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Unemployment Rate-

Recent Trends Follow
Movement in GNP Gap
The unemployment rate-the proPortion of the nation's workers
lO?king for jobs-is one of the most
Widely watched economic indicators. And yet, although employlUent draws constant attention in
the formulation of economic policy,
~o~etary and fiscal policy tools are
r;:slgned basically to speed or slow
. ~ rate of change in business ac~l\1lty overall-usually by influenc~g P~vate spending decisions.
t utsIde of direct Government inervention in the labor market, such
as special manpower programs,
econOmic policy cannot directly
affect the level of unemployment.
Demand for labor is a derived
demand, its strength or weakness
~~pending on demand for products.
rength in demand for goods and
S~rvices is usually translated into a
S rong demand for labor. When

product markets weaken, demand
for labor usually weakens too. Determination to lower the unemployment rate-as was enunciated in the
latest Economic Report of the
President-calls for actions to stimulate business and, thereby, the derived demand for enough additional
workers to lower the unemployment
rate.
During the most recent business
cycle, both monetary and fiscal
policy turned more' expansionary
in 1970, when it became apparent
that the economy had taken a
downturn in late 1969. After reaching the trough of the recession in
the fourth quarter of 1970, the
economy began to grow steadily
again in 1971. But while real economic growth continued into 1972,
the unemployment rate seemed
stuck. In the second quarter of this

year-a full year and a half after
the recession officially ended-the
average unemployment rate was
st!ll 5.8 percent. That was only
slightly lower than in the fourth
quarter of 1970.
Unemployment and other trends
This sluggishness in the unemployment rate so long after the end of
the recession contrasts sharply with
e~perience in most recovery perIods. In the three previous recovery periods since 1950-those following the recessions of 1953-54,
1957-58, and 1960-61-the unemployment rate dropped an average
of 1.6 percentage points in the first
six quarters after the recession
trough. Failure of the unemployment rate to ease in the six quarters
since the 1970 low in economic activity-and the fact that easing was

.........
Definitions

Actual real GNP-gross national product. A q~arte:ly
estimate by the Department of Commerce, thIS serIes
shows the nation's actual production of goods and
services. To eliminate the effects of inflation-and thereby
arrive at real GNP-the estimates are adjusted for price
increases.
Potential full-employ"ment real GNp-the goods and
services the nation would produce if its resources were
fully utilized. Estimated by the Council of Ec?nomic
Advisers, this series reflects long-term trends In
productivity and the labor force.
GNP gap-a measure of the difference between potential
real GNP and actual real GNP.
Percent GNP gap-GNP gap as a percentage of potential
real GNP.

111l •

Sllless Review / November 1972

1

progressively less after previous
recessions-raises the question of
whether structural changes caused
the unemployment rate to remain
high even while the economy was
on the upswing.
Examination of this latest recovery in the context of the historical relationship between the unemployment rate and growth in
real output relative to its potential
suggests that much of the failure to
achieve a significant lowering of the
unemployment rate has been due
to the slow rate of real economic
growth. Until very recently, real

output was growing only about as
fast as the economy's potential to
produce. As a result, there was very
little reduction in the pool of idle
resources-particularly the pool of
unemployed workers.
Two long-run trends creating
opportunities for higher growth targets, nevertheless, work against
lower unemployment rates. One is
the increase in productivity. The
other is the increase in the size
of the labor force.
Since workers are hired only to
meet market demand for the goods
and services they produce and the

average productivity of the labor
force has been rising about 3 percent a year, an increase in demand
for products of only about 3 percent a year can usually be met
with the existing labor force. For
employment to increase, the demand for final products must expand faster than the increase in
productivity. Meanwhile, the labor
supply is also increasing-at a
rate varying with both the number
of people turning 16 (the age at
which people in the United States
are counted as part of the population of labor-force age) and the

-

Unemployment rate estimated from GNP gap
follows movement in actual unemployment rate
PERCENT OF LABOR FORCE

8

6

4

o

"60'

"66'

"68'

"70'

"72'

NOTE: 1.Estimated rate Is from a regression equation where the unemployment rate was related to the
percent GNP gap lagged one period.
2 . Shaded areas show recessions as dated by the National Bureau of Economic Research.
SOURCES: U.S . Department of Labor
Federal Reserve Bank of Dallas

While movements in the GNP gap explain
most changes in the unemployment rate,
special factors can cause small deviations
over short periods. In the past year, for examJ?le, the civilian labor force has grown
rapIdly as participation rates returned to
their prerecession levels and further reductions were made in the armed forces. This

2

bulging in the labor force probably helped
hold the unemployment rate slightly higher
than expected from the GNP gap in the
second and third quarters. For a discussion
of the labor force and employment growth
over the past year, see "The Labor Market
in an Expanding Economy," Federal Reserve Bulletin, September 1972.

Methodology

Least squares linear regression analysis was
used to estimate the statistical relationship
between the GNP gap and the unemployment rate. The dependent variable was the
unemployment rate, with separate equations
fitted to rates for the total civilian labor
force, adult men, adult women, and teenagers. The independent variable in each
equation was the percent GNP gap lagged
one period. Data were quarterly observations from the first quarter of 1950 through
the fourth quarter of 1971-88 observations.
Initial results showed a positive serial
correlation in the residuals. Original data
were, therefore, transformed on the assumption that the residuals were generated by a
first-order autoregressive process. Equations
reestimated with transformed variables contained no significant serial correlation.
The constant, restated in terms of values
of the original variables, showed the unemployment rate to expect when the GNP gap
was zero. Since both variables were expressed in percentage terms, the coefficient
of the gap gave the percentage-point change
in the unemployment rate associated with a
1 percentage-point change in the GNP gap.
The relationship was much stronger for
adult men and women than for teenagers.

And the relationship for the entire labor
force was even stronger. This suggests that
some random fluctuations in unemployment
of the various components offset one another, providing a closer fit between the
total unemployment rate and the GNP gap
than for the separate components.
The Chow Test was used to see if relationships were fairly stable over time-the period
used being from 1950 through 1971. Relationships for the total unemployment rate
and the unemployment rate for women were
stable. Relationships for men and teenagers
were not stable, however, for the whole
period. At a given level of the GNP gap, the
unemployment rate for men was lower in
the 1960's than in the 1950's. The reverse
was true for teenagers. These two shifts in
component relationships tended to offset
each other, however, helping to preserve the
stability of the aggregate relationship between the total unemployment rate and
the GNP gap.l

1. The classic paper on potential GNP and the GNP gap is

"Potential GNP: Its Measurement and Significance" by
Arthur M. Okun, 19G£ Proceedinus of the American Statistical A880oiation.

REGRESSION RESULTS OF RELATIONSHIPS
BETWEEN UNEMPLOYMENT RATES AND PERCENT GNP GAP
Unemployment
rate

Constant

Adult men ..

2.916

Adult women

4.005

Teenagers

.. . .

Total ..... . . .

11.961
3.896

Coefficient
of percent
GNP gap

.275
(.026)
.250
(.021 )
.535
(.073)
.308
(.019)

R'

SE

DW

F-statlstlc

.56

.309

1.741

112.42

.61

.297

1.801

135.08

.38

.796

2.039

53.40

.75

.285

1.765

261.25

'

1. Each relationship significant at the 0.01 leve l
NOTE: 'ii' Is the coefficient of determination adj usted for degrees of freedom.
SE Is the standard error of the regression equation .
DW Is the Durbin-Watson autocorretatlon test statistic.
Figures In parentheses are standard errors of the regression coafflclents .

.......

btl .

SlIless

Review I N ovember 1972

3

-GNP GAP AND UNEMPLOYMENT RATE

Period

Peak
. . .. . . ...
Trough
Four quarters
after the trough ...

Average of three
busi ness cycles,
1950-611
Percent
Un emp loym en t
GNP gap
rate

Business cycle,
1969-72
Un employment
rate

Perce nt
GNP gap

2.2%
7.7

4.0%
6.7

1.8%
6.8

3.6%
5.9

3.2

4.9

6.2

5.9

1. Includ es recessi ons In 1953-54, 1957-58, and 1960-61
SOURCES: Council of Economic Advis ers
U.S. Department of Labor
Federal Rese rve Bank of Dall as

number of people deciding to participate in the labor force.
For the unemployment rate to be
reduced, demand for final products
must increase not only faster than
productivity but also fast enough
to create jobs both for unemployed
workers and for net additions to the
labor force. And when both productivity and the civilian labor
force are making sizable advancesas they were in 1971-demand for
final products can increase, even
substantially, without causing
enough new hiring to make a significant reduction in the unemploymentrate.
The gap and unemployment rate
These basic supply and demand
forces operating on the labor market are reflected not only in the
unemployment rate but also in a
more generalized measure of economic performance-the GNP gap.
This measure is the difference between the nation's production of
goods and services (its gross national product) and what production would have been if resources
had been fully used-meaning at an
unemployment rate of about 4 percent. Being the difference between
actual and potential production,
the GNP gap-like the unemployment rate-is a measure of the
extent to which available resources
are underutilized.
Since both series measure slack
in the economy, they are closely
related-as experience since 1950
has shown. During recessions, when
production dropped and the gap
4

between actual and potential GNP
widened, the unemployment rate
rose. As demand and production
picked up during recoveries, the
gap narrowed-often declining
sharply in the first few quarters
after the recession-and the unemployment rate dropped.
Statistical analysis shows a fairly
precise relationship between these
two measures. Changes in the
unemployment rate tend to lag
slightly behind movements in the
GNP gap. About three-fourths of
the changes in the GNP gap since
1950 have been reflected in changes
in the unemployment rate in the
next quarter.
The unemployment rate followed
in close, positive step, rising and
falling as the GNP gap opened and
closed. An increase in the GNP
gap of 1 percent, for example, was
usually followed in the next quarter
by a rise in the unemployment rate
RELATIONSHIP BETWEEN GNP GAP
AND UNEMPLOYMENT RATE
Perce nt
GNP
gap

- 2.0%
-1.0
.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0

Expec ted
unemployment rate
one quarter later

3.3%
3.6
3.9
4.2
4.5
4.8
5.1
5.4
5.7
6.0
6.4

NOTE: Based on results of an equation, estimated
from first qu arter 1950-fourth quarter 1971
data, where the un employment rate was
regressed on valu es of the percent GNP gap
lagged one period

of 0.3 percentage point. And a
3-percent increase in the gap was
followed by a nearly 1 percentagepoint increase in the unemployment rate. When the gap closedactual performance in real GN~
equaling the estimated potentIal
performance-the unemployment
rate averaged 3.9 percent, clearlY
within the range usually considered full employment.
While these, of course, were only
average associations, they clearlY
indicate that the unemployment
rate can be estimated, often quite
accurately, from its association .
with the GNP gap. Movements In
the unemployment rate have occasionally deviated from the pattern estimated from the gap-such
as during military buildups and
cutbacks. But the basic relationship between these two measures
has remained close throughout the
period since 1950. It also held for
1950-60 and for 1960-71, and with
remarkable stability.
Link holds despite changes . ••
One reason for the continuity of the
relationship is that estimates of
potential GNP take into account
changes in both the rate of increase
in the size of the labor force and the
rate of gain in productivity. When
the potential growth of the labor
force increases-whether from a
faster rise in population or from

Unemployment rate and GNP gap move in same direction
PERCENT

10----------.---.______.-~--_r_r--------------------~~----8-

~-

-3~'~5~O~~'5~2~~~'5~4~~~'5-6~~~'5~8,-~~6~OT-~'6~2~--~'6~4~~'~6~6.--r.'~6~8.--r.'7~O~~~'7-2~
i~TE:

Shaded areas show recessions as dated by the National Bureau of Economic Research.
URCES: Council ot Economic Advisers
U.S. Department of Commerce
U.S. Department ot Labor
Federa I Reserve Bank of Dallas

~ncreased participation in the labor
orce-the growth rate of fulle~ployment potential GNP is reed upward to reflect the change.
, e growth rate of potential GNP
Is also adjusted when the rate of
productivity growth changes.
, But because the estimate emphaSIZes long-run trends, adjustments
are tnade only when it is clear that
arnaJor
. change has taken place.
'rh
h e rate of potential GNP growth
r as been revised upward only four
'ltnes since 1950-and then primarI y to reflect increases in the rate of
growth in the labor force. This upward drift in the rate of potential
f~Owth-from 3.5 percent in the
of 50's to 4.3 percent today-implies,
e course, that the economy must
pfPand faster to maintain full em1 oYtnent now than it did in the
l' 950's. But it also implies that the
esources are available for the increased expansion.
of Another reason for continuation
th the close relationship between
e GNP gap and the total unemPloYtnent rate is that the relationllu .
SIness Review I November 1972

ih

ship has held for major components
of the labor force. With the increase
in population since World War II,
the proportion of the labor force
made up of young people has been
on the rise. Also, the proportion
made up of working women has
been increasing.
But while teenagers (those age
16 through 19) and women (age
20 and over) have been rising relative to the proportion of men in the
labor force, a significant positive
relationship also holds between the
unemployment rate for each of
these components and the GNP
gap. The strength of the relationships has varied somewhat between
components, however, with unemployment rates for men and women
staying more closely related to
movements in the gap than the
unemployment rate for teenagers.
Employment and unemployment
figures for all three components
hang primarily on the state of the
general economy. As long as the
GNP gap provides a fairly good
picture of the economy overall, the

relationship between the gap and
the total unemployment rate is apt
to hold.
..• even in the latest cycle
The dependability of the relationship between the GNP gap and the
unemployment rate provides a
framework for studying changes in
the unemployment rate during the
1969-72 business cycle. At the cyclical peak in the fourth quarter of
1969, the unemployment rate averaged 3.6 percent and the GNP
gap was 1.8 percent of potential
real GNP. At that point, the GNP
gap was already beginning to widen
and the unemployment rate while
still low, was beginning to edge
upward. At the trough of the recession in the fourth quarter of
1970, the GNP gap had increased
to 6.8 percent of potential real
GNP and the unemployment rate
averaged 5.9 percent.
This pattern was similar to that
in previous recessions. But at both
the peak and the trough, the unemployment rate and the GNP gap
5

were slightly lower than the average for the other three business
cycles since 1950. And there was
a sharp contrast in the recovery
period.
The average GNP gap for the
trough quarters of the three previous recessions was 7.7 percent of
potential real GNP, and the average unemployment rate was 6.7
percent. Four quarters after the
trough, the average gap had been
reduced substantially-to 3.2 percent-and the unemployment rate
had dropped to 4.9 percent. In
these other recoveries, real GNP
expanded considerably faster than
the economy's potential, narrowing
the GNP gap. And the gain was reflected in a significant reduction
in the unemployment rate.
But recovery from the most
recent recession was entirely different. In the first year of the current recovery-from the fourth
quarter of 1970 to the fourth quarter of 1971-no significant change
was made in the GNP gap and the
unemployment rate remained unchanged. In the fourth quarter of
1970-the trough quarter-the GNP
gap was at 6.8 percent of the potential and the unemployment rate
was 5.9 percent. Four quarters
later, the GNP gap was 6.2 percent
and the unemployment rate still
held at 5.9 percent.
While the economy had picked
up, actually trimming the GNP gap
slightly, the recovery was decidedly weak compared with other recent cycles-too weak to reduce the
unemployment rate. A narrowing
in the GNP gap of only 0.6 percentage point was simply not enough
to reduce the rate of joblessness.
This most recent recession came
after a long, vigorous expansion
that had reduced the unemployment rate-eventually to 3.5 percent. But actual output had been
driven higher than the estimated
potential. And with inflationary
pressures building rapidly, monetary and fiscal steps were taken to
slow the expansion. By the end of
6

1969, restrictive policies had
slowed the economy but policy
makers were still cautious about
restimulating business activity.
Inflation had simply not tapered
off as expected.
To keep a brake on rising prices,
monetary and fiscal authorities
followed a conservative expansionary policy, maintaining some excess resources. And as a result, the
economy responded with only a
moderate recovery-real GNP
growing only about 5.0 percent
from the fourth quarter of 1970 to
the fourth quarter of 1971. With no
more growth than this, the unemployment rate was bound to remain
high.
Faster recovery shows results
Fiscal authorities took a sharp turn
in August 1971, instituting measures designed to add new stimulus
to the economy while dealing
directly with persistent inflation
and balance-of-payments deficits.
Wage and price controls were applied. Tax incentives were provided
to encourage purchases of automobiles and capital equipment.
And the dollar, allowed at first to
float in world markets, was eventually devalued. Meanwhile, although the quarterly rate of
growth of the money stock varied,
monetary authorities continued
their expansionary policy.
The economy gradually responded. Growth in real GNP
picked up in the first half of 1972,
reaching a seasonally adjusted annual rate of more than 9 percent in
the second quarter. With this rapid
growth in output, the GNP gap
narrowed from 6.2 percent in the
fourth quarter of 1971 to 4.6 percent in the second quarter of 1972.
As growth of the economy improved relative to its potential,
employment began expanding
faster than the labor force and the
unemployment rate finally started
trending downward. While still
averaging 5.8 percent in the first
and second quarters of 1972, the

rate dropped to an average of 5.5
percent in the third quarter, again
reflecting the expected lagged relationship between the GNP gap
and the unemployment rate.
The extent of the narrowing in
the GNP gap in the second quarter-and the almost certain knowledge that this narrowing continued
in the third quarter-suggests that
if the momentum of the recovery
continues, a further drop in the unemployment rate can probably be
expected in the fourth quarter.
As the unemployment rate declines, policy makers will again face
the problem of choosing between
alternative objectives. Rapid
growth in GNP relative to its potential would doubtlessly reduce
the unemployment rate still further. But growth too fast could
also contribute to inflationary pressures. Their choice of a target
growth path, then, will depend not
only on movements in prices and
unemployment but also on tradeoffs between them.
-Leonard G. Bower

Dnemployment-

The Southwest Fares
Better than the Nation

Unemployment in the five south-

W~stern states averaged only

;hghtly more than 3 percent of the
abo r force in 1969. But with the
recession beginning late that year,
the unemployment rate in these
states began rising and by the end
of 1970 had reached a recession
Peak of 5.1 percent. And while the
economy has been recovering for
tnore than a year and a half, the
region's jobless rate has been slow
to respond, remaining about 1 perben~ag~ point higher than at the
egmnmg of the recession.
Still, compared with the nation
as a Whole, the region has fared

-

quite well. At 4.5 percent in August, the unemployment rate for
the five-state area was about 1
percentage point less than the
national average-a margin that has
remained fairly constant since the
end of 1970.
Much of the lower unemployment in the Southwest reflects the
composition of its industries. Regions with heavy concentrations of
manufacturing-especially of durable goods-tend to be more sensitive to business cycles than other
regions. And as a result, slumps in
general business conditions usually
push their unemployment rates

lJnemployment in Southwest stays below rate for the nation ...
PERCENT
OF LABOR FORCE
(SEASONALLY ADJUSTED)
7 ___________________________________________
__

UNITED STATES

6_

5_

4_

3_

~~~----------------r_--~--._~~--I
I
1969
1970
1971
1972
sou RCES:

State employment agencies
U.S. Department of Labor
Federal Reserve Bank of Dallas

.........
llll .

Slness Review / November 1972

much higher. But only about 14
percent of the workers in the
Southwest depend on manufacturin.g for their livelihood, compared
wIth some 23 percent of the nation's workers. And less,than 8
percent of the region's workers are
employed in the production of
durable goods, compared with 13
percent in the nation.
Further stability of employment
in the Southwest is derived from
the relative importance of mining
and agriculture-neither of which is
very sensitive to cyclical pressures.
Together, these two industry
groups account for about a tenth

· .. but with wide differences from state to state ...
PERCENT OF LABOR FORCE

(SEASONALLY ADJUSTED)

5----------------------------------------------TEXAS

4AVERAGE RATE

3-

2-r.----------r---------.---------~--------~
6------------------____________________________
_
ARIZONA

54-

2-r----------~----------~--------~----------~
6------------__________________________________
_

.".....,

3~--~------~------------r_----------~----------~

8------------------------------------------------------NEW MEXICO
76 - ... ... .. ... ................. ..... .. .

4-,-------------r------------,-----------~~----------~
7--------------------------------~~----------LOUISIANA
6 - ......... . ... .......... ... . ...... .. .

54

I

1969

1970

SOURCES : State employment agencies
Federa I Reserve Bank of Dallas

8

1971

1972

of the jobs in the southwestern
states-a proportion twice as great
as for the nation as a whole. The
proportion of the total work force
employed in agriculture is half
again greater in the Southwest. .
And the proportion in mining (pnmarily oil and gas production) is
nearly four times greater.
States within the region have
fairly similar industry compositions. Less than 15 percent of the.
work force in each of these states IS
employed in manufacturing, for er
ample. And with the exception 0
Oklahoma, which has an unusually
large agricultural base, about
5 percent of the workers in each
state are employed in agriculture.
As would be expected, therefore,
recent movements in the unemployment rates for these states
have been fairly similar. Rates
generally rose about 2 percentage
points during the recession, reaching peaks around the end of 1970.
They then began to edge downward but in August were still .
within 1 percentage point of theIr
recession peaks.
But the average levels of unemployment have been quite different. Since the start of 1969, the
unemployment rates in Texas and
Arizona have averaged less than 4
percent-well below the 5-percent
national average. The rate in Oklahoma has averaged 4.3 percent.
But rates in Louisiana and New
Mexico have averaged 6 percent.
Unemployment rates have also
varied widely within states. In
Texas, for example, where the outlook for jobs has been especially
bright, local pockets of high unemployment still persist. Much of
the below-average unemployment
in this state, in fact, has been centered in comparatively few cities.
Of the 22 cities for which the
Texas Employment Commission t
regularly publishes unemploymen
figures, only eight had unemployment rates in August that were
less than the state average. Two
of these were Dallas and Houston.

I
I

r

I

I
I

I

I
.I
f

I

· .. and even within a state, as for example, Texas
(NOT SEASONALLY ADJUSTED)

AUSTIN
LUBBOCK
DALLAS
WICHITA FALLS
AMARILLO
HOUSTON
ABILENE
MIDLAND-ODESSA
STATE AVERAGE
SAN ANGELO
SAN ANTONIO
LONGVIEW-KILGORE-GLADEWATER
TYLER
WACO
FORT WORTH
BEAUMONT -PORT ARTHUR-ORANGE
CORPUS CHRISTI
EL 'PASO
TEXARKANA
GALVESTON-TEXAS CITY
BROWNSVILLE-HARLINGEN-SAN BENITO
McALLEN-PHARR-EDINBURG
LAREDO

"

o

2

5

8

."

i

i

9

10

PERCENT OF LABOR FORCE
AUGUST 1972
SOURCE T
.
. ,
: exas Empl,oyment Commission

.........
a Since these two largest cities
thCOunt for more than a third of
jOblstate's labor force, their low
a ess rates held down the state
~ehage. By contrast, many of the
ttl g er than average unemployf ent rates were in cities with labor
corces ~o~ small to make a signifiant difference in the state aver11lls'
llless Review I November 1972

age. Laredo, for example, with an
unemployment rate in August of
more than 9 percent, accounts for
less than 1 percent of the state's
potential workers.
Again, these local differences
partly reflect differences in the
composition of industries. Dallas
and Houston are both manufac-

turing centers. But Dallas also
depends heavily on finance and
trade, both of which continued to
grow during the recession. And
Houston had a broad enough base
to weather the downturn-especially since much of its manufactured output supports the still
rapidly growing petroleum indus9

-try. Also, unlike Dallas, where
manufacturing is essentially laborintensive, manufacturing in Houston is mainly capital-intensive. As
a result, cutbacks in Houston had
less effect on total employment in
the area.
The remarkably low rate of unemployment in Austin-low even
for business peaks in industrial
areas-is due mainly to the virtual
independence of this local economy
from cyclical movements. With
very little nonservice industry, employment in Austin has long been
based on government operations,
including operation of the statesupported university. Employment
at the state capital has further
expanded in recent years with the
location of major federal installations in the Austin area.
Outside Dallas, Houston, and
Austin, unemployment rates in
Texas have generally been lowest
in West Texas and highest in
South Texas, especially along the
border.

10

There were also wide differences
in other areas of the Southwest.
All three of the other major cities
in the Eleventh District outside
Texas had unemployment rates in
August lower than the average for
their states. In Tucson, the rate
was 3.7 percent, compared with 4.1
percent for Arizona. In Monroe
and Shreveport, the rates were 5.3
percent and 5.8 percent, respectively, compared with 6.6 percent
for Louisiana.
Local differences in unemployment rates are, of course, due to
many factors. Some tend to keep
unemployment down even during
a recession. And some tend to hold
it up even during a recovery. But
despite these differences-especially in factors influencing growth
in employment and labor forcesmost areas should see some improvement in their labor markets
as the recovery continues.

New member banks

!he First National Bank of Round Rock, Round Rock, Texas, a newly organized
Institution located in the territory served by the Head Office of the Federal
Reserve Bank of Dallas, opened for business September 29, 1972, as a member of
the Federal Reserve System. The new member bank has capital of $200,000,
surplus of $159,000, and undivided profits of $150,000. The officers are: Tom W.
Miller, Chairman of the Board; Jay C. Sloan, President; and Bobbie M. Sutton
Cashier.
'
The Chevy Chase National Bank, Austin, Texas, a newly organized institution
located in the territory served by the San Antonio Branch of the Federal Reserve
Bank of Dallas, opened for business October 18, 1972, as a member of the Federal
Reserve System. The new member bank has capital of $200,000, surplus of
$200,000, and undivided profits of $200,000. The officers are: Larry E. Temple,
Chairman of the Board; Charles Jobe, President; and J. Frank Murrow,
Vice President and Cashier.
New par banks

The First State Bank, Dime Box, Texas, an insured nonmember bank located in
the territory served by the Houston Branch of the Federal Reserve Bank of
Dallas, was added to the Par List on October 1, 1972. The officers are: Riney A.
Spacek, President; Michael G. Murphy, Vice President; Frank Riske, Second
Vice President; Mrs. Gladys Nimtz, Cashier; and Mrs. Jean Bay, Assistant
Cashier.
The Iredell State Bank, Iredell, Texas, an insured nonmember bank located in
the territory served by the Head Office of the Federal Reserve Bank of Dallas,
was added to the Par List on October 1, 1972. The officers are: T. L. Chapman,
President; Mrs. Murlene Smith, Cashier; and Mrs. Neva Blue, Assistant Cashier.

........

lillS '

lness Review / November 1972

11

Federal Reserve Bank of Dallas

November 1972
Statistical Supplement to the Business Review
Credit at weekly reporting banks
in the Eleventh District rose
sharply in the five weeks ended
October 25. Substantially more
than usual for that time of year,
the rise in total credit was due
primarily to a sharp increase in
deposit inflows that easily allowed
banks to accommodate a greater
than usual expansion in demand
for loans.
Business and real estate loans
accounted for most of the advance
in total loans. Consumer borrowing rose about in line with comparable periods in other recent yea'rs.
And security loans and loans to
financial institutions other than
banks were slightly weaker.
Banks made sizable increases in
their holdings of municipal issues.
Reductions in their holdings of
Government securities, however,
left investments only slightly more
than five weeks before.
Although the sharp rise in deposits resulted mainly from increased inflows of demand deposits,
time and savings deposits were
also up sharply, largely reflecting
a rapid expansion in large negotiable CD's outstanding. With the
increase in deposits, banks reduced
their net borrowings from nondeposit sources. Borrowings in the
commercial paper market were up
moderately. But this rise was more
than offset by a reduction in Eurodollar borrowings.
Seasonally adjusted total employment in the five southwestern
states rose sharply in September,
reaching a re'cord level 0.6 percent
higher than in August. The number of workers unemployed continued to decline, dropping 1.5
percent from August and 7.2 percent from September 1971.

Except for mining, all categories of nonfarm employment showed
both month-to-month and year-toyear increases. The largest gains
over August were in construction
(2.0 percent), government (1.5
percent), and durable manufacturing (1.1 percent). Employment
in mining remained the same as a
month before and only slightly
higher than a year before.
Agricultural production in the five
states of the Eleventh District has
been running slightly ahead of last
year. Livestock production has
lagged all year. But, on the
strength of cotton, crop production through August was about 16
percent ahead of a year before. The
drouth in 1971 brought reductions
in cow herds. A sharp downturn in
production of sheep and hogs and a
slowing in the marketing of fed
cattle also contributed to the lag in
livestock production. The gap has
been narrowing, however. By yearend, livestock production could
match the output last year.
Cotton is being harvested
throughout the District. The crop
is expected to total 5.7 million
bales in these five states-42 percent more than last year. The
citrus harvest is just beginning in
Texas, where the forecast is for a
15-percent larger crop than last
year. Arizona also expects some increase in citrus production.
Because of record marketings in
August, the number of cattle on
feed in these states was down
slightly on September 1. Texas produced 208.6 million pounds of red
meat in August-13 percent more
than a month before and 15 percent more than a year before. Although the gain was due primarily
to increased beef production, lamb

and mutton production also increased slightly. In Arizona, the
slaughter was 18 percent greater
than in July.
Due to a sharp break in cotton
prices, the index of prices received
by Texas farmers and ranchers fell
2 percent in the month ended September 15. Most other prices held,
and some strengthened slightly.
Despite this drop, however, the index was still 13 percent higher
than a year earlier.
Receipts from farm marketings
also continued well ahead of last
year. Through August, the fivestate total for marketings was $4.3
billion-17 percent more than in the
first eight months last year.
Department store sales in the
Eleventh District were 15 percent
greater in the four weeks ended
October 28 than in the corresponding period last year. Cumulative
sales through that date were 11
percent greater than in the comparable period a year before.
Registrations of new passenger
automobiles in Dallas, Fort Worth,
Houston, and San Antonio dropped
15 percent in September to a level
1 percent lower than a year earlier.
Cumulative registrations for the
first nine months of the year were,
nevertheless, 12 percent ahead of
the same period a year earlier.

The seasonally adjusted Texas
industrial production index, fully
recovered from a slight decline indicated by revision of July data,
reached another record high in
September. At 133.5 percent of its
1967 base, the index was 1.6 percent higher than in August and 7.3
percent higher than a year earlier.
(Continued on back page)

CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS

Eleventh Federal Reserve DistrIct
(Thousand doll ars)

ASS ETS

Oct. 25,
1972

Se pt. 20,
1972

Oct. 27,
1971

736,01 1
8,330, 164

914,050
8,183.490

486,353
7,033,190

Fe deral funds sold and se curities pu rcha se d
und er agre e ments to res ell • • .•.. • ...•...••• •

Othe r loo ns and discounts, gross . .. . . . ... . . .. . . .

----

Co mmercial and in dustrial loans . • . . . .. . .. .. . .
Agricultural loon s, ex cl uding CCC
ce rti flcat es of interest •.. ... • . ... . ....... ..
l oans to brokers a nd de al ers for
purcha sing or carrying :

3,672,596

3,635,246

204,911

193,508

3,225,233

128,374

U.S. Governme nt secu rities ... . . . . ... . . .. . . .
Oth er secu rities . . .. .. . .. ..... .. . . . .. .. .. .

1,3 23
78,716

1,166
85,227

5 12
56,083

6,658
455,406

6,429
454,692

6,1 84
444,688

145,310
676,47 1
1,1 30,216
20,434
30,7 28
93 1,375

13 1,9 19
6B6,753
1,092,046
16,120
30,846
925,273

126,438
502,803
873,424
18,676
34,751
799,032

0
976,020
3,706,754

0
924,265
3,647,053

0
816,992
3,198,583

967,462
141,695
0

1,000,772
166,736
0

1,00 1,335
77,591
0

O ther loa ns for p urcha sing or ca rry ing:

U.S. Government se curities ... .... .. .... . . . .
Other se curities . • . . . .. . ........ . ....... ..

loa ns to nonb a nk Anoncia l institution s:
Sales An a nce, personal fln ance , factors,
and other busin oss cre dit com pan ies . . . . . . .

Other • ••. • •• .. .. . . • •••• • .• • .• • .• ••. ..•
Real estate loan s . ... ... . .. . ..... . .. . ... . . .
Loan s to domestic comm ercial ban ks • . . ... . ....
Loons to fore ign bon ks . . . . . . .. .. . . .. .. . . .. . .
Consumer instalm ent loon s.. .. . . . ..... ..... . .
Loon s to foroign governm ents, official
institu tions, cen tra l bo nks, a nd international
institutions. ... • .. •.. .• • .. .. . .. ... .. . .. . .
Oth er loan s••• . . . ....... . . . ...... .. ... . .. .
Total inves tm ents . .. . .... . .... . • . .. ........ ..
To tal U.S. G overn ment sec urities .... .. ... . ... .
Trea sury bill s . .. .. .• .... .. ... . .... . .....
Trea sury ce rtificates of ind e bte dn ess . . .. .. . .
Trea sury notes an d U.S. G overn ment
bonds maturing:
Within 1 year . • . . . . . . .. . .. • . . . .. .. . .. .
1 ye a r to 5 years• ••• . • ....... . . . . .. . . .

126,522
501,947
197,29B

135,193
492,360
206,483

153,989
642,574
127,181

210,595
2,284,870

142,818
2,253,818

11 7,393
1,923,565

14,973
228,854
1,592,679
1,054,258
11 4,042
480,253
12,86B

15,004
234,64 1
1,445,180
926,969
104,447
400,564
12,354

19,537
136,753
1,432,270
1,11 1,524
99,036
425,722
12,365

632,831

606,350

483,44 1

TOTAL ASSETS .. .. . . .......... . ..... . .. . 16,659,860

16,240,457

14,2B2.484

After 5 yea rs • •.• • •• • • •.• • •• . •. . ••• . • •
Obligations of sta tes and politica l subdivision s:
Ta x warrants a nd short-term notes an d bill s• . .

All other • •• . . . . .. •• . • . • • .. •..• •.. • •• • ••
Oth er bond s, co rpo rat e stocks, and se curities:
Certifica tes re prese nting pa rticipation s in
f e deral ag enc y loans•••.. . . .. . . .. . . .. •.

All othe r (including co'porate stocks) • ••••• • • •
Cosh items in process of coll ection • ••• . ... . ... . . .
Rese rves w ith Fed eral Reserve Bonk • .. ... . . . . .. .
Currency and coin •• .. ... . . .. .. . . . •.. •••. ••.•
Balanc es with bon ks in th e Unite d States . • • . ... . •
Ba lances w ith bonks in foreig n coun tries • •. .. ... . .
Oth er a ssets (including inv es tm ents in sub sidiaries

not consolidated) • •..•••••• • • • • ••.• • • •• ••• •

RESERVE POSITIONS OF MEM BER BANKS

Eleventh Federal Reserve District

Item
RESERVE CITY BANKS
Total reserves held •• . . .. . . ...•.

With Fe deral Rese rv e 8ank ••• •
Curre ncy a nd coin . ••.. . .. ...
Re quir ed reserves . . .. . . • . •.... .
Excess rese rves • • . • .. . . . . . . . . . .
Borrowing s . . .. ....• . .••• . • . •.
Free rese rves . ..• . ... .. . . . . .. .

COU NTRY 8ANKS
Total reserves held • .. . . ... .. . . .
With Fe dera l Rese rv e Bank •• ..
Curr enc y and coin . . •..... ...
Re quire d reserves . .. • . ... . .. . .•
Excess rese rves . .. . .... .. • . .. ..
Borrowings . ... .. . .. . .•..•..••
Free rese rves . .. ....... . .•.•.•

Oct. 27,
197 1

Tota l d eposits. . ... . . . . .. . . ...•. . •. .. •. ... .••

12,745, 139

12,438,720

11,219,524

Tota l demand de posits •• • • . • ••... . ••.• •. ..••

6,986,678
4,976,566
399,254
129,453
1,342,919

-6,BOO
--,275
4,738,032
374,337
264,43 1
1,302,53B

6,403,442
4,562,579
250,216
136,214
1,323,629

2,675
40,532
95,279
5,758,46 1

3,336
36,370
81,23 1
5,638,44 5

3,359
31,200
96,245
4,816,082

1,199,654
3,0 34,432
1,385,663
22,405
101,707

1,194,620
2,942,334
1,370,267
22,945
93,779

1,069,793
2,641, 11 7
1,011,03 3
13,559
57,180

13,500
1,100

13,400
1,100

22,300
1,100

1,917,597
22 9,332
45 2,220
141,276
17,806
1,156,490

1,953,Q34
100,236
449,72 4
139,681
19,159
1,139,903

1,355,209
10B,244
360,515
120,883
35,003
1,083,106

TOTAL LIABILITIES, RESERVES, AND
CAPITAL ACCO UNTS .. . . .. . .... .. . . .. . . 16,659,860

16,240,457

Individuals, partn ers hips, and cor porations. . . •
Stat es and political subdivision s .•• . . . . .. . ..
U.S. Government . .. . . . .. .. .. . .. • . ... . ...
Bon ks in th e Unite d States . .• . .. .. .. .. . •.. .
Foreign:
Governm ents, official institution s, central
ba nks, a nd Int erna tional institution s. . .. ..
Comm ercial b a nks • •. . .. ... . . . . .•.. . •..
Certifi ed and of fic ers' ch ecks, etc.. . .........
Total tim e and saving s d e posits•••• .. . . .. . . .. •
Individual s, partnerships, and corporation s:
Sa ving s d e posits. . . . . .... . ...... .. .•. . .
Oth er tim e d eposits . . . . . ... . .. . . . . . .. ..
Sta tes and political subdivision s . •....... .. .
U.S. Governm ent (including postal soving s) . .. .
Bonks in the Unite d Stat es . .. . . . . .. . . ......

Foreign:
Governm ents, ofAcia l in stitutions, centra l
banks, and inte rnationol institutions • • . . . .
Comm ercial bonks . ••. ... . .. •.. . . . .. .. .
Fed eral f un ds purcha se d and securiti es sold
und er ag ree ments to repurchase • . . .. . .. .. .. ..
O ther liabilities for borrow ed mon ey . . . .. .. .. .. .
O th er liabilities ... . . . .. .. . . .. .. .. . . . ... . . . . . .
Rese rves on loan s•• ... .... .. . .. . .. . ••....•• . .
Reserves on securiti es•• . ... . ... . • .. ... . •.. . .. .
Total capitol accounts • ....• •. .• .. .. .. •... . .. .

5 w ee ks end e d

5 w ee ks end ed

Oct.4, 1972

Sept. 6, 1972

Oct. 6, 197 1

916,B50
851 ,042
65,80B
936,978
-20,128
14,985
-35,113

9 17,5 89
852,995
64,594
9 18,036
-447
0
-447

848,695
791,066
57,629
847,075
1,620
15,275
- 13,655

1,00 1,006
785,549
215,457
98 5,955
15,05 1
2,220
12,B3 1

991,849
783,263
208,586
972,712
19,137
3,092
16,045

B86,034
688,1 01
197,933
86B,771
17,263
703
16,560

1,91 7,B56
1,636,591
281,265
1,922,933
- 5,077
17,2 05
- 22,28 2

1,909,438
1,636,2 58
273,1 80
1,890,748
18,690
3,092
15,598

1,734,729
1,479,167
255,562
1,7 15,846
18,B83
15,978
2,905

-

14,282,4]4,

CONDITION STATISTICS OF ALL MEMBER BANKS

-

(Million dol lars)
Sept. 27,
1972

Aug. 30,
197 2

Sept. 29,
1971

Lo a ns and d iscounts, g ross . ... .. . ..... . .. .
U.S. Governm ent obligations. . .. .. .. . . ... .
O ther securities . •.. .............. .. .... .
Rese rves with Fed era l Rese rve Bonk • ... . .. .
Cosh in vault .. .. . . .. . . . .. . . . . . .. .. . .. • .
Balanc es w ith banks in th e United States . . ..
Ba la nces w ith ban ks in f orei gn countries e • . . .
Ca sh ite ms in proc ess of co ll ecti on . • • • . .....
O ther a ssetse • .... . .. • .... . ...... •... . •

16,1 82
2,3 26
5,255
1,459
313
1,207
15
1,655
1,20B

16,033
2,31 0
5,22B
1,501
314
1,190
16
1,514
1,1 80

14,050
2,293
4,368
1,522
2B8
1,206
12
1,371
978

TOTAL ASSETSe ....... .. .. .. .. . ... .. .
LIABILITIES AND CAPITAL ACCO UNTS

29,620

29,286

De mond d e posits of bo nks . .... . .. .. . .. . .

1,683
10,B5 1
11,540

1,689
10,557
11,498

Borrow in gs . ... .. ... . .. .. .. .. .. .. . . ... .
Oth er liabiliti es e . . •. . ..... . .... . •.. . .. . .
Tota l cap itol occounts e . ••. . . . . . .. .. .. . .•

24,074
2,05 4
1,501
1,99 1

23,744
2,094
1,467
1,98 1

TOTAL LI AB ILITIES AN D CAPITAL
ACCOUNTS" . ...... . ..... ... . ... ..

29,620

29,2B6

Item

---------------------------------------------

ASSETS

Total de posits • . • ..•... • . .••. . .• .. •• . •

4 w eeks end e d

---- ----

El eventh Federal Reserve District

Other de mand de posits ••• .. • •.. ••. .•• . ..

ALL MEMBER BANKS
Total reserves held .•• .. . . . . ... .
W ith Fe d eral Rese rve Bank . .. .
Currency and coin . ........ . .
Require d rese rves• .•.. ... . .. . . .
Excess reserves • . .. . . .... . • . • ..
Borrowing s . . ... . . . ........ .. .
Free rese rves . •.. ... . . . . . .. . . .

Sept . 20,
1972

Tim e d e posits . . .. .... . . ..... . . .. ......•

(Averag es of dally figures. Thou sand doll ars)

-

Oct. 25,
1972

LIABI LITIES

-=-

~~
1,696
9,704
9,8 26

-

2 1,226
1.788
1,177
1,897

-

~

--------------------------------------------------------------e--Estlma\ed
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
(Thousand dol lars)

Item

o

-

t 25
"97 2 '

S

t 20
et972 '

Oct . 27,
1971

156,944

37,500
0
3,1,97,050
3,234,550
1,624,810
2, 177, 107

78,39
3 128,476
3'206,87 1
1'716,5 43
2',08 I ,632

--------------------------------------------------------253,152
258,294
538,687

Total gold certiAcat e reserves .. . .. . . .. . . ...•
Di scounts for me mb er bonks . . . .. . .. ... . . . . .
Oth er di sco unts and a d va nces . . . . .. . . ...... .
U.S. G overn ment se curities .••. . . . .... . .... ..
Tota l ea rnin g a sse ts.. . . .. .. . . ..... .. . . . . . .
M e mb er bonk rese rve d eposits. . . . . . . . .. .. . .
Fe d era l Rese rv e not es In actua l circulation . . . . .

o
3,268,104
3,425,048
1,7 23,166
2, 195,733

6

---------------------------------------------------------

BANK DEBITS, END·OF·MONTH DEPOSITS, AND DEPOSIT TURNOVER

SMSA's in Eleventh Federal Reserve District
(Doll ar amounts In thousands, seasonally adiusted)
DEBITS TO DEMAND DEPOSIT ACCOUNTS'
DEMAND DEPOSITS'
Percent change

1972

1972 from
1971

Septem ber 30,

Sep te mb er

August

Se pt em ber

1972

1972

1972

1971

-9
13
19
-5
36
-5
6
17
6
5
9
27
10
13

26%
19
16
0
13
18
17
3
21
23
15
3
II
15
6
0
21
II
8
32
6
10
13
7
10
14
16
16
13

$302,302
II B,OB5
299,BB7
43,276
121,453
201,281
424,249
269,466
102,221
51,742
264,299
35,716
2,706,461
310,053
7B 1,448
133,38 1
3,140,620
51,107
184,060
133,520
154,814
104,182
78,608
B3 1,955
75,043
83,660
116,787
140,107
132,821

32.6
36.1
50.4
20.9
22.0
42.6
31.3
25.2
24.4
25.8
27.0
14.3
55.9
33.4
35.9
23.8
45.5
24.7
28.3
18.2
14.4
17.7
21.3
27.6
16.3
21.2
27.3
26.7
22.7

32.6
38 .1
47.1
21.0
21.7
42.6
29.3
26.6
25.6
30.2
28.0
15.2
56.2
35.5
38.1
26.9
46.6
24.5
28.6
18.5
16.3
17.3
21.1
27.8
17.7
21.2
26.6
30.6
21.8

27.5
33.2
47.7
25.2
20.9
40.6
32.7
25.4
22. 1
26.3
23.9
13.3
60.2
34.7
39.0
2B.B
45.1
25 .0
30.8
16.7
16.0
18.1
19.1
29.0
16.6
21.5
23.3
26.0
21.2

10%

14%

40.4

41.1

41.2

(Annucl ·rate

August

Septem b er

basis)

1972

1971

ARIZONA, Tucson •••...... ...... .••.•••••• • .•.•..•.•
LO UISIANA, Monroe .... .... . .... . .... . ............. .

$10,085,808
4,187,916
14,904,996
902,460
2,663,760
8,256,264
13,188,744
6,720,792
2,495, 11 2
1,335,3B6
7,238,964
512,196
155,247,852
10,093,284
27,985,056
3,075,360
140,181,960
1,271 ,1 24
5,403,552
2,471,808
2, 152,860
1,872,156
1,673,304
22,887, 168
1,229,844
1,754,232
3,159, 120
3,854,364
3,000,336

-2%
-3
4
-3
-I
3
4
- 6
-2
- 16
-3
-8
- I
-5
-8
-9
-4
3
-3
- 3
-II
2
I

29%
24
13
- 14
16
18
17
2
33
II
14
16
7
7

NEW MEX ICO, Roswell ' ••• •..• .•.•.•• ••. ..•.• •••••. .•
TEXAS, Abilene •.•••.•••.. ..•....... .. ••.. •.•.. . . ..•
Amarillo .••........ .. .... . ........•. , .•.....

Austin .• . ..... . ••....•.•.• . .........•.•.•.. .
Beaumont·Port Arthur-Orange •••. . .. ........ . ...
Brownsville-Harlingen-San Benito • •.•. .• ....... ...

Bryan-College Station . . ••• • ••.. ...... ..•.•.•. .

Corpus Christi . .. ............. . ... ... . . . . . ....
Corsicana 2• • •••••••• ••••••• •••••••••••.•• ••• •
Da llas ..••••••••..........•••••........••...
EI Paso ••..• • •. . .•. ......• .• •...•. •...• • . . •.
Fort Worth ••••••••••. .•..•• . • ..• . •.•.•. . .• ••
Ga lveston· Texas City ...... . . ............. . ....
Houston • . •. ••.•••••......... .• ............. .
Laredo •• • ••. ... . .......• ..... , .. ..•........

Lubbock . .. ... ....... .......................
McAlien-Pha rr-Edinb urg •••.. . ... . ..... • • ....•••
Midland • • •..••••• •••..••••.. . . .•.•.••.•••••
Od essa •. • . •................ .. ........•... · .

San Angelo • • • ••••.. , .....•.•••.••...•..•.•.•
San Antonio •••.. •• . ......... . ...... . ........
Sherman· Denison •• • ••• • ••••••• •••••••••••••••
Texarkana (Texas·Arka nsas) . ............ . ... . ..

Tyler •• • ••.•• •• ..••.•••••....•. •• •. · .• • · .••.
Waco • •.... . •........•........ . .. . .. .. ... . .

Wichila Falls ••• •... • .•..•.... ••••• • • .•.••••••
'\

9 months,

Standard metropolitan
statistical area

Shreveport •..... ..... ..... ...•.•.•. •....

T0101-29 cenle" •• ••.......•..•••• •. .•....••• • .•..•

Annual rote
of turnover

Septemb er 1972 from

September

-I

-9
-3
I
-16
4

$459,805,778

-3%

I

---$11 ,392,604

1. Deposits of Individuals, partnerships, and corporations and of states and political subdivisions
2. County basis

VALUE OF CONSTRUCTION CONTRACTS
(Million dollars)
January-September

BUILDING PERMITS

Area and type

FIVE SOUTH WESTERN
STATES' .. . ............ .

VALUATIO N {Dollar amount. in thousan ds}
Percent change

Sept. 1972
Sepl.
1972

Area

ARIZONA
Tucson . • . • ....

9 mos.
1972

UN ITED STATES .......... ..

from

NUMBER
September
1972

9 mos.
1972

- - - - - 9 months,
Aug. Sept.
1972 from
1972 1971
1971
63%

68%

599

6,661

$ IO,89B

$ 141,232

66
420

886
4,252

3,147
3,856

21,422
46, 174

216
-40

142
-87

76
129
535
IB7
103
349
1,400
20
509
411
74
2,894
80
190
66
84
94
78
1,371
30
45
17 1
65

637
1,544
5,019
1,896
948
3,59 1
15,224
298
5,24 1
3,B I 2
673
32,637
475
1,710
862
823
827
621
13,662
4 18
482
1,968
743

537
1,583
24,764
4,578
776
3,947
18,618
163
13,409
10,642
1,841
35,856
1,881
9,073
355
934
287
B46
19,584
980
530
3,034
577

13,897
23,758
193,122
23,033
10,837
49,556
310,6B7
2,444
135,421
67,605
10,005
482,606
12, 165
46,792
16,012
21,580
4,6 14
6,704
177,075
6,176
5,948
28,922
11,960

-80
-64
27
290
-50
-37
-25
-49
46
36
257
-35
199
III
-91
-6 1
-38
-IB
-24
147
43
-18
-79

-72
-75
-30
45
-58
-55
-50
109
-13
-33
1,327
8
304
211
9
79
-77
67
66
137
135
27
-80

105%

LOUISIANA
Monroe f West
Monroe • ....
Shreveport. • ..

TEXAS
Abilene ••.•• • •
Amarillo •.... .
Austin .. . . ••. .
Beaumont . • . • •
Brownsville . . ..

Corpus Christl • •
Da llas .••..••.
Denison .. .• ..•

EI Paso . ..... .
Fort Worth .••.
Ga lveston •. .•.
Houston ...... .
laredo . ... .. .

Lubbock .• • •..
Midland .••..•
Odessa •.. ... .

Port Arlhur •...
San Ange lo . ..
San Antonio ..
Sherman .. ...
Texarkana . ..

.
.
.
.

Waco ....... .
Wichita Falls • • .

To ta l_26 cities ••• 10;046

--$ 172,696 $ 1,869,747
lO5.9iO -

Residentia l building . ..... .
Nonresid ential building . .•.
Nonbuilding construction .•.•

_ 11 %-21%

Residential building ... ... .
Nonresidential building ... .
Nonbuilding con struction •. . .

September

August

1972

1972

July
1972

1972

1971r

960
526
266
169
8, 197
4,135
2,378
1,684

1,149
635
246
268
8,875
4,67 1
2,458
1,746

817
468
219
129
8,067
3,864
2,461
1,741

8,879
4,500
2,350
2,029
69,713
34,384
20,419
14,910

6,852
3,3BB
2,052
1,412
60,882
25,635
19,477
15,769

1. Arizona, Louisiana, New Mexico, Oklahoma, and Texas
r-Revlsed
NOTE: Details may not add to totals because of rounding.
SOURCE: F. W. Dodge Division , McGraw-Hil i I nformatlon Systems Company

42
'- 36
39

-4

41
51
29
-3
2B
2
46
-3 1
15

GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS

Eleventh Federal Reserve District
(Averages of dally figures. Million doll ars)

95
Date

Tolol

Reserve
city banks

1970, September.
1971, September.
1972, April ...• • .
May ..... .

10,658
11 ,571
12,407
12,268
12,320
12,468
12,420
12,619

4,885
5,31 1
5,676
5,652
5,6B9
5,708
5,608
5,722

I

91
245
- 14
-27
90
32
-12
48
-31

Jun e . .... .

July ...... .
August .. •. .

20%

TIME DEPOSITS

GROSS DEMAND DEPOSITS

-I

September.

Country
banks

Total

5,773
6,260
6,731
6,616
6,631
6,760
6,8 12
6,897

8,088
9,735
10,938
11,075
11,233
11,304
11,441
11,492

Re se rve
city banks

Country

3,162
3,769
4,180
4,262
4,323
4,365
4,473
4,468

4,926
5,966
6,758
6,813
6,9 10
6,939
6,968
7,024

banks

DAILY AVERAGE PRODUCTION OF CRUDE OIL

INDUSTRIAL PRODUCTION

(Thousand barrels)

(Seasonally adjusted Indexes, 1967
Percent change from
Area and type of index

Area

FOUR SOUTHWESTERN
STATES .. ... . . . ... . ... ..
Louisiana ••• .. •• . . ....•. •

New Mex ico .. .. . .. .. .. ..

Oklahoma . • . .• . •. ..• . ...
Texas ........ .... . . ... .

Gulf Coast • •. . ... . ....
We st Te xa s .... o

•

••••••

East Texas (prope r) •.. . .
Panhandle ••••..... .•. .
Rest of stote . ..... . . ...

UNITED STATES • ...........

September
1972

August
1972

September
1971r

August
1972

7,043.5
2,619.8
296.5
563.6
3,563.6
735.3
1,731.4
250.4
66.9
779.6
9,624.9

7,042.7
2,608.9
310.0
564.5
3,559.3
731.7
1,727.5
249.8
67.1
783.2
9,622.9

6,545.9
2,458.9
298.9
592.7
3,195.4
605.6
1,604.0
175.1
71.1
739.6
9,199.4

0.0
.4
-4.4
- .2
.1
.5
.2
.2
-.3
-.5
.0

September
1971

0

0

•

•

•

-

September
1972p

August
1972

July
1972

September
1971

133.7
135.9
143.9
130.2
120.8
161.9

131.5
133.7
142.2
127.5
120.6
153.1

130.6r
131.8r
142.3
124.2r
120.6r
158.5r

124.6
126.7
134.8
120.8
114.0
145.6

115.2
114.1
108.3
122.5
108.1
142.4

114.5
113.4
107.8
121.5
106.5
141.7

113.7
11 3.0
107.5r
121.0r
107.3r
142.4r

107.1
105.7
99.3
11 5.1
105.9
134.0

TEXAS
Total industrial production.
Manufacturing .••

7.6%
6.5
- .8
-4.9
11.5
21.4
7.9
43.0
-5.9
5.4
4.6%

= 100)

•

•••••••••••••

Durable • • • .. • •..••..•..••. • •
Nondurable • . . ••• • . • .• .. • .. . •
Mining • . • .............. .• .... .
Utilities ••... • •.. • . • . •• .. . . • . .
0

UNITED STATES
Total industrial production .. .. ..
Manufacturing ..... . ..... . ....•

Durable .. ....... . ....... . ...
Nandurab/o • •• • ••• •• •• ••• ••••
Mining • .. .•..... . ...... . ..... .
Utilities •...•.....•.• o • • • • • • • • •

p-Prellmlnary
r-Revised
SOURCES: Board 01 Governors 01 the Federal Reserve System
Federa l Reserve Bank of Dallas

r-Revls ed
SOURCES : American Petroleum Institute
U.S. Bureau 01 Mines
Federal Reserve Bank of Dallas

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT

Five Southwestern States 1

CROP PRODUCTION

(Seasonally adjusted)

(Thousand bushels)

Item

Civilian 10 bor force • •• ......
Total employment ••. . . . . • ...
Totol une mployment •........

Une mployment rate • •...... .
Total nonagricultural wag e
and salary employment •..•
Manufacturing ••••.. • • • • •
Durable .• • ............

Nondurable .•••.•.• • •.
Nonmanufacturing .... . . • •
Mining •.•. . .......... .
Construction ••.• • •.••• •
Transportation and
public utilities .•......
Trad e ........
Finance . . . '" . . .......
Service .... ...... . ....
Governm ent •• . .. . .. . . .
0

••

•

••

•

•

Aug.
1972

September
1972p

August

1972

1971r

8,544.0
8,172 .3
371.7
4.4%

8,500.4
8,122.9
377.5
4.4%

8,292 .8
7,892.2
400.6
4.8%

6,671.3
1,160.2
631.6
528.6
5,511.1
226.7
441.6

6,617.4
1,149.7
624.5
525.2
5,467.7
226.6
432.8

6,410.6
1,125.8
608.8
517.0
5,284.8
226.0
405.6

.6
.8
.0
2.0

4.1
3.1
3.7
2.2
4.3
.3
8.9

457.1
1,581.5
356.7
1,080.4
1,367.1

454.9
1,575.5
354.2
1,077.0
1,346.7

449.0
1,516.8
339.1
1,035.8
1,312.6

.5
.4
.7
.3
1.5

1.8
4.3
5.2
4.3
4.2

Septemb~r

0.5% 3.0%
.6
3.5
- 1.5 -7.2
-.4
' .0

1. Arizona, Louisiana, New Mexico, Oklahoma, and Texas
2. Actual change
p-Prellmlnary
r-Revlsed
NOTE : Details may not add to totals because of rounding.
SOURCES: State employment agencies
Federal Reserve Bank 01 Dallas (seasonal adjustment)

All manufacturing industries
showed increases over a year before, and most showed increases
over a month before. Production
of both durable and nondurable
goods was higher than in August.
The biggest month-to-month advance was in petroleum refining,
up 6.9 percent. Production of furniture and fixtures was up 3.1 percent, and output of primary metals
was up 2.1 percent. Other increases
in manufacturing were more moderate. There were few declines,
however, and they were small. The

Sept.
1971

.8
.9
1.1

-

FIVE SOUTHWESTERN STATE5~

TEXAS

Percent change

Sept. 1972 from

Thousands of persons

1972,

1972,

estimated

estimated

Crop

Oct. 1

1971

1970

Oct.l

1971

1970

Cotton 2 • •• • •••••
Corn ......•... .
Winter wheat. ...

3,931
35,000
44,000
9,720
1,980
630
21,996
34 1,600
165
4,588
434,720
3,529
938
65,000
5,670

2,614
43,056
31,416
5,994
1,320
378
22,932
303,004
70
4,114
366,795
3,299
788
24,000
2,781

3,209r
33,232r
54,408
29,032
4,224
566
21,0 15r
329,6 16
1,125
4,037
429,930
4,593
1,040
38,000
4,424

5,743
45,469
151,998
16,065
19,036
1,790
41,870
400,395
165
10,698
679,220
6,845
4,263
87,000
47,411

4,053
53,925
117,715
11,574
23,138
1,158
42,768
370,197
70
10,220
602,315
6,810
3,763
75,200
43,743

4,556r
44,395r
169,069r
38,304
33,954
1,502
41,412r
386,051
1,125
9,811
640,196
8,096 r
4,820 r
69,700
45,413

Oats .... . ......
8arley • •........
Rye . •.. . . . . .•..
Rice ! •..........
Sorghum grain . ..
flaxseed . . . . ..•.

Hay<. ....... . .•
Peanuts5 •••• ••• •
Irish potatoes ' ....

~:c~e~s~~t~~~~~s: :

Soybeans ..... . .

1. Arizona, Louisiana, New Mexico, Oklahoma, and Texas
2. Thous a nd bales
3. Thousand hundredweight
4. Thousand tons
5. Thousand pounds
r-Revlsed
SOURCE: U.S. Department of Agricu lture

largest drop was in the production
of paper and allied products, down
1.0 percent.
Mining continued at the pace set
in August. Slight increases in the
production of crude oil and natural
gas were largely offset by a slight
decline in the production of natural
gas liquids.
Utilities, with a 5.7-percent increase over August, reached a
record level in September. This
advance pushed utility distribution 11.2 percent higher than in
September last year.

-