Full text of Pieces of Eight : Business : An Eighth District Perspective, Spring 1984

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Business
AN EIGHTH DISTRICT PERSPECTIVE
Spring 1984

District Followed Nation’s Economic
Recovery in 1983
Last year, the nation’s economy rebounded from the
1981-82 recession. After declining in 1982, real GNP rose
6.2 percent for the year ending in the fourth quarter of
1983, while industrial production and retail sales rose
14.9 and 10.8 percent, respectively. The latest fourth
quarter data indicate that personal income is rising at a
rate of 11.0 percent compared with 4.7 percent for all of
1982. Following a decline in 1982, payroll employment ex­
panded at a pace of 2.9 percent in 1983.
Economic activity in the Eighth Federal Reserve
^strict followed the national trend and showed sub­
stantial improvement during 1983. The strength of the
recovery across District states was somewhat disparate,
however, with some areas showing substantially more im­
provement than others. The indexes of general business,
which declined in all the states in 1982, rose at rates rang­
ing from 11.0 percent for Arkansas to 4.4 percent for Ten­
nessee. According to the latest third quarter data for the
District, personal income is rising at a rate of 7.2 percent,
slightly higher than the rate at the national level for the
same period, and substantially above the District’s per­
sonal income growth rate in 1982.

Employment
The general expansion in economic activity during
1983 had important consequences for District employ­
ment. Growth in payroll employment ranged from a high
of 4.4 percent in Arkansas to a low of 1.1 percent in
Missouri. Payroll employment had declined in all the
states during 1982 at rates ranging from
—4.1 percent in Tennessee to —2.3 percent
in Missouri.
Despite the expansion in employment, the
District’s average unemployment rate for
1983 remained at its 1982 level. Tennessee
had a substantial reduction in its rate during
^83, while slight increases occurred in Kencky and Missouri. Arkansas’ unemploy­
ment rate was unchanged.




These two factors — growth in employment and a
stable unemployment rate—suggest that the labor force
in the District has expanded at a rate commensurate with
employment growth.

Retail Sales
Pushed along by a banner Christmas season, which
some merchants described as “ tremendous” and “ fan­
tastic,” retail sales grew substantially in most District
states during 1983. Most merchandise sold well during
the Christmas buying season and the willingness of shop­
pers to purchase “ big ticket” and high-quality items was
particularly impressive. The one state that did not follow
this general pattern was Missouri in which 1983 retail
sales growth fell well below the previous year’s growth
rate.

Construction
Construction activity throughout the District was
relatively brisk last year. The average monthly value of
construction contracts during 1983 exceeded the levels
reached in 1982 by considerable margins. The 1983
values ran ahead of previous year levels by as much as 55
percent in western Tennessee and 29 percent in eastern
Missouri, with the District as a whole having a 37 percent
gain.

The Employment Picture in
St. Louis

While the distribution of St. Louis employment does
not change markedly from year to year,
some fairly substantial changes have oc­
curred over the longer run. Chart 1
presents the 1982 percentage distribution
of employment by industrial sector in the
S t. L o u is S ta n d a rd M e tr o p o lita n
THE
FEDERAL
Statistical Area (SMSA). For comparison,
RESERM
a
similar distribution is given for the
RANK of
United States. The chart suggests that the
ST. IXHTS
distributions of employment in St. Louis
and in the United States were quite

SPRING 1984

FEDERAL RESERVE BANK OF ST. LOUIS

similar. In both cases, nonmanufacturing employment
amounted to about 80 percent of total nonagricultural
employment, and manufacturing employment accounted
for about 20 percent. Almost 50 percent of the St. Louis
and U.S. work forces were employed in wholesale/retail
trade and services.
To give a longer-run view, chart 2 presents the 1954
percentage distribution of employment by sector for St.
Louis and the nation. One of the most significant changes
since 1954 has been the reduction in the size of the manu­
facturing sector relative to nonmanufacturing for both
St. Louis and the nation.
In the case of St. Louis, the reduction in manufacturing
employment was more substantial, as it declined from 38

percent of total nonagricultural employment in 1954 > about 22 percent in 1982. A t the national level, manui(
)
turing employment declined from 33 percent of the tot^r
in 1954 to 21 percent in 1982. This reduced concentration
of employment in manufacturing has been almost exactly
offset by increases in service and government employ­
ment.
An exception to the general decline in St. Louis manu­
facturing employment was employment in transportation
equipment manufacturing. This grew from 3.9 percent of
nonagricultural employment in 1954 to 4.6 percent in
1982. A t the national level, however, it fell from 3.7 per­
cent in 1954 to 2.0 percent in 1982.

C h a rt 1
Percentage Distribution
of E m p l o y m e n t in 1982:
St. Louis a n d U.S.LL

—G.J. Santoni

Manufacturing

Nonmanufacturing
U.S.: 79.07,

Mining

S o u r c e : U .S

U.S.: 21.0%

St. Louis: 77.87,

Construction Transportation, Wholesale,
Utilities
Retail Trade

Finance,
Insurance,
Real Estate

Services

Government

St. Louis: 22.27,
Percent
24

Transportation
Equipment

Other

D e p a r t m e n t of L a b o r

[]_ A s a p e r c e n t of Total N o n a g r i c u l t u r a l E mp lo y me n t.

Chart 2
P e r c e n t a g e Di st r i but i on
of E m p l o y m e n t in 1954:
St. Louis a n d U .S .ll


2


Nonm anufacturing
U.S.: 66.77,

Mining

Construction Transportation. Wholesale,
Utilities
Retail trade

ce: U.S. D e p a r t m e n t of L a b o r
p e r c e n t of Tot al N o n a g r i c u l t u r a I E m p l o y m e n t .

Manufacturing

St. Louis: 62.07,

Finance,
Insurance,
Real Estate

U.S.: 33.37,

Services

Government

St. Louis: 38.07,
Percent
36

Transportation
Equipment

Other

FEDERAL RESERVE BANK OF ST. LOUIS

SPRING 1984

EIGHTH DISTRICT BUSINESS DATA

C u rre n t P e rio d

Growth Rates
1983

Nov-Jan

G eneral B u sin e ss In d e x e s 1
A rkansas
K e n tu cky
M is s o u ri
T ennessee

13.6%
12.2
6.6
7.7

R etail Sales

11.0%
4.9
8.0
4.4

-2 .2 %
- 1.8
-1 .6
-0 .9

10.5%
11.2
9.0
9.9
12.8

5.3%
9.3
2.0
12.7
4.0

6.6%
7.2
8.4
6.0
7.5
7.4

4.7%
3.9
3.2
3.0
3.7
5.1

2.9%
2.0
4.4
2.2
1.6
2.5
1.1
1.1
1.2
2.5
0.3

-2 .4 %
-3 .0
-2 .5
- 1.4
-3 .1
-4 .2
-4 .6
-2 .3
-2 .9
-4 .1
-3 .5

4.3%
5.1
4.9
7.7
6.4
5.0
4.6
4.1
1.9

5.3%
6.4
6.6
5.2
3.1
6.6
6.5
6.3
3.9

O ct-D ec

U nited S tates
A rk a n s a s 2
K e n tu c k y 2
M is s o u ri
T ennessee

11.8%
35.4
23.1
10.5
-2 .3
3rd q u a rte r ’83

P ersonal Incom e

7.0%
7.3
7.4
4.7
7.5
9.0

U nited S tates
D is tric t
A rkansas
K e n tu cky
M is s o u ri
T ennessee
P ayroll E m p lo ym e n t

O ct-D ec

U nited S tates
D is tric t
A rkansas
L ittle Rock
K e n tu cky
E vansville, IN
L o u is v ille
M is s o u ri
St. Louis
T ennessee
M e m p h is

4.9%
4.7
10.1
4.9
3.4
5.2
-1 .9
2.7
3.0
5.6
3.6

A verage H o u rly E arn in gs-M fg.

O ct-D ec

U nited S tates
A rka n sa s
L ittle R ock
K e n tu c k y
L o u is v ille
M is s o u ri
St. L ouis
T ennessee
M em p h is

6.1%
2.1
-2 .6
13.8
9.8
5.5
5.4
2.9
3.2

Employment
1983
Key In d u s trie s
F a b rica te d M etal P ro d u c ts
E le c tric a l and E le c tro n ic E q u ip m e n t
N o n e le c tric a l M a ch in e ry
T ra n s p o rta tio n E q u ip m e n t
Food and K indred P ro d u c ts
T e x tile and A pparel
P rin tin g and P u b lis h in g
C h e m ic a ls and A llie d P ro d u c ts
C o n s tru c tio n




1982

2.7%
10.5
10.0
14.9
- 1.1
3.4
1.6
-0 .3
2.5

Prices
1982

-8 .0 %
- 1 1 .2
- 1 8 .2
-4 .5 '
0.1
-6 .8
-2 .0
-6 .6
-6 .5

1983

1982

-0 .6 %
2.8
1.6
0.1
2.2
0.7
4.1
1.0
3.3

0.8%
3.2
4.1
4.4
2.3
-0 .1
8.4
0.7
1.2

3

EIGHTH DISTRICT BUSINESS DATA
Current
Period
Unemployment Rate

Oct-Dec

U n ite d S ta te s
D is tric t
A rka n sa s
L ittle R ock
K e n tu c k y
E vansville, IN
L o u is v ille
M is s o u ri
St. L o u is
T ennessee
M e m p h is

8.5%
10.1
9.9
7.8
11.1
9.9
10.2
9.5
10.2
10.7
8.5

Previous
3 Months

Average
1983

Average
1982

9.6%
10.4
9.6
7.6
11.0
10.2
10.4
9.6
10.4
11.1
9.2

9.7%
10.4
9.7
7.6
10.7
9.8
11.7
9.3
9.9
11.8
9.6

9.4%
10.2
9.8
7.9
11.3
9.6
9.9
9.2
10.0
10.3
8.8

Construction Contracts*1
3
2
(m illio n s o f d o lla rs )
D is tric t
A rka n sa s
K e n tu c k y
E astern M is s o u ri
W e ste rn T enn e sse e

Housing Permits
L ittle R ock
L o u is v ille
M e m p h is
S t. L ouis

Nov-Jan
$384.0
91.6
145.1
99.8
47.5

$578.5
132.1
189.8
176.2
80.4

$479.5
104.5
170.1
137.4
67.4

$351.0
79.6
121.8
106.3
43.4

305
427
420
1000

276
310
446
955

144
158
221
531

Oct-Dec
246
246
531
1044

NOTE: With the exception of construction contracts and employment and prices in key industries, all data are seasonally adjusted.
Data are presented as three-month averages to minimize distortions due to the large variability of monthly data. The current
period growth rate is a comparison of the average of the current three months to the average of the previous three months.
The year-to-date growth rate is from the average of the three months ended in December of 1982. All growth rates are com­
pounded annual rates of change.
1 Sources: Arkansas and Missouri from Southwestern Bell, Kentucky and Tennessee from South Central Bell.
2 Sources: Arkansas from Southwestern Bell and Kentucky from Kentucky Revenue Department.
5 Source: F.W. Dodge, Construction Potentials, McGraw-Hill Information Systems Company, proprietary data provided by
special permission.