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APRIL 1951 TH E BUSINESS REVIEW federal reserve bank of PHILADELPHIA SPASMODIC SPENDING People are unpredictable. Last summer when the war broke out they rushed to the stores and bought heavily but selectively. The buying boom faded out almost as fast as it flared up but it quickened the forces of inflation. Last winter another and a bigger wave of buying swept through the stores. Fearful of shortages and higher prices and higher taxes, people laid up stocks of all kinds of merchandise. Again the tide turned as spending receded. With expanding defense production and rising personal income, there may be more flurries of spasmodic spending. CURRENT TRENDS Business trends in the Third District were mixed during February. Manufacturing production was stable, department store sales declined, and bank loans expanded. SPASMODIC SPENDING People spend spasmodically. Sometimes they stampede the stores and buy without restraint; then without warning or apparent reason, they suddenly get “counter shy.” Rising prices sometimes scare them away from the stores, and at other times the posting of higher prices precipitates a wave of buying. People sometimes spend freely when they lack funds, then again they may lay off spending when they are flush with money. They respond to advertisements, the weather, the seasons, national and international develop ments, but not always as expected or when expected. The reason people act the way they do is because they are peo ple. They are unpredictable. The erratic behavior of con sumer spending is demonstrated by recent developments still fresh in our memory. to 330, as you see in the accompanying chart. That was typical of what happened at most stores, and it was not confined to the big metropolitan stores of Philadelphia. People swarmed into the stores in all parts of the districtdown in the broiler-land of Delaware, in the vacation-land along the New Jersey shore, up in the oil- and gas-land of Bradford and Kane, out in the hill country of Johnstown and Altoona, and in the hard-coal country of Wilkes-Barre and Scranton. There was no panic and there were no cas ualties, but nevertheless it was a big push and a big sur prise to the merchants. DEPARTMENT STORE SALES AND INVENTORIES Third Federal Reserve District IN THE STORES LAST SUMMER Shopping is usually dull in the summer. It is either too hot or too humid or both; if your clothing does not stick to your skin, it sticks to your furniture. True enough, many of the stores are air-conditioned to make summer time shopping more delightful, but there is still the dis comfort of travel to and from the stores. Moreover, many of the customers are out of town enjoying their vacations m the mountains or at the seashore. As a consequence, summertime trade is likely to languish and merchants must be satisfied if they can hold their own. Last summer was different. After an inauspicious be ginning, something happened in the closing days of June which sent people flocking to the stores. It was the outbreak of fighting in Korea. Mindful of what happened during World War II—shelves without shirts, nylon queues, the cigarette and chocolate famines, the inability to get motor cars and tires—people took quick action. Fearful that the fighting in Korea might flare up into another world war— a possibility broadly hinted in the press-people rushed to the stores and laid siege to the merchandise. At department stores in the Philadelphia Federal Re serve District, dollar volume of sales had been hovering for some months around the 275 notch on a scale cali brated to pre-war’s 1935-1939 at 100. Suddenly it jumped INDEX SEASONALLY ADJUSTED INDEX l935—39=100 SALES INVENTORIES Spending was Selective The spending, though impulsive, was not indiscriminate. It was selective. This is revealed by the sales slips turned in by the departmental sales people; some were harried and hurried but others just stood by their counters. Items like domestics, consisting of muslins and sheetings, were top favorites, as revealed by sales soaring in excess of 150 per cent above year-ago records. Linen closets were heavily restocked. There was a great demand for major house hold appliances such as food freezers, refrigerators, wash ing machines, sewing machines—in fact, all of the auto Page 1 THE BUSINESS REVIEW matic equipment required in the \vell-run household in our times. And of course right up with the leaders was the current domestic darling—television. Though furniture and bedding did not win, place or show in the race, never theless departments handling these lines reported sales a good 50 per cent above the performance of a year ago. In their eagerness to play it safe, people bought not only the big haul-away items but also smaller carry-away mer chandise. They laid in generous supplies of nylons, sugar, coffee, certain types of canned goods, and stationery, but they forgot umbrellas. A major line that was completely overlooked was women’s and misses’ ready-to-wear ap parel, sales of which not only failed to gain but actually lost. The buying was directed especially at those things which people had learned from experience were likely to be early casualties in a major war. The consumer drive on hard goods was also reflected in the sales at furniture stores and in the purchases of new passenger cars. In July, purchases at furniture stores throughout this district rose one-third above those of a year ago, and demand remained strong throughout the NEW PASSENGER CAR REGISTRATIONS Pennsylvania INDEX INDEX 1935-39-100 months. The magnitude and the duration of spending for new cars is shown in the chart. What happened at the stores in this district happened all over the country. From a seasonally adjusted annual rate of $186 billion in the second quarter of 1950, consumer expenditures rose to an annual rate of $199 billion in the third quarter. The $13 billion rise is the largest quarterly increase on record- It was a period of vigorous stocking up, but the purpose was partially defeated by rising prices. According to estimates of the Department of Commerce, about one-third of the increased dollar expenditures was due to higher prices and two-thirds were solid substance. As might be supposed, the mid-summer wave of spending shot up faster than consumer income. Those who ran short of ready cash dipped into their capital, and many who would not or could not dip into capital, borrowed. Postal savings as well as time deposits at commercial banks and mutual savings banks were drawn down. Holders of E bonds lined up at redemption windows; the bonds had been bought and tucked away for a “rainy day.” This was it. In July, withdrawals at savings and loan associa tions exceeded new savings deposits. At department stores throughout the district, the financial strain of over-buying by the customers was written on the ledgers. Compared with the preceding summer, cash sales were up moderately, charge account sales were up considerably, and instalment sales, immoderately. The nation-wide consumer instalment debt rose higher, ever higher. Outstandings had grown from $10.9 billion at the end of 1949 to $13.3 billion in September, 1950. Half of the $2.4 billion increase occurred in that spendful third quarter. In mid-September, the Federal Reserve au thorities applied the credit brake, marked Regulation W, which required larger down payments on instalment pur chases and shortened the period for paying up on balances. In mid-October, the brake was pulled up another notch. Some dealers did not like it; neither did the Federal Re serve Board like the way credit was snowballing. Consumer spending and the business spending it generated caused the greatest short-run expansion of bank loans in all history. 1950 third quarter. Automobile dealers also enjoyed an unusu ally good summer season. Life without a car in this country is unthinkable. New passenger car registrations in Penn sylvania reached a peak as early as June and sales were maintained close to this volume during the ensuing two Page 2 Consequences of the Spending Spree On the heels of an expanding rate of business activity in the first half of the year, the mid-year upsurge in consumer spending galvanized the economy into a record-breaking third quarter of vigorous activity. In response to the apparently insatiable consumer demands that quickly THE BUSINESS REVIEW depleted retailers’ shelves, merchants rushed to their sup pliers with heavy replacement orders. Masses of merchan dise moved from the warehouses of wholesalers into the retail stores. The rising curve of department store inven tories shows how speedily and effectively this was accom plished. Pressure on the wholesalers was relayed right back to the manufacturers, where new orders piled up. When new orders come in faster than outgoing shipments, the wheels of industry must turn faster, and so they did last summer when unfilled orders on the books of manu facturing concerns rose to new peaks. It was not long before manufacturing industries of Penn sylvania felt the full impact of the greatly enlarged con sumer spending. Practically all available facilities were called into action, thousands of additional workers were employed and hours of work were stepped up. At numerous plants throughout the district, working hours crossed over into the time-and-half territory. That spelled high costs for the producers and it spilled more money into pay enve lopes. Payroll disbursements rose sharply into higher levels, as shown in the following chart. PRODUCTION-WORKER PAYROLLS Pennsylvania Manufacturing Industries INDEX 1939- 100 INDEX 350 300 250 200 I '949 I I I ■ I 1950 I I I I 1951 The expansionary effect of consumer buying was wide spread and affected all sectors of the national economy. This was reflected in a substantial increase in both the physical volume of production and personal income pay ments as well as in higher prices. During the third quar ter, industrial production, as measured by the Federal Re serve Board’s index of physical output, rose from a shade below 200 to 211 per cent of the 1935-1939 base. This was accompanied by an increase of more than $lll/2 billion m the annual rate of income payments to individuals. With larger incomes at their disposal, people were naturally inclined to spend more and save less. Net savings expressed as a percentage of disposable income declined sharply during the third quarter. The rash of consumer spending had the inevitable effect of setting off sharper increases in prices both in wholesale and retail markets. As usual, the greatest price increases occurred in wholesale markets where all major classes of commodities turned up sharply. Some, like rubber, wool, and tin, developed high fever. Consumer prices, which had inched up only moderately under the influence of a mild expansion of business activity during the first six months of the year, rose at a considerably faster rate during the third quarter. Among the major classes of items, the larg est gains were registered in prices of housefurnishings, foods, and apparel, in that order. Substantial, though some what smaller, increases also occurred in rents and miscel laneous items entering into the cost of living. “Scare Spending” Fades Out “Scare spending” faded out almost as fast as it flared up. The rush to the stores and the frantic buying reached its peak in July, slackened slightly in August, and declined still more in September. By the end of October, trade in department stores of the Philadelphia district was down to pre-Korean levels. People had over-bought and had over-extended themselves, with the result that the inevitable reaction set in. Moreover, they had laid in ample stocks of the things they feared would disappear from the markets. By Novem ber, total retail sales throughout the country had declined somewhat below the level reached in June, before the big mid-summer increase, and were lower relative to personal incomes than at any time since the early part of 1947. But the period of quiescence was destined to be short. The news from Korea was disquieting in the closing days of November. Hoards of Chinese Communists had swept down below the 38th parallel and threatened to push the forces of the United Nations off the peninsula. Hope for a quick end of the war had to be abandoned and prep arations for defense had to be hastened. THE BUYING BULGE IN WINTER In December, people again swarmed into the stores to set off another vigorous upsurge of buying. It was more than the usual Christmas buying because it continued well be yond the holiday season. At Third District department Page 3 THE BUSINESS REVIEW stores the index of sales jumped from 273 in November to 307 in December for a monthly gain of 13 per cent. Convincing evidence that the buying was motivated by something more than the holiday spirit is the fact that December 1950 sales soared 11 per cent above those of December of the preceding year. January is usually a month when people behind retail counters have a chance to catch their breath after the mad Christmas scramble, but not so last January when buying was even more vigorous than in December. As shown in the chart, department store sales marched right up to a new peak of 342 for a monthly gain of 11 per cent and a total dollar volume of business 28 per cent in excess of January 1950. It was like that throughout the whole district; in fact, stores in some of the outlying areas of the district reported even larger increases in sales than the Philadelphia stores. In contrast with Philadelphia, where sales just about attained three times the pre-war dol lar volume, trade rose well above the 300 per cent level in Lancaster, Reading, Wilkes-Barre, and York; and in Trenton, sales soared to four and three quarter times their pre-war average. The buying wave at the turn of the year was not alto gether like that of mid-summer preceding. It was more orderly; it was larger in dollar expenditures; it was sup ported by greater consumer income; and it embraced a wider range of goods purchased. There was somewhat less fear of imminent shortages, but no less fear of ultimate shortages. People had tested the markets right after the fighting had broken out and they learned that goods continued to be available. With few exceptions, the anticipated short ages did not materialize; replacements appeared almost as fast as people bought. However, times were changing. The Korean war had turned out to be more than a push over and trouble spots were threatening to develop in other regions. Meanwhile, a greatly enlarged defense program was taking shape. Inductions into the armed forces were stepped up, the National Production Authority author ized scheduled cutbacks in the use of strategic materials such as rubber and non-ferrous metals for civilian pur poses, Government stockpiling was gaining momentum, war contracts were being let in larger volume, and tax schedules were jacked up higher. As defense efforts were tightening their grip on the economy, civilians made a re appraisal of their real or fancied needs and set out to buy while the buying was good. Page 4 The sharp revival of consumer buying at year-end was motivated, in part, by steadily advancing prices. Through out the second half of the year, almost daily increases occurred in the prices of foods, apparel, housing, housefurnishings, fuel, and other items entering into the con sumer’s cost of living. By the end of the year the index of all items had attained a new record of 180 per cent of the pre-war base, and housewives were convinced that price increases were greater than reported in the official price indexes. Consumers generally may not have realized that they themselves were largely responsible for rising prices, but they were conscious of a relentless increase in the cost of living. So they went out to buy yet more to beat the still higher prices to come. Another factor which contributed to the winter boom of consumer buying was the increased flow of income enjoyed by consumers. Expanding business activity, generated in large part by the mid-summer wave of consumer spending, brought about a rising flow of income which enabled people to spend more freely. From $217 billion in June, personal income rose to a level of $241 billion in Decem ber. Higher taxes took away some of the increase but dis posable income was rising, so that people had more money to spend. The character of the year-end wave of buying was dif ferent from the summer buying bulge. Unlike the first, which was selective in character, people bought practically all kinds of goods available. This is revealed by the records of departmental sales of department stores in this district. In one department after another, without exception, sales in January 1951 were higher, and in most instances by large margins, than sales for the same month of the pre ceding year. Sales of housefurnishings were in the lead, where dollar volume ran 53 per cent in excess of yearago performances. Within this group television sales more than doubled, major household appliances were up 83 per cent, general housewares, 62 per cent, and floor cov erings were up almost 50 per cent. Large increases in sales were also reported in the other major departments piece goods and household textiles, small wares, women s and misses’ ready-to-wear apparel, feminine accessories, men’s and boys’ wear. The prosperity was store-wide and storedeep; basement stores shared in the gains. From counter to counter, the gains were all but universal. Handkerchiefs and umbrellas were about the only stray items overlooked. Furniture dealers and automobile dealers also shared in the revival of consumer buying. Furniture stores in the THE BUSINESS REVIEW Third District reported dollar volume of January sales up almost one-third over year-ago business volume. Their stocks on hand were adequate—in fact, more than ade quate. Local sales of automobiles were also running higher than a year ago, as shown by larger registration of new cars in Pennsylvania. Again, the spending jamboree was short-lived. No sooner had the merchants geared their orders and inventories up to the new levels of spending, when the spending showed signs of abatement. Final returns from the February re ports of the country’s department stores showed a drop to the extent of 10 per cent. March, with its early Easter, offered some hope for maintenance of dollar volume, but merchants were disappointed. Except for Easter’s feminine finery, consumer spending lacked the vigor of January. Though final returns for March are not yet at hand, pre liminary reports, with allowance for the usual Easter ex tras, showed evidences of weakness. Late favorites, like television, suffered price mark-downs. Whatever the rea son, people had “shot the works,” and spending was again on the decline. PROSPECTIVE CONSUMER SPENDING Consumer spending is a vital factor affecting the general level of business activity. What the consumer chooses to do is the most important single element influencing the business outlook. The level of consumer spending ordi nary keeps company with the ebb and flow of personal income payments. That is generally borne out by studies of past relationships between income and expenditures; but precisely how much people will spend when their in come increases and specifically what they will spend their money for in the short-run, through which we all live, are difficult to determine. This is especially true in periods like the present, characterized by domestic and interna tional uncertainties. Consumer incomes for some months ahead are expected to rise above current levels owing largely to the scope of the greatly enlarged defense program which is j ust begin ning to generate substantial cash outlays. In fact, defense expenditures may be considerably larger than the recently announced budget estimates, unless we are more successful than we have been thus far in holding prices on the leash. Despite credit curbs and higher personal income taxes, greater consumer spending is almost inevitable as a by product of generally increased business activity growing out of sharply increased expenditures for military purposes. What people will spend their money for naturally depends upon what will be available. In recent months, people have had virtually unlimited choice, but it is generally believed that the days of free and unlimited choice are numbered. This is based upon, first, the fact that at pres ent approximately 10 per cent of our total national output is going into defense and second, the belief that defense production will steadily rise so that it will absorb 15 to 18 per cent of the total output by the end of the year. On the basis of this projection, it has been estimated that produc tion of passenger cars and other metal-using durable goods may have to be cut considerably below the record-breaking levels of the second half of last year. If that were to happen, consumer spending might very well revert to the war-time pattern in which a substantially larger proportion of spend ing was directed into non-durable channels. How people shift their spending habits is shown by wartime changes in sales at stores handling durable and nondurable goods. Ordinarily about 30 cents of every dollar spent goes into the cash registers at durable goods stores and 70 cents goes to the nondurable goods stores. During the height of World War II, when manufacturers of automobiles and household appliances were engaged in the production of war materials, the durable goods stores got only 15 cents of the consumers’ expenditures in the stores, and nondurable goods stores took in 85 cents. Peo ple had to have food, apparel, and the other indispensable necessities of life, but they had to get along as best they could with their tarnished motor cars, recapped tires, and threadbare floor coverings. After the war, replace ments of hard-worn consumer durables were made as rapidly as producers reconverted to peacetime operations. By 1948, normal relationships between spending for dura bles and nondurables had been reestablished. More recent trends in spending have favored the durable goods stores. In 1950, these stores got 35 cents of the consumers dollar spent in all stores. The most powerful factor operating to raise their proportion was the expand ing sales volume of automobile dealers, and there are still a large number of over-age cars on the roads. Heavy sales in other durable groups have also served to raise their share of the retail dollar. In fact, it may be erroneous to assume that future patterns of spending will conform to the so-called “normal” of pre-war days. Pre-Pearl Harbor concepts of normal may not apply to a post-Korean age. Merchants must ever be on guard for new patterns that may develop without warning. In addition to the hazards Page 5 THE BUSINESS REVIEW of changing consumer demands, the merchant now faces new risks of uncertainty with respect to availability of goods owing to the acceleration of defense production. However, there is no certainty that shortages are inevit able, and if they do come they may not be as harsh as imagined. Fear has a way of breeding fear. Productivity and productive capacity have been enlarged greatly in the post-war years, and the construction of huge additional facilities are under way. We still have some slack in the labor force and yet more slack in working time. We are prone to apply the scare word “critical ’ to any material that must be shared with the military, but in many in stances we forget there are good substitutes for civilian use. We like our motor cars decked out with white-walled tires and bespangled with chrome grille work, but they run just as well with less adornment. Civilians pulled through a major war without serious inconvenience when almost half the country’s output went to the armed forces. We should survive a 20 per cent-er with considerably more grace. Be that as it may, merchants are not immune from spas modic spending by their customers. No one can tell when people may again decide to go on a buying jag. It all de pends upon such unpredictable developments as the course of prices, the heavy hand of the tax collector, rumors of shortages, war scares, peace overtures, credit curbs, the weather, and the neighbors. One thing is sure, whatever consumers do, regardless of the reasons for their actions, they exert a powerful influence on the course of business. Additional copies of this issue are available upon request. Page 6 THE BUSINESS REVIEW CURRENT TRENDS The movement, of the various indicators of commercial and financial activity in the Third Federal Reserve District were mixed during February. However, a slight upward over-all trend was discernible. Production in Pennsylvania manufacturing plants was unchanged in February, but employment rose, with both durables and nondurab’es sharing in the gam. Although the number of workers increased, total payrolls remained the same due to nar th h “d ^ faiIure’ the - a year, of hourly earnings to rise. In year-ago com February ^ ^ T 77 **“ °f Strength‘ C°ntraCt awards failed *b°w any change in ary. Increases in residential, and public works and utilities awards were offset by declines in nonresidential contracts where er In Ph^elphia^advanced again in February. The greatest rise occurred in the cost of miscellaneous items hemsthanTh0 ^ ” tr8nSit ^ L°Cal families ^ per cent more for cost-of-H^g ems than they were a year ago and consumer prices for the nation were up 11 per cent from 1950 °i sales dr?/"16 COnsumer ^uyinS was apparent in February. Although above a year earlier, adjusted department store slackenednlce^Mv At"! ? 7 “• JanU&ly-Apparel made ^stantial year-ago gains but sales of housefurnishings ened noticeably. At the same time business was declining, inventories were rising. Consequently, the ratio of stocks to sales at the end of the month was greater than that of last year. 4 X ne ratio ox stocks to *'77 firSt.12 .W. eks °f 1951’ khuSineSS l03nS 3t reportinS me,?lber banks in the Third District rose 14 per cent, as come T com,, „d f 1 l lir dUn"gJthe corresPondlng period of 1950. Real“ ■ Whol°'th” incr““ °< showed little per cent ^i0i y“r' F°' COUntry estate and consumer loans >h»» 7 change A s h i tfa” T ? j" iroi tTfo T “ demand deP°SitS ,nati°nalIy duHng FebrU3^ refleCted P™aF+ a -sonal transfer of funds' apply was stm a piZoj m po”.™ y»“" ! ‘ ? h° ““T Third Federal Reserve District Per cent change Feb. 1951 from Feb. 1951 from mo. ago OUTPUT Manufacturing production. . Construction contracts. . Coal mining................ BANKING (All member banks) Deposits....................... Loans............................. mo. ago year ago 2 mos. 1951 from year ago 1 MO\ + 25 Stocks Per cent change Feb.1951 from Per cent change Feb. 1951 from Per cent change Feb.1951 from Per cent change Feb. 1951 from mo. ago year ago mo. ago year ago mo. ago mo. ago mo. ago 0 + 19 -1 + 40 +i + 34 -4 + 63 Altoona................... 0 + 7 0 Johnstown............... 0 + 21 -2 year ago year ago year ago +26 + 23 + 25 + 55 Lancaster...................... + 5 + 26 +1 + 7 +3 +27 -9 + 17 +16 + 18 - 7 + 10 +1 + 12 0 + 25 -7 +11 + 17 + 34 -16 + 23 + 26 -11 -10 PRICES Wholesale....................... Consumers.................. - 2 - 13 + n -13 +21 -1 + 16 + 20 + 28 -12 +31 + 10 OTHER -16 + 23 0 1 + 11 + 26 + 14 •Pennsylvania ••Adjusted for seasonal variation. fPhiladelphia. + 24 Reading.................... +2 + 7 +3 +23 Scranton.......................... +3 + 9 +6 + 23 Wilkes-Barre.................... + 3 Sales Philadelphia....................... U. S. Govt, securities.......... - 2 Other........................... Output of electricity............... Payrolls Harrisburg........................... + 16 + 26 Clleek Pay ments Employ ment Per cent cht*nge Feb 1951 from LOCAL CONDITIONS Allentown................ + 16 + 29 Department Store + 14 + 1* + 12* + 12* + i 0* + 27* + 28* ©M 7+ TRADE** Department Btore sales . . . Department store stocks.... year ago 2 mos. 1951 from year ago Factory* 0* + 15* + 16* 0 + 21 + 21 0 + 53 + 51 + 7 + 28 + 32 + 52 + 174 + 93 + EMPLOYMENT AND INCOME Factory employment......... Factory wage income... » »«= th,„ fo, any com- United States Per cent change SUMMARY In SpitC °f this decline the privately owned money 6er ,h" bef°re "" ”,br“k °f %h,i"e ” K™- 0 + 3 +2 +n Williamsport.................... +1 + 16 +2 + 33 Trenton................................ Wilmington....................... York.................................. -5 0 + 14 0 + 11 -1 + 27 + 15 +21 -12 + 13 + 18 + 13 + 33 0 + 34 -6 + 21 +13 + 23 -14 +29 + 28 -2 + 15 -5 t covers areas oLone or more counties. Page 7 THE BUSINESS REVIEW EMPLOYMENT AND INCOME MEASURES OF OUTPUT Per cent change month ago 0 0 0 MANUFACTURING (Pa.). . Durable goods industries. . . . Nondurable goods industries. Pennsylvania Manufacturing Industries* 2 mo. 1951 from year ago Feb.1951 from year ago + 15 + 23 + 5 + + + + + + + + + + + + + + + + + + + 3 1 4 2 6 3 14 i 14 5 27 5 17 23 37 35 21 13 36 22 - 7 0 + 2 + 6 - 2 - 2 - 2 - 1 + i 0 - 2 - 1 + i - 2 0 + 3 - 2 - 4 + 2 + 2 + + + + COAL MINING (3rd F. R. Dist.)* Anthracite................................................... Bituminous. ............................................... - 7 - 7 - 7 + 52 + 37 + 416 CRUDE OIL (3rd F. R. Dist.)** . . -11 + + Indexes (1939 avg. =100) All manufacturing----- 141 Durable goods 166 Nondurable goods 116 + 49 + 38 + 185 F oods.......................................................... Tobacco..................................................... Textiles.............. ...................... ................ Apparel..................................... ................ Lumber..................................................... Furniture.............................................. Paper....................... .................................. Printing and publishing.................... Chemicals . .......................................... Petroleum and coal products......... Rubber. .................. .................. Leather...........................-...................... Stone, clay and glass. ....................... Primary metal industries................ Fabricated metal products ............ Machinery (except electrical) .... Electrical machinery.......................... Transportation equipment............. Instruments apd related products. Misc. manufacturing industries. . . CONSTRUCTION — CONTRACT AWARDS (3rd F. R. Dist.)|-----Residential................................................. Nonresidential......... ................................ Public works and utilities.................... 1 1 3 2 6 + 16 + 24 + 5 Feb 1951 (Index) Average Weekly Earnings Payrolls Employment Per cent change from mo. ago year ago Feb. 1951 (Index) +i + 12 + 19 Per cent change from Average Hourly Earnings Feb. 1951 % chg. from year ago Feb. 1951 % chg. from year ago +1 year ago 390 0 +27 $62.09 + 13 $1,547 +n 437 -1 + 35 67.71 + 13 1.664 + 10 + 3 +1 mo. ago 329 +i + 14 54.22 + 11 1.378 + 9 -5 +i +3 +7 -1 -1 -2 + 8 + 8 + 14 + 13 + 13 + 9 + 23 50.61 34.47 55.87 42.91 44.51 54.39 62.48 + 3 + 11 + 13 + 12 + 10 + 7 + 13 1.296 .912 1.397 1.151 1.083 1.240 1.434 + 7 + 9 + 11 + 10 + 7 + 8 + 8 . . 0 + 8 - 8 + 2 + + + + + + + + + + 24 » 18 21 34 33 19 14 37 23 -2 +1 +1 +3 -2 -2 0 + + + + + + 3 1 1 3 3 9 119 151 +1 +2 + 1 + 13 302 419 +1 0 + 7 + 30 71.78 66.01 + 6 + 15 1.864 1.577 + 6 + 11 153 242 93 0 +1 —1 + 3 + 26 - 1 406 660 254 -1 -2 0 + 14 + 37 79.73 67.53 46.87 + 11 +u + 8 + 11 1.941 1.714 1.189 + 7 + 10 + 9 143 0 + 13 396 +i + 32 63.43 + 17 1.576 + 12 139 +1 + 19 367 -3 + 34 73.81 + 13 1.870 + 10 183 +1 + 28 498 +i + 51 64.55 + 19 1.573 + 12 239 +1 + 22 674 +3 + 46 71.42 + 20 1.621 + 10 267 + 13 0 + 15 126 90 86 138 163 140 149 285 237 268 419 417 403 429 0 + 21 593 -2 + 31 62.01 + 9 1.542 + 9 146 +1 + 13 357 -4 + 17 69.17 + 4 1.820 + 7 +2 + 29 526 +3 + 55 65.90 + 20 1.589 + 13 +1 +21 387 +3 + 35 53.62 +n 1.273 + 10 5 Printing and Stone, clay and Primary metal Machinery (except + + + + 6 53 60 72 14 6 Electrical + + + + 51 49 76 16 ♦U.S. Bureau of Mines. ♦♦American Petroleum Inst. Bradford field. tSource: F. W. Dodge Corporation. Changes computed from 3-month moving averages, centered on 3rd month. Transportation Instruments and 182 related products. . Misc. Manufacturing 148 Industries................ ♦Production workers only. TRADE Per cent change Third F. R. District Indexes: 1935-39 Avg. =100 Adjusted for seasonal variation Feb. Feb. 1951 from 1951 (Index) month year ago ago SALES Department stores.............. Women’s apparel stores.. . Furniture stores................... 321p 241 STOCKS Department stores.......... Women’s apparel stores. Furniture stores............... 301p 256 - 6 -10 - 4* + 16 + 11 + 11* + l — 2 + 6* ended ended ended ended ended March Mafch March March March Page 8 Per cent change from year ago + 22 + 16 + 14 + 3 -22 3 10 17 24 31 * Not adjusted for seasonal variation. + 25 + 16 + 26* + 29 + 19 + 43* Recent Changes in Department Store Sales in Central Philadelphia Week Week Week Week Week 2 mos. 1951 from year ago p-preliminary. Sales Departmental Sales and Stocks of Independent Department Stores Third F. R. District % chg. % chg. 2 mos. Feb. 1951 1951 from from year year ago ago Stocks (end of month) % chg. Feb. 1951 from year ago Ratio to sales (months’ supply) February 1951 1950 Total — All departments. + 12 + 21 + 34 Main store total.............................. : • • • Piece goods and household textiles. Small wares.................................. .. Women’s and misses’ accessories.. . Women’s and misses’ apparel........... Men’s and boys’ wear......................... Housefurnishings................................... Other main store........................, • • • • + 13 + 15 + 23 + 34 + 5 + 18 + 34 + 31 + 22 + 23 + 11 + 30 + 56 + 40 4.3 4.9 4.6 4.5 3.0 5.4 4.4 5.0 3.7 4.3 3.8 4.2 3.3 5.0 3.1 3.6 Basement store total.............. Domestics and blankets . . . Small wares....... ............ Women’s and misses’ wear. Men’s and boys’ wear......... Housefurnishings................... Shoes.......................................... + 9 + 17 -11 + 9 + 14 + 15 + 38 - 4 + 38 + 109 + 18 + 12 + 48 + 15 3.1 4.0 3.0 2.3 3.8 3.5 3.9 2.4 2.3 2.3 2.2 2.9 2.1 3.6 Nonmerchandise total. 1 - 14 + + 22 + 22 + 11 + 2 + 22 + 29 + 29 + 8 + 2 + 18 + 8 + 20 + 4 + 11 + 12 + 69 + 23 THE BUSINESS REVIEW CONSUMER CREDIT BANKING Sales Sale Credit Receiv ables (end of month) % chg. % chg. % chg. Feb. 2 mos. Feb. 1951 1951 1951 from from from yearago yearago year ago Third F. R. District Department stores Cash........................ + 8 + 23 Instalment account............. + 16 + 31 + 24 MONEY SUPPLY AND RELATED ITEMS +25 + 11 +2# + 34 + 24 + 28 + 14 Loans made Loan Credit % chg. % clig. % chg. Feb. 2 mos. Feb. 1951 1951 1951 from from from year ago year ago year ago Consumer instalment loans Commercial banks. . . Industrial banks and loan companies... omall loan companies... Credit unions............... - .9 0 0 + 6.6 0 - .1 -2.3* + 13.8* 125.2 + 4.6 + .8 - .9 + .i + 10.6 - 8.0 + 2.0 19.1 + .i + 2.8 18.4 .7 Required reserves (estimated). . Excess reserves (estimated)___ 0 53.7 59.1 12.4 Loans................................................. U.S. Government securities. . . Other securities............................. Member bank reserves held......... Loan bal ances out standing (end of month) + 6.6 21.5* Turnover of demand deposits. . year - .9 91.2 59.0 24.6 Demand deposits, adjusted. . . Time deposits................................. Currency outside banks............. four weeks 174.8 Money supply, privately owned Commercial bank earning assets Furniture stores Cash................... Charge account..................................................... Instalment account............. Changes in— Feb. 28 1951 United States (Billions $) + .3 - .2 + 3.0 - .2 Changes in reserves during 4 weeks ended February 28 reflected the following: Effect on (Billions $) reserves Increase in Reserve Bank holdings of Governments... Net payments by the Treasury.......................................... Decrease in loans to member banks................................ Gold and foreign transactions............................................ +.4 _j_,4 — .4 —3 Change in reserves........................................................ ^ + 9 at letSinTcitles outside’N° y! af/” ChaDgeS fro“ mODth and year a«° PRICES OTHER BANKING DATA Feb. 1951 (Index) Index: 1935-39 average =100 Per cent change from month ago Wholesale prices —United States Farm products................................ Foods.................................................. Other............................................] * * 228 267 237 212 Consumer prices United States.................................. Philadelphia................................ . Food................................................. Clothing.......................................... Rent......................................] ’ ’ * ’ Fuel................................................... Housefurnishings.................... Other.................. .................... 184 186 220 203 123 153 224 170 +2 +4 +3 +1 +1 +2 +2 +2 +2 +1 +4 year ago + 20 + 27 + 20 + 18 + 11 + 12 + 16 + 12 + 1 + 6 + 18 + 12 Weekly reporting banks—leading cities United States (billions $): Loans— Commercial, industrial and agricultural. Security................................................................. Real estate......................................... .. To banks............................................... All other.................................... Total loans—gross...................................................... Investments.................................................. .................... Deposits................................................ !!!!!.!!!.............. Third Federal Reserve District (millions $): Loans— Commercial, industrial and agricultural___ Security...................................................... Real estate.................................. To banks................................................... .. All other.................................. Total loans—gross. Investments............... Deposits....................... Weekly Wholesale Prices—U.S. (Index: 1935-39 average =100) Week Week Week Week Week ended ended ended ended ended March 6.................................. March 13.......................... . . . March 20.............................* . March 27............................... . April 3 ........................ .. . . . Source: U.S. Bureau of Labor Statistics. All com modi ties Farm prod ucts Foods Other 228 228 228 228 227 266 268 269 268 266 239 237 238 237 235 212 211 212 212 212 Member bank reserves and related items United States (billions $): Member bank reserves held............................ Reserve Bank holdings of Governments. . Gold stock.......................................................... Money in circulation.............................. ] . * * * Treasury deposits at Reserve Banks....!. Federal Reserve Bank of Phila. (millions $): Loans and securities........................................... Federal Reserve notes........................................ Member bank reserve deposits...................... Gold certificate reserves.................................... Reserve ratio (%)................................. .!!!.. Mar. 21 1951 19.2 2.2 5.3 .5 5.9 ~3vi~ go 8 740 50 138 4 391 Changes in— four weeks + + .6 + 5.3 0 + .1 + .2 + .9 + 1.4 .2 + 4- 8 4- .4 + 1.7 + 8.0 - 4.5 + 5.9 + 55 + 245 .1 0 - 0 6 - 2 + + 11 8 + 30 - 30 + 72 1,323 1,580 3,231 + 55 - 14 + 13 + 328 -317 + 49 19.3 22.3 21.9 27.1 + .4 + .5 - .4 + 3.3 + 4.8 - 2.4 0 + -1 .2 .6 - .2 1,421 + 38 1,633 - 11 887 + 14 8 1,207 45.7% - -3% - + 246 + 36 + 122 -115 - 7.5% Page 9
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