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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 (33) (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 (33) (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