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This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 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. -