Full text of Economic Report of the President : 1967
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Together With
THE ANNUAL REPORT
of the
COUNCIL
OF ECONOMIC ADVISERS
Economic Report
of the President
Transmitted to the Congress
January 1967
TOGETHER WITH
THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON
: 1967
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $1.25
CONTENTS
ECONOMIC REPORT OF THE PRESIDENT
Page
3
RECENT ECONOMIC GAINS
OUR ECONOMIC PROBLEMS
4
Some Leading Problems
Finding Solutions
5
6
USING THE GAINS OF GROWTH
8
Realizing the Growth Dividend
Fiscal Policy for 1967
Using the Growth Dividend
8
9
10
RESTORING PRICE STABILITY
11
INTERNATIONAL ECONOMIC POLICIES
13
Trade
Aid
Balance of Payments
Improving the International Monetary System
HELPING THE DISADVANTAGED
13
13
14
16
16
Income Guarantees
Public Assistance
Training and Employment
Social Security
Unemployment Insurance
17
17
18
18
18
CITIES AND HOUSING
19
EDUCATION AND HEALTH
20
ABATING POLLUTION
20
IMPROVING OUR TAX SYSTEM
21
IMPROVING GOVERNMENT ORGANIZATION
21
OTHER ECONOMIC POLICIES
22
AFTER VIETNAM
23
CONCLUSION
24
ANNUAL REPORT OF THE COUNCIL OF ECONOMIC ADVISERS*
CHAPTER 1. EXTENDING THE RECORD OF PROSPERITY
37
CHAPTER 2. PRICES AND WAGES IN 1966
72
*For a detailed table of contents of the Council's Report, see page 81.
m
Page
CHAPTER 3. MAINTAINING PRICE STABILITY AND REDUCING
UN-
EMPLOYMENT
99
CHAPTER 4. SELECTED USES OF ECONOMIC GROWTH
135
CHAPTER 5. GROWTH AND BALANCE IN THE WORLD ECONOMY
170
APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF
THE COUNCIL OF ECONOMIC ADVISERS DURING 1966
199
APPENDIX B. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND PRODUCTION
207
IV
ECONOMIC REPORT
OF THE PRESIDENT
ECONOMIC REPORT OF THE PRESIDENT
To the Congress of the United States:
A healthy and productive economy is a bulwark of freedom.
Around the world and here at home, our trials of strength, our works
of peace, our quest for justice, our search for knowledge and understanding, our efforts to enrich our environment are buttressed by an
amazing productive power.
Americans have confronted many challenges in this century. The ones
we face in 1967 are as trying of men's spirits as any we have known. But
the overwhelming majority of us face our challenges in comfort, if not
affluence. The sacrifices required of most of today's generation are not
of income or security; rather we are called on to renounce prejudice,
impatience, apathy, weakness, and weariness.
In purely material terms, most Americans are better off than ever
before. That fact expands our responsibilities, as it enlarges our resources to meet them.
RECENT ECONOMIC GAINS
An average of 74 million persons were at work in 1966—2 million
more than in 1965. Nonfarm payrolls averaged 64 million, a gain of
3 million. On the whole, these jobs were better paying than ever, and
more regular and more secure than most workers can remember.
The value of our total production of goods and services in 1966 was
$740 billion—$58 billion, or 8/ 2 percent, higher than in 1965. More
of the increase than we wanted represented higher prices. Still, the
gain was nearly 51/2 percent after correction for price changes.
Labor, business, and the farmer all contributed to this major gain in
production, and they rightly shared the benefits.
Aggregate compensation of employees rose 10.3 percent. Average
compensation per man-hour in the private economy rose 6.5 percent, reflecting increased wages and fringe benefits, more overtime, the shift to
higher-paying jobs, and increased employer contributions to Social Security. Corporate profits after taxes advanced more than 8 percent; per
dollar of sales they were roughly unchanged from the high rate of 1965.
Net income per farm rose more than 10 percent.
The single most meaningful measure of economic well-being is real
disposable income per person—the after-tax purchasing power in stable
dollars, available on the average to every man, woman, and child. It
rose 3 / 2 percent or $89 per person in 1966. Although this advance was
somewhat smaller than in 1965, it was still three times as large as the
average yearly gain in the 1950's.
February 1961 launched the strongest and most durable economic
expansion in our economic annals, and it still continues.
• Almost 9 million jobs have been added in the last 6 years.
• The rate of unemployment has fallen from 7 percent in early 1961
to under 4 percent. The rate for white adult males fell from 5
percent to 2 percent; for Negro men, from nearly 12 percent to
less than 5 percent.
• Early in 1961, more than two-thirds of our major labor markets
were "areas of substantial unemployment"; today only 8 of the
150 are so classified, and 66 have unemployment below 3 percent.
• While total population rose 11 million between 1961 and 1965,
the number of Americans in poverty declined 5^4 million, and
probably fell at least another 1*4 million in 1966. (The poverty
definition is adjusted for the increase in living costs.)
• Our gross national product (GNP) has grown 50 percent in 6
years. In constant prices, the gain has averaged 5J/2 percent a
year. The physical output of our factories and mines is up over
50 percent.
• Private output per man-hour in 1966 was 19 percent higher than
in 1961.
• The 6-year addition to our gross stock of private productive
capital—machines, buildings, transportation equipment, land
improvements, and inventories—is valued at $220 billion.
• American families have added $470 billion to their accumulated
financial assets. They have added $150 billion to their debts.
So their net financial position is $320 billion stronger than 6 years
ago.
OUR ECONOMIC PROBLEMS
Prosperity is everywhere evident. But prosperity is never without
problems, and—in 1966—some of them were serious.
SOME LEADING PROBLEMS
1. Economic progress still left far too many behind.
• Nearly 3 million workers were without jobs at the end of 1966.
Perhaps two-thirds of them were "frictionally" unemployed:
new entrants to the labor force in the process of locating a job;
persons who quit one job to seek another; workers in the "off"
months of seasonal industries; those temporarily laid off but with
instructions to return. Their unemployment will be temporary;
many were drawing unemployment insurance.
#
But most of the remaining third will wait a long time for a steady
job. They are the "hard-core" unemployed—lacking the necessary skills to find other than intermittent work; the victims of past
or present discrimination; those unable or unwilling to move
from depressed areas and occupations; the physically or emotionally handicapped.
#
Another half million to one million potential workers were not
even counted as unemployed. Many had long ago abandoned
any search for a job. Some had never tried.
• But even among those who worked year-round, some 2 million
breadwinners—particularly the low-skilled with large families—
earned incomes insufficient to support a minimum standard of
decent subsistence.
* And 63/2 million families were poor because the heads of their
households were unable to work: either aged, severely handicapped, or a widowed or deserted mother with young children.
Those left behind used to be called the "invisible poor." But an
awakened public conscience has sharpened the vision of most Americans.
2. Price increases—although less than in many comparable periods—
still were greater than we wanted or should long tolerate.
It is tempting to blame the creep of prices on the greed of producers—
or the irresponsibility of labor—or Government policies—or bad
weather—or economic disturbances abroad. Some of the price rise may
have been due to each. But the main causes lay elsewhere:
• Some can be traced to imbalances created by the special pressures
of Vietnam procurement and booming private investment.
#
The spurt of demand—partly real, partly psychological—that followed the step-up of our Vietnam effort in mid-1965 simply exceeded the speed limits on the economy's ability to adjust. Our
resources were sufficient for the task; but the sheer speed of the
advance strained the ability of industrial management to mobilize
resources at the required pace.
• Some price advance was the inevitable cost of the adjustments
required in recovering from a decade of slack:
—Wages had to be raised sharply in underpaid occupations,
which previously held their labor only because the alternative
was no job at all.
—Producers in once stagnant, low-profit industries saw opportunities for expansion and found it possible to raise prices and
earnings in order to attract needed capital.
—Demand pressed harder on skilled occupations and professional services where we had trained too few persons to
meet the needs of a high employment economy.
Some price increases would still have occurred had we moved at a
steadier pace.
But these price increases could have come slowly enough and have been
small enough not to threaten a chain reaction of wages chasing other
wages—wages chasing prices—prices chasing wages—and prices chasing
other prices.
It is this spiral we must and can avoid. But it will require responsible
action on the part of all.
3. Achieving equilibrium in our balance of payments remained a problem, in spite of strong new measures.
The costs of Vietnam required us to spend many more hundreds of
millions of dollars beyond our shores. At the same time, the spurt of
demand caused our imports—especially of capital goods—to soar.
We are determined to continue our progress toward equilibrium.
4. Tight money and high interest rates concentrated the burden
of restraint on housing.
Interest rates in 1966 were as high as at any time in 40 years. They
were pushed there by an insatiable demand for credit, straining against a
deliberately restricted supply. Monetary policy in 1966—like tax
policy—was properly aimed at slowing down an economy expanding too
fast.
The brakes applied last year worked. But tight money worked painfully and inequitably. It cut construction by more than $8 billion
during 1966. Its impact was equivalent to a heavy across-the-board tax
increase, but with most of its effect concentrated on a single industry.
FINDING SOLUTIONS
We will move this year toward solutions for these problems and others.
But they cannot all be completely solved in 1967.
Lifting the Burden on Housing
Now that the economy's advance is again more moderate, the burden
of tight money is being lifted. Interest rates are still extremely high—
but they are moving down from their peaks. Credit is still not readily
available to all who can make sound and productive use of it—but it is
becoming easier to get. More savings are flowing into our thrift institutions and are beginning to be available to builders and homebuyers.
The steps we took last year and those I am now proposing, the steps
the Federal Reserve has recently taken and is continuing to take to increase
credit availability and lower interest rates, should have our housing
industry moving smartly forward by the end of 1967, and ready for one
of its best years in 1968.
Restoring Price Stability
The advance of prices has already begun to slow. Wholesale prices
in December were below their levels of August.
The more moderate pace of economic advance, now underway, which
the policies I am recommending are designed to maintain, should
further diminish inflationary pressures.
We cannot rescind all of last year's increases in costs, some of which
are still spreading through our structure of prices. Price stability cannot
be restored overnight. But we will be making good progress toward
price stability this year.
Improving Our International Payments
We have recently announced stronger voluntary balance of payments
programs for 1967. Our policies to constrain economic expansion to a
sustainable pace should permit an improved export surplus.
I am now recommending further steps to strengthen our external payments. Yet so long as we remain heavily engaged in Southeast Asia,
we will have a balance of payments problem.
Combating Poverty
We will continue to attack poverty and deprivation through such
weapons as
—Community Action and Head Start;
—rent supplements and child nutrition;
—aid to elementary and secondary education in poverty areas and
the Teachers Corps;
—the Manpower Development and Training Act, the Job Corps,
the Neighborhood Youth Corps;
—Medicare, Medicaid, and neighborhood health centers;
—measures to end discrimination in jobs, education, and public
facilities;
—the expanded coverage enacted last year for a higher minimum
wage.
I am proposing that our attack be reinforced with new weapons in
1967.
Yet, with old weapons and new, the war on poverty will not be won
in 1967—or 1968. There is no wonder drug which can suddenly conquer this ancient scourge of man. It will be a long and continuing
struggle, which will challenge our imagination, our patience, our knowledge, and our resources for years to come. Our capacity to stay with
the task will be a test of our maturity as a people.
USING THE GAINS OF GROWTH
From early 1961 to the end of 1966, our GNP rose an average of $44
billion a year. About $9 billion a year was price increase. Of the
balance
• An average real gain of $10 billion a year (in 1966 prices) came
from putting idle men and machines back to work.
• An average real gain of $25 billion a year (in 1966 prices) came
from the growth of our resources: a larger work force, more and
better capital and management, higher productivity.
Further gains from putting idle resources to work will now be harder
to achieve.
But our annual dividend from growth has meanwhile become more
generous. In 1967 it will add $30 billion at today's prices to our potential output.
Our economic policies must assure that we realize this potential
dividend—and use it wisely.
REALIZING THE GROWTH DIVIDEND
To ensure our full dividend from economic growth requires that
markets for goods and services expand steadily and adequately—but
not excessively. In recent years, we have tested and refined the power
of fiscal and monetary policy to stimulate or moderate the expansion
of total demand.
During 1966, Federal expenditures were expanding rapidly. But tax
policy worked to counter their impact.
Federal expenditures in our national income accounts grew $19
billion in calendar year 1966, reflecting the step-up in national defense;
in Social Security, Medicare, and related payments; and in grants to
State and local governments. They added strongly to private pur
8
chasing power. They would have added more but for the substantial
expenditure cutbacks put into effect during the year.
On the other side, taxes restrained demand. Higher payroll taxes,
the restoration of some excise taxes, the institution of graduated withholding, and the suspension of tax incentives to investment all represented new measures that were draining off more than $9 billion of
spendable incomes by year-end. In combination, and for the full year,
these measures and an expanding economy produced $18 billion more
in revenues than in 1965. Prompt action by Congress in response to my
tax proposals of January and September made tax policy an important
force for economic restraint.
Taking the two sides together, our national income accounts budget
was in surplus in the first half and in balance for 1966 as a whole.
But as private investment threatened to outrun private saving, sharp
monetary restraint was also applied. In response to both fiscal and
monetary restraints, the economy shifted gears from excessive speed to
a moderate advance.
FISCAL POLICY FOR
1967
In the year ahead we are determined to maintain that moderate
advance; we need no further slowdown; we can tolerate no new spurt
of demand. After midyear, the tax increase I have proposed and a
more moderate growth of Federal spending will increase the freedom of
monetary policy to support expansion. I am confident that the opportunity will be used.
The specific fiscal program I am recommending includes
—a surcharge of 6 percent on the tax liabilities of individuals,
exempting persons in the lowest income brackets;
—the same 6 percent surcharge on the tax liabilities of corporations.
Here are some examples of the effect of this proposal, as applied to
a married couple with two dependents, using typical deductions:
• With $5,000 income, their tax will be unchanged—still $130
lower than they would have paid in 1963.
• With $10,000 income, their tax in 1968 will rise $67, or $1.30
a week. Their annual tax will still be $190 less than they would
have paid in 1963.
• With $20,000 income, their tax in 1968 will rise $190, or $3.65
a week. But their annual tax will still be $450 less than they
would have paid in 1963.
A corporation with profits before tax of $100,000 will pay an extra
$2,490. It will still pay $2,510 less than it would have paid in 1963.
One with profits of $1,000,000 will pay an extra $28,410, still $12,590
less than it would have paid in 1963.
The surcharge will provide for $5.1 billion of extra revenues in fiscal
year 1968 on a national income accounts basis, substantially offsetting
the expansion of $5.8 billion in defense purchases.
The national income accounts budget will also be affected by my proposals for Social Security benefits and taxes.
After allowance for these changes, the national income accounts deficit
for fiscal year 1968 is now estimated at $2.1 billion, compared with
$3.8 billion in fiscal year 1967.
I am also recommending two further accelerations of corporate tax
payments, to begin in 1968:
—requiring quarterly payment of estimated tax on the basis of 80
percent rather than 70 percent of liability;
—requiring, over a 5-year period, that small corporations, as well
as large, become current in their tax payments, in the same way
as individual proprietors.
We have fashioned a fiscal program for sustainable expansion. With
that program, we now see a rise of about $47 billion in our GNP in
1967—a growth dividend close to 4 percent in real terms.
USING THE GROWTH DIVIDEND
The first priority for the use of our growth dividend must, as always,
be the defense of freedom. But it will take only a small part of our $47
billion of added production.
These will be the public claims on our growth dividend:
* $10 billion more of our output in 1967 will go for the support of
our men in Vietnam and other urgent needs of defense.
• $1 y2 billion will go for the expansion of other Federal purchases,
including adjustments in Federal civilian and military pay.
#
State and local governments will use about $8 billion more of the
Nation's resources in 1967. In this, they will be aided by Federal
grants totaling nearly $15 billion.
The remaining $ 2 7 ^ billion of our GNP gain in 1967—nearly 60
percent of it—will be used in the private sector. And the flow of goods
and services to consumers will expand this year by even more than that.
• In the past several years, an unusually large part of our output
growth has gone to expand the productive capacity of business
and to build up inventories to support high and growing production and sales. On balance, a slightly smaller portion of our resources will be used for these purposes in 1967 than in 1966.
IO
• For the year as a whole, slightly less of our resources than last
year will be used to build new homes, although a sharp recovery
in residential construction from its current deep recession is
expected during the course of the year.
As the flow of goods and services to consumers expands, the ability of
our elderly citizens to share in these gains will be supported by a rise of
more than $6 billion in Social Security and Medicare payments.
In 1967, we will have no bonus dividend from using previously idle
resources. But the dividend from growth alone is a big one. We must
be sure we get it; and we must use it wisely.
RESTORING PRICE STABILITY
From the beginning of 1961 until 1965, the United States enjoyed
both price stability and a strongly expanding economy. The average of
wholesale prices hardly moved, and consumer prices rose only a little
more than 1 percent a year. Last year, that record was blemished.
Consumer prices rose 2.9 percent between 1965 and 1966, wholesale
prices 3.2 percent.
When we were involved in Korea, consumer prices rose 8.0 percent
between 1950 and 1951, wholesale prices 11.4 percent. And we had
price controls during most of 1951.
Even when we were not at war, consumer prices rose 3.5 percent
between 1956 and 1957, wholesale prices 2.9 percent.
Nevertheless, we are not satisfied with our record on prices. And we
expect to improve on it this year.
There are many reasons why we refuse to tolerate rapidly rising prices:
• They injure those with fixed incomes, especially older people.
• They can lead to speculation and economic distortions which
could undermine prosperity.
• They weaken our competitive position in world markets.
• As they persist, they become harder to stop without throwing the
economy into reverse.
Restoring price stability is one of our major tasks. It will not be accomplished all at once, or all in 1967. That could be done—if at all—
only at the cost of mass unemployment, idle machines, and intolerable
economic waste. But a gradual return to stability can go hand in hand
with steady economic advance.
Such an improvement will require
—prudent fiscal and monetary policies;
—Government efforts to help relieve the key points of pressure on
prices;
II
—the responsible conduct of those in business and labor who have
the power to make price and wage decisions.
With steady, sustainable, and balanced growth, we can look forward to
—relief of pressures on capacity in such strained areas as machinery and metals;
—adjustments of raw materials supplies to demand;
—the end of labor shortages in key areas.
Other efforts of the Federal Government can help to relieve particular
pressures on prices and wages. We will continue
—to develop manpower training programs to meet skill shortages;
—to increase the efficiency of the employment services in matching
jobs and men;
—to handle Government procurement so as to minimize its pressure on prices;
—to dispose of surplus Government stockpiles to alleviate shortages
of raw materials;
—to manage farm programs to assure adequate supplies as well
as equitable returns.
But efforts of the Government alone will not be enough. The cooperation of business and labor is essential for success.
In the past year, most businessmen who had a choice in setting prices
and most trade unions that negotiated wage contracts acted responsibly.
They did so because they took account of the national interest and
saw that it was also their own.
If business and labor were to consider only their own short-run interests
—each union might seek a wage increase which exceeds the most
recent settlement by some other union;
—each business might strive to achieve a new profit record by translating strong demand into higher prices, whether or not costs
have increased.
But when business and labor consider the national interest—and their
own longer-run interests—they realize that such actions would have only
one result: a wage-price spiral which is in the interest of neither.
• If unions now attempt to recoup in wages all of the past or anticipated advance in the cost of living—in addition to the productivity trend;
• If businesses now seek to pass along rising costs when it would be
possible to absorb them or do not reduce prices when costs fall;
then the result will be just such a spiral—damaging to business, damaging
to labor, and disastrous to the Nation.
12
Once again, I appeal to business and labor—in their own interest and
that of the Nation—for the utmost restraint and responsibility in wage
and price decisions.
INTERNATIONAL ECONOMIC POLICIES
The current year is a critical one for our international economic policies
and for the economic progress of the world community.
As the largest single market and source of capital, the United States
carries special responsibilities.
TRADE
This Administration is committed to reducing barriers to international trade, as demonstrated by my recent action terminating the 1954
escape clause action on watches, and rolling back the special tariff on
imports of glass.
The Kennedy Round of trade negotiations is now entering its final and
most critical phase. I emphasize once more how important this great
attempt to liberalize world trade is for all the developed and developing
nations of the free world.
After more than 4 years of discussion, it is essential that the participants
now resolve the many complex problems that still remain. It would
indeed be a tragedy if the wide authority granted to the President by the
Trade Expansion Act of 1962 were allowed to lapse unused. Never
before has there been such a splendid opportunity to increase world trade.
It must not be lost.
But the Kennedy Round is not the end of the road. We must look
beyond the negotiations in Geneva to further progress in the years ahead.
We must begin to shape a trade policy for the next decade that is responsive to the needs of both the less developed and the advanced countries.
We should seize every opportunity to build and enlarge bridges of
peaceful exchange with the countries of Eastern Europe and the Soviet
Union. We should have the ability to adapt our policies to whatever
political circumstances or commercial opportunities may present themselves. I again urge the Congress to provide authority to expand our
trade relations with Eastern Europe and the Soviet Union.
AID
Although 1966 was a relatively good year for world economic growth,
average output in developing countries rose by less than $3 a person.
13
240-782 0—67—2
There were, however, encouraging signs of progress. Developing
nations demonstrated a willingness to take difficult but necessary steps
to help themselves. India, for example, revised her foreign exchange
and agricultural policies to promote more rapid growth.
Among the wealthier nations, stronger efforts were made to assist the
development of the poorer countries. Canada and Japan increased
their assistance programs. Major free world aid donors joined in new
groups to coordinate theirflowof aid.
The United States will continue to respond constructively to the aspirations of the developing nations. We will give first priority to fighting the
evils of hunger, disease, and ignorance in those free world countries
which are resolutely committed to helping themselves.
There should, however, be increasing efforts to make both the receiving and giving of aid a matter for creative international partnership.
We shall therefore
—continue to support enthusiastically, in a manner consistent
with our balance of payments position, such promising cooperative regional efforts as the Alliance for Progress, the Inter-American, the Asian, and the African Development Banks, and the
Mekong Development Fund of the United Nations;
—further encourage the coordinated extension and expansion of
aid by the major donor countries in ways that result in an
equitable sharing of the burden;
—seek the cooperation of other major donor countries this year in
replenishing the resources of the International Development Association.
BALANCE OF PAYMENTS
We can take some satisfaction in the fact that our balance of payments
in 1966 may prove to have been in surplus on official reserve settlements.
Despite the added costs of the war in Vietnam and the rapid growth of
imports, our deficit on a liquidity basis increased only slightly in 1966.
But we cannot relax our efforts to seek further improvement.
Our goal in the coming year is to continue to move toward balance of
payments equilibrium as rapidly as the foreign exchange costs of the
Vietnam conflict may permit. This goal will be supported through
measures and policies consistent with healthy growth at home and our
responsibilities abroad.
We already have extended and reinforced the voluntary restraint programs for corporate investment abroad and for foreign lending by
financial institutions. I am counting on the continued full cooperation
of businesses and banks with these programs in 1967. And I have
14
instructed all agencies of the Government to intensify their efforts to limit
the dollar drain resulting from their activities.
But more is needed. I now recommend the following steps:
1. The Congress should extend the Interest Equalization Tax, in
strengthened form, to July 31, 1969. This tax has proved extremely useful in limiting the borrowing of developed countries in
our capital markets and in reinforcing the Federal Reserve voluntary program. As we move toward easier money in the United
States, foreign borrowing in our financial markets may tend to
increase. I am therefore requesting authority to adjust the
rates of the Interest Equalization Tax as monetary conditions
warrant, so that the effective impact on interest costs can be varied
between zero and 2 percent. This would replace the present flat
1-percent impact.
Moreover, to ensure against possible anticipatory increases in
foreign borrowing, I am also requesting that the tax be imposed
at rates which provide an impact of 2 percent on interest costs
while the legislation is under consideration by Congress.
2. The most satisfactory way to arrest the increasing gap between
American travel abroad and foreign travel here is not to limit
the former but to stimulate and encourage the latter. I shall
appoint in the near future a special industry-Government task
force to make specific recommendations by May 1, 1967, on
how the Federal Government can best stimulate foreign travel
to the United States. After a careful review of their advice,
I shall ask the U.S. Travel Service and other appropriate agencies
to take the steps that seem most promising.
3. As part of our long-run balance of payments program, I shall
also
—request continuation and expansion by $4.5 billion of the
lending authority of the Export-Import Bank in order to
support the expansion of exports;
—continue to urge other countries to participate in the development of better means both of sharing the resource
burdens and of neutralizing the balance of payments effect arising from the common defense and foreign assistance efforts.
4. For the longer run strength of our payments balance, we should
intensify efforts to
—stimulate exporters' interest in supplying foreign markets;
—enlist the support of the financial community to attract
additional foreign investment in the United States;
—encourage further development of foreign capital markets.
15
IMPROVING THE INTERNATIONAL MONETARY SYSTEM
In 1966, significant progress was made toward a better international
monetary system. Through close consultation and cooperation among
the financial authorities of major countries, temporary strains were met
promptly and effectively.
Two large forward steps were taken on the road to international monetary reform: wide consensus was reached on basic principles for the
deliberate creation of additional reserve assets; and the negotiations
advanced to a second stage in which all members of the International
Monetary Fund are participating.
An even greater effort must be made in the coming year to improve
our monetary system. In particular, I urge that
—all countries participate in the continuing task of strengthening
the basic monetary arrangements that have served the world so
well;
—both surplus and deficit countries assume their full responsibility
for proper adjustment of international payments imbalances, and
cooperate in efforts to lower world interest rates;
—full agreement be reached on a constructive contingency plan
for the adequate and orderly growth of world monetary reserves.
HELPING THE DISADVANTAGED
The United States is the first large nation in the history of the world
wealthy enough to end poverty within its borders. There are many
fronts in the War on Poverty. We are moving forward on them all.
• There must be full employment so that those qualified and able
to work can find jobs. . . . The unemployment rate last year
was the lowest in 13 years.
• Those not now fully qualified must be given the education and
training, the health and guidance services which will enable them
to make their full contribution to society. . . . We have greatly
increased our aid to education and enlarged our training programs, and we will expand them further.
• For those who will be unable to earn adequate incomes, there
must be help—most of all for the benefit of children, whose
misfortune to be born poor must not deprive them of future opportunity. . . . We have increased our income support, and we
will increase it further.
• Wherever the poor and disadvantaged are concentrated, intensive and coordinated programs to break the cycle of deprivation
16
and dependency must continue and be reinforced. . . . We
instituted these programs in hundreds of cities and rural areas;
we are expanding them and designing others.
INCOME GUARANTEES
Completely new proposals for guaranteeing minimum incomes are
now under discussion. They range from a "negative income tax" to a
complete restructuring of Public Assistance to a program of residual
public employment for all who lack private jobs. Their advocates
include some of the sturdiest defenders of free enterprise. These plans
may or may not prove to be practicable at any time. And they are
almost surely beyond our means at this time. But we must examine any
plan, however unconventional, which could promise a major advance.
I intend to establish a commission of leading Americans to examine the
many proposals that have been put forward, reviewing their merits and
disadvantages, and reporting in 2 years to me and the American people.
PUBLIC ASSISTANCE
Our system of public assistance is now 30 years old and has obvious
faults. The standards of need set by many States are unrealistically
low; benefits are further restricted by excessively stringent eligibility conditions. In some respects the system perpetuates dependency.
1. State standards of need are miserably low. In 18 States a family
of 4 is presumed able to manage for a month on $45 a person—or less.
And in many States, actual payments average far below their own standards of need.
It is time to raise payments toward more acceptable levels.
As a first step, I ask the Congress to require that each State's payments at least meet its own definition of need; and that its definition
should be kept up to date annually as conditions change.
2. With minor exceptions, payments under public assistance are reduced dollar for dollar of earnings by the recipient, removing any incentive to accept part-time work. We should encourage self-help, not
penalize it.
It is time to put an end to this 100 percent tax on the earnings of
those on public assistance.
I shall therefore ask Congress to enact payment formulas which
will permit those on assistance to keep some part of what they may
earn, without loss of payments.
3. Many recipients of public assistance are capable of receiving training which would ultimately make them self-supporting.
17
I therefore urge the Congress to make permanent the Unemployed
Parent and Community Work and Training programs associated
with Aid to Families with Dependent Children (AFDC), and to
require all States receiving Federal support under AFDC to cooperate in making Community Work and Training available for the
unemployed parents of dependent children.
TRAINING AND EMPLOYMENT
The coexistence of job vacancies and idle workers unable to fill them
represents a bitter human tragedy and an inexcusable economic waste.
One of society's most creative acts is the training of the unemployed, the
underemployed, or the formerly unemployable to fill those vacancies.
A dynamic economy demands new and changing skills. By enabling
workers to acquire those skills, we open opportunities for individual development and self-fulfillment. And we make possible higher production without inflationary pressures.
I shall ask the Congress for funds to support a new and special effort
to train and find jobs for the disadvantaged who live in urban ghettos.
I shall also propose legislation to improve the effectiveness of the
Federal-State employment service.
SOCIAL SECURITY
Millions of aged still live in poverty. Millions of younger Americans
are willing to pay for more adequate retirement benefits in the future.
I ask the Congress to approve an over-all 20 percent increase in our
Social Security program. We can increase benefits for all Social Security beneficiaries by at least 15 percent, raise the minimum benefit by
59 percent to $70 a month, assure workers with 25 years of coverage
at least $100 a month, extend Medical Insurance to disabled beneficiaries,
and allow larger earnings without loss of benefits.
UNEMPLOYMENT INSURANCE
Our system of unemployment insurance was created in a world of
massive unemployment. The needs of a high employment economy are
different. Today, when jobs are available, the jobless who exhaust their
benefits typically need training, guidance, or other supportive services.
Therefore, I am asking the Congress to consider legislation to provide
such services in conjunction with extended benefits to the long-term
unemployed, to extend the protection of the system to additional workers, to establish more uniformly adequate benefits, and to correct abuses.
18
CITIES AND HOUSING
The American city is not obsolete; it is still a great engine for economic
and social progress. But cities are in trouble, threatened by congestion,
pollution, crime, poverty, racial tension, slums, and blight.
Yesterday's rural poor have been moving to the city just as many of
the jobs they seek and need have been moving to the suburbs. Inadequate transportation and discrimination in housing make it difficult for them to follow the jobs; and deficiencies of education, health,
and skills compound their disadvantages.
Most cities cannot afford the massive expenditures necessary to solve
these problems. The flight of higher income families and businesses
to the suburbs erodes sources of revenue for the cities, even as expenditure demands escalate. Inflexible city limits have created a hodgepodge
of local taxing jurisdictions, often dividing the tax base from the need.
The cities cannot collect for the many benefits they supply to residents
of the suburbs.
The problems of the cities flow across irrelevant boundaries established
by historical accident. So solutions must draw on the resources and
imagination of a larger area. Our efforts have been aimed to encourage
a metropolitan approach to metropolitan problems.
We must also find ways to enlist more fully the resources and. imagination of private enterprise in the great task of restoring our cities.
I have just appointed a Commission, under the chairmanship of
Senator Paul H. Douglas, to work with the Department of Housing
and Urban Development to examine problems of codes, zoning, taxation, and development standards and to recommend ways to increase
the supply of low-cost housing. I am convinced that this study can
make a major contribution to the solution of urban problems.
Last year, the Congress enacted the pathbreaking Model Cities legislation. The Federal Government will help cities to focus all available
programs on their needs—eventually to overwhelm the problems that
have heretofore overwhelmed the cities.
More than 70 cities will have completed their plans and be eligible to
start receiving assistance in 1968. Federal aid for water and sewer
projects, open land conservation, and urban mass transportation is encouraging a more coordinated approach to metropolitan problems. I
seek increased appropriations for all of these programs. And I shall
seek authorization and resources for a greatly expanded program of
research on urban problems.
19
Growth in the number and incomes of American families will require us to build about 2 million new houses a year for the next decade,
most of them in and around cities. Last year, housing bore a disproportionate part of the burden of needed restraint. But we are now moving
into a period of renewed homebuilding. I look for construction to
rise briskly during 1967.
Federal programs for fiscal 1968 will assist in construction or renovation of 165,000 housing units for the urban poor, the elderly, and the
handicapped. The Rent Supplement program will contribute to this
goal.
This year will be a brightening one for the housing industry; it can
also be a landmark year in the progress and evolution of our cities.
EDUCATION AND HEALTH
Individually and collectively, Americans have insatiable appetites for
more education and better health. Education and health contribute
both to individual well-being and to the Nation's productivity. But far
too many of our urban and rural poor are denied adequate access to
either. The efficiency of our methods of education and of providing
medical care can and should be strengthened.
History will record these years as the time when this Nation awoke to
its needs—and its limitations—in education and health. The Elementary and Secondary Education Act, Head Start, the Teachers Corps,
Medicare, Medicaid, and the Partnership in Health will be landmarks
in our social and economic development.
I shall propose
—an expanded Head Start program; a Follow-Through program
in the early years of school; and the opening of other new educational opportunities for children;
—both legislative and administrative changes to accelerate research
and development on more efficient and effective ways of providing health resources;
—an expanded child health program, including early diagnosis and
treatment, a pilot program of dental care, and the training of additional health personnel to provide services to children.
ABATING POLLUTION
A polluted environment erodes our health and well-being. It diminishes individual vitality; it is costly to industry and agriculture; it has
20
debilitating effects on urban and regional development; it takes some of
the joy out of life.
The 89th Congress enacted important legislation to improve the quality of our environment. All 50 States have now signified their intention
to establish water quality standards for their interstate and coastal waters.
The Federal Government is assisting State and local governments through
comprehensive water basin planning, and is providing financial help to
States for the administration of water pollution control and to local areas
for the construction of sewage treatment facilities. In addition, we are
studying appropriate methods to encourage industry to control its discharge of pollutants.
The foundation for abating air pollution was laid in the Clean Air
Act of 1965. But the air over every city proves that further steps are
necessary.
I propose that we get on with the jobs of preserving and restoring our
environment. I will present detailed proposals on control of air pollution in another message.
IMPROVING OUR TAX SYSTEM
Our tax system is one in which we can take pride. In terms of
fairness, revenue productivity, and balanced economic impact, it is
unsurpassed by any other tax system in the world today.
Nevertheless, it can be improved. As they now stand, our tax laws
impose undue burdens on some and grant unfair benefits to others.
A system as complex as ours cannot be perfected in a single bill.
Rather, the process of tax reform must be continuous, with every
provision of the law subject to constant examination and adjustment
where needed. Moreover, this work of basic reform should proceed
independently of the requirements for raising taxes or the opportunities
for tax reduction.
I therefore plan to submit proposals to the Congress to improve the
equity of our tax system and reduce economic distortions. These proposals will be designed to avoid significant budgetary effects.
As one specific reform, I will urge changes to deal with abuses by
tax-exempt private foundations.
IMPROVING GOVERNMENT ORGANIZATION
Separate Departments of Labor and Commerce perpetuate the obsolete
notion that there is fundamental conflict between the interests of business
and labor, or between the interests of either and that of the Nation.
21
A single department of labor and business can more effectively carry
out those national programs which affect the private productive sector
as a whole. The two departments share many common objectives; their
interests and activities coincide or overlap in
—fostering economic and regional development;
—matching the skills of labor with the needs of employers;
—providing more jobs at better wages;
—avoiding labor disputes;
—maintaining a fair distribution of private incomes without inflation;
—providing stability of production and jobs;
—providing basic economic and social information and technical
services needed by both private and public sectors;
—supporting expansion of international trade and considering its
impact on the domestic economy.
By combining these activities, we can greatly improve efficiency, reduce costs, simplify the reporting burden on business, provide better
and more uniform statistics, and assure that the views and the problems
of the private sector enter more effectively into decisions on general economic policy.
I urge the Congress to support my recommendation for a new department of labor and business.
OTHER ECONOMIC POLICIES
1. I renew four recommendations made in my Economic Report of
1966 and not acted upon by the 89th Congress:
—a fair system of charges for users of highways, aviation facilities,
and inland waterways, to improve efficiency in the use of transportation resources, and to reimburse the Federal Government
for a part of its expenditures on facilities which directly benefit
those who use them;
—truth-in-lending legislation, to provide consumers with a full and
clear statement of the true cost of credit;
—stronger regulation of savings and loan holding companies;
—provision of Federal charters for mutual savings banks, to enlarge
and strengthen our system of thrift institutions.
2. To aid the advance of technology on which economic progress depends, I now urge Congressional support for
—a long-overdue modernization of our patent system;
—a large-scale program of research in transportation.
22
3. Total holdings in the Nation's stockpile of strategic and critical
materials now stand at $6.5 billion. Of this amount, $3.4 billion are excess to our defense needs as presently determined.
During the last fiscal year, the Administrator of General Services disposed of excess stockpile materials valued at slightly more than $1 billion
without disruption of the domestic economy or the normal channels of
trade.
The last session of the Congress authorized disposal of excess stockpile
material valued at $782 million. I will ask the Congress for authority
to dispose of additional stockpile excesses, bringing to about $2 billion the
present value of excess stockpile material available for disposal.
I believe that we should relieve taxpayers of the burden of carrying unneeded surplus stocks, and provide businesses and workers with the materials necessary to assure continued high levels of production.
4. The responsibility which we share with the States to ensure that
our banks and thrift institutions are honest, competent, and competitive
is a continuing function demanding constant attention. We must continue to encourage the orderly and progressive development of a financial
system adequate to meet the needs of a growing and dynamic economy.
I urge the Federal Reserve Board, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency, and the Federal Home
Loan Bank Board to continue and to intensify their efforts to coordinate
their regulatory policies and procedures, and to improve their examination methods.
AFTER VIETNAM
Despite all our efforts for an honorable peace in Vietnam, the war
continues. I cannot predict when it will end. Thus our plans must
assume its long duration.
But peace will return—and it could return sooner than we dare expect.
When hostilities do end, we will be faced with a great opportunity,
and a challenge how best to use that opportunity. The resources now
being claimed by the war can be diverted to peaceful uses both at home
and abroad, and can hasten the attainment of the great goals upon which
we have set our sights.
If we keep our eyes firmly fixed on those goals—and if we plan
wisely—we need have no fear that the bridge from war to peace will
exact a wasteful toll of idle resources, human or material.
But when that welcome day of peace arrives, we will need quick adjustments in our economic policies. We must be prepared for those
23
adjustments, ready to act rapidly—both to avoid interruption to our
prosperity and to take full and immediate advantage of our opportunities.
Planning for peace has been an important activity in many executive
agencies. But the effort needs to be stepped up and integrated.
Accordingly, I am instructing the heads of the relevant agencies in the
Executive Branch, under the leadership of the Chairman of the Council
of Economic Advisers, to begin at once a major and coordinated effort
to review our readiness. I have asked them
—to consider possibilities and priorities for tax reduction;
—to prepare, with the Federal Reserve Board, plans for quick
adjustments of monetary and financial policies;
—to determine which high priority programs can be quickly
expanded;
—to determine priorities for the longer range expansion of programs to meet the needs of the American people, both through
new and existing programs;
—to study and evaluate the future direction of Federal financial
support to our States and local governments;
—to examine ways in which the transition to peace can be smoothed
for the workers, companies, and communities now engaged in
supplying our defense needs, and the men released from our
armed forces.
I have directed that initial reports be prepared on all of these and related problems, and that thereafter they be kept continuously up to date.
CONCLUSION
Our task for 1967 is to sustain further sound and rewarding economic
progress while we move toward solutions for the problems we met in
1966. It will require a flexible and delicate balance of economic
policies.
Above all, we must guard against any interruption of our prosperity.
The steady advance of jobs and incomes is our most powerful weapon
in the battle against poverty and discrimination at home. And it undergirds our policy around the world.
Yet we must be equally alert to the dangers of inflation.
In his Economic Report of January 1956, President Eisenhower wrote:
The continuance of general prosperity cannot be taken for granted.
In a high-level economy like ours, neither the threat of inflation nor
the threat of recession can ever be very distant. . . . The only rigid
24
rule we can afford to admit to our minds is the principle that the best
way to fight a recession is to try to prevent it from occurring.
Only 18 months later, the sharpest recession of the entire postwar
period began—which also led to the largest peacetime budget deficit in
our history. Over the same 18 months, both consumer prices and wholesale prices advanced 5J/2 percent—considerably faster than in the 18
months since June 1965.
That history does not invalidate but rather reinforces President Eisenhower's proposition. Neither the threat of inflation nor of recession is
ever distant in a high level economy.
How can we steer between these dangers, and—at the same time—
supply the needs of national defense, strengthen our overseas payments,
relieve the inequities of tight money and high interest rates, maintain
the momentum of social progress, and provide the growth of incomes
which lets each of us move toward fulfilling his private aspirations?
I am confident that we can find such a course. We will continue to
coordinate the tools of monetary and fiscal policy to the common goal—
the sound, balanced, and noninflationary advance of production and incomes. We are steering toward lower interest rates, a better balance
in our economy, a budget and a Social Security program that reflect
national priorities.
There will be surprises in store along the way. We must be prepared
to meet them swiftly and flexibly. And I think we are. The tools of
economic policy are not perfect; but they are far better understood
and accepted—in the Government and in the private community—than
ever before.
We have surely proved over recent years that economic progress
does not need to be interrupted by frequent recessions. And, although
prices have risen faster in the past year and a half than we expected or
wished, we have done better than in most similar periods of our economic
history. And we have done it without burdensome controls on prices or
wages.
The Federal Government cannot do the whole job—or even very
much of it. Production and incomes arise from the strength and skill
of workers, the ingenuity of managements, the willingness of savers to
risk their capital, the genius of inventors and engineers, the patience of
teachers, the devotion of local public servants—the contributions of all
who participate in our economy.
Yet the Federal Government has a role of leadership and a responsibility for coordination.
25
The Congress defined that role in the Employment Act of 1946:
. . . it is the continuing policy and responsibility of the Federal
Government . . .
. . . with the assistance and cooperation of industry, agriculture,
labor, and State and local governments,
to coordinate and utilize all its plans, functions, and resources for
the purpose of creating and maintaining,
in a manner calculated to foster and promote free competitive
enterprise and the general welfare, . . .
. . . useful employment opportunities . . . for those able, willing
and seeking to work,
and to promote maximum employment, production, and purchasing power.
Our economic policies for 1967 respond to that mandate.
January 26, 1967.
26
THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS
27
LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,
Washington, D.C., January 19,1967.
T H E PRESIDENT:
SIR: The Council of Economic Advisers herewith submits its Annual
Report, January 1967, in accordance with Section 4(c) (2) of the Employment Act of 1946.
Respectfully,
240-782 O—67
GARDNER ACKLEY,
Chairman.
JAMES S.
DUESENBERRY
ARTHUR M.
29
OKUN
CONTENTS
Page
CHAPTER 1. EXTENDING THE RECORD OF PROSPERITY
Achievements of an Expanding Economy
Employment Gains
Productivity
Gains in Real Income
The Realization of Economic Potential
Strains and Restraint in a Surging Economy
The Economy in Mid-1965
Spurt in Economic Activity
Moderation in the Pace of Advance
Retrospect
The Pattern of Output
Uneven Shares in Investment
Inventory Investment
Money and Credit
Promoting Expansion, 1961 to 1965
Shift to Restraint
Competition Among Financial Institutions
Actions to Reduce Financial Pressures
Signs of Relaxation
Evaluation of Monetary Restraint
Prospects and Policies for 1967
Fiscal Program for 1967
Economic Outlook
Improving Stabilization Tools Over the Longer Run
Uses of Monetary Policy
Need for Fiscal Flexibility
Appendix: The Federal Budget, National Income Accounts
Basis
CHAPTER 2. PRICES AND WAGES IN 1966
The Recent Price Record
Labor Compensation and Labor Costs
Supply and Demand in the Labor Market
Prices in Major Sectors
Farm Products and Food
Raw Materials
Manufactured Goods
Consumer Services
31
37
38
38
40
41
42
45
45
46
48
49
50
50
52
52
53
54
55
58
59
60
61
61
62
65
65
68
69
72
74
77
78
86
87
89
90
93
2. PRICES AND WAGES IN 1966—Continued
Prices and the Distribution of Real Income
Outlook for Prices
CHAPTER
page
95
97
CHAPTER 3. MAINTAINING PRICE STABILITY AND REDUCING UNEMPLOYMENT
99
Improving U.S. Labor Markets
Composition of the Unemployed
"Frictional" Unemployment
Improving the Operation of Labor Markets
"Structural" Unemployment
Federal Manpower Training
Improving the Performance of Product Markets
Strengthening Competition
Resale Price Maintenance
Restrictions on International Trade
Regulatory Policies
Direct Government Actions Affecting Supply
Wage-Price Policies
The Council's Wage-Price Guideposts
Government Activities to Promote Guidepost Adherence. .
Basic Problems for Wage-Price Policy in 1967
A Wage-Price Policy for 1967
CHAPTER 4. SELECTED USES OF ECONOMIC GROWTH
Private and Public Goods
Consumer Choice
External Effects
Income Maintenance
Poverty and Work
Income Maintenance and the Poor
Toward Improved Income Maintenance for the Poor
Social Security
Education
Value of Education
Trends in Demand and Costs
Health Care
Demand for Medical Care
Cost Factors
Prospects for the Coming Decade
Cities
Elements of the Urban Problem
Meeting the Cities' Problems
Federal, State, and Local Fiscal Relations
Taxation
State and Local Fiscal Problem
Categorical Federal Aid
32
100
101
104
106
107
108
113
113
115
116
116
117
119
120
125
127
128
135
135
136
136
138
138
139
142
142
143
143
146
149
150
152
152
153
154
157
161
161
162
163
CHAPTER 4. SELECTED USES OF ECONOMIC GROWTH—Con.
Federal, State, and Local Fiscal Relations—Continued
General Support Grants
Credit for State Income Taxes
Joint Revenue Collection
Other Issues of Tax Coordination
Conclusion
Page
165
166
166
166
167
CHAPTER 5. GROWTH AND BALANCE IN THE WORLD ECONOMY
170
World Economic Growth in the 1960's
Developed Countries
Less Developed Countries
Trade Policies
U.S. Balance of Payments
Recent Developments
Prospects and Policies for 1967
Balance of Payments Adjustment Policies
Report on the Adjustment Process
U.S. Adjustment Policies
Adjustment Policies of Other Developed Countries
International Monetary Reform
170
171
172
175
177
179
185
187
187
188
191
195
APPENDIXES:
A. Report to the President on the Activities of the Council of
Economic Advisers During 1966
B. Statistical Tables Relating to Income, Employment, and
Production
List of Tables and Charts
Tables
1. Changes in Economic Activity Since 1961
2. Changes in Measures of Income Since 1961
3. Changes in Gross National Product During Two Periods Since
Mid-1965
4. Net Funds Raised by Domestic Nonfinancial Sectors, 1961-66.
5. Relation of Two Measures of Federal Budget Surplus or Deficit,
Calendar Year 1966
6. Changes in Wholesale and Consumer Prices, 1964-66
7. Changes in Wholesale Prices, December 1965 to December 1966.
8. Changes in Consumer Prices, 1960-66
9. Changes in Employment, by Industry, 1960-66
10. Wage Changes in Major Collective Bargaining Situations,
1961-66
11. Changes in Average Hourly Earnings, by Industry, 1960-66....
12. Changes in Compensation, Productivity, and Unit Labor
Cost in the Private Economy Since 1947
13. Manufacturing Capacity Utilization, 1965-66
14. Changes in Consumer Prices for Services During 1966
33
199
207
39
42
47
53
70
75
77
77
79
81
82
83
91
94
Tables
15. Changes in Consumer Prices for Typical Labor-intensive
Services Since 1959
16. Unemployment Rates, by Major Occupation Groups, 1961
and 1966
17. Unemployment, by Age, Sex, and Color, 1966
18. Training Opportunities, Fiscal Years 1966-67
19. The Poor and Their Work Experience, 1965
20. Number of Poor Households and Incidence of Poverty, 1959,
1962, and 1965
21. Costs of Formal Education, 1966-67
22. Earnings of Males, by Years of School Completed and Other
Characteristics, 1959
23. The Nation's Health Budget, 1965
24. Physician and Dental Visits Per Year, by Age and Family
Income, 1963-64
25. Characteristics of Population by Area
26. Federal and State and Local Government Receipts, by Source,
National Income and Product Accounts, 1965
27. Federal and State and Local Government Expenditures, by
Major Function, National Income and Product Accounts,
1965
28. Growth of Federal Aid to State and Local Governments, Fiscal
Years 1930-68
29. Changes in Total and Per Capita Real GNP in OECD and Less
Developed Countries Since 1955
.
30. United States Balance of Payments, 1960-66
31. United States Balance of Payments: Capital Transactions,
1960-66
.*
Charts
1. Gross National Product, Actual and Potential, and Unemployment Rate
2. Selected Shares of Gross National Product
3. Investment and Gross Saving of Nonfinancial Corporations.. .
4. Selected Interest Rates
5. Interest Rate Differentials and Household Security Purchases.
6. Wholesale Prices
7. Consumer Prices
8. Employment in Durable Goods Manufacturing
9. Unit Labor Costs in Manufacturing Since 1948
10. Farm and Food Prices
11. Shares of Gross Corporate Income
12. Unemployment Rates
13. Educational Attainment
34
Page
95
102
102
109
139
140
144
144
149
151
155
162
162
163
171
181
183
43
51
54
56
57
75
76
80
86
88
97
103
147
Charts
Page
14.
15.
16.
17.
150
157
180
194
Age Adjusted Death Rates
Municipal Expenditures, Per Capita
U.S. Balance of International Payments
Interest Rates in Selected Countries
35
Chapter 1
Extending the Record of Prosperity
T
HE UNITED STATES in 1966 enjoyed the benefits of the fullest employment in more than a decade. The unemployment rate reached a
13-year low of 3.9 percent. At that level, demand finally matched supply in
most labor markets, a situation which economists define as essentially "full
employment."
Real incomes of all major groups registered sizable gains. Expansion
continued for the sixth straight year. For the third successive year, growth
exceeded 5}4 percent, a record unparalleled in our postwar experience.
By any standard, then, 1966 was a big year for the economy. Gross national product (GNP) expanded by a record $58 billion in current prices
and reached $740 billion. As in the 2 preceding years, a major advance in
business fixed investment was a key expansionary force. And the rising
requirements of Vietnam ddded $10 billion to defense outlays. State and
local spending and inventory investment also rose strongly.
As a result, 1966 was in some respects too big a year, especially in the early
months. Spurred by the defense buildup, total demand—public and
private— forged ahead at an extraordinarily rapid rate in late 1965 and early
1966. Strains developed in financial markets. Demand outstripped supply
in several sectors which were already near full utilization. As Chapter 2
explains, many of the new orders simply added to backlogs and put upward
pressures on prices. Some of the excess demands were met by imports, reducing the U.S. foreign trade surplus and retarding progress toward equilibrium in the balance of payments, as Chapter 5 indicates.
After years of stimulating demand, policy was called upon to restrain
the economy. The need for restraint was recognized at the start of the
year. Monetary policy assumed a restrictive stance. In anticipation of
large increases in private expenditures and defense outlays, tax policies
were applied to curb private demand. In 1964 and 1965, an expansionary
tax policy had stimulated the economy; but in March 1966, restrictive tax
changes were enacted at the President's request. Excise tax cuts were
postponed, and income tax payments were accelerated. Moreover, the
President's budget program in January stringently held down nondefense
outlays. These measures produced a Federal surplus in the national income accounts budget and a net restrictive fiscal impact in the first half of
1966, despite the strong advance in defense spending.
37
But the magnitude of the task was not fully appreciated at the beginning
of 1966. As private demand and Vietnam requirements exceeded forecasts, policy was adjusted to the new developments. Monetary policy tightened further, causing a major cutback in homebuilding. In September, the
President proposed additional selective fiscal measures to alleviate excessive
demands for funds and for capital goods.
The initial restraining measures, reinforced by the previously enacted rise
in payroll taxes, began to take effect in the spring. By the closing months of
1966, it was clear that the brakes had worked. The economy had shouldered the burden of active hostilities without the need for cumbersome and
inefficient controls and without losing its basic health and stability. It was
shown that policy could work both ways; it could restrain the economy, much
as it had been able to provide stimulus during the preceding 5 years. In
particular, the power of tight money as a tool of restraint—as well as its
uneven impact—was demonstrated beyond any reasonable doubt.
As 1967 opens, inflationary forces set in motion during the period of
overly rapid expansion are still alive, although their strength is waning.
But now there is also a renewed challenge to sustain expansion; any further
slowdown would be undesirable.
A healthy advance of demand in pace with the growth of potential output would permit gradual restoration of price stability. It would also promote a recovery in our foreign trade balance, thereby aiding the pursuit
of equilibrium in the balance of payments. The fiscal program for 1967
is designed to meet these objectives and to assure that the easing of monetary
conditions, presently underway, can be extended.
ACHIEVEMENTS OF AN EXPANDING ECONOMY
Last year's record of economic gains added in length and strength to the
remarkable uninterrupted expansion that began early in 1961 (Table 1).
This advance can be viewed in many dimensions. Prosperity has conferred
its benefits on nearly every sector, industry, and region in almost every year.
EMPLOYMENT GAINS
Of all its facets, the growth of employment may be of greatest significance.
Increasing numbers of Americans have obtained opportunities to earn
secure livelihoods and to contribute to the material welfare of society.
Employment in 1966
Employment gains in 1966 were the largest of any year in the expansion.
Civilian employment increased by 1.9 million, and 400,000 persons were
added to the Armed Forces. The civilian unemployment rate fell from 4.6
percent in 1965 to 3.9 percent in 1966, the lowest since 1953. During the
year, the seasonally adjusted rate remained essentially on a plateau, fluctuating between 3.7 and 4.0 percent. The number of persons unemployed
38
TABLE 1.—Changes in economic activity since 1961
Percentage change per year
Measure of economic activity
1961
to
1966
1961
to
1962
1962
to
1963
1963
to
1964
1964
to
1965
1965
to
19661
Production:
Gross national product, constant prices 2
5.4
Personal consumption expenditures
Business fixed investment
Residential structures
Government purchases of goods and services..
Federal
._
State and local
Industrial production
_
Prices: GNP deflator
6.6
4.0
5.3
5.9
5.4
4.2
3.3
5.2
4.9
9.2
10 2
7.0
9.9
3.5
4.4
4.4
42
2.0
-.8
5.5
5.8
10.6
—.8
1.6
-2.9
6.6
6.0
13.1
—2.0
2.5
5.4
4.9
11.2
-10.8
8.0
10.9
5.0
7.3
7.8
5.1
6.4
8.4
9.0
1.8
1.1
1.3
1.6
1.8
3.0
2.2
3.4
1.8
2.9
1.4
2.0
2.2
2.9
2.6
4.2
2.6
5.1
5.2
9.7
(3)
Employment:
Total civilian employment
Nonagricultural payroll employment
1 Preliminary.
23 Includes change in business inventories and net exports of goods and services, not shown separately.
Less than .05 percent.
Sources: Department of Commerce, Department of Labor, Board of Governors of the Federal Reserve
System, and Council of Economic Advisers.
dropped by 500,000 in 1966. Nearly all groups shared in the reduction,
the only exceptions being nonwhite females in two age groups, 14-19 and 45
years and over. Although employment in both of these groups expanded,
the increase was not enough to keep pace with the rapid growth of these
groups in the labor force.
The expansion in the demand for labor extended to every nonagricultural
sector of the economy. The most remarkable gains were in manufacturing
where the number of jobs rose 1 million from 1965 to 1966. Since most
manufacturing employment consists of. high-productivity, high-wage jobs,
the gain contributed to a major advance in real income. Employment in
trade and services and State and local governments also expanded substantially, rising by about V/2 million workers in 1966.
The mirror image of the rapid increase in nonagricultural jobs was a remarkable decline of 400,000 in agricultural employment in 1966. This
decrease of 8J/4 percent was the largest percentage drop on record, as higherpaying nonfarm job opportunities attracted farmers and hired workers out
of agriculture.
Labor Supply
The labor force expanded by 1.8 million workers last year, nearly 500,000
more than demographic trends alone would have indicated. In particular,
a larger fraction of women and teenagers participated in the labor force.
Low unemployment encourages entry into the labor force. Some people,
especially women and teenagers, who would be interested in working if jobs
were plentiful, do not actively search for jobs when they believe none are
available. At such times, these persons are considered neither as employed
39
nor unemployed, and are not counted in the labor force. When job opportunities improve, they enter the labor force, seeking and frequently finding
jobs. The evidence of 1966 suggests that nearly 500,000 of "hidden
unemployed" or "discouraged workers" entered the labor force. Probably,
additional workers, who did not respond fully to improved job opportunities
last year, will enter the labor market if it remains buoyant.
The Record Since 1961
The number of unemployed today is about 2 million lower than 6 years
ago. Over the same period, nearly 9 million additional Americans have
gained employment. Millions more moved into higher paying, more secure,
and better jobs, and out of declining areas and low-wage industries. The
benefits of full employment have extended far beyond the important gains
in real income and material welfare. By reducing poverty and hardship, the
opportunities for productive employment have contributed to human dignity
and self-esteem and to freedom of choice.
The decline in unemployment in a vigorous and buoyant economy has
changed the diagnoses and the proposed remedies for our labor market problems. Allegations that a substantial fraction of the labor force lacks the
motivation to work have been refuted by the facts. Proposals to cut unemployment by artificially shortening the workweek, or by instituting practices
deliberately designed to hold down productivity, are no longer seriously
advanced.
The marked decline in unemployment in the past 6 years has been shared
by nearly all groups. In some instances, improvement has been dramatic.
Only one-third as many Americans were unemployed for 15 consecutive
weeks or longer in 1966 as in 1961. Over the same period, the unemployment rates for nonwhite adult males, blue collar workers, and married men
fell by more than half.
Many of the previously hard core depressed areas are no longer suffering
from high unemployment. In early 1961, 101 of the Nation's 150 major
labor market areas were classified as areas of substantial unemployment, with
rates in excess of 6 percent. Today, there are only 8 labor market areas in
that category. There are now 66 areas that have unemployment rates of less
than 3 percent; for most of 1961, there were none.
Of course, some groups have gained less than others. Unemployment
remains high among nonwhites, teenagers, and, especially among workers
with few skills and little training. As Chapter 3 indicates, inexperience,
inadequate education, and racial discrimination unfortunately penalize these
groups, placing their members at the end of all too many hiring lines.
PRODUCTIVITY
Productivity increases during the expansion have been excellent. The
slow growth in the number of adult male workers was often cited as a reason
for expecting bottlenecks in the labor market and a sluggish productivity
40
performance during the expansion. However, from 1961 to 1966, the average annual growth of private output per man-hour was 3.5 percent, exceeding the long-term trend of a little over 3 percent a year.
One factor making for good productivity performance in recent years has
been the high level of business investment expenditures. As a result, capital
has not been a bottleneck to the expansion of production and employment
in most areas and industries. Moreover, high investment rates have helped
to modernize the capital stock and thereby speed technological progress.
In large part, however, the above-normal growth of productivity is typical
of economic recoveries. A slack economy does not make full use of its
capital stock or overhead labor. As activity expands, both are utilized more
efficiently and productivity increases. But this cannot go on indefinitely.
In 1965 and 1966, average use of plant and equipment approached "preferred" rates, and overhead labor had to be expanded. As a result of these
factors and need for major, rapid adjustments in the composition of
employment, growth of productivity slowed in 1965 and 1966 to just under
3 percent, slightly below the long-term trend.
GAINS IN REAL INCOME
Advances in employment and productivity have generated unprecedented
gains in the real income and the standard of living of the American people.
Farmers, wage earners, businessmen, and professional workers have all
shared in the impressive advance. Real disposable income per capita—the
best single measure of consumer welfare—has risen by 24 percent over the
past 6 years, matching the increase in the preceding 13 years.
Gains have been particularly rapid in recent years. In 1964 and 1965,
real disposable income per capita increased by 5 percent a year—the equivalent of more than 2 extra weekly paychecks annually. Despite the disturbing rise in consumer prices in 1966, real disposable income per capita continued to grow strongly—by Zl/i percent. The higher incomes of 1966
included a 12 percent increase in social insurance transfer payments,
which aided some of the needier groups.
Since 1961, there have been impressive advances in each type of income
as well as in total income, as shown in Table 2. Through 1965, the
growth of corporate profits outpaced GNP and most other types of income.
In 1966, however, profits rose in line with GNP and less rapidly than employee compensation.
The full story of the welfare gains from economic expansion cannot be
conveyed by any array of statistics. Other data—such as the rapid growth
in the number of families owning durable goods and the greater percentage
of families enjoying adequate diets and medical facilities—could be presented to document various trends. But they all add up to the single story
TABLE 2.—Changes in measures of income since 1961
Percentage change
per year»
Measure of income
1965
1961
19661
1961
to
1966
1965
to
1966
Billions of dollars
Compensation of employees
Corporate profits:
Before taxes..
After taxes
Disposable personal income:
Current prices
1958 prices
302.6
392.9
433.3
7.4
10.3
50.3
27.2
75.7
44.5
81.8
48.1
10.2
12.1
8.1
8.1
364.4
350.7
469.1
430.8
505.3
451.5
6.8
5.2
7.7
4.8
4,955
4,955
7.9
6.1
10.3
7.0
Dollars
Farm income per farm:
Current prices
1966prices
3,389
3,684
4,493
4,632
» Preliminary.
Sources: Department of Commerce, Department of Agriculture, and Council of Economic Advisers.
that sustained prosperity means more comfort, more freedom, and more
security for the overwhelming majority of Americans.
THE REALIZATION OF ECONOMIC POTENTIAL
A major economic accomplishment of 1966 is that the United States made
essentially full use of its productive potential. Gone were the chronic underutilization of resources, general excess supply in labor markets, and wastefully
idle industrial capacity that had blemished the performance of the economy
for a decade. Because of the excessive unemployment and idle capital in
previous years, the Nation sacrificed the opportunity to consume and invest a
large amount of the output that it was capable of producing. At the trough
of the recession in the first quarter of 1961, the "gap" between actual and
potential GNP amounted to $57 billion (1966 prices). From 1958 to 1965,
the cumulative gap totaled $260 billion (Chart 1).
Five years ago, when unemployment was 6 percent of the labor force, there
was clearly an excess supply of labor. Nobody could be sure where balance
between supply and demand would be reached. The Council of Economic
Advisers, among others, judged that an unemployment rate near 4 percent
would (with the existing structure of labor markets) yield approximate balance between the supply and demand for labor. Other experts argued,
however, that the economy would run into substantial and significant labor
bottlenecks when unemployment fell to 5 percent. Another group contended optimistically that a sufficient expansion of aggregate demand might
push unemployment down as low as 3 percent without creating excess demand pressures. The experience of the past year provides a partial answer,
suggesting that the 4 percent judgment was nearest to the mark. In 1966,
42
Chart 1
Gross National Product, Actual and Potential,
and Unemployment Rate
BILLIONS OF DOLLARS* (ratio scale)
700
GROSS NATIONAL PRODUCT
IN 1958 PRICES
650
600
550
POTENTIAL-*/
\
500
FACTUAL*
450
400
I
I
1956
I
I
1958
1
1
I960
I
1962
I
I
1964
I
1966
PERCENT
PERCENT
•
6NP GAP AS PERCENT OF POTENTIAL (Left scab)
• — • UNEMPLOYMENT RATE-2/(Right scab)
12
^
6
rf
fc\
0
-6
1956
1958
1960
1962
1964
1966
•SEASONALLY ADJUSTED ANNUAL RATES.
J/TREND LINE OF y/i% THROUGH MIDDLE OF 1955 TO 1962 IV, 3%% FROM 1962 IV TO 1965 IV, AND 4%*
FROM 1965 IV TO 1966 IV.
^UNEMPLOYMENT AS PERCENT OF CIVILIAN LABOR FORCE; SEASONALLY ADJUSTED.
SOURCES: DEPARTMENT OF COMMERCE, DEPARTMENT OF LABOR, AND COUNCIL OF ECONOMIC
ADVISERS.
43
labor markets were generally in balance, although there were shortages of
certain labor skills and a few remaining pockets of unemployment. The
areas of shortages seemed largely to reflect the speed of the economy's
advance rather than the level of utilization attained. With the return of
a more moderate advance, those pressures have begun to subside.
The economy caught up with its economic potential in 1966. But total
demand must continue to rise to keep pace with a growing potential GNP.
Indeed, primarily as a result of faster growth of the labor force, potential
output itself has been accelerating somewhat. From the mid-1950's into
the early 1960's, it advanced by about 3 J/2 percent a year. More recently,
the rate of growth moved up to 3 % percent a year; and at present, it seems
to be advancing at an annual rate of about 4 percent.
The growth of potential stems from three principal determinants: the
rise in the labor force; changes in annual average hours worked per man;
and the growth of average output per man-hour—that is, of productivity.
Because of the low birth rates during the depression of the 1930's and World
War II, the working-age population expanded slowly in the 1950's. However, high postwar birth rates have recently led to accelerated growth of
the labor force from 1*4 percent annually in earlier years to 1 ^4 percent.
Under steady full employment conditions, longer vacations and shorter
workweeks would lead to an annual decline of about *4 percent in hours
worked per man, thereby reducing the growth in total man-hours to about
15/2 percent a year.
Labor productivity in the private economy has grown at a trend rate
somewhat over 3 percent a year during the postwar period. But, since the
method of measuring productivity of Government workers ignores any
change in their efficiency, the trend rate of increase in output per man-hour
in the total economy is just over 2}4 percent a year. Thus, with GNP per
man-hour advancing at that rate and total man-hours at about 1 Y/i percent,
potential output advances at 4 percent.
The Nation's economic potential may grow even more rapidly in the
future if the trend advance of productivity quickens. Two recent developments, in particular, could speed the growth of productivity. First, the
current investment boom has led to a significant modernization of our
capital stock. About one-third of manufacturing equipment in use today
is less than 3 years old, compared with one-fourth at the beginning of 1964.
When much of our capital stock is new, the production process will incorporate many of the latest technological advances. However, new investment
does not confer its productivity benefits immediately. Projects must first
be completed and, even then, there are important start-up and break-in
costs until new plant and equipment work smoothly. Hence, much of the
productivity bonus of the recent capital boom may still lie ahead. Second,
the use of active manpower policies can make a significant contribution to
the improvement of the quality of the labor force, and thus to productivity.
44
Manpower policies may also increase growth rates over the long run by
lowering the level of unemployment consistent with price stability. In fact,
significant further reductions in unemployment will depend primarily on
manpower programs, particularly those aimed at disadvantaged groups, as
discussed in Chapter 3.
The closing of the gap in 1966 was a great achievement. But it necessarily
means that the 5J/2 percent rate of advance of real output registered in recent
years cannot be matched in the near future. That rapid expansion was
possible because idle resources were ready and able to make a productive
contribution. The growth of employment outpaced the expansion of the
civilian labor force; many new employees were put to work on previously
idle or underused machines; improved utilization rates yielded a bonus of
extra gains in productivity. But now that full employment has been
essentially attained, output cannot continue to rise faster than productive
capacity.
STRAINS AND RESTRAINT IN A SURGING ECONOMY
The major theme of recent economic developments is the continuation
of progress. But there is also a secondary theme of problems and imbalances,
many of which can be traced back to mid-1965, when the sudden increase
in defense requirements for Vietnam led to a marked acceleration in economic activity. By the time measures of fiscal and monetary restraint took
hold and slowed down the economy, significant problems had developed—an
interruption of price stability, a deterioration in international trade performance, acute pressures in financial markets, and sharply divergent movements among the various sectors of the economy.
THE ECONOMY IN MID-1965
As of mid-1965, the economy was advancing steadily and healthily toward
full employment. GNP had risen by $11 billion a quarter, on the average,
for the preceding 2 years; the annual rate of real growth over that period
had been 5}4 percent. Unemployment was down to 4^2 percent of the
civilian labor force, and the average operating rate of manufacturing capacity
was up to 89 percent. The price record showed few blemishes: average
consumer prices in July 1965 were only 6 percent higher than they had been
in early 1961, and prices of nonfood commodities had risen by only 3 percent.
Prices of manufactured finished products at wholesale had advanced by
1 percent in 5 years.
Expansionary fiscal policy had contributed actively to the record of 52
months of advance. The reform of depreciation rules and the investment
tax credit, both initiated in 1962, encouraged business to expand and
modernize plant and equipment. Furthermore, as a result of these measures and the much larger tax reductions granted by the Revenue Act of
240-782 0—67
45
1964, both corporate and individual income recipients were enjoying an
average reduction of one-fifth in their tax liabilities. Monetary policy continued to meet the credit needs of a brisk expansion and thereby contributed
to the relative stability of long-term interest rates that was unusual for a
period of rapid economic advance. Meanwhile, Federal spending on goods
and services was essentially level after mid-1962. As a share of the growing
GNP, defense purchases fell steadily from 9.2 percent in 1962 to a postKorean low of 7.3 percent by mid-1965. Defense spending was clearly
not the fuel that was propelling the economy toward full employment. But
neither was the decline in the defense share permitted to retard the growth
of total demand; some economic stimulus was provided by spending on new
Federal civilian programs, and major reductions in taxes encouraged private
spending.
New stimulative policies were being prepared in the spring of 1965 to
complete the advance to full employment. Congress enacted a major phased
reduction of excise taxes, in line with the President's proposals, and its first
stage took effect in June 1965, cutting taxes by $ 1 % billion (annual rate).
A liberalization of social insurance benefits, designed to help the aged, was
enacted to take effect retroactively. The larger benefits were to be financed
by a payroll tax increase at the beginning of 1966. Meanwhile, the liberalization of benefits was expected to give the economy a significant stimulus in
the fall of 1965 when an anticipated liquidation of steel inventories might
otherwise have threatened a slowdown. The retroactive portion, which was
disbursed in September, amounted to $900 million. Thereafter, annual
benefits were raised by about $2 billion.
SPURT IN ECONOMIC ACTIVITY
The economic environment was significantly changed by the expansion
of defense requirements. On July 28, 1965, the President requested additional funds for defense and indicated that further increases would be
required in January. Military outlays, at an annual rate, rose by nearly
$2 billion a quarter in late 1965 and early 1966 (Table 3). Defense orders
expanded very rapidly, spurring demands for labor and inventories by
contractors.
Yet the defense buildup itself was not enough to account directly for the
acceleration in the over-all economic advance. Rather, it reinforced the
previously planned fiscal stimuli and the forward momentum of a strong
economy close to full employment. Furthermore, the expansion of defense
spending contributed to a significant change in the climate of opinion.
The Vietnam buildup virtually assured American businessmen that no economic reverse would occur in the near future. The impact on business
attitudes was intensified by unwarranted fears that the Vietnam conflict
might have consequences like those of the Korean conflict: direct controls,
excess profits taxes, and a huge jump in prices of raw materials.
4e
TABLE 3.—Changes in gross national product during two periods since mid-1965
[Billions of dollars, seasonally adjusted annual rates]
Change
Expenditure category
1965 II
to
1966 I
Gross national product
Personal consumption expenditures
Durable goods
Nondurable goods
_
Services
_
Gross private domestic investment
Fixed investment
Businessfixedinvestment 2
Residential structures
Change in business inventories..
_.
_
_
__.
_.
_
Net exports of goods and services
Government purchases of goods and services
Federal.
National defense..
_
_
Other_
State and local. _
1966 I
to
1966 I V i
48.3
37.9
28.8
18.8
5.9
12.5
10.4
-.2
6.8
12.2
10.8
3.5
9.6
9.1
.5
1.3
-2.0
-6.7
-2.2
-1.2
10.7
16.9
10.6
10.9
6.3
5.5
.9
4.4
4.7
5.5
-.4
6.3
1 Preliminary.
2 Nonresidential structures and producers' durable equipment.
NOTE.—Detail will not necessarily add to total because of rounding.
Sources: Department of Commerce and Council of Economic Advisers,
The increase in defense spending swelled an already strongly rising
tide of business investment expenditures. From the second quarter of 1965
to the first quarter of 1966, business spending for new structures and equipment rose by $9 billion. Defense, investment, and social security liberalization, in combination, speeded the growth of disposable income. Consumer
spending responded strongly, growing by $29 billion over this three-quarter
interval. All in all, GNP advanced at an average of $16 billion a quarter.
Real output grew at a phenomenal annual rate of 7.2 percent, and industrial
production rose at an annual rate of 9.7 percent.
Unemployment fell from 4.7 percent to 3.8 percent of the civilian labor
force during this period. New orders for durable manufactured goods rose
markedly (12 percent), with orders for electrical machinery (20 percent)
and defense products (19 percent) increasing especially rapidly.
The surge in demand for goods and labor created pressures on prices
in many areas. From October 1965 to July 1966, the annual rate of advance for industrial wholesale prices stepped-up to 3 percent. Prices of
industrial crude materials moved sharply upward—at an annual rate of 8
percent from October to April. At the consumer level, demand pressures
raised prices of services and nonfood commodities and combined with special supply factors in agriculture to push up food prices. These price movements and their consequences are discussed in detail in Chapter 2. All in
all, the economy exceeded reasonable speed limits in the period from mid1965 through the first quarter of 1966.
47
MODERATION IN THE PACE OF ADVANCE
After years of providing stimulus to the economy, policy changed direction at the turn of the year. Monetary policy accounted for a major share
of the restraint during most of 1966. As described in detail below, the
{Federal Reserve restrained the growth of credit supply in the face of extremely strong demands for borrowing by business. With intense competition for funds, interest rates rose sharply. Institutions which supply mortgage funds to the homebuilding industry lost deposits both to the commercial banks and to the market for new corporate securities. As a result,
residential construction was starved for funds, and the sharp decline in this
sector was one of the principal moderating influences during the second
half of 1966.
Fiscal policy also responded effectively. Although the special defense costs
necessarily swelled Federal outlays and were highly stimulative, restrictive actions were taken in other areas. Increases in nondefense purchases
were held to $300 million from 1965 to 1966. Several restrictive tax measures
were proposed in January 1966, and were enacted in mid-March. These
included a reinstatement of some of the earlier excise tax reduction, restoring
about $1 billion to the annual rate of Federal revenues; and a system of graduated withholding for individual income taxes that drew off $1J4 billion (annual rate) from disposable income beginning in May. These new measures
followed the $6 billion increase in payroll taxes that took effect at the start of
1966. In addition, revenues were increased in the spring by unusually large
payments on 1965 income tax liabilities.
The national income accounts budget for the Federal sector shifted from
a deficit at an annual rate of $1^2 billion in the second half of 1965 to a
surplus at an annual rate of $3 billion in the first half of 1966. (As explained
in the Appendix to this Chapter, Federal fiscal policy is discussed throughout
this Report in terms of the national income accounts budget.)
These monetary and fiscal actions helped to bring the rate of over-all
economic expansion in line with the growth of capacity. After the first
quarter of 1966, gains in GNP slowed to an average of $12^2 billion a
quarter, no longer outstripping the growth of potential GNP. The unemployment rate leveled off, as employment gains essentially matched the
growth of the labor force. Manufacturing output actually rose less than
the growth of manufacturing capacity, and average operating rates at yearend were below the 91 percent that had been reached in the first quarter.
The change of pace was first clearly noticeable in the spring. Fiscal
restraint appreciably slowed the growth of disposable income in the second
quarter and contributed to a marked slowdown in consumer spending.
During the summer, consumer demand perked up again. But homebuilding, which had declined moderately in the second quarter, was hit hard by
the shortage of mortgage financing and took a sharp plunge, holding down
the increase in economic activity.
4s
Business demand for capital goods, on the other hand, continued to expand rapidly during the spring and summer. Although tight money, rising
costs of machinery and construction, declining prices of common stock, and
appeals for voluntary restraint had moderating effects in particular firms
and industries, total business investment forged ahead. In August, both
the Commerce-SEC anticipations survey and the National Industrial Conference Board appropriations survey confirmed the vigor of the capital boom.
Commercial construction was the only type of business investment that
showed weakness; it was restrained by the shortage of mortgage funds.
The capital boom, in fact, was proving too vigorous. In view of the
growing backlogs of orders, shortages of certain types of skilled labor, rising
prices in capital goods industries, and acute pressures of business credit demands on financial markets, there was a clear need to moderate investment
demand. On September 8, the President asked Congress to suspend,
until January 1, 1968, the 7 percent tax credit on investment in machinery
and equipment and accelerated depreciation provisions on new buildings. At the same time, he initiated a program to reduce nondefense
spending.
The Commerce-SEC survey in November showed that only moderate
further increases in plant and equipment spending were planned through
the second quarter of 1967. It also revealed that the actual increase in
capital outlays in the third quarter was somewhat smaller than the planned
advance reported in August; this was the first downward revision of plans
in 3 years. The results of the survey no doubt reflected several factors, including the moderation of economic expansion, the financial pressures on
business, and the suspension of the investment tax incentives. Even though
orders for machinery and equipment continued to outrun shipments through
December, there were favorable prospects that the pressures of excess demand on capital goods industries would be lessened in the months ahead.
RETROSPECT
Despite the moderation after the first quarter, expansion for 1966 was
more rapid than virtually anyone expected at the outset. At the time it
was presented last January, the Council's forecast that GNP in 1966 would
rise strongly by $46^4 billion was somewhat above the typical forecast of
private economists. Yet it turned out to be $12 billion too low. In part, the
underestimate reflected the difference between the predicted real growth
of nearly 5 percent and the actual rate of 5*4 percent. In addition, the
over-all price deflator rose by 3 percent—about 1 percentage point more
than projected.
The primary sources of the underestimate were in Federal defense purchases and business fixed investment. While both had been expected to
be key sources of strength, they were even stronger than anticipated. As
the prospective duration of Vietnam hostilities and the intensity of our military commitment exceeded those assumed in the budget, Federal spending
49
for defense in the calendar year ran above last January's estimate by $4
billion. Spurred in part by defense outlays, expenditures on plant and
equipment topped the Council's expectations by $2 billion to $3 billion. State
and local purchases and inventory investment also were above the projections,
while homebuilding and net exports fell below the estimates.
As it became clear that public and private demand was exceeding
expectations, the desirability of further increases in taxes came under public
discussion. Continuing and careful consideration of this issue within the
Administration, sharpened by the increasing strain on financial markets, led
to the fiscal program of September 8. In retrospect it is clear that, after
March, monetary and fiscal policy in combination provided adequate total
restraint. It may be debated whether a better balance of demands and
policies would have been achieved if a program of additional fiscal restraint
had been undertaken earlier in order to relieve the pressure on monetary
policy. It may also be argued that the capital boom could have been cooled
off sooner if the investment tax credit had been suspended earlier in the
year. The question of whether a different timing or different magnitude
of fiscal actions might have produced a more favorable balance in 1966 will
long interest and challenge analysts of economic policy. But the main lesson
is clear from the record: economic policy was used effectively to restrain
the economy during 1966, much as it had been used during the preceding
5 years to stimulate demand.
THE PATTERN OF OUTPUT
In contrast to the reassuring balance of the expansion from 1961 to 1965,
the advance in 1966 was uncomfortably uneven among sectors. The nature
of these imbalances is illustrated by Chart 2, which shows the shares of
GNP absorbed by various types of expenditures since 1954.
It is striking that the portion of GNP devoted to Federal purchases in
1966 was much the same as in earlier years. Indeed, despite the sharp
growth of defense outlays, Federal expenditures represented a smaller share
of national product than in any other post-Korean year except 1964 and
1965. The share of defense purchases was 8.1 percent, also lower than in
any year from 1954 to 1963. State and local government purchases continued their secular rise as a share of GNP.
The share of private domestic and foreign investment in 1966, 16 percent
of GNP, was quite typical for a full-employment year. Private investment
exceeded private saving at full employment, leaving room for moderate
surpluses in government budgets (national income accounts basis).
UNEVEN SHARES IN INVESTMENT
Although the share of investment in GNP was normal, the pattern of the
major investment components was unusual when compared with other post
50
Chart 2
Selected Shares of Gross National Product
PERCENT O F G N P
DOMESTIC INVESTMENT
GOVERNMENT PURCHASES
AND NET EXPORTS
14
FEDERAL PURCHASES
X
12
BUSINESS FIXED
INVESTMENT
STATE AND LOCAL
PURCHASES
RESIDENTIAL STRUCTURES
CHANGE IN
BUSINESS
INVENTORIES
NET EXPORTS
-2
I
1954 56
58
60
62
64
66
1954 56
58
60
I
I
62
I
64
66
SOURCE: DEPARTMENT OF COMMERCE.
Korean years. Business fixed investment was at a record high of 10.7 percent of GNP, surpassing its previous peak of 10.5 percent in 1957 and considerably above its post-Korean average of 9.8 percent. Because of the
scarcity of mortgage funds, housing starts fell steadily from an average of
1.5 million units in the first quarter of the year to 1.0 million in the fourth;
at 3.5 percent, the share of residential construction was at a post-Korean low.
Inventory investment, at 1.5 percent, matched its previous post-Korean high
of 1955. Excess demand at home generated a spurt in demand for goods
from abroad, pulling down the share of net exports to the lowest level since
1959.
The record share of business fixed investment in 1966 occurred despite the
need for a much greater volume of external financing at unusually high
borrowing costs. Incentives to invest were provided by a continuation of
the forces that had spurred business to expand and modernize facilities in
1964 and 1965: growing sales, orders, and profits, and high operating rates.
These were further strengthened by the rise in defense spending.
INVENTORY INVESTMENT
A high rate of inventory investment in relation to GNP during 1966 reflected many of the same factors that stimulated business fixed investment.
Inventory-sales ratios generally crept up after years of stability or decline.
Nonfarm stocks expanded by 8 percent over the year, considerably above
the rate of growth of real output or sales. Inventories rose especially
rapidly in durable goods manufacturing; these stocks grew by nearly $7 billion during the first 11 months of 1966. Within durables, goods-in-process
inventories rose by about $4 billion over the period, reflecting, in part, the
build-up of defense and business equipment in the pipeline.
The long production times that are essential for many durable goods were
largely responsible for the growth of stocks of goods-in-process. From the
time a company begins to build an airplane or a machine, it may take 6
months or a year to produce a finished good and complete a shipment.
While the piece of equipment is being fabricated, the value of the completed
portion shows up in inventories of goods-in-process. Thus, if orders rise
sharply for items with long production times, inventories grow; the ratio
of inventories to shipments also tends to increase until shipments can catch
up.
In late 1965 and in 1966, orders for business equipment and defense hardgoods rose sharply, and shipments did not keep pace. The economic impact
of this step-up in orders was not fully reflected in Government purchases or
in business fixed investment; some of it showed up as inventory investment.
The impact of defense orders on inventories cannot be quantified precisely.
But it can be estimated by two approaches: one uses data on progress payments made by the Department of Defense, and the other rests mainly on
the statistics of defense-oriented industries. Both approaches suggest that,
from the beginning of the fourth quarter of 1965 through the third quarter
of 1966, defense contractors and their suppliers added about $2 billion to
their stocks as a result of defense orders.
MONEY AND CREDIT
The composition of output and the pace of advance last year were much
influenced by financial and credit developments. In 1966, monetary policy
moved to the center of the stage. Previously, it had played a significant
role in support of an active fiscal policy to stimulate economic expansion.
52
PROMOTING EXPANSION, 1961 TO 1965
From 1961 through 1965, Federal Reserve policy permitted a sufficient
expansion of credit to accommodate expanding demands for funds at only
moderately rising interest rates. As in any period of economic advance,
greatly increased credit was demanded by consumers to purchase homes and
durable goods, businesses to finance investment in plant and equipment and
inventories, and State and local authorities to support their expenditures.
In 1965, the net flow of new credit to these groups was $66 billion—nearly
double the amount in 1961 (Table 4).
The pattern of credit flows had several outstanding characteristics. The
volume of corporate security issues actually declined; with the very rapid
growth of corporate profits, internal funds nearly kept pace with the expansion of business investment until mid-1965 (Chart 3). Also, the
volume of security issues was held down by the ready availability of bank
loans to business.
The share of commercial banks in total lending rose by nearly one-third
from 1961 to 1965, while the share of thrift institutions (savings and loan
associations and mutual savings banks) declined by nearly one-third. Following a series of upward adjustments by regulatory authorities in the maximum interest rates allowed on time and savings deposits, commercial banks
competed aggressively for time deposits and acquired funds to meet growing
demands for loans. They developed and made effective use of some new
financial instruments, especially the negotiable certificate of deposit (CD).
Because these certificates, unlike ordinary time deposits, can be readily
sold, holders can earn interest on idle deposits without sacrificing liquidity.
These innovations helped to hold down long-term interest rates in the face of
TABLE 4.—Net funds raised by domestic nonfinancial sectors, 1961-66
[Billions of dollars]
1966
Type of credit
1961
1962
1963
1964
1965
Total i
First
half
Second
half*
Seasonally adjusted annual
rates
Private domestic nonfinancial sectors
Consumer credit
Bank loans 2
State and local obligations
Corporate securities
Home mortgages 8
Other*
U.S. Government
33.9
44.2
50.2
55.6
66.0
58.7
70.0
47.8
1.7
2.2
4.9
7.1
11.4
6.7
5.5
4.8
5.0
5.1
13.0
10.9
7.3
5.4
6.7
3.6
15.2
12.0
8.0
6.5
5.9
5.4
15.7
14.2
9.4
13.6
7.4
5.4
16.0
14.2
7.0
7.4
5.7
10.9
12.3
15.4
7.8
11.4
6.4
13.6
14.4
16.1
6.2
3.7
5.1
8.2
10.2
14.6
7.7
7.9
5.0
7.0
3.5
7.4
9.0
5.8
1 Preliminary estimates.
2 Bank loans not elsewhere classified.
3
Mortgages on 1- to 4-family homes.
4
Acceptances, commercial and finance company paper, U.S. Government loans, and mortgages on multifamily dwellings and on farm and commercial land and buildings.
Source: Board of Governors of the Federal Reserve System.
53
Chart 3
Investment and Gross Saving of
Nonfinancial Corporations
BILLIONS OF DOLLARS
SEASONALLY ADJUSTED ANNUAL RATES
80
60
~ ~
n
CROSS JAVWG2/
i i i 1 1i i 1 1i i 1 1i i 1 1i i 1 1i i r
1961
1962
1963
1964
1965
1966
J/FIXED INVESTMENT PLUS CHANGE IN INVENTORIES.
2/CORPORATE PROFITS AND INVENTORY VALUATION ADJUSTMENT, LESS PROFITS TAX ACCRUALS AND
DIVIDEND PAYMENTS, PLUS CAPITAL CONSUMPTION ALLOWANCES,
SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
growing credit demands, and supported continued expansion of economic
activity.
SHIFT TO RESTRAINT
Conditions changed dramatically in the closing months of 1965. The
rapid rise of business investment far exceeded the growth of corporate
cash flow. This widening gap, shown in Chart 3, was the major driving force behind the rising demand for credit that continued into the first
half of 1966. Given the intensity of this demand, monetary policy could
have prevented an increase in interest rates and a tightening of credit availability only by creating bank reserves at an extremely rapid rate. Such a
policy would have contributed to inflation by removing financial limitations
on the surging demands for goods and services. Under the circumstances,
it was desirable to curb the growth of credit. The appropriate degree of
restraint had to take into account the volume of pressure on financial
54
markets and the magnitude of the upward movement in interest rates that
could be tolerated.
In December 1965, the Federal Reserve signaled the forthcoming tightening of monetary policy by increasing the discount rate from 4 percent to
4J4 percent. At the same time, the maximum allowable interest rate on
time deposits of commercial banks was raised from 4^4 to 5}4 percent.
During the first half of 1966, business demands for credit rose rapidly. Supplies of credit did not keep pace, as the Federal Reserve held the expansion
in bank reserves somewhat below that of 1965, when credit demands were
rising less strongly.
In order to maintain the good will of valued business customers, banks
made every effort to satisfy the mounting demands for business loans. They
obtained additional loanable funds by increasing their borrowings from the
Federal Reserve, reducing their investments in securities, bringing back
funds from their foreign branches, and attracting additional time deposits
through higher interest rates. As a result, they were able to expand business
loans at an annual rate of about 20 percent in the first half of 1966, even more
rapidly than the 18 percent increase in 1965.
Corporate demands for credit were so strong that even this extraordinary
increase in bank lending provided less than half of the external funds
raised by corporations. To finance their investment expenditures, firms began to issue large amounts of new securities. Sales of securities by the
Government, particularly Government agencies, were also large during
this period.
The large volume of corporate and Government securities could be sold
only at much higher yields. After November 1965 interest rates on highgrade securities increased sharply (Chart 4). As in the past, the rise in
market yields, relative to the rates paid on deposits, permitted security issues
to absorb a larger proportion of total household lending (Chart 5). As in
other periods of tight money and rising security yields, funds deposited in
financial institutions declined relative to funds provided directly to the
security markets.
COMPETITION AMONG FINANCIAL INSTITUTIONS
Commercial banks competed strongly and rather successfully to hold
their own as the total flow of funds into depository institutions declined.
By raising yields on CD's, the banks attracted corporate time deposits in
large volume. In addition, through the expanded use of savings certificates and other types of nonnegotiable certificates of deposit, they induced
an increasing flow of household time deposits.
The impact of the increased direct flow of savings to security markets
fell heavily on the thrift institutions. Thrift institutions continued to receive
the deposits of the steady savers who represent a major part of their clientele.
55
Chart 4
Selected Interest Rates
PERCENT
8
-
CONVENTIONAL MORTGAGES
ON HOMESV
J
^
™™ m—^
^
••••» •" « ^ ^
mmm
^
«.* *
PRIME BANK
RATE
CORPORATE Aao BONDS
(New Issues)
\
/V
3-MONTH TREASURY B I L L S
(New Issues)
I l i l t . I ; 1I , . 1 .•l u l l . 1 , ,1 •I I M l , , I . H
1959
1960
1961
1962
1963
1964
1965
1966
Jl/NEW AND EXISTING HOMES THROUGH 1960 I, AND NEW HOMES ONLY THEREAFTER.
NOTE.-DATA PLOTTED ARE QUARTERLY THROUGH 1963, MONTHLY THEREAFTER.
SOURCES: FEDERAL HOUSING ADMINISTRATION, BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM, MOODY'S INVESTORS SERVICE, AND TREASURY DEPARTMENT
Indeed, the gross inflow to savings and loan associations actually was larger
in 1966 than in 1965. But, funds of interest-sensitive depositors (so-called
"hot money") were withdrawn and invested in higher-yielding securities.
These withdrawals dominated the net inflow. By mid-1966, the net inflow
had fallen to a rate less than one-fourth that of 1965.
Unlike banks, thrift institutions were unable to prevent withdrawals effectively by raising interest rates paid on deposits. Because the portfolios of
these institutions were invested primarily in mortgages (assets with a fixed
yield and a very slow turnover), they had relatively little flexibility in adjusting the rates paid on ordinary deposits. Nor have thrift institutions made
effective use of special savings certificates, which—like bank CD's—offer
Chart 5
Interest Rate Differentials and Household
Security Purchases
PERCENTAGE POINTS
PERCENT
2.00 |
1100
EXCESS OF. CORPORATE Aaa RATE OVER
TIME AND SAVINGS RATE-U
(Left scale)
1.50
75
1.00
50
.50
25
HOUSEHOLD INVESTMENT IN SECURITIES AS
PERCENT OF TOTAL HOUSEHOLD GROSS
FINANCIAL. INVESTMENT
(Right scale)
-50
I
1952
I
1954
I
I
1956
I
I
I
1958
I
1960
I
I
1962
I
I
1964
1966
-25
-^EXCESS OF CORPORATE Aaa BOND RATE (NEW ISSUES) OVER WEIGHTED AVERAGE OF INTEREST
RATES PAID ON TIME AND SAVINGS DEPOSITS AND SHARE ACCOUNTS AT COMMERCIAL BANKS
AND SAVINGS INSTITUTIONS.
SOURCES: BOARD. OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, FEDERAL DEPOSIT
INSURANCE CORPORATION, FEDERAL HOME LOAN BANK BOARD, AND COUNCIL OF
ECONOMIC ADVISERS.
higher interest rates marginally without increasing the yield to all depositors.
If they had tried to remain competitive with banks by raising the rates paid
on all deposits, their expenses would have risen much more rapidly than
their income.
With a greatly reduced inflow of funds, thrift institutions had to curtail
mortgage lending sharply in 1966. Net acquisitions of residential mortgages
decreased by 25 percent in the first two quarters of 1966. This reduction
occurred despite significant Government aid: the Federal National Mortgage
Association purchased nearly $4/ 2 billion of mortgages (annual rate) during
the period, and the Home Loan Banks provided funds to offset deposit losses
of savings and loan associations. In the third quarter, only $9.4 billion (annual rate) went into residential mortgages—more than 40 percent below the
amount provided a year earlier. The net flow into home mortgages from
savings and loan associations was virtually zero. The result of all this was
the marked decline in residential construction described earlier.
57
In the first half of the year, Federal Reserve policy restrained bank lending
only moderately but placed other financial institutions under severe pressure. If monetary policy had been applied more restrictively to banks by
providing a smaller increase in reserves through open market operations,
banks would have sold more securties and bid more aggressively for time
deposits. In that event, pressure on thrift institutions would have been even
more extreme than it was in fact. In view of this, monetary policy was
tempered by the intense competition among financial institutions.
ACTIONS TO REDUCE FINANCIAL PRESSURES
The Federal Reserve acted after midyear to curb this intense competition.
In July, interest rate ceilings were lowered on selected types of time deposits,
and reserve requirements on time deposits were raised.
Banks were also put under pressure during the summer as market interest
rates rose further and those on CD's moved up to the permissible 5 ^ percent
ceiling, curtailing the ability of banks to retain corporate time deposits.
Meanwhile the Federal Reserve tightened its open market operations, reducing nonborrowed reserves by $300 million between July and August. Interest rates rose sharply and, by late August, all sectors of the financial markets were under severe pressure. Banks, faced with a declining reserve base
and unable to obtain corporate funds through CD's, were obliged to slow
down their lending. Thrift institutions, fearing a loss of funds, sharply curtailed new mortgage commitments.
In September, the Administration, the Congress, and financial regulatory agencies all took actions to improve the balance of demands for both
funds and goods.
The Federal Reserve, on September 1, asked member banks to cooperate
in moderating the rate of lending to business and spelled out its own current
policies regarding lending to member banks. Banks that cooperated in holding down business loan commitments and refrained from liquidating securities would be permitted to borrow funds from the Federal Reserve for
somewhat longer periods than usual, while making necessary adjustments.
The Federal Reserve further increased the reserve requirement on time
deposits.
The President's proposal for temporary suspension of tax incentives to
investment was designed to reduce corporate demands for long-term funds.
The Administration also buoyed financial markets by indicating that Federal agencies would hold down stringently their issues of securities in the
financial markets, even for purposes of refunding maturing issues.
On September 21, the President signed a bill allowing Federal regulatory
authorities to impose new interest rate ceilings on time and savings accounts.
In order to restrain excessive rate competition among different types of
financial institutions, the agencies involved announced new interest rate
regulations on the same day that the bill was signed.
58
The interest rate that commercial banks were permitted to pay on deposits
of less than $100,000 was reduced from 5 J4 percent to 5 percent. A 5 percent
interest rate ceiling was also imposed on the deposits of mutual savings
banks. Because the rates paid by savings and loan associations varied widely
among different parts of the country, the regulations governing these institutions were considerably more complicated, but in general the ceilings were
set somewhat above the comparable ones for commercial banks.
The flow of funds into mortgages was also supported by another piece of
legislation signed the same month, which increased the lending ability of the
Federal National Mortgage Association by a total of $4.8 billion.
These various actions reflected widespread concern over the uneven impact of monetary policy actions and changing credit demands on different
sectors of the market.
SIGNS OF RELAXATION
Since September, financial conditions have improved considerably. The
moderation in the pace of economic activity began to be reflected in less
intense demands for credit. As inflationary pressures abated, monetary
policy responded promptly to the changing economic climate, and nonborrowed reserves resumed their growth in November and December.
Moreover, the Federal Reserve in late December rescinded the September
letter requesting banks to restrict business loans.
After touching in late August and early September the highest levels in
more than 40 years, interest rates fell steadily. By the end of the year,
most major interest rates on securities were appreciably below their earlier
peaks. The Treasury bill rate fell to about 4% percent, from more than
5 J/2 percent in September. Rates on new issues of high grade corporate and
municipal bonds declined by about one-half percentage point.
The reduction in market interest rates and in the ceilings on rates of
depository institutions has begun to restore balance among financial intermediaries. Mutual savings banks gained deposits at an annual rate of
more than 6}4 percent in the latter part of 1966. Savings and loan associations took longer to recover, but by December there was definite improvement. In the first 11 months of 1966, the net inflow of funds was 72 percent
below a year earlier. In December, however, a substantial net inflow of
$1.7 billion exceeded that of December 1965.
Commercial bank credit fell from August to October, bottomed out in
November; in December it rebounded at an annual rate of 9 percent, returning to its August level. However, bank lending continued to be conservative at year end, as many banks felt a need to rebuild their liquidity
position before expanding their loan commitments.
As a result of the moderation in economic activity and the flexible response of monetary policy, a welcome movement toward easier monetary
conditions began to emerge as 1966 closed.
59
EVALUATION OF MONETARY RESTRAINT
The credit squeeze of 1966 had an impressive and beneficial restraining
effect on over-all demand. Its side effects were equally impressive but far
less beneficial.
These side effects explain in part why relaxation of credit conditions is
and has been an objective of policy. The cause of equity was not served by
the arbitrary redistribution of income produced by very high interest rates or
by the adversity experienced in the homebuilding industry. Moreover, the
stability of financial markets was at times endangered. While the insurance
of deposits and the powers of "lenders of last resort" gave full protection
against any recurrence of the financial panics experienced in previous generations, the liquidity of portfolios was impaired by rapidly rising interest rates.
Last August, monetary policy was probably as tight as it could get without
risking financial disorder. Any further increase in over-all demand could
not have been effectively countered by general monetary policy. In such
a situation, the flexibility of over-all stabilization policy is impaired. It is
desirable for both fiscal and monetary policies to be operating from positions
where they can move freely either way—toward stimulus or restraint in the
event of unanticipated developments.
The main effect of tight money on over-all activity worked primarily
through the mortgage market, curtailing homebuilding and other mortgagefinanced construction. In December, expenditures for residential structures were $7 billion (annual rate) below the first quarter level. Homebuilding had been on a plateau during most of 1965 and was rising
moderately at the start of 1966. Demand conditions for housing looked
fairly encouraging as excess supplies of new housing (especially apartments)
that had earlier appeared in certain areas were reduced moderately during
1965. In the absence of tight money, residential construction might have
risen slightly further or retreated modestly during the course of 1966; the
decline that actually occurred is a reasonable estimate of the impact of the
change in credit conditions. By similar reasoning, the performance of commercial and other mortgage-financed types of construction suggests an impact
of perhaps $1 billion or more. Monetary restraint probably also had some
modest effect on expenditures for producers' durable equipment and consumer durables, but the amount is not evident in aggregate data.
All in all, it seems reasonable—perhaps even conservative—to estimate
that credit-financed expenditures may have been held down directly by
as much as $8 billion at year-end as a result of tight money, compared with
what would have happened had monetary policies continued supportive,
as during 1964 and most of 1965. This direct impact of $8 billion on
GNP is roughly as great as the estimated direct impact from a 10 percent surcharge on personal and corporate tax liabilities. (By restraining incomes,
both tax increases and tight money have further indirect "multiplier" effects
on GNP.) Thus, when monetary restraint is taken into account, it becomes
6o
clear that the combined impact of monetary and fiscal policy was markedly
restrictive.
PROSPECTS AND POLICIES FOR 1967
As 1967 begins, over-all demand is reflecting the restraint of last year's
monetary and tax actions. Excessive demand is not now a serious threat.
The economy's advance is being stimulated by a continuing rise in Federal
defense and State and local purchases. In the private sector, significant
increases should be registered in consumption. Modest advances are indicated for business fixed investment and for net exports, which reversed a
long decline in the fourth quarter of 1966.
Data on housing starts and permits for the closing months of 1966 provide
encouraging, although not conclusive, evidence that homebuilding activity
has touched bottom. But the recovery of homebuilding will take considerable time, and the effects of last year's monetary restraint will still be
felt for many months. Interest rates on securities have declined; but revitalizedflowsof funds into banks and thrift institutions have just begun. Financial institutions are relaxing their lending policies only gradually as they
rebuild liquidity. Interest rates on bank loans and mortgages have not yet
reflected the easing in financial markets. Finally, construction expenditures will take place only after contracts are placed and work is initiated.
Inventory investment is bound to be considerably below the unusually high
rate in the closing months of 1966. The rate of accumulation in the fourth
quarter was about double that required to keep stocks advancing in pace
with the trend growth of sales. As in the earlier months of 1966, much of
the latest advance in inventories seems to have taken place in goods-inprocess held by industries producing defense and business equipment; the
buildup may continue but probably at a diminished rate.
Thus, the economy faces a transition to a lower rate of investment in
inventories. The strength elsewhere in the economy offers important evidence that the inventory adjustment need not cumulate into an excessive
slowdown of activity. The over-all assessment does suggest, however, that
private demand is not likely to be particularly buoyant in the first half of
1967 and that a stimulative stabilization policy is appropriate to support
steady expansion during this period.
FISCAL PROGRAM FOR 1967
The budget will be appropriately stimulative in the first half of 1967.
The annual rate of deficit (national income accounts basis) is expected to be
more than $5 billion, compared with a $2/ 2 billion deficit rate in the second
half of 1966. Although nondefense spending has been held down, both the
special costs of Vietnam and further increases in transfer payments for
Medicare will add substantially to Federal outlays. Revenues will continue
240-782 O—67^—5
6i
their normal growth in the first half of 1967; but, unlike 1966, no significant
net changes in tax payments will result from recent legislation. An increase
in payroll taxes of $l*/2 billion (annual rate), which went into effect at the
beginning of 1967, will be nearly offset by the effect of the system of
graduated withholding on income tax collections. As a result of this
system, which was instituted last May, an additional $1 billion in personal taxes was collected during 1966. Reflecting this, net final payments
this spring on personal tax liabilities for 1966 are expected to be correspondingly smaller.
By midyear, construction should be recovering with the stimulus of monetary ease; and inventory investment should be leveling off at a moderate
rate. In combination, these two sectors should significantly strengthen
over-all private demand. A shift toward restraint in fiscal policy is appropriate at that time to assure that demand does not outrun capacity, that
movement toward restoration of price stability is maintained, and that
monetary policy does not have to be tightened again.
In line with this set of aims, the President is asking the Congress to enact,
as of midyear, a 6 percent surcharge on personal and corporate income tax
liabilities with an exemption for low-income families. The tax will remain
in effect for 2 years or as long as the unusual special Vietnam costs continue.
The form of this proposed temporary tax increase parallels the conclusion
of the Subcommittee on Fiscal Policy of the Joint Economic Committee
that " . . . a uniform percentage addition to . . . corporate and personal
income tax liabilities . . ., to be effective for a stated period, best satisfies
criteria for shortrun stabilizing revenue changes." Once fully in effect, the
surcharge will drain off an estimated $5.8 billion (annual rate) of private
incomes—$3.9 billion from individuals and $1.9 billion from corporations.
On the expenditure side, defense purchases will continue to rise but
at a diminishing rate during the course of the year. Transfer payments
in the second half of 1967 will exceed the rate in the first half by $4j/i
billion, reflecting primarily the proposed increase in Social Security benefits.
The President is requesting benefit liberalization amounting to $4 billion
(annual rate) to begin by midyear, to support the needs of the elderly.
The liberalization will be followed by an increase in the payroll tax base at
the beginning of 1968. Reflecting the income tax surcharge, normal revenue growth, and increased expenditures, the rate of budget deficit will be
reduced to about $3 billion in the second half of the year, and the budget
is expected to be approximately in balance in the first half of 1968.
ECONOMIC OUTLOOK
With Congressional enactment of the President's key fiscal proposals,
GNP for 1967 is expected to reach $787 billion, given the $740 billion
now estimated for 1966. In the nature of economic forecasting, the projected advance of $47 billion must be viewed as the midpoint of a range
of possible outcomes, rather than a precise estimate.
62
Like any quantitative forecast, the estimated rise of $47 billion is meant
to convey important qualitative judgments. The advance will be considerably less rapid than the record increase of $58 billion in GNP in 1966.
Healthy forward motion will nevertheless be maintained. Real output
should expand nearly in line with the 4 percent growth of potential. As explained in Chapter 2, the price record should improve; over-all prices may
increase slightly more than 2l/% percent. Finally and most important, the
Nation should continue to experience substantially full employment in 1967.
The unemployment rate should be essentially the same as in 1966, when it
averaged 3.9 percent. After allowance for an increase of more than 300,000
in the Armed Forces, the civilian labor force should expand by about 1J4
million, and civilian employment should approximately keep pace.
Outlook by Sectors
A more balanced composition of output is expected in 1967, reflecting
the aims and effects of policy. Neither business fixed investment nor inventory investment will, or should, be strong stimulating forces. On the
other hand, housing should gain as the year develops, and defense outlays
will continue to provide economic stimulus.
Business Fixed Investment. After increasing by an average of 13^2
percent annually over the past 3 years, business fixed investment should
expand much more slowly in 1967. Evidence of this is already provided
in the November survey of intentions for plant and equipment spending.
Investment should increase only slightly from its level in the fourth quarter
of 1966, and should show a rise of about $3 billion from 1966 to 1967. This
pace would be a welcome respite, permitting pressures on capital goods industries to abate. The ratio of business investment to GNP should decline
slowly to a more sustainable level near 10*4 percent by year end.
Business Inventories. Inventory investment was at a record high last
year, partly because of the rise in goods-in-process stocks of industries
producing business and defense equipment. Any further buildup of these
stocks will be small. Stocks in most areas are expected to rise in line with
steady and moderate advances in sales. Inventory investment for 1967 may
be about half the $11 J/a billion rate experienced in 1966. Most of the decline
to a sustainable rate should occur in the first half of the year, with a leveling
off thereafter.
Homebuilding. As monetary policy continues to ease, housing starts
should begin to rise above their current depressed level. Additional help
should come from actions of the Federal Home Loan Bank Board
(FHLBB) and the Federal National Mortgage Association (FNMA).
Because of the lag between mortgage commitments and construction expenditures, activity should begin to increase very gradually in the first half
of the year and gain considerable momentum in the latter part. Demo-
graphic factors and low vacancy rates point to latent strength in homebuilding, which should become evident during the course of 1967.
Residential construction expenditures are expected to increase by about
$5 billion to $6 billion from the fourth quarter of 1966 to the fourth quarter
of 1967. Even so, for the year as a whole, they would still be about $1
billion below the 1966 average.
Government. State and local government purchases, which grew by 10
percent, or $7 billion in 1966, should expand in 1967 by about $8 billion in
response to growing needs and strongly increasing revenues. The increase
in Federal purchases from 1966 to 1967 is expected to be $12 billion, mostly
for defense. But the rate of advance will taper off during the course of
the year.
Net Exports. As the growth of imports moderates and exports show
strength, net exports should expand throughout the year, rising about $1
billion from 1966 to 1967.
Consumption. The fiscal program for 1967 will have a direct impact on
after-tax incomes of households and thus on their consumption outlays. The
growth in transfer payments will increase disposable income, while the proposed surtax on individual incomes and the payroll tax that just took effect
will restrain it. The more moderate growth expected in employment and
the net effect of these policy measures will hold the growth of disposable
personal income in 1967 somewhat below the gain in 1966.
This advance in disposable income should make possible a gain in consumption of more than $30 billion in 1967, compared with a rise of $33^4
billion in 1966. In real terms, the expected gains in consumption and
disposable income in 1967 are expected approximately to match those of
1966. The saving rate in 1967 should remain close to the 1966 level of 5}4
percent, a little below the average of recent years.
Flexibility
The program and the outlook for 1967 provide good prospects for a
growth of demand that keeps pace with capacity. But the experience of 1966
is a clear reminder that surprises can develop and that policy must be alert
to them. This year, the risks are on both sides: demand could grow too
sluggishly or too strongly. A balance of risks is a necessary feature of a
full employment economy moving ahead essentially in line with potential.
In the first half of 1967, there are forces which could make for sluggish
private demand, but a sizable stimulus from fiscal policy will help to clear
the hurdles. Then, in the second half, housing should move up strongly,
the rate of inventory investment should stop declining, and transfer payments will rise. Indeed, with these developments, private demand could
once again move ahead rapidly, perhaps even too rapidly. But, by that time,
the President's tax program will be moderating the advance.
At any time in the year, the outlook for plant and equipment demand
could be upset if the recent signs of moderation should prove illusory or
if a sharp and pronounced decline should occur. Either development could
call for a response by stabilization policies.
Cessation of hostilities in Vietnam would be the most welcome surprise
that could develop in 1967. It would challenge economic policy to smooth
the transition—and policy will be ready to meet the challenge. On the other
hand, an unexpected increase in outlays required for defense would have
important consequences, pointing toward further measures of restraint, particularly from fiscal policy.
A firm set of attainable objectives, a program that fits the present outlook,
alertness to changing circumstances, and flexible and well-coordinated use
of policy instruments are the necessary means for maintaining full employment and achieving a sustainable advance in 1967.
IMPROVING STABILIZATION TOOLS OVER THE LONGER RUN
The tools of economic stabilization now at our disposal can cope quite
effectively with the problems that lie immediately ahead. Over the coming
years, however, there is a continuing need to sharpen and improve these
policy tools—as well as the institutional framework within which they
operate—so that short-term policy can respond efficiently and flexibly to
economic fluctuations and simultaneously promote progress along a path of
sustainable long-term growth.
USES OF MONETARY POLICY
As a stabilization tool, monetary policy has some distinct advantages.
Policy changes can be made quickly in response to changing signals. Furthermore, as was evident in 1966, a restrictive monetary policy can reduce
aggregate demand fairly promptly and very sharply.
But there are also distinct limitations on the uses of monetary policy.
As demonstrated in 1966 its impact on different sectors of the economy can
be highly uneven, both in magnitude and in timing. Moreover, if monetary policy is used repeatedly and in large doses to restrain inflation, it may
be difficult to avoid a long-term upward trend in interest rates. And the
scope for monetary policy may at times also be limited by balance of payments considerations.
The uneven impact of changes in credit conditions is unavoidable to a
certain extent. Monetary policy inevitably has its principal effect on those
sectors that are particularly dependent on credit. But the special vulnerability of some sectors to tightening is also importantly related to certain
structural characteristics of our financial institutions. Over time, there
should be scope for reducing the uneven impact of monetary policy through
various modifications in these institutional arrangements. This is particularly true with respect to homebuilding.
In the postwar period, changing monetary conditions have contributed to
several major swings in residential construction. This particularly sensi-
65
tive reaction to monetary conditions reflects the reliance of mortgage financing on institutional rather than open market sources of credit and its special
reliance on one particular type of institution, namely savings and loan associations. The most recent example of this sensitivity, reviewed earlier, was in
1966, when the associations suffered major withdrawals of funds.
Until 1957, savings and loan associations were largely sheltered from
competition with commercial banks. Bank interest rates for time deposits
were fixed at a low level, and most banks were not interested in competing
for savings funds. At that time, however, a series of increases was initiated
in the administrative ceilings on the interest rates that banks could pay on
time deposits. This led to a gradual narrowing in the differential between
rates paid by the associations and by the banks; and the share of deposits
going into savings and loan associations declined, even though the total
amount advanced rapidly, at least until 1966. Given the respective legal
limitations on the portfolios of banks and of thrift institutions, such a shift
gradually tended to curtail the flow of funds to the mortgage market.
There is every reason to believe that thrift institutions will continue to face
strong competition from banks, and must hereafter operate in a very
different environment from that prior to 1957.
The supply of mortgage funds might be better protected in future periods
of tight credit conditions if techniques could be devised to give the mortgage markets new and better forms of access to the open capital markets,
either directly or through the thrift institutions. A number of possible arrangements are now under discussion in the industry. With such arrangements, funds would be available only at competitive rates; but they would be
available. At present, some access is obtained indirectly, when banks, insurance companies, and savings banks sell bonds in periods of tight money
in order to buy mortgages. FNMA secondary market operations and
FHLBB advances to savings and loan associations also provide an indirect
link between mortgage financing and the national capital market.
Some additional stability in the flow of funds to the mortgage market
could also be achieved through changes in the practices of savings and loan
associations. They could partially stabilize their mortgage lending activity
in the face of fluctuations in deposit flows if they held secondary reserves
as commercial banks normally do. They can also place themselves in a
better position to hold on to interest-sensitive deposits in a period of tight
credit by issuing special instruments, like CD's, returning a higher yield to
investors. Comprehensive authority to issue such instruments has been
granted only recently and should be of additional help in the future. In
particular, the associations reduce their exposure to abrupt changes in deposit
flows by issuing such instruments for longer maturities.
It would also be desirable to strengthen thrift institutions by legislation
permitting the Federal chartering of mutual savings banks. Such institutions would have powers to invest in corporate securities and con-
66
sumer loans as well as mortgages. While broadened investment privileges of
federally chartered mutual savings banks might initially divert some funds
from the mortgage market, such chartered banks would improve the efficiency of thrift institutions, strengthen them in competition with banks, and
thereby ultimately benefit the mortgage market.
If the ability of the thrift institutions to compete with commercial banks
can be strengthened, continuous reliance on interest rate ceilings on
savings accounts may no longer be desirable. But there could still be occasions when rate ceilings would serve a genuine need. This contingency
could be provided for in either of two ways: (1) through standby authority
to impose rate ceilings under particular circumstances; or (2) through
permanent ceilings set sufficiently high that they would become effective
only in unusual instances. Pending agreement on the most suitable form
of permanent legislation for regulating rates, the present legislation (which
expires in September) should be continued for a limited period.
The kinds of financial innovations sketched above could increase the
scope for the active use of monetary policy as a tool of stabilization. With
such changes, a restrictive monetary policy might have a broader and less
uneven impact.
There are, however, other possible limitations on the use of monetary
policy. There is the danger that under some circumstances, employment of
the monetary instrument for short-run stabilization purposes can produce
an upward ratcheting of interest rates which could interfere with long-term
economic growth.
Indeed, in the postwar period, cyclical movements in rates have been
superimposed on a distinct upward rate trend. Every period of business
expansion has brought new postwar peaks in interest rates. Of course,
rates were abnormally low at the start of the postwar era, reflecting the
unusually large liquid balances of businesses and households. But this
initial situation cannot explain the continuing upward trend in rates
since the mid-1950's. During each period of economic expansion in the
1950's, credit was tightened sharply to restrain demand. The resulting increases in interest rates were not fully offset during the subsequent mild
recessions. With each advance, expectations became adjusted to the
new level. Rigidities retarded declines, once higher rates were built into the
deposit and loan practices of financial institutions.
But an upward ratchet of interest rates is not an inherent or necessary
result of a flexible monetary policy. There is now a welcome opportunity
for monetary policy to demonstrate its reversibility in a period of prosperity;
indeed, that opportunity has already begun to be converted into reality.
A variety of approaches can also be used to reduce some of the obstacles to
a flexible use of monetary policy which may be imposed by balance of payments considerations, as discussed more fully in Chapter 5.
Monetary policy is an indispensable tool; and there is important scope for
making it more useful. But the measures that can be taken to this end can-
not fully overcome its inherent limitations. It needs, and has, a powerful
ally in fiscal policy.
NEED FOR FISCAL FLEXIBILITY
In any over-all stabilization program, fiscal policy must play a major
role. Fiscal policy is generally more even in its impact than monetary policy.
Its effects tend to be more readily predictable and less subject to time lags.
Fiscal policy, too, can be used with a great deal of flexibility.
In principle, a fiscal program for short-term stabilization can involve
adjustment of budget expenditures, of tax rates, or of both. A limited
amount of discretionary expenditure variation within a given year can
be very useful to deal with unanticipated economic developments. But
most economists now agree that the selection of appropriate expenditure
levels for various public programs in the budget should be made in light of
the relative merits of alternative programs, and of the benefits of added
public expenditures, compared with private ones, at the margin. Although
the timing of some Federal expenditures can be flexibly adjusted, only gradual changes can be made in other programs without compromising their
efficiency, at least to a degree. For such reasons, it is preferable to emphasize changes in tax rates (suitably coordinated with changes in monetary
policy) for stabilization purposes, and to take full account of the possibilities
of tax and monetary adjustments in determining patterns and levels of
public expenditures.
A change in tax rates can have a powerful impact; but it usually need
not be applied in heavy doses. A large downward adjustment in tax rates
was needed in 1964, because fiscal policy had been permitted to tighten unduly over a period of many years. But if active fiscal policy is pursued continuously, only small adjustments in tax rates at any given time should be
needed in most peacetime situations. Willingness to consider making such
small adjustments frequently would contribute substantially to the effectiveness of stabilization policy and to efficient planning of Government programs. Indeed, this willingness seems already established: in each of the
past 6 years, Presidents Kennedy and Johnson have called for significant
changes in tax laws. Annual tax changes have, in fact, become the rule
rather than the exception.
The very fact that tax rates are less stable than in the past helps to make
for a more stable economy. Far from being a source of increased uncertainty—as is sometimes alleged—the flexible and coordinated use of stabilization policies should enable both business firms and individuals to make their
economic decisions in a climate of greater confidence. A knowledge that
policies are alert to changing developments should help to reduce the important uncertainties about possible fluctuations in sales, profits, and employment opportunities.
68
Appendix
T H E FEDERAL BUDGET, NATIONAL INCOME ACCOUNTS BASIS
Throughout this Annual Report, Federal receipts and expenditures and
budget surpluses or deficits are referred to in terms of the national income
accounts (NIA) budget. This is a set of accounts devised by the Department of Commerce, as part of the national income statistics, to register the
way that Federal fiscal transactions affect the income stream.
The principles followed in the NIA budget are relatively simple. In the
first place, this budget is comprehensive and records all Federal transactions
that directly alter private spendable income including that of State and local
governments. It incorporates the fiscal transactions of all Federal agencies,
regardless of the legal arrangements applying to these agencies. Thus, the
accounts include operations of trust funds and other Government-owned
agencies as well as regular Government departments.
Second, Federal transactions are counted at the time that they add to or
subtract from private spendable income, which often is different from the
time when funds are actually withdrawn from or deposited into Treasury
accounts.
Third, all transactions involving loans or exchanges in assets are excluded.
The Government engages in numerous lending and swapping transactions
involving billions of dollars a year. These are extremely important to
the operation of the economy, but they are not to be regarded as fiscal
transactions because they do not affect disposable incomes directly.
In following these principles, the NIA budget differs in several important
respects from the more familiar administrative budget. The administrative
budget is the traditional vehicle for the management and control of most
of the Federal programs which operate through regular Congressional appropriations. But it does not, and was not designed to, reflect even approximately the economic impact of fiscal policy.
For the calendar year 1966, the NIA budget was essentially balanced with
a tiny surplus of $0.2 billion. But, in the administrative budget, expenditures
outran receipts by $7.3 billion. The main elements accounting for this very
large difference are shown in Table 5. Particularly important were Federal
net loans and the net surplus of trust funds.
Trust funds. The administrative budget generally excludes both the revenues and expenditures of Federal trust funds. These funds include the
T A B L E 5.—Relation of two measures of Federal budget surplus or deficit,
calendar year 1966
Description
Billions of
dollars
Surplus or deficit (—), national income accounts budget.
0.2
Plus: Seigniorage
Excess of taxes received over taxes accrued
Miscellaneous adjustments (net)
Less: Excess of cash payments over goods received...
Net loans and financial transactions
Surplus, Federal trust funds
.9
1.4
1.0
1.0
6.6
3.2
Equals: Surplus or deficit ( - ) , administrative budget....
-7.3
Sources: Bureau of the Budget and Department of Commerce.
various Social Security, hospital insurance, and Medicare funds, unemployment insurance, railroad and civil service retirement funds, the highway
trust fund, veterans life insurance, and many others. Most transactions of
trust funds directly affect the private income stream. Both expenditures and
receipts are very large, approximately $40 billion. Moreover, the funds can
be in substantial surplus or deficit in any year. In calendar 1966, they
showed a net surplus of $3.2 billion. That surplus is properly reflected in the
NIA budget, although ignored in the administrative budget. A third measure of Government financial transactions—the consolidated cash budget—
corresponds in this respect with the NIA budget.
Timing. In business accounting, which provides the framework for
decision-making by firms, purchases and sales of goods and services are
typically recorded when liabilities are incurred rather than when cash
changes hands. The NIA budget generally follows the same procedure.
On the revenue side, withholding of personal income taxes is counted as a
collection when the taxes are actually taken from the paychecks of employees
rather than when employers pay the Government; excise and sales taxes
are counted when the sales of taxable goods are actually made; and corporate
income taxes are counted when they accrue. Similarly, on the expenditure
side, Government purchases of goods from businesses are recorded at the time
of delivery rather than at time of payment. In this respect, both the administrative budget and the consolidated cash budget differ from standard business accounting treatment by adopting a cash basis for the timing of
transactions.
In 1966, cash collections of taxes exceeded accruals by about $1.4 billion,
while cash disbursements for goods and services exceeded deliveries by
$1.0 billion.
Seigniorage. The NIA budget and the administrative budget also differ
in their treatment of Treasury profits on coinage operations (seigniorage),
which amounted to $0.9 billion last year. When the face value of new
coins minted exceeds the cost of metal used to produce them, the profit is
counted as a receipt in the administrative budget. But it is not a Government receipt in the NIA budget, because the increase in Treasury cash bal-
70
ances which results is a purely internal Government bookkeeping entry which
does not reduce or drain off private purchasing power.
Lending. A further and vital difference between the NIA budget, on the
one hand, and the consolidated cash and administrative budgets, on the
other, involves the treatment of lending, loan repayment, and sales of financial assets. Such financial transactions are excluded from the NIA budget
because they do not change the net worth or incomes of private parties, but
only their liquidity. The reasoning follows the same line applied above to
tax accruals and profits on coinage. Just as businesses do not regard themselves as becoming poorer at the time they actually pay taxes they already
owe, neither do they consider repaying a Government loan as a current
expense. Nor conversely, do their incomes rise when they obtain loans from
the Federal Government. Yet, in the administrative budget a new Federal
loan increases the deficit as much as an outlay that directly raises private
income, and sale or repayment of the loan diminishes it just as much as a
tax payment.
To be sure, many Federal loan transactions have important effects on
private spending. But they work in a less direct way than the incomegenerating transactions. They channel funds at low costs to various activities deemed to be of particular social or economic importance, such as
exports, college, housing, and farm production. Given the level of tax
revenues, when the Government lends more, it must also borrow more. The
net impact of a Federal loan financed by Government borrowing is that
Government liabilities—Treasury and agency issues—are substituted for
private debts.
Such substitution is likely to improve the terms and • lower the interest
rates available to some borrowers. But other borrowers may be displaced,
depending on credit conditions and monetary policy. Federal lending is
best regarded as an aspect of monetary, credit, and debt management
policy—not of fiscal policy. When it lends borrowed funds, the Government
is acting as a financial institution, much like private financial institutions.
Borrowers from private financial institutions also increase their liquidity.
They acquire cash by incurring debts. They are, indeed, better off for the
opportunities to borrow, and they may spend more as a result; but they do
not regard the borrowing as an addition to their incomes.
In the past year, the Federal Government was a net lender, partly because
of the scarcity of funds in private financial markets. The difference between
the two budgets on this account amounted to $6.6 billion.
Chapter 2
Prices and Wages in 1966
xpanding production and fuller employment brought gratifying advances in the incomes of most Americans in 1966. But satisfaction
with higher incomes was marred by concern over the first significant rise in
prices in 7 years.
The shift away from price stability actually began early in 1965, when
sagging farm prices suddenly reversed direction, followed shortly by a climb
in food prices, first at wholesale and then at retail. During the course of
the year, prices of many other items turned upward. But it was only in 1966
that price movements were sufficiently disturbing to arouse public concern.
The public sensed what every economist knows—that a reasonably stable
price level is essential if balanced prosperity and full employment are to be
continued at home and if the strength of the dollar is to be maintained
abroad. Experience proves that rising prices can generate distortions that
can eventually topple an economy from boom to recession. Experience
also shows that rapidly rising prices can quickly erode a country's competitive
position in international markets. The critical economic problem to be
solved in the year ahead is that of maintaining income growth and full
utilization of resources without becoming trapped in an inflationary pricewage spiral.
The recent advance in prices was due in large measure to the acceleration
in the growth of demand which began in mid-1965 and to the particularly
rapid increase in output of capital goods and defense products. The step-up
in the rate of price increase cannot be explained by any simple formula.
It was a by-product of the complex process by which additional resources
are drawn into production and adapted to the changing composition of
demand. That process is now largely completed, leaving the economy with
a much higher rate of utilization of resources. But in the process of adjustment, forces were set in motion which will continue to push up prices for a
time even though the pressure on resources has now relaxed.
E
Demand had, of course, been rising steadily since 1961. But that rise
began when there were abundant supplies of idle labor and unused equipment. In addition, productive capacity was being steadily increased through
the installation of new plant and equipment; accretions to the labor force;
72
and the steady rise of productivity as a result of better management, an
increasingly educated and skilled work force, new industrial processes, and
increased capital per worker. Thus, throughout the early 1960's production
could expand freely to match growing demand. Moreover, the pattern
of expansion of industrial capacity was well balanced with the pattern of
rising demand, so that few specific points of pressure on the price structure
developed.
By mid-1965, prices of farm products and of some industrial raw materials were already rising, partly because of growing demand, but also
for such unrelated reasons on the supply side as the stage of the hog production cycle or impediments to minerals production abroad. Moreover, by
that time, margins of idle labor and underutilized plant and equipment
were shrinking. Under these circumstances, the rapid spurt in demand
and production that began in mid-1965 could not fail to affect prices.
The sharp rise in demand for defense products and capital goods imposed special pressures on the metals and machinery industries. In some
branches of these industries, the limits of efficient utilization were surpassed,
and, in a few, output was close to absolute limitations on capacity.
Even where productive resources were not fully used, it was often difficult
to adjust production rapidly enough to keep pace with soaring demands.
Time is needed, even when there are no special problems affecting supply,
to increase the output of farm products and of industrial raw materials,
especially metals. It takes time to hire workers, activate additional machines,
or increase the rate at which purchased supplies are delivered. In the
second half of 1965 and in early 1966, the expansion of demand for many
products and services was pushing against these speed limits on the expansion of output. Moreover, the growth of demand was less balanced than
previously, so that pressure points multiplied. For some products and
services, production could keep up with demand only at somewhat higher
costs—using standby, semi-obsolete equipment, paying overtime rates,
mining lower grade ores, and so on.
There were also imbalances in labor markets which created increasing
difficulties as unemployment declined. Workers in low-paid occupations
could not be retained without substantial upward adjustments of wage
scales. Moreover, reduced unemployment strengthened the bargaining
position of unions and weakened that of employers. Wages generally began
to rise faster at a time when productivity gains were slowing down. Prices
of services of all kinds continued to rise, and at an accelerated rate, as wages
in many service occupations were increased substantially.
The broad upswing in prices must therefore be explained in terms of a
complex interaction between a general increase in the pressure on productive
resources and special factors impinging on a limited range of product and
labor markets. Had the increase in demand been slower and more evenly
73
balanced, the rise in the price level would certainly have been less, although
some increase would still have occurred. Farm products and raw materials
would surely have risen in any event, given the supply problems at home and
abroad. Wage adjustments for low-paid occupations would still have been
necessary, though they could have been more gradual.
Although the pressures that developed in early 1966 have now abated somewhat, they have left their mark on the structure of costs and prices. Prices
of most farm products and of many industrial raw materials move more or
less freely in both directions. The same is true, though to a lesser degree, of
many products at early stages of fabrication. But it is unlikely that past price
increases in most other parts of the economy will be reversed so long as the
economy remains strong. Moreover, price advances for such items as
metals and industrial equipment tend to fan out and become built into the
structure of industrial costs. And even temporary increases in farm and food
prices, through their impact on consumer prices, materially affect the pattern
of wage negotiations. The resulting higher wage settlements also tend to be
permanently built into the cost structure.
Consequently, the return to price stability can only be gradual. However,
as 1966 drew to a close, there were signs of progress. Prices of farm products
and some raw materials had leveled off. Thanks to the enormous strength
and adaptability of the economy and the skill and ingenuity of workers and
managements, many of the industrial pressure points had been alleviated.
With the slower pace of growth in the second half of 1966, much of the necessary adaptation was accomplished. More of it will be accomplished in 1967.
THE RECENT PRICE RECORD
The year 1965 marked the end of a long period of price stability (Charts
6 and 7). After having remained virtually constant since 1958, the wholesale price index rose by 3.4 percent during 1965 (i.e., December 1964 to
December 1965) and 1.7 percent during 1966. Consumer prices increased by
2.0 percent during 1965 and by 3.3 percent during 1966.
Between December 1964 and September 1966, the wholesale price index
was dominated by a rise of 14/ 2 percent in the average price of farm
products, foods, and feeds (Table 6). This group of products accounted
for over 60 percent of the total increase in the index over this period. In
the fourth quarter of 1966, wholesale prices of farm products and foods
dropped sharply and by the end of the year were only 1 percent higher than
at the end of 1965. Prices of the other commodities included in the wholesale
price index increased by 1.8 percent during 1966 (Table 7). Because of the
strong demand for investment goods, the largest price increases came in the
machinery producing sector, though prices of metals and metal products
also rose appreciably.
74
Chart 6
Wholesale Prices
1957-59=100
100
95
FARM PRODUCTS
90
11 H I I I I 11 I 11 11 I I I M I I I 11 I I I 111 11 I 1111 I I I I 11 I I 11 I 11 11 I I I 11 M I I 11 11 I
1961
1962
1963
1964
1965
1966
J/COMMODITIES OTHER THAN FARM PRODUCTS AND PROCESSED FOODS.
SOURCE: DEPARTMENT OF LABOR.
TABLE 6.—Changes in wholesale and consumer
prices,
1964-66
Percentage change
December
1964 to
December
1965
Group
December September
1965 to
1966 to
September December
1966
1966
December
1965 to
December
1966
Wholesale prices:
All commodities.
Farm products, processed foods, and manufactured animal feeds
,.
Metals and metal products
Nonelectrical machinery
Electrical machinery and equipment
A ll other commodities., „.,
3.4
2.6
-0.8
1.7
9.0
1.8
2.3
.3
1.2
5.2
1.7
3.2
2.7
1.2
-4.1
.5
1.3
2.2
1.0
2.2
4.6
5.0
1.2
2.0
2.8
.5
3.3
1.6
2.4
.1
2.5
3.5
.8
2.7
4.5
1.2
-.7
.7
3.8
1.9
3.5
1.4
4.9
0)
Consumer prices:
All items.
All commodities
Food
Other commodities
Services
i Less than .05 percent.
Sources: Department of Labor and Council of Economic Advisers.
75
Chart 7
Consumer Prices
1957-59=100
125
120
SERVICES
COMMODITIES LESS FOOD
i ii I I h i m I n i n i l i ii i l i i 111 h i
1961
1962
1963
1111111111111111111111111111111 i 1111111
1964
1965
1966
SOURCE: DEPARTMENT OF LABOR.
From 1960 to 1964, the consumer price index rose at an average rate
of 1.2 percent a year—with commodity prices rising by less than 1 percent
and service prices increasing by about 2 percent a year (Table 8). Much
of the acceleration in consumer prices during 1965 was directly attributable
to food prices, but, by the following year, prices of all major components
had begun to rise more rapidly. Prices of services, especially in the medical
and financial areas, increased most and accounted for half of the total rise
in the index during 1966. There were further increases in foods and other
nondurables, including a 3.7 percent rise in apparel prices. After declining
through 1965, prices of consumer durables began to rise in the second
quarter of 1966.
Perhaps the most comprehensive measure of price movements is the implicit price deflator for gross national product (GNP). Although consumer
prices are its largest component, the deflator also reflects changes in the
prices of structures, producers' durable equipment, exports and imports, and
government purchases. The over-all GNP deflator rose by 3.6 percent
between the fourth quarter of 1965 and the fourth quarter of 1966. Over
that same period, prices of structures and of government purchases increased
more than the average price of consumer expenditures, prices of producers'
durables rose less, and prices of exports and imports remained unchanged.
TABLE 7.—Changes in wholesale prices, December 1965 to December 1966
Indexes, 1957-59 = 100 Percentage
change,
Relative
December
importance
1965 to
in index 1 December December
December
(percent)
1966 2
1965
1966 2
Commodity group
All commodities
Farm products, foods, and feeds
Farm products..Processed foods
Contribution to
total
change
in 1966 2
(percent)
100.00
104.1
105.9
1.7
..
26.19
107.6
108.7
1.0
17
_.
10.24
13.97
1.99
103.0
109.4
118.0
101.8
110.6
132.0
-1.2
1.1
11.3
-5
11
11
73.81
102.9
104.8
1.8
83
7.83
102.0
101.9
-.1
Manufactured animal feeds
Other commodities
Textile products and apparel
Hides, skins, leather, and leather
products
Fuels and related products, and
power
_
Chemicals and allied products
Rubber and rubber products
Lumber and wood products
Pulp, paper, and allied products...
Metals and metal products
Machinery and motive products..
Nonelectrical machinery
__.
Electrical machinery and
equipment
Motive products..
Furniture and other household
durables
Nonmetallic mineral products
Tobacco products and bottled
beverages
M iscellaneous products *
1.43
114.6
117.5
2.5
7.71
6.41
1.38
2.68
4.80
13.01
17.70
7.78
100.6
97.6
93.5
101.9
100.9
106.6
104.2
111.9
102.1
98.2
95.0
102.5
103.0
108.9
107.9
117.0
1.5
.6
1.6
.6
2.1
2.2
3.6
4.6
4.57
5.34
96.6
100.7
101.4
101.8
5.0
1.1
3.95
2.88
2.60
1.46
98.2
101.6
100.4
103.2
2.2
1.6
107.9
104.2
110.1
104.8
2.0
.6
100
6
16
38
21
11
1 As of December 1963.
Preliminary.
3 Less than 0.5 percent.
* Excludes manufactured animal feeds.
Note.—Detail will not necessarily add to totals because of rounding.
Sources: Department of Labor and Council of Economic Advisers.
2
TABLE 8.—Changes in consumer prices, 1960-66
Item
Allitems
Food
Nondurable commodities less food
Durable commodities- .. .
.,
Services* Total
Less rent
Relative
importance in
index l
(percent)
Percentage change per year
1960
to
1964
December
1964 to
December
1965
December
1965 to
December
1966
Contribution to
total
change in
1966
(percent)
100.0
1.2
2.0
3.3
100
22.8
24.6
18.1
34.5
29.1
1.2
.7
.5
2.0
2.2
3.5
2.0
-1.0
2.7
2.9
3.8
2.8
.7
4.9
5.5
26
21
3
50
48
1
As of December 1965.
Note.—Detail will not necessarily add to totals because of rounding.
Source: Department of Labor.
LABOR COMPENSATION AND LABOR COSTS
Compensation of employees increased by $40 billion from 1965 to 1966,
more than two-thirds of the increase in GNP. Much of the increase in
money compensation represented labor's share of the added output produced
240-782 0—67
77
by added employment. Some of it represented labor's share of the added
output which resulted from the growth of productivity. But some of the
gain in employee compensation reflected increases in wage rates in excess
of the growth of productivity. That part of the increase in labor compensation served to increase unit labor costs and thereby to push prices up.
Compensation per man-hour grew more rapidly in 1966 than in earlier
years. At the same time, productivity grew more slowly than usual. As a
result, unit labor costs in manufacturing showed the first significant rise since
1960. For the private nonfarm economy, the rate of increase of labor costs
accelerated.
The tight labor markets generated by rising demand were mainly responsible for the rapid rise in hourly compensation, although collective bargaining power was important in a few sectors.
SUPPLY AND DEMAND IN THE LABOR MARKET
The accelerated growth of output that began in mid-1965 was accompanied by record increases in employment throughout the economy. As
indicated in Chapter 1, the rising demand for workers also induced an increase in the supply, with nearly 500,000 more workers entering the labor
force in 1966 than demographic trends would have indicated. The number of workers on part-time schedules "for economic reasons" dropped
sharply for the second year in a row, and the unemployment rate fell to
the lowest level since 1953.
Although no general labor shortage resulted, labor markets in almost
every industry, occupation, and area tightened appreciably, and shortages
appeared at a number of points. The abruptness of the increase in demand
itself strained the normal processes of adjustment, and contributed to more
pressure on wages and on costs than would have occurred had the same
over-all level of employment been reached more slowly.
Pattern of Demand
The gains in employment were distributed unevenly among industries
and occupations (Table 9). In many industries, the expansion since
mid-1965 simply accentuated long-run employment trends, such as the
growth in trade and services and the decline in agriculture. After years of
little change, manufacturing employment rose sharply, particularly in the
durable-goods sector, reflecting the sharp increase in defense and capital
goods spending (Chart 8).
For the same reasons, the increase in the demand for workers in various
occupations was also uneven. Many of the occupational labor shortages reported during the past 18 months were an intensification of longstanding
imbalances between supply and demand—for example, for teachers, doctors,
nurses, and engineers. But new shortages appeared in a number of skilled
occupations—machinists, toolmakers, modelmakers and patternmakers,
aircraft mechanics, and setup operators for various metalworking ma-
78
TABLE 9.—Changes in employment, by industry, 1960-66
Percentage change per year
Industry
Nonagricultural payroll employment: Total
Manufacturing
Durable.
__
Nondurable
Mining _
Contract construction
Transportation and public utilities
Retail trade
Wholesale trade
Finance, insurance, and real estateService and miscellaneous
Government
Federal.
State and local
Agricultural employment *
1960 to 1964
1964 to 1965
1.8
4.2
5.1
.7
.9
.4
-2.8
1.4
-.3
1.7
1.5
2.6
4.1
3.5
.8
4.5
4.4
5.8
2.5
—.3
4.3
2.1
4.4
4.0
2.1
4.5
5.2
1.3
6.4
5.8
7.7
3.3
—.6
3.1
2.6
4.2
4.3
2.2
5.3
7.5
7.9
7.4
-4.1
-3.7
-8.3
1965 to 1966
i Labor force basis.
Source: Department of Labor.
chines—which clearly resulted from the rapid expansion in durable manufacturing. Until the closing months of 1966, there were, in addition, shortages of skilled construction labor in many parts of the country.
Meeting the Demand for Labor
Some of the increase in the demand for labor could be easily met by hiring workers previously unemployed. For the reasons set forth in Chapter 3,
however, the pattern of skills and residence of the unemployed did not fully
match the pattern of hiring needs. Employers often were forced to make
other adjustments. They recruited at longer distances than before—in some
cases even abroad; searched their rolls for workers who could be upgraded;
redesigned jobs and even altered production methods to make better use of
available workers. Hiring standards were lowered, and training programs
for both new and previously employed workers were expanded. Particularly
in manufacturing, employers lengthened the workweek to meet their production schedules.
But such adjustments become increasingly costly the further they are
pushed. Moreover, for highly skilled occupations—at the extreme, professional workers—several years are needed to increase the supply. Employers therefore were willing to increase what they would pay for a worker who
already met their preferred specifications. The result was a bidding up of
wages for scarce skills and a rapid rise in quit rates.
Competitive market pressures also extended to many low-paid types of
labor. Many farm laborers, unskilled or semiskilled service workers, and
factory workers in the low-wage industries were attracted by the jobs opening up in higher wage industries and areas, and new entrants to the labor
force naturally preferred jobs in the high-wage sectors. Employers in lowwage industries were thus forced to give larger wage increases than other
employers in order to hold experienced workers and to recruit new ones.
79
Chart 8
Employment in Durable Goods Manufacturing
1962 = 100, SEASONALLY ADJUSTED
140
120
1
80
1962
1,,,,,,,,,,,),,
,,,1
1964
n HI niminiinMiiiTiitmitniiittiNtiniI mutt tin
1966 1962
1964
1966
140
FABRICATED
METALS
AUTOS
/••
\ j
/CONSTRUCTION
• '
MATERIALS!/
PRIMARY METALS
80
I I I I I mi i ill i ii ii n nil 111 ii i I I I n I inn nun I in in in n
1962
1964
1966 1962
1964
•STRIKE.
VLUMBER AND WOOD PRODUCTS, AND STONE, CLAY, AND GLASS.
SOURCES: DEPARTMENT OF LABOR AND BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
8o
1966
Collective Bargaining
Moreover, tight labor markets enhanced the bargaining power of organized workers and reduced that of employers. When prices and profits
are rising throughout the economy, workers expect to receive larger
increases than before. Also, workers are more willing to strike when jobs
have been and are expected to remain plentiful. On the employers' side,
wage increases are less vigorously opposed at a time when they can easily be
recovered in higher prices. In addition to the market forces that put
pressure on wages, the rise in consumer prices associated with the strong
expansion of demand—as well as the high profits of many employers—
understandably strengthened organized labor's demands for larger wage
increases generally.
As a result of the changed bargaining situation and of workers' more
militant attitudes, more workers struck in 1966 than in any year since 1959.
Also, the available information on mediated contracts indicates that in 1966
union members voted down a higher proportion of tentative agreements
made by their representatives than in other recent years.
Only a limited number of contracts were negotiated during 1966, but
they provided for wage increases substantially higher than those obtained
in earlier years (Table 10). Moreover, the size of wage and fringe benefit
gains tended to increase as the year progressed. A number of important
negotiations in the second half of the year resulted in compensation gains
well above those typical of earlier contracts.
As a result of deferred wage increases and cost-of-living escalator adjustments, wages paid under existing contracts also rose. But these wage
gains were substantially lower than the increases obtained from contracts
newly negotiated in 1966. The median 1966 union wage increase (excluding fringes) in all nonconstruction contracts, new and existing, was
TABLE 10.—Wage changes in major collective bargaining situations, 1961-661
Changes in wage rates as percent of straight-time
hourly earnings
Type of wage change
1961
1962
1963
1964
1965
1966 2
Median of first-year changes negotiated during specified year:
All industries..
Manufacturing
Nonmanufacturing _
Median adjustment effective during
specified year,
regardless of date of negotiation:3
All industriesManufacturing
Nonmanufacturing.
2.8
2.9
3.0
3.2
3.8
4.4
2.4
3.6
2.4
4.0
2.5
3.4
2.0
3.6
4.0
3.7
4.2
5.0
2.7
2.8
2.9
2.7
3.4
3.3
2.7
2.6
2.6
3.5
2.7
3.2
2.0
3.5
3.4
3.4
3.0
3.4
1
All contracts affecting 1,000 or more workers in all industries except construction, services, finance, and
government.
2 Based on preliminary data available in early January 1967.
3 Includes changes in wage rates negotiated during specified year, plus increases decided upon in earlier
years, cost-of-living escalator adjustments, and no wage changes.
Source: Department of Labor.
8i
3.3 percent, about the same as in 1965, although higher than in other
recent years.
Construction workers obtained considerably larger increases in both wages
and fringe benefits than did other workers. The available information
indicates that the average annual increase in hourly compensation (wages
plus fringe benefits) in major construction settlements was over 6J/2 percent
in both 1965 and 1966.
Compensation
The pressures on the labor supply in areas other than manufacturing
during the past year resulted in a sharp acceleration in wage rates. As
shown in Table 11, the increases in average hourly earnings in the manufacturing industries were exceeded by the gains in most other sectors.
The substantial wage gains outside manufacturing extended through the
whole spectrum of occupations though, as noted above, the intensity of wage
pressures varied widely. Professional and semiprofessional workers were in
continued short supply. In fact, there was a general shortage of persons
with a college education. The salary offers made to graduating college
students in 1966 increased by about 6 percent, compared with an increase
of 3^2 percent in 1965. There were also notable wage increases for nurses
in many areas in the last half of the year. At the other end of the spectrum,
wage rates rose rapidly in low-wage service occupations; and agricultural
wages, which are generally low, rose by a spectacular 8.3 percent.
For the entire private economy, average hourly compensation, including
fringe benefits, increased 6*/2 percent (Table 12). About 0.8 percent
was due to increased employer contributions for social insurance. And
a significant part of the increase reflected a shift of workers from the farm
TABLE 11.—Changes in average hourly earnings, by industry, 1960-66
Percentage change per year
Industry
Manufacturing:
Durable goods.._
Nondurable goods
Bituminous coal mining
Contract construction
Transportation and public utilities:
Telephone communication
Electric, gas, and sanitary services
Local and suburban transportation
Wholesale trade
Retail trade 2
Finance, insurance, and real estate
Service and miscellaneous:
Hotels, tourist courts, and motels
Laundries and cleaning and dyeing plants 4
Agriculture
._
_._
21
Preliminary.
Excludes eating and drinking places.
34 Not available.
Prior to January 1964, data relate to production workers.
NOTE.—Data are for production workers in manufacturing and mining, for construction workers in con"
tract construction, and for all nonsupervisory employees in other industries (except as noted).
Sources: Department of Labor and Department of Agriculture.
82
TABLE 12.—Changes in compensation;, productivity, and unit labor cost in the
private economy since 1947
Percentage change per year
Item
1947
to
1965
1960
to
1964
1964
to
1965
1965
to
19661
Total private, all persons:
Average hourly compensation 2.
Output per man-hour
Unit labor cost
5.0
3.4
1.6
4.3
3.8
.4
3.7
2.8
1.0
6.5
2.8
3.6
4.8
2.8
1.9
3.9
3.5
.3
3.3
2.1
1.0
5.6
2.4
3.2
5.1
3.5
1.5
3.8
4.0
-.2
2.5
3.4
4.8
3.1
1.7
Private nonfarm, all persons:
Average hourly compensation 2
Output per man-hour
Unit labor cost
Manufacturing, all employees:
Average hourly compensation 2
Output per man-hour
Unit labor cost
1
2
Preliminary; based on averages of quarterly data; not strictly comparable with changes for prior years.
Wages and salaries of all employees and supplements to wages and salaries such as employer contributions for social insurance and for private pension, health, unemployment, and welfare funds, compensation
for injuries, pay of the military reserve, etc. For total private and private nonfarm, also includes an
estimate of wages, salaries, and supplemental payment part of the income of the self-employed.
Sources: Department of Commerce, Department of Labor, Board of Governors of the Federal Reserve
System, and Council of Economic Advisers.
to the nonfarm sectors. Because wages are generally higher in the nonfarm
sector, this shift of workers raises the average level of wages in the private
economy. In fact, it is the main reason why the over-all gain is so much
higher than the gain in the nonfarm sector alone.
Compensation per man-hour for manufacturing workers rose by 4.8
percent in 1966—a significant increase over the 3.5 percent average annual
gain from 1960 to 1965—but considerably less than the 5.7 percent gain for
other nonfarm workers. Furthermore, much of the acceleration in manufacturing compensation was due to the increased employer contributions
for social insurance, the rise in overtime work, and the relative shift of
workers into the higher-wage durable manufacturing sector. In spite of some
skill shortages and the rapid increase in general employment, manufacturers
generally had less difficulty in recruiting than employers in some other sectors, because manufacturing wages are relatively high. Of course, the small
proportion of new union contracts in manufacturing negotiated during 1966
also served to hold down wage increases.
Productivity and Unit Labor Costs
Output per man-hour has shown a long-term upward trend but annual
advances in productivity often deviate significantly from the trend. The
trend rate of growth of productivity largely determines the long-term trend
in real wage rates. And the changes in unit labor costs which result from
the movements of employee compensation in relation to the movements of
productivity play a major role in determining price level movements.
The long-term advance in output per man-hour is attributable to several
factors: an increase in the abilities of the average worker; additional capital
per worker; technological progress; and improved management and organization. A major element underlying the increased average quality of the
work force has been a steady gain in educational achievement. The expansion of private and Government training programs, better health, and
improved working conditions have also contributed to the efficiency of
workers.
Gains in labor skills have been accompanied by additions to the economy's
stock of productive capital. Business investment has continually provided
the average worker with more and better machines to increase the speed,
accuracy, and ease of his production. The rapid pace of technological
progress has been made possible through large and increasing investments
in research and development.
Over any reasonably long period of time, these changing characteristics
of the labor force and the capital stock are the basic determinants of the
economy's total productive capacity and of the productivity of its workers.
But, in the short run, much of the fluctuation in productivity is due to
cyclical variations in business operating rates. During an expansion, as
operating rates pick up, firms utilize their capital and labor more efficiently.
Until full capacity is reached, output can be increased with little or no increase in overhead labor (supervisors, clerical and maintenance workers,
etc.). Furthermore, since it is difficult and costly to adjust the work force
in response to each fluctuation in demand, changes in employment tend to
lag somewhat behind production. For these reasons, productivity gains are
generally higher than average during periods of rising utilization rates.
However, once output begins to press against capacity, less efficient equipment is brought into use, less skilled labor is hired, and employment begins to
catch up with output. Productivity gains drop back to, and temporarily
drop below, their long-run rate of increase.
The substantial, and sometimes erratic, short-run movements in productivity make it impossible to provide a single, unambiguous estimate of the
trend in productivity. But a variety of statistical techniques has been used
to adjust as completely as possible for the effects of the short-run factors.
The results for the private economy as a whole consistently indicate a trend
rate of increase in real output per man-hour of somewhat over 3 percent a
year. The comparable trend for the private nonfarm economy is about half
a percentage point lower. Of course, the trends themselves are likely to
change slowly over time.
Because of the technological advances in agriculture, productivity gains in
that sector far exceed those in the nonfarm sector. This accounts in part for
the fact that productivity grows faster in the total private economy than in the
nonfarm sector alone. An even more important factor is the continuing shift
of workers from farming into nonfarm occupations. Although productivity is growing faster in the farm sector, average output per man-hour is
appreciably higher in the nonfarm sector. When a worker shifts from a farm
84
to. a nonfarm occupation he generally increases his productivity and, thus,
the average productivity in the private economy.
From 1960 to 1965, as the economy moved toward full utilization of resources, it made more efficient use of its productive plant and overhead
labor. As a result, output per man-hour rose at a faster rate than the longterm trend (Table 12). By 1965, however, productivity gains in some sectors began to weaken despite the very rapid growth in output. After some
5 years of rapid expansion, the deferred adjustments in employment began
to catch up with output. Furthermore, in some industries, production
began to press against capacity and firms were forced to use semi-obsolete equipment, run extra shifts, hire untrained workers, and struggle with
supply bottlenecks.
As output grew at a more moderate pace in 1966, firms continued to make
adjustments in their work force. Productivity gains remained somewhat
below trend in all sectors, and there was a further slowdown in manufacturing productivity. After showing strong gains in the first half of 1966, manufacturing productivity remained virtually unchanged after midyear. For
the year as a whole, output per man-hour increased by 3.1 percent—somewhat below the average annual increase in the postwar period.
Unit Labor Costs
Because productivity gains between 1960 and 1964 were above normal, and
compensation gains relatively moderate, unit labor costs remained essentially stable in that period. Then as productivity gains began to slacken in
1965, unit labor costs were held to a modest increase by the slowdown in the
growth of compensation per man-hour. For the entire private economy,
unit labor costs in 1965 averaged only 2 percent higher than in 1961. In
1966, however, tight labor markets pushed compensation up more rapidly,
and there was no surge in productivity to maintain stable costs. As a result,
unit labor costs rose an average of more than 3y2 percent in the private
economy and nearly 2 percent in manufacturing, the first appreciable increase during the entire period of expansion.
Although the rise in unit labor costs in 1966 in the crucial manufacturing
sector represents a serious break with the earlier record of stability, it was
well below the increase experienced in every other postwar expansion
(Chart 9). Hourly compensation in manufacturing grew steadily and quite
rapidly throughout the entire year. From the fourth quarter of 1965 to the
fourth quarter of 1966, compensation per man-hour increased by nearly 6
percent. Because of the uneven rates of growth of output and productivity,
most of the rise in unit labor costs in manufacturing was concentrated in the
second half of 1966. During the first half of 1966, unit labor costs rose at a
rate of about 2 percent, but then accelerated to an annual rate of nearly 5
percent in the second half of the year. Since this sharp upturn was in part
a reflection of the very uneven pattern of growth of output during the year,
it should be regarded as temporary in nature.
85
Chart 9
Unit Labor Costs in Manufacturing Since 1948
PREVIOUS PEAK =
100J/
120
SEASONALLY ADJUSTED
A
/ rv
115
/ ^^A
/!**^1948-54
110 —
/
105
/ft/*
I)
\
\
1953-58
is
/
\
100
V
W^—1957-61
J
95 -
^ * 1960-66
/
V
90
1 1 11 1 M I 11 11 11
-12
12
24
36
48
60
72
MONTHS FROM CYCLICAL TROUGH
P = C Y C L I C A L PEAK: JULY 1953, JULY 1957, AND MAY I960.
•^PREVIOUS PEAKS ARE NOVEMBER 1948, JULY 1953, JULY 1957, AND MAY I960.
^ C Y C L I C A L TROUGHS ARE OCTOBER 1949, AUGUST 1954, APRIL 1958, AND FEBRUARY 1961.
NOTE.-PERIODS COVERED ARE NOVEMBER 1948-AUGUST 1954, JULY 1953-APRIL 1958, JULY 1957-FEBRUARY
1961, AND MAY 1960-DECEMBER 1966 (LATEST DATA AVAILABLE).
SOURCES: DEPARTMENT OF COMMERCE AND BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
In summary, all major sectors of the economy experienced higher unit
labor costs during 1966, particularly in the latter half of the year. This
upswing broke a long record of relative stability. Productivity gains, which
had been above trend during previous years, slowed down in 1965 and 1966
while the rise of compensation accelerated. The trend of prices, described
in the following sections, could not be insulated from the resulting rise in
unit costs.
PRICES IN MAJOR SECTORS
In view of the critical significance of prices in the 1966 economic record
and in the outlook for 1967, a fuller review than usual of the price situation
in major sectors is called for in this Annual Report. This review concentrates on four sectors: farm and food products; raw materials; manufactured products; and consumer services.
86
FARM PRODUCTS AND FOOD
As indicated earlier, farm prices rose sharply in 1965 and continued to
rise during the first three quarters of 1966. Prices declined sharply in the
final quarter of the year and by December showed little change from a year
earlier. However, they remained well above the levels of early 1965. These
increases were reflected at wholesale in the prices of processed foods, and
at retail in the consumer price index.
The rise in farm prices was due to the strong expansion of domestic
and export demand, combined with only slightly increased or in some cases
reduced supplies of important farm commodities. Given adequate time for
the adjustment of production, America's farmers are capable of expanding
total farm output to meet any foreseeable expansion of domestic demand
and to provide substantial surpluses for export, in most instances at essentially
constant costs. To be sure, for some highly labor-intensive products—
particularly dairy products and some fruits and vegetables—rising prices
may be necessary to attract or hold the necessary labor services. But this
is the exception rather than the rule. However, an expansion of farm
output necessarily takes time—ranging from a few months for broilers, at
least a year for most field crops, 1 or 2 years for hogs, and even longer for
cattle or tree crops. To expand production of some of these commodities
also requires changes in Federal farm programs.
Because of relatively long production cycles, supplies of some farm products reflect past rather than current prices. In 1965, hog supplies were
declining in response to the low prices of 1963 and 1964. The resulting rise
in livestock prices was intensified by strong consumer demand. The price
rise which began in 1965 continued into early 1966. After February supplies began to expand, and by December wholesale livestock prices were 12.5
percent below the unusually high levels of December 1965.
Meanwhile, however, grain prices began to rise. At the beginning of
1966, grain prices stood 2.2 percent above their levels of a year earlier.
During 1965, demand had expanded sharply but so had production. In
1966, strong domestic demand was supplemented by a jump in exports but
total production was essentially unchanged from 1965 levels. Export demand was particularly buoyant for wheat, as reduced supplies from Argentina and Australia led to a rise in the volume of U.S. exports estimated at
about 20 percent.
Prices for wheat, feed grains, and soybeans rose sharply during the late
spring and summer. The rise was accentuated by speculation based on
uncertain crop prospects and the strength of export demand. In the
fall, harvests having proved somewhat better than had been expected, prices
for grains and soybeans declined sharply. However, grain prices averaged
12.6 percent higher for December 1966 than a year earlier.
87
In contrast to both grain and livestock prices, dairy prices moved up
sharply in the second half of 1966 as growing demands were matched with
a decline in production. This decline in turn was related to general economic conditions as high beef prices induced farmers to cull and sell dairy
cows while excellent off-farm employment opportunities encouraged some
farmers to abandon dairying altogether.
Thus the major factors involved in rising farm product prices in 1966 were:
(1) the hog production cycle which led to reduced marketings until mid1966 when numbers shipped began to increase;
(2) poor weather here and abroad which caused some decline in U.S. production and increased the demand for U.S. wheat exports;
(3) high cattle prices which resulted in reduction in dairy herds and good
employment opportunities which induced farmers to leave dairying;
(4) strong demand for food based on rising consumer incomes.
Chart 10
Farm and Food Prices
1957-59 = 100
120
f'\-
115 -
110 -
105 -
95
WHOLESALE FARM PRODUCTS 1/
90
85 1 II II I I III I I II III I III I II II II I I1I II IMI I I I 1III I1II I I MII 1II
1961
1962
1963
1964
1965
1111111 111 11
1966
J/FARM PRODUCTS INCLUDE DOMESTIC AND IMPORTED TEXTILE FIBERS, TOBACCO, AND SOME PRODUCE
NOT SUBJECT TO PROCESSING.
SOURCE: DEPARTMENT OF LABOR.
88
Processed Foods and Foods at Retail
Changes in food prices at subsequent levels of processing and distribution
generally follow changes in the costs of raw farm products. These costs,
however, account for only about 40 percent of the price of delivered foods
with the remainder reflecting costs of transportation, processing, distribution,
and marketing. Over time these latter costs have risen steadily reflecting, in
part, increases in labor costs and, in part, higher quality and better packaging.
As a result, even when farm prices are stable, food prices, especially at retail,
tend to rise.
Chart 10 shows the relation between farm and processed food prices and
retail food prices. As expected, changes in farm product prices are more
directly reflected in processed food prices. Changes in retail food prices
tend to lag behind farm prices and fluctuate with less amplitude.
Following the decline in farm prices, processed food prices ended the year
only slightly above the levels of December 1965. But retail prices remained
3.8 percent above the level a year earlier. The spread between farm and
retail food prices narrowed during 1965, but then widened late in 1966.
On the average, there is little evidence of an increase in processing and
distribution margins. In the months ahead there may be some further
decline in retail prices, but the rising trend in intermediate costs suggests
that a full reversal cannot be expected.
RAW MATERIALS
The rise in raw materials prices which began in 1965 continued through
1966, although the prices of hides, secondary copper, and softwood lumber,
which had risen rapidly during 1965 and early 1966, declined in the last half
of the year. Prices rose for a wide range of mineral products, including
sulphur, nickel, vanadium, and a number of other alloy metals. Some
nonmineral raw materials used in industry—such as tobacco and wool—
also rose.
Over long periods, the relative price of mineral products reflects a race
between the improvement of the technology of discovery, mining, and
refining and the gradual deterioration in the quality of available ores.
Despite the fact that use is now made of ores which would have been
discarded 30 years ago, the average price of minerals has not generally
risen relative to other commodities.
In the short run, however, sharp increases in demand almost always mean
higher prices for both ores and metals. Since it takes several years to develop
new mines, increased requirements can only be met from inventories, and
by stepping up output from existing capacity and from an expansion of
capacity which is already under way. Once these limits are exceeded, as
they have been for many of the minerals, pressures on price become severe.
Even when primary producers do not raise their prices, or do not raise them
enough to balance the market, secondary market prices will rise. The
initial advance is likely to be accentuated by inventory speculation. Cor-
89
respondingly, a relatively small improvement in the supply and demand
balance can reverse the speculative movement and produce a sharp decline
in price. These characteristics are shared by many nonmineral raw
materials.
The upward pressure on raw materials prices in 1965 and 1966 reflected
the slow response of supply to a sharp increase in demand. It was accentuated by the fact that the increase in demand was heavily concentrated in
defense and capital goods which use large amounts of mineral raw materials.
Random factors such as strikes and interruptions in foreign supplies
always influence raw materials prices. Copper and hides were particularly
affected by changes in foreign markets. However, in 1966 the strength of
demand and the basically tight supply situation magnified the impact of
fluctuations in supplies.
In the case of copper, strong demand drove domestic consumption up
by more than 200,000 short tons from the first half of 1965 to the first half of
1966. Foreign supplies were reduced by strikes and political disturbances
in the principal producing nations. While this loss was largely offset by
sales from the government stockpile, prices in the United States were influenced by changes in the outlook for foreign supplies. The price of primary domestic copper was not raised significantly until early 1967, but the
price in the secondary market, which supplies about one-third of domestic
consumption, rose sharply to a peak of nearly $1.00 a pound early in 1966,
compared with 36 cents for the primary refined metal. It then eased to a
range of 50 to 60 cents during the summer and fall.
The influence of demand pressures was also clearly shown in the case of
softwood lumber prices, which rose rapidly early in the year under the
pressure of rising defense and construction demand, and then sank as residential construction declined.
As indicated below, the rise in raw material prices played a significant role
in the increase in prices of manufactured products during 1966.
MANUFACTURED GOODS
In contrast to some farm products and raw materials, price changes in
most manufacturing industries do not reflect an automatic balancing of
supply with demand through the operation of impersonal market forces.
Producers in many industries have some degree of discretion in setting prices,
although the range of discretion varies with competitive conditions from
industry to industry.
Firms with considerable market power are often able to maintain
markups over unit costs that are largely independent of changing market
conditions. In other industries, the effectiveness of market power is more
limited. When utilization rates are low, markups often have to be shaded.
By the same token, when demand and capacity utilization rates are high,
competitive pressures are weakened, presenting the opportunity to restore
temporarily depressed markups to desired levels or even to raise sights on
90
what is desired. In a few industries, market power is insignificant and
markups over cost vary widely with demand conditions.
On the whole, the markup of prices over "standard costs" (based on
assumed or standardized capacity utilization) appears to have been relatively stable in the past few years. Actual costs tend to decline as capacity
utilization rises. The general improvement in capacity utilization between
1961 and 1965 would have produced very substantial increases in profit
margins even if prices had been adjusted only enough to maintain a constant
markup over costs calculated on a fixed volume. But as markets strengthened, some prices were raised even though costs had not increased. And
some firms failed to reduce prices even when standard costs were falling.
After remaining stable from 1961 to 1964, prices of finished nonfood
manufactures rose by 1.2 percent during 1965 and then moved up by 2.5
percent during 1966. Some part of the increase in prices was, of course,
directly attributable to the rise in raw materials prices and unit labor costs.
But the basic factor underlying the general price rise was the strength of
demand and, in particular, the sharp increase in demand in late 1965 and
early 1966.
Though demand pressures cannot be measured precisely, the relation
between capacity utilization and the preferred rate of operation provides a
crude measure. Capacity utilization in manufacturing has been increasing since 1961 and the average rate in 1966 was exceeded only in 1951 and
1953 in the postwar period. At the end of 1966, manufacturing industries
were operating at an estimated 89 percent of capacity, compared with an
average preferred rate of 93 percent (Table 13). The end-of-year capacity
utilization was lower than the average for the year as a whole. Even so,
TABLE 13.—Manufacturing
Industry
capacity utilization, 1965-66
Output as percent of
capacity 1
December
1965
Total manufacturing 3.
Iron and steel
Nonferrous metals
Machinery
__
Electrical machinery
Autos, trucks, and parts
Other transportation equipment
Fabricated metals and instruments _
Stone, clay, and glass.
Chemicals .
Pap
Rubber..
Petroleum and coal products. _
Food and beverages
Textiles
....
Miscellaneous manufacturing.
December
1966
Preferred
rate
(percent)2
90
89
93
75
99
90
80
95
92
91
95
93
90
99
93
92
92
90
97
93
98
90
OQ
OV
96
95
87
86
84
96
96
94
85
99
90
QQ
o\)
84
102
89
80
83
94
98
97
85
96
85
1 Data for 1965, except iron and steel, from McGraw-Hill; estimates for iron and steel for 1965 and all
industries for 1966 by Council of Economic Advisers after consultation with McGraw-Hill.
2 From McGraw-Hill survey of Business Plans for New Plants and Equipment, 1966-69, April 1966.
3
Not comparable with data in Table B-35 because of differences in methods of computation.
Sources: McGraw-Hill, Board of Governors of the Federal Reserve System, and Council of Economic
Advisers.
operations were close to or above preferred rates in 9 important sectors:
nonferrous metals, nonelectrical machinery, electrical machinery, "other"
transportation equipment (aerospace and railroad equipment), fabricated
metal products and instruments, paper and pulp, rubber, petroleum and
coal products, and textiles. Furthermore, in 6 of these 9 sectors (all
except nonferrous metals, paper, and textiles), operating rates either
increased or held steady between December 1965 and December 1966.
The pressure of demand for finished goods is in itself a major element
contributing to the rise in wages and in raw materials prices. Translated
into a demand for labor, it can create shortages which bid up wages, or at
least strengthen the bargaining power of unions. And, after being transmitted through a chain of suppliers and processors, the increased production requirements can pull up the prices of raw materials. Thus, by
forcing up wages and raw materials prices, an increase in demand in one
sector can raise production costs in other sectors. If aggregate demand is
strong, producers in these latter sectors will tend to increase their prices to
cover the higher costs. Thus, while it may at times be useful to describe
a price increase in terms of cost factors only or demand factors only, in general both elements will be present.
The direct impact of materials costs is, of course, most evident for
products requiring relatively little fabrication. For example, in 1966, copper pipe, brass fittings, and wire prices rose sharply in response to
increased copper prices. But the effect of higher costs continued to spread,
though somewhat more slowly, to products at more advanced stages of
fabrication. Ultimately, increased raw materials prices exercised a pervasive influence on industrial prices, although their direct impact was notable
in only a few cases. Similarly the rise in unit labor costs in manufacturing
eventually influenced prices over a wide range of manufactured goods.
But, without strong demand conditions, the rise in prices and costs would
not have spread so quickly nor, of course, been so large.
Most manufacturing industries were affected to a greater or lesser
degree by all these factors—rising unit labor and materials costs and pressures on capacity. However, in a few cases where demand pressures were
conspicuously absent, prices did not rise or actually declined. Thus prices
of synthetic fibers dropped during 1966 because capacity had outrun demand
by a considerable margin.
The machinery industries afford the outstanding example of the problems
involved in operations at rates close to full capacity and their reflection in
the price movements. The demand for machinery grew rapidly while output was limited by shortages of skilled labor and some types of equipment,
in part because the machinery sector had to compete with expanding defense
production for labor, materials, and components.
Spurred by the capital boom of the past 5 years and the sharp rise in defense demands, production of machinery expanded by 67 percent between
1961 and 1966, an average annual growth of more than 10 percent. For
92
the first time in many years both the electrical and the nonelectrical machinery industries were operating in 1966 at about their preferred rates and,
in each segment, order backlogs grew by about one-quarter.
In the nonelectrical sector, there appears to have been sufficient plant
capacity and manpower to meet the growing demand without much strain
until early 1965. Then, beginning around mid-1965, some segments of the
industry, especially machine tool producers, began to report increasing difficulties in recruiting and training skilled labor. After rising at an average
annual rate of only 1.1 percent between 1961 and 1964, prices of nonelectrical
machinery rose by 2.3 percent during 1965 and then 4.6 percent during
1966. Similar strains on capacity developed in the electrical machinery industry and prices, which had been declining for a number of years, changed
little in 1965 and then rose by about 5 percent during 1966.
Summary
The moderate but persistent upward trend in manufacturing prices
reflected the interaction of many factors, of which the most pervasive
was the rapid increase in demand at a time when the economy was
operating close to capacity. The actual course of prices varied considerably from industry to industry, depending upon the degree to which
each was affected by changes in costs of materials, supplies, fuel, and
labor, the balance between demand at prevailing prices and the capacity
to meet that demand without undue strain, and the extent and exercise of
discretion in the pricing policies of leading concerns.
On the average, the 2 / 2 percent increase in manufacturing prices
during 1966 was probably about commensurate with the average percentage increase in all elements of cost. This seems a reasonable inference
from the over-all profit record in manufacturing. During the first three
quarters of 1966, after-tax profits for all manufacturing averaged 5.6 percent of sales, the same as in the first three quarters of 1965. As a percentage
of equity, however, they were higher—13.4 percent for the first three quarters of 1966 against 12.7 percent a year earlier.
CONSUMER SERVICES
Since 1947, the cost of consumer services has risen at an average rate
of about 3J/2 percent a year, more than twice as fast as for commodities at
retail; between 1960 and 1964, the rate of increase was a little over 2 percent
a year; and in 1965 it was about 2l/2 percent.
Between December 1965 and December 1966, the rate of increase jumped
to 4.9 percent, accounting for half the total rise in the consumer price index.
This acceleration reflected partly an intensification of existing long-run trends
and partly the appearance of new factors.
The services included in the index are a highly diversified group, but
they can be regarded as comprising three very broad and somewhat over240-782 0—67
93
simplified categories: (1) rents and utility rates, (2) labor intensive services,
and (3) financial charges.
The behavior of prices in the first of these categories differed little during
1966 from earlier trends, and increases were relatively small (Table 14).
The second group—labor intensive services—is quite heterogeneous; but
in most cases the scope for significant improvements in productivity is
limited, and therefore costs and prices are sensitive to changes in wage rates.
This is true whether the labor involved is relatively highly skilled (as for
professional services, repair mechanics, barbers, and beauticians) or relatively
unskilled (as for domestic services, hotels, motels, or laundry and dry
cleaning).
As already indicated, wage increases in the service industries accelerated
during 1966. This was also true of fees for professional services. The resulting rise in personnel costs was aggravated, in some instances, by increases
in other cost elements, such as commercial rents and hospital equipment.
While prices for virtually all these services had been rising for years, the
advance was particularly sharp during 1966. Examples are shown in
Table 15.
The third category of services—financial costs—had received relatively
little attention in the past, though property taxes had been rising slowly
and property insurance rates more rapidly. Both accelerated considerably
during 1966, and a major new element was added: mortgage interest rates,
which had remained quite stable in preceding years, rose by 12.4 percent.
As shown in Table 14, these higher financial costs accounted for over
one-third of the total advance in prices of services during 1966. A large
part of this advance reflected increased mortgage costs. The fact that
the increase in mortgage interest rates had such an impact on prices reflects
TABLE 14.—Changes in consumer prices for services during 1966
Percentage
change,
December
1965 to
December
1966
Type of service
Contribution to
total
change
in 1966
(percent)
4.9
100
Interest and property insurance, and taxes.
7.4
36
Public transportation and labor-intensive services
Public transportation
Medical services
Skilled labor services 1
Other2
6.5
6.4
8.1
5.2
5.9
51
5
22
15
9
Rent and utilities-.
Rent
Utilities
1.0
1.6
.1
5
5
4.4
8
All services
All other services <___ _
______
_
1
2
Includes repair and maintenance services, barbers, and beauticians.
Includes hotels and motels, domestic services, babysitters, laundries, drycleaning, and shoe repair.
3 Less than 0.5 percent.
4
Includes postal charges, recreational services, legal and banking services, etc.
NOTE.—Detail will not necessarily add to totals because of roundinp.
Source: Department of Labor.
94
TABLE 15.—Changes in consumer prices for typical labor-intensive services
since 1959
Percentage increase per year
Type of service
December
1965 to
December
1959
in
1965
Physicians' fees
Daily service charges in hospitals..
Men's haircuts
Dry cleaning.
Local transit fares
Housing maintenance services.
1966
2.7
6.4
2.8
1.6
a. 2
l 3.0
7.8
16.5
7.7
6.C
9.1
6.8
1
Data for 1959 not available; increase from December 1963 to December 1965 used.
Source: Department of Labor.
the system of measurement used in constructing the index. The index
is designed to measure the change in prices associated with commitments
currently entered into, rather than the change in the cost of current expenditures related to commitments entered into in the current and past periods.
Had weighting been based on current expenditures rather than commitments
entered into during the year, the increase in the over-all consumer price
index would have been about 0.4 percentage points less.
There are other difficulties in measuring service prices. Changes in the
quality of services are difficult to assess. This is particularly true of medical
services because of the progress in medical techniques. It is impossible to
make a statistical correction for the changing quality of medical care, but
it is clear that the cost of a given standard of health care has risen less than
the indexes indicate.
PRICES AND THE DISTRIBUTION OF REAL INCOME
The significance attached to price movements varies with the perspective of the observer. A trade association usually reports a price rise for the
products of its members as an improvement in prices. But the firms in another industry using those products describe the same price increase as an
unfortunate rise in costs. A rise in the price of haircuts is a rise in the cost
of living to most of us, but it means an increase in income to barbers. Wages
are incomes to workers but costs to employers.
In 1966, wages, profits, and farm incomes all rose rapidly in money
terms. But the gains in money income could not have been so large without
price increases. Those increases turned very large money gains into smaller,
though still substantial, increases in real income.
In 1966, the nominal increases in hourly compensation were unusually
large—4.8 percent for manufacturing employees and 5.7 percent for other
nonfarm workers. Farm wages rose by 8.3 percent and net income per
farm by 10.3 percent. But after adjustment for price increases, hourly
compensation in the nonfarm sector increased by only 2.6 percent and net
income per farm rose by 7.0 percent. In manufacturing, real hourly com
95
pensation rose by less than 2 percent. Because some of that gain represented
increased employer contributions to social security, real hourly take-home
pay for manufacturing workers increased even less for the year as a whole
and actually declined between the end of 1965 and the end of 1966.
The disparity between the large nominal gains in hourly compensation
and the very moderate increase in real compensation per man-hour in 1966
emphasizes again the fact that more cannot be taken out of the economy than
is produced. On the average, labor productivity in the private economy can
be expected to increase by somewhat over 3 percent a year. Real hourly
compensation cannot rise more rapidly than that except at the expense of
other incomes. In conditions of strong demand and full utilization of resources, a general increase in money wages in excess of productivity growth
is more likely to result in a rise in prices than in a corresponding increase in
real wages.
When producers pursue pricing policies designed to increase the share
of income going to profits or to maintain that share at excessively high
levels, this too is likely to be self-defeating. Despite sizable short-run fluctuations due to changing utilization rates, the profit share of income has
shown no perceptible trend over the long-run (Chart 11). When profits
are unusually high, they encourage workers to demand higher wages. By
pushing up the cost of living, the price increases necessary to sustain a high
profit share provide further incentive for increased wage demands.
Thus, in 1966, price increases were no more successful in raising the
profit share than nominal wage increases were in accelerating real wage
gains. The share of gross profits in corporate gross income had been rising
steadily throughout the expansion. This was of course a normal response
to the rise in capacity utilization. The profit share reached a peak in the
first quarter of 1966 and then, despite rising prices, began to decline slowly.
Within the manufacturing sector, the decline in profits after the first
quarter of 1966 resulted in a decline of 1J4 percentage points in the profit
share of gross manufacturing income. Nonmanufacturing corporations
experienced a similar though less pronounced decline in share.
The decline in the profit share reversed the upward movement which
had continued since 1961. That movement was, as noted earlier, primarily
due to the improvement of capacity utilization from the low levels ruling
in 1961. In spite of the small decline during 1966, the corporate profit share
remained substantially above the post-Korean average, though somewhat
lower than in 1955.
The relatively minor change in the aggregate share of labor income was
accompanied by significant differences in the wage gains in particular
sectors. In general, wages increased more rapidly in the nonmanufacturing
sectors than in manufacturing. Construction workers made notable gains,
as did medical workers from the professional level on down. Other professionals, such as teachers, enjoyed sizable increases in compensation, and
trade and service wages continued to advance relatively rapidly.
96
Chart 11
Shares of Gross Corporate Income
PERCENT OF GROSS CORPORATE INCOMEl/
100
80
COMPENSATION OF EMPLOYEES
60
40
NET INTEREST
20
1954
1956
1958
1960
1962
1964
1966
J/lNCOME ORIGINATING IN" BUSINESS PLUS CAPITAL CONSUMPTION ALLOWANCES; BASED ON SEASONALLY
ADJUSTED DATA.
J/CORPORATE PROFITS PLUS INVENTORY VALUATION ADJUSTMENT.
NOTE.-DATA RELATE TO DOMESTIC ACTIVITY OF NONFINANCIAL CORPORATIONS.
SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.
Of course, the most dramatic income movement was the 7 percent gain
in real income per farm. The relative improvement in farm income was
largely a result of the sharp rise in prices of farm products in 1965 and early
1966. By the last quarter of 1966, farm prices had begun to fall and income
per farm declined substantially from the peak in the first quarter. However,
for 1966 as a whole, real income per farm still showed a gain of more than
one-third over 1964.
OUTLOOK FOR PRICES
While forecasts of price trends are even more hazardous than other forms
of economic prediction, there is good ground for anticipating that 1967 will
witness progress toward greater price stability. That view is based on the
expectation, reviewed in Chapter 1, that the growth of the real GNP in 1967
will not exceed the growth of productive resources.
Average wholesale prices in the farm and food sector should be relatively
stable, if weather is normal, with advances for some items approximately
97
balanced by reductions for others. However, retail food prices will probably
continue to rise, although more slowly than in 1966.
The sharp increase in mortgage interest rates, which significantly affected
the average level of consumer service prices in 1966, should not be repeated
in 1967. Costs for medical care will continue to increase and prices of other
labor intensive services may also rise, although less rapidly.
Demand pressure on manufacturing prices should be significantly reduced
in 1967. With capacity increasing by an estimated 7 percent, there will be
a slight reduction in average capacity utilization as well as a better balance
among industries. A small decline in manufacturing capacity utilization
may have an adverse effect on productivity in some industries, but, in others,
such a decline will reduce the need to use obsolete facilities. Moreover, the
large amount of new capital coming into use should improve productivity.
The movement of employment costs will be affected by a number of conflicting factors. The pressure of demand on wages in unorganized labor
markets will be somewhat weaker. Although employment will grow in
pace with the growth of the labor force, the balance between the skills in
demand and those available will improve. However, there will be continued
upward pressure on the compensation of some groups of professional and
technical workers. At the other end of the scale, the scheduled increase in
minimum wage rates will raise employment costs in some sectors.
During 1966, negotiated wage settlements had only a limited influence
on the over-all movement of employment costs. In 1967, the average size of
negotiated wage increases will tend to increase and the number of workers
affected will also be larger. These increases will have a significant influence
on the costs of the particular industries involved. However, only about 7
million workers—less than 10 percent of all private employees—will be involved in this year's wage negotiations. Consequently, taken by itself, the
direct and immediate effect of higher union wage settlements will be relatively small. However, increases obtained by organized workers tend to
pull up the wages of unorganized workers in the same labor market. This
process will broaden the impact of union settlements on wages and costs in
1967 and will continue to affect wage costs for a much longer time.
The increase in employer contributions for social security in 1967 will
be much smaller than in 1966. That will more or less offset other factors
tending to push up the rate of increase of hourly employment costs.
Unit labor costs will doubtless continue to rise this year. But with greater
stability in the farm and food sector, and with less acute demand pressures
in product markets, the rise in the general price level in 1967 should be
more moderate than in 1966.
Chapter 3
Maintaining Price Stability and Reducing
Unemployment
T
HE OUTPUT AND EMPLOYMENT gains of 1966 brought the
U.S. unemployment rate to the lowest point since 1953. But these
gains were accompanied by the fastest rise of prices since 1957. Once
again, after years of absence, an old set of questions reappeared:
(1) How far can unemployment be reduced without inflation?
(2) If there is a "trade-off" between lower unemployment and price
stability, how do we choose between them?
(3) What ways are available to change the terms of such a trade-off;
how can we reduce unemployment further and maintain reasonable
price stability?
An analysis of recent U.S. experience throws some light on these important
questions, but it provides no simple answers.
The remarkable economic record of the years 1961-65 demonstrates
clearly that, when surplus labor and plant capacity abound, fiscal and
monetary policies to expand demand can reduce unemployment substantially, and at stable prices. But, in 1966, as unemployment hovered just
below 4 percent of the labor force, prices rose at a clearly unacceptable
rate. As shown in Chapter 2, some of this rise can be attributed to temporary and nonrecurring factors. Some was the result not of getting to
4 percent unemployment but of getting there too fast. There is good reason to expect that, this year, an expansion of production which will hold
unemployment at the present level will be consistent with a substantially
smaller price advance. Nevertheless, the experience of 1966 clearly suggests that expanding demand cannot lower the unemployment rate much
below the present level without bringing an unacceptable rate of price increase. Under present conditions, an over-all unemployment rate close
to 4 percent appears to be associated with an approximate balance between
supply and demand in most labor markets. A higher level of demand
for goods and services would create inflationary pressures in both product
and labor markets.
If the economy is now in the range of trade-off between falling unemployment and rising prices, then the second question above needs to be
faced: how should we rank the advantages of fuller employment against
the disadvantages of rising prices?
99
In a meaningful sense, any involuntary unemployment is too much.
Ideally, everyone who wants work should be able to find it. To tolerate
any unemployment, other than temporary, means subjecting individuals to
concentrated hardship, both economic and psychological. On the other
hand, it is clear that the overwhelming majority of Americans would also
say that any rise of prices is too much. Rising prices create hardships for
those on fixed incomes or with savings fixed in money value, and windfalls
for others. Moreover, more than a very slow rise of prices can create
economic distortions that threaten continued prosperity. And a significant
rise in prices would surely worsen the U.S. balance of payments, not only
in the short run but for some time to come. Surely, at the present juncture,
when the payments balance remains in persistent deficit, inflation could
undermine the ability of the United States to carry out its objectives around
the world.
Faced with a desire for both lower unemployment and price stability,
the third question thus becomes the really relevant one: How can the
terms of the trade-off between lower unemployment and greater price
stability be altered?
This chapter does not attempt to deal with all of the answers to this
question; but it deals with three.
First, the pattern of skills and related attributes of the unemployed can
be more closely adapted to the pattern which employers seek; and the
functioning of the labor market can be improved so that qualified workers
and suitable vacancies can be brought together more expeditiously.
Second, all Government policies affecting markets for goods and services
can be directed toward the objective of achieving general price stability in
an economy with sustained full employment.
Third, producers and labor unions can learn to use their market power
more responsibly.
Public policies to improve the performance of labor and product markets,
and private policies of voluntary restraint in price and wage decisions, will
together enable the American economy to move gradually in the coming
years toward lower unemployment with stable prices.
IMPROVING U.S. LABOR MARKETS
During each of the three recessions since 1950, unemployment rose sharply,
then returned to a rough plateau—at about 3 percent in 1952-53, 4 percent
in 1955-57, and 5J/2 percent in 1959-60. There were many who read
into this record an ominous and irreversible trend toward ever higher
rates of unemployment, even in "prosperity." Profound structural changes
in the economy during the 1950's, they argued, had rapidly and radically
altered the pattern of the demand for labor. The new pattern was not
matched within the ranks of the labor force.
This thesis found many supporters in early 1961, when, with an unemployment rate of about 7 percent, a new national administration was deter-
IOO
mining its economic targets and the means to achieve them. Most economists advising the new Administration argued that an adequate increase
in the total demand for goods and services could restore unemployment to
moderate levels. The advocates of the structural change thesis agreed
that more demand for goods and services would create more job openings,
but predicted that before unemployment was reduced very much, the economy would experience serious labor shortages and a resulting inflation of
wages and prices.
It is obvious now, if it was not obvious in 1961, that there were then
plenty of unemployed workers available to fill almost every job that could be
created by a general expansion of demand. Labor shortages, except in a
few professional areas, were only a distant threat. Chapter 1 has shown how
the long economic expansion that began in 1961 produced a sharp and
steady decline in unemployment. But as the unemployment rate approached 4 percent in late 1965, and dipped below it in early 1966, significant labor shortages appeared.
Shortages of professional and subprofessional personnel in medicine and
education, which have existed for a number of years, continued and were
intensified. New shortages appeared in a number of highly skilled occupations, particularly in defense and capital goods industries. And there was
a more general excess demand for workers who could fully meet employers'
minimum standards for work experience and education. To be sure, employers lowered hiring standards and expanded training activities significantly, and made numerous other adjustments of the kind outlined in
Chapter 2. But the rapid expansion of the demand for labor strained the
capacity of employers to adapt their employment requirements to the
characteristics of the available labor force or, through training or other
means, to adapt the available labor force to the requirements of the vacant
jobs.
The unemployment remaining today is not of the same character as that
of 1961. Plans for further reduction of unemployment must be geared to
the nature of the present problem. This requires a careful examination of
the composition of today's unemployed.
COMPOSITION OF THE UNEMPLOYED
Unemployment rates for almost every category of workers have been
sharply reduced in recent years; yet the incidence of unemployment—by
occupations, by age, by sex, and by other characteristics—is still highly
uneven. By occupation, rates in 1966 varied from 7.3 percent for nonfarm
laborers to 1.3 percent for professional and technical workers (Table 16).
By age, unemployment rates were high for teenagers, very much lower
among workers aged 20-44, and still lower among older workers. Rates for
women at all ages were higher than for men (Table 17). The pattern of
unemployment rates by age and sex for nonwhite workers was similar to
that for white workers. But unemployment among nonwhite workers was
IOI
TABLE 16.—Unemployment rates, by major occupation groups, 1961 and 1966
[Percent *]
Occupation group
1961
Total
White-collar workers:
Professional and technical workers
Managers, officials, and proprietors, except farm
Clerical workers. _
Sales workers
Blue-collar workers:
Craftsmen and foremen
Operatives
Nonfarm laborers
Service workers:
Private household workers
Other service workers __
Farm workers:
Farmers and farm managers
Farm laborers and foremen
_
1966
6.7
3.9
2.0
1.8
4.6
4.7
1.3
1.0
2.8
2.7
6.3
9.6
14.5
2.8
4.3
7.3
5.9
7.4
3.6
4.8
.4
5.7
.4
4.1
i Number of unemployed in each group as percent of labor force in that group; data relate to persons 14
years of age and over.
Source: Department of Labor.
TABLE 17.—Unemployment,
by age,
sex, and color, 1966
Unemployment
Group
Number
(thousands)
Total
_-_
Teenagers (14-19 years of age):
Males
White
Nonwhite
Females..
White
Nonwhite
Adults 20-44 years of age:
Males
White
Nonwhite
Females
White
Nonwhite
___
_.
_
Adults 45 years of age and over:
Males..
__
White
__
Nonwhite
Females
White
Nonwhite
_
_
__.,__ _
_
--
__
1
Percentage
distribution
2,976
100
3.9
503
394
109
435
330
104
17
13
4
15
11
3
11.2
9.9
21.2
13.0
11.0
31.1
678
530
148
632
467
165
23
18
5
21
16
6
2.6
2.3
5.3
4.6
4.0
7.8
442
371
71
286
234
52
15
12
2
10
8
2
2.3
2.1
4.2
2.7
2.5
4.4
Number of unemployed in each group as percent of labor force in that group.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Labor.
IO2
Rate
(percent) i
more than twice as high as among white workers, ranging between 1 ^ and 3
times as high in each of the various age and sex groups. As total unemployment has fluctuated, these relative patterns of unemployment rates have
been fairly stable (Chart 12).
Unemployment averaged 3.5 million persons in 1965 (the latest year
for which the following data are available), but more than 12.3 million, or
14 percent of all persons who were in the labor force at some time during
the year experienced some unemployment. Most of those unemployed were
out of work only once during the year, and then only briefly. But 16 percent had two spells of unemployment, and nearly 20 percent had three or
more.
Much of the unemployment during the years 1957 through 1965 was the
result of an inadequate total demand for goods and services. This is
sometimes referred to as "cyclical" unemployment; but since a large part
of it persisted through the post-recession expansions of 1958-60 and 1961-65,
the cyclical label is clearly unsatisfactory.
With the virtual elimination of cyclical unemployment in 1966, most
of that which remains can usefully be described as either "frictional" or
"structural." But these terms are not entirely precise; often, a particular
Chart 1 2
Unemployment Rates
PERCENT31
30
20
10
MEN
I
I
1956
I
I
1958
I
I
1960
* PERCENT OF CIVILIAN LABOR FORCE IN EACH GROUP.
SOURCE: DEPARTMENT OF LABOR.
IO3
I
1962
1964
1966
worker who is without a job cannot easily be classified as either frictionally
or structurally unemployed. Moreover, whenever there is also unemployment that is due to inadequate demand, it becomes impossible in many cases
to say which particular workers are unemployed for frictional, structural, or
cyclical reasons. It is obvious, for instance, that not all unskilled workers
or older workers who were unemployed in 1961 were structurally unemployed; very large numbers of them found jobs in the subsequent period of
expansion. The reason why many of the unskilled workers or older workers
who were without jobs in 1966 could be called structurally unemployed is not
that they were necessarily different from those millions of unskilled or older
workers who were at work. Rather, in many cases more unskilled workers
could be hired only if employers could readily find the necessary complement of skilled workers who were in relatively short supply. There is
no need for construction laborers if construction is held up by the absence
of bricklayers or pipefitters. But a great many of the "structurally unemployed" have characteristics that make employers reluctant to hire them
except under conditions of rather severe labor shortage.
"FRICTIONAL" UNEMPLOYMENT
Even in an economy characterized by steady high-level employment, some
involuntary unemployment is bound to occur. New workers need time to
find jobs even when jobs are available. Continuous changes in the composition of demand cause fluctuations in the output and manpower requirements of individual plants though the total level of demand in the economy
may be growing steadily. There are seasonal variations in activity in
many sectors of the economy, such as construction, recreation, and agriculture. The secondary effects of strikes in some plants or industries may
cause workers in other plants or industries to be laid off temporarily.
Whether unemployment from these causes is called—or in fact is—frictional, depends on whether the workers involved have the skills and other
characteristics to qualify for available jobs and on the availability of jobs.
In 1966, more than 40 percent of the unemployment among men over
25, nearly 56 percent of the unemployment among women over 25, and 82
percent of unemployment among teenagers was associated with either entry,
reentry, or voluntary job change. Workers entering the labor force found
jobs more quickly than in 1965; but the number entering was also considerably greater. As a result, unemployment associated with these causes
changed little. Since unemployment from other causes declined, the proportion of total unemployment associated with entry and job change
increased during 1966.
In most cases, unemployment due to entry or reentry is of short duration;
but a small percentage of new entrants may not be able to find their first
jobs for some months. They account for a substantial fraction of the total
unemployment associated with entry.
104
The primary reason why unemployment rates are consistently higher for
teenagers and women than for male adults is the higher proportion of teenagers and women who are new entrants or reentrants into the labor force.
Moreover, the voluntary turnover rate of young workers is particularly high,
as they often try several jobs in search of one they like.
The rising trend of unemployment rates among teenagers relative to other
workers in recent years reflects the further fact that the size of the teenage
labor force—which had been stable or contracting in the early postwar
period—more recently has been sharply expanding. New entrants obviously
make up a larger proportion of the teenage labor force when that force is
rapidly growing. Thus, in 1953, when the over-all unemployment rate was
2.9 percent, teenage unemployment averaged 7.1 percent. At that time, the
total teenage labor force was actually declining slightly. The higher teenage unemployment rate of 12 percent in 1966 largely reflected the fact that
the teenage labor force is now increasing rapidly—by 11 percent in 1966.
The rising proportion of women in the labor force also tends to increase
the amount of unemployment associated with entry, reentry, and departure.
A rather high rate of voluntary turnover is an important characteristic
of the restless, mobile American worker, compared with workers in most
other countries. Moreover, voluntary turnover rises as labor markets tighten,
and workers feel more secure in their ability to find other jobs. Of course,
not all voluntary job changes involve any intervening unemployment. While
frictional unemployment associated with causes other than entry and turnover is substantial, no useful data regarding its extent are available.
Frictional unemployment could be reduced somewhat if the demand for
labor were to continue to expand more rapidly than the normal growth of
the labor force. Workers in seasonal occupations would find it easier to
obtain other jobs in their off season. New entrants to the labor force would
find first jobs somewhat more quickly. There would be fewer temporary
layoffs to "adjust inventories." Such a reduction of frictional unemployment would not only make jobs easier to find, but it would also make job
vacancies more widespread. Frictional unemployment might be reduced;
but only by a further tightening of labor markets, creating greater upward
pressure on wages and prices.
It is impossible to eliminate frictional unemployment completely and
undesirable to try. The efficient allocation of labor depends on the movement of experienced workers to better jobs. The frequent entry and reentry of women into the labor force in response to improving job opportunities is an important source of flexibility. The interval between leaving
school and the first job could be reduced, although it cannot be entirely
closed in all cases. The freedom to change jobs—if only for the sake of
variety—is a right that Americans cherish. The seasonally of many types
of activity can be reduced, but not eliminated. And the rapid pace of
technological change that contributes to the rapid advance of living standards also requires some involuntary job changes. Yet there are ways to
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reduce frictional unemployment without increasing the tightness of job markets.
IMPROVING THE OPERATION OF LABOR MARKETS
Unemployed workers often fail to find vacancies which they are capable
of filling, because they are unaware of such vacancies, because they are in
the wrong location, or because of artificial job entrance requirements.
The U.S. Employment Service and its affiliated State employment services perform an important function by bringing jobs and workers together,
and thus reducing frictional unemployment. During recent years, they
have sought to improve their effectiveness in matching jobs and men through
improving the quantity and quality of their job market information (including the experimental development of job vacancy data) and through
more effective dissemination of this information to job seekers, employers,
schools, and community groups; through working more closely with employers to alleviate occupational shortages and to meet defense manpower needs; and through developing an experimental automated system
for matching available jobs with characteristics of applicants in both interarea and interstate recruitment. They have also sought to improve their
service to disadvantaged workers through cooperating with Community
Action agencies and other community groups, through sending mobile teams
to rural and smaller urban areas, through making greater efforts to reach
the disadvantaged in slum sections of metropolitan areas and through Youth
Opportunity Centers. A detailed report on methods for improving the
effectiveness of public employment services has recently been made by a
public Task Force on the Employment Service. Legislation will be proposed incorporating many of the recommendations of this report.
General expansion in the economy has reduced unemployment remarkably in many areas formerly considered to be "depressed areas." Nevertheless, a few areas of regional depression or underdevelopment remain. The
activities of the Department of Commerce under the Economic Development Act and of the Appalachian Regional Commission established in
1965 are continuing to assist such areas in developing new industries by
providing loans, public works, technical assistance, and manpower training.
Whenever the effects of general prosperity and of new development programs cannot promise adequate local employment for all workers, migration of workers is clearly called for. Often those who should migrate in
order to find jobs either fail to do so—sometimes because of financial inability—or move with inadequate knowledge of where jobs are available
for which they might be suited. The Department of Labor has operated
an experimental program of relocation allowances and relocation counseling,
the results of which need to be thoroughly evaluated in order to determine
how relocation assistance might usefully become an expanded element in
U.S. manpower policies. Relocation programs appear to have been highly
successful in reducing frictional unemployment in several other countries.
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"STRUCTURAL" UNEMPLOYMENT
During 1965, nearly 3.5 million workers were unemployed for more than
15 weeks during the year, and about 1.2 million of those workers were unemployed for 27 weeks or more but, of course, not all at the same time.
These 3.5 million workers accounted for nearly two-thirds of the total number of man weeks of unemployment. On the basis of monthly data on the
long-term unemployed, it can be estimated that the number of workers who
lost 15 or more weeks of work during 1966 fell to about 2.5 million. Of
that number about 1.3 million workers were unemployed for more than 15
consecutive weeks, over twice the number of persons appearing in the
monthly statistics of long-term unemployment. An additional 1.2 million
workers lost at least 15 weeks of work in several spells of joblessness. Workers experiencing severe unemployment are found most frequently among
farm and nonfarm laborers, operatives, and service workers—generally, the
least skilled. By industries, long-term unemployment is most heavily concentrated in agriculture, construction, mining, entertainment and recreation, food and kindred products manufacturing, and private households.
Several of these sectors have a strongly seasonal character.
Classified by their demographic characteristics, those most exposed to
severe unemployment were youths out of school, nonwhite workers, or older
workers. Each of these groups suffers from some special disadvantage.
Over-all unemployment rates for older men are relatively low, because
they do not leave jobs readily and seniority often protects them from layoff
or dismissal. But older workers who do become unemployed because of
plant closings or relocations or technological change often have severe problems in finding new jobs. They are less mobile than new workers; it is
often more difficult for them to learn new skills; and the cost of training
is higher per year of their remaining working career. Employers may also
have to assume higher pension costs when they employ older workers.
Nonwhite workers suffer from discrimination, as well as from the poor
education and lack of skills which are in large measure the result of past
discrimination. Some ghetto areas are located far from areas of expanding
employment in the same metropolitan complex, and transportation facilities are often inadequate. Nonwhite teenagers make up a large proportion
of the out-of-school youths unemployed for long periods. They suffer the
disadvantages of other nonwhite workers. Like all teenagers in this group,
many cannot get jobs because they have little or no work experience, and
cannot get experience because they cannot get jobs.
Other concentrations of long-term unemployment are found in depressed
areas, or areas where job opportunities for workers with particular skills are
no longer available.
Many individuals with serious unemployment problems suffer personal
disadvantages which make it difficult for them to get or hold jobs even in
a tight labor market. Special studies of the unemployed in ghetto areas
indicate that many of the long-term unemployed are functionally illiterate.
107
Many fail entrance tests for military service. Poor health and physical
defects are common. Some are mentally retarded or physically handicapped. Some suffer from emotional instability. Others have prison
records. Many have poor work habits, and lack motivation and discipline.
They lose jobs because of absenteeism, tardiness, and inability to follow
instructions. Some are younger workers who are unwilling to take low
paying, "dead-end" jobs, but lack the patience, discipline, or opportunity
to acquire training for better ones.
While an expansion in the number of jobs available would surely cause
some reduction in unemployment among these workers, it is clear that many
of them will not be steadily employed—except under conditions of severe
and general labor shortage—until a heavy investment has been made in
improving their skills and education and in helping them to solve their
personal problems.
A concentrated attack on the causes of "structural" unemployment is obviously essential if we are to move toward continually lower unemployment
while maintaining reasonable stability of prices. However, this statement
of the need for attacking these social problems is obviously far too narrow.
We need to attack discrimination not only because it stands in the way of
fuller utilization of our economic potential, but because it is morally wrong.
We would need to assist the handicapped and the disadvantaged—even if
we were not able to lower the over-all unemployment rate—in order to
make it possible for them to compete on more equal terms for whatever jobs
are available. We need to open the doors of opportunity for individual development and self-fulfillment through useful employment .even if we should
conclude that, on purely economic grounds, it would be cheaper merely to
provide guaranteed incomes regardless of contribution to production.
FEDERAL MANPOWER TRAINING
In recent years, the Federal Government has launched a major effort
to provide training and retraining designed to develop the large reservoir
of unused or underutilized talent in the labor force, with emphasis on the
disadvantaged. These include the Manpower Development and Training
Act (MDTA), Job Corps, Neighborhood Youth Corps, Work Experience,
the Office of Economic Opportunity (OEO) Adult Work Program, and the
OEO Special Impact Program for retraining and employing residents
of blighted urban areas. The distribution of trainees for the last and the
currentfiscalyear is shown in Table 18.
Under the MDTA program, 175,000 persons were enrolled in training for
productive employment in fiscal 1966; and from its inception in 1962
through December 1966, 613,000 persons were enrolled in training for
1,300 occupations. The typical MDTA trainee was a white male, high
school graduate. Only one-third of the trainees were from the disadvantaged groups that form the bulk of the hard-core unemployed. Experience under the Act has led to an altered program emphasis which will ex-
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TABLE 18.—Training opportunities, fiscal years 1966-67
Number of trainees
(thousands)
Program
1966
19671
Manpower Development and Training Act Program _
273
250
Institutional training
On-the-job training and other .
Job Corps
160
113
125
125
10
31
106
55
209
125
60
165
Neighborhood Youth Corps: 2
In-school
Out-of-school
Summer
Work experience
61
Adult work program.
46
25
Special impact
12 Estimates.
Each position may be occupied by more than one person in the course of a training period, since trainees often do not occupy positions for the full period.
Source: Bureau of the Budget.
pand the highly succesful on-the-job training component and raise to twothirds the proportion of the disadvantaged in MDTA programs—particularly older workers displaced by technological change, persons in correctional institutions, handicapped workers, the paroled, the illiterate, and the
young. Special assistance will be given for intensive on-the-job training
to prepare disadvantaged persons for jobs with private firms.
The remaining Federal programs are wholly aimed at the disadvantaged.
In 1966, the Neighborhood Youth Corps program reached 220,000 needy
students, who received an average of $500 of aid fronr iri-school and summer
programs which helped them to continue in school, and 100,000 youths
no longer in school, who received an average of 7 months of training. Since
its inception, the Job Corps has provided training and work experience for
61,500 of the most disadvantaged youths. When first enrolled, more than
50 percent of Job Corps enrolles fail to read at the 5th grade level, and 30
percent cannot read a simple sentence. Despite this handicap, the retention rate for the Job Corps is superior to that of vocational training programs
nationally. However, the difficulty of reaching these hard-core unemployed youth and the need for residential training facilities result in high
unit costs.
Other Training Programs
In addition to these programs which emphasize immediate impact, the
longer-range objective of continuing improvement in available skills is an
important component of other Federal programs. This objective underlies
Federal support of education ranging from the basic Elementary and Secondary Education Act of 1965 and the Higher Education Act of 1965 to
the more specific Allied Health Professions Personnel Training Act of
1966.
240-782 0—67
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About 5.8 million persons were enrolled in vocational education programs
in 1966. Although some reorientation of these programs has occurred, their
occupational distribution continues to stress traditional areas of home
economics and agriculture, along with office and industrial occupations. It
is essential that vocational training programs be more rapidly transformed to
conform with the changing pattern of the economy and of its labor
requirements. A comprehensive evaluation of the role and effectiveness of
vocational education is a necessity for developing sound national manpower
policies. The establishment of the Advisory Council on Vocational Education to appraise the results of the Vocational Training Act of 1963 is a
step in the right direction. Its evaluation and recommendations must be
placed in the perspective of the future manpower needs of the Nation and
the various alternative methods of meeting these needs.
The apprenticeship programs operated in cooperation with the Federal
Government are more directly focused on providing the skills needed by
industry. In the past year, 25,000 workers completed apprenticeship programs, primarily in the construction trades. There are currently 237,000
federally registered apprentices. The completion rate in these programs
was 60 percent, but many dropouts found other work or returned to school.
The rapid growth in the demand for skilled craftsmen in factories and
construction requires an expansion of apprentice training. However, there
is some question whether the expanding needs of the construction industry
can better be met by traditional apprenticeship training aimed at the production of fully qualified craftsmen rather than by training specialists
with a more limited range of skills. A great deal needs to be done to
increase the enrollment of minority groups in apprenticeship programs.
Encouraging signs have been observed in certain major northern cities, particularly in the form of cooperation with trade unions and civil rights
groups in New York City, Cleveland, and Chicago, but they are only a
beginning.
Issues in Manpower Training
The large and rapid expansion of Federal training activities obviously
responds to a major need, and it is clear that such programs will be and
should be further expanded in the years to come. In recognition of this
fact, it is important that a number of issues be clearly faced.
(1) Manpower training has several interrelated objectives. Different
kinds of training programs are needed for pursuing each of these objectives,
and decisions need to be made as to the relative emphasis to be placed on
each. Broadly speaking, training is needed for three purposes. First,
training is needed for the disadvantaged who are barely, if at all, employable without it. Second, training or retraining is needed for workers who
suffer no special deprivation or disadvantage other than that they lack the
IIO
specific skills now in demand by employers. This is a need which will continue—and increase—in an economy marked by rapid technological
advance. Third, training is needed to help break immediate skill bottlenecks. To the extent that expanded employment of unskilled workers
is held back by shortages of special skills, breaking these bottlenecks can
advance the prospects of noninflationary expansion of total employment.
The other issues, discussed below, may be resolved differently depending
on which purpose is to be served by a particular training program.
(2) The relative responsibilities of public agencies and private employers
need to be evaluated. Despite the large expansion of public manpower
training, private training activities greatly exceed public. Obviously, the
incentive for employers to provide training varies, depending on the nature
of the skills involved, the character of the industry and the characteristics
of the trainees. In many cases, no single employer in an industry may have
an economic incentive to train workers many of whom will work for his
competitors or employers in other industries. Devising special forms of
incentive or subsidy which would induce private employers to expand their
own training programs is a challenging problem. So far as possible such
incentives should avoid rewarding employers for what they are already doing
and what is already advantageous for them to do.
(3) Further study is needed of the relative merits—in public training programs—of institutional versus on-the-job training, and—within institutional training—of the contribution that can be made by regular educational institutions of various types.
(4) The relative importance to be given to the work and the training
aspects of work-training programs needs to be specifically considered.
There may be clear public purposes to be served in employing the disadvantaged in such programs, particularly in the city ghettos, whether or
not any significant training emerges as a byproduct, and even if the jobs
have something of a "make-work" character. Advocates of certain types
of work-training programs are proposing a system of residual public employment for persons otherwise unemployable, with training as one ostensible
purpose. Yet the design of a program may be such that many of those
initially enrolled are unlikely ever to be prepared to move on to regular
jobs. There may well be a useful role for such programs, but the issues
and purposes involved need to be frankly faced.
(5) The proliferation of Federal, local government, and private training programs—often designed to serve the same or overlapping clienteles—
has led to a number of problems and some inefficiency and duplication, particularly at the local level. Recent Federal efforts have been devoted to
improving this coordination, and good results are being achieved in a number of cities under the leadership of the President's Committee on Manpower.
There are also problems of coordinating training activities in local areas
with other programs designed to serve disadvantaged groups. There have
III
also been problems, now being resolved, of coordinating program planning
and management at the national level of the Federal Government.
(6) New methods need to be developed for finding, reaching, and
motivating more of the unemployed to undertake training. This requires
analysis of incentives, such as training bonuses, earnings allowances for persons receiving public assistance, provision of day care centers for mothers of
dependent children, training allowances for long-term unemployed who
have exhausted their unemployment insurance benefits, and many other
issues.
(7) Most generally, a great deal more study and evaluation of the
effectiveness of existing training programs is needed. Very little systematic study and evaluation has yet been made of the rapidly expanding
Federal activity in this field. Most of the programs are still very new.
Moreover, since some of them are intended to solve problems of special
difficulty, there is no traditional standard against which to measure effectiveness. It may cost several times as much to prepare an illiterate youth
from the slums for employment as it does to improve the skills of a literate
adult with previous work experience. Yet the investments may well be
equally rewarding for society. The increase in productivity which can
result is only one of the economic benefits, and the benefits are not only
economic. Nevertheless, the objectives and benefits should, as far as possible, be quantified and compared with the costs. This is surely important
where alternative programs serve essentially the same objectives. Substantial research is needed on the effectiveness of different, and particularly
of new, training techniques.
Considerably more knowledge of the population that can benefit from
the various kinds of training can help in designing more effective programs.
The Government plans a large sample survey early in 1968 to collect more
detailed information on the nature, extent, causes, and concentration of unemployment and poverty throughout the United States. In addition, special
surveys of ghettos and depressed areas in large metropolitan cities are
planned by the Department of Labor. The information will be extremely
useful for improving the effectiveness of existing manpower programs, and
for designing new programs to combat the unemployment and poverty that
remain during a period of extended prosperity.
It is now clear that large sums will be spent for training, over a considerable period of years. Because the objectives are vitally important
and their attainment costly, every possible effort must be made to increase
the effectiveness of training programs. The Federal Government will
undertake this year an intensive general review and assessment of the Nation's needs for training and retraining, of the effectiveness of various
methods, of the organization of training efforts, and of the relative responsibilities of Government and industry.
Expanded and improved manpower training—both public and private—
is an essential requirement for achieving further reductions of unemployment
112
in a context of general price stability. Through providing the skills
needed by an economy undergoing rapid technological change, and helping
those who are presently unemployable or only marginally employable to
become productive workers, manpower training—along with improved job
placement and job counselling, and a reduction of discrimination—can
permit a more rapid rate of economic growth involving progressively fuller
use of human resources. It can help the Nation avoid the painful choice
between the two goals of lower unemployment and stable prices. More
importantly, it serves larger human purposes.
Although precise targets cannot be set for the ultimate minimum level
of unemployment or the speed of the downward movement, it is clearly
unnecessary and undesirable to accept 4-percent unemployment as a permanent objective of U.S. economic policy.
IMPROVING THE PERFORMANCE OF PRODUCT MARKETS
Progress toward the goal of fuller utilization of resources along with price
stability will require improving the performance not only of labor markets
but of product markets as well.
Active and vigorous competition offers the strongest defense against the
tendency for prices to rise as full utilization of resources is approached.
When competition is weak, profit margins in a prosperous economy are
likely to be high. To be sure, high profit margins, once established, make
no further direct contribution to rising prices. But to the extent that the
higher profit margins of a strong economy are initially achieved through
price increases, the price level is directly affected. Moreover, high profits
understandably provide inviting targets for union wage demands. Firms
with strong market power may grant large wage increases, maintaining their
profit margins by raising prices. To minimize such upward ratcheting of
the price structure, it is essential to maintain and strengthen the forces of
competition wherever possible.
Government action can improve the operation of product markets in
other ways. Effective regulation can increase efficiency and reduce prices
for essential utility services. And the numerous programs of the Federal
Government which directly or indirectly affect costs or prices can and
should be administered in a way which attempts to avoid unnecessary or
unintended upward pressure on prices, and where possible to alleviate such
pressures.
STRENGTHENING COMPETITION
The virtues and benefits of free competition have long been among the
fundamental premises of the American system. The dynamic growth and
vigor of the U.S. economy and this country's position of industrial leadership in the world have in good part reflected the emphasis which public
policy has placed on encouraging and strengthening competition.
The promotion of competition reflects values other than purely economic
ones, and economic values other than those related strictly to costs and
prices. However, one principal reason why competition in product markets is supported is that it spurs firms to control or reduce costs, and insures
that the benefits of cost stability or cost reduction are passed on to consumers.
The intensity of competition among the firms producing a given line of
products or services varies widely among the many sectors of the American
economy. In many lines individual firms have virtually no control over
prices. Their product prices are set by the market in almost the same way
as are prices for soybeans or livestock. At the other extreme there are sectors
where strong market power makes it possible for firms to establish prices
which yield good profits even when capacity utilization is low, and rapidly
expanding profits as utilization rates move up. In many other product lines,
producers have some degree of market power, the effectiveness of which
varies with the state of capacity utilization.
The market power of firms is limited not only by the competition of existing
rival producers of the same product but also—though again in varying degrees—by the potential entry of new producers (sometimes including the
industry's own customers) and by competition from producers of other
products and services. In today's world of rapid technological change, completely new products or services—often produced by firms in another industry—may provide the strongest competition for established products (for
example, plastics with metals, automatic washers with laundries, television
with movies).
The intensity of competition has been substantially increased in recent
years by the growth of international trade and the gradual reduction of barriers to such trade. U.S. firms seek markets all over the world and foreign
firms are increasingly active in U.S. markets.
Actual and potential competition is a powerful force restraining unnecessary price increases, promoting product improvement, and inducing firms
to seek efficiency and to find new methods for producing at lower cost.
The effectiveness of competition is maintained and increased through vigorous enforcement of the antitrust laws.
It is essential to apply the law against collusion among competitors to fix
prices or to share markets. Antitrust efforts are also designed to combat
practices which strengthen market power through reducing the number of
firms in an industry, which erect artificial barriers to the entry of potential
competitors, which delay the introduction of superior products or cost reducing techniques, or which serve to blunt the effectiveness of competitive
price changes. Such practices raise prices for consumers or reduce the
quality of goods which people can buy.
The antitrust statutes assume particular importance in an economy operating near the limits of its capacity. Their vigorous enforcement can
counter a possible inflationary bias in product markets by sustaining and
strengthening competition. Antitrust activities should continue to be fo-
114
cused on this main purpose. In particular, effective antitrust cannot
provide for the protection of individual competitors at the expense of the
protection of competition.
In some areas, unfortunately, the thrust of protective efforts has been
diverted. For example, during the early 1930's many States acted to restrict
competition in the field of retail distribution when the pervasive economic
distress bankrupted many small firms and threatened countless others with
failure. Relief was sought, and frequently obtained, in the form of restrictions on the pricing policies of larger and more efficient firms—especially
chain stores and mail order houses.
RESALE PRICE MAINTENANCE
Resale price maintenance is such a device, largely born in the 1930Js,
which can impair the competitive forces of free markets. It permits the
manufacturer of a branded product to enter into agreements with one or
more retailers in a State, establishing a minimum resale price for that product. These agreements then become binding on all retailers in that State,
regardless of whether they have signed them. Today, resale price maintenance laws are on the books of 40 States but, as the result of a series of
adverse legal decisions, the nonsigner clause has been nullified in some States,
and the laws are now fully effective in less than 20 States. In those States,
firms entering into and affected by price maintenance agreements are exempted from the Federal antitrust statutes as a result of amendments adopted
for that specific purpose. In recent years, proposals have been made in
Congress to amend further the antitrust laws so as to exempt resale price
maintenance agreements from the antitrust laws throughout the United
States. The Administration has consistently opposed such legislation.
Resale price maintenance permits manufacturers to guarantee attractive
margins to retailers in order to encourage them to promote their products
rather than those of competitors. But by providing a shield from competition, price maintenance agreements often raise prices to consumers. Moreover, they can induce the development of excess capacity in some branches
of retailing, as well as blunt price competition in manufacturing industries
dominated by a small number of large firms.
While resale price maintenance is used for many products, including
household appliances, cosmetics, beverages, and many other items, it is most
extensively used in the sale of pharmaceutical supplies and proprietary
drugs. Because of the adoption of Medicare and the growing public concern with improvement in health standards, it is particularly important to
evaluate the impact of resale price maintenance for this group of products.
A basic purpose of the antitrust laws is the maintenance of a market system in which many firms can operate effectively. But protection of inefficient firms is not a purpose of the antitrust laws. A small number of very
large firms will not dominate retail markets in a competitive environment.
For one thing, entry costs in retailing are typically low, so that any attempt
"5
to seize and hold a dominating market share in any major retail market
would be futile.
Whatever the case may have been in the 1930's for depression-born
modifications of the basic competitive philosophy, that case does not apply
in today's and tomorrow's expanding economy. In a healthy and viable
market economy, effective competition will inevitably see some enterprises
falter and go under. But vigorous new firms will be created, and those
with effective managements will survive, prosper, and grow. Prices in markets protected from competition will be higher on the average and less
responsive to changes in economic conditions and consumer demands.
RESTRICTIONS ON INTERNATIONAL TRADE
Foreign competition can be as effective as domestic competition in forcing
producers to hold down costs and prices. This is one of the reasons why,
for many years, U.S. policy has been directed toward a free and open world
trading system with a minimum of restrictions on the flow of goods and
services across national boundaries. In such a system, the spur to specialization and productivity which is provided by international competition serves
not only U.S. commercial interests but those of the U.S. consumer as well.
While the reduction of trade barriers will, in time, benefit all, it can raise
temporary problems for both industry and labor. These problems are
obviously considerably less serious during periods of full employment.
Nevertheless, they exist even then. The burden of these problems can be
reduced in several ways. First, barriers to trade can be relaxed gradually.
The tariff cuts expected under the Kennedy Round will be made over a
5-year period. Second, where an industry or its workers or both are seriously
injured through a reduction of protection, they can either receive renewed
protection from import competition through an "escape clause" action, or
they can qualify for "adjustment assistance"—temporary financial and other
assistance to help them adjust to the new situation. The latter approach is
to be preferred, since the costs to the economy of such support are generally
considerably lower than those of trade restrictions, and the assistance deals
with the underlying problem rather than with its symptoms. The President
recently lifted escape clause protection on watches, which had been in effect
since 1954, and reduced it for glass.
REGULATORY POLICIES
Some major sectors of the economy are subject to extensive Government
regulation. In these sectors where competition is not considered feasible
because of the wastes of duplicative service, regulation substitutes for competition in keeping prices reasonable and service adequate. These regulated
industries are vitally important; they not only originate about one-fifth of
the national income, but they include the very sinews of a modern economy—
electric power, communications, and transportation. The markets and
116
technologies of these industries are subject to the forces of persistent change,
which requires that existing policies be continually reexamined.
The broad issues are often the same as for the nonregulated sectors. Regulation, like other Government policies, must not be diverted to protecting
the established positions of particular firms or industries at the expense of
economic efficiency. Nor must excessive reliance on uniform prices preclude
the use of price differences to achieve the best use of capital intensive technologies. Finally, regulatory policy must not forego the possibilities of
introducing competition when technological change makes this economically
desirable.
A vigilant program of regulation makes a special contribution to price
stability by holding the prices of essential utility services at the lowest levels
consistent with their costs (including necessary profits), thereby helping
directly to stabilize or reduce the cost of living and the costs of other businesses. The opportunities for price reduction are particularly promising because of the special economic characteristics of at least some of the regulated
industries. In several of them, a high elasticity of demand (price reductions
increase volume greatly) coexists with large economies of scale (increased
volumes lower unit costs). As a result, significant price reductions may
sometimes be achieved with little adverse effect on profits and in some cases
with a favorable effect.
Further, public utilities, communications, and some sectors of transportation have experienced particularly rapid productivity gains. In some
cases, wage increases have exceeded those elsewhere in the economy, and
may well have been inconsistent with the standards for wage-price behavior
discussed in the next section.
In these circumstances, regulation is not adequate if it merely protects
consumers against excessive price increases. It must be alert to make certain
that the economy realizes the opportunities for lower prices and improved
service. In so doing, of course, regulation must vigilantly preserve the
strength of the regulated industries and their highly skilled labor force.
Low prices at the expense of profits insufficient to attract the necessary
capital, or wages inadequate to attract the necessary labor, in the long run
benefit no one. Regulation must be flexible to take prompt advantage of
changing technology such as new sources of power, new channels of communication, new modes of transportation, and new ways of using old modes.
At times, such innovations will permit the scope of Government regulation to shrink in favor of greater emphasis on competition.
Well conceived regulatory activities can contribute to the goal of maintaining reasonable price stability in a high level economy moving steadily
toward fuller use of its human resources.
DIRECT GOVERNMENT ACTIONS AFFECTING SUPPLY
The rapid expansion of demand during the last half of 1965 and the
first part of 1966 resulted in numerous bottlenecks which impeded the
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smooth flow of production. In some cases, the supply of raw materials—
especially minerals—could not keep pace with the needs of industry. In
others, an essential piece of equipment could not be delivered promptly. In
still others, transportation facilities were overloaded. All these impediments
naturally aggravated pressure on the prices of either the scarce material or
component, or the finished product, or both.
Many of these problems could only be alleviated by the passage of time,
and some still persist. In a considerable number of instances, however,
Government could and did find ways of assisting.
Scarcities of mineral raw materials were especially prevalent as requirements for military hardware and capital equipment of all kinds rose sharply.
Increases in domestic production of minerals take considerable time, and
for many the United States is dependent in whole or substantial part on
imports. Fortunately, there were substantial supplies of such metals as
copper, aluminum, tungsten, vanadium, and columbium in the strategic
stockpile. As a result of changing military technology, the necessary security
objectives for some stockpile commodities could be and had been reduced.
Disposal of the indicated surpluses was phased and accelerated so as to augment the supplies of some of these critically short materials. Thereby
many interruptions of production were avoided.
Another area which received increasing attention during 1966 was that
of Government procurement. Intensive efforts were made to phase procurement and adjust specifications for both military and civilian purchases
so as to minimize the impact on productive facilities and product markets.
Arrangements were worked out to this end for the closest possible cooperation and consultation between the Department of Defense and the Departments of Commerce and Agriculture.
The Government also sought to smooth out irregularities in the supply
of farm products by appropriate sales of farm commodities from government
stocks, through judicious programing of the timing of P.L. 480 exports,
and through the adjustment of the timing of purchases by Government
agencies. In response to increased export demands and in order to rebuild depleted stocks, the Department of Agriculture adjusted production
programs to elicit increased production of wheat, feed grain, and soybeans
during 1967.
As specific problems developed, other possible forms of Government action
were explored and taken. Thus, the Business and Defense Services Administration of the Department of Commerce was able to expedite delivery
of critical items of equipment on a number of occasions. The Forest
Service of the Department of Agriculture took steps to increase the cutting
of timber in the Northwest. The Interstate Commerce Commission, working with the railroads, alleviated freight-car shortages by speeding up the
turnaround of cars at ports and other delivery points and by pressing for a
more appropriate distribution of the cars available.
n8
It is likely that 1967 will bring more problems of this kind, though they
will not recur in exactly the same form. However, the experience of 1966
demonstrates that Government can make a significant contribution to
smoothing the flow of production and thereby lessening pressures on prices.
WAGE-PRICE POLICIES
Vigorous competition is essential to price stability in a high employment
economy. But competitive forces do not and cannot operate with equal
strength in every sector of the economy. In industries where the number
of competitors is limited, business firms have a substantial measure of
discretion in setting prices. In many sectors of the labor market, unions
and managements together have a substantial measure of discretion in
setting wages. The responsible exercise of discretionary power over wages
and prices can help to maintain general price stability. Its irresponsible
use can make full employment and price stability incompatible.
When demand outruns the growth of productive resources, prices and
wages will rise even in the most highly competitive markets. (Indeed, they
may rise faster and farther than where large firms and long-term labor contracts give some degree of stability.) That kind of "demand-pull" inflation
can be held in check by fiscal and monetary policies which keep demand in
line with productive capabilities. If labor markets are efficient, control of
demand-pull inflation will not require restraints on demand that would
lead to a high unemployment rate.
But businesses and unions can push prices up even when resources are not
fully utilized. That kind of "cost-push" inflation, too, can be controlled by
lowering demand, but only at the cost of an unacceptable degree of economic slack. Frequent recessions, chronically high unemployment, idle
capacity, and a low rate of investment may purchase price stability—but
the cost is too high.
The problem of cost-push inflation has been a matter of concern in
this country and abroad ever since the end of World War II. Shortly after
the war, when many governments, including our own, declared their determination to maintain high employment, many economists predicted that
the irresponsible exercise of market power in an era of high employment
would lead to progressively faster rates of inflation.
These fears were exaggerated. But cost-push inflation has been a
problem in many countries. A number of them have adopted formal
"incomes policies" as a means of limiting inflation. In the United States,
efforts to influence the general level of prices through a national wage-price
policy have emerged gradually during the period since World War II.
These efforts have relied on education, persuasion, and voluntary coopera-
tion. For example, the 1957 Economic Report of the President (pp. 2-3)
included the following paragraphs:
A further responsibility of leaders of management and labor in a free
economy derives from the fact that concentrations of power place in their
hands the ability to take actions that, through the sensitive network of our
economic system, significantly affect the Nation as a whole.
Specifically, business and labor leadership have the responsibility to reach
agreements on wages and other labor benefits that are fair to the rest of
the community as well as to those persons immediately involved. Negotiated
wage increases and benefits should be consistent with productivity prospects
and with the maintenance of a stable dollar. And businesses must recognize
the broad public interest in the prices set on their products and services.
In the introduction to his 1958 Economic Report (p. v), President
Eisenhower wrote:
Business managements must recognize that price increases that are
unwarranted by costs, or that attempt to recapture investment outlays too
quickly, not only lower the buying power of the dollar, but also may be
self-defeating by causing a restriction of markets, lower output, and a
narrowing of the return on capital investment. The leadership of labor
must recognize that wage increases that go beyond over-all productivity
gains are inconsistent with stable prices, and that the resumption of economic
growth can be slowed by wage increases that involve either higher prices or
a further narrowing of the margin between prices and costs.
These injunctions were given more precise content in the "Wage-Price
Guideposts" of the 1962 Report of the Council of Economic Advisers.
THE COUNCIL'S WAGE-PRICE GUIDEPOSTS
The 1962 Report started from the premise that there are important segments of the economy in which large firms or well-organized groups of employees have some discretionary ability to affect the levels of their prices
and wages. Such decisions affect the public interest. An informed public
therefore should have standards by which to judge—and, by judging, to
influence—those decisions. The Council proposed a set of standards for
this purpose as a contribution to public discussion.
These standards—like those more generally described in the statements
quoted above—are based on certain arithmetical relationships among output per man-hour (productivity), wage rates, and prices. These relationships show that, if wage rates increase in line with output per man-hour,
prices can be stable while the distribution of income between labor and
others contributing to production remains unchanged.
Since this arithmetic is frequently not understood, it will be useful to give
an example. If a worker in a particular firm is paid $2 an hour—$80 a
week—and contributes to the production of 200 units a week, output per
man-hour is 5 units (200 units divided by 40 hours) and unit labor cost is
$.40 ($80 divided by 200 units). If, for whatever reason, output rises by 3
percent, to 206 units a week—with no extra labor time required—output
per man-hour is also up 3 percent, to 5.15 units (206 units divided by 40
hours). If the wage rate also rises by 3 percent, to $2.06 an hour ($82.40 a
week), unit labor costs will remain at $.40 ($82.40 divided by 206 units). If
the price of the product is unchanged, the margin between price and unit
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labor cost—available to pay for others' contributions to production—will be
the same. But with 3 percent more units sold, the total amount available
to pay others, including owners, will also rise by 3 percent.
If productivity were to advance at the same pace in every industry, the
same result would apply to the whole economy. But productivity grows at
different rates in different industries. If the wage rate in each industry
should rise at the same rate as productivity in that industry, the prices of
each industry's products could be stable, and the distribution of income between wages and profits would be unchanged both within each industry and
in the entire economy. But some wage rates would rise hardly at all while
others would rise rapidly. That result would clearly be unsatisfactory, for,
after a time, workers with similar skills in different industries would be
receiving widely different wages.
Alternatively, the yearly percentage increase in hourly wages and fringe
benefits in each industry could be the same, equal to the average yearly percentage rise in output per man-hour over the whole economy. Then the
average of unit labor costs in the whole economy would be stable, although
rising in some industries and declining in others. If prices in each industry
were to change correspondingly, rising in some and falling in others, they,
too, would be stable on the average. The sharing of gross income between
labor and ownership would then be unchanged in each industry, and for
the economy as a whole. This is the arithmetic which underlies the Council's 1962 guideposts.
The advance of productivity from year to year is far from uniform, even
though its general trend is reasonably clear. The 1962 Report related the
guideposts to the trend of productivity over a period of years, rather than
to year-to-year changes. This meant that the rise in average hourly wages
and fringes should be steady and smooth, not erratic. Moreover, the
problem of trying to estimate the particular movement of average productivity over the period to be covered by a given wage agreement was avoided.
Consequently, profits would vary with short-run movements in productivity;
and the stable distribution of income between labor and ownership would
then be achieved only on the average over a period of years.
The 1962 Wage Guidepost
The Report proposed as a general rule that hourly labor compensation
should advance in accordance with the trend increase in productivity in the
entire economy. No specific estimate was given of that trend, although
a summary of statistical evidence on the long-run growth of output per
man-hour was provided.
The general guidepost rule was subject to various exceptions—some explicitly stated and others only suggested. The stated exceptions were these:
In the interest of equity, wages of workers who are underpaid because of
weak bargaining power (or other reasons) should rise faster than the
average, while wages of workers who are overpaid because of exceptionally
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strong bargaining power should rise more slowly than the average. In the
interest of efficiency, wages should rise somewhat faster than the average in
industries with a rapidly growing employment (in order to aid recruitment),
and more slowly in industries with labor surpluses. Moreover, workers who
contributed to an extra rise in their own productivity—for example, by
consenting to the relaxation or removal of restraints on the freedom of their
employers to change work rules or introduce new methods—should be
allowed to share in the benefits of that extra productivity gain.
The Report suggested, without listing them, that there were other factors
which could justify deviations from the general rule. One such factor
may be the recent history of wage movements: if wages for one group of
workers have increased faster than the productivity trend in the recent
past, they should rise more slowly now, and vice versa. Moreover, there
might be occasions for the removal of glaring inequities between wages in
different plants, areas, or occupations which—although they created no
immediate labor supply problems—might do so in the long run if not
corrected. Presumably this would be accomplished both by slower increases
for the favored groups as well as by faster increases for the disadvantaged.
No reference was made to any deviation from the general rule because
of a rise in consumer prices—an issue to be discussed below.
If the wage guidepost were generally observed by organized groups of
workers with discretion over their wage rates, and there were no excess
demand in the economy, the 1962 Report assumed that compensation in
unorganized sectors would rise at the same average rate, equal to the gain
in over-all productivity. If this were the case, then hourly wages plus
fringes in all industries would rise by about the same percentage, and by
about that same percentage every year. The average of unit labor costs in
the economy Would be unchanged in the average year.
But unit labor costs would not be unchanged in each industry. In some
industries—in which the trend of productivity exceeded the general
average—unit labor costs would show a downward trend. In others—
where the trend of productivity was below the over-all average—unit labor
costs would show an upward trend.
The 1962 Price Guidepost
The general guidepost rule for prices was that
—in industries in which the trend of productivity about equaled the
average for the economy, prices should be stable;
—in industries in which the trend of productivity was steeper than the
average, prices should fall; and
—in industries in which the trend of productivity was below the
average, prices could appropriately rise.
It has been noted, however, that the over-all productivity gain of any
given year will diverge from the trend. Such divergences from trend arc
even more pronounced in individual industries. Thus in particular years,
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unit labor costs might rise or fall for a particular industry without affecting
the recommended trend of prices for that industry. This would result in
year-to-year changes in the sharing of gross business income between labor
and ownership—both in individual industries and in the whole economy.
Corresponding to the exceptions to the general wage guidepost, there
were exceptions to the general rule for prices. Prices could rise more than
the general rule would indicate in an industry in which profits were inadequate to attract the capital to finance a needed expansion in capacity, or costs other than labor costs had risen. Prices should fall, in comparison
with the general guidepost rule, in industries where productive capacity was
excessive or where costs other than labor costs had fallen. Prices should
also fall, in comparison with the general rule, where "excessive market
power had resulted in rates of profit substantially higher than those earned
elsewhere on investments of comparable risk."
Although the price guidepost was directed only at industries in which
firms possessed some pricing discretion, the 1962 Report assumed that if
prices in these industries conformed to the guideposts, the average of prices
would also be stable in the other, highly competitive industries (including
agriculture and most services) where firms had no discretion. If this were
true, then the average of all prices would be stable. And since money
wages would have advanced by the same percentage as productivity, the
advance of real wages would equal the advance in productivity.
The Guideposts in Subsequent Council Reports
Reports of the Council since 1962 have preserved the general concepts
of wage and price guideposts presented in the 1962 Report. However, the
Council has given increasingly clear indications of what it regarded as the
trend of productivity which should govern wage movements. In the 1966
Report the Council specifically recommended that the general wage
guidepost be 3.2 percent a year.
Most of the exceptions to the general guideposts, both for wages and
for prices, that were explicitly stated in the 1962 Report have continued to
appear in subsequent Reports. However, the possible applicability of these
exceptions has been less emphasized. And the possibility of other, unspecified
exceptions has not been mentioned. Moreover, whereas the 1962 Report had
emphasized that the guideposts were "guides" not "rules," and were
presented as a "basis for discussion," subsequent statements by the Council
and others in the Administration have been interpreted as treating the
guideposts as firm, though voluntary, rules, and those who fail to adhere
to them as "violators."
How the Guidepost Policy Has Worked
In the areas in which the guideposts were expected to apply—among
strongly organized groups of workers and in firms which have appreciable
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discretion with regard to their prices—the guideposts were reasonably well
observed, at least until mid-1966.
Strong labor unions are concentrated in manufacturing, mining, construction, and transportation. Data on the average change in hourly earnings
or in total compensation for the total private economy are therefore not
particularly helpful in appraising adherence to the wage guidepost.
The most relevant figures are the fragmentary data on important new
collective bargaining settlements referred to in Chapter 2. These indicate
that until the second half of 1966 the median of such settlements (excluding
construction) was only modestly in excess of the general wage guidepost.
(However, since many were below the median, there were also some appreciably above.) Construction settlements, on the other hand, consistently
and significantly exceeded the general guidepost. Especially in 1966, transportation settlements (for example, airlines and New York subways) were
far above the guidepost. Within manufacturing, automobile wages advanced at a rate much above the guidepost, and recent settlements in the
electrical equipment manufacturing and telephone industries also were
about 11/2 percentage points in excess.
Nevertheless, a number of the most significant union settlements—including the key steel bargain of 1965—were at or close to the general
guidepost.
It is difficult to generalize about the extent to which the price decisions
of firms with price discretion have adhered to the guidepost. It is clear that
some significant price reductions which the guidepost would have suggested
have not occurred. Automobile prices are doubtless such a case. Steel
prices have edged up only moderately, on the average, but it is possible that
the guidepost would have permitted some slight increase. The pricing of
aluminum—particularly of fabricated aluminum products—could surely
not have been consistent with the general guidepost. Producers of steel and
aluminum have argued, however, that their relatively low profit positions
called for some price increase in order to retain or attract needed capital.
Other important price increases about which guidepost questions might be
raised include those for newsprint, gasoline, alloy and specialty steels, some
chemicals, and agricultural machinery.
For cotton textiles, a sharp decline in the cost of raw cotton would have
suggested price reductions; but it can be argued that no individual producer in this highly competitive industry has significant discretion about his
prices, and that what happened was a purely supply-demand response. This
argument will be tested by what happens to cotton textile prices in the
months ahead. Prices of machine tools and of many other types of industrial equipment have undoubtedly risen substantially faster than costs. However, in view of the excess demand for this category of goods, it seems clear
that producers have practiced restraint, and that—in a purely competitive
market—prices would have risen faster and farther.
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In the minerals industries, increases in sulphur and the small increase in
copper (until January 1967) again are cases in which price restraint has
clearly held prices below levels which would clear the market, even though
a pure guidepost policy might not have implied any price increase. Moreover, in these cases, the possible need for higher prices to encourage the use
and development of marginal resources complicates any judgment of the
public interest in these prices.
In general terms, the greatest failure of observance of the price guidepost
lies in the failure to reduce prices on a considerable number of the product
lines of a large number of industries. As Chapter 3 has indicated, a number
of the price increases that have occurred in manufacturing and mining
industries undoubtedly had some justification in higher costs. But offsetting
price decreases have been far too few.
GOVERNMENT ACTIVITIES TO PROMOTE GUIDEPOST ADHERENCE
The 1962 Report proposed the guideposts as a standard for the public
to use in judging the extent to which private price and wage decisions were
consistent with the public interest in a noninflationary economy. However,
the message was directed not merely to the public but also to labor and to
business. The guideposts were designed to define more precisely to labor
and business the Government's view as to what the public interest required
of them. And it was obviously important that labor and business—as well
as the public—should understand why observance of these standards was
in the public interest, and why it was also in the long-run interest of both
labor and business.
Clearly, it was not enough merely to publish these standards and assume
that the job was done. The public does not have the information that would
permit it to apply the guidepost standards to particular cases of wage or price
movements. Some reporting is necessary to help the public make intelligent judgments of labor and business behavior. Likewise, so far as business and labor are concerned, the educational process is not achieved by a
single annual statement.
Thus, it is clear that the Government must take an active and continuing
interest in interpreting and explaining the guideposts to both labor and industry on the one hand, and to the general public on the other. Indeed,
there may even be some conflict between the objective of effectively persuading labor and industry to accept voluntarily the disciplines implied by the
guideposts, and that of informing the public so that it can focus its judgments, favorable or unfavorable, concerning particular wage settlements
or price changes. The Administration has been gradually feeling its way
toward a proper definition of Government's role in the process of information and persuasion. Undoubtedly some mistakes have been made. But
some real progress has been achieved.
Three major types of activities have been undertaken. First, the members of the Council of Economic Advisers, various Cabinet and sub-Cabinet
240-782 O—67
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officials, and the President himself have made numerous addresses about the
guideposts to business and labor groups and to the general public. As might
be expected, the Council of Economic Advisers has taken a leading part in
this activity, with literally dozens of speeches, articles for the popular press,
and radio and television appearances. Many of these have received substantial coverage in both the general press and in the specialized press of a
number of industries.
The second type of activity has been an increasing number of private
communications and meetings between Government officials and leaders
of business and labor designed to underscore the public interest factor in
wage and price decisions and to solicit the cooperation of union and corporate leadership in specific situations. With labor organizations, most of this
activity has been carried on by the Secretary of Labor and his associates.
With industry, the Council of Economic Advisers, the Secretaries of Commerce, Treasury, Agriculture, Interior, Defense, and others have participated. However, since the largest number of these contacts has been made
by the Council of Economic Advisers, it seems appropriate that the Council
should provide a report on these activities.
In the past year, the Council became involved in regard to perhaps 50
product lines for which price increases were either imminent or had been
announced by one or more firms. In the typical case, the Council learned
in one way or another of a price increase that was contemplated or that
had been announced by one or more producers. In some instances, companies contemplating price changes themselves brought the subject to the
Council's attention. Where the Council learned of an important actual or
impending price increase, its procedure was to send letters-or telegrams to
all principal producers of the product. In urgent cases, telephone calls
substituted for letters or telegrams. If some firms had already announced
price increases, they were asked to reconsider. Those who had not so announced were asked to avoid them if possible. In all cases, an invitation
was extended to meet with the Council to discuss the matter.
In the private discussions which often followed these communications,
the companies explained the reasons why a price increase was considered
appropriate, and the Government representatives presented any information
available to them which appeared relevant to the price decision.
The Council recognizes in these meetings that it ordinarily does not have
the detailed information which would permit a clear judgment as to the
appropriateness of the proposed price change on either the basis of the
guidepost standards or other relevant considerations. But it explains the
public interest in price stability, and the company is urged to take this
interest fully into account in making its decision. These meetings are
ordinarily not reported publicly, unless revealed by the company involved.
In a few of the cases that arose in 1966, in which the price problems of
an industry appeared to be rather general, a number of the leading producers
were invited to meet with Government representatives to discuss the price
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situations in their industries. Some of these meetings were publicly
reported.
The outcome of these activities cannot be fully known. In a number of
cases, it is clear that price increases which were announced or contemplated
have been rescinded, reduced in amount or coverage, or delayed. Some
companies have indicated that their subsequent price decisions were affected
even where their decision in the immediate case was not changed.
The response on the part of the businesses involved has been extremely
encouraging. Only in rare cases has the Council been told that it had no
right to question private decisions. Almost invariably the companies
involved have recognized a larger public interest in their pricing decisions
and have made a sincere effort to take that interest into account. Some
large companies agreed to give the Council advance notice of their intention to change prices.
This activity will be continued by the Council. It helps to make clear
the rationale of the guideposts to business managements in situations where
their interpretation may be unclear. And it provides the Council a better
understanding of the problems faced by responsible business leaders.
As a third type of activity, the Council has, on occasion, issued formal
statements to the public commenting on particular wage or price decisions.
In the past year, these included statements on wage increases for employees
of the New York Transit Authority, the five airlines involved in the JulyAugust strike, and the American Airlines case. It issued public statements
on price increases for steel (on several occasions), aluminum, copper, and
molybdenum. It responded informally to press questions in other cases.
BASIC PROBLEMS FOR WAGE-PRICE POLICY IN 1967
Two important developments have created the major problems for wageprice policy today. The first is that consumer prices have risen by 3.3
percent in the past 12 months, which makes organized workers—even
in unions which were previously disposed to cooperate with the Government's policy—unwilling to contemplate settlements at or close to the
guideposts. And it gives unions which were never disposed to cooperate
an additional reason for not doing so. The second development is that
corporate profits have increased considerably more than aggregate labor
income, especially when measured from the slack years of the late 1950's
or the recession year of 1961. This provides a second reason for labor's
resistance to the guidepost.
There can be no question that some part of the rise in consumer prices
is due to past failure to observe the guideposts, both by organized labor
and by business. And some part of the faster rise of corporate profits has
been due to.the failure of some businesses to make their price decisions
conform to the guidepost principles (particularly by not reducing some
prices when costs fell).
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But it is clear from Chapter 2 that the primary source of the rise in consumer prices lies in areas to which the guideposts have no applicability: in
farm products, where prices have risen considerably, despite rapid productivity gains; and in services, where wages and professional incomes of unorganized workers have also risen rapidly.
So far as the rise in corporate profits is concerned, much of it would have
occurred had the guideposts been precisely followed. As noted above,
the year-to-year advance of productivity frequently diverges from the longterm trend during years of rapid expansion, and did from 1962 at least
through 1965. Moreover, greater sales volume and higher operating rates
meant lower unit capital costs, thus adding to profits. Consequently, even
if guidepost principles on wages and prices had been literally observed,
profit margins during such a period would have increased sharply, and
aggregate profits even more so. Likewise, the leveling off of profits in
1966—when productivity gains slowed down—is consistent with the guidepost expectation.
Nevertheless, the rise in consumer prices and the increasing share of profits
until the first quarter of 1966 are facts that cannot be disputed nor explained
out of existence. And they cannot fail to influence the behavior of wages
in 1967. Through the effect of wages on costs, they will also influence prices.
A WAGE-PRICE POLICY FOR 1967
The main issues for wage-price policy in 1967 are these:
(a) Should the guidepost for wages be adjusted to recognize in some
way the recent increase in living costs?
(b) Should further recognition be given to special factors—other
than those previously recognized—which appropriately justify exceptions to the general guidepost principles?
(c) To what extent should profit margins absorb cost increases?
Recognition of Higher Living Costs
The Council recognizes that the recent rise in living costs makes it unlikely that most collective bargaining settlements in 1967 will fully conform
to the trend increase of productivity. But it sees no useful purpose to be
served by suggesting some higher standard for wage increases, even on a
temporary basis.
The only valid and noninflationary standard for wage advances is" the productivity principle. If price stability is eventually to be restored and maintained in a high-employment U.S. economy, wage settlements must once
again conform to that standard.
While it can be expected that many wage settlements in 1967 will exceed
the trend increase of productivity, it is obvious that if, on the average, they
should exceed it by the amount of the recent increase in living costs, price
stability could never be restored. If the average wage increase in 1967
were to include a full allowance for productivity plus an additional margin
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to "compensate" for past increases in living costs, unit labor costs would rise
at a rate which would require living costs to continue their rapid rise.
In this connection, it must be recognized that some part of the advance
of consumer prices represents a transfer of income to public uses. Most
State and local governments are compelled repeatedly to raise indirect tax
rates to finance the expansion of essential services. These indirect taxes
enter into prices, accounting for 0.2 percentage point of rise in the consumer
price index in 1966. And in 1967, there will be no offset to the rise in these
indirect taxes (as in 1965 and 1966) from reduced Federal excises. If every
group attempted to offset the burden of these higher indirect taxes by a compensating rise in money incomes, no transfer of real resources to public
purposes could be achieved.
It is not expected that market forces in 1967 will again require that average
wages in the largely unorganized sectors—agriculture, trade, and services—
should rise faster than in the organized segments—manufacturing, mining,
construction, and transportation—in order to promote an efficient allocation
and use of labor. But the higher minimum wage effective in 1967 will
have its principal impact on wages in the unorganized sectors, and in the
largely unorganized low-wage segments of manufacturing. Thus there will
be some continued pressure on costs and prices originating in wage increases
outside of the organized sectors.
In 1967, the national interest continues to require restraint in wage
settlements; indeed, it is more essential than ever that restraint be practiced
in order to turn the trend of prices back toward stability. If restraint
cannot mean an average wage advance only equal to the rise in productivity,
it surely must mean wage advances which are substantially less than the
productivity trend plus the recent rise in consumer prices.
Although the Council recognizes that some allowance will frequently be
made for higher living costs in 1967 settlements, it continues to believe
that arrangements which automatically tie wage rates to changes in consumer price indexes will contribute to inflation. One union may be able to
protect its members in this way against any deterioration in its real wage or
any real impact from increased indirect taxes. But it does so only by imposing more of the burden on others. And if all unions—and other groups in
society—were to succeed in tying compensation to consumer prices, the
arrangement would become a vast engine of inflation, which, once it began
to roll, would continue to gain speed.
Guidepost Exceptions
The most frequent criticism of the present wage guidepost—after the
criticism that it fails to allow for the rise in consumer prices—is that it fails
to provide sufficient exceptions for the many special and individual circumstances of which account must be taken in wage negotiations. This criticism
requires consideration.
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A guidepost exception has always been made for low wages. In a year
in which the minimum wage will advance 11 percent, from $1.25 to $1.40
an hour, with an inevitable impact on wages previously near the new
minimum, this exception is obviously significant. The fact, however, that
few strong unions exist among low-wage workers gives the exception only
limited relevance for collective bargaining.
It surely does not justify large wage increases for high-wage unions.
Indeed, the productivity arithmetic suggests that, if an exception for lowwage workers is to be meaningful in permitting low-wage workers to receive increases in real wages, high-wage workers who have profited in the
past from exceptionally strong bargaining power must respect the counterpart exception that their wage increases should be less than the average.
Second, the guidepost principle has always contained a clear exception
for wage changes that serve an economic function by assisting in the reallocation of labor toward shortage occupations and industries. Thus, for
example, no complaint has ever been made in the name of the guideposts
with respect to the large wage increases recently received by nurses.
Indeed, in a high-employment economy, the importance of differential
wage changes as an instrument of labor reallocation is greatly increased,
and, this exception is more important today than in earlier years. However, the Council suggests that, as a general principle, an exception to the
guideposts for workers in a shortage occupation should be claimed only
where the union involved stands ready to lift every artificial barrier to
entry into the occupation, and to cooperate fully in public and private
efforts to train whatever numbers of workers may desire to enter the occupation. Moreover, as indicated in Chapter 2, the remaining labor shortages
this year will be concentrated in unorganized professional and technical
occupations.
Other exceptions have frequently been proposed for incorporation in
a national wage policy.
One such proposal is to allow for the narrowing of differentials between
wage rates paid in different industries or by different employers for similar
work—the so-called issue of "comparable wages." To the extent that such
differentials may interfere with a rational allocation of labor, their correction is already encouraged by the exception just discussed.
The public interest obviously requires that wage settlements pay appropriate attention to factors of comparability. But it cannot accept inflationary settlements ever)' time this justification is alleged.
At least within a single labor market area, it is surely desirable that workers
in occupations requiring similar training, skill, education, and responsibility
should be paid the same wage. This is less obvious as between labor markets.
Even within labor markets, some wage differentials may reflect the fact
that one employer finds it worthwhile to pay above-average rates in order
to insure low turnover, good morale, and greater selectivity in hiring, while
another prefers to pay lower rates and forego these advantages.
130
It is probably true, on the whole, that the dispersion of wages for similar
work by similar workers is larger than it should be from the point of view of
either efficiency or equity. But the wage comparisons made in collective
bargaining disputes often have little or no relevance either to resource allocation or to equity. Very often the wage comparisons in collective bargaining are only part of a game of follow-the-leader which, at best, is irrelevant
to resource allocation and, at worst, speeds up a wage-price spiral.
Many recent instances in which outsized wage agreements have emerged
from collective bargaining—based on claims that such increases were necessary in order to achieve wage comparability—have created more problems of inequity and inefficiency than they have resolved. Meaningful
wage comparisons should be made not only with wages that are higher
but also with those that are lower. Otherwise, wage increases to achieve
c
'comparability" may actually reduce it. Unions can always find some
group of workers more highly paid than they—whether or not all other conditions are similar. If all corrections of such "inequities" are upward, labor cost inflation is inevitable.
One recent important collective bargaining dispute produced a highly inflationary uniform percentage increase for the entire work force involved. The justification was that an increase of this magnitude was necessary to correct what may have been genuine disparity between the wages
of a small group of specialized workers and similar workers in other employments. The mediation committee which recommended the settlement
recognized that, for the great majority of the work force involved, wage
rates were already as high as or, higher than those for comparable workers. But they could not recommend des#oying the customary relationship between the wages of those workers for whom the disparity was
found to exist and the wages of all other members of the work force.
This is a clear recipe for inflation.
Another exception frequently urged is that, in industries with rapid productivity gains, wages should rise faster than the average. If such an exception were made, it would necessarily impart an inflationary bias to the
system—for no one argues that wages will or should rise less rapidly or not
at all in industries with little or no productivity gain.
It is clearly in the public interest for unit labor costs and prices to fall in
industries with relatively high productivity gains. In the long run, falling
unit labor costs do result in falling prices (except where there are offsetting
increases in other costs). But the long run may be too long for labor's and
the public's patience. And sometimes the very factors that produce falling
costs may work against price reduction. For example, the industries in
which labor costs are falling are often those in which demand, and thus production, is expanding most rapidly—a situation which weakens rather than
strengthens the competitive forces driving down prices.
If there is a long lag between a reduction in labor costs and a reduction
in prices, it is difficult to make a convincing case that high wage settlements
in industries with high productivity growth are not in the public interest.
As the 1964 Report (p. 120) put it:
Such circumstances pose a most unattractive dilemma from the viewpoint
of the public interest. On the one hand, extra increases in wages or fringe
benefits might tend to spread to other industries, creating a general cost-push
from the wage side. On the other hand, there is no justification, on either
economic or equity grounds, for distributing above-average gains in productivity exclusively through the profits channel. The real way out of this
dilemma is for the firms involved to remove its cause by reducing prices.
That statement is as important in 1967 as it was in 1964. Indeed, it forms
one of the most significant elements of a national price policy for 1967.
Another of the reasons given for an exception to the wage guidepost is
ability to pay. In practice, this refers to the profits of the bargaining employers. Ability-to-pay considerations are, of course, often related to
the industry's own productivity trend. Industries with rapid productivity
gains, falling labor costs, and stable prices are industries in which profits have
risen.
But ability-to-pay considerations arise independently in another context.
In any period of rapid expansion toward full utilization, profits inevitably
rise faster than total employee income—just as profits fall more rapidly when
utilization rates decline. The past 5 years have been such a period of rising
profits. It is not surprising that trade unions seek to share in the profits generated by prosperity.
The record shows, however, that attempts on the part of unions to redistribute income from profits to wages through excessive wage increases
in high-profit industries results primarily in higher prices in those industries.
When this happens, the effect is to redistribute real income from the rest
of the community—who are mostly other wage earners—to the workers in
question, with very little redistribution from profits to wages.
To avoid a wage-price spiral it is therefore essential that firms with
discretion over prices—and particularly those with unusually high profits—
pursue price policies which will not invite excessive wage demands.
Price Policy for 1967
The foregoing discussion (and that of Chapter 2) has indicated the
essential character of the problems which businesses with pricing discretion
will face in 1967:
(1) Wage contracts newly negotiated in 1967 will tend to raise the unit
labor costs of many firms and industries.
(2) Nevertheless, many important industries will continue to operate in
1967 under labor contracts negotiated in 1965 or 1966, which often will be
consistent with declining unit labor costs.
(3) Although the cost of purchased industrial products may frequently
be higher in 1967 than in 1966, the^purchase cost of some raw materials
will be lower.
132
(4) Many firms in 1967 will be using new and modern capital equipment
installed during the past year, and will be under less pressure to operate
marginal units. Often this will involve substantially lower costs.
In short, the cost picture for price setters in 1967 will continue to be a
mixed one.
Although average profit margins of manufacturers declined in the second
half of 1966, they were higher for the entire year—at least as a percentage
of equity—than in any prior year since the highly inflationary year of 1950.
In the past, profit rates like those recorded in 1966 endured only for brief
periods. Profits rose rapidly in cyclical expansions. But as the economy
reached and quickly passed a cyclical peak, reductions in capacity utilization retarded the growth of productivity and intensified competitive pressures, with a resulting erosion of profit margins. If public and private policies now succeed in maintaining a steadily expanding economy, it follows
that the profit margins which were feasible only in the boom stage of a
boom-bust economy—and therefore may have been appropriate in that
stage—are inappropriate in a steadily prosperous economy.
Once firms can become accustomed to operating in a more stable environment, the profit margins which they now seek to achieve in periods of high
utilization can be reduced, as no longer necessary to make up for the low and
frequently inadequate profits of periods of slack and recession. In fact,
profit margins not only should be lower than in the boom phase of a cyclical
economy, but should be reduced on the average because operations in such
an environment carry lesser risk.
It is true that an adjustment to lower profit margins may be feasible and
appropriate only if steady economic advance can be maintained. But it is
equally true that such an adjustment of margins may itself be required if a
steadily high employment economy is to be maintained.
In an economy which grows steadily but does not outrun the growth of
capacity, there will be vigorous competition, and, ultimately, profit margins
in most industries should seek an appropriate level. But competitive pressures work slowly. In industries where a small number of leading firms
possess strong market power, they work very slowly indeed. Firms in those
industries in which market power, combined with strong demand, has pushed
profit margins to record levels, have a special responsibility in price-making
at this critical time.
If, in 1967, firms with discretion as to their prices should follow pricing
policies which even maintain present margins, the opportunity for a significantly improved price record will be compromised. It would speed up
the rise in living costs, and it would again pose inviting targets for inflationary
wage demands by unions.
To assume steady movement toward price stability in 1967, the public
interest requires that producers absorb cost increases to the maximum extent feasible, and take advantage of every opportunity to lower prices.
133
In so doing, they will make an important contribution to strengthening
America's international competitive position and to a climate that will
permit the economy to maintain the forward momentum which will preserve
and enlarge the gains of the past 6 years of rewarding prosperity.
134
Chapter 4
Selected Uses of Economic Growth
GREAT FINANCIER is said to have remarked that compound
interest is the eighth wonder of the world. No doubt he was referring
to its remarkable properties in enhancing private fortunes. However, those
concerned with national policies for economic growth have also become
aware of the power of compound interest. If the American economy continues to grow at 4 percent a year, output will double in 18 years, triple in
28, quadruple in 35. If that potential is wisely and efficiently shared among
competing uses, great advances in the economic well-being of all Americans
are assured.
Literally billions of private and public decisions determine the distribution
of the growing gross national product (GNP) among consumption, investment, and Government purchases, and—within each of these categories—
among the myriad of individual goods and services the economy can provide.
Consumption decisions of households and the investment decisions of
business firms determine the uses of output in the private sector. But these
decisions are inevitably affected by public policies. Monetary and credit
policies and changes in tax rates and tax incentives restrain or encourage
consumer and business outlays and influence their composition.
The budget-making process at Federal, State, and local levels determines
the share of output used to meet public needs. Taxes and public spending
represent a substantial share of the national product. Moreover, in a
growing economy with given tax rates, tax revenues move upward strongly
over time and call for continued decisions on increases in public expenditures, tax reductions, and debt management. Public policy cannot be
neutral in its impact on the allocation of the gains from economic growth.
How these gains should be distributed must be squarely faced as an issue of
public policy.
A
PRIVATE AND PUBLIC GOODS
Households directly purchase the greater part of our national output
to meet their wants and needs as consumers. Personal consumption expenditures now constitute 63 percent of GNP. The share has been as low as
52 percent in World War II and as high as 83 percent in the depression
135
year 1932, but has recently been relatively stable. Most of the future
increase in output will surely take the form of more goods and services for
consumers.
CONSUMER CHOICE
Growing incomes will enable households to enjoy continuing increases in
their standards of living. For those families which are now poor, higher
incomes will mean more of those types of goods and services which most
Americans now regard as necessities—adequate and varied diets, sufficient
health care, satisfactory housing, a good education for their children.
Even for Americans well above the poverty line, a significant share of the
growth in incomes will be devoted to these basic items. With higher incomes,
the proportion of the budget spent for various types of goods shifts in fairly
predictable ways—toward consumer durable goods, travel, recreation, and
other leisure-time activities. Rising incomes provide for more freedom, more
security, more comforts, more cultural opportunity, and more variety in life,
permitting the greater fulfillment of personal aspirations.
EXTERNAL EFFECTS
The buyer receives satisfaction from most purchases he makes, and he
pays the cost. Society as a whole has no important concern about whether
the individual chooses to eat more steak and to buy fewer new clothes,
or the reverse. But there are many instances in which one man's consumption may affect his neighbors significantly. In the technical language of
economists, many economic actions have important "external effects" on
persons who are not decision-makers in the transaction and whose interests
are not normally reflected. Indeed, these actions are increasing in number
as the size, complexity, and interdependence of the American economy
increases.
An extreme form of external effects occurs in the category of commodities
called "public goods." Once created, their use cannot be effectively limited
to a group of paying customers or subscribers. A health program to eradicate communicable diseases is an example of a public good. Police protection and national defense are other examples—where everyone can benefit
without reducing benefits available to others. Since no one can be excluded from the enjoyment of public goods, each person would be tempted
to let his neighbor pay for them, while he spent his own income on goods
which he enjoys exclusively. For this reason, decisions to supply public
goods are everywhere made collectively and paid for collectively by taxes.
In less extreme, but more typical cases of external effects, private decisions
would lead to some production and consumption of goods, but not the
right amount from the standpoint of society as a whole. The modernization
of one house may help to upgrade an entire block, but might not be undertaken if the homeowner had to pay the full cost. The smoke from one
136
man's chimney can spread soot far and wide—and might be stopped if the
originator paid the full costs he is imposing on others. Such cases of external
benefits, which extend to roads, parks, and education, are important reasons
for the growing responsibilities of Federal, State, and local governments.
Another part of these responsibilities stems from a social concern for
equality of opportunity and relief of human misery. There is growing
recognition that many Americans, due to accident of birth or circumstance,
do not share in the blessings of a rich society, have little opportunity of ever
sharing, and moreover, may well see their children, too, denied an opportunity to compete on an equal footing. Programs for income maintenance,
health, education, and cities reflect this recognition and social concern, as
well as awareness of the external costs and benefits.
In meeting social responsibilities of all kinds, there is often a choice
between public production and public encouragement to private production through subsidies, regulation, or financial aids to purchasers. For
example, a comprehensive medical insurance system may reduce the
need for public hospitals for the poor. Decisions in such matters have been
made pragmatically; many are perhaps accidents of history. The postal
service is nationalized while telephone and telegraph service is provided by
regulated private enterprise. Yet these decisions have produced viable
results. In contrast with experience abroad and our own experience in
previous generations, there is no major ideological battle in the United States
today over the scope of the Government sector. Public policy now faces up
to questions of the Government-private mix in a flexible manner, endeavoring to meet the aspirations of our citizenry with greatest efficiency while
maintaining an appropriate preference for decentralization in decision
making.
The increased wealth of the United States permits us to face directly
the problems of poverty, lack of education, ill health, and urban decay as
national issues requiring a coordinated policy effort. Many of these
problems can be solved most efficiently by State and local governments if
they have the resources. Other problems require national policies. The
pace of progress in meeting them will be held back as long as our commitments in Vietnam absorb a substantial share of our economic growth.
But, even in this period, progress can and will be made. And, when the
welcome opportunities of peace arise, we will be ready to intensify our
efforts to build a better America.
The following sections of this chapter discuss selected areas in which
the provision of public goods, the external effects of economic decisions, or
the achievement of humanitarian goals will absorb part of the additional
output which constitutes economic growth. The conquest of poverty,
improvements in education, better health, and the rebuilding of American
cities are expensive. They will make substantial claims even on our growing
137
affluence. Choices will have to be made—not to solve one problem at the
expense of another, but rather to allocate resources in such a way as to permit
balanced progress on many fronts.
INCOME MAINTENANCE
Poverty in the United States today afflicts 32.7 million Americans directly
and every American indirectly. But poverty is curable, and the Nation is
now committed to using a share of the fruits of growth to stamp out this
malady.
POVERTY AND WORK
By definition, the poor have incomes inadequate to provide even the basic
essentials of a decent life in our society. A household is statistically classified
as poor if its total money income falls below levels specified by the Social Security Administration, currently $1,570 for an unrelated individual, $2,030
for a couple, and $3,200 for a family of four. Obviously, any such statistical
classification ignores such factors as assets, particular family needs, and
the variability of income. But it helps to illuminate the extent and character
of poverty.
In the broadest sense, the poor comprise two general categories. The
first, but smaller, includes families headed by an able-bodied male breadwinner whose wages are low or whose employment is irregular. Among
nonwhite families in the South, even breadwinners holding full-time jobs
often do not earn living wages (Table 19). For the entire Nation, however, only 6 percent of all families headed by a fully employed male worker
were below the poverty line in 1965, but this group includes 26 percent of
all poor families. Large family size was a characteristic of many of these
households. Another group—15 percent of all poor families—was headed
by a chronically unemployed man or by one who worked only part-time.
Poverty among families with able-bodied male breadwinners has declined
substantially in recent years. For example, improving nonfarm job opportunities, which facilitated migration from the farm, also meant a welcome migration out of poverty for many rural families. The number of
poor farm households fell by 53 percent between 1959 and 1965 (Table 20)
and represented only 6 percent of all poor households in 1965, although
some of the formerly poor farm families who acquired urban addresses
remained poor.
But most poor families are headed by persons who cannot or should not
be in the labor force, at least on a full-time basis. The aged, the family
consisting of a female head with children, and the disabled are increasingly
becoming the dominant groups of "hard-core poor," accounting for about
half of all poor families in 1965. Rapid economic growth and full employ-
138
TABLE 19.—The poor and their work experience, 1965 *
Poor families
Poor households
(millions) %
Work experience of head of household
Incidence of
poverty
(percent) 3
Number
(millions)
Male
head
Female
head
Male
head
Female
head
6.1
5.4
4.8
1.9
37
1.8
4.3
2.4
3.0
1.2
3.6
1.5
29
40
1.5
.2
1.3
.5
.3
.2
.8
.1
.8
.5
.5
.4
44
3.0
.4
1.8
1.0
.4
.1
.4
2.7
.6
.4
1.7
23
49
24
15
1.0
.7
.1
.1
11
65
Total.
Aged (65 years and over).
All other......
...
Did not work in 1965..
Ill or disabled
Other reasons
Worked at part-time jobs.
Worked at full-time jobs
Employed 39 weeks or less...
Employed 40-49 weeks
Employed 50 weeks or more.
0-3 children
4 or more children.
Souths
.2
1.0
.7
.9
White*
Nonwhite "..
Rest of country«
.1
.1
.5
.4
Male
head
Female
head
66
11
24
11
51
10
8
22
White«
Nonwhite
1 Numbers in this table are based on the Current Population Survey. An enlarged survey of the poor,
now in progress, may show somewhat different results due to sampling error and the use of different interviewing techniques.
2 Households are defined here as the total of families and unrelated individuals.
3 Poor families as percent of the total number of families in the category.
* Percent not shown because of small number of families.
« Estimated by Department of Health, Education, and Welfare.
«Less than 50,000.
NOTE.—Poverty is defined by the Social Security Administration poverty-income standard; it takes
into account family size, composition, and place of residence.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Department of Health, Education, and Welfare.
ment can do little to solve their problems. For them, cash benefits are
essential.
For those of the poor who can work full time, economic growth and full
employment will continue to erode poverty. But for them, too, cash
benefits are required to alleviate the immediate rigors of poverty, while
they take training, while they are being relocated, while they seek and
find jobs.
INCOME MAINTENANCE AND THE POOR
Income maintenance programs financed by Federal, State, and local
governments provide some support for millions of the poor. The poor,
like others, enjoy protection under major social insurance programs,
such as Old-Age, Survivors, and Disability Insurance (OASDI),
Health Insurance for the Aged, and Unemployment Insurance. Roughly
one-third of OASDI benefits, which totaled $18 billion in 1965, went
139
TABLE 20.—Number of poor households and incidence of poverty, 1959, 1962,
and 1965
Number of poor households
(millions)»
Characteristics of head of household
1962
1959
1965
Incidence of poverty
(percent) 2
1959
1962
1965
13.4
12.6
11.5
24
22
19
3.9
3.8
3.8
49
41
39
3.5
1.6
1.9
3.3
1.4
1.9
3.4
1.3
2.1
47
36
63
39
28
56
37
24
55
.4
.2
.2
.4
.2
.2
.5
.2
.3
73
66
64
54
75
65
54
9.4
8.9
7.6
1.5
.9
.7
White
Male
Female
1.1
1.0
.1
.7
.6
.1
.5
.4
.1
Nonwhite
Male
Female
.4
.4
.1
.2
.2
8.0
5.7
3.5
2.2
2.2
1.3
1.0
Total
Aged (65 years and over) 3
White
Male
Female
Nonwhite
Male..
Female.
_ __-
All other *
Farm
Nonfarm
White
Male
Female
Nonwhite
Male
Female
Addendum:
Poverty income gap 7
.
20
18
31
78
15
25
24
39
.2
.2
40
34
32
57
86
86
24
18
17
40
81
79
76
76
7.9
7.0
18
17
15
5.5
3.5
2.0
4.9
2.9
2.0
15
10
37
14
10
34
12
8
30
2.4
1.3
1.0
2.0
1.1
.9
47
38
68
47
38
68
37
29
58
8 11.0
2.8
Percent of G N P
Billions of dollars
13.7
82
12.8
2.3 |
81.6
1
Households are denned here as the total of families and unrelated individuals..
2 Poor households as percent of the total number of households in the category.
34 Includes only one- and two-person households with head aged 65 years and over.
Includes all households headed by a person under 65 years of age and families of three or more headed
by an aged person.
»Less than 50,000.
e Percent not shown because of small number of households.
7 The poverty income gap is the amount which would raise money income of all poor households over the
poverty threshold.
s Preliminary.
NOTE.—Poverty is denned by the Social Security Administration poverty-income standard; it takes into
account family size, composition, and place of residence. Poverty-income lines are adjusted to take account
of price changes during the period.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Commerce and Department of Health, Education, and Welfare.
to the poor and another two-fifths went to households which otherwise
would have been poor. Other programs, such as Public Assistance, Food
Stamps, and Commodity Distribution, provide most of their benefits to the
poor. Expenditures under these programs totaled nearly $7 billion in fiscal
year 1966.
Public Assistance
The major income maintenance program aimed directly at the poor is
Public Assistance. In many respects, this program still reflects conditions
that surrounded its adoption in the depression years of the 1930's, when
President Roosevelt saw one-third of the Nation as economically deprived.
140
At that time it was designed to make cash payments to those who were unemployable and unable to help themselves because of identifiable family or
personal characteristics, including old age, death or absence of the breadwinner, disability, and blindness. But the program has never been adequate,
and with the Nation's growing affluence its shortcomings are even less
tolerable.
The States pay 41 percent of the costs of Public Assistance, and they establish standards of eligibility. In response to general financial pressures,
many States have cut costs by establishing low standards of need and imposing stringent requirements relating to length of residence, other income
and assets, and relatives' responsibility. Less than half of the poor fall within
the Public Assistance categories; as a result of State eligibility requirements,
only 22 percent actually receive any help; and for those on the rolls actual
payments typically fall far below need even as defined by the State itself.
One of the Public Assistance programs, Aid to Families with Dependent
Children (AFDG) can actually promote family dissolution. Because it excludes families in which there is an employed (or in some States, employable)
adult male, a man unable to provide adequately for his wife and children
can make them eligible for cash payments only by deserting them. The
Unemployed Parent Program under AFDC, introduced in 1962 and now in
operation in 21 States, therefore represents a gratifying step toward improving the present Public Assistance system.
However, other problems with Public Assistance remain. For example,
some of those who receive aid may be discouraged from helping themselves.
The cash payments are intended for those with no earning capacity and
are curtailed to the extent that recipients have earnings. While relatively
few recipients of Public Assistance can work, some mothers with dependent
school-age children and most fathers under the Unemployed Parent program, who might supplement their benefits with earnings, are discouraged
from making the effort by knowledge that their assistance payments will be
reduced one dollar for every dollar of earnings.
The President is proposing important amendments to the Public Assistance
system this year. They would require each State, as a condition for Federal support, to make assistance payments at least sufficient to bring households up to the needs standards which the State has established and to
update these standards as conditions change. The proposed legislation
would also alter the payment formulas to encourage self-support.
The categories of persons eligible for aid under Public Assistance were set
up in the 1930's. At that time, poverty was so extensive that benefits could
be provided only to those obviously unable to support themselves.
But these categories no longer seem adequate for a rich and prosperous
society. In particular, it is necessary to consider the plight of one group excluded from virtually all existing programs—the 4 million poor households
240-782 0—67
10
141
headed by an able-bodied male under 65 who is, nevertheless, an inadequate
breadwinner. In the longer run, education, training, health and rehabilitation services, counseling, employment information, and other supportive
services are the key escape routes from poverty for potential full-time workers
with currently inadequate earning capacity. In the interim, ample benefits
to families with children have particular priority because they can help to
end the poverty cycle in which blighted environment denies poor children
the skills and the attitudes they need to break out of poverty as adults.
Mothers with dependent children have particular needs for day-care schools,
family management education, and transportation. Special programs, keyed
to special problems, can reinforce a more general program of cash payments
based on need.
TOWARD IMPROVED INCOME MAINTENANCE FOR THE POOR
Ideally, an income maintenance system should provide benefits on the
basis of need, without degrading means tests, while preserving incentives for self help. These goals could be achieved through broadening
the Public Assistance program or through new techniques, such as a minimum income allowance or negative income tax. Much public attention recently has been focused on methods of guaranteeing a minimum
income, perhaps sufficient to eliminate poverty altogether.
In considering these or any other new approaches, the question of incentives has to be faced squarely. The poor cannot be expected to work
without pay, any more than can the rich. If sufficient cash support were
offered to raise each poor household's income to a fixed minimum, such as
the poverty threshold, then recipients would have no incentive to obtain
outside earnings up to the level of the income guarantee. Every dollar
earned would be offset by a dollar of cash support lost. Indeed, some
persons whose incomes were only slightly above the poverty threshold might
find it attractive to reduce their work effort and to receive cash benefits.
Incentives for self help would thus be dulled. But if benefit payments were
cut back by only a fraction of any additional outside earnings, some benefits
would be paid to families with total incomes above the poverty level, increasing the cost. There is an abundance of assertion and anecdote regarding the
impact of work incentives on low-income Americans, but little real knowledge. The Office of Economic Opportunity and the Department of Health,
Education, and Welfare are each planning to undertake some pilot studies
in the coming year.
SOCIAL SECURITY
Under the Social Security Act of 1935 and successive amendments,
spectacular advances have been made toward providing all Americans with
basic social insurance protection against loss of income due to old age and
retirement, long-term disability, and joblessness. Most social insurance
programs provide protection against these designated risks for the whole
142
population, not just for the poor. Old-Age Insurance under the Social
Security Act is the basic retirement system for nearly all Americans. It
insures many Americans against the risk of poverty in their old age:
30 percent of the aged would be in poverty but for Social Security. Nevertheless, nearly two-fifths of all aged remain poor. This proportion will
decline under existing law, since new retirees will have longer and higher
wage histories which will entitle them to greater benefits.
Further liberalization in benefits—particularly in minimum benefits—can
hasten the day when all Americans will be assured, upon retirement, of a
pension adequate to prevent poverty. Americans with incomes well above
poverty levels also want and are willing to pay for increasing social insurance
protection. Therefore, the President is proposing a substantial liberalization
of retirement benefits under Social Security, involving an increase in the
minimum benefit from the present $44 a month to $70 a month, and a 15
percent increase in all other benefits coupled with an increase in the earnings
base. Modernization and improvement of the Federal-State unemployment
insurance system is also being proposed, in which extended benefits for the
long-term unemployed will be coupled with automatic access to training
and retraining and other rehabilitative services.
In the last Congress, important amendments to the Social Security Act
were enacted to provide health protection for the aged through Medicare
and to liberalize Social Security benefits. With enactment of the new proposals, retirement, disability, and unemployment will have been transformed
for most Americans who have worked from risks which had to be borne
unaided into contingencies against which a substantial measure of public
protection is afforded.
EDUCATION
Outlays for education have been rising by IOJ/2 percent a year for the last
decade, making it one of the major U.S. growth industries. Direct costs for
formal schooling in the current school year will total $49 billion (Table 21),
nearly 6^2 percent of GNP.
Education in the United States is both a public and a private undertaking.
About three-fourths of the costs of education are paid through government
budgets; tuition, endowments, and earnings of private institutions meet the
remainder of the bill. The Federal Government has long played a role in
certain phases of education and has recently taken new large steps. Still,
the bulk of public costs are borne by State and local governments.
VALUE OF EDUCATION
Education provides benefits both for the person receiving it and for
society at large. For the individual, education produces both quantifiable
143
TABLE 21.—Costs of formal education, 1966-67
[Billions of dollars]
Item
Total
Direct outlays-
Higher
education
48.8
32.0
16.8
3.6
14.7
15.7
6.1
8.7
10.7
15.3
2.3
2.8
2.7
4.0
.4
3.8
5.9
20 to 30
8 to 12
12 to 18
Student tuition and fees
State governments
Local governments
Federal Government
Endowment, charity, and earnings of institutions..
Indirect costs: Forgone student earnings i_.
Elementary
and
secondary
education
i Assuming 75 to 85 percent of students 16 years and over could find empoyment at from $1,000 to $4,500
per annum depending on age and previous amount of schooling.
NOTE.—Includes current and capital costs of public and private schools; excludes such items as on-thejob training and other education outside the school. Data are estimates for school year 1966-67.
Detail will not necessarily add to totals because of rounding.
Sources: Department of Health, Education, and Welfare and Council of Economic Advisers.
benefits, such as the chance for a higher paying job, and intangible rewards,
such as the ability to live a fuller life in every sense. Some of these benefits
are private consumption; others are "investment in human capital" which,
like investments in machinery or plant, yield profits over a period of years.
Increase in Earning Power
Many studies show that the quantity of education a person has received
and his earning power are closely correlated. Of course, family income
and family connections, and place of birth or residence—to say nothing of
native ability and motivation—all tend to result in both higher educational
attainment and higher income. However, even after taking account of
such factors, a dramatic story of the net contribution of additional schooling
TABLE 22.
Earnings of males, by years of school completed and other characteristics,
1959 *
White males
Nonwhite males
Age group by years of school completed
North
South
North
South
27-37 years of age:
0-4 years
8 years
12 years
16 years
$3,180
4,227
5,357
7,244
$2,361
3,632
4,782
6,554
$3,090
2,746
3,618
4,229
$1,717
2,017
2,309
3,155
42-52 years of age:
0-4 years
8years
12 years
16 years
3,703
4,928
6,257
9,975
2,737
3,895
5,733
9,006
2,839
3,469
4,220
4,477
1,800
2,199
2,788
3,289
i Unweighted average of the earnings of single-age groups of 27, 32, and 37 years of age and 42, 47, and 52
years of age, respectively.
In computing the earnings, the following variables were held constant: rural or urban origin, size of family,
marital status, 5-year residence in one State or not, and foreign or domestic born parents.
Source: Calculated by Council of Economic Advisers from tables in Giora Hanoch, Personal Earnings
and Investment in Schooling, an unpublished Ph. D. dissertation, University of Chicago, December 1965.
144
to earnings emerges. Table 22 records some of the results of a study of the
income and education of 34,180 employed males, classified according to
a variety of personal characteristics. It shows, for example, that in 1959 a
white, male, high school graduate living in the North (aged 42 to 52) earned
27 percent more than an elementary school graduate whose other measured
characteristics were identical, and a college graduate earned 59 percent
more than a high school graduate.
Social Benefits
Some scholars have used evidence on private returns from education to
estimate the returns on investments in education for the society as a whole.
Some studies suggest that more than one-fifth of economic growth in the
United States during the last three or four decades is attributable to increases
in the average educational attainment of the labor force, with perhaps another one-fifth attributable to the general advance of knowledge.
But many qualifications are required in any attempt to estimate the returns to society from the benefits to individuals who receive education.
For example, employers often use educational achievement as a kind of intelligence or ability test in selecting employees—as a "ticket of admission"
to better paying jobs. To this extent, education tends to yield higher returns to the individual than to society.
On the other hand, education yields substantial external benefits which
will not show up explicitly in the incomes of the educated. Our economy
and our society are built on the assumption of virtually universal literacy,
which permits information to be transmitted immediately and directly
to everyone. Well-educated workers are more adaptable to changing economic conditions. Education can help to reduce antisocial and criminal
behavior. It is essential for political democracy.
Education and the Disadvantaged
In the absence of public expenditures to provide schooling at reduced
prices to all persons, education—like other commodities—would be purchased in largest quantities by the well-to-do. Since education in turn
raises the capacity to earn, this would tend to perpetuate and aggravate
income inequality. Poverty would run through generations in a
vicious circle. The importance of education as a qualification for wellpaying jobs and the recognition that all Americans must be provided with
the opportunity to join the economic mainstream together emphasize the
responsibility of governments to help finance education.
Many of the underprivileged, particularly members of ethnic and racial
minorities, have received less than their share of education. Measured by
average years of schooling completed, nonwhites are today about where
the white population was at least two decades ago. Some of the gaps
145
are being reduced or even eliminated (Chart 13). Nearly all whites and
nonwhites now complete elementary school, but the gap in high school
completion rates remains large even among the 20-24 year old group.
Moreover, nonwhites often receive not only less, but also poorer, formal
education. Also, education acquired in pre-school years and outside the
school is impaired when parents and companions suffer from educational
gaps. Hence, far larger efforts for the educationally disadvantaged are
necessary to bring about true equality of educational opportunity.
It was in recognition of the national importance of education that the
Federal Government undertook a major new initiative with the Elementary
and Secondary Education Act of 1965, which provides financial help on the
basis of the number of children from low-income families. Under this
Act, the Federal Government is spending $1.2 billion in support of elementary and secondary education in the current fiscal year, tripling the
support it provided only 2 years ago. The "Head Start" program has
demonstrated great capacity for benefiting disadvantaged, pre-school children. The Administration is therefore proposing that the benefits of this
program be extended by providing a follow-up program in the early elementary grades.
TRENDS IN DEMAND AND COSTS
Between 1956 and 1966, enrollment in full-time elementary and secondary
day schools in the United States increased by 33 percent, from 37.2 million to 49.7 million. This sharp increase is attributable to the postwar spurt
in birth rates and to greater school attendance by teenagers. Because
roughly half of high school graduates continued on to college while the
number of students graduating from high school rose sharply, college and
university enrollment doubled from 2.9 million in 1956 to 6.0 million in 1966.
In the next decade, elementary and secondary school enrollments will increase only about one-fourth as much as in the past decade. Demand for
college education, on the other hand, is expected to continue increasing rapidly, as the proportion of youths completing high school rises and as somewhat more than half of high school graduates go to college. Projections
for the future also point to a continued very rapid rise in the fraction of labor
force entrants with a college education, which could reduce the returns
from higher education.
Outlays per student-year of formal education at all levels have risen by
nearly 90 percent during the past decade. The increase may reflect, in
part, improvements in the quality of education, but it also reflects higher
costs of education. A major factor in the increase in costs has been the
dramatic rise in professional salaries at all levels, as increased demand for
teachers outran the growth of supply, especially since entry requirements
for teachers were raised in many areas. Salaries rose substantially faster
146
Chart 13
Educational Attainment
PERCENT OF AGE G R O U P *
AT LEAST 8 YEARS OF ELEMENTARY SCHOOL
40
20
65 and Over 55-64
45-54
35-44
30-34
25-29
20-24
25-29
20-24
AGE GROUP (YEARS)
PERCENT OF AGE G R O U P *
100
AT LEAST 4 YEARS OF HIGH SCHOOL
80
20
65 and Over 55-64
45-54
35-44
30-34
AGE GROUP (YEARS)
*BASED ON AVERAGES OF MARCH DATA, 1964-66.
SOURCE: DEPARTMENT OF COMMERCE.
147
than wages generally, and, in response, an unusually large number of former
elementary and secondary teachers returned to the classroom.
Enrollments are expected to rise less rapidly over the next decade than
the number of college graduates available to teach in elementary and secondary schools or than the number with advanced degrees available to
teach in colleges and universities. However, it may take special efforts to
meet acute present shortages of teachers with specialized skills, such as
nursery school instructors, teachers of remedial reading, and teachers of the
emotionally handicapped. In the recently initiated Teacher Corps, the
Federal Government helps to support teams of specialized teachers who work
in slum areas at the request of the city. The expansion of special programs for
the disadvantaged will require a major increase in the supply of teachers in
these specialties.
New Methods
Learning can be improved and the costs of education lowered by a
variety of changes in techniques and technology: new curricula and methods
of instruction including team teaching, more job specific and employment
oriented curricula; upgraded and more flexible school systems; greater application of learning theory; incentive pay systems; full utilization of physical plant, especially during nights and summers; and use of subprofessional aides to economize on professional time. The Joint Economic Committee last year surveyed professional opinion on these and other technological
developments. Educational television, teaching machines, computerized
education, and programmed learning promise future educational breakthroughs—perhaps more quality improvement than cost reduction for some
time. Many of the newer techniques remain to be tested in practice, and
further research is required.
Forgone Earnings as a Cost
From the private point of view, forgone earnings (the sacrifice of opportunity to work full-time) are a significant part of the costs of secondary and,
particularly, of higher education. Many potential students forgo education because they are unwilling or unable to defer careers, marriage, and
present earnings. But society can afford to wait for the returns more
patiently than many of the young, especially the poor. Thus, the private
costs of forgone earnings may exceed the social costs, thereby creating a
deficiency of demand from a social point of view.
College students could afford to wait more readily for future earnings if investment in human capital could be financed as other forms of investment are
financed, by borrowing against future earnings. In particular, students encounter problems of raising sufficient funds without collateral. To fill gaps
in private financial markets, a number of Federal and State student loan pro-
148
grams have been initiated since 1958. A guaranteed student loan program
relying on private bank participation was provided in the Higher Education
Act of 1965, but its launching was slow, partly because of the tight money
conditions of 1966. Additional steps are underway to strengthen and expand this program. However, proposals for new financing techniques over
the longer run need and deserve careful exploration. Some interesting
proposals would provide for student loans with repayment scaled to the
borrower's earnings after graduation.
Over the next decade education will claim an increasing share of our growing incomes in a number of ways. First, throughout the society, average
educational attainment is likely to increase. Second, significant efforts will
be made to improve the content and quality of education. Finally, society
will endeavor to assure that those disadvantaged groups now receiving education of below average quality and quantity should have full access to educational opportunities. The distribution of responsibility between the public
and private sectors varies among these areas. Private choices will largely
determine the increases in average educational attainment, mainly through
greater enrollments in colleges. Both private and public efforts will be
required to improve quality. The achievement of equality in educational
opportunity will be a top priority public responsibility.
HEALTH CARE
Americans are demanding, receiving, and paying for more and better
medical care every year, both as consumers and as taxpayers. Despite rising
costs, the Nation is demanding for everyone—whether he can personally
afford the costs or not—medical services which a few decades ago were
available only for the well-to-do.
Health care has become one of the largest industries in the United States.
It employs over 3 million people, more than do the steel, automobile, and aircraft manufacturing industries combined. In 1965, total expenditures for
health services, medical research, and new facilities totaled $40.8 billion,
about 6 percent of GNP (Table 23). Public expenditures account for oneTABLE 23.—The Nation's health budget, 1965
[Billions of dollars]
Total
expenditures i
Expenditure category
Total expenditures
Hospital and nursing home care
Services of physicians, dentists, and other professionals
Drugs and eyeglasses, and appliances. _ _
Research
Construction
Allother
Consumers
and PhilanFederal State
local
thropy
Govern- government
other
ments
40.8
28.1
5.3
5.0
2.5
14.7
8.9
2.2
3.2
.3
12.7
6.0
15
20
3.8
12.0
5.8
.2
.1
1.3
.3
1.2
.5
.1
.1
.3
.8
.2
1.3
.6
1.3
1
Direct outlays for health care, including net cost of medical insurance. Excludes indirect costs of illness, such as income lost through illness.
2 Less than $50 million.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Health, Education, and Welfare.
149
fourth of the total health budget of the Nation, just the reverse of the
situation in education.
The methods by which health care is produced, distributed, and financed
have been changing rapidly. Home visits by physicians have become unusual. The total number of doctors has changed little, but the number of
specialists is increasing while that of general practitioners is falling. More
services are being dispensed through hospitals, where specialists are aided by
elaborate equipment and auxiliary health technicians. Group practice is
becoming more common and medical insurance more important. These
changes will continue and will influence the quality and cost of medical
care in the coming decade.
DEMAND FOR MEDICAL CARE
Health research and the control of contagious disease are prime examples
of public goods which would not be produced in adequate amounts without Government subsidy. Health care outlays which increase the Nation's
productivity are investments in human capital—like outlays for education.
But the major part of health care is a consumption item, reflecting the value
Chart 14
Age Adjusted Death Rates
RATE PER 1,000 POPULATION
30
A
20
NONWHITE
A
\
10 —
j
WHITE
^ .
" * ^ i
0
-
-
1 1 1
11
1 11
1 11
1 11
1
1 111
11
11
11 1
1
1
1
1
A ( 1 1 1 1 I_L± L L J 1 11 1 1 1
J 1 1 111 J LL1
1 1 1 1 11
NOTE.-AGE ADJUSTED DEATH RATES ARE RATES BY AGE, WEIGHTED BY THE 1940 AGE DISTRIBUTION
OF THE POPULATION. THE NUMBER OF STATES COVERED INCREASED FROM 10 STATES AND
THE DISTRICT OF COLUMBIA IN 1900 TO THE ENTIRE UNITED STATES IN 1933.
SOURCE: DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE.
150
which individuals place on their own and others' comfort and, indeed, on life
itself. Like food, clothing, and shelter, some medical care is a necessity.
But the notion of what is necessary changes as society becomes increasingly
wealthy and technologically advanced. Medical research generates new
cures or treatments of illnesses previously considered incurable, and this
adds further to demands. And habits such as cigarette smoking, increased
use of automobiles and pesticides, and growing urbanization and industrialization have aggravated various health hazards.
American performance in medical research has been outstanding. But
the spread of knowledge and best practices has been slow and spotty. The
health care of sizable groups of Americans lags seriously behind that of the
majority. For example, the average life of nonwhites is 7 years shorter than
that of whites; a newborn nonwhite child is nearly twice as likely to die
in its first year as a newborn white child; and maternal mortality is four
times as high for nonwhites as for whites. There are also important disparities among areas and regions. Low-income States have fewer doctors
and nurses than high-income States. Infant mortality in Mississippi is twice
that in Massachusetts. The poor and especially poor children receive less
health care than other Americans (Table 24).
TABLE 24.—Physician and dental visits per year, by age and family income, 1963-64
Physician visits per year by age group
Family income
Under $2,000. ...
$2,0Q0-$3,999____.
$4,QG0-$6,999
$7,000 and over..
Under 15
2.0
3.0
3.8
4.5
15-64 years
4.5
4.4
4.7
4.9
65 years
and over
6.1
6.7
7.0
7.3
Dental
visits
per year
0.8
1.4
2.3
NOTE.—Data are based on household interviews during the period July 1963 to June 1964.
Source: Department of Health, Education, and Welfare.
Although U.S. health expenditures have risen steeply, mortality rates,
which fell sharply in the first half of the century, did not decline significantly
during the last decade (Chart 14). Moreover, our record with respect to
life expectancy and infant and maternal mortality lags behind that of other
advanced countries, which have lower average incomes.
Expansion of Insurance
The expansion of medical insurance coverage has had a major impact on
the demand for medical services. About 81 percent of the population under
65 has some private hospital insurance coverage today, and 76 percent some
surgical coverage, compared with 9 percent of the population in 1940. In
1965, about $8.7 billion—nearly one-third of consumer outlays for health—
was reimbursed by private medical insurance. However, most of the poor
and many of the aged remained completely unprotected until last year.
Legislation enacted in 1965 closed the biggest remaining gaps. With the
enactment of Medicare, practically all of the aged now have hospital insurance, and about 94 percent have insurance covering part of the cost of doctors5 and other bills. Under the same legislation, medical payments under
Public Assistance are to be replaced by 1970 with new State programs of
medical assistance for the poor under Medicaid.
COST FACTORS
The costs of medical care, which have been rising about twice as rapidly
as average consumer prices over the past decade, jumped 6^2 percent during
1966. The most rapid increases have been in hospital rates and, more
recently, in doctors' fees. Prices of drugs and medicines have not risen in
recent years. But neither have they been reduced.
The shift to hospital treatment, the increasing use of outpatient and emergency facilities, and the spread of group practice have enabled physicians
to use their time more efficiently. Prepaid medical care encourages early
diagnosis and prompt treatment, which can save both money and lives. New
drugs and medical practices, which shorten hospital stays, have partly offset
the increases in costs per hospital day. But hospital rates have soared as
patients have received more professional services, more laboratory work,
more drugs, more treatment by increasingly complex and costly equipment. In many areas, duplication of expensive and seldom used equipment
in several hospitals has contributed to rising costs. Labor requirements in
hospitals have also risen sharply. The number of employees per patient has
almost doubled in the last 20 years. Simultaneously, the wage gap between
hospital workers and employees with corresponding skills elsewhere has
narrowed in response to strong demands for workers in health occupations.
PROSPECTS FOR THE COMING DECADE
With both costs and demand rising strongly, it seems likely that public
and private health expenditures, which rose from 4J4 percent to 6 percent
of GNP in the past decade, will continue to command an increasing share
of the Nation's resources. The bulk of these outlays will be made by consumers, as they have been in the past. Public expenditures will be particularly important to break supply bottlenecks, and to close gaps in health
care associated with poverty.
Actions to Improve Health Care
A serious obstacle to the improvement of health care is the shortage of
doctors, nurses and other professional health workers. The Public Health
Service estimates that about one-half million professional and subprofessional health workers are needed to bring standards throughout the country
up to those of the northeastern region. Several recent Federal legislative
152
actions have been designed to help to meet the growing need. The Health
Professions Educational Assistance Act of 1963 extended grants for construction of medical and dental training facilities and initiated programs of
student loans. Subsequent legislation expanded the scope of Federal assistance to cover the training of nurses and subprofessional health personnel,
and added scholarships, assistance for school operations, and traineeships
for teachers in the health professions. Other general Federal manpower
programs are also engaged in training subprofessional health personnel.
Last year, the President appointed a National Commission on Health Manpower, due to report this June, to review remaining needs and to recommend further remedies.
These new directions in Federal programs are a much-needed complement
to long-established support in the areas of research and construction. Under
the Hill-Burton Act, enacted in 1946, more than $8.2 billion, including
$2.6 billion of Federal funds, have been earmarked or spent for construction
or modernization of hospitals or extended care facilities with a capacity of
358,000 beds.
Although the shortage of nursing homes and other facilities for the aged
is acute in some areas, a considerable number of vacancies exists in other
areas. The development of needed additional centers for group medical
practice will be assisted by legislation enacted in 1966 to permit Government mortgage insurance for group practice facilities.
Considerable private and public effort is needed to hold down costs.
Most health care is now dispensed either in a physician's office or through
hospitals. Decreases in costs are possible through the increased use of clinic
stations, outpatient facilities, diagnostic and treatment centers, supervised
home care, and group practice. Careful study of new arrangements to make
better use of scarce skills and facilities must be followed up by incentives for
more efficient operation and distribution of health services. Hospital cost
accounting and average cost pricing should be reexamined, particularly to
assure that capital costs are rationally allocated over time and among uses.
It is essential to avoid any tendency to control costs less carefully as a result
of the increasing scale of insurance and prepayment.
As long as poverty persists, Federal, State, and local governments have
a major commitment to help those unable to purchase their own care. And
programs to promote the training of health personnel, support medical research, and improve health care systems impose particular responsibilities
on governments at all levels.
CITIES
Americans have been flocking to urban areas since the Revolutionary
War, when 95 percent of them earned their livelihood on the farm. Today,
about two-thirds reside in metropolitan areas, roughly half in central
cities and half in suburbs. Almost all the growth in the total U.S. popu-
lation over the next decade will be in metropolitan areas and, as in the
last decade, in suburbs rather than in central cities. But suburbanites also
have a major stake in the quality of central cities, since they continue to look
to the city for jobs, recreation, and culture,
Throughout history, people and jobs have congregated in cities: the people
came in search of jobs; and the jobs came because employers found benefits
in urban location. Firms could pool costs with other firms and share
overhead facilities. Specialized services were available to cater to the
sporadic and unpredictable demands of a large number of enterprises.
Firms could locate close to their suppliers' warehouses and could count on
being able to meet unanticipated requirements on very short notice, thereby
economizing on inventories. It was highly advantageous to locate near
ports and rail hubs, which in turn became virtually the center of the city's
economic organization.
The city has lost some of its economic advantages, however. Many of the
benefits from urban location arose from savings in transportation and communications costs, but the automobile and truck have drastically reduced the
cost advantage of the central city. The automobile increased congestion on
old city streets, laid out for other transportation modes, and simultaneously
made the location of factories and warehouses near beltways and interurban highway connections more advantageous. The development of more
efficient, faster communications media has also reduced the advantages of
central city locations, especially for factories and goods-handling enterprises.
The city has made vital contributions to economic growth in the
past, and can continue to do so in the future. But the city needs modernization and revitalization to become a more pleasant place in which to live and
work, and a more effective contributor to economic growth and productivity.
Both aspects will involve private investment in housing and in plant and
equipment, and a variety of public actions and expenditures.
ELEMENTS OF THE URBAN PROBLEM
Despite their earlier advantages and the continued preference of many
Americans for urban life, cities today suffer from a wide range of economic,
financial, and social problems.
Cities have become congested and noisy. Traffic jams, packed subways
and buses, and crowded airports are not only unpleasant but impose real
economic costs in the form of wasted time, reduced efficiency, and, in some
cases, personal injury and property damage. Noise causes distraction and
discomfort. Crime and delinquency seem to be increasing. The problems
of air pollution are becoming more and more acute. City water systems have
to remove increasing amounts of chemicals and wastes. Trash, junk, and
dirt make life in cities both more expensive and less pleasant. The problems
of poverty and unemployment among the young and disadvantaged are on
occasion brought to national attention through mass protest or social unrest.
It is true that important progress is being made. Housing is better than
at any time in the past; communication is faster; city dwellers are healthier,
154
T A B L E 25.—Characteristics of population by area
Metropolitan
Characteristic
Population (millions)
Xonmetropolitan
nonfarm
All areas
Central
cities
Outside
central
cities
191.5
58.3
64.3
57.1
11.8
36.4
9.4
11.8
17.1
33.6
10.4
21.6
18.2
37.6
7.3
4.4
9.6
37.6
10.6
9.4
22.4
38.7
9.9
12.4
26.5
7,772
5,542
3,558
1
Percent of population:
Children under 18 years of age 2
A ged (65 years and over)
Non white
Poors
Median family income (dollars).
6,569
Farm
1
Excludes inmates of institutions and all members of the armed forces except those living off post or
with their families on post. Metropolitan data exclude and farm data include the relatively few farms
within
Standard Metropolitan Statistical Areas.
2
Never married children living in families.
3 Poverty is defined by the Social Security Administration poverty-income standard; it takes into account family size, composition, and pla'ce of residence.
Note.—All data from Current Population Survey, March 1966, except median income from March 1965
Survey.
Sources: Department of Commerce and Department of Health, Education, and Welfare.
better educated, and wealthier. Incomes in cities are lower than in suburbs
but higher than in rural areas (Table 25). But concern about cities is growing because the standards of all Americans are rising and because the poor
rightly insist on sharing access to the bounty that most Americans enjoy.
In particular, the concentration of poverty among racial and linguistic minorities in congested areas leads to a problem which is considerably larger
than the sum of its parts.
Shifts in Jobs and Population
As industry has moved to the suburbs, so have job opportunities. In
7 large metropolitan areas, for example, 975,000 new jobs became available in the suburban ring in the period 1948-62, while the central cities
of the same metropolitan areas were gaining only 60,000 new jobs. The
central city gains were all in finance, insurance, real estate, and services.
In manufacturing, the 7 central cities lost 150,000 jobs while their suburban
rings gained 250,000.
Throughout the 19th century and the early part of the 20th century, the
growth of cities was spurred by immigration from abroad. The city provided the immigrant with his basic requirements at low cost—neighbors of
similar origin, inexpensive housing near his job, schools, health services, and
convenient shopping. Since the 1920's immigration from abroad has been
replaced by migration from rural areas. With flagging demand for lowskilled workers, the cities have been relatively less successful with the new
migrants. And for the Negro migrant into the city, racial discrimination
in housing and inadequate commuter transportation facilities have made it
difficult to follow the jobs to the suburbs.
155
Urban Blight
Meanwhile, the physical plants of cities have been aging and deteriorating.
Because the very heart of the city is still highly attractive to many kinds of
enterprises, it frequently pays to tear down old buildings and replace them
with new and more suitable structures. But, outside the very heart of the
city, private demand for replacement is inadequate to bring about the
renewal of the large nearby "gray areas" of housing which were yesterday's
"suburbs" and are today's slums. Once blight begins, natural market forces
quicken the decay over a large area, as the deterioration of neighborhoods
weakens incentives for any one landlord to maintain the condition of his
property.
Mismatch Between Costs and Benefits
Urban blight is only one example of how external effects of private actions
affect the modern city. The man who drives to work considers that the
convenience of driving his own car outweighs the inconvenience of congestion. But his reckoning neglects the costs he imposes on other commuters by increasing the congestion on the highway. In making location
decisions, an industrialist will not necessarily consider the pollution of air
and water which his factory causes. Should he decide to leave the city,
his calculation will ignore the impact of his departure on city revenues or
the local rate of unemployment. In these cases, private benefits exceed
private costs; but because costs to the city, or even to society at large, are
not adequately considered in the decision, the action may be harmful.
These discrepancies between private and social calculations distort choices
among alternatives and constitute an important part of the cities' problems.
All too often, the benefits accrue privately while the costs appear in a city's
budget.
City Finances
The sheer proximity of large numbers of people brings special problems
and costs to city governments. Cities must supply services to commuters as
well as to residents: transportation, clean water, opportunities for recreation, and, perhaps most vital of all, economic opportunity. The city's inhabitants demand services from government that may be provided privately,
or even be unnecessary, in the countryside. All these requirements place
heavy burdens on public finance in the city. Thus, more is spent for government in cities than in other areas; on a per capita basis, medium-size cities
spend more than small ones, and large cities still more (Chart 15). The
relatively high per-capita tax base in cities is more than eaten up by higher
costs and outlays.
On the revenue side of the ledger, there are few taxes which cities can
effectively collect. Heavy property taxes can drive wealthier homeowners
into the suburbs. When applied to business property, such taxes can
156
Chart 15
Municipal Expenditures, Per Capita
DOLLARS
400
300HEALTH, EDUCATION,
AND W E L F A R E ^
ADMINISTRATION AND
CIVILIAN S A F E T Y - ^
Under
50
5099
100199
200299
300499
5001,000
999 and over
CITY POPULATION (THOUSANDS)
_L/PUBLIC WELFARE,'EDUCATION, HOSPITALS, HEALTH, LIBRARIES, AND HOUSING AND URBAN RENEWAL.
_2yP0LICE AND FIRE PROTECTION, FINANCIAL ADMINISTRATION, GENERAL CONTROL, GENERAL PUBLIC
BUILDINGS, INTEREST ON GENERAL DEBT, AND OTHER.
J7HIGHWAYS, SEWERAGE, SANITATION, PARKS AND RECREATION, AND UTILITIES.
SOURCE: DEPARTMENT OF COMMERCE.
accelerate the loss of jobs. Income taxes that can be administered by a
city government are apt to be crude and unprogressive payroll taxes. And
retail sales taxes administered by cities can sometimes be evaded on large
purchases.
Finally, the historical boundaries of the city government's jurisdiction
have become increasingly inadequate for planning, financing and executing
efficient programs and policies in water supply, air and water pollution
abatement, transportation, and many other fields.
In short, too many cities realize the worst of all possible worlds, with
strained budgets, inadequate expenditures for public services ranging from
education to law enforcement, burdensome property taxes which spur the
exodus of wealthier taxpayers and discourage job-creating business, and
partial, excessively costly solutions to problems that extend far beyond the
city's jurisdiction and control.
MEETING THE CITIES' PROBLEMS
Both public and private investment will be required on a large scale over
the next decade to improve the quantity and quality of city housing, to
240-782 0—67- - 1 1
modernize public transportation, and to upgrade other services provided by
city governments to their residents. But money is by no means the only
requirement.
Eliminating Racial Discrimination
The removal of the barriers of racial discrimination in housing and jobs
will pay large returns at little cost. If the Negro could secure the kind
of housing that he is willing and able to pay for in the location of his choice,
and if he could compete on equal terms for employment, the ordinary
processes of the market would lead to substantial improvements in the
housing stock and would eliminate some of the worst manifestations of
poverty. Racial discrimination imposes large costs on the city. Unemployment is higher, income is lower, housing conditions poorer, and
welfare budgets larger than they would be if the Negro were free to seek
his best options. To begin to unlock the resources of the city, the resources of individuals must be unchained. The only cost entailed will be
the sacrifice of prejudices.
The human resources of the city are also wasted by inadequate training and education and by outmoded public transportation systems. The
demand for unskilled labor is rising very slowly, and jobs of all descriptions
are increasingly located outside the city. Training and education, as well as
better public transportation, are therefore indispensable in bringing enough
jobs within reach of the city's labor force.
Improvements in income maintenance programs, discussed earlier in this
chapter, are especially urgent in the city, where the physical concentration
of poverty magnifies health, welfare, and safety hazards. The elimination
of racial discrimination in jobs and housing, the alleviation of extreme
poverty, and more adequate education and training for the city's population would, in combination, gradually cure many of the city's present ills.
But some ailments require more than this.
Housing and Urban Renewal
Housing is a key additional requirement. It has been estimated that,
for the Nation as a whole, about 2 million housing units a year will have to
be built over the next decade to meet population growth and to replace
units too dilapidated to be worth repairing. It is clear that most
housing will be built either in cities or their suburbs, and that much
replacement building will be in the central cities themselves. Most of this
new construction will be financed privately, as it is now. But public efforts
will also be needed to assist the poor—urban and rural—to acquire the
housing they need.
While the Federal Government has been assisting local highway construction and urban renewal for many years and has helped to remove
many unsightly slums, it has been slow in aiding those displaced by some
158
of the projects. After the demolition of unsatisfactory housing, the poor
have sometimes been worse off, having to crowd into the reduced supply
of cheap housing still available.
Public policies for housing the city's poor have advanced through
several stages. Newly constructed public housing has been made available
at low cost to those with incomes below a fixed level. To assure that only
the poor occupy such housing, families are required to vacate if their incomes
rise substantially and if there is other good housing they can afford in the
community. This tends to leave in public housing the chronically poor
families, least able to help themselves. Moreover, local public authorities
have had difficulty producing an adequate number of housing units through
this approach.
Rent Supplements. The newly adopted Rent Supplement program offers
promise of increasing the supply of low-income housing by tapping private
resources. Under this program, multifamily housing will be constructed
and operated by approved nonprofit or limited profit private sponsors.
Subsidies to tenants are provided for the difference between a fair market
rental of such apartments and 25 percent of the assisted tenant's income.
The recipient pays more of his rent as his income rises, but he is not obliged
to move out.
Model Cities. Public programs for renovating the cities have long taken
cognizance of the fact that a blighted residential area cannot effectively be
restored one house at a time. But these programs have not often been
applied to the full area for which integrated advance planning is required,
and have not included a full range of public services which must be coordinated in an effective area-wide attack. The Model Cities legislation,
enacted last year, was drafted in recognition of the need for an integrated
assault on urban blight. It provides for the coordinated use of already
existing Federal grant and loan programs—for planning, housing, water
and sewers, health and social services, education and training, and employment services—and perhaps even more important, it pays for part of the
cost of locally designed and administered programs in the demonstration
area which are not covered by other programs. As funding increases, it
will become a major forward step in a cooperative Federal-local coordinated
effort toward urban renovation.
Community Action Programs. Solution of the problem of poverty, like
that of urban blight, requires a coordinated attack. Especially in cities, the
interaction of people and the interrelations among such problems as low
incomes, lack of education, substandard housing, and ill health mean that
a piecemeal approach is inadequate. More than 1,000 Community Action
Agencies supported by the Office of Economic Opportunity, now provide
this coordination, bringing together needy clients and available services.
Neighborhood centers are serving as a vehicle for decentralizing and im-
159
proving the delivery of social services to disadvantaged people. The Administration is requesting that funds be provided to increase the services
which can be made available in rural areas as well as in cities.
Cost Reduction. Opportunities to reduce the cost of housing improvements must be sought and pursued. The high cost of construction labor
puts a premium on the use of labor-saving devices. But institutional barriers
to the introduction of new techniques must be overcome. More needs to
be done in research and experimentation leading to the development and
perfection of new techniques. And new ways must be sought to use public
funds to harness private initiative and private resources.
Pricing Policies
Finally, the potential efficiency of the market should be recognized in all
areas of city life. Transportation is a notable case where the logic of the
price system is often violated. Bridge and tunnel tolls typically remain the
same whether the road is jammed or empty. If polluters were forced to
bear the costs imposed by their actions, the quantity of pollution would
be substantially reduced. Subsidized airport landing fees may encourage
excessive private use of crowded facilities. The pricing of public transportation often fails to take into account the external benefits arising from
decongestion of highways. Similiarly, more rational pricing systems for
water and sewer service in many of our cities could both increase efficiency
in the use of existing capacities and reduce the planning and financial
burdens of city governments.
Summary
The fundamental challenge to the city is to achieve an orderly transition
to a new pattern of land use which reflects the new requirements of industry and people. All of its policies (zoning, taxation, transportation)
and all of its investments (in housing, public buildings, and education)
must be geared to encourage the emergence of the new patterns. This is
essentially what is meant by comprehensive planning, and it is the kind of
objective which is sought in the Model Cities program and planned metropolitan development incentive grants. The recently established National
Commission on Codes, Zoning, Taxation and Development Standards will
explore ways by which cities can undertake creative change.
The cost of dealing with the overwhelming problems of poverty, housing,
physical and human renewal exceeds the revenue potential of many cities.
If each city were required to achieve a financial balance within its own
borders, it would be forced to neglect some of the most pressing social problems of our time. There is no escape from the conclusion that the Federal
Government must continue to provide a share of the resources cities need to
remain engines of economic and social progress.
160
FEDERAL, STATE, AND LOCAL FISCAL RELATIONS
Since World War II, State and local expenditures have been growing far
more rapidly than Federal outlays. To finance their budgets, these governments have increased tax rates and assessments frequently; yet State and
local debt has increased sevenfold. Over the same period, Federal receipts
have generally kept pace with expenditures in peacetime, despite reductions
in tax rates; and the net Federal debt has risen only one-fifth, falling sharply
in relation to GNP.
The problem of matching revenues with expenditure responsibilities
is a never-ending one in our Federal system. Partly by historical accident,
the Federal Government has developed the best source of revenue, namely
the income tax. But increasing urbanization and other factors have swelled
the demand for public services which are regarded as primarily the responsibility of State and local governments—both by tradition and by the preference of the American people for keeping government as close to home as
possible.
TAXATION
The Federal Government obtains two-thirds of its revenues from taxes on
personal and business incomes. Despite its imperfections, the Federal
individual income tax is one of the best taxes ever devised. By taxing larger
incomes at higher rates, it squares with the American notion of equity. Its
revenue yield rises strongly as the economy grows. It serves as a built-in
stabilizer by varying with economic fluctuations. By comparison with
other taxes, it interferes least with job choices and expenditure decisions.
The States rely principally on sales and excise taxes, and local governments on property taxes. Broad-based personal income taxes, now levied
by 33 States, were enacted in most cases before the Federal Government
began to draw heavily on this source in World War II. A small number of
cities use "income" taxes—usually in the form of payroll levies. Tables
26 and 27 show the relative importance of different sources of revenue
and of expenditure requirements in 1965.
Sales and property taxes are regressive. A poor family pays a substantial
sales tax in most States even if it owes nothing under the Federal income
tax. Sales taxes also discriminate among taxpayers in similar economic
circumstances. Families with the same incomes but different patterns of
consumption may pay different amounts; and large families may bear a
relatively heavier burden than small families. Moreover, the yield of
sales taxes is less responsive than that of income taxes to economic growth.
Property taxes, which are the major source of financing for education, are
especially objectionable to homeowners who have no children and cause
hardships for those who own their own homes but have relatively low current incomes. They can also discourage private efforts to rehabilitate and
upgrade declining neighborhoods. Because so much trade and commerce
161
TABLE 26.—Federal and State and local government receipts, by source, national
income and product accounts, 1965
Source
Total receipts.
Amount (billions of
dollars)
Percentage distribution i
Federal
Government
Federal
Government
State and
local governments
State and
local governments
124.9
75.3
100.0
100.0
51.3
4.4
41.1
5.9
2.9
29.1
15.8
7.4
2.0
15.9
23.1
6.9
4.5
11.2
2.3
23.3
12.6
Individual income taxes 2 .__
Licenses, fees, and other taxes and charges on persons
Corporate profits tax accruals
Sales and excise taxes and customs 2
Real estate and business property taxes
Other business taxes, fees, and charges
Contributions for social insurance
___
Federal grants-in-aid
1.1
24.8
19.8
2.7
21.1
30.7
9.1
5.9
14.9
1
Based on receipts in millions of dollars.
Less tax refunds.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
2
is interstate, attempts by States to tax sales and income often make administration complex and costly and create problems in taxpayer compliance
and frictions among States in apportioning revenue sources.
STATE AND LOCAL FISCAL PROBLEM
The States and localities have not been idle in the face of mounting demands for public services. Since 1959, for example, the 50 States have
TABLE 27.—Federal and State and local government expenditures, by major function,
national income and product accounts, 1965
Amount (billions of dollars)
Percentage distribution '
Federal Government
Function
Total expendituresDefense, space, veterans, and international
Education
Health, hospitals, and sanitation
Social security, welfare, and labor
Police, fire, and correction
Highways
Postal services, public utilities, commerce, and nonhighway transportation
Housing, community development,
and recreation
Agriculture and natural resources
Interest and general government
Federal Government
State
State
and
and
Grantslocal
Grantslocal
Total ex- in-aid
Total
exto govern- cluding in-aid to governcluding State and
State and ments
gran ts- local gov- ments
grants- local
govin-aid
in-aid ernments
rnments
112.2
11.2
100.0
100.0
66.0
.5
1.2
23.1
.1
.4
.7
.7
4.5
.4
28.9
7.6
7.1
5.1
11.3
58.9
.5
1.1
20.6
.1
.1
4.0
6.6
6.3
40.3
2.6
1.6
2.3
.3
5.9
12.3
1.6
1.5
8.8
.2
5.3
11.0
3.8
73.7
1
Based on expenditures in millions of dollars.
2 Less than $50 million.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
l62
34.2
.0
39.2
10.3
9.6
6.9
15.3
2.1
4.6
3.1
.4
2.1
2.0
11.9
enacted about 200 increases in the rates of their major taxes, and imposed
15 new taxes, including 8 new retail sales taxes.
In the years ahead, the financial pressures on States and localities in the
aggregate may moderate somewhat. The age category that produces the.
largest per capita need for public services—school-age children—will grow
less rapidly than the working age population. Nevertheless, pressures will
still be strong, especially to meet the massive problems of cities imposed
by decades of neglect. According to detailed estimates recently made for
the Joint Economic Committee, construction needs of State and local governments in the next decade will equal those of the last decade.
Thus the financial problems of State and local governments will persist.
Currently, increased defense expenditures dominate the Federal budget picture. But over the long run, there is every prospect of a return to the fiscal
paradox of recent years—booming income tax revenues for the Federal
Government while States and localities struggle to finance their massive
program requirements.
CATEGORICAL FEDERAL AID
The Federal Government now provides many grants-in-aid in support
of specific categories of State and local expenditure. Federal grants now
constitute about one-sixth of total revenues of State and local governments. The first large Federal grant programs were for emergency relief
and public assistance during the 1930Js. Federal grants declined during
World War II, but then grew rapidly in the 1950's, with highway construction grants producing an acceleration in the second half of the decade
(Table 28).
TABLE
28.-
-Growth of Federal aid to Statex and local governments, fiscal years
1930-68
Function
1930
1940
1950
1955
1960
1965
19G8 3
Billions of dollars
Total Federal aid.
Health, labor, and welfare
Commerce and transportation
Education
__
Housing and community development...
Agriculture and agricultural resources
Natural resources
Other
0.1
(3)
2.4
2.3
3.3
7.0
10.9
2.2
.2
(33)
(3)
(3)
()
(3)
1.6
.5
(33)
()
1.9
.6
.2
.1
2
.1
.1
2.9
3.0
.4
.3
.2
.2
.1
4.4
4.4
.6
.6
.5
.3
.1
7.7
14.7
9.2
15.4
(3)'
(3)
17.4
8.0
4.3
2.5
1.3
.6
.5
.2
Percent
Federal aid as percent of:4
Federal expenditures
State and local expenditures4
4.3
1.4
1
2
3
25.6
25.3
5.3
10.5
4.8
10.4
Grants-in-aid and shared revenues from both administrative budget and trust funds.
Data for 1968 are estimates.
Less than $50 million.
4
National income and product accounts basis.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Bureau of the Budget.
163
10.3
18.7
The last few years have seen a rapid acceleration of Federal aid through
a variety of new or expanded programs—most notably for elementary and
secondary education and to combat poverty. In fact, most new legislation
in areas discussed in this chapter operates through grants or loans to State
and local governments.
The grant-in-aid approach is flexible. It enables the Federal Government
to single out the most urgent needs and to apply suitable remedies directly.
Furthermore, by imposing matching formulas where appropriate, the Federal
Government often can enlist additional State effort in neglected areas.
Variable matching requirements are used by the Federal Government to pay
for a greater share of costs in States and areas where needs are greatest relative
to available resources. Federal grants can encourage innovation at the local
level, and provide for experimentation and demonstration where the problems are more obvious than the remedies. They can be launched modestly
and expanded upon demonstration of effectiveness. The grant approach
can spur better planning and coordination among overlapping or adjacent—
and sometimes conflicting—local jurisdictions where a regional or areawide problem requires a cooperative and coordinated attack.
At the same time, the categorical grant mechanism is open to some
criticisms. State and local officials are sometimes bewildered by the number,
variety, and complexity of eligibility and matching provisions of different
Federal aid programs. A special effort is necessary to keep them informed
of latest developments, so that all eligible units of government may share
equitably. And some localities resent Federal standards and "supervision"
in grant programs.
Broadening the Scope of Federal Grants
Supporters of categorical aid argue that, while there may be faults in the
present system, they are not intrinsic. Many steps have already been taken
to improve grant programs. The Bureau of the Budget has undertaken
recently to improve the coordination of Federal programs at the State and
local level. The Partnership in Health act of last year combined several
small, categorical grant authorizations into one and provided assistance for
planning comprehensive health services. Similarly, the Model Cities program provides for the coordinated use of funds from a number of separate
categorical programs as well as from private and local government sources; it
also authorizes Federal assistance for local government programs in the
demonstration area of the city even if these would not qualify for any categorical aid. The Community Action Program offers cities support for a
broad range of activities that fit into a coordinated attack on poverty.
These new programs of broad support represent a major evolution from
many traditional types of categorical grants in which the Federal Government
pinpoints the State and local expenditures it will support.
These developments are viewed by some observers as a decisive argument
for an evolutionary approach that continues to rely on categorical aid as the
164
principle vehicle by which Federal assistance should be given to State and
local governments. These observers would argue that effectiveness is limited
only by the amounts that the Federal Government can afford to channel to
States and localities, rather than by any inherent defects in the mechanism
of categorical aid.
GENERAL SUPPORT GRANTS
Others contend, however, that broader "general support" grants are
needed as part of Federal support to States and localities. In principle,
these grants would have no strings attached, and would be available for general budget support rather than tied to specific activities or programs. Direct
transfers without supervision would leave the States and cities free to set
priorities and to design remedies for local problems. The unconditional
grant approach lends itself readily to "equalization," to take account of
differences in income levels and fiscal capacity among the States. Many
proposals recommend setting the size of such grants as a percentage of collections under the Federal individual income tax. One would earmark 5
percent of collections from the Federal individual income tax for general
support grants to the States.
Critics of general support grants have questioned whether State governments would spend the added revenues wisely, whether they would maintain
their own revenue efforts, and whether they would provide adequately for
their own cities. Unconditional grants to the States are viewed by some as a
threat to additional Congressional appropriations for categorical grant programs which provide direct assistance to cities and their pressing problems.
Also, if States had a claim on a share of Federal revenues, they might oppose
Federal tax reduction even when needed to combat recession. And if the
cut were nevertheless approved, its effectiveness could be weakened by a
resulting cutback in State outlays.
Supporters of revenue-sharing point out that formulas can be devised to
cope with cyclical swings in general support grants and to channel funds to
localities as well as States. However, there are obvious difficulties.
Under some proposed compromise arrangements, a fixed level would be
established for total Federal financial aid to State and local government,
designed to cover both categorical grants and general support. Categorical
grants would continue to be appropriated as at present; and the balance of
the support would take the form of untied grants going to cities as well as
States. The untied portion would serve as an "overhead" payment to be
used by States and cities to strengthen their own programs and their planning. Such a compromise is intended to provide some assurance of continued
Federal support for categorical grant programs which have established their
merit, while enlarging opportunities for State and local initiative and
responsibility.
165
CREDIT FOR STATE INCOME TAXES
An additional method of enlarging State revenues in the context of an
improved over-all national tax structure has been proposed by the Advisory
Commission on Intergovernment Relations. The suggestion is that a credit
against Federal personal income tax liability be given for up to 40 percent of
State income taxes paid. This credit would provide powerful incentives:
the 17 States which do not now have broad-based individual income
taxes would be strongly induced to enact them; States which already have
income taxes would be encouraged to rely on them more heavily. A State
could then augment its revenues through income taxation with a net increase in the burden on State taxpayers equal to only 60 percent of added
revenue. Through the credit device, the States would, in effect, be collecting part of their income taxes from the Federal Government.
Federal tax credits to influence local tax policy are not new. They are
applied to estate or inheritance taxes paid to States, and they are used under
the Federal-State unemployment insurance system.
The tax credit device has been subjected to certain criticisms. First,
by their very nature, tax credits provide more help to rich States than to poor
States, because the amount of assistance depends on the tax base of each
State. Second, the proposal does not in itself provide direct aid to the cities.
Third, the Federal tax credit adds to State revenues only when and if the
States act to initiate or raise rates on income taxes; the initial impact merely
lowers Federal taxes for people who now pay State income taxes.
JOINT REVENUE COLLECTION
It has also been proposed that the Internal Revenue Service (IRS) expand
its current assistance to the States in their income tax collection efforts. At
present, there is cooperative exchange of information between Federal and
State revenue officials. But the IRS could act as collecting agent for State
income taxes. The State rate structure would be applied against the Federal
definition of taxable or adjusted gross income or Federal tax liability itself.
Joint revenue collection is a modest proposal which could be enacted on its
own merits or as a supplement to the larger plans. It might encourage additional States to enact income taxes, and should certainly simplify life for both
taxpayers and revenue officials in States which already use income taxes.
It would, of course, be necessary for the States to follow Federal concepts of
taxable income, which may not always accord with their own.
OTHER ISSUES OF TAX COORDINATION
Among other problems requiring better coordination of Federal-Statelocal taxation is one dealing with the exemption from taxation, under the
Federal individual income tax, of interest paid on State and local government securities. Because of the exemption, these governments can borrow
more cheaply—paying lower rates of interest and competing more effectively
166
for funds against other borrowers in capital markets. However, the exemption also reduces the progressivity of the Federal individual income tax,
since it produces much bigger tax savings to those in high income tax
brackets than to those taxable at lower rates. This is a relatively inefficient
means of channeling aid: the Federal Government loses far more revenue
than the States and cities gain in reduced interest costs.
Apart from the general question of interest exemption, and of immediate
concern, is the use of so-called industrial development bonds. Through
the use of these bonds, localities have passed to private industries the benefit
of the exemption of their interest from Federal tax, in many cases without
assuming any real obligation for repayment of the bonds. This questionable
practice is becoming increasingly widespread, and the lack of any obligation
by the locality authorizing the bonds permits proliferation without limit.
The use of the Federal tax code in this fashion is inefficient and inappropriate.
Another fiscal problem concerns State taxation of corporate income.
Since most corporate income is generated by interstate corporations, States
must establish formulas to apportion the income assumed to be earned from
business done in other areas. The formulas give various weights to such
factors as location of plant, percent of payroll, sales destination, location of
sales offices, and "origin" of sales. In 1966, after several years of study, the
House Judiciary Committee recommended legislation that would require a
uniform State formula based solely on two factors, property and payroll.
The States have responded unfavorably to this proposal. As an alternative,
additional Federal grants to the States might be used to persuade them to
relinquish a tax which is more efficiently collected at the national level.
CONCLUSION
Expenditures for income maintenance, health, and education, and
revenues of States and cities, have grown faster than GNP since the mid1950's. Expenditures for educational services and health care combined
have risen from about 8J4 percent to 12^2 percent of GNP, and expenditures of States and localities have expanded from 8J/2 percent to 11 percent
of national output in the past decade. Federal transfer payments to persons
have risen from 3 percent to 4^2 percent of GNP. Through their dollar
votes on the market and their votes at the polls^ Americans have reaffirmed
their strong desires for greater expenditures in these areas.
In response to the wishes of the public, these areas will continue to absorb
a significant fraction of the gains from economic growth. But it is impossible reliably to forecast how rapidly these outlays will grow, or to set in
advance meaningful targets for how fast they should increase. Opportunities for progress in these areas will be influenced by the urgency of competing
claims on output, ranging from national defense to the unlimited aspira-
167
tions of private consumers, and from conservation of natural resources and
improvements in the quality of our environment to industrial research, development, and investment. In peacetime the Nation will face repeated and
difficult—though welcome—choices about how to distribute fiscal dividends
between public programs and tax reductions. These decisions should be
responsive to changing circumstances.
Moreover, it is not possible to stipulate "needs" in the areas discussed in
this chapter. If needs are merely what survival requires, most of what is
needed is now available. And if needs are everything that could be reasonably desired, then they will not be fully met for generations.
A rational balancing of opportunities and alternatives, will undoubtedly
call for some progress in all of these—and other—priority areas. Most
of the choices, both public and private, will be incremental in character.
The individual chooses whether or not to visit his dentist, weighing the need
against other uses of funds; he does not decide on health in the abstract
or in the large. Similarly, the Federal budgetary process is full of efforts
to cut low-priority expenditures marginally in order to expedite a promising
new program like model cities. Even major program decisions which will
be faced in the years ahead—such as whether or not to set a minimum income floor to combat poverty, or whether or not to select any of the proposed
innovations in the area of Federal-State-local fiscal relations—could also be
approached on an incremental basis. In making these budgetary decisions, it
is vitally important that goals and objectives be defined precisely, that all
alternative methods of reaching them be considered, that costs and benefits be quantified as far as possible; only then can the most efficient means of
achieving the objectives be chosen. The Planning-Programming-Budgeting System recently initiated by the Bureau of the Budget and the
executive agencies of the Federal Government is designed to advance this
systematic approach.
This chapter has attempted to raise some issues which will require difficult
choices. Collectively such decisions will determine the directions of social
progress in the years ahead.
It is clear that social progress will make important claims on the Federal
budget. There is no easy way to define the Government's appropriate
role. But the pursuit of public interest and the exercise of public responsibility need not add dollar-for-dollar to the bills of taxpayers or to the size
of Government. Much of our advance in health, education, and cities will
be financed through the budgets of consumers and businesses. The energies
and outlays of private enterprise can be stimulated by wise and imaginative
public policies relying on enlightened regulation, carefully designed fees
and subsidies, appropriate tax provisions, Government loans and insurance
programs, and improved functioning of the market economy so that actual
prices become better signals for estimating social costs and benefits.
Within the public sector, another set of issues arises: whether particular programs can be administered and financed most effectively by Federal,
168
State, or local governments, and how the over-all division of responsibilities can assure adequate financing for priority social needs through an
equitable tax system.
The aspirations for material and social progress are boundless; the limits
of our potential progress are set by the resource costs and the level of productivity in our society. It can be confidently forecast that the problem
will be to find the means to fulfill our public and private aspirations rather
than to deal with any redundancy of resources. A decade from now, major
gains will have been made, but there will still be a large inventory of unmet
desires and unsolved social problems, requiring public and private efforts
to channel a substantial additional portion of our growing output toward
priority uses.
169
Chapter 5
Growth and Balance in the World Economy
W
ORLD ECONOMIC EXPANSION in the first half of the 1960's has
been sustained and rapid. The pace has probably been surpassed
only during the period of recovery from World War II. Moreover, since
the end of the war, the extreme fluctuations of earlier years have not been
repeated.
But continued economic progress is not assured. Many problems remain.
The most difficult and important is that of overcoming poverty in many
of the less developed countries of Africa, Asia, and Latin America. A major
problem for the developed countries is to cope with international financial
imbalances in ways which do not inhibit sound economic growth.
This chapter records the economic progress in both the developed and
less developed countries during the first part of the 1960's and outlines some
major issues for international consideration during the remainder of this
decade. It deals especially with the policy issues facing the United States
and other developed countries in their efforts to achieve a better international
balance and to pursue national policies that promote world economic
progress. The worldwide economic impact of their national policies places
a special responsibility on the major developed countries.
WORLD ECONOMIC GROWTH IN THE 1960'S
Two quantitative goals for economic growth in the 1960's have been
fixed by international organizations:
The United Nations has set 5 percent a year as the minimum
growth rate for the less developed countries over the 1960's, calling
this the "Development Decade."
The Organization for Economic Cooperation and Development
(OECD), which includes the countries of Western Europe, the United
States, Canada, and Japan, has called for an increase in aggregate
output of all member countries combined, amounting to 50 percent
over the decade or an average annual growth rate of 4.1 percent.
As can be seen from Table 29, the expansion of real output in the less
developed countries, estimated at 4 / 2 percent a year, so far has fallen
somewhat short of the UN target on average, and far below it in several
170
TABLE 29.—Changes in total and per capita real GNP in OECD and less developed
countries since 1955
Percentage increase per year
Share of
total
output
(percent) 1
Country
O E C D countries: Total
100.0
Total real GNP
1955
to
1960
1960
to
1965
3.2
5.0
Per capita real
GNP
1955
to
1960
2.0
1960
to
1965
3.7
United States
53.3
2.2
4.7
.4
3.2
Total excluding United States.
46.7
5.0
5.3
3.7
4.2
8.6
7.7
7.3
5.4
4.1
1.4
.4
2 6.3
2.8
4.6
9.7
5.5
4.3
5.4
3 4.8
3.3
5.1
9.7
5.1
9.2
2 5.1
2.2
3.7
8.8
4.9
3.4
4.3
3 3.5
2.6
3.7
8.5
4.3
8.3
8.1
100.0
*4.5
Germany
United Kingdom.
France
Japan
Italy Spain
Greece. .
.
Less developed countries: Total
Latin America
Brazil
Argentina
Mexico
Asia
Middle East—
Other Asia
IndiaPakistan
_
_
_
__.
____
4.6
<2.2
2.2
1.1
3.0
1.3
6.1
3.3
5.0
4.0
(55)
()
3.5
50.1
11.6
10.7
10.7
4.8
5.8
2.6
6.1
4.4
3.3
3.0
5.9
2.0
2.7
.9
3.0
1.5
.2
1.3
2.8
37.4
6.4
31.0
16.3
3.7
4.5
6.1
4.2
4.4
3.5
3.9
6.1
3.4
2.9
5.4
2.4
3.7
2.1
2.3
1.2
1.5
3.7
1.0
.4
2.8
12.5
1.3
.7
Africa
Nigeria.
Ghana.. .
8.7
(5)
(5)
12 Share in 1963 for OECD countries and in 1960 for less developed countries.
Excludes Saar and West Berlin.
3 Includes Saar and West Berlin.
* Estimates.
« Not available.
NOTE.—Totals include countries not shown separately.
Detail will not necessarily add to totals because of rounding.
Sources: Organization for Economic Cooperation and Development (OECD), Agency for International
D e v e l o p m e n t a l D), and Council of Economic Advisers.
of the largest of these countries. However, the table also shows that output
in the OECD countries has been exceeding the growth rate of the OECD
target.
DEVELOPED COUNTRIES
In the first half of the 1960's, real output in Western Europe and Japan
increased by more than 5 percent a year. Contributing to the rapid expansion were government policies directed toward achieving and maintaining
high levels of employment with reasonable price stability, stimulating the
movement of labor from low to high productivity employment, reducing
barriers to foreign trade, and encouraging the more efficient utilization of
resources in other ways.
A high rate of capital formation helped to achieve this rapid growth. Investment averaged 18 percent of gross national product (GNP) in the OECD
countries other than the United States; it ranged from almost 30 percent in
171
Japan to less than 14 percent in the United Kingdom. While much of the
increase in output comes from investment in physical capital and from the
incorporation of technological advances, a good deal also comes from investment in human capital—in raising the education, skills, and health of the
population.
The growth of output is also benefiting from the movement of labor out of
activities of low productivity to those of higher productivity. There has been
a large-scale movement of labor from Southern Europe to Northwestern
Europe—from areas of low productivity, low incomes, and high unemployment to areas where productivity and incomes are high and unemployment
low. Within countries, the major shift has been out of employment in agriculture. The OEGD estimates that this latter shift alone accounted for
between 10 and 15 percent of the increase in productivity during the first
half of the 1960's in France, Germany, Italy, and Japan. The United Kingdom, which by 1960 already had only a small agricultural sector, did not
have this source of expanding productivity.
Internal shifts of labor have been stimulated and facilitated by the
expansion of foreign trade, which has far exceeded the growth of output.
The rapid growth of trade has resulted, in part, from the reduction of trade
barriers, especially within the two regional groupings—the European Economic Community (EEC) and the European Free Trade Association
(EFTA).
For a number of European countries and Japan, a rapid rise in exports
has also directly stimulated the growth of GNP. In addition, when
domestic expansion is led by export growth, the resulting rise in imports
can be readily financed; there is less chance that the government will need
to apply the brakes to reverse a developing balance of payments deficit.
LESS DEVELOPED COUNTRIES
The achievement of an adequate rate of self-sustaining growth in the
less developed countries remains an urgent world economic problem. Over
half of the 4J/2 percent annual growth of total output for the less developed
areas has been needed just to maintain their low level of living, since their
populations have been rising by 2^2 percent annually. The yearly increase
in per capita output has been only 2 percent, or barely $3 a person.
Achieving rapid and sustainable growth in these countries is by no means
a hopeless task, however. Self-sustaining growth has been attained in certain less developed countries—including Israel, Malaysia, Mexico, Taiwan,
Venezuela, and some Central American countries. Others—such as Pakistan, South Korea, Thailand, and Turkey—are approaching that objective.
But the problems are formidable. Further efforts by both the developed and the less developed countries are required. The rapid growth
of population in many less developed countries, already over-populated in
relation to their economic resources, must be slowed. A number of these
172
nations have adopted measures to induce their citizens to limit the size of
their families. Some of these programs—in Hong Kong, Singapore, and
Taiwan—have already shown signs of success. Nevertheless, the growth
rate of population in the less developed countries as a group is still rising.
Another major problem area is agriculture. Agricultural output has
grown so slowly that food output per person in many countries is below
pre-World War II levels. Unless a vigorous effort is made to redress the
situation, it is likely to deteriorate further as population and need for food
continue to grow rapidly. Moreover, in at least some of the less developed
countries, agricultural development may be a key to general economic
growth. The application of improved farming techniques can substantially
improve agricultural productivity with relatively small increments of capital;
increased agricultural output can be a major substitute for imports; rising
farm income can provide an expanding market for domestic industrial
output.
The developed countries can do much to help by providing technical
assistance, food, fertilizers, agricultural equipment, and financing. But the
basic responsibility rests on the less developed countries themselves. They
must, among other things, improve the incentives for farmers to increase
output.
Education also is a major field in which improvement is essential. Economic progress requires literacy. A modern and expanding economy needs
much more—people trained to operate farm machinery, run a lathe, operate
a retail store, and keep accounts. In recognition of the importance of
education, the less developed countries have in recent years increased their
education budgets by 15 percent annually. This effort has long been supported by the United States. More Agency for International Development
(AID) technicians working abroad are employed in educational projects
than in any other field. Moreover, beginning in fiscal year 1967, AID
is sharply increasing its educational aid effort, as well as its work in
agriculture and health. The educational efforts of our Peace Corps
workers are also welcomed throughout the less developed world.
The Need for Capital
The developing countries also need capital. About one-fourth of their
domestic investment is financed by capital imports. From 1961 to 1965,
the net amount of this capital inflow rose by only 5 percent a year in money
terms and less in real terms. Some increase continued into 1966. Since
1963, the entire increase from abroad has been in private capital flows.
This investment, to be sure, benefits the recipient countries, and the
United States has taken steps to encourage it. But it has gone mainly to
the extractive industries, particularly oil. Thus, it is unevenly distributed
among countries. Further, investment in technologically advanced, some240-782 O—67
12
'
u
times highly automated, extractive processes does not have the same stimulating effects on general economic activity as does investment in local manufacturing. It does, however, provide much needed foreign exchange and
technological know-how for those countries fortunate enough to be wellendowed with minerals.
For many developing nations, a growing burden of interest and amortization payments on external debt absorbs a large and rising proportion of
gross aid receipts. In 1960, debt service charges amounted to 13 percent of
the official bilateral aid receipts of less developed countries; today the figure
is 19 percent. India's debt service charges on government assistance for the
period of its Third Plan amounted to 26 percent of its foreign aid. In
Turkey, debt service during 1963-66 was more than half as large as gross
foreign aid.
For the net inflow of aid merely to remain constant, the gross inflow must
rise to cover growing debt service. In fact, the gross flow of government aid
from the developed countries has been rising just enough to keep net aid inflow on a plateau since 1963. Future prospects are even less encouraging.
Bilateral aid commitments—pledges of actual aid disbursements to be made
in the future—declined in 1965. This could foreshadow a decline in net
and even in gross official aid disbursements in the years to come.
The stagnation in the net flow of official capital to the less developed
countries has come at the very time that the industrial countries have
reached new heights of prosperity. And it comes at a time when the pace
of economic expansion achieved by the less developed countries as a group
is encouraging. They are developing the skills required for a modern
economy. They are capable of using more capital than they can raise
domestically or borrow abroad on commercial terms. For this and other
reasons, foreign aid, both bilateral and multilateral, should have a high
priority claim on the resources of high-income countries.
One of the most fruitful avenues for increased aid to the less developed
countries is through the multilateral lending agencies—the World Bank
family and the regional development banks. The United States firmly
supports these agencies as mechanisms for mobilizing both external capital
and domestic resources of the developing countries themselves. Replenishment of the resources of the International Development Association (IDA),
which lends on easy terms, ought to be high on the agenda of the developed
countries. The IDA's resources should be substantially increased in ways
which take into account the balance of payments situation of the contributing countries. The recently established Asian Development Bank represents a new stage in Asian economic cooperation, in which the United
States is participating with other non-Asian countries. For Latin America,
the United States continues its strong support of the Inter-American Development Bank, which serves as the financial arm of the Alliance for Progress
and is helping to draw funds from inside and outside the hemisphere into
174
Latin American development. The African Development Bank, which has
recently begun operations, will perform similar functions in its area.
Foreign aid and private foreign investment finance only one-fifth of the
foreign exchange expenditures of the developing countries. The remaining
four-fifths is financed by their own export earnings. After near stagnation in the late 1950's, these earnings rose by about 6 percent a year during
the first half of the 1960's. The increase was produced by many factors, including strengthened prices for many primary commodities, the growing
ability of the less developed countries to supply these commodities, and the
rapidly expanding markets in the United States, Western Europe, and
Japan. Only with continued vigorous growth in the developed world and
improved access to its markets can the less developed countries earn the
foreign exchange needed to support their own continuing growth.
TRADE POLICIES
The less developed countries obviously have much to gain from reductions
in tariffs, quotas, and other barriers to trade in primary products, since
such products constitute 85 percent of their exports. Over the longer run,
satisfactory growth in the export earnings of the less developed countries
will require relatively less reliance on sales of primary products and continuation of the sharp expansion in exports of manufactured goods. Such
diversification will also be important for their internal growth. Reductions
in tariffs and other trade barriers in developed countries can contribute
much to the needed growth of manufactured exports from developing
countries.
In most of the less developed countries, internal markets are too small
to support efficient modern industrial plants. It is not geographic size or
population but effective purchasing power that determines the size of a
market. Regional cooperation can create larger markets so that the enterprises of the developing countries can benefit from the economies of scale
and of specialization on which growth and efficiency depend.
Encouraging progress toward regional integration is being made in a
number of areas. The Latin American Free Trade Association, despite
handicaps, can form the basis for a true Latin American common market.
Particular progress has been made in the Central American Common Market.
The United States supports outward-looking regional integration.
The importance of trade expansion as a factor in economic growth in
all countries argues strongly for more rapid trade liberalization. This
proposition is effectively demonstrated by the recent experience in the new
free-trade areas of Europe, just as it was earlier demonstrated in the great
common market of the United States. Thus, it is essential that success
be achieved in the current multilateral trade negotiations, by far the most
comprehensive in history.
175
Kennedy Round
This success is important to both the developed and less developed countries. The substantial reduction in tariff barriers which the United States
and other countries are seeking to achieve in the Kennedy Round negotiations should make an important contribution to increased world trade.
Expanding world trade encourages capital and labor to move out of those
economic activities which are better supplied from abroad and into those
fields which provide higher real income through greater productivity. By
permitting countries to produce efficiently and on a large scale, freer trade
makes a contribution to higher incomes everywhere. And through reduction of artificial shelters to laggard domestic industries, the lowering of
barriers to imports spurs innovation and efficiency.
In the Kennedy Round, the major reductions in barriers to world trade
are expected to be made by the developed countries—the United States,
EEC, EFT A, and Japan. EFT A has now virtually eliminated barriers to
industrial trade among its members while the EEC will do so for both
industrial and agricultural products by July 1968. The reduction of barriers to trade with nonmember countries would now help these groups to
continue their rapid pace of growth, and would avoid distortion of the
normal pattern of European trade in particular and world trade generally.
The less developed countries are not being asked to grant tariff concessions
that would endanger their economic development programs.
Longer-Run Tasks
A successful Kennedy Round will be a great achievement, and will promote
rapid and healthy economic expansion throughout the world. But the Kennedy Round cannot be the end of the road for the liberalization of world
trade. In the year ahead, further study and international consultation
should be directed at four remaining tasks in the trade field:
(1) Continuing efforts to liberalize those tariff and nontariff barriers
which will remain after the Kennedy Round;
(2) Developing a better international pattern of agricultural production
and trade to speed economic growth;
(3) Achieving more stable export prices and raising the export volume of
developing countries;
(4) Improving economic relations between the countries of Eastern
Europe—including the Soviet Union—and the United States.
President Johnson has emphasized the importance of this last task on several
occasions. In his recent State of the Union Message, he noted that the
Export-Import Bank can now extend commercial credits to Bulgaria,
Czechoslovakia, Hungary, and Poland, as we'll as to Rumania and Yugoslavia. He called again for legislative authority to extend most-favorednation—i.e., nondiscriminatory—tariff treatment to the countries of Eastern
Europe and the Soviet Union. Their trade with Western Europe has increased steadily in recent years, while U.S. trade with these countries has
been stagnant, and constitutes less than 1 percent of all U.S. foreign trade.
U.S. BALANCE OF PAYMENTS
A country's foreign trade and payments are its main points of economic
contact with the rest of the world. The balance of payments of any nation
is intimately dependent on policies and developments in the outside world.
U.S. exports depend heavily on European, Canadian, and Japanese growth
and the foreign exchange receipts of the less developed countries as well as
on U.S. growth and price stability. The flow of capital from the United
States depends on profit opportunities and monetary conditions abroad as
well as on those in the United States.
For most of the decade following World War II, U.S. balance of payments
deficits provided needed international currency to support the rapid expansion of world trade and economic growth. Other countries were eager to
hold more dollars; indeed, it was commonly known as a period of "dollar
shortage." Recently, however, as foreign reserves have increased, U.S.
deficits have been less welcome.
These deficits do not, of course, contradict the unmatched strength and
productivity of the U.S. economy; neither do they mean that our competitive position in world markets is weak. The United States is not living
beyond its means, increasing its net debt to foreign countries, or using up its
international capital. U.S. ownership of assets abroad continues to grow
faster than foreign ownership of assets in the United States. U.S. assets
abroad, net of foreign assets in the United States, increased from $7 billion
in 1935 to $14 billion in 1950; by 1961 they had risen to $28 billion;
and in 1965 they were $47 billion.
The deficits have, however, resulted in a steady erosion of the U.S. stock
of reserve assets, which are needed to maintain a stable value of the dollar
in international transactions. At the same time, there have been steady
increases in U.S. liabilities to foreigners that may be considered potential
claims against our reserve assets. This combination implies a continuing
decline in liquidity; it is clearly not indefinitely sustainable if confidence in
the safety and stability of the dollar is to be maintained.
The U.S. balance of payments performance is now evaluated in terms of
two alternative accounting definitions. Both measure an over-all U.S.
deficit or surplus in terms of what is currently happening to (1) U.S. reserves
and (2) certain types of claims against the United States. Both count as
an increase or decrease in reserves any change in the sum of U.S. holdings
of monetary gold, U.S. "gold tranche" claims on the International Monetary
Fund (IMF), and U.S. official holdings of convertible foreign currencies.
177
They differ in how they treat changes in various outstanding claims against
the United States.
One measure—the "official reserve transactions" balance—treats any
increase in foreign private claims on the United States, liquid or illiquid, as
an ordinary capital inflow. Only the change in claims on the United States
held by foreign official agencies is counted, along with the change in U.S.
reserves, as a measure of the U.S. deficit or surplus. Foreign official monetary agencies have the privilege of converting claims on the United States
into gold at the U.S. Treasury; their net purchases thus add to the direct
claims on U.S. reserves. Moreover, they are charged with maintaining
stable exchange rates for their national currencies. They usually do this
by buying or selling dollars to close any gap between normal supply and
demand for dollars which might otherwise upset the exchange rate between
the dollar and their currency. In this sense, the net balance of such transactions by other countries, together with changes in our own reserves, is one
indicator of the size of the imbalance in U.S. payments.
The alternative "liquidity" balance attempts an assessment of changes in
the U.S. liquidity position. It takes account of the fact that liquid
dollar holdings of private foreigners may be readily sold to foreign central
banks. It therefore treats only increases in foreign non-liquid claims on the
United States as ordinary capital inflows. Changes in all liquid claims are
included along with changes in U.S. reserve assets as a measure of the U.S.
balance, regardless of whether the claims are acquired or sold by an official
agency or by a private individual, bank, or business.
While these measures of balance are important, they must be viewed as
indicators, rather than definitions, of equilibrium. In part, the limitation
arises because any measure of balance must arbitrarily divide dollar assets
into two distinct groups—those Which are claims against our reserves and
those which are not. Such a clear division does not exist in reality. To
a degree, any marketable dollar asset can be indirectly exercised as
a claim against U.S. reserves. Moreover, the likelihood that assets will
be used as a claim against U.S. reserves depends not only on their marketability and maturity but also on the motivation and attitude of current and
prospective holders. Evidence on such attitudes, including the performance
of the dollar in foreign exchange markets, helps to interpret the U.S. position. But, however that position is assessed, the U.S. balance of payments
clearly has not been in sustainable equilibrium in recent years and must be
improved.
Where a sustainable equilibrium may lie over the long run is not completely
clear. The expansion of international transactions—most of which are settled in dollars—suggests that some growth of foreign private holdings of
dollars is natural and desirable and may be perfectly sustainable. Some
increase in official claims on the United States may also occur over the long
run, given the preference of many countries to hold all or some of their official reserves in dollars, and the fact that transactions needs of official agencies
178
will continue to expand. Regardless of the movement of dollar holdings
abroad, however, continuing U.S. reserve losses would not be compatible with
sustained equilibrium. On the other hand, any growth of either official, or
official plus private liquid, holdings of dollars need not be precisely equaled
by growth of U.S. reserve assets in order that sustainable equilibrium be
achieved.
REGENT DEVELOPMENTS
The U.S. liquidity deficit widened slightly in 1966 while the official
settlements balance registered a small surplus for the first time since 1957,
The liquidity deficit had improved markedly in 1965 and showed a slight
further improvement through the first three quarters of 1966. Preliminary
evidence points to a somewhat larger fourth quarter liquidity deficit which
will bring the year's total slightly above the $1.3 billion deficit of 1965.
During the year, there was an extraordinary buildup of foreign private
dollar holdings, which resulted in a small surplus on official settlements.
Despite the surplus on official settlements, net gold sales continued as
foreign monetary authorities reduced their dollar claims on the United
States. While sales to France were $601 million in 1966, the net reduction
in the U.S. gold stock for the year was $571 million.
Full data on the U.S. balance of payments are available only for the first
three quarters of 1966. Unless otherwise noted, all figures for 1966 used
below represent the total of these first three quarters at a seasonally adjusted
annual rate.
The structure of the balance of payments in 1965 and 1966 was markedly
different from that of previous years. The surplus on goods and services,
which had been rising from 1959 to 1964, dropped sharply in 1965 and
1966. On the other hand, the net outflow on capital account was also
greatly reduced in both years (Chart 16 and Table 30).
These developments can in large measure be attributed to (1) the increase in the direct costs of the war in Vietnam, (2) the sharp rise in imports
induced by the rapid economic expansion and the heightened pressure on
domestic resources, (3) the exceptionally tight monetary conditions of 1966,
and (4) the balance of payments programs inaugurated in 1965. The last
two factors were important in accomplishing a large reduction in U.S. bank
lending abroad and in attracting an exceptional inflow of foreign capital.
The Balance on Goods and Services
The U.S. surplus on goods and services more than doubled from 1960 to
1964, reaching an exceptional peak of $ 8 / 2 billion. Subsequently, however,
the surplus declined. As the combined result of a narrowing trade surplus
and sharply increased military expenditures in 1966, it fell to $ 5 / 2 billion.
Trade. The trade surplus fell through the first three quarters of 1966,
to the lowest level since 1959. The most striking factor in this deterioration
179
Chart
16
U.S. Balance of International Payments
BILLIONS O F DOLLARS
-
EXPORTS AND IMPORTS OF GOODS AND SERVICES
40
EXPORTS
30
IMPORTS
20
I
0
I
I
I
1960
1958
I
I
1964
1962
1966^/
10
CAPITAL FLOWS
FOREIGN
U.S. PRIVATE
-10
1
1
1958
J
|
1962
1960
|
I
1964
1966 J/
10
BALANCE
OFFICIAL RESERVE TRANSACTIONS BASIS
0
^mmmmmmmm
—
LIQUIDITY BASIS
I
10
1958
i
i
I
1960
I
1962
J/FIRST 3 QUARTERS AT SEASONALLY ADJUSTED ANNUAL RATES.
J/EXCLUDING OFFICIAL RESERVE TRANSACTIONS.
i/EXCLUDING LIQUID CAPITAL.
SOURCE: DEPARTMENT OF COMMERCE.
180
I
I
1964
I
1966^
TABLE 30.—United States balance of payments, 1960-66
[Billions of dollars]
Type of transaction
Balance on goods and services_
Balance on merchandise tradeMilitary expenditures, net
Balance on other services
Remittances and pensions
1960
1961
1962
1963
1964
1965
1966»
4.0
5.6
5.1
5.9
8.5
7.0
5.5
4.8
-2.7
2.0
5.4
-2.6
2.8
4.4
-2.4
3.1
5.1
-2.3
3.1
6.7
-2.1
3.9
4.8
-2.0
4.2
3.7
-2.7
4.5
-.7
-.7
-1.0
-1.0
Government grants and capital, net
-2.8
-2.8
-3.0
-3.6
-3.6
-3.4
-3.6
U.S. private capital, net
-3.9
-4.2
-3.4
-4.5
-6.5
-3.7
-3.6
.4
.7
1.0
.7
.7
.2
2.0
-1.0
-1.2
-.4
-1.0
-.4
-.5
-2.4
-2.2
-2.7
-2.8
-1.3
-1.2
1.0
-.2
.6
1.6
.1
2.3
.3
.1
.5
Foreign nonliquid capital, net
Errors and omissions
BALANCE ON LIQUIDITY BASIS
Plus: Foreign private liquid capital, n e t 2
Less: Increases in nonliquid liabilities to
foreign monetary authorities»
BALANCE ON OFFICIAL
TRANSACTIONS BASIS
.5
.3
RESERVE
Gold (decrease 4 )
Convertible currencies (decrease -f)
I M F gold tranche position (decrease -f)-.
Foreign monetary official claims (increase-f)
-.9
-3.4
1.7
......
1.3
-1.3
-2.7
-2.0
-1.5
-1.3
.7
-.1
-.1
.9
(4)
.6
.5
-.1
.1
-.2
.3
1.7
-.3
-.1
*.6
•-.5
.7
1.2
1.7
1.4
•-1.4
1
2
First 3 quarters at seasonally adjusted annual rates, except as noted.
Includes changes in Treasury liabilities to certain foreign military agencies during 1960-62.
»Included above under foreign nonliquid capital.
*Less than $50 million.
* First 3 quarters at unadjusted annual rates.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
was the sharp acceleration in the growth of merchandise imports beginning
in 1965, to an annual rate of about 20 percent. In 1966, imports rose to
about 3.5 percent of GNP—the highest in the postwar period—from about
3.2 percent in 1965 and an average of less than 3 percent in previous years of
the 1960's.
Imports of capital goods rose by about 50 percent, and accounted for
more than 20 percent of the increase in imports in 1966. For the second
consecutive year they rose sharply as a percentage of total domestic purchases of capital goods. As the increasing demand for capital goods began
to strain domestic capacity in 1965, and even more in 1966, purchasers
increasingly turned to foreign suppliers to get prompt delivery. While
less than 3 percent of domestic requirements was imported in 1964, about
9 percent of the increase in domestic purchases of capital equipment between
1964 and 1965, and over 12 percent between 1965 and 1966, was accounted
for by additional imports. The earlier strains and pressures continued to
affect imports, especially for long lead-time items, in the second half of 1966,
after the pace of over-all economic advance had moderated.
181
Export performance in 1966 was healthy despite domestic demand pressures. Exports were more than 10 percent greater than in 1965, even after
adjustment for the effects of the 1965 dock strike. The U.S. share of world
exports (excluding exports to the United States) remained stable, while
the U.S. share of world exports of manufactured goods rose slightly.
A major source of the strength of U.S. exports in the 1960's has been
the stability of the U.S. cost-price structure, while costs and prices have been
rising elsewhere. Recent price developments in the United States, however, brought this relative improvement to a halt. Even so, unit labor costs
in manufacturing have risen less rapidly in the United States during 1966
than in most other industrial countries. On the whole, it appears that the
U.S. competitive position with respect to prices and costs was essentially
unchanged in 1966.
Other Goods and Services. Overseas military expenditures increased in
1966 by more than $700 million, after having been relatively stable for several years. The war in Vietnam, of course, was the cause of the increase.
Expenditures in Europe still account for about 45 percent of the total, but
have been largely offset by purchases of U.S. military equipment and by
various financial transactions.
Other items in the goods and services balance behaved normally. Investment income receipts, expanding by 6 percent, showed continued
strength. U.S. travel expenditures abroad also continued to increase. Foreign travel expenditures in the United States rose faster on a percentage
basis, but by less in dollar amount, than the expenditures of U.S. nationals
abroad.
The deterioration of the U.S. balance on goods and services during 1966,
in summary, reflected primarily pressures stemming from the rapid advance
of the domestic economy and the foreign exchange costs of the hostilities
in Vietnam.
The Capital Account
As shown in Table 31, net U.S. private capital outflows fell from a record
$6.5 billion in 1964 to $3.7 billion in 1965 and remained essentially unchanged in 1966.
U.S. Purchases of Foreign Securities. After a sharp rise in new issues of
foreign securities in U.S. markets beginning in 1962, the United States in
July 1963 imposed an Interest Equalization Tax (IET) on purchases from
foreigners of securities of issuers in developed economies other than Canada.
The IET was designed as a partial offset to the lower interest rates which
prevailed in U.S. capital markets as a result of better organization and
greater competitiveness, and of the need for the United States to press
toward full employment of its resources through expansionary fiscal and
monetary policies.
The IET has worked well. From 1964 through 1966, U.S. net purchases of foreign securities averaged about $700 million annually, down
182
TABLE 31.—United States balance of payments: Capital transactions, 1960-66
[Billions of dollars]
Type of capital transaction
U.S. private capital, net
Direct investmentNew foreign security issues. __
Other transactions in foreign securities 2__
U.S. bank claims
Other claims _
1960
1961
1962
1963
1964
-3.9
-4.2
-3.4
-4.5
-6.5
-3.7
-3.6
-1.7
-.6
-.1
-1.2
-.4
—1.6
-.5
-.2
-1.3
-.6
—1.7
-1.1
.1
—.5
-.4
-2.0
-1.3
.1
—1.5
.2
-2.4
-1.1
.4
-2.5
-1.0
-3.4
-1.2
.4
.1
.3
-3.2
-1.2
.7
.3
-.3
.4
.7
1.0
.1
.1
.1
.3
()
.3
.3
.1
()
.8
.3
.1
.4
0.7
1.0
1.0
-.2
0.7
.6
Foreign nonliquid capital, net
Direct investment
U.S. securities
(excluding
Treasury
issues) __
Long-term U.S. bank liabilities. .
Other*
Foreign nonliquid capital, net
Plus: Foreign private liquid capital, net
Less: Increases in nonliquid 5liabilities to foreign monetary authorities
Equals: Foreign capital excluding official reserve transactions, net
3
0.4
.5
(3)
3
.3
.8
1.7
.5
(3)
1.3
19661
.2
2.0
.1
-.1
-.1
.2
.5
-.4
.2
.4
1.1
.8
.3
0.7
1.6
0.2
.1
2.0
2.3
.3
.1
.5
1.9
.2
3.9
.7
(3)
1965
.7
3
()
1 First 3 quarters at seasonally adjusted annual rates.
2 Includes redemptions.
34 Less than $50 million.
Includes certain special government transactions.
5
Included above under foreign nonliquid capital.
NOTE.—Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
from the average of $1.1 billion of 1962 and 1963. U.S. purchases of new
issues have stabilized near $1.2 billion; virtually all new issues have been
by Canadians and other borrowers not covered by the tax.
U.S. Direct Investment and Bank Lending. The outflow of direct investment funds from the United States began to accelerate in 1963.
By 1965, the flow was more than double that in 1960-62. The years 1963
and 1964 also saw a sharp rise in loans abroad by U.S. banks. The total
outflow of U.S. capital in 1964 was more than $2^2 billion in excess of its
average in 1960-61.
Although the outflow of portfolio capital and bank loans is largely explained by differentials in the cost of borrowing and the efficiency of U.S.
financial markets, the increase in direct foreign investment by U.S. corporations in the last few years is somewhat more difficult to explain. The
rapid increase in investment in Europe generally reflects, of course, a desire
to participate in a large and rapidly expanding new market.
Earnings on investments in Europe, however, have fallen since 1962.
Between 1955 and 1962, rates of return on investments of U.S. manufacturing affiliates in Europe, at 14 to 19 percent, were significantly higher
each year than the 10 to 15 percent earned by U.S. manufacturers at home.
However, since 1962, earnings on direct investments in Europe have varied
between 12 and 14 percent, about the same as, or—in 1965—even below,
183
those in the United States. It is possible that long-term plans for expansion
of foreign operations decided upon in the earlier period have dictated the
large investment outflows of recent years.
Whatever the reasons for the sharp increase in direct investment and bank
lending in 1963-64, it clearly was imposing an intolerable strain on the U.S.
balance of payments.
Consequently, early in 1965, the United States introduced a program of
voluntary restraint on foreign investment by U.S. corporations and banks.
This program was designed to moderate the capital outflow to the developed countries, while not interfering with the flow to the less developed.
The Federal Reserve program requested that banks limit their increase
in claims on foreigners in 1965 to 5 percent of the outstanding claims at the
start of the year; a further 4 percent increase was the suggested limit in 1966.
Banks were asked to give priority to export financing and credits to less
developed countries. Similar guidelines were applied to foreign lending
by other financial institutions. This program—together with the effects
of tight money—achieved a $2j/2 billion favorable swing in bank lending
from 1964 to 1965 and a further $200 million improvement in 1966.
The Department of Commerce, early in 1965, asked large nonfinancial
corporations to make a maximum effort to expand their net payments
balances and to repatriate liquid funds. Late in 1965, corporations were
asked to limit their average annual direct investment outflows (including
reinvested earnings, but net of U.S. corporate borrowing abroad) for 1965-66
to specified developed and oil exporting countries to no more than 135
percent of the average annual flow in 1962-64.
Under the Commerce program, firms have been encouraged to obtain
maximum foreign financing. An indication of the program's success is the
sharp surge in U.S. corporate borrowing abroad. In particular, U.S. corporations issued more than $500 million of securities in foreign capital
markets during the first three quarters of 1966. (These issues are included
in Table 31 under foreign investment in U.S. securities; it offsets a part of
the debit on direct investment.) In addition, borrowing by foreign subsidiaries of U.S. corporations has increased, reducing the need for outflows
from the United States.
With these adjustments in financing, U.S. corporations continued their
extraordinary expansion of plant and equipment expenditures abroad.
Outlays in 1965 were more than 20 percent higher than in 1964; a further
substantial increase is estimated for 1966, to an amount nearly double the
outlays in 1962. The increase from 1965 to 1966 in U.S. manufacturing
investment in EEC countries may have been more than one-third.
Foreign Capital. Higher yields on U.S. securities in 1966 attracted a large
inflow of foreign capital, particularly into Government agency obligations
and certificates of deposit issued by U.S. banks. Foreign official agencies and
international organizations shifted a substantial volume of liquid dollar
claims into these instruments.
184
The inflow of foreign private liquid capital that occurred in the third
quarter of 1966 was particularly large. U.S. monetary tightness provided
a strong pull to such funds. Some of the inflow clearly reflected a movement
out of sterling during the period of acute pressure in July and August.
Although an upward trend in private foreign demand for dollar balances is
to be expected, the surge that occurred in the third quarter will obviously not
continue and may be partly reversed in the future.
Most of the inflow represented borrowing by U.S. banks from their
foreign branches as the home offices of U.S. banks responded to tightness
in their reserve positions. The foreign branches, able to offer higher rates
to depositors than those allowed in the United States, gathered a substantial
volume of short-term funds abroad. Although this flow of funds did not
reduce the U.S. deficit on liquidity account, it did prevent what would
otherwise have been a larger flow of dollars into the hands of foreign official
monetary agencies, and thereby placed the official settlements account in substantial surplus in the third quarter. It probably held down the loss in
U.S. reserve assets at a time when there was temporary deterioration in
other parts of the balance of payments.
i
PROSPECTS AND POLICIES FOR 1967
The U.S. trade surplus should resume its growth in 1967. Indeed, improvement may have begun in the fourth quarter of 1966. Success of the
domestic economic policies described in Chapter 1 will be essential to improvement of the trade surplus. A moderate pace and more balanced
pattern of domestic economic advance should lower the ratio of imports
to domestic income from the peak recorded in 1966. While imports grow
at a slower rate, export expansion should continue to be strong, given
favorable growth rates in foreign markets and the increase in dollar earnings
enjoyed by foreigners in 1966. The easing of domestic demand pressures
and more stable prices should enable U.S. producers to take full advantage
of export opportunities.
In addition, the U.S. Government will undertake further active efforts
to promote exports, in part through expanded credit facilities of the ExportImport Bank. Steps are also being taken to attract a substantially larger
number of tourists to the United States. The special task force on travel
which the President will appoint in the near future should lay the groundwork for a greatly intensified long-run effort in this area.
Military expenditures abroad will continue to be large, although they will
probably grow at a slower rate than in 1966. At the same time, the excess
of investment income receipts over payments should show a substantial
growth. The surplus on goods and services, then, should improve in 1967.
Just as the capital account of the U.S. balance of payments last year
benefited greatly from the sharp tightening of monetary conditions, relaxation of credit could create pressures in 1967 for increased private capital
outflows and reduced foreign inflows. This makes it especially important
that the programs to limit capital outflows be continued and strengthened.
Strengthened Voluntary Programs
The 1967 guidelines for the Federal Reserve and the Department of
Commerce voluntary restraint programs, issued last December, reflect these
considerations. Commercial banks by late 1966 were more than $1.2 billion
under their Federal Reserve guideline ceilings. To limit the potential increase in total foreign lending during 1967, the Federal Reserve asked each
bank to continue to observe, throughout 1967, its existing ceiling of 109
percent of the claims outstanding as of the end of 1964. Banks were also
asked to use their leeway under the ceiling only gradually—not more than
one-fifth of it per quarter—beginning with the fourth quarter of 1966. Moreover, to assure that such credits as are extended will be devoted primarily
to the financing of exports or to meet the credit needs of developing countries, any increase in nonexport credits to developed countries is to be limited
to 10 percent of the leeway existing on September 30, 1966. New and
greatly simplified guidelines were also issued for nonbank financial institutions.
The guidelines for the Department of Commerce voluntary program to
restrain direct investment outlays of business firms abroad were also strengthened. The ceiling on direct investment outflow plus overseas retained
earnings for the average of the two years 1966-67 was lowered to 120 percent of the 1962-64 average. With the strengthened program, the total of
direct investment outflows—net of borrowings abroad—and retained overseas earnings in 1967 is expected to be below the actual level now estimated
for 1966. The program will continue to permit the expansion of U.S. plant
and equipment expenditures in those countries covered to the extent that
the expansion can be financed from foreign sources. It also remains a fully
voluntary program, confined to investments in developed and oil exporting
countries.
Extension of 1ET
As a further measure to strengthen existing programs, the President is
requesting a 2-year extension of the IET, now scheduled to expire in
mid-196 7, and is asking for authority to vary the effective rate of the tax
between zero and 2 percent a year. By present law, the tax adds 1 percentage point, in effect, to the annual interest costs of those foreigners
subject to the tax who borrow at long term in the United States or who sell
securities to U.S. citizens.
The discretionary authority sought by the President would permit a
rapid and flexible response to changing monetary conditions at home and
abroad. Although the present 1 percent rate has virtually eliminated new
security issues of countries which are not exempted, the current rate could
prove ineffective, if foreign countries do not lower their high interest rates
while U.S. monetary conditions ease.
186
BALANCE OF PAYMENTS ADJUSTMENT POLICIES
As countries grow at different rates and in different ways, payments
imbalances are bound to arise. The adjustment policies of each country
will directly affect not only its payments balance but its own internal economic performance and the payments balances of other countries. Therefore, payments adjustment should be pursued in ways compatible with each
country's major domestic objectives and with the broad interests of the
entire international community.
REPORT ON THE ADJUSTMENT PROCESS
During 1966, important progress was made toward developing a greater
international consensus on policies best suited for adjusting payments imbalances. A report by Working Party 3 of the OECD, prepared by representatives of the ten major industrial countries, carefully explored the nature of
the adjustment process and pointed to various possibilities for improving it.
The report recommended various ways of strengthening national policy
instruments and outlined a set of informal guidelines regarding appropriate
adjustment policies. In addition, it suggested a number of steps to improve adjustment procedures through greater international cooperation,
including collective reviews of countries' balance of payments aims; the
setting up of an "early warning" system for prompter identification and
better diagnosis of payments imbalances; and the strengthening of international consultations with respect to the sharing of responsibilities for
adjustment. These suggestions stemmed from the report's major conclusions, which included the following:
First, countries need to formulate their balance of payments aims more
clearly and base their individual and joint policies on aims that are mutually
consistent as well as desirable from the viewpoint of a healthy world economy.
Second, responsibility for adjustment must fall on both surplus and deficit
countries.
Third, countries need to have available and make use of a wider range of
policy instruments—both general and selective—and to tailor such instruments more finely to the requirements of different circumstances and multiple policy goals. There is particular need in many cases to place greater
reliance on fiscal policies, and less on monetary policies, in achieving internal
economic balance, because of the important international ramifications of
changes in monetary policy.
Fourth, the proper combination of policy instruments depends on the situations encountered and the particular characteristics of the country concerned. No single policy prescription is appropriate in all cases.
Fifth, countries must take continuous account of the impact of their
actions on other countries. A special need for international consultation
exists in the field of monetary policy to avoid inappropriate levels of interest
rates.
187
U.S. ADJUSTMENT POLICIES
The strategy adopted by the United States to improve its international
payments position can be viewed in the light of the adjustment principles
outlined by Working Party 3. U.S. policy has been designed to minimize interference with basic domestic and international objectives of this
Nation and with the healthy development of the world economy.
Monetary and fiscal policies were used in 1966 to restrain demand in
the light of both domestic and balance of payments considerations. The
United States has continued to pursue a liberal trade policy. It has
maintained its flow of economic assistance to the less developed countries.
Direct interference with international transactions has been essentially
limited to Government transactions and restraints on the outflow of capital
to the developed countries of the world.
Policy on Goods and Services
Resort to controls over private international transactions in goods and
services has been avoided as harmful to both the United States and the world
economy. The long and steady progress toward trade liberalization could
well be reversed by even "temporary" restrictions, which could threaten to
become permanent shelters of protection for economic interest groups.
Thus, U.S. actions to deal with the balance of payments problem have maintained the trend toward trade liberalization in which the United States
has taken strong and consistent leadership since 1934.
On the other hand, vigorous action has been taken to minimize the
foreign exchange costs of U.S. Government programs. There is no
precedent for the economic and military assistance extended to foreign countries and the military expenditures made abroad by the U.S. Government
since World War II. The acceptance of these responsibilities has involved
a major balance of payments drain.
U.S. nonmilitary foreign aid programs—which, net of loan repayments,
currently amount to $3.6 billion a year—now have only a limited net balance
of payments impact. This has been achieved by tying aid so far as feasible
to purchases of U.S. goods and services. Although tying is already broadly
applied and probably cannot be usefully extended in any major degree, continuing effort is required to assure the effectiveness of the techniques
employed.
U.S. offshore military expenditures have been substantial during the
entire postwar period, reflecting national security requirements and commitments to allies in an unsettled world. The impact of these expenditures on the U.S. balance of payments was reduced from a 1958 high of
$3.4 billion to less than $2.9 billion in 1965; the Vietnam war caused a
sharp increase, to $3.6 billion, in 1966 (first three quarters at annual rate).
At the same time, deliveries of military equipment sold to foreign countries
rose from about $300 million a year in 1960 to about $1.1 billion for the full
year 1966.
188
The foreign exchange costs of the security program, even excluding Vietnam, remain high. The United States is prepared to play its full part in
supplying the necessary real resources for the common defense. But it seems
reasonable to expect those allied countries whose payments positions benefit
from U.S. expenditures for the common defense to adopt measures to neutralize their "windfall" foreign exchange gains—especially when their reserve
positions are strong. This could be done in many ways. Specific arrangements could be worked out within the framework of the alliance itself.
Such arrangements could relieve strategic planning from balance of payments constraints which, in the extreme, could jeopardize our national
security and that of our allies.
Policy on Capital Flows
Over the years, the outflow of U.S. capital has made a major contribution
to world economic growth. By providing capital to areas where it is relatively scarce, U.S. foreign investment raises foreign incomes and often leads
to a more efficient use of world capital resources. U.S. direct investment
has provided a vehicle for the spread of advanced technology and management skills. U.S. foreign investment also has yielded handsome returns to
American investors and substantial investment income receipts for the
balance of payments.
Despite the advantages of U.S. foreign investment both to the recipient
countries and to the United States, it can—like every good thing—be overdone. And it was being overdone in the early 1960's. Just as a person must
weigh and balance opportunities for investment that will be highly profitable in the future against his current wants, so must a nation weigh the benefits of future foreign exchange income against current requirements. The
costs of adjusting other elements in the balance of payments may be greater
than the costs of sacrificing future investment income.
It is often true that U.S. investment abroad generates not only a flow of
investment income but also additional U.S. exports. From a balance of
payments standpoint, this is an additional dividend. Yet it is also true, in
some cases, that U.S. plants abroad supply markets that would otherwise
have been supplied from the United States, with a consequent adverse
direct effect on U.S. exports.
It is sometimes held that the international flow of capital occurs always
and automatically in just the economically "correct" amount, and that any
effort to affect this flow through government measures constitutes a subtraction from the economic welfare of the country of origin, the country of
receipt, and the entire world community. Such a position cannot be
sustained.
While much of the large flow of U.S. capital to the developed countries
is no doubt a response to a shortage of real capital there relative to the United
States, the flow is also influenced by many other factors. These may include
240-782 O—67—13
cyclical differences in capacity utilization, differences in monetary conditions
and financial structure, speculation on exchange rates, tax advantages, and
opportunities for tax evasion—none of which necessarily leads to a more
rational pattern of international investment.
High prospective returns on investment in a particular country may
reflect a particular choice of policies in the recipient country that is quite
unrelated to any underlying shortage of capital. If a country chooses to
channel the bulk of its private saving into low productivity uses, if it employs
a tight monetary policy, if it limits access of its own nationals to its capital
market, it will attract foreign capital. Restraint on such capital flows may
therefore merely mean that more of the adverse effect of such domestic
policies on economic growth will rest—as perhaps it should—on the country
that made the policy choice.
Trade restrictions may also lead to a flow of capital that would not otherwise take place. U.S. investment in the EEC has, at least in part, been
induced by the desire to get within the tariff walls erected around a large
and growing market. If, however, a continued movement toward trade
liberalization may be expected, the economic justification for some part of
these capital flows is lessened.
One major stimulant for direct investment abroad is undoubtedly the
substantial advantage in technology and managerial skills which U.S. firms
often possess. The international transfer of these factors may be embodied
in a capital outflow independent of the relative scarcity of capital. Action
would thus be appropriate, not necessarily to curtail the investment itself,
which would interfere with the beneficial transfer of the scarce technology
and skills, but to transfer the source of financing to the area receiving the
direct investment. This, indeed, is the primary intention and the result of
the present voluntary program on direct investment.
Finally, differential monetary conditions among countries can induce
capital flows. But monetary policy is an important and useful instrument
of domestic stabilization and growth as well as of balance of payments adjustment. During 1960-65, U.S. monetary policy was oriented to serve
domestic expansion. In 1966, it contributed to a desirable restraint on
internal demand and to an improved balance of payments. In 1967,
relaxation of U.S. monetary policy has begun in order to help obtain a
better balance of internal demand. Appropriate use of restraints on capital
outflows in such forms as the voluntary programs and the IET can usefully
supplement monetary policy in promoting domestic and international goals.
In summary, it is clear that balance of payments policy should not exempt
capital flows from its compass. It is equally clear that the United States
should be a major capital exporter. The U.S. programs have been designed to maintain a reasonable flow of capital, especially to the less developed countries. Given the alternatives and the need to improve its payments position, the United States has restrained the outflow of capital as
190
preferable to cutting essential international commitments, limiting international trade, or restricting domestic—and world—economic growth.
ADJUSTMENT POLICIES OF OTHER DEVELOPED COUNTRIES
Actions by the United States to improve its payments position cannot by
themselves assure that the world payments pattern will be either sustainable
or desirable from an international point of view. Such a result is only possible through appropriate efforts of both deficit and surplus countries.
In 1966, various other countries pursued policies to reduce payments
imbalances. The most dramatic measures were taken by the United Kingdom, following renewed severe speculative attacks on the pound in the
summer, which were initially met by drawings on swaps and other shortterm international credit facilities cooperatively provided by the financial
authorities of the major industrial countries and the Bank for International
Settlements. The British increased the bank rate to 7 percent, provided a
strong dose of over-all fiscal restraint, adopted selective tax measures to
encourage increased productivity, and imposed a temporary freeze on wages
and prices. These measures markedly reduced the earlier deficit, and the
United Kingdom may soon move into surplus.
In Italy and Japan, resumption of more rapid growth in domestic economic activity, together with policies favorable to increased capital exports,
succeeded in reducing payments surpluses as the year progressed. Industrial expansion in France similarly led to a shrinkage in that country's overall surplus as the trade balance narrowed; however, there continued to be a
net capital inflow.
Germany, which had a payments deficit in 1965 for the first time in several
years, swung back to a sizable surplus in 1966. Monetary policy was tightened mainly to contain inflation. As a result, domestic investment slowed
markedly, and the trade surplus increased sharply. The payments surplus
was still expanding at year end. In January 1967, Germany took a welcome
step toward monetary ease by lowering the central bank discount rate.
Although somewhat reduced from the preceding year, payments imbalances continued large in 1966. In some countries, corrective policies
are clearly needed to prevent imbalances from growing still larger in the
current year. Moreover, considerable question remains whether the pattern
of adjustment in 1967 will permit a fully satisfactory rate of economic growth
in the industrial countries, and an adequate flow of capital to the less developed world.
The United States will be actively pursuing policies to strengthen its
payments position in 1967. But reduction of U.S. deficits must have a
counterpart in reduced surpluses or increased deficits elsewhere. If the
impact of the U.S. payments improvement were to fall largely on the
United Kingdom or the less developed countries, the international payments
system would suffer rather than benefit. From the viewpoint of a viable
international payments pattern, consequently, there is no real alternative: it
is the countries with strong underlying payments positions and large reserves
which must absorb a major share of the impact of reduced U.S. and U.K.
deficits. In particular, a marked reduction is needed in the chronic over-all
surplus of the major industrial countries of Continental Europe.
The surplus countries also bear a significant share of the responsibility
for assuring that the manner in which adjustment takes place is, to the greatest extent possible, consistent with the broad objectives of the international
economic community as a whole.
Most importantly, adjustment policies should not, in the aggregate, prevent a healthy rate of worldwide economic growth compatible with reasonably stable price levels. In the United States, demand policies aiming at a
slower rate of growth than that of 1966 are, of course, entirely appropriate
on purely domestic grounds. But an even more marked slowdown in demand than is needed for proper domestic balance would entail serious social
and economic costs at home and could risk a recession. Given the massive
weight of the United States in the world economy, such a policy would risk
a slowdown in trade and economic growth on a worldwide basis.
On the other hand, the objectives of international economic expansion and
payments adjustment are simultaneously served when surplus countries with
lagging internal demand take effective steps to spur the pace of economic
activity—as was, for example, true of France, Italy, and Japan during the
past year. In 1967, a number of surplus countries will be in a good position
to contribute significantly to better international payments equilibrium in
this fashion, without running serious risks of engendering inflationary
pressures.
Surplus countries also have a special responsibility for fostering relative
freedom in international transactions. As the report of Working Party 3
pointed out, it is desirable—wherever possible—that adjustment take place
"through the relaxation of controls and restraints over international trade
and capital movements by surplus countries, rather than by the imposition
of new restraints by deficit countries." In the past year, Italy and Japan
generally followed policies that facilitated capital outflows; the recently
announced intention of the French Government to liberalize capital controls is also a hopeful development. There is, however, scope for further
measures by various surplus countries to liberalize the regulations that govern
capital outflows and also to ease restrictions on imports. More liberal import policies would both improve payments balance and counter domestic
inflation.
In 1966, there was an escalation of monetary restraint. The sharp tightening of monetary policies in the United States, undertaken largely for domestic reasons, did help significantly to contain the U.S. payments deficit
during the year. Monetary action also was a key feature in the program to
defend the British pound. But countries in a strong reserve position
192
also placed heavy reliance on restrictive monetary policies to contain domestic demand. The net effect of all these actions, and of the
failure of most other countries to take active steps to avoid monetary stringency, was a dramatic upward movement in interest rates on a worldwide
basis (Chart 17). Between September 1965 and September 1966, rates
on 90-day Eurodollar deposits increased from 4.4 percent to 6.7 percent;
yields on long-term international bond issues rose by more than a full
percentage point; and there were marked increases in long-term government
bond yields in all major industrial countries.
The extent to which the present high worldwide level of interest rates aids
the process of balance of payments adjustment is doubtful. The substantial
benefit to the U.S. balance of payments from the tightening of U.S. monetary conditions stemmed from differential monetary conditions here and
abroad. The potential magnitude of such effects is reduced when surplus
countries simultaneously permit or even encourage their own interest rates
to rise.
From the standpoint of world economic growth, it would be preferable
if payments adjustment took place at a lower average level of interest rates
than has recently prevailed. Precisely what level is appropriate is a matter
that deserves continuing international discussion.
Given the key role of the United States in international financial markets,
a general easing in international monetary conditions would be greatly aided
by a lessening of monetary tightness in the United States. A move in this
direction, already under way, will have major benefits for domestic economic balance. But if credit relaxation were confined to the United States,
it would not promote a better balance of payments adjustment either for
this country or for the major surplus countries of Europe. Moreover, at
least in some important European economies, monetary easing would help
to facilitate needed domestic economic growth. It would appear, therefore, that movement toward easier credit conditions by the countries of
Western Europe would promote their own and the general welfare. Where
necessary for domestic reasons, demand restraint could be maintained by
greater reliance on fiscal policy.
If the major surplus countries adjust mainly by permitting their trade
surpluses to decline, this can lead to a substantially improved trade surplus
for the United States and permit it to maintain and even augment its role as
a major capital exporter. Alternatively, if the large surplus countries—and
particularly the EEC countries—wish to continue to maintain a substantial
surplus on current account, they should assume a larger share of the responsibility for providing financial capital where it is needed.
Some progress in this direction has, in fact, recently been made, partly
under the spur of the more restricted access to U.S. capital markets. New
international bond issues in Europe during the first three quarters of 1966,
for example, were at an annual rate of about $1.4 billion—four times the
193
Chart 17
Interest Rates in Selected Countries
PERCENT
SHORT-TERM INTEREST RATES-L/
Ntf:
GERMANY
1964
1966
LONG-TERM INTEREST RATES ^7
SWITZERLAND
,• I
1958
1960
1962
1964
1966
.S. AND U.K., 3-MONTH TREASURY BILLS; GERMANY, 3-MONTH INTERBANK LOANS; SWITZERLAND, 3MONTH BANK DEPOSITS.
.S., 10-YEAR TAXABLE BONDS; U.K., WAR LOANS; GERMANY, PUBLIC AUTHORITY BONDS; SWITZERLAND,
GOVERNMENT BONDS.
NOTE.-DATA PLOTTED ARE ANNUAL THROUGH 1963, QUARTERLY THEREAFTER.
SOURCES: TREASURY DEPARTMENT AND BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
$360 million level in 1962, the year preceding the introduction of the Interest
Equalization Tax. It is highly desirable, however, that the surplus countries take stronger steps to enlarge the capacity of their capital markets
and to assure an adequate volume of long-term capital exports (including
foreign aid), especially to the less developed countries.
INTERNATIONAL MONETARY REFORM
The avoidance or appropriate correction of large-scale payments imbalances is of key importance in facilitating sound world economic growth and
relatively unfettered international trade and payments. But better adjustment alone is not sufficient to attain these objectives.
In the long run, most countries seek some steady increase in their international reserves. With growing world transactions, this has meant that
they have generally sought to have surpluses rather than deficits in their
balances of payments. Obviously, however, all countries cannot attain such
a goal simultaneously. At present, only the flow of new gold into monetary
reserves can permit a steady accumulation of reserve assets by some countries without corresponding deficits for others.
This flow of new gold has, for many years, been inadequate. For much of
the postwar period, dollars supplied through U.S. deficits served as the major
supplement to gold in new reserve creation. For reasons already cited, however, the dollar can no longer be expected to perform this task in the same
way; nor can it be assumed that adequate new reserves will accrue in the
form of automatic drawing rights at the IMF, as the byproduct of the
Fund's normal lending operations. To satisfy desires for rising official
monetary reserves over the longer run and to eliminate dependence of
the world economy on the vagaries of gold production, deliberate generation of new reserve assets is needed on a cooperative international basis.
In 1966, significant progress was made toward setting up a mechanism for
such deliberate reserve creation. Representatives of the major industrial
countries known as the Group of Ten agreed that it is prudent to begin the
preparation of a contingency plan now. They also agreed that deliberate
reserve creation should be tailored to global needs rather than the financing
of individual balance of payments deficits; that decisions on the amount
of reserves to be created should be made for some years ahead; and that
reserve assets should be distributed to all members of the Fund, on the basis
of IMF quotas or comparable objective standards. While the negotiations
in the Group of Ten, and parallel deliberations by the Executive Directors
of the Fund, did not result in complete accord on the precise form and
use of new reserve assets, the exploration of technical details produced
substantial agreement regarding the nature of alternative "building blocks"
that might be incorporated in the final contingency plan.
A major accomplishment in 1966 was the initiation of a second stage of
international monetary negotiations late in the year, involving joint dis-
195
cussions of the Executive Directors of the Fund and the Deputies of the
Finance Ministers and Central Bank Governors of the Group of Ten. It is
hoped that these meetings, which have already shown great promise, will
by the time of the next Annual Meeting of the Fund lead to a wide consensus
on the key remaining points at issue.
Differences of view on two of these points already seem to be narrowing.
There now appears to be a widespread feeling that the needs of the international monetary system can best be served if deliberate reserve creation is
effected through the development of an entirely new reserve unit, distributed
to all Fund members. At the same time, there is increasing recognition that
satisfactory procedures can be developed to make the new reserve asset generally acceptable without linking its use to specified payments of gold.
Probably the most important outstanding issue is the precise manner in
which decisions on reserve creation are to be made. There is good reason
to expect, however, that this question can be resolved in a way that takes
account of the legitimate needs and interests of all the countries represented
in the negotiations.
While the progress made in the negotiations thus gives ground for considerable satisfaction, it is also true that the need for developing a contingency plan for deliberate reserve creation has become more urgent.
One reason is that it can no longer be assumed that U.S. deficits will
automatically increase world reserves. These deficits, which for much
of the postwar period were the main element in new reserve creation, have
since the end of 1964 made no net contribution to the rise in world reserves. Indeed, in September 1966, the dollar holdings in the official
reserves of other countries were actually smaller than 21 months earlier,
both in absolute terms and after a rough adjustment for seasonal influences.
Over this period, total U.S. gold sales to other countries were more than
twice as large as the accumulated U.S. balance of payments deficit on
official settlements. Thus, the manner in which the U.S. deficit was financed has tended to reduce, rather than augment, the total of world
reserves.
Second, the flow of gold into monetary channels has been sharply reduced recently. While final estimates for 1966 are not yet available, it is
likely that there was virtually no net addition of gold to monetary reserves
during the year. In 1965, only $240 million of new gold entered into monetary stocks. This contrasts with an annual average of about $600 million
in the decade ended in 1964.
Third, it is significant that the modest increase in over-all world reserves
that did occur in the recent past reflected very special circumstances. During the 21-month period from the end of 1964 through September 1966,
world reserves increased by about $1.8 billion. But the largest part of this
increase was a byproduct of the difficulties experienced by the British pound,
which caused the U.K. authorities to draw $1.4 billion from the IMF; a
large portion of this drawing, in turn, increased reserve claims on the Fund by
196
other countries. Not only can transactions of this kind no longer be counted
upon to add to world reserves as the British situation improves, but repayment of Britain's debt could actually lead to a contraction of reserves.
These considerations suggest that the time when deliberately created reserves are needed may be closer at hand than is often realized. In any
event, continued uncertainty regarding the nature of a contingency plan and
the timing of its adoption can be a growing source of uneasiness in international financial markets and interfere with the smooth working of the
adjustment process. Clear agreement on a contingency plan, on the other
hand, would be a major factor in strengthening confidence in the world
monetary system and in reducing gold hoarding and would help lessen the
tendency of countries to pursue unattainable balance of payments aims.
The essential tasks for 1967 thus are to improve the process of payments
adjustment through increased international cooperation and to move decisively toward establishing a mechanism for deliberate reserve creation. The
two tasks are intimately interwoven; success in both is necessary to provide
a sound climate for world economic growth and relative freedom in trade
and capital transactions, as well as to assure an adequate flow of long-term
capital from the developed to the less developed countries.
197
Appendix A
REPORT TO THE PRESIDENT ON THE ACTIVITIES OF
THE COUNCIL OF ECONOMIC ADVISERS DURING 1966
199
LETTER OF TRANSMITTAL
DECEMBER 31,1966.
The PRESIDENT.
SIR: The Council of Economic Advisers submits this report on its activities
during the calendar year 1966 in accordance with the requirements of
Congress, as set forth in section 4(d) of the Employment Act of 1946.
Respectfully,
GARDNER AGKLEY, Chairman
JAMES S. DUESENBERRY
ARTHUR M.
201
OKUN
Report to the President on the Activities of the
Council of Economic Advisers During 1966
Throughout 1966 the Council of Economic Advisers was confronted with
the challenge of analyzing the problems and opportunities of a prosperous
economy, now at full employment for the first time in more than a decade.
The problem of reconciling full employment and price stability introduced a
new emphasis into every area of the Council's work—fiscal and monetary
analysis, examination of manpower problems and of programs for efficiency
in industry, and study of balance of payments issues. Some of our specific
activities in the price area are described more fully in our Annual Report.
In recent months the pressures on prices seem to have been more restrained,
as economic policies have sought to turn the expansion along the path of
full employment growth. The challenge for the Council in 1967 is to contribute to the shaping of policies that will maintain expansion along that
path.
COUNCIL MEMBERSHIP
Gardner Ackley and Arthur M. Okun continued to serve as Council members in 1966, with Mr. Ackley as Chairman. James S. Duesenberry joined
the Council on February 2, replacing Otto Eckstein who returned to his
position as Professor of Economics at Harvard University. Messrs. Ackley,
Okun, and Duesenberry are on leave from the University of Michigan, Yale
University, and Harvard University, respectively.
Following is a list of all past Council members and their dates of service:
Position
Name
Edwin G. Nourse
Leon H. Keyserling
John D. Clark
Roy Blough
Robert C. Turner
Arthur F. Burns
NeilH.Jacoby
Walter W. Stewart
Joseph S. Da vis _.
Raymond J. Saulnier
Paul W. McCracken
Karl Brandt
Henry C, Wallich
James Tobin
Kermit Gordon
Walter W. Heller
John P. Lewis
Otto Eckstein
...
Oath of office date
Chairman
.. . .
August 9,1946
Vice C hairman
August 9,1946
Acting Chairman
November 2,1949
Chairman
May 10,195C
Member
.. ..
August 9,1946
Vice C hairman
May 10,1950
Member
June 29,1950
Member
Septembers, 1952
Chairman
March 19,1953
Member
September 15,1953
Member. .
December 2,1953
Member
May 2,1955
Member
April 4,1955
Chairman
. . . . . December 3,1956
Member
December 3,1956
Member
November 1,1958
Member
May 7,1959
Member
January 29, 1961
Member
January 29,1961
C hairman
January 29,1961
Member
. ..
May 17,1963
September 2,1964
Member
203
Separation date
November 1,1949.
January 20,1953.
February 11,1953.
August 20,1952.
January 20,1953.
December 1,1956.
February 9,1955.
April 29,1955.
October 31,1958.
January 20,1961.
January 31,1959.
January 20,1961.
January 20,1961.
July 31,1962.
December 27,1962.
November 15,1964.
August 31,1964.
February 1,1966.
COUNCIL STAFF
At the end of 1966, members of the Council's professional staff were
Henry J. Aaron, Shirley M. Almon, G. Paul Balabanis, Guy Black, Jack W.
Carlson, Donald E. Cullen, Stanley L. Friedlander, Catherine H. Furlong,
Stephen M. Goldfeld, Frances M. James, David T. Kresge, Wilfred Lewis,
Jr., David W. Lusher, Carey P. Modlin, Jr., Saul Nelson, Alfred Reifman,
Frank W. Schiff, and Charles B. Warden, Jr.
Each year a number of staff members who have joined the Council on a
temporary basis return to their posts in private life or in government. Those
leaving the Council in 1966 were John J. Arena, Stanley W. Black, John
W. Dorsey, Jr., Theodore J. Goering, Susan J. Lepper, Paul W. MacAvoy,
Benjamin A. Okner, Theodore K. Osgood, R. Robert Russell, Martin
Segal, Lewis J. Spellman, and Paul J. Taubman.
Continuing its practice of discussing economic developments and problems with leading members of the economics profession, the Council in 1966
called on the following consultants: W. H. Locke Anderson, G. Leland
Bach, James T. Bonnen, William G. Bowen, William H. Branson, William
M. Capron, Benjamin Chinitz, Gerhard Colm, Richard N. Cooper, Peter P.
Dorner, John T. Dunlop, Otto Eckstein, R. Aaron Gordon, Kermit Gordon, Walter W. Heller, Myron L. Joseph, Carl Kaysen, Stanley Lebergott,
Allen H. Lerman, Harold M. Levinson, John V. Lintner, Jr., Edwin S.
Mills, Richard A. Musgrave, Joseph A. Pechman, Merton J. Peck, Frank C.
Pierson, George L. Perry, Albert E. Rees, Melvin Rothbaum, Paul A.
Samuelson, Robert M. Solow, Daniel B. Suits, Charles A. Taff, Lester D.
Taylor, Lester C. Thurow, James Tobin, and Robert C. Turner.
The Council extended into the winter months its graduate student intern
program, which was started in 1961 and, until 1966, had been carried on
in only the summer months. Graduate students working with the Council
for various periods in 1966 were Arthur J. Alexander, Barry P. Bosworth,
Terrence R. Colvin, Robert J. Flanagan, E. Duncan Moose, Larry B.
Morse, Ralph E. Pochoda, and Kenneth R. Smith.
As in the past, the Council received loyal and energetic assistance from its
nonprofessional staff. Members of this staff at the end of 1966 were
Dorothy Bagovich, Teresa D. Bradburn, Louis P. Brighthaupt, Carrie E.
Bryant, Carol S. Burke, Gladys R. Durkin, Catherine Fibich, Charlotte
Fremon, James W. Gatling, Laura B. Hoffman, Christine L. Johnson,
Constance R. King, Bessie M. Lafakis, Patricia A. Lee, June A. Liverman,
Dorothy L. Reid, Earnestine Reid, Gail Roberts, Bettye T. Siegel, Daisy M.
Sindelar, Nancy F. Skidmore, Roselle Smith, Margaret L. Snyder, Mary
Alice Spriggs, Miriam E. Vincent, and Elizabeth A. Zea.
In 1966, as in earlier years, the Council relied upon the editorial skills
of Miss Dorothy Wescott in preparing the Annual Report.
204
COUNCIL ACTIVITIES
The Council of Economic Advisers was established as an agency of the
Federal Government nearly 21 years ago by the Employment Act of 1946.
Under the Act, the Council is charged with the responsibility of analyzing
and interpreting economic developments and of recommending economic
policies that will promote the goals of "maximum employment, production,
and purchasing power."
The Council's chief responsibility is to keep the President fully informed
of economic developments and emerging problems which may affect the
Nation's economy. To meet this responsibility, the Council continuously
reviews economic conditions, undertakes special studies of particular problem areas, and makes recommendations concerning Government programs
and policies. The Council confers regularly with all major Government
agencies having responsibilities in the economic field.
The Secretary of the Treasury, the Director of the Bureau of the Budget,
and the Chairman of the Council and their respective staffs (the "Troika")
provide the President with a continuous joint assessment of the economic
and budgetary outlook for the current and subsequent fiscal years, and,
where appropriate, analyze the effects of alternative fiscal policies. The
heads of the "Troika" agencies and their associates, together with the Chairman of the Board of Governors of the Federal Reserve System, meet
periodically as the "Quadriad" with the President to discuss domestic and
international monetary problems. Joint staff work among the "Quadriad"
agencies contributed in 1966 to improved coordination of fiscal and monetary policies.
In addition to its regular and informal consultations with other Government agencies, the Council and its staff in 1966 participated with other
agencies in a large variety of more formal committees, task forces, and
studies. Although the results of most of these activities are for use only
within the Government, two studies in which the Council participated were
published in 1966—the reports of the Northeast Desalting Team and of the
Interagency Energy Study. Other projects and studies related to such
diverse problems as environmental pollution, income maintenance, high
energy transmission, cost effectiveness in the Federal Government, economic
impact of disarmament, manpower activities, balance of payments problems,
and the operation of financial institutions.
The Council and its staff represent the United States in a number of
important international conferences. The Council Chairman heads the
U.S. delegation to the meetings of the Economic Policy Committee of the
Organization for Economic Cooperation and Development (OECD), and
members of the Council and its staff this year participated in a dozen or
more other international meetings under the auspices of the OECD. The
Chairman and Mr. Okun were members, respectively, of the U.S. Cabinetlevel delegations which meet annually with similar delegations of the Cana-
205
dian and Japanese governments. The Council also was involved in activities of the UN Economic Commission for Europe.
An important responsibility of the Council is to explain and clarify the
Administration's economic policies, both within the Government and to
the public at large. This is done through numerous speeches, articles,
press briefings, statements, Congressional testimony, its Annual Report, and
by assisting the President in the preparation of his Economic Report. The
Council meets frequently and informally with many visiting scholars, officials of foreign countries, men and women from the press corps, businessmen, labor leaders, State officials, bankers, and interested private citizens,
and more formally with a number of advisory groups, including the President's Advisory Committee on Labor-Management Policy and the Business
Council's Liaison Committee with the Council of Economic Advisers.
The Council prepares two documents for publication. One is the Economic Report of the President, together with the Annual Report of the
Council of Economic Advisers. Over 70,000 copies of the 1966 Report
were distributed to members of the Congress, Government officials, the
press, depository libraries, or sold to the public by the Superintendent of
Documents. The second is the monthly Economic Indicators. This important compilation of current economic statistics has been prepared since
1948 at the Council under the direction of Miss Frances M. James, and is
published by the Joint Economic Committee of the Congress. More than
9,000 copies are furnished to members of Congress, depository libraries, or
sold to the public every month.
206
Appendix B
STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION
207
CONTENTS
National income or expenditure:
B-l. Gross national product or expenditure, 1929-66
B-2. Gross national product or expenditure, in 1958 prices, 1929-66
B-3. Implicit price deflators for gross national product, 1929-66
B-4. Gross national product by major type of product, 1929-66
B-5. Gross national product by major type of product, in 1958 prices,
1929-66
B-6. Gross national product: Receipts and expenditures by major economic
groups, 1929-66
B-7. Gross national product by sector, 1929-66
B-8. Gross national product by sector, in 1958 prices, 1929-66
B-9. Personal consumption expenditures, 1929-66
B-10. Gross private domestic investment, 1929-66
B-l 1. National income by type of income, 1929-66
B-l 2. Relation of gross national product and national income, 1929-66. .. .
B-l 3. Relation of national income and personal income, 1929-66
B-14. Disposition of personal income, 1929-66
B-15. Sources of personal income, 1929-66
B-l 6. Total and per capita disposable personal income and personal consumption expenditures, in current and 1958 prices, 1929-66
B-l 7. Number and money income of families and unrelated individuals,
1947-65
B-18. Sources and uses of gross saving, 1929-66
Population, employment, wages, and productivity:
B-l9. Population by age groups: Estimates, 1929-66, and projections,
1970-85
B-20. Noninstitutional population and the labor force, 1929-66
B—21. Civilian employment and unemployment, by sex and age, 1947—66. . .
B-22. Selected unemployment rates, 1948-66
B-23. Unemployment by duration, 1947-66
B-24. Unemployment insurance programs, selected data, 1940-66
B-25. Number of wage and salary workers in nonagricultural establishments,
1929-66
B-26. Average weekly hours of work in selected industries, 1929-66
B-27. Average gross hourly earnings in selected industries, 1929-66
B-28. Average gross weekly earnings in selected industries, 1929-66
B-29. Average weekly hours and hourly earnings, gross and excluding overtime, in manufacturing industries, 1939-66
B-30. Average weekly earnings, gross and spendable, in manufacturing
industries, in current and 1957-59 prices, 1939-66
B-31. Indexes of output per man-hour and related data, private economy,
1947-66
209
Page
213
214
216
218
219
220
222
223
224
225
226
227
228
229
230
232
233
234
235
236
238
239
240
241
242
244
245
246
247
248
249
Production and business activity:
B-32. Industrial production indexes, major industry divisions, 1929-66. . . .
B-33. Industrial production indexes, market groupings, 1947-66
B-34. Industrial production indexes, selected manufactures, 1947-66
B-35. Manufacturing capacity, output, and utilization rate, 1948-66
B-36. New construction activity, 1929-66
B-37. New housing starts and applications for financing, 1929-66
B-38. Business expenditures for new plant and equipment, 1939 and 194567
B-39. Sales and inventories in manufacturing and trade, 1947-66
R-40. Manufacturers' shipments and inventories, 1947-66
B-41. Manufacturers' new and unfilled orders, 1947-66
Prices:
B-42.
B-43.
B-44.
B-45.
Consumer
Consumer
Wholesale
Wholesale
price
price
price
price
indexes, by major groups, 1929-66
indexes, by special groups, 1935-66
indexes, by major commodity groups, 1929-66
indexes, by stage of processing, 1947-66
Money supply, credit, and finance:
B-46. Money supply, 1947-66
,
B-47. Selected liquid assets held by the public, 1946-66
B-48. Financial saving by individuals, 1939-66
B-49. Bank loans and investments, 1929-66
B-50. Bond yields and interest rates, 1929-66
B-51. Federal Reserve Bank credit and member bank reserves, 1929-66
B-52. Short- and intermediate-term consumer credit outstanding, 1929-66..
B-53. Instalment credit extended and repaid, 1946-66
B-54. Mortgage debt outstanding, by type of property and of financing,
1939-66
B-55. Net public and private debt, 1929-66
Government finance:
B-56. U.S. Government debt, by kind of obligation, 1929-66
B-57. Estimated ownership of U.S. Government obligations, 1939-66
B-58. Average length and maturity distribution of marketable interest-bearing public debt, 1946-66
B-59. Federal administrative budget receipts by source and expenditures by
function, fiscal years 1939-68
B^60. Federal administrative budget receipts and expenditures and the
public debt, 1929-68
B-61. Government cash receipts from and payments to the public, 1946-68..
B-62. Government receipts and expenditures in the national income and
product accounts, 1929-66
B-63. Federal Government receipts and expenditures in the national income
and product accounts, 1946-68
B-64. Relation of three measures of Federal Government receipts and expenditures, fiscal years 1964-68
B-65. State and local government revenues and expenditures, selected fiscal
years, 1927-65
210
Page
250
251
252
253
254
256
258
259
260
261
262
263
264
266
268
269
270
271
272
274
275
276
277
278
279
280
281
282
284
285
286
287
288
289
Corporate profits and
finance:
B-66. Profits before and after taxes, all private corporations, 1929-66
B-67. Sales, profits, and stockholders' equity, all manufacturing corporations (except newspapers), 1947-66
B-68. Relation of profits after taxes to stockholders' equity and to sales,
all manufacturing corporations (except newspapers), by industry
group, 1947-66
B-69. Sources and uses of funds, nonfarm nonfinancial corporate business,
1955-66
B-70. Current assets and liabilities of United States corporations, 1939-66. .
B-71. State and municipal and corporate securities offered, 1934-66
B-72. Common stock prices, earnings, and yields, and stock market credit,
1939-66
B-73. Business formation and business failures, 1929-66
Page
290
Agriculture:
B-74. Income from agriculture, 1929-66
B-75. Farm production indexes, 1929-66
B-76. Farm population, employment, and productivity, 1929-66
B-77. Indexes of prices received and prices paid by farmers, and parity ratio,
1929-66
B-78. Selected measures of farm resources and inputs, 1929-66
B^-79. Comparative balance sheet of agriculture, 1929-67.
International statistics:
B-80. United States balance of payments, 1947-66
B-81. United States merchandise exports and imports, by commodity groups,
1958-66
B**82. United States merchandise exports and imports, by area, 1960-66. . .
fr-83. United States foreign assistance, by type and area,fiscalyears 1946-^66.
B-84. International reserves, 1949, 1953, and 1961-66
B-85. United States gold stock and holdings of convertible foreign currencies
by U.S. monetary authorities, 1946-66
B-86. Price changes in international trade, 1958-66
B-87. Consumer price indexes in the United States and other major industrial countries, 1960-66
General Notes
Detail in these tables will not necessarily add to totals because of rounding.
Data for Alaska and Hawaii are not included unless specifically noted.
Unless otherwise noted, all dollarfiguresare in current prices.
Symbols used:
* Preliminary.
.. Not available (also, not applicable).
* Amount insignificant in terms of the particular unit (e.g., less than
$50 million where unit is billions of dollars).
211
291
292
294
295
296
297
298
299
300
301
302
304
305
306
308
309
310
311
312
313
314
NATIONAL INCOME OR EXPENDITURE
TABLE B-l.—Gross national product or expenditure, 7929-66
[Billions of dollars]
PerGross
Net
sonal
private exports
Total
condoof
goods
gross
and
national sump- mestic
investservproduct expend2
ices 3
itures l ment
Year or quarter
Governrnent purehases of goods and services
Federal *
Total
Total
National5
defense
Other
State
and
local
1929
103.1
77.2
16.2
1.1
8.5
1.3
1.3
7.2
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
90.4
75.8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
69.9
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
10.3
1.0
9.2
1.4
5.6
1.0
1.4
3.3
6.4
8.5
9.2
8.1
8.0
9.8
7.8
6.5
9.3
.5
.4
.4
.6
.1
.1
.3
1.3
1.1
1.5
1.5
2.0
3.0
2.9
4.9
4.7
5.4
5.1
1.4
1.5
1.5
2.0
3.0
2.9
4.9
4.7
5.4
1.2
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
13.1
17.9
1.7
1.3
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
-2.0
-1.8
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.8
60.9
75.3
503.7
520.1
560.3
590.5
631.7
681.2
739.5
325.2
335.2
355.1
375.0
401.4
431.5
465.0
74.8
71.7
83.0
87.1
93.0
106.6
116.5
._
.-
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
..
..
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
.
-.
.
...
-.
--.
1960
1961
1962—
1963
1964
1965
1966 *»
.
_.
11.8
10.0
12.0
11.9
13.0
13.3
3.9
7.7
6.6
6.0
6.8
7.1
7.0
7.2
7.6
8.2
14.0
24.8
59.6
88.6
96.5
82.3
27.0
25.1
31.6
37.8
6.0
2.2
16.9
51.9
81.1
89.0
74.2
17.2
12.5
16.5
20.1
13.8
49.4
79.7
87.4
73.5
14.7
3.7
2.2
.4
1.8
2.0
4.0
5.7
2.2
.1
37.9
59.1
74.7
81.6
74.8
74.2
78.6
86.1
94.2
97.0
18.4
37.7
51.8
57.0
47.4
44.1
45.6
49.5
53.6
53.7
14.1
33.6
45.9
48.7
41.2
38.6
40.3
44.2
45.9
46.0
4.1
5.9
8.4
6.2
5.5
5.3
5.3
7.7
7.6
4.0
5.6
5.1
5.9
8.5
7.0
4.9
99.6
107.6
117.1
122.5
128.9
136.2
153.1
53.5
57.4
63.4
64.2
65.2
66.8
77.0
44.9
47.8
51.6
50.8
50.0
50.1
60.0
11.8
13.5
15.2
16.7
17.0
46.1
50.2
53.7
58.2
63.7
69.4
76.2
-.6
7.5
11.5
6.4
6.1
1.8
9.1
10.7
13.3
3.8
3.1
2.5
1.4
1.6
.7
2.5
3.5
5.8
6.8
4.3
8.6
9.6
8.0
7.9
7.7
7.4
7.5
8.1
9.8
12.6
15.0
17.7
19.5
21.5
22.9
24.6
27.4
30.1
33.0
36.6
40.6
43.3
Seasonally adjusted annual rates
1964: I
II
III
_.
IV
1965: I
II.
Ill
IV
1966: I
II
III.
IV P
.
_.
616.8
627.7
637.9
644.2
391.1
398.0
407.5
408.8
90.2
91.8
92.5
97.4
660.8
672.9
686.5
704.4
418.9
426.8
435.0
445.2
103.8
103.7
106.7
111.9
721.2
732.3
745.3
759.1
455.6
460.1
469.9
474.4
114.5
118.5
115.0
118.0
9.0
7.9
126.5
130.1
129.5
129.4
64.9
66.6
65.1
64.1
50.1
51.6
49.8
48.5
14.8
15.1
15.3
15.6
61.6
63.4
64.4
65.3
7.1
6.1
131.6
134.3
137.7
141.2
64.4
65.6
67.5
69.8
48.2
49.1
50.7
52.5
16.2
16.5
16.8
17.3
67.3
68.7
70.2
71.4
6.0
4.7
4.2
4.8
145.0
149.0
156.2
161.9
71.9
74.0
79.0
82.5
54.6
57.1
62.0
65.5
17.4
16.9
17.0
17.0
73.1
75.0
77.2
79.4
8.4
8.6
6.4
8.2
1 See Table B-9 for major components.
See Table B-10 for further detail and explanation of components.
See Table B-6 for exports and imports separately.
Net of Government sales.
This category corresponds closely to the national defense classification in the Budget of the United States
2
3
4
5
Government for the Fiscal Year ending June SO, 1968.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
213
TABLE B-2.—Gross national product or expenditure, in 1958 prices, 1929-66
[Billions of dollars, 1958 prices]
Personal consumption
expenditures
Year or
quarter
Total
gross
naDurational
ble
prod- Total
goods
uct
Gross private domestic investment
Fixed investment
Nonresidential
Nondurable
goods
Serv- Total
ices
Total
Change
busiResi- inness
Prodential invenducers'
strucTotal Structories
tures durable
tures
equipment
1929
203.6
139.6
16.3
69.3
54.0
40.4
36.9
26.5
13.9
12.6
10.4
3.5
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
183.5
169.3
144.2
141.5
154.3
169.5
193.0
203.2
192.9
209.4
130.4
126.1
114.8
112.8
118.1
125.5
138.4
143.1
140.2
148.2
12.9
11.2
65.9
65.6
60.4
58.6
62.5
65.9
73.4
76.0
77.1
81.2
51.5
49.4
45.9
46.0
46.1
47.9
50.5
52.0
50.9
52.5
27.4
16.8
28.0
19.2
10.9
21.7
14.1
11.8
12.1
15.6
20.9
24.5
19.4
23.5
11.5
15.8
18.8
13.7
15.3
6.3
5.1
2.7
2.1
2.9
4.0
5.1
5.6
5.7
8.2
-.6
18.0
24.0
29.9
17.0
24.7
9.9
6.6
3.8
4.3
5.6
7.5
1940
1941
1942
1943
1044
1945
1946
1947
19481949
227.2
263.7
297.8
337.1
361.3
355.2
312.6
309.9
323.7
324.1
155.7
165.4
161.4
165.8
171.4
183.0
203.5
206.3
210.8
216.5
16.7
19.1
11.7
10.2
10.6
20.5
24.7
26.3
28.4
84.6
89.9
91.3
93.7
97.3
104.7
110.8
108.3
108.7
110.5
54.4
56.3
58.5
61.8
64.7
67.7
72.1
73.4
75.8
77.6
33.0
41.6
21.4
12.7
14.0
19.6
52.3
51.5
60.4
48.0
28.1
32.0
17.3
12.9
15.9
22.6
42.3
51.7
55.9
51.9
18.9
22.2
12.5
10.0
13.4
19.8
30.2
36.2
38.0
34.5
12.5
11.6
12.3
11.9
14.1
17.7
24.6
25.7
22.6
12.1
15.4
17.9
17.4
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
355.3
383.4
395.1
412.8
407.0
438.0
446.1
452.5
447.3
475.9
230.5
232.8
239.4
250.8
255.7
274.2
281.4
288.2
290.1
307.3
34.7
31.5
30.8
35.3
35.4
43.2
41.0
41.5
37.9
43.7
114.0
116.5
120.8
124.4
125.5
131.7
136.2
138.7
140.2
146.8
81.8
84.8
87.8
91.1
94.8
99.3
104.1
108.0
112.0
116.8
69.3
70.0
60.5
61.2
59.4
75.4
74.3
68.8
60.9
73.6
61.0
59.0
57.2
60.2
61.4
69.0
69.5
67.6
62.4
68.8
37.5
39.6
38.3
40.7
39.6
43.9
47.3
47.4
41.6
44.1
12.7
14.1
13.7
14.9
15.2
16.2
18.5
18.2
16.6
16.2
24.8
25.5
24.6
25.8
24.5
27.7
28.8
29.1
25.0
27.9
23.5
19.5
18.9
19.6
21.7
25.1
22.2
20.2
20.8
24.7
1960
1961
1962
1963
1964
19651966 v
487.7
497.2
529.8
551.0
580.0
614.4
647.7
316.1
322.5
338.4
353.3
373.8
396.2
415.5
44.9
43.9
49.2
53.7
59.1
66.4
70.8
149.6
153.0
158.2
162.2
170.5
178.2
185.9
121.6 72.4
125.6 69.0
131.1 79.4
137.4 82.5
144.2 86.5
151.6 97.8
158.7 104.3
68.9
67.0
73.4
76.7
81.9
89.0
93.7
47.1
45.5
49.7
51.9
57.4
64.9
72.2
17.4
17.4
17.9
17.9
18.9
21.7
23.5
29.6
28.1
31.7
34.0
38.5
43.2
48.7
21.9
21.6
23.8
24.8
24.6
24.1
21.5
10.6
8.4
8.3
9.4
11.7
14.5
15.1
12.2
14.5
9.4
4.7
5.3
9.4
9.7
8.2
7.6
9.2
7.5
4.4
3.3
3.6
4.0
5.4
7.1
5.6
5.9
6.8
8.1
4.6
2.9
3.8
5.7
10.3
11.8
8.1
9.4
12.1
14.2
7.9
7.2
9.6
9.2
9.8
4.9
2.9
2.5
2.8
-2.4
-6.2
-4.3
-2.7
2.4
3.1
5.5
-2.4
1.2
4.9
9.6
4.0
-.2
-1.9
-2.9
10.0
-.2
4.6
-3.9
8.3
10.9
3.3
.9
-2.0
6.4
4.8
1.2
-1.5
4.8
3.5
2.0
6.0
5.8
4.6
8.8
Seasonally adjusted annual rates
569.7
I I — 578.1
III— 585.0
IV... 587.2
365.7
371.0
379.5
378.9
57.2
59.5
60.9
58.8
167.2
168.4
173.3
173.1
141.2
143.1
145.3
146.9
84.6
85.6
85.7
90.2
81.2
81.6
82.2
82.8
55.5
56.6
58.2
59.2
18.7
18.9
18.7
19.2
36.7
37.7
39.5
40.0
25.7
24.9
24.1
23.6
3.5
4.0
3.5
7.4
1965: I
II—
III...
IV...
600.3
607.8
618.2
631.2
387.1
392.2
398.9
406.5
64.8
64.2
67.2
69.2
174.2
177.6
178.5
182.5
148.1 95.9
150.4 95.3
153.1 97.9
154.8 102.2
86.6
88.0
89.4
91.9
62.3
63.4
65.5
68.4
20.7
21.7
21.3
23.2
41.5
41.7
44.2
45.2
24.4
24.5
23.9
23.5
9.3
7.3
8.5
10.2
1966: I
II—
III—
IV P..
640.5
643.5
649.9
657.0
412.8
412.2
418.3
418.5
72.2
68.5
71.6
71.2
184.1
185.8
187.1
186.5
156.5
157.9
159.6
160.9
103.5
106.3
102.5
105.0
95.0
94.7
93.5
91.7
70.8
71.3
73.0
73.8
24.3
23.6
23.2
23.0
46.4
47.7
49.8
50.8
24.3
23.4
20.5
17.9
8.5
11.6
9.1
13.2
1964: I
See footnote at end of table.
214
TABLE B-2.—Gross national product or expenditure, in 1958 prices, 1929-66—Continued
[Billions of dollars, 1958 prices]
Net exports of goods and services
Year or quarter
Net
exports
Exports
Imports
Government purchases of goods and
services
Total
Federal i
State and
local
1929
1.5
11.8
10.3
22.0
3.5
18.5
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1.4
.9
.6
.3
-1.0
-1.2
-.7
1.9
1.3
10.4
8.9
7.1
7.1
7.3
7.7
8.2
9.8
9.9
10.0
9.0
7.9
6.6
7.1
7.1
8.7
9.3
10.5
8.0
8.7
24.3
25.4
24.2
23.3
26.6
27.0
31.8
30.8
33.9
35.2
4.0
4.3
4.6
6.0
8.0
7.9
12.2
11.5
13.3
12.5
20.2
21.1
19.6
17.3
18.6
19.2
19.6
19.4
20.6
22.7
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
2.1
.4
-2.1
-5.9
-5.8
-3.8
8.4
12.3
6.1
6.4
11.0
11.2
7.8
6.8
7.6
10.2
19.6
22.6
18.1
18.1
8.9
10.8
9.9
12.6
13.4
13.9
11.2
10.3
12.0
11.7
36.4
56.3
117.1
164.4
181.7
156.4
48.4
39.9
46.3
53.3
15.0
36.2
98.9
147.8
165.4
139.7
30.1
19.1
23.7
27.6
21.4
20.1
18.3
16.6
16.3
16.7
18.4
20.8
22.7
25.7
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
2.7
5.3
3.0
1.1
3.0
3.2
5.0
6.2
2.2
.3
16.3
19.3
18.2
17.8
18.8
20.9
24.2
26.2
23.1
23.8
13.6
14.1
15.2
16.7
15.8
17.7
19.1
19.9
20.9
23.5
52.8
75.4
92.1
99.8
88.9
85.2
85.3
89.3
94.2
94.7
25.3
47.4
63.8
70.0
56.8
50.7
49.7
51.7
53.6
52.5
27.5
27.9
28.4
29.7
32.1
34.4
35.6
37.6
40.6
42.2
4.3
5.1
4.5
5.6
8.5
6.3
4.8
27.3
28.0
30.0
32.1
36.4
37.3
41.3
23.0
22.9
25.5
26.6
28.0
31.0
36.4
94.9
100.5
107.5
109.6
111.3
114.1
123.2
51.4
54.6
60.0
59.5
57.8
57.8
64.1
43.5
45.9
47.5
50.1
53.4
56.3
59.1
_
. _
—
-..
. .
1960
1961
1962
1963
1964
1965
1966*
Seasonally adjusted annual rates
1964: I
II
III
IV
9.2
8.2
8.4
8.0
36.1
35.7
36.7
37.1
26.9
27.5
28.3
29.0
110.3
113.3
111.3
110.1
58.2
59.7
57.4
56.1
52.0
53.6
53.9
54.0
1965: I . .
II
III
IV
5.7
7.1
6.4
6.0
33.4
38.7
38.4
38.7-
27.7
31.6
31.9
32.8
111.5
113.2
115.0
116.6
56.2
57.3
58.3
59.3
55.3
55.9
56.7
57.3
5.9
4.6
4.2
4.7
40.1
40.3
41.8
42.9
34.2
35.8
37.6
38.2
118.3
120.4
124.9
128.8
60.4
61.9
65.5
68.2
57.9
58.5
59.4
60.6
1966: I
II
.
III
IV P
_
._
1
Net of Government sales.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
215
TABLE B-3.—Implicit price deflators for gross national product, 1929-66
llndex numbers, 1958=100]
Gross private domestic investment *
Personal consumption
expenditures
Total
gross
ational
product 1
Total
Year or quarter
Fixed investment
Nonresidential
DurNonable durable
goods goods
Services
Total
Total
ResiProducers' dential
Struc- durable
structures equip- tures
ment
1929
50.6
55.3
56.4
54.5
56.1
39.4
39.9
35.7
44.6
38.1
1930
1931
1932 . .
1933
1934
1935 . .
1936
1937
1938 „
1939
49.3
44.8
40.2
39.3
42.2
42.6
42.7
44.5
43.9
43.2
53.6
47.9
42.3
40.6
43.5
44.4
44.7
46.5
45.-6
45.1
55.3
49.1
43.2
41.9
44.7
43.7
43.6
45.8
46.7
46.0
51.6
44.1
37.7
38.0
42.7
44.5
44.8
46.4
44.0
43.2
55.7
52.7
48.3
43.6
44.3
44.4
45.0
46.8
47.7
47.7
37.9
35.2
31.6
30.6
33.7
34.3
34.6
37.8
38.2
37.7
38.1
35.8
32.9
31.6
34.9
35.9
35.6
38.8
39.3
38.7
34.0
31.1
27.6
27.9
28.9
30.6
30.2
34.4
33.9
33.1
43.0
41.1
39.1
34.5
38.8
38.7
38.5
41.4
43.0
42.2
37.1
33.6
27.3
27.1
30.1
29.8
31.3
34.3
35.5
35.7
43.9
47.2
53.0
56.8
58.2
59.7
66.7
74.6
79.6
79.1
45.5
48.7
54.8
59.9
63.2
65.4
70.5
77.9
82.3
81.7
46.5
50.4
59.3
64.2
71.5
75.9
76.8
82.7
86.3
86.8
43.8
47.7
55.6
62.5
66.2
68.7
74.3
83.6
88.5
85.6
47.9
49.8
52.7
55.3
57.5
58.7
62.7
67.9
72.1
74.3
39.0
42.0
46.5
49.3
51.1
51.5
58.5
66.7
73.9
74.7
40.0
42.7
47.8
49.9
51.0
51.0
56.3
64.5
70.7
72.8
33.9
36.4
41.3
46.8
48.6
49.2
54.4
64.4
71.5
71.2
43.4
46.3
51.5
51.1
51.9
51.7
57.5
64.6
70.3
73.6
36.9
40.3
43.3
47.0
51.6
54.9
59.7
71.7
80.8
78.5
80.2
85.6
87.5
88.3
89.6
90.9
94.0
97.5
100.0
101.6
82.9
88.6
90.5
91.7
92.5
92.8
94.8
97.7
100.0
101.3
87.8
94.2
95.4
94.3
92.9
91.9
94.9
98.4
100.0
101.4
86.0
93.3
94.3
93.9
94.2
93.6
94.9
97.7
100.0
99.9
76.3
80.0
83.6
87.7
90.0
92.0
94.6
97.3
100.0
103.0
77.5
83.1
85.3
86.6
86.8
89.0
94.0
98.5
100.0
102.6
74.4
80.4
82.6
84.0
84.8
86.7
92.4
97.9
100.0
102.2
72.9
79.3
83.2
84.9
86.0
88.1
93.4
98.6
100.0
102.7
75.2
80.9
82.2
83.5
84.0
85.9
91.8
97.5
100.0
102.0
82.5
88.6
90.8
91.9
90.4
92.9
97.4
99.8
100.0
103.1
103.3
104.6
105.8
107.2
108.9
110.9
114.2
102.9
103.9
104.9
106.1
107.4
108.9
111.9
100.9
100.6
100.8
100.4
100.4
99.5
98.0
101.2
101.9
102.8
104.0
104.9
107.0
110. d
105.8
107.6
109.0
110.9
113.2
115.3
119.4
103.4
103.9
104.9
106.0
107.8
109.6
112.1
102.9
103.4
104.1
104.5
105.8
107.4
109.8
104.0
105.6
107.1
108.9
111.3
114.4
118.8
102.2
102.1
102.3
102.3
103.1
103.8
105.5
104.5
105.0
106.7
108.9
112.3
115.5
120.0
108.3
108.6
109.1
109.7
107.0
107.3
107.4
107.9
100.6
100.5
100.3
100.1
104.6
104.8
104.9
105.4
112.3
112.9
113.3
114.0
106.7
107.4
108.1
108.7
104.8
105.5
106.1
106.9
108.4
110.6
112.6
113.6
103.0
102.9
103.0
103.6
110.9
111.9
113.0
113.4
110.1
110.7
111.0
111.6
108.2
108.8
109.0
109.5
100.5
100.2
99.2
98.4
106.0
106.7
107.2
107.9
114.3
115.0
115.5
116.4
109.0
109.2
109.6
110.4
107.1
107.1
107.2
108.0
113.7
113.6
114.6
115.5
103.8
103.8
103.6
104.1
113.8
114.5
116.4
117.3
112.6
113.8
114.7
115.6
110.4
111.8
112.3
113.4
97.5
98.0
98.2
98.6
109.6
110.7
111.2
111.9
117.2
118.7
120.0
121.6
111.1
112.1
112.5
112.9
108.8
109.7
110.0
110.7
117.1
118.3
119.4
120.4
104.5
105.4
105.6
106.3
117.7
119.6
121.3
122.2
_
-
1940 .
1941
1942
1943 . .
1944
1945
1946
1947 . _
1948
1949
.
.
1950
1951
1952...
1953
1954
1955 1956
1957
1968
1959
1960 1961
1962 .-1963
1964 .
1965
1966*.
1964: I
II
Ill
IV
1965: I
II
III
IV....
-
--
. .
._
.-
1966: I
II
III
IV*
See footnotes at end of table.
2l6
TABLE B-3.—Implicit price deflators for gross national product, 1929-66—Continued
[Index numbers, 1958=100]
Exports and imports1 of
goods and services
Government purchases of goods
and services
Gross national product
by sectors
Year or quarter
Exports
Imports
Total
Federal
State and
local
General
Private 2 government
1929
59.5
57.3
38.6
36.0
39.1
51.7
34.1
1930
1931
1932
1933
1934
1935
1936
1937
1938.
1939
52.3
41.0
34.7
33.7
40.6
42.3
43.4
46.5
43.8
44.1
49.0
39.3
31.5
28.8
33.6
36.0
36.7
40.7
37.9
38.6
37.9
36.3
33.4
34.5
36.8
37.0
37.6
38.4
38.3
37.9
34.1
34.5
31.9
33.1
37.4
37.0
40.5
40.7
40.5
40.8
38.7
36.6
33.8
35.0
36.6
37.0
35.9
37.1
36.8
36.3
50.4
45.7
40.9
39.9
43.0
43.5
43.4
45.3
44.6
43.9
34.1
34.5
33.7
33.5
34.8
34.7
36.5
36.5
37.4
36.8
48.6
53.0
61.5
65.2
69.9
71.3
75.4
87.3
92.7
87.0
40.8
43.0
48.3
51.2
53.2
56.4
64.9
79.4
86.4
82.2
38.5
44.0
50.9
53.9
53.1
52.6
55.8
62.9
68.1
71.0
40.2
46.6
52.5
54.9
53.8
53.1
57.3
65.6
69.8
73.0
37.3
39.2
42.3
44.6
46.1
48.6
53.2
60.4
66.4
68.9
44.7
48.7
55.5
60.9
62.0
62.6
68.2
76.3
81.4
80.6
36.0
34.7
37.3
39.7
43.3
48.3
55.4
58.5
60.8
64.7
1950
1961
1952
1953
1954
1955
1956
1957
1958
1959
84.9
97.0
98.8
95.2
94.3
94.9
97.5
101.3
100.0
98.8
88.7
107.2
103.6
99.1
100.8
100.6
102.5
104.0
100.0
99.3
71.8
78.5
81.0
81.8
84.1
87.1
92.1
96.4
100.0
102.4
72.9
79.4
81.2
81.4
83.5
86.9
91.7
95.8
100.0
102.2
70.8
76.9
80.6
82.8
85.3
87.5
92.7
97.3
100.0
102.6
81.4
87.4
89.0
89.6
90.8
91.6
94.5
97.9
100.0
101.4
67.1
70.5
74.4
76.6
79.5
84.0
88.7
93.3
100.0
104.2
1960
1961
1962
1963
1964
1965
1966 9
99.9
101.9
100.8
100.6
101.5
104.5
103.9
101.0
100.1
98.5
99.5
101.9
103.3
104.2
105.0
107.1
109.0
111.8
115.8
119.4
124.3
104.2
105.2
105.6
108.0
112.7
115.7
120.1
105.9
109.4
113.2
116.3
119.3
123.2
128.9
102.8
103.7
104.7
105.8
107.1
108.9
111.7
108.6
113.6
116.6
121.5
128.1
133.3
140.7
1964: I
11
Ill
IV
101.0
100.7
101.4
102.9
101.9
102.2
101.6
101.8
114.7
114.8
116.3
117.5
111.4
111.6
113.4
114.3
118.4
118.3
119.5
120.8
106.6
106.9
107.2
107.8
126.5
127.1
128.7
130.1
1965: I
11
III
IV
106.0
104.7
104.5
103.9
103.5
102.2
103.4
104.2
118.0
118.7
119.7
121.1
114.4
114.6
115.8
117.8
121.6
122.8
123.7
124.6
108.2
108.8
109.0
109.4
131.0
131.8
133.7
136.5
1966: I
11
III
IV *
103.9
103.9
103.9
103.9
104.2
104.2
104.2
104.2
122.6
123.7
125.0
125.8
119.1
119.6
120.5
121.0
126.3
128.0
129.9
131.1
110.3
111.5
112.2
113.0
138.6
139.3
141.6
143.2
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
.
_ .
. .
-..
-
—_
_
-_
1 Separate deflators are not available for total gross private domestic investment, change in business
inventories, and net exports of goods and services.
2 Gross national product less compensation of general government employees. See also Tables B-7 and
B-8.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
217
TABLE B-4.—Gross national product by major type of product, 1929-66
[Billions of dollars]
Goods output
Year or
quarter
Total
Total
gross
na- Final Inventory
tional
change
prodTotal Final
uct
goods
Durable goods
Nondurable goods
Serv- Strucices tures
Total Final
sales
|l
Total Final
38.2
0.3
1.7
56.1
54.3
1.7
17.5
16.1
1.4
35.6
11.4
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
90.4
75.8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
90.7
77.0
60.
57.2
65.8
71.
81.2
87.9
85.6
90.1
-.4
-1.1
-2.5
-1.6
-.7
1.1
47.3
38.6
29.2
28.6
35.1
38.8
44.5
48.9
46.
48.6
-.4
-1.1
-2.5
-rl.6
—. 7
1.1
1.3
2.5
— 9
A
11.4
7.7
3.6
4.9
7.4
9.3
12.2
13.9
9.9
12.
12.5
9.0
5.7
5.4
7.3
8.9
11.
13.1
10.8
12.4
-1.0
-1
-2.0
— 5
.1
-.9
.4
46.9
37.4
26.7
27.0
34.4
39.9
45.8
51.5
45.3
49.0
34.8
.1
29.6
23.6 — 4
23.2 -1.1
27.8 - . 9
29.9
33.3
35.8 1.8
35.4
36.2
34.
31.
27.5
25.
27.1
28.3
31.0
32.
33.2
34.0
9.2
6.7
3.8
2.9
3.
4.0
5.6
6.7
6.2
7.5
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
99.7
124.
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
97.5
120.1
156.:
192.
211.1
213.0
202.1
231.8
252.9
259.6
2.
4.5
1.8
-.6
-1.0
-1.0
6.4
-.5
4.7
-3.1
56.0
72.5
93.6
120.4
132.3
128.9
124.9
139.7
154.2
147.5
53.8
68.0
91.9
121.0
133.3
129.9
118.5
140.1
149.4
150.5
2.2
4.5
1.8
-.6
-1.0
-1.0
6.
—.5
4.7
-3.1
16.6
26.8
35.5
54.2
57.9
48.9
36.9
46.0
48.
47.8
15.4 1.2 39.3 38.4 1.0
23.8 3.0 45.6 44.2 1.4
34.5 1.0 58.1 57.4
54.2
66.2 66.8 - . 6
58.5 —.6 74.
74.8
50.2 - 1 . 3 80.0 79.7
31.6 5.3 88.0 86.9 1.1
44.3 1.7 93.7 95.9 -2.2
48.0
105.5 101.5 4.0
49.9
100.6 -1.0
35.4
40.3
50.3
62.5
71.8
76.5
68.0
70.2
75.7
80.8
8.3
11.8
14.0
8.7
6.1
6.5
15.6
21.
27.7
28.3
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
284.8
328.4
345.5
364.6
364.8
398.0
419.
441.1
447.3
483.
278.0
318.1
342.4
364.1
366.
392.0
414.5
439.8
448.8
478.9
6.8 162.4 155.6 6.8
10.3 189.7 179.4 10.3
3.1 195.6 192.5 3.1
204.1 203.7
197.1 198.6
6.0
6.0 216.4 210.
4.7 225.4 220.7 4.7
1.3 234.6 233.3 1.
- 1 . 5 230.8 232. - 1 . 5
4.8 249.1 244.4 4.8
73.
74.6
79.
72.1
85.7
90.3
94.4
83.6
95.6
56.3 4.1 102.0 99.3
66.8 6.9 116.0 112.6
73.5 1.1 121.0 119.1
78.5
.9 124.8 125.2
74.6 -2.5 125.0 124.1
82.7 3.0 130.7 127.7
87.5 2.8 135.1 133.2
93.1 1.3 140.2 140.2
86.4 - 2 . 8 147.2 145.9
2.3 153.6 151.1
87.0
3.4 101.2
2.0 110.8
118.8
123.5
2.9 132.6
1.9 142.3
154.2
1.3 163.4
176.2
35.
37.5
39.1
41.7
44.2
49.0
51.5
52.3
53.1
58.3
1960
1961
1962
1963
1964
1965
1966*
503.
520.1
560.
590.5
631.
681.
739.5
500.2
518.1
554.3
584.6
627.0
672.1
728.1
158.6
163.7
172.2
179.4
191.3
203. 5
219.5
1.5
2.1
3.2
3.1
1.
2.
2.
187.
199.5
213.3
226.2
244.5
262.0
56.8
58.3
62.6
65.7
68.9
74.5
76.
187.5
189.0
193.8
195.0
1.2
.5
.8
2.9
237.3
242.7
247.1
251.1
68.8
69.4
68.5
68.8
7.4 198.7 196.6
6.4 203.6 202.4
6.7 206.5 204.4
4.7 216.2 210.5
2.1
1.2
2.1
5.7
254.3
259.8
265.1
268.8
72.7
74.3
73.9
76.9
5.8 218.4 215.2
12.3 371.6 359.3 12.3 149.6 140.6 9.0 222.0 218.7
9.9 379.6 369.7 9.9 158.1 148.7 9.5 221.4 221.0
14.4 389.3 374.9 14.4 164.0 152.1 11.9 225.3 222.8
3.1
3.3
.5
2.4
275.5
282.1
289.9
297.0
79.8
78.6
75.8
72.9
1929
103.1 101.4
1.3
2.5
3.6
2.0
6.0
5.9
4.7
9.1
11.
259.6
262.3
284.5
298.6
318.
344.7
376.7
256.0 3.6
260.2 2.0
278.5 6.
292.7 5.9
313.6 4.7
335.7 9.1
365. 11.
99.5
96.5
109.0
116.1
125.5
138.5
154.9
!9
.8
-.9
.3
97.4
96.6
106.
113.3
122.2
132.2
145.9
35.5
29.7
23.1
22.1
27.0
30.6
33.6
37.6
35.4
36.3
2.1 160.1
165.8
2.'8 175.5
2.8 182.5
3.3 192.7
6.3 206.3
9.1 221.8
Seasonally adjusted annual rates
1964: I —
II—
III.
IV-
616.8
627.7
637.9
644.2
613.3
623.5
634.4
636.8
1965: I — 660.8 651.4
II- 672.9 665.3
III.. 686.5 677.8
IV.. 704.4 694.0
1966: I —
IIIII.
IV*
721.2
732.3
745.3
759.1
712.3
720.0
735.4
744.7
3.5
4.2
3.6
7.4
310.7
315.6
322.4
324.3
307.1
311.4
318.8
316.9
9.5 333.8 324.3
7.6 338.8 331.2
8.7 347.5 338.8
3.5
4.2
3.6
7.4
121.9
126.1
127.8
126.4
119.6
122.4
125.0
122.0
9.5 135.1 127.7
7.6 135.2 128.8
8.7 141.0 134.3
10.4 358.8 348.4 10.4 142.6 137.9
8.9 366.0 357.0
2.3
3.6
2.8
4.4
8.9 147.6 141.8
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
218
188.8
189.6
194.6
197.9
TABLE B-5.—Gross national product by major type of product, in 1958 prices, 1929-66
[Billions of dollars, 1958 prices]
Goods output
otal
gross
'inal
naional sales
?roduct
Year
or
quarter
Durable goods
Total
Total Final
goods sales
3.5 103.9 100.4
Total Final
sales
3.5
30.9
Nondurable
goods
Total Final
sales
2.7
1929..
203.6 200.1
1930..
1931..
1932.
1933.
1934.
1935.
1936.
1937.
1938.
183.5
169.3
144.2
141.5
154.3
169.5
193.0
203.2
192.9
209.4
184.1
171.7
150.5
145.9
157.0
167.1
-.6
-2.4
-6.2
-4.3
-2.7
2.4
3.1
197.8 5.5
195.3 -2.4
208.2 1.2
90.5 91.1 - . 6
83.2 85.7 - 2 . 4
68.7 74.9 - 6 . 2
68.8 73.2 - 4 . 3
77.9 80.5 - 2 . 7
88.6 86.2 2.4
102.2 99.1 3.1
110.2 104.8 5.5
100.5 102.9 - 2 . 4
110.7 109.5 1.2
22.4
16.3
8.3
11.7
16.9
21.5
28.7
31.0
21.1
27.6
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
227.2
263.7
297.8
337.1
361.3
355.2
312.6
19.9
323.7
324.1
222.3 4.9
254.1 9.6
293.8 4.0
337.3
363.
358. - 2 . 9
302.6 10.0
310.1
319.1 4! 6
328.1 - 3 . 9
124.0
143.4
158.1
187.4
204.8
198.0
172.1
172.2
178.4
174.2
119.0 4.9
133.8 9.6
154.1 4.0
187.6 - . 2
206.7 - 1 . 9
201.0 - 2 . 9
162.1 10.0
172.4 - . 2
173.8 4.6
178.1 - 3 . 9
35.6 32.8 2.7 88.4 86.2 2.2 80.0 23.2
50.0 43.5 6.6 93.4 90.3 3.1 89.8 30.5
57.2 54.4 2.9 100.9 99.7 1.2 107.7 31.9
.4 101.7 102.4 - . 6 131.8 17.9
85.6 85.2
95.9 97.4 -1.5 108.8 109.3 - . 4 144.0 12.4
84.3 87.4 -3.1 113.7 113.6
.2 144.3 12.9
54.7 46.1 8.6 117.4 116.0 1.4 113.3 27.2
60.1 58.6 1.5 112. 113.8 -1.7 106.5 31.2 10.3
61.3 60.0 1.2 117.1 113.8 3.3 109.3 36.1 11.4
58.0 61.0 - 3 . 0 116.: 117.1 - . 9 112.4 37.5 14.8
355.3
383.
395.
412.8
407.0
438.0
446.
452.5
447.3
475.9
347.0 8.3
372.5 10.9
391.8 3.3
411.8
.9
409.0 - 2 . 0
431.6 6.4
441.2 4.8
451.2 1.2
448.8 - 1 . 5
471.
4.8
192.6
208.4
214.0
225.4
215.1
236.1
239.0
239.8
230.8
247.7
184.3 8.3
197.5 10.9
210.
3.3
224.5
.9
217.1 - 2 . 0
229.
6.4
234.2 4.8
238.5 1.
232. - 1 . 5
242.9 4.8
73.4 68.3
119.1 116.0
84.1 76.1 8.0 124.3 121.4
84.6 83.
1.5 129.4 127.6
91.0 89.9 1.2 134.4 134.6
81.9 84.8 - 3 . 0 133.2 132.3
96.5 93.0 3.4 139.7 136.
96.5 93.5 3.0 142.5 140.
96.2 95.0 1.2 143.6 143.6
83.6 86.4 - 2 . 8 147.2 145.9
94.0 91.6 2.4 153. 151.2
487.7
497.2
529.8
551.
580.
614.
647.
484.2
495.
523.8
252.6 3.5
255.3 2.0
271.3 6.0
283.9 5.8
302.6 4.6
8.8
319.
340. 10.6
97.8
94.9
107.0
114.2
123.1
135.5
150.9
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966"
...
—
—
3.5 256. C
257.3
277.
5.8 289.7
575.4 4. 307.
605.6 8. 328.
637. 10. 351.
24.5 • 2 . 1
19.2 • 3 . 0
13.4 • 5 . 1
13.4 •1.7
16.7
.2
20.6
.9
26.3 2.4
29.1 1.9
23.4 •2.3
27.0
.6
70.4
69.5
0.8
68.0
67.0
60.4
57.1
61.0
67.1
73.5
79.2
79.4
83.0
66.5
66.5
61.5
59.8
63.8
65.6
72.8
75.7
79.5
82.5
1.5
.5
-1.1
-2.7
-2.8
1.5
.7
3.6
-.1
.6
95.9 2.C 158.2
162.3
94.9
104.
2.8 170.3
111.
2.8 ,175.
119.9 3.2 184.
129.4 6.1 193.
142.5 8.4 200.
30.3
67.7
65.8
61.9
63.0
65.3
68.1
73.3
73.9
74.8
76.9
25.3
20.2
13.7
9.8
11.1
12.8
17.5
19.1
17.7
21.8
117.5
130.5
136.3
140.3
141.8
147.5
153.0
160.1
163.4
171.2
45.2
44.4
44.7
47.0
50.2
54.3
54.0
52.6
53.1
57.0
19.1
15.9
13.5
18.7
17.1
24.6
18.6
20.2
14.5
18.5
156.7
160.3
167.2
172.5
182.7
190.3
197.9
3.1
2.9
1.8
-.2
.9
3.0
1.8
*
1.3
2.5
1.5
2.0
3.1
3.1
1.4
2.
2.2
176.6
184.0
193.7
200.9
211.2
221.1
232.6
55.0
55.8
58.8
60.4
61.7
64.8
64.2
21.0
17.5
22.0
24.7
25.4
31.4
30.0
Seasonally adjusted annual rates
1964: I
II
III.....
IV
569.7
578.1
585.0
587.2
566.3
574.1
581.4
579.9
3.5
4.0
3.5
7.4
300.4
305.1
311.3
311.9
296.9
301.1
307.8
304.6
3.5
4.0
3.5
7.4
119.5
123.7
125.4
123.9
117.3
120.3
122.6
119.4
2.2
3.5
2.8
4.4
180.9
181.4
185.9
188.1
179.6
180.8
185.1
185.2
1.2
.5
.8
2.9
206.7
210.4
212.8
214.6
62.6
62.6
60.8
60.6
26.0
26.2
26.7
22.9
1965: I
II
III....
IV....
600.3
607.8
618.2
631.2
591.0 9.3
600.5 7.3
609.7 8.5
621.0 10.2
319.7
322.5
330.9
341.0
310.3 9.3
315.2 7.3
322.4 8.5
330.7 10.2
131.8
131.7
138.3
140.3
124.6
125.5
131.8
135.7
7.2
6.2
6.5
4.7
187.8
190.8
192.6
200.6
185.7
189.6
190.6
195.1
2.1
1.1
2.0
5.6
216.6
220.3
223.3
224.0
64.0
65.0
64.0
66.2
32.2
30.6
31.9
30.7
1966: I
II
III....
640.5
643.5
649.9
657.0
632.0 8.5 344.7 336.2 8.5 145.4 139.9 5.5
631.9 11.6 346.7 335.1 11.6 146.0 137.6 8.4
640.8 9.1 352.8 343.7 9.1 153.7 145.1 8.7
643.7 13.2 359.7 346.5 13.2 158.4 147.4 11.0
199.4
200.8
199.0
201.3
196.3
197.6
198.6
199.1
3.0
3.2
.4
2.3
227.7
230.9
234.4
237.3
68.0
66.0
62.8
60.0
32.2
29.1
28.5
30.1
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
219
TABLE B-6.—Gross national product: Receipts and expenditures by major economic groups.
1929-66
[Billions of dollars]
Persons
Government
Disposable personal
income
Year or
quarter
Less:
Inter- Equals
est
Total
paid excludand ing intransTotal
terest
fer
and
paytransments
fers
to foreigners
1929..
83.3
1.9
81.4
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939..
74.5
64.0
48.7
45.5
52.4
58.5
66.3
71.2
65.5
70.3
1.2
.9
.7
.7
73.3
63.1
48.0
44.9
51.7
57.8
65.5
70.3
64.6
69.4
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
75.7
92.7
116.9
133.5
146.3
150.2
160.0
169.8
189.1
188.6
1.0
1.1
.8
.8
.8
1.0
1.4
1.8
2.2
2.4
1950_
1951.
1952.
1953.
1954.
1955.
1956.
1957.
1958.
1959.
206.9
226.6
238.3
252.6
257.4
275.3
293.2
308.5
318.8
337.3
I960..
1961._
1962..
1963..
1964..
1965..
1966 P.
350.0
364.4
385.3
404.6
436.6
469.1
505.3
Net receipts
Per- Personal sonal
consump- saving
or
tion
disex- saving
penditures
Tax
and
nontax
receipts
or accruals
Expenditures
Less:
Less: Equals:
TransTrans- Purfers, Equals: Total fers, chases
ex- interof
inter- Net
reest,
pendi- est,
goods
and
and
ceipts tures and
subsubservsidies 2
sidies a ices
4.2
11.3
1.8
9.5
10.3
1.8
8.5
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
3.4
2.6
10.8
.4
2.1
3.6
3.8
.7
2.6
10.5
11.4
12.9
15.4
15.0
15.4
1.9
3.1
2.6
2.7
3.1
3.4
4.1
3.2
3.8
4.2
8.9
6.3
6.3
6.7
7.4
8.0
8.8
1.9
3.1
2.6
2.7
3.1
3.4
4.1
3.2
3.8
4.2
9.2
9.2
8.1
8.0
9.8
12.2
11.2
11.2
11.1
12.4
10.6
10.7
12.9
13.4
16.1
15.0
16.8
17.6
74.7
91.6
116.1
132.7
145.5
149.3
158.6
168.0
186.9
186.2
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
3.8
11.0
27.6
33.4
37.3
29.6
15.2
7.3
13.4
9.4
17.7
25.0
32.6
49.2
51.2
53.2
60.9
56.8
58.9
56.0
18.4
28.8
64.0
93.3
103.0
92.7
45.5
42.4
50.3
59.1
4.4
4.0
4.4
4.7
6.5
10.4
18.5
17.3
18.8
21.3
13.3
21.0
28.2
44.4
44.7
42.8
32.4
39.5
40.1
34.7
10.4
18.5
17.3
18.8
21.3
14.0
24.8
59.6
88.6
96.5
82.3
27.0
25.1
31.6
37.8
2.9
3.1
3.5
4.3
4.6
5.1
5.9
6.4
6.5
7.1
204.1
223.5
234.8
248.3
252.9
270.2
287.2
302.2
312.3
330.3
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
13.1
17.3
18.2
18.3
16.4
15.8
20.6
20.7
22.3
19.1
68.7
84.8
89.8
94.3
89.7
100.4
109.0
115.6
114.7
128.9
22.9
19.9
19.0
19.5
21.9
23.4
25.5
28.7
33.0
34.0
45.8
64.9
70.8
74.8
67.8
76.9
83.5
86.8
81.6
95.0
60.8
79.0
93.7
101.2
96.7
97.6
104.1
114.9
127.2
131.0
22.9
19.9
19.0
19.5
21.9
23.4
25.5
28.7
33.0
34.0
37.9
59.1
74.7
81.6
74.8
74.2
78.6
86.1
94.2
97.0
7.8
8.1
8.6
9.7
10.7
11.9
13.4
342.3
356.3
376.6
394.9
425.8
457.2
491.9
325.2
335.2
355.1
375.0
401.4
431.5
465.0
17.0
21.2
21.6
19.9
24.5
25.7
26.9
139.8
144.6
157.0
168.8
174.2
189.0
212.2
36.5
103.3
41.3
103.3
42.8
114.2
44.4
124.3
46.7
127.5
49.6
139.4
55.7 «156.5
136.1
149.0
159.9
166.9
175.6
185.8
208.7
36.5
41.3
42.8
44.4
46.7
49.6
55.7
99.6
107.6
117.1
122.5
128.9
136.2
153.1
77.2
9.5
8.9
9.3
4.4
4.0
4.4
4.7
6.5
10.0
12.0
11.9
13.0
13.3
Seasonally adjusted annual rates
1964: I
II
III....
IV....
423.4
435.1
441.2
446.6
10.3
10.6
10.9
11.2
413.1
424.5
430.3
435.4
391.1
398.0
407.5
408.8
22.0
26.6
22.8
26.6
172.3
170.8
175.4
178.3
46.7
46.4
46.7
46.8
125.6
124.4
128.7
131.5
173.1
176.5
176.2
176.2
46.7
46.4
46.7
46.8
126.5
130.1
129.5
129.4
1965: I
II
III....
IV....
453.2
461.0
476.2
486.1
11.4
11.8
12.1
12.4
441.8
449.2
464.1
473.7
418.9
426.8
435.0
445.2
22.8
22.4
29.0
28.5
186.5
188.5
188.6
192.6
48.5
48.1
51.9
49.9
138.0
140.5
136.7
142.6
180.1
182.4
189.6
191.1
48.5
48.1
51.9
49.9
131.6
134.3
137.7
141.2
1966: I
II
III.—
IV »___
495.1
499.9
507.8
518.2
12.7
13.2
13.5
13.9
482.4
486.7
494.3
504.3
455.6
460.1
469.9
474.4
26.7
26.6
24.5
29.9
203.1
209.5
215.9
53.4
53.2
56.4
59.7
149.7
156.3
159.5
198.4
202.2
212.5
221.6
53.4
53.2
56.4
59.7
145.0
149.0
156.2
161.9
See footnotes at end of table.
220
TABLE B-6.—Gross national product: Receipts and expenditures by major economic groups,
1929-G&—Continued
[BiUions of dollars]
Business
Year
or
quarter
1929.
1931.
1932.
1934 _
1935.
1937.
1938.
1940. .
1941 __
1942. .
1943. .
1944..
1945..
1946. .
1947..
1948. .
1949..
1950.
1951
1952
1953
1954
1955.
1956
1957
1958
1959
1960
1961.
1962
1963.
1964_
1965
1966*.
Gross
retained
earn-1
ings
Gross
pri- Excess
of invate
domes- vesttic in- ment
vestment4
11.2
8.6
5.3
3.2
3.2
5.2
6.4
6.7
7.7
8.0
8.4
10.5
11.4
14.5
16.3
17.1
15.1
14.5
20.2
28.0
29.7
29.4
33.1
35.1
36.1
39.2
46.3
47.3
49.8
49.4
56.8
56.8
58.7
66.3
68.8
76.9
83.4
6 88.2
16.2
10.3
5.6
1.0
1.4
3.3
6.4
8.5
11.8
6.5
9.3
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.8
60.9
75.3
74.8
71.7
83.0
87.1
93.0
106.6
116.5
-5.1
-1.6
-.3
2.2
1.8
1.9
*
-1.8
-4.0
1.6
-.9
-2.7
-6.5
4.6
10.6
10.0
4.6
-16.1
-13.8
-18.0
-6.0
-24.7
-26.2
-16.8
-16.5
-12.5
-21.1
-22.8
-18.1
-11.5
-18.5
-18.0
-13.0
-16.8
-18.4
-16.0
-23.1
—28.3
74.9
76.5
78.4
77.9
82.5
82.4
83.8
85.1
86.5
87.3
88.0
90.2
91.8
92.5
97.4
103.8
103.7
ioe 7
111.9
114.5
118.5
115.0
118.0
-15.3
-15.3
-14.1
-19.5
-21.3
-21.3
-22.9
-26.8
-28.0
-31.0
-27.0
International
Trans- Net exports of goods
fers to
and services
foreigners
by persons Ex- Less: Equals:
Net
and
ImexGov- ports ports ports
ernment
0.4
.2
.2
.2
.2
.2
.2
.2
.2
.2
.2
.2
.2
.3
.8
2.9
2.6
4.5
5.6
4.0
3.5
2.5
2.5
2.3
2.5
2.4
2.3
2.4
2.4
2.4
2.6
2.7
2.8
2.8
2.8
3.0
7.0
5.4
3.6
2.5
2.4
3.0
3.3
3.5
4.6
4.3
4.4
5.4
5.9
4.8
4.4
5.3
7.2
14.7
19.7
16.8
15.8
13.8
18.7
18.0
16.9
17.8
19.8
23.6
26.5
23.1
23.5
27.2
28.6
30.3
32.3
37.0
39.0
42.9
5.9
4.4
3.1
2.1
2.0
2.4
3.1
3.4
4.3
3.0
3.4
3.6
4.6
4.8
6.5
7.1
7.9
7.2
8.2
10.3
9.6
12.0
15.1
15.8
16.6
15.9
17.8
19.6
20.8
20.9
23.3
23.2
23.0
25.1
26.4
28.5
32.0
38.0
1.1
1.0
.5
.4
.4
.6
.1
.1
.3
1.3
1.1
1.7
1.3
-2.0
-1.8
-.6
7.5
11.5
6.4
6.1
1.8
3.7
2.2
.4
1.8
2.0
4.0
5.7
2.2
.1
4.0
5.6
5.1
5.9
8.5
7.0
4.9
Gross
Excess
of
Statis- natrans- Total tical tional
prodfers income disor re- crep- uct
or
ceipts
or
exof net
ancy pendiexture
-0.8
-.7
-.2
-.2
-.2
-.4
.1
.1
—. 1
-1.1
-.9
-1.5
-1.1
.2
2.2
2.1
1.4
-4.6
-8.9
-1.9
-.5
2.2
-.2
.3
2.1
.5
.5
-1.5
-3.4
.2
2.3
-1.7
-3.0
-2.5
-3.1
-5.7
-4.2
—1.9
0.7
-.8
.7
.3
.6
.5
-.2
1.2
102.4
91.2
75.1
57.7
55.0
64.5
72.5
81.3
90.5
84.1
89.2
98.7
124.1
159.0
193.6
207.6
208.0
208.4
230.4
259.5
256.2
283.3
325.1
343.3
361,6
362.1
395.9
420.4
441.1
445.8
484.5
504.8
520.8
559.8
590.8
633.1
682.8
6 739.7
.6
1.3
1.0
.4
-1.1
-2.0
2.5
3.9
.1
.9
-2.0
.3
1.5
3.3
2.2
3.0
2.7
2.1
-1.1
616.4
628.3
640.2
647.5
664.9
675.0
687.3
704.0
722.0
733.2
744.9
0.4
-.6
-2.3
-3.3
-4.1
-2.1
-.8
.4
-.8
-.9
.4
1.6
-.8
-1.0
-.8
.5
-.3
-1.4
-1.6
6—2
103.1
90.4
75.8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
99.7
124. 5
157.9
191.fi
210.1
211.9
208.5
231.3
257.6
256.5
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
503.7
520.1
560.3
590.5
631.7
681.2
739.5
Seasonally adjusted annual rates
1964: I—_
II—
III..
IV- _
1965: I....
II—
IIIIV..
1966: I —
II...
III..
IVx»_
2.8
2.9
2.8
2.7
2.6
3.1
2.8
2.5
3.4
2.9
3.1
2.7
36.4
36.0
37.2
38.1
35.1
40.5
40.1
40.3
41.7
41.9
43.4
44.6
1
3
27.4
28.1
28.8
29.6
28.7
32.3
33.0
34.2
35.6
37.3
39.2
39.8
9.0
7.9
8.4
8.6
6.4
8.2
7.1
6.1
6.0
4.7
4.2
4.8
-6.3
-5.0
-5.7
-5.9
-3.8
-5.1
-4.2
-3.5
-2.6
-1.8
-1.1
—2.1
616.8
627.7
637.9
644.2
660.8
672.9
686.5
704.4
721.2
732.3
745.3
759.1
Personal income less personal tax and nontax payments (fines, penalties, etc.).
Government transfer payments to persons, foreign net transfers by Government, net interest paid by
government,
and subsidies less current surplus of government enterprises.
8
Undistributed corporate profits, corporate inventory valuation adjustment, capital consumption allowances,
and
wage
accruals less disbursements.
4
Private business investment, purchases of capital goods by private nonprofit institutions, and residential
housing.
See
Table
B-10.
5
8 Net foreign investment with sign changed.
Data for corporate profits are approximations for the year as a whole; data for fourth quarter are not
available. All other data incorporating or derived from these figures are correspondingly approximate
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
240-782 0—67- - 1 5
221
TABLE B-7.—Gross national product by sector, 1929-66
[Billions of dollars]
Year or
quarter
Total
gross
national
product
Gross private product *
Business
Total
Nonfarm2
Total
Farm
Households
Rest of
the world
Gross
government
product3
1929..
103.1
98.8
95.1
85.4
9.7
2.9
0.8
4.3
1930..
1931..
1932..
1933_.
1934..
1935..
1936..
1937..
1938..
1939..
90.4
75.8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
85.8
71.2
53.6
50.9
59.5
66.3
75.2
83.5
77.0
82.9
82.4
68.3
51.3
48.9
57.4
64.1
72.9
81.0
74.5
80.3
74.8
62.0
46.8
44.3
52.7
57.1
66.5
72.7
67.9
74.0
7.7
6.3
4.5
4.6
4.7
7.0
6.4
8.3
6.6
6.3
2.7
2.3
1.9
1.7
1.8
1.9
2.0
2.3
2.2
.7
.3
.4
.3
.3
.4
2.3
.3
4.5
4.7
4.4
4.7
5.6
5.9
7.3
6.9
7.6
7.6
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
91.9
115.1
142.8
166.0
177.9
176.8
187.7
214.6
240.1
237.0
89.1
112.2
139.5
162.4
173.8
172.3
182.7
208.6
233.5
230.1
82.6
103.3
126.5
147.2
158.5
156.4
163.9
188.5
210.2
211.4
6.5
8.9
.4
13.0
15.3
15.3
15.9
18.8
20.2
23.3
18.8
2.4
2.5
2.9
3.2
3.7
4.1
4.5
5.1
5.6
5.9
1950..
1951_.
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
263.9
301.0
314.3
332.7
332.4
363.8
382.6
402.0
405.2
439.4
256.3
292.8
305.8
323.6
322.7
352.9
370.8
389.3
391.7
425.0
236.3
269.9
283.7
303.3
303.1
334.1
352.2
370.9
370.9
405.3
20.0
22.9
22.2
20.3
19.6
18.8
18.6
18.4
20.8
19.6
I960..
1961_.
1962..
1963..
1964..
1965..
1966'
503.7
520.1
560.3
590.5
631.7
681.2
739.5
456.3
469.2
505.7
532.4
568.7
613.4
663.3
440.7
452.3
487.4
513.0
547.4
590.8
639.3
420.2
431.4
466.2
491.5
527.0
567.1
614.5
20/5
20.9
21.2
21.5
20.4
23.8
24.8
.5
.4
.3
.6
.8
1.0
1.0
7.8
9.4
15.1
25.6
32.2
35.2
20.8
16.7
17.4
19.4
1.2
1.3
1.3
1.3
1.6
1.8
2.1
2.2
2.0
2.2
20.9
27.4
31.2
31.9
32.5
34.2
36.6
39.1
42.1
44.3
13.2
2.4
14.0
15.0
16.0
17.3
18.3
19.5
2.9
3.3
3.4
4.0
4.3
4.5
47.5
50.9
54.7
58.1
63.0
67.8
76.2
6.4
6.9
7.2
7.8
8.1
9.1
9.8
10.5
11.4
12.2
.4
.4
.4
.4
.4
Seasonally adjusted annual rates
1964:
1965:
III
IV.".";
I
II
TV'".I
1966: j
II..
III.
IV P
616.8
627.7
637.9
644.2
555.5
565.5
574.2
579.4
534.6
544.1
552.6
558.2
513.8
523.4
532.5
538.0
20.7
20.7
20.1
20.2
16.7
17.3
17.6
17.4
4.2
4.0
4.0
3.8
61.3
62.3
63.7
64.8
660.8
672.9
686.5
704.4
595.2
606.4
618.2
633.8
573.0
583.6
595.3
611.2
551.6
559.4
570.6
586.6
21.4
24.2
24.7
24.7
17.5
18.0
18.7
19.1
4.7
4.8
4.1
3.4
65.6
66.6
68.3
70.6
721.2
732.3
745.3
759.1
648.4
657.6
667.7
679.3
624.9
634.0
643.5
654.8
599.3
609.0
619.1
630.5
25.7
25.0
24.4
24.3
19.1
19.1
19.7
20.0
4.4
4.4
4.6
72.8
74.7
77.6
79.9
4.5
21 Gross national product less compensation of general government employees.
Includes compensation of employees in government enterprises. Government enterprises are those
agencies of government whose operating costs are at least to a substantial extent covered by the sale of goods
and services, in contrast to the general activities of government which arefinancedmainly by tax revenues
and debt creation. Government enterprises, in other words, conduct operations essentially commercial in
character, even though they perform them under governmental auspices. The Post Office and public power
systems are typical examples of government enterprises. On the other hand, State universities and public
parks, where the fees and admissions cover only a nominal part of operating costs, are part of general
government
activities.
3
Compensation of general government employees.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
222
TABLE B-S.—Gross national product by sector, in 1958 prices, 1929-66
[Billions of dollars, 1958 prices]
Year or
quarter
Total
gross
national
product
Gross private product ]
Business
Total
Total
Nonfarm 2
Farm
Households
Rest of
the world
Gross
government 3
product
1929.
203.6
190.9
182.1
165.1
17.0
7.4
1.4
12.7
1930.
1931.
1932.
1933.
1934.
1935.
1936.
1937.
1938
1939
183.5
169.3
144.2
141.5
154.3
169.5
193.0
203.2
192.9
209.4
170.1
155.8
131.0
127.5
138.3
152.4
173.1
184.3
172.6
188.7
161.4
147.7
123.8
120.6
131.1
144.9
165.4
176.4
164.6
180.7
145.4
129.2
1C5.8
103.0
116.6
128.4
150.5
158.5
146.8
162.5
16.1
18.5
18.0
17.5
14.6
16.5
14.9
17.9
17.8
18.2
7.1
6.6
6.0
5.7
6.2
6.4
6.8
7.1
6.8
7.1
1.6
1.4
1.3
1.2
1.0
1.1
1.0
.8
1.1
13.3
13.5
13.2
14.0
16.0
17.1
19.9
18.9
20.4
20.6
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
227.2
263.7
297.8
337.1
361.3
355.2
312.6
309.9
323.7
324.1
205.6
236.6
257.3
272.8
286.9
282.5
275.1
281.4
295.0
294.1
197.1
228.1
248.7
264.9
278.9
274.6
267.0
272.8
286.0
284.7
179.6
209.3
228.0
245.3
259.5
256.5
248.6
255.8
267.0
266.2
17.5
18.8
20.6
19.6
19.4
18.1
18.5
17.0
19.0
18.4
7.6
7.5
7.8
7.2
7.1
7.1
7.1
7.5
7.9
8.2
1.0
1.1
1.2
1.2
21.6
27.2
40.5
64.3
74.4
72.8
37.5
28.6
28.7
30.1
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
355.3
383.4
395.1
412.8
407.0
438.0
446.1
452.5
447.3
475.9
324.2
344.6
353.2
371.1
366.2
397.2
404.8
410.5
405.2
433.4
314.2
334.5
343.2
360.7
355.4
385.4
392.2
397.5
391.7
419.4
294.9
316.2
324.2
340.7
335.0
364.4
371.4
377.2
370.9
398.3
19.4
18.4
19.0
20.0
20.4
20.9
20.8
20.3
20.8
21.1
8.7
8.8
8.8
9.1
9.2
10.1
10.6
10.9
11.4
11.7
1.3
1.2
1.2
1.3
1.6
1.8
2.0
2.1
2.0
2.2
31.1
38.8
41.8
41.7
40.9
40.7
41.3
41.9
42.1
42.5
1960
1961
1962
1963
1964
1965
1966
487.7
497.2
529.8
551.0
580.0
614.4
647.7
444.0
452.3
482.9
503.2
530.8
563.5
593.5
429.5
436.9
466.7
486.6
513.3
545.4
574.8
407.6
414.8
444.6
463.8
491.2
521.7
552.2
21.9
22.2
22.1
22.8
22.0
23.8
22.6
12.2
12.4
12.9
13.2
13.6
14.0
14.4
2.3
2.9
3.4
3.4
3.9
4.1
4.4
43.7
44.8
46.9
47.8
49.2
50.9
54.2
Seasonally adjusted annual rates
569.7
578.1
585.0
587.2
521.3
529.1
535.4
537.4
503.9
511.5
517.6
520.0
482.2
488.8
495.8
497.9
21.7
22.6
21.8
22.0
13.2
13.7
13.9
13.7
4.1
4.0
3.9
3.7
48.5
49.0
49.5
49.8
1965: I—.
II
III
IV
600.3
607.8
618.2
631.2
550.2
557.3
567.2
579.4
532.2
538.9
548.9
561.6
509.4
515.1
524.6
537.5
22.8
23.8
24.3
24.1
13.4
13.7
14.2
14.5
4.6
4.6
4.0
3.3
50.1
50.5
51.1
51.8
1966: I—.
II—
III
640.5
643.5
649.9
657.0
588.0
589.9
595.1
601.2
569.4
571.4
576.2
582.2
546.4
548.4
554.5
559.4
23.0
22.9
21.7
22.8
14.3
14.2
14.5
14.6
4.3
4.3
4.4
4.3
52.5
53.6
54.8
55.8
1964:
II
III
IV
1
Gross national product less compensation of general government employees.
2
Includes compensation of employees in government enterprises. Government enterprises are those
agencies of government whose operating costs are at least to a substantial extent covered by the sale of goods
and services, in contrast to the general activities of government which are financed mainly by tax revenues
and debt creation. Government enterprises, in other words, conduct operations essentially commercial
in character, even though they perform them under governmental auspices. The Post Office and public
power systems are typical examples of government enterprises. On the other hand, State universities and
public parks, where the fees and admissions cover only a nominal part of operating costs, are part of general
government activities.
3 Compensation of general government employees.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
223
TABLE B-9.—Personal consumption expenditures, 1929-66
[Billions of dollars]
Durable goods
Year
or
quarter
Nondurable goods
Services
•3*2
1929
77.2
9.2
3.2
4.8
37.7
19.5
9.4
1.8
7.0
30.3
11.5
4.0
2.6
1930
1931
1932
1933
1934....
1935....
1936
1937
1938
1939
69.9
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
7.2
5.5
3.6
3.5
4.2
5.1
6.3
6.9
5.7
6.7
2.2
1.6
.9
1.1
1.4
1.9
2.3
2.4
1.6
2.2
3.9
3.1
2.1
1.9
2.2
2.6
3.2
3.6
3.1
3.5
34.0
29.0
22.7
22.3
26.7
29.3
32.9
35.2
34.0
35.1
18.0
14.7
11.4
10.9
12.2
13.6
15.3
16.5
15.6
15.7
8.0
6.9
5.1
4.6
5.7
6.0
6.6
6.8
6.8
7.1
1.7
1.5
1.5
1.5
1.6
1.7
1.9
2.1
2.1
2.2
6.3
5.7
4.8
5.3
7.2
7.9
9.1
9.8
9.5
10.1
28.7
26.0
22.2
20.1
20.4
21.3
22.8
24.4
24.3
25.0
11.0
10.3
9.0
7.9
7.6
7.7
8.0
8.5
8.9
9.1
3.9
3.5
3.0
2.8
3.0
3.2
3.4
3.7
3.6
3.8
2.2
1.9
1.6
1.5
1.6
1.7
1.9
2.0
1.9
2.0
1940
1941
1942....
1943
1944
1945
1946
1947
1948
1949
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
7.8
6.7
8.0
15.8
20.4
22.7
24.6
2.7
3.4
.7
.8
.8
1.0
4.0
6.2
7.5
9.9
3.9
4.9
4.7
3.9
3.8
4.6
8.6
10.9
11.9
11.6
37.0
42.9
50.8
58.6
64.3
71.9
82.4
90.5
96.2
94.5
16.6
19.2
23.3
27.4
29.9
33.2
39.0
43.7
46.3
44.8
7.4
8.8
11.0
13.4
14.4
16.5
18.2
18.8
20.1
19.3
2.3
2.6
2.1
1.3
1.6
1.8
3.0
3.6
4.4
5.0
10.7
12.2
14.4
16.5
18.4
20.5
22.1
24.4
25.4
25.4
26.0
28.1
30.8
34.2
37.2
39.8
45.3
49.8
54.7
57.6
9.4
10.2
11.0
11.5
12.0
12.5
13.9
15.7
17.5
19.3
4.0
4.3
4.8
5.2
5.9
6.4
6.8
7.5
8.1
8.5
2.1
2.4
2.7
3.4
3.7
4.0
5.0
5.3
5.8
5.9
1950.—
1951....
1952.—
1953....
1954.—
1955..__
1956....
1957
1958
1959
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
30.5
29.6
29.3
33.2
32.8
39.6
38.9
40.8
37.9
44.3
13.1
11.6
11.1
14.2
13.6
18.4
16.4
18.3
15.4
19.5
14.1
14.4
14.3
14.9
15.0
16.6
17.5
17.3
17.1
18.9
98.1
108.8
114.0
116.8
118.3
123.3
129.3
135.6
140.2
146.6
46.0
52.1
54.7
55.5
56.5
58.1
60.4
63.9
66.6
68.4
19.6
21.2
21.9
22.1
22.1
23.1
24.1
24.3
24.7
26.4
5.4
6.1
6.8
7.7
8.2
9.0
9.8
10.6
11.0
11.6
27.1 62.4
29.3 67.9
30.5 73.4
31.6 79.9
31.5 85.4
33.1 91.4
34.9 98.5
36.7 105.0
37.9 112.0
40.2 120.3
21.3
23.9
26.5
29.3
31.7
33.7
36.0
38.5
41.1
43.7
9.5
10.4
11.1
12.0
12.6
14.0
15.2
16.2
17.3
18.5
6.2
6.7
7.1
7.8
7.9
8.2
8.6
9.0
9.3
10.1
I960.-.
1961.—
1962
1963
1964
1965
1966 v
325.2
335.2
355.1
375.0
401.4
431.5
465.0
45.3
44.2
49.5
53.9
59.4
66.1
69.4
20.1
18.4
22.0
24.3
25.8
29.8
30.0
18.9
19.3
20.5
22.2
25.1
27.1
30.1
151.3
155.9
162.6
168.6
178.9
190.6
206.1
70.1
72.1
74.4
76.5
80.4
85.4
91.3
27.3
27.9
29.6
30.6
33. 6
35.9
40.0
12.3
12.4
12.9
13.5
14.1
15.1
16.0
41.6
43.5
45.7
48.0
50.8
54.1
128.7
135.1
143.0
152.4
163.1
174.8
1.5
46.3
48.7
52.0
55.4
59.2
63.2
67.7
20.0
20.8
22.0
23.1
24.3
25.6
27.2
10.8
10.6
11.0
11.4
11.8
12.8
14.0
Seasonally adjusted annual rates
1964:1
II...
III..
IV..
391.1
398.0
407.5
408.8
57.6
59.8
61.1
58.9
25.3
26.0
27.1
24.6
24.1
25.4
25.3
25.7
8.2
8.4
8.7
8.5
174. 9
176.5
181.7
182.4
78.5
79.7
81.4
81.8
32.8
32.7
34.3
34.4
13.9
13.9
14.2
14.4
49.6
50.1
51.8
51.7
158.7
161.6
164.7
167.5
57.7
58.7
59.6
60.7
23.8
24.2
24.7
24.7
11.7
11.7
11.9
12.1
1965:1.--II-.IIIIV .
418.9
426.8
435.0
445.2
65.1
64.4
66.7
68.0
30.1
29.2
30.2
29.9
26.0
26.2
27.3
28.8
9.0
9.0
9.2
9.3
184.5
189.4
191.4
197.0
82.7
84.8
85.7
88.5
34.6
35.6
36.0
37.5
14.4
15.2
15.3
15.7
52.8
53.8
54.4
55.3
169.3
173.0
176.9
180. 2
61.6
62.7
63.6
64.7
24.7
25.4
26.0
26.3
12.2
12.7
13.0
13.4
455.6
II-.- 460.1
III- 469.9
IV v. 474.4
70.3
67.1
70.2
70.1
31.4
28.5
30.1
30.0
29.6
29.2
30.7
31.0
9.3
9.3
9.4
9.2
201.9
205.6
208.1
208.7
89.9
91.2
91.8
92.3
39.4
39.7
41.1
39.9
15.8
16.1
16.1
16.1
56.7
58.6
59.2
60.4
183. 4
187.4
191.5
195.6
66.0
67.1
68.2
69.5
26.5
27.1
27.6
27.8
13.5
13.9
14.2
14.5
1966: I —
1
2
3
Quarterly data are estimates by Council of Economic Advisers.
Includes standard clothing issued to military personnel.
Includes imputed rental value of owner-occupied dwellings.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics (except as noted).
224
TABLE B-10.—Gross private domestic investment, 1929-66
[Billions of dollars]
Fixed investment
Year or
quarter
Residential structures
Nonresidential
Total
private
domestic
invest- Total
ment
Producers'
durable
equipment
Structures
Total
Total
Nonfarm
Total
Nonfarm
Change in
business
inventories
Total
Total
Nonfarm
Farm
0.2
Nonfarm
1929-
16.2
14.5
10.6
5.0
4.8
5.6
4.9
4.0
3.8
1.7
1.8
1930..
19311932..
19331934..
19351936193719381939-
10.3
5.6
1.0
1.4
3.3
6.4
8.5
11.8
6.5
9.3
10.6
6.8
3.4
3.0
4.1
5.3
7.2
9.2
7.4
8.9
8.3
5.0
2.7
2.4
3.2
4.1
5.6
7.3
5.4
5.9
4.0
2.3
1.2
.9
1.0
1.2
1.6
2.4
1.9
2.0
3.9
2.3
1.2
.9
1.0
1.2
1.6
2.4
1.8
1.9
4.3
2.7
1.5
1.5
2.2
2.9
4.0
4.9
3.5
4.0
3.7
2.4
1.3
1.3
1.8
2.4
3.3
4.1
2.9
3.4
2.3
1.7
.7
1.2
1.6
1.9
2.0
2.9
2.2
1.6
.7
.5
.8
1.1
1.5
1.8
1.9
2.8
-.4
-1.1
-2.5
-1.6
-.7
1.1
1.3
2.5
-.9
.4
-.1
-1.6
-2.6
-1.4
.2
.4
2.1
1.7
-1.0
.3
19401941-
19451946194719481949-
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
11.0
13.4
8.1
6.4
8.1
11.6
24.2
34.4
41.3
38.8
7.5
9.5
6.0
5.0
6.8
10.1
17.0
23.4
26.9
25.1
2.3
2.9
1.9
1.3
1.8
2.8
6.8
7.5
8.8
8.5
2.2
2.8
1.8
1.2
1.7
2.7
6.1
6.7
8.0
7.7
5.3
6.6
4.1
3.7
5.0
7.3
10.2
15.9
18.1
16.6
4.6
5.6
3.5
3.2
4.2
6.3
9.2
14.0
15.5
13.7
3.4
3.9
2.1
1.4
1.3
1.5
7.2
11.1
14.4
13.7
3.2
3.7
1.9
1.2
1.1
1.4
6.7
10.4
13.6
12.8
2.2
4.5
1.8
-.6
-1.0
-1.0
6.4
-.5
4.7
-3.1
1.9
4.0
.7
-.6
-.6
-.6
6.4
1.3
3.0
-2.2
195019511952_.
195319541955..
195619571958..
1959..
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.8
60.9
75.3
47.3
49.0
48.8
52.1
53.3
61.4
65.3
66.5
62.4
70.5
27.9
31.8
31.6
34.2
33.6
38.1
43.7
46.4
41.6
45.1
9.2
11.2
11.4
12.7
13.1
14.3
17.2
18.0
16.6
16.7
8.5
10.4
10.5
11.9
12.3
13.6
16.5
17.2
15.8
15.9
18.7
20.7
20.2
21.5
20.6
23.8
26.5
28.4
25.0
28.4
15.7
17.7
17.6
18.6
18.0
21.2
24.2
25.9
22.0
25.4
19.4
17.2
17.2
18.0
19.7
23.3
21.6
20.2
20.8
25.5
18.6
16.4
16.4
17.2
19.0
22.7
20.9
19.5
20.1
24.8
6.8
10.3
3.1
.4
-1.5
6.0
4.7
1.3
-1.5
4.8
6.0
9.1
2.1
1.1
-2.1
5.5
5.1
.8
-2.3
4.8
I96019611962..
1963..
1964...
1965...
1966 P.
74.8
71.7
83.0
87.1
93.0
106.6
116.5
71.3
69.7
77.0
81.3
88.3
97.5
105.1
48.4
47.0
51.7
54.3
60.7
69.7
79.3
18.1
18.4
19.2
19.5
21.0
24.9
27.9
17.4
17.7
18.5
18.8
20.3
24.2
27.3
30.3
28.6
32.5
34.8
39.7
44.8
51.4
27.7
25.8
29.4
31.2
35.9
40.6
46.2
22.8
22.6
25.3
27.0
27.6
27.8
25.8
22.2
22.0
24.8
26.4
27.0
27.2
25.3
3.6
2.0
6.0
5.9
4.7
9.1
11.4
3.3
1.7
5.3
5.1
5.3
8.1
11.7
1942..
19431944..
Seasonally adjusted annual rates
1964: I
II—
III...
IV...
90.2
91.8
92.5
97.4
86.6
87.6
88.9
90.0
58.1
59.7
61.7
63.3
20.3
20.9
21.0
21.8
19.6
20.2
20.3
21.2
37.9
38.8
40.7
41.4
34.0
35.2
36.9
37.7
28.5
27.9
27.2
26.7
27.9
27.3
26.6
26.2
0.6
.6
.6
.6
3.5
4.2
3.6
7.4
3.6
5.1
4.6
7.9
1965: I
II—
III...
IV...
103.8
103.7
106.7
111.9
94.4
96.0
98.0
101.5
66.7
67.9
70.2
73.9
23.6
24.6
24.4
26.8
22.9
24.0
23.8
26.1
43.1
43.3
45.8
47.1
39.3
39.4
41.3
42.3
27.7
28.1
27.8
27.6
27.2
27.5
27.3
27.0
.6
.6
.5
.5
9.5
7.6
8.7
9.4
6.7
7.2
9.0
1966: I
II—
IV K".
114. 5
118.5
115. 0
118.0
105.6
106.2
105.1
103.6
77.0
78.2
80.3
81.7
28.5
27.9
27.7
27.6
27.8
27.2
27.0
27.0
48.5
50.3
52.6
54.1
43.7
45.4
47.5
48.2
28.6
28.0
24.8
21.9
28.0
27.4
24.3
21.3
.5
.6
.6
.6
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
225
10.4
8.9
12.3
9.9
14.4
8.5
12.1
10.4
15.6
TABLE B - l 1.—National income by type of income, 1929-66
[Billions of dollars]
Compensation of
employees
Year or
quarter
1929...
1930...
1931...
1932...
1933...
1934...
1935...
1936...
1937...
1938...
1939...
1940...
1941...
1942...
1943...
1944...
1945...
1946...
1947...
1948._.
1949...
1950...
1951...
1952...
1953...
1954...
1955...
1956...
1957...
1958...
1959...
1960...
1961...
1962...
1963-..
1964.-.
1965.-.
1966 »..
Business and professional income
and inventory
valuation
adjustment
Total
naSupIntional
plecome Invenin- 1
Wages ments
of
tory
come Total and
to
unin- valusala- wages Total corpo- ation
and
rated adjustries
salaenter- ment
prises
50.4
46.2
39.1
30.5
29.0
33.7
36.7
41.9
46.1
43.0
45.9
49.8
62.1
82.1
105.8
116.7
117.5
112.0
123.0
135.4
134.5
146.8
171.1
185.1
198.3
196.5
211.3
227.8
238.7
239.9
258.2
270.8
278.1
296.1
311.1
333.6
358.4
392.3
.5
.6
.6
1.0
1.8
2.0
2.2
2.3
2.7
3.2
3.8
4.5
5.6
5.9
5.9
5.8
6.5
7.8
9.6
10.2
10.9
11.5
13.2
15.2
17.3
17.9
20.9
23.4
24.6
27.5
29.9
32.0
34.5
41.0
504.0 355.3 324.4
513.7 362.2 330.6
522.9 369.8 337.4
528.5 375.3 342.2
543.3 381.7 348.2
552.2 387.8 353.7
562.7 395.6 360.8
577.8 406.5 370.8
595.7 419.6 380.0
604.1 427.9 387.4
613.8 438.3 396.7
447.5 405.0
31.0
31.7
32.4
33.1
33.5
34.1
34.8
35.7
39.6
40.5
41.5
42.5
86.8
75.4
59.7
42.8
40.3
49.5
57.2
65.0
73.6
67.4
72.6
81.1
104.2
137.1
170.3
182.6
181.5
181.9
199.0
224.2
217.5
241.1
278.0
291.4
304.7
303.1
331.0
350.8
366.1
367.8
400.0
414.5
427.3
457.7
481.9
517.3
559.0
«609.7
51.1
46.8
39.8
31.1
29.5
34.3
37.3
42.9
47.9
45.0
48.1
52.1
64.8
85.3
109.5
121.2
123.1
117.9
128.9
141.1
141.0
154.6
180.7
195.3
209.1
208.0
224.5
243.1
256.0
257.8
279.1
294.2
302.6
323.6
341.0
365.7
392.9
433.3
0.7
.7
9.0
7.6
58
3.6
3.3
4.7
5.5
6.7
7.2
6.9
7.4
8.6
11.1
14.0
17.0
18.2
19.2
21.6
20.3
22.7
22.6
24.0
26.1
27.1
27.5
27.6
30.3
31.3
32.8
33.2
35.1
34.2
35.6
37.1
37.9
39.9
40.7
41.8
8.8
6.8
5.1
3.3
3.9
4.8
5.5
6.8
7.2
6.7
7.6
0.1
-.1
*
.2
-.2
11.7
14.4
-.4
17.1
-.2
18.3
-.1
19.3
-.1
23.3 - 1 . 7
21.8 - 1 . 5
23.1
-.4
22.2
.5
25.1 - 1 . 1
-.3
26.5
26.9
.2
27.6
-.2
27.6
_ o
30.5
-'.5
31.8
-.3
33.1
-.1
33.2
-.1
35.3
34.3
35.6
37.1
37.9
39.9
41.0
-.4
42.2
-.4
Corporate profits
and inventory
valuation
adjustment
Income Rental
inof
Net
farm come
of
Inven- interproCorpoest
tory
prie- perrate
tors 3 sons Total profits valubefore ation
taxes 4 adjustment
6.2
4.3
3.4
2.1
2.6
3.0
5.3
4.3
6.0
4.4
4.4
4.5
6.4
9.8
11.7
11.6
12.2
14.9
15.2
17.5
12.7
13.5
15.8
15.0
13.0
12.4
11.4
11.4
11.3
13.4
11.4
12.0
12.8
13.0
13.1
12.0
15.1
16.0
5.4
4.8
3.8
2.7
2.0
1.7
1.7
1.8
2.1
2.6
2.7
2.9
3.5
4.5
5.1
5.4
5.6
6.6
7.1
8.0
8.4
9.4
10.3
11.5
12.7
13.6
13.9
14.3
14.8
15.4
15.6
15.8
16.0
16.7
17.1
17.7
18.3
18.9
10.5
10.0
0.5
7.0
3.7
3.3
2.0
-.4
2.4
-1.3 -2.3
1.0
-1.2
1.0 - 2 . 1
1.7
2.3
-.6
3.4
3.6
-.2
5.6
6.3
-.7
6.8
6.8
4.9
4.0
1.0
6.3
7.0
-.7
9.8
10.0
-.2
15.2
17.7 - 2 . 5
20.3
21.5 - 1 . 2
24.4
25.1
-.8
23.8
24.1
-.3
19.2
19.7
-.6
19.3 24.6 - 5 . 3
25.6
31.5 - 5 . 9
33.0
35.2 - 2 . 2
30.8
28.9
1.9
42.6 - 5 . 0
37.7
43.9 - 1 . 2
42.7
38.9
39.9
1.0
40.6 - 1 . 0
39.6
38.3
38.0
-.3
48.6 - 1 . 7
46.9
48.8 - 2 . 7
46.1
47.2 - 1 . 5
45.6
41.4
41.1
-.3
52.1
51.7
-.5
49.9
49.7
.2
50.3 50.3
-.1
55.7
55.4
.3
58.9
59.4
66.6
-.4
67.0
74.2
75.7 - 1 . 5
79.8 81.8 - 2 . 0
4.7
4.9
5.0
4.6
4.1
4.1
4.1
3.8
3.7
3.6
3.5
3.3
3.2
3.1
2.7
2.3
2.2
1.5
1.9
1.8
1.9
2.0
2.3
2.6
2.8
3.6
4.1
4.6
5.6
6.8
7.1
8.4
10.0
11.6
13.8
15.5
17.8
20.0
-0.5
-.3
*
-.9
-1.3
-1.8
-1.0
-1.8
-2.8
-2.9
-2.8
.5
14.7
15.1
15.7
16.3
16.9
17.5
18.1
18.7
19.1
19.6
20.2
21.0
Seasonally adjusted annual rates
1964: I
II....
III...
IV...
1965: I
II....
III...
IV...
1966: I
II....
III...
IV.
39.1
39.9
40.3
40.3
40.5
40.4
40.7
41.1
41.4
41.6
41.9
42.2
39.1
40.2
40.3
40.2
40.6
40.9
41.0
41.7
42.0
42.2
42.4
42.2
-0.2
-.1
.1
-.2
-.5
-.3
-.6
-.6
-.6
-.5
*
12.2
12.2
11.7
11.9
12.9
15.5
16.0
16.0
17. G
16.3
15.4
15.2
17.4
17.6
17.8
17.9
18.1
18.3
18.4
18.5
18.7
18.8
18.9
19.1
65.3
66.5
67.8
66.8
73.2
72.7
74.0
76.9
80.0
79.9
79.1
65.8
66.8
67.8
67.7
74.5
74.5
75.0
78.7
82.7
82.8
81.9
1
National income is the total net income earned in production. It differs from gross national product
mainly in that it excludes depreciation charges and other allowances for business and institutional consumption
of durable capital goods, and indirect business taxes. See Table B-12.
2
Employer contributions for social insurance and to private pension, health, and welfare funds; compensation
for
injuries;
directors' fees; pay of the military reserve; and a few other minor items.
3
Excludes income resulting from net reductions of farm inventories and gives credit in computing income to net additions to farm inventories during the period.
4
See Table B-66 for corporate tax liability and profits after taxes.
5
Data for corporate profits are approximations for the year as a whole; data for fourth quarter are not
available. All other data incorporating or derived from these figures are correspondingly approximate.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
226
TABLE B-12.—Relation of gross national product and national income, 1929-66
[Billions of dollars]
Year or quarter
Gross
national
product
Plus:
Less:
Subsidies
Less:
Capital Equals: less
Indirect business taxes
Equals:
Net current
conStaBusiNasumpnasurplus
tional
ness
tistical
tion
of govprodincome
transfer
disernallowState
payFedcrepTotal
and
ances
ment
uct
eral
local ments ancy
enterprises
1929
103.1
7.9
95.2
-0.1
7.0
1.2
5.8
0.6
0.7
86.8
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
90.4
75.8
58.0
55.6
65.1
72.2
82.5
90.4
84.7
90.5
8.0
7.9
7.4
7.0
6.8
6.9
7.0
7.2
7.3
7.3
82.4
68.0
50.7
48.6
58.2
65.4
75.4
83.3
77.4
83.2
-.1
*
*
*
.3
.4
*
.1
.2
.5
7.2
6.9
6.8
7.1
7.8
8.2
8.7
9.2
9.2
9.4
1.0
.9
.9
1.6
2.2
2.2
2.3
2.4
2.2
2.3
6.1
6.0
5.8
5.4
5.6
6.0
6.4
6.8
6.9
7.0
.5
.6
.7
.7
.6
.6
.6
.6
.4
.5
-.8
.7
.3
.6
.5
-.2
1.2
*
.6
1.3
75.4
59.7
42.8
40.3
49.5
57.2
65.0
73.6
67.4
72.6
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
99.7
124.5
157.9
191.6
210.1
211.9
208.5
231.3
257.6
256.5
7.5
8.2
9.8
.4
.1
.2
.2
.7
.8
.9
-.2
-.1
10.0
11.3
11.8
12.7
14.1
15.5
17.1
18.4
20.1
21.3
2.6
3.6
4.0
4.9
6.2
7.1
7.8
7.8
8.0
8.0
7.4
7.7
7.7
7.8
8.0
8.4
9.3
10.6
12.1
13.3
.4
.5
.5
.5
.5
.5
.5
.6
.7
.8
1.0
.4
12.2
14.5
16.6
92.2
116.3
148.1
181.3
199.1
200.7
198.6
219.1
243.1
239.9
81.1
104.2
137.1
170.3
182.6
181.5
181.9
199.0
224.2
217.5
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
284.8
328.4
345.5
364.6
364.8
398.0
419.2
441.1
447.3
483.7
18.3
21.2
23.2
25.7
28.2
31.5
34.1
37.1
38.9
41.4
266.4
307.2
322.3
338.9
336.6
366.5
385.2
404.0
408.4
442.3
.2
.2
-.1
-.4
-.2
-.1
.8
.9
.9
.1
23.3
25.2
27.6
29.6
29.4
32.1
34.9
37.3
38.5
41.5
8.9
9.4
10.7
11.2
11.8
11.5
12.5
14.5
15.8
17.3
18.7
19.7
21.4
23.6
25.5
27.0
28.9
.8
.9
1.0
1.2
L.I
L.2
L.4
L.5
L.6
L.7
1960
1961
1962
1963
1964
1965
1966
503.7
520.1
560.3
590.5
631.7
681.2
739.5
43.4
45.2
50.0
52.6
56.0
59.6
63.1
460.3
474.9
510.4
537.9
575.7
621.6
676.4
.2
1.4
1.4
.8
1.3
1.0
1.3
45.2
47.7
51.5
54.7
58.5
62.7
65.5
13.5
13.6
14.6
15.3
16.2
16.8
16.0
31.7
34.1
36.9
39.4
42.3
45.8
49.5
1.9
2.0
2.1
2.3
2.5
2.6
51.6
10.2
11.0
11.3
9.9
i
10.3
10.9
9.7
-1.1
-2.0
2.5
3.9
.1
.9
-2.0
.3
1.5
3.3
2.2
3.0
2.7
2.1
-1.1
*
1.6
-.8
-1.0
-.8
.5
-.3
-1.4
-1.6
l _
#
2
241.1
278.0
291.4
304.7
303.1
331.0
350.8
366.1
367.8
400.0
414.5
427.3
457.7
481.9
517.3
559.0
1609.7
Seasonally adjusted annual rates
1964: I_
II
III_-_
IV
616.8
627.7
637.9
644.2
54.6
55.5
56.6
57.5
562.2
572.2
581.4
586.6
1.0
1.3
1.4
1.4
56.4
57.9
59.5
60.2
15.5
16.1
16.6
16.5
40.8
41.9
42.9
43.7
2.4
2.5
2.6
2.6
1965: I
II
III___.
IV____
660.8
672.9
686.5
704.4
58.2
59.1
60.2
60.8
602.7
613.8
626.3
643.6
1.2
1.0
.9
.9
62.0
62.2
62.7
63.6
17.5
16.8
16.3
16.7
44.6
45.4
46.4
47.0
2.6
2.5
2.5
2.6
-4.1
-2.1
-.8
.4
543.3
552.2
562.7
577.8
1966: I
II
III____
721.2
732.3
745.3
759.1
61.6
62.7
63.7
64.6
659.7
669.6
681.6
694.6
.8
.9
1.5
1.8
63.0
64.7
66.3
68.1
15.2
16.1
16.2
16.5
47.8
48.7
50.0
51.6
2.6
2.6
2.6
2.6
-.8
-.9
.4
595.7
604.1
613.8
IV P —
\
0.4
-.6
-2.3
-3.3
504.0
513.7
522.9
528.5
1
Data for corporate profits are approximations for the year as a whole; data for fourth quarter are not
available. All other data incorporating or derived from these figures are correspondingly approximate.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
227
TABLE B-13.—Relation of national income and personal income, 1929-66
[Billions of dollars]
Less:
Corporate
profits
and
inNational venincome tory
valuation
adjustment
Year or quarter
Plus:
Interest
Govpaid
Wage
Contri- acernBusiby
butions cruals
ment
ness
gov- Divi- transfor
transless fer pay- ern- dends
social
fer
ment
disinsur- burse- ments
pay(net)
ance ments to per- and
ments
by
sons
consumers
*
*
*
1929 -
86.8
10.5
0.2
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
75.4
59.7
42.8
40.3
49.5
57.2
65.0
73.6
67.4
72.6
7.0
2.0
-1.3
-1.2
1.7
3.4
5.6
6.8
4.9
6.3
.3
.3
.3
.3
.3
.3
.6
1.8
2.0
2.1
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
81.1
104.2
137.1
170.3
182.6
181.5
181.9
199.0
224.2
217.5
9.8
15.2
20.3
24.4
23.8
19.2
19.3
25.6
33.0
30.8
2.3
2.8
3.5
5.7
*
*
241.1
278.0
291.4
304.7
303.1
331.0
350.8
366.1
367.8
400.0
37.7
42.7
39.9
39.6
38.0
46.9
46.1
45.6
41.1
51.7
6.9
8.2
*
.1
414.5
427.3
457.7
481.9
517.3
559.0
1609.7
49.9
50.3
55.7
58.9
66.6
74.2
.
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964
1965
1966
-.
-.
__
.
-__
P
Equals:
4.5
5.2
6.1
6.0
5.7
5.2
8.7
8.8
9.8
11.1
12.6
14.5
14.8
17.6
20.7
21.4
24.0
26.9
28.0
29.2
37.8
*
*
*
*
*
0 2
-.2
*
*
*
-.1
*
*
*
*
*
*
*
*
*
Personal
income
0.9
2.5
5.8
0.6
85.9
1.0
2.1
1.4
1.5
1.6
1.8
2.9
1.9
2.4
2.5
1.8
1.8
1.7
1.6
1.7
1.7
1.7
1.9
1.9
1.9
5.5
4.1
25
2.0
2.6
28
4.5
• 4.7
3.2
3.8
.5
.6
7
.7
.6
.6
.6
.6
.4
.5
77.0
65.9
50 2
47.0
54.0
60 4
68.6
74.1
68 3
72.8
2.7
2.6
2.6
2.1
2.2
2.2
4.0
4.4
4.3
.4
.5
.5
.5
.5
.5
.5
.6
.7
.8
78.3
96.0
122.9
151.3
165.3
171.1
178.7
191.3
210.2
207.2
.8
.9
1.0
1.2
1
L.4
5
6
7
227.6
255.6
272.5
288.2
290.1
310.9
333.0
351.1
361.2
383.5
2.6
4.4
3.1
5.6
10.8
11.1
10.5
11.6
3.3
4.2
4.6
4.6
6.5
7.2
14.3
11.5
12.0
12.8
14.9
16.1
17.1
19.9
24.1
24.9
7.2
7.6
8.8
8.6
10.1
11.2
12.0
12.1
13.6
10.5
11.3
11.7
11.6
12.6
26.6
30.4
31.2
33.0
34.2
37.1
41.9
15.1
15.0
16.1
17.6
19.1
20.6
22.8
13.4
13.8
15.2
16.5
17.3
19.2
20.9
1.9
2.0
2.1
2.3
2.5
2.6
2.6
401.0
416.8
442.6
465.5
496.0
535.1
580.4
2.5
5.2
5.5
6.1
8.1
9.0
9.5
5.6
6.3
7.0
8.6
8.9
9.3
]
Seasonally adjusted annual rates
1964: I
II
III
IV
1965' I
II
III
-.- .
IV
1966: I
II
III
IV p
504.0
513.7
522.9
528.5
65.3
66.5
67.8
66.8
27.4
27.7
28.2
28.6
543.3
552.2
562.7
577.8
73.2
72.7
74.0
76.9
28.8
29.0
29.2
29.8
595.7
604.1
613.8
80.0
79.9
79.1
36.5
37.0
38.5
39.3
1
0.1
-.1
*
*
*
34.6
33.9
34.1
34.4
18.6
18.9
19.4
19.6
17.1
17.3
17.4
17.7
2.4
2.5
2.6
2.6
484.0
492.0
500.3
507.5
36.0
35.2
39.4
37.9
20.0
20.5
20.9
21.0
18.1
18.8
19.5
20.2
2.6
2.5
2.5
2.6
518.0
527.6
541.9
552.8
40.0
40.1
42.3
45.3
21.9
22.5
23.0
23.8
20.9
21.1
21.1
20.7
2.6
2.6
2.6
2.6
564.6
573.5
585.2
598.1
Data for corporate profits are approximations for the year as a whole; data for fourth quarter are not
available. All other data incorporating or derived from these figures are correspondingly approximate.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
228
TABLE B-14.—Disposition of personal income, 7920-66
Percent of disposable
personal income
Less: Personal outlays
Year or
quarter
Less:
Per- Equals:
sonal DisposPertax
able
sonal
and
perincome nontax
sonal Total
pay- income outlays
ments
Personal Interest
con- paid by
sumpcontion
expend- sumers
itures
Per- Equals:
Personal
sonal
transfer saving
payments
to foreigners
Personal
outlays
PerConsonal
sump- saving
tion
Total
expenditures
Billions of dollars
Percent
1929 _
85.9
2.6
83.3
79.1
77.2
1.5
0.3
4.2
95.0
92.7
5.0
1930.
1931.
1932.
1933.
1934.
1935.
1936..
1937.
1938.
77.0
65.9
50.2
47.0
54.0
60.4
68.6
74.1
68.3
72.8
2.5
1.9
1.5
1.5
1.6
1.9
2.3
2.9
2.9
2.4
74.5
64.0
48.7
45.5
52.4
58.5
66.3
71.2
65.5
70.3
71.1
61.4
49.3
46.5
52.0
56.4
62.7
67.4
64.8
67.7
69.9
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
.9
.7
.5
.5
.5
.5
.6
.7
.7
.7
.3
.3
.2
.2
.2
.2
.2
2
.2
.2
3.4
2.6
-.6
!4
2.1
3.6
3.8
.7
2.6
95.4
95.9
101.3
102.0
99.3
96.3
94.6
94.7
98.9
96.3
93.8
94.4
99.8
100.6
98.0
95.2
93.3
93.4
97.6
95.0
4.6
4.1
-1.3
-2.0
.7
3.7
5.4
5.3
1.1
3.7
1940..
1941..
1942..
1943..
1944..
1945..
1946..
19471948..
1949..
78.3
96.0
122.9
151.3
165.3
171.1
178.7
191.3
210.2
207.2
2.6
3.3
6.0
17.8
18.9
20.9
18.7
21.4
21.1
18.6
75.7
92.7
116.9
133.5
146.3
150.2
160.0
169.8
189.1
188.6
71.8
81.7
89.3
100.1
109.1
120.7
144.8
162.5
175.8
179.2
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
.8
.9
.7
.5
.5
.5
.8
1.1
1.5
1.9
.2
.2
.1
.2
.4
.5
.7
.7
.7
.5
3.8
11.0
27.6
33.4
37.3
29.6
15.2
7.3
13.4
9.4
94.9
88.2
76.4
75.0
74.5
80.3
90.5
95.7
92.9
95.0
93.6
86.9
75.7
74.4
74.0
79.7
89.6
94.6
91.8
93.8
5.1
11.8
23.6
25.0
25.5
19.7
9.5
4.3
7.1
5.0
1950.
1951.
1952.
1953.
1954.
1955.
1956.
1957.
1958.
1959.
227.6
255.6
272.5
288.2
290.1
310.9
333.0
351.1
361.2
383.5
20.7
29.0
34.1
35.6
32.7
35.5
39.8
42.6
42.3
46.2
206.9
226.6
238.3
252.6
257.4
275.3
293.2
308.5
318.8
337.3
193.9
209.3
220.2
234.3
241.0
259.5
272.6
287.8
296.6
318.3
191.0
206.3
216.7
230.0
236 5
254.4
266.7
281.4
290.1
311.2
2.4
2.7
3.0
3.8
4.0
4.7
5.4
5.8
5.9
6.5
.5
.4
.4
.5
.5
.5
.6
.6
.6
.6
13.1
17.3
18.1
18.3
16.4
15.8
20.6
20.7
22.3
19.1
93.7
99. 4
92.4
92.8
93.6
94.3
93.0
93.3
93.0
94.4
92.3
91.0
90.9
91.1
91.9
92.4
91.0
91.2
91.0
92.3
6.3
7.6
7.6
7.2
6.4
5.7
7.0
6.7
7.0
5.6
1960...
1961.-.
1962 . . .
1963..._
1964
1965....
1966 P
401.0
416.8
442.6
465.5
496.0
535.1
580.4
50.9
52.4
57.4
60.9
59.4
66.0
75.1
350.0
364.4
385.3
404.6
436.6
469.1
505.3
333.0
343.3
363.7
384.7
412.1
443.4
478.4
325.2
335.2
355.1
375.0
401.4
431.5
465.0
7.3
7.6
8.1
9.1
.5
.5
.5
.6
.6
.6
.7
17.0
21.2
21.6
19.9
24.5
25.7
26.9
95.1
94.2
94.4
95.1
94.4
94.5
94.7
92.9
92.0
92.2
92.7
91.9
92.0
92.0
4.9
5.8
5.6
4.9
5.6
5.5
5.3
10.1
11.3
12.7
Q
Seasonally adjusted annual rates
1964:
II
IIIIV..
1965: I_.
II,
III
IV..
1966: I . . .
II—
III
IV P.
484.0
492.0
500.3
507.5
60.7
56.9
59.1
60.9
423.4
435.1
441.2
446.6
401.4
408.5
418.4
420.0
391.1
398.0
407.5
408.8
10.0
10.3
10.6
0.6
.6
.6
.6
22.0
26.6
22.8
26.6
94.8
93.9
94.8
94.0
92.4
91.5
92.4
91.5
5.2
6.1
5.2
6.0
518.0
527.6
541.9
552.8
64.9
66.6
65.7
66.7
453.2
461.0
476.2
486.1
430.3
438.6
447.1
457.6
418.9
426.8
435.0
445.2
10.8
11.2
11.5
11.8
.6
.6
.6
.6
22.8
22.4
29.0
28.5
94.9
95.1
93.9
94.1
92.4
92.6
91.3
91.6
5.0
4.9
6.1
5.9
564.6
573.5
585.2
598.1
69.5
73.6
77.4
79.9
495.1
499.9
507.8
518.2
468.4
473.3
483.3
488.4
455.6
460.1
469.9
474.4
12.1
12.5
12.8
13.2
.6
.7
.7
.7
26.7
26.6
24.5
29.9
94.6
94.7
95.2
94.2
92.0
92.0
92.5
91.5
5.4
5.3
4.8
5.8
9.7
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
229
TABLE B-15.—Sources of personal income, 1929-66
[Billions of dollars]
Wage and salary disbursements i
Year or quarter
Total
personal
income
Commodityproducing
industries
Total
Total
Proprietors'
income
Distrib- Service
utive industries
Manu- indusfactur- tries
ing
Government
Other
labor
income l
Business
and
Farm 2
professional
1929-
85.9
50.4
21.5
16.1
15.6
8.4
4.9
1930..
1931..
1932..
1933..
193419351936193719381939-
77.0
65.9
50.2
47.0
54.0
60.4
68.6
74.1
68.3
72.8
46.2
39.1
30.5
29.0
33.7
36.7
41.9
46.1
43.0
45.9
18.5
14.3
9.9
9.8
12.1
13.5
15.8
18.4
15.3
17.4
13.8
10.8
7.7
7.8
9.6
10.8
12.4
14.6
11.8
13.6
14.5
12.5
9.8
8.8
9.9
10.7
11.8
13.2
12.6
13.3
8.0
7.1
5.8
5.2
5.7
5.9
6.5
7.1
6.8
7.1
5.2
5.3
5.0
5.1
6.1
6.5
7.9
7.5
8.2
8.2
1940..
194119421943..
1944__
194519461947..
19481949-
78.3
96.0
122.9
151.3
165.3
171.1
178.7
191.3
210.2
207.2
49.8
62.1
82.1
105.6
116.9
117.5
112.0
123.0
135.3
134.6
19.7
27.5
39.1
48.9
50.3
45.8
46.0
54.3
61.0
57.7
15.6
21.7
30.9
40.9
42.9
38.2
36.5
42.5
47.2
44.7
14.2
16.3
18.0
20.1
22.7
24.8
31.0
35.2
37.6
37.7
7.5
8.1
9.0
9.9
10.9
12.0
14.4
16.1
17.9
18.6
8.4
10.2
16.0
26.6
33.0
34.9
20.7
17.4
18.9
20.6
.7
.7
.9
1.1
1.5
1.8
1.9
2.3
2.7
3.0
8.6
11.1
14.0
17.0
18.2
19.2
21.6
20.3
22.7
22.6
195019511952195319541955.19561957__
19581959-.
227.6
255.6
272.5
288.2
290.1
310.9
333.0
351.1
361.2
383.5
146.7
171.0
185.1
198.3
196.5
211.3
227.8
238.7
239.9
258.2
64.6
76.1
81.8
89.4
85.4
92.8
100.2
103.8
99.7
109.1
50.3
59.4
64.2
71.2
67.6
73.9
79.5
82.5
78.7
86.9
39.9
44.3
46.9
49.8
50.2
53.4
57.7
60.5
60.8
64.8
19.9
21.7
23.3
25.1
26.4
28.9
31.6
33.9
35.9
38.7
22.4
28.9
33.1
34.1
34.6
36.2
38.3
40.4
43.5
45.6
3.8
4.8
5.3
6.0
6.3
7.3
8.4
9.5
9.9
11.3
24.0
26.1
27.1
27.5
27.6
30.3
31.3
32.8
33.2
35.1
196019611962—
1963196419651966 *,
401.0
416.8
442.6
465.5
496.0
535.1
580.4
270.8
278.1
296.1
311.1
333.6
358.4
392.3
112.5
112.8
120.8
125.7
134.0
144.3
158.2
89.7
89.8
96.7
100.6
107.2
115.5
127.2
68.1
69.1
72.5
76.0
81.2
86.7
93.1
41.5
44.0
46.8
49.9
54.1
58.1
63.5
48.7
52.2
56.0
59.5
64.3
69.2
77.4
12.0
12.7
13.9
14.9
16.6
18.5
20.8
34.2
35.6
37.1
37.9
39.9
40.7
41.8
0.6
9.0
7.6
5.8
3.6
3.3
4.7
5.5
6.7
7.2
6.9
7.4
Seasonally adjusted annual rates
1964: I . . .
II..
III.
IV..
484.0
492.0
500.3
507.5
324.4
330.6
337.2
342.3
130.2
132.9
135.5
137.4
104.2
106.2
108.6
109.7
79.1
80.5
81.9
83.1
52.6
53.7
54.8
55.4
62.6
63.5
65.0
66.3
15.9
16.4
16.9
17.3
39.1
39.9
40.3
40.3
1965: I . . .
II..
III.
IV..
518.0
527.6
541.9
552.8
348.2
353.7
360.8
370.8
140.9
142.6
144.8
148.9
112.6
114.0
116.2
119.2
84.6
86.0
87.1
89.1
55.7
57.2
59.2
60.5
67.0
68.0
69.7
72.3
17.8
18.2
18.8
19.4
40.5
40.4
40.7
41.1
1966: I . . .
II..
III.
IV*
564.6
573.5
585.2
598.1
380.0
387.4
396.7
405.0
153.8
157.0
159.6
162.3
123.0
126.0
128.6
131.2
90.8
92.1
93.9
95.8
61.3
62.5
64.4
65.8
74.1
75.9
78.8
81.0
20.0
20.6
21.1
21.7
41.4
41.6
41.9
42.2
See footnotes at end of table.
230
TABLE B-15.—Sources of personal income, 1929-66—Continued
[Billions of dollars]
Transfer payments
Year or
quarter
Rental
income Divi- Personal
of per- dends interest
income
sons
Total
State
Old-age
and sur- unemployvivors
ment ininsursurance
ance
benefits benefits
-Veterans'
benefits
Personal
contributions
for social
Other
insurance
0.1
77.6
.1
.2
.2
.2
.2
.2
.2
.6
70.8
60.8
46.7
43.2
49.8
53.9
63.0
66.7
62.6
66.9
2.0
2.2
2.2
2.2
2.4
2.7
3.1
3.7
4.1
4.9
.7
.8
1.2
1.8
2.2
2.3
2.0
2.1
2.2
2.2
72.3
87.8
111.0
137.3
151.2
156.4
161.0
173.0
189.4
191.3
4.9
3.9
3.9
3.7
3.9
4.3
4.3
4.4
4.6
4.6
7.9
5.9
6.0
6.3
6.5
6.8
7.2
7.9
8.7
9.4
2.9
3.4
3.8
4.0
4.6
5.2
5.8
6.7
6.9
7.9
210.9
236.4
254.1
271.9
274.7
296.4
318. 5
336.6
344.3
368.5
4.6
4.8
4.8
5.0
5.3
5.6
6.1
10.0
10.9
11.2
12.2
12.9
13.8
15.7
9.3
9.6
10.3
11.8
12.5
13.2
17.6
385.2
400.0
425.5
448.1
479.7
515.6
559.7
1929..
5.4
5.8
7.2
1.5
0.6
1930..
1931..
1932..
1933..
1934..
1935..
1936..
1937..
1938..
1939-
4.8
3.8
2.7
2.0
1.7
1.7
1.8
2.1
2.6
2.7
6.5
4.1
2.5
2.0
2.6
2.8
4.5
4.7
3.2
3.8
6.7
6.3
5.7
5.8
5.7
5.5
5.6
5.5
5.5
1.5
2.7
2.2
2.1
2.2
2.4
3.5
2.4
2.8
3.0
.6
1.6
.8
.5
.4
.5
1.9
.6
.5
.5
1.1
1.4
1.6
1.8
1.9
1.6
1.8
1.9
2.0
1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947_.
1948..
1949..
2.9
3.5
4.5
5.1
5.4
5.6
6.6
7.1
8.0
8.4
4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2
5.4
5.5
5.3
5.3
5.6
6.3
6.8
7.5
7.9
8.5
3.1
3.1
3.1
3.0
3.6
6.2
11.3
11.7
11.2
12.4
0.1
.1
.2
.2
.3
.4
.5
.6
.7
.1
.1
.4
1.1
.8
.8
1.7
.5
.5
.5
.5
.9
2.8
6.7
6.7
5.8
5.1
1950_.
1951...
1952..
1953-.
1954..
19551956..
1957..
1958..
1959..
9.4
10.3
11.5
12.7
13.6
13.9
14.3
14.8
15.4
15.6
8.6
8.6
8.9
9.3
10.5
11.3
11.7
11.6
12.6
9.2
9.9
10.6
11.8
13.1
14.2
15.7
17.6
18.9
20.7
15.1
12.5
13.0
14.0
16.0
17.3
18.5
21.4
25.7
1.0
1.9
2.2
3.0
3.6
4.9
5.7
7.3
8.5
10.2
1.4
.8
1.0
1.0
2.0
1.4
1.4
1.8
3.9
2.5
1960
1961. _____
1962
1963
1964
1965
1966 p
15.8
16.0
16.7
17.1
17.7
18.3
18.9
13.4
13.8
15.2
16.5
17.3
19.2
20.9
23.4
25.0
27.7
31.4
34.6
38.4
42.8
28.5
32.4
33.3
35.3
36.8
39.7
44.5
11.1
12.6
14.3
15.2
16.0
18.1
21.0
4.0
2.9
2.8
2.6
2.2
1.8
0.4
.4
.5
Nonagricultural
personal
income 3
0.9
Seasonally adjusted annual rates
17.4
17.6
17.8
17.9
17.1
17.3
17.4
17.7
33.3
34.0
35.1
35.9
37.1
36.4
36.6
37.0
15.8
15.9
16.1
16.3
2.7
2.6
2.5
2.4
5.2
5.3
5.3
5.3
13.3
12.7
12.8
13.0
12.3
12.4
12.6
12.8
467.7
475.5
484.4
491.3
1965: I — .
II—
III—
IV-.
18.1
18.3
18.4
18.5
18.1
18.8
19.5
20.2
36.9
38.0
38.9
39.7
38.6
37.8
42.0
40.5
16.7
16.6
20.4
18.6
2.4
2.2
2.2
2.0
5.5
5.6
5.7
5.8
14.1
13.3
13.7
14.1
13.1
13.2
13.2
13.5
500.9
507.7
521.5
532.2
1966: I — .
II—
IIIIV v.
18.7
18.8
18.9
19.1
20.9
21.1
21.1
20.7
41.0
42.1
43.2
44.8
42.6
42.8
44.9
47.9
19.5
19.7
21.2
23.5
2.0
1.6
1.8
1.7
5.9
6.0
6.1
6.3
15.2
15.4
15.8
16.4
16.9
17.1
18.1
18.5
542.9
552.5
565.1
578.2
1964: I___.
II —
III..
IV..
1
The total of wage and salary disbursements and other labor income differs from compensation of employees in Table B - l l in that it excludes employer contributions for social insurance and excludes the excess
of 2wage accruals over wage disbursements.
Excludes income resulting from net reductions of inventories and gives credit in computing income to
net3 additions to inventories during the period.
Nonagricultural income is personal income exclusive of net income of unincorporated farm enterprises,
farm wages, agricultural net interest, and net dividends paid by agricultural corporations.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
231
T A B L E B—16.— Total and per capita disposable personal income and personal
expenditures•, in current and 1958 prices, 7929-66
Disposable personal income
Year or quarter
Total (billions
of dollars)
Per capita
(dollars)
Current
prices
1958
prices
Current
prices
1958
prices
1929.
83.3
150.6
683
1,236
1930.
1931.
1932.
1933.
1934.
1935.
1936.
1937.
1938.
1939.
74.5
64.0
48.7
45.5
52.4
58.5
66.3
71.2
65.5
70.3
139.0
133.7
115.1
112.2
120.4
131.8
148.4
153.1
143.6
155.9
605
516
390
362
414
459
518
552
504
537
1,128
1,077
921
893
952
1,035
1,158
1,187
1,105
1,190
1940.
1941.
1942.
1943.
1944.
1945.
1946.
1947.
1948.
1949.
75.7
92.7
116.9
133.5
146.3
150.2
160.0
169.8
189.1
188.6
166.3
190.3
213.4
222.8
231.6
229.7
227.0
218.0
229.8
230.8
573
695
867
976
1,057
1,074
1,132
1,178
1,290
1,264
1950.
1951 _
1952 _
1953.
1954.
195519561957.
1958.
1959-
206.9
226.6
238.3
252.6
257.4
275.3
293.2
308.5
318.8
337.3
249.6
255.7
263.3
275.4
278.3
296.7
309.3
315.8
318.8
333.0
19601961.
1962.
1963.
1964.
19651966 i
350.0
364.4
385.3
404.6
436.6
469.1
505.3
340.2
350.7
367.3
381.3
406.5
430.8
451.5
consumption
Personal consumption expenditures
Total (billions
of dollars)
Current
prices
Per capita
(dollars)
Population
(thousands) *
1958
prices
Current
prices
77.2
139.6
634
1,145
121,875
60.5
48.6
45.8
51.3
55.7
61.9
66.5
63.9
66.8
130.4
126.1
114.8
112.8
118.1
125.5
138.4
143.1
140.2
148.2
567
487
389
364
406
437
483
516
492
510
1,059
1,016
919
934
985
1,080
1,110
1,079
1,131
123,188
124,149
124. 949
125,690
126,485
127.362
128,181
128,961
129,969
131,028
1,259
1,427
1,582
1,629
1,673
1,642
1,606
1,513
1, 567
1,547
70.8
80.6
88.5
99.3
108.3
119.7
143.4
160.7
173.6
176.8
155.7
165.4
161.4
165.8
171.4
183.0
203.5
206.3
210.8
216.5
536
604
656
726
782
855
1,014
1.115
1,184
1,185
1,178
1,240
1,197
1,213
1,238
1,308
1,439
1,431
1,438
1,451
132.122
133, 402
134,860
136, 739
138,397
139,928
141,389
144,126
146,631
149,188
1,364
1,469
1,518
'.t 583
,585
,666
,743
,801
,831
,905
1,646
1,657
1,678
1,726
1,714
1,795
1,839
1,844
1,831
1,881
191.0
206.3
216.7
230.0
236.5
254.4
266.7
281.4
290.1
311.2
230.5
232.8
239.4
250.8
255.7
274.2
281.4
288.2
290.1
307.3
1,259
1,337
1,381
, 441
,456
,539
,585
,643
,666
,758
1,520
1,509
1,525
1,572
1,575
1,659
1,673
1,683
1,666
1,735
151,684
154,287
156,954
159.565
162,391
165,275
168,221
171,274
174,141
177,073
,937
,983
2,064
2,136
2,272
2,411
2,567
1,883
1,909
1,968
2,013
2,116
2,214
2,294
325.2
335.2
355.1
375.0
401.4
431.5
465.0
316.1
322.5
338.4
353.3
373.8
396.2
415.5
,800
,824
1,902
1,980
2,089
2,218
2,362
1,749
1,755
1,813
1,865
1,946
2,036
2,111
180,684
183, 756
186,656
189,417
192,120
194,572
196,842
1958
prices
897
Seasonally adjusted annual rates
1964: I—.
II...
III..
IV..
423.4
435.1
441.2
446.6
395.7
405.5
410.8
413.9
2,215
2,269
2,292
2,312
2,070
2,114
2,134
2,142
391.1
398.0
407.5
408.8
365.7
371.0
379.5
378.9
2,046
2,075
2,117
2,116
1,913
1,934
1,972
1,961
191,163
191,781
192,492
193,196
1965: I...
II...
III..
IV...
453.2
461.0
476.2
486.1
418.8
423.7
436.8
443.9
2,339
2,373
2,443
2,486
2,162
2,181
2,241
2,270
418.9
426.8
435.0
445.2
387.1
392.2
398.9
406.5
2,162
2,197
2,232
2,277
1,998
2,019
2,047
2,079
193,731
194, 268
194,898
195, 543
1966: I....
II...
III..
IV v.
495.1
499.9
507.8
518.2
448.4
447.9
452.2
457.0
2,525
2,543
2,576
2,621
2,287
2,278
2,294
2,311
455.6
460.1
469.9
474.4
412.8
412.2
418.3
418.5
2,324
2,340
2,384
2,399
2,105
2,097
2,122
2,117
196,082
196, 585
197,124
197,717
i Population of the United States including armed forces abroad. Annual data are for July 1; quarterly
data are for middle of period, interpolated from monthly data.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Sources: Department of Commerce (Office of Business Economics and Bureau of the Census) and Council
of Economic Advisers.
232
TABLE
B-17. —Number and money income of families and unrelated individuals ,
Families
Poor 2
Total
Year
Number
(millions)
1947-65
!
Median
income (1965
prices)
Number
(millions)
Incidence
(percent)
1947
1948
1949
37.2
38.6
39.3
4,275
4,178
4,116
11.2
12.0
12.7
30.0
31.2
32.3
1950
1951
1952
1953
1954
39.9
40.6
40.8
41.2
42.0
4,351
4,507
4,625
5,002
4,889
11.9
11.3
10.7
10.1
11.0
29.9
27.8
26.3
24.6
26.2
1955
1956
1957
1958
1959
42.9
43.5
43.7
44.2
45.1
5,223
5,561
5,554
5,543
5,856
10.1
23.6
21.5
21.7
21.8
20.6
1960
1961
1962
1963
1964
45.5
46.3
47.0
47.4
47.8
5,991
6,054
6,220
6,444
6,676
9.3
8.9
8.5
8.2
20.3
20.1
18.9
18.0
17.1
1965
48.3
6,882
8.0
16.5
9.4
9.5
9.6
9.3
9.2
Unrelated individuals 3
Total
Number
(millions)
Poor*
Median
income (1965
prices)
Number
(millions)
Incidence
(percent)
8.2
8.4
9.0
1,407
1,365
1,430
4.3
4.5
4.7
52.3
54.0
51.9
1950
1951
1952
1953
1954
9.4
9.1
9.7
9.5
9.7
1,421
1,470
1,692
1,662
1,454
4.9
4.6
4.5
4.5
5.0
52.1
50.7
46.6
47.5
51.2
1955
1956
1957
1958
1959
9.9
9.8
10.4
10.9
10.9
1,561
1,670
1,720
1,675
1,718
4.8
4.6
4.8
5.1
5.0
48.9
46.9
46.1
46.9
46.0
I960
1961
1962
1963
1964
11.1
11.2
11.0
11.2
12.1
1,857
1,862
1,841
1,862
2,017
4.9
4.9
4.8
4.8
5.0
44.3
43.5
43.2
42.8
41.4
1965
12.1
2,110
4.7
38.8
1947
1948
1949
. .
1 The term "family" refers to a group of two or more persons related by blood, marriage, or adoption and
residing
together; all such persons are considered members of the same family.
2
Poverty is defined to include all families with total money income of less than $3,000 in 1965 prices;
these are also referred to as poor families. Incidence of poverty is measured by the percent that poor families
are of all families.
3 The term "unrelated individuals" refers to persons 14 years of age and over (other than inmates of institutions)
who are not living with any relatives.
4
Poverty is denned to include all unrelated individuals with total money income of less than $1,500 in
1965 prices. Incidence of poverty is measured by the percent that poor unrelated individuals are of all
unrelated individuals.
NOTE.—The number of poor and incidence of poverty shown in this table differ from data shown in
Chapter 5, Tables 18 and 19. In Chapter 5, poverty is defined by the new Social Security Administration
poverty-income standard; it takes into account family size, composition, and place of residence (as well
as the amount of money income).
Data for Alaska and Hawaii included beginning 1959.
Source: Department of Commerce, Bureau of the Census.
233
TABLE B-18.—Sources and uses of gross .«• "ing, 7929-66
[Billions of dollars]
Gross private saving and government surplus or
deficit, national income and product accounts
Government surplus
or deficit (-)
Private saving
Year or quarter
Total
Total
Personal
saving
Gross investment
Gross
busi- Total
ness
saving
Federal
Gross
private Net
domesforeign
Total tic in- investState
ment i
vestand
ment
local
Statistical
discrepancy
1929
16.3
15.3
4.2
11.2
1.0
1.2
17.0
16.2
0.8
0.7
1930...
1931
1932
1933
1934
1935
1936
1937
1938
1939 .
11.8
5.1
.8
.9
3.2
6.6
7.2
11.9
7.0
8.8
12.1
8.0
2.5
2.3
5.6
8.6
10.3
11.5
8.7
11.0
3.4
2.6
-.6
-.9
.4
2.1
3.6
3.8
.7
2.6
8.6
5.3
3.2
3.2
5.2
6.4
6.7
7.7
8.0
8.4
-.3
-2.9
-1.8
-1.4
-2.4
-2.0
-3.1
.3
-1.8
-2.2
.3
-2.1
-1.5
-1.3
-2.9
-2.6
-3.6
-.4
-2.1
-2.2
-.6
-.8
-.3
-.1
.5
.6
.5
.7
.4
*
11.0
5.8
1.1
1.6
3.8
6.4
8.4
11.8
7.6
10.2
10.3
5.6
1.0
1.4
3.3
6.4
8.5
11.8
6.5
9.3
.7
.2
.2
.2
.4
-.1
-.1
.1
1.1
.9
—.8
.7
3
6
.5
-.2
12
1940
1941
19421..
1943
1944
1945...
1946
1947 .
1948...
1949
13.6
18.6
10.7
5.5
2.5
5.2
35.1
42.0
49.9
35.9
14.3
22.4
42.0
49.7
54.3
44.7
29.7
27.5
41.4
39.0
3.8
11.0
27.6
33.4
37.3
29.6
15.2
7.3
13.4
9.4
10.5
11.4
14.5
16.3
17.1
15.1
14.5
20.2
28.0
29.7
-.7
-3.8
-31.4
-44.1
-51.8
-39.5
5.4
14.4
8.5
-3.2
-1.3
-5.1
-33.1
-46.6
-54.5
-42.1
3.5
13.4
8.4
-2.4
.6
1.3
1.8
2.5
2.7
2.6
1.9
1.0
-.7
14.6
19.0
9.6
3.5
5.0
9.1
35.2
42.9
47.9
36.2
13.1
17.9
9.8
5.7
7.1
10.6
30.6
34.0
46.0
35.7
1.5
1.1
-.2
-2.2
-2.1
-1.4
4.6
8.9
1.9
.5
1 0
.4
-1.1
-2.0
2.5
3.9
.1
.9
-2.0
.3
1950
1951..1952...
1953
1954
1955
1956...
1957...
1958
1959...
50.4
56.1
49.5
47.5
48.5
64.8
72.7
71.2
59.2
73.8
42.5
50.3
53.3
54.4
55.6
62.1
67.8
70.5
71.7
75.9
13.1
17.3
18.1
18.3
16.4
15.8
20.6
20.7
22.3
19.1
7.8
29.4
9.1
6.2
5.8
33.1
35.1 - 3 . 8 - 3 . 8
36.1 - 6 . 9 - 7 . 0
39.2 - 7 . 0 - 5 . 9
2.7
4.0
46.3
4.9
5.7
47.3
.7
2.1
49.8
49.4 -12.5 -10.2
56.8 - 2 . 1 - 1 . 2
-1.2
-.4
*
.1
-1.1
-1.3
-.9
-1.4
-2.3
-.8
51.8
59.5
51.6
50.5
51.3
66.9
71.6
71.2
60.7
73.0
54.1
59.3
51.9
52.6
51.7
67.4
70.0
67.8
60.9
75.3
-2.2
.2
-.3
-2.1
-.5
-.5
1.5
3.4
-.2
-2.3
1.5
3.3
2.2
3.0
2.7
2.1
-1.1
*
1.6
-.8
77.5
75.5
85.0
90.5
100.1
112.3
73.9
79.8
87.9
88.7
101.4
109.1
2 115.1
17.0
21.2
21.6
19.9
24.5
25.7
26.9
3.7
-4.3
-2.9
1.8
-1.4
3.2
2
3. 5
• .2
-.5
.9
1.2
1.7
1.6
2 3.3
76.5
74.7
85.5
90.3
98.7
110.7
118.4
74.8
71.7
83.0
87.1
93.0
106.6
116.5
3.0
2.5
3.1
5.7
4.2
1.9
-1.0
-.8
.5
-.3
-1.4
-1.6
2
—.2
1960
1961
1962
1963
1964 . .
1965
.
„____
..
. .
.
.
.
_ _
1966P
56.8
58.7
66.3
68.8
76.9
83.4
2
88. 2
3.5
-3.8
-3.8
.7
-3.0
1.6
2.2
-0.2
6
1.3
Seasonally adjusted annual rate
1964: I
II
III
96.0
97.4
100.4
106.6
96.9
103.1
101.2
104.5
22.0
26.6
22.8
26.6
74.9
76.5
78.4
77.9
-0.9
-5.7
-.8
2.1
-1.9
-6.7
-3.0
-.5
1.0
1.1
2.2
2.6
96.5
96.8
98.2
103.3
90.2
91.8
92.5
97.4
6.3
5.0
5.7
5.9
0.4
-.6
-2.3
-3.3
1965:1-_
111.7
110.9
111.8
115.0
105.3
104.8
112.8
113.6
22.8
22.4
29.0
28.5
82.5
82.4
83.8
85.1
6.4
6.1
-1.0
1.4
4.5
4.4
-2.5
-.2
1.9
1.7
1.5
1.6
107.6
108.8
110.9
115.4
103.8
103.7
106.7
111.9
3.8
5.1
4.2
3.5
-4.1
-2.1
-.8
.4
117.9
121.2
115.8
113.2
113.9
112.5
26.7
26.6
24.5
29.9
86.5
87.3
88.0
4.7
7.3
3.3
2.3
3.8
-.5
2.4
3.5
3.8
117.1
120.3
116.1
120.1
114.5
118.5
115.0
118.0
2.6
1.8
1.1
2.1
-.8
-.9
.4
IV
II
III
IV
1966:1
II
III.
IV P
...
1
2
Net exports of goods and services less net transfers to foreigners.
Data for corporate profits are approximations for the year as a whole; data for fourth quarter are not
available. All other data incorporating or derived from these figures are correspondingly approximate.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
234
POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY
TABLE B-19.—Population by age groups: Estimates, 1929-66, and projections, 7970-85
[Thousands of persons]
Age (years)
July 1
Total
Under 5
Estimates:
5-13
14-19
20-24
25-44
45-64
65 and
over
1929
1930
1931
1932
1933
1934
121, 767
11,734
22,131
13,796
10, 694
35,862
21,076
6,474
123,077
124,040
124,840
125,579
126,374
11,372
11,179
10,903
10,612
10,331
22,266
22,263
22, 238
22,129
21,964
13,937
13,980
14,015
14,070
14,163
10,915
11,003
11,077
11,152
11,238
36,309
36,654
6,705
37,319
37,662
21,573
22,031
22,473
22,933
23,435
1935
1936
1937
1938
1939
127,250
128,053
128,825
129,825
130,880
10,170
10,044
10,009
10,176
10,418
21, 730
21,434
21,082
20,668
20, 253
14,296
14,442
14,558
14,680
14,748
11,317
11,375
11,411
11,453
11, 519
37,987
38,288
38,589
38,954
39,354
23,947
24,444
24,917
25,387
25,823
7,804
8,027
8,258
8,508
8,764
1940
1941
1942
1943
1944
132,122
133,402
134,860
136,739
138,397
10,579
10,850
11,301
12,016
12, 524
19,936
19,674
19,427
19,319
19, 246
14,770
14,682
14,534
14,381
14, 264
11,690
11,807
11,955
12,064
12, 062
39,868
40,383
40,861
41,420
42,016
26, 249
26, 718
27,196
27,671
28,138
9,031
9,288
9,584
9,867
10,147
1945
1946
1947
1948
1949
139,928
141,389
144,126
146, 631
149,188
12,979
13, 244
14,406
14,919
15, 607
19,326
19, 625
20,118
20,990
21, 634
13,942
13,597
13,447
13,171
13,006
12, 036
12,004
11,814
11, 794
11, 700
42,521
43,027
43, 657
44,288
44,916
28,630
29,064
29,498
29,931
30,405
10,494
10,828
11,185
11,538
11, 921
1950
1951
1952
1953
1954
152,271
154,878
157, 553
160,184
163, 026
16,410
17,333
17,312
17,638
18,057
22,424
22, 998
24, 501
25, 701
26,887
12,839
12,727
12,807
12, 986
13,230
11,680
11, 552
11,350
11,062
10,832
45,673
46,103
46,494
46, 786
47,002
30,849
31,362
31,884
32,393
32,941
12,397
12,803
13,203
13,617
14,076
1955
1956
1957
1958
1959
165,931
168,903
171,984
174,882
177,830
18,566
19,003
19,494
19,887
20,175
27,925
28,929
29,672
30, 651
31,767
13, 501
13,981
14,795
15,337
15,816
10,714
10,616
10,603
10,756
47,195
47,380
47, 441
47,336
47,192
33, 507
34,058
34,591
35,109
35,663
14,527
14,937
15,387
15,805
16,248
1960
1961
1962
1963
1964
180,684
183,756
186, 656
189,417
192,120
20,364
20.657
20,746
20,750
20, 691
32,985
33,296
33.943
34,606
35,298
16,217
17,566
18,483
19.075
19,813
11,116
11,408
11,889
12, 620
13,152
47,134
47.061
16,659
17,013
1194, 583
196,842
20,434
19,851
35,888
36, 525
20,638
21, 579
13,667
14,047
46,933
46,874
46,790
46, 792
36,208
36.756
37,316
37,868
38,434
39, 011
39,592
18,156
18,457
Projections:
1970: Series A . .
Series D_.
208,615
204,923
21,317
17,625
37,224
37,224
23,136 ]• 17,261
23,136
48,276
41,817
19,585
1975: Series A...
Series D . .
227,929
215,367
27,210
18,323
37,884
34,209
25,132 } 19,299
25,132
53,882
43,363
21,159
1980: Series A...
Series D_.
250,489
227,665
31,040
20,736
45,215
32,695
24,621 } 20,997
24,621
62,373
43,179
23,063
1985: Series A...
Series D__
274,748
241,731
23,030
53,497
35,933
26,894
21,699 } 21,068
72,083
42,941
24,977
1965
1966
7,147
7,363
7,582
17.311
17,565
17,856
2
1 The latest estimate for total population for 1965 is 194,572,000 (as shown in Table B-16), but detail by age
groups is not yet available.
2 Two of four series projected by the cohort method and based on different assumptions with regard to
completed fertility, which moves gradually toward a level of 3,350 children per 1,000 women for Series A
and 2,450 children per 1,000 women for Series D. For further explanation of method of projection and for
additional data, see forthcoming Population Estimates, Current Population Reports, Series P-25.
NOTE.—Data for armed forces overseas included beginning 1940 and for Alaska and Hawaii beginning 1950.
Source: Department of Commerce, Bureau of the Census.
235
T A B L E B-20.—Noninstitutional population and the labor force, 1929-66
Civilian labor force
Total
Total
labor
Nonin- labor
2
force
as
Employment
stitu- force Armed
percent
tional (includ- forces1
of
nonUnem- instituing
ploy-2 tional
Total
armed
Agri- Nonagriforces)i
Total cul- cul- ment
tural tural
lation
Year or month
Thousands of persons 14 years of age a n d over
Old definitions 2
1929-
Percent
49,440
260 49,180 47,630 10,450 37,180
1930.
193119321933.
1934.
50,080
50,680
51,250
51,840
52,490
260
260
250
250
260
49,820
50,420
51,000
51,590
52,230
45,480
42,400
38,940
38,760
40,890
19351936.
1937.
53,140
53,740
54,320
54,950
55,600
270
300
320
340
370
52,870
53,440
54,000
54,610
55,230
42,260 10,110 32,150 10,610
44,410 10,000 34,410 9,030
46,300 9,820 36,480 7,700
44,220
34,530 10,390
45,750 9,610 36,140 9,480
55,640
55,910
56,410
55,540
54,630
47,520
50,350
53,750
54,470
53,960
1940.
1941.
1942.
1943.
1944.
100,380
101,520
102,610
103,660
104,630
540
1,620
3,970
64,560 9,020
66,040 11,410
1945.
1946.
1947.
105,530
106,520
107,608
1947.
1948.
1949.
107,608
108,632
109,773
61,758
19501951.
1952.
1953.
1954.
1955.
1956.
1957.
19581959.
10,340
10,290
10,170
10,090
9,900
9,540
9,100
9,250
9,080
8,950
1,550
35,140 4,340
32,110 8,020
28,770 12,060
28,670 12,830
30,990 11,340
37,980
41,250
44,500
45,390
45,010
8,120
5,560
2,660
1,070
670
56.0
56.7
58.8
62.3
63.1
65,300 11,440 53,860 52,820
60,970 3,450 57,520 55,250
61,758 1,590 60,168 58,027
8,580 44,240
8,320 46,930
8,266 49,761
1,040
2,270
2,142
61.9
57.2
57.4
63,721
1,590 60,168 57,812
1,456 61,442 59,117
1,616 62,105 58,423
8,256 49,557
7,960 51,156
8,017 50,406
2,356
2,325
3,682
57.4
57.9
58.0
110,929
112,075
113,270
115,094
116,219
64,749
65,983
66,560
67,362
67,818
1,650
3,099
3,594
3,547
3,350
62,884
62,966
63,815
64,468
59,748
60,784
61,035
61,945
60,890
7,497
7,048
6,792
6,555
6,495
52,251
53,736
54,243
55,390
54,395
3,351
2,099
1,932
1,870
3,578
58.4
58.9
58.8
58.5
58.4
117,388
118,734
120,445
121,950
123,366
70,387
70,744
71,284
71,946
3,048
2,857
2,798
2,637
2,552
65,848
67,530
67,946
68,647
62,944
64,708
65,011
63,966
65,581
6,718
6,572
6,222
5,844
5,836
56,225
58,135
58,789
58,122
59,745
2,904
2,822
2,936
4,681
3,813
58.7
59.3
58.7
58.5
58.3
124,878
72,820
2,514 70,306 66,392
5,696 60,697
3,913
58.3
125,368
127,852
130,081
130,081
132,124
134,143
73,126
74,175
74,840
74,681
75.712
76,971
2,514
2,572
2,827
2,827
2,737
2,738
5,723
5,463
5,259
5,190
4,946
4,761
60,958
61,333
62,744
62,657
63,863
65,596
3,931
4,806
4,014
4,007
4,166
3,876
58.3
58.0
57.5
57.4
57.3
57.4
136,241
138,385
78,357
80,164
2,722 75,635 72,179
3,123 77,041 74,065
4,585 67,594
4,206
3,456
2,976
57.5
57.9
1965: J a n . . .
Feb...
Mar..
Apr...
May..
June..
135,302
135,469
135,651
135,812
135,982
136,160
75.699
76,418
76,612
77,307
78,425
80,683
2,707
2,704
2,703
2,686
2,684
2,680
72,992
73,714
73,909
74,621
75,741
78,003
68,996
69,496
70,169
71,070
72,407
73,716
3,739
3,803
3.989
4,473
5,128
5,622
65,257
65,694
66,180
66,597
67,278
68,094
3,996
4,218
3,740
3,552
3,335
4,287
55.9
56.4
56.5
56.9
57.7
59.3
July..
Aug..
Sept..
Oct—
Nov..
Dec...
136,252
136,473
136,670
136,862
137,043
137,226
81,150
80,163
78,044
78.713
78,598
78,477
2,693
2,693
2,723
2,760
2,795
2,841
78,457
77,470
75,321
75,953
75,803
75,636
74,854
74,212
72,446
73,196
72,837
72,749
5,626
5,136
4,778
4,954
4,128
3,645
69,228
69,077
67,668
68,242
68,709
69,103
3,602
3,258
2,875
2,757
2,966
2,888
59.6
58.7
57.1
57.5
57.4
57.2
56,180
57,530
New definitions 2
1960
Including Alaska
Hawaii
1960
1961
19623
1962
1963
1964
and
1965.
1966 _
70,612
71,603
72,013
71,854
72,975
74,233
See footnotes at end of table.
236
66,681
66,796
68,000
67,846
68,809
70,357
Unemployment
as percent of
civilian
labor
force
TABLE B-20.—Noninstitutional population and the labor force, 7929-66—Continued
Civilian labor force
Year or month
Noninstitutional
population »
Total
labor
force
(includ- Armed
forces1
ing
Total
armed1
forces)
Total
labor
force as
percent
of nonUnem- instituNon- ploy-2 tional
agri- ment
popucullation
tural
Employment 2
Total
Agricultural
Thousands of persons 14 years of age and over
Unemployment
as percent of
civilian
labor
force
Percent
77,409
77,632
78,034
78,914
79,751
82,700
2,890
2,924
2,974
3,008
3,045
3,099
74,519
74,708
75,060
75,906
76,706
79,601
71,229
71,551
72,023
73,105
73,764
75,731
3,577
3,612
3.780
4,204
4,292
5,187
67,652
67,939
68,244
68,900
69,472
70,543
3,290
3,158
3,037
2,802
2,942
3,870
56.3
56.4
56.7
57.2
57.7
59.8
4.4
4.2
4.0
3.7
3.8
4.9
82,771
82,468
80,052
139,041 80,530
139,237 80,968
139,429 80,734
3,135
3,178
3,229
3,279
3,322
3,390
79,636
79,290
76,823
77,251
77,646
77,344
76,411
76,369
74,251
74,730
75.006
74,612
5,010
4,707
4,373
4,301
3,969
3,465
71,402
71,662
69,878
70,430
71,036
71,147
3,225
2,921
2,573
2,521
2,640
2,732
59.5
57.7
57.9
58.2
57.9
4.0
3.7
3.3
3.3
3.4
3.5
1966: Jan..
Feb.
Mar.
Apr.
May
June.
137,394
137,562
137,741
137,908
138,100
138,275
July.
Aug_
Sept.
Oct..
Nov.
Dec.
138,444
138,648
Seasonally adjusted
1965: Jan
Feb
Mar
Apr
May
June
77,588
77,770
77,722
77,988
77,990
78,332
74,881
75,066
75,019
75,302
75,306
75,652
71,252
71,326
71,483
71,688
71,816
72,085
4,533
4,608
4,588
4,769
4,869
4,651
66,719
66,718
66,895
66,919
66,947
67,434
3,629
3,740
3,
3,614
3,490
3,567
4.8
5.0
4.7
4.8
4.6
4.7
July
Aug
Sept.
Oct
Nov
Dec
78,747
78,465
78,334
78,606
78,916
79,408
76,054
75, 772
75,611
75,846
76, 111
76,567
72,618
72,387
72,297
72,561
72,914
73,441
4,639
4,572
4,418
4,551
4,273
4,486
67,979
67,815
67,879
68,010
68,641
68,955
3,436
3,385
3,314
3,285
3,197
3,126
4.5
4.5
4.4
4.3
4.2
4.1
1966: Jan
Feb
Mar
Apr
May
June
79,644
79,279
79, 315
79, 674
79, 313
80,185
3,039
2,834
2,906
2,867
3,037
3,089
4.0
3.7
3.8
3.7
4.0
4.0
July
Aug
Sept
Oct
Nov
Dec
80, 233
80, 549
80, 342
80, 414
81, 249
81,579
4,429 69, 286
4,442 69, 079
072
4,r 69,
317
4,482 69,
69,155
4,076 69,759
4,238
77,098 74, 072 4,144 69,928
77,371 74,338 4,158 70,180
77,113 74,165 4,049 70,116
77,135 74,163 3,971 70,192
77,927 75, 076 4,108 70.968
78,189 75,226 4,254 70,972
3,026
3,033
2,948
2,972
2,851
2,963
3.9
3.9
3.8
3.9
3.7
3.8
76,754
76,355
76, 341
76,666
76,268
77, 086
73,715
73, 521
73, 435
73,799
73,231
73,997
1
Data for 1940-52 revised to include about 150,000 members of the armed forces who were outside the
United States in 1940 and who were, therefore, not enumerated in the 1940 Census and were excluded from
the 1940-52 estimates.
23 See Note.
Averages adjusted by Council of Economic Advisers for comparison with preceding data. See Note.
NOTE.—Civilian labor force data beginning with January 1963 are based on a 357-area sample. For
January 1960-December 1962 on a 333-area sample; for May 1956-December 1959 on a 330-area sample; for
January 1954-April 1956 on a 230-area sample; for 1946-53 on a 68-area sample; for 1940-45 on a smaller sample;
and for 1929-39 on sources other than direct enumeration.
Effective January 1957, persons on layoff with definite instructions to return to work within 30 days of
layoff and persons waiting to start new wage and salary jobs within the following 30 days are classified
as unemployed. Such persons had previously been classified as employed (with a job but not at work).
The combined total of the groups changing classification has averaged about 200,000 to 300,000 a month in
recent years. The small number of persons in school during the survey week and waiting to start new
jobs are classified as not in the labor force instead of employed, as formerly. Persons waiting to open new
businesses or start new farms within 30 days continue to be classified as employed.
Beginning July 1955, monthly data are for the calendar week ending nearest the 15th of the month; previously, for week containing the 8th. Annual data are averages of monthly figures.
Beginning April 1962, estimating procedures make use of 1960 Census data; for January 1953-March 1962
1950 Census data were used, and 1940-52,1940 Census data. For the effects of this change on the historical
comparability of the data, see Employment and Earnings, May 1962, p. xiv.
Source: Department of Labor, Bureau of Labor Statistics (except as noted).
240-782 O—67-
-16
237
TABLE B-21.—Civilian employment and unemployment, by sex and age, 1947-66
[Thousands of persons 14 years of age and over]
Employment
Males
Unemployment
Females
Males
Females
Year or month
Total
20 Total
20
20
20
14-19
14-19 years
14-19 years
14-19 years
Total years
Total years and Total years years
and T o t a l years and
and
New definitions *
16,259 1,, 905 14,354
16,848 1,
, 913 14,935
16; 947 l| 812 15,137
17,584 1,761 15,824
18,421 1,85116,570
18,798 1,.; 840
" ""16,958
18, 979 1, 813 17,164
18,724 1,724 17,000
2,356 1,720
2,325 1,590
3,682 2,602
298 1,422
637
286 1,304
735
382 2,219 1,083
162
170
241
475
565
841
3,351
2,099
1,932
1,870
3,578
2,280
1,250
1,217
1,228
2,372
359
220
237
209
338
1,922 1,073
1,029
851
980
715
642
1,019
2,035 1,207
220
162
157
133
210
854
689
559
510
997
1950.
1951.
1952.
1953.
1954.
57, 812 41,552 2,776 38,776
59,117 42,268 2,887 39,381
58,423 41,473 2,672 38; 803
1,162 2,769 39,395
59,748 42,
60,784 42,!,362 2, 738 39,626
2,659 39,578
61,035 42,237
.
"!, 671 40,295
61,945 42,966 2,
60.890 42,165 2, 530 39,634
1955.
1956.
1957.
1958.
1959.
62,944 43,152 2,626 40, 527 19,790 1,788 18,002
2 ,783
— 41,216 20, 707 1,940 18, 767
64,708 43,999 2,
2,:, 750 41,239
21,021 1,970 19,050
41,
65,011 43,990 2,750
63j 966 43,042 2,631
40,410 20,924
1,881
!,63140,
,
. . . 19,043
!,821 41,268 21,492 1,968 19,523
65,581 44,089 2,
2,904
2,822
2,936
4,681
3,813
1,889
1,757
1,893
3,155
2,473
308
315
351
473
451
1,580
1,442
1,541
2,680
2,022
1,016
1,067
1,043
1,526
1,340
194
823
236
832
222
820
284 1,242
276 1,064
1960 2
1961.
1962 3
1963.
1964.
44,485 2,941 41,543 22,196 2,09120,104
1 2Q5
66,796 44,318 2,976 41,342 22,478 2,181 20,
22,954 2,262 20,
67,846 44,892
3, ™ 41,815
"
,892 3,077
""' 3,
1,079 42,252 23,479 2,223 21,257
68,809 45,330
70,357 46,139 3,1,253 42,886 24,218 2,316 21;,903
3,931
4,806
4,007
4,166
3,876
2,541
3,060
2,488
2,537
2,271
480
542
472
566
553
2,058
2,518
2,016
1,971
1,718
1,390
1,747
1,519
1,629
1,605
310
379
344
413
409
1,078
1,366
1,176
1,216
1,195
1965.
1966.
72,179 47,034 3,612 43,422 25,145 2,515 22,631 3,456
74,065 47, 639 3,971 43, 66' 26, 426 2,919 23, 507 2,976 1,622
545 1,436 1,476
503 1,119 1,354
420
435
1.057
919
,057
,187
,082
,069
,026
,152
1947..
19481949.
Seasonally adjusted
1965: Jan...
Feb..
Mar..
Apr..
May.
June..
July....
Aug
Sept
Oct
Nov
Dec
1966: Jan...
Feb..
Mar.
Apr_.
MayJuneJuly..
Aug..
Sept..
Oct—
Nov..
Dec-.
71, 252 46,585 3, 274 43, 31124,667 2, 280 22,387 3,629
326 46, 714 3, 334 43,380 24,612 2, 300 22, 3123,740
7i; 483 46,823 3,400 43,423 24,660 2, 324 22, 3363,536
71,688 46,968 3,529 43,439 24,720 2, 360 22, 360 3,614
71,816 47, 054 3,551 43, 503 24, 762 2,412 22,3503,490
72, 085 46,962 3,484 43,478 25,123 2,409 22,714 3,567
2,106
2,099
2,012
2,070
2,063
2,009
528
504
497
539
570
554
1,578
1,595
1, 515
1,531
1,493
1,455
1,523
1,641
1,524
1,544
1,427
1,558
466
454
442
475
401
406
72,618 47, 228 3,736 43,492 25,390 2, 56: 22,823 3,436
72, 387 47,130 3,677 43,453 25,257 2, 53122,726 3,385
72,297 46,917 3,632 43, 285 25, 380 2,609 22, 771 3,314
; 051 3,817 43,234 25,510 2, 720 22,7903,285
72, 561 47,
72,914 47,185 3,855 43, 330 25,729 2,792 22,937 3,197
73,44147, 500 3,921 43, 579 25,941 2, 784 23,157 3,126
2,013
1,952
1 r~
1,737
1,729
590
540
528
594
502
557
1,423
1,412
1,361
1,305
1,235
1,172
1,423
1,433
1,425
1^460
1,397
385 1,038
380 1,053
1,003
3971 989
430 1,030
433 964
73,715 47,624 4, 020 43,604 26, 0912,863 23, 228
73,521 47, f
73,435 47,1
73,799 47,814 4, 042 43,772 25,985 2,852 23,133
73,23147,344 3,747
*"
73,997 47,754 4,133 43; 621 26; 243 2,957
2,834
2,906
2,867
3,037
3,089
1,701
1,589
1,651
1,549
1,611
1,693
517
446
493
485
547
534
1,184
1,143
1,158
1,064
1,064
1,159
l,;
1,:
1,255
1,318
1,426
1,396
421
374
401
451
465
456
917
871
854
867
961
940
74, 072 47,651 4, 066 43,585 26,421 2,996 23,425
74,338 47, 766 4, 075 43,691 26,572 3, 045 23,527
74,165 47,345 3,762 43,583 26,820 2,838 23,982 2,948
74,163 47,374 3,834 43,540 26,789 2,921
2,972
75, 076 47, 702 4, 031
43,671 27,374 3,080 24,294 2,851
75, 226 47,911 4', 019 43,892 27,315 3, 064 24,251 2,963
1,613
1,588
1,553
1,550
1,609
510
471
505
483
468
531
1,159
1,142
1,083
1,070
1,082
1,078
1,357
1,420
1,360
1,419
1,301
1,354
469
466
412
427
414
384
954
948
992
887
970
1 See Note, Table B-20, for explanation of differences between the old and new definitions.
Beginning 1960, data for Alaska and Hawaii included.
3
Beginning April 1962, not comparable with preceding data; see Note, Table B-20.
Note.—See Note, Table B-20, for information on area sample used and reporting periods.
Source: Department of Labor, Bureau of Labor Statistics.
2
238
TABLE B-22.—Selected unemployment rates, 7948-66
[Percent]
By sex and age
Year or month
All
workers
Both
14-19
years
By race
By selected groups
ExpeMen, Womrienced Maren, 20
20
Nonyears years White white wage
ried J
and
and
and
salary men
over
workers
Labor
force
time lost
through
unemFull- Blueploytime collar
ment
work- work- and parters 2 ers 3
time
employment 4
New definitions
1948
1949
3.8
5.9
8.7
12.2
3.2
5.4
3.6
5.3
1960
1951
1952
1953
1954
5.3
3.3
3.1
2.9
5.6
11.3
7.7
8.0
7.1
11.4
4.7
2.5
2.4
2.5
4.9
5.1
4.0
3.2
2.9
5.5
5.0
1955
1956
1957
1958
1959
4.4
4.2
4.3
6.8
5.5
10.2
10.4
10.8
14.4
13.2
3.8
3.4
3.6
6.2
4.7
4.4
4.2
4.1
6.1
5.2
3.9
3.7
3.9
6.1
4.9
8.7
8.4
8.0
12.6
10.7
5.6
6.7
5.6
5.7
5.2
13.6
15.2
13.3
15.6
14.7
4.7
5.7
4.6
4.5
3.9
5.1
6.3
5.4
5.4
5.2
5.0
6.0
4.9
5.1
4.6
4.6
3.9
13.6
12.0
3.2
2.5
4.5
4.1
3.4
1960s
1961
1962 6
1963
1964
1965
1966
_
4.2
6.7
6.0
3.7
3.3
3.2
6.0
3.4
5.4
4.6
1.5
1.4
1.7
4.0
5.0
2.6
2.5
4.8
4.4
4.5
7.2
5.6
2.8
2.6
2.8
5.1
3.6
3.8
3.7
4.0
7.2
10.2
12.5
11.0
10.9
9.8
5.7
6.8
5.5
5.5
5.0
3.7
4.6
3.6
3.4
2.8
8.3
7.5
4.2
3.5
5.2
4.2
8.0
7.2
3.9
3.6
3.4
7.2
5.8
5.1
6.2
10.1
7.6
5.1
5.3
8.1
6.6
5.5
4.9
7.8
9.2
7.4
7.2
6.3
6.7
8.0
6.7
<6.4
5.8
2.4
1.9
4.3
3.5
5.3
4.2
5.0
4.2
6.7
Seasonally adjusted
4.8
5.0
4.7
4.8
4.6
4.7
15.2
14.5
14.1
14.7
14.0
14.0
3.5
3.5
3.4
3.4
3.3
3.2
4.5
5.1
4.6
4.6
4.4
4.8
4.3
4.5
4.2
4.4
4.2
4.3
9.0
9.2
8.6
8.2
7.8
8.3
4.5
4.6
4.4
4.5
4.4
4.5
2.7
2.6
2.5
2.5
2.5
2.4
4.5
4.6
4.4
4.4
4.4
4.5
5.6
5.6
5.3
5.7
5.4
5.6
5.3
5.4
5.2
5.3
5.2
5.3
4.5
13.4
12.9
13.2
13.2
12.3
12.9
3.2
4.4
4.4
4.2
4.2
4.3
4.0
8.1
7.9
8.1
7.5
2.2
2.1
2.0
1.8
4.3
4.2
4.1
3.8
3.8
3.7
5.5
3.0
2.9
2.8
2.6
4.1
4.2
4.0
4.0
3.8
3.7
2.3
3.1
4.0
4.1
3.9
3.9
3.7
3.7
8.9
4.4
4.3
4.2
4.1
5.1
4.8
4.6
4.4
5.2
5.1
4.7
4.6
4.5
4.4
May".
June.
4.0
3.7
3.8
3.7
4.0
4.0
12.0
10.9
11.7
12.0
13.4
12.3
2.6
2.6
2.6
2.4
2.4
2.6
3.8
3.6
3.6
3.6
4.0
3.9
3.5
3.3
3.4
3.4
3.5
3.5
7.0
7.0
7.2
7.0
7.6
7.9
3.5
3.3
3.5
3.4
3.7
3.7
1.9
1.9
1.9
1.8
1.8
1.9
3.5
3.3
3.4
3.4
3.7
3.8
4.2
4.0
4.2
4.0
4.2
4.4
4.3
4.0
4.1
4.1
4.4
4.8
July.
Aug.
Sept.
Oct.
Nov.
Dec.
3.9
3.9
3.8
3.9
3.7
3.8
12.2
11.6
12.2
11.9
11.0
11.4
2.6
2.5
2.4
2.4
2.4
2.4
3.7
3.9
3.8
4.0
3.5
3.8
3.4
3.4
3.3
3.4
3.2
3.3
7.9
8.2
7.8
7.6
7.4
7.6
3.5
3.7
3.6
3.6
3.4
3.5
2.0
2.0
1.9
1.9
1.7
1.7
3.7
3.5
3.4
3.4
3.4
3.4
4.6
4.5
4.1
4.1
4.3
4.2
4.6
4.3
4.2
4.1
3.9
4.0
1965: Jan..
Feb.
Mar.
Apr.
May.
June
July.
Aug.
Sept.
Oct.
Nov.
Dec.
1966: Jan..
Feb.
Mar.
4.5
7.7
2.6
5.0
1 Married men living with their wives. Data for 1949 and 1951-54 are for April; 1950, for March.
Data prior to 1955 have not been adjusted to reflect the change in the definition of employment and unemployment adopted in January 1957. See Note, Table B-20.
2
Data for 1949-61 are for May.
3 Includes craftsmen, operatives, and nonfarm laborers. Data for 1948-57 are based on months, January,
April,
July, and October.
4
Beginning in 1963, this series not strictly comparable with preceding data. Under the current concept, the percent of labor force time lost assumes that unemployed persons looking for full-time work lost
37.5 hours, unemployed persons looking for part-time work lost the average hours worked by voluntary
part-time employees, and those on part-time for economic reasons lost difference between 37.5 hours and
actual number of hours worked.
5
Beginning 1960, data for Alaska and Hawaii included.
6 Not comparable with preceding data. See Note, Table B-20.
Source: Department of Labor, Bureau of Labor Statistics.
239
TABLE B-23.—Unemployment by duration, 1947-66
Total unemployment
Year or month
Duration of unemployment
4 weeks
and under
5-14
weeks
15-26
weeks
Over
26 w e e k s
Thousands of persons 14 years of age and over
New definitions
1947 - .
1948
1949
1950
1951
1952 .
1953
1954
_
__
1955
1956
1957
1958
1959
_
-__
- _
__
19601
1961
1962 2
1963
1964
_
-
1965
1966
2,356
2,325
3,682
1,255
1,349
1,804
704
669
1,195
234
193
427
164
116
256
3,351
2,099
1,932
1,870
3,578
1,515
1,223
1,183
1,178
1,651
1,055
574
517
482
1,115
425
166
148
132
495
357
137
84
79
317
2,904
2,822
2,936
4,681
3,813
1,387
1,485
1,485
1,833
1,658
815
805
890
,397
]1,113
367
301
321
785
469
336
232
239
667
571
3,931
4,806
4,007
4,166
3,876
1,798
1,897
1,754
1,847
1,787
,176
1,375
1,134
,231
,116
502
728
534
454
804
585
491
482
3,456
2,976
1,718
1,636
983
804
404
351
295
241
Seasonally
535
553
adjusted
3,629
3,740
3,536
3,614
3,490
3,567
1,695
1,776
1,741
1,818
1,829
1,788
1.044
L, 030
421
403
479
439
408
361
1029
1,046
1.015
443
370
377
419
338
360
3,436
3,385
3,314
3,285
3,197
3,126
1,791
1,722
1,703
1,562
1,618
1,532
980
980
858
992
355
330
397
384
350
320
344
347
903
869
334
355
310
305
1966: Jan
Feb
Mar
Apr
May
June
3,039
2,834
2,906
2,867
3,037
3,089
1,548
1,514
1,543
1,625
1,789
1,816
738
354
307
721
787
670
856
315
319
343
261
264
269
260
275
July
Aug
Sept
Oct
Nov
Dec
3,026
3,033
2,948
2,972
2,851
2,963
1,710
1,666
1,626
1,544
1,515
1,626
1965: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
- -
-
-
-.
- - -
- -
815
251
225
912
220
215
927
807
898
803
766
249
298
292
286
273
202
201
228
197
228
1 Beginning January 1960, data for Alaska and Hawaii included.
Beginning April 1962, not comparable with preceding data; see Note, Table B-20.
NOTE.—See Note, Table B-20, for information on area sample used and reporting periods.
Source: Department of Labor, Bureau of Labor Statistics.
2
240
T A B L E B-24.—Unemployment insurance programs, selected data,
All programs
Year or month
Insured Total
Cov- unem- benefits
ploypaid
ered
ment
(milemploy- (weekly lions
ment * aver- of dolage) 2 3 lars) 2 *
Thousands
194019411942194319441945194619471948194919501951195219531954..
19551956—
19571958-
1960—
1961
1962
1963
1964
1965
1966 *
1965: Jan
Feb....
Mar....
Apr
May....
June. _.
July....
Aug
Sept...
Oct...
Nov
Dec—
1966: Jan
Feb...
Mar...
Apr
May...
June
July.
Aug.
Sept.
Oct..
Nov.
7940-66
State programs
[nsured
unem- Initial
ploy- claims
ment8
Exhaustions 5
Weekly average,
thousands
1,331
1,282
24,291
534.7
842
28,136
358.8
814
30,819
661
350.4
649
32,419
149
80.5
147
31,714
111
67.2
105
30,087
720
574.9
589
31,856
2,804 1,878.5
1,295
33,876
1,805 ,785.0
1,009
34,646
1,468 , 328.7
1,002
33,098
2,479 2,269.8
1,979
34,308
1,605 , 467. 6
1,503
36,334
1.000
862.9
969
37,006
1,069 , 043.5
1,024
38,072
1,065 1, 050. 6
995
36,622
2,048 2,291.8
1,865
40, 018 1,395 1, 560. 2 1,254
42, 751 1,318 1,540. 6 1,212
43,436
1,567 1,913. 0 1,450
44,411
3,269 4,209.2
2,509
45,728
2,099 " 803.0
1,682
2,067 3,022.7
46,334
1,906
2,994 4,358.2
46,266
2,290
1,946 3,160. 0
47,776
1,783
48,434 ? 1,973 3, 025.9 '1,806
1,753 2, 749. 2
49,637
1,605
1,450 2,343.7
51,580
1,328
1,123 1,900.0
53,700
1,061
2,135
49,321
1,996
273.0
2,066
49,319
265.8
1,932
1,863
49,838
294.9
1,718
1,622
242.7
50,640
1,470
1,316
179.2
51,186
1,179
1,182
169.1
52,087
1,059
1,262
1,139
160.6
52,280
1,235
160.7
52,611
1,120
1,089
150.3
52,713
981
1,030
128.2
52,716
933
1,133
143.0
52,819
1,042
1,396
184.7
53,431
1,308
1,644
1,739
226.5
"51,935
1,679
230.2
*>52,127
1,590
240.0
*52,894
1,381
1,301
166.4
*>53,797
1,112
1,044
136.1
54, 320
916
862
123.4
55,543
842
793
1,001
947
121.0
980
152.0
928
802
114.3
754
799
100.4
752
955
122.6
903
171.0
1,312
1,253
214
164
122
36
29
116
189
187
210
322
236
208
215
218
303
226
226
268
370
281
331
350
302
7 298
268
232
204
355
269
222
220
186
191
252
215
173
189
225
290
329
238
171
166
152
156
249
173
145
166
208
299
Insured unem- Benefits paid
ployment as percent of covered
employment
Total Average
(mil- weekly
lions of check
Unad- Seasonad- dollars) (doljusted ally
0)
justed
lars) •
Percent
50
30
21
4
2
5
38
24
20
37
36
16
18
15
34
25
20
23
50
33
31
46
32
30
26
21
15
25
25
25
27
24
22
19
18
17
16
15
17
19
19
18
19
17
15
14
12
11
12
12
13
5.6
3.0
2.2
.5
.4
2.1
4.3
3.1
3.0
6.2
4.6
2.8
2.9
2.8
5.2
3.5
3.2
3.6
6.4
4.4
4.8
5.6
4.4
4.3
3.8
3.0
2.3
4.6
4.5
4.0
3.4
2.7
2.4
2.6
2.5
2.2
2.0
2.3
3.0
3.7
3.6
2.9
2.3
1.9
1.8
2.1
2.0
1.6
1.6
1.9
2.7
4
8.8
3.2
8.2
S.O
S.O
S.O
3.1
2.9
2.7
2.7
2.7
2.7
2.6
2.8
2.1
2.1
2.1
II
518.7
344.3
344.1
79.6
62.4
445.9
,094.9
775.1
789.9
, 736. 0
, 373.1
840.4
998.2
962.2
2, 026.9
,350.3
, 380.7
, 733.9
3, 512. 7
" 279.0
2,726.7
3,422. 7
2, 675. 4
2,774.7
,522.1
2,166. 0
1,780.0
252.1
245.7
273.4
224.9
165.7
156.3
149.5
148.0
138.6
117.8
132.2
172.1
212.7
217.2
225.5
155.5
126.1
114.4
113.8
143.1
106.5
93.7
114.8
162.5
10.56
11.06
12.66
13.84
15.90
18.77
18.50
17.83
19.03
20.48
20.76
21.09
22.79
23.58
24.93
25.04
27.02
28.17
30.58
30.41
32.87
33.80
34.56
35.28
35.96
37.19
39.72
37.18
37.39
37.41
37.16
36.40
36.07
36.40
36.58
37.23
37.32
38.08
38.81
38.72
39.05
40.65
39.84
2.1
40.57
2.2
41.00
2.4
1 Includes persons under the State, UCFE (Federal employee, effective January 1955), and R R B (Railroad Retirement Board) programs. Beginning October 1958, also includes the UCX program (unemployment
compensation for ex-servicemen).
2
Includes State, U C F E , R R , UCX, UCV (unemployment compensation for veterans, October 1952January 1960), and SRA (Servicemen's Readjustment Act, September 1944-September 1951) programs.
Also includes Federal and State programs for temporary extension of benefits from June 1958 through June
1962, expiration date of program.
3
Covered workers who have completed at least 1 week of unemployment.
4
Includes benefits paid under extended duration provisions of State laws, beginning June 1958. Annual
data
are net amounts and monthly data are gross amounts.
8
Individuals receiving final payments in benefit year.
8
For total unemployment only.
7
Programs include Puerto Rican sugarcane workers for initial claims and insured unemployment beginning July 1963.
8 Preliminary; June 1966 is latest month for which data are available for all programs combined.
Workers covered by State programs account for about 87 percent of the total.
NOTE.—Data for Alaska and Hawaii included for all periods and for Puerto Rico beginning January 1961.
Source: Department of Labor, Bureau of Employment Security.
241
TABLE B-25.—Number of wage and salary workers in nonagi'{cultural establishments, 7929-66l
[Thousands of employees]
Year or
month
Manufacturing
Total
wage
and
Nonsalary
Dura- durawork- Total
ble
ble
ers
goods goods
Mining
TransFiServWhole-1 nance,
Con- portaice
tion
sale insur- and
tract
and
and
con- pubance,
misretail and
struccellic
trade
tion
real
laneutiliestate
ous
ties
Government
Federal
State
and
local
1929
31,339 10,7021
l,087|
1,497
3,9161 6,123
1,509
3,440
533
2,532
1930.
19311932 _
1933.
1934.
29,424
26,649
23,628
23,711
25,953
9,562
8,170|
6,931
7,397
8,501
'873
731
744
883
1,372
1,214
970
809
862
3,685
3,254
2,816
2,672
2,750
5,797
5,284
4,683|
4,755[
5,281
,475
,407
,341
,295
,319
3,376
3,183
2,931
2,873
3,0581
526
560
559
565
652
2,622
2,704
2,666
2,601
2,647
1935
1936
1937
27,053
29| 082
31,026
29,209
30,618
9,827
10,794
9,440
10,278
5,564
912
1,145
1,112
1,055
1,150
2,786
2,973
3,134
2,863
2,936
5,431
5,809
6,265
6,179
6,426
3,142
4,715
897
946
1,015
891
854
,432
,425
,462
3,518
3,473
3,517
753
826
833
829
905
2,728
2,842
2,923
3,054
3,090
1940.
1941.
1942.
1943.
1944.
32,376
36,554
40,1251
42,452
41,883'
10,985 5,363
13,192 6,968
15,280 8,823
17,602 11,084
17,328 10,856
5,622
6,225
6,458
6,518
6,472
925
957
992
925
892
1,294
1,790
2,170
1,567
1,094
3,038
3,274
3,460
3,647
3,829
6,750
7,210
7,118
6,982
7,058
,502
,549
,538
,502
,476
996
3,681
3,921 1,340
4,084 2,213
4,148 2,905
4,163| 2,928
3,206
3,320
3,270
3,174
3,116
1945.
1946.
1947.
1948.
1949-
40,394]
41,674
43,881
44,891
43,778
15,524
14,703
15,545
15,582
14,441
9,074
7,742
8,385
8,326
7,489
6,450
6,962
7,159
7,256
6,953
862
955
994
1,132
1,661
1,982
2,169
2,165
3,906
4,061
4,1661
4,189
4,001
7,314
8,376
8,955
9,272
9,264
,497,
,697
,754
,829
,857
4,241
4,719
5,050
5,206
5,264
2,808| 3,137
2,254 3,341
3,582
3,787
1,908 3,948
19501951.
1952.
1953.
1954.
45,222
47,849
48,825
50,232
49,022
15,241 8,094
16,393
16,6321
17,549 10; 110
16,314 9,129
7,147
7,304
7,284
7,438
7,185
901
2,333
2,603
2,634
866
791
2,612
4,034
4,226 9,742
4,248 10,004
4,290 10,247
4,084 10,235
,919
,991
2,069
2,146
2,234
5,382
5,576
5,730
5,867
6,002
1,928
2,302
2,420
2,305
2,188
4,098
4,087
4,188
4,340
4,563
1955.
1956 _
1957.
1958.
1959 _
50,675
52,408
52,894
51,363
53,313
16,882
17,243
17,174
15,945|
16,675
9,541
9,834
9,856
8,830
9,373
7,340
7,409
7,319
7,116
7,303
792]
822
828|
751,
732|
2,802
2,999
2,923
2,778
2,960
4,141 10,535
4,244 10,858
4,241 10,886
3,976 10,750
4, Oil' 11,127
2,335
2,429
2,477
2,519
2,594
6,274
6,536
6,749
6,806
7,130
2,187
2,209
2,217
2,191
2,233
4,727
5,069
I960..
1961. .
1962..
1963..
1964..
54,234
54,042
55,596
56,702
58,332
16,796
16,326
16,853
16,995
17,274
9,459
9,070
9,480
9,616!
9,816
7,336
7,256
7,373
7,380
7,458
712
672
650
635
634
2,885
2,816
2,902
2,963
3,050
4,004
3,903
3,906
3,903
3,951
11,391
11,337
11,566
11,778
12,160
2,669
2,731
2,800
2,877
2,957
7,423
7,664
8,028
8,325
8,709
2,270
2,279
2,340
2,358
2,348
6,315
6,550
6,868
7,249
1965. .
1966 P.
60,770 18,032 10,386
63,863 19,0841 11,190
7,645
7,895
632
628
3,181
3,281
4,033 12,683
4,136 13,219
3, 019!
3,085
2,378
2,566
7,713
9,581
See footnotes at end of table.
242
5', 648
5,850
TABLE B-25.—Number
Year or
month
of wage and salary workers in nonagricultural establishments,
1929-661—Continued
[Thousands of employees]
Manufacturing
TransTotal
Con- portawage
tion
tract
and
and
Non- Minconing strucsalary Total Durapubdurable
worklic
tion
ble
goods goods
ers
utilities
Wholesale
and
retail
trade
Fi-
Serv- Government
nance, ice
insur- and
ance, misand
celreal laneestate ous
Federal
State
and
local
Seasonally adjusted
1964: Jan
Feb
Mar
Apr
May
June
July....
Aug
Sept
Oct
Nov....
Dec
1965: Jan
Feb
Mar
May"."." I
June
July....
Aug
Sept
Oct
Nov....
Dec
1966: Jan
Feb
Mar
Apr
May
June
July....
Aug
Sept
Oct
Nov *..Dec*...
57,336
57,676
57,800
57,942
58,061
58,211
17,085
17, 111
17,159
17,183
17,197
17,231
9,692
9,700
9,752
9,764
9,758
9,776
7,393
7,411
7,407
7,419
7,439
7,455
630
631
632
633
630
638
2,865
3,054
3,056
3,030
3,029
3,049
3,916
3,924
3,920
3,941
3,942
3,936
11,952
12,006
12,009
12,047
12,085
12,136
2,924
2,933
2,943
2,947
2,952
2,957
8,534
8,569
8,591
8,631
8,675
8,703
2,342
2,340
2,339
2,341
2,341
2,325
7,088
7,108
7,151
7,189
7,210
7,236
58,369
58,521
58,747
58,649
59,118
59,387
17,268 9,816
17,325 9,857
17,456 9,971
17,198 9,704
17,513 9,978
17,600 10,052
7,452
7,468
7,485
7,494
7,535
7,548
638
633
633
636
638
638
3,057
3,055
3,047
3,073
3,110
3,147
3,952
3,960
3,967
3,970
3,979
4,008
12,192
12,229
12,247
12,286
12,307
12,364
2,964
2,963
2,971
2,974
2,980
2,980
8,742
8,765
8,795
8,818
8,832
8,862
2,322
2,328
2,325
2,334
2,352
2,351
7,234
7,263
7,306
7,360
7,407
7,437
59,489
59,777
60,072
60,152
60,363
60,623
17,667
17,721
17,807
17,850
17,885
17,990
10,099
10,142
10,203
10,250
10,277
10,348
7,568
7,579
7,604
7,600
7,608
7,642
636
636
635
633
630
630
3,141
3,177
3,205
3,118
3,157
3,169
3,942
3,984
4,015
4,013
4,025
4,033
12,420
12,485
12,530
12,579
12,623
12,670
2,985
2,993
2,999
3,002
3,011
3,016
8,889
8,929
8,976
9,005
9,042
9,060
2,342
2,338
2,342
2,344
2,347
2,355
7,467
7,514
7,563
7,608
7,643
7,700
60,841
61,021
61,180
61,437
61,864
62,241
18,069
18,129
18,157
18,242
18,392
18,492
10,418
10,483
10,508
10,550
10,641
10,725
7,651
7,646
7,649
7,692
7,751
7,767
635
631
622
627
631
633
3,132
3,162
3,168
3,186
3,234
3,334
4,036
4,050
4,064
4,071
4,080
4,083
12,714
12,717
12,765
12,809
12,880
12,941
3,021
3,030
3,036
3,041
3,045
3,049
9,123
9,152
9,180
9,226
9,282
9,329
2,374
2,379
2,378
2,386
2,400
2,397
7,737
7,771
7,810
7,849
7,920
7,983
62,469
62,811
63,247
63,350
63,517
63,983
18,566
18,722
18,840
18,923
19,002
19,167
10,805
10,911
11,007
11,065
11,122
11,220
7,761
7,811
7,833
7,858
7,880
7,947
635
634
637
595
628
632
3,318
3,323
3,419
3,333
3,238
3,300
4,091
4,105
4,109
4,114
4,132
4,143
13,009
13,045
13,085
13,128
13,164
13, 217
3,052
3,051
3,064
3,068
3,076
3,090
9,363
9,410
9,463
9,484
9,515
9,549
2,423
2,451
2,477
2,501
2,523
2,571
8,012
8,070
8,153
8,204
8,239
8,314
64,072
64,199
64,168
64,466
64,818
65,066
19,128
19,262
19,204
19,312
19,422
19,465
11,210
11,324
11,322
11,387
11,434
11,471
7,918
7,938
7,882
7,925
7,988
7,994
636
636
628
625
623
627
3,297
3,251
3,228
3,202
3,212
3,282
4,122
4,105
4,168
4,165
4,193
4,194
13,256
13,264
13,268
13,340
13,380
13,390
3,095
3,100
3,100
3,102
3.109
3,119
9,609
9,647
9,649
9,712
9,780
9,814
2,601
2,610
2,594
2,615
2,621
2,638
8,328
8,324
8,329
8,393
8,478
8,537
1
Includes all full- and part-time wage and salary workers in nonagricultural establishments who worked
during, or received pay for, any part of the pay period which includes the 12th of the month. Excludes
proprietors, self-employed persons, domestic servants, and unpaid family workers. Not comparable with
estimates of nonagricultural employment of the civilian labor force (Table B-20) which include proprietors,
self-employed persons, domestic servants, and unpaid family workers; which count persons as employed
when they are not at work because of industrial disputes, bad weather, etc.; and which are based on a
sample survey of households, whereas the estimates in this table are based on reports from employing
establishments.
NOTE.—Data are based on the" 1957 Standard Industrial Classification and March 1965 benchmark data.
Data for Alaska and Hawaii included beginning 1959.
Source: Department of Labor, Bureau of Labor Statistics.
243
TABLE B-26.—Average weekly hours of work in selected industries, 1929-66
Year or month
1929..
1930...
1931..
1932 _ .
1933..
1934..
1935..
1936..
1937. .
1938. -
ConManufacturing
tract
NonconDurable durable
strucTotal goods
goods tion
1966P...
44.2
42.1
40.5
38.3
38.1
34.6
36.6
39.2
38.6
35.6
37.7
38.1
40.6
43.1
45.0
45.2
43.5
40.3
40.4
40.0
39.1
40.5
40.6
40.7
40.5
39.6
40.7
40.4
39.8
39.2
40.3
39.7
39.8
40.4
40.5
40.7
41.2
41.4
32.5
34.7
33.8
37.2
40.9
39.9
34.9
37.9
39.2
42.0
45.0
46.5
46.5
44.0
40.4
40.5
40.4
39.4
41.1
41.5
41.5
41.2
40.1
41.3
41.0
40.3
39.5
40.7
40.1
40.3
40.9
41.1
41.4
42.0
42.1
1965: Jan
Feb....
Mar....
Apr
May...
June—.
July....
Aug.—
Sept—.
Oct
Nov....
Dec
1966: Jan
Feb....
Mar....
Apr
May...
JuneJuly..Aug...
Sept...
Oct....
Nov.
Dec *_.
41.1
41.2
41.3
41.0
41.2
41.0
41.0
41.1
41.0
41.2
41.4
41.3
41.4
41.5
41.5
41.5
41.5
41.3
41.0
41.4
41.5
41.3
41.3
41.0
42.1
42.0
42.2
41.8
42.0
41.9
41.9
41.8
41.7
42.1
42.2
42.2
42.4
42.4
42.3
42.3
42.2
42.0
41.8
42.1
42.3
42.2
42.0
41.9
1940..
1941..
1942..
1943..
1944..
1945..
1946 ..
1947 ..
1948..
1949..
1950..
1951..
1952..
1953..
1954..
1955.,
1956..
1957..
1958..
1959..
1960. .
1961. .
1962..
1963..
1964..
1965...
41.9
40.0
35.1
36.1
37.7
37.4
36.1
37.4
37.0
38.9
40.3
42.5
43.1
42.3
40.5
40.2
39.6
38.9
39.7
39.5
39.7
39.6
39.0
39.9
39.6
39.2
38.8
39.7
39.2
39.3
39.6
39.6
39.7
40.1
40.2
38.2
38.1
37.7
37.4
38.1
38.9
37.9
37.2
37.1
37.5
37.0
36.8
37.0
36.7
36.9
37.0
37.3
37.2
37.4
37.5
Bitumi- Class I
Retail Wholenous
sale
railtrade trade
coal
mining roads i
43.4
43.2
42.8
41.8
40.9
41.0
40.9
41.3
41.0
40.9
41.0
41.1
40.9
40.5
39.8
39.7
39.6
39.1
38.7
38.7
38.7
38.5
38.1
37.9
37.8
«37.0
36.6
35.9
41.6
42.9
43.1
42.3
41.8
41.3
41.1
41.4
42.3
43.0
42.8
41.6
41.1
41.0
40.8
40.7
40.8
40.7
40.6
40.5
40.7
40.5
40.3
40.2
40.6
40.5
40.5
40.6
40.6
40.6
40.8
40.7
36.8
36.8
36.8
36.9
36.8
36.6
36.7
36.6
36.5
36.4
36.3
36.3
36.2
36.1
36.0
35.9
35.9
36.0
36.1
36.1
35.8
35.7
35.7
35.6
40.8
40.8
40.8
40.7
40.9
40.8
40.8
40.9
40.8
40.9
40.8
40.9
41.0
40.9
40.8
40.7
40.7
40.6
40.9
40.8
40.7
40.7
40.6
40.5
Seasonally adjusted
40.1
40.1
40.2
39.8
40.0
40.0
40.0
40.0
40.1
40.1
40.3
40.2
40.2
40.5
40.4
40.3
40.3
40.3
40.1
40.2
40.2
40.2
40.2
40.0
37.6
37.4
37.5
37.0
37.4
37.1
37.4
37.3
36.4
37.1
37.2
38.6
37.8
38.1
38.5
37.2
36.1
37.4
37.8
36.9
37.7
37.3
37.1
38.8
38.1
33.3
28.1
27.0
29.3
26.8
26.2
28.5
27.7
23.3
26.8
27.8
30.7
32.4
36.3
43.0
42.0
41.3
40.3
37.7
32.3
34.7
34.9
33.8
34.1
32.3
37.3
37.5
36.3
33.3
35.8
35.8
35.9
<37.0
4 38.9
4 39.2
4 40.2
40.4
Telephone
communication 2
43.7
44.3
45.8
47.0
48.7
48.9
48.5
46.0
46.4
46.2
43.7
40.8
41.0
40.6
40.6
40.8
41.9
41.7
41.7
41.6
41.9
41.7
42.3
42.6
42.9
43.5
43.6
38.8
38.9
39.1
39.5
40.1
40.5
41.9
42.3
3 41.7
39.4
37.4
39.2
38.5
38.9
39.1
38.5
38.7
38.9
39.6
39.5
39.0
38.4
39.2
39.6
39.4
39.9
40.0
40.2
40.4
40.6
Unadjusted
40.0
39.8
39.7
39.5
40.4
41.5
41.1
39.4
41.8
37.6
41.7
41.0
40.9
41.5
32.9
41.7
42.2
41.2
41.2
42.5
39.1
42.4
44.1
43.8
43, 6
43.0
44.2
43.7
43.4
43.7
42.6
44.2
44.4
42.7
44.7
44.3
43.1
44.1
44.8
43.4
39.9
40.1
39.8
39.8
40.1
39.9
40.6
40.4
41.3
40.9
42.0
40.5
39.9
40.6
40.3
40.1
40.3
40.7
41.2
40.7
40.9
40.8
41.4
1
Data relate to all employees who received pay during the month, except executives, officials, and staff
assistants.
2 Prior to April 1945, data relate to all employees except executives. See footnote 2, Table B-28.
3 Nine-month average, April through December, because of new series started in April 1945.
4 Eleven-month average; excludes data for July.
s Beginning 1964, data include eating and drinking places. Comparable figure excluding eating and
drinking places is 37.4 hours for 1964.
NOTE.—See Note, Table B-25.
Data are for production workers in manufacturing and mining, for construction workers in contract
construction, and for nonsupervisory employees in other industries (except as noted). Data are for pay
period which includes the 12th of the month.
See Table B-29 for unadjusted average weekly hours in manufacturing.
Data for Alaska and Hawaii included beginning 1959.
Source: Department of Labor, Bureau of Labor Statistics.
244
TABLE B—27.—Average gross hourly earnings in selected industries, 7929-66
Manufacturing
Year or month
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948_
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962_
1963
1964
1965
1966v
1965:
Total
Durable
goods
Nondurable
goods
Contract
construction
TeleBituRetail Whole- minous Class I phone Agricomsale
railcultrade
coal
trade mining
roads * munica- ture 3
tions
$0.659
$0,560
_
.
_
_
__ ,
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
_ .
Nov
Dec
1966: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov v
Dec*
._ .
546
.509
.441
.437
.526
.544
550
.617
.620
.627
.655
.726
.851
.flS7
L.011
L.016
L 075
.217
1.328
L.378
1.440
L.56
1.65
1.74
L. 78
1.86
1.95
2.05
2.11
2.19
2.26
2.32
2.39
2.46
2.53
2.61
2.71
2.58
2.59
2.59
2.60
2.61
2.61
2.61
2.59
2.63
2.64
2.65
2.66
2.67
2.67
2.68
2.70
2.70
2.71
2.71
2.70
2.74
2.75
2.76
2.77
$0,492
.467
.550
.571
580
.667
.679
.691
.716
.799
.937
1.048
1.105
1.099
1.144
L. 278
L.395
L.453
L.519
L.65
L. 75
1.86
.90
1.99
2.08
2.19
2.26
2.36
2.43
2.49
2.56
2.63
2.71
2.79
2.89
2.76
2.77
2.78
2.78
2.79
2.79
2.79
2.77
2.81
2.82
2.83
2.84
2.85
2.86
2.86
2.88
2.88
2.88
2.88
2.87
2.93
2.94
2.94
2.95
$0,412
.419
.505
.520
519
.566
.572
.571
.590
.627
.709
.787
.844
.886
.995
1.145
1.250
1.295
1.347
1.44
1.51
1.58
1.62
1.67
1.77
1.85
1.91
1.98
2.05
2.11
2.17
2.22
2.29
2.36
2.45
2.33
2.33
2.34
2.34
2.35
2.35
2.36
2.36
2.38
2.38
2.39
2.40
2.40
2.41
2.41
2.43
2.44
2.45
2.46
2.45
2.47
2.48
2.49
2.50
$1.541
1.713
1.792
1.863
2.02
2.13
2.28
2.39
2.45
2.57
2.71
2.82
2.93
3.08
3.20
3.31
3.41
3.55
3.69
3.87
3.63
3.69
3.66
3.62
3.66
3.67
3.65
3.69
3.75
3.77
3.75
3.77
3.79
3.82
3.80
3.81
3.83
3.83
3.85
3.89
3.96
3.95
3.95
3.97
$.484
.494
.518
.559
.606
.653
.699
.797
.901
.972
1.015
.050
.13
.18
'.L.25
1.29
.34
40
.47
L52
L.57
L.62
1L. 68
L.74
80
6 L.75
L82
1 91
L79
.79
L79
.80
.82
.82
.82
.82
.84
.86
.86
.85
.88
.88
.88
.89
.90
.91
.91
.90
.93
.94
1.95
1.93
1
2
$0,610
628
.658
.674
.688
.711
.763
.828
.898
.948
.990
1.107
1.220
1.308
1.360
1.427
1.52
1.61
1.70
1.76
1.83
1.94
2.02
2.09
2.18
2.24
2.31
2.37
2.45
2.52
2.61
2.73
2.56
2.58
2.58
2.59
2.61
2.59
2.60
2.60
2.62
2.63
2.65
2.66
2.66
2.68
2.69
2.72
2.73
2.72
2.73
2.73
2.75
2.77
2.78
2.78
662
.626
.503
.485
651
.720
768
.828
.849
.858
.854
.960
1.030
1.101
1.147
1.199
1.357
1.582
1.835
1.877
1.944
2.14
2.22
2.40
2.40
2.47
2.72
2.92
2.93
3.11
3.14
3.12
5 3.12
5
3.15
5 3.30
8
3. 49
3.64
3.46
3.48
3.46
3.47
3.50
3.51
3.52
3.50
3.50
3.51
3.51
3.53
3.54
3.52
3.43
3.72
3.72
3.70
3.74
3.76
3.76
$0,241
$0.774
$0.730
.733
.743
.837
.852
.948
.955
1.087
1.186
1.301
1.427
1.572
1.73
1.83
1.88
1.93
1.96
2.12
2.26
2.44
2.54
2.61
2.67
2.72
2.76
2.80
3.00
2.99
3.03
2.97
2.98
3.01
2.99
3.00
2.99
3.01
3.01
3.01
2.99
3.09
3.13
3.05
3.08
3.08
3.07
3.09
.816
.822
.827
.820
.843
.870
.911
4
.962
1.124
1.197
1.248
1.345
1.398
1.49
1.59
1.68
1.76
1.82
1.86
1.95
2.05
2.18
2.26
2.37
2.48
2.56
2.62
2 70
2.78
2.67
2.67
2.67
2.68
2 69
2.69
2.67
2.68
2.73
2.73
2.75
2.78
2.76
2.78
2.77
2.77
2.77
2.78
2.77
2.76
2.79
2.80
2.81
.226
.172
.129
115
.129
.142
152
.172
166
.166
.169
.206
.268
.353
.423
.472
515
.547
.580
.559
.561
.625
.661
.672
661
.675
.705
728
.757
.798
.818
834
.856
.880
.904
951
1 030
1.010
.860
.929
.984
1.060
.945
1.010
1.070
For coverage of series, see footnote 1, Table B-26. '
Prior to April 1945, data relate to all employees except executives; for April 1945-May 1949, mainly to employees subject to the Fair Labor Standards Act; and beginning June 1949, to nonsupervisory employees only.
34 Weighted average of all farm wage rates on a per hour basis.
Nine-month average, April through December, because of new series started in April 1945.
5
Eleven-month average; excludes data for July.
8
Beginning 1964, data include eating and drinking places. Comparable figure excluding eating and
drinking places is $1.87 for 1964; $1.96 for 1965; and $2.04 for 1966.
NOTE.—See Note, Table B-25.
Data are for production workers in manufacturing and mining, for construction workers in contract construction, and for all nonsupervisory employees in other industries (except as noted). Data are for pay
period which includes the 12th of the month.
Data for Alaska and Hawaii included beginning 1959.
Sources: Department of Labor, Bureau of Labor Statistics, and Department of Agriculture.
245
T A B L E B-28.—Average gross weekly earnings in selected industries, 1929-66
Manufacturing
Year or month
1929
1S30
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
__
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966 P
1965: J a n .
Feb.
Mar_
Apr.
May
June
July_
Aug.
Sept.
O£tNov.
Dec.
1966: J a n .
Feb.
Mar.
May.
June
July.
Aug.
Sept.
Oct_
Nov
D
Contract
conNon
durable struction
goods
Total
Durable
goods
$24.76
23.00
20.64
16.89
16.65
18.20
19.91
21.56
23.82
22.07
23.64
$26.84
24.42
20.98
15.99
16.20
18.59
21.24
23.72
26.61
23.70
26.19
$22.47
21.40
20.09
17.26
16.76
17.73
18.77
19.57
21.17
20.65
21.36
24.96
29.48
36.68
43.07
45.70
44.20
43.32
49.17
53.12
28.07
33.56
42.17
48.73
51.38
48.36
46.22
51.76
56.36
57.25
21.83
24.39
28.57
33.45
36.38
37.48
40.30
46.03
49.50
50.38
58.32
63.34
67.16
70.47
70.49
75.70
78.78
81.59
82.71
88.26
62.43
68.48
72.63
76.63
76.19
82.19
85.28
88.26
89.27
96.05
53.48
56.88
59.95
62.57
63.18
66.63
70.09
72.52
74.11
78.61
89.72
92.34
96.56
99.63
102.97
107. 53
112.19
97.44
100.35
104.70
108.09
112.19
117.18
121.67
80.36
82.92
85.93
87.91
90.91
94.64
98.49
105. 52
106.19
106. 71
105.82
107. 53
107.79
107.01
106.45
107.83
109. 03
109.71
110.92
110.00
110. 27
110.95
111. 24
112.05
112. 74
111.11
111. 78
113. 71
113.85
113.99
114.68
115.37
115. 79
117. 04
115.93
117.46
117. 74
92.50
92.73
93.60
92.20
94.00
94.47
94.87
95.11
95.68
95.68
96.32
96.96
95.52
96.88
96.88
96.96
98.33
99.23
99.14
99.23
99.54
99.94
100.10
100.50
116. 34
115.51
117.18
118.72
119.43
120.98
119.99
120.69
120.69
121. 54
121.82
121.82
119.81
120.54
123.94
124.07
123. 48
124.79
$58.87
65.27
67.56
69.68
76.96
Retail
trade
$21.01
21.34
22.17
23.37
24.79
26.77
28.59
32.92
36.94
39.75
41.62
86.41
88.91
90.90
96.38
100.27
103.78
108.41
43.16
46.22
47.79
49.75
51.21
53.06
54.74
56,89
58.82
60.76
113.04
118.08
122.47
127.19
132.06
138. 01
145.13
131.77
131.73
134.32
132.85
140.18
139. 46
140. 89
143. 54
138.75
144.39
136.50
139.87
138.34
139.05
143.26
140. 59
141. 71
146.69
150.15
149.38
151.67
152.08
143.39
147.68
62.37
64.01
65.95
68.04
4 64.75
66.61
68.57
65.34
65.34
65.34
66.06
66.43
66.98
68.25
68.07
67.16
67.33
66.77
67.71
67.49
67.30
67.12
67.47
67.64
69.14
70.48
70.11
69.09
68.87
68.84
69.29
BitumiWhole- nous Class I
sale
railcoal
trade mining roads *
$26.75
25.19
25.44
25.38
26.96
28.36
28.51
28.76
$25.11
22.04
17.59
13.58
14.21
17.45
18.86
21.89
22.94
19.78
22.99
29.36
31.36
34.28
37.99
40.76
42.37
46.05
50.14
53.63
55.49
23.74
29.47
33.37
39.97
49.32
50.36
56.04
63.75
69.18
60.63
$31.90
32.47
34.03
39.34
41.49
46.36
46.32
50.00
55.03
60.11
62.36
58.08
62.02
65.53
69.02
71.28
74.48
78.57
81.41
84.02
88.51
90.72
93.56
96.22
99.47
102.31
106. 49
111. 11
103.94
104. 49
105.01
105.15
106. 75
105.93
106. 60
106. 34
106.90
107. 57
108.12
109.59
108.53
109.08
109.48
110.43
111.11
110.70
112.20
111.38
111. 93
112.74
112.87
113.42
67.46
74.69
75.04
81.84
77.52
92.13
102.00
106.00
97.57
111.34
64.14
70.93
74.30
76.33
78.74
82.12
88.40
94.24
101.50
106.43
112.41
112.01
114.46
121.43
128.91
140. 23
147.45
108.84
112.94
115.87
118.40
121.80
130.80
138.40
138. 50
137.36
137.07
141.40
145. 67
137.11
144. 67
137.90
146.30
131.98
146.37
144. 73
144.79
146.08
112.85
155.12
156.98
148.03
152.44
154.09
159.80
147. 02
126. 78
133. 62
130. 09
129.93
129.43
132.16
131.10
129.77
131. 54
128.23
133. 04
132. 76
131.94
139.91
135.12
132.75
135.83
137.54
134.11
1 For coverage of series, see footnote 1, Table B-26.
2
Prior to April 1945, data relate to all employees except executives; for April 1945-May 1949, mainly to
employees subject to the Fair Labor Standards Act; and beginning June 1949, to nonsupervisory employees
only.
3
Nine-month average, April through December, because of new series started in April 1945.
4
Beginning 1964, data include eating and drinking places. Comparable figure excluding eating and
drinking places is $69.94 for 1964.
NOTE.—See Note, Table B-25.
Data are for production workers in manufacturing and mining, for construction workers in contract construction, and for nonsupervisory employees in other industries (except as noted). Data are for pay
period which includes the 12th of the month.
Data for Alaska and Hawaii included beginning 1959.
Source: Department of Labor, Bureau of Labor Statistics.
246
TABLE B-29.—Average weekly hours and hourly earnings, gross and excluding overtime, in
manufacturing industries, 7939-66
Durable goods manufac- Nondurable goods manuturing industries
facturing industries
All manufacturing industries
Average
weekly
hours
Average
weekly
hours
Average hourly
earnings
Year or month
ExExcludcluding Gross ing
over)vertime
;ime
1939
37.7
10.627
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
38.1
40.6
43.1
45.0
45.2
43.5
40.3
40.
40.0
.655
.726
.851
.957
1.011
1.016
1.075
1.217
1.328
1.378
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
40.5
40.6
40.7
40.5
39.6
40.
40.4
39.8
39.
40.3
I960....
1961....
1962
1963
1964
1965
1966 P.-
39.8
40.4
40.5
40.7
41.2
41
Average
hourly
earnings
Average
weekly
hours
Average
hourly
earnings
Excluding
overtime
ExExExExand
cludcludcludcludinter- Gross ing Gross ing Gross ing Gross ing
indusoveroveroverovertry shift
time
time
time
time
(1957" 100)
32.2
37.9
.793
.881
.933
2
.949
1.035
1.18
1.29
1.34
133.4
137.5
140.8
143.7
145.5
150.4
57.8
63.
66.1
39.2
42.0
45.0
46.5
46.5
44.0
40.4
40. c
40.4
39.4
.716
.799
.937
1.048
1.105
1.
1.144
1.278
1.
1.453
0.762
.872
.966
1.019
1.031
1.111
1.24
1.35
1.42
.440
.56
.65
.74
..78
.86
.95
2.05
2.11
2.19
1.39
1.51
1.59
1.68
1.73
1.79
1.89
1.99
2.05
2.12
73.6
77.4
81.6
84.
86.9
91.5
96.2
100.2
103.5
41.1
41.5
41.
41.
40.1
41,
41.0
40.
39.5
40.7
38.0
37.9
37.6
38.0
1.519
1.65
1.75
1.86
1.90
1.99
2.08
2.19
2.26
2.36
1.46
1.59
1.68
1.79
1.84
1.91
2.01
2.12
2.21
2.28
2.20
2.25
2.31
2.37
2.44
2.50
2.59
106.6
109.6
112.3
115.2
37.6
37.-
2.26
2.32
2.39
2.46
2.53
2.61
2.71
40.1
40.3
40.9
41.
41.
42.0
42.
37.7
38.0
38.1
38.
38.1
38.1
37.8
2.43
2.49
2.56
2.63
2.71
2.79
2.89
2.36
2.42
2.48
2.54
2.60
2.67
2.75
39.3
39.6
39.6
39.
40.1
40.2
36.7
36.8
36.9
36.9
36.8
36.9
36.8
2.05
2.11
2.17
2.22
2.29
2.36
2.45
2.05
2.09
2.15
2.21
2.27
2.35
37J
37.
37.
37.
37.
37.
2.58
2.59
2.59
2.60
2.61
2.61
2.48
2.49
2.49
2.50
2.50
2.50
119.
Mar
Apr
May
June
120. C
120.
120.4
120.
120.8
41.
41.
42.
41.
42.
42.
38.2
38.1
38.3
38.2
38.2
38.2
2.76
2.77
2.78
2.78
2.79
2.79
2.65
2.65
2.66
2.66
2.66
2.67
39.7
39.8
40.0
39.4
40.0
40.2
36.9
36.9
37.0
36.7
36.9
37.0
2.33
2.33
2.34
2.34
2.35
2.35
2.25
2.25
2.25
2.26
2.26
2.27
July.
Aug.
Sept.
Oct..
Nov.
Dec.
37.
37.
37.
37.
37.
37.
2.61
2.59
2.63
2.64
2.65
2.66
2.51
2.49
2.51
2.52
2.53
2.54
120.
120.'
121.'
121..
122.,
122.
41.
41.
41.
42.
42.
42.
38.0
37.9
37.7
37.9
37.9
38.2
2.79
2.77
2.81
2.82
2.83
2.84
2.67
2.65
2.68
2.68
2.69
2.70
40.2
40.3
40.2
40.2
40.3
40.4
37.1
37.1
36.
36.8
36.
37.
2.36
2.36
2.38
2.38
2.39
2.40
2.28
2.27
2.29
2.28
2.29
2.31
May".'
June.
37.
37.
37.
37.
37.
37.
2.67
2.67
2.6S
2.70
2.70
2.71
2.56
2.56
2.56
2.58
2.58
2.58
123.
123.
123.
124.
124.
124.
42.
42.
42.
42.
42.
42.
38.
38. C
38.0
37.9
37.9
37.9
2.85
2.86
2.86
2.88
2.88
2.88
2.72
2.72
2.72
2.74
2.74
2.74
39.8
40.2
40.2
39.9
40.3
40.5
2.40
2.41
2.41
2.43
2.44
2.45
2.31
2.31
2.32
2.33
2.34
2.34
July
Aug
Sept
Oct
Nov*
Dec*
37.
37.
37.
37.
37.
37.
2.71
2.70
2.74
2.75
2.76
2.7'
2.59
2.57
2.61
2.62
2.63
2.64
124.
124.
125.
126.
126.
41.
42.
42.
42.
42.
42.
37.5
37.7
37.
37.
37.
38.
2.88
2.87
2.93
2.94
2.94
2.95
2.74
2.73
2.78
2.79
2.80
2.81
40.3
2.46
2.45
2.47
2.48
2.49
2.50
2.35
2.34
2.36
2.37
2.38
2.40
1965: Jan
Feb
1966: Jan...
Feb..
Mar..
37.6
37.5
37.2
37.6
37.3
37.4
37.
37.
37.
$0,691
1180
121.0
124.8
1
37.4
&0.691
$0.571
37.0
38.9
40.3
42.5
43.1
42.3
40.5
40.2
39.6
38.9
.590
627
.709
.787
.844
.886
.995
1.145
1.250
1.295
39.7
39.5
39.7
39.6
39.0
39.9
39.6
39.2
38.8
.34;
.44
.51
58
62
67
77
85
91
40.
40.3
40.
40.2
40.
37.2
37.0
36.6
37.0
36.
36.
36.6
36.
37.
36.
37.
36.
36.
36.
Annual average not available; April used.
Eleven-month average; August 1945 excluded because of VJ Day holiday period.
NOTE.—See Note, Table B-25.
Data relate to production workers and are for pay period which includes the 12th of the month.
See Table B-26 for seasonally adjusted average gross weekly hours.
Data for Alaska and Hawaii included beginning 1959.
Source: Department of Labor, Bureau of Labor Statistics.
2
247
$0.613
684
748
798
2.841
.962
1.11
1.21
1.26
1.31
1.40
1.46
1.53
1.58
1.62
1.72
1.80
1.62
1.92
TABLE B-30.—Average weekly earnings, gross and spendable, in manufacturing industries,
in current and 1957-59 prices, 1939-66
Average spendable weekly earnings '
Average gross weekly
earnings
Year or month
Current
prices
1957-592
prices
Worker with no
dependents
Current
prices
1957-592
prices
Worker with three
dependents
Current
prices
1957-592
prices
1939
$23.64
$48.84
$23.37
$48.29
$23.40
$48.35
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
24.96
29.48
36.68
43.07
45.70
44.20
43.32
49.17
53.12
53.88
51.15
57.47
64.58
71.43
74.55
70.49
63.71
63.20
63.39
64.92
24.46
27.96
31.80
35.95
37.99
36.82
37.31
42.10
46.57
47.21
50.12
54.50
55.99
59.62
61.97
58.72
54.87
54.11
55.57
56.88
24.71
29.19
36.31
41.33
43.76
42.59
42.79
47.58
52.31
52.95
50 64
56.90
63 93
68 54
71.39
67.93
62 93
61.16
62 42
63.80
58.32
63.34
67.16
70.47
70.49
75.70
78.78
81.59
82.71
88.26
69.59
69.99
72.61
75.61
75.31
81.14
83.19
83.26
82.14
86.96
50.26
52.97
55.04
57.59
58.45
62.51
64.92
66.93
67.82
71.89
59.98
58.53
59.50
61.79
62.45
67.00
68.55
68.30
67.35
70.83
56.36
60.18
62.98
65.60
65.65
69.79
72.25
74.31
75.23
79.40
67.26
66 50
68.09
70.39
70.14
74 80
76.29
75 83
74.71
78.23
I960
1961
1962
1963
1964
1965
1966 P
89.72
92.34
96.56
99.63
102.97
107. 53
112.19
87.02
88.62
91.61
93.37
95.25
97.84
99.20
72.57
74.60
77.86
79.82
84.40
89.08
91.45
70.39
71.59
73.87
74.81
78.08
81.06
80.86
80.11
82.18
85.53
87.58
92.18
96.78
99.33
77.70
78 87
81.15
82.08
85.27
88.06
87.82
1965: Jan
__
Feb
Mar
Apr __
May
June
-
105. 52
106.19
106.71
105.82
107. 53
107. 79
96.90
97.51
97.90
96.82
98.11
97.90
87.47
88.00
88.42
87.71
89.08
89.29
80.32
80.81
81.12
80.25
81.28
81.10
95.09
95.65
96.09
95.34
96.78
96.99
87.32
87.83
88.16
87.23
88.30
88.09
107.01
106.45
107.83
109.03
109.71
110.92
97.11
96.77
97.85
98.76
99.20
99.93
88.66
88.21
89.32
90.28
90.83
91.80
80.45
80.19
81.05
81.78
82.12
82.70
96.34
95.87
97.03
98.04
98.61
99.62
87.42
87.15
88.05
88.80
89.16
89.75
110.00
110. 27
110.95
111. 24
112.05
112.74
99.10
98.81
99.06
98.88
99.51
99.86
89.79
90.00
90.51
90.73
91.35
91.87
80.89
80.65
80.81
80.65
81.13
81.37
97.58
97.80
98.34
98.57
99.22
99.77
87.91
87.63
87.80
87.62
88.12
88.37
111.11
111. 78
113.71
113.85
113.99
114.68
98.07
98.22
99.66
99.43
99.47
99.98
90.63
91.14
92.61
92.72
92.82
93.35
79.99
80.09
81.17
80.98
80.99
81.39
98.47
99.00
100.54
100.65
100.76
101.31
86.91
86.99
88.12
87.90
87.92
88.33
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
. .
.
July. . .
Aug
Sept
Oct
Nov
Dec
1966- Jan
Feb
Mar
Apr
May
June.
July
Aug
Sept
Oct
Nov*
Dec p
_ .
- _ .
_.
_
_
.
. .
.
1 Average gross weekly earnings less social security and income taxes.
Earnings in current prices divided by the consumer price index on a 1957-59 base.
NOTE.—See Note, Table B-25.
Data relate to production workers and are for pay period which includes the 12th of the month.
Data for Alaska and Hawaii included beginning 1959.
Source: Department of Labor, Bureau of Labor Statistics.
2
248
TABLE B-31.—Indexes of output per man-hour and related data, private economy, 7947-66
[1957-59=100]
Output per man-hour
Year
Total
private Farm
Man-hours 2
Output i
Non- Total Farm
farm private
Non- Total Farm
farm private
Nonfarm
Establishment basis3
1947...
1948...
1949-
69.1
72.1
74.4
49.8
58.0
56.5
74.3
76.6
79.6
67.6
70.8
70.6
82.1
91.8
88.9
66.8
69.8
69.7
97.8
98.2
94.9
164.8
158.4
157.3
89.9
91.1
87.6
1950...
19511952...
1953...
1954...
80.5
82.9
84.4
88.0
90.0
64.4
64.7
70.3
79.6
83.7
84.6
86.4
87.1
89.7
91.6
77.9
82.8
84.8
89.1
87.9
93.7
88.9
91.8
96.6
98.6
77.0
82.5
84.5
88.8
87.4
96.8
99.9
100.5
101.3
97.7
145.6
137.5
130.6
121.4
117.8
91.0
95.5
97.0
99.0
95.4
1955...
1956-.
1957...
1958...
1959.-.
94.0
94.1
96.9
99.8
103.4
84.4
88.0
93.3
103.0
104.8
95.7
95.2
97.2
99.7
103.1
95.4
97.2
98.6
97.3
104.1
101.0
100.5
98.1
100.5
101.9
95.1
97.1
98.6
97.2
104.2
101.5
103.3
101.8
97.5
100.7
119.6
114.2
105.1
97.6
97.2
99.4
102.0
101.4
97.5
101.1
I960...
19611962...
1963..
1964..
105.0
108.5
113.6
117.6
122.1
110.7
119.4
122.2
133.1
133.7
104.4
107.3
112.2
115.6
119.9
106.6
108.6
116.0
120.8
127.5
105.8
107.2
106.8
110.1
106.3
106.7
108.7
116.5
121.4
128.6
101.5
100.1
102.1
102.7
104.4
95.6
89.8
87.4
82.7
79.5
102.2
101.3
103.8
105.0
107.3
19651966 P.
125.5
129.0
148.8
155.8
122.4
125.3
135.3
142.5
115.0
109.2
136.4
144.3
107.8
110.5
77.3
70.1
111.4
115.2
Labor force basis 4
1947.
1948.
1949
67.9
70.2
71.9
49.8
58.0
56.1
72.9
74.5
76.8
67.6
70.8
70.6
82.1
91.8
88.9
66.8
69.8
69.7
99.6
100.8
98.2
164.8
158.2
158.6
91.6
93.7
90.8
1950
1951.
1952
1953
1954
78.5
82.1
84.5
88.4
90.8
64.1
64.3
69.9
79.1
83.3
82.4
85.7
87.5
90.4
92.8
77.9
82.8
84.8
89.1
87.9
93.7
88.9
91.8
96.6
98.6
77.0
82.5
84.5
88.8
87.4
99.2
100.9
100.4
100.8
96.8
146.2
138.3
131.3
122.1
118.3
96.3
96.6
98.2
94.2
1955
1956.
195719581959-
94.7
94.6
97.2
99.4
103.4
84.0
87.5
93.3
103.1
104.7
96.7
95.9
97.7
99.2
103.1
95.4
97.2
98.6
97.3
104.1
101.0
100.5
98.1
100.5
101.9
95.1
97.1
98.6
97.2
104.2
100.7
102.7
101.4
97.9
100.7
120.3
114.9
105.2
97.5
97.3
98.3
101.2
100.9
98.0
101.1
19601961196219631964-
104.5
107.3
113.0
116.7
120.7
110.7
119.9
122.3
133.5
134.0
103.8
105.9
111.4
114.4
118.2
106.6
108.6
116.0
120.8
127.5
105.8
107.2
106.8
110.1
106.3
106.7
108.7
116.5
121.4
128.6
102.0
101.2
102.7
103.5
105.6
95.6
89.4
87.3
82.5
79.3
102.8
102.6
104.6
106.1
108.8
1965
124.2
128.4
149.0
155.6
120.9
124.3
135.3
142.5
115.0
109.2
136.4
144.3
108.9
111.0
77.2
70.2
112.8
116.1
1
2
Output refers to gross national product in 1958 prices.
Hours worked by all persons in private industry engaged in production, including man-hours of proprietors
and unpaid family workers.
3
4 Man-hours estimates based primarily on establishment data.
Man-hours estimates based primarily on labor force data.
NOTE.—For information on sources, methodology, trends, and underlying factors influencing the measures, see Bureau of Labor Statistics, Department of Labor, Bulletin No. 1249, Trends in Output per ManHour in the Private Economy, 1909-58, December 1959.
Data for Alaska and Hawaii included beginning 1960.
Source: Department of Labor, Bureau of Labor Statistics.
249
PRODUCTION AND BUSINESS ACTIVITY
TABLE B—32.—Industrial production indexes, major industry divisions, 1929—66
[1957-59 = 100]
Year or month
Total
industrial
production
Manufacturing
Mining
Total
Durable
Nondurable
38.4
38.6
38.2
38.3
54.2.
1930
1931.
1932.
1933.
1934.
1935.
1936.
1937.
1938
1939.
32.0
26.5
20.7
24.4
26.6
30.7
36.3
39.7
31.4
38.3
31.7
25.9
19.9
23.7
26.0
30.6
36.4
39.7
30.5
37.9
28.4
19.5
11.9
15.5
18.8
24.1
31.2
35.2
22.6
31.4
34.8
32.8
28.9
32.8
33.8
37.4
41.6
44.1
39.1
44.9
47.0
40.3
33.6
38.5
40.3
43.7
50.3
56.7
49.0
53.8
1940.
1941.
1942.
1943.
1944.
1945
1946.
1947
1948.
1949.
43.9
56.4
69.3
82.9
81.7
70.5
59.5
65.7
68.4
64.7
58.3
73.1
88.7
86.3
73.0
60.0
66.4
68.9
65.1
40.0
57.7
79.9
102.9
100.9
78.2
54.7
64.3
67.0
60.9
47.3
57.6
63.7
70.7
68.2
65.6
64.8
67.2
69.5
68.3
60.1
64.8
67.0
69.0
74.2
73.0
72.2
79.9
84.0
74.5
1950
1951.
1952.
1953
1954.
1955
1956
1957
1958
1959
74.9
81.3
84.3
91.3
85.8
96.6
99.9
100.7
93.7
105.6
75.8
81.9
85.2
92.7
86.3
97.3
100.2
100.8
93.2
106.0
74.1
83.5
88.5
99.9
88.4
101.9
104.0
104.0
90.3
105.6
76.0
78.5
80.0
83.6
83.6
91.6
95.4
96.7
96.8
106.5
83.2
91.3
90.5
92.9
90.2
99.2
104.8
104.6
95.6
99.7
1960
1961
1962
1963
1964
1965
1966
108.7
109.7
118.3
124.3
132.3
143.4
156.3
108.9
109.6
118.7
124.9
133.1
145.0
158.7
108.5
107.0
117.9
124.5
133.5
148.4
165.1
109.5
112.9
119.8
125.3
132.6
140.8
150.6
101.6
102.6
105.0
107.9
111.5
114.8
120.2
1929.
Seasonally adjusted
May
June
138.8
139.6
140.9
141.0
141.8
143.1
140.3
141.3
142.5
142.5
143.3
144.6
142.1
143.5
145.1
145.6
147.0
148.4
138.1
138.6
139.3
138.6
138.7
139.9
112.9
112.2
112.8
113.1
114.2
115.2
July.
Aug.
Sept.
Oct.
Nov
Dec_
144.3
144.9
144.1
145.5
146.7
149.0
146.0
146.4
145.8
147.0
148.6
151.0
150.4
150.5
149.2
150.8
151.8
155.2
140.4
141.4
141.5
142.3
144.5
145.7
115.9
116.7
112.5
116.4
116.4
118.3
1966: Jan.
Feb.
Mar
Apr
May
June
150.6
152. 4
153.7
153.9
155.3
156.5
152.9
154.7
155.9
156.6
157.6
158.9
158.1
160.7
161.9
162.9
164.2
165.4
146.4
147.3
148.5
148.7
149.4
150.7
117.3
117.7
120.0
115.6
120.7
122.0
July.
Aug.
Sept
Oct.
Nov.
Dec
157.2
158.0
157.7
158.8
158.6
158.7
159.4
160.1
160.0
161.4
161.0
161.0
166.1
167.1
167.3
169.1
167.6
167.3
151.3
151.3
150.9
151.7
152.8
153.2
122.0
122.1
121.0
121.4
120.8
122.8
1965: Jan.
Feb.
Mar
Apr.
Source: Board of Governors of the Federal Reserve System.
250
Utilities
TABLE B-33.—Industrial production indexes, market groupings, 1947-66
[1957-59=100]
Final products
Year or month
Total
industrial
produc- Total
tion
Consumer goods *
Materials
Equipment
AutoTotal,
Total
motive Home includ- BusiTotal prod- goods ing
ness
ucts
defense
Dur- Nonable durable
goods goods
1947
1948
1949
65.7
68.4
64.7
64.2
66.6
64.5
67.1
69.2
68.8
69,4
72.6
72.0
68.8
71.7
66.3
55.4
58.3
52.0
69.9
72.6
63.5
67.0
70.2
64.8
68.2
71.0
64.2
64.9
68.2
64.2
1950
1951
1952
1953
1954
74.9
81.3
84.3
91.3
85.8
72.8
78.6
84.3
89.9
85.7
78.6
77.8
79.5
85.0
84.3
90.6
80.1
72.1
91.3
85.0
91.4
78.7
78.8
90.2
86.0
56.4
78.4
94.1
100.5
68.0
83.1
94.1
96.6
85.1
76.9
83.8
84.3
92.6
85.9
79.5
87.8
88.9
100.7
88.4
73.3
78.8
79.0
84.1
83.3
1955
1956
1957
1958
1959
96.6
99.9
100.7
93.7
105.6
93.9
98.1
99.4
94.8
105.7
93.3
95.5
97.0
96.4
106.6
118.3
97.8
105.2
86.7
108.1
97.3
100.9
96.6
92.8
110.7
95.0
103.7
104.6
91.3
104.1
91.9
104.7
105.3
89.8
104.9
99.0
101.6
101.9
92.7
105.4
104.7
105.3
104.8
90.0
105.1
93.0
97.7
98.9
95.4
105.7
1960
1961
1962
1963
1964
108.7
109.7
118.3
124.3
132.3
109.9
111.2
119.7
124.9
131.8
111.0
112.6
119.7
125.2
131.7
123.2
111.8
131.1
141.2
145.1
110.8
112.2
122.2
129.6
141.1
107.6
108.3
119.6
124.2
132.0
110.2
110.1
122.1
128.3
139.1
107.6
108.4
117.0
123.7
132.8
106.6
104.8
114.1
121.2
131.2
108.7
112.2
120.0
126.3
134.4
1965
1966
143.4
156.3
142.5
155.4
140.3
147.4
167.2
163.2
154.8
168.8
147.0
172.7
156. 7
181.2
144.2
157.1
144.3
157.4
144.1
156.8
Seasonally adjusted
1965: Jan..
Feb..
MarApr..
May.
June.
138.8
139.6
140.9
141.0
141.8
143.1
138.3
138.8
140.2
139.5
140.2
141.3
138.2
138.4
140.0
138.5
138.6
139.5
165.4
164.2
171.5
166.6
167.3
167.5
149.7
151.2
153.0
151.0
152.6
152.3
138.5
139.7
140.7
141.6
143.8
145.2
148.0
149.5
150.4
151.2
153.5
154.9
139.4
140.2
141.4
142.5
143.5
145.2
138.5
139.9
142.6
142.8
144.8
146.5
139.7
139.9
139.6
141.5
142.1
143.8
July.
Aug.
Sept.
Oct..
Nov.
Dec.
144.3
144.9
144.1
145.5
146.7
149.0
142.1
143.0
143.7
145.7
148.0
148.9
139.8
140.5
141.3
141.9
143.7
144.2
167.1
166.7
165.2
168.0
168.5
169.1
153.3
151.4
155.3
158.8
159.7
165.8
147.6
148.5
149.0
153.9
157.3
159.0
157.1
158.0
159.0
163.8
167.2
169.1
146.4
146.5
144.9
145.3
146.1
148.8
148.5
147.3
144.3
144.3
143.6
147.3
144.7
145.6
145.4
147.1
148.6
150.4
1966: Jan...
Feb..
Mar..
Apr..
May.
JuneJuly..
Aug..
Sept..
Oct...
Nov..
Dec
150.6
152.4
153.7
153.9
155.3
156.5
150.3
152.1
152.5
152.9
153.7
154.9
144.6
146.1
146.2
146.4
146.2
147.1
168.1
167.9
170.0
168.4
160.7
162.3
166.8
165.7
164.1
168.4
169.9
168.3
162.6
164.8
166.2
166.9
169.8
171.4
171.9
174.0
175.4
175.9
178.3
180.0
150.9
152.6
154.4
154.5
157.1
158.0
149.9
152.6
155.6
156.7
157.7
159.3
151.0
152.1
153.1
152.3
156.5
158.0
157.2
158.0
157.7
158.8
158.6
158.7
155.3
156.4
156.3
158.4
158.4
159.0
146.5
147.1
146.5
148.9
148.4
148.7
154.5
146.4
150.7
168.5
163.3
168.0
168.9
166.0
170.1
168.9
174.4
176.4
177.4
179.0
180.1
181.2
182.7
184.4
185.7
187.4
187.9
158.8
159.6
159.2
159.6
158.8
158.4
159.1
160.1
159.8
159.7
158.7
158.6
159.1
158.6
159.6
159.5
161
164
1
Also includes apparel and consumer staples, not shown separately.
Source: Board of Governors of the Federal Reserve System.
251
189
156
TABLE B-34.—Industrial production indexes, selected manufactures, 1947-66
[1957-59=100]
Durable manufactures
Year or
month
Nondurable manufactures
FabriTrans- Instruments Clay, FurniPri- cated Ma- porta- and
re- glass, ture
mary metal ihinery tion
and
lated
and miscelmetals prodequip- prodlumber laneous
ucts
ment
ucts
1947..
1948-.
1949..
90.7
94.3
79.4
1950..
1951..
1952..
1953.
1954.
Textile,
apparel, Paper
and
and
leather printing
products
Chemical,
petro- Foods,
leum, beverages,
and
and
rubber tobacco
products
75.9
77.2
65.3
66.5
59.0
42.9
46.9
47.1
53.7
55.2
49.2
75.8
79.7
72.3
73.5
77.4
71.6
81.0
84.5
80.6
66.7
69.4
69.3
47.5
50.8
49.4
80.7
80.0
80.8
108.7
99.3
112.5
91.3
85.4
91.2
89.0
100.3
90.2
72.7
83.0
92.1
100.5
87.7
56.4
62.9
73.1
91.7
83.8
57.3
65.7
78.1
85.3
82.9
87.7
92.0
89.3
92.7
83.7
80.2
82.4
89.7
86.8
89.1
87.4
89.5
90.7
86.9
76.7
79.4
77.7
82.6
85.0
60.7
67.4
69.9
75.2
74.7
83.6
85.4
87.3
88.2
89.8
1955.
19561957.
1958.
1959.
118.4
116.4
112.2
87.5
100.4
98.3
98.8
101.5
92.9
105.5
96.5
107.1
104.2
88.8
107.1
102.0
97.4
106.4
89.5
104.0
88.7
95.4
98.0
92.1
109.9
100.7
102.0
97.5
94.1
108.5
97.9
101.0
97.6
93.3
109.0
95.5
98.0
96.9
95.0
108.1
92.5
97.1
97.8
97.0
105.2
91.4
95.6
95.5
108.9
93.1
96.6
96.7
99.4
103.9
1960.
1961.
1962.
19631964.
101.3
98.9
104.6
113.3
129.1
107.6
106.5
117.1
123.4
132.7
110.8
110.4
123.5
129.2
141.4
108.2
103.6
118.3
127.0
130.7
116.5
115.8
123.0
130.2
136.4
105.7
104.5
109.3
114.4
121.1
113.3
114.1
124.5
129.1
138.4
107.5
108.4
115.1
118.5
125.2
109.0
112.4
116.7
120.1
127.5
113.9
118.9
131.2
141.8
152.5
106.6
110.2
113.3
116.8
120.8
1965-._
1966 P..
137.6
142.8
147.8
163.0
160.5
183.9
149.2
168.1
151.4
176.3
127.6
133.0
151.8
165.1
135.8
141.4
135.3
146.5
164.6
181.7
123.4
127.6
Seasonally adjusted
1965: J a n . . . .
Feb.Mar..
Apr...
MayJune...
139.6
139.5
140.4
142.5
142.9
144.5
140.3
145.0
144.8
147.1
145.7
146.0
151.6
153.6
155.4
155.5
157.2
159.1
141.2
141.0
144.6
144.7
147.5
148.9
143.4
143.8
145.4
146.9
147.0
149.8
123.2
124.8
125.9
124.1
126.1
126.8
145.2
147.6
148.4
149.1
150.1
150.3
133.1
133.8
134.4
134.2
134.9
135.4
132.1
132.0
133.0
133.3
134.2
134.8
159.1
160.9
162.0
160.3
160.9
163.2
124.1
123.5
123.7
123.0
121.6
122.5
July..
Aug__
Sept-.
Oct.._
Nov-Dec-_
149.6
146.6
132.6
125. 0
120.6
126.5
148.0
147.5
146.7
150.9
153.6
156.3
161.0
161.6
164.3
166.4
168.3
171.0
149.6
151.2
149.8
154.9
157.2
160.4
152.1
152.6
155.7
158.0
159.0
162.2
127.7
127.8
128.4
130.1
130.3
135.0
150.5
151.9
152.7
155.1
157.8
160.9
134.6
134.7
136.5
137.3
138.7
140.2
135.9
136.9
136.0
136.4
139.2
140.6
164.6
166.4
166.3
167.9
170.6
172.8
122.7
123.1
123.4
123.3
125.1
124.8
1966: J a n . . .
Feb...
Mar..
May II
June..
131.9
138.3
141.8
142.4
146.5
148.0
157.7
161.6
161.7
161.4
162.9
161.8
174.5
176.4
176.1
178.6
180.6
182.8
163.0
164.1
166.1
165.9
165.8
167.1
166.8
169.4
171.9
174.6
176.4
176.5
136.2
136.4
138.0
137.8
133.3
134.4
158.4
161.6
162.9
163.5
166.7
167.0
138.6
139.8
141.1
142.6
142.0
143.4
142.1
142.7
144.2
143.5
146.6
148.3
174.6
175.1
176.6
177.3
179.3
180.1
125.7
126.8
127.4
126.9
125.5
126.8
July..
Aug__
Sept.Oct...
Nov_.
Dec v_
148.6
148.7
146.4
144.6
139.4
137
162.1
161.4
163.0
164.2
164.5
167
186.6
189.6
188.8
191.1
189.8
189
166.0
166.0
168.3
174.8
172.6
172
177.0
177.4
179.5
181.8
181.3
183
131.7
129.8
129.8
128.1
126.7
126
163.5
167.1
165.9
165.3
166.2
167
141.6
140.1
140.2
141.0
141.1
141
149.6
148.6
147.2
147.9
148.3
182.0
182.4
182.8
185.5
187.1
127.2
128.5
127.9
126.7
128.6
Source: Board of Governors of the Federal Reserve System.
252
149
188
128
T A B L E B-35.—Manufacturing
capacity, output, and utilization rate, 1948—66
Period
Capacity i
Output
(1957-59=
100)
Utilization
rate
(percent) 2
1948
1949
79
83
69
65
87
79
1950
1951
1952
1953
1954
85
89
94
99
104
76
82
85
93
86
89
93
90
94
83
1955
1956
1957
1958
1959
109
114
121
126
130
97
100
101
93
106
90
88
84
74
82
I960
1961
1962
1963
1964
135
139
144
149
155
109
110
119
125
133
81
79
82
84
86
1965
1966 P..
163
174
145
159
89
91
Seasonally adjust ed
1961' I
II
III
IV
1962- I
II
III
rv
1963: I
II
III
rv
1964: I
II
III
IV
1965: I
II
III
IV
1966: I
II
III
IV p
1
138
139
140
141
103
108
112
115
75
78
80
82
142
143
145
146
117
119
120
120
82
83
83
82
147
149
150
151
121
125
126
127
82
84
84
84
153
154
156
157
129
133
135
136
85
86
87
87
159
162
165
167
141
144
146
149
89
89
89
89
170
173
176
179
155
158
160
161
91
91
90
91
For description and source of data see "A Revised Index of Manufacturing Capacity," Federal Reserve
Bulletin, November 1966, pp. 1605-1615, Frank de Leeuw, Frank E. Hopkins, and Michael D. Sherman.
See also McGraw-Hill surveys on "Business Plans for New Plants and Equipment" for data on capacity
and
operating rates.
2
Output as percent of capacity; based on unrounded data.
Source: Board of Governors of the Federal Reserve System (output) and sources in footnote 1 (capacity
and utilization rate).
240-782 0—67
253
TABLE B-36.—New construction activity, 1929-66
[Value put in place, millions of dollars]
Private construction
Year or month
Total
new
construction
Residential
building
(nonfarm)
Total
Total i
Public construction
Nonresidential building and
other construction
New
Com- Inhousmer- dusing Total cials
trial
units
Total
State
Fedand
eral
local
funds* funds
Other 3
1929
10,793
8,307
3,625
3,040
4,682
1,135
949
2,598
2,486
235
2,251
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
8,741
6,427
3,538
2,879
3,720
4,232
6,497
6,999
6,980
8,198
5,883
3,768
1,676
1,231
1,509
1,999
2,981
3,903
3,560
4,389
2,075
1,565
630
470
625
1,010
1,565
1,875
1,990
2,680
1,570
1,320
485
290
380
710
1,210
1,475
1,620
2,270
3,808
2,203
1,046
761
884
989
1,416
2,028
1,570
1,709
454
223
130
173
211
290
387
285
292
532
221
74
176
191
158
266
492
232
254
2,383
1,528
749
455
520
620
860
1,149
1,053
1,163
2,858
2,659
1,862
1,648
2,211
2,233
3,516
3,096
3,420
3,809
313
506
444
802
1,347
1,381
2,363
1,893
2,037
2,136
2,545
2,153
1,418
846
864
852
1,153
1,203
1,383
1,673
1940
1941
1942
1943
1944
1945
1946
11,957
14,075
8,301
5,259
5,809
12,627
5,054
6,206
3,415
1,979
2,186
3,411
10,396
2,985
3,510
1,715
885
815
1,276
4, 752
2,560
3,040
1,440
710
570
720
3,300
2,069
2,696
1,700
1,094
1,371
2,135
5,644
348
409
155
33
56
203
1,153
442
801
346
156
208
642
1,279 3,628
1,486 5,751
1,199 10,660
905 6,322
1,107 3,073
1,290 2,398
2,802 2,231
2,128
4,448
9,788
5,877
2,631
1,836
1,109
1,500
1,303
872
445
442
562
1,122
N e w series 8
1946
1947
1948
1949
14,308
20,041
26, 078
26, 722
12,077 6,247
16,722 9,850
21,374 13,128
20,453 12,428
4,795
7,765
10,506
10,043
5,830
6,872
8,246
8,025
1,153 1,689
957 1,702
1,397 1,397
1,182
972
2,988
4,213
5,452
5,871
2,231
3,319
4,704
6,269
1,109
1,249
1,594
1,949
1,122
2,070
3,110
4,320
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
33, 575 26,709 18,126
35,435 26,180 15,881
26,049 15,803
39,136 27, 894 16, 594
41,380 29,668 18,187
46, 519 34,804 21,877
47, 601 34,869 20,178
49,139 35,080 19,006
50,153 34,696 19, 789
55,305 39,235 24, 251
15, 551 8,583
13, 207 10,299
12,851 10,246
13,411 11,300
14,931 11,481
18,242 12,927
16,143 14, 691
14,736 16,074
15,445 14,907
19,233 14,984
1,415
1,498
1,137
1,791
2,212
3,218
3,631
3,564
3,589
3,930
1,062
2,117
2,320
2,229
2,030
2,399
3,084
3, 557
2,382
2,106
6,106
6,684
6,789
7,280
7,239
7,310
7,976
8,953
9,255
10, 779
11,242
11, 712
11,715
12, 732
14,059
15,457
16,070
2,078
3,445
4,735
4,839
4,103
3,508
3,583
4,243
5,493
6,435
4,788
5,810
6,044
6,403
7,609
8,207
9,149
9,816
9,964
9,635
1960
1961
1962
1963
53,941
55,447
59, 576
62, 755
38,078
38,299
41,707
43,859
21,706
21,680
24,292
25,843
16,410
16,189
18,638
20,064
16,372
16,619
17, 415
18, 016
4,180
4,674
4,955
5,200
2,851
2,780
2,949
2,962
9,341
9,165
9,511
9,854
15,863
17,148
17,869
18,896
5,889
6,305
6,469
7,120
9,974
10,843
11, 40G
11, 776
N e w series6
1962
1963
1964
1965
1966 »
59,667
62,968
66, 221
71,930
74,603
41,798
43,642
45,914
49,999
50,628
24,292
25,843
26,507
26, 689
24,616
18,638
20,064
20,612
20,765
5,144 2,842
4,995 2,906
5,406 3,572
6,704 5,086
13,690
9,520
9,898
10, 429
11, 520
12,322
17,869
19, 326 7,120
20, 307 7,311
21,931 7,068
23,975
11, 400
12,206
12,996
14,863
.
17,506
17,799
19, 407
23, 310
18,756 26,012
See footnotes at end of table.
254
TABLE B-36.—New construction activity, 7929-66-—Continued
[Value put in place, millions of dollars]
Public construction
Private construction
Year or month
Total
new
construction
Residential
building
(nonfarm>
Total
Total i
Nonresidential building and
other construction
NewCom- Inhousmer- dus- Other 3
ing Total cial
trial
units
Total
Fed- State
and
eral local
funds4 funds
Seasonally adjusted annual rates
1965: Jan..
Feb..
Mar.
Apr..
May.
June.
68,823
70,361
71,170
71,411
71,973
71,756
47,697
48,927
49,414
49,717
50,132
50,317
26,676
26,713
26,602
26,675
27, 070
27,224
20,845
20,866
20,735
20,762
21, 077
21, 203
21, 021
22,214
22,812
23,042
23,062
23, 093
3,712
4,478
4,969
4,775
5,416
5,426
10,894
11,137
11,243
11,558
11,555
11,468
21,126
21,434
21,756
21,694
21,841
21,439
July.
Aug.
Sept.
Oct..
Nov.
Dec.
70,358
70,863
72,830
72,687
74,039
76, 443
49,122
49,222
50,167
50,084
51,209
53, 445
26,983
26,621
26, 413
26, 343
26,243
26, 684
20,990
20,657
20, 491
20,416
20,340
20,780
22,139 5,882 4,907
22,601 6,239 4,973
23,754 6,977 5,321
23,741 7,056 5,068
24,966 7,706 5,291
26,761 8,017 6,250
11,350
11,389
11,456
11,617
11,969
12, 494
21,236
21,641
22,663
22,603
22,830
22,998
1966: Jan..
Feb.
Mar.
Apr.
May
June.
77,622
78,920
79,499
78,578
76,135
75,894
53,285
54,290
55,066
54, 347
52,284
52,108
27,460
27,463
27, 279
27, 437
27, 023
26,156
21,574
21,554
21,400
21,578
21,146
20,249
25,825 7,846 5,987
26,827 7,294 6,629
27,787 7,672 7,073
26,910 7,097 7,175
25,261 6,126 6,856
25,952 6,343 7,548
11,992
12,904
13,042
12,638
12,279
12,061
24,337
24,630
24,433
24,231
23,851
23,786
July.
Aug.
Sept.
Oct..
Nov.
Dec i
73,827
73,509
73,627
70,309
71,094
70,373
50,061
49,668
49,725
46,754
47,091
46,562
25,115
23,927
23,100
22,012
20,777
20,320
19,193
18, 037
17, 293
16,220
14,971
14,536
24,946
25.741
26,625
24.742
26,314
26,242
11,503
12, 095
12,658
11,911
12,588
12,516
23,766
23,841
23,902
23,555
24,003
23,811
1
2
6,415
6,599
6,600
6,709
6,091
6,199'
6,280
6,482
7,054
6,608
7,028
7,163
7,164
6,913
6,223
6,698
Total includes additions and alterations and nonhousekeeping units not shown separately.
Office buildings, warehouses, stores, restaurants, and garages.
43 Farm, institutional, public utilities, and all other private.
5 Includes Federal grants-in-aid for State and locally owned projects.
New series in 1946 reflects differences due to the new higher level series of housing starts and farm construction expenditures and the reduced level value in place series for public utilities. See Construction
Report
CSO-61 {Supplement) for a description of the differences.
6
New series differs from old in that it reflects differences in 1962 due to the introduction of new series for
private nonresidential buildings and differences in 1963 due to the introduction of new series for State and
locally owned public construction. See Construction Report C30-65S for a description of the differences.
NOTE.—Data for Alaska and Hawaii included beginning 1959.
Source: Department of Commerce, Bureau of the Census.
255
TABLE B-37.—New housing starts and applications forfinancing,1929—66
[Thousands of units]
Housing starts
Private and
public
Private
Private
Nonfarm
Year or
month
Total
(farm
and
nonfarm)
Nonfarm
Proposed
home construction 3
New
private
housing Apunits
Reauthor- plica- quests
Total
ized 2 tions for
(inGovernfor
cludment home
F H A VA
ing
programs
apcom- praisfarm) Total
mit- als
ments
F H A VA
Nonfarm
Total
(inTwo
cludor
ing Total i One- more
farm)
family families
1929
509.0
509.0
316.0
193.0
509.0
1930
1931
1932
1933
1934
330.0
254.0
134.0
93.0
126.0
330.0
254.0
134.0
93.0
126.0
227.0
187.0
118.0
76.0
109.0
103.0
67.0
16.0
17.0
17.0
330.0
254.0
134.0
93.0
126.0
221.0
319.0
336.0
406.0
515.0
215.7
304.2
332.4
399.3
458.4
182.2
238.5
265.8
316.4
373.0
33.5
65.7
66.6
82.9
85.4
215.7 13.2
<20.6
304.2 48.8 : : : : : : ------- 47.8
332.4 57.0
49.8
399.3 106.8
131.1
458.4 144.7
179.8
602.6
706.1
356.0
191.0
141.8
529.6
619.5
301.2
183.7
138.7
447.6
533.2
252.3
136.3
114.6
82.0
86.3
48.9
47.4
24.1
529.6
619.5
301.2
183.7
138.7
New series
1945.
1946
1947
1948
1949
326.1
1,023.2
1,268.5
1,362.1
1,466.1
324.9
1,015.2
1,265.1
1,344.0
1,429.8
1950
1951
1952
1953
1954
1,951.9
1,491.0
1,503.9
1,437.6
1,550.5
1,908.1
1,419.8
1,445.4
1,402.1
1,531.8
1935
1936
1937
1938
1939
.
-.
176.6
217.1
160.2
126.1
83.6
231.2
288.5
238.5
144.4
62.9
324.9
1,015.2
1,265.1
1,344.0
1,429.8
38.9
67.1 9L8
178.3 160.3
216.4 71.1
252.6 90.8
56.6
121.7
286.4
293.2
327.0
1,908.1
1,419.8
1,445.4
1,402.1
1,531.8
328.2
186.9
229.1
216.5
250.9
191.2
148.6
141.3
156.5
307.0
397.7
192.8
267.9
253.7
338.6
164.4
226.3
251.4
535.4
1955
1956
1957
1958...
1959
1,646.0
1,626.6
1,626.6
1,349.1
1,324.9
1,324.9
1,223.9
1,174.8
1,174.8
1,314.2
1,314.2
1,382.0
1,553.5 1,531.3 1,516.8 1,494.6 1,212.1 ~~282~5 1,516.8 1,494.6
268.7
183.4
150.1
270.3
307.0
392.9
270.7
128.3
102.1
109.3 1,208.3
306.2
197.7
198.8
341.7
369.7
620.8
401.5
159.4
234.2
234.0
1960
1961
1962
1963
1964
1,296.0 1,274.0 1,252.1 1,230.1
1,365.0 1,336.8 1,313.0 1,284.8
1,492.4 1,468. 7 1,462.7 1,439.0
1,641.0 1,613.4 1,609.2 1,581.7
1,590.7 1,563.7 1,557.4 1,530.4
972.7
946.2
967.8
993.2
944.5
257.4
338.6
471.2
588.5
585.9
1,252.1 1,230.1
1,313.0 1,284.8
1,462.7 1,439.0
1,609.2 1,581.7
1,557.4 1,530.4
225.7
198.8
197.3
166.2
154.0
242.4
243.8
221.1
190.2
182.1
142.9
177.8
171.2
139.3
113.6
1965
1966 »
1,542.7 1,520.4 1,505.0 1,482.7
1,252.3 1,229.0 1,220.5 1,197.2
940.0
772.9
542.7 1,505.0 1,482.7 159.9
424.3 1,220.5 1,197.2 129.1
1940
1941
1942
1943
1944
—
See footnotes at end of table.
256
74.6
83.3
77.8
71.0
59.2
998.0
1,064.2
1,186.6
1,334.7
1,285.8
52.5 1,240.6 188.9 102.1
40.5
966.4 153.0 99.2
TABLE B-37.—New housing starts and applications for financing, 1929-66—Continued
[Thousands of units]
Housing starts
Private and
public
Year or
month
Proposed
home construction 3
Private
Private
New
private
housing
Nonfarm
Nonfarm
Reunits
Total
Total
Total
author- plica- quests
Governized 2 tions for
(in(farm Non- (inTwo cludfor VA
ment home
and
cludFHA
apor
ing
ing
non- farm
Oneprograms
com- praisfarm)
farm) Total i family more farm) Total
als
ments
lies"
F H A VA
Seasonally adjusted annual rates
1965: Jan..
Feb..
Mar..
Apr..
MayJune .
July..
Aug..
Sept
Oct.V
Nov.Dec.
1966: Jan__
Feb..
Mar..
Apr..
May.
85.6
87.9
124.9
154.9
162.1
162.3
84.2
87.1
123.0
152.8
159.8
159.7
81.4
85.4
120.7
152.2
157.5
155.5
80.1
84.7
118.8
150.1
155.2
152.8
50.4
50.7
74.8
97.7
99.9
97.0
29.7
34.0
44.0
52.4
55.3
55.8
1,442
L,482
1,489
:L,552
1,516
L,566
1,417
1,468
1,465
L,532
L,501
1,539
168
164
163
146
155
154
67
61
56
50
54
54
1,273
1,226
1,245
1,204
1,243
1,245
196
194
175
187
180
154
107
116
106
100
113
100
143.9
138.0
125.9
135.7
118.3
103.2
141.6
136.2
124.3
133.0
117.1
101.6
141.3
134.7
124.3
133.6
116.1
102.3
139.0
132.8
122.7
130.9
114.9
100.8
91.8
86.5
78.4
84.4
70.2
58.3
47.2
46.3
44.3
46.5
44.7
42.5
]L,473
31,427
1,453
1,411
1,547
1,769
]L,447
1,409
1,436
1,380
1,531
1,735
151
148
160
167
173
189
52
48
47
49
54
48
1,234
1,228
1,180
1,244
1,280
1,292
165
186
189
192
222
219
95
95
97
94
100
105
87.3
81.0
130.9
149.2
139.3
130.7
86.3
79.5
128.7
146.9
136.1
128.3
84.6
78.2
126.3
147.1
135.4
127.5
83.7
76.7
124.1
144.8
132.2
125.1
47.2
45.3
78.7
93.0
84.8
81.4
36.5
31.4
45.4
51.8
47.4
43.7
1,611
1,374
1,569
1,502
1,318
1,285
1,585
1,349
1,538
1,481
1,287
1,261
181
177
187
151
128
121
53
40
45
37
38
44
1,255
1,197
1,268
1,185
1,098
954
214
179
160
168
133
127
89
72
92
111
98
90
103.1
105.2
93.0
80.6
75.8
65.3
104.0
105.4
92.4
80.2
74.8
64.4
102.3
103.3
90.2
78.1
73.5
63.2
69.7
69.1
60.1
53.0
49.2
41.6
32.6
34.2
30.1
25.1
24.3
21.6
1,088
1,107
1,075
848
1,007
1,102
1,068
1,084
1,050
826
988
1,079
117
113
96
94
107
105
42
35
37
38
40
42
921
844
733
714
715
124
119
151
122
135
203
99
104
102
119
103
104
June.
July.. 104.8
Aug- 107.3
95.2
Sept
82.8
Oct..
Nov*. 77.1
Dec*. 66.5
1
772
Military housing starts, including those financed with mortgages insured by FHA under Section 803
of the National Housing Act, are included in publiclyfinancedstarts but excluded from total private starts
and
from FHA starts.
2
Data beginning 1963 cover approximately 12,000 permit-issuing places. Data for 1959-62 are based on
reports from approximately 10,000 places. In 1963, the additional 2,000 permit-issuing places accounted
for3 almost 50,000 new privately owned housing unit authorizations.
Units in mortgage applications or appraisal requests for new home construction.
*5 FHA program approved in June 1934; all 1934 activity included in 1935.
Monthly estimates for September 1945-May 1950 were prepared by Housing and Home Finance Agency.
NOTE.—Census series beginning 1945 include Alaska and Hawaii. FHA and VA series include Alaska,
Hawaii, and Puerto Rico for all periods.
Sources: Department of Commerce (Bureau of the Census), Department of Housing and Urban Devel
opment, Federal Housing Administration (FHA), and Veterans Administration (VA), except as noted
257
TABLE B-38.—Business expenditures for new plant and equipment, 1939 and 1945-67
[Billions of dollars]
Manufacturing
Total i
Year or quarter
Total
1939
__
Transportation
Dura- Non- Mining Raildurable
ble
road
goods goods
Com-
Public merutilicial
ties
and
Other
other 2
5.51
1.94
0.76
1.19
0.33
0.28
0.36
0.52
2 08
8.69
14.85
20.61
22.06
19.28
3.98
6.79
8.70
9.13
7.15
1.59
3.11
3.41
3.48
2.59
2.39
3.68
5.30
5.65
4.56
.38
.43
.69
.88
.79
.55
.58
.89
.50
.79
1.32
1.35
.57
.92
1.30
1.28
.89
1.54
2.54
3.12
2 70
5 33
7 49
6 90
5.98
20.60
25.64
26.49
28.32
26.83
7.49
10.85
11.63
11.91
11.04
3.14
5.17
5.61
5.65
5.09
4.36
5.68
6.02
6.26
5.95
.71
.93
1.11
1.47
1.40
1.31
.85
1.21
1.49
1.50
1.56
1.51
3.31
3.66
3.89
4.55
4.22
6.78
7 24
7 09
8.00
8.23
28.70
35.08
36.96
30.53
32.54
11.44
14.95
15.96
11.43
12.07
5.44
7.62
8.02
5.47
5.77
6.00
7.33
7.94
5.96
6.29
.96
.92
1.24
1.24
.94
1.23
1.40
.75
1.60
1.71
1.77
1.50
2.02
4.31
4.90
6.20
6.09
5.67
9.47
11.05
10.40
9.81
10.88
1960
1961
1962
1963
1964
35.68
34.37
37.31
39.22
44.90
14.48
13.68
14.68
15.69
18.58
7.18
6.27
7.03
7.85
9.43
7.30
7.40
7.65
7.84
9.16
1.08
1.04
1.19
1.10
1.41
1.94
1.85
2.07
1.92
2.38
5.68
5.52
5.48
5.65
6.22
11.57
11.68
13.15
13.82
15.13
1965 3
1966
51.96
60.56
22.45
27.01
11.40
14.04
11.05
12.97
1.30
1.47
1.73
1.94
2.81
3.48
6.94
8.31
16.73
18.36
1.40
L 25
.50
55
2.30
2.25
2.40
2.60
5.95
6.30
6.30
6.35
14.35
14.75
15.40
15.80
,75
6.80
6.85
6.75
7.30
15.85
16.40
17.00
17.55
1945
1946 _
1947
1948
1949 - -
__
1950
1951
1952
1953
1954
- -
1955
1956
1957
1958.
1959
_
- --
.
.98
.99
.98
.99
.92
.99
.98
1.03
.67
.85
Seasonally adjusted annual rates
1964: I
II
III
IV
42.55
43.50
45.65
47.75
17.40
17.80
18.85
20.15
8.85
9.00
9.60
10.15
8.55
8.80
9.20
10.00
1.15
1965: I
II
III
IV
20.75
21.55
23.00
24.15
10.40
10.80
11.75
12.45
10.40
10.70
11.25
11.70
25
.30
.
49.00
50.35
52.75
55.35
L.35
95
2.55
2.70
3.00
3.00
__
58.00
60.10
61.25
62.60
25.60
26.80
27.55
27.80
13.15
13.85
14.35
14.65
12.45
12.95
13.20
13.15
1.40
L.55
1.45
1,45
1.75
2.00
1.85
2.15
3.30
3.50
3.40
3.70
8.25
8.30
8.55
8.15
17.70
17.95
18.45
19.25
63.45
64.05
27.85
28.45
14.70
15.10
13.15
13.35
1.50
2.00
3.65
35.60
9.30
19.15
1966: I
II
III
IV 3
1967: I 3
113
1
15
1.20
30
L.55
70
Excludes agriculture.
2 Commercial and other includes trade, service,finance,communications, and construction.
3 Estimates based on anticipated capital expenditures reported by business in late October and November 1966. The quarterly anticipations include adjustments, when necessary, for systematic tendencies in
anticipatory data.
NOTE.—Annual total is the sum of unadjusted expenditures; it does not necessarily coincide with the
average of seasonally adjusted figures.
These figures do not agree precisely with plant and equipment expenditures included in the gross
national product estimates of the Department of Commerce. The main difference lies in the inclusion
in the gross national product of investment by farmers, professionals, institutions, and real estate firms,
and of certain outlays charged to current account.
These series are not available for years prior to 1939 and for 1940 to 1944.
Sources: Department of Commerce (Office of Business Economics) and Securities and Exchange
Commission.
258
TABLE B-39.—Sales and inventories in manufacturing and trade, 1947-66
[Amounts in millions of dollars]
Total manufacturing and trade
Merchant
wholesalers
Manufacturing
Retail trade
Year or month
InvenInven-2
InvenInventories Ratio 3 Sales i tories2 Ratio 3 Sales i tories 2 Ratio 3 Sales i tories2 Ratio s
1947..
1948..
1949..
35,260 52,507
33,788 49,497
15,513 25,897
1.42 17,316 28,543
1.53 16,126 26,321
1.58
1.57
1.75
6,808
6,514
1950..
1951..
1952..
1953..
1954..
38,596
43,356
44,840
47,987
46,443
59,822
70,242
72,377
76,122
73,175
1.36
1.55
1.58
1.
1.60
18,634
21,714
22,529
24,843
23,355
31,078
39,306
41,136
43,948
41,612
1.48
1.66
1.78
1.76
1.81
9,284
7,1
8,597 9,886
8,782 10,210
9,052
10,637
1.07
1.16
1.12
1.17
1.18
12,268
13,046
13,529
14,091
14,095
19,460
21,050
21,031
21,488
20,926
.64
.52
.53
.51
1955..
1956..
1957..
19581959..
51,694
54,063
55,879
54,233
59,661
79,516
87,304
89,052
86,922
91,891
1.47
1.55
1.59
1.60
1.50
26,480
27,740
28,736
27,280
30,219
45,069
50,642
51,871
50,070
52,707
1.62
1.73
1.80
1.84
1.70
9,893
10,513
10,475
10,257
11,491
11,678
13,260
12,730
12,739
13,879
1.13
1.19
1.23
1.24
1.15
15,321
15,811
16,667
16,696
17,951
22,769
23,402
24,451
24,113
25,305
.43
.47
.44
.43
.40
I960..
1961196219631964..
60,746 94,747
61,106 95,813
65,594 100,627
68,692
692 105,578
105578
73,459 111,051
1.56
1.54
1.50
1.49
1.47
30,796
30,884
33,308
34,774
37,129
53,814
55,087
57,753
60,147
62,944
1.76
1.74
1.70
1.
1.64
11,656
11,988
12,674
13,382
14,527
14,120
14,488
14,f
16,048
16,977
1.22
1.20
1.16
1.15
1.13
18,294
18,234
19,613
20,536
21,802
26,813
26,238
27,938
29,383
31,130
.45
.43
.38
.39
.40
1965—
1966 <_
79,536120,896
86,221 133,825
1.46 40,279 68,015
1.48 43,900 76,900
1.14 23,662 34,607
1.13 25,307 36,734
1.39
1.42
7,957
7,706
1.61 15, 595 18,274
1.65 17,014 20,191
10,200 14,241
1.13 11,135 16,007
1.19 11,149 15,470
1.26
.39
.41
Seasonally adjusted
1965: Jan
Feb....
Mar--.
Apr
May.-.
June...
76,867 112,099
76,558 112,419
78,734 113,661
78,330114,392
78,643 115,091
78,805 115,742
1.46
1.47
1.44
1.46
1.46
1.47
38,885
38,693
40,285
40,044
39,814
39,943
63,213
63,382
63,708
63,999
64,269
64,625
1.63
1.64
1.58
1.60
1.61
1.62
15,046
14,789
15,593
15,437
15,512
15,540
17,273
17,368
17,574
17,671
17,882
17,873
1.15
1.17
1.13
1.14
1.16
1.15
22,936
23,076
22,856
22,849
23,317
23,322
31,613
31,669
32,379
32,722
32,940
33,244
1.38
1.37
1.42
.43
.41
.43
July--.
Aug..-.
Sept-__
Oct.--_
Nov__Dec—.
80,776 116,697
.7,712
79,685 117,
79,610 117,
.7,907
80,655 118,432
82,214 119,279
83,591 120,896
1.44
1.48
1.48
1.47
1.45
1.45
41,452
40,518
40,173
40,548
41,403
42,622
65,394
65,788
66,267
66,642
67,192
68,015
1.58
1.62
1.65
1.64
1.62
1.60
15,656
15,582
15,684
15,777
16,164
16,153
17,907
17,933
18,055
18,123
18,171
18,274
1.14
1.15
1.15
1.15
1.12
1.13
23,668
23.585
23,753
24,330
24,647
24,816
33,396
33,991
33,585
33,667
33,916
34,607
.41
.44
.41
.38
.38
.39
1966: Jan
Feb....
Mar
Apr
May...
June
84, 669 121,570
84,530 122,542
86,991 123,630
85,455 124,700
85,426 126,179
86,957 127, 584
1.44
1.45
1.42
1.46
1.48
1.47
42,665
42,702
44,121
43,540
44,071
44,125
68,594
69,040
69,648
70,346
71,103
71,949
1.61
1.62
1.
1.62
1.61
1.63
16,981
16, 779
17,334
16,966
16,880
17,438
18,231
18,580
18,881
19,008
19,149
19,310
07
11
09
12
13
11
86,678
86,995
86,775
87,066
1.48
1.49
1.51
1.6!
1.54
44,327
44,206
44,091
44,487
44,503
72,958
74,110
74,884
75,788
76,854
1.65
1.68
1.70
1.70
1.73
16,989
17,217
16,981
17,029
16,790
19,444
19,742
19,600
19,924
20,191
.14
.15
.15
17
1.20
July--.
Aug
Sept...
Oct.-.
Nov »..
Dec v_ _
128,714
130,043
130,839
132,392
25,023 34,745
25,049 34,922
25, 536
24,949
24,475
25,394
35,101
35,346
35,927
36,325
.38
.37
.42
.47
.43
25,362
25,572
25,703
25,550
25,706
25,362
36,312
36,191
36,355
36,680
36,734
.43
.42
1.41
.44
.43
1 Monthly average for year and total for month.
Seasonally adjusted, end of period.
Inventory/sales ratio. For annual periods, ratio of weighted average inventories to average monthly
sales; for monthly data, ratio of inventories at end of month to sales for month.
* Where December data not available, data for year calculated on basis of no change from November.
2
8
NOTE.—The inventory figures in this table do not agree with the estimates of change in business inventories included in the gross national product since these figures cover only manufacturing and trade rather
than all business, and show inventories in terms of current book value without adjustment for revaluation.
Data for Alaska and Hawaii included beginning 1958 for manufacturing, beginning 1960 for retail trade,
and beginning 1961 for merchant wholesalers.
Source: Department of Commerce (Office of Business Economics and Bureau of the Census).
259
TABLE B-40.—Manufacturers'
shipments and inventories, 1947—66
[Millions of dollars]
Inventories 2
Durable goods industries Nondurable goods industries
Nondurable
MateMategoods Total
rials Work Finrials Work Finindusin
ished Total and
in
ished
Total and
tries
sup- process goods
sup- process goods
plies
plies
Shipments x
Year or month
Durable
goods
Total
industries
1947..
19481949..
15,513
17,316
16,126
7,579
7,191
1950..
1951..
195219531954..
18,634
21,714
22,529
24,843
23,355
1955..
1956..
19571958..
1959..
8,845
10,493
11,313
13,349
11,828
8,819 25,897
,
13,061
9738
738 28,543
28543 14,662
9,
935
26321
13,060
8,935 26,321
9,789 31
1,078
15,539
V
11,22139,
9,306 20,991
11,216 41,
1,136 23,731
11,494 43,
3,948 25,878 8,966 10,720
11,527 41,612 23, 710 7,894 9,721
15,539
18,315
17,405
6,206 18,070
6,040 17,902
8,317
8,167
2,472
2,440
7,409
7,415
26,480
27,740
28,736
27,280
30,219
14,071
14,715
15,237
13,572
15,544
5,069 26,405 9,194 10,756
13; 025 50,642 30,447 10,417 12,317
13,499 51,87131,728 10,608 12,837
13,708 50,070 30,095 9,847 12,294
10,585 12,952
6,348 18,664
7,565 20,195
8,125 20,143
7,749 19,975
8,143 20,868
8,556
8,971
8,775
8,671
9,089
2,571
2,721
2,864
2,800
2,928
7,666
8,622
8,624
8,498
8,857
19601961..
1962..
19631964-
30,796
30,884
33,308
34,774
37,129
15,817
15,532
17,184
18,071
19,231
14,979 53,814 32,360
15,352 55,087 32,646
16,124 57,753 34,326
16,704 60,147 36,028
17,898 62,944 38, "~
12,780 9,190 21,454
13,225 9,088 22,441
14,129 9,593 23,427
14,857 10,292 24,119
15,933 10,791 24,532
9,113
9,511
9,770
9,769
9,619
2,935 9,353
3,120 9,707
3,304 10,246
3,479 10,871
3,522 11,391
1965 1966 3
40,279 21,020
43,900 22,900
19,258 68,015 42,324 12,943 18,109 11, 27225,691 9,964
21, 000 76,900 49, 300 14,500 22, 000 12,800 27, 600 10,600
3,862 11,865
4,300 12,700
10,286
10,234
10,571
10,879
11,688
12,836
13,881
13,261
Seasonally adjusted
1965: Jan
Feb
Mar
Apr
May
June
July.
Aug..
Sept_
Oct..
Nov-.
Dec-.
1966: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov P
Dec*>_._
38,885
38,693
40,285
40,044
39, 814
39,943
20,415
20,374
21,284
20,915
20, 513
20,652
18,470 63,213 38,495 11,802
1,692 11,876
18,319 63,382 38;
19,001 63,708 38,972 12,068
19,129 63,999) 39,233 12,406
39,475 12,512
19,301 64,269I39,475
19,291 64,t; 625 39,951 12,537
15,934
16,008
16,041
16,114
16,162
16,533
10, 75924,718
10,808 24,690
10,863 24, 736
10, 713 24,766
10,801 24,794
10,881 24,674
9,585
9,541
9,557
9,660
9,675
9,608
3,532
3,531
3,533
3,533
3,558
3,611
11,601
11,618
11,646
11,573
11,561
11,455
41,452
40,518
40,173
40, 548
41,403
42,622
21,820
21,191
20,924
21,146
21,606
22,316
19,632 65,394 40,600 12,664
19,327 65,788 40,814 12,672
19,249 66, 267 41,300 12,812
19, 402 66, 642 41,523 12,886
19,797 67,192 41,869 12,914
20,306 68, 015 42, 324 12,943
17,053
17,283
17,380
17, 502
17,763
18,109
10; 883 24,794
10,859 24,974
11,108 24,967
11,135 25,119
11,192 25,323
11,272 25,691
9,537
9,645
9,766
9,769
9,827
9,964
3,591
3,662
3,702
3,825
3,823
3,862
11,666
11,667
11,499
11,525
11,673
11,865
42,665
42,702
44,121
43,540
44,071
44,125
22,307
22,433
23,238
22,708
22,915
22,898
20,358 88,594 42, 589
20,269 69,040 42,884
20,883 69,648 43,273
20,832 70,346 43,779
21,156 71,103 44,275
21,227 71,949 45, 003
12,951
13,004
12,988
13,146
13,298
13,507
18,285
18,468
18,807
19,141
19,302
19,693
11,353 26,•,005
11,412 26,i, 156
11,478 26,375
11,492 26,567
11,675 26,828
11,803 26,946
10,028
10,072
10,153
10,309
10,439
10,562
3,876 12,101
3,877 12,207
12,329
3,913 12,345
3,991 12,398
4,044 12,340
44,327
44,206
44,091
44, 487
44, 503
23,031
22,874
22,971
23, 451
23, 349
23,813
21,296 72,958 45,790 13, 653
21,332 74,110 46,814 13,997
21,120 74,884 47,568 14,309
21, 036 75,788 48, 352 14, 465
21,154 76,854 49, 240 14, 521
20,235
20,698
20,949
21, 446
21,952
11,902 27,168
12,119 27,296
12, 310 27,316
12, 441 27, 436
12,767 27,614
10,506
10,615
10, 579
10,542
10,655
4,062
4,126
4,169
4,251
4,263
1
12,600
12,555
12,568
12,643
12,696
Monthly average for year and total for month.
Book value, seasonally adjusted, end of period.
3 Where December data not available, data for year calculated on basis of no change from November.
NOTE.—Data for Alaska and Hawaii included beginning 1958.
Source: Department of Commerce, Bureau of the Census.
2
260
TABLE B-41.—Manufacturers*
new and unfilled orders, 1947—66
[Amounts in millions of dollars]
Unfilled orders2
New orders *
Durable goods
industries
Year or month
Total
Nondurable
Machin- goods
Total
and indusTotal ery
equip- tries
ment
NonDura- durable
ble
goods goods
indus- industries
tries
194719481949-
15,256
17,692
15,614
8,126
9,566
8,981
34,415
30,717
24,506
28,532
26,601
20,018
5,883
4,116
4,488
1950..
1951195219531954-
20,110
23,907
23,203
23,533
22,313
10,165
12,841
12,061
12,105
10,743
2,084
1,770
9,945
11,066
11,142
11,428
11,570
43,055
69,785
75,649
61,178
48,266
36,838
65,835
72,480
58,637
45,250
6,217
3,950
3,169
2,541
3,016
19551956195719581959-
27,423
27,514
26,901
30,679
14,954
15,381
14,073
13,170
15,951
2,499
2,870
2,566
2,354
2,878
12,469
13,002
13,441
13,731
14,728
60,004
67,375
53,183
48,882
54,494
56,241
63,880
50,352
45,739
50,654
3,763
3,495
2,831
3,143
3,840
19601961196219631964-
30,115
31,061
33,167
35,036
37,697
15,223
15,664
17,085
18,300
19,803
2,791
2,854
3,090
3,326
3,706
14,892
15,397
16,082
16,736
17,895
46,133 43,401
48,343 45,173
46,784 44,094
49,796 46,676
57,044 53,958
1965..
1966 f
41,023
45,000
21,728
24,100
4,140
4,800
19,295
20,900
66,068
79,600
62,534
76,200
Unfilled orders-shipments ratio 3
Total
NonDura- durable
ble
goods goods
indus- industries
tries
3.42
4.12
0.96
3.87
3.35
4.27
4.55
4.00
1.12
1.C4
.85
2,732
3,170
2,690
3,120
3,086
2.52
2.44
2.36
2.45
3.01
2.94
2.85
2.96
.76
.65
.66
.61
3,534
3,400
2.61
2.98
3.16
.64
.58
Seasonally adjusted
1965: Jan...
Feb..
Max..
Apr..
May..
June..
39,704
39,469
40,712
41,120
40,181
40,689
21,271
21,130
21,714
22,043
20,992
21,310
3,958
3,799
4,024
4,078
4,069
4,091
18,433
18,339
18,998
19,077
19,189
19,379
57,317
58,160
58,595
59,463
59,897
60,588
54,280
55,092
55,531
56,374
56,875
57,454
3,037
3,068
3,064
3,089
3,022
3,134
2.48
2.53
2.46
2.51
2.56
2.58
3.01
3.07
2.98
3.04
3.13
3.15
0.60
.61
.59
.60
.57
.60
July..
Aug..
Sept..
Oct..
Nov.
Dec..
41,846
40,926
41,483
41,843
42,234
43,868
22,195
21,509
22,163
22,425
22,389
23,403
4,348
4,159
4,153
4,249
4,325
4,583
19,651
19,417
19,320
19,418
19,845
20,465
60,981
61,391
62,699
63,993
64,821
66,068
57,830
58,148
59,385
60,664
61,445
62,534
3,151
3,243
3,314
3,329
3,376
3,534
2.48
2.57
2.66
2.69
2.65
2.61
3.02
3.12
3.23
3.28
3.23
3.16
.58
.62
.64
.63
.62
.64
: Jan...
Feb...
Mar..
Apr...
May..
June..
43,986
44,129
45,833
45,064
45,321
45,833
23,578
23,741
24,888
24,197
24,276
24,593
4,450 20,408
4,584 20,388
4,587 20,945
4,788 20,867
4,845 21, 045
4,753 21,240
67,388
68,814
70,527
72,049
73,297
75, 009
63,803
65,110
66,762
68,250
69,609
71,308
3,585
3,704
3,765
3,799
3,688
3,701
2.65
2.71
2.69
2.78
2.79
2.86
3.21
3.28
3.25
3.37
3.40
3.50
.65
.68
.66
.68
.64
.64
July..
Aug__
sept—
Oct.—
Nov *.
Dec *>_
45,625
44,842
46,318
45,243
44,176
24,371
23,512
25,274
24,244
23,146
23,885
5,092
4,813
4,906
4,816
4,685
4,685
76,310
76,942
79,170
79,923
79,596
72,651
73,286
75,591
76,382
76,179
76,253
3,659
3,656
3,579
3,541
3,417
2.83
2.89
2.97
3.00
2.98
3.49
3.54
3.64
3.67
3.66
.61
.62
.61
.60
21,254
21,330
21, 044
20,999
21,030
1 Monthly average for year and total for month.
Seasonally adjusted, end of period.
Ratio of shipments for period to unfilled orders at end of period. Annual figures relate to seasonally
adjusted data for December.
* Where December data not available, data for year calculated on basis of no change from November.
NOTE.—Data for Alaska and Hawaii included beginning 1958.
2
3
Source: Department of Commerce, Bureau of the Census.
26l
PRICES
TABLE B-42.—Consumer price indexes, by major groups, 1929-66
For city wage earners and clerical workers
[1957-59=100]
Year or month
All
items Food
Housing
Total Rent
ApRead- Other
parel Trans- Medi- Per- ing
and goods
and porta- cal sonal recreaand
up- tion care care
tion
services
keep
1929
59.7
55.6
85.4
55.3
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
58.2
53.0
47.6
45.1
46.6
47.8
48.3
50.0
49.1
48.4
52.9
43.6
36.3
35.3
39.3
42.1
42.5
44.2
41.0
39.9
56.3
57.1
59.1
60.1
59.7
83.1
78.7
70.6
60.8
57.0
56.9
58.3
60.9
62.9
63.0
54.1
49.2
43.6
42.1
46.1
46.5
46.9
49.3
49.0
48.3
49.4
49.8
50.6
51.0
49.8
49.4
49.6
50.0
50.2
50.2
42.6
43.2
45.7
46.7
46.5
50.2
51.0
52.5
54.3
54.4
52.7
52.6
54.0
54.5
55.4
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
48.8
51.3
56.8
60.3
61.3
62.7
68.0
77.8
83.8
83.0
40.5
44.2
51.9
57.9
57.1
58.4
66.9
81.3
88.2
84.7
59.9
61.4
64.2
64.9
66.4
67.5
69.3
74.5
79.8
81.0
63.2
64.3
65.7
65.7
65.9
66.1
66.5
68.7
73.2
76.4
48.8
51.1
59.6
62.2
66.7
70.1
76.9
89.2
95.0
91.3
49.5
51.2
55.7
55.5
55.5
55.4
58.3
64.3
71.6
77.0
50.3
50.6
52.0
54.5
56.2
57.5
60.7
65.7
69.8
72.0
46.4
47.6
52.2
57.6
61.7
63.6
68.2
76.2
79.1
78.9
55.4
57.3
60.0
65.0
72.0
75.0
77.5
82.5
86.7
89.9
57.1
58.2
59.9
63.0
64.7
67.3
69.5
75.4
78.9
81.2
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
83.8
90.5
92.5
93.2
93.6
93.3
94.7
98.0
100.7
101.5
85.8
95.4
97.1
95.6
95.4
94.0
94.7
97.8
101.9
100.3
83.2
88.2
89.9
92.3
93.4
94.1
95.5
98.5
100.2
101.3
79.1
82.3
85.7
90.3
93.5
94.8
96.5
98.3
100.1
101.6
90.1
98.2
97.2
96.5
96.3
95.9
97.8
99.5
99.8
100.6
79.0
84.0
89.6
92.1
90.8
89.7
91.3
96.5
99.7
103.8
73.4
76.9
81.1
83.9
86.6
88.6
91.8
95.5
100.1
104.4
78.9
86.3
87.3
88.1
88.5
90.0
93.7
97.1
100.4
102.4
89.3
92.0
92.4
93.3
92.4
92.1
93.4
96.9
100.8
102.4
82.6
86.1
90.6
92.8
94.3
94.3
95.8
98.5
99.8
101.8
1960
1961
1962
1963
1964
1965
1966
103.1
104.2
105.4
106.7
108.1
109.9
113.1
101.4
102.6
103.6
105.1
106.4
108.8
114.2
103.1
103.9
104.8
106.0
107.2
108.5
111.1
103.1
104.4
105.7
106.8
107.8
108.9
110.4
102.2
103.0
103.6
104.8
105.7
106.8
109.6
103.8
105.0
107.2
107.8
109.3
111.1
112.7
108.1
111.3
114.2
117.0
119.4
122.3
127.7
104.1
104.6
106.5
107.9
109.2
109.9
112.2
104.9
107.2
109.6
111.5
114.1
115.2
117.1
103.8
104.6
105.3
107.1
108.8
111.4
114.9
1965: Jan..
Feb.
Mar.
Apr.
May
June
108.9
108.9
109.0
109.3
109.6
110.1
106.6
106.6
106.9
107.3
107.9
110.1
108.1
108.2
108.2
108.2
108.2
108.2
108.4
108.5
108.7
108.8
108.8
108.8
105.6
105.8
106.0
106.3
106.8
106.9
111.1
110.6
110.6
111.0
111.4
111.2
120.6
121.0
121.4
121.6
121.8
122.2
110.0
110.1
110.4
110.7
111.0
111.0
115.0
115.2
115.4
115.9
115.9
115.7
109.3
109.4
109.5
110.3
110.6
111.0
July.
Aug.
Sept.
Oct..
Nov.
Dec.
110.2
110.0
110.2
110.4
110.6
111.0
110.9
110.1
109.7
109.7
109.7
110.6
108.3
108.2
108.6
109.0
109.2
109.4
108.9
109.0
109.1
109.2
109.3
109.5
106.1
106.4
107.2
107.8
108.1
108.1
111.5
111.0
111.0
111.2
111.5
111.6
122.7
122.8
122.8
123.0
123.4
123.7
108.7
109.0
109.2
109.2
109.6
110.0
114.6
114.3
114.8
115.2
115.4
115.4
111.5
112.6
112.7
113.3
113.3
113.4
1966: Jan..
Feb.
Mar.
AprMay
June
111.0
111.6
112.0
112.5
112.6
112.9
111.4
113.1
113.9
114.0
113.5
113.9
109.2
109.4
109.6
110.3
110.7
111.1
109.7
109.8
109.9
110.1
110.2
110. 2
107.3
107.6
108.2
108.7
109.3
109.4
111.2
111.1
111.4
112.0
112.0
112.2
124.2
124.5
125.3
125.8
126.3
127.0
110.4
110.8
111.0
111.6
112.0
112.2
115.7
115.9
116.6
116.8
116.8
117.0
113.4
July.
Aug.
Sept.
Oct..
Nov.
Dec.
113.3
113.8
114.1
114.5
114.6
114.7
114.3
115.8
115.6
115.6
114.8
114.8
111.3
111.5
111.8
112.2
112.6
113.0
110.3
110.6
110.7
111.0
111.2
111.3
109.2
109.2
110.7
111.5
112.0
112.3
113.5
113.5
113.3
114.3
114.5
113.8
127.7
128.4
129.4
130.4
131.3
131.9
112.5
112.7
113.0
113.3
113.4
113.7
117.2
117.4
117.5
118.0
118.3
118.4
115.:
115..
115.'
115. {
116. (
115. <
--._.
Source: Department of Labor, Bureau of Labor Statistics.
262
113. e
113.8
114.:
114.7
114. £
TABLE B-43.—Consumer price indexes, by special groups, 1935-66
For city wage earners and clerical workers
[1957-59=100]
Year or month
Commodities
Services
All
All
Commodities less food
All items items All
All
items
All
servcomshelfood
Food
services
Rent
ter modiNon- ices
less
All Duraties
rent
ble durable
1935
1936
1937
1938
1939
47.8
48.3
50.0
49.1
48.4
52.5
53.0
54.9
55.5
55.1
46.1
46.7
48.2
46.8
46.0
45.0
45.6
47.4
45.6
44.7
42.1
42.5
44.2
41.0
39.9
50.2
50.8
53.0
53.0
52.1
47.1
47.8
50.8
51.7
50.6
48.8
49.2
51.2
50.9
50.1
52.2
52.8
54.4
55.4
55.5
56.9
58.3
60.9
62.9
63.0
49.3
49.0
49.5
49.9
49.9
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
48.8
51.3
56.8
60.3
61.3
62.7
68.0
77.8
83.8
83.0
55.3
56.9
60.9
62.6
65.0
66.5
69.4
75.8
81.3
82.1
46.3
49.1
55.3
59.5
60.5
62.1
68.4
79.4
85.6
84.1
45.1
48.2
55.2
60.1
60.8
62.6
69.4
83.4
89.4
87.1
40.5
44.2
51.9
57.9
57.1
58.4
66.9
81.3
88.2
84.7
52.4
55.0
61.2
63.8
67.3
70.0
74.4
83.9
90.3
89.0
50.2
53.6
60.9
62.9
68.7
73.9
77.3
83.8
89.9
91.2
50.6
52.8
58.4
60.9
64.0
66.3
71.1
81.7
88.0
86.3
55.7
56.4
58.2
59.3
60.7
61.5
62.7
65.3
69.4
72.6
63.2
64.3
65.7
65.7
65.9
66.1
66.5
68.7
73.2
76.4
50.0
50.6
52.8
55.2
57.9
59.1
61.2
64.3
68.0
71.4
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
90.5
92.5
93.2
93.6
93.3
94.7
98.0
100.7
101.5
83.1
88.4
90.5
92.3
92.8
93.1
94.7
97.9
100.1
102.0
84.7
91.8
93.6
93.9
93.9
93.4
94.7
97.8
100.7
101.5
87.6
95.5
96.7
96.4
95.5
94.6
95.5
98.5
100.8
100.9
85.8
95.4
97.1
95.6
95.4
94.0
94.7
97.8
101.9
100.3
95.6
96.4
96.6
95.6
94.9
95.9
98.8
99.9
101.2
92.2
99.2
100.5
99.8
97.3
95.4
95.4
98.5
100.0
101.5
86.2
92.7
93.2
94.0
94.4
94.4
96.5
99.1
99.8
101.0
75.0
78.9
82.4
86.0
88.7
90.5
92.8
96.6
100.3
103.2
79.1
82.3
85.7
90.3
93.5
94.8
96.5
98.3
100.1
101.6
73.4
77.8
81.5
84.9
87.4
89.4
91.9
96.1
100.2
103.6
103.1
104.2
105.4
106.7
108.1
109.9
113.1
103.7
104.8
106.1
107.4
108.9
110.4
113.0
103.0
104.2
105.4
106.7
108.0
109.6
112.9
101.7
102.3
103.2
104.1
105.2
106.4
109.2
101.4
102.6
103.6
105.1
106.4
108.8
114.2
101.7
102.0
102.8
103.5
104.4
105.1
106.5
100.9
100.8
101.8
102.1
103.0
102.6
102.7
102.6
103.2
103.8
104.8
105.7
107.2
109.7
106.6
108.8
110.9
113.0
115.2
117.8
122.3
103.1
104.4
105.7
106.8
107.8
108.9
110.4
107.4
110.0
112.1
114.5
117.0
120.0
125.0
1965: Jan..
Feb.
Mar.
Apr.
May.
June.
108.9
108.9
109.0
109.3
109.6
110.1
109.8
109.8
109.9
110.1
110.3
110.3
108.6
108.6
108.7
109.1
109.4
110.0
105.6
105.5
105.6
105.9
106.2
106.9
106.6
106.6
106.9
107.3
107.9
110.1
104.9
104.7
104.8
105.0
105.2
105.1
103.6
103.3
103.2
103.0
102.9
102.6
106.1
106.1
106.2
106.8
107.2
107.3
116.6
116.9
117.0
117.3
117.5
117.6
108.4
108.5
108.7
108.8
108.8
108.8
118.6
118.9
119.1
119.3
119.5
119.7
July.
Aug.
Sept.
Oct..
Nov.
Dec.
110.2
110.0
110.2
110.4
110.6
111.0
110.2
110.2
110.6
110.9
111.2
111.3
110.1
109.8
110.0
110.2
110.4
110.8
106.9
106.6
106.6
106.9
107.1
107.4
110.9
110.1
109.7
109.7
109.7
110.6
104.7
104.7
104.9
105.3
105.6
105.7
102.3
101.8
101.7
102.1
102.4
102.4
106.9
107.1
107.7
108.0
108.3
108.4
117.8
117.9
118.5
118.7
119.0
119.3
108.9
109.0
109.1
109.2
109.3
109.5
120.0
120.0
120.7
121.0
121.3
121.6
1966: Jan..
Feb.
Mar.
AprMay
June
111.0
111.6
112.0
112.5
112.6
112.9
111.1
111.3
111.6
112.2
112.5
112.8
110.8
111.4
111.9
112.4
112.4
112.6
107.4
108.0
108.4
108.8
108.8
109.0
111.4
113.1
113.9
114.0
113.5
113.9
105.3
105.4
105.6
106.0
106.3
106.4
101.9
101.8
102.0
102.3
102.5
102.6
108.0
108.3
108.6
109.0
109.3
109.5
119.5
119.7
120.1
121.1
121.5
122.0
109.7
109.8
109.9
110.1
110.2
110.2
121.8
122.0
122.5
123.6
124.1
124.8
July.
Aug.
Sept.
Oct..
Nov.
Dec.
113.3
113.8
114.1
114.5
114.6
114.7
113.2
113.4
113.8
114.4
114.8
114.9
113.1
113.6
113.9
114.3
114.4
114.3
109.3
109.8
110.0
110.3
110.2
110.1
114.3
115.8
115.6
115.6
114.8
114.8
106.7
106.6
107.0
107.6
107.8
107.7
103.0
103.0
102.7
103.5
103.5
103.1
109.7
109.6
110.5
110.9
111.3
111.4
122.6
123.0
123.5
124.1
124.7
125.2
110.3
110.6
110.7
111.0
111.2
111.3
125.5
125.9
126.5
127.1
127.7
128.3
1960
1961
1962
1963
1964
1965
1966
..
_.
Source: Department of Labor, Bureau of Labor Statistics.
263
TABLE B-44.—Wholesale price indexes, by major commodity groups, 7929-66
[1957-59=100]
All commodities other than farm products
and foods (industrials)
Year or month
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964...
1965
1966 *
1965: J a n . .
Feb..
Mar..
Apr_.
May..
JuneJuly..
Aug..
Sept..
Oct..
Nov..
Dec...
1966: J a n . .
Feb..
Mar.
Apr..
May.
June.
July.
Aug.
Sept.
Oct_.
Nov.
Dec*
All
commodities
Farm
products
Processed
foods
Hides,
skins,
leather,
and
leather
products
Fuels
and
related
products,
and
power
52.1
47.3
39.9
35.6
36.1
41.0
43.8
44.2
47.2
43.0
42.2
63.9
54.0
39.6
29.4
31.3
39.9
48.0
49.4
52.7
41.9
39.9
54.3
49.5
41.6
33.9
33.7
39.6
48.3
46.4
48.6
42.3
40.2
51.7
48.1
42.4
39.7
40.2
44.2
44.0
44.9
48.1
46.1
46.0
67.8
60.3
49.8
41.2
48.6
54.7
53.3
53.7
57.3
50.1
52.3
56.6
52.0
44.7
38.0
42.0
44.9
46.5
49.5
54.3
48.2
49.6
61.5
58.2
50.0
52.1
49.3
54.3
54.5
56.5
57.5
56.6
54.2
43.0
47.8
54.0
56.5
56.9
57.9
66.1
81.2
87.9
83.5
41.3
50.1
64.6
74.8
75.3
78.3
90.6
109.1
117.1
101.3
40.4
46.7
54.8
57.2
56.0
56.4
71.7
91.1
98.4
46.8
50.3
53.9
54.7
55.6
56.3
61.7
75.3
81.7
80.0
55.4
63.7
72.8
73.1
73.9
75.1
87.3
105.7
110.3
100.9
52.3
56.1
61.1
61.0
60.5
61.3
70.7
96.5
97.5
92.5
53.2
56.6
58.2
59.9
61.6
62.3
66.7
79.7
93.8
89.3
86.8
96.7
94.0
92.7
92.9
93.2
96.2
99.0
100.4
100.6
100.7
100.3
100.6
100.3
100.5
102.5
105.8
101.0
101.2
101.3
101.7
102.1
102.8
106.4
123.8
116.8
105.9
104.4
97.9
96.6
99.2
103.6
97.2
96.9
96.0
97.7
95.7
94.3
98.4
105.6
92.6
103.3
100.9
97.0
97.6
94.3
94.3
97.9
102.9
99.2
100.0
100.7
101.2
101.1
101.0
105.1
111.5
82.9
91.5
89.4
90.1
90.4
92.4
96.5
99.2
99.5
101.3
101.3
100.8
100.8
100.7
101.2
102.5
104.7
104.8
116.9
105.5
102.8
100.6
100,7
100.7
100.8
98.9
100.4
101.5
99.7
100.6
100.5
101.2
101.8
102.1
99.9
114.8
92 8
94.1
89.9
89.5
94.8
94.9
96.0
109.1
105.2
106.2
107.4
104.2
104.6
109.2
119.7
90.2
93.5
93.3
95.9
94.6
94.5
97.4
102.7
98.7
98.7
93.0
94.5
95.4
97.6
98.4
100.3
104.9
105.1
105.7
106.3
107.4
107.7
98.5
97.9
97.9
97.6
98.4
98.7
100.0
99.1
99.5
99.4
100.3
103.0
101.9
101.9
102.0
102.1
102.3
102.5
102.5
102.7
102.7
102.8
103.2
103.2
101.5
101.5
101.5
101.5
101.6
101.9
102.9
102.9
103.0
103.1
103.5
104.1
102.2
102.1
101.8
102.3
103.3
106.1
106.6
106.7
106.7
106.9
107.6
109.4
101.9
101.9
102.1
102.0
101.9
102.0
108.8
112.2
111.3
113.3
113.6
114.6
98.7
99.0
99.2
99.4
100.3
100.6
104.6
105.4
105.4
105.5
105.6
105.7
104.5
107.4
106.8
106.4
104.5
104.2
116.0
117.8
118.7
120.6
122.8
122.9
100.5
100.3
99.9
100.0
100.4
101.5
107.8
108.1
108.7
104.4
102.5
101.8
103.5
103.8
104.0
104.3
104.7
104.9
105.2
105. 2
105.2
105.3
105.5
105.5
101.9
102.0
102.1
102.2
102.2
102.2
106.4
106.8
106.8
106.2
105.9
105.9
110.3
111.8
111.5
110.6
110.5
110.6
111.7
113.8
113.8
112.4
110.7
110.6
102.4
102.4
102.2
102.2
102.1
101.9
122.7
121.2
119.9
118.7
117.5
117.5
101.4
102.0
102.2
102.6
102. •
102.1
See footnotes at end of table.
Total
Textile
products
and
apparel
264
100.7
100.2
99.8
97.1
98.9
101.3
TABLE B-44.—Wholesale price indexes, by major commodity groups, 1929-66—Continued
[1957-59=100]
All commodities other than farm products and foods (industrials)—Continued
Year or m o n t h
1929
_
1930
1931
1932
__.
1933
_
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
.__
1944
1945
1946
1947
_._
1948
1949
_.
1950
1951
—
1952
1953
1954
1955
1956
1957
._.
1958
1959
_
1960
1961
1962
._
1963
1964
1965
1966 *>
1965: J a n . .
Feb_.
Mar_.
AprMay.
June.
July_.
Aug..
Sept.
Oct..
Nov..
Dec—
1966: J a n . .
Feb..
Mar..
Apr_.
May.
June.
July_
AugSept.
Oct._
Nov_
Dec*
Rubber Lumber
and
and
rubber
wood
prodproducts
ucts
57.6
26.4
50.4
42.8
37.1
39.0
45.5
45.8
49.4
58.1
57.1
59.3
24.1
19.6
16.9
20.0
23.5
22.6
23.6
27.9
25.4
26.1
55.3
59.6
69.4
71.3
70.4
68.3
68.6
68.3
70.5
68.3
28.9
34.5
37.5
39.7
42.8
43.4
49.7
77.4
88.5
81.9
83.2
102.1
92.5
86.3
87.6
99.2
100.6
100.2
100.1
99.7
94.1
102.5
99.5
99.4
97.6
102.3
103.8
98.5
97.4
104.1
99.9
96.1
93.3
93.8
92.5
92.9
94.8
92.3
92.2
92.2
92.3
92.9
93.1
93.0
93.2
93.3
93.4
93.5
93.5
100.4
95.9
96.5
98.6
100.6
101.1
105.6
100.8
100.8
100.7
100.5
100.4
100.3
100 5
101.8
102.0
101.6
101.6
101.9
93.7
94.1
94.3
95.4
95.4
95.4
102.8
103.7
105.6
108.4
109.6
107.7
95.1
95.1
94.7
94.6
95.0
95.0
106.6
106.2
105.9
104.8
103.0
102.5
Pulp,
paper,
and
allied
products
Metals
and
metal
products
Machinery and
motive
products
Tobacco
Nonme- products
Misceltallic
and
laneous
mineral bottled
prodprodbeveructs
ucts
43.7
75.3
78.6
75.2
77.1
91.3
89.0
88.7
88.8
91.1
97.2
99.0
100.1
101.0
37.1
37.0
37.8
43.2
41.6
41.2
41.4
42.2
42.8
42.7
42.7
43.4
48.5
60.2
68.5
69.0
56.4
55.5
51.1
45.0
45.1
49.0
48.6
49.3
54.7
53.4
53.2
44.2
45.8
47.7
47.4
47.4
47.8
53.6
61.8
67.5
71.2
54.4
57.8
62.5
62.1
63.8
63.9
67.8
77.8
82.5
83.8
51.2
52.4
54.5
54.7
55.8
58.1
61.8
69.1
74.7
76.7
60.1
60.8
61.5
64.6
64.9
66.7
69.8
75.6
78.2
79.6
72.7
80.9
81.0
83.6
84.3
90.0
97.8
99.7
99.1
101.2
72.6
79.5
81.2
82.2
83.2
85.8
92.1
97.7
100.1
102.2
85.6
92.8
91.1
92.9
93.9
94.3
96.9
99.4
100.2
100.4
78.6
83.5
83.5
86.9
88.8
91.3
95.2
101.8
98.8
100.0
99.2
99.0
99.9
102.6
99.0
99.0
99.5
99.8
100.0
100.0
101.3
100.7
100.0
100.1
102.8
105.7
108.3
104.5
104.6
104.8
105.2
105.7
105.9
100.1
99.5
98.8
98.1
98.5
98.0
99.1
98.3
98.2
98.3
98.0
98.0
98.0
101.2
101.4
101.8
101.8
101.3
101.5
101.7
102.6
101.7
101.8
101.9
101.9
101.9
102. G
100.0
100.5
100.8
100.9
105.8
106.2
106.2
106.3
106.7
106.6
102.4
102.3
102.3
102.2
102.9
103.7
106.0
103.3
103.5
103.5
103.7
103.7
103.8
103.7
103.8
103.8
103.9
104.1
104.2
97.8
97.7
97.7
97.8
98.0
98.2
101.7
101.6
101.6
101.6
101.6
101.6
80.5
85.1
87.0
89.8
93.8
94.6
95.1
98.0
99.7
102.2
102.5
103.2
104.1
106.1
107.4
107.7
109.5
107.5
107.6
107.5
107.8
108.1
107.6
107.6
107.6
107.7
107.7
107.7
107.9
107.0
107.5
108.0
108.2
108.4
108.7
104.4
104.7
105.0
105.2
105.8
105.9
98.3
98.4
98.4
98.6
98.9
98.9
102.0
102.1
102.1
102.3
102.4
102.5
108.8
108.5
108.4
108.6
109.0
108.9
106.0
106.2
106.3
107.1
107.7
107.9
99.0
99.1
99.2
99.7
100.3
100.4
102.7
102.7
103.0
103.2
103.3
103.2
44.1
39.7
35.7
32.8
101.2
101.3
101.8
102.3
102.7
103.0
103.2
103.2
103.1
103.1
103.0
103.0
Source: Department of Labor, Bureau of Labor Statistics.
Furniture
and
other
household
durables
265
53.4
53.2
49.7
46.5
49.2
52.6
52.6
52.7
53.9
52.2
51.2
67.8
67.2
63.3
56.6
59.2
59.1
59.0
59.5
59.4
59.4
67.4
108.1
108.0
109.2
109.4
109.4
109.8
110.0
110.1
110.1
110.1
110.1
110.1
108.7
111.2
103.5
104.1
113.1
116.7
105.4
110.5
99.1
98.1
96.6
101.5
101.9
99.3
103.9
107.3
110.4
109.2
111.0
117.2
110.0
1C9.6
109.5
110.3
iO8.9
111.0
112.6
111.5
111.5
111.2
113.2
112.5
114.3
116.0
113.1
113.0
115.1
115.7
120.5
121.1
120.4
118.2
118.5
120.5
TABLE B-45.—Wholesale price indexes, by stage of processing, 1947—66
[1957-59=100]
Intermediate materials, supplies, and componentsl
Crude materials
Year or
month
All
commodities
Materials and components for
manufacturing
Total
Total
Food- Nonstuffs food
maand
Fuel
feed- terials,
except
stuffs
fuel
Materials
for
Total food
manufacturing
Ma- Materials terials
for
for
non- dudu- rable
rable manumanu- facturfactur- ing
ing
Components
for
manufacturing
Materials
and
components
for
construction
1947.
1948
1949
81.2
87.9
83.5
100.8
110.5
95.6
113.0
122.2
101.5
86.5
96.2
87.5
73.6
87.0
86.5
76.5
82.7
79.4
75.5
81.5
78.0
102.6
105.8
91.0
94.0
99.5
90.7
58.8
66.4
68.2
63.0
68.0
69.3
77.0
77.2
1950
1951.
1952
1953
1954
86.8
96.7
94.0
92.7
92.9
104.2
119.6
109.9
101.5
100.6
108.9
126.0
118.6
106.2
106.2
100.0
115.3
99.9
95.6
93.8
86.1
87.7
88.3
91.4
87.3
83.0
93.0
90.3
90.8
91.3
81.8
92.7
88.8
90.2
90.4
94.7
105.5
101.4
101.6
100.7
95.2
110.3
99.3
98.5
96.9
72.1
80.1
80.3
83.9
85.7
71.9
81.6
81.8
83.3
83.7
81.2
88.8
88.2
89.7
90.1
1955
1956
1957
1958
1959.
93.2
96.2
99.0
100.4
100.6
96.7
97.2
99.4
101.6
99.0
96.2
94.2
98.4
104.2
97.4
99.1
102.8
101.4
97.6
101.0
87.1
93.3
98.6
99.8
101.6
93.0
97.1
99.4
99.6
101.0
92.6
96.9
99.3
99.7
101.0
97.5
97.9
99.7
102.0
98.3
97.3
98.8
100.1
99.1
100.8
90.0
95.7
98.8
99.5
101.8
87.4
95.4
99.1
99.9
101.1
93.7
98.5
99.1
99.1
101.8
1960
1961
1962
1963
1964
100.7
100.3
100.6
100.3
100.5
96.6
96.1
97.1
95.0
94.1
96.2
94.9
96.8
94.0
91.9
96.8
97.9
97.4
96.2
97.8
102.5
102.3
101.8
103.0
102.5
101.0
100.3
100.2
100.5
100.9
101.0
99.8
99.2
99.4
100.4
99.5
102.6
100.5
105.5
104.0
100.8
98.6
98.0
97.1
97.8
101.9
100.5
100.4
100.5
102.5
100.6
99.6
98.8
98.8
99.7
101.1
99.7
99.3
99.6
100.6
1965
1966 "
102.5
105.8
98.9
105.3
98.3
107.2
99.8
101.9
103.3
106.3
102.2
104.8
102.0
104.0
106.6
111.3
98.7
99.5
104.6
106.6
101.3
104.8
101.4
104.0
101.0
101.2
101.3
101.7
102.1
102.8
94.2
95.5
95.8
96.9
98.3
100.6
91.8
93.5
93.9
95.4
97.3
101.0
98.3
98.7
99.0
99.7
100.2
99.8
103.5
104.3
103.6
101.5
101.5
101.7
101.6
101.6
101.6
101.8
101.9
102.2
101.5
101.4
101.5
101.6
101.7
101.9
106.3
106.3
105.6
105.8
104.9
105.9
98.5
98.5
98.5
98.6
98.7
98.7
103.7
103.9
104.0
104.2
104.6
104.8
100.4
100.5
100.5
100.7
101.2
101.4
100.9
100.9
100.9
101.0
101.2
101.2
102.9
102.9
103.0
103.1
103.5
104.1
100.5
100.8
100.0
100.1
100.8
103.2
100.9
101.1
100.0
100.1
100.7
104.1
99.6
100.0
99.9
100.1
100.7
101.3
101.9
102.7
103.7
104.3
104.8
105.4
102.3
102.4
102.5
102.6
103.0
103.0
102.0
102.1
102.2
102.4
102.5
102.6
106.2
106.5
106.9
107.5
108.1
108.8
98.7
98.7
98.7
98.9
98.8
98.9
104.8
105.0
105.1
105.1
105.3
105.2
101.4
101.6
101.6
101.9
102.2
102.3
101.3
101.7
101.7
101.7
101.8
101.9
104.6
105.4
105.4
105.5
105.6
105.7
105.2
107.5
106.9
106.3
105.7
105.6
106.8
109.6
108.3
107.5
106.5
106.0
102.2
103.8
104.6
104.5
104.5
105.1
105.6
105.9
105.2
104.0
105.0
105.3
103.4
103.8
103.9
104.3
104.8
104.9
102.8
103.2
103.4
103.7
104.1
104.1
109.7
111.1
110.8
110.1
109.8
110.0
98.9
99.0
99.2
99.4
99.7
100.0
105.5
105.8
106.1
106.6
106.8
106.7
102.5
102.9
103.3
104.1
104.8
105.0
102.3
102.7
103.4
104.3
104.8
104.5
106.4
106.8
106.8
106.2
105.9
Dec P--_- 105.9
107.8
107.4
106.1
103.6
101.1
100.8
109.1
111.2
109.9
106.2
102.5
102.2
105.7
100.2
98.9
98.2
97.6
97.4
105.5
106.2
107.0
108.1
108.9
109.1
105.4
105.8
105.6
105.3
105.3
105.4
104.4
104.8
104.6
104.3
104.4
104.5
111.9
114.8
113.6
111.6
111.2
110.9
100.2
100.1
99.8
99.5
99.2
99.2
106.6
106.9
106.8
106.8
107.0
107.1
105.1
105.4
105.5
105.9
106.6
107.0
104.5
104.6
104 6
104.5
104.3
104.2
1965- Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov.....
Dec
1966: Jan
Feb
Mar
Apr
May....
June
July....
Aug
Sept
Oct
Nov
See footnotes at end of table.
266
TABLE B^45.— Wholesale price indexes, by stage of processing, 1947-66—Continued
[1957-59=100]
Special groups of industrial
products
Finished goods
Consumerfinishedgoods
Year or month
Total
Total
Other
Dunonrable
Foods durable
goods goods
Producer
finished
goods
InterConmediate
sumer
Crude materials,
finished
mate- supplies, goods exrials 2 and com- cluding
ponents 3 foods
1947
1948
1949
80.1
86.4
84.0
86.1
92.6
90.7
99.0
91.0
86.5
92.0
88.2
75.9
81.1
83.2
61.8
67.4
70.7
79.2
92.5
84.0
73.4
79.8
77.8
83.1
88.4
86.5
1950
1951
1952
1953
1954
85.5
93.6
93.0
92.1
92.3
98.2
97.0
95.4
95.3
92.8
104.2
103.3
97.9
97.1
89.6
96.5
94.1
95.0
95.3
84.1
89.7
90.4
91.1
91.8
72.4
79.5
80.8
82.1
83.1
93.6
102.9
93.1
92.4
88.0
81.4
91.2
88.3
89.4
87.8
94.2
92.9
93.7
94.1
1955
1956
1957
1958
1959
92.5
95.1
98.6
100.8
100.6
94.7
96.1
98.9
101.0
100.1
94.7
94.5
97.8
103.5
98.7
95.8
97.7
99.9
99.3
100.8
92.8
95.9
98.7
100.1
101.3
85.6
92.0
97.7
100.2
102.1
96.6
102.3
100.9
96.9
102.3
92.5
97.0
99.6
99.4
101.0
94.8
97.1
99.5
99.6
100.9
1960
1961
1962..
1963
1964
101.4
101.4
101.7
101.4
101.8
101.1
100.9
101.2
100.7
100.9
100.8
100.4
101.3
100.1
100.6
101.5
101.5
101.6
101.9
101.6
100.9
100.5
100.0
99.5
102.3
102.5
102.9
103.1
104.1
98.3
97.2
95.6
94.3
97.1
101.4
100.1
99.9
99.6
100.2
101.3
101.2
101.0
101.0
100.9
1965
1966 »
103.6
106.9
102.8
106.4
104.5
111.2
102.8
104.8
99.6
100.2
105.4
108.0
100.9
104.5
101.5
103.6
101.7
103.2
1965: Jan...
Feb..
Mar..
Apr..
MayJune.
102.3
102.3
102.4
102.8
103.2
103.9
101.2
101.2
101.4
101.9
102.3
103.2
100.8
100.9
101.3
102.6
103.5
105.6
102.3
102.2
102.2
102.2
102.5
102.6
99.7
99.7
99.7
99.6
99.7
104.9
105.0
105.1
105.3
105.3
105.4
99.0
99.4
99.7
100.1
101.0
100.5
100.8
100.8
100.9
101.1
101.4
101.5
101.4
101.3
101.3
101.3
101.5
101.6
July..
Aug..
Sept..
Oct...
Nov..
Dec.
104.0
103.8
104.1
104.3
104.7
105.3
103.4
103.1
103.5
103.7
104.2
104.9
106.0
105.3
106.1
106.3
107.2
108.9
102.7
102.8
103.0
103.3
103.6
103.7
99.6
99.5
99.5
99.5
99.6
105.4
105.5
105.5
105.6
105.9
106.0
100.4
101.7
101.3
102.0
102.7
102.6
101.5
101.7
101.8
101.9
102.1
102.2
101.6
101.6
101.8
102.0
102.2
102.3
1966: Jan...
Feb_.
Mar..
Apr..
MayJune.
105.6
106.3
106.4
106.3
106.2
106.4
105.2
106.0
106.1
105.9
105.6
105.7
109.5
111.5
111.5
110.7
109.6
109.5
103.9
104.0
104.1
104.3
104.5
104.9
99.7
99.7
99.7
99.8
100.2
100.1
106.2
106.6
106.8
107.0
107.6
107.9
104.0
105.7
106.6
106.1
105.9
106.5
102.4
102.6
102.9
103.4
103.8
103.9
102.4
102.4
102.5
102.8
103.0
103.2
July..
Aug..
Sept..
Oct...
Nov..
Dec*
107.0
107.5
108.1
107.8
107.8
107.6
106.4
107.1
107.8
107.2
107.0
106,6
111.2
112.8
114.5
112.2
111.3
110.5
105.0
105.2
105.4
105.5
105.7
105.5
100.2
100.1
100.0
100.9
101.2
101.3
108.1
108.3
108.4
109.1
109.8
110.0
106.4
103.3
102.8
102.8
102. 7
101.7
104.0
104.2
104.1
104.1
104.1
104.1
103.3
103.4
103.5
103.9
104.1
104.0
1
2
3
Includes, in addition to subgroups shown, processed fuels and lubricants, containers, and supplies.
Excludes crude foodstuffs and feedstuffs, plant and animal fibers, oilseeds, and leaf tobacco.
Excludes intermediate materials for food manufacturing and manufactured animal feeds.
NOTE.—For a listing of the commodities included in each sector, see Table 2B, Wholesale Prices and Price
Indexes, 1963 (BLS Bulletin 1513).
Source: Department of Labor, Bureau of Labor Statistics.
267
MONEY SUPPLY, CREDIT, AND FINANCE
TABLE B-46.—Money supply, 1947-66
[Averages of dailyfigures,billions of dollars]
Year and month
Money supply
Total
money
Time
supply
deand
Cur- De- posits
time
adrency mand
deposTotal com- deposit justits
pocom- ed 3
adnent1 ponent 2
justed
Total
Money supply
money
Time
supply
and
Cur- De- posits
time
rency mand addeposTotal com- deposit justS
pocom- ed 3
ad nent1 ponent 2
justed
Seasonally adjusted
U.S.
Government
demand
deits 4
Unadjusted
1947: D e c .
1948: D e c .
1949: D e c .
148.5
147.5
147.6
113.1
111.5
111.2
26.4
25.8
25.1
86.7
85.8
86.0
35.4
36.0
36.4
151. 0
150.0
150.0
115.9
114.3
113.9
26.8
26.2
25.5
89.1
88.1
88.4
35.1
35.7
36.1
1.0
1.8
2.8
1950:
1951:
1952:
1953:
1954:
Dec.
Dec.
Dec.
Dec.
Dec.
152.9
160.9
168.5
173.3
180.6
116.2
122.7
127.4
128.8
132.3
25.0
26.1
27.3
27.7
27.4
91.2
96.5
100.1
101.1
104.9
36.7
38.2
41.1
44.5
48.3
155.6
163.8
171.7
176.3
183.6
119.2
125.8
130.8
132.1
135.6
25.4
26.6
27.8
28.2
27.9
93.8
99.2
103.0
103.9
107.7
36.4
38.0
40.9
44.2
48.0
2.4
2.7
4.9
3.8
5.0
1955:
1956:
1957:
1958:
1959:
Dec.
Dec.
Dec.
Dec.
Dec.
185.2
188.8
193.3
206.5
209.3
135.2
136.9
135.9
141.1
141.9
27.8
28.2
28.3
28.6
28.9
107.4
108.7
107.6
112.6
113.1
50.0
51.9
57.4
65.4
67.4
188.2
191.7
196.0
209.3
212.2
138.6
140.3
139.3
144.7
145.6
28.4
28.8
28.9
29.2
29.5
110.2
111.5
110.4
115.5
116.1
49.6
51.4
56.7
64.6
66.6
3.4
3.4
3.5
3.9
4.9
1960:
1961:
1962:
1963:
1964:
Dec.
Dec.
Dec.
Dec.
Dec.
214.0
228.2
245.3
265.3
286.3
141.1
145.5
147.5
153.1
159.7
28.9
29.6
30.6
32.5
34.2
112.1 72.9
116.0 82.7
116.9 97.8
120.6 112.2
125.4 126.6
216.8
231.2
248.3
268.3
289.2
144.7
149.4
151.6
157.3
164.0
29.6
30.2
31.2
33.1
35.0
115.2 72.1
119.2 81.8
120.3 96.7
124.1 111.0
129.1 125.2
4.7
4.9
5.6
5.1
5.5
1965: D e c .
1966: Dec ».
314.1
328.2
167.2
170.2
36.3
38.2
130.9 146.9
132.0 158.0
317.2
331.4
172.0
175.1
37.1
39.0
134.9 145.2
136.1 156.3
4.6
3.5
1965: Jan...
Feb..
Mar..
Apr..
MayJune.
288.4
290.5
292.3
294.3
295.3
297.9
159.7
159.8
160.3
161.0
160.7
161.7
34.5
34.6
34.7
34.8
34.9
35.0
125.3
125.2
125.6
126.2
125.8
126.7
128.7
130.7
132.0
133.3
134.6
136.2
292.7
290.3
291.6
295.5
292.9
296.1
164.4
159.5
158.9
161.5
157.5
159.5
34.4
34.2
34.4
34.5
34.6
34.9
130.1
125.2
124.6
127.1
122.9
124.5
128.3
130.8
132.7
134.0
135.4
136.6
4.2
5.7
6.6
5.5
9.5
9.1
July..
Aug..
Sept..
Oct...
Nov..
Dec.
300.3
303.0
305.7
308.9
311.1
314.1
162.4
163.0
164.1
195.2
165.6
167.2
35.3
35.5
35.7
36.0
36.1
36.3
127.2
127.5
128.5
129.3
129.5
130.9
137.9
140.0
141.6
143.7
145.5
146.9
299.1
300.5
304.5
309.2
311.6
317.2
160.8
160.3
163.1
165.7
167.3
172.0
35.4
35.5
35.7
36.0
36.5
37.1
125.4
124.8
127.5
129.7
130.8
134.9
138.3
140.2
141.4
143.5
144.3
145.2
9.0
7.3
5.5
5.0
4.1
4.6
1966: Jan...
Feb..
Mar._
315.8
316.7
318.8
322.3
323.2
5
324. 8
168.0
168.2
169.3
170.9
170.2
171.1
36.6
36.8
36.9
37.2
37.3
37.4
131.4
131.4
132.3
133.7
132.9
133.7
147.8
148.5
149.5
151.4
153.0
«153.7
320.3
316.5
318.0
323.8
320.8
5
322.9
173.0
167.8
167.8
171.6
166.9
168.8
36.5
36.4
36.6
36.8
37.0
37.3
136.5
131.4
131.3
134.8
129.9
131.5
147.3
148.7
150.2
152.2
153.9
«154.1
3.8
5.2
4.6
3.1
7.2
6.3
324.9
326.2
327.6
326.4
326.1
328.2
169.6
169.6
170.5
169.6
169.2
170.2
37.7
37.8
37.9
37.9
38.0
38.2
132.0
131.8
132.6
131.7
131.1
132.0
155.3
156.6
157.1
156.8
156.9
158.0
323.7
323.9
326.4
326.7
326.6
331.4
167.9
166.9
169.5
170.1
171.0
175.1
37.8
37.9
37.9
38.0
38.5
39.0
130.1
129.1
131.5
132.1
132.5
136.1
155.8
157.0
156.9
156.6
155.6
156.3
8.2
5.2
4.5
4.8
3.7
3.5
MPaFy."
JuneJuly..
Aug..
Sept..
Oct...
Nov..
Dec 9,
1
2
Currency outside the Treasury, the Federal Reserve System, and the vaults of all commercial banks.
Demand deposits at all commercial banks, other than those due to domestic commercial banks and the
U.S. Government, less cash items in process of collection and Federal Reserve float, and foreign demand
balances at Federal Reserve banks.
3 Time deposits adjusted are time deposits at all commercial banks other than those due to domestic
commercial
banks and the U.S. Government.
4
Deposits at all commercial banks.
s Effective June 1966, balances accumulated for payment of personal loans were reclassified for reserve
purposes and are excluded from time deposits reported by member banks. The estimated amount of such
deposits at all commercial banks ($1.1 billion) is excluded from time deposits adjusted thereafter.
NOTE.—Data for Alaska and Hawaii included beginning January 1959 and August 1959, respectively.
Source: Board of Governors of the Federal Reserve System.
268
TABLE B-47.—Selected liquid assets held by the public, 1946-66l
[Billions of dollars, seasonally adjusted]
End of year or month
1946
1947
1948_
1949
Total
Time deposits
Demand
deposits
Com- Mutual
and
currency2 mercial3 savings
banks
banks
Postal
savings
system
Savings
and
loan
shares
U.S.
GovernU.S.
Govern- ment
ment securities
savings maturing
bonds * within
1 year *
239.1
246.2
254.1
262.1
108.5
112.4
110.5
110.4
33.9
35.3
35.9
36.3
16.9
17.8
18.4
19.3
3.3
3.4
3.3
3.2
11.0
12.5
48.6
50.9
53.4
55.0
19.4
16.6
21.6
25.5
271.4
281.0
296.0
311.5
320.3
115.5
120.9
125.5
127.3
130.2
36.6
38.2
41.2
44.6
48.2
20.1
20.9
22.6
24.4
26.3
2.9
2.7
2.5
2.4
2.1
14.0
16.1
19.2
22.8
27.2
55.8
55.4
55.7
55.6
55.6
26.4
26.8
29.3
34.4
332.5
343.2
356.0
373.1
393.9
133.3
134.6
133.5
138.8
139.7
49.7
52.0
57.5
65.4
67.4
28.1
30.0
31.6
33.9
34.9
1.9
1.6
1.3
1.1
.9
32.0
37.0
41.7
47.7
54.3
55.9
54.8
51.6
50.5
47.9
31.6
33.2
38.8
35.6
48.8
399.2
424.6
459.0
495.4
530.5
138.4
142.6
144.8
149.6
156.7
73.1
82.5
98.1
112.9
127.1
36.2
38.3
41.4
44.5
49.0
.8
.6
.5
.5
.4
61.8
70.5
79.8
90.9
101.4
47.0
47.4
47.6
49.0
49.9
41.9
42.6
46.8
48.1
46.1
1965
1966"
572.9
599.6
164.0
168.5
147.1
158.4
52.6
54.8
.3
.1
109.7
113.2
50.5
50.9
48.6
53.6
1965: Jan..
Feb—
Mar..
May.
June.
534.9
536.5
542.9
543.4
543.0
550.2
156.1
154.8
158.6
156.3
155.4
159.7
130.6
131.9
133.0
134.1
134.9
136.3
49.4
49.6
49.8
50.1
50.4
50.8
.4
.4
.4
.4
.4
.3
101.7
102.6
103.7
103.9
104.5
105.1
50.0
49.9
49.9
49.9
49.9
50.0
46.8
47.3
47.6
48.6
47.6'
48.0
July—
Aug.
Sept—
Oct—
Nov.
Dec —
550.9
555.7
560.7
565.1
568.3
572.9
157.7
157.8
160.6
161.1
160.4
164.0
138.3
139.8
141.6
144.0
146.5
147.1
51.1
51.3
51.6
52.0
52.3
52.6
.4
.3
.3
.3
.3
.3
105.5
106.5
107.8
108.4
109.3
109.7
50.1
50.1
50.1
50.1
50.1
50.5
47.9
49.8
48.7
49.1
49.4
48.6
1966: Jan..
Feb..
Mar,.
Apr..
May..
June_.
578.5
577.5
585.5
587.0
585.7
8
589.1
164.8
162.7
167.0
166.4
163.7
166.5
149.2
149.4
151.1
152.5
153.6
5153.9
52.8
53.0
53.1
53.1
53.3
53.4
.3
.3
.3
.3
.3
.2
109.8
110.6
111.4
111.0
111.2
111.4
50.5
50.3
50.3
50.4
50.4
50.4
51.2
51.0
52.1
53.3
53.3
53.4
July..
Aug..
Sept..
Oct p.
Nov p
Dec p
588.4
592.8
594.2
596.0
600.2
599.6
164.3
167.0
166.1
166.0
167.8
168.5
156.1
156.6
156.7
156.6
158.2
158.4
53.7
53.9
54.2
54.6
54.8
54.8
.2
.2
.2
.2
.1
.1
110.7
111.3
112.2
112.1
112.8
113.2
50.6
50.6
50.5
50.6
50.6
50.9
52.7
53.3
54.4
56.0
55.8
53.6
_
1950...
1951
1952
1953
1954
_
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
__
8.5
9.7
1
Excludes holdings of the U.S. Government, Government agencies and trust funds, domestic commercial
banks,
and Federal Reserve banks. Adjusted wherever possible to avoid double counting.
2
Agrees in concept with the money supply, Table B-46, except for deduction of demand deposits held
by mutual savings banks and savings and loan associations. Data are for last Wednesday of month.
3 Time deposits at all commercial banks other than those due to domestic commercial banks and the
U.S. Government (same concept as in Table B-46). Data are for last Wednesday of month, except that
June
30 and December 31 call data are used where available.
4
Excludes holdings of Government agencies and trust funds, domestic commercial and mutual savings
banks, Federal Reserve banks, and beginning February 1960, savings and loan associations.
s Effective June 1966, balances accumulated for the payment of personal loans (about $1.1 billion) are
excluded from time deposits at all commercial banks and from total liquid assets.
NOTE.—Series for all commercial banks include data for Alaska and Hawaii beginning January 1959 and
August 1959, respectively, except that one national bank in Alaska and one national bank in Hawaii were
included in April 1954 and April 1959, respectively.
Source: Board of Governors of the Federal Reserve System.
240-782 O—67-
-18
269
TABLE B-48.—Financial saving by individuals, 1939-66 3
[Billions of dollars]
Securities
Currency Savand
ings
Total bank
U.S. Other
shares
degovTotal savposits
ings ernbonds ment*
Year or quarter
Private Noninance sured
and penCor- penporate sion sion
and
re- funds
other serves
Gov- Less: Increase in
erndebt
ment
nsurance
and
Con- Secupen- Mort- sumer
rities
sion debt*
debt«
loans?
re- 4
serves
1939
3.0
3.0
0.1 - 0 . 8
0.7 - 0 . 9 - 0 . 6
1.5
0.1
0.3
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
2.9
8.8
27.1
35.9
38.4
35.0
13.2
5.0
.5
1.6
2.9
4.8
10.9
16.2
17.5
19.0
10.6
2.0
-1.8
-1.4
.3 - . 4
.4
2.6
.3 10.3
.6 14.1
.9 15.7
1.1
9.9
1.2 - 1 . 4
1.3
2.2
1.3
3.0
1.6
2.3
.9 - . 8 - . 4
.4 - . 5
2.8
8.0
2.3
*
11.1
3.3 - . 3
11.8
4.6 - . 7
6.9
4.2 - 1 . 2
1.0 - 2 . 6
.2
2.0 - . 2
.4
1.6
.5
.9
1.5
.1
.7
1.6
1.9
2.2
2.6
2.9
3.2
3.1
3.5
3.3
3.5
.1
.1
.1
.2
.6
.9
.3
.3
.4
.6
.3
.3
.7
1.3
2.3
3.1
2.5
1.7
2.0
1.8
1950
1951
1952
1953
1954
1955
1956
1957 _
1958
1959
-.3
8.1
10.4
9.0
8.5
5.2
12.2
15.0
19.7
14.0
3.5
5.9
7.0
4.7
5.4
3.4
4.8
4.8
10.2
4.1
.7
1.6
2.1
1.2
.6
2.3
2.0
2.7
2.6
1.0
3.7
3.8
4.4
4.5
4.7
5.0
5.0
4.6
4.8
4.9
.9
1.5
1.7
2.0
2.2
2.3
2.7
3.1
3.2
3.6
-.6
1.7
1.9
1.7
1.7
1.8
2.3
2.6
2.9
3.0
6.5
7.0
6.1
7.2
8 3
12.0
10.6
8.1
8.2
12.5
3.7
1.0
4.4
3.7
1.0
6.2
3.3
2.5
.2
6.1
1960
1961
1962
1963 1964
1965
1966 P
6.3
18.9
22.1
24.6
31.8
33.1
27.8
2.4
9.5
17.7
18.4
19.4
25.4
10.0
.1
-.9
-.6
1.0
1
.
5
.7
2.5 - 2 . 1
.4
5.7
.1
4.2
1.7
12.6
4.8
4.0
3.2
3.2
3.7
4.0
4.6
5.0
4.9
10.9
10.9
12.5
14.6
15.6
15.4
13.1
4.2
.3
1.5
1.0
5.0
1.1
.9
6.3
6.5
.1
9.0
*
6.9 - 1 . 6
1964: I
6.8
6.0
8 3
10.7
1.8
3.8
57
8.1
2.5
3.3
21
3.5
1.8
1.9
20
12
1.7
1.5
1 9
-.1
.3
1
1.5
1.5
17
1.1
1.3
4.1
3.8
36
4.1
-.7
2.6
1 6
3 0
6.1
6.0
10.6
10.3
1.9
5.0
8.0
10.4
2.1
2.5
1.4
3.3
1.3
1.9
1.0
.6
.9
1.2
1.1
.9
5.5
5.1
9 5
7.6
— 1.4
2.4
42
4.7
1.4
1.0
— 6
2.5
4.9
4.2
2.2
3 8
2.4
- -
II
III
IV
1965: I
II
III
IV
1966* I
II
III
rv* p..
.
1.7
2.3
3.3
4.0
4.7
5.2
5.3
5.2
6.4
7.2
.9
.3 - . 1
.7 — .5 - . 5
3.4
.1
1.2
3.4
.2
2.0
.2
.6 - 1 . 1
6.2
3.7
5.2
3.2
5.3 - I ! Q
4.4
1.1
-1.1
10.2 - L 8
11.0
8.2 - 1 . 0
9.2
1.1
9.9 — .4
11.7
1.6
11.3
7.0
4.9
9.3
4.3 14.9
.8
.4
1.2
.9
.6
.5
3.7
45
1.7
5.2
5.7
6.2
6.7
7.4
6.5
4.1
4.2
4.5
4.9
5.6
5.6
0.5
0.8 - 0 . 2
9
1 0 —2
.8
.7 - . 1
1 —3 0
3
- . 4 -1.0
.6
-.1
.1
1.4
.2 . .5
1.5
3.1
2.3 - 2 . 3
3.9
2.8 — 8
4.7
A
2.4
3.9
.3
2.6
.2
-.3
.6
.4
.9
.6
-.8
-.1
.4
.2
2.0
1.4
.9
1.2
1 3
1.3
1.7
1.5
1.9
2.2
1.4
1.3
1.3
1.7
1.1
1.3
1.3
1.3
3.7
3.3
4.0
4.4
-.3 -.1
3.5
.7
2.4 - 2 . 0
3.4
1.5
.6
1.8
1.2
—.9
1.8
1.1
1.2
1 3
1.3
4.5
3.0
2 1
3.5
— .4 — .4
2.6
.3
1 6 — 1.0
3.2 - . 5
.6
__
i
1.4
.6
1.5
1.5
1.3
1.3
1.8
-.6
.6
3
— .3
1 Individuals' saving, in addition to personal holdings, covers saving of unincorporated business, trust
funds,
and nonprofit institutions in the forms specified.
2
Includes shares in savings and loan associations and shares and deposits in credit unions.
3 "Other government" includes U.S. Government issues (except savings bonds), State and local government
securities, and nonguaranteed Federal agency issues.
4
8 Includes civil service, railroad retirement, and State and local retirement systems.
Mortgage
debt to institutions on one- to four-family nonfarm dwellings.
6
Consumer debt owed to corporations, largely attributable to purchase of automobiles and other durable consumer goods, although including some debt arising from purchases of consumption goods. Policy
loans on Government and private life insurance have been deducted from those items of saving.
7 Change in bank loans to brokers, dealers, and others for the purpose of purchasing or carrying securities.
NOTE.—In addition to the concept of saving shown above, there are other concepts of individuals' saving,
with varying degrees of coverage, currently in use. The personal saving estimates of the Department of
Commerce are derived as the difference between personal income (after taxes) and personal outlays. For
a reconciliation of the two series, see Securities and Exchange Commission Statistical Bulletin, July 1966,
and Survey of Current Business, July 1966.
The flow-of-funds system of accounts of the Board of Governors of the Federal Reserve System includes
estimates of gross saving and net financial investment of households.
Data for Alaska and Hawaii included for all periods.
Source: Securities and Exchange Commission.
270
TABLE B-49.—Bank loans and investments, 1929-66
[Billions of dollars]
End of year or month
1929<
1930 *
1931*
1932 4
1933 4
19344
1935. _.
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
l
.
_
._
_
-
___
_
Total
loans
and
invest-2
ments
49.4
48.9
44.9
36.1
30.4
32.7
36.1
39.6
38.4
38.7
40.7
43.9
50.7
67.4
85.1
105.5
124.0
114.0
116.3
114.2
Weekly reAll commercial banks
porting memInvestments
ber banks
Loans 2
U.S. GovOther
Business
ernment
securities
loans*
securities
35.7
4.9
8.7
34.5
5.0
9.4
6.0
29.2
9.7
6.2
21.8
8.1
7.5
16.3
6.5
6.7
15.7
10.3
7.1
15.2
13.8
16.4
15.3
7.9
17.2
14.2
7.0
5.1
16.4
15.1
7.2
4.2
17.2
16.3
7.1
4.7
17.8
18.8
7.4
5.3
21.7
21.8
7.2
7.1
6.8
19.2
41.4
6.3
59.8
19.1
6.1
6.4
6.3
21.6
77.6
6.5
90.6
7.3
26.1
7.3
31.1
74.8
8.1
11.3
38.1
69.2
9.0
14.7
42.4
62.6
9.2
15.6
Seasonally adjusted
1948
1949
1950 1951
1952
1953 1954
1955
1956
1957
1958
1959 -_
1960
1961
1962*
1963«
1964
1965
1966 5
1§65- Jan
Feb
Mar
Apr
May
June.
July
Aug
Sept
Oct
Nov
Dec
1966: Jan
Feb
Mar
Apr
May
June.
_
-_._
- -
._- .. .
_ _
....
...
. .
113.0
118.7
124.7
130.2
139.1
143.1
153.1
157.6
161.6
166.4
181.2
185.9
194.5
209.6
227.9
246.2
267.2
294.4
310.7
269.6
272.1
275.8
277.0
279.4
281.7
283.2
286.1
286.2
289.9
291.5
294.4
297.4
297.5
300.3
302.9
304.9
8
307.7
41.5
42.0
51.1
56.5
62.8
66.2
69.1
80.6
88.1
91.5
95.6
107.5
113.8
120.5
134.1
149.7
167.4
192.0
208.2
170.2
172.8
175.4
177.1
179.4
181.4
182.9
185.2
186.2
188.6
189.8
192.0
194.5
196.2
198.6
200.8
202.3
6 204.0
62.3
66.4
61.1
60.4
62.2
62.2
67.6
60.3
57.2
56.9
65.1
57.9
59.8
65.2
64.5
61.5
61.1
57.7
54.3
60.0
59.4
59.9
58.7
58.7
58.2
57.9
57.7
56.5
57.4
57.5
57.7
58.0
55.9
56.0
55.9
55.1
55.1
9.2
10.3
12.4
13.4
14.2
14.7
16.4
16.8
16.3
17.9
20.5
20.5
20.8
23.9
29.2
35.0
38.7
44.8
48.3
39.5
40.0
40.5
41.2
41.3
42.1
42.4
43.1
43.4
43.9
44.2
44.8
44.9
45.4
45.7
46.2
47.4
6 48.6
15.6
13.9
17.9
21.6
23.4
23.4
22.4
26.7
30.8
31.8
31.7
30.7
32.2
32.9
35.2
38.8
42.1
50.6
60.6
41.8
43.0
44.6
44.6
45.2
46.8
46.3
46.9
48.1
48.2
49.0
50.6
50.3
51.1
52.6
52.5
53.5
55.8
New series
7
54.4
48.5
58.7
206.4
July
309.2
206.6
48.1
58.3
56.1
Aug
310.8
206.1
54.3
48.3
59.4
Sept.308.7
Oct p
207.3
52.4
48.4
59.5
308.1
207.3
52.9
48.3
59.9
Nov 6 p . _
308.4
208.2
54.3
48.3
60.6
Dec
....
310.7
1 Data are for last Wednesday of month (except June 30 and December 31 call dates used for all commercial
banks).
2
Adjusted to exclude interbank loans beginning 1948.
3 Commercial and industrial loans and prior to 1956, agricultural loans. Beginning July 1959, loans to
financial
institutions excluded. Prior to 1943, published data adjusted to include open market paper.
4
June data used because complete end-of-year data not available.
* Commercial bank data are estimates for December 31.
6
Effective June 1966, balances accumulated for payment of personal loans (about $1.1 billion) are excluded
from loans at all commercial banks, and certain certificates of CCC and Export-Import Bank totaling
about $1 billion are included in other securities rather than in loans.
7 See Federal Reserve Bulletin, August 1966.
NOTE.—National bank data for Alaska and Hawaii included beginning April 1954 and April 1959, respectively. All other bank data for Alaska and Hawaii included beginning January 1959 and August 1959,
respectively.
Source: Board of Governors of the Federal Reserve System.
271
TABLE B-50.—Bond yields and interest rates, 1929-66
(Percent per annum]
U.S. Government securities
Year or month
Corporate
bonds
(Moody's)
3-month 9-12
3-5 Taxable
Treas- month year
ury issues2 issues » bonds4 Aaa
bills i
Average
rate on
grade short- Prime
munic- term combank meripal
cial
bonds loans
(Stand- to busi- paper,
Baa ard & ness- months
Poor's) selected
cities
High-
Federal
Reserve
Bank
discount
rate
1929
(5)
4.73
5.90
4.27
(6)
5.85
5.16
1930
1931
1932
1933
1934
(5)
4.55
4.58
5.01
4.49
4.00
5.90
7.62
9.30
7.76
6.32
4.07
4.01
4.65
4.71
4.03
(6)
3.59
2.64
2.73
1.73
1.02
3.04
2.11
2.82
2.56
1.54
3.60
3.24
3.26
3.19
3.01
5.75
4.77
5.03
5.80
4.96
3.40
3.07
3.10
2.91
2.76
.75
1.50
1.50
1.33
1.00
1.00
4.75
4.33
4.28
3.91
3.61
2.50
2.10
2.36
2.06
1.86
1.402
879
.515
2.66
2.12
256
1935 __
1936
1937
1938____
1939
.137
.143
.447
.053
.023
1.29
1.11
1.40
1940
1941
1942
1943
1944
.014
.103
.326
.373
.375
.50
.73
.83
.59
0.75
.79
1.46
1.34
1.33
2.46
2.47
2.48
2.84
2.77
2.83
2.73
2.72
.375
.375
.594
1.040
1.102
.81
.82
.88
1 14
1.14
1.18
1.16
1.32
1.62
1.43
2.37
2.19
2.25
2.44
2.31
2.62
2.53
2.61
2.82
2.66
3.29
3.05
3.24
3.47
3.42
1950
1951
1952
1953
1954
1.218
1.552
1.766
1.931
.953
1.26
1.73
1.81
2.07
92
1.50
1.93
2.13
2.56
1.82
2.32
2.57
2.68
2.94
2.55
2.62
2.86
2.96
3.20
2.90
1955
1956
1957
1958
1959
1.753
2.658
3 267
1 839
3.405
1 89
2.83
3 53
2 09
4.11
2.50
3.12
3.62
2.90
4.33
2.84
3.08
3.47
3.43
4.08
2.928
2.378
2.778
3.157
3.549
3 55
2.91
3.02
3 28
3.76
3.99
3.60
3.57
3.72
4.06
3.954
4.881
4 09
5.17
3.529
3.532
3.553
3.484
3.482
3.478
3.479
3.506
3.527
3.575
3.624
3.856
1945
1946
1947
1948
1949
_
_
1960
1961
1962
1963
1964
1965
1966
__
_ _ _ _ _
-
__-
—
_
1964: Jan
FebMar
Apr
May
-__
June__
July
Aug
Sept
Oct .
Nov.___
Dec
(6)
(6)
2.1
.75
.94
.81
.59
2.1
2.0
2.2
.56
.53
.66
.69
.73
1.00
1.00
7 1.00
71.00
7 1.00
1.67 " 2.2
2.1
1.64
2.01
2.40
2.68
2.21
.75
.81
1.03
1.44
1.49
7 1.00
7 1.00
1.00
1.34
1.50
3.24
3.41
3.52
3.74
3.51
1.98
2.00
2.19
2.72
2.37
2.69
3.11
3.49
3.69
3.61
1.45
2.16
2.33
2.52
1.58
1.59
1.75
1.75
1.99
1.60
3.06
3.36
3.89
3.79
4.38
3.53
3.88
4.71
4.73
5.05
2.53
2.93
3.60
3.56
3.95
3.70
4.20
4 62
4.34
8 5.00
2.18
3.31
3.81
2.46
3.97
1.89
2.77
3.12
2.16
3.36
4.02
3.90
3.95
4.00
4.15
4.41
4.35
4.33
4.26
4.40
5.19
5.08
5.02
4.86
4.83
3.73
3.46
3.18
3.23
3.22
5.16
4.97
5.00
5.01
4.99
3.85
2.97
3.26
3.55
3.97
3.53
3.00
3.00
3.23
3.55
4.22
5.16
4.21
4.65
4.49
5.13
4.87
5.67
3.27
3.82
5.06
6.00
4.38
5.55
4.04
4.50
3.66
3.63
3.67
3.63
3.67
3.83
4.06
4.02
4.15
4.18
4.07
4.03
4.15
4.14
4.18
4.20
4.16
4.13
4.37
4.36
4.38
4.40
4.41
4.41
4.83
4.83
4.83
4.85
4.85
4.85
3.23
3.17
3.32
3.29
3.21
3.20
4.99
3.97
3.88
4.00
3.91
3.89
4.00
3.50
3.50
3.50
3.50
3.50
3.50
3.68
3.73
3.82
3.83
3.88
3.96
3.99
3.99
4.03
4.04
4.04
4.07
4.13
4.14
4.16
4.16
4.12
4.14
4.40
4.41
4.42
4.42
4.43
4.44
4.83
4.82
4.82
4.81
4.81
4.81
3.18
3.20
3.25
3.26
3.18
3.15
4.98
3.96
3.88
3.89
4.00
4.02
4.17
3.50
3.50
3.50
3.50
3.62
4.00
See footnotes at end of table.
V
(8)
272
2.6
2.4
4.99
5.00
TABLE B-50.—Bond yields and interest rates, 7929-66—Continued
[Percent per annum]
U.S. Government securities
Year or month
Corporate
bonds
(Moody's)
3-month 9-12
3-5
Treas- month
year 3 Taxable
ury
bonds * Aaa
issues
bills 1
Highgrade
municipal
bonds
(StandBaa ard &
Poor's)
Average
rate on
shortterm
bank
loans
to businessselected
cities
1065: J a n . .
Feb.
Mar.
Apr.
May.
June.
3.828
3.929
3.942
3.932
3.895
3.810
3.87
3.97
4.03
4.00
3.99
3.98
4.06
4.08
4.12
4.12
4.11
4.09
4.14
4.16
4.15
4.15
4.14
4.14
4.43
4.41
4.42
4.43
4.44
4.46
4.80
4.78
4.78
4.80
4.81
4.85
3.06
3.10
3.18
3.17
3.19
3.26
July.
Aug.
Sept.
Oct..
Nov.
Dec.
3.831
3.836
3.912
4.032
4.082
4.362
3.96
4.00
4.11
4.18
4.29
4.66
4.10
4.19
4.24
4.33
4.46
4.77
4.15
4.19
4.25
4.28
4.34
4.43
4.48
4.49
4.52
4.56
4.60
4.68
4.88
4.88
4.91
4.93
4.95
5.02
3.26
3.25
3.36
3.42
3.47
3.56
1966: Jan..
Feb.
Mar.
Apr.
May.
June.
4.596
4.670
4.626
4.611
4.642
4.539
4.83
4.92
4.96
4.87
4.90
4.94
4.89
5.02
4.94
4.86
4.94
5.01
4.43
4.61
4.63
4.55
4.57
4.63
4.74
4.78
4.92
4.96
4.98
5.07
5.06
5.12
5.32
5.41
5.48
5.58
3.52
3.63
3.72
3.59
3.68
3.77
5.55
July.
Aug.
Sept.
OctNov.
Dec.
4.855
4.932
5.356
5.387
5.344
5.007
5.17
5.52
5.80
5.57
5.45
5.10
5.22
5.58
5.62
5.38
5.43
5.07
4.75
4.80
4.79
4.70
4.74
4.65
5.16
5.31
5.49
5.41
5.35
5.39
5.68
5.83
6.09
6.10
6.13
6.18
3.94
4.17
4.11
3.97
3.93
3.83
6.30
4.97
4.99
5.00
5.27
5.82
6.31
FedPrime
eral
comRemerserve
cial
Bank
paper,
dis4-6
months count
rate
4.25
4.27
4.38
4.38
4.38
4.38
4.00
4.00
4.00
4.00
4.00
4.00
4.38
4.38
4.38
4.38
4.38
4.65
4.00
4.00
4.00
4.00
4.00
4.42
4.82
4.88
5.21
5.38
5.39
5.51
4.50
4.50
4.50
4.50
4.50
4.50
5.63
5.85
5.89
6.00
6.00
6.00
4.50
4.50
4.50
4.50
4.50
4.50
i Rate on new issues within period. Issues were tax exempt prior to March 1, 1941, and fully taxable
thereafter. For the period 1934-37, series includes issues with maturities of more than 3 months.
* Certificates of indebtedness and selected note and bond issues (fully taxable).
3 Selected note and bond issues. Issues were partially tax exempt prior to 1941, and fully taxable thereafter.
* First issued in 1941. Series includes bonds which are neither due nor callable before a given number of
years as follows: April 1953 to date, 10 years; April 1952-March 1953, 12 years; October 1941-March 1952,
155 years.
Treasury bills were first issued in December 1929 and were issued irregularly in 1930.
«Not available on same basis as for 1939 and subsequent years.
7 From October 30,1942, to April 24,1946, a preferential rate of 0.50 percent was in effect for advances secured
by Government securities maturing in 1 year or less.
* Beginning 1959, series revised to exclude loans to nonbank financial institutions.
NOTE.—Yields and rates computed for New York City except for short-term bank loans.
Sources: Treasury Department, Board of Governors of the Federal Reserve System, Moody's Investors
Service, and Standard & Poor's Corporation.
273
T A B L E B-51.—Federal Reserve Bank credit and member bank reserves,
1929-66
[Averages of daily figures, millions of dollars]
Reserve Bank credit outstanding
Year and month
Total
U.S.
Member
Governbank
ment se- borrowcurities
ings
Member bank reserves
All
other,
mainly
float
Total
Required
Excess
1929: D e c .
1,643
446
801
396
2,395
2,347
48
1930:
1931:
1932:
1933:
1934:
1935:
1936:
1937:
1938:
1939:
Dec__
Dec.
Dec.
Dec.
Dec _
Dec.
Dec.
Dec..
Dec.
Dec.
1,273
1,950
2,192
2,669
2,472
2,494
2,498
2,628
2,618
2,612
644
777
1,854
2,432
2,430
2,430
2,434
2,565
2,564
2,510
337
763
281
95
10
6
7
16
7
3
292
410
57
142
32
58
57
47
47
2,415
2,069
2,435
2,588
4,037
5,716
6,665
6,879
8,745
11,473
2,342
2,010
1,909
i 1,822
2,290
2,733
4,619
5,808
5,520
6,462
73
60
526
1766
1,748
1940:
1941:
1942:
1943:
1944:
1945:
1946:
1947:
1948:
1949:
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
2,305
2,404
6,035
11,914
19,612
24, 744
24,746
22,858
23,978
19,012
2,188
2,219
5,549
11,166
23, 708
23, 767
21,905
23,002
18,287
3
5
4
90
265
334
157
224
134
118
114
180
483
659
654
702
821
729
842
607
14,049
12,812
13,152
12, 749
14,168
16,027
16,517
17,261
19,990
16,291
7,403
9,422
10,776
11,701
12,884
14,536
15,617
16,275
19,193
15,488
6,646
3,390
2,376
1,048
1,284
1,491
900
986
797
1950:
1951:
1952:
1953:
1954:
1955:
1956:
1957:
1958:
1959:
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
21,606
25,446
27,299
27,107
26,317
26,853
27,156
26,186
28,412
29,435
20,345
23,409
24,400
25,639
24,917
142
657
1,593
441
246
24, 602
24,765
23,982
26,312
27,036
710
557
906
1,119
1,380
1,306
1,027
1,154
1,412
1,703
1,494
1,543
1,493
17,391
20,310
21,180
19,920
19,279
19,240
19,535
19,420
18,899
2 18,932
16,364
19,484
20,457
19,227
18,576
18,646
18,883
18,843
18,383
18,450
1,027
826
723
693
703
594
652
577
516
482
1960: D e c .
1961: D e c .
1962: D e c .
1963: D e c .
1964: D e c .
1965: Dec...
1966: Dec *.
29,060
31, 217
33, 218
36, 610
39,873
43,853
46,864
27,248
29,098
30, 546
33,729
37,126
40,885
43, 740
87
149
304
327
243
454
557
1,725
1,970
2,368
2,554
2,504
2,514
2,567
19,283
20,118
20,040
20,746
21,609
22, 719
23,825
18,527
19,550
19,468
20,210
21,198
22,267
23, 430
756
568
572
536
411
452
1965: Jan...
Feb...
Mar...
Apr...
May..
June.
39,245
39,244
39,535
39,882
40,340
41,153
37,052
37, 315
37,637
38, 111
38,840
299
405
416
471
505
528
2,262
1,787
1,804
1,774
1,724
1,785
21,620
21,231
21,246
21, 511
21,472
21, 709
21,215
20,790
20,905
21,145
21,147
21,363
405
441
341
366
325
346
July..
Aug_.
Sept..
Oct..
Nov..
Dec...
41,651
41,504
41,610
42,048
42,649
43,853
39,249
39,318
39,108
39,601
40,128
40,885
524
564
528
490
452
454
1,878
1,622
1,974
1,957
2,069
2,514
21,863
21,617
21,740
21,958
21,958
22,719
21,513
21,187
21,356
21,614
21,589
22,267
350
430
384
344
369
452
1966: J a n . . .
Feb..
Mar..
Apr...
MayJune..
43,449
43,116
42,943
43,339
43,891
44,498
40,626
40,635
40,629
41,129
41,672
402
478
551
626
722
674
2,421
2,003
1,994
2,084
2,040
2,152
22, 750
22,233
22,160
22,528
22,487
22,534
22,392
21,862
21,855
22,170
22,117
22,212
358
371
305
358
370
322
July..
Aug..
Sept..
Oct.Nov..
Dec*.
45,737
45,348
45,631
45,604
46,087
46,864
42,221
42,280
42,735
42,837
43,347
43,740
766
728
766
733
611
557
2,750
2,340
2,130
2,034
2,129
2,567
23,090
22,655
23,240
23,333
23,251
23,825
22,682
22,317
22, 842
23,031
22,862
23,430
408
338
398
302
389
396
Member
bank free
reserves
(excess
reserves
less borrowings)
2,046
1,071
3,226
5,011
1
Data from March 1933 through April 1934 are for licensed banks only.
2 Beginning December 1959, total reserves held include vault cash allowed.
NOTE.—Data for member banks in Alaska and Hawaii included beginning 1954 and 1959, respectively.
Source: Board of Governors of the Federal Reserve System.
274
TABLE B-52.—Short- and intermediate-term consumer credit outstanding, 7929-66
[Millions of dollars]
Instalment credit
Total
Other Repair
Autoconand
Permobile sumer modern- sonal
paper goods ization loans
paper loans i
56,028
57,678
63,164
70, 461
78,442
87.884
95,000
3,524
3,022
2,463
1,672
1,723
1,999
2,817
3,747
4,118
3,686
4,503
5,514
6,085
3,166
2,136
2,176
2,462
4,172
6,695
8,996
11, 590
14,703
15,294
19, 403
23,005
23, 568
28,906
31,720
33,867
33,642
39,245
42,832
43,527
48,034
54,158
60, 548
68, 565
74,700
1,384
986
684
356
493
614
992
1,372
1,494
1,099
1,497
2,071
2,458
742
355
397
455
981
1,924
3,018
4,555
6,074
5,972
7,733
9,835
9,809
13,460
14,420
15,340
14,152
16,420
17,688
17,223
19,540
22,433
25,195
28,843
31,000
1,544
1,432
1,214
834
799
889
,000
,290
,505
1,442
,620
1,827
1,929
,195
819
791
816
1,290
2,143
2,901
3,706
4,799
4,880
6,174
6,779
6,751
7,641
8,606
8,844
9,028
10,630
11,525
11,857
12,605
13,856
15, 593
17,693
19, 700
27
25
22
18
15
37
253
364
219
218
298
371
376
255
130
119
182
405
718
853
898
1,016
1,085
1,385
1,610
1,616
1,693
1,905
2,101
2,346
2,809
3,139
3,191
3,246
3,405
3,532
3,675
3,800
569
579
543
464
416
459
572
721
900
927
1,088
1,245
1,322
974
832
869
1,009
1,496
1,910
2,224
2,431
2,814
3,357
4,111
4,781
5,392
6,112
6,789
7,582
8,116
9,386
10,480
11,256
12,643
14,464
16,228
18,354
20,200
77,783
77,406
77,796
79,237
_ - . - - 80,469
81,717
60,442
60,436
60,861
61,886
62,807
63,850
25,231
25,383
25,691
26,235
26,717
27,280
15, 455
15,218
15,180
15,292
15,458
15,648
3,505
3, 479
3,475
3,488
3,534
3,576
82,539
83,319
83,801
84,465
85,291
87,884
64,704
65,508
65,979
66, 511
67,168
68,565
27,779
28, 111
28,175
28,393
28,612
28,843
15,818
15,996
16,229
16,492
16,797
17,693
87,027
86,565
87,059
88,184
89,092
90,070
68,314
68,279
68,827
69,543
70,209
71,194
28,789
28,894
29,248
29,597
29,908
30,402
90,650
91,483
91,639
91,899
92,498
95,000
71,862
72,640
72,829
73,073
73,491
74,700
30,680
30,918
30,793
30,852
30,937
31,000
End of year or month
1929
1930 .
1931
1932
1933 .
1934
1935
1936
1937
1938
1939
1940...
1941
1942 .
1943
1944
1945..
1946
1947
1948.
1949
1950
1951
1952.
1953
1954
1955
1956
1957
1958
1959___
1960
1961
1962...
1963
1964
1965
19663
.
._
_ _
-__
June
July
Aug
Sept. __
Oct
Nov . . . _
Dec
1966: Jan
Feb
Mar
Apr _
May..
June
- -- _..
-_ -
July
Aug
Sept
Oct
Nov
Dec3
Total
7,116
6,351
5,315
4,026
3,885
4,218
5,190
6,375
6,948
6,370
7,222
8,338
9,172
5,983
4,901
5,111
5,665
8,384
11,598
14,447
17,364
21, 471
22,712
27,520
31,393
32,464
38,830
42.334
44,970
45,129
51,542
1965: J a n
Feb
Mar
Apr
May.
Noninstalment credit
.
Total
3,592
3,329
2,852
2,354
2,162
2,219
2,373
2,628
2,830
2,684
2,719
Charge
acOther 2
counts
2,824
3,087
2,817
2,765
2,935
3,203
4,212
4,903
5,451
5,774
6,768
7,418
8,117
8,388
8,896
9,924
10,614
11,103
11,487
12,297
13,196
14,151
15,130
16,303
17.894
19.319
20,300
1,996
1,833
1,635
1,374
1,286
1,306
1,354
1,428
1,504
1,403
1,414
1,471
1,645
1,444
1,440
1,517
1,612
2,076
2,381
2,722
2,854
3,367
3,700
4,130
4,274
4,485
4,795
4,995
5,146
5,060
5,104
5,329
5,324
5,684
5,871
6,300
6,746
7,200
1,596
1,496
1,217
980
876
913
1,019
1,200
1,326
1,281
1,305
1,353
1,442
1,373
1,325
1,418
1,591
2,136
2,522
2,729
2,920
3,401
3,718
3,987
4,114
4.411
5,129
5,619
5,957
6,427
7,193
7,867
8,827
9,446
10,432
11,594
12, 573
13,100
16,251
16,356
16.515
16,871
17.098
17,346
17,341
16,970
16,935
17,351
17,662
17,867
5,724
5,154
4,977
5,210
5.453
5,528
11,617
11,816
11,958
12,141
12,209
12,339
3,604
3,648
3,664
3,676
3,689
3,675
17,503
17,753
17,911
17,950
18,070
18,354
17,835
17.811
17,822
17,954
18,123
19,319
5,534
5,498
5,496
5,645
5,740
6,746
12,301
12,313
12,326
12,309
12,383
12,573
17,566
17,386
17,450
17,597
17,732
17,959
3,634
3,603
3,597
3,602
3,642
3,677
18,325
18,396
18,532
18.747
18.927
19,156
18,713
18,286
18,232
18,641
18,883
18,876
6,107
5,505
5,393
5,670
5,860
5,908
12,606
12,781
12,839
12,971
13,023
12,968
18,165
18,390
18,564
18. 714
18,945
19,700
3,711
3,755
3,771
3,770
3,772
3,800
19,306
19, 577
19,701
19, 737
19,837
20,200
18,788
18,843
18,810
18,826
19,007
20,300
5,888
5,973
5,993
6.107
6,199
7.200
12,900
12,870
12,817
12.719
12,808
13,100
1 Holdings of financial institutions only; holdings of retail outlets are included in "other consumer goods
paper."
2
Single-payment loans and service credit.
3
Preliminary; December by Council of Economic Advisers.
NOTE.—Data for Alaska and Hawaii included beginning January and August 1959, respectively.
Source: Board of Governors of the Federal Reserve System (except as noted).
275
TABLE B-53.—Installment credit extended and repaid, 7946-66
[Millions of dollars]
Automobile
paper
Total
Other consumer
goods paper
Repair and
modernization
loans
Extended
Extended
Personal
loans
Year or month
Extended
Repaid
1946
1947
1948
1949
8,495
12,713
15,585
18,108
6,785
10,190
13,284
15,514
1,969
3,692
5,217
6,967
1,443
2,749
4,123
5,430
3,077
4,498
5,383
5,865
2,603
3,645
4,625
5,060
423
704
714
734
200
391
579
1950
1951
1952
1953
1954
21,558
23,576
29,514
31, 558
31,051
18,445
22,985
25,405
27,956
30,488
8,530
8,956
11,764
12,981
11,807
7,011
9,058
10,003
10,879
11,833
7,150
7,485
9,186
9,227
9,117
6,057
7,404
7,892
8,622
9,145
835
841
1,217
1,344
1,261
1955
1956
1957
1958
1959
38,972
39,868
42,016
40,119
48, 052
33,634
37,054
39,868
40,344
42,603
16,734
15,515
16,465
14,226
17,779
13,082
14, 555
15,545
15,415
15, 579
10,642
11,721
11,807
11, 747
13,982
9, 752
10, 756
11,569
11, 563
12,402
1960
1961
1962
1963
1964
49,560
48,396
55,126
61,295
67,505
45,972
47,700
50,620
55,171
17,654
16,007
16,384
16,472
19, 796 17,478
22,292 19,400
24,435 21,676
14,470
14, 578
15,685
17,102
19,473
1965
1966
75, 508 67,495 27,914
79,100 73,000 28,700
24,267 21,454
26, 500 23,400
61,121
Extended
Repaid
Repaid
Repaid
Extended
Repaid
3,819
4,271
4,542
2,539
3,405
3,957
4,335
717
772
917
1,119
1,255
5,043
6,294
7,347
8,006
4,660
5, 751
6,593
7,336
8,255
1,393
1,582
1,674
1,871
2,222
1,316
1,370
1,477
1,626
1,765
10,203
11, 051
12,069
12,275
14, 070
9,484
10,373
11,276
11,741
12,857
13,574
14,246
14,939
15, 850
17,737
2,213
2,068
2,051
2,198
2,204
1,883
2,015
1,996
2,038
2,078
15,223
15,744
17.594
19,703
21,393
14,130
14,967
16,206
17, 883
19,630
19,355
21,400
2,238
2,200
2,096
2,100
23,902
24,800
21, 777
23,000
Seasonally adjusted
1965: Jan...
Feb..
Mar..
Apr..
May.
June_
5,947
6,082
6,107
6,245
6,167
6,196
5,332
5,485
5,465
5,500
5,511
5,601
2,186
2,249
2,268
2,299
2,249
2,285
1,916
1,947
1,970
1,975
1,987
2,007
1,695
1,768
1,702
1,648
1,731
1,719
1,527
1,665
1,568
1,497
1,569
1,590
185
177
189
194
191
199
172
173
174
180
174
179
1,881
1,888
1,948
2,104
1,996
1,993
1,717
1,700
1,753
1,848
1,781
1,825
July.
Aug.
Sept.
Oct-.
Nov.
Dec.
6,383
6,385
6,434
6,425
6,530
6,489
5,659
5,729
5,748
5,805
5,831
5,855
2,355
2,372
2,385
2,338
2,480
2,443
2,007
2,068
2,056
2,080
2,148
2,107
1,818
1,816
1,859
1,907
1,873
1,862
1,608
1,662
1,638
1,670
1,683
1,720
180
194
176
179
185
185
171
180
171
171
176
175
2,030
2, 003
2,014
2,001
1,992
1,999
1,873
1,819
1,883
1,884
1,824
1,853
1966: Jan..
Feb..
Mar.
Apr..
May.
June.
6,544
6,492
6,673
6,505
6,472
6,675
5,947
5,954
6,024
5,974
5,979
6,126
2,340
2,340
2,479
2,302
2,298
2,419
2,115
2,135
2,216
2,145
2,159
2,211
1,983
1,957
1,959
1,958
1,933
1,944
1,778
1,781
1,708
1,729
1,784
1,767
176
171
183
180
186
189
176
174
176
175
172
176
2, 045
2,024
2,052
2,065
2,055
2,123
1,878
1,864
1,924
1,925
1,864
1,972
July.
Aug_
Sept.
Oct._
Nov.
Deci
6,732
6,689
6,578
6,522
6,657
6,725
6,168
6,087
6,103
6,142
6,213
6,300
2,383
2,431
2,387
2,378
2,461
2,450
2,238
2,223
2,213
2,244
2,255
2.280
2,050
1,995
1,958
1,941
1,947
1,960
1,803
1,792
1,784
1,820
1,836
1,850
189
187
175
166
166
165
174
172
168
169
169
170
2,110
2,076
2,058
2,037
2,083
2,150
1,953
1,900
1,938
1,909
1,953
2,000
i Preliminary; December by Council of Economic Advisers.
NOTE.—Data for Alaska and Hawaii included beginning January and August 1959, respectively. Therefore, the difference between extensions and repayments for January and August 1959 and for the year 1959
does not equal the net change in credit outstanding.
Source: Board of Governors of the Federal Reserve System (except as noted).
276
TABLE B-54.—Mortgage debt outstanding, by type of property and ojfinancing,1939-66
[Billions of dollars!
Nonfarm properties
1- to 4-family houses
End of year or quarter
All
properties
Government underwritten
Total
Total
Total
FHA
insured
VA
guaranteed
Multifamily
and
comCon- mercial
venproptional i erties 2
Farm
properties
1939..
35.5
28.9
16.3
1.8
1.8
14.5
12.5
6.6
1940..
1941.
1942..
1943..
1944..
36.5
37.6
36.7
35.3
34.7
30.0
31.2
30.8
29.9
29.7
17.4
18.4
18.2
17.8
17.9
2.3
3.0
3.7
4.1
4.2
2.3
3.0
3.7
4.1
4.2
15.1
15.4
14.5
13.7
13.7
12.6
12.9
12.5
12.1
11.8
6.5
6.4
6.0
5.4
4.9
1945..
1946..
1947..
1948..
1949..
35.5
41.8
48.9
56.2
62.7
30.8
36.9
43.9
50.9
57.1
18.6
23.0
28.2
33.3
37.6
4.3
G.I
9.3
12.5
15.0
4.1
3.7
3.8
5.3
6.9
0.2
2.4
5.5
7.2
8.1
14.3
16.9
18.9
20.8
22.6
12.2
13.8
15.7
17.6
19.5
4.8
4.9
5.1
5.3
5.6
1950...
1951...
1952...
1953...
1954...
72.8
82.3
91.4
101.3
113.7
66.7
75.6
84.2
93.6
105.4
45.2
51.7
58.5
66.1
75.7
18.9
22.9
25.4
28.1
32.1
8.6
9.7
10.8
12.0
12.8
10.3
13.2
14.6
16.1
19.3
26.3
28.8
33.1
38.0
43.6
21.6
23.9
25.7
27.5
29.7
6.1
6.7
7.2
7.7
8.2
1955..
1956...
1957...
1958...
1959...
129.9
144.5
156.5
171.8
190.8
120.9
134.6
146.1
160.7
178.7
88.2
99.0
107.6
117.7
130.9
38.9
43.9
47.2
50.1
53.8
14.3
15.5
16.5
19.7
23.8
24.6
28.4
30.7
30.4
30.0
49.3
55.1
60.4
67.6
77.0
32.6
35.6
38.5
43.0
47.9
9.0
9.8
10.4
11.1
12.1
1960.
1961.
1962.
1963.
1964.
206.8
226.3
251.6
281.2
311.6
194.0
212.4
236.4
264.4
292.7
56.4
59.1
62.2
65.9
69.2
26.7
29.5
32.3
35.0
38.3
29.7
29.6
29.9
30.9
30.9
84.8
93.9
104.3
116.3
128.3
341.7
366.4
320.6
343.0
73.1
42.0
31.1
140.4
52.7
59.3
69.9
82.2
95.1
107.0
117.8
12.8
13.9
15.2
16.8
18.9
1965.
1966 p
141.3
153.1
166.5
182.2
197.6
213.5
225.2
21.2
23.4
257.1
265.3
273.4
281.2
241.6
249.2
256.8
264.4
169.2
173.7
178.2
182.2
63.0
63.8
64.6
65.9
33.0
33.5
34.3
35.0
30.0
30.3
30.4
30.9
106.2
109.9
113.6
116.3
72.4
75.5
78.6
82.2
15.6
16.2
16.6
16.8
1964: I — .
II..
IIIIV-
287.4
295.5
303.6
311.6
270.0
277.5
285.1
292.7
185.4
189.8
193.9
197.6
66.6
67.3
68.4
69.2
35.7
36.3
37.4
38.3
31.0
30.9
31.1
30.9
118.8
122.5
125.4
128.3
84.6
87.7
91.2
95.1
17.3
18.1
18.5
18.9
1965: I
317.7
325.9
333.9
341.7
298.3
305.7
313.2
200.7
205.2
209.5
213.5
70.1
70.7
72.0
73.1
39.0
39.7
40.9
42.0
31.1
31.0
31.1
31.1
130.7
134.4
137.4
140.4
97.5
100.5
103.7
107.0
19.5
20.2
20.7
21.2
348.2
355.6
361.4
366.4
326.5
333.1
338.4
343.0
216.7
220.5
223.1
225.2
74.1
74.6
75.3
43.0
43.7
44.4
31.1
30.9
30.9
142.6
145.8
147.8
109.8
112.7
115.3
117.8
21.8
22.5
23.0
23.4
1963: I
IllIV.
III P..
IV P..
1966:
UP...
III p..
IV P..
1
Derived figures.
Includes negligible amount of farm loans held by savings and loan associations.
Source: Board of Governors of the Federal Reserve System, estimated and compiled from data supplied
by various Government and private organizations.
2
277
TABLE B-55.—Net public and private debt, 7929-66
]
[BiUions of dollars]
Private
End of
year *
Federal
GovernTotal
ment
and
agency
Corporate
Individual and noncorporate
State
and
Nonfarm
local
gov- Total
ernComments
ShortTotal Longmerterm term Total Farm 3
cial
MortConTotal gage
and sumer
cial*
1929-...
190.9
16.5
13.2 161.2
88.9
47.3
41.6
72.3
12.2
60.1
31.2
22.4
6.4
1930—.
1931—.
1932—.
1933....
1934—
191.0
181.9
174.6
168.5
171.4
16.5
18.5
21.3
24.3
30.4
14.1
15.5
16.6
16.7
15.9
160.4
147.9
136.7
127.5
125.1
89.3
83.5
80.0
76.9
75.5
51.1
50.3
49.2
47.9
44.6
38.2
33.2
30.8
29.1
30.9
71.1
64.4
56.7
50.6
49.6
11.8
11.1
10.1
9.1
8.9
59.3
53.3
46.6
41.5
40.6
32.0
30.9
29.0
26.3
25.5
21.6
17.6
14.0
11.7
11.2
5.8
4.8
3.6
3.5
3.9
1935—
1936—
1937—.
1938—
1939—
174.7
180.3
182.0
179.6
183.2
34.4
37.7
39.2
40.5
42.6
16.0
16.2
16.1
16.0
16.3
124.2
126.4
126.7
123.1
124.3
74.8
76.1
75.8
73.3
73.5
43.6
42.5
43.5
44.8
44.4
31.2
33.5
32.3
28.4
29.2
49.4
50.3
50.9
49.8
50.8
8.9
8.6
8.6
9.0
8.8
40.5
41.7
42.3
40.9
42.0
24.8
24.4
24.3
24.5
25.0
10.8
11.2
11.3
10.1
9.8
4.9
6.1
6.7
6.3
7.2
1940—
1941—
1942-...
1943—
1944—
189.9
211.6
259.0
313.6
370.8
44.8
56.3
101.7
154.4
211.9
16.5
16.3
15.8
14.9
14.1
128.6
139.0
141.5
144.3
144.8
75.6
83.4
91.6
95.5
94.1
43.7
43.6
42.7
41.0
39.8
31.9
39.8
49.0
54.5
54.3
53.0
55.6
49.9
48.8
50.7
9.1
9.3
9.0
8.2
7.7
43.9
46.3
40.9
40.5
42.9
26.1
27.1
26.8
26.1
26.0
9.5
10.0
8.1
9.5
11.8
8.3
9.2
6.0
4.9
5.1
1945—
1946—
1947—
1948--.
1949—
406.3
397.4
417.4
433.6
448.4
252.7
229.7
223.3
216.5
218.6
13.7
13.6
14.4
16.2
18.1
139.9 85.3
154.1 93.5
179.7 108.9
200.9 117.8
211.7 118.0
38.3
41.3
46.1
52.5
56.5
47.0
52.2
62.8
65.3
61.5
54.6
60.6
70.8
83.1
93.7
7.3
7.6
8.6
10.8
12.0
47.4
53.0
62.3
72.4
81.8
27.0
32.5
38.8
45.1
50.6
14.7
12.1
11.9
12.9
13.9
5.7
8.4
11.6
14.4
17.3
1950--.1951
1952—
1953—
1954
490.3
524.0
555.2
586.5
612.0
218.7
218.5
222.9
228.1
230.2
20.7
23.3
25.8
28.6
33.4
250.9
282.2
306. 5
329.8
348.4
142.1
162.5
171.0
179.5
182.8
60.1
66.6
73.3
78.3
82.9
81.9
95.9
97.7
101.2
100.0
108.8
119.7
135.5
150.3
165.6
12.3
13.6
15.2
16.9
17.6
96.6
106.2
120.4
133.6
147.9
59.4
67.4
75.2
83.8
94.6
15.8
16.2
17.8
18.4
20.8
21.4
22.6
27.4
31.4
32.5
1955—
1956
1957—
1958--.
1959--.-
672.3
707.5
738.9
782.6
846.2
231.5
225.4
224.4
232.7
243.2
38.4
42.7
46.7
50.9
55.6
402.5
439.4
467.8
499.1
547.4
212.1
231.7
246.7
259.5
283.3
90.0
100.1
112.1
121.2
129.3
122.2
131.7
134.6
138.4
154.0
190.4
207.7
221.1
239.5
264.1
18.8
19.5
20.3
23.3
23.0
171.6
188.2
200.8
216.2
241.1
108.7
121.3
131.6
144.6
160.8
24.0
24.4
24.3
26.5
28.7
38.9
42.5
44.8
45.1
51.5
1960.-- 890.2
1961 — 947.7
1962-_. 1,019.3
1963— 1,096. 9
1964— 1,174.3
241.0
248.1
255.8
261.0
267.2
60.0
65.0
73.7
79.5
85.2
589.2
634.6
689.8
756.4
821.9
302.8
324.3
348.2
376.1
402.6
139.1
149.3
161.2
174.4
189.2
163.6
175.0
187.0
201.7
213.4
286.4
310.3
341.6
380.3
419.3
25.1
27.5
30.2
33.2
36.0
261.4
282.8
311.4
347.1
383.3
174.5
190.4
210.6
234.3
259.5
30.8
34.8
37.6
42.3
45.4
56.0
57.7
63.2
70.5
78.4
1965.— 1,270.3
1966 «... 1,368.3
269.8
274.6
95.1 905.4 445.6
101.1 992.6 500.9
207.5
235.5
238.1
265.4
459.8
491.7
39.3
42.5
420.5
449.2
284.8
304.0
47.8
50.2
87.9
95.0
1
Net public and private debt outstanding is a comprehensive aggregate of the indebtedness of borrowers
after elimination of certain types of duplicating governmental and corporate debt. For a further explanation
of the concept, see Survey of Current Business, October 1950.
2
Data for State and local government debt are for June 30.
3
Farm mortgages and farm production loans. Farmers' financial and consumer debt is included in the
nonfarm
categories.
4
Financial debt is debt owed to banks for purchasing or carrying securities, customers' debt to brokers,
and debt owed to life insurance companies by policyholders.
8
Estimate.
NOTE.—Kevisions for 1929-39 and 1955-57 in the consumer credit data of the Board of Governors of the
Federal Reserve System have not yet been fully incorporated into this series.
Sources: Department of Commerce (Office of Business Economics), Treasury Department, Department
of Agriculture, Board of Governors of the Federal Reserve System, and Federal Home Loan Bank Board.
278
GOVERNMENT FINANCE
TABLE B-56.—U.S. Government debt, by kind of obligation, 1929-66
[Billions of dollars]
Interest-bearing public debt
Gross Marketable public
Nonmarketable public issues
public
issues
debt and
End of year or month
guarTreasury
Short- Treasury United
anteed
States tax and Investterm 2
ment
issues l
savings bonds
bonds
savings
issues
*
notes 3
bonds
1929
1930
1931
1932
1933
1934
1935
1936
1937. .
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949_ 1950
1951
1952—
1953
1954
1955
1956
19571958
1959
I960. >
1961
1962
1963—
1964
1965
1966
_
„
—_
_
_
_
__
_ _
__ .
_
_
1965: Jan
Feb
Mar
Apr
May
June
_- -
July
Aug.
Sept
Oct
Nov
Dec
1966* Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
16.3
16 0
17 8
20.8
24.0
31.5
35.1
39 1
41.9
44.4
47 6
50.9
64.3
112.5
170.1
232.1
278.7
259.5
257.0
252.9
257.2
256.7
259.5
267.4
275.2
278.8
280.8
276.7
275.0
283.0
290.9
290.4
296.5
304.0
310.1
318.7
321.4
329.8
318.6
320.6
318.4
317.2
319.8
317.9
317.1
318.7
317.3
319.4
322.2
321.4
322.4
323.7
321.5
320.1
322.8
320.4
319.8
324.9
325.2
327.4
329.9
329.8
3.3
29
28
59
7.5
11 1
14.2
12 5
12 5
9.8
77
7.5
8.0
27.0
47.1
69.9
78 2
57.1
47.7
45.9
50.2
58.3
65.6
68.7
77.3
76.0
81.3
79 5
82.1
92.2
103.5
109.2
120.5
124.6
121.2
115.5
110.4
118.9
111.6
114.3
112.0
112.0
108.5
106.2
106.2
104.1
104.1
107.8
110.4
110.4
113.5
114.5
112.0
111.9
111.8
107.2
107.2
110.8
111.3
114.8
118.1
118.9
11.3
11.3
13.5
13.4
14.7
15.4
14.3
19.5
20.5
24.0
26.9
28.0
33.4
49.3
67.9
91.6
120.4
119.3
117.9
111.4
104.8
94.0
76.9
79.8
77.2
81.8
81.9
80.8
82.1
83.4
84.8
79.8
75.5
78.4
86.4
97.0
104.2
99.2
102.8
100.6
100.5
100.5
102.5
102.5
102.5
104.3
104.3
104.3
104.2
104.2
104.2
103.2
103.1
103.1
102.0
101.9
101.9
100.6
100,5
100.5
99.2
99.2
Specials
issues
0.6
8
4
.4
.4
.6
.7
0.2
5
1.0
1.4
6
2.2
3.2
2 2
4 2
3.2
6.1
15.0
27.4
40.4
48.2
49.8
52.1
55.1
56.7
58.0
57.6
57.9
57.7
57.7
57.9
56.3
52.5
51.2
48.2
47.2
47.5
47.5
48.8
49.7
50.3
50.8
49.8
49.9
49.9
50.0
50.0
50.0
50.1
50.2
50.2
50.3
50.3
50.3
50.3
50.3
50.4
50.4
50.5
50.5
50.6
50.6
50.6
50.7
50.8
50.8
5.4
7.0
9.0
2.5
6.4
8 6
9.8
8 2
5.7
5.4
4.6
7.6
8.6
7.5
5.8
6.0
4.5
k
|E
t
i
n
k
k
k
1.0
1.0
1.0
1.0
13.0
13.4
12.9
12.7
12.3
11.6
10.3
9.0
7.6
6.2
5.1
4.4
3.7
3.4
2.8
2.7
3.4
3.3
3.3
3.3
3.3
3.3
3.3
3.3
3.2
2.8
2.8
2.8
2.8
2,8
2.8
2.7
2.7
2.7
2.7
2.7
2.7
2.7
2.7
2.7
12.7
16.3
20.0
24.6
29.0
31.7
33.9
33.7
35.9
39.2
41.2
42.6
43.9
45.6
45.8
44.8
43.5
44.3
43.5
43.4
43.7
46.1
46.3
52.0
44.2
45.6
45.7
44.4
47.8
48.6
47.8
49.8
48.1
47.0
47,1
46.3
44.4
45.8
46.0
44.9
48.8
51.1
50.7
53.2
53.1
51.9
52.5
52.0
1 Total includes non-interest-bearing debt, fully guaranteed securities (except those held by the Treasury), Postal Savings bonds, prewar bonds, adjusted service bonds, depositary bonds, armed forces leave
bonds, Rural Electrification Administration series bonds, foreign series certificates and notes, foreign currency certificates, notes and bonds, Treasury certificates, and U.S. retirement plan bonds, not shown separately.
Not all of total shown is subject to statutory debt limitation.
2
Bills, certificates of indebtedness, and notes.
34 The last series of Treasury savings notes matured in April 1956.
5 Series A bonds through September 1965 and, beginning April 1951, series B convertible bonds.
Issued to U.S. Government investment accounts. These accounts also held $16.4 billion of public
marketable and nonmarketable issues on December 31,1966.
Source: Treasury Department.
279
TABLE B-57.—Estimated ownership of U.S. Government obligations, 1939-66
[Par values,1 billions of dollars]
End of year or
month
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966 8
1965: J a n . . .
Feb..
Mar..
Apr._
May..
June.
July..
Aug_.
Sept..
Oct_.
Nov..
Dec...
1966: J a n . . .
Feb..
MarApr..
May..
June~
JulyAug..
SeptOct—
Nov..
Dec 8 .
Gross public debt and guaranteed issues 2
Held
Held by "the public"
by U.S.
Gov- Held
Mutual
ernby
savings
State
MiscelCom- banks Other and Individ- laneous
Total ment Federal
invest- Reserve Total mercial
corporaand
inlocal uals 6 invesment banks
banks3 surance tions < governtors 7
accomments 5
counts
panies
47.6
50.9
64.3
112.5
170.1
232.1
278.7
259.5
257.0
252.9
257.2
6.5
7.6
9.5
12.2
16.9
21.7
27.0
30.9
34.4
37.3
39.4
2.5
2.2
2.3
6.2
11.5
18.8
24.3
23.3
22.6
23.3
18.9
38.6
41.1
52.5
94.0
141.6
191.6
227.4
205.2
200.1
192.2
198.9
15.9
17.3
21.4
41.1
59.9
77.7
90.8
74.5
68.7
62.5
66.8
9.4
10.1
11.9
15.8
21.2
28.0
34.7
36.7
35.9
32.7
31.5
2.2
0.4
2.0
4.0
10.1
16.4
21.4
22.2
15.3
14.1
14.8
16.8
.5
.7
1.0
2.1
4.3
6.5
6.3
7.3
7.9
8.1
256.7
259.5
267.4
275.2
278.8
280.8
276.7
275.0
283.0
290.9
290.4
296.5
304.0
310.1
318.7
321.4
329.8
318.6
320.6
318.4
317.2
319.8
317.9
317.1
318.7
317.3
319.4
322.2
321.4
322.4
323.7
321.5
320.1
322.8
320.4
39.2
42.3
45.9
48.3
49.6
51.7
54.0
55.2
54.4
53.7
55.1
54.5
55.6
58.0
60.6
61.9
68.8
20.8
23.8
24.7
25.9
24.9
24.8
24.9
24.2
26.3
26.6
27.4
28.9
30.8
33.6
37.0
40.8
44.3
196.8
193.4
196.9
201.0
204.2
204.3
197.8
195.5
202.3
210.6
207.9
213.1
217.6
218.5
221.1
218.7
216.8
61.8
61.6
63.4
63.7
69.2
62.0
59.5
59.5
67.5
60.3
62.1
67.2
67.2
64.3
64.0
00.8
57.1
29.6
26.3
25.5
25.1
24.1
23.1
21.3
20.2
19.9
19.5
18.1
17.5
17.6
17.1
16.8
15.8
14.3
19.7
20.7
19.9
21.5
19.1
23.2
18.7
17.7
18.1
21.4
18.7
18.5
18.6
18.7
17.9
15.5
14.9
8.8
9.6
11.1
12.7
14.4
15.4
16.3
16.6
16.5
18.0
18.7
19.0
20.1
21.1
21.2
22.9
23.8
66.3
64.6
65.2
64.8
63.5
65.0
65.9
64.9
63.7
69.4
66.1
65.9
66.0
68.2
70.0
72.3
75.6
10.5
10.6
11.7
13.2
13.9
15.6
16.1
16.6
16.6
22.1
24.2
25.0
28.0
29.2
31.2
31.4
31.1
59.1
60.4
60.7
59.2
62.7
63.4
62.3
64.8
63.6
62.3
62.8
61.9
222.8
223.3
220.2
220.3
218.5
215.4
62.9
61.7
60.4
59.7
58.4
58.3
57.2
56.4
57.4
59.6
59.8
60.8
17.1
17.2
17.0
16.8
16.6
16.3
16.3
16.3
16.3
16.0
15.8
15.8
15.9
15.8
15.7
15.4
15.2
14.8
22.2
23.0
23.2
24.3
24.4
24.1
24.0
23.7
23.0
23.3
22.9
22.9
23.7
24.7
24.4
25.1
25.3
24.5
31.5
31.4
30.8
31.3
30.2
30.5
30.4
30.5
30.2
30.8
31.4
31.4
319.8
324.9
325.2
327.4
329.9
329.8
66.4
69.3
69.2
68.0
68.9
68.8
42.4
42.5
42.9
43.0
43.9
44.3
18.6
19.0
17.2
17.0
17.6
15.1
15.9
16.1
14.7
15.6
16.7
15.5
16.5
17.4
15.7
15.7
16.2
13.9
14.2
14.3
13.5
14.9
16.0
14.9
70.6
71.0
71.5
71.2
71.2
71.1
60.0
61.7
61.7
60.5
64.5
66.7
36.7
36.9
37.6
37.8
38.7
39.1
39.2
39.0
39.8
39.7
40.6
40.8
40.6
40.2
40.7
40.7
41.5
42.2
215.6
214.9
213.9
217.5
218.8
218.7
221.9
221.9
219.0
218.9
216.9
211.5
211.0
213.1
213.2
216.4
2J7.1
216.8
1
2
60.9
58.7
57.0
57.0
55.1
54.7
53.4
54.7
54.4
54.9
55.1
57.1
14.7
14.6
14.6
14.4
14.4
14.3
24.8
24.6
24.2
24.2
24.1
23.8
10.1
10.6
13.6
23.7
37.6
53.3
64.1
64.2
65.7
65.5
71.8
71.8
72.2
72.2
72.3
72.3
73.2
73.5
74.6
74.3
74.1
73.9
74.1
74.8
75.8
76.2
75.9
75.6
0.7
.7
.9
2.3
4.4
7.0
9.1
8.1
8.4
8.9
9.4
31.8
31.8
31.6
31.4
30.9
29.7
29.8
30.1
30.6
31.7
31.5
31.1
United States savings bonds, series A-F and J, are included at current redemption value.
Excludes guaranteed securities held by the Treasury. Not all of total shown is subject to statutory debt
limitation.
3
Includes commercial banks, trust companies, and stock savings banks in the United States and Territories and island possessions; figures exclude securities held in trust departments. Since the estimates in
this table are on the basis of par values and include holdings of banks in United States Territories and possessions, they do not agree with the estimates in Table B-49, which are based on book values and relate only
to4banks within the United States.
5 Exclusive of banks and insurance companies.
Includes trust, sinking, and investment funds of State and local governments and their agencies, and of
Territories
and possessions.
6
Includes
partnerships and personal trust accounts.
7
Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and
brokers, and investments of foreign balances and international accounts in this country. Beginning with
December 1946, the international accounts include investments by the International Bank for Reconstruction and Development, the International Monetary Fund, the International Development Association, the
Inter-American Development Bank, and various United Nations' funds, in special non-interest-bearing
notes and bonds issued by the U.S. Government. Beginning with June 30, 1947, includes holdings of
Federal
land banks.
8
Preliminary estimates by Council of Economic Advisers.
Source: Treasury Department (except as noted).
280
T A B L E B-58.—Average length and maturity distribution of marketable interest-bearing
public debt, 1946-66
Maturity class
End of year or month
Amount
outstanding Within
1 year
1 to 5
years
years Average length
5 to 10 10 to 20 20and
years
years
over
Millions of dollars
Years Months
Fiscal year:
1946__._
1947....
1948...1949...-
189, 606
168, 702
160, 346
155,147
61, 974
51,211
48, 742
48,130
24, 763
21, 851
21, 630
32, 562
1950...1951...1952...1953....
1954...-
155,310
137,917
140, 407
147, 335
150, 354
42, 338
43, 908
46,367
65, 270
62, 734
51, 292 7,792 28, 035 25, 853
46, 526 8,707 29, 979 8,797
6,594
47, 814 13, 933 25,700
36,161 15, 651 28, 662 1,592
29, 866 27, 515 28, 634 1,606
8
4
6
1955...1956....
1957..._
1958...1959....
155, 206
154, 953
155, 705
166. 675
178, 027
49, 703
58, 714
71, 952
67, 782
72, 958
39,107
34, 401
40, 669
42, 557
58,304
34, 253
28, 908
12, 328
21, 476
17, 052
3,530
4,351
4,349
7,208
10
4
9
3
1960....
1961...1962....
1963....
1964....
183, 845
187,148
196, 072
203, 508
206, 489
70,467
81,120
88,442
85, 294
81, 424
72, 844
58, 400
57, 041
58, 026
65, 453
20, 246 12, 630 7,658
26, 435 10. 233 10, 960
26,049
9,319 15, 221
37, 385 8,360 14, 444
34, 929 8,355 16, 328
4
6
11
1
0
1965....
1966.—
208, 695 87, 637 56,198
209,127 89,136 60,933
39,169
33,596
8.449
8,439
4
11
1965: Jan_.
Feb_.
Mar_.
Apr...
May.
June..
214,411
214,863
212,507
212,451
210,954
208,695
86,798
89,829
87,517
88,126
89,901
87,637
57,886
59,703
62,135
61,487
56,178
56,198
43,902
39,532
37,120
37,116
39,172
39,169
6,107
6,106
6,106
6,106
8,450
8,449
17, 241
17, C23
19,718
19,693
19,630
19,616
17,253
17, 241
July..
Aug...
Sept..
Oct...
Nov..
Dec...
208,664
208,402
208,381
212,097
214,619
214,604
87,635
92,446
92,444
96,491
93,392
93,396
56,192
55, 266
55,264
54,952
60,593
60,602
39,166
35,032
35,027
35,024
35,021
35,013
8,448
8,448
8,447
8,446
8,446
8,445
17, 222
17, 210
17,199
17,184
17,167
17,148
3
3
3
1
0
0
1966: Jan...
Feb._
Mar..
Apr._
May.
June..
217, 656
217,690
215,150
215, 004
213, 764
209,127
96,461
94,226
91, 704
91, 820
92, 231,
89,136
60,608
62, 893
64,306
64, 076
62,453
60,933
35, 013
35, 008
33,607
33,603
33,600
33, 596
8,444
8,443
8,442
8,441
8,440
8,439
17,131
17,120
17, 092
17, 065
17, 040
17, 023
60,932
62,957
62,952
62,495
59, 459
59,447
33,592
30, 783
30,774
30, 771
28,008
28,005
8,439
8,437
8,436
8,435
8,434
8,433
17, 007
16,987
16,967
16,957
16,940
16,923
10
11
11
10
11
11
10
11
10
8
8
7
July..
Aug...
Sept..
Oct...
Nov_.
Dec.
209,108 89,138
211,402 92,238
211,771 92,642
215,313 96,656
217,239 104,398
218,025 105,218
41,807
35, 562
32, 264
16, 746
17, 461
18, 597
16, 229
22, 821
28, 613
28, 578
26, 407
27, 652
21, 625
43, 599
41,481
41, 481
34, 888
5
4
4
3
4
4
NOTE.—All issues classified to final maturity except partially tax-exempt bonds, which were classified to
earliest call date (the last of these bonds were called on Aug. 14,1962, for redemption on Dec. 15,1962).
Source: Treasury Department.
281
T A B L E B-59.—Federal administrative budget receipts by source and expenditures by Junction,
fiscal years 1939-68 1
[Millions of dollars]
Net receipts
Fiscal
year
Total
Expenditures
Indi- CorpoEm- Estate
vidual ration Excise ployCusand
income income taxes ment
gift
toms
taxes
taxes taxes
taxes
Mis- Intercella- fund
neous
transreceipts actions
Total
International
Naaffairs
tional
and
defense finance
a
1939—
4,979
1,022
1,138
1,861
127
357
302
188
-17
8,841
1,075
20
1940—
1941—
1942—
1943—
1944—
5,137
7,096
12,547
21,947
43,563
959
1,400
3,205
6,490
19,701
1,123
2,029
4,727
9,570
14,737
1,973
2,555
3,393
4,093
4,761
165
117
154
160
200
357
403
421
442
507
331
365
369
308
417
237
235
286
924
3,313
-7
-7
-9
-39
-73
9,055
13,255
34,037
79,368
94,986
1,498
6,054
23,970
63,216
76,757
51
145
1,839
3,299
3,642
1945—
1946—
1947—
1948—
1949—.
44,362
39,650
39,677
41,375
37,663
18,415
16,157
17,835
19,305
15,548
15,146
11,833
8,569
9,678
11,195
6,267
6,999
7,207
7,356
7,502
189
213
314
50
235
638
669
770
890
780
341
424
477
403
367
3,480
3,476
4,614
3,807
2,069
-113
-122
-109
-113
-33
98,303
60,326
38,923
32,955
39,474
81,277
43,226
14,398
11,779
12,926
3,312
3,107
6,536
4,566
6,052
1950—
1951—
1952—
1953—
1954—
36,422
47,480
61,287
64,671
64,420
15,745
21,643
27,913
30,108
29,542
10,448
14,106
21,225
21,238
21,101
7,549
8,648
8,851
9,868
9,945
225
234
256
274
283
698
708
818
881
934
407
609
533
596
542
1,422
1,620
1,794
1,859
2,309
-73
-88
-104
-154
-235
39,544
43,970
65,303
74,120
67,537
13,018
22,471
44,037
50,442
46,986
4,674
3,736
2,826
2,216
1,732
1955—
1956—.
1957—
1958—
1959—
60,209
67,850
70,562
68,550
67,915
28,747
32,188
35,620
34,724
36,719
17,861
20,880
21,167
20,074
17,309
9,131
9,929
9,055
8,612
8,504
579
322
328
333
321
924
1,161
1,365
1,393
1,333
585
682
735
782
925
2,562
3,003
2,760
3,200
3,160
-181
-315
-467
-567
-355
64,389
66,224
68,966
71,369
80,342
40,695
40,723
43,368
44,234
46,483
2,310
2,467
23,545
3,559
4,980
1960—.
1961—1962—
19631964—
77,763
77J 659
81,409
86,376
89,459
40,715
41,338
45,571
47,588
48,697
21,494 9,137
20,954 9,063
20,523 9,585
21,579 9,915
23,493 10,211
339
1,606
1,896
2,016
2,167
2,394
1,105
982
1,142
1,205
1,252
4,062
4,080
3,206
4,435
4,076
-694
-654
-633
-513
-664
76,539
81,515
87,787
92,642
97,684
45,691
47,494
51,103
52,755
54,181
3,195
4,124
4,523
4,412
4,032
1965—
1966—.
1967« ...
1968 5-
93,-072
104, 727
116,995
126,937
48,792
55,446
62,200
73,200
25,461 10,911
30,073 9,145
34,400 9,300
33,900 8,800
2,716
3,066
3,100
3,100
1,442
1,767
1,980
2,100
4,619
5,865
6,780
6,517
-870
-635
-766
-682
96,5J}7
106,978
126,729
135,033
50,163
57,718
70,222
75, 487
4,506
4,191
4,608
4,797
See footnotes at end of table.
282
TABLE B-59.—Federal administrative budget receipts by source and expenditures by function,
fiscal years 1939-68 *—Continued
[Millions of dollars]
Expenditures—Continued
Fiscal
year
HousVeterComSpace Agriing
Interans
Genculture Natural merce
reand Health,
Inand
labor,
beneeral Allow- fund
search
and
Educomretrans- muterest gov- ances transand
and
cation
fits
agri- sources
porta- nity welfare
tech- cultural
actions
and
erntion develnology
services
ment
resources
opment
1940 _„
1941._
1942. .
1943 _.
1944..
1,199
360
662
-148
41
560
950
335
1,538
1,314
1,482
610
1,215
471
452
533
501
402
454
577
2,600
7,211
7,725
35
129
215
309
316
3,000
2,536
1,926
1,132
881
41
43
47
47
94
552
566
558
606
745
1,056
1,123
1,272
1,825
2,623
370
409
515
825
989
-14
-101
-933
-236
-433
1945._
1946._
1947._
1948. .
1949. .
32
35
38
49
1,607
747
1,243
575
2,512
319
342
548
743
1,057
4,143
886
655
1,218
1,618
-185
-193
356
94
295
864
865
,148
,213
,433
154
79
62
68
67
2,095
4,415
7,381
6,653
6,725
3.662
4,816
5,012
5,248
5,445
,047
,353
,263
,054
139
955
196
-501
239
1950._
1951..
1952..
1953..
1954. .
54
62
67
79
90
2,795
676
1,060
2,949
2,564
,206
,275
,375
,484
1,759
1,625
1,888
1,926
1,219
268
531
593
.,790
,863
,916
2,052
2,122
78
103
191
320
326
6,646
5,400
4,933
4,368
4,341
5,817
5,714
5,934
6,583
6,470
,170
,307
,445
,461
,226
267
-793
-961
-154
-235
1955 __
1956..
1957..
1958..
1959 _.
74
71
76
89
145
4,246
4,234
2,952
3,066
5,354
,216
,125
,320
,587
,741
1,225
1,892
1,305
1,632
2,025
136
-10
-118
30
970
2,165
2,462
2,631
3,042
3,841
377
343
437
541
732
4,522
4,810
4,870
5,184
5,287
6,846
7,307
7,689
7,671
,166
,576
,738
,284
,466
-181
-315
-467
-567
-355
I960..
1961._
1962..
1963. .
1964.-
401
744
1,257
2,552
4,171
3,475
3,498
4,116
5,050
5,129
1,798
2,100
2,264
2,506
2,658
1,963
2,573
2,774
2,843
3,002
122
320
349
-67
-80
3,650
4,200
4,481
4,715
5,381
943
1,076
1,244
1,339
5,266 9,266
5,414 9,050
5,403 9,198
5,186
5,492 10, 765
1,542
1,709
1,875
1,979
2,280
-654
-633
-513
-664
1965.1966 .
1967*.
1968«-
5,093
5,933
5,600
5,300
4,696
3,307
3,035
3,173
2,851
3,120
3,226
3,518
3,499
2,969
3,495
3,089
-104
347
890
1,023
5,797
7,574
10,389
11,304
1,544
2,834
3,304
2,816
5,495
5,023
6,394
6,124
2,402
2,464
2,725
100
2,781 «2,150
-870
—635
-766
-682
11,435
12,132
13,508
14,152
1 For administrative budget surplus or deficit, see Table B-60.
2
Beginning 1957, includes agricultural commodities donated abroad through voluntary agencies; classified
under "Agriculture and agricultural resources" in the earlier years.
3
Beginning with 1952, includes watershed projects of the Soil Conservation Service; these are classified
under
"Agriculture and agricultural resources" in the earlier years.
4
Includes adjustment to Daily Treasury Statement prior to 1953.
s6 Estimate.
Includes allowance of $1 billion for civilian and military pay increases, $750 million for possible shortfall
in asset sales, and $400 million for contingencies.
Sources: Treasury Department and Bureau of the Budget.
283
TABLE B-60.—Federal administrative budget receipts and expenditures and the public debty 1929-68
[Millions of dollars]
Net
receipts l
Fiscal or calendar year
Fiscal year:
Surplus
Public
Expendior
debt at end
tures
deficit (-) of year 2
1929
3,861
3,127
734
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
4,058
3,116
1,924
1,997
3,015
3,706
3,997
4,956
5,588
4,979
3,320
3,577
4,659
4,598
6,645
6,497
8,422
7,733
6,765
8,841
738
-462
-2,735
-2,602
-3,630
-2,791
-4,425
-2,777
-1,177
-3,862
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
5,137
7,096
12,547
21,947
43,563
44,362
39,650
39,677
41,375
37,663
9,055
13,255
34,037
79,368
94,986
98,303
60,326
38,923
32,955
39,474
-3,918
-6,159
-21,490
-57,420
-51,423
-53,941
-20,676
754
8,419
-1,811
36,422
47,480
61,287
64,671
64,420
60,209
67,850
70,562
68,550
67,915
39,544
43,970
65,303
74,120
67,537
64,389
66,224
68,966
71,369
80,342
-3,122
3,510
-4,017
-9,449
-3,117
-4,180
1,596
-2,819
-12,427
77,763
77,659
81,409
86,376
89,459
93,072
104,727
116,995
126,937
76,539
81,515
87,787
92,642
97,684
96.507
106,978
126,729
135,033
1,224
-3,856
-6,378
-6,266
-8,226
-3,435
—2,251
- 9 , 734
-8,096
40,800
37,464
35,559
41,056
5,241
-3,592
37,235
52,877
64,705
63,654
60,938
37,657
56,236
70,547
72,811
64,622
-422
-3,358
-5,842
-9,157
-3,683
63,119
70,616
71,749
68,262
72,738
65,891
71,157
75,349
79,778
-2,771
3,779
592
-7,088
-7,040
79,518
78,157
84,709
87,516
88,696
96,679
110,802
77,565
84,463
91,907
94,188
96,945
101,378
118,078
1,953
-6,306
-7,199
-6,672
-8,248
-4,699
-7,276
_.
1950
1951...._.
1952..
1953
1954
1955.......
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967 3
1968 3
Calendar year
1948
1949
1950
1951
1952
1953
1954
_
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965__-._.
1966
1,626
1 Gross receipts less refunds of receipts and transfers of tax receipts to the old-age and survivors insurance
trust fund, the disability insurance trust fund, the railroad retirement account, the unemployment trust
fund,
and the highway trust fund.
2
Includes guaranteed issues except those held by the Treasury. The change in the public debt from
year to year reflects not only the budget surplus or deficit but also changes in the Government's cash
on hand, and the use of corporate debt and investment transactions by certain Government enterprises.
3
Estimate.
Sources: Treasury Department and Bureau of the Budget.
284
TABLE B-61.—Government cash receipts from and payments to the public, 7946-68
[Billions of dollars]
Total
Fiscal or calendar year
]Federali
Excess
of re-
Cash Cash ceipts
repayor of
ceipts ments pay-
ments
Fiscal year:
State and local 2
Cash
receipts
Cash
payments
Excess
of receipts
or of
payments
Cash
receipts
Cash
payments
43.5
43.5
45.4
41.6
61.7
36.9
36.5
40.6
-18.2
6.6
8.9
1.0
10.7
12.0
14.0
15.6
8.5
10.6
13.5
15.8
2.2
1.5
.5
-.2
40.9
53.4
68.0
71.5
71.6
43.1
45.8
68.0
76.8
71.9
-2.2
7.6
-5.3
-.2
16.9
18.7
20.4
22.1
23.6
18.2
19.4
20.8
21.8
23.8
-1.3
-.7
-.4
.3
_ 2
-1.6
— 9
-!9
-2.0
-2.5
Excess
of receipts
or of
payments
1946
1947
1948
1949
54.2
55.6
59.4
57.2
70.2
47.5
49.9
56.3
1950
1951
1952
1953
1954
57.9
72.1
88.4
93.6
95.2
61.4
65.2
88.7
98.6
95.6
-16.0
8.1
9.4
.8
-3.5
6.9
-.3
-5.0
-.5
92.9
105.0
112.7
114.4
116.3
97.2
101.3
111.5
118.0
131.8
-4.3
3.7
1.2
-3.5
-15.6
67.8
77.1
82.1
81.9
81.7
70.5
72.5
80.0
83.5
94.8
-2.7
4.5
2.1
-1.6
-13.1
25.1
27.9
30.6
32.5
34.6
26.7
28.8
31.5
34.5
37.1
1960
1961
1962
1963
1964
133.8
138.8
146.4
158.6
167.9
132.5
141.2
152.7
161.5
171.3
1.3
-2.5
-6.3
-2.9
-3.4
95.1
97.2
101.9
109.7
115.5
94.3
99.5
107.7
113.8
120.3
.8
-2.3
-5.8
-4.0
-4.8
38.7
41.5
44.6
48.9
52.4
38.2
41.7
45.0
47.7
51.0
1965
1966
1967 4
176.6
196.3
177.7
197.5
-1.1
-1.2
119.7
134.5
154.7
168.1
122.4
137.8
160.9
172.4
-2.7
-3.3
-6.2
-4.3
56.9
61.8
55.3
59.7
1.6
2.1
52.7
57.2
59.8
57.7
50.8
50.6
51.6
59.7
1.9
41.4
44.3
44.9
41.3
41.4
38.6
36.9
42.6
.1
5.7
8.0
-1.3
11.3
12.9
14.8
16.3
9.4
12.0
14.7
17.0
1.9
.9
.1
—.7
60.2
78.8
92.6
93.1
92.8
61.0
78.1
93.3
100.1
95.0
-.8
.7
42.0
58.0
72.0
77.4
69.7
.5
1.2
-.6
-7.0
-2.2
42.4
59.3
71.3
70.2
68.6
-7.2
-1.1
17.8
19.5
21.3
22.9
24.2
19.0
20.0
21.3
22.7
25.3
97.8
109.6
116.2
115.3
123.9
99.9
105.0
116.4
124.8
132.8
-2.1
4.7
—.2
-9.5
-8.9
71.4
80.3
84.5
81.7
87.6
72.2
74.7
83.4
89.0
95.6
-.7
5.6
1.1
-7.2
-8.0
26.4
29.3
31.7
33.5
36.4
27.7
30.2
33.0
35.9
37.3
138.6
141.0
153.3
162.9
169.9
183.0
209.9
134.8
148.4
158.0
166.5
173.6
185.9
212.5
3.7
-7.4
-4.8
-3.6
-3.7
-3.0
-2.6
98.3
97.9
106.2
112.6
115.0
123.4
145.1
94.7
104.7
111.9
117.2
120.3
127.9
150.9
3.6
-6.8
—5.7
-4.6
-5.2
-4.5
-5.7
40.3
43.1
47.1
50.3
54.9
59.6
64.8
40.1
43.7
46.2
49.3
53.4
58.0
61.6
1955
1956
1957
1958
1959
-
4
1 9 6 8 _ . _.
Calendar year:
1946
1947-...
_ _
1948
1949
1950
1951
1952
1953
1954
-
1955
1956
1957
1958
1959
_-_
I960
1961
1962
1963 _
1964
1965
1966*
6.6
8.1
-2.0
—.7
.6
-.2
-.5
1.2
1.4
-1.3
-.5
m
2
-1.1
-1.4
-.9
-1.3
-2.3
-.9
2
-.5
.9
1.1
1.6
1.6
3.2
1 For derivation of Federal cash receipts and payments, see Budget of the United States Government for the
Fiscal
Year ending June 80, 1968, and Table B-64.
2
Estimated by Council of Economic Advisers from receipts and expenditures in the national income
accounts. Cash receipts consist of personal tax and nontax receipts, indirect business tax and nontax
accruals, and corporate tax accruals adjusted to a collection basis. Cash payments are total expenditures
less Federal grants-in-aid and less contributions for social insurance. (Federal grants-in-aid are therefore
excluded from State and local receipts and payments and included only in Federal payments.) See Table
B-62.
3
Surplus of $49 million.
4
Estimate.
s Deficit of $13 million.
Sources: Treasury Department, Bureau of the Budget, Department of Commerce (Office of Business
Economics), and Council of Economic Advisers.
240-782 0—67- -19
285
TABLE B-62.—Government receipts and expenditures in the national income and product accounts
1929-66
[Billions of dollars]
Calendar year or quarter
State and local
government
Federal Government1
Total government
SurSurplus or
plus or
deficit
deficit
nanaEx- (-),
Ex- (-),
Extional
ReRetional
Receipts pendiceipts pendiincome ceipts penditures income
tures
tures
and
and
prodproduct acuct accounts
counts
1929..
11.3
10.3
1.0
3.8
2.6
1.2
7.6
7.8
1930..
19311932..
19331934..
193519361937..
19381939..
10.8
9.5
8.9
9.3
10.5
11.4
12.9
15.4
15.0
15.4
11.1
12.4
10.6
10.7
12.9
13.4
16.1
15.0
16.8
17.6
-.3
-2.9
-1.8
-1.4
-2.4
-2.0
-3.1
.3
-1.8
-2.2
3.0
2.0
1.7
2.7
3.5
4.0
5.0
7.0
6.5
6.7
2.8
4.2
3.2
4.0
6.4
6.5
8.7
7.4
8.6
8.9
.3
—2 1
-L5
-1.3
-2.9
-2.6
-3.6
-.4
-2.1
-2.2
7.8
7.7
7.3
7.2
8.6
9.1
8.6
9.1
9.3
9.6
8.4
8.5
7.6
7.2
8.1
8.6
8.1
8.4
9.0
9.6
1940..
19411942..
19431944..
1945..
1946..
1947..
1948..
1949-
17.7
25.0
32.6
49.2
51.2
53.2
50.9
56.8
58.9
56.0
18.4
28.8
64.0
93.3
103.0
92.7
45.5
42.4
50.3
59.1
-.7
-3.8
-31.4
-44.1
-51.8
-39.5
5.4
14.4
8.5
-3.2
8.6
15.4
22.9
39.3
41.0
42.5
39.1
43.2
43.3
38.9
10.0
20.5
56.1
85.8
95.5
84.6
35.6
29.8
34.9
41.3
-1.3
-5.1
-33.1
-46.6
-54.5
-42.1
3.5
13.4
8.4
-2.4
10.0
10.4
10.6
10.9
11.1
11.6
12.9
15.3
17.6
19.3
9.3
9.1
8.8
8.4
8.5
9.0
11.0
14.3
17.4
20.0
1950.
1951.
1952.
1953.
1954.
1955.
1956.
1957.
1958.
1959.
68.7
84.8
89.8
94.3
89.7
100.4
109.0
115.6
114.7
128.9
60.8
79.0
93.7
101.2
96.7
97.6
104.1
114.9
127.2
131.0
7.8
5.8
-3.8
-6.9
-7.0
2.7
-12.5
-2.1
49.9
64.0
67.2
70.0
63.8
72.1
77.6
81.6
78.7
89.7
40.8
57.8
71.0
77.0
69.7
68.1
71.9
79.6
88.9
91.0
9.1
6.2
-3.8
-7.0
-5.9
4.0
5.7
2.1
-10.2
-1.2
21.1
23.3
25.2
27.2
28.8
31.4
34.7
38.2
41.6
46.0
22.3
23.7
25.3
27.0
29.9
32.7
35.6
39.5
44.0
46.8
I960.
1961.
1962.
1963196419651966
139.8
144.6
157.0
168.8
174.2
189.0
«212.2
136.1
149.0
159.9
166.9
175.6
185.8
208.7
3.7
-4.3
-2.9
1.8
-1.4
3.2
3.5
96.5
98.3
106.4
114.5
115.1
124.9
4
142. 4
93.0
102.1
110.3
113.9
118.1
123.4
142.2
3.5
-3.8
-3.8
.7
-3.0
1.6
.2
49.9
53.6
49.6
54.1
57.6
62.2
67.9
73.7
81.0
4.9
.7
4
75.3
84. 3
Seasonally adjusted annual rates
1964: I —
II..
III.
IV.
172.3
170.8
175.4
178.3
173.2
176.5
176.2
176.2
-0.9
-5.7
115.3
112.3
115.4
117.2
117.2
119.1
118.4
117.7
-1.9
-6.7
-3.0
66.8
68.7
70.8
72.0
65.7
67.6
68.6
69.5
1965:
186.5
188.5
188.6
192.6
180.1
182.4
189.6
191.2
6.4
6.1
119.6
120.6
126.3
127.0
4.5
4.4
1.4
124.0
125.0
123.8
126.9
-2.5
_ 2
73.4
74.6
75.9
77.3
71.5
72.9
74.4
75.7
203.1
209.5
215.9
198.4
202.2
212.5
221.6
4.7
7.3
3.3
136.0
141.0
145.3
133.7
137.1
145.8
152.2
2.3
3.8
-.5
80.1
83.2
85.9
77.7
79.7
82.1
84.7
II...
III..
IV..
1966: I
II
III
IV
21 See
P.
_
-.8
2.1
-1.0
-.5
Note, Table B-63.
Surplus of $32 million,
a4 Deficit of $41 million.
Data for corporate profits are.approximations for the year as a whole; data for fourth quarter are not
available. All other data incorporating or derived from thesefiguresare correspondingly approximate.
NOTE.—Federal grants-in-aid to State and local governments are reflected in Federal expenditures and
State and local receipts and expenditures. Total government receipts and expenditures have been adjusted
to eliminate this duplication.
Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce, Office of Business Economics.
http://fraser.stlouisfed.org/
286
Federal Reserve Bank of St. Louis
TABLE B-63.—Federal Government receipts and expenditures in the national income and
product accounts, 1946-68
[Billions of dollars]
Receipts
Expenditures
Transfer
payments
Indirect
PerPurbusi- Consonal Corpo- ness tribuchases
tax
rate tax tions
of
for Total goods
To
Year or quarter Total and profits and
tax non- social
and
To
fornon+LdX
QY
actax insurserv- per- eignac- ance
ices sons ers
ceipts cruals cru(net)
Grants-
in-aid
to State
and
local
governments
Net
inter-
est
paid
als
Surplus
or
Subsi- defidies cit
less (-),
cur- narent tionsur- al
plus inof come
gov- and
ern- prodment uct
enter- acprises
counts
Fiscal year:
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
19671
19681
Calendar year:
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966 P
Calendar
quarter:
1964: I
III
1965: I
II
III
IV
1966: I
II
1
2
38.4
42.7
43.6
40.0
42.0
60.8
65.1
69.3
65.8
67.2
75.8
80.7
77.9
85.4
94.8
95.3
104.2
110.2
115.5
120.6
132.6
149.8
167.1
16.9
18.8
20.0
16.3
16.5
23.2
28.8
31.4
30.3
29.7
33.6
36.7
36.3
38.2
42.5
43.6
47.3
49.6
50.7
51.3
57.9
65.5
76.8
39.1
43.2
43.3
38.9
49.9
64.0
67.2
70.0
63.8
72.1
77.6
81.6
78.7
89.7
96.5
98.3
106.4
114.5
115.1
124.9
142.4
17.2
8.6
19.6 10.7
19.0 11.8
9.8
16.1
18.1 17.0
26.1 21.5
31.0 18.5
32.2 19.5
29.0 17.0
31.4 20.6
35.2 20.6
37.4 20.2
36.8 18.0
39.9 22.5
43.6 21.7
44.7 21.8
48.6 22.7
51.5 24.6
48.6 26.5
54.2 29.1
61.9 231.5
8.3
10.6
11.2
11.0
11.9
21.5
19.3
19.7
17.3
18.7
21.1
20.6
17.8
21.5
22.3
20.3
22.9
23.5
25.6
27.8
30.7
32.3
35.3
74
7.9
7.9
8.0
8.2
9.5
9.7
10.7
10.4
10.0
10.8
11.7
11.6
11.9
13.2
13.3
14.2
15.0
15.6
16.9
15.9
16.5
16.9
7.8
7.8
8.0
8.0
8.9
9.4
10.3
10.9
9.7
10.7
11.2
11.8
11.5
12.5
13.5
13.6
14.6
15.3
16.2
16.8
16.0
5.8
5.5
4.6
4.8
5.5
6.6
7.3
7.5
7.8
8.7
10.2
11.7
12.2
13.8
16.7
18.1
19.9
22.1
23.6
24.6
28.1
35.5
38.1
5.5
5.1
4.5
4.9
5.9
7.1
7.4
7.4
8.1
9.3
10.6
12.2
12.4
14.8
17.7
18.2
20.5
23.1
23.9
24.8
33.0
55.5
29.5
30.9
39.6
42.4
44.6
66.0
75.8
74.2
67.3
69.8
76.0
83.1
90.9
91.3
98.0
106.4
111.4
116.9
118.3
132.3
153.6
169.2
40.1
13.0
13.2
19.3
19.0
25.1
46.6
56.1
53.2
43.9
45.2
47.7
50.7
54.7
52.7
55.5
60.9
63.4
65.7
64.3
71.7
83.6
91.9
35.6
29.8
34.9
41.3
40.8
57.8
71.0
77.0
69.7
68.1
71.9
79.6
88.9
91.0
93.0
102.1
110.3
113.9
118.1
123.4
142.2
17.2
12.5
16.5
20.1
18.4
37.7
51.8
57.0
47.4
44.1
45.6
49.5
53.6
53.7
53.5
57.4
63.4
64.2
65.2
66.8
77.0
8.3
8.7
8.1
11.3
8.1
8.5
9.3
10.5
12.1
12.8
14.4
17.8
19.8
20.6
23.6
25.1
26.4
27.3
28.2
32.0
37.4
44.0
9.2
8.8
7.6
8.7
10.8
8.5
8.8
9.5
11.5
12.4
13.4
15.7
19.5
20.1
21.5
24.9
25.5
27.0
27.8
30.3
34.2
1.8
2.6
5.0
4.3
3.1
2.6
2.1
1.7
2.1
1.8
1.9
1.7
1.8
1.8
2.1
2.1
2.1
2.2
2.2
2.3
2.4
2.6
2.2
1.9
3.8
5.1
3.6
3.1
2.1
2.0
1.8
2.0
1.9
1.8
1.8
1.8
1.9
2.1
2.2
2.2
2.2
2.2
2.3
10.0
10.5
2.1 -17.1
.7
13.2
.5
12.7
.8
.4
1.0
-.5
1.3
16.2
1.1
-1.0
.9 -6.5
1.0 - 8 . 5
1.3
-.1
1.7
6.0
2.8
4.7
2.5 - 5 . 1
2.4 - 5 . 5
3.5
2.3
3.2 - 2 . 7
2
.1
3.8
3.6 - 1 . 2
1
.
4
3.8
2.3
4.1
.3
4.5
5.4 - 3 . 8
3.5 - 2 . 1
10.4
11.2
14.6
4.2
4.2
4.3
4.4
4.5
4.7
4.7
4.9
5.0
4.9
5.3
5.7
5.6
6.4
7.1
6.6
7.2
7.7
8.3
8.7
9.6
1.6
3.5
.6
13.4
.7
8.4
.8 -2.4
9.1
1.2
6.2
1.3
3
.8
1.0
.8 -7.0
5
.
9
1.1
4.0
1.5
5.7
2.4
2.1
2.6
2.7 -10.2
2.1 - 1 . 2
3.5
2.5
3.8 - 3 . 8
4.0 - 3 . 8
.7
3.6
4.2 - 3 . 0
4.2
1.6
4.6
2.2
10.2
10.8
11.0
11.0
11.1
11.1
11.6
13.0
14.6
15.3
15.3
8.2
8.2
8.4
8.4
8.6
8.7
8.8
8.8
9.3
9.5
9.7
10.0
0.9
1.5
1.8
2.1
2.4
2.4
2.5
2.8
2.9
3.0
3.2
3.7
4.7
6.2
6.8
6.9
7.6
8.4
9.8
10.9
12.9
14.8
16.7
1.1
1.7
2.0
2.2
2.3
2.5
2.6
2.8
2.9
3.1
3.3
4.2
5.6
6.8
6.5
7.2
8.0
9.1
3.7
4.2
4.2
4.3
4.4
4.6
4.8
4.8
5.0
4.9
5.1
5.5
5.7
5.9
7.0
6.8
6.8
7.5
8.1
8.5
9.1
Seasonally adjusted annual rates
115.3
112.3
115.4
117.2
124.0
125.0
123.8
126.9
136.0
141.0
145.3
50.4
46.2
48.1
49.6
53.4
54.9
53.8
54.7
57.1
60.7
63.9
65.8
26.0
26.4
26.8
26.7
28.7
28.7
28.9
30.3
31.9
31.9
31.6
15.5
16.1
16.6
16.5
17.5
16.8
16.3
16.7
15.2
16.1
16.2
16.5
23.4 117.2
23.7 119.1
24.0 118.4
24.4 117.7
24.5 119.6
24.6 120.6
24.7 126.3
25.2 127.0
31.7 133.7
32.2 137.1
33.6 145.8
34.3 152.2
64.9
66.6
65.1
64.1
64.4
65.6
67.5
69.8
71.9
74.0
79.0
82.5
28.3
27.5
27.6
27.7
29.2
28.4
32.5
30.8
32.6
32.6
34.5
37.2
2.2
2.3
2.2
2.1
2.0
2.5
2.2
1.9
2.8
2.2
2.4
2.0
4.0
4.2
4.4
4.4
4.3
4.2
4.1
4.1
4.1
4.2
4.8
5.2
-1.9
-6.7
-3.0
-.5
4.5
4.4
-2.5
-.2
2.3
3.8
-.5
Estimate.
Data for corporate profits are approximations for the year as a whole; data for fourth quarter are not available. All other data incorporating or derived from thesefiguresare correspondingly approximate.
NOTE.—These accounts, like the cash budget, include the transactions of the trust accounts. Unlike
both the administrative budget and the cash statement, they exclude certain financial transactions. In
general, they do not use the cash basis for transactions with business. Instead, corporate profits taxes
are included in receipts on an accrual instead of a cash basis; expenditures are timed with the delivery instead of the payment for goods and services; and CCC guaranteed price-support crop loans financed
by banks are counted as expenditures when the loans are made, not when CCC redeems them.
Data for Alaska and Hawaii included beginning 1960.
Sources: Department of Commerce (Office of Business Economics) and Bureau of the Budget.
287
T A B L E B-64.—Relation
of three measures of Federal Government receipts and
fiscal years, 1964-68•*
expenditures,
[Billions of dollars]
Fiscal years
Receipts or expenditures
1964
1965
1966
1967 2
89.5
30.3
4.2
.1
115.5
93.1
31.0
4.3
.1
119.7
104.7
34.9
4.5
.6
134.5
117.0
44.9
6.2
1.1
154.7
.3
.4
1968
RECEIPTS
Administrative budget receipts
Plus: Trust fund receipts
Less: Intragovernmental transactions
Receipts from exercise of the monetary authority
Equals: Federal receipts from the public
Less:
Exclusions from the Federal sector, national income
accounts:
Loans repaid. __
Items classified in another sector:
District of Columbia
Foreign assistance, military trust
Plus:
Exclusions from Federal receipts from the public:
Excess of accruals over collections
Employer/employee contributions to Federal retirement funds
Plus:
Miscellaneous retting, grossing, and related adjustments:
Receipts netted against expenditures, etc
Other
Equals: Federal receipts, national income and product accounts.
.3
1.1
126.9
48.1
6.5
.5
168.1
.4
1.4
.7
1.1
-1.2
-3.9
.4
2.0
2.2
2.3
2.3
2.3
-1.2
-.1
115.5
-.7
-.2
120.6
-1.2
-.5
132.6
-1.0
-.5
149.8
-1.0
-.7
167.1
97.7
28.9
4.2
2.0
120.3
96.5
29.6
4.3
-.6
122.4
107.0
34.9
4.5
-.4
137.8
126.7
40.9
6.2
.6
160.9
135.0
44.5
6.5
.7
172.4
2.0
1.8
3.3
1.2
3.2
1.9
4.3
1.7
1.8
.2
1.1
1.2
1.0
1.1
1.0
.5
1.1
.6
1.4
EXPENDITURES
Administrative budget expenditures 3
Plus: Trust fund expenditures ...
Less: Intragovernmental transactions
Debt issued in lieu of checks and other adjustments..
Equals: Federal payments to the public
Less: Exclusions from the Federal sector:
Loans and financial transactions:
Lending: Net
Federal land banks and Federal home loan banks..
Acquisition of foreign currency for financing agricultural exports
Items classified in other sectors:
District of Columbia
Foreign assistance, military trust
Plus: Exclusions from Federal payments to public:
Excess of deliveries or accruals over payments
Employer/employee contributions to Federal retirement funds
Plus: Miscellaneous netting, grossing, and related adjustments:
Receipts netted against expenditures
Other
Equals: Federal expenditures, national income and product
accounts
.2
.4
2.0
2.2
2.3
2.3
2.3
-1.2
1.1
-.7
.5
-1.2
1.0
-1.0
-1.0
.1
116.9
118.3
132.3
153.6
169.2
.5
* The Federal sector receipts and expenditures are identical to those published by the Department of
Commerce
in the Survey of Current Business.
2
Data for 1967 and 1968 are estimates.
3
Includes Government sponsored enterprises, net.
NOTE.—Data for Alaska and Hawaii included.
Sources: Bureau of the Budget and Department of Commerce (Office of Business Economics).
288
TABLE B-65.—State and local government revenues and expenditures, selectedfiscalyears, 1927-65
[Millions of dollars]
General revenues by source 2
and
gross
receipts
taxes
Fiscal year 1
General expenditures by function *
Revenue
Indi- Corpo- from
vidual ration
Fednet
income income
eral
taxes
taxes
Government
All
other
revenue 3
EduTotal cation
All
High- Public
wel- other«
fare
1927
7,271
4,730
470
70
92
116
1,793
7,210
2,235
1,809
151
3,015
1932
1934
1936
1938
7,267
7,678
8,395
9,228
1,487
t, 076
t, 093
[,440
752
1,008
1,484
1,794
74
80
153
218
79
49
113
165
232
1,016
948
800
1,643
1,449
1,604
1,811
7,765
7,181
7,644
8,757
2,311
1,831
2,177
2,491
1,741
1,509
1,425
1,650
444
889
827
3,269
2,952
3,215
3,547
1940
1942
1944
1946
1948...
t, 430
10, 418 [,537
10,908 4,604
12, 356 4,986
17, 250 6,126
1,982
2,351
2,289
2,986
4,442
224
276
342
422
543
156
272
451
447
592
945
858
954
855
1,861
1,872 9,229
2,123 9,190
2,269 8,863
2,661 11,028
3,685 17, 684
2,638
2,586
2,793
3,356
5,379
1,573
1,490
1,200
1,672
3,036
1,156
1,225
1,133
1,409
2,099
3,862
3,889
3,737
4,591
7,170
1950
1952
1953
1954
20,911
25,181
27, 307
29, 012
8,652
9,375
9,967
5,154
6,357
6,927
7,276
788
998
1,065
1,127
593
846
817
778
2,486
2,566
2,870
2,966
4,541
5,763
6,252
6,897
22, 787
26,098
27, 910
30, 701
7,177
8,318
9,390
10, 557
3,803
4;650
4,987
5, 527
1955
1956
1957
1958
1959
31, 073
34, 667
38,164
41, 219
45,306
10, 735
11, 749
12, 864
14,047
14, 983
7,643
8,691
9,467
9,829
10,437
1,237
1,538
1,754
1,759
1,994
744
890
984
1,018
1,001
3,131 7,584
3,335 8,465
3,843 9,252
4,865 9,699
6,377 10, 516
33, 724
36, 711
40, 375
44,851
48, 887
11, 907
13, 220
14,134
15, 919
17, 283
6,452
6,953
7,816
8,567
9,592
2,940 8,867
2,788 10,342
2,914 10, 619
3,060 11, 557
3,168 12,197
3,139 13,399
3,485 14,940
3,818 16,547
4,136 17, 876
1960
1961
1962
1963
50, 505
54, 037
58,252
62,890
16,405
18,002
19, 054
20, 089
11, 849
12, 463
13,494
14, 456
2,463
2,613
3,037
3,269
1,180
1,266
1,308
1,505
6,954
7,131
7,871
8,722
51, 876
56, 201
60,206
64, 816
18, 719
20, 574
22, 216
23, 776
9,428
9,844
10,357
11,136
1962-635
1963-64 5
1964-65 5
19,833 14, 446 3,267
68, 443 21, 241 15, 762 3,791
74,341 22,918 17,118 4,090
1,505
14, 555 63,977 23, 729
1,695 10,002 15, 952 69,302 26, 286
1,929 11,029 17,257 74, 786 28,803
11,150
11, 664
12,221
7,349
11,634
12,563
13,489
14,850
4,404
4,720
5,084
5,481
19, 324
21,063
22, 549
24, 423
5,420 23, 678
5,766 25, 586
6,315 27,447
12 Fiscal years not the same for all governments. See footnote 5.
Excludes revenues or expenditures of publicly owned utilities and liquor stores, and of insurance-trust
activities. Intergovernmental receipts and payments between State and local governments are also
excluded.
3
4 Includes licenses and other taxes and charges and miscellaneous revenues.
Includes expenditures for health, hospitals, police, local fire protection, natural resources, sanitation,
housing and urban renewal, local parks and recreation, general control, financial administration, interest
on5 general debt, and other unallocable expenditures.
Data for fiscal year ending in the 12-month period through June 30. Data for 1963 and earlier years
include local government amounts grouped in terms offiscalyears ended during the particular calendar
year.
NOTE.—Data are not available for intervening years.
Data for Alaska and Hawaii included beginning 1959 and 1960, respectively.
See Table B-55 for net debt of State and local governments.
Source: Department of Commerce, Bureau of the Census.
289
CORPORATE PROFITS AND FINANCE
TABLE B-66.—Profits before and after taxes, all private corporations, 1929-66
[Billions of dollars]
Corporate profits (before taxes) and
inventory valuation adjustment
Corporate profits
after taxes
Cor- CorCorpoManufacturing
Transporate
poportarate rate
capital
Untion,
profNonconAll
tax
Dur- dur- com- other its
All
Divi- disliaable able muni- inindend trib- sumpbetion
bil- Total pay- uted allowdus- Total goods goods
cation,
fore
dusity i
intries
ments prof- ances 2
and
taxes
intries
dus- dus- public
its
tries tries utilities
Year or
quarter
1929
10.5
1930
1931
1932
1933
1934
1935
19361937
1938
1939
7.0
2.0
-1.3
-1.2
1.7
3.4
5.6
6.8
4.9
6.3
1940
1941
1942
1943.
1944
1945
1946
1947
1948
1949
9.8
15.2
20.3
24.4
23.8
19.2
19.3
25.6
33.0
30.8
5.5
9.5
11.8
13.8
13.2
9.7
9.0
13.6
17.6
16.2
1950
1951
1952—
1953
1954
1955
1956
1957
1958—
1959
37.7
42.7
39.9
39.6
38.0
46.9
46.1
45.6
41.1
51.7
49.9
50.3
55.7
58.9
66.6
74.2
79.8
1960
1961
1962
1963
1964
1965
1966* .
-
2.6
2.6
1.8
1.5
3.9
1.3
*
- . 5 -1.0
-.4 -.4
1.1
.3
2.1
.9
3.2
1.7
3.8
1.7
2.3
.8
3.3
1.7
5.2
2.4
1.3
.5
*
.8
1.1
1.5
2.1
1.6
1.7
1.2
.5
.2
.4
.4
.7
.8
.5
1.0
1.9
3.7
.2 - . 4
- . 9 -2.3
-.8
1.0
.3
2.3
.9
3.6
1.7
6.3
2.2
6.8
2.1
4.0
2.0
7.0
3.1
6.4
7.2
8.1
7.4
4.5
2.4
5.8
7.5
8.1
2.4
3.1
4.6
5.7
5.9
5.2
6.6
7.8
10.0
8.1
1.3
2.0
3.4
4.4
3.9
2.7
1.8
2.2
3.0
3.0
3.0
3.7
5.1
6.2
6.7
6.7
8.5
9.9
12.5
11.6
10.0
17.7
21.5
25.1
24.1
19.7
24.6
31.5
35.2
28.9
2.8
7.6
11.4
14.1
12.9
10.7
9.1
11.3
12.5
10.4
20.9
24.6
21.6
22.0
19.9
26.0
24.7
24.0
19.3
26.3
12.0
13.2
11.7
11.9
10.5
14.3
12.8
13.3
9.3
13.6
8.9
11.4
9.9
10.1
9.4
11.8
11.9
10.7
10.0
12.7
4.0
4.6
4.9
5.0
4.7
5.6
5.9
5.8
5.9
7.0
12.7
13.5
13.3
12.6
13.4
15.2
15.6
15.8
15.9
18.4
42.6
43.9
38.9
40.6
38.3
48.6
48.8
47.2
41.4
52.1
24.4
23.3
26.6
28.8
32.4
37.8
40.7
12.0
11.4
14.1
15.8
17.9
22.1
23.5
12.4
11.9
12.5
13.0
14.5
15.7
17.2
7.5
7.9
8.5
9.5
10.4
11.1
12.0
17.9
19.1
20.5
20.6
23.8
25.3
27.1
49.7
50.3
55.4
59.4
67.0
75.7
81.8
3.4
10.0
1.4
Profits
plus
capital
consumption
allowances '
8.6
5.8
2.8
4.2
12.8
.8
2.9
.5 - . 9
.4 - 2 . 7
.5
.4
.7
1.6
1.0
2.6
1.4
4.9
1.5
5.3
1.0
2.9
1.4
5.6
5.5
4.1
2.5
2.0
2.6
2.8
4.5
4.7
3.2
3.8
-2.6
-4.9
-5.2
-1.6
-1.0
-.2
.4
.6
-.2
1.8
4.3
4.3
4.0
3.8
3.6
3.6
3.6
3.6
3.7
3.7
7.2
3.5
1.3
4.2
5.2
6.3
8.5
8.9
6.6
9.3
7.2
10.1
10.1
11.1
11.2
9.0
15.5
20.2
22.7
18.5
4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2
3.2
5.7
5.9
6.6
6.5
4.4
9.9
13.9
15.6
11.3
3.8
4.2
5.0
5.4
6.1
6.4
4.7
5.8
7.0
7.9
11.0
14.4
15.2
16.4
17.2
15.4
20.2
26.0
29.7
26.5
17.8
22.3
19.4
20.3
17.7
21.6
21.7
21.2
19.0
23.7
24.9
21.6
19.6
20.4
20.6
27.0
27.2
26.0
22.3
28.5
8.8
8.6
8.6
8.9
9.3
10.5
11.3
11.7
11.6
12.6
16.0
13.0
11.0
11.5
11.3
16.5
15.9
14.2
10.8
15.9
8.8
10.3
11.5
13.2
15.0
17.4
18.9
20.8
22.0
23.5
33.7
31.8
31.0
33.5
35.5
44.4
46.1
46.8
44.3
52.0
23.0
23.1
24.2
26.3
28.4
31.2
33.7
26.7
27.2
31.2
33.1
38.7
44.5
48.1
13.4
13.8
15.2
16.5
17.3
19.2
20.9
13.2
13.5
16.0
16.6
21.3
25.3
27.1
24.9
26.2
30.1
31.8
33.9
36.3
38.8
51.6
53.5
61.3
64.8
72.5
80.8
86.8
Seasonally adjusted annual rates
1964: I
II
III
65.3
66.5
67.8
66.8
32.1
32.4
33.0
32.2
18.1
17.7
18.4
17.5
14.1
14.6
14.6
14.7
10.1
10.2
10.6
10.5
23.0
23.9
24.2
24.)
65.8
66.8
67.8
67.7
27.9
28.3
28.7
28.6
38.0
38.5
39.1
39.0
17.1
17.3
17.4
17.7
20.9
21.3
21.7
21.4
32.9
33.5
34.2
34.8
70.9
72.0
73.3
73.9
1965: I
II
III
IV
73.2
72.7
74.0
76.9
37.4
36.7
37.4
39.6
21.9
21.2
21.9
23.2
15.5
15.5
15.5
16.4
10.7
10.9
11.2
11.5
25.1
25.1
25.3
25.8
74.5
74.5
75.0
78.7
30.7
30.7
30.9
32.4
43.8
43.8
44.1
46.3
18.1
18.8
19.5
20.2
25.7
25.0
24.6
26.1
35.2
36.0
36.8
37.2
79.0
79.8
80.9
83.5
1966: I
II
III
IV J>
80.0
79.9
79.1
41.9
40.6
39.5
24.7
23.4
22.5
17.2
17.2
17.0
11.3
12.0
12.2
26.7
27.2
27.4
82.7
82.8
81.9
34.1
34.1
33.7
48.7
48.7
48.2
20.9
21.1
21.1
20.7
27.8
27.6
27.1
37.7
38.5
39.1
39.7
86.4
87.1
87.3
1
Federal and State corporate income and excess profits taxes,
a Includes depreciation and accidental damages.
Corporate profits after taxes plus corporate capital consumption allowances.
Data for corporate profits are approximations for the year as a whole; data for fourth quarter are n o t
available. All other data incorporating or derived from these figures are correspondingly approximate.
NOTE.—Beginning 1962 data reflect the new depreciation guidelines issued b y the Treasury Department
July 11,1962, and the investment tax credit provided in the Revenue Act of 1962.
3
4
Source: Department of Commerce, Office of Business Economics.
290
T A B L E B—67.—Sales, profits, and stockholders* equity, all manufacturing
newspapers), 7947—66
corporations
(except
[Billions of dollars]
All manufacturing
corporations
Year or
quarter
Sales
(net)
Nondurable goods
industries
Durable goods industries
Profits
Profits
StockStock- Sales
Stock- Sales
holders'
holders: (net)
holders' (net)
Before After equity l
Before After equity »
Before After equity
taxes taxes
taxes taxes
taxes taxes
Profits
194719481949-
150.7
165.6
154.9
16.6
18.4
14.4
10.1
11.5
9.0
65.1
72.2
77.6
66.6
75.3
70.3
7.6
8.9
7.5
4.5
5.4
4.5
31.1
34.1
37.0
84.1
90.4
84.6
9.0
9.5
7.0
5.6
6.2
4.6
34.0
38.1
40.6
19501951195219531954-
181.9
245.0
250.2
265.9
248.5
23.2
27.4
22.9
24.4
20.9
12.9
11.9
10.7
11.3
11.2
98.3
103.7
108.2
113.1
86.8
116.8
122.0
137.9
122.8
12.9
15.4
12.9
14.0
11.4
6.7
6.1
5.5
5.8
5.6
47.2
49.8
52.4
54.9
95.1
128.1
128.0
128.0
125.7
10.3
12.1
10.0
10.4
6.1
5.7
5.2
5.5
5.6
43.5
51.1
53.9
55.7
58.2
19551956195719581959-
278.4
307.3
320. 0
305.3
338.0
28.6
29.8
28.2
22.7
29.7
15.1
16.2
15.4
12.7
16.3
120.1
131.6
141.1
147.4
157.1
142.1
159.5
166.0
148.6
169.4
16.5
16.5
15.8
11.4
15.8
8.1
8.3
7.9
5.8
8.1
58.8
65.2
70.5
72.8
77.9
136.3
147.8
154.1
156.7
168.5
12.1
13.2
12.4
11.3
13.9
7.0
7.8
7.5
6.9
8.3
61.3
66.4
70.6
74.6
79.2
19601961196219631964-
345.7
356.4
389.9
412.7
443.1
27.5
27.5
31.9
34.9
39.6
15.2
15.3
17.7
19.5
23.2
165.4
172.6
181.4
189.7
199.8
173.9
175.2
195.5
209.0
226.3
14.0
13.6
16.7
18.5
21.2
7.0
6.9
8.6
9.5
11.6
82.3
84.9
89.1
93.3
98.5
171.8
181.2
194.4
203.6
216.8
13.5
13.9
1S.1
16.4
18.3
8.2
8.5
9.2
10.0
11.6
83.1
87.7
92.3
96.3
101.3
1965..
492.2
46.5
27.5
211.7 257.0
26.2
14.5
20.3
13.0
106.3
1964: I
I
III
IV
1965: I
104.6
111.9
110.2
116.5
9.0
10.6
9.6
10.3
5.1
6.1
5.7
6.3
195.2
198.5
201.7
203.6
53.3
58.6
55.2
59.2
4.9
6.1
4.8
5.4
2.5
3.3
2.7
3.1
96.2
97.9
99.5
100.4
51.3
53.3
54.9
57.3
4.1
4.6
4.8
4.9
2.6
2.9
3.0
3.2
99.1
100.6
102.2
103.2
114.9
124.0
121.5
131.9
10.7
12.3
11.0
12.5
6.2
7.2
6.6
7.5
205.4
209.7
213.6
218.1
60.0
66.0
62.0
69.0
6.1
7.2
5.8
7.1
4.0
3.3
4.0
102.2
104.6
106.4
108.2
54.9
58.0
59.4
62.9
4.6
5.1
5.2
5.4
2.9
3.2
3.3
3.5
103.2
105.1
107.2
109.9
129.9
141.0
137.8
12.4
14.0
12.3
7.2
8.4
7.4
222.4
228.6
233.4
68.0
75.4
71.1
7.0
8.2
6.5
3.8
4.6
3.7
110.0
114.2
117.1
61.9
65.6
66.7
5.4
5.8
5.8
3.4
3.7
3.7
112.4
114.3
116.3
III
IV
1966: I
II—_
III
105.4 235.2
i Annual data are average equity for the year (using four end-of-quarter figures).
NOTE.—For explanatory notes concerning compilation of the series, see Quarterly Financial Report for
Manufacturing Corporations, Federal Trade Commission and Securities and Exchange Commission.
Data are not necessarily comparable from one period to another due to changes in accounting procedures,
industry classifications, sampling procedures, etc. Specific information about the effects of the more
significant changes and revisions is contained in the following issues of the Quarterly Financial Report:
third quarter 1953, third quarter 1956, first quarter 1959, and first quarter 1965.
Comparability for certain industries was affected by changes noted in the following reports: fourth
quarter 1952, first quarter 1955, second quarter 1960, third quarter 1960, fourth quarter 1965, and second
quarter 1966.
Data for Alaska and Hawaii included for all periods.
Sources: Federal Trade Commission and Securities and Exchange Commission.
291
TABLE B-68.—Relation of profits after taxes to stockholders' equity and to sales, all manufacturing corporations {except newspapers), by industry group, 1947-66
Durable goods industries
All
Year or
quarter
manufacturElecing
trical
corMoma- Maporator Air- chin- chintions Total vehi- craft ery, ery
(ex- dur- cles and equip- (except able and parts ment cept
newsequipand elecsup- trical)
papment
plies
ers)
PriFab- mary
riiron
cated and
metal steel
prod- inucts dustries
Primary
nonferrous
metal
industries
Stone,
clay.
and
glass
products
Furniture
and
fixtures
Lumber
Inand struwood ments
prod- and
ucts re(ex- lated
cept prodfurni- ucts
ture)
Miscellaneous
manufacturing
(including
ordnance)
Ratio of profits after Federal taxes (annual rate) to stockholders' equity—percent
1947
1948
1949
15.6
16.0
11.6
14.4
15.7
12.1
1950
1951.
1952
1953
1954
1955
1956
1957
1958
1959
15.4
12.1
10.3
10.5
16.9 25.3
13.0 14.3
11.1 13.9
11.1 13.9
10.3 14.1
13.8 21.7
12.8 13.1
11.3 14.2
1960
1961
1962
1963
1964
1965
19.0
16.1
13.6
16.4
19.9
22.1
15.7
16.3
11.6
17.6
17.0
10.4
12.0
14.7
10.0
12.4
14.2
14.1
13.0
11.3
16.0 14.3
13.4 12.3
10.1* 8.5
9.8 10.7
15.1
13.8
11.6
11.1
10.4
15.5
16.4
8.6
8.0
8.2
10.4
10.4
14.5
20.9
14.0
13.7
13.1
12.4
12.3
11 4
17.7 12.5
13.2 10.2
8.1 12.5
9.2
8.9
9.8
8.5
8.1
9.6
10.3
11.6
13.0
10.1
11.7
13.8
13.5
11.4
16.3
16.7
16.9
19.5
12.7
11.3
12.2
15.2
10.0
10.1
11.2
13.5
12.5
14.1
10.1
13.2
1965: I
II
III
IV
12.1
13.8
12.3
13.7
12.9 22.9
15.3 23.5
12.4 10.3
14.6 21.4
12.2
14.7
16.4
17.2
11.7
13.1
13.2
16.0
12.0
15.8
14.4
14.3
11.3
15.0
14.1
12.5
1966: I.
II
III
13.0
14.7
12.7
14.0 20.6
16.2 19.7
12.6 5.5
14.6
15.9
12.7
14.3
15.5
14.6
14.4
17.0
14.8
13.9
16.6
15.6
9.9
12.6
12.3
10.9
7.3
9.8
9.5
8.9
9.8
8.6
10.3
12.6
10.7
7.6
8.1
10.0
10.7
13.5
12.7
11.4
6.9
9.7
9.3
7.3
8.0
7.5
7.8
9.1
9.6
5.6
5.9
7.9
8.3
7.2
8.0
7.2
6.1
5.4
7.0
8.8
9.8
11.0
11.5
8.6
7.9
9.1
12.2
9.7
14.0
15.0
13.1
18.0 22.9
15.9 19.2
8.1
9.1
15.2
11.3
17.5
11.9
8.6
8.2
6.0
9.2
8.5
7.1
6.3
9.3
6.0
7.9
17.7
14.2
11.7
11.8
12.5
15.6
14.9
12.4
10.2
12.7
7.1
7.1
7.5
7.6
9.8
9.9
8.9
8.9
8.7
9.6
6.5
4.9
7.9
8.3
11.9
10.3
10.1
13.4
10.1
11.8
13.3
10.4
12.2
4.6
9.8
6.7
12.1
13.5
10.8
13.0
14.5
16.0
10.7
12.7
10.1
14.0
16.2
13.6
5.9
12.9
12.3
12.4
15.9
14.5
14.6
11.2
8.1
11.6
8.5
6.3
8.9
11.1
8.7
4.7
5.7
9.4
3.6
4.1
5.6
8.2
9.9
8.1
14.4
14.0
12.1
14.0
12.2
16.7
13.2
11.6
11.4
12.3
12.5
12.4
12.0
10.6
13.1
12.3
11.6
10.6
12.0
12.1
14.4
17.5
9.2
9.9
9.4
8.8
9.5
7.2
9.7
7.0
8.2
7.5
8.5
11.6
7.7
8.2
9.3
10.7
14.7
16.0
17.7
21.5
10.5
17.6
20.5
22.0
12.2
13.4
15.7
8.7
9.4
14.1
Profits after taxes per dollar of sales—cents
1947
1948
1949
6.7
7.0
5.8
6.7
7.1
6.4
6.0
6.9
7.9
6.3
5.9
5.7
7.2
7.3
6.4
7.4
7.1
5.1
6.6
7.6
6.5
8.9
9.0
6.9
7.9
8.6
8.6
6.0
5.5
3.3
11.4
9.9
5.9
7.7
7.8
7.1
6.3
5.6
3.6
1950
1951
1952
1953
1954
1955.
1956
1957
1958
1959.
7.1
4.8
4.3
4.3
4.5
5.4
5.3
4.8
4.2
4.8
7.7
5.3
4.5
4.2
4.6
5.7
5.2
4.8
3.9
4.8
8.3
4.7
4.7
3.9
5.1
6.3
5.2
5.4
4.0
6.3
7.3
5.5
4.8
4.2
4.4
5.1
5.4
4.8
3.7
4.8
6.8
5.0
4.0
3.6
3.1
3.8
4.0
3.6
3.1
3.2
7.9
5.8
4.7
5.3
5.3
7.2
6.7
6.6
5.4
5.4
10.2
10.1
2.9
2.4
1.6
7.2
5.0
4.5
4.1
4.5
4.4
3.8
4.2
3.8
4.4
7.8
6.7
6.3
6.6
8.3
9.3
6.6
4.7
5.8
7.1
6.6
6.5
7.4
8.6
8.2
7.5
6.8
7.9
5.1
3.4
2.7
2.6
2.1
2.9
3.4
2.6
2.0
2.7
9.4
5.5
4.1
3.5
3.4
5.4
3.9
2.3
2.8
4.2
8.6
6.1
4.8
4.6
5.5
6.0
5.8
5.7
5.4
6.5
5.6
3.7
2.7
2.9
2.8
3.1
3.6
2.5
3.0
3.5
1960
1961.
1962
1963
1964
1965.
4.4
4.3
4.5
4.7
5.2
5.6
4.0
3.9
4.4
4.5
5.1
5.7
5.9
5.5
6.9
6.9
7.0
7.2
1.4
1.8
2.4
2.3
2.6
3.3
3.5
3.5
3.7
3.8
4.2
4.8
3.9
4.1
4.5
4.7
5.8
6.2
2.4
2.5
3.1
3.2
3.7
4.5
5.1
4.6
3.9
4.8
5.6
5.7
5.4
5.3
5.5
5.3
6.5
7.3
6.6
5.8
5.6
5.3
5.6
5.9
2.1
1.6
2.3
2.4
2.9
3.7
1.7
1.9
2.5
3.9
4.0
5.9
5.4
5.9
6.0
7.2
8.6
3.5
3.6
3.4
3.3
3.6
3.8
1965: I
II
Ill
IV
1966: I
II
Ill
5.4
5.8
5.4
5.7
5.5
6.1
5.3
5.7
8.1
8.2
4.8
7.3
2.7
3.1
3.6
3.5
4.3
4.6
4.7
5.2
5.7
6.6
6.3
6.1
4.2
5.1
4.8
4.1
6.2
6.2
5.2
5.2
7.6
7.7
6.7
7.3
3.1
6.7
7.2
6.0
2.9
3.7
4.0
4.2
2.9
4.2
4.7
3.9
7.8
8.0
9.0
9.5
3.6
3.9
3.4
4.1
5.6
5.9
5.4
5.6
6.2
5.2
7.3
7.1
2.8
3.1
3.2
2.7
4.8
5.1
4.9
6.3
6.9
4.8
5.3
5.1
5.4
6.4
5.4
8.0
8.5
7.7
3.9
6.8
6.5
3.6
4.2
3.9
3.3
5.2
4.1
8.5
9.3
4.2
4.2
5.1
6.4
See footnotes at end of table.
292
3.3
10.1
TABLE B-68.—Relation of profits after taxes to stockholders' equity and to sales, all manufacturing corporations {except newspapers), by industry group, 1947-66—Continued
Nondurable goods industries
Year or quarter
Total
nondurable^
Food
and
kindred
products
Tobacco
manufactures
Printing
Ruband
ber
ApTex- parel Paper pub- Chemand Leather
Petro- mislish- icals
and
tile
and
and
and
leum
ing
allied
mill
cella- leather
refin- neous
prod- (ex- allied
prod- related
prodprodproding
cept
ucts
ucts
plastic ucts
ucts
news- ucts
prodpaucts
pers)
Ratio of profits after Federal taxes {annual rate) to stockholders* equity—percent*
1947
1948
1949
16.6
16.2
11.2
17.6
12.8
11.8
10.1
13.6
12.6
19.5
18.7
7.6
18.9
12.1
7.5
22.0
16.4
10.7
17.2
14.7
11.4
15.9
15.8
13.2
1950
1951
1952
1953
1954
1955
14.1
11.2
9.7
9.9
9.6
11.4
11.8
10.6
9.2
10.4
12.3
8.1
7.6
8.1
8.1
8.9
9.3
8.7
8.7
9.3
11.5
9.5
8.4
9.4
10.2
11.4
11.7
12.5
13.5
13.4
12.7
8.2
4.2
4.6
1.8
5.7
5.8
4.2
3.5
7.5
10.1
2.9
4.4
5.1
4.5
6.1
8.1
6.3
4.9
8.6
16.2
13.9
10.5
10.1
9.9
11.5
11.6
8.9
8.1
9.5
11.5
10.3
9.1
9.4
9.2
10.2
13.0
11.7
9.0
11.4
17.8
12.2
10.9
10.7
11.6
14.7
14.2
13.3
11.4
13.7
1960.
1961.
1962.
1963.
1964.
1965.
9.8
9.6
9.9
10.4
11.5
12.2
8.7
8.9
8.8
9.0
10.0
10.7
13.4
13.6
13.1
13.4
13.4
13.5
5.8
5.0
6.2
6.1
8.5
10.9
7.7
7.2
9.3
7.7
11.7
12.7
8.5
7.9
8.1
8.1
9.3
9.4
10.6
8.5
10.3
9.2
12.6
14.2
1965: I.
IL
III.
IV..
11.4
12.2
12.3
12.8
9.5
10.4
11.6
11.2
11.5
14.3
14.6
13.6
10.5
10.9
12.0
9.5
10.8
15.3
15.0
8.3
9.4
9.1
10.7
: I ...
II...
III..
12.1
13.1
12.8
10.0
11.2
12.3
12.1
14.8
15.3
9.4
10.9
10.4
11.0
13.8
14.6
10.2
11.3
10.0
—
1956...
1957
1958
1959
_.
_
-
12.4
12.3
8.7
14.0
10.4
6.2
15.2
13.3
13.4
12.7
13.4
13.9
12.5
10.0
9.8
16.9
14.8
11.1
11.3
10.6
13.2
12.2
11.1
9.1
11.0
10.9
2.1
5.8
6.0
5.9
8.5
7.2
7.0
5.7
8.5
12.2
11.8
12.4
12.9
14.4
15.3
10.1
10.3
10.1
11.3
11.4
11.8
9.1
9.3
9.6
9.2
10.6
11.7
6.3
4.4
6.9
6.9
10.5
11.6
13.8
12.4
15.6
14.7
14.5
16.4
15.0
15.1
11.6
11.8
11.5
12.5
10.2
11.7
11.1
13.7
10.9
10.5
11.2
13.8
15.0
15.6
16.4
15.2
16.6
14.7
12.2
12.2
12.1
11.0
13.3
11.9
13.2
12.7
12.6
4.4
4.7
3.8
4.3
3.3
2.2
5.8
4.5
3.6
3.8
4.0
4.4
4.4
4.2
3.5
4.0
3.7
.6
1.8
1.8
1.9
2.5
2.1
2.0
1.7
2.2
10.8
10.9
11.1
3.6
3.8
3.7
3.6
4.1
4.3
1.6
1.1
1.8
1.8
2.6
2.8
Profits after taxes per dollar of sales—cents
1947.
1948.
1949.
6.7
6.8
5.4
4.2
3.3
3.3
4.1
8.2
4.6
5.2
5.1
8.3
4.1
3.1
2.1
1950.
1951.
1952.
1953.
1954.
1955.
1956.
19571958.
1959.
6.5
4.5
4.1
4.3
4.4
5.1
5.3
4.9
4.4
4.9
3.4
2.0
1.9
2.0
2.1
2.3
2.4
2.2
2.2
2.4
4.9
3.8
3.2
3.7
4.2
4.8
5.0
5.2
5.4
5.4
5.8
3.4
1.9
2.2
1.0
2.6
2.6
1.9
1.6
3.0
1960.
1961.
1962.
1963.
1964.
1965.
4.8
4.7
4.7
4.9
5.4
5.5
2.3
2.3
2.3
2.4
2.7
2.7
5.5
5.7
5.7
5.9
5.9
5.9
1965: I....
II...
III.
IV..
5.4
5.5
5.6
5.6
2.5
2.7
3.0
2.8
1966: I....
II—
III.
5.5
5.7
5.6
2.6
2.8
2.9
10.7
6.1
8.5
6.5
5.2
4.5
2.8
.6
1.0
1.2
1.1
1.3
1.6
1.3
1.0
1.5
8.8
6.6
5.7
5.4
5.6
6.1
6.1
5.0
4.7
5.2
4.5
3.7
3.3
3.4
3.4
3.6
4.2
3.7
3.1
4.0
10.3
2.5
2.1
2.4
2.3
3.1
3.8
1.4
1.3
1.6
1.4
2.1
2.3
5.0
4.7
4.6
4.5
5.1
4.9
3.6
2.8
3.4
3.2
4.3
4.8
7.5
7.3
7.4
7.5
7.9
7.9
5.5
6.0
6.1
5.9
3.7
3.8
3.8
4.1
1.9
2.0
2.7
2.5
4.5
5.0
4.8
5.4
4.9
4.3
5.3
4.7
7.7
8.2
7.9
7.9
10.9
11.0
10.9
11.4
3.9
4.1
4.1
4.9
2.7
2.7
2.7
3.1
5.4
3.4
6.2
6.3
3.9
3.7
2.1
2.5
2.5
5.3
5.6
5.0
5.1
5.1
5.5
8.0
8.2
7.6
11.1
11.0
11.2
4.0
4.6
4.4
3.1
3.0
3.0
8.8
8.8
8.2
6.5
6.1
6.1
6.8
8.3
8.0
7.6
7.0
7.9
11.1
10.1
10.4
10.6
11.1
11.6
10.6
9.5
9.5
9.9
10.3
9.7
1
Includes certain industries not shown separately.
2 Annual ratios based on average equity for the year (using four end-of-quarter figures).
ratios based on equity at end of quarter only.
Quarterly
NOTE.—Ratios based on data in millions of dollars.
For explanatory notes concerning compilation of the series, see Quarterly Financial Report for Manufacturing Corporations, Federal Trade Commission and Securities and Exchange Commission. See also Note,
Table B-67.
Data for Alaska and Hawaii included for all periods.
Sources:
Federal Trade Commission and Securities and Exchange Commission.
TABLE B-69.—Sources and uses of funds, nonfarm nonfinancial corporate business, 1955-66
[Billions of dollars]
1966
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
53.6
47.2
42.0
42.2
55.5
47.3
54.7
63.3
65.9
70.5
88.0
94.0
29.2 28.9 30.6 29.5 35.0 34.4 35.6 41.8 43.9 50.8
Internal sources *
Undistributed profits i 13.9 13.2 11.8 8.3 12.6 10.0 10.2 12.4 13.6 18.5
Corporate inventory
valuation adjust.2 -.1
.3 -.5 -.4
ment
-1.7 -2.7 -1.5 -.3 -.5
Capital consumption
allowances 1
17.0 18.4 20.3 21.4 22.9 24.2 25.4 29.2 30.8 32.8
55.3
21.7
58.6
23.0
-1.5
-2.0
35.1
37.6
Source or use of funds
Sources, total
External sources
24.5 18.3 11.4 12.7 20.5 12.9
2.3
2.4
2.2
1.6
1.9
Stocks
2.1
3.6
6.3
3.0
3.5
Bonds
5.7
2.8
.4
.4
1.2
.7
1.2
.7
Mortgages
4.4
1.1 -.6
3.0
1.3
3.2
Bank loans, n.e.c
*
•
.7
.3
1.0
.2
Other loans
.5
4.9
3.1
4.3
Trade debt
5.7
8.7
2.4 -2.2
Profits tax liability... 4.1 -2.0 -2.1 -2.6
2.2
3.6
4.0
2.4
3.9
3.0
Other liabilities
Uses, total
Purchases of physical
assets
Nonresidential fixed
investment
Residential structures
Change in business
inventories
42.1
19.1
2.5
4.6
1.8
.1
.3
6.6
1.2
1.9
21.5
,6
4.6
2.9
2.5
.7
4.5
1.1
4.7
22.0
-.3
3.9
3.5
2.9
.5
6.0
1.5
4.0
19.7
1.4
4.0
3.3
3.6
1.3
3.4
.9
1.8
32.7
*
5.4
3.2
8.7
1.3
7.9
2.0
4.2
35.4
.8
10.1
2.2
6.2
2.2
7.8
-.3
6.4
55.0
61.6
65.8
67.1
87.3
92.0
54.3
45.3
27.3
36.9
39.2
37.0
44.7
46.7
52.2
61.9
73.8
28.4
1.4
31.1
1.7
34.9
1.3
33.2
2.2
37.0
3.0
38.6
3.7
44.1
3.7
51.3
3.9
59,9
3.0
4.1
3.0
1.5
4.7
4.3
4.4
6.8
11.0
51.4
43.1
31.5
35.9
34.7
25.8
.8
30.7
.4
33.4
.7
4.9
4.9
.6 -2.5
40.0
1965
Increase in financial assets 2
7.2
6.1 18.0 16.9 19.1 14.9 25.4
5.3 14.8 17.4
19.9
4.1
5.6 -3.9
5.2 -4.2 -.1
Liquid assets
4.3
2.5
3.5
.6
.7
Demand deposits
*
.1
and currency.-.
-1.0
1.5
-.5
1.7 -.9 -.8 -2.5 -1.9
1.0
*
3.2
1.3
1.9
-.1
3.9
.9 -.4
3.9
Time deposits
3.7
*
U.S. Government
* 6.6 -5.4 -.2
.5 -1.4 -2.1
.5
securities
__. 4.2 -4.5 -.4
Finance company
.4
.1
.1
.1
.1
.9
.3
paper
.7
.7
.7 1.5
.4
.5
.1
.7
.9
.2
.2
.7 1.0 1.2
.8
C onsumer credit
7.5
7.9
11.4
8.2
2.6
9.1 13.7
6.3 10.0
8.5
7.2
Trade credit
Other financial assets. 2.3 3.4 2.5 3.5 3.3 3.7 4.6 4.1 4.8 4.0 9.3
Discrepancy
sources)
(uses less
-2.2 -4.1 -2.0
-.1 -1.1 -2.0
1
.3 -1.6
-.1 -3.3
18.2
-2.5
-2.0
-.7
-1.9
2.1
1.2
13.2
6.3
-.7 - 2 . 0
The figures shown here for "internal sources," "undistributed profits," and "capital consumption
allowances" differ from those shown for "cashflow,net of dividends," "undistributed profits" and "capital consumption allowances" in the gross corporate product table in the national income and product
accounts of the Department of Commerce for the following reasons: (1) these figures include, and the
statistics in the gross corporate product table exclude, branch profits remitted from foreigners net of corresponding U.S. remittances to foreigners; and (2) thesefiguresexclude, and the gross corporate product
figures
include, the internal funds of corporations whose major activity is farming.
2
Includes some categories not shown separately.
NOTE.—Includes data for Alaska and Hawaii.
Source: Board of Governors of the Federal Reserve System.
294
TABLE B-70.—Current assets and liabilities of United States corporations, 1939-66
[Billions of dollars]
Current assets
End of year
or quarter
Cash
on
hand
Total and
in
banks
U.S.
Government
securities
Receivables
from
U.S.
Government 1
Current liabilities
Advances Other
Other
Other
and
Fednotes
pre- notes
eral
In- curand
and income
payac- ven- rent
acTotal ments,
astax
counts tories sets 2
U.S. counts
receivpay- liabiliGovties
able
ern- able
ment1
1939
54.5
10.8
2.2
22.1
18.0
1.4
30.0
1940
1941
1942
1643
1944
60.3
72.9
83.6
93.8
97.2
13.1
13.9
17.6
21.6
21.6
2.0
4.0
10.1
16.4
20.9
0.1
.6
4.0
5.0
4.7
23.9
27.4
23.3
21.9
21.8
19.8
25.6
27.3
27.6
26.8
1.5
1.4
1.3
1.3
1.4
32.8
40.7
47.3
51.6
51.7
1945
1946
97.4
108.1
21.7
22.8
21.1
15.3
2.7
.7
23.2
30.0
26.3
37.6
2.4
1.7
45.8
51.9
1947
1948
1949
123.6
133.0
133.1
25.0
25.3
26.5
14.1
14.8
16.8
44.6
48.9
45.3
1.6
1.6
1.4
61.5
64.4
60.7
1950
1951
1952
1953
1954
161.5
179.1
.2
. 190.6
194.6
28.1
30.0
30.8
31.1
33.4
19.7
20.7
19.9
21.5
19.2
1.1
2.7
2.8
2.6
2.4
55.7
58.8
64.6
65.9
71.2
55.1
64.9
65.8
67.2
65.3
1.7
2.1
2.4
2.4
3.1
79.8
92.6
96.1
98.9
99.7
.4
1.3
2.3
2.2
2.4
1955
1956
1957
1958
1959
224.0
237.9
244.7
255.3
277.3
34.6
34.8
34.9
37.4
36.3
23.5
19.1
18.6
18.8
22.8
2.3
2.6
2.8
2.8
2.9
95.1
99.4
106.9
117.7
72.8
80.4
82.2
81.9
88.4
4.2
5.9
6.7
7.5
9.1
121.0
130.5
133.1
136.6
153.1
1960
1961
289.0
306.8
37.2
41.1
20.1
20.0
3.1
3.4
126.1
135.8
91.8
95.2
New series 3
1961
1962
1963
1964
1965
304.6
326.5
351.7
372.6
407.9
40.7
43.7
46.5
47.1
49.2
19.2
19.6
20.2
18.8
16.7
3.4
3.7
3.6
3.4
3.9
133.3
144.2
156.8
170.6
189.6
352. 2
358. 6
366.2
372.6
42.7
44.5
45.1
47.1
20.8
19.8
18.8
18.8
3.3
3.0
3.2
3.4
378.4
386.3
395.4
407.9
44.4
45.8
45.6
49.2
18.3
16.1
15.8
16.7
413.7
423.6
431.4
46.9
47.7
46.9
16.9
15.3
14.6
1964: I
II
III
IV.
1965: I
II
Ill
IV
1966: I . . . .
II...
Ill
Net
Other workcur- ing
rent capilia- tal
bilities
21.9
1.2
22.6
25.6
24.0
24.1
25.0
2.5
7.1
12.6
16.6
15.5
7.1
7.2
8.7
8.7
9.4
27.5
32.3
36.3
42.1
45.6
24.8
31.5
10.4
8.5
9.7
11.8
51.6
56.2
10.7
11.5
9.3
13.2
13.5
14.0
62.1
68.6
72.4
47.9
53.6
57.0
57.3
59.3
16.7
21.3
18.1
18.7
15.5
14.9
16.5
18.7
20.7
22.5
81.6
86.5
90.1
91.8
94.9
2.3
2.4
2.3
1.7
1.7
73.8
81.5
84.3
88.7
99.3
19.3
17.6
15.4
12.9
15.0
25.7
29.0
31.1
33.3
37.0
103.0
107.4
111.6
118.7
124.2
10.6 160.4
11.4 171.2
1.8
1.8
105.0
112.8
13.5
14.1
40.1
42.5
128.6
135.6
95.2
100.7
107.0
114.0
126.3
12.9
14.7
17.8
18.8
22.1
155.8
170.9
188.2
200.3
224.5
1.8
2.0
2.5
2.7
3.1
110.0
119.1
130.4
139.6
157.2
14.2
15.2
16.5
17.2
19.2
29.8
34.5
38.7
40.7
45.0
148.8
155.6
163.5
172.3
183.4
158.5
162.9
168.8
170.6
108.3
109.3
110.9
114.0
18.7
19.1
19.5
18.8
186.3
190.1
195.1
200.3
2.6
2.6
2.7
2.7
128.4
131.3
134.5
139.6
15.9
15.5
16.3
17.2
39.4
40.8
41.7
40.7
165.9
168.4
171.1
172.3
3.3
3.2
3.6
3.9
174.6
179.9
185.2
189.6
117.1
119.4
123.1
126.3
20.6
21.9
22.1
22.1
203.2
208.6
214.6
224.5
2.8
2.9
3.1
3.1
141.1
145.8
150.0
157.2
16.8
16.2
17.2
19.2
42.5
43.8
44.3
45.0
175.1
177.7
180.7
183.4
3.9
4.0
4.2
192.5 130.2
198.4 134.4
202.8 139.4
23.4 227.7
23.7 233.1
23.5 239.9
3.8
3.9
4.4
157.5
163.4
167.1
19.1
16.7
17.9
47.3
49.1
50.4
186.0
190.4
191.5
38.3
42.4
43.0
0.6
.8
2.0
2.2
1.8
37.6
39.3
37.5
24.5
1
Receivables from and payables to U.S. Government do not include amounts offset against each other
on corporations' books or amounts arising from subcontracting which are not directly due from or to the
U.S. Government. Wherever possible, adjustments have been made to include U.S. Government advances
offset against inventories on corporations' books.
2
Includes marketable securities other than U.S. Government.
3 Generally reflects definitions and classifications used in Statistics of Income for 1961.
NOTE.—Data relate to all United States corporations, excluding banks, savings and loan associations,
insurance companies, and beginning with the new series for 1961, investment companies. Year-end data
through 1963 are based on Statistics of Income (Treasury Department), covering virtually all corporations
in the United States. Statistics of Income data may not be strictly comparable from year to year because
of changes in the tax laws, basis for filing returns, and processing of data for compilation purposes. All
other figures shown are estimates based on data compiled from many different sources, including data on
corporations registered with the Securities and Exchange Commission.
Source: Securities and Exchange Commission.
295
T A B L E B-71.—State and municipal and corporate securities offered, 1934-66
l
[Millions of dollars]
Year or quarter
Corporate securities offered for cash 2
State
and
Gross proceeds s
Proposed uses of net proceeds *
municipal securities
New money
offered
for cash
Retire- Other
Com- Pre- Bonds
(prinpurTotal mon ferred and
Total
Plant Work- ment
cipal
of se- poses
stock stock notes
ing
and
amounts)
Total equipcapi- curities
ment
tal
1934
939
397
19
372
384
57
32
1935
1936
1937
1938
1939
1,232
1,121
908
1,108
1,128
4,572
2,310
2,155
2,164
22
272
285
25
87
271
406
2,224
4,028
1,618
2,044
1,980
2,266
4,431
2,239
2,110
2,115
208
858
991
681
325
111
380
574
504
170
478
417
177
155
1940
1941
1942
1943
1944
1,238
956
524
435
661
2,677
2,667
1,062
1,170
3,202
108
110
34
56
183
167
112
124
2,386
2,390
917
990
2,670
2,615
2,623
1,043
1,147
3,142
474
308
657
424
661
287
141
252
145
207
187
167
405
1945
1946
1947
1948
1949
795
1,157
2,324
2,690
2,907
6,011
6,900
6,577
7,078
6,052
397
758
891 1,127
779
762
614
492
736
425
4,855
4,882
5,036
5,973
4,890
5,902
6,757
6,466
6,959
5,959
1,080
3,279
4,591
5,929
4,606
638
2,115
3,409
4,221
3,724
442
164
182
708
4,555
2.868
1,352
307
401
267
610
524
722
952
1950
1951
1952
1953
1954
3,532
3,189
4,401
5,558
811
6,361
7,741 1,212
9,534
8,898
9,516 1,213
631
838
564
489
816
4,920
5,691
7,601
7,083
7,488
6,261
7,607
9,380
8,755
9,365
4,006
6,531
8,180
7,960
6,780
2,966
5,110
6,312
5,647
5,110
,041
,421
_,868
2,313
1,670
1,271
486
664
260
1,875
984
589
537
535
709
1955
1956
1957
1958
1959
5,977
5,446
6,958
7,449
7,681
10,240
10,939
12,884
11,558
9,748
2,185
2,301
2,516
1,334
2,027
635
636
411
571
531
7,420
8,002
9,957
9,653
7,190
10,049 7,957
10,749
12,661 11,784
11,372 9,907
9,527 8,578
5,333
6,709
9,040
7,792
6,084
2,624
2,954
2,744
2,115
2,494
1,227
364
214
549
135
864
721
663
915
814
1960
1961
1962
1963
1964
7,230
8,360
8,558
10,107
10,544
10,154
13,165
10,705
12,237
13,957
1,664
3,294
1,314
1,022
2,679
409
450
422
342
412
8,081 9,924 8,758
9,420 12,885 10,715
10,501 8,240
10,872 12,081 8,993
10,865 13,792 11,233
5,662
7,413
5,652
5,405
7,003
3,097
2,588
3,588
4,230
271
868
754
1,528
754
302
507
561
805
1965
1966 '
1964: I . . . .
II...
III..
IV..
11,148 15,992 1,547
11,073 18,418 1,940
725
570
13,720 15,801 13,063
15,908 18,169 16,193
7,712
12,715
5,352
3,477
241
741
737
1965: I....
II...
III.
IV..
1966: I....
IIIII.
IV*
26
231
95
1,865
193
204
148
222
95
,100
.206
,854
,583
192
172
173
100
2,389
2,661
2,764
2,642
2,478
262
2,548
4,965 1,735
2,876
357
3,568
324
154
137
2,248
3,076
2,382
3,160
2,518
4,911
2,837
3,526
2,086
4,441
2,077
2,629
1,149
3,230
1,219
1,405
937
1,211
858
1,224
103
173
216
262
330
297
544
635
2,746
2,991
2,758
2,653
3,007
5,043
3,912
4,030
297
665
231
353
132
255
151
187
2,578
4,123
3,529
3,490
2,972
4,977
3,869
2,427
4,164
3,177
3,296
1,520
2,324
2,104
1,763
907
1,840
1,073
1,533
234
188
336
237
311
625
356
449
2,870
3,177
2,434
2,593
5,094
5,115
4,197
4,012
519
975
171
275
215
115
143
96
4,359
4,025
5,036
5,046
4,143
3,944
4,320
4,644
3,663
3,258
3,668
2,907
2,882
1,062
976
756
51
72
52
665
331
428
313
3,641
1 These data cover substantially all new issues of State, municipal, and corporate securities offered for
cash sale in the United States in amounts over $100,000 and with terms to maturity of more than 1 year.
* Excludes notes issued exclusively to commercial banks, intercorporate transactions, sales of investment
company issues, and issues to be sold over an extended period, such as offerings under employee-purchase
plans.
> Number of units multiplied by offering price.
* Net proceeds represents the amount received by the issuer after payment of compensation to distributors and other costs of flotation.
NOTE.—Data for Alaska and Hawaii included for all periods.
Sources: Securities and Exchange Commission, The Commercial and Financial Chronicle, and The Bond
Buyer.
296
TABLE B-72.—Common stock prices, earnings, and yields, and stock market credit, 1939-66
Standard & Poor's common stock data
Stock market credit
Customer credit (excluding
U.S. Government
Bank
Divi- Price/
securities)
loans to
dend
Year or month
earnbrokers
Public Rail- yield * ings
Bank
Net
Total Indusand 6
(perutilities roads
loans dealers
(500 trials
(25
cent) ratio 3 Total debit
(425
(50
to
stocks) stocks)
stocks) stocks)
4 'others" «
ances
Price index *
Millions of dollars
1941-43=10
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1965: J a n . . .
Feb..
Mar..
Apr...
May_.
JuneJuly..
Aug..
Sept..
Oct...
Nov...
Dec...
1966: Jan...
Feb...
Mar...
Apr...
May...
June..
July..
Aug..
Sept..
Oct...
Nov..
Dec.
87.97
89.28
85.04
84.91
86.49
89.38
91.39
92.15
91.73
93.32
92.69
88.88
91.60
86.78
86.06
11.77
10.69
9.72
8.78
11.49
12.34
14.72
16.48
14.85
15.34
15.00
18.33
22.68
24.78
24.84
30.25
42.40
49.80
47.63
49.36
61.45
59.43
69.99
65.54
73.39
86.19
93.48
91.09
91.04
91.64
91.75
93.08
94.69
90.19
89.92
91.68
94.93
97.20
98.02
97.66
99.56
99.11
95.04
98.17
92.85
92.14
16.34
15.05
10.93
7.74
11.34
12.81
16.84
20.76
18.01
16.77
17.87
19.96
20.59
22.86
24.03
27.57
31.37
32.25
32.19
37.22
44.15
46.86
60.20
59.16
64.99
69.91
76.08
68.21
75.87
77.04
76.92
77.24
77.50
74.19
74.63
74.71
76.10
76.69
76.72
75.39
74.50
71.87
69.21
70.06
68.49
67.51
9.82
9.41
9.39
8.81
11.81
13.47
18.21
19.09
14.02
15.27
12.83
15.53
19.91
22.49
22.60
23.96
32.94
33.65
28.11
27.05
35.09
30.31
32.83
30.56
37.58
45.46
46.78
46.34
46.79
46.76
46.98
46.63
45.53
42.52
43.31
46.13
46.96
48.46
50.23
51.03
53.68
54.78
51.52
52.33
47.00
46.35
4.05
5.59
6.82
7.24
4.93
4.86
4.17
3.85
4.93
5.54
6.59
6.57
6.13
5.80
5.80
4.95
4.08
4.09
4.35
3.97
3.23
3.47
2.98
3.37
3.17
3.01
3.00
3.40
2.99
2.99
2.99
2.95
2.92
3.07
3.09
3.06
2.98
2.91
2.96
3.05
3.02
3.06
3.23
3.15
3.30
3.36
85.84
80.65
77.81
77.13
80.99
81.33
91.95
86.40
83.11
82.01
86.10
86.50
67.30
63.41
63.11
65.41
68.82
68.86
45.50
42.12
40.31
39.44
41.57
41.44
3.37
3.60
3.75
3.76
3.66
3.59
12.06
11.02
9.82
8.67
11.50
12.47
15.16
17.08
15.17
15.53
15.23
18.40
22.34
24.50
24.73
29.69
40.49
46.62
44.38
46.24
57.38
55.85
66.27
62.38
69.87
81.37
88.17
85.26
86.12
86.75
13.80
10.24
8.26
8.80
12.84
13.66
16.33
17.69
9.36
6.90
6.64
6.63
9.27
10.47
9.69
11.25
11.50
14.05
12.89
16.64
17.05
17.09
21.06
16.68
17.62
18.08
17.08
17.69
15.93
17.10
17.61
16.31
14.71
13.92
1,374
976
1,032
968
1,249
1,798
1,826
1,980
2,445
3,436
4,030
3,984
3,576
4,537
4,461
4,415
5,602
5,494
7,242
7,053
7,705
7,443
6,940
6,872
6,941
7,001
7,085
7,084
6,833
6,874
7,036
7,117
7,304
7,705
942
473
517
499
821
1,237
1,253
1,332
1,665
2,388
2,791
2,823
2,482
3,285
3,280
3,222
4,259
4,125
5,515
5,079
5,521
5,329
4,986
5,007
5,055
5,066
5,129
5,114
7,726
7,950
7,823
7,991
7,905
8,001
4,886
4,994
5,073
5,209
5,521
5,551
5,753
5,645
5,835
5,768
5,770
7,870
7,811
7,525
7,302
7,352
7,443
5,667
5,609
5,355
5,169
5,217
5,329
715
584
535
850
1,328
2,137
353
2,782
432
1,471
503
784
515
1,331
469
1,608
428
1,742
561
1,419
573
2,002
648
2,248
780
2,688
1,048
2,852
1,239
2,214
,161
2,190
,094
2,569
,252
2,584
,181
2,614
,193
3,398
,343
4,352
,369
4,754
,727
4,631
1,974
4,135
2,184
4,501
V14
4,011
[,954
3,851
,865
4,434
,886
4,571
,935
4,495
,956
5,325
,970
3,673
,970
3,710
3,323
2,042
3,480
2,044
3,734
2,095
4,135
2,184
3,985
2,175
3,507
2,197
3,752
2,178
4,418
2,156
4,260
2,137
4,654
2,231
New series7
3,687
2,203
4,179
2,202
3,545
2,170
3,268
2,133
3,107
2,135
4,501
2,114
1
Annual data are averages of monthlyfiguresand monthly data are averages of daily figures.
2 Aggregate cash dividends (based on latest known annual rate) divided by the aggregate monthly market
value of the stocks in the group. Annual yields are averages of monthly data.
* Ratio of quarterly earnings (seasonally adjusted annual rate) to price index for last day in quarter.
Annual
ratios are averages of quarterly data.
4
As reported by memberfirmsof the New York Stock Exchange carrying margin accounts. Includes
net debit balances of all customers (other than general partners in the reportingfirmand memberfirmsof
national exchanges) whose combined accounts net to a debit. Balances secured by U.S. Government
obligations are excluded. Data are for end of period.
" Loans by weekly reporting member banks (weekly reporting large commercial banks beginning July
1966) to others than brokers and dealers for purchasing or carrying securities except U.S. Government obligations. (For 1953 through June 1959 some loans for purchasing or carrying U.S. Government securities
may
be included.) Data are for last Wednesday of period.
6
Loans by weekly reporting member banks (weekly reporting large commercial banks beginning July
1966) for purchasing or carrying securities, including U.S. Government obligations. Data are for last
Wednesday of period.
7 See Federal Reserve Bulletin, August 1966.
Sources: Board of Governors of the Federal Reserve System, Standard & Poor's Corporation, and New
York Stock Exchange.
297
TABLE B-73.—Business formation and business failures, 1929-66
Business failures 3 4
Index of
net business
formation
(1957-59=
100) i
Year or month
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963 *
1964
1965
1966
1965* J a n
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1966* Jan
Feb
Mar
Apr
May
June
Julv
Aug
Sept
Oct
Nov
Dec
-
- -
New
business
incorporations
(number) a
132,916
112,638
96,101
123.1
85,491
96.7
92,925
102.3
83,649
102 8
92,819
108.0
102,545
103.5
117,164
99 8
139,651
107.6
140,775
103.2
136,697
98.3
97.1 7150,280
193,067
104.6
182,713
99.8
181,535
95.4
98.0
182,057
186,404
100.6
197,724
104.5
203,897
106 0
105.8
106.6
17,275
17, S67
106 6
17,112
106.1
16,604
104 7
16 043
105 4
16,671
106.2
16,369
106 5
16,967
105.7
17,138
lO6 1
105.5
16,744
17,418
106 1
16,999
106.9
17,677
109.1
17,868
109 6
17,305
109 6
17,022
107 6
16,60S
106 8
106.2
16,641
16,688
IO4.8
10S.9
16,224
102.7
15,664
103. S
16,305
100 6
16,096
Amount of current
liabilities (millions of
dollars)
Liability size
Liability size
class
class
Total
Total
$100,000
Under
Under $100,000
and
and
$100,000 over
$100,000 over
Number of failures
Business
failure
rates
103.9
121.6
133.4
154.1
• 100.3
61.1
61.7
47.8
45.9
61.1
0 69.6
63.0
54.5
44.6
16.4
6.5
4.2
5.2
14.3
20.4
34.4
34.3
30.7
28.7
33.2
42.0
41.6
48.0
51.7
55.9
51.8
57.0
64.4
60.8
56.3
53.2
53.3
51.6
52.8
61.7
54.8
50.8
54.1
50.1
52.8
66.9
69.7
51.5
61.4
54.2
50.7
44.1
50.2
47.4
45.8
49.4
62.3
60.8
56.6
67.2
65.6
52.4
22,909
26,355
28,285
31,822
«19,859
12,091
12,244
9,607
9,490
12,836
•14,768
13,619
11,848
9,405
3,221
1,222
809
1,129
3,474
5,250
9,246
9,162
8,058
7,611
8,862
11,086
10,969
12,686
13,739
14,964
14,053
15,445
17,075
15,782
14,374
13,501
13,514
13,061
1,137
1 114
1,332
1,179
1 183
1,094
1 074
1,131
1,100
1,047
1,033
1,090
1,084
946
1 226
1 106
997
1,077
1 017
1,249
1,040
1,150
1,112
1,055
1
2
22,165
25,408
27,230
30,197
•18,880
11,421
11,691
9,285
9,203
12 553
• 14,541
13,400
11,685
9,282
3,155
1,176
759
1,002
3,103
4,853
8,708
8,746
7,626
7,081
8,075
10,226
10,113
11,615
12,547
13,499
12,707
13,650
15,006
13,772
12,192
11,346
11,340
10,833
950
930
1,097
1,030
1 001
881
906
965
893
912
893
882
916
800
1 037
924
847
885
879
999
867
957
919
803
744
947
1,055
1,625
• 979
670
553
322
287
283
• 227
219
163
123
66
46
50
127
371
397
538
416
432
530
787
860
856
1,071
1,192
1,465
1,346
1,795
2,069
2,010
2,182
2,155
2,174
2,228
187
184
235
149
182
213
168
166
207
135
140
208
168
146
189
182
150
192
138
250
175
193
193
252
261.5
483.3
303.5
668.3
354.2
736 3
432.6
928 3
«457.5 • 215.5
334 0 138.5
310 6 135.5
203 2 102.8
183 3 101.9
140.1
246 5
• 182.5 «132.9
166 7 119.9
100.7
136 1
80.3
100 8
30.2
45 3
14.5
31.7
11.4
30.2
15.7
67.3
63.7
204.6
93.9
234 6
161.4
308.1
151.2
248.3
131.6
259.5
131.9
283.3
167.5
394.2
211.4
462 6
206.4
449.4
239.8
562.7
267.1
615.3
297.6
728.3
278.9
692.8
327.2
938.6
370.1
1,090.1
346.5
1,213.6
1,352.6
321.0
313.6
1,329.2
1 321.7 321.7
321.5
1,385.7
26.7
89.3
25.6
112.0
31.1
146.6
28.9
83.2
28.2
133.1
25.0
144.6
25.8
121.5
28.0
135.0
25.5
105.0
24.9
82.1
25.5
71.7
26.3
97.6
27.1
103.2
24.2
95.5
103.5
28.6
26.1
110.1
23.9
96.4
26.5
123.6
69.9
26.2
30.7
178.1
25.4
129.2
29.6
108.0
29.0
106.7
161.5
24.2
221.8
364.8
382.2
495.7
• 242.0
195.4
175.1
100.4
81.4
106.4
8
49.7
46.8
35.4
20.5
15.1
17.1
18.8
51.6
140.9
140.7
146.7
97.1
128.0
151.4
226.6
251.2
243.0
322.9
348.2
430.7
413.6
611.4
720.0
867.1
1,031.6
1,015.6
1,000.0
1, 064.1
62.5
86.3
115.4
54.3
104.9
119.6
95.7
107.0
79.4
57.2
46.2
71.3
76.0
71.3
74.8
84.1
72.5
97.1
43.6
147.4
103.8
78.4
77.8
137.2
Monthly data are seasonally adjusted.
Total for period. Monthly data are seasonally adjusted.
3 Total for period.
« Commercial and industrial failures only. Excludes failures of banks and railroads and, beginning 1933,
of real estate, insurance, holding, and financial companies, steamship lines, travel agencies, etc.
* Failure rate per 10,000 listed enterprises. Monthly data are seasonally adjusted.
« Series revised; not strictly comparable with earlier data.
7 Includes data for Hawaii beginning 1959 and Alaska beginning 1960. (Figure for 1958 comparable with
1959 is 150,781; figure for 1960 comparable with 1959 is 182,374.)
8 Includes data for District of Columbia beginning 1963.
Sources: Department of Commerce (Bureau of the Census) and Dun & Bradstreet, Inc.
298
AGRICULTURE
TABLE B-74.—Income from agriculture, 1929-66
Income received from farming
Personal income
received by total
farm population
Year or
quarter
Net to farm
operators
Realized gross
ProducCash tion exFrom From From
receipts penses
nonall
farm
from
farm Total 2 marketsources sources sources
i
ings
Excluding net
inventory
change
Including net
inventory
change3
Billions of dollars
Net income per
farm, including
net inventory
change
Current
prices
1966
prices *
Dollars
1929
13.9
11.3
7.7
6.3
6.2
945
J Q9Q
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
9.1
6.4
4.7
5.3
6.4
7.1
8.4
8.9
7.7
7.9
6.9
5.5
4.5
4.4
4.7
5.1
5.6
6.2
5.9
6.3
4.5
2.9
1.9
2.7
3.9
4.6
5.1
5.2
4.2
4.3
4.3
3.3
2.0
2.6
2.9
5.3
4.3
6.0
4.4
4.4
651
506
304
379
431
775
639
905
668
685
1,415
1,297
894
L, 115
1,105
1,987
2,207
1,713
1,803
3.2
5.4
4.6
6.2
4.7
4.8
2.2
2.3
2.6
2.7
2.5
2.6
7.6
10.1
14.1
16.5
16.6
17.2
20.0
21.1
23.8
19.5
4.8
6.8
10.1
12.1
12.2
12.8
15.5
15.8
18.0
13.3
2.8
3.3
3.9
4.4
4.4
4.4
4.6
5.3
5.8
6.2
11.1
13.9
18.8
23.4
24.4
25.8
29.5
34.1
34.7
31.6
8.4
11.1
15.6
19.6
20.5
21.7
24.8
29.6
30.2
27.8
6.9
7.8
10.0
11.6
12.3
13.1
14.5
17.0
18.8
18.0
4.2
6.1
8.8
11.8
12.1
12.8
15.0
17.1
15.9
13.6
4.5
6.5
9.9
11.7
11.7
12.3
15.1
15.4
17.7
12.8
706
1,031
1,588
1,927
1,950
2,063
2,543
2,615
3,044
2,233
1,858
2,515
3,379
3,636
3,482
3,557
3,973
3,487
3,805
2,900
20.4
22.7
22.1
19.8
18.4
17.6
17.8
17.7
19.5
18.1
14.1
16.2
15.4
13.4
12.5
11.4
11.2
11.0
12.8
11.0
6.3
6.5
6.7
6.4
5.9
6.2
6.6
6.6
6.7
7.0
32.3
37.1
36.8
35.0
33.6
33.1
34.3
34.0
37.9
37.5
28.5
32.9
32.5
31.0
29.8
29.5
30.4
29.7
33.5
33.5
19.4
22.3
22.6
21.3
21.6
21.9
22.4
23.3
25.2
26.1
12.9
14.8
14.1
13.7
12.0
11.2
11.9
10.7
12.7
11.4
13.7
16.0
15.1
13.1
12.5
11.5
11.4
11.3
13.5
11.5
2,421
2,946
2,896
2,626
2,606
2,463
2,535
2,590
3,189
2,795
3,104
3,466
3,367
3,089
3,030
2,864
2,914
2,878
3,504
3,071
18.7
19.0
19.2
18.7
17.9
20.6
21.3
11.4
12.1
12.2
12.0
11.1
13.7
14.5
7.2
6.9
7.0
6.7
6.7
6.8
6.8
37.9
39.6
41.1
42.1
42.3
44.9
49.5
34.0
34.9
36.2
37.2
36.9
39.2
42.9
26.2
27.0
28.5
29.6
29.4
30.7
33.2
11.7
12.6
12.5
12.5
12.9
14.2
16.3
12.0
12.9
13.1
13.1
12.1
15.2
16.1
3,043
3,389
3,562
3,671
3,479
4,493
4,955
3,308
3,684
3,789
3,864
3,662
4,632
4,955
_
---
1940
1941
1942.
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
5.4
7.7
7.2
9.0
7.2
7.4
11.5
8.4
6.4
7.1
8.6
9.7
10.8
11.4
10.1
10.6
.
.
.
1960
1961
1962
1963
1964
1965
1966 P
_ -
.fi38
Seasonally adjusted annual rates
1965: I
II
III
IV
42.9
45.4
45.5
45.9
37.3
39.7
39.7
40.0
30.0
30.8
30.9
31.2
12.9
14.6
14.6
14.7
12.9
15.5
16.1
16.1
3,820
4,590
4,770
4,770
3,980
4,730
4,920
4,920
1966: I
II
III.
IV P
48.4
48.7
49.8
51.1
42.2
42.2
43.0
44.1
31.9
32.5
33.8
34.6
16.5
16.2
16.0
16.5
17.1
16.4
15.5
15.3
5,260
5,040
4,770
4,710
5,310
5,040
4,720
4,660
1 Includes all income received by farm residents from nonfarm sources such as wages and salaries from
nonfarm employment, nonfarm business and professional income, rents from nonfarm real estate, dividends,
interest, royalties, unemployment compensation, and social security payments.
2 Cash receipts from marketings, Government payments, and nonmoney income furnished by farms.
* Includes net change in inventory of crops and livestock valued at the average price for the year.
* Income in current prices divided by the index of prices paid by farmers for family living items on a
1966 base.
Source: Department of Agriculture.
299
TABLE B-75.—Farm production indexes, 1929-66
[1957-59*100]
Livestock and products
Crops
Year
Farm
outa v Food Vege- Fruits Cot- ToMeat Dairy Poultry
Oil
put i Total 2 Feed Hand
and
ani- prod- and
ton bacco crops TotaP mals
grains forage grains tables nuts
ucts eggs
1929...
62
73
62
79
68
73
75
120
88
13
63
62
75
44
1930...
1931...
1932...
1933...
1934...
61
66
64
59
51
69
77
73
65
54
56
63
73
56
33
66
72
74
69
64
74
79
63
47
45
74
75
76
73
80
73
92
75
76
71
113
138
105
105
78
95
89
58
80
63
14
14
13
11
13
64
65
66
67
61
63
66
67
70
59
76
78
79
79
78
45
44
44
44
41
1935...
1936...
1937...
1938...
1939...
61
55
69
67
68
70
59
81
76
75
60
38
67
65
65
82
66
75
81
75
55
54
74
77
63
81
75
82
81
81
90
70
93
84
96
86
101
154
97
96
76
68
91
80
110
21
16
18
22
29
59
63
62
65
70
53
60
58
63
71
78
79
79
81
82
41
44
44
45
48
1940...
1941..1942..1943...
1944...
70
73
82
80
83
78
79
89
83
88
66
71
81
74
78
86
86
93
91
90
69
79
83
72
88
83
84
89
97
92
93
99
98
84
98
102
88
105
93
100
84
73
81
81
113
34
37
56
60
50
71
75
84
91
86
72
76
87
97
88
84
89
92
91
92
49
54
62
71
71
1945...
1946...
1947...
1948.-1949...
81
84
81
88
87
85
89
85
97
92
75
82
63
91
80
93
87
84
84
83
92
95
111
107
92
94
105
91
97
94
89
106
101
92
98
74
71
97
122
131
114
134
122
115
114
54
52
55
67
61
86
83
82
80
85
84
82
81
79
83
95
94
93
90
93
74
69
68
67
74
1950.1951...
1952.1953.1954.-
86
89
92
93
93
89
91
95
94
93
81
75
79
77
81
89
92
90
92
92
86
85
109
100
88
96
89
90
95
93
98
100
97
98
99
82
124
124
134
111
117
135
130
119
130
71
65
63
63
71
88
92
92
93
96
89
95
95
94
98
93
92
92
97
98
78
81
82
84
87
1955.1956...
1957...
1958...
1959.-
96
97
95
102
103
96
95
93
104
103
86
85
93
101
106
98
94
101
102
97
83
87
82
121
97
96
102
98
102
100
99
103
94
102
104
120
108
89
93
118
127
126
96
100
104
78
92
91
111
98
99
99
97
99
104
103
100
96
98
106
99
101
101
100
99
86
94
95
101
104
1960.1961.1962.1963_1964.-
106
107
108
112
112
108
107
107
112
109
109
99
100
110
97
103
102
105
105
105
115
106
98
102
114
103
110
108
108
103
98
109
98
102
111
116
116
121
125
124
112
119
134
135
129
105
122
123
128
128
102
106
107
111
113
103
106
108
114
116
101
103
104
103
105
104
112
111
115
118
1965..1966 »..
115
113
116
112
111
111
112
110
116
118
109
110
118
122
121
78
107
107
154
165
111
111
110
111
104
101
122
128
* Farm output measures the annual volume of farm production available for eventual human use through
sales from farms or consumption in farm households. Total excludes production of feed for horses and
mules.
* Includes production of feedforhorses and mules and certain items not shown separately.
8
Includes certain items not shown separately.
Source: Department of Agriculture.
300
TABLE B-76.—Farm population, employment, and productivity, 1929-66
Farm population
(April 1) i
Year
Farm employment
(thousands) 3
Farm output
Num- As perPer
ber
cent of
Family Hired unit
(thou- total
of
Total workers
workers total
sands) population 2
input
LiveCrop stock
proproduc- duction
tion
per
Per man-hour
breedper
ing
acre 4
unit
LiveTotal Crops stock
Index, 1957-59=100
1929.
30,580
25.2
12,763
9,360
3,403
63
28
28
48
69
1931.
1932.
1933.
1934.
30,529
30,845
31,388
32,393
32,305
24.9
24.9
25.2
25.8
25.5
12,497
12,745
12,816
12,739
12,627
9,307
9,642
9,922
9,874
9,765
3,190
3,103
2,894
2,865
2,862
63
69
69
65
59
28
30
30
28
27
27
30
30
27
27
47
47
47
46
43
64
72
68
61
51
68
62
1935.
1936.
1937.
1938.
32,161
31,737
31,266
30,980
30,840
25.3
24.8
24.2
23.8
23.5
12,733
12,331
11,978
11,622
11,338
9,855
9,350
9,054
8,815
8,611
2,878
2,981
2,924
2,807
2,727
69
62
73
74
72
31
29
33
35
35
31
28
33
35
34
44
46
46
48
50
66
56
76
73
74
70
71
75
75
1940.
1941.
1942.
1943.
1944.
30,547
30,118
28,914
26,186
24,815
23.1
22.6
21.4
19.2
17.9
10,979
10,669
10,504
10,446
10,219
8,300
8,017
7,949
8,010
7,988
2,679
2,652
2,555
2,436
2,231
72
75
82
79
82
36
39
42
42
44
37
39
43
41
44
50
51
56
58
56
86
78
83
1945.
1946.
1947.
1948.
1949.
24,420
25,403
25,829
24,383
24,194
17.5
18.0
17.9
16.6
16.2
10,000
10,295
10,382
2,119
2,189
2,267
2,337
2,252
82
85
82
88
86
46
49
50
56
57
46
50
50
57
57
58
59
61
62
66
82
86
82
92
85
79
78
79
82
9,964
7,881
8,106
8,115
8,026
7.712
1950.
1951.
1952.
1953.
1954.
23,048
21,890
21,748
19,874
19,019
15.2
14.2
13.9
12.5
11.7
9,926
9,546
9,149
8,864
8,651
7,597
7,310
7,005
6,775
6,570
2,329
2,236
2,144
2,089
2,081
85
86
89
90
91
61
62
68
71
74
63
61
67
69
73
68
72
74
76
80
84
85
90
89
88
89
89
93
92
1955..
1956.
1957.
1958.
1959.
19,078
18,712
17,656
17,128
16,592
11.5
11.1
10.3
9.8
9.4
8,379
7,853
7,600
7,503
7,342
6,345
5,899
5,660
5,521
5,390
2,034
1,954
1,940
1,982
1,952
94
96
96
103
101
80
86
91
103
106
77
83
90
105
105
85
89
92
100
108
91
92
93
105
102
93
95
96
100
104
1960.
1961.
1962.
1963.
1964.
15,635
14,803
14,313
13,367
12,954
8.7
8.1
7.7
7.1
6.7
7,057
6,919
6,700
6,518
6,110
5,172
5,029
4,873
4,738
4,506
1,885
1,890
1,827
1,780
1,604
105
106
107
110
109
115
120
127
135
142
114
119
124
132
133
113
120
127
137
147
109
113
116
119
116
105
108
108
111
112
1965...
1966*..
12,363
11,500
6.4
5.8
5,610
5,259
4,128
3,902
1,482
1,357
112
109
153
157
150
149
154
161
123
120
110
114
76
77
70
70
75
80
81
78
75
1 Farm population as defined b y Department of Agriculture and Department of Commerce, i.e., civilian
population living on farms, regardless of occupation.
2 Total population of United States as of July 1 includes armed forces abroad and Alaska and Hawaii
beginning January and August 1959, respectively.
* Includes persons doing farm work on all farms. These data, published by the Department of Agriculture, Statistical Reporting Service, differ from those on agricultural employment b y the Department
of Labor (see Table B-20) because of differences in the method of approach, in concepts of employment,
and in time of month for which the data are collected. For further explanation, see monthly report on
Farm Labor, September 10,1958.
* Computed from variable weights for individual crops produced each year.
Sources: Department of Agriculture and Department of Commerce (Bureau of the Census).
301
240-782 O — 6 7 -
-20
TABLE B-77.—Indexes of prices received and prices paid by farmers, and parity ratio, 1929-66
[1957-59=100]
Prices received b y fanners
Crops
Year or month
All
farm
prod-
Livestock and products
Feed grains
and hay
All Food
rops1 grains
All
Oil- liveCot- To- bear- stock
and
ton bacco ing
Feed
crops prod-1
Total grains
ucts
Meat Dairy Poultry
ani
and
mals ucts eggs
1929
61
61
55
74
77
57
35
62
62
50
65
102
1930
1931
_ _
1932
1933
1934
1935
1936
1937
1938
1939 . —
52
36
27
29
37
45
47
51
40
39
52
34
26
32
44
46
49
53
36
37
44
27
21
31
43
46
51
57
35
34
67
46
31
36
60
68
65
79
45
46
68
44
28
36
60
70
68
84
45
44
40
24
19
26
39
38
38
36
27
28
29
20
18
22
32
35
33
41
36
31
48
32
19
25
45
55
52
56
42
42
52
38
28
27
32
44
46
49
43
41
43
30
20
19
22
38
38
42
37
36
55
43
33
34
40
45
49
51
45
43
81
62
51
47
56
74
73
70
69
61
1940
1941
1942
1943
1944
1945 _
1946
1947
1948
1949 .
42
51
66
8 80
8 82
6 86
8 98
114
119
103
41
48
65
84
89
91
102
118
114
100
40
46
57
70
78
81
95
128
118
103
54
58
72
96
108
106
127
161
162
112
54
58
73
97
109
104
131
171
170
109
32
43
60
64
66
69
91
105
104
94
28
32
51
66
72
74
78
77
78
82
45
60
80
88
97
100
114
158
153
106
42
53
66
77
76
82
94
111
122
106
35
46
60
66
62
6 67
47
55
63
677
6 86
107
117
101
6 104
106
117
98
62
77
96
121
112
126
127
141
153
140
1950 1951
1952
1953
1954
1955
1956
1957
1958
1959
107
125
119
105
102
96
95
97
104
99
104
119
120
108
108
104
105
101
100
99
106
115
116
111
110
107
106
106
98
96
122
143
147
130
128
116
115
105
97
98
123
147
150
132
130
116
116
105
97
98
108
129
119
102
105
104
103
101
97
102
83
90
89
89
91
90
93
96
100
104
120
148
129
122
133
109
111
106
98
96
108
130
119
104
97
90
88
94
106
100
110
133
115
94
92
80
76
89
109
102
97
112
118
104
96
96
99
101
99
100
118
144
130
140
113
121
112
102
108
90
I960
1961
1962
1963
1964
_
1965
1966
1965: Jan 15
Feb 15
.M a r 15
Apr 15
.
M a y 15
June 15
July 15
Augl5
Sept 15
Octl5
Novl5
Dec 15
1966' Jan 15
Feb 15
Mar 15
Apr 15
M a y 15
June 15
July 15
Augl5
Sept 15
Octl5
Novl5
Dec 15
99
99
101
100
98
102
110
98
98
99
101
104
105
104
103
103
103
103
107
108
112
111
110
109
109
110
113
112
110
107
107
99
102
104
107
107
104
105
105
105
107
109
111
108
104
100
100
99
93
100
101
104
104
106
107
108
110
108
106
104
103
103
96
99
107
106
90
77
87
79
79
78
77
76
74
76
76
76
77
79
80
81
82
81
79
82
89
96
94
93
89
89
90
95
95
97
103
105
109
113
110
93
94
95
101
102
106
111
106
107
108
110
112
113
111
107
106
99
94
101
105
106
104
106
109
109
114
117
119
114
113
116
97
100
104
104
100
94
82
90
89
93
95
97
97
97
93
95
95
94
90
86
86
90
92
92
94
97
69
69
73
71
71
103
109
109
102
101
106
114
101
103
103
103
103
103
103
107
109
109
113
113
111
112
112
113
113
113
113
115
118
116
111
116
93
112
108
113
112
116
128
120
123
123
123
119
120
118
112
107
107
107
111
117
121
119
121
124
128
138
148
133
128
128
129
98
98
99
95
91
101
113
92
93
93
95
99
103
104
105
105
106
107
112
114
118
118
113
110
110
111
116
116
114
110
109
96
97
101
94
88
104
116
88
91
92
95
104
111
111
111
108
108
108
116
120
125
123
119
117
117
114
119
115
111
105
105
101
101
99
99
100
102
114
104
102
100
97
94
94
97
101
105
108
110
110
108
108
108
106
104
104
111
117
124
128
127
125
101
92
92
92
90
92
102
87
87
88
91
87
88
90
93
95
96
98
104
101
108
110
102
95
93
97
103
106
101
103
100
115
113
112
108
108
101
98
105
108
110
107
108
110
110
115
118
120
116
115
118
See footnotes at end of table.
302
TABLE B-77.—Indexes of prices received and prices paid by farmers, and parity ratio, 1929-66—
Continued
[1957-59=100]
Prices paid by fanners
Year or month
1929
1930..-.
1931.....
1932
1933..—
1934.....
1935
1936
1937
1938.—.
1939.....
1940
1941
1942.....
1943
1944
1945....
1946....
1947....
1948....
1949....
1950....
1951
1952
1953
1954..1955...1957..
1958..
1959..
I960..
1961..
1962.
1964
1965
1966 *
1965: Jan 15..—
Febl5....
M a r 15....
A p r 15....
M a y 15...
June 15..
July 15...
Augl5._.
Sept 1 5 —
Octl5.__
N o v 15...
Dec 15...
1966: Jan 15.....
Feb 15...
Mar 15...
Apr 1 5 —
May 15...
June 15..
July 15...
Augl5...
Sept 15...
Octl5...
N o v 15...
Dec 15...
1
2
3
4
5
6
All
Commodities and services
items,
interest,
Production items
taxes,
Famand
All
ily
All
Farm
wage
marates Items living produc- Feed Motor
veItems tion
chin(parity
hicles ery
items
index)
55
52
44
38
37
41
42
42
45
42
42
42
45
52
58
62
65
71
82
89
86
87
95
95
94
95
98
100
102
102
103
105
107
107
110
114
108
109
109
109
110
110
110
110
110
110
110
HI
112
112
113
114
114
114
114
114
115
115
115
115
43
45
45
48
45
44
45
48
55
61
64
66
72
85
92
88
90
100
100
96
96
95
101
101
101
101
103
104
104
106
109
104
105
105
106
107
107
107
106
106
106
106
107
108
108
109
109
109
109
109
110
111
110
110
110
54
50
43
37
38
43
43
43
45
43
42
42
45
52
58
61
64
71
83
88
85
86
94
95
94
94
95
96
99
100
101
102
102
103
104
105
107
110
106
106
106
106
108
107
107
107
107
107
107
108
108
109
110
110
110
110
110
111
111
111
111
111
56
52
43
38
38
44
46
46
50
47
46
47
50
57
63
66
67
73
85
95
91
94
104
104
97
97
96
95
98
100
102
101
101
103
104
103
105
108
104
104
104
105
106
106
106
106
106
105
105
106
107
108
108
108
108
108
109
109
110
109
109
109
61
43
32
37
52
53
55
62
47
47
50
54
66
78
87
86
100
118
125
103
105
118
126
114
113
106
103
101
99
100
100
104
103
104
109
104
104
104
105
105
105
104
104
104
103
102
103
105
107
105
105
106
106
110
111
113
112
111
113
Fertilizer
85
87
89
96
100
104
102
102
105
109
111
113
118
43
43
42
40
39
40
41
42
43
44
43
43
43
46
48
49
49
51
58
67
76
78
83
86
87
87
87
92
96
100
104
107
110
111
113
116
119
124
113
118
100
100
115
114
119
100
110
111
113
115
121
100
117
122
100
100
116
118
124
100
126
100
35
35
34
34
36
37
38
39
42
40
40
42
45
47
51
53
55
63
71
78
78
83
87
117
119
118
94
100
102
103
102
101
100
100
100
100
100
100
100
100
99
100
100
121
ParInity
W a g e ratio»
ter- Taxes* rates*
est^
116
113
108
101
90
80
74
68
64
60
58
56
54
51
46
43
41
40
42
43
45
49
54
59
63
68
74
83
91
100
109
120
131
145
162
182
206
232
204
204
204
204
204
204
204
204
204
204
204
206
232
232
232
232
232
232
232
232
232
232
232
232
56
57
56
51
44
38
36
36
36
38
37
37
37
39
43
48
56
60
65
68
71
74
77
81
87
93
100
107
117
125
132
139
147
156
165
155
155
155
155
155
155
155
155
155
155
155
156
165
165
165
165
165
165
165
165
165
165
165
165
92
96
99
105
109
110
114
116
119
125
135
122
122
122
126
ite
126
125
125
125
128
128
128
127
127
127
1S8
1S8
1S8
1S5
1S5
1S5
HO
140
HO
Includes items not shown separately.
Interest payable per acre on form real estate debt.
Farm real estate taxes payable per acre (levied in preceding year).
Monthly data are seasonally adjusted.
Percentage ratio of prices received for all farm products to parity index, on a 1910-14=100 base.
Includes wartime subsidy payments.
Source: Department of Agriculture.
303
92
83
67
58
64
75
88
92
93
78
77
81
93
105
113
108
109
113
115
110
100
101
107
100
92
89
84
83
82
85
81
80
79
80
78
76
77
80
74
75
75
76
78
79
78
77
77
77
77
80
80
83
81
80
79
79
80
81
80
79
77
77
T A B L E B—78.—Selected measures of farm resources and inputs,
Crops
harvested
(millions1
of acres)
Year
Total
1929-66
Index numbers of inputs (1957-59=100)
Livestock
breeding
Exclu- units
sive of (1957use for 59=
2
feed for 100)
horses
and
mules
Manhours
of
farm
work
(bil-
lions)
Total
MeFeed,
chani- Ferti- seed,
cal
and
F a r m Farm
lizer
real power
live- Miscellabor estate
and
3 and
stock laneous
lime
mapurchinery
chases4
1929
365
298
23.2
98
218
92
38
21
27
76
1930
1931
1932
1933
1934
369
365
371
340
304
304
303
311
281
247
22.9
23.4
22.6
22.6
20.2
97
96
93
91
86
216
220
213
212
190
91
89
86
87
86
40
38
35
32
32
21
16
11
12
14
26
23
24
24
24
76
78
79
76
69
1935
1936
1937.
1938
1939
345
323
347
349
331
21.1
20.4
22.1
20.6
20.7
88"
89
94
91
94
198
192
208
193
194
88
89
90
91
92
33
35
38
40
40
17
20
24
23
24
23
31
29
30
37
66
269
295
301
286
341
344
348
357
298
304
309
320
326
95
94
104
117
114
20.5
20.0
20.6
20.3
20.2
97
97
100
101
101
192
188
194
191
190
92
92
91
89
88
42
44
48
50
51
28
30
34
38
43
45
46
57
63
64
70
72
73
74
75
76
76
1945
1946
1947
1948
1949
354
352
355
356
360
322
323
329
332
109
107
104
98
18.8
18.1
17.2
16.8
16.2
99
99
99
100
101
177
170
162
158
152
88
91
92
95
95
54
58
64
72
80
45
53
56
57
61
72
69
73
72
69
76
77
78
74
82
1950
1951
1952
1953
1954
345
344
349
348
346
326
326
334
335
335
102
103
103
100
104
15.1
15.2
14.5
14.0
13.3
101
104
103
103
102
142
143
136
131
125
97
98
99
99
100
86
92
96
97
98
68
73
80
83
88
72
80
81
80
82
85
1955
1956
1957
1958
1959
340
324
324
324
324
330
315
316
317
318
106
104
101
99
100
12.8
12.0
11.1
10.5
10.3
102
101
99
99
102
120
113
104
99
97
100
99
100
100
100
99
99
100
99
101
90
91
94
97
109
86
91
93
101
106
94
98
95
100
105
1960
1961
1962
1963
1964
324
303
295
300
301
319
299
291
296
297
97
100
101
9.8
9.5
9.1
8.8
8.4
101
101
101
102
103
92
89
85
83
79
100
100
101
101
102
100
97
97
99
101
110
116
124
141
155
109
123
121
124
123
106
109
113
115
120
1965
1966*
299
296
292
101
97
8.0
7.6
103
104
75
72
100
99
101
103
163
164
124
130
124
128
1940
1941
1942
1943
1944
,
95
1
Acreage harvested (excluding duplication) plus acreages in fruits, tree nuts, and farm gardens.
Animal units of breeding livestock, excluding horses and mules.
Includes buildings and improvements on land.
* Nonfarm inputs associated with farmers' purchases.
Source: Department of Agriculture.
32
304
91
91
TABLE B-79.—Comparative balance sheet of agriculture, 7929-67
[Billions of dollars]
Assets
Claims
Other physical assets
Beginning
of year
Financial assets
HouseMahold DeposInvest- Total Real Other
Real
chinfurestate debt
ment
Total estate
its
U.S.
ery
nishdebt
in coLive- and Crops 2
and savings operaings
stock i motor
cur- bonds tives
and
vehiequip- rency
cles
ment
48.0
6.6
3.2
47.9
43.7
37.2
30.8
32.2
6.5
4.9
3.6
3.0
3.2
3.4
3.3
3.0
2.5
2.2
33.3
34.3
35.2
35.2
34.1
3.5
5.2
5.1
5.0
5.1
2.2
2.4
2.6
3.0
3.2
52.9
55.0
62.9
73.7
84.6
33.6
34.4
37.5
41.6
48.2
5.1
5.3
7.1
9.6
9.7
3.1
3.3
4.0
4.9
5.4
2.7
3.0
3.8
5.1
6.1
4.2
4.2
4.9
5.0
5.3
3.2
3.5
4.2
5.4
6.6
0.2
.4
.5
1.1
2.2
.8
.9
.9
1.0
1.1
52.9
55.0
62.9
73.7
84.6
- 94.2
1948
1949
103.5
116.4
127.9
134.9
53.9
61.0
68.5
73.7
76.6
9.0
9.7
11.9
13.3
14.4
6.5
5.4
5.3
7.4
10.1
6.7
6.3
7.1
9.0
8.6
5.6
6.1
7.7
8.5
9.1
7.9
9.4
10.2
9.9
9.6
3.4
4.2
4.2
4.4
4.6
1.2
1.4
1.5
1.7
1.9
1950
1951
1952
1953
1954 . -
132.5
151.5
167.0
164.3
161.2
75.3
86.6
95.1
96.5
95.0
12.9
17.1
19.5
14.8
11.7
12.2
14.1
16.7
17.4
18.4
7.6
7.9
8.8
9.0
9.2
8.6
9.7
10.3
9.9
9.9
9.1
9.1
9.4
9.4
9.4
4.7
4.7
4.7
4.6
4.7
1955
1956
1957.
1958
1959
165.1
169.7
178.0
186.0
202.8
98.2
102.9
110.4
115.9
124.4
11.2
10.6
11.0
13.9
17.7
18.6
19.3
20.2
20.2
22.1
9.6
8.3
8.3
7.6
9.3
10.0
10.5
10.0
9.9
9.8
9.4
9.5
9.4
9.5
10.0
1960
1962
1963
1964
203.9
204.3
213.0
220.7
229.2
129.9
131.4
137.4
142.8
150.7
15.6
15.5
16.4
17.2
15.7
22.3
22.0
22.5
22.7
24.1
7.8
8.0
8.7
9.2
9.9
9.6
8.9
9.1
9.0
8.8
1965
1966
1967 P
237.9 159.4
255.8 171.1
273.3 184.2
14.4
17 5
25.7
27. R
8.9
9. fi
8.7
8.6
1929
1930
1931
1932
1933
1934
68.5
1935
1936
1937
1938
1939
1940
1941
1942 _
1943
1944
1945
1946
1947...
1961..
Proprietors'
equities
9.8
2.5
4.0
68.5
9.6
9.4
5.0
53.9
6.6
6.5
6.4
6.0
5.4
3.4
3.9
4.1
4.0
3.5
42.9
44.6
52.4
63.7
75.7
94.2
103.5
116.4
127.9
134.9
4.9
4.8
4.9
5.1
5.3
3.4
3.2
3.6
4.2
6.1
85.9
95.5
107.9
118.6
123.5
2.1
2.3
2.5
2.7
2.9
132.5
151.5
167.0
164.3
161.2
5.6
6.1
6.7
7.2
7.7
6.8
7.0
8.0
8.9
9.2
120.1
138.4
152.3
148.2
144.3
5.0
5.2
5.1
5.1
5.2
3.1
3.4
3.6
3.9
4.3
165.1
169.7
178.0
186.0
202.8
8.2
9.0
9.8
10.4
11.1
9.4
9.8
9.6
10.0
12.6
147.5
150.9
158.6
165.6
179.1
9.2
8.7
8.8
9.2
9.2
4.7
4.6
4.5
4.4
4.2
4.8
5.2
5.6
6.2
6.6
203.9
204.3
213.0
220.7
229.2
12.1
12.8
13.9
15.2
16.8
12.8
13.4
14.8
16.6
18.1
179.0
178.1
184.3
188.9
194.3
9.6
10.0
4.2
4.1
22.6
7.0 237.9 18.9 18.6
7.4 255.8 21.2 20.4
273 3 23 5 22.3
200.4
214.2
227.5
3.6
0.6
9.1
8.5
7.7
7.6
7.4
7.2
7.0
6.8
66.5
12 Beginning with 1961, horses and mules are excluded.
Includes all crops held on farms and crops held off farms by farmers us security for Commodity Credit
Corporation loans. The latter on January 1,1966, totaled $570 million.
Source: Department of Agriculture.
305
INTERNATIONAL STATISTICS
TABLE B-80.—United States balance of payments, 1947-66
[Millions of dollars]
Imports of goods and
services
Exports of goods and services
Income on
investments
Year or quarter
Total
Mer- Milichan- tary
dise!
1947...
1948...
1949...
19,737 16,015
16,789 13,193
15,770 12,149
1950...
1951...
1952...
1953...
1954-
13,807
18,744
17,992
16,947
17,759
1955...
1956...
1957...
1958...
1959...
19,804
23,595
26,481
23,067
23,489
1960...
1961...
1962...
1963...
1964...
27,244
28,575
30,278
32,339
36,958
1965...
1966 ».
Other
Total
Pri- Govvate ernment
1,036
1,238
,297
66 2,620 8,208
102 2,256 10,349
2,226 9,621
Balance Remiton
tances
Miligoods and
Mer- tary Other and
penchan- exserv- sions
dise^ pendices
itures
455 1,774 11,529
799 1,987 6,440
621 2,121 6,149
5,979
7,563
6,879
-728
-631
-641
,484
,684
,624
,658
,955
109
198
204
252
272
2,097
2,739
2,845
2,564
2,551
9,108
11,202
10,838
10,990
10,354
576
1,270
2,054
2,615
2,642
2,344
2,601
2,874
2,956
2,935
1,779
3,671
2,226
386
1,828
-533
-480
-571
-644
14,280
17,379
19,390
16,264
16,295
200
161
375
300
2,170
2,468
2,612
2,538
2,694
274
194
205
307
349
2,880 17,795 11,527
3,393 19,628 12,804
20,752 13,291
3,658 20,861 12,952
3,849 23,342 15,310
2,901
2,949
3,216
3,435
3,107
3,367
3,875
4,245
4,474
4,925
2,009
3,967
5,729
2,206
147
-597
-690
-729
-745
-815
19,489
19,954
20,604
22,071
25,297
335
402
656
657
747
3,001
3,561
3,954
4,156
4,932
349
380
471
498
460
4,070
4,278
4,593
4,957
5,522
3,069
2,981
3,083
2,936
2,834
5,397
5,463
5,878
6,514
7,013
4,046
5,621
5,130
5,897
8,490
-732
-757
-867
-879
38,993 26,276
42,687 28,961
844
5,683
512 5,972 32,036 21,488 2,881 7,667
6,552 37,200 25,233 3,587 8,380
10,117
14,123
13,319
12,281
12,799
182
12,028
15,073
15,766
16,561
15,931
23,198
22,954
25,148
26,442
28,468
14,732
14,510
16,187
16,992
18,621
6,957
5,487 -1,000
Seasonally adjusted annual rates
1964: I . .
II_
III
IV
36,448
36,004
37,232
38,148
24,624
24,368
25,556
26,640
792
744
648
804
5,080
4,944
4,940
4,764
528
532
532
248
5,424
5,416
5,556
5,692
27,400
28,128
28,784
29,560
17,556
18,316
19,008
19,604
2,960
2,900
2,744
2,732
6,884
6,912
7,032
7,224
9,048
7,876
8,448
8,588
-848
-852
-896
-920
1965: I__
II
III
IV
35,104
40,544
40,064
40,260
22,500
27,192
27,304
28,108
800
916
796
864
5,688
5,880
5,284
4,704
556
584
596
312
5,560
5,972
6,084
6,272
28,656
32,348
32,980
34,160
18,624
21,924
22,380
23,024
2,656
2,804
2,980
3,084
7,376
7,620
7,620
8,052
6,448
8,196
7,084
6,100
-908
-1,152
-976
-940
1966: I —
II
792 5,524
41,980 28,684
42,288 28,444 1,040 5,720
860 5,804
43,792 29,756
596 6,384 35,704 24,016 3,416 8,272
596 6,488 36,848 25,048 3,596 8,204
588 6,784 39,048 26,636 3,748 8,664
6,276
5,440
4,744
-944
-944
-1,112
See footnotes at end of table.
306
TABLE B-80.—United States balance of payments, 1947-66—Continued
[Millions of dollars]
U.S. private capital,
net
Year or
quarter
U.S.
Government
grants
and Direct
investment
net 2
For- Errors
and
eign unrecapi- corded
Other Short- tal,
translong- term net 2 actions
term
1947.
1948
1949.
-6,121
-4,918
-5,649
-749
-721
-49
-69
-80
I960.
1951.
1952.
1953.
1954.
-3,640
-3,191
-2,380
-2,055
-1,554
-621
-508
-852
-735
-667
-495
-437
-214
185
-320
-149
-103
1955.
1956.
1957.
1958.
1959.
-241
-2,211
-2,362 1,951
-2,574 •2,442
-2,587 :, 181 -1,444
-1,986
,372 -926
1960_
1961.
1962.
1963.
1964.
,674
-2,769
,599
-2,780
-3,013
,654
-3,581
,976
-3,560 -2,416
1965_
1966
-3,375 -3,371 - 1 ,
-3,608 -3,151 - 4 4 3
Changes in selected lia- Changes
bilities (decrease ( - ) ) « in gold,
convertible curTo foreign
rencies,
Offi- official holders 6 To
and
cial
IMF
Liqother
gold
foreign
uidity reserve
transhold- tranche
basis 3 actions
Non- ers s position
Liquid liquid
(increase
())
Balance
4,210
817
136
-3,315
-1,736
-266
167
-635
181
540
52
146
249
-11 -3,489
500
-8
627 —1, 206
366 -2,184
191 -1,541
1,758
-33
-415
1,256
480
-191
-517
-276
-311
-77
297
615
545
186
736
515 -1,242
568 - 9 7 3
1,184
578
511 -3,365
423 -3,870
-1,165
2,292
1,035
-116
187
-94
- 8 6 3 -1,348
-1,025 -1,556
-1,227 -544
-1,695 -785
-1,961 -2,146
761
-53
-432
-361
44
949
1,193
786
182
366 -941 -3,881 -3,402
707 -1,006 -2,370 -1,347
1,021 -1,159 -2,203 -2,706
689 -352 -2,670 -2,044
685 -1,011 -2,798 -1,546
194
2,016
-429 -1,337 -1,305
655
-461 -1,213
Seasonally adjusted annual rates
-3,048 -1,916 -1.G64
II... -3,416 -2,144 -1,120
III- -3,540 -2,488 -2,408
IV.. -4,236 -3,116 -3,252
1964: I.
1965: I....
II-..
III..
IV..
-3,208
-3,796
-2,972
-3,524
-4,848 -2,656
404
-3,436
-2,276 -1,452
-2,924 -616
1966: I
II..
-3,792 -2,748
-3,856 -3,904
-3,176 -2,800
-876
-320
-132
-2,460
-2,276
-1,460
-2,388
480
1,2
1,084 1,300
1,648 -524
420 -l,C04
-108 1,004
-152
80
ioi,449
i»681
10 457
1,673
1,073
-17
254
-7
302
213
619
1,554
2,143
606
1,533
378
171
100
132
1,222
Quarterly totals unadjusted
1,184 -992 -576
-608 -2,208 -1,304
-812 -2,468 -924
-1,440 -5,524 -3,380
400
215
389
869
-34
23
222
91
227
114
562
651
-51
303
70
-151
-2,788 -2,472
904
-436
956
-960 -2,136
928
-320 -1,328 -4,632
860
107
253
697
-23
-16
-18
157
203
-150
-633
842
68
41
271
-964
-856
3,784
851
58
614
25
254
105
475
26
424
68
1,243
1,156 -1,188 -2,204
3,840 -668 -564
1,052
472 -872
712
1
2
3
Adjusted from customs data for differences in timing and coverage.
Includes certain special Government transactions.
Equals changes in liquid liabilities to foreign official holders, other foreign holders, and changes in official
reserve
assets consisting of gold, convertible currencies, and the U.S. gold tranche position in the IMF.
4
Equals changes in liquid and nonliquid liabilities to foreign official holders and changes in official reserve
assets
consisting
of gold, convertible currencies, and the U.S. gold tranche position in the IMF.
3
Includes short-term official and banking liabilities, foreign holdings of U.S. Government bonds and notes,
and
certain
nonliquid
liabilities to foreign official holders.
6
Central banks, governments, and U.S. liabilities to the IMF arising from reversible gold sales to, and
gold deposits with the U.S. Data for years before 1960 include estimates of official transactions in marketable
U.S.
Government bonds and notes.
7
Provisional.
8
Private holders; includes banks and international and regional organizations, excludes IMF.
9
Not reported separately.
i° Includes change in Treasury liabilities to certain foreign military agencies; excluding these changes,
data ($ millions) are 1,259 (1960), 741 (1961), 919 (1962).
ii Average for the first 3 quarters on a seasonally adjusted annual rates basis.
NOTE.—Data exclude military grant-aid and U.S. subscriptions to International Monetary Fund.
Source: Department of Commerce, Office of Business Economics.
307
TABLE B—81.—United States merchandise exports and imports, by commodity groups, 1958—66
[Millions of dollars]
Merchandise exports *
Year or quarter
Total,
including
reexports *
Merchandise imports
ImGeneral imports 3
ports
for
consumpTotal *
Food, Crude Man- tion 7
Food, 3rude
Seabever- ma- ufacson- Unbever- maally adSeaages, teTo- ages, te- tured
ad- usted
and rials ;oods
son- Un- and rials
justed
adand
ally
and
totoad- justed bacco fuels 8
bacco 'uels
justed
Domestic exports
Gross
merchandise
trade
surplus,
seaMan sonufac- ally
tured adgoods justed
(6)
(8)
1958-
.6,373 16,208 2,688 3,051 11,546 13,167
.6,406 16,222 2,852 2,996 11,171 15,416
I960..
19611962..
1963..
1964-
19,638 19,437
20,188 19,943
20,973 20,704
22,427 22,142
25,67125,318
3,89812,892 15,016
3,817 13,03714,660
3,32313,912 16,244
3,74114,611:17,002
,
4,33916,36618,i,600
13,220 3,550 4,062 5,283 3,153
15,629 3,580 4,580 7,090
777
15,019 3,392 4,380 6,846 4,619
14,716 3,455
6,523 5,472
16,382 3,674 4,640 7,627 4,591
17,140
4,693 8,066 5,287
18,684 4,022 4,964 9,108 6,987
19651966'
26,56' 26,224 4,521 4,274 17,258 21,282
29,500 28,500 5,200 4,400 19,000 25,500
21,366 4,013 5,385 11,238 5,201
25,600 4,600 5,70014,400 3,900
3,145
3,422
3,677
4,096
4,638
1964: I - . .
II..
III.
IV..
6,173
6,185
6,tf9
6,789
6,185
6,414
6,036
7,036
6,101
6,314
5,956
6,947
1,039
1,020
1,035
1,245
3,935
4,158
3,887
4,386
4,349 4,895 4,372
967
4,558 4,581 4,608
982
4,665
911
4,673
5,039 1,162
5,020
1965: I - . II..
IIIIV..
5,568
6,870
6,918
7,106
5,593
7,128
6,436
7,410
5,522
916
846
7,042 1,163 1,170
6,346 1,177 986
7,314 1,335 1,202
3,766
4,717
4,107
4,668
4,618
5,419
5,158
6,087
4,658
5,451
6,284
5,944
4,609
915
828 1,292 2,332
5,487 1,027 1,389 2,897 1,419
5,146
912 1,300 2,752 1,679
6,124 1,246 1,404 3,257 1,162
1966: I - . . .
II-..
IIIIV9.
7,178
7,181
7,501
7,600
7,090
7,439
7,038
7,900
6,931
7,090
6,799
7,700
1,023
1,090
1,030
1,300
4,650
4,892
4,535
4,900
5,832
6,229
6,555
6,900
6,001
6,808
6,665
6,600
5,897
6,341
6,546
6,800
1,148
1,134
1,051
1,305
1,25'
1,253
1,314
1,400
1,112
1,165
1,112
1,200
1,209
1,229
1,279
1,247
1,410
1,438
1,456
1,400
2,050
2,257
2,329
2,472
1,778
1,604
1,784
1,899
3,187 1,177
3,522
878
3,766
886
3,900 1,000
1 Data for 1964 only have been adjusted for comparability with the revised commodity classifications
effective in 1965.
2 Totals exclude Department of Defense shipments of grant-aid military supplies and equipment under
the3 Military Assistance Program.
Total arrivals of imported goods other than intransit shipments.
4
Total includes commodities and transactions not classified according to kind.
5
Includes
fats and oils.
8
Includes machinery, transportation equipment, chemicals, metals, and other manufactures. Export
data
for
these
items include military grant-aid shipments.
7
Imported merchandise released from Customs custody for entry into U.S. consumption channels, entries into bonded manufacturing warehouses, and imported ores and crude metals which have been processed
in 8bonded smelting warehouses.
Exports, excluding military grant-aid, less general imports.
» Totals based on data for October, November, and estimates for December.
NOTE.—Data are as reported by the Bureau of the Census. Export statistics cover all merchandise
shipped from the U.S. customs area, except supplies for U.S. Armed Forces. Export values are f.a.s. port
of export and include shipments under Agency for International Development and Food for Peace programs
as well as other private relief shipments. Import statistics are valued f.o.b., the foreign port of export, and
exclude insurance, transportation, and other charges incident to arrival in the United States. Data include
trade of Alaska, Hawaii, and Puerto Rico.
Source: Department of Commerce, Bureau of International Commerce.
308
TABLE B—82.—United States merchandise exports and imports, by area, 1960-66
[Millions of dollars]
JanuaryNovember
Area
Exports (including reexports
and special category shipments): Total
Developed countries
Developing countries
Canada
Other Western Hemisphere
Western Europe
Eastern Europe
Asia
Australia and Oceania.-.
Africa
1960
1961
1962
1963
1964
1965
1965
1966
20,586
20,998
21,700
23,347
26,489
27,346
24,740
27,633
13,259
7,132
13,564
7,300
13,985
7,590
15,124
8,056
17,182
8,967
18,183
9,024
16,478
8,145
18,284
9,169
4,045
4,251
4,915
5,644
5,119
6,078
3,875
7,211
195
4,187
515
793
3,849
7,237
134
4,643
450
859
3,679
7,633
125
4,673
522
1,023
3,692
8,171
167
5,448
565
1,053
4,292
9,076
340
804
1,259
4,275
9,177
139
6,013
869
1,229
3,847
8,281
117
5,431
808
1,137
4,322
8,996
180
6,091
739
1,227
15,019
14,716
16,382
17,140
18,684
21,366
19,206
23,321
8,951
5,984
8,910
5,721
10,250
6,049
10,808
6,247
11,894
6,687
14,068
7,156
12,671
6,411
16,007
7,150
3,829
4,239
4,832
4,362
5,502
3,931
4,544
79
2,960
440
754
14
4,021
4,731
81
3,192
502
778
4,150
5,208
99
3,620
440
916
12
4,373
6,155
138
4,529
453
875
11
3,920
5,510
121
4,082
416
785
10
4,321
7,004
161
4,874
551
General imports: Total
Developed countries
Developing countries
Canada
Other Western Hemisphere
Western Europe
Eastern Europe
Asia
Australia and Oceania..
Africa
Unidentified countries i.
3,810
3,153
3,270
3,964
4,188
81
2,721
266
627
19
3,725
4,062
81
320
671
4
900
8
i Consists of certain low-valued shipments and some uranium imports, not identified by country.
NOTE.—Developed countries include, Canada, Western Europe, Japan, Australia, New Zealand, and
the Republic of South Africa. Developing countries include rest of the world except Communist areas in
Eastern Europe (except Yugoslavia) and Asia.
Data include trade of Alaska, Hawaii and Puerto Rico.
Source: Department of Commerce, Bureau of International Commerce.
309
TABLE B—83.—United States foreign assistance, by type and area,fiscalyears 1946-66
[Millions of dollars]
Net obligations and loan authorizations
Type and fiscal period
Total
Near
East
and
South
Asia
Latin
America
Far
East
Africa
Europe
Other
and nonregional
Foreign assistance:
122,793
6,347
7,023
2,092
1,746
Economic aid:
Total postwar
Loans
Grants
1962-65 average
Loans
_
Grants
1966
Loans
Grants
86,530
34,847
51,683
4,786
2,652
2,134
5,616
3,127
2,489
A I D and predecessor agencies:
Total postwar
1962-66 average
---.
1966
Food for Peace:
Total postwar
1962-66 average
1966
Total postwar^--1962-66 average
1966 i -
-.
—
11,677
1,216
1,473
28,206
1,374
2,053
3,635
443
412
47,139
701
634
6,799
521
705
18,734
10,537
8,197
1,754
1,249
505
1,474
1,250
224
10,654
7,414
3,240
1,126
739
387
1,388
17,356
3,070
14,286
736
195
540
1,262
234
1,028
3,419
1,473
1,946
419
164
255
388
202
186
30,822
11,996
18,826
344
286
58
468
441
27
5,545
359
5,186
407
19
388
635
140
494
42,574
2,242
2,543
9,726
859
622
3,658
544
647
9,361
1,852
223
170
15,229
3
-1
2,748
244
269
14,755
1,602
1,726
7,080
820
824
1,649
189
202
2,203
252
293
977
146
142
2,527
145
205
418
51
60
868
530
Export-Import Bank long-term
loans:
Total p o s t w a r —
1962-65 average
1966
2 9,476
488
2 793
988
68
10
3,680
128
226
976
78
109
420
31
44
3,247
183
263
166
Other economic aid: 3
Total postwar
1962-65 average
1966
19,725
455
553
940
7
18
1,768
266
312
4,816
37
25
169
19
33
9,819
14
2,213
113
165
1,561
55
1,506
1,408
84
1,324
6,604
152
6,451
338
7
331
272
5
267
1,023
144
879
90
7
83
85
30
56
«10,849
<36
>*10,813
«639
216
11
206
24
*
1,255
160
1,094
114
13
101
71
35
13,145
1,147
1,224
1,626
204
315
2,519
249
275
Military assistance:
*
Total postwar 1
Loans
Grants
^
1962-65 average
Loans
Grants
1966 1
Loans
Grants
Addendum—Repayments and
interest:«
Economic assistance:
Total postwar
1962-65 average
1966
Military assistance:
Total postwar
1962-65 average
630
352
44
50
140
«790
24
24
«790
24
16,317
127
16,190
356
19
338
166
15
151
118
162
327
35
35
7,557
529
429
124
12
107
16
7
74
11
7
«9
8 630
1 Includes preliminary 1966 military assistance date from the Department of Defense.
Excludes $238 million in guaranteed loans purchased in 1966 and not distributed by country.
3 Includes capital subscriptions to Inter-American Development Bank, International Bank for Reconstruction and Development, International Development Association, International Finance Corporation,
and the Asian Development Bank (1946-66, $1,915 million; 1962-65 average, $179 million; 1966, $374 million)
and Peace Corps (1962-66, $359 million; 1962-65 average, $62 million; 1966, $113 million).
4
Includes grant-aid and credit assistance under the Foreign Assistance Act (FAA) plus military assistance grants under other acts. FAA military data are from the Department of Defense. Annual data are
for deliveries. "Total postwar" entries are program totals.
* Excludes Australia and New Zealand, shown in "other and nonregional."
« Data for certain programs from Department of Commerce (Office of Business Economics), and Department of Defense.
Source: Agency for International Development (except as noted).
2
310
TABLE B-84.-—International reserves, 1949, 1953, and 1961-66
[Millions of dollars; end of period]
1966
Area and country
1949
1961
1962
1963
1964
1965
66,020
68, 480
69,845
SepDetember cember
All countries
45,515
51,780
62, 320 62,620
Developed areas
37,240
41,390
53, 670 54, 235 56, 675 58, 970
59, 065 59,190
26,024
23,458
18, 753 17, 220 16,843
16, 672
15, 450 14,876
1,752
2,670
3,318
3,308
3,147
6,455
92
978
580
196
(2)
434
10.515
325
1,144
829
1,773
768
1,232
25,813
845
1,813
3,365
7,163
3,799
1,958
26,965
1,081
1,753
4,049
6,956
3,818
1,946
29,277
1,229
1,940
4,908
7,650
3,406
2,102
537
1,026
1,607
1,610
1,875
2,382
2,326
2,303
2,342
1*343
150
1,768
1,500
886
2,759
1,618
1,045
2,872
1,835
1,147
3,078
1,942
1,513
3,123
2,004
1,409
3,247
2,025
1,276
2,934
2,115
1,206
3,327
12,185
1,197
1,902
2,276
2,547
2,603
2,881
3,027
2,710
2,683
892
1,666
2,022
2,058
2,019
2,152
2,089
2,119
2,205
2,558
United States
United Kingdom
Other Western Europe..
Austria
Belgium
France
Germany
Italy....,
Netherlands
Scandinavian countries (Denmark,
Finland, Norway,
and Sweden)
Spain
Switzerland
Others
Canada
Japan
Australia, New Zealand, and S o u t h
Africa
Less developed areas *
Latin America
.
Middle East
Other Asia
_.
Other Africa
1
2
00
70,305
14,882
3,161
3,099
32,310 33, 225 33, 794
1,327
1,317 1,311
2,192 2,304 2,294
5,724 6, 343 6,878
7,882 7,429 7,672
3,824 4,415 4,585
2,349 2,416 2,409
134,495
1,333
2,320
6,733
8,033
4,566
2,448
2,316
1,582
1,952
1,847
2,175
2,748
2,773
8,280
10,390
8,650
8,385
9,350
9,510
2,775
1,475
3,395
3 290
3,400
1,200
3,840
1,800
2,665
1,505
2,825
1,525
2,200
1,770
2,780
1,550
2,685
2,250
3,045'
1,270
2,815
2,315
2,990
1,245
3,004
10, 780 11,120
3,245
2,690
3,310
1,390
2,970
2,745
3,790
1,455
Estimate.
Not available separately.
8 In addition to other Western European countries, includes unpublished gold reserves of Greece and
an estimate of gold to be distributed by the Tripartite Commission for the Restitution of Monetary
Gold.
• Includes unpublished gold holdings not allocable by area.
NOTE.—Includes gold holdings, reserve positions in the International Monetary Fund, and foreign exchange of all countries except U.S.S.R., other Eastern European countries, Communist China, Cuba (after
March 1964), and Indonesia (after July 1965).
Beginning 1959, when most of the major currencies of the world became convertible, data exclude known
holdings of inconvertible currencies, balances under payments agreements, and the bilateral claims arising
from liquidation of the European Payments Union.
Source: International Monetary Fund, International Financial Statistics.
T A B L E B-85.—United States gold stock and holdings of convertible foreign
monetary authorities, 1946-66
currencies by U.S.
[Millions of dollars]
End of year or month
Total
Gold stock 1
Total a
Treasury-
Foreign
currency
holdings
1946
1947
1948
1949
20,706
22,868
24,399
24,563
20,706
22,868
24,399
24,563
20,529
22,754
24,244
24,427
1950
1951
1952
1953
1954
22,820
22,873
23,252
22,091
21,793
22,820
22,873
23,252
22,091
21,793
22,706
22,695
23,187
22,030
21,713
1955
1956
1957
1958
1959
21,753
22,058
22,857
20,582
19,507
21, 753
22,058
22,857
20, 582
19,507
21,690
21,949
22,781
20,534
19,456
1960
1961
1962
1963
1964
17,804
17,063
16,156
15,808
15,903
17,804
16,947
16,057
15,596
15,471
17,767
16,889
15,978
15,513
15,388
116
99
212
432
1965
1966'
1965: Jan..
Feb..
Mar.
Apr.
May.
June.
14,587
14,556
13,806
13,235
13,733
13,159
781
1,321
15,572
15,220
15,129
14,884
14,511
14,595
15,208
14,993
14,639
14,480
14,362
14,049
15,185
14,937
14,563
14,410
14,290
13,934
364
227
490
404
149
546
July.
Aug.
Sept.
Oct...
Nov.
Dec.
14,697
14,953
14,884
14,795
14,686
14,587
13,969
13,916
13,925
13,937
13,879
13,806
13.857
13,857
13.858
13,857
13,805
13,733
728
1,037
959
858
807
781
1966: Jan..
Feb.
Mar.
Apr.
May.
JuneJuly.
Aug.
Sept.
Oct._
Nov.
Dec.
14,450
14,188
14,297
14,190
14,210
14,251
13,811
13,811
13,738
13,668
13,582
13,529
13,732
13,730
13,634
13,632
13,532
13,433
639
377
559
522
628
722
14,506
14,618
14,504
14,524
14,370
14,556
13,413
13,319
13,356
13,311
13.262
13,235
13,332
13,259
13,258
13,257
13,159
13,159
:,299
., 148
,213
,108
,321
-
1 Includes gold sold to the United States by the International Monetary Fund with the right of repurchase,
which amounted to $800 million on December 31, 1966. Beginning September 1965 also includes gold deposited by the IMF to mitigate the impact on the U.S. gold stock of purchases by foreign countries for gold
subscriptions on increased IMF quotas. Amount outstanding was $211 million on Dec. 31, 1966. The
United
States has a corresponding gold liability to the IMF.
2
Includes gold in Exchange Stabilization Fund.
NOTE.—Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not
included in the gold stock of the United States.
Sources: Treasury Department and Board of Governors of the Federal Reserve System.
312
T A B L E B—86.—Price changes in international trade, 1958—66
[1958=100]
1966
Area or commodity class
1959
1958
1960
1961
1962
1963
1964
1965
Third
quarter
Unit value indexes by area
Developed areas
Total:
Exports
Terms of trade i_
United States 2
Exports
Terms of trade 1
Developing areas
Total:
Exports
Terms of trade
Latin America
Exports
Terms of trade !
Latin America excluding petroleum
Exports
Terms of trade
100
100
99
102
100
103
101
104
101
105
102
104
103
104
104
104
106
104
100
100
100
102
101
101
103
105
102
107
102
105
103
104
106
106
3 107
3 105
100
100
97
99
98
99
95
97
93
95
95
97
97
97
97
97
97
100
100
95
95
95
96
93
95
91
93
94
97
101
103
101
102
100
100
94
94
95
96
93
95
91
92
95
97
104
105
104
105
3
3
3
3
103
103
106
106
World export price indexes 4
Primary commodities: Total-
97
100
97
95
94
100
103
100
101
Foodstuffs
Coffee, tea, and cocoaCereals
100
93
91
90
90
103
106
99
100
100
100
83
97
77
96
72
98
70
103
73
102
87
105
80
101
85
106
Other agricultural commodities s
Fats, oils, and oilseeds.
Textile fibers
Wool
100
105
107
103
99
103
105
104
107
888
100
98
106
94
104
108
97
105
107
89
101
106
95
112
127
98
116
131
108
105
110
106
108
119
100
100
94
97
93
98
92
100
92
99
92
96
94
104
96
110
96
108
100
100
111
99
114
101
110
102
109
102
110
103
135
104
155
106
173
109
Minerals
Metal ores.
Nonferrous base metals.
Manufactured goods *._.
1 Terms of trade indexes are unit value indexes of exports divided by unit value indexes of imports.
2 Includes foreign trade of Alaska, Hawaii, and Puerto Rico.
34 Data are for second quarter 1966.
Data for manufactured goods are unit value indexes,
s Includes nonfood fish and forest products.
NOTE.—Data exclude trade of Communist areas in Eastern Europe (except Yugoslavia) and Asia.
Sources: United Nations and Department of Commerce (Bureau of International Commerce).
3*3
TABLE B—87.— Consumer price indexes in the United States and other major industrial countries,
1955-66
[1960=100]
Period
United
States
Canada
Japan
France Germany
Italy
Nether- United
lands Kingdom
1955
1956
1957
1958
1959
90.5
91.9
95.1
97.7
98.4
90.9
92.3
95.2
97.7
98.8
92.7
93.0
95.9
95.5
96.5
75.5
76.9
79.0
90.9
96.5
91.4
93.7
95.6
97.7
98.6
91.2
94.3
95.5
98.2
97.8
88
89
95
97
98
87.8
92.1
95.6
98.5
99.0
1960
1961
1962
1963
1964
100.0
101.1
102.2
103.5
104.9
100.0
100.9
102.1
103.9
105.8
100.0
105.3
112.5
121.0
125.6
100. C
103.3
108.3
113.5
117.4
100.0
102.3
105.4
108.5
111.1
100.0
102.1
106.9
114.8
121.6
100
101
103
107
113
100.0
103.4
107.8
110.0
113.6
1965.
19661
106.6
109.7
108.4
112.3
135.2
142.2
120.3
123.3
114.9
118.8
127.1
129.9
119
126
119.0
123.5
II...
III..
IV..
104.5
104.7
105.0
105.4
105.0
105.6
106.2
106.3
122.4
125.1
126.1
128.8
116.3
116.6
117.5
118.2
110.3
110.9
111.3
111.8
119.1
120.5
122.5
124.3
110
114
114
114
111.3
113.4
114.3
115.3
1965: I . . . .
II—
III..
IV..
105.6
106.4
106.8
107.4
107.2
108.0
108.9
109.4
131.4
136.0
136.2
137.3
119.1
120.4
120.6
121.2
113.0
114.4
115.6
116.2
125.7
126.5
127.7
128.5
115
120
120
120
116.4
119.3
119.8
120.6
1966: I . . . .
II...
III..
IV 2.
108.2
109.3
110.3
111.2
110.9
112.1
113.1
113.6
139.6
142.7
143.1
144.2
122.2
123.1
123.8
124.5
117.8
119.2
119.0
119.3
129.4
129.7
130.1
130.7
123
128
126
126
121.4
123.8
124.2
125.0
1964: I . . . .
1
Eleven month average except United States. 2 For other than United States, data are averages of October and November.
Sources: Department of Labor and Organization for Economic Cooperation and Development.
314
U.S. GOVERNMENT PRINTING OFFICE: 1967
O—240-782
@FedFRASER