.8
.7
-2.7
1.4

-.7
.7
-2.7
1.2

10.5
9.7
7.7
5.2

10.4
9.8
7.8
5.6

-2.6
-.6
1.5
1.9

-2.8
-.6
1.6
2.3

11.1
7.1
7.9
2.5

11.1
7.7
7.9
2.4

9.2
9.4
5.4
3.7

2.3
.1
.5
-3.9

2.4
.5
.5
-4.0

11.5
7.4
9.6
7.5

11.5
7.3
9.6
7.6

.8
-1.0
-2.2
.3

5.3
5.0
4.7
12.2

6.0
6.9
5.6
12.6

11.2
5.6
9.9
8.2

-6.0
.6
-2.7
-5.4

-6.2
1.2
-2.9
-5.3

9.4
6.4
6.7
5.7

10.0
5.8
7.2
5.8

6.3
1.1
-1.0
3.7

6.8
.5
-.6
3.7

2.1
6.5
6.5
3.0

1.2
6.2
6.4
5.0

6.8
4.3
3.8
4.5

5.8
-.7
-1.1
2.2

7.2
.1
-.9
-.2

3.3
-2.2
2.3
4.8

3.0
-2.6
1.5
3.5

5.5
2.8
3.3
3.7

1948
1949

5.3
1.5

4.3
2.0

6.1
-1.9

6.0
-1.9

0.7
-3.3

1.6
-3.8

8.5
1.6

8.6
2.9

0.7
2.6

0.8
3.9

1950
1951
1952
1953
1954

7.9
2.8
3.2
3.2
1.6

6.0
1.7
2.3
1.7
1.4

9.1
5.8
3.3
4.3
-1.8

9.4
6.5
3.4
4.2
-2.0

1.1
2.9
.1
1.0
-3.3

3.1
4.6
1.0
2.5
-3.4

7.1
9.8
6.4
6.4
3.2

5.8
8.8
5.5
5.6
3.2

6.0
1.7
4.1
5.7
2.8

.7
3.2
4.8
2.7

1955
1956
1957
1958...
1959

4.0
1.0
2.5
3.1
3.2

3.9
.3
1.7
2.4
3.4

7.9
2.6
1.0
-1.6
7.3

8.2
2.8
1.2
-1.9
7.9

3.8
1.5
-1.5
-4.5
3.9

4.1
2.5
-.5
-4.2
4.4

2.5
6.5
6.5
4.4
4.3

3.6
6.0
5.7
3.8
4.0

2.8
4.9
2.9
1.6
3.5

1960
1961
1962
1963
1964

1.5
3.3
3.8
3.7
4.3

2.9
3.6
3.2
3.9

1.6
1.7
5.5
4.3
6.0

1.5
1.8
5.8
4.4
6.4

.2
-1.5
1.6
.6
1.6

.6
-1.1
2.2
1.1
2.4

4.2
3.8
4.6
3.7
5.2

4.3
3.2
4.0
3.5
4.5

1965
1966
1967
1968
1969

3.5
3.1
2.3
3.3
.2

3.1
2.5
1.9
3.3
-.3

6.8
5.5
2.2
5.1
2.9

6.9
5.9
2.1
5.3
2.9

3.2
2.3
.0
1.7
2.6

3.7
3.4
.3
2.0
3.2

3.9
7.0
5.3
7.8
7.0

1970
1971
1972
1973
1974

3.6
3.5
2.6
-2.4

.3
3.3
3.7
2.4
-2.5

3.0
6.6
6.6
-2.0

-1.0
2.9
6.9
6.8
-2.0

-1.6
— 5
3*0
3.9
.4

-1.3
-.4
3.1
4.3
.5

1975
1976
1977
1978
1979

2.2
3.3
2.4
.6
-1.2

2.0
3.2
2.2
.6
-1.5

-2.0
6.4
6.6
5.5
2.3

-2.2
6.7
6.7
5.7
2.2

-4.1
3.0
4.1
4.9
3.5

1980
1981
1982
1983*

-.5
2.4
-.1
2.6

-.7
1.9
-.1
3.1

-1.3
3.1
-2.8
4.0

-1.4
2.7
-2.8
4.4

1981:
I
II
Ill
IV

5.9
2.2
4.7
-4.1

5.2
.4
3.8
-4.4

8.3
2.3
5.2
-7.8

7.8

-.4
-1.6
1.7
3.3

.1
-.4
2.3
1.3

-6.3
-1.0
-1.1
-2.3

4.3
-8.3

Implicit price
deflator*

1982:

\\""Z'"Z
III
IV
1983:
I

3.7
7.1
2.3
1.0

4.2
12.7
7.8
5.3

-6.2
-.6
-4.1
4.9
13.7
8.9
6.0

1
Output refers to gross domestic product originating in the sector in 1972 dollars.
2
Hours of all persons engaged in the sector, including hours of proprietors and unpaid family workers. Estimates based primarily on
establishment data.
3
Wages and salaries of employees plus employers' contributions for social insurance and private benefit plans. Also includes an
estimate of wages, salaries, and supplemental payments for the self-employed.
4
Hourly compensation divided by the consumer price index for all urban consumers.
5
Current dollar gross domestic product divided by constant dollar gross domestic product.

Note.—Data relate to all persons engaged in the sector. Percent changes are based on original data and therefore may differ slightly
from percent changes based on indexes in Table B-40.
Source: Department of Labor, Bureau of Labor Statistics.




267

PRODUCTION AND BUSINESS ACTIVITY
TABLE B-42.—Industrial production indexes, major industry divisions, 1929-83
[1967 ==100; monthly data seasonally adjusted]

Year or month

1967 proportion
1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948.
..
.
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983"
1982:
Jan
Feb
Mar
Apr
May..
June' '
July
Aug
,
Sept
Ot
c
Nv
o
Dc
e
1983:
Jan
Feb
Mr
a
Ar
p
My
a
June
July
Aug
Sept
Oct p
Nov
Dec

Manufacturing

Total
industrial
production

Total

Durable

Nondurable

100.00

87.95

51.98

21.6
13.7
217
25 0
31.6
36 3
44.0
47.4
40.7
35.0
394
41.1
38 8
44.9
48.7
50.6
54.8
51.9
58.5
611
61.9
57.9
64.8
66.2
66.7
72.2
76.5
81.7
89.8
97.8
100 0
1063
111.1
107 8
109.6
119 7
129 8
129 3
117 8
130.5
138.2
1461
152.5
147 0
151.0
138 6
147.7

22.8
14.0
21.5
25.4
32.4
37.8
47.0
50.9
42.6
35.3
39.4
40.9
38.7
45.0
48.6
50.6
55.2
51.5
58.2
60.5
61.2
57.0
64.2
65.4
65.6
71.5
75.8
81.0
89.7
97.9
100 0
106.4
111.0
106 4
108.2
118.9
129 8
129.4
116 3
130.3
138.4
146 8
153.6
146.7
150.4
137.6
148.5

22.5
91
.
17.7
23.5
31.4
39.9
54.2
59.9
45.2
31.6
37.7
39.3
35.7
43.5
48.9
51.9
58.7
51.8
59.2
61.1
61.6
53.9
61.9
62.9
61.8
68.6
73.1
78.3
89.0
98.9
100.0
106.5
110.6
102.3
102.4
113.7
1271
125.7
109.3
122.3
130.0
139.7
146.4
136.7
140.5
124.7
134.6

140 7
142.9
141.7
140.2
139.2
138.7
138.8
138.4
137.3
135 7
134 9
135.2

138 5
140.9
140.1
138.7
137.9
137.7
138.1
138.0
137.1
135.0
134.0
134.5

137.4
138.1
140.0
142 6
144 4
146.4
149 7
151.8
153.8
155.0
1561
156.9

136.7
138.2
140.4
143.1
145.1
147.4
150 6
152.8
155.1
156.4
157 2
157.8

Source: Board of Governors of the Federal Reserve System.




268

Mining

Utilities

35.97

6.36

5.69

23.2
19.9
26.1
27.5
33.3
34.6
37.1
38.6
38.5
39.7
41.3
42.7
42.0
46.7
48.3
49.2
51.2
51.6
57.2
60.1
61.1
61.6
67.7
69.3
71.5
75.8
80.0
85.2
90.9
96.7
100.0
106.2
111.5
112.3
116.6
126.5
133.8
134.6
126.4
141.8
150.5
156.9
164.0
161.2
164.8
156.2
168.5

43.1
30.6
42.1
46.8
49.7
51.3
52.5
56.2
55.1
54.2
61.3
64.4
57.1
63.8
70.0
69.4
71.2
69.9
77.9
82.0
82.1
75.3
78.7
80.3
80.8
83.1
86.4
89.9
93.2
98.2
100.0
104.2
108.3
112.2
109.8
113.1
114.7
115.3
112.8
114.2
118.2
124.0
125.5
132.7
142.2
126.1
116.5

74
.
67
.
10.7
11.8
13.3
14.9
16.5
17.5
17.8
18.6
20.1
22.4
23.9
111
31.0
33.7
36.5
39.3
43.9
48.2
51.5
53.9
59.3
63.4
67.0
72.0
77.0
83.6
88.7
95.5
100.0
108.4
117.3
124.5
130.5
139.4
145.4
143.7
146.0
151.7
156.5
161.4
166.0
168.3
169.1
168.7
172.7

127 1
129.3
128.2
126.7
126.1
125.5
125.9
124.9
123.5
120.3
119.3
119.9

155.1
157.8
157.3
156.1
155.0
155.3
155.7
156.9
156.7
156.2
155.3
155.6

144.5
142.4
138.1
134.1
128.9
123.5
120.1
116.9
114.7
115.9
116.8
118.4

171.8
170.4
170.0
171.0
170.9
169.4
167.7
168.5
167.5
167.8
166.7
164.2

122.5
123.9
126.3
129.1
131.0
133.2
136 8
138.8
141.6
143.0
144.0
145.0

157.4
159.0
160.7
163.3
165.4
167.8
170.6
172.9
174.6
175.8
176.3
176.3

121.9
115.6
112.6
111.6
112.8
112.6
115.0
116.1
117.1
118.6
120.9
123.4

163.1
162.0
165.8
169.3
169.7
169.8
176.0
179.3
179.3
176.9
178.8
183.4

TABLE B-43.—Industrial production indexes, market groupings, 1947-83
[1967 = 100; monthly data seasonally adjusted]
Materials 2

Final products
Year or month

1967 proportion

Total
industrial
production

Consumer goods
Total

Total

1

Equipment

Automotive
products

Home
goods

Total

Busi-

Defense
and
space

Intermediate
products

Total

Durable
goods

Nondurable
goods

10.47

100.00

47.82

27.68

2.83

5.06

20.14

12.63

7.51

12.89

39.29

20.35

39.4
41.1
38.8

38.6
40.0
38.8

42.4
43.7
43.4

45.3
47.4
47.0

37.5
39.1
36.2

30.6
32.2
28.7

38.0
39.5
34.5

10.3
12.1
12.7

41.9
44.3
42.0

39.5
41.2
37.6

38.3
39.4
35.3

44.9
48.7
50.6
54.8
51.9

43.7
47.2
50.7
54.1
51.3

49.6
49.1
50.2
53.2
52.9

59.1
52.3
47.1
59.5
55.4

49.9
43.0
43.0
48.6
44.9

31.1
43.3
51.9
56.3
49.3

37.0
45.2
51.2
53.3
46.8

14.9
36.6
51.4
61.6
54.2

48.8
51.3
50.9
54.5
54.3

45.0
49.8
50.5
56.1
51.8

44.4
50.5
51.6
60.3
52.0

45.9

58.5
61.1
61.9
57.9
64.8

55.4
58.6
60.3
57.6
63.2

59.0
61.2
62.6
62.1
68.1

73.6
60.6
63.5
50.5
63.3

53.0
55.7
54.5
51.4
59.0

50.4
55.3
57.5
51.5
56.5

50.8
58.8
61.1
51.5
57.9

49.7
48.5
50.7
50.9
53.7

61.7
64.4
64.4
63.0
69.5

61.3
62.8
62.8
56.5
65.2

63.7
63.9
63.8
53.7
64.0

52.5
54.9
54.7
54.4
62.1

66.2
66.7
72.2
76.5
81.7

65.3
65.8
71.4
75.5
79.7

70.7
72.2
77.1
81.3
85.9

72.5
66.1
80.1
87.7
91.9

59.4
61.3
66.5
71.8
78.4

58.1
57.3
63.7
67.5
71.4

59.4
57.7
62.7
65.8
73.7

55.1
56.0
64.9
69.9
67.7

70.0
71.4
75.7
79.9
85.2

66.1
66.2
72.1
76.7
82.9

64.8
63.3
70.4
75.1
81.9

63.2
65.8
71.3
75.6
82.2

89.8
97.8
100.0
106.3
111.1

87.6
95.9
100.0
106.2
109.6

92.6
97.3
100.0
105.9
109.8

113.3
112.8
100.0
119.4
118.1

88.9
97.9
100.0
106.4
113.2

80.7
94.0
100.0
106.5
109.3

84.4
97.7
100.0
105.5
112.5

74.9
88.1
100.0
108.2
104.0

90.6
96.2
100.0
106.3
112.9

92.4
100.7
100.0
106.5
112.5

93.8
103.3
100.0
106.2
112.1

90.3
97.5
100.0
108.8
115.7

107.8
109.6
119.7
129.8
129.3

105.3
106.3
115.7
124.4
125.1

109.0
114.7
124.4
131.5
128.9

98.8
124.4
141.4
153.0
132.8

110.2
115.6
129.5
142.5
136.8

100.1
94.7
103.8
114.5
120.0

107.0
1041
118.0
134.2
142.4

88.5
78.8
79.9
81.4
82.4

112.9
116.7
126.5
137.2
135.3

109.2
111.3
122.3
133.9
132.4

103.8
104.9
117.7
134.6
132.7

115.4
120.2
132.9
142.2
142.6

117.8
130.5
138.2
146.1
152.5

118.2
127.6
135.9
142.2
147.2

124.0
137.1
145.3
149.1
150.8

125.8
155.7
175.6
179.9
167.7

118.8
134.1
141.9
147.7
149.2

110.2
114.6
123.0
132.8
142.2

128.2
135.4
147.8
160.3
171.3

80.0
79.8
81.3
86.5
93.4

123.1
137.2
145.1
154.1
160.5

115.5
131.7
138.6
148.3
156.4

109.1
128.0
136.1
149.0
157.8

126.6
147.8
155.6
165.6
175.9

147.0
151.0
138.6
147.7

145.3
149.5
141.5
147.2

145.4
147.9
142.6
151.9

132.8
137.9
129.5
158.2

138.9
142.0
129.1
141.8

145.2
151.8
139.8
140.8

173.2
181.1
157.9
153.2

98.2
102.7
109.4
119.9

151.9
154.4
143.3
156.9

147.6
151.6
133.7
145.3

143.0
149.1
125.0
138.7

171.5
174.6
157.5
174.9

140.7
142.9
141.7
140.2
139.2
138.7

142.8
144.1
143.3
142.6
142.2
142.1

139.6
141.8
141.5
142.1
143.6
144.8

126.3
130.6
129.9
131.1
129.1
129.9

147.2
147.3
145.9
143.4
140.4
138.4

172.2
171.6
169.0
164.9
159.9
156.7

105.2
106.5
107.0
107.2
107.7
107.6

143.4
146.3
145.2
143.7
142.6
141.9

137.2
140.4
138.5
136.2
134.3
133.5

129.7
132.4
130.7
128.1
126.6
126.6

156.8
164.2
162.0
160.3
156.6
153.5

138.8
138.4
137.3
135.7
134.9
135.2

142.5
141.2
140.0
138.7
138.3
139.5

145.8
144.1
143.4
142.2
141.3
142.0

109.2
117.5
125.0
129.9
138.9
143.0
149.7
135.5
135.5
123.6
120.7
128.7

130.4
131.4
128.9
128.1
126.8
124.3

138.0
137.3
135.2
134.0
134.2
136.1

154.9
153.9
150.5
147.1
146.4
148.1

109.5
109.5
109.5
111.9
113.6
115.9

142.8
144.7
143.7
141.6
141.8
141.5

133.0
132.8
132.0
130.0
128.4
127.8

126.0
125.1
123.0
118.5
116.4
116.5

152.3
154.5
158.5
158.2
157.3
155.6

137.4
138.1
140.0
142.6
144.4
146.4

140.1
138.9
139.9
142.8
144.5
146.4

143.6
143.4
144.3
147.7
150.4
152.4

136.2
144.3
142.6
144.9
152.2
160.0

129.1
128.8
132.8
138.1
141.8
143.2

135.3
132.7
133.8
136.2
136.5
138.2

146.6
142.7
143.7
146.9
147.7
150.2

116.4
116.1
117.0
118.2
117.6
118.0

143.7
145.3
147.8
150.8
152.2
154.5

132.0
134.9
137.6
139.7
141.7
143.7

121.5
125.3
128.7
132.4
134.7
137.0

159.7
164.0
167.5
168.7
172.1
174.3

149.7
151.8
153.8
155.0
156.1
156.9

149.0
150.7
152.1
152.9
154.2
155.4

154.8
156.3
157.3
157.1
157.8
158.7

167.0
168.1
172.9
171.0
171.9
178.1

144.9
146.4
148.8
149.3
148.1
149.4

141.0
143.1
144.9
147.1
149.3
150.8

153.3
156.6
158.7
161.5
164.4
165.8

120.4
120.2
121.8
122.9
123.9
125.7

158.1
162.2
165.4
166.5
167.2
167.6

147.8
149.7
152.2
153.9
154.9
155.3

141.1
144.2
147.4
149.5
150.9
150.9

177.0
178.0
182.3
185,0
185.1
184.9

1

Also includes clothing and consumer staples, not shown separately.
Also includes energy materials, not shown separately.
Source: Board of Governors of the Federal Reserve System.
2




269

TABLE B-44.—Industrial production indexes, selected manufactures,

1947-83

[1967=100; monthly data seasonally adjusted]
Nondurable manufactures

Durable manufactures
Primary
metals
Year or month
Total

Iron
and

Fabricated
metal
products

Nonelectrical
machinery

Electrical
machinery

Transportation
equipment

Total

Motor
vehicles
and
parts
4.50

Lumber
and
products

Apparel
products

Printing
and
publishing

Chemicals
and
products

Foods

1967 proportion

6.57

5.93

9.15

8.05

9.27

1.64

3.31

4.72

7.74

8.75

1947
1948
1949

63.3
65.8
55.4

49.9
50.8
45.8

39.0
39.2
33.4

22.2
23.0
21.6

31.8
34.8
34.9

58.9
61.3
54.1

57.8
60.3
59.7

43.3
45.4
46.6

19.7
21.3
21.0

55.8
55.2
55.9

1950
1951
1952
1953
1954

69.7
75.8
69.2
78.5
63.5

70.1

56.1
59.9
58.5
66.0
59.4

37.5
47.7
51.9
54.0
46.1

29.6
29.8
34.0
39.0
34.7

41.8
46.6
54.2
68.0
59.2

60.5

65.7
65.5
64.7
68.4
68.0

64.3
63.1
66.3
67.2
66.4

48.9
49.7
49.7
52.0
54.1

26.2
29.7
31.1
33.6
34,1

57.9
59.0
60.2
61.4
62.7

1955
1956
1957
1958
1959

82.5
82.0
78.5
62.3
72.7

93.2
91.5
88.2
66.5
76.5

67.8
68.8
70.6
63.3
71.0

50.6
58.0
57.9
48.6
56.7

39.9
43.1
42.8
39.2
47.6

68.0
66.0
70.7
55.8
63.2

81.2
65.8
69.0
51.0
66.2

75.9
75.0
68.8
69.9
79.3

73.3
75.0
74.9
72.8
80.1

59.5
63.2
65.4
63.9
68.2

39.8
42.7
45.2
46.6
54.3

66.3
70.1
71.1
72.9
76.5

1960
1961
1962
1963
1964

72.4
71.1
76.3
82.3
92.8

77.7
74.2
77.3
84.3
95.9

71.1
69.4
75.4
77.8
82.6

56.9
55.4
62.1
66.3
75.6

51.6
54.8
62.9
64.7
68.4

65.4
61.5
71.1
78.0
80.0

74.7
65.5
79.8
88.3
90.7

74.7
78.2
82.5
86.3
92.7

81.7
82.2
85.5
89.1
92.2

71.0
71.3
73.9
77.8
82.6

56.4
59.2
65.7
71.8
78.8

78.6
80.9
83.4
86.4
90.4

1965
1966
1967
1968
1969

102.1
108.4
100.0
104.3
113.8

105.2
108.4
100.0
103.2
112.6

90.8
97.2
100.0
105.6
107.9

85.0
98.8
100.0
101.8
109.3

81.7
97.9
100.0
105.5
111.9

95.1
102.0
100.0
111.1
108.4

115.9
113.9
100.0
120.3
116.5

96.3
100.0
100.0
105.5
107.9

97.4
99.9
100.0
102.9
106.7

87.9
94.6
100.0
103.2
107.4

87.8
95.7
100.0
109.5
118.4

92.4
96.0
100.0
102.6
106.1

1970
1971
1972
1973
1974

106.6
100.2
112.1
126.7
123.1

104.7
96.1
107.1
122.3
119.8

102.4
103.5
112.1
124.7
124.2

104.4
100.2
116.0
133.7
140.1

108.1
107.7
122.2
143.1
143.8

89.5
97.9
108.2
118.3
108.7

92.3
118.6
135.8
148.8
128.2

105.6
113.8
120.8
126.0
116.2

101.4
104.7
109.4
117.3
114.3

107.0
107.1
112.7
118.2
118.2

120.4
125.9
143.6
154.5
159.4

108.9
112.8
116.8
120.9
124.0

1975
1976
1977
1978
1979

96.4
109.7
111.1
119.9
121.3

95.8
104.8
103.8
113.2
113.2

109.9
123.9
131.0
141.6
148.5

125.1
134.5
143.6
153.6
163.7

116.5
134.8
145.4
159.4
175.0

97.4
111.1
122.2
132.5
135.4

111.1
142.0
161.1
169.9
159.9

107.6
123.2
131.2
136.3
136.9

107.6
125.7
134.2
134.2
134.4

U3.3
122.5
127.6
131.5
136.9

147.2
170.9
185.7
197,4
211.8

123.4
133.0
138.8
142.7
147.5

1980
1981
1982
1983 P.

102.3
107.9
75.3
85.4

92.4
99.8
61.7

134.1
136.4
114.8
120.4

162.8
171.2
149.0
150.6

172.8
178.4
169.3
185.8

116.9
116.1
104.9
117.4

119.0
122.3
109.8
136.9

119.3
119.1
112.6

127.0
120.4

139.6
144.2
144.1
152.9

207.1
215.6
196.1

149.6
152.1
151.1

May
June

89.7
88.5
83.0
76.4
75.2
72.8

79.6
78.5
73.0
65.1
62.4
58.0

120.7
121.4
121.1
119.1
115.8
115.0

160.9
160.0
157.3
153.7
150.0
147.4

168.2
172.9
172.6
172.2
170.9
170.8

96.6
102.0
104.4
105.9
110.0
111.6

90.4
98.6
105.6
110.7
119.8
124.0

99.2
104.9
103.5
106.2
110.6
112.2

145.6
146.4
145.9
144.2
143.8
142.6

196.7
201.3
200.3
198.6
193.6
193.2

151.1
151.7
150.8
149.7
150.5
151.0

July
Aug
Sept
Oct
Nov
Dec

72.9
72.9
73.2
69.6
63.6
63.5

58.1
57.4
56.4
54.1
47.5
46.6

115.5
114.3
U2.3
107.6
107.0
107.3

147.1
147.2
144.9
140.4
139.6
139.2

170.3
169.7
167.0
165.4
165.5
165,5

112.7
107.0
105.3
100.8
100.2
103.7

127.2
1167
113.5
103.0
101.7
108.8

116.9
120.3
119.9
117.2
119.1
121.4

143.9
145.3
144.3
142.0
141.7
142.8

194.1
195.6
196.4
194.1
192.8
195.9

151.0
150.7
149.0
151.5
152,0
152.8

May
June

73.1
77.9
81.2
83.1
84.9
84.8

59.0
64.3
66.9
68.5
69.5
69.7

107.6
110.3
113.9
115.3
115.5
118.5

138.0
136.2
138.6
143.1
146.1
149.5

169.5
168.9
173.8
177.2
180.1
182.4

106.3
109.6
110.1
111.4
113.8
116.6

U3.9
123.0
123.2
125.5
130.4
136.2

130.0
130.2
128.7
132.1
135.8
137.4

141.3
144.0
145.9
145.7
145.2
147.4

197,6
202.3
205.7
208.5
211.0
214.7

154.4
153.0
152.0
153.7
155.6
157.7

July
Aug
Sept
Oct
Nov P.
Dec"

85.5
87.5
90.6
95.1
92.0
91.1

71.8
75.1
78.2
84.0
80.5

122.7
126.0
127.4
127.2
129.3
129.7

154.2
157.3
158.3
159.5
162.9
163,0

188.3
189.2
195,8
198.7
200.6
203.7

119.7
121.1
124.7
125.5
125.8
128.2

142,3
144.3
150.9
150.9
152.5
157.1

141.3
141.6
142.3
141.7
142.0

152.0
157.8
161.7
162.7
163.1
163.2

218.3
220.3
224.1
228.1
228.3

159.9
159.3
158.2
157.6

1982:
Jan
Feb

Mar
Apr

1983:
Jan
Feb
Mar

Apr

4.21

Source: Board of Governors of the Federal Reserve System.




270

TABLE B-45.—Capacity utilization rate in manufacturing, 1948-83
[Percent; quarterly data seasonally adjusted]
FRB series1
Year or
quarter

Total
manufacturing

Durable
goods

Nondurable
goods

Commerce series2
Primary
processing

Advanced
processing

1948
1949

82 5
74.2

87 2
76.2

82.8
85.8

854

88.5
90.2
84.9
89.4
80.6

Primary- Advancedprocessed processed
goods
goods

84.3
84 5
83.1
75.1
81.1

79.8
77.9
81.6
83 8
87.8

Nondurable
goods

79.8
834
85.9
893
80.1

92.1
89.7
84.7
75.4
83.4

Durable
goods

80 0
73.3

1950
1951
1952
1953
1954

Total
manufacturing

80.4
77 2
81.7
83 4
84.6

89 2
80 3

1955
1956
1957
1958
1959

871

1960
1961
1962
1963
1964

80 2
77.4

1965
1966
1967
1968
1969

86.4
83 7
75.2

819

816
83 5

856

86.9
87 2
86.3

87.1
87 2
85.9

86.8
871
87.0

91.1
914
85.7
87 7
88.5

88.9
912
87.7
86 9
85.2

86.0
86 0
84.0
85 0
85.0

88.0
87.0
83.0
84.0
84.0

85.0
86.0
85.0
86.0
86.0

89.0
88 0
87.0
86.0
87.0

85.0
85 0
83.0
84 0
84.0

1970
1971
1972
1973
1974

79.5
78 5
83.5
87 6
83.7

76.5
74 6
80.7
87 2
83.1

83.9
84 0
87.4
881
84.7

82.9
82 3
88.1
92 4
87.8

77.6
76 4
81.0
85 0
81.5

81.0
80 0
83.0
86 0
83.0

78.0
78.0
82.0
85.0
82.0

83.0
83.0
85.0
86.0
84.0

83.0
82.0
85.0
89 0
85.0

79.0
80 0
82.0
84 0
82.0

1975
1976
1977
1978
1979

72.9
79.6
82.2
84.7
86.0

70.3
771
81.1
86.0
86.7

76.6
83 0
85.0
85.6
86.3

73.8
82 3
84.6
87.9
89.5

72.5
782
80.9
82.9
84.0

77.0
810
83.0
83.6
82.5

76.0
81.0
84.0
84.4
82.7

79.0
82.0
82.0
82.6
82.3

76.0
82.0
83.0
84.2
83.8

77.0
810
83.0
83.3
81.9

1980
1981
1982
1983"

79.6
79 4
71.1
75.3

77.8
78 2
68.2
72.4

81.8
811
74.8
78.9

80.3
80 8
68.9
76.0

79.2
78 7
72.3
75.0

77.5
761
70.0

76.6
74 6
66.5

78.7
78.1
74.6

76.9
75.6
66.5

77.8
76 4
71.8

III
I
V

87.2
86.2
85 7
84.8

89.1
87.4
85 8
84.4

86.9
86.3
86 4
85.6

90.3
89.6
89 8
88.5

85.4
84.4
83 4
82.8

84.4
83.3
817
80.7

85.2
84.0
816
80.0

83.3
82.4
81.8
81.7

85.2
84.2
83 2
82.6

84.0
82.9
809
79.7

1980:
I
II
Ill
IV

83.8
78.3
76.4
79.7

83.0
76.5
73.9
78.0

85.0
80.7
79.7
81.9

87.2
78.0
74.8
81.3

82.2
78.5
77.3
78.7

80.1
75.8
76.2
78.0

79.7
74.1
74.7
77.8

80.6
77.9
78.1
78.3

80.8
74.9
73.9
78.1

79.7
76.2
77.4
77.9

79.2
79 8
79 2
74.3

82.4
82 0

83.5
82.6

I
V

80.6
80.8
80.3
75.9

78.0

75.2

79.1
79 7
79 4
76.3

78.1
78.3
75 9
72.1

77.2
77.0
74.1
70.1

79.4
80.0
78.4
74.7

78.0
78.0
75.6
70.9

78.2
78.5
76.1
72.7

1982:
1
II
Ill
IV

72.9
71.6
71.0
69.0

70.5
69.1
68.1
65.1

75.8
74.7
74.8
74.0

71.5
68.8
68.6
66.8

73.7
73.1
72.3
70.2

72.2
71.2
69.1
67.5

69.8
67.6
65.2
63.4

75.2
76.0
74.2
72.8

70.1
66.5
65.6
63.9

73.2
73.8
70.9
69.3

70.7
73.8
77.4
79.2

67.2
70.7
74.7
77.1

75.1
77.8
80.7
81.9

70.5
74.6
78.3
80.5

71.1
73.5
76.9
78.5

69.8
73.3
75.5

66.3
70.3
111

74.3
77.1
79.1

68.1
71.2
74.0

70.6
74.4
76.3

1979:
I

I
f

1981:
1
II
Ill

89 6

911

818

819

1983:
II
Ill
IV

1
For description of the series, see "New Federal Reserve Measures of Capacity and Capacity Utilization," Federal Reserve Bulletin, July
1983.
2
Quarterly data are for last month in quarter. Annual data are averages of the four indexes, except for 1965 (December index) and
1966-67 (averages of June and December indexes). For description of the series, see "Survey of Current Business," July 1974.
Sources: Board of Governors of the Federal Reserve System and Department of Commerce (Bureau of Economic Analysis).




271

TABLE B-46.—New construction activity, 1929-83

[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]
Public construction

Private construction
new
construction

Year or month

Nonresidential buildings and other
construction1

Residential
buildings1

Total
Total2

New
housing
units

Total
Total

Commercial3

Industrial

Federal

State and
local'

2.3

Other4

1929

10.8

8.3

3.6

3.0

4.7

1.1

0.9

2.6

2.5

0.2

1933

2.9

1.2

.5

.3

.8

.1

.2

.5

1.6

.5

1.1

8.2

4.4

2.7

2.3

1.7

.3

.3

1.2

3.8

.8

3.1

8.7

5.1
6.2
3.4
2.0
2.2

3.0
3.5
1.7
.9
.8

2.6
3.0
1.4

.3
.4
.2
.0
.1

.4
.8
.3
.2
.2

1.3
1.5
1.2
.9
1.1

3.6
5.8
10.7

.6

2.1
2.7
1.7
1.1
1.4

6.3
3.1

1.2
3.8
9.3
5.6
2.5

2.4
2.0
1.3
.7
.6

14 3

3.4
121

1.3
6.2

.7
4.8

2.1
5.8

.2
1.2

.6
1.7

1.3
3.0

2.4
2.2

1.7
.9

.7
1.4

1947
1948
1949

20 0
26.1
26.7

16.7
21.4
20.5

9.9

7.8

13.1
12.4

10.5
10.0

6.9
8.2

1.0
1.4

1.7
1.4

4.2
5.5

3.3
4.7

.8
1.2

8.0

1.2

1.0

5.9

6.3

1.5

2.5
3.5
4.8

1950
1951
1952
1953
1954

33.6
35 4
36 8
39.1
41.4

26.7
26.2
26 0
27.9
29.7

18.1
15.9
15 8
16.6
18.2

15.6
13.2
12 9
13.4
14.9

8.6
10.3
10.2
11.3
11.5

1.4

1.1

6.1

1.5
1.8

2.1
2.3
2.2

6.7
6.8
7.3

2.2

2.0

7.2

1955
1956
1957
1958
1959

46.5
47 6

34.8
34.9

18.2
16.1
14 7
15.4
19.2

12.9
14.7

3.2

2.4

7.3

3.6
36
3.6

3.1
3.6
2.4

8.0
9.0
8.8

3.9

2.1

9.0

42

2.9

8.9

1939
1940
1941
1942
1943
1944
1945
1946

...

12.0
14.1

8.3
5.3

,.

5.8

..

i

New series

50 0
55.4

34.6
39.3

21.9
20.2
19 0
19.8
24.3

1960
1961
1962
1963
1964

54 7
56.4
60 2
64.8
68.0

389
39 3
42 3
45.5
47.7

23 0
23.1
25 2
27.9
28.0

17 3
17.1
19 4
21.7
21.8

159
16.2
17 2
17.6
19.7

1965
1966
1967
1968
1969

74 1
76 8
78 5
87.5
94.3

52 0
52 8
52 9
59.9
66.3

27 9
25 7
25 6
30.6
33.2

217
19 4

241
27 1
27 3
29.3
33.1

1970
1971
1972
1973
1974

95 2
110 3
124.4
138 4
139.2

671
80 4
94.2
105 9
100.9

319
43 3
54.3
59 7
50.4

24.3

1975
1976
1977
1978
1979

135.9
1511
173 8
205.6
230.4

951
112 0
135 7
159.7
181.6

46.5
60 5
93.4
99.0

34.4
47 3
65 7
75.8
78.6

1980
1981
1982

230 7
239 4
232.0

175 7
1861
181.0

87 3
86 6
74.8

631
62 7
51.9

..

. ..

491

351

810

190

24.0
25.9

351

44.9
50.1
40.6

See next page for continuation of table.




272

161
14.8
15.1

35.3
37 2
40.0
46.2
50.5

11

4.7
51
5.0
5.4

2.8
2.8
2.9
3.6

3.0
4.2
4.1

11.7
12.7
14.1
15.5
16.1

3.4

5.2
6.3
6.6
7.1
8.3

2.8

8.9

2.7
3.0
3.4

10.0
11.1
12.1
12.3

3.7

10.7

4.0

8.7
9.2
9.7

3.6

3.9
3.9
4.0
3.9

12.2
13.3
14.0
15.4
16.5
18.0
20.0
22.1
24.2
24.6

7.8
9.4

6.0
6.8

15.5
16.9

22.1
24.0
25.5
27.6
28.0

9.8

6.5

7.9

19.0
20.1
21.8
24.5
26.7

28.1
29.9
30.2
32.5
38.3

3.3

13.5
15 5
15.9

40.9
39.1
38.2
45.9
48.8

6.3

7.0
7.3
8.4
8.6

34.6
32.1
30.9
37.5
40.2

55.0
53.3
51.1

9.6
10.4
10.2

45.4
42.9
40.8

116

5.4
4.7
6.2

54 7
66.2
82.6

11.0
15.0

27.8
31.5
32.2
36.7
42.7

88.4
99 5
106.2

29 9
34 2
37.3

13.8
17.0
17.3

44.7
48.2
51.5

514

1.6

9.3

15.9
17.1
17.9
19.4
20.4

12.8
12 8
14 8
18.6
24.9

48.6

6.9
10.8
11.2
11.7

8.0

7.2
7.7

4.0
3.5

3.4
3.3

4.0
4.4
4.9
5.3

24.8
25.9
25.8
27.6
33.0

TABLE B-46.—New construction activity, 1929-83—Continued
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]
Private construction
Year or month

Total
new
construction

Nonresidential buildings and other
construction *

Residential
buildings1
Total

Public construction

New

Total 2 housing
units

Total

Commercial 3

Industrial

Total
Other*

Federal State and
local 6

1982:
Jan
Feb....
Mar....
Apr....
May....
June...

224.3
223.5
226.8
228.8
230.9
233.4

175.4
174.3
175.5
177.9
180.9
182.9

71.2
68.3
69.6
71.9
75.2
75.5

49.2
48.7
S0.4
48.7
50.1
49.3

104.2
106.0
105.9
105.9
105.8
107.4

36.1
36.9
37.1
37.5
36.5
38.6

18.2
18.4
18.2
17.7
17.8
18.2

50.0
50.8
50.6
50.7
51.5
50.5

48.9
49.2
51.3
50.9
50.0
50.4

9.7
9.9
10.5
10.0
9.9
9.9

39.2
39.3
40.8
40.9
40.1
40.5

July....
Aug....
Sept...
Oct
Nov....
Dec...

230.8
231.6
230.7
234.1
243.7
240.2

180.8
179.5
178.2
181.9
190.5
190.8

73.8
72.7
71.7
76.4
81.2
86.0

51.4
52.6
53.0
53.6
55.8
58.6

107.0
106.8
106.5
105.5
109.3
104.8

37.8
37.6
38.0
37.0
37.9
36.9

17.2
16.9
16.5
17.1
16.7
15.6

52.0
52.3
51.9
51.4
54.7
52.2

50.0
52.2
52.5
52.2
53.2
49.4

10.3
10.4
10.8
10.6
10.8
10.1

39.7
41.7
41.7
41.6
42.4
39.3

Jan
Feb....
Mar....
Apr....
May....
June...

247.9
243.0
241.9
247.4
254.8
264.3

195.0
194.3
194.9
199.5
206.0
214.7

89.7
93.6
96.1
102.0
107.5
113.5

63.4
68.8
72.3
77.3
82.2
87.9

105.3
100.8
98.7
97.5
98.5
101.2

38.2
36.7
35.5
33.6
33.3
35.9

15.2
14.3
14.3
13.2
13.0
13.1

52.0
49.8
49.0
50.7
52.2
52.2

52.9
48.7
47.0
47.9
48.7
49.6

10.5
10.5
11.0
11.1
10.1
9.9

42.4
38.2
36.1
36.8
38.6
39.7

July....
Aug....
Sept...
Oct
Nov..

274.2
282.0
285.4
271.9
271.9

222.8
228.5
232.6
223.0
223.2

122.3
127.1
129.1
121.7
118.3

92.7
94.8
95.0
92.2
91.1

100.5
101.4
103.4
101.3
105.0

35.9
36.3
36.9
36.1
38.0

12.2
14.2
13.2
10.5
11.5

52.4
50.9
53.4
54.6
55.4

51.4
53.5
52.8
48.9
48.6

11.7
11.1
11.3
10.5
10.4

39.8
42.4
41.5
38.4
38.2

1983:

1
Beginning I960, farm residential buildings included in residential buildings; prior to 1960, included in nonresidential buildings and
other construction.
2
Total includes additions and alterations and nonhousekeeping units, not shown separately.
3
Office buildings, warehouses, stores, restaurants, garages, etc.
4
Religious, educational, hospital and institutional, miscellaneous nonresidential, farm (see also footnote 1), public utilities, and all
other private.
5
Includes Federal grants-in-aid for State and local projects.
Source: Department of Commerce, Bureau of the Census.




273

TABLE B-47.—New housing units started and authorized, 1959-83
[Thousands of units]
New private housing units authorized2

New housing units started
Private and public
Year or month

1

Total
(farm and Nonfarm
nonfarm)

Private (farm and nonfarm)
Total

1 unit

2 to4
units

lunit

2 to 4
units

5 units

1,208.3

938.3

77.1

192.9

998.0
1,064.2
1,186.6
1,334.7
1,285.8

746.1
722.8
716.2
750.2
720.1

64.6
67.6
87.1
118.9
100.8

187.4
273.8
383.3
465.6
464.9

422.5
325.1
376.1
527.3
571.2

1,239.8
971.9
1,141.0
1,353.4
1,323.7

709.9
563.2
650.6
694.7
625.9

84.8
61.0
73.0
84.3
85.2

445.1
347.7
417.5
574.4
612.7

84.8
120.3
141.3
118.3
68.1

535.9
780.9
906.2
795.0
381.6

1,351.5
1,924.6
2,218.9
1,819.5
1,074.4

646.8
906.1
1,033.1
882.1
643.8

132.9
148.6
117.0
64.3

616.7
885.7
1,037.2
820.5
366.2

892.2
1,162.4
1,450.9
1,433.3
1,194.1

64.0
85.9
121.7
125.0
122.0

204.3
289.2
414.4
462.0
429.0

939.2
1,296.2
1,690.0
1,800.5
1,551.8

675.5
893.6
1,126.1
1,182.6
981.5

63.9
93.1
121.3
130.6
125.4

199.8
309.5
442.7
487.3
444.8

852.2
705.4
662.6
1,066.9

109.5
91.1
80.0
114.9

330.5
287.7
319.6
521.3

1,190.6
985.5
1,000.5
1,593.7

710.4
564.3
546.4
894.3

114.5
101.8
88.3
132.7

365.7
319.4
365.8
566.6

1,531.3

1,517.0

1,234.0

1,296.1
1,365.0
1,492.5
1,634.9
1,561.0

1,274.0
1,336.8
1,468.7
1,614.8
1,534.0

1,252.2
1,313.0
1,462.9
1,603.2
1,528.8

994.7
974.3
991.4
1,012.4
970.5

1965
1966
1967
1968
1969

1,509.7
1,195.8
1,321.9
1,545.4
1,499.5

1,487.5
1,172.8
1,298.8
1,521.4
1,482.3

1,472.8
1,164.9
1,291.6
1,507.6
1,466.8

963.7
778.6
843.9
899.4
810.6

86.6
61.1
71.6
80.9
85.0

1970
1971
1972
1973
1974

1,469.0
2,084.5
2,378.5
2,057.5
1,352.5

1,433.6
2,052.2
2,356.6
2,045.3
1,337.7

812.9
1,151.0
1,309.2
1,132.0

1,171.4
1,547.6
2,001.7
2,036.1
1,760.0

1,160.4
1,537.5
1,987.1
2,020.3
1,745.1

1,312.6
1,100.3
1,072.1
1,712.6

1,292.2
1,084.2
1,062.2
1,703.1

1980
1981
1982
1983 "...

Total

5 units
or more

283.0

1,553.7

1960
1961
1962
1963
1964

1

Type of structure

Type of structure

1959

1975
1976
1977
1978
1979

1

257.4
338.7
471.5
590.8
108.4
450.0

Seasonally adjusted annual rates
1982:
Jan....
Feb...
Mar..,
Apr...
May..
June..

47.6
52.0
78.7
85.1
99.2
91.8

877
911
920
911
1,028
910

585
561
607
583
622
617

70
83
68
65
85
86

222
267
245
263
321
207

800
820
883
880
951
924

448
451
475
462
489
513

72
73
80
76
105
87

280
296
328
342
357
324

July...
Aug...
Sept..
Oct...
Nov...
Dec...

107.2
97.2
108.3
111.5
110.0
83.4

1,185
1,046
1,134
1,142
1,361
1,280

625
651
683
716
868
842

96
87
90
66
79
79

464
308
361
360
414
359

1,065
928
1,029
1,154
1,227
1,326

507
515
576
657
738
753

85
88
94
87
95
111

473
325
359
410
394
462

Jan....
Feb...
Mar...
May'"
June..

92.9
96.7
135.8
136.4
175.5
173.8

1,694
1,784
1,605
1,506
1,807
1,736

1,126
1,103
1,008
1,001
1,183
1,127

100
117
100
117
96
123

468
564
497
388
528
486

1,447
1,479
1,467
1,536
1,635
1,761

866
835
859
841
940
1,013

120
114
126
141
136
147

461
530
482
554
559
601

July...
Aug...
Sept..
Oct...
Nov...
Dec".

161.9
177.8
156.8
159.9
137.3
107.7

1,804
1,904
1,664
1,654
1,755
1,667

1,032
1,135
1,031
1,002
1,097
972

135

637
659
516
562
525
544

1,782
1,652
1,506
1,630
1,642
1,549

920
874
837
880
911
898

137
133
130
142
142
141

725
645
539
608
589
510

1983:

no
117
90
133
151

1
Units in structures built by private developers for sate upon completion to local public housing authorities under the Department of
Housing and Urban Development "Turnkey" program are classified as private housing. Military housing starts, including those financed
with mortgages insured by FHA under Section 803 of the National Housing Act, are included in publicly owned starts and excluded from
total private starts.
2
Authorized by issuance of local building permit: in 16,000 permit-issuing places beginning 1978; in 14,000 places for 1972-77; in
13,000 places for 1967-71; in 12,000 places for 1963-66; and in 10,000 places prior to 1963.
3
Not available separately beginning January 1970.
Source: Department of Commerce, Bureau of the Census.




274

TABLE B-48.—Nonfarm business expenditures for new plant and equipment, 1947-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Plant and equipment
Nonmanufacturing

Manufacturing
Year or quarter

Total

Plant

Equipment
Total

Durable
goods

Nondurable
goods

Total

Mining

Transportation

Public
utilities

Trade
and
services 1

Communication
and
other 2

1947
1948
1949

21.80
2546
23.54

8.47
10 38
10.19

13.33
15 08
13.35

8.73
9 25
7.32

3.39
3.54
2.67

5.34
5 71
4.64

13.07
1621
16.22

0.69
.93
.88

2.21
2.66
2.30

1.64
2.67
3.28

6.13
6.92
7.13

2.40
3.04
2.63

1950
1951
1952
1953
1954

25 32
30.83
3159
33.58
33.13

11.00
13.11
13.12
13.83
14.09

14.32
17.71
18.46
19.75
19.03

7 73
11.07
1212
12.43
12.00

3.22
5.12
5.75
5.71
5.49

4.51
5.95
6 37
6.72
6.51

17.59
19.76
1947
21.16
21.13

.84
1.11
121
1.25
1.29

2.38
3.05
2.99
2.97
2.42

3.4?
3.75
3.96
4.61
4.23

8.37
8.83
8.05
8.94
9.59

2.58
3.03
3.25
3.38
3.60

1955
1956
1957
1958
1959

36 58
44.76
48.12
42.17
44.78

16 07
19.39
20.96
19.39
19.92

20.51
25.37
27.16
22.78
24.86

12 50
16.33
17 50
12.98
13.76

5.87
8.19
8.59
6.21
6.72

6 62
8.15
891
6.77
7.04

24 08
28.43
30 62
29.19
31.02

131
1.64
1.69
1.43
1.35

2 60
3.07
3.35
2.34
3.17

4.26
4.78
5.95
5.74
5.46

11.49
13.64
13.68
14.11
15.40

4.42
5.30
5.96
5.58
5.63

I960
1961
1962
1963
1964

4863
47.82
5128
53.25
61.66

20 94
21.14
2216
22.28
25.01

27 70
26.68
2912
30.98
36.65

16 36
15.53
16 03
17.27
21.23

828
7.43
7 81
8.64
10.98

8 08
8.10
8 22
8.63
10.25

32 28
32.29
35 25
35.99
40.43

1.29
1.26
1.41
1.26
1.33

3.19
2.82
3.26
3.36
4.46

5.40
5.20
5.12
5.33
5.80

16.15
16.53
18.27
18.57
20.38

6.25
6.48
7.19
7.47
8.46

1965
1966
1967
1968
1969

70 43
82.22
83 42
88.45
99.52

27 33
32.27
32 22
35.54
40.59

4310
49.95
5121
52.91
58.93

25 41
31.37
32 25
32.34
36.27

13 49
17.23
17 83
17.93
19.97

1192
14.15
14 42
14.40
16.31

45 02
50.84
5118
56.11
63.25

1.36
1.42
138
1.44
1.77

5.46
6.43
6.34
6.79
7.04

6.49
7.82
9.33
10.52
11.70

22.13
24.69
23.02
25.31
28.31

9.58
10.49
11.11
12.06
14.43

1970
1971
1972
1973
1974

105 61
108.53
120 25
137.70
156.98

44 27
46.68
49 36
56.58
64.30

6133
61.85
70 89
81.12
92.67

36 99
33.60
35 42
42.37
53.21

19 80
16.78
18 22
22.75
27.44

1719
16.82
17 20
19.62
25.76

68 62
74.93
84 82
95.33
103.78

2 02
2.67
2 88
3.31
4.62

6 95
5.93
672
7.41
8.23

13.03
14.70
16.26
17.97
19.83

29.77
34.20
40.00
45.53
47.79

16.85
17.43
18.96
21.12
23.30

1975
1976 ,..
1977
1978
1979

157 71
171.45
198.08
23124
270.46

65 23
71.12
80.19
92 63
105.75

92 48
100.33
117.89
138 60
164.68

54 92
59.95
69.22
79 72
98.68

26 33
28.47
34.04
40 43
51.07

28 59
31.47
35.18
39 29
47.61

102 79
111.50
128.87
15152
171.77

610
7.44
9.24
10 21
11.38

8.68
8.89
9.40
10 68
12.35

19.98
22.37
26.79
29.95
33.96

46.23
49.30
56.54
68.66
79.26

21.80
23.51
26.90
32.02
34.83

1980
1981
1982
19833
1984 3

295 63
321.49
316.43
303.20
333.32

117 57
133.35
134.58

178 06
188.14
181.86

115 81
126.79
119.68
111.18
125.98

58 91
61.84
56.44
51.45
59.87

56 90
64.95
63.23
59.74
66.11

179 81
194.70
196.75
192.01
207.34

13 51
16.86
15.45
12.00
13.48

12 09
12.05
11.95
11.25
10.96

35.44
38.40
41.95
42.62
44.17

81.79
86.33
86.95
88.02
96.35

36.99
41.06
40.46
38.11
42.38

1982:
I
1
1
Ill
IV

326.95
32187
313J6
303.18

139.07
137 52
134 43
127.32

187.89
184 34
179 33
175.86

127.47
122 76
118 26
110.23

60.39
58.28
56 61
50.51

67.08
64 48
6165
59.72

199.49
19911
195 51
192.95

17.43
16.38
14 57
13.41

12.00
12.17
11.29
12.33

40.35
41.45
43.02
43.00

87.82
88.74
86.88
84.36

41.87
40.36
39.75
39.84

1983:
1
It
Ill
IV3

293.03
293 46
304 70
321.60

125 40
125 60
130 59

167.62
167 86
17412

109.86
108 79
111 12
114.97

50.74
48.48
53.06
53.52

5912
60 31
58 06
61.45

183.17
184.67
193 59
206.62

12.03
10.91
11.93
13.14

11.04
10.88
11.00
12.10

41.61
41.48
42.22
45.17

82.38
85.85
91.06
92.79

36.11
35.54
37.38
43.42

119.00
120.96

57.18
58.09

61.81
62.86

204.08
204.47

12.25
13.68

10.78
11.42

41.82
42.30

96.98
95.03

42.25
42.03

1984:
|3
||3

323.07
325.42

1

Wholesale and retail trade; finance, insurance, and real estate; and personal, business, and professional services.
"Other" consists of construction; social services and membership organizations; and forestry, fisheries, and agricultural services.
Planned capital expenditures reported by business in late October-December 1983, corrected for biases.
Source: Department of Commerce, Bureau of Economic Analysis.
2

3




275

TABLE B-49-—Sales and inventories in manufacturing and trade 1947-83

[Amounts in millions of dollars; monthly data seasonally adjusted]
Total manufacturing and
trade
Year or month
Sales 1

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965 :.
.,
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1982:
Jan
Feh
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1983:
Jan
Feb
Mar
Apr
May
July
Aug
Sept..
Oct
Nov P

Inventories 2

35,260
33,788
38,596
43,356
44,840
47,987
46,443
51,694
54,063
55,879
54,201
59,729
60,827
61,159
65,662
68,995
73,682
80,283
87,187
90,348
98,104
105,003
107,448
116,017
130,030
153,412
177,625
182,230
204,277
229,624
260,307
297,663
327,284
356,099
344,179

52,507
49,497
59,822
70,242
72,377
76,122
73,175
79,516
87,304
89,052
87,093
92,129
94,713
95,594
101,063
105,480
111,503
120,907
136,790
144,796
155,697
169,343
177,556
187,766
201,950
233,237
285,807
288,375
318,544
351,036
398,890
450,736
492,885
526,152
511,942

340,746
345,687
347,061
344,934
353,110
349,742
347,676
343,426
342,882
336,905
338,722
338,391
345,337
341,490
348,009
351,100
363,925
373,572
372,434
374,358
380,089
382,209
386,841

Manufacturing

Retail trade

Merchant wholesalers

Inventories 2 Ratio'

Sales1

Inventories 2

1.42
1.53
1.36
1.55
1.58
1.58
1.60
1.47
1.55
1.59
1.60
1.50
1.56
1.54
1.50
1.49
1.47
1.45
1.47
1.56
1.54
1.55
1.62
1.58
1.49
1.41
1.45
1.57
1.48
1.46
1.44
1.43
1.45
1.44
1.51

15,513
17,316
16,126
18,634
21,714
22,529
24,843
23,355
26,480
27,740
28,736
27,247
30,286
30,879
30,923
33,357
35,058
37,331
40,995
44,870
46,487
50,228
53,501
52,805
55,906
63,023
72,937
84,794
86,595
98,802
113,202
126,905
143,936
154,391
168,129
159,177

25,897
28,543
26,321
31,078
39,306
41,136
43,948
41,612
45,069
50,642
51,871
50,241
52,945
53,780
54,885
58,186
60,046
63,409
68,185
77,952
84,664
90,618
98,202
101,651
102,658
108,238
124,628
157,792
159,934
175,193
189,195
210,415
241,113
264,114
282,333
264,902

1.58
7,957
6,808
1.57
6,514
7,706
1.75
9,284
1.48
7,695
9,886
8,597
1.66
8,782 10,210
1.78
9,052 10,686
1.76
8,993 10,637
1.81
1.62
9,893 11,678
1.73 10,513 13,260
1.80 10,475 12,730
1.84 10,257 12,739
1.70 11,491 13,879
1.75 11,656 14,120
1.74 11,988 14,488
1.70 12,674 14,936
1.69 13,382 16,048
1.64 14,529 17,000
1.60 15,611 18,317
1.62 16,987 20,765
1.76 19,448 24,833
1.74 20,846 26,134
1.77 22,609 28,624
1.90 23,943 32,038
1.83 26,257 35,045
1.67 29,584 38,633
1.58 38,014 45,372
1.65 47,748 56,948
1.84 46,623 56,697
1.69 50,694 64,078
1.61 55,987 72,311
1.57 66,117 85,685
1.57 78,680 98,394
1.66 92,658 112,341
1.64 100,673 116,986
1.73 95,363 118,790

1.13
1.19
1.07
1.16
1.12
1.17
1.18
1.13
1.19
1.23
1.24
1.15
1.22
1.20
1.16
1.15
1.14
1.15
1.15
1.24
1.23
1.22
1.27
1.27
1.24
1.11
1.07
1.21
1.19
1.21
1.20
1.18
1.14
1.13
1.24

523,647
521,291
520,440
523,370
519,119
521,040
521,145
521,257
521,000
519,797
513,888
511,942

1.54
1.51
1.50
1.52
1.47
1.49
1.50
1.52
1.52
1.54
1.52
1.51

157,498
160,740
160,162
159,118
163,007
163,120
162,417
160,016
160,458
154,194
154,318
154,543

280,794
280,941
279,337
278,468
276,356
274,912
274,629
273,809
271,675
270,786
267,920
264,902

1.78
1.75
1.74
1.75
1.70
1.69
1.69
1.71
1.69
1.76
1.74
1.71

96,706
96,898
99,198
97,348
99,290
98,019
95,790
94,341
92,527
91,806
91,912
91,389

117,266
115,029
115,861
119,423
118,132
119,828
119,854
119,190
119,537
120,162
118,349
118,790

1.21
1.19
1.17
1.23
1.19
1.22
1.25
1.26
1.29
1.31
1.29
1.30

507,550
507,665
503,222
504,796
505,658
505,521
505,826
510,430
513,883
515,999
518,291

1.47
1.49
1.45
1.44
1.39
1.35
1.36
1.36
1.35
1.35
1.34

158,239
158,081
161,803
163,065
167,965
173,920
172,598
175,989
178,590
176,790
181,029

262,117
260,856
257,304
257,397
258,149
257,390
258,176
259,834
260,021
260,816
260,988

1.66
1.65
1.59
1.58
1.54
1.48
1.50
1.48
1.46
1.48
1.44

94,790
92,245
92,943
92,586
97,529
100,479
100,315
100,568
102,297
104,578
103,831

117,564
116,417
116,591
117,498
115,855
115,630
115,745
116,813
118,410
119,882
119,555

1.24 92,308 127,869
1.26 91,164 130,392
1.25 93,263 129,327
1.27 95,449 129,901
1.19 98,431 131,654
1.15 99,173 132,501
1.15 99,521 131,905
1.16 97,801 133,783
1.16 99,202 135,452
1.15 100,841 135,301
1.15 101,981 137,748

Ratio3

1
2
3

Ratio3

Sates1

Sales 1

10,200
11,135
11,149
12,268
13,046
13,529
14,091
14,095
15,321
15,811
16,667
16,696
17,951
18,294
18,249
19,630
20,556
21,823
23,677
25,330
24,413
27,030
28,893
30,700
33,853
37,422
42,462
45,082
49,012
54,781
60,435
67,286
75,047
80,235
87,298
89,640

Inventories2

14,241
16,007
15,470
19,460
21,050
21,031
21,488
20,926
22,769
23,402
24,451
24,113
25,305
26,813
26,221
27,941
29,386
31,094
34,405
38,073
35,299
38,945
42,517
43,867
50,063
55,079
63,237
71,067
71,744
79,273
89,530
102,790
111,229
116,430
126,833
128,250

86,542 125,587
88,049 125,321
87,701 125,242
125,479

90,813 124,631
88,603 126,300
89,469
89,069
89,897
90,905
92,492
92,459

126,662
128,258
129,788
128,849
127,619
128,250

Monthly average for year and total for month.
Seasonally adjusted, end of period.
Inventory/sales ratio. For annual pew
average inventories to average monthly sales; for monthly data, ratio of
inventories at end of month to sales for month.
Note.—Earlier data are not strictly comparable with data beginning 1958 for manufacturing and beginning 1967 for wholesale and
retail trade.
The inventory figures in this table do not agree with the estimates of change in business inventories included in the gross national
product since these figures cover only manufacturing and trade rather than allijusiness, and show inventories in terms of current book
value without adjustment for revaluation.
Source: Department of Commerce, Bureau of the Census.




276

TABLE B-50.—Manufacturers' shipments and inventories, 1947-83

[Millions of dollars; monthly data seasonally adjusted]
Inventories2

Shipments'

Durable goods industries

Total

Durable
goods
industries

Nondurable
goods
industries

Total

15,513
17,316
16,126
18,634
21,714
22,529
24,843
23,355
26,480
27,740
28,736
27,247
30,286
30,879
30,923
33,357
35,058
37,331
40,995
44,870
46,487
50,228
53,501
52,805
55,906
63,023
72,937
84,794
86,595
98,802
113,202
126,905
143,936
154,391
168,129
159,177

6,694
7,579
7,191
8,845
10,493
11,313
13,349
11,828
14,071
14,715
15,237
13,563
15,609
15,883
15,616
17,262
18,280
19,637
22,221
24,649
25,267
27,659
29,437
28,188
29,954
34,024
39,686
44,228
43,656
50,689
59,267
67,848
76,060
77,550
83,872
76,843

8,819
9,738
8,935
9,789
11,221
11,216
11,494
11,527
12,409
13,025
13,499
13,684
14,677
14,996
15,307
16,095
16,778
17,694
18,774
20,220
21,220
22,570
24,064
24,617
25,952
29,000
33,250
40,567
42,939
48,113
53,935
59,057
67,876
76,841
84,257
82,334

25,897
28,543
26,321
31,078
39,306
41,136
43,948
41,612
45,069
50,642
51,871
50,241
52,945
53,780
54,885
58,186
60,046
63,409
68,185
77,952
84,664
90,618
98,202
101,651
102,658
108,238
124,628
157,792
159,934
175,193
189,195
210,415
241,113
264,114
282,333
264,902

13,061
14,662
13,060
15,539
20,991
23,731
25,878
23,710
26,405
30,447
31,728
30,258
32,077
32,371
32,544
34,632
35,866
38,506
42,257
49,920
55,005
58,875
64,739
66,780
66,289
70,250
81,398
101,739
102,874
112,581
121,575
137,834
160,554
174,547
186,222
175,200

8,966
7,894
9,194
10,417
10,608
10,032
10,776
10,353
10,279
10,810
11,068
11,970
13,325
15,489
16,455
17,376
18,693
19,182
19,759
20,860
26,028
35,151
33,920
37,548
40,256
45,211
52,678
55,137
57,953
52,543

157,498
160,740
160,162
159,118
163,007
163,120
162,417
160,016
160,458
154,194
154,318
154,543

76,463
78,525
78,730
77,808
79,680
79,197
78,856
77,250
76,419
72,478
73,005
73,495

81,035
82,215
81,432
81,310
83,327
83,923
83,561
82,766
84,039
81,716
81,313
81,048

280,794
280,941
279,337
278,468
276,356
274,912
274,629
273,809
271,675
270,786
267,920
264,902

185,238
185,200
184,319
184,053
183,378
182,811
182,099
181,543
180,520
179,675
177,061
175,200

158,239
158,081
161,803
163,065
167,965
173,920
172,598
175,989
178,590
176,790
181,029

77,744
77,769
79,595
80,241
82,669
86,582
85,646
87,918
88,970
88,228
92,191

80,495
80,312
82,208
82,824
85,296
87,338
86,952
88,071
89,620
88,562
88,838

262,117
260,856
257,304
257,397
258,149
257,390
258,176
259,834
260,021
260,816
260,988

172,506
171,572
169,377
169,814
170,734
169,840
169,693
170,576
170,385
170,628
170,934

Total

Materials and
supplies

Nondurable goods industries

Finished
goods

Total

Materials and
supplies

Work
in
process

Finished
goods

10,720
9,721
10,756
12,317
12,837
12,387
13,063
12,772
13,203
14,159
14,871
16,191
18,075
21,939
25,005
27,336
30,408
29,848
28,650
30,788
35,545
42,603
43,369
46,345
50,599
58,664
69,314
76,999
81,107
77,908

12,836
13,881
13,261
15,539
18,315
17,405
6,206 18,070
6,040 17,902
6,348 18,664
7,565 20,195
8,125 20,143
7,839 19,983
8,239 20,868
9,245 21,409
9,063 22,341
9,662 23,554
9,925 24,180
10,344 24,903
10,854 25,928
12,491 28,032
13,547 29,659
14,163 31,743
15,639 33,463
17,751 34,871
17,880 36,368
18,601 37,988
19,823 43,230
23,985 56,053
25,586 57,060
28,690 62,612
30,720 67,620
33,959 72,581
38,562 80,559
42,411 89,567
47,162 96,111
44,749 89,702

8,317
8,167
8,556
8,971
8,775
8,662
9,080
9,082
9,493
9,813
9,978
10,131
10,448
11,155
11,715
12,289
12,724
13,150
13,683
14,676
18,132
23,699
23,542
25,833
27,401
29,312
32,477
36,194
37,726
35,140

3,806
4,204
4,421
4,848
5,122
5,274
5,665
5,982
6,707
8,175
8,837
9,933
10,996
11,921
13,750
15,704
15,995
14,241

16,448
17,019
17,330
18,391
24,179
24,681
26,846
29,223
31,348
34,332
37,669
42,390
40,321

57,710
57r541
56,684
56,538
55,889
55,618
55,354
54,927
54,355
53,969
53,100
52,543

80,512
80,473
80,246
80,080
79,890
79,802
79,044
78,891
78,776
78,973
78,308
77,908

47,016
47,186
47,389
47,435
47,599
47,391
47,701
47,725
47,389
46,733
45,653
44,749

95,556
95,741
95,018
94,415
92,978
92,101
92,530
92,266
91,155
91,111
90,859
89,702

37,630
37,653
37,133
37,289
36,990
36,632
36,646
36,389
35,801
35,465
35,509
35,140

15,804
15,497
15,375
15,373
15,267
15,301
15,364
15,306
14,949
14,772
14,608
14,241

42,122
42,591
42,510
41,753
40,721
40,168
40,520
40,571
40,405
40,874
40,742
40,321

51,453
51,410
50,016
50,268
50,582
50,333
50,137
50,849
51,006
51,016
51,389

77,141
76,420
75,896
76,018
76,686
75,928
76,081
76,116
76,270
76,857
76,619

43,912
43,742
43,465
43,528
43,466
43,579
43,475
43,611
43,109
42,755
42,926

89,611
89,284
87,927
87,583
87,415
87,550
88,483
89,258
89,636
90,188
90,054

35,360
35,257
34,815
34,722
34,592
34,989
35,031
35,814
36,176
36,116
36,115

14,378
14,477
14,164
14,347
14,174
14,206
14,441
14,440
14,477
14,708
14,813

39,873
39,550
38,948
38,514
38,649
38,355
39,011
39,004
38,983
39,364
39,126

1

Monthly average for year and total for month.
Book value, seasonally adjusted, end of period.
Note.—Data beginning 1958 are not strictly comparable with earlier data.
Source: Department of Commerce, Bureau of the Census.
2




Work
in
proc-

277

2,472
2,440
2,571
2,721
2,864
2,828
2,944
2,946
3,110
3,296
3,406
3,511

7,409
7,415
7,666
8,622
8,624
8,491
8,845
9,380
9,738
10,444
10,796
11,261
11,674
12,673
13,523
14,606
15,617

TABLE B-51.—Manufacturers'

new and unfilled orders, 1947-83

[Amounts in millions of dollars; monthly data seasonally adjusted]
New orders1

Unfilled orders—shipments
ratio 3

Unfilled orders2

Durable goods
industries
Year or month
Total
Total

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1982:
Jan
Feb
Mar

(Jayi;

June....
July
Aug
Sept....
Oct
Nov
Dec
1983:
Jan
Feb
Mar

ft::::
June....
July
Aug
Sept....
Oct
Nov
1

Capital
goods
industries,
nondefense

Nondurable
goods
industries

Total

Durable
goods
industries

Nondurable
goods
industries

Total

6,903
7,660
6,738
7,444
8,622
10,971
12,673
11,011
12,799
15,291
19,458
23,231
23,259
24,059
20,687

8,868
9,566
8,981
9,945
11,066
11,143
11,439
11,566
12,469
13,003
13,448
13,712
14,720
14,932
15,345
16,061
16,815
17,705
18,823
20,225
21,231
22,571
24,079
24,650
25,986
29,104
33,330
40,415
43,130
48,145
53,950
59,207
67,953
76,801
84,199
82,268

34,473
30,736
24,045
41,456
67,266
75,857
61,178
48,266
60,004
67,375
53,183
47,370
52,732
45,080
47,407
48,577
54,327
66,882
80,071
98,401
104,547
109,926
115,422
106,158
107,147
121,061
161,256
191,102
173,829
182,499
205,675
262,671
305,453
325,908
323,346
300,971

28,579
26,619
19,622
35,435
63,394
72,680
58,637
45,250
56,241
63,880
50,352
44,559
49,373
42,514
44,375
45,965
51,270
63,691
76,298
94,575
100,576
105,950
111,250
101,566
102,119
114,725
153,876
185,560
165,930
174,211
197,215
252,385
294,230
315,185
313,337
291,764

5,894
4,117
4,423
6,021
3,872
3,177
2,541
3,016
3,763
3,495
2,831
2,811
3,359
2,566
3,032
2,612
3,057
3,191
3,773
3,826
3,971
3,976
4,172
4,592
5,027
6,336
7,380
5,542
7,898
8,288
8,460
10,286
11,223
10,723
10,009
9,207

76,695
77,357
78,176
76,736
76,353
76,157
75,563
72,965
72,348
70,735
71,067
76,180

21,860
22,407
21,708
22,806
20,306
19,932
19,931
18,741
20,217
20,127
19,983
19,679

80,998
81,758
81,400
81,110
83,113
83,829
83,350
82,735
84,224
81,627
81,537
81,202

323,542
321,917
321,331
320,059
316,518
313,384
309,880
305,564
301,678
299,846
298,132
300,971

313,570
312,402
311,848
310,776
307,449
304,409
301,116
296,831
292,760
291,017
289,079
291,764

9,972
9,515
9,483
9,283
9,069
8,975
8,764
8,733
8,918
8,829
9,053
9,207

3.93
3.84
3.82
3.88
3.77
3,77

82,355
77,449
79,951
83,101
84,456
90,905
88,234
89,978
90,996
93,366
96,524

20,507
19,175
20,032
22,592
22,228
24,289
21,580
23,028
25,213
26,003
24,436

80,516
80,308
82,636
82,924
85,418
87,584
87,221
88,324
89,965
88,436
88,960

305,599
305,268
306,053
309,015
310,922
315,488
318,348
320,664
323,032
328,041
332,498

296,374
296,049
296,407
299,270
301,053
305,374
307,963
310,024
312,048
317,185
321,520

9,225
9,219
9,646
9,745
9,869
10,114
10,385
10,640
10,984
10,856
10,978

Durable
goods
industries

3.75
3.79
3.68
3.69
3.64
3.55

15,256
17,693
15,614
20,110
23,907
23,204
23,586
22,335
27,465
28,368
27,559
27,002
30,724
30,235
31,104
33,436
35,524
38,357
42,100
46,402
47,056
50,687
53,950
52,038
55,983
64,167
76,259
87,268
85,149
99,543
115,061
131,616
147,466
156,142
167,924
157,371

6,388
8,126
6,633
10,165
12,841
12,061
12,147
10,768
14,996
15,365
14,111
13,290
16,003
15,303
15,759
17,374
18,709
20,652
23,278
26,177
25,825
28,116
29,871
27,388
29,998
35,064
42,930
46,853
42,019
51,398
61,111
72,409
79,513
79,341
83,725
75,103

157,694
159,115
159,576
157,846
159,466
159,986
158,913
155,700
156,572
152,362
152,604
157,382
162,871
157,757
162,587
166,025
169,874
178,489
175,455
178,302
180,961
181,802
185,484

3.42

3.63
3.87
3.35
3.09
3.01
2.78
2.63
2.69
2.80
3.10
3.33
3.81
3.70
3.85
3.75
3.65
3.38
3.31
3.91
4.19
3.80
3.34
3,31
3.64
3.92
3.85
3.82
3.81

3.75
3.76
3.71
3.85
3.80
3.81

3.60
3.58
3.54
3.60
3.53

Monthly average for year and total for month.
Seasonally adjusted, end of period.
Ratio of unfilled orders at end of period to shipments for period; excludes, industries with no unfilled orders. Annual figures relate
to seasonally adjusted data for December.
2
3

Note.—Data beginning 1958 are not strictly comparable with earlier data.
Source: Department of Commerce, Bureau of the Census.




278

PRICES
TABLE B-52.—Consumer price indexes, major expenditure classes, 2946-83
[1967=100]
Food and

Year or
month

All
items

Total l

Food

Housing

Total 2

Shelter

Fuel and
other
utilities»

1946
1947
1948
1949

58.5
66.9
72.1
71.4

58.1
70.6
76.6
73.5

60.6
65.2

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

72.1
77.8
79.5
80.1
80.5
80.2
81.4
84.3
86.6
87.3

74.5
82.8
84.3
83.0
82.8
81.6
82.2
84.9
88.5
87.1

76.5
78.2
79.1
80.4
83.4
85.1
86.0

83.0
83.5
85.1
87.3
89.9
91.7
93.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970,
1971,
1972.
1973
1974
1975
1976
1977
1978
1979

88.7
89.6
90.6
91.7
92.9
94.5
97.2
100.0
104.2
109.8

90.2
90.9
91.7
92.7
93.8
94.9
97.2
100.0
104.0
110.4

87.8
88.5
89.6
90.7
92.2
93.8
96.8
100.0
104.8
113.3

116.3
121.3
125.3
133.1
147.7
161.2
170.5
181.5
195.4
217.4

100.0
103.6
108.8
114.7
118.3
123.2
139.5
158.7
172.1
177.4
188.0
206.3
228.5

88.0
89.1
89.9
91.2
92.4
94.4
99.1
100.0
103.6
108.9
114.9
118.4
123.5
141.4
161.7
175.4
180.8
192.2
211.4
234.5

118.2
123.4
128.1
133.7
148.8
164.5
174.6
186.5
202.3
227.6

246.8
272.4
289.1
298.4

248.0
267.3
278.2
284.4

254.6
274.6
285.7
291.7

282.5
283.4
283.1
284.3
287.1
290.6

281.0
283.3
283.0
283.9
285.5
287.8

292.2
292.8
293.3
294.1
293.6
292.4

273.6
275.8
275.6
276.5
278.1
280.2
280.8
279.9
280.1
279.6
279.1
279.1

293.1
293.2
293.4
295.5
297.1
298.1
299.3
300.3
301.8
302.6
303.1
303.5

HouseOther
hold
Apparel
TransEntergoods
Medical
furnishand
portation
care
tainment
and
ings
upkeep
services
and
operation ^

1980
1981
1982
1983
1982:
Jan..
Feb..
Mar...
May"
May
June
July
Aug
Sept

Oct
Nov
Dec

Energy3

70.9

67.5
78.2
83.3
80.1

50.3
55.5
61.8
66.4

44.4
48.1
51.1
52.7

72.8
77.2
78.7
80.8
81.7
82.3
83.6
86.2
87.7
88.6

91.3
90.9
89.9
89.9
91.9
92.3
93.1

79.0
86.1
85.3
84.6
84.5
84.1
85.8
87.3
87.5
88.2

68.2
72.5
77.3
79.5
78.3
77.4
78.8
83.3
86.0
89.6

53.7
56.3
59.3
61.4
63.4
64.8
67.2
69.9
73.2
76.4

90.1
90.3
91.8

95.9
97.1
97.3
98.2
98.4
98.3
98.8
100.0
101.3
103.6

93.8
93.7
93.8
94.6
95.0
95.3
97.0
100.0
103.8
107.7

89.6
90.4
90.9
91.9
92.7
93.7
96.1
100.0
105.4
111.5

89.6
90.6
92.5
93.0
94.3
95.9
97.2
100.0
103.2
107.2

79.1
81.4
83.5
85.6
87.3
89.5
93.4
100.0
106.1
113.4

100.0
105.7
111.0

100.0
105.2
110.4

94.2
94.4
94.7
95.0
94.6
96.3
97.8
100.0
101.5
104.2

123.6
128.8
134.5
140.7
154.4
169.7
179.0
191.1
210.4
239.7

107.6
115.0
120.1
126.9
150.2
167.8
182.7
202.2
216.0
239.3

116.1
119.8
122.3
126.8
136.2
142.3
147.6
154.2
159.6
166.6

112.7
118.6
119.9
123.8
137.7
150.6
165.5
177.2
185.5
212.0

120.6
128.4
132.5
137.7
150.5
168.6
184.7
202.4
219.4
239.7

116.7
122.9
126.5
130.0
139.8
152.2
159.8
167.7
176.6
188.5

116.8
122.4
127.5
132.5
142.0
153.9
162.7
172.2
183.3
196.7

263.3
293.5
314.7
323.1

281.7
314.7
337.0
344.8

278.6
319.2
350.8
370.3

111.5
115.7
118.3
121.6
135.3
151.0
160.1
167.5
177.7
190.3
205.4
221.3
233.2
238.5

178.4
186.9
191.8
196.5

249.7
280.0
291.5
298.4

265.9
294.5
328.7
357.3

205.3
221.4
235.8
246.0

214.5
235.7
259.9
288.3

328.3
329.5
327.6
331.4
336.7
340.9
342.8
344.2
342.6
342.8
340.7
335.9

336.2
337.1
339.3
339.2
345.4
352.2
354.7
356.3
359.5
363.4
362.2
364.1

228.4
230.2
231.6
232.6
233.4
233.7
234.1
233.4
234.2
235.4
235.1
235.7

187.3
188.0
191.1
191.9
191.5
190.8
189.7
191.8
194.9
195.5
195.4
193.6

289.9
288.0
285.1
282.9
285.6
292.8

313.4
316.2
318.8
321.7
323.8
326.4

229.2
231.2
232.8
233.9
234.4
235.6

248.4
250.3
252.2
253.8
255.0
255.8

288.5
287.4
287.6
287.0
286.4
286.5

306.1
307.3
306.7
309.4
313.8
317.5
319.2
320.1
319.7
320.7
319.0
316.3

296.1
296.2
295.3
295.5
295.8
294.8

330.0
333.3
336.0
338.7
342.2
344.3

236.6
237.4
238.3
240.3
239.9
240.1

257.2
258.3
266.6
271.2
273.8
276.6

416.4
413.0
406.1
395.7
402.1
418.6
424.5
424.5
424.2
425.0
422.6
419.9

280.7
281.6
283.2
284.6
285.0
284.7

288.1
289.0
290.5
291.9
292.4
292.0

317.9
318.5
318.6
320.3
321.8
323.1

338.3
339.2
339.3
341.7
342.7
343.6

365.4
364.6
363.8
363.6
369.3
373.6

235.8
236.7
237.6
239.0
238.4
238.6

191.0
192.0
194.5
195.5
196.1
195.6

293.0
289.9
287.4
292.3
296.2
298.3

347.8
351.3
352.3
353.5
354.3
355.4

241.5
243.1
244.6
244.6
244.8
245.4

279.9
281.6
281.9
283.2
283.6
284.5

414.5
406.7
399.9
410.0
421.3
427.3

2847
284.9
285.3
285.7
285.3
286.5

292.0
292.2
292.6
292.9
292.5
293.9

324.5
324.8
326.4
326.8
327.0
327.4

345.3
346.6
348.5
349.8
351.1
351.8

375.5
375.1
376.4
374.4
371.3
370.6

238.9
238.0
238.9
349.4
239.9
240.5

195.0
197.3
200.4
200.7
200.7
199.3

300.4
302.4
303.7
305.0
306.3
306.3

357.7
360.0
361.2
362.9
364.9
366.2

246.0
246.6
247.5
249.1
249.5
249.5

287.5
289.0
294.4
296.8
298.1
298.6

430.1
429.8
429.3
425.1
419.9
418.0

107.0
111.2
114.3
123.5
159.7
176.6
189.3
207.3
220.4
275.9
361.1
410.0
416.1
419.3

1983:
Jan
Feb
Mar
May
June
July
Aug
Sept

Nov
Dec
1
2
3

Includes alcoholic beverages, not shown separately.
Series beginning 1967 not comparable with series for earlier years.
See tables B-53 and B-54.

Note.—Data beginning 1978 are for all urban consumers; earlier data are for urban wage earners and clerical workers.
Data beginning 1983 incorporate a rental equivalence measure for homeowners' costs and therefore are not strictly comparable with
earlier figures. See Economic Report of the President, February 1983 for homeownership costs as measured prior to 1983.
Source: Department of Labor, Bureau of Labor Statistics.




279

TABLE B-53.—Consumer price indexes, selected expenditure classes, 1946-83
[1967-100]

Food and beverages

Shelter

Food
Year or month

1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1982:
Jan
Mar...
May
June
July
Aug
Sept
Oct
Nov
Dec
1983:
Jan
Feb
Mar
Apr
May
June
July
A8
Sept
Oct
Nov
Dec

Total l

Total

home

58.1
70.6
76.6
73.5
74.5
82.8
84.3
83.0
82.8
81.6
82.2
84.9
88.5
87.1

73.5
79.8
76.7
77.6
S6.3
87.8
86.2
85.8
84:1
84.4
87.2
91.0

Away
from
home

68.9
70.1
70.8
72.2
74.9
77.2
79.3
81.4
83.2
85.4
87.3
88.9
90.9
95.1
100.0
105.2
111.6

Total

Total

76.5
78.2
79.1
80.4
83.4
85.1
86.0
87.8
88.5
89.6
90.7
92.2
93.8
96.8
100.0
104.8
113.3

Household fuels

Home- MainteRent, owners' nance
and
residential
59.2
61.1
65.1
68.0
70.4
73.2
76.2
80.3
83.2
84.3
85.9
87.5
89.1
90.4
91.7
92.9
94.0
95.0
95.9
96.9
98.2
100.0
102.4
105.7
110.1
115.2
119.2
124.3
130.6
137.3
144.7
153.5
164.0
176.0
191.6
208.2
224.0
236.9

Total

71.2
72.4
74.1
77.2
80.5
81.8
83.2

95.9
97.1
97.3
98.2
98.4
98.3
98.8
100.0
101.3
103.6

Fuel oil,
coal,
and
bottled
gas
51.3
58.4
68.6
70.3
72.7
76.5
78.0
81.5
81.2
82.3
85.9
90.3
88.7
89.8

83.0
83.5
85.1
87.3
89.9
91.7
93.8

84.6
85.9
86.5
87.7
89.5
91.3
95.2
100.0
106.1
115.0

Total

102.5

107.6
115.0
120.1
126.9
150.2
167.8
182.7
202.2
216.0
239.3
285.7 278.6
314.4 319.2
334.1 350.8
346.3 370.3

349.4
407.0
446.2
469.2

89.2
91.0
91.5
93.2
S2.7
94.6
97.0
100.0
103.1
105.6
110.1
117.5
118.5
136.0
214.6
235.3
250.8
283.4
298.3
403.1
556.0
675.9
667.9
628.0

217.8
328.3
218.6
329.5
219.6
327.6
220.1
331.4
221.8
336.7
222.6
340.9
342.8
224.8
344.2
226.0
342.6
226.9
342.8
228.9
340.7
230.2
335.9 100.0 230.8

100.0

326.7
328.2
327.2
331.6
334.5
336.1
334.7
335.9
338.4
339.4
339.0
337.8

336.2
337.1
339.3
339.2
345.4
352.2
354.7
356.3
359.5
363.4
362.2
364.1

426.9
427.6
430.5
428.2
438.0
448.4
452.0
454.0
458.5
464.5
461,9
464.0

686.0
683.1
664.0
641.3
644.6
. 656.6
659.9
659.9
662.8
677.2
691.3
688.5

100.8
101.2
101.4
101.8
102.2
102.5
103.1
103.7
104.4
104.8
105.0
105.1

100.7
100.9
100.9
101.7
102.0
102.2
102.7
103.0
103.5
103.9
104.3
104.5

342.9
339.4
339.9
343.6
344.3
345.1
346.1
347.9
346.6
351.1
353.4
354.7

365.4
364.6
363.8
363.6
369.3
373.6
375.5
375.1
376.4
374.4
371.3
370.6

463.5
461.5
459.7
459.2
468.3
475.2
477.7
476.5
478.3
474.4
468.1
467.4

671.1
654.0
625.3
610.6
621.0
620.0
619.3
619.0
623.2
624.7
623.9
623.9

89.9
91.2
92.4
94.4
99.1
100.0 100.0
103.6 103.6
108.8 108.9
114.7 114.9
118.3 113.4
123.2 123.5
139.5 141.4
158.7 161.7
172.1 175.4
177.4 180.8
188.0 192,2
206.3 211.4
228.5 234.5
248.0 254.6
267.3 274.6
278.2 285.7
284.4 291.7

89.6
90.4
91.0
92.2
93.2
95.5
100.3
100.0
103.2
108.2
113.7
116.4
121.6
141.4
162.4
175.8
179.5
190.2
210.2
232.9
251.5
269.9
279.2
282.2

123.6
128.8
134.5
140.7
154.4
169.7
179.0
191.1
210.4
239.7
267.0 281.7
291.0 314.7
306.5 337.0
319.9 344.8 103.0

273.6
275.8
275.6
276.5
278.1
280.2
280.8
279.9
280.1
279.6
279.1
279.1

281.0
283.3
283.0
283.9
285.5
287.8
288.5
287.4
287.6
287.0
286.4
286.5

275.3
278.0
277.1
277.9
279.8
282.6
282.8
280.8
280.6
279.4
278.3
277.8

299.3
301.2
302.4
303.6
304.8
305.9
307.6
308.7
309.8
310.7
311.4
312.6

280.7
281.6
283.2
284.6
285.0
284.7
284.7
284.9
285.3
285.7
285.3
286.5

288.1
289.0
290.5
291.9
292.4
292.0
292.0
292.2
292.6
292.9
292.5
293.9

279.3
280.3
281.9
283.4
283.8
283.0
282.8
282.5
282.5
282.3
281.4
283.0

314.5
315.2
316.5
318.0
318.6
319.3
319.8
321.0
322.2
323.9
324.8
325.5

338.3
339.2
339.3
341.7
342.7
343.6
345.3
346.6
348.5
349.8
351.1
351.8

119.9
126.1
131.1
141.4
159.4
174.3
186.1
200.3
218.4
242.9

232.2
233.1
233.6
234.5
235.1
235.9
237.1
238.2
239.5
240.4
241.3
242.0

See next page for continuation of table.




Fuel and other utilities

Renters' costs

280

124.0
1337
140.7
151.0
171.6
187.6
199.6
214.7
233.0
256.4

100.0
101.4
103.4
107.9
115.3
120.1
128.4
160.7
183.8
202.3
228.6
247.4
286.4

(piN)
and

electricity

TABLE B-53.—Consumer price indexes, selected expenditure classes,

1946-83—Continued

[1967=100]
Medical care

Transportation
Private transportatiofl
Year or month
Total

Total2

New
cars

100 0
103.4
109.7
119.2
128 4
129.1
127 8
132.4
1412
1631
177.3
184 6
198.6
222.6
2413
257.8
260.8

305.5
307.7
310.2
311.9
313 6
316.0
318.0
319.2
320 6
321.9
322.3
323.1

253 3
253.4
254.5
2551
255 7
258.7
260 8
260 8
260 0
261.4
260.7
259.6

334 9
336.8
336.7
339.3
3421
345.6
347.2
348.1
353 3
356.3
356.0
355.6

313.4
316.2
318.8
321.7
323.8
326.4
330.0
333.3
336.0
338.7
342.2
344.3

195.9
197.7
200.0
202.4
204.1
205.6
206.5
208.2
209.9
211.6
212.9
213.7

339.4
342.4
345.1
348.0
350.2
353.0
357.3
361.0
364.0
366.9
371.0
373.4

324 4
325.9
326.6
327.4
328.7
329.5
329 8
3310
332 3
333.5
335.2
335.4

259 9
259.7
259.2
258.4
258 7
258.1
258 6
260 0
260 8
263.3
265.6
266.8

357.7
355.2
354.5
361.1
359.2
361.2
363.2
365.0
366.6
368.2
370.3
369.0

347.8
351.3
352.3
353.5
354.3
355.4
357.7
360.0
361.2
362.9
364.9
366.2

215.3
216.7
218.6
221.2
222.5
223.2
224.2
225.4
226.3
227.5
228.9
229.9

377.4
381.5
382.2
382.8
383.5
384.6
387.2
389.8
391.0
392.9
395.0
396.2

280.5
279.7
280.9
2851
2914
298.2
302.4
304 4
304 6
306.7
310.5
312.6

4061
399.2
384 1
366 9
370 6
392.4
400 2
398 4
394 2
390.7
388.3
381.7

2010
201.3
201.2
201.1
2016
201.6
2014
2021
202 7
204.3
206.2
207.0

3110
309.1
309.3
312.7
317.1
322.7
329 6
336 8
343 9
350.4
356.1
357.6

372 2
359.7
348.8
367.6
380 7
385.9
389 0
389 4
387 0
382.5
378.3
375.4

286.6
284.5
281.3
278.8
2815
288.9
292.3
292.4
2911
291.1
291.4
290.4
288 4
285.2
282.7
287.5
291.7
293.8
296 0
298 0
299 2
300.4
301.7
301.8

Medical
care
services

40.1
43.5
46 4
48.1
49.2
51.7
55.0
57.0
58.7
60 4
62.8
65 5
68.7
72.0
74.9
77 7
80.2
82.6
84.6
87.3
92.0
1000
107.3
116.0
124.2
133.3
138.2
144.3
159.1
179.1
197.1
216.7
235.4
258.3
287.4
318.2
356.0
387.0

197 4
195.5
194 4
196 0
197 5
198.1
198 6
198 7
197 7
197.7
199.0
200.1

289 9
288.0
2851
282 9
285 6
My
a
June...:::::...::::::::::::::::::::::: 292.8
July
2961
Aug
296 2
Sept
295 3
oct!.::::::::::::::::;::: 295.5
Nov
295.8
Dec
294.8
1983:
Jan
293 0
Feb
289.9
Mar
287.4
Apr
292.3
May
296 2
June
298.3
July
300 4
HUE
302 4
Sept
303 7
Ot
c
305.0
Nov
306.3
Dec
306.3

89.2
75.9
71.8
69.1
77.4
80.2
89.5
83.6
86 9
94.8
96.0
100.1
99.4
97.0
100.0

Medical
care
commodities

76.2
81.8
86.1
87.4
88.5
91.0
91.8
92.6
93.7
94.7
96.7
99.3
102.8
104.4
104.5
103 3
101.7
100.8
100.5
100.2
100.5
100.0
100.2
101.3
103.6
105.4
105.6
105.9
109.6
118.8
126.0
134.1
143.5
153.8
168.1
186.5
205.7
223.3

104.3
110 2
110.5
117 6
122.6
146 4
167 9
182.8
186.5
201.0
208.1
256 9
296.4
329.7

69.2"
75 6
82.8
83.4
87.4
94 9
95.8
94.3
90 9
93.5
98 4
101.5
105.9
104.5
104 5
104.1
103.5
103.2
100.9
99.1
100 0
102.8
104.4
107.6
112 0
111.0
111 1
117.5
127 6
135 7
142.9
153 8
166.0
179.3
190 2
197.6
202.6

Total

44.4
48.1
511
52.7
53.7
56.3
59.3
61.4
63.4
64 8
67.2
69 9
73.2
76.4
79.1
814
83.5
85.6
87.3
89.5
93.4
100.0
106.1
113.4
120.6
128.4
132.5
137.7
150.5
168.6
184.7
202.4
219.4
239.7
265.9
294.5
328.7
357.3

52.0
56.4
59 6
61.1
62.3
67.0
68.6
72.3
74.8
76 5
79.5
82 4
83.7
85.5
87.2
89 3
90.4
91.6
92.8
94.5
96.2
100 0
105.5
112.2
120.6
129.2
135.1
142 2
156.8
176 6
189 7
203.7
220 6
242.6
268.3
293 6
315.8
330.0

54.3
61.5
68 2
72.3
72.5
75.8
80.8
82.4
80.3
78.9
80.1
84.7
87.4
91.1
90.6
91.3
93.0
93.4
94.7
96.3
97.5
100.0
103.0
106.5
111.1
116.6
117.5
121.5
136.6
149.8
164 6
176.6
185.0
212.3
249.2
277 5
287.5
293.9

Other

Public
transportation

34.4
36.0
40 7
45.2
48.9
54.0
57 5
61.3
65 5
67 4
70.0
111
76.1
78.3
81.0
84 6
87.4
88.5
90.1
91.9
95.2
100 0
104.6
112.7
128.5
137 7
143.4
144 8
148.0
158.6
174 2
182.4
187.8
200.3
251.6
312 0
346.0
362.6

54.9
62.2
70 4
72.3
71.8
73.9
75 8
80.3
82 5
83 6
86.5
90 0
88.8
89.9
92 5
914
91.9
91.8
91.4
94.9
97.0
100 0
101.4
104.7
105.6
106 3
107.6
1181
159.9
170 8
177 9
188.2
196 3
265.6
369.1
410 9
389.4
376.4

50.3
55.5
618
66.4
68.2
72.5
77 3
79.5
78.3
77 4
78.8
83.3
86.0
89.6
89.6
90 6
92.5
93.0
94.3
95.9
97.2
100 0
103.2
107.2
112.7
118 6
119.9
123 8
137.7
150 6
165 5
177.2
185 5
212.0
249.7
280 0
291.5
298.4

1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1982:
Jan
Feb
Mar
Apr

Motor
fuel 3

Used
cars

Automobile
maintenance
and
repair

'

1
2
3

Includes alcoholic beverages, not shown separately.
Includes direct pricing of new trucks and motorcycles, beginning September 1982.
Includes direct pricing of diesel fuel and gasohol beginning September 1981.
* Not available.
Note.—Data beginning id78 are for all urban consumers; earlier data are for urban wage earners and clerical workers.
Data beginning 1983 incorporate a rental equivalence measure for homeowners' costs and therefore are not strictly comparable with
earlier figures. See Economic Report of the President, February 1983 for homeownership costs as measured prior to 1983.
Source: Department of Labor, 8ureau of labor Statistics.




281

TABLE B-54.—Consumer price indexes, commodities, services, and special groups, 1939-83
[1967=100]
Commodities

Year or
month

All
items

Ail
commodities

Food

All

Special indexes

Services

Commodities less food

Durable

Nondurable

All
services

Medical
care
services

Services
less
medical
care

All
items
less
food

All
items

less
energy

All
items
less
food
and
energy

Energy 1

1939

41.6

40.2

34.6

47.7

48.5

44.3

43.5

32.5

47.2

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

42.0
44.1
48.8
51.8
52.7
53.9
58.5
66.9
72.1
71.4

40,6
43.3
49.6
54.0
54.7
56.3
62.4
75.0
80.4
78.3

35.2
38.4
45.1
50.3
49.6
50.7
58.1
70.6
76.6
73.5

48.0
50.4
56.0
58.4
61.6
64.1
68.1
76.8
82.7
81.5

48.1
51.4
58.4
60.3
65.9
70.9
74.1
80.3
86.2
87.4

44.7
46.7
51.6
53.8
56.6
58.6
62.9
72.2
77.8
76.3

43.6
44.2
45.6
46.4
47.5
48.2
49.1
51.1
54.3
56.9

32.5
32.7
33.7
35.4
36.9
37.9
40.1
43.5
46.4
48.1

47.3
48.7
52.1
53.6
55.7
56.9
59.4
64.9
69.6
70.3

72.1
77.8
79.5
80.1
80.5
80.2
81.4
84.3
86.6
87.3

78.8
85.9
87.0
86.7
85.9
85.1
85.9
88.6
90.6
90.7

74.5
82.8
84.3
83.0
82.8
81.6
82.2
84.9
88.5
87.1

81.4
87.5
88.3
88.5
87.5
86.9
87.8
90.5
91.5
92.7

88.4
95.1
96.4
95.7
93.3
91.5
91.5
94.4
95.9
97.3

76.2
82.0
82.4
83.1
83.5
83.5
85.3
87.6
88.2
89.3

58.7
61.8
64.5
67.3
69.5
70.9
72.7
75.6
78.5
80.8

49.2
51.7
55.0
57.0
58.7
60.4
62.8
65.5
68.7
72.0

71.1
75.7
77.5
79.0
79.5
79.7
81.1
77.6
80.4
82.5

83.8
85.7
87.3

83.9
86.3
87.0

83.3
85.2
87.0

90.1
90.3
91.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

88.7
89.6
90.6
91.7
92.9
94.5
97.2
100.0
104.2
109.8

91.5
92.0
92.8
93.6
94.6
95.7
98.2
100.0
103.7
108.4

88.0
89.1
89.9
91.2
92.4
94.4
99.1
100.0
103.6
108.9

93.1
93.4
94.1
94.8
95.6
96.2
97.5
100.0
103.7
108.1

96.7
96.6
97.6
97.9
98.8
98.4
98.5
100.0
103.1
107.0

90.7
91.2
91.8
92.7
93.5
94.8
97.0
100.0
104.1
108.8

83.5
85.2
86.8
88.5
90.2
92.2
95.8
100.0
105.2
112.5

74.9
77.7
80.2
82.6
84.6
87.3
92.0
100.0
107.3
116.0

85.2
86.7
88.1
89.6
91.2
93.2
96.4
100.00
104.9
112.0

88.8
89.7
90.8
92.0
93.2
94.5
96.7
100.0
104.4
110.1

88.3
89.3
90.4
91.6
92.9
94.3
97.3
100.0
104.4
110.3

88.3
89.3
90.5
91.6
93.0
94.3
96.6
100.0
104.6
110.7

94.2
94.4
94.7
95.0
94.6
96.3
97.8
100.0
101.5
104.2

1970
1971
1972.
1973
1974.
1975.
1976.
1977.
1978.
1979.

116.3
121.3
125.3
133.1
147.7
161.2
170.5
181.5
195.4
217.4

113.5
117.4
120.9
129.9
145.5
158.4
165.2
174.7
187.1
208.4

114.9
118.4
123.5
141.4
161.7
175.4
180.8
192.2
211.4
234.5

112.5
116.8
119.4
123.5
136.6
149.1
156.6
165.1
174.7
195.1

111.8
116.5
118.9
121.9
130.6
145.5
154.3
163.2
173.9
191.1

113.1
117.0
119.8
124.8
140.9
151.7
158.3
166.5
174,3
198.7

121.6
128.4
133.3
139.1
152.1
166.6
180.4
194.3
210.9
234.2

124.2
133.3
138.2
144.3
159.1
179.1
197.1
216.7
235.4
258.3

121.3
127.7
132.6
138.3
151.0
164.7
177.7
190.6
206.9
230.1

116.7
122.1
125.8
130.7
143.7
157.1
167.5
178.4
191.2
213.0

117.0
122.0
126.1
133.8
146.9
160.2
169.2
179.8
193.8
213.1

117.6
123.1
126.9
131.3
142.2
155.3
165.5
175.8
188.7
207.0

107.0
111.2
114.3
123.5
159.7
176.6
189.3
207.3
220.4
275.9

1980.
1981.
1982.
1983.

246.8
272.4
289.1
298.4

233.9
253.6
263.8
271.5

254.6
274.6
285.7
291.7

222.0
241.2
250.9
259.0

210.4
227.1
241.1
253.0

235.2
257.5
261.6
266.3

270.3
305.7
333.3
344.9

287.4
318.2
356.0
387.0

266.6
302.2
328.6
338.1

244.0
270.6
288.4
298.3

238.0
261.7
279.3
289.3

232.8

257.1
276.1
287.0

361.1
410.0
416.1
419.3

282.5
283.4
283.1
284.3
287.1
290.6
292.2
292.8
293.3
294.1
293.6
292.4

258.8
259.5
258.8
258.9
261.5
265.1

281.0
283.3
283.0
283.9
285.5
287.8

245.9
246.0
245.2
245.0
247.8
251.9

233.4
233.7
233.5
235.8
239.8
243.2

260.2
260.1
258.4
255.0
256.2
261.2

323.9
325.3
325.5
328.4
331.8
334.9

339.4
342.4
345.1
348.0
350.2
353.0

320.0
321.1
321.1
324.0
327.5
330.7

281.4
282.1
281.7
282.9
286.0
289.7

272.1
273.4
273.6
275.7
278.3
280.7

268,5
269.5
269.8
272.2
274.9
277.3

416.4
413.0
406.1
395.7
402.1
418.6

266.5
266.4
266.6
267.5
267.8
267.7

288.5
287.4
287.6
287.0
286.4
286.5

253.5
253.8
253.9
255.4
256.0
255.8

244.7
244.6
244.1
246.0
246.6
247.3

263.0
263.6
264.6
265.7
266.1
264.7

337.0
338.9
339.7
340.3
338.6
335.6

357.3
361.0
364.0
366.9
371.0
373.4

332.5
334.1
334.8
335.1
332.9
329.3

291.5
292.5
292.9
294.0
293.6
292.1

282.C
282.7
283.1
284.0
283.6
282.5

278.7
279.8
280.4
281.5
281.2
279.9

424.5
424.5
424.2
425.0
422.6
419.9

293.1
293.2
293.4
295.5
297.1
298.1
299.3
300.3
301.8
302.6
303.1
303.5

267.2
266.7
266.7
269.2
270.9
271.6
272.5
273.4
274.5
275.0
275.2
275.5

288.1
289.0
290.5
291.9
292.4
292.0
292.0
292.2
292.6
292.9
292.5
293.9

254.4
253.2
252.4
255.4
257.6
258.9
260.2
261.4
262.9
263.6
264.1
263.8

247.3
247.1
247.4
248.7
249.5
251.2
252.9
254.3
256.4
258.7
261.0
261.8

262.4
260.5
258.9
263.0
266.3
267.3
268.4
269.6
270.6
270.2
269.5
268.5

337.9
338.9
339.4
341.2
342.6
344.0
345.6
346.8
349.0
350.2
351.0
351.6

377.4
381.5
382.2
382.8
383.5
384.6
387.2
389.8
391.0
392.9
395.0
396.3

331.4
332.2
332.7
334.5
336.0
337.4
338.9
339.9
342.2
343.3
344.1
344.5

292.6
292.6
292.4
294.7
296.5
297.8
299.3
300.5
302.3
303.2
303.9
304.0

283.8
284.7
285.6
287.0
287.6
288.2
289.2
290.3
292.1
293.4
294.4
295.0

281.1
282.0
282.6
284.0
284.7
285.5
286.8
288.2
290.2
291.8
293.2
293.6

414.5
406.7
399.9
410.0
421.3
427.3
430.1
429.8
429.3
425.1
419.9
418.0

1982:
Jan
Feb
Mar....
Apr
Api
Ma
lay...,
June,.,
July...,
Aug...,
Sept..

Oct
Nov...
Dec...,

1983:
Jan
Feb
Mar...

J&jZ.
June..
July...
Aug...
Sept..
Oct....
Nov...
Dec...

1
Fuel oil, coal, and bottled gas; gas (piped) and electricity; and motor fuel. Motor oil, coolant, etc. also included through 1982.
Note.—Data beginning 1978 are for all urban consumers; earlier data are for urban wage earners and clerical workers.
Data beginning 1983 incorporate a rental equivalence measure for homeowners' costs and therefore are not strictly comparable with
earlier figures. See Economic Report of the President, February 1983 for homeownership costs as measured prior to 1983.
Source: Department of Labor, Bureau of Labor Statistics.




282

TABLE B-55.—Changes in consumer price indexes, 1958-83
[Percent change]
All items less
food

All items
Year or month

Dec.
to
Dec 1

Dec.
to
Dec 1

Year
to
Year

All items less
energy

Year
to
Year

Year
to
Year

Dec.
to
Dec 1

2.3

All items less food,
energy, and shelter

All items fess
food and
energy
Dec.
to
Dec 1

Year
to
Year

Dec.
to
Dec 1

Year
to
Year

1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

1.8
1.5
1.5
7
1.2
16
li2
19
3.4
30
47
6.1
5.5
34
3.4
88
12.2
7.0
4.8
6.8
90
13.3

27
.8
1.6
10
1.1
12
1.3
17
2.9
29
42
54
59
43
33
62
11.0
91
5.8
65
77
113

1.6
2.3
1.0
11
1.2
16
1.0
16
3.3
35
4.9
5.7
6.5
31
3.0
56
12.2
7.1
6.2
6.3
85
14.0

1.9
1.7
10
1.2
13
1.3
14
2.3
34
4.4
5.5
6.0
4.6
3.0
3.9
9.9
9.3
6.6
6.5
7.2
11.4

19
1.4
1.4
8
1.2
18
1.3
19
3.5
31
49
6.4
5.6
33
3.5
83
11.5
6.7
4.6
6.8
92
11.1

2.9
.8
1.5
11
1.2
13
1.4
15
3.2
28
4.4
5.7
6.1
4.3
3.4
6.1
9.8
9.1
5.6
6.3
7.8
10.0

1.8
2.2
.8
15
1.1
18
1.2
15
3.3
39
5.1
6.1
6.6
3.1
3.0
4.7
11.3
6.7
6.1
6.4
8.5
11.3

23

2.1
1.5
11
1.3
12
1.5
14
2.4
35
46
5.8
6.2
47
3.1
35
8.3
9.2
6.6
6,2
73
9.7

4.6
5.0
5.7
3.2
2.6
3.5
11.3
6.4
7.0
5.2
6.5
7.2

4.6
4.8
5.1
4.9
2.4
3.0
7.6
8.9
7.0
6.0
5.7
6.9

1980
1981
1982
1983

12.4
8.9
3.9
3.8

13.5
10 4
6.1
3.2

12.9
9.9
4.0
4.1

14.6
10.9
6.6
3.4

11.7
86
4.2
4.4

11.7
10.0
6.7
3.6

12.1
9.6
4.5
4.9

12.5
10.4
7.4
3.9

9.9
9.4
6.1
5.0

8.8
9.5
7.7
5.2

Change from preceding month
Seasonally
adjusted

Unadjusted

1982:
Jan
Feb
Mr
a
Apr
May
June
July
Ayg
Sept
Oct
Nov
Dec
1983:
Jan
Feb
Mr
a
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec

0.4

..

.

..
.
..

-il
.4
1.0
1.2
.6
2
-2
-A
2
.0
.1
.7
.5
.4
.3
.5
i2
.1

Unadjusted

0.3
.1

0.2
.2

o
.2
1.0
1.1
.6
.3
.1
.4
0

".4
1.1
1.3
.6
.3
.1
.4
-.1

2
-.2
.1

2
0
—1

.5
.2
.4
.4
.5
.4
.3
.3

.6
.4
.5

ie
io

Seasonally
adjusted

Seasonally
adjusted

Unadjusted

Unadjusted

0.2
0
-.1
.2
1.1
1.2
.6
.4
.1
.4
-.0

0.4

4

-'.2

3
-.3

5
.3

4
.3

4
.3

i4
.3

is

i6
.6
.5

is
i4
.2

1

il
.8
.9
.9
.5
.2
.1
.3

.2
.2
.3
.4
.6
.4
.3
.2

0.4
.5
.1
i8
.7
.5
.4
.2
.2

.4
.4
.4
.5
.4
.3

0.2
.9
1.0
.9
.5
.4
.2
.4
-.1

i3
.5
.5
'.6

Seasonally
adjusted

Unadjusted

0.4
.5
.1
.8
.8
.6
.4
.1
.2
*2
5
i2
.4
.3
.3
.6
.5
.5
A
.3

Seasonally
adjusted

0.3
.4
.7
.7

0.5
.4
.6
.5

i6
.4

.5

i8
.6
.3
3
.4
.4
.4
.2

i4
.S
i5
5
.4
.3

.4
.5

'.2
A
.6
.5

'.6
.5
.1

'.6
.4
.3

Changes from December to December are based on unadjusted indexes.
Note.—Data beginning 1978 are for all urban consumers; earlier data are for urban wage earners and clerical workers.
Data beginning 1983 incorporate a rental equivalence measure for homeowners' costs and therefore are not strictly comparable with
earlier figures. See Economic Report of the President, February 1983 for homeownership costs as measured prior to 1983.
Source: Department of Labor, Bureau of Labor Statistics.




283

TABLE B-56.—Changes in consumer price indexes, commodities and services, 1948-83
[Percent change]
Alt items
Year or
mnn+h

1948
1949
1950
1951
1952... .
1953
1954...
1955
1956
1957
1958 . .
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983

Dec.
to
Dec.1

Year
to
year

2.7
-1.8
58
59
.9
6
5
.4
29
3.0
18
1.5
15
.7
12
1.6
1.2
19
3.4
30
4.7
6.1
5.5
3.4
34
8.8
12.2
7.0
4.8
6.8
9.0
13.3
12.4
8.9
3.9
3.8

7.8
-1.0
1.0
79
2.2
8
.5
-.4
15
3.6
27
.8
16
1.0
11
1.2
1.3
17
2.9
29
4.2
5.4
5.9
4.3
33
6.2
11.0
9.1
5.8
6.5
7.7
11.3
13.5
10.4
6.1
3.2

Commodities
Commodities
less food

Food

Total
Dec.
to
Dec1

Year
to
year

Dec.
to
Dec.1

Year
to
year

Dec.
to
Dec1

Year
to
year

1.7
-4.1
7.7
59
-.7
6
-1.4
-.4
26
2.6
13
.6
11
0
10
1.4
.8
16
2.5
25
3.8
5.5
4.0
2.9
34
10.4
12.7
6.3
3.3
6.1
8.9
13,0
11.1
6.0
3.6
2.9

7.2
-2.6
.6
90
1.3
-3
-.9
-.9
9
3.1
23
.1
9

-0.8
-3.7
9.6
74
-1.1
13
-1.6
-.9
31
2.8
22
-.8
31
-.9
1.5
1.9
1.4
34
3.9
12
4.3
7.2
2.2
4.3
47
20.1
12.2
6.5
.6
8.0
11.8
10.2
10.2
4.3
3.1
2.6

8.5
-4.0
1.4
11.1
1.8
-15

5.3
-4.8
5.7
46

7.7
-1.5
=.1
75
.9
2
-1.1
—7
10
3.1
11
1.3
4
.3
.7
.7
.8
.6
1.4
26
3.7
4.2
4.1
3.8
22
3.4
10.6
9.2
5.0
5.4
5.8
11.7
13.8
8.6
4.0
3.2

.9
.9
1.1
1.2
2.6
18
3.7
4.5
4.7
3.4
30
7.4
12.0
8.9
4.3
5.8
7.1
11.4
12.2
8.4
4.0
2.9

Energy2

Services

-1.4
7
3.3
4.2
-1.6
1.0
1.3
.9
1.4
1.3
2.2
5.0
.9
3.6
5.1
5.5
3.0
43
14.5
14.4
8.5
3.1
6.3
10.0
10.9
8.6
7.9
4.0
2.1

2
-?.4
0
25
2.2
.8
1.5
-.3
.6
,7
1.2
.4
.7
1.9
3.1
3.7
4.5
4.8
2.3
25
5.0
13.2
6,2
5.1
4.9
7.7
14.3
11.5
6.7
3.8
3.1

1

Medical care
services

Total
Dec.
to
Dec.1

Year
to
year

Dec.
to
Dec 1

6.1
3.6
3.6
52
4.6
42
1.9
2.3
3.1
4.5
2.7
3.7
2.7
1.9
1.7
2.3
1.8
2.6
4.9
4.0
6.1
7.4
8.2
4.1
3.6
6.2
11.3
8.1
7.3
7.9
9.3
13.7
14.2
13.0
4.3
4.8

6.3
4.8
3.2
53
4.4
43
3.3
2.0
25
4.0
38
2.9
33
2.0
1.9
2.0
1.9
2.2
3.9
4.4
5.2
6.9
8.1
5.6
3.8
4.4
9.3
9.5
8.3
7.7
8.5
11.0
15.4
13.1
9.0
3.5

7.0
2.1
3.3
5.8
5.5
36
2,6
3.2
4.1
4.5
4.9
4.6
3.8
3.5
3.0
2.6
2.6
3.5
8.1
7.9
7.4
7.0
8.3
5.3
3.8
5.8
13.3
10.3
10.7
9.0
9.2
10.6
10.0
12.7
11.2
6.1

Year
to
Year
6.7
3.7
2.3
51
6.4
36
3.0
2.9
40
4.3
4.9
4.8
4.0
3.7
3.2
3.0
2.4
3.2
5.4
8.7
7.3
8.1
7.1
7.3
3.7
4.4
10.3
12.6
10.1
9.9
8.6
9.7
11.3
10.7
11.9
8.7

Dec.
to
Dec.1

-0.7
4.3
15
-1.1
2.1
=-.8
-.2
2.0
1.8
1.4
1.7
3.1
4.5
3.1
2.8
16.8
21.6
11.6
6.9
7.2
8.0
37.4
18.1
11.9
1.3

Year
to
year

0.2
1.7
2.6
.3
.3
-.4
1.8
1.6
2.2
1.5
2.7
2.7
3.9
2.8
8.0
29.3
10.6
7.2
9.5
6.3
25.2
30.9
13.5
1.5
8

Changes from December to December are based on unadjusted indexes.
Fuel oil, coal, and bottled gas; gas (piped) and electricity; and motor fuel. Motor oil, coolant, etc. also included through 1982.
Note.—Data beginning 1978 are for all urban consumers; earlier data are for urban wage earners and clerical workers.
Data beginning 1983 incorporate a rental equivalence measure for homeowners' costs and therefore are not strictly comparable with
earlier figures. See Economic Report of the President, February 1983 for homeownership costs as measured prior to 1983.
Source: Department of Labor, Bureau of Labor Statistics.
2




284

TABLE B-57.—Producer price indexes by stage of processing, 1947-83
[1967=100]
Finished goods
Consumer foods
Total
finished
goods

Year or month

Finished goods excluding consumer foods
Consumer goods

Total

Crude

Processed

74.0
79.9
77.6
79.0
86.5
86 0
85.1
85.3
85 5
87.9
91.1
93.2
93.0
93.7
93.7
94 0
93.7
94.1
95.7
98.8
100 0
102.8
106.6
110.3
113.7
117.2
127.9
147.5
163.4
170.6
181.7
195.9
217.7
247.0
269 8
280.7
285.2

82 8
90.4
83.1
84 7
95.2
94 3
89.4
88.7
86 5
86.3
89.3
94 5
90.1
92.1
91.7
92 5
91.4
91.9
95 4
101.6
100 0
103.6
110.0
113 5
115.3
1217
146.4
166.9
181.0
180.4
189 9
207.2
226.2
239.5
253 6
259.3
261.8

99 4
107.1
101.3
92 2
105.9
112 8
105.2
94.7
98 8
98 7
97.4
103 5
94.3
100.6
96.1
97 0
95.5
98.2
98 6
104.8
100 0
107.5
116.0
116 3
115.8
1212
160.7
180.8
181.2
193.9
2010
216.8
233.1
237.2
263 8
252.7
259.5

80.2
87.6
80.1
83 4
93.2
913
86.7
87.6
84 4
84.3
87.9
93.1
89.5
90.7
90.9
917
90.7
90.8
94.9
101.0
100 0
103.0
108.9
113.1
115.1
1217
143.9
164.6
181.3
177.8
187 3
204.6
223.8
237.8
250 6
257.7
259.9

277 9
277.9
277.3
277.3
277.8
279.9

256 4
258.2
257.1
260.0
262.3
263.4

280 6
282.5
263.3
266.6
259.9
254.7

Dec

281.7
282.3
281.2
2841
284 9
285.5

260.6
259.7
259 9
257 7
257 4
258.3

1983: i
Jan
Feb
Mar
Apr .
May
June

283 9
284.1
283.4
2831
284 2
285.0
285.7
2861
2851
287 9
286.8
287.1

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965.
1966
1967
1968
1969.
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983 ' . .
.
.
1982:
Jan
Feb

Mr
a

Apr
May
June
July
Aug
Sept. .
Ot
c

Nv
o

July
Aug
Sept
Oct
Nov
Dec

,

Total

Durable

Capital
Nonequipment
durable

finished
consumer
goods

102.6
105.4
109.1
113.1
115 4
120.1
.139.3
156.2
166.1
177.7
190.7
213.3
247.8
273 3
285.8
290.9

79 0
84.0
82.2
83 5
89.5
88 3
89.1
89.4
901
92.3
94.6
94 7
95.9
96.3
96.2
96 0
96.0
95.9
96 6
98.1
100 0
102.1
104.6
107 7
111.4
113 5
118.6
138.6
153.1
162.6
174 3
186.7
211.5
250.8
276 5
287.8
291.3

74.6
79.7
81.8
82.7
88.2
88.9
89.6
90.3
912
94.3
97.1
98.4
99.6
99.2
98.8
98.3
97.8
98.2
97.9
98.5
100.0
102.2
104.0
106.9
110.8
113.3
115.4
125.9
138.2
144.5
152.8
166.9
183.2
206.2
218.6
226.7
233.1

80 7
85.8
82.3
83 6
90.0
87 8
88.6
88.9
89 4
91.1
93.2
92.6
94.0
94.7
94.7
94 8
95.1
94.8
95.9
97.8
100 0
102.2
105.0
108.3
111.7
113.6
120.5
146.8
163.0
174.8
189.3
200.0
231.3
283.9
319.6
333.6
335.3

55 4
60.4
63.4
64 9
71.2
72 4
73.6
74.5
76 7
82.4
87.5
89 8
91.5
91.7
91.8
92 2
92.4
93.3
94.4
96.8
1000
103.5
106.9
112.0
116.6
119.5
123.5
141.0
162.5
173.4
184.6
199.2
216.5
239.8
264.3
279.4
287.3

80 5
86.5
82.5
83 9
91.8
90 7
89.2
89.1
88 5
89.8
92.4
94.4
93.6
94.5
94.3
94.6
94.1
94.3
96.1
99.4
100.0
102.7
106.6
109.9
112.9
116.6
129.2
149.3
163.6
169.7
180.7
194.9
217.9
248.9
271.3
281.0
284.6

252 1
254.0
254.5
257.3
260.3
262.0

283.0
282.4
281.9
281.1
281.0
283.4

285.2
284.9
284.0
282.3
281.8
284.8

226.2
224.0
223.9
224.1
225.0
225.9

329.3
330.3
328.8
325.7
324.3
328.7

276.2
275.0
275.8
277.2
278.1
279.2

278.3
278.6
277.7
277.3
277.7
280.1

241.0
239.2
228 2
232 4
2361
247.6

260.2
259.4
260.6
257 9
257 2
257.1

286.7
287.9
286.3
290 8
292 0
292.5

288.8
290.2
288.9
293 3
294 8
295.0

226.7
227.5
223.0
231.0
231.2
'232.0

335.3
337.2
338.3
340.0
342.5
342.2

280.2
280.7
278.7
283.2
283.8
284.9

282.1
282.8
281.9
284.3
285.3
285.6

258 4
261.0
261.1
262 9
262 6
261.2

232 9
240.8
247.9
265 8
267 2
251.2

258 5
260.7
260.1
260.5
2601
260.0

290 3
289.6
288.7
287.7
289 3
290.8

2914
290.3
288.9
287.3
289 4
291.6

231.7
232.9
231.9
232.2
232.9
233.1

336.6
333.7
332.0
328.7
332.0
335.7

285.2
285.6
285.6
286.2
286.5
286.7

283.5
283.7
282.7
282.3
283.6
284.6

260.7
260 7
263 3
264 3
261.8
264.0

247 1
259 9
269 8
289 8
272.8
269.1

259.8
258.7
260.5
259 9
258.7
261.5

291.8
292.5
290.3
293 7
293.0
292.6

292.8
293 5
2913
293 8
293.0
292.5

233.4
233.8
228.9
235.4
235.3
235.7

337.7
338.6
338.6
337.9
336.6
335.3

287.2
287.7
285.4
290.9
290.3
290.5

285.2
285.7
285.1
287.1
285.8
286.1

See next page for continuation of table.




Total

285

1*6*61*6"

TABLE B-57.—Producer price indexes by stage of processing,

1947-83—Continued

[1967 = 100]
Crude materials for further processing

Intermediate materials, supplies, and components

Year or month
Total

Foods
and
feeds'

Materials and
components
Other

For
manufacturing

For
construction

Processed
fuels
and
lubricants

Containers

Supplies

Total

Foodstuffs
and
feedstuffs

Other

Total

Fuel

Other

1947
1948
1949

72.4
78.3
75.2

70.0
76.1
74.2

72.1
77.8
74.5

66.0
73.1
73.2

85.5
96.9
88.2

66.8
69.8
70.1

77.5
81.0
76.3

101.2
110.9
96.0

111.7
120.8
100.3

66.6
78.7
78.3

90.6
100.7
91.6

1950
1951
1952
1953
1954

78.6
88.1
85.5
86.0
86.5

77.7
87.0
84.3
85.3
85.7

78.1
88.5
84.8
86.2
86.3

77.0
84.3
83.7
85.1
85.5

89.9
93.9
92.8
93.4
93.3

72.0
84.5
79.9
80.0
81.5

78.9
88.8
88.8
84.3
86.3

104.6
120.1
110.3
101.9
101.0

107.6
124.5
117.2
104.9
104.9

77.9
79.4
79.9
82.7
79.0

104.7
120.7
104,6
100.1
98.2

1955
1956
1957
1958
1959

88.1
92.0
94.1
94.3
95.6

88.3
92.6
95.0
94.8
96.4

88.4
92.6
94.8
95.2
96.5

88.9
93.5
94.0
94.0
96.6

93.3
96.2
101.9
96.0
95.6

82.6
88.6
92.5
94.7
94.2

84.8
87.1
88.0
90.0
91.2

97.1
97.6
99.8
102.0
99.4

95.1
93.1
97.2
103.0
96.2

78.8
84.4
89.2
90.3
91.9

103.8
107.6
106.2
102.2
105.8

1960
1961
1962
1963
1964

95.6
95.0
94.9
95.2
95.5

96.8
95.5
95.3
95.0
95.6

96.5
95.3
94.7
94.9
95.9

95.9
94.6
94.2
94.5
95.4

98.2
99.4
99.0
98.1
96.0

95.5
94.7
95.9
94.7
94.0

90.7
91.8
93.8
95.2
94.3

97.0
96.5
97.5
95.4
94.5

95.1
93.8
95.7
92.9
90.8

92.8
92.6
92.1
93.2
92.8

101.4
102.5
102.0
100.7
102.4

1965
1966
1967
1968
1969

96.8
99.2
100.0
102.3
105.8

100.0
99.4
102.7

96.9
98.9
100.0
102.5
106.1

97.4
99.3
100.0
102.2
105.8

96.2
98.8
100.0
105.0
110.8

97.4
99.2
100.0
97.6
98.5

95.8
98.4
100.0
102.4
106.3

95.2
99.4
100.0
101.0
102.8

99.3
105.7
100.0
101.6
108.4

97.1
105.9
100.0
101.3
109.3

100.0
102.2
106.8

93.5
96.3
100.0
102.3
106.6

104.5
106.7
100.0
102.1
106.9

109.9
114.1
118.7
131.6
162.9

109.1
111.7
118.5
168.4
200.2

109.9
114.3
118.9
128.1
159.5

110.0
112.8
117.0
127.7
162.2

112.6
119.7
126.2
136.7
161.6

105.0
115.2
118.9
131.5
199.1

111.4
116.6
121.9
129.2
152.2

108.0
111.0
115.6
140.6
154.5

112.3
115.1
127.6
174.0
196.1

112.0
114.2
127.5
180.0
189.4

112.7
117.0
128.0
162.5
208.9

122.6
139.0
148.7
164.5
219.4

109.8
110.7
121.9
161.5
205.4

1975
1976
1977
1978
1979

180.0
189.1
201.5
215.6
243.2

195.3
185.3
190.5
203.1
226.1

178.6
189.4
202.3
216.5
244.4

178.7
185.4
195.4
208.7
234.4

176.4
188.4
203.4
224.7
247.4

233.0
250.1
282.5
295.3
364.8

171.4
180.2
188.3
202.8
226.8

168.1
179.0
188.7
198.5
218.2

196.9
202.7
209.2
234.4
274.3

191.8
190.2
192.1
216.2
247.9

206.9
228.5
245.0
272.3
330.0

271.5
305.3
372.1
426.8
507.6

188.3
206.7
212.2
233.1
284.5

1980
1981
1982
1983 >

280.3
306.0
310.4
312.4

252.6
250.3
239.4
247.8

282.3
310.1
315.7
317.2

265.7
286.1
289.8
293.3

268.3
287.6
293.7
301.7

503.0
595.4
591.7
566.8

254.5
276.1
285.6
286.6

244.5
263.8
272.1
277.0

304.6
329.0
319.5
323.6

259.2
257.4
247.8
252.3

401.0
482.3
473.9
477.2

615.0
751.2
886.1
931.5

346.1
413.7
376.8
372.0

fezz...

311.0
311,1
310.6
309.9
309.8
309.9

238.8
239.4
237.7
240.9
245.0
245.1

316.4
316.4
316.0
315.1
314.6
314.7

290.4
290.9
290.4
290.6
291.4
289.8

292.0
293.0
293.3
294.0
293.7
294.5

604.4
596.8
593.0
579.9
570.9
581.1

282.5
285.5
286.3
287.0
287.0
286.5

269.8
270.4
270.6
272.1
273.4
273.4

318.4
321.6
320.0
322.6
328.3
325.6

242.6
248.3
247.9
254.4
262.6
259.9

481.5
479.3
475.2
469.9
470.2
467.7

812.9
824.5
839.7
851.2
864.8
883.9

399.5
394.8
387.1
378.8
376.6

June
July
Aug
Sept
Ocf
Nov
Dec

311.1
310.8
310.5
309.9
309.9
310.1

243.6
240.2
238.1
234.4
234.4
235.1

316.1
316.0
315.9
315.5
315.5
315.7

289.2
288.7
289.9
289.4
288.7
288.3

294.3
293.5
294.2
293.7
293.6
294.7

600.7
603.8
592.3
590.0
593.0
595.0

286.3
285.4
285.3
285.1
284,9
285.0

273.1
272.6
272.2
272.0
272.8
273.0

323.4
319.8
316.1
312.0
313.2
312.7

255.5
249.6
242.9
236.3
236.3
237.1

469.8
471.0
473.7
474.8
478.6
475.3

901.3
906.9
923.5
917.2
954.7
952.2

369.2
369.5
369.5
371.9
369.2
365.8

June

309.2
309.9
309.5
308.7
309.7
311.3

236.4
238.8
238.0
243.6
244.4
242.8

314.6
315.2
314.8
313.6
314.6
316.4

288.6
291.1
290.2
291.0
291.9
292.4

296.5
298.8
299.6
300.9
301.2
302.4

577.9
565.4
564.2
543.3
547.8
562.0

285.0
285.3
285.2
284.8
285.8
285.9

273.1
273.5
273.9
275.5
275.6
275.6

313.9
320.2
321.6
325.8
325.8
323.3

239.6
249.3
249.1
256.8
256.5
252.1

473.6
473.0
477.7
474.6
475.4
476.8

930.7
937.7
961.8
941.6
935.9
936.7

368.0
366.0
366.8
367.0
369.0
370.5

July
Aug
Sept
Oct
Nov
Dec

312.8
314.0
315.7
316.0
315.7
315.8

244.0
250.9
262.2
258.2
257.1
256.6

318.0
318.7
319.8
320.4
320.1
320.3

294.1
294.7
296.3
296.4
296.1
297.0

302.9
303.7
302.8
303.5
304.0
304.6

567.9
572.0
579.2
579.9
574.0
568.5

286.1
286.3
287.3
288.3
289.3
289.5

276.2
277.9
280.1
280.4
281.0
281.0

320.6
327.1
328.3
324.5
324.1
327.8

248.4
256.4
257.4
253.9
252.0
256.2

476.2
479.6
481.1
476.7
479.5
482.1

927.8
926.9
931.2
911.2
915.2
921.4

371.6
375.6
376.6
375.3
377.7
379.6

1970
1971
1972
1973
1974

z".

1982:
Jan
Feb
Mar

1983: *
Jan
Feb
Mar

dfayiZZ

1
Data have been revised through August 1983 to reflect the availability of late reports and corrections by respondents. All data are
subject to revision 4 months after original publication.
2
Intermediate materials for food manufacturing and feeds.
Source: Department of Labor, Bureau of Labor Statistics.




286

TABLE B-58.—Producer price indexes by stage of processing, special groups, 1974-83
[1967=100]
Finished goods

Intermediate materials, supplies,
and components

Crude materials for further
processing

Excluding foods and
energy
Year or month
Total

Foods

Energy

Total

Capital
equipment

Consumer
goods
exclud-

Total

Foods
and
feeds 1

Energy

Other

Total

Foodstuffs
and
feedstuffs

Energy

Other

and
energy
1974
1975
1976
1977
1978
1979

147.5
163.4
170.6
181.7
195.9
217.7

166.9
181.0
180.4
189.9
207.2
226.2

215.2
252.4
282.3
326.7
347.7
469.9

133.3
148.5
156.8
166.3
178.7
194.7

141.0
162.5
173.4
184.6
199.2
216.5

129.1
141.0
148.1
156.6
168.0
183.3

162.9
180.0
189.1
201.5
215.6
243.2

200.2
195.3
185.3
190.5
203.1
226.1

188.7
220.8
236.8
267.3
280.3
348.6

156.7
174.7
185.0
196.1
210.4
234.2

196.1
196.9
202.7
209.2
234.4
274.3

189.4
191.8
190.2
192.1
216.2
247.9

223.0 198.3
266.9 165.0
283.1 191.0
323.5 190.1
362.5 209.2
439.9 253.0

1980
1981
1982
1983 2

247.0
269.8
280.7
285.2

239.5
253.6
259.3
261.8

701.3
835.4
822.9
784.0

216.4
235.1
248.6
256.1

239.8
264.3
279.4
287.3

204.2
220.1
232.6
239.9

280.3
306.0
310.4
312.4

252.6
250.3
239.4
247.8

484.9
573.6
570.8
545.8

261.8
283.4
290.1
294.7

304.6
329.0
319.5
323.6

259.2
257.4
247.8
252.3

586.1
783.4
801.5
791.2

269.4
266.0
238.1
250.3

June

277.9
277.9
277.3
277.3
277.8
279.9

256.4
258.2
257.1
260.0
262.3
263.4

842.3
832.6
814.0
775.3
758.2
789.8

244.7
244.6
245.2
246.4
247.3
248.1

276.2
275.0
275.8
277.2
278.1
279.2

228.6
229.0
229.5
230.6
231.5
232.1

311.0
311.1
310.6
309.9
309.8
309.9

238.8
239.4
237.7
240.9
245.0
245.1

582.6
575.7
572.2
560.2
552.0
561.4

289.4
290.2
290.2
290.7
291.1
290.1

318.4
321.6
320.0
322.6
328.3
325.6

242.6
248.3
247.9
254.4
262.6
259.9

801.5
796.9
788.8
778.5
784.0
792.0

250.3
249.9
248.5
246.8
243.7
234.3

July
Aug
Sept
Oct
Nov
Dec

281.7
282.3
281.2
284.1
284.9
285.5

260.6
259.7
259.9
257.7
257.4
258.3

834.7
844.3
843.5
839.8
854.0
845.7

248.8
249.5
247.9
252.8
253.2
254.2

280.2
280.7
278.7
283.2
283.8
284.9

232.6
233.3
232.0
236.9
237.3
238.2

311.1
310.8
310.5
309.9
309.9
310.1

243.6
240.2
238.1
234.4
234.4
235.1

579.3
582.2
571.6
569.0
571.2
572.5

289.6
289.2
290.2
290.1
289.9
290.0

323.4
319.8
316.1
312.0
313.2
312.7

255.5
249.6
242.9
236.3
236.3
237.1

799.4
801.7
808.6
815.6
829.9
821.2

232.9
233.3
233.1
230.3
227.0
227.4

283.9
284.1
283.4
283.1
284.2
285.0

258.4
261.0
261.1
262.9
262.6
261.2

811.1
788.0
774.1
749.2
769.0
791.1

253.8
254.5
254.4
254.9
255.3
255.6

285.2
285.6
285.6
286.2
286.5
286.7

237.5
238.5
238.2
238.7
239.2
239.5

309.2
309.9
309.5
308.7
309.7
311.3

236.4
238.8
238.0
243.6
244.4
242.8

556.8
545.3
543.7
524.3
528.0
541.0

290.5
292.4
292.3
293.1
293.7
294.3

313.9
320.2
321.6
325.8
325.8
323.3

239.6
249.3
249.1
256.8
256.5
252.1

812.1
799.9
801.6
793.3
790.9
791.1

230.7
237.8
244.3
244.7
247.5
249.7

285.7
286.1
285.1
287.9
286.8
287.1

260.7
260.7
263.3
264.3
261.8
264.0

794.1
797.6
797.0
789.3
778.5
769.4

256.5
256.9
254.6
258,7
258.6
258.8

287.2
287.7
285.4
290.9
290.3
290.5

240.5
240.9
238.7
242.0
242.2
242.4

312.8
314.0
315.7
316.0
315.7
315.8

244.0
250.9
262.2
258.2
257.1.
256.6

546.4
550.1
556.7
557.4
552.1
547.2

295.4
295.8
296.4
297.0
297.2
298.0

320.6
327.1
328.3
324.5
324.1
327.8

248.4
256.4
257.4
253.9
252.0
256.2

786.3
785.8
788.1
780.0
781.7
783.6

251.9
257.7
258.7
256.9
260.3
263.3

1982:
Jan
Feb
Mar

1983: 2
Jan
Feb
Mar

. SE
Nov
Dec
1

Intermediate materials for food manufacturing and feeds.
Data have been revised through August 1983 to reflect the availability of late reports and corrections by respondents. All data are
subject to revision 4 months after original publication.
Source: Department of Labor, Bureau of Labor Statistics.
2




287

TABLE B-59.—Producer price indexes for major commodity groups, 1947-83
[1967=100]
Industrial commodities

Farm products and processed
foods and feeds
Year or month
Total

Farm
products

Processed
foods and
feeds

Total

Textile
products
and
apparel

Hides,
skins,
leather,
and
related
products

Fuels and
related
products,
and
power*

Chemicals
and allied
products1

1947
1948
1949

94 3
1015
89.6

109 4
117.5
101.6

82 9
88.7
80.6

70 8
76.9
75.3

103.6
108.1
98.9

83 3
84.2
79.9

76.9
90.5
86.2

93.7
95.9
87.6

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

93 9
106 9
102 7
96.0
95 7

834
92.7

78 0
86.1

841

87.4
88 9
85.0
84 9
87.4
89.4

84.8
85 0
86.9
90 8
93.3
93 6
95.3

102.7
114.6
1034
100.8
98 6
98.7
98.7
98.8
97.0
98.4

86 3
99.1

916

93.5

106 7
124.2
117 2
106.2
104 7
98.2
96 9
99.5
103 9
97.5

82.0
82 9
94.2

87.1
90.3
90.1
92.6
91.3
91.2
94.0
99.1
95.3
95.3

88.9
101.7
96 5
97.7
989
98.5
99.1
101.2
102.0
101.6

1960
1961
1962
1963.
1964
1965
1966
1967
1968
1969

93.7
93 7
94.7
93 8
93 2
97.1
103 5
100.0
102 4
108.0

97.2
96 3
98.0
96 0
94.6
98.7
105 9
100.0
102 5
109.1

89.5
91.0
91.9
92 5
92.3
95.5
101.2
100.0
102 2
107.3

95.3
94 8
94.8
94 7
95.2
96.4
98 5
100.0
102 5
106.0

99.5
97.7
98.6
98.5
99.2
99.8
100.1
100.0
103.7
106.0

90.8
91.7
92.7
900
90.3
94.3
103.4
100.0
103 2
108.9

96.1
97.2
96.7
96.3
93.7
95.5
97.8
100.0
98.9
100.9

101.8
100.7
99.1
97,9
98.3
99.0
99.4
100.0
99.8
99.9

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

111.7
113 9
122.4
1591
177.4
184 2
183.1
188.8
206.6
229.8

111.0
112 9
125.0
176 3
187.7
186 7
191.0
192.5
212.5
241.4

112.1
114 5
120.8
1481
170.9
182 6
178.0
186.1
202.6
222.5

110.0
1141
117.9
125 9
153.8
1715
182.4
195.1
209.4
236.5

107.1
109.0
113.6
123.8
139.1
137 9
148.2
154.0
159.8
168.7

110.3
1141
131.3
1431
145.1
148 5
167.8
179.3
200.0
252.4

106.2
115.2
118.6
134.3
208.3
245.1
265.6
302.2
322.5
408.1

102.2
104.1
104.2
110.0
146.8
181.3
187.2
192.8
198.8
222.3

1980
1981
1982..
1983 a

244.7
2515
248.9
253.9

249.4
254 9
242.4
248.2

241.2
248 7
251.5
256.0

274.8
3041
312.3
315.8

183.5
199 7
204.6
204.9

248.9
260 9
262.6
271.4

574.0
694.5
693.2
665.9

260.3
287.6
292.3
292.9

246 0
248.4
247.5
251.6
255.8
255.3

242 2
247.1
244.7
250.6
256.5
252.7

2471
248.1
248.1
251.1
254.4
255.8

3118
311.6
311.0
309.9
309.6
310.6

205.0
205.6
205.0
205.4
205.4
205.0

261.8
261.6
260.6
263.4
263.2
261.8

705.1
697.8
689.7
670.6
662.2
677.3

292.9
293.6
294.6
294.3
295.0
293.3

2524
249.6
247.4
243.8
243 9
244.8

246 6
240.8
234.5
229.2
230 7
232.6

254 6
253.5
253.5
250.8
250.2
250.5

312 8
313.2
312.7
314.3
315 0
315.2

204.1
204.2
204.3
204.1
203.9
202.6

263.1
262.0
263.5
263.2
263 2
264.1

701.1
705.6
700.4
698.8
706.1
703.4

291.6
291.6
290.7
289.9
290.5
289.6

245.8
250.4
250.6
254 7
254.7
252.5
251.5
255 7
255 5
257 9
256.0
257.8

233.2
240.7
241.5
250 5
250.4
247.4

251.7
254.7
254.5
256 0
256.1
254.3
254.4
255 8
255 5
258 3
257.6
258.8

313.9
313.9
313.5
312 4
313.6
315.3
316.5
317 5
317 3
318 7
318.3
318.4

202.7
202.6
203.4
203 5
204.3
204.7

266.7
264.3
264.9
267 4
269.4
271.2

289.3
290.5
289.8
2913
291.1
290.8

205.3
205 7
206 0
206 4
207.0
207.2

272.3
275 5
274 7
274 7
277.3
278.3

683.6
668.6
658.0
644 8
651.9
665.5
668.7
674 3
6717
672 7
667.1
662.1

912

90 6
93 7

981

1982:
Jan
Feb

Mar

Apr
Nfay

June

~zz

July
Aug
Sept

Oct

Nov
Dec
1983: 2
Jan

Feb

Mar
Apr
May
June
July
Aug
Sept
oct
Nov
Dec

:;;

244.3
253 5
253 5
255 2
251.0
254.0

918

See next page for continuation of table.




288

801

81.3
77 6
77.3

819

293.7
294 9
294 4
296 4
296.4
296.6

TABLE B-59.—Producer price indexes for major commodity groups,

1947-83—Continued

[1967 = 100]
Industrial commodities—Continued

Machinery
and
equipment

Furniture
and
household
durables

Nonmetallic
mineral
products

Rubber
and
plastic
products

:...:

Lumber
and
wood
products

70.5
72.8
70,5
85.9
105.4
95.5
89.1
90.4
102 4
103.8
103.4
103.3
102.9
103.1
99.2
96 3
96.8
95 5
95.9
97 8
100.0
1034
105.3
108 3
109.1
109 3
112.4
136 2
150.2
159 2
167.6
174 8
194.3
217 4
232.6
2414
243.4

Year or month

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976...
1977
1978...
1979
1980
1981
1982
1983 2
1982:
Jan
Feb
Mar
Apr
IVfay
June
July
Aug
Sept
oct
Nv
o
Dec
1983: 2
Jan
Feb
Mar
Apr
Mv
a
June
July
Aug
Sept
Oct
Nov
Dec

Metals
and
metal
products

Transportation
equipment:
Motor
vehicles
and
equipment 3

Pulp,
paper,
and
allied
products

73.4
84.0
77.7
89.3
97.2
94.4
94.3
92.6
971
98.5
93.5
92.4
98.8
95.3
91.0
916
93.5
95 4
95.9
100 2
100.0
113 3
125.3
113 6
127.3
144 3
177.2
183 6
176.9
205 6
236.3
276 0
300.4
288 9
292.8
284 7
307.3

72.5
75.7
72.4
74.3
88.0
85.7
85.5
85.5
87 8
93.6
95.4
96.4
97.3
98.1
95.2
963
95.6
954
96.2
98 8
100.0
101.1
104.0
108 2
110.1
113 4
122.1
1517
170.4
1794
186.4
195 6
219.0
249 2
273.8
288 7
297.7

54.9
62.5
63.0
66.3
73.8
73.9
76.3
76.9
82.1
89.2
91.0
90.4
92.3
92.4
91.9
91.2
91.3
93 8
96.4
98.8
100.0
102.6
108.5
116 6
118.7
123 5
132.8
1719
185.6
1959
209.0
2271
259.3
286 4
300.4
3016
307.1

53.7
58.2
61.0
63.1
70.5
70.6
72.2
73.4
75.7
81.8
87.6
89.4
91.3
92.0
91.9
92.0
92.2
92.8
93.9
96.8
100.0
103.2
106.5
111.4
115.5
117.9
121.7
139.4
161.4
171.0
181.7
196.1
213.9
239 8
263.3
278 8
286.4

77.0
81.6
82.9
84.7
918
90.1
919
92.9
93 3
95.8
98.3
99.1
99.3
99.0
98.4
97 7
97.0
97 4
96.9
98 0
100.0
102 8
104.9
107 5
110.0
1114
115.2
127 9
139.7
1456
151.5
160 4
171.3
187 7
198.5
206 9
213.9

66.3
71.6
73.5
75.4
801
80.1
83 3
85.1
87 5
91.3
94.8
95 8
97.0
97.2
97.6
97 6
97.1
97 3
97.5
984
100.0
103.7
107.7
112 9
122.4
1261
130.2
153 2
174.0
186.3
200.5
222 8
248.6
283 0
309.5
320 2
325.3

64.1
70.8
75.7
75.3
79 4
84.0
83 6
83.8
86 3
91.2
95.1
98.1
100.3
98.8
98.6
98 6
97.8
983
98.5
98 6
100.0
102.8
104.8
1087
114.9
1180
119.2
129.2
144.6
153.8
163.7
176.0
190.5
208.8
237.6
2513
256.8

73.5
76.5
78.0
79.2
839
83.4
85 6
86.4
86 5
87.6
90.2
92 0
92.2
93.0
93.3
93 7
94.5
95 2
95.9
97.7
100.0
102.2
105.2
109.9
112.9
114.6
119.7
133.1
147.7
153.7
164.3
184.3
208.7
258.8
265.7
276.4
289.5

237.3
239 3
240.8
241.1
2421
242.5
242 0
242.6
242.5
242.2
2417
242.2

285.5
285 2
285.3
286.5
284 6
289.0
288 6
284.2
283.0
279.4
279 9
285.6

285.5
286 3
287.4
288.5
289.6
289.5
2891
289.3
289.4
289.8
289.8
290.5

304.7
304 2
302.9
303.1
302.8
299.3
299 5
299.2
301.8
301.6
300.5
299.9

274.1
2754
276.2
277.6
278.2
278.6
279.6
279.9
280.2
281.1
281.8
282.4

203.5
204 6
205.5
206.0
206.5
207.0
206 8
208.1
208.3
208.9
208.9
209.2

315.6
319.0
319.9
320.2
321.2
320.9
321.1
320.5
321.2
321.1
321.2
320.5

250.8
246.8
246.8
247.2
249.2
251.1
252.0
252.8
244.6
257.8
257.8
258.1

268.3
273.5
m i
271.5
273.4
272.0
279.5
285.4
285.2
290.4

242.9
242.3
2418
243 0
243 2
243.1
243.4
243 7
244 5
245.1
243.8
244.1

293.3
303.1
305 8
307 2
308 0
314.8
314.6
313 9
306 0
306.1
306.0
308.8

293.6
294.2
294.8
295.4
296 0
297.0
297.8
298.8
2991
300.4
302.0
302.7

300.3
304.7
304.4
304.6
3061
306.3
307.3
308.2
310.9
310.7
310.3
311.4

283.3
284.3
284.7
285.4
286.0
286.2
287.4
287.4
287.5
287.8
288.1
288.8

210.7
212.5
212.3
212.8
213 6
214.0
214.8
214.9
214.9
215.1
215.4
215.3

321.5
322.3
322.0
324.1
324.1
324.5
325.1
326.3
327.2
327.9
328.9
329.2

257.0
256.3
255.4
255.9
256.2
256.5
256.6
256.8
248.9
261.1
260.3
260.4

285.7
288.8
287.4
287.4
287.1
288.0
291.5
292.0
291.3
291.2
291.4
292.5

Miscellaneous
products

mi
mi

1
Prices for some items in this grouping are lagged and refer to 1 month earlier than the index month.
2
Data have been revised through August 1983 to reflect the availability of late reports and corrections by respondents. All data are
subject to revision 4 months after original publication.
3
Index for total transportation equipment is not shown but is available beginning December 1968.

Source: Department of Labor, Bureau of Labor Statistics.




289

TABLE B-60,—Changes in producer price indexes for finished goods, 1950-83
[Percent change]
Finished
consumer
foods

Total
finished
goods

Consumer
goods

Total

Year or month
Dec.
to
Dec 1

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

Year
to
year

Dec.
to
Dec*

Year
to
year

10.4
2.9
-2.2
.5
.1

1.8
9.5
.6
-1.0
.2
.2
2.8
3.6
2.3
— 2

13.3
5.3
-5.9
2.2
-1.9
-2.9
3.6
5.3
.4
-3 7

1.2
4.2
3.2
.5
_4

Year
to
year

Capital
equipment

Year
to
year

Dec
to
Dec.1

Year
to
year

1.9
12.4
-.9
-5.2
.8

8.2
.9
-1.1
1.6
3

1.6
7.2
-1.3
.9
.3

10.3
3.4
.8
2.3
11

-2.5

.8
2.4
2.5
.1
1.3
.4
-.1

3.0
7.4
6.2
2.6
1.9

~0
.1

5.6
8.3
4.3
1.3
1.0
.1
.2
.3
.5
9

1.2
2.5
3.3
3.5
3.3
4.8
4.1
2.5
3.3
14.2
15.2
6.7
6.5
7.9
8.7

16.4
11.5
12.1
8.5
58.0

17.3
11.8
15.7
6.4
35.1

6.1
5.6
6.3
8.3
9.4

10.8
10.2
5.7
2.8

27.8
14.1
-.1
-9.0

49.2
19.1
-1.5
-4.7

10.7
7.8
4.9
1.8

Unadjusted

Seasonally
adjusted

Unadjusted

Year
to
year

2.4
9.7
1.7
1.7
12

Dec.
to
Dec 1

^4

5.2
-1.8
.5
1.3
4

5.8
-4 7
2.2
.4
.9
1.2
5

1.7
2.5
1.7
.2
.8
.4
3
-.1
.1
1

.7
1.6
1.9
2.1
2.4

1.5
3.9
3.1
3.0
4.6
4.9
2.4
2.0
5.3
22.6
8.2
6.4
7.3
7.9
8.8
U.4
9.2
3.9
2.0

.8
0
.3

Dec.
to
Dec 1

Finished goods
excluding
foods and
energy

Dec.
to
Dec.1

Dec.
to
Dec. *

H.5

1960
1961
1962
1963
1964

.1
-.2
5

1965
1966
1967
1968
1969

3.3
2.2
1.6
3.1
4.8

1.7
3.2
1.2
2.8
3.7

9.1
1.4
-.4
4.8
8.2

3.8
6.5
-1.6
3.6
6.2

2.4
3.4

2.6
2.7

.9
1.7
2.1
2.0
2.9

1970
1971
1972
1973
1974

4.3
2.1
2.1
6.6
21.2
7.2
6.2
6.9
8.3
14.8

3.5
3.7
2.0
4.1
16.0
12.1
6.3
7.0
7.3
11.9

3.9
2.0
2.0
7.4
20.5
6.7
6.0
6.7
8.5
17.5

3.0
3.4
1.9
4.5
16.9

5.5
-2.5
6.9
11.7
7.4

3.2
1.6
5.6
20.3
14.0
8.4
-.3
5.3
9.1
9.2

1980
1981
1982
1983 2

11.8
7.1
3.7
.6

3.5
3.1
3.1
9.1
15.3
10.8
4.4
6,5
7.8
11.1
13.5
9.2
4.0
1.6

-2.5
5.9
8.0
22.5
13.0

1975
1976
1977
1978
1979

2.2
3.2
3.8
11.8
18.3
6.6
3.7
6.9
9.2
12.8

7.5
1.4
2.1
2.2

5.9
5.9
2.2
1.0

13.3
8.8
4.1
.0

16.2
10.3
4.6
1.8

14.2
8.5
4.2
-.8

18.6
10.2
4.1
1.2

Unadjusted

Seasonally
adjusted

1.8

Finished
energy
goods

Finished goods excluding consumer foods

10.5
6.2
7.2
7.1
13.3

Year
to
year

.2
.1
.4
.2
10

11.4
5.6
6.1
7.5
9.0
11.1
8.6
5.7
3.0

Percent change from preceding month

Unadjusted

1982:
Jan
Feb
Mar

z-

June
July
Aus.
Sept
Oct
Nov
Dec
1983: *
Jan
Feb
Mar

zJune
July
Aug
Sept
Oct...
Nov
Dec

0.9
0
-.2
0
.2
.8
.6
.2
-.4
1.0
.3
.2
-.6
.1
-.2
.1
.4
.3

Seasonally
adjusted

0.4
-.3
0*
1.0
.5
.5
'.$
.3
-1.1
.2
0
.2
.5
.1
.4
.2

.2
.3
1.0
-.4
.1

-2
2

1.4
.7
-.4
1.1
.9
.4
-1.1
-.3
1
.8
-.1
.3
.0
1.0
.0
.7
-.1
-.5
~'.Q
1.0.
.4
-.9
.8

1.1
.6

I'.S

.3

-1.6
^
4
.0
0
.2

Unadjusted

Unadjusted

Season-

a

Unadjusted

Seasonally
adjusted

0.7
-.1
-.3
-.6

0.1
-.1
-.6
-..5

0.8
-.4
.3

0.5
-.1
.5

1.1
1.4
.5
4
1.5
.5
.1

~L4
1.4
.6
4
.7
.9
.3

.3
.4
.4
.2
7
1.6
.2

l5

-1.2
-.4
-.5
.6
.7
.8

-2.0
-.3

justed
0.7

0.2
i

-.2

-!o
.9
1.2
-6
1.6
.4
.2
-.8

1.0
-'.3
LI

-!3
-.3
-.1
1.2
1.1
.6
2
.5
.8
.3
1.4
.1
-.4
-.3

~'.S
-.7
.4
.7
1.1
-1.0

Seasonally
adjusted

.3
.2
-.8
1.2
-'.I

'.B
.3
.4
.0
.0
.1
,1

1

.4
.2
7
.9
-.3
-.2

.1
.1
0

~'.S
1.1
.4
.3

-!o

.1
.0

.1
.1
.2
.2
-.8
1.9
-.2
.1

.6
.4
.6
1
.0
.4
.5
~A
.3
— 1
.2
.3
.2
.6
.2
.3
0
.2

-0.6
-1.8
-3.7
-4.0
2.6
4.4

1.0
-.0

.3

-1.0

5.5
1.0
4
.4
2.0
-.8

-4.1
-2.8
-1.8
-3.2
2.6
2.9

-4.2
-3.4
3.1
2.5
2.2
3.1

-0.5
-1.2
-2.2
=4.8
-2.2
4.2
5.7
1.2

7.7

.4
.2
.3
.4
-.1
'l
-1.0
-L0
-1.4
-1.2 - - 1 . 0

Seasonally
adjusted

*6
2.0

0.3
.2
.4
.4
.4
.6
.3
.5
2
.5

A

i

.5
A
.3

-.2
.3
-.0
.2
.2
.1
.4
-.9
1.6
-.0

-.9
.6

!o

.2
.4
.4
.4
-.0
.1
.3

Changes from December to December are based on unadjusted indexes.
2
Data have been revised through August 1983 to reflect the availability of late reports and corrections by respondents. All data are
subject to revision 4 months after original publication.
Source: Department of Labor, Bureau of Labor Statistics.




290

MONEY STOCK, CREDIT, A N D FINANCE
TABLE B-61.—Money stock measures and liquid assets, 1959-83
[Averages of daily figures; billions of dollars, seasonally adjusted]

Ml

M
2

M
3

L

M1 nine
Ml piUS

Year and month

December:
1959....
I960....
1961....
1962....
1963....
1964....
1965....
1966....
1967....
1968....
1969....
1970....
1971....
1972....
1973....
1974....
1975....
1976....
1977....
1978....
1979....
1980....
1981....
1982....
1983"..

Sum of
currency,
demand
deposits,
travelers'
checks, and
other
checkable
deposits
(OCDs) 1

overnight RPs

and

Eurodollars,
MMMF
balances
(general
purpose and
broker/
dealer),
MMDAs, and
savings and
small time
deposits 2

M2 plus large
time deposits.
term RPs, and M3 plus other
institution-only
liquid assets

July
Aug
Sept....
Oct

Nov
Dec

Ml

M
2

M
3

balances 3

141.0
141.8
146.5
149.2
154.7
161.8
169.5
173.7
185.1
199.4
205.8
216.5
230.7
251.9
265.8
277.5
291.1
310.4
335.5
363.2
389.0
414.1
440.6
478.2
521.1

297.8
312.3
335.5
362.7
393.2
424.7
459.1
480.2
524.8
566.9
590.2
627.9
712.7
805.3
861.2
908.6
1,023.0
1,163.5
1,286.4
1,388.5
1,497.5
1,630.3
1,794.9
1,959.5
2,184.6

299.0
314.3
339.4
369.7
404.0
439.9
480.3
503.2
555.7
604.3
613.2
674.5
773.0
882.0
979.2
1,061.4
1,161.7
1,296.3
1,451.8
1,613.5
1,758.4
1,936.7
2,167.9
2,377.6
2,599.8

388.5
403.4
430.5
465.8
503.5
540.1
584.1
614.9
667.2
729.9
764.4
815.8
902.5
1,022.8
1,141.6
1,246.8
1,371.9
1,522.4
1,711.0
1,922.9
2,131.8
2,343.6
2,622.0
2,896.7

447.8
448.0
448.6
449.3
452.4
453.4
454.4
458.3
463.2
468.7
474.0
478.2

1,810.1
1,815.8
1,828.9
1,835.2
1,850.6
1,864.5
1,880.9
1,903.6
1,917.0
1,929.7
1,945.0
1,959.5

2,181.8
2,191.6
2,210.9
2,224.1
2,240.7
2,260.2
2,283.4
2,317.9
2,333.9
2,352.0
2,370.2
2,377.6

2,644.4
2,668.1
2,692.7
2,710.3
2,737.6
2,767.0
2,798.2
2,823.6
2,840.5
2,866.0
2,882.5
2,896.7

482.1
491.1
497.6
496.5
507.4
511.7
515.5
516.7
517.1
517.9
518 3
521.1

2,010.0
2,050.8
2,069.9
2,074.8
2,096.2
2,114.4
2,126.3
2,136.9
2,145.4
2,161.6
2,174.6
2,184.6

2,403.3
2,430.7
2,447.1
2,453.9
2,476.2
2,498.8
2,510.3
2,528.3
2,543.8
2,561.3
2,586.0
2,599.8

2,930.6
2,960.2
2,987.5
3,005.8
3,031.3
3,058.6
3,087.8
3,115.6
3,136.9
3,153.4

1982:
Jan
Feb
Mar
Apr
May
June

Percent change from year or 6
months earlier4

0.6
3.3
1.8
3.7
4.6
4.8
2.5
6.6
7.7
3.2
5.2
6.6
9.2
5.5
4.4
4.9
6.6
8.1
8.3
7.1
6.5
6.4
8.5
9.0

4.9
7.4
8.1
8.4
8.0
8.1
4.6
9.3
8.0
4.1
6.4
13.5
13.0

6.9
5.5
12.6
13.7
10.6

7.9
7.9
8.9
10.1

5.1
8.0
8.9
9.3
8.9
9.2
4.8
10.4

8.7
1.5
10.0
14.6
14.1
11.0

8.4
9.4
11.6
12.C
11.1

9.C
10.1
11.9

11.5

9.2

9.7
9.3

7.4
6.6
7.1

10.7

11.2

8.7
9.0

9.3
9.4

7.7
5.9

8.0
7.9

3.0
4.7

8.0
9.9

8.6
8.7
9.5

7.5

6.6
8.8
9.8

11.2

8.3

9.9

10.6
10.5
10.5

9.2

11.9
11.4
11.8
ll.S

10.7

1983:
Jan
Feb
Mar
Apr
May
June....
July

Aug
Sept....
Oct

Nov
Dec...
1

12.6
14.8
15.4
12.2
14.6
14.5
14.3
10.7

14.2
16.1
16.6
15.6
16.2
16.4
11.9

8.0
8.8
4.3
3.7

7.4
8.5
7.6

8.6
6.8

10.S
10.C

9.9
8.9
9.1

10.5

9.1
8.2
8.1
8.S
9.1
8./

Net of demand deposits due to foreign commercial banks and official institutions.
2
M2 will differ from the sum of components shown in Table B-62 by a consolidation adjustment that represents the estimated
amount of demand deposits and vault cash held by thrift institutions to service time and savings deposits.
3
M3 will differ from the sum of components shown in Table B-62 by a consolidation adjustment that represents the estimated
amount of overnight RPs held by institution-only money market mutual funds.
4

Monthly percent changes are from 6 months earlier at a compound annual rate.

Note.—See Table B-62 for components, except travelers checks not shown separately.
Source: Board of Governors of the Federal Reserve System.




291

TABLE B-62.—Components of money stock measures and liquid assets, 1959-83
[Averages of daily figures; billions of dollars, seasonally adjusted, except as noted]
Money market
mutual fund
(MMMF)
balances

Overnight

Pferiod

Currency

Demand
deposits i

Other
checkable
deposits
(OCDs)

chase

Ss

(RPs)
net, plus
overnight
Eurodollars
NA
S

General
pur-

B

Institution
only

broker/
dealer
NA
S

NA
S

Money
market Savdeposit ings
accounts
(MMOAs)

Small
denomination ination
time
time
dedeposits* posits 2

iSr

Term
repurchase

Term
Eurodollars
(net)

ments
(RPs)

bonds

Shortterm BankTreas- ers'
ury
secu- ances
rities

Commercial
paper

NA
S

NA
S

NA
S

Sav-

December;
1959....

29.0

111.6

0.0

0.0

0.0

0.0

0.0

146.4

11.4

1.2

0.0

0.7

46.1

38.6

0.5

3.6

I960....
1961....
1962....
1963....
1964....

28.9
29.5
30.6
32.5
34.3

112.5
116.5
118.1
121.7
127.0

.0
.0
.0
.1
.1

.0
.0
.0
.0
.0

.0
.0
.0
.0
.0

.0
.0
.0
.0
.0

.0
.0
.0
.0
.0

159.1
175.5
194.8
214.4
235.2

12.5
14.8
20.1
25.5
29.2

2.0
3.9
6.9
10.7
15.2

.0
.0
.0
.0
.0

.8
1.4
1.6
1.9
2.4

45.7
46.5
46.9
48.1
49.0

36.7
37.0
39.8
40.7
38.5

.8
1.0
1.0
1.1
1.2

5.1
5.2
6.8
7.7
9.1

1965....
1966....
1967....
1968....
1969....

36.3
38.3
40.4
43.4
46.1

132.5
134.6
143.9
155.1
158.8

.1
.1
.1
.1
.1

.0
.0
.0
.0
2.2

.0
.0
.0
.0
.0

.0
.0
.0
.0
.0

.0
.0
.0
.0
.0

256.9
253.1
263.7
268.9
263.7

34.4
55.0
77.8
100.5
120.4

21.2
23.1
30.9
37.5
20.4

.0
.0
.0
.0
2.6

1.7
2.1
2.1
2.9
2.7

49.6
50.2
51.2
51.8
51.7

40.7
43.2
38.7
46.1
59.5

1.5
1.6
1.7
2.2
3,2

10.2
14.4
17.8
22.5
34.0

1970....
1971....
1972....
1973....
1974....

49.1
52.6
56.8
61.5
67.9

166.3
176.8
193.6
202.5
207.4

.1
.2
.2
.3
.4

1.3
2.3
2.8
5.3
5.6

.0
.0
.0
.1
1.7

.0
.0
,0
.0
.2

.0
.0
.0
.0
.0

259.9
291.6
321.2
327.0
338.8

152.2
190.5
232.1
266.0
288.0

45.0
57.6
73.2
111.2
144.5

1.6
2.7
3.5
6.9
8.1

2.2
2.7
3.6
5.4
8.0

52.0
54.3
57.6
60.4
63.2

49.2
36.3
41.1
50.0
53.5

3.3
3.5
3.3
4.7
10.6

34.5
32.7
35.2
41.9
50.1

1975....
1976....
1977....
1978....
1979....

73.9
80.6
88,6
97.5
106.3

214.1
224.4
239.7
253.8
262.0

.9
2.7
4.2
8.4

2.7
2.4
2.4
6.4

.0
.0
.0
.0
.0

388.8
453.0
491.6
481.2
423.1

338.1
391.0
446.0
521.8
635.9

129.9
118.2
145.2
194.9
222.2

9.7

33.4

.4
.6
.9
3.1
9.5

8.4

17.0

5.8
10.6
14.7
20.3
21.2

14.2
19.5
27.1
30.1

13.1
18.4
29.0
41.5

67.2
71.7
76.4
80.2
79.5

76.8
80.8
89.7
99.3
128.7

11.8
21.6
26.7

48.0
51.7
62.9
79.2
97.0

1980....
1981....
1982....
1983 p..

116.2
123.2
132.8
146.0

266.8
236.4
239.8
243.1

26.9
76,6
101.3
127.1

28.4
36.1
44.3
56.1

61.4
150.9
182.2
138.0

14.9
36.0
47.6
40.2

.0
,0
43.2
372.4

400.7
344.4
359.3
312.3

731.7
828.6
859.1
792.1

258.9
302.6
333.8
329.2

34.8
37.2
40.3
49.3

48.0
65.3
80.0

72.3
67.7
67.9

156.9
176.3
217.6

31.6
40.6
44.9

98.1
104.2
108.8

June

124.0
124.7
125.2
126.3
127.4
128.2

fez

238.9
235.5
233.8
233.3
233.1
232.3

80.4
83.4
85.1
85.3
87.4
88.4

39.7
38.0
39.1
36.8
40.1
40.3

154.7
156.0
159.7
161.8
164.9
170.1

35.3
33.6
34.8
34.3
35.6
36.6

.0
.0
.0
.0
.0
.0

347.7
346.9
346.6
345.9
346.6
347.2

826.6
833.1
840.7
847.2
852.5
859.3

304.4
309.9
315.8
321.2
322.1
327.4

35.6
35.7
35.6
38.1
37.0
36.3

68.3
72.8
74.0
77.9
83.8
84.7

67.8
67.8
67.7
67.7
67.7
67.7

179.9
186.9
190.0
190.7
192.1
197,2

41.1
40.6
39.9
40.2
41.3
41.6

105.5
108.4
110.3
109.7
112.1
115.7

July
Aug
Sept
Oct
Nov
Dec

128.8
129.6
130.5
131.3
131.9
132.8

232.1
232.5
234.0
236.0
237.6
239.8

89.1
91.8
94.3
97.0
100.1
101.3

41.8
42.4
41.5
43.9
45.2
44.3

172.9
182.3
185.1
187.6
191.1
182.2

40.4
47.1
48.2
49.3
49.9
47.6

.0
.0
.0
.0
.0

43.2

345.0
346.7
350.0
358.0
366.4
359.3

872.9
879.8
883.2
878.0
874.9
859.1

332.1
334.9
336.1
339.6
340.4
333.8

34.5
37.0
36.4
37.7
39.4
40.3

83.7
80.9
80.6
81.1
79.6
80.0

67.6
67.5
67.5
67.6
67.8
67.9

202.9
204.1
203.6
210.3
214.5
217.6

42.0
41.3
41.4
42.8
43.1
44.9

118.7
112.0
113.7
112.3
J07.3
108.8

134.2
135.6
137.0
138.0
139.3
140.3

239.4
238.7
240.1
238.9
242.5
244.0

104.5
112.5
116.0
115.0
120.9
122.7

47.3

48.9
48.8
50.6
55.1
56.0

166.7
159.6
154.0
146.7
141.1
139.7

46.1
45.2
43.5
41.0
40.4
39.2

189.1
277.7
320.5
341.2
356.8
367.3

335.1
325.7
322.7
321.5
323.1
325.0

797.4
755.1
733.8
725.7
720.1
722.1

310.7
297.9
296.2
300.2
299.2
304.1

40.6
40.8
41.7
42.7
45.3
44.5

81.1
83.5
85.9
88.4
89.9
89.8

68.1
68.5
68.8
69.2
69.6
69.8

219.3
219.3
224.5
230.5
231.4
237.2

45.3
43.2
42.0
41.2
40.8
40.2

113.5
115.1
119.2
122.5
123.4
122.9

140.9
141.8
143.0
144.2
Nov
145.3
Dec ^..... 146.0

245.8
244.5
243.4
242.9
241.6
243.1

124.2
125.8
126.0
126.0
126.5
127.1

52.7
52.1
53.0
56.5
55.2
56.1

138.8
139.1
137.6
137.8
138.7
138.0

38.6
38.4
39.1
39.9
40 6
40.2

368.4
366.3
366.9
367.4
3691
372.4

323.5
322.1
320.6
318.8
316 4
312.3

735.1
748.0
757.7
771.0
784 4
792.1

305.6
311.6
317.7
319.9
324 9
329.2

42.8
44.8
45.1
43.7
48 7
49.3

89.6
89.8
89.5
90.4

70.0
70.2
70.4
70.6

252.1
262.9
264.5
262.1

41.4
43.5
43.3
42.3

124,4
121.0
125.3
126.6

1982:
Jan
Feb
Mar

1983:
Jan
Feb
Mar

rfay"I

June
July

B:

8.4
8.8

'Demand deposits at all commercial banks other than those due to domestic banks, the U.S. Government, and foreign banks and
official institutions less cash items in the process of collection and Federal Reserve float.
2
Small denomination and large denomination deposits are those issued in amounts of less than $100,000 and more than $100,000,
respectively.
Note.—NSA indicates data are not seasonally adjusted.
Travelers checks are a component of money stock but are not shown here.
See also Table B-61.
Source: Board of Governors of the Federal Reserve System,




292

TABLE B-63.—Commercial bank loans and investments, 1939-83
[Billions of dollars]
Total loans
and
investments

Year and month

End of month l
1939- Dec
1940: Dec
1941- Dec
1942: Dec
1943: Dec
1944: Dec
1945- Dec
1946: Dec
1947- Dec
1948: Dec

L

Investments

Loans
Commercial
and
industrial

Total

U.S.
Treasury
securities

Other
securities

Loans plus
loans sold
to bank
affiliates

16.3
17.8
218
41.4
598
77.6
90.6
74 8
69.2
62.6

7.1
7.4
72
6.8
61
6.3
7.3
81
9.0
9.2

39.4
421
43.9
47.6
52.1
58.4
69 5
78.6
86 2
95.9
105.7
110.0
116 2
130.4

62 3
66.4
611
604
62.2
62 2
67.6
60.3
57 2
56.9
651
57.7
59 9
65.3
64.7
61.5
60.7
571
53.5
594
60.7
51.2
57.8
60 6
62.6

9.2
10.3
12 4
134
14.2
14 7
16.4
16.8
16.3
17.9
20.5
20.5
20.8
23.9
29.2
35.0
38.7
44.8
48.7
61.3
71.3
71.1
85.7
104.2
116.5

283.3
294.7
323.7
381.5

390.5
460.5
520.1
517.4
555.0
632.5
747.0
849.9
915.1
973.9
1,042.0
1,131.7

137.5
165.4
196.9
189.6
190.9
210.9
245.9
291.2
326.8
358.0
392.3
413.1

65.8
58.5
53.6
82.2
100.8
99.8
93.8
94.5
110.0
111.0
130.9
188.1

116.3
128.8
139.9
145.6
148.8
159.3
172.8
191.5
214.4
231.4
239.2
247.0

393.1
464.8
524.8
521.8
558.7
637.1
750.7
852.9
917.8
976.7
1,044.9
1,134.1

1045 0
1,048.7
1,056.3
1,059.5
1,063.3
1,070.6
1,080.9
1,091.0
1,096.3
1,104.1
1,115.7
1,131.7

395.2
394.9
396.2
392.9
392.9
395.0
399.2
402.5
402.6
404.7
407.8
413.1

139 8
144.5
151.0
157.8
166.1
171.2
172.9
174.4
176.9
182.3
186.2
188.1

243.3
243.1
242.8
243.4
245.0
246.2
246.1
247.8
247.1
246.5
247.1
247.0

1,048.0
1,051.6
1,059.3
1,062.4
1,066.1
1,073.3
1,083.5
1,093.5
1,098.9
1,106.7
1,118.2
1,134.1

40.7
43.9
50 7
67.4
851
105.5
124.0
114 0
116.3
114.3

17.2
18.8
217
19.2
191
21.6
26.1
311
38.1
42.5

113 0
118.7
124 7
1302
139.1
1431
153.1
157.6
1616
166.4
1812
188.7
197 4
212.8
2312
250.2
272 3
3001
3161
352 0
390.2
401.7
435.5
485 7
558.0

41.5
42.0
511
56.5
62.8
662
69.1
80.6
881
91.5
95 6
110.5
1167
123.6
137 3
153.7
172 9
198 2
213.9
2313
258.2
279.4
292.0
320 9
378.9

572.6
647.8
713.6
745.2
804.6
891.5
1,013.5
1,135.9
1,239.6
1,316.3
1,412.0
1,566.8
1428 2
1,436.3
1,450.1
1,460.6
1474 4
1,488.0
1,499.9
1,513.2
1,520.3
1,532.9
1,548.9
1,566.8

Seasonally adjusteti
1948: Dec
1949- Dec
1950: Dec
1951: Dec
1952: Dec
1953: Dec
1954- Dec
1955: Dec
1956: Dec
1957- Dec
1958: Dec
1959- Dec
I960: Dec
1961- Dec
1962: Dec
1963- Dec
1964: Dec
1965- Dec
1966: Dec
1967: Dec
1968- Dec
1969: Dec . .
1970: Dec
1971: Dec
1972- Dec
Average for month2
1972: Dec
1973- Dec .
1974: Dec
1975: Dec
1976- Dec
1977- Dec
1978: Dec
1979: Dec
1980- Dec
1981- Dec
1982- Dec p
1983- Dec
1983:
Jan
Feb
Mr
a
Ar
p
May
June
July .
Aug
Sept
Oct
Nov
Dec P .
1
2

Data are for December 31 call dates.
Data are prorated averages of Wednesday figures for domestically chartered banks and averages of current and previous month-end
data for foreign-related institutions. Lease financing receivables are included in total loans and investments and in total loans.
Note.—Beginning December 1981, levels have been reduced because of shifts from U.S. banking offices to International Banking
Facilities (IBFs).
Source: Board of Governors of the Federal Reserve System.




293

TABLE B-64.—Total funds raised in credit markets by nonfinancial sectors, 1975-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Item

1975

1976

1977

1978

1979

1980

1981

Net credit market borrowing by nonfinancial sectors
Total net borrowing by domestic nonfinancial sectors..
U.S. Government
Treasury issues
Agency issues and mortgages..
Private domestic nonfinancial sectors...
Debt capital instruments
Tax-exempt obligations..
Corporate bonds
Mortgages
Home mortgages
Multi-family residential..
Commercial
Farm
Other debt instrumentsConsumer credit..
Bank loans n.e.c.
Open-market paper

By borrowing sector: Total..
State and local governments..
Households
Nonfinancial business
Farm
Nonfarm noncorporate..
Corporate
Foreign net borrowing in United States..
Bonds
Bank loans n.e.c...
Open-market paper
U.S. Government loans..
Total domestic plus foreign..

193.0

243.5

369.8

386.0

343.2

85.4

69.0

319.4
56.8

53.7

37.4

79.2

87.4

85.8

69.1

57.6
-.9

55.1
-1.4

38.8
-1.4

79.8
-.6

87.8
-.5

107.6

174.5

262.6

316.2

348.6

264.0

289.8

100.9

123.6

171.1

199.7

211.2

192.0

158.4

16.1
27.2
57.6

15.7
22.8
85.1

21.9
22.9
126.3

28.4
21.1
150.2

30.3
17.3
163.6

30.3
26.7
135.1

21.9
22.1
114.5

42.0

A3

63.9
3.9
11.6
5.7

94.0
7.1
18.1
7.1

112.2
9.2
21.7
7.2

120.0
7.8
23.9
11.8

96.7
8.8
20.2
9.3

4.6

50.9

91.6

116.5

137.5

72.0

131.5

6.7

25.4
4.5
4.0
16.9

40.2
27.1
2.9
21.3

45.4
51.2
11.1
29.7

4.9
36.7
5.7
24.8

24.1
54.7
19.2
33.4

377.2

75.9
4.3
24.6
9.7

9.6
-10.4
=2.6
10.1
107.6

174.5

262.6

316.2

348.6

264.0

289.8

13.7
52.1
41.8

15.2
89.5
69.8

15.4
137.3
110.0

19.1
169.4
127.6

20.5
176.4
151.7

20.3
117.5
126.1

9.7
120.6
159.6

8.5
12.5
20.9

10.2
15.4
44.2

12.3
28.0
69.7

14.6
32.4
80.6

21.4
34.4
96.0

14.4
33.7
78.1

16.3
39.6
103.7

11.3

19.3

13.5

6.2
2.0

2.S
204.4

37.4
5.2
25.1

33.8

20.2

27.2

27.2

8.6
5.6
1.9
3.3

5.1
3.1
2.4
3.0

4.2
19.1
6.6
3.9

3.9
2.3
11.2
2.9

11.5
10.1
4.7

5.4
3.7
13.9
4.2

262.8

332.9

403.6

406.2

370.4

404.4

Direct and indirect supply of funds to credit markets
Total funds supplied to domestic nonfinancial sectors..
Private domestic nonfinancial sectors
Deposits and currency..
Checkable deposits and currency..
Time and savings deposits
Money market fund shares
Security repurchase agreements...
Foreign deposits
Credit market instrumentsForeign funds
At banks
Credit market instuments
U.S. Government and related loans, net...
U.S. Government cash balances
Private insurance and pension reserves...
Other sources

193.0

243.5

319.4

369.8

386.0

343.2

377.2

152.0

178.1

189.1

225.8

270.3

254.4

308.9

101.2

133.4

148.6

152.2

151.4

180.0

221.7

15.6
83.3
1.3
'$

17.8
111.7

25.5
119.3

25.5
110.3
6.9
7.5
2.0

15.3
127.8
29.2
6.5
1.1

27.6
83.6
107.5
2.5
.5

50.7

44.7

40.6

73.6

118.9

74.4

87.2

-2.5

10.6

41.0

44.6

23.0

-8.6
6.1

-4.5
15.2

1.4
39.6

6.5
38.0

27.6
-4.6

11.9
-1.7
29.7
3.7

3*3
19.5

4.1
4.3
51.4
29.4

-6.6
6.8
62.2
37.1

See next page for continuation of table.




294

1.7

1.1

11
1.3

26.7
82.2
34.4
6.6
1.5

11.6
.4
49.1
31.6

1.5
-21.7
23.2

7.3
-8.7
16.0

1.8
6.8
-2.6
-1.1
65.4
73.2
22.6 -17.9

TABLE B-64.—Total funds raised in credit markets by nonfinancial sectors, 1975-83—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates}
1982

1983

Item
Net credit market borrowing by nonfinancial sectors
Total net borrowing by domestic nonfinancial sectors

331.8

Agency issues and mortgages

,

413.9

576.5

224.4

196.3

264.1

157.2

118.5
-.2

206.8
-.3

224.9

196.2
.1

264.4

157.4
-.2

236.1

-.5

-2.5

Private domestic nonfinancial sectors

236.2

-.3

491.6

334.4

217.6
312.4

202.5

228.7

184.3

140.6

60.5
.3
19.8
4.4

97.6
5.7
24.9
-1.0

115.9
9.9
29.4
1.5

133.0
8.0
42.7
5.7

123.0

89.2

17.2

33.3

49.2

105.8

35.9
68.5
3.6
15.1

11.1
55.7
-2.8
25.2

23.6

28.1
8.5

49.5

49.1
15.6
14.9
26.2

263.6

236.1

202.5

217.6

312.4

334.4

40.5
100.0
123.0

30.4
78.4
127.3

56.2
93.7
52.7

29.8
117.4
70.4

72.8
162.1
77.4

25.5
168.8
140.0

10.5
37.8
74.8

10.8
26.5
90.0

7.3
23.3
22.0

-2.9
35.3

.8
44.8
31.9

7.9
68.9
63.3

11.6

„

56.6
-3.7
17.3
4.5

7.6
31.5
103.9

Farm
Nonfarm noncorporate
Corporate

189.6

48.2
2.8
23.5
4.5

18.1
75.1
142.9

State and local governments
Households
Nonfinancial business

156.7

13.4

By borrowing sector: Total

38.6
18.5
127.2

236.2

Consumer credit
Bank loans n.e.c
Open-market paper
Other

185.3
71.3
29.1
84.9

2.6
71.7
9.5

,

47.4
24.8
74.8

63.4
5.6
19.3
7.3

,

51.7
10.0
78.9

97.3

Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multi-family residential
Commercial
Farm
Other debt instruments

146.9

138.9
31J
11.5
95.7

Debt capital instruments

Foreign net borrowing in United States

427.0

206.5

98.1

,

442.7

118.3

263.6

Treasury issues

381.8

95.6

U.S. Government

13.9

11.9

25.3

21.5

7.7

1.7
12.8
.2 - 1 1 . 2
8.5
.5
9.8
3.5

8.8

5.5
5.3
7.6
3.1

1.6
-8.0
10.4
3.7

598.1

499.4

Bonds
Bank loans n.e.c
Open-market paper
U.S. Government loans

3.1
-10.4
16.4
2.5

Total domestic plus foreign

343.4

395.8

454.5

263.2

83.1
23.3

-.9
21.8
-23.3 - 1 8 . 5 -14.1
15.2
14.7
-4.9

38.0
15.9

-3.1
17.4
2.2

3.2
24.6
-16.8

452.3

429.7

4.8

32.8
6.3

Direct and indirect supply of funds to credit markets
Total funds supplied to domestic nonfinancial sectors

331.8

Checkable deposits and currency
Time and savings deposits
Money market fund shares
Security repurchase ageements
Foreign deposits

427.0

413.9

576.5

491.6

300.9

328.1

329.0

346.9

332.7

147.3

212.0

172.3

289.1

174.6

253.0

78.7
21.2
41.6
105.3 188.7 282.2
88.1 -68.1 -105.2
1.3
21.7
11.9
-4.0
11.7
-1.9
3.5
89.0
39.9
155.8
125.0
-46.6
4.1 - 1 2 . 0
9J
9.1 -43.8
-38.9 - 5 9 . 9
13.2 - 5 . 0
48.6
31.8

61.0
172.9
-62.7
.4

14.0
223.7
-6.5
18.8
3.0

8.7
43.3

20.4
5.0

14.0 - 1 6 . 3
4.1 - 1 0 . 4
88.0
86.1
35.5
-9.3

23.1
25.1
90.6
38.8

52.1
-10.9
93.1
-.6

28.2
125.5
38.2
.3
-7.1

Credit market instruments

32.5

Foreign funds

-7.7

At banks
Credit market instruments -,
U.S. Government and related loans, net
U.S. Government cash balances
Private insurance and pension reserves
Other sources

-21.3
13.7

-5.7
107.1
40.5
1.9

1.3
4.1
12.1 - 1 6 . 3
79.8
91.0
28.6
21.1

Source: Board of Governors of the Federal Reserve System.




442.7

272.2

185.1

Deposits and currency

381.8

217.6

Private domestic nonfinancial sectors

295

25.4
24.1
86.8
52.1

3.0

79.7
172.3

25.3
52.0

TABLE B-65.—Federal Reserve Bank credit and reserves of depository institutions, 1929-83

[Averages of daily figures; millions of dollars]
Reserve Bank credit outstanding
Year and month

Total

Borrowings of
depository
institutions

U.S.
Government
and Federal
securities

Total

Reserves of depository
institutions1
Other

1929: Dec
1933: Dec
1939: Dec
1940: Dec
1941: Dec
1942: Dec
1943: Dec
1944: Dec
1945: Dec
1946: Dec
1947: Dec
1948: Dec
1949: Dec
1950: Dec
1951: Dec
1952: Dec
1953: Dec
1954: Dec
1955: Dec
1956: Dec
1957: Dec
1958: Dec
1959: Dec
I960: Dec
1961: Dec
1962: Dec
1963: Dec
1964: Dec
1965: Dec
1966: Dec
1967: Dec
1968-. Dec
1969: Dec
1970: Dec
1971: Dec
1972: Dec
1973: Dec
1974: Dec
1975: Dec
1976: Dec
1977: Dec
1978: Dec
1979: Dec
1980: Dec
1981: Dec
1982: Dec
1983: Dec
1983:

1,643
2,669
2,612
2,305
2,404
6t035
11,914
19,612
24,744
24,746
22,858
23,978
19,012
21,606
25,446
27,299
27,107
26,317
26,853
27,156
26,186
28,412
29,435
29,060
31,217
33,218
36,610
39,873
43,853
46,864
51,268
56,610
64,100
66,708
74,255
76,851
85,642
93,967
99,651
107,632
116,382
129,330
139,896
143,250
151,920
159,659
171,531

446
2,432
2,510
2,188
2,219
5,549
11,166
18,693
23,708
23,767
21,905
23,002
18,287
20,345
23,409
24,400
25,639
24,917
24,602
24,765
23,982
26,312
27,036
27,248
29,098
30,546
33,729
37,126
40,885
43,760
48,891
52,529
57,500
61,688
69,158
71,094
79,701
86,679
92,108
100,328
107,948
117,344
126,276
127,895
137,796
146,358
160,352

4
90
265
334
157
224
134
118
142
657
1,593
441
246
839
688
710
557
906
87
149
304
327
243
454
557
238
765
1,086
321
107
1,049
1,298
703
127
62
558
874
1,473
1,617
642
697
748

41
32
13
12
54
134
82
116
53
33
96

396
142
99
114
180
482
658
654
702
822
729
842
607
1,119
1,380
1,306
1,027
1,154
1,412
1,703
1,494
1,543
1,493
1,725
1,970
2,368
2,554
2,504
2,514
2,547
2,139
3,316
5,514
4,699
4,990
4,708
4,643
6,585
7,416
7,242
7,876
11,112
12,147
13,738
13,482
12,604
10,431

Jan
Feb
Mar

157,519
155,365
155,883
159,250
160,130
162,133
164,799
163,698
168,182
169,202
167,773
171,531

144,305
143,324
144,130
146,808
148,397
150,406
152,921
153,670
157,545
158,236
156,767
160,352

500
557
852
993
902
1,714
1,382
1,573
1,441
837
912
748

33
39
53
82
98
121
172
198
191
142
119
96

12,714
11,484
10,901
11,449
10,831
10,013
10,496
8,455
9,196
10,129
10,094
10,431

fez
June
July
Aug
Sept
Oct
Nov p
Dec .

Total

Required

Excess

2,347
1,822
6,462
7,403
9,422
10,776
11,701
12,884
14,536
15,617
16,275
19,193
15,488
16,364
19,484
20,457
19,227
18,576
18,646
18,883
18,843
18,383
18,450
18,514
19,550
19,468
20,210
21,198
22,267
23,438
24,915
26,766
27,774
28,993
31,164
31,134
34,806
36,602
34,727
34,964
36,297
41,447
43,578
40,067
41,606
41,353
39,179

2
766
5,011
6,646
3,390
2,376
1,048
1,284
1,491
900
986
797
803
1,027
826
723
693
703
594
652
577
516
482
769
568
572
536
411
452
392
345
455
257
272
165
219
262
339
262
172
174
125
394
*30
312
500
945

41,316
39,362
37,602
38,174
37,833
37,935
38,440
38,214
37,418
37,632
37,615
39,179

546
435
437
476
449
480
507
446
498
505
529
945

Seasonal

801
95
3

3

2,395
2,588
11,473
14,049
12,812
13,152
12,749
14,168
16,027
16,517
17,261
19,990
16,291
17,391
20,310
21,180
19,920
19,279
19,240
19,535
19,420
18,899
18,932
19,283
20,118
20,040
20,746
21,609
22,719
23,830
25,260
27,221
28,031
29,265
31,329
31,353
35,068
36,941
34,989
35,136
36,471
41,572
43,972
40,097
41,918
41,853
40,124
41,862
39,797
38,039
38,650
38,282
38,415
38,947
38,660
37,916
38,137
38,144
40,124

2

1
Beginning December 1959, part of currency and cash held by member banks allowed as reserves; beginning November 1960 all such
currency and cash allowed.
Beginning November 1972, includes reserve deficiencies on which Federal Reserve Banks were allowed to waive penalties for a
transition period in connection with bank adaptation to Regulation J as amended effective November 9, 1972. Transition period ended
after second quarter 1974.
Effective November 1975, includes reserve deficiencies on which penalties are waived over a 24-month period when a nonmember
bank merges into an existing member bank, or when a nonmember bank joins the Federal Reserve System.
2
Data are for licensed banks only.
3
Includes all reserve balances of depository institutions plus vault cash at institutions with required reserve balances plus vault cash
equal to required reserves at other institutions.
4
Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve requirements less required reserves. (This
measure of excess reserves is comparable to the old excess reserves concept published historically.)
Source: Board of Governors of the Federal Reserve System.




296

TABLE

B-66.—A \regate reserves of depository institutions and monetary base, 1959-83
[Averages of daily figures; billions of dollars]
Adjusted -for changes in reserve requirements1
Not seasonally adjusted

Seasonally adjusted
Year and month

Reserves of depository institutions
Total2

Nonborrowed

Required

Monetary
base 3

Reserves of depository institutions
Total2

Nonborrowed

Required

Monetary
base 3

1959: Dec

14.04

13.10

13.54

43.4

14.32

13.37

13.81

44.3

I960- Dec
1961: Dec
1962- Dec
1963: Dec
1964- Dec

14 22
14.68
14 98
15.32
15 84

1415
14.55
14 72
14.99
15.57

13 48
14.10
14 41
14.83
15.43

43.6
44.7
46.0
48.3
50.7

14 49
14.96
15.24
15.56
16.09

14.42
14.82
14.98
15.23
15.82

13.75
14.37
14.67
15.07
15.68

44.5
45.6
47.0
49.3
51.7

1965: Dec
1966- Dec
1967: Dec
1968- Dec
1969- Dec

16.43
16 45
17.94
18 91
19.16

15.99
15 91
17.71
18.16
18.04

16.01
16.11
17.56
18.48
18.87

53.3
55.4
59.0
63.1
66.0

16.71
16.76
18.23
19.00
19.35

16.27
16.23
18.01
18.25
18.23

16.29
16.42
17.86
18.57
19.07

54.5
56.6
60.1
64.1
67.2

2015
21.50
23.70
24 85
26.25

19 82
21.38
22.65
23 56
25.52

19 90
21.32
23.41
24 55
25.99

70.1
75.1
81.5
87.5
95.4

20.27
21.51
23.92
25.11
26.51

19.93
21.38
22.87
23.81
25.78

20.02
21.33
23.64
24.81
26.25

71.2
76.0
82.9
89.0
96.9

26.38
26 80
28 00
29.44
30.71

26.25
26.74
27 43
28.57
29.24

26.11
26.52
27 81
29.21
30.38

101.7
109.0
118.3
128.8
139.3

26.68
27.27
28.46
29.91
31.26

26.55
27.21
27 89
29.04
29.79

26.41
26.99
28.27
29.68
30.93

103.3
111.1
120.5
131.3
141.7

32.46
33 75
36.23
37.59

30.77
3311
35.60
36.81

31.94
33 43
35.73
37.03

151.1
158 8
171.1
186.5

33.41
34 61
36.96
38.37

31.72
33 98
36.33
37.59

32.89
34.29
36.46
37.81

154.4
161.9
174.4
190.0

34.00
34.05
34 22
34.34
34 42
34.55

32.48
32.26
32 67
32.77
33 30
33.34

33.58
33.74
33 86
34.07
34 06
34.24

159.8
160.8
1615
162.5
163 8
164.9

35.92
33.99
33.63
34.12
33.97
33.81

34.40
32.20
32.07
32.55
32.85
32.61

35.50
33.69
33.26
33.85
33.61
33.50

161.3
159.0
159.3
161.6
163.0
164.2

Ot
c
Nov
Dc
e

34 55
34.70
3511
35 37
35.83
36.23

33 86
34.18
3417
34 89
35.21
35.60

34 24
34.39
34 72
34 96
35.43
35.73

165 4
166.4
167 7
168 8
169.8
171.1

3413
34.14
34.82
35 42
36.09
36.96

33.44
33.63
33.88
34 95
35.47
36.33

33.81
33.83
34.43
35.02
35.69
36.46

166.0
166.2
167.3
168.7
171.0
174.4

1983:
Jan
Feb.
Mar
Ar
p
May
June

35 63
36 10
36 80
37 15
37.13
37.61

35 10
35 52
36 01
36 14
36.18
35.98

35 09
35 66
36 37
36 68
36.68
37.13

1719
173 8
176 1
177 3
178.8
180.3

37 61
35 97
36 06
36 91
36.64
36.79

37 08
35 39
35 26
35 90
35.69
35.15

37.06
35.54
35.62
36.44
36.19
36.31

173.2
171.8
173.6
176.3
177.8
179.6

37.80
37.69
37.72
37 62
37.41
37.59

36.35
36.15
36.28
36 78
36.50
36.81

37.29
37.25
37.22
37 12
36.88
37.03

181.1
182.1
183.4
184 6
185.5
186.5

37.34
37.06
37.39
37 68
37.69
38.37

35.89
35.52
35.95
36 84
36.79
37.59

36.83
36.62
36.89
3718
37.17
37.81

181.7
181.8
182.9
184.4
186.7
190.0

. .
. .

1970- Dec
1971: Dec
1972: Dec
1973- Dec
1974: Dec.
1975: Dec
1976: Dec
1977- Dec
1978: Dec
1979- Dec

. .

1980: Dec
1981- Dec
1982: Dec
1983- D e c
1982:
Jan
Feb

Mr
a

Apr
May
June
July
Aug
sept::::::::::::::::::::::::::":

July
Aug
Sept
Oct

Nv
o
Dec

:

Reserve aggregates include required reserves of member banks and Edge Act corporations and other depository institutions.
Discontinuities associated with the implementation of the Monetary Control Act, the inclusion of Edge Act corporation reserves, and
other changes in Regulation D have been removed. Beginning with the week ended December 23, 1981, reserves aggregates have been
reduced by shifts of reservable liabilities to international banking facilities (IBFs). On the basis of reports of liabilities transferred to
IBFs by U.S. commercial banks and U.S. agencies and branches of foreign banks, it is estimated that required reserves were lowered on
average by $10 to $20 million in December 1981 and $40 to $70 million in January 1982.
2
Reserve balances with Federal Reserve Banks (which exclude required clearing balances) plus vault cash at institutions with required
reserve balances plus vault cash equal to required reserves at other instititions.
3
Includes reserve balances and required clearing balances at Federal Reserve Banks in the current week plus vault cash held two
weeks earlier used to satisfy reserve requirements at all depository institutions plus currency outside the U.S. Treasury, Federal Reserve
Banks, the vaults of depository institutions, and surplus vault cash at depository institutions.
Source: Board of Governors of the Federal Reserve System.




297

TABLE B-67 .—Bond yields and interest rates, 1929-83

[Percent per annum]
U.S. Treasury securities

Year

Bills
(new issues) l

3-month

6-month

Constant
maturities 2
3
years

10
years

Corporate
bonds
(Moody's)

Highgrade
municipal
bonds
(Standard &
Poor's)

Aaa

NewComhome
mercial
mortgage
paper, 6
yields
months4
(FHLBB)3

Prime rate
charged by
banks 5

Discount
rate,
Federal
Reserve
Bank of
New York 5

Federal
funds
rate 6

4.73

5.90

4.27

5.85

5.50-6.00

5.16

1933..

0.515

4.49

7.76

4.71

1.73

1.50-4.00

2.56

1939..

.023

3.01

4.96

2.76

.59

1.50

1.00

1940..
1941..
1942..
1943..
1944..

.014
.103
.326
.373
.375

2.84
2.77
2.83
2.73
2.72

4.75
4.33
4.28
3.91
3.61

2.50
2.10
2.36
2.06
1.86

.56
.53
.66
.69
.73

1.50
1.50
1.50
1.50
1.50

1.00
1.00
U.00
7
1.00
7
1.00

1945..
1946..
1947..
1948..
1949..

.375
.375
.594
1.040
1.102

2.62
2.53
2.61
2.82
2.66

3.29
3.05
3.24
3.47
3.42

1.67
1.64
2.01
2.40
2.21

.75
.81
1.03
1.44
1.49

1.50
1.50
1.50-1.75
1.75-2.00
2.00

1950..
1951..
1952..
1953..
1954..

1.218
1.552
1.766
1.931
.953

2.47
1.63

2.85
2.40

2.62
2.86
2.96
3.20
2.90

3.24
3.41
3.52
3.74
3.51

1.98
2.00
2.19
2.72
2.37

1.45
2.16
2.33
2.52
1.58

2.07
2.56
3.00
3.17
3.05

1.59
1.75
1.75
1.99
1.60

1955..
1956..
1957..
1958..
1959..

1.753
2.658
3.267
1.839
3.405

2.82
3.18
3.65
3.32

3.832

2.47
3.19
3.98
2.84
4.46

4.33

3.06
3.36
3.89
3.79
4.38

3.53
3.88
4.71
4.73
5.05

2.53
2.93
3.60
3.56
3.95

2.18
3.31
3.81
2.46
3.97

3.16
3.77
4.20
3.83
4.48

1.89
2.77
3.12
2.15
3.36

1.78
2.73
3.11
1.57
3.30

1960..
1961..
1962..
1963..
1964..

2.928
2.378
2.778
3.157
3.549

3.247
2.605
2.908
3.253
3.686

3.98
3.54
3.47
3.67
4.03

4.12
3.88
3.95
4.00
4.19

4.41
4.35
4.33
4.26
4.40

5.19
5.08
5.02
4.86
4.83

3.73
3.46
3.18
3.23
3.22

5.89
5.82

3.85
2.97
3.26
3.55
3.97

4.82
4.50
4.50
4.50
4.50

3.53
3.00
3.00
3.23
3.55

3.22
1.96
2.68
3.18
3.50

1965..
1966..
1967..
1968..
1969..

3.954
4.881
4.321
5.339
6.677

4.055
5.082
4.630
5.470
6.853

4.22
5.23
5.03
5.68
7.02

4.28
4.92
5.07
5.65
6.67

4.49
5.13
5.51
6.18
7.03

4.87
5.67
6.23
6.94
7.81

3.27
3.82
3.98
4.51
5.81

5.81
6.25
6.46
6.97
7.80

4.38
5.55
5.10
5.90
7.83

4.54
5.63
5.61
6.30
7.96

4.04
4.50
4.19
5.16
5.87

4.07
5.11
4.22
5.66
8.20

1970..
1971..
1972..
1973..
1974..

6.458
4.348
4.071
7.041
7.886

6.562
4.511
4.466
7.178
7.926

7.29
5.65
5.72
6.95
7.82

7.35
6.16
6.21
6.84
7.56

8.04
7.39
7.21
7.44
8.57

9.11
8.56
8.16
8.24
9.50

6.51
5.70
5.27
5.18
6.09

8.45
7.74
7.60
7.96
8.92

7.71
5.11
4.73
8.15
9.84

7.91
5.72
5.25
8.03
10.81

5.95
4.88
4.50
6.44
7.83

7.18
4.66
4.43
8.73
10.50

1975..
1976..
1977..
1978..
1979..

5.838
4.989
5.265
7.221
10.041

6.122
5.266
5.510
7.572
10.017

7.49
6.77
6.69
8.29
9.71

7.99
7.61
7.42
8.41
9.44

8.83
8.43
8.02
8.73
9.63

10.61
9.75
8.97
9.49
10.69

6.89
6.49
5.56
5.90
6.39

9.00
9.00
9.02
9.56
10.78

6.32
5.34
5.61
7.99
10.91

7.86
6.84
6.83
9.06
12.67

6.25
5.50
5.46
7.46
10.28

5.82
5.04
5.54
7.93
11.19

1980..
1981.
1982.
1983.

11.506
14.029
10.686
8.63

11.374
13.776
11.084
8.75

11.55
14.44
12.92
10.45

13.67
16.04
16.11
13.55

8.51
11.23
11.57
9.47

12.66
14.70
15.14
12.57

12.29
14.76
11.89
8.89

15.27
18.87
14.86
10.79

11.77
13.42
11.02
8.50

13.36
16.38
12.26
9.09

1929..

11.46
13.91
13.00
11.10

11.94
14.17
13.79
12.04

See next page for continuation of table.




298

7
1.00
7

1.00
1.00
1.34
1.50

TABLE B-67.—Bond yields and interest rates, 1929-83—Continued
[Percent per annum]
U.S. Treasury securities
Year

and

Bills
(new issues) 1

Constant
maturities2

month
3-month

1980:
Jan
Feb
Mar....
Apr
May....
June...
July....
Aug....
Sept...
Oct
Nov
Dec
1981:
Jan
Feb
Mar....

t-

June...
July....
Aug....
Sept...
Oct
Nov
Dec

1982:
Jan
Feb
Mar....

zJune...
July....
Aug....
Sept...
Oct
Nov
Dec

1983:
Jan
Feb
Mar....
June...
July....
Aug....
Sept...
Oct
Nov....
Dec...

6-month

3
years

10
years

Corporate
bonds
(Moody's)

Aaa

Baa

Highgrade
NewComPrime rate
municihome
charged by
mercial
pal
mortgage paper, 6 banks (highbonds
yields 3 months4
low) 5
(Stand- (FHLBB)
ard &
Poor's)

Discount
rate,
Federal
Federal
funds
Reserve
rate 6
Bank of
New York 5
(high-low)

12.036
12.814
15.526
14.003
9.150
6.995
8.126
9.259
10.321
11.580
13.888
15.661

11.851
12.721
15.100
13.618
9.149
7.218
8.101
9.443
10.546
11.566
13.612
14.770

10.88
12.84
14.05
12.02
9.44
8.91
9.27
10.63
11.57
12.01
13.31
13.65

10.80
12.41
12.75
11.47
10.18
9.78
10.25
11.10
11.51
11.75
12.68
12.84

11.09
12.38
12.96
12.04
10.99
10.58
11.07
11.64
12.02
12.31
12.97
13.21

12.42
13.57
14.45
14.19
13.17
12.71
12.65
13.15
13.70
14.23
14.64
15.14

7.21
8.04
9.09
8.40
7.37
7.60
8.08
8.62
8.95
9.11
9.55
10.09

11.87
11.93
12.62
13.03
13.68
12.66
12.48
12.25
12.35
12.61
13.04
13.28

12.66
13.60
16.50
14.93
9.29
8.03
8.29
9.61
11.04
12.32
14.73
16.49

15.25-15.25
16.75-15.25
19.50-16.75
20.00-19.50
19.00-14.00
14.00-12.00
12.00-11.00
11.50-11.00
13.00-11.50
14.50-13.50
17.75-14.50
21.50-17.75

12.00-12.00
13.00-12.00
13.00-13.00
13.00-13.00
13.00-12.00
12.00-11.00
11.00-10.00
10.00-10.00
11.00-10.00
11.00-11.00
12.00-11.00
13.00-12.00

13.82
14.13
17.19
17.61
10.98
9.47
9.03
9.61
10.87
12.81
15.85
18.90

14.724
14.905
13.478
13.635
16.295
14.557
14.699
15.612
14.951
13.873
11.269
10.926

13.883
14.134
12.983
13.434
15.334
13.947
14.402
15.548
15.057
14.013
11.530
11.471

13.01
13.65
13.51
14.09
15.08
14.29
15.15
16.00
16.22
15.50
13.11
13.66

12.57
13.19
13.12
13.68
14.10
13.47
14.28
14.94
15.32
15.15
13.39
13.72

12.81
13.35
13.33
13.88
14.32
13.75
14.38
14.89
15.49
15.40
14.22
14.23

15.03
15.37
15.34
15.56
15.95
15.80
16.17
16.34
16.92
17.11
16.39
16.55

9.65
10.03
10.12
10.55
10.73
10.56
11.03
12.13
12.86
12.67
11.71
12.77

13.27
13.54
14.02
14.15
14.10
14.67
14.72
15.27
15.29
15.65
16.38
15.87

15.10
14.87
13.59
14.17
16.66
15.22
16.09
16.62
15.93
14.72
11.96
12.14

21.50-20.00
20.00-19.00
19.00-17.50
18.00-17.00
20.50-18.00
20.50-20.00
20.50-20.00
20.50-20.50
20.50-19.50
19.50-18.00
18.00-16.00
15.75-15.75

13.00-13.00
13.00-13.00
13.00-13.00
13.00-13.00
14.00-13.00
14.00-14.00
14.00-14.00
14.00-14.00
14.00-14.00
14.00-14.00
14.00-13.00
13.00-12.00

19.08
15.93
14.70
15.72
18.52
19.10
19.04
17.82
15.87
15.08
13.31
12.37

12.412
13.780
12.493
12.821
12.148
12.108
11.914
9.006
8.196
7.750
8.042
8.013

12.930
13.709
12.621
12.861
12.220
12.310
12.236
10.105
9.539
8.299
8.319
8.225

14.64
14.73
14.13
14.18
13.77
14.48
14.00
12.62
12.03
10.62
9.98
9.88

14.59
14.43
13.86
13.87
13.62
14.30
13.95
13.06
12.34
10.91
10.55
10.54

15.18
15.27
14.58
14.46
14.26
14.81
14.61
13.71
12.94
12.12
11.68
11.83

17.10
17.18
16.82
16.78
16.64
16.92
16.80
16.32
15.63
14.73
14.30
14.14

13.16
12.81
12.72
12.45
11.99
12.42
12.11
11.12
10.61
9.59
9.97
9.91

15.25
15.12
15.67
15.84
15.89
15.40
15.70
15.68
14.98
14.41
13.81
13.69

13.35
14.27
13.47
13.64
13.02
13.79
13.00
10.80
10.86
9.21
8.72
8.50

15.75-15.75
17.00-15.75
16.50-16.50
16.50-16.50
16.50-16.50
16.50-16.50
16.50-15.50
15.50-13.50
13.50-13.50
13.50-12.00
12.00-11.50
11.50-11.50

12.00-12.00
12.00-12.00
12.00-12.00
12.00-12.00
12.00-12.00
12.00-12.00
12.00-11.50
11.50-10.00
10.00-10.00
10.00-9.50
9.50-9.00
9.00-8.50

13.22
14.78
14.68
14.94
14.45
14.15
12.59
10.12
10.31
9.71
9.20
8.95

7.810
8.130
8.304
8.252
8.19
8.82
9.12
9.39
9.05
8.71
8.71
8.96

7.898
8.233
8.325
8.343
8.20
8.89
9.29
9.53
9.19
8.90
8.89
9.14

9.64
9.91
9.84
9.76
9.66
10.32
10.90
11.30
11.07
10.87
10.96
11.13

10.46
10.72
10.51
10.40
10.38
10.85
11.38
11.85
11.65
11.54
11.69
11.83

11.79
12.01
11.73
11.51
11.46
11.74
12.15
12.51
12.37
12.25
12.41
12.57

13.94
13.95
13.61
13.29
13.09
13.37
13.39
13.64
13.55
13.46
13.61
13.75

9.45
9.48
9.16
8.96
9.03
9.51
9.46
9.72
9.57
9.64
9.79
9.90

13.49
13.16
13.41
12.42
12.67
12.36
12.50
12.38
12.54
12.25
12.34
12.42

8.15
8.39
8.48
8.48
8.31
9.03
9.36
9.68
9.28
8.98
9.09
9.50

11.50-11.00
11.00-10.50
10.50-10.50
10.50-10.50
10.50-10.50
10.50-10.50
10.50-10.50
11.00-10.50
11.00-11.00
11.00-11.00
11.00-11.00
11.00-11.00

8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50
8.50-8.50

8.68
8.51
8.77
8.80
8.63
8.98
9.37
9.56
9.45
9.48
9.34
9.47

1

Rate on new issues within period; bank-discount basis.
Yields on the more actively traded issues adjusted to constant maturities by the Treasury Department.
"Effective rate (in the primary market) on conventional mortgages, reflecting fees and charges as well as contract rate and
assuming, on the average, repayment at end of 10 years. Rates beginning January 1973 not strictly comparable with prior rates.
4
Bank discount basis; prior to November 1979, data are for 4-6 months paper.
5
For monthly data, high and low for the period. Prime rate for 1929-33 and 1947-48 are ranges of the rate in effect during the
period.
6
Since July 19, 1975, the daily effective rate is an average of the rates on a given day weighted bv the volume of transactions at
these rates. Prior to that date, the daily effective rate was the rate considered most representative of the day's transactions, usually
the one at which most transactions occurred.
7
From October 30, 1942, to April 24, 1946, a preferential rate of 0.50 percent was in effect for advances secured by Government
securities maturing in 1 year or less.
2

Sources: Department of the Treasury, Board of Governors of the Federal Reserve System, Federal Home Loan Bank Board (FHLBB),
Moody's Investors Service, and Standard & Poor's Corporation.




299

TABLE B-68.—Consumer credit outstanding, 1950-83
[Amount outstanding (end of month); millions of dollars, seasonally adjusted]

Year and month

December: '
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

Total
consumer
credit

Installment c r e d i t 1

Total

Automobile

Revolving2

Mobile h o m e 3

Other

Noninstaliment
credit4

24,956
26,496
31,727
35,795
37,133
44,123
47,984
50,841
51,284
59,075

15,166
15,859
20,121
23,870
24,470
29,809
32,660
34,914
34,736
40,421

6,035
5,981
7,651
9,702
9,755
13,485
14,499
15,493
14,267
16,641

9,131
9,878
12,470
14,168
14,715
16,324
18,161
19,421
20,469
23,780

9,790
10,637
11,606
11,925
12,663
14,314
15,324
15,927
16,548
18,654

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

63,525
66,134
72,351
81,055
90,713
101,063
107,413
112,676
123,790
134,129

44,335
45,438
50,375
57,056
64,674
72,814
78,162
81,783
90,112
99,381

18,108
17,656
20,001
22,891
25,865
29,378
31,024
31,136
34,352
36,946

2,022
3,563

26,227
27,782
30,374
34,165
38,809
43,436
47,138
50,647
53,738
58,872

19,190
20,696
21,976
23,999
26,039
28,249
29,251
30,893
33,678
34,748

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

139,355
155,537
175,286
200,894
210,634
219,772
244,932
284,599
332,849
377,486

103,905
116,434
131,258
152,910
162,203
169,387
190,725
226,646
269,392
307,115

36,348
40,522
47,835
53,740
54,241
57,279
67,798
82,890
101,863
116,523

4,900
8,252
9,391
11,318
13,232
14,467
16,505
36,427
45,004
53,174

2,433
7,171
9,468
13,505
14,582
14,382
14,530
14,897
15,199
16,843

60,224
60,489
64,564
74,347
80,148
83,259
91,892
92,432
107,326
120,575

35,450
39,103
44,028
47,984
48,431
50,385
54,207
57,953
63,457
70,371

1980
1981
1982

381,689
405,654
423,852

308,137
326,274
339,316

116,808
125,323
130,235

54,650
58,722
62,830

17,302
18,280
18,912

119,377
123,949
127,339

73,552
79,380
84,536

1982:
Jan
Feb
Mar
Apr
May
June

408,610
408,861
407,891
411,377
413,562
416,313

328,059
328,781
328,999
330,634
332,142
333,884

125,956
126,102
125,783
126,258
126,970
127,727

58,858
58,997
59,457
60,144
60,784
61,458

18,368
18,394
18,359
18,447
18,536
18,631

124,877
125,288
125,400
125,785
125,852
126,068

80,551

July
Aug
Sept
Oct
Nov
Dec

417,209
417,134
418,089
418,885
420,333
423,852

334,276
334,343
335,180
335,593
336,897
339,316

127,628
127,271
127,473
127,694
128,824
130,235

61,867
62,007
62,120
62,302
62,326
62,830

18,744
18,910
18,932
18,932
18,920
18,912

126,037
126,155
126,655
126,665
126,827
127,339

82,933
82,791
82,909
83,292
83,436
84,536

1983:
Jan
Feb
Mar
Apr
May
June

427,975
427,887
430,867
434,101
437,670
443,245

342,041
342,776
345,358
347,629
350,325
354,731

130,860
130,627
131,848
132,537
133,850
135,823

62,898
62,763
63,940
64,857
65,371
66,581

19,332
19,536
19,475
19,497
19,514
19,665

128,951
129,850
130,095
130,738
131,590
132,662

85,934
85,111
85,509
86,472
87,345
88,514

July
Aug
Sept
Oct
Nov

448,618
452,202
455,519
460,993
467,084

359,571
362,959
365,334
370,219
374,890

138,244
140,765
141,050
142,822
144,060

67,402
67,715
68,194
69,339
70,639

19,806
19,876
20,026
20,128
20,235

134,119
134,603
136,064
137,930
139,956

89,047
89,243
90,185
90,774
92,194

78,892
80,743
81,420
82,429

1
Installment credit covers most short- and intermediate-term credit extended to individuals through regular business channels,
usually to finance the purchase of consumer goods and services or to refinance debts incurred for such purposes, and scheduled to be
repaid (or with the option of repayment) in two or more installments. Credit secured by real estate is generally excluded.
2
Consists of credit cards at retailers, gasoline companies, and commercial banks, and check credit at commercial banks. Prior to
1968, included in "other," except gasoline companies, included in noninstaliment credit prior to 1971. Beginning 1977, includes openend credit at retailers, previously included in other." Also beginning 1977, some retail credit was reclassified from commercial into
consumer credit.
3
Not reported separately prior to July 1970.
4
Noninstaliment credit is credit scheduled to be repaid in a lump sum, including single-payment loans, charge accounts, and service
credit. Because of inconsistencies in the data and infrequent benchmarking, series is no longer published by the Federal Reserve Board
on a regular basis. Data are shown here as a general indication of trends.

Source: Board of Governors of the Federal Reserve System.




300

TABLE B-69.—Net change in consumer credit outstanding, 1950-83
[Change from preceding period; millions of dollars, seasonally adjusted]

Year and month

Total
consumer
credit

Installment c r e d i t 1
Total

Automobile

Revolving *

Mobile
home 3

Other

Noninstallment
credit4

December:
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

4,710
1,540
5,231
4,068
1,338
6,990
3,861
2,857
443
7,791

3,220
693
4,262
3,749
600
5,339
2,851
2,254
-178
5,685

1,539
— 54
1,670
2,051
53
3,730
1,014
994
-1,226
2,374

1,681
747
2,592
1,698
547
1,609
1,837
1,260
1,048
3,311

1,490
847
969
319
738
1,651
1,010
603
621
2,106

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

4,450
2,609
6,217
8,704
9,658
10,350
6,350
5,263
11,114
10,339

3,914
1,103
4,937
6,681
7,618
8,140
5,348
3,621
8,329
9,269

1,467
-452
2,345
2,890
2,974
3,513
1,646
112
3,216
2,594

2,022
1,541

2,447
1,555
2,592
3,791
4,644
4,627
3,702
3,509
3,091
5,134

536
1,506
1,280
2,023
2,040
2,210
1,002
1,642
2,785
1,070

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

5,226
16,182
19,749
25,608
9,740
9,138
25,160
39,667
48,250
44,637

4,524
12,529
14,824
21,652
9,293
7,184
21,338
35,921
42,746
37,723

-598
4,174
7,313
5,905
501
3,038
10,519
15,092
18,973
14,660

1,337
3,352
1,139
1,927
1,914
1,235
2,038
19,922
8,577
8,170

2,433
4,738
2,297
4,037
1,077
-200
148
367
302
1,644

1,352
265
4,075
9,783
5,801
3,111
8,633
540
14,894
13,249

702
3,653
4,925
3,956
447
1,954
3,822
3,746
5,504
6,914

1980...
1981...
1982...

4,203
23,965
18,198

1,022
18,137
13,042

285
8,515
4,912

1,476
4,072
4,108

459
978
632

-1,198
4,572
3,390

3,181
5,828
5,156

1982:
Jan
Feb
Mar....
Apr
May....
June...

2,956
251
-970
3,486
2,185
2,751

1,785
722
218
1,635
1,508
1,742

633
146
-319
475
712
757

136
139
460
687
640
674

26
-35
88
89
95

928
411
112
385
67
216

1,171
-471
-1,188
1,851
677
1,009

July
Aug
Sept
Oct
Nov
Dec

896
-75
955
796
1,448
3,519

392
67
837
413
1,304
2,419

-99
-357
202
221
1,130
1,411

409
140
113
182
24
504

113
166
22
0
-12

-31
118
500
10
162
512

504
-142
118
383
144
1,100

1983:
Jan
Feb
Mar
Apr
May
June

4,123
-88
2,980
3,234
3,569
5,575

2,725
735
2,582
2,271
2,696
4,406

625
-233
1,221
689
1,313
1,973

68
-135
1,177
917
514
1,210

420
204
-61
22
17
151

1,612
899
245
643
852
1,072

1,398
-823
398
963
873
1,169

5,373
3,584
3,317
5,474
6,091

4,840
3,388
2,375
4,885
4,671

2,421
2,521
285
1,772
1,238

821
313
479
1,145
1,300

141
70
150
102
107

1,457
484
1,461
1,866
2,026

533
196
942
589
1,420

July....
Aug....
Sept...
Oct
Nov....

1
Installment credit covers most short- and intermediate-term credit extended to individuals through regular business channels,
usually to finance the purchase of consumer goods and services or to refinance debts incurred for such purposes, and scheduled to be
repaid (or with the option of repayment) in two or more installments. Credit secured by real estate generally excluded.
2
Consists of credit cards at retailers, gasoline companies, and commercial banks, and check credit at commercial banks. Prior to
1968, included in "other," except gasoline companies, included in noninstallment credit prior to 1971. Beginning 1977, includes openend credit at retailers, previously included in "other." Also beginning 1977, some retail credit was reclassified from commercial into
consumer credit.
3
Not reported separately prior to July 1970.
4
Noninstallment credit is credit scheduled to be repaid in a lump sum, including single-payment loans, charge accounts, and service
credit. Because of inconsistencies in the data and infrequent benchmarking, series is no longer published by the Federal Reserve Board
on a regular basis. Data are shown here as a general indication of trends.

Note.—See also Table B-68.
Source: Board of Governors of the Federal Reserve System.

0
4 2 4 - 4 5 6


301
- 8 4 - 2 0

TABLE B-70.—Mortgage debt outstanding by type of property and of financing, 1939-83
[Billions of dollars]
Nonfarm properties

Nonfarm properties by type of mortgage
Conventional 3

Government underwritten
End of year
or quarter

All
properties

Farm
properties

Total

1- to 4family
houses

Multifamily
properties

Commercial
properties1

1- to 4-family houses
Total 2
Total

FHA
insured

VA
guaranteed

Total

1- to 4family
houses

1939

35.5

6.6

28.9

16.3

5.6

7.0

1.8

1.8

1.8

27.1

14.5

1940
1941
1942
1943
1944

36.5
37.6
36.7
35.3
34.7

6.5
6.4
6.0
5.4
4.9

30.0
31.2
30.8
29.9
29.7

17.4
18.4
18.2
17.8
17.9

5.7
5.9
5.8
5.8
5.6

6.9
7.0
6.7
6.3
6.2

2.3
3.0
3.7
4.1
4.2

2.3
3.0
3.7
4.1
4.2

2.3
3.0
3.7
4.1
4.2

27.7
28.2
27.1
25.8
25.5

15.1
15.4
14.5
13.7
13.7

1945
1946
1947
1948
1949

35.5
41.8
48.9
56.2
62.7

4.8
4.9
5.1
5.3
5.6

30.8
36.9
43.9
50.9
57.1

18.6
23.0
28.2
33.3
37.6

5.7
6.1
6.6
7.5
8.6

6.4
7.7
9.1
10.2
10.8

4.3
6.3
9.8
13.6
17.1

4.3
6.1
9.3
12.5
15.0

4.1
3.7
3.8
5.3
6.9

0.2
2.4
5.5
7.2
8.1

26.5
30.6
34.1
37.3
40.0

14.3
16.9
18.9
20.8
22.6

1950
1951
1952
1953
1954

72.8
82.3
91.4
101.3
113.7

6.1
6.7
7.2
7.7
8.2

66.7
75.6
84.2
93.6
105.4

45.2
51.7
58.5
66.1
75.7

10.1
11.5
12.3
12.9
13.5

11.5
12.5
13.4
14.5
16.3

22.1
26.6
29.3
32.1
36.2

18.8
22.9
25.4
28.1
32.1

8.5
9.7
10.8
12.0
12.8

10.3
13.2
14.6
16.1
19.3

44.7
49.1
54.9
61.5
69.3

26.3
28.9
33.2
38.0
43.6

1955
1956
1957
1958
1959

129.9
144.5
156.5
171.8
190.8

9.0
9.8
10.4
11.1
12.1

120.9
134.6
146.1
160.7
178.7

88.2
99.0
107.6
117.7
130.9

14.3
14.9
15.3
16.8
18.7

18.3
20.7
23.2
26.1
29.2

42.9
47.8
51.6
55.2
59.3

38.9
43.9
47.2
50.1
53.8

14.3
15.5
16.5
19.7
23.8

24.6
28.4
30.7
30.4
30.0

78.0
86.8
94.6
105.5
119.4

49.3
55.1
60.4
67.6
77.0

1960
1961
1962
1963
1964

207.5
228.0
251.4
278.5
305.9

12.8
13.9
15.2
16.8
18.9

194.7
214.1
236.2
261.7
287.0

141.9
154.6
169.3
186.4
203.4

20.3
23.0
25.8
29.0
33.6

32.4
36.5
41.1
46.2
50.0

62.3
65.6
69.4
73.4
77.2

56.4
59.1
62.2
65.9
69.2

26.7
29.5
32.3
35.0
38.3

29.7
29.6
29.9
30.9
30.9

132.3
148.5
166.9
188.2
209.8

85.5
95.5
107.1
120.5
134.1

1965
1966
1967
1968
1969

333.3
356.5
381.2
410.9
441.4

21.2
23.1
25.1
27.4
29.2

312.1
333.4
356.1
383.5
412.2

220.5
232.9
247.3
264.8
283.2

37.2
40.3
43.9
47.3
52.2

54.5
60.1
64.8
71.4
76.9

81.2
84.1
88.2
93.4
100.2

73.1
76.1
79.9
84.4
90.2

42.0
44.8
47.4
50.6
54.5

31.1
31.3
32.5
33.8
35.7

231.0
249.3
267.9
290.1
312.0

147.4
156.9
167.4
180.4
193.0

1970
1971
1972
1973
1974

474.2
526.5
603.4
681.6
744.3

30.3
32.2
35.8
41.3
46.3

443.8
494.3
567.7
640.3
698.0

298.1
328.3
372.2
415.5
451.2

60.1
70.1
82.8
93.1
100.0

85.6
95.9
112.7
131.7
146.9

109.2
120.7
131.1
135.0
140.2

97.3
105.2
113.0
116.2
121.3

59.9
65.7
68.2
66.2
65.1

37.3
39.5
44.7
50.0
56.2

334.6
373.5
436.5
505.3
557.8

200.8
223.1
259.2
299.2
329.9

1975
1976
1977
1978
1979

806.1
893.0
1,022.6
1,173.6
1,337.7

51.1
56.6
63.6
70.8
82.7

755.0
836.4
958.9
1,102.8
1,255.1

495.0
560.7
657.8
770.6
891.1

100.6
104.5
111.5
120.7
128.4

159.3
171.2
189.6
211.4
235.6

147.0
154.1
161.7
176.4
199.0

127.7
133.5
141.6
153.4
172.9

66.1
66.5
68.0
71.4
81.0

61.6
67.0
73.6
82.0
92.0

608.0
682.3
797.2
926.4
1,056.1

367.3
427.1
516.2
617.3
718.1

1980
1981
1982

1,471.8
1,583.3
1,655.2

92.0
101.7
106.8

1,379.8
1,481.5
1,548.4

987.0
1,065.3
1,114.2

137.1
136.4
140.3

255.7
279.9
293.9

225.1
238.9
248.9

195.2
207.6
217.9

93.6
101.3
108.0

101.6
106.2
109.9

1,154.7
1,242.6
1,299.5

791.8
857.7
896.3

1981: I
II
Il
l
IV

1,497.6
1,533.3
1,561.7
1,583.3

94.5
97.5
100.0
101.7

1,403.2
1,435.8
1,461.7
1,481.5

1,004.1
1,028.4
1,047.8
1,065.3

138.1
139.3
140.2
136.4

261.0
268.1
273.7
279.9

229.1
233.6
237.0
238.9

198.8
202.7
205.9
207.6

95.7
98.1
100.0
101.3

103.1
104.6
105.9
106.2

1,174.0
1,202.2
1,224.8
1,242.6

805.2
825.7
841.9
857.7

1982: I
I
I
Ill
IV

1,602.9
1,624.3
1,632.2
1,655.2

103.9
105.5
106.4
106.8

1,498.9
1,518.8
1,525.8
1,548.4

1,076.9
1,089.5
1,096.2
1,114.2

137.7
138.3
138.4
140.3

284.3
291.0
291.2
293.9

240.5
241.6
246.8
248.9

209.0
209.8
214.8
217.9

102.0
102.7
106.2
108.0

107.0
107.1
108.6
109.9

1,258.4
1,277.2
1,278.9
1,299.5

868.0
879.7
881.4
896.3

1983:I

1,682.6
1,724.1
1,774.2

106.9
107.7
108.8

1,575.7
1,616.4
1,665.3

1,133.3
1,161.8
1,198.4

142.2
145.4
147.7

300.2
309.2
319.3

252.5
261.1

222.1
230.0

110.8
115.8

111.3
114.3

1,323.2
1,355.3

911.2
931.8

1
2
3

Includes negligible amount of farm loans held by savings and loan associations.
Includes FHA insured multifamily properties, not shown separately.
Derived figures. Total includes multifamily and commercial properties, not shown separately.

Source: Board of Governors of the Federal Reserve System, based on data from various Government and private organizations.




302

TABLE B-71.—Mortgage debt outstanding by holder, 1939-83
[Billions of dollars]
Major financial institutions
End of year
or quarter

Total

Total

Savings
and loan
associations

Mutual
savings
banks

Other holders

Commercial
banks 1

Life
insurance
companies

Federal
and
related
agencies 2

Individuals and
others

1939

35.5

18.6

3.8

4.8

4.3

5.7

5.0

11.9

1940
1941
1942
1943
1944

36.5
37.6
36.7
35.3
34.7

19.5
20.7
20.7
20.2
20.2

4.1
4.6
4.6
4.6
4.8

4.9
4.8
4.6
4.4
4.3

4.6
4.9
4.7
4.5
4.4

6.0
6.4
6.7
6.7
6.7

4.9
4.7
4.3
3.6
3.0

12.0
12.2
11.7
11.5
11.5

1945..
1946..
1947..
1948..
1949..

35.5
41.8
48.9
56.2
62.7

21.0
26.0
31.8
37.8
42.9

5.4
7.1
8.9
10.3
11.6

4.2
4.4
4.9
5.8
6.7

4.8
7.2
9.4
10.9
11.6

6.6
7.2
8.7
10.8
12.9

2.4
2.0
1.8
1.8
2.3

12.1
13.8
15.3
16.6
17.5

1950..
1951..
1952..
1953..
1954..

72.8
82.3
91.4
101.3
113.7

51.7
59.5
66.9
75.1
85.7

13.7
15.6
18.4
22.0
26.1

8.3
9.9
11.4
12.9
15.0

13.7
14.7
15.9
16.9
18.6

16.1
19.3
21.3
23.3
26.0

2.8
3.5
4.1
4.6
4.8

18.4
19.3
20.4
21.7
23.2

1955
1956
1957
1958
1959

129.9
144.5
156.5
171.8
190.8

99.3
111.2
119.7
131.5
145.5

31.4
35.7
40.0
45.6
53.1

17.5
19.7
21.2
23.3
25.0

21.0
22.7
23.3
25.5
28.1

29.4
33.0
35.2
37.1
39.2

5.3
6.2
7.7
8.0
10.2

25.3
27.1
29.1
32.3
35.1

1960
1961
1962
1963
1964

207.5
228.0
251.4
278.5
305.9

157.6
172.6
192.5
217.1
241.0

60.1
68.8
78.8
90.9
101.3

26.9
29.1
32.3
36.2
40.6

28.8
30.4
34.5
39.4
44.0

41.8
44.2
46.9
50.5
55.2

11.5
12.2
12.6
11.8
12.2

38.4
43.1
46.3
49.5
52.7

1965
1966
1967
1968
1969

333.3
356.5
381.2
410.9
441.4

264.6
280.8
298.8
319.9
339.1

110.3
114.4
121.8
130.8
140.2

44.6
47.3
50.5
53.5
56.1

49.7
54.4
59.0
65.7
70.7

60.0
64.6
67.5
70.0
72.0

13.5
17.5
20.9
25.1
31.1

55.2
58.2
61.4
65.9
71.2

1970..
1971..
1972..
1973..
1974..

474.2
526.5
603.4
681.6
744.3

355.9
394.2
450.0
505.4
542.6

150.3
174.3
206.2
231.7
249.3

57.9
62.0
67.6
73.2
74.9

73.3
82.5
99.3
119.1
132.1

74.4
75.5
76.9
81.4
86.2

38.3
46.4
54.6
64.8
82.1

79.9
85.9
98.9
111.4
119.7

1975..
1976..
1977..
1978..
1979..

806.1
893.0
1,022.6
1,173.6
1,337.7

581.2
647.5
745.0
848.2
938.6

278.6
323.0
381.2
432.8
475.7

77.2
81.6
88.1
95.2
98.9

136.2
151.3
179.0
214.0
245.2

89.2
91.6
96.8
106.2
118.8

101.0
116.6
140.3
170.4
215.7

123.8
128.9
137.2
155.0
183.4

1980..
1981..
1982..

1,471.8
1,583.3
1,655.2

997.2
1,040.8
1,023.7

503.2
518.5
482.2

99.9
100.0
97.8

263.0
284.5
301.7

131.1
137.7
141.9

256.6
289.1
354.8

218.1
253.3
276.6

1981: I
II
Ill
IV

1,497.6
1,533.3
1,561.7
1,583.3

1,007.0
1,023.3
1,034.0
1,040.8

507.6
515.4
519.0
518.5

99.7
100.0
100.0
100.0

266.7
273.2
279.0
284.5

132.9
134.7
136.0
137.7

263.5
271.4
279.9
289.1

227.2
238.6
247.8
253.3

1982: I..

1,602.9
1,624.3
1,632.2
1,655.2

1,041.7
1,042.9
1,027.0
1,023.7

516.1
513.0
493.9
482.2

97.5
96.3
94.4
97.8

289.4
294.0
298.3
301.7

138.8
139.5
140.4
141.9

301.0
315.1
332.8
354.8

260.2
266.3
272.3
276.6

1,682.6
1,724.1
1,774.2

1,029.8
1,049.8
1,080.3

475.7
473.1
481.3

105.4
119.2
128.1

30.57
312.7
324.1

143.0
144.7
146.9

374.6
394.8
412.9

278.2
279.6
280.9

IV
1983: I....
II...
1
2

Includes loans held by nondeposit trust companies, but not by bank trust departments.
Includes former Federal National Mortgage Association (FNMA) and new Government National Mortgage Association (GNMA), as well
as Federal Housing Administration, Veterans Administration, Public Housing Administration, Farmers Home Administration, and in earlier
years Reconstruction Finance Corporation, Homeowners Loan Corporation, and Federal Farm Mortgage Corporation. Also includes GNMA
Pools and U.S.-sponsored agencies such as new FNMA, Federal Land Banks, and Federal Home Loan Mortgage Corporation. Other U.S.
agencies (amounts small or current separate data not readily available) included with "individuals and others.
Source: Board of Governors of the Federal Reserve System, based on data from various Government and private organizations.




303

GOVERNMENT FINANCE
TABLE B-72.—Federal budget receipts, outlays, and debt, fiscal years

1974-85

[Millions of dollars; fiscal years]
Actual
Description
1975

1976

1977

1978

1979

279,090

298,060

355,559

399,561

463,302

187,505
116,683
-25,098

201,099
131,750
-34,789

241,312
150,560
-36,313

270,490
165,568
-36,498

316,366
186,988
-40,052

BUDGET RECEIPTS AND OUTLAYS:
Total receipts
Federal funds
Trust funds
Interfund transactions..
Total outlays

324,245

364,473

400,506

448,368

490,997

Federal funds
Trust funds
Interfund transactions....

240,081
109,261
-25,098

269,921
129,341
-34,789

295,756
141,063
-36,313

331,991
152,874
-36,498

362,396
168,653
-40,052

Total surplus or deficit ( - ) . .

-45,154

-66,413

-44,948

-48,807

-27,694

-52,576
7,422

-68,822
2,409

_ 54 444
9^496

-61,501
12,694

-40,030
18,335

Federal funds
Trust funds
OUTSTANDING DEBT, END OF PERIOD:
Gross Federal debt

544,131

631,866

709,138

780,425

833,751

Held by Government agencies..
Held by the public

147,225
396,906

151,566
480,300

157,295
551,843

169,477
610,948

189,162
644,589

Federal Reserve System..
Other

84,993
311,913

94,714
385,586

105,004
446,839

115,480
495,468

115,594
528,996

279,090

298,060

355,559

399,561

463,302

122,386
40,621
84,534
16,551
4,611
3,676

131,603
41,409
90,769
16,963
5,216
4,074

157,626
54,892
106,485
17,548
7,327
5,150

180,988
59,952
120,967
18,376
5,285
6,573

217,841
65,677
138,939
18,745
5,411
7,439

5,777
935

5,451
2,576

5,908
623

6,641
778

8,327
925

324,245

BUDGET RECEIPTS...
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions.
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts:
Deposits of earnings by Federal Reserve System.
All other

364,473

400,506

448,368

490,997

National defense l
International affairs
General science, space, and technology.
Energy
Natural resources and environment
Agriculture
Commerce and housing credit.
Transportation
Community and regional development.
Education, training, employment, and social services
Health
Social security and medicare 2
Social security
Medicare
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Net interest
Allowances
Undistributed offsetting receipts x

86,509
7,073
3,991
2,185
7,343
1,661
5,612
10,390
3,741
15,882
12,870
77,532
64,658
12,874
50,160
16,599
2,951
2,913
7,187
23,245

89,619
5,740
4,373
3,131
8,181
2,495
3,796
13,438
4,767
18,749
15,677
89,736
73,903
15,834
60,784
18,433
3,324
2,668
7,235
26,711

97,241
4,991
4,679
4,154
10,027
5,537
102
14,640
6,348
20,999
17,246
104,414
85,068
19,345
61,047
18,038
3,602
2,941
9,499
29,878

104,495
6,111
4,746
5,837
10,980
7,717
3,337
15,445
11,072
26,475
18,485
116,629
93,861
22,768
61,485
18,978
3,810
3,442
9,601
35,441

116,342
6,263
5,051
6,863
12,133
6,191
2,579
17,468
9,544
29,693
20,477
130,567
104,073
26,495
66,359
19,931
4,169
3,855
8,372
42,615

-13,602

-14,386

-14,879

-15,720

-17,476

Composition of undistributed offsetting receipts:
Employer share, employee retirement x
Rents and royalties on the Outer Continental Shelf..

-11,174
-2,428

-11,724
-2,662

-12,505
-2,374

-13,461
-2,259

-14,209
-3,267

BUDGET OUTLAYS..

1
Starting in 1985 military retired pay will be financed from a trust fund in the income security function. The national defense
function will include accrual charges to pay for retirement benefits earned by currently active duty personnel, and these will be offset in
the undistributed offsetting receipts (employer share, employee retirement). The data for the earlier years have been adjusted to be
comparable to this new usage.
2
The Social Security Amendments of 1983 require that social security and medicare show in the budget as a separate function. In
previous budgets social security was in the income security function and medicare was in the health function. The data in this table
nave been reconstructed to be comparable for all years shown.
See next page for continuation of table.




304

TABLE B-72.—Federal budget receipts, outlays, and debt, fiscal years

1974-85—Continued

[Millions of dollars; fiscal years]
Actual

Estimates

Description
1980

1981

1982

1983

1984

1985

BUDGET RECEIPTS AND OUTLAYS:
Total receipts

517,112

745,127

420,009
331,511
-81,449

464,246
393,460
-112,578

657,204

728,375

795,969

853,760

925,492

475,171
232,596
-50,563

526,113
262,155
-59,894

600,920
294,287
-99,238

628,789
306,420
-81,449

687,221
350,850
-112,578

-57,932

-110,609

-195,407

-183,689

-180,365

-68,364
8,801

-64,749
6,817

-116,860
6,252

-218,488
23,081

-208,780
25,091

-222,975
42,610

914,317

1,003,941

1,146,987

1,381,886

1,591,573

1,828,388

199,212
715,105

209,507
794,434

217,560
929,427

240,116
1,141,770

266,803
1,324,770

310,618
1,517,770

120,846
594,259

Federal funds...
Trust funds

670,071

382,432
317,368
-99,238

-59,563

Total surplus or deficit ( - ) ..

600,562

409,253
268,407
-59,894

419,220
202,129
-44,674

Federal funds
Trust funds
Interfund transactions....

617,766

410,422
239,413
-50,563

576,675

Total outlays

599,272

350,856
210,930
-44,674

Federal funds
Trust funds
Interfund transactions....

124,466
669,968

134,497
794,929

155,527
986,243

OUTSTANDING DEBT, END OF PERIOD:
Gross Federal debt
Held by Government agencies..
Held by the public
Federal Reserve System..
Other
BUDGET RECEIPTS
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts-.
Deposits of earnings by Federal
System
All other

517,112

599,272

617,766

600,562

670,071

745,127

244,069
64,600
157,803
24,329
6,389
7,174

285,917
61,137
182,720
40,839
6,787
8,083

297,744
49,207
201,498
36,311
7,991
8,854

288,938
37,022
208,994
35,300
6,053
8,655

293,260
66,606
239,494
38,195
5,922
9,064

328,410
76,540
270,683
38,443
5,645
9,370

11,767
981

12,834
956

15,186
975

14,492
1,109

14,352
3,179

14,799
1,238

576,675

657,204

728,375

795,969

853,760

925,492

133,995
10,882
5,726
6,312
13,856
4,857
7,788
21,132
10,072

157,513
11,250
6,358
10,277
13,565
5,533
3,953
23,395
9,395

185,308
10,105
7,080
4,681
12,995
14,889
3,867
20,570
7,166

209,901
8,995
7,745
3,999
12,669
22,206
4,422
21,385
6,936

237,546
13,502
8,291
3,463
12,302
10,693
3,805
26,123
7,594

272,040
17,492
8,818
3,144
11,346
14,319
1,127
27,061
7,586

30,795
23,148
150,648
118,559
32,089
86,411
21,185
4,582
4,133
8,584
52,511

31,424
26,858
178,733
139,584
39,149
99,243
22,991
4,762
4,405
6,856
68,734

26,329
27,435
202,531
155,964
46,567
107,022
23,958
4,703
4,448
6,393
84,995

26,606
28,655
223,311
170,724
52,588
122,156
24,846
5,099
4,784
6,454
89,774

28,683
30,665
240,225
179,161
61,064
112,462
25,799
6,021
5,652
6,741
108,239

-19,942

-28,041

-26,099

-33,976

-34,047

27,893
32,916
260,321
190,639
69,683
114,360
26,723
6,140
5,744
6,658
116,138
938
-35,273

-15,842

-17,903

-19,849

-23,484

-25,347

-27,873

-4,101

-10,138

-6,250

-10,491

-8,700

-7,400

Reserve

BUDGET OUTLAYS
National defense x
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and social services
Health
Social security and medicare 2
Social security
Medicare
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Net interest
Allowances
Undistributed offsetting receipts1
Composition of undistributed offsetting receipts-.
Employer share, employee retirement l
Rents and royalties on the Outer Continental
Shelf

Note.—Under provisions of the Congressional Budget Act of 1974, the fiscal year for the Federal Government shifted beginning with
fiscal year 1977. Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis. Beginning October 1976 (fiscal year 1977),
the fiscal year is on an October 1-September 30 basis.
Refunds of receipts are excluded from receipts and outlays.
See "Budget of the United States Government, Fiscal Year 1985" for additional information.
Sources: Department of the Treasury and Office of Management and Budget.




305

receipts and outlays,

TABLE B-7'3.—Federal

off-budget

outlays,

and debt, fiscal

years

1929-85
[Billions of dollars]
Budget
Fiscal year
Receipts

Outlays

Surplus or
deficit

Off-budget
outlays

Budget
and offbudget
surplus or
deficit

Gross Federal debt (end
of period)
Total

Held by
the public

1929

3.9

3.1

0.7

1933

2.0

4.6

-2.6

1939

5.0

8.8

3.9

48.2

41.4

1940
1941
1942
1943
1944

6.4
8.6
14.4
23.6
44.3

9.5
13.6
35.1
78.5
91.3

3.1
-5.0
20.8
-54.9
-47.0

50.7
57.5
79.2
142.6
204.1

42.8
48.2
67.8
127.8
184.8

1945
1946
1947
1948
1949

45 2
39.3
38.4
41.8
39.4

92 7
55.2
34.5
29.8
38.8

-47 5
15.9
3.9
12.0
.6

2601
271.0
257.1
252.0
252.6

235.2
241.9
224.3
216.3
214.3

1950
1951
1952
1953
1954

39.5
51.6
66.2
69.6
69.7

42.6
45.5
67.7
76.1
70.9

3.1
6.1
1.5
-6.5
1.2

256.9
255.3
259.1
266.0
270.8

219.0
214.3
214.8
218.4
224.5

1955
1956
1957
1958
1959

65 5
74.5
80.0
79 6
79.2

68 5
70.5
76.7
82 6
92.1

-30
4.1
3.2
29
-12.9

274.4
272.8
272.4
279 7
287.8

226.6
222.2
219.4
226.4
235.0

1960
1961
1962
1963
1964

92.5
94.4
99 7
106.6
112.7

92.2
97.8
106 8
111.3
118.6

.3
-3.4
71
-4.8
5.9

290.9
292.9
303.3
310.8
316.8

237.2
238.6
248.4
254.5
257.6

1965
1966
1967
1968
1969

116.8
130 9
148.9
153 0
186.9

118.4
134 7
157.6
1781
183.6

-1.6
38
-8.7
25 2
3.2

323.2
329.5
341.3
369 8
367.1

261.6
264.7
267.5
290 6
279.5

1970
1971 .
1972
1973
1974

192.8
187 1
207 3
230.8
263.2

195.7
210 2
230 7
245.6
267.9

2.8
23 0
23 4
-14.8
-4.7

284.9
304.3
323.8
343.0
346.1

Transition quarter

1975
1976

1977
1978
1979

2791
2981
81.2
355.6
399.6
463 3

324 2
364 5
94.2
400.5
448.4
4910

45 2
66 4
-13.0
-44.9
-48.8
-27 7

1980
1981
1982
1983
1984 2
1985

517.1
599 3
617.8
600 6
670.1
745.1

576.7
657 2
728.4
796 0
853.8
925.5

-59.6
57 9
-110.6
-195 4
-183.7
-180.4

. ...

1

0.1
1.4

-14.9
-6.1

382.6
409.5
437 3
468.4
486.2

8.1

1.8
8.7
10.4
12.5

-53.2
-73.7
14.7
-53.6
-59.2
-40.2

544.1
631.9
646.4
709.1
780.4
833.8

396.9
480.3
498.3
551.8
610.9
644.6

14.2
210
17.3
12.4
16.2
14.8

-73.8
-78 9
-127.9
-207.8
199.9
-195.2

914.3
1,003.9
1,147.0
1,381.9
1,591.6
1,828.4

715.1
794.4
929.4
1,141.8
1,324.8
1,517.8

73

Not strictly comparable with later data.
Estimates.
Note.—Under provisions of the Congressional Budget Act of 1974, the fiscal year for the Federal Government shifted beginning with
fiscal year 1977. Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October 1976 (fiscal year 1977),
the fiscal year is on an October 1-September 30 basis. The 3-month period from July 1, 1976 through September 30, 1976 is a
separate fiscal period known as the transition quarter.
Data for 1929-39 are according to the administrative budget and those beginning 1940 according to the unified budget.
Refunds of receipts are excluded from receipts and outlays.
See "Budget of the United States Government, Fiscal Year 1985" for additional information.
Sources: Department of the Treasury and Office of Management and Budget.
2




306

TABLE B-74.—Relation of Federal Government receipts and expenditures in the national income and
product accounts to the unified budget, fiscal years 1983-85
[Billions of dollars; fiscal years]
Estimate
Receipts and expenditures

1983

1984

1985

600.6

670.1

745.1

12.2
9.4
9.7
-1.4
.2

13.0
12.1
-2.2
-1.7

14.4
13.5
8.3
-1.9
.2

630.7

691.3

779.2

796.0

853.8

925.5

-5.7
12.2

-7.0
13.0
12.1

-4.8
14.4
13.5
-1.9

RECEIPTS
Total budget receipts..,
Government contribution for employee retirement (grossing)..
Other netting and grossing
Adjustment to accruals
Geographic exclusions
Othlr
Federal sector, national income and product accounts, receipts..
EXPENDITURES
Total budget outlays
Lending and financial transactions
Government contribution for employee retirement (grossing)..
Other netting and grossing
Defense timing adjustment
Bonuses on Outer Continental Shelf land leases
Geographic exclusions
Other
Federal sector, national income and product accounts, expenditures...

9.4
1.0
7.4

.6
5.1

4.0

-4.9

-5.1

1.0

3.0

2.4

816.4

875.5

947.8

-5.3

Note.—See Note, Table B-73.
See Special Analysis B, "Special Analyses, Budget of the United States Government, Fiscal Year 1985" for description of these
categories.
Sources: Department of Commerce (Bureau of Economic Analysis), Department of the Treasury, and Office of Management and
Budget.




307

TABLE B-75.—Government receipts and expenditures, national income and product accounts, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Total government

Federal Government

Surplus or
deficit

Calendar year or quarter
Receipts

Expenditures

national
income
and
product
accounts

Surplus or
deficit

10.3
10.7
17.6

1.0
-1.4
2.2

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

17.7
25.0
32.6
49.2
51.2
53.2
51.0
56.9
58.9
55.9

18.4
28 8
64.0
93.3
103.0
92.7
45.6
42.5
50.5
59.3

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

69.0
85.2
90.1
94.6
89.9
101.1
109.7
116.2
115 0
129.4

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.

Surplus or
deficit

(-),

Receipts

11.3
9.3
15.4

1929
1933
1939

State and loca
government

Expenditures

national
income
and
product
accounts

(-),

Receipts

Expenditures

national
income
and
product
accounts

02

3.8
2.7
6.7

2.6
4.0
8.9

1.2
-1.3
-2.2

7.6
7.2
9.6

7.8
7.2
9.6

-.1
.0

-3^8
-31.4
-44.1
-51.8
39.5
5.4
14.4
8.4
-3.4

8.6
15.4
22.9
39.3
41.0
42.5
39.1
43.2
43.2
38.7

10.0
20.5
56.1
85.8
95.5
84.6
35.6
29.8
34.9
41.3

-1.3
-5.1
33.1
-46.6
54.5
-42.1
3.5
13.4
8.3
-2.6

10.0
10 4
10.6
10.9
11.1
11.6
13.0
15.4
17.7
19.5

9.3
9.1
8.8
8.4
8.5
9.0
11.1
14.4
17.6
20.2

.6
13
1.8
2.5
2.7
2.6
1.9
1.0
.1
-.7

61.0
79.2
93.9
101.6
97.0
98.0
104.5
115.2
127 6
131.0

8.0
6.1
3.8
-6.9
-7.1
3.1
5.2
.9
-12 6
-1.6

50.0
64.3
67.3
70.0
63.7
72.6
78.0
81.9
78 7
89.8

40.8
57.8
71.1
77.1
69.8
68.1
71.9
79.6
88 9
91.0

9.2
6.5
3.7
-7.1
6.0
4.4
6.1
2.3
-10.3
1.1

21.3
23.4
25.4
27.4
29.0
31.7
35.0
38.5
42.0
46.4

22.5
23.9
25.5
27.3
30.2
32.9
35.9
39.8
44.3
46.9

-1.2
-.4
.0
.1
1.1
-1.3
-.9
1.4
-2.4

139.5
144 8
156.7
168.5
174.0
188.3
212.3
228.2
263 1
296.7

136.4
149 1
160.5
167.8
176.3
187.8
213.6
242.4
269 1
286.8

3.1
43
-3.8
.7
-2.3
.5
-1.3
14.2
60
9.9

96.1
981
106.2
114.4
114.9
124.3
141.8
150.5
174 4
196.9

93.1
1019
110.4
114.2
118.2
123.8
143.6
163.7
180 5
188.4

3.0
-39
-4.2
.3
-3.3
.5
-1.8
-13.2
60
8.4

49.9
54 0
58.5
63.2
69.5
75.1
84.8
93.6
107 3
120.2

49.8
54.4
58.0
62.8
68.5
75.1
84.3
94.7
107.2
118.7

.1
-.4
.5
.5
1.0
-.0
.5
-1.1
.1
1.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

302.8
322.6
368.3
413.1
455.2
470 5
538 4
605.4
681.9
765.1

313.4
342.0
371.6
405.3
460.0
534 3
574 9
623.3
681.1
750.8

-10.6
-19.4
-3.3
7.8
4.7
63 8
36 5
-17.8
.8
14.3

191.9
198.6
227.5
258.6
287.8
287 3
3318
375.2
431.6
493.6

204.3
220.6
244.3
264.2
299.3
356 6
384 8
421.1
461.0
509.7

12.4
-22.0
-16.8
-5.6
-11.5
69 3
45.9
-29.5
-16.1

135.4
153.0
178.3
195.0
211.4
237 7
267 8
297.7
327.6
352.0

133.5
150.4
164.8
181.6
204.6
232.2
251.2
269.7
297.3
321.5

1.9
2.6
13.5
13.4
6.8
5.5
16.6
28.0
30.3
30.4

1980
1981
1982
1983"

838.3
957.2
972.5
1,040.1

869.0
984.1
1,088.3
1,171.9

30.7
-26.9
-115.8
-131.8

540.9
627.0
617.4
643.3

602.1
689.2
764.4
826.2

-61.2
62.2
-147.1
-182.9

386.1
418.1
439.1
483.3

355.5
382.7
407.8
432.3

30.6
35.3
31.3
51.0

1981:
1
II
III
IV

938.2
948.1
974 0
968.4

946.3
958.7
9991
1,032.2

-8.1
-10.6
25 2
-63.7

617.4
622.6
638 8
629.2

660.8
669.9
7012
725.0

-43.4
-47.3
-62.4
95.8

411.3
415.9
421.6
423.4

376.0
379.2
384.3
391.4

35.3
36.7
37.3
32.0

1982:
1
II
III
IV

962.9
973 9
975.0
978.3

1,042.7
10551
1,101.9
1,153.7

-79.7
812
-127.0
-175.3

619.5
622 2
615.2
612.6

728.0
735 4
773.5
820.9

-108.5
-113.2
-158.3
-208.2

425.9
436.8
442.8
450.7

397.2
404.8
411.4
417.8

28.8
32.0
31.3
32.9

999 2
1,044.6
1,050.6

1142 1
1,159.0
1,182.4
1204 0

-142 9
-114.4
-131.8

623 3
652.6
645.2

806.6
818.7
832.5
847.0

-183.3
-166.1
187.3

461.7
478.7
492.7

421.3
427.0
437.1
443.5

40.4
51.7
55.5

1983:
1
II
Ill
IV P

_

j

531

-.4

Note.—Federal grants-in-aid to State and local governments are reflected in Federal expenditures and State and local receipts Total
government receipts and expenditures have been adjusted to eliminate this duplication.
Source: Department of Commerce, Bureau of Economic Analysis.




308

TABLE B-76.—Federal Government receipts and expenditures, national income and product accounts,
1959-85
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Expenditures

Receipts

Surplus
Subsior
dies
Grantsdeficit
less
in-aid to
PurNet current (-),
State
chases
inter- surplus national
and
of goods
income
est
of
To
local
and
To
and
paid governforeigngovernservices persons
product
ment
ers
ments
enter- accounts
Transfer
payments

Year or quarter
Total

CorpoPersonal
rate
tax and
profits
nontax
tax
receipts
accruals

ContriIndirect
butions
business
for
tax and
social
nontax
insuraccruals
ance

Total 1

prises
2

Fiscal year:
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984 3
1985 3
Calendar year:
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983 »
1982:
I
II
Ill
IV
1983:
I
II
Ill
IV *.

2.5
2.4
3.3
4.1
4.0
4.1
4.3
4.8
5.2
4.1
4.7
5.5
7.0
6.5
9.2
7.6
6.0
6.2
6.9
9.7
9.9
10.4
12.5
13.2
20.3
28.1
18.8

-5.8
3.4
-3.1
-2.2
-1.7
-1.5
1.4
.0
-8.9
-12.3
5.2
-.7
-20.5
-19.2
-14.9
-6.6
-45.4
-55.8
-45.3
-36.1
-14.8
-50.7
-57.8
-112.2
-185.7
-184.2
-168.6

85.4
94.8
95.0
104.0
110.0
115.6
120.0
132.7
146.0
159.9
189.8
194.8
192.4
213.4
240.7
271.6
283.4
314.9
365.9
414.3
480.8
525.9
610.3
627.8
630.7
691.3
779.2

38.2
42.5
43.6
47.3
49.6
50.7
51.4
57.5
64.4
71.4
90.2
94.0
87.9
100.5
107.4
122.7
127.5
137.2
166.4
186.5
222.6
250.4
289.3
310.4
295.3
302.1
340.8

21.4
22.3
20.0
22.7
23.3
25.7
27.1
30.8
30.3
33.1
36.8
32.9
31.9
34.2
41.2
43.4
41.8
52.5
58.9
67.3
76.1
69.9
70.5
51.3
54.3
74.8
93.5

12.0
13.2
13.3
14.2
15.0
15.6
16.9
15.5
15.8
17.1
18.6
19.2
20.0
19.9
20.7
21.4
22.2
24.3
24.5
27.2
29.1
35.5
53.6
50.3
50.7
56.6
55.4

13.9
16.7
18.1
19.9
22.1
23.6
24.5
28.9
35.5
38.3
44.2
48.8
52.6
58.9
71.5
84.2
91.9
101.0
116.2
133.3
153.1
170.0
196.9
215.7
230.4
257.8
289.5

91.2
91.3
98.1
106.2
111.7
117.2
118.5
132.7
154.9
172.2
184.6
195.5
212.9
232.7
255.7
278.2
328.8
370.7
411.2
450.4
495.6
576.5
668.1
740.0
816.4
875.5
947.8

54.8
52.9
55.8
61.0
63.7
65.9
64.6
72.4
86.0
95.0
98.0
97.1
94.9
100.6
101.1
104.5
117.9
125.1
139.8
150.4
164.1
189.3
218.5
251.0
274.7
292.6
340.0

19.9
20.6
23.6
25.1
26.5
27.4
28.4
31.8
37.2
42.7
48.7
55.0
67.7
76.1
87.2
101.8
131.4
153.8
166.6
178.7
197.8
234.6
273.5
304.1
338.5
347.0
367.8

1.8
1.8
2.1
2.1
2.1
2.2
2.2
2.3
2.2
2.1
2.2
2.0
2.3
2.8
2.7
3.0
3.1
3.0
3.2
3.5
4.1
4.8
5.8
6.1
6.2
7.4
8.5

5.6
6.2
6.8
6.9
6.4
6.9
6.4
7.6
7.1
8.3
7.7
9.8
8.2
10.9
8.7
12.7
9.6
14.8
17.8 10.4
19.2 11.9
22.6 13.5
26.8 14.0
32.6 14.0
40.4 15.7
41.6 19.6
48.4 21.7
57.5 25.2
66.3 28.4
74.7 33.5
79.1 40.6
86.7 50.7
90.1 67.7
83.4 82.2
85.7 90.6
91.8 108.6
95.6 117.1

89.8
96.1
98.1
106.2
114.4
114.9
124.3
141.8
150.5
174.4
196.9
191.9
198.6
227.5
258.6
287.8
287.3
331.8
375.2
431.6
493.6
540.9
627.0
617.4
643.3

39.9
43.6
44.7
48.6
51.5
48.6
53.9
61.7
67.5
79.7
95.1
92.6
90.3
108.2
114.7
131.3
125.8
147.3
170.1
194.9
230.6
257.7
298.6
304.7
295.8

22.5
21.4
21.5
22.5
24.6
26.1
28.9
31.4
30.0
36.1
36.1
30.6
33.5
36.6
43.3
45.1
43.6
54.6
61.6
71.3
74.2
70.3
67.5
46.5
59.3

12.5
13.4
13.6
14.6
15.3
16.2
16.5
15.6
16.3
18.0
19.0
19.3
20.4
20.0
21.2
21.7
23.9
23.4
25.0
28.1
29.4
39.0
56.4
48.3
53.9

14.9
17.6
18.3
20.5
23.1
24.0
25.0
33.1
36.7
40.7
46.7
49.3
54.4
62.7
79.5
89.8
94.1
106.5
118.5
137.2
159.5
173.9
204.5
217.9
234.4

91.0
93.1
101.9
110.4
114.2
118.2
123.8
143.6
163.7
180.5
188.4
204.3
220.6
244.3
264.2
299.3
356.6
384.8
421.1
461.0
509.7
602.1
689.2
764.4
826.2

53.9
53.7
57.4
63.7
64.6
65.2
67.3
78.8
90.9
98.0
97.6
95.7
96.2
101.7
102.0
111.0
122.7
129.2
143.4
153.6
168.3
197.0
229.2
258.7
275.2

20.1
21.6
25.0
25.6
27.0
27.9
30.3
33.5
40.1
46.0
50.6
61.3
72.7
80.5
93.3
114.5
146.3
158.8
169.6
181.8
205.0
246.2
280.9
314.8
338.7

1.8
1.9
2.1
2.2
2.2
2.2
2.2
2.3
2.2
2.1
2.1
2.2
2.6
2.7
2.6
3.2
3.1
3.2
3.3
3.8
4.2
5.3
5.7
6.3
5.8

6.8
6.5
7.2
8.0
9.1
10.4
11.1
14.4
15.9
18.6
20.3
24.4
29.0
37.5
40.6
43.9
54.6
61.1
67.5
77.3
80.5
88.7
87.9
83.9
86.5

6.2
6.8
6.2
6.8
7.3
8.0
8.4
9.2
9.8
11.3
12.7
14.1
13.8
14.4
18.0
20.7
23.1
26.8
29.1
35.2
42.4
53.4
73.2
84.9
96.7

-1.1
2.1
3.0
2.6
-3.9
4.0
-4.2
4.2
3.9
4.5
-3.3
4.6
.5
5.5
-1.8
4.7
-13.2
4.5
-6.0
5.2
8.4
6.5
-12.4
6.3
-22.0
7.9
-16.8
7.8
-5.6
5.5
-11.5
6.9
-69.3
5.8
-53.1
8.2
-45.9
9.5
-29.5
9.2
-16.1
11.5 - 6 1 . 2
12.4 - 6 2 . 2
15.8 - 1 4 7 . 1
22.8 -182.9

619.5
622.2
615.2
612.6

306.5
308.5
300.6
303.0

47.6
48.4
47.8
42.1

49.5
47.7
47.9
48.3

215.8
217.6
218.9
219.3

728.0
735.4
773.5
820.9

249.7
244.1
261.7
279.2

296.5
305.3
320.1
337.;

6.0
5.9
5.8
7.6

82.5
85.1
83.0
85.0

79.7
82.3
88.6
89.1

13.4
12.7
14.2
22.8

623.3
652.6
645.2

297.7
304.2
286.9
294.3

48.6
59.8
66.6

48.6
56.0
55.5
55.3

228.5
232.6
236.2
240.2

806.6
818.7
832.5
847.0

273.5
273.7
278.1
275.6

335.3
341.0
337.5
340.9

5.0
6.0
6.0
6.4

85.8 88.4
86.7 91.8
87.2 101.0
86.5 105.7

1

-108.5
-113.2
-158.3
-208.2

18.6 - 1 8 3 . 3
18.2 - 1 6 6 . 1
22.3 - 1 8 7 . 3
31.9

Includes an item for the difference between wage accruals and disbursements, not shown separately.
Under provisions of the Congressional Budget Act of 1974, the fiscal year for the Federal Government shifted beginning with fiscal
year 1977. Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October 1976 (fiscal year 1977), the
fiscal year is on an October 1-September 30 basis. The 3-month period from July 1, 1976 through September 30, 1 9 / 6 is a separate
fiscal period known as the transition quarter.
3
Estimates.
Sources: Department of Commerce (Bureau of Economic Analysis) and Office of Management and Budget.
2




309

TABLE B-77.—State and local government receipts and expenditures, national income and product accounts,
1946-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Expenditures

Receipts

Calendar year
or quarter

Total

Indirect
Personal Corpo- business Contribu- Federal
rate
tax and profits tax and tions for grants-insocial
nontax
nontax
tax
aid
receipts accruals accruals insurance

Total»

Purchases
of
goods
and
services

Subsi- Surplus
or
dies
deficit
Trans- Net
iess
fer interest current (-),
national
paid
payments less surplus income
of
divi- govern- and
to
per- dends ment product
sons received enter- accounts
prises

1946
1947
1948
1949

13.0
15 4
17.7
19.5

1.5
17
2.1
2.4

0.5
6
.7
.6

9.3
10 7
12.2
13.3

0.6
7
.8
.9

1.1
1.7
2.0
2.2

11.1
14.4
17.6
20.2

9.9
12.8
15.3
18.0

1.7
2.3
3.0
3.0

0.2
.1
.1
.1

07
-.8
8
-.9

1.9
1.0
.1
-.7

1950
1951
1952
1953 .
1954

21.3
23 4
25.4
27 4
29.0

2.5
28
3.0
32
3.5

.8
9
.8
8
.8

14.6
15 9
17.4
18 8
19.9

1.1
14
1.6
17
2.0

2.3
25
2.6
28
2.9

22.5
23 9
25.5
27 3
30.2

19.8
218
23.2
25 0
27.8

3.6
31
3.3
35
3.6

.1
0
.0
0
.1

-.9
-10
-1.1
-1.2
-1.3

-1.2
_4
-.0
.1
-1.1

1955
1956..
1957
1958..
1959

31.7
35 0
38.5
42.0
46.4

3.9
45
5.0
5.4
6.1

1.0
10
1.0
1.0
1.2

21.6
23 8
25.7
27.2
29.3

2.1
23
2.6
2.8
3.1

3.1
3.3
4.2
5.6
6.8

32.9
35 9
39.8
44.3
46.9

30.6
33 5
37.1
41.1
43.7

3.8
39
4.3
4.8
5.1

.1
.1
.1
.1
.1

15
-1.6
-1.7
-1.7
-2.0

13
-.9
14
-2.4
-.4

1960
1961..
1962
1963
1964

49.9
54.0
58.5
63.2
69.5

6.7
7.4
8.2
8.8
10.0

1.2
1.3
1.5
1.7
1.8

32.0
34.4
37.0
39.4
42.6

3.4
3.7
3.9
4.2
4.7

6.5
7.2
8.0
9.1
10.4

49.8
54.4
58.0
62.8
68.5

46.5
50.8
54.3
59.0
64.6

5.4
5.8
6.0
6.4
6.9

.1
.1
.1
.1
1

-2.2
-2.3
-2.5
-2.8
-2.8

.1
-.4
.5
.5
1.0

1965.
1966.
1967
1968..
1969

751
84 8
93.6
107.3
120.2

10 9
12 8
14.6
17.5
20.6

20
22
2.5
3.1
3.4

461
49 7
54.0
60.9
67.6

50
57
6.7
7.2
8.3

111
14 4
15.9
18.6
20.3

751
84 3
94.7
107.2
118.7

711
79 8
89.3
101.0
111.2

73
81
9.4
10.5
12.2

_ 3
7
-.9
-1.1
14

-3.0
-3.0
-3.1
-3.2
-3.3

-.0
.5
-1.1
.1
1.5

1970
1971.
1972
1973
1974

135.4
153 0
178.3
195.0
211.4

23.2
26 4
32.8
36.0
39.0

3.5
41
5.0
5.8
6.5

75.0
83 3
91.5
99.7
107.4

9.2
10 2
11.5
13.0
14.6

24.4
29 0
37.5
40.6
43.9

133.5
150 4
164.8
181.6
204.6

124.4
138 7
151.4
168.5
193.1

14.7
17 3
19.3
20.7
20.9

-2.0
-17
-1.9
-3.3
50

-3.6
-3.7
-4.2
-4.3
-4.4

1.9
2.6
13.5
13.4
6.8

1975
1976.
1977.
1978
1979

237.7
267.8
297 7
327.6
352.0

43.1
49.6
56 3
63.8
70.4

7.1
9.3
111
11.9
13.4

116.2
128.3
140 7
150.0
160.2

16.8
19.5
22 1
24.7
27.4

54.6
61.1
67 5
77.3
80.5

232.2
251.2
269 7
297.3
321.5

217.2
232.9
250 4
278.3
306.0

24.6
27.6
29 7
32.8
35.0

-5.1
-4.5
53
-7.9
-13.8

-4.5
-4.8
-5 1
-5.7
-5.9

5.5
16.6
28.0
30.3
30.4

1980
1981
1982..
1983 P

386.1
418.1
439.1
483.3

78.8
88.7
97.4
110.5

14.5
15.3
12.7
16.4

174.4
193.5
210.0
232.0

29.7
32.6
35.1
37.9

88.7
87.9
83.9
86.5

355.5
382.7
407.8
432.3

340.8
366.5
390.5
415.0

39.7
43.3
45.6
49.3

-18.9
-21.1
-22.1
-25.5

-6.1
-6.0
-6.3
-6.5

30.6
35.3
31.3
51.0

1981:
1...
||
III
I
V

4113
415.9
421.6
423.4

85 0
87.4
90.3
92.3

16 7
14.9
15.5
14.2

187 3
190.9
196.6
199.3

317
32.3
32.8
33.4

90 5
90.4
86.4
84.2

376 0
379.2
384.3
391.4

360 5
363.2
367.9
374.3

42 5
43.2
43.7
44.0

-21.0
213
-21.3
-21.0

-6.0
-5.9
-5.9
-6.0

35.3
36.7
37.3
32.0

1982:
I
II
III.
IV

425 9
436.8
442 8
450.7

93 7
95.6
99 3
101.2

12 7
13.1
13 0
11.9

203 0
208.3
212 0
216.6

34 0
34.7
35 4
36.1

82 5
85.1
83.0
85.0

397 2
404.8
4114
417.8

380 0
387.5
394 0
400.5

44 4
45.0
46.0
47.1

-210
-21.4
-22.3
-23.6

-6.2
-6.3
-6.3
-6.2

28.8
32.0
31.3
32.9

1983:
1
||
III
IV P

461.7
478 7
492.7

104.1
108 4
113.3
1164

12.9
16 2
18.4

222.0
229 9
235.6
240.4

36.9
37 5
38.2
38.9

85.8
86.7
87.2
86.5

421.3
427 0
437.1
443.5

404.0
409 7
420.2
426.1

48.3
49.0
49.4
50.5

-24.6
-25.2
-25.8
-26.4

-6.3
-6.4
-6.5
-6.7

40.4
51.7
55.5

1
Includes an item for the difference between wage accruals and disbursements, not shown separately.
Source: Department of Commerce, Bureau of Economic Analysis.




310

TABLE B-78.—State and local government revenues and expenditures, selected fiscal years,

1927-82

[Millions of dollars]

General revenues by source 2

Fiscal year 1
Total

Property
taxes

Sales
and
gross
receipts
taxes

Individual
income
taxes

Corporation
net
income
taxes

General expenditures by function 2

Revenue
from
All
Federal
other 3
Government

Total

Education

Highways

Public
welfare

All
other4

1927

7,271

4,730

470

92

116

1,793

7,210

2,235

1,809

151

3,015

1932
1934
1936
1938

7,267
7,678
8,395
9,228

4,487
4,076
4,093
4,440

752
1,008
1,484
1,794

153
218

79
49
113
165

232
1,016
948
800

1,643
1,449
1,604
1,811

7,765
7,181
7,644
8,757

2,311
1,831
2,177
2,491

1,741
1,509
1,425
1,650

444
889
827
1,069

3,269
2,952
3,215
3,547

1940
1942
1944
1946
1948

9,609
10,418
10,908
12,356
17,250

4,430
4,537
4,604
4,986
6,126

1,982
2,351
2,289
2,986
4,442

224
276
342
422
543

156
272
451
447
592

945
858
954
855
1,861

1,872
2,123
2,269
2,661
3,685

9,229
9,190
8,863
11,028
17,684

2,638
2,586
2,793
3,356
5,379

1,573
1,490
1,200
1,672
3,036

1,156
1,225
1,133
1,409
2,099

3,862
3,889
3,737
4,591
7,170

1950
1952
1953
1954

20,911
25,181
27,307
29,012

7,349
8,652
9,375
9,967

5,154
6,357
6,927
7,276

788
998
1,065
1,127

593
846
817
778

2,486
2,566
2,870
2,966

4,541
5,763
6,252
6,897

22,787
26,098
27,910
30,701

7,177
8,318
9,390
10,557

3,803
4,650
4,987
5,527

2,940
2,788
2,914
3,060

8,867
10,342
10,619
11,557

1955
1956
1957
1958
1959

31,073
34,667
38,164
41,219
45,306

10,735 7,643
11,749 8,691
12,864 9,467
14,047 9,829
14,983 10,437

1,237
1,538
1,754
1,759
1,994

744
890
984
1,018
1,001

3,131 7,584
3,335 8,465
3,843 9,252
4,865 9,699
6,377 10,516

33,724
36,711
40,375
44,851
48,887

11,907
13,220
14,134
15,919
17,283

6,452
6,953
7,816
8,567
9,592

3,168
3,139
3,485
3,818
4,136

12,197
13,399
14,940
16,547
17,876

1960
1961
1962
1963

50,505 16,405
54,037 18,002
58,252 19,054
62,890 20,089

11,849
12,463
13,494
14,456

2,463
2,613
3,037
3,269

1,180
1,266
1,308
1,505

6,974
7,131
7,871
8,722

11,634
12,563
13,489
14,850

51,876
56,201
60,206
64,816

18,719
20,574
22,216
23,776

9,428
9,844
10,357
11,136

4,404
4,720
5,084
5,481

19,325
21,063
22,549
24,423

1962-63..
1963-64..
1964-65..

62,269 19,833 14,446
68,443 21,241 15,762
74,000 22,583 17,118

3,267
3,791
4,090

1,505
1,695
1,929

8,663 14,556
10,002 15,951
11,029 17,250

63,977
69,302
74,678

23,729
26,286
28,563

11,150
11,664
12,221

5,420
5,766
6,315

23,678
25,586
27,579

1965-66..
1966-67..
1967-68..
1968-69..
1969-70..

83,036
91,197
101,264
114,550
130,756

19,085
20,530
22,911
26,519
30,322

4,760
5,825
7,308
8,908
10,812

2,038
2,227
2,518
3,180
3,738

13,214
15,370
17,181
19,153
21,857

19,269
21,197
23,598
26,118
29,971

82,843
93,350
102,411
116,728
131,332

33,287
37,919
41,158
47,238
52,718

12,770
13,932
14,481
15,417
16,427

6,757
8,218
9,857
12,110
14,679

30,029
33,281
36,915
41,963
47,508

1970-71..
1971-72...
1972-73..
1973-74..
1974-75..

144,927 37,852 33,233
167,541 42,877 37,518
190,214 45,283 42,047
207,670 47,705 46,098
228,171 51,491 49,815

11,900
15,227
17,994
19,491
21,454

3,424
4,416
5,425
6,015
6,642

26,146
31,342
39,256
41,820
47,034

32,374
36,162
40,210
46,541
51,735

150,674
168,550
181,357
198,959
230,721

59,413
65,814
69,714
75,833
87,858

18,095
19,021
18,615
19,946
22,528

18,226
21,117
23,582
25,085
28,155

54,940
62,597
69,446
78,096
92,180

1975-76..
1976-77..
1977-78..
1978-79..
1979-80..
1980-81..
1981-82..

256,176
285,157
315,960
343,278
382,322
423,404
456,182

54,547
60,641
67,596
74,247
79,927
85,971
93,636

24,575
29,246
33,176
36,932
42,080
46,426
50,785

7,273
9,174
10,738
12,128
13,321
14,143
15,033

55,589
62,444
69,592
75,164
83,029
90,294
86,945

57,191
61,124
68,436
79,864
95,466
111,599
127,864

256,731
274,215
296,983
327,517
369,086
407,449
435,323

97,216
102,780
110,758
119,448
133,211
145,784
154,573

23,907
23,058
24,609
28,440
33,311

32,604
35,906
39,140
41,898
47,288

103,004
112,472
122,476
137,731
155,277

34,603
34,545

54,121
58,050

172,941
188,155

24,670
26,047
27,747
30,673
34,054

57,001
62,527
66,422
64,944
68,499
74,969
81,918

1

Fiscal years not the same for all governments. See Note.
Excludes revenues or expenditures of publicly owned utilities and liquor stores, and of insurance-trust activities. Intergovernmental
receipts and payments between State and local governments are also excluded.
3
Includes licenses and other taxes and charges and miscellaneous revenues.
4
Includes expenditures for hospitals, health, social insurance administration, veterans' services, air transportation, water transport
and terminals, parking facilities, police protection, fire protection, correction, protective inspection and regulation, sewerage, natural
resources, parks and recreation, housing and urban renewal, sanitation other than sewerage, general control, financial administration,
general public buildings, interest on general debt and unallocable items.
Note.—Data for fiscal years listed from 1962-63 to 1981-82 are the aggregations of data for government fiscal years which ended
in the 12-month period from July 1 to June 30 of those years. Data for 1963 and earlier years include data for government fiscal years
ending during that particular calendar year.
2

Data are not available for intervening years.
Source: Department of Commerce, Bureau of the Census.




311

TABLE B-79.—Interest-bearing public debt securities by kind of obligation, 1967-83
[Millions of dollars]
Nonmarketabfe

Marketable

End of year
or month

Total
interestbearing
public
debt
securities

Fiscal year:

Total

4

Treasury
bills

Treasury
notes

Treasury
bonds*

Total

U.S.
savings
bonds

Foreign
government
and
public
series3

Government
account
series

Other 3

210,672
226,592
226,107

58,535
64,440
68,356

49,108
71,073
78,946

97,418
91,079
78,805

111,614
117,808
125,623

51,213
51,712
51,711

1,514
3,741
4,070

56,155
59,526
66,790

2,731
2,828
3,051

369,026
396,289
425,360
456,353
473,238

232,599
245,473
257,202
262,971
266,575

76,154
86,677
94,648
100,061
105,019

93,489
104,807
113,419
117,840
128,419

62,956
53,989
49,135
45,071
33,137

136,426
150,816
168,158
193,382
206,663

51,281
53,003
55,921
59,418
61,921

4,755
9,270
18,985
28,524
25,011

76,323
82,784
89,598
101,738
115,442

4,068
5,759
3,654
3,701
4,289

1975
1976
1977
1978
1979

532,122
619,254
697,629
766,971
819,007

315,606
392,581
443,508.
485,155
506,693

128,569
161,198
156,091
160,936
161,378

150,257
191,758
241,692
267,865
274,242

36,779
39,626
45,724
56,355
71,073

216,516
226,673
254,121
281,816
312,314

65,482
69,733
75,411
79,798
80,440

23,216
21,500
21,799
21,680
28,115

124,173
130,557
140,113
153,271
176,360

3,644
4,883
16,797
27,067
27,400

1980
1981
1982
1983

906,402
996,495
1,140,883
1,375,751

594,506
683,209
1,024,000

199,832
223,388
277,900
340,733

310,903
363,643
442,890
557,525

83,772
96,178
103,631
125,742

311,896
313,286
316,461
351,751

72,727
68,017
67,274
70,024

25,158
20,499
14,641
11,450

189,848
201,052
210,462
234,684

24,164
23,718
24,085
35,593

May"!;."!!!!!;;;!;
June

1,032,678
1,042,198
1,059,815
1,064,538
1,066,410
1,078,431

726,542
737,532
752,620
755,833
755,688
763,995

250,562
254,037
256,212
254,880
256,114
256,007

374,357
382,070
395,042
399,700
398,408
406,925

101,623
101,426
101,366
101,253
101,166
101,063

306,136
304,666
307,195
308,705
310,722
314,436

67,581
67,378
67,163
67,034
67,082
67,122

18,920
18,384
19,641
19,446
18,395
17,457

196,393
195,722
196,707
198,538
201,290
205,954

23,243
23,182
23,684
23,687
23,955
23,902

July
Aug
Sept
Oct
Nov
Dec

1,083,296
1,108,131
1,140,883
1,136,826
1,160,489
1,195,496

774,077
801,427
824,422
824,662
852,463
881,476

262,009
273,066
277,900
283,923
293,531
311,820

411,070
427,426
442,890
438,068
454,229
465,030

100,998
100,935
103,631
102,672
104,702
104,627

309,218
306,704
316,461
312,164
308,026
314,020

67,132
67,148
67,274
67,514
67,801
67,719

16,643
15,606
14,641
14,627
14,863
14,691

201,502
199,896
210,462
205,717
199,903
205,427

23,941
24,054
24,085
24,305
25,459
26,183

Jan
Feb
Mar
Apr
May
June

1,199,599
1,213,742
1,242,993
1,242,067
1,289,897
1,318,111

888,659
907,652
937,751
935,478
957,347
978,929

308,099
314,882
331,884
325,939
325,213
334,299

472,986
481,300
494,431
494,904
513,626
527,142

107,574
111,471
111,436
114,635
118,508
117,488

310,940
306,090
305,243
306,589
332,550
339,182

67,814
68,042
68,241
68,533
68;919
69,140

14,018
12,685
12,392
11,963
11,144
11,405

203,031
199,125
196,970
197,593
222,446
225,041

26,077
26,239
27,640
28,500
30,041
33,596

July
Aug
Sept
Oct
Nov
Dec

1,320,671
1,346,915
1,375,751
1,383,265
1,387,860
1,400,906

985,709
1,010,371
1,024,000
1,035,330
1,044,313
1,050,892

337,581
340,413
340,733
339,969
335,310
343,815

527,183
544,158
557,525
566,159
575,252
573,376

120,946
125,800
125,742
129,202
133,751
133,701

334,961
336,544
351,751
347,935
343,547
350,015

69,466
69,747
70,024
70,351
70,619
70,466

11,193
11,052
11,450
11,500
10,512
10,448

220,607
221,357
234,684
230,324
226,214
231,887

33,696
34,389
35,593
35,760
36,202
37,214

1967
1968
1969

322,286
344,401
351,729

1970
1971
1972
1973
1974

824,422

1982:
Jan
Feb
Mar

1983:

1

Includes Treasury bonds and minor amounts of Panama Canal and postal savings bonds.
Nonmarketable certificates of indebtedness, notes, bonds, and bills in the Treasury foreign series of dollar-denominated and foreigncurrency denominated issues.
3
Includes depository bonds, retirement plan bonds, Rural Electrification Administration bonds, State and local bonds, and special
issues held only by U.S. Government agencies and trust funds and the Federal home loan banks.
4
Includes $5,610 million in certificates not shown separately.
2

Note.—Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October 1976 (fiscal year 1977), the fiscal
year is on an October 1-September 30 basis.
Source-. Department of the Treasury.




312

TABLE B-80.—Maturity distribution and average length of marketable interest-bearing public debt securities
held by private investors, 1967-83

End of year or month

Amount
outstanding,
privately
held

Maturity class

Average length
Within
lyear

Ito5
years

5 to 10
years

10 to 20
years

20 years
and over

Millions of dollars
Fiscal year:
1967
1968
1969.

Months

Years

150,321
159,671
156,008

56,561
66,746
69,311

53,584
52,295
50,182

21,057
21,850
18,078

6,153
6,110
6,097

12,968
12,670
12,337

4
4

5

1
5
2

1970
1971
1972
1973
1974

157,910
161,863
165,978
167,869
164,862

76,443
74,803
79,509
84,041
87,150

57,035
58,557
57,157
54,139
50,103

8,286
14,503
16,033
16,385
14,197

7,876
6,357
6,358
8,741
9,930

8,272
7,645
6,922
4,564
3,481

3
3
3
3
2

8
6
3
1
11

1975
1976
1977
1978
1979

210,382
279,782
326,674
356,501
380,530

115,677
151,723
161,329
163,819
181,883

65,852
89,151
113,319
132,993
127,574

15,385
24,169
33,067
33,500
32,279

8,857
8,087
8,428
11,383
18,489

4,611
6,652
10,531
14,805
20,304

2
2
2
3
3

8
7
11
3
7

1980
1981
1982
1983

463,717
549,863
682,043
862,631

220,084
256,187
314,436
379,579

156,244
182,237
221,783
294,955

38,809
48,743
75,749
99,174

25,901
32,569
33,017
40,826

22,679
30,127
37,058
48,097

3
4
3
4

9
0
11
1

1982:
Jan
Feb
Mar
Apr
May
June

590,139
604,671
619,030
613,576
618,699
628,997

284,171
290,697
295,476
289,000
290,476
293,266

183,843
194,457
200,544
199,278
203,612
207,106

54,370
49,120
52,612
55,329
54361
58,425

34,069
35,819
35,822
35,565
35,701
35,651

33,686
34,578
34,576
34,404
34,549
34,549

4
4
4
4
4
4

0
1
0
0
1
0

July
Aug
Sept
Oct
Nov
Dec

634,556
660,583
682,043
685,969
708,769
736,148

295,118
309,446
314,436
321,081
327,565
346,321

206,380
217,258
221,783
218,673
235,443
239,263

63,022
66,347
75,749
75,944
72,644
77,569

35,583
33,097
33,017
33,065
35,750
35,677

34,453
34,435
37,058
37,206
37,367
37,318

4
3
3
3
3
3

0
11
11
10
11
10

1983:
Jan
Feb
Mar
Apr
May
June

750,274
766,075
795,087
789,629
810,150
831,309

348,444
351,150
367,383
360,536
363,465
373,669

245,990
256,133
262,985
259,420
276,825
282,444

79,758
81,077
87,013
88,958
85,314
90,979

35,708
36,846
36,837
36,797
39,975
39,949

40,374
40,869
40,869
43,918
44,571
44,268

4
4
3
3
4
4

0
0
10
11
1
0

July
Aug
Sept
Oct
Nov
Dec

835,893
857,935
862,631
883,287
888,932
893,991

375,845
380,424
379,579
384,406
383,761
394,088

279,730
294,000
294,955
303,810
309,516
298,262

92,420
93,974
99,174
101,941
99,893
106,043

39,850
41,086
40,826
41,073
43,082
43,058

48,048
48,451
48,097
52,057
52,680
52,540

4

0
1
1
1
3
3

4

4
4
4
4

Note.—All issues classified to final maturity.
Through fiscal year 1976, the fiscal year was on a July 1—June 30 basis; beginning October 1976 (fiscal year 1977), the fiscal year
is on an October 1—September 30 basis.
Source: Department of the Treasury.




313

TABLE B-81.—Estimated ownership of public debt securities, 1976-83
[Par values; * billions of dollars]
Held by private investors
End of month

Total
Held
public Held by
debt Govern- Federal
Comment
securi- accounts Reserve Total mercial
banks^ Total
ties
Banks

Nonbank investors
Individuals 3
Total

Savbonds

4

State Foreign
Insur- Money
and
ance
and
5
Other com- mar- Corpora- local internaket
secur- panies funds tions govern- tional7
6
ments
rities

Other
investors 8

1976:
June
Dec

620.4
653.5

149.6
147.1

94.4 376.4
97.0 409.5

91.4 285.0
103.5 306.0

96.1
101.6

69.6
72.0

26.5
29.6

14.4
16.2

0.8
1.1

23.3
23.5

33.3
39.2

69.8
78.1

47.2
46.3

1977:
June
Dec

674.4
718.9

151.2
154.8

102.2 421.0
102.8 461.3

102.7 318.3
98.9 362.4

104.9
107.8

74.4
76.7

30.5
31.1

18.1
19.9

.8
.9

22.1
18.2

45.8
50.9

87.9
109.6

38.7
55.1

1978:
June
Dec

749.0
789.2

161.1
170.0

110.1 477.8
110.6 508.6

97.8 380.0
95.0 413.6

109.0
114.0

79.1
80.7

29.9
33.3

19.7
20.0

1.3
1.5

17.3
17.3

58.1
62.8

119.5
137.8

55.1
60.2

1979:
June
Dec

804.9
845.1

178.5
187.1

109.7 516.6
117.5 540.5

86.1 430.5
88.1 452.4

115.5
118.0

80.6
79.9

34.9
38.1

20.9
21.4

3.8
5.6

18.6
17.0

68.9
71.8

119.7
123.7

83.1
94.9

1980:
June
Dec

877.6
930.2

194.9
192.5

124.5 558.2
121.3 616.4

97.4 460.8
112.1 504.3

116.5
117.1

73.4
72.5

43.1
44.6

22.3
24.0

5.3
3.5

14.0
19.3

75.9
84.4

122.8
134.3

104.0
121.7

1981:
Mar
June
Sept
Dec

964.5
971.2
997.9
1,028.7

190.9
199.9
208.1
203.3

119.0
120.0
124.3
131.0

654.6
651.2
665.4
694.5

117.0 537.6
119.7 531.5
112.7 552.7
111.4 583.1

105.2
107.4
109.7
110.8

70.4
69.2
68.3
68.1

34.8
38.2
41.4
42.7

25.6
26.4
27.6
29.0

14.5
9.0
11.4
21.5

17.0
19.9
18.0
17.9

88.5
93.3
"95.7
"99.5

1982:
Mar
June
Sept
Dec

1,061.3
1,079.6
1,142.0
1,197.1

202.5
211.7
216.4
209.4

125.6
127.0
134.4
139.3

733.3
740.9
791.2
848.4

116.1
116.1
117.8
131.4

617.2
624.8
673.4
717.0

112.5
114.1
115.6
116.5

67.5
67.4
67.6
68.3

45.0
46.7
48.0
48.2

32.1
32.5
34.8
39.1

25.7
22.4
38.6
42.6

16.9
17.6
21.6
24.5

"102.9
'107.3
"112.1
'113.4

1983:
Mar
June
Sept

1,244.5
1,319.6
1,377.2

201.2
229.3
239.0

136.7 906.6
141.7 948.6
155.4 982.7

68.8 47.9 "42.4
69.7 51.6 "44.8
"70.6 "57.9

44.8
28.3
24.0

27.2
32.8
"35.5

153.2 753.4 116.7
171.6 777.0 121.3
176.3 806.4 "128.5

1
2

142.9 143.9
141.4 134.1
135.5 "154.8
141.4 "163.0
140.8
141.9
141.6
149.4

"186.3
"189.0
"209.1
"231.5

156.1
160.0
"160.8

U.S. savings bonds, series A-F and J, are included at current redemption value.
Includes domestically chartered banks, U.S. branches and agencies of foreign banks, New York investment companies majority owned by foreign banks,
and3 Edge Act corporations owned by domestically chartered and foreign banks.
Includes partnerships and personal trust accounts.
4
Includes U.S. savings notes. Sales began May 1, 1967, and were discontinued June 30,1970.
5
Exclusive of banks and insurance companies.
6
Includes State and local pension funds.
7
Consists of the investment of foreign balances and international accounts in the United States.
8
Includes savings and loan associations, credit unions, nonprofit institutions, mutual savings banks, corporate pension trust funds, dealers and brokers,
certain Government deposit accounts, and Government-sponsored agencies.
Source: Department of the Treasury.




314

CORPORATE PROFITS AND FINANCE
TABLE B-82.—Corporate profits with inventory valuation and capital consumption adjustments, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits after tax with inventory
valuation and capital consumption adjustments

Corporate
Year or quarter

1929
1933
1939

profits with
inventory
valuation
and capital
consumption
adjustments

Corporate
profits tax
liability

9.0
17

1.4
5

53

1.4

Dividends

Undistributed
profits with
inventory
valuation
and capital
consumption
adjustments

7.7
-2 3

5.8
20

1.9
4.3
.1
1.8
2.1
3.6
5.0
6.1

Total

3.9

3.8

1940
1941
1942
1943
1944

14.1
19.3
23 5
23.6

2.8
7.6

5.8
6.5

4.0
4.4

11.4
14.1
12.9

7.9
9.5
10.7

4.3
4.4

1945
1946
1947
1948
1949

19 0
16.6
22.3
29 4
27.1

10.7
9.1
11.3
12.4
10.2

8.4

4.6

7.5
11.0
17.0
16.9

5.6
6.3
7.0
7.2

1950
1951
1952
1953
1954

33.9
38 7
36.1
36.3
35.2

17.9
22 6
19.4
20.3
17.6

16.0
161
16.7
16.0
17.5

8.8
85
8.5
8.8
9.1

7.2
7.6
8.2

1955
1956
1957
1958
1959

45.5
43.7
43.3
38.5
49.6

22.0
22.0
21.4
19.0
23.6

23.4
21.8
21.8
19.5
26.0

10.3
11.1
11.5
11.3
12.2

13.1
10.7
10.3
8.2
13.8

I960
1961
1962
1963
1964

47.6
48.6
56.6
62.1
69.2

22.7
22.8
24.0
26.2
28.0

24.9
25.8
32.6
35.9
41.2

12.9
13.3
14.4
15.5
17.3

12.1
12.5
18.2
20.4
23.9

1965
1966
1967
1968
1969

80.0
851
82.4
891
85.1

30.9
33 7
32.5
39 2
39.5

49.1
514
49.9
50 0
45.6

19.1
19 4
20.2
22 0
22.5

30.0
32.0
29.7
27.9
23.1

1970
1971
1972
1973
1974

71.4
83 2
96 6
108.3
94.9

34.2
37 5
49.0
51.6

37.2
45 7
55 0
59.3
43.3

22.5
22.9
24 4
27.0
29.9

14.8
22.8
30.5
32.3
13.4

1975
1976
1977
1978
1979

110.5
1381
167.3
192.4
194.8

50.6
63 8
72.7
83.2
87.6

59.9
74 3
94.6
109.1
107.2

30.8
37 4
40.8
47.0
52.7

29.1
36.9
53.7
62.2
54.5

1980
1981
1982
1983"

175.4
192.3
164.8
226.3

84.8
82.8
59.2
75.7

90.6
109.5
105.6
150.6

58.6
64.7
68.7
73.3

32.1
44.8
37.0
77.4

1981:
1
II
Ill
IV

194.7
185.0
197.6
192.0

91.7
80.4
83.7
75.6

103.1
104.6
113.8
116.5

61.3
63.7
66.4
67.3

41.8
40.9
47.5
49.2

1982:
1
II
III
IV . ..

162.0
166.8
168.5
161.9

60.3
61.4
60.8
54.0

101.7
105.3
107.6
107.9

67.7
67.8
68.8
70.4

34.0
37.5
38.9
37.5

181.8
218.2
248.4

61.5
76.0
84.9

120.3
142.2
163.4

71.4
72.0
73.7

48.9
70.1
89.7

86

416

4.6

3.8
1.9
4.7
10.0

9.7

7.2
8.4

1983:
II
Ill

Source: Department of Commerce, Bureau of Economic Analysis.




315

TABLE B-83.—Corporate profits by industry, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits with inventory valuation adjustment and without capital consumption adjustment
Domestic industries
Year or
quarter

Financial1
Total
Total
Total

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983"
1981:
I
II
Ill
IV
1982:
I
II
Ill
IV
1983:
I
II
Ill

Nonfinancial

Federal
serve
banks

Other

Total

Manufacturing 2

Transportation
and
public
utilities

Rest
of the
world

Wholesale
and
retail
trade

Other

10.5
-1.2
6.5
9.8
15.4
20.5
24.5
24.0
19.3
19.6
25.9
33.4
31.1
37.9
43.3
40.6
40.2
38.4
47.5
46.9
46.6
41.6
52.3
49.7
50.0
55.1
59.7
66.0
76.0
80.9
78.1
84.9
80.8
68.9
82.0
94.0
105.6
96.7
120.6
151.6
178.5
205.1
209.6
191.7
203.3
165.9
195.5

10.2
-1.2
6.1
9.6
15.0
20.1
24.1
23.5
18.9
18.9
24.9
32.2
29.9
36.7
41.5
38.7
38.4
36.4
45.1
44.1
43.5
39.1
49.6
46.7
46.8
51.5
55.8
61.8
71.5
76.7
73.7
79.7
74.6
62.4
74.9
85.3
92.0
80.4
107.6
137.4
163.4
185.4
179.0
161.9
179.7
144.1
173.5

1.3
.3
.8
1.0
1.1
1.2
1.3
1.6
1.7
2.1
1.7
2.6
3.1
3.1
3.6
4.0
4.5
4.6
4.8
5.0
5.2
5.7
6.8
7.2
7.0
7.3
6.8
6.9
7.5
8.5
9.0
10.4
11.1
12.1
14.1
15.3
15.9
15.0
11.8
17.1
23.1
31.0
30.3
26.9
20.3
20.9
31.4

0.0
.0
.0
.0
.0
.0
.0
.1
.1
.1
.1
.2
.2
.2
.3
.4
.4
.3
.3
.5
.6
.6
.7
1.0
.8
.9
1.0
1.1
1.4
1.7
2.0
2.5
3.1
3.6
3.3
3.4
4.5
5.7
5.7
6.0
6.2
7.7
9.6
11.9
14.5
15.4
14.9

1.3
.3
.8
.9
1.0
1.2
1.3
1.6
1.6
2.0
1.6
2.3
2.9
3.0
3.3
3.7
4.1
4.3
4.5
4.5
4.6
5.1
6.0
6.2
6.3
6.4
5.8
5.8
6.2
6.8
7.0
7.9
8.0
8.6
10.7
11.9
11.4
9.3
6.2
11.1
16.9
23.3
20.7
15.0
5.8
5.5
16.5

8.9
-1.5
5.3
8.6
14.0
18.9
22.8
21.9
17.3
16.8
23.2
29.6
26.8
33.5
37.9
34.7
33.9
31.8
40.3
39.1
38.3
33.5
42.9
39.5
39.8
44.2
49.0
54.9
64.0
68.2
64.8
69.3
63.5
50.2
60.8
70.0
76.0
65.4
95.8
120.3
140.3
154.4
148.6
134.9
159.4
123.2
142.1

5.2
-.4
3.3
5.5
9.5
11.8
13.8
13.2
9.7
9.0
13.6
17.6
16.2
20.9
24.6
21.7
22.0
19.9
26.0
24.7
24.0
19.4
26.4
23.6
23.3
26.0
29.3
32.3
39.3
41.9
38.5
41.2
36.6
26.6
34.1
40.7
45.5
39.0
52.6
69.2
78.3
86.9
85.6
72.9
86.7
59.0
69.4

1.8
.0
1.0
1.3
2.0
3.4
4.4
3.9
2.7
1.8
2.2
3.0
3.0
4.0
4.6
4.9
5.0
4.7
5.6
5.9
5.8
5.9
7.0
7.4
7.8
8.4
9.3
10.0
11.0
11.8
10.7
10.8
10.3
8.2
8.5
9.0
8.7
6.1
10.0
14.5
17.8
20.6
15.9
17.1
18.7
17.5
20.6

1.0
-.5
.7
1.2
1.4
2.2
3.0
3.2
3.3
3.8
4.6
5.5
4.5
5.0
5.0
4.8
3.8
3.8
5.0
4.5
4.4
4.6
5.9
4.9
5.0
5.8
5.9
7.5
8.1
8.2
9.1
10.4
10.5
9.5
11.7
13.4
13.9
12.5
21.3
22.4
26.6
26.9
27.1
23.6
32.8
27.6
34.2

0.9
-.7
.3
.6
1.1
1.5
1.6
1.6
1.5
2.1
2.9
3.6
3.1
3.6
3.7
3.3
3.1
3.4
3.6
4.1
4.0
3.6
3.6
3.6
3.7
3.9
4.4
5.1
5.6
6.3
6.5
6.9
6.1
5.9
6.5
6.9
8.0
7.9
11.9
14.2
17.6
20.0
20.1
21.3
21.1
19.1
17.8

0.2
.0
.3
.3
.4
.4
.4
.4
.3
.7
1.0
1.3
1.1
1.3
1.7
1.9
1.8
2.0
2.4
2.8
3.1
2.5
2.7
3.0
3.2
3.6
3.9
4.2
4.5
4.2
4.4
5.2
6.1
6.5
7.1
8.6
13.7
16.3
13.0
14.3
15.1
19.7
30.6
29.9
23.7
21.8
22.0

207.1
196.4
208.3
201.5

182.5
175.0
186.5
174.7

23.9
20.4
18.8
18.1

13.3
14.1
15.2
15.6

10.6
6.4
3.7
2.5

158.6
154.6
167.7
156.5

88.5
88.0
93.3
76.9

20.1
15.7
19.1
19.8

29.0
31.3
33.3
37.8

21.0
19.7
21.9
22.0

24.6
21.4
21.8
26.9

167.7
170.3
168.3
157.2

147.0
148.5
147.6
133.1

15.5
20.4
22.2
25.5

15.3
15.9
15.7
14.9

.3
4.6
6.5
10.6

131.5
128.1
125.4
107.6

60.9
61.4
65.5
48.3

18.0
19.8
17.3
14.9

30.2
27.4
25.2
27.5

22.4
19.5
17.4
16.9

20.7
21.7
20.7
24.1

168.0
192.7
210.8

147.8
172.2
187.4

29.8
33.8
31.9

14.4
14.6
15.2

15.4
19.2
16.8

118.0
138.4
155.5

53.7
68.1
78.2

17.4
20.4
22.5

27.8
33.9
36.7

19.2
16.0
18.1

20.2
20.5
23.4

1
Consists of the following industries: Banking; credit agencies other than banks; security and commodity brokers, dealers, and
services; insurance carriers; regulated investment companies; small business investment companies; and real estate investment trusts.
2
See Table B-84 for industry detail.

Note.—The industry classification is on a company basis and is based on the 1972 Standard Industrial Classification (SIC) beginning
1948, and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau of Economic Analysis.




316

TABLE B-84.—Corporate profits of manufacturing industries, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits with inventory valuation adjustment and without capital consumption adjustment
Nondurable goods

Durable goods
Year or quarter

Total
manufacturing

Total

Primary
metal
industries

Fabricated
metal
products

Machinery,
except
electrical

1929
1933
1939

5.2
-.4
3.3
5.5
9.5
11.8
13.8
13.2
9.7
9.0
13.6
17.6
16.2

3.1

7.4
4.5
2.4
5.8
7.5
8.1

1.6
1.5

1.2
1.3

1950
1951
1952
1953
1954
1955
1956....
1957....
1958....
1959....

20.9
24.6
21.7
22.0
19.9
26.0
24.7
24.0
19.4
26.4

12.0
13.2
11.7
11.9
10.5
14.3
12.8
13.3
9.3
13.7

2.3
3.1
1.9
2.5
1.7
2.9
3.0
3.0
1.9
2.3

1.6
2.3
2.3
1.9
1.7
1.7
2.1
2.0
1.4
2.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

23.6
23.3
26.0
29.3
32.3
39.3
41.9
38.5
41.2
36.6

11.6
11.4
14.0
16.3
17.9
23.0
23.8
20.9
22.2
18.9

2.0
1.6
1.6
2.0
2.5
3.1
3.6
2.7
1.9
1.4

1.0
1.1
1.3
1.4
2.0
2.4
2.4
2.3
2.0

1970....
1971....
1972....
1973....
1974....
1975....
1976....
1977....
1978....
1979....

26.6
34.1
40.7
45.5
39.0
52.6
69.2
78.3
86.9
85.6

10.2
16.3
22.4
24.3
13.2
18.9
30.4
38.1
44.3
37.1

.7
1.6
2.2
5.4
2.9
2.1
1.1
3.5
3.5

1980
1981
1982
1983 f.

72.9
86.7
59.0
69.4

20.4
28.6
9.8
17.8

2.7
3.8
-5.4
-.9

88.5
88.0
93.3
76.9

30.7
34.8
27.7
21.3

60.9
61.4
65.5
48.3

10.4
14.5
12.9
1.2

53.7
68.1
78.2

10.0
18.3
21.3

Other

Total

Food
and
kindred
products

Chemicals
and
allied
products

Petroleum
and
coal
products

1.9
1.6

1.7
1.8

2.8
1.9

3.7
2.8

Other

2.6
-.4
1.7

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

Electric
Motor
and
vehicles
elecand
tronic
equipequipment
ment

1981:
I

1982:
I
II....

1983:
I
II

1.4
2.1

1.8
1.7

2.4
3.1
4.6
5.7
5.9
5.2
6.6
7.8
10.0
8.1

1.2
1.3
1.5
1.4
1.2
1.1
1.2
1.5
1.3
1.7

3.1
2.4
2.4
2.6
2.1
4.1
2.2
2.6
.9
3.0

2.6
2.8
2.6
2.6
2.9
3.5
3.2
3.1
2.9
3.5

8.9
11.4
9.9
10.1
9.4
11.8
11.9
10.7
10.0
12.7

1.6
1.4
1.7
1.8
1.6
2.2
1.8
1.8
2.1
2.4

2.3
2.8
2.3
2.2
2.2
3.0
2.8
2.8
2.5
3.5

2.3
2.7
2.3
2.8
2.7
3.0
3.3
2.6
2.1
2.5

2.7
4.4
3.6
3.3
2.9
3.6
4.1
3.6
3.3
4.3

1.8
1.9
2.3
2.5
3.3
3.9
4.5
4.1
4.1
3.7

1.3
1.3
1.5
1.6
1.7
2.7
3.0
2.9
2.8
2.3

3.0
2.5
4.0
4.9
4.7
6.2
5.1
3.9
5.5
4.7

2.7
3.1
3.5
4.0
4.4
5.1
5.2
4.9
5.7
4.9

12.0
11.9
12.0
13.1
14.4
16.3
18.1
17.6
19.1
17.7

2.2
2.3
2.3
2.7
2.7
2.8
3.2
3.2
3.2
3.0

3.1
3.2
3.2
3.6
4.0
4.6
4.9
4.3
5.2
4.5

2.5
2.2
2.2
2.1
2.4
2.9
3.2
3.9
3.7
3.2

4.2
4.1
4.3
4.6
5.3
6.0
6.8
6.3
7.0
6.9

1.1
1.5
2.1
2.5
1.6
3.0
3.8
4.4
4.9
5.2

2.9
2.9
4.3
4.6
2.9
4.7
6.3
8.8
9.4
8.9

1.2
1.9
2.8
3.0
.4
2.1
3.4
5.6
6.5
5.1

1.2
5.0
5.9
5.7
.1
1.9
7.2
9.4
8.9
4.7

2.9
4.3
5.7
6.2
2.9
4.3
7.6
8.8
11.0
9.8

16.5
17.8
18.3
21.2
25.8
33.6
38.8
40.2
42.6
48.4

3.2
3.5
2.9
2.4
2.8
8.6
6.9
6.8
6.0
5.7

3.9
4.4
5.2
6.0
5.6
6.5
8.3
7.9
8.3
7.1

3.5
3.5
3.0
5.0
10.5
9.6
12.6
11.6
13.8
20.7

5.9
6.4
7.2
7.8
6.8
8.9
11.0
13.8
14.5
14.8

4.2
4.6
3.2
3.6

7.4
9.7
4.8
2.1

5.2
6.4
4.3
3.1

-3.8
-.6
.4
6.9

4.7
4.9
2.5
3.0

52.5
58.0
49.2
51.6

6.0
8.9
7.3
6.7

6.0
7.2
4.9
6.0

28.2
27.8
24.8
21.2

12.3
14.1
12.2
17.7

-2.0
3.0
-2.2
-1.3

57.9
53.1
65.6
55.6

10.0
8.3
9.1
8.3

25.1
23.7
36.3
26.0

14.5
14.5
13.3
14.1

-3.8
3.4
3.3
-1.2

50.5
46.9
52.6
47.1

6.7
7.3
8.0
7.2

27.2
21.9
26.8
23.5

10.4
11.9
13.2
13.4

3.0
5.6
10.2

43.6
49.9
56.9

6.9
6.9
6.3

15.9
20.0
24.7

16.0
17.4
19.1

8.9
9.7
9.8
10.2

4.0
3.4
3.1
2.1

-1.6
-1.1
-.6

Note.—The industry classification is on a company basis and is based on the 1972 Standard Industrial Classification (SIC) beginning
1948, and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau of Economic Analysis.

424-456

0 - 8 4 - 2 1




317

TABLE B-85.—Sales, profits, and stockholders' equity, all manufacturing corporations, 1950-83
[Billions of dollars]
All manufacturing corporations
Year or
quarter

Durable goods industries

Profits
Sales
(net)

Nondurable goods industries

Profits

Before
income
taxes 1

After
income
taxes

Stockholders'
equity2

Sales
(net)

Profits

Before
income
taxes 1

After
income
taxes

Stockholders'
equity2

Sales
(net)

Before
income
taxes 1

After
income
taxes

Stockholders'
equity 2

1950
1951
1952
1953
1954

181.9
245.0
250.2
265.9
248.5

23.2
27.4
22.9
24.4
20.9

12.9
11.9
10.7
11.3
11.2

83.3
98.3
103.7
108.2
113.1

116.8
122.0
137.9
122.8

12.9
15.4
12.9
14.0
11.4

6.7
6.1
5.5
5.8
5.6

39.9
47.2
49.8
52.4
54.9

95.1
128.1
128.0
128.0
125.7

10.3
12.1
10.0
10.4
9.6

6.1
5.7
5.2
5.5
5.6

43.5
51.1
53.9
55.7
58.2

1955
1956
1957
1958
1959

278.4
307.3
320.0
305.3
338.0

28.6
29.8
28.2
22.7
29.7

15.1
16.2
15.4
12.7
16.3

120.1
131.6
141.1
147.4
157.1

142.1
159.5
166.0
148.6
169.4

16.5
16.5
15.8
11.4
15.8

8.1
8.3
7.9
5.8
8.1

58.8
65.2
70.5
72.8
77.9

136.3
147.8
154.1
156.7
168.5

12.1
13.2
12.4
11.3
13.9

7.0
7.8
7.5
6.9
8.3

61.3
66.4
70.6
74.6
79.2

1960
1961
1962
1963
1964

345.7
356.4
389.4
412.7
443.1

27.5
27.5
31.9
34.9
39.6

15.2
15.3
17.7
19.5
23.2

165.4
172.6
181.4
189.7
199.8

173.9
175.2
195.3
209.0
226.3

14.0
13.6
16.8
18.5
21.2

7.0
6.9
8.6
9.5
11.6

82.3
84.9
89.1
93.3
98.5

171.8
181.2
194.1
203.6
216.8

13.5
13.9
15.1
16.4
18.3

8.2
8.5
9.2
10.0
11.6

83.1
87.7
92.3
96.3
101.3

1965
1966
1967
1968
1969

492.2
554.2
575.4
631.9
694.6

46.5
51.8
47.8
55.4
58.1

27.5
30.9
29.0
32.1
33.2

211.7
230.3
247.6
265.9
289.9

257.0
291.7
300.6
335.5
366.5

26.2
29.2
25.7
30.6
31.5

14.5
16.4
14.6
16.5
16.9

105.4
115.2
125.0
135.6
147.6

235.2
262.4
274.8
296.4
328.1

20.3
22.6
22.0
24.8
26.6

13.0
14.6
14.4
15.5
16.4

106.3
115.1
122.6
130.3
142.3

1970
1971
1972
1973

708.8
751.1
849.5
1,017.2

48.1
52.9
63.2
81.4

28.6
31.0
36.5
48.1

306.8
320.8
343.4
374.1

363.1
381.8
435.8
527.3

23.0
26.5
33.6
43.6

12.9
14.5
18.4
24.8

155.1
160.4
171.4
188.7

345.7
369.3
413.7
489.9

25.2
26.5
29.6
37.8

15.7
16.5
18.0
23.3

151.7
160.5
172.0
185.4

275.1

21.4

13.0

386.4

140.1

10.8

6.3

194.7

135.0

10.6

6.7

191.7

182.1

1973: IV
New series:

236.6

20.6

13.2

368.0

122.7

10.1

6.2

185.8

113.9

10.5

7.0

1974

1,060.6

92.1

58.7

395.0

529.0

41.1

24.7

196.0

531.6

51.0

34.1

199.0

1975
1976
1977
1978
1979

1,065.2
1,203.2
1,328.1
1,496.4
1,741.8

79.9
104.9
115.1
132.5
154.2

49.1
64.5
70.4
81.1
98.7

423.4
462.7
496.7
540.5
600.5

521.1
589.6
657.3
760.7
865.7

35.3
50.7
57.9
69.6
72.4

21.4
30.8
34.8
41.8
45.2

208.1
224.3
239.9
262.6
292.5

544.1
613.7
670.8
735.7
876.1

44.6
54.3
57.2
62.9
81.8

27.7
33.7
35.5
39.3
53.5

215.3
238.4
256.8
277.9
308.0

1980
1981
1982

1,912.8
2,144.7
2,039.4

145.8
158.6
108.2

92.6
101.3
70.9

668.1
743.4
770.2

889.1
979.5
913.1

57.4
67.2
34.7

35.6
41.6
21.7

317.7
350.4
355.5

1,023.7
1,165.2
1,126.4

88.4
91.3
73.6

56.9
59.6
49.3

350.4
393.0
414.7

465.7
466.3
464.2
516.6

39.5
35.9
33.2
37.2

24.8
22.4
21.0
24.4

643.9
658.1
670.5
699.7

219.8
218.7
212.6
238.0

15.8
13.5
11.9
16.2

9.7
8.2
7.2
10.4

308.0
312.6
317.2
332.8

245.9
247.6
251.6
278.6

23.7
22.4
21.3
21.0

15.1
14.2
13.7
14.0

335.9
345.5
353.3
366.9

520.8
549.6
539.9
534.4

39.0
45.6
40.0
34.0

24.4
28.9
25.2
22.9

718.4
739.4
753.5
762.3

234.1
257.2
245.1
243.0

16.7
20.7
16.4
13.4

10.1
12.7
10.3
8.5

339.4
349.7
354.2
358.3

286.7
292.4
294.8
291.3

22.3
24.9
23.5
20.6

14.2
16.2
14.9
14.3

379.1
389.7
399.4
404.0

502.9
521.9
508.0
506.6

29.0
30.9
27.8
20.5

19.0
20.0
17.8
14.1

757.5
765.0
775.2
783.0

225.3
239.4
224.4
224.0

10.7
12.6
8.5
2.9

6.8
8.1
5.3
1.5

351.2
354.5
358.3
358.1

277.6
282.6
283.6
282.6

18.3
18.3
19.4
17.6

12.3
11.9
12.5
12.6

406.3
410.5
416.8
425.0

493.4
529.4
537.2

24.4
34.7
36.3

15.7
22.2
23.3

787.0
802.3
819.3

222.8
245.8
246.1

7.9
13.5
12.9

359.9
368.3
376.5

270.6
283.6
291.1

16.6
21.2
23.4

10.9
13.7
15.1

427.2
434.0
442.8

1973: IV

1980:
I
I
I
Il
l
IV
1981:
I
I
I
Il
l
IV
1982:
I
I
I
Il
l
IV
1983:
I

1
In the old series, "income taxes" refers to Federal income taxes only, as State and local income taxes had already been deducted.
In the new series, no income taxes have been deducted.
2
Annual data are average equity for the year (using four end-of-quarter figures).

Note.—Data are not necessarily comparable from one period to another due to changes in accounting procedures, industry
classifications, sampling procedures, etc. For explanatory notes concerning compilation of the series, see "Quarterly Financial Report for
Manufacturing, Mining, and Trade Corporations,' Department of Commerce, Bureau of the Census.
Source: Department of Commerce, Bureau of the Census.




318

TABLE B-86.—Relation of profits after taxes to stockholders' equity and to sales, all
corporations, 1947-83
Ratio of profits after income taxes (annual
rate) to stockholders' equity—percent1
Year or quarter

manufacturing

Profits after income taxes per dollar of
sales—cents

All
manufacturing
corporations

Durable
goods
industries

Nondurable
goods
industries

All
manufacturing
corporations

Durable
goods
industries

Nondurable
goods
industries

1947
1948
1949

15 6
16 0
11.6

14 4
15 7
12.1

16.6
16.2
11.2

6.7
7.0
5.8

6.7
7.1
6.4

6.7
6.8
5.4

1950
1951
1952
1953
1954...

15.4
12.1
10.3
10.5
9.9

16.9
13.0
11.1
11.1
10.3

14.1
11.2
9.7
9.9
9.6

1955
1956.
1957
1958
1959

12.6
12.3
10 9
8.6
10 4

13.8
12.8
113
8.0
10.4

11.4
11.8
10.6
9.2
10.4

7.1
4.9
4.3
4.3
4.5
5.4
5.3
4.8
4.2
4.8

7.7
5.3
4.5
4.2
4.6
5.7
5.2
4.8
3.9
4.8

I960 .
1961
1962
1963
1964

9.2
89
9.8
10 3
11.6

8.5
81
9.6
101
11.7

9.8
9.6
9.9
10.4
11.5

4.4
4.3
4.5
4.7
5.2

4.0
3.9
4.4
4.5
5.1

6.5
4.5
4.1
4.3
4.4
5.1
5.3
4.9
4.4
4.9
4.8
4.7
4.7
4.9
5.4

1965
1966
1967
1968
1969

13 0
13.4
117
12.1
115

13 8
14.2
117
12.2
114

12.2
12.7
11.8
11.9
11.5

5.6
5.6
5.0
5.1
4.8

5.7
5.6
4.8
4.9
4.6

1970
1971
1972
1973

9.3
97
10.6
12.8

8.3
90
10.8
13.1

10.3
10 3
10.5
12.6

4.0
4.1
4.3
4.7

3.5
3.8
4.2
4.7

14.0

4.7

4.5

5.5
5.6
5.3
5.2
5.0
4.5
4.5
4.4
4.8
5.0

1973: IV

13.4

12.9

New series:
1973- IV

14 3

13 3

15.3

5.6

5.0

6.1

1974

14.9

12.6

17.1

5.5

4.7

6.4

1975
1976
1977
1978...
1979

116
13 9
14.2
15 0
16.4

10 3
13 7
14.5
16 0
15.4

12 9
14 2
13.8
14 2
17.4

4.6
54
5.3
5.4
5.7

4.1
5.2
5.3
5.5
5.2

5.1
5.5
5.3
5.3
6.1

1980
1981
1982
1980:
1
II
Ill
IV ....

13 9
13 6
9.2

112
119
6.1

16.3
15 2
11.9

4.8
4.7
3.5

4.0
4.2
2.4

5.6
5.1
4.4

15 4
13.6
12.5
14.0

12 6
10.6
9.1
12.6

18.0
16.4
15.6
15.2

5.3
4.8
4.5
4.7

4.4
3.8
3.4
4.4

6.1
5.7
5.5
5.0

||
III
IV

13 6
15 6
13.4
12.0

12 0
14 6
11.6
9.5

15 0
16 6
14.9
14.2

47
53
4.7
4.3

4.3
49
4.2
3.5

5.0
5.5
5.1
4.9

1982:
I
II
Ill
I
V

101
10.5
92
7.2

77
9.2
59
1.7

12 1
11.6
12 0
11.9

3.8
3.8
3.5
2.8

3.0
3.4
2.4
.7

4.4
4.2
4.4
4.5

1983:
|
II
Ill ..

80
11.1
11.4

53
9.2
8.7

10 3
12.7
13.6

32
4.2
4.3

2.1
3.4
3.3

4.0
4.8
5.2

1981:

1
Annual ratios based on average equity for the year (using four end-of-quarter figures). Quarterly ratios based on equity at end of
quarter only.
Note.—Based on data in millions of dollars.
See Note, Table B-85.
Source: Department of Commerce, Bureau of the Census.




319

TABLE B-87.—Sources and uses of funds, nonfarm nonfinancial corporate business, 1946-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Sources

Uses
External

Year or
quarter

Credit market funds
Total

Internal

1

Total
Total

Securities and
mortgages

Loans
and
shortterm
paper

Other2

Total

Capital
expenditures 3

Increase
in
financial
assets

Discrepancy
(sources
less uses)

1946
1947
1948....
1949

18.7
27.0
28.9
19.9

8.1
12.9
19.1
19.5

10.6
14.1
9.7
.4

6.9
8.4
6.5
3.1

3.6
5.4
6.7
4.9

3.3
3.0
-.2
-1.8

3.7
5.8
3.3
-2.7

16.8
25.6
25.3
18.3

18.1
17.3
20.3
14.8

-1.4
8.4
5.0
3.5

1.9
1.4
3.6
1.6

1950....
1951
1952....
1953....
1954....

42.1
36.4
29.9
27.8
29.6

18.0
20.2
21.9
21.7
23.9

24.0
16.2
8.0
6.1
5.7

8.1
10.5
9.5
5.7
6.5

4.2
6.4
8.0
6.0
6.7

3.9
4.1
1.4
-.4
-.2

15.9
5.7
-1.5
.5
-.8

40.4
37.6
29.2
28.0
27.8

24.0
30.2
24.6
25.7
22.9

16.4
7.4
4.6
2.3
4.9

1.7
-1.2
.6
-.1
1.8

1955....
1956....
1957....
1958....
1959

52.7
44.9
43.4
41.9
56.3

29.5
29.5
31.5
30.3
36.0

23.2
15.4
11.9
11.7
20.2

10.2
12.8
12.3
10.5
12.3

6.4
7.5
10.4
10.5
8.1

3.7
5.3
1.9
-.0
4.2

13.1
2.5
-.4
1.2
7.9

49.1
40.8
39.1
38.5
51.2

32.6
36.8
34.9
27.7
37.0

16.5
4.0
4.2
10.8
14.2

3.5
4.1
4.3
3.4
5.0

1960
1961....
1962
1963....
1964....

48.6
56.3
60.1
68.4
73.9

35.4
36.5
42.8
46.5
51.8

13.2
19.8
17.3
22.0
22.1

12.1
12.9
12.8
12.5
14.1

7.5
10.7
9.4
8.4
7.8

4.6
2.2
3.4
4.0
6.2

1.2
6.9
4.6
9.5
8.0

41.4
51.0
55.5
60.4
64.9

37.5
36.7
43.2
44.7
50.1

3.9
14.2
12.3
15.7
14.8

7.2
5.3
4.6
8.0
9.0

1965
1966....
1967....
1968....
1969....

91.8
97.6
94.7
113.5
115.5

58.5
62.6
63.6
65.0
64.4

33.3
35.0
31.1
48.5
51.1

18.5
23.8
27.8
27.7
32.3

7.6
14.3
19.1
15.0
14.6

11.0
9.5
8.7
12.6
17.7

14.8
11.2
3.3
20.9
18.8

82.7
91.3
88.5
106.0
115.3

61.0
74.7
72.2
75.4
83.7

21.8
16.6
16.3
30.6
31.6

9.1
6.4
6.2
7.5
.2

1970....
1971....
1972....
1973
1974

102.3
125.3
151.6
192.5
190.3

61.8
73.5
85.0
91.7
85.6

40.5
51.8
66.6
100.7
104.7

35.3
37.2
43.4
56.7
70.2

26.3
32.8
26.4
20.7
26.3

9.0
4.4
16.9
36.0
43.9

5.3
14.6
23.2
44.0
34.5

98.7
122.7
149.1
191.9
190.1

80.0
86.0
99.0
121.5
137.9

18.7
36.7
50.1
70.5
52.2

3.6
2.6
2.4
.5
.2

1975
1976
1977
1978
1979

157.0
211.0
254.1
317.5
345.7

119.7
134.2
157.4
175.7
188.8

37.3
76.8
96.7
141.8
156.9

30.8
54.7
72.4
80.5
88.2

38.7
38.2
35.8
32.8
20.9

-7.9
16.5
36.6
47.7
67.3

6.5
22.1
24.3
61.3
68.8

150.9
201.8
237.6
293.6
346.7

109.7
148.3
175.1
201.6
219.4

41.2
53.5
62.5
92.0
127.3

6.0
9.2
16.5
23.8
-1.0

1980
1981
1982

333.2
365.8
308.6

189.5
230.6
240.5

143.7
135.2
68.1

90.9
92.2
84.1

52.4
22.6
45.2

38.5
69.7
38.9

52.7
43.0
-15.9

320.1
324.3
251.0

221.2
261.6
231.2

98.9
62.7
19.7

13.1
41.6
57.7

1981:
I
II
Ill
IV

348.8
386.4
353.0
375.1

217.3
223.5
237.2
244.7

131.5
163.0
115.8
130.4

73.0
120.4
93.1
82.4

42.8
40.2
3.0
4.4

30.2
80.3
90.1
78.0

58.6
42.6
22.8
48.0

348.4
343.4
301.3
304.1

231.6
253.9
289.4
271.5

116.8
89.5
11.9
32.6

.5
43.1
51.7
71.1

1982
I
II
Ill
IV

302.8
329.9
327.4
274.5

233.5
240.2
244.0
244.3

69.3
89.7
83.4
30.2

102.8
89.9
89.0
54.6

24.8
38.6
39.6
77.8

78.0
51.3
49.4
-23.2

-33.4
-.2
-5.6
-24.4

232.1
279.3
270.5
222.0

242.4
242.2
240.1
200.2

-10.3
37.1
30.3
21.8

70.8
50.5
56.9
52.5

323.4
396.3
387.7

250.7
270.3
291.1

72.7
126.0
96.6

69.2
77.1
80.1

64.7
84.1
33.3

4.5
-6.9
46.7

3.5
48.8
16.5

276.2
338.7
338.4

202.4
252.9
281.5

73.8
85.8
56.9

47.2
57.6
49.3

1983:
I
II

1
Undistributed profits (after inventory valuation and capital consumption adjustments), capital consumption allowances, and foreign
branch profits, dividends, and subsidiaries' earnings retained abroad.
2
Consists of tax liabilities, trade debt, and direct foreign investment in the United States.
3
Plant and equipment, residential structures, inventory investment, and mineral rights from U.S. Government.

Source: Board of Governors of the Federal Reserve System.




320

TABLE B-88.—Current assets and liabilities of U.S. corporations, 1940-83
[Billions of dollars, except as noted]
Current assets
End of
period

Total

Cash1

U.S.
Government 2
securities

Current liabilities

Notes
and
accounts
receivable

Inventories

Other
current
assets

Total

Notes
and
accounts
payable

Other
current
liabilities

Net
working
capitaf

Current
ratio 3

23.2
26.4
26.0
26.3
26.8
25.7
31.6
37.6
39.3
37.5
48.3
54.9
59.3
59.5
61.7
76.1
83.9
86.6
90.4
101.0
106.8
114.6

9.6
14.3
21.3
25.3
24.9
20.1
20.3
23.9
25.0
23.3
31.6
37.8
36.8
39.4
38.0
45.0
46.6
46.5
46.2
52.0
53.6
56.6

27.5
32.3
36.3
42.1
45.6
51.6
56.2
62.1
68.6
72.4
81.6
86.5
90.1
91.8
94.9
103.0
107.4
111.6
118.7
124.2
128.6
135.6

1.838
1.791
1.767
1.818
1.880
2.127
2.083
2.010
2.065
2.193
2.024
1.934
1.938
1.927
1.952
1.851
1.823
1.838
1.869
1.811
1.802
1.792

All corporations4
SEC series:5
1940
1941
1942
1943
1944
1945
1946
1947 .
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961

60.3
72.9
83.6
93.8
97.2
97.4
108.1
123.6
133.0
133.1
161.5
179.1
186.2
190.6
194.6
224.0
237.9
244.7
255.3
277.3
289.0
306.8

13.1
13.9
17.6
21.6
21.6
21.7
22.8
25.0
25.3
26.5
28.1
30.0
30.8
31.1
33.4
34.6
34.8
34.9
37.4
36.3
37.2
41.1

2.0
4.0
10.1
16.4
20.9
21.1
15.3
14.1
14.8
16.8
19.7
20.7
19.9
21.5
19.2
23.5
19.1
18.6
18.8
22.8
20.1
20.0

24.0
28.0
27.3
26.9
26.5
25.9
30.7
38.3
42.4
43.0
56.8
61.5
67.4
68.5
73.6
88.9
97.7
102.2
109.7
120.6
129.2
139.2

19.8
25.6
27.3
27.6
26.8
26.3
37.6
44.6
48.9
45.3
55.1
64.9
65.8
67.2
65.3
72.8
80.4
82.2
81.9
88.4
91.8
95.2

1.5
1.4
1.3
1.3
1.4
2.4
1.7
1.6
1.6
1.4
1.7
2.1
2.4
2.4
3.1
4.2
5.9
6.7
7.5
9.1
10.6
11.4

32.8
40.7
47.3
51.6
51.7
45.8
51.9
61.5
64.4
60.7
79.8
92.6
96.1
98.9
99.7
121.0
130.5
133.1
136.6
153.1
160.4
171.2

Nonfinancial corporations6
5

SEC series:
1961
1962
1963
1964
1965
1966
1967
1968
1969 ..
1970
1971
1972 .
1973
1974
QFR-FRB series:7
1974
1975
1976
1977
1978
1979
1980
1981
1982 .
1982:
I

II
III

IV
1983:
I
II
1

2
3

254.7
269.7
288.2
305.6
336.0
364.0
386.2
426.5
473.6
492.3
529.6
599.3
697.8
790.7

34.8
37.1
39.8
40.5
42.8
41.9
45.5
48.2
47.9
50.2
53.3
59.0
66.3
71.1

16.5
16.8
16.7
15.8
14.4
13.0
10.3
11.5
10.6
7.7
11.0
10.6
12.8
12.3

97.9
103.2
110.5
119.9
134.1
146.6
155.3
173.9
197.0
206.1
221.1
248.2
288.5
322.1

95.0
100.5
106.8
113.1
126.6
142.8
153.1
166.0
186.4
193.3
200.4
225.7
263.9
313.6

10.5
12.1
14.4
16.3
18.1
19.7
22.0
26.9
31.6
35.0
43.8
55.8
66.4
71.7

123.7
132.4
145.5
156.6
178.8
199.4
211.3
244.1
287.8
304.9
326.0
375.6
450.9
530.4

84.4
88.7
97.0
104.9
121.5
137.5
147.1
168.8
199.2
211.3
220.5
282.9
340.3
402.3

39.3
43.7
48.5
51.7
57.3
61.9
64.2
75.3
88.6
93.6
105.5
92.7
110.7
128.1

131.0
137.3
142.7
149.0
157.2
164.6
174.9
182.4
185.7
187.4
203.6
223.7
246.9
260.3

2.059
2.037
1.981
1.951
1.879
1.825
1.828
1.747
1.646
1.615
1.625
1.595
1.548
1.491

735.4
759.0
827.4
912.7
1,043.7
1,214.8
1,327.0
1,419.3
1,425.4

73.2
82.1
88.2
97.2
105.5
118.0
126.9
131.8
144.0

11.1
19.0
23.5
18.2
17.2
16.7
18.7
17.4
22.4

265.8
272.1
292.9
330.3
388.0
459.0
506.8
530.3
511.0

319.5
315.9
342.5
376.9
431.8
505.1
542.8
585.1
575.2

65.9
69.9
80.3
90.1
101.1
116.0
131.8
154.6
172.6

453.4
451.6
495.1
557.1
669.5
807.3
889.3
976.3
977.8

269.8
264.2
282.1
317.6
383.0
460.8
513.6
558.8
552.8

183.6
187.4
213.0
239.6
286.5
346.5
375.7
417.5
425.0

282.0
307.4
332.4
355.5
374.3
407.5
437.8
442.9
447.6

1.622
1.681
1.671
1.638
1.559
1.505
1.492
1.454
1,458

1,418.0
1,417.2
1,441.8
1,425.4

121.8
124.1
126.9
144.0

16.5
16.5
18.9
22.4

533.4
531.2
534.2
511.0

591.6
587.6
596.5
575.2

154.7
157.9
165.3
172.6

987.0
988.7
1,007.6
977.8

552.9
554.9
562.7
552.8

434.0
433.8
444.9
425.0

431.0
428.5
434.2
447.6

1.437
1.433
1.431
1.458

1,436.5
1,464.2

139.7
145.7

25.8
27.5

517.9
534.3

573.2
570.5

179.9
186.2

986.3
997.7

543.2
551.6

443.1
446.1

450.2
466.5

1.456
1.468

Includes time certificates of deposit.

Includes Federal agency issues.

Total current assets divided by total current liabilities.
4
Excludes banks, savings and loan associations, and insurance companies.
5
Based on data from "Statistics of Income," Department of the Treasury.
6
Excludes banks, savings and loan associations, insurance companies, investment companies, finance companies (personal and
commercial), real estate companies, and security and commodity brokers, dealers, and exchanges.
7
Based on data from "Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations," Federal Trade Commission. See
"Federal Reserve Bulletin," July 1978, for details regarding the series. Effective mid-1982, responsibility for the Quarterly Financial
Report was transferred to the Department of Commerce, Bureau of the Census.
Note.—SEC series not available after 1974.
Sources: Board of Governors of the Federal Reserve System, Federal Trade Commission, Department of Commerce (Bureau of the
Census), and Securities and Exchange Commission.




321

TABLE B-89.—State and municipal and business securities offered) 1934-83
[Millions of dollars]

Year or quarter

State
and
municipal
securities
offered
for cash
(principal
amounts)

Business securities offered for cash
Type of security
Total
offerings

Common
stock 2

Bonds
and
notes

Preferred
stock

1

Industry of issuer

Manufacturing 3

Electric,
gas, and
water 4

Transportation 5

Communication

Other

1934
1939

939
1,128

397
2,164

19
87

6
98

372
1,979

67
604

133
1,271

176
186

21
103

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

1,238
956
524
435
661
795
1,157
2,324
2,690
2,907

2,677
2,667
1,062
1,170
3,202
6,011
6,900
6,577
7,078
6,052

108
110
34
56
163
397
891
779
614
736

183
167
112
124
369
758
1,127
762
492
425

2,386
2,389
917
990
2,670
4,855
4,882
5,036
5,973
4,890

992
848
539
510
1,061
2,026
3,701
2,742
2,226
1,414

1,203
1,357
472
477
1,422
2,319
2,158
3,257
2,187
2,320

324
366
48
161
609
1,454
711
286
755
800

902
571

159
96
4
21
109
211
329
293
1,008
946

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

3,532
3,189
4,401
5,558
6,969
5,977
5,446
6,958
7,449
7,681

6,362
7,741
9,534
8,898
9,516
10,240
10,939
12,884
11,558
9,748

811
1,212
1,369
1,326
1,213
2,185
2,301
2,516
1,334
2,027

631
838
564
489
816
635
636
411
571
531

4,920
5,691
7,601
7,083
7,488
7,420
8,002
9,957
9,653
7,190

1,200
3,122
4,039
2,254
2,268
2,994
3,647
4,234
3,515
2,073

2,649
2,455
2,675
3,029
3,713
2,464
2,529
3,938
3,804
3,258

813
494
992
595
778
893
724
824
824
967

399
612
760
882
720
1,132
1,419
1,462
1,424
717

1,300
1,058
1,068
2,138
2,037
2,757
2,619
2,426
1,991
2,733

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

7,230
8,360
8,558
10,107
10,544
11,148
11,089
14,288
16,374
11,460

10,154
13,165
10,705
12,211
13,957
14,782
17,385
24,014
21,261
25,997

1,664
3,294
1,314
1,011
2,679
1,473
1,901
1,927
3,885
7,640

409
450
422
343
412
724
580
881
636
691

8,081
9,420
8,969
10,856
10,865
12,585
14,904
21,206
16,740
17,666

2,152
4,077
3,249
3,514
3,046
5,414
7,056
11,069
6,958
6,346

2,851
3,032
2,825
2,677
2,760
2,934
3,666
4,935
5,293
6,715

718
694
567
957
982
702
1,494
1,639
1,564
1,779

1,050
1,834
1,303
1,105
2,189
945
2,003
1,975
1,775
2,172

3,383
3,527
2,761
3,957
4,980
4,787
3,167
4,396
5,671
8,985

1970
1971
1972
1973
1974

17,762
24,370
22,941
22,953
22,824
29,326
33,845
45,060
46,215
42,261

37,451
43,229
39,705
31,680
37,820
53,632
53,314
54,229
29,949
37,248

7,037
9,485
10,707
7,642
4,050
7,414
8,305
8,047
7,724
8,816

1,390
3,683
3,371
3,341
2,273
3,459
2,803
3,916
1,757
1,964

29,023
30,061
25,628
20,700
31,497
42,759
42,206
42,266
20,468
26,468

10,647
11,651
6,398
4,832
10,511
18,652
15,496
13,757
4,483
6,643

11,009
11,721
11,314
10,269
12,836
15,893
14,418
13,704
9,138
9,937

1,253
1,148
860
811
1,005
3,637
4,649
3,218
1,251
1,640

5,291
5,840
4,836
4,872
3,932
4,466
3,562
4,443
2,959
4,482

9,252
12,867
16,298
10,897
9,632
10,983
15,194
19,113
12,120
14,547

47,133
46,134
77,179

67,126
65,888
72,152

19,282
25,226
23,197

3,194
1,696
4,948

44,650
38,966
44,007

20,857
15,287
13,239

13,746
13,245
16,408

2,306
1,883
2,093

6,865
5,867
3,895

23,356
29,608
36,520

1975
1976
1977
1978 6
1979
1980
1981
1982
1983: First three
quarters

61,427

81,673

34,725

6,523

40,429

19,751

9,711

3,040

5,428

43,742

1982:
I
II
Ill
IV

12,770
17,627
18,892
27,890

12,781
14,629
18,428
26,314

4,343
6,021
4,568
8,265

582
1,091
1,683
1,592

7,855
7,518
12,178
16,456

1,797
1,336
3,735
6,371

3,242
3,932
4,059
5,175

366
253
594
880

116
619
1,120
2,040

7,261
8,490
8,921
11,848

1983:
I
II
Ill

17,239
27,257
16,931

28,178
33,277
20,218

11,745
13,255
9,725

3,545
1,717
1,261

12,891
18,305
9,233

6,216
8,974
4,561

3,620
3,907
2,184

1,283
862
895

2,088
1,872
1,468

14,970
17,662
11,110

1
Business securities offered include securities offered by corporate and non-corporate business enterprises such as limited
partnerships. Beginning 1978 excludes private placements.
2
Common stock combines the conventional ownership shares of corporate business and securities issued by non-corporate business,
e.g., limited partnership interests, voting trust certificates and condominium securities.
3
Prior to 1948, also includes extractive, radio broadcasting, airline companies, commercial, and miscellaneous company issues.
4
Prior to 1948, also includes telephone, street railway, and bus company issues.
5
Prior to 1948, includes railroad issues only.
6
Beginning 1978, business security offerings exclude private placements.

Note.—Covers substantially all new issues of State, municipal, and business securities offered for cash sale in the United States in
amounts over $100,000 and with terms to maturity of more than 1 year; excludes notes issued exclusively to commercial banks,
intercorporate transactions, and issues to be sold over an extended period, such as employee-purchase plans. Closed-end investment
company issues are included beginning 1973.
Sources: Securities and Exchange Commission, "The Commercial and Financial Chronicle," and "The Bond Buyer."




322

T A B L E B-90.—Common stock prices and yields,
Common stock prices

1949-83

1

Common stock yields
(percent) 5

.
New York Stock Exchange indexes (Dec 31, 1965=50) 2
Year or month
Composite

Industrial

Transportation

Utility

Finance

Dow
Jones
industrial
average3

Standard
& Poor's
composite
index
(194143=10)4

Dividendprice
ratio 6

Earningsprice
ratio 7

9.02

179.48

15.23

6.59

15.48

1950
1951...
1952
1953
1954
1955
1956
1957
1958
1959

10.87
13.08
13 81
13 67
16 19
21 54
24 40
23 67
24 56
30 73

216.31
257.64
270.76
275 97
333 94
442 72
493 01
475.71
491.66
632.12

18.40
22.34
24.50
24.73
29 69
40 49
46 62
44.38
46.24
57.38

6.57
6.13
5.80
5.80
4 95
4 08
4 09
4.35
3.97
3.23

13.99
11.82
9.47
10 26
8 57
7 95
7 55
7.89
6 23
5.78

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

30 01
35.37
33 49
37 51
43 76
47 39
4615
50.77
55.37
54.67

46 18
51.97
58.00
57.44

50.26
53.51
50.58
46.96

45.41
45.43
44.19
42.80

44.45
49.82
65.85
70.49

618 04
691.55
639.76
714.81
834 05
910 88
873.60
879.12
906.00
876.72

55 85
66.27
62.38
69.87
8137
8817
85.26
91.93
98.70
97.84

3 47
2.98
3.37
3.17
3 01
3 00
3.40
3.20
3.07
3.24

5 90
4.62
5.82
5 50
5 32
5 59
6.63
5.73
5.67
6.08

1970
1971
1972
1973
1974
1975..
1976
1977
1978
1979

45.72
54 22
60.29
57 42
43.84
45.73
54.46
53.69
53 70
58.32

48.03
57 92
65.73
63.08
48.08
50.52
60.44
57.86
58 23
64.76

32.14
44.35
50.17
37.74
31.89
31.10
39.57
41.09
43 50
47.34

37.24
39.53
38.48
37.69
29.79
31.50
36.97
40.92
39 22
38.20

60.00
70.38
78.35
70.12
49.67
47.14
52.94
55.25
56 65
61.42

753.19
884.76
950.71
923.88
759.37
802.49
974.92
894.63
820 23
844.40

83.22
98 29
109.20
107 43
82.85
86.16
102.01
98.20
96 02
103.01

3.83
314
2.84
3 06
4.47
4.31
3.77
4.62
5 28
5.47

6.45
5 41
5.50
7 12
11.59
9.15
8.90
10.79
12 03
13.46

1980
1981
1982
1983

68.10
74.02
68.93
92.63

78.70
85.44
78.18
107.45

60.61
72.61
60.41
89.36

37.35
38.91
39.75
47.00

64.25
73.52
71.99
95.34

891.41
932.92
884.36
1,190.34

118.78
128.05
119.71
160.41

5.26
5.20
5.81
4.40

12.66
11.96
11.60

1982:
Jan
Feb
Mar
Apr
My
a
June

67.91
66.16
63.86
66.97
67.07
63.10

76.85
74.78
71.51
75.59
75.97
71.59

62.04
59.09
55.19
57.91
56.84
53.07

39.30
38.32
38.57
39.20
39.40
37.34

70.99
70.50
69.08
7L44
69.16
63.19

853.41
833.15
812.33
844.96
846.72
804.37

117.28
114.50
110.84
116.31
116.35
109.70

5.95
6.06
6.28
5.99
5.97
6.28

13.23

July
Aug
Sept
Oct
Nov
Dec

62.82
62 91
70.21
76.10
79.75
80.30

71.37
70 98
80.08
86.67
90.76
92.00

53.40
53 98
61.39
66.64
71.92
73.40

37.20
3819
40.36
42.67
43.46
42.93

61.59
62 84
69.66
80.59
88.66
86.22

818.41
832 11
917.27
988.71
1,027.76
1,033.08

109.38
109 65
122.43
132.66
138.10
139.37

6.31
6 32
5.63
5.12
4.92
4.93

11.26

1983:
Jan
Feb
Mar
Apr
May
June

83.25
84.74
87.50
90.61
94.61
96.43

95.37
97.26
100.61
104.46
109.43
112.52

75.65
79.44
83.28
85.26
89.07
92.22

45.59
45.92
45.89
46.22
47.62
46.76

85.66
86.57
93.22
99.07
102.45
101.22

1,064.29
1,087.43
1,129,58
1,168.43
1,212.86
1,221.47

144.27
146.80
151.88
157.71
164.10
166.39

4.79
4.74
4.59
4.44
4.27
4.26

8.12

July
Aug
Sept
Oct
Nov
Dec

96.74
93.96
96.70
96.78
95.36
94.92

113.21
109.50
112.76
112.87
110.77
110.65

92.91
88.06
94.56
95.41
97.68
98.79

46.61
46.94
48.16
48.73
48.50
47.00

99.60
95.76
97.00
94.79
94.48
94.25

1,213.93
1,189.21
1,237.04
1,252.20
1,250.01
1,257.64

166.96
162.42
167.16
167.65
165.23
164.36

4.21
4.35
4.24
4.25
4.31
4.32

8.01

1949

1

12.93

8.99

7.49

Averages of daily closing prices, except New York Stock Exchange data through May 1964 are averages of weekly closing prices.
Includes all the stocks (more than 1,500) listed on the New York Stock Exchange.
Includes 30 stocks.
4
Includes 500 stocks.
5
Standard & Poor's series, based on 500 stocks in the composite index.
6
Aggregate cash dividends (based on latest known annual rate) divided by aggregate market value based on Wednesday closing
prices. Monthly data are averages of weekly figures; annual data are averages of monthly figures.
7
Quarterly data are ratio of earnings (after taxes) for 4 quarters ending with particular quarter to price index for last day of that
quarter. Annual ratios are averages of quarterly ratios.
2
3

Note.—All data relate to stocks listed on the New York Stock Exchange.
Sources-. New York Stock Exchange, Dow Jones & Co., Inc., and Standard & Poor's Corporation.




323

TABLE B-91.—Business formation and business failures,
Business failures

Year or month

Index
of net
business
formation
(1967 =
100)

New
business
incorporations
(number)

Amount of current liabilities
(millions of dollars)

Number of failures
Business
failure
rate 2

1940-83

1

Liability size class

Liability size class
Total

Under
$100,000

$100,000
and over

Total

Under
$100,000

$100,000
and over

132,916
112,897
96,346
85,640

63.0
54.4
44.6
16.4
6.5
4.2
5.2
14.3
20.4
34.4

13,619
11,848
9,405
3,221
1,222
809
1,129
3,474
5,250
9,246

13,400
11,685
9,282
3,155
1,176
759
1,003
3,103
4,853
8,708

219
163
123
66
46
50
126
371
397
538

166.7
136.1
100.8
45.3
31.7
30.2
67.3
204.6
234.6
308.1

119.9
100.7
80.3
30.2
14.5
11.4
15.7
63.7
93.9
161.4

46.8
35.4
20.5
15.1
17.1
18.8
51.6
140.9
140.7
146.7

90.6
89.5
93.3
91.7
91.0
98.4
96.6
92.4
92.2
98.7

93,092
83,778
92,946
102,706
117,411
139,915
141,163
137,112
150,781
193,067

34.3
30.7
28.7
33.2
42.0
41.6
48.0
51.7
55.9
51.8

9,162
8,058
7,611
8,862
11,086
10,969
12,686
13,739
14,964
14,053

8,746
7,626
7,081
8,075
10,226
10,113
11,615
12,547
13,499
12,707

416
432
530
787
860
856
1,071
1,192
1,465
1,346

248.3
259.5
283.3
394.2
462.6
449.4
562.7
615.3
728.3
692.8

151.2
131.6
131.9
167.5
211.4
206.4
239.8
267.1
297.6
278.9

97.1
128.0
151.4
226.6
251.2
243.0
322.9
348.2
430.7
413.9

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

95.5
92.1
93.7
95.2
98.6
100.2
99.4
100.0
106.8
112.9

182,713
181,535
182,057
186,404
197,724
203,897
200,010
206,569
233,635
274,267

57.0
64.4
60.8
56.3
53.2
53.3
51.6
49.0
38.6
37.3

15,445
17,075
15,782
14,374
13,501
13,514
13,061
12,364
9,636
9,154

13,650
15,006
13,772
12,192
11,346
11,340
10,833
10,144
7,829
7,192

1,795
2,069
2,010
2,182
2,155
2,174
2,228
2,220
1,807
1,962

938.6
1,090.1
1,213.6
1,352.6
1,329.2
1,321.7
1,385.7
1,265.2
941.0
1,142.1

327.2
370.1
346.5
321.0
313.6
321.7
321.5
297.9
241.1
231.3

611.4
720.0
867.1
1,031.6
1,015.6
1,000.0
1,064.1
967.3
699.9
910.8

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

106.4
108.5
115.9
114.9
109.2
107.0
115.6
123.2
128.2
128.3

264,209
287,577
316,601
329,358
319,149
326,345
375,766
436,170
478,019
524,565

43.8
41.7
38.3
36.4
38.4
42.6
34.8
28.4
23.9
27.8

10,748
10,326
9,566
9,345
9,915
11,432
9,628
7,919
6,619
7,564

8,019
7,611
7,040
6,627
6,733
7,504
6,176
4,861
3,712
3,930

2,729
2,715
2,526
2,718
3,182
3,928
3,452
3,058
2,907
3,634

1,887.8
1,916.9
2,000.2
2,298.6
3,053.1
4,380.2
3,011.3
3,095.3
2,656.0
2,667.4

269.3
271.3
258.8
235.6
256.9
298.6
257.8
208.3
164.7
179.9

1,618.4
1,645.6
1,741.5
2,063.0
2,796.3
4,081.6
2,753.4
2,887.0
2,491.3
2,487.5

1980
1981
1982 P.

122.4
118.6
113.2

533,520
581,242
566,942

42.1
61.3
89.0

11,742
16,794
25,346

5,682
8,233

6,060
8,561

4,635.1
6,955.2

272.5
405.8

4,362.6
6,549.3

1982: Jan
Feb
Mar
Apr
May
June

113.2
115.6
113.5
115.2
114.7
112.1

43,330
47,234
46,899
46,876
46,995
45,936

66.2
77.0
77.6
73.4
80.3
103.6

1,535
1,854
2,088
1,882
1,941
2,452

730
843
986
877
931
1,077

805
1,011
1,102
1,005
1,010
1,375

645.1
913.5
836.0
1,309.3
2,850.5
1,020.3

35.0
39.7
48.2
41.0
44.9
53.1

610.1
873.7
787.8
1,268.3
2,805.5
967.1

July
Aug
Sept
Oct
Nov
Dec

112.4
112.6
110.4
111.5
112.9
114.4

44,525
46,981
45,552
45,530
48,474
57,507

72.9

1,631

727

904

1,425.6

35.7

1,389.9

1983: Jan
Feb
Mar
Apr
May
June

111.4
113.3
112.7
112.0
114.8
116.4

49,999
48,296
48,032
48,903
50,211
50,992

July
Aug
Sept
Oct
Nov

115.2
114.4
115.8
118.8
118.0

48,601
52,828
50,445

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

101.9
86.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

Seasonally adjusted

1
Commercial and industrial failures only. Excludes failures of banks and railroads and, beginning 1933, of real estate, insurance,
holding, and financial companies, steamship lines, travel agencies, etc.
2
Failure rate per 10,000 listed enterprises.
Sources: Department of Commerce (Bureau of Economic Analysis) and Dun & Bradstreet, Inc.




324

AGRICULTURE
TABLE B-92.—Farm income, 1929-83
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Income of farm operators from farming
Net farm income

Gross farm income
Cash marketing receipts

Year or quarter
Total»

Total

Livestock
and
products

Crops

Value of
inventory
changes2

Production
expenses

Current
dollars

1967
dollars3

1929
1933
1939

13 8
6.9
10 7

11.3
5.3
7.9

6.2
2.8
4.5

5.1
2.5
33

-0.1
-.2
.1

7.7
4.4
6.3

6.2
2.6
4.4

12.0
6.6
10.6

1940
1941..
1942
1943
1944
1945
1946
1947
1948
1949

113
14.3
19 9
23 3
24.0
25 4
29.6
32 4
36 5
30.8

8.4
11.1
15 6
19.6
20.5
217
24.8
29 6
30.2
27.8

49
6.5
90
11.5
11.4
12 0
13.8
16 5
17.1
15.4

35
4.6
65
8.1
9.2
97
11.0
131
13.1
12.4

.3
.4
1.1
.1
-.4
-.4
.0
-1.8
1.7
-.9

6.9
7.8
10.0
11.6
12.3
13.1
14.5
17.0
18.8
18.0

4.5
6.5
9.9
11.7
11.7
12.3
15.1
15.4
17.7
12.8

10.7
14.7
20.2
22.7
22.2
22.8
25.8
23.0
24.5
17.9

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

33.1
38 3
37.8
34 4
34 2
33.5
34 0
34.8
39.0
37 9

28.5
32.9
32.5
310
29.8
29.5
30 4
29.7
33.5
33.6

16.1
19.6
18.2
16 9
16.3
16.0
16.4
17.4
19.2
18 9

12.4
13 2
14.3
141
13.6
13.5
14 0
12.3
14.2
14 7

.8
1.2
.9
-.6
.5
.2
-.5
.6
.8
.0

19.5
22.3
22.8
21.5
21.8
22.2
22.7
23.7
25.8
27.2

13.6
15.9
15.0
13.0
12.4
11.3
11.3
11.1
13.2
10.7

18.9
20.5
18.8
16.2
15.4
14.1
13.8
13.1
15.2
12.3

38 9
40 5
42.3
43 4
42.3
46.5
50.5
50 5
51.8
56.4

34 2
35.2
36.5
37 5
37.3
39.4
43.4
42 8
44.2
48.2

19 0
19 5
20.2
20 0
19.9
21.9
25.0
24 4
25.5
28.6

15 3
15 7
16.3
17 4
17.4
17.5
18.4
18 4
18.7
19.6

.4
.3
.6
.6
8
1.0
1
7
.1
.1

27.4
28.6
30.3
31.6
31.8
33.7
36.5
38.2
39.5
42.1

11.5
12.0
12.1
11.8
10.5
12.9
14.0
12.3
12.3
14.3

13.0
13.3
13.3
12.8
11.3
13.7
14.4
12.3
11.8
13.0

58.8
621
71.2
99.0
98.3
100 6
102.9
108.7
127 2
150.4

50.5
52 7
61.1
86.9
92.4
88 9
95.4
96.2
112 9
131.8

29.5
30 5
35.6
45.8
41.3
43 1
46.3
47.6
59 2
68.6

21.0
22 3
25.5
41.1
51.1
45 8
49.0
48.6
53 7
63.2

.0
1.4
.9
3.4
-1.6
3.4
-1.5
1.1
8
4.9

44.5
47.1
51.7
64.6
71.0
75.0
82.7
88.9
99.5
118.1

14.4
15.0
19.5
34.4
27.3
25.6
20.1
19.8
111
32.3

12.4
12.4
15.6
25.9
18.5
15.9
11.8
10.9
14.2
14.8

1980. .
1981
1982
1983 P

1501
167.1
162.2
158 6

140 5
142.3
144.6
142 4

67 8
69.2
70.2
70 7

111
73.1
74.4
717

-5.3
7.6
-1.9
-8.8

128.6
137.0
140.1
136.0

21.5
30.1
22.1
22.6

8.7
11.0
7.6
7.6

1981:
I
||
III
I
V

161.2
165 1
172.2
169.7

141.9
138 5
145.7
143.0

69.2
69 5
70.1
68.0

72.7
69 0
75.6
75.0

3.1
101
9.5
7.9

135.1
136 5
137.8
138.6

26.1
28.6
34.4
31.1

9.9
10.7
12.5
11.0

1982:
1
II
Ill
IV

168.4
158.5
155 9
165.8

147.6
142.0
142 3
146.3

70.7
71.0
70 2
68.9

76.9
71.0
72 1
77.4

2.0
-1.7
-3.5
-4.2

141.0
141.5
140.3
137.6

27.4
17.0
15.6
28.2

9.7
5.9
5.3
9.6

156.4
1531
154.1
170.6

144.5
1413
145.0
138.8

71.5
70 8
70.1
70.3

73.0
70 5
74.9
68.5

-8.6
-9.9
-12.3
-4.4

136.6
135.1
135.3
137.0

19.8
18.0
18.8
33.6

6.7
6.1
6.3
11.1

1960
1961..
1962
1963
1964
1965
1966
1967
1968
1969

.

1970
1971.
1972
1973
1974
1975.
197G
1977
1978.
1979

...

1983:
\p.

llp
Ill"
IV

. .

1
Cash marketing receipts and inventory changes plus Government payments, other farm cash income, and nonmoney income
furnished by farms.
2
Physical changes in end-of-period inventory of crop and livestock commodities valued at average prices during the period.
3

Income in current dollars divided by the consumer price index (Department of Labor).

Source: Department of Agriculture, except as noted.




325

TABLE B-93.—Farm output and productivity indexes, 1929-83
[1977 = 100]

Productivity indicators

Farm output
Crops2
Year
Feed
grains

Food
grains

Oil
crops

Crop
production
per
acre4

Farm output per lour of
farm work

Total

Crops

Livestock
and
products

1929

44

48

38

39

6

50

45

48

9

O

14

1933

42

43

35

27

5

54

46

43

9

O

13

1939

48

49

40

36

14

56

51

51

11

CM

14

1940
1941
1942
1943
1944

50
52
58

51
52
58
55
58

41
44
51
47
49

40
45
48
41
51

16
16
23
23
20

57
60
67
72
69

52
54
58
57
58

53
54
59
55
58

12
13
14

C

14
15
16
16
16

1945
1946
1947
1948
1949

58

56
59
56
64
61

47
51
39
57
50

53
55
64
62
53

20
19
22
27
26

68
66
64
67

58
61
59
63
61

57
60
57
64
60

51
47
50
49
51

49
49
63
57
51

26
26
26
26
28

70
73
74
74
77

61
61
63
64
65

59
59
62
62
61

22

63
66
66
66

59
60
62
62
61

o

Total3

Farm
output
per
unit of
total
input

o

Total»

Livestock
and
products2

20
22
23
24

2
2
2
4
2
5

20
21
22
23

69
69
67
73
74

63
63
62
69
68

54
54
58
64
66

48
50
47
69
55

30
34
33
39
36

79
79
78
79
83

67
68
69
74
74

63
64
65
73
72

26
28
29
33
35

28
30
33
38
37

24
25
26
28

76
76
77
80
79

72
70
71
74
72

69
62
62
68
59

66
60
56
59
65

38
43
44
46
46

82
86
86
89
91

77
78
79
82
82

77
78
81
83
81

37
39
41
45
47

41
42
45
47
49

cr

82
79
83
85
85

76
73
77
79
80

70
70
79
75
78

67
67
76
80
74

53
55
56
64
65

89
91
94
94
95

86
83
86
87
88

85
83
86
89
91

52
53
58
62
63

56
59
6366
68

45
49
53
55
59

1970
1971
1972
1973
1974

84
92
91
93
88

77
86
87
92
84

71
92
88
91
74

69
81
77
86
91

66
68
74
87
71

99
100
101
99
100

87
94
94
95
90

88
96
99
99
88

66
74
78
81
79

70
79
84
87
80

64
68
73
76
82

1975
1976
1977
1978
1979

95
97
100
104
111

93
92
100
102
113

91
96
100
108
116

108
107
100
93
108

86
74
100
105
129

95
99
100
101
104

99
98
100
102
106

96
94
100
105
113

89
94
100
109
119

89
91
100
105
118

85
93
100
109
118

1980
1981
1982
1983"

103
118
117
99

101
116
118
87

97
121
124
67

121
144
140
117

99
114
124
89

108
109
107
110

101
115
116
105

99
113
115
99

112
131
136
132

104
120
127
116

129
138
147
149

6
0

.. .

58
COCM
COCO

1
4
14

15

16

1
6

1
8
1
8

16

20
20

16
17
17
oooo

59

cooo

57

14
15
1
5
16

i—
CC

1950
1951
1952
1953
1954

. .
.

. .
.

I960
1961 . .
..
1962
1963
1964 . .
..
1965
1966
1967
1968
1969

.

. .
. .

26

co

1955
1956
1957
1958
1959

35
37
40
43

1
Farm output measures the annual volume of net farm production available for eventual human use through sales from farms or
consumption in farm households.
2
Gross production.
3
Includes items not included in groups shown.
4
Computed from variable weights for individual crops produced each year.
Source: Department of Agriculture.




326

TABLE B-94.—Farm input use, selected inputs, 1929-83
Selected indexes of input use ( 1 9 7 7 = 1 0 0 )

Farm employment
(thousands) 3

Farm population
April 1

Total

Family
workers

Hired
workers

Crops
harvested
(millions of
acres) 4

25.1

12,763

9,360

3,403

365

25.8

12,739

9,874

2,865

340

30,840

23.5

11,338

8,611

2,727

1940..
1941..
1942..
1943..
1944..

30,547
30,118
28,914
26,186
24,815

23.1
22.6
21.4
19.2
17.9

10,979
10,669
10,504
10,446
10,219

8,300
8,017
7,949
8,010
7,988

1945
1946
1947
1948
1949

24,420
25,403
25,829
24,383
24,194

17.5
18.0
17.9
16.6
16.2

10,000
10,295
10,382
10,363
9,964

1950..
1951..
1952..
1953..
1954..

23,048
21,890
21,748
19,874
19,019

15.2
14.2
13.9
12.5
11.7

1955
1956
1957
1958
1959

19,078
18,712
17,656
17,128
16,592

I960....
1961....
1962....
1963....
1964....
1965

Number
(thousands)

As
percent
of
total
population 2

1929..

30,580

1933..

32,393

1939..

Year

1966
1967....
1968....
1969....

1980
1981
1982
1983'...

Feed,
seed,
and
livestock
purchases6

Farm
labor

99

469

106

28

93

457

99

26

331

96

419

104

2,679
2,652
2,555
2,436
2,231

341
344
348
357
362

97
97
100
101
102

417
411
421
416
412

106
104
102
101
101

9
9
10
11
13

39
42
44
48
48

7,881
8,106
8,115
8,026
7,712

2,119
2,189
2,267
2,337
2,252

354
352
355
356
360

100
98
98
100
102

386
371
351
342
329

101
105
106
106
107

13
14
15
16
18

50
49
51
52
56

9,926
9,546
9,149
8,864
8,651

7,597
7,310
7,005
6,775
6,570

2,329
2,236
2,144
2,089
2,081

345
344
349
348
346

101
104
104
103
102

310
310
296
285
274

108
108
107
107
107

19
21
23
24
24

58
62
63
63
65

11.5
11.1
10.3
9.8
9.3

8,381
7,852
7,600
7,503
7,342

6,345
5,900
5,660
5,521
5,390

2,036
1,952
1,940
1,982
1,952

340
324
324
324
324

102
100

99

264
249
231
222
216

107
105
104
103
104

26
27
27
28
32

66
69
68
73
77

15,635
14,803
14,313
13,367
12,954

8.7
8.1
7.7
7.1
6.7

7,057
6,919
6,700
6,518
6,110

5,172
5,029
4,873
4,738
4,506

1,885
1,890
1,827
1,780
1,604

324
302
295
298
298

207
198
189
183
174

103
102
103
103
103

8
3

97
97
97
97

32
35
38
43
46

77
81
83
83
85

12,363
11,595
10,875
10,454
10,307

6.4
5.9
5.5
5.2
5.1

5,610
5,214
4,903
4,749
4,596

4,128
3,854
3,650
3,535
3,419

1,482
1,360
1,253
1,213
1,176

298
294
306
300
290

96
96
97
97
97

156
147
143
138
133

102
101
103
102
101

80
82
85
86
86

49
56
66
69
73

92
89
93

9,712
9,425
9,610
9,472
9,264

4.7
4.5
4.6
4.5
4.3

4,523
4,436
4,373
4,337
4,389

3,348
3,275
3,228
3,169
3,075

1,175
1,161
1,146
1,168
1,314

293
305
294
321
328

97
98
97
98
98

126
123
117
115
112

104
102
101
100
98

85
87
86
90
92

75
81
86
90
92

96
102
104
107
99

4.1
3.8
2.8
2.9
2.8

4,342
4,374
4,155
3,957
3,774

3,026
2,997
2,859
2,689
2,501

1,317
1,377
1,296
1,268
1,273

336
337
345
338
349

96
99
100
102
105

107
103
100
95
93

97
98
100
100
100

96
98
100
104
107

83
96
100
107
118

93
101
100
104
111

1,303
1,317
1,330
1,344

352
366
365
304

103
102
100
94

92
90
86

101
101
102

104
103
99

120
121
111

108
104
105

1970....
1971....
1972....
1973....
1974....
1975....
1976....
1977....
1978....
1979....

Mechanical
power
and
machinery

Farm
real
estate

8,864
8,253
6,194
7
6,501
7
6,241

7

7

7

7

7
7

6,051
5,790
5,620

7
7

7
7

2.7
2.5
2.4

8

3,705 2,402
3,641 • 2,324
3,578
2,248
2,174
3,518

J

Total

cultural
chemicals 5

37

}
Farm population as defined by Department of Agriculture and Department of Commerce, i.e., civilian population living on farms in
rural areas, regardless of occupation. See also footnote 7.
2
Total population of United States including Armed Forces overseas, as of July 1.
3
Includes persons doing farmwork on all farms. These data, published by the Department of Agriculture, differ from those on
agricultural employment by the Department of Labor (see Table 6-29) because of differences in the method of approach, in concepts of
employment, and in time of month for which the data are collected.
4
Acreage harvested plus acreages in fruits, tree nuts, and farm gardens.
5
Fertilizer, lime, and pesticides.
6
Nonfarm constant dollar value of feed, seed, and livestock purchases.
7
Based on new definition of a farm. Under old definition of a farm, farm population (in thousands and as percent of total
population) for 1977, 1978, 1979, 1980, 1981, and 1982 is 7,806 and 3.6; 8,005 and 3.6; 7,553 and 3.4; 7,241 and 3.2; 6,942 and 3.0;
and 6,870 and 3.0, respectively.
8
Previous basis for farm employment series has been discontinued. Employment after 1980 is estimated.

Note.—Population includes Alaska and Hawaii beginning 1960.
Sources: Department of Agriculture and Department of Commerce (Bureau of the Census).




327

TABLE B-95.—Indexes of prices received and prices paid by farmers,

1946-83

[1977=100]
Prices received by farmers

Year or month

1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983"
1982:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1983:
Jan
Feb
Mar
May"..
June...
July....
Aug....

S

All
farm
products

Crops

Livestock
and
products

Prices paid by farmers
All
commodities,
services,
interest,
taxes,
and
wage
rates 1

Production items

Total

2

Tractors
and
selfpropelled
machinery

Fertilizer

Fuels
and
energy

Wage
rates

39
40
42
44
47
49
51
54
58
68
82
91
100
109
122
136
152
165
174

45
50
55
56
54
57
59
59
59
58
57
58
58
57
57
58
58
57
57
57
56
55
52
48
48
50
52
56
92
120
102
100
100
108
134
144
144
137

49
49
50
50
51
52
53
54
57
79
88
93
100
105
137
188
213
210
202

20
22
23
22
22
25
26
27
27
27
28
29
30
32
33
33
34
35
36
38
41
44
48
53
57
59
63
69
79
85
93
100
107
117
126
137
143
147

147
148
149
149
150
151
151
150
149
148
148
148

159
159
161
161
161
167
167
167
168
168
168
168

143
143
147
147
146
146
146
146
146
141
141
139

217
215
206
199
201
211
214
212
212
211
212
209

143
143
143
143
143
143
143
143
143
143
143
143

150
151
152
153
154
154
152
153
154
153
154
155

168
168
172
172
172
176
176
176
177
177
177
177

139
139
138
138
138
138
138
138
138
134
134
136

205
199
191
198
203
204
205
206
206
206
203
201

147
147
147
147
147
147
147
147
147
147
147
147

52
60
63
55
56
66
63
56
54
51
50
51
55
53
52
53
53
53
52
54
58
55
56
59
60
62
69
98
105
101
102
100
115
132
134
139
133
135

53
61
59
52
54
61
62
55
56
53
54
52
52
51
51
52
54
55
55
53
55
52
52
50
52
56
60
91
117
105
102
100
105
116
125
134
121
128

50
60
65
56
58
70
64
56
52
49
47
51
57
53
53
52
53
51
49
54
60
57
60
67
67
67
77
104
94
98
101
100
124
147
144
143
145
141

30
35
38
36
37
41
42
40
40
40
40
42
43
43
44
44
45
45
45
47
49
49
51
53
55
58
62
71
81
89
95
100
108
123
138
150
156
160

33
39
43
41
42
47
47
44
44
43
43
44
46
46
46
46
47
47
47
48
50
50
50
52
54
57
61
73
83
91
97
100
108
125
138
148
149
153

132
133
133
135
139
138
137
133
136
128
128
127

126
123
120
123
126
125
125
117
124
114
117
114

137
143
145
147
151
150
147
148
147
142
139
139

154
154
155
155
156
156
157
157
157
156
156
156

128
132
134
136
137
134
131
139
136
134
135
140

114
118
121
127
129
126
125
139
135
134
134
136

142
146
146
145
144
141
137
139
137
135
135
144

157
158
159
159
160
160
160
160
161
161
162
162

Addendum:
Average
farm
real
estate
value
per
acre3
11
13
14
14
14
16
18
18
18
19
19
21
22
23
24
25
26
27
29
31
33
35
38
40
42
43
47
53
66
75
86
100
109
125
145
158
157
148

157

148

Nov
1
Dec
Includes items used for family living, not shown separately.
2
Includes other items not shown separately.
3
Average for 48 States. Annual data are for March 1 of each year through 1975, for February 1 for 1976 through 1981, and for
April 1 for 1982 and 1983. Monthly data are for first of month.
Source-. Department of Agriculture.




328

TABLE B-96.— U.S. exports and imports of agricultural commodities, 1940-83
[Billions of dollars]
Exports

Year
Total

1

1940
1941
1942
1943
1944

0.5
.7
1.2
2.1
2.1

1945
1946
1947
1948
1949

2.3
3.1
4.0
3.5
3.6

1950
1951
1952
1953
1954

Feed
grains

Food
grains 2

Oilseeds
and
products

Imports

Cotton

Tobacco

Animals
and
products

Total

1

Crops,
fruits,
and
vegetables 3

Animals
and
products

Coffee

Cocoa
beans
and
products

Agricultural
trade
balance

-0.8
-1.0
-.1
.6
.3

0.2
.3
.5
.4
.3

0.1
.2

1.7
2.3
2.8
3.1
2.9

.4
.4
.4
.6
.4

.3
.5
.6

.3
.5
.3
.4
.5

4.0
5.2
4.5
4.2
4.0

.7
1.1
.7
.6
.5

1.1
1.4
1.4
1.5
1.5

-1.1
-1.1
-1.1
-1.3
—.9

.6

4.0
4.0
4.0
3.9
4.1

.5
.4
.5
.7

1.4
1.4
1.4
1.2
1.1

.2
.6
(4)

3.8
3.7
3.9
4.0
4.1

1.0
1.0
1.0
1.0
1.2

1.0
1.3
1.2
1.6
2.3

4.1
4.5
4.5
5.0
5.0

1.1
1.1
1.0
1.2
.9

2.1
2.4
1.9
1.3
1.1

!9
1.3

.9
1.0
1.1
1.6
1.8

5.8
5.8
6.5
8.4
10.2

1.2
1.2
1.3
1.7
1.6

1.5
1.9
2.9
9.3
11.7

4.5
5.1
6.6
8.2
8.9

1.0
1.0
1.5
1.7
2.2

1.7
2.4
2.7
3.0
3.8

9.3
11.0
13.4
14.8
16.7

1.7
2.9
4.2
4.0
4.2

12.6
12.0
10.2
14.6
18.0

9.4
9.6
9.1

2.9
2.3
2.0

3.8
4.2
3.9

17.4
16.8
15.2

4.2
2.9
2.9

23.9
26.6
21.4

3.6
2.8

14.1
15.3

0.1

0.2
.1
.1
.2
.1

.2
.1

.8
1.2
1.3

1.3
1.7
1.3
1.5
1.8

.3
.5
.4
.5
.9

.2
.4
.3
.2
.3

.9
.9
.7
.5
.4

2.9
4.0
3.4
2.8
3.1

1.0
1.1
.9
.5

.3
.3
.2
.3
.3

1955
1956
1957
1958
1959

3.2
4.2
4.5
3.9
4.0

.5
.7
1.0
.7
.4

.4
.3
.4
.4
.3

J
.5
.6

1960
1961
1962
1963
1964

4.8
5.0
5.0
5.6
6.3

1.2
1.4
1.3
1.5
1.7

.6
.6
.7
.8
1.0

1.0
.9

.4
.4
.4
.4
.4

1965
1966
1967
1968
1969

6.2
6.9
6.4
6.3
6.0

1.4
1.8
1.5
1.4
1.2

1.2
1.2
1.3
1.3
1.3

.5
.4
.5
.5
.3

1970
1971
1972
1973
1974

7.3
7.7
9.4
17.7
"21.9

1.4
1.3
1.8
4.7
5.4

1.9
2.2
2.4
4.3
5.7

.4
.6

1975
1976
1977
1978
1979

21.9
23.0
23.6
29.4
34.7

6.2
4.7
3.6
5.5
6.3

1980
1981
1982

41.2
43.3
36.6

7.9
9.6
7.9

Jan-Nov:
1982....
1983....

33.7
32.6

PI
(4)

'.S
.7

.6
.6
.6
.7

.4
.5
.5
.5

5.9
6.5

5

()
0.1

5

3.3
3.2

.3
.3

'.S

'.S
1.2
.3
.7

19.7
17.3

1

Total includes items not shown separately.
Rice, wheat, and wheat flour.
Includes nuts, fruits, and vegetable preparations.
4
Less than $50 million.
5
Total includes major animal products.
2
3

Note.—Data derived from official estimates released by the Bureau of the Census, Department of Commerce. Agricultural commodities
are defined as (1) nonmarine food products and (2) other products of agriculture which have not passed through complex processes of
manufacture. Export value, at U.S. port of exportation, is based on the selling price and includes inland freight, insurance, and other
charges to the port. Import value, defined generally as the market value in the foreign country, excludes import duties, ocean freight,
and marine insurance.
Source: Department of Agriculture.




329

TABLE B-97.—Balance sheet of the farming sector, 1929-84
[Billions of dollars]
Assets

Claims
Financial assets

Other physical assets
Beginning of
year

Total

Real
estate

Livestock 1

Machinery and
Crops 2
motor
vehicles

1929

48.0
30.8
34.1

51
.

Investments in
cooperatives

Total

3.0

1939

Deposits
U.S.
and
savings
curbonds
rency

6.6

1933...

Household
equipment
and
furnishings

32
.

estate
debt

Other
debt

Proprietors'
equities

98
.
8.5
6.8

1940
1941
1942
1943
1944

53.0
54.8
62.9
73.6
84.0

33.6
34.4
37.5
41.6
48.2

5.1
5.3
7.1
9.6
9.7

3.1
3.3
4.0
4.9
5.4

2.7
3.0
3.8
5.1
6.1

4.2
4.1
4.8
4.8
4.7

3.2
3.5
4.2
5.4
6.6

0.2
.4
.5
1.1
2.2

0.8
.9
.9
1.0
1.1

53.0
54.8
62.9
73.6
84.0

6.6
6.5
6.4
6.0
5.4

3.4
4.0
4.1
3.9
3.5

43.0
44.3
52.5
63.8
75.1

1945
1946
1947
1948
1949

93.8
102.9
115.9
127.4
134.6

53.9
61.0
68.5
73.7
76.6

9.0
9.7
11.9
13.3
14.4

6.5
5.4
5.3
7.4
10.1

6.7
6.3
7.1
9.0
8.6

5.2
5.6
7.2
8.1
8.9

7.9
9.4
10.2
9.9
9.6

3.4
4.2
4.2
4.4
4.6

1.2
1.4
1.5
1.7
1.9

93.8
102.9
115.9
127.4
134.6

4.9
4.8
4.9
5.1
5.3

3.4
3.1
3.5
4.2
6.1

85.4
95.0
107.5
118.1
123.3

1950
1951
1952
1953
1954

134.5
154.3
170.1
167.6
164.5

77.6
89.5
98.5
100.1
98.7

12.9
17.1
19.5
14.8
11.7

12.2
14.1
16.7
17.4
18.4

7.6
7.9
8.8
9.0
9.1

8.4
9.6
10.1
9.6
9.5

9.1
9.1
9.4
9.4
9.4

4.7
4.7
4.7
4.6
4.7

2.1
2.3
2.5
2.7
2.9

134.5
154.3
170.1
167.6
164.5

5.6
6.1
6.7
7.2
7.7

6.9
7.0
8.0
8.9
9.2

122.1
141.3
155.5
151.5
147.6

1955
1956
1957
1958
1959

168.9
173.6
182.8
191.3
207.6

102.2
107.5
115.7
121.8
131.1

11.2
10.6
11.0
13.9
17.7

18.7
19.3
20.2
20.1
21.8

9.6
8.3
8.3
7.6
9.3

9.7
10.0
9.6
9.6
9.4

9.4
9.5
9.4
9.5
10.0

5.0
5.2
5.1
5.1
5.2

3.0
3.2
3.5
3.7
3.9

168.9
173.6
182.8
191.3
207.6

8.2
9.0
9.8
10.4
11.1

9.4
9.8
9.5
10.0
12.6

151.2
154.9
163.4
170.8
183.9

1960
1961
1962
1963
1964

210.2
210.9
219.3
227.6
235.8

137.2
138.5
144.5
150.2
158.6

15.2
15.6
16.4
17.3
15.9

22.7
22.2
22.5
23.5
23.9

7.7
8.0
8.8
9.3
9.8

9.2
8.7
8.9
8.8
8.8

9.2
8.7
8.8
9.2
9.2

4.7
4.6
4.5
4.4
4.2

4.2
4.5
4.8
5.0
5.4

210.2
210.9
219.3
227.6
235.8

12.1
12.8
13.9
15.2
16.8

12.7
13.4
14.6
16.2
17.6

185.4
184.7
190.9
196.2
201.4

1965
1966
1967
1968
1969

243.8
260.8
274.3
288.0
302.8

167.5
179.2
189.1
199.7
209.2

14.5
17.6
19.0
18.8
20.2

24.8
26.0
27.4
29.8
31.3

9.2
9.7
10.0
9.6
10.6

8.4
8.4
8.3
8.8
9.4

9.6
10.0
10.3
10.9
11.5

4.2
4.1
3.9
3.8
3.8

5.6
5.9
6.2
6.5
6.8

243.8
260.8
274.3
288.0
302.8

18.9
21.2
23.1
25.1
27.4

17.9
19.5
20.9
22.3
23.1

207.0
220.1
230.2
240.6
252.3

1970
1971
1972
1973
1974

314.9
326.0
351.8
394.8
478.5

215.8
223.2
239.6
267.3
327.7

23.5
23.7
27.3
34.1
42.4

32.3
34.4
36.6
39.3
44.2

10.9
10.7
11.8
14.5
22.0

9.6
10.0
10.8
11.9
12.3

11.9
12.4
13.2
14.0
14.9

3.7
3.6
3.7
4.0
4.2

7.2
8.0
8.8
9.8
10.9

314.9
326.0
351.8
394.8
478.5

29.2
30.3
32.2
35.1
39.5

23.8
24.1
27.4
29.8
33.8

261.9
271.5
292.2
330.0
405.2

1975 3
1976
1977
1978
1979

502.6
576.3
664.2
736.5
873.4

359.7
418.1
496.4
554.7
655.0

24.5
29.4
29.0
31.9
51.3

54.7
64.0
71.0
77.0
85.1

23.3
21.3
22.1
24.8
28.0

11.2
11.7
12.1
13.8
16.0

14.0
14.5
14.8
15.2
15.5

3.8
3.9
3.8
3.9
4.2

11.4
13.4
14.9
15.4
18.3

502.6
576.3
664.2
736.5
873.4

44.6
49.6
55.2
63.3
71.4

37.0
42.0
48.7
59.4
69.4

421.0
484.8
560.4
613.8
732.6

1980
1981
1982
19834
1984

1,005.5
1,089.8
1,083.4
1,048.8
1,067.6

755.9
828.4
818.9
772.5
792.0

61.4
60.8
53.6
52.9
51.3

96.8
102.5
108.8
111.0
113.8

33.5
35.9
36.3
42.1
37.0

17.2
19.4
20.8
22.6
23.5

15.9
16.2
16.7
17.4
18.2

4.0
3.8
3.6
3.5
3.6

20.8
22.8
24.6
26.8
28.2

1,005.5
1,089.8
1,083.4
1,048.8
1,067.6

85.4
95.5
105.5
109.5
111.9

80.4
86.5
96.1
106.8
103.2

839.7
907.8
881.7
832.5
852.5

1
2
3
4

Beginning with 1961, horses and mules are excluded.
Includes all crops held on farms and crops held off farms by farmers as security for Commodity Credit Corporation loans.
Beginning 1975, data are for farms included in the new farm definition, that is, places with sales of $1,000 or more annually.
Forecast.

Note.—Beginning 1960, data include Alaska and Hawaii.
Source: Department of Agriculture.




330

INTERNATIONAL STATISTICS
TABLE B-98.— Exchange rates, 1967-83
[Cents per unit of foreign currency, except as noted]
Year and month

Belgian franc

Canadian
dollar

French franc

German mark

Italian lira

Japanese yen

March 1973

2.5378

100.333

22.191

35.548

0.17604

0.38190

1967
1968
1969

2.0125
2.0026
1.9942

92.689
92.801
92.855

20.323
20.191
19.302

25.084
25.048
25.491

.16022
.16042
.15940

.27613
.27735
.27903

1970
1971
1972
1973
1974

2.0139
2.0598
2.2716
2.5761
2.5713

95.802
99.021
100.937
99.977
102.257

18.087
18.148
19.825
22.536
20.805

27.424
28.768
31.364
37.758
38.723

.15945
.16174
.17132
.17192
.15372

.27921
.28779
.32995
.36915
.34302

1975
1976
1977
1978
1979

2.7253
2.5921
2.7911
3.1809
3.4098

98.297
101.410
94.112
87.729
85.386

23.354
20.942
20.344
22.218
23.504

40.729
39.737
43.079
49.867
54.561

.15338
.12044
.11328
.11782
.12035

.33705
.33741
.37342
.47981
.45834

1980
1981
1982
1983

3.4247
2.7007
2.1844
1.9561

85.530
83.408
81.011
81.136

23.694
18.489
15.199
13.123

55.089
44.362
41.186
39.156

.11694
.08842
.07386
.06582

.44311
.45432
.40151
.42096

1982:
1
II
Ill
IV

2.4166
2.2216
2.1017
2.0529

82.721
80.366
80.022
81.199

16.686
15.949
14.396
14.143

42.630
42.048
40.268
39.998

.07932
.07575
.07169
.06968

.42821
.41003
.38614
.38697

1983:
1
II
Ill
IV

2.1110
2.0178
1.8838
1.8357

81.463
81.214
81.110
80.743

14.517
13.403
12.561
12.251

41.513
40.256
37.828
37.344

.07139
.06773
.06351
.06156

.42436
.42109
.41252
.42714

Netherlands
guilder

Swedish krona

Swiss franc

United Kingdom
pound

Multilateral trade-weighted value of
the U.S. dollar (March 1973=100)
Nominal

Real1

March 1973

34.834

22.582

31.084

247.24

100.0

1967
1968
1969

27.759
27.626
27.592

19.373
19.349
19.342

23.104
23.169
23.186

275.04
239.35
239.01

120.0
122.1
122.4

1970
1971
1972
1973
1974

27.651
28.650
31.153
35.977
37.267

19.282
19.592
21.022
22.970
22.563

23.199
24.325
21.193
31.700
33.688

239.59
244.42
250.08
245.10
234.03

121.1
117.8
109.1
99.1
101.4

98.8
99.2

1975
1976
1977
1978
1979

39.632
37.846
40.752
46.284
49.843

24.141
22.957
22.383
22.139
23.323

38.743
40.013
41.714
56.283
60.121

222.16
180.48
174.49
191.84
212.24

98.5
105.6
103.3
92.4
88.1

93.9
97.3
93.1
84.2
83.2

1980

50.369
40.191
37.427
35.035

23.647
19.860
15.914
13.035

59.697
51.025
49.196
47.605

232.58
202.43
174.80
151.59

87.4
102.9
116.6
125.3

84.8
100.8
111.7
117.3

II
Ill
IV

38.836
37.920
36.609
36.526

17.432
16.929
16.229
13.660

53.358
50.124
47.272
46.739

184.61
177.95
172.41
164.81

109.9
114.0
119.8
122.2

106.0
109.2
115.3
116.1

1983:
1
II
III....
IV

37.545
35.820
33.816
33.300

13.486
13.260
12.806
12.626

49.595
48.178
46.563
46.306

153.28
155.21
150.95
146.91

119.4
123.0
128.7
130.2

112.1
115.3
120.5
121.3

1981
1982
1983
1982:
1

1
Adjusted by changes in consumer prices.
Source: Board of Governors of the Federal Reserve System.




331

100.0

TABLE B-99.—U.S. international transactions, 1946-83
[Millions of dollars; quarterly data seasonally adjusted, except as noted. Credits ( + ), debits ( - ) ]
Investment income3

Merchandise1 2
Year or
quarter
Exports

Imports

Net

Receipts Payments

Net

Net
Net
travel Other Balance
serv- on goods
military
and
and
transac- transpor- ices,
net 3 services 14
tions
tation
receipts

RemitBalance
tances,
on
pensions, current
and other
ac- 14
unilateral
transfers l count

1946
1947
1948
1949

11,764
16,097
13,265
12,213

-5,067
-5,973
-7,557
-6,874

6,697
10,124
5,708
5,339

772
1,102
1,921
1,831

-212
-245
-437
-476

560
857
1,484
1,355

-493
-455
-799
-621

733
946
374
230

310
145
175
208

7,807
11,617
6,942
6,511

-2,922
-2,625
-4,525
-5,638

4,885
8,992
2,417
873

1950
1951
1952
1953
1954

10,203
14,243
13,449
12,412
12,929

-9,081
-11,176
-10,838
-10,975
-10,353

1,122
3,067
2,611
1,437
2,576

2,068
2,633
2,751
2,736
2,929

-559
-583
-555
-624
-582

1,509
2,050
2,196
2,112
2,347

-576
-1,270
-2,054
-2,423
-2,460

-120
298
83
-238
-269

242
254
309
307
305

2,177
4,399
3,145
1,195
2,499

-4,017
-3,515
-2,531
-2,481
-2,280

-1,840
884
614
-1,286
219

1955
1956
1957
1958
1959

14,424
17,556
19,562
16,414
16,458

-11,527
-12,803
-13,291
-12,952
-15,310

2,897
4,753
6,271
3,462
1,148

3,406
3,837
4,180
3,790
4,132

-676
-735
-796
-825
-1,061

2,730
3,102
3,384
2,965
3,071

-2,701
-2,788
-2,841
-3,135
-2,805

-297
-361
-189
-633
-821

299
447
482
486
573

2,928
5,153
7,107
3,145
1,166

-2,498
-2,423
-2,345
-2,361
-2,448

430
2,730
4,762
784
-1,282

1960
1961
1962
1963
1964

19,650
20,108
20,781
22,272
25,501

-14,758
-14,537
-16,260
-17,048
-18,700

4,892
5,571
4,521
5,224
6,801

4,616
4,999
5,618
6,157
6,824

-1,237
-1,245
-1,324
-1,561
-1,784

3,379
3,754
4,294
4,596
5,040

-964
-2,752
-978
-2,596
-2,449 -1,152
-2,304 -1,309
-2,133 -1,146

579
594
809
960
1,041

5,132
6,346
6,025
7,167
9,604

-2,308
-2,524
-2,638
-2,754
-2,781

2,824
3,822
3,387
4,414
6,823

1965
1966
1967
1968
1969

26,461
29,310
30,666
33,626
36,414

-21,510
-25,493
-26,866
-32,991
-35,807

4,951
3,817
3,800
635
607

7,437
7,528
8,020
9,368
10,912

-2,088
-2,481
-2,747
-3,378
-4,869

5,349
5,047
5,273
5,990
6,043

-2,122
-2,935
-3,226
-3,143
-3,328

-1,280
-1,331
-1,750
-1,548
-1,763

1,387
1,365
1,612
1,630
1,833

8,285
5,963
5,708
3,563
3,393

-2,854
-2,932
-3,125
-2,952
-2,994

5,432
3,031
2,583
611
399

1970
1971
1972
1973
1974

42,469 -39,866
43,319 -45,579
49,381 -55,797
71,410 -70,499
98,306 -103,811

2,603
-2,260
-6,416
911
-5,505

11,747
12,707
14,764
21,808
27,587

-5,516
-5,436
-6,572
-9,655
-12,084

6,231
7,271
8,192
12,153
15,503

-3,354
-2,893
-3,420
-2,070
-1,653

-2,038
-2,345
-3,063
-3,158
-3,184

2,180
2,495
2,766
3,184
3,986

5,625
2,269
-1,941
11,021
9,147

-3,294
-3,701
-3,854
-3,881
5
-7,186

2,331
-1,433
-5,795
7,140
1,962

1975
1976
1977
1978
1979

107,088
114,745
120,816
142,054
184,473

-98,185
8,903
-124,228 -9,483
-151,907 -31,091
-176,020 -33,966
-212,028 -27,555

25,351
29,286
32,179
42,245
64,132

-12,564
-13,311
-14,217
-21,680
-32,914

12,787
15,975
17,962
20,565
31,218

-746
559
1,528
621
-1,778

-2,792
-2,558
-3,565
-3,573
-2,935

4,598
4,711
5,272
6,013
5,735

22,749
9,205
-9,894
-10,340
4,686

18,136
-4,613
4,207
-4,998
-4,617 -14,511
-5,106 -15,446
-964
-5,649

1980
1981
1982

224,237 -249,781 -25,544
237,019 -265,086 -28,067
211,217 -247,606 -36,389

72,445
86,243
84,146

-42,875
-52,760
-56,842

29,570
33,483
27,304

-2,286 -1,434
-598
-1,355
179 -2,095

7,172
8,060
7,822

7,477
11,523
-3,177

421
-7,056
4,592
-6,931
-8,034 -11,211

1981:
I
II
Ill
IV

60,793
60,031
57,812
58,383

-65,275
-67,373
-66,214
-66,224

-4,482
-7,342
-8,402
-7,841

20,683
21,717
22,043
21,801

-12,477
-13,505
-13,888
-12,892

8,206
8,212
8,155
8,909

-583
-435
179
-515

-266
-178
-184
30

1,964
2,052
2,053
1,988

4,839
2,309
1,801
2,571

-1,495
-1,567
-1,884
-1,986

3,344
742
-83
585

1982:
1
II
Ill
IV

55,636
54,996
52,241
48,344

-61,739 -6,103
-60,850 -5,854
-65,319 -13,078
-59,698 -11,354

20,761
22,316
21,569
19,499

-13,824
-14,779
-14,748
-13,491

6,937
7,537
6,821
6,008

-51
201
54
-26

-208
-561
-557
-769

2,050
1,914
1,906
1,951

2,625
3,236
-4,854
-4,190

-2,061
-1,802
-1,742
-2,431

564
1,434
-6,596
-6,621

1983:
I
II
Ill"

49,506
48,913
50,585

8,810
58,316
-63,574 -14,661
-68,754 -18,169

17,697
19,027
20,622

12,608
-13,326
-13,694

5,089
5,701
6,928

516
935
117 -1,222
-21
-745

2,114
2,234
2,092

2,026
-7,832
-9,915

-1,561 -3,587
-1,823 -9,655
-2,061 -11,976

1
2
3

Excludes military.
Adjusted from Census data for differences in valuation, coverage, and timing.
Fees and royalties from U.S. direct investments abroad or from foreign direct investments in the United States are excluded from
investment income and included in other services, net.
4
In concept, balance on goods and services is equal to net exports and imports in the national income and product accounts (and
the sum of balance on current account and allocations of special drawing rights is equal to net foreign investment in the accounts),
although the series differ because of different handling of certain items (gold, extraordinary military shipments, etc.), revisions, etc.
See next page for continuation of table.




3S2

TABLE B-99.—U.S. international transactions, 1946-83—Continued
[Millions of dollars,- quarterly data seasonally adjusted, except as noted]
Foreign assets in the U.S., net
[increase/capital inflow ( + )]

U.S. assets abroad, net
[increase/capital outflow ( - ) ]
Year or
quarter

U.S.
official
reserve
assets 6

Total

1946
1947
1948
1949

Total

Foreign
official
assets

Other
foreign
assets

Total
(sum of
the items
with sign
reversed)

Of which:
Seasonal
adjustment
discrepancy

1,758
33
415
1,256
480

1955
1956
1957
1958
1959

U.S.
private
assets

Statistical
discrepancy

623
3 315
-1736
266

1950
1951
1952
1953
1954

Other
U.S.
Government
assets

Allocations of
special
drawing
rights
(SDRs)

182
-869
-1,165
2,292
1,035

1960
1961
1962
1963
1964

-4,099
-5,538
-4,174
-7,270
-9,560

2,145
607
1,535
378
171

-1,100
-910
-1,085
-1,662
-1,680

-5,144
-5,235
-4,623
-5,986
-8,050

2,294
2,705
1,911
3,217
3,643

1,473
765
1,270
1,986
1,660

821
1,939
641
1,231
1,983

-1,019
-989
-1,124
-360
907

1965
1966
1967
1968
1969

-5,716
-7,321
-9,757
-10,977
-11,585

1,225
570
53
870
-1,179

-1,605
-1,543
-2,423
-2,274
-2,200

-5,336
-6,347
-7,386
-7,833
-8,206

742
3,661
7,379
9,928
12,702

134
-672
3,451
-774
-1,301

607
4,333
3,928
10,703
14,002

-458
629
-205
438
-1,516

1970
1971
1972
1973
1974

-9,337
-12,475
-14,497
-22,874
-34,745

2,481
2,349
-4
158
-1,467

1,589
-1,884
-1,568
-2,644
5
366

10,229
-12,940
-12,925
-20,388
-33,643

6,359
22,970
21,461
18,388
34,241

6,908
26,879
10,475
6,026
10,546

-550
-3,909
10,986
12,362
23,696

1975
1976
1977
1978
1979

-39,703
-51,269
-34,785
-61,130
-64,331

-849
-2,558
-375
732
-1,133

-3,474
-4,214
-3,693
4,660
-3,746

-35,380
-44,498
-30,717
-57,202
-59,453

15,670
36,518
51,319
64,036
38,752

7,027
17,693
36,816
33,678
-13,665

8,643
18,826
14,503
30,358
§2,416

1980
1981
1982

-86,052
-110,601
-118,045

-8,155
-5,175
-4,965

-72,757
-5,140
-5,078 -100,348
-5,732 -107,348

54,922
80,678
87,866

15,566
5,430
3,172

39,356
75,248
84,694

1,152
1,093

29,556
24,238
41,390

1981
1
II
III
IV

-23,335
-22,170
-17,279
-47,817

-4,529
-905
-4
262

-1,361
-1,469
-1,274
-973

-17,445
-19,796
-16,001
-47,106

8,437
13,959
16,731
41,551

5,517
-2,999
-5,880
8,792

2,920
16,958
22,611
32,760

1,093

10,460
7,470
632
5,680

-1,057
855
-1,145
1,350

1982
1
II
III
IV

-31,456
-40,934
-26,099
-19,553

-1,089
-1,132
-794
-1,950

807
1,489
-2,502
-934

29,560
38,313
-22,803
-16,670

27,124
31,612
17,613
11,517

3,061
1,930
2,642
1,661

30,185
29,682
14,972
9,855

3,768
7,887
15,082
14,657

-729
881
-1,190
1,042

1983
1
II
Ill P

-21,699
-658
-6,429

-787
16
529

-1,053
-1,162
-1,188

-19,859
488
-5,770

16,452
10,956
18,487

49
1,973
-3,235

16,403
8,983
21,722

8,833
-644
-82

-212
792
-1,355

867
717
710

1,139

219
-9,779
1,879
-2,654
-1,458
5,897
10,544
-2,023
12,540
25,404

5

Includes extraordinary U.S. Government transactions with India.
Consists of gold, special drawing rights, convertible currencies, and the U.S. reserve position in the International Monetary Fund
(IMF).
6

Note.—Quarterly data for U.S. official reserve assets and foreign assets in the United States are not seasonally adjusted.
Source: Department of Commerce, Bureau of Economic Analysis.

424-456




0 - 8 4 - 2 2

333

TABLE B-100.—U.S. merchandise exports and imports by principal end-use category, 1965-83
[Millions of dollars,- quarterly data seasonally adjusted]

Imports

Exports

Nonagricultural

Nonpetroleum

Year or quarter
Total

Agricultural
Total

Capital
goods
except
automotive

Total
Other
goods

Petroleum
and
products

Total

Industrial
supplies
and
materials

Other
goods

1965
1966
1967
1968
1969

26,461
29,310
30,666
33,626
36,414

6,305
6,949
6,453
6,297
6,098

20,156
22,361
24,213
27,329
30,316

8,052
8,907
9,934
11,111
12,422

12,104
13,454
14,279
16,218
17,894

21,510
25,493
26,866
32,991
35,807

2,034
2,078
2,091
2,384
2,649

19,476
23,415
24,775
30,607
33,158

9,123
10,235
9,956
12,027
11,662

10,353
13,180
14,819
18,580
21,496

1970..
1971..
1972..
1973..
1974..

42,469
43,319
49,381
71,410
98,306

7,381
7,836
9,514
17,977
22,410

35,088
35,482
39,868
53,433
75,896

14,659
15,372
16,914
21,999
30,878

20,429
20,110
22,954
31,434
45,018

39,866
45,579
55,797
70,499
103,811

2,929
3,641
4,650
8,415
26,608

36,939
41,937
51,147
62,085
77,204

12,250
13,595
16,002
19,188
27,421

24,689
28,342
35,145
42,897
49,783

1975....
1976....
1977....
1978....
1979....

107,088
114,745
120,816
142,054
184,473

22,243
23,380
24,332
29,902
35,595

84,846
91,365
96,484
112,152
148,879

36,639
39,113
39,766
46,471
58,843

48,207
52,252
56,718
65,681
90,036

98,185
124,228
151,907
176,020
212,028

27,018
34,572
44,982
42,312
60,482

71,167
89,656
106,925
133,706
151,546

23,620
29,145
34,951
41,301
48,494

47,547
60,511
71,974
92,405
103,052

1980..
1981..
1982..

224,237
237,019
211,217

42,158
44,034
37,230

182,079
192,987
173,986

74,178
81,548
73,816

107,901
111,439
100,170

249,781
265,086
247,606

79,263
77,794
61,201

170,518
187,292
186,404

54,027
57,428
49,764

116,491
129,864
136,640

60,793
60,031
57,812
58,383

12,230
10,994
9,965
10,845

48,565
49,037
47,847
47,538

20,147
21,102
20,147
20,152

28,418
27,935
27,700
27,386

65,276
67,373
66,214
66,224

20,386
20,801
19,008
17,599

44,890
46,572
47,207
48,624

13,730
14,548
14,708
14,442

31,160
32,024
32,499
34,182

55,636
54,996
52,241
48,344

10,087
10,435
8,442
8,266

45,549
44,562
43,798
40,077

19,337
19,195
18,431
16,853

26,212
25,367
25,367
23,224

61,739
60,850
65,319
59,698

15,473
13,361
17,234
15,133

46,266
47,489
48,085
44,565

12,837
12,209
12,622
12,096

33,429
35,280
35,463
32,469

49,506
48,913
50,585

9,009
8,830
9,442

40,497
40,083
41,143

17,340
16,952
16,731

23,157
23,131
24,412

58,316
63,574
68,754

10,497
13,027
16,585

47,819
50,547
52,168

12,513
13,340
13,681

35,306
37,207
38,487

1981:
I
Ill
IV
1982:
I
II
III....
IV....
1983:
I
II....

Note.—Data are on an international transactions basis and exclude military shipments.
Source: Department of Commerce, Bureau of Economic Analysis.




334

TABLE B-101.—U.S. merchandise exports and imports by area, 1974-83
[Millions of dollars]

Canada
Japan
Western Europe
Australia, New Zealand,
and South Africa

120,816

142,054

184,473

224,237

237,019 211,217

198,672

76,970

87,948

115,930

137,152

141,918 127,326

125,371

21,842 23,537 26,336
10,724 9,567 10,196
28,164 29,884 31,883

28,533
10,566
34,094

31,229
12,960
39,546

38,690
17,629
54,177

41,626
20,806
67,603

46,016
21,796
65,108

39,275
20,694
59,701

42,808
21,131
54,860

3,757

3,508

3,920

3,777

4,213

5,434

7,117

8,998

7,656

6,572

32,082

37,343

38,287

40,951

50,213

62,630

82,942

90,639

80,142

70,884

6,219 9,956 11,561
25,863 27,387 26,726

OPEC ..
Other 3 ..

12,877
28,074

14,846
35,367

14,537
48,093

17,364
65,578

21,097
69,542

20,651
59,491

15,305
55,579

1,737

Eastern Europe

3,249

103,811 98,185

Imports

2,895

4,123
4

124,22* 151,907

176,020

4,143

5,913

3,893
4

4

212,028

4

249,781

61,254 56,117 67,665

Industrial countries
Canada
Japan
Western Europe
Australia, New Zealand,
and South Africa

Eastern Europe..,

1981

1976

except

2

OPEC 2 ..
Other 3 ..

1980

64,487 66,496 72,335

Industrial countries..,

Other
countries,
Eastern Europe

1979

98,306 107,088 114,745

Exports

Other
countries,
Eastern Europe

1978

1975

1982

1983 first
3 quarters
at annual
rate 1

1977

1974

Item

79,447

99,357

112,809

127,908

22,554 21,854 26,652
12,414 11,257 15,531
24,267 20,764 23,003

29,864
18,565
28,226

33,758
24,541
36,618

39,229
26,261
41,826

42,903
31,217
47,255

2,479

2,792

4,440

5,493

6,533

41,580 41,334 55,379

70,679

74,403

96,137

119,142

17,234 18,897 27,409
24,346 22,437 27,970

35,778
34,901

33,286
41,117

45,039
51,098

55,602
63,540

1,127

1,508

1,896

1,444

2,019

2,242

2,417

3,749

4,439
4

l

265,086 247,606

4

254,192

144,339 144,099

150,536

48,258
37,598
52,873

48,473
37,685
52,908

53,405
39,043
52,891

5,610

5,033

5,197

119,194 102,417

102,295

49,934
69,260

31,517
70,900

24,395
77,900

1,553

1,067

1,361

except

977

734

875

1

Preliminary; seasonally adjusted.
2
Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela.
3
Latin American Republics, other Western Hemisphere, and other countries in Asia and Africa, less members of OPEC.
4
Trade with international organizations is included in totals for 1976-82, but not in area detail. This includes imports of
nonmonetary gold from International Monetary Fund in 1976-80; an export of tin to International Tin Council (ITC) in 1981; and an
import of tin from ITC in 1982.
Note.—Data are on an international transactions basis and exclude military.
Source: Department of Commerce, Bureau of Economic Analysis.




335

TABLE B-102.—U.S. merchandise exports and imports by commodity groups,

1965-83

[Millions of dollars; monthly data seasonally adjusted]
Merchandise exports 1

Year or
month

Total
domestic and
foreign Total 2
exports 2

Food,
beverages,
and
tobacco

Merchandise trade balance

Merchandise imports
General imports 6

Domestic exports
Crude
Manumaterifactured
als and
goods 5
4
fuels

Total

3

F.a.s. value 8

Food,
beverages,
and
tobacco

Crude
Manumaterifactured
als and
goods 5
4
fuels

Total,
c.i.f.
value 7

Exports
less
imports,
customs
value

Exports
less
imports,
f.a.s.

Exports
less
imports,
c.i.f.

Customs value

1965
1966
1967
1968
1969

26,742
29,490
31,030
34,063
37,332

26,399
29,054
30,646
33,626
36,788

4,519
5,186
4,710
4,592
4,446

4,273
4,404
4,726
4,865
5,006

1970
1971
1972
1973
1974

42,659
43,549
49,199
70,823
97,998

42,025
42,911
48,399
69,730
96,634

5,058
5,076
6,569
12,938
15,233

6,692
6,441
7,091
10,735
15,802

21,427
25,618
26,889
33,226
36,043

4,013
4,590
4,701
5,365
5,308

5,440
5,718
5,367
6,031
6,391

11,244
14,446
15,756
20,624
23,011

28,745
35,320
38,241

5,315
3,872
4,141
837
1,289

2,283
-1,257
-909

29,344 39,951
30,443 45,563
33,740 55,583
44,731 69,476
63,523 101,394

6,230
6,404
7,379
9,235
10,701

6,542
7,268
8,838
13,446
31,842

25,907
30,414
37,767
45,001
56,202

42,429
48,342
58,862
73,573
108,392

2,708
-2,014
-6,384
1,348
-3,396

230
-4,793
-9,663
2,752
-10,395

17,433
19,218
20,844
23,818
26,785

F.a.s. v a l u e 8
1974*...
1975*...
1976*...
1977*...
1978*...
1979*...

98,092
107,652
115,223
121,232
143,681
181,860

96,679
106,161
113,549
119,024
141,142
178,633

15,233
16,793
17,234
15,963
20,604
24,587

15,802 63,523
15,197 70,951
16,095 77,241
18,579 80,151
20,957 94,473
28,222 116,587

102,559
98,503
123,477
150,390
174,757
209,458

10,709
9,923
11,891
14,227
15,743
17,735

32,064 55,223 110,875
32,596 51,080 105,880
41,474 64,775 132,498
53,554 76,554 160,411
51,901 100,317 186,045
71,390 112,226 222,228

1980

220,630 216,515

30,407

33,719 143,891 244,871

18,551

93,973 125,122

-4,467
9,149
-8,254
-29,158
-31,076
-27,599

-12,783
1,772
-17,274
-39,179
-42,364
-40,368

-24,241 - 3 6 , 3 5 4

256,984

Customs value
1981
1982
1983

92,873 142,475
74,404 144,022

273,352
254,885
269,878

-27,305
-31,759

-39,675
-42,691
-69,392

8,265
5,850
5,725
5,035
4,909
6,175

12,425
11,939
12,138
10,654
13,163
12,830

23,598
20,399
20,889
18,508
21,422
22,129

-3,989
-956
-1,557
291
-2,353
-2,364

-5,015
-1,785
-2,427
-503
-3,297
-3,306

1,436
1,681
1,701
1,686
1,499
1,414

6,671
7,195
5,917
6,727
5,785
6,158

11,200
13,456
12,304
11,903
10,978
10,988

20,756
23,992
21,518
21,932
19,737
20,002

-1,790
-5,467
-3,261
-4,335
-3,041
-2,808

-2,697
-6,529
-4,198
-5,261
-3,885
-3,655

20,021
19,015
19,525
19,771
21,514
21,024

1,582
1,530
1,479
1,612
1,652
1,456

5,911
4,413
4,655
4,511
5,845
5,562

11,981
12,561
12,672
12,856
13,351
13,249

20,962
19,906
20,381
20,675
22,473
21,964

-2,628
-2,689
-2,774
-3,697
-5,948
-4,016

-3,569
-3,580
-3,630
-4,601
-6,907
-4,956

21,950
22,782
22,175
24,763
23,179

1,560
1,551
1,587
1,722
1,554

6,014
6,577
6,445
6,889
5,892

13,842
13,913
13,377
15,528
15,197

22,988
23,817
23,194
25,917
24,248
23,481

-5,321
-6,152
-4,788
-7,812
-6,331

-6,359
-7,187
-5,807
-8,966
-7,401
-6,301

33,022 154,283 260,982
33,518 139,716 243,952
29,555 132,408

233,677 228,899
212,193 207,076
200,486 195,917

33,206
26,977
26,979

18,584
18,614
18,462
18,005
18,124
18,823

18,197
18,251
17,986
17,603
17,713
18,387

2,304
2,481
2,665
2,495
2,465
2,418

3,006
3,268
3,012
2,943
2,880
2,828

12,356
11,954
11,829
11,555
11,788
12,536

22,573
19,570
20,019
17,714
20,477
21,187

1,245
1,217
1,455
1,443
1,541
1,537

18,060
17,463
17,320
16,671
15,852
16,347

17,671
17,143
16,584
16,284
15,476
15,913

1,902
2,153
1,926
2,128
2,051
1,966

2,698
2,694
2,751
2,688
2,440
2,420

12,536
11,804
11,331
10,942
10,484
10,648

19,849
22,930
20,581
21,006
18,892
19,154

1983-.
Jan....
Feb....
Mar...
Apr....
May...
June..

17,393
16,326
16,752
16,074
15,566
17,008

17,007
15,984
16,335
15,722
15,186
16,652

2,312
2,224
2,307
2,079
2,010
2,194

2,760
2,443
2,375
2,549
2,279
2,377

11,263
10,743
11,062
10,545
10,331
11,560

July...
Aug...
Sept..
Oct....
Nov...
Dec...

16,629
16,630
17,387
16,951
16,848
17,180

16,300
16,243
17,022
16,499
16,449
16,777

2,114
2,086
2,337
2,418
2,504
2,387

2,382
2,781
2,756
2,289
2,234
2,570

11,125
10,855
11,189
11,249
11,198
11,314

1982:
Jan
Feb
Mar...,
y
JuneJuly...
Aug...
Sept..
Oct....
Nov...
Dec...

18,350
17,817

1

Beginning I960, data have been adjusted for comparability with the revised commodity classifications effective in 1965.
Department of Defense shipments of grant-aid military supplies and equipment under the Military Assistance Program are excluded
from total exports.
3
Total includes commodities and transactions not classified according to kind.
4
Includes fats and oils.
5
Includes machinery, transportation equipment, chemicals, metals, and other manufactures. Export data for these items include
military grant-aid shipments through 1977 and exclude them thereafter.
6
Total arrivals of imported goods other than intransit shipments.
7
C.i.f. (cost, insurance, and freight) import value at first port of entry into United States. Data for 1967-73 are estimates.
8
F.a.s. (free alongside ship) value basis at U.S. port of exportation for exports and at foreign port of exportation for imports.
2

Note.—Data are as reported by the Bureau of the Census adjusted to include silver ore and bullion reported separately prior to 1969.
Trade in gold is included beginning 1974. Export statistics cover all merchandise shipped from the U.S. customs area, except supplies
for the U.S. Armed Forces. Exports include shipments under Agency for International Development and Food for Peace programs as well
as other private relief shipments.
Data for 1980 and 1981 include trade of the U.S. Virgin Islands, except that for 1980 Virgin Islands exports are reflected only in the
figures for domestic and foreign exports combined, total domestic exports, and trade balance.
*Data for 1974-79 for domestic and foreign exports combined, total domestic exports, total general imports, and trade balance
include trade of the Virgin Islands.
Source: Department of Commerce (Bureau of the Census and International Trade Administration, Office of Trade Information and
Analysis, Trade Performance Division).




336

TABLE B-103.—International investment position of the United States at year-end, selected years,

1970-82

[Billions of dollars]

Type of investment

Net international investment position of the United States...
U.S. assets abroad
U.S. official reserve assets

Gold
Special drawing rights (SDRs)
Reserve position in the International Monetary
Fund (IMF)
Foreign currency reserves
Other U.S. Government assets..
U.S. loans and other long-term assets
U.S. short-term assets other than reserves
U.S. private assets
Direct investments abroad (book value)
Foreign securities
Claims on foreigners reported by U.S. banks, not
included elsewhere
Claims on unaffiliated foreigners reported by
U.S. nonbanks
Foreign assets in the United States..
Foreign official assets
U.S. Government securities1
Other U.S. Government liabilities
Liabilities reported by U.S. banks, not included
elsewhere
Other official assets
Other foreign assets
Direct investments in the United States (book
value)
Liabilities reported by U.S. banks, not included
elsewhere
U.S. Treasury securities
Other U.S. securities2
Liabilities to unaffiliated foreigners reported by
U.S. nonbanks
1
2

1970

1974

1976

1978

1980

1981

1982

58.6

37.1

58.8

83.8

76.2

120.6

156.5

168.6

165.5

199.0

255.7

347.2

447.9

606.7

716.9

834.2

14.5

13.2

15.9

18.7

18.7

26.8

30.1

34.0

11.1
.9

10.5
2.0

11.7
2.4

11.6
2.4

11.7
1.6

11.2
2.6

11.2
4.1

11.1
5.3

1.9
.6

.5
.2

1.9
.0

4.4
.3

1.0
4.4

2.9
10.1

5.1
9.8

7.3
10.2

32.1

36.1

38.4

46.0

54.2

63.5

68.4

73.9

29.7
2.5

34.1
2.0

36.3
2.1

44.1
1.9

52.3
1.9

61.9
1.7

67.1
1.3

72.8
1.2

118.8

149.7

201.5

282.4

375.0

516.4

618.4

726.3

75.5
21.0

89.9
27.6

110.1
28.2

136.8
44.2

162.7
53.4

215.4
62.5

226.4
63.2

221.3
75.3

13.8

20.7

46.2

81.1

130.8

203.9

293.0

402.3

8.5

11.4

17.0

20.3

28.1

34.7

35.9

27.3

106.8

161.8

196.9

263.4

371.6

486.1

560.4

665.5

26.1

63.2

79.8

104.2

173.0

176.0

180.9

189.2

17.7
1.7

52.9
1.6

58.1
2.6

72.6
8.8

128.5
12.7

118.2
13.3

125.1
13.3

132.5
13.8

6.7
.0

8.5
.2

18.4
.6

17.2
5.6

23.3
8.5

30.4
14.1

26.9
15.6

24.9
18.0

80.7

98.7

117.1

159.1

198.7

310.1

379.5

476.3

68.4

90.4

101.8

13.3

14.9

25.1

30.8

42.5

22.7
1.2
34.7

21.2
1.2
50.7

41.8
1.7
34.9

53.5
7.0
54.9

77.7
8.9
53.6

121.1
16.1
74.1

165.3
18.6
75.4

229.6
25.8
93.3

8.8

10.7

13.6

13.0

16.0

30.4

29.9

25.8

Includes Treasury and agency issues of securities.
Corporate and other bonds and corporate stocks.

Source: Department of Commerce, Bureau of Economic Analysis.




1972

337

TABLE B-104.— World trade: Exports and imports, 1965, 1970, 1975, and 1979-83
[Billions of U.S. dollars]

Area and country

1965

1970

1975

1979

1980

1981

1982

1983 >

Exports, f.o.b. 2
3

Developed countries ...

129.8

225.8

582.8

1,081.6

1,269.7

1,248.9

1,191.7

1,212.6

United States..
Canada
Japan

27.5
8.4
8.5

43.2
16.7
19.3

108.1
34.1
55.7

182.0
58.3
102.3

220.8
67.7
130.4

233.7
72.7
151.5

212.3
71.2
138.4

198.8
75.3
146.0

European Community 4

65.2

113.5

299.5

577.2

665.9

612.4

590.0

604.8

France
West Germany....
Italy
United Kingdom-

10.2
17.9
7.2
13.8

18.1
34.2
13.2
19.4

53.1
90.2
34.8
43.4

100.7
171.8
72.2
86.4

116.0
192.9
77.7
110.1

106.4
176.1
75.3
102.2

96.7
176.4
73.5
97.0

94.7
166.4
73.3
91.2

Other developed countries

20.2

33.0

85.3

161.7

184.9

178.5

179.7

187.8

37.0

54.1

209.5

454.6

584.8

583.5

508.6

473.7

10.3
26.7

16.8
37.3

113.4
96.1

212.8
241.8

296.4
288.4

274.7
308.8

208.2
300.4

169.6
304.1

23.2

34.9

90.5

169.4

201.7

205.2

223.1

236.6

8.2
11.8
2.0

12.8
18.2
2.2

33.4
45.3
7.3

64.9
76.9
13.5

76.4
86.2
18.9

79.4
83.8
21.5

87.2
90.1
23.5

90.9
98.0
24.0

190.0

314.8

882.8

1,705.6

2,056.2

2,037.6

1,923.4

1,922.9

Developing countries
OPEC5.
Other..
Communist countries 6
U.S.S.R
Eastern Europe..
China
TOTAL

7

Imports, c.i.f.
Developed countries 3

136.8

235.8

612.5

1,175.0

1,411.7

1,346.1

1,272.0

1,313.3

United States....
Canada
Japan

23.2
8.7
8.2

42.7
14.3
18.9

105.9
36.2
57.8

222.2
57.0
109.8

257.0
62.8
141.3

273.4
70.3
142.9

254.9
58.4
131.5

268.4
62.3
123.4

European Community 4

70.5

118.7

306.6

611.1

729.1

645.3

615.6

626.4

France
West Germany
Italy
United Kingdom....

10.4
17.6
7.4
16.1

19.1
29.9
15.0
21.9

54.0
74.9
38.5
53.3

107.0
159.6
77.9
99.6

134.9
188.0
99.7
115.5

121.0
163.9
91.1
102.7

115.7
155.4
86.2
99.6

106.0
151.8
80.7
100.3

Other developed countries..

26.3

41.2

106.0

174.8

221.5

214.2

211.6

232.8

38.7

56.4

189.3

399.4

515.8

589.5

544.8

510.6

6.4
32.3

9.9
46.5

52.0
137.3

98.9
300.5

132.6
383.2

155.1
434.4

154.9
389.9

139.7
370.9

22.5

34.1

100.8

170.3

200.4

200.0

203.1

216.6

8.0
11.6
1.8

11.7
18.5
2.2

37.1
51.3
7.4

58.0
82.6
15.6

68.5
91.2
20.7

73.2
87.5
19.3

77.8
87.1
17.9

80.2
95.2
19.5

198.0

326.3

902.6

1,744.7

2,127.9

2,135.6

2,019.9

2,040.5

Developing countries
OPEC5
Other
Communist countries 6 ...
U.S.S.R
Eastern Europe..
China
TOTAL.
1

Preliminary estimates.
Free-on-board ship value.
Includes the OECD countries, South Africa, and non-OECD Europe.
4
Includes Belgium-Luxembourg, Denmark, Greece, Ireland, and the Netherlands, not shown separately.
5
Includes Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and
Venezuela.
6
Includes North Korea, Vietnam, Albania, Cuba, Mongolia, and Yugoslavia, not shown separately.
7
Cost, insurance, and freight value, except Eastern Europe (except Hungary) and U.S.S.R., which are f.o.b (free on board).
2

3

Sources.- International Monetary Fund, Organization for Economic Cooperation and Development, and Council of Economic
Advisers.




338

TABLE B-105.— World trade balance and current account balances, 1965, 1970, 1975, and 1979-83
[Billions of U.S. dollars]

Area and country

1975

1970

1965

1979

1980

1981

1982

1983 l

World trade balance2
3

Developed countries ..
United States..
Canada
Japan
European Community4
France
West Germany
Italy
United Kingdom
Other developed countriesDeveloping countries
OPEC5
Other

-7.0

-10.0

-29.7

-93.4

-142.0

-97.2

-80.3

-100.8

4.3
-.3
.3

.5
2.4
.4

2.2
-2.1
-2.1

-40.2
1.3
-7.5

-36.2
4.9
-10.9

-39.7
2.4
8.6

-42.6
12.8
6.9

-69.7
12.9
22.6

-5.3

-5.2

-7.1

-33.9

-63.2

-32.9

-25.6

-21.6

-.2
.3
_ 2

-1.0
4.3
-1.8
-2.5

-.9
15.3
-3.7
-9.9

-6.3
12.2
-5.7
-13.2

-18.9
4.9
-22.0
-5.4

-14.6
12.2
-15.8

-19.0
21.0
-12.7
-2.6

-11.3
14.5
-7.4
-9.1

-8.2

-20.7

-13.1

-36.6

-35.7

-31.9

-45.0

-2.3

20.2

55.2

69.0

-6.0

-36.2

-36.8

6.9
-9.2

61.4
-41.2

113.9
-58.7

163.8
-94.8

119.6
-125.6

53.3
-89.5

29.9
-66.8

-2^3
-6.1
-1.6
3.9
-5.5

Communist countries 6 ..
U.S.S.R
Eastern Europe..
China
TOTAL7..

.8

-10.3

-.9

1.3

5.2

20.0

20.0

.2
.2
.2

1.1
-.3
.0

-3.7
-6.0
-.1

6.9
-5.7
-2.1

7.9
-5.0
-1.8

6.2
-3.7
2.2

9.4
3.0
5.6

10.7
2.8
4.5

-7.9

-11.5

-19.8

-39.1

-71.7

-98.0

-96.5

-117.6

Current account balances8
Developed countries3..
United States
Canada
Japan

3.3

European Community4
France
West Germany....
Italy
United Kingdom..

.4
-1.6
2.2
-.1

-24.7

-65.2

-31.7

-29.8

-24.3

2.3
.8
2.0

18.1
-4.7
-.6

-.9
-4.1
-8.7

.5
-.9
-10.7

4.5
-4.8
5.1

-11.5
2.5
7.0

-41.0
2.5
22.5

2.9

5.4
-1.1
.9

3.4

-8.6

-36.5

-13.5

-9.5

3.0

.1
.9

2.7
4.0
-.6

5.2
-6.2
5.4
-1.2

-4.2
-15.9
-9.8

-4.8
-6.3
-8.4
13.5

-12.2
3.5
-5.6

-5.3
5.3
1.5
1.5

.9
2.0

-3.4
Other developed countries..

-13.0

Developing countries

-23.0
13.7

9.3
-18.3

-11.3

65.0
-58.8

8.3
111.0
-102.7

52.0
-38.3

8.8
-16.0
-24.8

-11.1

-6.5

-4.6

— .3

11.3

9.2

-4.6
-6.4
-.1

2.2
-7.6
-1.1

1.9
-5.5
-1.0

-.1
-3.7
3.5

4.2
1.5
5.6

4.0
1.2
4.0

-.7

-25.0

-61.5

-18.3

-9.7

7.1

Communist countries 9 ..

TOTAL..

6.2

7.8
-17.6

27.3
-20.2

OPEC5
Other

U.S.S.R
Eastern Europe
China

-2.4

-.2

-31.0

1

Preliminary estimates.
2
Exports f.o.b. (free-on-board ship value) less imports c.i.f. (cost, insurance, and freight).
3
Includes the OECD countries, South Africa, and non-OECD Europe.
4
Includes Belgium-Luxembourg, Denmark, Greece, Ireland, and the Netherlands, not shown separately.
5
Includes Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and
Venezuela.
6
Includes North Korea, Vietnam, Albania, Cuba, Mongolia, and Yugoslavia, not shown separately.
7
Asymmetries arise in global payments aggregations because of discrepancies in coverage, classification, timing, and valuation in the
recording of transactions by the countries involved and because freight charges are attributed to the cost of imports.
8
OECD basis.
9
Includes only countries listed.
Sources.- International Monetary Fund, Organization for Economic Cooperation and Development, and Council of Economic Advisers.




339

TABLE B-106.—International reserves, selected years, 1952-83
[Millions of SDRs; end of period]
1983
Area and country

1952

1962

1972

1979

1980

1981

1982

November

All countries....

49,388

62,851

147,443

307,149

355,100

370,051

364,202

400.135

Industrial countries-

38,582

52,535

110,282

180,791

211,904

212,693

211,918

231,194

24,714
1,944
920
1,101
183

17,220
2,561
1,168
2,021
251

12,112
5,572
5,656
16,916
767

15,170
2,944
1,359
15,667
344

21,479
3,119
1,603
20,164

in

25,502
3,717
1,713
25,083
580

29,918
3,428
6,053
22,001
577

30,668
4,310
7,211
24,465
702

116
1,133
150
132
686

1,081
1,753
256
237
4,049

2,505
3,564
787
664
9,224

3,832
5,329
2,514
1,204
16,212

4,878
7,330
2,712
1,501
24,301

5,279
5,451
2,246
1,319
21,991

5,544
4,757
2,111
1,420
17,850

5,007
5,781
4,010
1,047
22,503

960
8
318
722
953

6,958
32
359
4,068

1,943

21,908
78
1,038
5,605
4,407

43,225
125
1,693
16,149
7,301

41,430
138
2,255
20,477
10,669

40,892
199
2,290
19,631
9,562

43,909
133
2,390
15,107
10,723

45,420
142
2,534
21,444
11,432

164
134
504
1,667
1,956

304
1,045
802
2,919
3,308

1,220
4,618
1,453
6,961
5,201

3,241
10,550
2,880
15,391
15,626

4,783
9,813
2,893
15,190
16,851

5,414
9,794
3,306
14,925
13,757

6,272
7,450
3,397
16,930
11,904

6,325
7,266
3,942
15,165
11,778

1,699

2,030

10,071

56,318

69,508

75,577

70,031

75,847

84
314
177
131
50

186
108
211
193
97

454
531
885
720
335

2,214
3,093
11,682

3,153
4,311

3,370
4,416

2,391
2,959

1,887
3,578

2,268

3,169

3,583

5,449

4,903

500

96
289

4,902
4,235
445
228
14,790

10,372
8,049
692
286
18,536

7,860
3,371
988
339
27,855

6,525
1,486
1,283
382
26,948

5,280
1,032
1,352

268

2,694
346
149
56
2,303

443

583

1,595

1,107
5,958

1,600
5,579

2,775
7,415

2,037
6,365

1,909
7,791

8,573

8,172

26,137

68,842

71,850

75,450

74,388

82,067

1,202
3,407
966
825
2,173

1,635
2,550
1,348
940
1,699

3,168
6,640
6,428
2,406
7,494

4,311
23,232
7,400
7,442
26,457

4,480
24,968
8,060
8,311
26,031

4,208
27,458
8,150
9,001
26,632

3,846
34,394
6,874
10,132
19,143

4,371
40,671
7,274
9,206
20,545

United States
Canada
Australia
Japan
New Zealand
Austria
Belgium...
Denmark..
Finland
France
Germany
Iceland
Ireland
Italy
NetherlandsNorway
Spain
Sweden
Switzerland
United Kingdom..
Oil-exporting countries....
Algeria
Indonesia..
Iran
Iraq
Kuwait
Libya
Nigeria
Oman
Qatar
Saudi Arabia....
United Arab EmiratesVenezuela
Non-oil developing countries...
Africa
Asia
Europe
Middle East
Western Hemisphere..

Note.—International reserves is comprised of monetary authorities' holdings of gold (at SDR 35 per ounce), special drawing rights
(SDRs), reserve positions in the International Monetary Fund, and foreign exchange. Data exclude U.S.S.R., other Eastern European
countries, and Cuba (after 1960).

U.S. dollars per SDR (end of period) are: 1952 and 1962-1.00000; 1972-1.08571; 1979-1.31733; 1980-1.27541; 1981-1.6396;
1982—1.10311; and November 1983—1.05058.
Source: International Monetary Fund, "International Financial Statistics."




340

TABLE B-107.—Growth rates in real gross national product, 1960-83
[Percent change]

Area and country

1961-65
annual
average

1966-70
annual
average

1971-75
annual
average

1976-80
annual
average

1979

1980

1981

1982

1983 *

5.3

4.6

3.1

3.4

3.2

1.2

1.5

-0.5

2.5

4.7
5.7
10.0

3.2
4.8
11.2

2.6
5.0
4.6

3.7
3.1
5.0

2.8
3.2
5.1

-.4
.5
4.4

1.9
3.8
3.2

-1.7
-5.0
2.5

4.8
3.8
2.0

4.9

4.5

2.8

3.1

3.1

1.3

-.4

.4

1.0

5.8
5.0
5.2
3.1

5.4
4.2
6.2
2.5

4.0
2.2
2.4
2.1

3.3
3.5
3.8
1.6

3.3
4.1
4.9
1.6

1.1
1.9
3.9
-2.0

.2
.2
-.1
-2.0

1.5
-1.2
.5

.5
1.2
-1.5
2.5

5.6

4.8

3.5

1.7

2.5

3.4

2.1

-.8

-1.2

6.5

6.6

7.0

5.5

4.8

5.1

1.5

1.0

7.0
6.3

7.8
6.3

9.0
6.3

5.0
5.7

4.0
5.2

1.8
6.4

-1.3
2.5

1.1
.9

Communist countries 6

4.2

5.0

4.1

2.6

1.1

1.6

1.6

2.1

3.0

U.S.S.R
Eastern EuropeChina

5.0
3.7
-.2

5.2
3.7
8.3

3.7
4.7
5.5

2.3
1.9
5.9

.4
1.0
7.0

1.7
.0
6.1

2.2
_ g
4.8

2.2
-.2
7.4

3.6
1.0
4.0

5.1

5.2

4.0

3.4

2.5

1.7

1.6

.8

Developed countries

2

United States
Canada
Japan
European Community3
France
West Germany
Italy
United Kingdom
Other developed countries
Developing countries
OPEC5
Other

TOTAL.
1

Preliminary estimates.
2
Includes the OECD countries, South Africa, and non-OECD Europe.
3
Includes Belgium-Luxembourg, Denmark, Greece, Ireland, and the Netherlands, not shown separately.
4
Not available.
5
Includes Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and
Venezuela.
6
Includes North Korea, Vietnam, Albania, Cuba, Mongolia, and Yugoslavia, not shown separately.
Sources: Department of Commerce, International Monetary Fund, Organization for Economic Cooperation and Development (OECD), and
Council of Economic Advisers.




341

TABLE B-108.—Industrial production and consumer prices, major industrial countries, 1960-83
[1967 = 100]

Year or quarter

United
States

Canada

Japan

European
Community1

France

West
Germany

Italy

United
Kingdom

Industrial production2
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

66.2
66.7
72.2
76.5
81.7
89.8
97.8
100.0
106.3
111.1
107.8
109.6
119.7
129.8
129.3
117.8
130.5
138.2
146.1
152.5

63.1
65.6
71.2
75.7
82.6
89.7
96.2
100.0
106.4
113.7
115.3
121.5
130.7
144.6
149.2
140.3
148.5
152.7
157.8
167.6

43.0
51.2
55.4
61.7
71.4
74.2
83.8
100.0
115.2
133.4
151.8
155.7
167.0
190.5
183.1
163.9
182.0
189.7
201.1
215.3

74.7
78.1
81.3
84.8
91.0
94.7
98.4
100.0
107.4
117.6
123.3
126.1
131.7
141.4
142.3
132.8
142.6
145.9
149.7
156.8

70
73
78
86
90
93
98
100
104
114
120
128
135
145
148
139
149
152
155
163

78.4
82.8
86.1
88.9
96.6
102.1
103.0
100.0
109.2
123.2
131.1
133.6
138.7
147.7
145.1
137.1
149.1
152.0
154.1
161.8

59.2
65.5
71.9
78.4
79.2
82.8
93.3
100.0
106.4
110.5
117.6
117.5
122.7
134.6
140.6
127.6
143.5
145.1
147.9
157.6

83.9
84.2
85.0
87.8
95.0
97.8
99.3
100.0
107.6
111.3
111.8
111.2
113.2
123.3
120.8
114.4
118.1
124.2
127.8
132.8

1980
1981
1982
1983 P

147.0
151.0
138.6
147.7

165.1
166.6
148.8

225.2
227.5
228.4

155.5
152.1
149.9

161
160
158

162.3
159.9
156.2

166.5
162.7
159.1

124.1
119.2
121.7

I
V

141.8
139.4
138.2
135.3

155.5
150.5
146.8
142.1

230.5
227.9
228.9
226.3

151.8
151.5
149.5
146.7

159
159
155
158

161
160
154
152

161.0
158.6
146.6
149.8

120.5
121.6
122.6
122.0

1983:
I
II
IlP
l

149.5
153.9
160.9

228.2
231.7
239.0

147.9
148.7
150.7

159
155
159

154
157
157

149.0
145.0
144.1

123.6
123.0
125.3

I
V

138.5
144.5
151.8
156.0

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

88.7
89.6
90.6
91.7
92.9
94.5
97.2
100.0
104.2
109.8

85.9
86.7
87.7
89.2
90.9
93.1
96.5
100.0
104.0
108.8

68.3
71.8
76.7
82.5
85.8
91.6
96.3
100.0
105.3
110.9

77.0
81.1
84.5
87.6
90.8
94.2
97.5
100.0
103.7
108.0

3
3

78.0
80.6
85.4
89.5
92.5
94.8
97.4
100.0
104.5
111.3

82.9
84.8
87.4
89.9
92.0
95.0
98.4
100.0
101.6
103.5

74.1
75.7
79.2
85.1
90.1
94.2
96.4
100.0
101.4
104.1

79.0
81.6
85.1
86.8
89.6
93.9
97.6
100.0
104.8
110.3

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

116.3
121.3
125.3
133.1
147.7
161.2
170.5
181.5
195.4
217.4

112.4
115.6
121.2
130.3
144.5
160.1
172.1
185.9
202.5
221.0

119.3
126.5
132.3
147.9
184.0
205.8
224.9
243.0
252.3
261.3

113.3
120.3
127.6
138.3
156.4
176.7
195.2
214.7
229.9
250.7

117.1
123.5
131.1
140.7
160.0
178.9
196.1
214.5
233.9
259.1

107.1
112.7
119.0
127.2
136.1
144.2
150.4
155.9
160.2
166.8

109.2
114.4
121.0
134.0
159.7
186.8
218.1
255.2
286.2
328.5

117.4
128.5
137.7
150.2
174.3
216.5
252.4
292.4
316.6
359.0

1980
1981
1982
1983

246.8
272.4
289.1
298.4

243.5
273.9
303.5
321.0

282.2
296.2
304.1

281.4
313.4
344.3

294.2
332.7
373.1

175.9
186.3
196.2

398.0
472.4
549.4

423.6
473.9
514.7

283.0
287.3
292.8
293.4

292.2
301.2
307.6
312.6

300.3
303.4
304.8
307.5

333.4
342.0
347.5
353.7

359.8
371.0
376.0
383.0

192.7
195.4
197.6
198.9

523.7
539.6
562.7
589.1

500.5
516.6
518.9
522.7

293.2
296.9
300.5
303.1

314.5
318.8
324.0
326.8

306.5
310.1
309.0

359.5
366.6
372.6

393.2
404.4
413.1

199.9
201.1
203.1

609.7
627.5
643.0

525.3
536.1
543.0

1982:
1|
|
III

. .

Consumer prices

1982:
I
II
Ill

....

I
V
1983:
1
I
I
III

I
V

1
Consists of Belgium-Luxembourg, Denmark, France, Greece, Ireland, Italy, Netherlands, United Kingdom, and West Germany. Industrial
production prior to July 1981 excludes data for Greece, which joined the EC in 1981.
2
All data exclude construction. Quarterly data are seasonally adjusted.
3
Data for 1960 and 1961 are for Paris only.
Sources: Department of Commerce (International Trade Administration, Office of Trade Information and Analysis, Trade Performance
Division) and Department of Labor (Bureau of Labor Statistics).




342

TABLE B-109.—Civilian unemployment rate, and hourly compensation, major industrial
countries, 1960-83
[Quarterly data seasonally adjusted]

Year or quarter

United
States

Canada

Japan

France

West
Germany

Italy

United
Kingdom

Civilian unemployment rate (percent) 1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1982:
I
II
Ill
IV
1983:
I

5.5
6.7
5.5
5.7
5.2
4.5
3.8
3.8
3.6
3.5

6.5
6.7
5.5
5.2
4.4
3.6
3.4
3.8
4.5
4.4
5.7
6.2
6.2
5.5
5.3
6.9
7.1
8.1
8.4
7.5
7.5
7.6

1.7
1.5
1.3
1.3
1.2
1.2
1.4
1.3
1.2
1.1
1.2
1.3
1.4
1.3
1.4
1.9
2.0
2.0
2.3
2.1
2.0
2.2
2.4
2.7

1.6
1.4
1.3
1.2
1.3
1.4
1.7
1.8
2.4
2.2
2.4
2.7
2.8
2.7
2.9
4.2
4.6
5.0
5.4
6.1
6.5
7.7
8.7

1.1
.6
.6
.5
.4
.3
.3
1.3
1.1
.6
.5
.6
.7
.7
1.6
3.4
3.4
3.5
3.4
3.0
2.9
4.1
5.9
7.3

3.2
2.8
2.5
2.1
2.4
3.0
3.3
3.0
3.1
3.1
2.8
2.9
3.4
3.2
2.8
3.2
3.6
3.6
3.7
3.9
3.9
4.3
4.8
5.1

2.1
1.9
2.7
3.3
2.4
2.1
2.2
3.2
3.2
3.0
3.1
3.9
4.2
3.2
3.1
4.6
6.0
6.3
6.2
5.6
7.0
10.6
12.3

8.9

4.9
5.9
5.6
4.9
5.6
8.5
7.7
7.1
6.1
5.8
7.1
7.6
9.7
9.6
8.8
9.4
10.0
10.6

III
IV

10.5
12.1
12.7

2.3
2.4
2.4
2.4

8.4
8.7
8.8
8.8

5.3
5.7
6.1
6.6

5.0
5.0
4.6
4.5

11.9
12.1
12.6
12.9

10.4
10.1
9.4
8.5

ifZI

11.0
11.9

12.5
12.4
11.7
11.1

2.7
2.7
2.7
2.6

8.7
8.8
8.8

7.1
7.4
7.5
7.2

4.9
5.7
4.8
5.0

13.5
13.8
13.6

Hourly compensation (1977 = 100) 2

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982

36.7
37.7
39.1
40.3
42.0
42.8
44.8
47.0
50.4
53.9

57.6
61.1
64.4
69.0
76.3
85.4
92.3
100.0
108.3
118.8
132.7
145.8
158.2

29.7
29.2
28.4
29.2
30.3
31.8
34.4
36.9
39.7
42.7
47.4
52.7
57.6
62.8
74.4
81.7
96.9
100.0
99.5
107.3
118.7
132.9
144.8

6.6
7.7
8.8
9.8

11.0
12.4
13.6
15.3
17.9
21.3
25.4
30.3
40.1
55.0
67.1
77.1
82.3
100.0
136.1
138.5
144.5
157.5
143.9

15.2
16.8
18.5
20.3
22.0
23.9
25.3
27.2
30.5
30.9
32.6
37.1
44.7
58.5
64.1
88.3
91.1
100.0
124.3
149.8
172.2
155.9
149.5

24.2
25.9
27.2
28.4
30.2
33.1
35.8
36.4
33.9
37.0
42.8
50.5
58.2
64.0
77.4

160.5
139.1
136.3

96.5
92.9
100.0
125.6
162.1
216.0
220.4
207.8

1
Civilian unemployment rates, approximating U.S. concepts. Data for United Kingdom exclude Northern Ireland. Quarterly data for
France, West Germany, and United Kingdom should be viewed as less precise indicators of unemployment under U.S. concepts than the
annual data. Beginning 1977, changes in the Italian survey resulted in a large increase in persons enumerated as unemployed. However,
many also reported tnat they had not actively sought work in the past 30 days. Such persons have been provisionally excluded for
comparability with U.S. concepts; their inclusion would more than double the rates shown for Italy.
2
Hourly compensation in manufacturing, U.S. dollar basis. Data relate to all employed persons (wage and salary earners and the selfemployed) in the United States and Canada, and to all employees (wage and salary earners) in the other countries. For France and
United Kingdom compensation adjusted to include changes in employment taxes that are not compensation to employees, but are labor
costs to employers.

Source: Department of Labor, Bureau of Labor Statistics.

343
U.S. GOVERNMENT PRINTING OFFICE : 1984 0 - 424-456 : QL 3

























Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102