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Economic Report
of the President

Transmitted to the Congress
February 1985
TOGETHER WITH

THE ANNUAL REPORT
OF THE

COUNCIL OF ECONOMIC ADVISERS
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON : 1985
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. ECONOMIC POLICY FOR GROWTH AND STABILITY

21

CHAPTER 2. THE FEDERAL BUDGET AND THE ECONOMY

65

CHAPTER 3. THE UNITED STATES IN THE WORLD ECONOMY

99

CHAPTER 4. HEALTH STATUS AND MEDICAL CARE

129

CHAPTER 5. ECONOMIC STATUS OF THE ELDERLY

159

CHAPTER 6. THE MARKET FOR CORPORATE CONTROL

187

APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF
THE COUNCIL OF ECONOMIC ADVISERS DURING 1984
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)

217
225







ECONOMIC REPORT
OF THE PRESIDENT




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

In 1981, when I first assumed the duties of the Presidency, our
Nation was suffering from declining productivity and the highest inflation in the postwar period—the legacy of years of government
overspending, overtaxing, and overregulation.
We bent all of our efforts to correct these problems, not by unsustainable short-run measures, but by measures that would increase
long-term growth without renewed inflation. We removed unnecessary regulations, cut taxes, and slowed the growth of Federal spending, freeing the private sector to develop markets, create jobs, and
increase productivity. With conviction in our principles, with patience
and hard work, we restored the economy to a conditiqn of healthy
growth without substantial inflation.
Although employment is now rising, business opportunities are expanding, and interest rates and inflation are under control, we
cannot relax our economic vigilance. A return to the policies of excessive government spending and control that led to the economic
"malaise" of the late seventies would quickly draw us back into that
same disastrous pattern of inflation and recession. Now is the time to
recommit ourselves to the policies that broke that awful pattern: policies of reduced Federal spending, lower tax rates, and less regulation
to free the creative energy of our people and lead us to an even
better economic future through strong and sustained economic
growth.
Major Economic Developments 1981-1984

The Program for Economic Recovery that we initiated in February
1981 had four key elements:
• Budget reform to cut the rate of growth in Federal spending,
• Reductions in personal and business taxes,
• A far-reaching program of regulatory relief, and
• Restoration of a stable currency and a healthy financial market
through sound monetary policy.
The success of this program is now obvious—the U.S. economy is
experiencing the strongest recovery in 30 years:
• Real business fixed investment in plant and equipment is higher,
relative to real gross national product, than at any time in the
postwar period.




• Productivity growth in the business sector has averaged 2.2 percent since the fourth quarter of 1980, compared with a rate of less
than 0.3 percent over the prior 4 years.
• The inflation rate is now about one-third the rate in 1980, and
short-term interest rates are less than one-half their peak 1981
levels.
But the quantitative record alone does not tell the full story. Four
years ago, there was a widespread and growing anxiety about the
economy. Many thought that the Nation had entered a condition of
permanent economic decline, and that we would have to live with
permanent double-digit inflation unless we were willing to suffer
massive long-term unemployment.
We did not share this pessimism. It was clear to us that the Nation's economic problems were not the product of the economic
system, but of the onerous influence of government on that system.
The creative potential of the American people, choosing their own
economic futures, was more constrained than helped by the increasingly heavy hand of government. Nor did we share the negative views
that a reduction of inflation would increase long-term unemployment; that economic growth, by itself, would increase inflation; and
that the government had to protect a "fragile" market system by regulating oil prices and interest rates.
The primary economic responsibility of the Federal Government is not to make
choices for people, but to provide an environment in which people can make

their own choices. The performance of the economy in the past 2 years
under our Program for Economic Recovery fully justifies our faith in
the Nation's basic economic health. In 1983 and 1984 the economy
generated about 300,000 new jobs per month without an increase in
inflation. Real gross national product increased 5.6 percent during
1984, and the unemployment rate declined from 8.1 percent to 7.1
percent. Inflation was steady at its lowest level in more than a
decade, and most interest rates are now lower than a year ago. Yet
while the U.S. economy grew rapidly in 1984, it maintains the potential for continued strong growth. The inventory/sales ratio is low by
historical standards, and capacity utilization rates in most industries
are well below prior peak rates.
Economic conditions in 1984 were more favorable than during the
second year of a typical recovery, and we see none of the warning
signs that usually precede the end of an expansion. The temporary
slowing of economic growth starting in July—reflecting the combination of a minor adjustment of consumer spending and inventories
and little growth of the basic money supply—seems to have ended in
November. These conditions, plus an expectation that the Federal
Reserve System will maintain sufficient money growth, support our




forecast that the present recovery will continue. The thriving venture
capital market is financing a new American revolution of entrepreneurs hip and
technological change. The American economy is once again the envy of the
world
The Economic Outlook

For the years 1985 through 1988, we assume real gross national
product growth of 4 percent per year, slowing slightly in 1989-90.
We know that economic recoveries have not been stable in
either duration or magnitude, in part because monetary and fiscal
policies have often been erratic. We may not be able to eliminate recessions entirely, but a sustained commitment to policies that promote long-term growth and stability can reduce their frequency and
severity. Our forecast that the unemployment rate, the inflation rate,
and interest rates will decline gradually in the years ahead reflects
this commitment to sound, sustainable, and predictable policies.
The Task Ahead: A Program for Growth and Opportunity

Our 1981 Program for Economic Recovery was designed for the
long run with priority attention to the major problems we faced at
that time. Our second-term Program for Growth and Opportunity
represents a continuation and expansion of the earlier program, with
priority attention to the major problems we face in 1985 and beyond.
Our objectives—economic growth, stability of the general price level,
and increased individual economic opportunity—have not changed.
Federal economic policy will continue to be guided by the four key
elements of the earlier program. Our progress in solving the most
important economic problems we inherited in 1981, however, has allowed us to refocus our attention on the remaining problems and to
shift our priorities and resources toward their solution.
Several significant problems remain to be addressed. The rate of
growth of Federal spending has been substantially reduced from the
rate projected in the budget we inherited in fiscal 1981, but spending
growth continues to outpace the economy. Spending too much has left
us with a large budget deficit that must and will be reduced. In our
efforts to reduce the deficit, we must not forget that the cause of the
deficit is increased spending and insufficient growth, not decreased
taxes. Federal tax receipts are now almost the same share of gross
national product as in the late 1970s, even after the substantial
reduction in tax rates that we initiated in 1981.
Another economic problem demanding resolution is unemployment and its effects on the Nation's workers and families. Despite
significant progress, much remains to be done. More than 6 million
more Americans are now employed than in January 1981, but the un-




employment rate is still too high. We will not be satisfied until every
American who wants a job is employed at a wage that reflects the
market value of his or her skills. Another aspect of this problem is
that the poverty rate remains stubbornly high, despite a strong recovery and a continued increase in government assistance. Also, although the inflation rate has been reduced substantially, it is still
higher than during most of our peacetime history prior to 1965. We
will not be satisfied until we have totally and permanently wrung inflation out of our economy.
Work also remains to be done in the areas of regulatory and monetary policy. Many Federal regulations still impose a substantial cost to
the economy. In addition, we need to strengthen the commitment to
a sound monetary policy that never again retards economic growth,
or reaccelerates inflation.
Our trade deficit, another area of concern, has been caused in
large part by a strong dollar. Investors around the world have bid up
the dollar as they have become increasingly confident in our economy. That confidence is an asset and not a liability. However, the conditions that have led to the trade deficit have increased the obstacles
faced by some important industries. Agriculture, one of our most
productive export sectors, has been harmed by a combination of
rigid and outdated Federal agricultural policies and subsidized foreign competition as well as by the strong dollar. Some of our importcompeting industries, such as steel, have also been hurt by subsidized
foreign competition and the strong dollar. In one respect the trade
deficit is like the budget deficit; both are too large to be sustained,
but there are both beneficial and detrimental ways to reduce them.
Our goal is a system of free and fair trade in goods, services, and
capital. We will work toward this goal through both bilateral and
multilateral agreements.
Economic conditions during the past 4 years are best characterized
as transitional—from a period of low productivity growth to a period
of high productivity growth; from a period of high inflation and interest rates to a period of much lower inflation and interest rates;
from a period of economic "malaise" to a period of economic opportunity. Our task is to consolidate and extend these gains.
Federal Spending and the Deficit

The rate of growth of Federal spending has been reduced from
14.8 percent in fiscal 1981 to an average rate of 9.1 percent in fiscal
years 1982 through 1985. During this period, however, current dollar
gross national product has increased at an average rate of 7.6 percent. The continued growth of the Federal spending share of gross




national product and lost revenues from the recession are the main
reasons we are now faced with such large Federal deficits.
The projected Federal deficits are much too large, and they must
be reduced. As explained in the accompanying report, however, the
economic consequences of reducing these deficits depend critically
on how they are reduced. A sustained reduction of the growth of
Federal spending will contribute to economic growth, while an increase in tax rates would constrain economic growth. Federal spending on many programs is far larger than necessary, and far larger
than desired by most Americans.
My fiscal 1986 budget proposal will protect the social safety net
and essential programs, such as defense, for which the Federal Government has a clear constitutional responsibility, and will reform or
eliminate many programs that have proven ineffective or nonessential. With no resort to a tax increase, this budget will reduce the deficit to about 4 percent of gross national product in fiscal 1986 and to
a steadily lower percentage in future years. Additional spending reductions will probably be necessary in future years to achieve a balanced budget by the end of the decade.
The problems of excessive spending and deficits are not new. In
the absence of fundamental reform, they may recur again and again
in the future. I therefore support two important measures—one to
authorize the President to veto individual line items in comprehensive spending bills, and another to constrain the Federal authority to
borrow or to increase spending in the absence of broad congressional support. These structural changes are not substitutes for the hard
fiscal choices that will be necessary in 1985 and beyond, nor for the
need to simplify our tax system to stimulate greater growth; but they
are important to provide the mechanisms and discipline for longer
term fiscal health.
The case for a line-item veto should by now be obvious. The Governors of 43 States have used this authority effectively, and such authority has only once been withdrawn, only later to be reinstated. For
over a century, Presidents of both parties have requested such authority.
The proposed constitutional amendment providing for a balanced
budget and a tax limitation would constrain the long-run growth
of Federal spending and the national debt. In 1982 a proposed
amendment to constrain Federal authority to spend and borrow
was approved by more than two-thirds of the Senate and by
more than a majority of the House of Representatives; a balanced
budget amendment has also been endorsed by the legislatures of 32
States. Approval of the proposed balanced budget/tax limitation
amendment would ensure that fiscal decisions by future Presidents




and Members of Congress are more responsive to the broad interests
of the American population.
Federal Taxation

The Economic Recovery Tax Act of 1981 was one of the most important accomplishments of my first term. Individual income tax
rates were reduced nearly 25 percent, effective tax rates on the
income from new investment were substantially reduced, and beginning this year tax brackets are adjusted for inflation.
But more needs to be done. Personal tax rates should be reduced
further to encourage stronger economic growth which, in itself, is our
best tool for putting deficits on a steady downward path. Our tax
system needs basic reform. It is extraordinarily complicated; it leads
to substantial economic inefficiency; and it is widely perceived to be
unfair.
At my request, the Treasury Department has developed a comprehensive proposal to simplify and reform the Federal tax system, one
that for expected economic conditions would yield about the same
revenues as the present system. This proposal, by substantially
broadening the tax base, would permit a significant further reduction
of marginal tax rates. Shortly, I will be submitting my own proposal
for tax simplification, and will urge the Congress to give serious sustained attention to tax simplification—in order to enact a program
that will increase fairness and stimulate future savings, investment,
and growth.
Federal Regulation

We have made major efforts in the past 4 years to reduce and
eliminate Federal regulation of economic activity. Executive Office
review of new regulations was streamlined. Oil prices were deregulated by Executive authority early in 1981. New legislation was
approved to reduce regulation of banking and to largely eliminate
regulation of interstate bus travel.
Regulatory reform, however, has been painfully slow. The Congress failed to approve our proposals to further deregulate banking
and natural gas prices, and to reform the regulation of private pensions. In addition, the reauthorization of several major environmental
laws has been delayed for several years.
I urge the Congress to consider further deregulation efforts in several areas. The experience with deregulation of oil prices makes clear
that continued regulation of natural gas prices is not appropriate.
Reform of nuclear licensing requirements also deserves attention.
Further deregulation of the banking system should be paired with a
major reform of the deposit insurance systems. Some changes in the
single-employer pension law and an increased premium are necessary to preserve the pension insurance system. We should also




seriously consider eliminating the remaining Federal regulation of
trucking and railroads. Finally, I remain hopeful that the Administration and the Congress can work together to reauthorize the major
environmental laws in a way that serves our common environmental
and economic goals.
Monetary Policy

The Constitution authorizes the Congress "T6 coin Money (and)
regulate the Value thereof," and Congress has delegated this authority to the Federal Reserve System. The role of the executive branch
is restricted to advising the Congress and the Federal Reserve about
the conduct of monetary policy, and to nominating members of the
Board of Governors as positions become vacant.
During my first term, the Federal Reserve reduced the rate of
money growth relative to the high rates of the late 1970s. This
change in policy, assisted by the related strong [increase in the exchange value of the dollar, helped produce a substantial reduction of
inflation and market interest rates. On occasion, however, the rate of
money growth has been quite volatile, contributing to instability in
interest rates and a decline in economic activity. The sharp reduction
in money growth through mid-1982, for example, undoubtedly added
to the length and severity of the 1981-1982 recession. And a similar
reduction in money growth in the second half of 1984 contributed to
the temporary slowing of economic growth late in the year.
We reaffirm our support for a sound monetary policy that contributes to strong, steady economic growth and price stability. Moreover,
we expect to cooperate closely with the Federal Reserve in defining
and carrying out a prudent and predictable monetary policy.
Conclusion

The Federal Government has only a few important economic responsibilities. Given a proper conduct of these important roles, additional Federal intervention is more often a part of the problem than
a part of the solution. We should continue to reduce the many lessimportant economic activities of the Federal Government so that individuals, private institutions, and State and local governments will
have more resources and more freedom to pursue their own interests. Good stewardship of our constitutional responsibilities and the
creative energies of the American people will ensure a future of continued economic growth and opportunity.

(\

February 5, 1985




^







THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS




LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,

Washington, D.C, January 19, 1985.
MRI PRESIDENT:

The Council of Economic Advisers herewith submits its 1985
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,




9 William A.
\M\\\\<*rn A

Niskanen

Member

William Poole
Member

13




CONTENTS
Page

CHAPTER 1. ECONOMIC POLICY FOR GROWTH AND STABILITY

The Economic Recovery Program
The Background of Poor Economic Performance
The Background of Unsustainable Economic Policies..
Fiscal Policy 1981-84
Monetary Policy 1981-84
Review of 1981-84 Economic Performance
The 1983-84 Recovery
The 1981-84 Labor Market
Inflation and Interest Rates
Exchange Rates, International Trade, and Capital
Flows
Special Problems
Policies for Sustained Economic Growth
Growth as a Goal
Productivity
The Determinants of Total GNP Growth
The Importance of Price Stability to Economic
Growth
The Outlook for Economic Growth
Policies for Employment and Price Level Stability
Monetary Policy
Fiscal Policy
The Outlook for 1985-90
Monetary and Fiscal Policy Assumptions
The Outlook for 1985
The Outlook for 1986-90
CHAPTER 2. THE FEDERAL BUDGET AND THE ECONOMY

Major Current Fiscal Issues
Effects of the Economy on the Federal Budget
Effects of the Federal Budget on the Economy
The Federal Tax System
Proposals for Reform of the Federal Tax System
Budget Concepts, Processes, and Fiscal Authority
Changes in Budget. Concepts
Changes in the Budget Process
Changes in Fiscal Authority
Conclusion




15

21

23
23
24
26
27
28
29
32
33
36
36
39
39
41
42
46
46
47
49
57
58
59
62
63
65

66
68
70
77
82
92
92
93
95
97

Page
CHAPTER 3. THE UNITED STATES IN THE WORLD ECONOMY

The U.S. Recovery and the World Economy
Causes of the Trade Deficit
The Strong Dollar
The Debtor Countries: Recent Progress
Industrialized Trading Partners
Recent U.S. Actions in International Trade
The Trade and Tariff Act of 1984
Other Trade Actions
Actions in International Finance
The Challenge of Comprehensive Free Trade
The Case for Free Trade
Obstacles to Comprehensive Free Trade
A Strategy for Free Trade
CHAPTER 4. HEALTH STATUS AND MEDICAL CARE

Health Status of the American Population
Trends in Medical Care Spending and Use
Factors Responsible for Rising Medical Care Expenditures
Trends in Use of Medical Care Services
Does More Medical Care Produce Better Health?
The Effects of Lifestyle on Health
Public Policy to Encourage Healthy Behavior
Health Insurance and Medical Care Costs
The Tax Subsidy for Private Health Insurance
Reforming the Tax Treatment of Health Insurance
Benefits
Indemnity Insurance and Preferred Provider Organizations
Public Policy Toward Discounts
The Role of Information in Medical Care Markets
Medicare: Public Health Insurance for the Elderly
Medicare Background Information
Medicare Physician Reimbursement
Medicare Hospital Reimbursement Policy
Care for the Dying
Coverage for New Medical Technology
Medicaid: Public Health Insurance for the Poor
Medicaid Background Information
Aid to Families with Dependent Children Medicaid
Long-Term Care Medicaid
Conclusion




16

99

100
102
103
106
109
Ill
Ill
112
113
114
115
119
122
129

130
132
134
135
136
137
138
139
141
142
142
143
144
145
146
147
149
153
154
154
154
156
157
157

CHAPTER 5. ECONOMIC STATUS OF THE ELDERLY

Current Financial Status of the Elderly
Incomes of the Elderly
Poverty Rates as a Measure of Need
Benefits in Kind
Asset Levels
Sources of Support for the Elderly
Earnings
,
Assets and Family Support
Social Security
Pensions
Policy Implications: Private and Social Security Resources..
CHAPTER 6. THE MARKET FOR CORPORATE CONTROL

Control of Publicly Traded Corporations...
Incentives and Corporate Management
Recent Takeover Experience
The Debate Over Contests for Corporate Control
Policy Considerations
Merger and Acquisition Activity in Perspective
Benefits and Costs of Takeover Transactions
Stock Market Prices as a Measure of Benefits and
Costs
Evidence that Takeovers are Beneficial
Sources of Gain from Takeover Activity
Dangers of Merger and Acquisition Activity
Regulating Bidder Tactics
The Economic Consequences of the Williams Act
The Debate over Bidder Tactics
Regulating Defensive Tactics
Consequences of Defensive Tactics
The Definition of Abusive Defensive Tactics
Defensive Tactics Frequently Criticized as Abusive
Remedies Other than Federal Legislation
Conclusion

Page
159

160
161
166
167
168
169
170
172
174
177
183
187

187
188
189
190
191
192
196
197
197
198
199
202
203
204
206
206
208
209
212
216

APPENDIXES

A. Report to the President on the Activities of Council of
Economic Advisers During 1984
B. Statistical Table Relating to Income, Employment, and
Production

217
225

List of Tables and Charts
Tables

1-1. Real GNP Growth over First Eight Quarters of Business
Cycle Recoveries
1-2. Sector Contribution to Real GNP Growth: Typical and
Current Recovery




17

29
30

List of Tables and Charts—Continued
Tables

1-3.
1-4.
1-5.
2-1.
2-2.
2-3.
2-4.
2-5.
2-6.
2-7.
4-1.
4-2.
4-3.
5-1.
5-2.
5-3.
5-4.
5-5.
5-6.
6-1.
6-2.
6-3.

Page

Accounting for Growth in Real GNP, 1948-90
Economic Outlook for 1985
Administration Economic Assumptions, 1985-90
Federal Expenditures, Receipts, and Borrowing as a
Share of GNP, Selected Years, 1929-84
Sensitivity of the Budget to Changes in Economic Conditions, Fiscal 1986 and 1987...
Allocative Cost of Government Expenditure
Allocative Cost by Type of Tax
Effective Federal Corporate Tax Rates on Equity-Financed Investment in Equipment and Structures
Effective Federal Corporate Tax Rates on Equity-Financed Investments in Equipment and Structures for
Selected Industries
Annual Rental Rate on Corporate Capital
National Health Expenditures by Type of Expenditure
and Source of Funds, 1983
National Health Expenditures, by Source of Funds and
as Percent of Gross National Product, Selected Years,
1965-83
Sources of Funds for Personal Health Care Expenses,
Selected Years, 1950-83
Mean Real Money Income Before Tax (in 1983 dollars)
of Families and Unrelated Individuals, Selected Years,
1950-83
;
Mean Real Money Income Before Tax of the Elderly
and Non-elderly, 1970 and 1983
Increases in Wages, Prices, and Social Security Benefits,
1950-83
Percent of the Elderly and Non-elderly Populations with
Incomes Below the Poverty Line, Selected Years,
1960-83
Financial Assets and Homeownership of Households
Holding Such Assets, by Age Group, 1983
Social Security Coverage and Benefit Levels, Selected
Years, 1950-83
Number and Value of Merger and Acquisition Transactions, 1963-84
Value of Merger and Acquisition Transactions, by Industry, 1981-83
Concentration of Assets in the Nonfinancial Sector,
1977-81




18

43
63
64
66
69
73
79
81
82
91
133
134
146
162
163
165
166
169
174
193
194
200

List of Tables and Charts—Continued
Charts

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

Nominal and Real Interest Rates
Money Growth and Inflation
Ml Money Stock and Federal Reserve Target Ranges
Money Growth and the Business Cycle
Alternative Ml Target Ranges for 1985
Balances on Merchandise, Services, and Current Account
3-2. Investment and Saving in 1982 and 1984
3-3. Nominal and Real Exchange Rates and Expected Real
Interest Differential
6-1. Target Management Responses to and Outcomes of
Tender Offers, 1978-83




19

34
50
53
55
61
100
102
104
207




CHAPTER 1

Economic Policy for Growth and
Stability
AS THE PRESIDENT BEGINS HIS SECOND TERM, it is time to
take stock—to review the inherited conditions, policy actions, and unforeseen events that shaped the first term and established the initial
conditions for the second term. Taking stock will help to define the
job to be done over the next 4 years, the fundamental nature of
which is to develop economic policy for growth and stability.
Looking back 4 years, it is not difficult to see why continuing emphasis on growth and stability is appropriate. Policy formulation in
January 1981 was conditioned by these facts: labor productivity in the
nonfarm business sector in 1980 was 2.2 percent below its 1978
level; the total unemployment rate had risen to 7.4 percent from a
low of 5.5 percent in mid-1979; the 12-month inflation rate as measured by the consumer price index (CPI) was 11.7 percent, compared
with only 4.8 percent in 1976; and the 13-week Treasury bill rate was
15.0 percent, up from a 1976 average of 5.0 percent.
These summary statistics understate the nature of the economic
problem facing the Administration in January 1981. The economy
was unsteady, only a few months into a recovery from the short,
sharp recession in the first half of 1980. Both renewed recession and
continued volatile inflation seemed possible. Throughout U.S. history, bouts of inflation had been regarded as temporary departures
from price stability, but by 1980—after 15 years of inflation at varying rates—rising prices were coming to be regarded as normal. So
also were the instabilities of output, employment, and government
policy associated with inflation. In this uncertain environment, the
Administration was faced with the task of introducing fundamental
changes in the direction of economic policy.
It is not surprising that the economy's response to major changes
in monetary and fiscal policy was not smooth. The recession that
began in August 1981 occurred after only 12 months of incomplete
recovery from the 1980 recession. Although the peak-to-trough decline over the 1981-82 recession was not unusually large relative to
previous recessions, unemployment and excess manufacturing capacity in late 1982 reached the highest rates in the postwar period.




21

But the economic recovery in 1983-84 was sparkling. Employment
and output gains were large, and they were achieved in an environment of stable to declining inflation. Productivity growth had resumed. Gross business fixed investment rose especially rapidly, and
in real terms reached the highest share of gross national product
(GNP) in the postwar period. At the end of 1984 the unemployment
rate was 7.1 percent, the 12-month CPI inflation rate was 4.0 percent, and the 3-month Treasury bill rate was 8.1 percent. Numerous
other indicators signaled a resumption of economic growth and vitality within an environment of greater economic stability and growing
confidence on the part of most Americans.
Economic performance over the past 4 years may be best understood within this framework: The period began with a difficult set of
inherited economic conditions. In 1981 the Administration and the
Congress enacted major changes in the direction of fiscal policy, and
the Federal Reserve System maintained a policy of substantial monetary restraint. The economy underwent a transitional period of adjustment shaped by the inherited conditions and the policy changes.
Finally, the economy began to follow a course of renewed growth
and stability.
This framework, although useful, is in many ways too orderly. Over
the past 4 years special problems and surprises appeared. The 198182 recession was of greater severity and duration than had been foreseen. The international debt crisis required rapid response. Interest
rates remained surprisingly high and were often volatile. The U.S.
dollar continued to amaze most observers by its almost continuous
appreciation against foreign currencies. The current account deficit
in the balance of payments became very large by historical standards.
Finally, the Federal budget deficit turned out to be much larger than
had been anticipated.
At the beginning of 1985 certain conditions—especially the budget
deficit and the possibility of future monetary instability—remain as
sources of uncertainty to private decisionmakers and as challenges to
policymakers. The task ahead is to ensure that present policy problems are solved satisfactorily, so that 1981-84 will indeed be properly
viewed as a transitional period followed by an era of substantially improved economic performance. But if the policy agenda cannot be
completed and does not fulfill the promise of the gains achieved, history's interpretation of the past 4 years will be different. This period
will then be properly regarded as simply another volatile episode in
which gains from improved policies were later lost as the Nation was
unable to finish the task of changing the direction of economic
policy.




22

The first third of this chapter is devoted to a review of the performance of the economy under the Administration's first-term programs. Policy principles for growth and stability are explored in the
middle third of the chapter, and the economic outlook for 1985-90 is
discussed in the final third.
THE ECONOMIC RECOVERY PROGRAM
The President took office determined to redirect economic policy.
On February 18, 1981, the Administration submitted its program to
the Congress in a document entitled, "America's New Beginning: A
Program For Economic Recovery." Quoting from that document, the
key elements of the program were:
1. A budget reform plan to cut the rate of growth in Federal
spending.
2. A series of proposals to reduce personal income tax rates by 10
percent a year over three years and to create jobs by accelerating
depreciation for business investment in plant and equipment.
3. A far-reaching program of regulatory relief.
4. And, in cooperation with the Federal Reserve Board, a new
commitment to a monetary policy that will restore a stable
currency and healthy financial markets.
The fundamental goals of the program were restoration of economic growth and stability. Reduction of governmental obstacles to
production and improved incentives for work, saving, and investment
were essential. So also was restoration of price stability. Overall, the
policy direction has been guided by a clear and consistent set of principles, of which the most important have been reliance on markets
and the maintenance of a long-run policy orientation.
THE BACKGROUND OF POOR ECONOMIC PERFORMANCE

Numerous forces destructive to productivity and output growth
were at work in the late 1970s. Measuring from one business cycle
peak to another, productivity gains in the nonfarm business sector
trailed off from the postwar average of 2.4 percent annual growth between 1948 and 1973 to 0.6 percent between 1973 and 1980. Real
GNP growth declined from 3.8 to 2.7 percent per year over the same
two periods. In real terms the take-home pay of workers was eroded
by the slow productivity growth, by a reduction in average hours
worked per week, and by rising tax burdens as inflation pushed most
workers into higher tax brackets.
In early 1981, Americans still remembered the recessions of 196970, 1973-75, and 1980. However unwelcome this record, it was not
unusual in the light of U.S. history. It was unusual, however, that the




23

economic recovery in the second half of 1980 seemed to have so
little promise of being long sustained, primarily because the inflation
rate was so high.
It is important to note, however, that more than 14 million new
jobs were created between the recession trough in March 1975 and
the next business cycle peak in 1980. Because employment grew
more rapidly than the working-age population, the fraction of the
population employed increased. In the 1970s the U.S. economy continued to be a marvelous job-creating machine.
But during the late 1970s, the inflation that accompanied the employment gains showed that economic policy was on an unsustainable
course. After 1976 the inflation rate rose every year, with the annual
CPI increase peaking at 13.3 percent in 1979 before falling to a still
high 12.4 percent in 1980. Reflecting this inflation, between mid1976 and mid-1980 the foreign exchange value of the dollar fell by
about 20 percent on a trade-weighted basis.
Rising inflation was the most important determinant of rising interest rates in the late 1970s. Despite sharp increases in nominal interest rates, the real, or inflation-adjusted rate of interest rose relatively
little. Holders of long-term bonds were especially harmed. Inflation
eroded the purchasing power of annual interest payments on outstanding bonds, and rising interest rates reduced bond prices, leaving
bondholders with capital losses. It has been estimated that the typical
holder of long-term U.S. Government bonds suffered losses, in real
terms, of about 7 percent in 1977, 9*/2 percent in 1978, 13 percent in
1979, and 14Vi percent in 1980.
Given this experience, it is not surprising that investors became increasingly wary. Bonds—previously a safe and conservative investment—had become risky and speculative. Asset demands shifted away
from productive capital in the United States toward investment in
foreign assets and various speculative real and financial assets, such
as precious metals.
THE BACKGROUND OF UNSUSTAINABLE ECONOMIC POLICIES

In the 1970s the interaction of economic events and economic
policy created a growing uncertainty about the future, which was
manifested most clearly in rising and increasingly volatile interest
rates and a falling dollar on the foreign exchange market. Money
growth, as measured by the Ml definition, was 5.0 percent in 1975
before beginning a sustained rise. In 1976 the rate was 6.1 percent;
in 1977, 8.1 percent; in 1978, 8.2 percent; and in 1979, 7.5 percent.
In the latter 3 years money growth exceeded the Federal Reserve's
announced growth targets, contributing to market concern over monetary policy.




24

Rising interest rates after 1976 did not signal tight monetary
policy. As actual and expected inflation rose, interest rates
were bid up by rising credit demands. The stance of the Federal Reserve became more restrictive in November 1978, but money growth
and inflation remained high. In October 1979 the Federal Reserve, in
an effort to keep monetary growth within its targets, announced a
dramatic policy shift toward greater relative emphasis on controlling
the provision of reserves to the banking system and less on controlling interest rates. Unfortunately, after this change in operating procedures, both short-run money growth and interest rates became
more volatile, adding to market uncertainties about monetary policy.
Fiscal policy, as reflected by the Federal deficit in the national
inconie and product accounts, on the surface appeared on track in
the late 1970s. The deficit fell from 3.1 percent of GNP in calendar
year 1976 to 0.7 percent of GNP in 1979, mostly because inflation
swelled tax receipts. However, with the short recession in 1980 the
deficit rose to 2.3 percent of GNP in that year. Total Federal receipts
as a fraction of GNP increased continuously throughout this period,
eventually reaching an all-time high of 21.1 percent in 1981. Personal
income tax receipts grew by 77.2 percent between 1976 and 1980,
compared with nominal GNP growth of 53.2 percent, as inflation
pushed individuals into higher tax brackets.
Federal regulatory policy was a source of difficulty. Three manifestations of a general reliance on regulation instead of market forces to
solve economic problems deserve special attention.
First, in the late 1970s the Federal Government attempted to rely
on wage and price guidelines to control inflation, despite the lack of
success with guidelines in the 1960s and the disruptive failure of
comprehensive wage and price controls in the early 1970s. In late
1978 voluntary standards for pay and price increases were announced. In March 1980 a credit control program was introduced
that contributed to an increase in the unemployment rate from 6.2
percent to 7.7 percent between March and July 1980. Moreover,
during 1980 the GNP price deflator continued to rise at a rate in
excels of 10 percent, a rate somewhat above the 8.2 percent rate
throughout the four quarters of 1979.
Second, specific controls on oil and gas prices, production, and
distribution created significant distortions in the markets for petroleum and petroleum products. Following both the 1973-74 and 197980 increases in world oil prices, the effects of price controls and their
accompanying allocation regulations were severe. Widespread shortages of gasoline and other products and numerous changes and exceptions to the regulations made business planning more difficult.




25

Finally, throughout the 1970s inefficient regulatory approaches to
environmental, health, and safety problems raised production costs
and created considerable uncertainty as rules and regulations shifted
and changed. One outcome of these policies was a substantial increase in the cost of new business investment with a corresponding
reduction in the expected rate of return, reducing business fixed investment and productivity growth.
FISCAL POLICY 1981-84

The cornerstone of the Administration's tax policy, the Economic
Recovery Tax Act (ERTA), was signed into law in August 1981. This
Act legislated sweeping changes in both the individual and corporation income tax systems.
This Act provided for an across-the-board reduction in individual
income tax rates amounting to 23 percent at the end of 3 years, and
an immediate cut in the top bracket rate from 70 to 50 percent. The
new law also established that, beginning in 1985, the tax brackets,
exemption amounts, and the zero-bracket amount would be indexed
annually for inflation. This change ensured that inflation would not
erode the ERTA tax reductions by pushing individuals into higher
tax brackets.
Reduced marginal tax rates were designed to increase incentives
for supplying labor and acquiring training and education. There was
a shift in emphasis away from using the tax system to redistribute
income and toward the creation of national income through economic growth.
Responding to a widely held concern that the pace of capital formation had been insufficient, ERTA allowed accelerated depreciation
of new capital assets and a system of expanded investment tax credits. Both of these provisions decreased the effective tax burden on
new investment, and thus provided an incentive for increased capital
formation. To encourage saving, ERTA extended the individual retirement account program to individuals covered by employer-sponsored retirement plans and increased the maximum annual contribution from $1,500 to $2,000.
The Tax Equity and Fiscal Responsibility Act of 1982 modified
some of the effective tax reductions granted to businesses under
ERTA. One of the objectives was to reduce the tax benefits of the
investment tax credit and the accelerated cost recovery system so that
they would not be more generous than an immediate writeoff. Although this Act repealed further accelerations of depreciation allowances scheduled for 1985 and 1986, the ERTA depreciation schedules for 1981-84 were left basically intact. The 1982 Act also contained provisions relating to "Safe Harbor Leasing," compliance, in-




26

surance, excise taxes, and other matters. The revenue provisions of
the Social Security Amendments of 1983 apply predominantly to
years after 1984, and therefore had little revenue impact before that
time. The Deficit Reduction Act of 1984 contained numerous tax
code changes, most of which were individually small and designed to
make existing tax laws more effective.
The 1981-84 changes in tax law reduced receipts as a share of
GNP to the range that had existed over most of the 1970s—from
21.1 percent in 1981 to an estimated 19.2 percent in 1984. Without
these changes, Federal receipts would have risen further—to an estimated 22.0 percent of GNP in 1984 given actual 1984 economic conditions. However, in the absence of tax law changes, GNP growth
during the recovery would probably have been lower.
The changing composition of Federal expenditure since 1980
clearly reflects the objectives of the Administration. As a share of
GNP, defense purchases grew from 5.0 percent in 1980 to 6.0 percent in 1984, while total spending less defense purchases and net interest payments declined from 15.9 percent in 1980 to 14.8 percent
in 1984. However, total Federal expenditure increased from 22.9
percent of GNP in 1980 to 24.0 percent in 1984. The Federal deficit
rose from 2.3 percent of GNP in 1980 to 4.8 percent in 1984.
MONETARY POLICY 1981-84

There were three major phases to monetary policy over the 1981—
84 period. In the first phase, extending to mid-1982, the Federal Reserve's main concern was to restore credibility in the markets by pursuing a restrictive monetary policy designed to reduce inflation. Although the 1980 credit control program was a contributing factor,
monetary policy procedures introduced in October 1979 quite generally yielded both volatile interest rates and volatile money growth.
Moreover, as the recession developed, the average rate of money
growth in 1981 and the first half of 1982 was substantially lower than
it had been over the previous several years. Money growth did not
decline gradually and predictably as advocated by the Administration.
The second monetary policy phase began in the late summer of
1982. Prompted by the international debt crisis and accumulating evidence that the recession would be deeper and more protracted than
had been expected, the Federal Reserve abandoned the short-run operating procedures introduced in October 1979 and turned to procedures that were similar to those pursued before 1979.
Interest rates fell sharply as money growth accelerated starting in
August 1982. The Federal Reserve permitted money growth to
remain high as deregulation allowed depository institutions to introduce new types of deposit accounts in December 1982 and January




27

1983, temporarily clouding the interpretation of the monetary aggregates data. However, as the economy revived in the winter and
spring of 1983, both the Federal Reserve and the Administration
became more concerned about the continuing high rate of money
growth.
The third phase of monetary policy began in the late spring of
1983. Controlling money growth again became an important objective of Federal Reserve policy, and money-market interest rates were
permitted to rise. From the middle of 1983 through mid-1984,
money growth was substantially below the rate from mid-1982 to
mid-1983. In the second half of 1984 money growth declined even
further.
REVIEW OF 1981-84 ECONOMIC PERFORMANCE

Shortly after this Administration took office it was faced with a recession. At the end of 1981 and into early 1982, however, there were
reasons to believe that the recession would not be particularly deep.
In 1982 the initially reported data showed that in the first quarter real
final sales grew at a 1.9 percent annual rate—the data now show a
decline of 1.0 percent—and that in the second quarter real GNP rose at
a 1.7 percent rate—the data now show a decline of 0.8 percent.
However, later in the year incoming data indicated that the economy
was weaker than had been thought.
Late 1982 was a very uncomfortable time for economic policymakers. Although the classic signs of recovery were accumulating, many
observers remained pessimistic. By the end of 1982 the recession had
run its course, however. The unemployment rate peaked at 10.6 percent in November and December. By early 1983, the probable resumption of economic growth was signaled by a number of indicators
including the beginning of strong growth in real final sales that, from
data now available, rose at a 5.5 percent annual rate in the fourth
quarter of the year. With final sales rising while total output was
about flat, there was a substantial reduction of inventory stocks,
which helped to provide the conditions for a resumption of output
growth.
It appears that monetary conditions on both the demand and
supply sides contributed to the depth of the recession. Money
demand—measured by the quantity of money held relative to GNP—
rose to an unusual degree, probably reflecting both the reduced cost
of holding money balances as market interest rates fell and the
spread of interest-bearing negotiable order of withdrawal (NOW) accounts nationwide. Uncertainty attributable to volatile economic and
financial conditions may also have raised the demand for money. In
addition, from early 1981 through mid-1982 the Federal Reserve per-




28

mitted substantially lower Ml money growth than had prevailed over
the previous several years. This contributed downward pressure on
the economy as well.
Fiscal policy may have provided some support to aggregate
demand as the ERTA tax cuts gradually took effect and national defense purchases grew, but the stimulus was probably small. The
ERTA investment incentives cushioned the decline in business fixed
investment, but high real interest rates tended to depress housing
construction, inventory investment, and expenditure on consumer
durables. High real rates of interest were also important to the
strengthening of the dollar and consequent decline of net exports.
TJie 1981-82 recession was a painful experience for many. The unemployment and bankruptcy rates were high. The protracted recession was an unexpected and unwanted part of the economy's transition to lower inflation. The severity of the recession should serve to
emphasize the importance of avoiding the economic conditions that
created it.
THE 1983-84 RECOVERY

The recovery in employment and output has been brisk. Even with
the slowdown in real GNP growth in the second half of 1984, the
present recovery through the first eight quarters is still the strongest
since the .Korean war. By the end of 1984 the unemployment rate
had declined by 3.5 percentage points, and industrial production had
risen by more than 23 percent from the recession trough. Table 1-1
provides comparative data on postwar expansions.
TABLE 1-1.—Real GNP growth over first eight quarters of business cycle recoveries
[Percent]
Average annual growth over
Business cycle trough quarter

First four
quarters

Second
four
quarters

First
eight
quarters

Present recovery:
6.3

5.6

6.0

13.3

1982 IV
Previous postwar recoveries:
1J949
1954
1958
1961
1970
1975
1980

IV
11
II
I
1V
1
III

7.4
8.4
7.0
4J
6.7
4.0

1
Excludes 1949 and 1980.
Note.—Business cycle troughs are as determined by the National Bureau of Economic Research.
Source: Department of Commerce, Bureau of Economic Analysis, except as noted.




29

-3.0

9.6
5.0
5.0
5.1
5.8
5.5
.4

6.8
7.4

Average of five recoveries 1 ..
Average of seven recoveries..

5.9
2.6
1.7
3.3
7.0
4.4
3.8
3.1

5:3
5.2

Some of the major characteristics of the present expansion are revealed in Table 1-2, which reports the percentage point contributions of various demand components to the total increase in real
GNP and compares them with a "typical" expansion. The typical expansion is defined as the average of postwar expansions excluding
those beginning in the fourth quarter of 1949 and the third quarter
of 1980; the former was distorted by the Korean war and the latter
lasted only four quarters.
TABLE 1-2.—Sector contribution to real GNP growth: typical and current recovery
Annual rate over first
eight quarters
Item

Typical
recovery»

Current
recovery *

5.3

6.0

Personal consumption expenditures..
Durable goods

3.2
.9

3.3
1.2

Nonresidential fixed investment
Producers' durable equipment..
Structures

.6

1.8
1.5

Residential investment

.5

.6

Change in business inventories..

.7

1.3

REAL GNP GROWTH (percent change)
Sector contribution to GNP growth (percentage points):

.1

Net exports of goods and services..
Exports
Imports'

~A
A

Government purchases of goods and services....

U

.3
-.1
-.1
.4

.3
.1

4.6
4.6
4.6
4.6

Federal excluding CCC purchases
State and local
Final sates:
Total *
Excluding CCC purchases'*"!;™"!™;;....
To domestic purchasersa
Domestic excluding CCC purchases7..
1
Average of recoveries following business cycle
1
Calculated from 1982IV business cycle trough
3
Negative contribution to GNP growth.
4
GNP less change in business inventories.
8

-1.3

4.7
4.9
6.0
6.2

\l

troughs In 1954II, 195811,19611,1970IV, and 19751.
to 1984IV; data for 1984IV are preliminary.

CCC purchases removed because inversely related to change in business inventories with dollar for dollar offset for paymentin-kind programs.
8
Final sales less net exports of goods and services.
7
Final sales less net exports of goods and services and CCC purchases.
Note.—Business cycle troughs are as determined by the National Bureau of Economic Research.
Detail may not add to totals due to rounding.
Source: Department of Commerce, Bureau of Economic Analysis, except as noted.

Consumption and Residential Investment

Throughout the present expansion, both total consumption expenditure and its durables consumption component have increased at
quite typical rates. Real disposable income grew at a 5.5 percent rate
over the first eight quarters, somewhat above the typical rate of 4.6
percent. The personal saving rate has been somewhat below the
1947-80 average of 6.6 percent. Residential investment was about on
track in comparison with the typical recovery.




30

Business Fixed Investment

Over the first eight quarters of the expansion, gross business fixed
investment contributed 1.8 percentage points of real GNP growth,
about three times the typical contribution. The strength of investment has been concentrated in durable equipment; structures investment has grown at a more typical rate. The rapid growth of investment from the recession trough has taken the share of real GNP devoted to real gross business fixed investment to 12.5 percent in 1984.
By the fourth quarter of 1984 this share had climbed to 12,9 percent.
Net business fixed investment as a share of GNP has not set a new
hi£h as has gross investment, partly because recent investment has
been strong in relatively short-lived components.
A number of conditions have increased the prospective rate of
return on new investment, and have thereby been responsible for the
investment boom. The ERTA tax incentives and lower inflation have
befcn important. The vigorous recovery has absorbed a significant
amount of excess capacity. Prices of investment goods have been unusually well-contained; in fact, the deflator for nonresidential investment in the fourth quarter of 1984 was slightly below its level 2 years
earlier. To a considerable extent, this development reflects the
strbng dollar and the competition from foreign producers of capital
gopds.
The effects on rates of return in the nonfinancial corporate sector
operating through the cost side can be summarized by examining the
unit costs of production. Cost increases have been moderate. Unit
co^ts rose at an annual rate of only 0.2 percent over the first seven
quarters of the recovery. A 3.4 percent rate of increase of hourly
compensation combined with 2.7 percent labor productivity growth
resulted in a rise of unit labor costs of about 0.7 percent, while other
unit costs dropped at a 1.0 percent rate. The increase in hourly compensation was the lowest of any recovery since the data became available in 1958.
Inventory Investment

Given the large role of inventories in the 1981-82 recession, it is
notj surprising that a snapback of inventory investment has been a
major contributor to the current expansion, especially in its first year.
Despite the growth of inventory investment, inventory-sales ratios in
late 1984 were still low by historical standards, suggesting that the
economy has not developed any serious inventory imbalances.
Net Exports

The decline in the net export balance is one of the striking features of the present expansion. Exports have grown in typical fashion* but imports have grown very rapidly.




31

It is a mistake to believe that GNP would necessarily have grown
more rapidly if imports had grown less rapidly; lower imports would
probably not have been entirely replaced by U.S. production of competing goods. The decline in the net export balance was closely related to the appreciation of the dollar, which was caused by efforts to
move capital into the United States to take advantage of the attractive
investment climate. There would have been a variety of repercussions
if the U.S. investment climate had been less attractive and if the
dollar had not appreciated so much. With less dollar appreciation the
inflation rate would not have declined as much; more of the growth
in nominal GNP would have reflected inflation and less would have
reflected growth in real output. Although net exports would have
been higher, interest-sensitive spending including business investment would have been lower.
Government Purchases of Goods and Services

Government purchases in the national income and product accounts are not the same as government outlays; purchases exclude
the transfers component of outlays and reflect certain other differences in concepts from those used in reporting government budgets.
As can be seen in Table 1-2, government purchases of goods and
services in the present expansion have a contribution to GNP growth
that is quite typical of previous expansions. Excluding purchases of
the Commodity Credit Corporation (CCC), the Federal Government
contribution has been larger than typical.
THE 1981-84 LABOR MARKET

Following declines during the recession, employment increased by
3.6 percent over the first year of the recovery and by 3.1 percent
over the second year; both of these increases were well above the average rate for postwar recoveries. During both the recession and the
recovery, money wage increases moderated substantially. Virtually all
measures of labor compensation were rising at around 9 percent in
1980, but in 1983 and 1984 most of these measures were rising only
about half as rapidly. The hourly earnings index, for example, rose
by 9.3 percent in 1980 but by only 3.3 percent in 1984, the lowest
increase since 1965.
Union wages began decelerating before nonunion wages and the
deceleration of union wages has been greater than that for nonunion
wages. This development may reflect cyclical pressures on certain industries and also longer run market forces tending to reduce the gap
between union and nonunion wages.
Some recent union wage settlements have involved an actual reduction in wages or fringes, a relaxation of work rules, or wage




32

freezes. Concessions have occurred in previous recessions, but the
scale of recent concessions is unprecedented.
It is possible to pinpoint some forces that have led to these new
bargaining patterns. Industries face increased competition from foreign and domestic producers. Imports have increased dramatically in
the apparel, textiles, and footwear industries. Concession bargaining
has dominated wage settlements in construction over the past year as
the market position of firms employing nonunion workers has grown.
Older trucking and airline firms have faced new competitors as deregulation reduced barriers to entry.
Despite the dramatic deceleration in money wages starting in 1982,
rising productivity has permitted real wages to rise without eroding
business profits. Other forces that reduced total take-home pay in the
seventies were reversed as well. Real hourly compensation has increased since 1981, hours per week have risen, and average tax rates
have fallen.
INFLATION AND INTEREST RATES

Between 1981 and 1984 the inflation rate declined more rapidly
than even most optimists had expected. Inflation, as measured by the
GNP deflator, declined from about 9.0 percent in 1981, to 4.3 percent in 1982, 3.8 percent in 1983, and 3.5 percent in 1984. Anticipated inflation, as recorded in a regular survey, was above actual inflation in every quarter except the first and third quarters of 1981.
Although it is common for inflation to fall somewhat during the
early stages of business cycle recoveries, few observers anticipated
that the inflation rate would remain so low during a recovery as rapid
as that experienced in 1983-84. The inflation rate rose slightly in the
second half of 1983 and early 1984, but there was no apparent tendency for the rate to rise further. Indeed, over the course of 1984 the
inflation rate declined somewhat. However, inflation is still higher
than desirable, and it is worth noting that the services component of
the CPI in 1984 showed some signs of slightly rising inflation.
Chart 1-1 provides a perspective on interest rate behavior after the
mid-1970s. Nominal interest rates were extremely volatile in the early
1980s, and on average remained unusually and surprisingly high.
Ratfes finally fell significantly in the summer of 1982 and thereafter
remained below their 1981 peaks. By the fourth quarter of 1982,
short and long real rates were about 3 and 4 percent, respectively,
based on survey information reporting short-term anticipated inflation of about 5.5 percent and long-term anticipated inflation of about
6.5 percent.
From the end of 1982 to mid-1984 short and long nominal interest
rates rose by almost 3 percentage points; short and long real rates




33

Chart 1-1

Nominal and Real Interest Rates
Percent per annum

16 _

Nominal Interest Rates

14

12

10

3-Month Treasury Bill
(Effective
Yield)

I I I I I I I I I I I I I I I I I I I I I
1975

76

77

78

79

80

81

82

83

I

84

Percent per annum

8

_-

6

—
-

O

1 Ai

-

4

10-Year

Real Interest Rates

IBM

(Constant

_
A

A
3-Month Treasury Bill- 1 ' /
(Effective
/
Yield)
/

\J

1
\
I

-

ffy

•

-2

1 1 1 1 1 1 1 1 1 I 1 1 1 1 1 1 1 1 1 1 1i .
1975

76

77

78

79

80

i . . .

81

i

i

i

i

82 .

i i i i i i i i~
83

1

Nominal yield less anticipated rate of inflation (as measured by change in GNP implicit price
deflator) over period to maturity from National Bureau of Economic Research/American Statistical
Association Economic Outlook Survey.
2

Nominal yield less anticipated rate of inflation (as measured by change in consumer price
index) over period to maturity from Decision-Makers' Poll by Richard B. Hoey.
Sources: Department of the Treasury, Board of Governors of the Federal Reserve System,
American Statistical Association, National Bureau of Economic Research, and Richard B.
Hoey.




34

84

rose roughly 4 and 3 percentage points, respectively. But by the end
of 1984 nominal rates had fallen about halfway back to their 1982-83
lows. Inflation anticipations seem to have declined still further in late
1984.
By historical standards, the persistently high level of real interest
rates over the past few years is one of the most unusual features of
the period. The initial increase seems associated with the change in
monetary policy in October 1979. Since 1981 the continuing high
level of real interest rates has been linked by many observers to the
large Federal budget deficit. The ensuing controversy concerned the
magnitude rather than the direction of the effect of the deficit on real
interest rates. A number of studies have found the effect to be quite
small, although some studies using different methods have found significant effects. In any event, as the economic recovery proceeded,
neither the monetary explanation nor the budget deficit explanation
of high real rates of interest was satisfactory as both explanations
were inconsistent with the strength of investment during the recovery.
It appears that the high level of real interest rates is in large part
attributable to the major change in business depreciation allowances
for tax purposes enacted in 1981, which raised the real after-tax internal rate of return on new business investment. With a higher rate
of return on new investment, it is worthwhile for businesses with
little cash but good investment opportunities to borrow at higher interest rates to finance investment. It is also profitable for businesses
with good cash flow to invest in real assets—business plant and
equipment—rather than in financial assets or investments abroad.
The substantial increase in the prospective rate of return on business
investment has therefore pulled up the real rate of interest in the financial markets. If returns to investment had been lower, both investment and the real rate of interest in the financial markets would
probably have been lower.
It is difficult to sort out the relative magnitudes of the effects on
real interest rates of monetary restriction, large budget deficits, and
high real rates of return on new business investment. It seems likely,
however, that over the 1981-84 period as a whole, and certainly over
the recovery years of 1983 and 1984, the effect flowing from a higher
rate of return on new business investment has dominated. The evidence for that proposition is the coexistence of a high real rate of
interest and great strength of business investment. If the monetary or
budget deficit effects had dominated, then high interest rates for
these reasons would have overwhelmed the new incentives to invest,
making business investment relatively weak instead of relatively
strong.




35

EXCHANGE RATES, INTERNATIONAL TRADE, AND CAPITAL FLOWS

Economic policy has had important consequences for U.S. international trade, international financial flows, and the value of the dollar.
After 1980, demand in international markets for dollar-denominated
assets increased markedly, lifting the dollar's average 1984 value in
terms of a weighted measure of other major currencies almost 60
percent above the dollar's 1980 average value. The dollar's impressive and continuing strength is consistent with high real rates of
return on U.S. investment relative to returns abroad and lower U.S.
inflation relative to inflation abroad.
As a result, the U.S. current account balance shifted from a small
surplus of $1.9 billion in 1980 to an estimated deficit of $103.8 billion, or about 2.8 percent of GNP in 1984. Of the various components of the current account, an increase in the merchandise trade
deficit made the largest contribution to the swing in the current account balance. These international economic developments are discussed in more detail in Chapter 3.
SPECIAL PROBLEMS

A number of special problems appeared over the past 4 years; perhaps the most serious were the near defaults on international debts,
the strains in agriculture, and the instabilities of U.S. financial institutions. This third problem was partly the result of the first two. A discussion of the international debt problem is contained in Chapter 3;
a brief discussion of the other two areas follows.
Agriculture

Over the 1970s, global economic growth, a depreciating dollar,
changes in Soviet import policy, and several crop failures around the
world all contributed to more than a fivefold increase in U.S. agricultural exports. These conditions together with inflation dramatically
raised farm incomes and, with expectations of inflation and low real
interest rates, set in motion huge investments to expand the productive capacity of U.S. farming and agribusiness. Total U.S. farm debt
rose from $49 billion to $155 billion during the 1970s and the average price of farmland grew more than threefold. By the end of the
1970s, American agriculture had become a very capital-intensive,
export-dependent sector of the U.S. economy, and the industry was
much more sensitive to interest rates and exchange rates than it had
been.
After 1981 the global recession depressed world agricultural trade,
and the rising dollar made it increasingly difficult for U.S. agriculture
to compete in world markets. The problem was exacerbated by the




36

Agriculture and Food Act of 1981, which established rigid price supports that tended to price U.S. commodities out of the world market.
The combined effect of these changes reduced the aggregate value
of U.S. farm exports by 16.7 percent between 1981 and 1983. As a
result of price support activities in the face of weak export demand
and bumper crops in 1981 and 1982, burdensome inventories accumulated in the Commodity Credit Corporation and Farmer Owned
Reserve. In January 1983 the Administration announced the payment-in-kind program to work off surplus inventories by inducing
farmers to reduce their planted acreage. In the 1980s U.S. agricultural policies have in effect supported world market prices for the benefit of other exporting countries, which have been able to expand
their farm exports. Farming and agribusiness in the United States
have been left with substantial excess capacity as U.S. farm exports
havei become less competitive on world markets.
Adjustments within the agricultural sector and in U.S. farm policies
have been difficult given the rapidity with which market conditions
changed in the early 1980s. Farmers who had borrowed too
much and paid too much for land in the late 1970s found themselves in difficulty. Because farmland prices have fallen between 1981
and 1984—by 7 percent on average nationally and by as much as 28
percent for some States—some highly leveraged farmers now find
their loan principal larger than the market value of their land. As a
result, the rate of farm failures has risen significantly. The failure rate
of rural banks and agribusiness firms has also increased.
Despite record high income transfers to farmers through price and
incoijne support programs, at the end of 1983 American agriculture
found itself with the lowest real net income in five decades. Returns
can be expected to improve over time through a combination of improving market conditions and a reduction of excess capacity. Change
in agriculture policies can also help by restoring the growth of agricultural exports.
Financial Institutions

The prolonged period of rising interest rates in the late 1970s, culminating in sustained high levels in the early 1980s, has been a key
cause of the weakness of many depository institutions in recent years.
For thrift institutions the problem arose principally from borrowing
on a short-term basis to make longer term loans. As rates rose, the
thrifts had to pay higher rates immediately to retain deposits, but
they could only earn the higher yields as their longer term assets
gradually matured and the funds were invested in higher yielding
assets. For commercial banks the main problem has been losses from
loan defaults or near defaults, especially on international loans,
energy development loans, and agricultural loans.




37

The seriousness of the current difficulties should not be underestimated. From 1950 to 1979, 184 banks failed—an average of 6 per
year. Between 1980 and 1984, 189 banks failed—an average of 38
per year. As for the savings and loan industry, from 1981 through
1984 the number of institutions insured by the Federal Savings and
Loan Insurance Corporation fell by about 20 percent, largely because
of mergers of weakened institutions with stronger ones.
In mid-1984 one of the Nation's largest banks had to be rescued
by a multibillion dollar package arranged by the Federal regulatory
agencies. A few weeks later, one of the Nation's largest savings and
loan associations ran into trouble. Never before in the postwar
period had the largest class of depository institutions suffered deposit "runs" requiring support from the Federal regulatory agencies.
Longstanding policy mechanisms have been used to deal with these
problems. With only a few exceptions, runs on financial institutions
have been avoided because public confidence in the financial system
has been maintained through deposit insurance and the activities of
the Federal regulatory agencies. The Federal Reserve has provided
appropriate assistance through its discount window, and the regulatory agencies have closed weak institutions or arranged orderly mergers with stronger ones. Beyond these traditional measures, the GarnSt Germain Depository Institutions Act of 1982 has allowed the Federal Deposit Insurance Corporation and the Federal Savings and
Loan Insurance Corporation to purchase net worth certificates from
qualified institutions to maintain their regulatory net worth positions
high enough for them to continue operating.
With continuing economic growth, declining inflation and interest
rates, and time for adjustment, depository institutions are strengthening their financial positions. Structural problems in the industry are
being addressed. The Garn-St Germain Act granted thrifts new
powers to diversify their portfolios away from long-term, fixed-rate
mortgages. In 1984 the Federal regulatory agencies began to take
steps to require banks to raise more capital as a precaution against
future difficulties, and the Administration and Federal regulatory
agencies began a study to reassess Federal deposit insurance. Despite
recent progress, however, many depository institutions do not as yet
have the resources to deal with a sustained period of higher interest
rates or the loan defaults that might occur if the United States and
world economies were to weaken significantly.
The Common Element

It is worth reflecting on the fact that the 1970s
fall of inflation are elements common to these
Many decisions made during the late 1970s, based
of continuing inflation, turned sour in the early




38

rise and the 1980s
special problems.
on the expectation
1980s as inflation

fell. This pattern has recurred often throughout U.S. history. The
specifics differ from one episode to another, but a feature common
to all of them is that loans made to finance projects based on the
assumption of continuing high inflation tend to go bad when inflation comes down.
POLICIES FOR SUSTAINED ECONOMIC GROWTH
What policies will best avoid the traumas of low growth, recession,
and inflation? The subject of long-run economic growth is taken up
first; issues concerning output and employment stability around the
grbwth trend and those concerning price stability are discussed in the
next section.
Almost every government spending program, every provision in
the tax law, and every regulation has some effect on growth. Most of
the effects are individually small, but their sum total is not. The purpose of this section is not to provide a detailed examination of all the
effects of government on growth—an impossible task—but rather to
sketch a framework for analyzing those effects. Some of the policy
issues are illustrated through specific examples. Chapter 2 contains a
gerieral analysis of the costs of government expenditure and the effects of the tax system on economic efficiency.
GROWTH AS A GOAL

Growth of real GNP has long been a national policy goal. Clearly,
although the welfare of a society depends very importantly on the
siz^ of its real GNP, economic welfare is not measured solely by the
quantity of goods and services produced; a single-minded devotion
to riiore output is entirely inappropriate.
A substantial part of the growth in the potential output of goods
and services has historically been taken not in the form of greater
actual output but in increased leisure. People work shorter hours and
take longer vacations than their forebears. They stay in school longer
and enjoy earlier retirement. They invest in themselves and accumulatef knowledge in ways that do not show up as entries in statistical
tables. These changes are as much a part of the economic growth
process as is the growth of real GNP measured in the national
incpme and product accounts.
Moreover, even with respect to the goods and services component
of economic welfare, the goal is consumption and not simply production^. Saving and investment are important parts of the growth process, but greater current saving and investment for a given level of
GNP generally mean less current consumption. At least in the ab-




39

sence of borrowing, current consumption must be forgone to achieve
higher future output and consumption.
Throughout U.S. history, choices between work and leisure and between present consumption and future consumption were determined almost entirely within a relatively unconstrained market economy. Over the past 50 years, however, these decisions have increasingly been influenced by government. Government itself has saved or
dissaved, and has determined the extent to which its own expenditures are oriented toward consumption or investment. Taxes, subsidies, and regulations have affected substantially the choices made by
individuals and firms. In general, government policies have tilted individual decisions toward more leisure and less work, and toward
more consumption and less saving.
Few government policies were explicitly intended to reduce work
or saving and investment, but policies introduced for other reasons
have often had these effects. With growing recognition of the importance of economic growth, all government policies need to be reexamined to determine whether their original aims are still valid or can
be met through revised policies that have less negative impact on
growth.
Some of the most difficult policy issues arise from the need to reconcile economic growth and economic security for individuals. The
growth process creates risks for individuals; growth requires that
both labor and capital resources be continuously reallocated to their
most efficient uses. Entrepreneurs take risks and are often rewarded.
Over time the economy as a whole benefits as new industries
replace old established industries and production is shifted from
one region or nation to another. In this process some people
lose jobs and some firms go bankrupt, changes that are often
wrenching for those involved.
Individuals absorb many risks themselves, through their occupational choices, savings, insurance, and other mechanisms. But over
the years the United States and other industrial countries have
sought to soften the shock to individuals resulting from the growth
process. Some of these policies, however, come at the cost of reduced growth.
Careful attention to incentive issues is central to understanding the
relation between growth and security. Although compensating individuals for losses suffered through no fault of their own often seems
fair and just, such government policies inevitably affect choices of occupations and activities. People will be more likely to engage in activities for which the probability of loss is rather high and prospective
returns low if they know that unfortunate outcomes will bring compensation from government. Long-continuing compensation may pre-




40

vent resources from moving out of declining industries to growing
ones. Public policy must weigh the value of compensating individuals
for Unfortunate outcomes after the fact against the incentive created
for people to assume risky positions before the fact and to remain in
uneconomic occupations and industries. It is simply not possible to
have a systematic public policy of compensation without creating adverse incentive effects. Government policymakers have often underappreciated the importance of the disincentives sometimes inadvertently built into policy.
PRODUCTIVITY

Productivity is at the core of the growth process. By increasing
output per hour worked, it is possible to enjoy both more consumption and more leisure. Despite its importance, productivity growth is
incompletely understood at a quantitative level. Qualitatively, however, it is clear that both formal schooling and on-the-job training are
important sources of increases in productivity, as are capital formation and technical change.
Historically, productivity increases have involved the long-term improvement of labor skills, increases in the capital available to each
worker, and the reallocation of resources from lower valued to higher
valued uses. The process of "capital deepening"—increasing the capital per worker—involves not only an increase in the quantity of capital but also an improved character or quality of capital. To be used
efficiently, more sophisticated and complicated capital must be maintained and operated by a more highly skilled labor force; the type of
capital that can be used productively in the United States, with its
highly skilled labor force, is quite different from the type of capital
that can be used productively in developing nations. To maximize
economic growth, investment in human skills and physical capital
must proceed in appropriate proportions.
Productivity is influenced by technical change. Invention and innovation improve both skills in the labor force and features of the capital with which the labor force works. The scientific aspect of technical change is obviously important, but so also is the success with
which an economy moves laboratory discoveries into the production
process.
Numerous public policies influence economic growth through their
effects on saving, investment, and the degree to which innovators
may be encouraged through patent and copyright protection. The
latter is but one example within the broad topic of the definition and
limitation of property rights and their effects on the creation and use
of resources. Budgetary allocations to subsidize education and research are obviously relevant, as are tax policies that affect the oper-




41

ating costs of scientific, educational, and research institutions and the
incentive for private individuals to make charitable gifts to them. The
vigorously competitive and open environment in the United States
has proven especially fertile to scientific and educational endeavors.
The productivity of the economy is related to the efficiency with
which it allocates its resources. The United States has been particularly successful in permitting and encouraging resources to move to
their highest valued uses. The Nation has seen enormous reallocations of resources; out of agriculture and into other industries; from
the Northeast to the South and West; from older manufacturing industries into newer high-technology industries. Labor is highly
mobile. Young people frequently move from one job to another and
from one region to another, searching out their most productive and
personally satisfying employments. Unfortunately, the efficiency with
which government itself uses resources has often been neglected;
some government expenditures appear in the national income and
product accounts as output but are in fact largely waste.
A major issue concerns the government role in allocating resources. Government subsidies and regulatory constraints affect the
allocation of resources in many parts of the economy. Some of these
policies are constructive but others waste resources, distort the mix
of production, and reduce incentives to allocate resources to their
most efficient uses. The use of tariffs and quotas to protect domestic
industries from foreign competition, and thereby to prevent or slow
the transfer of resources out of the affected industries, has been controversial from the earliest days under the Constitution.
THE DETERMINANTS OF TOTAL GNP GROWTH

Fluctuations in the growth of GNP over periods of 5 or 10 years
have been mostly attributable to changes in productivity growth, with
the important exception of the Great Depression, when a large and
long-maintained increase in unemployment depressed output. However, determinants of total output growth other than productivity are
affected by public policy and so deserve a brief discussion.
Partitioning the growth of total real GNP into components reflecting the growth of output per hour worked and the growth of total
labor hours provides a convenient analytical framework. The growth
of total hours worked can be further partitioned into population
growth, changes in the fraction of the working-age population that is
in the labor force (the participation rate), changes in the percent of
the labor force employed (the employment rate), and changes in average hours worked per employed member of the labor force.
Table 1-3 provides information structured according to this framework. To avoid complications arising from business cycle fluctua-




42

tions, the entries in the first two columns are calculated from one
business cycle peak to another. The third column reports data from
the 1981 cycle peak through 1984, and the fourth column reflects the
Administration's projections for 1984-90.
TABLE 1-3.—Accounting for growth in real GNP, 1948-90
[Average annual percent change]

1948 IV
to
1981 III

Item

1973IV
to
1981 III

1981 III
to
1984IVi

19841V
to
19901V

GROWTH IN:
(1) Civilian noninstitutional population aged 16 and over..
\ PLUS: Civilian labor force participation rate..
(3) EQUALS: Civilian labor force
(4) PLUS: Civilian employment rate

1.8
.5

(7) EQUALS: NFB employment
(8) PLUS: Average weekly hours (NFB)

1.6
.1

1.6
.3

1.6
-.2

1.8
.6

2.1
-.6

(5J EQUALS: Civilian employment
(6) PLUS: NFB Employment as a share of civilian employment..

2.4
-.4
2.0
.2

1.8
-.1

,

1.2
.4

1.5
.1

2.4
-.2

1.6
1.9

2.2
2.0

3.5

4.2
.3

(9J EQUALS: Hours of all persons (NFB)
(10) PLUS: NFB output per hour (productivity)

1.4
2.0

1.5

(11) EQUALS: NFB Output
(12) LESS: NFB output as a share of real GNP

3.4
-.1

2.2
-.2

3.5

2.4

3) EQUALS: Real GNP..

2.7

3.9

1

Data for 1984IV are preliminary.
Note.—NFB refers to nonfarm business sector.
Based on seasonally adjusted data.
Detail may not add to totals due to rounding.
Sources: Department of Commerce (Bureau of the Census and Bureau of Economic Analysis), Department of Labor (Bureau of
Labor Statistics), and Council of Economic Advisers.

Population Growth

The first row of Table 1-3 reports Bureau of the Census estimates
of population growth over the periods indicated, together with the
Census projection for 1984-90. Growth in the working-age population, of course, is an important determinant of the size of the labor
force. As can be seen from the first and last columns of the table,
population growth in the second half of the 1980s is projected at 0.9
percent per year compared with 1.5 percent per year over the 194881 period.
The Participation Rate

The participation rate, the fraction of the working-age population
in the labor force, is determined by a variety of factors. Retirement
decisions determine the labor force participation of older workers
and decisions concerning the length of schooling determine the participation of young people. Over the past 15 years women have entered the labor force in large numbers, reflecting changes in attitudes
toward work and home. Finally, some people despair of finding jobs
and so cease their job search; these "discouraged workers" would




43

like jobs but, because they have ceased job search, are not counted in
the labor force.
As shown in Table 1-3, the participation rate grew by 0.5 percent
per year between 1973 and 1981 as large numbers of women entered
the labor force. The projected 0.6 percent growth rate for 1984 to
1990 reflects both a projected continuation of rising female labor
force participation and the movement of the baby-boom generation
into older age groups that traditionally have a higher participation
rate.
A wide variety of important and controversial public policy issues
involve the participation rate. One is whether public policy should
encourage, discourage, or remain neutral with respect to the choice
of retirement age. Another concerns the effects of public policy on
the decisions of young people to remain in school; while longer
schooling keeps a person out of the labor force, thereby reducing the
participation rate, it also improves labor skills, raising productivity
growth.
Of special relevance to the debate over tax reform is the fact that
lower marginal tax rates can be expected to increase labor force participation, especially of married women. There is substantial evidence
that the labor force participation of these people is particularly sensitive to their after-tax wage rates.
Together, the growth of population and the growth of participation determine the growth of the labor force. Thus, row 3 in Table
1-3 is the sum of rows 1 and 2. The 1984-90 projection of 1.6 percent per year growth in the civilian labor force is slightly below the
1948-81 average of 1.8 percent and well below the 2.4 percent rate
from 1973 to 1981.
The Employment Rate

The employment rate is the percent of the labor force employed,
or 100 percent minus the unemployment rate. Numerous public
policies affect the average employment rate over time. Income maintenance programs, including the unemployment insurance system, are
known to be important. The higher the level of unemployment benefits
compared with after-tax earnings available from employment, and the
longer such benefits can be received, the lower the incentive to accept
employment. This effect is offset to some degree by business taxes on
firms to support the unemployment insurance system; these taxes are
based in part on a firm's experience in laying off workers and so
provide an incentive for firms to maintain employment stability. More
complete experience-rating in assessing taxes on firms might lower the
average unemployment rate, while maintaining the present insurance
function for those who become involuntarily unemployed.




44

Lower average employment for reasons of job search does not necessarily mean lower national output. If longer periods of job search
lead to more productive matching of employees and employers, then
the net loss in output from higher average unemployment may be
offset by greater productivity when people are employed. Public
polity might be based on the view that there is no prima fade case
that) individuals tend to make wrong decisions with regard to job
search. If this view is accepted, income maintenance programs should
not provide incentives for unduly prolonging job search.
Another public policy that affects the average unemployment rate
is the minimum wage—its level and coverage. It is not profitable for
business firms to hire people whose productivity is below their wage,
and in highly competitive markets businesses will not be able to hire
such people. In the absence of a minimum wage, some of these lowskilled people would be voluntarily employed and would have an
opportunity to enhance their job skills. The Administration's proposal
to permit a youth employment opportunity wage in the summertime
reflects these considerations.
Row 4 in Table 1-3 shows the growth in the employment rate for
various past periods together with the Administration's projection for
1984-90. The increase in unemployment between 1973 and 1981 was
sufficient to lower the employment rate by an average of 0.4 percent
(not percentage point) per year. Under the Administration's economic
projections, 1984-90 will see an increase averaging 0.3 percent per
year. Rows 3 and 4 sum to row 5, the rate of growth of the number
of people in civilian employment. The 1984-90 projection of 1.8
percent per year is slightly above the 1948-81 average of 1.7 percent
per year.
(A technical note: To study productivity, information on the hours
of work rather than just the number of people working is required.
Reasonably accurate data on total hours worked are not available for
the; entire economy, but are available for the nonfarm business
sector. Row 6 reports annual growth in nonfarm business employment as a share of total civilian employment. Row 7 reports annual
employment growth in the nonfarm business economy. The 2.4 percent per year growth rate over the 1984-90 period is higher than that
for the whole economy because the farm and government sectors are
expected to grow relatively slowly.)
Average Hours Worked

As can be seen from row 8 in Table 1-3, average hours worked
have declined at 0.4 percent over the postwar period, and the decline
is projected to continue to 1990 at a 0.2 percent rate. Average hours
can change for reasons other than the obvious ones such as longer
vacations. For example, an influx of young workers, who often hold




45

part-time jobs, will reduce average hours for all workers taken together. Policy issues that arise in this context concern such matters as
legislated premiums for overtime work and rules governing taxes on
firms for unemployment and workers' compensation funds. These
taxes, depending on their design, may encourage or discourage firms
from hiring part-time employees.
Productivity

General considerations relating to productivity have already been
discussed. Row 10 in Table 1-3 shows that the estimate of productivity change over the postwar period and the projection for 1984-90
are identical at 2.0 percent per year growth. In contrast, productivity
growth averaged only 0.7 percent per year from 1973 to 1981.
Productivity growth estimates in row 10 apply to the nonfarm business economy. Row 12 shows the rate of change of the ratio of nonfarm business output to real GNP; that ratio is projected to rise over
1984-90 as the farm and government sectors experience relatively
low growth. Row 13 shows the rate of growth of total real GNP; the
Administration's projection is for average growth of 3.9 percent per
year for 1984-90.
THE IMPORTANCE OF PRICE STABILITY TO ECONOMIC GROWTH

The contribution of price stability to economic growth is important
if behavior based on economic incentives is to direct resources reliably to their most efficient uses. In periods of general inflation, price
signals are often distorted. High inflation is also usually more variable and less predictable than low inflation, which makes it more difficult to compare the profitability of a project investigated carefully
last month with an alternative project investigated carefully this
month, and to separate transitory and inconsequential changes in individual prices from fundamental changes. Inflation also tends to bias
decisions toward short-run payoffs and consumption. Contractual
income from some long-term investments is eroded by long-continuing inflation, while other investments yield great rewards because
they happen to benefit from inflation. For all these reasons, inflation
often causes allocative inefficiencies that in the aggregate reduce economic growth.
THE OUTLOOK FOR ECONOMIC GROWTH
Prospects for a long-term revival of economic growth in the United
States are excellent. Growth in employment should continue. Productivity performance has already improved; as indicated by the 1.9 percent growth rate between the business cycle peak in the third quarter
of 1981 and the fourth quarter of 1984. This 13-quarter period encompasses both the 1981-82 recession and the 1983-84 recovery, so




46

the higher productivity growth is not simply a feature of the recovery
pnase of the business cycle. By way of comparison, over the 13-quarter
period following the cycle peak in the fourth quarter of 1973, productivity rose at an average rate of 1.4 percent per year.
Productivity performance higher than the 1984-90 projection is
clearly possible. Reasons for optimism include the acquisition of
skills by the baby-boom generation that entered the labor force in
thp 1970s, the high rate of business investment, a lower and more
stable inflation rate, and a phasing out of some inefficient government programs and regulations. But there is also ample reason to be
cautious. Federal expenditure as a share of GNP is now higher than
in the 1970s, many potential regulatory reforms have yet to be made,
and continuing progress on the budget deficit is necessary.
POLICIES FOR EMPLOYMENT AND PRICE LEVEL STABILITY
The Great Depression clearly demonstrated the paramount importance of stabilizing employment at a high level. The previous section
on economic growth contained a brief discussion of how changes in
public policy might contribute to a higher average level of employment than experienced over the past decade. The subject of this section is stability around the average level.
Macroeconomic policies to increase employment are often advocated on the grounds that they will increase long-term growth. It is certainly better, other things being equal, to reduce unemployment
sooner rather than later, but unless the long-run average rate of unemployment can be continuously lowered, or productivity growth increased, a quick reduction of unemployment will have little effect on
the long-run rate of growth. Indeed, some policies to reduce unemployment quickly may have adverse effects on long-run growth. For
example, a public employment program might reduce short-run unemployment but at the same time reduce long-run productivity
growth through the inefficiencies of such programs. Some argue that
suqh a tradeoff is worthwhile, but certainly there should be no automatic assumption that every policy to reduce unemployment will increase long-term growth.
Even if feasible, it would not necessarily be desirable to eliminate
all fluctuations in employment. Agricultural output and employment
are inherently seasonal. Some unemployment is frictional: People
quit their jobs and take time to look for better ones; firms discharge
employees, who must then search for new jobs.
Because some unemployment is voluntary and desirable, and some
unavoidable, it is difficult to assess the general significance of fluctuations in employment. Clearly, unemployment associated with reces-




47

sions leads to great distress for many. Avoiding such unemployment
by avoiding the conditions that cause recessions is a major goal of
public policy.
As with employment and output, seasonal fluctuations in prices are
normal. But the distinction between stability of the general price
level and stability of individual prices is most important. Stability of
the general price level is fully consistent with constantly changing individual prices. These fluctuations in individual prices serve to reallocate the economy's resources as market demand and supply conditions change. Direct control of individual prices is not an appropriate
strategy for stabilizing the general price level in a market economy
because of the distortions and inefficiencies caused by such controls.
The most important part of the goal of price stability is not constancy of the general price level but predictability. Many feel cheated
by unanticipated changes in the price level. Citizens who acted cautiously and conservatively by placing funds in traditionally safe investments, such as bonds and ordinary life insurance, find the real
value of their savings eroded by unanticipated inflation. Conversely,
unanticipated inflation may reward those who place their savings in
risky and speculative investments or who assume heavy long-term
debts at a fixed rate of interest.
Because unanticipated inflation upsets normal investment calculations, it tends to amplify fluctuations in output and employment and
to misallocate resources across different sectors of the economy.
Problems in the agricultural and financial sectors caused by the
1970s inflation and 1980s disinflation were discussed earlier in this
chapter. The boom and bust cycle in economic activity has almost
always been associated with instability in the general price level.
As a purely economic matter, there is little advantage to a fully
predictable rate of inflation of zero as compared with a fully predictable moderate rate of inflation, once the economy has fully adjusted.
But the converse proposition is also true; inflation of, say, 5 percent
per year has no economic advantage compared to complete price stability. Moreover, accepting some inflation has the great disadvantage
of promoting distrust of the government's commitment to maintain
control over inflation. As a political matter, an inflation target other
than zero is not entirely credible. If 5 percent inflation is acceptable,
most would say, why not 6 percent, or 8 percent, or 10 percent inflation?
This question arises not only from doubts raised by historical experience but also because there may be short-run gains from pursuing inflationary policies. The initial effects of such policies include
temporary increases in output and employment; the costly inflation
comes later. Public reaction to inflation and insistence that inflation-




48

ary policies be changed may be one of the reasons why in the United
States, and across the world, higher inflation has generally been less
stable and less predictable. To avoid these instabilities the short-run
inflationary bias must be resisted by building in a firm commitment
to noninflationary policies. Reducing inflation and in time achieving
full; price stability—zero inflation—is a major goal of this Administratiori.
MONETARY POLICY

Long-continuing inflation is fundamentally a monetary phenomenon. Other things being equal, creating more money creates a higher
general level of prices. As is the case with other economic relationships, the one between money growth and inflation is not precise.
This is responsible for the prevalence of nonmonetary theories of inflation. These nonmonetary theories have a ring of plausibility to
them, and they have often led to government policies to combat inflation that are totally ineffective, or worse, positively harmful.
Many observers attributed the rise in inflation in 1973 and again in
1979 to the two oil price shocks. That view is fundamentally incorrect, although it is certainly true that the oil price shocks did provide
further upward boosts to inflation in environments that were already
marked by substantial inflationary pressures. The pattern of rising inflation was established before both of the oil price shocks. These
shocks would have had much less impact on inflation had they occurred in an environment of market confidence in underlying price
stability.
Chart 1-2 demonstrates both the looseness of the short-run relation between money growth and inflation and the strength of the underlying long-run relation. Based on studies indicating that the average lag between money growth and inflation has been about eight
quarters, the top panel of the chart relates the inflation rate in a
given quarter to the rate of growth of money (Ml definition) eight
quarters earlier. Panel B of the chart relates the 2-year moving average rate of inflation to the 2-year moving average rate of money
grdwth eight quarters earlier. More complex specifications yield
somewhat closer relationships between money growth and inflation,
but! the basic proposition stands: quarter-by-quarter inflation is only
loojsely related to money growth, while inflation over longer intervals
is more closely related to money growth.
Inhere are good economic reasons for the rather loose short-run
relation between money and prices. Expectations can be extremely
important: the effect of a change in the money stock on demand and
supply conditions in markets, and therefore on prices, depends on
whether the money stock change is viewed as temporary and subject




49

Chart 1-2

Money Growth and Inflation
Money Growth Lagged 8 Quarters

-

Percent change (annual rate)
18

Quarter to Quarter Change

16
14

I

12

I

8

I I

10

it

Inflation

.M

M1 Money Growth

* A \f\ I

6
4
2

-2

- VT

if

nlmM
mlil
lim

f

-4
-6

'

iiiiiiiliiiliiiltiilinliiiliiilii ill iili iiliiiliiiliti|if ||||||i ii

1960

1956

I t J I !

1976

1972

1968

1964

1984

1980

Percent change (annual rate) [enlarged scale]
10
9

Change from Same Quarter
__ 2 Years Earlier

t\
t
i
i
i

8

t

M l Money
Growth

7

\

/

-

5

-

Aff

A

4
3

y' V \

Inflation , - '

y
\

/

•V

rv A

Vf'171
i

\ V *
t

—

\ "

j

K

t
I

V/v0,
/ / V v
/

A

/

6

%
\
\

A?'

-

2

-

1
0

111 111111
111 1 1 1
1 1 1 1 1 1 1 in 1 1 1 1 1 1 1 1 1 1 1 1 1 1 l l l l l l l l l l l l l i n l t i i l i t i Ilillll i 1 1 1 i 1 1 1 1 1 1 1 i 1 1 1 i 1 1 1 1
1111111
1 1 1 1 1 1 1 1 1 1 1 1 1M

1956

1960

1964

1968

1972

1976

1980

Note.-—Inflation measured by change in GNP implicit price deflator. Based on seasonally
adjusted data.
Sources:

Department of Commerce and Board of Governors of the Federal Reserve System.




50

1984

to reversal, or the beginning of a new trend. Over the longer run,
such effects are of much less relative importance as incorrect expectations are adjusted in the light of subsequent experience.
The short-run inflation rate can also be affected by numerous nonnu)netary conditions. But these conditions are ordinarily temporary
and self-reversing, or at least not repetitive and cumulative. For example, a bad harvest might raise food prices and the general price
level one year, but these effects are reversed when normal harvests
resume.
Over the long run, inflation can be affected by economic growth.
Because the economy uses money to transact the sale of goods and
serivices, for a given rate of money growth, higher real GNP growth
will yield a lower inflation rate. Historically, though, from one decade
to another average real GNP growth in the United States has rarely
varied by more than a few percentage points and can, therefore, account for only a small part of the variation in inflation.
Monetary policy is frequently judged by the behavior of interest
rates rather than by the behavior of money growth. Central banks,
including the Federal Reserve, have generally pursued monetary
policy objectives through close control over interest rates in the short
nm. The tendency for central banks to follow this approach is reinforced by the fact that interest rate information is continuously available and most directly affects the behavior of market participants.
t)ata on the money stock, on the other hand, are available with a
lag. More importantly, the aggregate money stock is relevant to individuals and firms only insofar as it has implications for economic
conditions that directly affect them. Businesses, for example, are concerned with the prices of the goods they buy and sell, the wage rates
they pay, and the interest rates they pay or receive. Although the aggregate money stock is of great relevance for variables of this kind, it
is Easily overlooked as an abstraction when compared with interest
rates, which have great visibility and immediacy.
Ifor these reasons, and others, policymakers and market participants have most often viewed monetary policy primarily in terms of
control of, or influence over, interest rates. This view may lead to
dangerous misinterpretations. Sometimes, rising interest rates reflect
a restrictive monetary policy as the monetary authority reduces the
supply of money in the short run. At other times, rising interest rates
reflect a rising demand for funds in the private market with a steady
or even increasing rate of money growth. The course of the economy
is likely to be quite different when interest rates rise temporarily because of falling money growth, compared with its course when rates
^ from growing private credit market demands.




51

Changes in inflation expectations have been particularly important
over the past 20 years. After the fact, it became obvious that rising
interest rates in the late 1960s reflected growing fears of inflation.
Lenders increasingly insisted on higher interest rates to protect
themselves from rising inflation, and borrowers were willing to pay
these higher interest rates because they anticipated repaying loans in
depreciated dollars. In 1967-68, 1972-73, and 1977-78, rising interest rates were accompanied by high money growth; monetary policy
was inflationary rather than restrictive.
When inflation expectations fall, interest rates also fall. If money
growth remains well controlled, declining interest rates reflect not an
easier monetary policy but the success of disciplined monetary policy
in reducing both actual and expected inflation. Under these conditions, if the central bank resists downward pressure on interest rates
by reducing money growth, the outcome may be a recession.
Over the past two decades, professional and public understanding
of the importance of controlling money growth, and of the dangers
of focusing on interest rates, has grown. In January 1970 the Federal
Reserve's main policymaking body, the Federal Open Market Committee, adopted a money growth target for the first time. In 1975 the
Congress passed Joint Congressional Resolution 133 requiring the
Federal Reserve to adopt and announce 1-year money growth targets. In October 1979 the Federal Reserve changed its policy procedures with the intent of controlling money growth more precisely.
Chart 1-3 shows the Ml measure of the money stock over the
period 1975-84. The announced target ranges for the four quarters
of each year are also shown. (Not shown are other announced target
ranges that in some cases modified or superseded the ranges shown
in the chart.) Because Ml has been redefined, the target growth
ranges in the chart have been adjusted to reflect the difference between Ml as now reported and as originally reported in February or
March of the following year. However, differences between actual
and targeted money growth shown in the chart are the same as the
differences reported originally.
In the late 1970s money growth exceeded the announced target for
3 years in a row. These overruns were a consequence of the Federal
Reserve's policy of maintaining a narrow short-run target range for
the federal funds rate—a key interest rate in the money markets—and
of failure to adjust the federal funds range up rapidly enough in the
face of the upward pressures on interest rates that characterized the
1977-79 period. Although targeting the federal funds rate, or interest rates in general, has been advocated as a device to cushion interest rate pressures arising from temporary disturbances in the credit
markets, the late-1970s experience, which is not unique, demon-




52

Chart 1-4

M1 Money Stock and Federal Reserve
Target Ranges
Billions of dollars * (ratio scale)

600
550

500

450

400

350

300

250 1 I I I I I I I I I I I I I 1 I I I M 1 1 I I 1 I 1 I 1 I I 1 I I I I I
1976

77

78

79

80

81

82

83

84

* Averages of daily figures, seasonally adjusted.
Note.—Targets are fourth quarter to fourth quarter wedges as described in the text.
Sources:

Federal Reserve and Council of Economic Advisers.

strates that this policy runs the risk of permitting excessive money
growth and thereby contributing to inflation.
After the business cycle peak in July 1981, interest rates were generally declining. At that time the policy of cushioning downward interest rate pressures led to a decline in money growth. At the end of
1981 the money stock was below the target range announced at the
beginning of the year.
The variability of money growth has led some observers to conclude that it is not technically possible for the Federal Reserve to
control money growth accurately. That conclusion is incorrect; adjustments in the way reserve requirement regulations are written and
in the way Federal Reserve open market operations are conducted




53

could achieve much more accurate money stock control. The real
issues are different; they concern the effects on interest rates and the
economy of adhering more closely to a money growth target. Although these matters are controversial, the position taken here is that
adhering more closely to moderate money growth targets would increase rather than decrease the stability of interest rates and employment, and contribute very substantially to restoring and then maintaining price stability.
An additional feature of Chart 1-3 deserves mention. The Federal
Reserve has defined the target growth range each year on a base
equal to the actual level of the money stock in the fourth quarter of
the previous year. For several years in a row in the late 1970s, abovetarget money growth one year was built into the next year's target. In
1981 below-target money growth was built into the target for 1982.
If the base were the midpoint of a year's fourth-quarter target range,
then differences between the actual money stock and the midpoint
would not be built into the money growth target for the next year.
"Base drift'* would not occur.
In addition to Ml, the Federal Reserve has announced targets for
broader definitions of the money stock, M2 and M3, and usually for a
bank credit or total credit measure as well. However, the evidence
suggests that of the available monetary aggregates and credit measures, Ml is the most closely and reliably related to economic activity
and inflation. The Ml target might best be regarded as primary and
the others as supplemental.
Despite the fact that short-run changes in money growth have
often inadvertently been poorly timed with respect to unpredictable
fluctuations in the economy, monetary policy has been considered by
many to be a valuable policy tool to stabilize output and employment. Activist use of monetary policy to stabilize employment, however, tended to be inflationary over the 1965-80 period. The reason
is that higher money growth for a time must be offset by lower
money growth at some other time. Otherwise, the average rate of
money growth over time will rise, as will the long-run rate of inflation. Central banks, including the Federal Reserve, have usually
found it much easier to increase the rate of money growth than to
achieve the offsetting decrease at some later time.
The discussion so far has concentrated on the relation of money
growth to inflation. Fluctuations in money growth are also related to
fluctuations in employment and output, although the reasons for this
relation are less well understood.
It appears that changes in money growth, rather than the rate of
growth itself, are correlated with the business cycle. Since 1907—the
first year for which monthly money stock data are available—there




54

has never been a recession when money growth was rising. Historically, money growth has usually declined before the beginning of a
recession, and the lower rate of money growth has most often extended into the recession. Less often, money growth has declined
about the time a recession begins, and the lower growth has extended into the recession. Money growth has typically stabilized, or
risen, before a recession has ended and a recovery begun. Chart 1-4,
showing money growth from the same quarter a year earlier and
shaded areas to indicate recessions, illustrates these relationships.
Chart 1-3

Money Growth and the Business Cycle
Percent change

12

10

h ill mh iihi 1 it il i ii
1
1956

58

60

62

64

66

68

70

72

74

76

78

80

Note.—Shaded areas indicate recessions (peak to trough) as defined by the National Bureau of
Economic Research.
Source: Board of Governors of the Federal Reserve System (except as noted).




55

82

Fluctuations in money growth have been related in part to the emphasis on interest rates in the conduct of monetary policy. When the
economy is unexpectedly weak, and before economists' forecasts
adjust to a changing business outlook, credit demands and interest
rates tend to decline. If the monetary authority cushions the decline,
then money growth falls. Under these circumstances, the decline in
money growth is not appropriate; money growth should be maintained and interest rates permitted to fall more rapidly to provide
support for a weakening economy. Similarly, if interest rates are held
down in the face of unexpected strength in the economy, money
growth may rise, contributing to the development of inflation. Steady
money growth tends to act as an automatic stabilizer: interest rates
rise automatically when the economy strengthens and fall when the
economy weakens.
Once it has become clear that inflationary or recessionary pressures are developing, the monetary authority usually adjusts interest
rates fairly aggressively, and money growth changes. But because of
the lag in the effects of policy, a changed rate of money growth does
not act quickly to slow inflation or to resist developing unemployment.
The importance of avoiding outbreaks of inflation in order to
avoid subsequent recession is well illustrated by events since 1965.
Rising rates of money growth in 1967-68, 1972-73, and 1977-78
were followed in each case by lower rates of money growth and recessions. If periods of lower money growth had not followed the periods of higher money growth, then the average rate of money growth
and the average rate of inflation would have been higher than they
actually were.
It has been emphasized that the relationships between money
growth and inflation and between changes in money growth and the
business cycle are not precise. To the extent that changes in these
relationships can be reliably forecast, there may be reason to depart
from previously announced money growth targets. From the evidence
now available, the sharply higher money growth from mid-1982 to
mid-1983 is a prime example of a case in which money growth far in
excess of the target range did not re-ignite inflation. The case for
monetary targeting, however, is not overthrown by this one episode
in which abandoning targets worked well, especially given that Ml
growth was below target as the recession developed in 1981. There is
no reason to believe that the regularities exhibited in the charts in
this section, regularities that also characterize U.S. experience before
World War II and the experience of other countries, have broken
down.




56

The fact that monetary regularities are not precise makes clear that
there are unavoidable risks. What the record suggests is that more
stable money growth will manage the risks better and reduce the
chance that monetary policy will itself be a source of disturbance to
the economy.
Tne present task is to complete the agenda of restoring full price
stability. The Nation has just gone through a difficult period of adjustment to lower inflation—indeed, the adjustment is still incomplete. It is important that gains achieved in reducing inflation not be
lost. Success will require permitting enough money growth to allow
vigorous economic expansion, while at the same time maintaining
downward pressure on the inflation rate to build confidence in the
achievement of long-run price stability. To achieve these goals, the
Administration supports a policy of gradually reducing the average
rate of money growth over time and of stabilizing short-run money
growth to the maximum extent possible.
FISCAL POLICY

OVer the postwar period, until relatively recently, most economists
were optimistic that fiscal policy, through a combination of automatic
stabilizers and discretionary adjustments, could be used to dampen
business cycle fluctuations. The automatic stabilizers have worked
reasonably well to reduce the variability of disposable personal
income, but discretionary policy adjustments have often been ill
timed.
WJien the economy weakens, tax receipts fall and certain expenditures, such as those for unemployment benefits, rise. These automatic stabilizers do not require congressional action. Moreover, they do
not vipset private planning because their characteristics are known to
private decisionmakers in advance.
Tne Bureau of Economic Analysis (BEA) has provided estimates of
the cyclically adjusted Federal budget deficit on a national income
and product accounts basis. Although any such estimates are subject
to certain conceptual and estimation difficulties, BEA estimates provide a rough sense of the quantitative importance of the automatic
stabilizers. For example, from the cycle peak in the third quarter of
1981 to the cycle trough in the fourth quarter of 1982, the total
budget deficit rose by $147.5 billion; BEA estimates that $65.8 billion of the increase was attributable to the automatic stabilizers.
Beyond issues of forecast accuracy and policy lags, there is increasing doubt about the effectiveness of discretionary fiscal policy even if
it could be changed in a timely fashion. Fiscal policy does not appear
to have the large impacts on aggregate economic activity through
demand side effects that were once thought to exist. Because con-




57

sumption behavior depends on households' average income, changes
in individual income taxes for countercyclical purposes seem to have
especially small effects. If taxpayers expect income tax changes to be
temporary—and changes for countercyclical stabilization should be
interpreted in a temporary context because recessions and booms are
not permanent—then the tax changes are likely to have relatively
little effect on consumption behavior.
Temporary changes in transfer payments seem to have little value
for stabilization purposes, for the same reason that temporary tax
changes have little value. The evidence suggests, however, that temporary changes in government purchases of goods and services may
have somewhat greater, though still relatively small, effects on total
GNP in the short run.
A problem with increasing government purchases for countercyclical purposes is that such increases run directly counter to the longrun goal of constraining government expenditure to reduce waste
and promote growth. It often proves difficult to reverse spending increases—even those adopted initially as temporary. Proposals to increase expenditure for any purpose—including countercyclical stabilization—should be examined very carefully, for reasons discussed in
Chapter 2 of this Report,
Finally, activist fiscal policy—whether on the spending or the tax
side—can be upsetting to private decisionmaking. Changes in jobs,
place of residence, and business investment in plant and equipment
are based on long-term expectations and plans; frequent changes in
government tax and spending policy make efficient decisions more
difficult. Fiscal policy adjustments are often unpredictable, and this
uncertainty complicates both business and consumer planning.
Indeed, because business cycle fluctuations themselves have proven
so difficult to forecast, government responses to business fluctuations
are necessarily difficult to forecast. To avoid these problems, the purpose of fiscal policy changes should be long-run reform to improve
efficiency and equity while establishing a stable and predictable fiscal
framework.
THE OUTLOOK FOR 1985-90
Americans have every reason to look forward to continuing economic expansion. The base has been established: Inflation is down,
interest rates are down, employment and output growth has been
strong, productivity growth is up, and domestic business investment
is strong. The major item of unfinished business is the establishment
of long-run fiscal equilibrium, which requires a much lower budget
deficit and assurance that the government expenditure share of GNP




58

does not continue to increase. Economic expansion will not be perfectly steady, as the past few quarters have illustrated once again, but
the prospects for continuing growth are excellent.
Some observers, however, are already discussing the prospect for a
new | recession beginning in late 1985 or 1986. Policy mistakes can
yield such a result, but there is no reason why such mistakes need
occur. Activist policy, always subject to misreading of the data and
forecast errors, is not required to avoid recession. What is required
are Sustainable, predictable, and noninflationary monetary and fiscal
policies. If policy is not itself a source of disturbance, there is no
reason to believe that a recession, when one finally occurs, need be
anything other than a mild and temporary interruption of sustained
economic expansion.
Many of those who predict another recession starting this year or
next seem to do so from the view that a business expansion has a
natural life, after which the economy will inevitably turn down. This
view is probably wrong. If business expansions die of old age, the
probability that a recession will begin rises as the expansion ages. In
fact, the evidence suggests that the probability of the onset of a recession is only weakly related to the age of the expansion.
The economic process that has led to the termination of most expansions seems quite different from old age. Recessions, and especially the more recent recessions, have been associated with prior
outbreaks of inflation. Imbalances arise during periods of rising inflation that make continuing expansion difficult or impossible. Public
policy responses to rising inflation add downward pressure on output
and employment. The business cycle peaks in December 1969, November 1973, January 1980, and July 1981 are all quite clearly related tq prior outbreaks of inflation and subsequent declines in the rate
of money growth.
MONETARY AND FISCAL POLICY ASSUMPTIONS

In July 1984, in its Midyear Report to Congress, the Federal Reserve announced a tentative Ml growth target range for 1985 of 4 to
7 percent. The Federal Reserve also announced tentative targets for
M2 and M3, and an "associated range" for the growth of nonfinancial debt.
By reducing the upper side of the Ml range from 8 percent for
1984 to 7 percent for 1985, the Federal Reserve makes clear its intention to avoid excessive money growth. Bringing down the rate of
money growth over time is essential to restoring full price stability.
Also, the reduction in the width of the target range from 4 percentage joints in 1984 to 3 percentage points in 1985 gives the market a
clearer definition of monetary policy objectives.




59

An issue is the base upon which the 1985 Ml growth target is to
be calculated. Historically, the money growth targets for a given year
have been calculated from a base equal to the average level of the
money stock in the fourth quarter of the previous year. This practice
has permitted base drift, as discussed in connection with Chart 1-3,
and also leads to revisions in the target path with every revision of
the Ml data for the fourth quarter of the year. Of course, the target
growth ranges could be adjusted to offset base drift and data revisions, but the problem with such an approach is that the announced
ranges might vary from one year to the next in a way that would confuse the public. The money growth target is a statement of policy
that should not be blurred by the vagaries of short-run money
growth.
A second issue raised by the Federal Reserve's traditional method
of defining the base for the money growth targets is that on occasion, as in early 1982, the money stock has started off a new year
substantially above or below the announced target range, raising uncertainties in the financial markets as to whether and how quickly the
Federal Reserve might bring Ml back into its range. Both of these
issues could be resolved satisfactorily by defining the fourth quarter
base as the midpoint of that year's target range rather than as the
actual fourth quarter level of the money stock. The Federal Reserve's
tentative 1985 target range of 4 to 7 percent growth of Ml could
then be restated as a band around a central target of 5*/2 percent
growth—a rate halfway between 4 and 7 percent growth. Under this
interpretation, the target for 1985 would be to keep Ml within the
dashed band shown in Chart 1-5 instead of within the wedge defined
by the solid lines in the chart.
Growth of Ml within the dashed band of Chart 1-5 is expected to
be consistent with the Administration's economic assumptions. In the
postwar period the income velocity of Ml—the ratio of nominal GNP
to Ml—has historically increased at an average rate of about 3 percent per year, although with substantial variability around that average. Abstracting from the variability by averaging over 2 years, the
Administration expects nominal GNP growth to average about 8.9
percent per year over 1984 and 1985. If Ml in the fourth quarter of
1985 is at the center of the dashed band in Chart 1-5, then Ml
growth will average 5% percent over 1984 and 1985, yielding annual
velocity growth slightly above 3 percent. Beyond 1985 the Administration's economic assumptions are based on the view that monetary
policy should maintain steady money growth at a rate that declines
gradually over time.
As emphasized earlier in this chapter and in Chapter 2, the fiscal
policy goals for 1985 are to establish a sound fiscal framework for




60

Chart 1-5

Alternative M1 Target Ranges for 1985
Billions of dollars *

600
Alternative
1985 Target
Band
(CEA)

580

Tentative
1985
Range
(FR)

560

540
1984 Range (FR)

520

0 I I 1 I i I I I I I I I I I I I I I I I I i I I I I I \
1983

1985

1984

• Averages of daily figures; seasonally adjusted.
Sources: Federal Reserve (FR) and Council of Economic Advisers (CEA).

the long run by reducing the growth of Federal expenditure and the
level of the budget deficit, and by reforming the tax system to foster
long-run economic growth.
The Administration's budget proposals provide for a phased reduction of expenditure from the current services baseline. The proposed reduction in the growth of Federal purchases of goods and
services is spread over 3 years, starting in fiscal 1986, providing considerable time for the private sector to adjust. Moreover, total Federal purchases will continue to grow, albeit at a slower rate than the
baseline current services projection.
Finally, two points deserve mention. First, private sector activity
depends importantly on expectations concerning economic policy.
Clearly, the sooner fiscal policy changes are enacted, the smaller will
be any effect on economic activity from uncertainty over the actions




61

to be taken. Second, changes in fiscal policy might have significant
immediate effects on interest rates; cushioning those effects through
monetary policy actions might be counterproductive. Rates may fall
due to the resolution of the fiscal uncertainties and the expectation
of lower inflation. A monetary policy directed toward stable money
growth will ensure that interest rates can adjust readily to changed
market conditions.
THE OUTLOOK FOR 1985

The Full Employment and Balanced Growth Act of 1978 requires
that the Economic Report of the President, together with the Annual Report
of the Council of Economic Advisers, include an Investment Policy Report
and review of progress in achieving the national economic goals
specified in the Act.
Investment issues are discussed in a wide range of contexts in this
Annual Report The role of high investment in the 1983-84 recovery is
discussed earlier in this chapter, as are the economic conditions that
contributed to strong investment and the relation of investment to
productivity growth. Chapter 2 contains a discussion of the relationship between proposals for revising the tax laws and investment
issues. International aspects of U.S. investment are examined in
Chapter 3; these include the capital inflow from abroad and its
impact on U.S. capital formation. Chapter 6 contains an analysis of
how corporate takeovers, mergers, and acquisitions can promote allocation of capital to more productive uses.
The Administration's economic assumptions included in Tables
1-4 and 1-5 show substantial progress toward achieving the goals
specified in the Act. Table 1-4 reports the major features of the Administration's 1985 economic assumptions. The expected 4 percent
rise in real GNP over the four quarters of the year is slightly higher
than the 3.7 percent in the third year of the typical recovery. Labor
productivity showed little growth over the second half of 1984 but is
expected to grow by 1.7 percent over the four quarters of 1985. Employment growth of 2.3 million persons is projected for 1985, compared with 3.5 million in 1984, leading to a decline in the unemployment rate over 1985.
The inflation outlook for 1985 is good. With moderate expansion
in the money aggregates and continuing real growth, the inflation
rate, as measured by the GNP deflator, is expected to average 4.3
percent over the four quarters of 1985. Hourly compensation is projected to grow at about 5 percent. Unit labor costs are expected to
increase by about 3.5 percent. Business profits should show moderate growth over the year.




62

TABLE 1-4.—Economic outlook for 1985
1985

Item

forecast

Percent change (fourth quarter to fourth quarter):
Real gross national product

5.6

4.0

4.2
16.6
3.5
14.2
3.5

4.3
6.8
1.7
2.2
2.7

GNP implicit price deflator

3.5

4.3

Compensation per hour 2

4.2

5.0

Output per hour 2

2.2

1.7

Unemployment rate (percent) 4

7.1

6.9

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

1.6

1.7

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

Level ii^ fourth quarter: 3

1
2
3
4

Preliminary.
Nohfarm business, all persons.
Seasonally adjusted.
Unemployed as percent of labor force including resident Armed Forces.
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.

Supported by continuing growth in real disposable income, personal consumption expenditures are expected to increase 4.3 percent
this year compared with 4.2 percent in 1984. Residential construction
activity is expected to be fairly strong with housing starts of about
1.7 million units. Business fixed investment is expected to continue
to grow faster than GNP. As a result, real investment as a share of
GNP should continue at record levels next year.
Projected growth in real Federal purchases over the four quarters
of 1985 is low due to assumed cuts in purchases in the fourth quarter
of 1985 (the first quarter of fiscal 1986). State and local purchases
are expected to grow at a slower rate in 1985 than in 1984 in order
to maintain a balance with revenues. Real net exports of goods and
services are expected to increase in 1985; however, the trade balance
is projected to remain in deficit.
THE OUTLOOK FOR 1986-90

Table 1-5 reports the Administration's economic assumptions for
selected economic indicators for 1986-90. These economic assumptioni reflect projected trends and should not be interpreted as yearto-year forecasts. Table 1-3, discussed earlier in the section on economic growth reports the Administration's projection of the supply
side of the economy in a consistent growth accounting framework.
Tlie three sections of this chapter have discussed economic performance, principles, and prospects. Principles are the most important. Without them, the reasons the U.S. economy has performed as




63

TABLE 1-5.—Administration economic assumptions, 1985-90

[Calendar years]
Item

1986

1985

1988

1987

1989

1990

Level
Employment (millions) «

109.1

111.3

113.5

115.8

117.7

119.4

7.0

6.9

6.6

6.3

6.1

5.8

Unemployment rate (percent) *

Percent change
Consumer prices

s

Real GNP
Real compensation per hour*
Output per hour 4

4.1

4.3

4.2

3.9

3.6

3.3

3.7

4.0

4.0

4.0

3.9

3.6

.3

1.3

1.8

2.7

2.9

3.1

1.5

1.6

1.7

1.8

2.2

2.4

1
1
3

Employment series includes resident Armed Forces.
Unemployed as percent of labor force. See footnote 1.
For urban wage earners and clerical workers
4
Nonfarm business, all persons.
Source: Council of Economic Advisers.

it has cannot be understood. Without policy principles, the prospects
for the future are uncertain because sustained public support for
good economic policy depends on public understanding. The performance of the U.S. economy over the past 2 years suggests that the
Administration's policies are beginning to pay off. A continuing commitment to these policies can produce strong and sustained economic growth.




64

CHAPTER 2

The Federal Budget and the Economy
CONTINUED GROWTH OF THE FEDERAL GOVERNMENT
may be the most serious problem facing the American economy. The
growth of Federal spending and the debt are the most visible manifestations of this problem. The first is a longstanding condition; Federal expenditure has generally increased relative to gross national
product (GNP) for more than 50 years. The second condition is more
recqnt; after declining for most of the postwar period, the outstanding Federal debt as a share of GNP has increased sharply in the past
5 years. These conditions are closely related. Reducing the growth of
Federal spending would reduce both the spending and debt shares.
Increasing taxes would not reduce the spending share and would
reduce the debt share only if spending were also restrained relative
to the tax increase.
Table 2-1 summarizes the long-term trends in the relationship of
Federal expenditure, receipts, and borrowing to GNP. The Federal expenditure share of GNP has increased each decade since 1929 and,
unless the near-term growth is reduced substantially, the expenditure
share will also increase in this decade. Almost all the growth in the
expenditure share since 1949 reflects the increase in Federal spending for nondefense programs. The receipts share increased rapidly
through 1959 and has been roughly constant, except for cyclical variations, since that time. Federal borrowing as a share of GNP varied
within a narrow range, except during World War II and recessions,
until the past several years. The ratio of the outstanding debt to GNP
increased sharply during the Great Depression and World War II,
declined substantially through the 1970s, and has since increased
sharply.
This chapter describes the primary relationships between the Federal budget and the U.S. economy. These relationships operate in
both directions. Changes in economic conditions affect the budget
for a given set of fiscal policies and they affect the policies selected.
Changes in the budget also affect the economy, in ways that depend
critically on the type of expenditure and the detailed characteristics
of the tax code. For any meaningful evaluation of the effects of the
Federal budget on the economy, fiscal policy should be defined in




65

terms of the levels of government services, the eligibility conditions
and payment rates for transfer programs, and the statutory tax rates
on private activity. The first section of this chapter addresses the effects of Federal expenditure and the deficit. The second addresses
the effects of the major types of Federal taxes. The concluding section discusses several proposals for change in budget concepts, the
budget process, and the fiscal authority.
TABLE 2-1.—Federal expenditures, receipts, and borrowing as a share of GNP, selected years,

1929-84
[Percent of GNP]
Borrowing

Expenditures
Calendar year

Total
1929

2.5

1939

9.8

Defense

1

<8>
1.4

Receipts
Deficit

Other
(9)

3.7
7.4

8.5

-1.2
2.4

Debt*
16.1
42.8

1949

16.0

1959

18.6

9.3

1969

20.0

8.1

11.9

20.9

1979

21.1

4.6

16.5

20.4

.7

21.6

1984*

24.0

6.0

18.0

19.2

4.8

30.2

5.1

10.9
9.3

15.0

1.0

75,5

18.4

.2

42.8

-.9

23.9

1

Purchases of goods and services.
* Federal debt held by private investors, end of June.
Not available.
Preliminary estimates.
Note—Expenditures, receipts, and the deficit are on a national income and product accounts basis.
Sources: Department of Commerce (Bureau of Economic Analysis) and Department of the Treasury.
a
4

MAJOR CURRENT FISCAL ISSUES
The Federal Government, like all other institutions, faces two longrun constraints: Expenditure and the outstanding debt cannot grow
indefinitely relative to potential receipts. The Federal Government
differs from other institutions in two major ways. First, because of its
size it has a major impact on private incentives and, therefore, the
level and allocation of economic activity. Second, the Federal Government has a monopoly on the right to inflate its nominal receipts
by creating money.
Federal expenditure must be financed by tax receipts. The substitution of borrowing for current tax receipts only defers the inevitable—additional taxation. An increase in the expenditure share, moreover, should face an increasingly stringent test, because the cost of
additional Federal expenditure increases rapidly with the level and
variance of marginal tax rates.
An increase in the debt share may be justified if Federal expenditure is temporarily high or receipts are temporarily low, in order to
reduce the variation of tax rates over time. If Federal expenditure ex-




66

eluding interest payments grows proportionately with GNP, however,
an increase in the debt share also requires an increase in future average^ tax rates to finance the increased future interest payments. An
increase in the debt share, thus, must be financed by some combination of reducing the growth of noninterest expenditures below the
growth of GNP, by higher future tax rates, or by inflation. Federal
borrowing, in summary, is ultimately limited by the same conditions
that limit Federal expenditure.
The current deficit is a crude measure of the present value of the
amount by which future noninterest expenditures must be reduced or
future tax receipts increased. The correct measure is the increase in
the real market value of the net debt held by private investors. This
requires adjusting the reported deficit for the differences between
par and market value of the publicly held Federal debt, the loan portfolio, and other Federal financial assets. For many years, these adjustments substantially offset reported deficits, which is one reason why
the reported deficit has provided little useful information about
either Federal fiscal conditions or its effects on the economy. In
recent years, however, these adjustments still leave a substantial increase in the real net debt.
In the absence of a change in fiscal policy, the prospective Federal
deficits, however measured, are clearly too large. This conclusion is
based less on the short-run effects of the deficit on the economy than
on the effects of the deficit on the Federal budget. Many expected
short-run effects of large Federal deficits on the economy have not
occurred. Deficits were expected to increase inflation; in fact, inflation has been reduced by about two-thirds since 1980. Deficits were
expected to increase interest rates; in fact, short-term interest rates
are now less than one-half their peak levels in 1981. Deficits were expected to lead to weak investment and a weak recovery; in fact both real
business investment and real GNP growth in the current recovery
have been stronger than in any prior peacetime recovery. These developments do not indicate that the deficit had no effect, only that
other conditions dominated. One important economic effect of fiscal
policy in this period appears to have been the large increase in the
trade deficit, but the magnitude of this effect was not widely anticipated. Given the longstanding concern about the Federal deficit, the
short-run effects of the deficit on the economy have been surprisingly difficult to estimate.
Whatever the effects on the economy, the effects of the deficit on
the Federal budget are clear: Federal borrowing increases future interest payments that must be financed by either reducing future noninterest expenditures or increasing taxes. The first priority of nearterm fiscal policy should be to stabilize the ratio of outstanding Fed-




67

eral debt to GNP; the alternative is either a progressive reduction
in the noninterest expenditure share of GNP or a progressive increase in tax rates. Only when this ratio is stabilized will the country
have the luxury of addressing whether a further reduction in Federal
borrowing would be desirable to increase net saving and investment.
This goal can be accomplished by either reduced growth of expenditure or by increased tax receipts. Reducing the growth of total
Federal expenditure may require a substantial reduction in expenditure for some programs and the termination of others. Economic
analysis does not provide a sufficient basis to make this choice. The
decision to reduce expenditure or increase taxes is fundamentally a
political choice. If the American people prefer that Federal expenditure be restrained to about 20 percent of GNP, no increase in taxes
is necessary; if they prefer the current share of about 24 percent, a
substantial increase in tax receipts is necessary at some time.
If constraining the growth of Federal expenditure is important, reducing Federal borrowing is urgent. The President has articulated a
clear strategy to meet both of these objectives:
1. Maintain economic growth with declining inflation.
2. Reduce the growth of noninterest expenditure, to a rate below the
growth of the economy, until a level is reached that is broadly
supported by the American people.
3. Broaden the tax base to permit a further reduction in tax rates.
4. Only as a last resort, increase tax revenues if necessary to finance
the level of government that is broadly supported.
This year will provide the critical test of whether the Congress prefers to restrain spending or increase taxes. The next election will
provide the first test of whether that choice is supported by the
American people.
EFFECTS OF THE ECONOMY ON THE FEDERAL BUDGET

The economy influences the Federal budget through two processes. Changes in real income, inflation, and interest rates affect both
Federal spending and receipts without any change in current fiscal
policy. Estimates of these effects are prepared as part of the budget
process, and the current estimates are summarized below. Changes in
economic conditions also affect the demand for Federal spending.
For example, an increase in real income reduces government outlays,
increases receipts, and reduces the deficit by the sum of these two
effects. An increase in real income, however, may also increase the
demand for new or current Federal services and transfers, so the net
effect of higher real income may lead to higher Federal expenditure.
Economic cycles also affect the budget. Over the postwar period,
business cycles have induced changes in expenditures and receipts




68

that typically have a reinforcing effect on the change in the budget
deficit. For example, the cyclical effect of the downturn that began in
the third quarter of 1981 is estimated to have increased expenditures
by about $12 billion at an annual rate and reduced receipts by about
$54 billion at the trough in the fourth quarter of 1982. As a result of
these estimated cyclical effects on expenditures and receipts, the deficit was increased by about $66 billion at an annual rate in the trough
quarter. Of course, cyclical effects that increase deficits during contractions in economic activity can be expected to reduce deficits in
the ensuing economic expansion.
Tajble 2-2 shows the estimated effects on outlays, receipts, and the
deficit from changes in real GNP growth, inflation, the unemployment rate, and interest rates, assuming each change occurs beginning
January 1986. The table shows the independent effect on the budget
from a change in each variable; of course, a change in one would
normally be associated with changes in the others.
TABLE 2-2.—Sensitivity of the budget to changes in economic conditions,fiscal1986 and 1987
[Billions of dollars]
Fiscal year
Item
1 percentage point reduction in real GNP growth:
Change in outlays....
Change in receipts...
Change in deficit
1 percentage point reduction in inflation:
Change in o u t l a y s . . .
Change in receipts
Change in deficit....

. .

.

1 percentage point higher unemployment rate:
Change in outlays...
Change in receipts..
Change in deficit
1 percentage point increase in interest rates:
Change in outlays...
Change in receipts..
Change in deficit
1
Change assumed to begin in January 1986.
Source: Office of Management and Budget and Council of Economic Advisers.

Clearly, changes in real growth and inflation can have large effects
on outlays, receipts, and the deficit without any change in policy.
Policy can, however, affect the sensitivity of the budget to economic
conditions. For example, the indexation of individual income tax
brackets reduces the sensitivity of receipts to changes in the inflation
rate. A greater proportion of outlays are also now indexed. As a
result, the budget deficit is now much less sensitive to a change in
the inflation rate.




69

x

Economic conditions also affect the choice of fiscal policies, and
these effects may augment or offset the effect of these conditions on
the budget, given current policies. A recent study of the major determinants of the Federal expenditure share of GNP in the years since
World War II provides a basis for estimating these combined effects.
Almost all the variation in the expenditure share during this period
can be attributed to three conditions—the level of real GNP per
capita, the unemployment rate, and the number of armed forces
overseas. These conditions, of course, also reflect the effects of many
other conditions with which they are related. Still other conditions
affect the composition of Federal expenditure. The complex interaction of policy decisions and economic conditions that leads to total
Federal expenditure, however, can be summarized by this simple relationship.
The major conclusion of this study is that, after controlling for cyclical conditions and the deployment of armed forces, the demand
for Federal expenditures, as revealed by the political processes, has increased faster than the increase in GNP. This effect would lead to a
continued increase in the Federal expenditure share of GNP unless
there is a reduced popular demand for Federal services and transfers,
a change in the political processes, or a constitutional restraint on
Federal expenditure. It is not clear how much this relation reflects
popular preferences or a bias in political processes. In any case, these
preferences and processes are not inexorable.
Another recent study has estimated the major determinants of the
tax receipt share of GNP. The major conclusion of this study is that
the historical increase in the share is best explained by an independent increase in the amount of taxable activities, the most important
of which are reflected by the increase in female labor force participation and the decline in the relative number of the self-employed. In
the short run, the tax receipt share of GNP appears to be determined
more by the supply of taxable activity than by the demand for governmental expenditure.
These studies suggest that the government expenditure and tax receipt share of GNP in the short run are determined by fundamentally
different conditions; the deficit share is determined by the differences
in these conditions. Over time, the present value of government expenditure is limited to the present value of tax receipts, but it is less
clear what limits the level of the deficit in the short run.
EFFECTS OF THE FEDERAL BUDGET ON THE ECONOMY

For several decades, the Federal budget has been evaluated on the
basis of its effects on total demand, the allocation of resources, and
the distribution of benefits and taxes among income classes. Differ-




70

ent (criteria were usually applied to evaluate each effect. For several
reasons, this approach is probably not as valuable as was once believed.
Changes in Federal expenditure, tax receipts, and the deficit
appear to have little effect on total demand, as measured by nominal
GNP, except in times of war. The primary effects of the Federal
budget on the economy appear to operate through the "supply side"
of the economy by affecting incentives to work, save, and invest, although this conclusion is controversial.
A distinction between the allocative and distributive effects of the
Federal budget continues to be valuable, but it is not clear that these
effects should be evaluated by different criteria. A good case can be
made that changes in Federal services and transfer payments should
be judged by the same standard, that is, whether the sum of the
valu£ to the direct beneficiaries plus the value to other taxpayers is
higher or lower than the additional cost to the economy. Any other
critenon for evaluating distributive effects seems inherently arbitrary.
The effects of the Federal budget on the economy operate through
specific Federal expenditure programs and the detailed provisions of
the tax code. These elements of fiscal policy affect the behavior of
households, businesses, other private institutions, and State and local
governments in varied ways. For this reason, changes in the budget
totals provide little useful information about the effects of the budget
on the economy.
Changing one component of the budget, in turn, has quite different effects depending on how other components are changed. An increase in government purchases, for example, must be offset by an
equal reduction in other expenditures, an increase in tax receipts, or
an increase in the deficit; the net effect on the economy depends on
how much each of these other components is changed. An evaluation
of the effects of changes in one part of the budget, thus, must specify
the amounts by which other parts of the budget are also changed.
Cost of Government Spending

Government purchases of goods and services and transfers cost the
economy a good bit more than the direct increase in the budget. The
cost of additional government activities is the sum of the increase in
expenditure, the additional cost of tax compliance, and the additional
cost from the misallocation of private activities that accompanies the
expenditure and the taxes needed to pay for it.
One study estimates that the average private compliance cost of
Federal and State personal income taxes is 5 to 7 percent of the revenue they raise. Total compliance costs also include government enforcement and the private compliance cost of other types of taxes.
The additional compliance cost attributable to an increase in tax




71

receipts is likely to be lower than the average cost but is probably still
substantial.
A change in government expenditure and tax rates also leads to a
change in the allocation of private activity. For example, an increase
in unemployment compensation appears to increase the unemployment rate, and an increase in social security benefits may lead to earlier retirement. Similarly, an increase in personal income tax rates appears to reduce employment, and an increase in the effective tax rate
on the income from investment reduces new investment. The economic literature uses the term "marginal excess burden" to describe
the additional costs of misallocation of resources per additional
dollar of expenditure and tax receipts. This burden differs by the
type of expenditure and tax and increases sharply as a function of
marginal tax rates. Several recent studies provide similar estimates of
the magnitude of this marginal excess burden as a function of the effective marginal tax rate and the responsiveness of the labor supply to
after-tax wage rates.
Table 2-3 summarizes estimates of the allocative costs of different
types of government expenditure. Most recent studies of labor supply
are more consistent with a moderate response of the labor supply to
after-tax wages. These estimates are based on the range of the combined Federal, State, and local marginal tax rates during the past
decade. The implications of these estimates are:
• The cost of additional government services is probably around
1.43 times the additional budget cost, plus the additional cost of
tax compliance.
• The cost of additional government transfer payments is probably
around 1.57 times the additional budget cost, plus the additional cost of tax compliance. Transfer payments are more "expensive" than services because they reduce labor supply and saving.
• These estimates increase sharply with the responsiveness of the
labor supply to after-tax wage rates and with the effective marginal
tax rate.
The primary policy implication is that government services and
transfer payments are desirable only if their value is substantially
higher than their budget cost. Government activities that fail this test
should be eliminated or scaled back.
What limits the relative size of government? As the above estimates
indicate, the cost of government expenditure increases as the responsiveness of labor to its after-tax return increases. This suggests that the
size of government may be constrained by the extent to which taxable activity is a function of tax rates; for example, income earners
may change location to reduce their tax burden. A centralization of government finance, for example, such as from local govern-




72

TABLE 2-3.—Albcative cost of government expenditure
[Allocative cost per dollar]
Responsiveness of tabor supply
item

Moderate

Goods and services
Marginal tax rate
43 percent

$0.07

$0.43

.09

.53

43 percent

.21

.57

46 percent

.24

.72

46 percent

,

Transfer payments
Marginal tax rate

Source: Charles Stuart, American Economic Review, iune 1984.

ments to the State or from States to the Federal Government, diminishes the opportunity to avoid taxation by moving, and therefore
is likely to increase the combined size of the government sector.
The cost of government expenditure is also a function of the marginal tax rate. The relative size of government, in turn, may be a
function of this cost. This suggests that a broad-base, low-rate tax
system is more likely to lead to an increase in the size of government
than would a narrower base, higher rate tax system. During the past
20 years, much of the growth in government spending has been financed by the value-added tax in Europe and by the social security
tax in the United States—both of which are broad-based taxes. This
illustrates an important dilemma in public finance. Lower tax rates
would reduce the allocative costs of the tax system for a given level
of government expenditure, but they may also lead to an increase in
the size of government. If the size of government is already too large
as a result of biases in the political process, then a tax reform that
lowers tax rates should probably be accompanied by constitutional
restraint on government expenditure.
Effects on Consumption and Investment

Government expenditure and receipts also affect the level and distribution of private expenditure. There is substantial agreement
among the recent studies concerning the effects of government purchases of goods and services and of transfer payments. For a given
level of government expenditure, there is considerable disagreement
about the relative effects of tax receipts and borrowing.
For a given level of total output, government expenditure for
goo<ls and services must "crowd out" an equal amount of private expenditure. The amount by which an increase in government expenditure reduces a specific component of private expenditure depends




73

on the degree of substitution between government services and that
component. Transfer payments change the composition of private expenditure if the combined effect of transfers and taxes redistributes
income among groups with different propensities to consume and
save.
For a given level of total government expenditure, the effects of
changing current tax receipts and the deficit by offsetting amounts
are much less clear. A reduction in current tax receipts must be
offset by an increase in future tax receipts, and the deficit is a crude
measure of the present value of these future tax receipts. For several
decades, conventional economic theory has assumed that people
overlook the future tax receipts necessary to finance the debt service
on current deficits; in this case, a reduction in current taxes and an
offsetting increase in the deficit would increase consumption expenditure and reduce investment. Renewed attention is now being given
to an older economic theory that assumes that people recognize the
existence of the future liability and save for the future tax payments
necessary to finance current deficits; in this case, different combinations of current tax receipts and deficits would have little effect on
the level of current consumption and investment. For example, an individual taxpayer facing a reduction in taxes in one year and a certain
increase in taxes the next year is most likely to save the current tax
reduction to pay for the future liability. It is much less clear how a
group of taxpayers would react to a current tax reduction if the
timing and distribution of future tax increases, some of which might
be borne by the next generation, were uncertain.
Several recent empirical studies of consumption and investment reflect the range of estimates of these effects. One study of the determinants of personal consumption expenditure found that government purchases of goods and services appear to reduce personal consumption expenditure by about 25 cents per dollar of additional government purchases. Transfer payments, however, appear to increase
personal consumption expenditure by a substantial amount, implying
a redistribution from households with a high propensity to save to
those with a high propensity to consume. A reduction in tax receipts
and a corresponding increase in real government debt appears to
reduce personal consumption expenditure by a small amount; this
result is consistent with the hypothesis that the future tax receipts
necessary to finance current government borrowing are fully anticipated. The results of this study suggest that government expenditure, not government borrowing, is the primary fiscal effect leading
to a "crowding out" of private investment. These results, however,
are quite different from those of many prior studies.




74

A direct test of the effects of government expenditure and borrowing on private investment is also useful, both to estimate the several
fiscal effects on the components of private investment and to provide
an independent test of the estimates of the effects on personal consumption expenditure. One recent study, for example, estimated the
effect of changes in the real Federal debt on the composition of
GNP, without controlling for the level and composition of Federal
expenditure. Over the period since World War II, this study estimated that a $1 increase in the real Federal debt increased private
saving by about 45 cents, increased State and local saving by about 5
cents, and reduced total domestic investment by about 40 cents, including reduced business investment in plant and equipment of
about 15 cents. During the recent period of floating exchange rates,
a $1 increase in the real Federal debt appears to have increased net
foreign investment in the United States by about 25 cents.
Another recent study estimated the effects of total Federal, State,
and local expenditure for goods and services and transfers and of the
total government deficit on the composition of GNP. Gross investment
including consumer durables and net exports appears to be reduced by
about 50 cents per dollar of government spending for goods and
services and by about 50 cents per dollar of the combined government
deficit. Business fixed investment also appears to have been substantially reduced by government spending for transfer payments, but most
of the fiscal effects on the composition of investment have not been
stable.
The combination of economic theory and the available evidence
suggests the following general conclusions:
• An increase in government expenditure on goods and services,
financed by an increase in taxes, reduces the sum of personal
consumption expenditure and private investment by a nearly equal
amount, with the larger impact on private investment.
• An increase in government transfer payments, financed by an
increase in taxes, probably increases personal consumption expenditure and reduces private investment substantially.
• For the same level of total government expenditures, an increase
in government borrowing probably reduces private investment
by about 50 cents per dollar, but the distribution of these effects
by type of investment has not been stable.
The general policy implication of these conclusions is that a reduction in government expenditure for either services or transfer payments would increase total private investment. A reduction of the
deficit by increasing tax receipts may also increase private investment
if the increased taxes are not levied on the income from saving and
investment.




75

Effects of Intergovernmental Grants

The Federal budget includes about $100 billion of grants-in-aid to
State and local governments. State budgets, in turn, also include
about $100 billion of grants to local governments. Most of these
grants are now limited dollar grants for broad purposes, such as education.
The effect of these grants on the economy depends on the response of the receiving governments. Many studies have found that
limited-dollar, broad-purpose grants increase expenditure by the receiving government by about 43 cents per dollar of the grant, and by
as much as 85 cents for education grants. The remainder of the grant
appears to be used to reduce taxes or borrowing. In contrast, State
and local government expenditure increases by only about 10 cents
from an additional dollar of disposable income within their jurisdiction. The combination of grants and taxes by the higher level of government, therefore, has probably increased total government expenditure by 33 to 75 cents per dollar of the grants. Because the receiving
government would not choose to finance this level of expenditure
from its own tax base, the additional services financed by these
grants are probably valued by taxpayers within the receiving jurisdiction at less than the cost of these services. This system of grants and
taxes is desirable only if the sum of the value of these services within
and outside the receiving government exceeds the cost of raising the
additional taxes by the granting government. One other conclusion
of these studies is that many of these grants are effectively fungible
because they increase the total expenditure by the receiving government but have only a small effect on the composition of these
expenditures.
The primary policy implication is that grants should be restricted
to services that have substantial value to people outside the jurisdiction
of the receiving government. In addition, the grants should be structured to assure that they lead to an increase in these specific services,
rather than to a general increase in expenditure in the receiving
jurisdiction.
Effects of Loans and Loan Guarantees

The Federal Government now makes net loans of about $15 billion
a year, mostly at interest rates lower than necessary to recoup the
sum of government borrowing and administrative costs. The intention of these loans is to reallocate capital from sectors with a high
private rate of return to favored sectors with a lower private rate of
return. These loans are desirable only if the sum of the return to the
recipient and the taxpayer exceeds the interest rate on a private loan.
The Federal Government now makes net loan guarantees of about
$20 billion a year. The cost appears on the budget only for loans that




76

default. These loan guarantees also reallocate capital to favored sectors with a lower risk-adjusted private rate of return. Again, these
loan guarantees are desirable only if the sum of the return to the recipient and the taxpayer exceeds the interest rate on a private loan.
These loan guarantees are especially subject to abuse because no
current appropriation is necessary to cover the loan origination or
the guarantee.
THE FEDERAL TAX SYSTEM
The tax system affects the cost or return to engaging in most types
of economic activity, and therefore it influences the allocation of resources. How tax revenue is collected also affects the distribution of
after-tax income among various groups.
The principal sources of Federal revenue are the personal income
tax, social insurance taxes, and the corporation income tax. These three
taxes yielded about $641 billion in 1984, or 91 percent of total Federal receipts. Of this total, personal income taxes were $308 billion,
social insurance taxes were $263 billion, and corporation income
taxes were $70 billion. This section addresses only the individual and
corporation income taxes; social insurance taxes and benefits are discussed in Chapters 4 and 5.
The Economic Impact of the Tax System

Any tax system that relates tax liability to measures of economic
activity, such as income or expenditure, will cause some inefficiency
in economic performance. This is because it encourages activities
(such as leisure) that are untaxed or relatively undertaxed at the expeiise of taxed activities. The result is a misallocation of resources
compared with their most efficient use.
The concept of a "pure" income tax provides a useful benchmark
for assessing the current tax system and proposals for tax reform. A
pure income tax would subject all income to tax, regardless of
source. Furthermore, tax liability would be determined with reference
to income, so that taxpayers with higher income would pay more tax
and taxpayers with the same income would pay the same tax.
Even a pure income tax system would have important implications
for the efficient operation of the economy. Because labor earnings
are subject to tax at the margin, the total amount of hours worked is
inefficiently low. This represents a cost to the economy to the extent
that the productivity of the labor forgone due to taxation at the
margin exceeds the value of time spent not working. Because the
incpme from capital is subject to tax at the margin, some desirable
saving and investment opportunities are also passed up. These forgone opportunities will in the short run lower the rate of growth of




77

the economy and reduce the capital intensity of production. A lower
capital intensity leads to a lower level of productivity and real wage
rates.
Of course, the current income tax system is far from the pure
system described above. Some sources of income are fully subject to
tax, some are partially subject to tax, and others are completely
exempt from tax. Deductions from income for tax purposes and special tax credits are allowed for a wide range of activities. Income
from capital is not measured accurately, and the existence of a separate corporation income tax system adds an additional layer of taxation on capital income.
These divergences from a pure income tax system have arisen for
a variety of reasons. In some cases they are the result of an explicit
government decision to subsidize a particular activity through the tax
system; the credit for residential energy conservation expenses is an
example. In other cases, the tax feature is an attempt to maintain
equity in the taxation of families or individuals in different situations,
where income is not an adequate measure of the ability to pay taxes.
The deductibility of extraordinary medical expenses and uninsured
casualty losses are examples. Some features have been justified on
the grounds that it is too complicated to implement the pure income
tax treatment. In this category is the tax exemption of the income-inkind provided by owner-occupied housing. Finally, many of the features of the tax law merely serve the interest of a particular group.
The result of all these special features is an extraordinarily complicated system that affects the return to labor supply, saving, investment, and myriad other activities. By altering the relative returns to
various activities, the system diverts resources into less productive
but more tax-favored activities. Consequently, the country wastes a
substantial fraction of potential national income. Some of this waste
is unavoidable under any income tax system; much of it, though, results because the system has strayed so far from a pure income tax
concept.
Table 2-4 presents one set of estimates of the allocative costs of
raising additional revenue from the major types of Federal and State
taxes. These estimates assume a responsiveness of labor supply about
midway between the two values used in Table 2-3 as well as about
the same marginal tax rate.
The primary conclusions from these estimates are the following:
• The cost of additional government services and transfer payments substantially depends on the types of taxes that finance
these expenditures.
• Among the major sources of tax revenue, the highest allocative
costs are specific to the personal income tax and the major taxes




78

T A B L E 2-A.—Allocative cost by type of tax
Attocative cost
per dollar

Type of tax
Personal income tax

$0.55
.49

Corporate and property taxes
Social insurance taxes

19

Retail sales tax

.35

Total

.48

Source: Ballard, Shoven, and Whalley, Working Paper No. 1043, National Bureau of Economic Research, December 1982.

on the income from capital. The lowest allocative costs are specific to social insurance taxes on labor income and the retail
sales tax.
These estimates suggest that the cost of additional government
services and transfer payments could be reduced substantially by replacing the present tax system with broader based, lower rate taxes
on either income or consumption.
I
Special Problems of Taxing Income from Capital

Qne especially troublesome problem with the present tax system is
the taxation of capital income. The present tax system, with some exceptions, taxes both saving and the income from savings, which increases the price of future consumption relative to current consumption. This reduces current saving and investment relative to the
amount that would be saved and invested if taxes were levied only on
consumption. Many of the changes in the Federal tax system during
the past several decades represent selective measures to reduce the
bias against saving and investment. Such changes include limited exclusions of retirement saving and measures to reduce effective tax
rates on the income from new investment. The Economic Recovery
Tax Act of 1981 further reduced the bias against saving and business
investment, most importantly by extending the individual retirement
accounts (IRAs) to employees and accelerating cost recovery on business investment. These measures have contributed to the rapid rate
of domestic business investment, but they do not appear to have increased the personal saving rate. The substantial remaining bias
against saving and investment should be a major focus of future
changes in the tax structure.
'the current tax system also distorts the pattern of investment
spending, because the effective tax rate on new investment depends
on the type of asset and the.rate of inflation. These distortions have
arisen partially because capital income is difficult to measure. For example, to calculate net income it is necessary to deduct the expenses
incurred in earning that income, a critical component of which is the




79

depreciation of the capital asset. Unfortunately, "economic depreciation," a concept that measures changes in value arising from both
physical deterioration and obsolescence, is extremely difficult to
measure accurately.
Another problem is that the tax system is not completely indexed
for inflation. Although individual income tax brackets are being adjusted annually for inflation, taxation of capital income is still affected by the inflation rate. Depreciation allowances fall in real value as
the price level rises, leading to an overstatement of the real income
of businesses. Increases in the value of inventories solely because of
inflation may also increase taxable income. Finally, increases in the
value of capital assets that merely reflect the increased price level are
subject to a capital gains tax upon sale.
This problem also applies to financial assets. In a period of inflation, part of the interest rate, the "inflation premium/* compensates
for the fact that the principal falls in real value over time. The tax
system, however, considers the full nominal interest earned on taxable securities to be income to the lender and a deductible expense
to the borrower. Taxable income is thus greater than true real
income for the lender. Similarly, full deducibility of nominal interest
payments leads to an understatement of the borrower's real income
and reduces the tax liability.
Several of the changes in the tax law during the past decade have
been advocated as offsets to the unintended effects of inflation on effective tax rates. These changes include the reduction in the taxation
of capital gains in 1978 and the accelerated cost recovery system of
the Economic Recovery Tax Act of 1981. Although these tax changes
reduced the average rate of taxation on the income from new investment, they did not successfully deal with the problem that the effective tax rate varies widely depending on the type of investment and the
financing method.
The effective tax rate measures the difference between the before-tax
and after-tax real rate of return on an investment, expressed as a
percentage of the before-tax real rate of return. Table 2-5 shows that the
effective Federal corporate tax rate on the income from equity-financed
investment is lower for equipment than for structures. The table also
shows how the effective tax rate depends critically on the rate of inflation.
Because different industries utilize different mixes of capital goods,
differential taxation of assets results in differential taxation of capital
income by industry. Table 2-6 indicates that the average effective Federal
corporate tax rate on fixed investment varies widely by industry, and that
the divergence in tax rates is higher at lower rates of inflation.
Nonuniform taxation of capital income causes misallocation of capital. One estimate of the cost of this misallocation of corporate cap-




80

TABLE 2-5.—Effective

Federal corporate tax rates on equity-financed investments fB equipment and
;
structures
[Percent]
Inflation rate

Asset class by depreciable life
Equipment:
3 years
5 years
10 years...
Structures:
15 years...

Tax Reform /for fairness, Simplicity, and Economic Growth, The Treasury Department Report to the President, Volume 1, p. 107.

ital is that it is equivalent to wasting 1V2 percent of the present stock
otf capital, or more than $5 billion worth of output annually.
Another important feature of the present tax system is the presence of a separate tax on corporate income. There is no necessary
role for a separate corporate income tax in a pure income tax system.
The income generated by corporations could be directly attributed to
stockholders and taxed under the individual income tax system in the
wzky that partnership income is treated. The primary justification for
a separate corporate tax is to ensure that retained corporate income
is subject to tax. However, the corporate income tax achieves this
ertd only at the cost of introducing a number of distortions to economic behavior. Corporate earnings distributed as dividends are
taxed more heavily than other forms of capital income because they
are subject first to the corporation income tax and then to the individual income tax. Earnings retained by the corporation may be overtaxed relative to noncorporate business income if the corporate tax
rate is greater than the shareholder's marginal individual income tax
rate. Thus, the present system can impose a higher effective tax rate
on activities carried out by corporations compared with activities performed outside of the corporate sector.
Because interest payments are deductible while dividend payments
to shareholders are not, the corporation income tax system provides
ai} incentive to use debt rather than equity financing. This leads to
more debt finance than the market would otherwise choose, increasing the vulnerability of corporations to bankruptcy. Because earnings
paid out as dividends are taxed more heavily than earnings retained
within the corporation, there is a tax incentive for corporations to
retain earnings. This may lead to inefficient investment of retained
earnings at rates of return lower than those available to the stockholder.




81

TABLE 2-6.—Effective

Federal corporate tax rates on equity-financed investments in equipment and
structures for selected industries
[Percent]
Inflation rate

Industry
Highest
Service and trade..
Leather
Agriculture
Apparel
Utilities
Lowest
Mining
Pulp and paper
Petroleum refining
Transport services
Motor vehicles

Source: Tax Reform for Fairness, Simplicity, and Economic Growth, The Treasury Department Report to the President, Volume 1, p. 108.
PROPOSALS FOR REFORM OF THE FEDERAL TAX SYSTEM

Dissatisfaction with the tax system has recently generated interest
in fundamental tax reform. Reform proposals can be grouped into
two categories: those aimed at improving the current system and
those that would substitute a new system. A common objective of the
tax reform proposals of both types is to redress such problems as the
erosion of the tax base, the overtaxation of capital income, and the
undue complexity of the system.
A critical issue in the evaluation of tax reform options is the
degree to which the income tax concept should be set aside in order
to reduce the taxation of saving and investment. If the tax base were
consumption rather than income, taxation of the return to saving and
investment would be eliminated. The present income tax system has
many special features, such as the treatment of pension contributions
and earnings, that reduce the taxation of saving and investment. The
tension between retaining the income tax concept, which does not
differentiate between income from labor and income from capital,
and the desire to reduce disincentives to saving and investment is a
recurring theme in the discussion of tax reform options that follows.
Reforming the Income Tax

The Treasury Department proposal, introduced in late 1984, and
other similar proposals rest on the belief that the income tax concept
is sound, and that the deterioration in the performance of the current system is caused primarily by its departure from the framework
of a pure income tax. The basic elements of these reform plans are
simplification of the tax system, a broadened tax base, and lower
marginal tax rates. In some cases, however, there is a conflict between simplification and base-broadening, as there is between adher-




82

ence to a pure income tax ideal and other goals, such as reducing the
disincentives to saving and investment.
Broadening the tax base would eliminate many sources of misallocation. In addition, because it also allows lower marginal tax rates for
the same revenue raised, it would further reduce the inefficiencies
arising from the tax system by reducing the differential between the
return to taxed activities and the return to activities that are untaxed
even under base-broadening. Exceptions to the principle of basebroadening should be justified either as incentive programs that promote the efficient use of resources or as measures to improve the
equity of the system.
One element of base-broadening is the reduction of itemized deductions. The largest category of itemized deductions is interest expense. In an income tax system it is proper to deduct interest expenses' incurred in order to earn income. Real interest payments
should therefore be netted against real interest receipts. Arguments
in favor of limiting or eliminating the interest paid deduction usually
rely on the observation that many kinds of capital income are either
partially or completely exempt from taxation. The primary example
of this treatment is the deduction for mortgage interest, which is allowed even though the income-in-kind from owner-occupied housing
is not regarded as taxable income. Currently, the law disallows the
interest deduction on loans used to purchase tax-exempt bonds, and
limits the total deduction of investment interest to net investment
income plus $10,000. Although these rules are difficult to enforce,
sdme such limitation is needed to maintain the integrity of the
system.
The deduction for State and local taxes, the second largest category, has been defended on two grounds. First, it is argued that State
and local taxes are involuntary payments that reduce an individual's
ability to pay other taxes. According to this argument, income minus
such involuntary payments is the proper base on which to calculate
taxes. This argument is flawed to the extent that these taxes finance
goods and services that are valued by individuals and that are determined through State and local political processes. The second argument is that Federal subsidization of State and local government
spending is desirable. This subsidization is sensible only if, in its
absence, State and local spending would be inefficiently low because of
external benefits to residents of other jurisdictions. This argument,
hpwever, does not suggest the form that deductibility implies—a subsidy that applies only to those who have sufficient total deductions to
make itemizing worthwhile, and at a rate equal to the marginal Federal tax rate. In any case, grants can be a more efficient means to
address these external benefits.




83

The deduction for medical expenses in excess of 5 percent of adjusted gross income provides taxpayers with partial insurance against
extraordinary medical expenses. The rationale is that large medical
expenses reduce an individual's ability to pay, and thus the principle
that taxpayers of equal means should pay equal taxes requires such a
deduction. The choice of the appropriate floor for the deduction
should reflect a balance between the reduced insurance value of a
high floor and the substantial administrative and compliance cost of a
low floor that would apply to a large fraction of the taxpaying population.
Another target for broadening the base of the income tax is employee benefits. These benefits would be regarded as taxable income
under a pure income tax system, but are currently given favorable tax
treatment. The major employee benefit programs are pensions;
health, disability, and life insurance plans; and worker's compensation.
Under current law, employer contributions to qualifying private
pension plans are deductible at the time of payment, and are not included as current income taxable to the employee. Furthermore,
earnings on the pension fund's assets are not taxed as they accrue.
Pension fund benefits in excess of employee contributions are taxable to the employee when paid out. If marginal tax rates are constant, this treatment of employer contributions is equivalent to taxing
the contribution when made and imposing no further tax on either
earnings or receipt of the fund. If the employee's marginal tax rate is
lower when benefits are received compared with when contributions
were made, the provisions provide the equivalent of a taxable contribution plus a subsidy to earnings of the fund. Under a pure income
tax system, pension rights would be fully taxable at the time of accrual. The current treatment can be justified as a selective reduction of
the bias against saving that is inherent in any tax on income. Similarly, the system of individual retirement accounts, which also represents a divergence from a pure income tax base, is designed to encourage saving. Effective saving incentives, though, should operate
at the margin of new saving. At present, IRAs have an annual ceiling,
and individuals can achieve the tax saving without doing any additional saving by transferring previous savings into the accounts.
Employer payments for group health insurance are not now taxable at the employee level, although they are deductible by the employer. This treatment provides a subsidy to health insurance that
contributes to escalating medical care expenditures. These consequences are discussed in greater detail in Chapter 4 of this Report A
pure income tax plan would eliminate this subsidy by making employer payments for insurance taxable to the employee.




84

Under a pure income tax, all real capital gains would be subject to
tax in the year they accrue, and all real losses would be fully deductible against other income. The current tax treatment of capital gains
diverges from this in a number of ways. Gains are taxed only when
incrime is realized (i.e., when the asset is sold), conferring the benefit
of tax deferral, and are excused from taxation upon the death of the
asset owner. Sixty percent of realized capital gains for assets held
longer than 6 months are excluded from taxable income. However,
the [ tax is based on nominal rather than real capital gains and only
$3,000 of net capital losses for individuals can be offset against ordinary income in a tax year.
The 60 percent exclusion of long-term capital gains has been justified as an offset to the failure to tax only real capital gains. However, it is a highly imperfect offset, because an accurate measurement
of real capital gain would not exclude a fixed fraction of gain, but
rather a fraction that depends on the rate of appreciation and the
amount of inflation that has occurred during the holding period. Adjusting the purchase price used in calculating taxable gain for inflation is preferable to the current percentage exclusion and the arbitrary
holding-period distinction. Another reason for a lower tax rate on
capital gains is to reduce the bias against saving and investment that is
inherent in any income tax system.
Although under a pure income tax a separate corporation income
tax need not exist, recent reform proposals have focused on redesigning rather than abolishing the corporation tax system. One approach is to lower the statutory corporate rate and reestablish the
link between tax depreciation schedules and economic depreciation.
This entails repealing the investment tax credit, lengthening the depreciation period, and indexing depreciation allowances for changes
in the price level. The net effect of all three provisions would be to
establish an approximately uniform effective tax rate, substantially
lower than the present statutory corporation income tax rate, on all
new investments. Because the effective tax rate would be uniform
among types of assets, it would also be uniform among industries
that) use different mixes of capital goods.
The impact of such a reform on the effective tax rate on new investment cannot be determined from short-term corporate income
tax payments. This is due to the extension of the period over which
assets are depreciated and other credits against income are taken. To
the prospective investor looking forward over the asset's useful life,
the new tax system may be no less favorable than the current system.
The timing of future tax payments with the same present value
should not be relevant unless there is uncertainty with respect to tax
rates in the future. For this reason, any conclusion drawn from a




85

projected short-run increase in corporation tax revenues about whether the incentive to invest decreases, stays the same, or even increases
must be tentative.
The principal advantage of this type of reform is to eliminate the
variation in the effective tax rate on investment and the resulting inefficient allocation of capital. Other proposals view reducing the effective tax rate on new investment as more important than eliminating the variation. These proposals typically accelerate depreciation allowances relative to economic depreciation.
In evaluating these proposals, it is important to realize that two
conceptually distinct issues are involved—the average effective tax
rate on new investment and the variation in effective tax rates. A tax
system that treats all types of investment uniformly, regardless of inflation, can be designed with any effective tax rate desired. For this
reason, accelerated depreciation is not a necessary component of a
system that features low taxation of new investment.
Either approach to corporation taxation can be supplemented with
a plan to reduce the double taxation of dividends. This can be accomplished either by allowing taxpayers to deduct a percentage of
their dividend receipts as a credit against their individual income tax
burden, or by allowing corporations to deduct some or all of their
dividend payments from taxable income.
A Consumption Tax

Proposals that emphasize taxation of consumption are based on
the notion that the income tax concept itself is flawed, and that no
amount of tinkering will substantially improve a system based on
taxing income. Under a consumption tax, an individual's tax liability
would be based on annual consumption rather than annual income.
According to one proposal, it would operate similarly to the current
income tax with a greatly expanded system of IRAs. A taxpayer with
earned income can now establish an IRA and deduct from taxable
income up to $2,000 per year. The funds earn income without taxation, but the entire balance is subject to full taxation at the time of
withdrawal. A personal consumption tax based on the IRA model
would allow the taxpayer to place an unlimited amount of deductible
saving into a special account. The fund's earnings would not be
taxed, and the fund's balances could be withdrawn at any time,
whereupon they would be subject to taxation. Borrowing would be
treated as a withdrawal, and therefore subject to tax. Consumer durables and housing could be treated in various ways; one method
would be to disallow deductions for their purchase, and also to
exempt from tax the imputed rental value of the services they provide. Under some plans, the individual could elect not to take a de-




86

duction for any financial asset purchased, in which case earnings and
withdrawals of principal would be exempt from tax.
In this way, a consumption tax would not require direct accounting
of annual expenditures, which would be impractical. Instead, an indirect determination of consumption would be made, based on defining consumption to be equal to income minus saving. The tax schedule applied to annual consumption could be graduated. As under a
pure income tax, there is no necessary role for a separate corporation income tax under a consumption tax system. As income is no
longer the basis for taxation, it is appropriate that tax liability not be
incurred until funds are distributed to the owners of the corporations
and used for consumption.
The return to saving is untaxed under a consumption tax. Thus, a
consumption tax, unlike an income tax, creates no distortions with
regard to saving and investment decisions. On the other hand, as
with an income tax, it does distort incentives to work. Because it operates on a smaller tax base than the income tax, it must impose
higher statutory tax rates to raise the same amount of revenue, potentially exacerbating any distortion in labor supply. Thus, the choice
between an income and consumption tax system is a matter of the
relative seriousness of the distortions under the two systems. This is
an empirical question that cannot be answered on theoretical
grounds. Although there has been a substantial body of literature on
this} subject, the question has by no means been resolved.
A pure consumption tax offers a solution to many of the structural
problems of the current income tax. It would eliminate the nonuniformity in the taxation of various kinds of investment by setting a
uniform effective tax rate of zero on the income from investment. Because the calculation of the tax base involves only current transactions, a consumption tax system would not require any explicit indexing provisions except to alleviate bracket creep if the rate structure
were graduated. Furthermore, there is no need to measure economic
depreciation or accrued capital gains, or to correct these measures for
inflation. Because these difficulties in measuring capital income are
avoided, a consumption tax represents a simplification compared with
an income tax. However, a typical taxpayer's reporting requirements
woiiild be complicated by the need to add borrowing and account
withdrawals to the tax base.
Many of the advantages of a consumption tax depend on the
degree to which its "purity" could be maintained. A consumption tax
system, though, could be burdened with special provisions favoring
certain forms of investment or consumption just as the income tax
system has been so encumbered. The allocative cost of such a system




87

would most likely exceed the cost imposed by a pure consumption
tax system.
Transition Issttes

One unfortunate side effect of tax reform is that it alters the return
to long-term commitments made on the basis of the former tax law.
Consequently, assets that lose preferential tax treatment will likely
experience capital losses, while assets with a reduced tax burden will
likely experience capital gains. Individuals who have made long-term
commitments, such as career choices, on the basis of previous tax law
may be capriciously rewarded or penalized.
These gains and losses cannot be justified as recovery of tax benefits unfairly received or as compensation for excess tax payments unfairly paid. Once the current law has been in place for several years,
the benefits of preferential tax treatment are reflected in the price of
the asset or activity. For example, preferential tax treatment of the
oil and gas industry undoubtedly generated capital gains for stockholders when the provisions were enacted. Subsequent purchasers of
oil and gas stock have had to pay a higher price that reflected the tax
advantages, and therefore are unlikely to have earned an extraordinary after-tax rate of return on their investment. Revoking the tax
preferences would cause a capital loss to all stockholders, whether or
not the current owners received a capital gain when the provisions
were enacted.
One method to reduce, although not eliminate, the gains and
losses that would accompany a tax reform is to phase in the changes
or postpone the effective date of implementation. This would allow
time for adjustment to the new rules and reduce the current value of
the induced gains and losses. Another approach is to grandfather tax
law changes, i.e., to apply them only to new commitments. Grandfathering can serve to minimize the capital losses on assets that are
scheduled to lose preferential tax treatment, although it will not
ensure that no such losses occur.
It has been argued that tax incentives designed to increase investment ought to apply only to new investment. This suggests that provisions such as the investment tax credit and accelerated depreciation
that apply only to new investment provide a better set of incentives
to capital formation than changes such as a reduction in the statutory
corporate tax rate or dividend relief, which apply equally to new capital and capital already in place. The targeting of new investment induces capital losses on existing capital at the time such measures are
introduced, because it essentially reduces the net purchase price of
substitutable new capital. This policy will also tend to maximize the
investment incentive per dollar of tax revenue lost, unless potential




88

investors anticipate additional targeted investment incentives in the
future.
Tihere are also problems that would apply specifically to the transition from an income tax to a consumption tax. The critical issue is
how to treat consumption out of the wealth that has been accumulated under the current tax system. One approach is to subject the
wealth to tax when consumed by requiring existing wealth to be registered and considered to be in the IRA-type special account. This
approach has been criticized as inequitable because it subjects individuals to tax on the consumption out of accumulated wealth on
which income tax has already been paid; this inequity would fall most
heavily on the retired population. The system would also create a tremendous incentive for individuals to hide existing assets from the
qualified account at the time of transition, in order to deduct the
value of the assets later as if it represented new saving. An alternative
approach is to simply declare consumption out of old wealth to be
exempt from tax. Even in this case, however, complicated accounting
rules would be required to prevent wealthholders from reducing tax
liability in the post-transition years by transferring assets to deductible qualified accounts.
The Treasury Tax Proposal

The tax reform plan proposed by the Treasury Department in
1984 embraces the principle that moving toward a pure income tax
system would improve the operation of the economy by reducing the
role of taxation in economic decisions. Toward this end the plan
would eliminate scores of current provisions that are inimical to
proper measurement of income.
The taxable base of the individual income tax would be expanded
by adding currently untaxed sources of income to the base and by
eliminating some deductions and limiting others. Prominent among
the base-broadening measures are the repeal of the deductions for
State and local taxes, limitation of charitable contribution deductions
to those in excess of 2 percent of adjusted gross income, and the limitation of tax-free employee benefits (including a cap on excludable
contributions for health insurance). A long list of other provisions
are designed to restore uniform taxation of income.
The expanded tax base would allow individual income tax rates to
be reduced significantly. The current schedule of 14 different tax
brackets (15 for single taxpayers) with tax rates ranging from 11 to
50 percent would be condensed into 3 brackets with tax rates of 15,
25, and 35 percent. The personal exemption allowance would be approximately doubled, so that for a family of four filing a joint return
no tax would be due on income of less than $11,800, compared with




89

$8,070 ($9,613 assuming full use of the earned income credit) in tax
year 1986 under current law. The combination of base-broadening
and rate reductions would reduce the expected revenue yield of the
individual income tax by %*/% percent. This reduction is spread
roughly proportionately among all income groups, with the exception
of significantly greater percentage reductions in tax liabilities for the
lowest income groups.
The Treasury Department also proposes major changes in the taxation of business income. The statutory corporation income tax rate
would decline to 33 percent from its current level of 46 percent. The
investment tax credit would be eliminated and the system of depreciation allowances would more closely replicate actual economic depreciation, with an adjustment for inflation. The tax treatment of inventories would be liberalized and include indexation. Finally, a deduction for one-half of dividends would be allowed to corporations,
reducing the tax penalty for paying dividends out of the corporate
sector. Certain special tax preferences that apply to particular sectors,
primarily financial institutions and the oil and gas industry, would be
repealed.
The provisions that generally apply to corporations would increase
the average effective corporate tax rate on new equity-financed investment in equipment and reduce the effective rate on investment in
structures and inventories. For any firm or industry, the change in the
effective tax rate would depend on the mix of these assets. The reform
appears to increase the average effective tax rate on new investment
generally, but this issue is not yet resolved. The reform would also
substantially reduce the misallocation caused by differential tax treatment by asset type, industry, and financial arrangements.
One summary measure of the effect of any tax proposal on investment incentives is the change in the rental rate on capital. The rental
rate measures the annual cost of using capital, including taxes, expressed as a percentage of the capital good's price. The net effect of
the Treasury Department proposal on the rental rate depends on the
rate of inflation. Table 2-7 summarizes one study's estimates of the
annual rental rate on capital, assuming a 4 percent real after-tax
return on corporate equity, from the combined effect of the major
provisions. These estimates also depend on the assumption that the
dividend exclusion provision does not reduce the cost of capital.
At a 6 percent inflation rate, the Treasury Department proposal
appears to increase the rental rate on producers' equipment by about
11 percent and reduce the rate on nonresidential structures by about
5 percent. The increase in rental rates would probably reduce the
fixed investment share of total output, but other effects of the Treasury proposal might increase total output in the near term.




90

T A B L E 2-7.—Annual rental rate on corporate capital
[Percent]
Inflation rate

Asset type

2 percent

6 percent

10 percent

Producers' equipment:
14.6
17.0

15.2
16.8

15.6
16.7

11.2
11.8

Current code
Treasury proposal

12.1
11.5

12.4
11.4

Nonresidenttal structures:
Current code
Treasury proposal....
Source: Lawrence H. Meyer and Associates, Special Analysis, December 1984.

An innovative aspect of the proposal is its attempt, through comprehensive indexation, to insulate the tax system from the distorting
effects of inflation. Interest receipts and interest payments (other
than fo£ mortgages on principal residences and up to $5,000 of other
net interest expense) would be adjusted downward to approximate
the portion that represents real income or expense. The taxation of
capital gains would also be indexed. At the current inflation rate,
most investors would be subject to about the same effective rate on
real capital gains as now, but the effective tax rate on high return investments would be higher. Indexed inventory accounting and depreciation allowances are introduced in order to remove the undesirable
linty between the rate of inflation and the effective tax rate on real
capital income.
In several important respects, the Treasury Department proposal
does not meet the concept of a pure income tax. It does not tax the
imputed income generated by owner-occupied housing. In fact, by
exempting mortgage interest payments from the indexing provisions,
it appears to increase the relative tax advantage enjoyed by owneroccupied housing. The Treasury Department proposal also represents a compromise with a consumption tax concept by retaining
and, in some cases, expanding its saving incentives. The current
treatment of pension contributions and earnings would be retained,
as would be the treatment of retirement accounts for the self-employed (Keogh plans). Eligibility for IRAs would be extended on
equal terms to spouses who are not employed, and the limit on taxdeferred contributions would be raised to $2,500 ($5,000 for a husband and wife).
In summary, the Treasury Department tax proposal represents a
serious attempt to reduce the efficiency losses attributable to the current tax system. It directly addresses the major structural problems of
the! income tax system. On closer examination, some changes in the
proposal may be desirable, but the Treasury Department proposal
should be the starting point for serious consideration of tax reform.




91

BUDGET CONCEPTS, PROCESSES, AND FISCAL AUTHORITY
Almost no one is satisfied with the Federal budget process. Many
are concerned about the outcomes of this process, which they believe
do not reflect the preferences of the American people. Among the
outcomes that are disturbing to many people are the following:
• Federal expenditure has continued to increase relative to GNP.
• The outstanding Federal debt has grown rapidly relative to GNP
in recent years.
• Many Federal services and transfers serve only small components
of the population.
• There is a general perception that there is a large amount of
waste in the Federal budget.
• The Federal tax system leads to a large amount of misallocation,
includes preferences for many small groups, and is unnecessarily
complex.
It is not clear, however, that a change in the Federal budget process would change any of these conditions, as these conditions may
result from the political processes.
Others are less concerned about outcomes than they are about the
costs of the process. Their concerns include the following:
• The major appropriation bills have only rarely been approved
prior to the beginning of the fiscal year.
• Many of the same issues are addressed in the budget resolution,
the authorizing legislation, and the appropriation bills.
• Although the budget process consumes a large amount of the
time of the Congress, it devotes only the most cursory attention
to many budget elements.
Many people, of course, share both of these types of concerns. The
one common view is that the present budget process is not working
very well. There is much less consensus about what changes may be
appropriate.
CHANGES IN BUDGET CONCEPTS

The Federal budget is a statement of expected cash outlays and
cash receipts. The budget includes both operating and capital outlays
and with some exceptions does not include accrued liabilities and receipts.
For many years, proposals have been made to separate the Federal
budget into an operating budget and a capital budget. One argument
for this concept is that it would provide a basis for determining the
appropriate amount of the expected Federal deficit, based on a rule
that the expected deficit in any year should not be higher than net
capital outlays. Borrowing (and the necessary future taxes) to finance




92

current government services and transfer payments, according to this
rule, would not be allowed. Some borrowing to finance net capital
outlays, however, would be permitted because the benefits accrue to
the next generation of taxpayers. Most State budgets are subject to
such a rule.
A change in the formal budget, however, is not necessary to make
this determination. A special analysis published with the budget now
summarizes the level and composition of investment-type outlays. In
recent years, the total outlays for investment have been close to the
level of the Federal deficit, but this is misleading. Outlays for physical structures and equipment are gross outlays, and thus do not reflect! the depreciation of the current capital stock. Outlays for research and development and education may lead to future benefits,
but do not directly generate future cash receipts to the Federal Government. The small amount of net loans is the only type of investment outlay that leads to significant future cash receipts. In summary, there does not appear to be a strong case for a formal capital
budget. There is a better case for reporting the sum of investmenttype outlays, net of depreciation, as a basis for determining the appropriate limit on the expected deficit.
Several proposals have been made to change the budget treatment
of ldans and loan guarantees. Under one proposal, new Federal loans
would be sold to private investors. This would reduce current budget
outlays from the net amount of these loans to the difference between
the par value and market value of these loans. New loan guarantees
coujd also be provided by purchasing loan insurance from private
firms. This would increase current budget outlays by the amount that
these firms would charge to accept these guarantees. Alternatively,
the Federal Government could charge an origination fee on new
loans and loan guarantees to cover the costs of administration and
the expected defaults, as proposed in the fiscal 1986 budget. These
proposals would lead to a more accurate budget accounting of the
now implicit subsidy to the recipients of Federal loans and loan guarantees. Both of these proposals deserve serious consideration.
CHANGES IN THE BUDGET PROCESS

The congressional budget process does not ensure that approved
outlays equal the total outlays established by the budget resolution.
In addition, the process has seldom met its own deadlines.
One proposed reform would substitute a single annual budget bill
for the current process of 13 general appropriation bills and the separate bills affecting taxes and transfers. The proposal involves the
• following steps: The budget resolution would clear the Budget Committee by April 15 and the Appropriations Committee and the Ways




93

and Means Committee by May 15. A single budget bill, hopefully,
would be approved by the July 4 recess. This proposal would be a
radical change but it is probably feasible; about half of the State legislatures now adopt their budget in a single bill. This proposal would
probably be acceptable to a President only if the appropriation bills
were presented to the President by individual title or, preferably, if
the President, like all but a few State Governors, had the authority
for a line-item veto.
Several proposals for a biennial budget, approved in the first year
of each Congress, are also being considered. Many States approve
budgets on a 2-year cycle. The primary arguments for this change are
to reduce the budget workload as well as the uncertainty about Federal financing. A biennial budget, however, would probably increase
the number of supplemental appropriations to reflect unexpected
changes in economic conditions and political preferences.
The Impoundment Control Act of 1974 authorized the President
to defer specific expenditures unless overridden by a majority vote of
either House. The President may rescind specific expenditures, however, only if approved by a majority of each House within 45 legislative days. Since a recent court decision, which overturned the provision for a legislative veto in this and other laws, both deferrals and
rescissions must be approved by a new bill subject to the normal process. The current law severely restricts the President's authority to
reduce expenditures for any purpose, including obvious waste and
changed conditions. In effect, appropriations are now both a ceiling
and a floor for allowed expenditures. Some consideration should be
given to a rule and procedure that would provide broader authority
for the President to reduce specific expenditures in order to meet the
broader fiscal constraints established by the Congress.
For many years, additional outlays have often been financed by additional borrowing; decisions to increase outlays are not directly related to decisions affecting expected tax receipts. Votes to increase
the debt limit have not been an effective restraint on this process. In
1983 the Senate debated a proposal to make the debt limit binding
by authorizing the President to reduce outlays if the debt limit would
otherwise be exceeded. In 1984 the House of Representatives approved the concept, but not the procedures, of a pay-as-you-go
policy that would require an increase in expected receipts if any
spending measure increased total outlays.
These proposals were not adequately developed, but they addressed a serious problem: The Congress can now vote to increase
outlays for some purpose without any requirement to reduce other
outlays or to vote for the increased taxes necessary to finance these
outlays. The proposed reforms would permit the Congress to ap-




94

prove any expected deficit, but the expected deficit would be limited
rather than open-ended. If the Congress is willing to finance additional outlays by reducing other outlays or by increasing current
taxes rather than borrowing, this process would contribute to more
effective restraint on both outlays and the deficit. Some development
and consideration of these proposals deserves attention.
On net, one should probably not expect too much from changes in
the budget process. After many years of observing this process, the
former Director of the Congressional Budget Office concluded:
". . . our current problems are not primarily procedural. The
budgeting process is complex and time consuming primarily because
the Federal Government does so many different kinds of things, and
because Congress is so reluctant to concentrate on major directions
of policy while leaving the details to executive departments or State
and local governments. We can simplify the budget process only by
simplifying the government itself and changing the role of the Congress. We can make the budget process less time consuming only if
we are willing to make decisions less often, or to give up some
checks and balances. Moreover, the world is an unpredictable place,
and, while we could perhaps handle unpredictability in the budget
process better than we do, no procedural changes can eliminate
it. . . . [T]he failure to make the hard decisions necessary to bring
budget deficits down [does not] reflect biases built into our budgetmaking procedures."
CHANGES IN FISCAL AUTHORITY

The President has endorsed two measures that would change the
authority of the President and the Congress on fiscal issues.
One proposal would authorize the President to veto individual line
items in all appropriation bills, subject to the current provisions for
overriding a veto of any bill. Governors in 43 States now have such
authority. The Congress has approved such authority for the Governors of the Commonwealth of Puerto Rico and the Trust Territories
and for the Mayor of the District of Columbia—but not for the President. Authority for a line-item veto has only once been withdrawn
by a State, but was later reinstated.
For more than a century, the Congress has rejected presidential requests for this authority in order to maintain the opportunity to package spending proposals that the President would otherwise veto in
broader appropriations that the President would approve. This practice did not represent a serious problem in the Nation's early history,
because most appropriation bills covered a narrow range of activities
and the President exercised broader impoundment authority. Now,
however, appropriations are presented to the President in only 13




95

general appropriation bills, and the impoundment authority has been
severely restricted.
Approval of a line-item veto may not have a substantial effect on
total Federal expenditure. The experience of the States indicates that
per capita spending is somewhat higher in States where the Governor
has the authority for a line-item veto, even when corrected for the
major conditions that affect the distribution of spending among
States. In addition, less than one-half of the Federal budget would be
subject to a line-item veto, and most of that would be for defense. A
President committed to Federal spending restraint, however, could
use this as an effective tool to reduce total spending.
Another argument for a line-item veto is to change the composition of Federal expenditure—from activities preferred by the Congress to activities preferred by the President. A Member of Congress
is elected from a specific district or State—the President is elected by
the Nation. As a consequence, a Member of Congress has stronger
preferences for activities that benefit his or her regional constituency,
and the President has stronger preferences for activities that benefit
the Nation. The expected result of granting approval for a line-item
veto would be an increase in the relative expenditures with national
benefits and a reduction in the relative expenditures for pork barrel
projects. That should be a sufficient basis for early approval of presidential authority for a line-item veto.
The President has endorsed a balanced budget/tax limitation
amendment to the Constitution. This proposal was approved by
more than two-thirds of the Senate and by more than a majority of
the House of Representatives in 1982. The legislatures of 32 States
have petitioned the Congress to approve a balanced budget amendment or to call a constitutional convention for this purpose.
The objective of this proposed amendment is to change the rules
by which decisions are made to borrow or to increase the size of Federal outlays and receipts relative to national income. The proposed
amendment provides for three rules:
• Actual outlays may not exceed projected outlays.
• Projected outlays may not exceed projected receipts, without the
approval of 60 percent of the total membership of each House.
• Projected receipts may not increase faster than the growth of national income in the prior calendar year, without the approval of
50 percent of the total membership of each House plus the
President.
Each of these rules could be suspended upon a declaration of war.
In effect, these rules would require broader support for a decision to
increase the Federal debt or for a decision to increase the relative




96

level of Federal outlays and receipts than the support necessary for
other legislation.
The case for the proposed amendment is based on a belief that
present political and budget processes are biased in favor of increased debt and increased spending. Elected officials, because of
their limited terms of office, may prefer current borrowing (and increased future taxes) to increased current taxes. Government officials
may also prefer increased spending, because spending is more concentrated on vocal constituencies than are the diffuse effects of taxes.
This perception is as old as the Republic. Alexander Hamilton's last
report on the public finances expressed special concern about the accumulation of public debt in the following words:
"On the one hand, the exigencies of a nation, creating new causes
of expenditure—as well from its own, as from the ambition, rapacity,
injustice, intemperance, and folly, of other nations—proceed in increasing and rapid succession. On the other, there is a general propensity in those who administer the affairs of a government, founded
in the constitution of man, to shift off the burden from the present to
a future day—a propensity which may be expected to be strong in
proportion as the form of a State is popular."
Approval of this proposed amendment would be a recognition that
each generation may need to bind itself to responsible fiscal decisions in the interests of the current and future American community.
The necessary process of approving this proposed amendment
would take several years, and the amendment would first be effective
in the second fiscal year after approval. Thus, this amendment could
not be binding prior to about fiscal 1990. This amendment cannot be
a substitute for the hard choices necessary to reduce the growth of
Federal expenditure and the Federal debt. Early approval of this proposed amendment, however, could force an earlier resolution of the
choices necessary to resolve major near-term fiscal issues.
CONCLUSION
The primary conclusions of this chapter can be summarized in several simple sentences. The Federal deficit must be reduced. Reducing
the growth of Federal expenditure is more likely to contribute to sustained economic growth than an increase in taxes. Some changes in
the tax system that would permit lower marginal tax rates would also
contribute to economic growth. None of these choices will be easy. A
change in the budget process may be helpful. A change in the fiscal
provisions of the Constitution may be necessary to achieve these
goals.




97




CHAPTER 3

The United States in the World
Economy
THE CRISIS ATMOSPHERE that marked the world economy in
recent years was dispelled considerably by economic developments in
1984. Progress in several areas—notably on the international debt
problem and economic stagnation in the industrialized nations—provided the global economy with more breathing room than it has enjoyed in recent years.
The events of 1984 also demonstrated, once again, the extent to
which national economies are linked to one another through international trade and financial relations. Many recent positive international
developments can be traced to vigorous economic recovery in the
United States. A growing, open U.S. market provided strong stimulus
to its trading partners in both the industrialized world and in debtburdened developing countries. For the latter, increased export
demand was a critical factor in their improved economic health.
While there was some tendency for the benefits of faster U.S.
growth to spread throughout the global economic system, the
strength of the U.S. recovery also resulted in increased divergence
between the United States and its partners in several related aspects
of economic performance. Two developments—the growing U.S. current account deficit and the high level of the dollar—merit closer examination of their causes and effects.
Compared to progress on international debt and growth, improvements in other problem areas have been less dramatic. Economic
stagnation in many countries in the early 1980s provided an environment well suited to the advance of protectionism. Reversing this
trend has turned out to be difficult. The recent marked improvement
in economic conditions and the commencement of a new Presidential
term provide a good opportunity for evaluating new policy initiatives,
including a new round of multilateral trade negotiations. First, however, it is helpful to look at the position of the United States in the
world economy and to examine recent developments in U.S. trade
policy.




99

THE U.S. RECOVERY AND THE WORLD ECONOMY
The United States has led the industrialized world in economic recovery during the past 2 years. It also has experienced a sharp decline in its current account position—the difference between exports
and imports of merchandise and services, minus net transfer payments made to foreign residents. In 1984 the U.S. current account
position declined from a deficit of about $42 billion in 1983 to a deficit of more than $100 billion (Chart 3-1). Most of the decrease was
attributable to the U.S. merchandise trade deficit, which widened by
about $50 billion in 1984 to reach an all-time high of almost $110
billion.
Chart 3=1

Balances on Merchandise, Services,
and Current Account
Billions of dollars
40
Services Balance
20

-20
-40
-60
-80
-100

I
1970

I
1972

I
1974

I

I

I

1976

I

I

1978

I

I

1980

I

I

1982

I
1984-^

1

First three quarters at annual rate; seasonally adjusted.
Source: Department of Commerce.

As a result, there have been increased calls for trade protection
and other types of market intervention. Although such measures
might provide a limited short-run advantage to affected sectors, they
would do so only at great cost to the U.S. economy and to the integ-




100

rity of the global system of free-trade relationships. Moreover, such
steps are difficult to reverse. Accordingly, it is important to understand the origins of the present large external deficits in order to
evaluate correctly their associated costs and benefits and to establish
policy priorities. As discussed below, recent large external deficits
and associated capital inflows are in large part the consequences of
successful recovery in the United States, rather than problems requiring separate, new policy actions.
A current account deficit is not necessarily a negative factor for the
economy as a whole. A current account deficit merely implies that
(ignoring transfer payments) U.S. residents are purchasing more
goods and services than they are now producing. Its counterpart is a
capital account surplus, which measures the net claims on U.S. residents that foreign residents have accepted in payment. Thus, net capital inflow provides the financing for an excess of current expenditure over output. This inflow has been important in financing the
recent U.S. investment boom.
Chart 3-2 shows how U.S. financial flows shifted during the past 2
years. Private investment is financed by saving from three sources:
private saving (including undistributed profits), government saving
(the negative of government borrowing), and capital inflow from
abroad (the capital account surplus). Between 1982 and 1984, private
saving rose by about $150 billion to help finance a roughly $220 billion increase—a more than 50 percent rise—in U.S. private investment; a small upswing in total government borrowing partly offset
this additional private saving. However, greater capital inflow from
abroad financed almost $90 billion—about 40 percent—of the increase in private investment.
Large current account deficits and corresponding capital account
surpluses are not likely to go on indefinitely. In the past when deficits or surpluses have emerged, either their underlying causes were
temporary, or natural market forces (or policy responses) eventually
brought about adjustment. In such episodes, whether or not the
entire process of deficit and adjustment is judged to have been beneficial depends on whether the increased current expenditure is used
productively. If greater current expenditure is mostly consumed,
gains may be slight and subsequent adjustment painful. In the case of
the present U.S. current account deficit, however, both private saving
and investment have been strong. Elements seem to be in place for a
sustained expansion with less likelihood of a difficult future adjustment.
Although the U.S. trade balance has fallen sharply, this decline did
not arise from deterioration in U.S. productive efficiency. Since the
beginning of the recovery, U.S. output per hour has advanced at




101

Chart 3-2

Investment and Saving in 1982 and 1984
Billions of dollars

800

600

-

400

-

200

-

-200
Private
Investment

Private
Saving

Government
Saving

Foreign
Capital Inflow

Note.—Data for 1984 are preliminary.
Source: Department of Commerce.

an annual rate of over 3 percent, easing earlier concerns about declining productivity growth. Wage increases have also decelerated,
with the result that there has been a marked improvement in U.S.
unit labor costs. During the present recovery, real exports have increased at an annual rate of about 4Y2 percent (about %XA percent in
1984 alone), only slightly less than in comparable stages of recent recoveries. The strong performance of investment in the present upswing is a positive sign for the continuation of these trends.
CAUSES OF THE TRADE DEFICIT

In last year's Annual Report, three factors were singled out as leading causes of the large trade deficit: the strong dollar, reduced U.S.
exports to heavily indebted developing countries, and faster growth
in the United States compared with its industrialized trading partners. These factors still are present, but the emphasis that each de-




102

serves has shifted. Improved conditions in many developing countries
have allowed them to resume import growth, though certainly not at
pre-1981 rates. Although the growth-rate gap between the United
States and its industrialized partners widened earlier this year, some
convergence has been evident lately as U.S. growth slowed and expansion in Europe accelerated somewhat. The dollar,(however, continued to strengthen in 1984.
Estimates of how much each of these factors contributed to the
recent decline in the U.S. trade balance are inherently inexact, in
part because these factors are not independent of one another.
Nonetheless, rough estimates give a general impression of their relative importance. Since 1981, U.S. real growth has exceeded that of its
main industrialized trading partners by about two-thirds of a percentage point per year on average; in 1984 the gap in growth rates was
more than four times as large. Even at unchanged relative prices,
with faster growth of U.S. spending, U.S. purchases of imported materials and products normally will increase. On this score alone, one
can account for roughly one-quarter of the $85 billion decline in the
annual U.S. trade account position since 1980. Slower growth in U.S.
exports to debt-burdened developing countries, which were obliged
by financing constraints to reduce their imports, accounts for a
slightly smaller share of the decline. This factor was especially significant in trade with Latin America, where the United States has a large
stake in export markets.
Not all external developments have increased the U.S. deficit. The
dollar price of oil has moved downward by more than 20 percent
since 1981. Lower prices, recent shifts to other energy sources, and
conservation have meant that annual payments for imported oil by
the United States have been cut by about $20 billion in the past 4
years. When these gains in the cost of imported oil are included, a
net decline in the U.S. trade balance of about $60 billion to $70 billion remains—much of it attributable to the strong dollar.
THE STRONG DOLLAR

One of the most striking features of the present recovery in the
United States is that it has been associated with a pronounced and
persistent rise in the value of the dollar. Since 1980, the latest year in
which the U.S. international current account was roughly in balance,
the dollar has advanced steadily against a weighted average of other
major currencies until by the end of 1984 it was about 65 percent
above its 1980 average and at its highest level since flexible exchange
rates were adopted in 1973 (Chart 3-3). The largest increases in the
dollar's value occurred in 1981 and 1982 from an unusually low level
in 1980. However, during the eight quarters since the trough of the




103

recession at the end of 1982, the dollar strengthened by about 20
percent.
Chart 3-3

Nominal and Real Exchange Rates
and Expected Real Interest Differential
Index, March 1973 - 100

Percent

150
140

130

80
Expected Real Interest
Differential 3
(Right scale)

_LL
1977

I
78

I

I

1 I
79

I

I 1
80

81

82

84

1

Multilateral trade-weighted dollar.
Nominal exchange rate adjusted by relative consumer prices.
U.S. interest rate (3-month) minus trade-weighted average interest rate (also 3-month) for
six industrial countries adjusted by corresponding OECD inflation forecasts.
Sources: Board of Governors of the Federal Reserve System and Organization for Economic
Cooperation and Development (OECD).

2
3

Given enough time, exchange rates adjust so that a representative
bundle of goods costs roughly the same in countries linked by open
trading. There is ample evidence, however, that this relationship
need not hold over the short or medium term. Changes in the dollar's real exchange rate (i.e., the nominal exchange rate adjusted for
consumer price levels here and abroad) have generally been less pronounced than changes in the nominal exchange rate, but the latter
have not merely compensated for relative price performance. Since
1980 the dollar's real rate of exchange has risen by about 60 percent,
only slightly less than the nominal exchange rate (Chart 3-3). From
the fourth quarter of 1982 to the fourth quarter of 1984, the dollar's
real exchange rate appreciated by about 18 percent.




104

Over shorter horizons that are relevant for many economic decisions, exchange rates are determined in international asset markets.
Asset prices, including the exchange rate, can change quickly in
response to changing expectations about fundamental characteristics
that influence asset demand and supply. International investors make
their portfolio decisions mainly on the basis of expected rates of
return, including expected exchange rate changes, adjusted for risk
and other special factors. It is useful, therefore, to compare expected
real interest rates on dollar and nondollar assets (i.e., nominal interest
rates adjusted for expected inflation) to understand what has been
happening in foreign exchange markets.
Starting in 1979, expected U.S. real interest rates moved strongly
upward, despite a brief interruption in mid-1980, and peaked in 1982.
Although they have fallen since then, they are still at relatively high
levels. A rise in real interest rates abroad at about the same time was
much less pronounced and left a substantial positive gap between U.S.
and foreign real interest rates, as indicated in Chart 3-3.
Reasons for the marked increases in U.S. expected real interest
rates and the dollar's value at this time are found largely in the character of the successful U.S. recovery. Increases in U.S. real interest
rates were associated with the 1979 change to a tighter U.S. monetary stance. Subsequent declines in inflation contributed to a
strengthened dollar between 1980 and 1982, as the expected real
return to holding dollar assets rose and improved U.S. inflation performance itself justified a higher nominal dollar exchange rate.
More importantly, as emphasized in Chapter 1, the Economic Recovery and Tax Act of 1981, together with reduced inflation, significantly raised the after-tax rate of return on new business investment.
This increase in the real rate of return on U.S. business investment
spilled over to the return on dollar-denominated assets generally and
to the level of the dollar itself. After 1981, expanding Federal budget
deficits may also have raised the level of U.S. real interest rates and
helped to strengthen the dollar. However, the extent of upward pressure on real interest rates and on the dollar through this channel is
uncertain, and numerous studies have failed to uncover significant
effects.
Higher real returns and lower inflation account for some but not
all of the upward movement of the dollar. The fact that the real exchange rate has risen steadily, while the real interest rate gap in favor
of the dollar has narrowed since 1982 (and occasionally has been
negative), suggests that other factors have continued to push up the
demand for dollar assets. Evidently the combination of increased
after-tax profitability of U.S. corporations, demonstrated strength of




105

the U.S. recovery, reversal of international lending outflow from U.S.
banks, and generally more favorable longer run prospects for the
U.S. economy have prompted an additional increase in demand for
dollar assets. Just as in 1980, when a relatively low level of the dollar
probably reflected a more pessimistic view of future U.S. performance than could be measured by the real rate of interest and other
available indexes, in 1984 a relatively high value of the dollar probably reflected more optimistic assessments than these indexes
captured.
The recent strength of the dollar has had both positive and negative effects. As the dollar has risen, some U.S. industries that compete in international markets have experienced difficulties. Many of
these problems are concentrated in the manufacturing sector, where
declines in trade balances across industries have been widespread.
However, some manufacturing industries with large trade losses are
troubled by problems beyond those arising from dollar strength, including relatively high labor costs, raw material costs, and other factors that have contributed to a loss of comparative advantage. The
traditional U.S. surplus in agricultural products has contracted by
about $8*/2 billion from its level of 3 years ago, as dollar appreciation
and slower demand growth have kept dollar prices and export volumes down. Declines have also occurred in U.S. exports of raw
materials.
In many respects, however, the dollar's rise in value has been beneficial. The strong dollar has stimulated production and investment
in sectors less involved in international trade. In other industries,
competition from imports has prompted more expenditure on plant
and equipment as well as greater attention to controlling wages and
other costs. Prices of traded goods and close substitutes have been
kept lower than they would have been otherwise, thereby benefiting
both U.S. consumers and U.S. producers who use imported inputs.
Undoubtedly, the dollar's rise since 1980 has made the task of bringing inflation under control considerably easier. In addition, because
of the shift in demand toward dollar assets, U.S. interest rates have
been lower and real investment higher than would have been the
case otherwise. Stronger U.S. investment will ultimately mean higher
productivity and faster potential growth.
THE DEBTOR COUNTRIES: RECENT PROGRESS

External deficits have narrowed markedly in recent years for many
borrowing countries. Since 1981 the total annual current account
deficit of the largest 17 debtors among the developing countries has
declined by about $44 billion to a level estimated to have been about
$20 billion in 1984, despite increased interest burdens. Some coun-




106

tries have made especially dramatic gains; Brazil and Mexico stand
out in particular. The Brazilian current account deficit declined by
more than $8Y2 billion in 1983 and is estimated to have fallen by
about another $6 billion in 1984 to only about %x/z billion. For
Mexico, the gains have been even more dramatic—a total improvement of $19 billion between 1981 and 1983. The Mexican current account was in surplus by $5 billion in 1983, and the surplus is
estimated to have been only slightly less in 1984.
Initial improvements in the current accounts of borrowing countries were achieved primarily through cuts in imports. Subsequently,
import declines continued in response to restrictive fiscal and monetary policies and exchange-rate devaluations that were part of adjustment programs supported by the International Monetary Fund. More
recently, as the potential for further import reduction has been exhausted, continued improvement in borrowers' external positions has
resulted from expanding exports. Almost all of the major borrowing
countries experienced export growth in 1984. Most have shown
stronger real output growth as well. This has been important in
maintaining the political consensus needed to sustain their economic
adjustment.
Increased exports have been largely a reflection of expanding
demand in the industrialized countries, especially the United States.
As the leader in the global recovery, the United States with its comparatively open markets has played a disproportionate role in absorbing the output of the debtor countries. Among the industrialized
countries, the United States now buys about 45 percent of the exports by the 17 largest debtors, up from about 40 percent only 2
years ago.
Although in 1983 and 1984 banks slowed their lending to the
debtor countries from earlier peaks, bank loans and official lending
still have been available at levels adequate to support adjustment
programs. In consequence, the ratio of debt to exports—a measure
that is often used as an indicator of a borrowing country's financial
position and ability to pay—has stopped rising in most countries and
has started to decline in many others. However, the average ratio is
only slightly below 2, which is still considerably above the average
level of about \xk in the mid-1970s.
Positive steps have also been taken in restructuring outstanding
debt—the most notable development being a rescheduling agreement
between Mexico and its private bank creditors in September 1984 on
Mexico's outstanding public-sector debt of about $50 billion. Previous rescheduling of smaller amounts of sovereign debt had generally
been on a 1-year basis; the Mexican agreement broke new ground by
covering debt maturing over the following 6 years. Partly in view of




107

Mexico's excellent performance under its adjustment program and
continued good prospects, the lending terms in the new agreement
were attractive—a quite low interest-spread and a generous grace
period. In addition, up to 50 percent of a bank's outstanding credits
to Mexico may be converted at the bank's option to its home
currency, thus enabling more secure funding.
The recent gains made by Mexico, Brazil, and several other key
debtors confirm that their strategies for economic adjustment and repayment are basically sound. International debt problems have not
been solved, however. Progress among debtor nations has been quite
uneven. Although some countries have made substantial improvements in their current account positions, the majority of the large
debtors are still in deficit, indicating that they are still increasing
their net indebtedness to the rest of the world.
In some cases, relatively poor performance arises from special factors. Countries that depend heavily on exports of certain raw materials (such as copper, rubber, tin, and oil) have been set back by recent
price declines. In general, price trends for exports of developing
countries have not been favorable lately; the average dollar price of
industrial raw materials (excluding oil) has fallen by almost 15 percent since the end of 1983. In other cases, essential domestic adjustments have not yet been made. The differing performance of these
countries underlines the fact that the extent of a debtor country's recovery depends closely on export growth, maintenance of competitive exchange rates, well-conceived investment plans, and noninflationary macroeconomic policies.
Recent events also reveal clearly how sensitive the performance of
the debtor countries is to the state of the world economy—including
the level of interest rates, the value of the dollar and, especially, the
rate of growth of the industrialized economies. Sustained growth in
the industrialized countries, however, is not sufficient to ensure that
demand for the exports of developing countries will continue to
expand. The markets in industrialized countries must remain open,
not only to traditional exports from the developing debtor countries,
but also to more skill-intensive exports that emerge as their comparative advantage evolves. In recent years, increased protection has been
directed at this latter class of products—particularly those from the
so-called "newly industrialized countries." The costs of such protection include not only misallocation of resources but also damage to
the prospects for successful debt repayment.
Both production and the prospects for debt repayment would be
further enhanced by expansion of foreign direct and portfolio investment flows. These flows could increase if host countries were to provide a better investment climate. Increased foreign direct invest-




108

ments, in particular, would not only partly relieve borrowing needs
but would also provide additional benefits, such as technological
transfers, training, and improved export marketing know-how.
INDUSTRIALIZED TRADING PARTNERS

There have been significant differences among the major industrialized countries in their recovery from the 1980-82 world recession.
These differences were still apparent in 1984. Although the United
States, and to a lesser degree Japan and Canada, experienced further
healthy expansion (albeit from a fairly deep trough in Canada), recovery in Europe still lagged well behind. Average real growth in the
four major European economies (Germany, France, the United Kingdom, and Italy) accelerated slightly in 1984 to about a 2Vi percent
annual rate, but this was less than half the average of the three nonEuropean countries mentioned above. Although some progress has
been made lately in revitalizing the European economies, fundamental problems remain. The most visible symptom of these problems is
the presence of persistent and rising unemployment, currently equivalent to almost 11 percent of the Western European work force.
Two factors are often cited to explain the slow economic recovery
in Europe: structural problems in European labor markets and disincentives to adjustment and growth. Structural factors include highly
indexed wages, high nonwage labor costs and social charges, and arrangements for excessive job security that contribute to a low rate of
labor mobility and new hirings. Disincentives include various government regulatory burdens, high marginal tax rates on labor and capital incomes, and large subsidies paid to agriculture and declining industrial sectors.
One consequence has been relatively low rates of investment in
Europe. Expressed as a share of output, private investment has declined steadily since the first oil shock in 1973 and is now well below
the level of investment shares seen in Europe in the 1960s. There
has also been essentially no net job creation in Europe in the past 15
years. In addition to disincentive effects and labor market rigidities,
labor market conditions have been worsened by demographic factors—especially a heavy influx into the work force of younger workers. Labor force growth is expected to decelerate in coming years,
but in the absence of a marked pickup in investment, achieving a significant reduction in European unemployment will be difficult.
Many European countries have given priority to reducing large
government deficits and limiting the expanding share of government
expenditure in total demand. Progress has been made, but the hope
that deficit reduction and curbs on public spending would contribute




109

significantly to higher growth by releasing resources to the private
sector has not been fully met.
On balance, the external sector has provided little net stimulus to
growth in Europe. This is not to say that European exports to the
United States have been weak. On the contrary, U.S. imports from
the European Community (EC) have grown at about a 17 percent
annual rate since 1982. However, the U.S. market makes up a relatively small share of total EC export sales (about 16 percent, not including intra-EC trade). Trade within the Community has fallen since
1980, and other important EC export markets—Organization of Petroleum Exporting Countries (OPEC), the Eastern Bloc, and major
debtor countries—have been stagnating or declining. In these latter
markets, however, even the market shares of European exporters
have not increased, despite significant gains in competitiveness vis-avis the United States in the past 2 years.
Although progress has been slow in Europe, there are grounds for
optimism. Nominal wage increases have decelerated in several countries. In some cases, performance in 1984 has been affected by special factors, such as persistent inflation in France and sectoral strikes
in the United Kingdom and Germany. The rapid rebound of activity
in Germany following the settlement of the metalworkers' strike suggests that underlying German growth potential is strong. Economic
performance in the other countries may improve for similar reasons
once their particular difficulties are dealt with successfully. Continued
control of inflation and reduction of government expenditures may
provide many European countries with a foundation for more stable
economic growth.
In contrast to the European economies, Canada and Japan have
performed well. The U.S. market is relatively much larger for both
countries (70 percent of total exports for Canada and 30 percent for
Japan), and recent export growth to the U.S. market has been robust
(since 1982, annual growth of about 19 percent for Canada and 25
percent for Japan). The fact that Japan also exports heavily to the
rapidly expanding newly industrialized countries of Asia (South
Korea, Taiwan, Hong Kong, and Singapore) also has contributed to
its largely export-led recovery.
Trade relations with Japan have sometimes been singled out as a
special problem. In a period in which the United States is running
the largest trade deficit of any nation, Japan is in quite the opposite
position with a trade surplus of just over $44 billion in 1984. Furthermore, the U.S. deficit in bilateral trade with Japan expanded significantly in 1984 to an estimated annual deficit of over $33 billion.




110

Emphasis on the bilateral balance in a multilateral trading system is
misplaced, however, and can be misleading—just as would be inferences about a person's financial standing based on his or her relationship with only one creditor. In fact, the decline in the U.S. bilateral
trade position with Japan since 1981 has been less than that with either
the European Community or Latin America. Although some problems
have arisen in the past in relation to foreign access to particular
markets in Japan, an agreement reached in early January 1985 between
the President and the Japanese Prime Minister to establish high-level
talks on this issue is a sign of potential progress in this area.

RECENT U.S. ACTIONS IN INTERNATIONAL TRADE
U.S. policies in international trade are tied inextricably to domestic
political and economic considerations. They are also developed
within the larger context of a dynamic international marketplace and
the sometimes abusive trading policies of other countries. Against
that backdrop, U.S. actions in 1984 represent progress toward freer
trade, as well as some increases in protection. Significant actions include the passage of a major trade bill by the Congress in cooperation with the Administration, decisions on several important import
relief cases, and the extension or modification of existing import restrictions in several sectors.
THE TRADE AND TARIFF ACT OF 1984

Despite unusually strong protectionist pressures, the Congress and
the Administration put in place an omnibus trade law that generally
supports freer trade. The major provision of the Trade and Tariff
Act of 1984 renews until 1993 the Generalized System of Preferences, which eliminates tariffs on eligible imports from qualifying developing countries. Some imports (notably textiles) are not included.
In addition, the renewed program establishes eligibility criteria for
participation that include the extent to which participating countries
offer access for U.S. exports, protect intellectual property, eliminate
trade-distorting investment policies, and enforce certain rights of
workers, including rights of association. Countries with a per capita
gross national product exceeding $8,500 (a figure indexed to onehalf the rate of U.S. economic growth) are ineligible for the program.
The Act also provides authority for negotiations (with Israel, specifically, and with other countries) to establish a free-trade zone.
Congressional ratification is required, however, and the President retains the power to impose quotas or to negotiate export restraints if




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the U.S. International Trade Commission determines that increased
imports cause or threaten to cause injury to domestic industries.
Certain measures in the new Act extend the Trade Act of 1974 to
provide specific authority for the President both to retaliate against
and to negotiate reductions in barriers to U.S. exports, including exports of services and foreign investment. The Act provides explicit
authority for the U.S. Trade Representative to initiate investigations
of unfair trade practices and expands the countervailing duty statutes
to include specifically products that benefit from subsidized inputs.
In a series of provisions, the Act extends the legal definition of affected industry to allow grape producers 2 years to file petitions
against foreign trading practices affecting the wine industry (this provision deviates from the established principle of allowing petitions
only from firms with like or directly competing products); revises the
criteria for determination of injury due to imports under section 201
of the Trade Act of 1974 (by requiring the International Trade Commission to consider plant closings and producers* inventories of imports in determining injury); and provides explicit authority for the
President to implement his recently announced steel trade program,
which is discussed below. The Act also reduces tariffs on about 100
products.
OTHER TRADE ACTIONS

The International Trade Commission investigated several section
201 * Escape-clause'' cases during 1984. After a finding of injury due
to imports by the Commission, the President is charged with making
the final decision on whether to restrict imports based upon the national economic interest. The Commission determined that imports
were not a substantial cause of serious injury, or threat of serious
injury, to three small domestic industries. In two major cases involving unwrought copper and carbon steel, however, the Commission
did find injury and recommended import relief in the form of various
trade restrictions. The President rejected import relief in the case of
copper, primarily because of potentially large damage to the U.S.
copper fabricating industry.
The President also rejected the import relief for steel proposed by
the Commission, but opted instead to negotiate voluntary restraint
agreements (VRAs) to be in effect for 5 years. The President acted in
response to sharp surges of steel imports during the year, which were
the result in part of foreign government subsidies. The restrictions
are expected to limit imports to roughly 20 percent of domestic steel
consumption. Agreements for new export restrictions have been
reached with Japan, South Korea, Spain, Australia, South Africa,
Mexico, and Brazil. A general restriction agreement with the EC will




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continue through 1985, but new restrictions on pipe and tubes will
extend through 1986.
In April 1984, the 3-year Japanese VRA on automobiles announced
in 1981 was extended an additional year at a slightly higher limit of
1.85 million cars per year. Following losses by U.S. automobile manufacturers in 1980, Japanese automobile exports to the United States
were restricted in April 1981 to 1.68 million cars per year on the
grounds that the U.S. automobile industry needed time to adapt to
world competition through introduction of new technology and costcutting measures.
In agriculture, the United States maintains a number of significant
import restrictions, including limitations on cotton, peanuts, dairy
products, and sugar. With the exception of the quota on sugar, these
restrictions remained unchanged in 1984. The sugar quota was reduced by 17 percent to be consistent with the domestic price support
for sugar and changing market conditions, including reduced sugar
demand, increased use of sugar substitutes, increased domestic sugar
production, and surging imports of products containing sugar from
Canada and Mexico. In January 1985 the quota was further reduced
by extending the quota year by 2 months.
In August 1984, new interim regulations governing U.S. textile imports were announced that codified the "substantial transformation"
principle used by the U.S. Customs Service to determine the country
of origin of imported goods. These regulations were issued in response to claims by domestic producers that foreign suppliers were
circumventing relevant export restraint agreements by shipping parts
of garments to other countries for superficial processing before final
shipment to the United States. Foreign producers, importers, and domestic retailers objected strongly to the new rules. Their comments
and those of other interested parties on the interim regulations were
being reviewed by the U.S. Customs Service at the end of 1984.
ACTIONS IN INTERNATIONAL FINANCE

The United States now maintains a full array of essentially open
financial markets for international investment and fundraising, as do
several other industrialized countries, including Germany, Switzerland, and the United Kingdom. In May 1984 an agreement was
reached between the Japanese and U.S. Governments on measures
designed to liberalize markets for yen-denominated financial assets.
The agreement marks an important stage in Japan's continuing
movement toward fully liberalized financial markets.
The U.S. objective of unrestricted capital flow is also evident in the
removal in 1984 of the U.S. withholding tax on interest earned by
nonresidents on U.S. bonds and other financial instruments. The new




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tax rules now make it feasible for U.S. corporations to issue securities
directly to foreigners without having to go through the previous cumbersome and costly procedure of issuing indirectly through an offshore shell subsidiary. Soon after the U.S. rule change, both Germany and France dropped their own corresponding taxes on interest
payments to nonresidents, and Japanese authorities have announced
their intention to do the same.
The United States has also been at the forefront of efforts in the
Organization for Economic Cooperation and Development (OECD)
to restrict the use of subsidized financing for exports. In the case of
so-called "mixed credits"—the use of concessionary loans for development aid to boost exports through tied sales—the consequences
are costly not only to competing exporters, but also to aid recipients
because choice of supplier and, often, choice of product are restricted.
In characterizing U.S. actions in international trade and finance in
1984, one cannot say that U.S. policy greatly advanced the cause of
free trade; neither can one say, however, that U.S. policymakers capitulated to the unusually strong domestic protectionist pressures. On
balance, the Administration and the Congress managed to resist
those pressures and helped to set the stage for potential advances
toward freer trade in 1985 and in years to come.
THE CHALLENGE OF COMPREHENSIVE FREE TRADE
The world is moving away from, rather than toward, comprehensive free trade. In major industrialized countries, for example, the
proportion of total manufacturing subject to nontariff restrictions
rose to about 30 percent in 1983, up from 20 percent just 3 years
earlier. Although tariffs among industrialized countries have been reduced substantially since World War II, tariffs also remain high in
some sectors (textiles, footwear, steel, wood products, and shipbuilding, for example) and among developing countries. In nonmanufacturing, international trade is subject to even more severe restrictions
and market distortions, especially in agriculture and services.
New international initiatives are required to sustain the post-World
War II momentum toward comprehensive free trade and the world
economic growth that it has fostered. Speaking to the International
Monetary Fund and World Bank Joint Annual Meetings on September 25, 1984, the President called for just such initiatives:
"For the millions around the globe who look to us for help and
hope, I urge all of you today: Join us. Support with us a new, expanded round of trade liberalization, and, together, we can strength-




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en the global trading system and assure its benefits spread to people
everywhere."
Accordingly, what follows is first, a restatement of the case for free
trade, including a rebuttal of the myths of protectionism; second, a
discussion of the obstacles to progress toward free trade; and, finally,
a discussion of strategies for surmounting these obstacles.
THE CASE FOR FREE TRADE

The persuasive power of arguments for free trade arises not from
abstract economic reasoning, but from concrete historical comparisons of the achievements of free trade against those of protectionism.
The conclusions to be drawn from such comparisons over the past
two centuries are unambiguous: Countries that have followed the
least restrictive economic policies both at home and abroad have experienced the most rapid economic growth and have enabled the
greatest proportion of their populations to rise above subsistence
living standards. Nevertheless, the demonstrated achievements of
free trade cannot be taken for granted—the myths of protectionism
persist, eroding the discipline of national economic policies around
the world and frustrating new free-trade initiatives.
The Achievements of Free Trade

The power of free trade is amply demonstrated in history, including the early history of the United States. Under the Articles of Confederation, protectionist interests in individual States moved quickly
to restrict the flow of competing products from other States. The debilitating effects of this protectionism on the States' economies convinced the framers of the U.S. Constitution to forbid individual
States from levying tariffs (and the Federal Government from levying
export duties). Federal courts have guarded the integrity of this prohibition, ruling as recently as 1981, for example, that a Louisiana tax
on natural gas passing through the State was unconstitutional. The
constitutional ban on State tariffs was crucial to the development of
the U.S. economy not only because it established a free-trade area
among the 13 original States, but also because it ensured that the
free-trade area would expand automatically as new States joined the
Union.
A second experience that illustrates the power of open markets is
Britain's movement toward freer trade in the middle of the 19th century. There are two salient features of this experience. First, Britain's
move was unilateral. The repeal of the Corn Laws by Robert Peel's
government in 1846 was not conditional upon "concessions" from
Britain's trading partners. Rather, the repeal was motivated by the
growing recognition that the tariffs on imported grain set by the
Corn Laws were a barrier to the advancement of Britain's own econ-




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omy. Second, the results of free trade were exactly opposite to predictions that a decline in the prices of imported grains from repeal of
the Corn Laws would lead to a corresponding decline in wages.
Rather than falling, however, wages rose rapidly due to growth.
Thus, Britain was very much an "engine of growth" in the 19th century world economy, and freer trade fueled the engine.
More recent experiences sustain the point. The slide of the world
economy into the Great Depression of the 1930s was accelerated by
unprecedented tariffs imposed by the Smoot-Hawley Act of 1930 and
by similar measures abroad. In response to such disastrous protectionism, the U.S. Secretary of State, Cordell Hull, organized passage
of the Trade Agreements Act of 1934, which became the basis for
multilateral trade liberalization. Further trade liberalization, however,
was delayed until after World War II. Significantly, 1984 marked the
50th anniversary of the Trade Agreements Act.
Since World War II, successive rounds of multilateral trade liberalization have demonstrated the power of open markets through
almost four decades of world economic growth. After full implementation of the current Tokyo Round tariff cuts in 1987, import tariffs
among major industrialized countries will average below 5 percent on
industrial products, down from averages of more than 50 percent at
their peak in the 1930s. These cuts have played a central role in the
post-World War II expansion of the world economy.
During the same period, the emergence and expansion of the European Community liberalized trade even further among Western
European countries. As the United States had done almost two centuries earlier, the members of the EC accelerated their economic
growth by establishing a large, relatively unrestricted common
market. The opening of the European market has been central to
Western Europe's economic growth.
A final illustration of the achievements of freer trade is particularly
important. As former colonies gained independence after World War
II, they typically sought to achieve economic independence as well.
Many embarked upon extensive import substitution policies to
reduce their dependence on imports from former colonial trading
partners. The overwhelming conclusion of studies of these policies,
however, is that they severely stunted economic growth. In contrast,
those developing countries that pursued more open economic policies have experienced truly remarkable records of economic growth.
Recent examples include Hong Kong, Singapore, Taiwan, and South
Korea, among others.
Acknowledging the record of free trade as a development strategy,
the President made the following commitment on his departure to




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the International Meeting on Cooperation and Development in
Cancun, Mexico in 1981:
"Free people build free markets that ignite dynamic development
for everyone. We will renew our commitment to strengthen and improve international trading, investment, and financial relations, and
we will work for more effective cooperation to help developing countries achieve greater self-sustaining growth.'*
The Myths of Protectionism

Despite the achievements of open markets, myths regarding the
benefits of protectionism persist. The most misleading of these, perhaps, is the claim that import restrictions save jobs at home. While
employment in one sector may be higher with protection than without, job losses in other sectors of the economy are often even larger
in the intermediate term and about the same magnitude in the longer
term. Thus, import restrictions have little or no effect on total employment, although they do distort the distribution of employment
among sectors. Moreover, estimates of the annual cost to consumers
of each job saved in protected sectors are as high as $250,000 for
some sectors. Finally, the influence of protection on employment in
an industry is usually small relative to other determinants, such as
the general prosperity of the economy or long-term trends in the
demand for the product.
A second myth is that protection can provide a breathing period
for an industry to modernize and to become more competitive. A related argument is that the protection permits a smooth "rundown" of
existing production in the industry. Most of the evidence on either
argument runs to the contrary. Although protection may increase resources for improving competitiveness, it also reduces pressure for
adjustment. Once protection is granted it is common for productivity
and unit costs to deteriorate even further relative to other industries.
Paradoxically, more recent forms of protection (in particular,
VRAs) help foreign producers by enabling them to charge higher
prices for the restricted exports. United States protection of steel in
the 1970s, for example, is estimated to have increased the annual
profits of Japanese steel producers by about $200 million—or about
half of the Japanese expenditure on research and development in
steel (the world's highest).
By the same token, protection does not simply facilitate a smooth
rundown of existing activity—it often frustrates adjustment by attracting new resources to the sector. In many countries a disproportionate amount of entrepreneurial activity is devoted to protected sectors. Fully one-third of all the clothing and textile establishments in
the United States at the end of 1982, for example, were not in the
industry just 6 years earlier, and more than one-fifth of all new man-




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ufacturing firms in France in recent years have been in the clothing
and textile industry. Thus, it is not surprising that the "temporary"
protection many industrial countries sought for textiles beginning in
the early 1960s has resulted in a formal, long-term policy of protection.
Another myth of protectionism is that protection is a "fairer**
policy than free trade for lower and middle income families. The
burden of protection, however, typically falls most heavily on lower
income consumers. The tariffs (explicit or implicit) embodied in U.S.
trade barriers are more regressive than any other major tax, including sales taxes. Trade restrictions in industrial countries are skewed
toward restriction of those basic, labor-intensive goods that comprise
a relatively large share of lower income budgets. In most industrialized countries, for example, the proportionate burden of restrictions
of textile imports on lower income consumers is several times greater
than on higher income consumers.
There is also the argument that the United States should restrict
the flow of imports to protect the economy from "unfairly** subsidized products from other countries. In many respects this argument,
too, is incorrect. Permanently subsidized exports to the United States
obviously make U.S. imports cheaper than they otherwise would be.
Thus, rather than being a "beggar-thy-neighbor** trading policy, such
subsidies are an "enrich-thy-neighbor" policy. Moreover, a State
within the United States is not permitted to restrict imports of goods
produced in other States that provide "unfair** tax subsidies.
There are two cases, however, in which this argument for restraint
can be correct. One is when the foreign subsidy is not permanent.
Countries might, for example, use subsidies to expand domestic production in some industries during the down period of a business
cycle. In this case the importing country suffers recurring adjustment
costs as its own domestic industry responds over the business cycle
to variations in the level of subsidized imports.
A second theoretical possibility is in those rare instances where oligopolistic profits might be large. A country could attempt to increase
its share of the potential oligopoly profits by subsidizing its own industry, either directly or indirectly. In both of these special cases,
however, the best solution is an international compact on acceptable
subsidization policies, rather than protectionism.
Another argument offered for protection is that the United States
must restrict imports in order to protect "basic** industries. Because
the U.S. economy has been characterized by certain industries since
the Great Depression, the argument runs, these same industries must
be protected from foreign competition to ensure continued economic
growth. This argument mistakes the prospects for continued vitality




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of the economy as a whole with the prospects of particular industries.
So-called "basic" industries can always be identified at a point in
time, but the hallmark of a dynamic economy is that basic industries
can change. Most importantly, there are numerous examples of countries that have failed with the strategy of propping up weak industries, with no apparent successes.
Finally, there are, of course, legitimate national security considerations in some industries, but import restraint is a particularly inefficient method of attempting to maintain some minimum level of
domestic capacity in an industry.
OBSTACLES TO COMPREHENSIVE FREE TRADE

Before concrete free-trade initiatives are proposed, the obstacles to
new international commitments to free trade should be clearly identified and understood, since initiatives that do not address the real obstacles to liberalization are doomed to failure. The following discussion of these obstacles focuses on several issues: the inertia of existing trade barriers and distortions, the appeal of new trade barriers,
the participation of developing countries in multilateral trade negotiations, and the presence of domestic policy constraints.
The Inertia of Existing Trade Barriers

Existing trade barriers carry a life of their own, as political inertia
works against their elimination. In heavily protected sectors, adjustment to liberalized trade is especially painful unless the overall economy is expanding. As a consequence, it is imperative that free-trade
initiatives be comprehensive enough to assure each country that at
least some sectors of its economy will expand rapidly enough to
cushion the adjustment of other sectors. Expanding sectors not only
often reduce the extent of the contraction in formerly protected sectors, but also provide new opportunities for any displaced workers
and resources. This strategy has worked reasonably well for the multilateral tariff reductions among industrial countries since World War
II, and should be a key element in any new initiatives.
The comprehensiveness of trade liberalization, however, is itself
threatened by extraordinary pressures to retain existing trade barriers. Remaining barriers have been revealed as those most difficult
to eliminate, since these are the restrictions that negotiators have
been forced to ignore. Nontariff barriers, in particular, pose difficult
problems. Quantitative restrictions, import licensing, exchange controls, technical standards misused to restrict trade, and the like, are
much more difficult to compare, to evaluate, and to negotiate than
tariffs. Without strong incentives on all sides to make mutual
progress toward free trade, negotiation of nontariff barriers can be
excruciatingly slow and tedious. A new, formal round of multilateral




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trade talks to deal with such barriers, for example, is expected by
some to take several years to complete successfully, if at all.
The difficulty of negotiating reductions in nontariff barriers is exacerbated by another standard feature of international trade negotiations. Existing trade restrictions are the bargaining chips a country
uses in international trade negotiations. Thus, countries are reluctant
to liberalize their own trading practices for fear that their ability to
obtain reciprocal liberalization from their trading partners will be reduced in the future. As a consequence, countries are in the paradoxical position of "needing" certain trade restrictions in order to eliminate others. To succeed fully, any new initiative must break through
this paradox.
The Appeal o/Neto Trade Barriers

Most countries are under strong domestic political pressure to aid
one or more ailing industries. Unfortunately, quantitative and other
nontariff trade barriers are becoming the policy of choice. The reasons are not complicated. Such measures are typically *'off-budget,"
so that no explicit governmental appropriation is required to subsidize the industry. They are also often extra-legal, falling outside
normal rules and restrictions of the General Agreement on Tariffs
and Trade (GATT), and requiring no formal legislative action. The
general political appeal of trade restrictions arises from the fact that
the benefits accrue to small, identifiable groups, whereas the costs,
although greater, are borne less visibly by society at large.
In addition, nontariff restrictions are sometimes welcomed by the
country's established trading partners. For example, VRAs transfer
implicit tax revenues from consumers in the importing country
(which would be collected domestically if tariffs were used instead) to
producers in the exporting countries (through the effect of restricted
sales on prices). Although some progress has been made in a few
areas in recent years, new international commitments that limit the
discretion of individual governments to maintain or impose nontariff
trade barriers are clearly needed.
Incentives for Developing Country Participation

Another serious obstacle to comprehensive trade liberalization is
the problem of encouraging the full participation of developing
countries. In previous multilateral rounds of liberalization, developing countries have not been required to reciprocate fully in multilateral tariff reductions by lowering their own trade barriers, and most
still maintain substantial levels of both tariff and nontariff trade barriers. These countries are unlikely to participate in further liberalization as long as key sectors in which they have a comparative advantage (especially textiles) are exempted from the liberalization process.




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Sustained progress in opening the capital and service markets of developing countries is not likely, for example, without accompanying
progress for these countries in opening world markets for their manufactured products. Furthermore, the current trade preference
schemes extended to developing countries by most industrialized
countries give these countries a vested interest in existing tariff barriers in industrialized countries, since the benefit their exporters
derive from the preference schemes depends upon the level of tariffs
levied on goods from competing exporters.
Domestic Policy and Institutional

Barriers

In some instances, trade restrictions simply reflect domestic policies. Nowhere is this more obvious than in agriculture. The absence
of strong international commitments to open markets in agriculture
has fostered the development of restrictive domestic policies by the
EC under the Common Agricultural Policy, by the United States and
other industrialized countries, and by developing countries. These
costly domestic policies require an increasingly elaborate array of
international restrictions on trade in agricultural products. Hence,
little progress on liberalized trade in agriculture can be expected
without reforms in related domestic policies. A country cannot, for
example, maintain a direct price support program for a domestic agricultural product that sets the price above the price of available imports without also imposing trade restrictions on imports either
through quotas or variable import levies. Otherwise, the domestic
price support would be an impossibly expensive world price support.
Domestic industrial policies can pose similar barriers. Tariffs, preferential procurement, direct subsidies, preferential credit arrangements, exclusive market rights, and the like, are examples of explicit
barriers to imports. Barriers can also be implicit, however. The complex and extensive relationship between the Japanese Ministry of
International Trade and Industry and major Japanese domestic industries is often cited as an example of this phenomenon. Moreover,
private Japanese trading companies distribute a substantial share of
imports at the same time that they have very strong ties with domestic manufacturers. In some instances these ties are reinforced by
shared equity or other financial interests. Not surprisingly, therefore,
trading companies do not typically market imported products that
compete with those produced by domestic manufacturers with whom
they already trade.
The emphasis on such institutional barriers to trade can sometimes
be misleading. When institutional and commercial practices are not
sustained by government policy, practices that violate the fundamentals of a competitive marketplace are subject to challenge by new entrants. This suggests that when no government trade restraints are




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present and no new entrants appear, existing practices may be efficient. Thus, the fundamental issue is whether and how governmental
policies are used to raise artificial barriers to entry. In some instances
the artificial barriers are direct and obvious (as in the official Japanese domestic monopoly in telecommunications—ostensibly to be
eliminated in 1985—or the high tariffs on wood products); in others
the barriers are less direct or obvious (as in the case of arbitrary
technical standards or rules regarding exclusive dealerships).
A STRATEGY FOR FREE TRADE

Despite the obstacles to free trade, there are several reasons to
push now for comprehensive trade liberalization. First, the trend
toward increasing protectionism at the national level may actually
help mobilize a consensus for a new international initiative toward
comprehensive free trade. Furthermore, recovery of the global economy presents the opportunity to resist protectionist pressures and to
reach just such a free-trade consensus.
There is also some evidence that many countries around the world
may be willing to consider domestic policies that emphasize open
markets, market incentives, and private control to a greater degree
than before: members of the EC are under increasing pressure to
find a less costly alternative to their current common agricultural
policy; the Administration will seek agricultural reforms in 1985 farm
legislation that will increase U.S. flexibility in negotiating freer trade
in agriculture; and many developing countries appear to be at least
more receptive to private, competitive markets. This possible change
in the world temperament toward open, market-oriented policies
poses the opportunity for successful new initiatives.
Finally, the President and the heads of government of major U.S.
trading partners have already agreed at the Williamsburg Economic
Summit to consultations on a new multilateral round of trade negotiations under the auspices of GATT. At the subsequent London
Summit they agreed to seek early agreement on a new round. A multilateral round of trade talks is the most effective vehicle for successful trade liberalization.
A New Round of Multilateral Trade Negotiations

To exploit present opportunities the United States must pursue decisive, extraordinarily disciplined policies. At the most general level,
a successful international strategy requires that the United States
push aggressively forward on comprehensive multilateral trade negotiations under the auspices of GATT. At a more concrete level, the
United States itself must be committed to comprehensive trade liberalization. In this context, comprehensiveness has several dimensions—products, factors of production, countries, and types of trade




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distortions, including VRAs and various preferential treatments of
domestic industry. Each of these dimensions is important to successful liberalization.
With regard to products, the United States should push especially
hard for liberalized trade in agriculture, services, telecommunications
equipment, advanced electronics, automobiles, textiles, wood products, and steel, to mention just some of the major problem areas.
The United States has much to gain from liberalizing these areas,
and developing countries in particular will have reduced incentives to
participate without the promise of liberalized textile trade. In the industries above where the United States has significant restrictions—
automobiles, steel, textiles, and agriculture—the costs of protection
are large. In agriculture, for example, the annual cost of restrictions
on sugar imports is estimated to be in excess of $3 billion, and the
consumer cost of import restrictions on dairy products is even
higher.
With regard to the various types of distortions, some progress has
been made in GATT in the areas of subsidies, government procurement practices, and other nontariff barriers, but a new U.S. initiative
at this time could accelerate and expand agreements in these and
other areas.
The Role of GATT

GATT was established in 1948 to foster liberalized trade and has
sponsored several successful rounds of multilateral trade negotiations. An effective GATT is essential to further liberalization and expansion of international trade. In particular, GATT obligations can
help to restrain protectionist trends around the world by providing a
source of external discipline to national policies. Just as the U.S.
Constitution puts interstate trading policy beyond the control of individual States, international commitments can constrain the use of tariffs and other major forms of nontariff barriers by individual countries. Moreover, because no policy is likely to be completely successful in this regard, an ambitious program of trade liberalization under
GATT auspices is needed to counter the inevitable individual lapses
into protectionism at the national level.
The objectives of U.S. policy toward GATT are to strengthen the
existing framework in the short term and to expand the scope of the
agreement in the longer term. To achieve these goals, the United
States supports the work program agreed to by the GATT Contracting Parties at the Ministerial meeting in 1982. Efforts to strengthen
and expand the existing framework include working parties on safeguards and structural adjustment, quantitative restrictions and other
nontariff measures, and dispute settlement procedures. The United
States supports the negotiation of an effective "safeguards" code that




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would discipline the use of temporary import restrictions as a
method of dealing with domestic industry adjustment to import competition. The continuing proliferation of quantitative and nontariff
restrictions on trade is also of major concern. The working party on
this issue has catalogued existing quantitative restrictions and other
nontariff measures and judged their consistency with GATT principles. This information should facilitate negotiations to eliminate the
restrictions, perhaps as part of the preparation for a new multilateral
round of trade negotiations. Finally, a major weakness of GATT is its
inability to resolve disputes effectively. A greater reliance on professional panelists to resolve disputes might lead to a more predictable
settlement process less subject to control by member countries. The
recommendations of the GATT Secretariat would improve the process of forming panels, as well as the implementation of panel recommendations.
The GATT Contracting Parties have discussed extension of the
GATT framework into agriculture, services, counterfeit goods (and
other issues of intellectual property rights), high-technology goods,
and textiles. In order to bring agriculture more fully under the rules
of GATT, the United States supports a reduction in quotas and licensing programs limiting agricultural imports and a general prohibition on export subsidies. The EC, however, opposes a general prohibition and believes that export subsidies should be permitted.
Although trade in services constitutes an increasing portion of
international trade, it too continues to remain outside the GATT
framework. Liberalization of trade in services has been slow due not
only to the complexity of the subject but also to intense opposition
in principle, especially among developing countries. The service industries in these countries are usually small, and the governments
argue that further growth of the industries would be impossible without restrictions on foreign competition. Despite such opposition, the
United States has recently persuaded other Contracting Parties to
consider the issue of services under GATT auspices.
Trade in counterfeit goods has increased noticeably in recent
years. In addition to the economic losses to trademark owners, trade
in counterfeit goods presents potential safety and health hazards to
consumers. The United States believes that GATT provides the best
forum for negotiating and implementing an agreement to handle this
problem and urges the formation of a working party on trade in
counterfeit goods. Developing countries have opposed such a working party on the grounds that GATT is an inappropriate forum.
Their underlying fear, however, is that developed countries will use
rules to restrict the trade of counterfeit goods as protectionist measures to limit imports of legitimate goods. GATT Contracting Parties




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agreed at the 1984 Ministerial meeting to establish an experts group
on intellectual property rights in general. The group will collect information on abuses and propose alternatives for action. As required
by the Trade and Tariff Act of 1984, the United States is also preparing a survey of problems around the world with intellectual property
rights.
In 1982 the United States proposed that GATT examine trade in
high-technology goods. As a result of opposition, the study was
transferred to the OECD. Two major findings have now emerged
from this study. First, open international markets are necessary to
capture fully the benefits of high-technology industries. Second, restrictive trade practices are increasing trade frictions in these industries. Major issues include the role of preferential public procurement (especially in telecommunications), the role of product standards, limiting the access of domestic firms to government sponsored
research, the influence of various types of government sponsored research and technology on commercial and industrial technology, and
the effect of government policies on investment.
Finally, textiles remain exempt from standard GATT rules. The
Multi-Fiber Arrangement, which establishes rules governing quotas
for textiles, is due to expire in July 1986. A working party is examining the possibility of bringing textile trade into the GATT framework, perhaps through the negotiations on renewal of the Multi-Fiber
Arrangement which begin in 1985. Textile restrictions began in the
early 1960s as a temporary expedient to give the textile industries in
the United States and other industrial countries time to adjust to increased foreign competition but, perhaps predictably, have evolved
into a more permanent obstacle to freer trade.
Secondary Strategies

A potential problem with multilateral negotiations is that they may
be stalled by a relatively small group of countries. If this occurs, the
United States and others may eventually be forced to resort to secondary strategies for liberalization. The new free-trade area (FTA)
negotiating authority given the President offers one possible option.
FTA negotiations (and less than fully multilateral negotiations in
general) tend to reverse the usual incentives in international trade
negotiations by making countries more eager to be among the first to
agree to liberalize trade rather than among the last. The incentives
for countries to be among the first to enter an FTA or a plurilateral
agreement with the United States could be strong. Because no duties
would be levied on intra-FTA exports of FTA members, the first entrants would enjoy substantial competitive advantages over outsiders
in the large U.S. domestic market, especially if highly restricted sectors were to be included in the FTA agreement. In addition, as the




125

number of countries joining an FTA grows, the incentives for outsiders to join increase, because unfavorable trade diversion increases
and the size of the non-FTA market decreases as the FTA expands.
One possible criticism of an FTA initiative is that it may appear to
some as a regression to narrow, bilateral trade negotiations. This
need not be the case. First, the possibility of an FTA strategy would
be considered only if multilateral negotiations stalled. Second, an
FTA initiative would not be the same as the narrow, complex trade
"haggling" characteristic of the 1930s because there are GATT criteria for permissible FTAs and plurilateral agreements. Third, an FTA
or plurilateral initiative would be as multilateral as the number of
countries that chose to join the agreement. There is nothing intrinsically bilateral about an FTA. Again any FTA initiative would at all
times be subordinated to resumed progress in multilateral trade negotiations.
Perhaps most importantly, however, the possibility of FTA or,
more broadly, plurilateral negotiations offers the United States and
others the option of using a free-trade instrument, rather than protectionism, as a lever against protectionist countries that are recalcitrant in fully multilateral negotiations. This distinction is important
because there are several fundamental difficulties with using trade
sanctions to persuade other countries to liberalize their trading practices. First, trade sanctions hurt the country that imposes them, in
some instances as much as, or more than, the foreign country.
Second, the foreign trading partner knows that this is the case. As a
consequence, threats of trade sanctions are often not credible. Then,
of course, there is always the additional threat of foreign retaliation.
In rare instances, however, the United States may be forced to use
trade sanctions to persuade a particular trading partner or a group of
trading partners to abandon especially restrictive trading practices.
Although such sanctions raise the danger of retaliation, there may be
isolated instances where this danger is minimal relative to potential
gains. However, sanctions should be used only in accordance with
clearly established rules, not as a pretext for protectionist actions.
Thus, threat of a sanction should always be accompanied both by an
unambiguous explanation of which trading practice the sanction is
aimed at eliminating and by credible assurances that sanctions will be
removed when the restrictive practice halts.
A sanction is more likely to succeed in an industry where the trading partner's exports to the U.S. market are more important to them
than they are to the United States. Thus, trade sanctions must be
carefully tailored to particular circumstances. A sanction appropriate
for one issue of concern to the United States, such as the use of concessionary loans to boost exports, may be inappropriate for other




126

issues of similar concern, such as preferential government procurement, infringements of intellectual property rights, or cyclically varying subsidies. One would also expect strategic sanctions to be used
only at the discretion of the highest policy levels of the government.
A Final Caveat
It is often assumed that opening markets abroad for U.S. exports
by reducing trade barriers will necessarily improve the fundamental
position of the U.S. current account deficit. This is not necessarily
the case. A country's current account balance is determined fundamentally by domestic investment and saving behavior (including government) relative to investment and saving behavior abroad. As
pointed out earlier, this is true because of two fundamental economic
relations. First, a current account deficit, for example, is necessarily
offset by a corresponding capital account surplus. Second, the capital
account surplus is identically equal to the excess of domestic investment over domestic saving (including government). Thus, changes in
trade barriers will affect the current account in a fundamental way
only to the extent that they change saving or investment. Accordingly, the use of the U.S. current account (either with the rest of the
world or with particular countries) as a measure of success in liberalizing trade is likely to lead to frustration. Comprehensive free trade
is a policy objective because of the proven benefits of open markets,
not because it will lead to a particular external balance.




127




CHAPTER 4

Health Status and Medical Care
IN 1965 THE U.S. CONGRESS enacted the medicare and medicaid programs. For the first time, the Federal Government made a
major commitment to finance the medical care needs of its elderly
and poor citizens. The purpose of medicare was to reduce the financial burden of illness on the elderly; the goal of medicaid was to improve the access of specific categories of the poor to medical care.
The price tag for meeting these objectives was not expected to be
great. The medicare hospital insurance program was expected to cost
the Federal Government $2.8 billion in its first year (in 1983 prices),
with growth to about $8.2 billion in 1983, according to Social Security Administration actuaries.
This estimate was wrong, massively so. Federal spending on medicare benefits reached $57.4 billion in 1983; spending for the hospital
portion of medicare in 1983 surpassed the original projection by
almost fourfold. Medicaid consumed an additional $34.0 billion in
1983.
Experience with medicare and medicaid vividly illustrates the dilemma of health insurance. The goal of health insurance is to reduce
the risk that consumers will face large out-of-pocket medical expenses. The means by which this is accomplished is for a third
party—sometimes the Federal Government—to pay a large share of
the bill. Individual consumers, however, tend to purchase more medical care when the price of additional care to them is reduced. Because of this additional demand, the cost of the insurance program is
driven up. Thus, the goal and the means of health insurance are in
conflict. How to resolve this conflict is the central problem of public
policy toward medical care.
Rising costs are not limited to public health insurance programs.
Most non-elderly people in the United States have private health insurance, usually provided as an employment-related fringe benefit.
The percent of gross payroll spent by employers for health benefits
has increased by as much as 50 percent from 1976 to 1983. The consequence of this increase is lower real wage increases for employees.
There is also widespread concern that the unit costs of medical
care are too high. The cost of a day in the hospital was $369 in 1983,




129

up from $41 in 1965 ($119 in 1983 prices), and the average cost per
hospital admission increased from $311 ($901 in 1983 prices) to
$2,789 over the same period.
Calls are heard to curb the increasing costs of medical care. Policymakers have an array of options, ranging from increased regulation
to unfettered competition, from which to choose.
Therefore, on the 20th anniversary of medicare and medicaid, it is
appropriate to review the present condition of public and private
health insurance programs in the United States. Positive steps can be
taken toward the goals of delivering appropriate medical care at reasonable prices. Policies must be chosen carefully, however, to promote consumers* incentives for healthy behavior, reasonable levels of
health insurance coverage, and careful use of medical care services.
Producers must also face incentives to deliver medical care services
efficiently at competitive prices.
HEALTH STATUS OF THE AMERICAN POPULATION
The life expectancy of Americans has improved steadily since
1900, when the average American could expect to live for 47.3 years.
At the turn of the century, females lived 2 years longer than males,
on average, and blacks lived 33.0 years, substantially fewer than the
47.6 years for whites. By 1982 the average life expectancy had increased to 74.5 years. The male-female gap had widened to 7.4 years,
but the black-white gap had narrowed to fewer than 6 years.
The factors mainly responsible for increases in life expectancy
during the first half of this century—improved sanitation, heating,
and other amenities, along with significant breakthroughs in immunization against communicable diseases—contributed most significantly
to the survival of infants and children. For adults over 65, life expectancy statistics show only modest gains during this period, from 11.9
years in 1900 to 13.9 years in 1950. As of 1982, however, the life
expectancy of older adults had increased to 16.8 years.
Increased life expectancy at older ages, along with declining birth
rates, has led to the well-known "graying" of America. The age distribution of the population has shifted markedly since 1950, when the
over-65 population represented 8.2 percent of the total population.
In 1983 the elderly accounted for 11.7 percent of the total population. Because the elderly spend about 3V2 times as much per capita
on medical care as do the non-elderly, population aging has profound implications for medical care spending. Greater demands are
placed on medicare and on that part of the medicaid program that
finances long-term care for the elderly poor.




130

Increasing life expectancy at older ages is evidence of improving
health status of the American population. Additional evidence is that
infant mortality rates and fetal death rates have fallen since 1950.
(Infant deaths occur within the first year of life; fetal deaths are the
deaths of fetuses of 20 weeks or more gestation.) Large declines have
occurred for both blacks and whites. However, in 1981 (the latest
year for which data are available) the infant and fetal death rates for
blacks remained substantially above those for whites.
Between infancy and age 65, there are distinct differences in the
causes of death by age, sex, and race. The leading cause of death for
whites and blacks of both sexes below the age of 15 is accidents. In
fact, accidents are the leading cause of death below the age of 45.
From ages 15 to 24, accidents are the leading cause of death for
whites, whereas homicide is the leading cause of death for blacks.
Cancer is the leading cause of death for black females between the
ages of 25 and 44 and for white females between the ages of 25 and
64. After age 65, heart disease is the major cause of death.
The dominant role of accidents and homicides makes clear that behavioral factors play an extremely important role in mortality. Moreover, because many of these deaths occur at early ages, accidents and
homicides have a disproportionate effect on life expectancy at birth.
Other than through mortality statistics, there are problems in
measuring the public's health status. For example, people's willingness to report certain nonfatal diseases may change over time. The
health status indicators must also be adjusted for the age distribution
of the population, because the population is aging and many diseases
appear more frequently among the elderly.
Even with these qualifications in mind, it is useful to examine
trends in the self-reported health status of the American population
from nationwide surveys of households. One measure of health status
is "restricted activity days," which are days that a person cuts down
on his or her usual activities because of illness or injury that occurred
during the 2 weeks prior to the survey. A day spent in bed at home
or in the hospital ("bed-disability day") is, of course, a restricted activity day.
Surveys indicate that the number of restricted activity days decreased among all age groups from 1957 until the middle or end of
the 1960s, after which the trend has reversed. The number of beddisability days per person fell during the late 1950s and early 1960s
and has remained roughly constant since then. Some increase occurred within the 45-to-64 age group.
Another health status indicator is limitations of activity caused by
chronic conditions that began more than 3 months prior to the
survey. A striking trend emerges: the proportion of males aged 45 to




131

64 who were unable to perform their major activity increased from
7.2 percent of that age group in 1969 to 11.5 percent in 1981. Smaller, but very noticeable increases are shown for this activity limitation
among other males and females aged 45 to 64.
Trends in reported activity limitations may be explained, in part,
by the expansion of disability cash benefits and of the number of
beneficiaries. Between 1965 and 1975, cash payments to disabled
persons increased from $9.7 billion ($28.1 billion in 1983 prices), or
1.1 percent of gross national product (GNP), to $33.9 billion ($58.0
billion in 1983 prices), or 2.2 percent of GNP. During the same
period, the number of social security disability insurance beneficiaries
grew by 150 percent while the covered work force grew by only 55
percent. It appears that persons with chronic conditions can, in
recent years, leave the work force with greater disability benefits,
whereas earlier they might have continued to work. Changes in mortality patterns may also partly explain increases in activity limitations.
As mortality rates drop, some people who live longer have chronic
diseases that cause disability.
TRENDS IN MEDICAL CARE SPENDING AND USE
In 1983 Americans spent $355.4 billion on medical care. Table 4-1
shows that hospital care accounted for 47.0 percent of "personal
health care spending" (a category that includes most payments to
medical care providers) in 1983. Following hospital care in importance were physicians' services and nursing homes with 22.0 and 9.2
percent, respectively, of personal health care spending.
Fifty-five percent of the money spent on medical care comes from
private funds paid directly by consumers and by private insurers. Of
the private funds, insurance is the dominant mode of paying for hospital services and, to a lesser extent, for physicians* services. Consumers pay for most drugs and dental services out of their own pockets. Private insurance provides little coverage for nursing home care.
Government funds constituted 41.9 percent of total medical care
spending in 1983, of which the Federal Government contributed 69.0
percent. Federal spending dominated that of State and local governments in most personal health care categories and in medical research, while State and local governments were dominant in expenditures for construction and public health activities.
The percentage of medical care spending devoted to hospital and
nursing home care has risen. This trend has implications for how
these services are financed. Hospital and nursing home care occur infrequently and are expensive; both considerations tend to increase
consumers' demands for third-party reimbursement. Thus, it is not




132

TABLE 4-1.—National health expenditures by type of expenditure and source of funds, 1983
[Billions of dollars]
Government funds

Private funds
Type of expenditure

Consumer
Total

Total

Direct
payment

Total

Private
insurance

Other'

Total

Federal

State
and
local

TOTAL

355.4

206.6

195.7

85.2

110.5

10.9

148.8

102.7

46.1

Health services and supplies

340.1

199.8

195.7

85.2

110.5

4.1

140.3

96.8

43.5

313.3

188.8

185.2

85.2

100.0

3.7

124.5

93.0

31.5

147.2
69.0
21.8

68.8
49.7
21.2

67.3
49.7
21.2

11.1
19.6
13.9

56.2
30.1
7.4

1.5
<*)

78.4
19.3
.6

60.6
15.6
.3

17.8
3.7

.1

Personal health care
Hospital care
Physicians' services....
Dentists' services
Other professional
services
Drugs and medical
sundries
Eyeglasses and
appliances
Nursing home care
Other personal
health care
Program administration
and net cost of private
health insurance
Government public health
activities
Research and construction of
medical facilities
Research 3
Construction

5.5

3.3

2.1

21.6

18.4

5.2
14.9

5.2
14.7

4.5
14.4

.7
.3

1.9

.5

1.1

1.1

"2

1.0
14.0

.9
8.1

&9

6.6

4.5

2.1

.3

4.6

2.6

2.0

1.2

10.0

3.2

6.2
28.8
8.5

2.5

11.2

5.6
21.6

2,1

1.8

8.0
23.7

1.8
10.5

15.6

10.5

10.9
112
15.3

6.8

6.8

8.4

5.9

2.6

6.2
9.1

.4
6.5

,4
6.5

5.8
2.6

5.2

.6
2.0

1
Spending by philanthropic organizations, industrial in-plant health services, and construction financed privately.
* less than $100 million.
3
Research and development expenditures of drug companies and other manufacturers and providers of medical equ iment and
supplies are excluded from "research," as the value of their research is included in the expenditure class in which 1e product
falls.
Source: Department of Health and Human Services, Health Care Financing Administration.

surprising that third-party payments increased from 67.3 percent of
hospital care and nursing home spending in 1950 to 85.6 percent in
1983.
Another trend has been an increase in the Federal share of personal health care spending from 3.4 percent in 1935 to 29.7 percent in
1983. The largest portion of this increase occurred between 1965
and 1970 and was accompanied by a fall in the share of private sector
payments. This drop appeared almost entirely as a decline in consumer direct payments.
Table 4-2 shows aggregate and per capita trends in medical care
spending from 1965 to 1983. In 1965 Americans spent $207 per
capita ($599 in 1983 prices) on medical care. Total medical care
spending in that year accounted for 6.1 percent of GNP. By 1983
medical care spending had grown to $1,459 per person. Despite an
expansion in the economy during this period, medical care spending
consumed an increasingly large share of GNP, reaching 10.8 percent
in 1983.




133

TABLE 4-2.—National health expenditures, by source of funds and as percent of gross national
product, selected years, 1965-83
J
'rivate funds

Total
Year

Amount (dollars)
Total
(billions)

Per
capita

Percent
ofGNP

Amount (dollars)
Total
(billions)

Per
capita

Government funds
Percent
of total

Amount (dollars)
Total
(billions)

Per
capita

Percent
of total

1965

41.9

207

6.1

30.9

152

73.8

11.0

54

26.2

1970

75.0

350

7.6

47.2

221

63.0

27.8

130

37.0
42.5

1975

132.7

590

8.6

76.3

340

57.5

56.4

251

1980

248.0

1,049

9.4

142.2

601

57.3

105.8

448

42.7

1981
1982
1983

2858
322.3
355.4

1,197
1,337
1,459

97
10.5
10.8

164 2
186.5
206.6

688
774
848

57 4
57.9
58.1

1217
135.8
148.8

510
564
611

426
42.1
41.9

Note.—Per capita amounts are based on July 1 Social Security Area population estimates, which include the resident U.S.
population and that of the outlying territories, plus Federal military and civilian employees and their dependents overseas, plus
an estimate of the census undercount.
Source: Department of Health and Human Services, Health Care Financing Administration.

Neither the level nor the rate of increase in medical care spending
in the United States is unique compared with other industrialized
countries. For example, Sweden spent 8.7 percent of its GNP on
medical care in 1975 and 9.7 percent in 1980. Comparable figures
for the United States are 8.6 percent in 1975 and 9.4 percent in
1980. Other countries have attempted, for the most part unsuccessfully, to control medical care spending by regulation rather than
through market forces. One exception appears to be the United
Kingdom, where strict central controls have limited medical care
spending to 5.6 percent of GNP in 1975 and 5.8 percent in 1980.
This apparent success masks major costs not measured in the GNP
data, however. For example, consumers in the United Kingdom's national health system face long waiting times for nonemergency hospitalization.
FACTORS RESPONSIBLE FOR RISING MEDICAL CARE EXPENDITURES

The factors responsible for rising medical care expenditures can be
attributed either to changes in price or in quantity. Price changes can
be subdivided further into general inflation and increases unique to
the medical sector. Quantity changes can be partitioned into three
elements: changes in population, in quantity per capita, and in the
nature of services provided per visit or per admission.
General inflation (measured by changes in the GNP implicit price
deflator) accounted for 51.7 percent of the rise in hospital inpatient
spending between 1971 and 1981. The remaining sources of increased hospital spending were increases in hospital input prices in
excess of increases in the GNP deflator, 11.7 percent; population
growth, 7.2 percent; growth in admissions per capita, 8.6 percent;
and growth in real expenses per admission, 20.8 percent. Real ex-




134

penses per admission are a proxy, albeit an imperfect one, for
changes in the nature of hospital care.
The share of hospital spending growth attributable to rising real
expenses per admission increased to approximately 39.4 percent
from 1981 to 1982 and 46.1 percent from 1982 to 1983. Those increases occurred at a time of lower general inflation and flat or declining demand for hospital admissions. Real spending growth per
admission fell back to 26.7 percent of hospital spending growth in
the first 6 months of 1984, compared with the same period in 1983.
This rate remains above the average rate from 1971 to 1981.
General inflation caused 58 percent of the increase in expenditures
for physicians' services from 1971 to 1981. Other causes were the
price index for physicians' fees in excess of the GNP deflator, 10 percent; visits, 5 percent; and real expenses per visit, 27 percent.
Some analysts have emphasized the fact that general inflation
caused most of the growth in medical care spending. Although technically correct, this view is seriously misleading. If spending grew
only 2 percentage points faster than inflation, real expenses per unit
of service would quadruple during the average person's lifetime, with
other factors being constant.
The significance of these numbers is that the extraordinary increase in medical care expenditures results largely from changes in
the nature of the product: the scope, the complexity, and hence, the
prices of medical care products have risen in relation to those of
other industries. In the hospital sector, this trend reflects the growing number of hospitals that provide highly specialized services. In
the physicians' services sector, the volumes of out-of-hospital laboratory tests and surgical procedures have been growing much faster
than the number of physicians* visits.
TRENDS IN USE OF MEDICAL CARE SERVICES

Significant trends have occurred since 1964 in the use of particular
medical services by different demographic groups. Hospital days of
care fell from 1964 to 1981 for younger age groups, but rose for
older people, especially those over 65. This latter increase may be
attributed, in part, to the medicare program, which has provided hospital insurance coverage for the elderly since 1966.
In 1964 poor people (family income under $2,000) had the lowest
rate of physicians* visits. Poor people (family income less then $5,000
in 1976 and less than $7,000 in 1981) had the highest rate of physicians' visits in 1976 and 1981. The hospital discharge rate among
poor people increased, while discharge rates among other income
groups fell. These trends may be attributed, in part, to a variety of




135

Federal programs, including medicaid, which have improved the
access of poor people to physicians and hospitals.
DOES MORE MEDICAL CARE PRODUCE BETTER HEALTH?
Trends in medical care spending parallel improvements in some
measures of health status in the United States. It would seem natural,
then, to assume that more medical care produces better health.
Spending some amount of money on medical care is indisputably
worthwhile. But this does not imply that, beyond some point, spending more money on medical care necessarily leads to further improvements in health.
Statistical studies, for the most part, indicate that differences in
mortality and sickness among States or regions in the United States
cannot be explained by differences in the distribution of medical care
resources. One such study examined the relationship between an
area's medical resources and physiological measures of health. In the
context of the health conditions and levels of resources considered, it
was found that additional medical resources made little or no contribution to a person's health.
The strongest evidence that an across-the-board increase in medical care use will not improve the health of the average person comes
from the RAND Corporation health insurance experiment. About
4,000 nondisabled people between the ages of 14 and 61 were randomly assigned to insurance plans for 3 or 5 years. One plan provided free care; the others required enrollees to pay a share of their
medical bills. The experiment showed that when cost-sharing was
higher, visits to physicians and adult hospitalizations were fewer.
However, the only statistically significant positive health effect of free
care for the average participant was for corrected vision. Other measures of health were similar among the cost-sharing groups and the
free care group.
Numerous studies of Health Maintenance Organizations (HMOs),
which are prepaid medical care plans, also show that more medical
care does not necessarily lead to better health. Prepayment gives
physicians an incentive to practice conservative styles of medicine. As
a result, enrollees in prepaid plans use up to 40 percent fewer hospital days than enrollees in fee-for-service health insurance plans.
There is no evidence that the conservative style of medical care in
prepaid plans is inferior to that in the fee-for-service sector.
Additional spending for some types of medical care makes a significant positive contribution to health. Research conducted in the
United States and other countries has shown that hypertension (high
blood pressure) can be controlled by appropriate treatment. This




136

result is significant because hypertension is a key risk factor in cardiovascular disease, which accounted for approximately half of all
U.S. deaths in 1980. Other studies have shown that hypertension
control has improved significantly in recent years. Improved rates of
hypertension control have been cited as a factor responsible for the
dramatic decline in age-adjusted death rates for heart disease, which
fell from 253.6 per 100,000 population in 1970 to 188.5 in 1983.
Evidence that poor people with hypertension can benefit from free
medical care comes from a "natural experiment*' in which some
adults were terminated from the California medicaid program in
1982. Blood pressure levels among terminated people with hypertension increased significantly during the 6-month study period, compared with a control group. The RAND health insurance experiment
also found that poor people with high risk of hypertension benefited
from free medical care.
A growing consensus also suggests that infant and prenatal care
can improve health outcomes. One study showed that neonatal death
rates (deaths of infants in the first 28 days of life) were reduced by
the medicaid program. Another study found that women who seek
medical care earlier during pregnancy are less likely to deliver infants
with low birthweights. This finding is significant because women covered by medicaid tend to seek medical care earlier than those with no
insurance coverage.
Evidence from these studies, taken together, points to the following conclusion. An across-the-board increase in medical care spending does not appear to be justified. However, additional medical
intervention does produce positive benefits for some conditions and
at-risk populations.
THE EFFECTS OF LIFESTYLE ON HEALTH
If the effectiveness of additional medical care in producing better
health is questionable, the opposite can be said about the importance
of lifestyle factors such as smoking, consumption of alcohol, and diet.
Studies of middle-aged men have identified three risk factors—smoking, cholesterol, and blood pressure—as the major determinants of
the risk of death from any cause. These factors are all influenced by a
person's lifestyle.
A number of investigators have estimated that 30 percent, or more,
of coronary heart disease deaths can be attributed to cigarette smoking. Smoking is the major single cause of cancer deaths in the United
States, and it is a contributing factor to deaths from stroke and emphysema. In fact, the U.S. Surgeon General calls it "the chief, single
avoidable cause of death in our society, and the most important




137

public health problem of our time.1* The total annual U.S. mortality
from smoking is estimated to exceed the number of Americans killed
in battle during World War II.
According to one estimate, the total direct medical care cost of
smoking was $12.8 billion in 1972 (using 1983 prices). The discounted value of lost earnings attributable to sickness or death related to
smoking was $31.1 billion. The total cost for smoking-induced illness
represented 10.9 percent of all medical care costs in 1972. Focusing
on the smoking-induced direct costs of cancer, there was a marked
increase from 1972 to 1980—from $1.67 billion to $3.15 billion (in
1983 prices).
Alcohol abuse also imposes enormous costs. Direct medical care
costs attributable to alcohol abuse were estimated to be $18.6 billion
in 1971 (1983 prices); discounted costs of lost production from this
cause were $33.4 billion. Alcohol abuse also contributed to motor vehicle accident losses of $10.5 billion and violent crimes that cost $3.3
billion.
PUBLIC POLICY TO ENCOURAGE HEALTHY BEHAVIOR

Evidence shows that people can improve their health if they adopt
healthy lifestyles. It would be inappropriate, however, to conclude
from this evidence that government policy should attempt to promote healthy behavior. The legitimacy of public action rests on a
finding that private markets do not provide incentives for individuals
to adopt healthy behavior in appropriate situations. This may occur if
consumers do not have access to relevant information or if there are
externalities. In the first case, the government has a legitimate role in
providing information, but the case of externalities is more complicated.
Negative externalities arise if the behavior of one individual imposes costs on other individuals. An example is unsafe driving, which
leads to accidents that may involve other people. Cigarette smoking
is another example, in which the behavior of individual smokers creates negative externalities through smoke pollution.
These negative externalities can be affected by taxing the products
that cause them. For example, the Federal excise tax on distilled spirits will be raised from $10.50 per proof gallon (64 ounces of ethanol)
to $12.50 on October 1, 1985. The Federal excise tax per package of
cigarettes was raised from 8 to 16 cents by the Tax Equity and Fiscal
Responsibility Act of 1982. This provision is due to expire later this
year when the Federal cigarette tax will revert to its old level. Several
studies have shown that consumption of alcoholic beverages and
cigarettes falls if the prices of these products are increased by an
excise tax.




138

The problem of externalities is sharply distinct from the problem
of costs imposed on the smoker by his or her own behavior. These
costs affect other people if the smoker's health insurance premium is
not increased to reflect the expected additional health costs of smoking. Some individual insurance policies currently practice risk-rating
for poor health habits. In one instance the insurance company gives a
10 percent discount to individuals who report that they do not
smoke. Automobile insurance policies use age, sex, and previous accident history, among other factors, to distinguish among risks. Similar rating methods might be applied to the health costs of alcohol.
The role of the Federal Government in this area should be to
ensure that legal barriers are not imposed to restrict the ability of
private insurers to distinguish among risks. In one instance an active
policy may be appropriate. This concerns premiums for enrollees in
the Federal Employees Health Benefits Plan, the Nation's largest,
with approximately 9.2 million enrollees and dependents. The premium for this health insurance plan might be adjusted to reflect the
excess health costs attributable to smoking and drinking.
HEALTH INSURANCE AND MEDICAL CARE COSTS
Studies suggesting that an increase in medical care use would do
little to improve the health of the average person might justify some
concern that rapidly rising medical care costs are "excessive," but
they could hardly explain the widespread belief among both analysts
and policymakers that the medical care system is in a state of distress.
In other industries the principle of consumer sovereignty is generally
the best guide to determine how many resources should be allocated
to the industry. Why doesn't this principle apply to the medical care
industry?
Medical care is different from other major industries because only
about one-quarter of the cost of medical care is paid directly by consumers. The remainder, excluding a small percentage of philanthropy, is paid by public and private health insurance programs. Private
health insurance arose because consumers of medical care are generally uncertain about when they are going to require medical attention. This uncertainty and the expensive nature of medical care
create a large degree of risk. In order to eliminate much of this risk,
consumers buy insurance for their medical care needs. By paying a
fixed amount each month, consumers protect themselves from large
medical costs.
Thus, health insurance serves a useful function in the economy.
However, the benefits of health insurance can be offset if the policy
premium is not based on expected medical care costs incurred under




139

the policy by specific risk classses of consumers. If premiums are not
risk-rated, then the costs of each individual's behavior are spread
throughout the insurance pool and are negligible to the individual.
Because the benefits of using more medical care, however slight,
accrue to the individual, each person will have little incentive to use
medical services carefully and to buy services from the most costeffective providers.
Perfect risk-rating for every individual would be exceedingly complex. Nevertheless, certain observable characteristics—such as smoking—can be used to distinguish among health risks for the purposes
of determining health insurance premiums. To the extent that such
practices are not followed, the distorting effect of health insurance
on individual choice is magnified by another feature of the health insurance policy. Policies that subsidize the cost of additional services
or more expensive services will increase the consumer's incentives to
use medical care without regard to costs. Because many policies provide such arrangements, including free care at the point of purchase,
the undesirable effects of imperfect risk-rating are magnified. Moreover, the subsidy for additional services reduces providers' incentives
to hold down their prices and to control the complexity of their
products. Price increases make it more difficult for uninsured consumers to purchase medical care and may explain, in part, why public
insurance programs have arisen.
Numerous studies, conducted in the 1960s and 1970s, showed that
demand for medical care services is directly related to the level of
health insurance coverage. Data sources for these studies were regional (often statewide) aggregates, individual consumer data collected by surveys, and several "natural experiments" in which the level
of cost-sharing was changed for a particular group of consumers. All
of these studies showed that total medical expenditure per capita was
greater when cost-sharing was lower, although estimates differed
among studies.
Reliable estimates of the impact of insurance on demand for medical care services have been provided by the RAND health insurance
experiment. Interim results from the RAND experiment show that
total medical expenditure per capita rises steadily as the fraction of
the bill paid by the family falls. Controlling for other determinants of
medical care spending, individuals with full insurance coverage spent
approximately 50 percent more than individuals in families that paid
95 percent of the bill.
Individuals with health insurance may choose more expensive providers than those without insurance, either because the insured individual demands more complex services or devotes less time to
searching for cost-effective providers. One study using 1963 data




140

suggested that complete insurance coverage would raise the hospital
room and board price by 23 percent and the price of the physician
selected by 18 percent, compared with the prices of hospitals and
physicians chosen by persons with no insurance. This finding has not
been substantiated by experimental data, however.
Several studies have shown that physicians' styles of practice are
related to the average level of health insurance coverage. In one instance, it was found that more extensive insurance coverage may lead
physicians to provide more services per visit or to itemize charges
that were previously included in a single professional fee. Another
study calculated that insurance was responsible for more than half of
the rise in hospital prices from 1958 through 1967. This contrasts
with general inflation, which accounted for only 10 percent of the increase.
Current insurance policies leave the consumer little or no incentive
to find cost-effective suppliers. Nearly 100 percent insurance coverage weakens the concept of a competitive medical care market. Such
high levels of insurance permit hospital prices to rise much faster
than prices in less insured markets for drugs and dental and physician services. This suggests that health insurance creates a "vicious
cycle" in which insurance drives up prices, causing consumers to
demand more insurance to protect themselves against large health
care bills, which leads to further price increases.
Finally, the purchase of health insurance is heavily subsidized by
the tax system. Even if perfect risk-rating were achieved and the use
of additional services were not encouraged by the insurance policy,
the tax subsidy would be a subject of public policy concern.
THE TAX SUBSIDY FOR PRIVATE HEALTH INSURANCE

Private health insurance is a relatively recent phenomenon in the
United States. Prior to World War II the vast bulk of the population
did not have such protection. However, in the 1940s and 1950s the
spread of employment-related health insurance was given special impetus after the Internal Revenue Service ruled that employer health
insurance contributions were excluded from the wage base for determining income and social security taxes. Recent estimates indicate
that about 82 percent of the population has private health insurance
and 85 percent of private health insurance is employment-related.
The tax exclusion can be viewed as a special Federal subsidy for
the purchase of employment-related health insurance. From this perspective, the exclusion reduces the price of insurance to employed
consumers and thereby provides an incentive for employees to purchase more health insurance than they would if they were using taxable income.




141

Several studies have used various measures of the tax subsidy to
obtain estimates of the responsiveness of the demand for health insurance to price changes. All have concluded that the demand for
health insurance would fall if the tax subsidy were reduced.
REFORMING THE TAX TREATMENT OF HEALTH INSURANCE BENEFITS

Several policies have been proposed to reform the tax treatment of
health insurance benefits. One proposed by the Administration in
1983, and included in the Treasury Department's 1984 tax proposal,
would limit tax-free health benefits paid by an employer to $175 per
month for a family plan and $70 per month for individual coverage.
These limits would be indexed to increase yearly in proportion to the
rise in the consumer price index.
Some employers with contributions over these limits would reduce
their contribution to health benefits and increase cash wages or other
benefits. Employers might also offer employees a choice of health
care plans, with some of the plans having premiums below the limit.
Both of these strategies would affect total health insurance premiums
and, therefore, medical care costs. In addition, there would be a revenue effect. The Treasury Department estimates that a tax cap imposed on January 1, 1987, would produce approximately $11 billion
in additional income and payroll taxes in fiscal 1988.
The tax cap proposal might also improve the efficiency of the
group health insurance market by encouraging employers to make a
fixed contribution to the health insurance premium. One study
showed that companies currently following this policy have lower
premium costs than companies that contribute a level percent (including 100 percent) toward the health insurance premium. This evidence implies a more careful plan choice by employees who have to
pay for additional premium costs out of their own pocket.
INDEMNITY INSURANCE AND PREFERRED PROVIDER ORGANIZATIONS

Even if the tax subsidy for health insurance were reduced or eliminated, health insurance would have a distorting effect on medical
care markets, as long as the insurance policy subsidizes the costs of
additional medical services. Most health insurance policies currently
incorporate this undesirable feature. However, some insurers and
self-insured employers are experimenting with indemnity insurance,
in which the insurance company makes a fixed payment per unit of
care. An indemnity payment provides protection against risk without
encouraging the consumer to choose expensive providers. The
reason is that the cost of services in excess of the indemnity is paid
entirely by the consumer.




142

Ideally, indemnity payments would be based on episodes of illness,
rather than units of medical care. This system would reduce the tendency of insured consumers to use additional services as well as to
choose expensive providers. However, the difficulty of defining illness might make an ideal system exceedingly complex. Therefore, indemnity payments based on units of care may represent an acceptable, albeit imperfect, alternative.
Private indemnity plans typically allow providers to bill consumers
for amounts above the indemnity. However, some insurers have expressed an interest in establishing agreements with providers who
will accept the indemnity as payment in full. The insurer would channel patients to these providers. This is the basis of the preferred provider organizations that are springing up around the country in increasing numbers. A preferred provider organization represents a
method for determining the insurer's indemnity payment at a level
equal to the full-billed charge of the low-priced providers. In practice, other criteria, such as quality, can also be used to select the preferred providers.
Many employers have expressed an interest in the preferred provider organization concept as a means to control their soaring health
benefit costs. The major barrier to the development of preferred
provider organizations appears to be restrictive State insurance laws.
Fortunately, a number of States have passed enabling legislation that
permits the development of preferred provider organizations.
PUBLIC POLICY TOWARD DISCOUNTS

Although the basic preferred provider organization concept does
not involve a discount, i.e., payment less than the hospital's fullbilled charge, many insurers are attempting to negotiate discounts as
part of the preferred provider organization arrangement. If successful, they will join some of the Nation's 90 Blue Cross and Blue Shield
plans, which have already obtained discounts from hospitals. Many
HMOs have also negotiated hospital discounts.
These discounts have become an important public policy issue for
two reasons. First, hospitals claim that discounts force them to shift
costs by raising charges to other insurers. This has led to suggestions
that discounts be banned in favor of so-called all-payers rates, where
all insurers would pay equal rates. Second, some critics have claimed
that the size of the Blue Cross discount appears to be related to, and
is perhaps a consequence of, Blue Cross' relatively large market
share. Noting this relation, the less concentrated commercial insurance industry has sought unsuccessfully to obtain relief from antitrust
laws that prohibit joint insurance company negotiations with hospitals.




143

There is little economic justification for banning discounts. Allpayers rates would reduce the competitive pressure on both insurers
and hospitals to control costs. If third-party payers can negotiate discounts, the whole system may benefit. The reason is that when one
insurer negotiates a discount, cost-shifting is not the only possible
outcome. The discount may also reduce the hospital's net operating
margin; the hospital's operating efficiency may improve; and the level
of real expenses per admission may fall. All of these outcomes might
be viewed as positive responses. In particular, because hospital costs
are artificially inflated by insurance, some reduction in real expenses
per admission may be desirable.
This does not imply, however, that commercial insurers should be
encouraged to negotiate together for a discount. In the first place, a
large market share is not necessary in order to negotiate a discount.
Many HMOs recently have negotiated hospital discounts even though
their market shares are small relative to that of Blue Cross. Second,
any insurer, regardless of its size, can form a preferred provider organization. Through the preferred provider organization, the insurer
can selectively determine its payments to hospitals so that hospitals
with excessively high costs will lose customers in the marketplace.
Third, giving the Federal Government's blessing to countervailing
market power sets a dangerous precedent. Countervailing power arguments could, for example, be used by hospitals seeking to band together to escape relief from legitimate but vigorous price pressure
from the insurance industry.
The large market shares commanded by Blue Cross plans are most
probably not attributable to anticompetitive conduct by those plans.
State insurance laws usually exempt Blue Cross* policyholders from
State taxes on insurance premiums. These taxes generally range from
2 to 4 percent of premiums. This gives Blue Cross a competitive advantage over its commercial rivals. Two empirical estimates suggest
that differences in premium tax rates may contribute to Blue Cross*
market share.
Several studies have indicated that Blue Cross plans with premium
tax advantages have relatively high administrative costs and exhibit
other characteristics indicative of poor market performance. Although insurance regulation is a matter best left to the States, these
studies suggest that competition among health insurers might be promoted if tax advantages favoring Blue Cross were reconsidered by
the States.
THE ROLE OF INFORMATION IN MEDICAL CARE MARKETS

Most experts agree that, for the medical care market to function
properly, consumers must have the right incentives and they must be




144

informed about the available choices. Critics of pro-competition medical care proposals often point to consumer information as the weak
link in the proposal.
Such objections miss the point that a competitive medical care
system would tend to produce more reliable information than the
present one. For example, only 29 percent of the participants in the
RAND health insurance experiment realized that the following statement is false: "If you have to go into the hospital, your doctor can
get you into any hospital you prefer." When the same statement was
presented to a group of more than 5,000 employees in Minneapolis,
where many employees have a choice among competing HMOs, researchers found a significantly higher percentage of correct answers.
This suggests that consumers in Minneapolis are aware that choosing
a closed-group HMO limits one's ability to choose any hospital.
One area where information is currently poor concerns the prices
charged by different providers. Inadequate price information is, to a
large extent, a wound that the health care system has inflicted on
itself. Most price advertising of medical services has been banned by
State laws or regulations, as a result of organized medicine's determined effort to ban such advertising. Evidence shows that bans on
advertising have raised the prices of eyeglasses, eye examinations,
and prescription drugs. Recent court rulings, however, have substantially lifted these prohibitions.
It should also be pointed out that not all consumers have to be
perfectly informed for markets to function effectively. If enough
people are well informed, the remainder can judge medical care quality by observing price differences in the market.
Finally, the problems of weak incentives and poor information are
related: When consumers have complete insurance, they have little
reason to shop for low-priced providers and, thus, they will be poorly
informed about medical care prices. This point is substantiated by a
survey of individuals regarding their health insurance premiums.
People with nongroup insurance coverage were more likely than
those with group insurance to respond correctly that they paid outof-pocket premiums. This occurs because nongroup policyowners are
more likely to purchase the health insurance policy themselves; thus,
they have a stronger incentive to learn about the price of the policy.
MEDICARE: PUBLIC HEALTH INSURANCE FOR THE ELDERLY
In 1983, spending for the medicare program benefits was $57.4
billion. This represented 46 percent of government personal health
care spending in 1983 (Table 4-3). Medicare has expanded at a rapid
rate since 1967, when it consumed $4.5 billion ($12.3 billion in 1983
prices).




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TABLE 4-3.—Sources of funds for personal health care expenses, selected years, 1950-83
[Billions of dollars]

Government funds

f>rlvate funds

Year

Total

Direct
payment

Private
insurance

Medicare

Other

Medicaid 1

Other
2.4

1950

10.9

•7.1

0.9

0.3

1960

23.7

13.0

5.0

.5

5.2

1965

35.9

18.5

8.7

.8

7.9
10.1

1970

65.4

26.5

15.3

1.1

1975

117.1

38.0

31.2

1.6

15,6

13.5

17.2

1980
1981...
1982
1983

219.1
253 4
284 7
313.3

62.5
70 8
77.2
85.2

67 3
78 8
90 8
100.0

2.6

35.7
43 5
51.1
57.4

25.2
29.0
31.3
34.0

25.8

30
34
3.7

7.1

5.2

284
310
33.1

1

Includes medicaid purchase of medicare coverage for eligible medicaid recipients.
Source: Department of Health and Human Services, Health Care Financing Administration.

The impending crisis in medicare concerns the Hospital Insurance
Trust Fund, which finances hospital, home health, and skilled nursing care for 30 million elderly and disabled persons. Spending from
the trust fund is expected to grow at the rate of 11.8 percent per
year from fiscal 1985 through fiscal 1995. Given the projected
growth of revenues, the trust fund balance is expected to decline,
starting in 1990. Under projections developed by the Congressional
Budget Office, the trust fund will be exhausted in 1994. It will face a
negative balance of $56 billion in 1995 and even larger deficits in following years. Therefore, it is clear that major reforms are required to
save the medicare program from financial insolvency. Fortunately,
however, policymakers have time to consider carefully the proposed
solutions to medicare's financial crisis.
MEDICARE BACKGROUND INFORMATION

Medicare consists of two parts. Hospital insurance, also called Part
A, covers 90 days of hospital care per spell of illness and allows an
additional 60 reserve days to be used over the beneficiary's lifetime.
Part A also covers 100 days of skilled nursing facility care per spell of
illness and, since 1980, an unlimited number of home health visits.
Hospital inpatient services are subject to a deductible equal to the
cost of a day of hospital care (which increased from $556 to $400 on
January 1, 1985) and coinsurance rates of one-fourth of the deductible for days 61 to 90 of hospital care, one-half of the deductible for
each reserve day, and one-eighth of the deductible for days 21 to 100
of skilled nursing facility care.
Supplementary medical insurance, also called Part B, helps beneficiaries pay for physician and other outpatient care. Part B is a voluntary program open to almost any citizen who is over 65 or disabled.




146

Ninety-seven percent of Part A participants are also in Part B. Services covered by medicare Part B are subject to a $75 annual deductible and 20 percent cost-sharing. Medicare is administered by the
Health Care Financing Administration of the Department of Health
and Human Services.
The principal source of funding for the Hospital Insurance Trust
Fund is payroll tax contributions, at rates periodically modified by
the Congress. The trust fund is financed on a pay-as-you-go basis,
that is, current workers pay the costs of current beneficiaries. The
Supplementary Medical Insurance Trust Fund is funded primarily
through premiums from beneficiaries and general revenue contributions. The 1984 premium was $14.60 per month, which was raised to
$15.50 per month on January 1, 1985. These calendar year rates
were projected to equal 25 percent of the supplementary medical insurance program costs of elderly beneficiaries, as required by the
Social Security Amendments of 1983.
MEDICARE PHYSICIAN REIMBURSEMENT

Medicare reimbursement for Part B services is based on "reasonable" charges. Private insurance carriers that administer the Part B
program determine the reasonable charge by comparing the amount
actually billed with the billing physician's customary charge and the
locality's prevailing charge. The lowest of these three amounts for
any claim submitted is the reasonable charge. After the Part B deductible is met, medicare generally pays 80 percent of the reasonable
charge and the beneficiary is responsible for the remaining 20 percent.
Increases in reasonable charges are limited by the medicare economic index, a formula based on increases in physicians' practice
costs. The rate of increase in the medicare economic index has been
consistently lower than the rate of increase in prevailing charges.
Therefore, the medicare economic index places a limit on increases
in reasonable charges. Estimates are that about 60 percent of medicare Part B charges are limited by the medicare economic index.
Physicians can decide on a claim-by-claim basis whether to accept
medicare's reasonable charge as payment in full for the service. If so,
the physician receives payment directly from the program. The patient is responsible for the 20 percent coinsurance and any remaining
deductible. If not, the physician bills the patient directly and the program reimburses the patient for 80 percent of the reasonable charge
(after the deductible has been satisfied). The percentage of claims
paid directly to the physician declined steadily from 61.5 percent in




147

1969 to 50.5 percent in 1976, after which it slowly increased, reaching 54 percent of claims in 1983.
The Deficit Reduction Act of 1984 imposed a 15-month freeze, effective October 1, 1984, on medicare physicians' fees. All physicians
were required to say by October 1 whether they would accept direct
payment for all of their medicare patients for the following year. The
freeze and other provisions in the Deficit Reduction Act were expected to reduce the rate of increase in medicare physician spending in
fiscal 1985 from 14.5 percent to 11.1 percent.
There are three related issues in the area of medicare physician reimbursement: the conditions for direct payment, determination of the
medicare payments, and supplementary private insurance. As noted
above, physicians currently have the option of accepting or rejecting
direct payment on a claim-by-claim basis. Some observers have
argued that this amounts to a license to overcharge patients and
have, therefore, proposed all-or-nothing acceptance of direct payment. One problem with this proposal is that some physicians who
had previously refused direct payment could simply cease to treat any
medicare patients. Other physicians might continue to treat medicare
patients, but select fewer medicare patients and more private patients. The total volume of services produced per physician by both
types of physicians would also fall.
The second issue concerns how medicare's physician payments
should be determined. Few observers would defend as reasonable the
present payment system, which freezes in place the existing distortions in physicians' prices. For example, studies show that physicians'
charges for hospital procedures are higher than for outpatient procedures; insurance coverage of inpatient procedures, which predates
coverage of outpatient services and is still more extensive, may cause
these differences.
Numerous proposals have been advanced to reform the medicare
physician payment system. A successful proposal would use market
mechanisms to set the values of the medicare payments. This is desirable because values set at competitive levels should assure continued
access to quality medical care for beneficiaries. For example, the performance of certain high-volume procedures might be put up for
competitive bids. The winning low bids would become the basis of a
comprehensive scale that assigns weights to all procedures. Finally,
the multiplier (a number that converts the weights into reasonable
charges) could be auctioned to all willing physicians in the community.
The third issue concerns supplementary medicare insurance. In
1967, 45.5 percent of medicare beneficiaries also had private, supplementary insurance; by 1977 this fraction had grown to two-thirds.




148

Medicare supplementary policies tend to protect consumers against
medicare cost-sharing. This calls into question the effectiveness of
medicare payment strategies based on cost-sharing. One may ask why
the demand for medicare supplementary insurance is so strong, particularly in the light of allegedly highrpremiums for these policies.
The answer may be that medicare supplementary insurance is
highly leveraged. That is, the supplementary policy that pays 20 percent of the physician's reasonable charge may cause policyholders to
use more services, for which medicare Part B is obligated to pay 80
percent of the bill. Therefore, consumers may regard supplementary
policies as highly attractive, even though they may create substantial
excess use of services for the system as a whole.
MEDICARE HOSPITAL REIMBURSEMENT POLICY

Until October 1983 medicare reimbursed hospitals for their "reasonable costs" of providing care, subject to some limits and exclusions. The Social Security Amendments of 1983 marked a major departure from cost-based reimbursement by establishing the prospective payment system. Under this system, hospitals are paid a prospectively determined rate for each discharge. The amount of the payment is determined by the classification of the discharge into one of
468 diagnosis-related groups. Certain types of expenses, such as capital and medical education, are still paid on a cost basis.
Data indicate that hospitals are responding to financial pressures to
control costs and admissions. Hospitals have reduced personnel and
staffed beds from the second and third quarters of 1983, respectively,
to the second quarter of 1984. The introduction of the prospective
payment system has also coincided with a gradual decline in hospital
admissions and a sharper rate of decline in the length of stay for
people age 65 and over.
The virtue of the prospective payment system is that it uncouples
prices from the costs of individual hospitals. This idea, which lies at
the heart of the prospective payment system, is that hospitals will
strive to reduce their costs below the level of these fixed prices. The
major problem with the prospective payment system is that the
system of prices it established has no relation to the prices that
would cause hospitals to produce the amount of services that consumers desire to buy at the right quality and the minimum cost. A
price that is too low may cause producers to reduce investments so
that the quality of service declines. Of more relevance to hospital
services, a price that is too high in a market with competing suppliers
will lead hospitals to compete in dimensions other than price, driving
costs up to prices.




149

Achieving the appropriate set of prices will not be easy. The approach currently favored by the Health Care Financing Administration is to revise the existing system to account for unusual cases,
hidden differences in the severity of cases among hospitals, and the
like. However, the prospective payment system—no matter how finely
tuned—creates incentives for cost increases that could be substantial
in the long run. For example, hospitals have incentives to increase
net revenues by increasing admissions, by unbundling services to
shift costs to other parts of the medicare program, and by diagnosing
and "treating patients in the most highly reimbursed diagnostic categories.
The Health Care Financing Administration may attempt to thwart
these cost-increasing tendencies by setting up regulations to detect
and punish excessive use of services under the prospective payment
system. However, without incentives on the part of consumers, it is
doubtful that extra regulations will be effective. This is because individual consumers have no stake in saying "no" to extra admissions,
unbundling of services, or reclassification of admissions into higher
priced diagnosis-related groups. In addition, they have no reason to
shop among hospitals on the basis of price. An efficient hospital can
gain patients by offering higher quality care, but not by offering a
lower price. This will lead to excessive quality competition. The
system is basically one of price control, with all the usual disadvantages of that approach. As a transitional measure to a market-based
system, however, current arrangements are superior to the previous
system of cost reimbursement.
A disadvantage of any price control system is that it tends to
become the target of groups who seek concessions for their special
circumstances. For example, hospitals' capital costs and medical education expenses are still reimbursed on a cost basis under the new
system. This special subsidy will tend to increase the amount of resources devoted to capital and medical education. In the long run,
other groups, including large public hospitals that provide charity
care, may also obtain concessions from the prospective payment
system. Such concessions would gradually convert the system from
one that controls the overall level of prices to one that allocates resources on a microeconomic level within the hospital sector.
There appear to be two possible solutions for the longer run. First,
medicare Part A could be turned into a preferred provider organization in which the program pays in full for admissions at low-priced
hospitals. Consumers choosing more expensive hospitals would have
to pay the balance of the hospital's bill. This arrangement would not
preclude using medicare's substantial buying power to obtain discounts from high-priced hospitals.




150

The advantage of this approach is that it could be set up quickly in
most parts of the country, including those where organized alternative delivery systems do not exist. The disadvantage is that it would
not address the structural incentives of hospitals to increase admissions, unbundle services, and diagnose patients in profitable diagnosis-related groups. In order to solve these problems, it may be necessary to adopt the alternative approach of combining medicare into a
single program and letting organized provider groups bid to serve
the medicare population at competitive rates.
Under this alternative proposal, each medicare beneficiary would
receive a voucher that would enable him or her to purchase both
physician and hospital services from an approved medical plan. A
successful voucher system would seem to have four characteristics:
(1) it would be based on capitation, that is, a fixed payment per enrollee per month; (2) the medicare contribution would be determined
by competitive bidding; (3) consumers would have a choice among
alternative plans; and (4) it would be mandatory.
Medicare payment based on capitation would eliminate the problems of excessive admissions, unbundling of services, and diagnosisrelated groups' reclassification that affect the present system. Competitive bidding would address the fundamental problem that the
Health Care Financing Administration does not know in advance
what hospitals' costs truly are.
The problem with using bidding to determine the capitation rate is
that of specifying the product to be delivered and ensuring that the
winning bidder actually delivers that product and not an inferior substitute. To overcome this problem, it is necessary for consumers to
have a choice among competing plans. Then, if a plan did not deliver
its promised services or otherwise inconvenienced its enrollees, they
could go elsewhere. Such plans would acquire a bad reputation so
that consumers need not be harmed before switching to another
plan. In order to ensure an adequate number of competing plans, it
would be necessary to define eligible plans quite broadly. In some
instances, the capitation payment might be given to a primary care
physician who becomes the patient's case manager and is at risk for
additional expenses.
However, choice among health plans entails its own problems—
those of preferred risk-selection and self-selection. Preferred risk-selection refers to the tendency of a health plan to pick off good risks,
thereby making a profit at the standard capitation rate. There are two
ways to prevent this. First, if the plan can charge consumers more
than the standard capitation rate, then it will be willing to enroll all
applicants, with marginal payments tailored to the applicant's risk.
This system may be perceived as unfair to high risks, who have to




151

pay positive marginal premiums. An alternative is to risk-rate the
capitation payment itself. Using certain predetermined demographic
factors that are related to health care expenditures, the Health Care
Financing Administration can vary the capitation payment. Although
this system would not be perfect, it is exactly the technique that a
private insurer would use to risk-rate its enrollees.
Standard medicare could remain as one of the choices under this
system, but not as an open-ended choice. Those who remained with
standard medicare would have to pay for premium expenses greater
than their risk-rated voucher. Otherwise, medicare would be forced
to subsidize those individuals who prefer the less efficient delivery
system.
The Tax Equity and Fiscal Responsibility Act of 1982 marked a
significant step toward the goal of medicare vouchers. That legislation amended the medicare statute to permit payments on a risk basis
to HMOs and other competitive medical plans. The current law has
significant shortcomings, however. One of these is a requirement
that, if medicare payments exceed the estimated cost of serving medicare enrollees, the savings must be passed on to enrollees in the
form of additional benefits or reduced cost-sharing. This regulation
is unnecessarily restrictive because medicare enrollees might rather
have cash rebates than additional benefits. A second flaw of the existing system is that the medicare payment to competitive medical plans
is determined by the 95th percentile of risk-rated expenditures in the
standard medicare plan. The competitive approach to setting this
payment would have plans bid on the payment rate for each distinct
risk class of enrollee.
The choice between the prospective payment system and vouchers
boils down to the question of the appropriate unit of service for
paying providers. The prospective payment system favors payment
for each admission, whereas the voucher system is based on payment
per enrollee. On balance, the argument for vouchers seems to be
stronger, but both systems face similar problems in determining the
appropriate payment rate: the prospective payment system must
make appropriate distinctions among different types of admissions,
whereas the voucher system must distinguish among different risk
classes of enrollees.
In comparing the competing proposals, two points are important.
First, competitive bidding might be used to help set the value of the
medicare payments. Second, either system should include strong incentives for consumers to select efficient providers. This can be done
through a preferred provider arrangement or by making the voucher
system mandatory. Without consumer incentives, the medicare pro-




152

gram will continue to experience the cost-increasing pressures of insured medical care.
CARE FOR THE DYING

Much concern exists about the appropriateness of medical care
services for the dying. Nowhere is this concern more relevant than
for the medicare program. In 1978 medicare enrollees in their last
year of life accounted for 28.2 percent of total program spending, although they represented only 5.2 percent of all enrollees. An earlier
study had shown that medicare decedents in 1967 comprised 5 percent of enrollees and accounted for 22 percent of total program
spending. Therefore, a disproportionately small number of enrollees
accounts for a large, and apparently rising, share of program expenditures.
Much of this medical care is rendered in hospitals, which critics
claim are an inappropriate site to care for the dying. The validity of
this claim rests on the ability of medical science to determine, before
care is rendered, whether or not expensive lifesaving measures are
likely to succeed. Although this is an unresolved question, some research suggests that a large part of care rendered in hospitals' intensive care units is of low lifesaving value. As an alternative to expensive hospital treatment, careful attention should be given to innovative proposals for addressing medical needs during the last year of
life.
One proposal to allow medicare beneficiaries suffering from terminal illness to receive hospice benefits was enacted by the Tax Equity
and Fiscal Responsibility Act. An unresolved issue is whether the
hospice benefit replaces expensive inpatient hospital care, or whether
it primarily serves new beneficiaries. If the second effect dominates,
then, although services to new beneficiaries clearly have some value,
medicare costs will be driven up. An ongoing evaluation of the hospice program will determine its effect on the quality and cost of care.
The medicare hospice benefit recognizes that the purpose of endof-life medical care is to provide for the comfort and well-being of
the patient. In these areas, the patient may be the best judge of what
is good medical care. The most difficult question is this: Under what
conditions does a mentally competent patient have the right to refuse
life-sustaining medical treatment? It is beyond the realm of economics to attempt to answer this question. It is clear, nevertheless, that
expensive medical care, devoted merely to postponing death by
weeks or days, will come under increasing scrutiny by patients, their
families, and third-party payers.




153

COVERAGE FOR NEW MEDICAL TECHNOLOGY

An issue closely related to care for the dying is coverage for new
medical technology. Recent advances in technology have enabled
physicians to repair or transplant numerous organs, but at very high
costs and with uncertain long-term outcomes. Should new medical
technology be covered by health insurance programs? This question
is being addressed by private health insurers who have, in some
cases, extended coverage to include organ transplants. These insurers have developed estimates of the costs of new coverages and, if
consumers are willing to pay, the firms offering such options will succeed in the marketplace. Unfortunately, no counterpart to this process exists in the medicare hospital insurance program, because the
program is not financed by premiums and because consumers cannot
express their preferences by choosing among different medicare options. These problems might be solved by medicare vouchers, but
only if the standard voucher does not include expensive new technologies. Patients wishing to cover these services could then do so at
their own expense. The alternative of covering new technologies in
the standard voucher would provide protection for all medicare
beneficiaries, but it would tend to add further cost increases to the
medicare program. These increases might exceed the ability of our
society to pay for all new medical technologies.
MEDICAID: PUBLIC HEALTH INSURANCE FOR THE POOR
The public image of medicaid is that of a welfare medical program
oriented largely toward children and other members of families receiving Aid to Families with Dependent Children payments. Allegations abound that these clients abuse the program. Other critics
point to abuses by medicaid providers; and policymakers have
become increasingly concerned about "medicaid mills" in which lowquality care is provided.
None of these perceptions is accurate. In fact, medicaid has successfully met its legislated objectives. The primary emphasis of medicaid was intended to be on persons whose economic status is beyond
their control—dependent children, and the elderly, blind, and disabled. Access to medical care for these groups has markedly improved and with it have come improvements in the health of the
poor.
MEDICAID BACKGROUND INFORMATION

Medicaid was enacted by the Social Security Amendments of 1965
to pay for the medical care of specific categories of low-income
people. It is administered by States and jointly funded by the Federal




154

Government and States. The Federal share of medicaid is determined
by a formula related to the State's per capita income. For 1982 and
1983, the Federal share ranged from a statutory minimum of 50 percent in 13 States to 77 percent in Mississippi.
With some exceptions, to be eligible for medicaid, an individual
must receive or be eligible for federally assisted cash welfare payments. States, at their option,, may cover specific groups of people
who do not receive cash assistance. Because of medicaid's multiple
criteria for eligibility, about 12 million people with income below the
Federal poverty threshold in 1980 were ineligible for medicaid. At
the same time, about 5 million of those eligible had annual family incomes at least twice the poverty standard.
Medicaid must cover a broad range of benefits with most services
provided free of charge, including some, such as skilled nursing
home care, that are not often found in private insurance contracts.
Because nursing home care is a catastrophic expense (exceeding
$30,000 for the average admission), nursing home residents often
"spend down'* their resources and income until they become eligible
for medicaid. Many States have also chosen to cover optional services
(for example, dental care, eyeglasses, and intermediate care facilities)
that accounted for 40 percent of all medicaid outlays in 1978.
The overwhelming emphasis of the medicaid program is on institutional care. Of $32.4 billion spent on medicaid in fiscal 1983, hospitals received 27.2 percent for inpatient care and nursing homes accounted for 30.9 percent (up from 23.4 percent in fiscal 1972). Payments to physicians represented only 6.7 percent of all medicaid payments in fiscal 1983.
The number of medicaid recipients increased from 18.3 million in
fiscal 1972 to 22.8 million in 1977 and has declined slightly since
then. The largest group of recipients are people who are eligible for
Aid to Families with Dependent Children (5.5 million adults and 9.4
million children). However, this group accounted for only $8.3 billion of spending in fiscal 1983. A much larger amount—$23.3 billion—was spent on the elderly, blind, and disabled. This is a reflection of the medicaid program's emphasis on institutional and, particularly, long-term care.
Nearly 60 percent of all medicaid patients treated in private physician practices are seen by physicians whose patient volume is composed of at least 30 percent medicaid patients. However, these large
medicaid practices do not fit the stereotype of medicaid mills. Ancillary services do not appear to be abused; nor is there evidence of excessive markups over cost. Visit length in large medicaid practices is
comparable with that in other practices. Physicians in these practices
often earn less than other physicians. However, physicians in large




155

medicaid practices tend to be older, nonboard certified, and graduates of foreign medical schools.
AID TO FAMILIES WITH DEPENDENT CHILDREN MEDICAID

Proposals for medicaid reform fall into three broad areas: to
change the eligibility criteria and coverage of the poor, to trim medicaid benefits, and to modify the Federal role. For example, the Federal role might be changed from that of providing matching grants to
payment of block grants to States. The argument behind this proposal is that block grants give the States greater flexibility in deciding
how to use medicaid funds.
But this approach might lead medicaid-eligible people to migrate
from States with poor benefits to States with generous benefits. If
that were the case, some States would not be able to set benefits as
high as they might desire for their current residents, because to do
so would invite excessive immigration. Other States would set low
benefit levels to encourage outmigration. Thus, the best strategy for
all States would be to provide levels of benefits lower than they
might otherwise desire.
One alternative is to tie the Federal contribution to a program of
basic medicaid benefits judged to be necessary in all States. Those
States desiring to add more benefits, or to extend coverage to more
people, could do so with their own funds. Another alternative is to
cap or reduce Federal payments by a fixed percentage amount. This
method was used by the Omnibus Budget Reconciliation Act of 1981,
which reduced Federal payments to each State in fiscal 1982, 1983,
and 1984 by 3, 4, and 4.5 percent, respectively.
Proposals to change medicaid eligibility criteria and coverage of
the poor should receive serious consideration, but the first principle
for any change is that it should not reduce the incentives of medicaid
recipients to work. A program that replaces the present categorical
definition of eligibility with an income test would in effect add another tax on the earned income of poor people.
Any proposal to trim medicaid benefits or to introduce cost-sharing should be examined closely. The concern is that such policies adversely affect the health of the poor.
An alternative to medicaid cost-sharing is for the program to contract with selected hospitals on a competitive bid basis. California is
experimenting with this program. Arizona is also conducting a demonstration of a substantially different method of providing medicaid
benefits. Virtually all beneficiaries must choose among competing
prepaid capitated organizations. All care must be provided or authorized by the prepaid capitated organization which is at financial risk
for the provision of care. This system is similar to the HMOs volun-




156

tarily selected by many employees under their private insurance plan
options.
LONG-TERM CARE MEDICAID

Long-term care medicaid presents different issues. Foremost
among these is the growing demand for long-term care for the elderly. The elderly population doubled between 1950 and 1980 and will
double again by 2030, accounting for almost one-fifth of the U.S.
population. Moreover, the elderly population is becoming older. In
the two decades from 1990 to 2010, the 85-and-over age group will
increase three to four times as fast as the general population. This
will create increasing demands for long-term care.
Most of the long-term care population resides in the community.
Nevertheless, because institutional care is very expensive and many
experts believe that it may be unnecessary in some cases, many
proposals emphasize more community care for the elderly. Among
these are formal sources of care (paid providers of home care, adult
day care, etc.) and informal support by family members. Some have
proposed giving families tax deductions or credits if they maintain
severely disabled family members at home rather than placing them in
an institution.
Other approaches would seek to strengthen private, voluntary financing mechanisms for long-term care. One of these is the life care
contract, in which the beneficiary is guaranteed a lifetime continuum
of care in a community that combines residential living with specialized long-term care services. The resident usually pays a lump sum
initial fee and monthly charges thereafter. This contract represents a
capitated approach where the provider is at risk and, therefore, has
an incentive to provide a cost-effective mixture of services including
alternatives to institutional care.
CONCLUSION
Medical care spending is rising at an alarming rate, seemingly
beyond control. This despairing attitude is not justified. It is possible
to control medical care costs without harming the health of the average person. This is because many of today's health problems are
more closely related to eating, drinking, and smoking habits, and to
accidents, than they are to lack of medical care. Thus, people can significantly improve their health by taking responsibility for healthy
lifestyles. The private and public sectors can encourage this trend by
adjusting health insurance premiums to reflect the savings from
healthy behavior.




157

Much of the rise in medical care spending is attributable to health
insurance, which insulates both individual consumers and providers
from the costs of using or prescribing additional services. Numerous
proposals would introduce price incentives into the market for medical services. The use of indemnity payments, which remove the insurance subsidy from the marginal units of medical care, is especially
promising. Another proposal would cap the tax subsidy of employer
health insurance contributions. The goal of these proposals is to use
market mechanisms to determine both the level of medical care
spending and its allocation among services.
Another promising development is that States have recently begun
to take action to control medical care costs. State laws have been
changed to permit the development of preferred provider organizations. Further attention should also be given to eliminating State regulations that favor one type of insurance company over another.
Some private health insurers have been able to negotiate discounts
from hospitals. Discounts benefit the policyholders of these insurers
and place pressure on other health insurers to control their premium
costs. However, it would be unwise to encourage insurance industry
concentration in order to obtain discounts. The negative consequences of market concentration might outweigh any benefits from
this policy.
Until recently, the medicare program reimbursed each hospital for
its costs of providing care. This Administration, however, has adopted a system that pays hospitals a prospectively determined rate for
each medicare discharge. This system may be viewed as a transitional
measure to a market-based approach.
The changes summarized above represent a healthy trend toward
the use of incentives. As such, they indicate that the same principles
used to allocate resources in other industries can be applied successfully to medical care. By making a commitment to continue this
trend, society can turn the corner in the fight against medical care
cost inflation.




158

CHAPTER 5

Economic Status of the Elderly
RETIREMENT AS IT IS KNOWN TODAY is a relatively recent
phenomenon. In 1900 life expectancy at birth was 46 years for males
and 48 for females. While most women did not work outside the
home once they married, two-thirds of all men over 65 were still in
the work force. Many men retired only because of poor health or
company rules, and retirement usually consisted of a few years of declining health. Often the elderly relied on their children for housing
and financial support.
Since 1900 the fraction of elderly men with jobs has declined dramatically, while the life expectancy of the elderly (65 and older) has
improved substantially. Now, a man who is approaching the end of
his working career can expect to spend about 15 years in retirement,
a retirement that is often shared by a spouse who also makes a transition from worker to retiree. Because life expectancy has increased
more for women than for men in the 20th century, the retirement
years have become especially important for women. These are years
that women are likely to face alone; two-thirds of women over 75 are
widows. Elderly widows rarely remarry and on average they live 16
years beyond their husbands. Higher divorce rates have added to the
number of elderly women living alone, so that today only two-fifths
of all elderly women live with their husbands.
Resources to support these new retirement patterns rarely come
directly from the families of retirees. The elderly receive less than 1
percent of their income from their children, and the fraction of elderly people living with their children has declined sharply. These new
patterns are signs of the financial and physical ability of the elderly
to live independently; they do not indicate isolation or abandonment.
Only about 5 percent of the elderly live in nursing homes and most
of the elderly who are not in nursing homes, even most of those over
85, report that they need no help with daily activities.
Although independent, the elderly have strong family ties. A national survey found that four-fifths of the elderly have at least one
child and that only 11 percent of the elderly with children had not
seen one of their children in the past month. The families of the elderly usually include grandchildren as well as children, and four-




159

generation families are becoming more and more common; about
half of all elderly people have great-grandchildren. Longer lifespans
also mean that the children of the elderly can be elderly themselves;
about 10 percent of the elderly have a son or a daughter who is also
over 65.
Retirement planning has become increasingly important for the
Nation as well as for families. The proportion of the population that
is elderly is growing; it will explode as the baby-boom generation retires. In 1900 one person in 25 was 65 years of age or older; today
that proportion is one in eight; by 2030 one person in five will be
elderly. In about 35 years the United States as a whole is expected to
have the same proportion of elderly as Florida does today. In 50
years the ratio of people over 65 to the working-age population will
be 2x/2 times as great as it was in 1950. No other demographic
change will influence the Nation in the next 50 years as much as this
"graying" of America. Every American and every facet of the society
will be affected.
CURRENT FINANCIAL STATUS OF THE ELDERLY
Thirty years ago the elderly were a relatively disadvantaged group
in the population. That is no longer the case. The median real
income of the elderly has more than doubled since 1950, and the
income of the elderly has increased faster over the past two decades
than the income of the non-elderly population. Today, elderly and
non-elderly families have about equal levels of income per capita.
Poverty rates among the elderly have declined so dramatically that in
1983 poverty rates for the elderly were lower than poverty rates for
the rest of the population.
These encouraging statistics do not tell the whole story. The elderly are not a homogeneous group. Those with spouses have relatively
high levels of family income, especially when leisure opportunities,
lower tax rates for the elderly, noncash transfers, and assets are taken
into account. A good deal of evidence supports the contention that
the elderly with spouses are, on average, more financially secure than
the non-elderly. But many of the elderly live alone and these individuals, particularly women, often have very limited financial resources;
they are often poor. Poverty rates for elderly blacks and the very old
are also high.
Conflicting statements about the economic status of the elderly can
sometimes be traced to these differences among the elderly but they
also arise for other reasons. The resources of the elderly include
income after taxes and assets, as well as transfers both from the government and from families. Many of these resources, particularly




160

those that are more important to the elderly than the non-elderly, are
hard to evaluate. In addition, statements about the financial security
of the elderly are relative statements; they are based on a comparison
of the measured resources of the elderly with the resources of the
elderly when they were younger, with other groups, or, in a few
cases, with a measure of the needs of the elderly. Different comparisons can lead to different conclusions about the economic status of
the elderly as a group.
Many of the measures of the financial status of the elderly can be
explained in the context of normal life-cycle patterns of income, consumption, and saving. Labor earnings tend to rise during the working
years and then decline sharply after age 60. Consumption levels are
more constant than earnings; a typical household borrows early in
the life cycle and later begins to accumulate savings during the
higher earning years. In the absence of social security payments, retirees maintain consumption by drawing down these savings. Social
security changes life-cycle patterns in several ways; social security
taxes and benefits can affect saving, retirement decisions, bequest
plans, and consumption. The effect of social security on life-cycle
patterns depends on many factors, including the degree to which the
elderly anticipated actual benefit levels when they were younger.
INCOMES OF THE ELDERLY

Given these normal life-cycle patterns, current income, the most
widely used measure of financial status, can be misleading. Income
can be low in retirement even when preretirement consumption
levels are maintained, because consumption is financed out of savings accumulated during the working years. In addition, relative
measures of income depend on the choice of the comparison group.
The elderly have relatively low income compared with those near retirement; but they have income levels close to much younger groups.
The difference is in part attributable to life-cycle patterns of earnings. These relative measures are also affected by the increase in incomes of successive generations because of economic growth, an increase that tends to work in the opposite direction and depress the
income of the elderly relative to the young.
Several of the various measures of relative financial well-being can
be illustrated using the before-tax income data in Table 5-1. The income of today's elderly can be compared with the income of the
elderly in the past, a comparison of elements in the last column.
Since 1950 the mean income of elderly families has gone up more
than 80 percent in real terms, and the mean income of the unmarried
elderly living in a household without relatives (unrelated individuals)
has more than doubled. The income of the elderly can also be com-




161

pared with the income of the same individuals when they were
younger, a measure that depends on life-cycle patterns of income.
Table 5-1 can be used to approximate portions of the life-cycle patterns of income for several generations. These life-cycle patterns are
traced out for families by diagonal elements in the table. For example, most of the elderly families in 1980 were roughly in the 35-to-44
age bracket in 1950. Thus, the data in Table 5-1 indicate that, on
average, elderly families in 1980 had higher levels of before-tax real
income than they had in 1950 but lower levels of income than they
had closer to retirement. Research based on income data for individual families over time rather than averages has led to the same conclusion—that elderly families have real incomes below levels they attained in middle age but similar to levels attained when the head was
younger.
TABLE 5-1.—Mean real money income before tax (in 1983 dollars) of families and unrelated
individuals, selected years, 1950-83
[Dollars]
Age {years)
Economic group and year
25-34

35-44

45-54

55-64

65 and
over

Families1
1950

14,910

17,510

18,140

16,900

I960

20,480

24,130

24,810

22,160

14,740

1970

26,570

31,850

34,810

30,730

18,260

1980

25,760

32,420

36,460

32,890

20,370

1983

24,730

32,460

36,530

32,060

21,420

11,780

Unrelated individuals
1950

8,920

9,280

8,270

6,670

4,150

I960

11,880

13,730

11,230

8,710

5,510

1970

18,640

17,940

15,740

13,070

7,380

1980

16,890

19,730

16,530

13,150

8,640

1983

16,420

20,120

18,200

14,070

10,040

1

Age determined by age of head of household.
Note.—Money income converted to 1983 dollars using the consumer price index for urban wage earners and clerical workers
(CPI-W) and rounded to the nearest $10.
PI W) and rounded to the nearest $10.
Source: Council of Economic Advisers, based on data from Department of Commerce (Bureau of the Census).

The Table 5-1 data for unrelated individuals cannot be used to
trace income patterns over a lifetime because there is substantial
movement into and out of this category. In many cases the relatively
low income levels of elderly individuals living alone, particularly
women, can be explained by the loss of a spouse.
One common measure of relative financial well-being is the average income of the elderly, those currently 65 and over, compared
with the average income of adults now aged 25 to 64. This measure




162

is a comparison of one element in the last column of Table 5-1 with
the average for the younger groups in the same row. It is influenced
by life-cycle patterns of income, by the effect of economic growth on
the income of successive generations, and by changes in the age distribution of both the elderly and non-elderly. Since the 1950s the average age of the elderly has increased because the fraction of the
very old among the elderly has increased. The average age of the
non-elderly has also changed, reflecting low birth rates in the 1930s
and the high birth rates that produced the post-World War II baby
boom. Given these influences, it is difficult to interpret relative
income measures that compare the elderly with the non-elderly and it
is not surprising that these measures have fluctuated since 1950.
Nevertheless, between 1970 and 1983 the relative status of the elderly improved dramatically (Table 5-2). In 1983 before-tax per capita
mean income was virtually the same for elderly and non-elderly families. Two-thirds of the elderly lived in family units. Per capita income
ratios are higher than family income ratios because families with an
elderly head tend to be smaller than younger families. In 1983 elderly families contained an average of 2.4 persons compared with an average of 3.5 persons for non-elderly families. The elderly to non-elderly income ratios are lower for unrelated individuals because the
elderly in this class are frequently older widows, who tend to be the
poorest of the elderly.
TABLE 5-2.—Mean real money income before tax of the elderly and non-elderly, 1970 and 1983
1983

Economic group

Elderly (65 years and over)

$21,420
9,080
10,040

Family income
Family income per capita1
Income of unrelated individuals ....
Non-elderly (25-64 years)

$30,940
8,960
16,900

Family income
Family income per capita1
Income of unrelated individuals....
Income ratios (elderly to non-elderly)
family
Family per capita
Unrelated individuals

1.01
.59

1
Bureau of the Census publications do not include a measure of average family size prior to 1976. The 1970 measures of
mean per capita income are estimated from information on the income of families of varying sizes.

Note.—Money income converted to 1983 dollars using CPI-W and rounded to the nearest $10.
Age of family determined by age of head of household.
Source: Council of Economic Advisers, based on data from Department of Commerce (Bureau of the Census) and Department
of Health and Human Services (Social Security Bulletin).

The distribution of before-tax income around its mean is very different for the elderly and non-elderly. Although the elderly are less
likely to have income below the poverty line, they are more likely to
have income below mean levels for their age group. In 1983 most of




163

the elderly (60.8 percent) had before-tax income between $4,000
and $15,000.
This bunching of the income distribution for the elderly below the
mean is the result of normal retirement patterns and the social security benefit schedule. Most of the elderly have chosen to retire. That
choice reflects the decision to consume more leisure at the expense
of income. In addition, social security benefits, a principal source of
current income for the elderly, are capped. The maximum benefit
was $734 a month for a 65-year old individual who retire^ in December 1983. With the benefit for a spouse, equal to one-half the primary benefit amount, annual social security payments would amount
to $13,217.
Income levels of the elderly have improved both absolutely and
relatively in spite of several forces that worked in the opposite direction. The most dramatic of these forces was a decline in labor force
participation of the elderly and a simultaneous increase among the
non-elderly. The labor force participation rate of elderly males declined from 26.8 percent in 1970 to 17.4 percent in 1983; the participation rate for elderly females declined from 9.7 to 7.8 percent.
Among those aged 25 to 54, both male and female, the participation
rate increased from 72.0 to 80.1 percent over the same period. Along
with increasing income, the elderly have benefited from increasing
amounts of leisure over the past few decades on both an absolute
and a relative basis.
Demographic factors have also tended to depress the average
income of the elderly. The age distribution of the elderly has shifted
toward those over 75. Because income typically declines with age and
because older generations have lower levels of lifetime income, increases in longevity tend to lower average income levels for the elderly. In addition, the ratio of women to men among the elderly has
increased from six women for every five men in 1960 to three women
for every two men in 1980. In 1983 mean income for elderly females
living alone was equal to 80 percent of mean income for elderly
males living alone.
Most income measures, including those in Tables 5-1 and 5-2, are
before-tax rather than after-tax measures. The elderly have lower average tax rates than the non-elderly and thus have more to spend out
of a given income than the non-elderly. Approximately two-thirds of
the elderly pay no income tax. The elderly benefit from several tax
provisions. Individuals 65 and older with low incomes receive a 15
percent credit against their tax and all individuals aged 65 and over
are entitled to an additional $1,000 exemption. Those over 55 also
receive preferential tax treatment on the capital gain from the sale of
one principal residence. Social security benefits were not taxed at all




164

before 1984. Now individuals with incomes well above average levels
for the elderly must include a portion (up to one-half) of their benefits in taxable income.
Income levels of the elderly have improved despite offsetting demographic trends largely because of increases in social security benefit levels and coverage. Between 1950 and 1983 the fraction of the
elderly receiving social security benefits rose from 16 to 94 percent.
Furthermore, the average level of nominal benefits went up much
faster than the price level during the same period (Table 5-3). Real
benefits went up by almost 150 percent. Income levels of the elderly
have improved relative to the non-elderly since 1970 because social
security benefits increased by 46 percent in real terms while earnings
from wages and salaries, the major source of income for the non-elderly, decreased by 7 percent in real terms. Thus, younger families
have had to work more to keep up with inflation since 1970; older
families have not.
TABLE 5-3.—Increases in wages, prices, and social security benefits, 1950-83
Percent change
Item

Median annual wages and salaries

1950
to
1960

1

1960

to

1970

1970

to
1980

1970
to
1983

1950
to
1983

104

138

451

Consumer price index 2

112

156

312

Average monthly social security benefit for retired workers

189

273

905

1

Data are for persons 14 years of age and over through 1977 and for persons 15 years of age and over beginning 1978.
* CPI-W.
Sources: Department of Commerce (Bureau of the Census), Department of Health and Human Services (Social Security
Administration), and Council of Economic Advisers.

Relative trends in the income of the elderly and the non-elderly
may be misleading if the two groups typically spend their money in
different ways. Typically the elderly spend more of their income on
medical care and food and less of their income on transportation and
child care than the non-elderly. Different expenditure patterns are
not taken into account in the calculation of real income because the
same measure of average prices—the consumer price index—is used
to adjust dollar income for both groups. Several studies have investigated this issue and virtually all have concluded that the goods typically purchased by the elderly and the non-elderly have experienced
similar price increases. In other words, the same index can be used
to compare the real income levels of the elderly and the non-elderly.
The common perception that the elderly are especially susceptible to
inflation is not supported by recent evidence. Social security payments have increased faster than the consumer price index, and that




165

index accurately reflects price increases of the purchases of the
elderly.
Current income has been the most widely used measure of financial status out of necessity rather than merit. The economic status of
the elderly can be evaluated properly only in the context of needs
relative to total resources. Resources include assets, gifts, and other
transfers as well as income. But it is very difficult to define needs,
and both needs and assets are measured only sporadically.
POVERTY RATES AS A MEASURE OF NEED

The best known measure of need is the official definition of poverty, a standard that takes some of the needs of different types of families into account. Families with incomes below the official poverty
level are defined as poor. Benefits in kind are not included in the
measure of income.
Poverty rates are lower now than in 1960; they have declined more
for the elderly than the non-elderly (Table 5-4). Elderly families now
have lower poverty rates than non-elderly families. Most of the elderly poor live alone or with nonrelatives, however. The poverty rate for
these elderly individuals living alone (unrelated individuals) is higher
than the poverty rate for unrelated individuals between 25 and 64,
but the disparity in these poverty rates has declined dramatically. In
1983 the poverty rate for the entire elderly population was 14.1 percent; for the non-elderly, including those under 24, it was 15.4 percent.
TABLE 5-4.—Percent of the elderly and non-elderly populations with incomes below the poverty line,
selected years, 1960-83
Economic group

1960

1970

1980

1960

1983

27

16

9

1980

1983

Non-elderly (25^64 years)

Elderly (65 years and over)
Families

1970

9

16

8

10

12

Married couple families and families headed
by a male

26

16

8

7

13

6

6

7

Female head, no husband present

31

20

15

17

44

32

32

36
18

Unrelated individuals

66

47

31

26

32

20

17

Male

60

39

24

22

26

14

14

17

Female

68

50

32

28

38

25

21

21

Note,--Age of family determined by age of head of household.
Source: Council of Economic Advisers, based on data from Department of Commerce (Bureau of the Census).

One major reason that poverty rates have declined for the elderly
is the social security system. The average couple's benefit was $744
per month in December 1983, 48 percent more than the poverty line
for an elderly family of two. In the same month, the average widow's




166

benefit was $393, which was 98.9 percent of the poverty line for an
elderly single individual.
Despite large Federal outlays for the elderly—more than $200 billion in fiscal 1983—measured poverty persists among the elderly because less than 10 percent of these outlays are for programs designed specifically to assist the low-income elderly. Often, the Federal
programs that are intended specifically for the poor among the elderly do not provide benefits that are large enough to raise households
above the poverty level, even when State supplements are taken into
account. About 90 percent of Federal outlays for the elderly are for
retirement and health programs that do not have eligibility criteria
based upon income or assets—a means test. These programs are
important for many of the elderly with low income, but they are not
intended specifically for the poor. About half of all elderly households with income below the poverty level receive no means-tested
benefits. Some of these households have assets that preclude the receipt of benefits; others may be reluctant to apply.
BENEFITS IN KIND

Income levels and poverty rates do not reflect benefits that are
paid in a form other than cash (benefits in kind). One important benefit in kind is medical care. Almost all elderly families are covered by
medicare. Federal expenditures on medicare for the elderly were
$48.4 billion in fiscal 1983 or nearly $1,800 per elderly individual. In
addition, $12 billion in medicaid (about one-third of all medicaid
funds) was devoted to the elderly, primarily the elderly in nursing
homes. About 16 percent of the elderly (about one-third of all elderly men) are eligible for medical care from the Veterans Administration. A veteran who has reached the age of 65 is now automatically
eligible for medical care on request, without regard to financial need,
if space is available in Veterans Administration hospitals and nursing
homes.
Despite the fact that the elderly have lower poverty rates, elderly
households are more likely to receive at least one form of meanstested noncash benefits than the average household. Although elderly households account for 21 percent of all households, they account
for 31.5 percent of households receiving housing subsidies, and 29.4
percent of households receiving medicaid, though they represent
only 16.8 percent of households receiving food stamps.
In spite of the substantial research on the value of benefits in kind,
the results are controversial. In 1983, for example, the poverty rate
for elderly people measured on a cash income basis was 14.1 percent. After including food, housing, and medical benefits valued at
their full cost in the private marketplace, the poverty rate for the el-




167

derly was estimated to be 3.3 percent. Because they are less likely to
receive medical benefits, the same valuation would reduce the poverty rate of the population under 65 by much less—from 15.3 percent
to 11.1 percent. Debate continues on whether this market measure
overstates the value of in-kind benefits. These benefits do provide
goods and services that the elderly would otherwise have to pay for
out of their cash income, but the recipients of these benefits may
not value them at their full cost. Estimates of the poverty rate for the
elderly based on cash income plus in-kind benefits vary from 3.3 percent to 9.1 percent for 1983, depending on the assumed level of recipient valuation.
ASSET LEVELS

Many observers have characterized the contribution of assets to the
financial status of the elderly as minimal, but the 1983 Survey of
Consumer Finances conducted by the Federal Government found
that the average asset levels of elderly families were higher than the
average asset levels of younger families (Table 5-5). The survey also
found that the assets of families in which the family head is 75 or
older were slightly lower than assets of families with a family head
between 65 and 74. This difference may reflect the fact that assets
are used to finance consumption in retirement; the difference could
also be attributable to the generally lower wealth levels of older generations. In fact, some recent studies have found that asset levels of
the current elderly often do not decline. Many of the elderly continue
to save and build up assets. There are several ways to interpret this
surprising pattern of saving among the elderly, but it is a strong indication that the elderly who do save have a high level of economic security.
Home equity is the largest asset for most elderly households. Most
of the elderly own rather than rent their dwellings, and they have
substantial amounts of equity in their homes. The elderly as a group
gained disproportionately from the increases in home values that occurred in the 1970s.
Assets are important to many elderly families, but they do not contribute much to the financial resources of families with very low income. Assets are highly correlated with income so that most of the
families with low income also have low asset levels. Asset income,
including the imputed rental value of owner-occupied housing,
amounts to only a few hundred dollars for households that have
annual incomes below $5,000.
Elderly individuals with low income generally have had low earnings before retirement because, for the most part, retirement income
is related to earnings. Low earnings also limit the ability to accumu-




168

TABLE 5-5.—Financial assets and homeownership of households holding such assets, by age group,
1983

Age of head (years)

Percent
of
households
owning
assets

Liquid assets of
those holding such
assets '
Mean

Median

Total financial assets
of households holding
such assets 2
Mean

Median

Percent
of
households
with
homeownership

Net equity of
homeowner3
Mean

Median

$13,780

Under 25

81

$1,970

$600

$2,650

$750

10

$18,870

25-34

87

4,270

1,200

7,960

1,510

40

32,640

27,770

35-44

91

8,910

3,000

14,410

3,750

66

52,070

40,600

45-54

89

14,830

3,310

23,010

4,130

75

64,470

50,000

54,950

9,340

73

73,580

55,000

55-64

91

25,440

7,430

65-74

88

30,670

9,680

65,340

11,400

69

63,670

45,000

75 and over

86

26,480

7,890

37,060

10,350

57

47,760

40,000

93

20,960

6,230

42,790

8,200

76

68,390

53,770

28,200

6,730

50,170

8,750

69

62,460

44,170

45 and over:
Head in labor force
Head retired

86

1

Liquid assets include checking accounts, savings accounts, money market accounts, certificates of deposit, IRA and Keogh
accounts, and savings bonds.
2
Financial assets include liquid assets plus stocks, other bonds, nontaxable holdings (municipal bonds and shares in certain
mutual funds), and trusts.
3
Nonfarm homeowners.
Source-. Board of Governors of the Federal Reserve System.

late assets before retirement. Consequently, financial distress among
the elderly is not so much a function of aging as it is a function of
the factors that lead to low levels of income at all ages. These factors
include education, race, and work history. The principal exception to
this generalization may be for elderly women who lose a spouse,
either through death or divorce. Although the loss of a spouse generally lowers household income at any age, the young and men of all
ages usually remarry after a divorce or the death of a spouse; older
women usually remain single. Elderly widowed men have remarriage
rates that are about seven times higher than those of elderly widows.

SOURCES OF SUPPORT FOR THE ELDERLY
The relative importance of different sources of support for the elderly has shifted considerably over the past few decades. Earnings
have decreased in importance with declining labor force participation, while social security, pensions, and assets have increased in importance.
Other sources of support have also changed. Between 1950 and
1970 the percentage of the elderly living with their children declined
from 31 to 9 percent. Some of this decrease reflects a shift toward
institutional care, but most of it reflects the formation of independent households. The rate of nursing home use by those 65 and over




169

has almost doubled since the introduction of medicare and medicaid
in 1966, but it is still quite low—around 5 percent.
Many observers see a causal relationship in these patterns: a cessation of work because of retirement benefits and the substitution of
legally mandated intergenerational transfers for transfers within families.
EARNINGS

Earnings, at one time the most important source of income for the
elderly, now represent about 15 percent of the money income of the
elderly. Earnings have declined as a share of income because of reduced labor force participation and because a higher fraction of elderly workers participate on a part-time basis. In 1960, 35 percent of
male workers 65 and over worked on a part-time basis; now almost
half work part time. Part-time employment for female workers 65 and
over increased from 48 percent to 61 percent over the same period.
Most older workers who reduce their work effort below full time have
left the job they held in their prime working years, and they generally
work at a lower hourly wage rate. The average duration of partial retirement for those who choose to work part time is about 3 years.
The increase in the relative importance of part-time work is clearly
influenced by the social security earnings test. Earnings above a limit
reduce social security benefits by $1 for every $2 in earnings. The
limit increases as retirees grow older and after age 70 there is no
limit. The social security test is, in effect, a 50 percent tax on a range
of earnings above the limit. To some extent, this tax is offset by increases in future benefits. When other taxes are taken into account,
the marginal tax rate on current income can exceed 100 percent for
some of the elderly. Consequently, many of the elderly do not work
once they have earned the limit. Earnings distributions for the elderly
clearly show this phenomenon; annual earnings tend to bunch near
the point where the earnings test begins to bind.
New retirement patterns are largely a matter of choice on the part
of the elderly, a choice that reflects both an improved financial status
that allows them to enjoy more leisure and the incentives inherent in
retirement benefits. The view that most of the elderly have been
forced to retire by poor health or by mandatory retirement laws is
not supported by the evidence. Changes in health do not explain the
decline in labor force participation over time. To some extent, the
decline in participation can be explained by the fact that the minority
of workers with health problems are now able to retire early. This
phenomenon is not a significant factor behind current retirement
patterns. Most workers now retire between age 60 and age 65. That
pattern is explained by economic incentives, not by health.




170

The explanation for work patterns among the elderly is not found
in mandatory retirement rules either. Even before the Congress
raised the minimum mandatory retirement age from 65 to 70 in
1978, only a minority of workers were employed in jobs that imposed
mandatory retirement, and the vast majority of these workers retired
before the mandatory date. Estimates of the percent of workers who
retire because of mandatory retirement have been quite small—between 2 and 5 percent. The actual incidence may be even lower now
because several States have outlawed mandatory retirement entirely.
There is increasing evidence that the retirement decision is a
matter of choice, a choice that is strongly influenced by the economic
incentives inherent in both social security and private pensions.
Labor force participation has declined as pension benefits have increased. The effect of pensions on labor force attachment can also be
observed among individuals in a given year. Even though pension recipients are not forced to stop working, they often do. In 1980 the
employment rate for recipients of private, State, and local pensions
aged 60 and over was only 56 percent of the rate for the entire population in the same age bracket. Further evidence that the timing of
retirement is largely a matter of choice can be found in the distribution of retirement ages: The two peak years of retirement occur at
ages 62 and 65. Sixty-two is the earliest age of retirement for social
security. The current benefit structure of the social security system
discourages work past the age of 65. In addition, 65 is the normal
retirement age in most pension plans. After the age of 65, pension
accrual frequently ceases. The implication of these suggestive patterns is reinforced by more sophisticated statistical studies. About
three-quarters of the variation in retirement ages can be explained by
economic variables that measure the level of accrued pension benefits at a given age and changes in income streams that can be anticipated if retirement is postponed.
The decision to retire is clearly influenced by the financial rewards
for continued work. These financial rewards include wages and pension benefits. Although workers are less likely to retire when the rewards for continued work are high, they often retire even when retirement means lower income. This choice of leisure over income is
influenced by working conditions. Workers in blue-collar jobs, particularly those jobs involving heavy manual labor such as mining and
construction, are likely to retire earlier than workers with jobs in
retail trade or service industries.
Despite the limited labor force attachment of older workers, surveys find that many of the elderly want to work part time. This is not
surprising, given the incentives inherent in the social security earnings test. The fact that more people say they want to work part time




171

than actually do has led to the conclusion that there is a shortage of
part-time employment opportunities for older workers that is caused
by age discrimination and employer inflexibility over hours. It is unlikely, however, that these factors explain the frequency of part-time
work among the elderly.
Wanting a part-time job can mean many things. It usually means a
desire for a job with a wage that is sufficient to attract a worker out
of retirement. Even though many of the elderly work part time at a
reduced hourly rate compared with their preretirement wage, the
lowest hourly wage at which workers would be willing to accept a
part-time job can be quite high for some older workers. The compensation package for elderly workers frequently includes no retirement benefits. Thus, post-retirement jobs must offer more in wages
to make them as attractive as preretirement opportunities. The fixed
costs of working may also raise an individual's minimum acceptable
wage. A low wage for a few hours a week may not be attractive when
transportation, clothing, and other work-related expenses are taken
into account. Thus, many workers may be unwilling to work at an
hourly rate lower than the rate paid on a preretirement job.
Employers, however, are likely to offer reduced wages for part-time
employment for several reasons. Part-time employment for older
workers often means a job change either because retirement provisions preclude work with a preretirement employer or because retirees seek a less demanding job once pension benefits have been secured. A job change often means that workers cannot use the same
skills they acquired in their career before retirement. In addition, employers often face fixed costs of employment that make one full-time
employee more cost effective than two or more part-time employees
who work the same total hours. Among these are costs of recordkeeping, performance evaluation, training, some fringe benefits, and
some social insurance payments.
As a result, jobs that are available often do not pay enough to attract the elderly. A shortage of jobs exists only in the same sense that
would imply a shortage of almost anything with desirable features
and an unspecified price. Alleged employer inflexibility in this case is
the result of the normal forces that reward efficiency in a firm. Age
discrimination is also an unlikely explanation for the scarcity of parttime employment among the elderly. Part-time employment, particularly employment for less than 25 hours a week, is rare among all
adult workers.
ASSETS AND FAMILY SUPPORT

Surveys indicate that money income from assets accounts for about
25 percent of the cash income of the elderly. These findings should




172

be interpreted with care because income from assets is often significantly underreported, more so for the elderly than the non-elderly.
Assets become more important as a source of income as income
rises, accounting for only slightly more than 5 percent for households with income under $5,000 but more than one-third of income
for households with income over $20,000.
The major single asset for most of the elderly is their home. Nearly
three-quarters of elderly households own their own home; half have
complete ownership (no mortgage). Some elderly homeowners have
little in the way of other resources, and they may need ways to convert home equity into money income. Reverse mortgages—financial
arrangements that provide monthly payments from a bank and
reduce home equity—were devised to meet this need. They provide
income and a home to elderly individuals as long as they live. The
bank takes over the home when the homeowner dies. These and
other financial instruments to tap home equity have received a great
deal of attention lately, but the actual use of reverse mortgages is
rare. Many of the existing schemes are financially unattractive to the
elderly because they offer little in monthly income relative to the
market value of the home.
Some research has suggested that the reverse mortgage market has
not flourished because the elderly have better ways of converting
housing into other forms of consumption. Children may support parents so that they are not forced to move out of their homes. This
financial support keeps the home in the family so that it can revert to
the children as a bequest. In essence, parents borrow from children
and secure the loan with their homes. The attractiveness of this arrangement compared with loans outside the family may explain why
reverse mortgages are uncommon. Although there is little evidence
of these arrangements in income surveys, financial support from children to the elderly may be in the form of gifts in kind or the direct
payment of bills; this kind of support is rarely measured as income.
In any event, the decline in measured support for the elderly by their
children may be explained by their growing financial security, a trend
that has reduced the need for both reverse mortgages and transfers
from children to elderly parents.
The asset income figures cited above do not reflect consumption
that is financed from the sale of assets. A principal rationale for
saving is to provide assets that can be drawn down during retirement. But an important consideration for the elderly is the uncertainty surrounding longevity. A plan to draw down assets that is based
on average lifespans would require disastrously low consumption in
the last years of life under the otherwise fortuitous circumstance of
living until age 90. An investment that reduces this uncertainty over




173

the lifespan of the elderly is an annuity that provides a monthly payment as long as the owner is alive. The monthly payment depends on
the amount of money invested and the age at which the annuity is
purchased. Although it has attractive features, the private annuity
market is similar to the reverse mortgage market. Private annuities
are rare, and they are often financially unattractive. The availability
of social security and pensions may explain the limited availability of
private annuities. Because both social security and many private pension benefits are in the form of an annuity, the need for other annuities is reduced.
SOCIAL SECURITY

Social security benefits are the principal source of income for the
majority of elderly Americans. Benefits comprise about 40 percent of
the income of the elderly, and for 59 percent of the elderly households they make up at least 50 percent of their income. Social security benefit levels and coverage are given in Table 5-6.
TABLE 5-6,—Social security coverage and benefit levels, selected years, 1950-83
Percent of population 65
years and over receiving
benefits
Year
Social
security1

Social
security
and/or
supplemental security
income *

Average monthly benefits at year-end
Current dollars
Retired
worker

Spouse

1983 dollars *
Retired
worker

Spouse

16

37

$43.86

$23.60

$180.91

$97.35

I960

62

72

74.04

38.72

248.25

129.82

1965

75

82

83.92

43.63

264.10

137.31

1970

86

90

118.10

61.19

302.00

156.47

1975

90

94

207.18

105.19

382.23

194.07

1980

91

94

341.41

171.95

411.07

207.04

1983

94

96

440.77

225.66

440.77

225.66

1950

.

'

.

1
Includes old-age and survivors' benefits. Disability benefits become old-age benefits beginning at age 65.
• Current dollars deflated by CPI-W.
Sources: Department of Health and Human Services (Social Security Administration) and Council of Economic Advisers.

The social security benefit formula has many features that are particularly attractive to recipients. The current formula to determine
initial benefits adjusts all previous earnings for average wage increases in the past. In other words, workers are given full credit for
productivity gains made by the economy during their working years.
Thereafter, benefits are indexed to the overall level of prices, so that
the promised benefit stream maintains its purchasing power even in
the presence of unexpected inflation. In addition, payments are in
the form of an annuity, so that they continue as long as the beneficiary remains alive. Because social security provides excellent protec-




174

tion against the major uncertainties that face elderly Americans, the
dollar amount of benefits underestimates their value to the recipients.
To qualify for social security benefits, an individual must have had
a minimum level of earnings in covered employment for a minimum
number of quarters. The minimum number of quarters has been
rising; it was 32 for those turning 62 in 1983. Benefits are financed
by a tax on both employers and employees. The benefit payments
that are available upon retirement are related to earnings during the
working years, and they are adjusted for the age and marital status of
the retiree. The relationship between taxes and expected benefits is
progressive in the sense that the average rate of return on tax payments is lower for high-wage earners who have contributed relatively
more to the system. This intentional redistribution may be offset to
some extent by the fact that members of some low-income groups
have shorter average lifespans; they are less likely to live long
enough to collect large amounts of social security. The redistributive
element of social security has recently been strengthened by the requirement that individuals who have substantial alternative sources of
income pay income tax on up to one-half of their benefits.
The social security system also redistributes income toward married couples where only one spouse is in the paid labor force, and
away from other types of households. Under the current social security law, a couple with one spouse who never works outside the home
is entitled to 150 percent of the pension that would go to a single
retiree with the same earnings history. Thus, the rate of return on
social security contributions is higher for married couples with only
one earner than for other households. In many cases, couples with
two earners receive little or no extra benefits even though they have
paid higher social security taxes; the effective rate of return on their
additional taxes is negative.
The large magnitude of social security benefits does not entirely
represent a net addition to retirement resources. To the extent that
these benefits were anticipated before retirement, individuals may
have reduced their own savings. Furthermore, the presence of benefits may induce individuals to work less than otherwise in their later
years, and lead family members to contribute less to their support.
The question of whether the social security system reduces private
saving for retirement is controversial. Because the system guarantees
a certain level of income during retirement, individuals who plan
over their entire life cycle might plan to save less during their working years if they anticipate social security benefits. On the other
hand, the social security system provides an incentive for people to
retire earlier, tending to increase the number of retirement years for




175

which saving must be done and to reduce the number of years over
which it can be done. The social security system may also affect the
amount of support that the elderly can expect from their own children, offsetting the reduction in required saving. Thus, the net effect
on private saving is uncertain.
The possibility that social security benefits may replace private
saving does not apply with full force to the current elderly; the major
increase in benefit levels enacted by the Congress in the early 1970s
was undoubtedly unexpected. Even if a 55-year-old worker responded to these essentially windfall gains by reducing private saving, it is
unlikely that the offset would be as complete as is the case of perfectly anticipated benefits. The alternative adjustment—reductions in resource flows from children to parents—is more likely. In some families these flows are reversed; the elderly provide financial support to
adult children.
People who retired during the early years of the social security
system received very high rates of return on their own contributions
because they paid payroll taxes for only a small number of their
working years. The system has now reached a mature stage where
most new retirees have made contributions for their entire working
lives. Even for this currently retiring generation, the rate of return on
contributions is quite high, primarily because of the large increase in
real benefit levels enacted by the Congress in the early 1970s.
For the present generation of workers, the prospects for earning a
high rate of return on contributions are not nearly as bright. Because
the ratio of retired individuals to the working population has increased substantially and will increase more when the baby-boom
generation begins to retire, maintaining the same benefit schedule
requires a continually increasing tax burden on the working population. The current work force is paying now for benefits to today's retirees that exceed their contributions by a substantial amount. The
baby-boom generation cannot expect to do nearly as well when it retires.
The fiscal health of the social security system, in both the short
term and long term, has recently been a cause of considerable concern. Since 1939 the system has operated on a pay-as-you-go basis,
with the benefits for current retirees being financed by taxes on current workers. Beginning in 1975, though, program expenditures exceeded revenues and long-run projections indicated a substantial permanent deficit in the social security trust fund.
These problems were addressed by legislation in both 1977 and
1983. The 1977 amendments raised contribution levels and corrected
a flaw in the indexing formula that overcompensated beneficiaries for
inflation. The Social Security Amendments of 1983 adopted most of




176

the recommendations of the National Commission on Social Security
Reform, which reported its findings to the President in January 1983.
The 1983 amendments included provisions for limiting future growth
in expenditures and increasing payroll tax revenues so as to ease both
the short-term and long-term shortfall. The Social Security Administration now estimates that the old-age, survivors, and disability programs will be in approximate balance over the next 75 years, with
surpluses accumulating until about 2020 and being gradually drawn
down thereafter. The long-run solvency of the fund depends on the
growth of real wages and the growth of the working-age population.
There is a great deal of uncertainty over these factors. The medicare
program, a social security program that is not included in these
estimates, is now projected to have growing deficits well into the next
century.
PENSIONS

Pension coverage has grown dramatically over the past three decades. In 1950 about 25 percent of the work force was covered by a
pension plan other than social security. Today more than half of all
workers are covered. Increased pension coverage has been linked to
the tax treatment of pensions, Federal freezes on wage compensation, and a 1948 ruling by the National Labor Relations Board that
employers are required to bargain over the terms of pension plans.
About 30 percent of the elderly now receive pension benefits, accounting for about 15 percent of income for all elderly persons and
about 45 percent of the income of pension recipients. Pensions will
become a much more important source of retirement income in the
future; more and more newly retired workers will have acquired pension rights because of past increases in coverage. The future role of
private pensions will be strongly influenced by the resolution of several current pension policy issues. In order to understand these
policy issues, some knowledge of the institutional features of the U.S.
pension system is required.
The Private Pension System in the United States

Pension coverage does not necessarily imply actual receipt of a
pension. Pension benefits become certain, or vested, only when the
age and tenure restrictions specified by the pension plan have been
met. There are two distinct types of pension plans. Three-quarters of
pension plan participants are enrolled in defined benefit plans that
pay a specified stream of benefit payments based on years of employment and earnings. The other type of pension plan, a defined contribution plan, pays benefits that are a distribution of an employee specific investment account that has accumulated through employer and
employee contributions. The yearly pension depends on mortality ex-




177

pectations, the contribution rate, and the performance of the plan's
investment portfolio. Employees bear the investment risk in defined
contribution plans, while defined benefit plans place investment risk
on the employer. Blue-collar workers are more likely to have defined
benefit plans as are workers in large firms and in unionized firms.
Defined contribution plans are more common among professionals
and highly paid white-collar workers than among blue-collar workers.
In some instances employees can move between employers and
remain in the same plan. These multi-employer plans are established
through collective bargaining agreements between two or more employers and a single union. These plans are prevalent in industries
where there are many small firms, where employees in an industry
are members of a common union, and where the nature of the work
frequently shifts employees from one firm to another. Many union
workers in the construction, trucking, and garment industries are
covered by multi-employer plans.
Regulation of Private Pensions

Along with the growth of private pensions came a growing concern
over the ability and willingness of firms to meet their pension promises. In some cases, employees with long service were arbitrarily
denied benefits and some defined benefit plans did not set aside
enough funds to guarantee the payment of benefits. The well-publicized collapse of some major plans prompted the Congress to enact
the Employee Retirement Income Security Act of 1974. This Act,
which is usually referred to as ERISA, established participation and
vesting standards. The law also established standards for all parties
that have control over pension plan assets to ensure that funds are
managed in the best interests of plan participants.
ERISA also created a Federal agency, the Pension Benefit Guaranty
Corporation to pay benefits when underfunded plans are terminated.
The Corporation raises funds through a premium on existing plans
and by taking over some of the assets of firms that terminate plans.
The premium, which is set by law, is now too low to cover the pension commitments that have been assumed by this Corporation. Legislative initiatives to raise the premium and close some loopholes in
current law that have allowed firms to dump pension liabilities on the
Corporation have yet to be enacted by the Congress. Currently, the
premium is based on the number of employees covered by defined
benefit plans and is a fiat rate per participant.
The current premium structure does not reflect the risk that a plan
will terminate without enough funds to pay benefits. Employers with
fully funded plans who pose little risk to the Corporation have objected to higher premiums that are not tied to legislative reform to
close the loopholes that have led to abuse. An alternative longer




178

range solution would be to develop a mechanism that would charge a
higher premium to firms that are more likely to use the Corporation
guarantee. A risk-related premium would have the added benefit of
reducing incentives to underfund pension commitments.
Amendments to ERISA established liability rules for employers
withdrawing from multi-employer plans. There have been numerous
court challenges to the constitutionality of these multi-employer
amendments. In some cases, when the owner of a business dies or
retires, or when the number of workers employed by the business declines sharply, the firm must make a substantial payment to the pension fund even though pension contributions stipulated in the union
contract have always been paid. Some small companies claim that the
withdrawal liability is greater than the value of their companies.
The Employee Retirement Income Security Act of 1974 did not
change the voluntary nature of private pension plans. No employer
is required to have a pension, and a plan may be terminated as long
as employee rights to previously accrued benefits are protected. Recently, several firms with defined benefit plans have terminated their
pensijon plans in order to gain access to assets in the plan that had
accumulated in excess of liabilities; these plans were overfunded.
This overfunding was caused by an increase in the interest rates that
are used to measure liabilities and by increases in the value of assets
held by the plans. ERISA prohibits the withdrawal of assets from an
ongoing plan, but the law allows for the reversion of excess assets to
the plan sponsor when a plan is terminated. These rules are consistent with the risk-sharing principles of defined benefit plans. Firms
bear the risk of poor portfolio performance in defined benefit plans;
they are also legally entitled to investment returns in excess of those
needed to pay benefits when a plan is terminated.
Many of the firms that terminated plans to acquire excess assets
maintained identical or similar plans after the original plan was terminated. Recent Administration guidelines clarified the obligations of
firms in these circumstances. Plan members are protected from any
future downturns in the value of assets in the pension fund after
excess assets are withdrawn by a requirement that accrued rights to
pensions be secured through the purchase of third-party annuity contracts. This ruling was very controversial. Many observers feel that
some or all of the excess assets that accumulate in a defined benefit
plan should be used for retirement benefits.
Effects of Regulation

As demonstrated in the debate surrounding excess assets, the arguments over the merits of ERISA that preceded its passage have continued. Some see the law as burdensome and unnecessary. Many opponents predicted that the law would lead to massive terminations of




179

pension plans. In fact, pension coverage has grown since the 1974
Act was passed, although at a slower rate than in the previous two
decades. Proponents see the 1974 Act as a necessary protection for
workers that has had little impact on responsible employers.
Whatever the merits of ERISA, it now governs a major segment of
the economy. The amount of funds regulated by the Act is nearly $1
trillion and is projected to grow rapidly. The bulk of these funds is
invested in corporate equities and bonds, and the remainder in government securities, mortgages, and other investments. The investment decisions made by the managers of pension plans are important
not only because they affect retirement income but also because they
affect the allocation of a significant amount of resources in the economy.
There is some evidence that pension funds have experienced low
rates of return relative to other invested funds over the past decade.
It is possible that the return to pension funds has been reduced by
restrictions that ERISA places on investments and by the incentives
faced by plan managers. The 1974 Act generally prohibits all transactions between interested parties. These prohibitions may actually
deter some investments that are in the plan's best interest. Although
exemptions to the prohibited transactions rule can be obtained from
the Department of Labor, there have been many complaints that the
process limits profitable activities because it is time-consuming and
expensive.
The incentives of fund managers have also been questioned. The
1974 Act is interpreted to preclude compensation that is based on
the performance of the portfolio under management. Because compensation is based on management fees and transactions costs, fund
managers have an incentive to engage in transactions that may not
increase the overall profitability of the fund. As pension funds grow
in importance, these incentives are receiving increasing amounts of
attention.
Rationale for Private Pensions

Why do employers offer pension plans? The tax advantages of
pension plans are one explanation, but taxes do not explain the important features of most plans. Tax advantages can be secured
through defined contribution plans that have little effect on the decision to remain with the plan sponsor, or defined benefit plans that
exert a strong influence on employee turnover. Most workers belong
to defined benefit plans; these plans are designed to provide very
strong incentives to stay with a firm up to some age and then strong
incentives to retire after that. The incentives to retire can peak at 65
or later, but many plans encourage earlier retirement. There is an
abundance of evidence that workers respond to these incentives.




180

The predominance of defined benefit plans indicates that the incentives inherent in these plans are important in explaining their existence. The preference for defined benefit plans is expressed by
both employers and employees and demonstrated in the outcome of
collective bargaining agreements.
Why do pension plans have these incentives? An answer that is
consistent with the evidence is that incentives are needed to ensure
that the worker does not stay on past the time when total wages over
a career exceed the worker's contribution to total output. Under
some wage structures, workers are paid less than the value of their
work at early stages of their careers and more than the value of their
work at the end of their careers. There are several explanations for
the divergence of pay and productivity. Some explanations are based
on the fact that employers need a way to encourage highly trained
workers to stay long enough to recoup training costs. Other explanations are based on the ability of employers to observe and reward
work only after it is completed. In some cases employers may not
want to lower the wages of older workers when their productivity
begins to decline. All explanations lead to the conclusion that the observed pattern of wages and pensions is more attractive to both the
employer and employee than a wage that increases less over a career
and is more closely tied to productivity.
Although this wage structure is beneficial to both sides in the employment relationship, it encourages complaints by older workers
even though these same workers benefited from the system when
they were younger. Workers near retirement may prefer to continue
working at high wages and accruing additional pension benefits. The
fact that this option is not available has led to complaints that pension systems discriminate against older workers. Demographic trends
have focused attention on these complaints because many people believe that the budgetary pressures on the social security system created by the baby boom can be relieved if the elderly are encouraged
to work. The elimination of pension incentives to retire is sometimes
called pension neutrality. Pension neutrality might seem like a good
idea now, especially for today's older workers, but today's younger
workers—tomorrow's elderly—could be worse off as a result because
pension neutral schemes may preclude the compensation arrangements that are most attractive to both employers and employees.
Moreover, pension neutrality might actually reduce rather than increase retirement ages in the future when demographic pressures are
even greater. Defined benefit pensions do encourage retirement at
some age. But they also postpone retirement before that age. With
pension neutrality and the wage patterns that would go with it—




181

lower wage rates for those past mid-career—workers in the future
may well choose earlier retirement dates.
Women and Pensions

The relatively high rates of poverty among elderly single women
have focused attention on the pension rights of women. About threequarters of the difference between incomes of elderly men and
women can be explained by pension income.
The financial position of elderly single women is likely to improve
in the future for several reasons. Women have entered the labor
force in record numbers in the past few decades and, consequently,
future generations of elderly women will have more income from
pensions. Recent judicial and legislative actions have also affected the
retirement resources available to women. A 1983 Supreme Court
ruling, for instance, required that pension plans make payments that
are based on gender-neutral actuarial tables. Prior to the ruling some
plans paid lower monthly benefits to women because, on average,
women were expected to collect those benefits for more years. That
actuarial adjustment is no longer allowed. The new ruling may increase
pension benefits for some women and reduce benefits for some men.
Alternatively, lump sum distributions of accumulated assets may increase, depriving some retirees of the advantages of group investment
plans.
Recent legislation has also altered the pension rights of women.
Under the Retirement Equity Act of 1984, pension plans are required
to pay a survivor's benefit to the spouse of any vested plan participant who dies. Prior to the 1984 Act, some spouses received no benefits unless the plan participant was close to retirement age at death.
The new law also requires that pension payments after retirement be
made to both the plan participant and the surviving spouse unless
both spouses elected another option. Previously, retirees could
select, without the formal consent of a spouse, a payment plan that
provided benefits only while the retiree lived. Monthly payments
were higher if this option was chosen, but the spouse received no
payments after the retiree died.
In addition, the Retirement Equity Act changed ERISA rules to accommodate what are believed to be normal career patterns of
women. Pension coverage now must begin at age 21; the previous
minimum was 25. The new law also strengthened the vesting rights
of employees who have a break in service with a single employer.
The intent of these changes was to increase the pension benefits of
women.
The debate surrounding these changes was much like the debate
over the Employee Retirement Income Security Act. Some see the
changes as valuable protections for women while others see them as




182

intrusive burdens that suppress important economic forces. Proposed
extensions of the Retirement Equity Act illustrate some features of
this debate. Many supporters of this Act want to require earlier vesting rules and plans designed so that benefits are portable, or easily
transferred among employers without loss. At present, most defined
benefit plans require 10 years of service before benefits are vested
and, even when benefits are vested, inflation rapidly erodes pension
rights acquired in a prior job.
But these features of pension plans are not accidental; they were
designed to reduce turnover. If employers cannot reduce turnover
with pension plans, they may have little interest in providing pensions especially now that individual retirement accounts offer essentially the same tax advantages. Thus, rules that require portability
and vesting could increase the pension benefits for workers who are
employed in firms that have plans, but they could also reduce the
number of firms that offer pensions.
POLICY IMPLICATIONS: PRIVATE AND SOCIAL SECURITY
RESOURCES
The economic status of the elderly is likely to improve in the
future. Tomorrow's elderly will earn more income throughout their
lives than earlier generations, and thus will accumulate more resources for retirement.
A growing fraction of retirement resources will come from private
pension plans. The coverage and security of pension plans has increased substantially since 1950. With the vesting and fiduciary
standards established by the Employee Retirement Income Security
Act and benefits insured by the Pension Benefit Guaranty Corporation, retired workers can be more confident of receiving benefits. Attention is now focusing on policies that may increase the rate of
return to pension funds. New tax rules have also made it easier and
more attractive to achieve retirement objectives. Foremost is the introduction of individual retirement accounts, which allow immediate
tax deductions and tax-exempt earnings for funds deposited in an account that is maintained until at least the age of 59 Vb. The 23 percent across-the-board reduction in marginal tax rates legislated in the
Economic Recovery Tax Act of 1981 should also stimulate private
saving by increasing the rate of return available to savers. Also important is the effectively tax-free accumulation of assets through pension funds. The objective of all these tax provisions is to induce individuals to voluntarily allocate more of their lifetime resources toward
providing an adequate standard of living in the retirement years.




183

Social security payments per beneficiary will also grow despite the
increase in the fraction of the population over 65. Because the current benefit formula gives workers full credit for all the productivity
gains made by the economy during their working lives, real benefits
per person are scheduled to triple over the next 75 years.
The aging of the population will not go unnoticed. The Social Security Administration projects that in 2040 outlays to support the
old-age, disability, and hospital insurance programs of social security
will be nearly 25 percent of taxable payroll, compared with 14 percent in 1984. More than half this increase (63 percent) is attributable
to increased outlays from the hospital insurance program. Outlays for
supplemental medical insurance which are financed primarily from
general revenues, are now equal to one-half of outlays for hospital
insurance. The rate of growth of supplemental medical insurance
suggests that its financing could require the equivalent of another 4
to 6 percent of taxable payroll. These benefits will require a significant tax increase, a substantial reduction in other government services, or an increase in total government indebtedness.
These projections have led many to conclude that private mechanisms for retirement savings must be enhanced to reduce the pressures on both the retirement and medical programs of the social security system. Many proposed changes in the private pension system
have been advocated with this objective in mind. Such proposals include mandatory universal coverage, earlier vesting rules, legislation
to increase the portability of pensions, and the elimination of private
pension incentives to retire. These approaches are unlikely to significantly increase private retirement resources. Because pensions are
only one part of a life-cycle retirement plan, a mandated increase in
saving through pensions may be largely offset by reductions in other
forms of private saving. In addition, many restrictions on pensions
may end employers' willingness to offer them, defeating the original
objective of the restrictions entirely. Mandatory coverage is not the
answer to this problem, however. The firms that do not now offer
pensions, particularly small firms in the service sector, would be especially burdened if pension costs were imposed on them. The cost
of establishing a pension plan tends to be relatively high for smaller
firms, and their generally higher turnover rate adds further to the
cost of administering a long-term contractual relationship. It does
not make sense to penalize that sector which has provided much of
the remarkable employment growth that has occurred in this country.
Pressure on the social security system should not be reduced by limiting employment opportunities in a particularly dynamic sector of
the economy.




184

The retirement incentives inherent in social security have also been
questioned in light of demographic pressures on the system as a
whole. The current social security system discourages work past the
age of 65, and it encourages the elderly to seek part-time rather than
full-time work. These features of social security were incorporated
into the system when it was believed that older workers must be encouraged to leave the labor force in order to make room for new
workers. The remarkable ability of the economy to absorb the new
workers of the baby-boom generation and the new work patterns of
women has refuted this fallacy. The energy and experience of the elderly represent an important national resource, and current policies
unnecessarily discourage work even from those who are able and
willing to be productive members of the labor force.
Some progress toward reducing the work disincentives in the social
security system was made in the 1983 amendments. A modification of
the earnings test is scheduled to reduce the implicit tax on earnings
over the exempt limit from one-half to one-third starting in 1990. Serious consideration should be given to continuing the scheduled decrease and eliminating the earnings test entirely. Opposition to this
proposal is often based on the fear that social security outlays would
increase if the earnings test were eliminated. Higher social security
payments to those who now work part time would increase social security payments. That increase would be offset to some extent by the
additional social security and income taxes paid by all those aged 62
and over who increase their hours of work and by reductions in delayed retirement credits. The net effect on total social security outlays is uncertain. But even if the earnings test does reduce budget
outlays, it is still hard to defend. The earnings test reduces the contribution of the elderly to the total output of the economy. It does
not make good economic sense to curtail social security outlays by
reducing the base that provides for transfers to the elderly.
The 1983 amendments will also reduce the current system's strong
disincentives to work after the age of 65 by increasing the amount
that is added to monthly benefits when workers postpone retirement.
The late retirement benefit will be increased gradually beginning in
1987. When those increases are complete, the additional amount that
is given to late retirees will be enough to make up for the fact that
benefits begin at a later date. Full-time work after the age of 65 will
no longer be penalized. In addition, the age at which the full primary
benefit is payable will be raised from 65 to 67 gradually between the
years 2000 and 2022. These changes will help to neutralize the
impact of the social security system on a worker's decision to retire.
The retirement incentives provided by private pension plans—incentives that vary considerably across firms—can be justified on the




185

ground that they create a bond between employers and employees
that increases productivity and benefits both parties. This reasoning
does not apply to social security. The social security benefit structure
should not penalize workers who postpone retirement.
The economic status of the elderly has clearly improved over the
past three decades. The elderly can now work less and still enjoy a
higher standard of living than the elderly in the past. With good retirement policies that promote the efficient use of all resources, tomorrow's elderly will be even more secure. The 1983 amendments
provide a start in improving the efficiency of the social security
system. By reducing the current disincentives to work facing the elderly, these changes will reduce their dependence on social security
and simultaneously encourage the efficient use of one of the Nation's
most valuable resources, the elderly.




186

CHAPTER 6

The Market for Corporate Control
THE SUCCESS OF THE AMERICAN ECONOMY depends on
competition. Competition stimulates managers to respond to rapidly
evolving technologies. Competition requires that firms adapt to
changing market demands and calls upon them to adjust to fluctuating capital market conditions. Competition breaks down entrenched
market positions, unsettles comfortable managerial lives, and provides incentives for innovative forms of business organization and finance. In sum, competition plays a central role in the evolution of
the economy: It promotes efficient modes of production and eliminates processes and organizational structures that have outlived their
usefulness.
CONTROL OF PUBLICLY TRADED CORPORATIONS
Competition plans a particularly important role in the market for
control of publicly traded corporations. This market determines who
will operate the Nation's largest business enterprises and influences
the business strategies that many of these organizations follow.
The Nation's economy is strongly influenced by the performance of
these publicly traded corporations. As of year-end 1983, the market
value of the securities of these corporations amounted to $2.5 trillion, about 22 percent of the value of the Nation's total asset base.
With such a large portion of the Nation's wealth and productive capacity represented by these publicly traded corporations, the Nation
has a compelling interest in maintaining their competitive and efficient economic performance.
These corporations are generally owned by stockholders who delegate substantial decisionmaking authority to a group of hired managers. Managers make the corporation's investment, pricing, production, and research and development decisions, and are primarily responsible for the corporation's success or failure. Typically, managers own a relatively small percentage of the firm's shares.
This delegation of authority from stockholders to management is
highly efficient. It fosters specialization that allows managers to develop substantial firm-specific human capital. It also promotes devel-




187

opment of a class of talented professional managers knowledgeable
about the operation of large, complex organizations. In addition, it
reduces the costs of diversifying investors* portfolios and facilitates
mobility of financial resources among corporations competing for
capital. Indeed, separation of ownership and control has been a
major reason for the success of the modern corporate form as a business entity.
The delegation of authority from stockholders to management is
not, however, without risk to stockholders and the economy at large.
In particular, the delegation creates a possibility that management
will operate the corporation in management's best interests, and not
in the best interests of the corporation's stockholders. Such divergences of interest can result because stockholders are concerned primarily with maximizing the value of their shares, while managers' incentives are often more complex and can involve assurances of continued employment by an independent, publicly traded corporation.
These divergent incentives can give rise to an agency problem
within the corporation—a situation in which managers are poor
agents for their stockholders because they do not act in the stockholders' best interests. The adverse consequences of this agency
problem can be significant because, if unchecked, it can deter socially
beneficial mergers, keep assets from being allocated to higher valued
uses, impede adoption of more profitable capitalization plans, and
otherwise prevent publicly traded corporations from making the largest possible contribution to aggregate economic performance.
INCENTIVES AND CORPORATE MANAGEMENT

The market generally relies upon two sets of incentive mechanisms
to align management and stockholder interests. The first results from
the operation of the labor market for management services. In this
market, executives are hired and fired and compete for career opportunities. Here, corporations also establish incentive systems designed
to stimulate employee productivity and, in order to align management and stockholder interests, often grant stock options to key management personnel.
There are, however, substantial limits to the practical effectiveness
of this labor market. In particular, a management team may believe
that it is maximizing the value of the corporation when, in fact, it is
not. Under these circumstances, management will not change corporate strategy on its own accord. Moreover, unless stockholders independently conclude that corporate performance can be improved by
changing management teams, and unless some stockholders mount
an expensive proxy contest to oust incumbent management, a change
in corporate strategy is unlikely to occur. The labor market for man-




188

agement services can thereby allow a corporation to continue to be
controlled by an entrenched management that does not maximize the
value of the corporation's shares.
Under these circumstances, the external market for corporate control provides an important set of checks and balances. In this market,
bidders directly approach stockholders and offer to purchase the corporation's shares at a premium above market price. These bidders
often install new management in the event their bid succeeds. In
some cases the bid is made directly by a new management team that
believes it can improve the target corporation's performance.
The best assurance an incumbent management has against a successful takeover attempt is a stock price that is high relative to outsiders' estimates of the potential value of the corporation's shares.
Managements that allocate capital to higher valued uses, operate efficiently, and adopt capitalization structures responsive to prevailing financial market conditions are less likely to be subject to takeovers
than other management groups. Consequently, in order to prevail in
the external market for corporate control, it is not enough that an
incumbent management believes that it is doing a proper job, or that
it persuades stockholders that it is doing so. Instead, management
must demonstrate that its performance is competitive with the performance of other potential managers, and the value of management's performance must be reflected in the corporation's stock
price. In this fashion, the external market for corporate control disciplines managers who believe they have maximized the value of the
corporation's shares when, in fact, they have not.
Contests for corporate control are not, however, motivated solely
by opportunities to improve management. As discussed below, takeovers can occur because of divergent estimates of future economic
trends, opportunities to capitalize on economies of scale, distribution
efficiencies, tax factors* and myriad other reasons. Therefore, even
well-managed companies may find themselves subject to contests for
corporate control that can be economically rational and beneficial for
the economy as a whole.
RECENT TAKEOVER EXPERIENCE

The potential for divergent stockholder and management interests
is most striking in hostile takeover attempts. In a hostile takeover attempt a bidder offers stockholders a substantial premium for the corporation's shares. In response, target management opposes the bid
and typically resorts to defensive tactics such as litigation against the
bidder, the sale of new securities to investors committed to support
incumbent management, the repurchase of shares already owned by
the bidder, or numerous other transactions. If successful, the defense




189

can leave management in continued control of the target corporation. However, as explained below, management's success in maintaining the corporation's independence comes at a high price for
target stockholders who typically suffer substantial losses when a bid
is defeated.
THE DEBATE OVER CONTESTS FOR CORPORATE CONTROL

Takeovers have recently become the subject of extensive debate in
the Congress, among executives of the Nation's largest corporations,
and in the media. The debate has been stimulated, in part, by a rapid
increase in the size of corporations involved in takeover battles and
by the evolution of new and controversial takeover techniques.
As explained below, recent financial and legal developments have
made many of the largest publicly traded corporations susceptible to
takeovers. Managements of these corporations have historically perceived themselves as acquirers and not as potential takeover targets.
The recent exposure of these corporations to the discipline of the
market for corporate control has caused substantial controversy and
has stimulated calls for legislation that would deter takeovers attempted without a target management's approval. Some critics of the
takeover process also claim that bidders use tactics that are designed
to coerce stockholders into selling their shares, and that regulations
governing bidder practices provide insufficient time for stockholders
and management to evaluate and respond to takeover attempts. More
fundamentally, critics of the takeover process question whether takeovers are beneficial for the economy. They suggest that many takeovers result from a pursuit of paper profits that does not contribute to
productivity. They also suggest that takeovers can damage the economy because they can increase potentially anticompetitive concentration of market power, distort the credit market, and reduce incentives
for long-term investment.
Management defensive tactics are also often criticized. In particular, managements faced with unwelcome takeover attempts sometimes repurchase the would-be acquirer's shares at a premium over
the market. This practice, commonly known as greenmail, can preclude a takeover premium from being paid to target stockholders
whose shares are not repurchased. In other situations, target managements have sold additional stock to new shareholders who commit
themselves to support management interests. Target managers have
also filed numerous lawsuits opposing takeovers, and have mounted
competing tender offers for the potential acquirer's shares. Critics
object to these practices because they can be used by management to
protect its tenure at stockholders' expense.




190

The outcome of this debate over takeover tactics is significant for
the economy as a whole. The set of tactics permissible in contests for
corporate control determines both the probability that takeover attempts will be made and the probability that they will eventually succeed. To the extent that government regulations impose costs on
bidders, or reduce a bidder's chances for success, fewer takeover attempts will be made. This tends to insulate corporate managements
from the competitive pressures of the external market for corporate
control. Stockholders, as a group, will also suffer as a result of excessive regulation because it reduces the chance to earn takeover premiums. However, to the extent that takeover practices are abusive,
either because they allow bidders to acquire corporations through
manipulative means, or because they allow entrenched managements
to defeat takeovers that are in stockholders' and the economy's best
interests, certain controls may be appropriate.
POLICY CONSIDERATIONS

The central policy question regarding takeovers should be whether
the benefits to the economy as a whole resulting from takeovers
exceed their costs. As explained below, there is powerful evidence
that takeovers as a group are beneficial. This evidence does not,
however, suggest that takeovers are without costs or dangers. In particular, if the antitrust laws are not properly enforced, takeovers can
lead to anticompetitive accumulations of market power.
Although extensive research has established that takeovers tend to
be beneficial, not every takeover is successful in attaining its originally contemplated benefits, and there are many examples of takeovers
that, in hindsight, appear to have been misguided. Takeovers should
not, however, be singled out in this regard because investments in
physical plant, research and development, petroleum exploration,
and numerous other activities also often appear misguided in hindsight. However, because it is impossible to predict which takeovers
will be unsuccessful, the takeover process must be evaluated in the
aggregate, and cannot be assessed on the basis of isolated examples
of failure or success.
In addition, even when takeovers succeed, some individuals and
communities may be adversely affected if jobs are lost or plants and
offices are shut down. The problems raised by such reallocations of
assets are a proper subject of social concern, but they are not unique
to takeover transactions. Instead, they result from the economy's
need to adapt to changing circumstances. To the extent that takeovers are associated with reallocations that impose particularly high
costs on specific individuals or communities, the appropriate govern-




191

ment response, if any, should be to ease local adjustment problems
rather than to interfere with the takeover process itself.
Contests for corporate control are largely economic phenomena,
and they can and should be understood as such. The policy debate
need not be guided by anecdotal evidence that emphasizes isolated
incidents that some critics perceive as abusive. Contests for corporate
control have been studied in great detail, and this accumulated
knowledge provides a foundation for sound public policy. Although
much additional research remains to be done, and although there are
not adequate explanations for all phenomena observed in the takeover market, the current state of knowledge strongly indicates that further Federal regulation of the takeover process, particularly insofar as
it would make takeovers more costly, would be poor economic policy.
The remainder of this chapter assesses* the economy's recent experience with mergers and acquisitions, describes the debate over certain
practices employed in the market for corporate control, and evaluates
proposals for further Federal regulation of this market.
MERGER AND ACQUISITION ACTIVITY IN PERSPECTIVE
Contests for corporate control are part of a larger merger and acquisition process that plays an important role in the economy's adjustment to changing market circumstances. Merger and acquisition
activity historically has run in cycles, with peaks occurring during periods of strong business growth. The first recorded peak in merger
and acquisition activity occurred at the turn of the century, as the
Nation recovered from the depression of 1893 and before it slipped
into the recession of 1904. A second peak occurred between 1925
and 1930, a period of rapid economic growth followed by the Great
Depression. Merger and acquisition activity remained subdued during
the Depression and World War II. After 1945 the number of business combinations began a steady increase that culminated in a
merger wave spanning the late 1960s and early 1970s.
Data describing the number and value of merger and acquisition
transactions are presented in Table 6-1. Those data show that recent
merger and acquisition activity, as measured by the number of reported transactions, has been at a rate less than half that reported in
the 1960s. Although the number of transactions remains below previous peaks, the total value of merger and acquisition transactions has
recently reached new highs. The announced value of merger and acquisition transactions reported in the first 9 months of 1984 was
$103 billion. On an annualized basis measured in constant 1983 dollars, this activity represents $133 billion in mergers and acquisitions,
an increase of about 19 percent over the previous peak recorded in




192

1968. Indeed, the average annual reported real value of mergers and
acquisitions during 1981-84 is approximately 48 percent greater than
the average reported during any 4 years of the late 1960s and early
1970s. Thus, fewer transactions have been generating a relatively
large dollar volume of merger and acquisition activity.
TABLE 6-1.—Number and value of merger and acquisition transactions, 1963-84
[Values are in billions of dollars]
FTC estimates of acquisitions of large firms in
mining and manufacturing 1
Year

W.T. Grimm & Co. estimates of merger and
acquisition activity

Value of assets exchanged
Number of
transactions

Constant
(1983) dollars

Nominal
dollars

Number of
transactions2

Value of consideration
exchanged 3
Nominal
dollars

Constant
(1983) dollars

1963
1964

54
73

2.5
2.3

7.6
6.9

1,361
1,950

4
<4 >
( )

1965
1966
1967
1968
1969

64
76
138
174
138

3.3
3.3
8.3
12.6
11.0

9.4
9.3
22.5
32.8
27.4

2,125
2,377
2,975
4,462
6,107

( 44)
<4)
<)
43.0
23.7

(4)
(4)
<4>
112.2
58.8

1970
1971
1972
1973
1974

91
59
60
64
62

5.9
2.5
1.9
3.1
4.5

13.9
5.5
4.1
6.4
8.4

5,152
4,608
4,801
4,040
2,861

16.4
12.6
16.7
16.7
12.5

38.6
28.3
36.0
34.0
23.4

1975
1976
1977
1978....
1979

59
82
101
111
97

5.0
6.3
9.2
10.7
12^

8.5
10.3
14.1
15.4
17.0

2,297
2,276
2,224
2,106
2,128

11.8
20.0
21.9
34.2
43.5

20.2
32.5
33.7
49.0
57.3

1980
1981
1982
1983

(4)
(*)
4
(4)
( )

(J

<4)
<44)
(4 )
t)

1,889
2,395
2,346
2,533

44.3
82.6
53.8
73.1

53.5
90.9
55.9
73.1

1984:
9 months
Annualized

<44)
( )

V

1
)
)

(4)
(4)

(4)
99.5
1,899
103.2
{<
132.6
137.6
2,532
( )
V
1
"Large" firms are defined as those with assets of $10 million or more. Excluded from the tabulation are firms for which
asset data are not publicly available.
8
The W.T. Grimm & Co. tabulations measure only publicly announced transactions and include transfers of ownership of 1Q
percent or more of a company's assets or equity, provided that the value of the transaction is at least $500,000.
3
Includes only those transactions for which valuation data are publicly reported.
* Not available.
Source: Federal Trade Commission (Bureau of Economics) and W.T. Grimm & Co.
4

The large dollar volume of recent merger and acquisition activity is
attributable primarily to a substantial increase in the size of the largest individual transactions, most of which involve publicly traded corporations. Of the 100 largest merger and acquisition transactions recorded through year-end 1983, measured in nominal terms, 65 occurred between 1981 and 1983, 24 occurred between 1979 and 1981,
and only 11 occurred prior to 1979. Prior to 1976 the largest acquisition on record, measured in constant 1983 dollars, had a value of
$3.3 billion. Today, the record stands at $13.3 billion. Indeed, transactions with a nominal value in excess of $1 billion used to be rare
and only 12 such transactions were recorded in the 12-year span




193

from 1969 to 1980. However, between 1981 and 1984 alone, there
have been at least 45 such transactions.
These large mergers tend to be focused in specific industries. As
Table 6-2 explains, five industries that account for less than 10 percent of national income—petroleum, banking and finance, insurance,
mining and minerals, and food processing—accounted for one-half of
all the consideration reported paid in mergers and acquisitions between 1981 and 1983.
transactions, by industry, 1981-83
TABLE 6-2.—Value of merger and acquisition
Nominal value
(billions of
dollars)

Industry classification of seller
Oil and gas
..
Banking and finance
Insurance
Mining and minerals
Food Drocessinc
Conglomerate
Transportation ..
Broadcasting

Cumulative
percentage

44.2
23.4
16.5
14.2

Retail
Brokerage and investment firms
Other....
Total

3.8
3.6
3,3
2.7

50.8
54.4
57.6
60.3

2.5
2.4
34.8

62.8
65.2
100.0

209.5

.

21.1
32.3
40.2
46.9

5.3
5.1
72.8

....

21.1
11.2
7.9
6.8

8.0
7.5
6.8
5.6

.

..

Percent of
total

l

100.0

1

Includes only those transactions for which valuation data are publicly reported. See Table 6 - 1 , footnote 2.
Source: W.T. Grimm & Co.

Transactions in the petroleum industry have been particularly notable for their size. Between 1981 and 1983 the reported value of petroleum industry mergers and acquisitions exceeded $44 billion. This
accounts for more than a fifth of the value of mergers and acquisitions during that period. The pace of merger activity in the oil industry continued to be rapid into 1984, when $29.2 billion was paid in
three transactions alone. The Federal Trade Commission has concluded that merger and acquisition activity in the petroleum industry
is attributable largely to changes in underlying market conditions.
Among these changes are wider use of enhanced oil recovery techniques, divergent expectations concerning the future movement of
crude oil prices, and phased decontrol of crude oil. In addition, the
recent decline in demand for petroleum products has created excess
capacity in the industry. Such excess capacity may make consolidation
in the petroleum industry efficient and desirable. Some recent petroleum
industry mergers are a part of that consolidation process.
In other industries, mergers and acquisitions are responses to new
opportunities created by deregulation. Deregulation in the banking,
finance, insurance, transportation, brokerage, and investment industries has opened new opportunities for distribution economies, as
well as economies of scale and scope that can be achieved by mergers
and acquisitions. Together, these recently deregulated industries ac-




194

count for about 25 percent of all merger and acquisition activity between 1981 and 1983.
A significant percentage of recent merger and acquisition activity
thus appears to be related to competitive pressures to adapt to new
market conditions. Accordingly, any policy that would influence
merger and acquisition activity must recognize the valuable role these
transactions play in allowing industries to adapt to changing circumstances and the costs that can be imposed by inhibiting such responses.
Another distinguishing characteristic of current merger experience
is the prevalence of divestiture transactions. In a divestiture transaction, a parent corporation either spins off a subsidiary as a freestanding entity or sells it to another firm. Divestiture transactions
currently account for about one-third of both the number and value
of all merger and acquisition transactions.
Divestitures often occur when firms undo prior acquisitions that
did not work out as planned, or when firms decide to raise cash to
reduce debt generated by earlier acquisition programs, or to invest in
new projects. In addition, many divestitures are currently designed to
focus the parent corporation's operations in their most profitable
lines of business. This represents a trend away from the conglomerate-type mergers characteristic of the late 1960s and early 1970s and
toward less diversified corporate structures that focus on product
lines in which the corporation has a relatively strong market position.
Current merger and acquisition activity is further characterized by
a larger number of leveraged buyout and management buyout transactions. In a leveraged buyout, the acquiring firm borrows a large
percentage of the purchase price by pledging the assets of the acquired firm as collateral for the loan. In a management buyout, the
acquiring company is owned in whole or in part by the management
of the acquired firm. Because management buyouts are often accompanied by substantial borrowing, management buyouts are also commonly leveraged buyouts.
Although leveraged and management buyouts are not novel, they
are being used with increasing frequency in the acquisition of publicly traded firms. The value of leveraged buyouts of publicly traded
companies increased rapidly from $636 million in 1979 to $7.1 billion in 1983. In 1983 leveraged buyouts accounted for about 19 percent of all takeovers of publicly traded companies and about 18 percent of the market value of those takeovers.




195

BENEFITS AND COSTS OF TAKEOVER TRANSACTIONS
Public policy toward takeovers should depend on whether these
transactions benefit the economy. If, on balance, they promote efficient allocation of resources, the transactions are beneficial and
should not be impeded by Federal or State policy. In contrast, if the
costs of these transactions exceed their benefits by, for example,
wasting scarce resources or causing anticompetitive increases in
market power, then regulation of the takeover process may be appropriate.
The available evidence, however, is that mergers and acquisitions
increase national wealth. They improve efficiency, transfer scarce resources to higher valued uses, and stimulate effective corporate management. They also help recapitalize firms so that their financial
structures are more in line with prevailing market conditions. In addition, there is no evidence that mergers and acquisitions have, on
any systematic basis, caused anticompetitive price increases.
These findings are consistent with the possibility that some individual transactions turn out to be misguided and generate losses for the
economy at large. Public policy should not, however, be based on the
outcomes of individual transactions, because it is impossible to predict in advance which transactions will succeed and which will fail.
Public policy therefore must be based on aggregate trends describing
the consequences of takeovers as a whole. On this criterion, there is
no economic basis for regulations that would further restrict the
merger and acquisition process. Indeed, the economic evidence suggests that existing regulations impose restraints that may deter potentially beneficial transactions.
STOCK MARKET PRICES AS A MEASURE OF BENEFITS AND COSTS

Ideally, a study of the costs and benefits of takeover transactions
would evaluate the gains and losses resulting from each transaction
on a case-by-case basis. In addition, each takeover transaction would
be evaluated by objective and well-informed observers with strong incentives to render accurate and unbiased estimates of each transaction's likely consequences. Such an evaluation would also look
behind the accounting techniques and book values employed by the
parties, and would arrive at an assessment based on current market
values and best estimates of future market trends.
In many ways, the behavior of prices quoted in the stock market
provides just such an evaluation of the probable consequences of a
takeover transaction. In the stock market, each takeover transaction is
evaluated on its own merits by investors who, because they stand
behind their assessments with real dollars placed at risk, have a pow-




196

erful incentive to judge accurately the outcome of individual takeover
transactions. It is also well established that the stock market sees
through accounting techniques and bases its evaluations on underlying market values. Moreover, there is extensive evidence that the
stock market rapidly absorbs any information contained in the historic price patterns of stock trades. Therefore, even if the stock market
goes astray in its assessment of the likely consequences of takeover
transactions, such deviations would give rise to arbitrage opportunities that would return the market to a more unbiased and objective
perspective. The market's evaluation of takeover transactions is
therefore self-correcting over time.
Stock market prices thereby provide a reliable barometer of the
likely consequences of takeover transactions. If the aggregate net
change in the value of acquirers' and targets' shares is positive as a
result of a takeover, then the transaction creates wealth and is beneficial. If the aggregate net change is negative, the transactions reduce
wealth and are harmful.
EVIDENCE THAT TAKEOVERS ARE BENEFICIAL

The evidence is overwhelming that successful takeovers substantially increase the wealth of stockholders in target companies. Although
estimates of the magnitude of the wealth increase vary, recent studies
find average gains in the range of 16 to 34 percent of the value of
the targets' shares.
The data regarding changes in the value of acquiring companies
are not as uniform, but the best available evidence strongly confirms
that the value of acquiring companies* shares also increases as the
result of takeovers. A recent study of takeovers of 249 New York and
American Stock Exchange traded companies concluded that the average stock price gain to bidding stockholders is about 2.3 percent. Although this gain appears small, especially in comparison with the
gains accruing to target stockholders, it masks a significantly larger
return on the assets acquired by the purchasing firm.
On average, an acquiring firm is four to five times larger than the
firm it purchases. Because of this size difference, the average 2.3 percent gain in the stock price of the acquiring firm translates roughly
into a 9 to 11 percent average return on the assets of target firms to
bidding stockholders.
These results are consistent with the operation of an efficient capital market. On average, and over the long run, bidders will not
desire or be able to complete acquisitions unless the acquisitions are
profitable for the bidding firm. Indeed, bidders often terminate or
reduce the price of their offers when scrutiny of the target leads
them to conclude that the initial offer price was too high. Target




197

stockholders will similarly refuse to sell their shares unless their
wealth increases as a result of the transaction. Economic theory
therefore suggests, and the available evidence confirms, that merger
and acquisition transactions are, on average, beneficial for stockholders in both bidder and target firms.
SOURCES OF GAIN FROM TAKEOVER ACTIVITY

The evidence is strong that takeovers generate aggregate net benefits to the economy. Although many potential sources of gain from
these transactions can be identified, it is difficult to quantify the size
of the gain that results from particular sources.
Production and distribution economies are one source of gain,
particularly in transactions involving firms in related industries. An
acquisition can also generate economies of scale and create opportunities for more efficient forms of distribution and contracting. Mergers and acquisitions can also promote technology transfers that might
otherwise be unavailable to firms operating on a stand-alone basis.
For example, some petroleum acquisitions have led to the transfer of
enhanced recovery techniques that have improved yields from aging
petroleum reservoirs. In addition, many recent studies have found
that companies with larger market shares also have lower per unit
costs. These studies suggest that the cost-reducing effects associated
with larger market shares more than offset the increased prices that
can, in some circumstances, result from having an industry composed
of fewer firms with larger market shares.
Substantial gains can also result when a takeover causes assets to
be shifted to higher valued uses. A retail chain may, for example,
possess real estate that is more valuable as office sites than retail outlets. Although the retail chain may be well managed, if the company
announces that it will not sell its real estate or put it to any use other
than retailing, then the market has little incentive to value the firm's
real estate at its current market price. Even if the market believes
that it is inevitable that the firm's real estate will eventually be put to
a higher valued use, the stock market will substantially discount the
property's current market value because of uncertainty over when the
transaction will occur and the price that the real estate will bring
when sold. The announcement of a takeover attempt at a firm price
eliminates much of this uncertainty and can account for a significant
portion of the gains resulting from mergers and acquisitions.
Improved management is another possible source of gain from
mergers and acquisitions. Evidence suggests that the stock price of
target firms tends to fall over long periods well before a takeover attempt is announced. These firms may be disfavored by the market
because they suffer from poor management. Takeovers of these firms




198

can discipline managements and impose new corporate strategies in
place of unsuccessful ones. These findings do not establish that all
target firms are poorly managed, and they do not suggest that management efficiencies are the dominant source of gain from mergers
and acquisitions. They do, however, suggest that poor management
at target firms cannot be discarded as a motive for takeovers, and
that restraints on takeover activity can protect inefficient managers
from the discipline of the marketplace.
DANGERS OF MERGER AND ACQUISITION ACTIVITY

Currently, four economic criticisms of takeovers are frequently
voiced. They are that: (1) takeovers increase concentration and have
adverse effects on competition; (2) tax-motivated takeovers can generate economic losses for the economy; (3) takeovers can crowd productive business projects out of capital markets; and (4) takeovers
can create incentives for management to concentrate on short-term
performance to the detriment of long-term corporate investment.
Effects on Competition and Concentration

There is no evidence that recent merger and acquisition transactions have caused anticompetitive price increases. The Department of
Justice and the Federal Trade Commission engage in careful marketby-market analyses of mergers that raise a possibility of anticompetitive effects. These agencies have actively opposed mergers that have
threatened to create anticompetitive market power. In addition, so as
to assure continued competition in the marketplace, the antitrust enforcement agencies have required billions of dollars of divestitures
in connection with large mergers and acquisitions.
Indeed, in order to contend that recent takeovers have been anticompetitive, critics would have to demonstrate that public and private enforcement of the antitrust laws has been inadequate. There is,
however, no credible evidence that the antitrust laws have permitted
business combinations that have resulted in any material lessening of
competition. To the contrary, a recent study of the U.S. economy,
conducted on a market-by-market basis, has found a widespread increase in competition between 1958 and 1980. In 1980 approximately three-quarters of economic activity occurred in effectively competitive product markets. About 20 percent of economic activity occurred
in markets that are tightly oligopolistic, and only 5 percent occurred
in markets dominated by a single firm. In contrast, in 1950, only
about one-quarter of economic activity occurred in markets classified
as competitive.
At the aggregate level, there is also no systematic evidence that
merger and acquisition activity has, in any meaningful sense, caused
a decrease in competition. Instead, the most recent data compiled by




199

the Federal Trade Commission, and presented in Table 6-3, show
that in the 5-year period from 1977 through 1981 concentration of
assets in the nonfinancial sector fell for the 50, 100, 150, and 200
largest firms.
TABLE 6-3.—Concentration of assets in the nonfinancial sector, 1977-81

[Percent]
Asset size group

1977

1978

1979

1980

1981

Top 50....

22.7

22.3

21.9

22.4

22.2

Top 100..

29.7

29.2

28.9

29.4

28.8

Top 150..

35.5

34.0

33.7

34.0

33.3

Top 200,.

38.3

37J

37.4

37.7

36.9

Source: Federal Trade Commission (Bureau of Economics), based on data from Compustat and Internal Revenue Service
"Statistics of Income."

The relative stability often found in aggregate concentration series
is, however, deceiving because it masks substantial turnover in the
rank and identity of the largest firms. For example, of the 500 largest
industrial firms measured in terms of 1955 sales (as reported in Fortune magazine), only 262 remained in the top 500 in 1980. Thus, individual firms find the marketplace much more competitive than aggregate concentration data suggest: A large market share today is
hardly a guarantee that a firm will be able to retain that share in
the face of new competition, changing markets, and evolving technology*
Tax-Motivated Mergers and Acquisitions

Takeovers can result in tax savings for the combined firm. For example, an acquisition may allow the combined company to make
better use of tax loss carryforwards, as well as depreciation deductions and investment tax credits generated by new investment programs. Occasionally, a takeover bid will be accompanied by a proposal to reorganize the company or to spin off assets according to a plan
designed to reduce the company's and stockholders* tax liabilities.
These tax incentives for mergers raise difficult policy issues. Because tax laws generally prevent the transfer of deductions and credits among corporations, as well as between corporations and their
stockholders, and because tax losses are not refundable, some firms
have an incentive to enter into transactions that would not occur but
for their tax consequences. Some of these mergers may make little
economic sense in the absence of their tax benefits. Accordingly, it is
possible that the economy may, as measured by the efficient allocation of resources, be better off without these transactions.
On the other hand, for some companies such transactions provide
a means of avoiding at least a portion of the adverse consequences




200

associated with nontransferable tax benefits. To that extent, tax-motivated transactions may actually reduce the risk associated with certain
investment strategies and thereby ameliorate some of the distortions
induced by the current tax system.
The solution to the potential problems raised by tax-motivated
transactions is not, however, to place restraints on mergers and acquisitions. Instead, consideration should be given to modifications of
the tax laws that would allow greater transferability of deductions
and credits. Such modifications will remove a source of distortions
inherent in the current tax system and eliminate incentives to engage
in takeovers that are primarily tax motivated.
Effects on the Availability of Capital

Mergers and acquisitions are often financed by substantial borrowing. Concern is frequently raised that this borrowing, particularly for
large takeovers, crowds out more productive applications of bank financing. This concern is unfounded.
As an initial matter, it should be recalled that takeover activity is
productive and adds to aggregate wealth. In addition, takeover activity is, in essence, no different from other investment activities in
which investors place money at risk by purchasing existing assets,
such as real estate or shares of stock. Moreover, the borrowing required for corporate acquisitions does not impose a net new credit
demand of equal magnitude on financial markets, because the proceeds are paid to stockholders of the acquired company who use the
funds to make other investments or retire other loans. Thus, large
portions of borrowings used to finance acquisitions flow back into
the capital markets where they again finance credit needs.
The amount of borrowing used for large corporate transactions is
also small relative to the size of the total capital market. During the
first 7 months of 1984, a particularly active period for leveraged takeovers, loans for the purpose of completing large acquisitions amounted to about $21.2 billion. This constitutes about 1.3 percent of the
$1.65 trillion of commercial bank loans and investments outstanding
during the same period, and a substantially smaller percentage of aggregate borrowing in the economy. Such loans are unlikely to have
more than minor, isolated, and transitory effects on interest rates or
on the availability of capital.
Effects on Long-Term Investment by Publicly Traded Companies

Recently, some critics have complained that takeovers reduce longterm business investment. They contend that the stock market undervalues long-term investments. Therefore, in order to prevent takeover attempts induced by allegedly low and "unreasonable" stock




201

market valuations, it is said that managers of publicly traded firms
avoid long-term investment projects.
Although this argument is presented by leading executives and
prominent takeover attorneys, there is no credible evidence to support it. Proponents of this theory have presented no examples of
long-term investments that have been forgone because of a fear of
takeovers. Indeed, even if such examples could be found, they would
not constitute a loss to the economy unless other firms did not have
comparable incentives to make the allegedly forgone investments.
This criticism of takeovers is also internally inconsistent. If a company continually avoids long-term investment, eventually it becomes
unable to compete with other firms that have engaged in the appropriate forms of long-term investment. Thus, if a company seeks to
maintain its stock price valuation in order to avoid a takeover, then at
some point it must engage in appropriate forms of long-term investment simply to remain competitive.
There is also substantial evidence suggesting that the stock market
does not penalize investment simply because it is long term. The
stock prices of many publicly traded companies reflect high priceearnings ratios because of the market's assessment that these companies' long-term investment programs may be successful. The fact that
some companies' long-term investments do not enhance the value of
their shares reflects the market's assessment of the likely outcome of
the particular investment programs, and is not a criticism of the longterm nature of the program per se. In addition, there is substantial
evidence that the market accurately reflects all publicly available information about a corporation's finances and strategic plans. Because
research and development, capital expenditure, and other long-term
investment information is publicly available, the evidence suggests
that these data are accurately incorporated into the stock market's
valuation of a corporation's shares along with other publicly available
information describing a corporation's prospects.
REGULATING BIDDER TACTICS
Recent calls for regulation of bidder tactics in takeover contests are
based on claims that some tactics are coercive, and that they fail to
allow stockholders adequate time to inform themselves about the bidder's offer. Critics also claim that target managements do not have
adequate time to mount defenses against proposed takeovers. In addition, some critics question whether takeovers are, on the whole,
beneficial for the economy. These critics suggest that takeovers
should be subject to regulations that would make them more expensive and difficult to complete.




202

There is, however, little credible economic evidence that tactics
used by bidders in takeover contests should be subject to further regulation. To the contrary, the available evidence is that any regulatory
change that would increase the cost of mounting takeovers is likely to
deter takeovers and thereby cause losses for the economy. Viewed
from this perspective, proposals to increase regulation of bidder
practices are not persuasive.
THE ECONOMIC CONSEQUENCES OF THE WILLIAMS ACT

Bidder practices are already subject to extensive regulation under
the Williams Act. The Williams Act was adopted in 1968, partially in
response to complaints about "Saturday Night Specials," takeover
bids that were left open for a short period of time, often only a few
days. Congress was concerned that stockholders had inadequate time
to evaluate the merits of the proposed takeover bid. In response to
this problem, regulations adopted pursuant to the Williams Act require that tender offers be open for a minimum of 20 business days.
If an offer is oversubscribed, the offeror must purchase the shares on
a pro rata basis, and cannot purchase them on a first-come-first-served
basis. Accordingly, the Act ensures that tender offers are made on
equal terms to all target company stockholders. In addition, the Williams Act requires that any person who acquires 5 percent of a company's shares make that fact public within 10 days, and disclose
plans, if any, for the company in which the stock is acquired.
The Securities and Exchange Commission (SEC) has concluded
that the Williams Act successfully provides stockholders with sufficient time to evaluate takeover proposals. In particular, the Commission has found that the 20-business-day minimum offering period has resulted in a negligible number of complaints from stockholders. Thus,
it appears that the Act has successfully protected stockholders from
whatever abuses might result from short offering periods.
The benefits that the Williams Act generates are not, however,
achieved without costs. Since adoption of the Williams Act, takeovers
have become more expensive for initial bidders because target
managements have more time to mount takeover defenses or to
find alternate purchasers. The Williams Act also limits bidders' ability
to acquire toehold positions in target companies. These effects of the
Williams Act are reflected in the higher premiums that bidders have
been required to pay in order to complete takeovers. Estimates are
that the Williams Act has increased the average cash tender premium
paid to target stockholders from 32 percent before passage of the Act
to 53 percent after the Act's passage and that these increased premiums have caused correspondingly lower returns to bidders. Because
the Act has decreased the returns to initial bidders, it has likely




203

caused a decrease in the number of takeovers and a decrease in the
gains resulting from takeover activity.
Therefore, although the Williams Act has benefited stockholders of
companies that have, in spite of the additional costs imposed by the
Act, become subject to takeover attempts, it has imposed two other
sorts of costs on stockholders. First, stockholders in companies that
would have received takeover bids but for the higher premiums induced by the Act have suffered losses measured by the value of the
forgone premiums. Second, stockholders in companies that would
have made takeover bids but for the Act's requirements have forgone
the gains that would have resulted from the deterred transactions.
The increased premiums paid to target stockholders as a result of
the Williams Act do not, however, represent an increase in aggregate
national wealth. Instead, the premiums are simply a reallocation of
the gains resulting from takeovers away from bidding company stockholders to target company stockholders. The losses caused by the
Williams Act are, in contrast, real economic losses and represent
wealth forgone as a result of beneficial transactions deterred by the
Act. Therefore, unless society places greater value on the redistribution of gains to target stockholders than on aggregate wealth effects,
the costs of the Williams Act, at the margin, currently appear to outweigh its benefits.
THE DEBATE OVER BIDDER TACTICS

Currently, much of the criticism of bidder tactics emanates from
management groups concerned that their companies will become targets of takeover attempts. These managements claim that certain
bidder tactics can coerce stockholders into tendering their shares,
and that the minimum offering period under the Williams Act is too
short.
"Two-Tier Offers"

The bidder practice most frequently criticized as coercive is the
"two-tier" tender offer. In a two-tier offer, the bidder makes a uniform proposal to all target company stockholders. Typically, the proposal is to pay a higher price, in cash, for the first half of all securities tendered, and a lower price, in securities, for all remaining
shares. Critics claim that two-tier offers can stampede stockholders
into tendering their shares, even though they do not want to accept
the offer as a whole, because stockholders are afraid that unless they
subscribe to the high-valued front end of the offer they will be forced
to accept the lower valued back end.
There is, however, no systematic evidence that two-tier offers have
such a coercive effect, and there is substantial evidence that the market
prevents such abuses from occurring. In particular, the market for




204

takeovers is competitive and bidders who attempt to structure two-tier
offers that result in a below-market price for the company's assets can
expect to find themselves outbid by a superior offer with a premium
closer to the target's actual market value.
Indeed, the SEC has found that, on average, there is no statistically
significant difference between the blended premium offered in a twotier bid (calculated as the weighted average of the higher valued
front end and the lower valued back end of the offer) and the premium offered in single-tier bids. Moreover, data collected by the SEC
show that in takeover battles between competing single-tier and twotier bids the outcome of the contest is determined by the relative
values of the competing offers. Thus, no single-tier bid has ever lost to
a two-tier bid with a lower blended premium, despite the allegedly
coercive effect of the two-tier bid.
In addition, two-tier tender offers can be desirable for target stockholders and managements. SEC data show that two-tier offers are
used in friendly takeovers about as often as they are used in hostile
takeover attempts. There are at least two reasons that target stockholders could prefer a two-tier bid. If a two-tier offer is properly
structured, target stockholders who accept securities in the back end
of the transaction may be able to defer tax due on the appreciated
value of their shares. In addition, the acquirer may find that it is
easier to finance the transaction by issuing securities for the back end
than by borrowing funds from banks or through other financing
mechanisms. If these savings induce the bidder to offer a higher
blended premium, then the two-tier offer can also be beneficial for
the target's stockholders.
Minimum Offering Periods

Critics of bidder tactics also object to the 20-business-day minimum offering period provided under the Williams Act. They claim
20 business days is not sufficient time for management of the target
firm to fend off the offer or to identify higher alternative bids.
The 20-business-day minimum offering period required under the
Williams Act provides approximately a calendar month within which
a target can mount a defense. A study of 183 takeovers between 1962
and 1980 involving firms listed on the New York and American Stock
Exchanges found that approximately 26 percent of these contests involved multiple bidders. The current minimum offering period thus
appears to provide ample time for many targets to find alternate
bidders. In addition, longer minimum offering periods would probably
generate more of the same costs that accompanied adoption of the
Williams Act: They would increase the cost of takeovers, reduce the
total number of takeovers, reduce the benefits generated by the
takeover process, and increase the premiums paid to stockholders of




205

the fewer companies who receive offers. Such an outcome is not in the
national interest because it reduces the aggregate gain from the
takeover process and increases the resources spent on nonproductive
bargaining over the allocation of these gains.
REGULATING DEFENSIVE TACTICS
The debate over defensive tactics is, in form and substance, quite
different than the debate over bidder tactics. Some commentators
suggest that a target's management should be allowed great latitude
in fashioning defensive tactics against takeovers because management
must protect stockholders against abusive bidder techniques. However, as just explained, there is little credible evidence that bidder tactics are abusive.
Instead, the more fundamental debate concerns when, if ever, a
target management should be permitted to oppose a takeover that
promises a significant premium to the corporation's stockholders.
This question arises primarily because of the possibility that managements will attempt to maintain control over corporations despite the
fact that stockholders would benefit by tendering their shares.
CONSEQUENCES OF DEFENSIVE TACTICS

Chart 6-1 describes some of the consequences of target management opposition to takeover attempts. Between 1978 and 1983 there
were a total of 429 tender offers involving publicly traded corporations. Sixty-nine percent of these offers were uncontested and 31
percent drew a hostile response.
From target stockholders' perspective, management opposition can
improve the premium offered by the bidder either by inducing a
higher bid from a "white knight" or by causing the initial bidder to
increase its offer. Chart 6-1 shows that white knight bids and increased bids by initial bidders occur in 16.1 percent of all takeovers,
or in about half of contested takeovers. In 6.5 percent of all takeovers (or about 21 percent of contested takeovers), managements' opposition has no effect on the identity of the prevailing bidder or on
the premium paid. However, in 8.4 percent of all takeovers (or about
27 percent of contested takeovers) management succeeds in defeating the offer. In these cases target stockholders suffer substantial
losses that various studies have estimated as ranging from 15 to 52
percent of the value that could have been obtained had the offer not
been defeated.
Accordingly, from a target stockholder's perspective, it is significant to determine whether management is opposing a takeover in
order to (1) start a bidding war or otherwise induce a higher price




206

Chart 6-1

Target Management Responses to
and Outcomes of Tender Offers,
1978-83
Initial Bidder
Prevails (14.7%)—at Initial ^
\.
Premium
at Increased
Premium
White Knight
Acquisition
Friendly
or Neutral
Responses

Target
Remains —
Independent

69%

Hostile
' Responses
31%

Note.—Based on 429 tender offers.
Source: W.T. Grimm & Co.

for the company's shares, or (2) defeat a profitable bid so that the
company remains independent and management retains its position.
In the first case, management opposition can benefit stockholders so
long as the opposition does not become so vigorous that it drives
away all bidders. In the second case, if the opposition succeeds, it is
almost certain to harm stockholders' financial interests by causing a
substantial decline in the value of their shares.
Management's decision to oppose a tender offer is not, however, a
random event. A study of 105 cash tender offers between 1972 and
1977 found that in contested takeovers the average potential wealth
gain to management of the target company is significantly lower than
in uncontested takeovers. This result occurs, in part, because target
managements that oppose takeovers tend to own less stock in their
companies than managements that elect not to contest takeovers. A
recent survey of senior executives has also found that some executives
place stockholder interests secondary to their personal interests in the




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survival of the corporation in which they have invested so much of their
professional careers. This finding suggests that some managements do
in fact respond to takeover bids with tactics designed to serve management's own interest, and not stockholders*.
However, even successful defensive tactics that increase target
stockholders' premiums merely transfer wealth and do not increase
aggregate wealth (except, perhaps, in instances when defensive tactics attract a higher white knight bid). Such contests over the allocation of gains are nonproductive from society's perspective. Indeed, if
defensive tactics deter takeovers that would otherwise be beneficial,
they can cause net losses for the economy as a whole. Accordingly,
any defensive technique, even if calculated to increase the premium
offered to target stockholders, runs the risk of causing a loss for the
economy.
This risk is not, however, a sufficient basis on which to ban defensive tactics. There is no economically correct solution to the question
of how the gains resulting from acquisitions should be distributed
among bidders and targets. Bidders can validly claim that their activities generate the gains resulting from takeovers and that they are
therefore entitled to those gains. However, targets can claim that
takeover gains are not attainable without their assets, and that they
have a right to negotiate for as much of those gains as they can capture. Moreover, a rule that requires stockholders to sell their shares
simply because a bid at a premium has been made would not be
good public policy. No such requirements are placed on privately
held firms, and if there is no market failure in the governance of
publicly traded firms, then there is no principled basis on which to
prevent stockholders in target firms from negotiating over a share of
those gains, even at the risk of losing some of those gains.
THE DEFINITION OF ABUSIVE DEFENSIVE TACTICS

The distinction between defensive tactics designed to increase bid
premiums and those designed to defeat tender offers suggests a principled basis for distinguishing between abusive and nonabusive defensive tactics. As an initial matter, if a defensive tactic is explicitly
adopted or sanctioned by the corporation's stockholders, it should
not be considered abusive, regardless of the extent to which it might
deter takeovers. Stockholders are responsible for acting in their own
best interests. They have strong incentives to adopt whatever defensive measures they believe will maximize the value of the corporation's shares. Some corporations' stockholders might adopt anti-takeover measures including, for example, staggered elections for positions on the board of directors, super-majority requirements for the
approval of mergers, or equal price provisions to deter two-tier




208

offers. Other corporations' stockholders may refuse to adopt any
anti-takeover measures and may even take steps designed to invite
takeover bids. Indeed, in some publicly traded corporations, large
stockholders have specifically sought to induce takeover bids so as to
increase the value of their holdings.
The market can be expected to respond to stockholders' decisions
about defensive tactics by either depressing the price of the company's shares (if the tactics make takeovers less likely or reduce the expected value of the premium) or by increasing the price of the company's shares (if the tactics make takeovers more likely or increase
the expected value of the premium). Thus, the market is composed
of a variety of companies with a range of takeover policies, and the
implications of each company's takeover policy will be reflected in
the market valuation of each firm's shares.
Defensive tactics are abusive only when management exercises its
delegated discretion so as to promote management interests over
stockholder interests. If a defensive tactic is used to increase the
target stockholders' share of gains, but not to defeat the offer, the
defensive tactic is being applied to promote the target stockholders'
interests and should not be considered abusive. In contrast, a defensive tactic that seeks to prevent a takeover at a premium harms target
stockholders by depriving them of the opportunity to accept the bidder's offer. On average, such defensive tactics also prevent bidders
from realizing the benefits that result from takeovers. Accordingly,
these tactics can be considered abusive and are a legitimate subject
of concern to policymakers.
In many instances it will be difficult to distinguish whether a particular tactic is abusive. Indeed, as explained below, many commonly
criticized defensive tactics have quite complex effects and cannot be
labeled as abusive in all situations. Blanket rules to prohibit certain
defensive tactics can therefore have unintended and undesirable side
effects. Moreover, it is generally possible for managements to devise
new strategies that circumvent specific statutory prohibitions. When
potential abuses exist, case-by-case consideration of management defensive tactics by the courts is therefore likely to be a more effective
remedy than an inflexible legislative stricture.
DEFENSIVE TACTICS FREQUENTLY CRITICIZED AS ABUSIVE

Targeted share repurchases ("greenmail") and severance contracts
triggered by successful takeovers ("golden parachutes") are frequently criticized as abusive and are often the subject of debate. These
practices are not, however, invariably abusive and are not proper
subjects for Federal regulation.




209

Targeted Share Repurchases

Targeted share repurchases occur when a company buys back its
stock from a large shareholder at a price greater than that at which
the stock trades on the market. Often the stockholder whose shares
are repurchased has proposed a takeover or other transaction that is
opposed by the target's management. Critics of these repurchases
claim the practice is abusive because management is using the corporation's resources to buy out a potential bidder and thereby preclude
stockholders from earning a premium for their shares. Critics also
claim the practice is unfair because it does not give all stockholders
an equal opportunity to tender their shares. Indeed, repurchases can
be used by target managements to "buy-off' potential acquirers and
to entrench management's position at stockholders' expense. In many
situations such repurchases can be abusive. This does not, however,
establish that repurchases are invariably abusive or that they should
be regulated by Federal law.
Targeted share repurchases have complex effects on the stock
price of the repurchasing company. The announcement that a large
blockholder has acquired a position causes a significant increase in
the price of the target company's shares. The stock price increases
because the acquisition signals a potential takeover of the target firm.
A subsequent announcement of a repurchase causes a significant decline in the price of the target company's shares because it signals
the withdrawal of a potential bidder and because the premium paid
dilutes the value of remaining stockholders' equity in the firm.
The evidence regarding the net effect of such repurchases on the
price of the target's shares, measured from the initial acquisition
through to the repurchase, is mixed. Some studies conclude that
stockholders reap substantial and statistically significant benefits over
the period spanning the initial acquisition and subsequent repurchase. An examination of the question by the SEC has, however,
found statistically insignificant evidence that stockholders suffer small
losses over this period. SEC data also show that companies that
engage in targeted share repurchases are often either acquired, recapitalized, or involved in .management changes following the repurchase. Because a repurchase can act as a signal that the corporation
is vulnerable to takeover attempts, the investment leading to the repurchase may therefore be a valuable stimulus for more fundamental
and beneficial corporate changes.
Targeted share repurchases can also be beneficial because they can
reduce the expected cost of takeover attempts, thereby increasing the
number of such attempts and the number of takeovers. To the extent
that the prospect of repurchases increases the volume of beneficial




210

takeover activity, repurchase premiums can be beneficial for the
economy as a whole.
Thus, although there are situations in which repurchases can be
abusive, there are also situations in which repurchases are part of a
sequence of events that is beneficial for stockholders. Accordingly, an
across-the-board ban on targeted share repurchases would be overly
broad, and it appears more reasonable to allow the merits of controversial repurchases to be judged on a case-by-case basis by the
courts. Moreover, even if the Federal Government sought to prohibit
repurchases, the prohibition could easily be eyaded. Companies
could, for example, trade assets or issue new and complex securities
in return for a large stockholder's equity position. Unless the values
of these assets and securities were readily ascertainable, it would be
most difficult to determine whether the company paid a premium to
the large stockholder who is bought out. In addition, corporations
that want to ensure that they are not subject to demands for targeted
share repurchases can adopt charter amendments prohibiting such
transactions. Large New York Stock Exchange traded corporations
have recently adopted such amendments. Corporations thus already
have it within their power to protect themselves against whatever
abuses they perceive in targeted share repurchases and Federal Government regulation can add little to corporations' ability to protect
themselves. Indeed, as explained below, it is preferable to allow individual companies to decide whether and how they want to protect
themselves than to have the Federal Government dictate an inflexible
nationwide policy.
Severance Contracts

Another controversial tactic used by defending managements is the
granting of lucrative severance agreements that take effect in the
event of a change in corporate control. Critics of these "golden parachutes" claim they represent an attempt by target management to
protect its own interests at stockholder expense. Defenders of the
practice claim that the contracts give management the security it
needs in order to negotiate the best possible price for the target's
shares, without regard to management's concerns over its own job
security.
The available evidence on the effects of these severance contracts
is inconclusive. A study of 90 companies that have adopted such contracts shows a small, statistically insignificant positive effect on stock
prices. Moreover, the Deficit Reduction Act of 1984 imposes substantial tax burdens on certain severance contracts. The market has not
yet had an opportunity to respond fully to these new tax law provisions, and it is too soon to be able to assess the impact of this legislation on takeover-related severance agreements.




211

In addition, even if the Congress sought to prohibit severance contracts adopted while a takeover bid is pending, firms could readily
avoid that prohibition by entering into the contracts prior to announcement of a tender offer. A recent survey of 560 of the Fortune
top 1,000 companies showed that about 25 percent already have
some form of takeover-related severance agreements with senior
management. Indeed, the labor market for senior executives may in
some situations require that senior managers be offered takeover-related severance agreements, just as sports stars negotiate "no-cut"
and *'no-trade" contracts with athletic teams.
Federal regulation of takeover-related severance contracts would
thus not have any clear benefits for stockholders or for the economy
at large. In addition, such regulations would be difficult to enforce
and would constitute a major intrusion into an area that is traditionally subject primarily to State regulation.
REMEDIES OTHER THAN FEDERAL LEGISLATION

In addition to these two examples of frequently criticized defensive
tactics, there are many other techniques that managements use in
order to fend off takeovers. Each of these techniques can be judged
by the same criteria applied to repurchases and severance contracts:
If they are approved by stockholders, or if they are reasonably calculated to result in an increased expected premium for stockholders,
then they are not abusive. However, because a given defensive tactic
can often be used both for the purpose of defeating an offer as well
as for the purpose of inducing a higher bid, each controversial application of a defensive technique is best judged on a case-by-case basis
by the courts, and not under blanket prohibitions established by Federal regulations. Moreover, stockholders already have available to
them many avenues of recourse that may be more effective remedies
for management misconduct than Federal legislation.
Stockholder Suffrage

Many experts have long been pessimistic about stockholders* ability to oppose management initiatives. Much of this pessimism is
rooted in the view that stockholders, as a group, have interests that
are too diffuse to make it reasonable for them to band together to
oppose management proposals. Recent developments, however, suggest that this situation is changing and that stockholders potentially
have a more powerful voice in corporate governance than previously
thought.
According to the SEC, 20 institutional investors in 1978 owned
more than 10 percent of the total value of publicly held shares. More
recent data show that institutional investors own approximately 36
percent of the voting stock of companies listed on the New York




212

Stock Exchange. When the holdings of certain trusts and investment
funds are added to the total, institutions have the ability to influence
or control about 50 percent of the voting poWer represented by
shares traded on the New York Stock Exchange.
A recent study of the distribution of stockholder interests in 511
large corporations also suggests that voting power in larger corporations is not as diffuse as commonly believed. On average, the five
largest stockholders in these 511 corporations control about 25
percent of the corporation's shares, and the 20 largest stockholders
control about 38 percent of the corporation's shares. Thus, on average, the five largest stockholders in these corporations need to
obtain the agreement of stockholders controlling only one-third of
the remaining shares in order effectively to control the corporation.
A coalition of the 20 largest holders, on average, would need cooperation from stockholders controlling only about one-fifth of the remaining shares in order to control the corporation.
In addition, the SEC has found a trend away from the "Wall Street
Rule"—institutional investors' traditional practice of expressing displeasure solely by selling their shares—and a move toward more
active participation by institutions in corporate governance. At least
two major institutional stockholders have initiated litigation against
corporations that have engaged in targeted share repurchases and
many institutional stockholders frequently vote against anti-takeover
proposals. In at least one instance, institutional investors proved instrumental in requiring that management of a major firm seeking to
adopt anti-takeover amendments to the corporate charter abandon
these attempts and instead appoint a committee of outside directors
to consider takeover proposals. Soon thereafter, the corporation was
the object of a takeover that afforded stockholders a handsome premium.
Stockholder self-help therefore has the potential to be a more effective check on management abuse of defensive tactics. A significant
benefit of stockholder self-help is that it does not require that the
government, either at the Federal or State level, impose restraints on
what is essentially a private contractual relationship between a corporation's stockholders and its management. Instead, by relying on selfhelp mechanisms, each corporation will be able to select the governance structure most suited to its particular circumstances and no
single rule will be imposed by law on all companies.
Under such a regime, the capital markets can be relied upon to
generate a distribution of governance schemes and associated stock
price values. Some companies will have governance rules that make
them difficult hostile takeover targets, while others will be relatively
easy to purchase with a hostile bid. The stock prices of individual




213

companies will incorporate the effects of each company's defensive
posture. If stockholder suffrage is an effective check on management
conduct, this situation is far preferable to a world in which all companies are required to adopt identical takeover defense policies.
Improved Executive Compensation Contracts

The potential for abusive management conduct can also be diminished by implementing incentives that align management interests
more closely with stockholders'. As previously noted, managements
of publicly traded corporations tend to oppose takeover bids when
the takeover is relatively harmful to management's private financial
interests. Typically, this occurs when management has a relatively
small equity interest in the company. This problem can be reduced
by giving management a stronger private incentive to maximize the
value of the corporation's shares in takeover contests. Stock options
and incentive contracts that pay management a percentage of the
premium offered in takeover contracts are two examples of private
contract mechanisms that may be able to resolve large parts of the
defensive tactics debate.
Recourse to the Courts

Stockholders also have recourse to the courts if they believe management has abused its delegated discretion. In evaluating management's response to a takeover bid, courts typically apply the "business judgment rule." Under that rule, a board of directors historically *'enjoys a presumption of sound business judgment, and its decisions will not be disturbed if they can be attributed to any rational
business purpose. A court under such circumstances will not substitute its own notions of what is and what is not sound business judgment."
The great latitude afforded to management under the business
judgment rule has often made it difficult for shareholders to persuade courts that management has behaved unreasonably in opposing a takeover bid. Recently, however, the Second Circuit Court of
Appeals, a particularly authoritative Federal court in matters of corporate governance, has tightened its interpretation of the business
judgment rule and has recognized that defensive measures adopted
in the course of a takeover battle can involve a measure of management
self-interest. The court therefore concluded that, under certain circumstances, defensive tactics adopted in a takeover contest are to be
evaluated under a stricter fairness standard that gives substantially less
deference to target management judgments. Other courts have also
indicated increased sensitivity to problems arising in takeover situations. The state of the law is currently in flux, but it now seems possible
that the business judgment rule will, through the natural evolution of




214

the case law, provide a more powerful deterrent against perceived
takeover abuses than it has in the past.
The Economic Value of Federalism

Corporate law has traditionally been the subject of State rather
than Federal regulation. For many years, State regulation of corporate governance has been criticized by some commentators as the
result of a race to the bottom, in which States compete with each
other for the revenues generated by corporate charters. According to
this theory, decisions about the legal domicile of a corporation are
primarily under management's control, and the States compete with
each other by fashioning corporation codes that favor management
interests over stockholder rights. The States that adopt laws most favorable to management attract the largest number of corporations
and win the race to the bottom. From this perspective, State corporation law fails adequately to protect stockholder rights.
The opposing view is that corporations choose domiciles that
maximize the value of the firm's shares. Accordingly, competition
among the States gives the States an incentive to adopt policies that
are beneficial for stockholders. If this view is correct, competition
among the States is to be preferred to Federal regulation of corporate charters that would inhibit experimentation and competition in
the design of superior governance techniques.
This debate cannot be resolved on a theoretical level, and it is instead necessary to consider the empirical evidence regarding the
stock price effects of changes in corporate domicile. The available
evidence suggests that changes in corporate domicile are correlated
with increased stock price valuations. This finding is consistent with
the competitive model of federalism, not with the race to the bottom,
which predicts decreased stock prices as a consequence of changes in
domicile that elevate management interests over stockholders'. Accordingly, competition among the States appears to be beneficial,
and there is no systematic evidence in support of the theory that
competition among the States has harmed stockholders.
Because the evidence is that deference to the States in matters of
internal corporate governance is beneficial, there is a sound economic rationale for continued reliance on the principle of federalism in
the market for corporate control. Of course, if the nature of competition among the States changes, and States that charter a significant
percentage of publicly traded corporations adopt protectionist statutes or interpretations of law that promote managements' ability to
abuse delegated discretion, then the limits of federalism as applied to
the market for corporate control may have to be reconsidered.




215

CONCLUSION
The public has a legitimate interest in the continued strength and
vitality of the market for corporate control. Publicly traded corporations account for a substantial portion of the Nation's wealth and
productive capacity, and it is important that the management of these
firms not be insulated from competition in the market for corporate
control. The available evidence is that the operation of this market
has generated net benefits for the economy. The evidence also suggests that abusive practices in the market for corporate control are
limited largely to tactics employed by target managements who, in
opposing takeover bids, defeat or deter tender offers at the expense
of their stockholders and the economy.
Remedies for these abuses can often be fashioned within the corporation itself. Stockholders also have recourse to the courts which
have recently indicated a willingness to subject target management
conduct to closer scrutiny. In addition, abusive conduct by corporate
management has traditionally been a subject of State regulation; the
available evidence indicates that federalism has served stockholders
well. Accordingly, further Federal regulation of the market for corporate control would be premature, unnecessary, and unwise.




216

Appendix A
REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1984







LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,

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

The Council of Economic Advisers submits this report on its activities during the calendar year 1984 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,
WILLIAM A. NISKANEN, Member




WILLIAM POOLE,

219

Member

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
NeitH. Jacoby
Walter W. Stewart
Raymond J. Saulnier..
Joseph S. Davis
Paul W, McCracken..
Karl Brandt
Henry C. Wallich
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 Stein
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. Gramtey
George C. Eads
,
Stephen M. Goldfeld
Murray L Weidenbaum...
Jerry L Jordan
William A. Niskanen
Martin Feldstein
William Poole




Oath of office date

Position

Augusts 1946
August 9, 1946
November 2, 1949....
May 10, 1950
August 9, 1946
May 10, 1950
June 29, 1950
September8, 1952..
March 19, 1953
September 15,1953
December 2, 1953....
April 4, 1955
December 3, 1956....
May 2, 1955
December 3, 1956....
November 1, 1958....
May 7,1959
January 29, 1961
January 29, 1961
January 29, 1961
August 3,1962
November 16, 1964..
May 17, 1963
September 2, 1964..
November 16, 1964..
February 15, 1968....
February 2, 1966
February 15, 1968....
July 1,1968
February 4, 1969
February 4, 1969
February 4, 1969
January 1, 1972
September 9, 1971..
March 13, 1972
July 23, 1973
October 31, 1973
September 4, 1974..
June 13, 1975
July 22, 1975
January 22,1977
March 18, 1977
March 18, 1977
June 6,1979
August 20, 1980
February 27, 1981....
July 14, 1981
June 12, 1981
October 14, 1982
December 10,1982..

Chairman
Vice Chairman
Acting Chairman...
Chairman
Member
Vice Chairman
Member
Member
,
Chairman
Member
Member
Member
Chairman
Member
Member...
MemberMember
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
Member
Member
Member
Chairman..
Member!^"
Chairman..
Member

220

Separation date
November 1, 1949.
January 20, 1953.
February n , 1953.
August 20, 1952.
January 20, 1953.
December 1, 1956.
February 9, 1955.
April 29,1955.
January 20, 1961.
October 31, 1958.
January 31,1959.
January 20, 1961.
January 20,1961.
November 15, 1964.
July 31, 1962.
December 27, 1962.
February 15, 1968.
August 31,1964.
February 1, 1966.
January 20, 1969.
June 30, 1968.
January 20, 1969.
January 20, 1969.
December 31, 1971.
July 15,1971.
August 31,1974.
March 26,1973.
August 15,1973.
April 15, 1975.
February 25, 1975.
January 20,1977.
November 15, 1976.
January 20, 1977.
January 20,1981.
February 4, 1979.
May 27,1980.
January 20,1981.
January 20,1981.
August 25, 1982.
July 31, 1982.
July 10, 1984.

Report to the President on the Activities of the
Council of Economic Advisers During 1984
The Council of Economic Advisers was established by the Employment Act of 1946 to provide economic analysis and advice to the
President and thus to assist in the development and implementation
of national economic policies. The Council also advises the President
with regard to decisions on other matters that affect the health and
operations of the Nation's economy.
Martin S. Feldstein resigned as Chairman to return to Harvard
University as Professor of Economics. Upon his departure, William A.
Niskanen, the senior Council Member, assumed the duties of the
Chairman. William Poole continued to serve as a Council Member in
1984. 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 1984 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 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. He also chaired a Cabinet Council Working Group on Economic Statistics, and he presented several studies
of macroeconomic policy issues before the Cabinet Council on Economic Affairs.
The Council continued its responsibility for developing with the
Office of Management and Budget and the Department of the Treasury the economic assumptions that are presented to the President.
MICROECONOMIC POLICIES
A wide variety of microeconomic issues received Council attention
during the year. Mr. Niskanen chaired or participated in numerous




221

Cabinet-level groups, such as the Cabinet Council on Economic Affairs dealing with such issues as international trade, agriculture, alternatives to Federal regulation, Federal housing programs, fuel economy standards, and employee pension legislation.
Mr. Niskanen also actively participated in Cabinet-level reviews of
the Federal budget and the second-term economic policy agenda.
PUBLIC INFORMATION
The Council^ 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.
The Chairman 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
1984. Mr. Poole assumed primary responsibility for domestic and
international macroeconomic analysis, economic projections, and
monetary and financial issues. Mr. Niskanen was primarily responsi-




222

ble for microeconomic and sectoral analysis, international trade questions, and regulatory issues.
PROFESSIONAL STAFF
At the end of 1984 the professional staff consisted of the Special
Assistant, the Senior Statistician, 12 senior and staff economists, and
6 junior staff economists.
The professional staff and their special fields at the end of 1984
were:
William S. Haraf

Special Assistant to the Council
Senior Staff Economists

Lincoln F. Anderson
J. Hayden Boyd
Roger D. Feldman
Richard T. Freeman
Marvin S. Goodfriend
Joseph A. Grundfest
Joel B. Slemrod
Joe A. Stone
Robert L. Thompson
Kathleen P. UtgofF

Macroeconomics
Transportation, Energy, and Environment
Health
International Finance
Money and Finance
Legal Matters and Regulation
Public Finance and Taxation
International Trade
Agriculture
Labor and Employment

Robert S. Villanueva

Macroeconomics
Staff Economist

Randall S.Jones

International Trade
Statistician

Catherine H. Furlong

Senior Statistician
Junior Staff Economists

Alexander S. Berg
Macroeconomics
Ann M. Hillberg
Agriculture and Trade
Andrew N. Kleit
Regulation and Transportation
Mark S. Lutz
International Finance and Macroeconomics
John F. Navratil
Public Finance and Financial Regulation
Thomas R. Rumbaugh
Trade and Public Finance
Catherine H. Furlong, Senior Statistician, continued to direct 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 verifica-




223

tion of statistics in memoranda, testimony, and speeches. Natalie V.
Rentfro and Linda A. Reilly assist Mrs. Furlong.
In preparing the Economic Report the Council relied upon the editorial services of Joseph Foote.
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.
The secretaries for the Council Members during 1984 were Patricia
A. Lee and Alice H. Williams. Secretaries for the professional staff
were Bessie M. Lafakis, Rosemary M. Rogers, Margaret L. Snyder,
and Suzanne M. Tudor. Ciara A. Burnham assisted the support staff
during the summer months.
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 Jeffrey A. Frankel (University of California, Berkeley), Stephen K. Halpert (University of Miami), David R.
Henderson (Naval Postgraduate School, Monterey), and Lawrence B.
Lindsey (Harvard University). Geoffrey O. Carliner, Special Assistant
to the Chairman, joined the National Bureau of Economic Research,
Cambridge, Massachusetts.
Junior staff economists who resigned in 1984 were Kenneth A.
Froot (University of California, Berkeley), Gail G. Ifshin (University
of Maryland), William S. Milberg (Rutgers University), and Charles
N. Schorin (Princeton University).
Research assistants who resigned in 1984 were Andrew G. Berg
(Harvard University), Suzanne G. Greenspun (OECD, Paris), and
Andrew R. Myers (Massachusetts Institute of Technology).
Support staff who resigned in 1984 were Carolyn L. Bazarnick, Patricia Byrne, Susan A. Lindsey, Georgia A. O'Connor, Barbara L.
Severn, and Lillie M. Sturniolo.




224

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.
B-5.
B-6.
B-7.
B-8.
B-9.
B-10.
B-ll.
B-12.
B-l3.
B-14.
B-15.
B-16.
B-17.
B-18.
B-l9.
B-20.
B-21.
B-22.
B-23.
B-24.
B-25.
B-26.
B-27.

Gross national product, 1929-84
232
Gross national product in 1972 dollars, 1929-84
234
Implicit price deflators for gross national product, 1929-84
236
Fixed-weighted price indexes for gross national product, 1972
weights, 1959-84
238
Changes in gross national product, personal consumption expenditures, and related price measures, 1929-84
239
Gross national product by major type of product, 1929-84
240
Gross national product by major type of product in 1972 dollars,
1929-84
241
Gross national product by sector, 1929-84
242
Gross national product by sector in 1972 dollars, 1929-84
243
Gross national product by industry, 1947-83
244
Gross national product by industry in 1972 dollars, 1947-83
245
Gross domestic product of nonfmancial corporate business, 192984
246
Output, costs, and profits of nonfmancial corporate business,
1948-84
247
Personal consumption expenditures, 1929-84
248
Gross and net private domestic investment, 1929-84
250
Gross and net private domestic investment in 1972 dollars, 192984
251
Inventories and final sales of business, 1946-84
252
Inventories and final sales of business in 1972 dollars, 1947-84
253
Relation of gross national product, net national product, and national income, 1929-84
254
Relation of national income and personal income, 1929-84
255
National income by type of income, 1929-84
256
Sources of personal income, 1929-84
258
Disposition of personal income, 1929-84
260
Total and per capita disposable personal income and personal consumption expenditures in current and 1972 dollars, 1929-84
261
Gross saving and investment, 1929-84
262
Saving by individuals, 1946-84
263
Number and median income (in 1983 dollars) of families and persons, and poverty status, by race, selected years, 1947-83
264

POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY:
B-28.
B-29.
B-30.
B-31.

Population by age groups, 1929-84
Population and the labor force, 1929-84
Civilian employment and unemployment by sex and age, 1947-84 ..
Unemployment by duration and reason, 1947-84




227

265
266
268
269

Page

B-32.
B-33.
B-34.
B-35.
B-36.
B-37.
B-38.
B-39.
B-40.
B-41.

Civilian labor force participation rate and civilian employment/
population ratio, 1948-84
Unemployment rate, 1948-84
Civilian labor force participation rate by demographic characteristic, 1954-84
Civilian unemployment rate by demographic characteristic, 194884
,
Unemployment insurance programs, selected data, 1955-84
Wage and salary workers in nonagricultural establishments, 192984
Average weekly hours and hourly earnings in selected private nonagricultural industries, 1947-84
Average weekly earnings in selected private nonagricultural industries, 1947-84
Productivity and related data, business sector, 1947-84
Changes in productivity and related data, business sector, 1948-84.

270
271
272
273
274
275
276
277
278
279

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, 1929-84....
Industrial production indexes, market groupings, 1947-84
Industrial production indexes, selected manufactures, 1947-84
Capacity utilization rate in manufacturing, 1948-84
New construction activity, 1929-84
New housing units started and authorized, 1959-84
Nonfarm business expenditures for new plant and equipment,
1947-85
Sales and inventories in manufacturing and trade, 1947-84
Manufacturers' shipments and inventories, 1947-84
Manufacturers' new and unfilled orders, 1947-84

280
281
282
283
284
286

Consumer price indexes, major expenditure classes, 1946-84
Consumer price indexes, selected expenditure classes, 1946-84
Consumer price indexes, commodities, services, and special
groups, 1940-84
Changes in consumer price indexes, 1958-84
Changes in consumer price indexes, commodities and services,
1929-84
Producer price indexes by stage of processing, 1947-84
Producer price indexes by stage of processing, special groups,
1974-84
Producer price indexes for major commodity groups, 1947-84
Changes in producer price indexes for finished goods, 1950-84

291
292

287
288
289
290

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

294
295
296
297
299
300
302

MONEY STOCK, CREDIT, AND FINANCE:
B-61.
B-62.
B-63.
B-64.
B-65.
B-66.
B-67.

Money stock, liquid assets, and debt measures, 1959-84
Components of money stock measures and liquid assets, 1959-84...
Aggregate reserves of depository institutions and monetary base,
1959-84
Commercial bank loans and investments, 1972-84
Total funds raised in credit markets by nonfinancial sectors, 197584
Bond yields and interest rates, 1929-84
Consumer credit outstanding, 1950-84




228

303
304
306
307
308
310
312

B-68.
B-69.
B-70.

Net change in consumer credit outstanding, 1950-84
Mortgage debt outstanding by type of property and of financing,
1939-84
Mortgage debt outstanding by holder, 1939-84

313
314
315

GOVERNMENT FINANCE:
B-71.
B-72.
B-73.

B-74.
B-75.
B-76.
B-77.
B-78.
B-79.
B-80.
B-81.

Federal budget receipts, outlays, and debt, fiscal years 1976-86
Federal budget receipts, outlays, components, and debt, selected
fiscal years, 1929-86
Relation of Federal Government receipts and expenditures in the
national income and product accounts to the unified budget,
fiscal years 1984-86
Federal and State and local government receipts and expenditures,
national income and product accounts, 1929-84
Federal and State and local,government receipts and expenditures,
national income and product accounts, by major type, 1929-84 ...
Federal Government receipts and expenditures, national income
and product accounts, 1960-86
State and local government receipts and expenditures, national
income and product accounts, 1946-84
State and local government revenues and expenditures, selected
fiscal years, 1927-83
Interest-bearing public debt securities by kind of obligation, 196784
'.
Maturity distribution and average length of marketable interestbearing public debt securities held by private investors, 1967-84.
Estimated ownership of public debt securities, 1976-84

316
318

319
320
321
322
323
324
325
326
327

CORPORATE PROFITS AND FINANCE:
B-82.
B-83.
B-84.
B-85.
B-86.
B-87.
B-88.
B-89.
B-90.
B-91.

Corporate profits with inventory valuation and capital consumption
adjustments, 1929-84
Corporate profits by industry, 1929-84
Corporate profits of manufacturing industries, 1929-84
Sales, profits, and stockholders' equity, all manufacturing corporations, 1950-84
Relation of profits after taxes to stockholders1 equity and to sales,
all manufacturing corporations, 1947-84
Sources and uses of funds, nonfarm nonfinancial corporate business, 1946-84
Current assets and liabilities of U.S. corporations, 1940-84
State and municipal and business securities offered, 1934-84
Common stock prices and yields, 1949-84
Business formation and business failures, 1940-84

328
329
330
331
332
333
334
335
336
337

AGRICULTURE:
B-92.
B-93.
B-94.
B-95.
B-96.
B-97.

Farm income, 1929-84
Farm output and productivity indexes, 1929-84
Farm input use, selected inputs, 1929-84
Indexes of prices received and prices paid by farmers, 1946-84
U.S. exports and imports of agricultural commodities, 1940-84
Balance sheet of the farming sector, 1929-85

INTERNATIONAL STATISTICS:
B-98.
U.S. international transactions, 1946-84




229

338
339
340
341
342
343
344

B-99.
B-100.
B-101,
B-102.
B-103.
B-104.
B-105.
B-106.
B-107.
B-108.
B-109.

U.S. merchandise exports and imports by principal end-use category, 1965-84
U.S. merchandise exports and imports by area, 1975-84
U.S. merchandise exports and imports by commodity groups,
1965-84
International investment position of the United States at year-end,
1976-83
International reserves, selected years, 1952-84
Exchange rates, 1967-84
World trade: Exports and imports, 1965, 1970, 1975, and 1980-84
World trade balance and current account balances 1965, 1970,
1975, and 1980-84
Industrial production and consumer prices, major industrial countries, 1960-84
Civilian unemployment rate, and hourly compensation, major industrial countries, 1960-84
Growth rates in real gross national product, 1961-84




230

°&e
346
347
348
349
350
351
352
353
354
355
356

General Notes
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).




231

NATIONAL INCOME OR EXPENDITURE
TABLE B-l.—Gross national product, 1929-84
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
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
1984 *
1982:

national
product

IV P

Fixed investment

Total

Dura- Nonble duragoods

Serv-

Total

Total

Change
in

Residential

Nonresidential

ProProbusiNon- Farm ducers' ness
ducers'
Struc- dur- Total farm struc- dur- invenTotal tures able
struc- tures able tories
tures
equipequipment
ment

103.4
55.8
90.9
100.0
125.0
158.5
192.1
210.6
212.4
209.8
233.1
259.5
258.3

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

27

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

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

506.5 324.9
524.6 335.0
565.0 355.2
596.7 374.6
637.7 400.5
691.1 430.4
756.0 465.1
799.6 490,3
873.4 536.9
944.0 581.8

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

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

38.7
40.5
44.1
51.0
55.9
55.4
58.8
64.4
78.7
98.3

0.1
.0
.1

17
= 1.6

3.2
3.6
1.9
1.2
1.1
1.4
6.7
10.4
13.7
12.8

.1
.1
.1

2.2
4.5
1.8
-.6
-1.0
-1.0
6.4
-.5
4.7
-3.1

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

.4
.4
.4
.4
.4
.4
.5
.5

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

.5
.5
'.B
.6
7
.7
7
.9
1.0

3.0
2.3
6.3
6.0
5,6
9.9
14.1
10.3
7.9
9.8

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 68.8
140.8 95.8 92.0
170.2 111.2 107.0
191.9 118.6 114.0

1.1
1.3
1.5
1.7
1.8
1.9
2.1
2.3
2.5
2.9

3.2
7.7
10.2
18,5
14.1
-6.9
11.8
23.0
26.5
14.3

110.9
135.3
142.1
129.7
150.3

197.9
218.6
207.5
223.2
275.7

102.9
104.3 99.8
91.4 86.6
132.2 127.6
154.4 149.3

3.0 =9.8
26.0
3.2
3.3 —26.1
3.6 = 13.5
4.0
56.8

3.6

.0
.0
.0
.2
.3
.3

6.8
10.3
3.1
-1.5
6.0
47
1.3
-1.5
5.7

9927
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
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

2,631.7
2,957.8
3,069.3
3,304.8
3,661.3

1,668.1
1,849.1
1,984.9
2,155.9
2,342.3

214.7
235.4
245.1
279.8
318.4

668.8 784.5 401.9
730.7 883.0 484.2
757,5 982.2 414.9
801.7 1,074.4 471.6
858.3 1,165.7 637.3

103.9
107.9
121.0
143.3
156.6
157.7
174.1
205.2
248.9
360.1 290.2
408.8
411.7 308.8
458.1 353.9
441.0 349.6
485.1 352.9
580.4 426.0

1,931.3
1,960.9
2,001.3
3,109.6 2,046.1

239.4
241.6
244.5
255.0

746.4 945.4
750.6 968.6
762.5 994.2
770.6 1,020.6

436.2
431.2
415.9
376.2

453.2
442.1
431.3
437.3

365.7
351.2
342.2
339.3

148.8
142.7
138.4
138.4

216.9
208.5
203.8
201.0

87.5
90.9
97,9

83.4
85.9
84.5
92.5

-17.0
-=10.9
-15.3
-61.1

3,173.8
3,267.0
3,346.6
3,431.7

2,070.4
2,141.6
2,181.4
2.230.2

259.4
276.1
284.1
299.8

775.2
796.9
811.7
823.0

1,035.8
1,068.6
1,085.7
1,107.5

405.0
449.6
491.9
540.0

447.9
469.0
496.2
527.3

334.6
339.3
353.9
383,9

130.4
125.6
126.2
136.6

204.2
213.6
227.8
247.3

113.3
129.8
142.3
143.4

108.9
125.3
137.7
138.7

-42.9
-19.4
=4.3
12.7

3,553.3
3,644.7
3,694.6
3,752.5

2,276.5
2,332.7
2,361.4
2,398.6

310.9
320.7
317.2
324.7

841.3
858.3
861,4
872.1

1,124.4
1,153.7
1,182.8
1,201.8

623.8
627.0
662.8
635.5

550.0
576.4
591.0
604.3

398.8
420.8
435.7
448.9

142.2
150.0
151.4
157.5

256.7
270.7
284.2
291.4

151.2
155.6
155.3
155.4

146.4
150.5
150.1
150.2

3,026.0
\iZZZZ. 3,061.2
in
3,080.1

iv
1983:
I
II
Ill
IV
1984:

Gross private domestic investment

fo!:8

See next page for continuation of table.




232

3.9
4.1
4.0
4.1

73.8
50.6
71.8
31.1

TABLE B-l.—Gross national product, 1929-84—Continued
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Net exports of goods and
services
Year or quarter

Percent change
from preceding

Government purchases of goods and
services
Federal

Net
exports Exports Imports

Total

Total

Nation- Nondeal
defense fense

State
and
local

Final
sales

Gross
national
product

Final
sales

1929
1933.
1939

1.1
4
1.2

7.0
24
4.6

5.9
2.0
3.4

8.8
82
13.5

1.4
21
5.2

1.2

3.9

7.4
61
8.3

101.7
57.4
90.5

6.6
-4 2
7.0

-56
5.3

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

1.8
15
.2
19
-17
5
78
11.9
69
6.5

5.4
61
5.0
4.6
5.5
74
15.1
20.2
17.5
16.3

3.6
47
4.8
6.5
7.2
79
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
169
52.0
81.3
89.4
74 6
17.6
12.7
16.7
20.4

2.2
13 7
49.4
79.7
87.4
73 5
14.8
9.0
10.7
13.2

3.9
32
2.6
1.6
2.0
11
2.8
3.7
60
7.2

8.1
80
7.8
7.5
7.6
82
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
5

8.1
23 2
30.0
23.0
9.8
9
-4.7
14.8
9.1
2.6

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

2.2
44
3.2
13
2.5
30
5.3
73
3.3
1.4

14.4
19.7
19.1
18.0
18.7
21.0
25.0
28.1
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
601
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

14.0
33.5
45.8
48.6
41.1
38.4
40.2
44.0
45.6
45.6

4.7
48
6.5
89
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
54
.0
9.0
5,4
5.3
1.3
8.5

7.0
14.6
7.6
62
.6
7.0
5.8
6.1
1.9
6.9

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

5.5
6.6
6.4
7.6
101
8.8
65
6.3
43
4.2

28.9
29.9
31.8
34.2
388
41.1
44.6
47.3
52 4
57.5

23.4
23.3
25.4
26.6
28 8
32.3
38.1
41.0
48.1
53.3

100.3
108.2
118.0
123.7
129 8
138.4
158 7
180.2
199.0
208.8

53.7
57.4
63.7
64.6
65.2
67.3
78.8
90.9
98.0
97.6

44.5
47.0
51.1
50.3
49.0
49.4
60.3
71.5
76.9
76.3

9.3
10.4
12.7
14.3
16.2
17.8
18.5
19.5
21.2
21.2

46.5
50.8
54.3
59.0
64.6
71.1
79.8
89.3
101.0
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

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

67
4.1
7
14.2
13 4
26.8
13 8
40
-1.1
13.2

65 7
68.8
77 5
109.6
1462
154.9
1709
182.7
218.7
281.4

59 0
64.7
76 7
95.4
132.8
128.1
1571
186.7
219.8
268.1

2201
234.9
2531
270.4
3041
339.9
3621
393.8
431.9
474.4

95 7
96.2
1017
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

22 2
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
2329
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

1980
1981
1982
1983
1984"

23 9
28.0
19.0
-8 3
66 3

338 8
369.9
348.4
336.2
363.7

314 8
341.9
329.4
344.4
429.9

537 8
596.5
650.5
685.5
748.0

197 0
228.9
258.9
269.7
295.5

1312
153.7
179.5
200.5
221.5

65 9
75.2
79.4
69.3
74.0

340.8
367.6
391.5
415.8
452.4

2,641.5
2,931.7
3,095.4
3,318.3
3,604.4

8.8
12.4
3.8
7.7
10.8

9.9
11.0
5.6
7,2
8.6

1982:
I
||
Ill
IV

27.7
35 5
66
6.3

359.4
366.3
346 3
321.7

331.7
330.8
339.7
315.4

630.9
633.7
656 3
681.0

249.8
245.0
261.6
279.4

168.4
175.3
183.3
191.0

81.4
69.7
78.2
88.4

381.1
388.7
394.7
401.6

3,043.1
3,072.1
3,095.5
3,170.8

.2
4.7
2.5
3.9

4.6
3.9
3.1
10.1

1983:
1
II
Ill
IV

19.6
-65
16 4
-29.8

328.5
328.1
342 0
346.1

308.9
334.5
358.4
375.9

678.8
682.2
689.8
691.4

273.0
270.5
269.2
266.3

194.7
199.3
200.9
207.2

78.3
71.3
68.3
59.1

405.8
411.6
420.6
425.1

3,216.8
3,286.4
3,350.9
3,419.0

8.5
12.3
10.1
10.6

5.9
8.9
8.1
8.4

-515
-58 7
90 6
643

358.9
362.4
368.6
364.7

410.4
421.1
459.3
429.0

704.4
743.7
7610
782.7

267.6
296.4
302.0
316.1

213.4
220.8
220.3
231.4

54.2
75.6
81.7
84.6

436.8
447.4
458.9
466.6

3,479.5
3,594.1
3,622.8
3,721.4

14.9
10.7
5.6
6.4

7.3
13.fi
3.2
11.3

1984:
||
III
IV P

9.6

11.1
12.8
12.4

1
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.




233

TABLE B-2.—Gross national product in 1972 dollars, 1929-84
[Billions of 1972 dollars, except as noted; quarterly data 3t seasonally adjusted annual rates]
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
19S1
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977 .
1978
1979
1980

1981
1982
1983
1984 ".
1982:
III
IV
1983:
I
II
Ill
IV
1984:
I
II
Ill
IV

Gross private domestic investment
Fixed investment

Gross
national
Nonproduct Total Durable Jurabt
durable Services Total
goods

Nonresidential
Total

Residential

Producers'
Total Struc- durable Total
tures equipment

ProducNonfarm Farm ers'
struc- struc- durable
tures tures equipment

in
business
inventories

37.5
104
20.9
25.8
30.4
17.6
14.0
18.7
27.6
42.1
48.9
51.1
46.0
50.0
52.9
52.1
56.3
55.4
61.3
65.4
66.2
59.3
63.6
66.9
66.7
72.0
75.1
82.7
97.4
108.0
105.6
109.5
116.8
113.8
112.2
121.0
138.1
135.7
119.3
125.6
140.3
158.3
169.9
165.8
175.0
166.9
171.0
205.2

21.1
5.0
8.7
10.0
12.0
6.8
4.2
5.5
8.3
18.9
17.4
18.4
17.9
19.2
20.7
20.6
22.6
23.6
25.4
28.3
28.4
26.8
27.4
29.5
30.2
31.6
31.9
34.4
40.6
43.4
42.0
42.8
45.0
43.9
42.8
44.1
47.4
43.6
38.3
39.5
40.4
44.6
49.1
48.8
53.2
53.3
49.2
56.9

16.4
5.5
12.1
15.8
18.5
10.9
9.8
13.2
19.2
23.2
31.5
32.6
28.1
30.8
32.2
31.5
33.7
31.8
35.9
37.0
37.8
32.5
36.2
37.4
36.5
40.4
43.1
48.3
56.8
64.5
63.6
66.8
71,8
69.9
69.3
76.9
90.7
92.1
81.1
86.1
99.9
113.7
120.8
117.0
121.8
113.5
121.8
148.3

13.7
2.8
11.1
12.5
13.3
6.7
4.0
34
3.8
16.6
21.3
25.6
23.8
33.0
27.3
26.6
27.5
29,9
34.8
31.5
29.2
30.0
37.4
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
44.5
37.9
53.7
60.3

40.9
41.5
41.2
36.6
35.4
41.3
41.7
39.2
51.6
61.5
59.9
45.3
39.8
48.7
57.9
59.5
56.3
44.2
42.0
35.3
51.2
57.6

953.7 138.5 360.5
958.9 138.8 362.0
964.2 139.3 363.7
976.3 145.2 366.0

454.7 204.7 211.4 175.2
458.1 200.4 204.5 166.9
461.2 194.3 200.7 163.9
465.1 177.8 202.4 161.5

55.4
53.7
524
51.9

119.8
113.2
111.5
109.7

36.2
37.6
36.8
40.8

33.9
35.0
34.4
38.1

1.9 -6.7
1.9 - 4 . 0
1.9 - 6 4
1.9 -24.6

1,491.0 982.5 146.8 368.8
1,524.8 1,006.2 156.2 374.9
1,550.2 1,015.6 159.6 378.5
1,572.7 1,032.4 167.2 383.2

466.8 191.3 207.8 161.6
475.1 212.6 218.7 165.3
477.6 230.6 229.8 172.6
482.0 249.5 242.2 184.5

49.0
48.1
48.3
51.4

112.5
117.2
124.3
133.1

46.2
534
57.2
57.8

43.8
51.0
54.7
55.2

2.0 = 16.5
2.1 - 6 . 1
2.1
.9
7.2
2.2

1,610.9 1,044.1 173,7 387.1
1,638.8 1,064.2 178.6 396.6
1,645.2 1,065.9 177.0 395.5
1,065.9
1,661.1 1,076.2 182.1 397.5

483.4
488.9
493.5
496.6

54.1 139.2
56.8 146.0
57.1 1524
59.6 155.5

60.6
60.8
60.1
59.8

58.0
58.1
57.3
57.0

2.2
2.3
2.3
2.4

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

1,512.2
1,480.0
1,534.7
1,639.0
1,483.5
1,480.5
1,477.1
1,478.8

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
950.5
963.3
1,009.2
1,062.6

20.9
10.7
18.6
21.2
24.2
15.7
14.0
13.0
14.4
25.4
30.1
32.5
35.5
42.6
39.1
38.0
42.1
42.5
51.1
48,8
48.6
45.3
50.7
51.4
49.3
54.7
59.7
64.8
72.6
78.4
79.5
88,3
91.8
89.1
98.2
111.1
121.3
112.3
112.7
126.6
138.0
146.8
147.2
137.5
140.9
140.!
1571
177.9

98.1
82.9
115.1
119.9
127.6
129.9
134.0
139.4
150.3
158.9
154.8
155.0
157.4
161.8
165.3
171.2
175.7
177.0
185.4
191.6
194.9
196.8
205.0
208.2
211.9
218.5
223.0
233.3
244.0
255.5
259.5
270.5
277.3
283.7
288.7
300.6
307.4
302.5
307.5
321.9
333.4
344.4
353.1
355.6
360.8
363.1
376.3
394.2

96.1
76,9
86.1

55.8
8.4
33.6

88.8

44.5
55.8
29.5
18.1
19.7
27.7
70.9
70.0
82.1
654
93.5
93.9
83.0
85.3
83.1
103.8
102.6
97.0
87.5
108.0
104.7
103.9
117.6
125.1
133.0
151.9
163.0
154.9
161.6
1714
158.5
173.9
195.0
217.5
195.5
154.8
184.5
214.2
236.7
236.3
208.5
230.9
194.3
221.0
289.7

91.8
95.5
100.2
102.8
106.3
116.7
120.S
124.7
126.5
132.9
137.2
140.9
145.6
150.5
157.6
165.0
170.3
175.9
184.8
192.4
200.2
208.8
217.8
229.8
240.9
251.8
263.7
275.6
288.8
299.3
309.9
325.3
339.2
348.0
359.3
374.7
393.0
412.0
427.3
438.8
448.8
459.8
475.4
490.6

285.5
283.9
300.2
289.1

51.2
13.2
32.0
38.3
43.8
24.3
18.0
22.0
31.4
58.7
70.2
76.6
69.8
83.0
80.2
78.7
83.8
85.3
96.1
96.3
95.5
89.3
100.9
101.2
100.9
109.7
117.5
125.9
140.1
146.2
142.7
152.6
160.4
154.8
165.8
184.8
200.4
183.9
161.5
176.7
200.9
220.7
229.1
212.9
219.6
204.7
224.6
265.5

253.9 193.3
263.7 202.9
269.6 209.5
274.9 215.1

See next page for continuation of table.




234

13.0
2.5
10.4
11.6
12.3
6.0
3.5
3.0
3.4
15.3
19.7
23.8
22.1
31.3
25.7
25.1
26.1
28.5
33.5
30.0
27.8
28.6
35,9
32.9
32.8
36.3

0.6
'.6

.8
.9
.6
4
4
.3
1.1
1.3
1.5
1.4
1.3
1.3
1.2
1.2
1.1
.9
1.0
1.0
.9
1.0
.8
1.0
.9
.9
.9
.8
.9
.9
.8
.9
.6
'.$

1.1

0.1
.1
.1
.1
.2
,1
,0
.0
.1
.3
.3
.3
.3
.3

'.2
4
4
4
.5
.6
.5
.6
.6

7
.8
.8
.9
1.1
1.1
1.3
1,5
1.7
1.7
1.6
1.7
1.8
IS
2J
2.0
2.0
1.9
2.1
2.3

4.6
-4.9
1.6
6.2
12.0
5.2
~2i3
-3.6
12.2
—2
5^5
=44
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
-4.4
11.3
-104
-3.6
24.2

31.6
20.3
30.6
14.2

TABLE B-2.—Gross national product in 1972 dollars, 1929-84—Continued
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Net exports of goods and
services

Government purchases of goods and
services
Federal

Year or quarter
Net
exports Exports mports

Total
Total

National
defense

Nondefense

State
and
local

Percent change
from preceding
period1
Final
sales

Gross
national
product

Final
sales

1929
1933
1939

3.7
,4
3.4

16.7
9.1
14.3

12.9
8.6
10.9

41.0
429
63.0

7.0
10.9
22.8

33.9
32.0
40.3

311.0
227.0
318.2

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

4.4
3.2
-.6
-5.9
-6.2
-3.7
13.2
18.9
10.8
10.7

15.5
164
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
271.3
300.4
265.4
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
368
34.3
31.7
30.7
31.7
34.9
39.4
419
47.5

337.9
3884
456.5
531.5
571.4
564.0
466.1
470.6
484 3
496.6

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

5.9
10.1
7.9
4.8
6.9
7.3
10.1
118
5.6
2.7

23.6
28.6
27.9
26.6
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
26.1
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
12
6.7
2.1
18
-.4
6.0

5.6
7.9
5.5
4.3
-.6
5.1
2.5
2.5

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

7.7
8.5
7.5
94
12.8
101
6.5
54
1.9
.9

38.4
39.3
41.8
448
50.3
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
2098
229.7
248 5
260.2
257.4

90 4
95.3
102.8
1018
100.2
1003
112.6
1251
128.1
121.8

733.7
82.4
753.7
87.5
90.4
792.4
825.0
95 8
102.4
869.3
109 5
917.5
117.1
968.0
999.2
123.4
132.1 1,049.1
135.6 1,076.6

2.2
2.6
5.8
40
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
1979

3.9
1.6
.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
818
80.7
714
84.7
90.9
102 7
109.0

2511
250.1
253.1
253 3
260.3
265 2
265.2
269.2
274 6
278.3

1106
103.7
101.7
95 9
96.6
97 4
96.8
100.4
100 3
102.1

73*1
68 3
66.9
66.4
64.9
65.4
65.7
67.4

2&5
27 6
29.7
310
31.8
35.0
34 7
34.8

140.5
146.4
151.4
157.4
163.6
167.8
168.4
168.8
174.3
176.2

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

—2
3.4
5.7
5.8
-.6
-1.2
5.4
5.5
5.0
2.8

.5
3.0
5.5
5.2
-.2
.3
4.2
5.1
4.9
3.5

1980
1981
1982
1983
1984"

50.3
43 8
29 7
12 6
15 5

159.1
160.2
147 6
139 5
145.8

108.8
116.4
118.0
126.9
161.3

284.3
287.0
292 7
2919
302.2

106.4
110.3
117.0
116.2
122.4

70.0
73.5
79.1
84.7
89.5

36.4
36.7
37.9
31.5
32.9

177.9
176.8
175.7
175.7
179.8

1,479.4
1,500.9
1,490.4
1,538.3
1,614.8

-.3
2.5
2.1
3.7
6.8

.5
1.5
3.2
5.0

1982:
I
I
t
H
I
IV

34.9
341
25 7
24.1

152.2
155.1
146 6
136.7

117.3
121.0
120.9
112.6

290.2
287.0
292.8
300.6

114.8
111.0
117.2
124.8

75.7
78.1
80.6
81.9

39.1
32.9
36.6
42.9

175.4
176.0
175.7
175.8

1,490.3
1,484.5
1,483.5
1,503.4

-4.6
-.8
-.9
.5

-1.0
-1.5
-.3
5.5

22.9
13 6
119
2.0

138.2
137.0
1416
141.0

115.3
123.4
129.7
139.1

294.3
292.4
292.0
288.8

119.0
117.2
115.6
113.0

83.3
84.8
84.4
86.3

35.7
32.3
31.2
26.7

175.3 1,507.5
175.2 1,530.9
176.4 1,549.3
175.8 1,565.4

3.3
9.4
6.8
5.9

1.1
6.4
4.9
4.2

-8.3
-114
27 0
-15.2

144.9
144.7
147 4
146.2

153.2
156.2
174.4
161.4

289.5
302.1
306.1
311.0

112.2
123.2
125.0
129.1

87.1
89.6
89.1
92.1

25.2
33.6
36.0
37.0

177.3 1,579.3
178.9 1,618.5
181.1 1,614.6
181.9 1,646.9

10.1
7.1
1.6
3.9

3.6
10.3
-1.0
8.3

1977 . .
1978

•

1983:
II
III
IV
1984:
|
||
III
IV

6.6
-2 2
7.8

-3.1
6.3

7.6
6.2
163
14 9
17.5
15.3
16.4
15.1
7.1
7.5
13
-1.5
- 1 4 7 -17.4
-1.7
1.0
41
29
.5
2.5

il

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.




235

TABLE B-3.—Implicit price deflators for gross national product, 1929-84
[Index numbers, 1972-100, except as noted; quarterly data seasonally adjusted]
Personal consumption
expenditures

Gross private domestic investment'
Fixed investment

Year or quarter

Gross
national
product

(Presidential
Total

NonDurable durable
Services
goods

Total
Total

Residential

Producers'
durStructures able
equipment

Total

Nonfarm
structures

Farm
structures

Producers'
durable
equipment

1929
1933
1939.....

32.76
25.13
28.43

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

33.4
26.2
32.0

28.2
20.7
26.6

27.8
19.8
26.3

28.6
19.5
23.4

77.2
58.8
61,1

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

29.06
31.23
34.32
36.14
37.01
37.91
43.88
49.55
52.98
52.49

30.9
33.2
36.7
40.1
42.4
44.1
47.8
52.9
56.0
55.8

36.7
40.0
43.7
467
51.3
55.5
62.1
67.8
70.3
70.5

30.9
33.6
39.1
43.7
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
36.7
40.0
46.9
51.5
53.0

23.4
24.9
28.4
32.4
33.8
33.9
36.6
44.0
48.8
48.4

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
29.7
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

59.6
63.8
71.3
71.4
75.0
84.6
95,2
105.6
111.5
107.9

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

53.56
57.09
57.92
58.82
59.55
60.84
62.79
64.93
66.04
67.60

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

56.7
60.9
62.3
63.1
63.6
65.0
68.5
71.1
71.0
71.8

54.5
59.1
60.1
61.2
61.7
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
65.7
66.2
66.5
68.3
70.6
70.9
70.8
70.7

107.4
114.9
114.6
114.2
112.4
109.1
104.3
103.4
101.9
101.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

68.70
69.33
70.61
71.67
72.77
74.36
76.76
79.06
82.54
86.79

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
71.7
72.7
74.2
76.4
78.7
81.9
86.0

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
74.7
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
79.7
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
80.7
87.7

70.9
70.9
71.1
70.5
70.8
72.0
74.3
76.7
80.5
87.5

71.1
70.7
71.2
70.6
70.9
72.2
74.2
76.7
80.6
87.5

100.8
99.0
96.8
95.3
94.3
92.1
90.8
91.0
93.5
95.7

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

91.45
96.01
100.00
105.75
115.08
125.79
132.34
140.05
150.42
163.42

92.5
96.5
100.0
105.7
116.4
125.3
131.7
139.3
149.1
162.5

95.7
99.0
100.0
101.7
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

90.5
95.6
100.0
104.7
113.0
121.6
129.6
139.3
150.0
162.3

91.1
95.7
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
149.7
158.8

90.5
94.8
100.0
109.1
120.3
131.0
140.7
158.0
178.3
200.5

90.3
94.7
100.0
109.4
120.8
131.6
141.3
159.0
179.8
202J

90.6
95.0
100.0
109.2
120.5
131.9
140.7
157.0
180.0
202.7

97.8
99.3
100.0
100.6
106.8
116.9
122.7
126.7
132.6
140.3

1980
1981
1982
1983
1984 "...

178.42
195.60
207.38
215.34
223.38

179.0
194.5
206.0
213.6
220,4

156.2
167.1
174.5
177.7
179.0

188.1
202.5
208.7
213.0
217.7

178.8
196.8
213.6
226.0
237.6

193.4
208.6
215.4
216.0
218.6

186.2
202.2
209.5
206.4
207.6

227.4
254.2

169.1
179.4

264!l

ill!

218.5
234.1
241.3
246.4
255.9

221.6
237.7
245.1
249.4
259.2

218.1
235.7
249.3
247.3
261.8

149.2
159.3
168.6
172.6
173.2

1982:
I
II
Ill
IV

203.98
206.77
208.53
210.27

202.5
204.5
207.6
209.6

172.8
174.0
175,5
175.6

207.1
207.4
209.6
210.5

207.9
211.4
215.6
219.4

214.4
216.2
214.9
216.1

208.7
210.4
208.8
210.1

268.7
265.8
264.1
266.8

186.0
181.0
184.2
182.8
183.2

241.7
241.8
241.8
240.0

246.0
245.7
245.8
243.1

243.2
249.5
245.4
254.5

165.7
168.2
169.6
170.8

1983:
I
II
Ill
IV

212.87
214.25
215.89
218.21

210.7
212.8
214.8
216.0

176.6
176.8
178.0
179.3

210.2
212.6
214.5
214.8

221.9
224.9
227.3
229.7

215.6
214.4
216.0
217.7

207.1
205.2
205.1
208.1

266.0
261.3
261.4
265.9

181.4
182.2
183.2
185.8

245.2
243.0
248.7
248.3

248.5
245.9
251.7
251.2

249.8
245.4
245.7
248.0

171.5
171.7
172.7
174.7

220.58
222.40
224.57
225.90

218.0
219.2
221.5
222.9

179.0
179.5
179.2
178.3

217.4
216.4
217.8
219.4

232.6
236.0
239.7
242.0

216.6
218.6
219.2
219.9

206.3
207.4
208.0
208.8

262.6
264.1
265.2
264.5

184.4
185.4
186.5
187.4

249.4
255.9
258.6
259.8

252.3
259.2
262.1
263.4

258.5
261.7
261.1
265.7

174.1
173.6
172.3
173.0

1984:

\\ZZ.

III
I P.....
V

See next page for continuation of table.




236

TABLE B-3-—Implicit price deflators for gross national product, 1929-84—Continued
[Index numbers, 1972=100, except as noted; quarterly data seasonally adjusted]
Exports and
imports of goods
and servicesl

Federal

Year or quarter
Total
Exports

Percent change
from pr seeding
peri

Government purchases of goods and services

Imports

Total

NonNational
defense defense

State
and
local

Final
sales

GNP
implicit
price
deflator

Final
sales
implicit
price
deflator

1929
1933
1939

42.2
26 5
32.1

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
519
53.6
55.4
62 8
66 5
63.1

32.8
35.4
400
41.3
42 7
44.9
51.8
62 3
67.8
64.6

21.7
25.5
312
32.8
32 3
31.2
29.6
33 6
37.7
39.7

22.7
27.8
33 0
34.0
331
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
9.9
5.3
24
2.4
15.7
12.9
6.9
-.9

1.8
7.2
10.6
5.6
21
2.2
15.3
13.7
6.0
.1

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

61.0
68 8
68.6
67 5
67 2
68.5
710
74.0
731
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
55.1
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
58.9
59.6
60.6
62.6
64.9
66.1
67.5

2.1
6.6
1.4
16
1.2
2.2
3.2
3.4
1.7
2.4

1.3
62
2.0
19
12
1.8
33
3.6
1.9
2.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

75.2
761
76 0
76 3
77.2
794
81.9
83.5
85 5
88.5

76.1
75.5
74 2
75.2
76.8
77.7
79.4
79.9
811
83.2

58.0
59.1
611
62.6
64.1
66.0
69.1
72.5
76 5
81.1

59.4
60 2
62 0
63 5
65.1
671
70.0
72.7
76 5
80.1

56.5
58.0
601
61.6
63.1
64.9
68.2
72.4
76 4
82.0

68.6
69.3
70.5
71.6
72.7
74.2
76.6
79.0
82.5
86.8

1.6
.9
18
1.5
1.5
2.2
3.2
3.0
4.4
5.1

1.7
1.0
18
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
1619
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
153.1
164.8

100.0
106.6
1151
124.9
132.4
1419
152.7
166.0

100.0
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

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
1983
1984 P

212 9
230.9
236 0
241.0
249 4

289 4
293.8
279.3
271.5
266 6

189 2
207.8
222.2
234.9
247 5

185 2
207.6
221.4
232.1
2414

187.5
209.1
227.0
236.6
247.6

180.8
204.7
209.8
220.0
224.8

191.5
208.0
222.8
236.7
251.6

178.6
195.3
207.7
215.7
223.2

9.2
9.6
6.0
3.8
3.7

9.4
9.4
6.3
3.9
3.5

1982:
1
||
Ill
I
V

236.2
236 2
236 2
235.3

282.9
273.3
280.9
280.1

217.4
220.8
224.1
226.5

217.6
220.7
223.2
223.8

222.5
224.5
227.4
233.1

208.2
211.7
213.9
206.2

217.2
220.8
224.7
228.4

204.2
206.9
208.7
210.9

4.6
5.6
3.4
3.4

57
5.5
3.4
4.4

237.7
239 4
2415
245.4

267.8
271.0
276 3
270.3

230.6
233.3
236 2
239.4

229.4
230.8
232 8
235.6

233.7
234.8
237.9
240.0

219.4
220.3
219.1
221.4

231.5
234.9
238.4
241.8

213.4
214.7
216.3
218.4

5.0
2.6
3.1
4.4

4.8
2.4
3.1
4.0

247 7
250 4
2501
249.4

267.9
269 6
263 3
265.8

243.3
246 2
248 6
251.6

238.5
240 6
2415
244.8

245.1
246.4
247.4
251.2

215.5
225.1
227.1
228.7

246.4
250.0
253.5
256.5

220.3
222.1
224.4
226.0

4.4
3.3
3.9
2.4

3.5
3.2
4.2
2.9

...

1983:
I
j|

Ill
I
V
1984:
1
..
||
III
IV *

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.




237

TABLE B-4.—Fixed-weighted price indexes for gross national product, 1972 weights, 1959-84
[Index numbers, 1972=100, except as noted; quarterly data seasonally adjusted]
Gross private domestic
investment1

Federal

Fixed investment
Year or quarter

Personal
conGross
sumption
national
product expenditures

Total

Percent
change
from
preced-

Government purchases of
goods ana services

Exports and
imports of goods
and services1

Nonresidential

Residential

Exports

Imports

Total
Total

National

Nondefense

State
and
local

national
product
fixedweighted price
index 2

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
80.7
83,0

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

88.4
93.3
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
1984 ".
..

184.2
201.9
214.8
223.8
233.2

184.8
202.1
213.9
222.4
231.1

204.1
221.2
231.4
234.5
240.6

195.9
213.8
225.9
230.4
234.8

219.5
235.3
241.7
242.3
252.2

218.4
238.4
243.8
248.0
250.6

304.4
317.2
309.0
299.9
299.3

193.8
211.8
225.6
236.5
249.2

192.7
214.1
228.7
236.7
246.6

196.7
218.9
234.0
242.3
252.7

182.6
201.9
215.1
222.3
230.7

194.5
210.2
223.6
236.4
250.9

9.8
9.7
6.4
4.2
4.2

1982:
(
id
III
IV

210.9
213.4
216.4
218.9

210.1
212.0
215.4
218.0

229.8
231.1
232.6
232.5

222.6
225.3
227.4
228.9

243.5
242.3
242.5
239.5

244.0
244.8
244.0
243.5

315.5
308.5
306.1
307.0

221.4
223.9
226.4
230.9

225.4
226.9
228.2
234.3

230.8
232.1
233.0
240.0

211.6
213.3
215.8
219.5

218.8
221.8
225.3
228.6

5.6
4.7
5.8
4.6

220.7
222.9
225.5
227.6

219.1
221.5
223.6
225.5

235.6
234.5
237.1
237.5

230.4
230.0
231.0
231.7

245.5
242.9
248.7
248.4

244.5
246.8
249.0
252.7

304.1
299.4
299.4
298.7

232.7
234.8
237.8
240.7

234.6
234.8
237.2
239.9

240.1
240.1
242.5
246.1

220.7
221.0
223.7
224.0

231.4
234.7
238.2
241.2

3.3
4.1
4.7
3.9

230.4
232.8
235.1
237.1

228.2
230.0
232.2
234.4

238.6
242.2
244.0
244.9

232.9
234.7
236.1
236.7

249.4
256.4
259.0
260.4

254.4
257.2
256.3
255.5

300.3
302.1
299.3
297.8

245.0
248.2
250.6
252.8

244.1
246.4
247.3
248.3

250.2
252.9
253.4
254.4

228.5
230.0
231.6
232.8

245.5
249.4
252.8
255.8

5.0
4.3
4.0
3.5

1959

1983:
I
II
til
IV
1984:
I..
II
Ill
IV *..
..

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.




238

TABLE B-5.—Changes in gross national product, personal consumption expenditures, and related price
measures, 1929-84

[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]
Personal consumption expenditures

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
I960
1961
1962
1963
1964
1965
1966 ...
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980 .
1981
1982
1983
1984"
1982:
I
II
HI
IV ..
1983:
1
•1
III
IV ...
1984:

Current
dollars

:

II
III .

Constant
(1972)
dollars

FixedImplicit
price
deflator

6.6
-4.2
7.0
100
250
26.7
21.3
9.6
.9
12
111
11.3
5
10 9
15 5
52
54
.0
9.0
54
5.3
13
8.5
38
3.6
77
5.6
6.9
8.4
94
5.8
92
8.1
52
8.6
101
118
8.1
80
10.9
11.7
12 8
117
88
12 4
3.8
7.7
10.8

6.6
-2.2
7.8
76
163
15.3
15.1
7.1
-1.5
14 7
-17
4.1
5
87
8.3
37
38
-1.2
6.7
21
1.8
-4
6.0
22
2.6
58
4.0
5.3
SJO
60
2.7
46
2.8
2
3.4
57
58
6
-12
5.4
5.5
5.0
2.8
- 3
25
-2.1
3.7
6.8

0.0
-2.1
8
22
75
99
5.3
2.4
24
157
12 9
6.9
g
21
66
14
16
1.2
2.2
32
3.4
17
2.4
16
.9
18
1.5
1.5
2.2
32
3.0
44
5.1
54
5.0
42
5.8
8.8
93
5.2
5.8
7.4
8.6

2
47
2.5
39

Chain
price
index

ed price
index
(1972
weights)

Current
dollars

Constant
(1972)
dollars

Chain
price
index

Fixedweighted price
index
(1972
weights)

-3.8

3.7

16
1.2
14
1.3
1.4
1.9
31
3.0
43
5.0
53
49
41
60
9.1
92
5.7
6.1
7.6
89
89
95
6.6
4.3
4.0

15
1.1
12
1.1
1.2
1.7
29
3.0
41
5.0
52
4.8
40
6.0
9.4
91
5.8
6.3
7.8
9.5
9.8
97
6.4
4.2
4.2

-5.7
4.6
60
13 8
9.7
12.2
8.8
10.5
203
12.5
8.0
19
7.8
7.9
48
5.8
2.7
7.6
4.9
5.4
3.2
7.4
4.5
3.1
60
5.5
6.9
7.5
81
5.4
9.5
8.4
69
8.1
96
10.2
9.4
9.9
11.0
11.1
11.8
11.9
10.7
10.9
7.3
8.6
8.6

46
8
-.9
.5

46
56
3.4
3.4

60
53
5.8
5.0

56
47
5.8
4.6

8.6
6.3
8.5
9.3

2.9
2,2
2.2
5.1

5.5
4.0
6.1
4.0

5.7
4.2
6.3
5.0

5.4
3.7
6.6
4.9

85
12.3
10.1
10 6

33
9.4
6.8
5.9

5.0
2.6
3.1
4.4

34
4.3
4.4
4.1

3.3
4.1
4.7
3.9

4.8
14.5
7.6
9.2

2.6
10.0
3.8
6.8

2,2
4.1
3.7
2.3

2.5
4.4
3.7
3.6

1.9
4.5
3.9
3.4

14.9
10.7
56
6.4

10.1
7.1
1.6
3.9

4.4
3.3
3.9
2.4

4.9
4.1
3.9
3.4

5.0
4.3
4.0
3.5

8.6
10.2
5.0
6.5

4.6
7.9
.7
3.9

3.8
2.2
4.3
2.5

4.7
3.3
3.9
3.8

4.9
3.1
4.C
3.S

9.2
96

28
:
3.8

-2.0
5.3
46
5.9
-1.0
2.9
2.8
6.2
11.1
1.6
2.1
2.3
5.6
1.3
25
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
-.7
2.2
5.6
5.0
4.5
2.7
.5
2.0
1.4
4.8
5.3

Implicit
price
deflator

13
74
10.8
9.0
5.8
4.1
83
10 7
5.8
-3
20
6.5
23
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
8.7
5.9
3.7
3.2

1.7
1.1
1.1
1.4
1.2
1.5
27
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
9.2
6.1
4.1
3.9

1.5
.9
.9
1.2
1.1
1.3
2.4
2.4
3.6
4.4
4.5
4.2
3.5
6.1
10.4
7.8
62
7.4
9.7
11.1
9.4
5.9
4.0
3.9

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.




239

TABLE B-6.—Gross national product by major type of product, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Goods
Year or
quarter

Gross
national
product

Final
sales

Total

Inventory
change
Total

Final
sales

Durable goods
Inventory
change

Final

Inventory
change

Nondurable goods
Final
sales

Inventory
change

Services Structures

Auto
output

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

103.4
55.8
90.9
100.0
125.0
158.5
192.1
210.6
212.4
209.8
233.1
259.5
258.3

101.7
57.4
90.5

1.7
-1.6
.4

56.1
27.0
49.0

54.4
28.6
48.6

1.7
-1.6
.4

16.1
5.4
12.4

1.4
=-.5

38.3
23.2
36.2

0.3
-1.1
.1

35.9
25.9
34.4

11.4
2.9
7.5

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
-.5
4.7
-3.1

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

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

~47
-3.1

15.4
23.8
34.5
54.2
58.5
50.1
31.8
44.4
48.0
50.0

-!6
= .3
.2
1.1
-1.9
3.7
-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
15.7
21.7
28.0
28.4

7.2
8.8
11.9

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

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
.4
-1.5
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

6.8
10.3
3.1
.4
-1.5
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

15.4
13.3
12.0
16.1
14.7
21.2
16.9
19.4
14.4
19.4

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
-.1
3.4
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

21.3
17.8
22.5
25.2
25.9
31.2
30.4
28.0
35.1
34.9

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

-.1
2.8
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

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

28.7
39.1
41.6
46.2
39.2
40.7
55.9
65.1
69.5
68.0

2,631.7
2,957.8
3,069.3
3,304.8
3,661.3

2,641.5 - 9 . 8
2,931.7
26.0
3,095.4 -26.1
3,318.3 -13.5
3,604.4
56.8

1,140.6
1,294.8
1,276.8
1.355.7
1,540.4

1,150.4 - 9 . 8
1,268.8
26.0
1,302.9 -26.1
1,369.2 -13.5
1,483.5

482.0 - 4 . 1
523.2
7.3
517.9 -18.0
557.5 - 2 . 1
623.9
29.0

668.4
745.6
785.0
811.7
859.6

-5.7
18.8
-=-8.1
-11.3
27.8

1,225.2
1,373.0
1,510.8
1,639.3
1,763.6

265.9
289.9
281.7
309.8
357.3

60.8
70.6
67.0
88.7
105.1

3,026.0
3,061.2
3,080.1
3,109.6

3,043.1
3,072.1
3,095.5
3,170.8

= 17.0
-10.9
-15.3
-61.1

1,282.8
1,286.0
1,276.3
1,261.9

1,299.9
1,296.9
1,291.6
1,323.1

-17.0
-10.9
^15.3
-61.1

516.7
515.0 = 7.5
515.2 =4.6
524.7 -43.4

783.1
781.9
776.4
798.4

-3.5
-10.7
-17.8

1,459.1
1,493.7
1,527.8
1,562.5

284.1
281.5
276.0
285.2

59.7
68.3
75.3
64.8

3,173.8
3,267.0
3,346.6
3,431.7

3,216.8 -42.9
3,286.4 -19.4
3,350.9 - 4 . 3
3,419.0
12.7

1,288.7
1,337.1
1,373.2
1,423.9

1,331.6 -42.9
1,356.5 -19.4
1,377.5 - 4 . 3
12.7
1,411.2

526.0 -30.0
546.5 - 5 . 5
564.5
12.5
592.9
14.5

805.6
810.0
813.0
818.3

-12.9
-13.9
-=16.8
-1.7

1,594.1
1,627.2
1,654.5
1,681.3

291.1
302.6
319.0
326.5

79.2
79.4
96.6
99.6

3,553.3
3,644.7
3,694.6
3,752.5

3,479.5
3,594.1
3,622.8
3,721.4

1,498.0
1,544.8
1,549.2
1,569.4

1,424.2
1,494.2
1,477.4
1,538.3

597.5
629.7
613.1
655.4

34.9
18.2
41.7
21.2

826.8
864.6
864.3
882.8

38.9
32.4
30.1
9.9

1,713.7
1,742.6
1,783.3
1,814.7

341.6
357.2
362.1
368.4

114.8
98.7
99.0
107.9

1984 P....,

1982:
j

it"!'."
in....
IV....
1983:
if.!!!!
in....
IV....
1984:

in
iv *..
..

73.8
50.6
71.8
31.1

73.8
50.6
71.8
31.1

Source: Department of Commerce, Bureau of Economic Analysis.




240

TABLE B-7.—Gross national product by major type of product in 1912 dollars, 1929-84

[Billions of 1972 dollars; quarterly data at seasonally adjusted annual rates}
Goods

Year or
quarter

Gross
national
product

Final
sales

Inventory
change

Total
Total

4.6

Final
sales

Durable goods
Inventory
change

4.6

Final
sales

144.3
97.5
154.3

139.7
102.3
152.7

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

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

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

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

13.3
16.0
7.3

187.5
1887
207.4
236.1
234.1
230.2
2427
264.7
285.4
299.1

1,475.0
1,512.2
1,480.0
1,534.7
1,639.0

1,479.4 - 4 . 4
1,500.9
1L4
1,490.4 - 1 0 . 4
1,538.3 - 3 . 6
1,614.8
24.2

668.1
693.1
660.6
688.6
763.6

672.5 - 4 . 4
681.8
11.3
671.1 - 1 0 . 4
692.2 - 3 . 6
739.4
24.2

290.4
291.9
277.4
296.1
327.9

IV

1,483.5
1,480.5
1,477.1
1,478.8

1,490.3 - 6 . 7
1,484.5 - 4 . 0
1,483.5 - 6 . 4
1,503.4 - 2 4 . 6

669.0
662.0
657.9
653.6

1983:
I
II
Ill
IV

1,491.0
1,524.8
1,550.2
1,572.7

1,507.5 - 1 6 . 5
1,530.9 - 6 . 1
1,549.3
.9
1,565.4
7.2

1984:
I
II
III
IV

1,610.9
1,638.8
1,645.2
1,661.1

1,579.3
1,618.5
1,614.6
1,646.9

1929
1933
1939

315.7
222.1
319.8

311.0
227.0
318.2

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

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
7217

524.2
565.6
596.5
622.1
618.2
649.8
665.8
682.2
682.7
714.7

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

737.2
756.6
800.3
832.5
876.4
929.3
984.8
1,011.4
1,058.1
1,087.6

733.7
753.7
792.4
825.0
869.3
917.5
968.0
999.2
1,049.1
1,076.6

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
1,1757
1,237.1
1,234.7
1,238.4
1,290.4
1,356.4
1,422.6
1,472.2

1980
1981
1982
1983
1984".

-4.9

1.6
6.2
12.0

5.2
.1
-2.3
-3.6
12.2

-.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

-4.9

1.6
6.2
12.0

5.2
.1

-2.3
-3.6
12.2

-.2
5.5

-4.4

40.4
17.5
35.5
43.1
57.8
75.7
118.8
135.9
121.2
60.3
75.5
77.3
78.3

Inventory
change

3.5
-2.1

7
3.4
8.2
3.5
7

= 1.8

-37

10.8

1.4
1.6

-2.9

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
-37
4.5
2.9
.9

115.6
114.7
125.7
132.5
143.0
157.2
174.0
178.3
187.4
193.0

2.0
-.1
4.2
3.4
5.1
8.2

Nondurable goods
Final
sales
99.3
84.9
117.2
122.4
128.7
140.5
144.4
1537
161.0
165.8
162.4
162.1
166.4

P.

31.6
20.3
30.6
14.2

.9
2.8
3.8
1.7
-.6
-.5
.1
1.3

-1.6

3.8
-1.5

127.4
1107
135.2

43.9
14.0
30.3

139.9
158.5
193.9
242.0
2637
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

5.1
47
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

21G.6
220.3
227.8
232.2
2437
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
3907
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

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

482.4
497.8
519.0
542.8
562.8
575.9
595.0
617.3
644.7
6707

116.3
127.3
137.3
139.1
121.0
108.3
116.0
124.4
131.9
131.0

-2.5

12.6

382.1
389.9
3937
396.1
411.5

6877
699.9
707.8
723.2
736.9

119.1
119.2
111.6
122.9
138.6

6757 - 6 . 7
666.0 - 4 . 0
664.3 - 6 . 4
678.2 - 2 4 . 6

281.0 - 7 . 5
275.6 - 3 . 5
274.0 - 1 . 6
278.8 - 1 8 . 6

3947
390.4
390.3
399.4

.8
-.6

702.9
707.1
709.4
711.9

111.6
111.5
109.8
113.4

658.9
681.6
698.1
715.5

675.4 - 1 6 . 5
687.7 - 6 . 1
697.2
.9
708.2
7.2

280.5 - 1 2 . 0
292.3 - 2 . 1
299.6
5.6
6.6
311.9

394.9
395.4
397.7
396.3

-4.5
-4.0
-4.8

716.8
721.9
725.4
7287

115.2
121.3
126.6
128.5

744.9
767.4
766.8
775.3

713.3
747.1
736.1
761.1

316.4
331.4
322.4
341.4

14.7

396.9
415.7
4137
4197

16.9
12.2
12.8

731.4
732.9
739.0
7,44.2

134.6
138.5
139.4
141.6

137
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

-67
7.8

31.6
20.3
30.6
14.2

Source: Department of Commerce, Bureau of Economic Analysis.




1.1
-2.8

Structures

164.8
171.8
179.9
189.1
185.9
191.9
197.2
200.8
204.3
211.9

10.6

-3.4

3.9

12.3

6.6
5.4
7.2
.0
3.0
7.2

12.7

9.4

-6.4

5.4
6.9

11.8
6.2
-1.9

3.2

-7.8

-.5

1982:

ir!'."'.zr
III

Services

Inventory
change

241

8.1

17.8

9.6

6.3
4.3
1.1

8.1

-2.6
-3.2
11.6

-4.8
-6.0

.6

4.6

807

80.5

797

81.7
89.8

TABLE B-8.—Gross national product by sector, 1929-84
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross domestic produqt
Year or quarter

Gross
national
product

Business'
Total

Total1

Nonfarml

Farm

Statistical
discrepancy

Households
and
institutions

Government3
Total

Federal

State
and
local

Rest
of the
world

1929
1933
1939

103 4
55.8
909

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

O
R
.3
,fi

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

100.0
125.0
158 5
192.1
210.6
212.4
209.8
2331
259.5
258.3

99.6
124.5
157.9
191.6
210.1
212.0
209.0
231.8
257.9
256.9

89.4
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
.5
1.5
-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

.4
.5
5
.5
,4
.8
1?
16
1.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

286.5
330.8
348.0
366 8
366.8
400.0
4217
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
U.2
12.3
13.3
14.7
15.8
17.6
19.6
21.6
23.1

1.6
2.1
?,3
2.2
?3
?.fi
3.2
3,5
3.0
3.3

I960
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
5918
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
4950
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
2.1
17
.1
-1.2
1.4
-2A
= 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

3.6
3,9
4.6
4.9
5.5
5.9
5.6
5.9
6.7
6.9

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

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
1206 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
11550
U47.3
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
37
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

7.3
9.2
10.9
16.0
19.8
17.3
20.5
23.5
29.6
42.6

1980
1981
1982
1983
1984 »

2,631 7
2,957.8
3,069.3
3,304.8
3,661.3

2 5864
2,907.5
3,021.3
3,256.5
3,616.3

2 2281
2,511.9
2 589.0
2,790.8
3,117.6

2158 2
2,425.4
2 514.4
2,728.9
3,046.9

67 7
80.8
751
61.5
78.8

23
5.6
-Z.2

85.3
96.2
107.4
116.5
123.5

273.0
299.4
324.9
349.2
375.3

82.9
92.6
101.2
107.8
114.6

190.0
206.8
223.7
241.4
260.7

45.3
50.3
48.0
48.3
44.9

3,026.0
3,061.2
3,080.1
3,109.6

2,978.2
3,011.0
3,032.3
3,063.7

2,558.3
2,583.2
2,597.1
2.617.6

2,484.5
2,512.7
2,529.2
2,531.3

82.1
73.6
68.8
75.8

-8.3
-3.1
-.9
10.5

103.4
105.9
108.8
111.3

316.5
321.9
326.5
334.7

99.3
100.0
100.8
104.6

217.2
221.9
225.7
230.2

47.8
50.2
47.8
46.0

3,173.8
3,267.0
3,346.6
3,431.7

3,127.1
3,219.6
3,295.2
3,384.1

2,672.6
2,757.6
2,826.2
2,906.8

2,596.6
2,695.2
2,769.3
2,854.3

68.6
58.3
61.7
57.3

7.5
4.1
-4.8
-4.8

113.5
115.6
117.3
119.6

341.0
346.4
351.6
357.7

106.3
107.3
108.1
109.5

234.7
239.1
243.6
248.2

46.7
47.4
51.5
47.7

3,553.3
3,644.7
3,694.6
3,752.5

3,505.7
3,602.6
3,650.1
3,706.9

3,017.2
3,106.8
3,148.5
3,197.7

2,943.4
3,037.5
3,078.0
3,128.9

71.6
78.3
83.5
81.8

2.2
=9.0
= 13.0
-13.0

121.0
123.1
123.8
126.0

367.4
372.7
377.7
383.2

113.8
114.4
114.7
115.3

253.6
258.3
263.0
267.8

47.6
42.1
44.5
45.6

1982:
II
III
IV
1983:
II
III
IV
1984:
H
III
IV p
1

Includes compensation of employees in government enterprises.
Compensation of government employees.
Source: Department of Commerce, Bureau of Economic Analysis.
2




242

TABLE B-9-—Gross national product by sector in 1972 dollars, 1929-84
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates}
Gross domestic product
Year or quarter

Gross
national
product

Business *
Total

Total 1

Nonfarm 1

Farm

Statistical
discrepancy

Households
and
institutions

Government2
Total

Federal

State
and
focal

1929
1933
1939

315.7
222.1
319.8

313.2
220.9
318.2

271.5
180.0
261.0

244.7
152.5
231.3

23.6
24.9
25.2

3.1
2.6
4,6

15.6
12.2
15.1

26.2
28.8
42.1

5.2
6.6
16.9

21.0
22.1
25.2

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

342.8
398.7
460.1
530.3
567.7
559.3
476.4
467.8
486.8
489.4

282.7
327.6
361.8
385.6
403.6
397.9
385.5
393.8
412.0
409.8

254.6
299.8
335.3
362.1
370.1
362.8
358.6
367.0
389.0
383.4

24.5
26.2
28.6
27.7
27.1
25.6
25.8
24.0
25.8
25.6

3.6
1.6
-2.1
-4.2
6.4
9.4
1.1
2.9
-2.8

16.1
15.9
16.4
15.2
15.1
15.0
15.1
16.0
16.7
17.3

44.0
55.2
81.9
129.4
149.1
146.4
75.9
58.0
58.1
62.3

18.6
29.6
56.7
105.0
125.2
121.8
49.7
29.8
29.2
31.3

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

534.8
579.4
600.8
623.6
616.1
657.5
671.6
683.8
680.9
721.7

531.8
575.6
596.9
619.8
612.1
653.0
666.5
678.3
676.2
716.8

448.7
478.0
492.8
515.6
508.5
547.0
557.4
566.1
561.7
600.O

419.4
447.2
463.7
484.3
477.0
516.0
531.5
539.5
532.0
574.0

27.0
25.8
26.4
27.7
28.4
29.3
28.9
28.2
29.3
27.8

2.4
5.0
2.6
3.6
3.1
1.8
-3.0
-1.7

18.3
18,7
18.6
19.3
19.4
21.4
22.5
23.1
24.2
24.7

64.7
79.0
85.5
85.0
84.1
84.6
86.7
89.1
90.3
92.2

32.7
46.2
51.6
49.6
47.2
45.9
45.6
45.8
44.5
44.5

32.0
32.8
33.9
35.4
36.9
38.6
41.0
43.3
45.8
47.7

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

737.2
756.6
800.3
832.5
876.4
929.3
984.8
1,011.4
1,058.1
1,087.6

732.0
751.0
793.8
825.6
868.9
921.4
977.5
1,003.9
1,050.0
1,079.7

610.1
625.1
663.2
691.6
730.3
777.7
824.0
842.0
882.1
907,1

584.2
596.3
631.5
659.7
701.3
749.6
794.1
812.8
855.6
881.9

29.2
28.9
28.8
29.6
28.8
29.8
28.2
29.5
29.0
29.5

-3.3
-.2
2.9
2.3

-4^4

26.6
27.0
28.1
28.9
29.8
30.9
32.6
34.3
35.4
37.0

95.3
98.9
102.5
105.2
108.8
112.7
120.8
127.7
132.4
135.7

45.2
46.2
48.3
48.2
48.5
48.7
53.0
57.2
58.0
58.2

50.1
52.7
54.3
57.0
60.4
64.0
67.9
70.5
74.4
77.4

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

1,077.6
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

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

875.4
901.7
963.4
1,028.4
1,012.4
994.5
1,059.5
1,129.5
1,193.5
1,222.4

31.1
32.6
31.9
31.6
31.8
33.6
32.1
33.1
32.6
34.2

-1.7
4.2
3.3
.7
3.2
4.4
3.8
1.0
-1.8
-1.0

36.7
37.6
38.6
39.4
39.3
40.5
40.9
41.5
43.3
44.6

136.1
136.7
137.8
139.1
142.3
144.9
146.3
147.7
151.2
153.0

55.2
52.5
50.1
48.2
48.5
48.4
48.5
48.6
49.3
49.0

80.9
84.2
87.7
90.8
93.8
96.5
97.8
99.1
101.9
104.1

1,475.0
1,512.2
1,480.0
1,534.7
1,639.0

1,449.3
1,486.3
1,456.7
1,512.1
1,618.8

1,248.2
1,283.«
1,253.4
1,307.8
1,413.0

1,211.9
1,240.6
1,214.8
1,273.8
1,377.0

35.0
40.3
38.9
33.8
39.7

1.3
2.9
-.3
-3.7

45.5
46.3
46.7
47.3
47.8

155.6
156.2
156.5
157.0
158.0

49.6
50.0
50.5
51.3
51.9

106.0
106.2
106.0
105.7
106.1

1,483.5
1,480.5
1,477.1
1,478.8

1,459.9
1,456.0
1,453.9
1,456.8

1,256.9
1,252.6
1,250.7
1,253.5

1,218.8
1,215.6
1,216.1
1,208.5

42.2
40.0

-4.1
-1.5
-.5
5.0

46.5
46.7
46.8
46.9

156.4
156.8
156.4
156.5

50.2
50.4
50.6
50.8

106.2
106.4
105.8
105.7

1,491.0
1,524.8
1,550.2
1,572.7

1,468.9
1,502.6
1,526.2
1,550.7

1,265.2
1,298.5
1,321.9
1,345.7

1,225.4
1,264.1
1,289.3
1,316.3

36.2
32.5
34.8
31.6

3.5
1.9
-2.3
-2.2

47.1
47.2
47.3
47.5

156.7
156.9
157.0
157.5

51.0
51.2
51.4
51.7

105.6
105.6
105.6
105.8

1,610.9
1,638.8
1,645.2
1,661.1

1,589.2
1,619.8
1,625.3
1,640.9

1,384.0
1,414.1
1,419.5
1,434.3

1,347.5
1,380.1
1,383.5
1,396.9

35.6
38.1
41.8
43.3

1.0
-4.1
-5.9
-5.8

47.6
47.9
47.7
48.2

157.7
157.8
158.1
158.3

51.8
51.9
52.0
52.0

105.8
105.9
106.2
106.3

. ..

1980
1981
1982
1983
1984 p
1982:

llZZZZZZ
III
IV
1983:

IIZZZZZZ
III

-L9

-U
1.7

IV
1984:

\\ZZZZZZ.
in

1 p.
jv Includes compensation of employees in government enterprises.
Compensation of government employees.
Source.* Department of Commerce, Bureau of Economic Analysis.
8




243

TABLE B-10.—Cross national product by industry, 1947-83
[Billions of dollars]
Gross domestic product

Year

FiGross
GovernManufacturing
Anrtrul
Pact
TVone
mant
ncSI
nation* flgrtcu!i ransmeni Ctatieti of the
al
Ture,
portation Whole- nance,
sale insurand
ra!
Pnn
Cal
uonand
prod- forestry, Mining
Dura- Nonand ance, Services governworld
struction Total
uct
and
and
ment discrepble durable public
retail
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 98J
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
114

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
97.5
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
2.1
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
S3.8
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
-2.1
-3.9

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
141.8
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
1983

2,631.7
2,957.8
3,069.3
3,304.8

76.8
90.4
85.5
72.7

96.0
132.3
125.1
112.4

119.8
122.8
123.7
130.7

581.5
643.6
630.6
685.2

350.4
386.8
364.0
389.7

231.1
256.8
266.5
295.5

231.9
261.2
280.7
306.8

428.8
474.1
489.6
536.2

398.7
450.1
491.0
542.5

342.6
389.4
430.9
477.5

308.1
338.1
364.7
392.1

2.3
5.6
-.5
.5

45.3
50.3
48.0
48.3

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.




244

TABLE B-ll.—Gross national product by industry in 1972 dollars, 1947-83
[Billions of 1972 dollars]
Gross domestic product

Year

AgriGross
national culture, Minforestproduct ry, and ing
fisheries

Manufacturing
Construction Total

FiGovern- StaTransment
Rest
por- Whole- nance,
tisand
of the
tation sale insur- ServDura- Nonand ance, ices govern- tical Resid- world
and
dis- ual 1
ment
ble durable public retail and
enter- crepgoods goods util- trade real
estate
prises ancy
ities
46 4
49.4
48.8

111
12.1
119
12 2
11.8

22.9 114 9 68 5
26.5 121.4 72.0
26.5 115.1 66.3
29.3 1311 781
32.5 146.0 89.9
33 8 150 8 94 3
34.8 161.1 102.6
36.0 149.6 91.7

53 0
56.1
56 5
58 5
57.9

42.3
42.1
39.2
41.2
45.5
45 5
46.6
45.8

32.1
31.7
31.1
32.2
30.6

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

737 2
756 6
800.3
832 5
876.4

321
31.8
31.7
32 5
31.8

13 5
13 6
13.9
14 5
15.1

461
46.7
48.4
49.9
52.2

1718
172.0
186.7
202 2
216.7

1965
1966
1967
1968
1969

929.3
984 8
1,011.4
1,058.1
1,087.6

32.8
313
32.6
32.1
32.7

15.7
16 5
17.0
17.6
18.2

54.4
54 6
53.4
56.9
55.8

1970
1971
1972
1973
1974

1,085.6
1122 4
1,185.9
1,254.3
1,246.3

34.4
359
35.4
35.3
35.8

18.9
184
19.0
19.2
19.2

1975
1976....
1977....
1978
1979

1,231.6
1298 2
1,369.7
1438 6
1,479.4

37.1
35 8
36.9
37 0
38.9

1980
1981
1982
1983

1,475.0
1512 2
1,480.0
1,534.7

39.9
45 3
44.1
39.1

2.9 - 7 . 4
68.7
69.2 - 2 . 8 - 1 . 2
73.3
.8 - . 6
.8
2.4
75.6
90.0
.2
5.0
2.6
969
2.6
3.6
4.1
96.3
95.2
4.6
3.1

75.9
78.0
79.8

54 7
56.6
59.8

55.9
57.5
57.6

87.5
88.3
910
93.9
94.5

63.9
66.7
709
73.9
77.3

59.7
60.8
61.6
62.7
62.9

62.3
64.4
64.8
64.5
70.3

49.7 103.1
52.1 106.2
53.2 107.9
51.9 107.8
55.4 115.4

81.8
85.8
89.8
93.4
98.5

67.6
70.9
74.1
76.2
80.8

95.7
1.8
97.8 - 3 0
100.4 - 1 . 7
101.7
104.0 - L 9

4.2
3.4
.9
4.5
4.0

4.5
f>1
5.5
4.6
4.9

1010
99 5
110.0
119 5
129.8

70 8
72 5
76.7
82 8
86.8

57 5
58.6
61.5
65 0
68.1

117 5
118.7
126.3
1311
139.1

102 7
107.3
113.3
116 8
122.1

83.5
86.6
90.3
94.0
98.8

3.1
107 7 - 3 . 3
4.4
111.6
2.9
115.5
3.2
118.7
2.3 - 1 . 5
1.7
123.1

52
^7
6.5
6.9
7.5

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

73.4 148.2
79 4 156 3
81.6 160.1
88.2 169.9
92.6 173.6

128.5
133 9
139.4
145.7
152.9

103.1
109.0
115.0
118.8
124.0

127.8 - 1 . 6
1.7
136 9
144.1 - . 3
148.9 - 2 . 5
152.5 =4.4

2.3
3.0
6.7
6.2
4.6

7.9
74
7.5
8.2
79

53.4
57.9
59.4
60.1
53.3

261.2
266 8
292.5
325.3
311.7

155.2
1564
173.2
194.2
186.3

106.0 94.9 176.4 155.8
110 4 97.9 185 5 162 6
119.3 104.3 199.5 169.8
131.1 110.6 211.1 177.2
125.3 111.9 207.0 184.5

126.7
128.4
136.5
144.8
147.9

4.7
152.9 - 1 . 7
1.2
4.2
153.9
155.4
.0
3.3
157.2
-2.5
161.2
3.2 =6.5

109
15.1
17 3

18.9
191
19.5
201
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
1301
136.3
139 8
143.6

113.5
118 6
125.1
134 2
140.0

209.7
220 2
231.0
244 6
250.7

187.9
194 8
207.2
217.8
229.4

148.5
154.7
164.3
174.2
183.0

4.4 - 4 . 2
164.3
3.8 - . 2
165.7
6.0
1.0
167.5
49
171.7 - 1 8
174.3 -1.0 - 8 . 1

13.8
ISfi
16.9
199
26.3

21.6
22 5
21.6
21.0

52.2
50.1
48.9
50.2

351.0
359 7
336.6
354.1

210.2
216 3
196.9
208.2

140.8
143 4
139.7
145.9

139.6
142.8
138.6
142.5

246.0
252.7
250.3
266.7

235.6
243.6
248.1
253.5

189.1
197.6
200.2
206.8

177.5
178.1
177.9
178.3

1.3 - 4 . 6
2.9 - 8 9
-9.4
= .4
~\l

25.7
?5 9
23.3
22.5

1947
1948
1949

470 3
489.8
492.2

263
28.2
28.0

108
11.3
9.9

1950
1951
1952
1953
1954

534 8
579 4
6008
623 6
616.1

29 3
28.4
29 2
30.5
31.3

1955
1956
1957
1958
1959

657.5
671.6
683.8
680.9
721.7

1960. .
1961
1962
1963
1964

2.5
3.0
2.7
3.0
M
39
17
4.0

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.




245

TABLE B-12.—Gross domestic product of nonfinancial corporate business, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Slet domestic product

Year or
quarter

Capital
Gross
consumpdomestion
tic
product
ances
of
with
noncapital
financial
consumpcorpotion
rate
adjustbusiness
ment

Indirect
business
tax,
etc.1

Total

CompenProfit*
Invensation
Capital Net
tory
of
consump- interProfits after tax
Profvaluemployest
tion
Total Profits its
ation
ees
Undis- adjust- adjustbefore tax
Diviment
tax liabil- Total dends tributed ment
ity
profits
8.4
.6
6.1
8.8
16.4
20.1
23.6
22.2
17.8
22.0
29.1
31.8
24.9

1.2
.5
1.4
27
7.5
11.2
13.8
12.6
10.2
8.6
10.8
11.8
9.3

7.3
.1
47
6.1
9.0
8.9
9.8
9.6
7.6
13.4
18.3
20.0
15.6

5.1
2.0
3.3
3.5
3.9
37
3.9
4.1
4.1
4.8
5.5
6.0
6.0

2.2
-1.9
1.4
2.6
5.0
5.2
5.8
5.6
3.5
8.6
12.8
14.0
9.6

0.5
-2.1
=7
-.2
-2.5
= 1.2
-.8
-.3
= .6
=5.3
=5.9
=2.2
1.9

-1.4
-.6
-1.1
-1.2
-1.3
-1.2
-.9
-.3
=.2
-3.0
= 3.5
-4.0
-3.9

1.4
17
1.5
1.4
1.3
1.3
1.1
1.0
IX
7
.8
.9
1.0

947
110.2
118.3
1287
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
337
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
207
17.5
22.4

7.5
7.1
7.1
7.3
7.4
8.5
9.0
9.3
9.3
10.0

14.1
10.8
8.8
9.1
9.0
13.4
127
11.4
8.2
12.4

=5.0
-1.2
1.0
= 1.0
— 3
•
-17
-2.7
-1.5

-3.9
-4.6
=4.5
= 3.9
=3.2
-2.0
-3.2
-3.4
-3.2
= 2.7

.9
1.1
1.2
1.3
1.5
1.6
17
2.2
27
3.1

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
2715
291.9
322.8
358.5

37.4
38.3
45.6
51.2
577
677
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
277
33.4
311

20.5 10.6
20.1 10.6
23.5 11.4
26.2 12.6
31.4 137
38.0 15.6
40.8 16.8
38.6 17.5
39.5 19.1
36.2 19.1

9.9
9.5
12.2
13.5
177
22.4
24.0
21.2
20.4
17.1

— 2
*
3
.0
.1
-.5
-1.2
-2.1
-1.6
=3.7
= 5.9

511.4
52.2
552.6
57.3
615.5
62.6
691.6
67.9
739.4
79.5
795.1
94.9
896.5
104.8
1157 1,0127
130.9 1,145.3
149.6 1.267.3

63.4
448.1
482.1
70.5
538.7
767
607.9
837
649.7
897
697.9
97.1
105.3
791.2
112.6
900.1
122.0 1,023.3
130.5 1,1367

378.4
402.0
447.0
506.2
556.5
581.1
654.4
738.5
844.3
958.1

527
62.1
727
78.6
63.6
86.1
107.3
129.5
142.1
1347

56.8
65.4
76,6
96.0
105.3
107.3
135.0
156.5
178.4
191.8

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 66.1 257
52.6 82.3 30.1
59.6 96.8 31.9
66.9 111.5 377
69.2 122.5 39.8

11.3
17.1
22.9
35.0
41.9
40.4
52.2
64.9
73.8
82.8

-6.6
=4.6
-6.6
-20.0
-40.0
-11.6
-147
-16.2
-24.0
-43.1

2.4
1.3
27
2.6
-1.8
=97
-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

170.0
192.0
2097
218.0
231.0

147.6
1777
180.2
1967
214.8

1,2210
1,369.4
1,388.4
1,503.0
1,704.9

1,046.5
1,154.6
1,198.1
1,2611
1,392.4

120.3
147.4
118.1
171.0
2327

177.8
177.3
123.5
148.8
182.7

67.0 110.8 43.7
619 113.4 53.4
44.3 79.2 56.8
58.0 90.8 62.8
70.0 112.7 69.9

67.1 =42.9
60.0 - 2 3 . 6
22.4 - 9 . 5
28.0 - 1 1 . 2
42.9 = 57

-147
-6.3
4.1
33.4
557

56.3
67.4
72.3
69.0
79.8

203.8 1,566.9
2081 1 574 7
212 0 1*575.8
215.1

177.9 1,388.9 1,187.2 125.9
178.3 1,396.4 1,199.2 121.4
1808 l'395'o 1205 2 1209
1819
l'200"9 10^1

132.5
128.5
125 6
1014

49.3
46.6
44 8
36^

811
81.8
809
7L0

56.8
55.5
57 5
57:6

26.3 - 6 . 3
26.3 — 8.9
10 1
23 4
114 = 12.6

= .3
1.9
54
9^

75.9
75.8
690
68^

1,812 3
1887 6
1,956.6
2,014.2

214 2
215 3
220.0
222.5

186 3
1964
200*4
2037

128.8
161 2
188*0
205.8

110.8
142 5
170:4
171.5

41.9 68.9
56 4 86 1
67^ 1034
667 104.8

61.1
62 9
63^
63.9

7.8 =4.3
12*1
23 1
40^ - 1 ^ 3
40.9 =9.2

22.3
30 7
36^
43.6

67.2
67 1
70:4
71.3

2 084 2
2,146.9
2,168.9

225 6 1858 6
229.3 1,917.6
232.9 1,936.0
236.1

207 3 16512 1354 0 223 0
213.4 1704.2 1384:5 240^
216.9 1,719.1 1,405.2 231.6
1,425.9
221.6

188 9
195^
173.8

74.5 114 5 65 9
118:6 70^
64^ 109.5 70.9
72.2

48 5 = 13 5
48^ - 7 ^
38.5
— 2
-17

47 5 74 2
52^ 78^
58.0 82.4
65.0 83.5

50.1
24.4
43.7
50.4
65.6
82.9
98.7
102.1
95,3
99.3
120.0
137.3
133.5

5.5
4,3
4.8
4.9
5.4
6.1
6.2
6.3
6.5
7.6
9.3
10.9
117

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

151.9
174.5
182.3
195.0
191.9
216.7
231.6
242.3
236.3
266.0

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984 »

277.0
285.0
311.3
331.8
358.4
393.6
431.5
454.1
500.2
544.1
5637
609.9
678.0
759.4
818.9
890.0
1,001.3
1,128.4
1,276.2
1,416.8
1,540.7
1,739.2
1,778.4
1,917.7
2,150.6

1982:
1
tl
II
I
IV

1,770.6
1,782.7
1787 8
1,772.4

1983:
1
I
I
III
IV

II
Ill
IV*1

Total

7.5
32.3
167 - 2 . 1
28.2
4.2
7.4
31.2
39.8 127
51.0 17.7
62.2 21.8
65.1 21.6
61.9 17.1
67.2 118
79.1 197
87.8 25.6
85.3 22.9

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

1984:

Domestic income
Corporate profits with inventory valuation and capital
consumption adjustments

44.5
20.2
39.0

41.2
16.3
33.9

45.4
60.2
76.8
92.4
95.8
88.8
91.8
1107
126.4
121.8

3.4
3.8
5.1
5.5
6.4
6.8
7.3
8.1
8.9
10.1
11.2
12.1
12.6

40.0
53.8
70.0
85.2
877
79.9
81.6
99.6
114.3
109.2

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

26.8
27.5
28.4
29.4
30.8
327
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
41.1
42.9
45.8
51.5
58.0

1,3707
1,547.1
1,5687
1,6997
1.9197

1,598.2
1672 3
1,736.6
1,791.8

1,411.9
1475 9
i;536*2
1,588.0

1,215.9
1*247 7
1*277*8
1,310.8

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




246

— .3

15
-2.1
-1.5
3.9
1.4 4.5
2.3 4.8
2.9 5.3
6.1
37
3.9 7.4
4.0 87
4.0 10.1
4.0 13.1

TABLE B-13.—Output, costs, and profits of nonfinancial corporate business, 1948-84
[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)'

Total
cost
and
profit2

Capital
consumption
allowances
with
capital
consumption
adjustment

Indirect
business
tax,
etc5

Compensation
of
employees

Corporate profits with
inventory valuation and
capital consumption
adjustments

Total

Profits
tax
liability

Profits
after
tax*

Net
interest

Output
per nour
of all
employees
(1972
dollars)

Compensation
per hour
off all
employees
(dollars)

1948
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
7594
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
1276 2
1,416.8

694.2
745.5
795.8
8463
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
7.998
8,141
8.209
8.194

6.507
7,021
7.555
8.191
8.961

1980
1981
1982
1983
1984 P.

1,540.7
1,739.2
1,778.4
1,917.7
2,150.6

859.5
883.3
857.4
896.4
976.5

1.793
1.969
2.074
2.139
2.202

.198
.217
.245
.243
.237

.172
.201
.210
.219
.220

1.218
1.307
1,397
1.409
1.426

.140
.167
.138
.191
.238

.078
.072
.052
.065
.072

.062
.095
.086
.126
.167

.065
.076
.084
.077
.082

8,118
8.271
8.357
8.634

9.884
10.811
11.677
12.166

1,770.6
1,782.7
1,787.8
1,772.4

865.1
859.6
858.5
846.5

2.047
2.074
2.083
2.094

.236
.242
.247
.254

.206
.207
.211
.217

1.372
1.395
1.404
1.419

.145
.141
.141
.123

.057
.054
.052
.043

.088
.087
.089
.080

.088
.088
.080
.081

8.317
8.313
8.406
8.398

11.413
11.596
11.801
11.913

1,812.3
1,887.6
1,956.6
2,014.2

855.7
886.2
912.4
931.1

2.118
2.130
2.144
2.163

.250
.243
.241
.239

.218
.222
.220
.219

1.421
1.408
1.400
1,408

.151
.182
.206
.221

.049
.064
.073
.072

.102
.118
,133
.149

.079
.076
.077
.077

8.464
8.617
8.728
8.725

12.027
12.131
12.224
12.283

2,084.2
2,146.9
2,168.9

956.9
979.5
980.0

2.178
2.192
2.213

.236
.234
.238

.217
.218
.221

1.415
1.414
1.434

.233
.246
.236

.078
.079
.066

.155
.167
.171

.078
.081
.084

8.801
8.863
8.807

12.454
12.528
12.628

1982:

IIZII

III
(V

1983:

lf"ZZ
lit
IV

1984:
II*
Ill

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).




247

TABLE B-14.—Personal consumption expenditures, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Nondurab

Durable good j
Year or quarter

Personal
consumption
expenditures

Durable
goods

Nondurable goods

Services

Furniture
and
Motor
vehicles household
and parts
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
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

2.8
3.5
.7
.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
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
424

98.2
108.8
113.9
11G.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

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

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

19.7
17,8
21.5
24.4
26.1
30.0
30.4
30.1
36.3
38.7

17.7
17.9
18.9
20.3
22.8
24.7
27.7
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
287
29.5
31.9
33.5
36.6
38.2
42,1
45.5

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

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
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
325.3
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
27.7
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...
1984"

1,668.1
1,849.1
1,984.9
2.155.9
2,342.3

214.7
235.4
245.1
279.8
318.4

668.8
730.7
757.5
801.7
858.3

784.5
883.0
982.2
1,074.4
1,165.7

90.7
101.9
108.7
129.3
149.5

86.3
92.3
94.4
104.1
117.1

37.7
41.2
42.1
46.4
51.8

345.1
373.9
392.8
416.5
444.3

104.6
114.3
118.8
127.0
140.3

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

1,931.3
1,960.9
2,001.3
2,046.1

239.4
241.6
244.5
255.0

746.4
750.6
762.5
770.6

945.4
968.6
994.2
1,020.6

106.2
105.1
108.1
115.3

92.1
94.4
94.5
96.6

41.2
42.1
41.9
43.1

384.2
390.6
396.0
400.3

118.0
118.0
119.0
120.0

1983:
I
II
Ill ....
IV....

2,070.4
2,141.6
2,181.4
2,230.2

259.4
276.1
284.1
299.8

775.2
796.9
811.7
823.0

1,035.8
1,068.6
1,085.7
1,107.5

115.3
128.4
132.0
141.7

99.1
102.4
105.2
109.8

45.0
45.3
46.9
48.2

406.7
413.6
420.5
425,1

121.6
127.1
126.8
132.5

2,276.5
2,332.7
2,361.4
2,398.6

310.9
320.7
317.2
324.7

841.3
858.3
861.4
872.1

1,124.4
1,153.7
1,182.8
1,201.8

147.7
152.3
148.6
149.4

113.0
116.6
116.8
122.0

50.3
51.7
51.9
53.3

433.9
442.1
448.6
452.6

136.1
142.2
139.3
143.7

1984:
if!!!!
III....

IV.

See next page for continuation of table.




248

TABLE B-14.—Personal consumption expenditures, 1929-84—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Services

Nondurable goods—cont'd
Year or
quarter

1929
1933
1939

Gasoline
and oil

Fuel oil
and coal

Household operation
Other

Housing >

Total

Electricity
and gas

Other

Transportation

Other
Total

Medical
care

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
?4

2.6
1.5
2.0

12.0
7.7
10.0

2.2
1.5
2.1

2.3
2.6
2.1
1.3
1.4
18
3.4
4.0
4.8
5.3

1.5
1.7
1.9
2.0
2.0
22
2.5
30
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
64
6.8
7.5
8.1
8.5

1.5
1.5
1.6
1.7
1.8
19
2.1
23
2.6
2.9

2.6
2.7
3.2
3.5
4.1
45
4.7
5.1
5.4
5.6

2.1
2.4
2.7
3.4
3.7
40
5.0
5.3
5.8
5.9

10.3
11.2
12.2
13.9
15.2
16 4
19.4
217
23.6
24.1

2.2
2.4
2.6
2.9
3.3
36
4.5
5.5
6.3
6.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

5.5
6.1
6.8
74
7.8
8.6
9.4
10.2
10.6
11.3

3.4
3.5
3.4
34
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
3.0
9.3
10.1

25.6
27.0
28.8
310
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

I960
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
47
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
45
5.0
6.2
77
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
410
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
1984 ".

84.8
94.6
90.4
90 0
91.7

18.6
20.7
20.6
210
21.3

115.7
127.1
135.0
147 2
160.7

266.2
302.0
333.8
363 3
397.8

113.0
127.5
143.4
153 8
164.1

57.6
65.8
75.2
813
85.8

55.4
61.7
68.2
72.5
78.3

61.1
65.0
68.2
72.5
78.2

344.3
388.5
436.8
484.8
525.5

145.1
170.6
193.1
209.9
227.4

93.4
88.6
89.9
89.6

20.6
20.1
21.1
20.7

130.2
133.3
136.5
139.9

323.4
329.3
337.3
345.2

140.0
142.0
144.4
147.3

74.5
74.4
75.2
76.9

65.5
67.7
69.2
70.5

66.0
67.9
69.7
69.3

415.9
429.5
442.9
458.7

184.5
191.1
196.3
200.5

86.7
89.5
92.1
91.7

18.6
21.0
22.4
22.1

141.7
145.7
149.8
151.5

352.6
359.2
366.8
374.7

147.0
155.0
155.7
157.5

75.1
82.6
83.6
84.0

71.9
72.5
72.1
73.5

70.2
71.1
73.9
74.8

466.1
483.2
489,3
500.5

203.6
208.4
211.3
216.3

92.0
92.8
90.0
92.0

22.5
21.6
21.1
19.8

156.7
159.7
162.5
163.9

382.4
392.4
403.3
413.3

158.8
163.3
167.6
166.8

82.6
86.1
88.4
86.1

76.2
77.2
79.2
80.7

76.1
77.6
78.5
80.5

507.1
520.4
533.4
541.2

219.4
224.9
230.0
235.1

_

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

1982:
1
H
HI
I
V
1983:
1
II
Ill
IV....
1984:
1
II
Ill

,

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




249

TABLE B-15.—Gross and net private domestic investment, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Year or quarter

Less:
Capital
conGross sumption
allowprivate
ances
domeswith
tic
invest- capital
conment
sumption
adjustment

Equals: Net private domestic investment
Net fixed invest meat
Nonresidential
Total

Total

Total

Residential

Structures

Producers'
durable
equipment

1.7
-1.6
-1.0

1.4
-1.8

1.7
-1.0

1.7
-.9
.8

-.7
-.3
-1.7
-2.6
-2.0
-1.2

1.4
2.2
-.7
-.9

1.1
1.4

\\
2.7
2.3

1A
4.2
8.2
8.6
5.8

1.2
1.5
-.6
-1.6
-1.9
-1.8
3.7
6.8
9.7
8.5

~\A
-1.7
-1.6
3.4
6.4
9.1
7.9

Total

Nonfarm
structures

Farm
structures

Change
In
busiProness
ducers' inven*
durable tories
equipment
0.0
-.0
.0

1.7
-1.6
.4

.0
.0
-.0

2.2
4.5
1.8
-.6
-1.0
-1.0
6.4

1929
1933
1939

16.2
1.4
9.3

9.7
7.4
8.7

6.5
-6.0
.6

4.8
=4.5

3.1
-3.5
-.6

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

2.0
-2.5
-3.5
-1.7
1.3
6.6
10.2
11.3
8.1

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

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
80.0

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

401.9
484.2
414.9
471.6
637.3

293.2
330.3
358.8
377.1
402.9

108.7
153.9
56.0
94.5
234.4

118.5
127.9
82.1
108.0
177.6

77.0
90.6
61.3
49.8
107.2

36.2
50.9
49.9
35.4
52.9

40.9
39.7
11.4
14.3
54.3

41.5
37.3
20.9
58.2
70.4

41.2
37.7
21.3
59.1
70.8

436.2
431.2
415.9
376.2

350.4
356.1
361.4
367.5

85.8
75.1
54.5
8.7

102.8
86.0
69.8
69.8

-17.0
-10.9
= 15.3
-61.1

405.0
449.6
491.9
540.0

368.2
371.2
382.8
386.4

36.8
78.4
109.1
153.6

79.7
97.8
113.4
140.9

-42.9
-19.4
-4.3
12.7

623.8
627.0
662.8
635.5

391.8
400.0
406.9
412.8

232.0
227.0
255.9
222.7

158.2
176.4
184.1
191.6

73.8
50.6
71.8
31.1

1980
1981
1982
1983
1984 "

"

1982:
I
II..
Il
l
IV
1983:

II'ZZ
Ill
IV

-0.1

-il
-.1
.1
.2

47
-3.1

.2
.1

6.8
10.3
3.1
.4
-1.5
6.0
4,7
1.3
-1.5
5.7

.X
.1
.1
.1
.1
.1
-.0

!o
.0
.0
-.0
.0
.0
~.i
-.0
-.2
-.2
~A
.2
-1

.1

-.2
-.9
-~L3
-1.1

.1
.1
.1
.1
.2
.2
.3
.4

!e
i
.5
'.S
.6
.7

3.0
2.3
6.3
6.0
5.6
9.9
14.1
10.3
7.9
9,8
3.2
7.7
10.2
18.5
14.1
-6.9
11.8
23.0
26.5
14.3

-9.8
26.0
-26.1
'.5 -13.5
56.8
.7
.6
.5

1984:

vi"ZZ'ZZ

III
IV P

Source: Department of Commerce, Bureau of Economic Analysis.




250

TABLE B-16.—Gross and net private domestic investment in 1972 dollars, 1929-84
[Billions of 1972 dollars; quarterly data at seasonally adjusted annual rates]
Capital
conGross sumption
allowprivate
ances
domeswith
tic
capital
investconment
sumption
adjustment

Year or quarter

Equals: Net private domestic investment
Net fixed investment
Nonresidential
Total

Total

Total

Structures

Residential

Producers'
durable
equipment

Total

Nonfarm
structures

Farm
structures

Change
in
busi. Proness
ducers' invendurable tories
equipment

1929
1933
1939

55.8
8.4
33.6

33.6
33.0
32.1

22.3
-24.6
1.5

17.7
-19.8

11.7
-14.7
-3.1

7.8
-8.5
-4.0

3.8
-6.2
.9

6.0
-5.1
3.0

6.2
-4.6
3.0

-0.2
-.5
.0

0.0
.0
.0

4.6
-4.9
1.6

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

44.5
55.«
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

6.0
10.6
-9.0
-14.7
-10.1
-1.0
24.8
34.1
38.1
29.1

1.6
5.7
-7.3
-10.2
-5.1
3.6
16.6
21.5
21.6
14.8

-2.6
-.7
-5.8
-8.2
-6.6
-3.6
6.8
5.0
5.8
5.0

4.2
6.3
-1.5
-2.0
1.5
7.2
9.8
16.5
15.8
9.7

4.3
5.0
-1.8
-4.5
-5.0
-4.6
8.2
12.6
16.5
14.4

4.1
4.7
-1.6
-4.1
-4.6
-4.1
7.7
11.9
15.6
13.5

.2
.2

.1

6.2
12.0
5.2

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

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

10.9
10.6
8.2
9.0
5.6
8.6
8.3
8.1
2.0
5.2

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

104.7
103.9
117.6
125.1
133.0
151.9
163.0
154.9
161.6
171.4

63.3
-65JO
66.9
69.0
71.6
74.8
78.7
82.8
87.1
91.6

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

1L8
11.9
12.8
12.4
14.3
19.8
21.7
19.3
19.2
20.5

5.8
4.2
7.3
9.1
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

158.5
173.9
195.0
217.5
195.5
154.8
184.5
214.2
236.7
236.3

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
S.S
9.3
9.5
13.0
16.5

19.1
16.1
20.4
30.9
28.5
14.2
16.3
26.8
36.2
38.1

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

A
.5
.6

208.5
230.9
194.3
221.0
289.7

149.8
156.3
161.9
168.1
175.1

58.7
74.5
32.4
52.9
114.6

63.1
63.2
42.9
56.5
90.4

44.3
47.7
34.6
33.0
62.9

15.3
18.7
17.6
12.4
19.1

29.1
29.1
16.9
20.5
43.8

18.7
15.5
8.3
23.6
27.5

18.4
15.6
8.4
23.8
27.5

-.1
-.4
-.3

.4
.3
.2

-A

A

in
IV

204.7
200.4
194.3
177.8

159.7
161.0
162.3
164.5

45.0
39.4
32.0
13.3

51.7
43.4
38.4
37.9

-6.7
-4.0
-6.4
-24.6

1983:
|
II
Ill
IV

191.3
212.6
230.6
249.5

165.0
166.7
170.1
170.6

26.3
45.9
60.5
78.9

42.8
52.0
59.6
71.7

-16.5
-6.1
.9
7.2

1984:
I
||
III
IV P

285.5
283.9
300.2
289.1

172.2
174.1
176.0
178.1

U3.3
109.8
124.2
111.0

81.7
89.5
93.6
96.8

31.6
20.3
30.6
14.2

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 p
1982:

IIZZZZZZ

Source: Department of Commerce, Bureau of Economic Analysts.




251

~'.3
-.4
~*4
.6
.8

—.2
~'.2
-.2
-.1

!o

!o

~!o
.1

\z
.1
.2

.1
.1
.1
.1
.1
.1

1
.2
1
1
A

'.6
.4
.4
.5
.5

-.1

-2.3
-3.6
12.2
-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
-4.4
11.3
-10.4
-3.6
24.2

TABLE B-17 .—Inventories and final sales oj business, 1946-84
[Billions of dollars, except as noted; seasonally adjusted]
Inventories'

Inventory—final
saies raiio
MA|A*

fYonfarm
Quarter
Total

Farm
Total

Manufacturing

Wholesale
trade

MH4JA

Final
sales 2
Retail
trade

Other

Total

Nonfarm 3

Fourth quarter:
1948
1949

72.0
82.6
87.2
78.7

22.7
25.1
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

3.0
3.1
3.2
3.C

1950
1951
1952
1953
1954

98.0
110.5
109.2
110.1
107.6

26.1
28.3
26.0
24.6
23.8

71.9
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

3.3
3.3
3.1
3.1
3.C

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
8.0

29.7
31.4
32.7
33.7
35.6

3.86
3.95
3.90
3.77
3.71

3.1
3.2
3.1
3.C
3.C

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

110.4
112.1
117.3
122.7
129.7

56.6
57.7
60.9
62.9
66.4

20.4
20.9
21.5
23.1
24.4

25.3
24.9
26.3
27.6
29.0

8.1
8.7
8.6
9.2
9.9

36.9
38.8
41.1
43.7
46.2

3.69
3.55
3.52
3.44
3.38

2.9
2.8
2.8
2i
2i

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
81.7
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

2.7
2.9
2.9
2.8
2.9

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
224.1
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

2.9
2.S
2.8
3.C
3.6

1975
1976
1977
1978
1979

439.4
473.6
519.5
602.3
705.0

64.5
60.6
59.9
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

3.3
3.3
3.3
3.3
3.5

1980
1981
1982
1983
1984"

775.4
826.6
806.7
818.4
876.5

86.3
83.7
80.2
80.6
83.8

689.0
742.8
726.5
737.8
792.7

341.4
363.3
343.4
339.5
364.0

155.9
164.1
161.3
163.6
177.4

128.0
139.5
140.1
151.0
164.4

63.8
75.9
81.7
83.6
86.9

194.6
211.9
223.2
241.2
263.9

3.98
3.90
3.61
3.39
3.32

3.5
3.5
3.2
3.C
3.C

821.0
824.7
823.4
806.7

87.5
89.0
85.2
80.2

733.5
735.7
738.3
726.5

357.7
353.2
350.7
343.4

160.6
163.4
162.9
161.3

137.7
138.5
142.0
140.1

77.6
80.6
82.7
81.7

214.6
216.2
217.7
223.2

3.83
3.82
3.78
3.61

3.4
3.4

799.8
800.1
809.3
818.4

82.1
78.0
76.5
80.6

717.7
722.1
732.8
737,8

335.2
336.3
339.3
339.5

157.8
157.6
161.5
163.6

141.9
144.6
147.2
151.0

82.8
83.6
84.8
83.6

226.3
231.4
235.9
241.2

3.53
3.46
3.43
3.39

3.1
3.;
3.1
3.0

845.2
856.4
870.7
876.5

85.3
85.0
84.2
83.8

759.9
771.4
786.5
792.7

348.3
356.6
364.4
364.0

167.6
171.0
175.6
177.4

159.2
159.7
160.8
164.4

84.8
84.1
85.7
86.9

245.3
254.7
256.4
263.9

3.45
3.36
3.40
3.32

3.1
3.0
3.0
3.0

1946

1947

1982:
|
II
III
IV

"

3.3

3.2

1983:

liizzuzi
in
IV
1984:

liZZZI
in
IV

P

1
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 Analysts.




252

TABLE B-18.—Inventories and final sales of business in 1972 dollars, 1947-84
[Billions of 1972 dollars, except as noted; seasonally adjusted]
Inventory—final
sales ratio

Inventories'
Nonfarm

Quarter
Total

Farm
Total

Manu- Wholesale
facturing trade

Final
safes2
Retail
trade

Other

Total

Nonfarm 3

Fourth quarter:
1947
1948
1949

116.1
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

8.7
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
141.4
145.7
147.2
145.0

27.5
29.1
30.4
30.2
31.1

100.2
112.3
115.4
117.1
114.0

49.3
60.0
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
160.1
158.3
165.3

31.5
30.7
31.4
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

1960
1961
1962
1963...
1964

168.8
171.8
179.7
187.2
194.3

32.8
33.2
34.5
35.7
35.1

136.1
138.6
145.2
151.5
159.2

69.9
71.7
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
11.4
11.4
12.0
12.8

50.7
53.1
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

206.1
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
104.1
108.4
112.8

31.6
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

2.57
2.77
2.83
2.81
2.92

1970
1971
1972
1973
1974

258.9
267.0
277.2
294.4
306.0

37.7
39.2
39.8
42.1
41.8

221.2
227.8
237.4
252.3
264.2

112.9
111.8
114.4
121.8
130.9

44.0
45.9
47.9
50.4
54.1

46.1
51.2
54.6
58.8
58.3

18.2
19.0
20.5
21.4
20.9

75.2
78.9
84.7
87.2
85.0

3.44
3.38
3.27
3.38
3.60

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
41.1
40.8
40.8
43.2

256.3
265.9
279.5
295.5
300.4

127.1
130.9
134.1
139.8
145.0

52.2
55.5
59.7
63.5
64.7

55.8
58.8
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
1983
1984

339.2
350.5
340.1
336.5
360.6

40.9
44.3
43.1
38.9
42.8

298.4
306.2
297.0
297.6
317.8

145.9
148.1
139.4
135.9
144.8

66.2
67.0
65.9
65.4
71.1

63.2
65.7
64.5
67.9
73.2

23.0
25.5
27.1
28.3
28.8

104.9
105.3
106.5
111.5
118.3

3.23
3.33
3.19
3.02
3.05

2.84
2.91
2.79
2.67
2.69

348.8
347.8
346.2
340.1

44.8
44.6
44.1
43.1

304.0
303.2
302.2
297.0

146.7
144.7
142.8
139.4

66.3
67.1
66.7
65.9

64.9
64.5
65.6
64.5

26.1
26.9
27.1
27.1

105.3
104.7
104.8
106.5

3.31
3.32
3.30
3.19

2.89
2.90
2.88
2.79

336.0
334.4
334.6
336.5

41.9
40.5
38.8
38.9

294.0
293.9
295.8
297.6

136.5
136.2
135.9
135.9

64.5
63.8
64.6
65.4

65.2
65.8
66.5
67.9

27.8
28.1
28.8
28.3

106:8
108.7
110.1
111.5

3.15
3.08
3.04
3.02

2.75
2.70
2.69
2.67

344.3
349.4
357.1
360.6

40.2
40.6
41.7
42.8

304.1
308.8
315.4
317.8

138.2
141.6
144.9
144.8

66.6
67.9
70.3
71.1

70.7
71.1
71.8
73.2

28.6
28.1
28.4
28.8

112.7
116.2
115.7
118.3

3.06
3.01
3.09
3.05

2.70
2.66
2.73
2.69

P.

1982:
I
II
Ill
IV
1983:

tiZZZ"""
Ill

IV
1984:
I

\\ZZ"ZZ'Z
III

.

1
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 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.




253

TABLE B-19.—Relation of gross national product, net national product, and national income, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

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

Gross
national
product

less:

Less:
Capital
consumption
allowances
with
capital
consumption
adjustment

Equals:
Net
national
product

Indirect
business
tax and
nontax
liability

Business
transfer
payments

Statistical
discrepancy

Plus:
Subsidies
less
current
surplus
of
government
enterprises

1.1
.7
1.4

-0.2

-.0
.4

84.8
39.9
71.4

1.1
.6
-.8

.4
.1
.1
.1
.6
.7
.9
-.2
-.1
.3

79.7
102.7
135.9
169.3
182.1
180.7
178.6
194.9
219.9
213.6

.1

237.6
274.1
287.9
302.1
301.1
330.5
349.4
365.2
366.9
400.8

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

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

.8

.6

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

.8
.9
1.0
1.2
1.1
1.2
1.4
1.5
1.6

1.3
3.2
1.7
2.3
2.0
1.3
.2

=.3
-.5
-.3
-.0
,7
.7
1.1

1.8

-1.3

.1

454
48.0
51,6
54.6
58.8
62.6
65.3
70.2
78.9
86.6

2.0

-2.4

.4

2.0
2.1
2.4
2.7
2.8
3.0
3.1
3.4
3.9

-.1
2.1
1.7
-1.2

1.7
1.8
1.1
1,7
1.6
2.5
1.6
1,4
1.9

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

417
43.5
44.9

.5

.6

Equals:
National
income

-1.8

2.7
4.1
,5
1.5

-1.6

-2.1
-1.2

= .1

415.7
428.8
462.0
488.5
524.9
572.4
628.1
662.2
722.5
779.3

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
80.0

460 2
477.0
5161
546.1
584 8
635.0
6953
733.7
8013
864.0

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

992.7
1077 6
1185 9
1326.4
1,434.2
1 549.2
1,718.0
1 918.3
2,163.9
2,417.8

88.1
96 5
1064
116.5
136.0
159.3
175.0
195.2
222.5
256.0

904,7
981.1
1079 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
1115
120.9
129.1
140.1
151.7
165.7
178.2
189.6

4.1
4.4
4.9

-1.5

4.1
3.3
.8

2,9
2.6
3.8
3.4

5.8
7.4
7.9
8.6
9.3
10.3

3.7
5.5
5.1
1.4
-2.6
-1.5

1.1
2.4
1.0
3.1
3.7
3.4

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

2,631.7
2,957.8
3,069.3
3 304.8
3,661.3

293.2
330.3
358.8
377.1
402.9

2,338.5
2,627.5
2,710.4
2,927.7
3,258.4

213.4
251.3
258.8
280.4
304.3

11.7
12.9
14.1
15.6
17.3

2.3
5.6
-8.2

5.5
6.1
8.8
15.6
14.4

2,116.6
2,363.8
2,446.8
2,646.7
2,959.4

3,026.0
3,061.2
3,080.1
3,109.6

350.4
356.1
361.4
367.5

2,675.7
2,705.1
2,718.8
2,742.2

254.7
256.1
260.1
264.2

13.6
13.9
14.3
14.7

-8.3
-3.1
-.9
10.5

6.6
5.7
7.0
15.9

2,422.3
2,443.9
2,452.4
2,468.6

||
Ill
IV

3173 8
3 267 0
3,346.6
3,431.7

368 2
3712
382.8
386.4

2 805 6
2395 8
2,963.9
3,045.4

266 9
279 9
284,7
290.1

15 0
15 4
15.8
16.2

7.5

-4.8
=4.8

10.8
12.7
16.2
22.6

2,527.0
2,609.0
2,684.4
2,766.5

1984:
|
II
M
l
IV P

3,553.3
3,644.7
3 694.6
3,752.5

391.8
400.0
406.9
412.8

3,161.5
3,244.7
3,287.7
3,339.8

295.5
301.3
306.6
313.7

16.7
17.1
17.5
18.0

26.4
9.6
8.4
13.3

2,873.5
2,944.8
2,984.9

,

1980
1981
1982
1983
1984 *

721

5.5

1.4
-.3
-2.1
-3.9

.5

1982:

II
III

IV
1983:

Source: Department of Commerce, Bureau of Economic Analysis.




254

4.1

2.2
-9.0
-13,0

TABLE B-20.—Relation of national income and personal income, 1929-84
[Billions of doffars; quarterly data at seasonally adjusted annual rates]
PIUS:

Less:

Year or quarter

National
income

Corporate
profits
with
inventory
valuation
and
capital
consumption
adjustments

Net
interest

Equals:

GovernWage
ment
Contribu- accruals
transfer Personal Personal
tions for
less
payments interest dividend
social
disburseincome income
to
insurance
ments
persons

Business
transfer
payments

0.6

1929
1933 ..
1939

84.8
39 9
71.4

9.0
-17
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

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
22
1.8
23

2.3
2.8
3.5
45
5.2
61
6.1
58

.0
.0
.0
2
—2
.0
-.0
.0

4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3

5.4

.0

5.3
5.3
5.2
5.1
5.2
5.9
6.6
7.6

8.1

7.0

'&
.7

2.7

5.9

-.0

2.7
2.6
2.7
2.5
3.1
5.6
10.8
112
10.6
11.7

8.7

7.2

.8

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

237 6
274.1
287 9
302.1
3011
330.5
3494
365 2
366.9
400.8

33 9
38.7
361
36.3
35 2
45.5
43 7
43 3
38.5
49.6

30
3.5
40
4.4
53
5.9
66

71
8.5
90
9.1
101
11.5
12 9
14 9
15.2
18.0

o

14 4
11.6
121
12.9
151
16.2
17.3

88
8.5
8.5
8.8
9.1
10.3
11.1
11.5
11.3
12.2

8
.9
10
1.2
1.1
1.2
1.4

1960 ..
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

12.9
13.3
14.4
15.5
17.3
19.1
19.4
20.2
21.9
22.4

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

810.7
8715
963.6
1 086 2
1160 7
1,239.4
1 379.2
1550 5
1760 3
1,966.7

71.4
83 2
96.6
108 3
94 9
110.5
1381
167 3
192 4
194.8

84.5
87.2
102 5
1217
153.8

58.6
64 6
74.2
92 4
104 3
110.9
126.0
140 6
1618
186.9

1980
1981 ...
1982 .
1983 p
1984

2 116.6
2 363 8
2 446 8
2 646 7
2,959.4

175.4
189 9
1591
225 2
284.5

192.6
241.0
260 9
256 6
285.0

203.7
236.8
251.3
272 7
305.9

2,422.3
2 443.9
2 452 4
2,468.6

159.9
1617
163 3
151.6

263.6
268.5
257.7
253.8

248.3
250.4
252.3
254.1

-.1

2,527.0
2 609.0
2,684.4
2,766.5

179.1
216.7
245.0
260.0

254.2
254.2
259.2
258.9

265.3
270.2
274.3
281.0

.0
-1.3

2 873.5
2,944.8
2,984.9

277.4
291.1
282.8

266.8
282.8
293.5
297.1

298.9
304.2
308.1
312.6

1982:

It
III

IV

1983:
1

1
1

III
IV

1984:
I
II
Ill
IV *

851

2.4

79

9.6
10.3
114
13.0
14 7
16.4
18.3

211
21.9
24 3
27.3

210

30 0
38.8
43.4
47.9
55.0

24.4
27.6
30.0
34.8
41.4
46.5
51.2
60 2

761

287

Source: Department of Commerce, Bureau of Economic Analysis.




255

.0
.0

24.3
25.2

9.7
10.5
11.2
12.5
13.7
14.9
16.7
18.8
20.3
22.5

.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

.1
- 0
-.1

o

.0
.0

o

.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.6
.0

—.1

-.5
.0

.0
.0
,2
-.2
-.0
.1

-.0
-.4
.0

.0
.0
.0

.0
.2
.2

-.4
.2

201

.5
.4
.5

.5
.5

1,5

1.6
1.8
2.0

2.0
2.1
2.4
2.7
2.8
3.0
3.1
3.4
3.9
4.1
4.4

Personal
income

85.0
47.0
72.4
77.9
95.4
122.6
150.8
164.5
170.0
177.6
190.1
209.0
206.4
227.2
254.9
271.8
287.7
289.6
310.3
332.6
351.0
361.1
384.4
402.3
417.8
443.6
466.2
499.2
540.7
588.2
630.0
690.6
754.7

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

111
22.6
24.1
26.5
29.1
29.9
36.5
39.6
45.3
50.8

10.3

811.1
868.4
951.4
1,065.2
1,168.6
1,265.0
lt391.2
1,540.4
1,732.7
1,951.2

285.9
324.4
361.9
389.3
399.5

266.0
331.8
366.6
376.3
434.8

56.8
64.3
66.5
70.3
77.7

11.7
12.9
14.1
15.6
17.3

2,165.3
2,429.5
2,584.6
2,744.2
3,013.2

342.2
352.0
368.4
385.2

363.6
373.2
366.4
363,0

66.5
65.9
66.1
67.4

13.6
13.9
14.3
14.7

2,536.5
2,568.2
2,594.3
2,639.5

384.8
391.9
388.1
392.5

366.0
368.8
382.3
388.2

68.5
69.1
70.7
72.8

15.0
15.4
15.8
16.2

2,662.8
2,714.4
2,763.3
2,836.5

394.7
398.1
401.0
404.3

403.9
425.6
449.3
460.1

75.0
77.2
78.5
80.2

16.7
17.1
17.5
18.0

2,920.5
2,984.6
3,047.3
3,100.4

4.9
5.5

5.8
7.4
7.9
8.6
9.3

TABLE B-21.—National income by type of income, 1929-84

[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Proprietors' income with inventory valuation and capital consumption
adjustments

Compensation
of employees

National
income'

Year or
quarter

L929
1933.........
1939
1940
1941

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
302.1
Z..
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
871.5
9636
1,086.2
1,160.7
1239 4
U79.2
1,550.5
1,760.3
"'.'".
1,966.7

Total

Wages
and
salaries

Supplements
to
wages
and
salaries 2

Farm
Total

Total

3,9
7.6

8.6
11.1
14.1
17.1
18.4
19.4
21.8
20.8
23.3
23.6

8.6
11.7
14.4
17.1
18.3
19.3
23.3
21.8
23.1
22.2

25.0
27.2
28.2
28.6
28.7
31.4
32.7
34.2
34.5
36.7

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

.0
.0
-.0
= .0
-.1
= .2
-.2
-.2
-.4
-.5

15.6
16.4
20.4
34.6
29.0
28.0
22.8
23.3
31.3
37.8

-7
—7
-!8
-.9
-1.0
-1.2
-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

51.7
54.5
58.1
62.3
65.8
67.4
77.1
86.8
94.9
103.2

= .5
= .6

21.8
31.5
21.8
13.8
28.3

28.9
39.4
30.2
22.1
36.5

-7.1
-7.9
-8.4
-8.4
-8.2

95.6
937
89.2
107.9
126.4

100.3
94.0
87.6
100.4
114.6

-3.1
-1.3

-1.5
1.0
2.1
8.3
12.3

116.8
107.7
102.2
117.6

30.0
19.2
12.7
25.4

38.3
27.6
21.0
33.9

-8.3
-8.4
-8.3
-8.5

86.8
88.5
89.5
92.1

84.8
87.4
88.0
90.4

= .2
-.6
•= 5
!6

2.2
17
2.0
2.3

313.2
321.6
329.9
340.0

114.7
116.9
123.3
131.9

16.4
10.1
11.2
17.3

24.8
18.4
19.6
25.7

-8.4
-8.4
-8.4
-8.3

98.3
106.8
112.1
114.6

93.0
99.4
103.8
105.5

357.4
365.9
372.8
379.9

154.9
149.8
153.7
160.4

32.5
23.4
27.3
29.9

40.7
31.7
35.5
38.1

-=8.3
-8.3
-8.2
-8.2

122.5
126.3
126.4
130.6

112.4
115.0
113.8
117.1

50.5
29.0
46.0

0.6

21

15.0
5.9
11.8

6.1
2.5
4.4

6.3
2.6
4.5

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

13.0
17.5
24.2
29.1
30.4
31.8
36.7
35.9
40.9
36.4

4.4
6.4
10.1
12.0
12.0
12.4
14.9
15.1
17.6
12.8

4.5
6.5
10.3
12.2
12.2
12.7
15.2
15.7
18.2
13.5

154.8
181.0
195.7
209.6
208.4
224.9
243.5
256.5
258.2
279.6

147.0
171.3
185.3
198.5
196.8
211.7
228.3
239.3
240.5
258.9

7.8
9.7
10.4
11.0
11.6
13.2
15.2
17.2
17.7
20.6

38.7
43.2
43.4
41.8
41,2
42.9
43.9
45.3
47.7
47.6

13.7
16.1
15.1
13.1
12.5
11.5
11.2
11.1
13.2
10.9

14.4
16.9
16.0
13.9
13.3
12.2
12.1
12.1
14.1
11.9

294.9
303.6
325.1
342.9
368.0
396.5
439.3
471.4
519.9
572.9

271.9
279.5
298.0
313.4
336.1
362.0
398.4
427.0
469.6
515.7

23.0
24.1
27.1
29.5
31.8
34.5
40.9
44.4
50.3
57.2

47.2
48.6
49.9
50.5
52.5
56.9
60.5
61.2
64.0
67.0

11.7
12.1
12.3
12.0
10.8
13.1
14.1
12.6
12.7
14.6

12.6
12.9
13.0
12.8
11.5
13.8
14.9
13.5
13.7
15.7

612.0
652.2
718.0
801.3
877.5
931.4
1,036.3
1,152.1
1,301.1
1,458.1

548.7
581.5
635.2
702.6
765.2
806.4
889.9
983.2
1,106.5
1,237.4

63.2
70.7
82.8
98.7
112.3
125.0
146.4
168.9
194.6
220.7

66.2
69.4
76.9
93.8
88.7
90.0
94.1
103.9
118.5
132.1

14.3
15.0
18.7
32.8
26.5
24.6
19.1
19.1
26.3
31.9

1981
1982
1983
1984"

2,116.6
2,363.8
2,446.8
2,646.7
2,959.4

1,599.6
1,765.4
1,864.2
1,984.9
2,172.7

1,356.6
1.493.2
1,568.7
1,658.8
1,803.7

243.0
272.2
295.5
326.2
369.0

117.4
125.1
111.1
121.7
154.7

1982:
I
II
Ill
IV

2,422.3
2,443.9
2 452 4
2,468.6

1,834.2
1,857.7
1,876.3
1,888.7

1,546.2
1,564.2
1,578.0
1,586.5

288.0
293.5
298.3
302.2

2,527.0
2,609.0
2,684.4
2,766.5

1,921.3
1,962.4
2,000.7
2,055.4

1,608.1
1,640.8
1,670.8
1,715.4

2,873.5
2 944 8
21984.9

2,113.4
2,159.2
2,191.9
2,226.2

1,755.9
1,793.3
1,819.1
1,846.3

943
i944
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

Total

Inven- Capital
Propri- tory consumpetors' valuation
tion
income4 adjust- adjustment
ment

8.9
3.3
7.4

51.1
29.5
48.1

942

Nonfarm

Capital
Propri- consumpetors'
tion
income 3 adjust-0.2

~-l
~'.2
-'.3
—5
-!6
— .7

^9
-.9
-1.0
-.9
-.8
-.8

0.1
-.5

=0.1
.0
-.0

-.0
-.6
-=.4
-.2
=> 1
-!i
-1.7
-1.5
-.4
.5
-1.1
-.3
.2
-.2
= .0
= .2

.0
.0

-13

~!o

-l!o
-3.7
-1.2
-1.2
-1.2
-2.0
= 2.9

.2
.2

1.0
1,0
1.1
1.2
1.2
1.2
1,4
1.4
1.4
1.4
1.3
1.2
1.2
1.4
1.5
1.3
1.3
1.3
1.1
1.1

.6
-A
= .9
=-.8

!

1983:
|
|
III
IV
1984:
1
II
III
IV P

'

-1.3

-1.2

.1

5.6
8.3
9.5
9.7
11.2
11.8
12.5
13.6

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.




256

TABLE B-21.—National income by type of income, 1929-84—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Rental income of persons
with capital consumption
adjustment

Year or quarter
Total

Capital
Rental
conincome
sumpiion
of
adjustpersons
ment

Corporate profits with inventory valuation and capital consumption adjustments
Profits with inventory valuation adjustment and without
inventor
capital consumption adjustment
i l
Profits
Total

Profits after tax
Total

Profits

Profits
before
tax

tax
liability

Total

UndisDivitributed
dends
profits

Inventory
valuation
adjustment

Capital
consumption
adjustment

1929
1933
1939

4.9
2.2
2.6

5.7
2.3
3.1

-0.8

9.0
-1.7
5.3

10.5
-1.2
6.5

10.0
1.0
7.2

1.4
.5
1.4

8.6
.4
5.7

5.8
2.0
3.8

2.8
-1.6
2.0

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
-1.2
-1.4
-1.6
-1.8
-2.5
-2.8
-2.8

8.6
14.1
19.3
23.5
23.6
19.0
16.6
22.3
29.4
27.1

9.8
15.4
20.5
24.5
24.0
19.3
19.6
25.9
33.4
31.1

10.0
17.9
21.7
25.3
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
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2

3.2
5.8
6.0
6.7
6.7
4.5
10.2
14.2
16.2
11.8

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

7.1
7.7
8.8
10.0
11.0
11.3
11.6
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
-3.3
-3.4
-3.4
-3.3
-3.5
-3.6
-3.6
-3.8
-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
41.6
52.3

42.9
44.5
39.6
41.2
38.7
49.2
49.6
48.1
41.9
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
8.5
8.5
8.8
9.1
10.3
11.1
11.5
11.3
12.2

16.2
13.4
11.8
12.1
11.9
16.9
16.6
15.2
11.6
16.7

-5.0
-1.2
1.0
-1.0

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

-3.5
-3.4
-3.4
-3.2
-3.2
-3.3
-3.6
-3.9
-4.5
-5.6

47.6
48.6
56.6
62.1
69.2
80.0
85.1
82.4
89.1
85.1

49.7
50.0
55.1
59.7
66.0
76.0
80.9
78.1
84.9

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
31.1
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
-~L2
-2.1
-1.6
-3.7
-5.9

-2.0
-1.4
1.5
2.5
3.1
4.0
4.2
4.3
4.3
4.3

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

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
32.1
35.3
36.8
39.2
44.0
50.0
56.2

-6.1
-6.9
-8.0
-9.5
-11.8
-13.8
-15.6
-19.1
-23.4
-28.3

71.4
83.2
96.6
108.3
94.9
110.5
138.1
167.3
192.4
194.8

68.9
82.0
94.0
105.6
96.7
120.6
151.6
178.5
205.1
209.6

75.4
86.6
100.6
125.6
136.7
132.1
166.3
194.7
229.1
252.7

34.2
37.5
41.6
49.0
51.6
50.6
63.8
72.7
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
81.2
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

1980
1981
1982
1983
1984 ^

31.5
42.3
51.5
58.3
62.5

63.9
77.9
88.4
96.6
103.0

-32.4
-35.6
-36.9
-38.3
-40.5

175.4
189.9
159.1
225.2
284.5

191.7
197.6
156.0
192.0
228.6

234.6
221.2
165.5
203.2
234.3

84.8
81.1
60.7
75.8
88.4

149.8
140.0
104.8
127.4
145.8

58.6
66.5
69.2
72.9
80.5

91.2
73.5
35.6
54.5
65.3

-42.9
-23.6
=9.5
-11.2
-5.7

-16.3
-7.6
3.1
33.2
55.9

85.3
85.3
89.8
93.1

-37.6
-37.0
-36.9
-36.1

159.9
161.7
163.3
151.6

161.3
160.9
158.8
143.2

167.6
169.8
168.9
155.8

62.9
62.9
61.9
55.0

104.7
106.9
107.0
100.8

69.2
68.6
69.0
70.2

35.5
38.2
38.1
30.6

=6.3
-8.9
-10.1
-12.6

-1.4
.8
4.5

IV

47.8
48.3
52.9
57.0

1983:
I
II
Ill
IV

57.7
59.0
56.2
60.4

94.9
96.0
96.6
99.1

-37.2
-37.0
-40.3
-38.7

179.1
216.7
245.0
260,0

157.3
186.1
208.1
216.3

161.7
198.2
227.4
225.5

59.1
74.8
84.7
84.5

102.6
123.4
142.6
141.1

71.1
71.7
73.3
75.4

31.4
51.7
69.3
65.6

-4.3
= 12.1
-19.3
-9.2

21.7
30.6
36.9
43.6

1984:
I
II
Ill
IV.

61.0
62.0
63.0
63.8

99.9
102.5
104.2
105.3

-38.8
-40.6
-41.2
-41.5

277.4
291.1
282.8

229.8
238.7
224.5

243.3
246.0
224.8

92.7
95.8
83.1

150.6
150.2
141.7

77.7
79.9
81.3
83.0

72.9
70.2
60.3

-13.5
-7.3

47.6
52.3
58.3
65.5

1982:
I
If
Ill

3
4

With inventory valuation adjustment and without capital consumption adjustment.
Without inventory valuation and capital consumption adjustments.

Source: Department of Commerce, Bureau of Economic Analysis.




257

0.5
-2.1
= .7

-Ii5
-1.2
= .8

-A
= 5.3
-5.9
-2.2

1.9

-~U
-2.7
-1.5
-.3
-.3

-7.7

-1.4
= .6
-1.1
-1.2
-1.3
-1.2
-1.0
-.3
-.2
= 3.0
= 3.6
-4.0
-3.9
-4.0
-4.6
-4.5
-3.9
-3.2
-2.0
-3.2
-3.4
-3.2
= 2.7

8.4

TABLE B-22.—Sources of personal income, 1929-64
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Proprietor!>' income

Wage and salary disbursements'

Year or quarter

Personal
income

ufith mil
WIW irtvcinuiy

Commodityproducing
industries
Total
Total

Govern*
merit
Other
Distrib- Service and
labor
utive
indus- govern- income1
tnrliic
tnausment
tries
Manuenterfacturing tries
prises

valuation and
cap tal
consunlption
adjustr
Farm

Nonfarm

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

8.9
3.3
7.4

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

8.6
11,1
14.1
17.1
18.4
19.4
21.8
20.8
23 3

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
57.7
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

25.0
27.2
28,2
28,6
28.7
31.4
32.7
34.2
34.5
36.7

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

35.5
36.5
37.6
38.5
41.7
43.8
46.4
48.6
51.3
52.5

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

51.9
54.4
58.1
61.0
62.2
65.4
75.0
84.8
92.2
100.2

1980....
1981....
1982....
1983....
1984 »..

2.165.3
2,429.5
2,584.6
2,744.2
3,013.2

1,356.7
1,493.1
1,568.7
1,659.2
1,803.6

468.1
509.3
509.3
519.3
569.0

354.6
385.5
382.9
395.2
433.8

330.7
361.6
378.6
398.6
432.0

297.6
337.7
374.3
413.1
452.8

260.3
284.6
306.6
328.2
349.8

128.0
140.0
155.5
173.1
195.5

21.8
31.5
21.8
13.8
28.3

95.6
93.7
89.2
107.9
126.4

2,536.5
2,568.2
2,594.3
2,639.5

1,546.3
1,564.2
1.578,0
1,586.4

515.3
514.9
508.1
498.9

386.1
386.7
382.7
376.0

372.5
377.0
381.2
383.8

359.6
368.9
380.3
388.3

299.0
303.5
308.4
315.4

149.7
154.0
157.9
160.6

30.0
19.2
12.7
25.4

86.8
88.5
89.5
92.1

2,662.8
2,714.4
2,763.3
2,836.5

1,608.1
1.642.1
1.671.3
1,715.4

503.5
511.4
523.5
539.0

380.5
389.3
399.1
411.9

386.0
395.4
399.7
413.2

398.3
409.1
417.0
428.2

320.4
326.2
331.0
335.0

164,4
169.9
175.9
182.1

16.4
10.1
11.2
17.3

98.3
106.8
112.1
114.6

2,920.5
2,984.6
3,047.3
3,100.4

1,755.7
1,793.1
1,819.5
1,846.1

555.9
424.6
567.0
432.2
573.3 • 436.4
579.9
441.9

419.2
429.5
436.4
442.9

437.9
449.3
457.3
466.7

342.8
347.3
352.4
356.7

188.1
193.5
198.1
202.5

32.5
23.4
27.3
29.9

122.5
126.3
126.4
130.6

1982:
ILZ
in
IV
1983:
IlZ!!
Ill
IV
1984:

IlZ"

III
1
IV 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.




258

TABLE B-22.—Sources ofpersonal income, 1929-84—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Rental
income
of
persons Personal Personal
with
Year or quarter capital dividend interest
income income
consumption
adjustment

Transfer payments

Total

Old-age,
Govern- Aid to
survivors, Government
ment families
disability, unemwith
and
Veterans employ- depend- Other
ployment benefits
ees
health
insurretireent
insurance
ment children
ance
benefits (AFDC)
benefits benefits
0.6
.6
.5

0.1
.2
.3

0.8
1.4
1.7

.5
.5

!4
1.1
.8
.9
1.9

LO
3.0
7.0
7.0
5.9
5.3

.3
.3
.3
.4
.4
.5
.7
.7
.7
.9

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

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
154.2
182.0
204.5
221.6
237.5

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
16.1
15.9
25.2
26.1
15.9

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

266.0
331.8
366.6
376.3
434.8

32.8
33.8
35.8
37.4
40.4
44.7
52.6
59.8
66.7
80.1
94.4
104.7
119.5
141.2
178.3
194.3
207.9
223.8
250.3
297.6
337.3
376.1
405.0
416.9

15.0
16.1
16.4
16.6
16.5

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
22.7
26.1
29.0
32.7
36.9
43.0
49.6
54.9
59.5
62.1

66.5
65.9
66.1
67.4

363.6
373.2
366.4
363.0

355.8
365.9
382.6
399.9

194.9
197.2
209.3
216.7

19.3
23.9
25.8
31.7

16.3
16.2
16.3
16.6

57.7
59.0
56.2
60.4

68.5
69.1
70.7
72.8

366.0
368.8
382.3
388.2

399.8
407.3
403.9
408.8

216.6
219.8
222.4
227.7

29.9
31.7
22.8
20.2

61.0
62.0
63.0
63.8

75.0
77.2
78.5
80.2

403.9
425.6
449.3
460.1

411.3
415.2
418.6
422.4

232.1
235.2
238.2
244.5

16.7
15.8
15.2
15.8

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

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

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

7.1
7.7
8.8
10.0
U.O
11.3
11.6
12.2
12.9
13.6

8.8
8.5
8.5
8.8
9.1
10.3
11.1
11.5
11.3
12.2

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 "..

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
31.5
42.3
51.5
58.3
62.5

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
56.8
64.3
66.5
70.3
77.7

1982:
I
II
Ill
IV

47.8
48.3
52.9
57.0

0.0

0.4

3.1
3.1
3.1
3.0
3.6
6.2
11.3
11.7
11.3
12.5

.0
.1
.1
.2

.5
.4
.4
.1

!3
.4
.5
.6

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

25.0
26.4
29.0
32.2
35.6
39.7
44.4
48.3
53.4
61.1
69.4
74.8
80.9
93.9
112.4
123.2
132.5
152.8
179.4
218.7

28.9

HI........
IV
1984:
|
II
Ill
IV P

0.1

2.5
2.9
3.3

1.2
1.8
2.2
2.3
2.0
2.1
2.2
2.2

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

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
12.4
13.0
13.3
14.2
14.7

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
56.9
60.7
61.7
66.8
70.1

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
88.7
104.5
111.4
119.6
132.5

52.2
55.2
55.9
56.5

13.3
13.3
13.3
13.5

59.7
60.0
62.1
64.8

110.0
110.9
111.9
112.5

16.8
16.6
16.6
16.5

57.3
59.1
60.4
61.3

14.1
14.3
14.3
14.3

65.1
65.9
67.4
68.8

116.4
118.5
120.4
123.2

16.4
16.6
16.7
16.4

62.4
63.1
63.9
59.2

14.9
14.9
14.6
14.6

68.9
69.6
70.0
72.0

129.6
131.8
133.4
135.1

1983:
[

Less:
Personal
contributions for
social
insurance

2
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.




259

TABLE B-23.—Disposition of personal income, 1929-84
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Percent of disposable
personal income

Less: Personal outlays

Year or quarter

Personal
income

Less:
Personal
tax and
nontax
payments

Equals:
Disposable
personal
income

Total

Personal
Interest
Personal paid by transfer
payconconsumsumption ers to ments
to
expendibusifortures
ness
eigners
(net)

1929
1933
1939

85.0
47.0
72.4

2.6
1.4
2.4

82.4
45.6
70.0

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

.7
1.0
1.4
1.7

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

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

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

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

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

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

115.8
116.7
141.0
150.7
170.2
168.9
196.8
226.4
258.7
301.0

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

2,165.3
2,429.5
2,584.6
2,744.2
3,013.2

336.5
387.7
404.1
404.2
435.1

1,828.9
2,041.7
2,180.5
2,340.1
2,578.1

1,718.7
1,904.3
2,044.5
2,222.0
2,421.2

2,536.5
2,568.2
2,594.3
2,639.5

404.4
411.4
398.5
402.0

2,132.0
2,156.8
2,195.8
2,237.5

2,662.8
2,714.4
2,763.3
2,836.5

401.4
411.6
395.8
407.9

2,920.5
2,984.6
3,047.3
3,100.4

418.3
430.3
440.9
451.0

1980
1981
1982
1983
1984 »

!

0.3
2

Personal outlays
Equals:
Personal
saving
Total

Personal Personal
consumpsaving
tion
expenditures

3.3
-.9
2.2

96.0
102.0
96.9

95.6

3.4
10.3
27.2
32.9
36.6
28.7
13.7
5.2
11.1
7.5

95.5
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

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

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

16.7
17.7
19.5
22.3
24.1
24.4
26.7
30.7
37.4
45.5

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

1,668.1
1,849.1
1,984.9
2,155.9
2,342.3

49.6
54.4
58.5
65.1
77.7

110.2
137.4
136.0
118.1
156.9

94.0
93.3
93.8
95.0
93.9

91.2
90.6
91.0
92.1
90.9

1,989.5
2,020.1
2,061.3
2,107.3

1,931.3
1,960.9
2,001.3
2,046.1

57.0
57.9
58.8
60.2

142.6
136.7
134.5
130.2

93.3
93.7
93.9
94.2

90.6
90.9
91.1
91.4

2,261.4
2,302.9
2,367.4
2,428.6

2,133.4
2,206.1
2,248.4
2,300.0

2,070.4
2,141.6
2,181.4
2,230.2

62.1
63.6
65.9
68.7

128.0
96.7
119.0
128.7

94.3
95.8
95.0
94.7

91.6
93.0
92.1
91.8

2,502.2
2,554.3
2,606.4
2,649.4

2,349.6
2,409.5
2,442.3
2,483.2

2,276.5
2,332.7
2,361.4
2,398.6

71.9
75.7
79.8
83.4

152.5
144.8
164.1
166.2

93.9
94.3
93.7
93.7

91.0
91.3
90.6
90.5

.9

2

!5

\l
.4
.5

!s

7
.7

!4
.5
!4
.4

!9

1982:

if!
Ill
IV
1983:
I
II
Ill
IV
1984:
I
||
III
IV >

Source: Department of Commerce, Bureau of Economic Analysis.




260

TABLE B-24.—Total and per capita disposable personal income and personal consumption expenditures in
current and 1972 dollars, 1929-84

[Quarterly data at seasonally adjusted annual rates, except as noted]
Disposable personal income
Year or quarter

Total (billions of
dollars)
Current
dollars

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
1984 P..
1982:
I
II
Ill
IV
1983:
I
II
Ill
IV
1984:
I
II
Ill
IV P...

1972
dollars

Personal consumption expenditures

Per capita
(dollars)
Current
dollars

1972
dollars

82.4
45.6
70.0
75.3
92.2
116.6
133.0
145.6
149.1
158.9
168.7
188.0
187.9
206.6
226.0
237.7
252.2
257.1
275.0
292.9
308.6
319.0
338.4
352.0
365.8
386.8
405.9
440.6
475.8
513.7
547.9
593.4
638.9
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
1,828.9
2,041.7
2,180.5
2,340.1
2,578.1

229.5
169.6
229.8
244.0
277.9
317.5
332.1
343.6
338.1
332.7
318.8
335.8
336.8
362.8
372.6
383.2
399.1
403.2
426.8
446.2
455.5
460.7
479.7
489.7
503.8
524.9
542.3
580.8
616.3
646.8
673.5
701.3
722.5
751.6
779.2
810.3
864.7
857.5
874.9
906.8
942.9
988.8
1,015.7

676
363
534
570
691
865
973
1,052
1,066
1,124
1,170
1,282
1,259
1,362
1,465
1,515
1,581
1,583
1,664
1,741
1,802
1,832
1,911
1,947
1,991
2,073
2,144
2,296
2,448
2,613
2,757
2,956
3,152
3,390
3,620
3,860
4,315
4,667
5,075
5,477
5,965
6,621
7,331

1,883
1,349
1,754
1,847
2,083
2,354
2,429
2,483
2,416
2,353
2,212
2,290
2,257
2,392
2,415
2,441
2,501
2,483
2,582
2,653
2,660
2,645
2,709
2,709
2,742
2,813
2,865
3,026
3,171
3,290
3,389
3,493
3,564
3,665
3,752
3,860
4,080
4,009
4,051
4,158
4,280
4,441
4,512

1,021.6
1,049.3
1,058.3
1,095.4
1,169.5

8,032
8.874
9,385
9,977
10,893

2,132.0
2,156.8
2,195.8
2,237.5

1,052.8
1,054.8
1,057.9
1,067.6

2,261.4
2,302.9
2,367.4
2,428.6
2,502.2
2,554.3
2,606.4
2,649.4

Total (billions of
dollars)
Current
dollars

1972
dollars

Per capita
(dollars)
Current
dollars

1972
dollars

Population
(thousands) 1

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

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

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
1,581
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

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

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

4,487
4,561
4,555
4,670
4,941

1,668.1
1,849.1
1,984.9
2,155.9
2,342.3

931.8
950.5
963.3
1,009.2
1,062.6

7,326
8.037
8,543
9,192
9,897

4,093
4,131
4,146
4,303
4,490

227,694
230,068
232,351
234,542
236,681

9,209
9,295
9,439
9,593

4,548
4,546
4,548
4,578

1,931.3
1,960.9
2,001.3
2,046.1

953.7
958.9
964.2
976.3

8,342
8,451
8,603
8.773

4,119
4,133
4,145
4,186

231,513
232,027
232,634
233.230

1,073.1
1,082.0
1,102.2
1,124.3

9,675
9,832
10,082
10,318

4,591
4,619
4,694
4,776

2,070.4
2,141.6
2,181.4
2,230.2

982.5
1,006.2
1,015.6
1,032.4

8,858
9,143
9,290
9,475

4,203
4,296
4,325
4,386

233,742
234,230
234,811
235,385

1,147.6
1,165.3
1,176.5
1,188.7

10,608
10,806
11,000
11,154

4,865
4,930
4,965
5,004

2,276.5
2,332.7
2,361.4
2,398.6

1,044.1
1,064.2
1,065.9
1,076.2

9,651
9,869
9,966
10,098

4,427
4,502
4,499
4,531

235,875
236,369
236,950
237,531

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).




261

TABLE B-25.—Gross saving and investment, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Gross investment

Gross saving
Gross private saving
Year or
quarter

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
1984 P.
1982:

\\zzr
in

IV
1983:
III....
IV....
1984:
I
III
IV P

15.9
.9
13.5
18.6
10.7
5.4
2.4
5.2
35.1
41.7
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
484.3
408.8
437.2
551.0

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
509.9
524.0
571.7

Capital
Government surplus or
deficit ( - ) , national income grants
received
and product accounts
by the
Gross
Personal
State
United
business
saving
and
States
saving >
Federal
Total
local
(net)«

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
137.4
136.0
118.1
156.9

11.6
3.1
8.8
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
372.6
388.0
453.6
518.4

3.3
-.9
2.2

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

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

=0.2
1
.6
1.3
1.8
2.5
2.7
2.6
1.9
1.0

-7

-63.8
-36.5
-17.8
.8
14.3
-30.7
-26.7
-115.3
-134.5
-124.4

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
-64.3
-148.2
-178.6
-176.4

-1.1
.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
37.6
32.9
44.1
52.0

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
-Z.Z

-U
-14.2
-6.0

9.9

-10.6
-19.4
-3.3
7.8
-4.7

-1.2
-.4
-.0
.1
-1.1
-1.3
-.9
-1.4
-2.4
-.4
' .1
-.4
1.0
-.0

0.9
7
.0
-2.0

.0
.0
.0
.0

1.1
1.2

1.1
.0
.0
.0

Total

17.0
1.6
10.3
147
19.2
9.8
3.7
5.2
9.3
35.6
43.2
48.3
36.2
52.0
60.1
527
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
149.7
147.4
165.7
189.9
236.3
231.5
224.4
263.0
310.4
372.3
421.2
408.2
490.0
408.3
437.7
542.8

Gross
private
domestic
investment

16.2
1.4
9.3
13.1
17.9
9.9
5.8
7.2

10.6
30.7
34.0
45.9
35.3
53.8
59.2
52,1
53.3
527
68.4
71.0
69.2
61.9
78.1
75.9
74,8
85.4
90.9
97.4
113.5
125.7
122.8
133.3
149.3
144.2
166.4
195.0
229.8
228.7
206.1
257.9
324.1
386.6
423.0
401.9
484.2
414.9
471.6
637.3

Statistical
Net
foreign discrepancy
investment 3

0.8

i!o
1.5
1.3

1.1
.7
1.4
1.1
.6
-.8

-2.0
-1.3
4.9
9.3
2.4
.9
-1.8
.9
.6
-1.3

.2
.4

Z.Z
4.8
.9
-1.2
2.8
3.8
3.4
4.4

6.8
5.4
3.0
2.6
.6
.4
3.2
-.7
=5.1
6.5
2.9
18.3
5.1
= 13.6
= 14.3

-1.8
6.3
5.8
=6.6
-33.9

-1.8
2.7
4.1
.5

1.5
-1.6
.6
1.3
3.2
1.7
2.3
2.0
1.3
-2.1
-1.2
-L3
=2.4

l!l
17
-L2
1.4
«-- 3
-2ll
-3,9
-1.5
4.1
3.3
.8
37
5.5
5.1
1.4
= 2.6
-1.5
2.3
5.6

-94,5

8!2

447.0
445.4
397.9
344.8

520.8
523.0
528.3
524.0

142.6
136.7
134.5
130.2

378.2
386.3
393.8
393.9

-73.8
-77.6
-130.4
-179.2

-106.3
-112.0
-1637
-210.6

32.5
34.4
33.3
31.5

.0
.0
.0
.0

2.5
436.2
431.2
11.1
415.9 - 1 8 . 9
376.2 - 2 0 . 9

= 8.3

442.2
397.0
355.3

393.4
414.7
455.2
485.7

545.1
538.1
588.6
615.0

128.0
96.7
119.0
128.7

417.1
441.4
469.7
486.4

-151.7
-123.4
-133.5
-129.3

-185.7
-167.3
-180.9
-180.5

34.1
43.9
47.4
51.2

.0
.0
.0
.0

400.9
418.7
450.3
480.9

405.0 - 4 . 1
449.6 =30.9
491.9 - 4 1 . 5
540.0 - 5 9 . 1

7.5
4.1
=4.8

543.9
551.0
556.4

651.3
660.2
689.4

152.5
144.8
164.1
166.2

498.8
515.3
525.3

-=107.4
-109.2
-133.0

=-161.3
-163.7
= 180.6

53.9
54.5
47.6

.0
.0
.0
.0

546.1
542.0
543.4
539.6

623.8
627.0
662.8
635.5

4387

-3.1
-.9
10.5

=4.8

-77.7
2.2
=85.0
-9,0
= 119.4 = 13.0
-95.8

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.
3
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.




262

TABLE B-26.—Saving by individuals, 1946-84l
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Net investment in 7 Less: Net inc rease in
debt

Increase in financial assei s

Year or
quarter

Total

Securities

Checkable
deposits
Total
and
currency

Time
and
savings
deposits

5.6
.1
9.1 - 2 . 9
9.9 - 2 . 0

6.3
3.4
2.2
2.6

1946
1947
1948
1949

24.6
20.1
24.3
20.9

18.8
13.2

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

30.6
34.7
31.3
32.5
28.2
34.1
37 2
36 5
34.1
38.0

13.7
19.1
23.2
22.8
22.2
28.0
30.2

1960
1961
1962.".".'"..'.
1963
1964
1965
1966
1967
1968
1959

36.7
35 9
42.0
46.7
56.8
65.0
72.4
76.9
80.0
71,4

32.1

286

31.6
37.4

354

Insurance
Money
and
market Govern- Corpo- Other
rate securi- pension
ment
fund
reshares securi- equi3
ties* serves 5
ties 2 ties

Other
financial
assets'

Owner- Conoccu- sumer
pied durahomes bles

Non- Mortcor- gage
porate debt Con- Other
busi- on sumer debt* »
ness non- credit
as- farm
sets 8 homes

-1.5
1.6
1.3
1.8
_ 1
-'.&
2.5
2.5
1.0
5.8
3.9
2.3
-2.5
10.1

2.4
4.7
7.8
8.1
9.1
8.6
9.4
— 4 119
3.8 13.9
1.0 11.0
1.0 12.0
9 18 3

40.1 - 1 . 2 26.1
46.6
4.2 26.2
55.7
5.3 26.1
58.8
7.6 27.8
57.5
2.4 19.0
69.7
9.9 35.3
75.0 11.1 31.1
65.0 —2.5
9.1

8.9 43.6

-0.9
-.8
.0
-.4

5.3
5.4
5.3
5.6

2.8
2.4
2.2
1.6

3.6 6.1
6.7 9.0
9.1 9.8
8.4 10.6

.7
1.8
1.6
1.0
.8
1.0
2.0
1.5
1.5
.5

-.7
.3
.0
.3
-.9
.8
1.2
1.0
1.1
-.3

6.9
6.3
7.7
7.9
7.8
8.5
9.5
9.5
10.4
11.9

1.9
1.9
2.0
2.1
2.1
2.1
2.5
2.8
3.5
3.3

11.8 14 8
11.7 11.3
11.3 8.6
12.3 10.1
12.7 7.1
16.7 12.2
15.6 8.5
13.2 77
12.3 3.6
16.3 7.3

2.2
1.4
1.3
.6
4.8
3.7
11.3
-1.2
5.2
25.9

2.6
4.6
1.6
1.0
2.2
1.2
1.8

1.1
1.1
1.0
.7

-.6
3
-2.1
-2.6
-.2
-2.1
-.7
-4.7
-7.5
28

2.4
.1
.1
1.4
.4
1.3
2.4
5.2
7.9
10.0

11.5
12.1
12.7
13.9
16.1
16.9
19.2
18.6
19.8
21.5

3.6
4.3
3.2
2.9
3.2
3.7
4.0
6.6
7.6
3.9

14.8
12.7
13.5
14.3
15.0
14.5
13.5
11.7
15.7
16.3

7.0
43
8.5
11.8
15.0
20.2
23.1
21.1
27.0
26,3

3.6
47
7.5
9.8
9.2
13.3
10.8
10.2
10.0
12.7

6.9
6.5
24
8.6
3.6
.3
6.0
3.7
1.8
5.2

23.9
27.4
34 3
38.8
47.0
54.9
60.1
71.8
86.7
95.0

5.2
5.6
11.2
10.3
11.1
13.8
19.2
18.9
30.2
36.0

13.6
20.7
28.0
31.0
25.2
24.2
39.2
54.4
67.0
68.2

20.0
26.6
34 6
40 4
28.4
26.5
40.0
49.6
56.7
52.5

11.5
17.5
206
26.6
10.6
5.0
.2
13.1
22.0
26.0

5.4
14.7
19 8
24 3
9.9
9.6
25.4
40.2
48.8
45.4

207
30.3
44 2
442
36.3
28.3
39.9
55.3
67.3
73.7

-8.0
-6.5
-30.0 -15.4
-7.8 -13.2
4.8 - 4 . 7

116.2
117.1
150.1
154.0

38.3
33.9
36.0
10.1

56.2
47.6
24.1
54.9

32.8 -.3 98.3 6.3
39.1 24.1 78.7 267
35.5 11.9 51.6 21.0
61.5
.3 103.2 51.3

757
81.5
72.5
112.1

128.5
135.0
159.8
177.2

23.2
38.6
41.5
40.7

23.7
24.1
21.6
27.0

34.5
32.8
32.9
41.8

44.8 1.7
60.2 - 1 . 9
65.1 - 6 . 9
75.9 8.5

-1.7
-5.4
-5.5
-12.2
7 -5.4
22.1 - 6 . 2
—9
25.6
17.7 - 4 7
8.3 - 5 . 0
17.0 - 4 . 0
24.8 - 5 . 2
45.8 - 1 8 . 3

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

68
67
4.5 6.6
2.3 6.2
1.0 7.6
1.9 87
2.9 12.2
1.2 11.2
27
89
2.6 9.5
5.0 12.8

48
1.6
5.3
4.2
1.5
7.2
39
29
.5
8.0

50
37
27
1.9
5.5
6.4
32
3j

11.7 4.4
12 2 25
14.1 6.3
16.2 8.9
17.5 9.8
17.0 10.6
13.8 6.5
12.5 57
16.9 11.5
18.6 10.8

4.9
65
7.2
10.7
10.8
14.3
12.2
17.6
19.2
19.4

14.1
26.2
414
465
38.0
40.6
61.4
90.8
111.5
121.2

6i0

7.2

1970
1971
1972
1973
19741
1975...
1976...
1977...
1978...
1979...

86.2
95.4
1088
1334
127.2
151.7
163.0
166.5
187.8
200.3

81.3
101.9
1311
1503
147!2
174.4
210.3
235.7
269.7
293.9

15.7
19.9
22.5
21.5

67.7
74 2
62.6
51.1
84.2
106.2
108.2
102.1
74.4

2.4
1.3
-.0
.2
6.9
34.4

1980...
1981...
1982...
1983

234.7
273.9
296.3
300.3

326.3
350.0
369.8
450.1

10.2 126.5
35.5 66.7
16.5 119.2
39.9 198.5

29.2
107.5
24.7
-44.1

20.4
34.7
44.3
91.7

2919
263.9
309.8
319.5

329 0
351.9
381.7
416.4

7.2 99.6
.8 92.3
20.7 101.6
37.2 183.2

38 2
40.5
88.1
-68.1

.4
55.9
18.9
42.1
8.2 - 2 3 . 3
71.0 - 2 7 . 3

338.9
295.0
250.9
316.5

427.8
450.5
410.5
511.7

67.7 251.9
65.4 158.4
9.8 199.4
16.6 184.1

-105.2
-62.7
-6.5
-1.8

84.2
145.8
66.7
69.9

-9.4
-1.6
3.5 - 2 9 . 9
-8.9
-13.2
29.2
30.5

147.5 - 7 . 4
157.7 12.3
151.2 11.9
159.6 23.6

36.5
49.9
63.7
69.7

26.5
45.3
48.7
84.6

86.5
127.2
106.1
128.8

318.3
383.3
326.6

412.9 38.5 166.5
571.9 38.6 248.5
460.2 - 4 . 3 257.4

44.9
15.4
20.5

97.2
152.5
135,3

-36.8
-44.4
-42.1

104.6 15.4
121.2 29.8
78.1 20.9

71.1 83.0 29.4 119.2 78.5
75.8 89.4 17.1 139.1 124.2
76.3 82.7 23.9 132.6 87.5

80.4
107.5
96.3

1982:
II
Ill
IV
1983:
ii

Ill
IV
1984:
1
II
Ill

..

12.3
13 7
14.1

7.3
6.9

-24.2
-16.2
-15.0
2.5

-17.4
10.3
-5.7

15.0
18.6
10.8
3.4

63.7 4.3
45.2 36.9
40.9 14.1
56.7 28.6
58.9
91.2
126.6
136.0

42 4
81.3
82.3
83.8

1
Saving by households, personal trust funds, nonprofit institutions, farms, and other noncorporate business.
2
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 noninsured pension reserves, and government insurance and pension reserves.
• 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 nonlife insurance claims for noncorporate business.
7
Purchases of physical assets less depreciation.
6
Includes data for corporate farms.
9
Other debt consists of security credit, policy loans, and noncorporate business debt.
Source: Board of Governors of the Federal Reserve System.




263

TABLE B-27.—Number and median income (in 1983 dollars) of families and persons, and poverty status,
by race, selected years, 1947-83
Persons
below
poverty level

Families »

Below poverty level

Median income of persons 14 years old
and over with income *

Females

Males
Year

Median

income

Female
householder

Total
Dumber
(millions)

Rate

Number
(millions)

Number
(millions)

Rate

All
persons

Yearround
full-time
workers

All
persons

Yearround
fulltime
workers

ALL RACES

$9,945
10,636

$13,519
13,736

1947

1950

$4,535
3,944

16,438
18,907
19,100
19,617
20,335
21,100

8.2
8.4
8.1
7.6
7.2

18.1
18.1
17.2
15.9
15.0

2.0
2.0
2.0
2.0
1.8

42.4
42.1
42.9
40.4
36.4

39.9
39.6
38.6
36.4
36.1

22.2
21.9
21.0
19.5
19.0

12,493
13,727
13,952
14,400
14,678
14,926

$15,781
18,282
18,860
19,190
19,752
20,184

21,968
23,123
23,672
24,720
25,636

6.7
5.8
5.7
5.0
5.0

13.9
11.8
11.4
10.0
9.7

1.9
1.7
1.8
1.8
1.8

38.4
33.1
33.3
32.3
32.7

33.2
28.5
27.8
25.4
24.1

17.3
14.7
14.2
12.8
12.1

15,861
16,289
16,570
17,125
17,472

20,834
21,352
21,750
22,377
23,557

4,802
5,030
5,374
5,782
5,794

12,051
12,360
12,527
13,082
13,798

25,317
25,301
26,473
27,017
26,066

5.3
5.3
5.1
4.8
4.9

10.1
10.0
9.3
8.8
8.8

2.0
2.1
2.2
2.2
2.3

32.5
33.9
32.7
32.2
32.1

25.4
25.6
24.5
23.0
23.4

12.6
12.5
U.9
11.1
11.2

17,114
16,981
17,742
18,061
17,076

23,564
23,692
25,096
25,710
24,571

5,740
5,924
6,190
6,268
6,227

13,958
14,025
14,415
14,546
14,494

56.2
56.7
57.2
57.8
59.6

25,396
26,179
26,320
26,939
26,885

5.5
5.3
5.3
5.3
5.5

9.7
9.4
9.3
9.1
9.2

2.4
2.5
2.6
2.7
2.6

32.5
33.0
31.7
31.4
30.4

25.9
25.0
24,7
24.5
26.1

12.3
11.8
11.6
11.4
11.7

16,388
16,497
16,643
16,699
16,168

23,942
24,255
24,776
24,529
23,991

6,266
6,259
6,479
6,212
5,974

14,289
14,547
14,491
14,723
14,455

60.3
61.0
61.4
62.0

25,418
24,525
24,187
24,580

6.2
6.9
7.5
7.6

10.3
11.2
12.2
12.3

3.0
3.3
3.4
3.6

32.7
34.6
36.3
36.0

29.3
31.8
34.4
35.3

13.0
14.0
15.0
15.2

15,150
14,759
14,399
14,631

23,182
22,667
22,352
22,508

5,949
5,979
6,076
6,319

14,014
13,646
14,103
14,479

46.5
47.6
48.5
48.9
49.4

26,263
26,253
27,504
28,237
27,088

3.7
3.8
3.4
3.2
3.4

1.1
1.2
1.1
1.2
1.3

25.0
26.5
24.3
24.5
24.8

17.5
17.8
16.2
15.1
15.7

9.9
9.9
9.0
8.4
8.6

17,989
17,803
18,609
18,951
17,888

24,239
24,359
26,001
26,455
25,050

5,814
6,022
6,230
6,329
6,297

14,204
14,187
14,699
14,792
14,617

49.9
50.1
50.5
50.9
52.2

26,412
27,192
27,522
28,050
28,054

3.8
3.6
3.5
3.5
3.6

1,4
1.4
1.4
1.4
1.4

25.9
25.2
24.0
23.5
22.3

17.8
16.7
16.4
16.3
17.2

9.7
9.1
8.9
8,7
9.0

17,215
17,391
17,432
17,490
16,890

24,496
24,978
25,283
24,984
24,685

6,331
6,311
6,578
6,287
6,030

14,322
14,659
14,583
14,862
14,581

52.7
53.3
53.4
53.9

26,484
25,762
25,394
25.757

4.2
4.7
5.1
5.2

1.6
1.8
1.8
1.9

25.7
27.4
27.9
28.3

19.7
21.6
23.5
24.0

10.2
11.1
12.0
12.1

16,115
15,661
15,222
15,401

23,843
23,199
22,947
23,114

5,981
6,046
6,159
6,421

14,150
13,874
14,292
14,677

16,111
15,843
16,347
16,297
16,175

1.5
1.5
1.5
1.5
1.5

16,511
16,657
17,559
17,830
17,946

5,293
5,277
5,820
5712
5,685

11,638
12,526
12,574
12,544
13,490

16,251
16,175
15,722
16,614
15,886

1.5
1.6
1.6
1.6
1.7
1.8
2.0
2.2
2.2

18,230
17,890
17,431
19,135
17,790

5,751
5,947
5,680
5,661
5,488

16,776
16,414
16,298
16,410

5,538
5,371
5,432
5,543

13,683
13,705
13,629
13,775
13,361
13,197
12,530
12,774
13,000

48.5
49.2
50.1
50.8
51.6

15,324
14,532
14.035
14,506

29.5
28.8
29.0
28.1
26.9
27.1
27.9
28.2
27.5
27.8

.9
1.0
1.0
1.0

54.3
53.5
53.3
52.7
52.2

33.5
32.5
33.3
31.4
30.3

1.0
1.1
1.2
1.2
1.2

50.1
52.2
51.0
50.6
49.4

31.3
31.1
31.3
30.6
31.0

10,625
10,514
11,207
11,463
11,083
10,292
10,471
10,345
10,478
10,631

28.9
30.8
33.0
32.4

1.3
1.4
1.5
1.5

49.4
52.9
56.2
53.8

32.5
34.2
35.6
35.7

9,684
9,312
9,122
8,967

1
The term "family" refers to a croup of two or more persons related by blood, marria
persons are considered members of the same family. Beginning 1979, based on househol
'Beginning 1979, data are for persons 15 years and over.
3
Based on revised methodology; comparable with succeeding years.
4
Based on 1980 census popuTation controls; comparable with succeeding years.

4,167 $10,177
4,243 11,087
4,261 11,128
4,420 11,387
4,465 11,571
4,654 11,918

, or adoption and residing together; all such
r concept and restricted to primary families.

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. 147.
Source: Department of Commerce, Bureau of the Census.




264

POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY
T A B L E B-28.—Population by age groups, 1929-84
[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

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
133,402
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

12,036i
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

I960....
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....
1970....
1971....
1972....
1973....
1974....

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

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....
1984....

227,738
230,019
232,309
234,496
236,634

16,459
16,949
17,377
17,826

38,823

17,139
16,696
16,223
15,649

21,620
21,977
21,980
21,925

63,486
65,569
67,737
69,826

44,499
44,498
44,511
44,561

25,713
26,256
26,826
27,384

38,072
37,653
37,323

Note.—Includes Armed Forces overseas beginning 1940. Includes Alaska and Hawaii beginning 1950.
Source: Department of Commerce, Bureau of the Census.




265

6,474

TABLE B-29.—Population and the labor force, 1929-84

[Monthly data seasonally adjusted, except as noted]

Civilian
noninstitutional
population1

Period

Resident
Armedl
Forces

Labor
force
including.
resident
Armed
Forces

Employment
including
resident Total
Armed
Forces

Unemployment rate

Civilian labor force
Employment

Total

Agricultural

Nonagricultural

Unemployment

All
workers*

labor force
participation
rate

Civilian
work- Total* Civilian4
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

55,230 45,750

9,610

36,140

9,480

17.2

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

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
39
3.9

57.2
55.8
56.8

3.9
3,8
5,9

58.3
58.8
58.9

1939

55,640
55,910
56,410
55,540
54,630

1940.,
1941...
1942
1943
1944..

99,840
99,900
98,640
94,640
93,220

1945..
1946
1947

94,090
103,070
106,018

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
2231
2,142

63,377
64,160
64,524
65,246
65,785

60,087
62,104
62,636
63,410
62,251

1955
1956
1957...
1958
1959

109,683
110,954
112,265
113,727
115,329

2,064
1,965
1,948
1,847
1,788

67,087
68,517
68,877
69,486
70,157

1960*.
1961,.
1962*

117,245
118,771
120,153
122,416
124,485

1,861
1,900
2,061
2,006
2,018

1967...
1968
1969
1970
1971
1972"
1973*
1974

126,513
128,058
129,874
132,028
134,335

1975
1976
1977
1978*
1979...

,.,.,

z:z

14.6
9.9
4.7
1.9
1.2

•••

55.7
56.0
57.2
58.7
58.6

Thousands of persons 16 years of age and over

38
»=:

1980...
1981
1982
1983...
1984...

.

7,890
7,629
7,658

49,148
50,714
49,993

2,311
2,276
3,637

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

59.2
59.2
59.0
58.9
58.8

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

59.3
60.0
59.6
59.5
59.3

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
5J
5.2

60.0
60.0
59.5
59.3
59.4

59.4
59.3
58.8
58.7
58.7

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

58.9
59.2
59.6
59.6
60.1

137,085
140,216
144,126
147,096
150,120

. .

59,350 57,038
60,621 58,343
61,286 57,651

2,118
1,973
1,813
lf774
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
4365
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

60.4
60.2
60.4
60.8
61.3

153,153
156,150
159,033
161,910
164,863

1,678
1,668
1,656
1,631
1,597

95,453
97,826
100,665
103,882
106,559

87,524
90/420
93,673
97,679
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

612
61.6
62.3
63.2
63.7

167,745
170,130
172,^71
174215

1,604
1,645
1,668
1,676
1,697

108,544
110,315
111,872
[13,226
115,241

100,907
102,042
101,194
102,510
106,702

106,940
108,670
110,204
111,550
113,544

99,303
100,397
99,526
100,834
105,005

3,364
3,368
3,401
3,383
3321

95,938
97,030
96,125
97,450
101,685

7,637
8,273
10,678
10,717
8,539

7.0
7.5
9.5
9,5
7.4

7.1
7.6
9.7
9.6
7.5

64.1
64.2
64.3
64.4
64.7

63.8
63.9
64.0
64.0
64.4

See next page for continuation of table.




266

TABLE B-29.—Population and the labor force, 1929-84—Continued
[Monthly data seasonally adjusted, except as noted]

Period

Civilian
noninstitutional
population1

Labor
force
Resi- includdent
ing
Armed
resiForces1 dent

Employment
including
resident Total
Armed
Armed Forces
Forces

Civilian labor force

Unemployment rate

Employment
Total

cultural

Nonagricultural

Unemployment

CivilAll
ian
work- work- Total = Civil• ian 4
ers 2
ers
Percent

Thousands of persons 16 years of age and over

1982:
Jan....
Feb....
Mar...

Jfc
June..
July...
Aug...
Sept..
Oct....
Nov
Dec
1983:
Jan
Feb
Mar...

fe

Labor force
participation
rate

171,335
171,489
171,667
171,844
172,026
172,190

1,656
1,664
1,671
1,668
1,665
1,664

110,777
111,165
111,320
111,519
112,179
111,654

101,393
101,449
101,409
101,252
101,753
101,099

109,121
109,501
109,649
109,851
110,514
109,990

99,737
99,785
99,738
99,584
100,088
99,435

3,393
3,371
3,392
3,367
3,436
3,327

96,344
96,414
96,346
96,217
96,652
96,108

9,384
9,716
9,911
10,267
10,426
10,555

8.5
8.7
8.9
9.2
9.3
9.5

8.6
8.9
9.0
9.3
9.4
9.6

64.0
64.2
64.2
64.3
64.6
64.2

63.7
63.9
63.9
63.9
64.2
63.9

172,364
172,511
172,690
172,881
173,058
173,199

1,674
1,689
1,670
1,668
1,660
1,665

111,996
112,211
112,373
112,395
112,657
112,618

101,145
101,325
101,157
100,870
100,758
100,727

110,322
110,522
110,703
110,727
110,997
110,953

99,471
99,636
99,487
99,202
99,098
99,062

3,405
3,408
3,365
3,477
3,483
3,412

96,066
96,228
96,122
95,725
95,615
95,650

10,851
10,886
11,216
11,525
11,899
11,891

9.7
9.7
10.0
10.3
10.6
10.6

9.8
9.8
10.1
10,4
10.7
10.7

64.4
64.4
64.4
64.4
64.5
64.4

64.0
64.1
64.1
64.0
64.1
64.1

173,354
173,505
173,656
173,794
173,953
174,125

1,667
1,664
1,664
1,671
1,669
1,668

112,413
112,364
112,397
112,577
112,561
113,385

100,900
100,808
100,967
101,261
101,303
102,112

110,746
110,700
110,733
110,906
110,892
111,717

99,233
99,144
99,303
99,590
99,634
100,444

3,441
3,388
3,406
3,381
3,352
3,457

95,792
95,756
95,897
96,209
96,282
96,987

11,513
11,556
11,430
11,316
11,258
11,273

10.2
10.3
10.2
10.1
10.0
9.9

10.4
10.4
10.3
10.2
10.2
10.1

64.2
64.1
64.1
64.2
64.1
64.5

63.9
63.8
63.8
63.8
63.7
64.2

June..
July...
Aug...
Sept
Oct....
Nov
Dec.
1984:
Jan
Feb,
Mar
Apr,,,
May...
June..

174,306
174,440
174,602
174,779
174,951
175,121

1,664
1,682
1,695
1,695
1,685
1,688

113,371
113,866
113,959
113,609
113,835
113,925

102,837
103,271
103,678
103,737
104,387
104,717

111,707
112,184
112,264
111,914
112,150
112,237

101,173
101,589
101,983
102,042
102,702
103,029

3,482
3,488
3,308
3,284
3,249
3,329

97,691
98,101
98,675
98,758
99,453
99,700

10,534
10,595
10,281
9,872
9,448
9,208

9.3
9.3
9.0
8.7
8.3
8.1

9.4
9.4
9.2
8.8
8.4
8.2

64.4
64.7
64.6
64.4
64.4
64.4

64.1
64.3
64.3
64.0
64.1
64.1

175,533
175,679
175,824
175,969
176,123
176,284

1,686
1,684
1,686
1,693
1,690
1,690

114,006
114,408
114,592
114,895
115,412
115,309

104,980
105,572
105,809
106,095
106,852
107,081

112,320
112,724
112,906
113,202
113,722
113,619

103,294
103,888
104,123
104,402
105,162
105,391

3,294
3,364
3,305
3,379
3,367
3,368

100,000
100,524
100,818
101,023
101,795
102,023

9,026
8,836
8,783
8,800
8,560
8,228

7.9
7.7
7.7
7.7
7.4
7.1

8.0
7.8
7.8
7.8
7.5
7.2

64.3
64.5
64.6
64.7
64.9
64.8

64.0
64.2
64.2
64.3
64.6
64.5

July...
Aug...
Sept..
Oct....
Nov...
Dec...

176,440
176,583
176,763
176,956
177.135
177,306

1,698
1,712
1,720
1,705
1,699
1,698

115,566
115,341
115,484
115,721
115,773
116,162

107,075
106,860
107,114
107,354
107,631
107,971

113,868
113,629
113,764
114,016
114,074
114,464

105,377
105,148
105,394
105,649
105,932
106,273

3,333
3,264
3,319
3,169
3.334
3,385

102,044
101,884
102,075
102,480
102,598
102,888

8,491
8,481
8,370
8,367
8,142
8,191

7.3
7.4
7.2
7.2
7.0
7.1

7.5
7.5
7.4
7.3
7.1
7.2

64.9
64.7
64.7
64.8
64.7
64.9

64.5
64.3
64.4
64.4
64.4
64.6

1
2
3
4
6

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.
Civilian labor force as percent of civilian noninstitutional population.
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.
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.




267

TABLE B-30.—Civilian employment and unemployment by sex and age, 1947-84
[Thousands of persons 16 years of age and over; monthly data seasonally adjusted]
Unemployment

Civilian employment

Year or
month

Total

Total

16-19
years

20
years
and
over

Total

Total

Total

16-19
years

20
years
and
over

Total

20
16-19 years
years and
over

1,692
1,559
2,572

270
256
353

1,422
1,305
2,219

619
717
1,065

144
153
223

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

19,551
20,419
20,714
20,613
21,164

1,547
1,654
1,663
1,570
1,640

18,002
18,767
19,052
19,043
19,524

2,852
2750
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

854
195
689
145
559
140
510
123
997
191
176
823
209
832
197
821
262 1,242
256 1,063

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

2,918
3,253
3,186
3,255
&30

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
11429

395 1,056
405
921
391 1,078
412
985
413 1,015

48,990
49,390
50,896
52,349
53,024
51,857
53,138
54,728
56,479
57,607
57,186
57,397
56,271
56,787
59,091

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
3,322

45,581
45,912
47,130
48,310
48,922
48,018
49,190
50,555
52,143
53,308
53,101
53,582
52,891
53,487
55,769

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
45,915

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
3,122

26,952 4,093
27,246 5,016
28,276 4,882
29,484 4,365
30,424 5,156
30,726 7,929
32,226 7,406
33,775 6,991
35,836 6,202
37,434 6,137
38,492 7,637
39,590 8,273
40,086 10,678
41,004 10,717
42,793 8,539

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
4,744

599
693
711
653
757
966
939
874
813
811
913
962
1,090
1,003
812

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
3,932

1,855
2,227
2,222
2,089
2,441
3,486
3,369
3,324
3,061
3,018
3,370
3,696
4,499
4,457
3,794

506
568
598
583
665
802
780
789
769
743
755
800
886
825
687

1,349
1,658
1,625
1,507
1,777
2,684
2,588
2,535
2,292
2,276
2,615
2,895
3,613
3,632
3,107

99,233 55,846
99,144 55,754
99,303 55,876
56,033
56,159
[00,444 56,710
101,173 57,105
101,589 57,156
.01,983 57,299
.02,042 57,434
.02,702 57,880
.03,029 58,071

3,334
3,282
3,210
3.222
3,231
3,306
3,317
3,321
3,322
3,280
3,379
3,356

52,512
52,472
52,666
52,811
52,928
53,404
53,788
53,835
53,977
54,154
54,501
54,715

43,387
43,390
43,427

40,284
40,332
40,381
40,544
40,498
40,709
41,052
41,304
41,632
41,622
41,797
41,872

11,513
11,556
11,430
11,316
11,258
11,273
10,534
10,595
10,281
9,872
9,448
9,208

6,647
6,783
6,693
6,707
6,677
6,476
6,210
6,197
5,986
5,739
5,464
5,238

1,060
1,046

43)734
44,068
44,433
44,684
44,608
44,822
44,958

3,103
3,058
3,046
3,013
2,977
3,025
3,016
3,129
3,052
2,986
3,025
3,086

1068
1,024
1,068
970
938
872
856

5,587
5,737
5,620
5,669
5,657
5,408
5,186
5,129
5,016
4,801
4,592
4,382

4,866
4,773
4,737
4,609
4,581
4,797
4,324
4,398
4,295
4133
3,984
3,970

876
823
842
858
831
936
843
831
782
774
759
743

3,990
3,950
3,895
3,751
3,750
3,861
3,481
3,567
3,513
3,359
3,225
3,227

,03,294 58,301
58,573
58,720
58,741
59,033
59,213
59,136
59,203
59,388
59,461
59,603
59,702

3,289
3,340
3,368
3,354
3,370
3,352
3,290
3,268
3,313
3,279
3,334
3,330

55,012
55,233
55,352
55,387
55,663
55,861
55,846
55,935
56,075
56,182
56,269
56,372

44,993
45,315
45,403
45,661
46,129
46,178
46,241
45,945
46,006
46,188
46,329
46,571

3,153
3,137
3,069
3,137
3,126
3,192
3,240
3,067
3,100
3,097
3,077
3,060

41,840
42,178
42,334
42,524
43,003
42,986
43,001
42,878
42,906
43,091
43,252
43,511

9,026
8,836
8,783
8,800
8,560
8,228
8,491
8,481
8,370
8,367
8,142
8,191

5,123
4,968
4,889
4,911
4,726
4,590
4,725
4,591
4,630
4,540
4,502
4,562

850
829
841
824
817
783
841
755
813
809
777
803

4,273
4,139
4,048
4,087
3,909
3,807
3,884
3,836
3,817
3,731
3,725
3,759

3,903
3,868
3,894
3,889
3,834
3,638
3,766
3,890
3,740
3,827
3,640
3,629

712
733
746
728
707
666
636
676
696
654
613
677

3,191
3,135
3,148
3,161
3,127
2,972
3,130
3,214
3,044
3,173
3,027
2,952

1950
1951
1952
1953'..,
1954

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

1955
1956
1957
1958
1959

62,170
63,799
64,071
63,036
64,630

42,621
43,379
43,357
42,423
43,466

2,095
2,164
2115
2,012
2,198

40,526
41,216
41,239
40,411
41,267

I960 1 ...
1961
19621...
1963
1964

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

1965
1966
1967
1968
1969

71,088
72,895
74,372
75,920
77,902

46,340
46,919
47,479
48,114
48,818

78,678
79,367
82,153
85,064
86,794
85,846
88,752
92,017
96,048
98,824
99,303
100,397
99,526
100,834
105,005

Nov....
Dec....
1984:
Jan
Feb
Mar....
May...
June..
July...
Aug...
Sept..
Oct....
Nov...
Dec....

20
years
and
over

2,311
2,276
3,637

57,038 40,995
58,343 41,725
57,651 40,925

Sfc

16-19
years

Females

1,691 14,354
1,682 14,936
1,588 15,137

2,218 38,776 16,045
2,344 39,382 16,617
2,124 38,803 16,723

1947
1948
1949

1970
1971
1972»...
1973«...
1974
1975
1976
19771
1978 ...
1979
1980
1981
1982
1983
1984
1983:
Jan....
Mar....
Apr
May...,
June..,
July....
Aug....

Males

Females

Males

104,123
104,402
:05,162
105,391
05,377
.05,148
,05,394
105,649
105,932
.06,273

> See footnote 5, Table B-29.
Note.-See Note, Table B-29.
Source: Department of Labor, Bureau of Labor Statistics.




268

!:§

475
564
841

1,080
1,368
1,175
1,216
1,195

TABLE B-31-—Unemployment by duration and reason, 1947-84
[Monthly data seasonally adjusted1]
Duration of

Year or month

Total
unemPloy-

Less
than 5
weeks

5-14

15-26

Reason for unemployment
27
weeks
and

Average
(mean)
duration in
weeks

Median
duration in
weeks

Job
losers

Job
leavers

Reentrants

New
entrants

Thousands of persons 16
years of age and over

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

164
116
256

8.6
10.0

1950
1951
1952
1953
1954

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

1955
1956
1957
1958
1959

2,852
2,750
2,859
4,602
3,740

1,335
1,412
1,408
1,753
1,585

815
805
891
1,396
1,114

366
301
321
785
469

336
232
239
667
571

13.0
11.3
10.5
13.9
14.4

1960
1961
1962
1963
1964

3,852
4,714
3,911
4,070
3,786

1,719
1,806
1,663
1,751
1,697

1,176
1,376
1,134
1,231
1,117

503
728
534
535
491

454
804
585
553
482

12.8
15.6
14.7
14.0
13.3

1965
1966
1967
1968
1969

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

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

438
431
436

945
909
965

396
407
413

1970
1971
1972
1973
1974

4,093
5,016
4,882
4,365
5,156

2,139
2,245
2,242
2,224
2,604

1,290
1,585
1,472
1,314
1,597

428
668
601
483
574

235
519
566
343
381

11.3
12.0
10.0
9.8

4.9
6.3
6.2
5.2
5.2

1,811
2,323
2,108
1,694
2,242

550
590
641
683
768

1,228
1,472
1,456
1,340
1,463

504
630
677
649
681

1975
1976
1977
1978
1979

7,929
7,406
6,991
6,202
6,137

2,940
2,844
2,919
2,865
2,950

2,484
2,196
2,132
1,923
1,946

1,303
1,018
913
766
706

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

827
903
909
874

1,892
1,928
1,963
1,857
1,806

823
895
953
885
817

1980
1981
1982
1983
1984

7,637
8,273
10,678
10.717
8,539

3,295
3,449
3,883
3,570
3,350

2,470
2,539
3,311
2,937
2,451

1,052
1,122
1,708
1,652
1,104

1,203
1,348
1,028
648
535
820
1,162
1,776
2.559
1,634

11.9
13.7
15.6
20.0
18.2

6.5
6.9
8.7
10.1
7.9

3,947
4,267
6,268
6,258
4,421

891
923
840
830
823

1,927
2,102
2,384
2,412
2,184

872
981
1,185
1,216
1,110

11,513
11,556
11,430
11,316
11,258
11,273

3,654
3,737
3,525
3,566
3,601
3,681

3,307
3,167
3,149
3,129
3,016
2]952

1,982
1,935
1,879
1,676
1,754
1,590

2,635
2,711
2,743
2,702
2,730
2,910

19.0
19.2
19.3
19.3
20.3
20.8

11.0
9.9
10.5
10.8
11.5
11.3

6,821
6,864
6,858
6,772
6,809
6,581

826
843
909
826
814
806

2,562
2,522
2,460
2,488
2,406
2,457

1,206
1,194
1,171
1,236
1,234
1,412

10,534
10,595
10,281
9,872
9,448
9,208

3,475
3,588
3,751
3,465
3,315
3,393

2,803
3,021
2,783
2,743
2,632
2,499

1,776
1,569
1,415
1,370
1,339
1,276

2,592
2,520
2,480
2,287
2,184
2,075

21.3
20.2
20.4
20.3
20.1
19.6

10.2
9.6
9.4
9.5
9.4
8.9

6,186
6,143
5,919
5,491
5,232
5,039

740
794
851
869

2,442
2,458
2,330
2,330
2,258
2,205

1,232
1,205
1,238
1,116
1,175
1,170

9,026
8,836
8,783
8,800
8,560
8,228

3,298
3,359
3,378
3,407
3,275
3,229

2,529
2,482
2,514
2,485
2,440
2,303

1,194
1,172
1,122
1,102
1,173
1,012

2,007
1,830
1,772
1,740
1,660
1,618

19.9
19.0
18.9
18.7
18.5
18.1

8.9
8.4
8.4
8.1
8.3
7.5

4,829
4,739
4,622
4,531
4,373
4,271

810
786
777
792
812
809

2,199
2,171
2,208
2,301
2,184
1,989

1,185
1,102
1,200
1,197
1,170
1,134

8,491
8,481
8,370
8,367
8,142
8,191

3,409
3,513
3,313
3,395
3,352
3,282

2,449
2,406
2,533
2,406
2,324
2,516

1,088
1,116
1,106
1,092
990
972

1,584
1,505
1,499
1,435
1,438
1,402

18.0
17.6
17.3
16.7
17.4
17.3

7.6
7.6
7.6
7.3
7.3
7.4

4,475
4,227
4,188
4,261
4,141
4,176

850
833
841
829
869
858

2,111
2,294
2,254
2,150
2,161
2,218

1,092
1,088
1,057
1,060
1,024
1,011

1983:
Jan
Feb....
Mar....

fc:
June...
July....
Aug....
Sept...
Oct.....
Nov....
Dec...
1984:
Jan
Feb....
Mar....

fc:
June...
July....
Aug....
Sept...
Oct
Nov....
Dec...

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.




269

TABLE B-32.—Civilian labor force participation rate and civilian employment/population ratio, 1948-84
[Percent; monthly data seasonally adjusted]

Civilian employment/population ratio 2

Civilian labor force participation r a t e l

Fe-

Year or month
Total

Males
Both 20 males
20
sexes years years
16-19 and and

Black
White and Black
other

over

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

Females
20
years
and
over

55.2
56.5
57.3
56.8
55.3
55.9

White

Black
and
other

Black

52.5
52.2

88.6
88.5

31.8
32.3

56.6
55.4

47.7
45.2

85.8
83.7

51.8
52.2
51.3
50.2
48.3
48.9
50.9
49.6
47.4
46.7

88.4
88.4
88.3
88.0
87.8
87.6
87.6
86.9
86.6
86.3

33.3
34.0
34.1
33.9
34.2
35.4
36.4
36.5
36.9
37.0

58.2
58.7
59.4
59.1
58.9
58.7

64.3
64.2
64.9
64.4
64.8
64.3

45.5
47.9
46.9
46.4
42.3
43.5
45.3
43.9
39.9
39.9

84.2
86.1
86.2
85.9
83.5
84.3
84.6
83.8
81.2
82.3

47.5
47.0
46.2
45.2
44.5
45.7
48.2
48.4
48.3
49.5

86.0
85.7
84.8
84.4
84.2
83.9
83.6
83.4
83.1
82.8

37.6
38.0
37.8
38.3
38.9
39.4
40.1
41.1
41.6
42.7

58.8
58.8
58.3
58.2
58.2
58.4
58.7
59.2
59.3
59.9

64.5
64.1
63.2
63.0
63.1
62.9
63.0
62.8
62.2
62.1

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

30.7
30.6
31.6
32.6
33.0
32.9
32.3
33.8
34.9
35.0
34.6
35.1

40.5
39.1
39.4
37.4
37.3
38.9
42.1
42.2
42.2
43.4

81.9
80.8
80.9
80.6
80.9
81.2
81.5
81.5
81.3
81.1

35.7
35.6
35.8
36.3
36.9
37.6
38.6
39.3
40.0
41.1

55.9
55.3
55.4
55.3
55.5
56.0
56.8
57.2
57.4
58.0

58.0
58.7
59.5
59.3
56.7
57.5
57.9
56.2
56.3
56.2
57.0
57.8
58.4
58.2
58.0
58.1

82.6
82.1
81.6
81.3
81.0
80.3
79.8
79.7
79.8
79.8

43.3
43.3
43.7
44.4
45.3
46.0
47.0
48.1
49.6
50.6

60.2
60.1
60.4
60.8
61.4
61.5
61.8
62.5
63.3
63.9

61.8
60.9
60.2
60.5
60.3
59.6
59.8
60.4
62.2
62.2

59.9
60.2
59.8
58.8
59.0
59.8
61.5
61.4

57.4
56.6
57.0
57.8
57.8
56.1
56.8
57.9
59.3
59.9

42.3
41.3
43.5
45.9
46.0
43.3
44.2
46.1
48.3
48.5

79.7
78.5
78.4
78.6
77.9
74.8
75.1
75.6
76.4
76.5

41.2
40.9
41.3
42.2
42.8
42.3
43.5
44.8
46.6
47.7

57.5
56.8
57.4
58.2
58.3
56.7
57.5
58.6
60.0
60.6

56.8
54.9
54.1
55.0
54.3
51.4
52.0
52.5
54.7
55.2

53.7
54.5
53.5
50.1
50.8
51.4
53.6
53.8

63.8
63.9
64.0
64.0
64.4

49.9
49.7
51.9
53.7
54.8
54.0
54.5
56.0
57.8
57.9
56.7
55.4
54.1
53.5
53.9

79.4
79.0
78.7
78.5
78.3

51.3
52.1
52.7
53.1
53.7

64.1
64.3
64.3
64.3
64.6

61.7
61.3
61.6
62.1
62.6

61.0
60.8
61.0
61.5
62.2

59.2
59.0
57.8
57.9
59.5

46.6
44.6
41.5
41.5
43.7

74.6
74.0
71.8
71.4
73.2

48.1
48.6
48.4
48.8
50.1

60.0
60.0
58.8
58.9
60.5

53.6
52.6
50.9
51.0
53.6

52.3
51.3
49.4
49.5
52.3

Jan
Feb
Mar
Apr
May
June

63.9
63.8
63.8
63.8
637
64.2

53.9
53.0
53.0
52.8
52.5
54.5

78.2
78.2
78.2
78.4
78.4
78.6

53.0
53.0
52.9
52.9
52.7
53.1

62.2
62.1
62.3
62.3
62.0
62.7

61.8
61.6
61.4
61.6
61.5
61.9

57.2
57.1
57.2
57.3
57.3
57.7

41.5
41.0
40.5
40.5
40.5
41.4

70.6
70.5
70.7
70.8
70.8
71.4

48.3
48.2
48.2
48.4
48.3
48.5

58.3
58.1
58.2
58.3
58.3
58.8

64.1
64.3
64.3
64.0
64.1
64.1

53.7
54.9
53.6
52.8
53.3
53.5

78.7
78.6
78.5
78.4
78.4
78.3

52.9
53.3
53.5
53.3
53.2
53.3

62.2
62.1
62.3
61.4
61.4
61.6

61.9
61.6
61.7
60.9
61.0
61.2

58.0
58.2
58.4
58.4
58.7
58.8

41.5
42.4
42.1
41.4
42.5
42.9

71.8
71.8
71.9
72.0
72.4
72.5

48.8
49.0
49.4

59.1
59.3
59.4

49.3
49.4
49.5

59.5
59.8
60.0

50.4
50.7
50.7
50.6
50.4
50.8
51.2
51.0
51.6
51.2
51.5
51.6

48.8
49.2
49.1
49.0
48.9
49.2

July
Aug
Sept
Oct
Nov
Dec

64.1
64.1
64.0
64.0
64.0
64.5
64.4
64.6
64.6
64.5
64.5
64.5

64.0
64.2
64.2
64.3
64.6
64.5

53.4
53.8
53.9
54.2
54.3
54.3

78.3
78.3
78.3
78.3
78.3
78.3

53.1
53.3
53.5
53.6
54.1
53.8

64.4
64.5
64.6
64.7
64.9
64.8

61.5
61.9
61.9
62.1
62.6
62.6

61.0
61.9
61.5
61.7
62.0
61.9

58.8
59.1
59.2
59.3
59.7
59.8

43.0
43.4
43.3
43.8
44.0
44.4

72.7
72.9
72.9
72.9
73.2
73.3

49.3
49.6
49.8
49.9
50.4
50.3

59.9
60.2
60.2
60.4
60,7
60.7

50.6
51.6
51.3
51.4
52.1
52.4

64.5
64.3
64.4
64.4
64.4
64.6

54.5
53.0
54.2
53.7
53.5
54.1

78.3
78.3
78.3
78.3
78.3
78.3

54.0
53.9
53.6
53.9
53.9
54.0

64.8
64.4
64.6
64.6
64.6
64.8

62.8
63.1
62.8
63.3
63.2
63.2

62.4
62.6
62.2
62.8
63.0
63.1

59.7
59.5
59.6
59.7
59.8
59.9

44.5
43.2
43.9
43.7
44.0
43.9

73.2
73.3
73.3
73.4
73.4
73.4

50.3
50.1
50.1
50.2
50.4
50.6

60.7
60.3
60.5
60.6
60.6
60.8

51.9
52.6
52.6
52.8
53.6
54.0
53.5
54.1
54.2
54.6
54.6
54.6

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.I...."II....
1977
1978
1979
1980
1981
1982
1983
1984
1983:

58.8
58.9
59.2
59.2
59.0
58.9
58.8
59.3
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
60.4
60.8
61.3
61.2
61.6
62.3
63.2
63.7

1

Civilian labor force as percent of civilian noninstitutional population in group specified.

2

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.




270

50.0
49.6
50.1
49.8
50.3
50.4

52.1
52.7
52.8
53.2
53.5
53.6

TABLE B-33.— Unemployment rate, 1948-84
[Percent; monthly data seasonally adjusted]

Year or
month

Unemployment rate, civilian workers 2
UnemployFemales
Males
Both
All
ment
Black
sexes
rate, civil20
20
White and Black
161616ian
all
other
19
19 years
19 years Total
work- work- Total
ers
years
years and
ers 1
years and
over
over
3.8
5.9

1948
1949

3.6
5.9

9.8
14.3

V

Experienced
wage
and
salary
workers

Married
men,
spouse
present 8

32
54

4.1
6.0

X

8.3
12.3

3.6
5.3

9.2
13.4

3.5
5.6

5.9
8.9

4.3
6.8

3.5

6.0
3.7
3.4
3.2
6.2
4.8
4.4
4.6
7.3
5.7

4.6
1.5
1.4
1.7
4.0
26
2.3
2.8
51
3.6

5.7
6.8
56
5.G
50
4.3
3.5
3.6
3.4
3.3

3.7
4.6
36
3.4
28
2.4
1.9
1.8
1.6
1.5
2.6
3.2

Women
who
maintain
families

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

5.2
3.2
2.9
2.8
5.4
43
4.0
42
66
5.3

5.3
3.3
3.0
2.9
5.5
44
4.1
4.3
68
5.5

5.1
2.8
2.8
2.8
5.3
42
3.8
4.1
68
5.2

12.7'
8.1
8.9
7.9
13.5
11.6
11.1
12.4
171
15.3

4.7
2.5
2.4
2.5
4.9
3.8
3.4
3.6
6.2
4.7

5.7
4.4
3.6
3.3
6.0
4.9
4.8
4.7
6.8
5.9

11.4
8.3
8.0
7.2
11.4
10.2
11.2
10.6
14.3
13.5

5.1
4.0
3.2
2.9
5.5
4.4
4.2
4.1
6.1
5.2

12.2
8.2
8.5
7.6
12.6
11.0
11.1
11.6
15.9
14.6

4.9
3.1
2.8
2.7
5.0
3.9
3.6
3.8
6.1
4.8

9.0
5.3
5.4
4.5
9.9
8.7
8.3
7.9
12.6
10.7

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

5.4
6.5
54
5.5
50
4.4
3.7
3.7
3.5
3.4

5.5
67
55
5.7
52
4.5
3.8
3.8
3.6
3.5

5.4
64
52
5.2
46
4.0
3.2
3.1
2.9
2.8

15.3
17.1
14 7
lf.2
158
14.1
11.7
12.3
11.6
11.4

4.7
5.7
4.6
39
3.2
2.5
2.3
2.2
2.1

5.9
7.2
6.2
6.5
6.2
5.5
4.8
5.2
4.8
4.7

13.9
16.3
14.6
17.2
16.6
15.7
14.1
13.5
14.0
13.3

5.1
6 3s
5A
5.4
5.2
4.5
3.8
4.2
3.8
3.7

14.7
16.8
14.7
17.2
16.2
14.8
12.8
12.9
12.7
12.2

5.0
6.0
4.9
5.0
4.6
4.1
3.4
3.4
3.2
3.1

10.2
12.4
10.9
10.8
9.6
8,1
7.3
7.4
6.7
6.4

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

4.8
58
5.5
4.8
5.5
8.3
7.6
6.9
6.0
5.8

4.9
59

4.4
53

4.9
5.6
8.5
7.7
7.1
6.1
5.8

4.2
4.9
7.9
7.1
6.3
5.3
5.1

15.0
16 6
15!9
13.9
15.6
20.1
19.2
17.3
15.8
15.9

3.5
4.4
4.0
3.3
3.8
6.8
5.9
5.2
4.3
4.2

5.9
6.9
6.6
6.0
6.7
9.3
8.6
8.2
7.2
6.8

15.6
17.2
16.7
15.3
16.6
19.7
18.7
18.3
17.1
16.4

4.8
5.7
5.4
4.9
5.5
8.0
7.4
7.0
6.0
5.7

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

10.4
9.4
10.5
14.8
14.0
14.0
12.8
12.3

4.8
5.7
5.3
4.5
5.3
8.2
7.3
6.6
5.6
5.5

2.3
2.7
5.1
4.2
3.6
2.8
2.8

5.4
73
7.2
7.1
7.0
10.0
10.1
9.4
8.5
8.3

1980
1981
1982
1983
1984

7.0
7.5
9.5
9.5
7.4

7.1
7.6
9.7
9.6
7.5

6.9
7.4
9.9
9.9
7.4

18.3
20.1
24.4
23.3
19.6

5.9
6.3
8,8
8.9
6.6

7.4
7.9
9.4
9.2
7.6

17.2
19.0
21.9
21.3
18.0

6.4
6.8
8.3
8.1
6.8

17.8
19.6
23.2
22.4
18.9

6.3
6.7
8.6
8.4
6.5

13.1
14.2
17.3
17.8
14.4

14.3
15.6
18.9
19.5
15.9

6.9
7.3
9.3
9.2
7.1

4.2
4.3
6.5
6.5
4.6

9.2
10.4
11.7
12.2
10.3

10.2
10.3
10.2
10.1
10.0
9.9

10.4
10.4
10.3
10.2
10.2
10.1

10.6
10.8
10.7
10.7
10.6
10.2

24.1
24.2
25.1
24.4
24.0
24.4

9.6
9.9

22.0
21.2
21.7
22.2
21.8
23.6

9,0
8.9
8.8
8.5
8.5
8.7

23.1
22.8
23.4
23.3
23,0
24.0

9.1
9.2
9.1
8.9
8.9
8.8

19.0
18.3
18.6
18.7
18.7
18.9

21.0
20.1
20.0
20.5
20.5
20.5

10.1
10.1
10.0
9.9
9.9
9.5

7.2

9.7
9.2

10.1
9.9
9.8
9,6
9.5
9.9

7.2
7.2
7.1
7.0
6.7

13.2
13.0
13.2
13.0
12.9
12.7

Nov
Dec

9.3
9.3
9.0
8.7
8.3
8.1

9.4
9.4
9.2
8.8
8.4
8.2

9.8
9.8
9.5
9.1
8.6
8.3

23.6
24.3
22.6
22.2
20.5
20.3

8.8
8.7
8.5
8.1
7.8
7.4

8.9
9.0
8.8
8.5
8.2
8.1

21.8
21.0
20.4
20.6
20.1
19.4

7.8
7.9
7.8
7.5
7.2
7.2

22.8
22.7
21.6
21.5
20.3
19.9

8.2
8.2
7.9
7.6
7.3
7.1

17.7
17.8
17.2
16.7
16.1
16.2

19.3
19.6
18.9
18.2
17.6
17.7

9,1
9.1
8.7
8.4
8.1
7.9

6.2
6.3
6.0
5.7
5.5
5.2

12.0
11.8
12.1
11.3
10.4
10.9

1984:
Jan
Feb
Mar
Apr
May
June

7.9
7.7
7.7
7.7
7.4
7.1

8.0
7.8
7.8
7.8
7.5
7.2

8.1
7.8
7.7
7.7
7.4
7.2

20.5
19.9
20.0
19.7
19.5
18.9

7.2
7.0
6.8
6.9
6.6
6.4

8.0
7.9
7.9
7.8
7.7
7.3

18.4
18.9
19.6
18.8
18.4
17.3

7.1
6.9
6.9
6.9
6.8
6.5

19.5
19.4
19.8
19.3
19.0
18.1

6.9
6.8
6.7
6.7
6.5
6.3

15.6
15.0
15.1
15.1
14.3
13.7

17.0
16.5
16.6
16.7
16.0
15.2

7.6
7.4
7.3
7,3
7.0
6.7

5.0
4.9
4.7
4.7
4.6
4.6

10.7
10.8
10.8
10.5
10.0
9.8

July
Aug
Sept
Oct
Nov
Dec

7.3
7.4
7.2
7.2
7.0
7.1

7.5
7.5
7.4
7.3
7.1
7.2

7.4
7.2
7.2
7.1
7.0
7.1

20.4
18.8
19.7
19.8
18.9
19.4

6.5
6.4
6.4
6.2
6.2
6.3

7.5
7.8
7.5
7.7
7.3
7.2

16.4
18.1
18.3
17.4
16.6
18.1

6.8
7.0
6.6
6.9
6.5
6.4

18.4
18.4
19.0
18.7
17.8
18.8

6.3
6.4
6.3
6.3
6.1
6.2

14.8
14.3
13.8
13.8
13.7
13.6

16.6
15.8
15.1
15.3
15.1
15.0

7.1
7.0
7.0
6.9
6.8
6,8

4.5
4.5
4.6
4.5
4.4
4.4

9.8
10.3
10.1
10.4
10.8
9.6

1983:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept

OcSt

5.6

5.0

H

,._...
_„.
^j resident Armed Forces.
r ._,
2
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 B-29
Source: Department of Labor, Bureau of Labor Statistics.




271

_

...i::::i:

ZZZZZZ.

ZZZZZZ.
ZZZZZZ.
4.9
4.4
4.4

TABLE B-34.—Civilian labor force participation rate by demographic characteristic, 1954-84
[Percent;1 monthly data seasonally adjusted]
Black

White

Year or month

All
civilian
work- Total
ers
Total

Males
16-19
years

Females
20
years
and Total

16-19
years

Females

Males
20
years Total Total
and
over

16-19
years

20
years Total
and
over

16-19
years

and

1954....

58.8

58.2

85.6

57.6

87.8

33.3

40.6

32.7

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

I960....
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

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

80.8
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

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

59.9
60.2
59.8

73.6
73.4
72.9

46.3
45.7
46.7

78.5
78.4
77.6

48.7
49.3
49.0

32.2
34.2
33.4

51.2
51.6
51.4

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

58.8
59.0
59.8
61.5
61.4

70.9
70.0
70.6
71.5
71.3

42.6
41.3
43.2
44.9
43.6

76.0
75.4
75.6
76.2
76,3

48.8
49.8
50.8
53.1
53.1

34.2
32.9
32.9
37.3
36.8

51.1
52.5
53.6
55.5
55.4

1980....
1981....
1982....
1983....
1984....

63.8
63.9
64.0
64.0
64.4

64.1
64.3
64.3
64.3
64.6

78.2
77.9
77.4
77.1
77.1

63.7
62.4
60.0
59.4
59.0

79.8
79.5
79,2
78.9
78.7

51.2
51.9
52.4
52.7
53.3

56.2
55.4
55.0
54.5
55.4

50.6
51.5
52.2
52.5
53.1

61.0
60.8
61.0
61.5
62.2

70.3
70.0
70,1
70.6
70.8

43.2
41.6
39.8
39.9

75.1
74.5
74.7
75.2
74.8

53.1
53.5
53.7
54.2
55.2

34.9
34.0
33.5
33.0
35.0

55.6
56.0
56.2
56.8
57.6

64.1
64.1
64.0
64.0
64.0
64.5

76.8
76.9
76.8
76.9
77.0
77.3

59.3
59.2
58.8
58.5
58.5
59.9

78.5
78.6
78.6
78.7
78.8
79.0

52.6
52.4
52.3
52.3
52.1
52.7

55.1
53.9
54.7
53.8
53.0
55.4

52.4
52.2
52.1
52.2
52.1
52.5

61.8
61.6
61.4
61.6
61.5
61.9

39.0
40.0
43.4

75.4
74.9
74.6
75.4
74.9
75.7

54.6
54.8
54.5
54.4
54.4
54.2

32.6
31.8
31.3
34.3
32.9
35.8

June.
July..
Aug..
Sept.
Oct...,
Nov..,
Dec...

70.8
70.1
69.9
70.6
70.4
71.5

40.1
38.3
38.9

t

63.9
63.8
63.8
63.8
63.7
64.2

57.3
57.7
57.4
56.9
57.0
56.5

64.1
64.3
64.3
64.0
64.1
64.1

64.4
64.6
64.6
64.5
64.5
64.5

77.3
77.4
77.3
77.2
77.3
77.2

59.7
60.4
59.9
59.1
59.6
59.6

79.0
79.0
78.9
78.9
79.0
78.9

52.6
53.0
53.0
52.9
52.9
53.0

54.6
56.0
54.5
53.9
54.2
54.8

52.4
52.7
52.9

71.6
71.1
70.7

69.7

52.8
52.8

61.9
61.6
61.7
60.9
61.0
61.2

70.4
70.1

41.5
41.3
39.0
38.2
39.6
38.5

76.0
75.4
75.3
74.3
74.9
74.7

54.2
54.0
54.5
53.7
53.5
54.0

32.0
33.4
33.1
32.5
32.3
33.5

56.5
57.1
56.3
56.0
56.4

64.0
64.2
64.2
64.3
64.6
64.5

64.4
64.5
64.6
64.7
64.9
64.8

77.0
77.1
77.1
77.1
77.1
77.2

58.5
59.0
59.8
59.1
59.8
59.3

78.8
78.8
78.7
78.8
78.7
78.8

52.8
53.1
53.1
53.3
53.7
53.5

55.6
55.9
56.0
56.2
55.7
56.0

52.6
52.8
52.9
53.1
53.5
53.3

61.0
61.9
61.5
61.7
62.0
61.9

70.3
71,1
70.6
70.2
70.7
70.4

38.4
39.7
40.7
42.4
41.7
41.1

74.8
75.5
74.8
74.1
74.7
74.5

53.5
54.4
54.2
54.9
55.0
54.9

32.7
34.3
31.7
35.0
31.3
35.9

56.0
56.8
56.9
57.2
57.7
57.1

June..
64.5 64.8 77.0
59.1 78.6 53.6
55.9 53.4
July...
64.3 64.4 76.8
54.3 53.1
56.7 78.6 53.2
Aug...
55.4 52.9
64.4 64.6 77.1
59.3 78.7 53.1
Sept..
54.9 53.2
64.4 64.6 77.0
58.8 78.6 53.3
Oct....
54.0 53.2
64.4 64.6 77.1
59.2 78.7 53.2
Nov...
55.0 53.4
64.6 64.8 77.2
59.6 78.8 53.5
Dec...
1
Civilian labor force as percent of civilian noninstitutional population in group
Note.—Data relate to persons 16 years of age and over.
See footnote 5 and Note, Table B-29.
Source: Department of Labor, 8ureau of Labor Statistics.

62.4
62.6
62.2
62.8
63.0
63.1

71.0
71.0
70.8
71.2
70.9
71.2

41.5
41.4
42.8
43.4
43.1
43.5

75.1
75.0
74.6
75.0
74.7
74.9

55.5
55.9
55.3
56.0
56.6
56.5

37.4
36.3
36.2
37.8
36.0
35.5

57.6
58.1
57.5
58.0
59.0
58.9

1983:

Jan...
Feb...
Mar..

52.8

41,7

56.8

1984:

Jan...,
Feb....
Mar...

fc




272

specified.

TABLE B-35.—Civilian unemployment rate by demographic characteristic, 1948-84
[Percent;1 monthly data seasonally adjusted]
White
Year or month

AH
civilian
work- Total
Total
ers

Black

Males
16-19
years

Males

Females
20
years
and
over

Total

16-19
years

20
years Total Total
and
over

1948
1949

3.8
5.9

3.5
5.6

3.4
5.6

5.3
3.3
3.0
2.9
5.5

4.9
3.1
?R
2.7
50

4.7
2.6
2.5
25
4.8

13.4

4.4

10.4

4.4
4.1
4.3
6.8
5.5

3.9
36
3.8
61
4.8

3.7
3.4
36
6.1
4.6

11.3
10.5
115
15.7
14.0

3.3
3.0
3.2
5.5
4.1

9.1
9.7
9.5
12.7
12.0

5.5
6.7
55
5.7
5.2

5.0
60
4.9
50
4.6

48
5.7
46
4.7
4.1

14.0
15.7
13 7
15.9
14.7

4.2
5.1
4.0

5.3
6.5
5.5
5.8
5.5

12.7
14.8
12.8
15.1
14.9

45
3.8
38
3.6
35

4.1
34
34
3?
31

36
2.8
27
2.6
25

12.9
10.5
10.7
10.1
100

2.9
2.2
2.1
2.0
19

50
4.3
46
4.3
42

14.0
12.1
11.5
12.1
11.5

4.0
3.3
3.8
3.4
3.4

1970
1971
1972
1973
1974

45
54
51
4.3
5.0
78
70
6?
5?
5.1

40
4.9
4.5
3.8
4.4
72
6.4
5.5
4.6
4.5

13 7
15.1
14.2
12.3
13.5
183
17.3
15.0
13.5
13.9

32
4.0
3.6
3.0
3.5

1975
1976
1977
1978
1979

49
5.9
5.6
4.9
5.6
85
7.7
7.1
6.1
5.8

6.2
5.4
4.7
3.7
3.6

54
6.3
5.9
5.3
6.1
86
7.9
7.3
6.2
5.9

13.4
15.1
14.2
13.0
14.5
17 4
16.4
15.9
14.4
14.0

4.4
5.3
4.9
4.3
5.1
7.5
6.8
6.2
5.2
5.0

1980
1981
1982
1983
1984

7.1
7.6
9.7
9.6
7.5

6.3
67
8.6
R4
6.5

61
6.5
8.8
8.8
6.4

16.2
17.9
21.7
20.2
16.8

5.3
5.6
7.8
7.9
5.7

6.5
6.9
8.3
7.9
6.5

14.8
16.6
19.0
18.3
15.2

5.6
5.9
7.3
6.9
5.8

10.4
104
10.3
10.2
10.2
10.1

9.1
9.2
91
89
8.9
8.8

9.3
97
9.6
9.5
9.4
8.9

21.4
21.6
22.6
21.5
20.4
20.6

8.4
A8
8.6
8.6
8.6
8.1

8.8
8.6
8.5
8.2
8.2
8.5

19.3
18.2
19.3
19.0
19.4
20.3

Julv
June
Aug
Sept
Oct
Nov
Dec

9.4
9.4
9.2
8.8
8.4
8.2

8.2
8.2
79
7.6
7.3
7.1

8.6
8.6
8.3
8.0
7.6
7.2

20.0
21.0
18.7
19.5
17.7
17.4

7.7
7.7
7.6
7.2
6.8
6.5

7.7
7.6
7.4
7.1
6.9
6.8

18.7
18.1
17.2
16.9
16.7
16.1

j 1 20 1
7.5 ?0 0
7.2
7.2 20.5
7.5 20.5
6.7 19 3
6.7 196
6.6 189
6.3 18.2
6.1 176
6.0 17.7

1984:
Jan
Feb
Mar
Apr
May
June

8.0
7.8
7.8
7.8
7.5
7.2

6.9
6.8
67
67
6.5
6.3

7.0
68
6.7
6.6
6.4
6.2

17.7
16.8
17.3
16.8
16.9
16.6

6.0
5.9
5.9
6.0
5.8
5.6

6.4
6,3
6.3
6.1
6.2

6.3
6.2
6.2
6.1
6.1
6.1

17.4
16.7
17.0
16.6
16.2
16.2

6.7
6.7
6.8
6.7
6.6
6.4
6.4
6.6
6.5
6.6
6.2
6.3

14.9
16.1
16.4
15.7
15.5
15.1

7.5
7.5
7.4
7.3
7.1
7.2

6.3
6.1
5.9
5.9
5.7
5.4
5.5
5.5
55
5.4
5.4
5.4

12.9
15.4
15.5
15.2
13.9
15.5

5.8
5.9
57
5.8
5.5
5.5

20
years
and
over

4.6
5.7
4.7
4.8
4.6

1965
1966
1967
1968
1969

16-19
years

3.9
3.7
3.8
5.6
4.7

1960
1961
1962
1963
1964

Total

5.1

1955
1956
1957
1958
1959

5.3
42
3.3
3.1
5.5
4.3~
4.2
43
6.2
5.3

16-19
years

38
5.7

1950
1951
1952
1953
1954

Females
20
years
and
over

. .

1983:
Jan
Feb
Mar
Apr

w.

July
Sept"!"!!!!!!!"!"
Oct
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.




273

104
9.4
10.5

93
8.0
9.8

31.7
27.8
33.1

7.0
6.0
7.4

118
11.1
11.3

40.5
36.1
37.4

90
8.6
8.8

14.8
140
140

38.1
37,5
39.2
36.7
34.2

12.5
11.4
10.7
9.3
9.3

14.8
143
149
13R
13.3

41.0
41.6
43.4
40.8
39.1

1??
11 7

12.3

14.8
13.7
13.3
11.8
11.4

14.3
156
189
195
159

14.5
15.7
20.1
?03
16.4

37.5
40.7
48.9
48.8
42.7

12.4
13.5
17.8
18.1
14.3

14.0
156
176
1R6
154

39.8
42.2
47.1
48.2
42.6

119
134
154
165
135

22.3
21.3
20.8
21.7
22.1
21.4

47.7
46.7
46.0
48.8
52.5
52.9

20.2
19.4
18.9
19.6
19.7
18.7

19 6
189
19?
19 3
18.9
19.6

45.2
47.0
43.5
48.9
44.1
50.7

177
17(1
176
171
17.1
17.2

20.5
20.7
196
18.2
17.8
17.2

48.2
53.8
53.7
44.1
44.7
45.0

18.2
18.1
17.0
16.3
15.7
15.1

1R1
183
181
18.1
174
18.2

48.6
48.0
48.1
53.1
49.6
50.8

160
16?
160
15.6
15?
159

170
165
16.6
167
16.0
15.2

17.2
16.8
17?
17.6
16.3
16.3

46.6
46.0
44.3
42.9
41.4
38.2

15.1
14.6
15.1
15.6
14.3
14.6

168
16?
160
157
15.7
14.1

48.2
41.4
49.4
45.9
48.1
35.8

14 6
14 4
1,3 8
136
13.7

166
15.8
15.1
15.3
15.1
15.0

17.4
15.9
15.5
15.6
14.9
15.5

42.3
40.5
41.0
43.8
42.0
43.8

15.5
14.1
135
13.4
12.8
13.3

15 8
15.7
14.6
15.0
15.3
14.5

42.2
.42.2
43.0
36.2
40.2
40.1

138
13.8

11 ?
10.9

13.4
13.5
12.7

TABLE B-36.—Unemployment insurance programs, selected data, 1955-84
All programs

Year or month

Covered
employment 1

State programs

Total
Insured
unemploy- benefits
Insured
paid
ment
unem(millions ployment
(weekly
of 2
aver- 3
dollars) <
age) *

Thousands
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..

40,018
42,751
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
72,451
71,037
73,459
76,419
88,804
92,062
92,659
93,300
91,628
B
91,898

1983:
Jan
Feb..!
Mar..
May!June..

{uy
Aug
Sept
Oct
Nov
Dec
1984:
Jan
Feb
Mar
Apr
May
June

Oct....
Nov....
Dec...

Insured

Initial
claims

Exhaustions 8

unemployment as
percent
of

Benefits paid
Total
(millions
of
dollars)*

check
(dollars) •

4.8
5.6
4.4
4.3
3.8
3.0
2.3
2.5
2.2
2.1

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

25.04
27.02
28.17
30.58
30.41
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
3.9

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
13,761.1
13,262.1
20,650.0
17,762.8

50.34
54.02
56.76
59.00
64.25
70.23
75.16
78.79
83.67
89.67
98.95
106.70
119.37
123.59

4.6
4.5
4.5
4.4
4.2
3.9

2,205.6
2,052.9
2,370.7
1,817.6
1,589.7
1,537.9

124.29
124.51
125.56
124,95
124.57
123.51

covered
employment

Weekly average; thousands

1,399
1,323
1571
2,773
1,860
2,071
2,994
1,946
'1,973
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
4,594
3,775

1,560.2
1,540.6
1,913.0
4,290.6
2,854.3
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
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
20,206.2

1,265
1,215
1,446
2,510
1,684
1,908
2,290
1,783
1,806
1,605
1,328
1,061
1,205
1,111
1,101
1,805
2,150
1,848
1,632
2,262
3,986
2,991
2,655
2,359
2,434
3,350
3,047
4,061
3,396

26
2
227
270
39
6
27
7
31
3
350
32
0
'298
268
232
203
226
21
0
200
26
9
295
261
247
363
478
36
8
375
36
4
388

5,459
5,437
5,134
4,642
3,947
3,481

2,463.3
2,350.2
2,780.2
2,184.0
1,910.3
1,798.5

3,979
3,952
3,885
3,826
3,615
3,389

513
498
491
488
460
424

3,275
2,917
2,580
2,478
2,620
2,915

1,411.3
1,455.7
1,167.5
1.058.1
1,153.4
1,255.2

3,190
3,025
2,983
2,797
2734
2,636

408
410
386
389
388
389

3.7
3.5
3.5
3.3
3.2
3.1

1,297.2
1,367,2
1,104.4
1,002.0
1,099.8
1,203.6

121.53
121.17
121.36
122.99
122.18
122.61

3,374
3,174
2,958
2,613
2,290
2,166

1,515.5
1,455.5
1,426.7
1,220.3
1,149.8
980.4

2,615
2,528
2,498
2,449
2,369
2,335

349
354
361
350
354

3.1
3.0
2.9
2.8
2.8
2.7

1,458.0
1,400,5
1,369.5
1,173.6
1,109.3
948.4

123.60
124.30
124.67
125.26
123.69
121.96

2,327
2,184
2,083
2,149
2,441

1,005.1
1,045.3
877.9
969.9

2,361
2,326
2,370
2,442
2,516
2,504

373
365
374
405
402
393

2.7
2.7
2.7
2.8
2.9
2.9

974.1
1,017.8
853.4
939.7
1,011.1

119.83
120.24
122.48
123.85
124.26

3.5
3.2
3.6
6.4
4.4

488
460
583
438
100
99
102
103
91
87

"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).
* 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 afl 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.




274

TABLE B-37.—Wage and salary workers in nonagricultural establishments, 1929-84
[Thousands of persons; monthly data seasonally adjusted]
Year or
month

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
1984".
1983: Jan....
Feb...,
Mar
«&"...
June....
July
Aug
Sept....
Oct
Nov....
Dec...
1984: Jan
Feb
Mar
lay....
llfay
June....
July
Aug
Sept....
Oct
Nov..,
Dec".,

Total
wage
and
salary
workers
31,324
23,699
30,603
32,361
36,539
40,106
42,434
41,864
40,374
41,652
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
89,566
90,138
94,155
88,827
88,728
88,945
89,259
89,578
89,927
90,274
89,918
91,018
91,345
91,688
92,026
92,391
92,846
93,058
93,449
93,786
94,135
94,350
94,523
94,807
95,157
95,494
95,661

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
19,447
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
18,781
18,497
19,591
18,073
18,056
18,085
18,189
18,298
18,391
18,521
18,597
18,698
18,886
19,018
19,143
19,254
19,373
19,466
19,530
19,570
19,629
19,696
19,725
19,616
19,686
19,718
19,810

ConstrucNonDurable durable Mining
tion
goods
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
10,688
11,077
11,597
12,274
12,760
12,187
12,109
11,039
10,774
11,636
10,454
10,450
10,465
10,536
10,623
10,686
10,781
10,846
10,923
11,071
11,170
11,266
11,343
11,440
11,513
11,551
11,598
11,652
11,702
11,758
11,696
11,752
11,776
11,843

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
7741
7,724
7,954
7,619
7,606
7,620
7,653
7,675
7,705
7,740
7,751
7,775
7,815
7,848
7,877
7,911
7,933
7,953
7,979
7,972
7,977
7,994
7,967
7,920
7,934
7,942
7,967

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
1,128
957
999
993
967
955
943
940
939
946
950
952
965
967
969
975
978
978
984
995
1,002
1,007
1,017
1,020
1,012
1,009
1,003

Transportation
Wholeand
sale
public
utilities

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
2,659
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
3,905
3,940
4,316
3,893
3,804
3,792
3,817
3,849
3,911
3,947
3,985
4,019
4,044
4,073
4,086
4,154
4,226
4,151
4,246
4,286
4,343
4,356
4,356
4,374
4,382
4,396
4,452

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
5,082
4,958
5,170
4,984
4,969
4,975
4,993
5,001
5,005
5,001
4,369
5,046
5,053
5,043
5,055
5,095
5,105
5,112
5,129
5,144
5,163
5,175
5,202
5,213
5,225
5,226
5,238

1,762
1,835
1,960
1,906
1,822
1,845
1,949
2,291
2,471
2,605
2,602
2,635
2,727
2,812
2,854
2,867
2,926
3,018
3,028
2,980
3,082
3,143
3,133
3,198
3,248
3,337
3,466
3,597
3,689
3,779
3,907
3,993
4,001
4,113
4,277
4,433
4,415
4,546
4,708
4,969
5,204
5,275
5,358
5,278
5,259
5!526
5,193
5,190
5,190
5,204
5,220
5,241
5,256
5,277
5,301
5322
5[344
5,371
5,406
5,438
5,457
5,473
5,492
5,502
5,528
5,544
5,588
5,612
5,623
5,645

Retail
trade

4,664
4,914
5,251
5,212
5,160
5,214
5,365
6,084
6,485
6,667
6,662
6,751
7,015
7,192
7,393
7,368
7,610
7,840
7,858
7,770
8,045
8,248
8,204
8,368
8,530
8,823
9,250
9,648
9,917
10,320
10,798
11,047
11,351
11,836
12,329
12,554
12,645
13,209
13,808
14,573
14,989
15,035
15,189
15,179
15,545
16,262
15,264
15,284
15,348
15,386
15,433
15,514
15,580
15,626
15,671
15,737
15,805
15,857
15,914
15,980
16,030
16,095
16,166
16,245
16,283
16,295
16,342
16,468
16,644
16,635

Finance,
Government
insurance, Services
State
and real
Federal and
estate
local
1,494
1,280
M47
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
2,1U
2,200
2298
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
5,341
5,467
5,665
5,363
5;389
5,408
5,445
5,460
5!464
5,478
5,498
5,503
5,512
5,530
5,546
5,573
5,593
5,613
51640
5,662
5,676
5,676
5,679
5,684
5,705
5,725
5,748

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
19.036
19,665
20,661
19,214
19,230
19,356
19,456
19,529
19,626
19,723
19,808
19,893
19,962
20,034
20,130
20,162
20,278
20,378
20,449
20,549
20,681
20,701
20,748
20,861
20,964
21,030
21,085

533
565
905
996
1,34.0
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
2,752
2,782
2,747
2,744
2,743
2,741
2,753
2,744
2,744
2,747
2,774
2,760
2,759
2,762
2,760
2,763
2,770
2,771
2,785
2,777
2,779
2,785
2,804
2,793
2,801
2,794

2,532
2,601
3,090
3,206
3,320
3,270
3,175
3,116
3,137
3,341
3,582
3,787
3,948
4,098
4,087
4,188
4,340
4,563
4,727
5,069
5399
5,648
5,850
6,083
6,315
6,550
6,868
7,248
7,696
8,220
8,672
9,102
9,437
9,823
10,185
10,649
11,068
11,446
11,937
12,138
12,399
12,919
13,174
13,375
13,259
13,098
13,099
13,185
13,103
13,095
13,093
13,085
13,095
13,092
13,078
13,061
13,161
13,104
13,115
13,107
13,098
13,112
13,103
13,132
13,137
13,117
13,149
13,172
13,305
13,310
13,322
13,251

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 comparable with labor force data (Tables B-29 through B-35), which include proprietors, self-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.




275

TABLE B-38.—Average weekly hours and hourly earnings in selected private

nonagriculturalindustries,

1947-84
[For production or nonsupervisory workers; monthly data seasonally adjusted, except as noted]

Year or
month

Total
private

nonagricultural »
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
1984".
1983:
Jan
Feb

Mr
a

t

June
July
Aug
Sept
Oct
Nov
Dec
1984:
Jan

Feb ZZZ
Mar

»&::::::::::
June
July
Aug.. .
Sept
Oct
Nov".
Dec"

Manufacturing

Con:
struction

403
400

40.4

39.4
39 8
39 9
39 9
39.6
39.1
39.6
39.3
38 8
38.5
39.0
38.6
38.6

39.1
40 5
40.6
40 7
40.5
39.6

382
381
377

387
38.8
38.7

388

400

407
40.4
39 8
39'2
40.3
39.7
39 8
40.4

405
407
412

38.6
38,0
37.8
37.7
37.1
36 9
37.0
36.9
36.5
36.1
36.1
36.0
35.8
35.7
35.3
35.2
34.8

41.4
40 6
40.7
40.6
39.8
39 9
40.5

350

401
407

35 0
34.5
34 8
34.9

39 5
39.1
39 7
40.1
39 9
40.1
40.2
40.3
40.7
40.6
40.6
40.6

35.3

349

35.0
35.0
35.0
35.2
35.2
35.2
35.2

35.4
35.3
35.3
35.4
35.3
35.3
35.2
35 2
35.4
35.1
35.2
35.3

407
40.0
39.5
40.1
40.3
40.4
40.2

397
39.8
38.9

40.9
40.9

407

41.1
40.6
40.6
40.5
40 5
40.6
40.4
40.5
40.7

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
37.8
38 3

364

Retail
trade

40 3

402
40.4
40 4
40.4
39 8
39.1
39.2
39.0
38 6

381

38.1
38.2
38.0
37 6
37 4
37 3
37.0
36 6
35.9

353
347
34.2
33.8
33 7
33*4
33.1

327
32.4
32.1
31.6
31.0
30,6
30.2
30.1
29.9

298
304
30 0

2^3

36 7
36.9

29 7

371

29.8

37.1
37.3
37.4
36.8
37.0
36.9

29.8
29.8
29.8
30.0

37.7
38.2
37.0

30.1
30.0
30.1
30.0
30.1
30.2
29.9
29.9

297

37^2

377
377

37.9
37.5
37 7
38.0
37.6
38.1
37.7

Adjusted hourly earnings, total
private nonagricultural 2

Average gross hourly earnings,
current dollars

Average weekly hours

304

30.3

29!8
29.9

304

Index,
1977-100

Total
private
nonagricultural »

Manufacturing

Con:
struction

$1131
1*225
1*275
1335
1.45

$1216
1*327
1.376
1439
1.56

$1540
1*712
1792
1863
2.02

$0838

164

213

1.74
1.78
1.85
1.95
2 04
2*10
2.19
2.26
2 32
2*39

2.28
2.38
2.45
2.57
2 71
2.82
2.93

1.16
1.20
1.25

152

1.61
1.65

171
180
189
1*95
2.02
2.09

214

2 22
2 28
2.36
2 46
2.56
2 68
2^85

344

3.23
3 45

170

245

2*53
2 61

271

411
441

3^19
3.35
3 57

4.79
5.24

182
4.09
4.42
4.83
5.22
5.68
6.17

7 87
7*92
7 92
7*96
7 98

8 66

8.00
8.09
8.13
8.14
8.17
8.21
8.23
8.25
8.31
8.29
8.33
8.35
8 34
8^40
8.38
8.42
8.47

3 20
3.31
3 41
3^55
3 70
3*89

2.82

3.94
4.24
4.53
4.86
5.25
5.69
6.16
6.66
7.25
7.68
8 02
8*33

841
844

347

670
7,27
7.99
8.49
8 83
9*17

873

8 73

875
8 78
8.80
8.83
8.84
8.88
8.93
8.97
8.99

943
946
9.09
9.11
9.12
9.15
9.17
9.20

9l25
9.30
9.33

1

569
646

Retail
trade

901

'951

983
1.06

109

130
137

1977
dollars»

216

58 5

23.4
24.5
25 4
27.3
28 7
30.3
31.3
32.4
34 0

62.3
64.0
63.6
65 5
68.7
70.5
73.3
75 9

357

589

769
784
804

1.42
1.47
1.52

37*2
38.5
39.8

81.4

156
163
168
175
182

410

830

42 4
43 6
44*8
46 4
48*4
50 8
53*9
57.5
61.3

85 0
86 3
87.5
89 0
90.3
92 2

657
694

98 3
101*2
101.1
98.3
97.6
99.0
1004
100.5
97.4
93.5
92.6
93.4
94 8

1*91
2 01
2*16
2.30
2.44
2 60

275

6.41
6.81
7.31
7.71
8.10
8.66
9.27
9.94
10.82
11.63
1192
1243

2.91
3.14
3.36
3.57
3.85
4.20
4.53
4.88
5.25
5.48
5 74

1184
li:98
11 94
ll'97
1189
1L90
11.87
11.89
11.95
11.94
11.93
11.96

5 61
5*66
5 67
5*69

11.97
11.95
11.97
1243
12.07
1247
12.04
12 05
1245
12.02
12.03
12.12

Current
dollars

549

571

574
5.75

577
579

5.80
5.82
5.83
5.84
5.84
5.87
5.89
5.87
5.89
5.89
5 88

5^0

Sfi

5.94

74.1

804
86.7
92.9
100.0
108.2
116.8
127.3
138.9
148.5
1553
160^5

944
95.0

957

947

Percent change
from a year
earli IT4
Current
dollars

1977
dollars

8.3
4.7
37
7.5
51
5.6
3.3
3.5
49
50
4.2
3.5
3.4
30
34
28
2.8
36
4.3
50
6.1
6.7
6.6
72
6.2
6.2
8.0
8.4
7.2
7.6
8.2
7.9
94
9.1
6.9
4.6

0.7
5.8
27
3C
4.9
2.6
44
3.5
13
1.4
2.6
1.8
2.0
24
15
1.4
17
1.5
21
2.0
1.1
7
27
3.0

=1:8

= 7

1.4
1.0
.5

•=3.1
-4.0
-1.0

.9

1 5

-!i

152 9
1534
153 6
154:2
154 7
155*1
155.6
155.4
156.2
157.1
157.2
157.8

94 8
95*3
95 1
94*8
94 8
94*9
94.9
94.4
94.5
94.7
94.6
94.9

54
57
54
5*3
4.9

18
2*4
16
12
1.4

4.4
3.7
44
4.1
3.9
37

2.2
1.2
1.2
1.4
1.0
.4

158.4
158.5
159.1
159.9
159.6
160.3
160.8
160 6
1614
161.3
162.0
163.0

94.8
94.8
95.1
95.4
94.9
95.2
95.2
94.1

3.6
3.2
3.5
37
12
3.3
3.3

= 0

33

= .3

919
94.3
94.7

3*4
27
3.1
3.4

-*6
.0
.6
.1
.3
.2
~:9
-*2

Also includes other private industry groups shown in Table B-37.
Adjusted for overtime (in manufacturing only) and for interindustry 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 percent changes 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.
2
3




276

TABLE B-39.—Average weekly earnings in selected private nonagricultural industries, 1947-84
[For production or nonsupervisory workers; monthly data seasonally adjusted, except as noted]
Average gross weekly earnings
Total private
nonagriculturat *

Year or month

Manufacturing
(current
dollars)

Construction
(current
dollars)

Retail
trade
(current
dollars)

$123.52
12343
127.84
13383
134 87
138 47
144.58
145.32
153 21
157.90
158.04
157 40
163.78
164.97
167 21
172.16
17517
178.38
183 21
184.37
184 83
187.68
189.44
186 94
190.58
198 41
198.35
190.12
18416
186.85
189.00
189 31
183.41
172 74
170.13
16809
17126
173.48

$49.13
53.08
53.80
58,28
63.34
66.75
70.47
70.49
75.30
78.78
81.19
8232
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
330.26
354 08
373.22

$58.83
65 23
67.56
69 68
7696
82 86
86.41
88.54
9090
96.38
10027
10378
108.41
112.67
118 08
122.47
12719
132.06
138 38
146 26
154 95
164.49
181.54
195 45
211.67
22119
235.89
249.25
26608
283.73
29565
318 69
342.99
367 78
399.26
426 82
443 42
454.73

$33.77
36.22
38.42
39 71
42.82
4338
45.36
47.04
48.75
50.18
52.20
54.10
56.15
57.76
58.66
60.96
62.66
64.75
66 61
68.57
7095
74.95
78.66
82.47
87.62
91.85
96.32
102.68
108.86
114.60
121.66
130.20
138.62
147.38
158.03
163.85
17105
176.70

275.45
273.24
275.62
277.80
278.50
280.35
281.40
280.00
284.77
28618
286 53
287.58

170.87
169.50
170.56
170.85
170.65
171.57
171.69
170.01
172.27
172 61
172 40
172.93

342.07
341.34
346.58
350.88
350.32
352.88
354.97
356.25
361.42
362.56
36418
364.99

453.47
438.47
438.20
441.69
441.12
442.68
440.38
443.50
446.93
439 39
44141
441.32

168.30
165.84
168.40
168.99
170.16
171.63
171.35
171.95
172.54
174.00
174 60
176.65

290 63
290 52
29123
29417
292.64
294.05
293.92
293.57
297 36
29414
296 38
298.99

173 93
173 65
174 08
175 52
173.98
174.61
173.92
17198
173 39
17121
172 41
173.63

369.33
370.55
369 96
374 42
370.27
371.49
371.39
372 60
374 33
373 70
376 65
379.73

45127
456 49
442 89
453 53
455.04
457.45
451.50
454 29
457 90
45195
458 34
456.92

175.78
175.20
176.69
176 70
176.69
177.88
176.11
175.81
177.00
175 52
177 61
178.20

Current
dollars
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984 P
1983:
Jan
Feb

, ..

Mr
a

Apr
May
June
July

.:::::::

Auc

sept:":::::::::::::::::;::::::::::::::::""

Oct
Nov
Dec
1984:
Jan
Feb

Mr
a
Apr
flay

June
July
Aug
Sept
Oct
Nov"
Dec

,

.

1977
dollars2

$45.58
4900
50.24
5313
57.86
60 65
63.76
64.52
67.72
70.74
73.33
75 08
78.78
80.67
82 60
85.91
8846
91.33
95 45
98.82
10184
107.73
114.61
119 83
127.31
13690
145.39
154.76
163.53
175.45
189.00
203 70
219.91
23510
255.20
267.26
280 70
294.05

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




277

Percent change from
a year earlier, total
private
nonagricultural3
Current
dollars

1977
dollars

7.5

-01

2.5
58

3.6
47

8.9
48
5.1

8
27
4.4

1.2
5.0
4.5
3.7

.5
5.4
3.1
.1

24

4

4.9
2.4

4.1
.7

24
4.0
30
3.2
45
35
31
5.8

14
3.0
17
1.8
27
6
2
15

6.4
46
6.2
7.5
6.2
6.4
5.7
7.3
7.7

.9
-13
1.9
41
-.0
-4.1
-3.1
1.5
1.2

7.8

.2

8.0
6.9
8.5
4.7

3.1
-5.8
-1.5
-1.2

50

19

4.8

1.3

6.9
3.1
4.0
5.1
4.8
4.9
4.6
3.5
6.0
6.4

3.3
-.2
.3
1.0
1.3
2.4
2.4
1.1
3.2
3.7

56

5.7
5.5

2.6

2.4
1.8

6.3
5.4
62

2.5
1.8
30

4.7
4.8
4.8
5.0

1.5
1.7
1.6
1.3

4.4
26
33
3.7

.6
-.9
- 1

.1

TABLE B-40.—Productivity and related data, business sector, 1947-84
[1977-100; quarterly data seasonally adjusted]

Year or
quarter

Output per hour
of all persons

Output^

Hours of 2all
persons

Compensation per Real compensation
per hour 4
hour 3

Unit labor costs

Implicit price
deflator*

Nonfarm
Busi- Nonfarm Busi- Nonfarm Busi- Nonfarm Bust- Nonfarm Busi- Nonfarm Busi- Nonfarm
ness business ness business ness business ness business ness business ness business ness business
sector sector sector sector sector sector sector sector sector sector sector sector sector sector

1947
1948
1949

43.7
46.1
46.7

49.9
52.0
53.1

35.0
37.2
36.5

34.0
36.0
35.3

80.1
80.7
78.0

68.1
69.2
66.6

17.0
18.4
18.7

18.5
20.1
20.7

46.1
46.4
47.6

50.1
50.5
52.5

38.9
40.0
40.1

37.0
38.6
38.9

38.1
40.8
40.3

36.6
39.1
39.4

1950
1951
1952
1953
1954

50.4
51.8
53.5
55.2
56.1

56.3
57.3
58.6
59.6
60.4

39.8
42.1
43.5
45.4
44.6

38.6
41.1
42.5
44.3
43.4

78.9
81.2
81.3
82.2
79.4

68.6
71.8
72.6
74.4
71.9

20.0
22.0
23.4
24.9
25.7

21.9
23.8
25.1
26.5
27.3

50.5
51.4
53.4
56.5
58.0

55.1
55.4
57.2
60.0
61.6

39.8
42.5
43.8
45.1
45.9

38.8
41.5
42.8
44.5
45.2

41.0
44.0
44.5
44.9
45.3

40.1
42.8
43.5
44.4
45.0

1955
1956
1957
1958
1959

58.3
58.9
60.4
62.3
64.3

62.8
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

82.4
83,7
82.5
78.7
81.8

74.9
76.7
76.3
73.2
76.4

26.4
28.1
29.9
31.2
32.6

28.3
30.0
31.7
32.9
34.2

59.7
62.6
64.5
65.5
67.8

64.0
66.8
68.3
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

1960
1961
1962
1963
1964

65.2
67.4
69.9
72.5
75.6

68.3
70.3
72.8
75.2
78.1

53.5
54.4
57.4
59.9
63.5

52.5
53.5
56.6
59.1
62.8

82.0
80.7
82.1
82.6
83.9

76.9
76.1
77.8
78.6
80.5

33.9
35.2
36.8
38.2
40.2

35.7
36.8
38.3
39.6
41.4

69.5
71.4
73.8
75.6
78.4

73.1
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

1965..
1966..
1967...
1968..
1969..

78.3
80.8
82.6
85.3
85.5

80.5
82.5
84.1
86.8
86.6

67.8
71.5
73.1
76.8
79.0

67.2
71.2
72.7
76.6
78.8

86.6
88.6
88.5
90.0
92.4

83.5
86.3
86.5
88.2
91.0

41.7
44.6
47.0
50.7
54.2

42.8
45.4
47.9
51.5
54.9

83.3
85.3
88.3
89.7

80.1

82.3
84.8
86.9
89.7
90.7

53.3
55.3
57.0
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

1970
1971...
1972
1973
1974

86.2
89.3
92.4
94.8
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

90.9
90.4
93.2
96.8
97.2

89.8
89.4
92.2
96.2
96.6

58.2
62.0
66.1
71.4
78.1

58.7
62.5
66.7
71.8
78.5

90.8
92.8
95.7
97.3
95.9

91.5
93.6
96.6
97.9
96.5

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

1975
1976...
1977
1978
1979

94.6
97.6
100.0
100.5
99.3

94.8
97.8
100.0
100.6
99.0

88.2
93.8
100.0
105.5
107.8

87.8
93.7
100.0
105.7
108.0

93.2
96.0
100.0
104.9
108.6

92.6
95.8
100.0
105.1
109.0

85.6
92.9
100.0
108.5
118.7

86.1
93.0
100.0
108.6
118.4

96.4
98.9
100.0
100.8
99.1

96.9
99.0
100.0
100.8
98.8

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

1980
1981
1982
1983
1984"

98.8
100.7
100.9
103.7
107.4

98.3
99.8
100.0
103.4
106.6

106.5
109.2
106.3
111.0
120.8

106.5
108.7
105.9
111.2
120.7

107.8
108.4
105.4
107.1
112.5

108.3
109.0
106.0
107.5
113.2

131.1
143.4
155.0
161.7
169.3

130.6
143.1
154.5
162.0
169.5

96.4
95.5
97.3
98.4

96.0
95.3
97.0
98.6
98.9

132.6
142.4
153.6
156.0
157.7

132.8
143.5
154.5
156.6
158.9

128.1
140.4
147.9
152.4
157.3

128.1
140.6
148.6
153.4
158.1

1982:
I
II
Ill
IV

100.9
100.3
100.9
101.6

99.8
99.4
100.3
100.5

107.1
106.4
106.1
105.8

106.4
106.0
106.0
105.2

106.1
106.1
105.1
104.1

106.7
106.7
105.7
104.7

151.4
153.9
156.7
158.4

151.0
153.2
156.0
157.9

96.9
97.2
97.3
98.0

96.7
96.8
96.9
97.7

150.0
153.4
155.3
155.9

151.4
154.2
155.6
157.1

145.9
147.9
148.7
149.3

146.5
148.6
149.3
150.2

102.2
103.6
104.3
104.7

101.6
103.6
104.1
104.4

106.9
110.1
112.5
114.7

106.7
110.4
112.7
115.2

104.7
106.2
107.9
109.5

106.5
108.2
110.3

160.2
161.0
161.8
164.2

160.1
161.5
162.4
164.0

99.0
98.5
98.0
98.4

99.0
98.8
98.3
98.2

156.8
155.4
155.1
156.8

155.9
155.9
157.1

151.0
151.7
152.7
154.2

151.9
152.7
153.8
155.2

105.7
107.0
107.2
107.9

105.2
106.6
106.3
106.7

117.8
121.0
121.5
122.8

118.0
121.0
121.3
122.4

111.4
113.0
113.4
113.8

112.3
113.6
114.1
114.7

166.7
167.5
169.3
171.0

166.5
168.0
169.5
170.9

98.6
98.2
98.4
98.5

98.5
98.5
98.5
98.4

157.7
156.5
158.0
158.5

158.3
157.6
159.5
160.2

155.6
156.7
158.1
158.8

156.3
157.3
159.0
159.9

1983:
I
II
Ill
IV
1984:
I
II
Ill
IV P.

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.
* Current dollar gross domestic product divided by constant dollar gross domestic product.
Source: Department of Labor, Bureau of Labor Statistics.




278

TABLE B-41.—Changes in productivity and related data, business sector, 1948-84
[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]
Output per hour
of all persons
Year or quarter

Nonfarm
business

1948...
1949...

5.3
1.5

4.3
2.0

1950...
1951...
1952...
1953...
1954...

7.9
2.8
3.2
3.2
1.6

1955
1956
1957
1958
1959

4.0
1.0
2.5
3.1
3.2

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 P.
1982:
\
\\.
Ill
IV

Unit tabor costs

per hour

0.7
-3.3

1.6
-3.8

8.5
1.6

8.6
2.9

0.7
2.6

0.8
3.9

6.0
1.7
2.3
1.7
1.4

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
17
4.1
5.7
2.8

4.8

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
4.4

2.5
6.5
6.5
4.4
4,3

3.6
6.0
57
3.8
4.0

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

3.5
3.1
2.3
3.3

3.1
2.5
1.9
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
17
2.6

3.7
3.4

3.9
7.0
5.3
7.8
7.0

3.6
3.5
2.6
-2.4

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

2.2
3.3
2.4
-L2

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

-.5
1.9

-.7
1.5

27
3.6

3.5
3.1

-1.2
2.5
-2.6
4.4

-1.4
2.1
-2.6
5.0
8.5

2.5
-1.6
3.6
1.1

-3.6
-2.6
-1.3
-1.2

-3.8
-1.4

4.4
8.1
2.1
1.0

4.4
12.4
9.3
7.8

6.0
14.3
8.7
9.1

11.4
11.2
1.8
4.3

10.3
10.6
7
3.9

.a

2.4
2.7

III
IV

Implicit price
deflator*

Nonfarm
Nonfarm
Nonfarm
Nonfarm
Nonfarm
Nonfarm
sector business sector fusiness sector
sector business sector business sector business
sector
sector
sector
sector
sector
6.0
-1.9
9.4
6.5
3.4
4.2
-2.0

\\Z"ZZ

\\ZZZZ.

Compensation per
hour 3

Hours of 2all
persons

6.1
-1.9
9.1
5.8
3.3
4.3
-1.8

1983:

1984:

Output'

4.0
4.9
.6
2.6

l!

4.1
.9

7.0
-1.0

6.8
.9

3.2
4.8
2.7

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

17
6.6
1.8
2.0
1.4

2.8
4.9
2.9
1.6
3.5

3.9
4.4
2.2
1.0
3.2

-1.4
5.5
3.9
1.3
1.0

-.3
57
3.9
1.4
.6

1.6
3.3
3.5
1.3
2.0

2.2
3.5
3.6
.9
2.3

4.3
3.2
4.0
3.5
4.5

2.6
2.7
3.4
2.5
3.8

27
2.1
2.8
2.2
3.2

2.7
.5
,7
0

3.5
.3
.4

1.4
.6
1.5
1.1
1.0

1.5
.6
1.5
1.2
1.2

2.2
4.0
2.4
3.5
1.5

17
3.0
2.6
3.2
1.1

.3
3.8
3.0
4.4
67

3,5
3.5
4,1
6.8

1.9
3.0
27
4.0
4.9

1.6
2.8
3.2
4.0
4.7

7.3
6.6
6.5
8.0
9.4

3.4
6.0
5.5
7.5
. 6.5
7.0
6.6
67
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

4.8
4.5
3.0
3.8
10.2

-4.1
3.4
4.4
5.1
37

9.6
8.5
7.7
8.5
9.4

9.6
8.1
7,5
8.6
9.0

.5
2.6
1.2
.8
-1.7

22
1.0
.8
-2,0

7.3
5.1
5.1
8.0
107

7.5
4.7
5.2
8.0
107

9.8
4.7
5.6
7.5
9.0

10.3
5.1
57
7.1
8.8

-7
.6
-2.8
1.6
5.0

-.6
.6
-2.8
1.5
5.2

10.4
9.4
8.1
4.3
47

10.3
9.6
8.0
4.9
4.6

-27
-.9
1.9
1.1
.4

-2.8

11.0
7.3
7.9
1.6
1.1

11.1
8.0
77
1.4
1.5

9.3
9.6
5.3
3.0
3.2

10.0
9.8
5.7
3.2
3.1

-5.9
-.3
-3.6
-3.8

i

107
6.8
7.5
4.5

67
1.3

6.5

80
9.4
5.0
1.7

7.9
7.6
37
4.0

37
5.4
2.3
1.8

3.8
5.7
2.0
2.4

l!o

3.9
.4

2^0
3.2
-1.3

111
4.3

-3.6
-4.0

is

4.4
2.2
2.0
6.1

2.2
6.1
6.4
6.2

~17
1.6
.3

5.4

-1:9
6.1
3.7
3.6
3.5

4.6
2.2
2.7
3.7

2.2
-3.5
-.8
4.6
2.1
-2.9
3.7
1.5

3.1
-1.7
4.7
1.8

2.8
2.8
4.2
2.5

Ill
IV p
» 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.
8
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.




279

PRODUCTION AND BUSINESS ACTIVITY
TABLE B-42.—Industrial production indexes, major industry divisions, 1929-84
[1967^100; monthly data seasonally adjusted]

1984:
Jan
Feb
Mr
a
Apr
May
June...,
July
Aug
Sept
Ot
c
Nov*
Dec"

Min

Ittill

Total

Durable

Nondurable

ig
n

ties

100.00

..
.

. ..
.

87.95

51.98

35.97

6.36

5.69

216
13.7
21.7
25.0
316
36.3
44.0
47 4
40.7
35 0
39.4
411
38.8
44 9
48.7
50 6
54.8
519
58.5
611
619
57 9
64.8
66.2
66.7
72 2
76.5
817
89.8
97.8
1000
106.3
111.1
107 8
109.6
119 7
129.8
129 3
117 8
130.5
138 2
146.1
152.5
147 0
1510
138.6
147 6
163.5

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
1984 '
1983:
Jan
Feb
Mar
Apr
May .
June
July
Aug
Sept
Oct .
Nv
o
Dec

Manufacturing

Total
industrial
production

Year or month

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
515
58.2
60 5
61.2
57 0
64.2
65.4
65.6
715
75.8
81.0
89.7
97.9
100 0
106.4
111.0
106 4
108.2
118 9
129.8
1294
1163
130.3
138 4
146.8
153.6
146 7
150 4
137.6
148 2
165.0

22.5
91
.
17.7
23.5
314
39.9
54.2
599
45.2
316
37.7
39 3
35.7
43 5
48.9
519
58.7
518
59.2
611
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
127.1
125 7
109 3
122.3
130 0
139.7
146.4
136 7
140 5
124.7
134 5
154.7

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
1264
141.8
150.5
156.9
164.0
161.2
164.8
156.2
1681
179.8

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 6
125.9

74
.
67
.
10.7
13.3
14.9
16.5
17.5
17.8
18.6
20.1
22.4
23.9
27.2
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 4
180.7

137.4
138.1
140.0
142.6
144.4
146.4
149.7
151.8
153.8
155.0
155.3
156.2

136.7
138.2
140.4
143.1
145.1
147.4,
150.6
152.8
155.1
156.2
156.4
156.8

122.5
123.9
126.3
129.1
131.0
133.2
136.8
138.8
141.6
142.8
143.6
145.0

157.4
159.0
160.7
163.3
165.4
167.8
170.6
172.9
174.6
175.6
174.8
173.9

121.9
115.6
112.6
111.6
112.8
112.6
115.0
116.1
117.1
118.3
121.1
123.7

163.1
162.0
165.8
169.3
169.7
169.8
176.0
179.3
179.3
176.5
176.3
182.5

158.5
160.0
160.8
1621
162 8
164.4
165.9
166.0
165.0
164.5
165 2
166.2

159.5
161.4
162.1
163 4
164 2
165.7
167.3
167.6
166.6
166.4
1671
168.1

148.6
150.5
151.4
152 6
153 3
154.9
157.2
157.8
157.1
157.0
157 6
158.3

175.2
177.2
177.6
179.1
179 9
181.3
181.8
181.7
180.3
180.0
180.7
182.3

124.8
124.1
123.8
123 3
125 0
127.0
129.9
128.3
128.7
123.8
125 4
126.7

181.0
176.5
180.0
182.7
182.3
184.3
181.8
180.6
180.9
180.5
180 5
178.8

Source: Board of Governors of the Federal Reserve System.




280

11.8

TABLE B-43.—Industrial production indexes, market groupings, 1947-84
[1967=100; monthly data seasonally adjusted]
Materials2

Final products

Year or month

Total
industrial
production

Equipmen t

Consumer goods *
Total
Total

Automotive
products

Home
goods

Total

Business

Intermediate
De- products
fense
and
space

Durable
goods

Nondurable
goods

10.47

100.00

1947
1948
1949

47.82

27.68

2.83

5.06

20.14

12.63

7.51

12.89

39.29

20.35

39.4

1967 proportion

38.6
40.0
38.8

42.4
43.7
43.4

45.3
47 4
47.0

37.5

38.0
39 5
34.5

10.3

41.9

443

39.5

412

38 3

36.2

30.6
32 2
28.7

12.7

42.0

37.6

35.3

49.6
49.1
50.2
53.2
52.9
59.0
61.2
62.6
62.1
68.1

59.1
52.3

31.1
43.3
51.9
56.3
49.3
50.4
55.3
57.5
51.5
56.5

37.0
45.2
51.2
53.3
46.8
50.8
58.8
61.1
51.5
57.9

14.9
36.6
51.4
61.6
54.2
49.7
48.5
50.7
50.9
53.7

48.8
51.3
50.9
54.5
54.3
61.7
64.4
64.4
63.0
69.5

45.0
49.8
50,5
56.1
51.8
61.3
62.8
62.8
56.5
65.2

44.4
50.5

59.5
55.4
73.6
60.6
63.5
50.5
63.3

49.9
43.0
43.0
48.6
44.9
53.0
55.7
54.5
51.4
59.0

59.4
57.7
62.7
65.8
73.7
84,4

55.1
56.0
64.9
69.9
67.7
74.9
88.1
100.0
108.2
104.0

70.0
71.4

66.1
66.2
72.1
76.7
82,9
92.4
100.7
100.0
106.5
112.5

64.8
63 3
70.4

411
38.8

391

121

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

44.9
48.7

54.8
51.9
58.5
61.1
61.9
57.9
64.8

43.7
47.2
50.7
54.1
51.3
55.4
58.6
60.3
57.6
63.2

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

66.2
66.7
72,2
76.5
81.7
89.8
97.8
100.0
106.3
111.1

65.3
65.8
71.4
75.5
79.7
87.6
95.9
100.0
106.2
109.6

70.7
72.2
77.1
81.3
85.9
92.6
97.3
100.0
105.9
109.8

72.5
66.1
80.1
87.7
91.9
113.3
112.8
100.0
119.4
118.1

59.4
61.3
66.5
71.8
78.4
88.9
97.9
100.0
106.4
113.2

58.1
57.3
63.7
67.5
71.4
80.7
94.0
100.0
106.5
109.3

100.0
105.5
112.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

107 8
109.6
119.7
129.8
129.3
117 8
130.5
138 2
146.1
152.5

105.3
1063
115.7
124.4
125.1
1182
127.6
135.9
142.2
147.2

109.0
114.7
124.4
131.5
128.9
124 0
137.1
145.3
149.1
150.8

98 8
124.4
141.4
153.0
132.8
125 8
155.7
1756
179.9
167.7

110.2
115.6
129.5
142.5
136.8
118 8
134.1
1419
147.7
149.2

100.1
94.7
103.8
114.5
120.0
1102
114.6
123 0
132.8
142.2

107.0
104.1
118.0
134.2
142.4
128.2
135.4
147.8
160.3
171.3

88.5
78.8
79.9
81.4
82.4

1980
1981
1982
1983
1984 "

147.0
151.0
138.6
147.6
163.5

145.3
149.5
141.5
147.1
162.7

145.4
147.9
142.6
151.7
161.8

1328
137.9
129.5
158.2
181.4

138.9
142.0
129.1
141.4
151.5

145.2
151.8
139.8
140.8
163.8

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

149.7
151.8
153.8
155.0
155.3
156.2

149.0
150.7
152.1
152.7
153.2
155.2

154.8
156.3
157.3
156.9
156.1
157.7

167.0
168.1
172.9
171.3
171.5
178.4

144.9
146.4
148.8
148.4
147.2
147.5

158.5
160.0
160.8
1621
162.8
164.4

157.5
158.0
158.6
160.2
161.1
163.1
165.2
165.1
164.6
165.2
166.0
167.0

159.5
159.4
160.2
161.4
161.7
163.0

184.5
182.1
184.1
1809
179.8
184.3

151.5
151.5
151.3
151.7
151.1
152,0

163.8
162.5
161.6
161.8
162.8
163.7

185 0
181.8
173.0
171.3
184.2
186.5

151.8
151.9
152.0
151.3
150.2
150.9

506

1983:
Jan

Feb
Mar

Apr

May
June
July
Aug
sepr I:::::::::::::::::::::::::
oct .:..:::..:
Nov

Dec

1984:
Jan
Feb

Mr
a

Apr

May
June
Julv
Aug
Sept

OcfV .
No
Dec

Total

p

•.

165 9
166.0
165.0
164.5
165.2
166.2

471

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




281

977

757

79.9
85.2
90.6
96.2
100.0
106.3
112.9

394

516

60.3
52.0

637

63.9
63.8
53.7
64.0

751

45 9
52.5
54 9

547

54.4
62.1
63.2
65 8
71.3
75 6
82.2

81.9
93 8
103.3
100.0
106.2
112.1

97.5
100.0
108.8
1157
1154
120.2
132.9
142.2
142.6
1266
147.8
155.6
165.6
175.9

903

109.2
111.3
122.3
133.9

n?4

79.8
81.3
86.5
93.4

112.9
116.7
126.5
137.2
135.3
1231
137.2
145.1
154.1
160.5

1155
131.7
138.6
148.3
156.4

1038
104.9
1177
134.6
132.7
109.1
128.0
136.1
149.0
157.8

173.2
181.1
157.9
153.3
180.7

98.2
102.7
109.4
119.9
135.5

151.9
154.4
143.3
156.6
172.5

147.6
151.6
133.7
145.2
161.5

143.0
149.1
125.0
138.6
161.8

171.5
174.6
157.5
174.5
185.0

116.4
1161
117.0
118.2
117.6
118.0
120.4
120.2
121.8
122.9
124.0
125.7

1437
145 3
147.8
150.8
152.2
154.5
158.1
162.2
165.4
166.5
165.5
165.4

132.0
134 9
137.6
139.7
1417
143.7
147.8
1497
152.2
154.0
154.5
154.5

121.5
125.3
128.7
132.4
1347
137.0

159.7
164.0
167.5
168.7
172.1
174.3

141.0
143.1
144.9
147.0
149.1
151.8

146.6
142 7
143.7
146.9
1477
150.2
153.3
156.6
1587
161.3
164.1
167.3

141.1
144.2
147.4
149.4
150.3
151.3

177.0
178.0
182.3
185.3
184.8
180.3

154.9
156.1
156.4
158.5
160.3
163.3
167.0
168.7
168.9
170.0
170.2
171.6

1707
171.9
172.1
173.5
176.5
181.1
185.5
187.6
186.4
187.1
187.1
188.5

128.3
129.5
130.1
133.2
133.1
133.5
135.9
136.8
139.5
141.1
141.8
143.8

167.8
169.0
170.2
171.0
171.6
173.5

156.6
159.4
160.4
161.5
162.0
162.9
163.5
164.0
162.8
1607
161.5
162.3

154.6
158.6
159.5
161.3
161.6
163.0

181.2
184.1
185.9
1857
187.4
186.7

164.2
165.3
164.3
163.0
163.0
163.3

186.5
186.7
184.0
182.5
184.6
186.5

800

175.8
175.1
173.0
173.7
173.7
174.7

TABLE B-44.—Industrial production indexes, selected manufactures, 1947-84
[1967-100; monthly data seasonally adjusted}

Durable manufactures
Primary
metals
Year or month
Total

1967 proportion..

Electrical
machinery

Total

9.15

8.05

39.0
39.2
33.4

22.2
23.0
21.6

9.27
31.8
34.8
34.9

70.1
93.2
91.5
88.2
66.5
76.5

56.1
59.9
58.5
66.0
59.4
67.8
68.8
70.6
63.3
71.0

37.5
47.7
51.9
54.0
46.1
50.6
58.0
57.9
48.6
56.7

29.6
29.8
34.0
39.0
34.7
39.9
43.1
42.8
39.2
47.6

41.8
46.6
54.2
68.0
59.2
68.0
66.0
70.7
55.8
63.2

777
74.2
77.3
84.3
95.9
105.2
108.4
100.0
103.2
112.6

71.1
69.4
75.4
77.8
82.6
90.8
97.2
100.0
105.6
107.9

56.9
55.4
62.1
66.3
75.6
85.0
98.8
100.0
101.8
109.3

51.6
54.8
62.9
64.7
68.4
81.7
97.9
100.0
105.5
111.9

104.7
96.1
107.1
122.3
119.8
95.8
104.8
103.8
113.2
113.2

102.4
103.5
112.1
124.7
124.2
109.9
123.9
131.0
141.6
148.5

104.4
100.2
116.0
133.7
140.1
125.1
134.5
143.6
153.6
163.7

102.3
107.9
75.3
85.4
95.1

92.4
99.8
61.7
71.5
79.7

134.1
136.4
114.8
120.2
137.6

73.1
77.9
81.2
83.1
84.9
84.8

59.0
64.3
66.9
68.5
69.5
69.7

85.5
87.5

Motor
vehicles
and
parts

Chemicals
and
products

8.75

3.31

4.72
43.3
45.4
46.6

21.3
21.0

55.8
55,2
55.9

60.5
81.2
65.8
69.0
51.0
66.2

65.7
65.5
64.7
68.4
68.0
75,9
75.0
68.8
69.9
79.3

64.3
63.1
66.3
67.2
66.4
73.3
75.0
74.9
72.8
80.1

48.9
49.7
49.7
52.0
54.1
59.5
63.2
65.4
63.9
68.2

26.2
29.7
31.1
33.6
34.1
39.8
42.7
45.2
46.6
54.3

57.9
59.0
60.2
61.4
62.7
66.3
70.1
71.1
72.9
76.5

65.4
61.5
71.1
78,0
80.0
95.1
102.0
100.0
111.1
108.4

74.7
65.5
79.8
88.3
90.7
115.9
113.9
100.0
120.3
116.5

74.7
78.2
82.5
86.3
92.7
96.3
100.0
100.0
105.5
107.9

81.7
82.2
85.5
89.1
92.2
97.4
99.9
100.0
102.9
106.7

71.0
71.3
73.9
77.8
82.6
87.9
94.6
100.0
103.2
107.4

56.4
59.2
65.7
71.8
78.8
87.8
95.7
100.0
109.5
118.4

78.6
80.9
83.4
86.4
90.4
92.4
96.0
100.0
102.6
106.1

108.1
107.7
122.2
143.1
143.8
116.5
134.8
145.4
159.4
175.0

89.5
97.9
108.2
118.3
108,7
97.4
111.1
122.2
132.5
135.4

92.3
118.6
135.8
148.8
128.2
111.1
142.0
161.1
169.9
159.9

105.6
113.8
120.8
126.0
116.2
107.6
123.2
131.2
136.3
136.9

101.4
104.7
109.4
117.3
114.3
107.6
125.7
134.2
134.2
134.4

107.0
107.1
112.7
118.2
118.2
113.3
122.5
127.6
131.5
136.9

120.4
125.9
143.6
154.5
159.4
147.2
170.9
185.7
197.4
211.8

108.9
112.8
116.8
120.9
124.0
123.4
133.0
138.8
142.7
147.5

162.8
171.2
149.0
150.6
181.2

172.8
178.4
169.3
185.5
217.5

116.9
116.1
104.9
117.8
137.7

119.0
122.3
109.8
137.1
165.9

119.3
119.1
112.6
137.2
149.2

127.0
120.4

139.6
144.2
144.1
152.5
169.6

207.1
215.6
196.1
215.0
229.0

149.6
152.1
151.1
156.4
163.7

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

113.9
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

92.2
90.4

71.8
75.1
78.2
84.3
79.2
74.1

122.7
126.0
127.4
126.9
128.5
129.2

154.2
157.3
158.3
159.2
161.8
164.3

188.3
189.2
195.8
198.4
200.1
201.5

119.7
121.1
124.7
125.5
127.3
130.8

142.3
144.3
150.9
150.9
152.9
158.9

141.3
141.6
142.3
141.7
141.0
143.8

152.0
157.8
161.7
162.7
162.0
161.7

218.3
220.3
224.1
228.4
225.6
221.1

159.9
159.3
158.2
157.6
157.1
157.7

June...

93.2
98.4
97.5
99.3
98.2
97.9

80.7
86.0
84.4
84.0
83.5
83.5

131.7
132.8
134.9
135.5
136.5
138.7

169.5
170.9
171.9
174.9
178.8
182.0

206.2
209.9
212.0
214.6
214.5
216.0

134.9
135.2
135.8
134.5
135.0
137.2

166.3
164.4
165.8
161.9
163.0
165.3

146.0
145.6
149.3
151.2
146.3
148.5

163.4
164.8
165.2
166,3
167.5
169.0

221.5
224.8
225.0
228.3
227.9
231.0

159.4
160.0
161.2
163.1
164.2
165.1

July
Aug
Sept....
Oct.
Nov...
Dec"...

94.5
94.4
94.1
93.0
90.5
88.9

76.5
77.7
77.5
75.6
72.9

140.6
140.0
139.5
140.7
139.6
140.9

186.9
189.1
187.9
187.2
186.4
187.1

221.5
221.5
222.8
221.9
224.0
224.7

140.6
141.0
137.6
137.1
141.8
142.8

169.0
169.6
162.4
161.6
171.4
172.6

146.0
148.8
149.2
152.6
152.4

172.6
173.1
170.5
172.2
173.9
173.5

232.0
231.6
230.8
229.5
230.5

164.9
164.7
164.3
165.0




282

7.74
19.7

Foods

57.8
60.3
59.7

Source: Board of Governors of the Federal Reserve System.

4.50

Lumber Apparel Printing
and
and
prod- publishproducts
ucts
ing

1.64

MayJune..
July...,
Aug..,
Sept..,
Oct..,
Nov....
Dec...
1984:
Jan..,..
Feb....
Mar..

5.93
49.9
50.8
45.8

63.3
65.8
55.4
69.7
75.8
69.2
78.5
63.5
82.5
82.0
78.5
62.3
72.7
72.4
71.1
76.3
82.3
92.8
102.1
108.4
100.0
104.3
113.8
106.6
100.2
112.1
126.7
123.1
96.4
109.7
111.1
119.9
121.3

4.21

Nonelectrical
machinery

58.9
61.3
54.1

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
1984 P..
1983:
Jan
Feb..
Mar..

6.57

Iron
and
steel

Fabricated
metal
products

Nondurable manufactures
Transportation
equipment

TABLE B-45.—Capacity utilization rate, 1948-84

[Percent; quarterly data seasonally adjusted]
Manufacturing!

Year or quarter

Total
industry

Total

Durable
goods

Nondurable
goods

Primary
processing

Advanced
processing

1948
1949

82.5
74.2

87.2
76.2

82 8
85.8

88 5
90.2
84.9
89 4
80.6

87.1

Industrial
materials

79 8
83.4
85 9

1955
1956
1957
1958
1959

Utilities

80.0

1950
1951
1952
1953
1954

Mining

854
892

80.3

893

80.1

92.1
89.7
84.7
75.4
83.4

83.7
75.2
81.9
80 2
77.4

816

83.5
85.6

84.3
84,5
83.1
75.1
81.1

79.8
77.9
81.6
83.8
87.8

864

I960
1961
1962
1963
1964

73.3

80 4
77.2
81.7
83.4
84.6

87.3
86.8

87.1
87.2
85.9

86.8
87.1
87.0

91.1
91.4
85.7
87.7
88.5

88.9

86.9
87.2
86.3

87.7
86.9
85.2

83.9
86.0

92 4
94.2
95.6

87.3
88.3

1970
1971
1972
1973
1974

80.9
79.8
84.4
88.1
84.3

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
88.1
84,7

82.9
82.3
88.1
92.4
87.8

77.6
76,4
81.0
85.0
81.5

88.5
86.4
89.1
90.2
90.2

94.8
92.8
94.0
92.9
86.9

82.4
81.4
86.9
917
87.0

1975
1976
1977
1978
1979

74.4
80.4
82.6
84.8
85.9

72.9
79.6
82.2
84.7
86.0

70.3
77.1
8M
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
78.2
80.9
82.9
84.0

87.6
87.7
87.8
87.9
85.2

84.3
84.9
84.9
84.5
85.2

73.3
81.1
82 6
85.6
87.6

1980
1981
1982
1983
1984 P

80.2
80.2
72.1
75.3
81.6

79.6
79.4
71.1
75.2
81.7

77.8
78.2
68.2
72.4
81.5

81.8
81.1
74.8
78.8
82.1

80.3
80.8
68.9
75.8
81.8

79.2
78.7
72.3
74.9
81.7

86.4
88.6
76.6
70.5
75.8

84.7
83.4
81.9
81.9
83.6

80.4
80 7
70.1
75.2
82.1

84.3
79.1
77.4
80.3

83.8
78.3
764
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

88.0
86.9
84 4
86.7

84.9
84.1
85 8
84.0

86.2
79.2
75 6
80.6

81.4
81.3
81.0
77.0

80.6
80.8
80.3
75.9

79.2
79.8
79.2
74.3

82.4
82.0
81.8
78.0

83.5
82.6
81.9
75.2

79.1
79.7
79.4
76.3

90.2
861
90.4
88.1

82.9
84.1
84.1
82.5

82.7
819
82,0
76.2

74.2
72.6
71.7
69.8

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

86.2
78.3
71.1
70.9

83.4
82.9
81.3
80.1

73.0
70.7
69.4
67.1

71.2
73.9
77.3
78.8

70.7
73.8
77.4
78.9

67.2
70.7
74.7
76.9

75.1
77.8
80,7
81.3

70,5
74.6
78.3
79.9

71.1
73.5
76.9
78.2

70.6
67.9
70.2
73.1

78.5
80.8
84.4
84.0

70.1
73.5
77,5
79.6

80.5
81.7
82.4
81.7

80.7
81.8
82.5
81.9

79.9
81.2
82.6
82.2

81.6
82.5
82.4
81.6

81.7
82.4
81.9
81.4

80.3
81.4
82.8
82.1

75.0
75.4
77.7
75.3

83.8
85.0
83.5
82.4

81.6
82.7
82.9
81.4

89.6

1965
1966
1967
1968
1969

869

911

912

815

859

1980:
II
III
IV
1981:
||
Ill
IV
1982:
1
II
III

IV
1983:
||
Ill

. ...

iv!!!
1984:

if ""."".'.".
HI
IV"

Source: Board of Governors of the Federal Reserve System.




283

TABLE B-46.—New construction activity, 1929-84
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]
Public construction

Private construction
Year or month

Total
new
construction

Nonresidential buildings and other
construction»

Residential
buildings1
Total
Total

2

New
housing
units
3.0

Total
4.7

Total

Commercial3

Industrial

Other*

1.1

0.9

2.6

Federal State and
local5

0.2

1929

10.8

8.3

3.6

1933

2.9

1.2

.5

1939

8.2

4.4

2.7

1.7

3.8

1940
1941
1942
1943
1944

8.7
12.0
14.1
8.3
5.3

5.1
6.2
3.4
2.0
2.2

3.0
3.5
1.7
.9

2.1
2.7
1.7
1.1
1.4

3.6
5.8
10.7
6.3
3.1

1.2
3.8
9.3
5.6
2.5

1945
1946

5.8
14.3

3.4
12.1

2.1
5.8

2.4
2.2

1.7
.9

1947
1948
1949

20.0
26.1
26.7

16.7
21.4
20.5

9.9
13.1
12.4

7.8
10.5
10.0

6.9
8.2
8.0

1.0
1.4
1.2

1.7
1.4
1.0

4.2
5.5
5.9

3.3
4.7
6.3

1.2
1.5

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
1.5
1.1
1.8
2.2

1.1
2.1
2.3
2.2
2.0

6.1
6.7
6.8
7.3
7.2

6.9
9.3
10.8
11.2
11.7

1.6
3.0
4.2
4.1
3.4

1955
1956
1957
1958
1959

46.5
47.6
49.1
50.0
55.4

34.8
34.9
35.1
34.6
39.3

21.9
20.2
19.0
19.8
24.3

18.2
16.1
14.7
15.4
19.2

12.9
14.7
16.1
14.8
15.1

3.2
3.6
3.6
3.6
3.9

2.4
3.1
3.6
2.4
2.1

7.3
8.0
9.0
8.8
9.0

11.7
12.7
14.1
15.5
16.1

2.8
2.7
3.0
3.4
3.7

1960
1961
1962
1963
1964

54.7
56.4
60.2
64.8
68.0

38.9
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

15.9
16.2
17.2
17.6
19.7

4.2
4.7
5.1
5.0
5.4

2.9
2.8
2.8
2.9
3.6

8.9
8.7
9.2
9.7
10.7

15.9
17.1
17.9
19.4
20.4

3.6
3.9
3.9
4.0
3.9

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

21.7
19.4
19.0
24.0
25.9

24.1
27.1
27.3
29.3
33.1

7.8
9.4

6.0
6.8

15.5
16.9

22.1
24.0
25.5
27.6
28.0

4.0
4.0
3.5
3.4
3.3

1970
1971
1972
1973
1974

95.2
110.3
124.4
138.4
139.2

67.1
80.4
94.2
105.9
100.9

31.9
43.3
54.3
59.7
50.4

24.3
35.1
44.9
50.1
40.6

35.3
37.2
40.0
46.2
50.5

9.8
11.6
13.5
15.5
15.9

6.5
5.4
4.7
6.2
7.9

19.0
20.1
21.8
24.5
26.7

28.1
29.9
30,2
32.5
38.3

3.3
4.0
4.4
4.9
5.3

1975
1976
1977
1978
1979

135.9
151.1
173.8
205.6
230.4

95.1
112.0
135.7
159.7
181.6

46.5
60.5
81.0
93.4
99.0

34.4
47.3
65.7
75.8
78.6

48.6
51.4
54.7
66.2
82.6

12.8
12.8
14.8
18.6
24.9

8.0
7.2
77
11.0
15.0

27.8
31.5
32.2
36.7
42.7

40.9
39.1
38.2
45.9
48.8

6.3
7.0
7.3
8.4
8.6

1980
1981
1982
1983
1984 ".

230.7
239.1
230.1
262.2
311.9

175.7
185.8
179.1
211.4
256.2

87.3
86.6
74.8
111.7
135.1

63.1
62.7
51.9
86.1
102.8

99.2
104.3
99.6
121.0

29.9
34.2
37.3
35.8
49.4

13.8
17.0
17.3
12.9
14.5

44.7
47.9
49.7
51.0
57.2

55.0
53.3
51.0
50.8
55.8

9.6
10.4
10.1
10.6
11.2

2.5
1.6

New series

See next page for continuation of table.




284

TABLE B-46.—New construction activity, 1929-84—Continued
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]
Private construction
new
construction

Year or month

Nonresidential buildings and other
construction'

Residential
buildings'
Total
Total2

1983:
J3n
Feb

New
housing
units

Total
Total

Commercial 3

Industrial

151

Federal

Other*

State and
local*

244 8
245.0
243 2
248.7
254.9
264.1

July
Aug
Sept
Oct

Nov

Dec
1934:
Jan
Feb

Mar

Apr
May
June
... .

Aug
Sept

Oct

Novp.
Dec p

90 7
95.6
98 5
103.5
108.5
113.7

64.3
70.2
73 8
78.6
83.2
88.2

100.3
99.7
967
96.5
96.7
99.4

36.4
35.0
34 0
33.4
33.5
34.8

48.8
50.9
49.1
50.2
50.3
51.4

53.8
49.7
48 0
48.7
49.7
51.0

10.6
10.3
10 5
10.6
10.2
9.9

431

13.8
13 6
13.0
12.8
13.3

220 2
224.7
229 6
219.2
217 4
213.3

120 9
126.8
128 6
118.6
113 5
109.7

91.2
93.9
93 8
94.2
94 9
95.0

99.3
97.9
1010
100.6
104 0
103.6

35 6
36.4
37.2
37.4
381
37.4

13 0
13.6
12 6
10.4
116
12.2

50.7
47.9
51.3
52.8
54.2
54.0

52.0
53.3
52.1
48.8
49 6
50.6

11.3
10.9
109
10.0
10.4'
11.5

40 7
42.3
412
38.8
39 2
39.1

280.9
3004
309.7
3086
316.4
315.3

ivfay

June

1910
195.3
195 2
200.1
205.2
213.1

272 3
278.0
2817
267.9
267 0
263.9

Apr

July

Public construction

230.0
2481
255.0
2541
261.2
257.8

121.9
137 4
141.1
136 6
138.4
136.4

96.9
102.3
102.4
102.7
106.4
105.0

108.0
110 7
113.9
117 5
122.8
121.4

41.1
421
45.3
47 4
49.7
48.9

12.9
14 0
14.4
136
15.2
14.1

54.1
54.7
54.2
56.5
57.9
58.4

50.9
52 3
54.8
54 5
55.2
57.5

10.2
10 6
10.9
111
11.2
11.8

40.8
417
43.8
434
44.0
45.7

314.2
318.0
318.7
317.9
316 0
318.7

258 2
261.2
260 9
261.2
259 8
262.8

137 8
138.9
1371
135.2
132 2
130.4

104.6
105.0
103.2
103.4
102.1
100.8

120.4
122.2
123.8
126.0
127 6
132.3

48.4
49.5
50.9
53.5
546
58.2

13.8
14.6
14.9
14.9
15 4
15.7

58.2
58.1
58.0
57.5
57.7
58.5

560
56.9
57.8
56.7
561
56.0

10.5
11.3
12.1
11.3
11.5
11.3

45.4
45.6
45.7
45.4
44.6
44.7

39.4
37 6
38.1
39.5
41.1

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.




285

TABLE B-47.—New bousing units started and authorized, 1959-84
[Thousands of units]
New housing units started

New private housing units authorized*

Private and public 1
Year or month

Private (farm and nonfarm) 1

Total
(farm and Nonfarm
nonfarm)

Type of structure
Total

lunit

2 to 4
units

2to4
units

5 units
or more

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

88.1
132.9
148.6
117,0
64.3

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

109.5
91.1
80.0
113.5
121.8

330.5
287.7
319.6
522.0
543.0

1,190.6
985.5
1,000.5
1,605.2
1,645.4

710.4
564.3
546.4
901.5
893.6

114.5
101.8
88.3
133.6
140.0

365,7
319.4
365.8
570.1
611.9

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
888.1

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
1,712.5
1,751.0

1,292.2
1,084.2
1,062.2
1,703.0
1,744.7

1980...
1981...
1982...
1983...
1984".

1 unit
1,208.3

1,553.7

1960...
1961...
1962...
1963...
1964...

1

Total

5 units
or more

283.0

1959...

1975...
1976...
1977...
1978...
1979...

Type of structure

662.6
1,067.6
1,079.9

257.4
338.7
471.5
590.8
108.4
450.0

616.7

885.7

Seasonally adjusted annual rates
1983:

Jan
Feb
Mar
Apr

fay....

June....
July
Aug

Si
Nov
Dec
1984:

Jan
Feb
Mar

nday".'.'.;

June....
July
Aug
Sept....

Oc?

Nov
Dec...

92,9
96.7
135.8
136.4
175.5
173.8

1,632
1,706
1,592
1,549
1,779
1,743

1,087
1,066
1,016
1,030
1,150
1,124

97
116
103
113
102
118

448
524
473
406
527
501

1,431
1,456
1,492
1,556
1,660
1,764

862
831
859
860
943
1,010

118
115
124
138
136
141

451
510
509
558
581
613

161.9
177.8
156.8
159.9
136.4
108.5

1,793
1,873
1,679
1,672
1,730
1,694

1,048
1,124
1,038
1,017
1,074
1,021

127
109
115
96
130
13
3

618
640
526

930
900
864
905
919
913

138
132
130

526
540

1,752
1,671
1,540
1,650
1,649
1,602

141
143

684
639
546
601
589
546

109.3
130.4
138.1
173.0
182.2
184.3

1,980
2,262
1,662
2,015
1,794
1,877

1,301
1,463
1,071
1,196
1,131
1,084

114
137
169
116
107

565
651
454
650
547
686

1,799
1,902
1,727
1,758
1,745
1,768

989
1,083
974
957
913
916

155
151
162
155
163
151

655
668
591
646
669
701

163.1
147.8
149.6
152.7
123.7
96.9

1,754
1,554
1,683
1,535
1,554
1,587

990
932
1,016
964
1,009
1,064

118
113
109
106
124
122

646
509
558
465
421
401

1,565
1,506
1,440
1,418
1,591
1,588

823
803
841
794
824
822

138
140
122
116
138
123

604
563
477
508
629
643

18
4

59
5

14
4

1
Units in structures built by private developers for sale 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.




286

TABLE B-48.—Business expenditures for new plant and equipment, 1947-8$
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Industries surveyed quarterly
Manufacturing
Year or quarter

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
1984*
1985 «
1983:
|

|
|
HI
IV
1984:
|
|
|
HI 4

IV

Addenda

Non manufacturing

Nonmanufacturing
Total
nonCom- farm ManuSur- SurDura- NonTrans- Public
ble durable Total * Min- portation utili- mercial busi-2 facturing Total veyed veyed
ing
and
quar- annuties other ness
goods goods
terly ally9

All
industries

Total

19.64
22.27
19.78
21.07
26.26
27.59
29.35
28.36
3044
37.41
40.05
33.46
35.49
39.08
3802
40.53
43.33
50.90
5915
70.00
72.35
75 95
85.25
91.37
92.26
102.73
118.54
137.20
138.28
150 91
174.68
203.54
240.22
264.44
289.37
282.71
269.22
307.59
333.40

8.73
9.25
7 32
7.73
1107
12.12
12 43
12.00
12 50
16.33
17 50
12.98
13.76
16.36
15 53
16.03
17 27
21.23
2541
31.37
32 25
32 34
36 27
36.99
33 60
35.42
42.37
53.21
54 92
5995
69.22
79 72
98.68
115.81
126 79
119.68
111.53
131.01
146.25

3.39
3.54
2.67
3.22
5.12
5.75
5.71
5.49
5.87
8.19
8.59
6.21
6.72
8.28
7 43
7.81
8.64
10.98
13.49
17.23
17.83
17 93
19.97
19.80
16.78
18.22
22.75
27.44
26.33
28 47
34.04
4043
51.07
58.91
61.84
56.44
51.78
63.02
71.79

5.34
5.71
4.64
4.51
5.95
6.37
6.72
6.51
6.62
8.15
8.91
6.77
7.04
8.08
8.10
8.22
8.63
10.25
11.92
14.15
14.42
14 40
16.31
17.19
16.82
17.20
19.62
25.76
28.59
3147
35.18
39.29
47.61
56.90
64.95
63.23
59.75
67.99
74.46

10.91
13.02
12.47
13.34
15.19
15.47
16.92
16.36
17.94
21.08
22.54
20.47
21,73
22.73
22.48
24.50
26.06
29.67
33.75
38.62
40.10
43.62
48.98
54.38
58.66
67.31
76.17
83.99
83.36
90.96
105.46
123.82
141.54
148.63
162.58
163.03
157.69
176.58
187.15

261.71
261.16
270.05
283.96

109.86
108.79
111.12
116.36

50.74
48.48
53.06
54.85

59.12
60.31
58.06
61.50

293.15
302.70
31311
321.40

122.78
127.67
134 49
139.09

58.94
60.20
65.44
67.49

63.84
67.46
69.06
71.60

337.85 146.00
344.86 151.23

71.09
74.36

74.91 191.85 12.57
76.87 193.63 13.04

0.69
.93
.88

2.21
2.66
2.30
2.38
3.05
2.99
2.97
2.42
2.60
3.07
3.35
2.34
3.17
3.19

21.80
25.46
23.54
25.32
30.83
31.59
33.58
33.13
36.58
44.76
48.12
42.17
44.78
48.63
47 82
51.28
53.25
61.66
70 43
82.22
83.42
88 45
99.52
105.61
108.53
120.25
137.70
156.98
157 71
17145
198.08
23124
270.46
295.63
32149
316.43
302.50

8.73 13.07 10.91
9.25 16.21 13.02
7.32 16.22 12.47
7.73 17.59 13.34
11.07 19.76 15.19
12.12 19.47 15.47
12.43 21.16 16.92
12.00 21.13 16.36
12 50 24.08 17 94
16.33 28.43 21.08
17.50 30.62 22 54
12.98 29.19 20.47
13.76 31.02 21.73
16.36 32.28 22.73
15 53 32 29 22 48
16.03 35.25 24.50
17 27 35 99 26 06
21.23 40.43 29.67
25 41 45 02 33 75
31.37 50.84 38.62
32.25 51.18 4010
32 34 5611 4362
36.27 63.25 48.98
36.99 68.62 54.38
33.60 74.93 58.66
35.42 84.82 67.31
42.37 95.33 76.17
53.21 103.78 83.99
54.92 102.79 83.36
59 95 11150 9096
69.22 128.87 105.46
79 72 15152 12382
98.68 17177 141.54
115.81 179.81 148.63
12679 194 70 162.58
119.68 196.75 163.03
111.53 190.97 157.69
131.01
176.58
146.25
187.15

9.24
10.21
11.38
13.51
16.86
15.45
11.83
12.90
13.54

3.26
3.36
4.46
5.46
6.43
6.34
6.79
7.04
6.95
5.93
6.72
7.41
8.23
8.68
8 89
9.40
10 68
12.35
12.09
12 05
11.95
1120
12.91
13.52

6.38
1.64
6.77
2.67
6.01
3.28
6.70
3.42
7.29
3.75
7.31
3.96
8.09
4.61
8.42
4.23
9.77
4.26
4.78 11.59
5.95 11.56
5.74 10.97
5.46 11.74
5.40 12.85
5.20 13.21
5.12 14.71
5.33 16.11
5.80 18.08
6.49 20.44
7.82 22.96
9.33 23.06
10.52 24.88
11.70 28.47
13.03 32.39
14.70 35.36
16.26 41.45
17.97 47.49
19.83 51.31
19.98 48.60
22 37 52 27
26.79 60.03
2995 72 99
33.96 83.85
35.44 87.59
38.40 95.27
41.95 93.68
42.00 92.67
44.17 106.61
44.82 115.28

151.85
152.38
158.93
167.60

12.03
10.91
11.93
12.43

11.04
10.88
11.00
11.86

41.61 87.17
41.48 89.10
42.22 93.79
42.69 100.62

109 86
108.79
111.12
116.36

15185
152.38
158.93
167.60

170.37
175.03
178.61
182.31

13.95
12.13
12.61
12.92

11.46
12.95
13 65
13.56

43.62
44.61
44.75
43.70

101.35
105.35
107.61
112.12

122.78
127.67
134 49
139.09

170.37
175.03
178.61
182.31

13.00 45.21 121.07
13.47 46.20 120.93

146.00
151.23

191.85
193.63

.4
8
1.11
1.21
1.25
1.29
1.31
1.64
1.69
1.43
1.35
1.29
1.26
1.41
1.26
1.33
1.36
1.42
1.38
1.44
1.77
2.02
2.67
2.88
3.31
4.62
6.10

744

282

2.16
3.19
3 76
4 25
4 57
4.00
4 23
4.76
614
7.35
8 08
8.72
9.29
9 55
9 80
1075
9 93
10.76
1127
12.22
1107
12 50
14 27
14.24
1626
17.51
19.16
19.78
1943
20 54
23.40
27 70
30.24
31.18
3212
33.72
3328

1985:
|4
||*

1
Excludes forestry, fisheries, and agricultural services; medical services; professional services; social services and membership
organizations; and real estate, which, effective with the April-May 1984 survey, are no longer surveyed quarterly. See last column
("nonmanufacturing surveyed annually") for data for these industries.
2
"All industries plus the part of nonmanufacturing that is surveyed annually.
3
Consists of forestry, fisheries, and agricultural services; medical services; professional services; social services and membership
organizations; and real estate.
4
Planned capital expenditures as reported by business in late October and November 1984, corrected for biases.
Note.—For details about the reduced industry coverage of the plant and equipment survey, see Survey of Current Business, January 1984.
Source: Department of Commerce, Bureau of Economic Analysis.




287

TABLE B-49.—Sales and inventories in manufacturing and trade 1947-84
[Amounts in millions of dollars; monthly data seasonally adjusted]
Total manufacturing and
trade

Manufacturing

Retail trade

Merchant wholesalers

Year or month
Sales1

Inventories2

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
260,263
297,565

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
351,055
398,459
449,542

1.62
1.58
1.49
1.41
1.45
1.57
1.48
1.46
1.44
1.43

327,113
355,762
343,504
367,096

491,431
523,623
505,546
514,336

345,890
342,742
348,227
351,012
360,488
368,971
370,181
373,283
379,229
382,457
386,564
395,682
401,133
398,815
401,905
405,880
412,725
414,124
411,410
411,176
410,505
410,621
414,833

Sales1

Invento-

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

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
189,214
210,385
240,942

1.58
1.57
1.75

1.45
1.43
1.50
1.37

154,391
168,129
159,193
170,617
189,442

264,089
282,059
264,599
260,426
285,808

502,209
503,043
499,370
500,263
501,035
500,615
501,379
504,284
506,984
509,171
511,453
514,336

1.45
1.47
1.43
1.43
1.39
1.36
1.35
1.35
1.34
1.33
1.32
1.30

159,020
158,184
161,809
162,997
166,603
171,756
171,408
174,112
177,521
177,324
180,875
186,352

261,901
261,042
257,803
257,748
258,281
257,661
257,699
259,074
259,168
259,569
259,873
260,426

1.50
1.49
1.46
1.46
1.44
1.40

518,062
527,216
532,766
541,060
545,912
546,834
551,366
556,519
560,430
563,810
564,506

1.29
1.32
1.33
1.33
1.32
1.32

184,406
185,005
188,479
187,332
189,376
190,401
190,658
192,006
190,151
190,521
191,978
193,549

260,884
264,074
267,379
270,392
274,593
277,481
280,019
283,525
285,185
286,426
285,833
285,808

1.41
1.43
1.42
1.44
1.45
1.46
1.47
1.48
1.50
1.50
1.49
1.48

Ratio »

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

1.34
1.35
1.37
1.37
1.36

1
2
3

Sales 1

Invento- Ratio3
ries2

Sales1

Invento- Ratio s
ries2

10,200 14,241
11,135 16,007
11,149 15,470
12,268 19,460
13,046 21,050
13,529 21,031
14,091 21,488
14,095 20,926
15,321 22,769
15,811 23,402
16,667 24,451
16,696 24,113
17,951 25,305
18,294 26,813
18,249 26,221
19,630 27,941
20,556 29,386
21,823 31,094
23,677 34,405
25,330 38,073
24,413 35,299
27,030 38,945
28,893 42,517
30,700 43,867
33,853 50,063
37,422 55,079
42,462 63,237
45,082 71,067
49,012 71,744
54,781 79,273
60,435 89,530
67,242 102,504
74,948 110,592

1.26
1.39
1.41

7,695
8,597
8,782
9,052
8,993
9,893
10,513
10,475
10,257
11,491
11,656
11,988
12,674
13,382
14,529
15,611
16,987
19,448
20,846
22,609
23,943
26,257
29,584
38,014
47,748
46,623
50,694
55,987
66,117
78,680

7,957
7,706
9,284
9,886
10,210
10,686
10,637
11,678
13,260
12,730
12,739
13,879
14,120
14,488
14,936
16,048
17,000
18,317
20,765
24,833
26,134
28,624
32,038
35,045
38,633
45,372
56,948
56,697
64,078
72,311
85,568
98,008

1.66
1.64
1.73
1.52
1.46

92,658
100,673
94,765
98,649

111,792
115,854
115,563
118,067

1.14
1.13
1.23
1.17

80,064
86,960
89,547
97,831
107,985

115,550
125,710
125,384
135,843

1.41
1.39
1.39
1.33

1.65
1.65
1.59
1.58
1.55
1.50

94,344
92,347
92,614
92,890
96,646
98,577
99,941
100,894
102,171
104,210
103,793
106,892

115,030
114,425
114,569
114,902
113,557
113,172
114,124
114,227
115,674
116,825
116,958
118,067

1.22
1.24
1.24
1.24
1.17
1.15
1.14
1.13
1.13
1.12
1.13
1.10

92,526
92,211
93,804
95,125
97,239
98,638
98,832
98,277
99,537
100,923
101,896
102,438

125,278
127,576
126,998
127,613
129,197
129,782
129,556
130,983
132,142
132,777
134,622
135,843

1.35
1.38
1.35
1.34
1.33
1.32
1.31
1.33
1.33
1.32
1.32
1.33

110,125
108,328
109,553
111,043
115,112
114,401
113,310
112,564
112,114
111,367
111,955

119,201
120,411
121,477
123,785
124,368
123,994
126,227
126,676
128,205
128,723
129,578

1.08
1.11
1.11
Ul
1.08
1.08
1.11
1.13
1.14
1.16
1.16

106,602
105,482
103,873
107,505
108,237
109,322
107,442
106,606
108,240
108,733
110,900
110,815

137,977
142,731
143,910
146,883
146,951
145,359
145,120
146,318
147,040
148,661
149,095

1.29
1.35
1.39
1.37
1.36
1.33
1.35
1.37
1.36
1.37
1.34

1.48
1.66
1.78
1.76
1.81
1.62
1.73
1.80
1.84
1.70
1.75
1.74
1.70
1.69
1.64
1.60
1.62
1.76
1.74
1.77
1.90
1.83
1.67
1.58
1.65
1.84
1.69
1.61
1.57
1.57

6,808
6,514

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

1.38
1.64
1.52
1.53
1.51
1.43
1.47
1.44
1.43
1.40
1.45
1.43
1.38
1.39
1.40
1.39
1.44
1.43
1.38
1.41
1.41
1.41
1.40
1.40
1.48
1.44
1.38
1.40
1.43
1.44

Monthly average for year and total for month.
Seasonally adjusted, end of period.
Inventory/sales ratio. For annual periods, ratio of weighted 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 all business, and show inventories in terms of current book
value without adjustment for revaluation.
Source: Department of Commerce, Bureau of the Census.




288

TABLE B-50.—Manufacturers*shipments

and inventories, 1947-84

[Millions of dollars; monthly data seasonally adjusted]
Shipmentsl
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

Nondurable
goods
industries

Total

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
30,879 15,883
30,923 15,616
33,357 17,262
35,058 18,280
37,331 19,637
40,995 22,221
44,870 24,649
46,487 25,267
50,228 27,659
53,501 29,437
52,805 28,188
55,906 29,954
63,023 34,024
72,937 39,686
84,794 44,228
86,595 43,656
98,802 50,689
113,202 59,267
126,905 67,848
143,936 76,060
154,391 77,550
168,129 83,872
159,193 76,859
170,617 85,126
189,442 98,639

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
85,491
90,802

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
189,214
210,385
240,942
264,089
282,059
264,599
260,426
285,808

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
121,601
137,825
160,451
174,552
186,053
175,009
171,571
191,168

159,020
158,184
161,809
162,997
166,603
171,756
171,408
174,112
177,521
177,324
180,875
186,352

78,005
77,896
79,653
80,124
82,011
85,594
85,076
86,730
88,963
89,181
92,311
96,351

81,015
80,288
82,156
82,873
84,592
86,162
86,332
87,382
88,558
88,143
88,564
90,001

261,901
261,042
257,803
257,748
258,281
257,661
257,699
259,074
259,168
259,569
259,873
260,426

184,406
185,005
188,479
187,332
189,376
190,401
190,658
192,006
190,151
190,521
191,978
193,549

95,283
96,297
96,990
95,697
97,944
99,042
98,390
101,035
98,943
100,427
101,778
101,826

89,123 260,884
88,708 264,074
91,489 267,379
91,635 270,392
91,432 274,593
91,359 277,481
92,268 280,019
90,971 283,525
91,208 285,185
90,094 286,426
90,200 285,833
91,723 285,808

Durable
Total

industries

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

.

1984 P.....

1983:

Jan
Feb
Mar

jfc
June...
{y

Aug
Sept....
Oct
Nov
Dec
1984:
Jan
Feb
Mar
June....
July
Aug
Sept....
Ori
Nov
Dec"...

Inventories2
Durable goods industries
Materials and
supplies

Total

Nondurable goods industries

Finished

Total

Materials and
supplies

Work
in
proc-

8,317
8,167
8,556
3,971
8,775
8,662
9,080
9,082
9,493
9,813
9,978
10,131

2,472
2,440
2,571
2>21
2,864
2,828
2,944
2,946
3,110
3296
3,406
3,511

13,325
15,489
16,455
17,376
18,693
19,182
19,759
20,860
26,028
35,151
33,920 43,369
37,548 46,345
40,251 50,620
45,185 58,669
52,606 69,277
55,077 77,002
57,859 80,977
52,475 77,724
51,640 77,372
56,439 88,439

9,245
9,063
9,662
9,925
10,344
10,854
12,491
13,547
14,163
15,639
17,751
17,880
18,601
19,823
23,985
25,586
28,690
30,730
33,971
38,568
42,473
47,217
44,810
42,559
46,290

12,836
13,881
13,261
15,539
18,315
17,405
18,070
17,902
18,664
20,195
20,143
19,983
20,868
21,409
22,341
23,554
24,180
24,903
25,928
28,032
29,659
31,743
33,463
34,871
36,368
37,988
43,230
56,053
57,060
62,612
67,613
72,560
80,491
89,537
96,006
89,590
88,855
94,640

10,448
11,155
11,715
12,289
12,724
13,150
13,683
14,676
18,132
23,699
23,542
25,833
27,398
29,308
32,447
36,176
37,661
35,074
36,066
36,702

3,806
4,204
4,421
4,848
5422
5,274
5,665
5,982
6,707
8,175
8,837
9,933
11,003
11,922
13,759
15,745
16,051
14,309
14,485
14,696

172,844
172,079
170,144
170,368
171,065
170,154
169,679
170,283
170,084
170,219
170,656
171,571

51,561
51,231
50,426
50,548
50,805
50,564
50,206
50,759
50,821
50,909
51,174
51,640

44,114
43,973
43.534
43,543
43,508
43,379
43,284
43,189
42,862
42,522
42,900
42,559

89,057
88,963
87,659
87,380
87,216
87,507
88,020
88,791
89,084
89,350
89,217
88,855

34,956 14,377
34,853 14,456
34,632 14,221
34,472 14,369
34,411 14,211
34,736 14,266
34,606 14,468
35,394 14,441
35,731 14,490
35,682 14,647
35,558 14,841
36,066 14,485

171,549
173,203
175,751
177,993
180,578
182,452
184,559
187,142
188,915
190,476
190,428
191,168

51,910 77,058
52,228 78,173
52,866 79,926
53,072 81,465
53,967 82,658
54,420 83,863
55,339 84,765
56,089 86,034
56,578 86,916
56,652 87,849
56,009 88,102
56,439

8,966
7,894
9,194
10,417
10,608
10,032
10,776
10,353
10,279
10,810
11,068
11,970

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
process

289

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

77,169
76,875
76,184
76,277
76,752
76,211
76,189
76,335
76,401
76,788
76,582
77,372

6,206
6,040
6,348
7,565
8,125
7,839
8,239

42,581 89,335
42,802 90.871
42,959 91,628
43,456 92,399
43,953 94,015
44,169 95,029
44,455 95,460
45,019 96,383
45,421 96,270
45,975 95,950
46,317 95,405
46,290 94,640

36,486
37,063
36,956
36,931
37,642
37,495
37,618
37,643
37,648
37,435
37,250
36,702

14,656
14,739
14,759
14,862
15,022
15,160
15,038
15,239
14,958
14,962
14,834

TABLE B-51.—Manufacturers' new and unfilled orders, 1947-84
[Amounts in millions of dollars; monthly data seasonally adjusted]
Unfilled orders-shipments
ratio»

Unfilled orders2

New orders l
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

1983
1984"....
1983:

Jan
Feb
Mar..

June..
July...
Aug...
Sept..
Oct....
Nov...
Dec...

Nondurable

Total

Durable
goods
industries

Nondurable

5,894
4117
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

Total

8,622
10,971
12,673
11,011
12,791
15,291
19,458
23,231
23,259
24,050
20,681
22,764
26,854

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
40,409
43,122
48,129
53,950
59,207
67,953
76,801
84,199
82,260
85,627
90,750

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
158,884
188,467
172,037
180,562
203,475
259,755
301,982
323,312
318,794
296,147
330,122
356,059

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
151,504
182,925
164,139
172,273
195,008
249,461
290,750
312,564
308,767
287,014
319,303
345,861

7,898
8,288
8,467
10,294
11,232

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
3.86
4.13
3.76
3.30
3.27
3.59
3.87

10,748
10,027
9,133
10,819
10,198

3.80
3.76
374
3.37
3.41

81,837
77,515
79,801
82,865
83,286
89,460
87,878
88,820
91,509
94,776
97,991
98,444

20,482
19,172
20,131
21,960
21,849
23,827
22,060
22,887
25,295
25,499
24,680
24,893

81,011
80,329
82,567
83,004
84,804
86,417
86,573
87,540
88,827
88,135
88,615
89,930

299,976
299,636
300,195
303,067
304,554
308,675
311,718
313,967
316,782
322,369
328,099
330,122

290,847
290,466
290,614
293,355
294,630
298,496
301,298
303,389
305,935
311,530
317,209
319,303

9,129
9,170
9,581
9,712
9,924
10,179
10,420
10,578
10,847
10,839
10,890
10,819

99,439
102,345
105,183
98,317
102,256
99,171
101,704
102,015
98,676
96,067
104,037
101,002

25,093
27,018
26,860
25,885
28,958
28,029
27,648
26,499
27,835
25,378
27,126
25,501

89,232
88,991
91,294
91,398
91,424
91,449
92,333
90,563
91,141
89,789
90,131
91,843

334,385
340,725
348,717
351,099
355,398
355,625
358,990
359,564
359,232
354,566
356,756
356,059

323,457
329,512
337,702
340,320
344,631
344,765
348,065
349,048
348,782
344,422
346,678
345,861

10,928
11,213
11,015
10,779
10,767
10,860
10,925
10,516
10,450
10,144
10,078
10,198

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
76,056
87,244
85,220
99,532
115,032
131,546
147,403
156,161
167,761
157,389
173,433
191,599

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
42,726
46,835
42,099
51,403
61,082
72,339
79,451
79,360
83,562
75,129
87,806
100,849

162,848
157,844
162,368
165,869
168,090
175,877
174,451
176,360
180,336
182,911
186,606
188,374
188,671
191,336
196,477
189,715
193,680
190,620
194,037
192,578
189.817
185,856
194,168
192,845

15,256
17,693
15,614
20,110
23,907
23,204
23,586
22,335

Capital
goods
industries,
nondefense

6,903
7,660
6,738

7,m

3.42

Nondurable
goods
industries industries
Durable
goods

4.12
4.27
4.55
4.00
3.69
3.54

0.96
1.12
1.04
.85
.86
.94

3.37
3.13
3.24
3.37
3.72
3.95
4.55
4.40
4.65
4.50
4.39
4.06
3.90
4.56
4.96
4.52
3.94
3.89
4.21
4.60
4.54
4.56
4.63
4.08
4.12

.72
.79
.68
.73
.72

.77
.77
.88
.93
.64
.84
.76
.70
.78
.76
.67
.59
.53
.55
.50

3.67
3.70
3.61
3.63

4.53
4.56
4.43
4.46
4.41
4.28

.52
.53
.54
.55
.55
.55

3.54
3.53
3.48
3.51
3.47
3.37

4.33
4.32
4.23
4.28
4.22
4.08

.56
.56
.58
.56
.56
.55

3.47
3.51
3.55
3.59
3.55
3.49
3.55
3.51
3.52
3.43
3.44
3.41

4.23
4.26
4.30
4.38
4.33
4.25

.55
.56
.55
.54
.52
.52

4.33
4.27
4.28
4.18
4.16
4.12

.53
.51
.51
.49
.49
.50

.80
.76
.73

1984:

Jan
Feb
Mar....

June...

at
Nov
Dec

1
Monthly average for year and total for month.
* Seasonally adjusted, end of period.
3
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.
Note.—Data beginning 1958 are not strictly comparable with earlier data.
Source: Department of Commerce, Bureau of the Census.




290

PRICES
TABLE B-52.—Consumer price indexes, major expenditure classes, 1946-84
[1967=100]
Food and
beverages
Year or
month

All
items

Total 1

Food

Housing

Total 2

HouseOther
hold
Trans- Medical Enterand
Fuel and furnishand
other
ings
upkeep portation care tainment
Shelter
services
utilities 3
and
operation 2

Energy3

58.5
66.9
72.1
71.4

58.1
70.6
76.6
73.5

60.6
65.2
69.8
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

72.1
77.8
79.5
80.1
80.5
80.2
81.4
84.3

74.5
82.8
84.3
83.0
82.8
81.6
82.2
84.9
88.5
87.1

72.8
77.2
78.7
80.8
81.7
82.3
83.6
86.2
87.7
88.6

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

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

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

100.0
103.6
108.8

88.0
89.1
89.9
91.2
92.4
94.4
99.1
100.0
103.6
108.9

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

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

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

114.7
118.3
123.2
139.5
158.7
172.1
177.4
188.0
206.3
228.5

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
202.8
227.6

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
1967

107.0
111.2
114.3
123.5
159.7
176.6
189.3
207.3
220.4
275.9

1980....
1981
1982
1983
1984....
1983:
Jan..
Feb
Mar

246.8
272.4
289.1
298.4
311.1

248.0
267.3
278.2
284.4
295.1

254.6
274.6
285.7
291.7
302.9

263.3
293.5
314.7
323.1
336.5

281.7
314.7
337.0
344.8
361.7

278.6
319.2
350.8
370.3
387.3

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
242.5

178.4
186.9
191.8
196.5
200.2

249.7
280.0
291.5
298.4
311.7

265.9
254.5
328.7
357.3
379.5

205.3
221.4
235.8
246.0
255.1

214.5
235.7
259.9
288.3
307J

361.1
410.0
416.1
419.3
423.6

June...

293.1
293.2
293.4
295.5
297.1
298.1

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

July
Aug
Sept...
Oci
Nov
Dec

299.3
300.3
301.8
302.6
303.1
303.5

284.7
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
239.4
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

305.2
306.6
307.3
308.8
309.7
310.7

291.6
294.2
294.3
294.5
293.6
294.3

299.4
302.1
302.2
302.3
301.4
302.0

329.2
331.0
331.5
333.2
334.6
336.2

353.2
354.0
355.5
357.8
358.9
360.2

376.0
383.0
380.1
380.9
385.5
390.0

240.4
240.4
241.2
242.3
242.4
242.3

196.4
196.2
198.8
199.2
198.9
197.4

306.0
305.8
306.9
309.6
312.2
313.1

369.5
373.2
374.5
375.7
376.8
378.0

249.9
251.5
251.7
2538
253.5
254.5

300.5
301.5
302.1
302.8
303.2
304.4

416.7
420.2
418.1
421.3
426.1
428.5

1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

1984:
Jan
Feb
Mar

fc

393.9
241.9
255.3
312.9 380.3
196.6
311.7
295.3 303.2 338.1 362.7
306.5
428.3
June...
395.5
242.2 200.1
256.4
312.9 381.9
296.9 304.8 339.5 364.6
313.0
307.2
427.3
July
397.0
244.1 204.2
366.5
314.6
257.3
313.7
314.5 296.4 304.2 341.4
429.0
383.1
Aug
315.8
392.4
244.3 205.7
367.8
426.7
258.3
315.5 385.5
315.3 296.6 304.4 341.2
Sept....
316.5
421.8
387.5
244.2 205.2
259.0
316.1 i 387.5
315.3 296.3 304.1 340.9 368.9
Oct
316.7
418.9
386.0
244.2 203.2
370.1
260.1
315.8
315.5 297.2 305.1 341.2
388.5
Nov
Dec
1
Includes alcoholic beverages, not shown separately.
2
Series beginning 1967 not comparable with series for earlier years.
3
See tables B-53 and 8-54.
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.




291

TABLE B-53.—Consumer price indexes, selected expenditure classes, 1946-84
[1967=100]
Food and beverages

Shelter

Year or month
Total
Total

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
1984
1983:
Jan
Feb
Mar
June
July
Aug
Sept
Oct
Nov
Dec
1984:
Jan....
Feb....
Mar..
June...
July....
Aug....
Sept...
Oct...,
Nov...,
Dec...,

home

58.1
70.6
76.6
73.5

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
248.0
267.3
278.2
284.4
295.1

77.6
86.3
87.8
86.2
85.8
84.1
84.4
87,2
91.0
88.8

Away
from
home

Total

Rent,
Total residential

88.0 89.6
89.1 90.4
89.9 91.0
91.2 92.2
92.4 93.2
94.4 95.5
99.1 100.3
100.0 100.0
103.6 103.2
108.9 108.2

Household fuels
Homeowners'
costs

Maintenance
and

Total
Total

Fuel oil,
coal,
and
bottled

Gas
(piped)
and
electricity

51.3
58.4
68.6
70.3

77.4
77.1
79.1
81.0

83.0
83.5
85.1
87.3
89.9
91.7
93.8

72.7
76.5
78.0
81.5
81.2
82.3
85.9
90.3
88.7
89.8

Other
utilities
and
public
services

81.2
81.5
82.6
84.2
85.3
87.5
88.4
89.3
92.4
94.7

76,5
78.2
79.1
80.4
83.4
85.1
86.0

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

81.4
87.8
83.2 88.5
85.4 89.6
87.3 90.7
88.9
92.2
90.9 93.8
95.1 96.8
100.0 100,0
105.2 104.8
1U.6 113.3

91.7
92.9
94.0
95.0
95.9
96.9
98.2
100.0
102.4
105.7

84.6 95.9
85.9 97.1
86.5 97.3
87.7
98.2
89.5 98.4
91.3 98.3
95.2 98.8
100.0 100.0 100.0
106.1 101.3 101.4
115.0 103.6 103.4

89.2
91.0
91.5
93.2
92.7
94.6
97.0
100.0
103.1
105.6

98.6
99.4
99.4
99.4
99.4
99.4
99.6
100.0
100.9
102.8

100.0
101.2
104.0

73.5
79.8
76.7

74.5
82.8
84.3
83.0
82.8
81.6
82.2
84.9
88.5
87.1

Fuel and other utilities

Renters' costs

Food

68.9
70.1
70.8
72.2
74.9
77.2
79.3

71.2
72.4
74.1
77.2
80.5
81.8
83.2

114.9
118.4
123.5
141.4
161.7
175.4
180.8
192.2
211.4
234.5

113.7
116.4
121.6
141.4
162.4
175.8
179.5
190.2
210.2
232.9

119.9
126.1
131.1
141.4
159.4
174.3
186.1
200.3
218.4
242.9

123.6
128.8
134.5
140.7
154.4
169.7
179.0
191.1
210.4
239.7

110.1
115.2
119.2
124.3
130.6
137.3
144.7
153.5
164.0
176.0

124.0
133.7
140.7
151.0
171.6
187.6
199.6
214.7
233.0
256.4

107.6
115.0
120.1
126.9
150.2
167.8
182.7
202.2
216.0
239.3

107.9
115.3
120.1
128.4
160.7
183.8
202.3
228.6
247.4
286.4

110.1
117.5
118.5
136.0
214.6
235.3
250.8
283.4
298.3
403.1

107.3
114,7
120.5
126.4
145.8
169.6
189.0
213.4
232.6
257.8

107.4
114.7
120.6
124.1
130.3
137.1
145,4
152.0
158.3
159.5

254.6
274.6
285.7
291.7
302.9

251.5
269.9
279.2
282.2
292.6

267.0
291.0
306.5
319.9
333.4

281.7
314.7
337.0
344.8 103.0
361.7 108.6

191.6
208.2
224.0
236.9
249.3

102.5
107.3

285.7
314.4
334.1
346.3
359.2

278.6
319.2
350.8
370.3
387.3

349.4
407.0
446.2
469.2
485.5

556.0
675.9
667.9
628.0
641.8

301.8
345.9
393.8
428.7
445.2

165.2
181.0
200,2
213.7
230.2

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

100.8
101.2
101.4
101.8
102.2
102.5
103.1
103.7
104.4
104.8
105.0
105.1

232.2
233.1
233.6
234.5
235.1
235.9
237.1
238.2
239.5
240.4
241.3
242.0

100.7
100.9
100.9
101.7
102.0
102.2

342.9
339.4
339.9
343.6
344.3
345.1

463.5
461.5
459.7
459.2
468.3
475.2

671.1
654.0
625.3
610.6
621.0
620.0

413.5
414.5
418.0
420.5
429.1
437.4

102.7
103.0
103.5
103.9
104.3
104.5

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

477.7
476.5
478.3
474.4
468.1
467.4

619.3
619.0
623.2
624.7
623.9
623.9

440.5
439.1
440.5
435.6
428.2
427.5

210.1
210.9
211.4
211.7
212.5
213.2
214.2
214,8
215.4
215.8
217.3
216.5

291.6
294.2
294.3
294.5
293.6
294.3

299.4
302.1
302.2
302.3
301.4
302.0

290.2
293.6
293.1
292.8
290.7
291.4

353.2 105.7
354.0 106.0
355.5 106.5
357.8 107.4
358.9 107.8
360.2 108.2

242.9
243.6
244.8
246.4
247.2
248.4

104.9
105.1
105.6
106.2
106.5
106.8

356.7
353.5
355.3
356.3
357.3
358.9

376.0
383.0
380.1
380.9
385.5
390.0

470.4
479.6
475.2
476.0
483.5
490.7

642.8
688.6
660.0
650.7
649.2
646.0

427.3
429.0
429.5
432.3
441.4
450.6

224.6
228.0
227.4
228.2
228.8
229.4

295.3
296.9
296.4
296.6
296.3
297.2

303.2
304.8
304.2
304.4
304.1
305.1

292.5
294.4
293.4
293.4
292.4
293.2

327.2
328.5
329.8
330.9
332.6
333.1
334.4
335.5
335.8
336.6
337.7
339.2

362.7 108.9
364.6 109.6
366.5 110.2
367.8 110.7
368.9 110.9
370.1 111.3

249.7
251.1
252.4
253.8
254.8
256.1

107.6
108.1
108.7
109.1
109.4
109.8

360.3
360.1
362.7
361.6
362.9
364.4

393.9
395.5
397.0
392.4
387.5
386.0

496.5
498.6
500.1
492.1
482.6
480.2

637.4
625.5
622.1
626.8
626.9
625.9

459.1
463.9
466.4
456.0
444.7
442.2

230.6
231.3
232.7
232.9
234.4
234.1

See next page for continuation of table.




292

TABLE B-53.—Consumer price indexes, selected expenditure classes,

1946-84—Continued

[1967=100]
Transportation

Medical care

Private transportation
Year or month
Total

Total2

New
cars

76 2
818
861
87.4

401
43 5
464
48.1

71.8
73.9
75.8
80.3
82.5
83.6
86.5
90.0
88.8
89.9

62.3
67.0
68.6
72.3
74.8
76.5
79.5
82.4
83.7
85.5

48.9
54.0
57.5
61.3
65.5
67.4
70.0
72.7
76.1
78.3

53 7
56.3
59.3
614
63.4
648
67.2
69.9
73.2
76.4

88 5
91.0
918
92 6
93.7
94 7
96.7
993
102,8
1044

49 2
51.7
55 0
57 0
587
604
62.8
655
68.7
72 0

83.6
86.9
94.8
96.0
100.1
99.4
97.0
100.0

92.5
91.4
91.9
91.8
91.4
94.9
97.0
100.0
101.4
104.7

87.2
89.3
90.4
91.6
92.8
94.5
96.2
100.0
105.5
112.2

100.0
103.4
109.7

81.0
84.6
87.4
88.5
90.1
91.9
95.2
100.0
104.6
112.7

79.1
814
83,5
856
87.3
89.5
93 4
100.0
106.1
113.4

104.5
1033
101.7
1008
100.5
100 2
1005
100.0
100 2
101.3

74.9
77 7
80.2
826
84.6
87 3
920
1000
107 3
116.0

107.6
112.0
111.0
111.1
117.5
127.6
135.7
142.9
153.8
166.0

104.3
110.2
110.5
117.6
122.6
146.4
167.9
182.8
186.5
201.0

105.6
106.3
107.6
118.1
159.9
170.8
177.9
188.2
196.3
265.6

120.6
129.2
135.1
142.2
156.8
176.6
189.7
203.7
220.6
242.6

119.2
128.4
129.1
127.8
132.4
141.2
163.1
177.3
184.6
198.6

128.5
137.7
143.4
144.8
148.0
158.6
174.2
182.4
187.8
200.3

1206
128.4
132.5
137 7
150.5
168.6
184.7
202.4
2194
239.7

103 6
105.4
105.6
105 9
109.6
1188
126.0
134.1
1435
153.8

124 2
133.3
1382
144 3
159.1
1791
197.1
216.7
235 4
258.3

249 2
277.5
287 5
293.9
306.6

179.3
190.2
197.6
202.6
208.5

2081
256.9
2964
329.7
375.7

369.1
410.9
389.4
376.4
370.7

268.3
293.6
315.8
330.0
341.5

222.6
241.3
257.8
260.8
273.3

251.6
312.0
346.0
362.6
385.2

265 9
294.5
3287
357.3
379.5

1681
186.5
2057
223.3
239.7

287 4
318.2
3560
387.0
410.3

293 0
289.9
287 4
292.3
296.2
298.3

288 4
285 2
282 7
287.5
2917
293.8

3110
3091
309 3
312.7
317.1
322.7

372-2
359.7
348 8
367.6
380.7
385.9

324.4
325.9
326.6
327.4
328.7
329.5

296.0
298.0
299.2
300 4
3017
301.8

329.6
336.8
343.9
3504
3561
357.6

389.0
389.4
387.0
382.5
3783
375.4

329.8
331.0
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
3513
352 3
353.5
354.3
355.4
357.7
360.0
361.2
362 9
3649
366.2

215 3
216 7
2186
221.2
222.5
223.2
224.2
225.4
226.3
227 5
2289
229.9

377 4
3815
382 2
382.8
383.5
384.6

300.4
302.4
303.7
3050
3063
306.3

201.0
201.3
201.2
201.1
201.6
201.6
201.4
202.1
202.7
204.3
206.2
207.0

387.2
389.8
3910
3929
3950
396.3

306.0
305.8
306 9
309.6
312.2
313.1
312 9
312.9
313.7
315.5
316.1
315.8

300 9
300 8
3019
304.8
307.4
308.1

207.2
207.2
207.2
207.4
207.6
207.7

357.3
357.2
3622
370.0
378.0
382.0

336.1
337.4
338.3
338.9
340.2
340.7

400 2
404 4
4053
406.3
407.1
408.4

383 2
383.8
384.2
384.6
3836
382.7

369.5
3732
374 5
3757
376.8
378.0
380 3
381.9
383.1
385.5
387.5
388.5

2312
232 9
235 0
236.9
238.7
239.4

208.1
208.1
208.2
209.6
211.4
212.0

267.6
267.7
268.3
269.0
270.4
271.5
272.4
274.9
275.9
278.7
280.7
282.3

378.2
377.4
377.4
378.0
380.7
385.2

307 5
307.5
3084
310 2
310 8
310.4

370.6
369.4
3691
374.3
376.9
375.2
3702
366.6
368.5
370.9
369.8
366.4

240 7
241.6
242.4
244.1
245 6
247.3

4109
412,7
413.9
416.5
418 5
419.3

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

68.2
72.5
77.3
79 5
78.3
77.4
78.8
83.3
86.0
89.6

72 5
75.8
80.8
82 4
80.3
78 9
80.1
847
87.4
91.1

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

89.6
90.6
92.5
93.0
94.3
95.9
97.2
100.0
103.2
107.2

90.6
91.3
93.0
934
94.7
96.3
97 5
100.0
103 0
106.5

104.5
104.5
104.1
103.5
103.2
100.9
99.1
100.0
102.8
104.4

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

112.7
118.6
119.9
123.8
137.7
150.6
165.5
177.2
185 5
212.0
2497
280.0
291.5
298.4
311.7

1111
116.6
117.5
1215
136.6
1498
164.6
176.6
185 0
212.3

AUE

Sept
Oct
Nov
Dec
1984:
Jan
Feb
Mr
a
Apr
May
June
Julv

AugZZZZZ
Oct
Nov
Dec

Medical
care
services

444
48.1
511
52.7

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

July

Medical
care
commodities

34.4
36.0
40.7
45.2

543
61.5
68 2
72,3

..

Other

Total

52.0
56.4
59.6
61.1

50 3
55.5
61.8
66.4

1983:
Jan
Feb
Mr
a
Apr
May
June

Motor
fuel 3

Public
transportation

549
62.2
70.4
72.3

1946
1947
1948
1949

1980
1981
1982
1983
1984

Used
cars

Automobile
maintenance
and
repair

89 2
75.9
71.8
69.1
77.4
80.2
89.5

1

341.6
342.7
344.2
345.3
345.8
346.2

389.3
390.8
389.5
391.1
3918
392.8

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 1978 are for all urban consumers,- earlier data are for urban wage earners and clerical workers.
See also Note, Table B-52.
2

3

Source: Department of Labor, Bureau of Labor Statistics.




293

TABLE B-54.—Consumer price indexes, commodities, services, and special groups,

1940-84

[1967=100]
Services

Commodities
Commodities less food
Year or
month

All
items

All
commodities

Food
All

Durable

UaAi

All
Nonservices
durable

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

42 0
441
48.8
518
52.7
53 9
58 5
66.9
721
71.4

406
43.3
49.6
540
54.7
563
62.4
75.0
80 4
78.3

352
38.4
45,1
503
49.6
50 7
58.1
70.6
76 6
73.5

48 0
504
56.0
584
61.6
641
68.1
76,8
82 7
81.5

48.1
514
584
60.3
65.9
70.9
741
80*3
86.2
874

44.7
467
51.6
53.8
56.6
58.6
629
72.2
77.8
76.3

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

72,1
77.8
79 5
80*. 1

78.8
85.9
87 0
867
85.9
851
85.9
88.6
90.6
90.7

74 5
82.8
84 3
83.0
82.8
816
82.2
84.9
88.5
87.1

814
87.5
88 3
885
87.5
869
87.8
90.5
91.5
92.7

88.4
95.1
964
95 7
93*3
91.5
91.5
94.4
95.9
97.3

Meatcat
care
services

Special indexes
Services
less
medical
care

All
items
less
food

All
items
less
energy

All
items
less
food
and
energy

Energy1

43.6
44 2
45.6
464
47.5
48.2
491
51.1
54.3
56.9
58.7
61.8
64 5
67*3
69.5
709
72.7
75.6
78.5
80.8

32.5
32.7
33.7
354
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

49.2
517
55 0
57.0
58.7
60.4
62.8
65.5
687
72.0

77.6
80.4
82.5

71.1
757
77 5
79.0
79.5
79.7
81.1
83.8
857
87.3

83.9
86.3
87.0

83.3
85.2
87.0

90.1
90.3
91.8

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
867
88.1
89.6
91.2
93.2
964
100.0
104.9
112.0

88.8
89.7
90.8
92.0
93.2
94.5
96.7
100.0
1044
110.1

883
89.3
904
916
92.9
94.3
97.3
100.0
104.4
110.3

88.3
89.3
90.5
916
93.0
94.3
96.6
100.0
104.6
1107

94.2
944
947
95 0
94.6
96.3
97.8
100.0
101.5
104,2

121.3
127 7
132.6
138.3
151.0
1647
177 7
190.6
2069
230*1

1167
122.1
125.8
130.7
143.7
1571
167.5
178.4
1912
213*0

117.0
1220
126.1
133 8
146.9
160.2
169 2
179.8
193 8
213*1

117.6
1231
126.9
1313
142*2
1553
165*5
175.8
188 7
207*0

107.0
1112
114.3
123 5
159.7
176.6
1893
207.3
2204
275*9

266 6
302.2
328.6
338.1
355.6

244.0
270.6
2884
298.3
311.3

2380
2617
279.3
289.3
302.9

2328
257,1
276.1
287.0
301.2

3611
410*0
416.1
419.3
423.6

292.6

281.1
282 0
282:6
284.0
2847
285.5
286.8
288.2
290.2
291.8
293.2
293.6

414.5
406 7
39^9
410.0
421.3
427.3
430.1
429.8
429.3
425.1
419.9
418.0

294 6
295*5
2967
298.3
299.3
300.2
301.3
302.8
304.9
306.1
306.9
307.3

416 7
420*2
418.1
421.3
426.1
428.5
428.3
427.3
429.0
426.7
421.8
418.9

91.5
92.0
92.8
93 6
94.6
95.7
98.2
100.0
103.7
1084

88.0
89.1
89.9
912
92.4
944
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

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

802
81.4
84.3
86.6
87.3
88.7
89.6
90.6
91.7
92.9
94.5
97.2
100.0
104.2
109.8
116.3
121.3
125.3
133.1
147.7
1612
170.5
181.5
1954
2174

76.2
82.0
824
83,1
83.5
83.5
85.3
87.6
88.2
89.3
907
91.2
91.8
92.7
93.5
94.8
97.0
100.0
104.1
108.8

113.5
1174
120.9
129.9
145.5
1584
1652
174.7
187 1
208.4

114.9
118 4
123.5
1414
161.7
1754
1808
192.2
2114
234.5

112.5
1168
119.4
123 5
136.6
1491
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
1517
1583
166.5
174 3
1987

121.6
1284
133.3
139.1
152.1
1666
1804
194.3
210 9
234*2

1980
1981
1982
1983
1984

246.8
2724
289.1
2984
311.1

233.9
253.6
263.8
271.5
280.7

254.6
274.6
285.7
291.7
302.9

222 0
241.2
250.9
259.0
267.0

2104
227.1
241.1
253.0
266.5

2352
257.5
261.6
266.3
270.8

2703
3057
333.3
344.9
363.0

124.2
133.3
138,2
144.3
159.1
1791
1971
2167
2354
258*3
287 4
318*2
356.0
387.0
410.3

293,1
293 2
2934
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
2924
292.0
292.0
292.2
292.6
292.9
292.5
293.9

254.4
253 2
2524
255.4
257.6
258.9
260.2
2614
262.9
263.6
264.1
263.8

247.3
2471
2474
248.7
249.5
251.2
252.9
254.3
2564
258.7
261.0
261.8

2624
260 5
25819
263.0
266.3
267.3
2684
269.6
270.6
270.2
269.5
268.5

337.9
338 9
3394
341.2
342.6
344.0
345.6
346.8
349.0
350.2
351.0
351.6

3822
382:8
383.5
384.6
387.2
389.8
391.0
392.9
395.0
396.3

331.4
332 2
3327
334.5
336.0
3374
338.9
339.9
342.2
343.3
344.1
344.5

296^
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

305.2
306.6
307,3
308.8
309.7
310.7
311.7
313.0
314.5
315.3
315.3
315.5

276.8
278.3
278.7
280.1
280.4
280.6
280.6
281.4
282.3
283.1
283.0
282.8

299,4
302.1
302.2
302.3
3014
302.0
303.2
304.8
304.2
304.4
304.1
305.1

263 0
263.8
264.4
266.5
2674
267.4
266.8
267.1
268.8
269.8
269.9
269.2

261.4
260.9
262.2
265.2
267.0
267.8
267.8
267.8
2687
269.3
270.0
269.8

267 4
269.1
269.3
270.7
271.1
270.5
269.5
270.0
272.3
273.6
273.3
272.2

353 9
355.3
356.5
358.1
359.9
361.9
364.5
366.5
368.9
3697
369.9
370.6

400 2
404.4
405.3
406.3
407.1
408.4
410.9
4127
413.9
416.5
418.5
419.3

3466
347.8
349.0
350.6
352.5
354.5
357.1
359.2
361.7
362.3
362.3
363.0

304 8
305.9
306.8
308.6
310.0
311.0
312.0
313.2
315.2
316.1
316.2
316.2

2970
298^
299.2
300.5
301.1
301.9
303.1
304.6
306.1
307.1
307.7
308.2

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

1983:
Jan
Feb
Mar
June
July
Aug
Sept
Oct.
Nov
Dec
1984:
Jan
Feb
Mar
May
June
July
Aug
Sept
Oct.
Nov
Dec

...

3774

2924

1
Fuel oil, coal, and bottled gas; gas (piped) and electricity; and motor fuel. Motor oil, coolant, etc. also included through 1982.
Note.—Oata beginning 1978 are for all urban consumers; earlier data are for urban wage earners and clerical workers.
See also Note, Table 6-52.
Source: Department of Labor, Bureau of Labor Statistics.




294

TABLE B-55.—Changes in special consumer price indexes, 1958-^84
[Percent change]
All items less
food

All items
Year or month

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
1984

Dec.
to
Dec 1

Year
to
year

Dec.
to
Dec.1

Year
to
year

All items less
food and
energy

All items less
energy
Year
to
year

Dec.
to
Dec*

All items less food,
energy, and shelter

Year
to
year

Dec
to
Dec 1

Dec
to
Dec 1

Year
to
year

27
.8
1.6
10
1.1
12
1.3
17
2.9
29
4.2

16
2.3
1.0
1.1
1.2
1.6
1.0
1.6
3.3
3.5
4.9

23
1.9
1.7
10
1.2
1.3
1.3
14
2.3
34
4.4

1.9
1.4
1.4
.8
1.2
1.8
1.3
1.9
3.5
3.1
4.9

29
.8
1.5
1.1
1.2
1.3
1.4
1.5
3.2
2.8
4.4

1.8
2.2
.8
1.5
1.1
1,8
1.2
L5
3.3
3.9
5.1

23
2.1
1.5
11
1.3
12
1.5
14
2.4
35
4.6

4.6

5.4

5.7

5.5

6.4

5.7

6.1

5,8

46

5.0

4.8

5.9

6.5

6.0

5.6

6.1

4.3

6.6

4.6

3.3

3.1

6.2

5.7

32

3.0
5.6
12.2

3.0
3.9
9.9

3.5
8.3
11.5

3.4
6.1
9.8

49

3.3
6.2
11.0

3.0
4.7
11.3

3.1
3.5
8.3

2.6
3.5
11.3

2.4
3.0
7.6

70

91

7.1

93

6.7

9.1

6.6

5.6

6.1

92

6.2

4.6

6.7

5.8

64

89

6.8
90
13.3

6.5
77
11.3

6.3
8.5
14.0

6.5
7.2
11.4

6.8
9.2
11.1

6.3
7.8
10.0

6.4
8.5
11.3

12.4

13.5

12.9

14.6
10.9

11.7

11.7
10.0

12.1

18
1.5
1.5
7
1.2
16
1.2
19
3.4
30
4.7
6.1
5.5
34
3.4
8.8
12.2
48

89
3.9
38
4.0

43

104
6.1
32
4.3

3.1

9.9
4.0
4.1
4.0

6.6
3.4
4.4

8.6
4.2
4.4
4.5

9.6
4.5
4.9
4.7

6.7
3.6
4.7

4.7

6.6
6.2
7.3

9.7
12.5
10.4

7.4
3.9
4.9

7.0

5.2
65

7.2
9.9
94
6.1
50
4.4

51

70
6.0
57

6.9
8.8
95
7.7
52
5.0

Change from preceding month
Seasonally
adjusted

Unadjusted

Seasonally
adjusted

Unadjusted

1983:
Jan
Feb
Mar

0.2
.0
1

0.3
-.1
1

0.2
0

May

5

'4

.8
.6

.4
3

.2
.4
4

Apr

June
July
Aug
Sept
Oct
Nov
Dec
1984:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec

.5
.4

0.3
-.1
- 0
.8
5
.3
.5
.4

Unadjusted

0.5
!3

\l
.2
.3
.4

Seasonally
adjusted

Unadjusted

0.5
.3
.2
.5
.2
.2
.4
.4

0.4

.1

.2

.0

.2

.2

.3

.1

0.3
.4
4

.4

.6

.6

.3

.4
.3

.4

.7

.7

.3

.3

.5
.3
.3

.5
.2

.6
.5

.6
.3
.2

2

.3
4

.3
5

5

4

.3
.4

.3
.4

.4
.5

2
.3
.4
.5

.3

.4
2

.4
.2

.2

*2

.4
.2

.1

.3
.0

.5
.5

.3

.6

8
.6

.5

4
.2

6

0

4

.2

1

.6

.4
.3

.4
.3

.4
.5

.3

.3

.3
.4

.7
.3
.1

.5

.3

.3
.4

.5
.5

.5
.3
.3
.4
.5

.'3
.3

7

.4
.3
3

0.5
.4
.3
.4
.2

.3
.4
.5

.3

0

.3

6

.7
.6

Seasonally
adjusted

Unadjusted

.5
.4
.5

.2

5
.2

.2

4
.5
.4

.5
.5

0.5
.3
.2
.5
.2
.3
.5
.5

4
,4
.4

5

4
.4
.4

.2
.5
.2

Seasonally
adjusted

0

.4
.3

.3

.5
.3
.3
.4

4
\2

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.
See also Note, Table B-52.
Source: Department of Labor, Bureau of Labor Statistics.




295

TABLE B-56.—Changes in consumer price indexes, 1929-84
{Percent change]

Year

Dec.
to
Dec.1

1929
0.2
5
1933
1939
—.5
1940
1.0
97
1941
1942 ".'.".. 9.3
32
1943
1944;;;;.
2.1
2.3
1945
18.2
1946
9.0
1947
2.7
1948
-1.8
1949
5.8
1950
59
1951
.9
1952!"!!
.6
1953
-.5
1954
.4
1955
2.9
1956
1957
3.0
1958
1.8
1959
1.5
1960
1.5
1961
.7
1962
1.2
1963
1.6
1964
1.2
1965
1.9
1966
3.4
1967
3.0
1968
4.7
1969
6.1
1970
5.5
1971
3.4
1972
3.4
1973
8.8
1974
12.2
1975
7.0
1976
4.8
1977
6.8
1978
9.0
1979
13.3
12.4
1980
1981
8.9
1982
3.9
1983
3.8
1984
4.0

Services

Commodities

All items
Year
to
year

Total
Dec.
to
Dec.1

Food

Year
to
year

o
51
-1.4
1.0
50
107
61
17
2.3
8.5
14.4
7.8
-1.0
1.0
79
2.1
.8
.5
-.4
1.5
3.6
2.7
.8
1.6
1.0
1.1
1.2
1.3
1.7
2.9
2.9
4.2
5.4
5.9
4.3
3.3
6.2
11.0
9.1
5.8
6.5
77
11.3
13.5
10.4

-1.0
1.2
13 5
13.0
40
2.2
2.9
24.9
10.4
1.7
-4.1
77
5.9
_ 7
-.S
-1.4
2.S
2.6
1.3
.6
1.1
0
1.0
1.4
.8
1.6
2.5
2.5
3.8
5.5
4.0
2.9
3.4
10.4
12.7
6.3
3.3
6.1
8.9
13.0
11.1
6.0

y U
2.6

4.3

Commodities
tess food

-2.0
10
67
14.5
89
1.3
2.9
10.8
20.2
7.2
-2.6
.6
90
1.3
~!9
-.9
.9
3.1
2.3
.1
.9
.5
.9
.9
1.1
1.2
2.6
1.8
3.7
4.5
4.7
3.4
3.0
7.4
12.0
8.9
4.3
5.8
7.1
11.4
12.2
8.4
4.0
2.9
3.4

Dec.
to
Dec.1

Year
to
year

2,3
70
-2.5
2,6
16.4
17.5
31
.2
3.0
31.5
11.2
-0.8
-3.7
9.6
74
-1.1
-1.3
-1.6
-.9
3.1
2.8
2.2
-.8
3.1
-.9
1.5
1.9
1.4
3.4
3.9
1.2
4.3
7.2
2.2
4.3
4.7
20.1
12.2
6.5
.6
8.0
11.8
10.2
10.2
4.3
3.1
2.6
3.8

1.3
29
-2.8
17
91
17.4
115
-1.4
2.2
14.6
21.5
8.5
-4.0
1.4
111
1.8
-1.5
-.2
-1.4
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
4.3
14.5
14.4
8.5
3.1
6.3
10.0
10.9
8.6
7.9
4.0
2.1
3.8

Dec.
to
Dec.*

Year
to
year

0.2
.4
10.8
6.4
5.4
5.0
3.0
12.9
9.1
5.3
-4.8
5.7
46

-1.6
.6
50
11.1
4.3
5.5
4.1
6.2
12.8
7.7
-1.5
-.1
75
.9
.2
-1.1
-7
1.0
3.1
1.1
1.3
.4
.3
.7
7
.8
.6
1.4
2.6
3.7
4.2
4.1
3.8
2.2
3.4
10.6
9.2
5.0
5.4
5.8
11.7
13.8
8.6
4.0
3.2
3.1

~:s

.2
-1.4
0
2.5
2.2
.8
1.5
-.3
.6
7
1,2
,4
.7
1.9
3.1
3.7
4.5
4.8
2.3
2.5
5.0
13.2
6.2
5.1
4.9
7.7
14.3
11.5
6.7
3.8
3.1
2.0

1

Total
Dec.
to
Dec. 1

0.2
7
2.5
2.0
2.6
1.7
1.0
3.5
5.2
6.1
3.6
3.6
5,2
4.6
4.2
1.9
2.3
3.1
4.5
2.7
3.7
2.7
1.9
17
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
5.4

Energy*

Medical care
services
Year
to
year

0.2
.2
1.4
3.2
1.8
2.4
1.5
1.9
4.1
6.3
4.8
3.2
5.3
4.4
4.3
3.3
2.0
2.5
4.0
3.8
2.9
3.3
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
5.2

Dec.
to
Dec.1

0,3
0
15
3.9
58
2.8
2.9
8.9
6.5
7.0
2.1
3.3
58
5.5
3.6
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
107
9.0
9.2
10.6
10.0
127
11.2
6.1
5.8

Year
to
Year

0.3
0
.6
3.1
5,0
42
27
58
85
67
37
23
51
6.4
3.6
3.0
2.9
4.0
4.3
4.9
4.8
4.0
37
3.2
3.0
2.4
3.2
5.4
87
7.3
8.1
7.1
7.3
3.7
4.4
10.3
12.6
10.1
9.9
8.6
97
11.3
107
11.9
87
6.0

Dec.
to
Dec.1

Year
to
year

...

-07
4.3
15
-41
2.1
-.8
— .2
2.0
1.8
1.4
17
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

0.2
17
2,6
.2
.3
-A
1.8
1.6
2.2
1.5
27
27
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
1.0

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.
See also Note, Table B-52.
Source; Department of Labor, Bureau of Labor Statistics.




296

TABLE B-57.—Producer price indexes by stage ofprocessing, 1947-84
[1967 = 100]

Finished goods
Finished goods excluding consumer foods

Consumer foods
Year or month

1947 ;
,
1948.... V.
1949
1950
1951
1952
1953
1954

1983:
Jan
Feb

Mr
a

Apr
May
June
July
Aug
Sept
Oct

Nv
o
Dc
e
1984: *
Jan
Feb

Mr
a
Apr
IVfay
June
July

Augiziz.:::::;.:::::::
Sept
Oct
Nov
Dec

Crude

Processed

Total
Total

Durable

Capital
Non- equipment
durable

finished
consumer
goods

100.0
102.6
105.4
1091
113.1
115.4
120.1
139.3
156.2
1661
177 7
1907
213.3
247 8
273.3
285 8
290.8
294.8

79.0
84 0
82.2
835
89 5
883
891
89.4
90.1
92 3
94.6
94.7
95.9
96 3
96.2
96 0
96.0
95.9
96 6
98.1
1O0.0
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
291.4
294.1

74.6
79 7
81.8
82 7
88.2
889
896
90.3
91.2
943
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
236.6

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
959
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
337.4

55.4
60.4
63.4
64 9
71.2
724
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
100.0
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
287.2
294.1

80.5
86 5
82.5
839
918
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
961
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
290.4

85.3
85.5
879
91.1
93.2
93.0
93 7
93.7
94 0
93.7
94.1
957
98.8
100.0
102.8
106.6
110 3
113.7
117.2
127.9
147.5
163.4
1706
1817
195.9
217.7
247 0
269.8
280 7
285.2
291.2

95 4
101.6
100.0
103.6
110.0
113 5
115.3
121.7
146.4
166.9
181.0
1804
1899
207.2
226.2
239 5
253.6
259 3
261.8
273.5

283 9
2841
283.4
283.1
284 2
285.0

258 4
2610
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

2317
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

285.7
286.1
2851
287 6
286 8
287.2

260.7
260.7
263 0
263 7
2619
264.3

247.1
259.9
267.4
287 3
270 4
266.0

259.8
258.7
260 5
259 5
2590
262.0

291.8
292.5
290.3
293 4
293 0
292.6

292.8
293.5
2914
293 9
293 2
292.5

233.4
233.8
229.2
235.3
235 4
235.9

337.7
338.6
338.6
338.1
336.8
335.2

287.2
287.7
285.1
289.9
290.0
290.4

285.2
285.7
285.1
287.0
285.9
286.3

289 5
290 6
2914
291.2
291.1
290.9

272 2
274 7
276 6
274.3
271.7
270.8

306.9
313 6
323 7
299.0
270.7
258.9

266 9
269 0
270 2
269.9
269.6
269.7

292.9
293 6
294 0
294.6
295.3
295.4

292 5
2931
293 6
293.5
294.9
294.9

235.9
236.1
236 6
236.7
236.6
236.4

335.0
336.1
336.7
336.4
338.9
339.2

291.6
292.3
292.3
294.5
293.9
293.9

288.9
290.1
291.1
290.3
290.3
290.1

292 3
291.3
289.8
291.6
292 3
292.4

275 3
274.0
273.4
271.8
272 3
274.4

270 8
274.6
274.7
277.2
265.5
270.8

273 4
271.7
271.0
269.1
270 7
272.5

295 7
294.8
292.9
295.9
2967
296.1

295 0
293.8
291.9
294.8
295 7
294.9

236 6
236.7
232.5
237.9
238.4
238.8

339.2
336.9
336.9
337.7
339.1
337.2

294.6
294.6
292.9
296.0
296.3
296.4

291.6
290.4
288.9
290.3
291.2
291.3

851

...

Consumer goods
Total

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
121.2
160.7
180.8
181.2
1939
2010
216.8
233.1
237 2
263.8
252.7
258.7
283.9

74.0
79 9
77.6
79 0
865
860

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 l
1984

Total
finished
goods

82.8
90.4
83.1
847
95.2
94 3
894
88.7
86.5
863
89.3
94.5
90.1
921
91.7
92 5
91.4
91.9

80.2
876
80.1
834
93.2
913
86 7
87.6
84.4
84 3
87.9
93.1
89.5
907
90.9
917
90.7
90.8
94 9
101.0
100.0
103.0
108.9
1131
115.1
121.7
143.9
164.6
181.3
177 8
187 3
204 6
223.8
237 8
250.6
257 7
260.0
270.3

See next page for continuation of table.




297

TABLE B-57.—Producer price indexes by stage of processing,

1947-84—Continued

[1967=100]
Intermediate materials, supplies, and components

Year or month
Total

Foods
and
feeds3

Materials and
components
Other

For
manufacturing

For
construction

Processed
fuels
and
lubricants

Crude materials for further processing

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

1047
1207
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

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

1970
1971
1972
1973
1974

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
1887
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
1984»...

280.3
306.0
310.4
312.3
320.0

252.6
250.3
239.4
247.9
253.1

282.3
310.1
315.7
317.1
325.0

265.7
286.1
289.8
293.4
301.8

268.3
287.6
293.7
301.8
310.3

503.0
595.4
591.7
564.8
566.3

254.5
276.1
285.6
286.6
302.1

244.5
263.8
272.1
277.1
283.3

304.6
329.0
319.5
323.6
331.0

259.2
257.4
247.8
252.2
259.7

401.0
482.3
473.9
477.4
484.7

615.0
751.2
886.1
931.5
931.4

346.1
413.7
376.8
372.2
380.6

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
258.5
252.1

473.6
473.0
477.7
474.6
475.4
476.8

930.7
9377
961.8
941.6
935.9
9367

368.0
366.0
366.8
367.0
369.0
370.5

312.8
314.0
315.5
315.6
315.5
315.7

244.0
250.9
263.2
258.2
257.4
256.9

318.0
318.7
319.5
320.0
319.9
320.2

294.1
294.7
296.7
296.4
296.5
297.6

302.9
303.7
303.1
303.6
303.9
304.9

567.9
572.0
573.2
574.2
568.1
561.7

286.1
286.3
287.2
288.1
289.3
289.9

276.2
277.9
280.2
280.6
281.6
281.6

320.6
327.1
328.5
324.8
324.0
327.5

248.4
256,4
257.2
253.7
251.8
256.0

476.2
479.6
482.5
478.2
479.4
481.6

927.8
926.9
931.0
910.9
915.3
921.1

371.6
375.6
378.1
377.1
377.7
379.1

May";;;;
June...

316.3
317.6
319.7
320.3
320.9
321.6

260.7
255.1
257.5
259.1
260.8
257.8

320.6
322.3
324.4
325.0
325.4
326.4

298.9
299.8
301.8
302.9
303.3
303.4

305.5
307.8
309.6
310.5
309.8
310.3

556.4
561.3
567.8
562.9
567.2
575.2

292.3
294.8
297.3
299.4
300.9
301.8

282.6
282.2
283.0
284.2
284.3
283.9

333.5
332.6
338.8
339.4
338.0
333.0

264.0
260.5
269.9
269.7
266.4
260.3

483.4
488.1
487.5
490.1
492.3
489.6

926.1
926.6
910.6
920.8
928.4
932.6

380.1
385.5
387.8
388.8
389.9
386.1

July
Aug....
Sept...
Oct
Nov
Dec

321.7
321.1
320.3
319.9
320.5
319.8

255.3
251.4
248.0
243.8
244.1
243.1

326.7
326.3
325.7
325.6
326.1
325.5

303.2
302.5
301.7
301.2
301.8
301.1

310.9
312.0
311.3
311.6
311.6
312.3

576.6
569.2
567.6
564.2
566.2
561.1

303.0
304.1
304.7
307.9
309.4
309.3

283.2
284.1
283.3
283.1
283.1
283.1

334.1
328.9
326.7
320.0
323.7
323.1

263.6
256.5
253.1
245.5
253.4
253.7

486.4
485.0
485.1
480.2
475.4
473.0

940.2
953.1
938.8
935.0
934.1
930.9

380.9
376.8
379.8
374.8
369.4
367.2

1983:
Jan....
Feb....
Mar...
May"!!
June..
July....
Aug...
Sept..
Oct
Nov
Dec
1984: »
Jan
Feb
Mar....

1
Data have been revised through August 1984 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.




298

TABLE B-58.—Producer price indexes by stage of processing, special groups, 1974-84
[1967 = 100]

Intermediate materials, supplies,
and components

Finished goods

Crude materials for further
processing

Excluding foods and
energy

Year or month
Total

Foods

Energy

Total

Capital
equipment

Consumer
goods
excluding
foods
and
energy

Total

162.9

Foods
and
feeds1

Energy

Other

Total

Foodstuffs
and
feedstuffs

Energy

Other

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

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
1984 2

247.0
269.8
280.7
285.2
291.2

239:5
253.6
259.3
261.8
273.5

701.3
835.4
822.9
783.6
750.8

216.4
235.1
248.6
256.1
262.3

239.8
264.3
279.4
287.2
294.1

204.2
220.1
232.6
239.9
245.8

280.3
306.0
310.4
312.3
320.0

252.6
250.3
239.4
247.9
253.1

484.9
573.6
570.8
543.9
545.2

261.8
283.4
290.1
294.8
303.5

304.6
329.0
319.5
323.6
331.0

259.2
257.4
247.8
252.2
259.7

586.1 269.4
783.4 266.0
801.5 238.1
791.1 250.7
785.6 266.1

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
287.6
286.8
287.2

260.7
260.7
263.0
263.7
261.9
264.3

794.1
797.6
795.7
788.5
777.4
767.6

256.5
256.9
254.7
258.5
258.7
258.9

287.2
287.7
285.1
289.9
290.0
290.4

240.5
240.9
238.9
242.2
242.5
242.7

312.8
314.0
315.5
315.6
315.5
315.7

244.0
250.9
263.2
258.2
257.4
256.9

546.4
550.1
551.4
552.1
546.7
540.9

295.4
295.8
296.6
297.1
297.6
298.6

320.6
327.1
328.5
324.8
324.0
327.5

248.4
256.4
257.2
253.7
251.8
256.0

786.3
785.8
787.8
779.7
781.6
783.3

251.9
257.7
261.1
259.5
260.2
262.7

289.5
290.6
291.4
291.2
291.1
290.9

272.2
274.7
276.6
274.3
271.7
270.8

753.8
757.3
757.9
751.1
762.7
764.8

260.1
260.6
261.0
262.0
262.1
262.0

291.6
292.3
292.3
294.5
293.9
293.9

243.8
244.2
244.7
245.2
245.6
245.5

316.3
317.6
319.7
320.3
320.9
321.6

260.7
255.1
257.5
259.1
260.8
257.8

536.2
540.8
546.7
542.2
546.2
553.5

299.5
301.0
302.7
303.8
303.9
304.2

333.5
332.6
338.8
339.4
338.0
333.0

264.0
260.5
269.9
269.7
266.4
260.3

786.0 263.7
786.4 271.1
780.1 274.3
783.1 276.4
786.4 277.8
787.7 272.8

292.3
291.3
289.8
291.6
292.3
292.4

275.3
274.0
273.4
271.8
272.3
274.4

755.6
741.0
737.1
745.0
747.4
736.4

262.8
262.9
261.2
263.8
264.5
264.5

294.6
294.6
292.9
296.0
296.3
296.4

246.4
246.4
244.8
247.2
247.9
248.0

321.7
321.1
320.3
319.9
320.5
319.8

255.3
251.4
248.0
243.8
244.1
243.1

554.5
547.7
546.5
543.3
544.9
540.2

304.4
304.8
304.2
304.4
304.9
304.6

334.1
328.9
326.7
320.0
323.7
323.1

263.6
256.5
253.1
245.5
253.4
253.7

790.5 265.6
795.0 260.4
789.7 264.1
787.0 257.9
779.9 254.8
775.4 253.9

1983:
Jan
Feb
Mar
June
July
Aug
Sept
Oct
Nov

Dec
1984: ^
Jan
Feb
Mar.

July
Aug
Sept
Oct
Nov
Dec
1
2

Intermediate materials for food manufacturing and feeds.
Data have been revised through August 1984 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.




299

TABLE B-59.—Producer price indexes for major commodity groups, 1947-84
[1967=100]
Farm products and processed
foods and feeds
Year or month

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 2
1984
1983:
Jan
Feb
Mar
Apr
My
a
June
Jury

. ..

.

,

MayZZZ........ V.
,

June
July
Aug
Sept
Oct

Nv
o

Hides,
skins,
leather,
and
related
products

Fuels and
related
products,
and
power *

Chemicals
and allied
products!

70.8
76.9
75.3
78.0
86.1
84.1
84.8
85.0
86.9
90.8
93.3
93.6
95.3
95.3
94.8
94.8
94 7
95.2
96.4
98.5
100.0
102.5
106.0
1100
114.1
117.9
125.9
153.8
171.5
182.4
195.1
2094
236.5
274 8
304.1
312.3
315.7
322.6

103.6
108.1
98.9
102.7
114.6
103.4
100.8
98.6
98.7
98.7
98.8
97.0
98.4
99.5
97.7
98.6
98.5
99.2
99.8
100.1
100.0
103.7
106.0
107.1
109.0
113.6
123.8
139.1
137.9
148.2
154.0
1598
168.7
183 5
199.7
204.6
205.1
209.9

83.3
84.2
79.9
86.3
99.1
80.1
81.3
77.6
77.3
81.9
82.0
82.9
94.2
90.8
91.7
92.7
90 0
90.3
94.3
103.4
100.0
103 2
108.9
1103
1141
131.3
1431
145.1
1485
167.8
179.3
2000
252.4
248 9
260.9
262.6
271.1
286.5

76.9
90.5
86.2
87.1
90.3
90.1
92.6
91.3
91.2
94.0
99.1
95.3
95.3
96.1
97.2
96.7
96 3
93.7
95.5
97.8
100.0
98.9
100.9
1062
115.2
118.6
134 3
208.3
2451
265.6
302.2
322 5
408.1
574 0
694.5
693.2
664.7
657.0

93.7
95.9
87.6
88 9
101.7
96.5
97 7
98.9
98 5
99.1
101.2
102.0
101.6
1018
100.7
991
97 9
98 3
99.0
99 4
100.0
998
99.9
102 2
1041
104.2
1100
146.8
1813
187.2
192.8
198 8
222.3
260 3
287.6
292.3
293.0
300.9

251.7
254.7
254.5
256.0
256.1
254.3
254.4
255.5
259.6
257.8
257.6
259.0

313.9
313.9
313 5
312.4
313.6
315.3
316.5
317.3
317.1
318.5
318.3
318.4

202.7
202.6
2034
203.5
204.3
204.7
205.3
206.0
206.2
207.0
207.7
207.8

266.7
264.3
264 9
267.4
269.4
271.2
272.3
274.7
274.4
273.7
277.0
277.3

683.6
668.6
658 0
644.8
651.9
665.5
668.7
671.7
672.3
669.5
663.7
658.0

289.3
290.5
2898
291.3
291.1
290.8
293.7
294.4
295.9
295.5
296.4
297.7

263.8
263.4
267.1
267.2
267.5
264.8
267.3
264.8
264.0
263.3
264.4
265.5

319.1
3206
321.9
322.6
323.2
323.8
323.9
323.3
322.3
323.2
323.8
323.0

208.2
209 6
209.9
209.9
210.5
210.2
210.5
210.1
210.6
209.6
210.0
209.8

279.1
283 3
286.7
286.8
288.5
290.1
288.9
288.7
290.3
288.9
283.2
282.9

652.1
656 0
658.7
654.7
660.6
665.9
665.0
657.9
654.8
654.5
655.3
648.9

298.1
296 5
300.1
302.0
302.7
302.2
302.6
301.1
301.4
301.0
301.6
301.0

Processed
foods and
feeds

94.3
101.5
89.6
93.9
106.9
102.7
96.0
95.7
91.2
90.6
93.7
98.1
93.5
93.7
93.7
94.7
93.8
93.2
97.1
103.5
100.0
102.4
108.0
111.7
113.9
122.4
159.1
177.4
184.2
183.1
188.8
206.6
229.8
244.7
251.5
248.9
253.9
262.6

AugIZZZZIZr'7 \.Z
Sept

Oct
Nov
Dec
1984: a
Jan
Feb
Mar
Apr

Textile
products
and
apparel

Farm
products

109.4
117.5
101.6
106.7
124.2
117.2
106 2
1047
98 2
96.9
99.5
103.9
97.5
97.2
96.3
98.0
960
94.6
98.7
105.9
100.0
102.5
109.1
1110
112.9
125.0
176.3
187.7
186.7
191.0
192.5
212 5
241,4
249.4
254.9
242.4
248.2
255.7

82.9
88.7
80.6
83.4
92.7
91.6
87.4
88.9
85.0
84.9
87.4
91.8
89.4
89.5
91.0
91.9
92.5
92.3
95.5
101.2
100.0
102.2
107.3
112.1
114.5
120.8
148.1
170.9
182.6
178.0
186.1
202.6
222.5
241.2
248.7
251.5
255.9
265.3

245.8
250.4
250.6
254.7
254.7
252.5
251.5
255.5
259,1
257.5
256.0
257.9

233.2
240.7
241.5
250.5
250.4
247.4
244.3
253.5
256.4
255.2
251.0
254.0

264.4
263.4
267.9
267.3
265.8
262.8
264.9
261.4
259.6
255.8
258.4
259.2

263.4
261.6
267.4
265.4
260.8
257.1
258.7
253.3
249.7
240.1
245.5
245.7

Total

. ..

Dec

See next page for continuation of table.




Industrial commodities

300

Total

TABLE B-59.—Producer price indexes for major commodity groups,

1947-84—Continued

[1967 = 100] .
Industrial commodities—Continuec1

Rubber
and
plastic
products

1983:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
...
1984:2
Jan
Feb
Mar
Apr
My
a
June
July
Aug
Sept
oct..::.:.:
Nov
Dec

!

"""'.'"'".'"

:.:;..:.::::::

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
103.4
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
241.4
243.2
247.2

73.4
84.0
77.7
89.3
97.2
94.4
94.3
92.6
97.1
98.5
93.5
92.4
98.8
95.3
91.0
91.6
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
307.1
307.5

72.5
75.7
72.4
74.3
88.0
857
85.5
85.5
87.8
93.6
95.4
96.4
97.3
98.1
95.2
96.3
95.6
95.4
96.2
98.8
100.0
101.1
104.0
108.2
110.1
113.4
122.1
151.7
170.4
179.4
186.4
195.6
219.0
249.2
273.8
288.7
298.1
318.3

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
171.9
185.6
195.9
209.0
227.1
259.3
286.4
300.4
301.6
307 2
316.0

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
2864
293.1

77.0
81.6
82.9
84.7
91.8
90-1
91.9
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
111.4
115.2
127.9
139.7
145.6
151.5
160.4
171.3
187.7
198.5
206.9
214.0
218.6

66.3
71.6
73.5
75.4
80.1
80.1
833
85.1
87.5
91.3
94.8
95.8
97.0
97.2
97.6
97.6
97.1
97,3
97.5
98.4
100.0
103.7
107.7
112.9
122.4
126.1
130.2
153.2
174.0
186.3
200.5
222.8
248.6
283.0
309.5
320.2
325.2
337.3

64.1
70.8
75.7
75.3
79 4
84.0
83 6
83.8
86 3
91.2
951
98.1
100.3
98.8
986
98.6
97 8
98.3
985
98.6
100.0
102.8
104.8
108.7
114.9
118.0
119.2
129.2
144.6
153.8
163.7
176.0
190.5
208.8
237.6
251.3
256.8
261.4

73.5
76 5
78.0
79 2
83 9
834
85 6
86 4
86 5
87 6
902
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 6
296.0

242.9
242 3
241.8
243.0
243.2
243.1
243.4
243.7
243.2
244.4
243.6
243.8

Year or month

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
1984 2

Transportation
equipNonment:
metallic
Motor
mineral
vehicles
products
and
equipment 3

Pulp,
paper,
and
allied
products

293.3
303 1
305.8
307.2
308.0
314.8
314.6
313.9
305.6
305.6
304.9
308.7

293.6
294 2
294.8
295.4
296.0
297.0
297.8
298.8
299.9
302.2
303.6
304.0

300.3
304 7
304.4
304.6
306.1
306.3
307.3
308.2
310.7
310.9
310.9
311.9

283 3
284 3
284.7
285.4
286.0
286.2
287.4
287.4
287.9
287 6
288.0
288.8

210.7
212 5
212.3
212.8
213.6
214.0
214.8
214.9
215.4
215 3
215.7
215.7

322 3
322.0
324.1
324.1
324.5
325.1
326.3
327.2
328.0
328.9
328.9

257.0
256 3
255.4
255.9
256.2
256.5
256.6
256.8
249.1
260.6
260.5
260.6

2857
288 8
287.4
287.4
287.1
288.0
291.5
292.0
291.4
2917
2917
292.8

244 8
246.2
246.4
247.3
247.5
247.6
247.5
* 247.7
247.9
248.1
247.7
247.5

3091
315.7
316.8
315.1
308.5
307.1
304.4
304.7
303 4
300.2
301.1
303.3

3091
312.0
314.0
316.3
317 7
318.4
319.8
321.3
3212
322.6
323.8
323.2

312 9
314.8
316.8
317.9
317 4
317.3
316.1
316.2
315 3
315.4
316.2
315.3

289 7
290.2
291.0
292.2
292 6
293.1
294.0
2941
294 5
295.0
2957
295.6

216 8
217.2
217.4
218 2
2191
219.1
219.2
219 2
2189
219.0
219.6
219.7

330.1
332.2
333.4
335.8
337.6
338.3
339.8
340.8
3404
339.6
339.5
339.9

2611
261.2
261.5
261.9
261.5
261.1
261.4
261.1
254 6
263.3
263.6
263.9

294 5
294.9
294.9
294.6
294 3
295.7
297.3
298 2
2964
297.0
297.0
297.1

Metals
and
metal
products

Machinery
and
equipment

Furniture
and
household
durables

1

Miscellaneous
products

Prices for some items in this grouping are lagged and refer to 1 month earlier than the index month.
Data have been revised through August 1984 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.
2

Source: Department of Labor, Bureau of Labor Statistics.




301

TABLE B-60.—Changes in producer price indexes for finished goods, 1950-84
[Percent change]
Total
finished
goods
Year or month

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
1984 .

Finished
consumer
foods

Finished
energy
goods

Finished goods excluding consumer foods

Finished goods
excluding foods
and energy

Consumer
Capital
Total
goods
equipment
Dec. to Year Dec. to Year
Oec. to Year Dec. to Year
1
Dec.' to year Dec* to year
Dec. to year Dec.' to year Oec. to Year Dec. to Year Dec. to Year
1
Oec. to year Dec' to year Dec.* to year
10.4
2.9
=-2.2
5
1
1.2
4.2
3.2
.5
-= 4
1.8
-.5
1
-2
.5
3.3
2.2
1.6
3.1
4.8
2.2
3.2
3.8
11.8
18.3
6.6
3.7
6.9
9.2
12.8
11.8
7.1
3.7
.6
1.8

1.8
9.5
-.6
10
2
.2
2.8
3.6
2.3
0

.8
3

A
1.7
3.2
1.2
2.8
37
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
2.1

13.3
5.3
= 5.9
22
19
-2.9
3.6
5.3
.4
-3 7
5.2
1.8
5
-1.3
4
9.1
1.4
= 4
4.8
8.2
2.5
5.9
8.0
22.5
13.0
5.5
-2.5
6.9
11.7
7.4
7.5
1.4
2.1
2.3
3.8

1.9
12.4
= .9
52
8
=2.5
2
3.5
5.8
-4 7
2.2
.4
9
-1.2
5
3.8
6.5
-16
3.6
6.2
3.2
1.6
5.6
20.3
14.0
8.4

8.2
.9

IZZ

2.4
3.4
4.3
2.1
2.1
6.6
21.2
7.2
6.2
6.9
8.3
14.8
13.3
8.8
4.1
.0
1.2

~5.3
9.1
9.2
5.9
5.9
2.2
1.0
4.5

.3
1.7
2,5
1.7
.2
.8
4
-3
1
.1
.1
.9
17
2.1
2.0
2.9
3,9
2.0
2.0
7.4
20.5
67
6.0
6.7
8.5
17.5
14.2
8.5
4.2
-.8
.8

2.6
2.7
3.5
37
2.0
4.1
16.0
12.1
6.3
7.0
7.3
11.9
16.2
10.3
4.6
1.7
1.4

1.6
7.2
-1.3
.9
.3
.8
2.4
2.5
U
4
-.1
2
0
.7
1.6
1.9
2.1
2.4
3.0
3.4
1.9
4.5
16.9
10.5
6.2
7.2
7.1
13.3
18.6
10.2
4.1
1.3
.9

10.3
3.4
.8
2.3
1.1
5.6
8.3
4.3
1.3
1.0
1
3
.5
.9
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
11.4
9.2
3.9
1,9
2,1

2.4
9.7
1.7
1.7
1.2
3.0
7.4
6.2
2.6
1.9
2
.1
4
.2
1.0
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
10.8
10.2
5.7
2.8
2.4

16.4
11.5
12.1
8.5
58.0
27.8
14.1

-S2
-4.1

17.3
11.8
157
6.4
35.1
49.2
19.1
-1.5
-4,8
=4.2

6.1
5.6
6.3
8.3
9.4
10.7
7.8
4.9
1.8
2.2

11.4
5.6
6.1
7.5
9.0
11.1
8.6
57
3.0
2.4

Percent change from preceding month

Unadjusted

1983:
Jan
Feb
Mar
June"!!!!!"!!!!!
Julv
Aug
Sept

Ocf

Nov ..
Dec
1984: 3
Jan
Feb
Mar
June
July
Aug ..„
Sept

Ocf

Nov
Oec

Season- Unadally justed
adjusted

=0.6

-0.7

-2

-!i

'.3
2
.1
—3
•
'.9
.1
.8
'.3
-.1
-.0
.5
—3
—*5
.2
.0

Season-

a

Unadjusted

=0.2
.8
0
.8
-.4
-.6
-.5

-0.8

1
.2

7
1.0

-.8
1.1
1

.6
.4
.4
0
-.1
0
.3

3.0
.9
.7
-.8
.9
-.3
17

2.6
.6

.1
.2

—7
- U
= .4
1.3

.2

~2
.5

-.6
.2
.8

7
.5

0
.1

.4

a

Unadjusted

justed

justed

0.0
1.0
.0
7
-.1
-.5
= .2
0
.9
.3
7
.9

.3
.4

Season-

-.3

16
.5
.3

-.3
-.6
1.0
-2

7
.2
,3
-.1
1
-.0

.9
2
— .2

-.0
.3
.3
2
.1
-.1
.1

0

—3

~!4
-.1

1
2

Unadjusted

Season- Unadally justed
adjusted

Season-

3
justed

1.2
=.4
.5
-.6
7
.8
.4
.2

-0.9
-.1

SeaSeasonUnad- sonaljy
ally justed
adadjusted
justed
-1.4
-.3
-.3
-.4
.1
.3
-.0
-.2

2
2

-.1
.2
.3

!s

.3

.0
.4
.6
1.0
.3
=.3

-.2

0

-!l
-2

0.1

o'
.1
2
2
-.9
17
o

0

.4
.2

= 3.5
-3,0
-3,0
-1.9
2.6
2.4
-.3
-.2

-0.2
.3

—*5
12
-1.1

~i!s

1
.1

~*3
.2

= 1.2
.3
-1.2
.4
1.5
~L5
-.2
.3
-1.2 -1.8
- 1 . 9 - 2.5
2
1.5
1.1
.6
-L5 -1.3

.5
.2
.2

.2
.3
.6
.2

.2
.5
-.1
1
.3

-4.1
-2.8
-1.8
-3.2
2.6
2.9
.4
.4
-.2
—.9
14
-1.3

.2
.4
.3

-1.8
.5
.1

-0.1
,3
.3
.0
.2

.8
-.2
0
2
0

=!i
.1
2

U
.1
.0

2
2

~*.2
.4
.2

'.0

~.o
!o

-.6
1.0

-0.4
.4
.4
.0
.3
.5
-.1

0

.2
.2
.3
.2

0'

Changes from December to December are based on unadjusted indexes.
Data nave been revised through August 1984 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.




302

MONEY STOCK, CREDIT, A N D FINANCE
TABLE B-61.—Money stock, liquid assets, and debt measures, 1959-84
[Averages of daily figures; billions of dollars, seasonally adjusted]
Ml

Sum of
currency,
demand

M2
Ml plus
overnight
RPs and
Eurodollars,

balances
travelers
(general
checks, and purpose and
broker/
other
dealer),
checkable
MMDAs. and
deposits
savings and
(OCDs)
small time
deposits
deposits,

December:

fc

M3 plus
other liquid
assets

388.6

299.8
315.3
341.0
371.4
406.0
442.5

403.6
430.8
466.1
503.8
540.4

480.0
524.3

505.1
557.1
606.2
615.0
677.5
776.2
886.0
985.0
1,070.5
1,172.4
1,311.9
1,472.9
1,647.1
1,804.8
1,990.0

614.8
666.5
728.9
763.5
816.3
903.1
1,023.0
1,141.7
1,249.3
1,367.9
1,516.6
1,704.7
1,910.6
2,117.1
2,326.2

1,023.3
1,163.6
1,286.7
1,389.1
1,498.5
1,632.6
1,796.6
1,965.4
2,196.3
2,376.3

530.1
533.0
535.3
535.5
541.2
546.3
545.8
546.6
548.9
545.5
549.4
554.5

Jan
Feb
Mar .

M2 plus
large time
deposits,
term RPs,
and
institutiononly MMMF
balances

297.8
312.3
335.5
362.7
393.2
424.8
459.4

141.0
141.8
146-5
149.2
154.7
161.9
169.5
173.7
185.1
199.4
205.8
216.6
230.8
252.0
265.9
277.6
291.2
310.4
335.4
363.1
389.1
414.9
441.9
480.5
525.4
554.5

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...
1984"
1984:

Debt»

M3

2,206.8
2,222.6
2,230.0
2,242.9
2,258.6
2,272.1
2,281.9
2,291.0
2,305.6
2,317.2
2,346.4
2,376.3

566.3

589.5

628.2
712.8
805.2
861.0

908.5

482.2

2,238.2
2,462.5

2,710.4
2,987.3
2,723.1
2,746.2
2,767.1
2,792.1
2,819.1
2,841.6
2,862.6
2,873.6
2,891.4
2,915.7
2,952.9
2,987.3

584.4

2,599.8

2,870.8
3,183.1
3,198.3
3,227.9
3,269.8
3,296.1
3,328.6
3,372.9
3,410.7
3,432.5
3,455.7

Debt of
domestic
nonfinancial
sectors
(monthly
average)

683.4
718.7
76L6
814.5
870.4
934.0
1,002.8
1,070.1
1,147.1
1,242.4
1,330.7
1,420.5

1,555.5

1,715.3
1,906.3
2,081.8
2,270.8
2,513.3
2,829.1
3,200.0
3,583.5
3,926.1
4,311.8
4,710.0
5,224.6
5,282.8
5,341.7
5,396.7
5,455.9
5,517.7
5,571.7
5,632.4
5,694.5
5,743.1
5,798.9
5,871.6

June....
July
Aug
Sept....
Oct
Nov
1
Dec "... of outstanding credit market debt of the U.S. Government, State and local governments, and private nonfinancial sectors; data
Consists
from flow of funds accounts.
Note.—The nontransactions portion of M2 is seasonally adjusted as a whole to reduce distortions caused by substantial portfolio
shifts arising from regulatory and financial changes in recent years, especially shifts to MMDAs in 1983. A similar procedure is used to
seasonally adjust the remaining nontransactions balances in M l See Table B-62 for components.
Source: Board of Governors of the Federal Reserve System.




303

TABLE B-62.—Components of money stock measures and liquid assets, 1939-84
[Averages of daily figures; billions of dollars, seasonally adjusted, except as noted]
Overnight
repurchase
Period

Currency

Travelers
checks

Demand
deposits

Other
checkable
deposits

Money market mutual
fund (MMMF)
balances

merits
<RPs)
net, plus
overnight
Eurodollars
NSA

General
purpose
and
broker/dealer
NSA

Institution only
NSA

Money
market
deposit
accounts
( T A,

Savings
deposits

December:
1959....

29.0

0.4

111.6

0.0

0.0

0.0

0.0

0.0

146.4

I960....
1961....
1962....
1963
1964

28.9
29,5
30.6
32.5
34.3

.4

112.5
116.5
118.2
121.7
127.0

.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

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

.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

1970....
1971....
1972....
1973....
1974....

49.2
52.6
56.8
61.5
67.8

1.0
1.1
1.3
1.5
1.8

166.3
176.9
193.7
202.5
207.5

.0
.0
.0

.0
,0
.0
.0
.2

.0
.0
.0
.0
.0

261.0
292.2
321.4
326.8
338.5

1975
1976
1977....
1978

2.3
2.8
3.1
3.5
3.7

214.2
224.4
239.6
253.8
261.9

5.8
10.6
14.7
20.3
21.2

2.7
2.4
2.4
6.4
33.4

.4
.6

1979

73.9
80.5
88.5
97.4
106.3

A
.9
2.7
4.2
8.5
17.1

1.3
2.3
2.8
5.3
5.6

9.5

.0
.0
.0
.0
.0

388.7
452.8
491.3
480.8
423,1

1980
1981....
1982....
1983....
1984 "..

116.7
124.0
134.1
148.0
158.0

4.2
4.3
4.3
4.9
5.2

266.5
236.2
239.7
243.7
248.3

27.6
77.4
102.4
128.9
143.0

28.3
35.9
44.1
56.2
57.6

61.6
150.6
185.2
138.2
168.1

15.2
38.0
51.1
43.2
62.7

.0
.0
43.0
376.0
410.0

401.4
345.7
362.1
312.9
294.3

Jan
Feb
Mar

149.9
150.2
150.9
151.8
152.9
154.2

4.9
5.0
5.0
5.1
5.1
5.1

244,5
243.8
244.0
245.3
245.2
248.2

130.8
134.0
135.4
133.3
138.0
138.8

58.6
59.5
58.3
57.5
59.1
56.5

137.8
142.1
144.8
145.9
146.5
148.9

43.5
44.6
45.0
45.0
45.3
45.7

380.3
386.0
392.5
396.4
394.6
392.9

309.9
306.6
305.5
305.5
305.5
305.1

{"iy
Aug
Sept

155.0
156.0
156.7
157.2
157.5
158.0

5.2
5.2
5.1
5.0
5.1
5.2

247.1
245.5
246.4
243.8
245J
248.3

138.5
139.9
140.7
139.6
141.1
143.0

56.9
58.7
56.8
56.8
58.2
57.6

150.5
150.6
152.0
155.7
162.2
168.1

46.1
46.2
46.9
52.2
58.3
627

389.2
383.8
383.4
386.8
397.3
410.0

303.0
299.7
298.8
297,3
296.1
294.3

.4

is

A

.1
.1
.1
.2

u

3:?

1984:

Ocf

Nov
Dec*....

See next page for continuation of table.




304

TABLE B-62.~Components of money stock measures and liquid assets, 1959-84—-Continued
[Averages of daily figures; billions of dollars, seasonally adjusted, except as noted]

Period

Small
denomination
time
deposits1

December:
1959

Large
denomination
time
deposits 1

Term
repurchase
agreements
(RPs)
NSA

Term
Eurodollars
(net)

Savings
bonds

Shortterm
Treasury
securities

Bankers'
acceptances

Commercial paper

VISA

11.4

1.2

€.0

0.7

46.1

38.6

0.6

3.6

12.5
14 8
20.1

I960
1961
1962
1963
1964

2.0
3.9
7.0

29 2

10 8
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

.9
1.1
1.1
1.2
1.3

5.1
5.2
6.8
7.7
9.1

.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

1.6
1.8
1.8
2.3
3,3

10.2
14.4
17.8
22.5
34.0

2.2
2.7
3.6
5.4

52.0
54.3
57.6
60.4
63.3

48.9
36.1
40.7
49.4
52.9

3.5
3.8
3.5
5.0
12.6

34.5
32.7
35.2
41.9
50,1

67,2
71.8
76,4
80.3
79.5

69.5
70.4
78.4
82.0
108.6

10.7
10.8
14.1
22.0
27.1

48.0
51,7
62.9
79,2
97,0

255

.

34 5
55.0
77 8
100 5
120.4

21.2
23.1

152.2
190 5
232.2
2660
2881

45.2
57 7
73.3
1110
144.7

1.6
2.7
3.5
6.8

1975
1976 . .
1977
1978
1979

3381
3910
446.0
5219
6358

129.7
1181
145.1
195 2
222.1

8.4

9.7

14.1
19.4
27.0
30.1

14.8
20.2
31.8
44.7

1980
1981
1982
1983
1984 p

7314
827 3
856 9
793.1
897.1

258.4
3013
327 4
325.4
409.7

34.7

50.3
67 5
81.7
93.4
81.5

72.3
67.7
67.9
71.0

133.8
149.9
187.8
223.3

32,0
39.8
43.8
43.3

98.1
104.2
108.8
130.8

Jan
.. .
Feb
Mar
Apr
hfay ..
June

797.0
800 9
803.4
808 3
816.7
8290

333.0
3399
347.9
355 5
367.3
3788

53.3
54.5
55.9
59 8
61.6
596

89.9
89 9
93.2

71.2
71.7
72.2
72.5
72.8
73.0

226.3
231.2
245.2
241.4
239.9
254.4

42.7
41.6
42.4
43.1
45.3
46.9

134.9
137.3
142.9
146.9
151.4
157.1

July
Aug
Sept
Oct

8452
862.0
874.3
884.9
891 5
897.1

389 0
391.9
392.8
401.0
404 3
409.7

596

888

63.4
64.7
66.4
68 2
64.6

86.1
84.4
79.0
80 1
81.5

73.2
73.4
73.6

267.4
276.8
286.3

47.3
47.3
46.2

160.2
161.4
158.2

1965
1966
1967
1968
1969
1970
1971
1972
1973
1974

..

309

37.4
20.4

8.0

370
40.2
56.0
64.6

8.0

1984:

..

Nov

Decp

931

94.1
903

1
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.
See also Table 6 - 6 1 .
Source: Board of Governors of the Federal Reserve System.




305

TABLE B-63.—Aggregate reserves of depository institutions and monetary base, 1959-84
[Averages of daily figures-, millions of dollars; seasonally adjusted, except as noted]

Adjusted for changes in reserve requirements«
Reserves of depository institutions
Year and month
Total 2

Nonborrowed
plus
extended
credit

rowed

Required

Monetary
base'

Borrowings of depository
institutions from the Federal
Reserve, NSA

Total

Seasonal

Extended
credit

1959: Dec

13,695

12,754

12,754

13,189

43,425

941

I960:
1961:
1962:
1963:
1964:

Dec
Dec
Dec
Dec
Dec

13,863
14.293
14,556
14,856
15,336

13,789
14,160
14.296
14,524
15,072

13,789
14,160
14,2%
14,524
15,072

13,120
13,709
13,985
14,366
14,930

43,408
44,437
45,683
47,935
50,285

74
133
260

1965:
1966:
1967:
1968:
1969:

Dec
Dec
Dec
Dec
Dec

15,881
15,875
17,279
18,181
18,471

15,437
15,342
17.051
17,435
17,352

15,437
15,342
17,051
17,435
17,352

15,458
15,536
16,904
17,755
18,185

52,961
55,036
58,453
62,533
65,678

444
532
228
746
1,119

1970:
1971:
1972:
1973:
1974:

Dec
Dec
Dec
Dec
Dec

19,356
20,594
22,663
23,671
24,904

19,023
20,468
21,613
22.373
24,176

19,023
20,468
21,613
22,373
24,323

19,107
20,412
22,379
23.368
24,645

69,685
74,377
80,921
87.436
94,629

332
126
1.050
1,298
727

41
32

1975:
1976:
1977:
1978:
1979:

Dec
Dec
Dec
Dec
Dec

25,044
25,596
26,627
27,906
29,087

24,914
25,543
26,057
27,038
27,615

24,926
25,543
26,057
27,038
27,615

24,778
25,322
26,437
27,674
28,759

100,771
108,347
117,461
128,043
138,903

130
53
569
868
1,473

14
13
55
135
81

12

1980:
1981:
1982:
1983:
1984:

Dec
Dec
Dec
Dec
Dec *

31,038
32,096
34,283
36,138
38,704

29,348
31,460
33,649
35,364
35,518

29,351
31,608
33,835
35,366
38,122

30,524
31,777
33,783
35,578
37,857

150,342
158,097
170,145
185,486
198,007

1,690
636
634
774
3,186

116
54
33
96
113

3
148
186
2
2,604

33,959
34,393
34,944
35,271
35,377
35,848

33,430
33,811
34,152
34,261
34,424
34,212

33,587
34,089
34,469
34,666
34,937
35,170

33,411
33,958
34,511
34,794
34,928
35,368

171,003
172,821
174,668
175,882
177,166
178,808

529
582
792
1,009
952
1,636

33
40
53
82
99
122

157
278
317
405
513
958

36,003
36,043
36,139
36,157
36,103
36,138

34.550
34,496
34,698
35,313
35,198
35.364

35,128
34,987
35,213
35569
35,204
35,366

35,495
35,596
35,641
35,652
35,574
35,578

179,789
180,619
182,272
183,357
184,472
185,486

1,453
1,546
1,441
844
906
774

171
198
190
142
121
96

578
491
515
256
6
2

36,357
37,025
37,097
37,109
37,447
38,282

35,642
36,458
36,145
35.875

35,646
36,463
36,172
35,919
34,496
36,855

35,744
36,083
36,388
36,619
36,870
37,516

187,469
189,277
189,417
190,357
191,977
193,858

715
567
952
1,234
2,988
3,300

139
196
264

27
44
37
1,873

38,233
38,380
38,135
37,745
38,099
38,704

32,309
30,363
30,894
31,728
33,482
35.518

37.317
37,406
37,352
36,785
37,319
38,122

37,626
37,697
37,515
37,138
37,419
37,857

194,755
195,980
195,992
196,375
197,022
198,007

5,924
8,017
7,242
6,017
4,617
3,186

308
346
319
299
212
113

5,008
7,043
6,459
5,057
3,837
2,604

147

1983:

'Jan
Feb...
Mar,!."

fern
June
July
Aug
Sect
Oct
Nov.;

Dec

1984:
Jan.
Feb.;;;;;;

Mar

fe::::::::::::
June
July

,

Aug
Sept
Oct.
Nov.;;;;;
Dec P

4
103
133

"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 ofreservable 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.
8
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.




306

TABLE B-64.—Commercial bank loans and investments, 1972-84
[Monthly average, billions of dollars, seasonally adjusted']
Investments

loans
Year and month

Total loans
and
investments

Total

Commercial
and
industrial

U.S.
Government
securities

Other
securities

88.6
88.2
86.3

93.2
99.4
107.5

1972: Dec
1973: Dec
1974: Dec

572.3
647.8
713.7

390.5
460.1
519.8

137.5
165.0
196.6

1975: Dec
1976: Dec

189.3
190.9
211.0
246.1
291.1

116.7
136.3
136.6
137.6
144.4

111.2
113.5
122.7
129.2
141.9

1977:
1978:
1979:

Dec
Dec
Dec

744.9
804.6
891.4
1,013.8
1,135.4

516.9
554.8
632.2
746.9
849.1

1980:
1981:
1982:
1983:
1984:

Dec
Dec
Dec
Dec
Dec".,.

1,239.4
1,307.4
1,400.5
1,553.0
1,713.6

914.2
967.4
1,032.8
1,122.7
1,313.1

326.9
355.1
391.5
412.8
469.9

170.9
179.6
202.7
260.8
260.2

154.4
160.4
165.0
169.6
140.3

fcz

1,411.7
1.419.5
1,432.3
1,443.3
1,453.6
1,466.9

1,035.1
1,038.2
1,044.4
1,049.1
1,051.3
1,057.9

392.9
393.8
395.5
394.5
393.2
394.6

208.8
213.4
220.9
226.0
233.4
238.5

167.8
167.8
167.0
168.2
169.0
170.5

June
July
Aug
Sept
Oct
Nov
Dec

1,481.4
1,495.0
1,506.8
1,520.8
1,539.1
1,553.0

1,069.0
1,079.4
1,086.2
1,095.3
1,108.5
1,122.7

397.9
401.2
402.1
405.0
409.6
412.8

240.7
242.2
246.9
252.9
257.8
260.8

171.7
173.4
173.7
172.6
172.7
169.6

1,565.0
1,584.1
1,599.6
1,612.9
1,629.8
1,636.6

1,160.8
1,181.2
1,196.3
1,213.2
1,232.0
1,243.2

414.1
421.7
432.2
438.5
448.0
452.2

260.4
260.7
261.0
257.6
257.3
253.7

143.7
142.2
142.3
142.1
140.5
139.7

1,652.6
1,662.1
1,674.9
1,683.0
1,700.9
1,713.6

1,256.7
1,264.2
21,275.0
1,284.5
1,299.9
1,313.1

455.0
458.1
460.0
463.9
469.5
469.9

256.4
257.1
258.0
257.0
259.4
260.2

139.5
140.8
141.9
141.5
141.6
140.3

1983:
Jan
Feb
Mar

1984:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept

2

Oct
Nov.
Dec

. ..

2

'Data are prorated averages of Wednesday figures for domestically chartered banks and averages of montfi-end data for foreign-related
institutions.
2
Beginning September 26, 1984, a transfer of loans from Continental Illinois National Bank to the Federal Deposit Insurance
Corporation reduced total loans and investments and total loans by $1.9 billion, commercial and industrial loans by $1.4 billion, and real
estate loans (not shown here) by $0.4 billion.
Note.—Data are not strictly comparable because of breaks in the series.
Source: Board of Governors of the Federal Reserve System.




307

TABLE B-65.—Total funds raised in credit markets by nonfinancial sectors, 1975-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Item

1977

1978

1979

1980

1981

1982

1975

1976

193.0

243.5

319.4

369.8

386.0

344,6

380.4

404.1

85.4

69.0

56.8

53.7

37.4

79.2

87.4

161.3

186,6

85.8

69.1

57.6
-.9

55,1

38.8

79.8

87.8

162.1
-.9

186.7

-.4

-.1

242.8

339.8

158.9

239.3

53.8
18.7
86.5

56.3
15.7
167.3

52.5
5.5
23.6
5.0

108.7
8.4
47.3
2.9

1983

Net credit market borrowing by nonfinancial sectors
Total net borrowing by domestic nonfinancial sectors..
U.S. Government
Treasury issues
Agency issues and mortgages..

-1.4

-1.4

262.6

Private domestic nonfinancial sectors..
107.6

316.2

174.5

348.6

171.1

Debt capital instruments

-.6

-.5

265.4
293.1
192.0
159.1

100.9
16.1
27.2
57.6

Home mortgages
Multi-family residential..
Commercial
Farm

123.6
15.7
22.8
85.1

21.9
22.9
126.3

199.7
28.4
21.1
150.2

211.2
30.3
17.3
163.6

30.3
26.7
135.1

42.0
.0
11.0
4.6

Tax-exempt obligations..
Corporate bonds
Mortgages

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

22.7
21.8
114.6
76.0
4.3
24.6
9.7

526.4

50.9

91.6

116.5

137.5

73.4

134.0

83.9

100.5

9.6
-10.4
-2.6
10.1

25.4
4.5
4.0
16.9

40.2
27.1
2.9
21.3

48.8
37.4

25.1

45.4
51.2
11.1
29.7

6.3
36.7
5.7
24.8

26.7
54.7
19.2
33.4

21.0
55.5
-4.1
11.5

51.3
27.3
-1.2
23.1

107.6

174,5

262.6

316.2

348.6

265.4

293.1

242.8

339.8

12.3
53.5
41.8

13.2
91.5
69.8

12.0
140.7
110.0

16.5
172.0
127.6

17.6
179.3
151.7

17.2
122.1
126.1

6.2
127.5
159.4

31.3
94.5
117.1

36.7
175.4
127.7

8.5
12.5
20.9

10.2
15.4
44.2

12.3
28.0

14.6
32.4
80.6

21.4
34.4
96.0

14.4
33.7
78.1

16.3
40.2
102.9

7.6
39.5
70.0

4.3
63.9
59.5

11.3

19.3

13.5

33.8

20.2

27.2

27.2

15.7

18.9

6.2
2.0

Other debt instruments

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

6.7
-6.2
10.7
4.5

3.8
4.9
6.0
4.3

332.9

403.6

406.2

371.8

407.6

419.8

545.3

6.7

Consumer credit
Bank loans n.e.c
Open-market paper..
Other
By borrowing sector: Total...
State and local governments..
Households
Nonfinancial business
Farm
Nonfarm noncorporateCorporate
Foreign net borrowing in United States..

U.S. Government loans..

Z8

8.6
5.6
1.9
3.3

Total domestic plus foreign..

204.4

262.8

Bank loans n.e.c,

5.2

Direct and indirect supply of funds to credit markets
Total funds supplied to 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 instruments...
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

344.6

380.4

404,1

526.4

141.6

Private domestic nonfinancial sectors

170.7

185.5

213.6

246.5

237.2

292.5

276.1

364.7

102.0

132.1

149.0

153.9

146.8

181.1

221.9

181.9

222.6

15.6

17.8
110.3
.0
2.3
1.7

25.3
120.0
.2
2.2
1.3

25.4
112.1
6.9
7.5
2.0

26.2
78.1
34.4
6.6
1.5

15.5
128.7
29.2
6.5
1.1

27.5
83.9
107.5
2.5

25.4
130.5
24.7
3.8
-2.5

36.0
211.6
-=44.1
14.3
4.8

84.1
1.3

39.6

38.7

36.5

59.6

99.6

56.1

70.6

94.2

142.1

-2.5

10.6

41.0

44.6

23.0

1.5

7.6

-8.6

49.2

-8.6
6.1

-4.5
15.2

1.4
39.6

6.5
38.0

27.6
-4.6

-=21.7
23.2

-8.7 -26.7
18,1
16.3

22.1
27.1

11.9
-1.7
40.1
3.6

1.1
-.1
41.5
19.7

4.1
4.3
55.4
29.1

-6.6
6.8
74.9
36.6

11.6
72^8
31.8

1.8
-2.6
83.9
22.7

10.4
6.1
104.6
15.6

3.3
-5.3
99.2
15.2

See next page for continuation of table.




308

6.8
-1.1
90.4
-15.9

TABLE B-65.—Total funds raised in credit markets by nonfinancial sectors, 1975-84—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
1983

1984

Item
Net credit market borrowing by nonfinancial sectors
428.6

Treasury issues

516.2

611.4

660.9

715.6

652.9

234.5

165.2

136.9

184.1

161.6

186.1

209.5
.1

...

U.S. Government

549.3

209.6

Total net borrowing by domestic nonfinancial sectors

234.8

165.4

137.1

184.4

161.8
-.1

186.3

-.1

-.3

474.4

476.8

Agency issues and mortgages

-.3
219.0

Private domestic nonfinancial sectors
Debt capital instruments

253.8

251.7

466.7
295.3
54.4
35.9
205.0

256.7
46.5
29.4
180.8

131.8
12.3
50.4
4.2

135.5
15.6
58.3
4.0

123.3
14.3
41.5
1.8

29.6
18.7
232.1
141.7
18.9
69.0
2.4

75.1
24.0
154.7

44.0
9.1
198.6

67.1
-.4
35.3

100.5
6.1
45.4
2.7

.5

276.7

554.0
280.3

55.5
7.8
213.4

50.5
22.0
102.5

Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multi-family residential
Commercial
Farm
,
Other debt instruments

129.2
15.1
59.4
1.2

61.0

99.3

197.8

220.1

273.6

171.4

45.3
26.5
9.6
17.1 - 1 0 . 5
16.6
-10.7
11.1
219.0 314.8

48.7
18.0
7.2
25.4

84.6
64.5
9.4
39.3

78.5
96.0
12.1
33.5

124.2
87.2
50.9
11.3

87.5
45.9
23.1
14.9

351.0

474.4

476.8

554.0

466.7

31.1
108.5
79.4

52.7
161.0
101.1

25.1
195.9
129.9

38.0
236.1
200.3

27.4
201.1
248.3

10.6
261.6
281.7

31.1
241.8
193.8

4Z4
37.5

2.1
57.8
41.2

4.7
75.4
49.8

11.1
79.9
109.4

4.1
68.1
176.1

-2.6
97.5
186.8

5.3
68.3
120.2

-10.9

44.0

Consumer credit
Bank loans n.e.c
Open-market paper
Other,..,
By borrowing sector: Total
State and local governments
Households
Nonfinancial business
farm
Nonfarm noncorporate
Corporate

351.0

314.8
175.0

,

Foreign net borrowing in United States

8.9

21.6

13.3

31.7

Bonds
Bank loans n.e.c
Open-market paper
U.S. Government loans

3.6
17.7
-16.8
4.4

5.7
4.9
7.6
3.4

2.9
-3.4
9.1
4.8

3.0

233
4.5

Total domestic plus foreign

437.5

570.9

529.5

643.1

48.4 - 3 3 . 7

3.3
2.2
-1.1
-3.7 -10.3 -13.4
-13.2
50.9 - 3 0 . 3
7.2
4.5
7.8
650.0

764.0

619.1

Direct and indirect supply of funds to credit markets
Total funds supplied to domestic nonfinancial sectors

428.6

Checkable deposits and currency
Time and savings deposits
Money market fund shares
Security repurchase ageements
Foreign deposits

715.6

418.6

416.2

538.4

457.7

190.8

208.5

252.9

272.9

316.2

273.7

76.1
175.3
-62.7
.4

13.8
204.6
-6.5
-3.5

4.4
206.5
-1.8
38.5
5.3

63.3
167.3
44.9
2.6

1.6

-5.1

47.7 - 1 . 4
252.2 284.4
15.4
20.5
8.1 -23.8
-6.0
-7.2

.0

165.7

143.3

222.2

184.0

130.0

34.8

53.3

39.2

81.5
48.6

21.0
13.8

13.2
40.1

12.2
27.0

36.1 -18.0
15.1 - 1 2 . 2
86.5 124.5
72.2
29.6

13.9
16.1
86.9
39.1

84.0

Foreign funds

-15.4

186.6

-37.4
22.0

Source: Board of Governors of trie Federal Reserve System.

309

40.6
9.1
31.6

3.6
1.2
86.1
30.9

At banks
Credit market instruments
U.S. Government and related loans, net
U.S. Government cash balances
Private insurance and pension reserves
Other sources
,




660.9

340.6

12.3

Credit market instruments

611.4

377.4

49.5
259.9
-105.2
21.7

,

516.2

322.2

Deposits and currency

549.3

238.2

Private domestic nonfinancial sectors

19.1
18.9
94.0
-.8

132.1

652.9

41.7

35.5
6.2

31.2 -40.5
-21.7 - 1 9 . 8
93.6 123.2
30.9
-.1

TABLE B-66.—Bond yields and interest rates, 1929-84
[Percent per annum]

U.S. Treasury securities
Year and
month

Bills
(new issues) l
3-month

6-month

Constant
maturities 2

years

Corporate
bonds
(Moody's)

m
ill

High-

D33

years

Now
grade
newmuniciComhome
mercial
pal
bonds mortgage paper, 6
(Stand- yiefds months*
(t-HLBB)*
a r d s /rill nn\ 4
Poor's)

Prime rate
charged by
banks 8

Discount
rate,
Federal
Reserve
Bank of
New York8

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

2.84
2 77
2.83
2.73
2.72

4.75
4 33
4.28
3.91
3.61

2.50

.56
53
.66
.69
.73

1.50

1.00

150

100
*i!oo

167

.75

1.64
2 01
2.40
2.21

150
L50

l!03
1.44
1.49

1.50-1.75
1.75-2.00
2.00

1.00
1.00
1.00
1.34
1.50

2.07
2.56
3.00
3.17
3.05

Federal
funds
rate 7

1.59
1.75
1.75
1.99
1.60

1929

103
326
.373
.375

210
2.36
2.06
1.86

1.50
1.50
1.50

•1.00
B
1,00
8

!"!!

1945
1946
1947
1948
1949

375
375
594

2 62
2.53

1.040
1.102

2.82
2.66

3 29
3.05
3 24
3.47
3.42

1950
1951
1952
1953
1954

1.218
1552
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

2.19
2.72
2.37

1.45
2.16
2.33
2.52
1.58

1955
1956
1957
1958
1959

1.753
2.658
3.267
1.839
3.405

3$32*

2.47
3.19
3.98
2.84
4.46

2.82
3.18
3.65
3.32
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

5.81

4.38

3 98

4l51

5.81

6.46
6 97
7!80

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

IS

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
1984

11.506
14.029
10.686
8.63
9.58

11.374
13.776
11.084
8.75
9.80

11.55
14.44
12.92
10.45
11.89

11.46
13.91
13.00
11.10
12.44

11.94
14,17
13.79
12.04
12,71

13.67
16.04
16.11
13.55
14.19

8.51
11.23
11.57
9.47
10.15

12.66
14.70
15.14
12,57
12.38

12.29
14.76
11.89
8.89
10,16

15.27
18.87
14.86
10.79
12.04

11.77
13.42
11.02
8.50
8.80

13.36
16.38
12.26
9.09
10.22

High-low

High-low

12.036
12.814
15.526
14.003
9.150
6.995

11.851
12.721
15.100
13.618
9.149
7.218

10.80
12.41
12.75
11.47
10.18
9.78

11.09
12.38
12.96
12.04
10.99
10.58

12.42
13.57
14.45
14.19
13.17
12.71

7.21
8.04
9.09
8.40
7.37
7.60

11.87
11.93
12.62
13.03
13.68
12.66

12.00-12.00
13.00-12.00
13.00-13,00
13.00-13.00
13.00-12.00
12.00-11.00

13.82
14.13
17.19
17.61
10.98
9.47

8.101
9.443
10.546
11.566
13.612
14.770

10.25
11.10
11.51
11.75
12.68
12.84

11.07
11.64
12.02
12.31
12.97
13.21

12.65
13.15
13.70
14.23
14.64
15.14

8.08
8.62
8.95
9.11
9.55
10.09

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

8.126
9.259
10.321
11.580
13.888
15.661

10.88
12.84
14.05
12.02
9.44
8.91
9.27
10.63
11.57
12.01
13.31
13.65

12.00-11.00
11.50-11.00
13.00-11.50
14.50-13.50
17.75-14.50
21.50-17.75

11.00-10.00
10.00-10.00
11.00-10.00
11.00-11.00
12.00-11.00
13.00-12.00

9.03
9.61
10.87
12.81
15.85
18.90

1980:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec

261

See next page for continuation of table.




310

1.98

200

5.55

8

.....

TABLB B-66.—Bond yields and interest rates, 1929-84—Continued
[Percent per annum]
.
V.S Treasury securities

Year
and
month

Constant
maturities2

Bills
(new issues)'
3-month

6-month

years

10
years

Corporate
bonds
(Moody's)
Aaa 3
fxaa

Raa
Odd

Highgrade
NewmuniciComhome
pal
mortgage mercial
bonds
paper, 6
yields
(Stand- /rfll QR\ 4 months 8
ards
Poor's)

Prime rate
charged 6by
banks

Discount
rate,
Federal
Federal
funds
Reserve
rate 7
Bank of 8
New York

High-low
1981:
Jan
Feb
Mar....

to.

June...
July....
Aug....
Sept...
Oct
Nov
Dec
1982:
Jan
Feb
Mar....

May....
June...
July....
Aug....
Sept...
Oct
Nov
Dec
1983:
Jan
Feb
Mar....
Apr
May....
June...
July....
Aug....
Sept...

Ocf

Nov
Dec

1984:
Jan
Feb
Mar....
ivfay.'.".'
June...
July....
Aug....
Sept...

Oc?

Nov
Dec

High-tow

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

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

10.93
11.05
11.59
11.98
12.75
13.18
13.08
12.50
12.34
11.85
10.90
10.56

11.67
11.84
12.32
12.63
13.41
13.56
13.36
12.72
12.52
12.16
11.57
11.50

12.20
12.08
12.57
12.81
13.28
13.55
13.44
!2.87
12.66
12.63
12.29
12.13

13.65
13.59
13.99
14.31
14.74
15.05
15.15
14.63
14.35
13.94
13.48
13.40

9.61
9.63
9.92
9.98
10.55
10.71
10.50
10.03
10.17
10.34
10.27
10.04

12.29
12.23
12.02
12.04
12.18
12.10
12.50
12.43
12.53
12.77
12.75
12.55

9.18
9.31
9.86
10.22
10.87
11.23
11.34
11.16
10,94
10,16
9.06
8.55

11.00-11.00
11.00-11.00
11.50-11.00
12.00-11.50
12.50-12.00
13.00-12.50
13.00-13.00
13.00-13.00
13.00-12.75
12.75-12.00
12.00-11.25
11.25-10.75

8.50-8.50
8.50-8.50
8.50-8.50
9.00-8.50
9.00-9.00
9.00-9.00
9.00-9.00
9.00-9.00
9.00-9.00
9.00-9.00
9.00-8.50
8.50-8.00

9.56
9.59
9.91
10.29
10.32
11.06
11.23
11.64
11.30
9.99
9.43
8.38

882
9.12
9.39
9.05
8.71
8.71
8.96
8.93
9.03
9.44
9.69
9.90
9.94
10.13
10.49
10.41
9.97
8.79
8.16

9.06
9.13
9.58
9.83
10.31
10.55
10.58
10.65
10.51
10.05
8.99
8.36

1
Rate on new issues within period; bank-discount basis.
2
Yields on the more actively traded issues adjusted to constant maturities
3
Series excludes public utility issues for January 17, 1984 through
4

by the Treasury Department.
October 11, 1984 due to lack of appropriate issues.
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.
6
Bank discount basis; prior to November 1979, data are for 4-6 months paper.
«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.
7
Since July 19, 1975, the daily effective rate is an average of the rates on a given day weighted by 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
the8 one at which most transactions occurred.
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.
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.




311

TABLE B-67.—Consumer credit outstanding,

1950-84

[Amount outstanding (end of month); millions of dollars, seasonally adjusted]
Year and month

Total
consumer
credit

Installment credit*
Total

Automobile

Revolving *

Mobile home s

Other

Noninstallment
credit 4

December:
25,018
26,576
31,830
35,928
37,293
44,319
48,224
51,:"
51,L
59,432

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

9,852
10,717
11,709
12,058
12,823
14,510
15,564
16,222
16,859
19,011

1964""!
1965
1966
1967
1968
1969

63,928
66:569
72,830
81,578
91,279
101,726
108,227
113,628
124:915
135,431

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

19,593
21,131
22,455
24,522
26,605
28,912
30,065
31,845
34,803
36,050

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

141,010
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

37,105
39,103
44,028
47,984
48,431
50,385
54,207
57,953
63,457
70,371

1980
1981
1932
1983

383,246
409,598
433,480
484,263

309,694
330,218
348,944
388,718

116,808
125,323
129,799
141,876

54,900
60,309
65,453
75,564

17,302
17,879
22,119
23,460

120,684
126,707
131,573
147,818

73,552
79,380
84,536
95,545

437,473
436,672
440,007
443,011
446,156
451,186

351,539
351,561
354,498
356,539
358,811
362,672

130,079
129,565
130,328
130,769
131,475
132,915

65,762
65,767
66,814
67,785
68,369
69,473

22,369
22,351
22,525
22,576
22,676
22,839

133,329
133,878
134,831
135,409
136,291
137,445

85,934
85,111
85,509
86,472
87f345
88,514

455,425
459,714
463,209
468,891
475,130
484,263

366,378
370,471
373,024
378,117
382,936
388,718

134,764
137,136
137,431
139,140
140,408
141,876

70,089
70,630
71,209
72,447
73,874
75,564

23,076
23,298
23,553
23,523
23,459
23f460

138,449
139,407
140,831
143,007
145,195
147,818

89,047
89,243
90,185
90,774
92,194
95,545

493,268
497,335
503,891
512,132
524,922
534,946

393,187
399,795
405,665
412,073
422,306
430,131

143,982
146,781
147,107
149,265
152,954
155,851

76,069
77,342
80,304
82,172
84,989
86,558

23,368
23,241
23,526
23,811
24,113
24,567

149,768
152,430
154,728
156,825
160,250
163,155

100,081
97,540
98,226
100,059
102,616
104,815

543,904
551,966
556,824
564,944
574,057

437,237
443.235
447,518
453,793
461,743

159,273
161,050
162,367
164,724
167,448

87,198
88,512

25,029
25,602
25,920
25,704
25,675

165,737
168,071
169,395
172,033
175,574

106,667
108,731
109,306
111,151
112,314

19531!
1954
1955
1956
1957
1958
1959
1960
1961

1983:
Jan
Feb
Mar

fcz
June.......

m
Aug
Sept
Oct.
Nov
Dec
1984:
Jan.
Feb
Mar

;;

&E:
July
Aug

Nov

91,332
93,04.6

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,
* 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.
9
Not reported separately prior to July 1970/
• Noninstallment credit h credit scheduled to be repaid in a Jump 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.




312

TABLB B-68.—Net change in consumer credit outstanding, 1950-84

[Change from preceding period; millions of dollars, seasonally adjusted]
Year and month

Total
consumer
credit

Installment credit *
Total

December:
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

4,723
1,558
5,254
4,098
1,365
7,026
3,905
2,912
459
7,837

3,220
693
4,262
3,749
600
5,339
2,851
2,254
-178
5,685

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

4,496
2,641
6,261
8,748
9,701
10,447
6,501
5,401
11,287
10,516

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

Automobile

Revo IVing*

Mobile
home3

1,539
-54
1,670

Other

stailment
credit *

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

1,503
865
992
349
765
1,687
1,054
658
637
2,152

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

582
1,538
1,324
2,067
2,083
2,307
1,153
1,780
2,958
1,247

5,579
14,527
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

1,055
1,998
4,925
3,956
447
1,954
3,822
3,746
5504
6,914

5,760
26,352
23,882
50,783

2,579
20,524
18,726
39,774

285
8,515
4,476
12,077

1,726
5,409
5,144
10,111

459
577
4,240
1,341

109
6,023
4,866
16,245

3,181
5,828
5,156
11,009

2,595
22
2,937
2,041
2,272
3,861

280
-514
763
441
706
1,440

309

l/ay"!
June..

3,993
-801
3,335
3,004
3,145
5,030

1,047
971
584
1,104

250
-18
174
51
100
163

1,756
549
953
578
882
1,154

July...
Aug...
Sept..
Oct....
Nov...
Dec...

4,239
4.289
3|495
5,682
6,239
9,133

3,706
4,093
2,553
5,093
4,819
5,782

1,849
2372
295
1,709
1,268
1,468

616
541
579
1,238
1,427
1,690

237
222
255
-30
-64

1,004
958
1,424
2,176
2,188
2,623

533
196
942
589
1,420
3,351

9,005
4,067
6,556
8,241
12,790
10t024

4,469
6,608
5,870
6,408
10,233
7,825

2,106
2,799
326
2,158
3,689
2,897

505
1,273
2,962
1,868
2,817
1,569

-92
-127
285
285
302
454

1,950
2,662
2,298
2,097
3,425
2,905

4,536
-2,541
686
1,833
2,557
2,199

8,958
8,062
4,858
8,120
9,113

7,106
5,998
4,283
6,275
7,950

3,422
1,777
1,317
2,357
2,724

640
1,314
1,324
1,496
1,714

462
573
318
-216
-29

2,582
2,334
1,324
2,638
3,541

1,852
2,064
575
1,845
1,163

1983:
Jan....
Feb....
Mar...

1984:
Jan....
Feb....
Mar...
MayJune..
July...
Aug...
Sept..

Ocf

1,398

-823
398
963

873
1,169

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-67.
Source: Board of Governors of the Federal Reserve System.




313

TABLE B-69.—Mortgage debt outstanding by type ofproperty and offinancing,1939-84
[Billions of dollars]
Nonfarm properties
End of year
or quarter

All
properties

Nonfarm properties by type of mortgage
Government underwritten

Farm
proper
ties

Total

Multi- Com1- to 4- family mercial
family proper- properhouses
ties
ties 1

Conventional •

1- to 4-family houses
Total*

Total

VA
FHA
guarinsured anteed

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
1945.,....,
1946
1947
1948
1949

36.5
37.6

6,5
6,<
6.0
5.4
4.9

30.0
31.2
30.8
29.9
29.7

17.4
18.
18.2
17.1
17.9

5.
5.9
5.8
5.8
5.6

6.9
7.0
6.7
6.3
6.;

2.3
3.(
3.7
4.1
4.2

2.3
4J
4.2

2.3
3.0
3.7
4.1
4,:

27.7
28.2
27.1
25.8
25.5

15.1
15.4
14.5
13.7
13.7

4,8
4.9
5.1

30.8
36.9
43.9
50.9
57.1

18.6
23.0
28.L
33.3
37,6

5,;
6.1
6.6
7.5
8.6

6.4
7,7
9.1
10.2
10.8

43

€

6J
9.3
12.5
15.0

4.1
3.
3.8
5.3
6.9

26.5
30.6
34.1
37.3
40.0

14.3
16.9
18.9
20.8
22.6

8.5
9.7
10.8
12.0
12.8

0.2
2.4
5.5
7.:
8.1
10.3
13.2
14.6
16.1
19.3

44.7
49.1
54.9
61

26.3
28.9
33.2
38.0
43.6

14.3
15.5
16.5
19.7
23.8

24.6
28.<
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

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

1950
1951
1952
1953
1954

mm
34.7
35.5
41.8
48.9
56.2
62.7

5.6

9.8
13.6
17,1

72.8
82.:
91.4
101.3
113.7
129.9
144.5
156.5
171.1
190.8

6.1
6.7
7.L
7.7

66.7
75.6
84.2
93.6
105.4

45.2
51.7
58.5
66.1
75.7

10.1
11
12.3
12.9
13.5

11.5
12.5
13,4
14."
16.3

22.1
26.6
29.3
36.2

18.8
22.9
25.4
28.1
32.1

9.0
9i
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/
59.

38.9
43.9
47.2
50.1
53.8

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

32.4
36.5
41,1
46.2
50.0

62.3
65.6
69.4
73.4
77.2

B5.S

26.7
29.5
32.3
35.0
38.3

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
1975
1976
1977
1978
1979

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

806.1
893.0
1,022.7
1,173.6
1,337.4
1,471.8
1,583,3
1,655.0
1,826.4

51.1
56.6
63.7
70.8
82.6

755.0
836.4
959.1
1,102.8
1,254.8

495.0
560.7
657,8
770.7
891.0

100.6
104.5
111.5
120.7
128.4

159.3
171.2
189.7
211.4
235.4

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/
8

61.6
67.0
73.6
82.0
92.0

608.0
682.3
797.3
926.4
1,055.7

367.3
427.1
516.2
617.3
718.1

92.0
101.7
106.7
109.6

1,379.8
1,481.5
1,548.3
1,716.8

987.0
1,065.3
1,105.7
1,214.6

137.1
136.4
140.6
151.0

255.7
279.9
302.1
351.3

225.1
238.9
248.9
279.8

195.2
207.6
217.9
248.8

93.6
101.3
108.0
127.4

101.6
106.2
109.9
121.4

1,154.7
1,242.6
i;2995
i;299.5
1,437.0

791.8
857.7
887.9
965.8

103.9
105.5
106.5
106.7

1,499.5
1,518.8
1,525.7
1,548.3

1,078.2
1,090.5
1,091.7
1,105.7

138.1
138.8
138.2
140.6

283.3
289.5
295.8
302.1

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

1,259.0
1,277.2
1,278.9
1,299.5

869.2
880.7
876.9
887.9

1,681.9
1,723.1
1,775,1
1,826:4

106.9
108.0
109.0
109.6

1,574.9
1,615.1
1,666,1
1,716.8

1,122.1
1,146.9
1,182.1
1,214.6

141.5
144.7
147.1
151.0

311.3
323.4
337.0
351.3

252.5
261.1
273.7
279.8

222.1
230.0
241.7
248.8

110.8
115.8
123.8
127.4

111,3
114.3
117.9
121.4

1,322.5
1,354.0
1,392.4
lr437.0

900.0
916.9
940.4
965.8

1,869.4
1,926.6
1,982.6

110.1
111.0
111.7

1,759,4
1,815.6
1,871.0

1,244.2
1.278.6
1,314.1

88

360.9
378.2
394,2

286.8
290.5

255.9
260.5

131.1
133.6

124.8
126.9

1,472.6
1,525.2

988.3
1,018.1

1955
1956
1957
1958
1959
1960
1961
1962

1980
1981
1982
1983
1982:1..
Ill
(V
1983:1

llCZZ
IV
1984:1
Ill

56.4

162.6
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.
1
1
3




314

TABLE B-70.—Mortgage debt outstanding by bolder, 1939-84
[Billions of dollars]

Major financial institutions
End of year
or quarter

Total

35.5
1939.. .
1940 . . .
36.5
1941
37.6
1942
36.7
1943
. .
35.3
1944 . . .
.
34.7
1945 . .
35.5
1946 ... .
41.8
1947 .. .
48.9
1948
56.2
1949
62.7
1950
72.8
1951
82.3
1952
91.4
1953 .
101.3
1954
113.7
1955.
129.9
144.5
1956
. .
.
156.5
1957
. .
171.8
1958
190.8
1959
.. .
.
1960
207.5
1961
228.0
1962
251.4
1963
278.5
1964
. 305.9
333.3
1965
356.5
1966
381.2
1967
410.9
1968
441.4
1969
1970
474.2
1971
526.5
1972
603.4
681.6
1973
744.3
1974

Other holders
Life
insurance
companies

Federal
and
related
agencies 3

Savings
and loan
associations

Mutual
savings
banks

Commercial
banks »

18.6

3.8

4.8

4.3

5.7

5.0

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

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

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

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

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

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

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

Total

4.8

1975..
1976..
1977..
1978..
1979..
1980..
1981..
1982..
1983..

806.1
893.0
1,022.7
1,173.6

1,337.4

581.2
647.5
745.2
848.2
938.2

278.6
323.0
381.2
432.8
475.7

77.2
81.6
88.2
95.2
98.9

136.2
151.3
179.0
214.0
245.2

89.2
91.6
96.8
106.2
118.4

101.0
116.6
140.3
170.4
215.8

1,471.8
1,583.3
1,655.0
1,826.4

997.2
1,040.8
1,023.6
1,110.0

503.2
518.5
483.6
493.4

99.9
100.0
97.8
136.1

263.0
284.5
300.2
328.9

131.1
137.7
142.0
151.6

256.5
289.1
354.8
432.4

1982:1

1,603.4
1,624.3
1,632.2
1,655.0

1,042.3
1,042.9
1,027.1
1,023.6

516.5
513.7
494.9
483.6

97.5
96.3
94.4
97.8

289.5
293.2
297.3
300.2

138.8
139.7
140.5
142.0

301.0
315.1
332.8
354.8

1,681.9
1,723.1
1,775.1
1,826.4

1,029.1
1,048.7
1,079.6
1,110.0

477.0
474.5
482.3
493.4

105.4
119.2
129.6
136.1

303.4
310.2
320.3
328.9

143.3
144.7
147.4
151.6

374.6
394.8
414.8
432.4

1,869.4
1,926.6
1,982.6

1,136.2
1,179.6
1,219.7

502.1
526.7
544.3

143.2
147.5
155.1

338.9
351.5
364,5

152.0
153.8
155.8

447.3
457.7
471.0

nil
IV...
1983: I
II
III...
IV...
1984: I
II...
III..
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 tf\e Federal Reserve System, based on data from various Government and private organizations.




315

TABLE B-71.—Federal budget receipts, outlays, and debt, fiscal years 1976-86
[Including outlays off-budget under current taw '; millions of dollars; fiscal years]
Actual

Description
1976

1977

1978

1979

1980

298,060

355,559

399,740

463,302

517,112

201,099
132,509
-35,548

241,312
151,503
-37,256

270,670
166,467
-37,397

316,366
188,072
-41,136

350,856
212,106
-45,850

BUDGET RECEIPTS AND OUTLAYS:
Total receipts

Federal funds
Trust funds
Interfund transactions..
Total outlays

371,779

409,203

458,729

503,464

590,920

Federal funds
Trust funds
Interfund transactions

277,228
130,099
-35,548

304,459
142,000
-37,256

342,355
153,771
-37,397

374,867
169,733
-41,136

433,468
203,302
-45,850

Total surplus or deficit ( - ) . . . ,

-73,719

-53,644

-58,989

-40,161

-73,808

-76,129
2,410

-63,147
9,502

-71,685
12,696

-58,501
18,340

-82,612
8,804

631,866

709,138

780,425

833,751

914,317

151,566
480,300

157,295
551,843

169,477
610,948

189,162
644,589

199,212
715,105

94,714
385,586

105,004
446,839

115,480
495,468

115,594
528,995

120,846
594,259

298,060

355,559

399,740

463,302

517,112

131,603
41,409
90,769
16,963
5,216
4,074

157,626
54,892
106,485
17,548
7,327
5,150

59,952
120,967
18,376
5,285
6,753

217,841
65,677
138,939
18,745
5,411
7,439

244,069
64,600
157,803
24,329
6,389
7,174

5,451
2,576

5,908
623

6,641
778

8,327
925

11,767
981

371,779

409,203

458,729

503,464

590,920

89,619
6,433
4,373
4,204
8,184
3,170
7,619
13,739
5,442
18,910
15,734
89,736
73,903
15,834
60,784
18,433
3,324
2,519
7,232
26,711

97,241
6,353
4,736
5,770
10,032
3,093
14,829
7,021
21,104
17,302
104,414
85,068
19,345
61,044
18,038
3,602
3,267
9,569
29,878

104,495
7,482
4,926
7,992
10,983
11,357
6,254
15,521
11,841
26,710
18,524
116,629
93,861
22,768
61,488
18,978
3,810
3,576
8,442
35,441

116,342
7,459
5,235
9,180
12,135
11,236
4,686
17,532
10,480
30,223
20,494
130.567
104,073
26,495
66,359
19,931
4,169
3,928
8,369
42,615

133,995
12,714
5,832
10,156
13,858
8,839
9,390
21,329
11,252
31,843
23,169
150,638
118,548
32,090
86,539
21,185

-14,386

-14,879

-15,720

-17,476

-19,942

-7,482
-4,242
-2,662

-7,957
-4,548
-2,374

-8,478
-4,983
-2,259

=8,938
-5,271
=3,267

-10,055
-5,787
-4,101

Federal funds
Trust funds
OUTSTANDING DEBT, END OF PERIOD:
Gross Federal debt
eld 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 Reserve System..
Another
.! ..
BUDGET OUTLAYS
National defense
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
Social security
Medicare
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Net Interest
Allowances
Undistributed offsetting receipts
Employer share, employee retirement:
Military retireo pay
Other
Rents and n,_..
Sale of Conrail...
1
Outlays off-budget under current law are proposed to be on-budget.
See next page for continuation of table.




316

6,787

4,582
4,448
8,582

52,512

TABLE B-71.—Federal budget receipts, outlays, and debt,fiscalyears 1976-86—Continued
[Including outlays off-budget under current law »; millions of dollars; fiscal years]

Actual

Description
1981

Estimates

1982

1983

617,766
409,253
270,138
-61,625
745,706
543,437
263,894
-61,625
-127,940
-134,184
6,244

600,562
382,432
319,363
-101,233
808,327
613,277
296,282
-101,233
-207,764
-230,845
23,081

209,507
794,434
124,466
669,968

1,146,987
217,560
929,427
134,497
794,930

599,272
285,917
61,137
182,720
40,839
6,787
8,083

1984

1985

1986

BUDGET RECEIPTS AND OUTLAYS:
Total receipts
Federal funds
Trust funds
Interfund transactions...
Total outlays..

599,272
410,422
240,601
-51,751
678,209

Federal funds
Trust funds
Interfund transactions..

496,182
233,778
-51,751

Total surplus or deficit ( - )

-78,936

Federal funds
Trust funds
OUTSTANDING DEBT, END OF PERIOD:

-85,760
6,823

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 Reserve
System
All other

BUDGET OUTLAYS..
National defense
International affairs
General science, space, and technology
Energy
Naturai resources and environment
Agriculture
Commerce and housing credit
.
Transportation
Community and regional development
Education, training, employment, and social services
Health
Social security and medicare
Social security

Medicare
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Net interest
Allowances

Undistributed offsetting receipts
Employer share, employee retirement:
Other
Rents and royalties on the Outer Continental
Shelf
Sale of Conrail

666,457
418,095
338,103
-89,740
851,781

736,859

793,729

459,314
396,495
-118,950

493,534
421,302
-121,107

959,085

973,725

636,324
305,198
-89,740

731,630
346,405
-118,950

734,931
359,901
-121,107

-185,324

-222,226

-179,996

-218,229
32,905

-272,316
50,090

-241,397
61,401

1,381,886
240,116
1,141,770
155,527
986,243

1,576,748

1,841,077

2,074,231

264,159
1,312,589

327,110
1,513,967

387,642
1,686,589

617,766
297,744
49,207
201,498
36,311
7,991
8,854

600,562
288,938
37,022
208,994
35,300
6,053
8,655

666,457
296,206
56,893
241,651
37,361
6,010
11,370

736,859
329,677
66,403
268,367
36,995
5,603
11,809

793,729
358,889
74,088
289,436
34,998
5,345
12,342

12,834
956
678,209
157,513
13,104
6,469
15,166
13.568
11,323
8,206
23,379
10,568
33,709
26,866
178,733
139,585
39,149
99,723
22,991
4,762
4,582
6,854
68,734

15,186
976
745,706
185,309
12,300
7,200
13,527
12,998
15,944
6,256
20,625
8,347
27,029
27,445
202,532
155,964
46,567
107,717
23,958
4,703
4,532
6,390
84,995

14,492
1,109
808,327
209,903
11,848
7,935
9,353
12,672
22,901
6,681
21,334
7,560
26,606
28,641
223,311
170,724
52,588
122,598
24,846
5,099
4,789
6,452
89,774

15,684
1,281
851,781
227,413
15,876
8,317
7,086
12.591
13,613
6,917
23,669
7,673
27,579
30,417
235,764
178,223
57,540
112,668
25,614
5,660
5,053
6,770
111,058

16,932
1,698
973,725
285,669
18,349
9,285

-28,041
-11,532
-6,371
-10,138

-26,099
-12,829
-7,020
-6,250

-33,976
-15,362
-8,122
-10,491

-31,957
-16,503
-8,760

16,419
1,585
959,085
253,830
19,583
8,740
8,164
13,024
20,165
5,987
26,994
8,553
30,434
33,879
257,363
191,107
66,256
127,240
26,850
6,686
5,782
6,552
130,426
1,131
-32,296
-17,017
-9,977
-5,302

1,003,941

155,122
1,157,467

4,671
11.884
12,629
2,206
25,860
7,323
29,288
34,920
269,404
202,245
67,158
115,769
26,769
6,587
4,845
2,797
142,550
399
-37,478
-18,232
-10,730
-7,317
-1,200

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. The 3-month period from July 1, 1976 through September 30, 1976 is a separate fiscal
period known as the transition quarter, not shown here.
Refunds of receipts are excluded from receipts and outlays.
See "Budget of the United States Government, Fiscal Year 1986" for additional information.
Sources: Department of the Treasury and Office of Management and Budget.




317

TABLE B-72.—Federal budget receipts, outlays, components, and debt, selectedfiscalyears 1929-86
[Billions of dollars]
Components of budget

Budget totals

Fiscal year or period

(Including outlays off-budget under
current law, which are proposed to be
included on-tMJdget)
Receipts

Outlays

Outlays
Off-budget

On-budget under current
law

Gross Federal debt (end
of period)

under

current
Surplus or
law;
deficit
proposed to
be included
on-budget

Outlays

Surplus or
deficit
()

Total

Hefd by
the public

Addendum:
Gross
national
product

U6.9
22.5
48.2

41.4

-2.9
-4.9
-20.5
-54.6
-47.6

50.7
57.5
79.2
142.6
204.1

42.8
48.2
67.8
127.8
184.8

95.0
109.0
139.0
177.0
202.0

92.7
55.2
34.5
29.8
38.8

-47.6
-15.9
4.0
11.8
.6

260.1
271.0
257.1
252.0
252.6

235.2
241.9
224.3
216.3
214.3

217.0
202.0
221.3
245.5
261.8

-3.1
6.1
-1.5
-6.5
-1.2

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

265.1
312.8
339.3
361.3
364.2

68.4
70.6
76.6
82.4
92.1

-3.0
3.9
3.4
-2.8
-12.8

68.4
70.6
76.6
82.4
92.1

-3.0
3.9
3.4
-2.8
-12.8

274.4
272.8
272.4
279.7
287.8

226.6
222.2
219.4
226.4
235.0

380.6
411.8
433.9
443.1
474.4

92.5
94.4
99.7
106.6
112.6

92.2
97.7
106.8
111.3
118.5

-X3
-7.1
-4.8
-5.9

92.2
97.7
106.8
111.3
118.5

X3
-7.1
-4.8
-5.9

290.9
292.9
303.3
310.8
316.8

237.2
238.6
248.4
254.5
257,6

497.9
509.3
548.2
578.0
618.2

1965
1966
1967
1968
1969

116.8
130.8
148.8
153.0
186.9

118.2
134.5
157.5
178.1
183.6

-1.4
-3.7
-8.6
-25.2
3.2

118.2
134.5
157.5
178.1
183.6

-1.4
-3.7
-8.6
-25.2
3.2

323.2
329.5
341.3
369.8
367.1

261.6
264.7
267.5
290.6
279.5

659.5
724.1
777.3
831.3
910.6

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

192.8
187.1
207.3
230.8
263.2

195.6
210.2
230.7
245.7
269.4

-2.8
=23.0
-23.4
-14.9
-6.1

-2.8
-23.0
-23.4
-14.8
-4.7

382.6
409.5
437.3
468.4
486.2

284.9
304.3
323.8
343.0
346.1

968.8
1,031.5
1,128.8
1,252.0
1,379.4

279.1
298.1
81.2
355.6
399.7
463.3
517.1
599.3
617.8
600.6
666.5

332.3
371.8
96.0
409.2
458.7
503.5

-=53.2
-73.7
-14.7
-53.6
-59.0
-40.2

0.1
1.4
8.1
7.3
1.8
8.7
10.4
12.5

195.6
210.2
230.7
245.6
267.9
324.2
364.5
94.2
400.5
448.4
491.0

-45.2
-66.4
-13,0
-44.9
-48.6
-27.7

544.1
631.9
646.4
709.1
780.4
833.8

396.9
480.3
498.3
551.8
610.9
644.6

1,479.9
1,640.1
432.2
1,862.8
2,091.3
2,357.7

590.9
678.2
745.7
808.3
851.8

-73.8
-78.9
-127.9
-207.8
-185.3

14.2
21.0
17.3
12.4
10.0

576.7
657.2
728.4
796.0
841.8

-59.6
»57.9
-110.6
-195.4
-175.4

914.3
1,003.9
1,147.0
1,381.9
1,576.7

715.1
794.4
929.4
1,141.8
1,312.6

2,575.8
2,885.9
3,046.0
3,221.4
3,581.1

736.9
793J

959.1
973.7

-222.2
-180.0

12.5
1.5

946.6
972.2

- 209.8
-178.5

1,841.1
2,074.2

1,514.0
1,686.6

3,868.5
4,198.5

3.9
2.0
5.0

3.1
4.6
8.8

07
-2.6
-3.9

6.5
8.7
14.6
24.0
43.7

9.5
13.7
35.1
78.6
91.3

-2.9
-4.9
-20.5
-54.6
-47.6

9.5
13.7
35.1
78.6
91.3

45.2
39.3
38.5
41.6
39.4

92.7
55.2
34.5
29.8
38.8

-47.6
-15.9
4.0
11.8

1950
1951
1952
1953
1954

39.4
51.6
66.2
69.6
69.7

42.6
45.5
67.7
76.1
70.9

1955
1956
1957
1958
1959
I960....
1961
1962
1963
1964

65.5
74.6
80.0
79.6
79.2

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

1980
1981
1982
1983
1984
1985 *
1986 *

:.;:.
.:;::
.:::

1

1
Not strictly comparable with later data.
* Estimates.
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. 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 1986" for additional information.
Sources: Department of the Treasury, Office of Management and Budget, and Department of Commerce (Bureau of Economic
Analysis),




318

TABLE B-73.—Relation of Federal Government receipts and expenditures in the national income and
product accounts to the unified budget, fiscal years 2984-86
[Billions of dollars; fiscal years]
Estimate
1984

Receipts and expenditures

1985

1986

666.5

736.9

793 7

13.1
12.3
-2.8
-1.8

14.7
13.9
-5.3
-1.9
.2

15.1
16.1
3.4
-2.1
.4

687.6

758.5

826.6

RECEIPTS
Total budget receipts
Government contributions for employee retirement (grossing) .
Other netting and grossing
Timing adjustments...
Geographic exclusions.
Other
.

.

.

Federal sector, national income and product accounts, receipts

.

EXPENDITURES
851.8

Total budget outlays
Lending and financial transactions
Government contributions for employee retirement (grossing)
Other netting and grossing
Defense timing adjustment
Bonuses on Outer Continental Shelf land leases
Geographic exclusions

,

Federal sector national income and oroduct accounts exDenditures

959.1

973.7

18.2
13.1
12.3
2.2
3.5
5.0
— 1.8

-36.5
14.7
13.9
1.5
1.7
5.2
—.7
948.5

-13.0
15.1
16.1
.9
4.0
-5.2
1.1

857.9

Note.-See Note, Table B-72.

992.7

Data are revised to include the outlays of Federal entities that are off-budget under current law and proposed to be included onbudBet
See Special Analysis B, "Special Analyses, Budget of the United States Government, Fiscal Year 1986" for description of these
categories.
Sources: Department of Commerce (Bureau of Economic Analysis), Department of the Treasury, and Office of Management and




319

TABLE B-74.—Federal and State and local government receipts and expenditures, national income and
product accounts, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Total government

Surplus or
deficit

Surplus or
deficit

Calendar year or quarter

Expenditures

State and local
government

Federal Government

national
income
and
product
accounts

Receipts

Expenditures

national
income
and
product
accounts

Surplus or
deficit
Receipts

Expenditures

1929
1933
1939

11,3
9.3
15.4

10.3
10.7
17.6

1.0
-1.4
-2.2

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

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

-.7
-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
-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

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

69.0
90.1
94.6
89.9
101.1
109.7
116.2
115.0
129.4

61.0
79.2
93.9
101.6
97.0
98.0
104.5
115.2
127.6
131.0

50.0
64.3
67.3
70.0
63.7
72.6
78.0
81.9
78.7

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

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

1395
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

96.1
98.1
106.2
114.4
114.9
124.3
141.8
150.5
174.4
196.9

93.1
101.9
110.4
114.2
118.2
123.8
143.6
163.7
180.5
188.4

3.0
-3.9
-4.2
.3
-3.3
-L8
-13.2
-6.0
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

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

302.8
322.6
368 3
413.1
4552
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

14.3

191.9
198.6
227.5
258.6
287.8
287.3
331.8
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
=53.1
-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

838.3
956,9
974.8
1,033.0
1,133.8

983.6
1,090.1
1,167.5
1,258.1

-30.7
-26.7
-115.3
-134.5
-124.4

540.9
624.8
616.7
641.1
703.5

602.1
689.1
764.9
819.7
879.9

-61.2
-64.3
-148.2
-178.6
-176.4

386.1
420.0
441.9
478.2
523.2

355.5
382.4
409.0
434.1
471.1

970.4
980.8
972 8
975.3

1,044.2
1,058.5
1,103.1
1,154.5

-73.8
-77.6
-130.4
-179.2

622.9
625.9
609.9
608.3

729.3
737.9
773.6
818.9

-106.3
-112.0
-163.7
-210.6

430.1
440.1
445.9
451.6

397.6
405.7
412.6
420.2

992.6
1,036.5
1,039.6
1,063.4

1,144.3
1,160.0
1,173.1
1,192.8

-151.7
-123.4
-133.5
-129.3

619.8
649.3
640.2
655.0

805.6
816.7
821.1
835.5

-185.7
-167.3
-180.9
-180.5

458.3
473.5
486.1
495.0

424.2
429.6
438.7
443.8

1,105.4
1,131.6
1,138.7

1,212.8
1,240.8
1,271.7
1,307.3

-107.4
-109.2
-133.0

686.4
704.3
706.2

847.6
868.0
886.8
917.3

-161.3
-163.7
-180.6

509.6
520.6
524.6

national
income
and
product
accounts

455.7
466.1
477.0
485.8

1980
1981
1982
1983
1984 "
1982:
I
II
Ill

I
V
1983:
I

II
HI....
I
V

852

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

-iz
- U
-14.2
-6.0
9.9
-10.6
-19.4
-3.3
7.8
-4.7
-63.8
-36.5
-17.8

.8

8.3

1984:

I
I
I
I
I

IV

Note.—Federal erants-in-aid to State and local governments are reflected in Federal expenditures and State and local receipts. Total
J
government receipts and expenditures have been adjusted to eliminate"this duplication.
Ijusted © " - • - - * - - = Source: Department of Commerce, Bureau of Economic Analysis.




320

TABLE B-75.—Federal and State and local government receipts and expenditures, national income and
product accounts, by major type, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Receipts

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
1984 *
1982:
I
I
I
HI
IV
1983:

n'ZZZ!

in
iv
1984:

II
ill
IV ".
..

Total

Personal
tax
and
nontax
receipts

Corporate
profits
tax accruals

Expenditures
Indirect
Purbust- Contrichases Transness buttons
of
tax
fer
for
and social Total *
nonments
tax
accruals

2.6
1.4
2.4

1.4

7.1
7.1
9.4

0.2

L4

2.6
17.8
18.9
20.8
18.7
21.4
21.0
18.5

2.8
7.6
11.4
14.1
12.9
10.7
9.1
11.3
12.4
10.2

10.1
11.3
11.8
12.8
14.2
15.5
17.1
18.4
20.1
21.3

20.6
28.9
34.0
35.5
32.5
35.4
39.7
42.4
42.1
46.0

17.9
22.6
19.4
20.3
17.6
22.0
22.0
21.4
19.0
23.6

139.5 50.4
144.8 52.1
156.7 56.8
168.5 60.3
174.0 58.6
188.3 64.9
212.3 74.5
228.2 82.1
263.1 97.2
296.7 115.7

22.7
22.8
24.0
26.2
28.0
30.9
33.7
32.5
39.2
39.5

11.3
9.3
15.4
17.7
25.0
32.6
49.2
51.2
53.2
51.0
56.9
58.9
55.9
69.0
85.2
90.1
94.6
89.9
101.1
109.7
116.2
115.0
129.4

5.1

Net interest paid

Interest received
by
government

Total

Surplus
or
deficit
(-).
national
income
and
product accounts
1.0
-1.4
-2.2

10.3
10.7
17.6

8.8
8.2
13.5

1.0
1.5
2.6

0.7
1.0
1.1

-0.2
-.0
.4

2.3
2.8
3.5
4.5
5.2
6.1
6.1
5.8
5.4
5.9

18.4
28.8
64.0
93.3
103.0
92.7
45.6
42.5
50.5
59.3

14.
24.9
59.8
88.9
97.0

1-2
1.4
1.9
2.4
3.2
4.1
4.2
4.2
4.3

.4
.1
.1
.1
.6
.7

25.5
•32.0
38.4

2.7
2.6
2.
2.4
3.0
6.0
13.1
13.1
14.5
16.8

23.4
25.3
27.7
29.7
29.6
32.2
35.1
37.5
38.7
41.8

7.1
8.5
9.0
9.1
10.1
11.5
12.9
14.9
15.2
18.0

61.0
79.2
93.9
101.6
97.0
98.0
104.5
115.2
127.6
131.0

38.5
60.1
75.6
82.5
75.8
75.0
79.4
87.1
95.0
97.6

18.0
14.8
14.2
14.9
16.9
18.3
19.2
21.9
26.1
27.1

4.4
4.5
4.5
4.6
4.7
4.7
5.2
5.6
5.3
6.3

45.4
48.0
51.6
54,6
58.8
62.6
65.3
70.2
78.9
86.6

21.1
21.9
24.3
27.3
28.7
30.0
38.8
43.4
47.9
55.0

136.4
149.1
160.5
167.8
176.3
187.8
213.6
242.4
269.1
286.8

100.3
108.2
118.0
123.7
129.8
138.4
158.7
180.2
199.0
208.8

28.9
32.9
33.8
35.6
36.9
39.8
43.9
51.7
58.6
64.8

6.9
6.4
6.9
7.4
7.9
8.1
8.5
8.9
10.3
11.5

10.1
9.9
10.8
11.6
12.5
13.2
14.5
15.7
18.1
19.8

3.3
3.5
3.9
4.2
4.6
5.1
6.0
6.8
7.7
8.3

94.3
103.7
111.5
120.9
129.1
140.1
151.7
165.7
178.2
189.6
84.8 213.4
81.1 251.3
60.7 258.8
75.8 280.4

58.6
64.6
74.2
92.4
104.3
110.9
126.0
140.6
161.8
186.9

313.4
342.0
371.6
405.3
460.0
534.3
574.9
623.3
681.1
750.8

220.1
234.9
253.1
270.4
304.1
339.9
362.1
393.8
431.9
474.4

78.3
92.6
102.6
116.6
138.6
173.9
189.6
202.5
218.4
244.2

12.3
12.4
12.9
15.2
16.4
18.9
23,1
25.1
29.0
30.6

22.3
23.1
24.8
29.6
33.6
38.1
44.7
49.1
58.4
70.9

9.9
10.7
11.9
14.4
17.1
19.2
21.5
24.0
29.4
40.3

203.7 869.0 537.8 291.2
236.8 983.6 596.5 330.0
251.3 1,090.1 650.5 368.2
272.7 1,167.5 685.5 396.3
304.3 305.9 1,258.1 748.0 407.1

36.3
53.2
65.3
72.3
91.5

86.6
114.4
135.3
151.9
181.9

50.3
61.2
70.0
79.5
90.5

tl

82.8
27.5

-.1

838.3
956.9
974.8
1,033.0
1,133.8

336.5
387.7
404.1
404.2
435.1

970.4
980.8
972.8
975.3

404.4
411.4
398.5
402.0

62.9
62.9
61.9
55.0

254.7
256.0
260.1
264.2

248.3
250.4
252.3
254.1

1,044.2
L.058.5
L.103.1
1,154.5

630.9
633.7
656.3
681.0

348.3
357.8
374.2
392.7

60.9
64.1
68.5
67.7

128.3
133.1
139.2
140.6

992.6
,036.5
1,039.6
1,063.4

401.4
411.6
395.8
407.9

59.1
74.8
84.7
84.5

266.9
279.9
284.7
290.1

265.3
270.2
274.3
281.0

L,144.3
1,160.0
,173.1
.,192.8

678.8
682.2
689.8
691.4

390.1
398.1
394.5
402.6

67.3
68.4
74.8
78.7

1,105.4
1,131.6
1,138.7
.,159.4

418.3
430.3
440.9
451.0

92.7
95.8
83.1
82.2

295.5
301.3
306.6
313.7

298.9 ,212.8 704.4 401.2 83.6
304.2 ,240.8 743.7 404.4 85.9
308.1 ,271.7 761.0 408.7 96.1
312.6 ,307.3 782.7 414.1 100.2

.4
3.1
1.7
-4.3
1.8 - 3 . 8
1.1
1.7
-M
1.6
2.5 -i.3
1.6 -14.2
1.4
-6.0
1.9
9.9

!8
.8
.8
1.3
1.7
1.9

2.9
2.6
3.8
3.4
1.1
2.4
1.0
3.1
3.7
3.4

-63.8
-36.5
-17.8
.8
14.3

1.8
2.1
2.8
2.6
2.8

5.5
6.1
8.8
15.6
14.4

-30.7
-26.7
-115.3
-134.5
-124.4

67.4
69.0
70.8
72.9

6.6
5.7
7.1
15.9

-77.6
-130.4
-179.2

142.6
146.9
156.0
162.0

75.3
78.5
81.1
83.2

10.8
12.7
16.2
22.6

-151.7
-123.4
-133.5
-129.3

169.5
175.5
188.0
194.8

85.9
89.6
91.9
94.6

26.4
9.6
8.4
13.3

-107.4
-109.2
-133.0
-147.9

1
Includes an item for the difference between wage accruals and disbursements, not shown separately.
Source: Department of Commerce, Bureau of Economic Analysis.

321

8.4
-3.4

8.0
6.1
-3.8
-6.9
-.3
-7.1
-.0
3.1
.7
5.2
.7
.9
1.1 -12.6
-1.6

115.8
116.7
141.0
150.7
170.2
168.9
196.8
226.4
258.7
301.0

34.2
37.5
41.6
49.0
51.6
50.6
63.8
72.7
83.2
87.6

-1:8

-31.4
-44.1
-51.8
-39.5
5.4
14.4

.1
-.1

302.8
322.6
368.3
413.1
455.2
470.5
538.4
605.4
681.9
765.1




Less:
Dividends
received
by
government

Subsidies
less
current
surplus of
govern'
merit
enter-

-10.6
-19.4
-3.3

7.8
-4.7

-73.8

TABLE B-76.—Federal Government receipts and expenditures, national income and product accounts,
1960-86
[Billions of dollars; quarterly data at seasonally adjusted annual fates]
Expenditures

Receipts

Year or
quarter

Fiscal:2
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
1985 0....
1986'....

Total

Contri'ersonal Corpo- Indirect butions
rate
tax and profits business for
tax and social
nontax
nontax
tax
receipts accruals accruals insurance

Purchases of
goods and
services
Total i
Total

Transfer
payments

Grantsn-aid to
State
and
To
local
To
National
foreign- governdefense persons ers
ments

Net
nterest
paid

Subsidies
less
current
surplus
of
government
enterprises

Surplus
deficit
national
income
and
product
accounts

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
=58.9
= 113.6
~ 189,3
-170.3
-190.0
-166.1

1983:

\\Z""..Z.
tit ,
IV

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
166.3
186.5
222.6
250.4
289.4
311.4
294.1
303.2
340.6
368.8

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
69.3
50.9
53.8
70.1
75.7
93.1

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
53.5
50.3
51.0
55.2
56.1
57.1

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
197.0
213.9
228.3
259.1
286.1
307.6

91.3
98.1
106.2
111.7
117.2
118.5
1327
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
668.2
740.0
816.4
857.9
948.5
992.7

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
218.4
250.6
273.2
285.2
326.8
354.9

44.5
46.2
49.7
50.0
50.2
47.9
54.1
67.0
74.9
76.1
75.3
72.2
72.2
72.8
73.6
80.2
84.4
91.4
97.8
108.2
126.0
147.0
173.0
196.7
215.4
241.5
271.7

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
273.7
304.5
338.3
340.7
361.0
377.6

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
5.7
6.1
6.3
7.7
10.2
9.9

6.9
6.9
7.6
8.3
9.8
10.9
12.7
14.8
17.8
19.2
22.6
26.8
32.6
40.4
41.6
48.4
57.5
66.3
74.7
79.1
86.7
90.1
83.4
85.7
90.8
100.0
96.1

6.8
6.4
6.4
7.1
7.7
8.2
8.7
9.6
10.4
11.9
13.5
14.0
14.0
15.7
19.6
21.7
25,2
28.4
33.5
40.6
50.7
67.7
82.3
90.3
109.7
129.6
142.8

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
13.0
22.2
23.9
20.8
11.4

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
624.8
616.7
641.1
703.5

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
298.7
306.2
295.2
314.8

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
65.7
46.6
59.8
69.7

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
48.4
52.4
55.7

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
204.1
215.5
233.7
263.4

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
689.1
764.9
819.7
879.9

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
228.9
258.9
269.7
295.5

44.5
47.0
51.1
50.3
49.0
49.4
60.3
71.5
76.9
76.3
73.6
70.2
73.1
72.8
77.0
83.0
86.0
92.8
100.3
111.8
131.2
153.7
179.5
200.5
221.5

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
281.2
315.3
338.7
344.7

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
5.6
6.3
7.0
7.6

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
86.3
92.9

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
73.3
84.4
94.2
116.8

2.6
3.0
-3.9
4.0
4.2
4.2
3.9
.3
=3.3
4.5
4.6
.5
-1.8
5.5
4.7 -13.2
-6.0
4.5
8.4
5.2
6.5 -12.4
6.3 -22.0
7.9 -16.8
-5.6
7.8
5 5 = 11.5
6.9 =$9.3
5.8 -53.1
8.2 -45.9
9.5 -29.5
9.2 -16.1
11.5 - 6 1 . 2
12.3 - 6 4 . 3
16.1 -148.2
23.4 -178.6
22.5 -176.4

619.8
649.3
640.2
655.0

298.2
304.7
284.6
293.3

46.9
59.2
66.7
66.5

47.1
53.8
54.0
54.5

227.6
231.7
234.9
240.7

805.6
816.7
821.1
835.5

273.0
270.5
269.2
266.3

194.7
199.3
200.9
207.2

335.6
341.9
337.1
340.0

5.3
6.2
6.4
10.1

85.5
86.3
86.7
86.5

87.7
90.0
97.3
102.0

18.5
20.5
24.1
30.6

686.4
704.3
706.2

lX'

1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984 ^....

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
609.2
626.4
627.1
687.6
758.5
826.6

301.6
310.7
319 7
327.3

73 0
75 6
65*3

541
553
561

257 6
2620
2652

847 6
868C
886$
91713

267 6
2964
302 C
316ll

213.4
220 8
220'
23ll4

3411
3437
3462
34718

66

-185.7
= 167.3
-180.9
= 180.5

1984:
It
Ill
IV

P

1
2

9lf

90 6 107 6
93 2 110?
92] 122 C
12616

34 4 —161.3
171 —163.7
165 —180.6
2ll5

Includes an item for the difference between \ v
r
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.
» Estimates.
Sources: Department of Commerce (Bureau of Economic Analysis) and Office of Management and Budget.




322

TABLE B-77.—State and heal government receipts and expenditures, national income and product accounts,
1946-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Expenditures

Receipts

Calendar year
or quarter

Total

Personal Corpo- Indirect Contribu- Federal
rate
tax and profits tax and tions for g r a n t s *
social
nontax
tax
nontax
receipts accruals accruals insurance

L946
1947
1948
1949

13,0

1.5
1.7
2.1
2.4

0.5
.6

17.7
19.5

1950.
1951
1952
1953
1954

213
23.4
25.4
27.4
29.0

2.5
2.8
3.0
3.2
3.5

1955
1956
1957
1958

31.7
35.0
38.5
42 0
46.4

I960
1961
1962
1963
1964

49.9
54 0
58.5
63 2
69.5

1965
1966
1967
1968
1969

75.1
84 8
93.6
107 3
120.2

1970
1971
1972
1973
1974

0.6

.6

9.3
10.7
12.2
13.3

.8
.9
.8
.8
.8

14.6
15.9
17.4
18.8
19.9

3.9
.4.5
5.0
5.4
6.1

1.0
1.0
1.0
1.0
1.2

6.7
7.4
8.2
8.8

Total 1

Subsi- Surplus
or
dies
Trans- Net
deficit
Purless
fer
chases pay- interest current national
paid surplus
of
less
income
goods ments diviof
to
and
and
dends govern- product
services perment accounts
sons received enterprises
0.2
.1
.1
.1

-0.7
-.8
-.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

1.1
1.4
1.6
1.7
2.0

2.3
2.5
2.6
2.8
2.9

22.5
23.9
25.5
27.3
30.2

19.8
21.8
23.2
25.0
27.8

3.6
3.1
3.3
3.5
3.6

21.6
23.8
25.7
27.2
29.3

2.1
2.3
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

.1

3.9
4.3
4.8
5.1

A

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

10.9
12.8
14.6
17.5
20.6

2.0
2.2
2.5
3.1
3.4

46.1
49.7
54.0
60.9
67.6

5.0
5.7
6.7
7.2
8.3

11.1
14.4
15.9
18.6
20.3

75.1
84.3
94.7
107.2
118.7

71.1
79.8
89.3
101.0
111.2

7.3
8.1
9.4
10.5
12.2

-!9
-1.1
-1.4

-3.0
-3.0
-3.1
-3.2
-3.3

135.4
153.0
178 3
195.0
211.4

23.2
26.4
32.8
36.0
39.0

3.5
4,1
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
-1.7
-1.9
-3.3
-5.0

-3.6
-3.7
-4.2
-4.3
-4.4

1975
1976
1977
1978
1979

237.7
267 8
297.7

43.1
49.6
56.3

11

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
-5.3
-7.9
-13.8

-4.5
-4.8
-5.1

352 0

7.1
9.3
11.1
11.9
13.4

1980
1981
1982
1983
1984 P.

3861
420.0
441.9
478.2
523.2

78.8
89.0
97.8
109.0
120.3

14.5
15.4
14.0
16.0
18.8

174.4
194.9
210.3
228.0
248.6

29.7
32.7
35.8
39.0
42.6

88.7
87.9
83.9
86.3
92.9

355.5
382.4
409.0
434.1
471.1

340.8
367.6
391.5
415.8
452.4

39.7
43.2
46.7
50.7
54.8

-18.9
-22.2
-21.9
-24.5
-28.1

|
|
Ill
IV..

430.1
440.1
445.9
451.6

94.4
96.2
99.7
101.1

14.4
14.5
14.4
12.9

204.1
208.7
212.5
216.0

34.6
35.5
36.3
37.0

82.7
85.1
83.0
84.6

397.6
405.7
412.6
420.2

381.1
388.7
394.7
401.6

45.2
46.0
47.1
48.3

-21.9
-21.7
-21.8
-22.1

1983:
I
lit
IV .
.

458.3
473.5
4861
495.0

103.1
106.9
111.3
114.6

12.2
15.6
18.0
18.0

219.7
226.1
230.7
235.6

37.7
38.5
39.4
40.3

85.5
86.3
86.7
86.5

424.2
429.6
438.7
443.8

405.8
411.6
420.6
425.1

49.2
50.0
51.0
52.5

-23.1
-24.2
-25.0
-25.9

-7.7
-7.8
-7.9
-7.9

509.6
520.6
524.6

116.7
119.6
121.2
123.7

19.7
20.2
17.8

241.4
245.4
250.5
257.2

41.3
42.1
43.0
43.8

90.6
93.2
92.1
95.8

455.7
466.1
477.0
485.8

436.8
447.4
458.9
466.6

53.6
54.4
54.8
56.5

-26.7
-27.7
-28.7
-29.2

-8.0
-8.0
-8.1
-8.2

154

1982:

1984:
|
|
j

III
IV *

'.B
.9

1
Includes an item for the difference between wage accruals and disbursements, not shown separately.
Source: Department of Commerce, Bureau of Economic Analysis.




323

!o
.0
.0
.1

'.I
.1
'.I
-.1
-.3

-.9
-1.0
-1.1
-1.2
-1.3
-1.5
-1.6
-1.7
-1.7
-2.0

-2.2
-2.3
-2.5
-2.8
-2.8

TABLE B-78,—State and local government revenues and expenditures, selectedfiscalyears, 1927-83
[Millions of dollars]

(
leneral expenditures by functiont1

General revenues by source2
Fiscal year»
Total

Sales
and
Property gross
retaxes
ceipts
taxes

470
752

Individ- Corpo- frnm
ri+inn
ration TrOm
All
ual
net
Federal other»
income
taxes income Governtaxes
ment

70
74
80
153
218
224
276
342
422
543
788
998

92
79
49
113
165
156
272
451
447
592
593
846
817
778
744
890
984

116
232

Total

Education

Highways

Public
welfare

Alt
other4

1,793

7,210

2,235

1,809

7,765
7,181
7,644
8,757

2,311
1,831
2,177
2,491

1,741
1,509
1,425
1,650

151
444
889
827

3,015

1,643
1,449
1,604
1,811

1,069

3,269
2,952
3,215
3,547

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

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

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

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

3,267
3,791
4,090

1,505 8,663 14,556
1,695 10,002 15,951
1,929 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

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

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

24,575
29,246
33,176
36,932
42,080
46,426
50,738
55,129

7,273
9,174
10,738
12,128
13,321
14,143
15,028
14,258

55,589
62,444
69,592
75,164
83,029
90,294
87,282
89,983

57,191
61,124
68,436
79,864
95,466
111,599
128,926
138,009

256,731
274,215
296,983
327,517
369,086
407,449
436,896
466,421

97,216
102,780
110,758
119,448
133,211
145,784
154,282
163,876

23,907
23,058
24,609
28,440
33,311
34,603
34,520
36,655

32,604
35,906
39,140
41,898
47,288
54,121
57,996
60,484

103,004
112,472
122,476
137,731
155,277
172,941
190,098
205,406

1927

7,271

4,730

1932
1934 .
1936
1938

7,267
7,678
8,395
9,228

4,487
4,076
4,093
4,440

1,008
1,484
1,794

1940
1942
1944
1946
1948

9,609
10,418
10,908
12,356
17,250

4,430
4,537
4,604
4986
6,126

1,982
2,351
2,289
2986
4,442

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

1,065
1,127

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

I960
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

1962-63
1963-64
1964-65

62,269
68,443
74,000

19,833 14,446
21,241 15,762
22,583 17,118

1965-66
1966-67
1967-68
1968-69
1969-70

83,036
91,197
101,264
114,550
130,756

24,670
26,047
27,747
30,673
34,054

19,085
20,530
22,911
26,519
30,322

4,760
5,825
7,308
8,908
10,812

1970-71
1971-72
1972-73
1973-74
1974-75

144,927
167,541
190,214
207,670
228,171

37,852
42,877
45,283
47,705
51,491

33,233
37,518
42,047
46,098
49,815

1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83

256,176 57,001 54,547
285,157 62,527 60,641
315,960 66,422 67,596
343,278 64,944 74,247
382,322 68,499 79,927
423,404 74,969 85,971
457,654 82,067 93,613
486,878 89,253 100,247

1,016

948
800
945
858
954
855

»Fiscal i
8
Excludes revenues or expenditures of publicly owned utilities and liquor stores, and of Insurance-trust activities. Intergovernmental
receipts and payments between State and focal 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, community development, sanitation other than sewerage, general control, financial administration,
general public buildings, interest on genera! debt and unallocable items.
Note.—Data for fiscal years listetffrom 1962-63 to 1982-83 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.
Data are not available for intervening years.
Source: Department of Commerce, Bureau of the Census.




324

TABLE B-79.—Interest-bearing public debt securities by kind of obligation, 1967-84
[Millions of dollars]

End of year
or month

Total
interestbearing
public
debt
securities

Nonmarketable

Marketable

Total

Treasury
bills

Treasury
notes

Treasury
bonds l

Total

U.S.
savings
i

K

Foreign
government
and
public2

series

Government
account
series

Other^

Fiscal year:
1967
1968
1969

322,286
344,401
351,729

* 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

1970
1971....
1972....
1973....
1974....

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....
1984...,

906,402
996,495
1,140,883
1,375,751
1,559,570

594,506
683,209
824,422
1,024,000
1,176,556

199,832
223,388
277,900
340,733
356,798

310,903
363,643
442,890
557,525
661,887

83,772
96,178
103,631
125,742
158,070

311,896
313,286
316,461
351,751
383,015

72,727
68,017
67,274
70,024
72,832

25,158
20,499
14,641
11,450
8,806

189,848
201,052
210,462
234,684
259,534

24,164
23,718
24,085
35,593
41,843

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

May...
June..

1,435,612
1,455,761
1,452,099
1,484,392
1,495,393
1,501,131

1,081,880
1,100,064
1,097,732
1,123,344
1,131,252
1,126,634

346,888
349,461
350,230
347,259
344,209
343,282

597,581
607,975
604,915
629,787
635,781
632,120

137,411
142,628
142,586
146,299
151,262
151,233

353,732
355,697
354,368
361,047
364,141
374,496

70,715
70,981
71,318
71,537
71,780
72,042

10,804
9,802
9,916
9,861
9,009
8,847

235,045
236,988
234,640
240,864
243,217
253,182

37,168
37,926
38,494
38,785
40,135
40,425

July...
Aug...
Sept..
Oct....
Nov...
Dec...

1,536,894
1,558,969
1,559,570
1,609,870
1,629,384
1,660,633

1,159,824
1,184,698
1,176,556
1,207,639
1,225,037
1,247,403

347,431
360,447
356,798
359,066
365,208
374,369

657,216
666,141
661,887
686,531
691,858
705,092

155,177
158,109
158,070
162,042
167,971
167,942

377,070
374,271
383,015
402,231
404,347
413,230

72,259
72,494
72,832
72,980
73,339
73,058

9,363
8,560
8,806
8,453
8,710
9,114

254,915
252,197
259,534
278,187
278,407
286,199

40,533
41,020
41,843
42,611
43,891
44,859

1983:

Jan...
Feb...
Mar..

1984:

Jan
Feb

Mar....

1
2

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.
• Includes $5,610 million in certificates not shown separately.
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.




325

TABLE B-80.—Maturity distribution and average length of marketable interest-bearing public debt securities
held by private investors, 1967-84

End of year or month

Amount
outstanding,
privately
held

Maturity class
Average length
Within
1 year

Ito5

5 to 10

years

10 to 20

years

20 years
and over

Millions of dollars
Fiscal year:

Years

Months

1967
1968
1969

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

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

11

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

8
7
U
3
7

463,717
549,863
682,043
862,631
1,017,488

220,084
256,187
314,436
379,579
437,941

156,244
182,237
221,783
294,955
332,808

38,809
48,743
75,749
99,174
130,417

25,901
32,569
33,017
40,826
49,664

22,679
30,127
37,058
48,097
66,658

9
0
11
1
6

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
43,918
44,571
44,268

0
0
10
11

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

925,683
953,274
942,372
955,267
970,488
969,341

399,857
418,060
413,070
408,445
413,316
415,474

317,869
323,520
311,574
325,657
332,509
322,719

108,471
110,595
116,643
117,644
115,773
122,146

43,868
43,588
47,109
47,141

52,680
57,217
57,217
59,933
61,781
61,861

1,003,260
1,026,497
1,017,488
1,054,403
1,062,251
1,081,548

424,193
444,361
437,941
447,809
447,330
455,801

343,145
342,249
332,808
354,372
362,598
365,794

122,928
123,641
130,417
131,895
128,376
136,121

47,133
49,667
49,664
49,655
52,090
52,068

65,861
66,579
66,658
70,672
71,857
71,765

. .

1975
1976
1977....
1978
1979
1980
1981
1982
1983

1984

6
3

1983:
Jan
Feb
Mar

June*::::::::::::::::::::::::::::;

July
AUB

sept.;...:;::::::::::::::::;::::::
Oct
Dec,

0
0
1
1
1
3

1984:
Jan

Feb
Mar

June
July
Aug
Sept

Oct
Nov
Dec

Note.—AU 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.




326

TABUS B-81.—Estimated ownership of public debt securities, 1976-84
[Par values; > billions of dollars]
Held by private investors

End of month

Total
Held
public Held by
debt Govern- Federal
ment Reserve Total
securi- accounts
ties
Banks

Nonbank investors
Individuals3

Commercial
banks2

Total

Total

State Foreign
Insur- Money
and
ance
and
Sav- Other com- mar- Corpora- local internaket
tions6 governings secu- panies funds
6 tional'
ments
bonds* rities

Other
investors 8

1976:
June
Dec

620.4
653.5

149.6
147.1

94.4
97.0

376.4
409.5

91.4
103.5

285.0
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

33.8
39.8

69.8
78.1

46.8
45.7

1977:
June
Dec

674.4
718.9

151.2
154.8

102.2
102.8

421.0
461.3

102.7
98.9

318.3
362.4

104.9
107.8

74.4
76.7

30.5
31.1

18.1
19.9

.8
.9

22.1
18.2

46.8
51.9

87.9
109.6

37.7
54.1

1978:
June
Dec

749.0
789.2

161.1
170.0

110.1
110.6

477.8
508.6

97.8
95.0

380.0
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

59.5
64.5

119.5
133.1

53.7
63.2

1979:
June
Dec

804.9
845.1

178.5
187.1

109.7
117.5

516.6
540.5

86.1
88.1

430.5
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

71.2
74.1

114.9
119.0

85.6
97.3

1980:
June
Dec

877.6
930.2

194.9
192.5

124.5
121.3

558.2
616.4

97.4
112.1

460.8
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

78.9
87.9

118.2
129.7

105.6
122.8

1981:
Mar
June
Sept
Dec

964.5
971.2
997.9
1,028.7

190.9 . 119.0
199.9 120.0
208.1 124.3
203.3 131.0

654.6
651.2
665.4
694.5

117.0
119.7
112.7
111.4

537.6
531.5
552.7
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

91.8
96.9
99.8
104.3

138.2
136.6
130.7
136.6

145.3
135.3
155.5
163.0

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

108.4
113.6
122.4
127.8

136.1
137.2
140.6
149.5

185.5
187.4
199.8
217.0

1983:
Mar
June
Sept
Deb

1,244.5
1,319.6
1,377.2
1,410.7

201.2
229.3
239.0
2363

136.7 906.6
141.7 948.6
155.4 982.7
1519 10226

153.2
171.6
176.3
1888

753.4
777.0
806.4
8337

116.7
121.3
128.9
1334

68.8
69.7
70.6
715

47.9
51.6
58.4
619

43.7
47.4
51.2
567

44.8
28.3
22.1
22.8

27.2
32.8
35.9
39.7

137.1
144.9
149.9
155.1

156.2
160.1
160.1
166.3

227.7
242.2
258.3
259.8

1984:
Mar
June
Sept

1,463.7
1,512.7
1,572.3

239.8
257.6
263.1

150.8 1,073.0
152.9 1,102.2
155.0 1,154.1

189.8
182.3
183.0

883.2
919.9
971.1

136.2
142.2
147.5

72.2
72.9
73.7

64.0
69.3
73.8

57.1
61.6
58.6

19.4
14.9
13.6

42.6
45.3
47.7

162.9
165.0

166.3
171.5
175.5

298.7
319.4

1

U.S. savings bands, 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,
and Edge Act corporations owned by domestically chartered and foreign banks.
3
Includes partnerships and personal trust accounts.
• Includes U.S. savings notes. Sales began May 1,1967, and were discontinued June 3 0 , 1 9 7 0 .
5
Exclusive of banks and insurance companies.
<• Includes State and local pension funds.
7
Consists of the investment of foreign balances and international accounts in the United States.
B
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,
2

Source: Department of the Treasury.




327

TABLE B-82.—Corporate profits with inventory valuation and capital consumption adjustments, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Year or quarter

Corporate profits after tax with inventory
valuation and capital consumption adjustments

Corporate
profits with
inventory

Corporate
profits tax
liability

and capital
consumption
adjustments

Total

ends

Undistributed
profits with
inventory
valuation
and capital
consumption
adjustments

1929...
1933...
1939...,

9.0
-17
5.3

1.4
,5
1.4

7.7
-2.3
3.9

5.8
2.0
3.8

1.9
-4.3
.1

1940.
1941..
1942..
1943..
1944..

8.6
14.1
19.3
23.5
23.6

2.8
7.6
11.4
14.1
12.9

5.8
6.5
7,9
9.5
10,7

4.0
4.4
4.3
4.4
4.6

1.8
2.1
3.6
5.0
6.1

1945
1946
1947
1948
1949

19.0
16.6
22.3
29.4
27.1

107
9,1
11.3
12.4
10.2

8.4
7.5
11.0
17.0
16.9

4.6
5.6
6.3
7.0
7.2

3.8
1.9
47
10.0
9.7

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
16.1
167
16.0
17.5

8.8
8.5
8.5
8.8
9.1

7.2
7.6
8.2
7.2
8.4

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
107
10.3
8.2
13.8

1960
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
85.1
82.4
89.1
85.1

30.9
337
32.5
39.2
39.5

49.1
51.4
49.9
50.0
45.6

19.1
19.4
20.2
22.0
22.5

30.0
32.0
297
27.9
23.1

1970
1971
1972
1973
1974

71.4
83.2
96.6
108.3
94.9

34.2
37.5
41.6
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
138.1
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
527

29.1
36.9
53.7
62.2
54.5

1980
1981
1982
1983

175.4
189.9
159.1
225.2
284.5

84.8
81.1
607
75.8
88.4

90.6
108.8
98.4
149.4
196.1

58.6
66.5
69.2
72.9
80.5

32.1
42.3
29.2
76.5
115.6

159.9
1617
163.3
151.6

62.9
62.9
61.9
55.0

97.0
98.8
101.4
96.6

69.2
68.6
69.0
70.2

27.9
30.1
32.4
26.4

179.1
2167
245.0
260.0

59.1
74.8
847
84.5

120.0
141.9
160.2
175.5

71.1
71.7
73.3
75.4

48.8
70.2
86.9
100.0

277.4
291.1
282.8

927
95.8
83.1

1847
195.2
199.8

77.7
79.9
81.3

107.0
115.3
118.4

1984 "...
1982:
III!!!
1983:

It IIIIII
1984:
I
II

Source: Department of Commerce, Bureau of Economic Analysis.




328

TABLE B-83.—Corporate profits by industry, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits with inventory valuation adjustment and without capital consumption adjustment
Domestic industries
Financial *

Year or
Total

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...

Total

Total

Manufacturing^

5.2

Transportation
and
public
utilities

and
retail
trade

Other

0.9

1.0
—.5

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
14.8
16.7

.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
4.9
4.2
14.8
10.6

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
18.8
17.6
22.5
27.6

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
31.8
25.9
33.4
45.3

~'.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
18.2
15.9
16.4
19.9

13.6
19.0
21.0
24.9

15.4
15.9
15.6
14.8

-1.8
3.2
5.4
10.1

126.2
119.6
115.5
94.8

58.0
57.4
60.4
42.4

20.2
20.6
16.5
13.3

30.2
25.3
24.0
24.1

17.7
16.3
14.6
15.1

134.9
162.4
180.6
190.8

28.4
32.0
29.5
28.5

14.4
14.5
14.9
15.5

14.0
17.5
14.6
13.1

106.5
130.4
151.1
162.3

44.9
59.3
73.8
82.9

18.9
22.7
25.0
23.5

25.3
33.0
35.9
39.5

17.4
15.3
16.5
16.4

204.1
217.5
200.2

28.7
28.9
26.6

16.0
16.4
17.1

12.7
12.5
9.5

175.4
188.6
173.6

89.8
92.3
78.3

27.3
28.3
27.1

40.6
47.0
46.8

17.9
21.0
21.5

'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
19.5
19.6
29.6
27.3

161.3
160.9
158.8
143.2

139.8
138.6
136.5
119.7

\\Z

157.3
186.1
208.1
216.3

I
II...
III..

229.8
238.7
224.5

III...
IV...
1984:

Total

~X3
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
84.9
54.5
65.2
84.3

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
173.2
133.6
167.2
204.4

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

0.0
.0
.0
.0
.0
.0
.0

Other

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
153.7
114.0
137.6
177.0

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
98.7
120.6
151.6
178.5
205.1
209.6
191.7
197.6
156.0
192.0
228.6

1983...

Federal
Reserve
banks

Nonfinancial

1.3

.1
\\
.2
2
A
A
.3
.3
'.S
.6

1.3
.3

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.




329

TABLE B-84.—Corporate profits of manufacturing industries, 1929-84
[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

5.2

Total

Primary
metal
industries

Fabri- Machin- Electric Motor
and
cated
ery,
elec- vehicles Other
and
metal except tronic
prod- electri- equip- equipment
ucts
cal
ment

Total

Food Chemicals
and
and
kindred allied
prod- products
ucts

Petroleum
and
coal
products

Other

2.6

2.6

l!3

~1

5.5
9,5
11.8
13.8
13.2
9.7
9.0
13.6
17.6
16.2

31
64
72
81
7.4
4.5
2.4
5.8
7.5
8.1

1.6
1.5

.8

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

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

26.6
34.1
40.7
45.5
39.0
52.6
69.2
78.3
86.9
85.6

1.7

1.8
1.7

1.2
1.3
1.5
1.4
1.2
1.1
1.2
1.5
1.3
1.7

1.4
2,1
3.1
2.4
2.4
2.6
2.1
4.1
2.2
2.6
.9
3.0

2.4
3.1
4.6
5.7
5.9
5.2
6.6
7.8
10.0
8.1

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

23
27
23
2.8
2.7
30
3.3
2.6
2,1
2.5

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

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

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

2.7
2.9
=5.0
-2.3
.3

4.2
4.4
2.6
3.5
5.6

7.4
8.2
3.5
2.0
5.0

5.2
4.6
1.8
.9
2.6

-3.8
7,4
9.8

4.7
2.6
-1.1
.4
4.4

52.5
61.9
51.9
53,4
56.7

7.1
6.6
7.1

4.4
7.1
5.4
-6.3

-3.3
-6.2
-5.1
-5.3

3.7
3.0
2.6
1.4

7.3
3.5
2.4
.6

1.8
2.9
2.5
.1

-3.2
3.9
3.6
-1.0

-1.9
.1
-.7
-2.0

53.6
50.2
55.1
48.7

6.6
7.2
7.6

6.9
6.8
5.2
3.1

30.4
24.8
29.5
25.6

44.9
59.3
73.8
82.9

1.7
8.7
14.3
22.7

-2.7
^2.6
-2.3
-1.4

1.8
3.2
3.7
5.3

.4
2.6
2.0
2.9

2.7
5.0
10.1
11.7

-1.3
7
2.3

43.2
50.6
59.4
60.2

6.5
6.6
6.1
7.1

5.2
6.0
7,8
8.1

16.6
22.0
28.0
27.6

15.0
16.1
17.5
17.3

89.8
92.3
78.3

30.3
27.6
26.4

14.6
7.9
7.6

3.6
5.2
4.9

59.4
64.7
51.9

9.0
9.5
7.8

23.6
27.9
19.3

19.1
19.5
18.2

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

1.2
1.3
1.6
2.3
2.3
1.9
1.7
1.7
2.1
2.0
1.4
2.1

2.0
1.6
1.6
2.0
2,5
3.1
3.6
2.7
1.9
1.4

.8
1.0
1.1
1.3
1.4
2,0
2.4
2.4
2.3
2,0

10.2
16.3
22.4
24.3
13.2
18.9
30.4
38.1
44.3
37.1

.8
.7
1.6
2.2
5.4
2.9
2.1
1.1
3.5
3.5

72.9
84.9
54.5
65.2
84.3

20.4
23.0
2,6
11.9
27.6

58.0
57.4
60.4
42.4

5.2
6.0
5.7

.7
.8

2.8
1,9
3.1

ii

7.2
9.4
8.9
4.7

1.9
1.6

1.7
1.8

28
1.9

28.2
31.6
27.6
23.5
22.6

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.




330

TABLE B-85.—Sales, profits, and stockholders' equity, all manufacturing corporations, 1950-84
[Billions of dollars]
All manufacturing corporations
Year or
quarter

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961.,!
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1973: IV
New series:
1973: IV

Profits
Sales
(net)

Before After
income income
taxes 1 taxes

Stockholders'
equity 2

Durable goods industries
Profits
Sales
(net)

Before

After

Nondurable goods industries

Stockholders'
equity2

Profits
(net)

Before After
income income
taxes 1

Stockholders'
equity 8

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

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

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

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
U5.1
122.6
130.3
142.3

708.8
751.1
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

849.5

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
1983

1,912.8
2,144.7
2,039.4
2,114.3

145.8
158.6
108.2
133.1

92.6
101.3
70.9
85.8

668.1
743.4
770.2
812.8

889.1
979.5
913.1
973.5

57.4
67.2
34.7
48.7

35.6
41.6
21.7
30.0

317.7
350.4
355.5
372.4

1,023.7
1,165.2
1,126.4
1,140.8

88.4
91.3
73.6
84.4

56.9
59.6
49.3
55.8

350.4
393.0
414.7
440.4

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

490.8
527.1
534.7
561.6

24.1
34.6
36.2
38.2

15.5
22.1
23.2
25.0

787.7
804.1
821.9
837.6

220.6
243.6
243.9
265.4

7.6
13.2
12.7
15.2

4.6
8.3
8.0
9.2

359.6
368.1
376.7
385.1

270.3
283.5
290.8
296.2

16.5
21.3
23.5
23.0

11.0
13.8
15.2
15.8

428.1
436.0
445.2
452.5

565.9
597.4
576.4

42.3
48.4
38.5

26.5
31.0
25.7

852.1
858.2
865.2

270.4
290.9
276.7

19.0
23.0
16.9

11.7
14.8
11.4

392.4
398.5
404.9

295.5
306.4
299.7

23.3
25.4
21.7

14.7
16.2
14.3

459.7
459.7
460.3

1981:

!L:E
IV
1982:

\\ZZZZZ
Ill
IV

1983:
in
IV
1984:

\iZZ.ZZ
in

1
tn the old series, "income taxes" refers to Federal income taxes only, as State and local income taxes had already been deducted.
In 2 new series, no income taxes have been deducted.
the
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.




331

TABLE B-$6.~-Relation of profits after taxes to stockholders' equity and to sales, all manufacturing
corporations, 1947-84
Ratio of profits after income taxes (annual
rate) to stockholders' equity—percentl
Year or quarter

Profits after income taxes per dollar of

All
manufacturing
corporations

Durable
goods
industries

Nondurable
goods
industries

All
manufacturing
corporations

Durable
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

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

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

7.7
5.3
4.5
4.2
4.6

13.8
12.8
11.3
8.0
10.4
8.5
8.1
9.6
10.1
11.7

11.4
11.8
10.6
9.2
10.4

1960. . .
1961
1962... .
1963.. .
.
1964

12.6
12.3.
10.9
8.6
10.4
9.2
8.9
9.8
10.3
11.6

7.1
4.9
4.3
4.3
4.5
5.4
5.3
4.8
4.2
4.8

4.0
3.9
4.4
4.5
5.1

1965
1966
1967
1968
1969

13.0
13.4
11.7
12.1
11.5

13.8
14.2
11.7
12.2
11.4

12 2
12.7
11.8
11.9
11.5

4.4
4.3
4.5
4.7
5.2
5.6
5.6
5.0
5.1
4.8

5.7
5.6
4.8
4.9
4.6

1970
1971
1972.. .
1973
1973: IV

9.3
9.7
10.6
12.8

8.3
9.0
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

13.4

12.9

14.0

4.7

Nondurable
goods
industries

4.5
5.0

New series:
1973: IV

9.8
9.6
9.9
10.4
11.5

5.7
5.2
4.8
3.9
4.8

14.3

13.3

15.3

5.6

14.9

12.6

17.1

5.5

4.7

11.6
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
5.4
5.3
5.4
5.7

4.1
5.2
5.3
5.5
5.2

13.9
13.6
9.2
10.6

11.2
11.9
6.1
8.1

16.3
15.2
11.9
12.7

4.8
4.7
3.5
4.1

4.0
4.2
2.4
3.1

13.6
15.6
13.4
12.0

12.0
14.6
11.6
9.5

15.0
16.6
14.9
14.2

4.7
5.3

4.3
4.9
4.2
3.5

in
iv

10.1
10.5
9.2
7,2

7.7
9.2
5.9
1.7

12.1
11.6
12.0
11.9

3.8
3.8
3.5
2.8

3.0
3.4
2.4

1983:
I
II
Ill
IV

7.9
11.0
11.3
11.9

5.1
9.0
8.5
9.5

10.2
12.7
13.7
14.0

3.2
4.2
4.3
4.5

2.1
3.4
3.3
3.5

12.4
14.5
11.9

12.0
14.8
11.3

12.8
14.1
12.4

4.7
5.2
4.5

4.3
5.1
4.1

1974
1975
1976
1977
1978
1979

;:::

1980
1981
1982
1983
1981:
I
||
MI""""!!"

iv
1982:

n'!!!!!!!!Z

1984:

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.




332

TABLE B-87.—Sources and uses of funds, nonfarm nonfinancial corporate business, 1946-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Sources

Uses
External

Internal
Year

or
q

r

ter "

Total

Inventory
Domes- valuation Capital
conForeign
tic
and
Total undis- capital sumption earn- Total
allow- ings 1
tributed conprofits sumption ances
adjustments

Credit market funds
Securi- Loans
Total
ties
and Other2
shortTotal
and
mort- term
gages paper

DiscrepCapital Increase
(sources
in
financial less uses)
assets

Wt

1946...
1947...
1948...
1949...

187
27.0
28.9
19.9

8.1
12.9
19.1
19.5

8.1
12.1
13.2
8.7

-8.2
-9.4
-6.1
-2.0

7.6
9.2
10.8
117

0.7
1.0
1.3
1.1

10.6
14.1
97
.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
217
23.9

13.1
9.6
7.8
8.0
7.6

-8.9
-5.7
-3.5
-4.8
-3.5

12.6
14.6
15.7
167
17.8

1.3
1.7
1.9
1.8
2,0

24.0
16.2
8.0
6.1
5.7

8.1
10.5
95
57
6.5

4.2
6.4
8.0
6.0
67

3.9
4.1
1.4
-.4
-.2

15.9
57
-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

17
-1.2
.6
— 1
U

1955..
1956..
1957..
1958..
1959...

527
44.9
43.4
41.9
56.3

29.5
29.5
31.5
30.3
36.0

11.8
10.9
9.6
6.5
10.7

-3.7
-5.9
-4.9
-3.4
-3.0

19.0
217
237
24.7
257

2.4
2.8
3.1
2.5
2.7

23.2
15.4
11.9
117
20.2

10.2
12.8
12.3
10.5
12.3

6.4
7.5
10.4
10.5
8.1

37
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.S
277
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

8.0
7.2
9.6
11,1
14.6

-2.3
-1.2
1.4
2.3
2.4

26.6
27.4
28.2
29.2
30.6

3.0
3.2
3.6
3.9
4,2

13.2
19.8
17.3
22.0
22.1

12.1
12.9
12.8
12.5
14.1

7.5
107
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
157
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

19.1
21.2
18.1
17.1
13.4

2.5
1.8
2.5
.4
-1.8

32.5
35.4
38.6
42.3
46.7

4.5
4.2
4.4
5.2
6.1

33.3
35.0
31.1
48.5
51.1

18.5
23.8
27.8
277
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

827
91.3
88.5
106.0
115.3

61.0
74.7
72.2
75,4
837

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
917
85.6

7.6
127
18.1
28.1
32.4

-4.1
-3.2
-3.8
-17.3
-417

51.8
56.8
62.0
67.2
78.7

6.5
7.1
8.6
13.7
16.3

40.5
51.8
66.6
100.7
1047

35.3
37.2
43.4
567
70.2

26.3
32.8
26.4
207
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
345.2

1197
134.2
157.4
1757
188.8

34.0
43.9
547
62.8
67.3

-21.1
-27.5
-26.8
-36.1
-56.8

93.8
103.6
114.3
129.2
147.7

13.0
14.3
15.1
197
30.6

37.3
76.8
96.7
141.8
156.4

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
68.2

150.9
201.8
237.6
293.6
3437

109.7
148.3
175.1
201.6
219.4

41.2
53.5
62.5

6.0
9.2
16.5
23.8
1.5

1980...
1981...
1982...
1983...

335.2
364.2
309.4
436.3

189.5
230.4
234.3
280.5

49.0
46.0
10.4
18.6

-57.2
-29.6
-5.5
21.8

167.8
189.5
207.1
215.2

29.9
24.4
22.4
24,8

1457
133.8
75.0
155.9

90.9
91.5
81.4
87.8

52.4
21.8
43.9
56.4

38.5
697
37.5
31.4

54.8
42.3
-6.4
68.1

317.6
334.2
258.0
384.3

221.2
271.3
229.6
256.2

96.5
62 9
28.4
128.1

17.6
30.0
51.3
52.1

1982:
1
II
III....
IV....

309.4
324.4
328.8
274.8

229.9
234.6
238.8
234.0

13.8
13.9
12.0
1.6

-6.6
-7.0
-4.7
-3.4

201.2
205.4
209.2
212.4

21,5
22.3
22.3
23.5

79.5
89.8
90.0
40.8

98.0
94.0
89.1
44.6

24.4
73.7 - 1 8 . 5
56.0 - 4 . 1
38.0
50.5
38.6
.9
74.6 - 3 0 . 1 - 3 . 8

249.9
281.2
274.3
226.8

252.1
238.0
229.4
199.1

-2.2
43.2
44.9
277

59.6
43.3
54.5
48.0

333.9
449.2
443.3
519.1

250.4
2697
292.5
309.3

-1.3
15.1
30.6
30.2

17.9
18.4
17.2
33.9

211.4
212.5
217.3
2197

22.4
23.7
27.5
25.6

83.5
179.5
1507
209.8

68.7
86.5
66.6
129.4

67.0
85.9
37.0
35.7

1.7
.6
29.6
93.6

14.8
93.1
84.1
80.4

282.3
390.5
395.4
468.8

206.9
255.3
270.6
291.9

75.4
135.1
124.8
177.0

51.5
587
47.8
50.3

516,1
500.6
448.8

319.6
3317
337.5

37.6
39.8
29.9

33.4
44.1
567

222.8
226.5
230.2

25.7
21.3
207

196.6
168.9
111.3

112.6 - 2 3 7
81.3 -76.9
65.0 - 7 . 4

136.3
158.2
72.4

83.9
87.6
46.3

483.5
458.3
443.0

354.5
364.3
386.8

129.0
94.0
56.2

327
42,2
5.8

3

1983:

HI;
III....
IV....
1984:
t
HI;;;;

1
Foreign branch profits, dividends, and subsidiaries' earnings retained abroad.
* Consists of tax liabilities, trade debt, and direct foreign investment in the United States.
9
Plant and equipment, residential structures, inventory investment, and mineral rights from U.S. Government.

Source: Board of Governors of the Federal Reserve System.




333

TABLE B-88.—Current assets and liabilities of U.S. corporations, 1940-84

[Billions of dollars, except as noted]
Current assets
End of
period

Total

Cash*

U.S.
Government 2
securities

Current liabilities

Notes
and
accounts
receivable

Inventories

Other
current
assets

Total

Net
Notes
Other
and
current working
capital
accounts liabilpayable
ities

Current
ratio 8

All corporations 4
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

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

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

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

9.6

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

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

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

Nonfinancial corporations8
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

735.4
759.0
827.4

16.5
16.8
16.7
15.8
14.4
13.0
10.3
11.5
10.6

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

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

1,043.7
1,214.8
1,327.0
1,418.4
1,432,7
1,557.3

73.2
82.1
88.2
97.2
105.5
118.0
126.9
135.5
147.0
165.8

11.1
19.0
23.5
18.2
17.2
16.7
18.7
17,6
22.8
30.6

265.8
272.1
292.9
330.3
388.0
459.0
506.8
532.0
519.2
577.8

319.5
315.9
342.5
376.9
431.8
505.1
542.8
583,7
578.6
599.3

453.4
65.9
451.6
69.9
495.1
80.3
557,1
90.1
669.5
101.1
116.0
807.3
889.3
131.8
149.5
970.0
165.2
976.8
183.7 1,043.0

269.8
264.2
282.1
317.6
383.0
460.8
513.6
546.3
543.0
577.9

183.6
187.4
213.0
239.6
286.5
346.5
375.7
423.7
433.8
465.2

282.0
307.4
332.4
355.5
374.3
407,5
437.8
448.4
455.9
514,3

1.622
1.681
1.671
1.638
1,559
1.505
1.492
1.462
L467
1.493

1,444,2
1,468.0
1,522.8
1,557.3

143.1
147.9
150.5
165.8

26.0
28.2
27.0
30.6

525.3
539.3
565.0
577.8

577.6
576.2
597.3
599.3

172.1
983.4
176,4
990.2
183.0 1,026.6
183.7 1,043.0

530.9
536.6
559.4
577.9

452.6
453.6
467.2
465.2

460.8
477.8
496.3
514.3

1.469
1.483
1.483
1.493

1,600.6
1,630.8

159.3
155.5

35.1
36.8

596.9
612.6

623.1
633.3

186.3 1,079.0
192.5 1,111.5

584.1
606.0

495.0
505.5

521.6
519.3

1.483
1.467

912.7

7,7

1
Includes time certificates of deposit.
* Includes Federal agency issues.
Total current assets divided by total current liabilities.
* Excludes banks, savings and loan associations, and insurance companies.
s
Based on data from ''Statistics of Income," Department of the Treasury.
* Excludes banks, savings and loan associations, insurance companies, investment companies, finance companies (personal and
9

' Federal Trade Commission. See
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.




334

TABLE B-89.—State and municipal and business securities offered, 1934-84
[Millions of dollars]

Year or quarter

1934

State
Business securities offered for cash l
and
municipal
Type of security
Industry of issuer
securities
offered
Total
Bonds
for cash
Electric,
Manufac- gas, and TransporCommuni(princi- offerings Common Preferred
and
stock 2
turing 3
tation •
cation
stock
pal
water*
notes
amounts)

Other

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
l!564
1,779

1,050
1,834
1,303
1,105
2,189
945
2,003
1,975
1775
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
1975
1976
1977 6
1978 ....
1979

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
7414
8,305
8,047
7J24
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
4832
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

1980..
1981..
1982..
1983..

47,133
46,134
77,179
83,348

67,126
65,888
72,152
102,620

19,282
25,226
23,197
45,153

3,194
1,696
4,948
?,615

44,650
38,966
44,007
49,852

20,857
15,287
13,239
22,814

13,746
13,245
16,408
12,594

2,306
1,883
2,093
4,161

6,865 23,356
5,867 29,608
3,895 36,520
5,528 57,523

1984.- First three
quarters

57,689

61,767

16,237

2,916

42,614

9,095

4,982

1,350

9 5 45,365
7

17,329
27,342
16,973
21,703

28,266
33,212
19,996
21,146

11,751
13,274
9,924
10,204

3,470
1,717
1,407
1,021

13,045
18,221
8,665
9,921

6,321
8,872
4,583
3.038

3,620
3,833
2,167
2,974

1,286
864
895
1,116

2,088
1,872
1,467
101

14,951
17,771
10,884
13,917

14,532
18,619
24,538

24,381
15,449
21,937

6,286
4,823
5,128

1,122
1,117
677

16,973
9,509
16,132

1,788
2,785
4,522

1,491
1,382
2,109

432
379
539

476
270
229

20,194
10,633
14,538

1983:
I
IV...
1984:

\\Z

III...

1
Business securities offered include securities offered by corporate and non-corporate business enterprises such as limited
partnerships. Beginning 1978 excludes private placements.
* 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.
6
Prior to 1948, includes railroad issues only.
8
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 ana 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."




335

TABLE B-90.—Common stock prices and yields, 1949-84
Common stock yields
(percent)*

Common stock prices »
New York Stock Exchange indexes (Dec. 31,1965=50) a
Dow

Year or month
Composite

Industrial

Transportation

Utility

Finance

industrial
average 3

Standard
& Poor's
composite
index
(1941-

Dividendprice
ratio 8

15.23

6.59

15.48

18.40
22.34
24.50
24.73
29.69
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

Earningsprice
ratio 7

43=10) *

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

9.02
10.87
13.08
13.81
13.67
16.19
21.54
24.40
23.67
24.56
30.73
30.01
35.37
33.49
37.51
43.76
47.39
46.15
50.77
55.37
54.67
45.72
54.22
60.29
57.42
43.84
45.73
54.46
53.69
53.70
58.32

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

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

1980
1981
1982
1983
1984

68.10
74.02
68.93
92,63
92.46

78.70
85.44
78.18
107.45
108.01

60.61
72.61
60.41
89.36
85.63

83.25
84.74
87.50
90.61
94.61
96.43
96.74
93.96
96.70
96.78
95.36
94.92

95.37
97.26
100.61
104.46
109.43
112.52

1983:
Jan....
Feb
Mar

fc:
June
July
Aug
Sept
Oct
Nov
Dec
1984:
Jan
Feb
Mar

July
Aug....
Sept...
Oct
Nov
Dec

55.85
66.27
62.38
69.87
81.37
88.17
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

60.00
70.38
78.35
70.12
49.67
47.14
52.94
55.25
56.65
61.42

179.48
216.31
257.64
270.76
275.97
333.94
442.72
493.01
475.71
491.66
632.12
618.04
691.55
639.76
714.81
834.05
910.88
873.60
879.12
906.00
876.72
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
3.14
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

37.35
38.91
39.75
47.00
46.44

64.25
73.52
71.99
95.34
89.28

891.41
932.92
884.36
1,190.34
1,178.48

118.78
128.05
119.71
160.41
160.46

5.26
5.20
5.81
4.40
4.64

12.66
11.96
11.60
8.03

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

4.79
4.74
4.59
4.44
4.27
4.26

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
1,257.64

144.27
146.80
151.88
157.71
164.10
166.39
166.96
162.42
167.16
167.65
165.23
164.36

96.16
90.60
90.66
90.67
90.07
88.28

112.16
105.44
105.92
106.56
105.94
104.04

97.98
86.33
86.10
83.61
81.62
79.29

47.43
45.67
44.83
43.86
44.22
43.65

95.79
89.95
89.50
88.22
85.06
80.75

1,258.89
1,164.46
1,161.97
1,152.71
1,143.42
1,121.14

87.08
94.49
95.68
95.09
95.85
94.85

102.29
111.20
112.18
110.44
110.91
109.05

76.72
86.86
86.88
86.82
87.37
88.00

44.17
46.49
47.47
49.02
49.93
50.58

79.03
87.92
91.59
92.94
95.28
95.29

1,113.27
1,212.82
1,213.51
1,199.30
1,211.30
1,188.96

166.39
157.25
157.44
157.60
156.55
153.12
151.08
164.42
166.11
164.82
166.27
164.48

8.12
...„.„„

4.21
4,35
4.24
4.25
4.31
4.32

8.01

4.27
4.59
4.63
4.64
4.72
4.86

9.57

454
4.62
4.61

8*51

""io'M
9.96

•Averages of dally 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.
8
Standard & Poor's series, based on 500 stocks in the composite index.
•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.
Note.—All data relate to stocks listed on the New York Stock Exchange.
3

Sources: New York Stock Exchange, Dow Jones & Co., Inc., and Standard & Poor's Corporation.




336

TABLE B-91.—Business formation and business failures,

1940-84

Business failures»
Index
of net
business
formation
(1967100)

Year or month

New
business
incorporations
(number)

Amount of current liabilities
(millions of dollars)

Number of failures
Business
failure
rate2

Liability size class
Total

Under
$100,000

$100,000
and over

Liability size class
Total

Under
$100,000

$100,000
and over

86.4

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
3155
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
803
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
14S.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
1265.2
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
1983*.

122.4
118.6
113.2
114.8

533,520
581,242
566,942
600,400

42.1
61.3
89.0
109.7

11.742
16,794
24,908
31,334

5,682
8,233
11,509

6,060
8,561
13,399

4,635.1
6,955.2
15,610.8
16,072.9

272.5
405.8
541.7

4,362.6
6,549.3
15,069.1

1983: Jan
Feb

fc ::

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

103.1
96.9
105.5
94.8
93.7
110.2

2.455
2,397
2,881
2,471
2,292
2,641

920.0
2,188.6

Sept
Oct
Nov
Dec

115.2
114.4
115.8
118.0
117.8
116.3

48.601
52,828
50,445
50,441
51,642
51,557

106.5
135.8
111.8
108.1
144.0
110.0

2,313
3,218
2,384
2,511
3,287
2,484

829.2
1,353.1
947.2
1,816.8
1,624.5
868.5

115.9
119.1
117.6
118.5
115.8
116.6

53,044
53,591
53,424
53,933
51,166
54,729

115.5
118.2
119.6
119.9
120.6

52,092
51723
51,892

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

io'i.9

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

. .

Seasonally adjusted

Mar

1984:

Jan
Feb
Mar
%
=
June
July
Aug
Sept
Oct
Nov

2,158.1
1,086.4
1154 7

U25.6

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.




337

TABLE B-92.—Farm income, 1929-84
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Income of farm operators from farming
Net farm income

Gross farm income

Year or quarter

Cash marketing receipts
Total1

Livestock
and
products

Total

6.2
2.8
4.5
4.9
6.5
9.0

value OT

Crops

5.1
2.5
3.3
3.5
4.6
6.5
8.1
9.2
9.7

1929
1933
1939

13.8

11.3

6.9

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

11.3
14.3
19.9
23.3
24.0
25.4
29.6
32.4
36.5
30.8

5.3
7.9
8.4
11.1
15.6
19.6
20,5
21.7
24.8
29.6
30.2
27.8

11.5
11.4
12.0
13.8
16.5
17.1
15.4

11.0
13.1
13.1
12.4

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
31.0
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
14.1
13.6
13.5
14.0
12.3
14.2
14.7

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

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

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

58.8
62.1
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

1980
1981
1982

150.2
167,9
161.8
151,4

140.5
142.6
144.8
138.7

67.8
69.2
70.1
69.2

72.7
73.3
74.6
69.5

169.9
160.9
153.3
163.2

146.7
143.0
141.2
148.1

69.8
70.8
70.7
69.2

76.9
72.2
70.5
78.9

153.3
147.3
148.5
156.6

144.6
138.3
143.7
128.3

70.4
68.7
67.6
70.1

169.8
165.8
176.4

134.2
138.9
147.5

73.0
70.4
69.1

1983
1982:
II
III....
IV....
1983:
IL.'"
III....

10.7

-0.1

-.2
.1
.3
.4
1.1
-.1
-.4
-.4
.0
-U
1.7
-.9
.8
1.2
.9
-.6
.5
.2
-.5
.6
.8
.0
.4
.3
.6
.6
-.8
1.0
-.1
.7
.1
.1
.0
i.4
.9
3.4

7.7
4.4
6.3
6.9
7.8

Current
dollars

6.2
2.6
4.4
4.5
6.5
9.9

1967
dollars*

12.0

6.6

10.6

10.0
11.6
12.3
13.1
14.5
17.0
18.8
18.0

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

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

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

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
27.7
32.3

12.4
12.4
15.6
25.9
18.5
15.9
11.8
10.9
14.2
14.9

7.9

128.9
136.9

-2.6
-11.7

U5.3

21.2
31.0
22.3
16.1

140.0
141.4
140.1
136.4

29.9
19.5
13.2
26.8

10.6

-5.2
-8.3

74.2
69.6
76.1
58.2

-11.4
-14.4
-16.8
-4.4

135.6
135.2
134.7
135.8

17.7
12.1
13.8
20.8

6.0
4.1
4.6
6.9

61.2
68.5
78.4

2.2
8.1

139.2
141.5
143.2

30.6
24.3
33.2

10.0

10.6

1984:
III..

inventory
changes*

Production
expenses

-1.6

3.4

-1.5

1.1
.8
4.9
-5.5

4.0
-.7

x: is

8.6
11.4

7.7
5.4
6.8
4.5
9.1

7.8
10.6

'Cash marketing receipts and inventory changes plus Government payments, other farm cash income, and nonmoney income
furnished by farms.
* Physical changes in end-of-period inventory of crop and livestock commodities valued at average prices during the period.
»Income in current dollars divided by the consumer price index (Department of Labor).
Note.—Oata include net Commodity Credit Corporation loans and farm households.
Source: Department of Agriculture, except as noted.




338

TABLE B-93.—Farm output and productivity indexes, 1929-84
[1977=100]
Farm output

Productivity indicators

Crops 2
Year

Total1

Total3

Feed
grains

Food
grains

Oil
crops

Livestock
and
products 2

Farm
Crop
output producper
unit of tion
per
total
acre 4
input

Farm output per hour of
farm work

Total

Crops

Livestock
and
products

1929
1933
1939

44
42
48

48
43
49

38
35
40

39
27
36

6
5
14

50
54
56

45
46
51

48
43
51

9
9
11

10
10
12

14
13
14

1940
1941
1942
1943
1944

50
52
58
57
59

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
14
14

13
14
15
15
16

14
15
16
16
16

1945
1946
1947
1948
1949

58
60
58
63
62

56
59
56
64
61

47
51
39
57
50

53
55
64
62
53

20
19
22
27
26

68
66
65
64
67

58
60
58
63
61

57
60
57
64
60

15
16
16
18
19

16
18
18
20
20

16
17
17
18
18

1950
1951
1952
1953
1954

61
63
66
66
66

59
60
62
62
61

51
47
50
49
51

49
49
63
57
51

26
26
26
26
28

70
73

74
74

59
59
62
62
61

19
20
22
23
24

22
22
24
25
26

21

77

61
61
63
64
65

1955
1956
1957
1958
1959

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
31

I960
1961
1962
1963
1964

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
81

77
78
81
83
81

37
39
41
45
47

41
42
45
47
49

32
35
37
40
43

1965
1966
1967
1968
1969

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
63
66
68

45
49
53
55
59

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
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
105

96
94
100
105
113

89
94
100
108
119

89
91
100
105
118

85
93
100
109
117

1980
1981
1982
1983
19g4p

103
118
114
93
109

101
116
118
87
110

97
121
124
67
113

121
144
140
116
128

99
114
124
91
108

108
109
107
109
108

100
116
114
98
109

99
113
116
99
112

112
131
131
118
130

104
120
126
105
126

129
136
143
154
150

1970
1971
1972
1973
1974

:

74

19
20

22
23

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.




339

TABLE B-94.—Farm input use, selected inputs, 1929-84
Farm employment
(thousands)a

Farm population
April*
As
percent
ber
of
(thou- total
sands) population *

Total

1929
1933
1939

30,580
32,393
30,840

25.1
25.8
23.5

12,763
12,739
11,338

9,360
9,874
8,611

3,403
2,865
2,727

1940....
1941....
1942.,..
1943....
1944....

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...

30,547
30,118
28,914
26,186
24,815
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....

Year

Fa mi-

Selected indexes of input use (1977-100)
Crops
harvested
(millions of
acres) •

MeFarm chanical
power
real
and
estate machinery

Feed,
seed,
and
Tural
livechemi8
stock
cals
purchases9

Total

Farm
labor

365
340
331

99
93
96

468
456
418

107
100
105

6
4
7

28
26
37

2,679
2,652
2,555
2436
2,231

341
344
348
357
362

97
97
100
102

107
105
103
102
101

9
9

103

416
410
420
414
411

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
99
99
100
102

385
369
350
340
328

102
106
106
107
108

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

309
309
295
284
273

109
109
108
108
108

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
101
98
98
99

263
248
231
221
215

108
106
105
104
105

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

98
97
97
97
97

206
198
189
183
173

103
103
104
104
104

32
35
38
43
46

77
81
83
83
85

1965....
1966....
1967....
1968....
1969....

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
3535
3,419

1,482
1,360
1,253
1,213
1,176

298
294
306
300
290

96
96
98
97
97

156
146
142
137
132

103
102
104
102
102

49
56
66
69
73

89
92
89
93

1970....
1971
1972
1973
1974

9,712
9,425
9,610
9,472
9,264

4.7
4.5
4.6

4,523
4,436
4,373
4,337

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

126
123
116
114
111

105
103
102
100
99

85
87
86
90
92

75
81
86
90
92

102
104
107
99

8,864
8,253
'6,194
* 6,501
'6,241

4.1
3.8
'2.8
'2.9
'2,8

4,342
4,374
4,155
3,957
3,774

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
96
93

97
98
100
100
101

96
98
100
104
107

83
96
100
107
118

93
101
100
104
111

3,705
3,641
3,578
3,518
3,461

2,402
2,324
2,248
2,174
2,103

1,303
1317
1,330
1,344
1,358

352
366
363
305
347

103
102
100
95
100

92
90
87
79

101
101
101
100

104
102
99
93

120
121
110

109
105
104
101

1975
1976
1977
1978
1979
1980
1981
1982
1983
1984*....

6,051
5,790
5,620
5,787

Hired
workers

ers

4^3

7

2.7
'2.5
'2.4
'2.5

w,V

1

9a

1
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.
J
Total population of United States including Armed Forces overseas, as of July 1.
5
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 B-29) because of differences in the method of approach, in concepts of
employment, and in time of month for which the data are collected,
* Acreage harvested plus acreages in fruits, tree nuts, and farm gardens.
g
"Fertilizer, lime, and pesticides.
•Nonfarm'consTan'rdolTar'valueof feed, seed, and livestock purchases.
'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, 1982, and 1983 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; 6,870 and 3.0: and 7,029 and 3.0, respectively.
8
Previous basis for farm employment series nas 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).




340

TABLE B-95.—Indexes ofprices received and prices paid by farmers, 1946-84
[1977=100]
Prices paid by farmers

Prices received by farmers

Year or month

Ot
c
Nv
o
Dec

" .
" .

52
54
58

55
56
59
60
62
69
98
105
101
102
100

115

132
134
139
133
134
142
128
132
133
136
136
133
131
136
136
134
136
140
145
144
145
146
145
144
145
143
139
138

137
135

Livestock
and
products

Total2

Tractors
and
selfpropelled
machinery

Fertilizer

Fuels
and
energy

Wage
rates

Addendum:
Average
farm
real
estate
value
per
acre3

53

50

30

33

45

20

1
1

61
59
52
54
61
62
55
56
53
54
52
52
51
51
52

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
146

35
38
36
37
41
42
40
40
40
40
42
43
43
44
44

39
43
41
42
47
47
44
44
43
43
44
46
46
46
46

50
55
56
54
57
59
59
59
58
57
58
58

22
23
22
22
25
26
27
27
27
28
29
30
32
33
33

45
45
45
47
49
49
51
53
55
58

47
47
47

62
71
81
89
95
100
108
123
138
150
157
160
164

48
50
50
50
52
54
57
61
73
83
91
97
100
108
125
138
148
150
153
155

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

142
146
146
145
144
141
138
139
137
135
136
143

158
159
159
160
160
161
160
161
161
161
162
162

150
151
152
153
153
153
152
153
154
153
154
154

150
151
151
151
145
143
145
143
141
139
143
145

163
164
165
165
165
165
164
164
164
164
164
164

155
156
157
158
157
157
156
155
154
153
153
153

54
55
55
53
55
52
52
50
52
56
60
91

117
105
102
100
105
116
125
134
121
127
139
113
117

120
. 126
127
124
123

134
135
133
136
136
139

137
139
140
145
145
144
144
136
138

130
125

1
2
3

39
40
42
44
47
49
51

58
57
57
57
56
55
52
48
48
50

.. .
.

34
35
36
38
41
44
48
53
57
59

137
143

49
49
50
50
51
52
53
54
57
79
88
93
100
105
137
188
213
210
202
202

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

148
148
148
148
148
148
148
148
148
148
148
148

177
177
180
180
180
182
182
182
182
182
182
182

136
136
146
146
147
147
147
147
147
141
141
139

202
204
203
203
204
203
201
199
200
201
200
198

150
150
150
150
150
150
150

54
58

68
82
91
100
109
122
136
152
165
174
181

52
56

92
120
102
100
100
108
134
144
144

63
69

79
85
93
100
107
117
126
137
144

148
150

125
145
158
157

148
146

148

146

ggg

1984:
Jan
Fb
e
Mar
Apr
(I/fay
June
July
Aug
Sept
Oct
Nov p
Dec

52
60
63
55
56
66
63
56
54
51
50
51
55
53
52
53
53
53

*

Crops

Production items

ft ftS

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
1984 P.
1983:
Jan
Fb
e
Mar
Apr .
.
Nfay"""
June
July
Aug
Sept

All
farm
products

All
commodities,
services,
interest,
taxes,
and
wage
rates1

150
150

Includes items used for family living, not shown separately.
Includes other items not shown separately.
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 through 1984. Monthly data are for first of month.
Source: Department of Agriculture.




341

TABLE B-96.—U.S. exports and imports of agricultural commodities, 2940-84
[Billions of dollars]
Exports

Total

1940
1941
1942
1943
1944

1

Feed
Food 3
grains grains

Oilseeds
and
products

Imports
Tobacco

Cotton

.3

,9
.9
.7
.5
.4

1.7
2.3
2.8
3.1
2.9

.4
.4
.4
.6
.4

,3

.3

4.0
5.2
4.5
4.2
4.0

.7
1.1

1.1
1,4
1.4
1.5
1.5

.2

-1.1
-1.1

.2

-1.3

.4
.3
.4
.4
.3

4.0
4.0
4.0
3.9
4.1

.5
,4

1.4
1.4
1.4
1.2
1,1

.2
.2

1.2
1.4
1.3
1.5

.4
.4
.4
.4
.4

3.8
3.7
3.9
4.0
4.1

.4

,2
.1

.3

2.9
4.0
3.4
2.8
3.1

1955
1956
1957
1958
1959

3.2
4.2
4.5
3.9
4.0

1960
1961
1962
1963
1964

4.8
5.0
5.0
5.6
6.3

1965
1966

6.2
6.9
6.4
6.3
6.0

1.1
1.3
1.1
.9
.9

1.4
1.8
1.5
1.4
1.2

1974

7.3
77
9.4
17.7
21.9

1.1
1.0
1.5
3.5
4.6

1.4
1.3
1.8
4.7
5,4

1975
1976
1977
1978
1979

21.9
23.0
23.6
29.4
34.7

5.2
6.0
4.9
5.9
7.7

1980
1981
1982
1983

41.2
43.3
36.6
36.1

Jan-Nov:
1983..
1984,.

32.6
34.3

1968.;...,
1969
1970......
1971
1972

1973

1
Total includes items not shown
3
Rice, wheat, and wheat flour.
3

Cocoa cultural
beans trade
and
prod- balance
ucts

.4
.3

1950......
1951
1952
1953
1954

1967

a

Coffee

0.1

.1

El

.2

".4

.4

.9

.2
!3
.3
.2
.3
.4

.2

1.0
1.1
.9
.5

'.3

'.S
.8
.9

and

Animals
and

0.2
.3

l'.2
2.1
2.1

.5

fruits,

'.8
1.2
1.3

0.1

0.2
.1
.1

1949

1948

Total

1

1.3
1.7
1.3
1.5
1.8

0.5

2.3
3.1
4.0
3.5
3.6

1945
1946
1947

Animals
and
products

.3
2
.3
.3

1.7

A
.5

.5

Ej

1.2

'.H

-n

•=•> 9

.2
.6

.2

i'l

.6
.9
.9

1.0
1.0
1.0
1.0
1.2

.2

1.0
1.3
1.2
1.6
2.3

4.1
4.5
4.5
5.0
5.0

.5

A
.6

.6
.5

.6

-0.8
-1.0

.9
1.2
1.1
1.3
1.4

1.1
1.1
1.0
1.2
.9

.1
.1

1.6
1.5
1.8
2.6
2.2

1,2
1.2
1,3
1.7
1.6

.2
.3

1.5
1.9
2.9
9.3
11.7

'.B

.2
.2

\2

.3

2.1
2.4
1.9
1.3
1.1

$
1.3

.7
.7
.8

1.0
LI
1.6
1.8

5.8
5.8
6.5
8.4
10.2

6.2
4.7
3.6
5.5
6.3

1.0
1.0
1.5
1.7
2.2

.9
.9
1.1
1.4
1.2

1.7
2.4
2.7
3.0
3.8

9.3
11.0
13.4
14.8
16.7

.9
1.2
1.5
1.7

1.8
2.3
2.3
3.1
3.9

1.7
2.9
4.2
4.0
4.2

.5
.6
1.0
1.4
1.2

12.6
12.0
10.2
14.6
18.0

9.8
9.4
6.4
7.3

7.9
9.6
7.9
7.4

2,9
2.3
2.0
1.8

1.3
1.5
1.5
1.5

3.8
4.2
3.9
3.8

17.4
16.8
15.4
16.6

1.7
2.0
2.3
2.4

3.8
3.5
3.7
3.8

4.2
2.9
2.9
2.8

.9
.9

.8

23.9
26.6
21.2
19.5

6.5
7.3

6.8
6.9

1.3
1.3

3.5
3.9

15.2
17.9

2.2
2.9

3.5
3.7

2.6
3.1

.8
1.0

17.4
16.4

separately.

Includes nuts, fruits, and vegetable preparations.
Hess than $56 million.
Note-Data derived from official estimates released by the Bureau of the Census, Department of Commerce. Agricultural commodities
are defined as (1) nonmanne 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.




342

TABLE B-97 .—Balance sheet of the farming sector, 1929-85
[Billions of dollars]
Assets

Claims

Other physical assets
Beginning of
year

Total

1929
1933
1939

Real
estate

Live- Machinstock1 ery and
2
motor Crops
vehicles

48.0
30.8
341

6.6
3.0
51

Financial assets

Household DeposU.S.
its
and
curbonds
and
rency
furnishings

e

S

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

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

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

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

I960
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

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

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

1975 ait
1976
1977
1978
1979

502.6
576.3
664.2
736.5
873.4

1980
1981
1982
1983
1984
1985"

:::

Real
estate
debt

Other
debt

Proprietors'
equities

98
85
68

53.0
54.8
62.9
73.6
84.0

:.

Total

3.2
2.5
32

1940
1941
1942
1943
1944

1950..
1951
1952
1953
1954

Investments in
cooperatives

1.1
2.2

0.8
.9
.9
1.0
1.1

53.0
54 8
62.9
73.6
84.0

6.6
65
6.4
6.0
5.4

3.4
40
4.1
3.9
3.5

43.0
443
52.5
63.8
75.1

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
1159
127.4
134.6

4.9
4.8
49
5.1
5.3

3.4
3.1
35
4.2
6.1

85.4
95.0
107 5
118.1
123.3

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
1701
167.6
164.5

5.6
6.1
67
7.2
7.7

6.9
7.0
80
8.9
9.2

122.1
141.3
1555
151.5
147,6

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
90
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

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

121
12.8
13.9
15.2
16.8

12.7
13.4
14.6
16.2
17.6

185 4
184.7
1909
196.2
201.4

24.8
26.0
27.4
29.8
31.3

9.2
97
10.0
9.6
10.6

8.4
84
8.3
8.8
9.4

9.6
10.0
10.3
10.9
11.5

4.2
41
3.9
3.8
3.8

5.6
59
6.2
6.5
6.8

243.8
260 8
274.3
288.0
302.8

18.9
212
23.1
25.1
27.4

17.9
19.5
20.9
22.3
23.1

207 0
2201
230.2
240.6
252.3

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
36
3.7
4.0
4.2

7.2
80
8.8
9.8
10.9

314.9
326 0
351.8
394.8
478.5

29.2
303
32.2
35.1
39.5

23.8
241
27.4
29.8
33.8

261.9
2715
292.2
330 0
405.2

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
633
71.4

37.0
42.0
48.7
59.4
69.4

421.0
484.8
560.4
613 8
732.6

1,005.5
1,089.8
1,083.5
1,045.2
1,031.1

755.9
828.4
818.9
769.2
764.5

61.4
60.8
53.6
53.0
49.8

96.8
102.5
108.8
111.0
108.2

33.5
35.9
36.3
41.3
33.7

17.2
19.4
20.8
23.0
24.8

15.9
16.2
16.7
17.4
18.2

4.0
3.8
3.6
3.5
3.6

20.8
22.8
24.8
26.9
28.3

1,005.5
1,089.8
1,083.5
1,045.2
1,031.1

85.4
95.5
105.5
109.5
111.6

80.4
86.5
96.2
106.8
103.1

839.7
907.8
881.8
828.8
816,4

1,022.4

749.2

50.4

106.5

38.2

26.0

18.7

3.7

29.7

1,022.4

110.9

101.3

810.2

1

fj

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.
4
Forecast.
Note—Data include farm households. Beginning 1960, data include Alaska and Hawaii.
Source: Department of Agriculture.
2

3




343

INTERNATIONAL STATISTICS
TABLE B-98.—£/.£ international transactions, 1946-84
[Millions of dollars; quarterly data seasonally adjusted, except as noted. Credits ( + ) . debits ( - ) ]
Merchandise12

Year or
quarter
Exports

Imports

Investment income3
Net

Receipts Payments Net

Net
Net
travel Other Balance
military
and
servtransac- transporand
tions
tation net* services* *
receipts

Remittances, Balance
on
pensions, current
and other
acunilateral count ' 4
transfers'

1946..
1947..
1948..
1949..

11,764
16,097
13,265
12,213

-5,067
-5,973
-=7,557
-6,874

6,69;
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&9

-559
-583
-555
-624
-582

1,509
2050
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..

14,4217,556
19,562
16,414
16,458

-11,527
-12,803
-13,291
-12,952
-15310

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

I960..
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

-2,752 -964
-2,596 -978
^2,449 - U 5 J .
-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 -21,510
29,310 -25,493
30,666 -26,866
33,626 -32,991
36,414 -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

6,231
-5,516
- 5 436 7,271
8,192
-6,572
-9,655 12,153
-12,084 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
-7,186

2,331
-1,433
-5,795
7,140
1,962

-2,812
=2,558
-3,565
-3,573
-2,935

1975..
1976..
1977..
1978...
1979..

107,088
114,745
120,816
142,054
184,473

8,903
—98,185
= 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 12,787
-13,311 15,975
=-14,217 17,962
-21,680 20,565
-32,914 31,218

= 746
559
1,528
621
-1,778

4,598
4,711
5,272
6,013
5,735

22,729
9,205
-9,894
-10,340
4,686

-4,613
18,116
-4,998
4,207
-4,617 -14,511
-5,106 ~ 15,446
-5,649
-964

1980...
1981...
1982..,
1983...

224,269
237,085
211,198
200,257

-249,781
=-265,086
-247,667
= 261,312

-25,512
-28,001
-36,469
-61,055

72,506
86,411
83,862
77,003

-42,063
-52,359
-56,059
-53,495

30,443
34,052
27,803
23,508

-2,237 -997 7,277
144 8,048
-1,115
195 -1,008 8,339
515 -4,584 8,704

8,975
13,128
-1,141
-32,912

-7,077
1,898
-6,833
6,294
-8,058 -9,199
-8,651 -41,563

55,482 -62,546
55,118 -60,921
52,079 -64.442
48,519 -59,758

-7,064
=5,803

20,889
22,307
21,505
19,162

-13,653
= 14,772
-14,390
-13,243

7,236
7,535
7.115
5919

-114 2,160
-247 2,005
- 9 9 2,118
-548 2,054

2,270
3,729
-3,231
-3,908

1982:

nz

IN....
IV....
1983:

if"

52
239

-14

-2,105
-1,802
-1,745
-2,406

165
1,927
-4,976
-6,314

-58,523 -9,277
-63,615 = 14,870
-67,938 -17,501
-71,236 -19,407

17,618
18,973
20,802
19,609

-12,380
-12,995
-13,630
-14,490

5,238
5,978
7!l72
5,119

790 -263 2,142
53 -1,131 2,258
- 5 5 -1,426 2,107
-273 -1,764 2,198

-1,370
-7,712
-9,703
-14,127

= 1,573 -2,943
-1,848 -9,560
-2,143 -11,846
-3,086 = 17,213

53,935