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May 1949

SURVEY OF CUEEENT BUSINESS

The Flow of Income
Personal income declined by 3 billion from an annual rate
of $220 billion in the fourth quarter of 1948 to $217 billion
in the first quarter. The decline from the December peak to
March was larger—3 percent or 7 biHion, from a $221 billion
to a $214 billion rate. Despite this decline, total personal
income in March still exceeded the levels prevailing in the
first half of 1948.
It has already been noted that the decline in personal
income has been less than that in gross national product.
In part this is due to the fact that incomes paid out by the
business system have declined less than the value of business
production, as witnessed by the maintenance of dividend disbursements. It also stems from the fact that an increase in
government transfer payments in the form of unemployment
insurance has worked as an offset to the decline of production
incomes. Accordingly, the declines in personal income have
been in wages and salaries and in proprietors' and rental
income.

Wage and salary receipts drop
Total wage and salary receipts as measured in personal
income dropped from the 138 billion annual rate in the fourth
quarter of 1948 to a rate of 134% billion in the first quarter of
1949. As in the case of total personal income this quarterly
change somewhat understates the decline which had occurred
by the end of the quarter, wages and salaries having dropped
to 132 billion by March. This rate corresponds to the one
which they had reached in the middle of 1948.
The decline was concentrated in manufacturing. On a
seasonally adjusted basis pay rolls ir» other commodityproducing industries and in the distributive industries showed
a smaller change, and pay rolls in the service industries and
in government were maintained. Lower employment was
the major factor in the decline of manufacturing pay rolls.
It was reinforced by a decrease in the number of hours
worked. Somewhat higher average wage rates acted as a
small offset.

Drop in farm income
The net income of farm proprietors dropped from an annual
rate of 18% billion in the fourth quarter of 1948 to 17% billion
in the first quarter, roughly the level which had prevailed a
year earlier. Farm income has shown a tendency to decline
since the middle of 1948 and the quarterly comparison
accordingly understates somewhat the fall which had occurred
by March from the postwar peak.
The first quarter drop in agricultural income reflected
smaller receipts from marketings—prices were lower while the
volume of marketing was broadly maintained—as well as
smaller net additions to farm inventories. As in the latter
part of 1948, Commodity Credit Corporation outlays for
price support continued to be an important element in
receipts and served to maintain the income and purchasing
powder of farmers. In the absence of these supports the fall
in prices, and the decline in the current dollar measures of
national income and production that can be traced to the
price element, would undoubtedly have been much larger.
The influence of agricultural support operations on the
physical volume of national output produced is harder to
assess. But it is probable that the psychological effects of
larger price declines would have had a depressing influence
on the physical volume of output also. A more detailed
review of the farm situation appeared in the April SURVEY.




The drop in the income of non-farm proprietors was more
moderate than in farm income and reflected mainly developments in retail trade and to a lesser extent in manufacturing
and construction.
Table 2.—National Income and Product, Fourth Quarter 1948
and First Quarter 19491
[Billions of dollars]
Seasonally adjusted,
at annual rates

Unadjusted
Item

1948

1949

1948

1949

IV 2

I

IV 2

I

NATIONAL INCOME BY DISTRIBUTIVE SHARES

National income
Compensation of employees
Wages and salaries
Private
_ _
Military
Government civilian
_ _
_ _
Supplements to wages and salaries
Proprietors' and rental income *
Business and professional _
Farm
Rental income of persons
Corporate profits and inventory valuation
adjustment
_ _ _
Corporate profits before tax
Corporate profits tax liability _ _
Corporate profits after tax
Inventory valuation adjustment _
N e t interest
________
Addendum: Compensation of general Govment employees
- - -

59.3
36.6
35.4
30.3
.9
4.2
1.2
12.8
6.4
4.6
1.9

(3)
35.3
33.9
28.9
.9
4.1
1.3
12.5
6.2
4.4
1.9

8.6
8.7
3.4
5.3
-.1
1.3

(3)
(3)
(3)

235.6
144.7
139.6
119.6
3.7
16.2
5.1
51.4
25.6
18.4
7.4

(3)
141.9
136.8
116.9
3.7
16.2
5.1
50.0
24.9
17.7
7.4
(3)
3
(3)
(3)
()

.5
1.3

34.3
34.7
13.5
21.2
—.4
5.2

4.7

4.7

18.4

18.5

69.6
48.9
6.7
29.1
13.2
10.3
3.8
1.8
2.0
5.7
.8
.5
—.1
10.4
6.3
.1
4.1

62.1
41.9
4.9
23.5
13.5
9.9
2.9
1.2
1.7
5.5
1.6
1.4
.4
9.9
5.9
.1
4.0

264.9
181.0
22.9
105.1
53.0
42.8
14.7
6.9
7.9
22.7
5.3
4.1
-.4
41.5
25.4
.2
16.3

255.9
176. §
21.5
101.4
53.7
37.7
13.5
5.9
7.6
22.0
2.2
1.4
1.6
40.1
23.7
.2
16.7

56.1
3.6
3.2
.5
52.5
48.9
3.5

53.6
7.4
6.7
.7
46.1
41.9
4.2

219.6
20.2
18.0
2.2
199.4
181.0
18.4

216.6
18.8
16.5
2.3
197.8
176.6
21.2

69.6
3.7
5.2
.2
1.2

62.1
3.8
4.9
.2
3
()

264.9
14.9
20.3
.6
-6.4

0
59.3

( 3 )'

255.9
15.2
20.0
.6
(3)
.2
(3)

<8)

1.9
5.3

GROSS NATIONAL PRODUCT OR EXPENDITURE

Gross national product
_ Personal consumption expenditures _ _ _ _ _
Durable goods
'
Nondurable goods
Services
Gross private domestic investment
New construction
Residential nonfarm
Other
_- Producers ' durable e quipment _
Change in business inventories, total
Nonfarm only
Net foreign investment
Government purchases of goods and services _
Federal
Less* Government sales
State and local
DISPOSITION OP PERSONAL INCOME

Personal income
Less ' Personal tax and nontax payments
Federal
State and local
Equals' Disposable personal income
Less* Personal consumption expenditures
E quals * Personal saving
RELATION OF GROSS NATIONAL PRODUCT,
NATIONAL INCOME, AND PERSONAL INCOME

Gross national product
Less* Capital consumption allowances
._
Indirect business tax and nontax liability
Business transfer payments
Statistical discrepancy. _
,
Plus: Subsidies less current surplus of Government enterprises
-Equals* National income
Less: Corporate profits and inventory valuation
adjustment
Contributions for social insurance
Excess of wage accruals over disbursements. _
Plus4 Government transfer payments
__
N e t interest paid b y Government _ _ _ _ _ _
Dividends
__
Business transfer payments
_ _ _ __
Equals ' Personal income
- __
-

8.6
1.2
0
2.6
1.2
2.6
.2
56.1

(3)

1.4
0
2.8
1.0
1.8
.2
63.6

.2
235.6
34.3
5.1
9*. 9
4.6
8.3
.6
219.6

(3)

5.2
.1
11.1
4.6
8.3
.6
216.6

* Detail will not necessarily add to totals because of rounding.
2 Data for the fourth quarter of 1948 are the same as those in the February issue of
the SURVEY, with the exception that an actual estimate of fourth-quarter corporate profits
has been substituted for the arbitrary figure previously assumed. Revisions of the national
income and product estimates for 1948 to incorporate recent information will be made hi the
July issue of the SURVEY. It should be noted that in the interim national product data will
not agree fully with revised information already published for certain components of national
product, notably new private construction.
3 Not available.
* Includes noncorporate inventory valuation adjustment.
Source: U. S. Department of Commerce, Official Business Economics.

BugINESS

STATISTICS

xHE DATA here are a continuation of the statistics published in the 1947 Statistical Supplement to the SURVEY OF CURRENT BUSINESS.
That volume contains monthly data for the years 1941 to 1946, and monthly averages for earlier years back to 1935 insofar as available; it also
provides a description of each series and references to sources of monthly figures prior to 1941. Series added or revised since publication of the
1947 Supplement are indicated by an asterisk (*) and a dagger (f), respectively, the accompanying footnote indicating where historical data and
a descriptive note may be found. The terms "unadjusted" and "adjusted" used to designate index numbers refer to adjustment of monthly
figures for seasonal variation.
Data subsequent to March for selected series will be found in the Weekly Supplement to the Survey.
Unless otherwise stated, statistics through
1946 and descriptive notes may be found in
the 1947 Supplement to the Survey

1948
March

April

May

June

July

1949

August

September

October

November

December

January

February

March

GENERAL BUSINESS INDICATORS
NATIONAL INCOME AND PRODUCT!
Seasonally adjusted quarterly totals at annual rates:
National income, total
bil.ofdolCompensation of employees, total
do
Wages and salaries, total
_
do
Private
do_ __
Military. _ _
_do
Government civilian.
do_ __
Supplements to wages and salaries
do
Proprietors' and rental income, total
do
Business and professional
do
Farm
_ _ _
do
Rental income of persons
do
Corporate profits and inventory valuation adjustment, total
bil. of dol__
Corporate profits before tax, total
_do
Corporate profits tax liability
do
Corporate profits after tax
do
Inventory valuation adjustment
do
Net interest
do

228.2

'235.6

142.4
137 4
118 2
3.5
15 6
5.1
50 6
25.2
18 1
7 4

144.7
139 6
119.6
3.7
16.2
5.1
51.4
25.6
18. 4
7.4

29.6
32.1
12 5
19.6
2 5
4.8

30
34
13
20
3
5

34
34
13
21

172.5
21.3
101.4
49.8
38.0
14.3
19.8
3.9
3.9

251.9
177.3
22.8
103.7
50.8
38.0
14.4
21.0
2.6
2.7

258 1
180 1
23.7
104 3
52. 1
40.2
14 8
21.9
3 5
—.3

9R4. Q
181 0

4

255 9176 6
21. 5
101 4
53 7
37.7
13 5
22.0
2 2
15

30.5
16.7
13.7

33.9
19.1
14.8

38 2
22.7
15 5

41 5
25 2
16 3

40 1
23.5
16 7

207.0

210.8
20.6
190.2
12.9

216.3
20 0
196 2
16. 1

213.9
134.0
129.1
111.4
3.4
14.2
4.9
49.9
24.8
17 6
7.5

222.3

25 3
30.5
11 8
18.7
53
4.7

Gross national product, total
do
Personal consumption expenditures,total_.do
Durable goods
do
Nondurable goods
_ _
do
Services
do. _
Gross private domestic investment
do
New construction.
do
Producers' durable equipment..
do
Change in business inventories
do
Net foreign investment. __
do
Government purchases of goods and services,
total
bil.of dol__
Federal (less Government sales)
do
State and local
do

244.9

Personal income, total
._
Less: Personal tax and nontax payments
"Equals- "Dispnsqhlfi personal VPCOTip
Personal savings}

do
do
rlo
do

136.3
131 3
113.2
3.5
14.6
5.0
51,6
25.3
18 9
7.4

23.0
183 9
11.4

2
0
3
8
9
0

141.9
136 8
116 9
3.7
16 2
51
50 0
24 9
17 7
7 4

3
7
5
2
4
5 2

19
53

22 9

~\f\K

53
42
14
22

1

0
g
7
7

K q

219
20
199
18

216.6
18 8
197 8
21.2

6
2
4
4

PERSONAL INCOME BY SOURCEf
Seasonally adjusted, at annual rates:
Total personal income.
_ ... bil.ofdol
Wage and salary receipts, total
do
Employer dishiirsfiTTKvnt-S, t^t^l
do
Commodity-producing industries
do
Distributive industries
_
do
Service industries
do
Government
do_
Less employee contributions for social insurance
_.bil. of dol_.
Other labor income..
do
Proprietors' and rental income
do
Personal interest income and dividends -__do
Total transfer payments
do
Total nonagricultural income

-do

205.7

208. 6
126.8
128.8
57.3
37.8
15.9
17.8

209.2

126.6
128.7
57.7
37.6
15.6
17.8

129.0
131.0
58.5
38.6
15.9
18.0

214.4
131.4
133.6
60.4
38.8
16.1
18.3

214.8
133.4
135.6
60.9
39.5
16.4
18.8

216.7
135. 9
138.0
62.3
40.0
16.5
19.2

217.3
136.7
138. 9
63.0
40.0
16.4
19.5

218.5
137.5
139.6
63.0
40.2
16.6
19.8

219.9
138.0
140. 1
63.8
39.7
16.6
20.0

221.0
137.7
139.9
63.6
39.8
16.6
19.9

' 219. 2
136.3
138 6
62.1
39 9
16.6
20.0

2.1
1.9
48.4
16.6
12.2

2.0
2.0
51.2
16.7
11.9

2.0
2.0
50.4
16.8
11.0

2.2
2.0
53.0
16.8
11.1

2.2
2.1
51.7
17.0
11.1

2.1
2.1
50.3
17.3
11.1

2.2
2.1
50.4
17.5
10.6

2.1
2.1
50.7
17.8
10.4

2.1
2.1
51.4
18.1
10.3

2.2
2.1
52.1
18.4
10.7

2.3
21
51.4
'18.3
11.1

2.2
21
'49.7
'18.3

ll.fi

2.2
2.1
49.0
18.3
12.5

185.1

185.3

186.6

189.7

193.8

195.0

195.6

196.3

197.4

' 195. 4

'194.1

192.6

191.3

' 216. 3
' 134. 7

' 136. 9

"•61.5
••39.0
16.5
19.9

214.3
132.4
134. 6
59.3
38.8
16.6
19.9

NEW PLANT AND EQUIPMENT EXPENDITURES
4,170
4,820
4, 680
4,830
5,410
All industries, total
mil of dol
720
500
640
690
Electric and gas utilities
do
850
1,800
2,140
1, 940
2,090
Manufacturing
do
2 320
200
180
180
Mining
do
200
220
270
310
390
Railroad
_ _
do
320
410
190
160
180
Other transportation
do
170
170
1, 290
1,240
1,340
1,360
Commercial and miscellaneous
do
1,440
r
Revised.
§ Personal savings is excess of disposable income over personal consumption expenditures shown as a component of gross national product above.
t Revised series. Estimates of national income, gross national product, and personal income have been revised beginning 1944; see pp. 27-29 of the July 1948 Survey for the revised figures.

834381°-




S-l


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102