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SURVEY OF CUERENT BUSINESS

fuly 1951

Table 2.—-Expenditures on New Plant and Equipment by U. S. Business 1945— 51 ':
[Millions of dollars]
1951

19 50
Item

1945

Manufacturing
vlinino;
lailroad
)ther transportation
Electric and gas utilities-Commercial and miscellaneous 3
_ - _
Total __

_-

1946

3,210

440
550
320
630

1947

5,910

560
570
660

1,040

7,460
690
910
800
1,900

1948

8,340
800
1,320
700
2,680

1949

7,250
740
1,350
520
3,140

1950

JanuaryMarch

8,220
680
1,140
440
3,170

AprilJune

1, 520

1,860

650

760

150
230
80

160
300

QO

JulySeptember

OctoberDecember

JanuaryMarch

2,050
180
290
120
820

2,790
200
320
140
940

2,460
180
300
120
750

AprilJune 2
3,240
220
440
140
950

JulySeptember 2
3,270
220
410
130
1, 000

1,480

3,300

4,430

5,390

5,120

4,920

1, 060

1,160

1,240

1,440

1,340

1.420

1,370

6,630

12, 040

16, 180

19, 230

18, 120

18, 560

3,700

4, 330

4,700

5,830

5,160

6,420

6,400

1
2

Date exclude expenditures of agricultural business and outlays charged to current account.
Anticipated expenditures for the second and third quarters of 1951 were reported by business during May and early June.

Scheduled expenditures increasing
at slower rate
While capital outlays planned in the third quarter represent
a continuation of the upward trend in expenditures which
began early in 1950, some slackening in the rate of increase
is indicated. The rise anticipated between the second and
third quarters is (after seasonal adjustment) only 4 percent as
against a rate of increase of about 10 percent between each of
the previous five quarters. Capital goods costs, however,
have been on a plateau in the past few months so that less of a
slackening is implied in the physical volume of additions.

3

Data include trade, service, communications, construction and finance.

Source: U. S. Department of Commerce, Office of Business Economics, and Securities and
Exchange Commission.

On an industry basis, the upward trend in plant and equipment expenditures in the third quarter is confined to manufacturing and the electric and gas utilities, with other major
industries expecting to maintain second quarter rates. As
can be seen in chart 7, manufacturing continues to be the
main area of expansion, particularly in such industries as
primary metals, the metal fabricating group, and paper and
pulp. Third quarter programs of manufacturers as a whole,
however, also indicate a slowing down in the rate of expansion. Planned capital outlays in the third quarter are 6
percent higher than in the second quarter as against 10 to 20
percent increases in earlier quarters. The electric and gas
utilities are the only major group not evidencing a slackening
in their rate of growth.

(suty 1951 C^altlon

I lew

National Income
i to th

u o+ (C

THE ENLARGED NEW EDITION-FIRST SINCE I947-CONTAINS
•
•
•
•
•

National income and product statistics, 1929-1950
A review of economic trends in the past two decades
The basic principles underlying national accounts
An explanation of methods and sources
Allowance for inflation: constant vs. current dollars

This 1951 edition, like the original, is not included in the Survey of Current Business
subscription, but is sold as a separate publication by the Superintendent of Documents
and affiliated sales agencies. A list of Department of Commerce field offices where it
may be procured appears on the inside front cover of this magazine.




SURVEY OF CURRENT BUSINESS

8

July 113,

National Income and Corporate Profits, First Quarter 1951
1 HE national income moved rapidly upward over the past
year, reaching the annual rate of $269 billion in the first
quarter of 1951. The rise over the initial quarter of 1950
was $50 billion, or more than one-fifth.
The advance in income during the past year flowed from
an increase in all major shares of income. Expansion in
wages and salaries stemmed from increases in employment
and wage rates. The sharp upsurge in earnings of farmers
and other individual business proprietors reflected the
stimulus of expanding demand and higher prices. These
same basic influences also accounted for the rapid advance
in corporation profits. The movements of the income
shares were reviewed in the May issue excepting the corporate
profit component, for which data have only now become
available.

Profit trends
Since early 1950, corporate profits have risen rapidly as all
sectors of industry participated in the business upswing.
Total book profits before taxes advanced from $31.9 billion
(annual rates) in the first quarter of last year to $50.3 billion
in the fourth quarter of 1950. Of the increase, over $10.3
billion were carried into the net after taxes, raising the latter
to $27.8 billion in the fourth quarter. In that quarter
dividends moved up to a postwar high as many companies
passed on year-end extras. Nevertheless, dividends still
represented only two-fifths of earnings after taxes, the remainder being retained by corporations to finance their large
capital expenditure programs and for other working capital
and reserve purposes.
In the first quarter of this year the rise in corporate profits
before taxes slackened—the advance being about 3 percent,
on a seasonally adjusted basis, over the fourth quarter rate.
As a result of the new provisions of last year's tax bills becoming fully applicable in the first quarter, the tax liability
was raised to an over-all rate of about 55 percent of profits
before taxes, so that profits after taxes were reduced from
$27.8 billion in the fourth quarter to about $23.3 billion in
the first quarter of this year, at seasonally corrected annual
rates. Dividend payments in the first quarter dropped below
those of the final quarter of 1950, largely because of the
unusual volume of year-end special dividends in the former
period.
An important factor affecting profit trends in 1950 and
early this year was the rise in prices, since, by usual accounting methods, inventory profits arise whenever prices are
advancing. The inventory profits are calculated at over $8
billion at annual rates in both the third and fourth quarters
of 1950 and were of similar importance in the first quarter of
1951. Thus, in the fourth quarter of 1950, corporate
profits on a national income basis—that is, with an adjustment to remove the effects of inventory profits—were $42
billion at an annual rate, compared with reported book
profits of $50 billion.
Many industries showed lower book profits before taxes,
unadjusted for seasonal variations, in the first quarter of
this year than in the preceding quarter. Among those
showing gains in unadjusted earnings before taxes from the
final quarter of 1950 were the textiles, lumber, paper, chemicals, and machinery (except electrical) industries. The
aircraft industry, notwithstanding a huge and growingbacklog of Government business, had lower profits than in
the preceding quarter and only moderately higher profits
than a year ago. Table 4, (page 26), presents unadjusted
quarterly profits by broad industrial groups.
[Continued on page 26}



Table 3.—-National Income and Product, 1948-1950, Last Tw<
Quarters 1950 and First Quarter 1951
[Billions of dollars]
Seasonally adjustt
at annual rates

1948

1949

1 950

H 50

1951

III

NATIONAL INCOME BY
DISTRIBUTIVE SHARES
National income _ _ _ _ _ _

IV

I

I

_ _ _ _

223.5

216.7

239.0

245 8

260 1

269

Compensation of employees
Wages and salaries
Private
Military
Government civilian
Supplements to wages and salaries

140.2
134.4
115.7
4.0
14.7
5.8

139. 9
133. 4
113.0
4.2
16 1
6.5

153. 3
145 8
123.6
5.1
17 2
7.5

157. 3
149 7
127 2
5.0
17 5
7.7

165.2
157 2
132 7
6.6
17 9
7.9

J72.
163
137

47.3
22.1
17.7
7.5

41.4
20.9
13 0
7.5

44.0
22.3
13 7
80

45.6
23.2
14 3
81

47.2
23.0
15 8
8 4

48.1
24.
16 -

Corporate profits and inventory valuation
adjustment _ _ _
Corporate profits before tax
Corporate profits tax liability
Corporate profits after tax
Inventory valuation adjustment

31.7
33.8
13.0
20.7
-2.1

30.5
28.3
11.0
17.3
2.1

36.2
41.4
18.6
22.8
-5.1

37.4
45.7
20.5
25.2
-8.3

42.2
50.3
22.5
27.8
-8.2

42. S
51..
28. .
23. £
—SA.

Net interest
Addendum: Compensation of general government employees

4 3

4 9

5 4

55

5 6

5 f

17.4

19.4

20.9

21.1

23.1

25.2

259.0

257.3

282.6

287.4

303.7

318.5

177.9
22.9
100.9
54.1

180.2
23.9
98.7
57. 6

193. 6
29.2
102.3
62.1

202.5
34.3
105.5
62.7

198.4
29 4
104 9
64.0

208. 2
31.5
111.5
65.2

42.7
17 7
8.6
9.1
19.9
5.0
3 7

33. 0
17 2
8.3
9.0
19.0
-3.2
2 5

48.9
22 1
12.6
9.5
22 5
4.3
36

47.3
23 5
13.7
9.8
24.5

59. 6
23 9
12.9
11.0
26 5
9.3
S I

19

.5

—2.3

—3 2

60.2
23 3
13. 1
10.2
25.0
11.8
10 6
2 7

36 6
21.7
.0
15. 6

43 6
25.9
.4
18.1

42 5
23.1
.2
19.7

40 8
21.4

47 8
27.5

19.7

20.4

52 9
32. 1
.2
21.1

Personal income

209.5

205.1

224.7

227. 3

238. 3

244. 1

Less: Personal tax and nontax payments
Federal
Stats and local
Equals: Disposable personal income
Less: Personal consumption expenditures
Equals: Personal saving.

21.1
19.0
2.1
188.4
177.9
10.5

18.6
16. 2
2.5
186.4
180.2
6.3

20.5
17.8
2.7
204.3
193.6
10.7

20.2
17.5
2.7
207.1
202.5
4.6

23.1
20.3
2.7
215.2
198. 4
16.8

26. (i
23. S
2.8
217. 5
208. 2
9.3

Proprietors' and rental income
Business and professional
Farm
Rental income of persons

8.

8.;

GROSS NATIONAL PRODUCT OR
EXPENDITURE
Gross national product
Personal consumption expenditures
Durable goods
Nondurable goods
Services _
Gross private domestic investment
New construction
Residential n on farm
Other
Producers' durable equipment
Change in business inventories, total. _
Nonfarm only
Net foreign investment
Government purchases of goods and services
Federal
Less: Government sales
State and local

I g

DISPOSITION OF PERSONAL INCOME

RELATION OF GROSS NATIONAL
PRODUCT, NATIONAL INCOME, AND
PERSONAL INCOME
259.0

257.3

282.6

287.4

303.7

318. 5

17. 6
Less: Capital consumption allowances
Indirect business tax and nontax liability. 20.4
Business transfer pavments
Statistical discrepancy
-32
Plus: Subsidies less current surplus of Govern0
ment enterprises

19.1
21.7

21.2
23.8
.8
—1 8

21.8
25.3
.8
—6.4

22 2
213

22. 6
25. 9

-3.4

5

.3

-.1

2

s

223.5

216.7

239.0

245.8

260.1

269. 4

31.7
5.2

30.5
5.7

36.2
7.0

37.4
7.0

42 2
7.4

42. V)

0
10. 5
4.5
7 2
-

0
11.6
4.6
7 6
.7

0
14.3
4.7
9 2
.8

0
11.0
4.7
9 4
.8

0
11.1
4.7
11. 1
.8

0
11.5
4.*
S. 8

209.5

205.1

224.7

227.3

238.3

244.1

Gross national product

Equals: National income
Less: Corporate profits and inventory valuation adjustment
Contributions for social insurance
Excess of wage accruals over disbursements
Plus: Government transfer payments
Net interest paid by Government
Dividends
Business transfer payments
_ __ _
Equals: Personal income ._

— 8
0

Source: U. S. Department of Commerce, Office of Business Economics.

8.3

.s

BUSINESS STATISTICS
JL HE DATA here are a continuation of the statistics published in the 1949 Statistical Supplement to the SURVEY OF CURRENT BUSINESS.
That volume (price $1.25) contains monthly data for the years 1945 to 1948, 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 1945. Series added or revised since publication of the 1949 Supplement are indicated by an asterisk (*) and a dagger (|), 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 and dollar values refer to
adjustment of monthly figures for seasonal variation.
Data subsequent to May 1951 for selected series will be found in the Weekly Supplement to the SURVEY.
Unless otherwise stated, statistics through
1948 and descriptive notes are shown in the
1949 Statistical Supplement to the Survey

1951

1950

May

June

July

August

September

October

November

December

January

February

March

April

May

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
Wages and salaries, total
do
Private
_ do
Military
do
Government civilian
__ do
Supplements to wages and salaries
do
Proprietors' and rental income, total cT do
Business and professional d"
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.

r

' 245. 8
'157.3
' 149. 7
' 127. 2
5.0
17.5
' 7.7
'45 6

230. 6
' 148. 6
T
141.3
r
120. 1

269 4
' 172. 1
' 163. 6
' 137. 1

' 14. 3
'8.1

' 260. 1
' 165. 2
' 157 2
'132.7
6 6
17.9
'7 9
' 47 2
' 23. 0
' 15. 8
'8 4

'34.8
' 37. 5
' 16.9
'20.6
' -2.7
'5.3

'37.4
' 45 7
'20.5
^25. 2
-8.3
'5.5

42.2
' 50 3
••22 5
'27.8
' —8 2
' 5.6

42.9
51 8
28 5
23 3
—8 9
'5.6

Gross national product, total
do
Personal consumption expenditures, total do
Durable goods .
. do_ __
Nondurable goods .
do
Services
do
Gross private domestic in vestment. __
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

' 275. 0
' 188. 7
'26.6
' 100. 4
'61.6
'47.9
'21.4
'21.4
'5.2
' -1.6

' 287. 4
' 202. 5
' 34. 3
' r105. 5
62 7
'47.3
'23 5
'24.5
' -.7
' -3.2

'303 7
' 198 4
'29.4
' 104 9
' 64 0
60 2
'23 3
'25.0
' 11.8
' -2.7

' 318 5
' 208 2
'31 5
T
111 5
'65.2
' 59 6
' 23. 9
'26 5
'9 3
' 2.3

'40.1
'20.9
'19.2

'40.8
' 21 2
' 19.7

'47.8
'27 3
'20 4

' 52.9
'31.9
'21.1

Personal income, total
do_ .
Less: Personal tax and nontax payments do
Equals: Disposable personal income, _ _ do
Personal saving§
_
_ do

'217.1
19.5
' 197. 5
'8.9

' 238 3
'23 1
' 215 2

r 244 1
'26.6

4.5

'16.8
r
7. 4
r
41 8
'21.9
' 12.2
' 7.8

r 23. 2

' 227. 3
'20 2
' 207. 1
'4.6

'8 5

'24.1
' 16 4
'8 3

r

r 217 5

r 16 g

'9.3

PERSONAL INCOME, BY SOURCEf
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 noiiagricultural income

do

' 222. 7
' 143. 2
' 146. 1
'63.9
'41.9
'18.8
'21.5

' 227. 7

'•61. 3
'40.4
18.5
21.0

' 219. 0
' 141. 1
' 144. 1
'62.8
'41.3
'18.7
'21.3

'2.9
'3.5
'42.4
'18.4
r
14. 3

3.0
'3.5
'42.5
'18.4
'13.5

'2.9
' 3. 6
'45.3
' 18.4
'12.2

'3.1
'3.6
46.1
'18.9
'11.9

' 199. 9

' 202. 6

' 216. 9
r 138. 3
r 141. 2

' 204. 0

r 147. 2

' 150. 3
' 66. 2
'42.8
'18.9
22.4

' 208. 6

' 234. 1
' 152. 4
' 155. 6
'69.3
' 43. 1
'19.3
'23.9

' 236. 4
' 157. 3
'69.9
' 43. 2
'19.5
'24.7

' 244. 4
' 155. 9
' 158. 9
'70.8
'43.6
'19.6
'24.9

' 243. 6
' 158. 0
'161.6
' 71. 7
'44.3
19.9
'25.7

' 243. 3
' 160. 0
' 163. 4
'72.4
'44.5
19.8
'26.7

' 245. 5
' 162. 2
' 165. 9
'73.7
'44.9
20.0
'27.3

' 249. 0
' 164. 8
' 168. 2
'75.0
'45.3
'20.1
'27.8

249.5
164.1
167. 8
74.4
45.0
20.2
28.2

'2.9
'3.6
'45.3
' 21. 6
'11.3

'3.2
'3.6
'46.3
'19.7
12.1

'3.1
'3.7
'47.2
'19.5
11.8

'3.0
'3.7
'48.1
'25.0
'11.7

'3.6
'3.7
'50.5
'18.8
'12.6

'3.4
'3.8
'48.2
'19.2
12.1

'3.7
'3.8
'47.7
'19.7
12.1

'3.4
'3.8
'48.1
'20.2
12.1

3.7
3.8
48.7
20.2
12.7

' 212. 9

'214.3

' 215. 5

' 223. 4

' 221. 4

' 222. 9

' 225. 2

' 227. 8

228.1

' 231. 5
' 149. 7
' 152. 6
'67. 1
'42.8
'19. 1
'23.6

r 154. 2

NEW PLANT AND EQUIPMENT
EXPENDITURES
1
All industries, quarterly total - _ _ _ mil. of dol
4,330
4,700
5,830
' 5, 160
6, 420
1
Manufacturing, .
do.
1,860
2,050
2 790
' 2, 460
3, 240
1
Mining
do
160
180
200
'180
220
Railroad
_ _____
_ do_
300
290
320
'300
M40
1
Other transportation
do
90
120
140
'120
140
Electric and gas utilities
do
760
820
940
'750
*950
1
Commercial and miscellaneous
do. _
1,160
1,240
1,440
' 1, 340
1. 420
' Revised.
1 Estimates for April-June 1951, based on anticipated capital expenditures of business.
|Revised series. Quarterly estimates of national income, gross national product, and personal income and monthly estimates of personal income have been revised beginning 1948; for
these revisions and for earlier revisions (covering data for 1946-47), see tables 41, 43, 45, and 48 in part V of the National Income Supplement to the SURVEY, July 1951
cf Includes inventory valuation adjustment.
§Personal saving is excess of disposable income over personal consumption expenditures shown as a component of gross national product above.




S-l

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