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August 1 4
99

SUKVEY OF CURRENT BUSINESS

1948 to the first quarter of 1949 was in communications
and public utilities, where an 8-percent increase in profits
was recorded. This experience reflected the basic growth
trend in these industries, together with the fact that their
profits are influenced by government regulation of publicutility rates, which neither advanced as much as commodity
prices earlier in the postwar period nor followed their recent
decline. Mining registered a drop of 9 percent, as did
transportation, and combined profits for all other industries
(dominated by trade) fell off by about 12 percent.

Consumer demand steady
The weakening of consumer demand, which was an outstanding feature of economic developments toward the end
of last year and especially in early 1949, did not extend into
the second quarter. In that period, personal-consumption
expenditures held firm at a $178 billion annual rate despite
a small reduction in disposable income. Apparently the
price declines which had occurred by the middle of the first
quarter were sufficient in some lines to overcome most of
the mounting consumer resistance observable before the
onset of widespread reductions.
Although aggregate consumer demand has remained stable
since early in the year, this has been partly dependent upon
the buoyancy of demand for durable goods and, to a lesser
extent, for services, especially housing. Consumer purchases of nondurables have continued downward, although
by no means so precipitately as in the first quarter.
The rising trend of durables has resulted chiefly from
continued strength of new passenger automobile sales,
where supply remains the limiting factor at least in the
lower-price field. After being restricted in January by model
change-overs in several major plants, automotive sales rose
rapidly in subsequent months to account for most of the
$1 billion expansion in consumers' purchases of durables in
the second quarter. Together with some further increase
in services (which did not share in the earlier downturn),
this sufficed to offset such declines as occurred in consumer
outlays for food and a few other nondurable goods.

Relationship of personal income, consumption,
and saving
Personal income and consumption, discussed separately
above, are brought into appropriate focus in chart 5, where
total personal income and its disposition as between taxes,
consumption, and saving are shown for the last 6 quarters.
Historical perspective is provided through juxtaposition of
annual data since 1929.
The chart shows how personal consumption, although
rising in absolute terms throughout 1948, did not keep pace
with the upward movement of disposable income; as a consequence, there occurred large increases in personal saving,
which restored a more normal spending-saving relationship
after the unusually high rate of spending earlier in the postwar period. The weakening of consumer demand implied
late last year by the disproportion between increments of
disposable income and of expenditures took more definite form
in the first quarter of 1949, when personal saving rose still
further despite a fall in disposable income. Conversely, the
firming of consumer demand in the second quarter occurred
in the face of additional reductions of personal and disposable income. Accordingly, the upward trend in personal
saving was interrupted, and the second quarter annual rate
of $16 billion was $1 billion less than in the previous period.
One clue to 1949 movements of personal saving is probably
to be found in the trends of automotive sales outlined ^bove.
Had the latter not been subject to supply limitations in the




Table 2.—National Income and Product, Fourth Quarter 1948 and
First Two Quarters 1949 1
[Billions of dollars!
Seasonally adjusted,
at annual rates

Unadjusted
Item

1948
IV

NATIONAL INCOME BY DISTRIBUTIVE
SHARES
58.9
National income—
Compensation of employees- _
Wages and salaries
Private
Military.
Government civilian
Supplements to wages and salaries
Proprietors' and rental income 3
Business and professional
Farm
Rental income of persons

1949
I

II

56.0

(2)

IV

36.7 35.0 35.4
35.6 33.7 34.0
30.4 28.5 28.7
1.0 1.0 1.0
4.2 4.2 4.3
1.2 1.3 1.3
12.4 12.0
6.1 6.0
4.6 4.3
. _ 1.7 1.7

1949

1948
I

II

234.3 225.3
144.9 142.5
139.8 137.5
119.6 117.2
4.1
4.1
16.1 16.2
5.0
5.0

(2)
141.7
136.6
116.0
4.0
16.5
5.1

11.7
6.0
4.0
1.7

49.7
24.5
18.5
6.7

47.8
24.0
17.1
6.7

46.7
24.1
15.9
6.7

Corporate profits and inventory valuation adjustment
Corporate profits before tax
Corporate profits tax liability
Corporate profits after tax
Inventory valuation aj dustment

8.8
8.5
3.3
5.1
.3

8.0
7.4
2.9
4.5
.6

35.7
34.5
13.6
20.9
1.2

30.8
28.4
11.2
17.3
2.3

8
8
4.7

Net interest

i?
?,

1.0

1.0

1.1

4.1

4.2

4.3

4.8

4.9

5.0

18.8

18.9

19.1

Addendum: Compensation of general Government employees ._
GROSS NATIONAL PRODUCT OR
EXPENDITURE
Gross national product

71.0

63.4 63.0

Personal consumption expenditures
Durable goodsNondurable goods
Services

49.0
6.7
28.7
13.6

Gross private domestic investment
New construction __ _
Producers' durable equipment
Change in business inventories, total
Nonfarm only
Net foreign investment
_

11.5
4.6
5.4
1.4
1.0
.4

10.9 7.3
3.5 4.1
5.1 5.2
2.2 -2.0
1.9 -2.2
.1
.2

Government purchases of goods and services- 10.1 10.4 11.0
Federal
5.9 6.3 6.4
Less : Government sales
.1
.1
.1
State and local
4.3 4.1 4.6

270.3 262.5 256.1

42.0
5.0

177.9
22.5
99.9
55.4

178.2
23.6
98.7
55.9

48.0
17.9
21.2
9.0
7.1
1.0

41.9
16.8
21.0
4.1
2.8
.7

34.0
16.5
20.3
-2.8
-3.5
.8

40.3
23.8
.3
16.9

42.1
25.3
.2
17.0

43.1
25.7
.2
17.7

52.5 53.3

44.6 180.9
6.1 22.9
24.4 103.3
13! 9 14.0 54.8

DISPOSITION OF PERSONAL INCOME
Personal income

216.6

213.7

212.9

3.7
3.3
.5

7.3
6.6
.7

3.4
2.7
.7

20.4
18.2
2.2

18.7
16.4
2.3

18.7
16.3
2.4

Equals: Disposable personal income.

51.7

45.2

49.9

196.2

195.0

194.2

Less: Personal consumption expenditures

49.0

42.0

44.6

180.9

177.9

178.2

2.6

3.2

5.3

15.3

17.1

16.0

71.0

63.4

63.0

4.1 4.1
5.4 5.0
.2
.2
2.6 -1.7

4.2
5.2
.2
(2)

55.4

Less : Personal tax and nontax payments
Federal..
State and local

Equals: 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
_

.1

.1

58.9

56.0

(2)

Less: Corporate profits and inventory valuation
adjustment
Contributions for social insurance .
Excess of wage accruals over disbursements. __

8.8
1.2
0

8.0
1.4
0

(2)
1.4
-.1

Plus: Government transfer payments
Net interest paid by Government _ _
Dividends
Business transfer payments _

2.6
1.2
2.6
.2

2.8
1.0
1.9
.2

55.4

52.5

TCqilR,ls; National income

Equals: Personal income
1
Detail will not
2
Not available.
3

270.3 262.5 256.1
16.4 16.4 16.9
20.7 20.4 21.1
.6
.6
.6
.1 (2)
-1.3
.4

0

.3

.1

234.3 225.3

(2)

35.7
5.3
.1

30.8
5.2
.1

(2)

2.9
1.4
2.0
.2

9.9
4.5
8.3
.6

11.1
4.5
8.4
.6

11.5
4.6
8.5
.6

53.3

216.6

213.7

212.9

necessarily add to totals because of rounding.

Includes noncorporate inventory valuation adjustment.
Source: U. S. Department of Commerce, Office of Business Economics.

5.2
-.3

BUSINESS STATISTICS
J-HE 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 (t), 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 June 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 Surrey

1948
June

July

August

September

1949

October

November

December

January

February

March

April

May

June

GENERAL BUSINESS INDICATORS
NATIONAL INCOME AND PRODUCTf
Seasonally adjusted quarterly totals at annual rates:
National income, total . _ _ _
bil. of dol_
Compensation of employees, total
do
Wases 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
Inventorv valuation adjustment
do
Net interest
do_ _.

224.9
137.7
132. 8
114.3
3.8
14.7
4.9
£0.4
24.6
19.1
6.7

230.4
143.3
138.3
118.6
3.9
15.7
5.0
49.9
24.5
18.8
6.6

234 3
144. 9
139 8
119.6
4.1
16.1
5.0
49.7
24.5
18 5
6.7

225.3
142 5
137 5
117 2
4.1
16.2
5.0
47 8
24 0
17.1
6 7

141.7
136.6
116.0
4.0
16.5
5.1
46.7
24.1
15.9
6.7

33.0
35.0
13.7
21.3
—2.0
3.7

33.3
36.6
14.4
22.2
-3.3
3.9

35.7
34.5
13.6
20.9
1.2
4.1

30.8
28.4
11.2
17.3
2.3
4.2

4.7
4.3

Gross national product, total
do_ _
P ersona 1 consum pt ion expenditures,total_ _ do
Durable goods _
___
_ _ d o _
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

261.6
178-7
23.8
102.4

44.2
18.1
20.8
5.3
2.8

266.5
180.3
24.8
101.8
53. 7
47.1
18.7
21,0
7.4
-.1

270.3
180. 9
22.9
103.3
54.8
48.0
17. &
21.2
9.0
1.0

35.9
20.4
15.5

39.2
22.8
16.4

40.3
23,4
16.9

Personal income total
do
less: Personal tax and nontax payments___do
Fquals' Disposable personal income
do
Personal savings§
do

210.3
20.7
189.6
10.8

215. 4
20.2
195.2
15.0

216.6
20.4
196.2
15.3

' 262. 5
177 9
'22.5
'99.9
' 55.4
'41 9
16.8
' 21.0
41
.6

256. 1
178.2
23.6
98.7
55.9
34.0
16.5
20.3
2.8
.8

'42. 1
' 25. 1
17.0

43.1
25.4
17.7

213. 7
r
18.7
' 195. 0
'17.1

212.8
18.7
194.2
16.0

r

_ _

PERSONAL INCOME BY SOURCEt
Seasonally adjusted, at annual rates:
Total personal income
bil. of dol
Wage and salary receipts, total
do
Employer disbursements, total _
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

213.4
132.5
134.7
60.1
39.1
16.7
18.8

214.5
134.6
136.8
60.7
39.8
16.9
19.4

215. 4
136.5
138.7
61.9
40.2
16.9
19.7

216.3
137.7
139.9
62.8
40.4
16.7
20.0

216.3
138.1
140.3
62.7
40.4
16.9
20.3

216.6
137.5
139.7
62.7
39.8
16.9
20.3

217.0
137.1
139. 4
62.3
40.0
16.9
20.2

215.7
136.6
138.9
61.4
40.2
17.0
20.3

212.9
135.0
137.3
60.6
39.5
16.9
20.3

212.4
133.5
135.8
58.9
39.4
17.1
20.4

212.5
134.7
136.8
58.6
40.5
17.1
20.6

' 212. 9
' 134. 8
' 137. 0
'58.3
'40.9
'17.3
'20.5

213.5
134.5
136. 8
58.4
40.8
17.1
20.5

2.2
2.0
51.8
15.9
11.2

2.2
2.0
50.8
16.0
11.1

2.2
2.0
49.5
16.3
11.1

2.2
2.0
49.4
16.5
10.7

2.2
2.0
49.0
16.8
10.4

2.2
2.0
49.8
16.9
10.4

2.3
2.0
50.3
16.9
10.7

2 3
2.0
49.0
17.0
11.1

2.3
2.1
47.2
17.1
11.5

2.3
2.1
47.3
17.1
12.4

2.1
2.1
46.3
17.2
12.2

2.2
2.1
46.7
'17.3
12.0

2.3
2.2
47.2
17.5
12.1

188.4

190. 2

192.0

193.3

192.9

192.8

193.6

' 192. 6

191.7

' 191.4

192.3

' 192. 3

192.3

NEW PLANT AND EQUIPMENT EXPENDITURES
Electric and gas utilities
Manufacturing

do
do

4,820
640
2,140
200
310
190
1,340

4,830
696
2,090
200
320
170
1,360

5,410
850
2,320
220
410
170
1,440

4,460
580
1, 850
190
360
130
1,260

1

4,820

i 1,960
'200
1
410
1140
1
1,300

Railroad
do
Other transportation
do
Commercial and miscellaneous
do
' Revised,
i Estimates based on anticipated capital expenditures of business.
§ Personal savings is excess of disposable income over personal consumption expenditures shown as a component of gross national product above.
t Revised series. Quarterly estimates of national income, gross national product, and personal income have been revised beginning 1939; monthly estimates of personal income have been
revised beginning 1942; see pp. 26-31 of the July 1949 Survey for the revised figures.
846945°—49

4




S-l

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