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Economic Report
of the President

Transmitted to the Congress
January 1979
TOGETHER WITH

THE ANNUAL REPORT
OF THE

COUNCIL OF ECONOMIC ADVISERS

UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON

:

1979

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402




Stock Number 040-000-00399-1




CONTENTS
Page

ECONOMIC REPORT OF THE PRESIDENT

1

ANNUAL REPORT OF THE COUNCIL OF ECONOMIC
ADVISERS*

17

CHAPTER 1. PROGRESS AND PROBLEMS IN 1978

25

CHAPTER 2. REDUCING INFLATION

54

CHAPTER 3. T H E ECONOMIC OUTLOOK

92

CHAPTER 4. T H E WORLD ECONOMY—MANAGING INTERDEPENDENCE .

135

APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1978
APPENDIX B. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND PRODUCTION
*For a detailed table of contents of the Council's Report, see page 27.




(HI)

163
177







ECONOMIC REPORT
OF THE PRESIDENT




ECONOMIC REPORT OF THE PRESIDENT
To the Congress of the United States:
Two years ago when I took office our economy was still struggling to
recover from the deep recession of 1974-75. Unemployment was widespread, and a substantial part of our industrial capacity stood idle.
Today 7 million more Americans are at work, and factories across the
country have regained high levels of output. Family incomes, after adjustment for inflation, have risen handsomely and so have business profits.
The task now confronting us is to manage an economy operating at
close to its capacity—to sustain prosperity and extend its benefits more
widely among our citizens.
Under the best circumstances, designing economic policies to carry out
that task calls for restraint and careful choices. Developing such policies
has been made more complex by the acceleration of inflation last year
and the declining growth of productivity that was partly responsible for
it.
My economic and budgetary program deals forthrightly with the economic realities we face today. It is based on four principles.
First, reducing inflation must be our top economic priority. Inflation
endangers the gains in employment and income that we have made during the past 2 years. We must act forcefully and effectively to combat inflation, and we must persist until the battle is won.
Second, government must do its job better. Reducing inflation will
require budgetary austerity and moderation of economic growth. With
productivity growth at a low ebb, living standards will not rise as fast as
they have in the past 2 years. In such a climate, waste, inefficiency, or misplaced priorities are particularly intolerable. It is now more essential
than ever that our government, in both its budgetary and regulatory
programs, make the best use of the resources at its disposal and seek
better, less costly means to achieve our national objectives.
Third, we will not reduce inflation at the expense of the most vulnerable members of our society—the poor, the elderly, and those who have
difficulty finding jobs even in a high-employment economy. Ours is a
compassionate Nation, dedicated to a sense of fairness. We will not lose
sight of those who most need our help.




Fourth, our policies must reflect the fact that the United States is a
very important part of a closely related world economy. We will continue to pursue domestic policies and undertake other actions as necessary and appropriate to foster a strong and stable dollar, and we will
join with other countries to promote an open and growing world
economy.
In the months ahead, I will work closely with the Congress to ensure
that the policies adopted by this government are consistent with these
four precepts. The budget for 1980 must be very tight, and I intend to
make sure that a fiscal policy of firm and measured restraint is maintained. But the budget must continue and strengthen our most essential
programs, and I have supported such programs strongly. In order to
further the fight against inflation, I will seek prompt adoption of my real
wage insurance program and my proposals for hospital cost containment
and regulatory reform.
I will continue to seek the cooperation and support of the American
people in the fight against inflation. Last October, I proposed to the
Nation a program of price and pay standards designed to brake the
price-wage spiral that has beset our economy for more than a decade.
This program has received substantial support from the American
people, and I will make every effort to enlist the broadest possible cooperation with it in the year to come.
The pay and price standards ask every American to exercise restraint.
Every American should therefore expect the government to ensure that
its own actions will contribute to, not undermine, the voluntary effort
to reduce inflation. Steadfast pursuit of fiscal and monetary discipline
and limits on the inflationary impacts of other government actions are
crucial to the success of the anti-inflation program. Together, the actions
of government and the private sector can lay a new foundation for a durable prosperity.
Progress and Problems in 1978
Among my first actions in office were steps to strengthen economic
growth and speed the return to a high-employment economy. Those
actions paid generous dividends. In 1977 our rate of economic growth
increased by nearly a full percentage point over the prior year, and in
1978 the Nation's output of goods and services advanced by a healthy
4 J4 percent. Today our Nation is using its industrial capacity more fully
than a year ago.
Last year 3 million new jobs were created. A larger proportion of
our people is at work now than at any other time in our history. Gains




in employment during the past 2 years have been especially strong
among women and members of minority groups.
Unemployment declined to less than 6 percent of the labor force during 1978. Nearly l/2-million fewer Americans were unemployed in December 1978 than 2 years earlier. Unemployment among minority
groups has also begun to decline from the very high levels that persisted
earlier in the recovery, but these groups still bear a disproportionate
share of the burden of unemployment.
Gains in employment and output produced strongly rising incomes
for most Americans during 1978. Disposable personal income, adjusted
for inflation, rose by more than 3 percent over the 4 quarters of last year.
The income of our country's farmers, which was severely depressed in
1976 and 1977, showed a marked recovery.
Business profits rose more than 10 percent in 1978, thereby promoting
conditions for the continued growth in investment needed for productivity
improvement and healthy economic expansion. Business investment in
new plant and equipment also strengthened in 1978, raising the proportion of our national output devoted to capital formation to the
highest level in 4 years.
On most counts, the prosperity of our Nation rests on a solid base.
Our economy at the end of last year was still growing strongly. The
momentum of expansion will be sustained early this year by the reductions in taxes on individual incomes and corporate profits that were provided in the Revenue Act of 1978. Last year, as in the earlier years of the
recovery, the process of economic expansion remained relatively well
balanced. Business inventories are lean. Industrial firms and financial institutions are in good financial condition. Shortages and speculative buying generally are absent. But inflation does pose a serious threat to the
Nation's continued economic health. If we make progress in reducing
inflation, the prospects are good for a successful transition from a period
of economic recovery to a period of moderate but sustained growth.
For more than 10 years, our country, like many other nations, has
faced stubborn inflation. During the course of 1978 our inflation problem worsened. Consumer prices rose by about 9 percent, a large
acceleration from the 6% percent rate of inflation in 1977. Increases in
wages also were larger and, since productivity gains declined sharply,
costs of production moved up much more strongly.
The anti-inflation effort was given top priority in 1978. In May, I recommended that the Congress reduce by $5 billion and delay 3 months
the tax cut that had been proposed earlier. In October, I set forth a strong




and comprehensive program to combat inflation. Shortly thereafter, in
cooperation with other countries, the Nation undertook a series of measures to strengthen the dollar abroad and further contribute to a reduction of inflation at home.
Inflation in 1978
Rising inflation last year stemmed from several sources. Cold winter
weather affected food supplies and prices. Depreciation of the dollar in
foreign exchange markets added to prices of imports and to prices of
goods produced by U.S. firms that compete with imported products.
Costs of land and building materials were driven up by exuberant demands for new homes, and the rise of mortgage interest rates added to
the costs of buying a home. At the same time, the cumulative effects
of government legislation and regulation over recent years gave further
impetus to cost pressures.
A large part of the worsening of inflation last year, however, stemmed
from poor productivity. Over the past decade or more, the rate of growth
in our productivity has been slowing. In late 1977 and throughout 1978,
the slowdown in productivity growth reached serious proportions. Last
year the productivity of our economy increased by less than 1 percent.
The reasons for the weakening of productivity growth in our country,
especially its poor performance last year, are complex and are not fully
understood. But the consequences are well known. With slower productivity growth, our living standards individually and as a Nation cannot
rise as fast. Slower productivity growth means that the resources available for carrying out governmental programs become scarcer. It means
that large increases in wages and other incomes put greater upward
pressure on costs and prices. If we ignore the realities of slower productivity growth—if governments continue to press forwaid with unabated
claims on resources, and private citizens continue to demand large gains
in money incomes—our inflationary problem will worsen.
Dealing with Inflation
Inflation injures every person in our country. It means that paychecks
do not go as far as they once did. It means that savings accumulated for
retirement or for a child's education become inadequate. Many poor and
elderly persons see prices they pay for food, shelter, and heat rise rapidly
while their incomes rise slowly or not at all. These problems are so acute
that they demand an all-out effort to reduce inflation. Yet rising prices
and costs have additional and very serious effects on our economy as a
whole.




Inflation drives up interest rates. It undermines the competitiveness of
our industries and the value of our dollar abroad. Confidence of businesses in the future is reduced and investment plans are upset. Consumers3 confidence in their own future is sapped. Sooner or later, these effects
of inflation will undermine the basis for economic expansion and make
sustained prosperity impossible.
Finally, the corrosive effects of inflation eat away at the ties that bind
us together as a people. One of the major tasks of a democratic government is to maintain conditions in which its citizens have a sense of command over their own destiny. During an inflation individuals watch in
frustration as the value of last week's pay increase or last month's larger
social security check is steadily eroded over the remainder of the year by
a process that is beyond their individual control. All of us have to plan
for the future when we lend or borrow, save for a child's education, change
a job, buy a home, or choose a career. The future is uncertain enough
in any event, and the outcome of our plans is never fully within our own
control. When the value of the measuring rod with which we do our
planning—the purchasing power of the dollar—is subject to large and
unpredictable shrinkage, one more element of command over our own
future slips away. It is small wonder that trust in government and in social
institutions is simultaneously eroded.
It is for all of these reasons that reducing inflation must now be the
primary concern of economic policy.
Policies to Control Inflation
Firm, sustained and carefully appliedfiscaland monetary restraint must
be the first element in our effort to reduce inflation. We have entered
a period in which the high rate of economic growth that we experienced
when the margin of unused resources was larger no longer is appropriate.
We will apply the needed restraint and stick with it.
We will not try to wring inflation out of our economic system by pursuing policies designed to bring about a recession. That course of action
would be unfair. It would put the heaviest burden of fighting inflation
on those who can least afford to bear it. It also would be ineffective.
Twice in the past decade inflation has accelerated and a recession has
followed, but each recession brought only limited relief from inflation.
The underlying pressures behind rising prices and costs continued to be
strong, and inflation eventually accelerated again when recovery began.
Stop-and-go policies do not work. A successful anti-inflation program
must be durable to deal with a long-run inflation problem. Our program
meets that test.




When I announced my anti-inflation initiatives last October, I pledged
to pursue a restrained budgetary policy in fiscal year 1980. I have kept
that pledge. The central element of my fiscal program is tight control
over Federal spending:
• Growth in Federal spending will be curtailed. As in 1979, Federal outlays in the next fiscal year will increase in real terms by
significantly less than 1 percent.
• The share of the Nation's output accounted for by Federal spending will be reduced to about 21 percent in fiscal 1980, a full year
ahead of the schedule that I had earlier announced.
Restricted growth in Federal spending, combined with the revenues
yielded by a moderately growing economy, will reduce the budget deficit
to $29 billion in fiscal 1980, less than half its size in the year before I
took office. This course of fiscal policy will exert the measured restraint
that is needed. Excessive demands upon the Nation's resources will be
avoided. Growth in economic activity will slow to a little below the rise
in the Nation's economic potential.
These measures of fiscal policy are being complemented by firm and
careful monetary restraint on the part of the Federal Reserve Board. In
this way, monetary and fiscal policy are supporting each other to combat
inflationary pressures and foster a healthy and stable economy.
Other Governmental Actions
I am taking other steps to reduce the inflationary effects of government actions. I have directed the agencies of the executive branch to pay
special attention to ensuring that the regulations they issue do not impose unnecessary burdens on the public, and I shall continue the efforts
that got under way in 1978 to improve the regulatory process.
Last year the deregulation of the airline industry brought American
consumers the benefits of substantially lower prices and better service.
This year I intend to seek congressional approval of legislation to increase
the role of competitive forces in the trucking and railroad industries. I
will submit to the Congress legislation to reform the process by which
regulations are developed by Federal agencies, and to increase the emphasis on a careful balancing of costs and benefits. And I am taking steps
to reduce the burden of paperwork imposed by the government on the
private sector.
Government must set a clear example in the fight against inflation.
For that reason, I ordered last year that the rate of pay increase for Federal workers be held to 5.5 percent and that sharp limitations be imposed
on new Federal hiring.




8

Although these actions by government will not, by themselves, bring
inflation to an end, they are indispensable. They can create an environment that encourages voluntary cooperation with the pay and price standards. Without restraint by government, the pressures of an overheated
economy easily could render meaningless the best efforts of businesses and
workers to reduce price and wage increases. However, it will take broad
cooperation from the private sector if the voluntary effort is to succeed
in reducing inflation.
Voluntary Wage and Price Standards
The voluntary wage and price standards call for an average rate of
pay increase of 7 percent or less this year. I also have asked
businesses to hold their average rate of price increase to at least one-half
percentage point below the average rate of increase in 1976-77. Where
such price deceleration is not possible, the standards provide for limitations on profit margins.
To meet these standards, both workers and businesses must exercise
restraint. But they are fair and flexible standards. If they are widely observed, as I believe they will be, we can reverse the momentum of the
price-wage cycle and gradually bring down the rate of inflation.
I recognize that cooperation with this program entails uncertainties
for workers who comply with the wage standards. They may lose if
others do not comply, or if forces beyond anyone's control cause prices
to rise unexpectedly. In order to provide them some assurance that those
who cooperate will not suffer as a result, and thus to motivate wider
observance of the standards, I have proposed to the Congress
a program of real wage insurance. Under this program, if inflation increases by more than 7 percent this year, groups of workers that meet
the 7 percent pay standard will receive a tax credit at a rate equal to the
difference between the actual inflation rate and 7 percent. This credit
will insure workers' real wages over a range of inflation as high as 10
percent this year, far higher than is expected to occur.
The elements of my anti-inflation program are mutually supportive
and designed to mount a sustainable attack on our long-run inflation
problem. Voluntary cooperation with the pay and price standards is
essential to reversing the momentum of inflation. Government needs to
take strong action to avoid contributing to inflationary pressures in order
to ensure that the benefits of voluntary restraint are fully realized. Together, these policies offer our best opportunity to win the fight against
inflation.




Outlook for 1979
My anti-inflation program will support the health of our economy in
1979 in two respects. First, the rate of inflation should slow this year—
to about 7 */2 percent over the year as a whole, and to somewhat below
7 percent by the end of the year. Second, moderation of inflation will
help us avoid a recession and improve the prospects for sustained economic growth in 1980 and beyond.
Over the 4 quarters of 1979, the Nation's output should rise by about
2*4 percent, somewhat less than the economy's potential growth. This
should create an economic climate in which the wage and price standards
have good propects for success. The labor force will continue to expand
strongly and most new workers will find jobs.
Further progress in reducing inflation can be expected in 1980 as the
effects of the anti-inflation program begin to cumulate. Moderate growth
in the year ahead, combined with substantial progress against inflation, will lay the basis for an enduring prosperity.
In the years beyond 1980, as we are successful in containing the growth
in Federal spending and bringing down the rate of inflation, we can look
toward reductions in Federal taxes. Rising real income and inflation,
even at a reduced pace, push taxpayers into higher tax brackets and
thereby raise the average effective tax rate. Both to sustain economic
growth and to relieve citizens from unwarranted tax burdens, tax reductions will, from time to time, be highly desirable.
It would be unwise—and, indeed, very dangerous—to commit ourselves now to any mechanical formula for future reductions. No such
formula will pass the test of budgetary responsibility. Our knowledge of
future economic conditions and developments affecting the rate of
inflation is too limited to make such decisions at this time. There is simply
no substitute for the difficult process of matching our overall budgetary
policies year by year to the economic requirements of the Nation.
Policies to Meet the Nation's Needs
In a period when the overall growth of budgetary resources must
be tightly restrained, budget decisions take on special importance. Some
real growth in our defense budget is essential to meet our national security
needs and keep our international commitments in the face of the growing military strength of our potential adversaries.
Within the domestic budget I have given special priority to the needs
of the poor and the disadvantaged. I have recommended substantial
funding for programs that address their needs for assistance in




10

health care, education, employment and training, and basic subsistence.
The 1980 budget directs the resources of those programs more carefully
toward those most in need. Similarly I have sought to maintain and, in
some cases, expand the assistance provided to our financially troubled
cities and counties. I have paid particular attention to the need to move
ahead with the development of alternative energy sources, including solar
energy, and to spur basic research and development, which has been
lagging in our country.
We cannot be satisfied with the condition of our economy while many
of our disadvantaged citizens, especially among minorities, are unable to
find work even in periods of prosperity. In 1978, the Congress enacted
with my support the Full Employment and Balanced Growth Act. That
act restates and amplifies the responsibilities of economic policy that have
faced our Nation in recent decades. The act challenges us to provide the
fullest possible opportunities for useful employment, to rely on the private
sector as the principal provider of jobs, and to create an environment
of price stability that will make it possible to sustain prosperity. These
are very ambitious goals that challenge us as a Nation to set our sights
high. The act also establishes important new procedures for moving
toward the realization of full employment and price stability.
Neither can we rest while large numbers of Americans still live in
poverty. This Nation has made a concerted effort to provide for those
in our society who are in need. We have assisted the poor to acquire the
basic necessities of life. We have taken steps to assure adequate incomes
and medical care for the elderly. And we have helped to assure better
health care, nutrition, and education for the young. My budget for 1980
continues to respond to the challenge that poverty sets before our Nation.
Each of these challenges calls for action by the government. In a
period of inflation, however, our ability to act is limited. We cannot do
everything, but we must do what we can and do it well. That is the
framework within which I have constructed my budgetary program for
1979 and 1980. This budget provides a carefully balanced spending plan
which will ensure that the activities of the Federal Government are well
administered and effective, and that we continue to respond to the important needs of the country.
My 1980 budget provides important building blocks for the future in
many areas:
• Health programs, which I have expanded substantially during my
first 2 years in office, will be maintained at those levels and in some
cases increased. In addition, consistent with the development of a




11

National Health Plan, new resources have been provided for the
Child Health Assessment Program, which will extend Medicaid
benefits to over 2 million low-income children. Funds have also been
provided for extending Medicaid coverage to 100,000 low-income
pregnant women not now eligible.
• Authority for new spending for education is maintained at the level
that I provided in my budget last year. This program will support
spending nearly 20 percent greater, in real terms, than 2 years ago.
• Publicly assisted housing will be provided through subsidies for
325,000 new units for families with low or moderate incomes.
• Job-related programs will include funds that will support an average
of 546,000 public service jobs, phasing down to 467,000 jobs by the
end of 1980. These jobs have been targeted more tightly to serve the
structurally unemployed. Another 424,000 training opportunities
also will be provided for the structurally unemployed. Programs to
provide employment and training opportunities for youths remain
a high priority. More private sector job opportunities will be made
available through the new private sector initiative and the targeted
employment tax credit.
• A welfare reform program, to take effect in 1982, will expand aid
to families with dependent children, increase the earned income tax
credit for low-wage workers, substantially improve employment opportunities for the Nation's neediest citizens, and provide fiscal
relief to State and local governments with severe welfare burdens.
Important reforms in the administration of the program will make
America's welfare system easier to operate.
• Aid to our cities and counties will continue to be provided through
revenue sharing, community development block grants, urban mass
transit assistance, and urban development action grants. My budget
provides new resources for the National Development Bank and
requests funding in fiscal 1979 and 1980 for a new program of
special fiscal assistance to cities and counties with severe unemployment problems.
This spending program provides for our Nation's vital needs, while
remaining within the constraints required by today's inflationary
economy.
The International Economy
Developments last year reminded us once again of the interdependence
of our economy and those of other nations around the world. Our trading
partners are looking at our ability to deal with our economic problems at
home as an indicator of the strength and leadership they can expect from
the United States. We will not disappoint them.




12

Nineteen hundred and seventy-eight was a year of significant progress
in the world economy. Real output began to pick up in industrial countries other than the United States. Important initiatives in the international arena occurred in trade policy, in balance of payments adjustment, and in financial markets—all influenced by the cooperation
shown at the Bonn Summit.
Late 1978 and early 1979 will mark the culmination of the Tokyo
round of Multilateral Trade Negotiations. These historic negotiations—
which began in 1975 and were intensified in 1977—should lead to the
first comprehensive overhaul of the rules of international trade since the
1960s.
The need for a revamping of the trading system is clear. Our large
foreign trade deficit stems in part from a loss of American vitality in
world markets. But it has also resulted from the tariff and nontariff
barriers of our trading partners. Over the coming years, under a final
multilateral trade agreement, barriers at home and abroad will be reciprocally dismantled.
During 1979 I will be working closely with the Congress to adopt
the final multilateral trade agreement, along with implementing legislation, that will foster robust export growth and free and fair competition
in world trade under rules that are both equitable and economically
sensible. These measures will provide a framework for trade that will
enhance our living standards in the decade to come.
In recent years, the United States has had a serious balance of payments deficit. Our imports surged as we grew rapidly and drew heavily
on imported oil. Our exports lagged because of slow economic growth
abroad. These factors contributed to a trade deficit rising from about
$10 billion in 1976 to an annual rate of almost $45 billion in early
1978. As a result of the sharp increase in our external deficit and the
acceleration of inflation in the United States, the value of the dollar in
foreign exchange markets fell substantially last year.
We have taken important steps to correct the deficit:
• In late 1978, Congress enacted the National Energy Act, the first
comprehensive legislation for dealing with our energy problems.
The effect will be to reduce our oil imports in 1985 by 2.5 million
barrels per day.
• In 1978, I announced the first phase of a National Export Policy.
By setting up a framework to increase support for exports and reduce disincentives to export, we can begin to increase our share of
world commerce. Fundamental improvement in our trade position
is critical to a healthy dollar.
13
278-216 O - 79 - 2




• A strong and effective anti-inflation program has been put into
place. An integral part of that program consists of monetary and
fiscal policies that will moderate the rate of economic expansion.
These actions will help reduce our large foreign trade deficit.
These policies were beginning to bear fruit by the end of 1978. Exports today are growing more rapidly than the domestic economy. The
merchandise trade deficit declined from a $38-billion annual rate in the
first half of last year to about $32 billion in the latter half of the year. Narrowing of the deficit should continue and we foresee a marked improvement in the more comprehensive current account measure.
Nineteen hundred and seventy-eight was also a year of unusual instability in international financial markets. In the fall, movements in
the exchange value of the dollar became very disorderly, and its decline
became clearly excessive.
On November 1, I announced a series of steps to restore order to the
foreign exchange markets and to correct the excessive decline of the
dollar. Up to $30 billion in foreign exchange resources were assembled
by the United States, to be used in coordination with other countries
utilizing their own resources, to protect the dollar's value in currency
markets. Domestic interest rates were raised significantly to help reduce
inflation and strengthen the dollar in exchange markets. And the United
States underlined its commitment to deal with its inflation problem and
strengthen its underlying economic position.
These actions have improved the tone of the exchange markets and
contributed to a rise in the value of the dollar. More importantly for
the longer term, they are helping to create more stable conditions in the
exchange markets, in which the value of the dollar can better reflect the
fundamental strength of the U.S. economy.
Progress also was made in 1978 in achieving closer economic cooperation among the leading industrial nations. I met in Bonn with the leaders
of the six major industrial countries to discuss major economic problems
facing us. Out of this came a concerted action program to restore greater
balance and confidence in the international economy and in world financial markets. Together, we took the necessary steps to achieve those
ends—the United States committed itself to combat inflation and reduce
oil imports, Germany and Japan to increase growth and reduce trade
surpluses, others to take measures on trade or inflation. Only through
continued economic cooperation and sound policies can we attain the
goal of full employment and price stability that is our ultimate objective.




14

Building for the Future
During this coming year, we as a Nation have an opportunity to
strengthen our economy and lay the basis for continuing prosperity. The
gains of the last 2 years have been notable. We have made great progress
at home in recovering from the recession, and we have strengthened the
stature of the United States in the world economy. In the year ahead, we
can secure and extend those gains by working together to moderate inflation. I am confident that we will rise to the challenge.

January 25, 1979




15




THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS







LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,

Washington, D.C., January 24,1979.
MR. PRESIDENT:

The Council of Economic Advisers herewith submits its 1979 Annual
Report in accordance with the provisions of the Employment Act of 1946 as
amended by the Full Employment and Balanced Grbwth Act of 1978.
Cordially,




Charles L. Schultze
Chairman

Lyle E. Gramley

William Nordhaus

19




CONTENTS
Page
25

CHAPTER 1. PROGRESS AND PROBLEMS IN 1978

An Overview of the Year
The Major Sectors of Aggregate Demand in 1978
Personal Consumption Expenditures
Housing
Business Fixed Investment
Net Exports
Inventory Accumulation
Government Spending
Labor Market Developments
Prices and Wages in 1978
Food Prices in 1978
Depreciation of the Dollar
Housing Costs
Medical Care
Aggregate Demand Management in 1978
Fiscal Policy
Monetary Policy
Credit Flows in 1978
CHAPTER 2. REDUCING INFLATION

54

The 1978 Acceleration of Inflation
Inflation in 1978
Explaining the 1978 Inflation
Causes of Wage Acceleration
The Productivity Slowdown
Potential GNP
Economic Policy in an Inflationary Environment
Aggregate Demand Policy
Standards for Wage and Price Behavior
Regulatory Policy
CHAPTER 3. T H E ECONOMIC OUTLOOK

The Economy in 1979 and 1980.
Fiscal Policy for 1979 and 1980
Monetary Policy
The Economic Forecast
Price and Wage Developments




.

25
29
29
31
32
33
34
34
36
38
40
42
43
45
45
46
48
52

21

54
56
58
66
67
72
76
77
80
85
92

92
93
94
97
104

CHAPTER 3. THE ECONOMIC OUTLOOK—Continued

Economic Objectives and Policy for the Longer Run
The Humphrey-Hawkins Act
Goals for the Economy to 1983
Requirements to Achieve the Economic Goals
Attaining the Goals for Unemployment and Inflation....
Summary
Investment Policy Report
Postwar Trends in Investment and Capital Formation. . .
Investment Incentives
Research and Development
The Supply of Investment Capital
Small Businesses
CHAPTER 4. THE WORLD ECONOMY—MANAGING INTERDEPENDENCE.

The Global Economy: Developments and Prospects
Growth and Inflation
Prospects
Current Account Developments and Prospects
International Financial Developments
The Operation of Flexible Exchange Rates
Important 1978 Developments
The November 1 Initiative
The European Monetary System
The Changing Environment of World Trade
The Multilateral Trade Negotiations
U.S. Domestic Trade Policy
The National Export Policy

Page

106
107
108
110
117
123
124
124
127
132
132
134
135

137
139
143
143
147
148
153
155
156
157
158
160
160

APPENDIXES:

A. Report to the President on the Activities of the Council
of Economic Advisers During 1978
B. Statistical Tables Relating to Income, Employment, and
Production
List of Tables and Charts
Tables
1. Shares of National Income, 1959-78
2. Growth in the Major Components of Real Gross National
Product, 1975-78
3. Changes in Real Business Fixed Investment, 1975-78
4. Unemployment Rate and Growth in Employment and Labor
Force, by Demographic Group, 1978
5. Alternative Measures of Inflation, 1976-78
6. Measures of Wage Rates and Costs, 1973-78
7. Changes in Prices, Costs, and Profits, Per Unit of Output,
Private Nonfinancial Corporate Sector, 1973-78




22

163
177

27
29
32
38
39
39
40

List of Tables and Charts—Continued
Tables

Page

8. Changes in Retail Food Prices, 1977-78
9. Changes in Currency Values and Consumer Prices, by Country,
Third Quarter 1977 to Third Quarter 1978
10. Actual and High-Employment Federal Receipts and Expenditures, National Income and Product Accounts, Calendar Years 1973-78
11. Federal Unified Budget Outlays as Percent of Gross National
Product, and Budget Surplus or Deficit, Fiscal Years 1955-80.
12. Annual Rate of Change in Selected Consumer and Producer
Prices and Employment Costs, 1960-78
13. Selected Measures of the Rate of Wage Increase, Private
Nonfarm Economy, 1976-78
14. Mean Wage and Benefit Adjustments in Major Collective
Bargaining Agreements, 1976-78
15. Labor Productivity Growth, 1948-78
16. Productivity Growth by Industry, 1950-77
17. Potential Gross National Product and Benchmark Unemployment Rate, 1973-78
18. Estimated Annual Budgetary Cost of Real Wage Insurance
Proposal
19. Cyclical Contractions in Mortgage Credit and Housing Starts,
1959-74
20. Growth in Deposits, 1977-78
21. Economic Outlook for 1979
22. Economic Goals, 1979-83
23. Net Saving by Sector, 1973 and 1975
24. Federal Unified Budget Receipts and Outlays Under Current
Policy Budget, Fiscal Years 1979-83
25. Private Net Saving and Investment and the Unemployment
Rate, 1952-80
26. Saving Rate and Population Growth, by Age of Household
Head
27. Selected Unemployment Rates, Fourth Quarter 1972 and
Fourth Quarter 1978
28. Real Nonresidential Fixed Investment as Percent of Real
Gross Domestic Product, 1966-76
29. Capital Expenditures by Business for Pollution Abatement, by
Industry, 1976-78
30. Determinants of Business Fixed Investment, 1955-78
31. Annual Growth in Real GNP in the United States and Other
Major Industrial Countries, 1960-79
32. Annual Growth in Real GNP in Major Industrial Countries,
1960-78




23

40
43

46
48
56
61
62
68
71
75
84
95
96
97
109
112
114
115
116
118
126
127
128
139
139

List of Tables and Charts—Continued
Tables

Page

33. Annual Growth in GNP Per Employed Worker in Major
Industrial Countries, 1964-78
34. Changes in Consumer Prices in Major Industrial Countries,
1976-78
35. World Current Account Balance, 1975-78
36. Current Account Balances for Selected Major Industrial
Countries, 1976-78

140
141
144
145

Charts

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Selected Interest Rates and Bond Yields
Unit Labor Costs and Deflator, Nonfarm Business
Capacity Utilization Rates
Unfilled Orders-Shipments Ratio, Durable Goods Manufacturing
Selected Unemployment Rates
New Hire and Quit Rates in Manufacturing
Actual and Potential Gross National Product
Real Nonresidential Fixed Investment as Percent of Real
GNP
Unemployment in the U.S. and Five Major Industrial
Countries
Consumer Price Inflation Rate in the U.S. and Six Major
Industrial Countries
Weighted-Average Exchange Value of the U.S. Dollar
Monthly Average of Daily Exchange Rate Changes
U.S. Share of Fifteen Industrial Countries' Exports of Manufactured Goods




24

49
57
59
60
64
65
75
125
137
138
151
153
161

CHAPTER 1

Progress and Problems in 1978

T

HE U.S. ECONOMY LAST YEAR maintained substantial momentum in its fourth year of expansion. Output and employment rose and
unemployment fell. But the year was marred by a serious acceleration in the
rate of inflation and a decline in the value of the dollar that was sharper than
fundamental economic conditions warranted. Although economic growth
slowed from 5yi percent over the 4 quarters of 1977 to 4% percent during
1978, real income rose in all sectors, and all demographic groups experienced
employment gains. A reasonable balance was maintained among sectors of
real spending. Business fixed investment grew vigorously and residential construction remained strong despite sharply rising interest rates.
During the years immediately preceding 1978, the rapid growth associated with economic recovery had absorbed many of the capital and labor
resources idled by the 1974-75 recession. Thus it became appropriate that
growth should slow to a pace more in line with the long-term potential of
the economy. The decline in the growth rate during 1978 was the first step
in that transition.
Much remains to be done to provide adequate employment opportunities for those who cannot find jobs even in a high-employment economy.
This task cannot be accomplished solely through aggregate demand policy,
however, without risking further acceleration of inflation. Aggregate demand management must now aim at a more moderate rate of economic
expansion to combat inflation while structural measures are developed to
attack remaining pockets of unemployment.
AN OVERVIEW OF THE YEAR
The quarterly pattern of growth during the year was once again uneven.
Unusually severe winter weather and a major strike in coal mining reduced
output growth to zero in the first quarter. Both consumer spending and
construction activity were curtailed by the adverse weather. In the second
quarter, both of these sectors rebounded strongly, and virtually all of the
sales and production lost in the first quarter were regained. Taking a 2quarter average, real gross national product (GNP) rose at a 4*4 percent
annual rate in the first half of the year. In the second half of the year,
there was again substantial disparity between the 2 quarters. Growth slowed




25

in the third quarter and accelerated in the final quarter. Over the 2 quarters
together the annual rate of growth of real GNP averaged 4}4 percent, the
same as for the first half.
The increase in employment over the 4 quarters of last year was slightly
less than in 1977—3.3 million compared to 3.9 million. It remained very
large by historical standards, however, as the growth of productivity slowed
significantly. The unemployment rate continued the marked decline begun
in the latter part of 1977, falling from 6.6 percent in the fourth quarter of
1977 to 5.8 percent by the final quarter of 1978.
All sectors achieved further increases in real income in 1978. Aside from
the farm sector, however, the gains were more modest than in the previous
3 years of stronger fiscal stimulus and rapid recovery in real output. The
growth of real per capita disposable income, for example, slowed from 4.6
percent in 1977—a year when personal income taxes were reduced—to 2.5
percent over the 4 quarters of 1978. During the 3 years since the first year of
cyclical recovery from the 1974-75 recession, the growth rate has averaged
3.2 percent, slightly above the 2/2 percent trend for the two decades from
1953 through 1973. Corporate profits, in 1972 dollars, rose moderately further in 1978, following larger gains earlier in the recovery. Rising capacity
utilization has lifted real profits at an average annual rate of 18 percent since
the cyclical low in 1975. Both the rise in capacity utilization and the improvement in profitability helped to spur a recovery of business capital investment
to a 10 percent share of GNP.
Farm income is, of course, less sensitive to fluctuations in overall economic growth but very sensitive to other factors such as weather, foreign
demand, and agricultural policy. Farm income rose to an exceptionally
high peak in 1973-74 from which it drifted down until 1977. A sharp
recovery occurred last year, with farm proprietors' income reaching $25.1
billion for the year as a whole (national income and product accounts basis).
In 1972 dollars, farm income in 1978 was $16.5 billion, or 14 percent higher
than a year earlier.
The division of income among employee compensation and other shares
has remained relatively constant during the most recent 3 years of expansion, as shown in Table 1. The share received by employees as wages
and fringe benefits has risen slightly from the earlier part of the decade
and is up substantially from the 1960s. The corporate profits share has
improved significantly from recession lows although it remains well below
the high level of the preceding decade.
One of the most discouraging developments of 1978 was the very slow
growth of productivity. Output per hour in the private nonfarm business
sector grew by only three-fourths of 1 percent during the year. (The reasons
are explored in Chapter 2.) Weakness in productivity growth did much to
exacerbate inflation. Since increases in nominal wage costs were offset to a
lesser degree by productivity gains, unit labor costs rose more rapidly than
was anticipated, and prices were pushed up faster. Furthermore, labor de-




26

TABLE 1.—Shares of national income, 1959-78
[Percent]
1959-68
average

1969-73
average

1974-78
average '

71.2

75.3

76.5

76.3

Farm

2.3

2.0

1.6

1.4

1.3

1.5

Nonfarm

8.1

6.2

5.2

5.2

5.2

5.2

Corporate profits2

12.3

9.4

8.8

9.3

9.5

9.4

7.9

7.8

7.6

Item

Compensation of employees.

1976

1977
76.1

19781
76.4

Proprietors' income:2

Other'

6.1

7.0

7.9

1

Preliminary.
With inventory valuation and capital consumption adjustments.
* Rental income of perscns (with capital consumption adjustment) and net interest.
Note.—Detail may not add to 100 percent because of rounding.
Source: Department of Commerce, Bureau of Economic Analysis.

2

mand strengthened more rapidly than it would have done if productivity
growth had been better, and this may have been a factor in the acceleration
in hourly earnings early in the year.
Unlike earlier years of the recovery, when price indexes excluding food
and energy rose at a fairly steady rate of around 6 to 6^4 percent, 1978 witnessed a pervasive acceleration of prices and labor compensation. Compensation per hour in the fourth quarter of last year was almost 10 percent higher than a year earlier, in contrast to the 8 to 8/ 2 percent rate of increase during the preceding 3 years. And price increases were larger in 1978
than in earlier years for almost all categories of goods and services. The GNP
deflator increased 8.3 percent over the 4 quarters of 1978, compared to 6.1
percent in 1977. The consumer price index (GPI) rose by 9.2 percent over
the 12 months ending in November compared with 6.8 percent in 1977. This
more rapid rise of prices, especially consumer prices, was attribuable not only
to poor productivity performance but also to adverse developments in particular markets.
Food prices rose sharply, since supplies of red meats were even more limited than had been expected and adverse weather damaged fruit and
vegetable crops. Moreover, the substantial depreciation of the dollar in international exchange markets was accompanied by higher prices of imports and
of competing domestic products.
In view of the worsening of inflation, the Administration in May postponed the effective date for its proposed tax reduction from October 1978
to January 1979 and reduced the proposed cut from $25 billion to about
$20 billion. Growth in Federal outlays was also slower than had been estimated. For fiscal 1978, unified budget outlays were $12% billion below the
estimate contained in last January's budget, and the estimate for fiscal 1979
has been revised down by $7.6 billion. Real purchases of goods and services
by all levels of government rose 2 percent over the 4 quarters of 1978, in contrast to the 3^4 to 4 *4 percent that had been anticipated at this time last year.




27

Both domestic and international conditions in 1978 also prompted a more
restrictive monetary policy. The Federal funds rate increased from 6J4 percent to about 10 percent during the year. Other short-term interest rates
rose commensurately. As is typical, long-term rates rose less than those on
short-term securities.
Tightening fiscal and monetary policies were one cause of the slower
economic growth in 1978 than in 1977. The postponement of the tax cut and
slower growth of Federal purchases contributed to a more moderate rise in
consumer incomes and expenditures during 1978 than had been foreseen a
year earlier. The inflation itself also played a part in slowing growth. Increases in food and import prices siphoned purchasing power away from most
domestic consumers.
The largest single reason for the slower growth in 1978 than in 1977 was
the leveling out of residential construction after a prolonged rise in housing
starts beginning early in 1975. This leveling may have been partly the result
of the increased restraint that developed in financial markets over the year.
The more important influences were probably a filling of backlogs of demand
and the fact that the home-building industry was operating at nearly full
capacity.
The economy at the end of 1978 still showed substantial momentum, but
the serious inflation problem and its interaction with the international value
of the dollar have created a marked degree of uncertainty. Nominal interest
rates are approaching historically high levels, to some extent as a result of the
necessary steps taken at the beginning of November as part of the dollar support package. Financial restraint has not yet had significant adverse effects
on spending, but it is difficult to predict how consumers and businesses will
respond to rising interest rates in the current environment. Furthermore, the
continuation of inflation casts a shadow on the economic horizon. Compliance with the anti-inflation program announced by the President in October is fundamental to maintaining a strong economy. This program is
discussed in detail in Chapter 2.
If success is achieved in containing inflation this year, the prospects are
favorable for maintaining a satisfactory growth rate and avoiding a recession. There are no major imbalances plaguing us. Capacity bottlenecks are
relatively rare; capacity has been growing at a sustainable pace; inventories
in most lines of business are reasonably balanced with sales; and liquidity
positions, although declining, are not severely strained. The international
trade position has been improving.
Continued strength in the near term seems assured. Employment and
output rose strongly in the fourth quarter. Orders for durable goods have
increased substantially. And the January 1 tax cut will help to sustain consumer spending early in the year. But the outlook for the latter part of 1979
will depend heavily on moderating inflation and on careful coordination
between fiscal and monetary policies.




28

THE MAJOR SECTORS OF AGGREGATE DEMAND IN 1978
Private demand sustained the economic expansion through its fourth
year. The continued strength of business fixed investment last year was a
notable aspect of the composition of demand (Table 2). Housing starts
demonstrated remarkable resilience; despite tightening credit conditions
they remained near the high level that had been reached at the end of 1977.
Consumption expenditures grew somewhat faster than disposable income
during the year; and the saving rate declined from its already relatively low
level at the end of 1977. In contrast, growth in State and local spending over
the 4 quarters of 1978 was at a slower pace than in 1977; the effects of the
1977 economic stimulus measures—many channeled through the State and
local sector—gradually diminished. Federal purchases in real terms declined
slightly due to a variety of special factors.
TABLE 2.—Growth in the major components of real gross national product,
1975-78
[Percent change, seasonally adjusted annual rate]
1975 IV
to
1976 IV

Component

Gross national product

__

Personal consumption expenditures
Nonresidential fixed investment
Residential investment
Government purchases:
Federal
State and local .
Domestic final sales3
1
2
3

.

.

.

1976 IV
to
1977 IV

1977 IV
to
1978 I V i

1977 IV
to
197811

197811
to
1978 IV i

4.6

5.5

4.3

4.2

4.3

5.7
8.6
23.6

4.8
9.1
15.3

3.8
8.3
-.8

2.2
12.4
-1.3

5.4
4.3
-.3

.2
-2.7

6.3
4.3

-.3
3.5

2 -12.2
4.6

13.2
2.3

5.0

5.7

3.7

2.2

5.2

Preliminary.
Largely attributable to fluctuations in Commodity Credit Corporation expenditures.
Gross national product excluding change in business inventories and net exports of goods and services.

Source: Department of Commerce, Bureau of Economic Analysis.

PERSONAL CONSUMPTION EXPENDITURES

Personal consumption is typically a major source of stimulus in the early
stages of recovery. The current expansion is no exception. Between mid-1975
and the end of 1976 the personal saving rate declined substantially, and the
fraction of disposable income spent on durable goods rose. Consumption
subsequently became a less important source of stimulus, but it remained
an expansionary factor in 1978. The increase in consumption came to 3.8
percent in real terms during the last year, one-half percentage point more
than the increase in real disposable income.
Since 1975 the household sector has significantly increased its stocks of
durable goods. In the process, outstanding consumer debt rose enough
to lift the ratio of debt repayments to disposable income from a 1975
low of 15.6 percent to 16.8 percent at the end of 1977. It is therefore not
surprising that the rate of growth of spending (in 1972 dollars) for durable
goods declined substantially to 5.0 percent in 1978, compared to 11.3 per-

278-216
 O - 79 - 3


29

cent in 1977. Nonetheless, durable goods purchases in real terms held at
about 15 percent of real disposable income, the level reached late in 1977.
Auto sales remained at a high rate of 11T/4 million units a year but did not
rise further. Despite steep price increases for foreign cars, the foreign car
share of the new car market declined relatively little during the year.
With durable goods sales remaining comparatively high, the volume of
outstanding consumer installment credit rose substantially further in 1978;
during the year the net increase amounted to $44 billion. In the fourth quarter, repayments of consumer installment debt had reached 17.7 percent of
disposable personal income, four-tenths of a percentage point above the 1971
peak (the earliest available data for the present series). Total repayments,
including mortgage repayments, amounted to almost 23 percent of disposable
income in the third quarter.
The high fraction of consumers' income absorbed by debt repayment
has created some concern that a downturn in consumer demand might
ensue. Survey data on the use of consumer installment credit suggests, however, that the increase in the ratios of installment credit extensions and repayments to disposable income may have been due to rapid growth in the
number of households in the age bracket associated with relatively heavy
credit usage. Rapid growth has occurred in the number of young adults in
the 18- to 34-year age bracket; this group uses credit the most heavily.
An absence of excessive debt burdens is also suggested by the fact that
delinquency rates on installment loans did not rise during the year.
At the start of last year the Administration forecast a rise of real consumption of about 4^2 percent, measured fourth quarter to fourth quarter, or
about three-fourths percentage point more than the 3.8 percent actually
realized. The reason for this difference was slower growth of real disposable
income. This slowdown, in turn, is partly explained by the postponement of
the effective date of the proposed tax cut from October 1, 1978, to January 1,
1979. A more important cause, however, was the increase in the rate of inflation that occurred during the course of 1978. Effective tax rates were increased as households were moved into higher tax brackets. Furthermore,
the 11 percent rise in food prices reduced the growth of real incomes for
most consumers, as did the price increases associated with the decline of the
dollar's value in foreign exchange markets.
In the past, sharp unexpected increases in the rate of inflation have
increased the personal saving rate. Inflation generally tends to raise the cost
of borrowing and curtail the growth of real wealth. In addition, consumers
may become less confident of their future prospects. In contrast, the saving
rate declined in 1978. The continued strength of consumer expenditures in
the face of high actual inflation rates and rising nominal interest rates may to
some extent have stemmed from anticipatory buying in advance of expected
price increases. Evidence from surveys suggests that some consumers considered the present time to be propitious for buying because they expected




30

prices to rise further. This may have helped sustain the already high level of
durable goods purchases.
Relative price changes appear to have contributed to changes in the
composition of consumption during 1978. For example, real purchases of
transportation services and clothing and shoes rose more sharply than
total consumption. In these areas, price increases were below the average
for all consumer goods and services. A shift in the composition of food consumption, as a result of the rapid rise in food prices, was probably the major
reason for the decline in the measured real value of food consumption.
Whenever food prices rise steeply consumers tend to shift toward less costly
foods, although they do not necessarily eat smaller quantities of food. For
example, the sharp reduction in supply and sharp increase in the price of red
meats generated a significant shift of consumption to poultry and dairy
products.
HOUSING
Housing activity remained on a plateau throughout last year, following
nearly 3 years of steady advance. Real residential construction, on a
calendar year basis, was 3.5 percent above that in 1977, and there were 2.0
million housing starts last year. The number of single-family starts was
just below the 15/2-million record level of 1977, while multiunit starts
rose to 592,000. Over the 4 quarters of 1978, however, residential construction in real terms declined slightly, in contrast to a rise of 15 percent
in the previous 4 quarters. This flattening out of residential investment
outlays was a dominant element in the slower growth of real GNP in 1978.
In the first quarter, housing starts fell about 20 percent as a result of
the inclement winter in the North Central and Northeast regions. The
shortfall was largely made up in the second quarter; then housing starts
leveled out at an annual rate of around 2 million units.
This leveling of housing starts and residential construction in 1978 was
not surprising. Three years of strongly rising building activity had filled
backlogs of demand created by the depressed level of new construction
during the 1973-74 period of credit restraint and low income. Moreover,
the sharp rise in prices of a wide range of building materials suggests that
the building industry was operating at close to capacity in 1978. Indeed,
the striking feature of the housing sector last year was its continued high
level of activity in the face of sharply rising interest rates.
The resilience of housing in a year of tightening financial markets is
largely attributable to the ability of specialized mortgage lenders to compete
more effectively for savings. Beginning in June, new regulations permitted
commercial banks and thrift institutions to issue 6-month certificates of
deposit on which rates paid are tied to those on 6-month Treasury bills. These
new money market certificates sustained the supply of mortgage credit, but
they did not prevent interest rates on mortgages from rising along with
other rates. The national average effective mortgage rate for new houses




31

reached 10 percent by the end of the year. The strength of demand, particularly for single-family units, in the face of such high mortgage interest rates
results partly from the large number of people who were born in the baby
boom of 1946-57 and are now reaching age brackets where the rate of homeownership is traditionally high. Demand may also be stimulated by the
expectation that houses will continue to be a good inflation hedge. Over
the past 7 years purchase prices for new homes, adjusted for changes in
quality and size, have risen at an annual rate about one-third faster than
other prices. The tax deductibility of mortgage interest and the favorable
tax treatment of capital gains from home sales add to the attractiveness of
such investment.
Multifamily housing starts rose 2.9 percent in 1978. They were still
about 400,000 below the 1972 peak of 1 million, which included close
to 200,000 publicly subsidized starts. The number of subsidized starts last
year was almost 165,000, up substantially from the lows of 1975 and 1976.
For all rental housing the vacancy rate remained close to 5 percent through
the third quarter of last year, a historically low figure. Rents rose 7.3
percent, almost 1 percentage point more than in 1977. This probably contributed to an improvement in profits and helped to stimulate multiunit
building.
BUSINESS FIXED INVESTMENT
A year ago there was widespread concern that business fixed investment
was not demonstrating its usual cyclical response to improvement in such
basic determinants as the rate of growth of output, business profits and cash
flow, and the cost of capital. In fact, revised data for 1977 that became available last July showed a much stronger rise of investment than had appeared
earlier, and growth last year continued to be relatively strong. The rate of
real growth of business fixed investment over the 4 quarters of last year
was 8.3 percent (Table 3). For the year as a whole investment rose to 10
percent of GNP, close to its share in the high investment periods of the 1960s
and early 1970s.
Investment in structures, which had been disturbingly weak earlier in
the recovery, climbed 12.7 percent in 1978, and by year-end it exTABLE 3.—Changes in real business fixed investment, 1975-78
[Percent change, fourth quarter to fourth quarter]
Component
Nonresidential fixed investment

1975
_ _.

Structures
Producers'durable equipment.. _ _

___

-9.9

9.1

8.3

3.0
11.4

7.0
10.1

12.7
6.4

2.9
-14.8

_ _

8.6

-7.2
-11.2

_ _

Autos and trucks
Other
1

21.5
8.3

27.0
4.2

11.0
4.5

Preliminary.

Source: Department of Commerce, Bureau of Economic Analysis.




19781

1977

1976

32

ceeded its previous peak reached in the fourth quarter of 1973. Growth of
real spending for producers' durable equipment, on the other hand, slowed
to 6.4 percent during the year, in contrast to 10.1 percent during the preceding year. Business purchases of autos and trucks grew much less rapidly
than earlier. Strength in investment was greatest in durable goods manufacturing—particularly in machinery and in stone, clay, and glass—and also
in electrical utilities and petroleum refineries.
The increased strength in investment during the past 2 years reflected a
response to growth in profits and increases in capacity utilization in manufacturing during the course of the recovery. Corporate profits (with inventory valuation and capital consumption adjustments) rose 6.7 percent over
the 4 quarters ending in the third quarter of last year and amounted to 7%
percent of GNP at the end of the period. This shows a substantial improvement from the 6 percent average ratio in 1974-75 though little change
from 1977.
Capacity utilization in manufacturing rose from 83 percent in the latter
part of 1977 to almost 86 percent at the end of 1978. In general, utilization
rates were higher in the primary processing industries than in the advanced
processing industries. Utilization in basic metals industries, which had been
relatively low at the beginning of the year, rose dramatically and greatly
improved profits in those industries.
Thus the rate of investment has been relatively high in the past 2
years, and the structure of investment has begun to shift toward longer-lived
assets. Nevertheless, a further rise in the share of GNP directed to business
fixed investment would be desirable, in order to maintain growth of the
capital stock in line with the rapidly rising labor force and to meet environmental and other regulatory requirements. This issue is discussed further in
Chapter 3.
NET EXPORTS
Real net exports fell substantially during the first 2 years of the current
expansion. During 1977 net exports in 1972 dollars appeared to be leveling
out at about $11—$12 billion, a little less than 1 percent of real GNP. Late in
1977 and early last year, howrever, our net export position deteriorated
further, although the magnitude of this deterioration was exaggerated by the
effects of the East Coast dockworkers' strike.
Throughout much of the 1977-78 period exports grew slowly while imports of both oil and other goods increased sharply. By mid-1978, however,
reversals of these trends became evident; net exports in 1972 dollars in the
last half of 1978 were $3 billion higher than in the first half.
Agricultural products were once again one of the leading export sectors.
Agricultural exports, in 1972 dollars, reached a relatively high level of $15.8
billion in 1978, well above the $12.9-billion average in 1977. Poor crops in
the Southern Hemisphere last spring and income growth in the rest of the




33

world were the main reasons for the increased demand for U.S. farm
products.
The volume of nonagricultural exports in the second quarter rebounded
from depressed levels early in the year and continued to rise strongly
through the rest of 1978. Accelerating growth in other countries made a
significant contribution to this advance. The depreciation of the dollar in
late 1977 and early 1978, which lowered U.S. export prices in foreign
currencies, also encouraged exports, but its principal effect on exports will
occur in 1979.
Import volume grew at an annual rate of 11.6 percent from the beginning of the expansion until the end of 1977. This is somewhat more
rapid than past experience would suggest, given the growth of U.S.
income. That trend has since been reversed. Oil imports were 5.6 percent
lower in 1978 than in the year before. The startup of 1.2 million barrels per
day of Alaskan oil production displaced imported oil and more than offset
the increase in U.S. oil consumption last year. The volume of non-oil
mechandise imports grew more slowly during 1978 than in 1977, because of
less rapid U.S. growth and higher import prices due to dollar depreciation.
INVENTORY ACCUMULATION
The cautious inventory policy that has characterized the current expansion
continued in 1978. This caution was reinforced by sharply rising shortterm interest rates, which increased the cost of holding inventories. The rate
of inventory accumulation in 1972 dollars last year was about three-fourths
of 1 percent of GNP. The ratio of inventories to final sales (in 1972 dollars)
for the nonfarm sector was nearly constant. The stability of the inventoryto-sales ratio is especially noteworthy in the face of the 10 percent share of
GNP absorbed by business fixed investment. Such a high investment share
tends to raise the ratio of stocks to sales by virtue of its significant contribution to inventories of work in progress.
One exception to this stability of inventory-to-sales ratios was at general
merchandise stores. The ratio of real inventories to sales in this sector, which
has shown a slight uptrend in the past decade, appeared to be moving up
sharply during the summer and early fall months. A stronger pace of sales
at these stores late in the year helped to alleviate this problem.
GOVERNMENT SPENDING
Government purchases rose less during 1978 than was expected a year
ago. In real terms the actual increase was 2.0 percent.
Slower than expected growth was confined principally to the Federal
sector, where the real value of purchases declined 0.3 percent. Commodity
Credit Corporation purchases had been expected to decline. The shortfall in
other purchases was about evenly divided between delays in the buildup
of the Strategic Petroleum Reserve and shortfalls in numerous other categories of nondefense purchases, which rose, in nominal terms, 4 percentage




34

points less than anticipated. The slow accumulation of petroleum reserves
meant lower oil imports and, on balance, had no effect on aggregate demand, in contrast to the other shortfalls.
State and local government purchases, in real terms, grew rapidly in the
first half of last year but slowed in the second half. From the second quarter
of 1977 through the second quarter of 1978—a common fiscal year for these
units of government—the real value of State and local purchases rose by 4.9
percent. This was a significant contrast to the virtual stability in 1975-77. In
nominal terms compensation of employees rose by 10.2 percent over this
period while other purchases rose by 16.4 percent. Construction activity in
this sector (about one-third of other purchases) had been declining in real
terms between the last quarter of 1975 and the first quarter of 1977, but it
appears to have risen substantially in 1978. In the 3-month period ending in
October the real value of street and highway construction was 5 percent
higher than a year earlier, sewer system construction was up 14 percent,
and water supply construction was up 33 percent.
The acceleration of spending by State and local governments in 1977-78
primarily reflects two forces: the rise in revenues during the economic expansion and a sharp increase in Federal aid. A substantial part of the 197778 stimulus package was funneled through State and local governments,
augmenting special countercyclical programs that had been initiated earlier.
The principal components of the package were an expansion of public
service employment, authorization of a second round of local public works
grants, and expansion of antirecession fiscal assistance grants to State and
local governments. Public service employment exceeded its target of 725,000
jobs by the spring of 1978 and subsequently declined somewhat. Local
public works grants were fully committed by the end of 1977, but the expanded value of outlays followed with a lag. Distribution of antirecession
fiscal assistance peaked in the third quarter of 1977 and ended a year
later.
Real growth slackened in the second half of last year, in part because
States and localities entered new fiscal years in an environment influenced by
public sentiment for tax reductions and restraint in government spending.
As a result of the increased growth in purchases and the pressure for tax
reduction, the aggregate budget surplus in the State and local sector declined
sharply in 1978. The surplus on current and capital account (but excluding social insurance trust accounts) fell from a peak of $12.8 billion (annual rate) in the third quarter of 1977 to $1.8 billion a year later. Of the
$7.5-billion decline that occurred between the second and the third quarters,
roughly $5% billion is attributable to California's Proposition 13, which
mandated a reduction of about 50 percent in local property taxes, or about
one-fourth in total local revenues. This local tax cut was followed by a
substantial redistribution of funds from the State government, which had
been incurring a surplus, to the local governments.




35

Proposition 13 and similar measures in other States suggest the likelihood
of significantly slower growth in State and local spending in the near future
and an approximate balance or a deficit in the aggregate current and capital
account of this sector. In the fall elections, 11 States had proposals on their
ballots that would immediately limit State and local taxes or expenditures
or both. Such measures passed in eight of these States. Referenda mandated
substantial reductions of property taxes in Idaho and personal income taxes
in North Dakota. The measures in other States differ in their form and the
degree to which they will constrain taxes and expenditures, but their enactment—by large margins in some cases—clearly indicates public sentiment
for budgetary restraint. This is likely to put downward pressure on both
spending and the current and capital account surplus.
Movements in this aggregate State and local surplus or deficit are dominated by national trends but conceal great diversity across States and among
cities and areas within States. Per capita personal income—perhaps the best
single measure of taxable resources—varies widely among States, but the
growth trends in various regions have been narrowing these differentials
throughout the twentieth century. The regions with the highest income
levels have tended to experience the slowest growth. These same regions
have the highest per capita public sector expenditures, the highest tax effort,
and the highest level of per capita Federal aid. Many forces help to create
this pattern: high-income localities may choose to spend more on public
services as well as on private goods and services; where the cost of living
is high, more must be spent to obtain the same level of services; and some
high-income areas also contain significant concentrations of poverty and
have greater needs. Extreme care must therefore be used in drawing general
conclusions about the fiscal condition of the State and local sector, or of
individual areas within it, from the aggregate surplus or deficit.
The social insurance accounts of State and local governments continued
to show a moderately growing surplus throughout last year. By the end of
the year the surplus had risen to $22.8 billion, up $3.7 billion from a year
earlier. Growth in this surplus has been augmented by strong earnings on
investments as well as the excess of contributions over benefit payments.
Continued growth in this surplus is likely as States and localities move to
provide actuarially sound funding of these trusts.
LABOR MARKET DEVELOPMENTS
Demand for labor continued to be unusually strong in 1978. Despite
another sharp increase in the labor force participation rate, the creation of
new jobs exceeded the growth of the labor force by a substantial margin,
and the rate of unemployment declined further. The proportion of the working-age population employed continued to climb in 1978, reaching 59.0
percent in the fourth quarter.




36

The civilian labor force rose by 2% million over the 4 quarters of 1978.
This is a 2.8 percent annual growth rate, well above the long-term trend rate
of 2T/4 percent per year, which results from population growth and a longterm upward drift in labor force participation rates.
Women, teenagers, and blacks contributed most to the growth of the
labor force; their participation rates rose to new highs. The participation
rate for adult women increased 1.5 percentage points to 50.1 percent, passing
the 50 percent mark for the first time. The teenage participation rate jumped
1.6 percentage points to 58.5 percent, and that for blacks and other racial
minorities increased 1.2 percentage points to 62.0 percent.
Employment increased by 3.3 million from the fourth quarter of 1977 to
the fourth quarter of 1978, a smaller gain than in 1977 but still large by
historical standards. The growth in employment was surprisingly large in
relation to the rise in real GNP, reflecting the year's poor productivity
performance. The employment gain was broadly based across industries,
with service-oriented and typically cyclical industries showing the largest
gains.
Among manufacturing establishments, most nondurable goods industries showed little or no growth in employment. Employment was reduced
in such industries as apparel, textiles, leather products, and tobacco manufactures. Some of the durable goods industries—particularly those related to
construction and transportation—showed sizable gains. Among these were
nonferrous primary metals, fabricated metal products, nonelectrical machinery (particularly construction and related equipment and computers)
and aircraft.
Employment also increased in other major sectors during the year. Of
these, construction employment grew at the fastest pace, with gain of 11.6
percent. Other large gains in employment were registered by finance, insurance, and real estate (5.3 percent) ; retail trade (4.1 percent) ; and services
(4.4 percent).
Employment gains were greatest among women, blacks, and teenagers,
the groups that led the labor force expansion. The employment increase
among adult women (aged 20 and over) accounted for more than half
of the total; the percentage increase in their employment was more than
double that of their male counterparts. Blacks and members of other racial
minorities filled about one-third of the new jobs. Employment in these
groups grew more than twice as fast as that of whites.
Overall, unemployment declined from 6.6 percent of the labor force in
the final quarter of 1977 to 5.8 percent in the fourth quarter of 1978. Most of
the decline occurred early in the year. The unemployment rate for adult
white women fell to 5.0 percent, but the white teenage unemployment rate
showed little change, since in that age bracket the growth in the labor force
was as rapid as the rise in employment (Table 4).
Earlier in the recovery the unemployment rate for blacks had declined
more slowly than that for whites, widening the gap between the two. In




37

TABLE 4.—Unemployment

rate and growth in employment and labor force, by
demographic group, 1978
Unemployment rate
(percent 0
1978 IV

Group

Total.

Employment

Civilian labor
force

Percent change from
1977 IV to 1978 IV 2

5.8

2.8

3.2

2.5

14.0
3.5
5.0

Both sexes 16-19 years
Males 20 years and over...
Females 20 years and over.

3.6

5.1

White..

1.8
2.1
5.2

11.5

Both sexes 16-19 years
Males 20 years and over...
Females 20 years and over.

7.0

35.3
8.3
10.2

Black and other..

2.0
1.4
4.4
5.2

12.1
6.1
7.3

6.0
4.7
5.5

i Percent of civilian labor force in group specified; seasonally adjusted.
s Adjusted for the increase of about 250,000 in employment and labor force in January 1978 resulting from changes
in the sample and estimation procedures introduced into the household survey.
Source: Department of Labor, Bureau of Labor Statistics.

1978 some progress was made in reversing that pattern. The unemployment
rate for blacks declined by 1.7 percentage points to 11.5 percent, compared
to the 0.5 percentage point decline for whites to 5.1 percent.
Since mid-1975 there has been a fairly steady reduction in the percentage
of unemployed persons who report job loss as the reason for their unemployment. The percentage of unemployed who are reentrants to the labor force
has been increasing fairly rapidly, while the percentage who are new entrants
and the percentage who quit their last job have both increased moderately.
These typical cyclical patterns continued in 1978.
PRICES AND WAGES IN 1978
Price developments last year were a major source of disappointment and
concern. The consumer price index rose by 9.0 percent from November 1977
through last November; producer prices of finished goods rose by 9.1 percent
from December 1977 to December 1978, and the GNP deflator rose by 8.3
percent during the 4 quarters of the year. In all cases the increases were
considerably greater than in each of the preceding 2 years.
As shown in Table 5, the acceleration of prices was widespread. Energy
prices, which had been a major factor contributing to high inflation rates
in the 1973-75 period, did not play a large role last year. Food prices, however, were once again an important influence. Even if one eliminates food
and energy prices from the price indexes—thus removing the effects of
external shocks to supply—the remaining prices show an acceleration in
1978.
The upward movement in these other prices was a response to a wide
variety of forces—including the pass-through of higher import prices associated with depreciation of the dollar, the effects on home prices of in-




38

TABLE 5.—Alternative measures of inflation, 1976-78
[Percent change, December to December, except as noted]

Measure

1976

1977

1978i

Consumer price index: All items

4.8

6.8

9.0

.6
6.9
6.1

Food 3
Energy
_.
All items less food and energy..

8.0
7.2
6.4

11.3
7.0
8.6

Producer price index for finished goods:
All finished goods

3.3

6.6
6.1

11.9
8.3

7.2

8.0

4.7

6.1

8.3

.7
5.3

Food consumption
Other goods and services..

9.5

6.4

Implicit price deflator for gross national product 4 .

9.1

6.4

-2.5
4.9

Foods
All other..
Capital equipment..

6.6

2.1

Consumer goods

5.7
6.2

11.7
7.9

1
Consumer price changes are from November 1977 to November 1978. Changes for price deflators are preliminary.
2
Data beginning January 1978 relate to all urban consumers; earlier data relate to urban wage earners and clerical
workers.
3
Gas (piped) and electricity; fuel oil, coal, and bottled gas; and gasoline, motor oil, coolant, etc.
* Changes are from fourth quarter to fourth quarter.
Sources: Department of Commerce (Bureau of Economic Analysis) and Department of Labor (Bureau of Labor Statistics).

centives to invest in land and houses as an inflation hedge, and some supply
bottlenecks in construction materials. A particularly troublesome phenomenon, however, was the slow growth in productivity. This added directly
to costs of production and may indirectly have affected wage rates by increasing the demand for labor.
Table 6 shows the acceleration in hourly earnings and in total compensation per hour, the slower growth in productivity for the nonfarm
private business sector, and the effects of both of these forces on unit labor
TABLE 6.—Measures of wage rates and costs, 1973—78
[Percent change, fourth quarter to fourth quarter, except as noted]

1973

Item

1974

1975

1976

1977

1978 1

Adjusted hourly earnings index 2

6.4

91
.

7.5

7.4

7.5

8.2

Union wage changes (total effective adjustment)'

7.0

9.4

8.7

81
.

8.0

7.5

8.2

10.9

86
.

8.5

7.6

9.8

10.0
.9

8.0
.6

7.7
.8

69
.

8.7
1.1

-3.4

4.4

2.6

13
.

.8

14.9

4.0

5.8

6.3

8.9

Private nonfarm business sector, all persons:
Compensation per hour
Contribution of:
(4)
(4)

Wages and salaries and private fringes..
Employer payments to social insurance.

-.7

Productivity
Unit labor costs..

9.0

1
Preliminary.
2
Adjusted for
3

overtime in manufacturing and for interindustry employment shifts.
Agreements covering 1,000 workers or more. Changes are for the four quarters ending in December through 1977 and
ending in September for 1978.
* Not available.
Source: Department of Labor, Bureau of Labor Statistics.




39

costs last year. Table 7 indicates that the rise in prices in the nonfinancial
corporate sector was less than the increase in unit labor costs. Nevertheless
profits per unit of output still continued to increase, although much less
rapidly than in 1977.
TABLE 7.—Changes in price, costs, and profits, per unit of output, private
nonfinancial corporate sector, 1973-78
[Percent change, fourth quarter to fourth quarter, except as noted)

1974

1973

Item

1975

1976

1977

1978»

Labor costs

8.6

16.3

2.1

7.3

5.6

8.7

Nonlabor payments

2.2

8.6

18.7

1.5

6.1

3.3

-6.3

-26.0

66.9

.5

16.4

1.2

6.3

23.1

6.5

1.9

2.1

4.2

6.4

13.8

7.3

5.3

5.8

6.8

Corporate profits
Other nonlabor costs 2.
Implicit price deflator
1
2

Changes are measured from third quarter 1977 to third quarter 1978.
Interest, rent, depreciation, and indirect business taxes.

Source: Department of Labor, Bureau of Labor Statistics.

Chapter 2 develops in considerably more detail the relation between
wages, productivity, and prices. The following sections describe some of
the special factors adding to inflation last year.
FOOD PRICES IN 1978
Retail food prices for the 12 months ending in November 1978 rose 11.3
percent—well above the 8.4 percent increase for all items excluding food.
Most of the increase in food prices occurred during the first half of the
year and was very broadly based. Prices for meats, poultry, fish, and eggs
rose 18.9 percent (Table 8), and the index for fruits and vegetables was up
11.5 percent. The index for all food consumed at home was 12.0 percent
higher. Prices of imported food rose less than in 1977, however, because coffee
prices declined from the record highs of 1977.
TABLE 8.—Changes in retail food prices, 1977-78
[Percent change, seasonally adjusted annual rate]
1978
Consumer price index component

Nov. 1977
to
Nov. 19782

1
12.4

Food away from home
Food at home 3
Meats, poultry, fish, and eggs .
Dairy products __
Fruits and vegetables
Sugar and sweets..
1
2
3

._
_ __ _

20.0

7.0

6.8

11.3

10.7
13.7

All food

II

10.9
24.2

10.8

5.2

7.9
6.3

10.0
12.0

28.4
2.5
12.2
14.0

46.8
15.8
22.6
22.4

-4.9
12.3
14.3
11.7

11.2
7.4
6.7
-1.8

18.9
9.5
11.5
11.6

III

IV i

Based on October-November data.
Based on unadjusted data.
Includes items not shown separately.

Note.—Data beginning 1978 relate to all urban consumers; earlier data relate to urban wage earners and clerical workers.
Source: Department of Labor, Bureau of Labor Statistics.




40

Increases of this magnitude in food prices were not anticipated as the
year began, and price forecasts for food had to be revised repeatedly in the
following months. There were a number of reasons for the unfavorable
developments: hog production failed to expand despite favorable grain
prices; cattle marketings continued to decline; adverse weather curtailed
some crops here and abroad; government farm programs and price support
levels were changed; prices of major grains rebounded from abnormally
low levels in 1977; costs of food processing and marketing went up; and
the increase in the minimum wage raised labor costs both for food marketing and for restaurant meals.
The cattle cycle has always been a major determinant of U.S. meat prices.
When ranchers become optimistic about future beef prices, they hold back
cows and heifers for breeding purposes. Over a period of years, cattle
numbers rise until overexpansion of the herd occurs and the large supplies
lead to a fall in beef prices. The cycle then enters its liquidation phase until
the herd is reduced enough to make the longer-term price outlook more
promising. At that point the cycle begins again.
The past 4 years have witnessed a prolonged liquidation phase. The
number of cattle and calves on farms in the United States declined from
132 million head in January 1975 to about 111 million head at the end of
last year. This represents a 16 percent drop, the sharpest ever recorded.
With fewer cattle available in 1978, slaughter was down by 5 percent, and
per capita beef consumption declined by more than 4 percent to 120
pounds.
It was expected that lower beef production in 1978 would be largely
offset by a higher output of pork and poultry. Analysis of the intentions of
hog producers in late 1977 indicated a probable 10 percent increase in pork
production in the following year, but the severe winter weather radically
changed the outlook. Conception rates fell, abortions increased, and
the average number of pigs per litter dropped 6 percent below normal.
Disease, rising feed costs, uncertainty over government regulation of feed
additives and use of nitrites in processing, a.nd structural changes in the
industry also kept hog production from reaching expected levels. When it
became evident that pork production was not expanding, meat prices began
to rise very rapidly, with strong consumer demand adding further pressure.
Adverse weather in 1978 also affected other food prices. Heavy rains in
California delayed spring plantings last year and fresh vegetable prices rose
dramatically. Most fruit crops were also reduced by bad weather, apples
being the only major exception. In December 1978, freezing temperatures
in southern California and Arizona once again hurt citrus and fresh
vegetable crops.
In contrast, weather conditions during the growing season for grain were
very favorable in the major producing areas. The corn crop reached a record
of 7.1 billion bushels, and the national average corn yield exceeded 100
bushels per acre for the first time in history. Other major grain harvests
were also fairly ample.




41

Changes in government farm programs and increased price support levels
for agricultural products also led to retail price increases for some food products in 1978. In January, import fees on foreign sugar were raised in order
to guarantee the effectiveness of the domestic price support program. In
March, land diversion programs were expanded to improve grain prices. The
grain reserve programs, which were instituted last year to provide some
insurance against the price-raising consequences of a crop failure, led to
higher wheat and flour prices while the reserves were being built up. Dairy
price support levels rose automatically in April and October, as required by
statute, but lower production and strong demand kept prices of milk and
dairy products above those higher support levels.
Increasing costs and prices in the rest of the economy also affected food
prices. The value of farm commodities, together with the cost of imported
foods such as coffee and cocoa, accounts for 43 percent of retail food expenditures. The other 57 percent represents the cost of transporting, processing,
and marketing the commodities. Thus, when the costs of labor, transportation, packaging, and other inputs increased last year, the food sector was
affected as were other sectors. Approximately one-half of the food price
increase in 1978 was attributable to higher prices for these marketing services.
The 15.2 percent increase in the (nonfarm) minimum wage at the beginning of 1978 may have had a particularly large effect on restaurant and
institutional food prices and on food marketing costs. Since many workers in
these industries are paid the minimum wage, an increase in that wage would
quickly translate into higher costs. For food consumed away from home,
which represents about one-fourth of total food consumption, prices rose 10
percent during the year.
DEPRECIATION OF THE DOLLAR
Another source of inflationary pressure in the U.S. economy during 1978
was the decline in the value of the dollar relative to other currencies.
An index of the value of the dollar relative to the currencies of 10 other
industrial countries—computed by using the percentage of world trade of
each country as its weight (multilateral basis)—shows a 13.8 percent decline
in the dollar from September 1977 to September 1978. Weighted by each
country's share of U.S. trade (bilateral basis), the decline was 8.9 percent.
The difference between the two indexes is largely caused by the high share of
Canadian trade in the latter index and by the 8.0 percent decline of the
Canadian dollar relative to the U.S. dollar.
Changes in the relative value of the dollar affect the price of imported
goods and thus the cost of living. Over the 4 quarters of 1978, prices of nonfuel imports rose 15J/2 percent. This was substantially less than the 24.3 percent rise in foreign prices in dollar terms in the 10 largest countries of the
Organization for Economic Cooperation and Development (OECD). The
difference between these two price movements indicates that foreign producers absorbed a substantial amount of the fall in the dollar by reducing




42

their profit margins on exports. Such behavior is consistent with historical
experience.
The rise in the prices of imported goods has a further effect on domestic
prices by raising wage demands and by allowing price increases for goods
that compete with imports. The econometric evidence suggests that over
a 2-year period these indirect effects might amount to about twice the direct
effects on prices of final products. A 10 percent depreciation will generally
result in a roughly 11/2 percent increase in prices by the end of a 2- to 3-year
period, with approximately half of the effect coming in the first year.
The impact of the decline of the dollar on domestic prices is limited by
the denomination of oil prices in dollars. As a result, the price of imported
fuel does not rise as the dollar falls. In addition, the Organization of Petroleum Exporting Countries (OPEC) did not raise its prices in 1978. The large
increase in OPEC prices announced on December 17 for 1979 means that
this moderating influence will not be repeated this year.
Inflation affects the depreciation of the dollar as well as being affected
by it. Countries with low inflation rates tend to have strong currencies,
and the appreciation of their currencies helps to hold down the rise of their
domestic price levels (Table 9). Relative inflation rates are by no means the
only factors that influence the relative value of currencies. Indeed, in the
short run, factors such as relative interest rates, differences in real growth,
the size of the current account balance, and expectations of traders in
foreign exchange markets are likely to be dominant influences.
TABLE 9.—Changes in currency values and consumer prices, by country, third quarter
1977 to third quarter 1978
[Percent change]

Consumer
price
index

Country
Canada

9.3

France

9.3
2.4

Germany
Italy

11.9

Japan

4.0

United Kingdom.

7.8

Sources: Board of Governors of the Federal Reserve System and Organization for Economic Cooperation and Development.

HOUSING COSTS

Housing is the largest single component of the consumer price index, comprising over one-third of the expenditures covered by this measure. This component encompasses many items, such as rent, utilities, and home purchase
costs. Most of these costs have been rising very rapidly.
Housing is one sector in which a classical demand-pull inflation seems
to have been occurring in 1978. The strong demand for houses has raised
the price of both land and materials. The average price of a new single-




43

family house rose by 13/ 2 percent in the 12 months ending in October.
Demands for construction materials have strained the capacity of some
supplying industries, and prices of building materials have risen strongly.
Lumber prices, for example, have risen 33 percent in the last 2 years, and
shortages of gypsum products have been common. The increase in energy
prices since 1974 has also affected prices of building materials, particularly
the prices of insulation and asphalt products such as shingles.
If housing starts taper off this year as expected, some of these problems
should become less severe. Energy conservation tax credits enacted late
in 1978, however, may keep pressure on prices of insulation.
Some have questioned whether the widely used consumer price index
appropriately measures the real burden of rising housing costs in periods of
rapid inflation. Capturing the magnitude of rising housing costs in the
index is indeed difficult. Rental costs in multifamily dwellings are, in principle, fairly easy to measure. Owner occupancy poses different problems, however, because of the distinction between the costs of owning a house and the
costs of using its services.
During the most recent revision of the consumer price index, the Bureau
of Labor Statistics reviewed the conceptual basis for the home purchase
portion of the index. In principle, there are two ways to measure the cost
of owner-occupied housing. The first is to measure the home prices, mortgage interest rates, and other cost elements faced by those buying a home
during the period in question. This is the method that has been used historically in the CPI. A second approach would be to price the flow of
services from housing, using rents on equivalent units as a measure of the
true cost of living in a house. This method is used in the national income
and product accounts and in the implicit deflators for GNP and its
components.
When home prices move up, rents on comparable units will tend to rise.
Unless vacancy rates are very low, however, rents will adjust upward only
gradually to a level that fully reflects the new and higher price of homes.
Rent controls in some areas may contribute to the slowness of the process of
adjustment. Consequently in a period when housing prices are rising rapidly
the measurement technique now used in the CPI will show a faster increase
in the cost of home-ownership than the alternative index based on equivalent
rents. Conversely, when the increase in home prices slows, rents may keep
rising for some time in order to close the gap, and the current CPI technique
will show a slower price increase than the alternative.
Under either method of measurement, however, a period of rapid rise in
housing prices would increase the housing cost index faster than the rise in
out-of-pocket costs paid by homeowners who had earlier purchased their
homes at lower prices and contracted for mortgages at lower interest rates.
An important part of the total rise in the CPI last year stemmed from the
homeownership component. New home prices rose by 11 percent and mort-




44

gage interest rates by 9 percent. Only about 10 percent of homeowners—
those who actually bought a house last year—were directly affected by the
resulting increases in the cost of homeownership.
MEDICAL CARE
Medical care costs have added significantly to inflation for most of the
past decade. Except for the period of mandatory wage-price controls from
1971 through early 1974, medical care costs have risen much more rapidly
than other prices. From 1973 through 1977 the cost of medical care rose at
an average annual rate of 10.2 percent, compared to 7.7 percent for the total
consumer price index. During 1978 the increase in medical care prices
slowed to 8.8 percent, about the same rate as the total CPI.
The reason for this moderation is not completely clear. Prospects for mandatory cost containment legislation may have been partly responsible; the
success of some of the State cost containment programs may also have been
influential. It should be noted, however, that total hospital expenditures continued to increase as a share of GNP since the deceleration early in 1978 in
the prices of many hospital services was partially offset by greater use of
these services. A significant reacceleration of hospital costs also occurred
late in 1978. These developments point out the need for some more permanent means of containing the rise of hospital costs. The Administration
will resubmit legislation with this aim in 1979.
AGGREGATE DEMAND MANAGEMENT IN 1978
The focus of aggregate demand policy changed during the past year,
as inflation accelerated and unemployment fell faster than had been
expected. The acceleration of inflation in the context of continued large
employment gains prompted a lowering of the target for output growth.
Fiscal and monetary policies shifted toward restraint.
In the fourth quarter of 1977, during the budget planning period, the
unemployment rate stood at 6.6 percent. With normal increases in productivity a 1978 economic growth rate well above the long-run trend would
have been needed to achieve a further significant reduction in unemployment. Fiscal policy was designed to meet that objective by continuing,
though gradually reducing, the stimulative effects of the Federal budget.
The stimulus measures adopted in 1977 were expected to have a
dwindling effect in the course of 1978. A reduction in income taxes, to
take effect in the final quarter of the year, was proposed to offset the
dampening effect on real growth of increases in social security taxes and of
the higher effective tax rates resulting from inflation. Some normal cyclical
rise in interest rates was anticipated, but it was expected that monetary policy
would be generally accommodative.
During the early months of the year, however, it became apparent that
the slow growth in productivity, and the associated sharp increases in the

 O - 79 - 4
278-216


45

demand for labor, were contributing to a serious acceleration of inflation.
For this reason, it became appropriate to slow the growth of the economy
to preclude the emergence of excess demand. This slowing would provide an
environment in which structural anti-inflation measures and the dollar
support program could be effective.
FISCAL POLICY
Shifts in the high-employment budget offer a useful way to summarize
changes in fiscal policy. The adjustments made to obtain the high-employment budget remove from actual receipts and expenditures the effects of
fluctuations in the economy. Consequently, this budget shows the surplus or
deficit as it would he if the economy were moving smoothly along its potential growth path. Changes in the high-employment surplus or deficit reflect
the effects on receipts attributable to inflation and to growth in potential real
GNP as well as to discretionary changes in Federal expenditures and tax
rates. Short-run changes in the high-employment surplus or deficit are relatively insensitive to assumptions regarding the level of potential GNP.
Table 10 shows that fiscal policy shifted toward restraint in 1978. For the
calendar year as a whole, the high-employment deficit was reduced by almost
one-half from 1977 and declined continuously through 1978. The tax cut at
the beginning of 1979 will temporarily increase the high-employment deficit,
but the high-employment budget will be about in balance by mid-1980.
The 1978 reduction in the high-employment deficit occurred for four reasons. First, the effects of the 1977-78 stimulus package gradually dissipated:
public service employment peaked slightly above 725,000 jobs in the spring,
TABLE 10.—Actual and high-employment Federal receipts and expenditures,
national income and product accounts, calendar years 1973—78
[Amounts in billions of dollars; quarterly data at seasonally adjusted annual rates]
Actual
Calendar year
or quarter

High-employment

Surplus or deficit ( - )
Receipts

Expenditures

Amount

Percent
of GNP

Surplus or deficit ( - )
Receipts

Expenditures

Amount

Percent
of GNPi

1973
1974

258.3
288.6

265.0
299.3

-6.7
-10.7

-0.5
-.8

256.8
301.1

265.1
298.6

-8.4
2.6

-0.6
.2

1975
1976
1977
19782

286.2
331.4
374.5
431.6

356.8
385.2
422.6
461.0

-70.6
-53.8
-48.1
-29.4

-4.6
-3.2
-2.5
-1.4

320.5
356.9
394.5
446.6

350.1
380.3
419.0
459.6

-29.6
-23.4
-24.6
-12.9

-1.8
-1.3
-1.3
-.6

1977:111
IV

374.3
385.5

430.7
444.1

-56.4
-58.6

-2.9
-3.0

392.2
403.4

427.4
441.4

-35.3
-38.0

-1.8
-1.9

1978:1
II
III
IV.

396.2
424.7
441.7

448.8
448.3
464.5

-52.6
-23.6
-22.8

-2.6
-1.1
-1.1

417.5
438.1
455.2
475.8

447.0
447.1
463.0
481.2

-29.5
-9.0
-7.9
-5.4

-1.4
-.4
-.4
-.2

1

High-employment surplus or deficit as percent of high-employment gross national product.
Preliminary.
Note.—Detail may not add to totals because of rounding.
Sources: Department of Commerce (Bureau of Economic Analysis), Department of the Treasury, Office of Management
and Budget, and Council of Economic Advisers.
2




46

and antirecession fiscal assistance to State and local governments ceased at
the end of the third quarter. Second, inflation and real growth moved individuals into higher tax brackets during the year.
Third, Federal spending rose less rapidly than had been anticipated.
The increase in total expenditures as measured in the national income
and product accounts was $38.2 billion from the end of 1977 to the end of
1978. This increase amounts to only 8.6 percent in nominal terms in a
period when the GNP deflator rose 8.3 percent. The substantial shortfall
in fiscal 1978 from the rate of spending anticipated in the January budget
came to $12^2 billion on a unified budget basis, or 2.8 percent of total outlays. The prospect of a shortfall became apparent fairly early last year, but
no attempts were made to offset it, since additional fiscal restraint was a
desirable outcome in view of unfolding economic circumstances.
For fiscal 1979, which began last October, budget projections were similarly scaled down; on a unified basis, fiscal 1979 Federal spending is now
expected to be $493.4 billion or $7.6 billion below the original estimates made last January (adjusted to include earned-income tax credits in
excess of taxpayers' liabilities, which are now treated as outlays).
The fourth element in the shift toward fiscal restraint was the President's
decision to revise his tax reduction proposal. Originally the Administration
had requested a $25-billion tax reduction effective on October 1, 1978. In
May the President asked that the net reduction be scaled back to $20 billion
and its effective date postponed to January 1, 1979. Reduction was
still needed to offset the fiscal drag stemming from the changes in effective
tax rates occasioned by inflation and real growth, from increases in social
security taxes previously enacted, and from the $6.6-billion increase in social
security taxes legislated in 1977 to take effect in 1979. Nevertheless, a smaller
and later reduction appeared appropriate in view of the need for greater fiscal
restraint. The Congress ultimately enacted a $20.6-billion reduction of personal and business taxes plus a $0.7 billion increase in outlays for the earned
income tax credit. This package yields a net revenue loss of $18.9 billion
when allowance is made for the expiration of $2.5 billion in employment tax
credits. These tax measures are discussed in Chapter 3.
These adjustments to fiscal policy moved the budget more quickly toward
two previously stated objectives of the Administration: reducing Federal
outlays to 21 percent of GNP and achieving a balanced budget in the context
of reasonable economic growth (Table 11). Fulfillment of these objectives
is a major challenge because it will require offsetting the upward pressure on
Federal outlays from rising prices and from automatic increases in entitlement programs under current law.
MONETARY POLICY
Two major developments dominated monetary and financial conditions
during 1978. The first was a substantial rise in interest rates. The second
was the introduction of new financial instruments through which thrift




47

TABLE 11.—Federal unified budget outlays^ as percent of gross national product, and
budget surplus or deficit, fiscal years 1955-80
[Current dollars]
Budget outlays as percent of GNP
Fiscal years
Total i

Income
security

National
defense

Budget surplus
or deficit ( - )
(billions of
dollars)

18.3
19.2
19.9
20.3

3.0
4.1
4.0
5.6

10.0
8.8
8.5
6.7

-2.3
-4.2
-7.2
-13.8

1975...
1976 *_.
1977__.
1978__.

22.4
22.5
22.0
22.1

7.5
7.8
7.5
7.2

5.9
5.4
5.3
5.1

-45.2
-63.5
-45.0
-48.8

1979 (estimate).
1980 (estimate).

21.6
21.2

6.9
7.1

5.0
5.0

-37.4
-29.0

1955-59
1960-64
1965-69
1970-74

average..
average..
average..
average..

1

Includes other outlays not shown separately.
2 Transition quarter averaged with fiscal year 1976.
Sources: Department of Commerce, Department of the Treasury, Office of Management and Budget, and Council of
Economic Advisers.

institutions could continue to attract funds, an innovation that modei«*ted
significantly the degree to which high short-term interest rates depressed
housing construction.
Chart 1 shows the rise in both short- and long-term interest rates. These
increases came in several phases. A small upward movement in short-term
rates occurred early in the year after the Federal Reserve raised the discount
rate in January in response to international developments. This was followed
by a period of relative stability through mid-April as the slow pace of economic activity in the first quarter led to quite moderate growth in the monetary aggregates. Very rapid growth in the aggregates began in the second
quarter and persisted into the summer. The efforts of the monetary authorities to moderate the growth of the aggregates resulted in substantial increases
in short-term interest rates. The Federal funds rate rose by 2 percentage
points between March and the middle of October. Most other short-term
rates rose in an approximately parallel fashion. Measures to defend the dollar, announced at the beginning of November, prompted a further dramatic
increase in rates. The discount rate was raised by a full percentage point,
from 8J/2 to 9l/% percent, on November 1; between then and the end of the
year the Federal funds rate rose by another three-fourths of a percentage
point to about 10 percent.
The movement of long-term interest rates was determined by current
developments in short-term rates, by anticipations of future interest rate
and price developments, and by supply and demand considerations in capital
markets. Long-term rates drifted up somewhat during the first quarter,
when demands for business credit remained strong, but leveled out subsequently as expectations developed that rates might be nearing cyclical
peaks. With short-term rates continuing to increase, the yield curve by
October had become inverted; that is, long-term rates were below shortterm rates.




48

Chart 1

Selected Interest Rates and
Bond Yields
PERCENT PER ANNUM

14

SHORT-TERM RATES

4 I III II II i1I IIII II IIIIIIII IIIIIII IIII I11IIII II II III 1I II III IIIII1II I

1973

1974

1975

1976

1977

1975

1976

1977

1978

12
BOND YIELDS

4 1973

1974

u>

I ! II ! I

II I I II I I I I I I I I I I I I I I

1978

NOTE: TREASURY BONDS ARE CONSTANT MATURITIES.
SOURCES: DEPARTMENT OF THE TREASURY, BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM, AND MOODY'S INVESTORS SERVICE.




49

Behavior of the Major Monetary Aggregates
During the first half of the year the behavior of the monetary aggregates
paralleled fluctuations in the real economy. Growth of Mi (demand deposits
and currency) and M2 (including, in addition to M1? time and savings deposits other than negotiable certificates at large commercial banks) was
quite slow in the first quarter and much faster in the second quarter. Growth
of these two monetary aggregates continued to be relatively strong in the
third quarter, despite rising interest rates and slowing growth of real GNP.
Between the final quarter of 1977 and the third quarter of last year, Mi
grew at an 8.2 percent annual rate, well above the upper end of the Federal
Reserve's long-term target growth range of 4 to 6^2 percent. Studies that
relate the real value of Ma to real GNP and to short-term interest rates
indicate that the usual historical relationship held up fairly well through this
period. The continuation of rapid growth of the monetary aggregates
through the third quarter appears to have been largely attributable to the
rapid increases in nominal GNP which raised transactions demands. There
was virtually no growth in Mi during the fourth quarter when interest rates
were rising sharply.
In the latter half of the year, two major innovations in financial markets
tended to change the usual relation between the monetary aggregates on the
one side and economic activity and interest rates on the other. The first innovation was the new regulation permitting commercial banks and nonbank
thrift institutions on June 1 to begin issuing money market certificates
(MMCs) of 6-month maturity in minimum denominations of $10,000.
Commercial banks were permitted to pay a maximum yield on these certificates equal to the discount rate on 6-month Treasury bills, but interest
could be compounded if the bank chose to do so. The maximum rate for nonbank thrift institutions is one-fourth of a percentage point above the rate payable by commercial banks.
The second innovation, introduced on November 1, was a regulation
permitting commercial banks to offer individual customers an automatic
transfer service whereby funds are automatically transferred from a
customer's savings account to cover needs for funds in the customer's
checking account. By the end of the year it is estimated that there were $3.2
billion in 420,000 accounts covered by this service. Use of these services can
be expected to grow over the future.
The introduction of MMCs influenced the growth of M2 by enabling
banks to retain time and savings deposits that they would otherwise have
lost. Growth in M 2 remained very strong in the third quarter, at a 10.8
percent annual rate, but slowed significantly in the fourth quarter to 4.5
percent.
The introduction of the automatic transfer service began to have a significant effect on the growth of Mi in the last 2 months of 1978. During
November and December, Mi declined $0.6 billion. In the absence of the
new deposit services, Mi probably would have risen by about $1 billion.




50

In response to this effect on the behavior of the conventional aggregates,
the Federal Reserve defined a new aggregate, Mi + . It includes, in addition
to Mi, all passbook savings accounts at commercial banks and all checkable
deposits at nonbank thrift institutions (negotiable order of withdrawal
accounts, demand deposits at mutual savings banks, and share draft accounts at credit unions). This aggregate thus includes all transactions
accounts plus those accounts from which transfers to the automatic transfer
service accounts are most likely to occur. The annual rate of growth of this
aggregate dropped from 6.1 percent in the first half of 1978 to 2.4 percent
in the second half.
Role of MMCs in Monetary Restraint
The new money market certificates played a critical role in the way the
economy responded to monetary restraint in J978. Experience would have
led one to expect that the large rise in interest rates would sharply curtail
the availability of mortgage credit during 1978, with strongly adverse effects
on home building. The growth of mortgage credit did taper off somewhat
during the year and residential construction activity did flatten out. The
magnitude of these responses was very small, however, compared with past
periods of tight financial markets.
In previous periods of sharply rising market interest rates, individuals
began at some point to divert funds from deposits in thrift institutions to
market securities because of the low ceiling rates on deposit instruments.
The growth of thrift deposits usually slowed to a 4-6 percent range
in such periods, and net new inflows (excluding crediting of interest) fell
to around zero. This necessarily slowed the acquisition of mortgages by these
institutions, and consequently housing credit dried up.
During late 1977 and early 1978 this same pattern began to emerge.
After the introduction of MMCs in the middle of the year, however, the
pattern was dramatically reversed. As a result, mortgage acquisitions declined much less than in previous periods of rapidly rising market interest
rates.
The introduction of these instruments does not wholly resolve the disintermediation problem or entirely buffer the housing market from credit
restraint. Home buyers are affected by the higher cost of credit, although
they are affected much less than before by the reduced availability of credit.
Furthermore, since mortgage rates do not rise commensurately with shortterm rates, the thrift institutions are confronted with reduced cash flow
for two reasons. First, the spread between the cost of new deposits and
the return from new mortgages narrows. Second, the composition of deposits
becomes more heavily weighted by the higher-interest certificates. Since
this is occurring faster than the mortgage portfolio is rolled over, the average
cost of deposits is rising relative to the average yield on mortgages. In early
1978, however, the spread between the return on the mortgage portfolio and
the cost of deposits had become quite large and the narrowing that occurred




51

in the second half of the year was relatively small. Therefore—barring a
prolonged period of very narrow spreads between mortgage rates and shortterm rates—savers, the thrift institutions, and the housing market will all
benefit from the new instrument.
The reduced sensitivity of mortgage credit availability to rising market
interest rates smooths the adjustment of the economy to credit restraint.
It also implies, however, that interest rates must move through somewhat
larger cyclical swings to achieve the effect on aggregate demand that would
formerly have resulted from variations in both credit availability and interest
rates. Such a change also means that the distribution and timing of the
response of the economy to monetary restraint will be different. The period
ahead will require adroit reading of the signals to judge the degree of
restraint that is occurring and is appropriate.
CREDIT FLOWS IN 1978
Credit flows had been very strong at the end of 1977 and remained so
through the first part of last year. The ratio of total funds raised in credit
markets (exclusive of corporate equities) to GNP reached a record peak
in the third quarter of 1977 and moved only slightly lower in the following
2 quarters. Some decline developed in the second and third quarters of
last year. The ratio of total private funds raised to private GNP remained
on a record high plateau from the third quarter of 1977 through the first
quarter of last year but then began to decline.
The composition of credit flows shifted during the year. Mortgage credit
flows peaked late in 1977 and then moderated somewhat. With the dollar
value of residential construction continuing to rise, the ratio of net home
mortgage extensions to household investment in residential construction
turned downward last year from a very high peak. The large volume of
mortgage credit that was being used in late 1977 and early 1978 relative
to residential construction suggested that homeowners were realizing capital
gains on houses when ownership changed hands and were using the funds
to finance other types of expenditures.
Consumer credit continued to grow strongly through the first half of the
year, reflecting the strength of new car sales and sales of other durables.
The rate of installment credit extensions leveled out, however, in the
second half of the year on a plateau slightly below the June peak.
Federal Government borrowing also declined relative to the total of funds
raised in credit markets. The moderation in Federal borrowing from domestic
sources resulted from the shift in fiscal policy previously discussed and also
from an increase in official foreign purchases of U.S. securities with dollars
obtained through intervention in foreign exchange markets.
The nonfarm, nonfinancial corporate business sector borrowed heavily in
the fourth quarter of 1977 and the first quarter of last year. Indeed, credit
market funds raised in the first quarter were more than a third greater than




52

a year earlier. The amount of funds raised leveled out subsequently at an
annual rate below this peak but exceeded all previous years except 1974.
Business borrowing from commercial banks, in particular, was exceptionally
heavy in the first half but slowed in the second half of the year. The strength
of capital spending relative to internal funds is the primary reason for the
rapid growth in business credit demands. The ratio of external funds raised
to capital expenditures rose to slightly under one-half in 1978, which is a
high though not unprecedented figure.
Efficiency of Financial Markets
Both of the innovations in financial markets described above work to
provide individuals with a competitive return on their savings. The automatic transfer services perform another valuable function: they reduce the
loss of efficiency associated with substantial shifts of funds from one type of
deposit to another in response to interest rate differentials. Furthermore, to
preserve the competitive position of nonbank thrift institutions, the Federal
Home Loan Bank Board is considering giving nonbank thrift institutions
authority to receive deposits from which third-party payments may be made.
Such a move might further stabilize their deposit flows.
These changes, however, entail cumbersome bookkeeping and transactions procedures. A further consolidation of the institutional changes initiated this year would be to move toward a uniform structure for commercial
banks and nonbank thrift institutions under which all of these institutions
would have authority to accept household checking deposits and to pay interest on them. The bill proposed by the Administration in the last Congress to
authorize negotiable order of withdrawal accounts for all U.S. banks and
thrift institutions was one approach to this reform.




53

CHAPTER 2

Reducing Inflation

E

CONOMIC POLICY IN THE UNITED STATES faces a formidable
challenge in the years immediately ahead. Inflation must be brought
under control if the strength of the economy is to be maintained and if the
significant gains in employment and output over the past 4 years are not to
be jeopardized. Unwinding an inflation that has been building for more than
a decade will require monetary and fiscal restraint to moderate the pace of
economic growth. We will have to learn to achieve social objectives within
the constraints of tight government budgetary policies. Widespread compliance with the President's standards for wage and price behavior will be
essential.
This chapter presents a diagnosis of our inflationary problem and explains
what the Administration is doing about it. Special factors were partly responsible for the acceleration of inflation during 1978,, as Chapter 1 indicated, but there was also a substantial increase in the underlying rate of
inflation. Unit labor costs rose sharply, reflecting some acceleration of wage
inflation and a deterioration in the growth of productivity. These developments, along with their important implications for economic policy, will be
analyzed in the following discussion.
THE 1978 ACCELERATION OF INFLATION
The current inflation has been gathering momentum for over 10
years. The acceleration began in the late 1960s, when the economic stimulus
of the Vietnam war added pressures to an economy already approaching
high employment. With the economy operating at very high rates of resource
utilization, the rate of inflation rose from less than 2 percent in 1965 to
about 6 percent in 1969.
In 1969, policies of monetary and fiscal restraint were applied to cool the
overheated economy, but the results were disappointing. The economy
headed into recession, and unemployment rose from 3J/2 percent of the
labor force in 1969 to over 6 percent by the end of 1970. Nevertheless,
inflation continued at a rapid pace. The rise of consumer prices, excluding
food, continued unabated in 1970, and the rate of increase of average hourly
earnings remained unchanged. W7hen inflation failed to respond significantly
to macroeconomic policy, a 90-day wage and price freeze was announced on




54

August 15, 1971; it was followed by a period of mandatory wage and price
controls.
Relaxation of the controls began in 1973 in response to distortions and
inequities that had begun to develop in the economy. The relaxation coincided with a second acceleration of prices, which was in part a consequence
of rapid economic growth. Between the fourth quarter of 1971 and the first
quarter of 1973, real gross national product (GNP) increased at an annual
rate of 7% percent, unemployment dropped sharply, and capacity utilization rose. The major inflationary pressures, however, came from a series of
large external shocks to the American economy. A simultaneous expansion
in virtually all the industrial countries and the 20 percent depreciation of
the dollar between mid-1971 and mid-1973 raised the cost of foreign goods.
A worldwide crop shortage caused food prices to soar. Finally, the oil embargo by the Organization of Petroleum Exporting Countries (OPEC) and
the subsequent rise in oil prices contributed to a nearly 60 percent increase
in the energy component of the consumer price index (GPI) from the end of
1972 to the end of 1975.
In early 1975 the rate of inflation fell substantially from the doubledigit rate of 1974. The severity of the 1974-75 recession was partly responsible. But smaller increases in food and energy prices and the end
of the price bulge associated with the lifting of controls were important contributing factors. By the middle of 1975 the underlying rate of inflation was
down to the 6 to 6^4 percent range. There was no further improvement
during the early stages of the recovery, despite continued high unemployment and much excess capacity.
Each of the two major episodes of accelerating inflation in the last decade
was fed in part by relatively stimulative fiscal and monetary policies, and
each was followed by a recession stemming in part from more restrictive policy actions. But in neither case did the increases in unemployment
and excess capacity bring inflation down to the levels that preceded the
acceleration.
Once under way, a high rate of inflation generates responses and adaptations by individuals and institutions that perpetuate the wage-price spiral,
even in periods of economic slack. Expectations develop that wages and
prices will continue to rise at a rapid rate. In response, an increasing proportion of income is adjusted to inflation by indexation arrangements. Employee groups attempt to match the wage gains of other workers in order to
avoid declines in their own relative earnings. And multiyear collective bargaining agreements, which now cover over 97 percent of the workers in large
collective bargaining units, provide pay increases that are more likely to reflect past conditions than the actual economic environment prevailing during
the term of the agreement.
The formal and informal adaptations to a long-standing inflation exert a
powerful force tending to sustain inflation even after the originating causes
have disappeared. Braking the momentum of past inflation would therefore




55

have been a serious problem for economic policy makers even without the
acceleration of prices and wages during 1978. The price and wage developments of this past year have made the task even more difficult.
INFLATION IN 1978
The rate of price increase rose markedly in 1978. Some of the acceleration
was the result of special factors discussed in the previous chapter: the sharp
rise in food prices early in the year and the fall in the value of the dollar
that exceeded the depreciation warranted by underlying economic conditions. A minor offset to this was the stability of world oil prices after OPEC
elected not to raise oil prices in the face of the sluggish world economic recovery and the consequently weak demand for oil.
The larger part of the 1978 acceleration, however, came from an unexpected increase in the underlying rate of inflation. The rise in consumer
prices, excluding food and energy, quickened from 6.4 percent in 1977 to
8.6 percent in 1978, as shown in Table 12. This is the development that has
posed the most serious challenge to economic policy.
The behavior of the underlying rate of inflation is related to movements
in costs. In 1978 the increase in unit labor costs in the private nonfarm
sector stepped up considerably, from 6.3 percent in 1977 to 8.9 percent
TABLE 12.—Annual rate of change in selected consumer and producer prices and
employment costs, 1960—78
[Percent 1 ]

Item

Relative
importance,

December
1977
(percent)

1960
to

1965

1965
to
1970

1970
to

1975

1976

1977

1978 2

Consumer prices

100.0

All items
Food
Energy
All items less food and energy.

1.3

4.5

6.9

4.8

6.8

9.0

17.7
8.6
73.7

1.5
.4
1.4

3.7
2.5
5.0

9.4
10.9
5.7

.6
6.9
6.1

8.0
7.2
6.4

11.3
7.0
8.6

100.0

.6

2.8

8.6

3.3

6.6

8.7

7.6

5.5

6.6

7.8

Producer prices for finished goods
All finished goods
Finished goods less foods

75.1

Private nonfarm business, all persons
4.0

6.4

8.2

8.5

7.6

9.8

3.8

5.9

7.3

7.7

6.9

8.7

.2

.5

.9

.8

.7

1.1

3.9

1.1

1.6

2.6

1.3

.0

5.2

6.5

5.8

6.3

8.9

1.1

Compensation per hour

4.2

6.6

5.2

5.9

7.9

Contribution of:
Wages and salaries and private fringesEmployer contributions to social insurance
Output per hour
Unit labor costs
Implicit price deflator

1
Preliminary.
2
Through 1977, changes are measured from December to December for prices and from fourth quarter to fourth quarter
for private nonfarm business data. For 1978, changes are from November to November for prices and from fourth
quarter to fourth quarter for private nonfarm business data.
3
Not available.
Sources: Department of Labor (Bureau of Labor Statistics) and Council of Economic Advisers.




56

in 1978. Both of the determination factors of unit labor costs contributed
to the acceleration. Compensation per hour went up from a 7.6 percent
rate of increase in 1977 to a 9.8 percent rate during 1978. Productivity,
which had risen only 1.3 percent for nonfarm business in 1977, advanced
even more slowly—at a 0.8 percent rate in 1978.
The acceleration of cost pressures during 1978 was unevenly distributed.
In manufacturing, unit labor costs, which had risen 5.8 percent in 1977,
increased at an annual rate of 6.0 percent in 1978. Productivity in manufacturing rose more rapidly in 1978 than in 1977 (3.5 compared to 3.0
percent in 1977). However, the most substantial rise in the rate of increase
of unit labor costs was in nonmanufacturing, where productivity actually
declined.
Most econometric analyses of the relation between prices and wages conclude that fluctuations in productivity growth that are expected to
be temporary are not usually translated into similar fluctuations in prices.
For that reason price movements in the nonfarm sector are less volatile than
year-to-year changes in unit labor costs. And in 1978 the sharp acceleration
in unit labor costs, stemming in part from the very poor productivity record,
was not fully matched by an acceleration in prices charged by nonfarm
producers. Even so, the rise in unit labor costs was still a major factor in the
acceleration of inflation (Chart 2).
Chart 2

Unit Labor Costs and Deflator,
Nonfarm Business
PERCENT CHANGE FROM YEAR EARLIER

16 -

A

A -

12 -

UNIT LABOR COSTS

8 -

/ i

1\

IN/"*

4
IMPLICIT PRICE ^
DEFLATOR

0

-4

/

V

V

111111 111 1111111111111 111111 I I I

1960

1962

/

1964

1966

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

1968

NOTE: DATA RELATE TO ALL PERSONS.
SOURCE: DEPARTMENT OF LABOR.




57

1970

1972

1974

1976 1978

EXPLAINING THE 1978 INFLATION
The worsening in the underlying rate of inflation during 1978 raises a
fundamental question for macroeconomic policy: Has the U.S. economy
reached full employment of its labor and capital resources? The question
involves three issues concerning demand and unit cost pressures that are
analyzed in the remainder of this section. The first is whether capacity utilization became so tight that there was excess demand in product markets,
driving up prices relative to costs. The second has two aspects: How much
did the wage acceleration that occurred in 1978 reflect excess demand in
labor markets, and do those markets now approximate conditions in which
further reductions in aggregate unemployment would raise the inflation
rate? The third issue relates to productivity: To what extent is the recent
disappointing behavior an aberration and to what extent does it reflect a
more fundamental slowdown in the potential growth of the economy during
the years immediately ahead ?
How Tight Were Product Markets in 1978?
During the course of the recovery, rates of capacity utilization have increased significantly, and they rose still further in 1978. At the end of 1978
the 86 percent rate of capacity utilization in manufacturing indicated
by the Federal Reserve index was still well below the highs of the
early 1950s and mid-1960s, and somewhat below the highs of the 1972-74
period (Chart 3). In the materials-producing industries, where high rates
of capacity utilization in 1973 were an important source of inflation, current rates of utilization have remained substantially below the 1973 peaks
(Chart 3).
Statistical measures of capacity utilization offer only an imperfect guide
to the presence or absence of excess demand in product markets. There is
other evidence, however, that industrial capacity was not under severe pressure. Typically, periods of capacity strain lead to sharp increases in unfilled
orders, especially in the durable goods industries. But ratios of unfilled orders
to shipments have remained far below earlier highs, both for durable goods
industries as a whole and for the nondefense capital goods industries
(Chart 4).
At the same time, excess demand developed in a few industries. For
example, the building materials industry appeared to be under demand
pressure because of capacity limitations. The very high and sustained level
of single-family home building, combined with a rapid growth in home
installation of energy-saving measures, led to a sharp increase in demand
for building materials and thus to strained capacity. As a consequence,
prices of lumber, wallboard, cement, insulation, and related products rose
steeply.
Moreover, although productive capacity was not generally strained over
the past year, continued growth of industrial production at rates experienced




58

Chart 3

Capacity Utilization Rates
PERCENT-^
MANUFACTURING

0 111 i 1 1 1 1 1 1 11 111 111 1 1 1 1 1 1 1 1 1 1 1 1 1 11 1 1 1 1 1 111 1111 1111 111 11 i 11 11 11 1111 11 11 1 1 1 1 1 1
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978

MATERIALS

90

80

70

0 1 1 i I 1 1 1 11 I i I I i i i 11 1 1 I i i 1 1 11 i 11 i i
I i i 11 i 11 1 1 11 I I I I I I i 11 i i 11 i 1 1 1 i i 11 i 1 1 1 1 1
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
U SEASONALLY ADJUSTED.
SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.




59

Chart 4

Unfilled Orders-Shipments Ratio,
Durable Goods Manufacturing
RATIO (SEASONALLY ADJUSTED)^

8

NONDEFENSE CAPITAL GOODS

TOTAL DURABLE GOODS

0

11 i i 1 i i i I i i i 1 i i i 1 i i i 1 i i i I i

1960

1962

1964

I I 1 1 I I 1 I I I 1 I I i 1 I II 1 I

1966

1968

1970

1972

11II11 II1 I

1974

y UNFILLED ORDERS-SHIPMENTS RATIO FOR LAST MONTH IN QUARTER.
SOURCE: DEPARTMENT OF COMMERCE.




60

1976

I I 11 I I

1978

in 1978 would move utilization rates into the range associated with excess
demand pressure on prices.
Pattern of Wage Behavior
Wages began to accelerate early in 1978. The exact quarterly pattern and
degree of acceleration vary according to the measure of the rate of wage
increase, but all broad indicators show a similar pattern of wage acceleration
in late 1977 and early 1978 (Table 13). For the second half of the year,
wage increases were lower than in the first, but still above the 1976 and
1977 experience.
TABLE 13.—Selected measures of the rate of wage increase, private nonfarm economy,
1976-78
[Percent change; quarterly data are annual rates]
1978
Measure

1976

19781

1977

II

1

III

IV 1

Average hourly earnings2

7.6

7.7

8.8

8.4

10.1

7.8

8.9

Adjusted hourly earnings index2 3___

7.4

7.5

8.2

9.2

8.4

7.3

7.9

Employment cost index 4

7.2

7.0

8.0

7.8

8.7

8.2

(')

8.1
6.8

7.6
6.6

7.9
8.0

6.6
9.1

8.2
9.1

8.7
7.8

(5)
(s)

Union .
Nonunion

__ _

1

Preliminary.
2 Annual changes are measured from fourth quarter to fourth quarter; quarterly changes for 1978 are from preceding
quarter. Data are seasonally adjusted.
3
This index, un
earnings series above it, excludes overtime pay in manufacturing and is adjusted
his ndex, unlike the average hourly eanings se
he
o
to eliminate the effects of interindustry employment shifts.
oyment shifts
4
g
s
December to December; change for 1978 is from September 1977 to
Changes for 1976 and 1977 are measured from D
September 1978; quarterly changes are within quarter. Data are not seasonally adjusted.
S t b
1978
t l
h
ithi
t
« Not available.
Source: Department of Labor, Bureau of Labor Statistics.

The pattern of acceleration and subsequent deceleration in the first 3
quarters of the year was dominated by the behavior of wages of nonunion
workers. In early 1978, for the first time in several years, nonunion wage
rates increased faster than union rates. This development is normal in labor
markets when unemployment falls, and the 15.2 percent increase in the
minimum wage for nonfarm workers on January 1, 1978, undoubtedly contribute to the high rate of nonunion wage increases in the first half of the
year.
The difference between union and nonunion wage changes in 1978 was
also influenced by the collective bargaining calendar: comparatively few
major contracts (those covering 1,000 or more workers) were scheduled for
renegotiation in 1978. Since increases tend to be largest in the first year of a
collective bargaining contract, years of light bargaining generally are years
of lower average wage increases for union members. Wage adjustments for
union workers may be attributed to three different sources: current settlements, past settlements (those that provide for deferred increases), and automatic cost-of-living escalators (Table 14). For the first 9 months of 1978,
the portion attributable to current settlements was down sharply from its

61
278-216

O - 7 9 - 5




1977 level, while that attributable to past settlements and automatic costof-living escalation was greater than in 1977. The decrease in the current
settlement portion came about solely because there were fewer new labor
agreements, not because the average wage increases granted in new settlements were smaller. As the lower part of Table 14 shows, the new settlements reached in 1978 in major contracts provided for somewhat larger
first year increases than settlements in 1977 had done.
TABLE 14.—Mean wage and benefit adjustments in major collective bargaining
agreements, 1976-78
[Percent]
1977
Type of change

19781

4 quarters ended

1976
1

II

III

IV

Year

1

II

III

Sept.
1977

8.1

1.2

2.9

2.7

1.1

8.0

1.3

2.6

2.5

8.3

7.5

3?
3?
1.6

.3
5
.3

1.0
1 4
.6

i n

1.3

5
3
.3

3.0
3 ?
1.7

s

.5

6
.3

6
1 4
.5

.5
1.1
.9

3.5
3.3
1.7

2.1
3.4
2.0

Wage rate settlements (1,000 or more
workers):
First-year adjustment
Average over life of contract . .

8.4
6.4

7.7
6.7

7 9
5.9

7 8
5.5

7 8
5.8

7 8
5.8

9 9
7.3

fi 9
6.1

7.5
6.3

7.7
5.6

7.8
6.3

Wage and benefit settlements (5,000 or
more workers):
First-year adjustment
Average over life of contract

8 «i
6.6

9.0
7.5

8 9 in ?
6.0 6.2

9 f)
6.3

9 fi 14 6
6.2 8.5

fi 7
5.9

7.0
5.7

8.8
6.0

9.1
6.5

Sept.
19781

Effective wage-rate changes:2
Total effective adjustments
Adjustment resulting from:
Current settlement3
Prior settlement
Escalator provision
Increases in new settlements:4

1

Preliminary.
Effective wage rate changes are wage rate changes actually going into effect per worker ynder major contracts in the
respective quarters. Detail may not add to total because of rounding.
3
Changes resulting from collective bargaining settlements made that calendar year.
* Quarterly data are at annual rates.
2

Note.—Quarterly data are not seasonally adjusted.
Source: Department of Labor, Bureau of Labor Statistics.

In comparison with 1977 settlements, labor contracts concluded in 1978
show an acceleration in wages over the life of the contract. Wage rate
adjustments in new settlements averaged 7.8 percent for the first year and
6.3 percent annually over the life of the contract during the year ending in
the third quarter of 1978, compared to 7.7 percent for the first year and
5.6 percent over the life of the contract for the same period a year earlier.
(These measures exclude cost-of-living adjustments tied to the future rate of
price inflation.)
There is considerable evidence that the responsiveness of wages to overall changes in economic conditions is significantly greater in nonunion than
in unionized labor markets. Changes in average wage rates paid to union
members are not significantly related to the contemporaneous unemployment
rate or alternative measures of labor market pressure, although they are sensitive to price changes because of cost-of-living adjustments. Most of the
inertia in average union wages is a by-product of multiyear labor agree-




62

ments, in which the size of agreed wage increases is more closely tied to
economic conditions during and immediately preceding the renegotiation
of a contract than to conditions during the term of the agreement.
Wage increases during the first year of a collective bargaining agreement
are about as responsive to labor market pressures as nonunion wages. Increases over the life of the agreement, however, are much less strongly related
to underlying market pressures prevailing at the time the contract is signed,
and deferred increases are essentially independent of prevailing market conditions. Consequently new inflationary pressures show up much more gradually in union than in nonunion wages. Conversely, when the initial causes
of inflation subside, the moderating effect is less evident in union wage
increases than in nonunion. Multiyear collective bargaining agreements
can therefore be an important source of wage inertia.
How Tight Were Labor Markets in 1978?
With unexpectedly slow growth of labor productivity, labor demand was
strong, and the reduction in the unemployment rate early in the year
exceeded expectations. Nevertheless the 6.2 percent unemployment rate
experienced in the first quarter of 1978 was higher than most estimates of
the rate of unemployment at which inflation will begin to accelerate. In the
remaining quarters of 1978 the rate was lower but relatively stable within
a range of 5.8 to 6 percent.
One approach to the question of labor market pressure is to examine
how closely labor markets in late 1978 resemble those of earlier periods
of accelerating wages. During 1978 the overall unemployment rate was
above the levels associated with accelerating wages in the late 1960s and
mid-1970s (Chart 5). Such a comparison could be deceptive, however,
because the demographic composition of the labor force has changed. Certain demographic groups have higher rates of turnover and therefore higher
rates of unemployment, and these groups now make up a larger proportion
of the labor force than in the past.
A better indicator of labor-market pressure is a fixed-weight index, constructed so that each demographic group has the same amount of influence
in each year as it had in a high-employment period like 1956, when the
aggregate unemployment rate was 4.1 percent. The fixed-weight unemployment rate has fallen relative to the official rate over the past decade, but
in 1978 the fixed-weight rate was still somewhat above the levels of earlier
periods of tight labor markets.
A third measure of labor market pressure is the unemployment rate of
a group of experienced workers with continuous labor force attachment,
such as the rate for men between the ages of 25 and 54. That rate, too, is
still somewhat above the levels associated with prior wage accelerations.
Tight conditions in labor markets also affect labor turnover rates. As the
number of job vacancies rises relative to the number of unemployed, employers first call back former jobholders; but when these are no longer avail-




63

Chart 5

Selected Unemployment Rates
PERCENT (SEASONALLY ADJUSTED)

10

RATE FOR MALES'
AGES 25 TO 54

11111111111111 111111111 h M \ n 111n1 it. 1111111111111fiHI ii 11111111111111111

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

i/THE FIXED-WEIGHT UNEMPLOYMENT RATE IS CONSTRUCTED UNDER THE
ASSUMPTION THAT THE COMPOSITION OF THE LABOR FORCE WITH
RESPECT TO SEVEN DEMOGRAPHIC GROUPS REMAINS UNCHANGED OVER
THE PERIOD SINCE 1956.
NOTE: SHADING INDICATES PERIODS OF ACCELERATING WAGES.
SOURCES: DEPARTMENT OF LABOR AND COUNCIL OF ECONOMIC ADVISERS.

able, vacancies are filled by hiring from the pool of unemployed and by
bidding workers away from other employers with offers of higher wages and
other benefits. In response to these incentives, a larger number of workers
quit their current jobs and take better-paying ones. As a result, both the
new hire and quit rates in manufacturing tend to rise as labor markets tighten
and wages accelerate. Both rates have reached postwar peaks in periods of
very tight labor markets during the past decade. As seen in Chart 6, however, the rate of new hiring in late 1978 was below these levels.
Over the past decade the composition of the work force has shifted toward
young and inexperienced workers, who tend to quit their jobs more frequently in the search for better employment. The quit rate associated with a
given degree of labor market pressure has therefore drifted up over the past
decade. Although measured quit rates were relatively high in late 1978, they
do not necessarily imply as much labor market pressure as they would have
done at these levels in the mid-1960s.
Although the measures of labor market tightness examined above did
not reach levels associated with accelerating wages in the past, that fact
alone is not sufficient to determine that excess demand was absent from




64

Chart 6

New Hire and Quit Rates In
Manufacturing
RATE PER 100 EMPLOYEES^

1 Ol

i i i I i i i I i i i I i i i I i i i I i i 11 n 11.1 tt I u i I n . .r I i i i I i i i I i i L h n t i i i I i i i I i i i I i i i I i i i I

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

J-/SEASONALLY ADJUSTED.
NOTE: SHADING INDICATES PERIODS OF ACCELERATING WAGES.
SOURCE: DEPARTMENT OF LABOR.

labor markets during 1978. There is some evidence, for example, that even
the fixed-weight and prime-age male unemployment rates associated with
accelerating inflation have moved upward over time (Chart 5). Some
analysts have suggested that increases in the level, duration, and availability
of unemployment benefits and other transfer payments have raised the unemployment rates for some groups in the labor force by facilitating longer and
more frequent periods of job search. These factors, together with changes
over time in the structure of labor markets, in rates of productivity growth,
and in the reaction of wages to past and expected rates of inflation, make it
difficult to estimate the rate of unemployment below which wage acceleration is likely to occur. A number of studies have attempted to determine
that rate, but have produced a wide range of results.
Although it is impossible to estimate the precise rate of unemployment
below which wages begin to accelerate, an analysis by the Council of
Economic Advisers and a review of the available studies do identify a range
of estimates that encompasses the consensus of most observers. The evidence
suggests that under current labor market conditions the danger of accelerating wages begins to mount as the rate of unemployment falls significantly
below 6 percent. During 1978 the unemployment rate moved into the top
of the range. The economy also underwent an acceleration of wages. But
since the range itself is uncertain, we cannot automatically conclude that
the lower unemployment rate caused the acceleration. A more careful look
at developments is necessary.




65

CAUSES OF WAGE ACCELERATION
The pattern of union and nonunion wage increases in 1978 is consistent
with the view that tightening labor markets were a partial source of wage
acceleration. But the moderation of the rate of increase in wage rates after
the first quarter casts doubt on the hypothesis that the unemployment rate
had declined to levels producing a sustained acceleration of wages and prices.
It suggests that the acceleration of wages in early 1978 may derive from
other factors.
To explore these issues the Council conducted an econometric analysis
of several potential explanations for the 1978 wage acceleration. The analysis examined two aspects of labor market pressure: the general balance between the demand for and supply of labor resources represented by the level
of the unemployment rate, and the more transitory pressures generated by
the rapidity with which unemployment decreases as employment gains
exceed labor force growth.
The rapid drop in unemployment in late 1977 and early 1978 was accompanied by a sharp growth of employment. It is quite possible that a very rapid
rise in the demand for labor relative to the increase in the labor force may
cause an acceleration in wages, even though the level to which unemployment falls does not imply excess demand for labor. A large increase in hiring,
occurring in a short period and spread across a large number of industries,
causes many workers to leave low-wage jobs as high-wage vacancies appear.
Employers in low-wage industries face a special difficulty when they must
not only add to their work force but replace those who have quit to
accept higher-paying jobs. Wage rate increases may therefore be particularly large in low-wage industries. While ultimately the pool of unemployed
might be enough to fill the new jobs without putting added pressure on wage
rates, the attempt to hire large numbers of workers quickly sets up temporary
imbalances in labor demand and supply that accelerate wage increases.
The Council's analysis confirmed that the level of the unemployment rate
early in the year played a limited role in the 1978 wage acceleration. However, pressures associated with the^ speed of the decline in unemployment
were an important source of increased wage inflation. The rapidity of the
reduction in the unemployment rate added about 0.1 percent to the adjusted
hourly earnings index during the fourth quarter of 1977 and another 0.3
percent during the first half of 1978, according to estimates made by the
Council. During the second half the unemployment rate held fairly steady,
and the absence of further pressure from this source contributed to deceleration of wage increases late in the year.
A second important factor in the wage acceleration was the minimum
wage increase in January 1978. According to the Council's analysis, between
0.2 percent and 0.4 percent was added to the adjusted hourly earnings index
in the first quarter by the change in the minimum wage. If the minimum
had not been raised, the index would have risen at an annual rate of around




66

7.9 percent in the first quarter instead of the 9.2 percent that actually occurred. Thus, over two-thirds of the acceleration of the index in the first
half of the year can be explained by the combined effects of the speed with
which unemployment declined and the increase in the minimum wage.
In summary, in late 1977 and early 1978 a marked but temporary acceleration of wages followed a rapid fall in unemployment. The acceleration reflected the influence of minimum wage increases and the unusual growth of
demand for labor during late 1977 and early 1978. The acceleration also
occurred at a time when productivity growth was very low, and the two
developments together added strong impetus to cost and price increases.
Although the rapidity of the drop in unemployment put some transitory
pressure on wage rates, the level of the unemployment rate during that
period was still above most estimates of the range associated with a sustained
increase in inflation. Later in the year, however, the recovery clearly brought
the unemployment rate into the top of that range. In view of the acceleration
in inflation which has occurred, a further reduction of the unemployment
rate during 1979 would run some risk of generating excess demand and
creating inflationary pressures in labor markets.
THE PRODUCTIVITY^ SLOWDOWN
Productivity growth in 1978 showed a very marked slowdown from accustomed rates, adding substantially to inflationary pressures and raising
fundamental concerns about underlying trends. With real GNP growth of
about 4 percent over the year, exceeding the normal trend rate of growth,
most observers expected that productivity in the private nonfarm sector would
grow at least 2 percent. Instead, as seen in Table 15, productivity showed
essentially no improvement, increasing only 0.6 percent in the course of the
year. The slowdown was concentrated in the nonfarm, nonmanufacturing
sector, where productivity actually declined 0.3 percent during 1978.
Productivity growth in manufacturing, on the other hand, was strong.
The slow productivity growth over the past 2 years adds to the accumulating evidence that the underlying trend in productivity growth
since 1973 has been substantially lower than in earlier periods. Between
1948 and 1965, productivity growth in the private nonfarm sector averaged
2.6 percent per year. In 1965-73 this rate declined to 2.0 percent. Since
1973, private nonfarm productivity growth has averaged less than 1 percent per year. In the following examination of recent evidence on productivity growth and the discussion of its implications for the growth of potential output, the key questions raised by recent experience are these: Was
the recent poor performance a nonrecurrent extraordinary event, from
which we will soon bounce back? Or does the recent lag in productivity indicate that the U.S. economy has entered a period of very slow productivity growth?




67

Productivity Determinants
During most of the postwar period the economy produced productivity
gains exceeding 3 percent annually, as shown in Table 15. However, a
number of the factors generating the strong productivity growth between
World War II and the mid-1960s have since been reversed.
TABLE 15.—Labor productivity growth, 1948-78
[Percent change per year]

Sector

1948
t
o
1955

Private business econopiy.
Nonfarm
Manufacturing
Nonmanufacturing.

34
.
27
.
33
.
24
.

1955
t
o
1965

1965
t
o
1973

31
.
26
.

23
.

29
.
24
.

24
.
17
.

20
.

1973
t
o
1977
10
.
.
9
15
.
.
6

1977
to
19781
0.4
.6
2.5
-.3

i Preliminary.
Note.—Data relate to output per hour paid for, for all persons.
Source: Department of Labor, Bureau of Labor Statistics.

For example, between 1948 and 1973 high rates of private investment
led to a growth in the capital-labor ratio (measured by the ratio of the
net nonresidential capital stock to aggregate hours worked in the private nonfarm sector) amounting to almost 3 percent per year. Since 1973, as a result
of low rates of investment, that growth rate has dropped to 1 % percent per
year. Although the precise effect of slower growth in the capital stock is hard
to measure empirically, analytical studies estimate that it could well have reduced productivity growth by up to one-half of a percentage point per
year from earlier trends.
Productivity growth has also been reduced by a dramatic shift in the
age-sex composition of employment. Starting about 1965, the children of the
postwar baby boom attained working age, adding many young and inexperienced workers to the labor force. Rapid increases in the labor force
participation of women also added to the supply of less experienced workers.
If average earnings of each age-sex group are used as a rough approximation
of the relative productivity of its members, losses in productivity growth due
to increases in the proportion of young and inexperienced workers in the
labor force may be calculated. Such demographic shifts in employment can
explain a reduction of 0.4 percentage point in the annual growth rate of
productivity between 1965 and 1973. Since 1973 this trend has slowed as
the new workers that entered the labor force between 1965 and 1973 have
become older; and, for the more recent period, the reduction has been closer
to one-third of a percentage point.
Increased economic and social regulation has aggravated the productivity
slowdown in a number of ways. Productivity is a measure of output produced per unit of resources used in production. Economic regulation, as in
transportation, precludes labor and capital from flowing to those uses that




68

have a relatively high value. The effects of social regulation are more complicated. The gains from social regulation—in such forms as reduced pollution and greater safety—are generally not included in measured output.
When an increasing fraction of society's labor and capital resources is diverted to producing these gains, measured productivity growth is reduced.
In addition, important indirect costs are generated by social regulation.
The implementation of new regulatory statutes is often associated with
considerable litigation and uncertainty which tends to reduce innovation
and investment. Moreover, some regulations specify or suggest the technology to be used to meet new standards, rather than prescribing a level of
performance to be attained. As a consequence, innovations that could meet
the standards at lower cost are not encouraged.
On an aggregate basis one private study estimates that for 1968-73 the
direct costs of compliance with environmental, health, and safety regulations may have reduced the annual growth of output relative to total inputs
in the private nonfarm sector by 0.1 percentage point. Similar estimates
for 1973-78 are incomplete, because of lags in the compilation of data,
but according to preliminary estimates these restrictions may have subtracted an additional 0.3 percentage point from annual growth of output
relative to inputs since 1973.
Productivity growth has fallen significantly in many industries over the
past several decades. (See Table 16.) The costs of regulations have increased
substantially in some of these industries but not in others. For example,
from 1950 to 1965 labor productivity in mining grew 4.3 percent per year,
but since 1973 it has declined at an annual rate of 6.1 percent. In the late
1960s and early 1970s stringent mine safety laws began to take effect. Some
part of the productivity decline in mining can be attributed to other factors,
and there have been such measurable benefits as lower accident rates, but
regulation has undoubtedly been very costly in terms of real output per hour
worked. In the utilities sector, growth in output per hour worked fell
successively from 6.1 to 3.5 to 0.2 percent per year in 1950-65, 1965-73,
and 1973—77. While a number of influences have been at work to reduce
productivity growth in this industry, the increase in environmental regulation
had an important bearing.
The loss of productivity growth as a consequence of increasing social
regulation does not itself imply that the costs of regulation exceed its benefits.
It has already been noted that the output measures generally used to calculate productivity do not include environmental improvements and other
benefits of regulation. Nevertheless, the magnitude of the productivity effects
does highlight two facts: regulation is very costly; and benefits should be
closely compared with costs in the design of regulatory legislation and
specific regulations.
Some have suggested that a decline in the intensity of research and development in the United States may be a significant cause of the productivity
slowdown. The evidence for such a view lies in the falling ratio of research




69

and development expenditures to total output; this ratio reached a peak of
3.0 percent in 1964, but has since dropped to an estimated 2.2 percent in
1978. Most of the reduction can be attributed to a substantial cutback
in military and space-related research—research that may have a somewhat
less direct effect in increasing aggregate output per hour worked in the
private sector than basic research or private research and development. Private industry has consistently provided about 1 percent of GNP for research
and development since the mid-1960s. In the course of time, however, the
direction of industry's research and development activity may have shifted
away from basic research and new product development in response to
such influences as the changed regulatory environment.
Little of the 1965-73 decline in private nonfarm labor productivity or the
further reduction in 1973-78 seems to stem from shifts in the industrial
composition of employment. Although movement out of the farm sector
added a sizable productivity bonus in the early postwar years, this process
had ended by the mid-1960s. Further, even though the proportion of the
work force engaged in manufacturing has grown smaller since 1965, the
level of manufacturing productivity has been about the same as that of the
private nonfarm sector as a whole; the sectors of the economy employing
larger proportions of the work force include some with higher and some with
lower levels of productivity, and hence the shift has left aggregate productivity more or less unchanged.
Productivity Growth Since 1973
Productivity growth in the nonfarm business sector since 1973 has been
unusually erratic. Although growth during 1976 was in line with the 1965-73
trend, there were abnormally low growth and even declines in 1973-74 and
1977-78. The productivity decline in 1973-74 was particularly striking.
Labor productivity in the nonfarm business sector fell in every quarter from
the second quarter of 1973 to the fourth quarter of 1974, dropping a total
of 4.2 percent in a 7-quarter period. On the basis of the usual relationship
between fluctuations in productivity and fluctuations in output, no more
than 1 percentage point of that decline could be attributed to the sharp
recession during the period. The additional drop of 3.2 percentage points
accounts for much of the difference between the expected 2 percent annual
growth rate between 1973 and 1977 and the 0.9 percent rate that actually
occurred.
In both 1977 and 1978, productivity growth was again disappointing.
Although private nonfarm productivity was expected to increase at least
2 percent per year, it grew instead at only 1.3 percent in 1977 and 0.8 percent in 1978. This latest deterioration in productivity indicates that the
slowdown in 1973-74 was not just a temporary aberration and adds to the
accumulating evidence that the secular trend in productivity growth may be
considerably less than 2 percent per year.




70

Recent deviations of productivity from its postwar trend have been so
pronounced that one is tempted to search for the influence of special factors.
Some suggest that the oil embargo of 1973-74 and the subsequent quadrupling of oil prices had an adverse impact on productivity growth. However,
it is difficult to find a mechanism by which an oil crisis could have such an
immediate and severe effect on the economy. Widespread declines in productivity growth rates would only occur as adjustment of production
methods to economize on energy took place. Actually, adjustment to the new
oil prices has been extremely slow. Moreover other countries in which energy
prices rose more than in the United States did not show such large productivity declines. In general, possible productivity-reducing effects occur as
firms substitute labor or cheaper fuels for oil, or as energy-inefficient plant
and equipment are replaced, but these effects will be spread very gradually
over a long period.
There is no obvious set of special factors that could explain the poor
productivity record of 1978. Year-to-year variations, however, have always
been substantial, and deviations from trend of as much as 1 percentage point
are not unusual. If the long-term growth rate of productivity has fallen well
below earlier rates, as now seems likely, a year with a very small increase in
production should occasion little surprise.
Part of the decline in the growth of private nonfarm productivity between
1965 and 1973 was attributable to reduced productivity gains in the conTABLE 16.—Productivity growth by industry, 1950-77
[Percent change per year]
industry

1977 output
share
(percent) 1

1973
to
1977

1965
to
1973

1950
to
1965

Agriculture..

2.9

4.9

3.6

3.0

Mining

1.5

4.3

1.9

-6.1

Construction.

4.3

3.4

-2.1

.3

Manufacturing:
Nondurable...
Durable

9.9
14.4

3.2
2.5

3.3
2.2

2.2

Transportation..

3.9

3.0

2.9

1.0

Communication..

3.2

5.3

4.6

6.7

Utilities

2.3

6.1

3.5

.2

Trade:
Wholesale.
Retail.....

7.3
10.0

2.6
2.3

3.4
2.1

-.8
.8

Finance, insurance, and real estate.

15.4

1.6

.2

2.3

Services

12.0

1.2

1.7

-.3

12.5

.4

.5

.1

100.0

2.7
2.6

2.0
1.9

1.1
1.1

Government.

_.

All industries:
Current weights
_
Fixed weight (1977 output weights).
1

Detail may not add to 100 percent because of rounding.
Note.—Growth data relate to output per hour worked for all persons.
Sources: Department of Commerce (Bureau of Economic Analysis) and Council of Economic Advisers.




71

struction and financial sectors. Statistics on productivity in these sectors (and
those in the government sector) are notoriously bad, and so it could be
argued that the apparent reduction in productivity growth during this period
was a statistical artifact. However, the further widespread decline since 1973
lends no support to that interpretation.
Table 16 shows the pattern of labor productivity growth (gross product
originating per hour worked) for 13 major industries. In almost every sector
of the economy the growth of productivity has slowed appreciably. Data for
1978 are not yet available; but, given the aggregate productivity performance last year, sectoral averages for 1973-78 will be even lower than for
1973-77, except perhaps in manufacturing.
POTENTIAL GNP
Behavior Since 1973
The erratic productivity performance of the last 5 years raises serious
questions about earlier estimates of the economy's productive potential.
Potential GNP is defined as the level of real output that the economy could
produce at high rates of resource utilization. The level of potential output
is less meaningful than its rate of growth. The latter gives the best estimate
of how much the economy can actually grow over the next few years without putting additional pressure on labor or product markets. Before making
a judgment of the future trend for potential output, it is useful to review
the growth of potential over the last 5 years and to examine recent behavior
of the unemployment rate.
The Council of Economic Advisers has undertaken several reexaminations
of the conceptual as well as the empirical basis of potential output over the
last 3 years. These studies led to a significant reduction in 1977 in the estimate of the growth of potential, lowering the estimate to 3J/2 percent annually for the period from the fourth quarter of 1968 onward. Previously, the
growth rate of potential had been estimated to be 4 percent for the period
from the fourth quarter of 1968 to the fourth quarter of 1975 and 3^4
percent thereafter. The 1977 revision, discussed in the 1977 and 1978
Economic Reports, puts the potential GNP in 1978 at $1,462 billion (1972
prices), about 5.6 percent higher than actual GNP.
The 1977 and 1978 estimates were based on a higher benchmark unemployment rate and on the optimistic assumption that the productivity decline
in 1973-74 was an aberration that would be subsequently corrected. The
underlying productivity trend was therefore assumed to be equal to that
observed between 1965 and 1973. For that assumption to prove correct,
strong increases in productivity would have had to occur since 1974. Productivity growth in 1975 and 1976 did show substantial improvement, keeping
open the possibility that productivity would return to the level indicated
by the 1965-73 trend; and early in 1978 initial productivity statistics suggested a sizable 3 percent gain for 1977. However, the subsequent down-




72

ward revision of the productivity statistics for 1977 and the very poor
productivity performance of 1978 make the earlier view untenable. It no
longer seems reasonable to assume that the exceedingly poor productivity
growth in 1973-74 and 1977-78 represented statistical aberrations or onetime events, implying no reduction in the long-term trend. Downward revisions of our estimate of long-term productivity growth and of potential
GNP are clearly necessary.
The uncertainty about the growth of potential output over the 1973-78
period requires one to distinguish three factors affecting productivity: its
long-term trend, its cyclical movements, and the erratic declines from trend
that occurred in 1973-74 and to a lesser extent in 1977-78.
It is possible to place rough bounds on the range in which the 1973-78
trend of productivity growth must lie by examining two separate views. The
optimistic view holds that 1973-74 was a period in which productivity and
potential output dropped as a result of nonrecurring factors affecting the
level of productivity, after which the long-term trend of productivity growth
resumed its earlier pace. On this basis we calculate the long-term trend rate
of growth in productivity from 1973 to 1978 to be about 2 percent per year
and the growth of potential GNP over this period to be 3.5 percent per
year. Such a view of productivity behavior interprets the 1977—78 performance as another marked aberration, which has temporarily reduced productivity well below its long-term trend.
The pessimistic view holds that the 1973-74 period was not extraordinary.
According to this view long-term productivity growth began to slow substantially after the mid-1960s, although unexpectedly favorable developments in late 1972 and in early 1973 disguised the fact. The poor average
performance of productivity since early 1973 reflects that slowdown, and
the particularly disappointing episodes in 1973-74 and 1977-78 are fluctuations around a greatly reduced long-term trend. According to this interpretation the estimate of potential should be based on a long-term growth
of productivity which follows a much slower pace after 1973. This pessimistic version produces an estimated long-term trend rate of productivity
growth during the past 5 years of around 1 percent a year, and a growth
of potential GNP of only 2.5 percent annually over the 1973-78 period.
Placing an exact number on recent potential growth is extremely difficult.
The growth of potential from 1973 to 1978 probably falls between the two
extremes. The 1973-74 productivity shock was to some extent nonrecurrent. But the deceleration in productivity in recent years is too striking to
ignore in estimating the long-term trend.
Unemployment Forecasts
Another way of analyzing the growth of potential output over the 1973—
78 period is to examine the actual behavior of real GNP and unemployment in this same period. Particularly since mid-1977, the behavior of the
unemployment rate has been a puzzle. In the economic forecasts underlying




73

the 1979 budget, for example, real GNP was forecast to rise 4.7 percent
over the 4 quarters of 1978 and an additional 4.7 percent in 1979. On the
basis of estimates that assumed a potential growth of 3.5 percent per year,
the unemployment rate was forecast to reach 5.8 percent in the fourth
quarter of 1979. In fact, it reached that level a year earlier, even though
real GNP growth in 1978 was less than expected.
The most common method of forecasting the unemployment rate relates
that rate to the gap between actual and potential GNP—the relationship
known as Okun's law. Over the postwar period a cyclical coefficient of 2^4
has been observed; that is, a reduction of 2% percentage points in the gap
between potential and actual GNP could be expected to lower the unemployment rate by about 1 percentage point. Although aggregate data may
be unreliable, there is some suggestion that the cyclical coefficient was closer
to 3 in early years and may have declined to near 2 in the 1970s.
The use of this relationship and previous estimates of potential GNP
produced substantial overestimates of the unemployment rate in 1977 and
1978. For example, from the fourth quarter of 1976 to the fourth quarter
of 1977, real GNP grew 5.5 percent, reducing the estimated GNP gap by
2 percentage points under the old definition of potential. The expected
reduction in the unemployment rate was 0.8 percentage point; the unemployment rate actually fell by 1.2 percentage points.
Last year produced a similar surprise: a 4.3 percent increase in real GNP
with a 3.5 percent growth of potential output should have lowered the
unemployment rate from 6.6 to 6.3 percent from the fourth quarter of 1977
to the fourth quarter of 1978. Instead, the unemployment rate was reduced
to 5.8 percent, 0.5 percentage point more than expected. Given the
unemployment rate at the end of 1976 and the actual path of output since
then, unemployment by the end of 1978 was 0.9 percentage point lower
than was expected, if it is assumed that potential GNP grew at 3.5 percent
per year. By revising downward our estimate of the growth of potential
GNP from 3.5 to 3.0 percent per year, about half the unanticipated drop in
the unemployment rate can be explained. The remainder is within historical error margins for the output-unemployment relationship.
Revised Estimates
Weighing recent trends in productivity and labor force growth, as well
as the unemployment-output relation, one can form a rough judgment about
the trend in potential output over the 1973-78 period. Clearly, placing an
exact number on potential growth is very difficult. On balance the Council's
view is that potential output has grown at an average rate of 3 percent during
the last 5 years.
The 3 percent overall growth rate of potential between 1973 and 1978
can be broken down into the following components: a 2.5 percent annual
growth in potential employment, a 0.5 percent per year decline in annual
hours per employee, and a 1 percent per year growth in productivity. Reflect-




74

ing the large decline in 1973-74, the 1 percent productivity growth during
the past 5 years was about one-half of 1 percentage point below our estimate
of the long-term trend (discussed below). But its effect in depressing potential GNP was offset by an annual growth in the labor force about one-half
of 1 percent above its long-term trend.
Chart 7

Actual and Potential Gross National Product
BILLIONS OF 1972 DOLLARS

1600

SEASONALLY ADJUSTED ANNUAL RATES

1500
1976 POTENTIAL
1977-78 POTENTIAL

1400

1300

1200
1979 POTENTIAL
ACTUAL GNP

1100

1000 I I I I I I

1968

i I

1970

1972

1974

I i

1978

1976

SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS-

The latest estimate puts potential GNP at $1,423 billion in 1978. Chart
7 shows the latest revision of potential output (labeled 1979 potential)
along with the two earlier versions. The revised data are in Table 17.
Actual GNP in 1978 was only about 2% percent below its potential level.
TABLE 17.—Potential gross national product and benchmark unemployment rate,
1973-78
[Billions of 1972 dollars, except as noted]

Year

1973...
1974
1975
1976 .
1977
1978....

Potential
GNP

Actual
GNP

GNP gap
(potential
less actual)

Benchmark
unemployment rate
(percent)

1,227.0
1,264.2
.
_

1,235.0
1,217.8

-8.0
46.4

4.9
5.0

1,302.1
1, 341.1
1,381.4
1,422.9

1,202.3
1,271.0
1,332.7
11,385.1

99.8
70.1
48.7
137.8

5.1
5.1
5.1
5.1

i Preliminary.
Sources: Department of Commerce (Bureau of Economic Analysis) and Council of Economic Advisers.




75

Future Trends
Projecting potential GNP growth into the future is subject to large errors.
Growth of the labor force in recent years has varied substantially. In the
past 5 years, the surprisingly low productivity growth has been offset, as
noted above, by higher than expected increases in the labor force, producing
more growth in potential output than would have seemed likely from the
low productivity statistics alone.
The wide variation in productivity growth rates since 1973—and our
inability to determine precisely the underlying trend of such growth during
these years—make predicting future rises in private nonfarm productivity
unusually hazardous. Improved growth in investment during the past 2 years
should help to improve productivity growth over the next 5 years. At
the same time, labor force growth should decline when the young people
born in the baby boom have entered the labor force. This demographic
reversal should also add to productivity growth, as the drop in the average
age and experience of the labor force tapers off. These positive developments, however, may well be offset to some extent by increased regulatory
burdens.
Studies by the Council of Economic Advisers indicate that the range
of estimates of productivity growth per hour lies between 1*4 and 2*4
percent annually over the next 5 years. These estimates are based on the
alternative hypotheses about the 1973-74 period discussed earlier. Taking
account of recent disappointing productivity developments, our forecast is
for a productivity growth of 1 l/<x percent annually over the next 5 years. This
projection is based on the view that some part—less than half—of the 1973—
74 drop in productivity represents nonrecurrent events; in addition, it does
not assume any rebound of productivity growth from recent trends back
toward those experienced in the 1950s or 1960s.
Other components of anticipated potential growth over the next 5 years
are these: an expected fall in hours per employee of one-half of 1 percent
annually; an average rise in the labor force participation rate of threefourths of 1 percent annually; and a rise in the relevant population averaging 1J4 percent annually.
Taken together these components imply a growth in potential output
over the 1978-83 period of 3 percent annually, the same as the revised
estimate for 1973-78. It is recognized that we are in a period of adjustment to new trends in energy, regulation, and international competition,
that an attempt to estimate the underlying trend is therefore extremely
hazardous, and that estimates of productivity growth are particularly subject to large margins of error.
ECONOMIC POLICY IN AN INFLATIONARY ENVIRONMENT
In recognition of the need for a balanced approach to the problem of
inflation, the Administration announced a three-part anti-inflation program




76

in October 1978. The program sets out the basic objectives for economic
policy in 1979. As the first element of the program, fiscal and monetary
policy will be used to achieve and maintain a balance between aggregate
demand and supply that is conducive to a reduction in inflation. The second element is a set of explicit, voluntary wage and price standards designed
to reduce inflation. The third consists of an effort to reduce the direct contribution of government to inflation by reducing the cost of regulatory actions. In the remainder of this chapter the policy initiatives associated with
each element of the anti-inflation program are discussed.
AGGREGATE DEMAND POLICY
During the course of an economic recovery, a stage is reached at which
the emphasis of macroeconomic policy must switch from efforts to strengthen
growth in economic activity to measures that restrain inflation. The U.S.
economy passed through that stage during 1978. The disappointing performance of productivity, the related sharp drop in unemployment, and the acceleration of inflation brought the economy to that position somewhat earlier
and more abruptly than had been expected. Reducing inflation must be the
top priority of economic policy in 1979. Unless we bring inflation under
better control, the progress made during the past several years toward recovering full employment of our economic resources will be jeopardized.
Since the trough of the recession in early 1975, total real output of goods
and services has grown at an annual rate of 5 percent, or about 2 percentage points per year faster than the economy's long-term potential. The gap
between actual economic performance and the level made possible by our
resource base has therefore steadily diminished.
Job creation during this recovery has proceeded at an extraordinarily rapid
pace, especially during the past 2 years. Overall unemployment has therefore
declined substantially despite record increases in the civilian labor force.
Nevertheless, unemployment rates remain extremely high for some major
segments of the population. Both here and abroad, structural unemployment
represents an unacceptable waste of economic resources and a severe social
problem. But the problem cannot be dealt with by an expansive aggregate
demand policy without generating further inflationary pressures. As pointed
out in Chapter 3, the task must be addressed with measures such as targeted
employment tax credits and training and jobs programs aimed directly
at those who cannot find jobs even in a relatively fully employed economy.
Earlier in this chapter evidence was cited that excess demand pressures
in most labor and product markets were not a dominant factor in the recent acceleration of inflation, except for a period in late 1977 and early
1978 when the rapidity of decline in unemployment contributed to an
acceleration of wage increases. But the analysis also indicated that the economy has approached the point where the overall margin of unused resources
is very slim. By late 1978 the cyclical component of unemployment was down
to relatively small proportions, as evidenced by various measures of labor

77
278-216 O - 79 - 6




market tightness, and the gap between the economy's actual and potential
output had shrunk from 7.7 percent of potential in 1975 to 1.8 percent in
the fourth quarter of 1978. Moreover, the outlook for growth in productivity is very uncertain. Since we are not yet able to say precisely why productivity gains were so weak last year, we cannot be confident that our
estimate of the GNP gap and our forecast of growth of potential GNP are
correct.
For all of these reasons it is essential that economic policies be restrained.
Economic growth must slow to a moderate and sustainable pace—one that
avoids adding the effects of excess demand to existing inflationary forces.
As Chapter 3 describes in detail, the Administration is forecasting a
growth rate of real GNP amounting to 2% percent over the 4 quarters of
1979 and 3^4 percent in 1980. The average growth rate over the 2 years, 2?4
percent, is slightly below the estimated long-term growth potential of 3.0
percent. If growth in the labor force and productivity is about in line with
long-term trends, the margin of slack between actual and potential
GNP will increase slightly over the next 2 years, and market forces can
work together with the pay and price standards announced by the President
on October 24 to moderate inflation.
Restrained fiscal and monetary policies are an essential ingredient of the
Administration's strategy for combating inflation. Monetary and fiscal restraints alone, however, are not equal to the task of unwinding an inflation
that has been under way for more than a decade and has become
deeply embedded in expectations and in the normal way of doing business
by consumers, workers, labor unions, and business establishments. Experience since the late 1960s, reviewed at the beginning of this chapter, amply
bears out that conclusion.
The stubborn resistance of inflation to the traditional remedies reflects
the fact that the rate of wage and price increase is relatively inflexible in
the face of slack demand. As last year's Economic Report discussed in more
detail, there is some evidence that wage rates over the past quarter century
have become progressively less responsive to the balance between aggregate demand and supply in labor markets. Reductions in output and
major increases in unemployment are no longer as effective in slowing the
rate of wage and price increase. The resulting loss of output, of jobs, and of
human dignity pays only modest dividends in lower inflation.
A political consensus exists in our country today that inflation is the
Nation's most serious economic problem, and that fiscal and monetary
discipline is needed if inflation is to be reduced. The inflationary problem
can be dealt with most successfully by persisting with the discipline of antiinflation policies for an extended period even if economic growth for a time
should fall below the path that is now forecast. The chances of maintaining
the necessary consensus long enough to make real gains against inflation
will be much greater if we avoid an overdose of restraint that leads to
sharp increases in unemployment, reductions in output, and stagnation of
investment.




78

The Roles of Fiscal and Monetary Policies
The objective of aggregate demand policies for 1979 and 1980 is thus
clear. To avoid creation of excess demand, economic growth needs to slow
to a pace at, or somewhat below, the long-term potential rate of expansion.
Fiscal and monetary restraint is needed to accomplish that aim. The
restraint, however, must be applied in a measured way, to moderate growth
without producing a recession.
As Chapter 1 indicated, the course of fiscal policy began to shift toward
restraint during 1978. In fiscal 1979, the year beginning in October 1978, the
budget deficit will decline to about $37 billion, or $11 billion less than
in the prior fiscal year. In fiscal 1980 the deficit will drop an additional $8
billion to a level of $29 billion. Further reductions are expected in succeeding
fiscal years. To reach these results we must keep a very tight rein on the
growth of expenditures. In fiscal 1980, Federal outlays will decline to 21
percent of GNP from 22 percent in fiscal 1978.
Given the course of fiscal policy being pursued by the Administration, the
task of reducing inflation will not fall on monetary policy alone. Success in
the struggle against inflation will require that monetary and fiscal policies
work together; the objective of slowing economic growth while avoiding a
recession will necessitate very careful coordination and balance between fiscal
and monetary policies.
The task of mapping the appropriate course of monetary policy will not
be easy. Monetary restraint in 1978 did not affect aggregate demand in the
way that past history would have suggested, nor will it do so in 1979 and
1980. As discussed in Chapter 3, institutional changes in financial markets,
by altering the availability of credit to private borrowers, have reduced the
degree to which changes in monetary policy affect spending. In today's
economy, monetary and credit policies increasingly influence private investment and consumption through fluctuations in interest rates and associated
movements in financial asset prices, rather than through changes in nonprice
terms of credit.
This development has both negative and positive aspects from the standpoint of economic stabilization policy. On the negative side, monetary policy
is likely to affect aggregate demand with even longer lags than it once did.
Since our ability to forecast future developments is very limited, the task
of identifying the appropriate course of monetary policy has become more
difficult. On the positive side, however, monetary policy has been changed
from a very harsh and selective tool of economic stabilization to one whose
influence on aggregate demand is more gradual and evenly distributed.
Working together with fiscal policy, monetary restraint, prudently applied,
can be used more successfully than before to reduce economic growth to
a modest but sustainable pace and thus create a favorable climate for an
unwinding of inflation.
The American people and the Administration look forward to a decline
in nominal interest rates from their present very high levels. It must be




79

clearly recognized, however, that a significant and lasting drop in interest rates cannot be expected until inflation begins to recede. When that
happens, interest rates can and should decline. In a less inflationary environment it will also be possible to support adequate real growth with a slower
expansion in the monetary aggregates than is currently required.
STANDARDS FOR WAGE AND PRICE BEHAVIOR
General macroeconomic policies can create an appropriate market environment for unwinding inflation. However, 10 years of inflation preclude
achievement of a given deceleration of prices solely through aggregate demand policy without much more demand restraint and loss of growth than
would have been the case in earlier periods. Unless ways are found to brake
the momentum of self-perpetuating wage and price increases that have
acquired a prominent place in our private behavior, inflation will continue
at an unacceptably high rate.
In recognition of this fact the Administration at the beginning of 1978
called for a slowing of wage and price increases. Each company was asked to
hold its 1978 price and wage increases below the average of the prior 2 years.
Although some individuals and groups did make an effort to meet the standard, the program was not generally effective. The deceleration standard was
not specific enough to provide a clear guide for wage and price decisions.
The Administration therefore incorporated more explicit standards into
the anti-inflation program announced in late October. The voluntary program now includes an explicit numerical ceiling for wage and fringe benefit
increases as well as a price deceleration standard for individual firms. The
potential effectiveness of the program is heightened by expanded monitoring, by relating Federal procurement actions to the standards, and by an
innovative program of real wage insurance designed to encourage compliance. The pay and price standards were published in preliminary form on
November 7, followed by a 30-day period for public comment. On the basis
of the comments offered, and after consultation with business and labor
groups, some modifications in the detailed specifications were announced
on December 13. The final standards were published in the Federal Register
on December 28.
The pay standard limits the increase in hourly wages and private fringe
benefit payments to a maximum of 7 percent for each employee group in a
company. Employee groups subject to the pay standard are: (1) individual
groups covered by major collective bargaining agreements; (2) other nonmanagement personnel; and (3) management personnel. This grouping
takes account of the differing institutional arrangements for setting wage
rates and prevents an inequitable distribution of wage moderation1. It also
permits considerable flexibility in distributing wage changes among individuals within a group in response to economic circumstances, equity, and other
factors, so long as the average increase for the employee group meets the
standard.




80

In collective bargaining situations a newly negotiated contract in which
wage and fringe benefit increases average no more than 7 percent annually
over the life of the contract is consistent with the pay standard, provided
that the increase is no greater than 8 percent in any year of a multiyear
agreement. In determining compliance with the pay standard, provisions
for cost-of-living adjustments will be cost out on the assumption of a
6 percent annual rate of inflation in the consumer price index over the life
of the contract. The standard therefore leaves room for complete flexibility
in allocating the pay increase between wage and fringe benefits, and between
fixed increases and cost-of-living adjustments. Formal collective bargaining
agreements signed before the announcement of the anti-inflation program
and (for nonunion employee groups) annual pay plans in operation by
October 1, 1978, are not subject to the pay standard.
In determining compliance with the pay standard, employers' contributions that are required to maintain the existing level of health and
pension benefits are distinguished from contributions made to improve the
level of benefits. Increases above 7 percent in the costs of maintaining existing health benefits are not counted in judging compliance. Special provisions also apply to pension plans that pay specified benefits at retirement.
Changes in employers' costs resulting from changes in funding methods,
amortization periods, actuarial assumptions, and plan experience are not
included as pay-rate changes, but changes in employers' costs resulting from
plan amendments, changes in the benefit structure, or the effect of wage
and salary changes on benefit levels are included. Further details on the
application of the pay standard to various pay plans can be found in the
regulations issued by the Council on Wage and Price Stability on December
28, 1978.
In the interest of equity and improved productivity, some exemptions
from the pay standard are allowed. First, workers who earned an hourly
wage below $4.00 on October 1, 1978, are exempt from the standard. Second, wage increases in excess of the standard are acceptable if they are
offset by explicit changes in work rules and practices that demonstrably
improve productivity to a matching or greater degree. Third, wage increases
above the standard are justifiable to preserve a historically close tandem
relationship with another employee group. Finally, where several explicit
and tightly defined criteria show that pay rate increases above the pay standard are necessary to attract or retain employees in a particular job category
because of an acute labor shortage, the amount of the excess may be exempted from the standard.
Rates of price increase tend to vary considerably more from industry to
industry than rates of wage increase. This occurs because rates of productivity growth and the relative importance of nonlabor costs differ across
industries. Realistic standards must recognize this inherent variation and
its significance as an allocational device in a market-oriented economy. At
the same time, it is important to avoid a variable price standard based upon




81

a simple pass-through of costs, since such rules can weaken the incentive to
improve productivity..
The Administration's approach to the deceleration of inflation avoids
these pitfalls. The price standard requires that individual firms limit their
cumulative price increases over the next year to one-half of a percentage
point below the firm's average annual rate of price increase during
1976-77. Some industries had abnormally high or low rates of price increase
during this base period. These extremes are taken into account by limiting the price increase for an individual firm to no more than 9.5 percent,
and by regarding any increases of 1.5 percent or less as complying with
the standard. If increases in hourly labor costs within a firm decelerate by
more than one-half of a percentage point relative to the 1976-77 rate
of increase, the deceleration of prices must be commensurately greater to be
in compliance with the standard. Certain categories of goods and services,
specified in the price standard regulations issued by the Council on Wage
and Price Stability, are excluded from the calculation of a company's average
price change.
A company that is unable to comply with the price deceleration standard because its average price change cannot be calculated, or because of
uncontrollable price increases in the goods and services it buys, is asked
to satisfy a two-part profit limitation. The company's profit margin during
the program year should not exceed the average profit margin for 2 of the
company's last 3 fiscal years prior to October 2, 1978. Besides this, however,
program-year profit should not exceed base-year profit by more than 6.5
percent plus any positive percentage growth in physical volume from the
base year to the program year.
Finally, a percentage margin standard is available to companies in the
wholesale and retail trade and in food manufacturing and processing industries as an alternative to the price standard. Details on this alternative are
provided in the regulations issued by the Council on Wage and Price
Stability.
Real Wage Insurance
One of the obstacles to the success of voluntary wage and price
standards is fear on the part of each group of workers that their observance
of the wage standard could lead to a loss of real income if others do not
cooperate, or if uncontrollable events, such as a serious crop shortage,
result in price increases. Faced with such uncertainty, and basing their
price expectations on recent patterns of inflation, many workers might be
reluctant to cooperate with the standards program. To improve the acceptability of the standards, the Administration is proposing to the Congress an
innovative program of real wage insurance for those who observe them.
Under the real wage insurance proposal, employee groups that meet the
7 percent pay limitation would receive a tax credit if the consumer price
index increased by more than 7 percent over the year. The rate of the tax




82

credit would be equal to the difference between the actual increase in the consumer price index and 7 percent, up to a limit of 3 percentage points (10
percent inflation). This rate will be applied to each employee's wages up
to a maximum of $20,000 per job. Employee groups that are exempt from
the pay standard (low-wage workers and those under existing collective bargaining contracts) will qualify for real wage insurance if their average pay
rate increase is 7 percent or less during the program year.
The most important factors determining the cost of the wage insurance
program are the rate at which workers participate in it and the rate of
inflation. Compliance with the standards by firms and employees will reduce
labor costs, and price increases should move down correspondingly. But there
are other, less predictable factors that influence the overall rate of inflation,
such as changes in the prices of food and fuel, in exchange rates, and in
productivity. The uncertainty surrounding the behavior of these factors
means that the cost of the program itself is uncertain.
With reasonable assumptions concerning participation and the likely behavior of other economic factors influencing inflation, we can arrive at general estimates of the program's cost. Some 87 million workers are potentially
eligible for the program, although not all are likely to qualify for the wage
insurance. For example, low-wage workers and those covered by existing
contracts are exempt from the pay standard. Given expected 1979 wage increases for these groups, most workers who are exempt from the pay standard
are unlikely to qualify for real wage insurance. Estimates of the cost of the
program thus depend in part on assumptions concerning the likely compliance of workers who are not exempt from the standard.
If three-fourths of those workers are in compliance, the real wage insurance
program would result in a budget cost of approximately $5 billion for each
percentage point of inflation in excess of 7 percent. Lower compliance by
nonexempt employee groups would raise the expected inflation rate but lower
the number of workers eligible for the tax credit. In this sense the potential
budgetary impact of the insurance program is self-limiting.
As noted above, the expected budgetary cost of the program will also
depend importantly on productivity growth and the behavior of food and
energy prices. Estimates of the budgetary impact, adjusted for the expected
response of the consumer price index to the oil price decisions reached by the
OPEC cartel in December 1978, appear in Table 18.
With three-fourths compliance by employee groups who are not exempt,
the expected budgetary cost of real wage insurance would vary principally
with productivity and food price developments, as shown in Table 18. With
full compliance, the most likely payout would be zero, since price increases
should be less than 7 percent under each combination of food price and
productivity assumptions in the table. As a result, even without the incentive
provided by real wage insurance, substantial compliance with the standards
would yield a significant reduction of inflation and a gain in real wages.




83

TABLE 18.—Estimated annual budgetary cost of real wage insurance proposal
[Billions of dollars]
Assumed productivity growth
Assumed food price increase
0.6 percent
8 percent..

i2.5

10 percent.

4.5

1.1 percent
0
2.0

1
This is the estimate in the fiscal year 1980 budget and is based on the current forecast for food price increases and
productivity growth.
Note.—Calculations assume three-fourths compliance by nonexempt employee groups.
Source: Council of Economic Advisers.

Real wage insurance is a novel use of incentives to foster wage and price
restraint. The tax credits are not designed to compensate, on a straight
dollar-and-cents calculation, those who might have received higher wage
increases but chose to observe the standards. Even with real wage insurance
in effect, observance of the standards by particular groups of employees
requires a recognition of the national interest in individual wage and
price decisions and an awareness of the long-run gains that everyone can
enjoy if inflation is reduced. Real wage insurance offers to groups of employees not a cash "buy-out" of higher pay increases, but an important protection against the major risks associated with compliance.
Although the proposed program would rely on the tax system to provide refunds if inflation exceeds 7 percent in 1979, it is different in purpose, design, and effect from proposals to index the general revenue system
in such a manner that the connection between inflation and tax revenues
would be reduced or eliminated. The overriding purpose of the plan is to
reduce inflation directly by inducing cooperation with the pay and price
standards of the anti-inflation program. Tax indexation proposals, on the
other hand, seek to insulate the tax payments of individuals and corporations
from the effects of inflation, but they do not reduce inflation.
Sectoral Problems
The pay and price standards are designed to be guides for decision-making
agents who have discretionary power in wage and price determination. Even
with widespread compliance, however, it will be necessary to supplement the
standards with special programs tailored to unique inflationary problems in
some sectors.
Prices of health care, for example, have generally outpaced overall inflation, and expenditures for such care constitute a steadily escalating share of
our national output. Yet the health care industry is not one in which market
forces can be expected to provide an adequate restraint on price increases.
The Administration has taken measures to strengthen health planning and to
encourage growth in Health Maintenance Organization programs, which
embody incentives to promote cost consciousness. The Administration is also
seeking a substantial deceleration in the growth of hospital charges,




84

which are the largest and fastest growing component of medical care costs,
through voluntary standards for hospital cost increases. For 1979 the ceiling
on such increases is 9.7 percent, which implies a deceleration of over 2
percentage points from current rates of hospital cost increases. The President will propose to the Congress a legislative initiative on hospital cost
containment that would establish a hospital cost standard in law.
Professional workers in the health industry are also subject to the general
standards for professional fees, which apply to companies providing professional services on a fee-for-service basis. A company will be in compliance with the standard if the average rate of change in its fees does
not exceed 6.5 percent and if the increase in the fee for any single service
does not exceed 9.5 percent.
Food price changes have accounted for a major part of the recent
inflation and in general follow a more erratic year-to-year course than other
prices. At the farm level, price changes are usually the result of weather
conditions and other supply-side shocks beyond the control of individual
farming units. The monitoring of these prices will therefore focus on
overall market trends. Where price increases in particular commodity
markets exceed the overall inflation rate and are not justified by changes
in costs, administrative actions to expand supply will be considered.
At the retail level, individual firms in the food processing and distribution sectors will be expected to adhere to the price standards with respect
to increases in margins. The Department of Agriculture and the Council
on Wage and Price Stability will cooperate in a joint effort to monitor
cost, price, and marketing margins. Efforts will be made to ensure that lower
commodity prices at the farm level are quickly reflected in retail prices.
Moreover, decisions on 1979 support and import levels have been made with
careful attention to their impact on inflation.
REGULATORY POLICY
Most of the regulatory activities of the Federal Government can be classified into two main groups. Social regulation seeks to control threats to the
environment and to human health and safety that arise as an undesirable byproduct in the production and use of goods and services. Economic regulation controls the prices, wages, conditions of entry, or other important economic characteristics of particular industries. While the Administration's
efforts toward regulatory reform cover many areas, their essential aim is to
minimize the costs and improve the effectiveness of social regulation and
to reduce the scope and rigidity of economic regulation.
Economic Regulation
The 1978 Economic Report discussed in some detail the current problems
with economic regulatory programs, indicating that in many industries the
regulatory structure established in the past is no longer suited to present
economic conditions.




85

The President recognized this difficulty in the case of the airline industry,
and the Congress agreed by initiating the first deregulation of a major industry by legislative action in recent history. Under the Airline Deregulation
Act of 1978, entry and price regulation of domestic airlines will be phased
out by 1982 and 1983 respectively. During the transition, the act provides
much greater freedom and flexibility in entry and fares than was previously
the regulatory norm. The new law strengthens the already substantial impetus to competitive forces that the industry was given last year by the Civil
Aeronautics Board. The board's liberalizing actions on fares and entry produced markedly lower fares along with sharp increases in air travel, load
factors, and airline earnings. The provisions of the new legislation should
lower prices even more and broaden the variety of services to consumers.
In the coming year the Administration will support legislation that will
extend the principles and benefits of airline deregulation to the surface
transportation industry. The inefficiencies produced by price and entry
regulation of the trucking industry are well known: empty return trips,
restrictions on peak-offpeak pricing, anomalous commodity class rates, and
lack of price competition. For example, in New Jersey and California,
where such restrictions do not apply, trucking rates for unregulated intrastate traffic undercut comparable interstate rates by 10 to 15 percent.
The current problems with rail regulation are different. Rates of return
for the rail industry fall below the all-industry average, and the number of
bankruptcies in the industry has historically been above normal. At the same
time, the principal rationale for government regulation—protection from
monopoly—has been eroded by competition from trucks and shifts in population. The financial difficulties thus created have been compounded by Interstate Commerce Commission regulation that tends to slow or prevent
rail abandonments and to inhibit railroads from reducing rates to meet competition from trucks and water carriers. The adverse effects of competition
from other means of transportation and the Interstate Commerce Commission's regulation of railroad earnings have been offset up to now by substantial Federal subsidies. Unless regulation of the rail industry is relaxed, the
inefficiencies and necessary subsidies are likely to continue to grow.
Social Regulation
In recent years social regulation has greatly extended its scope and increased its complexity. Much of this heightened activity has been in response to growing public concern about an ever-widening range of environmental, health, and safety problems. It has also been spurred by our increasing ability to detect potentially harmful health effects from chemicals
or chemical reactions. Controlling the harmful side effects of economic
activity produces substantial benefits to society. But it also imposes costs,
and these have mounted significantly as the scope and stringency of regulation have increased.




86

Our measurement of regulatory costs and benefits is highly imperfect.
In addition, measures of the benefits from regulatory provisions—such as
improvements in the environment and in health and safety—are generally
excluded from the current national income and product accounts. The resources devoted to producing those benefits are not available for producing
other outputs. As a society, we accept a tradeoff of lower measured output
for increases in unmeasured output in the form of general environmental
quality.
Once incurred, the costs of regulatory actions enter into the wage- and
price-setting mechanisms of the economy. Most of the costs of regulatory
action show up not as governmental budget expenditures, but as increased
costs to industry. Acceptance of higher prices relative to wages and other
money incomes is the way in which society pays for the benefits of social regulation. In fact, however, our economic institutions and measures of prices do
not distinguish between these sources of price increases and others. Individuals and groups try to escape paying the costs of regulation by increasing
wages and other forms of income to match the higher prices. The result is an
additional round of price increases. But the costs of regulation cannot be
avoided, and widespread attempts to do so simply add to inflation.
Both the large impact of government regulation, measured by its costs
and bnefits, and the way in which the costs add to inflation, highlight the
responsibility of all branches of government to make sure that regulations
are both necessary and efficiently designed. This Administration has undertaken a number of steps toward that goal.
Present Efforts
Effectively managing the regulatory functions of government entails
two tasks. The first is to improve the design of individual regulations.
They should be confined to situations where they are necessary; they should
set standards that will meet statutory objectives without being needlessly
stringent; and they should minimize the costs of meeting those standards.
The second task is to view the regulatory process comprehensively to judge
how all the regulations being issued will affect costs and prices, the use of
national resources, and the economic situation of particular industries and
sectors.
The effort to improve the cost effectiveness of individual regulations
began in 1974 with the requirement that regulatory agencies of the executive
branch analyze the costs and benefits of major new regulatory proposals, as
part of the process of preparing regulations. In 1978 the President broadened
this requirement and also took steps to ensure that these analyses were reviewed not only by the regulatory agencies, but by the other economic
agencies of the executive branch as well. The Regulatory Analysis Review
Group was created, with representatives from both regulatory and economic
agencies, to review several of the most important regulatory proposals
each year.




87

During its first year, the review group submitted for the public record
analyses of five major regulatory proposals having substantial economic
effects: the acrylonitrile standard and generic carcinogen policy of the Occupational Safety and Health Administration, the ozone standard proposed by
the Environmental Protection Agency, the Department of Transportation's
regulation to provide equal access for the handicapped, and the Department
of the Interior's surface mining regulations. Analyses of the Environmental
Protection Agency's new source performance standards for steam electric
plants and the Department of Energy's proposed coal conversion regulations
for electric utilities and general industry were in progress at year-end.
The task of ensuring that regulations do not impose undue costs extends
beyond the analysis of newly proposed regulations. On March 23, 1978, the
President issued an executive order requiring agencies to establish a "sunset" procedure for regulations previously issued by the regulatory agencies
of the executive branch. Under this executive order, each agency must
periodically review its existing regulations with a view to eliminating those
that are unnecessary and improving and simplifying others. Agencies must
publish a semiannual agenda that sets forth the list of regulations to be
reviewed, including at least one regulation whose economic impact is
substantial.
Effective management of the regulatory process must go beyond measures
dealing with individual regulations. Although the scope of social regulations
has been expanding rapidly for over a decade, the Federal Government has
had no process by which the combined social and economic effects of its
regulatory actions could be assessed. Because of the complexity of the
problems involved, development of analytical techniques and procedures
to make such overall assessments and to utilize them constructively will have
to occur gradually. But in 1978 the Administration took several steps in this
direction.
In March 1978 the President ordered the executive branch agencies to
publish semiannual agendas of forthcoming significant regulatory proposals
and actions. In October he created a Regulatory Council charged with improving and using those agendas to create a government-wide calendar of
scheduled regulations. The council is composed of all executive departments
and agencies with regulatory responsibility as well as a large number of
independent regulatory agencies. The calendar itself will present, for the
first time, not only a timetable of new regulatory proposals and issuances,
but preliminary data on their objectives and potential costs. As procedures,
data bases, and analyses are improved, the calendar can provide both the
regulatory agencies and the Executive Office of the President with a body
of information for use in examining and assessing the effects of regulations
and improving overall regulatory management. Using the information and
analyses developed in producing the calendar, the Regulatory Council itself
can address problems of coordination and thus eliminate conflicts and dupli-




88

cation. In addition, it will begin to examine the problems that have arisen
in particular industries or sectors from the combined effects of regulations
imposed by different agencies.
The measures to improve the regulatory process outlined above are already
making major contributions, not only increasing the cost effectiveness of
individual regulations but improving the overall coordination and integration of regulatory programs. Additional progress will depend, however, on
developing satisfactory approaches to a number of other complex and
difficult problems.
Balancing Costs Against Benefits
The statutes authorizing the various social regulatory programs vary
widely in the degree that they allow the regulatory agencies to balance benefits against costs in setting regulatory standards. Some statutes dealing with
the control of damaging health effects from chemicals or other substances
appear to be based on the proposition that effects are harmful above some
threshold of concentration but not below it. These statutes, in effect, require
the regulatory agency to set standards at or just below the presumed threshold without regard to costs. In fact, scientists are increasingly questioning the
existence of the presumed thresholds; many believe that health hazards diminish continuously down to zero concentration. Since in many cases flatly
prohibiting the substance is far too costly or disruptive, any standards that set
the level of concentration above zero must implicitly take into account a balancing of economic and social costs against the prevention of health risks.
Some regulations are issued under statutes which do not mention balancing economic costs against benefits, but do require that the regulatory standard be "feasible." Still other statutes not only permit but require economic
costs to be taken into account. And fiinally there are cases where regulatory
costs are ignored. For example, the "Delaney Amendment" to the Food,
Drug, and Cosmetic Act, flatly bans substances used as food additives if they
have been found carcinogenic in animal tests, regardless of their potency as
carcinogens or the economic costs that such a ban would impose.
There is obviously no all-purpose formula for reaching sound decisions
about the stringency of environmental health and safety standards, given the
need to take into account both the prevention of health risks and the costs of
such prevention. Uncertainty is always present in determining the specific
nature and degree of the health risks from exposure to various substances,
though the uncertainties in some cases are substantially greater than in others.
The same is true of costs. In each regulation, a decision must be made about
how to deal with these uncertainties. Regulators sometimes encounter situations where exposure to health risks is very high but occurs among a small
number of people; at other times one finds very low exposure among a large
number of people. Although circumstances thus vary considerably from
case to case, a generally consistent approach to these and similar problems
by the different regulatory agencies would do much to make the needed




89

regulations better and more cost effective. Developing such an approach
will require coordination among regulatory agencies as well as a careful
analysis and review of the statutory background behind the different
regulatory programs.
Overall Management of the Regulatory Process
Despite many differences, social regulation shares some of the characteristics of the budgetary programs of the Federal Government. Both are designed to provide economic and social benefits: such things as educational
services, highways and dams in the case of the budget; and environmental
improvements and health protection in the case of social regulation. Both use
national resources that could be diverted to other uses. For the budget the
resource costs show up as Federal expenditures, which are paid for by taxes.
The costs of regulations are less visible, since they are imposed on industry
and paid for by consumers in the form of higher prices.
The Nation has long had a set of procedures to consider the Federal
budget as a whole: Costs of particular programs and of the total budget are
estimated in order to make the best possible qualitative judgments about
benefits, and priorities among programs are established. Regulatory programs
have no such established procedures, and as a consequence there is no good
estimate of the overall cost of regulation. The difficulties of developing such a
process are formidable. Since program costs in the budget represent money
actually spent by the government, there is a firm basis for finding out how
much programs have actually cost, however difficult it is to estimate future
costs.
Most regulatory costs, however, are not directly borne by the Federal Government but by private parties. Moreover, some of these costs, while very real,
can only be roughly estimated even after they have actually occurred. What,
for example, are the costs of requiring a firm to locate at point M instead of
point N, or of requiring that chemical Z no longer be used as a pesticide?
Such estimates are necessarily subject to dispute. And, not unnaturally,
people who place a high value on the benefits of the particular regulation
tend to arrive at low estimates, while those who must pay the costs tend to
make high estimates.
In addition, social regulation is carried out under a large number of
statutes, many of which state quite specifically the objectives to be reached,
the deadlines for reaching them, and the factors that must be considered in
setting regulatory standards. The executive branch has much less flexibility
in asserting priorities and deferring or speeding up the issuance of regulations
on the basis of economic conditons and social needs than in managing many
budgetary programs.
More generally, the relationship between the Congress and the executive
branch in the case of budget programs is quite different from that in the
regulatory process. Although the President has flexibility in determining the
priorities among budget programs and the size of the recommended expendi-




90

tures each year, the Congress must pass on the appropriations to carry out
those programs. Once a regulatory statute is passed, the executive branch
agencies do not have to come back to the Congress each year, and they may
issue regulations that confer important benefits and impose large costs without congressional approval. On the other hand, the statutes under which most
regulation occurs tend to be extremely specific, often limiting the ability of
the President and the heads of executive agencies to determine priorities and
otherwise balance costs against benefits among and within the various
regulatory agencies.
For all of these reasons the development of procedures and techniques
to improve the overall management of the Federal regulatory process, to
achieve social gains at minimum cost, and to reduce the inflationary consequences of regulatory activities will have to be a long and carefully executed
process. It should proceed step by step and involve both the Congress and the
executive branch. Several important gains have already been made. According to polls, the public continues to believe that improvements in the environment, in health, and in safety are an important national goal. But recently
this sentiment has been accompanied by a growing recognition of the very
large costs and the inflationary effects of regulation. The effort to improve
both the cost effectiveness of individual regulations and the overall management of the regulatory process will continue to be a top priority of this
Administration.




91

CHAPTER 3

The Economic Outlook

I

N 1979 THE ECONOMY will enter its fifth consecutive year of
economic growth, making this the second longest recovery in postwar
history. As a recovery matures, sustaining a satisfactory pace of expansion becomes more difficult. Housing, in which starts have more than
doubled since early 1975, is only one example. Given current demographic
trends, a high level of starts is sustainable, but housing could not be expected to add much to growth even under the most favorable circumstances in financial markets. The saving rate has fallen to very low levels
by historical standards, and the rise of consumption may consequently drop
behind the growth of disposable income. In addition, business fixed investment in real terms has already regained its prerecession ratio to gross
national product (GNP), and hence a slower growth of business capital
expenditures is likely. All these factors will combine to check the pace of
economic expansion next year.
As Chapter 2 makes clear, a reduction in economic growth from the
rate of the last 2 years is needed both because idle labor and capital resources have been cut considerably and because inflation has accelerated.
The task for aggregate demand policies will be to provide a climate in which
inflationary pressures can begin moderating, but to avoid restraint so severe
as to generate a recession.
THE ECONOMY IN 1979 AND 1980
Real growth is projected to average about 2*4 percent for the 4 quarters of
1979, a lower growth rate than in 1978 but positive throughout the year. If
the anti-inflation program succeeds, as is anticipated, the rate of growth
of consumer prices should slow to less than 7/2 percent over the 4 quarters
of 1979, and to an annual rate of slightly under 7 percent by the end of the
year. According to initial indications, business and labor groups are taking
the President's voluntary standards seriously, but success cannot yet be assured. Widespread compliance with the anti-inflation program is essential
to maintenance of a strong and healthy economy.




92

In 1980, real growth is expected to rise to a rate of 3^4 percent
over the 4 quarters, largely as a result of an upturn in housing, while inflation will continue to slow, dropping below 6 5/2 percent. Here also success in
the fight against inflation will contribute materially to sustaining economic
growth by reducing the pressures on credit markets and strengthening confidence among consumers and businesses.
Employment is expected to rise by about 2 million a year in both 1979 and
1980. Productivity is expected to grow at about the same rate in 1979 as
in 1978, with some improvement in 1980. It is likely to remain well below
its trend rate of increase of about 1 l/i percent. With the labor force expected
to continue growing at a rate above the long-term trend and real growth
slowing, the unemployment rate is likely to increase to 6% percent by the end
of 1979 and remain near that level in 1980.
FISCAL POLICY FOR 1979 AND 1980
The course of fiscal policy that is appropriate for 1979 and 1980
was described generally in Chapter 2. In specific terms, Federal outlays are
projected to be $493 billion in fiscal 1979, an increase of over 9 percent from
the previous year. In fiscal 1980 the President's budget calls for outlays of
$532 billion, an increase of less than 8 percent. This 1980 figure includes
a small real increase in defense spending, a constant level of real spending
for domestic programs, and restraint in or deferrals of new spending initiatives. Because existing legislation mandates continued real growth in some
programs, such as health care and social security, zero real growth in domestic spending can be achieved only through reductions in real outlays for
a number of other programs. Holding outlays to $532 billion will require
strenuous efforts by government agencies as well as cooperation from the
Congress.
Over a year ago forecasts of economic activity suggested that the current
economic expansion would slow too much unless the burden of rising taxes
was eased. Inflation and economic growth were pushing people into higher
tax brackets, and substantial increases in social security taxes had been legislated for 1979 and later years. To prevent too great a check on the expansion, these tax increases would have to be offset by a tax cut. A tax cut
was also needed to encourage the investment that would provide the productive capacity for future economic growth and improve the prospects for
greater growth in productivity.
Last January, the President therefore proposed a tax cut of $25 billion to
take effect October 1, 1978. Since inflation was higher than expected, this
was scaled back in May to a cut of $20 billion to take effect January 1, 1979.
The size of the tax bill passed by the Congress is close to this request with a
stimulus of $18.9 billion in 1979. The bill contains a $14.1-billion cut in
personal taxes, a $6.5-billion cut in business taxes, and a $0.7-billion increase
in outlays for the earned income tax credit, but allows $2.5 billion in jobs
credits to expire.

 O - 79 - 7
278-216


93

The Revenue Act of 1978
The Revenue Act of 1978 achieves cuts in individual income taxes largely
by lowering the schedule of tax rates. It replaces the general tax credit,
which was due to expire at the end of 1978, with an increase in the
personal exemption from $750 to $1,000. The legislation also expands the
earned income tax credit for the working poor and lowers the tax rates on
capital gains. Its provisions include some of the tax reform proposals made
by the President in his tax package.
In general the Revenue Act of 1978 will have relatively little effect on
the after-tax distribution of income. Most households will receive a cut in
tax liability of about 7 percent. Households with incomes above $200,000
and those with incomes below $10,000 will receive larger cuts. These distributional effects contrast sharply with those of the President's tax proposal,
which called for larger tax cuts for those with incomes below $30,000 and
smaller reductions for those with incomes above $30,000. In its effects the
1978 legislation will also differ markedly from income tax legislation enacted
between 1964 and 1978, which increased the progressivity of the tax system.
The business tax cuts in the 1978 Revenue Act are attained primarily by
lowering corporate income tax rates. The maximum rate is dropped from
48 to 46 percent, and a new tax schedule, with more income brackets and
lower tax rates, is introduced. The tax rate on corporate income between
$50,000 and $75,000 is cut the most, from 48 percent to 30 percent. The legislation also extends and expands the investment tax credit, providing a
$500-million tax cut for business in 1979. Both of these cuts were in the
package proposed by the President. Capital gains tax rates were also lowered
in the 1978 legislation, reducing revenues by nearly $2 billion in 1979.
MONETARY POLICY
The combined effects of rising inflation and efforts by the Federal Reserve to hold down the growth of the monetary aggregates carried interest
rates last year to near record levels. More restrained growth of the monetary
and credit aggregates is an appropriate complement to the other parts of the
anti-inflation program. It will help to moderate the rate of economic expansion. Additionally, higher U.S. interest rates make dollar-denominated
assets more attractive than those denominated in foreign currencies and
thus contribute to sustaining the value of the dollar in exchange markets.
Many private forecasters anticipate a recession in 1979, partly because
they expect that current high interest rates will substantially depress housing
and business investment. High interest rates are likely to dampen aggregate
demand in 1979, but to a lesser degree than one would expect from past
experience because of institutional changes in financial markets. Our judgment that economic growth in 1979 will be sustained reasonably well and
that a recession will be avoided depends in part on our analysis of why the
effect of monetary restraint is different from what it used to be.




94

During most of the postwar period, intervals of substantial monetary
restraint were followed by recessions. Curbing aggregate demand through
the use of monetary restraint disrupted financial markets because the depository institutions experienced a large outflow of deposits when interest rates on
market instruments rose above the rates these institutions were permitted to
pay to attract consumer savings. This disintermediation sharply reduced the
availability of credit for those borrowers most dependent on commercial
banks and thrift institutions for credit. These included small businesses and
some units of State and local government, but the sector most severely hit
was the mortgage market. As mortgage credit became not merely more expensive but unavailable, residential construction dropped precipitously, and
this sharp drop was often important in tipping the entire economy into
recession.
Table 19 shows periods of such cyclical declines in acquisitions of mortgages by financial institutions and the associated declines in single-family
and multifamily housing starts. In the 1965-66 period the sharp decline
in residential construction contributed to a slowing of overall economic growth, but the expansion of Federal outlays was sufficiently
strong to maintain economic expansion. The 1959-60, 1969-70, and
1972—74 episodes were all followed by recessions. Of course, factors other
than the decline in housing were also involved in each of these recessions,
but the speed with which the decline in housing occurred had a destabilizing
effect for which it was difficult to compensate elsewhere in the economy.
TABLE 19.—Cyclical contractions in mortgage credit and housing starts, 1959-74
(Percent change at seasonally adjusted annual rate, except as noted]
Housin I starts
Period

Interest
rate'

Mortgage
acquisitions'-'
Single-family

1959
1965
1969
1972

II to 1960 II
III to 1966 IV . .
1 to 1970 1
IV to 1974 IV . . .

1.27
1.41
1.35
3.36

-12.7
-28.9
-28.2
-24.8

-17.3
-28.5
-23.1
-22.9

Multifamily
-16.4
-36.1
-30.1
-53.2

1
Percentage point change in the quarterly average market yield en 6-month Treasury bills from the beginning of the
period to the peak reached during the period.
2
Acquisitions by financial institutions.

Sources: Department of Commerce (Bureau of the Census), Board of Governors of the Federal Reserve System, and
Federal Home Loan Bank Board.

The first half of last year was somewhat like earlier periods of credit
restraint. Short-term market interest rates rose well above rates payable
on deposits. As shown in Table 20, deposit inflows at thrift institutions
slowed, and so did their mortgage lending. In the second half of the year,
however, deposits again began to grow rapidly.




95

TABLE 20.—Growth in deposits, 1977-78
[Percent change, seasonally adjusted annual rate1!
1978

1977
Type of deposit
II

III

IV

9.5
7.6
17.3
8.4
-3.2

8.7
7.5
5.6
13.1
7.3

9.8
8.9
11.3
11.3
3.2

12.1
5.5
1.5
14.2
81.0

14.0
20.9
13.8
25.8

12.5
14.8
8.4
19.3

17.7
15.4
8.5
20.0

12.8
10.7
3.6
15.4

1
Commercial banks, total
Demand _
_
_
__
Passbook
Other time
Large certificates of deposit (CDs)
Nonbank thrift institutions, total
Savings and loan associations
Passbook
Other
1
2

II

III

|V2

10.0
3.9
2.6
12.0
50.8

10.4
12.6
1.3
11.9
25.0

10.5
9.2
4.6
18.1
6.6

7.7
—3.1
-6.9
20.4
47.0

8.1
13.3
7.3
17.1

8.2
10.0
-4.3
19.3

14.6
12.0
-6.9
24.0

11.6

1

Changes are measured from end of quarter to end of quarter.
Preliminary.

Sources: Board of Governors of the Federal Reserve System and Federal Savings and Loan Insurance Corporation.

As discussed in Chapter 1, the principal reason for this higher growth
was the new regulation that permitted the issuance of money market certificates beginning last June. This change followed upon similar, but much
smaller, steps taken in 1970 and 1973. In those instances interest ceilings
were raised on longer-term certificates of deposit, thus reducing somewhat
the vulnerability of thrift institutions to deposit outflows. (Passbook and
shorter-term certificate ceilings were also raised slightly in 1970 and 1973.)
Other less obvious institutional changes have also modified the response
of the economy to credit restraint. One of these is the expansion of secondary
mortgage market activity. The Federal Home Loan Mortgage Corporation,
established in 1970, issues its own mortgage-backed securities and purchases
mortgages from the thrift institutions. The Government National Mortgage
Association has developed a procedure whereby it guarantees securities that
are issued by private institutions and backed by pools of mortgages insured
by the Federal Housing Administration or guaranteed by the Veterans
Administration. These securities have been purchased by a broad range of
investors, many of whom were not previously in the mortgage market. Some
thrift institutions have also begun issuing their own bonds, for which
mortgages serve as collateral.
Institutional changes have also occurred in other financial markets.
Commercial banks no longer depend primarily on liquidating U.S. Government securities to obtain funds for business lending, as they had
done through the early part of the postwar period. The advent of liability management (exemplified by the issuance of negotiable certificates
of deposit and the use of nondeposit sources of funds) has enabled most banks
to obtain the funds they want for lending, provided they are willing to pay
going rates of interest. Moreover, large firms can increasingly shift their
borrowing between commercial banks and open market commercial paper,
and between foreign and domestic sources, in response to differences in
the cost and availability of funds. Their direct access to credit markets makes
them less dependent on intermediation by institutional lenders. The expan-




96

sion of trade credit provides a mechanism through which large firms extend
this benefit to smaller customers and suppliers.
The result of these institutional changes has been to smooth the response
of the economy to increased restraint in financial markets. In place of sharp
changes in availability of credit, there is now a more gradual response of
credit users to changes in the cost of credit. Measured application of monetary
restraint has become more feasible. The degree of restraint required to
achieve the desired growth in private demand is difficult to judge, however,
because the response of the private sector is likely to occur more slowly
and to be diffused more widely than in the past. Moreover, the indicators
showing the degree of restraint have changed, and experience in implementing monetary policy under present circumstances will come only gradually.
Over the near future, nominal interest rates are likely to remain relatively
high by historical standards. It will take time to reduce the rate of inflation
and the inflation premiums contained in interest rates. As inflation recedes,
the maintenance of a restrained monetary policy will be consistent with a
decline in nominal interest rates.
THE ECONOMIC FORECAST
The economy is entering 1979 with substantial momentum, and economic
expansion will be bolstered by the recently enacted tax bill, which will help
to sustain consumer expenditures during the first half of the year. Later
in the year, as the effect of the tax cut wears off, a slower expansion of
consumer purchases is foreseen. Partly as a response to current high interest
rates, housing starts are expected to decline and the growth of business fixed
investment to diminish during the year (Table 21).
TABLE 21.—Economic outlook for 1979
Forecast
range
1979

Item
Growth rates, fourth quarter to fourth quarter (percent):
Real gross national product

2 to

Personal consumption expenditures.
Nonresidential fixed investment
Residential investment
Federal purchases
__.
SUte and local purchases.
GNP implicit price deflator..

1% to

IK

IK to

Compensation per hour 2_.
Output per hour 2
Level, fourth quarter:

iy2

\*A to IK
4 to *y2
-W2 to - 9 ^
^ t o IK
11A

VK to 834

3

Unemployment rate (percent)
Housing starts (millions of units4)_
1
Preliminary.
2
Private business sector;
3
Seasonally adjusted.
4

6 to

all persons.

Annual rate.

Sources: Department of Commerce (Bureau of Economic Analysis), Department of Labor (Bureau of Labor Statistics),
and Council of Economic Advisers.




97

Growth is likely to be stronger in the first half of the year than in the
second half. Housing starts are expected to bottom out during the fourth
quarter of 1979 and begin to move up in 1980 as pressures in money and
credit markets ease with the decline in the rate of inflation. The upturn in
housing is a principal reason for the anticipated increase in the rate of economic growth in 1980.
The rate of increase of the GNP deflator is expected to decline from 8.3
percent in 1978 to slightly under 7^4 percent during the 4 quarters of 1979;
a further drop to just under Gyi percent is probable during 1980, partly as
a result of a tightening of the pay and price standards. Inflation is likely to
remain high during the first half of 1979, however, because of the minimum
wage increase in January, the delayed effects on import prices of the decline
in the value of the dollar, the oil price increases by the Organization of
Petroleum Exporting Countries (OPEC), and the continued rise in food
prices. As the year proceeds, these factors will put less upward pressure
on prices, and the effects of the President's anti-inflation program should
be increasingly felt. Consequently the increase in consumer prices is expected
to fall to an annual rate of below 7 percent by late in the year.
Consumption
Consumption has been a major source of strength in the current expansion.
Consumers have increased their spending by more than the rise in their
after-tax incomes, reducing the saving rate from almost 8 percent in 1975
to under 5 percent in the last quarter of 1978. Some of the possible reasons
for this low saving rate were discussed in more detail in Chapter 1.
In 1979 the saving rate is expected to rise moderately but remain well
below its 6 percent average of the 1950s and 1960s. Much of this increase
will reflect less intensive use of consumer credit, which expanded sharply
during 1978. Automobile sales in particular are not likely to rise further in
1979 and may fall slightly from the high level of the 1978 model year.
Purchases of furniture and household equipment may also decline as a
result of the expected reduction in residential construction.
Continued growth in purchases of nondurables and services should allow
personal consumption expenditures to rise in real terms at a rate of about 2
percent, close to the projected rate of growth of real GNP but below the
rate of increase in real disposable income.
As inflation abates during 1979, consumer confidence in the economy
should improve and thus strengthen consumer markets in 1980. The saving
rate is consequently expected to decline in 1980. During that year, however,
rising effective tax rates will tend to slow the growth of disposable income;
the increase in consumer spending is thus likely to be somewhat less than the
rise in real GNP.




98

Business Fixed Investment
Business fixed investment in 1972 dollars should grow at a rate of about 4
percent during 1979, measured from fourth quarter to fourth quarter. This
estimate represents a slowdown from the 8.3 percent increase for 1978, but
the increase is still above the expected growth in real GNP. Investment is
foreseen to remain relatively strong in the first half of 1979 but to slow later
in the year with the rest of the economy. Moderate improvement from the
less rapid rate of the second half of 1979 is expected during the course of
1980.
Indicators of the probable pace of investment next year are mixed. Higher
rates of capacity utilization are encouraging new and replacement investment, and contracts and orders for plant and equipment are rising rapidly.
Orders for nondefense capital goods in October and November were 12J/2
percent above their third quarter level. Unfilled orders for nondefense capital
goods at the end of November stood 6 percent above their September level.
Moreover the Revenue Act of 1978 should provide some encouragement
for business fixed investment. Profits seem likely to remain relatively high
throughout the next year, falling only marginally from their current share
of GNP. The confidence of investors with regard to future inflation should
improve as the Administration's anti-inflation initiatives take hold.
Not all the forces influencing business investment decisions are positive.
Expectations of a slowdown in economic activity next year are widespread
and may already be holding back investment plans. Nominal interest rates
have risen to very high levels, and their effects will be felt increasingly as
1979 progresses. Some reduction in investment in motor vehicles may also
follow the recent large purchases of cars and trucks by businesses. This drop
in sales may restrain discretionary capital spending by the auto industry,
although the industry will still have to maintain a high level of capital outlays to meet the requirements of government regulations.
The latest Commerce Department survey of business investment intentions found that businesses are planning to increase their outlays for new
plant and equipment in 1979 by 11.2 percent in current dollars. This compares with an actual rise of 12.7 percent in 1978. If capital goods prices rise
in 1979 by the 8 percent figure expected by survey respondents, the real increase in outlays for plant and equipment in 1979, measured on a year-overyear basis, would be about 3 percent. Measured from fourth quarter to
fourth quarter, the increase would be less.
In the past 3 years total outlays for business fixed investment in the national income and product accounts have exceeded the amount included in
the plant and equipment survey by a large and widening margin, even after
allowance has been made for conceptual differences in coverage of the two
series. This margin may well persist in 1979. The results of the Department
of Commerce survey thus seem consistent with our forecast, which calls for
a moderate slowdown this year in this key element of aggregate demand.




99

Housing
The number of housing starts and the real volume of residential construction are likely to decline in 1979 from the high levels of last year, in
large part because prospective home buyers will be deterred by the high level
of mortgage interest rates. In areas where mortgage rates are limited by
usury ceilings, some constraints have developed on the availability of credit.
This should not greatly affect the national total of housing starts, but it
may restrain housing sales and residential construction in some parts of the
country. By the fourth quarter of 1979 housing starts are expected to fall
to an annual rate of around 1% million or somewhat less, a decline that
is significant but less steep than in most postwar periods of tight money.
The prospects for housing this year will depend importantly on whether
thrift institutions continue to attract funds through money market certificates and to make the proceeds available to potential home buyers. Margins
between mortgage yields and the cost of issuing the certificates have narrowed. Some thrift institutions may therefore pay less than the maximum
permissible yield on money market certificates and in other ways market
them less aggressively. Moreover, there may be some diversion of funds from
mortgages to higher-yielding short-term liquid assets. The potential for
strengthening longer-term earnings by issuing money market certificates
and acquiring long-term, high-yield mortgages in such a period is nonetheless
attractive.
The effect of these new money market certificates in reducing current
earnings of thrift institutions is a matter of concern. However, the certificates
still represent a small proportion of total deposits (less than 10 percent at
year-end). Moreover, at least half of the money going into the money market
certificates appears to be coming from outside the thrift institutions, and
some of the remainder is being converted from high-yielding certificates
rather than from low-yielding passbook accounts. In view of the high level
of earnings on the mortgage portfolio—about 8^4 percent in the second half
of last year—thrift institutions in general are in a favorable position to cope
with higher deposit costs for a limited time, although the earnings and cost
positions of individual institutions undoubtedly vary considerably.
Given reasonable prospects for the availability of mortgage credit, the
primary determinant of the volume of housing starts will be the response of
home buyers and builders to the higher level of mortgage interest rates. The
rate on new mortgage commitments had risen sharply to nearly 11 percent
by the end of last year.
Virtually all of the projected decline in housing starts is likely to be in
single-family units. Following last year's upturn, construction of multifamily
units will probably level out in 1979 in response to the high costs for
building loans, which often have to be carried a long time. But the decline
in the rental vacancy rate from a peak of 6.2 percent in 1974 to a historically




100

low level of 5.0 percent late last year implies a strong demand that should
sustain multifamily construction.
The demand for single-family homes will also be supported by demographic factors. Between 1973 and 1978 the number of people in the 25-29
age group grew by 16 percent, and the 30-34 group grew 22 percent. By
1983, population in these two age groups is expected to rise nearly 14
percent, somewhat below the rate of the last 5 years but far above the
rates prevailing before 1970. In fact the population in this age group will
grow more in the next 5 years than it did in the 15 years up to 1970. The
largest number of first-time home buyers is in the 25-34 age bracket. More
than half of the married couples aged 25 to 29 and nearly three-fourths of
those between 30 and 34 own their own homes. Although the proportion
of married couples in the total number of U.S. households has been declining, this change has been offset by the rise in homeownership among single
persons.
Given the favorable demographic trends and low vacancy rates, it is quite
likely that housing starts will begin to rise as inflation and nominal interest
rates case late next year. The forecast anticipates a rise in housing starts to
about 1.9 million units by the fourth quarter of 1980. Residential construction is expected to add nearly as much to real GNP growth in 1980 as it
subtracted in 1979. This projected turnaround in housing activity is the
principal reason for expecting somewhat stronger economic growth in 1980.
Inventories
Businesses throughout this recovery have pursued a cautious policy on inventory accumulation, as noted in Chapter 1. Ratios of inventories to sales
have been kept relatively low for this stage of the recovery, and there are
no major inventory imbalances that would depress economic activity this
year. Since growth in final sales is expected to moderate in 1979, however,
the rate of inventory investment may decline slightly if businesses continue
to pursue their conservative inventory policies, as seems likely. Heightened
inventory accumulation may occur in 1980 as final sales again become
stronger.
Net Exports
During 1978, for the first time in this recovery, the foreign sector provided
some support to the expansion of GNP. The volume of exports rose, and the
growth of import volumes slowed from its rapid pace at the beginning of
the year. The foreign sector should continue to contribute to growth in 1979.
In many foreign countries, growth of domestic demand began to pick up
during the course of 1978, and this movement should increase somewhat
more this year, chiefly because of a shift toward more expansionary fiscal
policies in Germany and Japan in late 1978. More rapid growth of foreign
demand will help to raise demands for U.S. exports. At the same time, the




101

deceleration of growth in the United States is acting to reduce the growth
of import volumes. In 1979, for the first time since 1975, growth rates in
the major foreign countries are likely, on average, to exceed growth in the
United States.
The marked depreciation of the dollar from September 1977 through
October 1978, which has been only partially reversed since then, will also
help to improve our net exports in 1979. Since trade volumes adjust only
slowly to changes in relative prices, the principal effects of the dollar
depreciation on imports and exports are not yet evident.
U.S. exports tend to respond more strongly to relative price shifts than
imports do, but with longer lags. Exports of nonagricultural merchandise in
1972 dollars are expected to grow by 7 to 10 percent in 1979; agricultural
exports, on the other hand, are not likely to increase from current high
levels. Slower economic growth in 1979 and last year's depreciation of the
dollar should limit the rise in the volume of non-oil imports this year. Despite
an expected rise in the volume of oil imports, the merchandise trade balance should improve in 1979.
An important development in the structure of our foreign balance over
recent years has been a marked surplus in net exports of services, especially
fees, royalties, and earnings of American enterprises abroad. In the early
years of this decade the United States was near balance on services, but in
1977 the service component of the current account showed a surplus of
$16 billion, and the surplus rose to an annual rate of $18 billion in the first 3
quarters of 1978. In the near future this trend should continue, since the
comparative advantage of a mature industrial country like the United
States will increasingly lie in exporting capital and technology.
Government Demand
Purchases of goods and services by both the Federal and the State and
local sector will rise in 1979 and 1980, but the amount of growth will be
relatively small in real terms.
The President's budget calls for Federal outlays of $493 billion in fiscal
1979 and $532 billion in the next fiscal year. Purchases of goods and services, comprising roughly one-third of these expenditures, are concentrated
in defense outlays, where Federal expenditures are projected to rise in real
terms. Total real Federal purchases are expected to increase 1 percent during
1979 and to fall slightly during 1980. The 1979 increase follows a small
decline in real Federal purchases during 1978.
Although State and local purchases will continue to grow in real terms
during 1979 and 1980, two recent developments indicate a slowing in the
rate of increase from the 3 / 2 percent rate of 1978. First, as Chapter 1 noted,
sentiment among voters appears to favor limiting the growth of State and
local taxes and expenditures, as evidenced by the passage of Proposition 13




102

in California and successful budget-cutting referenda in eight other States
in 1978. Second, Federal aid to State and local governments, which had
been growing rapidly, will level off over the next 2 years.
These developments suggest that the rate of growth in real State and local
purchases may moderate to about a V/2 to 2 percent annual rate over the
next 2 years. The operating balance of the State and local sector, which was
in surplus by about $6.6 billion in 1978, is expected to shift to a small
deficit in 1979 and 1980.
Labor Force and Employment
Growth in the labor force and in employment cannot be expected to
continue at the exceptionally rapid rates of the past 3 years. The slower
rate of real economic growth foreseen for 1979 and 1980 and trends in
the age structure of the population make it reasonable to expect growth
rates for both labor force and employment to decline toward their long-term
trend.
The civilian labor force has grown at an annual rate of about 2?4 percent
over the past 3 years, up from an average around 2}4 percent in the first
5 years of the decade. This recent pace is much more rapid than the
average annual growth of 1.7 percent during the past 30 years. There have
been two principal reasons for the relatively high growth of the labor force
lately. The number of persons between the ages of 16 and 24, the normal
age for entering the labor force, is large because of the peak birth rates in
the late 1950s; and a higher proportion of women and teenagers have joined
the labor force. Reductions in the size of the Armed Forces were also a factor
in the earlier part of the decade. In the past 3 years the labor force participation rate has gone up a full 2 percentage points. The rapid expansion of
employment opportunities during this period has undoubtedly had an important bearing on this striking increase.
In 1979 and 1980 the factors outlined above are expected to have less
effect on labor force expansion. The rate of growth in the noninstitutional
population at ages 16 and older will decline from the 1.7 percent per year
average of the early and middle 1970s to 1.5 percent in 1979 and 1.4 percent
in 1980. Slower growth of real output will cause the participation rate to
rise less rapidly, but it may remain above its long-term average annual growth
of 0.2 percentage point. The growth rate for the civilian labor force is
expected to average about 2/4 percent per year in 1979 and 1980.
The rate of increase in employment will be limited by slower growth in
real aggregate demand. Average employment in the fourth quarter of 1979
should be about 2 percent above that in the fourth quarter of 1978. Employment growth during 1980 is expected to be about 2 54 percent, compared to
an average annual employment growth in the preceding 3 years of over 3/2
percent.




103

These projections concerning employment and the labor force imply a
small rise in the unemployment rate. Unemployment is expected to increase
to about 6*4 percent of the labor force by late 1979 and to remain near that
level in 1980. Forecasts of unemployment rates must be regarded as highly
uncertain, however, because of the difficulties inherent in predicting growth
in the labor force, in productivity, and in output.
PRICE AND WAGE DEVELOPMENTS
The outlook for prices and wages in 1979 is affected in important ways
by the Administration's anti-inflation program. A significant reduction
of inflation will require widespread cooperation and compliance with the
wage and price standards.
The wage standard limits increases in compensation generally to 7 percent, but even with full compliance by groups not exempt the rise in private compensation is likely to exceed 7 percent. Equity and flexibility require some groups to be exempt from the pay standard, including workers
who are covered by collective bargaining agreements negotiated before the
announcement of the anti-inflation program on October 24, 1978, and those
who were earning less than $4.00 per hour on October 1, 1978. Many
workers qualifying for the low-wage exemption received substantial increases on January 1, when the minimum hourly wage was raised from
$2.65 to $2.90 as a result of the 1977 amendments to the Fair Labor Standards Act. Others in this group may be indirectly affected if wages slightly
above $2.90 are raised to maintain normal wage differentials. On average,
wages and private fringe benefits of those qualifying for the low-wage exemption are expected to increase between 8J/2 and 8% percent.
Deferred increases in compensation due in 1979 under existing collective
bargaining agreements are also exempt. These increases vary considerably,
but the average, including allowance for cost-of-living provisions, is likely
to be in the 8!/4 to 8/ 2 percent range.
New labor contracts will play an important role in wage changes in 1979
when a new round in the 3-year collective bargaining cycle begins. For these
contracts, an employee group is in compliance if the agreement provides for
pay increases that do not exceed 7 percent per year over the life of the
contract. But increases in any one year may be as large as 8 percent. Industries where major multiyear agreements will be negotiated in 1979 include
petroleum, trucking, rubber, electrical equipment, meatpacking, and automobiles. In all, the wages of almost 4 million workers in bargaining units with
1,000 or more workers, and of a similar number in smaller units, will be
determined for the next 2 to 3 years. In the previous 1976-77 round of negotiations many of these agreements provided for double-digit annual rates of
pay increase. A repetition of such large increases would have serious inflationary consequences not only in 1979 but in subsequent years.
Despite the large number of exempt workers, a high rate of compliance
by those not exempt—who account for about two-thirds of the entire wage




104

and salary bill—will still produce significant deceleration. Substantial compliance would limit the rate of increase of total private wages and fringe
benefits to about 8 percent. Total employee compensation per hour, including employer payroll taxes, would then increase by about 8J/2 percent in
1979, a significant deceleration from the 9% percent increase in 1978.
Because of the continued rapid escalation of food prices, increases in the
minimum wage and social security taxes, the rise in OPEC oil prices, and
the continued pass-through of higher prices for other imports, inflation is
likely to remain relatively high in the first part of 1979. As the year progresses, the rise in consumer prices should fall somewhat below a 7 percent annual rate, a rate consistent with the underlying rise in labor costs.
A deceleration of wage and price increases during 1979 will be an important first step in braking the momentum of inflation. Expectations of continuing inflation would then begin to give way to the prospect of smaller increases
in wages and prices. Further progress could be made more certain in 1980 by
adjusting the pay and price standards. The special factors boosting inflation
in 1978 and 1979—food price increases, payroll taxes, medical costs, depreciation, and energy prices—may also have less effect in 1980. We can reasonably expect further gains in reducing inflation. The rate of increase of consumer prices is projected to fall to just under 6^2 percent during 1980.
Food prices over the 4 quarters of 1979 are expected to rise between 7 and
8 percent, significantly below last year's 11 percent. During the first half of
the year, however, food price increases may be larger than during the second half, as the food processing and marketing system reacts to increased
costs for labor, energy, packaging, and transportation, as well as to higher
prices for wheat, cocoa, and sugar. Prices of dairy products and the cost of
food consumed away from home are projected to rise considerably in the
first half of the year.
An important reason for higher food prices in 1979 is likely to be a
continued reduction in supplies of beef. Because of a decline in the number of cattle, total beef production in 1979 is likely to be lower than in 1978.
Production of pork and poultry is expected to rise significantly, however,
especially in the second half of the year, and per capita consumption of all
meats is therefore likely to decline by less than 1 percent.
Some encouraging signs for food prices can be discerned. After increasing very sharply in the first half of 1978, the index of prices that farmers
receive for crops remained quite stable during the second half of the
year. This suggests that, with normal winter and spring weather, no immediate inflationary pressure should appear at the retail level because of
abnormal increases in farm crop prices. The favorable prospects for the grain
and soybean crops that will be harvested in the Southern Hemisphere this
spring and the higher level of world stocks of these commodities are also
reassuring. Hog and poultry producers are geared to expand production
significantly, helping to offset lower beef supplies. As the Administration's




105

anti-inflation program begins to show tangible results, pressure on processing
and marketing margins is also expected to moderate.
Energy prices will rise substantially in 1979, in large part as a result of
the 14-J/2 percent increase in oil prices announced by OPEC. This OPEC increase will add almost 0.4 percent to the consumer price index by the end of
1979 (compared to what would have happened if OPEC oil prices had remained stable), and some further effect will be felt in 1980. Domestic energy
prices will also increase. The deregulation of natural gas will add to the price
of energy, and further rises in coal prices can also be expected.
Mortgage interest costs are likely to rise less rapidly in 1979 than in
1978 as nominal mortgage interest rates level off and as the housing market
weakens. In 1978 mortgage interest costs, which include the effects of rising
prices for homes and higher mortgage interest rates, rose about 20 percent.
Import prices have already risen significantly in conjunction with the
decline in the dollar on foreign exchange markets during 1978. To the extent that foreign exporters do not absorb the effects of this depreciation,
some further price rises are likely in 1979.
Hospital costs, which for several years have increased at nearly twice the
rate of overall consumer prices, moderated somewhat in 1978. Further
moderation is expected in 1979 and 1980 in response to official action at
two levels: hospital cost containment legislation to be proposed by the
Administration, and State cost containment programs.
ECONOMIC OBJECTIVES AND POLICY FOR THE LONGER RUN
During the past 2 years this Administration has developed its economic
policies within the context of longer-term objectives for the economy.
That approach was embedded in law during 1978 by the planning procedures incorporated in the newly enacted Humphrey-Hawkins Full Employment and Balanced Growth Act. This act establishes procedures for developing and reviewing economic policies within the government, requires the
government to set 5-year goals for the American economy, and challenges
it to formulate policies to achieve them.
For the past three decades the Employment Act of 1946 has been the
basic guide for the President and the Congress in the development of economic policies. The Employment Act charged the government with responsibility to promote maximum employment, production, and purchasing
power through the use of the policy tools at its disposal. Since 1946 the instruments of fiscal and monetary policies have been used in ways that contributed
to economic prosperity. In recent years, however, the view has become widespread that amendments to the Employment Act would be an appropriate
response to the changed economic circumstances and the serious new difficulties that we face in today's economy. The Full Employment and Balanced Growth Act of 1978 was designed to address these difficulties.




106

THE HUMPHREY-HAWKINS ACT
The new law strengthens the Employment Act in three essential respects.
It explicitly identifies national economic priorities and objectives; it
directs the President to establish, and the Congress to consider, goals based
on those priorities and objectives; and it creates new procedures and requirements for the President, the Congress, and the Federal Reserve to improve the coordination and development of economic policies.
The priorities and objectives set forth in the new act are varied, reflecting
the nature of today's economy. The act establishes as a national goal
"the fulfillment of the right to full opportunities for useful paid employment at fair rates of compensation of all individuals able, willing, and
seeking to work." The new act also specifies "reasonable price stability" as
a national objective and recognizes the need to improve government policies
for dealing with inflation. Emphasis is placed on encouraging private and
public capital formation to promote full employment, growth in productivity, and price stability. The act responds to the widespread desire for reduced governmental intervention by calling for steady reductions in the
share of the Nation's output accounted for by governmental spending and by
relying primarily on the private sector to meet the act's objectives. It also
specifies that a balanced Federal budget, consistent with the achievement
of other goals, is to be an objective of national policy. Finally, the act
stresses the position of our economy in international markets. Those who
make public policy are called on to work to improve the trade balance of the
United States as well as its competitive position in world trade, while
promoting fair and free international trade and a sound and stable international monetary system.
To provide a better focus for the government in its effort to achieve these
general objectives, the Full Employment and Balanced Growth Act requires
that the Administration set annual numerical goals for key indicators in the
economy over a 5-year period, including employment and unemployment,
production, real income, productivity, and prices. Goals for the first 2 years
of the 5-year period are considered short-term objectives, and the President
is required in his budget to recommend levels of outlays and receipts consistent with them. Goals for the final 3 years are known as medium-term
goals, and projections of outlays and receipts consistent with them are to
be included in the President's budget.
The act establishes new procedures for developing economic policies within
the Federal Government. Each year the President is to present a program
for achieving the economic goals he has set. As a matter of general guidance,
the act provides that the government should rely as far as possible on growth
in the private sector to meet goals for employment and output. At the same
time, it calls the President's attention to a variety of governmental measures
for dealing with unemployment, inflation, inadequate capital formation, and
other problems. No new programs are specifically required or author-




107

ized in the act, however, and the President would need additional legislation
to put new programs into effect.
To improve the coordination of fiscal and monetary policies, the act requires the Federal Reserve Board to report to the Congress twice each year
on its objectives and plans with respect to monetary policies. The Board, in
its reports, is required to comment on the relation between its plans for monetary policy and the short-term economic goals established by the President.
The policies of the President and the Federal Reserve Board will be considered jointly by the Congress. The act directs the Joint Economic Committee of the Congress to review reports from the President and the Federal
Reserve Board, together with submissions from the committees of the Congress, and to offer its findings regarding the economic situation to the Budget
Committee in each House prior to development of the First Concurrent
Resolution on the Budget. Four hours during the debate on that resolution in
each House will be reserved for debate on economic policies and goals and
specific budgetary plans for achieving economic objectives. Through this
process of reports and debate, the new act aims to improve economic decisions by providing better ways of arriving at them and better information
on which to base them.
The Full Employment and Balanced Growth Act stipulates that in the first
Economic Report published under the act the goal for unemployment in
1983 should be 4 percent for workers aged 16 and over and 3 percent for
workers aged 20 and over. The act also requires that the goal for the rate of
increase in the consumer price index in 1983 should be 3 percent.
Beginning with the 1980 Economic Report of the President, the President
is authorized under the new act to change the timetable for achieving the
goals if he determines that such a change is necessary. If the President
changes the 4 percent and 3 percent unemployment goals, however, his
Economic Report must state the year that he expects the unemployment
goals to be reached.
GOALS FOR THE ECONOMY TO 1983
Lower unemployment and inflation rates are basic objectives, but they are
not, of course, the only economic aims of the Administration or the new
act. As noted earlier, the Humphrey-Hawkins Act places a high priority on
improving the competitive position of the U.S. economy in the world,
encouraging the growth of investment and capital formation, reducing the
share of Federal spending in the Nation's output, and balancing the budget.
In formulating economic policies for the next 5 years, these additional concerns have been taken into consideration.
Economic goals consistent with those specified in the act are shown in
Table 22. The short-term goals for 1970 and 1980 represent a forecast of
how the economy will respond over the next 2 years not only to the budgetary
policies proposed by the President for fiscal 1979 and 1980 but to the antiinflation program announced on October 24. The medium-term goals for




108

1981 to 1983 are not forecasts. They are projections of the economic performance that would be required to reach the 1983 unemployment and inflation
goals specified in the act.
TABLE 22.—Economic goals, 1979-83
Item

1979

1980

1981

1982

1983

Level, fourth quarter2
Employment (millions)...

97.5

99.5

102.6

105.5

108.3

Unemployment (percent).

6.2

6.2

5.4

4.6

4.0

Percent change, fourth quarter to fourth quarter
3.0

7.5

Productivity1

4.1

4.6

4.6

4.2

2.3

4.4

4.4

4.0

.4

Real disposable income..

5.2

3.2

2.8

RealGNP

6.4

2.2

Consumer prices.

1.1

1.8

2.0

2.0

1

Based on total real GNP per hour worked.
Seasonally adjusted.
Source: Council of Economic Advisers.
2

The rate of GNP growth for the 1981-83 period that will be needed if
unemployment is to be reduced to 4 percent by 1983 will depend on the
growth rates of the labor force and productivity. Trends in these variables
are hard to predict, as experience in the past 2 years indicates.
Over the next 5 years, growth in the population aged 16 and over will
decline significantly, from about 1.6 percent in 1978 to about 1.0 percent in
1983. The rate of increase in the labor force participation rate (the ratio of
persons in the civilian labor force to the total number within the workingage range) also seems likely to slow. During recent years the participation
rate has increased by at least 0.8 percentage point annually, well above the
long-term trend. With slowing growth both in the working-age population
and in the participation rate, increases in the labor force will taper off from
current rates of 2 to 3 percent a year to perhaps 1% to 2 percent 5 years
from now.
This slowing of labor force expansion will reduce the GNP increase that
will be needed to achieve any given reduction in the unemployment rate. At
the same time, however, it is reasonable to expect productivity growth to
improve somewhat over that of 1978. The slowing of labor force expansion
will be accompanied by a shift in the age distribution of the labor force toward more mature workers, and the average experience of the labor force
will also be lengthened by a reduction in the number of new entrants. These
developments will help to stimulate greater productivity growth. Strong
growth of investment could also improve the outlook for productivity.
These considerations suggest that potential GNP over the next 5 year?
might continue to increase at about the 3 percent rate of the past 5-year


278-216 O - 78 - 8


109

period. There may be some slowdown in the growth of potential output during the next 5-year period as increases in the working-age population taper
off, but information on labor force and productivity trends is not sufficient
to permit a forecast of when it will happen.
In developing the projections in Table 22 for 1981 to 1983, a potential
GNP growth of 3 percent was therefore assumed. The trend rate of increase in productivity underlying this estimate is 1 l/i percent, while the trend
rate of increase in the labor force is 2 percent; these two numbers add
to more than the 3 percent increase in potential GNP since average hours
worked are expected to keep declining, as they have done through most of
the postwar period. The yearly increases in the labor force and productivity
shown in the table vary from the long-term trend because they will be influenced by the actual growth rate of real GNP in that year.
Jobs and training programs to reduce structural unemployment might
make it possible to achieve the goal of a 4 percent overall unemployment rate,
and 3 percent for adults, with a somewhat lower rate of growth of real output.
Although such programs are primarily aimed at reducing the unemployment
rate that is consistent with stable prices, they may, at least in the short run,
tend to increase the level of employment and reduce the unemployment rate
that is consistent with any given level of real output.
The increase in real disposable income from 1981 to 1983 is derived from
historical relationships between that variable and real GNP, assuming no
major changes in income shares between personal income and corporate
profits.
REQUIREMENTS TO ACHIEVE THE ECONOMIC GOALS
By any criterion these are very ambitious goals. Achieving all of them
simultaneously would demand not only a performance by the American
economy that is unprecedented in peacetime history, but also government
programs that can deal effectively with some of our most intransigent problems, particularly inflation and structural unemployment. The fact that the
aims are ambitious makes it all the more important to consider carefully and
realistically the obstacles to achieving them.
The difficulties likely to be encountered in moving the economy along the
path set out in Table 22 follow two broad lines. First, will aggregate demand
for goods and services be great enough to propel the economy along a
relatively fast growth track from 1981 to 1983? What kind of budgetary
policies would be required over the next several years to achieve this kind
of economic growth? Second, if real economic growth did proceed at the
pace needed to reduce the unemployment rate to 4 percent by 1983, what are
the prospects that the inflation rate would decline to 3 percent by that year,
and what are the principal obstacles to such a decline?
Answers to these two groups of questions are related. The likelihood of
achieving rapid and sustained economic growth while inflation remains
high is very small. Inflation gives rise to forces that raise interest rates and




110

discourage investment. It also increases the uncertainties facing businesses
and consumers, and at times in \he past it has severely weakened their propensity to spend. Because inflation reduces confidence abroad as well as at
home, it can undermine the value of the dollar, giving rise to further
inflationary pressures. The new act recognizes that inflation and growth are
not separable concerns, and that public policy must seek ways both to achieve
low unemployment and to control inflation.
Adequacy of Aggregate Demand
The growth rates of real GNP that will be needed in 1981-83 to reach
the goal of a 4 percent unemployment rate by the end of that period are
quite high by past standards, but they are not unprecedented. The average
rate of growth for those 3 years, 4*4 percent, is actually somewhat lower
than the average rate of economic expansion from the last quarter of 1975
to the last quarter of 1978, which was 4.8 percent. In evaluating the difficulties in maintaining a 4/2 percent average yearly growth rate of real GNP,
however, one should recall that the current expansion will soon be entering
its fifth year.
The course of economic policies that would ensure sufficient aggregate
demand growth to permit the economy to grow at a 4/2 percent rate from
1981 through 1983—and still avoid excess demand that would interfere
with the unwinding of inflation—can only be described in very general
terms. Our ability to foresee economic developments and to design appropriate policies to deal with emerging problems over a 5-year period is
extremely limited. The outlook for 1979 is uncertain, the prospects for 1980
are much more so, and the probable course of later developments can be
foreseen only dimly. The best we can do is to rely on past experience to indicate possible future patterns of economic activity and tell us the kinds of
economic policies most likely to contribute to a strong economy over the next
5 years.
One way to evaluate the prospects for maintaining strong economic
growth is to consider the distribution of saving and investment by sector.
Defined in terms of the national income and product accounts, a sector is a
net saver if its income receipts exceed its expenditures. If expenditures exceed
receipts, the sector has engaged in dissaving, that is, in net investment. For
the economy as a whole, expenditures and receipts are two sides of the same
coin, and hence measured saving and investment must always be equal.
What one sector saves, another must invest.
This equality of saving and investment in the aggregate is, of course, an
accounting identity. There is no reason why decisions to save and invest
should lead to a balance in each of the various sectors of the economy, and
generally they will not. But when desired amounts of saving and investment
do not match, adjustments occur in the economic system—such as changes
in interest rates, levels of economic activity, or prices—that force saving and
investment into balance.




Ill

The relation between saving and investment and the level of economic
activity can be seen by comparing the distribution of net saving by sector
in 2 recent years, 1973 and 1975 (Table 23). In 1973, a year of relatively
full employment, investment incentives in the private sector were strong.
Gross private investment-—including residential construction and business
outlays for plant, equipment, and additions to inventories—was large
enough that it more than offset gross private saving. The governmental
sector was close to balance: a small deficit in the Federal sector (as measured in the national income and product accounts) was offset by a surplus
in State and local governmental budgets. In 1975, a year of recession, investment propensities were comparatively weak. Gross private investment
was far below the volume of private saving, even though the latter was not
much larger in relation to GNP than it had been in 1973. The counterbalancing item was a deep governmental deficit mainly due to the fact that
Federal receipts were depressed below the levels that would have occurred
in a more fully employed economy.
TABLE 23.—Net saving by sector, 1973 and 1975
[Net saving, or investment (—)]
1975

1973
Sector
Billions of
dollars

Billions of
dollars

Percent
of GNP

Percent
of GNP

Private sector:
Personal
Business1 _

_

70.3
-77.2

5.4
-5.9

83.6
-7.4

5.5
-.5

Government sector:
-6.7
13.0

-.5

-70.6
6.2

-4.6

.6

Federal
State and local

3

-11.9

-.8

Foreign sector2

1.0
( )

.4

1 Gross business saving plus the statistical discrepancy minus gross private domestic investment.
2 Net capital grants received by the United States less net foreign investment.
3
Less than 0.05 percent.
Source: Department of Commerce, Bureau of Economic Analysis.

Maintaining relatively strong growth from 1981 through 1983 will require
that the excess of private investment over private saving be large enough to
offset the net saving by both the governmental sector and the foreign sector
in a high-employment economy. Large governmental surpluses would tend
to make that task more difficult, as would large net saving by the foreign
sector.
Prospects for State and Local Budgets
During recent years the aggregate surplus in the State and local sector,
as measured in the national income and product accounts, has been fairly
large, as much as 1.6 percent of GNP in 1977. The magnitude of this surplus is mainly the result of net payments into social insurance funds for




112

State and local employees. But in 1976 and 1977 the aggregate operating
and capital budget of State and local governments was also in surplus because of slow growth of capital expenditures and substantial increases in
Federal grant programs. During 1978 the operating and capital accounts
have returned to approximate balance; given the strong demands by citizens to reduce State and local taxes, a return to surpluses seems unlikely over
the next 5 years. The amount of net saving in the State and local sector
between now and 1983 is therefore likely to depend mainly on the accumulation rate of the social insurance funds.
That accumulation rate has been moving up rapidly in the past decade,
from about one-half of 1 percent of GNP in the middle 1960s to about 1
percent at present. This buildup derived from the relatively rapid increase
of State and local employment during the period and the effort by State and
local governments to fund their pension liabilities. The upward trend in
the ratio to GNP is not likely to continue. Growth of employment in State
and local governments no longer exceeds the national average, and a good
deal of funding of existing pension liabilities has already been accomplished.
Projections by several prominent private forecasting services put the accumulation rate of State and local social insurance funds in 1982 and 1983
at around three-fourths of 1 percent of GNP.
Net Foreign Saving
The measure of net saving by the foreign sector in the national income
and product accounts is conceptually similar to the current account deficit in
the balance of payments. (The principal difference between them is that
the unrepatriated earnings of U.S. firms abroad are counted as an export of
services in the current account balance, but not included as part of net saving by the foreign sector.) A projection of net foreign saving or of the current
account balance in 1983 or any single year would be extremely hazardous.
In the past 2 years, net foreign saving has been about 1 percent of GNP;
in 1975, on the other hand, the foreign sector showed net dissaving—that
is, net investment—by an amount equal to 0.8 percent of GNP. Relative
growth rates in economic activity here and abroad, differences in the rate of
wage and price increases, changes in exchange rates, and other factors can
cause large movements from one year to the next in our current account balance and hence in net foreign saving.
Looking at trends over a 5-year period, it would be reasonable to expect
market forces to bring receipts and payments on current account close to
balance, and the net amount of foreign saving close to zero. A tendency in
that direction is already under way. This year the current account deficit is
forecast to decline significantly, and a further reduction in 1980 is expected.
By 1982 and 1983, therefore, a reasonable forecast of net saving by the foreign sector would be zero.




113

The Federal Budget
Prospects for the Federal budget, of course, depend importantly on the
fiscal policies pursued in the years from 1981 to 1983. If there were
no further changes in tax laws or Federal expenditure programs other than
those recommended in the fiscal 1980 budget, and if the economy grew as
described in Table 22, Federal receipts would rise much faster than outlays.
With such a "current policy" budget (Table 24), Federal outlays would decline as a share of GNP to under 20 percent by 1983; but Federal receipts
would rise as a proportion of GNP, reaching nearly 22 percent by 1983. This
rise in receipts results from inflation and real growth, which push individuals into higher tax brackets, and from the impact of large increases in
social security taxes scheduled under current law, particularly in calendar
years 1981 and 1983. The unified budget would therefore move from a deficit of $29 billion in fiscal 1980 to a surplus of $73 billion by fiscal 1983.
TABLE 24.—Federal unified budget receipts and outlays under current policy budget,
fiscal years 1979-83
[Fiscal years]
Item

1981

1982

1983

1979

1980

456.0
493.4
-37.4

502.6
531.6
-29.0

576. 8
578.0
-1.2

652.6
614.9
37.8

718.3
645.6
12 J

19.9
21.6
-1.6

20.1
21.2
-1.2

20.9
21.0

21.6
20.3
1.2

21.9
19.7
2.2

Billions of dollars:
Receipts
Outlays
Surplus or deficit (—)
Percent of GNP:
Receipts
. . .- .
Outlays
Surplus or deficit ( — ) . .

. .
-

0)

' Less than 0.05 percent.
Sources: Department of the Treasury and Office of Management and Budget.

A 1983 Federal surplus of that size, combined with a State and local surplus of three-fourths of 1 percent of GNP, would imply an overall government surplus equal to 3 percent of GNP, wrhich is much larger than we have
usually seen during periods of high employment. Maintaining a strong growth
of economic activity under such circumstances would require a substantially
larger excess of private investment over private saving than has been typical
of past periods of high employment.
Table 25 shows the balance between investment and saving in the private
sector for selected periods of relatively high employment: 1952-53, 1955-56,
1965-66, 1972-73, and the past 2 years. The forecast for 1979-80 is also presented. The difference between private saving and investment in periods of
high employment has varied considerably, but the excess of private saving
over investment has not been more than 1*4 percent of GNP. A large surplus
in the governmental sector would of course provide ample funds for financing
investment outlays, and thus tend to encourage a high rate of private invest-




114

ment. But past experience suggests that an excess of private investment over
private saving equal to 3 percent of GNP would not be realized even under
the best circumstances.
TABLE 25.—Private net saving and investment and the unemployment rate, 1952—80
Excess of business
investment over
personal saving

Business net
investment

Personal saving
Period

Billions
of
dollars

Percent
of
GNP

Billions
of
dollars

Percent
of
GNP

Billions
of
dollars

Percent
of
GNP

Unemployment
rate
(percent)

1952-53 average..

16.5

4.6

12.2

3.4

-4.3

-1.2

1955-56 average..

17.3

4.2

20.7

5.1

3.5

.8

4.2

1965-66 average..

31.6

4.4

28.3

3.9

-3.3

5

4.2

1972-73 average..

59.8

4.8

66.4

5.4

6.6

.5

5.2

1977__
1978 *
_

66.9
76.7

3.5
3.6

69.2
99.9

3.7
4.7

2.3
23.2

.1
1.1

7.0
6.0

1979-80 average 2

87

3.6

4.4

22

.9

6.1

109

3.0

1

Preliminary.
* Forecast.
Sources: Department of Commerce (Bureau of Economic Analysis), Department of Labor (Bureau of Labor Statistics),
and Council of Economic Advisers.

Viewing the issue from a somewhat different vantage point, the rise in
Federal tax receipts from 20 percent of GNP in fiscal 1980 to nearly 22 percent 3 years later would represent a record peacetime increase in the burden
of taxation on the private economy. Maintaining strong growth in private
consumption and investment in the face of such an increased fiscal drag would
be virtually impossible. Adjustments of fiscal policy from the current Administration policy budget would be needed to keep the economy moving forward steadily and strongly.
In principle, a lessening of restraint through fiscal policy adjustments
could be accomplished either by increasing Federal outlays above the current policy base or by cutting tax rates. Relying mainly on reductions in
taxes to promote growth in the private sector would be consistent with
the objectives of the Humphrey-Hawkins Act and with the goals of this
Administration. It would also prevent tax burdens from reaching an unprecedented level.
The appropriate magnitude and timing of such adjustments cannot, however, be determined now. The fiscal policy needed to maintain a smoothly
functioning economy from 1981 through 1983 will depend on spending
propensities of consumers and businesses, the amount of stimulus or drag
on the economy from the foreign sector as well as from State and local
government budgets in those years, developments affecting wages and prices,
the course of monetary policy, and so on. The stronger the autonomous
growth in the non-Federal sectors of the economy, the smaller the fiscal
policy adjustments needed to keep the economy growing along the path




115

described in Table 22, and the more rapid the progress toward a balanced
budget. Achieving a balanced budget is consistent with the principles of
the new legislation. But the speed with which that objective can be realized
will depend on developments that cannot now be foreseen.
Achieving a balanced Federal budget and at the same time maintaining a
high growth rate of real GNP do not appear to be inherently conflicting aims.
If the Federal budget were in balance in 1983, the excess of private investment over saving in 1983 would have to be roughly 1 percent of GNP,
about equal to the probable magnitude of the State and local surplus.
Such a relationship is within the boundaries of historical precedent. It occurred in 1955-56 and again last year. And the forecast for 1979 and
1980 implies a continuation of private investment at a rate that would
exceed private saving by only a little less than 1 percent.
Factors Affecting Investment and Saving
Demographic factors are likely to favor relatively strong investment
growth over the next 5 years. As noted earlier in this chapter, the postwar
baby boom will give rise to very large increases during the next 5 years in the
prime home-buying age group (25-34 years). The demand for housing is
therefore likely to be robust in the years immediately ahead.
Demographic factors will also work somewhat to keep the personal saving rate low compared to the early 1970s. The 1972-73 Consumer Expenditure Survey data (Table 26) indicate that personal saving rates are about
the same between the ages of 25 and 54, but persons in the 55-64 age group
save a considerably higher proportion of their income than others. The
number of people in this age group will be rising at a much slower rate than
the 1.5 percent average increase for the group aged 20 and over. Moreover,
the group aged 65 and over will be growing somewhat more rapidly than
the average, and the typical saving rate for this group is comparatively low.
It is true that the population under 25 will be declining during the next 5
years, and households with heads under 25 tend to be dissavers. But the
proportion of total income and saving accounted for by this group is not
large.
TABLE 26.—Saving rate and population growth, by age of household head
[Percent!

Saving
rate,*
1972-73

Age of household head (years)

-6.9
9.4
9.7
9.2
11.2
6.1

Under 25
25-34 . .
35-44
45-54
55-64
65 and over

Distribution
of disposable
personal
income,
1972-73
5.3
20.4
21.0
24.5
17.0
11.8

Projected
annual
population
growth rate,
1980 to 1985
-0.3
1.8
4.1
-.2
.5
1.8

i Saving as percent of disposable personal income.
Sources: Department of Commerce (Bureau of the Census) and Department of Labor (Bureau of Labor Statistics).




116

A substantial increase in business investment in the period ahead would be
required to improve productivity. Growth in the ratio of capital to labor inputs has been declining since the late 1960s; in recent years, in fact, the
ratio of capital to labor inputs has not increased at all: the labor force has
expanded rapidly while growth in the capital stock has slowed. This decline
in capital intensity has been one cause of the lower rate of productivity growth
typical of this period. Over the next 5 years, business fixed investment will
have to increase rapidly if the aggregate capital-to-labor ratio is not to fall
even further.
High investment requirements do not, of course, translate directly into
incentives for businesses to press forward with investment programs to ensure
satisfactory growth in the stock of capital. Making certain that the incentives
to invest in plant and equipment will encourage the needed rate of capital
expansion must be a fundamental aim of economic policy. Policies
toward this end are discussed more fully later in this chapter.
Perhaps the most important single contribution to this objective would
be lower inflation. Expectations that the inflation rate will decline steadily
over the next 5 years would directly attack one of the obstacles to the recovery in business investment, since the uncertainty faced by business has
been an important deterrent to investment planning. Indirectly, reduced
inflation would have even larger effects on financial markets. With declining
inflation, we could look forward confidently to a marked fall in short- and
long-term interest rates, to strongly rising stock prices, and hence to a reduction in the cost of both debt and equity capital. Thus, if inflation can be
steadily reduced over the next 5 years, prospects would be much improved
for achieving a healthy growth in business investment.
ATTAINING THE GOALS FOR UNEMPLOYMENT AND INFLATION
The most difficult problem we as a Nation will face in reaching the goals
of the Humphrey-Hawkins legislation is to reduce unemployment to 4 percent and simultaneously lower the rate of inflation to 3 percent. Although
our economy was operating at a level somewhat below potential in 1978,
intensified pressures on wage rates and prices have already appeared.
The Humphrey-Hawkins Act recognizes that we cannot reach the goals
for unemployment and inflation simultaneously by relying solely on monetary and fiscal policies. The Administration shares this view. As Chapter 2
indicated, the anti-inflation program announced by the President on October 24 is based on the premise that braking the momentum of inflation will
require widespread compliance by business and labor in reducing the rate of
private price and wage increases. Success in that endeavor is critical to our
ability to attain the unemployment goals of the Humphrey-Hawkins Act as
well as the inflation goal. As noted earlier, continuation of inflation at a high
rate could seriously jeopardize the prospects for maintaining a strong
economy.




117

Unwinding the inflation inherited from the past will not remove the risk
that new inflationary forces might develop in the future. Prudent fiscal and
monetary policies will be needed to avoid an emergence of excess demand.
Improved structural policies will also be required. It will be particularly
important to find ways to curb the inflationary effects of substantial future
reductions in unemployment from present levels.
The current structure of labor markets in our economy makes it especially hard to reach 4 percent unemployment and reduce inflation substantially at the same time. Unemployment varies widely across demographic
groups. Measures to address the structural sources of unemployment have
been an ingredient of government economic policies for more than a decade, but differential unemployment ratios among groups in the labor force
are greater today than they were 10 years ago. Unless these differentials can
be reduced, the prospects are dim for making substantial further reductions
in the unemployment rate without creating additional inflationary pressures.
The uneven incidence of unemployment among groups in the labor force
is shown in Table 27 for the fourth quarter of 1978 and the fourth quarter
of 1972. In the earlier period the unemployment rate for adult white males
(aged 20 and over), the most experienced group of workers in the labor
force., was about the same as it was in late 1978. Over the past 6 years the
unemployment rate for almost every other group has risen relative to the
rate for adult white males. This widening of unemployment rate differentials has been caused in part by the fact that other groups, which have relatively high unemployment rates, are growing faster as a share of the labor
force than adult white males.
TABLE 27.—Selected unemployment rates, fourth quarter 1972 and fourth
quarter 1978
[Percent; seasonally adjusted]
Group
All civilian workers
White 20 years and over.
Males.. _
Females.
Black and other 20 years and over..
Males...
Females.
Teenagers (16-19 years)..
White....
Black and other.
Males 20 years and over
Females 20 years and over
Veterans 20-34 years
Both sexes 55 years and over.
Source: Department of Labor, Bureau of Labor Statistics.

In well-functioning labor markets some differences among the unemployment rates of various demographic groups can always be expected.




118

Teenagers and young adults tend to change jobs more frequently than
older workers as they try new occupations and search for long-term careers.
Short spells of unemployment when they first enter the labor market or
while they look for better jobs keep their overall unemployment rate above
the average for older workers. Women, particularly during child-bearing
years, tend to move into and out of the labor market more frequently than
men.
The proportion of women and teenagers in the labor force has grown
substantially since the earlier postwar years, and both of these groups have
higher unemployment rates than average. In 1956 the overall unemployment
rate was 4.1 percent. If the unemployment rates of each of the various age
and sex groups in the labor force today were the same as in 1956, the overall
rate would be 4.6 percent. Changes in the demographic composition of the
labor force since 1956 have thus added about one-half of 1 percentage point
to the unemployment rate. Between now and 1983 the structure of the labor
force is likely to change somewhat, bringing a lower proportion of teenagers
and a higher proportion of women. However, the effect of this change on the
overall unemployment rate will not be large. If unemployment rates of each
major demographic group in 1983 were the same as in 1956, the overall rate
in 1983 would still be 4.6 percent. Achieving an overall unemployment rate
of 4 percent at any time within the next 5 years would therefore require that
the jobless rates of many groups within the labor force be brought well below
the levels associated with full employment in earlier years.
Although part of the difference in unemployment rates can be explained
by differences in voluntary job turnover and entry and reentry into the
labor market, major structural obstacles also confront many groups of
workers—especially, but not exclusively, minorities. Many potential imbalances in labor markets disappear as workers move from sectors offering
relatively poor prospects for employment and earnings to sectors offering
better opportunities. But in many instances this process may be blocked by
the difficulty of acquiring skills, wage rigidities that discourage employers
from hiring less productive workers, and various sorts of discrimination. As
pointed out in Chapter 2, the structural rigidities and uneven incidence of
unemployment make it very hard under current circumstances to reduce the
overall rate of unemployment substantially below the present level without
encountering labor shortages in some markets. As the overall unemployment
rate declines, demand for skilled, prime-age workers exceeds supply of those
workers and puts upward pressure on their wages, even though unemployment among minorities, teenagers, and women may remain unacceptably
high. The inflationary pressures in the tight labor markets carry over into
the rest of the economy, contributing to general inflation.
Chapter 2 also noted that improvements in various income maintenance
programs may have increased the time during which individuals search for




119

better jobs, thus raising the unemployment rate associated with excess
demand in labor markets. The primary focus of labor market policies in the
United States has been on manpower training programs, public service employment, and the provision of labor market information. This Administration has maintained a strong emphasis on these traditional programs, but it
has also provided resources for new programs aimed specifically at creating
work and training opportunities for youths and the poor.
Achievement of substantially lower rates of overall unemployment in a
noninflationary environment will hinge on whether governmental policies
can effectively reduce the structural sources of unemployment. Toward that
end the Administration is pursuing several strategies.
First, strong efforts are being made to target public service employment
programs and to reduce the degree of substitution. In the past, the net employment gains attributable to public service employment programs have
been considerably smaller than the number of available jobs because some
government units used funds from that source to pay for work that would
have been done in any case. Amendments to the Comprehensive Employment and Training Act (CETA) in late 1976 were designed to direct public
service jobs more effectively toward the unemployed. As the number of these
jobs was expanded in 1977 and early 1978, the Department of Labor took
steps to create as many net new jobs as possible with available funds, and to
eliminate fraud in the program. In 1978 a new structural employment component was added under Title II of the act, establishing a category of public
service jobs specially targeted for the disadvantaged and the long-term unemployed. Under the new Title II program, State and local governments
are prohibited from supplementing the wages of public service employees.
During 1977 and 1978 the Administration emphasized the use of public
service jobs to promote recovery. With the economy now closer to high employment, the Federal budget for 1980 provides funds to support 467,000
public service jobs under CETA at the end of fiscal 1980. An increased share
of the jobs, however, are being designated for the structurally unemployed
under Title II. The more specific targeting and the prohibition of supplementation should improve the net job-creating impact of the program.
Second, in 1979 the Administration will propose a major incremental
welfare reform plan. If enacted promptly, this plan will be fully effective in
fiscal 1982. The Administration's plan will reform cash assistance programs
and further develop the use of CETA to combat structural unemployment.
The plan will expand Title II of CETA and direct more of the jobs to principal earners in families eligible for cash assistance. The exact number of
new Title II jobs in 1982 will depend in part on what we learn about CETA
in the next 2 years and in part on the budgetary and economic situation in
1982.
Third, special employment programs that are established for youths under
the Youth Employment and Demonstration Projects Act and other legisla-




120

tion will continue to pay particular attention to the needs of the disadvantaged. Total funding for these programs in fiscal 1980 will be held constant
at the fiscal 1979 level.
Fourth, the Administration has devoted substantial new resources in
1979 and 1980 to promoting employment opportunities for the disadvantaged in the private sector. As requested by the President, the 1978 CETA
legislation provides authority for a special private sector employment
and training initiative that will finance 10,000 new job training slots in private business. Under this program, private business will join with the Federal
Government, State and local CETA programs, and the U.S. Employment
Service to increase permanent private sector jobs for the disadvantaged.
In addition, funding is being sought to create about 500,000 opportunities for
training and work experience that will be available to the disadvantaged
under other parts of CETA. The targeted employment tax credit, which
was enacted in the Revenue Act of 1978, provides an income tax credit of 50
percent of the first $6,000 of wages in the first year of employment and 25
percent in the second to encourage the employment of disadvantaged persons,
particularly youths between the ages of 18 and 24. Although this approach
to structural unemployment is new to the United States, selective employment subsidies have been tried in a number of European countries, including France, West Germany, Sweden, and the United Kingdom.
In various ways these programs directed toward the problem of structural
unemployment can reduce the labor market shortages and inflationary pressures that would otherwise be associated with achieving a low overall rate of
unemployment. To the extent that training programs provide skills for disadvantaged groups, they increase the supply of workers available to fill
some of the skilled and semiskilled jobs that are* created in a rapidly
growing economy. Evaluations of the success of Federal training programs
for the disadvantaged provide mixed results. But there is some evidence that
training programs increase the employability and earning power of trainees
by an amount that exceeds the cost of the programs. The extent to which
these programs could be expanded significantly and still retain their effectiveness is uncertain.
Public service employment programs can in principle help the
unemployment-inflation tradeoff. If carefully concentrated on the structurally unemployed, they can add to total employment without substantially
increasing upward wage pressures in the labor market. And to the extent
that they inculcate better working habits and skills among those who would
otherwise be chronically unemployed, they act as a training program with
the advantages described above. But several limitations restrict the usefulness
of public service employment in dealing with the unemployment-inflation
tradeoff. In periods of tight labor markets—when the tradeoff problem is
most serious—a public service jobs program that pays relatively attractive
wages may encourage workers who would otherwise be available for private




121

employment to take public service jobs, thereby adding to upward wage
pressures. On the other hand, if public service jobs paid relatively low wages
they might attract very few workers during periods of tight labor markets.
While carefully designed public service employment programs can help provide jobs to the disadvantaged, reduction of structural unemployment by
enough to achieve the Humphrey-Hawkins unemployment and inflation
goals will require the use of other programs as well.
The more recent additions to our armory of weapons against structural
unemployment are the special private sector employment initiative and the
targeted tax credit. These have the advantage of directing the structurally
unemployed to the private sector where the bulk of new jobs will be forthcoming. They may make an important contribution to improving the tradeoff between unemployment and inflation, but they are too new to have been
fully evaluated.
Industrial Capacity and Sectoral Problems
At the present time the utilization of industrial capacity is below, but not
far below, the peak levels reached in 1973. At that time pressure on
capacity, especially in raw materials industries, began to develop, adding
to inflationary pressures. To avoid similar problems in the future, industrial
capacity over the next 5 years would have to expand about as fast as output.
Last year the Council of Economic Advisers investigated the relation
between output, investment, and capacity expansion. The conclusion was
that a fairly rapid expansion of output—4.8 percent a year between 1977
and 1981—would raise the capacity utilization rate. The rate would remain,
however, below inflationary levels if there were a substantial expansion of
investment similar to that in 1962-66, when both capacity and output grew
rapidly. In 1979 and 1980, the growth of output is forecast to be slower
than in 1978. Capacity utilization over the next 2 years is therefore
unlikely to rise, and it might fall somewhat. As a consequence, there
appears to be little risk of widespread major capacity shortages in this period.
But in the subsequent 3 years, achievement of the Humphrey-Hawkins goals
for unemployment would require growth in output averaging about 4%
percent a year, or only slightly below the 4.8 percent growth rate analyzed
in last year's capacity utilization study.
In general, therefore, the conclusions reached in last year's study are
applicable to the 1981-83 period. If real GNP grew at a 4*4 percent average
rate, a rapid growth in investment would be necessary to hold the capacity
utilization ratio to levels that did not threaten inflation.
An earlier section of this chapter discussed the relationships between
saving, investment, and the government budget that would be needed to
achieve the Humphrey-Hawkins goals for output and employment and still
move toward a balanced Federal budget. The analysis showed that a
substantial expansion in private investment relative to private saving would
be needed. Investment would have to grow at rates approximating those of




122

the 1962-66 period—a difficult but not unattainable goal. If that occurs, the
requisite capacity expansion would be forthcoming.
There are other ways in which aggregate demand could expand
rapidly in the 1981-83 period. Large consumption-oriented tax cuts, for
example, would result in a faster expansion of consumer outlays but a
slower growth in private investment than if tax cuts were oriented more
toward stimulating capital formation. Consumption-led growth would create
a danger that capacity would not expand fast enough to avoid inflationary
pressures. Such an outcome would not only defeat the Humphrey-Hawkins
goal of reducing inflation, but also threaten the possibility of maintaining
satisfactory economic growth and achieving a substantial reduction in the
rate of unemployment.
SUMMARY
The aspects of economic performance that are critical for the achievement of our longer-run economic objectives were discussed above.
Growth in aggregate demand sufficient to reduce unemployment to the
levels set forth in the act would require fiscal policy adjustments after 1980,
which could be accomplished within the framework of balancing the budget
and reducing Federal outlays as a share of GNP by reducing taxes. A strong
growth in private investment would be needed. Business investment would
have to be particularly strong, but not out of line with performance
during other times in the postwar period. Without progress in reducing
inflation, however, this outcome is unlikely to be realized.
The most difficult obstacle to achieving the 1983 goals arises from the
potential inconsistency between the objectives for growth and unemployment
and the need to reduce inflation. Aggregate demand policies must be framed
to take this problem into account. Economic policies for the next 2 years
are designed to avoid any acceleration of inflation from the demand side,
and to use macroeconomic instruments together with the pay and price standards to unwind the inflation inherited from the past. It is clear, however,
that the task of reducing inflation to an acceptable pace will not be completed by 1980. We should not commit ourselves now to highly stimulative
macroeconomic policies in the years after 1980; to do so might result in an
acceleration of inflation, thereby threatening the maintenance of stable
economic growth.
Our prospects for achieving the 1983 goals depend upon finding ways to
reduce the divergence of unemployment rates among various demographic
groups. With the current structure of labor markets, reducing the overall
unemployment rate to 4 percent, and the unemployment rate for adults to
3 percent, would require that unemployment rates for experienced adult
workers be brought down to extremely low levels. There would be a very substantial excess demand for those workers, giving rise to inflationary wage and
price increases. The Federal Government has a number of programs in place,




123

and is inaugurating several new ones, aimed at reducing structural unemployment. At the present time, however, we cannot be sure that continuing
or even rapidly expanding these programs would make possible an overall
4 percent unemployment rate without accelerating inflation. Much work
needs to be done to improve existing employment programs and discover new
approaches to structural problems if the goals of the act are to be realized.
INVESTMENT POLICY REPORT
The Humphrey-Hawkins Act puts considerable emphasis on the importance of capital formation in achieving our national economic goals. One
of its requirements is the inclusion of an Investment Policy Report in this
Economic Report.
Private investment during the coming years will play two important roles
in shaping economic developments. A strong rise in business fixed investment will be required to achieve sustained economic growth and declining
unemployment. Substantial growth in the capital stock will also be needed
to expand our capacity to produce. Only by devoting a significant share
of current production to replace, modernize, and expand the capital stock
can we hope to maintain adequate growth in productivity.
Growth in the capital stock will be of strategic importance in particular
sectors of the economy. If growth of productive capacity were to lag
in sectors producing supplies that were of critical importance in other industries, bottlenecks would develop, restricting overall growth and adding
significantly to inflationary pressures in periods of high demand. This is
particularly true of the basic materials and energy-producing industries
where substitutes, exclusive of imports, may be difficult to find.
Our competitive position in world markets will also depend heavily on
whether or not business fixed investment grows at an adequate pace. Most
other industrial countries devote a larger share of output to investment
than the United States does, and their growth rates of productivity have also
been higher than ours. Increasing the growth of productivity in the United
States would help significantly to improve the outlook for our foreign trade
balance and to strengthen the dollar in foreign exchange markets.
POSTWAR TRENDS IN INVESTMENT AND CAPITAL FORMATION
Business fixed investment has been quite volatile historically—fluctuating
in absolute level and as a percentage of GNP in response to a number of
factors: prospects for future output growth and profits, the degree of uncertainty about the future, growth rates of population and the labor force,
relative costs of capital and labor, and the speed of innovation. As shown in
Chart 8, business fixed investment since 1946 has ranged between 8/ 2 and
11 percent of real GNP. Although there is no obvious sustained trend in this
ratio, it tended to hover close to 9 percent in the 1950s and early 1960s, and
then moved somewhat above 10 percent from 1965 to 1974.




124

Chart 8

Real Nonresidential Fixed Investment as
Percent of Real GNP
PERCENT

11.5
11.0

10.5

10.0

8.5 o i*i

1946

i

i

i•i

i

1950

i

i

i•i

1955

i

i

i

i•i

i

1960

i

i

i•i

1965

i

i

i

i•i

1970

i

i

i

i*i

i

i

I

1975

SOURCE: DEPARTMENT OF COMMERCE.

The recovery of investment from the 1974—75 recession was slow. The
9.7 percent investment share for 1977, the third year of recovery, was only
midway between the low of 8.7 percent registered in 1952, 1958, 1959, and
1961 (all but 1952 being recession years), and the high of 10.8 percent scored
in 1966. Last year investment regained a 10 percent share of GNP.
If a rough estimate of the investment contributed by the public sector is
added to private investment, the investment share of GNP is increased. Although differences in statistical measurement and in industry structure
make international comparisons imprecise, the evidence (Table 28)
suggests that the share of investment in gross domestic product is lower in the
United States than in other industrial countries. In the years following
World War II such differences were explainable by the need in Japan
and in European countries to replace productive capital destroyed in the war.
More than 30 years after the war, this explanation can no longer be valid.
International comparisons are not the only, or even the most important,
indicator of the adequacy of investment. Achieving the objectives of the
Humphrey-Hawkins Act over the next 5 years would require strong investment to support the expansion of private demand, to equip an increasing
number of workers, to improve productivity growth, and to meet environmental and social goals. The precise amount of capital required to equip a

125
278-216 O - 79 - 9




TABLE 28.—Real nonresidential fixed investment as percent of real gross domestic
product, 1966-76
Country

Percent of GDP

United States

13.5

Canada

17.2

France'

16.7

West Germany

_ _

17.4

Japan

26.4

United Kingdom-

14.9

i1970-75.

Note.—Data are on an OECD basis.
Source: Organization for Economic Cooperation and Development.

worker is, of course, variable. Alternative technologies exist or can be devised
to produce the same output with differing ratios of capital to labor, and shifts
between industries can also change the overall ratio, since capital-labor
ratios differ across industries. Because growth in the civilian labor force
over the past decade has been more rapid than in the preceding 10 years
(28 percent compared to 16 percent), an acceleration in investment would
have been needed to maintain the rise in the capital-labor ratio achieved
earlier. More rapid growth of employment in less capital-intensive sectors
(government, trade, finance, insurance and real estate, and some services)
than in manufacturing, utilities, communication, and transportation, however, has perhaps reduced the need for this acceleration.
The capital-labor ratio has typically shown a long secular upward trend
in all the major industrial countries. This has coincided with improvements
in the health and education of the work force and substantial technological
change. The precise roles and interactions between these forces in contributing to the secular growth in productivity remain subject to considerable
debate and are difficult to verify quantitatively. It is worth noting, however,
that the U.S. capital-labor ratio grew at an average annual rate of nearly 3
percent between 1948 and 1973. Since then the growth of this ratio has
declined more than 1 percentage point. These developments coincided with a
decline in the trend rate of growth of productivity in the private nonfarm
economy from 3 percent between 1948 and 1973 to under V/2 percent over
the past 5 years. Restoring the earlier trend in the ratio of capital to labor
input would make an important contribution to greater productivity growth,
but such an increase will require devoting a larger share of our national
output to business investment than has been characteristic of recent years.
A number of other considerations suggest that society would benefit from
stronger investment than has occurred in much of the recent past. To expand
our production of domestic energy, at least in part from new sources, will
require large outlays at some future time. In addition, society is demanding
protection from environmental pollution, occupational hazards, and product




126

deficiencies. Achieving these social goals, which are not part of output as
conventionally measured, entails additional investment. Business expenditures for pollution abatement have risen to a significant fraction of total business fixed investment in recent years, an estimated 5 percent in 1977 and 4.7
percent of total planned investment in 1978. Table 29 illustrates the substantial variation among industries in these outlays. For some, the percentage of total investment is more than twice the national average. Investments
for pollution abatement and other social objectives may, to some degree,
displace investment that would expand capacity. Consequently higher total
investment will be needed if we are to meet both output goals and social
objectives.
TABLE 29.—Capital expenditures by business for pollution abatement, by industry,
1976-78
[Percent of total capital outlays by business!
1978 planned
Industry

1976

1977
Total

Water

Solid
waste

5.6

All industries
Manufacturing
Durable goods.
Primary metals
Electrical machinery
Machinery, except electrical
Transportation equipment
Stone, clay, and glass
Other durables
Nondurable goods..
Food, including beverage..
Textiles
Paper
Chemicals
Petroleum
Rubber
Other nondurables
Nonmanufacturing..
Mining
Railroad
Air transportation
Other transportation
Public utilities
Communication, commercial, and
other i
1

Air

5.1

4.7

2.4

1.9

0.4

8.3

7.0

6.2

2.9

2.8

.5

6.6

5.9

5.5

3.0

2.1

.3

15.7
5.6
1.6
3.4
6.1
3.9

lb.7
3.4
1.8
3.1
7.3
3.6

14.4
3.4
1.8
4.0
7.3
2.9

9.4
1.1
.7
1.5
4.9
1.3

4.6
1.9
1.0
1.9
2.1
1.4

9.6

8.0

6.8

2.7

3.4

4.5
4.4
14.7
11.4
10.9
3.4
1.4

4.2
3.8
13.8
10.2
8.2
3.3
1.2

4.7
3.5
9.6
9.2
7.0
3.0
1.0

1.7
1.0
3.6
3.5
3.0
1.9
.6

2.5
1.9
5.3
5.1
3.3
1.0
.3

3.5

3.5

3.6

2.1

1.2

2.2
1.1
1.2
1.1
9.1

2.2
1.0
.8
1.0

3.1
1.4
.9
.9
8.7

1.1
.0
.6
.2
5.4

1.0
1.3
.2
.6
2.8
.2

Consists of communication, trade, service, construction, finance, and insurance.

Note.—Excludes agricultural business; real estate; medical, legal, educational and cultural services; and nonprofit
organizations. Pollution abatement operating costs are also excluded.
Data for 1976 are based on the survey conducted in November and December 1976. Data for 1977 and 1978 are based on
the survey conducted in November and December 1977.
Source: Department of Commerce, Bureau of Econcmic Analysis.

INVESTMENT INCENTIVES

The most important inducement for investors is the prospect of future
profits from future sales. These profits may come from increased sales activity, reductions in production costs, or improvements that allow a higher
price for the product or attract more buyers of the product. The principal




127

indicators of the profitability of investment are the rate of growth of output,
the percentage of current capacity that is utilized, and the rate of return on
the existing capital stock. Costs of investment are also important, of course.
These include the price of physical units of capital and the costs of financing
investments. Financing costs depend on the after-tax real rate of return
required in capital markets by those who provide funds for investment. Various measures are used for this required rate of return. One is the long-term
corporate bond rate, adjusted for inflation. The required rate of return
could, alternatively, be captured by the earnings-price ratio in the stock market. The price of physical capital and the effective rate of return required
by investors can be combined into a single measure, the ratio of the stock
market value to the replacement cost of corporate net assets. When investors' required rate of return rises relative to firms' current earnings, the
market value of corporate stock declines relative to its replacement cost.
Some of the major measures of the profitability and cost of investment are
summarized in Table 30.
TABLE 30.—-Determinants of businessfixedinvestment, 1955-78
[Percent]
Nonfinancial corporations
Ratio of real
Capacity utiliinvestment to zztion rate in
realGNP
manufacturing1

Year

1955
1956 .
1957
1958
1959

Cash flow
as percent
ofGNPJ

Rate of return Rate of return Ratio of market
on depreciable on stockholders' value to replacement cost
assets 3
equity *
of net assets'

9.3
9.7
9.7
8.7
8.7

87.0
86.1
83.6
75.0
81.6

9.3
8.9
8.9
8.6
9.2

15.0
13.2
11.6
9.5
12.2

6.0
5.2
4.9
3.8
4.8

0.932
.921
.853
.874
1.044

1960
1961
1962
1963
1964

9.0
8.7
8.9
8.8
9.3

80.1
77.3
81.4
83.5
85.7

8.9
8.8
9.4
9.6
10.0

11.1
11.0
12.7
13.6
14.8

5.0
4.4
5.8
6.3
7.5

1.019
1.147
1.092
1.204
1.295

1965
1966
1967
1968
1969

10.3
10.8
10.3
10.3
10.6

89 5
91.1
86.9
87 0
86.2

10 4
10.3
9.9
9 4
8.6

16.3
16.2
14.2
14.2
12.8

9.0
8.8
7.7
7 6
6.9

1.360
1.205
L. 217
?S7
L 124

1970
1971
1972
1973
1974

10.2
9.8
10.0
10.6
10.7

79.2
78 0
83.1
87.5
84.2

7.9
8 2
8.6
8.0
6.9

10.1
10.3
11.5
12.3
11.4

4.4
5.2
6.4
8.7
8.4

.911
000
1.076
016
.756

1975
1976
1977
1978«

9.4
9.4
9.7
10.1

73.6
80.2
82.4
84.2

8.7
9.1
9.0
9.9

9.3
10.4
10.6
10.6

5.2
4.8
6.2
8.9

.725
.825
.768
.703

9.6
9.6

86.2
83.8

9.9
9.3

14.7
13.0

7.5
6.1

[.231
1
] L.091

_ ..
_.

_

_.

1962-66 average
1955-70 average
1

Federal Reserve Board index.
Cash flow calculated as after-tax profits plus capital consumption allowance plus inventory valuation adjustment.
Profits before taxes plus capital consumption adjustment plus net interest paid divided by the stock of depreciable
assets valued at current replacement cost.
* After-tax profits corrected for inflation effects divided by net worth (physical capital component valued at current
replacement cost).
* Equity plus interest-bearing debt divided by current replacement cost of net assets.
* Preliminary.
2

1

Sources: Department of Commerce (Bureau of Economic Analysis), Board of Governors of the Federal Reserve System,
and Council of Economic Advisers.




128

A year a^o the Economic Report noted that the 1974-75 recession and
the period of price controls in 1971-73 had severely depressed investment
incentives. As was also noted, measures of investment incentives were recovering, and continued expansion and rising utilization rates held the
promise of further improvement.
Table 30 presents preliminary data for 1978 indicating substantial further
gains in capacity utilization and in the rate of return on stockholders' equity.
The latter measure, the ratio of after-tax economic profits to net worth, was
boosted by the effect of inflation in reducing the real burden of corporate
debt. Furthermore, the improvement in the rate of return on stockholders'
equity relative to earlier periods partly reflects a shift in the structure of
corporate financing of investment from equity to debt issues.
The rate of return on all depreciable assets (profits before tax plus capital
consumption adjustments and interest paid) maintained the level it had
achieved in 1977 but did not increase further. The rate of corporate cash
flow was slightly depressed because profit growth slowed somewhat; although
profits measured in book value terms were strong, a significant part of this
strength was attributable to capital gains on inventories and to underestimation of depreciation, both resulting from the increase in inflation.
The weakest of the determinants of investment in 1978 was the ratio of
market value to replacement cost of capital, which fell in response to the
weakness in stock prices. Equity values have risen relatively little during this
cyclical recovery for many reasons: uncertainties engendered by the depth
of the 1974-75 recession, the sharp disruption caused by higher energy costs,
fluctuations in the exchange value of the dollar, and a volatile inflation rate.
Of the four measures of profitability shown in Table 30, only one, the
rate of return on stockholders' equity, has regained the 1955-70 average.
The other three are well below the 1955-70 average and still further below
the average for 1962-66, when investment outlays rose very strongly.
In view of the possible increase in the perceived risks of investment since
the early 1970s, one might surmise that businesses have begun to respond differently to the usual measures of investment incentives. During the past
year the Council of Economic Advisers extended its earlier analysis of this
subject. Economists have suggested several alternative formulations, or models, of the determination of investment, which emphasize to various degrees
the influence on investment of growth of output, variations in capacity
utilization, changes in cash flow and in the rental price of capital, and the
ratio between the market value of capital and its replacement cost. All involve substantial margins of error.
The Council has not attempted to choose between these different formulations. It has tested, for each model, whether the statistical relation between
investment and those factors that determine investment in the model differ
significantly in the various periods covered by the examination.
This analysis suggests that the behavior of investment in equipment has
not changed significantly during the years since 1973 in comparison with




129

earlier years. Variations from year to year in the strength of investment in
equipment, relative to the forces expected to determine it, have remained
within the normal margin of error. Indeed, if there has been any point in
recent years at which the pattern of investment in equipment seems to
have changed, the most likely time would have been in 1968-69. This period
also marked the beginning of a slowdown in the growth of the capitallabor ratio.
Most formulations indicate that investment in structures was unusually
slow following the 1974-75 recession and that the substantial recovery last
year was not explained by reference to previous relationships. Quite possibly,
special factors affecting particular industries may underlie this structural
change. For example, early in the recovery the impact of environmental
regulations on the steel industry was very heavy at a time when capacity
utilization and profits were exceptionally low both here and abroad, and
foreign competition was particularly severe. Similarly, uncertainties about
energy prices may have had a perverse effect on investment by utilities
before the enactment of the energy bill.
This analysis suggests tentatively that some weakening of the demand for
equipment may have occurred at the end of the 1960s or early in the 1970s
in response to greater perceived risks, and that a variety of special factors
may have disrupted the normal pattern of investment in structures. Moreover, as noted above, the profitability of investment has not yet regained the
high level prevailing in the early 1960s. If the investment needed to reach
our economic goals in 1983 is to be realized, policy actions are required that
will strengthen investment incentives and reduce investment costs and risks.
Tax policy is one instrument that can encourage investment by lowering
the rental cost of capital, or raising its after-tax rate of return. The Revenue
Act of 1978 contained important measures toward achieving this end.
The corporate tax rate was reduced by lowering the top rate from 48
percent to 46 percent and by scaling the rate up more gradually, across
four brackets instead of two, so that the top rate is paid on earnings over
$100,000 rather than $50,000. The act also made the investment tax credit
permanent. The limitation on the amount of tax liability that could be offset by the credit is to be raised from 50 to 90 percent by 10 percentage point
increments from 1980 to 1982; the credit is extended to cover rehabilitation
of nonresidential structures and single-purpose agricultural and horticultural structures; and it is liberalized for certain pollution control facilities.
Selected tax treatment of small businesses was also liberalized. Finally,
taxes on capital gains were reduced. The proportion of net long-term capital
gains that can be excluded from an individual's taxable income was raised
from 50 percent to 60 percent. The alternative tax of 25 percent was
dropped, and the excluded portion of capital gains will no longer be counted
as a preference item subject to the minimum tax. A new alternative minimum tax was introduced, however, with a maximum rate of 25 percent.
These changes reduce the effective tax rate on capital gains by about
one-third.




130

All of these tax changes result in a lower rate of taxation on returns to
corporate capital—the key sector for productivity-raising investment, since
it produces 75 percent of total private output. The corporate rate reduction
and the investment tax credit will have the greatest effect because they are
concentrated directly on the corporate sector and on the relatively heavily
taxed, capital-intensive industries in that sector. The reduction in the capital
gains tax may also be helpful in encouraging the supply of risk capital, but
lowering capital gains taxes is not an efficient means of promoting investment.
Only one-third of taxable capital gains accrue on corporate stock or on
assets owned by corporations. Only two-thirds of capital gains accrue on
reproducible long-lived assets used in production. The part of the tax advantage that accrues to other sectors (for example, capital gains on land) may
have no investment effect. Furthermore, a significant fraction of gains
accrue in already lightly taxed industries. As a result, this tax change conflicts with the objective of equalizing taxation across industries and thus distorts the efficiency with which markets allocate resources.
Further tax reductions designed to strengthen investment incentives may
well be needed in the years ahead to encourage a high rate of investment in
new plant and equipment. Given the budgetary constraints required in the
near future to reduce inflation, there is no room for additional tax cuts
now. Over the longer term, however, opportunities for further general tax
reduction will emerge. As they do, reductions carefully designed to strengthen
incentives for business investment should be given high priority.
Other public policies have a substantial influence on investment incentives.
Pollution abatement requirements and other forms of social regulation pertaining to health and safety impose costs on private industry—both current
operating costs (for example, by requiring extra workers for waste treatment
processes) and capital costs (covering such items as extra equipment for
safety and pollution control). Industries like steel, coal, chemicals, and electric utilities have been especially affected.
As discussed in Chapter 2, the Administration is working to make the
regulatory process more rational. A strong and successful effort in this
direction offers promise of reducing significantly the costs of regulation
relative to its social benefits. In turn, this should reduce the effective capital
costs of investment projects and thereby strengthen investment incentives.
Furthermore, removing some of the uncertainty regarding future regulations
will facilitate business investment decisions.
Other policy measures should also help to reduce the risks faced by those
responsible for making investments. The energy legislation enacted last year
will make the relative prices of various types of fuels more predictable. Coordination of Federal efforts to improve productivity is being undertaken by
the National Productivity Council, a cabinet-level group. A major effort is
also under way to promote more rapid innovation through increased emphasis on research and development.




131

RESEARCH AND DEVELOPMENT
Research and development expenditures are a form of investment on
which the returns are very uncertain, especially in the case of basic research.
In some instances society as a whole may benefit from research that adds
nothing to an individual investor's profits: for example,, when it is discovered that a theory does not work. Moreover the investor is usually unable
to capture all of the returns from research even when the results are directly useful. The limited life of a patent and uncertainties about patent
rights and the enforcement of patents have deterred investment in research
and innovation.
The slow growth of research and development expenditures in this
country in recent years may account for a part of the low productivity
growth of the 1970s. After correction for inflation, expenditures for research
and development in 1975 were only 2.6 percent above their level in 1965.
This slow growth was largely due to the decline in space-related research;
private expenditures for research and development grew at roughly the
same pace as the economy. In contrast to the trend over the past decade,
real Federal support for research and development rose by 4.2 percent in
1977 and by 2.6 percent in 1978, while total spending for this purpose
increased to 4.4 and 2.8 percent respectively in these 2 years. This amounts
to a 2-year gain almost three times as great as the rise in the previous 10
years.
Recognizing the importance of basic research to innovation and the high
risks of conducting such research in the private sector, the Administration
initiated a significant expansion of obligating authority and outlays for basic
research and development in the fiscal 1979 budget. Outlays this year in current dollar terms will rise by almost 18 percent from fiscal 1978 levels, and
they are scheduled to increase by an additional 10 percent in fiscal 1980.
The President has also begun a comprehensive interagency review, under
the leadership of the Secretary of Commerce, of all Federal policies bearing
on the process of industrial innovation. This review will rely on assistance
from relevant Federal agencies, representatives from business and labor,
and other interested parties. Its scope is not limited to the influence the Federal Government exerts through direct expenditures and grants for research;
it will also consider the effect of patent, antitrust, procurement, and other
governmental polices that bear indirectly on research and innovation.
THE SUPPLY OF INVESTMENT CAPITAL
The supply of resources available for business fixed investment is limited by
the capacity of the economy to produce goods and by the amounts of those
goods that are preempted for other public and private uses. When substantial slack remains in the economy, expansion of public spending or
private consumption has little or no adverse impact on the supply of investment goods. In fact, an expansion of public spending or consumer demand




132

is likely under those circumstances to increase investment by improving the
perceived profitability of investment.
When the economy is operating close to capacity, however, increases in
public demand or private consumption will adversely affect business fixed
investment, because prices of capital goods are bid up and the cost of borrowing rises. One aim of Federal policy must be to avoid excess aggregate
demand and the inflation and credit market tightness that it generates. A
second aim must be to analyze carefully the social costs and benefits of Federal programs, in order to control the share of the Nation's output absorbed
by the government. Achieving this goal in the context of favorable tax and
monetary policies will help provide the real resources, credit market conditions, and incentives needed for rapid growth of the capital stock.
As the Federal budget is moved toward balance in the context of continued economic expansion, and as growth in the government share of total
output is curbed in the years ahead, more resources will be available for business fixed investment. The combination of this fiscal policy with successful
steps to reduce inflation will create the environment in which monetary
policy can offer more encouragement to investment.
Financial capital in recent years has been available at attractive real interest rates, although nominal rates have remained high. Nonfinancial corporations have raised substantial amounts of funds in credit markets. The
ratio of funds raised in credit markets to total capital expenditures began to
rise rapidly in late 1976 and reached a peak in the first quarter of last year,
after which it tapered off. The 1978 first quarter peak was surpassed historically only in 2 isolated quarters during the 1972-73 investment boom.
A similar pattern appears in the nonfarm, noncorporate sector. For farm
business, on the other hand, growth of credit use was more modest than in
other sectors during 1977, but it accelerated sharply in the second and third
quarters of last year to a pace more than 25 percent above the 1977 average.
These relatively high rates of business credit expansion were facilitated by
the steady flows of funds to those financial intermediaries that are important
for business lending, particularly life insurance companies and pension
funds. Growth in pension fund reserves—a means by which households indirectly provide loans to businesses and governments—rose by a dramatic 46
percent between 1975 and 1977. In the second and third quarters of last year
the average growth in these reserves was 8.6 percent above the 1977 pace.
The cost and availability of equity capital are more volatile than is true of
debt capital, since they depend on the expectations of the public as reflected
in stock prices and on the willingness of private and institutional investors to
accept equity market risks. In periods when credit markets are weak, firms
may thus be forced to accept a higher debt-equity ratio than they would
prefer. This is particularly likely in periods when the flow of internal funds
is small relative to desired investment. It probably happens also to firms in
cyclically sensitive industries that do not have exceptionally strong growth
trends, and to newer businesses that have not yet established strong earnings




133

records. In 1977 and the first half of 1978, new issues of common and preferred stock accounted for only 23 percent of the gross proceeds of stock and
bond issues. The lagging recovery of the stock market during the current
expansion is undoubtedly a major reason why this ratio is lower than in the
mid-1960s, when stock prices were high.
SMALL BUSINESSES
The availability of capital, and particularly equity capital, to small businesses is a fundamental concern. The data at hand suggest persistently higher
debt-equity ratios for small corporations (those with assets under $5 million)
manufacturing nondurable goods than for larger ones. For small manufacturers of durable goods the ratio of debt to equity has been higher than for
large corporations in all years since 1959, except in the period from 1967
to 1971, when borrowing by large corporations rose sharply.
These higher debt-equity ratios and a corresponding heavier reliance
on bank credit are partly due to the fact that small businesses tend to have
a higher proportion of assets invested in inventories and a lower proportion
in plant and equipment. This, in turn, may be caused by a differing distribution of large and small firms within various industries. It may also, however, be a symptom of imperfections in capital markets that limit the availability of equity capital.
Programs of the Small Business Administration (SBA) are designed to
increase the financial capital available to small firms. In 1977 the number of
direct loans approved by the SBA rose 25 percent, and the dollar value of
new loans rose 70 percent. In addition to the direct loan program, the SBA
also licenses, regulates, and provides financial assistance to small business
investment companies (SBICs). The privately owned SBICs pool public and
private funds in order to provide equity and long-term debt capital to newer
small businesses. These latter firms, in contrast to those financed by other
SBA programs, tend to operate in new markets or with new technology. At
the end of 1977 there were 273 SBICs, making use of $428 million of private
capital and $537 million of funds from the SBA. The volume of new financing arranged during fiscal 1977 was $197 million, a 68 percent increase
from the preceding year. In order to provide special attention to the needs
of businesses owned by socially or economically disadvantaged persons, the
SBA administers a parallel program of SBICs for minority enterprises. The
volume of loans under this program grew 72 percent in fiscal 1977.




134

CHAPTER 4

The World Economy—Managing
Interdependence

F

ROM THE EARLY 1950s THROUGH THE LATE 1960s, growing
economic interdependence provided the major impetus toward sustained, rapid growth in the world economy. Just 10 years ago, in his last
Economic Report, President Johnson wrote:
In the past two decades, enormous progress has been made in building
a closely knit international economy. Remarkable growth in the volume
of international commerce has gone hand in hand with sustained world
prosperity; each has contributed to the other. At times, deep and obvious
strains in the international monetary system have imperiled this progress,
but these financial difficulties have been weathered without a serious setback in economic growth or world trade.

Much has changed throughout the last decade. In some areas the momentum of the 1960s has continued: an ever-growing share of world production is devoted to international trade. Financial markets have become more
integrated internationally and have adapted to the task of recycling
unprecedented flows of funds from surplus to deficit countries. For a few
countries of the Third World and the southern tier of Europe, rapid export
growth—and particularly the shift in the composition of exports toward
manufactured goods—have occasioned rapid rises in income growth and
production.
There have also been fundamental changes in the international economic
system. The most dramatic change, of course, was the breakdown of the
Bretton Woods system of pegged exchange rates, and its replacement by a
system of market-determined flexible exchange rates. This change has, by and
large, helped the world economy to adjust to the severe problems confronting
it in the past 5 years—the rise in oil prices and the poor harvests of 1973-74,
the subsequent serious recession, persistently high and divergent rates of
inflation in most industrial countries, and the hesitant economic recovery
outside the United States.
The evolution of the floating rate regime has given individual countries
more elbow room for steering their economies in different directions. The
extent of independence, however, is limited and the need for some coordina-




135

tion of economic policies remains. Indeed, to some extent the major lesson
of 1977 and 1978 is that policy divergences produce severe strains: the rapid
expansion in the United States relative to other major industrial countries
triggered a large and potentially destabilizing depreciation of the dollar
during 1978. The rise in U.S. inflation and the depreciation of the dollar
led the United States to implement a policy of monetary and fiscal restraint,
in coordination with a cooperative action to deal with exchange-market
disturbances.
A second major change from the picture 10 years ago—and one which
has been appreciated only slowly—is the pronounced decline in growth
dynamism of the industrial world. Growth of potential output has been
retarded, but growth of actual output has fallen even further. Aggregate
demand has been sluggish throughout the industrial world outside of the
United States since 1973. Weak investment and cautious consumers generally slowed private demand. Yet the need to reduce inflation and the large
external and public deficits made policy makers cautious. As a result, the
overall growth in the countries making up the Organization for Economic
Cooperation and Development (OECD) slowed to an average of 3.0 percent over the 1973-78 period, compared to 4.9 percent in the preceding
decade.
The reasons for the slowdown of potential output are not fully evident.
The slowing of investment virtually everywhere has resulted in an aging
capital stock. The growth of trade has slowed, and the earlier economic gains
from economic integration have not been repeated. In many countries the
hidden unemployment in agriculture has largely disappeared, leaving little
of the productivity bonus that accompanies a declining primary sector.
Clearly the sharp rise in the cost of energy has led to some costly substitution.
To a lesser extent, generally higher and more volatile commodity prices may
have retarded some productive sectors.
Finally, both actual and potential output growth has probably been restrained because of new views concerning the value of change and economic
growth. Occasionally, a new spirit of "preservationism" has created pressures
to protect the existing structure of jobs and wages and bolster weak sectors.
In part, this spirit is a reaction to acute problems in key industries: excess
capacity in steel, shipbuilding, and textiles, for example, burdens many
economies. But a more cautious attitude has also increased the difficulties of
shifting resources from declining to expanding sectors. Preservationist pressures encourage protectionist trade measures or internal subsidies that could
make the world economy even less dynamic and more prone to inflation.
The adventurous spirit that once characterized much industrial activity and
is vital to rapid structural and economic change may have been suppressed
at least temporarily by the uncertainties of the recent past.
Managing interdependence today is a major challenge. We have been
through a period in which—in contrast to the robust postwar expansion—
growth potential has declined and inflationary pressures have increased. To




136

some extent these conditions may prevail for a number of years. In the past,
numerous structural factors favored rapid expansion and rising productivity:
relative commodity and energy prices fell, trade barriers were lowered, new
technologies came in quickly, and economies of scale were realized. These
favorable factors have been weakened or reversed. The challenge to policy—
at home and abroad—is twofold: to steer our economies safely through
these more hazardous waters and to create conditions that favor sustained
economic growth. Improved international coordination of domestic policies
will be essential to accomplish both of these tasks.
THE GLOBAL ECONOMY: DEVELOPMENTS AND PROSPECTS
In many ways 1978 can be seen as a year of transition for industrial countries. Here in the United States economic growth began to slow after a
strong recovery earlier. In the other major industrial countries, where recovery had been hesitant, growth accelerated somewhat, though not enough
to reduce excess capacity substantially or to prevent a continued upward
drift in unemployment (Chart 9).
The inflation rate accelerated in the United States. In most other industrial countries, inflation rates, which on average exceeded those in the
United States during 1974-77, continued to decline. As a result, the rate
Chart 9

Unemployment in the U.S. and Five
Major Industrial Countries
PERCENT

12
SEASONALLY ADJUSTED

10
UNITED STATES

IG FIVE 1 '

l i l l i I 1 I I i I 1 I I I I I I I I I I I

1973

1974

I I II I II II 1 II I I I I 1 III II I I I1 I

1975

1976

1977

y JAPAN. GERMANY, FRANCE, UNITED KINGDOM, AND CANADA. DATA ARE
GNP-WEIGHTED AVERAGE.
SOURCES: DEPARTMENT OF LABOR AND COUNCIL OF ECONOMIC ADVISERS.




137

1 I I I I I I I I I I

1978

of inflation in the United States in 1978 was higher than the average level
for the major foreign countries (Chart 10).
External positions also changed markedly during 1978. For the OECD
countries as a group the combined current account deficit declined sharply.
The deficit of the United States widened somewhat, but this was more than
offset by the large rise in the combined surplus of the other major countries,
especially Japan, and a marked decline in the combined deficit of the smaller
OECD members. Nevertheless as the year progressed there were increasing
indications that the major imbalance between the positions of the United
States and Japan was beginning to be reversed. Both the Japanese surplus
and the U.S. deficit were smaller in the second half of 1978 than in the first
half.
The year 1979 should see some correction in the cyclical divergence that
has arisen since the oil crisis. As shown in Table 31, the anticipated slowing
of growth in the United States is matched by an expected slight rise of
growth abroad. For the first time since 1975, growth abroad is likely to
exceed growth in the United States. (It should be noted that the growth rates
presented here are year over year, rather than fourth quarter over fourth
quarter as generally presented elsewhere in this Report.)
Chart 10

Consumer Price Inflation Rate in the
U.S. and Six Major Industrial Countries
PERCENT-^
ANNUAL RATES

20

10

UNITED STATES

i
1973

1974

1975

1976

1977

1978

^PERCENT CHANGE FROM PRECEDING QUARTER AT ANNUAL RATE.
i/JAPAN, GERMANY, FRANCE, UNITED KINGDOM, CANADA, AND ITALY. DATA BASED ON
1977 GNP/GDP WEIGHTS AND EXCHANGE RATES.
SOURCES: DEPARTMENT OF LABOR AND NATIONAL SOURCES.




138

TABLE 31.—Annual growth in real GNP in the United States and other major
industrial countries, 1960-79
[Percent change]
Country

1975
CO
CO

1979 2

4.9

5.4

19781
3.9

3.3

3.3

5.7

5.8

3

1977

1976

3.6

United States
Big Six

1960-74
average

3.8

3.9

1 Preliminary.
2 Forecast.
3 Japan, Germany, France, United Kingdom, Canada, and Italy; OECD estimates. For 1960-74 average, based on 1970
GNP/GDP weights and exchange rates; for 1975-79 based on 1977 GNP/GDP weights and exchange rates.
Sources: Organization for Economic Cooperation and Development and Council of Economic Advisers.

Inflation rate differentials are also expected to narrow somewhat during
1979, in line with the anticipated slowing of inflation in the United States
and a possible increase in inflation in some foreign countries. Trade and
current account imbalances are expected to diminish further as a result of
the shift in relative growth and of the large exchange rate movements
during 1978.
GROWTH AND INFLATION
In the major foreign countries there was a modest rise in the growth of
gross national product (GNP) in 1978. Table 32 records the growth rates of
GNP during 1977 and 1978 for each of the major foreign countries and the
United States. Also included are two columns showing the average annual
growth of GNP prior to 1974 as well as the average rate of growth since then.
TABLE 32.—Annual growth in real GNP in major industrial countries, 1960-78
[Percent change, except as noted]
Country
United States....
Japan
Germany
France
United Kingdom_
Canada
Italy

1977

19781
4.9
5.2
2.6
3.0
1.6
2.7
1.7

3.9
5.8
3.0
3.0
3.0
3.5
2.0

1960-73
average

3.9
10.5
4.8
5.7
3.2
5.4
5.2

1974-78
average'
2.3
3.7
1.7
2.8
1.0
3.4
1.9

GNP
shortfall in 1978
(percent) 2
8.1
37.3
16.0
14.7
11.5
10.2
17.1

* Preliminary.
2 Difference between actual GNP and the level that would have been reached if growth since 1973 had equaled its
1960-73 trend rate, expressed as a percent of actual GNP.
Sources: Organization for Economic Cooperation and Development and Council of Economic Advisers.

The final column shows the percentage difference between the actual
GNP in 1978 and the level of GNP that would have existed in 1978 if growth
had proceeded after 1973 at its 1960-73 trend rate. The gap recorded in the
last column is not meant to indicate the precise difference between actual
and potential output. Few deny that potential output growth has slowed
everywhere in recent years, and in some cases sharply, although considerable
uncertainty remains about the current underlying trend for potential output.
What the gap does indicate is that, for whatever reasons, the major indus-




139

trial countries outside the United States have witnessed a dramatic reduction
in growth since the oil crisis.
Evidence that at least part of the slower growth is due to a slowdown in
potential growth is shown in Table 33. Each of the large industrial countries has shown significantly lower productivity growth in the last 5 years
compared to the earlier period. Clearly, part of the poor productivity performance is due to low utilization rates. Even after correcting for utilization
TABLE 33.—Annual growth in GNP per employed worker in major industrial
countries, 1964-78
(Percent change)
Average
Country
1964-73
United States
Japan..
Germany
France
United Kingdom. __
Canada
Italy

1.8
8.9
4.7
4.5
3.2
2.4

__

5.4

1974-78

ni

3,?

3 n
3 n
.8
6

1.1

i Estimate.
Source: Organization for Economic Cooperation and Development.

and recognizing analytical shortcomings in the productivity measure, however, some slowdown is evident. The largest absolute decrease occurred in
Japan, where growth in GNP per worker slowed from 8.9 to 3.4 percent
annually.
Whatever the new rates of potential growth may be, the actual GNP
growth outside the United States was apparently not above the underlying
potential growth in 1977 and 1978. In the fifth year after the onset of recession, recovery toward a fuller utilization of potential among countries outside
the United States continues to be extremely hesitant and incomplete.
To some extent the slowing of potential growth and the weakness of
actual growth relative to potential since 1975 are tied together. In Japan,
for instance, the sharp fall in potential growth reduced capital requirements
and hence reduced required investment as a share of output. Because this
fall was not matched by a decline in the personal saving rate, a problem of
excess saving emerged. This imbalance was absorbed partly by the rise in
the external surpluses and government budget deficits and partly by the
decline in income and production relative to potential output. In Japan, as
in other countries, low rates of actual investment constitute a major reason
for the hesitant recovery of demand. At the same time, as mentioned
earlier, sluggish investment has led to a marked aging in the capital stock
and has further checked the growth of potential output by limiting productivity increases.
The principal factors constraining more expansionary policies during the
current recovery have been persistently high rates of inflation in most countries and the resulting judgment that relatively cautious fiscal and monetary




140

policies were needed. Even in those countries making notable progress in
reducing inflation by 1977—particularly Germany and Japan—fear of renewing inflation continued to dampen enthusiasm for more expansionary
fiscal and monetary policies.
In 1978 constraints on policies eased somewhat outside the United States
as rates of inflation declined almost everywhere (Table 34). For the United
Kingdom and Italy, where the rates had been highest, the decline was impressive. As a result of relaxed constraint, fiscal policies also tended to
TABLE 34.—Changes in consumer prices in major industrial countries, 1976-78
[Percent i]
Country
United States....
Japan
Germany
France
United Kingdom.
Canada
Italy

19782

1977

1976
5.8
9.3
4.6
9.6
16.6
7.5
16.8

6.5
8.0
3.9
9.5
15.8
8.0
17.0

7.6
3.9
2.7
9.2
8.3
9.0
12.2

1
Changes measured from year average to year average.
»Estimate.
Sources: Department of Labor, Board of Governors of the Federal Reserve System, and Council of Economic Advisers.

become significantly more expansionary in the major foreign countries:
according to OECD estimates, the direct impact of fiscal policy shifts in
1978 amounted to over one-half of 1 percent of GNP for the major foreign countries, excluding Japan, and to over 2 percent for Japan.
The 1978 pattern of changes in growth and inflation rates was heavily influenced by the marked decline of the dollar and the consequent appreciation
of most other major currencies. In countries where exchange rates appreciated, it is broadly true that GNP growth lagged behind the growth of domestic demand and that inflation rates declined. In this environment fiscal
policy became more expansionary during the course of the year. These shifts
in fiscal policy were both necessary and appropriate. They were necessary
because extra stimulus was required to offset the negative effect on GNP of
the adverse shift in real net exports. And they were appropriate because the
reduction in inflation due to currency appreciation gave policy makers
breathing room to shift toward more expansionary policies. Moreover in
Germany, and even more in Japan, a reduction in the current account
surplus required a shift in policy to make sure that shifts in export and
import volume would eventually become large enough to offset the effects
of the currency appreciation on terms of trade.
For the United States the opposite set of circumstances prevailed. A weak
external sector, accelerating inflation, rapidly declining unemployment, and
a depreciating currency made it necessary to shift toward a more restrictive
fiscal and monetary policy. Indeed, this shift occurred during the year.
The need to realign and coordinate economic policies, both in the United
States and abroad, so as to promote external adjustment and reduce diver-

141
278-216 O - 79 - 10




gences in economic performance across countries was increasingly recognized
during 1978. In the course of meetings that culminated in the Economic
Summit at Bonn in July 1978, a significant degree of coordination was
realized. At the Bonn meeting the leaders of the seven largest industrial
countries discussed the major goals and problems in the world economy, and
a Concerted Action Program was devised in which each country made
appropriate specific commitments.
The Bonn Summit marked a turning point, particularly for the United
States. The United States noted that curbing inflation has become the top
priority of economic policy. The President therefore pledged to take specified
actions to reduce the U.S. inflation rate, obtain a more rapid reduction in
our current account deficit, and adopt an energy policy which would, by
1985, cut our imports of petroleum by 2.5 million barrels per day.
In addition, Germany and Japan proposed steps to increase growth and
thus reduce external surpluses: Germany to provide additional fiscal stimulus totaling 1 percent of GNP; Japan to achieve a 7 percent growth in real
GNP between March 1978 and March 1979. The other participating countries (France, Italy, the United Kingdom, and Canada), whose high rates of
inflation provided less scope for specific action, made broadly complementary
commitments. At the same time, each country recognized the overriding
importance of not allowing sluggish growth, sectoral difficulties, or trade
imbalances to serve as pretexts for actions that would undermine the framework of free trade among nations. A joint commitment, covered more fully
later in this chapter, was adopted to secure a rapid and successful outcome
for the Multilateral Trade Negotiations.
Considerable progress has been made in meeting these commitments. As
discussed earlier in this Report, the United States has in place a major
anti-inflation program and has shifted both fiscal and monetary policies
toward restraint. The 1978 National Energy Act, signed at year's end,
establishes a comprehensive framework for rationalizing energy policy and
reducing oil imports along the lines discussed at Bonn. Germany completed
legislation in December 1978 that fully implements its own commitment.
Although Japan began in September to carry out a supplementary fiscal
program to stimulate growth, it now seems likely to fall well below the 7
percent growth target.
The Concerted Action Program adopted at Bonn marks an important
step in international economic cooperation. On a substantive plane, the
measures taken helped put the major economies onto more balanced and
sustainable paths. More important is the symbolic significance: it is now
clearly recognized at home and abroad that, in a world where countries
are interdependent, policy choices by one nation directly affect economic
performance in others. If some countries grow very slowly, their trading
partners will be forced to abandon dynamic export industries; if one
country attempts to protect its industries, at the border or by domestic




142

subsidies, others will have to retrench; if one nation pursues extremely
rapid growth or inflationary policies, the resulting exchange rate depreciation may lead to uncertainties and market disorders. Increasing awareness
of these linkages and acceptance of the responsibilities they imply represent
the goal of policy coordination exemplified by the Summit.
PROSPECTS
Although the shift toward more rapid growth abroad is a welcome development, the world economy continues to face difficult challenges. GNP
growth, while expected to maintain the 1978 rates, will remain low by the
standards of the 1960s, and it will be hard to generate enough jobs to
redyce unemployment. In some countries more extensive use of specific job
programs and special incentives to reduce structural unemployment of young
workers must effectively supplement demand management policies if further
increases in unemployment are to be avoided.
Most economies also face excess capacity in basic industries such as steel,
textiles, and shipbuilding. The consolidation of these sectors by reducing
capacity, and the resulting loss of jobs, aggravate labor market problems.
Ways must therefore be found to smooth the transfer of workers from declining to expanding sectors. Securing a more rapid rate of job creation is made
harder by continued low rates of investment in plant and equipment. While
some growth in investment occurred in 1978, the basic circumstances have
not changed substantially. Excess capacity remains large and prospects indicate only a moderate growth in demand. In this environment a sharp acceleration of investment during 1979 is not foreseen.
While faster growth would greatly benefit most foreign economies, inflation rates in all but a few OEGD countries remain too high for governments
to pursue policies that are significantly more expansionary. Even relatively
restrictive macroeconomic policies will bring only a gradual decline in inflation. In some countries inflation may accelerate again as the favorable
effects of exchange rate appreciation and commodity price declines wear
off.
Thus, despite some easing of constraints on policy in countries outside the
United States, the economic environment presents difficulties. Few easy solutions are available; and according to an increasing number of observers, it
will take a continued effort to bring about conditions more favorable to
sustained economic growth.
CURRENT ACCOUNT DEVELOPMENTS AND PROSPECTS
In 1978 there were marked changes in global payments positions (Table
35). First, the large current account surplus of the countries making up the
Organization of Petroleum Exporting Countries (OPEC) diminished sharply
and unexpectedly from about $32 billion in 1977 to an estimated $11 billion
in 1978.




143

TABLE 35.—World current account balance,11975-78
[Billions of dollars]
Country

1975

1978 2

0.3

-19.0

-27.5

0.5

18.4
-3.8
-14.3

4.3
-3.7
-19.4

-15.3
13.5
-25.7

-17.0
33.5
-16.0

OECD countries
United States
Big Six 3 and Switzerland
OtherOECD
OPEC countries
Non-oil developing countries

1977

1976

27.3

37.0

31.5

11.0

-38.5

-26.0

-24.0

-34.0

10.9

8.0

20.0

22.5

... ..
... .

Other *

1 OECD basis.
2 Estimate.
3 Japan, Germany, France, United Kingdom, Canada, and Italy.
4
Reflects errors and asymmetries, as well as balances with omitted country groups.
Sources: Organization for Economic Cooperation and Development and Council of Economic Advisers.

This remarkable decline resulted from volume and price effects in about
equal measure. The volume of OPEC oil exports actually fell somewhat in
1978; a consequence of the slackened pace of growth in energy demand in
the industrial countries and the rapid 1978 expansion of other sources of
oil. North Sea, Alaskan, and increased Mexican production, accounted
together for a rise in production of 1.2 million barrels per day, or roughly
4 percent of total OPEC production.
At the same time, the volume of imports into OPEC countries continued
to grow at a significant though slowing rate, a result of the momentum of ongoing development plans in a number of OPEC countries. Price movements have also been important in reducing the OPEC surplus. The dollar
price of oil remained roughly constant, while import prices rose.
Second, in the so-called non-oil developing countries (that is, the poorer
countries outside of OPEC and the OECD) the combined deficit expanded
considerably last year. The terms of trade, which had been generally favorable in 1977, turned against such countries in late 1977 and early 1978.
Late last year, however, the terms of trade again strengthened appreciably. Borrowing conditions for most of these developing countries remained
favorable, and many of them borrowed substantial amounts to service outstanding debt, maintain the growth of their imports, and increase their gross
reserves for the third consecutive year.
The most striking change in 1978, however, was the disappearance of the
OECD deficit. The aggregate deficit of the OECD countries, $28 billion in
1977, gave way to a small surplus in 1978. This turnaround was the second
largest recorded year-to-year change in the OECD external position; it was
exceeded only by the large shift from surplus to deficit which followed the
OPEC price rise. It was surprising that the decline passed virtually unnoticed and had little effect on developments during the year compared to
those occurring in the 1974-75 period.
The OECD can be usefully divided into three groups. The first comprises
countries in surplus; the second contains small countries, chiefly in deficit;




144

and the United States is the third. Starting with the surplus countries, one
should note that the largest part of the decline in the OECD deficit is accounted for by the rise in the combined surpluses of Japan, Germany, France,
Italy, and Switzerland. These countries, along with the United Kingdom,
experienced strong gains in their terms of trade—that is, the prices received
for exports rose more rapidly than prices paid for imports, principally because of appreciation in their exchange rates.
A gain in the terms of trade affects the favored country in two ways. First,
it increases income and thus tends to have a stimulating effect on aggregate
demand similar to that of a tax cut. Second, after some time, however, the
higher export prices tend to depress the volume of exports, while the lower
import prices tend to raise the volume of imports, thereby reducing aggregate demand. Table 36 records the movement in current account balances
for each of the countries named above, except Switzerland, and shows the
relative size of the two different effects in 1978: the ratio between the gain
in terms of trade and domestic demand, and the ratio between the change
in the volume of net exports and GNP.
TABLE 36.—Current account balances for selected major industrial countries, 1976-78
Current account balance *
Country
1976

1977

1978 2

Billions of dollars

Japan
Germany
France
United Kingdom.
Italy

3.7
3.8
-6.1
-2.0
-2.8

10.9
3.7
-3.3
.5
2.3

Gain in terms
of trade as
percent of
domestic
demand,
1978 2 3

Change in
volume of net
exports as
percent of
real GNP,
1978 2

Percent
20.0
6.0
2.0
-.5
5.5

1.9
.6
.8
1.2
.4

-0.3
2
.3
-1.0

1 OECD basis.
2 Estimate.
3 The gain in terms of trade is the percent change in export prices times 1977 export value minus the percent change
in import prices times 1977 import value.
Sources: Organization for Economic Cooperation and Development and Council of Economic Advisers.

Even though estimation of gains in terms of trade is subject to a considerable margin of error because of serious measurement difficulties, the results
are striking. These five countries experienced very large gains in income from
the terms of trade in 1978 and, excepting the United Kingdom, had little
or no offset from the declining volume of net exports. The income gains, however, do not appear to have been matched by a corresponding rise in the
growth of real output, especially when allowance is also made for the expansionary shifts in fiscal policy. A possible explanation for this relatively weak
multiplier effect is that, because these income gains were perceived to be
transitory, they were largely absorbed in increased household and corporate
saving, rather than in increased expenditures.
The second group of OECD countries, comprising the smaller nations,
in the aggregate reduced their deficits in 1978 by about $10 billion. This




145

reduction was especially welcome in view of the very large deficits these
countries had run from 1974 to 1978, when their net indebtedness grew
by close to $80 billion. Indeed, external positions had become unsustainable
for a number of countries in this group and severe retrenchment was necessary. Stabilization programs were developed in connection with upper credittranche drawings from the International Monetary Fund for Portugal and
Turkey. Governments in the Scandinavian countries acted to forestall further accumulation of debt that might well have become a source of difficulty in a few years. For still others, the extent of improvement in their
current account was limited by adverse shifts in the terms of trade stemming
from the fall in a number of raw materials prices. For the group as a whole,
the decline in current account deficits can be explained almost entirely
by the reduction in import volumes relative to export volumes.
The United States stands alone in the third category. Throughout the
postwar period the growth of U.S. imports tended to be greater in relation to
domestic growth than the growth of exports in relation to growth abroad.
Until 1975 a rough balance between import and export growth was maintained by the fact that growth abroad tended to exceed U.S. growth. From
1975 through 1978, however, growth in the United States surpassed the average growth abroad. As a result, the current account of the United States
shifted sharply. In 1977, a year in which U.S. economic growth exceeded
that of its trading partners by about V/2 percentage points, the U.S. current
account shifted by almost $20 billion, from a surplus of $4.3 billion to a
deficit of $15.3 billion. Roughly three-fourths of this shift is accounted for by
the more rapid growth of merchandise import volumes compared to export
volumes. The remainder of this shift reflected changes in the terms of trade
and in the composition of trade, only partly offset by gains in service transactions.
On the basis of preliminary estimates the current account shifted toward
deficit in 1978 by a further $1.7 billion. There was, however, substantial
improvement from the first half of the year to the second, when growth
in export volume picked up and import growth began to moderate. Despite
the depreciation of the dollar during this period, the expected adverse shift
in the terms of trade was restrained to a significant degree by the constancy
of the price of oil imports'and by the general increase in the prices of manufactured goods relative to the prices of primary commodities.
The shifts that occurred in 1978 in current account positions among
the countries of OPEC, the non-oil developing countries, and the OECD
countries are not likely to be reversed in 1979. The large oil price increase
announced by OPEC last December will seriously complicate the task of
economic management in the industrial and non-oil developing countries.
This price increase is not expected to result in a substantial widening of
the OPEC surplus from 1978 levels, however, since imports by OPEC will
also continue to rise. It can be said that the industrial countries are now paying the "OPEC oil tax" largely in current goods and services rather than




146

I O Us. As a result, the so-called recycling problem has become much less
troublesome—though the surpluses of a few individual OPEC countries will
continue for years to come. More generally, the traditional pattern of resource flows between countries, in which the major industrial countries are
net capital exporters to the developing countries and to other poorer countries within the OEGD, appears to have been firmly reestablished.
Barring a substantial run-up in commodity prices, the deficits of the nonoil developing countries are likely to rise somewhat in 1979. Such a rise in
deficits would appear to be consistent with the strong liquidity positions of
many countries in this group, the ability of a growing number of countries to
borrow successfully on international financial markets at lower interest
spreads and longer maturities, and the apparent willingness of banks to
increase their lending to developing countries despite a few isolated debt
rescheduling problems during 1978.
Among industrial countries of the OEGD, a more balanced distribution
of surpluses and deficits is likely to emerge in 1979. The U.S. current account
deficit is expected to decline considerably from the levels at the end of 1978,
dropping to about an annual rate of $2-$8 billion by the end of 1979. This
reduction will result from two conditions: first, the effects of slower U.S.
economic growth on imports; and second, a steady and vigorous growth in
exports as markets continue to adjust to the improved price competitiveness of American goods and services that resulted from last year's depreciation of the dollar.
Some decline, too, is anticipated in the surpluses of Japan and Germany.
Expectations for the decline of the Japanese surplus are grounded primarily
in the anticipation of a further fall in the volume of Japanese exports. Import volumes rose only moderately in 1978 after allowance for large accounting transactions made under the emergency import program. They are unlikely to accelerate strongly this year, despite the appreciation of the yen,
because of the relatively closed structure of many Japanese import markets.
This one-sidedness in adjustment by Japan is likely to intensify the difficulty
of reducing the Japanese surplus to a sustainable level over a longer period.
The need for a sustained reduction of barriers in Japanese import markets is
well recognized by Japanese officials, and extensive discussion between
Japan and the United States during 1978 has laid the groundwork for
progress toward this end.
INTERNATIONAL FINANCIAL DEVELOPMENTS
For the international financial markets 1978 was a year of unusual instability. Serious questions were raised at home and abroad about the functioning of foreign exchange markets, culminating at year-end with the
charter of the new European Monetary System and with the dollar support
measures of the United States. These developments were responses to increased volatility and to disorderly conditions in the foreign exchange mar-




147

kets. In the case of the European Monetary System they arose also from
concern about the undesirable side effects of a system of floating exchange
rates for closely integrated economies and from the need to foster closer
economic integration in Europe.
THE OPERATION OF FLEXIBLE EXCHANGE RATES
The developments of 1978 must be seen as a part of the continued evolution of international financial arrangements. It is therefore appropriate to
begin this discussion by reviewing the role of floating exchange rates in
macroeconomic adjustment over the 1973-78 period.
Floating Rates in Principle
The role of floating exchange rates can best be seen in the need for adjustment among national economies. All countries are continually subjected to
shocks that lead both to internal imbalances (excessive or deficient utilization of domestic resources) and to external imbalances (foreign trade or
capital flows at unsustainable levels). A system of flexible, market-determined exchange rates (or, in short, "floating" rates) allows more automatic
external adjustment than a system of fixed parities, and thus leaves more
scope for domestic macroeconomic policies to adapt to the changing requirements for internal balance.
External adjustment occurs as exchange rates move to equilibrate trade
and net capital flows. More precisely, for a given change in official holdings,
the rate will move to a level that either brings the value of goods and services exported and imported into balance or induces changes in private asset
holdings to finance the discrepancy.
The equilibrating mechanism works on both the capital and current accounts. For a country incurring a large current account deficit, the currency
depreciates to reduce the current account deficit by increasing the country's
price competitiveness. That process, however, takes time. In the interim,
currency movements will induce private holders of wealth to accumulate
the country's assets to the extent necessary to finance the deficit.
The second feature of an idealized system of floating exchange rates can
be seen as a consequence of the first. Because floating rates tend to assure
external equilibrium, countries can enjoy greater independence of macroeconomic policies and performance. Under a regime of fixed exchange rates,
the extent to which a country's macroeconomic policies could diverge from
those of its trading partners was limited in important ways. Divergent
policies would lead to trade imbalances, with expansionary countries moving
toward deficit and restrictive countries toward surplus. There was no automatic mechanism to generate the needed capital movements to support the
imbalances. Indeed, outflows of capital from countries pursuing relatively
expansionary policies to countries pursuing restrictive policies sometimes
exacerbated disequilibria in overall balance of payments positions. A coun-




148

try's freedom to engage in independent macroeconomic policies was thus
constrained by its capacity to absorb or lose reserves.
Under a floating rate regime, however, wide divergences of macroeconomic policies would, in principle, be possible. For those countries
pursuing rapid growth through expansionary macroeconomic policies or
those accepting high inflation, the presence of a depreciating currency would
allow the balance of payments to remain close to equilibrium.
Critiques of Floating Rates
For more than 5 years the major economies have functioned under a
floating rate regime. The new regime has been successful in permitting the
industrial economies to absorb shocks that were unprecedented in the postwar period. At the same time, overall economic performance and exchange
market behavior have been much less satisfactory than was expected, leading
many to wonder whether the exchange rate regime was at least partly
responsible for the poor performance.
Critics have argued that floating rates have had four failings: they have
not eliminated balance of payments disequilibria; they have not allowed
the degree of policy independence that had been anticipated; they have
proved inflationary; and they have introduced major new elements of
instability and uncertainty to financial markets.
First, floating rates clearly have not eliminated current account surpluses
and deficits. These deficits and surpluses have not, in general, fallen from
the levels of the late 1960s and early 1970s and, on many occasions, some
have been even higher.
Such an observation, however, does not imply a failure of floating rates
to perform their adjustment function. The imbalances that have occurred
have not usually resulted from floating per se, but from the greater divergence
of macroeconomic performances and from the exceptionally large shocks to
the international system, such as OPEC price rises and large increases in
agricultural and commodity prices. Exchange rate changes have generally
responded well to these deficits and surpluses and have helped to move
economies back toward external equilibrium, even if not as quickly or as
smoothly as originally hoped. A balance of payments equilibrium, moreover, does not necessarily require that the current (or trade) account should
be balanced, only that the current or trade account deficit or surplus be
willingly financed. In fact, deficits or surpluses on current account may well
represent the equilibrating counterpart to structural or "autonomous"
capital inflows or outflows.
In contrast, during the final years of the Bretton Woods system, balance
of payments disequilibria that resulted at least partly from divergent macroeconomic performances led to several serious and protracted balance of
payments crises. Normal trade and investment patterns were disrupted as
governments responded to these disequilibrium situations by imposing trade




149

and capital controls and other emergency measures before they were finally
forced to change their exchange rate parities.
A second cause of concern exists because floating has led to less policy
independence than had been anticipated. To be sure, countries have been
significantly more independent than in prior years, especially in the realm
of monetary policies. A good example lies in the ability of Germany, during
the early phase of the current expansion, to pursue a relatively restrictive
monetary policy, while that of the United States was relatively expansionary.
Although independence has been greater than with fixed rates, it
has by no means been complete under floating. There have been obvious
limitations to policy flexibility, partly because exchange rate changes cannot
insulate national economies from their partners' performance or from international economic shocks. We have learned that in an increasingly interdependent international economic system floating exchange rates do not free
countries from the effects of their neighbors' economic policies and performances. Similarly, countries must recognize their responsibility to act in
ways that do not inflict excessive adjustment costs on others.
The third major criticism of the floating rate system has been that it
contains an inflationary bias. Two lines of argument have been presented
to support this view: first, that floating generates inflation because it fails
to impose needed discipline on the conduct of fiscal and monetary policies;
second, that because of asymmetries and ratchets the increased inflationary
pressures associated with depreciation are not matched by commensurate
downward price pressures in countries whose exchange rates are appreciating. Thus, it is argued, the net effect of exchange rate changes is inflationary
for the world as a whole.
Neither of these arguments is entirely convincing. Regarding the first
argument—presumed lack of discipline—it is important to note that even
without external pressures there are clearly powerful internal forces which
oppose inflation. Recent experience in the United States and some countries
of Europe, where large current account deficits and currency depreciations
have led to quite restrictive economic policies, indicates the extent to which
difficult stabilization policies will be undertaken even in a flexible exchange
rate system.
Moreover, a regime of fixed rates allows inflation to spill over the borders.
Price rises originating in one country spill over into other countries directly
if exchange rates cannot shift. Indeed, to the extent that inflation originating in one country is shared by others when exchange rates are fixed, discipline in the conduct of fiscal and monetary policies may be weaker than
under floating rates, where the full inflationary impact of inappropriate policies is felt domestically.
The evidence to support the second argument—that there are asymmetries in the effects of exchange rate changes on inflation—is mixed. While
it is true that there exists considerable evidence of increasing downward
rigidity in the levels of prices and wages in a number of countries, there is




150

no comparable evidence that rates of inflation are less responsive to currency
appreciation than to depreciation.
Finally, factors other than floating exchange rates provide a more compelling explanation for the high and persistent inflation in the industrial
countries: slower productivity growth, excessive demand pressures, external
shocks such as those created by OPEC, and structural changes and rigidities
in domestic labor and product markets.
A final criticism of floating has been that it induces excessive volatility
in exchange rate movements. Chart 11 presents the path of the tradeweighted dollar since 1970, using an index of dollar movements against the
10 major currencies, and 1972-76 total multilateral trade shares as weights.
In addition to these longer-run swings in rates, it is certainly true that dayto-day movements in exchange rates have been larger in the float than in the
preceding Bretton Woods era. It is difficult to determine whether these
movements have been excessive. In a fixed rate system such as
Bretton Woods, day-to-day variability is sharply reduced by the active
intervention of central banks to keep the rate within a narrow range. Furthermore, for as long as the range remains credible, private actions tend to
keep the rate within the range whenever transient factors lead to a rate
movement to the upper or lower limit. Day-to-day variability is thus largely
eliminated. On the other hand, the fixing of exchange rates while economic
conditions are changing makes it likely that exchange rates will increasingly
Chart 11

Weighted-Average Exchange Value
of the U.S. Dollar
INDEX. MARCH 1973=100

90

80

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 111 1 111 1 1 1
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1111 1 1
1 1 111
1

1970

1971

1972

1973

1974

1975

1976

SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.




151

1977

1978

diverge from levels that would be consistent with underlying economic
factors. Eventually the credibility of the range is challenged by market participants, and potentially disruptive speculative attacks can then occur until
rates are forced to new, more appropriate levels.
In a floating rate system, day-to-day variability of exchange rates is inevitable as market participants respond to new information about economic
developments that alters their perceptions about appropriate exchange
rate patterns. Indeed, these day-to-day movements in principle constitute
the means of accomplishing longer-run adjustment of exchange rates to
changing economic circumstances. This fundamental role of exchange rate
movements raises the question whether the observed short-run variability of
exchange rates has been larger than was required to allow the necessary
medium-term flexibility. This question is complex and has not been thoroughly addressed. A preliminary examination of recent experience and
related studies by the Council of Economic Advisers has uncovered mixed
evidence. In some cases, short-run variability over the last 5 years has been
broadly commensurate with longer-run changes, while in other cases shortrun changes have been less than might be consistent with the longer run. No
cases of persistent, excessive volatility were found.
There is a sense in which the floating rate system itself may have led to
excessive volatility—through the relaxed constraints on macroeconomic
behavior. As noted above, a floating rate system allows greater divergence
in macroeconomic experience. Unfortunately, when greater scope for
divergent policies and performance is allowed, market uncertainty about
appropriate exchange rates is also increased. The uncertainty, in turn, can
cause market exchange rates to move in an erratic and disorderly fashion
as market participants react, and overreact, to transitory bits of information
and rumors.
Greater exchange rate noise and uncertainty are among the costs of a
floating rate system. Achievement of greater stability in exchange rate
markets is dependent on the closer and more effective coordination of macroeconomic policies among countries and on the continuing efforts of each
country to sustain macroeconomic policies that are consistent with internal
and external adjustment.
In general, however, the evidence, although not conclusive, does indicate that floating has worked well over the long run, especially considering the magnitude of the shocks to the international financial system. In
fact, given these shocks, it is not clear that any system other than generalized
floating would have been viable during the period. Exchange rate movements, while large, have broadly responded to economic fundamentals,
have facilitated adjustment, and have tended to move the system toward
rather than away from greater stability. If exchange rates are at present too
volatile for some countries, steps to increase the coordination of macro-




152

economic policies could be helpful. Recognition of the current level of
interdependence through improved coordination across countries may help
to bring greater stability to the foreign exchange markets as well as to provide an international environment that is favorable to domestic policy goals.
IMPORTANT 1978 DEVELOPMENTS
The summer and fall of 1977 marked the beginning of a protracted fall
in the value of the dollar and an increase in the day-to-day volatility of
exchange rates in general. Both of these trends continued through the first
3 quarters of 1978.
The Variability of Exchange Rates and Depreciation of the Dollar
The extent of exchange rate variability can be seen in the average day-today change of major currencies. In general the daily variation in exchange
rates decreased between 1973 and 1975, remained comparatively small from
1975 to about the middle of 1977, and then increased markedly in the second half of 1977 and in 1978 (Chart 12).
The decline in variability from 1974 to the 1975-77 period is probably due
to a lessening of shocks to the world economy and the gradually growing
ability of market participants to work with a regime of floating rates. The
Chart 12

Monthly Average of Daily Exchange Rate Changes
PERCENT CHANGE

0

I i i i i 11 I~WI

1973

I'I i i i i i I 11 i 11 11 11 i i 1 11 i i i I i 11 11 1 i ) i i 11 i i i i i 11 i i i i I 11 i i i 1 i i i i i

1974

1975

1976

1977

SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.




153

1978

source of the sudden increase since late 1977 is less clear. Only to a small extent can it be explained by the fact that the computed variability is somewhat
amplified when the level of the exchange rate is moving sharply in one direction rather than fluctuating around a steady trend. A more plausible explanation was the heightened uncertainty about the dollar's future equilibrium
level in view of the growing current account deficit, a subsequent acceleration in inflation in the United States, and, for a time, uncertainty about the
response of U.S. economic policies to these developments.
The value of the dollar also began to change dramatically in late 1977.
Chart 11 shows the trade-weighted value of the dollar against the major
currencies for 1970-78. Two distinct periods can be identified during the
recent experience. From September 1977 through March 1978 the dollar
fell by 8.7 percent on a weighted average basis against other currencies.
During this period the markets tended to focus on the rapid widening of the
U.S. trade and current account deficits and their expected persistence. Even
though a substantial portion of the deficits could be accounted for by the
cyclical position of the United States relative to its major trading partners,
growth forecasts suggested that this cyclical divergence would not soon be
eliminated.
After a brief period of leveling off in April and May 1978, a second dollar
decline began in early June and carried through until the end of October.
Some part of this renewed decline can be accounted for by the acceleration
and persistence of inflation in the United States, which aroused much concern in international financial circles. From a purely technical point of view,
this is not a sufficient explanation, however, since the inflation rate in the
United States, while substantially higher than that in Germany, Switzerland,
and Japan, was not much higher than the average level among all our major
trading partners. And the parallel shift in interest rate differentials in favor
of the dollar was more than sufficient to offset the change in underlying inflation in the United States. Finally, the dollar's fall came in the face of
increasing evidence that the U.S. current account position was improving
markedly.
By the end of October, then, there was considerable evidence that the
primary reason for the dollar's fall was the uncertainty in foreign exchange
markets. Little attention was paid to the anti-inflation message on October 24. Market participants continued to shift out of dollars despite an apparent consensus of market expectations that the dollar was undervalued from a
long-run point of view. Almost all market participants commenting in the
press or in discussions during the fall of 1978 expected an eventual turnaround of the dollar. Only the timing and the duration of the expected
recovery were uncertain. Market participants, however, were highly uncertain about the future course of U.S. macroeconomic policy, and this uncertainty encouraged shifts out of dollars because it made the dollar a riskier,
and hence less attractive, asset.




154

THE NOVEMBER 1 INITIATIVE
On November 1 the Administration and the Federal Reserve implemented a strong dollar support program. Its basis was the judgment that,
whereas some of the earlier 1977-78 dollar decline had been necessary to
correct the external disequilibrium, the continued decline of the dollar had
become disorderly and was not justified by fundamental economic conditions. On the contrary, all the econometric evidence, the government forecasts, and the private forecasts indicated that the U.S. current account
deficit was likely to narrow sharply in 1979. Indeed, it had already fallen
from the levels reached in the first half of 1978.
The dollar depreciation from September 1977 through the summer of
1978, combined with U.S. economic policies recently put in place—the
National Energy Act, a new national export policy, the shift toward more
restrictive monetary and fiscal policies, and the other elements of the antiinflation program—was thought likely to be effective in slowing inflation
at home and bringing about a more appropriate external balance. Further
dollar depreciation, especially that induced not by fundamental economic
factors but by uncertainty about future exchange rates or policies, was
therefore unnecessary for adjustment and would have led to a misallocation of resources at home and abroad, possibly even to serious instability in
the financial system. Such movements would have added further to U.S.
inflationary pressures and thus harmed the prospects for the anti-inflation
program. They could also create the kind of instabilities in exchange markets that could threaten economic prospects in other countries.
In the light of these considerations, the United States announced a dollar
support package that contained two parts. First, the United States mobilized
$30 billion in resources as its share of a joint intervention program with Germany, Japan, and Switzerland. Second, the Federal Reserve tightened
domestic monetary policy by raising the discount rate from 8J/2 to 9^2 percent and by imposing a 2 percent supplementary reserve requirement on large
time deposits. The Federal funds rate also rose from 9% to 9% percent on
November 1.
The $30-billion intervention package comprised several different items:
(1) the Treasury's drawings on our International Monetary Fund reserve
position of $2 billion and $1 billion in Deutschemarks and yen respectively;
(2) the Treasury's sales of a total of $2 billion of special drawing rights to
Germany, Japan, and Switzerland; (3) a doubling of the Federal Reserve
swap lines with Germany, Japan, and Switzerland—to $6 billion, $5 billion,
and $4 billion respectively; and (4) the Treasury's commitment to issue
up to $10 billion in foreign currency denominated securities in foreign private
markets.
The markets responded favorably to the dollar support policy. By the end
of the first week of the program, the trade-weighted dollar was 7.7 percent
higher than it had been at its low point at the close of business on October
30. By November 30 it had risen an additional 2.4 percent; and, while some




155

declines occurred in December and early January—principally with the
news of the OPEC price increases and the instabilities in Iran—by the middle of January it was again roughly 7.7 percent above its October low. Thus
the foreign exchange markets at the beginning of 1979 were clearly in a different condition from what they were in the summer and fall of 1978. The
one-way speculation had largely ended, and economic fundamentals appeared to be much more important market factors than they had been 2 or
3 months before. Market participants, who had been primarily concerned
about preventing further foreign exchange losses and uncertain about the
specific timing of an expected dollar upturn, were now taking a more
healthy wait-and-see attitude about the future course of market fundamentals. The November 1 action, bolstered by the greater certainty that it
generated, appears to have achieved its basic purpose. In the period ahead
the value of the dollar should depend on sustained progress in the U.S.
trade and current accounts and on the success of the new anti-inflation program, rather than on the level of market uncertainty.
While the dollar's decline in the fall of 1978 was an instance of a malfunctioning of exchange markets, the overall history of exchange rates in
recent years does not suggest that such malfunctions are chronic. Rather,
they are temporary but acute symptoms that are most likely to develop when
general macroeconomic conditions are diverging, or in transition, thereby
generating greater uncertainty about future economic conditions and policies and an increased dispersion in expectations about future exchange rates.
Conversely, as general macroeconomic conditions and policy directions
become better established, exchange markets can be expected to perform
more smoothly their function of adjusting rate levels to such economic
divergences as remain between countries. Such a calming of exchange
markets may take time and may require considerable further efforts toward
coordinating macroeconomic policies across countries. Excessive market
sensitivity, built up during periods of disorderly movement, is likely to induce
continued higher than normal variability in rate movements until accumulated evidence of greater underlying stability becomes firmly established.
THE EUROPEAN MONETARY SYSTEM
The members of the European Economic Community reached agreement
on a new European Monetary System expected to be implemented in
1979. The development of this system is consistent with the Community's
continued efforts to work toward economic and political unification and with
its members' concern about the negative effects on economic activity and
investment of what they consider increasingly excessive and unnecessary
volatility in exchange rates.
In the short run this new agreement amounts to adding France, Ireland,
and Italy to the Snake arrangement of the Benelux nations, Denmark, and
West Germany, with Norway dropping out. There will be expanded credit
arrangements and increased margins around parity changes (up to 6 percent




156

for new members) as well as greater flexibility for parity changes. The
United Kingdom, which initially will participate in only part of the system,
may become a full member later in 1979. The European Monetary System
is considered by many participants to be an important step toward a fullfledged monetary union of the European Community countries, with fixed
exchange rates, a European Currency Unit for use as a numeraire as well as
for intra-Community central bank settlements, and a European Monetary
Fund with comprehensive credit facilities.
In the early part of its existence, any system of fixed exchange rates must
concern itself with the establishment of consistent rate patterns and adjustment mechanisms. Otherwise, whenever rate patterns or fundamental
economic conditions appear unsustainable, market participants are likely
to test the weakest and strongest currencies. Judging from past efforts, governments can sometimes forestall such attacks by judiciously adjusting central rates when economic conditions warrant such action. The adjustment of
central rates, however, cannot be too frequent, for then future changes
would tend to become anticipated by the market, and the self-stabilizing
property of the system—which is its major benefit—would be dissipated.
On the other hand, if rate adjustments become too infrequent, fundamental disequilibria will become so large as to attract massive, and successful, speculative attacks.
To maintain a fixed-margin arrangement, therefore, it is necessary to
forestall situations in which central rates cease to be credible and to do this
by working actively toward convergence of macroeconomic conditions and
policies. For the countries of the European Monetary System, this necessity
is clearly recognized. Indeed, to some extent the European Monetary System
was regarded as an instrument for achieving precisely this sort of convergence. Its success will depend in the shorter run on its flexibility, the viability
of its credit arrangements, and the eventual full-time membership of all
Community members, and in the longer run on the convergence of member
countries' macroeconomic policies and economic conditions.
THE CHANGING ENVIRONMENT OF WORLD TRADE
Until recently, the postwar period has been one of very high growth of
national economies and improved living standards. One of the major sources
of this vitality has been the progressive dismantling of trade barriers. Each of
the three major industrial regions (North America, Europe, and Japan) has
experienced increased trade flows. This increase is due in large part to the
vision of those who built the Common Market, progressively opened up the
Japanese economy, and sustained the Kennedy Round of multilateral tariff
reductions.
During the last decade, however, movement toward increased competition in international markets has flagged. Indeed since 1974 there has been
some regression in trade policies. In response, the United States, along with
governments of other major industrial countries, has committed itself to pro-

157
278-216 O - 79 - 11




moting free trade and reducing protectionist pressures around the world.
The aims of U.S. trade policy are to enable the United States and other
economies to benefit from the most efficient allocation of worldwide resources and to channel U.S. resources into sectors of comparative advantage.
In 1978 the major activities of U.S. policy makers in this area involved the
Multilateral Trade Negotiations in Geneva, the determination of domestic
trade policy, and the development of the President's National Export Policy.
In recent years the growing economic interdependence in the international
community, along with an increasing incidence of shocks and resulting adjustment policies, has led to an increasing number of trade problems around
the world and consequently to more cases of overt or indirect protection and
reaction. These trade problems and increasing protectionist pressures have
several causes: the emergence of newly industrialized nations who are competing to gain an increasing proportion of the export market for industrial
goods; the development of long-term structural problems in several sectors,
resulting from shifts in the pattern of world consumption and production;
the appearance of significant current account deficits after the oil price increase in 1973; greater skepticism about the functioning of the international
trading system; and, above all, the recession, stagnant domestic markets, and
associated high levels of unemployment since 1974. Accordingly, individual
nations have taken several measures—including safeguard actions (protecting domestic industry against injury from imports), antidumping proceedings, and actions to offset export subsidies. These policies have been concentrated in certain industrial sectors, particularly textiles, automobiles, steel,
and shipbuilding.
THE MULTILATERAL TRADE NEGOTIATIONS
The Administration, in conjunction with its major trading partners and
numerous developing nations, is committed to resolving these trade problems
through the Tokyo Round of the Multilateral Trade Negotiations. The goals
of these multilateral negotiations have been to relax tariff and nontariff
barriers to trade, to formulate rules for trade and codes of fair conduct, to
develop effective mechanisms for settling disputes, and to allow nations to
benefit from specialization without unduly losing control over the growth
patterns of their own economies.
By the end of 1978 these goals seemed close to achievement when significant agreement was reached on the reduction of most of the tariff and
nontariff barriers to trade. The trade package (still subject to final agreement in early 1979 and to legislative approval later in the year) includes
codes on subsidies, government procurement, standards, customs valuation,
and licensing. It also includes a package of tariff cuts by the United States,
with reciprocal cuts from our trading partners. The U.S. cuts are projected
to average about 30 percent. In addition, negotiators agreed to remove several particularly burdensome industrial and agricultural nontariff barriers.
And finally, the trade package provides measures to improve the General




158

Agreement on Tariffs and Trade (GATT) framework for dealing with agricultural trade issues, trade with developing countries, balance of payments
measures, export restrictions, and the general management of trade disputes.
Among the most significant areas of agreement for U.S. trade interests
are the codes on safeguards, on subsidies and countervailing duties, and on
government procurement. The safeguards code ensures that countries will
observe international trading rules as set forth in the revised GATT Article
XIX when they restrict imports of particular products in order to afford
temporary relief to domestic producers from injurious foreign competition.
This revised article provides for a broad coverage of trade policies, improved
criteria and conditions for taking safeguard action, more openness and due
process in domestic safeguard procedures, and better international surveillance. There is also likely to be some scope for selective action when an
injury can be ascribed to imports from particular countries. Such selectivity
would be subject to consultation and negotiation with the affected countries
and to surveillance by a GATT committee of representatives from each of
the signatories.
The agreement on subsidies and countervailing duties will limit tradedistorting subsidies, and will enunciate more clearly a country's right to
take counteractions against such practices. Export subsidies will be defined
more broadly than they have been in the past (for example, they can exist
even if the domestic price and export price are the same); they must be
imposed and regulated with greater "transparency" (that is, so that they
are more visible to the domestic and foreign public) ; they will be prohibited
on primary mineral products and nonprimary products; and their use for
agricultural products will require greater discipline. In addition, signatories
will agree to consider the impact on their trading partners when using
economic subsidies in general. Countermeasures can be imposed if a subsidy
causes injury to domestic producers, the impairment of benefits from GATT
concessions, or serious prejudice to other signatories (if, for example, it
reduces a nation's expected benefits from international agreements). This
particular code will be enforced through a tightly controlled process for
settling disputes (the recommendations of the international committee must
be reported within 120 days of a complaint).
The government procurement code is intended to reduce the scope for
discrimination against foreign suppliers when governments purchase articles
for their own use. It entails agreement on greater transparency in the bidding and awarding of government contracts for purchases of goods; and,
since the elimination of all discrimination is unlikely, it also requires agreement about the official entities that would be covered by the code. The latter
problem is particularly difficult since many of the entities which are private
in the United States are governmental in many foreign countries.
Nevertheless significant reduction of discrimination in government procurement, subject to settlement of disputes by an international panel, should
be achieved.




159

Taken together, the tentative agreements reached in the Tokyo Round of
the Multilateral Trade Negotiations represent significant progress in our
continuing efforts to reduce barriers to international commerce and to
strengthen and expand international trading rules, and they should contribute to an increase in trade and investment around the world. This agreement represents the first time since the 1960s that the international community has reduced the barriers to trade across such a broad spectrum of
tariff and nontariff measures. For the United States in particular, the lowering of our own import barriers should help reduce inflationary pressures by
increasing the competitiveness of imports and of import-competing products. At the same time, our export capabilities will receive a boost through
the lowering of both tariff and nontariff barriers in our major export
markets.
U.S. DOMESTIC TRADE POLICY
Despite increasing trade problems and pressures for protectionist trade
policies around the world, the Administration remains committed to a free
and open trading system. In many highly concentrated domestic industries,
foreign competition helps prevent market power from becoming excessive.
Nevertheless cases occur from time to time where, under U.S. law, import
relief is necessary: where injury exists, where imports are the major cause
of injury, and where such temporary actions can contribute to adjustment.
In 1978 the International Trade Commission investigated petitions for
import relief by over 30 industries, covering imports valued at over $2 billion.
The International Trade Commission recommended increased protection in
the form of tariffs or quantitative restrictions on more than $1.3 billion of
trade in such goods as stainless steel flatware, high-carbon ferrochrome,
CB radios, refined copper, industrial fasteners, and bicycle tires and tubes.
Relief was granted in escape clause cases involving approximately $750 million in imports (for example, CB radios, high-carbon ferrochrome, and
industrial fasteners). In these cases the Administration decided in favor of
import relief because it would aid substantially in the development of more
efficient industries, and because the direct benefits of relief were sufficiently
high to outweigh the costs to consumers and other sectors of the economy.
THE NATIONAL EXPORT POLICY
Faced with the large external deficit and the need for action, the Administration felt that increasing U.S. exports could be a valuable way to move
toward adjustment. In the light of the weak dollar, the deteriorating position of U.S. manufactured exports, and the low profile accorded export
efforts in the United States, the Administration announced the National
Export Policy on September 26, 1978. This National Export Policy, in conjunction with the successful conclusion of the Multilateral Trade Negotiations, will ensure a strong export industry and an environment for fair
competition from imports for the period ahead.




160

Before 1976 the largest U.S. trade deficits for a full year were the $5.3billion deficit in 1974 and the $6.4-billion deficit in 1972. In comparison, the
trade deficits in 1976, 1977, and 1978 were $9 billion, $31 billion, and an
estimated $35 billion respectively. The U.S. share of total manufactured
exports of 15 industrial countries fell from almost 30 percent in the late
1950s to 19.2 percent in 1972. It rose to 21.1 percent in 1975 but has declined steadily since then, falling to 18.9 percent by the first quarter of 1978,
the lowest since mid-1972 (Chart 13).
The outlook for 1979 and the early 1980s is much brighter. U.S. exports
of manufactured goods have already shown a strong turnaround in 1978.
This improvement, and the favorable outlook, derive from several factors.
First, some of the trade deficit can be explained by our faster growth compared to that of our major trading partners. As their growth rates abroad
increase in relation to ours, in accord with recent trends and commitments
made at the Bonn Summit, our exports should increase relative to our imports. Second, the depreciation of the dollar over the last 18 months will
provide a continuing spur to exports in the coming years. Third, by reducing inflationary pressures, the Administration's anti-inflation program will
improve our international competitiveness, increasing our exports and reducing our imports. Fourth, the successful conclusion of the Multilateral
Chart 13

U.S. Share of Fifteen Industrial
Countries' Exports of Manufactured Goods
PERCENT^

30

28

26

24

22

20

18

n l

i

1958

i

i

1960

i

i

1962

i

i

1964

i

i

1966

i

i

1968

i

i

1970

:/U.S. EXPORTS OF MANUFACTURES AS PERCENT OF TOTAL
INDUSTRIAL COUNTRIES' EXPORTS OF MANUFACTURED GOODS.
SOURCE: DEPARTMENT OF COMMERCE.




161

i

i

1972

i

i

1974

i

i

1976

I

Trade Negotiations in Geneva will reduce tariff and nontariff barriers in our
export markets and should improve our export capabilities.
Finally, the Administration has committed itself to a stronger emphasis
on foreign markets for U.S. goods by developing the National Export Policy.
This policy includes the following major provisions: an increase in the size
and the flexibility of the Eximbank's activities; a commitment from the
Small Business Administration to channel up to $100 million of its loan
guarantees to small export businesses; an earmarking of $20 million of the
Commerce and State Departments' budgets to assist small- and mediumsized businesses in their marketing efforts abroad; an increase in the level
of short-term agricultural export credits by almost $1 billion; and a decision to ask the Justice Department to clarify ambiguities about the enforcement of the Foreign Corrupt Practices Act and the international application of our antitrust laws.
Perhaps the most important contribution the Federal Government can
make to improving our trade position is to assure a more sensible regulatory
environment. Too frequently, obstacles to production or investment have
raised domestic costs or encouraged imports. If agencies are required to take
into account the effects on trade and other costs of regulations, greater scope
can exist for competitive forces, thereby allowing domestic producers to gain
a greater share of domestic and foreign markets.




162

Appendix A
REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1978




163




LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS.,

Washington, D.C., December 29, 1978.
MR. PRESIDENT:

The Council of Economic Advisers submits this report on its activities
during the calendar year 1978 in accordance with the requirements of the
Congress, as set forth in section 10(d) of the Employment Act of 1946 as
amended by the Full Employment and Balanced Growth Act of 1978.
Cordially,




CHARLES L. SCHULTZE, Chairman
LYLE E. GRAM LEY
WILLIAM D.

165

NORDHAUS




Report to the President on the Activities of the
Council of Economic Advisers During 1978
With the enactment of the Full Employment and Balanced Growth Act of
1978, the chartering legislation of the Council of Economic Advisers was
substantially revised for the first time since the Council was created by the
Employment Act of 1946. The new act, which was signed by the President on
October 27, 1978, is better known as the Humphrey-Hawkins Act, after the
primary sponsors of the law, Senators Hubert and Muriel Humphrey and
Congressman Augustus Hawkins.
Under the Full Employment and Balanced Growth Act, the basic mission
of the Council of Economic Advisers is unchanged. The Council is to continue to advise and assist the President in the formulation of national economic policies and in Presidential decisions on other matters that affect the
economic life of the Nation. However, the Humphrey-Hawkins Act creates
an important new framework within which the government is to pursue
policies designed to reach our economic objectives.
The act reaffirms and enlarges upon the commitment of the Employment
Act of 1946 by declaring that it is a national objective to provide full
opportunities for useful employment to all Americans willing and able to
work. The Humphrey-Hawkins Act also legislates for the first time a national commitment to reduce the rate of inflation. The act recognizes as well
the need for better coordination of monetary and fiscal policies, and to that
end establishes new procedures and requirements for the President, the
Congress, and the Federal Reserve System.
The new law requires that the President each year set forth in the Economic Report of the President numerical goals for employment, unemployment, production, real income, productivity, and prices during the next 5
years. Short-term goals for these key indicators of the economy's health are
to be established for 2 years, and medium-term goals for the subsequent 3
years.
The Full Employment and Balanced Growth Act sets forth specific
numerical goals for unemployment and inflation for the 5-year period now
ahead. The act states that the goal for unemployment in 1983 should be
4 percent overall and 3 percent for workers aged 20 and over. For inflation,
the act sets a goal of 3 percent by 1983 and, after that goal is achieved, zero
percent by 1988. These are highly ambitious goals that cannot be realized




167

solely through fiscal and monetary measures. The act recognizes this in two
ways.
First, it recommends to the President a wide range of policies that might
serve to attack the problems of unemployment and inflation. The act does
not require him to pursue any specific policies, nor does it authorize spending on any new programs. If the President wishes to adopt policies mentioned
in the act, he must seek congressional authorization to fund the new
programs.
Second, the act authorizes the President, beginning with the second Economic Report published after passage of the act, to recommend goals for
unemployment and inflation in 1983 that differ from those provided for in
the act, if economic circumstances make such changes necessary. The act
provides, however, for continued commitment by the Congress and the
President to the objective of reducing unemployment to 4 percent as soon as
feasible.
If the President recommends a change in the 1983 goal for reducing
unemployment, his Economic Report must designate the year in which he
believes that the 4 percent goal can be achieved. The Congress may then
include in its first concurrent budget resolution its own timetable for
attaining the 4 percent unemployment goal. The budget resolution may also
contain such a statement if the President should, in subsequent years,
recommend a year for reaching 4 percent unemployment other than that
set in a future congressional budget resolution.
Each year the President is required by the new act to present budget
recommendations for the 2 years immediately ahead that are consistent
with the short-term goals set forth in his Economic Report. He is also required to present projections for the budget in the subsequent 3
years that are consistent with the medium-term goals set out in the
Economic Report. Similarly, the act calls upon the Congress, in its consideration of the budget, to take into account the economic goals recommended by the President. Every year, when debate on the first concurrent
budget resolution is begun in each House of Congress, up to 4 hours of
debate are to be reserved for discussion of the economic situation and its
implications for budgetary policy.
The Federal Reserve Board is required by the act to review the President's
budget and Economic Report and to report to the Congress regarding the
President's recommendations and the manner in which monetary policies
are related to his goals. The Congress, in its yearly deliberations on the
budget, is to take into account not only the President's program but the
views and policies of the Federal Reserve Board as well. Through this
process, the act should promote a better coordination of the Nation's
economic policies.
The Council of Economic Advisers played an active role in the development of the Full Employment and Balanced Growth Act. During 1977 the




168

Council joined sponsors of the act in discussions that led to the legislation
introduced in mid-1977 with the President's full support and passed by the
Congress in 1978. During congressional consideration of the act, the Council worked closely with members of Congress, their staffs, and other government agencies to achieve passage of the legislation.
The Economic Report of the President and the Budget of the United
States, published in January 1979, will be the first issued under the new
act, and the first to set forth economic goals in the fashion required by
the new act. They will also carry out the requirement of the HumphreyHawkins Act that each year the Office of Management and Budget review selectively a number of national priority programs and policies that can
further the purposes of the act. The act particularly directs the Office of
Management and Budget to study such significant issues as government
policies affecting energy and agriculture, the problems of urban areas,
and the expansion of exports. Similarly, the act requires that the Economic
Report of the President include a report on investment policy that discusses
both the needs of businesses for investment capital and the government's
policies to support adequate rates of capital formation.
FUNCTIONS OF THE COUNCIL OF ECONOMIC ADVISERS
The Employment Act of 1946 challenged the government to pursue policies that would achieve maximum employment, production, and purchasing power. Recognizing the evolution of the economy since 1946, and the
increasing importance of the inflation problem in today's economy, the Full
Employment and Balanced Growth Act adds to that mandate. The Federal
Government still is to promote high levels of employment and production.
Now, however, the government is also called upon to pursue prudent
budgetary policies, to seek an improved international trading position for the
United States, and to take steps to assure reasonable price stability.
These new legislative objectives are fully consistent with the Council
of Economic Advisers' current role in the Administration, a role that
has grown steadily since 1946 as new economic problems placed new demands on the Council and its staff. Today the Council is responsible for
advising the President on such widely differing matters as Federal fiscal policies, efforts to reform the Federal regulatory system, and the international
economic policies of the U.S. Government.
MACROECONOMIC POLICIES
From the outset the Council's fundamental role has been to advise the
President on comprehensive economic policies designed to achieve the government's objectives for employment, output, and price stability. To fulfill
this responsibility the Council develops economic forecasts several times
each year with the assistance of an interagency forecasting committee. The
members of this committee include, in addition to the Council, representa-




169

tives from the Office of Management and Budget and the Departments of
the Treasury, Commerce, and Labor. This group, which is chaired by a
Member of the Council, meets to analyze the outlook for individual sectors
of the economy and to develop detailed economic forecasts for the period
immediately ahead. The Chairman of the Council presents these forecasts to the Economic Policy Group (EPG), made up of the President's
principal economic advisers, which meets each week to discuss and develop
the Administration's economic policy proposals. The Chairman of the Council of Economic Advisers is a member of the EPG and of its steering group.
In the final months of each year, during the preparation of the President's annual budget, the Council also presents to the Economic Policy
Group, and later to the President, proposals for Federal fiscal policies during
the coming fiscal year. The development of advice to the President on macroeconomic policy thus remains one of the Council's major
responsibilities.
The Council also worked actively during 1978 with the Council on Wage
and Price Stability to develop and apply measures to combat inflation, including the program that the President announced to the Nation on October 24, 1978. The Council on Wage and Price Stability was chaired by the
Chairman of the Council of Economic Advisers, Charles L. Schultze, until
October 1978, when Alfred E. Kahn was named Advisor to the President on
Inflation, and Chairman of the Council on Wage and Price Stability.
MICROECONOMIC POLICIES
In addition to its work on overall economic policies, the Council
of Economic Advisers is increasingly involved in the analysis of microeconomic issues—those policy actions and economic developments that affect individual sectors of the economy, or even individual industries and
markets. During 1978 the Council helped form the Administration's policies regarding agriculture, energy, financial institutions, health insurance,
welfare reform, and other major issues. The Council and its staff were
also actively involved in developing the tax program that the President submitted to the Congress in January 1978.
During 1978 the Council continued to chair the interagency Regulatory
Analysis Review Group (RARG), created late in 1977 to review selected
analyses of the economic effects of major regulatory proposals. The President
has ordered that each major regulatory proposal must be accompanied by a
regulatory analysis. The analysis is to be developed by the regulatory agency
originating the proposal and submitted for public comment before the final
regulation takes effect. During the period for public comment the Regulatory Analysis Review Group evaluates the regulatory analysis, and its appraisal is filed in the agency's record of public commentary. In 1978 five
major regulations were reviewed by the RARG: the Occupational Safety
and Health Administration's standard on workers' exposure to acrylonitrile,
and its generic carcinogen policy; the Environmental Protection Agency's




170

ambient air quality standard for ozone; the Department of Transportation's
regulation on access to mass transit facilities for the handicapped; and the
Department of the Interior's surface coal mining and reclamation regulations. At year's end, reviews were under way of the Environmental Protection
Agency's new source performance standards for steam-powered electric
generating plants and the Department of Energy's coal conversion regulations. The Council's staff took an active part in preparing several of the
review group's comments on these regulations and in coordinating the
activities of the RARG.
The Council of Economic Advisers continued during 1978 to participate
in developing the Administration's international economic policies. The
Chairman of the Council also served during the year as the Chairman of
the Economic Policy Committee of the Organization for Economic Cooperation and Development (OECD). In that capacity he chaired three
meetings of the committee, which consists of senior economic officials from
OECD member governments.
The Council also participates in the working parties of the OECD
Economic Policy Committee on inflation, balance of payments adjustment,
and medium-term growth, as well as the ad hoc group on positive adjustment policies. Council Members or staff economists, representing the U.S.
Government, attend periodic meetings of these working parties during the
year.
PUBLIC INFORMATION
The Full Employment and Balanced Growth Act retained the requirement, originally set forth by the Employment Act of 1946, that the President submit a report to the Congress each year on the state of the economy.
As noted earlier, however, the Humphrey-Hawkins Act requires new information to be included in the Economic Report of the President.
The Council assumes major responsibility for the preparation of the Economic Report of the President, which also contains the annual report of the
Council. This publication is the principal channel through which the public
is informed of the Council's work and views, and it is of further importance
in presenting and explaining the Administration's domestic and international
economic policies. In recent years about 50,000 copies of the Report have
been distributed annually.
The Council prepares a monthly publication, Economic Indicators, which
is a compendium of statistical information developed by the Council's Statistical Office for the Joint Economic Committee of the Congress. Each month
about 10,000 copies of Economic Indicators are distributed.
Information is also provided to members of the public through speeches
and other public appearances by the Chairman, Members, and staff economists of the Council. In 1978 the Chairman and Members made 23 appearances before committees of the Congress to testify on the Administration's economic policies. Among its publications this year the Council in-




171

eluded a Staff Paper on the taxation of capital gains, prepared by John
Yinger, a senior staff economist, with the help of other members of the Council's staff. Less formally, the Council answered numerous requests from the
press in 1978 and provided information on a wide range of economic topics
in response to inquiries from individual citizens.
ORGANIZATION AND STAFF OF THE COUNCIL
OFFICE OF THE CHAIRMAN
Charles L. Schultze, appointed Chairman of the Council in 1977, communicates the Council's views to the President through direct consultation
as well as through written reports dealing with particular economic developments, programs, and proposals. The Chairman represents the Council at
meetings of the Cabinet and other official events.
COUNCIL MEMBERS
The two Council Members supervise the work of the Council's professional staff. Members also represent the Council at meetings of public and
private groups concerned with economic affairs, and they assume major
responsibility for the Council's involvement in the activities of the government that affect the economy. Lyle E. Gramley and William D. Nordhaus
continued to serve as Council Members during 1978.
Past Council Members and their dates of service are listed below
Name

Position

Edwin G. Nourse.
Leon H. Keyserling_.
John D. Clark
Roy Blough
Robert C. Turner
Arthur F. Burns.
Neil H. Jacoby.
Walter W. Stewart
Raymond J. Saulnier...
Joseph S. Davis
Paul W. McCracken
Karl Brandt
Henry C. Wallich.
Walter W. Heller
James Tobin
Kermit Gordon
Gardner Ackley

_

John P. Lewis
Otto Eckstein
Arthur M. Okun
James S. Duesenberry
Merton J. Peck
_
Warren L. Smith
Paul W. McCracken
Hendrik S. Houthakker
Herbert Stein
Ezra Solomon
Marina v.N. Whitman
Gary L. Seevers..
William J. Fellner
Alan Greenspan
Paul W. MacAvoy
Burton G. Malkiel




_.

Oath of office date

Chairman
Vice Chairman
Acting Chairman
Chairman
Member
Vice Chairman
Member..
_
Member
Chairman
Member
Member
_
Member...._
Chairman
Member
Member
Member
Member
Chairman
Member..
Member..
Member
Chairman
Member..
Member.
_
Member
Chairman
Member.
Member...
Member
Chairman
Member..
Member
Chairman
Member
_
_ Member
Member
Member
Chairman
Member
_
Member

172

Separation date

August 9, 1946
August 9, 1946
November 2, 1949..
May 10, 1950
August 9, 1946
May 10, 1950
June 29,1950
September8,1952
_ March 19,1953
Septembers, 1953
December 2,1953
April 4, 1955..
December 3,1956
May 2, 1955
December 3,1956
November 1, 1958
May 7, 1959
January 29,1961
January 29,1961
January 29, 1961
Augusts 1962
November 16,1964
May 17,1963
September 2.1964....
November \&, 1964
Februarys, 1963....
February 2,1966
February 15,1968
July 1, 1968
February 4, 1969
February 4,1969
February 4,1969
January 1,1972
September 9,1971
March 13,1972
July 23,1973.
October 31, 1973
September 4,1974
June 13, 1975
July 22,1975

November 1, 1949.
January 20,1953.
February 11,1953.
. . . August 20, 1952.
January 20,1953.
December 1,1956.
February 9,1955.
April 29,1955.
January 20,1961.
October 31, 1958.
January 31,1959.
January 20, 1961.
January 20,1961.
November 15, 1964.
July 31, 1962.
December 27,1962.
February 15, 1968.
August 31,1964.
February 1,1966.
January 20,1969
June 30,1968.
January 20,1969.
January 20,1969.
December 31, 1971.
July 15, 1971.
August 31, 1974.
March 26,1973.
August 15, 1973.
April 15,1975.
February 25, 1975.
January 20, 1977.
November 15, 1976.
January 20,1977.

The Council staff is small enough to permit the Chairman and Members
to work together as a team on most major policy issues. To facilitate coordination of the staff's work, however, responsibility for the major economic
topics of concern to the Council has been informally divided between the
two Members. Mr. Gramley has continued to take primary responsibility in
1978 for macroeconomic analysis, including the preparation of economic
forecasts, and for labor market policies. Mr. Nordhaus has supervised international economic analysis and microeconomic analysis, including analysis of
policies in such areas as energy, agriculture, social welfare, and oversight of
regulatory reform activities.
PROFESSIONAL STAFF
At the end of 1978 the professional staff consisted of the Special Assistant to the Chairman, 10 senior staff economists, 2 staff economists, 1
statistician, and 5 junior staff economists.
The professional staff and their special fields at the end of the year were:
Peter G. Gould

Special Assistant to the Chairman
Senior Staff Economists

Thomas C. Earley
Robert J. Flanagan
Steven W. Kohlhagen
Val L. Koromzay
Susan J. Lepper

David C. Munro
David S. Sibley
Lawrence J. White
David A. Wyss
John M. Yinger

Agriculture and Food Policy
Labor Market and Anti-Inflation Policies
International Financial Developments and
Trade
International Financial and Economic Developments, and Trade
Monetary and Financial Policies, Housing,
State and Local Finance, and General
Macroeconomic Analysis
Business Conditions Analysis and Forecasting
Regulation
Regulation
Business Conditions Analysis and Forecasting,
and Health Policy
Public Finance and Income Maintenance
Policy
Statistician

Catherine H. Furlong

Senior Statistician
Staff Economists

Robert E. Litan

Regulation and Energy

Michael J. McKee

Business Conditions Analysis and Forecasting

 - 79 - 12
278-216 O


173

Junior Economists
James P. Luckett
Robert S. Lurie
Frederick W. McKinney. . .
Elizabeth A. Savoca
Wanda S. Tseng

Labor Market Policies
Regulation and Energy
Public Finance, Income Maintenance, and
Health Policy
Business Conditions Analysis and Forecasting
International Economic Developments and
Trade

Catherine H. Furlong, Senior Statistician, is in charge of the Council's
Statistical Office. Mrs. Furlong has primary responsibility for managing the
Council's statistical information system. She supervises the publication of
Economic Indicators and the preparation of the statistical appendix to the
Economic Report. She also oversees the verification of statistics in memoranda, testimony, and speeches. Natalie V. Rentfro, Earnestine Reid, and
Elizabeth A. Kaminski assist Mrs. Furlong.
From time to time during the year, the Council calls upon outside economists to provide special assistance on projects relating to their particular
specialty. During 1978 consultants to the Council included Peter K. Clark
(Stanford University), Donald H. Fullerton (Stanford University), Frank
S. Levy (The Urban Institute), and John B. Shoven (Stanford University).
During the summer James R. Golden (U. S. Military Academy) was a
member of the professional staff.
In preparing the Economic Report the Council relied upon the editorial
assistance of Rosannah C. Steinhoff. Also called on for special assistance in
connection with the Report were Dorothy L. Reid and Dorothy Bagovich,
former members of the Council staff.
SUPPORTING STAFF
The Administrative Office of the Council of Economic Advisers provides
general support for the Council's activities. Nancy F. Skidmore, Administrative Officer, prepares and analyzes the Council budget and provides general administrative services.
Elizabeth A. Kaminski, Staff Assistant to the Council, handles general
personnel management, serves as Executive Secretary to the Regulatory
Analysis Review Group, and provides general assistance to the Council and
to the Special Assistant in the management of the Council's activities.
Members of the secretarial staff for the Chairman and Council Members
during 1978 were Patricia A. Lee, Linda A. Reilly, Florence T. Torrison,
and Alice H. Williams. Secretaries for the professional staff were M. Catherine Fibich, Bessie M. Lafakis, Joyce A. Pilkerton, Bettye T. Siegel, Margaret
L. Snyder, and Lillie M. Sturniolo.
Marie G. Boccucci provided secretarial assistance during the summer
months.




174

DEPARTURES

The Council's professional staff members most often are on leave to the
Council from universities, other government agencies, or research institutions.
Their tenure with the Council is usually limited to 1 or 2 years. Senior staff
economists who completed their appointments with the Council during the
year were Roger E. Brinner (Data Resources, Inc.), Peter K. Clark (Stanford University), Nina W. Cornell (Federal Communications Commission),
George E. Johnson (University of Michigan), J. B. Penn (Department of
Agriculture), Jeffrey R. Shafer (Federal Reserve Board), and William L.
Springer (Data Resources, Inc.). Arthur E. Blakemore, staff economist,
resigned to accept a position with the Council on Wage and Price Stability.
Junior economists who resigned in 1978 were Michael S. Golden (Congressional Budget Office), Howard K. Gruenspecht (Domestic Policy Staff),
Richard I. Kolsky (Yale University), Richard A. Koss (Wharton Econometric Forecasting Associates, Inc.), Julianne M. Malveaux (Rockefeller
Foundation), and Martha M. Parry (Stanford University).
James W. Gatling and Frank C. Norman joined the new Office of Administration created in the Executive Office of the President as part of the
President's 1977 reorganization of his own staff offices.




175




Appendix B
STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION




177




CONTENTS
NATIONAL INCOME OR EXPENDITURE:
B-l. Gross national product, 1929-78
B-2. Gross national product in 1972 dollars, 1929-78
B-3. Implicit price deflators for gross national product, 1929-78
B-4. Implicit price deflators and alternative price measures for gross
national product and gross domestic product, 1929-78
B-5. Gross national product by industry in 1972 dollars, 1947-77
B-6. Gross national product by major type of product, 1929-78
B-7. Gross national product by major type of product in 1972 dollars,
1929-78
B-8. Gross national product: Receipts and expenditures by major economic groups, 1929-78
B-9. Gross national product by sector, 1929-78
B-10. Gross national product by sector in 1972 dollars, 1929-78
B - l l . Gross domestic product of nonfinancial corporate business, 1929-78..
B-l2. Output, costs, and profits of nonfinancial corporate business, 1948-78.
B-l3. Personal consumption expenditures, 1929-78
B-14. Gross private domestic investment, 1929-78
B-l5. Inventories and final sales of business, 1946-78
B-16. Inventories and final sales of business in 1972 dollars, 1947-78
B-l 7. Relation of gross national product and national income, 1929-78....
B-l8. Relation of national income and personal income, 1929-78
B-l9. National income by type of income, 1929-78
B-20. Sources of personal income, 1929-78
B-21. Disposition of personal income, 1929-78
B-22. Total and per capita disposable personal income and personal consumption expenditures in current and 1972 dollars, 1929-78
B-23. Gross saving and investment, 1929-78
B-24. Saving by individuals, 1946-78
B-25. Money income (in 1977 dollars) and poverty status of families and
unrelated individuals by race of head, 1947—77
POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY:
B-26. Population by age groups, 1929-78
B-27. Noninstitutional population and the labor force, 1929-78
B-28. Civilian employment and unemployment by sex and age, 1947-78. .
B—29. Selected employment and unemployment data, 1948—78
B-30. Unemployment rate by demographic characteristic, 1948-78
B-31. Unemployment by duration, 1947-78
B-32. Unemployment by reason, 1967-78
B-33. Unemployment insurance programs, selected data, 1946-78
B-34. Wage and salary workers in nonagricultural establishments, 1929-78.
B-35. Average weekly hours and hourly earnings in selected private nonagricultural industries, 1947-78
B-36. Average weekly earnings in selected private nonagricultural industries, 1947-78
B-37. Productivity and related data, private business economy, 1947-78. . .
B-38. Changes in productivity and related data, private business economy,
1948-78




179

Page

183
184
186
188
189
190
191
192
194
195
196
197
198
199
200
201
202
203
204
206
208
209
210
211
212
213
214
216
217
218
219
220
221
222
224
225
226
227

PRODUCTION AND BUSINESS ACTIVITY:
B-39.
B-40.
B-41.
B-42.
B-43.
B-44.
B-45.
B-46.
B-47.
B-48.
PRICES:
B-49.
B-50.
B-51.
B-52.
B-53.
B-54.
B-55.
B-56.
B-57.
B-58.

Page

Industrial production indexes, major industry divisions, 1929-78. .. .
Industrial production indexes, market groupings, 1947-78
Industrial production indexes, selected manufactures, 1947-78
Capacity utilization rate in manufacturing, 1948-78
New construction activity, 1929-78
New housing units started and authorized, 1959-78
Business expenditures for new plant and equipment, 1947-79
Sales and inventories in manufacturing and trade, 1947-78
Manufacturers5 shipments and inventories, 1947-78
Manufacturers' new and unfilled orders, 1947-78

228
229
230
231
232
234
235
236
237
238

Consumer price indexes by expenditure classes, 1929-78
Consumer price indexes by commodity and service groups, 1939-78.
Consumer price indexes, selected commodities and services, 1939-78.
Consumer price indexes for commodity groups, seasonally adjusted,
1975-78
Consumer price indexes for service groups and selected expenditure
classes, seasonally adjusted, 1975-78
Changes in consumer price indexes, major groups, 1948—78
Producer price indexes by stage of processing, 1947—78
Producer price indexes by stage of processing, seasonally adjusted,
1975-78
Producer price indexes by major commodity groups, 1929-78
Changes in producer price indexes for finished goods, 1948—78

239
240
241

MONEY
B-59.
B-60.
B-61.

STOCK, CREDIT, AND FINANCE:
Money stock measures, 1953-78
Commercial bank loans and investments, 1930-78
Liquid asset holdings of private domestic nonfinancial investors,
1952-78
B-62. Total funds raised in credit markets by nonfinancial sectors, 1970-78.
B-63, Federal Reserve Bank credit and member bank reserves, 1929-78. . .
B-64. Aggregate reserves and deposits of member banks, 1959-78
B-65. Bond yields and interest rates, 1929-78
B-66. Consumer installment credit, 1970-78
B-67. Mortgage debt outstanding by type of property and of financing,
1939-78
B-68. Mortgage debt outstanding by holder, 1939-78

242
243
244
245
247
248
250
251
252
253
254
256
257
258
260
261
262

GOVERNMENT FINANCE:
B-69. Federal budget receipts and outlays, fiscal years 1929-80
B-70. Federal budget receipts, outlays, and debt, fiscal years 1970-80
B-71. Relation of Federal Government receipts and expenditures in the
national income and product accounts to the unified budget,
1978-80
B-72. Government receipts and expenditures, national income and product
accounts, 1929-78
B-73. Federal Government receipts and expenditures, national income and
product accounts, 1952-80
B-74. State and local government receipts and expenditures, national income
and product accounts, 1946-78
B-75. State and local government revenues and expenditures, selected fiscal
years, 1927-77
B-76. Interest-bearing public debt securities by kind of obligation, 1967-78.




180

263
264

266
267
268
269
270
271

GOVERNMENT FINANCE—Continued
Page
B-77. Estimated ownership of public debt securities, 1967-78
272
B-78. Average length and maturity distribution of marketable interestbearing public debt securities held by private investors, 1967-78. . 273
CORPORATE PROFITS AND FINANCE:
B-79. Corporate profits by industry, 1929-78
B-80. Corporate profits of manufacturing industries, 1929-78.
B-81. Corporate profits with inventory valuation and capital consumption
adjustments, 1946-78
B-82. Sales, profits, and stockholders' equity, all manufacturing corporations, 1947-78
B-83. Relation of profits after taxes to stockholders' equity and to sales, all
manufacturing corporations, 1947-78
B-84. Relation of profits after taxes to stockholders' equity and to sales, all
manufacturing corporations, by industry group, 1977-78
B-85. Sources and uses of funds, nonfarm nonfinancial corporate business,
1946-78
B-86. Current assets and liabilities of U.S. corporations, 1939-78
B-87. State and municipal and corporate securities offered, 1934-78
B-88. Common stock prices and yields, 1949-78
B-89. Business formation and business failures, 1929-78
AGRICULTURE:
B-90. Income of farm people and farmers, 1929-78
B-91. Farm production indexes, 1929-78
B-92. Farm population, employment, and productivity, 1929-78
B-93. Indexes of prices received and prices paid by farmers and selected farm
resource prices, 1929-78
B-94. Selected measures of farm resources and inputs, 1929-78
B-95. Balance sheet of the farming sector, 1929-79
INTERNATIONAL STATISTICS:
B-96. Exchange rates, 1971-78
B-97. U.S. international transactions, 1946-78
B-98. U.S. merchandise exports and imports by principal end-use categories,
1965-78
B-99. U.S. merchandise exports and imports by area, 1972-78
B—100. International investment position of the United States at year-end,
1970-77
B-101. International reserves, 1952, 1962, and 1974-78
B-102. Summary of major U.S. Government net foreign assistance, July 1,
1945 to December 31, 1977
B-103. World trade: Exports and imports, 1965, 1970, and 1974-78
B—104. World trade balance and current account balances, 1965, 1970,
and 1974-78
B—105. Consumer prices and hourly compensation, major industrial countries, 1960-78
B-106. Industrial production and unemployment rate, major industrial
countries, 1960-78
B-107. Growth rates in real gross national product, 1960-78




181

274
276
278
279
280
281
282
283
284
285
286
287
288
289
290
291
292
293
294
296
297
298
299
300
302
303
304
305
306

General Notes
Detail in these tables may not add to totals because of rounding.
Unless otherwise noted, all dollar figures are in current dollars.
Symbols used:
» Preliminary.
__ Not available (also, not applicable).




182

NATIONAL INCOME OR EXPENDITURE
T A B L E B-l.—Gross national product, 1929-78
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Net exports of goods
and services

Yearo r quarter

Gross
national
product

Personal
consumption
expendi tures

Gross
private
domestic
Net
invest- exports
ment

Government purchases of goods and
services
Federal

Exports

Imports

Total
Tot<\\

National
Nondedefense
fense i

State
and
local

Percent
change
from
preceding
period,
gross
national
product'

1929

103.4

77.3

16.2

1.1

7 0

5.9

8. 8

14

1933

55 8

45.8

1.4

.4

? 4

2.0

8.2

1

1939

90.8

67.0

9.3

1.1

4, 4

3.4

13.5

5.

1.2

3.9

8.3

6.9

1940
1941
1942.
1943
1944
1945
1946
1947
1948
1949

100.0
124.9
158.3
192.0
210.5
212.3
209.6
232.8
259.1
258.0

71.0
80.8
88.6
99.4
108.2
119.5
143.8
161.7
174.7
178.1

13.1
17.9
9.9
5.8
7.2
10.6
30.7
34.0
45.9
35.3

1.7
1.3
.0
-2.0
-1.8
-.6
7.6
11.6
6.5
6.2

5. 4
5. 9
4.8
4. 4
5 3
7. ?
14. 8
19. 8
16.9
15.9

3.6
4.6
4.8
6.5
7.1
7.8
7.2
8.2
10.4
9.6

14. ?
24. 9
59. 8
88.9
97. 0
82. 8
27. 5
25 5
32. 0
38.4

6. 1
16.9
52.0
81. 3
89 4
74. 6
17. 6
12.7
16. 7
20.4

2.2
13.7
49.4
79.7
87.4
73.5
14.8
9.0
10.7
13.2

3.9
3.2
2.6
1.6
2.0
1.1
2.8
3.7
6.0
7.2

8.1
8.0
7.8
7.5
7.6
8.2
9.9
12.8
15.3
18.0

10.1
24.9
26.8
21.3
9.6
.9
-1.3
11.1
11.3
-.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

286.2
330.2
347 2
366.1
366.3
399.3
420.7
442.8
448.9
486 5

192.0
207.1
217.1
229.7
235.8
253.7
266.0
280.4
289.5
310.8

53.8
59.2
52.1
53.3
52.7
68.4
71.0
69.2
61.9
77 6

1.9
3.8
2.4
.6
2.0
4.3
6.1
2.5
.6

13 9
18. 9
18. ?
17. 1
18 0
20. 0
23.9
?6 7
?3 3
23. 7

12.0
15.1
15.8
16.6
16.0
17.8
19.6
20.7
20.8
23.2

38.5
60.1
75. 6
82. 5
75. 8
75.0
79. 4
87. 1
95 0
97. 6

18. 7
38.3
52 4
57.5
47 9
44. 5
45.9
50 0
53 9
53 9

14.0
33.5
45.8
48.6
41.1
38.4
40.2
44.0
45.6
45.6

4.7
4.8
6.5
8.9
6.8
6.0
5.7
5.9
8.3
8.3

19.8
21.8
23.2
25.0
27.8
30.6
33.5
37.1
41.1
43.7

10.9
15.4
5.1
5.5
.0
9.0
5.4
5.2
1.4
8 4

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

506 0
523.3
563.8
594.7
635.7
688.1
753.0
796.3
868.5
935.5

324.9 76.4
335.0 74.3
355.2 85.2
374.6 90.2
400.4 96.6
430.2 112.0
464.8 124.5
490.4 120.8
535.9 131.5
579.7 146.2

4.4
5.8
5.4
6.3
8.9
7.6
5.1
4.9
2.3
1.8

27. 6
?8 9
30. 6
32.7
37 4
39. 5
4? 8
45. 6
49.9
54 7

23.2
23.1
25.2
26.4
28.4
32.0
37.7
40.6
47.7
52.9

100. 3
108
118. 0
123. 7
129 8
138. 4
158 7
180
198 7
207. 9

53 7
57 4
63 7
64.6
65 f
67 3
78 8
90 9
98 0
97 5

44.5
47.0
51.1
50.3
49.0
49.4
60.3
71.5
76.9
76.3

9.3
10.4
12.7
14.3
16.2
17.8
18.5
19.5
21.2
21.2

46.5
50.8
54.3
59.0
64.6
71.1
79.8
89.3
100.7
110.4

4.0
3.4
7.7
5.5
6.9
8.2
9.4
5.8
9.1
7.7

7.4
6.1

-4 2

1970
1971
1972
1973
1974
1975
1976
1977.
1978 P

982.4
1 063.4
1, 171.1
1, 306.6
1, 412.9
1, 528.8
1, 700.1
1, 887.2
106.6

618.8
668.2
733.0
809.9
889.6
979.1
1, 090. 2
1, 206. 5
1, 339.7

3.9
140.8
1.6
160.0
188.3 - 3 . 3
7.1
220.0
6.0
214.6
20.4
190.9
7.4
243.0
297.8 - 1 1 . 1
344.5 - 1 1 . 8

62. 5
65.6
72.7
101. 6
137. 9
147.3
163. ?
175.5
205.2

58.5
64.0
75.9
94.4
131.9
126.9
155.7
186.6
217.0

218.9
233. 7
253.1
269.5
302. 7
338.4
359. 5
394.0
434.2

95 6
96
102 1
102.2
111 1
1
129 9
145.1
154.0

73.5
70.2
73.5
73.5
77.0
83.7
86.8
94.3
99.5

22.1
26.0
28.6
28.7
34.1
39.4
43.1
50.8
54.5

123.2
137.5
151.0
167.3
191.5
215.4
229.6
248.9
280.2

5.0
8.2
10.1
11.6
8.1
8.2
11.2
11.0
11.6

1976- 1
II.
Ill
IV

1
1,
1,
1,

649.7
685.4
715.6
749.8

1, 053. 8
1, 075.1
1 098.4
133.7

231.5
243.5
249.9
247.1

10.4
9.7
'6.9
2.8

154 4
160 7
168.2
169.4

144.1
150.9
161.3
166.6

354 0
357
360. 4
366. 3

127.1
127 8
129.9
134.6

85.9
85.6
86.5
89.1

41.2
42.2
43.4
45.5

226.9
2?9.4
230.5
231.7

13.6
9.0
7.3
8.2

1977- 1
II
III
IV

1,
1,
1,
1,

806.8 1 167.7 272.5
867.0 1 188.6 295.6
916.8 1 214.5 309.7
958.1 1 255.2 313.5

-8.5
-5.9
-7.0

170.9
178 1
180 8
17? 1

179.4
184.0
187.8
195.2

375.0
388.8
399 5
41? 5

138 3
14? 9
146 8
15?

91.9
93.7
94.4
97.1

46.4
49.3
52.4
55.1

236.7
245.9
252.7
260.3

13.7
14.0
11.1
8.9

1978- 1
II
III

1, 992.0 1 276.7 322.7 - 2 4 . 1
087.5 1 322.9 345.4 - 5 . 5
2, 136.1 1 356.9 350.1 - 1 0 . 7
210.8 1, 402.2 359.9 - 6 . 9

7
4
1
5

205.8
210.9
220.8
230.4

416
4?4
439
455.

7
7

151 5
147
154 0
163 4

97.9
98.6
99.6
102.1

53.6
48.6
54.5
61.3

265.2
277.6
285.8
292.2

7.1
20.6
9.6
14.7

IV v

181
?05
210
223

8
6

» This category corresponds closely to the national defense classification in "The Budget of the United States Government, Fiscal Year 1980."
1
Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here.
Source: Department of Commerce, Bureau of Economic Analysis.




183

TABLE B-2.—Gross national product in 1972 dollars, 1929-78
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates]

Personal consumption expenditures

Gross private domestic investment
Fixed investment

Gross
national
product

Year or quarter

Total

NonDurable durable Services
goods
goods

Nonresidential
Total
Total

Structures

Producers'
durable
equipment
16.4

Total

1929

314.6

215.6

21.5

98.1

96.1

55.9

51.3

37.0

20.6

1933

222.1

170.7

10.9

82.9

76.8

8.4

13.3

10.4

4.9

5.5

1939

318.8

220.3

19.1

115.1

86.1

33.6

32.0

20.7

8.6

12.1

1940
1941 .
1942..
1943
1944....
1945
1946
1947
1948 . .
1949

343.3
398.5
460.3
530.6
568.6
560.0
476.9
468.3
487.7
490.7

230.4
244.1
241.7
248.7
255.7
271.4
301.4
306.2
312.8
320.0

21.8
24.7
16.3
14.5
13.5
14.8
25.8
30.6
33.1
36.3

119.9
127.6
129.9
134.0
139.4
150.3
158.9
154.8
155.0
157.4

88.7
91.8
95.5
100.1
102.7
106.3
116.7
120.8
124.6
126.4

44.6
55.8
29.6
18.1
19.8
27.8
71.0
70.1
82.3
65.6

38.4
43.8
24.4
18.0
22.1
31.4
58.8
70.4
76.8
70.0

25.7
30.3
17.6
14.0
18.7
27.6
42.0
48.9
51.0
46.0

9.9
11.9
6.7
4.2
5.5
8.3
18.8
17.3
18.4
17.8

15.8
18.5
10.9
9.8
13.2
19.2
23.2
31.6
32.7
28.2

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

533.5
576.5
598.5
621.8
613.7
654.8
668.8
680.9
679.5
720.4

338.1
342.3
350.9
364.2
370.9
395.1
406.3
414.7
419.0
441.5

43.4
39.9
38.9
43.1
43.5
52.2
49.8
49.7
46.4
51.8

161.8
165.3
171.2
175.7
177.0
185.4
191.6
194.9
196.8
205.0

132.8
137.1
140.8
145.5
150.4
157. 5
164.9
170.2
175.8
184.7

93.7
94.1
83.2
85.6
83.4
104.1
102.9
97.2
87.7
107.4

83.2
80.4
78.9
84.1
85.6
96.3
97.1
95.7
89.6
101.0

50.0
52.9
52.1
56.3
55.4
61.2
65.2
66.0
58.9
62.9

19.1
20.6
20.6
22.5
23.5
25.3
28.1
28.1
26.4
26.8

30.9
32.3
31.5
33.8
31.8
35.9
37.1
37.9
32.5
36.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

736.8
755.3
799.1
830.7
874.4
925.9
981.0
, 007.7
, 051.8
, 078.8

453.0
462.2
482.9
501.4
528.7
558.1
586.1
603.2
633.4
655.4

52.5
50.3
55.7
60.7
65.7
73.4
79.0
79.7
88.2
91.9

208.2
211.9
218.5
223.0
233.3
244.0
255.5
259.5
270.2
276.4

192.3
200.0
208.7
217.6
229.7
240.7
251.6
264.0
275.0
287.2

105.4
103.6
117.4
124.5
132.1
150.1
161.3
152.7
159.5
168.0

101.0
100.7
109.3
116.8
124.8
138.8
144.6
140.7
150.8
157.5

66.0
65.6
70.9
73.5
81.0
95.6
106.1
103.5
108.0
114.3

28.8
29.3
30.8
30.8
33.3
39.6
42.5
41.1
42.0
44.0

37.2
36.3
40.1
42.7
47.7
56.0
63.6
62.4
66.1
70.3

1970
1971
1972
1973
1974
1975
1976—
1977
1978 P

, 075.3
1,107.5
1,171.1
I, 235.0
1,217 8
L, 202.3
1,271.0
L,332.7
I, 385.1

668.9
691.9
733.0
767.7
760 7
774.6
819.4
857.7
891.2

88.9
98.1
111.2
121.8
112 5
112 7
125.9
137.8
144.7

282.7
287.5
299.3
309.3
303 9
306.6
320.2
330.4
339.1

297.3
306.3
322.4
336.5
344.3
355.3
373.2
389.5
407.4

154.7
166.8
188.3
207.2
183.6
142.6
173.4
196.3
210.1

150.4
160.2
178.8
190.7
175.6
152.4
166.8
187.4
199.6

110.0
108.0
116.8
131.0
130.6
113.6
118.9
129.8
139.9

42.8
41.7
42.5
45.5
42.5
37.1
38.3
40.0
44.3

67.2
66.3
74.3
85.5
88.1
76.5
80.6
89.8
95.5

1,255.5
1, 268.0
I, 276.5
1. 284.0

806.3
814.0
820.9
836.2

124.8
125.2
125.3
128 5

314.6
318.2
320.5
327.7

366.9
370.6
375.1
380.0

168.5
174.7
177.1
173.4

161.0
164.6
167.8
173.6

115.5
117.8
121.0
121.4

38.3
38.5
38.3
38.3

77.2
79.3
82.7
83.1

1, 306.7
1, 325.5
1, 343.9
1, 354.5

846 6
849.5
858.0
876.6

134 9
136.2
136.9
143.0

327.1
327.2
329.2
338.1

384.6
386.0
391.8
395.6

186.1
197.1
201.7
200.3

180.3
187.1
189.5
192.8

126.8
129.1
130.8
132.5

38.3
40.0
40.8
41.0

88.5
89.0
90.0
91.5

1 354.2
1, 382.6
1,391.4
1,412.2

873 5
886.3
895.1
910.0

137 8
145.8
144.8
150.2

333.3
336.3
340.4
346.6

402.4
404.2
410.0
413.2

205.7
213.1
210.4
211.1

193.4
200.4
201.4
203.4

133.8
140.5
141.7
143.5

41.0
44.6
45.6
46.2

92.9
95.9
96.1
97.4

1976:1

II

III

_

IV
1977:1

II
III

IV
1978:1

II
III

IV 9

See next page for continuation of table.




184

TABLE B-2.—Gross national product in 1972 dollars, 1929-78— Continued
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross private domestic
investment—continued

Net exports of goods
and services

Government purchases
of goods and services

Fixed investment—continued
Residential

Year or
quarter

Total

NonFarm
farm
struc- structures
tures

Producers'
durable
equipment

Change
in
business
inventories

Net
exports

Exports

Imports

Total

Federal

State
and
local

Percent
change
from
preceding
period,
gross
national
product1

33.8

1929

14.3

13.6

0.6

0.1

4.6

2.2

15.6

13.4

40.9

7.0

1933

2.9

2.6

.2

.1

-4.9

.2

9.4

9.3

42.8

10.9

31.9

—2 2

1939

11.3

10.6

.6

.1

1.6

2.0

13.3

11.4

62.9

22.8

40.2

7 6

12.8
13.5
6.8
4.0
3.4
3.8
16.8
21.5
25.8
24.0

11.8
12.5
6.1
3.5
3.0
3.5
15.5
19.8
23.9
22.3

.8
.9
.6
.4
.4
.3
1
3
.5
4

.1
.2
.1
.0
.0
.1
.2
.3
.3
.3

6.2
12.0
5.2
-2.3
-3.6
12.2
-.2
5.5
-4.4

3.0
.8
-2.5
-7.3
-7.2
-4.5
11.6
16.6
8.5
8.8

14.6
14.7
10.3
9.0
10.0
13.5
26.1
30.2
24.2
24.2

11.5
14.0
12.8
16.3
17.3
18.0
14.6
13.6
15.7
15.4

65.2
97.7
191.5
271.2
300.3
265.3
93.0
75.4
84.1
96.2

26.7
61.0
157.4
239.6
269.7
233.7
58.2
36.1
42.4
48.9

38.5
36.7
34.1
31.6
30.6
31.6
34.7
39.3
41.8
47.4

7.7
16 1
15.5
15.3
7.1
-1.5
—14.8
—1.8
4.1
.6

1950 .
1951
1952
1953
1954
1955
1956
1957
1958
1959

33.2
27.5
26.8
27.8
30.2
35.1
31.9
29.7
30.6
38.1

31.5
25.9
25.3
26.3
28.8
33.8
30.4
28.3
29.2
36.5

3
3
?

.3
.3
.3

1
.9
1.0
1.0
.9
1.0

.3
.4
.4
.4
.5
.6

10.6
13.7
4.3
1.5
-2.2
7.7
5.8
1.5
-1.8
6.5

4.0
7.4
4.9
2.0
4.5
4.7
7.3
8.9
3.5
.9

21.7
25.9
24.9
23.8
25.3
27.9
32.3
34.8
30.7
31.5

17.7
18.5
20.0
21.8
20.8
23.2
25.0
26.0
27.2
30.6

97.7
132.7
159.5
170.0
154.9
150.9
152.4
160.1
169.3
170.7

47.0
81.3
107.0
114.6
95.2
86.9
85.9
89.8
92.8
91.8

50.7
51.3
52.5
55.4
59.7
64.0
66.5
70.3
76.4
78.9

8.7
8.1
3.8
3.9
-1.3
6.7
2.1
1.8
2
6.0

1960
1961..
1962
1963
1964
1965
1966.
1967
1968
1969

35.0
35.1
38.4
43.2
43.8
43.2
38.5
37.2
42.8
43.2

33.7
33.6
36.9
41.7
42.2
41.6
36.9
35.5
41.1
41.5

.8
1.0
.9
.9
.9
.8
.9
.9
.8
.9

.5
.5
.6
.6
.7
.7
.8
.8
.9
.9

4.4
2.9
8.1
7.8
7.3
11.3
16.7
12.0
8.7
10.6

5.5
6.7
5.8
7.3
10.9
8.2
4.3
3.5
-.4
-1.3

35.8
37.0
39.6
42.2
47.8
49.1
51.6
54.2
58.5
62.2

30.3
30.3
33.9
35.0
36.9
41.0
47.3
50.7
58.9
63.5

172.9
182.8
193.1
197.6
202.7
209.6
229.3
248.3
259.2
256.7

90.8
95.6
103.1
102.2
100.6
100.5
112.5
125.3
128.3
121.8

82.0
87.1
90.0
95.4
102.1
109.1
116.8
123.1
130.9
134.9

2.3
2.5
5.8
4.0
5.3
5.9
5.9
2. 7
4.4
2.6

1970
1971
1972
1973
1974
1975
1976
1977
1978 P

_

40.4
52.2
62.0
59.7
45.0
38.8
47.8
57.7
59.7

38.9
50.5
60.3
57.9
43.0
37.2
46.0
55.6
57.6

.6
.7
.7
.5
.9
.7
.7
.9
.8

.9
1.0
1.1
1.2
1.1
.9
1.1
1.2
1.3

4.3
6.6
9.4
16.5
8.0
-9.8
6.7
8.9
10.4

1.4
-.6
-3.3
7.6
15.9
22.6
15.4
9.5
8.6

67.1
67.9
72.7
87.4
93.0
90.0
95.9
98.2
107.3

65.7
68.5
75.9
79.9
77.1
67.5
80.5
88.7
98.7

250.2
249.4
253.1
252.5
257.7
262.6
262.8
269.2
275.2

110.7
103.9
102.1
96.6
95.8
96.5
96.6
101.6
100.5

139.5
145.5
151.0
155.9
161.8
166.1
166.2
167.6
174.7

-.3
3.0
5.7
5.5
-1.4
-1.3
5.7
4.9
3.9

1976: 1
||
III....
IV

45.5
46.8
46.8
52.3

43.5
45.2
45.2
50.2

1.0
.6
.6
.9

1.1
1.0
1.1
1.1

7.5
10.1
9.3

16.5
16.1
16.1
13.1

93.2
95.2
98.0
97.3

76.7
79.2
81.9
84.2

264.3
263.2
262.5
261.3

96.2
95.9
96.8
97.5

168.1
167.3
165.7
163.8

9.3
4.0
2.7
2.3

1977:1
II
III
IV..._

53.5
58.0
58.8
60.3

51.4
55.9
56.6
58.4

1.0
1.0
1.0
.7

1.1
1.1
1.2
1.2

5.8
10.0
12.2
7.5

11.2
11.0
12.5
3.1

97.1
98.9
100.8
96.0

85.9
87.9
88.2
92.9

262.8
267.9
271.7
274.5

98.7
101.3
102.9
103.6

164.1
166.6
168.8
170.9

7.3
5.9
5.7
3.2

1978:1
II
lll..__
IV P

59.5
59.9
59.7
59.8

57.4
57.8
57.6
57.8

.8
.8
.8
.8

1.3
1.4
1.3
1.3

12.3
12.7
9.0
7.7

2.9
11.3
9.2
11.0

99.1
108.4
109.0
112.6

96.2
97.1
99.7
101.6

272.1
271.9
276.7
280.1

101.2
97.1
100.4
103.3

170.8
174.8
176.3
176.8

-.1
8.7
2.6
6.1

1940
1941
1942 .
1943
1944
1945
1946
1947
1948
1949 .

.
._.

1
Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here.
Source: Department of Commerce, Bureau of Economic Analysis.




185

TABLE B-3.—Implicit pries deflators for gross national product, 1929-78
[Index numbers, 1972 = 100, except as noted; quarterly data seasonally adjusted]
Gross private domestic investment *
Personal consumption

expenditures
Fixed investment

Year or
quarter

Gross
national
product *

Nonresidential

Total

Durable
goods

Nondurable
goods

Services

Total
Total

Structures

1929

32.87

35.8

43.1

38.4

31.6

28.2

28.2

1933

25.14

26.8

31.7

26.8

26.1

22.4

22.8

19.1

1939—.

28.48

30.4

34.9

30.5

29.2

27.6

28.2

22.8

1940
1941
1942
1943
1944
1945
1946....
1947
1948.
1949

29.13
31.34
34.39
36.18
37.03
37.92
43.95
49.70
53.13
52.59

30.8
33.1
36.7
40.0
42.3
44.0
47.7
52.8
55.9
55.7

35.7
39.1
42.1
45.0
49.5
53.7
61.1
66.8
69.1
69.1

30.9
33.6
39.1
43.7
46.2
47.8
52.1
58.7
62.3
60.3

29.5
30.8
32.4
34.2
36.1
37.3
38.9
41.7
44.4
46.1

28.5
30.6
33.4
35.6
36.9
37.1
41.3
48.9
53.6
54.8

29.1
30.9
33.8
35.7
36.6
36.6
39.9
46.8
51.3
52.8

23.1
24.7
28.1
32.0
33.4
33.6
36.3
43.7
48.4
48.0

1950...
1951..
1952
1953
1954.
1955
1956...
1957
1958
1959

53.64
57.27
58.00
58.88
59.69
60,98
62.90
65.02
66.06
67.52

56.8
60.5
61.9
63.1
63.6
64.2
65.5
67.6
69.1
70.4

70.8
74.7
74.8
75.5
73.2
74.0
76.0
79.2
79.4
81.9

60.7
65.8
66.6
66.3
66.6
66.3
67.3
69.4
71.0
71.4

47.4
49.9
52.6
55.4
57.2
58.5
60.2
62.2
64.2
66.0

56.5
60.8
62.1
62.9
63.4
64.8
68.3
70.9
70.8
71.6

54.3
58.9
59.9
61.0
61.4
62.6
67.0
70.7
70.6
72.0

48.8
54.7
55.8
56.8
55.9
57.0
61.8
64.4
63.3
63.6

1960
1961
1962
1963
1964
1965
1966
1967
1968...
1969

68.67
69.28
70.55
71.59
72.71
74.32
76.76
79.02
82.57
86.72

71.7
72.5
73.6
74.7
75.7
77.1
79.3
81.3
84.6
88.5

82.1
82.7
83.9
84.8
85.7
85.6
85.7
87.4
90.7
93.1

72.6
73.3
73.9
74.9
75.8
77.3
80.1
81.9
85.3
89.4

68.0
69.1
70.4
71.7
72.8
74.3
76.5
78.8
82.0
86.1

71.9
71.6
72.0
72.1
72.8
73.8
76.2
78.7
82.1
86.9

72.2
71.8
72.3
72.9
73.6
74.5
76.8
79.3
82.6
86.6

63.1
62.7
63.0
63.5
64.4
65.9
68.8
71.8
75.3
81.1

1970.
1971
1972
1973
1974
1975
1976
1977
1978 v

91.36
96.02
100.00
105.80
116.02
127.15
133.76
141.61
152.09

92.5
96.6
100.0
105.5
116.9
126.4
133.1
140.7
150.3

95.5
99.0
100.0
101.6
108.4
117.7
124.4
129.5
136.6

93.6
96.6
100.0
107.9
123.8
133.4
138.2
145.0
155.0

90.5
95.8
100.0
104.7
113.6
123.2
131.6
141.0
151.3

91.1
95.9
100.0
106.0
117.1
132.3
139.6
150.6
164.7

91.3
96.4
100.0
103.8
115.3
132.2
138.4
146.7
158.7

88.0
94.4
100.0
107.8
128.1
144.9
149.5
159.6
174.8

1S76:1
II
III
IV

131.40
132.92
134.39
136.28

130.7
132.1
133.8
135.6

122.0
123.6
125.0
126.8

136.8
137.4
138.7
139.9

128.4
130.3
132.5
134.9

136.7
138.5
140.3
142.6

136.6
137.7
138.9
140.5

147.4
149.4
149.7
151.4

1977:1
II
III
IV

138.27
140. 86
142. 63
144. 56

137.9
139.9
141.6
143.2

128.4
128.9
129.5
130.9

142.4
144.7
145.7
147.0

137.4
139.7
142.3
144.4

145.4
148.9
151.9
155.9

142.5
145.0
147.9
151.2

154.9
158.3
160.2
164.5

1978:1
II
III

147.10
150.98
153.52
156. 54

146.2
149.3
151.6
154.1

133.1
135.7
137.8
139.5

150.4
154.4
156.2
158.9

147.1
149.9
152.6
155.3

158.2
162.3
1K7.1
170.8

153.6
156.7
160.6
163.7

167.2
171.8
177.3
182.0

See next page for continuation of table.




186

24.1

Producers'
durable
equipment

TABLE B-3.—Implicit price deflators for gross national product, 1929-78—Continued
[Index numbers, 1972=100, except as noted; quarterly data seasonally adjusted]
Gross private domestic
investment1—continued
Fixed investment—continued
Year or
quarter

Exports and
imports of
goods and
services i

Percent change
from preceding
period 2

Government purchases
of goods and services

Residential
ProExFarm ducers' ports
durstruc- able
tures equipment

Imports

Total

Federal

State
and
local

Gross
domestic
prodGross
uct
nationa
product
implicit
price
deflator

Gross
domestic
product
implicit
price
deflator

Total

Nonfarm
structures

1929

28.2

27.8

28.6

77.2

45.0

43.8

21.6

20.5

21.8

1933.

20.7

19.8

19.5

58.8

25.5

22.1

19.3

19.4

19.2

25.2

-2.1

-2.0

1939

26.6

26.3

23.4

61.1

33.3

29.6

21.5

22.7

20.7

28.5

- 7

_ 7

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

27.4
29.9
32.4
34.9
38.1
40.8
44.6
53.7
58.1
58.7

27.2
29.7
31.8
34.3
37.3
40.0
43.9
53.0
57.4
58.1

23.6
26.6
30.7
35.7
40.8
42.9
46.6
52.8
57.3
58.0

59.6
63.8
71.3
71.4
75.0
84.6
95.2
105.6
111.5
107.9

36.8
40.2
46.5
49.2
52.6
53.6
56.7
65.8
69.8
65.5

31.5
33.2
37.4
39.6
41.1
43.6
49.7
60.7
66.1
62.7

21.7
25.5
31.2
32.8
32.3
31.2
29.6
33.8
38.0
39.9

22.7
27.8
33.0
34. 0
33.1
31.9
30.2
35.1
39.4
41.8

21.0
21.7
22.9
23.8
24.9
25.9
28.6
32.5
36.6
38.0

29.1
31.3
34.4
36.2
37.0
37.9
43.9
49.7
53.1
52.6

2 3
76
97
5.2
2 3
2 4
15.9
13 1
6.9
-1.0

2 3
7 6
97
5 2
2 3
2 4
15 9
13 0
6 9
-1.0

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

60.0
64.4
66.4
66.9
67.1
68.7
70.9
71.3
71.2
71.0

59.5
63.8
65.8
66.3
66.6
68.2
70.5
70.8
70.7
70.6

59.4
63.8
65.7
66.2
66.5
68.3
70.6
70.9
70.8
70.8

107.4
114.9
114.6
114.2
112.4
109.1
104.3
103.4
101.9
101.8

64.0
73.1
73.0
71.9
71.2
71.8
73.9
76.4
75.7
75.4

67.8
81.8
79.1
75.8
76.9
76.8
78.3
79.5
76.5
75.7

39.4
45.3
47.4
48.5
48.9
49.7
52.1
54.4
56.1
57.2

39.9
47.1
48.9
50.2
50.4
51.1
53.4
55.7
58.1
58.7

39.0
42.4
44.2
45.1
46.6
47.8
50.4
52.8
53.8
55.4

53.6
57.2
57.9
58.8
59.6
60.9
62.8
65.0
66.0
67.5

2.0
6.8
1.3
1.5
1.4
2.2
3.2
3.4
1.6
2.2

2 0
6.7
1 3
1 5
1.4
2.2
3 2
3.4
1.6
2 2

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

71.4
71.3
71.5
70.9
71.2
72.3
74.6
77.0
80.7
87.7

70.9
70.9
71.1
70.5
70.8
72.0
74.2
76.7
80.4
87.5

71.2
70.7
71.3
70.7
71.0
72.3
74.3
76.7
80.5
87.5

100.8
99.1
96.8
95.3
94.3
92.1
90.8
91.0
93.2
95.2

77.1
78.0
77.3
77.5
78.3
80.5
82.8
84.0
85.3
87.9

76.7
76.1
74.5
75.6
77.1
78.0
79.7
80.1
80.9
83.3

58.0
59.2
61.1
62.6
64.0
66.0
69.2
72.6
76.7
81.0

59.1
60.0
61.8
63.3
64.8
67.0
70.1
72.6
76.4
80.0

56.8
58.3
60.3
61.9
63.3
65.1
68.4
72.5
76.9
81.9

68.6
69.2
70.5
71.6
72.7
74.3
76.8
79.0
82.6
86.8

1.7
.9
1.8
1.5
1.6
2.2
3.3
2.9
4.5
5.0

1.7
.9
1.9
1.5
1.6
2.2
3.3
3.0
4.5
5.1

1970
1971
1972
.
1973
1974
1975
1976 .
1977
1978 P . . .

90.6
94.9
. . 100.0
110.8
122.3
132.8
-. 142.5
159.4
178.7

90.4
94.8
100.0
111.0
122.7
133.2
143.0
160.0
179.8

90.5
95.0
100.0
110.7
122.7
132.9
142.6
159.7
178.9

97.5
99.3
100.0
100.1
105.3
116.2
122.2
126.2
132.2

93.1
96.6
100.0
116.2
148.3
163.6
170.1
178.7
191.2

89.1
93.5
100.0
118.2
171.0
188.0
193.5
210.3
219.9

87.5
93.7
100.0
106.7
117.5
128.9
136.8
146.3
157.8

86.4
92.6
100.0
105.8
115.9
127.5
134.4
142.7
153.2

88.3
94.5
100.0
107.3
118.4
129.7
138.1
148.5
160.4

91.4
96.0
100.0
105.7
115.6
126.8
133.3
141.1
151.5

5.4
5.1
4.1
5.8
9.7
9.6
5.2
5.9
7.4

5.3
5.1
4.1
5.7
9.3
9.7
5.2
5.8
7.4

1976: 1
II
III
IV

137.2
140.7
143.8
147.6

137.6
141.1
144.2
148.1

137.2
141.0
144.4
148.0

120.2
121.8
123.0
123.6

165.7
168.7
171.7
174.0

187.8
190.7
197.0
197.8

134.0
135.7
137.3
140.2

132.1
133.3
134.2
138.0

135.0
137.1
139.1
141.5

131.0
132.5
133.9
135.8

3.9
4.7
4.5
5.7

3.6
4.8
4.4
5.8

1977: 1
II
Ill
IV

152.3
157.6
160.6
166.1

152.9
158.2
161.3
166.9

153.3
158.7
161.8
167.5

124.3
126.2
126.6
127.5

176.1
180.0
179.4
179.2

208.9
209.3
212.9
210.2

142.7
145.1
147.1
150.3

140.1
141.1
142.7
146.9

144.3
147.6
149.7
152.3

137.7
140.3
142.1
144.1

6.0
7.7
5.1
5.5

5.7
7.7
5.1
5.8

1978: 1
II
Ill
IV P . . . .

168.6
175.7
182.6
187.9

169.5
176.7
183.7
189.1

168.9
176.5
182.8
186.9

128.8
131.8
133.3
135.1

183.3
189.4
192.8
198.4

213.8
217.2
221.5
226.8

153.2
156.2
158.9
162.7

149.6
151.5
153.4
158.2

155.2
158.8
162.1
165.2

146.6
150.4
153.0
156.0

7.2
11.0
6.9
8.1

7.1
10.9
7.0
8.1

...

.

.

-.

32.8

1 Separate deflators are not available for gross private domestic investment, change in business inventories, and net
exports of goods and services.
3
Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here.
Quarterly data are at annual rates.
Source: Department of Commerce, Bureau of Economic Analysis.




187

TABLE B-4.—Implicit price deflators and alternative price measures for gross national product
and gross domestic product^ 1929-78
[Quarterly data seasonally adjusted]
Index numbers, 1972=100

Year or
quarter

Gross national
product

Percent change from preceding period

Gross domestic
product

Gross national product

FixedFixedFixedImplicit weighted Implicit weighted Implicit weighted
price price index price price index price price index
deflator
(1972
deflator
(1972
deflator
(1972
weights)
weights)
weights)

l

Gross domestic product

Chain
price
index

FixedImplicit weighted
price price index
(1972
deflator
weights)

Chain
price
index

1929

32.87

32.8

1933

25.14

25.2

-2.1

-2.0

1939

28 48

28.5

-.7

—.7

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

29.13
31.34
34 39
36.18
37.03
37.92
43.95
49.70
53.13
52.59

29.1
31.3
34.4
36.2
37.0
37.9
43.9
49.7
53.1
52.6

2.3
7.6
9.7
5.2
2.3
2.4
15.9
13.1
6.9
-1.0

2.3
7.6
9.7
5.2
2.3
2.4
15.9
13.0
6.9
-1.0

1950
1951
1952.
1953
1954
1955
1956.......
1957
1958
1959

53.64
57.27
58.00
58.88
59.69
60.98
62.90
65.02
66.06
67.52

68.1
69.1

53.6
57.2
57.9
58.8
59.6
60.9
62.8
65.0
66.0
67.5

68.0
69.1

2.0
6.8
1.3
1.5
1.4
2.2
3.2
3.4
1.6
2.2

1.6

1.6

2.0
6.7
1.3
1.5
14
2.2
3.2
3.4
1.6
2.2

L.6

L.6

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

68.67
69.28
70.55
71.59
72.71
74.32
76.76
79.02
82.57
86.72

70.3
71.1
72.0
72.8
73.7
75.0
77.2
79.5
83.0
87.1

68.6
69.2
70.5
71.6
72.7
74.3
76.8
79.0
82.6
86.8

70.2
71.1
72.0
72.8
73.7
75.0
77.2
79.6
83.0
87.1

1.7
.9
1.8
1.5
1.6
2.2
3.3
2.9
4.5
5.0

1.7
1.1
1.3
1.1
1.2
1.8
2.9
3.0
4.3
5.0

1.7
1.2
1.4
1.3
1.4
1.9
3.1
3.0
4.4
5.0

1.7
.9
1.9
1.5
1.6
2.2
3.3
3.0
4.5
5.1

L.7
1.2
1.3
l.l
L.2
1.8
J.O
J.O
i1.4
5.0

L.7
L.2
L.5
L.3
L4
•L.9
J.I
J.I
1.4
).O

1970
1971
1972
1973
1974
1975
1976
1977
1978 v

91.36
96.02
100.00
105.80
116.02
127.15
133.76
141.61
152.09

91.6
96.1
100.0
186.0
116.8
127.7
134.9
143.3
154,3

91.4
96.0
100.0
105.7
115.6
126.8
133.3
141.1
151.5

91.7
96.2
100.0
105.9
116.4
127.2
134.4
142.8
153.8

5.4
5.1
4.1
5.8
9.7
9.6
5.2
5.9

5.2
4.9
4.0
6.0
10.2
9.3
5.6
6.3

5.3
5.0
4.1
6.0
9.9
9.4
5.6
6.2

5.3
5.1
4.1
5.7
9.3
9.7
5.2
5.8

5.2
1.9
».O
5.9
3.9
a. 3
5.7
I3.3

1976: 1
II
Ill
IV

131.40
132.92
134.39
136.28

132.2
133.8
135.5
137.6

131.0
132.5
133.9
135.8

131.8
133.4
135.0
137.2

3.9
4.7
4.5
5.7

4.3
4.9
5.1
6.4

4.5
5.0
5.2
6.3

3.6
4.8
4.4
5.8

4.2
4.9
5.0
6.5

4.5
5.0
5.1
6.4

1977: 1
II
III....
IV....

138.27
140.86
142.63
144.56

139.9
142.5
144.1
146.5

137.7
140.3
142.1
144.1

139.4
142.0
143.6
146.0

6.0
7.7
5.1
5.5

7.0
7.4
4.7
6.8

6.6
7.3
4.6
6.5

5.7
7.7
5.1
5.8

6.8
7.5
4.6
7.0

6.4
7.4
4.5
6.7

1978: 1
II
Ill—.
IV p . . .

147.10
150.98
153.52
156.54

149.0
152.9
155.8
159.0

146.6
150.4
153.0
156.0

148.5
152.5
155.3
158.6

7.2
11.0
6.9
8.1

7.0
11.0
7.6
8.7

7.1
10.8
7.6
8.5

7.1
10.9
7.0
8.1

7.0
11.0
7.6
8.7

7.1
10.9
7.5
8.4

...

i

5.3
5.0
U
5.9
).6
).4
5.7
5.1

i Changes are based on unrounded data and therefore may differ slightly from those obtained from published Indexes
shown here. Quarterly data are at annual rates.
Source: Department of Commerce, Bureau of Economic Analysis.




188

TABLE B-5.—Gross national product by industry in 1972 dollars•, 1947-77
[Billions of 1972 dollars]

Manufacturing

Year

Agriculture,
ConGross forestry,
strucnaand
tion
tional
product fisheries

Total

TransGovportaerntion, Whole- Finance,
insurment
Non- comDusale
ance, Servand
All
rable durable muni- and
and
ices govern- other i
goods goods cation, retail
real
ment
indus- indus- and
trade estate
entertries
utilitries
prises
ties

468.3
487 7
490.7

26.1
28 0
27.8

22.9
26.5
26.5

114.9
121.5
115.0

68.5
72.0
66.3

46.4
49.6
48.8

38.3
38.7
36.4

76.1
78.0
79.9

55.4
57.1
60.7

55.1
56 7
57.2

68.5
69 0
73.1

11.1
12 0
14.1

533.5
576.5
598.5
621.8
613.7

29.1
28.2
29.0
30.3
31.1

29.3
32.5
33.8
34.8
36.0

131.3
146.0
150.7
161.2
149.6

78.1
89.9
94.3
102.6
91.7

53.2
56.1
56.4
58.6
57.9

39.6
44.2
44.3
45.9
45.6

87.6
88.3
91.1
94.0
94.6

64.4
66.7
71.1
74.0
77.7

59.4
60.6
61.6
63.0
63.1

75.4
89.8
96.6
96.4
94.9

17.5
20.2
20.2
22.3
21.1

1955
1956
1957
1958
1959

654.8
668.8
680.9
679.5
720.4

31.9
31.4
30.8
32 0
30.9

38
40
40
42
45

2
9
9
1
5

165.8
166.9
167.8
153.3
170.7

103.4
102.5
102.9
88.8
100.7

62.4
64.4
64.9
64.5
70.0

49.4
52.3
53.4
52.2
55.7

103.2
106.2
108.0
107.9
115.8

82.0
85.7
89.8
93.5
98.1

67.5
71.1
73.3
75 8
80.3

95.4
97.6
100.1
101.7
103.6

21.4
16.6
16.8
21 0
20.0

1960
1961
1962
1963
1964

736.8
755.3
799 1
830.7
874.4

32.2
32.3
32 3
32.8
32.1

46 1
46.6
48 3
49 8
53.7

172.0
171.2
186.2
201.0
215.7

101.5
99.3
110.1
119.0
129.3

70.5
72.0
76.2
82.1
86.4

58.0
59.1
62.1
65.6
68.9

117.9
119.2
126.7
131.7
139.7

101 9
106 8
115 3
115 3
119.3

82.2
85.4
88.6
92.2
96.9

107.2
111.1
115.1
118.3
122.6

19.4
23.6
24 5
24.1
25.6

1965
1966
1967
1968.
1969

925.9
981.0
1,007.7
1,051.8
1,078.8

33.0
31.3
32.6
32.4
33.0

57.0
59 0
59.5
62.5
61.2

235.1
254.0
254.1
268.4
276.2

144.1
157.0
157.2
165.5
169.1

91.0
97.0
96.9
102.9
107.2

74.3
80.0
82.3
88.2
92.9

148.6
156.9
160.7
170.6
174.5

127.2
131 4
136 5
142.9
149.3

101.2
106.5
112.7
116.3
121.4

127.4
136 4
143.5
148.1
151.8

22.1
25.4
25.7
22.4
18.4

1970
1971
1972
1973
1974

1,075.3
1,107.5
1,171.1
1,235.0
1,217.8

34.3
36.1
35.4
35.9
35.7

57.1
57.1
58.0
58.3
56.0

260.6
264.1
288.8
313.0
291.9

154.4
155.3
171.9
189 0
176.0

106.2
108.7
116.8
124.1
115.9

95.1
97.3
103.6
112.6
112.4

178.4
186.8
201.2
212.0
205.7

152.9
160 6
167.3
171 1
180.3

124.7
126.6
134.5
143 1
144.7

152.0
153.1
154.9
157.3
160.0

20.4
25.7
27.7
31 6
31.1

1975.
1976
1977.

1,202.3
1 271.0
1,332.7

37.0
36 0
38.3

49.8
53.4
56.9

277.1
303 2
322.3

162.2
178 1
190.9

114.9
125 0
131.5

113.5
119 7
124.0

206.2
218 0
227.9

182.3
193 0
204.0

145.2
151 6
159.0

162.7
164 5
165.7

28.6
31 6
34.5

1947
1948
1949
1950.
1951
1952
1953.
1954

_..

1
Mining, rest of the world, and residual (GNP in 1972 dollars measured as the sum of final products less GNP in 1972
dollars measured as the sum of gross product by industry).

Note.—The industry classification is on an establishment basis and is based on the 1972 Standard Industrial Classification.
Source: Department of Commerce, Bureau of Economic Analysis.

189
278-216 O - 79 - 13




T A B L E B-6.—Gross national product by major type of product, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Goods
Year
or
quarter

Gross
national
product

Final
sales

Durable
goods

Total

Inventory
change

Total

Final
sales

Inven- Final
tory
change sales

Nondurable
goods

Inventory
change

Services

Structures

Auto
output

Final Inventory
sales change

1929..

103.4

101.7

1.7

56.1

54.4

1.7

16.1

1.4

38.3

0.3

35.9

1933..

55.8

57.4

-1.6

27.0

28.6

-1.6

5.4

-.5

23.2

-1.1

25.9

1939..

90.8

90.4

.4

49.0

48.6

.4

12.4

.3

36.2

.1

34.3

1940..
1941..
1942-.
1943.1944.1945..
1946..
1947..
1948.1949..

100.0
124.9
158.3
192.0
210.5
212.3
209.6
232.8
259.1
258.0

97.8
120.4
156.5
192.5
211.5
213.4
203.2
233.2
254.4
261.1

2.2

56.0
72.5
93.7
120.4
132.3
128.9
125.3
139.8
154.4
147.7

53.8
68.0
91.9
121.0
133.3
129.9
118.9
140.3
149.7
150.8

2.2
1.8
-.6
-1.0
-1.0
6.4
-.5
4.7
-3.1

15.4
23.8
34.5
54.2
58.5
50.1
31.8
44.1
46.9
48.3

1.2
3.1
1.0
.0
-.6

38.4
44.2
57.4
66.8
74.8
79.8
87.1
96.2
102.8
102.5

1.0
1.4
.7
-.6
-.3
.2
1.1
-1.0

35.7
40.6
50.6
62.9
72.2
76.9
68.6
71.3
76.7
81.9

1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957-.
1958-.
1959..

286.2
330.2
347.2
366.1
366.3
399.3
420.7
442.8
448.9
486.5

279.4
319.9
344.0
365.7
367.8
393.3
416.0
441.4
450.4
481.2

162.4
189.5
194.6
203.1
196.1
214.5
223.3
232.3
228.2
247.4

155.6
179.2
191.5
202.7
197.6
208.5
218.6
231.0
229.7
242.2

6.8
10.3
3.1
.4
-1.5
6.0
4.7
1.3
-1.5
5.2

54.7
62.5
67.6
71.5
69.0
78.2
82.3
87.3
80.5
87.4

2.7

100.9
116.7
123.9
131.2
128.7
130.3
136.3
143.7
149.2
154.8

2.7
3.4
2.0
-.5
1.0
2.9
1.9
.0
1.3
2.5

88.2
102.9
113.1
121.0
125.7
135.3
145.2
157.5
166.9
179.5

35.6
37.8
39.4
42.0
44.5
49.5
52.2
53.0
53.8
59.5

15.5
13.4
12.2
16.3
14.9
21.5
17.2
19.6
14.6
19.6

1960..
1961..
1962..
1963..
1964..
1965..
1966 . .
1967..
1968-.
1969..

506.0
523.3
563.8
594.7
635.7
688.1

502.2
521.1
557.3
588.8
629.9
678.6
738.7
786.2
860.8
926.2

3.8
2.2
6.5
6.0
5.8
9.5
14.3

254.3
256.5
278.0
289.7
309.0
336.6
373.9
387.3
418.9
446.2

250.6
254.3
271.5
283.7
303.2
327.1
359.6
377.2
411.2
436.8

3.8
2.2
6.5
6.0
5.8
9.5
14.3

2.4
-.1
3.6
2.7
3.9
6.6
10.0
5.3
5.0
6.1

161.4
164.1
173.2
178.3
188.2
200.1
220.6
233.7
253.8
267.6

1.4
2.3
2.9
3.3
1.9
2.9

7.7
9.4

89.1
90.2
98.4
105.4
115.0
127.0
139.0
143.5
157.4
169.2

193.2
206.7
221.5
236.2
254.4
272.7
297.7
326.1
356.6
388.7

58.4
60.1
64.3
68.9
72.4
78.8
81.4
82.9
93.0
100.7

21.6
18.1
22.9
25.6
26.5
31.8
31.1
28.8
36.6
36.8

1970..
1971..
1972-1973..
1974..
1975..
1976..
1977..
1978 p.

982.4
1,063.4
1,171.1

978.6
1,057.1

3.8
6.4
9.4

3.8
452.4
6.4
473.5
9.4
516.6
580.9
17.9
8.9
629.7
697.3 -10.7
750.1
10.2
817.0
15.6
901.8
15.7

170.7
179.8
202.1
229.6
240.8
267.9
299.3
332.9
364.8

.0
1.8
6.3
10.9
7.1
-8.9

281.7
293.7
314.5
351.3
389.0
429.4
450.7
484.1

101.6
118.1
134.3
147.2
147.4
144.7
161.9
191.8
226.2

30.6
42.2
45.1
50.7
42.9
45.6
61.4
72.3
77.4

753.0
796.3
868.5
935.5

4.5

1.8
-.6

-1.0
-1.0

6.4
-.5
4.7

-3.1

6.8
10.3

3.1
.4

-1.5

6.0
4.7
1.3

-1.5

5.2

10.1
7.7
9.4

4.5

10.1

1, 887.2
2,106.6

1,161. 7
1, 288.6
1, 404.0
1, 539.6
1, 689.9
1,871.6
2,090.9

-10.7
10.2
15.6
15.7

456.2
479.8
526.0
598.8
638.6
686.6
760.3
832.6
917.5

1976:
1...
II —
IIIIV..

1,649.7
1,685.4
1,715.6
1,749.8

1, 638.3
1,670.1
1,701.0
1, 750.4

11.4
15.4
14.5
-.6

741.9
758.0
768.1
772.9

730.5
742.6
753.6
773.5

11.4
15.4
14.5
-.6

288.4
295.3
303.1
310.4

1977:
1...
II —
III..
IV..

1,806.8
1,867.0
1,916.8
1,958.1

1, 796.5
1,850.0
1, 894.9
1,945.0

10.3
17.0
21.9
13.1

800.2
825.8
844.7
859.6

789.9
808.8
822.8
846.5

10.3
17.0
21.9
13.1

1978:
1...
II —
III..
IV*.

1,992.0
2,087.5
2,136.1
2,210.8

1, 975.3
2,067.4
2,122.5
2,198.4

16.7
20.1
13.6
12.4

861.8
912.2
927.3
968.6

845.1
892.1
913.7
956.2

16.7
20.1
13.6
12.4

1,306.6
lr 412.9
1, 528.8
1, 700.1

17.9
8.9




5.3
1.7
.7

-2.1

4.1
6.9
1.1
.9

-2.5

3.0
2.8
1.3

-2.8

-2.2

4.0

4.3

4.8
2.8
3.3
3.7
4.6

2.9
7.5
8.3
11.8
14.0
8.7
6.1
6.5
15.7
21.7 " 7 . 1
28.0
8.9
28.4 12.0

537.0

4.2

424.6
465.5
510.8
560.5
626.8
697.6
778.0
862.8
962.9

.1
6.5
9.3
5.2

442.1
447.3
450.4
463.1

11.3
8.9
5.3
-5.8

749.7
766.9
787.1
803.1

158.1
160.5
160.3
168.7

60.5
61.9
59.5
63.8

326.1
330.0
334.6
341.1

6.1
9.1
11.9
6.3

463.8
478.8
488.2
505.4

4.2
7.9
10.0
6.8

832.3
850.0
875.3
893.6

174.3
191.3
196.8
204.9

72.7
72.1
70.0
74.5

336.3
365.0
369.8
388.0

14.8
10.8
10.2
10.1

508.7
527.1
543.9
568.2

1.9
9.3
3.4
2.4

926.4
952.0
973.7
999.4

203.8
223.4
235.0
242.8

73.8
79.5
75.8
80.7

Source: Department of Commerce, Bureau of Economic Analysis.

190

-1.3

11.4 ~

5.3
8.4

11.5

3.2
7.0
1.8

-1.8

4.9
7.2

TABLE B-7.—Gross national product by major type of product in 1972 dollars, 1929-78
[Billions of 1972 dollars; quarterly data at seasonally adjusted annual rates]
Goods
Year
or
quarter

Gross
national
product

Final
sales

Durable
goods

Total

Inventory
change

Nondurable
goods

Total

Services

Structures

Auto
output

Final Inven- Final Inven- Final Inventory
tory
tory
sales change sales change sales
change

1929..

314.6

310.0

4.6

143.9

139.3

4.6

40.7

3.5

98.6

1.1

126.8

1933..

222.1

226.9

-4.9

97.2

102.1

-4.9

17.6

-2.1

84.5

-2.8

110.9

14.0

1939..

318.8

317.2

1.6

153.9

152.3

1.6

35.6

.7

116.7

.9

134.6

30.3

1940..
1941..
1942..
1943..
1944..
1945..
1946..
1947..
1948..
1949..

343.3
398.5
460.3
530.6
568.6
560.0
476.9
468.3

6.2
12.0
5.2
.1
-2.3
-3.6
12.2
-.2
5.5
-4.4

171.2
197.4
221.1
263.5
286.8
279.2
238.0
236.8
244.2
239.9

165.0
185.4
215.9
263.4
289.1
282.8
225.8
237.0
238.7
244.3

6.2
12.0
5.2
.1
-2.3
-3.6
12.2
-.2
5.5
-4.4

43.1
57.5
76.0
119.3
135.9
121.9
60.5
74.9
75.6
76.1

3.4
8.2
3.5
.7
-1.8
-3.7
10.8
1.8

121.8
127.9
140.0
144.1
153.2
161.0
165.3
162.1
163.1
168.2

2.8

487.7
490.7

337.1
386.4
455.1
530.5
570.9
563.6
464.7
468.5
482.2
495.1

-.8

139.5
157.6
192.7
240.9
263.6
261.9
199.7
186.9
190.9
197.0

32.6
43.4
46.4
26.3
18.1
18.9
39.2
44.7
52.5
53.7

12.9
14.7
18.9

1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..

533.5
576.5
598.5
621.8
613.7
654.8
668.8
680.9
679.5
720.4

522.9
562.8
594.2
620.3
615.8
647.1
663.0
679.4
681.3
714.0

10.6
13.7

261.5
283.1
292.3
306.9
292.2
316.3
320.9
321.8
312.0
332.5

250.9
269.4
288.0
305.4
294.4
308.6
315.1
320.3
313.8
326.1

10.6
13.7

84.4
92.6
100.6
105.9
101.7
112.9
113.5
114.6
104.8
110.6

6.3
9.8
1.8
1.4

4.2
3.9
2.5
.1
1.4
3.5
2.1
.0
1.6
3.2

206.0
229.0
240.6
245.5
247.0
257.6
267.2
279.3
285.6
298.0

66.0
64.4
65.6
69.4
74.5
80.9
80.7
79.9
81.9
89.9

24.0
20.4
18.4
23.9
22.9
31.3
24.4
25.8
20.0
24.7

I960..
1961..
1962..
1963..
1964..
1965
1966"
1967..
1968..
1969..

736.8
755.3
799.1
830.7
874.4
925 9
981.0

332.8
335.2
353.8
365.2
386.7
410.2
438.9
449.9
472.4
481.7

1.5
3.0

11.3

337.1
338.1
362.0
373.0
394.0
421.5
455.6
461.9
481.1
492.3

4.4
2.9
8.1
7.8
7.3
11.3

L, 007.7
1,051.8
1,078.8

732.4
752.4
791.0
823.0
867.1
914 6
964.3
995.7
1,043.1
1,068.2

310.7
325.5
339.9
354.0
372.2
389.1
410.2
432.7
449.9
465.4

89.0
91.7
97.2
103.8
108.1
115.3
115.2
113.1
120.9
121.1

26.8
22.6
27.5
30.3
31.1
V 4
36.7
33.5
40.6
40.0

1970..
1971..
1972..
1973..
1974
19751"
1976._
1977_.
1978 v.

1,075.3
1,107.5
1,171.1
1,235.0
L 217 8
,'202.3
,271.0
L, 332.7
1,385.1

1,071.0
1,100.9

1,161.7
1,218.5
1 209 9
1,212.1

4.3
6.6
9.4

483.4
491.6
526.0
569.0
554.2
538.3
576.5
608.4
629.1

479.1
484.9
516.6
552.5
546.2
548.0
569.8
599.6
618.7

4.3
6.6
9.4

477.2
491.1
510.8
531.1
546.4
560.1
583.0
602.9
627.2

114.6
124.9
134.3
134.8
117.2
104.0
111.6
121.3
128.8

32.5
42.1
45.1
50.6
40 1
39.4
49.2
55.2
55.2

1976:
I...
II—
III..
IV._

, 255.5
, 268.0
1,276.5
, 284.0

1,248.0
1,258.0
1,267.3
1,284.2

10.1

568.5
576.3
580.8
580.3

561.0
566.2
571.5
580.5

-3.7

575.5
580.5
585.8
589.9

111.5
111.2
109.9
113.8

49.7
50.1
47.3
49.7

, 306.7
, 325.5
, 343.9

10.0
12.2
7.5

596.0
604.4
613.3
620.1

590.1

, 354.5

1,300.9
1, 315. 5
1,331.7
1,347.1

594.3
601.1
612.7

1,354.2
II— 1,382.6
IIL. 1,391.4
IV ». 1,412.2

1,341.8
1,369.9
1,382.4
1,404. 5

12.3
12.7
9.0
7.7

611.8
627.7
630.2
646.8

599.4
615.0
621.2
639.1

1977:
l._.

II—
III..
IV_.
1978:
1...

1,264.4
1,323.8
1,374.7

4.3
1.5

-2.2

7.7

5.8
1.5

-1.8

6.5
4.4

2.9
8.1
7.8
7.3

16.7
12.0
8.7
10.6

16.5
80
-9.8
6.7
8.9

10.4
7.5
9.3
-.2
5.8

4.3

1.5
-2.2
7.7

5.8
1.5

-1.8
6.5

16.7
12.0
8.7

10.6

16.5
8.0

-9.8

6.7
8.9

10.4

111.6
112.6
121.1
128.4
139.2
152.6
165.2
166.6
175.7
183.3
179.1
181.5
202.1
225.9
222.7
219.8
232.5
248.0
257.8

-3.6

4.2

3.7
1.5
-3.4
3.3
2.9
-.1

4.4
3.4

5.0

8.0

11.9
6.4

5.6
6.8
.1
1.8
6.2

10.6
5.6

-7.0

3.6
5.8

7.2

166.5
176.8
187.4
199.5
192.7
195.7
201.6
205.6
209.0
215.5
221.2
222.7
232.7
236.8
247.5
257.7
273.7
283.3
296.7
298.4
300.0
303.4
314.5
326.6
323.5
328.2
337.3
351.6
360.8

-2.0

4.0

3.7
4.3
2.3
3.3
4.8

5.6

3.2
3.7

4.2
4.8
3.2
5.9
2.4

-2.7

3.0
3.1
3.3

-.2

228.7
231.1
234.0
236.2

5.8
10.0
12.2
7.5

246.5
246.9
248.0
250.5

4.4
6.1

343.6
347.5
353.1
362.1

1.4
3.9
4.3
2.9

596.3
598.8
606.9
609.6

114.5
122.3
123.7
124.8

56.2
55.6
53.7
55.4

12.3
12.7

245.0
260.2
258.7
267.6

9.6
6.4

354.5
354.8
362.5
371.5

2.7
6.3
2.9
1.1

620.1
625.6
629.7
633.3

122.3
129.3
131.6
132.2

54.1
57.0
53.5
56.3

7.5

10.1
9.3

9.0

7.7

Source: Department of Commerce, Bureau of Economic Analysis.




1.5

-3.7

3.8
1.7
-.6
-.5
.1
1.3

44.0 ~

191

.2
4.6
6.3
3.5

332.3
335.2
337.4
344.3

7.9
4.6

6.1
6.6

7.3
5.4
3.0

TABLE B-8.—Gross national product: Receipts and expenditures by major
economic groups, 1929-78
[Billions of dollars]
Persons

Government

Disposable personal
income
Year or
quarter
Total i

Net receipts
Expenditures
Surplus
or
PerPerdeficit
Equals: sonal sonal
Tax
Less:
Less: Equals: <-),
Less: Total
conand
naInter- exclud- sump- saving non- Trans- Equals: Total Trans- Purfers,
or
fers, chases tional
ing inest
tion
interdistax
Net
exinterof
interest
paid
exest
rerependi- est,
goods
come
paid
and
pendi- saving ceipts and
ceipts tures
and
and
and
and
transtures
or ac- subsubservprodfers 2 transcruals sidies 3
sidies3
ices
uct acfers
counts

1929

82.3

1.9

80.4

77.3

3.1

11.3

1.5

9.8

10.3

1.5

8.8

1.0

1933..

45.5

.7

44.8

45.8 - 1 . 0

9.3

2.5

6.9

10.7

2.5

8.2

-1.4

69.9

.9

69.1

67.0

2.1

15.4

4.1

11.3

17.6

4.1

13.5

-2.2

75.2
92.0
116.5
132.9
145.5
149.0
158.6
168.4
187.4
187.1

1.0
1.1
.8
.7
.8
.9
1.4
1.7
2.1
2.3

74.3
91.0
115.6
132.1
144.6
148.0
157.3
166.7
185.3
184.9

71.0
80.8
88.6
99.4
108.2
119.5
143.8
161.7
174.7
178.1

3.3
10.2
27.0
32.7
36.5
28.5
13.4
4.9
10.6
6.7

17.7
25.0
32.6
49.2
51.2
53.2
51.0
56.9
58.9
55.9

4.3
3.8
4.2
4.4
6.0
9.9
18.0
17.1
18.5
20.9

13.5
21.2
28.4
44.7
45.2
43.3
33.0
39.9
40.4
35.0

18.4
28.8
64.0
93.3
103.0
92.7
45.6
42.5
50.5
59.3

4.3
3.8
4.2
4.4
6.0
9.9
18.0
17.1
18.5
20.9

14.2
24.9
59.8
88.9
97.0
82.8
27.5
25.5
32.0
38.4

-.7
-3.8
-31.4
-44.1
-51.8
-39.5
5.4
14.4
8.4
-3.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959..

205.5
224.8
236.4
250.7
255.7
273.4
291.3
306.9
317.1
336.1

2.7
2.9
3.3
4.0
4.3
4.8
5.6
5.9
6.0
6.5

202.8
221.9
233.1
246.6
251.4
268.6
285.7
301.0
311.1
329.6

192.0
207.1
217.1
229.7
235.8
253.7
266.0
280.4
289.5
310.8

10.8
14.8
16.0
17.0
15.6
14.9
19.7
20.6
21.7
18.8

69.0
85.2
90.1
94.6
89.9
101.1
109.7
116.2
115.0
129.4

22.5
19.1
18.3
19.0
21.3
23.0
25.1
28.2
32.6
33.4

46.5
66.2
71.8
75.6
68.6
78.1
84.6
88.0
82.4
96.0

61.0
79.2
93.9
101.6
97.0
98.0
104.5
115.3
127.6
131.0

22.5
19.1
18.3
19.0
21.3
23.0
25.1
28.2
32.6
33.4

38.5
60.1
75.6
82.5
75.8
75.0
79.4
87.1
95.0
97.6

8.0
6.1
-3.8
-6.9
-7.1
3.1
5.2
.9
-12.6
-1.6

1960
1961
1962..
1963
1964
1965.
1966
. .
1967
1968
1969

349.4
362.9
383.9
402.8
437.0
472.2
510.4
544.5
588.1
630.4

7.4
7.7
8.3
9.4
10.5
11.7
12.6
13.3
14.1
15.6

342.0
355.2
375.6
393.4
426.5
460.4
497.8
531.2
574.0
614.8

324.9
335.0
355.2
374.6
400.4
430.2
464.8
490.4
535.9
579.7

17.1
20.2
20.4
18.8
26.1
30.3
33.0
40.9
38.1
35.1

139.5
144.8
156.7
168.5
174.0
188.3
212.3
228.2
263.4
296.3

36.1
40.9
42.4
44.1
46.5
49.5
54.9
62.2
70.2
77.8

103.4
103.9
114.3
124.4
127.5
138.9
157.4
166.0
193.2
218.5

136.4
149.1
160.5
167.8
176.3
187.8
213.6
242.4
268.9
285.6

36.1
40.9
42.4
44.1
46.5
49.5
54.9
62.2
70.2
77.8

100.3
108.2
118.0
123.7
129.8
138.4
158.7
180.2
198.7
207.9

3.1
-4.3
-3.8
.7
-2.3
.5
-1.3
-14.2
-5.5
10.7

1970
1971
1972
1973
1974 .
1975
1976
1977 ___.
1978*

685.9
742.8
801.3
901.7
984.6
1, 086.7
1,184.4
1, 303.0
1,451.2

16.6
17.3
18.9
21.5
23.4
23.9
26.1
29.6
34.8

618.8
669.4
725.5
668.2
782.4
733.0
880.2
809.9
961.3
889.6
1,062.7
979.1
1,158.3 1,090.2
1,273.4 1, 206.5
1,416.4 1, 339.7

50.6
57.3
49.4
70.3
71.7
83.6
68.0
66.9
76.7

302.6
322.2
367.4
411.2
455.1
468.5
537.2
603.3
682.7

93.1
106.8
117.8
135.4
155.6
194.4
210.9
227.9
250.0

209.5
215.5
249.6
275.8
299.5
274.1
326.3
375.4
432.7

311.9
340.5
370.9
404.9
458.2
532.8
570.4
621.8
684.2

93.1
106.8
117.8
135.4
155.6
194.4
210.9
227.9
250.0

218.9
233.7
253.1
269.5
302.7
338.4
359.5
394.0
434.2

-9.4
-18.3
-3.5
6.3
-3.2
-64.4
-33.2
-18.6
-1.5

1939 .

.

1940
1941
1942
1943
1944
1945.
1946
1947
1948
1949

. .

...

See next page for continuation of table.




192

TABLE B-8.—Gross national product: Receipts and expenditures by major
economic groups,
1929-78—Continued
[Billions of dollars]
Business

International

Net exports of goods
Excess
and services
of
Net
net
Gross Excess transtransGross
pri- of earn- fers and
fers
revate ings or interand
tained
doof inest
interearn- mestic vest- paid to
Less: Equals:
4
Exest
Net
ings invest- ment
Imforor of
exment5
(-) eigners ports ports ports net ex6
( )
ports

Year
or
quarter

Total
income
or receipts

Statistical
discrepancy

Gross
national
product
or expenditure

(_)7

11.7

16.2

-4.4

0.4

7.0

5.9

1.1

-0.7

102.3

1.1

1933

3.2

1.4

1.8

.2

2.4

2.0

.4

-.2

55.1

.7

55.8

1939.

8.8

9.3

-.5

.2

4.4

3.4

1.1

-.9

89.4

1.4

90.8

1940
1941.
1942
1943
1944
1945
1946
1947
1948
1949

10.9
12.0
14.8
16.7
17.7
16.0
15.8
21.8
30.0
31.4

13.1
17.9
9.9
5.8
7.2
10.6
30.7
34.0
45.9
35.3

-2.2
-5.8
4.9

10.9
10.5
5.4
-14.9
-12.1
-15.8
-3.8

.2
.2
.2
.2
.3
.8
2.9
2.6
4.5
5.6

54
5.9
4.8
4.4
5.3
7.2
14.8
19.8
16.9
15.9

3.6
4.6
4.8
6.5
7.1
7.8
7.2
8.2
10.4
9.6

1.7
1.3
.0
-2 0
-1.8
-.6
76
11.6
6.5
6.2

-1.5
-1.1
.2
2.2
2.1
1.4
-4.6
-9.0
-2.0
-.6

98 9
124 3
159.1
193 8
207 8
208.2
208 9
231 0
260.3
257 0

1 i
5
-.8
—1 8
27
4.1
7
1 8
-1.2
10

100 0
124 9
158.3
192 0
210 5
212.3
209 6
232.8
259.1
258.0

1950
1951
1952
1953
1954
1955
1956
1957
1958 _.
1959

30.8
34.6
37.1
38.0
41.0
47.5
48.7
51.1
51.3
58.5

53.8
59.2
52.1
53.3
52.7
68.4
71.0
69.2
61.9
77.6

-23.0
-24.6
-15.1
-15.3
-11.7
-20.8
-22.3
-18.1
-10.6
-19.0

4.0
3.5
2.6
2.5
2.3
2.5
2.5
2.5
2.4
2.6

13.9
18.9
18.2
17.1
18 0
20.0
23.9
26.7
23.3
23.7

12.0
15.1
15.8
16.6
16 0
17.8
19.6
20.7
20.8
23.2

1.9
3.8
24
.6
20
2.2
4.3
6.1
2.5
.6

2.1
-.3
.2
1.9
.3
.3
-1.8
-3.6
i
2.0

284 1
326.2
344 5
362 8
363 3
396 8
421. 5
442.6
447.2
486.7

286 2
330.2
347 2
366.1
366 3
399.3
420.7
442.8
448.9
486.5

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

58.7
59.8
67.0
70.1
76.2
84.6
91.2
93.7
98.2
101.7

76.4
74.3
85.2
90.2
96.6
112.0
124.5
120.8
131.5
146.2

-17.7
-14.5
-18.2
-20.1
-20.4
-27.4
-33.3
-27.1
-33.3
-44.5

2.6
2.8
3.0
3.1
3.2
3.3
3.5
3.7
3.6
3.8

27.6
28.9
30.6
32.7
37.4
39.5
42.8
45.6
49.9
54.7

23.2
23.1
25.2
26.4
28.4
32.0
37.7
40.6
47.7
52.9

4.4
5.8
5.4
6.3
8.9
7.6
5.1
4.9
2.3
1.8

-1.7
-3.0
-2.4
-3.2
-5.7
-4.3
-1.6
-1.2
1.4
2.0

506.7
521 7
559.8
591.0
633.5
687.2
749.8
794 6
869 1
938.8

20
4.0
27
3.3
30
25
-.8
.2
1.7
-.2
y
1.6
4.0
3.7
2.2
.9
3.2
1.7
-.6
-3.3

506.0
523.3
563.8
594.7
635.7
688.1
753.0
796.3
868.5
935.5

1970
1971
1972
1973
1974..
1975
1976
1977..
1978 P

101.4
115.7
131.0
140.2
137.9
176 2
202.6
223.9
243.6

140.8 - 3 9 . 5
160.0 - 4 4 . 3
188.3 - 5 7 . 3
220.0 - 7 9 . 8
214.6 - 7 6 . 7
190 9 — 14 8
243.0 - 4 0 . 3
297.8 - 7 4 . 0
344.5 -100.9

4.3
5.5
6.5
7.7
8.5
85
8.7
9.7
13.0

62.5
65.6
72.7
101.6
137.9
147 3
163 2
175.5
205.2

58.5
64.0
75.9
94.4
131.9
126 9
155 7
186.6
217.0

3.9
1.6
-3.3
7.1
6.0
20 4
74
-11.1
-11.8

.3
3.9
9.8
.6
2.5
11 9
1.2
20.9
24.8

984.5
1,062.1
1.169.4
1,303.9
1,407.1
1 521 5
1, 695.9
1, 882.4
2,105. 7

-2.1
1.3
1.7
2.6
5.8
74
4.2
4.7
.9

982.4
1,063.4
1,171.1
1,306.6
1,412.9
1 528 8
1, 700.1
1, 887.2
2,106.6

1929

..

-------

1
3
3

103.4

Personal income less personal tax and nontax payments (fines, penalties, etc.).
Interest paid by consumers to business and net personal transfer payments to foreigners.
Government transfer payments to persons and foreigners, net interest paid by government, subsidies less current
surplus of government enterprises, and disbursements less wage accruals.
* Undistributed corporate profits with inventory valuation and capital consumption adjustments, corporate and noncorporate capital consumption allowances with capital consumption adjustment, and private wage accruals less
disbursements.
5 See Table B-14.
6
Net transfers to foreigners by persons and government and interest paid by government to foreigners.
7
Capital grants received by the United States (net) less net foreign investment.
Source: Department ot Commerce, Bureau of Economic Analysis.




193

T A B L E B-9.—Gross national product by sector, 1929- 78
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross domestic product
Business
Gross
national
product

Year or quarter

Total
Total

Nonfarm *

Government *

Statistical
Farm discrepancy

Households
and
institutions

Total

Federal

State
and
local

Rest
of the
world

Percent
change
from
preceding
period,
gross
domestic
product?

1929

103.4

102.6

95.4

84.7

9.7

1.1

2.9

4.3

0.9

3.5

0.8

1933

55.8

55.5

49.1

43.8

4.6

.7

1.7

4.7

1.2

3.5

.3

1939

90.8

90.5

80.6

72.9

6.3

1.4

2.3

7.6

3.4

4.2

.3

7.0

1940
1941
1942

100.0
124.9
158.3
192.0
210.5
212.3
209.6
232.8
259.1
258.0

99.6
124.5
157.9
191.6
210.1
212.0
209.0
231.8
257.9
256.9

89.4
112.6
139.9
162.8
174.2
172.8
183.8
210.0
234.9
231.5

81.8
103.1
127.7
149.3
156.2
152.7
164.2
188.0
212.7
211.7

6.5
1.1
.5
8.9
13.0 - . 8
15.3 - 1 . 8
15.3
2.7
4.1
16.0
.7
18.9
1.8
20.2
23.3 - 1 . 2
1.0
18.8

2.4
2.5
2.9
3.2
3.7
4.1
4.5
5.1
5.6
5.9

7.8

3.5
5.0

4.3
4.4

.4
.4
.4
.3
.4

10 1
25.0
26 8
21.4
96

286.2
330.2
347.2
366.1
366.3
399.3
420.7
442.8
448.9
486.5

284.8
328.7
345.7
364.6
364.5
397.3
418.5
440.5
446.6
484.0

257.5
294.4
307.3
324.9
323.9
354.0
372.1
390.8
393.1
427.7

235.5
267.4
282.5
301.2
301.3
332.8
354.3
372.3
370.7
408.9

20.0
22.9
22.2
20.3
19.6
18.8
18.6
18.4
20.7
19.1

6.4
6.9
7.2
7.8
8.1
9.1

506.0
523.3
563.8
594.7
635.7
688.1
753.0
796.3
868.5
935.5

503.5
520.2
560.2
591.1
631.4
683.4
748.8
791.8
863.7
931.1

442.5
455.3
490.4
516.5
550.7
596.6
651.1
682.7
742.2
798.1

423.0
433.4
465.9
492.2
529.2
573.8
625.0
658.8
720.2
776.2

1970
1971
1972
1973
1974
1975
1976
1977 _
1978 v

982.4
lf 063.4
1,171.1
1,306.6
1,412.9
1, 528.8
1, 700.1
1,887.2
2,106.6

977.8
1, 056.8
1,164.1
1,297.5
1, 399.8
1,518.3
1,685.7
1,869.9
2,087.1

831.5
896.9
989.5
1,108.0
1,193.7
1,289.2
1,436.7
1, 599.3
1, 789.1

807.6
867.9
955.8
1,055.2
1,139.9
1, 232.6
1, 385.6
1,544.0
1, 730. 5

1976- 1

II
III
IV

1,649.7
1,685.4
1,715.6
1,749.8

1977: 1
II
III
IV

1, 806.8
1,867.0
^ 1,916.8
1,958.1

1,789.7
1,849.0
1, 898.7
1, 942.2

1,527.8
1, 582.5
1,626.4
1,660.4

1,992.0
2, 087.5
2,136.1
2,210.8

1,973.8
2,066. 5
2,117.3
2,190.8

1943
1944
1945

1946
1947
1948
1949..
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

.

I960
1961
1962
1963
1964

1965

1966

1967
1968
1969

1978: 1
II
III
IV v

9.4

-4.1

15.1
25.6
32.2
35.2
20.8
16.7
17.4
19.4

10.6
20.9
27.2
29.8
14.6
10.0

4.5
4.7
4.9
5.4
6.2
7.3
8.5
9.4

20.9
27.4
31.2
31.9
32.5
34.2
36.6
39.1
42.1
44.0

10.7
16.2
18.9
18.6
17.8
18.4
19.0
19.6
20.5
20.9

10.1
11.2
12.3
13.3
14.7
15.8
17.6
19.6
21.6
23.1

20.2 - . 7
1.6
20.2
4.0
20.5
3,7
20.5
2.2
19.3
.9
22.0
3.2
22.9
1.7
22.2
22.6 - . 6
25.2 - 3 . 3

13.8 47.1
14.4 50.5
15.5 54.3
16.6 58.0
17.8 62.9
19.2 67.6
21.1 76.5
23.9 85.1
26.4 95.2
29.2 103.7

21.7
22.6
24.1
25.2
27.0
28.3
32.4
35.6
39.3
41.8

25.5
27.9
30.2
32.9
35.9
39.3
44.1
49.5
55.9
61.9

2.5
3.1
3.6
3.7

4.0
3.3

4.3
4.7
4.2
4.6
4.8
4.5

6.8
8.2
9.6
5.7
9.1
7.8

25.9 - 2 . 1
1.3
27.7
1.7
32.0
2.6
50.1
5.8
48.0
7.4
49.2
4.2
46.9
4.7
50.5
57.8
.9

31.6
34.7
37.2
40.5
44.8
50.5
56.5
62.7
71.5

114.7
125.2
137.4
149.1
161.4
178.6
192.5
208.0
226.5

44.7
46.8
50.1
51.9
54.9
59.0
62.4
66.4
71.1

70.0
78.5
87.3
97.1
106.5
119.6
130.1
141.5
155.4

4.6
6.6
7.0
9.1

5.0
8.1

13.1
10.5
14.4
17.3
19.5

1,635.3 1,392.8 1,340.9
1,671.9 1, 425.4 1, 373.5
1, 450.7 1,401.0
1, 734.9 1,478.1 1,427.1

48.5
47.8
45.7
45.6

54.2
55.9
57.0
58.9

188.3
190.7
193.0
197.9

61.5
61.6
61.8
64.6

126.8
129.1
131.2
133.3

14.4
13.5
14.9
14.9

12.7

4.1
4.0
5.3

1,474.9
1,528.0
1,571.6
1,601.6

49.5
50.8
47.7
54.0

3.4
3.7
7.1
4.8

60.0
61.3
63.5
65.9

201.9
205.2
208.9
215.9

65.2
65.4
65.7
69.5

136.8
139.8
143.2
146.4

17.1
18.0
18.1
15.9

13.3
13.9
11.2
9.5

1,684.1 1,628.9
1,771.8 1,714.9
1,817.5 1, 758.5
1,883.1

53.0
56.4
58.6
63.0

2.2
.5
.4

68.8
70.5
72.3
74.4

221.0
224.1
227.5
233.4

69.9
70.1
70.5
74.0

151.1
154.1
157.0
159.4

18.2
21.1
18.8
20.0

6.7
20.1
10.2
14.6

1, 700. 7

2.0
4.0
2.7
3.3
3.0

2.5
-.8
.2

1.7
-.2

3.4

9.8
10.5
11.4
12.3

9.4
8.9

.3

9

.5

-1 4
10 9
11 3

1.3
1.5

10.9
15.4

1.5
1.5
1.8

- 0

.9
1.2
1.1

2.0
2.2
2.3
2.2
2.4

-.4

5.2
5.5

9.0

5 3
5.2
1.4
8.4

77
5.5

10.1
11.5
7.9
8.5

11.0
10.9
11.6
9.3
7.1
8.3

1
Includes compensation of employees in government enterprises.
' Compensation of government employees.
3 Changes are based on unrounded data and therefore may differ slightly from those obtained from data shown here.
See Table B-l for percent changes in gross national product.
Source: Department of Commerce, Bureau of Economic Analysis.




194

TABLE B-10.—Gross national product by sector in 7972 dollars, 1929-78
[Billions of 1972 dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross domestic product

Year or quarter

Business

Gross
lational
iroduct
Total

:esidl

Nonfarm i

Total

Government 3
lest
useof the
lolds
world
and
State
nsti- Total
and
jtions
local

»ercent
change
from
i receding
period,
gross
>mestic
oduct *

1929-.

314.6

312.8

271.1

244.2

!3.8

5.6

26.1

5.2

20.9

1.9

1933—

222.1

220.5

179.7

152.1

!5.0

2.2

28.7

6.6

!2.0

1.6

-2.2

1939—

318.8

317.7

260.6

230.7

25.3

.5.1

42.0

6.9

1.2

7.7

1940—
1941 —
1942—
1943-.
1944—
194519461947—
19481949-

343.3
398.5
460.3
530.6
568.6
560.0
476.9
468.3
487.7
490.7

342.0
397.2
459.2
529.7
567.5
559.2
475.8
466.7
485.9
488.8

282.0
326.3
361.0
385.2
403.5
397.9
384.9
392.8
411.2
409.4

253.8
299.1
336.0
363.9
372.7
366.4
362.2
370.8
387.2
382.1

24.7
26.3
28.7
27.8
27.3
25.8
25.8
23.9
25.7
25.5

[6.1 43.9 18.6
[5.9 55.1 29.6
[6.4 81.8 56.7
[5.2 .29.3 05.0
5.1 [49.0 25.2
5.0 [46.2 .21.8
5.1 75.8 49.7
.6.0 57.9 29.8
16.7 58.0 29.2
17.3 62.2 31.3

!5.3
!5.5
!5.0
!4.4
!3.8
!4.5
6.1
28.1
28.8
30.9

1.3
1.2
1.1
1.0
1.0
.8
1.1
1.6
1.8
1.9

7.7
16.1
15.6
15.4
7.2
-1.5
-14.9
-1.9
4.1
.6

195019511952—
19531954—
19551956195719581959-

533.5
576.5
598.5
621.8
613.7
654.8
668.8
680.9
679.5
720.4

531.5
574.7
596.7
619.9
611.4
652.2
666.1
678.0
676.5
717.3

448.6
477.2
492.8
515.6
508.0
546.5
557.2
566.0
561.9
600.5

417.9
445.9
460.7
480.6
473.4
512.5
529.3
538.7
528.2
569.6

26.9
25.8
26.3
27.6
28.3
29.2
28.8
28.1
29.3
28.2

4.4
2.7

18.3
18.7
8.6
19.3
19.4
21.4
22.5
23.1
24.2
24.9

64.6
78.8
85.3
85.0
83.9
84.4
86.5
88.9
90.4
91.8

32.7
46.2
51.6
49.6
47.2
45.9
45.6
45.8
44.5
44.5

31.9
32.6
33.7
35.5
36.7
38.4
40.8
43.1
45.8
47.3

1.9
1.8
1.8
2.0
2.3
2.5
2.7
2.9
3.0
3.2

8.7
8.1
3.8
3.9
-1.4
6.7
2.1
1.8
-.2
6.0

196019611962—
19631964—
1965—
1966—
1967—
19681969—

736.8
755.3
799.1
830.7
874.4
925.9
981.0
., 007.7
,051.8
, 078.8

733.6
751.2
794.3
825.8
868.7
919.9
975.6
,001.9
,045.7
, 073.1

611.8
625.6
663.9
692.0
730.4
776.4
822.4
839.8
878.2
901.5

580.5
590.9
629.6
658.4
697.1
746.7
791.1
807.8
850.6
877.4

29.5
29.6
29.5
30.0
29.2
30.1
28.5
29.6
29.4
29.9

1.8
5.1
4.8
3.6
4.0
-.4
2.8
2.4
1.8
5.9

26.8
27.2
28.3
29.0
29.9
31.1
32.8
34.8
35.9
36.6

94.9
98.5
102.1
104.8
108.4
112.4
.20.4
11.1
L31.7
35.0

45.2
46.2
48.3
48.2
48.5
48.7
53.0
57.2
58.1
58.2

49.7
52.3
53.9
56.6
60.0
63.6
67.5
70.0
73.6
76.8

3.2
4.1
4.8
4.9
5.7
6.1
5.4
5.8
6.1
5.7

2.3
2.4
5.7
4.0
5.2
5.9
6.1
2.7
4.4
2.6

1970—
1971..
1972—
1973—
1974—
1975—
1976—
1977—

075.3
107.5
171.1
235.0
217.8
202.3
271.0
332.7
,385.1

1,069.8
1.100.3
, 164.1
,227.4
,211.0
, 197.5
,264.3
i,325.3
,377.2

898.3
927.6
989.5
,050.4
,031.2
,013.6
,077.9
, 135.9
, 183.1

871.3
894.9
955.8
,013.2
993.7
975.3
, 040.1
, 094.2
,
1,146.0

31.1
32.8
32.0
32.3
32.2
33.7
32.2
34.4
32.5

4.2
-.1
1.7
4.9
5.3
4.7
5.6
7.3
4.6

36.3 .35.2
36.6 .36.0
37.2 .37.4
38.1 38.9
38.0 41.9
39.4 .44.4
40.7 45.6
42.2 .47.2
44.6 .49.6

55.2 80.1
52.5 83.5
50.1 87.3
48.3 90.6
48.6 93.3
48.5 96.0
48.5 97.1
48.7 98.4
48.9 100.

5.5
7.2
7.0
7.6
6.8
4.9
6.8
7.3
7.9

-.3
2.8
5.8
5.4
-1.3
-1.1
5.6
4.8
3.9

1976: I . . .
II..
III.
IV.

1,255.5
1,268.0
1,276.5
1,284.0

,248.6
1,261.6
1,269.7
1,277.1

1,063.0
1 075.3
1,083.4
1,090.0

[,025.5
,039.6
1,045.7
1,049.6

34.1
30.5
31.5
32.6

3.4
5.2
6.2
7.8

40.2
40.7
40.6
41.3

L45.4
145.6
145.
145.8

48.3
48.
48.6
48.6

97.0
97.1
97.1
97.1

7.0
6.4
6.8
6.8

8.7
4.2
2.6
2.4

1977:
II
III....
IV

1,306.7 1.299.4 1,112.1 1,072.7
1,325.5 ,317.7 1,129.6 1,088.9
1,343.9 ,336.3 1,146.1 1,102.6
1,354.5 ,347.9 1,155.9 1,112.4

32.9
34.1
34.5
36.1

6.4
6.6
9.0
7.4

41.2
41.7
42.5
43.6

146.1
146.3
147.7
148.4

48.6
48.7
48.8
48.8

97.5
97.6
99.
99.

7.4
7.8
7.6
6.

7.1
5.8
5.8
3.5

1978: I
II
III—
IV*

1,354.2 ,346.6 1,153.5 1,115.4
1,382.6 ,373.9 1,180.0 1,145.2
1,391.4 ,383.9 1,189.3 1,151.8
1,412." ,404.' 1,209.5 1,171.5

32.5
30.5
33.
33.7

5.5
4.3
4.3
4.3

43.8
44.3
44.9
45.3

149.4
149.
149.8
149.

48.8
48.
49.
48.

100.
100.
100.
100.

7.
8.

-.4
8.3
3.0
6.1

1978 v

i.

1
Includes compensation of employees in government enterprises.
2
The difference between gross product in 1972 dollars measured as the sum of final products and that measured as the
sum of gross product by industry.
3
Compensation of government employees.
* Changes are based on unrounded data and therefore may differ slig
See Table B-2 for percent changes in gross national product in 1972 c" "

Source: Department of Commerce, Bureau of Economic Analysis.




195

T A B L E 35—11.—Gross domestic product of nonfinancial corporate business,

1929-78

[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Year
or
quarter

CapGross
ital
itai
doconmessumptic
tion
prod- allowuct
ances
of
with
non- capiTotal
finantal
lai
cial
cor- sumppotion
rate
adbusi- justness
ment

Net domestic product
Domestic income
Corporate profits with inventory valuation and capital
consumption adjustments
Indirect
business
tax,
etc.*

Compensation
Total
of
em- Total
ployees

Profits before tax

Inven- Capital
Net
tory
con- intersump- est
Profits
ation
tion
Total tax
Undis- adadliabilDivi- tribu- justTotal
ity
ment justdends ted
ment
profits
Profits after tax

1929..

50.1

5.4

44.7

3.4

41.3

32.3

7.6

8.4

1.2

7.3

5.2

2.0

0.5

-1.3

1.4

1933..

24.4

4.2

20.2

3.8

16.4

16.7

-2.0

.6

.5

.1

2.0

-l.S

-2.1

-.5

1.7

1939..

43.7

4.7

39.1

5.1

34.0

28.2

4.3

6.1

1.4

4.7

3.3

1.4

-.7

-1.0

1.5

1940
1941
1942"
1943
1944"
1945
1946
1947
1948
1949..

50.4
65 6
82. S
98.7
102.1
95.3
99.3
120 0
137.3
133.5

4.8
5.3
6.0
6.1
6.2
6.4
7.3
9.1
10.7
11.6

45.6
60.4
77.0
92.6
95.9
88.9
92.1
110.9
126.5
121.9

5.5 40.1
6.4 53.9
6.8 70.1
7.3 85.3
8.1 87.8
8.9 80.0
10.1 81.9
11.2 99.8
12.1 114.4
12.6 109.3

31.2
39.8
51.0
62.2
65.1
61.9
67.2
79.1
87.8
85.3

7.5
12.8
17.9
22.0
21.7
17.2
14.1
19.9
25.8
23.0

8.8
16.4
20.1
23.6
22.2
17.8
22.0
29.1
31.8
24.9

2.7
7.5
11.2
13.8
12.6
10.2
8.6
10.8
11.8
9.3

6.1
9.0
8.9
9.8
9.6
7.6
13.4
18.3
20.0
15.6

3.6
4.0
3.8
4.0
4.2
4.2
5.1
5.9
6.5
6.5

2.5
4.9
5.1
5.7
5.4
3.4
8.3
12.4
13.5
9.1

-.2
-2.5
-1.2
-.8
-.3
-.6
-5.3
-5.9
-2.2
1.9

-1.1
-1.1
-1.0
-.8
-.2
-.1
-2.7
-3.3
-3.9
-3.8

1.4
1.3
1.3
1.1
1.0
1.0
.7
.8
.9
1.0

1950
1951
1952.
1953
1954.
1955
1956"
1957
1958
1959..

151.9
174.5
182.3
195 0
191.8
216 7
231*. 6
242 3
236.3
265.7

12.6
14.6
15.7
17.0
17. S
19 ?
21.5
?3 7
24.9
26.0

139.3
159.9
166.7
178.1
174.1
197 5
210.1
218.5
211.4
239.7

14.1
15.2
16.8
18.2
17.4
19 2
20.8
22.4
22.8
25.4

125.2
144.7
149.8
159.9
156.6
178.3
189.2
196.2
188.6
214.4

94.7
110.2
118.3
128.7
126.5
138 5
151.4
159.1
155.9
171.6

29.6
33.4
30.3
29.9
28.6
38.2
36.1
35.0
30.1
39.7

38.5
39.1
33.8
34.9
32.1
42.0
41.8
39.8
33.7
43.1

16.9
21.2
17.8
18.5
15.6
20 2
20.1
19.1
16.2
20.7

21.6
17.9
16.0
16.4
16.4
21.8
21.8
20.7
17.5
22.3

7.9
7.8
7.8
8.0
8.2
9 4
10.1
10.4
10.2
10.8

13.6
10.1
8.1
8.4
8.2
12.4
11.6
10.3
7.3
11.5

-5.0
-1.2
1.0
-1.0
-.3
-1.7
-2.7
-1.5
2
-!5

-3.9
-4.5
-4.4
-4.0
-3.2
-2.1
-3.0
-3.3
-3.4
-2.9

.9
1.1
1.2
1.3
1.6
1 6
1.7
? 2
2.7
3.1

I960..
1961
1962
1963..
1964..
1965
1966..
1967
1968..
1969..

277.3
284 5
311.0
330.9
357.6
392.1
430.7
452 9
498.4
541.8

27.0
27.8
28.7
29.8
31.0
32.8
35.7
39 3
43.0
47 8

250.3
256.7
282.3
301.1
326.6
359.3
394.9
413.6
455.4
494 0

28.3
30.1
33.0
35.6
38.4
41.1
42.9
45.8
51.6
57 1

222.0
226.5
249.2
265.6
288.3
318.2
352.0
367.9
403.8
437 0

181.1
185.1
199.8
210.7
226.3
246.1
273.5
291.9
321.6
357 4

37.4
37.4
44.9
50.0
56.7
66.1
71.2
67.2
72.1
66 4

39.5
39.2
43.7
48.3
54.6
64.4
69.5
65.4
71.9
68 4

19.2
19.5
20.6
22.8
24.0
27.2
29.5
27.7
33.6
33.3

20.3
19.7
23.1
25.5
30.7
37.2
40.0
37 7
38.3
35.1

11.5
11.7
12.7
14.1
15.3
17.2
18.1
18.9
20.7
20 7

8.7
8.0
10.3
11.4
15.4
20.0
21.9
18.8
17.6
14.4

.3 - 2 . 3
.1 - 1 . 8
1.0
.1
1.9
-.2
2.6
-.5
3.6
-1.9
3.8
-2.1
3.6
-1.7
3.6
-3.4
3.5
-5.5

3.5
3.9
4.5
4.8
5.3
6.1
7.4
8.7
10.1
13 1

1970..
560.6 53.1 507.5 61.8 445.7
1971.. 602.5 58.2 544.2 68.2 476.0
1972..
671.0 62.6 608.4 73.5 534.8
1973..
752.0 68.7 683.3 80.5 602.8
1974..
808.8 80.8 728.0 85.7 642.3
874.1 96.8 777.3 92.6 684.6
1975..
1976..
988.5 106.7 881.8 99.5 782.2
1977.. 1,103.2 115.6 987.6 107.8 879.8
1978*. 1,240.5 126.5 1,114.0 117.9 996.1

377.1 51.6 55.1
399.4 58.7 63.3
443.8 72.0 75.9
503.8 76.0 92.7
552.9 59.5 102.9
576.9 76.9 101.3
650.2 101.3 130.2
732.1 113.9 143.5
833.9 125.1 167.0

27.3
29.9
33.5
39.6
42.7
40.6
53.0
59.0
68.6

27.9
33.3
42.4
53.1
60.2
60.7
77.2
84.5
98.4

19.9
20.0
21.7
23.9
26.0
28.5
33.5
39.1
45.0

8.0
13.3
20.7
29.2
34.2
32.2
43.7
45.5
53.5

-5.1
-5.0
-6.6
-18.6
-40.4
-12.4
-14.5
-14.8
-24.3

1.5
.5
2.7
1.8
-3.0
-11.9
-14.3
-14.7
-17.7

17.0
17.9
19.1
23.1
29.9
30.8
30.7
33.7
37.2

1976:
959.4
l-._
II..
982.0
III.. 999.3
IV.. 1,013.1

103.6
105.4
107.7
109.9

626.3 102.2 127.8
642.9 104.2 134.1
656.9 103.6 131.4
674.8 95.3 127.3

53.1
55.3
53.1
50.4

74.8
78.8
78.3
76.9

28.7
33.2
34.4
37.9

46.1
45.6
43.9
39.0

-11.4
-15.7
-13.3
-17.6

-14.2
-14.3
-14.4
-14.4

30.9
30.7
30.5
30.6

1977:
1...
II..
111..
IV..

111.5 936.9 104.8
114.6 978.7 106.8
117.2 1,007.4 108.7
119.0 1,027.3 110.9

135.4
144.7
145.3
148.5

56.1
59.9
59.4
60.4

79.3
84.8
85.9
88.0

36.4
37.9
39.5
42.5

43.0 - 2 0 . 3
46.9 - 1 6 . 6
46.4 - 7 . 7
45.6 - 1 4 . 8

-14.5
-14.7
-14.8
-15.0

32.0
33.2
34.4
35.4

55.9 84.2
70.1 99.4
70.2 100.1

43.0
42.9
46.2

41.2 - 2 3 . 5 - 1 5 . 7
56.5 - 2 4 . 9 - 1 6 . 8
53.9 - 2 0 . 9 - 1 8 . 9

35.7
36.6
37.6

1, 048.5
1,093.3
1,124.6
1,146.3

855.8 96.4 759.4
876.6 98.9 777.7
891.6 100.5 791.1
903.2 102.5 800.7
832.1
871.9
898.7
916.4

699.5
725.3
741.6
762.2

100.6
113.5
122.8
118.7

1978:
1 . . . 1,161.6 121.6 1, 040.0 113.5 926.5 789.9 100.9 140.0
II.. 1,233.0 124.6 1,108.5 118.0 990.5 826.0 127.8 169.5
III.. 1,260.6 128.6 1,132.0 118.4 1,013.6 845.5 130.6 170.3
1

Indirect business tax and nontax liability plus business transfer payments less subsidies.

Source: Department of Commerce, Bureau of Economic Analysis.




196

TABLE B-12.—Output, costs, and profits of nonfinancial corporate business, 1948-78
[Quarterly data at seasonally adjusted annual rates]
Current-dollar cost and profit per unit of output (dollars I1

Gross domestic
product of
nonfinancial
corporate
business
(billions of
dollars)
Year or
quarter
Cur1972
rent
dollars
dollars

Total
cost
and
profit 2

Capital
consumption
allowances
with
capital
consumption
adjustment

Indirect
business
tax,
etc. 3

CompenNet
sation
inof
terest
employees

Corporate profits with
inventory valuation
and capital
consumption adjustments

Total

Output Compenper
sation
hour of
per
all em- hour of
ployees all em(1972
ployees
dollars) (dollars)

Profits Profits
tax
after
liability tax*

1948.
1949

137.3 229.7
133.5 219.9

0.598
.607

0.047
.053

0.053
.057

0.382
.388

0.004
.004

0.112
.105

0.051
.042

0.061
.062

1950
1951
1952
1953
1954

151.9
174.5
182.3
195.0
191.9

247.5
270.2
275.2
292.0
283.5

.614
.646
.663
.668
.677

.051
.054
.057
.058
.063

.057
.056
.061
.062
.061

.383
.408
.430
.441
.446

.004
.004
.004
.004
.006

.120
.124
.110
.102
.101

.068
.079
.065
.063
.055

.051
.045
.046
.039
.046

1955
1956
1957
1958
1959

216.7
231.6
242.3
236.3
265.7

315.1
324.1
328.3
313.4
347.3

.688
.715
.738
.754
.765

.061
.066
.072
.080
.075

.061
.064
.068
.073
.073

.439
.467
.484
.497
.494

.005
.005
.007
.009
.009

.121
.112
.106
.096
.114

.064
.062
.058
.052
.060

.057
.050
.048
.044
.055

5.110
5.333

2.541
2.635

1960
1961
1962
1963
1964

277.3
284.5
311.0
330.9
357.6

358.9
366.7
399.7
425.4
455.2

.773
.776
.778
.778
.786

.075
.076
.072
.070
.068

.079
.082
.083
.084
.084

.505
.505
.500
.495
.497

.010
.011
.011
.011
.012

.104
.102
.112
.118
.125

.053
.053
.052
.054
.053

.051
.049
.061
.064
.072

5.455
5.634
5.912
6.167
6.427

2.752
2.844
2.956
3.054
3.195

1965
1966
1967
1968
1969,

392.1
430.7
452.9
498.4
541.8

494.6
532.9
545.8
581.6
607.3

.793
.808
.830
.857
.892

.066
.067
.072
.074
.079

.083
.080
.084
.089
.094

.497
.513
.535
.553
.589

.012
.014
.016
.017
.022

.134
.134
.123
.124
.109

.055
.055
.051
.058
.055

.079
.078
.072
.066
.055

6.625
6.777
6.873
7.105
7.139

3.296
3.478
3.676
3.929
4.198

560.6
602.5
671.0
752.0
808.8

600.6
619.3
671.0
720.4
695.0

.933
.973
1.000
1.044
1.164

.088
.094
.093
.095
.116

.103
.110
.110
.112
.123

.628
.645
.661
.699
.796

.028
.029
.028
.032
.043

.086
.095
.107
.105
.086

.045
.048
.050
.055
.061

.041
.046
.057
.050
.024

7.132
7.374
7.595
7.788
7.489

4.478
4.757
5.024
5.446
5.958

1975.
. . 874.1
1976
988.5
1977
1,103. 2
1978 p . . . . 1,240. 5

680.0
730.0
769.3
810.3

1.285
1.354
1.434
1.531

.142
.146
.150
.156

.136
.136
.140
.145

.848
.891
.952
1.029

.045
.042
.044
.046

.113
.139
.148
.154

.060
.073
.077
.085

.053
.066
.071
.070

7.721
7.962
8.057

6.550
7.093
7.667

1976: I . . . . 959.4
II...
982.0
III..
999.3
IV... 1,013.1

722.1
731.7
733.5
732.7

1.329
1.342
1.362
1.383

.143
.144
.147
.150

.133
.135
.137
.140

.867
.879
.896
.921

.043
.042
.042
.042

.142
.142
.141
.130

.073
.076
.072
.069

.068
.067
.069
.061

7.917
7.978
8.006
7.957
7.991

6.867
7.010
7.170
7.329
7.451

1977:1....
II...
IIL.
IV...

750.2
766.9
776.7
783.6

1.398
1.426
1.448
1.463

.149
.149
.151
.152

.140
.139
.140
.142

.932
.946
.955
.973

.043
.043
.044
.045

.134
.148
.158
.151

.075
.078
.076
.077

.059
.070
.082
.074

8.025
8.113
8.103

7.590
7.746
7.881

1978: 1 . 1,161.6 783.6
I I . . . 1, 233.0 811.9
I I I . . 1,260.6 814.9

1.482
1.519
1.547

.155
.153
.158

.145
.145
.145

1.008
1.017
1.038

.046
.045
.046

.129
.157
.160

.071
.086
.086

.057
.071
.074

8.053
8.139
8.165

8.117
8.281
8.471

__

1970
1971
1972.
1973
1974

1, 048.5
1, 093. 3
1,124.6
1,146. 3

1
2

Output is measured by gross domestic product of nonfinancial corporate business in 1972 dollars.
This is equal to the deflator for gross domestic product of nonfinancial corporate business with the decimal point
shifted two places to the left.
3
Indirect business tax and nontax liability plus business transfer payments less subsidies.
* With inventory valuation and capital consumption adjustments.
Sources: Department of Commerce (Bureau of Economic Analysis) and Department of Labor (Bureau of Labor Statistics).




197

TABLE B-13.—Personal consumption expenditures, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Durable goods l

Services I
Household

•e
CO
a.

Personal consumption
expenditures

Year
or
quarter

fNondurable goods *

operation1

§
|
o

1

1

ii

1 1
|

If I I

I
o

1

3
"
O
c

DO

-o

I 1 j I

i
1

1
|

1929

77.3

9.2

3.3

4.7

37.7

19.5

9.4

1.8

1.6

30.3

11.7

4.0

1.2

1933

45.8

3.5

1.1

1.9

22.3

11.5

4.6

1.5

1.2

20.1

8.1

2.8

1.1

1.5

1939

67.0

6.7

2.3

3.4

35.1

19.1

7.1

2.2

1.4

25.2

9.4

3.8

1.4

2.0

71.0
80.8
88.6
99.4
108.2
119.5
143 8
161.7
174* 7
178 1

7.8
9.7
6.9
6.5
6.7
8.0
15 8
20 4
22.9

2.8
3.5

?s n

.8
.8
1.0
4.1
6.6
8.0
10.6

3.8
4.8
4.6
3.9
3.8
4.5
8.4
10.6
11.5
11.3

37.0
42.9
50.8
58.6
64.3
71.9
82.7
90.9
96.6
94.9

20.2
23.4
28.4
33.2
36.7
40.6
47.4
52.3
54.2
52.5

7.5
8.8
11.0
13.4
14.6
16.5
18.2
18.8
20.1
19.3

2.3
2.6
2.1
1.3
1.4
1.8
3.4
4.0
4.8
5.3

1.5
1.7
1.9
2.0
2.0
2.2
2.5
3.0
3.4
3.1

26.2
28.2
31.0
34.3
37.1
39.6
45.3
50.4
55.3
58.2

9.7
10.4
11.2
11.8
12.3
12.8
14.2
16.0
17.9
19.6

4.0
4.3
4.8
5.2
5.9
6.4
6.8
7.5
8.1
8.5

1.5
1.5
1.6
1.7
1.8
1.9
2.1
2.3
2.6
2.9

2.1
2.4
2.7
3.4
3.7
4.0
50
5.3
5.8
5.9

192 0
207.1
217.1
229 7
235 8
253.7
266 0
280 4
289.5
310 8

30.8
29.8
?<H
32.5
31.8
38.6
37.9
39.3
36.8
42.4

13.7
12.2
11.3
13 q
13.0
17.8
15.8
17.2
14.8
18.9

13.7
14.0
14.0
14.6
14.6
16.2
17.1
16.9
16.6
17.8

98.2
108.8
113.9
116.5
118.0
122.9
128.9
135.2
139.8
146.4

53.9
60.4
63.4
64.4
65.4
67.2
69.9
73.6
76.4
79.1

19.6
21.2
21.9
22.1
22.1
23.1
24.1
24.3
24.7
26.1

5.5
6.1
6.8
7.4
7.8
8.6
9.4
10.2
10.6
11.3

3.4 63.0
3.5 68.5
3.4 74.0
3.4 80.6
3.5 86.1
3.8 92.1
3.9 9 9 ?
4.1 105.9
4.2 112.8
4.0 121.9

21.7
24.3
27.0
29.8
32.2
34.3
36.7
39.3
42.0
45.0

9.5
10.4
U. 1
12.0
12.6
14.0
15 2
16.2
17.3
18.5

3.3
3.7
4.1
4.5
5.0
5.5
6.1
6.5
7.1
7.6

6.2
67
7 1
7.8
7 9
8.2
8.6
90
9.3
10.1

324.9
335.0
355.2
374.6
400.4
430.2
464 8
490.4
535.9
579.7

43.1
41.6
46.7
51.4
56.3
62.8
67.7
69.6
80.0
85.5

19.7
17.8
21.5
24.4
26.0
29.8
30.1
29.7
35.8
37.7

17.7
17.9
18.9
20.3
22.8
24.7
27.7
29.5
32.6
35.0

151.1
155.3
161.6
167.1
176.9
188.6
204.7
212.6
230.4
247.0

81.1
83.2
85.5
87.8
92.7
98.9
106.6
109.6
118.3
126.1

26.7
27.4
28.7
29 5
31.9
33.5
36.6
38.2
41.8
45.1

12.0
12.0
12.6
12.9
13.5
14.7
16.0
17.0
18.4
20.4

3.8
3.7
3.7
4.0
4.1
4.4
4.7
4.8
5.0
5.2

130.7
138.1
147.0
156.1
167.1
178.7
192.4
208.1
225.6
247.2

48.1
51.2
54.7
58.0
61.4
65.5
69.5
74.1
79.9
86.8

20.1
21.0
22.2
23.4
24.8
26.3
28.0
30.6
32.7
35.5

8.3
8.8
9.4
9.9
10.4
10.9
11.5
12.2
13.1
14.2

10.7
11?
11.7
12.2
12.8
13.7
15.0
16.2
17.4
18.9

1970
. . . . 618.8 84.9
1971
. .
668.2 97.1
1972
733.0 111.2
809.9 123.7
1973
889.6 122.0
1974
979.1 132.6
1975
1976 . . . 1,090.2 156.6
1,206.5 178.4
1977
1,339.7 197.6
1978 v

34.9
43.8
50.6
55.2
48.0
53.4
69.7
81.5
89.7

36.7
39.4
44.8
50.7
54.9
58.0
63.9
71.3
77.6

264.7
277.7
299.3
333.8
376.3
408.9
442.6
479.0
525.8

136.3
140.6
150.4
168.1
189.8
209.6
225.8
245.2
269.2

46.6
50.5
55.1
61.3
65.3
70.1
75.7
81.5
88.9

22.0
23.4
24.9
27.8
36.4
39.5
42.8
46.5
51.1

5.4
5.5
6.3
7.7
9.6
10.2
12.2
13.5
14.8

269.1
293.4
322.4
352.3
391.3
437.5
491.0
549.2
616.3

94.0
102.7
112.3
123.2
136.5
150.2
166.4
184.6
207.2

38.3
41.6
45.9
50.2
56.1
64.5
72.8
81.6
90.9

15.5
17.0
18.9
20.6
24.1
29.3
33.0
38.0
42.7

21.1
23.8
26.0
27.9
30.7
32.6
37.9
44.2
52.7

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
1967.
1968
1969.

...
....
.
. .

2.6

1976: 1
II....
III...
IV....

1,053.8
1,075.1
1,098.4
1,133.7

152.2
154.7
156.7
162.8

67.7
69.1
69.5
72.6

61.9
63.0
64.2
66.5

430.3
437.4
444.5
458.3

219.4
223.9
227.4
232.3

73.8
74.2
76.1
78.5

41.4
41.9
43.0
45.1

11.3
11.5
12.3
13.7

471.3
483.0
497.2
512.6

160.2
164.7
168.2
172.3

69.3
70.2
73.5
78.2

31.3
31.0
33.0
36.8

36 0
37.0
38.7
39.8

1977:1
II
III...
IV....

1,167.7 173.2
1,188.6 175.6
1,214.5 177.4
1,255.2 187.2

81.3
81.2
79.5
84.0

68.0
69.9
72.0
75.3

465.9
473.6
479.7
496.9

237.5
244.5
246.4
252.6

78.5
79.3
81.4
86.7

46.1
46.2
46.0
47.5

13.9
12.9
13.1
13.9

528.6
539.4
557.5
571.1

177.3
182.1
186.9
192.0

80.2
78.0
83.7
84.6

38.0
35.0
39.5
39.3

40.8
43.5
45.0
47.3

1,276.7 183.5
II — 1,322.9 197.8
Ill—. 1,356.9 199.5
IV *__ 1,402.2 209.6

84.1
92.5
89.8
92.5

72.1
76.5
78.9
82.9

501.4
519.3
531.7
550.8

257.7
267.8
272.0
279.4

82.9
87.5
90.5
94.6

48.3
49.1
51.5
55.6

15.8
15.2
14.3
13.7

591.8
605.8
625.8
641.8

198.1
204.1
210.1
216.6

89.6
88.9
92.6
92.6

43.3
41.5
43.3
42.7

49.7
52.1
53.7
55.2

1978:1

1
Total includes "other" category, not shown separately.
> Includes imputed rental value of owner-occupied dwellings.
Source: Department of Commerce, Bureau of Economic Analysis.




198

TABLE B-14.—Gross private domestic investment, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Change in
business
inventories

f ixed investmen t

Gross
private
domestic
invest- Total
ment

Year or
quarter

Nonresidential

Structures

Total

Residential

Producers'
durable
equipment

Total

Nonfarm

Total

Total

Nonfarm
structures

Farm
structures

Nonfarm

Producers' Total
durable
equipment

Nonfarm

1929

16.2

14.5

10.5

5.0

4.8

5.5

4.8

4.0

3.8

0.2

0.1

1.7

1.8

1933

1.4

3.0

2.4

.9

.9

1.4

1.3

.6

.5

.0

.0

-1 6

-1 4

3.9

9.3

8.8

5.8

2.0

1.9

1940..
1941
1942
1943...
1944
1945.
1946
1947
1948
1949

13.1
17.9
9.9
5.8
7.2
10.6
30.7
34.0
45.9
35.3

10.9
13.4
8.1
6.4
8.1
11.7
24.3
34.4
41.1
38.4

7.5
9.4
6.0
5.0
6.8
10.1
16.8
22.9
26.2
24.3

?3
2.9
1.9
13
1.8
2.8
6.8
7.6
8.9
8.6

2.2
5.2
2.8
6.4
1.8
4.1
1.2
3.7
1.7
5.0
2.6
7.3
6.1
9.9
6.8 " 15.3
8.1 17.3
7.8 15.7

1950 . .
1951.
1952
1953
1954
1955 .
1956
1957
1958
1959

53.8
59.2
52.1
53.3
52.7
68.4
71.0
69.2
61.9
77.6

47.0
48.9
49.0
52.9
54.3
62.4
66.3
67.9
63.4
72.3

27.1
31.1
31.2
34.3
34.0
38.3
43.7
46.7
41.6
45.3

93
11.3
11.5
1? 8
13.2
14.4
17.4
18.1
16,7
17.0

8.6
10.5
10.6
12.0
12.4
13.7
16.6
17.4
16.0
16.1

1960 . .
1961
1962
1963
1964
1965 .
1966
1967
1968
1969

76.4
74.3
85.2
90.2
96.6
112.0
124.5
120.8
131.5
146.2

72.7
72.1
78.7
84.2
90.8
102.5
110.2
110.7
123.8
136.8

47.7
47.1
51.2
53.6
59.7
71.3
81.4
82.1
89.3
98.9

18 ?
18.4
19.4
19.6
21.5
26.1
?9.2
29.5
31.6
35.7

17.3
17.5
18.5
18.6
20.5
25.1
28.1
28.2
30.4
34.3

1970
1971 . .
1972
1973
1974
1975
1976
1977
1978 P

140.8
160.0
188.3
220.0
214.6
190.9
243 0
297.8
344.5

137.0
153.6
178.8
202.1
205.7
201.6
232 8
282.3
328.8

100.5
104.1
116.8
136.0
150.6
150.2
164 6
190.4
222.0

37.7
39.3
42.5
49.0
54.5
53.8
57.3
63.9
77.5

1976" 1
II

231 5
243.5
249.9
247.1

220 1
228.1
235.3
247.6

157 7
162.2
168.1
170.5

272.5
1977: 1
295.6
II
lll.._- 309.7
313.5

262.2
278.6
287.8
300.5

322.7
345.4
350.1
IV*"~ 359.9

306.0
325.3
336.5
347.4

1939

1978: 1
II

.

3.3

3.0

2.8

.1

.1

.4

.3

4.5
5.5
3.5
3.2
4.2
6.3
9.0
13.4
14.7
12.8

3.5
4.0
2.2
1.4
1.3
1.6
7.5
11.5
15.0
14.1

3.2
3.7
1.9
1.2
1.1
1.4
6.8
10.5
13.8
12.9

.2

.1
.1
.1
.0
.0
.0
.2
.3
.3
.3

2.2
4.5
1.8
-.6
—1.0
-1.0
6.4
-.5
4.7
-3.1

1.9
40
.7
-.6
—.6
-.6
6.4
1.3
3.0
-2.2

20.8
23.9
26.3
28.6
74.9
28.3

14.9
16.9
17.1
18.7
18.4
21.3
24.1
26.2
21.9
25.2

19.9
17.7
17.8
18.6
20.3
24.1
22.8
21.2
21.8
27.0

18.7
16.6
16.6
17.5
19.2
23.0
21.4
20.0
20.7
25.8

.8
.8
.8
.7
.6
.7
.7
.7
.7

.4
.4
.4
.4
.4
.4
.5
.5
.5
.6

6.8
10.3
3.1
.4
-1.5
6.0
4.7
1.3
-1.5
5.2

6.0
9.1
2.1
1.1
-2.1
5.5
5.1
.8
-2.3
5.3

29.5
28.7
31.8
34.0
38.2
45.1
5?.?
52.6
57.7
63.3

27.0
26.1
28.9
30.6
34.6
41.2
47.9
48.0
53.4
58.9

25.0
25.0
27.4
30.6
31.2
31.2
?8 7
28.6
34.5
37.9

23.9
23.8
26.3
29.4
29.9
29.9
27.4
27.2
33.1
36.3

.6
.7
.6
.7
.7
.6
.7
.7
.6
.7

.5
.5
.5
.6
.6
.7
.7
.7
.8
.9

3.8
2.2
6.5
6.0
5.8
9.5
14.3
10.1
7.7
9.4

3.5
1.9
5.8
5.2
6.4
8.5
14.5
9.4
7.6
9.2

36.1 62.8
37.8 64.7
41.1 74.3
46.9 87.0
51.8 96.2
51.3 96.4
54.7 107.3
61.0 126.5
74.3 144.5

58.1 36.6
59.9 49.6
69.1 62.0
80.1 66.1
88.2 55.1
87.4 51.5
97.5 68.2
116.7 91.9
133.8 106.8

35.1
47.9
60.3
64.3
52.7
49.5
65.8
88.9
103.6

.6
.7
.7
.6
1.2
.9
1.1
1.5
1.4

.9
.0
1
.2
.1
3
5
.7

3.8
6.4
9.4
17.9
8.9
-10.7
10.2
15.6
15.7

3.7
5.1
8.8
14.7
10.8
-14.3
12.2
15.0
16.7

56.4
57.6
57.3
57.9

53.8
55.0
54.8
55.1

101.3
104.6
110.8
112.6

91.4
94.7
100.5
103.3

62.4
65.9
67.3
77.1

59.8
63.8
65.1
74.4

1.3
.8
.8
1.4

.3
.3
.4

11.4
15.4
14.5
-.6

12.7
18.8
15.2
2.2

180.6
187.2
193.5
200.3

59.3
63.4
65.4
67.4

56.4
60.4
62.7
64.5

121.4
123.8
128.1
132.8

111.0 81.6
113.8 91.4
118.6 94.3
123.4 100.2

78.6
88.4
91.2
97.5

1.6
1.6
1.6
1.2

.4
.4
.5
.6

10.3
17.0
21.9
13.1

11.1
16.5
22.0
10.4

205.6
220.1
227.5
235.0

68.5
76.6
80.9
84.0

65.2
73.4
78.0
80.8

137.1
143.5
146.6
151.0

127.2
132.9
135.5
139.7

97.3
102.1
105.7
109.3

1.3
1.4
1.5
1.5

.7
.8
.7
.7

16.7
20.1
13.6
12.4

16.9
22.1
14.6
13.1

17.8
19.9
19.7

Source: Department of Commerce, Bureau of Economic Analysis.




199

100.3
105.3
109.0
112.5

.2
.2
.2
.1
.1
.5
.7
.9
.8
.8

TABLE B-15.—Inventories and final sales of business, 1946-78
[Billions of dollars, except as noted; seasonally adjusted]
Inventory-final
sales ratio

Inventories
!

Year and
quarter
Total

Nonfarm

Farm
Total

Fourth quarter:
1946
1947
1948
1949

Final
sales:

Manufacturing

Wholesale
trade

Retail
trade

Total
Other

Nonfarm 3

73.7
86.9
90.6
81.0

21.8
25.8
23.4
19.5

51.9
61.1
67.2
61.4

26.7
31.8
34.8
31.0

9.6
10.6
12.1
11.7

11.9
14.1
15.3
14.3

3.7
4.6
4.9
4.4

192.0
219.6
235.7
234.6

0.384
.396
.384
.345

0.270
278
.285
262

1950
1951
1952
1953
1954

98.8
112.1
109.4
110.1
107.2

24.2
26.5
23.1
21.6
20.5

74.6
85.6
86.3
88.5
86.7

37.4
46.2
47.3
49.3
47.0

14.3
14.9
14.9
15.1
15.4

17.7
18.3
17.9
18.5
18.7

5.2
6.2
6.2
5.5
5.6

259 8
295.6
313.3
325.8
330.1

380
.379
.349
.338
.325

287
290
.275
272
.263

1955 .
1956
1957
1958
1959 . .

112.1
121.8
126.7
128.9
132.3

17.6
18.3
20.9
24.9
23.6

94.6
103.5
105.8
103.9
108.7

51.4
57.5
57.9
56.0
57.5

16.7
17.8
18.1
18.1
19.2

20.9
21.8
22.9
22.9
24.1

5.6
6.4
6.9
6.9
8.0

356.5
377.0
392.7
405.0
426.7

.315
.323
.323
.318
.310

.265
.274
269
.257
255

1960
1961
1962
1963
1964

136.2
138.4
145.2
151.5
157.6

24.8
25.0
26.6
26.9
25.7

111.3
113.4
118.6
124.6
131.8

58.1
59.5
62.5
64.8
68.5

19.6
20.2
20.9
22.4
23.6

25.6
25.1
26.7
28.2
29.8

8.1
8.7
8.6
9.2
9.9

442.1
465.3
492.7
524.2
553.1

.308
.297
.295
.289
.285

252
.244
.241
.238
.238

1965
1966
1967
1968 .
1969

172.7
189.1
202.2
215.3
236.2

29.7
28.9
29.2
30.4
33.4

143.0
160.2
173.0
184.9
202.8

73.7
83.4
91.1
97.4
107.1

25.3
28.6
30.6
32.4
35.3

33.1
36.6
37.8
40.7
44.4

10.9
11.6
13.5
14.4
16.1

610.7
647.5
688.0
757.6
804.5

.283
.292
.294
.284
.294

.234
.247
.251
.244
.252

244.2
261.9
288.6
355.8
425.6

31.7
36.8
44.6
66.2
61.9

212.5
225.1
243.9
289.6
363.7

110.8
113.6
120.4
143.6
186.4

38.3
41.2
45.7
55.2
69.8

45.6
51.0
55.9
64.4
72.3

17.7
19.2
21.8
26.4
35.2

839.4
915.2
1,019.9
1,120. 5
1,216.0

.291
.286
.283
.318
.350

.253
.246
.239
.258
.299

428.3
459.7
498.6
571.0

64.3
60.2
60.3
71.4

364.0
399.5
438.3
499.5

187.9
203.9
219.2
248.4

68.1
76.6
85.9
100.5

72.1
80.2
89.9
103.4

35.9
38.8
43.3
47.2

1, 355.1
1, 478. 6
1, 647.3
1,870.6

.316
.311
.303
.305

.269
.270
.266
.267

1976- 1
II.
Ill
IV

435.9
447.0
451.8
459.7

64.1
64.0
59.8
60.2

371.8
383.0
392.0
399.5

190.5
195.3
199.7
203.9

70.0
73.8
75.4
76.6

74.6
76.5
78.6
£0.2

36.7
37.3
38.3
38.8

1,381.4
1,410.0
1, 436.1
1, 478. 6

.316
.317
.315
.311

.269
.211
.273
.270

1977:1. .
II
III.
IV . .

473.6
476.4
483.6
498.6

62.0
58.0
55.7
60.3

411.6
418.4
428.0
438.3

208.7
211.9
215.5
219.2

80.1
80.9
82.8
85.9

82.9
84.8
87.5
89.9

39.9
40.7
42.3
43.3

1,517.5
1, 565. 5
1, 604. 5
1, 647. 3

.312
.304
.301
.303

.271
.267
.267
.266

1978: 1
||
III
IV v

520.7
536.5
548.5
571.0

66.3
68.0
68.1
71.4

454.4
468.5
480.4
499.5

225.9
232 0
239.0
248.4

90.9
94.2
96.4
100.5

94.3
97.5
99.0
103.4

43.3
44.8
45.9
47.2

1,667.3
1,751.7
1, 803.9
1, 870. 6

.312
.306
.304
.305

.273
.267
.266
.267

. .

1970
1971
1972
1973
1974
1975
.
1976
19771978 v _

.
.

1
End of quarter.
2 Annual rates.
3
Ratio based on total final sales, which include a small amount of final sales by farms.

Note.—The industry classification of inventories is on an establishment basis and is based on the 1972 Standard Industrial Classificaticn (SIC) beginning in 1948 and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau of Economic Analysis.




200

TABLE B-16.—Inventories and final sales of business in 1972 dollars, 1947-78
[Billions of 1972 dollars, except as noted; seasonally adjusted]

Inventories

Inventory-final
sales ratio

i

Nonfarm

Year and
quarter
Total

Final
sales >
Total

Farm

Total

Manufac- Wholesale
turing
trade

Retail
trade

Nonfarm 3

Other

Fourth quarter:
1947
1948
1949

118.6
124.1
119.7

?5.7
26.7
26.2

93.0
97.3
93.5

49.9
51.3
48.5

13.8
16.1
16.1

20.5
21.3
20.9

8.7
8.6
7.8

397.2
412.0
415.1

0.299
.301
.288

0.234
.236
.225

1950
1951
1952
1953 .
1954

130.2
143.9
148.2
149.7
147.5

27.5
29.1
30.4
30.2
31.1

102.7
114.8
117.9
119.6
116.5

51.8
62.5
65.2
66.9
63.3

18.3
18.9
19.2
19.4
19.7

23.9
23.9
23.9
24.5
24.6

8.7
9.5
9.6
8.7
8.8

442.6
476.5
499.1
516.2
517.0

.294
.302
.297
.290
.285

.232
.241
.236
.232
.225

1955
1956..
1957
1958 .
1959

155.3
161.1
162.6
160.8
167.2

31.5
30.7
31.4
32.4
32.4

123.7
130.3
131.2
128.4
134.8

66.7
71.6
71.1
68.6
71.1

21.4
22.0
21.9
21.8
23.7

27.2
27.5
28.4
28.2
29.6

8.4
9.2
9.8
9.8
10.5

547.4
557.6
565.3
577.2
596.8

.284
.289
.288
.279
.280

.226
.234
.232
.222
.226

1960 .
1961
1962
1963
1964 .

171.6
174.5
182.6
190.4
197.7

32.8
33.2
34.5
35.7
35.1

138.8
141.2
148.1
154.7
162.6

72.4
74.2
78.4
80.8
84.7

24.3
25.0
25.9
27.8
29.1

31.5
30.6
32.5
34.1
36.0

10.7
11.4
11.4
12.0
12.8

609.0
636.6
664.2
699.3
730.7

.282
.274
.275
.272
.271

.228
.221
.223
.221
.223

1965
1966
1967
1968 .
1969

209.0
225.7
237.7
246.4
257.0

36.2
36.0
36.8
37.0
37.3

172.8
189.7
200.9
209.4
219.7

89.1
99.0
105.9
110.7
115.8

30.5
33.7
35.5
36.6
38.2

39.4
42.7
43.1
45.3
47.7

13.8
14.3
16.3
16.8
18.0

791.3
809.2
837.2
882.8
892.2

.264
.279
.284
.279
.288

.218
.234
.240
.237
.246

1970
1971
19721973
1974

261.3
267.9
277.4
293 9
301.8

37.7
39.2
39.8
42.1
41.8

223.6
228.8
237.6
251.8
260.1

117.1
115.4
117.5
123 6
128.6

40.4
42.0
44.4
47.4
50.6

47.3
51.9
54.4
58.2
56.5

18.8
19.5
21.3
22.7
24.5

935 n
1,007.6
1,031 8
,005.3

891.7

.293
.287
.275
285
.300

.251
.245
.236
244
.259

292.1
298.7
307.6
318.0

43.0
41.1
40.6
40.0

249.1
257.6
267.0
278.0

124.2
126.9
128.8
133.2

47.2
50.4
53.7
57.8

54.0
56.7
60.6
62.9

23.6
23.6
23.9
24.1

, 043.3
1,090.3
L, 148.4
,201.8

280
.274
.268
.265

239
.236

293.9
296.5
298 8
298.7

42.7

4i.9
41.8
41.1

251.3
254.5
257.0
257.6

124.3
125.3
126.3
126.9

48.0
49.6
50.3
50.4

55.2
55.8
56.6
56.7

23.8
23.9
23 7
23.6

, 055. 5
1,065 3
I 074 1
L, 090.3

.278
.278

.238
239

.274

.236

300.2
302.7
305.7
307.6

40.7
40.7
40.3
40.6

259.5
262.0
265.4
267.0

127.3
128.3
129.1
128.8

51.4
51.9
52.7
53.7

57.3
58.3
59.8
60.6

23.5
23.5
23.8
23.9

1,106.2
1,119.6
1,133.9
1,148.4

.271
.270
.270
.268

.235
.234
.234
.233

310.7
313.9
316.1
318.0

40.5
40.2
40.1
40.0

270.2
273.6
276.0
278.0

129.9
131.5
132.9
133.2

55.7
56.6
56.8
57.8

61.1
61.7
62.2
62.9

23.4
23.9
24.1
24.1

L, 141.1
1,167.3
1,180.3
1,201.8

.272
.269
.268
.265

.237
.234
.234
.231

_

...

.

1975..
1976
1977
1978 p
1976:1

II
III
IV

1977:1

II

III
IV
1978-1
II
III.
IVP

278

233
.231

239

1
End of quarter.
1
Annual rates.
3

Ratio based on total final sales, which include a small amount of final sales by farms.

Note.—The industry classification of inventories is on an establishment basis and is based on the 1972 Standard
Industrial Classification (SIC) beginning in 1948 and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau of Economic Analysis.




201

T A B L E B—17.—Relation of gross national product and national income, 1929— 78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Year or quarter

Plus:
Less:
Subsidies
Capital
less
consumpcurrent
tion allow- Equals:
Gross
surplus
Net
national ances with
national of governcapital
product
ment
consump- product
entertion adjustprises
ment

Less:
Indirect
business
tax and
nontax
liability

Business
transfer
payments

Statistical
discrepancy

Equals:
National
income

1929

103.4

9.7

93.7

-0.2

7.1

0.6

1.1

1933

55.8

7.5

48.3

-.0

7.1

.7

.7

39.9

1939

90.8

8.7

82.1

.4

9.4

.5

1.4

71.3

1940
1941
1942
1943
1944
1945
1946.
1947
1948
1949

100.0
124.9
158.3
192.0
210.5
212.3
209.6
232.8
259.1
258.0

9.0
10.0
11.2
11.5
11.8
12.3
13.8
17.2
20.3
22.0

91.0
114.9
147.1
180.5
198.7
200.0
195.7
215.6
238.8
236.1

.4
.1
.1
.1
.6
.7
.9
-.2
-.1
-.3

10.1
11.3
11.8
12.8
14.2
15.5
17.1
18.4
20.1
21.3

.4
.5
.5
.5
.5
.5
.5
.6
.7
.8

1.1
-.8
-1.8
2.7
4.1
.7
1.8
-1.2
1.0

79.7
102.6
135.7
169.1
181.9
180 6
178.3
194.6
219.0
212.7

1950
1951._
1952
1953
1954
1955
1956
1957
1958
1959

286.2
330.2
347.2
366.1
366.3
399.3
420.7
442.8
448.9
486.5

23.9
27.6
29.6
31.6
33 1
35.3
38.9
42.0
44.1
46.1

262.3
302.6
317.6
334.5
333.2
364.0
381.8
400.8
404.8
440.4

.1
-.1
-.3
-.5
-.3
-.0
.7
.7
1.1
.1

23.4
25.3
27.7
29.7
29.6
32.2
35.1
37.5
38.7
41.8

.8
.9
1.0
1.2
1.1
1.2
1.4
1.5
1.6
1.8

2.0
4.0
2.7
3.3
3.0
2.5
-.8

1960
1961.
1962
1963
1964
1965.
1966
1967
1968
1969

506.0
523.3
563.8
594.7
635.7
688.1
753.0
796.3
868.5
935.5

47.7
49.1
50.5
52.2
54.6
57.5
61.7
67.0
73.8
82.5

458.3
474.2
513.3
542.5
581.2
630.6
691.3
729.3
794.7
853.1

.4
7
8
.1

45.4
48.0
51.6
54.6
58.8
62.6
65.3
70.2
78.8
86.4

2.0
2.0
2.1
2.4
2.7
2.8
3.0
3.1
3.4
3.8

-.7
1.6
4.0
3.7
2.2
.9
3.2

1970
1971
1972
1973
1974
1975
1976
1977
1978 v

982 4
1,063.4
1,171.1
L, 306.6
1,412.9
I, 528.8
t, 700.1
. 887.2
2,106.6

90 8
98.8
105 4
117.7
137.7
162.0
177.8
195.2
216.9

891.6
964.7
1, 065.8
1.188.9
I, 275.2
, 366.9
L, 522.3
1,692.0
, 889.7

2.7
2.4
3.6
3.9
1.0
2.3
.7
2.8
3.7

94.0
103.4
111.0
120.2
128.6
139.2
151.3
165.1
178.2

-2.1

1,649.7
1,685.4
1,715.6
1,749.8

172.7
175.8
179 2
183.4

1,477.0
, 509.6
L, 536.3
1,566.4

.8
.4
.9
.8

146.4
149.8
152.9
156.3

4.0
4.2
4.7
5.4
5.9
7.6
8.3
9.6
10.7
8.1
8.2
82
8.5

1,806.8
1,867.0
1,916.8
1,958.1

187.3
192 4
198.5
202.6

1,619.5
, 674.6
1,718.3
1,755.5

1.0
1.1
2.7
6.3

160.3
163 3
166.5
170.1

1,992.0
2,087.5
2,136.1
2,210.8

207.3
213.3
220.8
226.3

L, 784.7
L, 874.2
1,915.3
L, 984.5

4.1
4.3
2.1
4.4

173.3
179.4
177.7
182.3

1976- 1
II

Ill
IV
1977: 1.

II
III

~

.

IV
1978:1

n
Ml

IV p

Source: Department of Commerce, Bureau of Economic Analysis.




202

.6
> 5
6
.3
8

1.7
-.2

.6
-3.3

84.8

236.2
272.3
285.8
299.7
299 1
328.0
346.9
362.3
364.0
397.1
412.0
424.2
457.4
482.8
519.2
566.0
622 2
655.8
714.4
767.9

L7
2.6
5.8
7.4
4.2
4.7
.9

798 4
858.1
951.9
1,064.6
1,136.0
1,215.0
1,359 2
1,515.3
1, 703.6

3.4
4.1
4.0
5.3

1,319.8
1, 347.9
1,372 1
1, 397.0

9.2
9.4
9.9
10.0

3.4
3.7
7.1
4.8

1,447.5
1,499 3
1,537.6
1,576.9

10.2
10.5
10.9
11.3

2.2
.5
.4

1,603 1
1,688.1
1,728.4

TABLE B-18.—Relation of national income and personal income, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Less:
Corporate
profits
with
National invenincome
tory
valuation
and
capital
consumption
adjustments

Year or
quarter

Plus:

Net
interest

Contributions
for
social
insurance

Wage
accruals
less
disbursements

Government
transfer
payments
to
persons

Personal
interest
income

Equals:

Dividends

Business
transfer Personal
Payincome
ments

1929

84.8

9.2

4.7

0.2

.0

0.9

6.9

5.8

0.6

1933

39.9

-1.7

4.1

.3

.0

1.5

5.5

2.0

.7

46.9

1939

71.3

5.3

3.6

2.1

.0

2.5

5.4

3.8

.5

72.4

1940
1941 _
1942
1943
1944
1945
1946 . . .
1947
1948 . . . .
1949

79 7
102.6
135.7
169.1
181.9
180.6
178.3
194 6
219.0
212 7

8.7
14.1
19.3
23.5
23.6
19.0
16.6
22.2
29.1
26 9

33
3.3
3.1
2.7
2.4
2.2
1.6
2 1
2.1
2 2

2.3
2.8
3.5
4.5
5.2
6.1
6.1
5.8
5.4
5.9

.0
.0
.0
.2
-.2
.0
-.0
.0
.0
-.0

2.7
2.6
2.7
2.5
3.1
5.6
10.8
11.2
10.6
11.7

5.3
5.3
5.2
5.1
b.2
5.9
6.4
7.3
7.7
8.2

4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2

.4
.5
.5
.5
.5
.5
.5
6
.7
.8

77.8
95.3
122.4
150.7
164.4
169.8
177.3
189.8
208.5
205.6

1950
1951 . .
1952
1953
1954
1955
1956
1957 .
1958
1959

236 2
272.3
285.8
299.7
299.1
328.0
346.9
362.3
364.0
397.1

33.7
38.1
35.4
35.5
34.6
44.6
42.9
42.1
37.5
48.2

2 3
2.7
3.0
3.4
4.3
4.8
5.2
6.5
8.0
8.8

7.1
8.5
9.0
9.1
10.1
11.5
12.9
14.9
15.2
18.0

.0
.1
-.0
-.1
.0
.0
.0
.0
.0
.0

14.4
11.6
12.1
12.9
15.1
16.2
17.3
20.1
24.3
25.2

8.9
9.6
10.3
11.4
12.7
13.8
15.3
17.4
18.8
20.9

8.8
8.5
8.5
8.8
9.1
10.3
11.1
11.5
11.3
12.2

.8
.9
0
L.2
1
1.2
4
1.5
6
8

226.1
253.7
270.4
286.1
288.2
308.8
330.9
349.3
359.3
382.1

412.0
424.2
457.4
482 8
519.2
566.0
622.2
655.8
714.4
767.9

46.6
46.9
54.9
59.6
67.0
77.1
82.5
79.3
85.8
81 4

9.8
11 2
12.8
14 3
15.9
18.5
21.9
24.3
26.8
30 8

21.1
21.9
24.3
27.3
28.7
30.0
38.8
43.4
48.1
54 9

.0
.0
.0
.0
.0
.0
.0
.0
.0
.0

27.0
30.8
31.6
33.4
34.8
37.6
41.6
49.5
56.5
62.7

23.3
24.6
27.1
30.2
33.3
37.2
41.8
45.0
49.6
55.9

12.9
13.3
14.4
15.5
17.3
19.1
19.4
20.1
21.9
22.6

2.0
2.0
2.1
2.4
2.7
2.8
3.0
3.1
3.4
3.8

399.7
415.0
440.7
463.1
495.7
537.0
584.9
626.6
685.2
745.8

798.4
1970...
1971
858.1
951.9
1972
1,064.6
1973. _
1,136.0
1974
1,215.0
1975
1,359.2
1976
1,515.3
1977
1978*-— 1, 703. 6

67.9
77.2
92.1
99.1
83.6
95.9
127.0
144.2
160.0

37.5
42 8
47.0
52.3
69.0
78.6
84.3
95.4
106.1

58.7
64.8
73.6
91.5
103.8
110.6
125.1
140.3
164.3

.0
.6
.0
-.1
-.5
.0
.0
.0
.0

75.9
89.9
99.4
113.5
134.9
170.6
185.6
199.2
215.2

64.3
69.3
74.6
84.1
103.0
115.5
126.3
141.2
158.9

22.9
23.0
24.6
27.8
31.0
31.9
37.9
43.7
49.3

4.0
4.2
4.7
5.4
5.9
7.6
8.3
9.6
10.7

801.3
859.1
942.5
1,052.4
1,154.9
1, 255.5
1, 380.9
1,529.0
1,707. 3

1976: l . _ .
II —
III..
IV..

1,319.8
1,347.9
1,372.1
1,397.0

126.8
128.6
130.0
122.5

80.1
82.0
86.2
88.9

121.7
124.1
126.1
128.7

.0
.0
.0
.0

182.1
181.1
188.1
191.2

121.0
123.5
128.2
132.5

34.5
37.2
38.4
41.4

8.1
8.2
8.2
8.5

1,336.9
1,363.2
1,392.8
1,430.5

1977: l . _ .
II —
IIIIV..

1,447.5
1,499.3
1,537.6
1,576.9

129.9
143.7
154.8
148.2

91.7
93.7
97.3
99.0

136.0
139.1
141.3
145.0

.0
.0
.0
.0

194.2
194.6
202.0
205.9

135.9
139.1
143.6
146.0

41.5
42.7
44.1
46.3

9.2
9.4
9.9
10.0

1,470.7
1, 508.6
1, 543.7
1,593.0

l . _ . 1,603.1
II — 1,688.1
III.. 1,728.4

132.6
163.4
165.2

101.7
104.6
107.4
110.8

157.4
162.7
166.2
170.7

.0
.0
.2
.0

208.9
210.1
219.6
222.4

151.4
156.3
161.7
166.3

47.0
48.1
50.1
51.9

10.2
10.5
10.9
11.3

1,628.9
1,682.4
1,731.7
1,786.4

1960 . .
1961
1962 .
1963
1964
1965
1966
1967
1968
1969

1978:

.

IVP.

Source: Department of Commerce, Bureau of Economic Analysis.




203

84.9

T A B L E B-19.—National income by type of income, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Proprietors ' income with inventory valuation and capital
consumption adjustments

Compensation of
employee

Farm
Year or
quarter

National
income i
Total

1929
1933...
1939

84.8
39.9
71.3

51.1
29.5

SuppleWages ments
to
and
sala- wages
and
ries
salaries 2
0.6

50.5

.5

29.0

Total
Total

Nonfarm

Capital
consumpIncome 3 tion
adjustment

Total

Income4

Inven- Capital
tory
convalua- sumption
tion
adadjustjustment ment
-0.2

14.9

6.2

6.3

-0.1

8.8

8.8

5.8

2.6

2.5

.1

3.2

3.9

-.5

-.0

7.3

7.6

-.2

-.1

8.6
11.7
14.4
17.1
18.3
19.3
23.3
21.8
23.1
22.2

-.0
-.6
-.2
-.1
-.1
-1.7
-1.5
-.4
.5

-.1
-.1
.2
.3
.4
.2
.0
.4
.5
.8

48.1

46.0

2.1

11.7

4.4

4.4

2.3
2.7
3.2
3.8
4.5
5.6
6.0
6.1
5.9
6.6

12.9
17.4
24.0
29.0
30.2
31.7
36.6
35.8
40.7
36.1

4.5
6.4
9.8
11.7
11.6
12.2
14.9
15.2
17.5
12.7

4.5
6.5
10.3
12.2
12.2
12.6
15.1
15.6
18.1
13.4

-.0
-.0
-.5
-.6
-.4
-.2
-.4
-.6
-.7

8.4
10.9
14.3
17.3
18.6
19.4
21.6
20.6
23.2
23.5

0.1

-.2

1940
1941
1942.
1943
1944
1945
1946
1947.
1948
1949

79.7
102.6
135.7
169.1
181.9
180.6
178.3
194.6
219 0
212.7

52.1
64.8
85.3
109.5
121.2
123.1
118.1
129.2
141.4
141.3

49.9
62.1
82.1
105.8
116.7
117.5
112.0
123.1
135.5
134.7

1950
1951
1952.. . .
1953
1954
1955
1956.. .
1957
1958
1959

236.2
272 3
285.8
299 7
299.1
328 0
346.9
362 3
364.0
397.1

154.8
181.0
195.7
209.6
208.4
224.9
243.5
256.5
258.2
279.6

147.0
171.3
185.3
198.5
196.8
211.7
228.3
239.3
240.5
258.9

7.8
9.7
10.4
11.0
11.6
13.2
15.2
17.2
17.7
20.6

38.4
42.8
42.9
41.3
40.8
42.5
43.6
45.0
47.4
47.2

13.5
15.8
14.9
12.9
12.3
11.3
11.2
11.0
13.1
10.7

14.1
16.6
15.7
13.7
12.9
11.9
11.8
11.8
13.9
11.6

-.7
-.8
-.8
-.7
-.6
-.6
-.6
-.8
-.8
-.9

24.9
27.0
28.0
28.4
28.5
31.2
32.4
33.9
34.3
36.6

25.1
26.4
26.9
27.6
27.6
30.5
31.8
33.1
33.2
35.3

-1.1
-.3
.2
-.2
-.0
-.2
-.5
-.3
-.1
-.1

.9
.9
.9
.9
1.0
1.0
1.1
1.2
1.1
1.3

1960
1961
1962
1963
1964
1965...
1966
1967
1968
1969..

412 0
424.2
457.4
482.8
519.2
566.0
622.2
655.8
714.4
767.9

294.9
303.6
325.1
342.9
368.0
396.5
439.3
471.9
519.8
571.4

271.9
279.5
298.0
313.4
336.1
362.0
398.4
427.5
469.5
514.6

23.0
24.1
27.1
29.5
31.8
34.5
40.9
44.4
50.3
56.8

47.0
48.3
49.6
50.3
52.2
56.7
60.3
61.0
63.4
66.2

11.4
11.8
11.9
11.6
10.3
12.6
13.6
12.1
12.0
13.9

12.3
12.7
12.8
12.5
11.2
13.5
14.6
13.2
13.3
15.4

-.9
-.9
-1.0
-.9
-1.0
-.9
-1.0
-1.2
-1.3
-1.4

35.6
36.4
37.7
38.7
42.0
44.1
46.7
48.9
51.4
52.3

34.2
35.3
36.4
37.2
40.2
42.7
45.3
47.5
50.4
51.3

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

1.3
1.2
1.4
1.6
1.8
1.6
1.6
1.7
1.5
1.4

1970.. . .
1971
1972
1973
1974
1975 ..
1976
1977.. .
1978 v

798.4
609.2 546.5
650 3 580.0
858.1
951.9
715.1 633.8
799 2 701.2
,064 6
, 136.0
875.8 764.1
931.1 805.9
, 215.0
, 359.2 1,036 8 890.1
, 515.3 1,153.4 983.6
, 703.6 1, 301.2 1,100.7

62.7
70.3
81.4
98.0
111.7
125.2
146.7
169.8
200.5

65.1
67.7
76.1
92.4
86.2
87.0
88.6
99.8
112.9

13.9
14.3
18.0
32.0
25.4
23.5
18.4
20.2
25.1

15.3
16.0
20.0
34.2
27.9
27.1
22.4
24.6
29.9

-1.4
-1.7
-2.0
-2.2
-2.5
-3.7
-4.0
-4.4
-4.8

51.2
53.4
58.1
60.4
60.9
63.5
70.2
79.5
87.8

50.7
52.8
56.4
60.3
62.9
64.0
71.4
81.4
91.9

-.5
-.4
-.7
-1.7
-3.6
-1.2
-1.2
-1.3
-2.1

1.0
1.1
2.5
1.8
1.6
.6
-.0
-.6
-2.0

1976:1
II .
Ill
IV

,319.8
, 347.9
, 372.1
1,397.0

1,001.7
1,026.0
1,046.1
1,073.3

861.7
881.5
897.3
919.9

140.0
144.6
148.8
153.4

88.6
88.8
87.4
89.5

20.9
19.6
16.9
16.3

24.9
23.6
20.9
20.3

-4.0
-4.0
-4.0
-4.0

67.7
69.3
70.5
73.2

68.5
70.6
71.7
74.8

-.9
-1.3
-1.1
-1.6

.0
.0
.0
.0

1977:1
II
Ill
IV

1,447.5
1,499.3
1,537.6
1,576.9

1,107.9 946.4
1,140.5 973.4
1,165.8 993.6
1,199.7 1,021.2

161.5
167.1
172.2
178.4

95.6
98.9
97.2
107.3

19.4
20.0
16.5
25.1

23.4
24.2
21.0
29.8

-4.0
-4.2
-4.5
-4.7

76.1
78.9
80.8
82.3

78.1
80.6
82.2
84.8

-1.8
-1.4
-.7
-1.3

-.1
-.3
-L2

1978:1 . . .
II
Ill
IV v .

1,603.1 1,241.0 1,050.8 190.2
L, 688.1 1,287.8 1,090.2 197.6
1,728.4 1,317.1 1,113.4 203.6
1,358.9 1,148.5 210.4

105.0
110.1
114.5
121.9

21.9
24.0
25.0
29.5

26.6
28.8
29.7
34.3

-4.7
-4.8
-4.8
-4.8

83.1
86.1
89.6
92.4

86.7
90.1
93.5
97.3

-2.1
-2.2
-1.8
2.3

-1.5
-1.8
-2.1
-2.6

See next page for continuation of table.




204

T A B L E B-19.—National income by type of income,

1929-78—Continued

[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Rental i ncome of per-

Corporate profits with inventory valuation and capital consumption
adjustments

SOnS WIIII cdfJiuii

Profits with inventory valuation adjustment and without
car. )ital consumption adjustment

consumption
adjustmen

Total

Capital
conRental
income sumption
of
persons adjustment

Profits after tax

Total
Total
Total

1929

4.9

5.7

-0.8

9.2

1933

2.2
2.6
2 7

2.3

-.1

-1.7

10.5
-1.2

1939
1940
1941!!!!!!
1942
1943
1944
1945
1946

1947 _
1948

3.1
4.0
4.4
4.5
4.6
5.5
5.3
5.7

6.1
7.1
7.7

1949

1950
1951
1952

8.8

1953
1954
1955
1956.
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970

10.0
11.0
11.3
11.6
12.2
12.9
13.2
13.8
14.3
15.0
15.7
16.1
17.1
18.2
19.4
18.6
18.1
18.6

1971

20.1

1972
1973
1974
1975
1976
1977
1978 p

21.5
21.6
21.4
22.4
22.5
22.5
23.4
22.5
22.4
22.4
22.8
22.5
22.4
22.4
22.7
22.8
22.2
24.3
24.4

1957
1958

1976:1....
II...
III..
IV._
1977:1....
II...

III..
IV. _
1978:1....
II...
III..
IV

P.

Capital
Inven- consumptory
tion
valua- adjusttion
Undisment
Divitributed adjustdends profits ment

Profits before tax

Year or
quarter

Profits
tax
liability

10.0

1.4

8.6

1.0

.5

.4

5.6
7.2
10.1
10.1

3.1

-.6

5.3

6.3

7.0

1.4

33

-.6

8.7

9.8

10.0
17.7

2 8

3.9
5.0

5.6
5.9
6.2
7.3
7.7
8.5
8.9

10.0
11.0
12.2
13.4
14.4
14.8
15.2
15.9
16.7
17.3
17.8
18.3
19.0
19.6
20.1
21.0
22.1
23.4
23.8
24.8
25.8
27.7
29.4
31.3
33.7
36.9
38.7
42.1
47.6
38.1
38.3
38.8
39.7
40.4
41.5
42.6
44.0
44.6
45.5
49.5

-.8

-1.0
-1.2
-1.4
-1.6
-1.8
-2.5
-2.8
-2.8
-2.9
-3.3
-3.4
-3.4
-3.3
-3.5
-3.6
-3.6
-3.8
-4.0
-4.1
-4.0
-4.0
-3.9
-4.0
-3.9
-3.9
-4.0
-5.2
-6.7
-7.1
-7.6
-7.9
-9.8
-12.3
-14.5
-16.2
-19.6
-24.2
-15.6
-15.9
-16.3
-16.9
-17.9
-19.0
-20.2
-21.3

-21.8
-23.3
-25.2
51.0 - 2 6 . 6

14.1
19.3
23.5
23.6
19.0
16.6
22.2
29.1
26.9
33.7
38.1
35.4
35.5
34.6
44.6
42.9
42.1
37.5
48.2
46.6
46.9
54.9
59.6
67.0
77.1
82.5
79.3
85.8
81.4
67.9
77.2
92.1
99.1
83.6
95.9
127.0
144.2
160.0
126.8
128.6
130.0
122.5
129.9
143.7
154.8
148.2
132.6
163.4
165.2

Total

15.2
21.5
20.3
25.1
24.4
23.8
24.1
19.2
19.7
19.3
24.6
25.6
31.5
33.0
35.2
30.8
28.9
42.6
37.6
42.7
43.9
39.8
38.9
39.5
40.5
37.8
38.1
46.7
48.4
45.9
48.6
45.4
46.9
40.8
41.1
51.2
51.6
48.5
48.9
48.6
48.7
53.6
53.7
57.7
57.6
64.7
64.2
75.2
73.3
80.7
78.6
77.3
75.6
85.6
82.1
83.4
77.9
71.5
66.4
82.0
76.9
96.2
89.6
97.2 115.8
86.5 126.9
107.9 120.4
141.4 155.9
159.1 173.9
178.1 202.4
141.2 152.6
143.0 158.7
144.5 157.8
137.0 154.6
144.5 164.8
158.5 175.1
169.9 177.5
163.5 178.3
148.7 172.1
180.6 205.5
184.5 205.4

76
11.4
14.1
12.9
io! 7

11.1
11.2

9.0
15.5

73.9

20.2
22.7
18.7
24.7
21.3
19.5
20.2
20.5
26.4
26.6
25.5
22.1
28.0
25.8
25.8
29.6
31.5
36.7
44.3
47.1
44.9
46.2
43.8
37.0
44.3
54.6
67.1
74.5
70.6
91.7
102.1
118.3
89.0
92.4
93.1
92.2
96.5
102.8
104.8
104.4

70.0
85.0
86.2

102.1
120.5
119.2

11 3
12! 4
10.2
17.9
22.6
19.4
20.3
17! 6
22 0
22.0
21.4
19 0
23! 6
22.7
22.8
24.0
26.2
28.0
30! 9
33.7
32.5
39.4
39. 7
34.5
37.7
41.5
48.7
52.4
49.8
64.3
71.8
84.1
63.6
66.3
64.7
62.4
68.3
72.3
72.8

2.8

0.5

-1.3

-1.6

-2.1

3.8

1.8

-.7

4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3

3.2
5.7

-.2

-.5
-1.0
-1 1
-1.1
-1.0
-.8
-.2

5.8
2.0

7.0
7.2
8.8
8.5
8.5
8.8
9.1

10.3
11.1
11.5
11.3
12.2
12.9
13.3
14.4
15.5
17.3
19.1
19.4
20.1
21.9
22.6
22.9
23.0
24.6
27.8
31.0
31.9
37.9
43.7
49.3
34.5
37.2
38.4
41.4
41.5
42.7
44.1
46.3
47.0
48.1
50.1
51.9

5.9
6.6

6.5
4.4
9.9

13.9
15.7
11.5
15.9
12.8
11.0
11.5

11.4
16.1
15.5
14.0
10.8
15.8
13.0
12.5
15.2
16.0
19.4
25.2
27.6
24.7
24.2
21.2
14.1
21.3
30.0
39.3
43.6
38.7
53.8
58.4
69.1
54.5
55.2
54.7
50.8
55.0
60.1
60.6
58.1
55.1
72.4

-2.5

-1.2
-.8
-.3
-.6

-5.3
-5.9
-2.2
1.9
-5.0
-1.2
1.0
-1.0
-.3

-1.7
-2.7

-1.5

-.3
-.5
.3
.1

.1
-.2
-.5
-1.9
-2.1
-1.7
-3.4
-5.5
-5.1
-5.0
-6.6
-18.6
-40.4
-12.4
-14.5
-14.8
-24.3
-11.4
-15.7
-13.3
-17.6
-20.3
-16.6
-7.7
-14.8
-23.5
-24.9
69.2 - 2 0 . 9

-.1

-2.7
-3.4
-3.9
-3.8
-4.0
-4.6
-4.5
-4.1
-3.2
-2.1
-3.0
-3.3
-3.4
-2.9
-2.3
-1.8
1.2
2.1
2.8
3.8
3.9

3.7
3.7
3.5

1.5

.3

2.5
1.9

-2.9
-12.0
-14.4
-14.9
-18.1
-14.4
-14.4
-14.5
-14.5
-14.6
-14.8
-15.0
-15.3
-16.1
-17.2
-19.3
-27.8 -19.9

Net
interest

4.7
4.1
3.6

33
3.3
3.1

2.7
2.4
2.2
1.6

2.1
2.1
2.2
2.3
2.7
3.0
3.4
4.3
4.8

5.2
6.5
8.0
8.8

9.8
11.2
12.8
14.3
15.9
18.5
21.9
24.3
26.8
30.8
37.5
42.8
47.0
52.3
69.0
78.6
84.3
95.4
106.1
80.1
82.0
86.2
88.9
91.7
93.7
97.3
99.0
101.7
104.6
107.4
110.8

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-17.
2 Employer contributions for social insurance and to private pension, health, and welfare funds; workmen's
compensation; directors' fees; and a few other minor items.
3
With inventory valuation adjustment and without capital consumption adjustment.
* Without inventory valuation and capital consumption adjustments.
Source: Department of Commerce, Bureau of Economic Analysis.

278-216
 O - 7 9 - 1 4


205

T A B L E B-20.—Sources of personal income, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Wage and salary disbursements*

Personal
income

Year or quarter

Total

Commodityproducing
industries

Total

Manufacturing

GovernDistrib- Service ment
and
utive
indus- indus- government
tries
tries
enterprises

Other
labor
income1

Proprietors' income with inventory valuation and
capital consumption adjustments

Farm

Nonfarm

1929

84.9

50.5

21.5

16.1

15.6

8.4

5.0

0.5

6.2

8.8

1933

46.9

29.0

9.8

7.8

8.8

5.2

5.2

.4

2.6

3.2

72.4

46.0

17.4

13.6

13.3

7.1

8.2

.6

4.4

7.3

77.8
95.3
122.4
150.7
164.4
169.8
177.3
189.8
208.5
205.6

49.9
62.1
82.1
105.6
116.9
117.5
112.0
123.1
135.5
134.8

19.7
27.5
39.1
49.0
50.4
45.9
46.0
54.2
61.1
57.8

15.6
21.7
30.9
40.9
42.9
38.2
36.5
42.5
47.1
44.6

14.2
16.3
18.0
20.1
22.7
24.8
31.0
35.2
37.5
37.7

7.5
8.1
9.0
9.9
10.9
11.9
14.3
16.1
17.9
18.5

8.5
10.2
16.0
26.6
33 0
34.9
20.7
17.5
19.0
20.8

.6
.7
.9
1.1
1.5
1.8
2.0
2.4
2.7
2.9

4.5
6.4
9.8
11.7
11.6
12.2
14.9
15.2
17.5
12.7

8.4
10.9
14.3
17.3
18.6
19.4
21.6
20.6
23.2
23.5

1950
1951.
1952
1953
1954
1955
1956
1957
1958
1959

226.1
253.7
270.4
286.1
288.2
308.8
330.9
349.3
359.3
382.1

147.0
171.3
185.4
198.6
196.8
211 7
228.3
239.3
240.5
258.9

64.8
76.3
82.0
89.6
85.7
93.1
100.6
104.2
100.0
109.6

50.3
59.3
64.1
71.2
67.5
73 8
79.4
82.4
78.6
86.8

39.8
44.3
46.9
49.7
50.1
53.4
57.7
60.5
60.8
64.8

19.8
21.5
23.1
24.9
26.1
28.6
31.3
33.6
35.6
38.5

22.6
29.2
33.3
34.4
34.9
36 6
38.8
41.0
44.1
46.0

3.7
4.6
5.2
5.9
6.1
7.0
8.0
9.0
9.4
10.6

13.5
15.8
14.9
12.9
12.3
11.3
11.2
11.0
13.1
10.7

24.9
27.0
28.0
28.4
28.5
31.2
32.4
33.9
34.3
36.6

1960
1961
1962
1963
1964
1965
1966
1967
1968. .
1969

399.7
415.0
440.7
463.1
495.7
537.0
584.9
626.6
685.2
745.8

271.9
279 5
298.0
313 4
336.1
362.0
398 4
427.5
469.5
514.6

113.1
113.7
121.8
126.9
135.4
146.0
161.0
168.3
183.4
199.6

89.7
89 8
96.7
100 6
107.1
115.5
128 0
134.1
145 8
157.5

68.2
69.3
72.8
76 3
81.4
87.2
94 4
100.9
109.9
120.7

41.4
44.1
47.2
50.2
54.4
58.9
64.7
71.8
79.8
89.4

49.2
52.4
56.3
60.0
64.9
69.9
78 3
86.4
96.4
104.9

11.2
11.8
13.0
14.0
15.7
17.8
19.9
21.7
25.1
28.2

11.4
11.8
11.9
11.6
10.3
12.6
13.6
12.1
12.0
13.9

35.6
36.4
37.7
38.7
42.0
44.1
46.7
48.9
51.4
52.3

1970.
1971
1972
1973
1974
1975...
1976.
1977
1978 P . .

801.3
546 5
859.1
579.4
942.5
633.8
, 052 4 701 3
, 154.9
764.6
, 255.5
805 9
,380 9
890 1
, 529.0
983.6
, 707. 3 , 100. 7

202.9
208.3
227.3
254.3
274.6
275.0
307.5
343.7
390.1

158 2
160.3
175 4
196 2
211.4
211 0
237 5
266.3
299.7

130 1
139.3
151.9
168 1
184.3
195 3
216 4
239.1
268.7

97.5
106.2
117.2
130.3
145.1
160.1
178.6
200.1
225.8

116.0
125.6
137.3
148 6
160.5
175 4
187 6
200.8
216.1

32.0
36.2
42.0
48 7
55.6
65.1
77.0
90.4
105.9

13.9
14.3
18.0
32 0
25.4
23.5
18 4
20.2
25.1

51.2
53.4
58.1
60 4
60.9
63.5
70.2
79.5
87.8

1976: L. .
II
III
IV..

, 336.9
363 2
, 392.8
, 430.5

861.7
881 5
897 3
919.9

298.4
305.4
309.8
316.2

230 2
235 8
239 5
244.6

208.6
213 9
218 9
224.4

171.0
176.1
180.5
186.6

183.7
186 1
188.1
192.6

72.4
75.5
78.6
81.6

20.9
19.6
16.9
16.3

67.7
69.3
70.5
73.2

1977:1
II.
III.
IV

,470.7
, 508.6
, 543.7
,593.0

946.4
973 4
993.6
,021.2

327.3
342.0
348.3
357.1

254.6
264 1
269.3
277.3

231.2
236 5
241.2
247.5

192.7
196.8
202.3
208.5

195.2
198.1
201.7
208.1

84.9
88.5
92.2
96.1

19.4
20.0
16.5
25.1

76.1
78.9
80.8
82.3

1978: L
II.
III..
IV p

, 628.9
, 682.4
,731.7
,786.4

,050 8
, 090.2
,113.2
, 148.5

365.9
387.0
396.4
410.8

286 9
296.1
302.0
313.6

257 0
266.4
271.6
279.9

216.5
222.8
228.5
235.6

211.4
213.9
216.7
222.2

100.0
104.0
107.9
111.8

21.9
24.0
25.0
29.5

83.1
86.1
89.6
92.4

1939 .

. .

1940
1941
1942 .
1943
1944
1945
1946
1947. .
1948
1949

.*.-.

.

.

See next page for continuation of table.




206

TABLE B-20.—Sources of personal income, 1929-78—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Rental
ncome
of persons
with
Year or capital Divi- Personal
quarter con- dends interest
income
sumpion adjustment

Transfer payments

Total

Old age,
survivors,
disability,
and health
insurance
benefits

Government
Vetunem- erans
ploybenement m- fits
surance
benefits

Government
employee
retirement
benefits

Less:
Personal Noncontrifarm
Aid to
butions
perfamilies
for
sonal
with de- Other social
inpendent
insurcome3
children
ance
(AFDC)

1929

4.9

5.8

6.9

1.5

0.6

0.1

0.R

0.1

1933....

2.2

2.0

5.5

2.1

.6

.2

14

.2

1939....

2.6

3.8

5.4

3.0

0.0

0.4

.5

.3

1. 7

.6

1940
1941....
1942
1943
1944....
1945
1946....
1947....
1948....
1949....

2.7
3.1
4.0
4.4
4.5
4.6
5.5
5.3
5.7
6.1

4.0
4.4
4.3
4.4
4.6
4.6
5.6
6.3
7.0
7.2

5.3
5.3
5.2
5.1
5.2
5.9
6.4
7.3
7.7
8.2

3.1
3.1
3.1
3.0
3.6
6.2
11.3
11.7
11.3
12.5

.0
.1

.5
.5
.5

.3
.4
.5
.6
.7

.5
.4
.4
.1
.1
.4
1.1
.8
.9
1.9

l'.O
3.0
7.0
7.0
5.9
5.3

.3
.3
.3
.4
.4
.5
.7
.7
.7
.9

1. 7
1. 8
1. 8
8
1. 0
0
1. 1
.3
.4
.5

2.5
2.9
3.3

.7
.8
1.2
1.8
2.2
2.3
2.0
2.1
2.2
2.2

159.6
171.5
187.7
189.9

1950....
1951....
1952....
1953....
1954....
1955....
1956....
1957....
1958....
1959....

7.1
7.7
8.8
10.0
11.0
11.3
11.6
12.2
12.9
13.2

8.8
8.5
8.5
8.8
9.1
10.3
11.1
11.5
11.3
12.2

8.9
9.6
10.3
11.4
12.7
13.8
15.3
17.4
18.8
^20.9

15.2
12.6
13.1
14.1
16.2
17.5
18.7
21.6
25.9
27.0

1.0
1.9
2.2
3.0
3.6
4.9
5.7
7.3
8.5
10.2

1.5
.9
1.1
1.0
2.2
1.5
1.5
1.9
4.1
2.8

7.7
4.6
4.3
4.1
4.2
4.4
4.4
4.5
4.7
4.6

1.0
l.l
1.2
L.4
L.5
.7
1.9
2.2
2.5
2.8

.6
.6
.5
.5
.6
.6
.6
.7
.8
.9

3.5
3.6
3.8
4.1
4.1
4.3
4.5
4.9
5.3
5.8

2.9
3.4
3.8
4.0
4.6
5.2
5.8
6.7
6.9
7.9

209.3
234.4
252.0
269.9
272.7
294.3
316.4
335.0
342.6
367.7

I960....
1961....
1962....
1963
1964
1965
1966....
1967....
1968....
1969....

13.8
14.3
15.0
15.7
16.1
17.1
18.2
19.4
18.6
18.1

12.9
13.3
14.4
15.5
17.3
19.1
19.4
20.1
21.9
22.6

23.3
24.6
27.1
30.2
33.3
37.2
41.8
45.0
49.6
55.9

28.9
32.8
33.8
35.8
37.4
40.4
44.7
52.6
59.9
66.5

11.1
12.6
14.3
15.2
16.0
18.1
20.8
25.5
30.2
32.9

3.0
4.3
3.1
3.0
2.7
2.3
1.9
2.2
2.1
2.2

4.6
5.0
4.7
4.8
4.7
4.9
4.9
5.6
5.9
6.7

3.1
3.4
3.7
4.2
4.7
5.2
6.1
6.9
7.7
8.6

1.0
1.1
1.3
1.4
1.5
1.7
1.9
2.3
2.8
3.5

6.2
6.4
6.7
7.3
7.8
8.3
9.2
10.2
11.1
12.5

9.3
9.7
10.3
11.8
12.6
13.3
17.8
20.6
22.8
26.3

384.4
399.0
424.5
447.0
480.7
519.5
566.1
609.1
667.5
725.8

1970....
1971....
1972
1973
1974
1975....
1976....
1977....
1978 p...

18.6
20.1
21.5
21.6
21.4
22.4
22.5
22.5
23.4

22.9
23.0
24.6
27.8
31.0
31.9
37.9
43.7
49.3

64.3
69.3
74.6
84.1
103.0
115.5
126.3
141.2
158.9

79.9
94.1
104.1
118.9
140.8
178.2
193.9
208.8
226.0

38.5
44.5
49.6
60.4
70.1
81.4
92.9
105.0
117.3

4. a
5.8
5.6
4.3
6.6
17.4
15.5
12.5
8.9

7.7
8.8
9.7
10.4
11.8
14.5
14.4
13.8
13.6

10.1
11.7
13.5
15.6
18.8
22.7
25.7
28.8
32.8

4.8
6.2
6.9
7.2
7.9
9.2
10.1
10.6
10.8

14.9
17.2
18.9
21.0
25.5
33.0
35.5
38.1
42.5

28.0
30.8
34.2
42.2
47.7
50.5
55.5
61.0
69.7

780.7
838.0
917.3
1,011.9
1,119.3
1, 220.8
1, 349.5
1, 494.4
1,666.5

1976:1 . .
II.
Ill
IV.

22.5
22.4
22.4
22.8

34.5
37.2
38.4
41.4

121.0
123.5
128.2
132.5

190.3
189.3
196.3
199.7

88.0
89.3
95.8
98.3

17.0
14.8
15.2
14.8

15.8
14.3
13.4
13.8

24.5
25.7
26.1
26.5

9.7
10.0
10.2
10.3

35.1
35.2
35.5
36.1

54.2
55.0
55.9
56.8

1, 303.8
1,330.9
1, 362. 7
1,400.6

1977:L.
II..
III.
IV.

22.5
22.4
22.4
22.7

41.5
42.7
44.1
46.3

135.9
139.1
143.6
146.0

203.4
204.0
211.9
215.9

99.7
101.8
108.5
110.1

14.8
12.0
11.4
11.5

14.3
13.8
13.4
13.7

27.2
28.4
29.2
30.5

10.4
10.5
10.6
10.7

37.0
37.4
38.7
39.4

59.4
60.5
61.4
62.6

1,437.5
1,474.4
1,512.8
1, 552.9

1978:1..
II..
III.
IV v

22.8
22.2
24.3
24.4

47.0
48.1
50.1
51.9

151.4
156.3
161.7
166.3

219.2
220.6
230.4
233.6

112.1
113.7
121.1
122.4

10.4
8.5
8.7
8.0

13.8
13.5
13.3
13.7

31.3
32.5
33.2
34.4

10.7
10.8
10.9
10.8

40.9
41.6
43.3
44.4

67.2
69.2
70.5
72.0

1,591.8
1, 642.8
1,690.8
1,740.6

\l

1
The total of wage and salary disbursements and other labor income differs from compensation of employees in Table
B-19 in that it excludes employer contributions for social insurance and the excess of wage accruals over wage disbursements.
2
Persona! income exclusive of farm proprietors' income, farm wages, other farm labor income, and agricultural net
interest.
Note.—The industry classification of wage and salary disbursements and proprietors' income is on an establishment
basis and is based on the 1972 Standard Industrial Classification (SIC) beginning 1948 and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau of Economic Analysis.




207

T A B L E B-21.—Disposition of personal income, 1929-78
(Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Percent of disposable
personal income

Less: Personal outlays

Personal
income

Year or
quarter

Less:
Personal
tax
and
nontax
payments

Equals:
Disposable
personal
income

Total

PerPer- Interest sonal Equals:
Personal paid by transfer sonal
conconpaysaving
sump- sumers ments
tion
to
to forexpend- busi- eigners
itures
ness
(net)

Personal
outlays

Total

Consumption
expenditures

Personal
saving

1929

84.9

2.6

82.3

79.1

77.3

1.5

0.3

3.1

96.2

93.9

3.8

1933

46.9

1.4

45.5

46.5

45.8

.5

.2

-1.0

102.2

100.7

-2.2

1939

72.4

2.4

69.9

67.8

67.0

.7

.2

2.1

97.0

95.8

3.0

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

77.8
95.3
122.4
150.7
164.4
169.8
177.3
189.8
208.5
205.6

2.6
3.3
5.9
17.8
18.9
20.8
18.7
21.4
21.0
18.5

75.2
92.0
116.5
132.9
145.5
149.0
158.6
168.4
187.4
187.1

72.0
81.8
89.4
100.1
109.0
120.4
145.2
163.5
176.9
180.4

71.0
80.8
88.6
99.4
108.2
119.5
143.8
161.7
174.7
178.1

.8
.9
.7
.5
.5
.5
.7
1.0
1.4
1.7

.2
.2
.1
.2
.4
.5
.7
.7
.7
.5

3.3
10.2
27.0
32.7
36.5
28.5
13.4
4.9
10.6
6.7

95.6
88.9
76.8
75.4
74.9
80.8
91.5
97.1
94.3
96.4

94.3
87.7
76.1
74.8
74.4
80.2
90.6
96.1
93.2
95.2

4.4
11.1
23.2
24.6
25.1
19.2
8.5
2.9
5.7
3.6

226.1
253.7
270.4
286.1
288.2
308.8
330.9
349.3
359.3
382.1

20.6
28.9
34.0
35.5
32.5
35.4
39.7
42.4
42.1
46.0

205.5
224.8
236.4
250.7
255.7
273.4
291.3
306.9
317.1
336.1

194.7
210.0
220.4
233.7
240.1
258.5
271.6
286.4
295.4
317.3

192.0
207.1
217.1
229.7
235.8
253.7
266.0
280.4
289.5
310.8

2.3
2.5
2.9
3.6
3.8
4.4
5.1
5.5
5.6
6.1

.4
.4
.4
.5
.5
.4
.5
.5
.4
.4

10.8
14.8
16.0
17.0
15.6
14.9
19.7
20.6
21.7
18.8

94.7
93.4
93.2
93.2
93.9
94.6
93.2
93.3
93.2
94.4

93.4
92.1
91.8
91.6
92.2
92.8
91.3
91.4
91.3
92.5

5.3
6.6
6.8
6.8
6.1
5.4
6.8
6.7
6.8
5.6

349.4
362.9
383.9
402.8
437.0
472.2
510.4
544.5
588.1
630.4

332.3
342.7
363.5
384.0
410.9
441.9
477.4
503.7
550.1
595.3

324.9
335.0
355.2
374.6
400.4
430.2
464.8
490.4
535.9
579.7

7.0
7.3
7.8
8.8

11.1
12.0
12.5
13.3
14.7

.9

17.1
20.2
20.4
18.8
26.1
30.3
33.0
40.9
38.1
35.1

95.1
94.4
94.7
95.3
94.0
93.6
93.5
92.5
93.5
94.4

93.0
92.3
92.5
93.0
91.6
91.1
91.1
90.0
91.1
92.0

4.9
5.6
5.3
4.7

...

50.4
52.1
56.8
60.3
58.6
64.9
74.5
82.1
97.1
115.4

.4
.4
.5

1964
1965
1966
1967
1968
1969 .

399.7
415.0
440.7
463.1
495.7
537.0
584.9
626.6
685.2
745.8

6.4
6.5
7.5
6.5
5.6

1970
1971
1972
1973
1974
1975 .
1976
1977
1978 v

801.3
859.1
942.5
1, 052.4
1,154.9
. . . 1,255. 5
1, 380. 9
1, 529.0
1,707.3

115.3
116.3
141.2
150.8
170.3
168.8
196.5
226.0
256.2

685.9
742.8
801.3
901.7
984.6
1,086.7
1,184.4
1, 303.0
1,451.2

635.4
618.8
685.5
668.2
751.9
733.0
831.3
809.9
913.0
889.6
1,003.0
979.1
1,116.3 1, 090.2
1, 236.1 1, 206. 5
1, 374.4 1, 339.7

15.5
16.2
17.9
20.2
22.4
23.0
25.1
28.6
33.8

1.1
1.1
1.0
1.3
1.0
.9
.9
1.0
1.0

50.6
57.3
49.4
70.3
71.7
83.6
68.0
66.9
76.7

92.6
92.3
93.8
92.2
92.7
92.3
94.3
94.9
94.7

90.2
90.0
91.5
89.8
90.3
90.1
92.1
92.6
92.3

7.4
7.7
6.2
7.8
7.3
7.7
5.7
5.1
5.3

1976: l____
II...
III...
IV...

1, 336.9
1,363.2
1, 392.8
1,430.5

184.4
192.6
200.0
209.0

1,152.5
1,170.6
1,192.8
1,221.5

1, 078.9
1,100.7
1,124.8
1,160.9

1,053.8
1, 075.1
1, 098.4
1,133.7

24.1
24.8
25.5
26.2

1.0
.9
.9
1.0

73.6
69.9
68.1
60.7

93.6
94.0
94.3
95.0

91.4
91.8
92.1
92.8

6.4
6.0
5.7
5.0

1977: 1
II...
III...
IV...

1,470.7
1, 508.6
1, 543.7
1,593.0

222.7
223.3
224.6
233.3

1, 248.0
1, 285.3
1, 319.1
1,359.6

1,195.8
1,217.8
1,244.8
1, 285.9

1,167.7
1,188.6
1, 214.5
1,255.2

27.1
28.2
29.3
29.8

1.0
1.0
.9
.9

52.2
67.5
74.3
73.7

95.8
94.7
94.4
94.6

93.6
92.5
92.1
92.3

4.2
5.3
5.6
5.4

1978: L — 1,628.9
I I . . . 1,682.4
I I I . . . 1,731.7
IV p . . 1,786.4

237.3
249.1
263.2
275.0

1,391.6
1, 433.3
1,468.4
1,511.4

1, 309.2
1, 357.0
1,392.5
1,439.2

1, 276.7
1, 322.9
1, 356.9
1, 402.2

31.5
33.0
34.6
36.0

1.0
1.1
.9
1.0

82.4
76.3
76.0
72.3

94.1
94.7
94.8
95.2

91.7
92.3
92.4
92.8

5.9
5.3
5.2
4.8

1950..
1951
1952
1953
1954
1955
1956
1957
1958
1959

..

1960
1961
1962
1963

9.9

Source: Department of Commerce, Bureau of Economic Analysis.




208

.6

.6
.7
.6
.9
.8

6.0

T A B L E B—22.—Total and per capita disposable personal income and personal consumption expenditures in current and 1972 dollars, 1929-78
[Quarterly data at seasonally adjusted annual rates, except as noted]
Personal consumption expenditures

Disposable personal income
Total (billions
of dollars)

Year or quarter

Per capita
(dollars)

Total (billions
of dollars)

Per capita
(dollars)

Population
(thou-1
sands)

Current
dollars

1972
dollars

Current
dollars

1972
dollars

Current
dollars

1972
dollars

1929

82.3

229.8

675

1,886

77.3

215.6

634

1,769

121,875

1933

45.5

169.7

362

1,350

45.8

170.7

364

1,358

125,690

1939

69.9

230.1

534

1,756

67.0

220.3

511

1,681

131,028

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

75.2
92.0
116.5
132.9
145.5
149.0
158.6
168.4
187.4
187.1

244.3
278.1
317.3
332 2
343.9
338.6
332.4
318.8
335.5
336.1

570
690
863
972
1,051
1,065
1,122
1,168
1,278
1,254

1,849
2,084
2,353
2,429
2,485
2,420
2,351
2,212
2,288
2,253

71.0
80.8
88.6
99 4
108.2
119.5
143.8
161.7
174.7
178.1

230.4
244.1
241.7
248 7
255.7
271.4
301.4
306.2
312.8
320.0

537
605

1,744
1,830
1,792
1,819
1,847
1,939
2,131
2,124
2,133
2,145

132,122
133, 402
134, 860

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

205.5
224.8
236.4
250.7
255.7
273.4
291.3
306.9
317.1
336.1

361.9
371.6
382.1
397.5
402.1
425.9
444.9
453.9
459.0
477.4

1,355
1,457
1,506
1,571
1,574
1,654
1,731
1,792
1,821
1,898

2,386
2,408
2,434
2,491
2,476
2,577
2,643
2,650
2,636
2,696

192.0
207.1
217.1
229.7
235 8
253.7
266.0
280.4
289.5
310.8

338.1
342.3
350.9
364.2
370 9
395.1
406.3
414.7
419.0
441.5

,266
,342
1,383
1,439

I960
1961
1962
1963
1964
1965
1966
1967
1968
1969

349.4
362 9
383.9
402 8
437.0
472.2
510.4
544.5
588.1
630.4

487.3
500.6
521.6
539 2
577.3
612.4
643.6
669.8
695.2
712.3

1,934
1,976
2,058
2,128
2,278
2,430
2,597
2,740
2,930
3,111

2,697
2,725
2,796
2,849
3,009
3,152
3,274
3,371
3,464
3,515

324.9
335.0
355.2
374.6
400.4
430.2
464.8
490.4
535.9
579.7

453.0
462.2
482.9
501.4
528.7
558.1
586.1
603.2
633.4
655.4

1,798
L824
1,904

685.9
742.8
801.3
901.7
984.6
1,086.7
1,184.4
1,303.0
1,451.2

741.6
769.0
801.3
854.7
842.0
859.7
890.1
926.3
965.5

3,348
3,588
3,837
4,285
4,646
5,088
5,504
6,009
6,640

3,619
3 714
3,837
4,062
3,973
4,025
4,136
4,271
4,418

618.8
668.2
733.0
809.9
889.6
979.1
1,090. 2
1, 206. 5
1, 339.7

1,152.5
1,170.6
1,192.8
1,221.5

881.8
886.3
891.5
900.9

5,370
5,446
5,538
5,660

4,109
4,124
4,139
4,174

1,248.0

904.8
918.6
931.9
949.6

5,772
5,934
6,077
6,250

952.1
960.3
968.7
980.9

6,387
6,566
6,712
6,893

.

.

-

.

..

.

1970
1971

1972
1973
1974
1975
1976
1977
1978 v
1976: 1

||
III

IV
1977: 1 .__

||
III

„___

IV

1,391.6

1978- 1
II

III
IV

1,285.3
1, 319.1
1, 359.6

P

1,433.3
1, 468.4
1,511.4

Current
dollars

657
727
781
854
1.017
,122
1,192
,194

1972
dollars

136, 739

138, 397
139, 928
141,389
144,126
146,631
149,188

2,229
2,219
2,236
2,283
2,284
2,391
2,415
2,421
2,406
2,493

151,684
154,287
156, 954
159, 565
162,391
165, 275
168,221
171,274
174,141
177,073

1.979
2', 087
2,214
2,365
2,468
2,670
2,860

2,507
2,516
2,589
2,649
2,755
2,872
2,982
3,035
3,156
3,234

180, 671
183,691
186,538
189,242

668.9
691.9
733.0
767.7
760.7
774.6
819.4
857.7
891.2

3,020
3,227
3,510
3,849
4,197
4,584
5,066
5,564
6,130

3,265
3,342
3,510
3,648
3,589
3,627
3,808
3,955
4,078

204,878
207,053
208, 846
210,410
211,945
213,566
215,191
216, 856
218, 554

1,053.8
1, 075.1
1, 098.4
1,133.7

806.3
814.0
820.9
836.2

4,910
5,002
5,100
5,253

3,757
3,787
3,812
3,874

214,608
214,948

4,185
4,241
4,293
4,365

1,167.7
1,188.6
1, 214. 5
1,255.2

846.6
849.5
858.0
876.6

5,401
5,487
5,595
5,770

3,916
3,922
3,953
4,030

216, 206
216,603

4,370
4,399
4,428
4,474

1, 276.7
1, 322. 9
1,356.9
1,402.2

873.5
886.3
895.1
910.0

5,859
6,060
6,203
6,395

4,009
4,060
4,092
4,150

217,
218,
218,
219,

L, 452
1,535
1,581
1,637
1,662
1,755

191, 889
194,303
196,560

198,712
200,706
202,677

215, 380

215, 827
217,073
217, 541

897
290
768
259

i Population of the United States including Armed Forces overseas; includes Alaska and Hawaii beginning 1960. Annual
data are for July 1 through 1973 and are averages of quarterly data beginning 1974. Quarterly data are average for the
period.
Source: Department of Commerce (Bureau of Economic Analysis and Bureau of the Census).




209

T A B L E B-23.—Gross saving and investment, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Gross saving

Gross private saving
Year or
quarter

Total
Total

1929
1933
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
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978 v

.

15.9
9
8.7
13 5
18.5
10.5
5.3
23
5.1
34.6
41 2
49.0
34 8
49.7
55.5
49.3
48.1
49 4
65.6
73.6
72.6
60 4
75.8
78.9
75.8
83 6
89.6
100.1
115.4
122 9
120.3
130.8
147.5
143.4
155.4
177.5
216.8
204.4
195.4
237.5
272.2
318.8

230.1
240.9
III—. 243.5
IV.... 235.6

1976: 1
II

1977: 1
II.._
III....
IV....
1978: 1
II
III....
IVP .

251.8
276.8
285.5
274.7
284.2
326.1
326.2

Gross
Personal business
saving saving >

Gross investment

Government surplus or
deficit (—), national
Capital
income and product
grants
accounts
received
by the Total
United
State States
Fed(net) 2
and
Total
eral
local

11.7
32
8.8
10 9
12.0
14.8
16.7
17 7
16.0
15.8
21 8
30.0
31 4
30.8
34.6
37.1
38.0
41 0
47.5
48.7
51.1
51 3
58.5
58.7
59.8
67 0
70.1
76.2
84.6
91 2
93.7
98.2
101.7
101.4
115.7
131.0
140.2
137.9
176.2
202.6
223.9
243.6

1.2
1.0
—1 4 -1 3
-2.2 -2.2
-j
-1.3
-3.8 -5.1
-31.4 - 3 3 . 1
- 4 4 . 1 -46.6
-51 8 -54.5
-39.5 -42.1
3.5
5.4
14 4 13.4
8.3
8.4
-3 4 -2 6
9.2
8.0
6.5
6.1
-3.8 -3.7
-6.9 -7.1
-7 1 -6 0
4.4
3.1
6.1
5.2
2.3
.9
-12 6 -10 3
-1.6 -1.1
3.0
3.1
- 4 3 -3.9
-3 8 -4 2
.3
.7
-2.3 -3.3
.5
.5
-1 3 -1 8
-14.2 -13.2
-5.5 -5.8
8.5
10.7
-9.4 -12.1
-18.3 -22.0
- 3 5 -17 3
6.3 - 6 . 7
- 3 . 2 -10.7
-64.4 -70.6
-33.2 - 5 3 . 8
18 6 -48.1
- 1 . 5 -29.4

275.1
270.8
274.1
262.7

73.6
69.9
68.1
60.7

201.5
200.9
206.0
202.0

-44.9
-29.9
-30.6
-27.1

-57.7
-46.4
-52.0
-59.1

12.8
16.4
21.4
32.0

259.6
288.6
310.7
304.3
305.4
319.9
325.7

52.2
67.5
74.3
73.7
82.4
76.3
76.0
72.3

207.4
221.1
236.4
230.6
223.0
243.6
249.7

-7.8
-11.8
-25.2
-29.6
-21.1
6.2
.6

-37.3
-40.3
-56.4
-58.6
-52.6
-23.6
-22.8

29.5
28.5
31.2
29.0
31.5
29.8
23.4

Statistical
discrepancy

17.0
1.6
10.1
14.6
19.0
9.7
3.5
5.1
9.2
35.3
42 9
47.8
35.9
51.7
59.5
51.9
51.4
52.4
68.0
72.8
72.8
62.0
75.5
78.2
77.3
87.6
93.4
102.3
116.3
126.1
122.1
130.2
144.2
141.4
156.8
179.2
219.4
210.1
202.8
241.7
276.9
319.7

16 2
0.8
1.4
.2
9.3
.9
13 1
15
17.9
1.1
-.2
9.9
-2.2
5.8
-2 1
72
10 6 - 1 4
30 7
46
34 0
90
20
45 9
35.3
.6
-2.1
53.8
59.2
.3
52.1
-.2
-1 9
53 3
52.7
-.3
2
68 4
71.0
1.8
69 2
36
.1
61.9
77 6 - 2 0
76.4
1.7
74 3
30
85.2
2.4
32
90 2
5.7
96.6
4.3
112 0
124.5
1.6
1.2
120 8
-1.4
131.5
146 2 - 2 . 0
.5
140.8
-3.2
160.0
-9.0
188 3
220.0
-.6
214.6
-4.5
190.9
11.9
243 0 - 1 . 2
297.8 -20.9
344.5 -24.8

1 l
.7
1.4
1 l
.5
-.8
-1.8
2 7
41
7
18
-1 2
1.0
2.0
40
2.7
33
3.0
25
-.8
2
1.7
- 2
-.7
16
4.0
3.7
2.2
.9
3.2
1.7
-.6
-3.3
-2.1
1.3
1.7
2.6
5.8
7.4
4 2
4.7
.9

.0
.0
.0
.0

233.5
245.0
247.5
241.0

231.5
243.5
249.9
247.1

2.0
1.5
-2.4
-6.1

3.4
4.1
4.0
5.3

.0
.0
.0
.0
.0
.0
.0
.0

255.2
280.4
292.6
279.5
286.4
326.6
326.6
339.1

272.5
295.6
309.7
313.5
322.7
345.4
350.1
359.9

-17.3
-15.2
-17.1
-34.1
-36.3
-18.9
-23.5
-20.7

3.4
3.7
7.1
4.8
2.2
.5
.4

-0.2
- l
.0
.6
1.3
1.8
2.5
2.7
2.6
1.9
1.0
.1
-.7
-1.2
-.4
-.0
.1
-1.1
-1.3
-.9
-1.4
-2 4
-.4
.1
-.4
5
.5
1.0
-.0
.5
-1.1
.3
2.1
2.8
0.9
3.7
.7
13.7
.7
13.0
.0
7.6 4 - 2 . 0
6.2
.0
20.7
.0
29.6
.0
27.8
.0

14.9
3.1
2 2 -1 0
2.1
10.9
14 2
33
22.2
10.2
41.9
27.0
49.4
32.7
54 1
36 5
44.6
28.5
29.2
13.4
26 8
49
40.6
10 6
67
38 2
41.6
10.8
49.4
14.8
53.1
16.0
55.0
17.0
15 6
56 5
62.4
14.9
68.4
19.7
71.7
20.6
73 0 21 7
77.3
18.8
75.8
17.1
80.0
20 2
20 4
87 4
88.9
18.8
102.4
26.1
114.9
30 3
124 2
33 0
134.6
40.9
38.1
136.3
35.1
136.8
50.6
151.9
57.3
173.0
180.4
49.4
210.5
70.3
209.5
71.7
259.8
83.6
270.7
68.0
290.8
66.9
76.7
320.4

Gross
private
Net
domes- foreign
tic in- investvestments
ment

1 Undistributed corporate profits with inventory valuation and capital consumption adjustments, corporate and noncorporate capital consumption allowances with capital consumption adjustment, and private wage accruals less disbursements.
2 Allocations of special drawing rights (SDR), except as noted in footnote 4.
s Net exports of goods and services less net transfers to foreigners and interest paid by government to foreigners plus
capital grants received by the United States, net.
* In February 1974, the U.S. Government paid to India $2,010 million in rupees under provisions of the Agricultural
Trade Development and Assistance Act. This transaction is being treated as capital grants paid to foreigners, i.e., a —$2.0
billion entry in capital grants received by the United States, net.
Source: Department of Commerce, Bureau of Economic Analysis.




210

TABLE B-24.—Saving by individuals, 1946-78 1
(Billions of dollars; quarterly data at seasonally adjusted annual rates]
Increase in financial assets

Year or
quarter

Total

Net investment in

Securities
Currency Savand
ings Gov- Corpo- CorpoTotal 2 deacern- rate rate
mand counts ment and
deforsecu- eign equiposits
rities* bonds ties*
6.3 - 1 . 5
3.4
1.6
2.2
1 3
2.6
1.8

InsurNonance
Con- corand Non- sumer porate
pen- farm dusion homes rables business
reassets
serves
(*)

Less: Net increase
in debt

Mortgage
debt Con- Other
on sumer
6
non- credit debt
farm
homes

-0.9
-.8
-.1
-.4

1.1
1.1
1.0
.7

5.3
5.4
5.3
5.6

3.6
6.7
9.1
8.4

3.9
9.5
10.4
10.9

2 1
2.0
7 1
2.0

3 6
4.7
4 6
4.4

2 7
3.2
29
2.9

-0 0
2.6
30
2.4

-.1
-.6
2.5
2.5
1.0

-.8
.2
-.0
-.1
-.9

.7
1.8
1.6
1.0
.8

6.9
6.3
7.7
7.9
7.8

11.8
11.7
11.3
12.3
12.7

14.2
10.4
7.5
9.6
7.0

7.0
4.4
2.0
.8
1 5

6.7
6.6
6.2
7.6
8 7

4.1
1.2
4.8
3.9
1 1

5.4
3.8
3.0
2.2
5 8

8.6
5.8
9.5
3.9
12.0
2.3
13.9 - 2 . 5
11.1 10.1

.7
1.0
.9
1.2
.4

1.0
2.0
1.5
1.5
.6

8.5
9.5
9.5
10.4
11.9

16.7
15.6
13.2
12.1
15.9

11.6
8.4
7.8
3.5
8.0

24
2.1
2.3
3.4

12.2
11.2
8.9
9.5
12.8

64
3.5
2.6
.2
6.4

69
3.5
4.0
6.3
7.8

2.4
.7 - . 5
1.8 - . 1
.3
1.3 - . 4 - 2 . 1
.1 - 2 . 5
1 7
-.1
5.1 - . 5

11.5
12.1
12.7
13.9
16.1

14.3
12.0
12.8
13.4
13.9

7.4
4.8
9.1
12 2
15.3

3.1
3.3
6.3
8.5
7.7

11.7
12.2
14.1
16.2
17.5

4.6
1.8
5.8
7.9
8.5

5.5
7.1
7.5
11.2
11.2

3.9
11.7
—.7
5.7
25.3

.5
1.4
4.0
4.2
5.4

-2.1

-4'. 2
-6.5
-3.7

16.9
19.2
19.0
20.2
21.3

13.4
12.6
10.9
14.3
14.2

19.1
21.2
18.7
24.3
23.8

11.2
9.4
8.5
9.4
11.4

17.0
13.8
12.5
17.1
18.5

9.6
6.4
4.5
10.0
10.4

13.4
11.1
16.1
16.2
13.6

43.6 - 7 . 2
67.8 - 9 . 9
74.6
1.6
64.2 22.0
57.2 22.6

9.5
8.3
4.4
1.3
4.7

-1.6
-5.1
-5.7
-6.9
-2.2

24.4
27.3
29.3
33.0
36.0

11.7
18.8
26.0
28.2
23.1

17.4
25.1
33.6
39.0
27.0

9.8
13 5
17.7
20.3
2.8

14.1
27 0
41.6
47 1
35.4

5.9
13 1
17.1
23 8
10.2

13.9
23.0
31.7
29 4
20.2

20.6
9.9
14.3

8.0 - 3 . 6
2.1 - 3 . 4
1.1 - 5 . 1

43.4
52.9
63.6

20.9
33.2
48.0

22.5 - . 3
40.1 - 3 . 5
49.4
5.6

38.1
61.3
93.0

9.4
23.6
35.0

16.3
30.3
44.4

24.3 110.4
28.0 99.8
22.3 135.2
6.9 88.0

7.2
3.6
6.7
39.6

.9 - 9 . 6
- . 0 -4.3
3.5 - 5 . 7
.2 - . 8

54.6
49.9
91.6
58.4

39.8
45.6
52.1
54.5

48.9
48.1
46.8
53.8

1.2 75.9
9.1 92.9
4.3 102.4
7.7 100.8

33.2
38.3
32.6
36.2

50.7
38.8
44.9
42.9

•22.2 90.1
23.5 111.8
17.9 107.4

30.2 - 1 . 0
31.3 - 4 . 1
25.8 - . 1

.1
-8.8
-7.5

59.0
72.8
65.9

57.8
58.2
59.9

47.4 - 3 . 1
59.0
1.6
57.7
3.9

38.0
51.6
43.4

47.7
61.1
50.3

1946
1947
1948
1949

22.2
21.0
25.3
21.4

18.9
13.2
9.1
10.0

5 6
.1
-2 9
-2.0

1950
1951
1952
1953
1954

30.5
34.1
29.9
31.8
27.8

13.7
19.2
23.1
22.8
22.1

2.6
4.6
1.6
1.0
2.2

1955
1956
1957
1958
1959

33.3
36.4
36.1
33.5
37.5

28.1
30.1
28.6
31.6
37.2

1.2
1.8
-.4
3.8
.8

1960
1961
1962
1963
1964

35.6
34.9
40.7
46.4
55.8

32.6
35.9
40.1
47.7
56.2

1.0
-.9
-1.2
4.2
5.2

12.1
18.3
26.2
26.3
26.2

1965
1966
1967
1968
1969

62.8
70.3
75.8
81.0
71.1

59.1
58.4
70.9
76.4
64.2

7.5
2.4
9.9
11.1
-2.5

28.0
19.1
35.3
31.1
9.1

1970
1971
1972
1973
1974

84.0
97.7
115.2
134.0
125.9

79.1
103.5
128.3
146.8
138.8

8.9
13.1
14.5
15.4
7.9

1975
1976
1977

145.7 166.4
154.4 199.8
166.3 235.7

5.2 84.8
13.8 108.1
20.4 108.3

1977: l . . _ .
II...
III..
IV...

148.8
146.2
206.4
163.7

218.7
213.5
283.0
227.6

1978: I . . . .
II-..
III..

161.2 236.9
195.5 278.8
180.8 245.8

2.5
4.8
7.8
8.2
9.2

-j

92.1
89.4
92.9

1 Sav i ng by households, personal trust funds, nonprofit institutions, farms, and other noncorporate business.
* Includes commercial paper and miscellaneous financial assets, not shown separately.
Consists of U.S. savings bonds, other U.S. Treasury securities, U.S. Government agency securities and sponsored
agency securities, and State and local obligations.
* Includes investment company shares.
* Private life insurance reserves, private insured and noninsured pension reserves, and government insurance and
pension reserves.
* Security credit, policy loans, noncorporate business mortgage debt, and other debt.
2

Source: Board of Governors of the Federal Reserve System.




211

TABLE B-25.—Money income (in 1977 dollars) and poverty status of families and unrelated
individuals by race of head, 1947-77
White

Total
Total
number
(millions)

Median
income

37.2
38.6
39 3
39.9
40 6
40.8
41 2
42.0
42 9
43 5
1956
43.7
1957
44.2
1958
45.1
1959
1960
M5.5
M6.4
1961
1962
M7.1
1963
. . M7.5
1964
148.0
1965
. _. M8.5
1966
U9.2
150.1
1967
1968
150.8
151.6
1969
•52.2
1970
1971
53.3
1972 ._
_. ___ 54.4
55.1
1973
55.7
1974
55.7
19742
56.2
1975
__
56.7
1976
57.2
1977

$8,223
8,024
7 899
8,356
8 652
8,881
9 611
9,396
9,999
10 658
10,692
10,661
11,262
11, 500
11,617
11,931
12,368
12, 834
13, 362
14,064
14,398
15, 036
15, 593
15, 399
15, 389
16,102
16, 433
15, 773
15,855
15,447
15,923
16, 009

Year

FAMILIES
1947
1948
1949
1950
1951
1952
1953
1954
1955

34.1
35.3

3.2
3.8
4.0
4.3

54

18.5
18.1
18.1
1/.2
15.9
lb.O
13.9
11.8
11.4
10.0
9.7

10.1
10.0
9.3

8.8
9.2

8.8
9.7
9.4
9.3

4.8
5.4
6.6
7.4
8.4
8.8
9.8

10.7
11.8
13.4
14.6
16.7
18.8
18.2
18.0
20.5
20.9
18.9
21.4
19.4
20.8
22.4

38.2
39.0
39.5
39.7
40.2
40.9
41.1
41.9
42.4
42.7
43.1
43.5
44.1
44.8
45.4
46.0
46.5
47.6
48.5
48.9
49.5
49.4
49.9
50.1
50.5

Median
income

8.2
8 4
90
94
9 1
9 7
9.5
97
.

9.9
9.8

10.4
10 9
10.9
ill.l
Ul 2
U1.0
111.2
112.1
112.2
U2.5
U3.2
U3.9
114.6
U5.5
16.3
16.8
18.3
18.9
18.9
20 2
21.5
23.1

$2,659
2,509
2 669
2,630
2,787
3 218
3,162
2,756
2,981
3,179
3,215
3, 115
3,238
3,519
3 552
3,511
3,563
3,874
4,135
4,276
4,318
4,853
4,845
4,896
4,962
5,100
5,637
5,455
5,656
5,497
5,722
5,907

11,127
11,108
11,732
11,940
12,115
12,495

12,961
13, 398
13, 927
14,611
14, 945
15, 567
16,190
15, 974
15, 968

16, 729
17,175
16,412
16, 476
16, 065
16, 539
16, 740

1.2

1 9
2.1
1.8
2.2
2.3

8.3
8.5
8.5

3.2
37

8.9
9.2

3.7

9.3

3.7
4 8
5.8
6.2
6.6
7.4
7.4
8.2
10.1
9.9
10.3
10.6
11.2
12.6
11.0
11.5
11 0
11.8
12.6

3.3

15.2
14.9
14.8
13.9
12.8
12.2
11.1
9.3
9.0
8.0
7.7
8.0
/.9
7.1

6.6
7.0
6.8
7.7
7.1
7.0

Median
income

over

3.1

$8, 566
8,332
8,215
8,672
9,003
9,393
9,965
9,781
10,439
11,153

Percent with
incomes

3.6
4.1
4.3
4.7
5.8
5.3
5.8
7.2
8.0
9.2
9.5

10.6
11.5
12.8
14.5
15.6
17.7
20.0
19.3
19.1
21.9
22.4
20.2
22.7
20.7
22.2
23.9

3.8
3.9
4.0
4.0
4.0

4.2
4.3
4.5
4.6
4.8
4.8
4.8
5.0
5.0

5.1
5.2
5.4
5.7
5.9
6.1
6.3
6.3
6.4

6.6
6.7

$4,378
4,451
4,195
4,704
4,741
5,338
5,587
5,448
5,757
5,868
5,949
5,690
6,060
6,610
6,463
6,666
6,857
7,498
7,670
8,759
9,246
9,737
10,234

10,169
10,046
10, 293

10,358
10,156
10, 541
10, 495
10, 455
10,142

9.6
9.6
9.5
9.7
10.4
10.5
10.7
11.3
12.0
12.5
13.4
14.2
14.5
15.8
16.3
16.3
17.5
18.6
19.9

$2,809
2,651
2,881
2,806
2,934
3,467
3,338
2,966
3,169
3,263
3,440
3,337
3,459
3,805
3,819
3,758
3,735
4,080
4,312
4,496
4,483
5,142
5,088
5,124
5,185
5,326
5,823
5,697
5,860
5,741
5,968
6,131

1.0
1.0
1.2
2.2

2.4
2.0
2.5
2.5

44.1
43.0
43 2
42.7
42.0
40.7
38.1
36.1
36.5
32.2
32.1
30.8
29.6
27.1
23.7
23.2
21.8
22.7
22.7
20.4

1.4
1.4
1.3

4.2

1.6

3.7
4.2

4.1
54
6.5
6.9
7.4
8.3
8.2
8.9
11.0
10.9
11.2
11.4
12.0
13.3
11.8
12.2
11.7
12.5
13.3

Below
pov- $25,000
and
erty
over
level

0.5
.4
.5
.3

50.4
49.0
49.0
48.0
43.7
40.0
39.7
33.9
32.1
28.2
26.9
28.1
27.4
27.7
26.2
26.0
25.1
25.3
26.4
26.5

.6
.3
1.0
1.0
1.7
2.4
1.9
2.7
3.3
3.0
3.9
5.7
7.3
8.0
8.4
8.1
9.3

9.4
8.5
10.7
9.4

10.0
10.8

Below $15,000
povand
erty
over
level

Below
pov- $15,000
and
erty
over
level

7. 3

46.1
45.2
45 9
45.4
44.2
42.7
39.8
38.3
38.1
34.0
34.0
32.9
31.6
29.0
25.6
25.5
24.1
25 1
24.9
22.6

Total
numBelow $25,000 ber
(milpovand
lions)
erty

level

Below $15,000
povand
erty
over
level

UNRELATED
INDIVIDUALS
1947
1948
1949
1950
1951
1952
1953.. .
1954
1955
1956
.
1957
1958
1959
1960
1961
1962
1963
1964
1965
. _
1966
1967
1968
1969
1970..
1971
1972...
1973
1974
1974*
1975
1976. .
1977

Total
numBelow $25,000 ber
(milpovand
lions)
erty
over
level

Black and other races

Percent with
incomes

Percent with
incomes

1.5
1.6
1.5
1.6
1.5
1.5
1.6
1.7
1.6
1.8
1.8
2.0
1.9
2.1
2.3
2.5
2.6
2.6
2.7
2.9
3.2

$2,024
1,986
2,083
2,056
2,168
2,398
2,624
1, 969
2,116
2,423
2,186
2,263
2, 234
2,185
2,345
2,509
2,564
2,796
3,144
2,827
3,312
3,482
3,587
3,501
3,479
3,956
4,351
3,870
4,097
3,819
3,919
4,642

0.6
.4

.3
.5
.2
.7

57.4
59.3
62 7
62.1
58.3
55.0
50.7
53.1
48.2
45.7
45.5
46.7
44.9
40.9
37.8
40.0
38.0
40.9
39.5
35.9

.3
.6
1.0

1.1
1.4
2.0
1.2
2.2
1.8
2.1

3.3
4.1
3.6
3.4
4.7
6.1
7.9
6.1
6.9
6.4

7.0
8.1

1
Revised using population controls based on the 1970 census. Such controls are not available by race.
2 Based on revised methodology procedures.
Note.—The poverty level is based on the poverty index adopted by a Federal interagency committee in 1969. That index
reflects different consumption requirements for families based on size and composition, sex and age of family head, and
farm-nonfarm residence. The poverty thresholds are updated every year to reflect changes in the consumer price index.
For further details, see "Current Population Reports," Series P-60, No. 116, Bureau of the Census.
Source: Department of Commerce, Bureau of the Census.




212

POPULATION, EMPLOYMENT, WAGES, AND
PRODUCTIVITY
TABLE E-26.—Population by age groups, 1929-78

[Thousands of persons]
Age (years)
July 1

Total
Under 5

5-15

16-19

20-24

25-44

45-64

65 and
over

1929

121,767

11,734

26, 800

9,127

10,694

35, 862

21, 076

6,474

1933

125,579

10,612

26, 897

9,302

11,152

37,319

22,933

7,363

1939

130,880

10,418

25,179

9,822

11,519

39, 354

25, 823

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

24,811
24,516
24, 231
24, 093
23,949

9,895
9,840
9,730
9,607
9,561

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

139,928
141,389
144,126
146, 631
149,188

12, 979
13, 244
14, 406
14,919
15, 607

23, 907
24,103
24, 468
25, 209
25, 852

9,361
9,119
9,097
8,952
8,788

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

26,721
27, 279
28, 894
30, 227
31, 480

8,542
8,446
8,414
8,460
8,637

11,680
11,552
11,350
11,062
10,832

45, 672
46,103
46,495
46, 786
47, 001

30, 849
31, 362
31, 884
32,394
32, 942

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

32,682
33,994
35, 272
36, 445
37, 368

8,744
8,916
9,195
9,543
10,215

10,714
10,616
10, 603
10,756
10, 969

47, 194
47,379
47, 440
47, 337
47, 192

33, 506
34, 057
34, 591
35, 109
35, 663

14,525
14,938
15, 388
15, 806
16, 248

1960
1961
1962
1963
1964

180,671
183,691
186,538
189, 242
191,889

20,341
20, 522
20, 469
20,342
20,165

38, 494
39, 765
41,205
41,626
42, 297

10,683
11,025
11,180
12,007
12,736

11,134
11,483
11,959
12,714
13, 269

47,140
47, 084
47, 013
46, 994
46, 958

36,203
36,722
37,255
37,782
38,338

16,675
17,089
17,457
17,778
18,127

1965
1966
1967
1968
1969

194, 303
196, 560
198,712
200,706
202,677

19,824
19, 208
18, 563
17,913
17,376

42,938
43,702
44. 244
44,622
44, 840

13,516
14,311
14,200
14,452
14, 800

13,746
14,050
15,248
15,786
16,480

46,912
47,001
47,194
47,721
48, 064

38,916
39, 534
40,193
40, 846
41,437

18,451
18,755
19,071
19, 365
19,680

1970
1971
1972 .
1973
1974

204, 878
207, 053
208, 846
210, 410
211,901

17,148
17,177
16,990
16, 694
16, 288

44, 774
44, 441
43,948
43, 227
42, 538

15,275
15,635
15,946
16,310
16, 590

17,184
18,089
18,032
18, 345
18, 741

48,435
48,811
50, 254
51,411
52, 593

41,975
42,413
42,785
43, 077
43,319

20, 087
20,488
20, 892
21,346
21,833

1975
1976
1977...
1978

213,
215,
216,
218,

15, 879
15, 345
15,241
15,361

41,
41,
40,
39,

16, 793
16, 928
16, 966
16,921

19, 229
19, 629
20, 076
20,441

53,
55,
56,
58,

43,
43,
43,
43,

22, 420
22,954
23, 507
24, 054

1945
1946
1947
1948
1949 .

. .

559
152
863
548

956
459
574
598

735
130
705
320

Note.—Includes Armed Forces overseas beginning 1940. Includes Alaska and Hawaii beginning 1950.
Source: Department of Commerce, Bureau of the Census.




213

546
707
793
852

TABLE B-27.—Noninstitutional population and the labor force, 1929-78
[Monthly data seasonally adjusted, except as noted]
Civilian labor force

Year or
month

Noninstitutional
population i

Employment

Armed
Forces i
Total
Total

Nonagricultural

Agricultural

Unemployment

Unemployment
rate
(percent
of
civilian
labor
force)

260

49,180

47 630

10 450

37 180

Total

Males

Females

Percent

Thousands of persons 14 years of age and over
1929

Civilian labor force
participation rate *

1 550

3.2
24.9

1933

250

51, 590

38, 760

10, 090

28,670

12,830

1939

370

55,230

45, 750

9,610

36,140

9,480

17.2

100,380
101,520
102,610
103,660
104,630

540
1,620
3,970
9,020
11,410

55,640
55,910
56,410
55,540
54,630

47,520
50,350
53,750
54,470
53,960

9,540
9,100
9,250
9,080
8,950

37,980
41,250
44,500
45,390
45,010

8,120
5,560
2,660
1,070
670

14.6
9.9
4.7
1.9
1.2

55.7
56.0
57.2
58.7
58.6

83.7
84.3
85.6
86.4
87.0

28.1
28.7
31.3
36.0
36.5

105,530
106,520
107,608

11,440
3,450
1,590

53,860
57,520
60,168

52,820
55, 250
57,812

8,580
8,320
8,256

44,240
46,930
49,557

1,040
2,270
2,356

1.9
3.9
3.9

57.2
55.8
56.8

84.8
82.6
84.0

35.9
31.2
31.0

1940
1941
1942.
1943
1944
1945
1946.
1947

_

Thousands of persons 16 years of age and over
1947
1948
1949. .

103,418
104 527
105,611

1,591
1 459
1,617

59,350
60 621
61,286

57,038
58 343
57,651

7,890
7,629
7,658

49,148
50 714
49,993

2,311
2,276
3,637

3.9
3.8
5.9

58.3
58.8
58.9

86.4
86.6
86.4

31.8
32.7
33.1

1950
1951
1952
19533
1954

106,645
107,721
108,823
110,601
111,671

1,650
3,100
3,592
3,545
3,350

62,208
62,017
62,138
63,015
63,643

58 918
59,961
60 250
61,179
60,109

7,160
6,726
6,500
6,260
6,205

51,758
53, 235
53,749
54,919
53,904

3,288
2,055
1,883
1,834
3,532

5.3
3.3
3.0
2.9
5.5

59.2
59.3
59.0
58.9
58.8

86.4
86.5
86.3
86.0
85.5

33.9
34.6
34.7
34.4
34.6

1955
1956
1957
1958
1959

112,732
113,811
115,065
116,363
117,881

3,049
2,857
2,800
2,636
2,552

65,023
66,552
66,929
67,639
68,369

62,170
63,799
64,071
63,036
64,630

6,450
6,283
5,947
5,586
5,565

55,722
57,514
58,123
57,450
59,065

2,852
2,750
2,859
4,602
3,740

4.4
4.1
4.3
6.8
5.5

59.3
60.0
59.6
59.5
59.3

85.3
85.5
84.8
84.2
83.7

35.7
36.9
36.9
37.1
37.1

1960s
1961
1962 3
1963
1964

119,759
121,343
122,981
125,154
127, 224

2,514
2,572
2,828
2,738
2,739

69,628
70,459
70,614
71,833
73,091

65,778
65,746
66,702
67,762
69,305

5,458
5,200
4,944
4,687
4,523

60,318
60,546
61,759
63,076
64,782

3,852
4,714
3,911
4,070
3,786

5.5
6.7
5.5
5.7
5.2

59.4
59.3
58.8
58.7
58.7

83.3
82.9
82.0
81.4
81.0

37.7
38.1
37.9
38.3
38.7

1965
1966
1967
1968
1969

129,236
131,180
133,319
135,562
137,841

2,723
3,123
3,446
3,535
3,506

74,455
75,770
77,347
78,737
80,734

71,088
72,895
74,372
75,920
77,902

4,361
3,979
3,844
3,817
3,606

66,726
68,915
70,527
72,103
74,296

3,366
2,875
2,975
2,817
2,832

4.5
3.8
3.8
3.6
3.5

58.9
59.2
59.6
59.6
60.1

80.7
80.4
80.4
80.1
79.8

39.3
40.3
41.1
41.6
42.7

1970
1971
1972 3
1973 3
1974

140,182
142,596
145,775
148,263
150,827

3,188
2,817
2,449
2,326
2,229

82,715
84,113
86,542
88,714
91,011

78,627
79,120
81,702
84,409
85,935

3,462
3,387
3,472
3,452
3,492

75,165
75,732
78,230
80,957
82,443

4,088
4,993
4,840
4,304
5,076

4.9
5.9
5.6
4.9
5.6

60.4
60.2
60.4
60.8
61.2

79.7
79.1
79.0
78.8
78.7

43.3
43.3
43.9
44.7
45.6

1975
1976
1977
1978 3

153,449
156,048
158,559
161, 058

2,180
2,144
2,133
2,117

92,613
94,773
97, 401
100,420

84,783
87,485
90, 546
94,373

3,380
3,297
3,244
3,342

81,403
84,188
87,302
91,031

7,830
7,288
6,855
6,047

8.5
7.7
7.0
6.0

61.2
61.6
62.3
63.2

77.9
77.5
77.7
77.9

46.3
47.3
48.4
50.0

See next page for continuation of table.




214

TABLE E-27.—Noninstitutional population and the labor force, 1929-78— Continued
[Monthly data seasonally adjusted, except as noted]
Civilian labor force

Year or month

Noninstitutional
population 1

Employment
Armed
Forces»
Total
Total

Agricultural

Nqnagricultural

Unemployment

Unemployment
rate
(percent
of
civilian
labor
force)

Thousands of persons 16 years of age and over

154,915
155,106
155,325
155,516
155,711
155,925

2,140
2,146
2,147
2,144
2,142
2,137

93,614
93,683
93,909
94, 356
94,475
94, 527

86,224
86,488
86, 805
87,138
87,438
87, 321

3,342
3,275
3,271
3,398
3,302
3,272

82,882
83,213
83,534
83,740
84,136
84,049

7,390
7,195
7,104
7,218
7,037
7,206

July—
Aug.Sept..
Oct...
Nov...
Dec...

156,142
156,367
156,595
156,788
157,006
157,176

2,140
2,147
2,145
2,147
2,149
2,146

95,188
95, 285
95,143
95,163
95,745
95, 840

87,818
87,900
87,863
87,840
88,278
88,454

3,320
3,349
3,257
3,286
3,243
3,231

84,498
84, 551
84,606
84,554
85,035
85,223

7,370
7,385
7,280
7,323
7,467
7,386

157, 381
157, 584
157,782
157,986
158, 228
158,456

2,133
2,137
2,138
2,132
2,128
2,129

95,774
96,316
96,654
96,749
97,062
97, 508

88,659
89,048
89, 503
89, 805
90,166
90, 500

3,130
3,188
3,191
3,261
3,349
3,291

85, 529
85, 860
86,312
86, 544
86,817
87, 209

July..
Aug..
Sept..
Oct.Nov..
Dec...

158,682
158,899
159,114
159,334
159, 522
159,736

2,135 97,311
2,137 97,698
2,131 97,811
2,134 98,028
2,132 98,838
2,129 98,748

90,605
90,903
91,187
91,374
92,203
92, 561

3,198
3,219
3,188
3,238
3,364
3,304

1978: Jan 3 . .
Feb...
Mar..
Apr...
May..
June..

159,937
160,128
160, 313
160, 504
160,713
160,928

2,121 99,215
2,124 99,139
2,122 99,435
2,118 99,767
2,113 100,109
2,098 100, 504

92,923
93,047
93, 282
93, 704
93,953
94,640

July..
Aug..
Sept..
Oct...
Nov..
Dec...

161,148
161, 348
161, 570
161,829
162,033
162,250

2,116
2,122
2,123
2,122
2,117
2,108

94, 446
94,723
95,010
95, 241
95, 751
95, 855

100,622
100,663
100,974
101,077
101, 628
101, 867

Total

Males

Females

Percent

1976:Jan....
Feb....
Mar....
Apr
May....
June_.

1977: J a n . . .
Feb...
Mar..
Apr.
Apr
May....
Way.
June

Civilian labor force
participation rates

79
.
77
.
76
.
76
.
74
.
76
.
77
.
78
.
77
.
77
.
78
.

61.3
61.2
61.3
61.5
61.5
61.5

77.4
77.3
77.3
77.7
77.6
77.3

46.8
46.9
47.0
47.1
47.1
47.3

61.8
61.8
61.6
61.5
61.8
7.7 61.8

77.6
77.6
77.5
77.5
77.6
77.5

47.6
47.7
47.3
47.3
47.7
47.7

7,115
7,268
7,151
6,944
6,896
7,008

7.4 61.7
7 5 62.0
.
7.4 62.1
7.2 62.1
7 1 62.2
.
7.2 62.4

77.4
77.6
77.6
77.5
77.6
77.8

47.6
47.9
48.2
48.3
48.4
48.5

87,407
87,684
87,999
88,136
88,839
89,257

6,706
6,795
6,624
6,654
6,635
6,187

6 9 62.2
.
7.0 62.3
6 8 62.3
.
6 8 62.4
.
6 7 62.8
.
6 3 62.7
.

77.6
77.6
77.3
77.8
78.0
77.9

48.3
48.6
48.8
48.5
49.2
49.0

3,363
3,280
3,334
3,274
3,243
3,424

89, 560
89,767
89,948
90, 430
90,710
91,216

6,292
6,092
6,153
6,063
6,156
5,864

6 3 62.9
.
6 1 62.7
.
6 2 62.9
.
6 1 63.0
.
6 1 63.1
.
5.8 63.3

78.0
77.8
77.9
77.8
77.9
78.0

49.2
49.2
49.4
49.7
49.9
50.1

3,377
3,351
3,406
3.374
3,275
3,387

91, 069
91, 372
91,604
91, 867
92, 476
92, 468

6,176
5,940
5,964
5,836
5,877
6,012

6 1 63.3
.
5 9 63.2
.
5 9 63.3
.
5.8 63.3
5.8 63.6
5 9 63.6
.

77.8
77.7
77.7
77.7
78.0
78.0

50.3
50.2
50.5
50.3
50.6
50.7

i Not seasonally adjusted.
* Civilian labor force as percent of civilian noninstitutional population.
3 Not strictly comparable with earlier data due to population adjustments as follows: Beginning 1953, introduction of
1950 census data added about 600,000 to population and about 350,000 to labor force, total employment, and agricultural
nsu
l
,t
empyment,
employment. Beginning 1960, inclusion of Alaska and Hawaii added about 500,000 to population, about 300,000 to labor
l
9
l k
d H i i d d d b t 500000 t
lti
b t 300000 t l b
force, and about 240,000 to nonagricultural employment. Beginning 1962, introduction of 1960 census data reduced population by about 50,000 and labor force and employment by about 200,000. Beginning 1972, introduction of 1970 census
data added about 800,000 to civilian noninstitutional population and about 333,000 to labor force and employment. A
subsequent adjustment based on 1970 census in March 1973 added 60,000 to labor force and to employment. Beginning
1978, changes in sampling and estimation procedures introduced into the household survey added about 250,000 to labor
force and to employment. Unemployment levels and rates were not significantly affected.
Note.—Labor force data in Tables B-27 through B-32 are based on household interviews and relate to the calendar
week including the 12th of the month. For definitions of terms, area samples used, historic comparability of the data,
comparability with other series, etc., see "Employment and Earnings."
Source: Department of Labor, Bureau of Labor Statistics.




215

TABLE B-28.—Civilian employment and unemployment by sex and age, 1947—78
[Thousands of persons 16 years of age and over; monthly data seasonally adjusted]
Employment

Unemployment

Males

Females

Males

Females

Year or
month
Total
Total

16-19
years

20

years
and
over

Total

20

Total

20

20

years
and
over

16-19
years

Total

2,311 1,692
2,276 1,559
3,637 2,572

270
255
352

1,422 619
1,305 717
2,219 1,065

144
152
223

475
564
841

16-19 years
years and
over

Total

16-19 years
years and
over

1947...
1948...
1949...

57, 038
58,343
57,651

40,995
41,725
40,925

2,218 38,776
2,345 39,382
2,124 38,803

16,045
16,617
16,723

1,691 14,354
1,683 14,937
1,588 15,137

1950...
1951...
1952
1953 L .
1954...

58,918
59,961
60, 250
61,179
60,109

41,578
41,780
41,682
42,430
41,619

2,186
2,156
2,106
2,135
1,985

39,394
39,626
39,578
40, 296
39,634

17,340
18,181
18, 568
18,749
18,490

1,517
1,611
1,612
1,584
1,490

15, 824 3,288 2,239
16,570 2,055 1,221
16,958 1,8831,185
17,164 1,834 1,202
17,000 3,532 2,344

318
191
205
184
310

1,922 1,049
834
1,029
698
980
632
1,019
2,035 1,188

195
145
140
123
191

854
689
559
510
997

1955...
1956..
1957...
1958...
1959...

62,170
63,799
64,071
63, 036
64,630

42,621
43,379
43,357
42,423
43,466

2,095
2,164
2,117
2,012
2,198

40, 526
41,216
41,239
40,411
41,267

19,551
20,419
20,714
20,613
21,164

1,548
1,654
1,663
1,570
1,640

18,002
18,767
19,052
19,043
19,524

2,852 1,854
2,750 1,711
2,859 1,841
4,602 3, 098
3,740 2,420

274
269
299
416
398

998
1,580
1,442 1,039
1,541 1,018
2,681 1,504
2,022 1,320

176
209
197
262
256

823
832
821
1,242
1,063

19601._
1961...
1962 i__
1963...
1964...

65, 778
65, 746
66,702
67,762
69,305

43,904
43, 656
44,177
44,657
45,474

2,360
2,314
2,362
2,406
2, 587

41, 543
41,342
41,815
42, 251
42, 886

21,874
22,090
22,525
23,105
23,831

1,769
1,793
1,833
1,849
1,929

20,105
20, 296
20,693
21,257
21,903

3,852
4,714
3, 911
4,070
3,786

425
479
407
500

1,366
1,717
1,488
1,598
1,581

286
349
313
383
386

1,080
1,368
1,175
1,216
1,195

1965...
1966...
1967...
1968...
1969...

71,088
72,895
74,372
75,920
77,902

46,340
46,919
47,479
48,114
48,818

2,918
3,252
3,186
3,255
3,430

43,422
43,668
44,293
44,859
45,388

24,748

2,118
2,469
2,497
2,525
2,686

22,630
23, 510
24, 397
25,281
26,397

3,366 1,914
2, 875 1, 551
2,975 1,508
2,817,1,419
2,832 1,403

479 1,435 1,452
432 1,120 1,324
448 1,060 1,468
993 1,397
427
963 1,429
441

395
404
391
412
412

1,056

25,976
26,893
27,807
29,084

1970...
1971...
19721
19731..
1974...

78,627
79,120
81,702
84,409
85, 935

48,960
49,245
50, 630
51, 963
52, 518

3,407
3,470
3,750
4,017
4,074

45,553
45,775
46,880
47,946
48,445

29,667
29,875
31.072
32,446
33,417

2,734
2,725
2,972
3,219
3,329

26,933
27,149
28,100
29,228
30, 088

4,088 2,235
4,993 2,776
4.8402.635
4, 304 2, 240
5,076 2,668

599
691
707
647
749

1,853
2,217
2,205
2,064
2,408

506
567
535
579
660

1,347
1, 650
1,610
1,485
1,748

1975...
1976...
1977. .
19781..

84,783
87, 485
90, 546
94, 373

51,230
52,391
53, 861
55, 491

3,803
3,904
4,124
4,279

47,427 33,553
48, 486 35,095
49, 737 36,685
51,212 38, 882

3,243
3,365
3,486
3,702

30,310
31,730
33,199
35,180

7,830 4,385
7,288 3,968

957 3,428 3,445
928 3,041 3,320
861 2,727 3,267
799 2,252 2,996

795

6,855 3,588
6,047 3,051

773
781
760

2,649
2,546
2,486
2,236

1977:
Jan..
Feb..
Mar..
Apr.
May..
June-

88, 659
89, 048
89, 503
89, 805
90,166
90,500

52, 959
53,117
53, 333
53, 470
53, 597
53,910

3,941
3,977
4,022
4,082
4,133
4,147

49, 018
49, 140
49,311
49, 388
49, 464
49,763

35,
35,
36,
36,
36,
36,

700
931
170
335
569
590

3,332
3,444
3,463
3,442
3,340
3,533

32,
32,
32,
32,
33,
33,

368
487
707
893
229
057

7,115 3,849
7,268 3.948
7,15l|3; 772
6, 944 3, 627
6, 896 3, 673
7,008 3,629

866
889
895
851
871
943

2,983
3,059
2,877
2,776
2,802
2,686

3,266
3,320
3,379
3,317
3,223
3,379

813
781
797
802
782
838

2,453
2,539
2,582
2,515
2,441
2,541

July..
Aug..
Sept.
Oct..
Nov_.
Dec.

90, 605
90, 903
91,187
91, 374
92, 203
92, 561

53,
53,
54,
54,
54,
54,

908
980
046
369
706
922

4,170
4,131
4,104
4,222
4,276
4,308

49, 738
49, 849
49, 942
50,147
50, 430
50, 614

36,
36,
37,
37,
37,
37,

697
923
141
005
497
639

3,507
3,661
3,474
3,514
3,550
3,573

33, 190
33,262
33, 667
33, 491
33,947
34, 066

6,706 3,506
6,795 3,542
6, 624J3, 352
6,654 3,433
6,635 3,331
6,187 3,146

846
875
864
828
842

2,660
2,667
2,488
2,605
2,489
759 2,387

3,200
3,253
3,272
3,221
3,304
3,041

757
764
796
781
780

2,443
2,489
2,476
2,440

679

2,524
2,362

54, 992
54, 943
55, 042
55,184
55, 372
55, 766

4,287
4,158
4,201
4,187
4,253
4,429

50, 705
50, 785
50, 841
50, 997
51,119
51, 337

37, 931
38,104
38, 240
38, 520
38, 581
38, 874

3,573
3,564
3,562
3,646
3,695
3,776

34, 358
34,540
34, 678
34, 874
34, 886
35, 098

6,292
6,092
6,153
6, 063
6,156
5,864

3,256
3,221
3,235
3, 096
3, 032
2,816

792
845
841
817
768
704

2,464
2,376
2,394
2,279
2,264
2,112

3,036
2,871
2,918
2,967
3,124
3,048

748
759
749
756
802
754

2,288
2,112
2,169
2,211
2,322
2,294

55,
55,
55,
55,
56,
56,

4,317
4,365
4,307
4,306
4,271
4,234

51,214
51,215
51, 287
51, 448
51, 825
51,838

38,915
39,143
39, 416
39, 487
39, 655
39, 783

3,755
3,831
3,725
3,761
3,768
3,793

35,160
35, 312
35, 691
35, 726
35, 887
35, 990

6,176 2,971
5,940 2,937
5,964j2,965
5,836 2,971
5, 877 2, 923
6,012 3,044

784
756
793
826
810
849

2,187
2,181
2,172
2,145
2,113
2,195

3,205
3,003
2,999
2,865
2,954
2,968

792
111
769
731
746
741

2,413
2,231
2,230
2,134
2,208
2,227

1978:
J a n . . 92, 923
Feb.. 93, 047
Mar.. 93, 282
Apr._ 93, 704
May.. 93, 953
June- 94, 640
July..
Aug..
Sept.
Oct..
Nov..
Dec.
1

94, 446
94, 723
95, 010
95, 241
95,751
95, 855

531
580
594
754
096
072

See footnote 3, Table B-27.

Note.—See Note, Table B-27.

Source: Department of Labor, Bureau of Labor Statistics.




216

2,486
2,997
2,423
2,472
2,205

2,060
2,518
2,016
1,971
487 1,718

1,636
2,086
1,928
1,594
1,918

921

1,078

985

1,016

TABLE B-29.—Selected employment and unemployment data, 1948-78
[Percent1; monthly data seasonally adjusted]
Unemployment rate'

Year or month

All
workers

Both
sexes
16-19
years

Employment as 5
percent
of population

By selected groups

By sex and age

ExpeWomen FullMales Females rienced
Marwho
wage
20
20
time
ried
head
and
years years
and
salary men* families workand
ers«
over
over workers

Bluecollar
workers <

Total

4.2
8.0

55.8
54.6

7.2
3.9
3.6
3.4
7.2
5.8
5.1
6.2
10.2
7.6

55.2
55.7
55.4
55.3
53.8
55.1
56.1
55.7
54.2
54.8

7.8
9.2
7.4
7.3
6.3
5.3
4.2
4.4
4.1
3.9

54.9
54.2
54.2
54.1
54.5
55.0
55.6
55.8
56.0
56.5

54.0
54.3
54.8
55.4
55.7
55.9
56.5

55.2
56.1
56.8
57.2
56.9
56.6
56.7

White

Black
and
other

1948...
1949

3.8
5.9

9.2
13.4

3.2
5.4

3.6
5.3

4.3
6.8

3.5

5.4

1950
1951 . .
1952.
1953 . .
1954
1955
1956
1957
1958
1959

5.3
3.3
3.0
2.9
5.5
4.4
4.1
4.3
6.8
5.5

12.2
8.2
8.5
7.6
12.6
11.0
11.1
11.6
15.9
14.6

4.7
2.5
2.4
2.5
4.9
3.8
3.4
3.6
6.2
4.7

5.1
4.0
3.2
2.9
5.5
4.4
4.2
4.1
6.1
5.2

6.0
3.7
3.3
3.2
6.2
4.8
4.4
4.6
7.2
5.7

4.6
1.5
1.4
1.7
4.0
2.8
2.6
2.8
5.1
3.6

5.0
2.6
2.5

5.5
6.7
5.5
5.7
5.2
4.5
3.8
3.8
3.6
3.5

14.7
16.8
14.7
17.2
16.2
14.8
12.8
12.8
12.7
12.2

4.7
5.7
4.6
4.5
3.9
3.2
2.5
2.3
2.2
2.1

5.1
6.3
5.4
5.4
5.2
45
3.8
4.2
3.8
3.7

5.7
6.8
5.6
5.5
5.0
43
3.5
3.6
3.4
3.3

3.7
4.6
3.6
3.4
2.8
2.4
1.9
1.8
1.6
1.5

4.9
4.4
4.4

5.5
4.9
4.2
3.5
3.4
3.1
3.1

4.9
5.9
5.6
4.9
5.6
8.5
7.7
7.0
6.0

15.2
16.9
16.2
14.5
16.0
19.9
19.0
17.7
16.3

3.5
4.4
4.0
3.2
3.8
6.7
5.9
5.2
4.2

4.8
5.7
5.4
4.8
5.5
8.0
7.4
7.0
6.0

4.8
5.7
5.3
4.5
5.3
8.2
7.3
6.6
5.6

2.6
3.2
2.8
2.3
2.7
5.1
4.2
3.6
2.8

5.4
7.3
7.2
7.0
7.0
10.0
10.0
9.3
8.5

4.5
5.5
5.1
4.3
5.1
8.1
7.3
6.5
5.5

6.2
7.4
6.5
5.3
6.7
11.7
9.4
8.1
6.9

56.1
55.5
56.0
56.9
57.0
55.3
56.1
57.1
58.6

56.2
55.7
56.4
57.3
57.5
55.9
56.8
57.9
59.3

55.5
53.7
53.0
53.9
53.0
50.0
50.6
51.1
53.3

1977: Jan
Feb
Mar
Apr
May
June

7.4
7.5
7.4
7.2
7.1
7.2

18.8
18.4
18.4
18.0
18.1
18.8

5.7
5.9
5 5
5.3
5.4
5.1

7.0
7.2
7.3
7.1
6.8
7.1

7.0
7.2
6.9
6.7
6.7
6.6

4.0
4.1
3.8
3.7
3.7
3.5

9.5
9.5
9.8
9.4
9.0
9.4

6.9
7.0
6.8
6.7
6.6
6.6

8.6
8.8
8.5
8.1
8.0
8.0

56.3
56.5
56.7
56.8
57.0
57.1

57.1
57.3
57.5
57.7
57.8
58.0

50.8
50.9
50.8
50.9
50.7
51.2

July
Aug
Sept
Oct
Nov
Dec.

6.9
70
6.8
6.8
6.7
6.3

17.3
17 4
18.0
17.2
17.2
15.4

5.1
5 1
4.7
4.9
4.7
4.5

6.9
7 0
6.9
6.8
6.9
6.5

6.4
6 5
6.3
6.4
6.3
5.9

3.4
3 5
3.3
3.5
3.3
3.1

9.1
98
10.2
9.3
9.2
7.8

6.5
6 5
6.3
6.4
6.2
5.8

57.1
57.2
57.3
57.3
57.8
57.9

57.9
58.1
58.2
58.3
58.7
58.7

50.8
50.7
51.0
50.9
51.5
52.6

63
6.1
6.2
6.1
6.1
5.8

16 4
17.2
17.0
16.7
16.5
15.1

4 6
4.5
4.5
4.3
4.2
4.0

6 2
5.8
5.9
6.0
6.2
6.1

59
5.7
5.7
5.6
5.7
5.4

3.1
2.9
3.0
2.8
2.9
2.7

8.2
7.7
8.7
10.1
9.3
8.8

5 9
5.7
5.6
5.5
5.6
5.3

8.0
8.2
7.6
7.9
7.5
7.0
7.3
7.2
7.2
6.7
6.7
6.6

58.1
58.1
58.2
58.4
58.5
58.8

58.9
52.4
58.8 " 53.0
58.9
52.9
52.9
59.1
59.2
53.0
59.6
53.4

6.1
5.9
5.9
5.8
5.8
5.9

16.3
15.7
16.3
16.2
16.2
16.5

4.1
4.1
4.1
4.0
3.9
4.1

6.4
5.9
5.9
5.6
5.8
5.8

5.7
5.5
5.6
5.4
5.4
5.6

2.7
2.8
2.6
2.6
2.4
2.5

9.8
8.0
8.0
7.5
7.7
7.7

5.7
5.4
5.4
5.2
5.2
5.3

6.7
6.9
6.8
6.8
6.4
6.8

58.6
58.7
58.8
58.9
59.1
59.1

59.3
59.4
59.5
59.6
59.9
59.9

1960
1961
1962 . .
1963
1964 .
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975 . .
1976
1977 . .
1978

.

..

1978: Jan
Feb . . .
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov.
Dec.
1

5.2
3.8
3.7
4.0
7.2

6.7

53.2
53.5
53.9
53.9
53.7
53.7

Unemployment as percent of civilian labo- force in group specified.
2 Married men living with their wives. Data for 1949 and 1951-54 are for April; 1950, for March,
s Data for 1949-61 are for May.
* Includes craft and kindred workers, operatives, and nonfarm laborers. Data for 1948-57 are based on data for
January, April, July, and October.
« Civilian employment as percent cf total noninstitutional population.
Note—See footnote 3 and Note, Table B-27.
Source: Department of Labor, Bureau of Labor Statistics.




217

T A B L E B—30.—Unemployment rate by demographic characteristic, 1948—78
[Percent»; monthly data seasonally adjusted]

Black and other

White

Female:>

Males

Males

Females

Year or month
Total
Total

Total
20
20
20
20
16-19 years Total 16-19 years
Total 16-19 years Total 16-19 years
years and
years and
years and
years and
over
over
over
over

1948
1949

3.5
5.6

5.9
8.9

1950
1951
1952
1953
1954

4.9
3.1
2.8
2.7

9.0
5.3
5.4

5.0

4.8

13.4

4.4

5.5

10.4

5.1

9.9

10.3

14.4

9.9

9.2

20.6

8.4

1955
1956
1957
1958
1959

3.9
3 6

3.7

3.3
3.0
3.2
5 5
4.1

4.3
4 2

3.9

4.3
6.2
5.3

9.1
9.7
9.5
12.7
12.0

3.7
3.8
5.6
4.7

8.7
8.3
7.9
12.6
10.7

8.8
7.9
8.3
13.7
11.5

13.4
15.0
18.4
26.8
25.2

8.4
7.4
7.6
12.7
10.5

8.5
8.9
7.3
10.8
9.4

19.2
22.8
20.2
28.4
27.7

7.7
7.8
6.4
9.5
8.3

4.5

3.8
6.1
4.8

3.4
3.6
6.1
4.6

11.3
10.5
11.5
15.7
14.0

4.9
6.0
4.9
5.0
4.6

4.8
5.7
4.6
4.7
4.1

14.0
15.7
13.7
15.9
14.7

4.2
5.1
4.0
3.9
3.4

5.3
6.5
5.5
5.8
5.5

12.7
14.8
12.8
15.1
14.9

4.6
5.7
4.7
4.8
4.6

10.2
12.4
10.9
10.8
9.6

10.7
12.8
10.9
10.5
8.9

24.0
26.8
22.0
27.3
24.3

9.6
11.7
10.0
9.2
7.7

9.4
11.9
11.0
11.2
10.7

24.8
29.2
30.2
34.7
31.6

8.3
10.6
9.6
9.4
9.0

1965
1966
1967
1968
.
1969...

4.1
3.3
3.4
3.2
3.1

3.6
2.8
2.7
2.6
2.5

12.9
10.5
10.7
10.1
10.0

7.9
2.2
7.1
2.0
1.9

5.0
4.3
4.6
4.3
4.2

14.0
12.1
11.5
12.1
11.5

4.0
3.3
3.8

8.1
7.3
7.4
6.7
6.4

7.4
6.3
6.1
5.6
5.3

21.3
23.9
22.1
?1 4

n3

6.0
4.9
4.3
3.9
3.7

9.2
8.7
9.1
8.3
7.8

31.7
31.3
29.6
28.7
27.6

7.5
6.6
7.1
6.3
5 8

1970
1971
1972
1973
1974

4.5
5.4
5.0
4.3

4.0
4.9
4.5
3.7

6.1

13.4
15.1
14.2
13.0
14.5

4.4
5.3
4.9
4.3

4.3

3 7
4.0
3.6
2.9
3.5

5.4
6.3
5.9
5.3

5.0

13.7
15.1
14.2
12.3
13.5

8.2
9.9
10.0
8.9
9.9

7.3
9.1
8.9
7.6
9.1

?5 0
28.9
?9 7
26.9
31.6

5.6
7.2
6.8
5.7
6.8

9.3
10.8
11.3
10.5
10.7

34.4
35.4
38.5
34.5
34.6

69
8.7
88
8.2
8.4

1975
1976
1977
1978

7.8

7.2

7.0
62
5.2

6.4

6.2
5.4
4.6

3.7

8.6
7 9
7 3
6 2

17.4
16.4
15.9
14.4

6.8

5.5
4.5

18.3
17.3
15.0
13.5

6.2
5.2

13.9
13.1
13.1
11.9

13.7
12.7
12.4
10.9

35.4
35.4
37.0
34.4

11.7
10.6
10.0
8.6

14.0
13.6
14.0
13.1

38.5
39.0
39.9
38.4

11.5
11.3
11.7
10.6

1977: Jan
Feb
Mar....
Apr_...
May....
June...

6.8
6.8
6.6
6.4
6.3
6.4

6.1
6.2
5.9
5.7
5.7
5.7

16.1
16.0
15.9
15.0
15.2
16.8

5.2
5.3
4.9
4.9
4.8
4.6

7.7
7.7
7.7
7.5
7.2
7.5

17.7
16.6
16.9
16.7
16.8
15.9

6.5
6.6
6.6
6.3
6.1
6.5

12.7
13.2
12.9
12.4
12.9
13.3

12.1
12.4
12.2
10.7
12.3
12.3

34.8
38.2
39.1
34.8
37.8
36.6

10.0
10.0
9.8
8.6
10.0
10.0

13.4
14.1
13.8
14.4
13.7
14.4

38.2
36.7
37.6
37.5
39.0
42.9

11.2
12.2
11.8
12.3
11.7
11.6

July....
Aug
Sept....
Oct
Nov....
Dec...

6.0
6.1
6.0
5.9
5.8
5.4

5.3
5.3
5.1
5.1
5.0
4.7

13.9
14.8
15.4
14.1
14.0
12.4

4.5
4.4
4.2
4.3
4.1
4.0

7.1
7.2
7.2
7.1
7.0
6.5

15.3
14.7
16.0
15.6
15.4
12.8

6.1
6.2
6.1
6.1
6.0
5.7

13.1
14.1
13.2
13.6
13.5
12.6

12.8
14.0
12.6
13.4
12.2
11.4

39.1
38.4
34.7
36.4
38.2
36.2

10.2
11.4
10.5
11.2
9.6
8.9

13.4
14.2
13.8
13.8
15.0
13.9

41.1
41.4
41.1
40.3
40.7
40.9

10.9
11.7
11.3
11.3
12.6
11.4

1978: Jan
Feb....
Mar....
Apr....
May....
June...

5.5
5.4
5.3
5.2
5.3
5.0

4.8
4.8
4.8
4.5
4.4
4.2

13.0
14.4
14.1
13.6
12.7
11.9

4.0
3.9
3.9
3.7
3.7
3.5

6.5
6.2
6.0
6.3
6.5
6.2

14.6
14.8
14.7
14.7
15.0
12.9

5.6
5.2
5.0
5.2
5.5
5.4

12.8
11.9
12.5
12.0
12.3
12.0

12.0
11.3
11.3
11.2
11.3
10.3

36.9
35.8
37.1
34.1
37.4
32.2

9.6
8.8
8.8
8.9
8.8
8.2

13.6
12.6
13.8
12.8
13.5
13.9

41.3
41.0
40.4
37.0
39.2
41.5

11.1
10.0
11.3
10.6
10.9
11.1

July....
Aug
Sept—.
Oct
Nov....
Dec...

5.2
5.2
5.2
5.1
5.0
5.2

4.4
4.4
4.5
4.5
4.2
4.5

12.8
13.2
13.5
14.3
13.4
14.6

3.6
3.6
3.6
3.5
3.4
3.5

6.5
6.3
6.2
5.9
6.0
6.1

14.5
14.4
14.8
13.7
14.3
13.8

5.5
5.2
5.2
4.9
5.0
5.1

12.3
11.5
11.3
11.3
11.7
11.5

10.6
10.4
10.4
10.3
10.9
10.6

32.3
28.5
33.8
31.8
37.9
34.6

8.3
8.7
8.2
8.3
8.3
8.4

14.2
12.7
12.2
12.5
12.5
12.5

40.4
36.6
36.0
37.5
35.0
35.3

11.4
10.3
10.0
10.1
10.3
10.2

1960
1961
1962
1963
1964

....
. ..

3.4
3 4

5.0
7.5

i Unemployment as percent of civilian labor force in group specified.
Note.—See footnote 3 and Note, Table B-27.
Source: Department of Labor, Bureau of Labor Statistics.




218

TABLE B-31.— Unemployment by duration, 1947-78
[Monthly data seasonally adjusted ']

Year or month

Duration of unemployment

Total unemployment

Less than
5 weeks

5-14
weeks

15-26
weeks

27 weeks
and over

Average
(mean)
duration
in weeks

Thousands of persons 16 years of age and ()ver
1947
1948
1949

2,311
2,276
3,637

1 210
1,300
1,756

704
669
1,194

234
193
428

164
116
256

8.6
10.0

1950
1951
1952
1953
1954

3,288
2,055
1,883
1,834
3,532

1,450
1,177
1,135
1,142
1,605

1,055
574
516
482
1,116

425
166
148
132
495

357
137
84
78
317

12.1
9.7
8.4
8.0
11.8

1955
1956
1957
1958
1959

2,852
2,750
2,859
4,602
3,740

1,335
1,412
1,408
1,753
1,585

815
805
891
1,396
1,114

366
301
321
785
469

336
232
239
667
571

13.0
11.3
10.5
13.9
14.4

I960
1961
1962
1963
1964

3,852
4,714
3,911
4,070
3,786

1,719
1,806
1,663
1 751
1,697

1,176
1,376
1,134
1,231
1,117

503
728
534
535
491

454
804
585
553
482

12.8
15.6
14.7
14.0
13.3

1965
1966
1967
1968
1969

3,366
2,875
2,975
2,817
2,832

1,628
1 573
1,634
1 594
1,629

983
779
893
810
827

404
287
271
256
242

351
239
177
156
133

11.8
10.4
8.8
8.4
7.9

4,088
4,993
4,840
4,304
5,076

2,137
2,234
2,223
2,196
2,567

1,289
1,578
1,459
1,296
1,572

427
665
597
475
563

235
517
562
337
373

8.7
11.3
12. C
10.0
9.7

1975
1976
1977
1978

7,830
7,288
6,855
6,047

2,894
2,790
2,856
2,793

2,452
2,159
2,089
1,875

1,290
1,003
896
746

1,193
1,336
1,015
633

14.1
15. J
14.3
11. £

1977:Jan
Feb
Mar
Apr
May.
_ _
June. _

7,115
7,268
7,151
6,944
6,896
7,008

2,820
2,928
2, 913
3,011
2,727
3,115

2,153
2,192
2,168
1,960
2,170
2,045

993
954
878
822
860
850

1,199
1,202
1,153
1,119
1,059
978

15.2
14. J
14.5
14.5
15. C
14.2

July
Aug
Sept
Oct
Nov
Dec

6,706
6,795
6,624
6,654
6,635
6,187

2,774
2,839
2,776
2,822
2,851
2,645

2,059
2,152
2,091
2,081
1,978
1,913

891
931
882
882
890
813

965
899
924
900
871
835

14.1
13. £
13. S
13.7
13.5
13.7

1978: Jan
Feb
Mar
Apr
May
June

6,292
6,092
6,153
6,063
6,156
5,864

2,742
2,649
2,789
2.747
2,862
2,772

1,903
1,880
1,909
1,856
1,842
1,908

838
894
787
809
723
674

803
665
701
677
681
592

13.0
12.6
12.4
12.4
12.2
12. C

July
Aug
Sept
Oct
Nov
Dec

6,176
5,940
5,964
5,836
5,877
6,012

2,967
2,795
2,783
2,719
2,833
2,876

1,873
1,895
1,861
1,789
1,774
1,979

668
625
663
732
685
726

646
609
605
585
511
482

11.8
11.4
11.5
11.8
11.0
10.7

1970
1971
1972
1973
1974

...

i Because of independent seasonal adjustment of the various series, detail will not add to totals.
Note.—See footnote 3 and Note, Table B-27.
Source: Department of Labor, Bureau of Labor Statistics.




219

TABLE B-32.—Unemployment by reason, 1967-78
[Monthly data seasonally adjusted *]
Year or month

Total
unemployment

Job
losers

Job
leavers

Reentrants

New
entrants

Thousands of persons 16 years of age and over
1967
1968
1969

2,975
2,817
2,832

1,229
1,070
1,017

438
431
436

945
909
965

396
407
413

1970
1971
1972
1973
1974

4,088
4,993
4,840
4,304
5,076

1,809
2,313
2,089
1,666
2,205

549
587
635
674
756

1,227
1,466
1,444
1,323
1,441

503
627
672
642
672

1975
1976
1977
1978

7,830
7,288
6,855
6,047

4,341
3,625
3,103
2,514

812
886
889
851

1,865
1,895
1,926
1,814

812
882
938
867

1978: Jan..
Feb..
Mar.
AprMay.
June

6,292
6,092
6,153
6,063
6,156
5,864

2,711
2,589
2,562
2,556
2,614
2,379

861
896
858
877
828
853

1,812
1,802
1,878
1,750
1,793
1,785

915
880
912
905
892
816

July.
Aug.
Sept.
Oct.
Nov.
Dec.

6,176
5,940
5,964
5,836
5,877
6,012

2,536
2,459
2,362
2,456
2,372
2,442

855
840
849
812
825
871

1,870
1,743
1,930
1,721
1,754
1,937

871
875
816
825
872
826

Percent of civilian labor force
1967
1968
1969

3.8
3.6
3.5

1.6
1.3
1.2

0.6
.5

1.2
1.2
1.2

0.5
.5
.5

1970
1971
1972
1973
1974

4.9
5.9
5.6
4.9
5.6

2.2
2.8
2.4
1.9
2.4

.7
.7
.7

1.5
1.7
1.7
1.5
1.6

•6
.7
.8
'.7

1975
1976
1977
1978

8.5
7.7
7.0
6.0

4.7
3.8
3.2
2.5

2.0
2.0
2.0
1.8

.9
.9
1.0
.9

1978:Jan..
Feb.
Mar.
Apr..
May.
June.

6.3
6.1
6.2
6.1
6.1
5.8

2.7
2.6
2.6
2.6
2.6
2.4

1.8
1.8
.9
.8
.8
.8

.9
.9
.9
.9
.9
.8

July.
Aug.
Sept.
Oct..
Nov.
Dec.

6.1
5.9
5.9
5.8
5.8
5.9

2.5
2.4
2.3
2.4
2.3
2.4

.9
.7
1.9
1.7
1.7
1.9

.9
.9
.8
.8
.9
.8

1

Because of independent seasonal adjustment of the various series, detail will not add to totals.

Note.—See footnote 3 and Note, Table B-27.
Source: Department of Labor, Bureau of Labor Statistics.




220

TABLE B-33.—Unemployment insurance programs, selected data, 1946-78
State programs

All programs

Year
or month

Covered
employment1

Insured
unemployment
(weekly
average)"

Total
benefits
paid
(millions
of dollars^*

Thousands
1946...
1947...
1948...
1949...
1950
1951
1952
1953
1954
1955
1956
1957
1958
I960....
1961....
1962....
1963.-.
1964...
1965...
1966...
1967...
1968...
1969...
1970...
1971...
1972...
1973...
1974...
1975...
1976...
1977 *..
1978 p.

31,856
33,876
34,646
33; 098
34,308
36,334
37,006
38,072
36,622
40,018
42,751
43,436
44,411
45,728
46,334
46,266
47,776
48,434
49,637
51,580
54,739
56,342
57,977
59,999
59,526
59,375
66,458
69,897
72 451
71,037
73,459
»76,419

Insured
unemployment

2,878.5
1785.5
1,328.7
2,269.8
1,467.6
862.9
1,043.5
1,050.6
2,291.6
1,560.2
1,540.6
1,913.0
4,290.6
2,854.3
3,022.8
4,358.1
3,145.1
3,025.9
2,749.2
2,360.4
1,890.9
2,221.5
2,191.0
2,298.6
4,209.3
6,154.0
5,491.1
4,517.3
6,933.9
16,802.4
12,344.8
10,998.9

1,295
97
9
90
8
1,973
1,513
99
6
1,044
90
9
1,870
1,265
1,215
1,446
2,526
1,684
1,908
2,290
1,783
M,806
1,605
1,328
1,061
1,205
1 111
lilOl
1,805
2,150
1,848
1,632
2,262
3,986
2,991
2,655
2,356

4,442
4,448
3,972
3,506
3,105
2,939
3,065
2,751
2,643
2,649
2,853
3,226
3,781
3,638
3,212
2,659
2 369
2,297
2,581
2,394
2,064
1,999
2,148
2,545

1,212.0
1,214.5
1,317.2
998.5
886.4

2,835
2,811
2,678
2,665
2,627
2,623
2,610
2,651
2,605
2,570
2,551
2,487
2,482
2,518
2,452
2,307
2,223
2,247
2,374
2,448
2,292
2,234
2,230
2,252

June..
July..
Aug...

§cf!;:
Nov...
Dec...
1978: Jan.-.
Feb....
Mar...
May."
June..
July..
Aug..

Sfc
Nov*.
D

Insured
unemployment as
percent of
covered
employment

Benefits paid
Total
(millions
of
dollars) *

Average
weekly
check
(dollars)*

Weekly average; thousands

2,804
1,793
1 446
2,474
1,605
1,000
1,069
1,067
2,051
1,399
1,323
1,571
3,269
2,099
2,071
2,994
1,946
U,973
1,753
1,450
1,129
1,270
1,187
1,177
2,070
2,608
2,192
1,793
2,558
4,937
3,846
3,111
2,640

1977: Jan..
Feb..
Mar..

Initial
claims

Exhaustions*

883.4

784.5
824.8
712.2
712.9
795.8
896.2
1,091.0
1,053.6
1,128.9
805.4
753.9
706.7
663.8
771.5
595.6
597.4

19
8
17
8
20
0
30
4
26
3
28
0
25
1
28
1
34
0
26
2
27
2
20
7
39
6
27
7
31
3
30
5
32
0
T298
28
6
22
3
23
0
26
2
21
0
20
0
26
9
25
9
21
6
27
4
33
6
48
7
36
8
35
7
342
*0
4
1
47
2
34
5
31
8
34
8
30
7
34
7
31
7
34
6
30
6
33
5
31
5
36
4
38
6
39
3
38
3
31
3
37
4
34
6
35
4
36
2
35
2
38
3
39
3

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
2.5
2.2
2.1
3.4
4.1
3.5
2.7
3.5
6.0
4.6
3.9
3.3
*
4.3
4.2
4.2
4.0
3.9
3.9
3.8
3.9
3.8
3.8
3.7
3.6
3.6
3.6
3.5
3.3
3.2
3.2
3.4
3.5
3.2
3.0
3.0
3.1

2,026.9
1,350.3
1,380.7
1,733.9
3,512.7
2,279.0
2,726.7
3,422.7
2,675.4
2,774.7
2,522.1
2,166.0
1,771.3
2,092.3
2,031.6
2,127.9
3,848.5
4,957.0
4,471.0
4,007.6
5,974.9
11,754.7
8,974.5
8,357.2

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
32.37
33.80
34.56
35.27
35.92
37.10
39.75
41.25
43.43
46.17
50.34
53.23
56.76
59.00
64.25
70.23
75.16
78.77

955.3
975.6
1,034.1
763.7
666.0
658.3
592.4
671.3
565.2
525.8
599.5
703.0
909.4
918.8
1,001.5
708.0
639.8
580.0
557.0
677.8
521.0
515.2

78.61
80.48
79.60
78.63
77.69
76.90
75.91
77.16
77.74
79.60
80.23
81.54
84.10
85.80
85.48
84.33
82.70
81.69
80.77
81.53
81.90
83.43

1,094.9
775.1
789.9
1,736.0
1,373.1
840.4

998.2
962.2

* Monthly data are seasonally adjusted.
1 Includes persons under the State, UCFE (Federal employee, effective January 1955), and RRB (Railroad Retirement
Board) programs. Beginning October 1958, also includes the UCX program (unemployment compensation for ex-servicemen).
2 Includes State, UCFE, RR, UCX, UCV (unemployment compensation for veterans, October 1952-January 1960), and
SRA (Servicemen's Readjustment Act, September 1944-September 1951) programs. Also includes Federal and State
extended benefit programs. Does not include FSB (Federal supplemental benefits) and SUA (special unemployment
assistance) programs.
3
Covered workers who have completed at least 1 week of unemployment.
* Annual data are net amounts and monthly data are gross amounts.
* Individuals receiving final payments in benefit year.
* For total unemployment only.
7
Programs include Puerto Rican sugarcane workers for initial claims and insured unemployment beginning July 1963.
« Latest data available for all programs combined. Workers covered by State programs account for about 97 percent of
the total.
Source: Department of Labor, Employment and Training Administration.

221
278-216 O - 79 - 15




TABLE B—34.—Wage and salary workers in nonagricultural establishments•, 1929-78
[Thousands of persons; monthly data seasonally adjusted]

Year or
month

Total
wage
and
salary
workers

Mining

Transportation
and
Conpubstruclic
tion
utilities

Wholesale
and
retail
trade

Finance,
insurance,
and
real
estate

Services

Manufacturing

Total

Durable
goods

Nondurable
goods

Government

Federal

State
and
local

1929

31,324

10,702

1,087

1,512

3,916

6,123

1,494

3,425

533

1933

23,699

7,397

744

824

2,672

4,755

1,280

2,861

565

2,601

1939

30,603

10, 278

4,715

5,564

854

1,165

2,936

6,426

1,447

3,502

905

3,090

1940
1941
1942
1943
1944

32,361
36, 539
40,106
42, 434
41,864

10,985
13,192
15, 280
17,602
17,328

5,363
6,968
8,823
11,084
10,856

5,622
6,225
6,458
6,518
6,472

925
957
992
925
892

1,311
1,814
2,198
1,587
1,108

3,038
3,274
3,460
3,647
3,829

6,750
7,210
7,118
6,982
7,058

1,485
1,525
1,509
1,481
1,461

3,665
3,905
4,066
4,130
4,145

996
1,340
2,213
2,905
2,928

3,206
3,320
3,270
3,174
3,116

1945
1946
1947
1948
1949

40,374
41,652
43,857
44,866
43, 754

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

836
862
955
994
930

1,147
1,683
2,009
2,198
2,194

3,906
4,061
4,166
4,189
4,001

7,314
8,376
8,955
9,272
9,264

1,481
1,675
1,728
1,800
1,828

4,222
4,697
5,025
5,181
5,240

2,808
2,254
1,892
1,863
1,908

3,137
3,341
3,582
3,787
3,948

1950
1951
1952
1953
1954

45,197
47,819
48, 793
50,202
48, 990

15,241
16,393
16,633
17,549
16,314

8,094
9,089
9,349
10,110
9,129

7,147
7,304
7,284
7,438
7,185

901
929
898
866
791

2,364
2,637
2,668
2,659
2,646

4,034
4,226
4,248
4,290
4,084

9,386
9,742
10,004
10,247
10, 235

1,888
1,956
2,035
2,111
2,200

5,357
5,547
5,699
5,835
5,969

1,928
2,302
2,420
2,305
2,188

4,098
4,087
4,188
4,340
4,563

1955
1956
1957
1S58
1959

50,641
52,369
52, 853
51, 324
53,268

16,882
17,244
17,176
15,945
16,675

9,541
9,833
9,855
8,829
9,373

7,341
7,411
7,321
7,116
7,303

792
822
828
751
732

2,839
3,039
2,962
2,817
3,004

4,141
4,244
4,241
3,976
4,011

10,535
10,858
10,886
10,750
11,127

2,298
2,389
2,438
2,481
2,549

6,240
6,497
6,708
6,765
7,087

2,187
2,209
2,217
2,191
2,233

4,727
5,069
5,399
5,648
5,850

1960
1961
1962
1963
1964

54,189
53,999
55, 549
56, 653
58, 283
60,765
63,901
65,803
67, 892
70,384

16,796
16,326
16,853
16,995
17,274

9,459
9,070
9,480
9,616
9,816

7,337
7,256
7,373
7,380
7,458

712
672
650
635
634

2,926
2,859
2,948
3,010
3,097

4,004
3,903
3,906
3,903
3,951

11,391
11,337
11,566
11,778
12,160

2,629
2,688
2,754
2,830
2,911

7,378
7,620
7,982
8,277
8,660

2,270
2,279
2,340
2,358
2,348

6,083
6,315
6,550
6,868
7,248

18,061
19,213
19,447
19,781
20,167

10,405
11,282
11,439
11,626
11, 895

7,656
7,930
8,007
8,155
8,272

632
627
613
606
619

3,232
3,317
3,248
3,350
3,575

4,036
4,158
4,268
4,318
4,442

12,716
13,245
13,606
14,099
14,705

2,977 9,036 2,378
3,058 9,498 2,564
3,185 10, 045 2,719
3,337 10, 567 2,737
3,512 11,169 2,758

7,696
8,220
8,672
9,102
9,437

1970
1971
1972
1973.
1974

70, 880 19,366
71,214 18,623
73,675 19,151
_ 76, 790 20,154
_
78,265 20,077

11, 208
10, 636
11,049
11, 891
11,925

8,158
7,987
8,102
8,262
8,152

623
609
628
642
697

3,588
3,704
3,889
4,097
4,020

4,515
4,476
4,541
4,656
4,725

15,040
15,352
15,949
16,607
16,987

3,645
3,772
3,908
1,046
, 148

11,548
11,797
12,276
12,857
13,441

2,731
2,696
2,684
2,663
2,724

9,823
10,185
10,649
11,068
11,446

1975
1976
1977.
1978 v

76,945
79,382
82,256
_ 85,760

10,688
11, 077
11, 573
12,159

7,635
7,920
8,074
8,172

752
779
809
837

3,525
3,576
3,833
4,213

4,542
4,582
4,696
4,858

17,060
17,755
18,492
19, 392

^ 165
i271
t,452
,676

13,892
14, 551
15,249
15,976

2,748
2,733
2,727
2,754

11,937
12,138
12,352
12, 723

1965
1966
1967
1968...
1969

18, 323
18, 997
19,647
20, 331

See next page for continuation of table.




222

2,532

TABLE B-34.—Wage and salary workers in nonagricultural establishments,

1929-78—Continued
[Thousands of persons; monthly data seasonally adjusted]

Year or
month

Total

Durable
goods

Nondurable
goods

Mining

Government

Construction

Transportation
and
public
utilities

Wholesale
and
retail
trade

Finance,
insurance,
and
real
estate

Services

Manufacturing
Total
wage
and
salary
workers

Federal

State
and
local

1976:Jan...
Feb...
Mar...
Apr...
May..
June..

78,305
78, 530
78, 831
79,169
79,236
79, 332

18,701
18,799
18,900
19,015
19,005
18,996

10,817
10,890
10,971
11, 045
11,087
11,092

7,884
7,909
7,929
7,970
7,918
7,904

771
771
774
774
773
777

3,597
3,576
3,561
3,586
3,565
3,557

4,536
4,546
4,561
4,568
4,566
4,578

17,415
17, 515
17, 591
17,676
17,740
17,763

4,214
4,216
4,229
4,242
4,248
4,264

14, 253
14,290
14,370
14,452
14,483
14,544

2,749
2,743
2,735
2,736
2,732
2,728

12,069
12,074
12,110
12,120
12,124
12,125

July...
Aug...
Sept..
Oct...
Nov...
Dec...

79,478
79,596
79,836
79,804
80,133
80,306

19,013
19,028
19,136
19,022
19,160
19,190

11,109
11,140
11,193
11,102
11,222
11,246

7,904
7,888
7,943
7,920
7,938
7,944

785
757
790
791
793
797

3,572 4,590
3 568 4,591
3,563 4,602
3,573 4,597
3,601 4,609
3,592 4,636

17,797
17, 848
17,903
17,905
17,930
17,966

4,269
4,274
4,299
4,315
4,331
4,347

14, 589
14, 634
14,677
14,714
14,776
14,840

2,726
2,729
2,728
2,727
2,731
2,723

12,137
12,167
12,138
12,160
12,202
12,215

1977:Jan...
Feb...
Mar...
Apr...
May..
June..

80,483
80,796
81,264
81, 654
81,934
82,277

19,285
19, 343
19,481
19, 575
19,643
19,697

11,308
11, 336
11,445
11,487
11, 541
11, 577

7,977
8,007
8,036
8,088
8,102
8,120

799
807
819
825
824
835

3,551
3,654
3,732
3,805
3,837
3,871

4,640
4,652
4,659
4,673
4,692
4,695

18,030
18,122
18, 225
18,325
18,397
18,466

4,364
4,378
4,403
4,417
4,426
4,443

14,903
14,949
15,025
15,098
15,123
15,187

2,722
2,721
2,728
2,721
2,725
2,735

12,189
12,170
12,192
12,215
12,267
12,348

July...
Aug...
Sept..
Oct...
Nov...
Dec...

82,455
82,603
82,973
83,199
83, 549
83,719

19,722
19,697
19,715
19,769
19,849
19,984

11,623
11,621
11,637
11,693
11, 746
11, 851

8,099
8,076
8,078
8,076
8,103
8,133

810
795
830
833
840
687

3,902
3,884
3,896
3,905
3,928
3,955

4,698
4,698
4,727
4,721
4,736
4,749

18,531
18,607
18,672
18,733
18,830
18, 911

4,452
4,468
4,487
4,508
4,535
4,547

15,226
15,315
15,442
15, 510
15, 568
15,618

2,724
2,730
2,725
2,728
2,727
2,723

12,390
12,409
12,479
12,492
12,536
12, 545

1978:Jan...
Feb...
Mar...
Apr...
May...
June..

83,871
84,188
84,726
85,418
85,618
85,996

20,065
20,139
20,230
20,282
20,297
20, 316

11,917
11,986
12,041
12,076
12, 093
12,109

8,148
8,153
8,189
8,206
8,204
8,207

678
684
698
867
869
879

3,905
3,901
3,999
4,164
4,175
4,278

4,758
4,782
4,817
4,847
4,847
4,881

18,991
19,071
19,169
19,252
19, 335
19,412

4,563
4,591
4,605
4,623
4,637
4,670

15, 597
15,670
15,773
15, 866
15,896
15,963

2,736
2,736
2,739
2,745
2,753
2,772

12,578
12,614
12,696
12,772
12,809
12,825

86,033
86,149
86,163
86, 573
N O V P . . 87, 020
Dec p . . 87,270

20, 302
20,278
20,286
20, 436
20,600
20, 724

12,138
12,146
12,166
12, 305
12,409
12, 490

8,164
8,132
8,120
8,131
8,191
8,234

882
887
887
893
902
902

4,317
4,298
4,298
4,341
4,368
4,413

4,827
4,846
4,855
4,922
4,945
4,965

19,469
19, 523
19,546
19,632
19,697
19,687

4,690
4,707
4,719
4,737
4,775
4,788

15,989
16,074
16,127
16,169
16,261
16,296

2,765
2,765
2,752
2,760
2,757
2,757

12,792
12, 771
12,693
12, 683
12,715
12,738

July...
Aug...
Sept...
Oct....

Note—Data in Tables B-34 through B-36 are based on reports from employing establishments and relate to 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.
Not comparable with labor force data (Tables B-27 through B-32), 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., even if they are not paid for the time off; and which are based on a sample of the
working-age population, whereas the estimates in this table are based on reports from employing establishments.
For description and details of the various establishment data, see "Employment and Earnings."
Source: Department of Labor, Bureau of Labor Statistics.




223

TABLE B-35.—Average weekly hours and hourly earnings in selected private nonagricultural
industries, 1947-78
[For production or nonsupervisory workers; monthly data seasonally adjusted]

Average gross hourly earnings
current dollars

Average weekly hours

Total
Whole- private
Total
Wholesale
private Manu- ConManu- Consale
non- factur- strucand
nonag- factur- strucand
riculretail agriretail
ing
tion
ing
tion
cultural i
trade
trade
turali

Year
or
month

40.3
40.0
39.4

40.4
40.0
39.1

38.2
38.1
37.7

40.5 $1.131 %\. 216 $1,540 $0.940
40.4
,??5
.3?7 1.712 1.010
40.5
.?75
.376 1.792 1.060

39.8
39.9
39.9
39.6
39.1

40.5
40.6
40.7
40.5
39.6

37.4
38.1
38.9
37.9
37.2

40.5
40.5
40.0
39.5
39.5

1955
1956
1957
1958
1959

39.6
39.3
38.8
38.5
39.0

40.7
40.4
39.8
39.2
40.3

37.1
37.5
37.0
36.8
37.0

39.4
39.1
38.7
38.6
38.8

I960
1961
1962
1963
1964

38.6
38.6
38.7
38.8
38.7

39.7
39.8
40.4
40.5
40.7

36.7
36.9
37.0
37.3
37.2

1965
1966
1967
1968
1969

38.8
38.6
38.0
37.8
37.7

41.2
41.4
40.6
40.7
40.6

1970.
1971
1972
1973
1974

37.1
36.9
37.0
36.9
36.5

1975. .
1976
1977..
1978 v

1947
1948
1949
1950
1951
1952
1953
1954

1977: Jan
Feb..
Mar
Apr
May
June

.

.

1978: Jan.
Feb
Mar
May_"~..
June
July
Aug
Sept
Oct
NOVP....

Dec*

Index,
1967=100

Percent
change
from
a year
earlier*

Current
dollars

1967
dollars 3

42.6
46.0
48.2

63.7
63.8
67.5

80
4.8

0.2
5.8

Current
dollars

1967
dollars

1.440
.56
.64
.74
.78

1.863
2.02
2.13
2.28
2.39

1.100
1.18
1.23
1.30
1.35

50.0
53.7
56.4
59.6
61.7

69.3
69.0
70.9
74.4
76.6

3.7
7.4
5.0
5.7
3.5

2.7
—.4
2.8
4.9
3.0

.71
.80
.89
.95
2.02

.85
.95
2.05
2.11
2.19

2.45
2.57
2.71
2.82
2.93

1.40
1.47
1.54
1.60
1.66

63.7
67.0
70.3
73.2
75.8

79.4
82.3
83.4
84.5
86.8

3.2
5.2
4.9
4.1
3.6

3.7
3.7
1.3
1.3
2.7

38.6
38.3
38.2
38.1
38.0

2.09
2.14
2.22
2.28
2.36

2.26
2.32
2.39
2.46
2.53

3.08
3.20
3.31
3.41
3.55

1.71
1.76
1.83
1.89
1.97

78.4
80.8
83.5
85.9
88.2

88.4
90.2
92.2
93.7
95.0

3.4
3.1
3.3
2.9
2.7

1.8
2.0
2.2
1.6
1.4

37.4
37.7
37.7
37.3
37.9

37.7
37.1
36.6
36.1
35.7

2.46
2.56
2.68
2.85
3.04

2.61
2.71
2.82
3.01
3.19

3.70
3.89
4.11
4.41
4.79

2.04
2.14
2.25
2.41
2.56

91.2
95.3
100.0
106.2
113.2

96.6
98.0
100.0
101.9
103.1

3.4
4.5
4.9
6.2
6.6

1.7
1.4
2.0
1.9
1.2

39.8
39.9
40.5
40.7
40.0

37.3
37.2
36.5
36.8
36.6

35.3
35.1
34.9
34.6
34.2

3.23
3.45
3.70
3.94
4.24

3.35
3.57
3.82
4.09
4.43

5.24
5.69
6.06
6.41
6.81

2.72
2.88
3.05
3.23
3.48

120.7
129.2
137.5
146.0
157.5

103.8
106.5
109.7
109.7
106.6

6.6
7.0
6.4
6.2
7.9

.7
2.6
3.0
.0
-2.8

36.1
36.1
36.0
35.8

..

July
Aug
Sept
Oct
Nov.
Dec

.335
.45
.52
.61
.65

Adjusted hourly earnings,
total private nonagricultural 2

39.5
40.1
40.3
40.4

36.4
36.8
36.5
36.7

33.9
33.7
33.3
32.8

4.53
4.86
5.24
5.68

4.83
5.22
5.67
6.16

7.31
7.70
8.09
8.62

3.73
3.97
4.27
4 66

170.7
183.0
196.8
212.6

105.9
107.3
108.4

8.4
7.2
7.5
81

-.7
1.3
1.0

35.8
36.1
36.1
36.1
36.1
36.0

39.7
40.3
40.4
40.4
40.4
40.5

35.4
37.3
37.0
37.0
36.8
36.4

33.3
33.4
33.4
33.3
33.4
33.2

5.07
5.10
5.14
5.18
5.20
5.23

5.47
5.49
5.53
5.58
5.61
5.66

7.99
7.97
8.01
8.03
8.03
8.09

4.14
4.16
4.19
4.22
4.24
4.26

191.1
191.9
193.0
194.4
195.5
196.4

108.8
108.2
108.2
108.1
108.1
108.0

7.7
7.6
7.7
7.7
7.6
7.8

2.4
1.5
1.2
.9
.8
.9

36.0
35.9
35.9
36.1
36.0
35.9

40.3
40.3
40.3
40.5
40.5
40.5

36.5
36.1
36.2
36.3
36.4
36.2

33.3
33.2
33.2
33.4
33.1
33.1

5.27
5.27
5.31
5.36
5.39
5.41

5.70
5.72
5.77
5.82
5.85
5.88

8.08
8.11
8.15
8.19
8.20
8.24

4.29
4.30
4.33
4.36
4.39
4.42

197.8
198.3
199.6
201.5
202.4
203.5

108.4
108.3
108.6
109.2
109.3
109.4

7.8
7.1
7.3
7.6
7.4
7.4

1.0
.4
.6
1.0
.6
.6

35.5
35.7
36.0
36.1
35.9
35.9

39.8
40.1
40.6
40.8
40.4
40.5

34.3
35.6
36.9
37.3
36.6
37.3

32.7
32.7
33.0
33.0
32.9
32.8

5.46
5.49
5.54
5.61
5.62
5.66

5.93
5.98
6.01
6.05
6.08
6.12

8.30
8.35
8.47
8.47
8.59
8.65

4.51
4.50
4.55
4.60
4.60
4.63

206.0
206.6
208.3
210.3
211.0
212.3

109.9
109.5
109.5
109.6
109.0
108.7

7.8
7.6
7.9
8.2
8.0
8.1

1.0
1.1
1.2
1.4
.9
.6

35.9
35.8
35.8
35.9
35.8
35.8

40.5
40.3
40.4
40.5
40.7
40.6

37.3
37.1
37.0
36.9
36.7
36.9

32.9
32.8
32.8
32.9
32.8
32.7

5.71
5.73
5.77
5.82
5.86
5.90

6.18
6.20
6.25
6.32
6.37
6.41

8.66
8.72
8.75
8.77
8.83
8.89

4.67
4.70
4.73
4.77
4.81
4.83

214.1
214.6
216.2
218.0
219.0
220.2

109.0
108.7
108.7
108.8
108.7

8.2
8.2
8.3
8.2
8.2
8.2

.6
.4
.1
-.4
-.6

1

Also includes other private industry groups shown in Table B-34.
Adjusted for overtime (in manufacturing only) and for interindustry employment shifts.
Current dollar earnings index divided by the consumer price index (revised index for urban wage earners and clerical
workers used beginning 1978).
* Monthly data are computed from indexes to two decimal places.
Note-See Note,Table B-34.
Source: Department of Labor, Bureau of Labor Statistics.
2

3




224

TABLE B-36.—Average weekly earnings in selected private nonagricultural industries, 1947-78
[For production or nonsupervisory workers; monthly data seasonally adjusted]
Percent change from a
year earlier, total private
nonagricultural 3

Average gross weekly earnings

Year or month

Total private
nonagricultural i
Current
dollars

Manufacturing

1967
dollars 2

Construction

Wholesale
and retail
trade

Current
dollars

1967 dollars

Current dollars

$45.58
49.00
50.24

$68.13
67.96
70.36

$49.13
53.08
53.80

$58.83
65.23
67.56

$38.07
40.80
42.93

7.5

1950
1951
1952
1953
1954..

53.13
57.86
60.65
63.76
64.52

73.69
74.37
76.29
79.60
80.15

58.28
63.34
66.75
70.47
70.49

69.68
76.96
82.86
86.41
88.54

44.55
47.79
49.20
51.35
53.33

8.9
4.8
5.1
1.2

.9
2.6
4.3

1955
1956
1957-.
1958
1959

67.72
70.74
73.33
75.08
78.78

84.44
86.90
86.99
86.70
90.24

75.30
78.78
81.59
82.71
88.26

90.90
96.38
100.27
103.78
108.41

55.16
57.48
59.60
61.76
64.41

5.0
4.5
3.7
2.4
4.9

5.4
2.9
-.3
4.1

19601961
1962.
1963
1964

80.67
82.60
85.91
88.46
91.33

90.95
92.19
94.82
96.47
98.31

89.72
92.34
96.56
99.63
102.97

113.04
118.08
122.47
127.19
132.06

66.01
67.41
69.91
72.01
74.86

2.4
2.4
4.0
3.0
3.2

.8
1.4
2.9
1.7
1.9

1965
1966
1967
1968
1969

95.45
98.82
101.84
107.73
114.61

101.01
101.67
101.84
103.39
104.38

107.53
112.19
114.49
122.51
129.51

138.38
146.65
154.95
164.49
181. 54

76.91
79.39
82.35
87.00
91.39

4.5
3.5
3.1
5.8
6.4

2.7

1970
1971
1972
1973.
1974

119.83
127.31
136.90
145.39
154.76

103.04
104.95
109.26
109.23
104.78

133.33
142.44
154.71
166.46
177.20

195.45
211.67
221.19
235.89
249.25

96.02
101.09
106.45
111.76
119.02

4.6
6.2
7.5
6.2
6.4

-1.3

1975
1976.
1977
1978*

163.53
175.45
188.64
203.34

101.45
102.90
103.93

190.79
209.32
228.50
248.86

266.08
283.36
295.29
316.35

126.45
133.79
142.19
152.85

5.7
7.3
7.5
7.8

-3.2

181.51
184.11
185.55
187.00
187.72
188.28

103.37
103.84
104.01
103.95
103.77
103.56

217.16
221.25
223.41
225.43
226.64
229.23

282.85
297.28
296.37
297.11
295.50
294.48

137.86
138.94
139.95
140.53
141.62
141.43

5.5
7.2
7.7
8.4
7.5
8.0

.4
1.2
1.3
1.5
.7
1.0

189.72
189.19
190.63
193.50
194.04
194.22

104.01
103.33
103.72
104.93
104.77
104.42

229.71
230.52
232.53
235.71
236.93
238.14

294.92
292.77
295.03
297. 30
298.48
298.29

142.86
142.76
143.76
145.62
145.31
146.30

7.9
7.1
7.7
8.3
7.6

193.83
195.99
199.44
202.52
201.76
203.19

103.38
103.86
104.86
105.59
104.21
104.04

236.01
239.80
244.01
246.84
245.63
247.86

284.69
297.26
312.54
315.93
314.39
322.65

147.48
147.15
150.15
151.80
151.34
151.86

6.1
7.8
8.3
7.5
7.9

.5
-.2
1.3
1.7
.4
.5

204.99
205.13
206.57
208.94
209.79
211.22

104.43
103.92
103.91
104.26
104.11

250.29
249.86
252.50
255.96
259.26
260.25

323.02
323.51
323.75
323.61
324.06
328.04

153.64
154.16
155.14
156.93
157.77
157.94

8.1
8.5
8.0
8.1
8.4
8.7

.3
.6
.2
-.6
-.4

1947
1948
1949

1977: Jan

Feb
Mar
Apr
May
June
July

Aug
Sept
Oct.

Nov

Dec
1978: Jan

Feb
Mar

Apr
May
June
July

Aug
Sept

Oct
Nov*
Dec v

.

...

2.5

-0 2
3.5

5.8

4.7

7.4
7.3

.2
1.5
1.0
1.9
4.1
-.0
-4.1

1.4
1.0

1.1
1.1
1.7
.8
.5

1
Also includes other private industry groups shown in Table B-34.
2 Earnings in current dollars divided by the consumer price index (revised index for urban wage earners and clerical
workers used beginning 1978).
3 Based on unadjusted data.

Note.—See Note, Table B-34.
Source: Department of Labor, Bureau of Labor Statistics.




225

TABLE B-37.—Productivity and related data, private business economy, 1947-78
[1967=100; quarterly data seasonally adjusted]
Output *

Year or quarter Private
business
sector.

Hours of all
3
persons

Nonfarm Private
busibusiness
ness
sector sector

Output per
hour of all
persons

NonPrivate
farm
busibusiness
ness
sector
sector

Compensation
per hour *

Unit labor
cost

Implicit price
deflator

NonNonNonNonfarm Private farm Private farm Private farm
busi- busi- busi- busi- busi- busibusiness
ness
ness
ness
ness
ness
ness
sector sector sector sector sector sector sector

1947
1948
1949

48.6
50.9
49.9

47.5
49.6
48.7

90.9
91.5
88.5

79.1
80.4
77.3

53.5
55.6
56.5

60.0
61.6
63.0

36.0
39.0
39.6

38.4
41.6
42.9

67.2
70.2
70.2

63.9
67.6
68.1

65.2
70.7
69.9

62.4
67.6
68.1

1950..
1951
1952
1953
1954

54.5
57.7
59.2
61.9
60.8

53.3
56.7
58.5
60.8
59.6

89 5
92.1
92 2
93.2
90.1

79 8
83.5
84 3
86.4
83.5

60.9
62.7
64 2
66.4
67.5

66.8
68.0
69.3
70.4
71.4

42.4
46.6
49.5
52.8
54.4

45.4
49.3
52 1
55.0
56.7

69 6
74.3
77 2
79.4
80.6

67 9
72.6
75 1
78.1
79.4

70 9
76.0
77.5
77.9
78.6

69 2
73.7
75 2
76.8
77.8

1955
1956
1957
1958
1959

65.7
67.5
68.4
66.9
71.8

64.6
66.5
67.5
65.9
71.1

93.5
94 9
93.5
89.3
92.8

87.0
89 1
88.7
85.0
88.8

70.3
71 1
73.1
74.9
77.4

74.2
74.6
76.1
77.5
80.0

55.8
59.4
63.3
66.1
68.9

58.7
62.3
65.8
68.3
71.0

79.4
83 6
86.6
88.2
89.1

79.1
83 4
86.5
88.2
88.7

79.8
82.2
84.9
86.4
88.2

79.5
82 0
84.7
86.0
88.0

I960
1961
1962
1963
1964

73.1
74.2
78.8
82.2
86.8

72.2
73.3
78.1
81.6
86.4

93.0
91.5
93.0
93.5
94.9

89.3
88.3
90.2
91 2
93.2

78.6
81.1
84.7
88.0
91.5

80.8
83.0
86.6
89.5
92.7

71.9
74.6
78.1
81.0
85.2

74.1
76.6
79.7
82.5
86.3

91.4
92.1
92.1
92.0
93.2

91.7
92.3
92.0
92.1
93.1

89.4
89.9
90.7
91.5
92.7

89.3
89.8
90.6
91.5
92.9

1965
1966
1967
1968
1969

92.9
98.0
100.0
105.1
108.3

92.6
98.1
100.0
105.4
108.6

97.8
100.1
100.0
101.8
104.6

96.6
99.8
100.0
102.1
105.5

95.0
98.0
100.0
103.3
103.5

95.9
98.3
100.0
103.2
102.9

88.6
94.9
100.0
107.6
114.9

89.3
94.8
100.0
107.3
114.1

93.3
96.8
100.0
104.1
111.0

93.2
96.4
100.0
104.0
110.9

94.2
97.2
100.0
103.9
108.8

94.1
96.8
100.0
104.0
10816

.

- . 107.3

.

.

.

.

110.3
117.6
124.5
121.5

107.4
110.2
117.8
125.0
121.9

103.0
102.4
105.5
109.6
110.3

104.2
103.8
107.0
111.6
112.4

104.2
107.8
111.4
113.6
110.1

103.1
106.3
110.1
112.0
108.5

123.1
131.4
139.7
151.1
164.8

121.7
129.9
138.3
149.1
162.7

118.1
122.0
125.3
133.1
149.7

118.1
122.3
125.6
133.1
150.0

113.9
118.9
123.1
130.2
143.0

114.0
119.1
122.8
127.9
141.3

118.8
126.5
133.2
139 0

118.8
127.0
133.6
139 9

105.6
108.7
112.6
117.1

107.5
111.0
115.4
120.1

112.4
116.4
118.2
118.7

110.5
114.4
115.8
116.5

181.2
197.0
213.0
232.9

178.8
193.7
209.3
228.9

161.2
169.3
180.2
196.3

161.8
169.4
180.8
196.6

157.4
165.4
174.9
187.9

156.3
164.8
174.6
186.8

125.0
126.2
127.1
127.6

125.2
126.9
127.7
128.1

108.3
108.7
108.5
108.9

110.8
110.9
110.9
111.5

115.4
116.1
117.1
117.2

113.0
114.4
115.2
114.9

190.9
194.8
199.3
203.6

187.6
191.7
195.8
199.9

165.4
167.7
170.1
173.8

166.0
167.5
170.1
173.9

162.4
164.5
166.3
168.5

161.8
163.4
165.7
168.2

130.5
132.5
134.2
135.5

131.0
133.0
134.6
135.8

110.7
112.9
112.9
113.9

113.3
115.5
115.8
116.7

117.9
117.4
118.9
119.0

115.6
115.2
116.2
116.4

207.5
210.5
215.3
218.8

203.9
207.1
211.2
215.1

176.0
179.3
181.1
183.9

176.4
179.8
181.7
184.8

170.6
174.0
176.3
178.4

170.0
173.6
176.4
178.1

135.3
138.7
139.7
142.2

136.1
139.8
140.6
143.0

115.0
117.6
117.4
118.9

117.8
120.6
120.5
121.9

117.6
118.0
119.0
119.6

115.5
116.0
116.6
117.3

225.2
229.6
235.4
240.3

221.4
225.8
231.0
236.1

191.4
194.6
197.8
200.9

191.7
194.7
198.1
201.3

181.3
186.6
189.9
193.4

180.6
185.3
188.9
192.2

1970
1971
1972
1973
1974
1975
1976
1977
1978 v
1976: 1
II
Ill

.

1977: 1
II
III

.

IV

IV

1978:1
II
.
Ill
IV*

i Output refers to gross domestic product originating in the sector in 1972 dollars.
» Hours of all persons engaged in the sector, including hours of proprietors and unpaid family workers. Estimates based
primarily on establishment data.
3
Wages and salaries of employees plus employers' contributions for social insurance and private benefit plans. Also
i ncludes an estimate of wages, salaries, and supplemental payments for the self-employed.
< Current dollar gross domestic product divided by constant dollar gross domestic product.
Source: Department of Labor, Bureau of Labor Statistics.




226

TABLE B-38.—Changes in productivity and related data, private business economy, 1948-78
[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]

Hours of
all persons^

OutpuU

Output per hour
of all persons

Compensation
per hours

Unit labor
cost

Implicit price
deflator <

rivate
business
sector

Nonfarm
business
sector

Private
business
sector

Nonfarm
business
sector

rivate
business
sector

Nonfarm
business
sector

1948..
1949..

4.6
-1.8

4.4
-1.8

0.7
-3.3

1.7
-3.9

3.8
1.6

2.7
2.2

8.4
1.7

8.5
3.1

4.5
.1

5.7

8.4
-1.1

8.3
.8

1950..
1951..
1952..
1953..
1954..

9.2
5.9
2.5
4.6
-1.7

9.4
6.5
3.0
4.1
-2.0

1.2
2.9

3.2
4.6
1.0
2.5
-3.4

7.9
2.8
2.4
3.6
1.6

6.0
1.8
1.9
1.5
1.4

7.0
9.8
6.4
6.5
3.2

5.7
8.7
5.5
5.7
3.1

-.9
6.8
3.9
2.8
1.5

-.3
6.8
3.5
4.0
1.6

1.5
7.3
1.9
.6
.9

1.6
6.5
2.1
2.1
1.3

1955..
1956..
1957..
1958..
1959..

8.0
2.8
1.3
-2.2
7.3

8.2
3.0
1.5
-2.5
7.9

3.8
1.5
-1.5
-4.5
3.9

4.1
2.5
-.5
-4.1
4.4

4.1
1.3
2.8
2.5
3.2

4.0
.5
2.0
1.8
3.3

2.5
6.5
6.5
4.4
4.3

3.6
6.0
5.7
3.8
4.0

-1.5
5.2
3.6
1.9
1.0

-.4
5.5
3.6
2.0
.7

1.5
3.0
3.2
1.9
2.0

2.1
3.2
3.3
1.5
2.4

I960..
1961..
1962..
1963..
1964..

1.8
1.5
6.2
4.4
5.6

1.6
1.5
6.5
4.5
5.9

-L6
1.6
0.6
1.5

.6
-1.2
2.1
1.1
2.3

1.6
3.1
4.5
3.8
4.0

1.0
2.7
4.3
3.4
3.6

4.2
3.9
4.6
3.7
5.3

4.4
3.3
4.0
3.5
4.6

2.6
.7
0

3.4
.6
-.3
.1
1.0

1.4
.6
.9
.9
1.4

1.4
.6
.8
1.0
1.5

1965..
1966..
1967 _
1968..
1969..

7.0
5.5
2.0
5.1
3.0

7.1
6.0
1.9
5.4
3.0

~L8
2.8

3.6
3.3
.2
2.1
3.3

3.8
3.2
2.0
3.3
.2

3.4
2.6
1.7
3.2
-.3

4.0
7.1
5.4
7.6
6.8

3.5
6.1
5.5
7.3
6.4

.2
3.8
3.3
4.1
6.6

3.'5
3.8
4.0
6.6

1.6
3.2
2.9
3.9
4.7

1.3
2.9
3.3
4.0
4.5

1970..
1971..
1972..
1973..
1974..

-.9
2.8
6.6
5.9
-2.4

-1.1
2.6
6.9
6.0
-2.5

-1.5
-.6
3.1
3.9
.7

-1.2
-.4
3.2
4.2
.7

.7
3.4
3.4
1.9
-3.0

.1
3.1
3.6
1.7
-3.1

7.1
6.7
6.3
8.2
9.1

6.6
6.7
6.5
7.8
9.1

6.4
3.3
2.8
6.2
12.5

6.5
3.5
2.7
6.0
12.6

4.7
4.4
3.6
5.8
9.8

4.9
4.5
3.1
4.1
10.5

1975...
1976...
1977...
1978 P.

-2.3
6.5
5.3
4.4

-2.5
6.9
5.2
4.7

-4.3
2.9
3.7
4.0

-4.3
3.3
3.9
4.1

2.1
3.5
1.6
.4

1.9
3.5
1.3
.6

9.9
8.7
8.1
9.3

9.9
8 4
8.1
9.4

7.7
5.0
6.4
8.9

7.8
4.7
6.7
8.8

10.1
5.1
5.7
7.5

10.6
5.4
5.9
7.0

1976:1
It
Ill
IV

11.2
4.0
2.8
1.6

11.5
5.7
2.5
1.2

6.2
1.4
-.8
1.6

7.5
.7
-.2
2.1

4.7
2.6
3.6
.1

3.7
5.0
2.7
-.9

9.0
8.4
9.6
8.9

7.5
9.0
9.0
8.5

4.1
5.7
5.8
8.8

3.7
3.8
6.2
9.5

3.2
5.2
4.4
5.4

4.9
4.1
5.8
6.1

1977:1
II
III
IV

9.3
6.5
5.0
4.0

9.4
6.2
5.0
3.5

6.6
8.3
-.1
3.7

6.8
7.7
1.3
3.0

2.5
-1.7
5.1
.4

2.4
-1.4
3.7
.5

7.9
5.8
9.5
6.7

8.3
6.5
8.1
7.6

5.3
7.6
4.2
6.3

5.8
8.0
4.2
7.1

5.2
8.2
5.2
4.9

4.4
8.7
6.5
4.0

1978: I.

-.6
10.5
3.0
7.1

.7
11.6
2.1
7.1

4.0
9.2
-.4
5.0

3.9
9.8

-4.5
1.2
3.5
2.1

-3.1
1.7
2.3
2.3

12.1
8.1
10.4
8.7

12.2
8.2
9.6
9.1

17.4
6.8
6.7
6.5

15.7
6.4
7.1
6.7

6.7
12.1
7.3
7.7

5.8
10.8
8.1
7.1

Year or quarter

ML...
IVP

L0
-3.3

3.1
2.3

4! 7

rivate
business
sector

Nonfarm
business
sector

Private
business
sector

Nonfarm
business
sector

Private
business
sector

Nonfarm
business
sector

1
Output refers to gross domestic product originating in the sector in 1972 dollars.
2
H ours of all persons engaged in the sector, including hours of proprietors and unpaid family workers. Estimates based
pri marily on establishment data.
3 Wages and salaries of employees plus employers' contributions for social insurance and private benefit plans. Also
inc ludes an estimate of wages, salaries, and supplemental payments for the self-employed.
* Current dollar gross domestic product divided by constant dollar gross domestic product.

Note.—Percent changes are based on original data and therefore may differ slightly from percent changes based on
indexes in Table B-37.
Source: Department of Labor, Bureau of Labor Statistics.




227

PRODUCTION AND BUSINESS ACTIVITY
TABLE B-39.—Industrial production indexes, major industry divisions, 1929-78
[1967=100; monthly data seasonally adjusted]

Total
industrial
production

Year or month

Manufacturing 5
Mining
Total

Durable

Utilities

Nondurable

100.00

87.95

51.98

35.97

6.36

5.69

1929
1933
1939

21.6
13.7
21.7

22.8
14.0
21.5

22.5
9.1
17.7

23.2
19.9
26.1

43.1
30.6
42.1

7.4
6 7
10.7

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

25.0
31.6
36.3
44.0
47.4
40.7
35.0
39.4
41.1
38.8

25.4
32.4
37.8
47.0
50.9
42.6
35.3
39.4
40.9
38.7

23.5
31.4
39.9
54.2
59.9
45.2
31.6
37.7
39.3
35.7

27.5
33.3
34.6
37.1
38.6
38.5
39.7
41.3
42.7
42.0

46.8
49.7
51.3
52.5
56.2
55.1
54.2
61.3
64.4
57.1

11.8
13.3
14.9
16.5
17 5
17.8
18.6
20.1
22.4
23.9

1950
1951
1952
1953
1954""" ._
1955
1956
1957 .
1958
1959

44.9
48.7
50.6
54.8
51.9
58.5
61.1
61.9
57.9
64.8

45.0
48.6
50.6
55.2
51.5
58.2
60.5
61.2
57.0
64.2

43.5
48.9
51.9
58.7
51.8
59.2
61.1
61.6
53.9
61.9

46.7
48.3
49.2
51.2
51.6
57.2
60.1
61.1
61.6
67.7

63.8
70.0
69.4
71.2
69.9
77.9
82.0
82 1
75.3
78.7

27.2
31.0
33.7
36.5
39.3
43.9
48.2
51.5
53.9
59.3

66.2
66.7
72.2
76.5
81.7
89.8
97.8
100.0
106.3
111.1
107.8
109.6
119.7
129.8
129.3
117.8
129.8
137.1
145.1

65.4
65.6
71.5
75.8
81.0
89.7
97.9
100.0
106.4
111.0
106.4
108.2
118.9
129.8
129.4
116.3
129.5
137.1
145.5

62.9
61.8
68.6
73.1
78.3
89.0
98.9
100.0
106.5
110.6
102.3
102.4
113.7
127.1
125.7
109.3
121.7
129.5
139.2

69.3
71.5
75.8
80.0
85.2
90i9
96.7
100.0
106.2
111.5
112.3
116.6
126.5
133.8
134.6
126.4
140.9
148.1
154.7

80.3
80.8
83.1
86.4
89.9
93.2
98.2
100.0
104.2
108.3
112.2
109.8
113.1
114.7
115.3
112.8
114.2
117.8
124.2

63.4
67.0
72.0
77.0
83.6
88.7
95.5
100.0
108.4
117.3
124.5
130.5
139.4
145.4
143.7
146.0
151.0
156.5
161.0

132.3
133.2
135.3
136.1
137.0
137.8

131.6
132.6
135.1
135.8
137.1
137.8

123.4
124.0
126.8
128.0
129.3
130.5

143.4
145.3
147.0
147.0
148.5
148.4

112.8
116.3
120.6
119.2
119.5
122.8

163.8
160.3
154.8
154.0
156.7
156.8

138.7
138.1
138.5
138.9
139.3
139.7

138.5
138.6
139.0
139.4
139.9
140.5

131.6
131.3
131.7
132.4
132.7
133.4

148.6
149.4
149.5
149.6
150.1
150.9

119.8
115.4
118.0
119.6
118.8
113.4

161.4
155.7
154.1
154.0
154.2
156.7

138.8
139.2
140.9
143.2
143.9
144.9

138.7
139.4
141.4
143.5
144.3
145.5

131.1
131.5
134.4
136.9
137.6
139.0

149.8
150.6
151.4
153.2
154.0
154.9

115.0
114.4
119.3
127.2
126.7
128.0

162.3
163.5
159.5
156.0
157.0
158.6

146.1
147.1
147.8
148.6
149.5
150.4

146.7
147.6
148.7
149.4
150.3
151.2

141.1
142.2
142.8
143.9
145.0
145.9

155.0
155.6
157.1
157.5
158.1
158.9

127.1
126.0
124.1
127.7
127.9
128.0

159.9
160.8
162.3
162.4
162.6
163.3

1967 proportion

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969 .

_

._

.

.

-_

__

1970
1971
1972
1973
1974
1975
1976
1977.
19781

_

___

„

1977: Jan

Feb
Mar
Apr
May

..

June
July
Aug..
Sept
Oct
Nov.

__
_.

_

„

Dec
1978: Jan

Feb

Mar
Apr

My
a

June"":"".:::'::""::
July
Aug
Sept

Set
Nov»

— :

Dec »

::
_-

1

Preliminary estimates by Council of Economic Advisers.
Source: Board of Governors of the Federal Reserve System, except as noted.




228

TABLE R-40.—Industrial production indexes, market groupings, 1947-78
(1967=100; monthly data seasonally adjusted]

Final products

Year or
month

Total
industrial
production

Materials»

Consumer goodsl
Total
Total

Equipment 2

Automotive
products

Home
goods

Total

Business

Intermediate
products

Total

Durable
goods

Nondurable
goods

1967 proportion. __ 100.00

47.82

27.68

2.83

5.06

20.14

12.63

12.89

39.29

20.35

1947..
1948..
1949..

39.4
41.1
38.8

38.6
40.0
38.8

42.4
43.7
43.4

45.3
47.4
47.0

37.5
39.1
36.2

30.6
32.2
28.7

38.0
39.5
34.5

41.9
44.3
42.0

39.5
41.2
37.6

38.3
39.4
35.3

1950..
1951..
1952..
1953..
1954..

44.9
48.7
50.6
54.8
51.9

43.7
47.2
50.7
54.1
51.3

49.6
49.1
50.2
53.2
52.9

59.1
52.3
47.1
59.5
55.4

49.9
43.0
43.0
48.6
44.9

31.1
43.3
51.9
56.3
49.3

37.0
45.2
51.2
53.3
46.8

48.8
51.3
50.9
54.5
54.3

45.0
49.8
50.5
56.1
51.8

44.4
50.5
51.6
60.3
52.0

45.9

1955..
1956..
1957..
1958..
1959..

58.5
61.1
61.9
57.9
64.8

55.4
58.6
60.3
57.6
63.2

59.0
61.2
62.6
62.1
68.1

73.6
60.6
63.5
50.5
63.3

53.0
55.7
54.5
51.4
59.0

50.4
55.3
57.5
51.5
56.5

50.8
58.8
61.1
51.5
57.9

61.7
64.4
64.4
63.0
69.5

61.3
62.8
62.8
56.5
65.2

63.7
63.9
63.8
53.7
64.0

52.5
54.9
54.7
54.4
62.1

I960..
1961..
1962..
1963..
1964..

66.2
66.7
72.2
76.5
81.7

65.3
65.8
71.4
75.5
79.7

70.7
72.2
77.1
81.3

72.5
66.1
80.1
87.7
91.9

59.4
61.3
66.5
71.8
78.4

58.1
57.3
63.7
67.5
71.4

59.4
57.7
62.7
65.8
73.7

70.0
71.4
75.7
79.9
85.2

66.1
66.2
72.1
76.7
82.9

64.8
63.3
70.4
75.1
81.9

63.2
65.8
71.3
75.6
82.2

1965..
1966..
1967..
1968.
1969.,

89.8
97.8
100.0
106.3
111.1

87.6
95.9
100.0
106.2
109.6

92.6
97.3
100.0
105.9
109.8

113.3
112.8
100.0
119.4
118.1

88.9
97.9
100.0
106.4
113.2

80.7
94.0
100.0
106.5
109.3

84.4
97.7
100.0
105.5
112.5

90.6
96.2
100.0
106.3
112.9

92.4
100.7
100.0
106.5
112.5

93.8
103.3
100.0
106.2
112.1

90.3
97.5
100.0
108.8
115.7

1970.
1971.
1972.
1973.
1974.

107.8
109.6
119.7
129.8
129.3

105.3
106.3
115.7
124.4
125.1

109.0
114.7
124.4
131.5
128.9

124.4
141.4
153.0
132.8

110.2
115.6
129.5
142.5
136.8

100.1
94.7
103.8
114.5
120.0

107.0
104.1
118.0
134.2
142.4

112.9
116.7
126.5
137.2
135.3

109.2
111.3
122.3
133.9
132.4

103.8
104.9
117.7
134.6
132.7

115.4
120.2
132.9
142.2
142.6

1975.
1976.
1977.

117.8
129.8
137.1

118.2
127.2
134.9

124.0
136.2
143.4

125.8
154.8
174.2

118.8
133.9
141.3

110.2
114.6
123.2

128.2
136.3
149.2

123.1
137.2
145.1

115.5
130.6
136.9

109.1
126.8
134.5

126.6
146.3
153.5

1977: Jan.
Feb..
Mar.
Apr..
May.
June.

132.3
133.2
135.3
136.1
137.0
137.8

130.8
131.6
133.3
134.1
134.7
135.4

139.9
140.5
142.9
142.9
143.1
143.8

164.2
161.7
178.3
173.9
172.8
179.8

134.8
137.3
137.9
138.8
140.6
142.3

118.4
119.2
120.0
122.1
123.2
124.1

142.3
143.5
144.8
147.1
148.9
150.1

142.2
141.6
141.8
142.3
143.5
144.7

131.1
132.7
135.5
136.5
137.8
138.7

127.4
128.4
131.9
133.8
135.2
136.4

144.8
150.4
153.3
153.7
155.4
154.7

July..
Aug..
Sept.
Oct..
Nov.
Dec..

138.7
138.1
138.5
138.9
139.3
139.7

136.8
136.3
136.8
136.5
137.0
137.6

145.4
144.7
144.9
144.9
145.2
145.8

184.8
177.2
177.0
179.4
173.6
172.4

142.9
142.1
143.6
144.2
145.0
146.6

124.8
124.9
125.6
125.0
125.8
126.2

151.2
151.1
152.1
152.6
153.5
154.0

146.3
146.1
146.5
147.8
148.4
150.4

138.9
137.6
137.9
138.9
139.0
138.8

136.8
135.4
135.7
137.1
137.2
138.7

154.1
155.1
153.9
154.4
155.4
155.3

1978: Jan..
Feb..
Mar.
Apr..
{/fay.
June.

138.8
139.2
140.9
143.2
143.9
144.9

134.9
136.4
138.9
140.5
140.5
141.1

141.8
143.8
145.9
147.5
147.0
147.0

157.5
162.8
175.8
184.3
180.0
179.9

140.3
144.6
147.2
149.2
148.9
149.7

125.4
126.2
129.1
130.8
131.6
133.0

152.6
154.2
157.4
159.3
160.2
161.8

151.6
151.4
151.4
152.1
152.6
154.7

139.2
138.6
139.9
143.7
145.1
146.4

138.2
137.0
138.6
142.7
143.9
145.4

155.0
158.5
160.5
162.0
163.5
164.1

July..
Aug..
Sept..
Oct...
Now.
Dec

146.1
147.1
147.8
148.6
149.5
150.

142.2
143.3
143.7
143.9
144.8
145.6

147.7
148.4
149.0
149.1
149.8
150.5

182.2
182.1
178.3
186.2
189.6
186.3

148.9
150.0
150.2
148.5
147.6
149.6

134.7
136.3
136.4
136.9
137."
138.8

163.8
165.4
165.8
166.9
167.9
169.3

155.6
156.4
157.0
158.1
159.
160.5

147.9
148.6
149."
151.3
152.2
152.9

148.7
150.4
152.1
153.7
154.6
155.8

162.5
162.7
164.4
165.4
166.5
166.8

1
Also includes clothing and consumer staples, not shown separately.
* Also includes defense and space equipment, not shown separately.
1
Also includes energy materials, not shown separately.
Source: Board of Governors of the Federal Reserve System.




229

10.47

TABLE B-41.-—Industrial production indexes, selected manufactures, 1947-78
(1967= 100; monthly data seasonally adjusted]
Nondurable manufactures

Durable manufactures
Primary metals

Year
or
month

Fabricated
metal
products

Nonelectrical
machinery

Electrical
machinery

Transportation
equipment

Lumber
and
products

Print- ChemAn
Aping
icals
parel
and
and
prod- pubproducts lishing ucts

Total

Motor
vehicles
and
parts

8.05

9.27

4.50

1.64

3.31

4.72

7.74

8.75

22.2
23.0
21.6

31.8
34.8
34.9

58.9
61.3
54.1

57.8
60.3
59.7

43.3
45.4
46.6

19.7
21.3
21.0

55.8
55.2
55.9

37.5
47.7
51.9
54.0
46.1

29.6
29.8
34.0
39.0
34.7

41.8
46.6
54.2
68.0
59.2

60.5

65.7
65.5
64.7
68.4
68.0

64.3
63.1
66.3
67.2
66.4

48.9
49.7
49.7
52.0
54.1

26.2
29.7
31.1
33.6
34.1

57.9
59.0
60.2
61.4
62.7

67.8
68.8
70.6
63.3
71.0

50.6
58.0
57.9
48.6
56.7

39.9
43.1
42.8
39.2
47.6

68.0
66.0
70.7
55.8
63.2

81.2
65.8
69.0
51.0
66.2

75.9
75.0
68.8
69.9
79.3

73.3
75.0
74.9
72.8
80.1

59.5
63.2
65.4
63.9
68.2

39.8
42.7
45.2
46.6
54.3

66.3
70.1
71.1
72.9
76.5

77.7
74.2
77.3
84.3
95.9

71.1
69.4
75.4
77.8
82.6

56.9
55.4
62.1
66.3
75.6

51.6
54.8
62.9
64.7
68.4

65.4
61.5
71.1
78.0
80.0

74.7
65.5
79.8
88.3
90.7

74.7
78.2
82.5
86.3
92.7

81.7
82.2
85.5
89.1
92.2

71.0
71.3
73.9
77.8
82.6

56.4
59.2
65.7
71.8
78.8

78.6
80.9
83.4
86.4
90.4

102.1
108.4
100.0
104.3
113.8

105.2
108.4
100.0
103.2
112.6

90.8
97.2
100.0
105.6
107.9

85.0
98.8
100.0
101.8
109.3

81.7
97.9
100.0
105.5
111.9

95.1
102.0
100.0
111.1
108.4

115.9
113.9
100.0
120.3
116.5

96.3
100.0
100.0
105.5
107.9

97.4
99.9
100.0
102.9
106.7

87.9
94.6
100.0
103.2
107.4

87.8
95.7
100.0
109.5
118.4

92.4
96.0
100.0
102.6
106.1

106.6
100.2
112.1
126.7
123.1

104.7
96.1
107.1
122.3
119.8

102.4
103.5
112.1
124.7
124.2

104.4
100.2
116.0
133.7
140.1

108.1
107.7
122.2
143.1
143.8

89.5
97.9
108.2
118.3
108.7

92.3
118.6
135.8
148.8
128.2

105.6
113.8
120.8
126.0
116.2

101.4
104.7
109.4
117.3
114.3

107.0
107.1
112.7
118.2
118.2

120.4
125.9
143.6
154.5
159.4

108.9
112.8
116.8
120.9
124.0

„

96.4
__ 108.9
110.2

95.8
104.9
103.4

109.9
123.3
130.9

125.1
135.0
144.8

116.5
131.6
141.9

97.4
110.6
121.1

111.1
140.7
159.7

107.6
125.1
133.4

107.6
122.2
124.2

113.3
120.6
124.7

147.2
169.3
180.7

123.4
132.3
137.9

1977: Jan.
Feb
Mar
Apr
May
June

100.8
100.2
108.3
112.2
117 1
114.7

89.7
91.3
97.9
103.9
111.0
109.2

125.7
125.8
127.5
127.6
128 2
130.8

139.9
139.8
139.8
142.9
142 6
144.0

134.0
137.6
137.6
139.6
141.8
142.6

113.5
113.4
120.5
119.8
120.3
123.7

145.5
145.4
161.2
158.1
157.7
163.2

132.7
132.2
132.1
130.6
133.0
132.4

123.0
124.4
122.2
121.4
123.5
122.1

124.7
122.4
124.8
123.4
124.4
124.1

172.2
174.9
180.0
180.6
182.8
183.5

134.2
136.4
138.7
138.0
138.3
136.9

July
Aug.
Sept
Oct
Nov
Dec

114.4
112.5
109.0
113.5
111.2
111.0

110.9
110.6
104.6
107.7
104.3
103.8

132.0
134.0
133.6
133 8
135.8
136.4

145.7
145.2
147.4
148.9
149.7
151.7

143.6
143.9
144.6
144 2
146.0
147.3

125.6
124.3
125.5
124.3
122.0
122.2

166.2
164.4
165.6
168.4
163.0
161.8

132.9
131.8
137.1
135.7
137.5
138.1

121.1
124.1
127.7
129.0
125.1
125.8

124.9
125.0
124.2
125.7
126.2
127.5

182.6
182.6
181.3
182.3
183.1
183.0

138.3
139.3
138.3
137.3
139.4
140.4

1978: Jan
107.4
Feb
106.2
Mar.. . . 106.1
114.3
May'.IIII 115.5
June
117.5

99.5
96.3
96.4
109.0
110.5
114.5

136.9
136.9
138.1
139.5
140.4
142.3

150.1
150.1
151.5
152.2
152.9
154.6

144.0
146.4
149.5
152.3
152.9
154.1

116.2
118.4
126.5
130.5
130.1
130.4

146.6
153.1
165.1
171.7
168.3
167.7

138.5
135.5
136.5
136.9
136.5
138.7

118.6
121.1
122.8
126.1
125.8
126.8

129.9
128.3
129.1
128.6
128.2
128.7

184.4
183.7
185.2
185.5
188.1
191.1

139.3
140.8
141.1
143.1
142.8
141.8

July.....
Aug
Sept....
Oct
Nov P . . . .
Dec P . . . .

119.0
120.9
123.2
123.8
123.9

144.0
145.8
146.3
146.3
146 8
147.9

156.1
157.3
158.7
159.8
160.7
162.2

157.9
156.9
158.3
157.9
159 2
160.9

132.1
133.4
132.8
136.9
139 3
138.6

169.7
171.0
168.9
177.1
181 3
178.5

138.1
136.9
139.2
140.2
141.6

124.5
127.2
130.9
130.6

130.3
129.5
131.0
130.3
131.9
132.9

192.3
192.2
194.2
195.8
196.8

142.9
144.0
144.4
143.5
144.1

Total

Iron
and
steel

1967 proportion.

6.57

4.21

5.93

9.15

1947
1948
1949

63.3
65.8
55.4

49.9
50.8
45.8

39.0
39.2
33.4

1950
1951
1952
1953
1954

69.7
75.8
69.2
78.5
63.5

70.1

56.1
59.9
58.5
66.0
59.4

1955
1956 .
1957
1958
1959

82.5
82.0
78.5
62.3
72.7

93.2
91.5
88.2
66.5
76.5

1960
1961
1962
1963
1964

72.4
71.1
76.3
82.3
92.8

1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977

—

123.0
126.0
127.9
128.4
128.9
129.3

Source: Board of Governors of the Federal Reserve System.




230

Foods

TABLE B-42.—Capacity utilization rate in manufacturing, 1948—78
[Percent; quarterly data seasonally adjusted]
Commerce series *

FRB series *
Year or
quarter

Total
manufacturing

Primary
processing

Advanced
processing

1948
1949

82.5
74.2

87.3
76.2

85.8
85.4
89.2
80.1

88.5
90.2
84.9
89.4
80.6

1955
1956
1957
1958....
1959....

87.0
86.1
83.6
75.0
81.6

1960
1961..._
1962
1963
1964

Nondurable
goods

Primaryprocessed
goods

Advanced
processed
goods

80.0
73.2

1950
1951
1952
1953
1954....

Total
manufacturing

Wharton series»
Total
manufacturing

Durable
goods

79.8
83.4
85.9
89.3
80.0

88.9
90.3
88.4
92.4
82.9

83.8
87.2
86.0
93.3
79.5

96.1
94.8
91.8
91.2
87.7

92.0
89.4
84.7
75.4
83.0

84.2
84.4
83.1
74.9
81.1

91.4
90.8
87.9
77.5
84.0

90.2
89.0
86.0
70.8
78.6

93.1
93.4
90.8
87.4
92.0

80.1
77.3
81.4
83.5
85.7

79.8
77.9
81.5
83.8
87.8

80.5
77.2
81.6
83.4
84.6

82.1
79.1
82.5
84.0
86.8

77.0
72.9
77.7
79.6
82.8

89.8
88.5
89.8
90.7
92.8

1965
1966
1967
1968
1969

89.5
91.1
86.9
87.0
86.2

91.0
91.4
85.7
87.6
88.6

88.9
91.1
87.6
86.8
85.0

92.4
96.6
93.5
95.0
95.2

90.6
96.0
91.8
93.7
94.0

95.3
97.5
96.0
97.0
97.1

1970
1971
1972
1973
1974

79.2
78.0
83.1
87.5
84.2

82.8
82.0
88.0
92.4
87.7

77.3
75.9
80.5
84.9
82.2

87.8
86.4
91.8
97.1
92.9

84.2
82.3
88.9
96.6
91.9

93.4
92.8
96.2
97.9
94.5

1975
1976
1977
1978

73.6
80.2
82.4
84.2

73.8
82.2
84.3
86.6

73.5
79.1
81.5
82.9

80.4
87.4
90.1
92.8

77.1
84.7
88.2
92.0

85.7
92.0
93.3
94.2

87.1
87.6
87.8
87.7

91.8
92.1
92.7
93.0

84.5
85.2
85.0
85.0

96.4
97.1
97.4
97.4

95.4
96.4
97.1
97.4

98.0
98.3
97.7
97.5

85.7
85.8
85.5
79.7

90.6
90.1
89.3
80.7

83.0
83.3
83.5
79.1

94.6
94.7
94.5
87.8

93.3
93.5
93.8
86.9

96.7
96.7
95.6
89.1

IV...

70.9
71.3
75.3
76.9

69.9
70.4
76.3
78.6

71.3
71.9
74.8
75.9

77.3
77.9
82.3
83.9

74.8
74.7
78.8
80.0

81.3
83.1
88.1
90.4

1976: I . . . .
II...
ML.
IV..

79.1
80.3
80.8
80.6

81.0
82.5
83.1
82.2

78.0
79.1
79.5
79.7

86.3
87.8
88.1
87.6

82.7
85.1
86.0
85.0

92.1
92.3
91.6
91.9

1977: I . . . .
II...
III..
IV..

81.2
82.7
83.0
82.9

82.3
85.1
84.9
84.6

80.5
81.4
81.9
82.0

88.3
90.2
90.8
91.0

85.6
88.3
89.2
89.6

92.9
93.6
93.5
93.4

1978: L . _ .
II —
III..

82.1
84.0
85.0
85.7

83.8
86.3
87.8

81.1
82.7
83.5
84.2

90.0
92.5
93.8
94.8

88.4
91.5
93.4
94.6

92.9
94.2
94.4
95.1

P...

1973: I
III."
IV..
1974: I
IV....
1975: I
III."!

Durable
goods

Nondurable
goods

1
For description of the series, see "Federal Reserve Measures of Capacity and Capacity Utilization," February 1978.
2
Quarterly data are for last month in quarter. Annual data are averages of the four indexes, except for 1965 (December
index) and 1966-67 (averages of June and December indexes). For description of the series, see "Survey of Current Business," July 1974.
3 Annual data are averages of quarterly indexes. For description of the series, see F. Gerard Adams and Robert Summers,
"The Wharton Index of Capacity Utilization: A Ten Year Perspective," 1973 Proceedings of the Business and Economic
Statistics Section, American Statistical Association.

Sources: Board of Governors of the Federal Reserve System, Department of Commerce (Bureau of Economic Analysis),
and Wharton School of Finance.




231

TABLE B-43.—New construction activity, 1929-78
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]

Private construction

Year or month

Total
new
construction

Nonresidential buildings and other
construction *

Residential
buildingsl
Total

Public construction

Total *

New
housing
units

Total

Total

Commercial

Industrial

Federal

State
and
local*

2.3

Other*

10.8

8.3

3.6

3.0

4.7

1.1

0.9

2.6

2.5

0.2

1933

2.9

1.2

.5

.3

.8

.1

.2

.5

1.6

.5

1.1

1939

8.2

4.4

2.7

2.3

1.7

.3

.3

1.2

3.8

.8

3.1

8.7
12.0
14.1
8.3
5.3

5.1
6.2
3.4
2.0
2.2

3.0
3.5
1.7
.9
.8

2.6
3.0
1.4
.6

2.1
2.7
1.7
1.1
1.4

.3
.4
.2
.0
.1

.4
.8
.3
.2
.2

1.3
1.5
1.2
.9
1.1

3.6
5.8
10.7
6.3
3.1

1.2
3.8
9.3
5.6
2.5

2.4
2.0
13
.7
.6

5.8
14.3

3.4
12.1

1.3
6.2

.7
4.8

2.1
5.8

.2
1.2

.6
1.7

1.3
3.0

2.4
2.2

1.7
.9

.7
1.4

1947..
L948
L949

20.0
26.1
26.7

16.7
21.4
20.5

9.9
13.1
12.4

7.8
10.5
10.0

6.9
8.2
8.0

1.0
1.4
1.2

1.7
1.4
1.0

4.2
5.5
5.9

3.3
4.7
6.3

.8
1.2
1.5

3.5
4.8

1950
1951.._ " . .
1952 . .
1953...
1954

33.6
35.4
36.8
39.1
41.4

26.7
26.2
26.0
27.9
29.7

18.1
15.9
15.8
16.6
18.2

15.6
13.2
12.9
13.4
14.9

8.6
10.3
10.2
11.3
11.5

1.4
1.5
1.1
1.8
2.2

1.1
2.1
2.3
2.2
2.0

6.1
6.7
6.8
7.3
7.2

6.9
9.3
10.8
11.2
11.7

1.6
3.0
4.2
4.1
3.4

5.2
6.3
6.6
7.1
8.3

1955 . .
1956
1957 . .
1958...
1959

46.5
47.6
49.1
50.0
55.4

34.8
34.9
35.1
34.6
39.3

21.9
20.2
19.0
19.8
24.3

18.2
16.1
14.7
15.4
19.2

12.9
14.7
16.1
14.8
15.1

3.2
3.6
3.6
3.6
3.9

2.4
3.1
3.6
2.4
2.1

7.3
8.0
9.0
8.8
9.0

11.7
12.7
14.1
15.5
16.1

2.8
2.7
3.0
3.4
3.7

8.9
10.0
11.1
12.1
12.3

I960...
1961
1962 _
1963
1964

54.7
56.4
60.2
64.8
67.7

38.9
39.3
42.3
45.5
47.3

23.0
23.1
25.2
27.9
28.0

17.3
17.1
19.4
21.7
21.8

15.9
16.2
17.2
17.6
19.3

4.2
4.7
5.1
5.0
5.4

2.9
2.8
2.8
2.9
3.6

8.9
8.7
9.2
9.7
10.3

15.9
17.1
17.9
19.4
20.4

3.6
3.9
3.9
4.0
3.9

12.2
13.3
14.0
15.4
16.5

1965
1966
1967
1968
1969

73.7
76 4
78.1
87.1
93.9

51.7
52.4
52.5
59.5
66.0

27.9
25.7
25.6
30.6
33.2

21.7
19.4
19.0
24.0
25.9

23.8
26.7
27.0
28.9
32.8

7.8
9.4

6.0
6.8

15.1
16.6

22.1
24.0
25.5
27.6
28.0

4.0
4.0
3.5
3.4
3.3

18.0
20.0
22.1
24.2
24.7

1970
1971 .
1972
1973 . .
1974

94.9
110.0
124.1
137.9
138.5

66.8
80.1
93.9
105.4
100.2

31.9
43.3
54.3
59.7
50.4

24.3
35.1
44.9
50.1
40.6

34.9
36.8
39.6
45.7
49.8

9.8
11.6
13.5
15.5
15.9

6.5
5.4
4.7
6.2
7.9

18.6
19.8
21.5
24.0
25.9

28.1
29.9
30.2
32.5
38.3

3.3
4.0
4.4
4.9
5.3

24.8
25.9
25.8
27.7
33.0

1975
1976
1977

134.5
148.8
172.6

93.7
110.5
134.7

46.5
60.5
81.0

34.4
47.3
65.7

47.2
49.9
53.8

12.8
12.8
14.8

8.0
7.2
7.7

26.4
30.0
31.3

40.9
38.3
37.8

6.3
6.8
7.4

34.6
31.6
30.4

1929._

1940
1941
1942
1943
1944

.
...

1945
1946...
New series

.

See next page for continuation of table.




232

2.5

T A B L E B - 4 3 . — N e w construction activity, 1929-78— Continued
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]
Private construction
Residential
buildings i

Total
Year or month

new

construction

Total
Total s

New
nousing
units
Finite

Public construction

Nonresidential buildings and other
construction i
Total
Total

Commercials

Industrial

Federal

State
and
locals

Other*

1977: Jan
Feb..MarApr-...
MayJune...

152.5
160.1
165.3
169.3
173.4
175.8

118.6
123.6
128.1
131.8
134.6
136.6

67.0
71.9
75.8
79.0
81.9
82.6

52.5
58.1
61.5
63.5
65.9
66.6

51.7
51.7
52.2
52.8
52.7
53.9

12.8
12.8
13.4
13.8
14.0
15.2

7.1
6.8
7.3
7.6
7.5
7.6

31.8
32.0
31.5
31.4
31.2
31.2

33.8
36.4
37.3
37.5
38.8
39.2

7.3
7.6
7.4
7.5
7.4
6.7

26.5
28.8
29.9
30.0
31.4
32.5

July—

176.4
176.4
177.8
176.7
178.1
179.0

137.3
137.6
138.3
139.2
140.6
142.3

82.9
82.9
83.0
84.2
85.2
87.4

67.1
67.1
67.6
69.3
70.7
72.8

54.4
54.7
55.4
55.0
55.4
54.9

15.7
15.7
16.2
15.9
15.9
14.9

7.7
8.1
8.1
8.2
8.4
7.9

31.0
30.9
31.2
30.9
31.1
32.1

39.1
38.8
39.4
37.4
37.4
36.8

8.0
7.9
8.6
6.6
7.3
7.3

31.1
30.9
30.8
30.8
30.1
29.4

May"."-".
June...

171.4
177.6
185.4
195.0
201.3
206.3

134.9
141.9
147.7
153.5
156.2
161.1

79.4
85.3
88.1
92.2
94.3
95.4

65.0
70.9
72.5
74.4
75.1
76.6

55.6
56.6
59.6
61.3
61.9
65.7

15.0
15.2
16.2
17.2
18.5
19.2

7.4
7.7
9.2
9.2
8.7
11.3

33.2
33.8
34.1
34.9
34.6
35.1

36.4
35.7
37.7
41.5
45.1
45.2

8.1
8.1
8.0
8.5
7.8
7.4

28.3
27.6
29.6
33.1
37.3
37.8

July—
Aug.._
SeptOct—
Nov*._

210.2
208.7
209.2
209.9
212.8

161.8
160.6
161.3
161.9
165.5

95.9
95.0
94.2
93.6
95.8

77.7
77.1
76.8
76.9
79.3

65.9
65.6
67.0
68.3
69.7

19.5
18.8
18.9
19.4
20.4

11.2
12.0
12.6
12.6
12.7

35.3
34.7
35.4
36.3
36.6

48.4
48.2
48.0
47.9
47.3

9.4
9.6
9.8
7.7
8.5

39.0
38.5
38.2
40.2
38.8

Sept
Oct
Nov."'"
Dec...
1978: Jan....
Feb...
Mar...

1 Beginning I960, farm residential buildings included in residential buildings; prior to 1960, included in nonresidential
buildings and other construction.
2
Total includes additions and alterations and nonhousekeeping units, not shown separately.
3
Office buildings, warehouses, stores, restaurants, garages, etc.
* Religious, educational, hospital and institutional, miscellaneous nonresidential, farm (see also footnote 1), public
utilities, and all other private.
« Includes Federal grants-in-aid for State and local projects.
Source: Department of Commerce (Bureau of the Census).




233

TABLE B-44.—New housing units started and authorized, 1959-78
[Thousands of units]
New housing units started
Private and
public »

Private»

New private housing units
authorized»

Total (farm and nonfarm)
Year or month

Total
(farm
and
nonfarm)

Type of structure

Nonfarm
Total

One
unit

1959

1,553.7 1,531.3 1,517.0 1,234.0

I960
1961
1962
1963
1964

1,296.1
1,365.0
1,492.5
1,634.9
1,561.0

1,274.0
1,336.8
1,468.7
1,614.8
1,534.0

994.7
1,252.2
974.3
1,313.0
991.4
1,462.9
1,603.2 1,012.4
970.5
1,528.8

1965
1966
1967
1968
1969

1,509.7
1,195.8
1,321.9
1 545.4
1,499.5

1,487.5
1,172.8
1,298.8
1,521.4
1,482.3

1,472.8
1,164.9
1,291.6
1, 507.6
1,466.8

1970
1971
1972
1973
1974
1975
1976
1977
1978

2 to 4
units

Type of structure

5 units
or
more

Total

One
unit

2 to 4
units

5 units
or more

1,208.3

283.0

257.4
338.7
471.5
590.8
108.4
450.0

938.3

77.1

192.9

998.0
1,064.2
1,186.6
1,334.7
1,285.8

746.1
722.8
716.2
750.2
720.1

64.6
67.6
87.1
118.9
100.8

187.4
273.8
383.3
465.6
464.9

963.7
778.6
843.9
899.4
810.6

86.6
61.1
71.6
80.9
85.0

422.5
325.1
376.1
527.3
571.2

1,239.8
971.9
1,141.0
1,353.4
1,323.7

709.9
563.2
650.6
694.7
625.9

84.8
61.0
73.0
84.3
85.2

445.1
347.7
417.5
574.4
612.7

1,469.0
2,084.5
2,378.5
2,057.5
1,352.5

812.9
1,433.6
2,052.2 1,151.0
2,356.6 1,309.2
2,045.3 1,132.0
1,337.7
888.1

84.8
120.3
141.3
118.3
68.1

535.9
780.9
906.2
795.0
381.6

1,351.5
646.8
1,924.6
906.1
2,218.9 1, 033.1
1, 819.5
882.1
1,074.4
643.8

88.1
132.9
148.6
117.0
64.3

616.7
885.7
1,037.2
820.5
366.2

1,171.4
1, 547.6
1,989.8
2,021.5

892.2
1,160.4
1, 537.5 1,162.4
1,987.1 1,450.9
2,018.5 1,432.7

64.0
85.9
121.7
125.7

939.2
675.5
204.3
893.6
289.2 1,296.2
414.4 1,690.0 1,126.1
460.2 1,658.4 1,077.6

63.9
93.1
121.3
124.0

199.8
309.5
442.7
456.8

Seasonally adjusted annual rates

1977: Jan
Feb
Mar....
Apr
May.
June

81.5
112.7
173.6
182.4
201.3
197.8

1,393
1,751
2,090
1,899
1,982
1,931

1,011
1,362
1,489
1,433
1,469
1,406

104
116
114
118
120
113

278
273
487
348
393
412

,454
1,538
1,663
1,655
1,656
1,739

991
1,059
1,138
L.088
1,099
1,114

116
113
113
113
112
119

347
366
412
454
445
506

July
Aug..
Sept
Oct....
Nov
Dec.

189.8
194.2
177.8
193.2
155.9
129.4

2,072
2,038
2,012
2,139
2,096
2,203

1,453
1,454
1,508
1,532
1,544
1,574

124
119
124
127
134
153

495
465
380
480
418
476

1,678
1,770
1,695
1,781
1,822
1,778

1,114
1,148
1,139
1,186
1,218
1,188

120
136
123
129
144
122

444
486
433
466
460
468

88.6
101.3
172.3
197.5
211.1
216.1

1,548
1,569
2,047
2,165
2,054
2,124

1,156
1,103
1,429
1,492
1,478
1,441

291
387
492
531
487
535

1,526
1,534
1,647
1,740
1,597
L,821

1,032
957
1,037
1,157
1,058
1,123

11
0
107
127
117
112
156

393
470
483
466
427
542

192.3
190.9
181.1
192.1
157.7
120.5

2,119
2,025
2,075
2,106
2,155
2,125

1,453
1,440
1,463
1,455
1,558
1,533

11
0
7
9
16
2
12
4
8
9
18
4
15
3
19
3
11
1
19
3
16
5
13
3

531
446
501
512
441
459

1,632
L, 563
1,731
1,719
1,724
1,680

1,035
1,020
1,092
1,127
1,114
1,158

107
125

490
418
514
459
479
374

1978: Jan
Feb
Mar
May.".".""""
June
July
Aug
Sept
Oct
NOVP

Dec*

15
2
13
3
11
3
18
4

1
Units in structures built by private developers for sale upon completion to local public housing authorities under the
Department of Housing and Urban Development "Turnkey" program are classified as private housing. Military housing
starts, including those financed with mortgages insured by FHA under Section 803 of the National Housing Act, are included
in publicly owned starts and excluded from total private starts.
2
Authorized by issuance of local building permit: in 14,000 permit-issuing places beginning 1972; 13,000 for 1967-71;
12,000 for 1963-66; and 10,000 prior to 1963.
3 Not available separately beginning January 1970.

Note.—Only the series on private and public nonfarm housing units started is available prior to 1959. See 1976 "Economic Report" for this earlier series.
Source: Department of Commerce, Bureau of the Census.




234

TABLE B-45.-—Business expenditures for new plant and equipment, 1947-79

1

[Billions of dollars; quarterly data at seasonally adjusted annual rates|
Nonmanufacturing

Manufacturing
Year
or quarter

Transportation
Total

Total

Durable
goods

Nondurable
goods

Total

Mining

Railroad

Air

Other

Public
utilities

Communication

Commercial
and
others

1947
1948
1949

19.33
21.30
18.98

8.44
9.01
7.12

3.25
3.30
2.45

5.19
5.71
4.68

10.89
12.29
11.86

0.69
.93
.88

0.91
1.37
1.42

0.17
.10
.12

1.13
1.17
.76

1.54
2.54
3.10

1.40
1.74
1.34

5.05
4.42
4.24

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964

20.21
25.46
26.43
28.20
27.19

7.39
10.71
11.45
11.86
11.24

2.94
4.82
5.21
5.31
4.91

4.45
5.89
6.24
6.56
6.33

12.82
14.75
14.98
16.34
15.95

.84
1.11
1.21
1.25
1.28

1.18
1.58
1.50
1.42
.93

.10
.14
.24
.24
.24

1.09
1.33
1.23
.29
.22

3.24
3.56
3.74
4.34
3.99

1.14
1.37
1.61
1.78
1.82

5.22
5.67
5.45
6.02
6.45

29.53
35.73
37.94
31.89
33.55

11.89
15.40
16.51
12.38
12.77

5.41
7.45
7.84
5.61
5.81

6.48
7.95
8.68
6.77
6.95

17.64
20.34
21.43
19.51
20.78

1.31
1.64
1.69
1.43
1.36

1.02
1.37
1.58
.86
1.02

.26
.35
.41
.37
.78

u 30
1.31
.30
1.06
1.33

4.03
4.52
5.67
5.52
5.14

2.11
2.82
3.19
2.79
2.72

7.63
8.32
7.60
7.48
8.44

36.75
35.91
38.39
40.77
46.97

15.09
14.33
15.06
16.22
19.34

7.23
6.31
6.79
7.53
9.28

7.85
8.02
8.26
8.70
10.07

21.66
21.58
23.33
24.55
27.62

1.30
1.29
1.40
1.27
1.34

1.16
.82
1.02
1.26
1.66

.66
.73
.52
.40
1.02

.30
L23
.65
.58
.50

5.24
5.00
4.90
4.98
5.49

3.24
3.39
3.85
4.06
4.61

8.75
9.13
9.99
10.99
12.02

54.42
63.51
65.47
67.76
75.56

23.44
28.20
28.51
28.37
31.68

11.50
14.06
14.06
14.12
15.96

11.94
14.14
14.45
14.25
15.72

30.98
35.32
36.96
39.40
43.88

1.46
1.62
1.65
1.63
1.86

1.99
2.37
1.86
1.45
1.86

1.22
1.74
2.29
2.56
2.51

.68
.64
.48
.59

6.13
7.43
8.74
10.20
11.61

5.30
6.02
6.34
6.83
8.30

13.19
14.48
14.59
15.14
16.05

79.71
81.21
88.44
99.74
112.40

31.95
29.99
31.35
38.01
46.01

15.80
14.15
15.64
19.25
22.62

16.15
15.84
15.72
18.76
23.39

47.76
51.22
57.09
61.73
66.39

1.89
2.16
2.42
2.74
3.18

1.78
1.67
1.80
1.96
2.54

3.03
1.88
2.46
2.41
2.00

.23
.38
.46
.66
2.12

13.14
15.30
17.00
18.71
20.55

10.10
10.77
11.89
12.85
13.96

16.59
18.05
20.07
21.40
22.05

112.78
120.49
135.80
153.09
170.20

47.95
52.48
60.16
67.65
76.99

21.84
23.68
27.77
31.75
36.89

26.11
28.81
32.39
35.90
40.11

64.82
68.01
75.64
85.44
93.20

3.79
4.00
4.50
4.84
5.31

2.55
2.52
2.80
3.22
3.83

1.84
1.30
1.62
2.36
2.66

3.18
3.63
2.51
2.39
2.67

20.14
22.28
25.80
29.16
32.56

12.74
13.30
15.45
18.04

20.60
20.99
22.97
25.42

114.72
118.12
122.55
125.22

49.21
50.64
54.78
54.44

21.63
22.54
24.59
25.50

27.58
28.09
30.20
28.93

65.51
67.48
67.76
70.78

3.83
3.83
4.21
4.13

2.08
2.64
2.69
2.63

1.18
1.44
1.12
1.41

3.29
4.16
3.44
3.49

21.91
21.85
21.67
23.46

12.54
12.62
13.64
14.30

20.68
20.94
20.99
21.36

130.16
134.24
140.38
138.11

56.43
59.46
63.02
61.41

26.30
27.26
29.23
28.19

30.13
32.19
33.79
33.22

73.74
74.78
77.36
76.70

4.24
4.49
4.74
4.50

2.71
2.57
3.20
2.80

1.62
1.43
1.69
1.76

2.96
2.96
1.96
2.32

25.35
25.29
26.22
26.23

14.19
15.32
16.40
15.82

22.67
22.73
23.14
23.27

1978: I....
II...
III...
IV 3..

144.25
150.76
155.41
161.24

61.57
67.20
67.75
73.20

28.72
31.40
32.25
34.19

32.86
35.80
35.50
39.02

82.68
83.56
87.66
88.04

4.45
4.81
4.99
5.23

3.35
3.09
3.38
3.14

2.67
2.08
2.20
2.61

2.44
2.23
2.47
2.40

27.92
28.46
29.62
30.59

17.07
18.18
18.90

24.76
24.71
26.09

1979: 13...
II3--

163.34
167.82

73.02
76.28

34.13
35.89

38.89
40.40

90.31
91.53

4.94

4.05

3.05

2.99

30.70

„

1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
_
.
1977.
19783
19793
1976: l___.
II...
III...
IV...
1977: l____
II...
III...
IV...

46. 7

44.07
44.59

1
Excludes agricultural business; real estate operators; medical, legal, educational, and cultural services; and nonprofit
organizations. These figures do not agree precisely with the nonresidential fixed investment data in the gross national
product estimates, mainly because those data include investment by farmers, professionals, nonprofit institutions, and
real estate firms, and certain outlays charged to current account.
2
Commercial and other includes trade, service, construction, finance, and insurance.
3
Planned capital expenditures as reported by business in late October-December 1978. Plans are adjusted when
necessary for systematic bias.
Source: Department of Commerce, Bureau of Economic Analysis.




235

TABLE B-46.—Sales and inventories in manufacturing and trade, 1947-78
[Amounts in millions of dollars; monthly data seasonally adjused]
Total manufacturing
and trade

Merchant wholesalers

Manufacturing

Retail trade

Year or month
Sales i

InvenRatios Sales i tories ^ Ratio s

Inventories 2

Ratio 3

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

7,695 9,284
8,597 9,886
8,782 10,210
9,052 10,686
8,993 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

InvenRatios
tories 2

Salss i

Sales.

1947..
1948..
1949..

35,260 52,507
33,788 49,497

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

36
55
58
58
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

1955..
1956..
1957..
1958..
1959..

51,694
54,063
55,879
54, 201
59,729

79, 516
87,304
89,052
87,093
92,129

47
55
59
60
50

26,480
27,740
28.736
27,247
30, 286

45,069
50,642
51,871
50,241
52,945

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

I960..
1961.
1962..
1963..
1964..

60,827 94,713
61,159 95, 594
65,662 101,063
68, 995 105,480
73,682 111,503

56
54
50
49
47

30, 879
30,923
33,357
35,058
37, 331

53,780
54,885
58,186
60,046
63, 403

1.75
1.74
1.70
1.69
1.64

11,656
11,988
12,674
13,382
14, 529

14,120
14,488
14,936
16,048
17,000

1.22
1.20
1.16
1.15
1.14

26,813
26, 221
27,941
29,386
31,094

1965..
1966..
1967..
1968..
1969..

80,283 120,907
87,187 136, 790
90, 348 145,300
98,206 156, —
105,190 169,

45
47
56
54
55

40,995
44,870
46,487
50,268
53,540

68,185
77,952
84,624
90, 550
98,161

1.60
1.62
1.76
1.74
1.77

18, 317
20, 765
25,377
26,604
29,114

1.15
1.15
1.25
1.25
1.23

1970..
1971..
1972..
1973..
1974..

107,698 178,279
116, 351 188, 508
130,049-203,088
151, 6471233,749
175,200 285,064

62
58
50
44
47

52, 832 101>,609
!,622
55,925 102,
63,043 108,223
72, 954 124, 545
84, 821 157,811

1.90
1.83
1.67
1.58
1.65

15,611
16,987
19, 448
20, 846
22, 609
23,943
26,257
29, 584
36, 822
45, 836

18, 294
18, 249
19,630
20, 556
21, 823
23,677
25, 330
24, 413
27,092
29,041

32, 803
35,823
39, 786
46, 254
56, 537

1.29
1.30
1.27
1.17
1.12

30, 924
34,169
37, 422
41, 871
44, 543

43, 867
50,063
55, 079
62,950
70,716

1975..
1976..
1977..

179,621283,614
200,760 309,238
223, 793 334, 785

58
48
44

86,616 157, 878
'"1,886
98,809 169;
1,714
111,256 179,

211,652 311,237
216, 210 313, 488
221,612 316,976
220,835 320, —
0,273
May~_~_II I I 221, 559 322, 250
2,
June
!4,051
222, 589 324,

47
45
43
45
45
46

105, 303
107,184
111, 090
109,521
109,641
111,003

Nov
Dec
1978:

Jan

Feb
Mar
Apr
May

June

55,671
57,169
57, 850
57,929
58, 052
57, 851

78,560
78, 851
80,140
80,957
81, 696
82,636

1.61
1.59
1.59
1.57
1.57
1.52

64, 210
65,095
66,119
66, 209
67, 047
67, 998

1.20
1.22
1.24
1.23
1.21
1.19

58,669
59,177
59, 412
60, 720
61,650
61,813

83, 483
84, 462
85,215
85, 322
86, 299
87,073

114,322 180, 977
118,982 182,393
. 43 121,101183,860
.
1. 40 124, 537 185, 715
1.41 123, 566 187,689
1.41 124, 839 189, 557

1.58
1.53
1.52
1.49
1.52
1.52

55, 985
57, 635
58, 877
62,152
64,011
63, 235

68, 991
70, 361
72, 882
74, 867
75, 474
75, 820

1.23
1.22
1.24
1.20
1.18
1.20

59, 987
61, 548
62,649
63,917
64, 292
64, 565

87, 708
87, 642
89, 097
89, 963
91, 063
91, 543

123,106 191,167
127, 871 192,882
127,919 194,063
130, 614 194, 735
132,459 196, 525

1.55
1.51
1.52
1.49
1.48

63, 404
64, 573
64, 045
67, 292
67,483

75, 664
76, 253
77, 020
78, 346
79, 024

1.19
1.18
1.20
1.16
1.17

64, 343
65, 862
66,347
67, 389
68,181
68, 889

92, 470
93, 680
93,664
94, 301
S5, 930

230,294 337,
',676
238,165 340,
1,396
242,627 345, 839
250,606 350i 545
"~l,
i,226
251, 869 354,
252, 639 356,920

250, 853 359,:
I, 301
258, 306 362, 815
•
258,311
258,311364,747
265, 295 367, 382
— 295
Nov p . . . . 268," — 371,479
123

1.24 48, 370 70,623
1.21 53,542 78,045
1.21 59, 029 87,073
1.23
1.22
1.22
1.22
1.20
1.21

109, 827 177,297
112,019 178, 082
112, 586 179,011
114,091 179, 301
44 114,342 179, 840
114
117,938 179,714

Aug-._-_
Sept
Oct

34,405
38, 073
35, 299
38, 945
42,517

62,123
63, 062
64, 300
65, 301
64, 838
64,947

221,991 324,990
224, 404 -"', 639
327,
225,305 330,
1,345
228, 450 330,
1,832
231, 550 333,186
J, 186
237,017 334,785

July

10,200 14, 241
1.13 11,135 16,007
1.19 11,149 15,470

50,678
51, 857
52, 672
53, 385
53, 866
53,735
53, 495
53, 208
53, 307
53, 639
55, 558
57,266

1.62
1.60
1.55
1.59
1.60
1.59

Feb
Mar

July
Aug
Sept
Oct

1.83 44,633 55,113
1.66 48,408 61,307
1.58 53, 509 67, 998

170,,554
171,575
172,
172| 536
174,015
"
175,716
176, 468

1977:Jan

7,957
7,706

46
46
47
45

1.43
1.40
1.41
1.38
1.39

Dec*

i Monthly average for year and total for month.
3
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.
3

Note.—Earlier data are not strictly comparable with data beginning 1958 for manufacturing and beginning 1967 for
wholesale and retail trade.
1 he 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.
Source: Department of Commerce (Bureau of Economic Analysis and Bureau of the Census).




236

T A B L E B—47.—Manufacturers' shipments and inventories, 1947—78
[Millions of dollars; monthly data seasonally adjusted]
Inventories2

Shipments1

Year or month

Total

Durable
goods
industries

Non
durable
goods Total
industries

Durable goods industries

Total

Materials
and
supplies

Work
Finin
ished
process goods

Nondurable goods industries

Total

Materials
and
supplies

FinWork
ished
in
process goods

1947.
1948.
1949.

15,513
17, 316
16,126

6,694
7,579
7,191

1950.
1951.
1952.
1953.
1954.

18, 634
21,714
22, 529
24,843
23, 355

8,845
10, 493
11,313
13, 349
11,828

9,789
11,221
11,216
11,494
11,527

31, 078
39, 306
41,136
43, 948
41,612

15, 539
20,991
23,731
25, 878 8,966 10,720
23, 710 7,894 9,721

6,206
6,040

15, 539
18,315
17,405
18,070
17.902

8,317
8,167

2,472
2,440

7,409
7,415

1955.
1956.
1957.
1958.
1959.

26,480
27, 740
28,736
27, 247
30,286

14,071
14,715
15, 237
13, 563
15,609

12, 409
13, 025
13,499
13,684
14,677

45,069
50,642
51, 871
50, 241
52,945

26, 405
30, 447
31, 728
30, 258
32,077

9,194
10, 417
10, 608
10,032
10,776

10,756
12,317
12, 837
12,387
13,063

6,348
7,565
8,125
7,839
8,239

18, 664 8,556
20,195 8,971
20,143 8,775
19,983 8,662
20,868 9,T"

2,571
2,721
2,864
2,828
2,944

7,666
8,622
8,624
8,491
8,845

1960.
1961.
1962.
1963.
1964.

30,879
30,923
33, 357
35,058
37, 331

14,996
15, 307
16,095
16,778
17,694

53,780
54, 885
58,186
60,046
63,409

32,371
32, 544
34,632
35,866
38, 506

10, 353
10,279
10, 810
11,068
11,970

12,772
13, 203
14,159
14,871
16,191

9,245
9,063
9,662
9,925
10, 344

21,409 9,082
22, 341 9,493
23,554 9,813
24,180 9,978
24.903 10,131

2,946 9,380
3,110 9,738
3,296 10, 444
3,406 10, 796
3,511 11,261

1965.
1966.
1967.
1968.
1969.

40,995
44, 870
46, 487
50,268
53, 540

15,883
15,616
17, 262
18, 280
19,637
22.221
24,649
25,267
27, 698
29,477

18,774
20,220
21, 220
22, 570
24,064

68,185
77,952
84,624
90, 550
98,161

42,257
49,920
54,978
58,825
64, 705

13, 325
15, 489
16, 441
17, 365
18,692

18,075
21,939
25,005
27, 302
30, 373

10, 854
12, 491
13, 534
14,157
15,639

25,928
28,032
29,646
31,725
33, 456

10,448
11,155
11,709
12,283
12, 721

3,806
4,204
4,420
4,845
5,119

1970.
1971
1972
1973
1974

52,832
55,925
63,043
72,954
84,821

28,215
29,973
34,043
39,704
44,253

24,617 101,609 66,752
2 5 ,952 102,622 66,271
""
28, 999 108,223 70,244
33,250 124, 545 81, 333
40, 568 157,811 101, 790

19,184
19,763
20, 877
26,039
35,221

29,824
28,639
30, 786
35, 504
42,634

17, 745
17, 871
18, 577
19, 788
23,934

34, 857
36, 351
37,979
43,212
56,021

13,147
13,678
14,672
18,114
23,661

5,271
5,666
5,982
6,708
8,175

86, 616 43,678
98,809 50,697
111,256 58, 266

1975.
1976
1977

1977: Jan... 105, 303 54, 532
Feb.. 107,184 55,620
Mar.. 111,090 58,428
Apr.. 109, 521 56,999
May.. 109,641 57, 273
June.. 111,003 58,049

8,819 25,897 13,061
9,738 28, 543 14,662
8,935 26,321 13,060

12,836
13.881
13,261

11,674
12,673
13, 518
14, 599
15,612
16,441
17,004
17,324
18, 389
24,185

42,939 157, 878 101,580 33, 599 42,804 25.177 56, 298 23,123 8,675 24,499
48,112 169, 886 108, 968 36,540 44, 735 27,693 60, 918 24, 945 9,557 26, 416
52,990 179, 714 115,424 38, 719 46, 864 29, 843 64,290 25,102 10,116 29,071
60,945
61, 333
61,957
62, 882
63,645
63,932

24,857 9,552 26,535
25,200 9,587 26, 548
25, 564 9,784 26,608
25,999 9,824 27,054
26,063 9,918 27,663
26,162 9,862 27,909

64,137
64,165
64, 544
64, 853
64,628
64,290

25,851
25,787
25,727
25,623
25,297
25,102

9,960
9,919
10,011
10,178
10,165
10,116

28, 324
28,460
28,805

109, 827
112,019
112, 586
114,091
114,342
117,938

57,463
58,649
59, 285
60, 316
60,228
62,130

,297 113,160
52, 364 177,
53,370 178,082 113,917
53, 301 179,011 114,467
53,775 179, 301 114,448
•,212
54,114 179,840 115i
55,808 179,714 115,424

38, 540
38,901
39,072
39,011
38, 793
38,719

45, 452
45,911
46, 227
45,996
46, 515
46,864

27, 847
28, 043
28.178
28,160
28, 643
28,980
29,166
29,107
29,169
29, 441
29, 906
29, 843

1978: Jan....
Feb...
Mar...
Apr..,
May...
June...

114, 32L
118,982
121,101
124, 537
123, 566
124, 839

59,973
63,077
64,457
66,493
65, 417
66,293

54, 349 180,977 116,278
55,905 182, 393 117,511
118;
56,644 183,860 118,725
58,044 185, 715 119,848
121
58,149 187, 689 121,471
"1,557 122,688
58, 546 189;

38,177
38, 535
38, 547
38, 794
39, 484
39,667

47, 785
48,696
49, 491
50, 330
50, 966
51, 684

30, 316
30, 280
30, 687
30, 724
31,021
31, 337

64,699
64.882
65,135
65, 867
66,218
66, 869

25,190
25, 332
25, 730
25, 742
25, 825
26, 314

10,145
10, 258
10, 208
10,352
10, 354
10, 277

29, 364
29, 292
29,197
29, 773
30, 039
30, 278

July...
Aug...
Sept—
Oct....
Nov p..

123,106
127,871
127,919
130, 614
132, 459

65.222 57, 884 191,167 123, 830
68,684 59,187 192, 882 125,206
68,916 59,003 194,' 063126,176
735
70, 292 60,3221194,735 126, 784
71, 567 60, 892 196, 525 128, 293

39, 727
40, 343
41,133
40, 916
41,125

52,763
53, 296
53, 375
54, 210
54, 849

31, 340
31, 567
31,668
31,658
32, 319

67, 337
67,676
67, £87
67,951
68, 232

26,145
26,024
26,108
26,171
26, 393

10, 348
10, 352
10,484
10, 754
10, 644

30, 844
31, 300
31, 295
31,026
31,195

July..
Aug..
Sept..
Oct...
Nov..
Dec.

50,771 170, 554 109,
1,609
1171,575 110,242
51, 564
52, 662 172, 536 110, 579
52, 522 174,015 111,133
"",522
5 2,"368 175, 716
, "
112,071
52, 954 176,468 112,536

36,624
36,710
37, 104
37, 304
38,214
38,675

45,138
45, 489
45, 296
45,670
45, 216
44, 884

1

Monthly average for year and total for month.
Book value, seasonally adjusted, end of period, except as noted.
Note.—Data beginning 1958 are not strictly comparable with earlier data.
Source: Department of Commerce, Bureau of the Census.

2

278-216
 O - 79 - 16


237

29, 054
29,166
29, 071

TABLE B-48.—Manufacturers*

new and unfilled orders, 1947-78

(Amounts in millions of dollars; monthly data seasonally adjusted]
New orders >

Unfilled orders 2

Unfilled ordersshipments ratio 3

Durable goods
industries
Year or month
Total
Total

Capital
goods
industries,
nondtfense

Nondurable
goods
industries

Total

Durable
goods
industries

Nondurable
goods
industries

28,579
26,619
19,622
35,435
63,394
72,680
58,637
45,250
56,241
63,880
50,352
44, 559
49, 373

5,894
4,117
4,423
6,021
3,872
3,177
2,541
3,016
3,763
3,495
2,831
2,811
3,359

4.12
4.27
4.55
4.00
3.69
3.54

0.96

3.63
3.87
3.35
3.09
3.01

Total

Durable
goods
industries

Nondurable
goods
industries

1947
1948
1949

15,256
17,693
15,614

1950
1951
1952
1953
1954

20,110
23,907
23,204
23,586
22,335

1955
1956
1957
1953
1959

27,465
28,368
27,559
27,002
30, 724

6,388
8,126
6,633
10,165
12,841
12,061
12,147
10, 768
14,996
15,365
14,111
13, 290
16, 003

1960
1961
1962
1963
1964

30,235
31,104
33, 436
35, 524
38, 357

15, 303
15,759
17,374
18,709
20, 652

8,868 34,473
9,566 30,736
8,981 24,045
9,945 41,456
11,066 67,266
11,143 75,857
11,439 61,178
11,566 48,266
12,469 60,004
13, 003 67,375
13,448 53,183
13, 712 47, 370
14, 720 52,732
14,932 45,080
15, 345 47,407
16,061 48, 577
16,815 54,327
17, 705 66, 882

42,514
44, 375
45,965
51,270
63,691

2,566
3,032
2,612
3,057
3,191

2.78
2.63
2.69
2.80
3.10

3.37
3.13
3.24
3.37
3.72

.72
.79
.68
.73
.72

1965
1966
1967
1968
1969

42,100
46, 402
47,062
50,684
54, 004

23,278
26,177
25,831
28,113
29,925

7,070
7,779

18,823 80,071 76,298
20, 225 98, 401 94, 575
21, 232 104,989 101,024
22, 571 109, 330 105, 359
24,079 115, 654 111,487

3,773
3,826
3,965
3,971
4,167

3.33
3.81
3.71
3.82
3.76

3.95
4.55
4.42
4.61
4.50

.76
.73
.69
.69

1970
1971
1972
1973
1974

52,078
56,016
64,201
76,224
87, 200

27, 429
30,030
35,098
42, 894
46, 783

6,807
7,535
8,832
11,114
12,691

24,649
25,986
29,104
33,329
40, 417

106, 519
107,657
121, 709
161,194
189, 678

101,931
102, 633
115,377
Ib3, 824
184,155

4,588
5,024
6,332
7,370
5,523

3.66
3.40
3.33
3.92
4.16

4.41
4.08
3.93
4.64
5.00

.77
.77
.88
.92
.63

1975
1976
1977

85,058
99,134
112,842

41,933
50,997
59,795

10, 781
12,501
15, 201

43,125 170,686 162,872
48,137 174, 553 166, 440
53,047 193, 659 184, 834

7,814
8,113
8,825

3.72
3.22
3.15

4.47
3.85
3.75

.83
.74
.73

1977: Jan..
Feb..
MarApr..
May.
June.

107,256
108,047
112,190
111,269
111, 102
112,141

56, 358
56,426
59, 294
58, 800
58,835
59, 111

14, 674
14, 315
14,611
14, 687
14,893
15, 490

50,898
51, 621
52, 896
52, 469
52, 267
53,030

176, 506
177, 369
178, 469
180,217
181, 678
182, 816

168,266
169,072
169,938
171, 739
173,301
174, 363

8,240
8,297
8,531
8,478
8,377
8,453

3.26
3.23
3.11
3.17
3.19
3.17

3.90
3.85
3.69
3.79
3.80
3.78

.75
.75
.75
.73
.73
,73

July.
Aug.
Sept.
Oct..
Nov.
Dec.

108,868
112,615
113,680
117, 331
117, 024
122,128

13,936
14, 527
16,124
16,097
16,090
16,988

52,501
53, 346
53, 316
53, 775
54, 203
55, 963

8,590
8,566
8,581
8,581
8,670
8,825

3.17
3.12
3.11
3.14
3.17
3.15

3.78
3.73
3.70
3.73
3.77
3.75

.75
.73
.73
.73
.73
.73

117,899
122,544
125,801
128,175
128, 450
127, 580

16,511
17, 882
17, 507
17, 409
18,124
18,155

54, 564
55, 863
56,785
58,142
58, 405
58,740

181,857
182, 453
183, 547
186,787
189, 469
193,659
197, 235
200, 798
205, 500
209,133
214,010
216, 754

173,267
173, 887
174,966
178,206
180, 799
184, 834

1978: Jan..
Feb..
Mar.
Apr..
May.
June.

56, 367
59, 269
60, 364
63, 556
62,821
66,165
63, 335
66,681
69,016
70,033
70,045
68, 840

188,194
191, 798
196, 359
199, 895
204, 516
207, 067

9,041
9,000
9,141
9,238
9,494
9,687

3.33
3.22
3.23
3.18
3.28
3.29

3.96
3.82
3.83
3.77
3.94
3.90

.77
.74
.74
.72
.72
.76

July.
Aug.
Sept.
Oct-.

123, 279
130,952
131,840
137,162
137, 520

65,187
71, 582
72, 645
76,984
76, 437

17,074
19, 344
20,149
22, 219
20, 256

58, 092
59, 370
5C, 195
60,178
61, 083

216,922
219,999
?23,921
230,464
235, 528

207,026
209, 922
213, 650
220, 341
225, 213

9,896
10, 077
10, 271
10,123
10, 315

3.33
3.22
3.28
3.33
3.35

3.96
3.79
3.84
3.92
3.94

.77
.77
.81
.77
.78

NOVP

\-

3.42

1.12
1.04
.85
.86
.94

1 Monthly average for year and total for month.
2 Seasonally adjusted, end of period.
* Ratio of unfilled orders at end of period to shipments for period; excludes industries with no unfitlsd orders. Annual
figures relate to seasonally adjusted data for December.
Note.—Data beginning 1958 are not strictly comparable with earlier data.
Source: Department of Commerce, Bureau of the Census.




238

PRICES
TABLE B-49.—Consumer price indexes by expenditure classes, 1929—78
11967 = 1001

Year or month

All
items

Total i
1929 . .
1933
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
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1977:Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1978:Jan.
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov

51.3
38 8
41 6
42 0
44.1
48.8
51 8
52.7
53.9
58.5
66.9
72.1
71.4
72.1
77.8
79 5
80 1
80 5
80 2
81 4
84 3
86 6
87 3
88.7
89.6
90 6
91.7
92.9
94 5
97.2
100.0
104.2
109.8
116.3
121.3
125.3
133.1
147.7
161.2
170.5
181.5
175.3
177.1
178.2
179.6
180.6
181.8
182.6
183.3
184.0
184.5
185.4
186.1
187.2
188.4
189.8
191.5
193.3
195.3
196.7
197.8
199.3
200.9
202.0

Housing

Food and
beverages
Food

100.0
103.6
108.8
114.8
118.3
123.2
139.5
158.8
172.1
177.4
188.0
179.9
183.8
184.6
186.8
187.5
189.3
190.2
190.8
190.2
190.1
191.2
191.9
194.6
197.3
199.5
202.6
205.2
208.5
209.7
210.1
210.3
211.6
212.5

48.3
30 6
34 6
35.2
38.4
45.1
50.3
49.6
50.7
58.1
70.6
76.6
73.5
74.5
82.8
84.3
83 0
82.8
81 6
82.2
84 9
88.5
87 1
88.0
89.1
89 9
91.2
92 4
94.4
99.1
100.0
103.6
108.9
114.9
118.4
123.5
141.4
161.7
175.4
180.8
192.2
183.4
187.7
188.6
190.9
191.7
193.6
194.6
195.2
194.5
194.4
195.6
196.3
199.2
202.0
204.2
207.5
210.3
213.8
215.0
215.4
215.6
216.8
217.8

Total 2

52 2
52.4
53.7
56.2
56.8
58.1
59.1
60.6
65.2
69.8
70.9
72.8
77.2
78.7
80 8
81.7
82 3
83.6
86 2
87.7
88 6
90.2
90.9
91 7
92.7
93 8
94.9
97.2
100.0
104.0
110.4
118.2
123.4
128.1
133.7
148.8
164.5
174.6
186.5
180.3
181.4
182.6
183.7
184.6
186.0
187.4
188.3
189.5
190.4
191.4
192.4
193.8
195.0
196.7
198.3
199.9
202.0
203.8
205.2
207.5
209.5
210.6

Rent,
residential
76.0
54 1
56 0
56.2
57.2
58.5
58.5
58.6
58.8
59.2
61.1
65.1
68.0
70.4
73.2
76.2
80 3
83.2
84 3
85.9
87 5
89.1
90 4
91.7
92.9
94 0
95.0
95 9
96.9
98.2
100.0
102.4
105.7
110.1
115.2
119.2
124.3
130.6
137.3
144.7
153.5
149.5
150.2
150.8
151.6
152.2
152.9
153.6
154.4
155.3
156.1
157.0
157.9
158.8
159.7
160.5
161.5
162.7
163.6
164.2
165.1
166.4
167.4
168.5

Home
ownership

75 0
76.3
V 0
78.3
81 7
83.5
84 4
86.3
86.9
87 9
89.0
90 8
92.7
96.3
100.0
105.7
116.0
128.5
133.7
140.1
146.7
163.2
181.7
191.7
204.9
196.7
198.1
199.3
201.0
202.3
203.9
206.2
207.4
209.1
210.0
211.5
213.0
215.0
216.4
218.3
220.4
222.5
225.3
228.3
230.6
234.2
237.0
238.8

1
2
3

Fuel
and
other
utilities a

83.0
83.5
85.1
87.3
89.9
91.7
93.8
95.9
97.1
97.3
98.2
98.4
98.3
98.8
100.0
101.3
103.6
107.6
115.0
120.1
126.9
150.2
167.8
182.7
202.2
194.8
196.4
198.5
199.4
200.2
201.8
203.5
204.5
205.5
206.8
207.4
207.6
208.5
210.6
212.6
213.9
215.5
217.5
218.0
218.1
218.8
220.1
218.5

Apparel
and
upkeep

TransEnter- Other
porta- Medical tain- goods
and
care
tion
ment services

48.5
36 9
42 4
42.8
44.8
52.3
54.6
58.5
61.5
67.5
78.2
83.3
80.1
79.0
86.1
85.3
84 6
84.5
84 1
85.8
87 3
87.5
88 2
89.6
90.4
90 9
91.9
92.7
93.7
96.1
100.0
105.4
111.5
116.1
119.8
122.3
126.8
136.2
142.3
147.6
154.2
150.0
150.8
151.7
152.3
153.4
153.9
153.4
154.8
156.2
157.2
158.5
158.2
155.7
154.5
156.5
158.4
159.8
159.9
158.0
159.6
161.9
163.3
164.1

43 0
42.7
44.2
48.1
47.9
47.9
47.8
50.3
55.5
61.8
66.4
68.2
72.5
77.3
79.5
78.3
11A
78.8
83 3
86.0
89 6
89.6
90.6
92 5
93.0
94.3
95.9
97.2
100.0
103.2
107.2
112.7
118.6
119.9
123.8
137.7
150.6
165.5
177.2
172.2
173.2
174.7
176.7
178.1
179.1
179.2
178.8
178.4
178.6
178.7
178.8
179.0
179.4
179.9
181.1
183.2
185.5
187.2
188.1
188.7
189.7
191.4

36 7
36.8
37.0
38.0
39.9
41.1
42.1
44.4
48.1
51.1
52.7
53.7
56.3
59.3
61 4
63.4
64 8
67.2
69 9
73.2
76 4
79.1
81.4
83 5
85.6
87.3
89.5
93.4
100.0
106.1
113.4
120.6
128.4
132.5
137.7
150.5
168.6
184.7
202.4
194.1
195.8
197.6
199.1
200.5
201.8
203.5
204.9
206.3
207.2
208.1
209.3
211.2
213.3
214.5
215.7
216.9
217.9
219.4
221.4
222.6
224.7
227.0

100.0
105.7
111.0
116.7
122.9
126.5
130.0
139.8
152.2
159.8
167.7
164.0
164.8
165.3
165.5
166.6
167.7
168.0
168.6
169.7
170.3
170.4
171.0
171.9
172.9
174.1
175.6
176.2
176.2
177.0
177.4
178.3
179.3
179.5

100.0
105.2
110.4
116.8
122.4
127.5
132.5
142.0
153.9
162.7
172.2
168.3
168.8
169.2
169.8
170.4
171.1
171.7
172.2
174.4
176.0
177.2
177.8
178.5
179.0
179.3
179.8
180.4
181.0
183.1
184.0
187.8
188.3
188.8

Includes alcoholic beverages, not shown separately.
Includes other items, not shown separately. Series beginning 1967 not comparable with series for earlier years.
Gas (piped) and electricity; fuel oil, coal, and bottled gas; and other utilities and public services.
Note.—Beginning January 1978 data are for all urban consumers; earlier data are for urban wage earners and clerical
workers.
Source: Department of Labor, Bureau of Labor Statistics.




239

TABLE B-50.—Consumer price indexes by commodity and service groups, 1939-78
[1967 = 1001
Services

Commodities

Year or
month

All
items

Special indexes

Commodities less food
All
commodities

Food
All

Durable

Nondurable

All
services

Rent

Services
less
rent

All
items
less
food

All
items
less
shelter

Nondurable
commodities

1939

41.6

40.2

34.6

47.7

48.5

44.3

43.5

56.0

38.1

47.2

39.7

38.4

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

42.0
44 1
48.8
51.8
52.7
53.9
58 5
66.9
72.1
71.4

40.6
43 3
49.6
54.0
54.7
56.3
62 4
75.0
80.4
78.3

35.2
38 4
45.1
50.3
49.6
50.7
58 1
70.6
76.6
73.5

48.0
50.4
56.0
58.4
61.6
64.1
68 1
76.8
82.7
81.5

48.1
51.4
58.4
60.3
65.9
70.9
74 1
80.3
86.2
87.4

44.7
46.7
51.6
53.8
56.6
58.6
62 9
72.2
77.8
76.3

43.6
44 2
45.6
46.4
47.5
48.2
49 1
51.1
54.3
56.9

56.2
57.2
58.5
58.5
58.6
58.8
59 2
61.1
65.1
68.0

38.1
38.6
40.3
42.1
44.2
45.1
46.7
49.0
51.9
54.5

47.3
48 7
52.1
53.6
55.7
56.9
59 4
64.9
69.6
70.3

39.9
42 4
M.I
51.3
52.2
53.6
59 0
68.5
73.9
72.6

38.9
41.6
47.6
51.8
52.2
53.7
59.6
71.9
77.2
74.9

1950
1951
1952
1953
1954
1955
1956
1957...
1958
1959..

72.1
77 8
79.5
80 1
80.5
80.2
81.4
84.3
86 6
87.3

78.8
85 9
87.0
86 7
85.9
85.1
85.9
88.6
90 6
90.7

74.5
82.8
84.3
83 0
82.8
81.6
82.2
84.9
88.5
87.1

81.4
87.5
88.3
88.5
87.5
86.9
87.8
90.5
91 5
92.7

88.4
95.1
96.4
95.7
93.3
91.5
91.5
94.4
95 9
97.3

76.2
82.0
82.4
83.1
83.5
83.5
85.3
87.6
88.2
89.3

58.7
61.8
64.5
67.3
69.5
70.9
72.7
75.6
78.5
80.8

70.4
73.2
76.2
80.3
83.2
84.3
85.9
87.5
89.1
90.4

56.0
59.3
62.2
64.8
66.7
68.2
70.1
73.3
76.4
79.0

71.1
75.7
77.5
79.0
79.5
79.7
81.1
83.8
85 7
87.3

73.1
79 2
80.8
81.0
81.0
80.6
81.7
84.4
86 9
87.6

75.4
82.5
83.4
83.2
83.2
82.5
83.7
86.3
88.6
88.2

1960
1961
1962 .
1963
1964
1965....
1966
1967..
1968...
1969

88.7
89.6
90.6
91.7
92.9
94.5
97.2
100.0
104.2
109.8

91.5
92.0
92.8
93.6
94 6
95.7
98.2
100.0
103.7
108.4

88.0
89.1
89.9
91.2
92.4
94.4
99.1
100.0
103.6
108.9

93.1
93.4
94.1
94.8
95 6
96.2
97.5
100.0
103.7
108.1

96.7
96.6
97.6
97.9
98 8
98.4
98.5
100.0
103.1
107.0

90.7
91.2
91.8
92.7
93.5
94.8
97.0
100.0
104.1
108.8

83.5
85.2
86.8
88.5
90.2
92.2
95.8
100.0
105.2
112.5

91.7
92.9
94.0
95.0
95.9
96.9
98.2
100.0
102.4
105.7

81.9
83.9
85.5
87.3
89.2
91.5
95.3
100.0
105.7
113.8

88.8
89.7
90.8
92.0
93.2
94.5
96.7
100.0
104.4
110.1

88.9
89.9
90.9
92.1
93.2
94.6
97.4
100.0
104.1
109.0

89.4
90.2
90.9
92.0
93.0
94.6
98.1
100.0
103.9
108.9

1970
1971
1972..
1973
1974
1975
1976___
1977

116.3
121.3
125.3
133.1
147.7
161.2
170.5
181.5

113.5
117.4
120.9
129.9
145.5
158.4
165.2
174.7

114.9
118.4
123.5
141.4
161.7
175.4
180.8
192.2

112.5
116.8
119.4
123.5
136.6
149.1
156.6
165.1

111.8
116.5
118.9
121.9
130.6
145.5
154.3
163.2

113.1
117.0
119.8
124.8
140.9
151.7
158.3
166.5

121.6
128.4
133.3
139.1
152.1
166.6
180.4
194.3

110.1
115.2
119.2
124.3
130.6
137.3
144.7
153.5

123.7
130.8
135.9
141.8
156.0
171.9
186.8
201.6

116.7
122.1
125.8
130.7
143.7
157.1
167.5
178.4

114.4
119.3
122.9
131.1
146.1
159.1
168.3
179.1

114.0
117.7
121.7
132.8
151.0
163.2
169.2
178.9

1977: Jan
Feb
Mar
Apr
May
June

175.3
177.1
178.2
179.6
180.6
181.8

168.7
170.9
171.8
173.3
174.3
175.4

183.4
187.7
188.6
190.9
191.7
193.6

160.6
161.6
162.6
163.6
164.7
165.4

158.9
159.7
160.8
162.2
163.4
163.9

161.9
163.1
163.9
164.7
165.7
166.6

187.4
188.7
190.0
191.2
192.2
193.7

149.5
150.2
150.8
151.6
152.2
152.9

194.3
195.6
197.0
198.4
199.4
201.1

172.9
174.0
175.1
176.2
177.3
178.4

173.0
175.0
176.1
177.5
178.4
179.6

172.4
175.0
175.9
177.4
178.3
179.7

182.6
183.3
184.0
184.5
185.4
186.1

175.8
176.3
176.6
177.0
177.9
178.3

194.6
195.2
194.5
194.4
195.6
1S6.3

165.6
166.0
166.7
167.4
168.1
168.4

164.3
164.3
164.5
165.0
165.5
165.9

166.6
167.3
168.4
169.2
170.1
170.3

195.3
196.3
197.7
198.5
199.5
200.5

153.6
154.4
155.3
156.1
157.0
157.9

202.8
203.8
205.3
206.2
207.2
208.2

179.1
179.8
180.9
181.6
182.5
183.1

180.2
180.8
181.2
181.7
182.5
183.0

180.1
180.8
181.0
181.4
182.4
182.9

1978: Jan
Feb
Mar
Apr
May
June

187.2
188.4
189.8
191.5
193.3
195.3

179.2
180.2
181.6
183.5
185.5
187.5

199.2
202.0
204.2
207.5
210.3
213.8

168.6
168.8
170.0
171.3
173.0
174.4

166.6
167.2
168.3
169.9
172.0
173.9

169.7
lby.6
170.7
171.8
172.8
173.7

202.0
203.5
204.9
206.5
208.0
209.9

158.8
159.7
160.5
161.5
162.7
163.6

209.8
211.4
213.0
214.6
216.2
218.3

183.8
184.7
185.9
187.4
189.0
190.6

183.8
185.0
186.3
188.1
189.9
191.8

183.9
185.1
186.8
188.8
190.7
192.7

July
Aug
Sept
Oct
Nov

196.7
197.8
199.3
200.9
202.0

188.6
189.3
190.5
191.8
192.9

215.0
215.4
215.6
216.8
217.8

175.4
176.3
177.8
179.1
180.3

175.3
175.9
177.2
178.8
180.0

174.1
175.4
177.1
178.1
179.1

211.7.
213.4
215.6
217.6
218.6

164.2
165.1
166.4
167.4
16 \ 5

220.4
222.2
224.6
226.7
227.8

192.0
193.3
195.1
196.7
197.8

192.7
193.5
194.5
195.8
196.7

193.6
194.4
195.4
196.6
197.5

...

July....
Aug
Sept
Oct
Nov
Dec

Note.—Beginning January 1978 data are for all urban consumers; earlier data are for urban wage- earners and
clerical workers.
Source: Department of Labor, Bureau of Labor Statistics.




240

TABLE B-51.—Consumer price indexes, selected commodities and services, 1939-78
[1967=100]
Durable commodities

Nondurable commodities less food

Services less rent

Other
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...
1967...
1968...
1969...
1970...
1971...
1972
1973
1974
1975....
1976....
1977...

1977:
Jan..
Feb..
Mar.
Apr.
Apr....
Vlay.
May....
June..
July...
Aug...
Sept..
Oct...
Nov...
Dec...
1978:
Jan...
Feb...
Mar...
Apr...
May...
June..
July...
Aug...
Sept..
Oct...
Nov...

Total i

New
cars

Used
cars

Total

Apparel
commodities

coolant,
etc.

Total i

Fuel
oil
coal,
and
bottled
gas

Gas
(piped) Transand portaTotal i election
servtricices
ity

Wed
icalcare
services

38.1
38.1
38.6
40.3
42.1
44.2
45.1
46.7
49.0
51.9
54.5
56.0
59.3
62.2
64.8
66.7
68.2
70.1
73.3
76.4
79.0
81.9
83.9
85.5
87.3
89.2
91.5
95.3
100.0
105.7
113.8
123.7
130.8
135.9
141.8
156.0
171.9
186.8
201.6

82.9
82.1
81.4
81.0
80.6
80.3
79.6
77.4
77.1
79.1
81.0
81.2
81.5
82.6
84.2
85.3
87.5
88.4
89.3
92.4
94.7
98.6
99.4
99.4
99.4
99.4
99.4
99.6
100.0
100.9
102.8
107.3
114.7
120.5
126.4
145.8
169.6
189.0
213.4

36.1
36.1
36.3
38.2
38.2
38.2
38.2
39.0
40.3
44.9
50.0
53.3
58.3
62.4
66.4
69.2
69.4
70.5
73.8
78.5
81.2
83.3
85.3
86.6
87.5
89.6
92.9
96.8
100.0
104.0
111.3
123.1
133.0
136.0
136.9
141.9
152.7
174.3
188.4

32.5
32.7
33.7
35.4
36.9
37.9
40.1
43.5
46.4
48.1
49.2
51.7
55.0
57.0
58.7
60.4
62.8
65.5
68.7
72.0
74.9
77.7
80.2
82.6
84.6
87.3
92.0
100.0
107.3
116.0
124.2
133.3
138.2
144.3
159.1
179.1
197.1
216.7

90.1
90.3
91.8
94.2
94.4
94.7
95.0
94.6
96.3
97.8
100.0
101.5
104.2
107.0
111.2
114.3
123.5
159.7
176.6
189.3
207.3

194.3
195.6
197.0
198.4
199.4
201.1

182.9
183.3
184.8
186.7
187.4
188.7
189.4
190.0
191.0
191.3
192.0
192.9

207.6
209.4
211.5
213.1
214.6
216.0
217.9
219.6
221.1
222.0
223.0
224.2

199.1
201.3
203.5
205.1
206.6
208.1
209.6
210.1
210.3
210.9
211.2
211.3

193.7
194.7
194.9
195.3
195.5
196.2
196.9
197.3
198.7
200.4
202.2

226.5
228.7
229.9
231.3
232.5
233.5
235.4
237.7
239.1
241.5
244.1

211.8
213.0
214.3
215.7
217.7
220.7
222.4
223.7
225.1
226.5
225.9

Gasoline,
motor

43.2

44.3

43.0

43.3
46.6

43.5
45.8
53.5
55.9
59.8
63.0
3.5
80.4
85.4
82.0

53.2
54.7
55.
58.2
66.2
72.3
72.4

104.3
110.2
110.5
117.6
122.6
146.4
167.9
182.8

44.7
46.7
51.6
53.
56.6
58.6
62.9
72.2
77.8
76.3
76.2
82.0
82.4
83.1
83.5
83.5
85.3
87.6
88.2
89.3
90.7
91.2
91.8
92.7
93.5
94.8
97.0
100.0
104.1
108.8
113.1
117.0
119.8
124.8
140.9
151.7
158.3
166.5

81.1
88.7
87.7
5.7
86.3
85.8
87.3
88.2
88.2
89.0
90.3
90.8
91.2
92.0
92.8
93.6
96.0
100.0
105.6
111.9
116.5
120.1
122.7
127.1
136.1
141.2
145.8
151.6

72.9
77.5
79.0
81.0
81.8
82.1
84.1
87.4
88.3
89.6
90.9
91.3
92.1
93.1
93.9
95.5
97.5
100.0
103.3
107.0
111.2
115.2
118.2
123.4
143.8
157.9
165.7
175.3

90.6
89.4
90.5
93.0
92.0
92.6
92.4
91.3
94.4
96.8
100.0
101.7
105.1
106.2
107.3
108.8
118.8
158.9
169.7
176.6
186.7

37.1
38.2
40.5
43.1
45.2
47.1
48.0
51.3
58.4
68.6
70.3
72.7
76.5
78.0
81.5
81.2
82.3
85.9
90.3
88.7
89.8
89.2
91.0
91.5
93.2
92.7
94.6
97.0
100.0
103.1
105.6
110.1
117.5
118.5
136.0
214.6
235.3
250.8
283.4

141.1
140.7
140.9
140.6
141.4
141.7
141.6
141.6
141.1
145.7
148.2
150.5

177.7
179.1
182.7
187.8
191.4
192.2
190.6
186.4
182.5
178.0
175.0
170.7

161.9
163.1
163.9
164.7
165.7
166.6
166.6
167.3
168.4
169.2
170.1
170.3

147.6
148.5
149.3
149.8
150.9
151.3
150.6
152.1
153.5
154.6
155.9
155.3

170.5
171.8
172.6
173.5
174.5
175.6
176.1
176.3
177.2
177.9
178.6
179.3

180.0
182.0
183.4
185.4
187.5
188.8
189.2
189.1
188.9
188.5
188.4
188.7

271.7
278.3
281.4
282.0
282.6
283.1
283.7
284.1
285.1
287.2
289.9
291.9

202.8
203.8
205.3
206.2
207.2
208.2

204.2
205.4
208.5
209.8
210.9
213.0
216.0
217.4
218.0
219.3
219.5
218.9

150.9
151.2
151.1
151.2
152.5
153.5
153.9
153.8
153.5
155.5
158.5

169.8
170.0
172.3
177.3
184.6
191.5
195.9
196.7
195.9
195.4
194.7

169.7
169.6
170.7
171.8
172.8
173.7
174.1
175.4
177.1
178.1
179.1

152.3
150.7
152.8
154.8
156.1
156.1
153.9
155.5
157.9
159.3
160.0

179.7
180.3
181.0
181.7
182.6
183.8
185.5
186.6
188.0
188.8
190.0

188.6
188.2
188.1
188.9
190.5
193.0
195.7
198.3
200.0
200.4
201.9

295.2
296.9
297.2
296.6
295.6
295.1
294.5
294.2
295.7
300.1
306.1

209.8
211.4
213.0
214.6
216.2
218.3
220.4
222.2
224.6
226.7
227.8

219.7
223.3
226.6
229.2
232.5
236.5
237.2
236.9
237.9
240.0
234.9

48.5
48.1
51.4
58.4
60.3
65.9
70.9
74.1
80.3
86.2
87.4
88.4
95.1
96.4
95.7
93.3
91.5
91.5
94.4
95.9
97.3
96.7
96.6
97.6
97.9
98.8
98.4
98.5
100.0
103.1
107.0
111.8
116.5
118.9
121.9
130.6
145.5
154.3
163.2

69.2
75.6
82.8
83.4
87.4
94.9
95.8
94.3
90.9
93.5
98.4
101.5
105.9
104.5
104.5
104.1
103.5
103.2
100.9
99.1
100.0
102.8
104.4
107.6
112.0
111.0
111.1
117.5
127.6
135.7
142.9

158.9
159.7
160.8
162.2
163.4
163.9
164.3
164.3
164.5
165.0
165.5
165.9
166.6
167.2
168.3
169.9
172.0
173.9
175.3
175.9
177.2
178.8
180.0

89.2
75.9
71.8
69.1
77.4
80.2
89.5
83.6
86.9
94.8
96.0
100.1
99.4
97.0
100.0

46.3
46.8
48.4
51.1

1
2
3

Energy 2

32.5

Includes other items not shown separately.
Gas (piped) and electricity; fuel oil, coal, and bottled gas; and gasoline, motor oil, coolant, etc.
Not available.
Note.—Beginning January 1978 data are for all urban consumers; earlier data are for urban wage earners and clerical
workers.
Source: Department of Labor, Bureau of Labor Statistics.




241

TABLE B—52.—Consumer price indexes for commodity groups, seasonally adjusted, 1975-78
[1967=100, seasonally adjusted]
Commodities less food
All
commodities

Year and
month

Durable commodities
Food

Total
Total i

New
cars

Used
cars

Nondurables less food

Total i

Apparel Gasoline, Fuel oil,
commotor coal, and
mod- oil, cool- bottled
ities
ant, etc.
gas

153.8
154.5
155.1
155.8
156.6
157.8

170.9
171.2
170.9
171.3
172.6
174.8

144.5
145.6
146.6
147.4
147.9
148.6

140.0
141.4
143.0
144.0
144.7
145.3

122.0
123.6
126.8
127.3
l?7.0
127.4

140.7
142.3
142.6
142.1
141.8
143.9

147.9
148 6
149.1
149.9
150 4
151.0

140.1
140 4
140.5
140.6
140.6
140.6

161.0
161 3
161.9
163.2
164 8
167.8

225.0
224 5
225.0
227.5
230 2
232.2

July
Aug__
Sept
Oct
Nov
Dec

159.5
159.9
160.3
161.4
161.9
162.6

177.6
177.3
177.7
179.4
180.2
181.1

149.8
150.4
151.0
151.6
152.0
152.6

146.2
146.8
147.7
148.3
148.7
149.3

127.6
128.3
129.2
129.3
130.1
132.5

147.2
149.7
150.5
151.5
151.6
151.5

152 5
153.0
153.3
154 1
154.4
155.0

141 2
141.9
141.5
141 8
142.2
142.5

173 5
174.7
175.8
177 1
177.2
177.1

236 6
239 6
243.1
246 1
246.4
246.6

1976:Jan
Feb
Mar
Apr.__
May
June __ .

162.9
162.7
162.7
163.4
164.4
165.0

180.8
179.6
178.6
179.7
181.0
181.2

153.2
153.6
154.1
154.6
155.4
156.2

149.9
150 6
151.4
152.3
153.4
154.1

132.8
133.5
134.0
134.3
134.8
135.0

151.4
154.8
159.1
164.0
167.1
169.0

155.5
155 7
156.0
156.3
157 0
157.7

143.1
143.5
143.9
144.4
144.9
145.4

176.7
174 8
172.9
171.9
172.9
175.3

245.0
244 4
244.5
245.6
246.7
249.3

July
Aug
Sept
Oct
Nov
Dec

165.4
166.0
166.5
167.1
167.3
168.0

181.1
181.6
181.7
182.1
181.5
182.0

156.9
157.6
158.3
159.0
159.7
160.5

155.0
155.7
156.3
157.2
157.6
158.4

135.6
136.1
137.0
138.4
138.4
138.5

170.2
171.9
173.0
174.4
177.0
180.8

158.4
159 0
159.8
160.4
161.1
161.8

145.9
146.8
147.6
147.5
147.8
148.4

176.1
177.1
178.2
180.1
181.3
181.8

250.7
253.0
254.9
255.4
257.6
262.2

169.3
171.3
172.3
173.7
174.4
175.1

183.5
187.4
188.6
191.5
192.6
193.8

161.7
162.7
163.4
164.1
164.6
165.1

159.9
161.1
161.9
162.6
163.3
163.3

139.6
139.9
140.4
140.5
141.7
142.3

186.3
191.3
192.5
193.1
190.3
187.2

162 8
163.7
164 5
165.0
165.8
166.4

149.3
149.9
150.2
150.4
150.8
151.8

182.1
184.0
185.8
187.3
188.0
186.8

267.7
272.9
278.2
281.1
283.4
285.7

July ._
Aug
Sept
Oct
Nov
Dec

175.2
175.7
176.2
176.7
177.5
178.3

193.5
194.3
194.7
195.0
196.0
196.7

165.4
165.7
166.2
166.8
167.6
168.4

163.4
163.6
163.9
164.4
165.1
166.0

142.9
143.5
144.1
145.0
146.9
148.4

182.7
178.3
175.3
172.8
173.3
173.7

166.9
167.2
167.8
168.6
169.4
169.9

152.2
152.7
152.6
152.9
153.5
153.8

186.0
185.5
186.3
187.9
189.4
190.7

286.6
288.1
289.5
289.5
289.5
289.6

1978-Jan
Feb.
Mar
Apr...
May
June

179.9
180.8
182.3
184.0
185.6
187.2

199.2
201.6
204.3
208.1
211.2
214.0

169.5
169.9
170.9
171.8
172.8
173.9

167.6
168.7
169.5
170.4
171.8
173.2

149.3
150.3
150.5
151.0
152.8
154.1

178.0
181.6
181.6
182.2
183.5
186.5

170.6
170.1
171.2
172.1
172.8
173.5

154.0
152.1
153.6
155.3
156.0
156.5

190.9
190.3
190.6
190.8
191.1
190.9

290.8
291.1
294.0
295.7
296.5
297.8

187.9
188.7
190.1
191.5
192.7

213.9
214.5
215.6
217.3
218.0

174.9
175.7
177.2
178.5
179.9

174.4
175.2
176.7
178.1
179.6

155.3
155.8
156.8
154.7
157.1

187.8
188.2
188.2
189.7
192.8

174.4
175.2
176.6
177.4
178.4

155.4
156.1
157.0
157.6
157.6

192.4
194.6
197.2
199.8
202.9

297.5
298.4
300.2
302.5
305.8

1975: Jan
Feb
Mar
Apr
May
June

1977-Jan
Feb. .
Mar
Apr
May
June

..

.

-.

.

__

Julv
Aug
Sept
Oct .
Nov

i Includes other items not shown separately.
Note.—Beginning January 1978, data are for all urban consumers; earlier data are for urban wage earners and clerical
workers.
Source: Department of Labor, Bureau of Labor Statistics.




242

TABLE B-53.—Consumer price indexes for service groups and selected expenditure classes,
seasonally adjusted, 1975-78
[1967=100, seasonally adjusted, except as notedj
Services

Selected expenditures classes

Services less rent
Year
and month

All
services

Rent,
residential

Total i

TransGas
(piped)
portaand
tion
electricity services

MoHiral
ivieuicai

care
services

Home
ownership

Fuel
and
other
utilities 2

Household
furnishings
and
operation

Energy3

1975: J a n . . .
Feb . .
Mar...
Apr...
May...
June..

161.0
162.3
163.1
164.2
165.0
166.2

134.3
134.8
135.3
135.8
136.4
136.9

165.8
167.2
168.1
169.3
170.2
171.4

159.4
161.6
162.8
165.3
166.8
169.4

146.1
146.8
147.7
148.9
149.6
150.6

170.7
172.6
174.3
175.8
177.1
178.5

174.8
176.8
178.2
179.9
180.8
182.0

159.5
160.9
161.9
163.8
165.3
167.2

146.9
147.9
148.6
149.5
150.1
150.7

167.2
168.5
169.0
170.9
172.7
175.9

July...
Aug...
Sept..
Oct...
Nov...
Dec—

167.0
167.8
169.1
170.1
171.8
172.8

137.5
138.1
138.5
139.3
140.0
140.5

172.3
173.1
174.7
175.6
177.5
178.7

170. 8
172.2
175.0
175.8
177.4
178.8

151.5
152.5
156.5
157.4
161.7
163.1

180.2
181.3
182.9
184.7
184.3
186.0

182.5
182.9
183.5
184.1
186.1
187.0

168.7
170.0
172.1
173.3
174.6
175.6

151.1
151.7
152.5
153.3
153.8
154.3

180.1
181.2
182.9
183.0
183.7
184.4

1976: J a n . . .
Feb...
Mar...
Apr...
May...
June..

174.6
175.8
177.2
177.9
179.0
180.0

141.1
141.9
142.6
143.1
143.8
144.5

180.7
182.0
183.4
184.2
185.4
186.4

178.8
180.8
182.4
183.4
185.8
187.9

166.5
168.4
170.6
171.1
172.3
173.5

188.1
190.1
192.1
193.4
194.8
196.0

188.2
188.3
188.9
189.3
190.4
191.2

175.5
176.7
177.8
178.6
180.2
181.8

156.4
157.3
158.3
158.9
159.3
159.8

184.5
184.6
184.0
183.9
185.7
188.7

July...
Aug.__
Sept..
Oct...
Nov...
Dec...

181.1
182.3
183.3
184.2
185.0
185.6

145.2
145.7
146.3
147.0
147.5
148.2

187.6
188.9
190.0
190.9
191.7
192.4

189.9
191.4
193.2
196.1
196.7
201.1

175.3
176.4
178.0
179.3
180.2
180.4

197.6
199.0
200.3
201.9
204.7
206.0

192.3
193.5
194.0
194.2
194.2
194.2

183.2
184.8
186.2
188.0
188.6
191.7

160.4
160.8
161.4
161.9
162.6
163.3

190.5
191.5
192.5
193.6
194.6
197.2

1977: J a n . . .
Feb...
Mar...
Apr...
May...
June..

187.3
188.4
190.0
191.4
192.9
194.3

149.4
149.9
150.7
151.5
152.2
153.0

194.1
195.4
197.0
198.6
200.2
201.7

203.4
204.2
207.1
208.8
210.7
213.0

181.3
182.7
184.2
185.9
187.4
189.1

207.7
209.1
211.1
213.0
214.8
216.3

196.2
197.8
199.5
201.5
203.1
204.5

193.9
195.0
197.4
198.7
200.4
202.3

164.0
164.7
165.2
165.7
166.4
167.3

199.1
201.3
203.5
205.1
206.6
208.1

July...
Aug...
Sept..
Oct...
Nov...
Dec...

195.7
196.8
197.9
198.7
199.5
200.3

153.8
154.6
155.5
156.2
157.1
157.9

203.3
204.4
205.6
206.3
207.1
208.0

216.4
218.7
219.1
221.2
220.2
218.6

190.2
191.0
191.9
191.8
192.0
192.5

217.5
219.1
220.8
222.2
223.2
224.7

206.4
207.4
208.7
209.4
210.9
212.3

204.4
205.8
206.7
208.1
207.6
207.1

167.9
168.6
169.1
169.5
170.0
171.0

209.6
210.1
210.3
210.9
211.2
211.3

1978: J a n . . .
Feb...
Mar...
Apr...
May...
June..

201.5
203.0
204.7
206.6
208.7
210.5

158.8
159.4
160.3
161.5
162.7
163.6

209.2
210.9
212.8
214.8
217.0
219.0

218.8
222.0
225.0
228.1
232.3
236.5

193.2
194.0
194.2
194.2
195.5
196.5

226.6
228.4
229.6
231.3
232.7
233.9

214.5
216.0
218.5
220.9
223.4
226.0

207.7
209.4
211.5
213.2
215.5
217.8

171.8
172.2
173.5
174.6
175.8
177.5

211.8
213.0
214.3
215.7
217'.7
220.7

July...
Aug...
Sept..
Oct...
Nov...

212.2
214.0
215.7
217.5
218.3

164.4
165.3
166.6
167.6
168.7

220.9
222.8
224.7
226.6
227.3

237.7
238.3
239.1
242.2
235.6

197.6
198.4
199.7
201.0
202.2

235.0
237.3
238.9
241.8
244.5

228.6
230.9
233.9
236.6
238.3

218.8
219.4
219.9
221.5
218.6

178.3
179.3
180.4
181.9
182.8

222.4
223.7
225.1
226.5
225.9

1

Includes other items not shown separately.
Gas (piped) and electricity; fuel oil, coal, and bottled gas; and other utilities and public services.
Gas (piped) and electricity; fuel oil, coal, and bottled gas; and gasoline, motor oil, coolant, etc. Index is not seasonally
adjusted.
Note.—Beginning January 1978 data are for all urban consumers; earlier data are for urban wage earners and clerical
workers.
2

3

Source: Department of Labor, Bureau of Labor Statistics.




243

TABLE B-54.—Changes in consumer price indexes, major groups, 1948-78
(Percent change]
Year or
month

Commodities less
food

Food

All items

Dec.
to
Dec.i

Year
to
year

Year
to
year

Dec.
to
Dec.'

2.7
-1.8

7.8
-1.0

-0.8
-3.7

8.5
-4.0

5.3
-4.8

7.7
-1.5

6.1
3.6

6.3
4.8

5.5
-.8

7.2
1.0

5.8
5.9
.9
.6
-.5

1.0
7.9
2.2
.8
.5

9.6
7.4
-1.1
-1.3
-1.6

1.4
11.1
1.8
-1.5
-.2

5.7
4.6
.2
-1.4

-.1
7.5
.9
.2
-1.1

3.6
5.2
4.6
4.2
1.9

3.2
5.3
4.4
4.3
3.3

4.1
5.0
1.7
1.7
0

1.1
65
2.4
1.9
.6

.4
2.9
3.0
1.8
1.5

-.4
1.5
3.6
2.7
.8

-.9
3.1
2.8
2.2
-.8

-1.4
3.3
4.2
-1.6

0
2.5
2.2
.8
1.5

-.7
1.0
3.1
1.1
1.3

2.3
3.1
4.5
2.7
3.7

2.0
2.5
4.0
3.8
2.9

.9
2.6
3.2
1.6
2.3

.3
18
3.3
2.3
1.9

1.5
.7
1.2
1.6
1.2

1.6
1.0
1.1
1.2
1.3

3.1
-.9
1.5
1.9
1.4

1.0
1.3
.9
1.4
1.3

-.3
.6
.7
1.2
.4

.4
.3
.7
.7
.8

2.7
1.9
1.7
2.3
1.8

3.3
2.0
1.9
2.0
1.9

1.0
1.1
1.2
1.6
1.0

1.7
1.0
1.2
1.3
1.3

1965
1966
1967
1968
1969

1.9
3.4
3.0
4.7
6.1

1.7
2.9
2.9
4.2
5.4

3.4
3.9
1.2
4.3
7.2

2.2
5.0
.9
3.6
5.1

.7
1.9
3.1
3.7
4.5

.6
1.4
2.6
3.7
4.2

2.6
4.9
4.0
6.1
7.4

2.2
3.9
4.4
5.2
6.9

1.6
3.3
3.5
4.9
5.7

1.4
2.3
3.4
4.4
5.5

1970
1971
1972
1973
1974

5.5
3.4
3.4
8.8
12.2

5.9
4.3
3.3
6.2
11.0

2.2
4.3
4.7
20.1
12.2

5.5
3.0
4.3
14.5
14.4

4.8
2.3
2.5
5.0
13.2

4.1
3.8
2.2
3.4
10.6

8.2
4.1
3.6
6.2
11.3

8.1
5.6
3.8
4.4
9.3

6.5
3.1
3.0
5.6
12.2

6.0
4.6
3.0
3.9
9.9

1975
1976
1977

7.0
4.8
6.8

9.1
5.8
6.5

6.5
.6
8.0

8.5
3.1
6.3

6.2
5.1
4.9

9.2
5.0
5.4

8.1
7.3
7.9

9.5
8.3
7.7

7.1
6.2
6.3

9.3
6.6
6.5

Dec.
to
Dec.1
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964

. .
. „

.
.
.
.

Year
to
year

All items
less food

Services
Dec.
to
Dec.i

Year
to
year

Dec.
to
Dec.t

Year
to
year

Change from preceding month
Unadjusted

Seasonally
adjusted

Unadjusted

Seasonally
adjusted

Unadjusted

Seasonally
adjusted

0.6
1.0
.6
.8
.6
.7

0.8
1.0
.6
.8
.6
.5

0.9
2.3

0.8
2.1
.6

L2
.4
1.0

!6
.6

0.0
.6
.6
.6
.7
.4

0.7
.6
.4
.4
.3

July.
Aug.
Sept.
Oct..
Nov.
Dec.

.4
.4
.4
.3

.5
.3
-.4

-.2
.4
.2

'A

.3
.4
.4
.3
.4
.4

~'.S
.4

1978:Jan..
Feb..
Mar.
Apr..
May.
June.

.6
.6
.7
.9
.9
1.0

.8
.6
.8
.9
.9
.9

July.
Aug.
Sept.
Oct..
Nov.

.7
.6
.8
.8
.5

.5
.6
.8
.8
.5

1977: Jan..
Feb..
Mar.
June.

SeaUnsonally
adj usted adjusted

SeaUnsonally
adjusted adjusted

0.9
.7
.7
.6
.5
.8

0.9
.6
.8
.7
.8
.7

0.4
.6
.6
.6
.6
.6

0.8
.6
.6
.6
.5
.5

.1

.2

.8

.'5
.4

'.A
.4
.4
.2

!3
.4
.5
.5

'.7
.4
.5
.5

.7
.6
.6
.4
.4
.4

.4
.4
.6
.4
.5
.3

.4
.4
.4
.3
.4
.4

1.5
1.4
1.1
1.6
1.3
1.7

1.3
1.2
1.3
1.9
1.5
1.3

.1
.1
.7
.8
1.0
.8

.7
.2
.6
.5
.6
.6

.7
.7
.7
.8
.7
.9

.6
.7
.8
.9
1.0
.9

.4

.8
.5
.7
.7
.8
.7

.6
.2
.1
.6
.5

.0
.3
.5
.8
.3

.6
.5
.9
.7
.7

.6
.5
.9

.9
.8
1.0
.9
.5

.8
.8
.8
.8
.4

.7
.7
.9
.8
.6

.'8

!6
.8
.9
.8

.7
.7
'.%
.6

i Changes from December to December are based on unadjusted indexes.
Note.—Beginning January 1978 data are for all urban consumers; earlier data are for urban wage earners and clerical
workers.
Source: Department of Labor, Bureau of Labor Statistics.




244

T A B L E B—55.—Producer price indexes by stage of processing, 1947—78
[1967=100]
Finished goods
Finished goods excluding consumer foods
Year or month

Total
finished
goods

Consumer foods

Consumer goods

Total

Crude

Processed

Total
Total

Durable Nondur
able

consumer
Capital finished
equip- goods
ment1

1947
1948
1949

74.0
79.9
77.6

82.8
90.4
83.1

99.4
107.1
101.3

80.2
87.6
80.1

79.0
84.0
82.2

74.6
79.7
81.8

80.7
85.8
82.3

55.4
60.4
63.4

80.5
86.5
82.5

1950
1951
1952
1953
1954

79.0
86.5
86.0
85.1
85.3

84.7
95.2
94.3
89.4
88.7

92.2
105.9
112.8
105.2
94.7

83.4
93.2
91.3
86.7
87.6

83.5
89.5
88.3
89.1
89.4

82.7
88.2
88.9
89.6
90.3

83.6
90.0
87.8
88.6
88.9

64.9
71.2
72.4
73.6
74.5

83.9
91.8
90.7
89.2
89.1

1955
1956
1957 . .
1958.. .
1959

85.5
87.9
91.1
93.2
93.0

86.5
86.3
89.3
94.5
90.1

98.8
98.7
97.4
103.5
94.3

84.4
84.3
87.9
93.1
89.5

90.1
92.3
94.6
94.7
95.9

91.2
94 3
97.1
98.4
99.6

89.4
91 1
93.2
92.6
94.0

76.7
82.4
87.5
89.8
91.5

88.5
89.8
92.4
94.4
93.6

1960
1961
1962 .
1963
1964

93.7
93.7
94.0
93.7
94.1

92.1
91.7
92.5
91.4
91.9

100.6
96.1
97.0
95.5
98.2

90.7
90.9
91.7
90.7
90.8

96.3
96.2
96.0
96.0
95.9

99.2
98 8
98.3
97.8
98 2

94.7
94 7
94.8
95.1
94.8

91.7
91.8
92.2
92.4
93.3

94.5
94.3
94.6
94.1
94.3

1965
1966 . _.
1967
1968
1969

95.7
98.8
100.0
102.9
106.6

95.4
101.6
100 0
103.7
110.0

98.6
104.8
100.0
107.5
116.0

94.9
101.0
100.0
103.0
108.9

100.0
102.6
105.4

96.6
98.1
100.0
102.1
104.6

97.9
98.5
100.0
102.2
104.0

95.9
97.8
100.0
102.2
105.0

94.4
96.8
100.0
103.5
106.9

96.1
99.4
100.0
102.7
106.6

1970
1971
1972
1973
1974.

110.3
113.7
117.2
127.9
147.5

113.5
115.3
121.7
146.4
166.9

116.3
115.8
121.2
160.7
180.8

113.1
115.1
121.7
143.9
164.6

109.1
113.1
115.4
120.1
139.3

107.7
111.4
113.4
118.5
138.6

106.9
110.8
113.2
115.8
126.3

108.3
111.7
113.6
120.5
146.8

112.0
116.6
119.5
123.5
141.0

109.9
112.9
116.6
129.2
149.3

1975
1976
1977
1978

163.4
170.3
180.6
194.6

181.0
180.2
189.1
206.8

181.2
194.8
201.8
216.5

181.3
177.4
186.4
204.1

156.2
165.5
176.2
188.9

153.1
161.8
172.1
183.7

138.2
144.4
152.2
165.9

163.0
173.3
185.4
195.4

162.5
173.2
184.5
199.0

163.6
169.0
178.9
192.6

1977: Jan
Feb
Mar
Apr
May
June.. _

175.1
176.6
177.5
178.8
180.3
180.5

181 5
185.0
186.6
188.5
192.3
190.7

220 0
229.1
223.6
213.1
200.0
184.2

176.9
179.9
182.0
184.9
189.9
189.4

171 4
172.2
173.0
174.0
174 8
175.6

167 4
168.3
169.2
170.4
171.1
172.0

149 0
149.3
149.7
150.6
150.8
151.4

179.6
181.0
182.3
183.6
184.8
185.9

179.6
180.2
180.7
181.6
182.4
183.1

173.2
175.0
176.1
177.5
179.4
179.4

July
Aug
Sept
Oct
Nov
Dec

181.3
181.3
181.9
183.9
184.6
185.5

192.1
189.9
190.0
189.9
190.6
192.9

192.5
191.2
193.4
189.9
196.2
188.6

190.2
188.1
188.0
188.1
188.4
191.5

176.1
176.8
177.6
180.3
180.9
181.4

172.5
173.0
173.7
175.5
175.8
176.2

151.5
152.2
152.2
156.1
156.4
156.9

186.6
187.0
188.1
188.5
188.8
189.1

183.8
184.8
185.6
189.8
190.8
191.6

180.2
179.8
180.3
181.4
181.9
183.0

187.0
188.5
189.1
191.5
193.1
194.5

195.0
199.6
200.2
204.5
206.8
209.5

197.9
210.2
207.5
220.2
212.0
211.7

192.9
196.9
197.8
201.4
204.4
207.3

182.7
183.2
183.8
185.6
186.9
188.0

177.4
177.8
178.3
180.5
181.9
182.9

158.5
158.3
159.0
163.2
165.0
165.3

189.9
190.7
191.1
191.8
192.9
194.4

193.0
193.7
194.6
195.6
196.9
198.1

184.4
186.2
186.8
189.7
191.4
193.0

196.0
195.6
196.9
199 7
200.6
202.4

210.4
205.9
209.4
212 5
212.0
215.8

234.1
212.8
214.8
220.1
227.2
230.0

206.6
203.4
207.1
209.9
208.9
212.7

189.6
190.4
191.1
193 8
195.1
196.2

184.8
185.6
186.0
188.6
189.5
190.8

167.7
168.4
168.3
171.7
172.1
172.8

195.9
196.9
197.7
199.6
200.9
202.6

199.2
200.0
201.0
204.1
205.9
206.9

194.6
193.6
195.1
197.8
198.3
200.3

.

1978: Jan
Feb.
Mar
Apr
May..
June
July
Aug
Sept...
Oct
Nov
Dec

See next page for continuation of table.




245

TABLE B-55.—Producer price indexes by stage of processing, 1947-78—Continued
[1967=1001
Intermediate materials, supplies, and components

Year or month

Foods
Total
and Other
feeds

Materials and
components
For
manufacturing

For
construction

Crude materials for further processing

Processed
fuels
and
lubricants

Containers

Supplies

Total

Foodstuffs
and
feedstuffs

Other

Total

Fuel

Other

1947
1948
1949

72.4
78.3
75 2

70.0
76.1
74.2

72.1
77.8
74.5

66.0
73.1
73.2

85.5
96.9
88.2

66.8
69.8
70.1

77.5 101.2
81.0 110.9
76.3 96.0

111.7
120.8
100.3

66.6
78.7
78.3

90.6
100.7
91.6

1950
1951
1952
1953
1954

78.6
88.1
85.5
86 0
86.5

77.7
87.0
84.3
85.3
85.7

78.1
88.5
84.8
86.2
86.3

77.0
84.3
83.7
85.1
85.5

89.9
93.9
92.8
93.4
93.3

72.0
84.5
79.9
80.0
81.5

78.9
88.8
88.8
84.3
86.3

104.6
120.1
110.3
101.9
101.0

107.6
124.5
117.2
104.9
104.9

77.9
79.4
79.9
82.7
79.0

104.7
120.7
104.6
100.1
98.2

1955
1956
1957
1958
1959

88.1
92.0
94 1
94.3
95 6

88 3
92.6
95.0
94 8
96 4

88 4
92.6
94.8
95 2
96 5

88.9
93.5
94.0
94.0
96 6

93 3
96.3
101.9
96.0
l
5 6

82 6
88.6
92.5
94.7
94 2

84 8 97 1
87.1 97.6
88.0 99.8
90 0 102 0
91 2 99 4

95.1
93.1
97.2
103.0
96 2

78.8
84.4
89.2
90.3
91.9

103.8
107.6
106.2
102.2
105.8

1960
1961
1962
1963
1964

95.6
95 0
94.9
95.2
95 5

96.8
95 5
95.3
95.0
95.6

96.5
95 3
94.7
94.9
95.9

95.9
94 6
94.2
94.5
95.4

98.2
99 4
99.0
98.1
96.0

95.5
94 7
95.9
94.7
94.0

90.7
91 8
93.8
95.2
94.3

95.1
93 8
95.7
92.9
90.8

92.8
92.6
92.1
93.2
92.8

101.4
102.5
102.0
100.7
102.4

1965
1966
1967
1968
1969

96 8
96 9
99.2
98.9
100.0 100.0 100.0
102.3 99.4 102.6
105.8 102.7 106.1

97 4
99.3
100.0
102.2
105.8

96 2
98.8
100.0
104.9
110.8

97 4 95 8 95 2 99 3
99.2 98 4 99 4 105 7
100.0 100.0 100.0 100.0
97.7 102 4 101.2 101 6
98.7 106.3 102.8 108.4

93.5
97 1
105.9
96.3
100.0 100.0 100.0
101 3 102.2 102.3
109.3 106.8 106.6

104.5
106.7
100.0
102.1
106.9

1970
1971.
1972
1973
1974

109.9
114.1
118.7
131.6
162.9

109.1
111.7
118.5
168.4
200.2

109.9
114.3
118.9
128 1
159.5

110.0
112.8
117.0
127 7
162.2

112.6
119.7
126.2
136 7
161.6

105.0
115.2
118.9
131 5
199.1

111.4
116.6
121.9
129 2
52.2

112.3
115.1
127.6
174 0
196.1

112.0
114.2
127.5
180 0
189.4

112.7 22.6
117.0 139.0
128.0 48.7
162 5 164 5
208.9 219.4

109.8
110.7
121.9
161.5
205.4

1975
1976
1977
1978

180.0
189.3
201.7
215.5

195.3
186.6
191.0
201.0

178 6
189.5
202.4
?16.4

178 7
185.6
195.5
208.2

176 4
188.0
202.9
224.4

233 0
250.8
283 8
296.4

171 4 168 1 196 9
181.5 179.1 205.1
193 i 188 0 214 3
212.4 96.9 240.2

191 8
190.1
190 9
215.4

206 9
?33.6
258.4
?87.0

271 5
314.7
400.4
464.0

188.3
210.2
217.3
235.4

1977: Jan
Feb
Mar
Apr
May
June

195.0
196.6
198.7
201.2
202.1
202.1

192.3
194.8
198.3
212.0
211.0
202.1

195.3
96.7
98.7
200.7
201.6
202.2

189.7
190.8
192.7
194.6
195.8
195.5

195.1
195.9
197.8
199.4
200.3
201.3

262.7
271.2
276 3
282.0
283.9
286.1

84.1
84.3
89 0
93.3
92.9
93.5

208.1
215.5
219 9
226.1
224.4
215.4

189.7
194.0
197 1
203.7
201.8
192.0

242.9
256.0
263 0
268.5
267.3
259.5

342.8
377.8
383 9
392.3
404.5
399.4

214.1
220.8
228.0
232.7
227.6
219.0

202.6 82.9 203.8
203.4 177.7 204.9
204.2 174.6 206.0
204.4 173.1 206.3
204.9 86.2 206.0
205.4 86.4 06.6

196.6
197.3
197.8
198.0
198.2
198.9

204.1
206.1
208.8
208.5
208.3
209.5

289.0
291.9
291.3
292 4
289.2
289.3

94.0 185.9 212.9
94.4 84.6 207.7
97.1 85.2 207.8
98.1 185.1 207.6
98.2 89.0 210.6
98.2 88.7 215.5

191.2
181.3
182.0
182.7
185.5
190.0

253.9
257.4
256.4
254.6
257.9
263.7

403.2
412.3
415.4
416.2
424.5
432.0

210.6
212.5
210.3
207.7
209.5
214.9

207.2
208.9
210.7
212.5
213.9
215.1

89.6
89.9
97.9
00.6
00.8
01.9

08 2
10.1
11.5
13.3
14.7
15.9

200 0
202.1
203.5
205.5
206.5
207.4

212 7
216.3
218.3
220.8
222.5
224.3

291 2
291.7
294.3
294.8
297.3
299.9

02 2
04.3
05.7
06.6
09.3
11.7

90 5 19 6
89.8 25.0
92.7 30.5
94.0 39.0
95.1 41.2
95.8 245.4

194 0
201.3
206.3
216.3
219.1
223.7

67 8
69.7
276.2
281.6
282.6
286.1

430 3
431.7
441.9
454.7
458.3
465.8

220.7
222.7
228.1
231.4
231.7
234.0

216.0
217.3
218.7
220.7
221.8
222.8

01.5
98.8
03.4
07.6
07.4
12.3

16.8
18.4
19.6
21.5
22.7
23.5

208.2
210.1
211.7
213.8
214.7
215.4

226.2
228.3
229.1
230.2
231.8
232.5

298.1
296.7
296.7
297.9
297.9
299.9

13.5
14.6
16.5
20.7
21.6
22.4

97.1
96.9
98.9
01.9
03.5
05.8

222.0 289.7 471.8
213.2 91.6 470.8
218.5 94.9 478.6
224.4 98.2 83.5
221.3 00.6 85.3
224.7 05.1 94.9

236.4
239.1
241.1
244.0
246.5
249.5

July
Aug
Sept....
Oct .
Nov
Dec
1978:Jan
Feb .
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1

108.0
111.0
115.6
140 6
154.5

186.6
187.4
188 5
192.5
191.9
190.9

Formerly called producer finished goods.
Intermediate materials for food manufacturing and manufactured animal feeds.
Source: Department of Labor, Bureau of Labor Statistics.

2




246

97.0
96 5
97.5
95.4
94.5

45.4
40.2
44.9
49.9
48.6
52.4

TABLE B-56.—Producer price indexes by stage of processing, seasonally adjusted^ 1975-78
(1967 = 100, seasonally adjusted]

Finished goods

Intermediate materi• als, supplies, and
components

Finished goods excluding consumer
Year and
month

ConTotal sumer
finished fingoods ished
foods

Crude materUils for
further proce ssing

fnn/lo
IUUUO

Total

Total
consumer
Consumer goods
FoodCapifinFoods
__ J
ished Total and Other Total stuffs Other
tal
ana
Non- equip- goods
feeds 2
feedTotal Dur- dura- ment i
able ble
stuffs

1975: J a n . —
Feb.—
Mar....
Apr.._.
May...
June

158.6
158.8
159.0
160.1
161.4
162.8

175.6
174.6
173.1
175.3
178.2
181.1

151.6
152.4
153.3
153.9
154.5
155.2

149.1
149.7
150.2
150.6
151.1
152.0

135.0
135.8
136.6
136.9
137.1
137.6

158.4
158.8
159.1
159.7
160.4
161.4

156.9
158.2
159.7
160.7
161.4
162.0

159.1
158.9
158.7
159.9
161.3
162.9

179.5
179.2
178.4
178.8
178.3
177.8

218.7
209.1
197.4
198.9
192.0
184.4

175.9
176.4
176.6
177.0
177.2
177.3

190.4
187.4
182.2
189.9
196.0
195.2

183.5
179.1
172.6
183.7
191.1
190.0

203.5
203.9
200.8
201.7
205.4
205.5

July...
Aug
Sept—
Oct.—
Nov....
Dec...

164.2
165.0
166.3
167.5
168.1
168.2

183.7
183.9
186.0
187.1
186.6
185.2

156.1
157.1
158.2
159.4
160.5
161.3

152.9
154.2
155.2
156.4
157.4
158.3

138.0
138.6
139.2
140.1
141.1
141.5

162.7
164.4
165.8
167.0
168.2
169.2

162.9
163.3
164.5
165.9
166.8
167.7

164.5
165.3
166.8
167.9
168.4
168.3

178.9
180.0
180.4
182.3
182.8
183.2

193.4
195.8
192.4
192.3
186.6
180.5

177.6
178.6
179.3
181.4
182.5
183.5

199.6
201.6
204.3
206.7
204.8
203.2

196.4
199.3
200.9
204.2
201.4
196.5

205.9
206.6
210.8
211.5
211.1
215.8

1976: J a n . —
Feb.—
Mar....
Apr—
May...
June-

168.4
168.2
168.3
169.4
169.6
170.0

183.3
180.8
180.1
183.1
183.4
182.0

162.0
162.6
163.0
163.4
163.6
164.6

158.8
159.2
159.3
159.5
159.6
160.6

142.0
142.5
142.8
143.0
143.3
144.0

170.1
170.3
170.2
170.4
170.6
172.0

168.8
169.7
170.5
171.2
171.7
172.5

168.0
167.5
167.4
168.5
168.6
168.9

184.3
185.2
186.0
186.6
187.3
188.4

180.7
181.2
183.1
180.5
188.5
193.2

184.7
185.6
186.3
187.1
187.2
188.3

203.1
202.3
199.6
205.2
204.1
208.2

195.3
194.6
188.2
195.7
193.1
195.6

218.2
216.6
220.0
223.4
224.9
232.2

July...
Aug
Sept—
Oct.—
Nov....
Dec...

170.3
170.0
171.0
171.5
172.2
173.8

180.3
177.1
177.4
176.5
177.0
180.7

165.5
166.2
167.3
168.3
169.0
169.9

161.6
162.5
163.7
164.2
165.2
165.6

144.3
144.9
146.0
146.0
146.6
146.9

173.3
174.4
175.5
176.3
177.6
178.2

173.3
173.7
174.9
176.5
177.0
178.5

168.9
168.4
169.3
169.3
170.2
171.8

190.0
190.1
191.7
192.4
193.4
194.4

202.4
184.1
188.7
184.9
184.6
187.0

189.4
190.4
192.0
192.9
193.9
194.9

208.6
204.2
203.7
203.6
208.6
209.5

190.8
187.1
186.0
181.6
183.4
188.3

242.8
236.7
236.9
245.5
255.9
248.8

1977: J a n . . . . 174.8 181.3 171.0
Feb.... 176.6 185.9 172.0
M a r . . . 178.0 188.3 173.0
179.2 189.6 174.3
May'."." 180.6 192.2 175.2
June... 180.8 190.3 176.0

167.2
168.1
169.2
170.7
171.5
172.4

148.0
148.7
149.4
150.6
151.3
151.9

180.0
181.2
182.7
184.2
185.2
186.1

178.9
179.9
180.7
181.7
182.8
183.7

173.0
175.2
176.8
178.1
179.6
179.5

195.7
197.3
199.3
201.1
202.0
201.6

189.7
196.2
201.9
212.5
216.9
199.9

196.2
197.5
199.1
200.5
201.2
201.8

210.2
219.0
221.0
222.5
222.3
213.4

192.0
198.2
198.7
204.3
200.0
189.9

244.6
258.8
263.4
265.5
264.1
257.9

July...
Aug...
Sept...
Oct....
Nov...
Dec...

181.1
181.5
182.1
183.2
184.5
185.3

189.9
189.3
189.2
189.5
191.9
192.6

176.5
177.2
178.2
179.5
180.3
181.2

172.6
173.2
174.1
174.8
175.4
176.1

152.4
153.7
154.0
154.9
155.5
156.1

186.2
186.3
187.5
188.1
188.8
189.5

184.5
185.4
186.4
188.9
189.9
191.3

179.5
179.7
180.3
180.8
182.1
182.7

202.2
202.6
203.5
204.3
205.2
206.0

185.3
176.2
172.9
172.8
185.4
183.3

203.2
204.2
205.3
206.1
206.4
207.4

209.8
206.3
205.7
207.4
214.4
217.2

185.8
180.2
179.8
182.2
189.9
191.1

255.4
255.6
254.4
254.9
260.9
266.3

1978: J a n . . . .
Feb....
Mar...
Apr....
May...
June...

186.6
188.6
189.6
192.0
193.4
194.8

194.8
200.7
202.1
205.8
206.7
209.1

182.2
183.0
183.9
185.8
187.3
188.4

177.1
177.6
178.4
180.8
182.3
183.2

157.4
157.7
158.7
163.2
165.5
165.8

190.3
190.9
191.5
192.4
193.3
194.6

192.3
193.5
194.6
195.7
197.3
198.7

184.2
186.4
187.5
190.4
191.6
193.1

207.9
209.7
211.3
212.4
213.7
214.6

187.2
191.0
201.1
201.2
206.4
200.8

209.2
210.9
212.0
213.1
214.2
215.4

221.6
228.7
231.7
238.5
238.9
243.1

196.4
205.6
208.0
217.0
217.1
221.3

269.4
272.1
276.5
278.8
279.8
284.2

July...
Aug...
Sept...
Oct....
Nov...
Dec...

195.8
195.8
197.2
198.9
200.4
202.1

208.1
205.2
208.6
212.1
213.4
215.4

190.0
190.8
191.7
192.9
194.5
196.0

185.0
185.9
186.6
187.8
189.1
190.7

168.7
170.1
170.3
170.3
171.1
171.9

195.5
196.1
197.1
199.2
200.9
203.0

199.9
200.7
201.8
203.0
205.0
206.6

194.0
193.6
195.1
197.1
198.5
200.2

215.5
216.4
217.9
220.6
222.2
223.5

204.0
197.1
201.5
207.1
206.4
208.8

216.2
217.6
218.9
221.4
223.2
224.4

241.7
238.6
242.3
249.6
253.3
254.4

215.7
211.9
215.9
223.7
226.5
226.1

291.0
289.5
292.5
298.6
304.1
308.1

1

Formerly called producer finished goods.
Intermediate materials for food manufacturing and manufactured animal feeds.
Source: Department of Labor, Bureau of Labor Statistics.

2




247

TABLE B-57.—Producer price indexes by major commodity groups, 1929—78
[1967=100]
Farm products and processed
foods and feeds
Year or month
Total

Farm
products

Processed
foods
and
feeds

Industrial commodities

Total

Textile
products
and
apparel

Hides,
Fuels
skins,
and
leather, related Chemicals
and
products, and allied
products1
related
and
products power1

1929

64.1

48.6

48.9

59.4

1933

31.4

37.8

36.3

47.6

1939

40.0

43.3

42.8

52.3

51.5

94 3
101.5
89.6

41.4
50.3
64.8
75.0
75.5
78 5
90.9
109.4
117.5
101.6

82.9
88.7
80.6

44.0
47.3
50.7
51.5
52.3
53.0
58.0
70.8
76.9
75.3

103.6
108.1
98.9

45.2
48.4
52.8
52.7
52.2
52.9
61.1
83.3
84.2
79.9

51.4
54.6
56.2
57.8
59.5
60.1
64.4
76.9
90.5
86.2

52.4
57.0
63.3
64.1
64.8
65.2
70.5
93.7
95.9
87.6

1950
1951—
1952
1953.
1954...
1955
1956
1957...
1958
1959

93.9
106 9
102 7
96.0
95 7
91.2
90 6
93 7
98.1
93.5

106.7
124.2
117.2
106.2
104.7
98.2
96.9
99.5
103.9
97.5

83.4
92 7
91.6
87.4
88 9
85.0
84 9
87.4
91.8
89.4

78.0
86.1
84.1
84.8
85.0
86.9
90.8
93.3
93.6
95.3

102.7
114.6
103.4
100.8
98.6
98.7
98.7
98.8
97.0
98.4

86.3
99.1
80.1
81.3
77 3
81.9
82.0
82.9
94.2

87.1
90.3
90.1
92.6
91.3
91.2
94.0
99.1
95.3
95.3

88.9
101.7
96.5
97.7
98.9
98.5
99.1
101.2
102.0
101.6

1960
1961...
1962
1963
1964...
1965.
1966...
1967...
1968
1969

93.7
93 7
94.7
93 8
93 2
97.1
103.5
100 0
102 4
108.0

97.2
96.3
98.0
96.0
94.6
98.7
105.9
100.0
102 5
109.1

89.5
91.0
91.9
92 5
92.3
95.5
101.2
100.0
102 2
107.3

95.3
94.8
94.8
94.7
95.2
96.4
98.5
100.0
102.5
106.0

99.5
97.7
98.6
98.5
99.2
99.8
100.1
100.0
103.7
106.0

90.8
91.7
92.7
90.0
90.3
94.3
103.4
100.0
103.2
108.9

96.1
97.2
96.7
96.3
93.7
95.5
97.8
100.0
98.9
100.9

101.8
100.7
99.1
97.9
98.3
99.0
99.4
100.0
99.8
99.9

1970
1971
1972
1973
1974
1975
1976 .
1977
1978

111 7
113.9
122 4
159.1
177 4
184.2
183 1
188 8
206 7

111.0
112.9
125.0
176.3
187.7
186.7
191.0
192.5
212.7

112 1
114.5
120.8
148.1
170 9
182.6
178.0
186 1
202.6

110.0
114.1
117.9
125.9
153.8
171.5
182.4
195.1
209.4

107.1
109.0
113.6
123.8
139.1
137.9
148.2
154.0
159.7

110.3
114.1
131.3
143.1
145.1
148.5
167.8
179.3
200.1

106.2
115.2
118.6
134.3
208.3
245.1
265.6
302.2
322.5

102.2
104.1
104.2
110.0
146.8
181.3
187.2
192.8
198.7

1977: Jan..
Feb
Mar
Apr. _
May
June

184.8
188.4
190 9
195.9
196 8
191 5

193.5
199.1
202.5
208.2
204.3
192.8

179.3
181.9
183.9
188.5
191.9
190.1

188.4
190.0
191.7
193.3
194.2
194.7

150.8
151.7
152.4
153.7
154.0
154.6

175.3
176.9
177.9
179.9
181.9
179.4

278.8
289.1
293.7
298.8
302.4
304.3

188.9
190.1
191.2
192.9
194.0
193.9

July
Aug..
Sept
Oct
Nov. .
Dec__

188.7
184.3
184.0
184.0
187.0
189.4

190.2
181.8
182.0
182.0
185.6
188.3

187.2
184.9
184.4
184.3
186.9
189.3

195.9
196.9
197.8
199.1
199.3
200.0

154.5
154.6
155.1
155.2
155.3
155.8

180.0
180.2
179.6
179.2
180.0
181.5

307.0
309.5
309.9
310.7
310.5
312.0

193.6
193.6
193.2
193.7
193.9
194.1

192 2
196.8
200.0
205 5
207.6
210.4

192.2
198.9
204.2
213.7
215.8
219.5

191.5
194.9
196.9
200.2
202.4
204.6

201.6
202.9
204.1
206.1
207.4
208.7

156.5
157.0
157.4
157.9
158.6
159.2

185.8
187.2
187.9
191.9
193.6
195.3

312.8
312.9
315.3
317.3
319.7
323.2

194.1
195.2
196.1
196.9
198.6
198.9

210.3
205 3
209.5
213.6
212.5
216.1

219.9
210.3
215.3
220.7
219.2
222.4

204.2
201.8
205.5
209.0
208.1
211.9

210.1
211.4
212.4
214.7
216.0
217.0

160.0
160.5
161.1
162.2
163.0
163.5

197.3
205.1
211.0
213.3
216.0
216.5

324.5
324.9
327.0
328.9
329.9
334.1

199.8
199.5
200.2
201.5
202.3
202.2

1940 . .
1941
1942
1943 . .
1944
1945
1946 ..
1947...
1948
1949

.

.

1978: Jan
Feb... _
Mar
Apr
May
June.. .

_.

July__
Aug
Sept
Oct.
Nov
Dec-

See next page for continuation of table.




248

47 4

TABLE B-57.—Producer price indexes by major commodity groups, 1929-78—Continued
11967=100]
Industrial commodities—Continue*i

Year or month

Transportation
Pulp,
equipFurniMetals Machin- ture and NonmeRubber Lumber
paper,
ment:
and
and
and
ery and
tallic
and
Motor
houseplastic
wood
metal
equipmineral vehicles
allied
hold
products products products products
ment
and
durables products
equipment2

Miscellaneous
products

1929

59.4

25.0

40.2

55.8

51.2

41 9

1933

40.2

19.0

30.7

44 6

47 2

34 8

1939

61.2

24.8

37.6

41 3

52 6

49 1

39 1

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

57.1
61.5
71.6
73 6
72.7
70.5
70 8
70.5
72.8
70.5

27.4
32.7
35.6
37 7
40.6
41.2
47.2
73.4
84.0
77.7

72.5
75.7
72.4

37.8
38 5
39.1
39 0
39 0
39.6
44 3
54.9
62.5
63.0

41.4
42 1
42.8
42 4
42 1
42.2
46 4
53 7
58.2
61.0

53.8
57 2
61.8
61 4
63 1
63.2
67 1
77.0
81.6
82.9

49.1
50 2
52.3
52 4
53 5
55.7
59 3
66 3
71.6
73.5

40 4
43 2
47 2
47 2
47 5
48 3
56 0
64 1
70.8
75.7

73 5
76.5
78.0

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

85.9
105.4
95.5
89.1
90.4
102.4
103.8
103.4
103.3
102.9

89.3
97.2
94.4
94.3
92.6
97.1
98.5
93.5
92.4
98.8

74.3
88.0
85.7
85.5
85.5
87.8
93.6
95.4
96.4
97.3

66.3
73.8
73.9
76.3
76.9
82.1
89.2
91.0
90.4
92.3

63.1
70.5
70.6
72.2
73.4
75.7
81.8
87.6
89.4
91.3

84.7
91.8
90.1
91.9
92.9
93.3
95.8
98.3
99.1
99.3

75.4
80 1
80.1
83.3
85.1
87.5
91.3
94.8
95.8
97.0

75.3
79 4
84.0
83.6
83 8
86.3
91.2
95.1
98.1
100.3

79.2
83 9
83.4
85.6
86.4
86.5
87.6
90.2
92.0
92.2

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

103.1
99.2
96.3
96.8
95.5
95.9
97.8
100.0
103.4
105.3

95.3
91.0
91.6
93.5
95.4
95.9
100.2
100.0
113.3
125.3

98.1
95.2
96.3
95.6
95.4
96.2
98.8
100.0
101.1
104.0

92.4
91.9
91.2
91.3
93.8
96.4
98.8
100.0
102.6
108.5

92.0
91.9
92.0
92.2
92.8
93.9
96.8
100.0
103.2
106.5

99.0
98.4
97.7
97.0
97.4
96.9
98.0
100.0
102.8
104.9

97.2
97.6
97.6
97.1
97.3
97.5
98.4
100.0
103.7
107.7

98.8
98.6
98.6
97.8
98.3
98.5
98.6
100.0
102.8
104.8

93.0
93.3
93.7
94.5
95.2
95.9
97.7
100.0
102.2
105.2

1970
1971
1972 .
1973
1974
1975._
1976
1977
1978- - -

108.3
109.1
109.3
112.4
136.2
150.2
159.2
167.6
174.7

113.6
127.3
144.3
177 2
183.6
176.9
205.6
236.3
275.9

108.2
110.1
113.4
122.1
151.7
170.4
179.4
186.4
195.5

116.6
118.7
123.5
132.8
171.9
185.6
195.9
209.0
227.1

111.4
115.5
117.9
121.7
139.4
161.4
171.0
181.7
196.0

107.5
110.0
111.4
115.2
127.9
139.7
145.6
151.5
160.1

112.9
122.4
126.1
130.2
153.2
174.0
186.3
200.5
222.8

108.7
114.9
118.0
119.2
129.2
144.6
153.8
163.7
175.9

109.9
112.9
114.6
119.7
133.1
147.7
153.7
164.3
184.7

1977: Jan
Feb..
Mar
Apr
May
June

164.6
164.2
164 6
165.7
166.3
167.5

222.8
224.4
229.0
229.8
229.5
228.8

182.9
183.0
183 6
185.3
186.2
187.3

202.1
203.2
206.5
208.2
208.5
207.7

176.7
177.5
178.2
178.9
180.0
180.7

148.8
149.1
149.6
150.1
150.6
151.5

192.4
193.6
195.1
198.6
199.3
200.6

159.2
159.4
160.7
161.0
161.4
161.9

160.2
160.6
161.0
162.5
163.1
163.5

July
Aug
Sept
Oct
Nov
Dec

168.9
169.3
169.5
170 2
170.2
170.0

235.6
242.7
252.9
247.8
243.3
249.2

187.8
187.8
188.1
188.7
188.2
187.6

210.6
211.7
212.6
211.8
212.0
213.3

181.8
182.8
183.8
185.6
186.8
187.5

151.4
152.6
152.7
153.0
153.8
154.2

201.7
202.5
204.3
205.4
205.7
206.6

161.9
163.2
163.9
170.7
170.7
170.9

163.9
164.2
166.0
168.4
168.9
169.7

170.2
170.2
171.4
172.8
173.8
174.5

256.4
263.7
266.2
269.6
273.4
278.5

188.0
188.6
189.7
191.9
193.2
193.5

215.2
219.1
221.1
223.9
224.6
225.9

189.3
190.3
191.6
192.7
193.9
195.3

156.5
156.7
157.7
158.4
159.2
159.5

212.9
215.1
215.9
218.4
219.3
222.0

171.3
171.8
171.9
172.9
174.6
175.0

171.6
171.3
172.6
181.4
182.6
184.3

174.9
175.7
176.6
178.0
179.2
179.6

277.5
281.6
282.8
284.1
288.5
288.7

195. 5
195.8
199.1
202.2
203.7
204.9

227.3
231.0
231.5
234.0
235.4
236.6

196.5
197.5
198.7
200.4
202.5
203.6

161.4
161.8
161.3
162.2
162.9
163.7

224.7
227.2
227.8
229.0
229.8
230.9

175.5
175.8
175.8
181.3
182.1
182.5

189.7
191.3
191.7
193.5
193.0
193.8

1978: Jan .
Feb
Mar..
Apr
May
June
July.
Aug
Sept
Oct
Nov
Dec

.

* Prices for some items in this grouping are lagged and refer to 1 month earlier than the index month.
2
Index for total transportation equipment is not shown but is available beginning December 1968.
Source: Department of Labor, Bureau of Labor Statistics.




249

TABLE B-58.—Changes in producer price indexes for finished goods, 1948-78
[Percent change]
Finished goods excluding consumer foods

Consumer
finished
foods

Total
finished
goods

Consumer
goods

Total

Year or month

Dec.
to
Dec*

Year
to
year

92
-8.1

40
—4.5

6 3
-2.1

10 4
—.6

9.0
5.0

13.3
5.3
-5.9
-2.2
-1.9

1.9
12.4
-.9
-5.2
-.8

8.2
.9
-1.1
1.6
.3

1.6
7.2
-1.3
.9
.3

10.3
3.4
8
2.3
1 i

2.4
9.7
1.7
1.7
1.2

.2
2.8
3.6
2.3
-.2

-2.9
3.6
5.3

-2.5
-.2
3.5
5.8
-4.7

1.7
2.5
1.7
.2
.8

.8
2.4
2.5
1.3

56
8.3
43
1.3
1.0

3.0
7.4
6.2
2.6
1.9

.8

5.2
-1.8

2.2

.4
-.3

.4
-.1
-.2
0
-.1

.1
.2
.3
.5
.9

.2
.4
.2
1.0

Dec.
to
Dec.*

Year
to
year

Dec.
to
Dec*

Year
to
year

3.0
-4.6

80
-2.9

-2.4
-7.4

1950
1951
1952
1953
1954

10.4
2.9
-2.2
.5
-.1

1.8
9.5
-.6
-1.0

1955
195g
1957
1958
1959

1.2
4.2
3.2

1948
1949

-

-

-.4
1.8

I960
1961
1962
1963
1964

.1
-.2
.5

1965
1966
1967
1968
1969

0

-3.7

Year
to
year

Capital
equipment

Dec.
to
Dec.*

Dec.
to
Dec*

Year
to
year

3
.4

.5

-1.3
.4

.9
-1.2

.1

3.3
2.2
1.6
3.1
4.8

1.7
3.2
1.2
2.9
3.6

9.1
1.4

3.8
6.5
-1.6
3.7
6.1

2.4
3.4

2.6
2.7

.9
1.7
2.1
2.0
2.9

.7
1.6
1.9
2.1
2.4

1.5
3.9
3.1
3.0
4.6

1.2
2.5
3.3
3.5
3.3

1970
1971
1972
1973
1974.

2.2
3.2
3.8
11.8
18.3

3.5
3.1
3.1
9.1
15.3

-2.5
5.9
8.0
22.5
13.0

3.2
1.6
5.6
20.3
14.0

4.3
2.1
2.0
6.7
21.2

3.5
3.7
2.0
4.1
16.0

3.9
2.0
2.0
7.4
20.5

3.0
3.4
1.8
4.5
17.0

4.9
2.4
2.0
5.3
22.6

4.8
4.1
2.5
3.3
14.2

1975
1976
1977
1978

6.6
3.3
6.6
9.1

10.8
4.2
6.0
7.8

5.5
-2.5
6.6
11.9

8.4
-.4
4.9
9.4

7.2
5.5
6.6
8.2

12.1
6.0
6.5
7.2

6.7
4.9
6.1
8.3

10.5
5.7
6.4
6.7

8.2
6.4
7.2
8.0

15.2
6.6
6.5
7.9

4.8
8.2

Change from preceding month
SeaSeaSeaSeaSeaUnad- sonally Unad- sonally Unad- sonally Unad- sonally Unad- sonally
adjusted
justed
adadjusted
justed
adadjusted
justed
justed
justed
justed
justed
0.6
.9

1977: Jan
Feb

Apr
May
June
July
Aug
Sept.
Oct
Nov
Dec

1978: Jan
Feb
Mar

Apr
My
a

June
July

Aug

Sept...
Oct
Nov.
Dec
1

0.6
1.0
.8

0.3
2.5
1.3

_. -

.4
0
.3
1.1
.4
.5

.2
.2
.3
.6
.7
.4

.7
-1.1
.1
-.1
.4
1.2

-.2
-.3
_.l
.2
1.3
.4

.3
.4
5
1.5
3
.3

.3
.4
.6
.7
4
.5

.8
.8
.3
1.3
.8
.7

.7
1.1

1.1
2.4
.3
2.1
1.1
1.3

1.1
3.0

i.s

7
.3
.3
1.0

L2

!6

.6
.4
.5
1.0
.8
.6

-.5
-1.4
1.7
1.7
6
.9

.9
.4
.4
1.4

.8
-.2
l'.4
.5
.9

0
*
.7
.9
8
.8

-2!l
1.7
1.5
- 2
1.8

0.7
.5
.'6

.6

Changes from December to December are based on unadjusted indexes.

Source: Department of Labor, Bureau of Labor Statistics.




250

0.2
.6
.4
.6
.6
.5

.3

.1

*4
1.0
2
.2

!5
.4
3
.4

.4
.5
.4
2.3
.5
.4

.4
.5
.5
1.3
.5
.7

7
.2

6
.3

\\l
.8
.5

L3
.8
.5

.7
.4
.5
.5

.5
.6
.6
.6
.8

1.0
.4
.2
1.4

1.0
.5
.4
.6
7

.7

.8

'.5

.'8
.1

L3
.7
.7

!4
.5

0.5
.3
.3
.5
.4
.4

0.8
.5
.5

0.3
1.9
.9
1.0
2.0
-.8

L4
-1.0

1.0
.5
.7
.9
.5
.5

0.6
.6
.6
.8
.5
.5

'.7
.8
.1

Mar

.8
.4
'.6
8
.8

!6
.6
.4
.5
1.5
9

.6
.4
".6
1.0
.8

MONEY STOCK, CREDIT, AND FINANCE
T A B L E B-59.—Money stock'measures, 1953-78

[Averages of daily figures; billions of dollars, seasonally adjusted, except as noted]
()verall measures i

Components and related items
Deposits at commercial banks

Year and
month

Other
checkable
Time
bank
deDeSavmand
thrift
posits
ings a instituTotal Large
(unadtions * justed) «
CDs 3 Other

Mi+

Mi

M3

Currency

67.4

92.9

93.3
95.2
92.8

102.3
113.4
126.4
141.4
157.3
170.4
177.3
194.0
206.7
214.9

4.7
4.9
5.6
5.1
5.5
4.6
3.4
5.0
5.0
5.6

106.5
126.2
146.5
173.9
193.5
209.1
225.1
251.5
290.6

97.4
111.6
123.5
127.0
135.8
160.5
201.9
219.6
220.2

232.6
273.3
319.2
347.8
369.1
427.8
496.0
566.6
626.5

.'3
.4
.7
1.4
2.1
2.8

7.3
6.9
7.4
6.3
4.9
4.1
4.4
5.1
10.2

63.1
63.3
62.2
61.6
62.9
63.3

225.7
227.5
229.7
230.9
233.0
236.9

205.8
208.3
210.1
212.0
213.0
213.0

502.2
507.6
512.5
517.3
522.4
527.8

1.4
1.4
1.5
1.6
1.6
1.7

3.9
4.2
4.3
5.4
3.6
5.0

518.3
521.9
525.9
531.9
540.1
545.0

62.8
63.2
63.8
66.4
70.9
74.0

241.4
241.7
243.3
246.0
249.7
251.5

214.1
217.0
218.8
219.6
219.4
219.6

534.3
542.1
549.8
556.5
561.7
566.6

1.8
1.8
1.9
2.0
2.1
2.1

3.6
3.4
5.0
3.7
3.5
5.1

252.2
251.7
252.3
257.3
258.5
259.9

550.6
556.7
561.7
565.2
571.6
574.5

76.3
79.4
82.0
83.4
87.1
86.7

253.6
256.4
258.7
260.1
262.6
266.1

220.7
220.9
221.0
221.6
222.0
221.7

570.7
574.0
577.7
581.2
584.7
589.2

2.2
2.3
2.3
2.5
2.6
2.6

4.3
4.3
4.8
5.0
4.0
6.2

260.9
262.8
265.7
266.1
263.9
263.6

579.4
583.0
589.7
593.6
605.3
607.8

87.4
86.3
88.1
88.2
95.4
97.0

271.1
274.3
277.4
281.5
288.0
290.6

220.9
222.4
224.2
223.9
221.8
220.2

594.7
601.6
609.6
616.5
621.6
626.5

2.7
2.8
2.8
2.8
2.8
2.8

4.5
3.6
6.2
4.3
8.0
10.2

44.5
48.3
50.0
51.9
57.4
65.4
67.4

319.3
342.1
369.2
400.3
434.4
471.8
495.5
544.0
589.9
607.4

29.0
29 6
30.6
32.5
34.3
36.3
38.3
40.4
43.4
46.1

115.2
119.1
120.3
124.1
129.5
135.1
137.5
147.0
159.0
162.9

72.9
82 7
97.6
112.0
126.2
146.4
157.9
183.3
204.3
194.4

12.8
16.4
15.5
20.6
23.5
10.9

69.4
85.6
90.7

656.3
745.2
844.4
919.2
981.2
1,092.5
1,236.5
1, 376.1
1,498.5

49.1
52.6
56.8
61.5
67.8
73.7
80.7
88.6
97.5

170.7
181.5
198.4
209.0
215.1
221.5
232.8
249.9
263.6

229.2
271.1
313.5
363.9
418.3
450.9
489.7
545.0
607.8

25.3
33.3
43.5
63.0
89.0
81.3
62.7
74.0
97.0

523.1
527.0
531.1
536.8
538.3
540.3

747.4 1,249.6
753.1 1,260.7
759.2 1,271.7
766.1 1,283.4
769.8 1,292.2
775.5 1, 303.3

81.3
81.9
82.4
83.1
83.8
84.2

234.6
235.4
237.1
240.0
240.0
241.4

494.6
499.0
502.0
504.5
508.9
513.2

328.7
330.5
333.0
335.9
336.2
338.5

544.6
549.4
553.7
557.5
557.7
560.2

784.2 1,318.5
789.2 1,331.3
795.1 1, 344.9
801.4 1,357.9
805.4 1, 367.1
809.5 1,376.1

85.1
85.5
86.3
87.1
87.7
88.6

243.6
245.0
246.6
248.7
248.5
249.9

341.7
341.8
342.9
348.5
350.6
352.8

564.6
565.0
566.2
572.6
575.2
577.1

815.9
819.1
822.6
830.3
835.2
840.6

1,386.6
1,393.1
1,400.3
1,411.4
1,419.9
1,429.8

89.4
90.1
90.7
91.2
92.1
92.8

July.. 354.2 577.8
A u g . . 356.7 582.0
360.9 587.9
362.0 588.8
Nov.. 360.6 585.3
Dec p. 361.1 584.1

846.2
853.5
862.4
867.4
870.5
872.0

1,441.0
1,455.1
1, 472.1
1,483.9
1,492.1
1,498.5

93.3
94.0
95.2
96.0
96.7
97.5

128.8
132.3
135.2
136.9
135.9
141.1
143.4

210.9

1960:
1961:
1962:
1963:
1964:
1965:
1966:
1967:
1968:
1969:

Dec
Dec
Dec""
Dec...
Dec
Dec .1
Dec
Dec".".:
Dec...
Dec...

144.2
217.1
148.7
228 6
150.9
242.9
156.5
258.9
163.7
277.1
171.4
301.4
175.8
318.2
187.4 280.7 350.0
202.5 297.7 383.3
209.0 301.8 392.5

1970:
1971:
1972:
1973:
1974:
1975:
1976:
1977:
1978:

Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec
Dec.
Dec.

219.7
234.0
255.3
270.5
282.9
295.2
313.5
338.5
361.1

317.3
345.8
378.9
397.7
419.0
456.4
516.8
560.2
584.1

423.7
471.9
525.3
571.4
612.2
664.7
740.5
809.5
872.0

1977: J a n . .
Feb..
Mar..
Apr..
May..
June.

315.9
317.3
319.5
323.2
323.7
325.6

July..
Aug..
Sept..
Oct..
Nov..
Dec.
1978: Jan...
Feb...
Mar..
Apr...
May..
June..

ment

deposits
(unadjusted)'

72 .9
79 .9
92 .0
102 .3
113 .4
130 .0
142 .4

303.8

101.1
104.9
107.4
108.7
107.6
112.6
114.5

Dec
Dec
Dec
Dec
Dec
Dec
Dec...

U.S.
Govern-

3.8
5.0
3.4
3.4
3.5
3.9
4.9

27.7
27.4
27.8
28.2
28.3
28.6
28.9

1953:
1954:
1955:
1956:
1957:
1958:
1959:

S::

Deposits
at non-

Time and savings

Mi

2.8
5.7
9.6

0.1

1
Mi is currency plus demand deposits; Mi+ is Mi plus savings deposits at commercial banks and checkable deposits at
nonbank thrift institutions; M 2 is Mi plus time and savings deposits at commercial banks other than large certificates of
deposit (CDs); and M 3 is M 2 plus deposits at nonbank thrift institutions.
2
Negotiable time certificates of deposit (CDs) issued in denominations of $100,000 or more by large weekly reporting
commercial banks.
3
Includes negotiable order of withdrawal (NOW) accounts at commercial banks.
4
Average of the beginning and end-of-month deposits of mutual savings banks, savings capital at savings and loan
associations, and credit union shares.
«Includes negotiable order of withdrawal (NOW) accounts at thrift institutions, credit union share draft accounts, and
demand deposits at mutual savings banks.
(Deposits at all commercial banks. Includes Treasury note balances beginning November 1978.
Source: Board of Governors of the Federal Reserve System.




251

TABLE B-60.—Commercial bank loans and investments, 1930-78
[Billions of dollars]
Loans
End of year
or month *
1930:June
1933: June
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948

Total loans
and investments'
48.9
30.4
40.7
43.9
50.7
67.4
85.1
105.5
124.0
114.0
116.3
114.2

Total a

Investments

Commercial
and
industrial

U.S. Treasury
securities

Other
securities

Loans plus
loans sold to
bank affiliates 2

5.0
7.5
16.3
17.8
21.8
41.4
59.8
77.6
90.6
74.8
69.2
62.6

34.5
16.3
17.2
18.8
21.7
19.2
19.1
21.6
26.1
31.1
38.1
42.4

9.4
6.5
7.1
7.4
7.2
6.8
6.1
6.3
7.3
8.1
9.0
9.2

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
M8.7
61.3
71.3
71.1
85.7
8104.2
116.5
129.9
139.8
144.8
148.2
158.0
169.9
159.6
159.9
160.8
163.1
164.1
164.2

110.5
116.7
123.6
137.3
153.7
172.9
198.2
* 213. S
231.3
258.2
283.3
294.7
«323.7
381.5
453.3
1505.0
501.3
542.7
621.9
712.8
629.9
633.0
641.7
652.1
664.1
672.3

165.0
166.5
167.9
168.9
169.4
169.9

679.7
684.9
691.9
700.7
710.5
712.8

Seasonally adjusted
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959 3
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969 5
1970
1971
1972
1973
_
1974
1975
1976...
1977
1978 "
1978: Jan..
Feb
Mar
Apr
May
__
June._ .
July P . _
Aug p
Sept *>
Oct p
Nov v
Dec p

113 0
118.7
124.7
130.2
139 1
143.1
153.1
157 6
161.6
166.4
181.2
188.7
197.4
212.8
231.2
250.2
272.3
300.1
* 316.1
352.0
390.2
401.7
435.5
485.7
558.0
633.4
691.1
721.8
785.1
870.6
967.3
881.2
887.7
894.1
909.0
921.7
932.2

41.5
42.0
51.1
56.5
62.8
66.2
69.1
80.6
88.1
91.5
95.6
110.5
116.7
123.6
137.3
153.7
172.9
198.2
«213.9
231.3
258.2
279.4
292.0
8 320.9
378.9
449.0
500.2
496.9
538.9
617.0
709.0
625.1
628.4
637.2
647.6
659.7
667.8

39.4
42.1
43.9
47.6
52.1
58.4
69.5
78.6
86.2
95.9
105.7
110.0
116.2
130.4
156.6
183.5
176.2
179.7
201.4
228.9
203.8
205.8
209.8
212.4
217.9
219.0

62.3
66.4
61.1
60.4
62.2
62.2
67.6
60.3
57.2
56.9
65.1
57.7
59.9
65.3
64.7
61.5
60.7
57.1
53.5
59.4
60.7
51.2
57.8
60.6
62.6
54.5
51.1
80.1
98.0
95.6
88.4
96.5
99.4
96.1
98.3
97.9
100.2

940.7
944.6
952.4
960.9
966.5
967.3

675.1
680.2
687.3
696.8
706.8
709.0

220.8
222.8
224.6
227.0
228.9
228.9

100.6
97.9
97.2
95.2
90.3
88.4

1 Data are for last Wednesday of month or year (except June 30 and December 31 call dates).
2 Adjusted to exclude all interbank loans beginning 1948 and domestic interbank loans only beginning January 1959.
* Beginning January 1959, loans and investments are reported gross, without valuation reserves deducted, rather than
net of valuation reserves, as in earlier periods.
* Effective June 1966, balances accumulated for payment of personal loans (then about $1.1 billion) are excluded from
loans at all commercial banks, and certain certificates of CCC and Export-Import Bank (then about $1 billion) are included
in.other securities rather than in loans.
« Beginning June 1969, data include all bank-premises subsidiaries and other significant majority-owned domestic
subsidiaries; earlier data include commercial banks only.
e Beginning June 1971, Farmers Home Administration insured notes (then about $0.7 billion) are classified as other
securities rather than as loans.
7
Beginning August 1974, reflects new definition of affiliates included and different group of reporting banks. Amount of
total loans sold was reduced by $0.1 billion.
Note.—In addition to footnoted changes affecting comparability of the data, comparability may also be affected by bank
mergers, liquidations, loan ^classifications, etc.
Source: Board of Governors of the Federal Reserve System.




252

TABLE B-61.—Liquid asset holdings of private domestic nonfinancial investors, 1952-78
[Average outstanding; billions of dollars, seasonally adjusted]
Currency and deposits
Time deposits
Year
and
month

Total
liquid
assets

Total

Currency i

Demand
deposits i

1952: Dec...
1953: Dec
1954: Dec

269.1
284.5
295.2

200.9
211.0
223.9

27.3
27.7
27.4

1955: Dec
1956: Dec
1957: Dec
1958: Dec...
1959: Dec

314 7
325.3
337 9
354.2
373.2

235.4
246.2
257.2
277.4
290 7

1960:
1961:
1962:
1963:
1964:

386.6
410.4
441.8
479.1
515.2

U.S. Treasury
securities

Negotiable
certifiShortcates
term
of demarket- posit s
able
securities *

Other
private
money
market
instruments •

Commercial
banksl

Nonbank
thrift
institutions 2

Savings
bonds3

91.6
92.8
96.2

39.1
41.9
45.1

42.8
48.6
55.2

49 2
49.3
49.9

18 4
23.1
20.1

07
1.1
1.2

27 8
28.2
28 3
28.6
28.9

98 5
99.5
97 9
102.2
104.2

46 9
49.0
54 6
61 8
64.7

62 3
69.5
76 4
84.8
92.9

50 2
50 1
48 3
47.8
46.1

27 7
27 4
30 6
27 6
35.5

1
1
1
1

305.7
326.2
352.2
382.2
414.6

29.0
29.6
30.6
32.5
34.3

104.6
106.3
106.5
109 7
114.3

69.9
77.0
88.8
98.6
108.8

102.3
113.4
126.4
141.4
157.3

45.7
46.5
46.9
48.1
49.0

32.4
32.0
33.4
35 0
33.0

2.7
5.3
90
11.6

2.8
3.1
4.0
48
6.9

559.4
587 0
638.1
696 6
722.5

451.2
474.4
521.1
565.6
582.9

36.3
38.3
40.4
43.4
46.1

119.4
121 9
130.5
141 2
145.2

125.1
136 9
156.2
174 3
176.8

170.4
177.3
194.0
206.7
214.9

49.6
50 2
51.1
51 8
51.7

35.8
37.7
34.7
40 9
53.2

15.1
14 3
18.7
21 7
8.3

7.6
10 4
12.4
16 6
26.4

769.7
852.5
967 2
1, 085.3
_._ 1,170.2

632.7
719.0
816.6
887.7
945.0

49.1
52.6
56 8
61.5
67.8

152.0
161.8
176 1
183.7
187.1

198.9
233.6
264 3
294.4
321.1

232.7
271.1
319 3
348.1
369.1

52.0
54.3
57.6
60.4
63.3

41.9
31.5
34 3
43.4
47.1

21 8
27.6
36 2
53.8
70.4

21.3
20.1
22 5
40.0
44.4

Dec
Dec
Dec
Dec
Dec. _

1965: Dec
1966: Dec
1967: Dec
1968: Dec
1969: D e c .

4
6
8
4
9

1970:
1971:
1972:
1973:
1974:

Dec
Dec
Dec
Dec
Dec

1975:
1976:
1977:
1978:

Dec
Dec
Dec _
Dec p .

____ 1, 290.6
1,424 6
1,591.0
1,757.0

1,055.3
1,195.2
1,328.3
1,451.8

73.7
80.7
88.6
97.5

192.4
200.0
213.9
226.4

360.6
417.3
459.2
501.6

428.6
497.3
566.6
626.4

67.2
71.9
76.6
80.6

66.3
66.5
77.6
82.7

58.4
43 2
52.3
68.5

43.3
47.8
56.3
73.4

1977:Jan
Feb
Mar..
Apr..
May..__
June

1,438.1
1,453 0
1, 463.9
1, 476 2
_ _ 1, 485.7
1,496.5

1, 206.9
1,217.9
1,228.3
1 240.3
1, 248.1
1,258.0

81.3
81 9
82.4
83 1
83.8
84.2

201.4
202 1
203.4
206 8
206.0
206.5

422.0
426 3
430.0
433 1
436.0
439.4

502.2
507 6
512.5
517 3
522.4
527.8

72.3
72 6
73.0
73 4
73.8
74.2

66.9
70 0
70.4
70 1
68.9
67.9

43.9
44 1
42.9
41 9
42.9
43.4

48.0
48 5
49.3
50.4
51.8
52.9

1,512.9
1, 527.0
1,542.7
1,561.2
1, 576.5
1,591.0

1,272.6
1, 284.0
1,297.8
1,311.2
1,319.2
1,328.3

85.1
85.5
86.3
87.1
87.7
88.6

208.4
208.5
210.3
213.0
212.1
213.9

444.8
447.8
451.4
454.6
457.6
459.2

534.3
542.1
549.8
556.5
561.7
566.6

74.7
75.1
75.3
75.8
76.2
76.6

69.2
71.7
73.3
75.5
77.1
77.6

43.2
43.7
44.0
46.1
50.0
52.3

53.2
52.5
52.1
52.6
54.0
56.3

.

1,607.7
1,619.2
1,631.0
1,647.4
1, 662.3
1,674.2

1,339.1
1, 345.6
1,352.8
1,363.5
1,371.5
1,381.6

89.4
90 1
90.7
91.2
92.1
92.8

216.6
216.0
216.3
221.5
222.1
223.1

462.4
465 5
468.1
469.6
472 5
476.5

570.7
574.0
577.7
581.2
584.7
589.2

77.0
77.4
77.8
78.2
78.6
78.9

79.5
80.1
79.8
80.7
81.6
81.7

53.4
54.8
56.5
58.6
62.3
61.7

58.7
61.4
64.1
66.4
68.3
70.4

July
Aug
Sept
Oct...
Nov....
Dec »>.._

1, 686. 2
1,699.2
1,720. 3
1,732.6
1,747. 5
1,757.0

1, 393.8
1,407.8
1 424.3
1, 436.7
1,445.2
1,451.8

93.3
94.0
95 2
96.0
96.7
97.5

224.5
226.2
228 4
228.5
226.3
226.4

481.3
486.1
491 0
495.7
500.5
501.6

594.7
601.6
609 6
616.5
621.6
626.4

79.3
79.5
79.8
80.1
80.4
80.6

80.1
80.7
83 6
83.1
82.1
82.7

61.7
59.6
60 7
60.2
66.9
68.5

71.3
71.6
72.0
72.5
73.0
73.4

__.

July
Aug.
Sept
Oct..
Nov.
Dec
1978: Jan.
Feb.
Mar.
Apr.
May
June

i Money stock components (see Table B-59) after deducting foreign holdings and holdings by domestic financial institutions. The three columns add to M2 held by domestic nonfinancial sectors.
* As published in money stock statistics.
3 Series E and H savings bonds, other savings bonds, and savings notes held by individuals.
* Short-term marketable U.S. Treasury securities excluding official, foreign, and financial institution holdings.
«Certificates over $100,000 at weekly reporting banks, except foreign holdings.
* Commercial paper, bankers' acceptances, Federal funds, security repurchase agreements, and money market mutual
fund shares held outside banks and other financial institutions.
Source: Board of Governors of the Federal Reserve System.

- 79 - 17
278-216 O


253

TABLE B-62.—Total funds raised in credit markets by nonfinancial sectors, 1970-78
[Billions of dollars]

U.S. Government
Treasury issues
Agency issues and mortgages
Foreign

1971

1972

1973

1974

1975

1976

1977

153.5

176.0

203.8

188.8

208.1

272.5

340.5

11.9

24.9

15.1

8.3

11.8

85.4

69.0

56.8

12.9
-1.0

26.0
-1.1

14.3
.8

7.9
.4

12.0
-.2

85.8
-.4

69.1
-.1

57.6
-.9

2.7

Total funds raised

1970
100.6

Item

5.2

4.0

6.2

15.3

13.2

20.7

12.3

2! 7

.0
5.2

-.4
4.4

-.2
6.4

-.2
15.6

.2
13.0

.3
20.4

.4
11.9

86.0

123.5

156.9

189.3

161.6

109.5

182.8

271.4

5.7
80.3

11.4
112.0

10.9
146.0

7.9
181.4

4.1
157.5

9.9
99.6

10.5
172.3

2.7
268.7

60.2

86.8

102.3

105.0

98.0

97.8

126.8

181.1

11.2
19.8
29.2
14.4
6.9
7.1

17.4
18.8
50.5
28.6

9.8
2.4

14.7
12.2
75.4
42.6
12.7
16.5
3.6

14.7
9.2
81.2
46.4
10.4
18.9
5.5

16.5
19.7
61.9
34.8
6.9
15.1
5.0

15.6
27.2
55.0
39.5
.0
11.0
4.6

19.0
22.8
85.0
63.7
1.8
13.4
6.1

29.2
21.0
131.0
96.4
7.4
18.4
8.8

20.1

25.3

43.7

76.4

59.6

1.8

45.5

87.6

5.9
6.8
2.6
4.8

13.1
8.1
-.4
4.4

17.1
18.9
.8
6.9

23.8
39.8
2.5
10.3

10.2
9.4
29.0 -14.0
6.6 - 2 . 6
13.7
9.0

23.6
3.5
4.0
14.4

35.0
30.6
2.9
19.0

86.0

123.5

156.9

189.3

161.6

109.5

182.8

271.4

11.3
49.8
2.3
6.8
40.7

17.7
45.2
60.6
4.5
11.6
44.5

14.5
64.3
78.1
5.8
14.1
58.3

13.2
80.9
95.2
9.7
12.8
72.7

15.5
49.2
97.0
7.9
7.4
81.8

13.2
48.6
47.7
8.7
2.0
37.0

18.5
89.9
74.4
11.0
5.2
58.2

25.9
139.6
106.0
14.7
12.6
78.7

100.6

153.5

176.0

203.8

188.8

208.1

272.5

340.5

63.4

85.9

116.4

140.7

116.5

137.8

166.2

197.7

64.2

92.8

105.0

90.6

75.7

96.8

128.8

144.3

8.9
55.3
38.7
16.6

13.7
79.1
39.5
39.6

21.2
83.8
38.3
45.4

14.4
76.1
47.7
28.5

8.9
66.7
45.0
21.8

12.0
84.8
25.3
59.4

16.6
112.2
43.7
68.5

24.2
120.1
51.0
69.1

-6.9

11.5

50.1

40.8

41.0

37.5

53.4

-7.3

-10.7

3.9

19.2

17.5

23.0

19.6

24.6

7.2
-1.6
-.9

11.0
-5.1
2.1

17.6
-5.7
4.3

33.6
-6.9
-4.2

24.6
-2.2

21.9
-3.6
.2

24.6
-3.4
3.3

36.0
-5.1
2.0

4.2
-6.9
11.1

23.1
-4.1
27.2

15.5
4.6
10.8

9.3
5.8
3.5

28.6
16.8
11.7

11.7
.9
10.7

23.0
5.1
17.9

53.8
11.6
42.2

2.8
2.8

3.2
2.8

-.3
1.8

-1.7
2.8

-4.6
9.7

2.9
15.1

3.2
8.9

1.1
11.8

21.9
5.6

24.4
14.2

26.1
16.4

30.6
22.0

33.2
5.4

39.6
1.1

48.2
23.0

57.0
19.1

Corporate equities
Debt instruments
Private domestic nonfinancial sectors
Corporate equities
Debt instruments
Debt capital instruments
State and local government obligations.
Corporate bonds
Mortgages
_
Home...
Multi-family residential
Commercial
Farm
Other debt instruments
Consumer credit.
Bank loans n.e.c.
Open-market paper
Other
By borrowing sector: Total
State and local governments
Households
_
Nonfinancial business._
Farm
Nonfarm noncorporate
Corporate
Total funds advanced to nonfinancial sectors

24.9

9.7

Financed directly or indirectly by:
Private domestic nonfinancial sectors
Deposits
Demand deposits and currency,.
Time and savings accounts
At commercial banks
At savings institutions
Credit market instruments, net.
U.S. Government securities
Private credit market instruments
_
Corporate equities.
Less security debt
Other sources:
Foreign funds
At banks
Direct..
Change in U.S. Government cash
balance
U.S. Government loans
Private insurance and pension reserves.
Other
See next page for continuation of table.




254

TABLE B-62.— Total funds raised in credit markets by nonfinancial sectors, 1970-78—Continued
[Billions of dollars]
1978 unadjusted
quarterly flows

1978 seasonally
adjusted annual rates

Item
III

III

80.2

Treasury securities.—
Agency issues and mortgages

87.7

380.4

362.4

355.7

2.6

15.1

66.1

51.5

59.3

21.1
-.3

U.S. Government

95.4

20.8

Total funds raised

2.7
-.1

15.6
-.6

67.5
-1.4

51.9
-.5

61.6
-2.3

2.1

4.3

.6

13.3

14.3

5.1

-.0

Corporate equities

-.3
2.5

-.0
.7

-1.3
14.6

K6

-.2
5.3

Debt instruments

57.2

72.0

301.0

296.6

291.3

.2
71.8

1.0
299.9

.7
295.9

.8
290.5

Foreign

.3
57.0

Private domestic nonfinancial sectors

4.4
88.6

36.9

.2
88.4
53.6

53.4

171.4

194.0

205.4

3.8
4.4
28.7
19.2
2.4
4.8
2.4

10.9
5.2
37.5
25.2
2.4
6.9
3.0

10.1
4.5
38.8
26.1
2.8
7.0
2.9

22.2
14.9
134.4
92.2
10.5
22.2
9.5

35.8
21.9
136.3
90.5
8.9
26.8
10.2

37.6
23.5
144.3
93.9
11.0
27.7
11.7

20.1

34.8

18.4

128.5

101.9

85.2

2.4
9.5
1.8
6.4

15.7
14.1
1.0
3.9

13.5
2.5
.8
1.7

38.0
61.3
5.3
23.9

51.6
32.9
5.1
12.3

43.4
24.2
5.6
12.1

57.2

88.6

72.0

301.0

296.6

291.3

3.5
24.8
29.0
2.7
3.7
22.6

7.9
43.6
37.1
6.9
5.0
25.2

9.6
37.4
25.0
4.4
4.2
16.4

20.7
142.7
137.6
11.7
23.6
102.2

23.4
152.8
120.4
19.8
17.8
82.8

35.4
142.1
113.9
17.7
16.0
80.2

80.2

95.4

87.7

380.4

362.4

355.7

40.8

51.1

40.8

217.3

204.5

211.6

17.4

40.3

21.5

118.4

140.6

143.4

-16.8
34.2
17.7
16.5

13.7
26.6
12.0
14.6

-2.5
24.1
7.6
16.4

11.9
106.5
54.2
52.3

25.2
115.4
57.9
57.5

21.9
121.5
48.5
73.0

23.4

10.8

19.3

99.0

63.9

68.2

13.7
1.1
.3

-.1
14.2
-2.0
1.3

11.9
9.8
-.9
1.4

44.7
55.3
.1
1.1

22.9
55.1
-8.8
5.3

37.9
43.5
-7.5
5.7

Foreign funds..
At banks
Direct

14.4
-2.1
16.4

-.1
.7

6.9
1.4
5.4

62.7
1.7
61.0

2.1
2.4
-.4

21.6
4.0
17.5

Change in U.S. Government cash balance...
U.S. Government loans
Private insurance and pension reserves
Other...

-6.4
5.6
13.3
12.4

11.4
3.4
16.2
13.4

4.8 -19.3
5.0
28.7
15.3
52.6
14.9
38.3

27.9
9.8
65.3
52.8

12.2
16.6
59.5
34.4

Corporate equities
Debt instruments
Debt capital instruments
State and local government obligations
Corporate bonds
Mortgages
Home
Multi-family
Commercial
Farm
Other debt instruments
Consumer credit
Bank loans n.e.c
Open-market paper
Other
By borrowing sector: Total
State and local governments
Households
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate

_

Total funds advanced to nonfinancial sectors..
Financed directly or indirectly by:
Private domestic nonfinancial sectors
Deposits
Demand deposits and currency
Time and savings accounts
At commercial banks
At savings institutions..
Credit market instruments, net
U.S. Government securities
Private credit market instruments
Corporate equities...
Less security debt
Other sources:

I

Source: Board of Governors of the Federal Reserve System.




255

TABLE B-63.—Federal Reserve Bank credit and member bank reserves, 1929-78
[Averages of daily figures; millions of dollars]
Reserve Bank credit outstanding
Year and month
Total

1929:
19331939:
1940:
1941:
19421943:
194419451946:
194719481949:
1950*
19511952:
19531954:
1955:
1956:
19571958:
1959'
I9601961:
1962:
19631964:
1965:
1966:
1967:
19681969:
1970:
19711972:
1973:
1974:
1975:
1976:
1977:
1978:

Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec.
Dec
Dec.
Dec .
Dec
Decp__

. .
. . .

.

..

Feb
Mar
Apr
May
June

..

.

Dec p

Member bank reserves

Member bank
borrowings
Total

Other

13
12
54
134

481
405
344
539
1,227
1,111

32
52
47
43
93
120

1,286
1,147
1,068
1,261

143
188

191
221

722
874

134

446
2,432
2,510
2,188
2,219
5,549
11,166
18 693
23, 708
23, 767
21,905
23,002
18, 287
20 345
23, 409
24, 400
25 639
24,917
24, 602
24, 765
23, 982
26,312
27, 036
27, 248
29,098
30, 546
33, 729
37,126
40, 885
43, 760
48, 891
52, 529
57, 500
61,688
69,158
71,094
79,701
86, 679
92,108
100, 328
107, 948
117, 344

801
95
3
3
5
4
90
265
334
157
224
134
118
142
657
1,593
441
246
839
688
710
557
906
87
149
304
327
243
454

127
62
558
874

108,195
106, 808
107, 790
109, 358
111,314
112,794

126, 958
125, 955
127,811
133, 273
129, 544
129,430

117,210
117,463
118,927
123, 361
119,352
117,344

Total

Required

Excess

Seasonal
396
142
99
114
180
482
658
654
702
822
729
842
607
1,119
1,380
1,306
1,027
1,154
1,412
1,703
1,494
1,543
1,493
1,725
1,970
2,368
2,554
2,504
2,514
2,547
2,139
3,316
5,514
4,699
4,990
4,708
4,643
6,585
7,416
7,242
7,876
11,212

1,643
2,669
2,612
2,305
2,404
6,035
11,914
19,612
24,744
24,746
22, 858
23,978
19,012
21 606
25, 446
27, 299
27,107
26,317
26, 853
27,156
26,186
28,412
29, 435
29, 060
31,217
33,218
36,610
39, 873
43, 853
46, 864
51,268
56,610
64,100
66,708
74, 255
76,851
85,642
93, 967
99, 651
107, 632
116, 382
129, 430
118,598
115,227
114,848
116,784
119,603
121,992

. . . .

1978: Jan

July
Aug
Sept
Oct
Nov

U.S.
Government securities

557
238
765
1,086
321
107
1,049
1,298

703

41
32

185

2,395
2,588
11,473
14, 049
12,812
13,152
12,749
14,168
16,027
16,517
17,261
19,990
16,291
17,391
20,310
21,180
19,920
19, 279

48
1766
5,011
6 646
3,390
2 376
1,048
1 284
1 491
900
986
797
803
1 027
'826
723
693
703

19, 535
19,420
18,899
2 18,932
19,283
20,118
20, 040
20, 746
21,609
22, 719
23, 830
25, 260
27,221
28, 031
29, 265
31,329
3
31,353
3 35,068
3 36, 941
* 34, 989
35,136
36,471
41,669

2,347
il,822
6,462
7,403
9,422
10,776
11,701
12 884
14, 536
15,617
16,275
19,193
15,488
16,364
19,484
20, 457
19,227
18, 576
18,646
18, 883
18,843
18, 383
18,450
18,514
19,550
19,468
20, 210
21,198
22, 267
23, 438
24,915
26, 766
27, 774
28,993
31,164
31,134
34,806
36, 602
34, 727
34,964
36, 297
41, 487

9,922
8,014
6,714
6,887
7,062
8,087

38,185
36, 738
36, 231
36, 880
37,119
37, 262

37, 880
36. 605
35, 925
36, 816
36, 867
37,125

305
133
306
64
252
137

8,462
7,345
7,816
8,651
9,470
11,212

38,189
37, 666
37, 689
38, 434
39, 728
41, 669

38, 049
37, 404
37, 614
38, 222
39, 423
41,487

140
262
75

19,240

594
652
577
516
482
769
568
572
536
411
452
392
345
455

257
272
165
3 219
3 262
3 339
*262
172
174

182

212
305
182

1 Data are for licensed banks only.
Beginning December 1959, total reserves held include vault cash allowed.
3 Beginning November 1972, includes $450 million of reserve deficiencies on which Federal Reserve Banks were allowed
to waive penalties for a transition period in connection with bank adaptation to Regulation J as amended effective November 9, 1972. Beginning 1973, allowable deficiencies included are (beginning with first statement week of quarter): first
quarter, $279 million; second quarter, $173 million; third quarter, $112 million; fourth quarter, $84 million. Beginning
1974, allowable deficiencies included are: first quarter, $67 million and second quarter, $58 million. Transition period
ended after second quarter 1974.
4
Effective November 1975, includes reserve deficiencies on which penalties are waived over a 24-mcnth period when a
nonmember bank merges into an existing member bank, or when a nonmember bank joins the Federal Reserve System
2

Source: Board of Governors of the Federal Reserve System.




256

TABLE B-64.—Aggregate reserves and deposits of member banks, 1959-78
[Averages of daily figures; billions of dollars, seasonally adjusted)
Member bank reserves t

Member bank deposits subject to reserve
requirements2

Year and month
Total

Nnn

borrowed

Required

Total

Time
and
savings

Demand
Private

U.S. Government

1959* Dec

18.63

17.68

18.12

158.2

54.3

99.0

4.8

I9601961'
196219631964-

Dec
Dec
Dec
Dec
Dec

18.92
19.75
19.66
20.31
21.19

18.84
19.61
19.40
19.98
20.92

18.17
19.16
19.08
19.82
20.78

162.5
175.5
189.0
203.2
218.7

58.8
67.7
79.9
92.1
103.7

99 1
102.9
103.3
105.9
109.1

46
49
57
5.2
5.9

1965196619671968:
1969-

Dec
Dec
Dec
Dec
Dec

24.76
27.06
27.99

22.18
23.28

21.74
22.75
24.54
26.31
26.87

21.76
22.94
24.39
26.63
27.70

238.3
246.3
275.7
299.8
287.8

120.7
128.7
148.9
164.5
150.5

112.8
113.9
121.3
130.5
132.1

4.9
37
55
4.9
52

1970*
197119721973:
1974"

Dec
Dec
Dec
Dec
Dec

29.11
31.17
31.34
34.91
36.57

28.78
31.04
30.29
33.61
35.84

28.86
30.98
31.06
34.61
36.31

321.1
360.2
402.0
442.2
486.1

178.8
210.5
241.6
279.2
322.1

136.1
144.0
154.4
158.1
160.6

6 2
58
6 1
4.9
3.3

19751
19761977:
1978"

Dec
Dec
Dec
Dec »

34.68
34.93
36.14
41.54

34.55
34.88
35.57
40.67

34.42
34.66
35.95
41.27

504.6
529.0
569.1
617.3

337 1
354.3
387.0
429.7

164 5
171.5
178.5
185.2

29
32
3.6
2.4

34.56
34.54
34.54
34.76
34.80
34.82

34.49
34.46
34.43
34.69
34.59
34.55

34.29
34.34
34.32
34.57
34.59
34.67

532.5
533.4
536.1
538.4
538.7
543.4

357.3
360.1
361.3
361.4
364.1
366.3

172.3
170.5
171 7
173.3
172.4
173.8

2.9
2 9
31
37
23
3.'2

35.27
35.50
35.52
35.81
35.96
36.14

34.95
34 44
34.89
34.50
35.10
35.57

35.00
35.30
35.31
35.60
35.71
35.95

547.2
550.5
553.0
558.5
564.4
569.1

368.9
370 8
373.0
377.1
383.5
387.0

175.3
176 5
176.7
178.3
178.0
178.5

3.0
32
3.3
31
3.0
3.6

36.61
36.93
36 67
36 95
37.26
37.73

36 12
36.52
36 34
36 39
36.05
36.63

36 34
36.69
36 47
36 80
37.04
37.55

575.8
577.9
582 1
586 0
592.0
595.6

390 5
395.4
399 2
400 7
406.0
407.1

182 2
179.5
179 5
182 0
183.4
184.6

31
3.0
3 4
3 3
2.6
3.9

38.19
37 91
38.17
38.43
39.73
41.54

36.88
36 77
37.11
37.15
39.03
40.67

38.00
37 74
37.97
38.26
39.50
41.27

600.3
601 1
606.4
608.1
617.3
617.3

410.5
411 4
416.0
417.5
427.9
429.7

186.1
186 5
186.3
187.2
187.2
185.2

3.7
33
4.1
3.5
2.3
2.4

-

1977: Jan
Feb

Mar
Apr
May
June
July
Aug
Sept
Oct
Nov

Dec
1978: Jan
Feb

Mr
a

Apr

May
June
July

Aug

Sept
Oct . . .

Nov
Dec*

1 Series reflects actual reserve requirement percentages with no adjustment to eliminate the effect of changes in
Regulations D and M.
2 Includes total time and savings deposits and net demand deposits as defined by Regulation D. Private demand deposits
include all demand deposits except those due to the U.S. Government, less cash items in process of collection and demand
balances due from domestic commercial banks.
Source: Board of Governors of the Federal Reserve System.




257

TABLE B-65.—Bond yields and interest rates, 1929-78
[Percent per annum]
U.S. Treasury securities

Year or
month

Bills
(new
issues)^
3month

6month

Constant
maturities 2
3
years

10
years

Corporate
bonds
(Moody's)

/aa

Baa

HighNewPrime
grade
home
comPrime
munic- mortmerrate
ipal
cial
gage
charged
bonds
by 4
yields paper,
(Stand4-6
ard & (FHLBB) months banks
(3)
Poor's)

Discount
rate,
Federal Federal
Reserve funds
rates
Bank
of New
York*

4.73

5.90

4.27

5.85

5 16

1933

0.515

4.49

7.76

4.71

1.73

2.56

1929

1939

.023

3.01

4.96

2.76

.59

1.00

1940
1941
1942
1943
1944

.014
.103
.326
.373
.375

2.84
2.77
2.83
2.73
2.72

4.75
4.33
4.28
3.91
3.61

2.50
2.10
2.36
2.06
1.86

.56
.53
.66
.69
.73

1.00
1 00
«1 00
e 1.00
fl
l 00

1945
1946
1947
1948
1949

.375
.375
.594
1.040
1.102

2.62
2.53
2.61
2.82
2.66

3.29
3.05
3.24
3.47
3.42

1.67
1.64
2.01
2.40
2.21

.75
.81
1.03
1.44
1.49

2.00

6 1.00
8
1 00
1 00
1 34
1.50

1950
1951
1952
1953
1954

1.218
1.552
1.766
1.931
.953

2.47
1.63

2.85
2.40

2.62
2.86
2.96
3.20
2.90

3.24
3.41
3.52
3.74
3.51

1.98
2.00
2.19
2.72
2.37

1.45
2.16
2.33
2.52
1.58

2.07
2.56
3.00
3.17
3.05

1.59
1.75
1.75
1.99
1.60

1955
1956
1957
1958
1959

1.753
2.658
3.267
1.839
3.405

3.832

2.47
3.19
3.98
2.84
4.46

2.82
3.18
3.65
3.32
4.33

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

2.18
3.31
3.81
2.46
3.97

3.16
3.77
4.20
3.83
4.48

1.89
2.77
3.12
2.15
3.36

1.78
2.73
3.11
1.57
3.30

1960 . . . .
1961
1962 . . . .
1963
1964

2.928
2.378
2.778
3.157
3.549

3.247
2.605
2.908
3.253
3.686

3.98
3.54
3.47
3.67
4.03

4.12
3.88
3.95
4.00
4.19

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

5.89
5.82

3.85
2.97
3.26
3.55
3.97

4.82
4.50
4.50
4.50
4.50

3.53
3.00
3.00
3.23
3.55

3.22
1.96
2.68
3.18
3.50

1965
1966
1967
1968
1969

3.954
4.881
4.321
5.339
6.677

4.055
5.082
4.630
5.470
6.853

4.22
5.23
5.03
5.68
7.02

4.28
4.92
5.07
5.65
6.67

4.49
5.13
5.51
6.18
7.03

4.87
5.67
6.23
6.94
7.81

3.27
3.82
3.98
4.51
5.81

5.81
6.25
6.46
6.97
7.80

4.38
5.55
5.10
5.90
7.83

4.54
5.63
5.61
6.30
7.96

4.04
4.50
4.19
5.17
5.87

4.07
5.11
4.22
5.66
8.22

1970
1971
1972
1973
1974

6.458
4.348
4.071
7.041
7.886

6.562
4.511
4.466
7.178
7.926

7.29
5.65
5.72
6.95
7.82

7.35
6.16
6.21
6.84
7.56

8.04
7.39
7.21
7.44
8.57

9.11
8.56
8.16
8.24
9.50

6.51
5.70
5.27
5.18
6.09

8.45
7.74
7.60
7.95
8.92

7.72
5.11
4.69
8.15
9.87

7.91
5.72
5.25
8.03
10.81

5.95
4.88
4.50
6.45
7.83

7.17
4.67
4.44
8.74
10.51

1975
1976
1977
1978

5.838
4.989
5.265
7.221

6.122
5.266
5.510
7.572

7.49
6.77
6.69
8.29

7.99
7.61
7.42
8.41

8.83 10.61
8.43 9.75
8.02 8.97
8.73 9.49

6.89
6.49
5.56
5.90

9.01
8.99
9.01
9.54

6.33
5.35
5.60
7.99

7.86
6.84
6.83
9.06

6.25
5.50
5.46
7.46

5.82
5.05
5.54
7.94

See next page for continuation of table.




258

TABLE B-65.—Bond yields and interest rates,

7929-78—Continued

[Percent per annum]
U.S. Treasury securities
Year or
month

Bills
(new
issues)1

Constant
maturities 2

Corporate
bonds
(Moody's)

Aaa

Baa

Highgrade
municipal
bonds
(Standard &
Poor's)

Newhome
mortgage
yields
FHLBB)

Prime
comPrime
merrate
cial
charged
paper,
by
4-6
banks*
months

Discount
rate,
Federal
Reserve
Bank
of New
York*

Federal
funds
rate «

6month

3
years

10
years

5.238
5.144
5.488
5.201
5.600
5.784

6.99
7.06
7.13
6.84
7.27
7.32

7.74
7.79
7.73
7.56
7.90
7.86

8.60 0.41
8.55 0.24
8.52 10.12
8.40 9.94
8.58 9.86
8.62 9.89

6.80
6.91
6.86
6.62
6.87
6.85

8.99
8.93
8.93
8.92
8.97
8.89

5.27
5.23
5.37
5.23
5.54
5.94

5M
WAT &A
WAT 6% 53^- 5X6

May...
June..

4.961
4.852
5.047
4.878
5.185
5.443

4.87
4.77
4.84
4.82
5.29
5.48

July...
Aug...
Sept...
Oct....
Nov...
Dec . .

5.278
5.153
5.075
4.930
4.810
4.355

5.597
5.416
5.311
5.073
4.944
4.513

7.12
6.86
6.66
6.24
6.09
5.68

7.83
7.77
7.59
7.41
7.29
6.87

8.56
8.45
8.38
8.32
8.25
7.98

9.82
9.64
9.40
9.29
9.23
9.12

6.64
6.28
6.20
6.06
6.05
5.69

8.97
9.02
9.08
9.07
9.05
9.10

5.67
5.47
5.45
5.22
5.05
4.70

7lA~ 7lA WT-VA
7M- 7
7 -7
7 _ fi3/ 51^-51^
5M-5K

5.31
5.29
5.25
5.03
4.95
4.65

1977:
Jan
Feb...
Mar...
Apr...
May...
June..

4.597
4.662
4.613
4.540
4.942
5.004

4.783
4.896
4.883
4.790
5.193
5.198

6.22
6.44
6.47
6.31
6.55
6.39

7.21
7.39
7.46
7.37
7.46
7.28

7.96
8.04
8.10
8.04
8.05
7.95

9.08
9.12
9.12
9.07
9.01
8.91

5.70
5.75
5.76
5.61
5.64
5.53

9.05
8.99
8.95
8.94
8.96
8.98

4.74
4.82
4.87
4.87
5.35
5.49

5M-5K
534-534
634- 6 ^ 534-5 J4
634- 6J^ 534-534
6M- 6% 534-534
5^-534

4.61
4.68
4.69
4.73
5.35
5.39

July...
Aug...
Sept...
Oct....
Nov..
Dec...

5.146
5.500
5.770
6.188
6.160
6.063

5.351
5.810
5.991
6.410
6.433
6.377

6.51
6.79
6.84
7.19
7.22
7.30

7.33
7.40
7.34
7.52
7.58
7.69

7.94
7.98
7.92
8.04
8.08
8.19

8.87
8.82
8.80
8.89
8.95
8.99

5.50
5.46
5.37
5.53
5.38
5.48

9.00
9.02
9.04
9.07
9.07
9.09

5.41
5.84
6.17
6.55
6.59
6.64

6M- 6%
6%- 7
7l - 7H
7 A- 7%
7*A-7%

53^-534
534-5%

5.42
5.90
6.14
6.47
6.51
6.56

1978:
Jan....
Feb..__
Mar...
Apr..
May...
June..

6.448
6.457
6.319
6.306
6.430
6.707

6.685
6.740
6.644
6.700
7.019
7.200

7.61
7.67
7.70
7.85
8.07
8.30

7.96
8.03
8.04
8.15
8.35
8.46

8.41
8.47
8.47
8.56
8.69
8.76

9.17
9.20
9.22
9.32
9.49
9.60

5.60
5.51
5.49
5.71
5.97
6.13

9.15
9.18
9.26
9.30
9.37
9.46

6.79
6.80
6.80
6.86
7.11
7.63

IVAT 8

6 -63^
614-63^
6j^-63>^

July...
Aug..
Sept..
Oct.._
Nov..
Dec.

7.074
7.036
7.836
8.132
8.787
9.122

7.471
7.363
7.948
8.493
9.204
9.397

8.54
8.33
8.41
8.62
9.04
9.33

8.64
8.41
8.42
8.64
8.81
9.01

8.88
8.69
8.69
8.89
9.03
9.16

9.60
9.48
9.42
9.59
9.83
9.94

6.18
5.98
5.93
5.95
6.03
6.33

9.57
9.70
9.73
9.83
9.87
10.02

3month
1976:
Jan
Feb...
Mar...
ADr___

6/4— 6% 53^-53^
6/4— 6%
6%— 6% 51^-51^
7 - 7 3 4 5^-5K

6^-6M

53/_g
6 -6
6 -6
73X_ 73/

8 -8
8 - 8
8 - 8

8 _ 8i/£ 6^-7
7 -7
8^-9

7.91 9 - 9
7.90 9 - 9 ^
8.44 934- 9%
9.03 9/4-1034
10.23 103^-113^
10.43 HJ/2-11%

7 -7H
7H-7H
7%-Z
8 -&A
9 !•£—91.^

6.70
6.78
6.79
6.89
7.36
7.60
7.81
8.04
8.45
8.96
9.76
10.03

1

Rate on new issues within period.
Yields on the more actively traded issues adjusted to constant maturities by the Treasury Department.
Effective rate (in the primary market) on conventional mortgages, reflecting fees and charges as well as contract rate
and assumed, on the average, repayment at end of 10 years. Rates beginning January 1973 not strictly comparable with
prior rates.
4
Average effective rate for the year; opening and closing rate for the month.
5
Based on seven-day averages of daily effective rates for weeks ending Wednesday. Since July 19, 1975, the daily
effective rate is an average of the rates on a given day weighted by the volume of transactions at these rates. Prior to
that date, the daily effective rate was the rate considered most representative of the day's transactions, usually the one
at which most transactions occurred.
e 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.
2

3

Sources: Department of the Treasury, Board of Governors of the Federal Reserve System, Federal Home Loan Bank
Board (FHLBB), Moody's Investors Service, and Standard & Poor's Corporation.




259

TABLE B-66.—Consumer installment credit, 1970-78
[Millions of dollars; monthly data seasonally adjusted]
Installment credit
extended

Year or month

Installment credit
iquidated

Net change in amount
outstandin g

Total *

Automobile

Revolving

Total i

-Automobile

Revolving

Total i

Automobile

1970
1971
1972
1973
1974

115,132
138,046
151, 749
173,035
172, 765

30,857
36, 706
43, 702
49,606
46, 514

8,689
21,862
24,659
28,702
33, 213

110,352
127, 789
136, 787
152,817
163,276

31,414
32,512
38,081
43,696
46,019

7,278
20,818
23,485
26,699
31, 243

4,780
10, 257
14,962
20, 218
9,489

-557
4,194
5,621
5,910

495

1,411
1,044
1,174
2,003
1,970

1975
1976
1977
1978 2

180, 441
211,028
254,071
298, 700

52,420 36,956
63, 743 43,934
75,641 86, 756
88, 900 104, 993

172,676
189, 381
218,793
254, 300

49,444
53, 278
60,437
69, 700

35,616
41, 764
80,508
97, 515

7,765
21,647
35, 278
44, 400

2,976
10,465
15, 204
19, 200

1,340
2,170
6,248
7,478

Revolving

19, 379
19, 927
20,802
20,953
20, 991
20, 764

5,797
6,006
6,261
6,182
6,184
6,212

6,395
6,724
6,929
7,124
7,340
7,199

17,272
17, 566
17, 434
17,864
18, 091
18, 200

4,795
4,855
4,885
4,954
4,937
5,089

6,412
6,429
6,275
6,503
6,717
6,690

2,107
2,361
3,368
3,089
2,900
2,564

1,002
1,151
1,376
1,228
1,247
1,123

-17
295
654
621
623
509

20,
21,
21,
22,
22,
22,

796
408
528
273
487
832

6,293
6,332
6,413
6,503
6,719
6,889

7,010
7,275
7,333
7,666
7,716
7,985

18, 389
18, 473
18,683
19,066
18, 891
19, 252

5,135
5,094
5,082
5,274
5,179
5,252

6,730
6,795
6,865
6,999
7,024
7,226

2,407
2,935
2,845
3,207
3,596
3,579

1,158
1,238
1,331
1,229
1,540
1,637

280
480
468
667
692
758

1978: Jan.
Feb..
Mar.
Apr..
May.
June.

21,983
22, 758
23,925
24, 682
25,104
25, 565

6,541
6,730
7,043
7,434
7,592
7,595

7,960
8,147
8,398
8,523
8,563
9,062

19, 546
19, 896
19, 849
20, 576
20, 824
21,358

5,215
5,397
5,409
5,622
5,715
5,953

7,545
7,698
7,566
7,840
7,919
8,107

2,437
2,862
4,076
4,106
4,280
4,207

1,326
1,333
1,634
1,812
1,877
1,642

415
449
832
683
644
955

July.
Aug.
Sept.
Oct..
Nov..
Dec 2.

25, 022
25, 669
25, 537
25, 758
26,214
26, 033

7,652
7,744
7,542
7,501
7,787
7,725

8,700
9,028
9,006
8,846
9,176
9,112

21, 556
22, 037
21,857
22, 384
22,115
22,308

5,941
6,140
6,010
6,126
6,032
6,125

8,100
8,291
8,384
8,500
8,511
8,582

3,466
3,632
3,680
3,374
4,099
3,725

1,711
1,604
1,532
1,375
1,755
1,600

600
737
622
346
665
530

1977:Jan..
Feb..
Mar..
Apr..
May.
June.
July..
Aug .
Sept.
Oct..
Nov..
Dec.

1

Includes other categories not shown separately.
2 Preliminary; December by Council of Economic Advisers.
Note: Consumer installment credit consists of short- and intermediate-term credit extended through regular business
channels to finance the purchase of goods and services for personal consumption, or to refinance debts incurred for such
purposes, and scheduled to be repaid in two or more installments. Mortgage credit generally is excluded.
Source: Board of Governors of the Federal Reserve System (except as noted).




260

TABLE B-67.—Mortgage debt outstanding by type of property and of financing, 1939-78
[Billions of dollars]
Nonfarm properties

Nonfarm properties by type of mortgage
Government underwritten

End of year
or quarter

All
properties

Farm
properties

Total

1- to 4family
houses

Multi- Comfamily mercial
prop- prop- Total 2
erties erties i

Conventional 3

1- to 4-family houses

Total

FHA
insured

VA
guaranteed

Total

1- to 4family
houses

1939

35.5

6.6

28.9

16.3

5.6

7.0

1.8

1.8

1.8

27.1

14.5

1940
1941
1942
1943
1944

36 5
37.6
36.7
35 3
34.7

65
6.4
6.0
5.4
4.9

30.0
31.2
30.8
29.9
29.7

17.4
18.4
18.2
17.8
17.9

5.7
5.9
5.8
5.8
5.6

6.9
7.0
6.7
6.3
6.2

2.3
3.0
3.7
4.1
4.2

2.3
3.0
3.7
4.1
4.2

2.3
3.0
3.7
4.1
4.2

27.7
28.2
27.1
25.8
25.5

15.1
15.4
14.5
13.7
13.7

1945
1946
1947
1948
1949

35.5
41.8
48.9
56.2
62.7

4.8
4.9
5.1
5.3
5.6

30.8
36.9
43.9
50.9
57.1

18.6
23.0
28.2
33.3
37.6

5.7
6.1
6.6
7.5
8.6

6.4
7.7
9.1
10.2
10.8

4.3
6.3
9.8
13.6
17.1

4.3
6.1
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

26.5
30.6
34.1
37.3
40.0

14.3
16.9
18.9
20.8
22.6

72.8
82.3
91.4
101.3
113.7

6.1
6.7
7.2
7.7
8.2

66.7
75.6
84.2
93.6
105.4

45.2
51.7
58.5
66.1
75.7

10.1
11.5
12.3
12.9
13.5

11.5
12.5
13.4
14.5
16.3

22.1
26.6
29.3
32.1
36.2

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

44.6
49.0
54.9
61.5
69.2

26.3
28.8
33.1
38.0
43.6

129.9
144.5
156.5
171.8
190.8

9.0
9.8
10.4
11.1
12.1

120.9
134.6
146.1
160.7
178.7

88.2
99.0
107.6
117.7
130.9

14.3
14.9
15.3
16.8
18.7

18.3
20.7
23.2
26.1
29.2

42.9
47.8
51.6
55.1
59.3

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

78.0
86.8
94.6
105.5
119.4

49.3
55.1
60.4
67.6
77.0

207.5
228.0
251.4
278.5
305.9

12.8
13.9
15.2
16.8
18.9

194.7
214.1
236.2
261.7
287.0

141.9
154.7
169.3
186.4
203.4

20.3
23.0
25.8
29.0
33.6

32.4
36.4
41.1
46.2
50.0

62.3
65.6
69.4
73.4
77.2

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

132.3
148.5
166.9
188.2
209.8

85.5
95.6
107.1
120.5
134.1

1965
1966
1967
1968.
1969

333.3
356.5
381.2
410,9
441.4

21.2
23.1
25.1
27.4
29.2

312.1
333.4
356.1
383.5
412.2

220.5
232.9
247.3
264.8
282.8

37.2
40.3
43.9
47.3
52.3

54.5
60.1
64.8
71.4
77.1

81.2
84.1
88.2
93.4
100.2

73.1
76.1
79.9
84.4
90.2

42.0
44.8
47.4
50.6
54.5

31.1
31.3
32.5
33.8
35.7

231.0
249.3
267.9
290.1
312.0

147.4
156.9
167.4
180.4
192.7

1970.
1971
1972
1973.
1974.

474.2
526.5
603.4
682.3
742.5

30.3
32.2
35.8
41.3
46.3

443.8
494.3
567.7
641.1
696.2

298.1
328.3
372.2
416.2
449.4

60.1
70.1
82.8
93.1
100.0

85.6
95.9
112.7
131.7
146.9

109.2
120.7
131.1
135.0
140.2

97.3
105.2
113.0
116.2
121.3

59.9
65.7
68.2
66.2
65.1

37.3
39.5
44.7
50.0
56.2

334.6
373.5
436.5
506.0
556.0

200.8
223.1
259.2
300.0
328.1

801.5 50.9
889.2 57.0
1 023 4 65.7

750.7
832.2
957.7

490.8
556.5
657.2

100.6
104.5
111.5

159.3
171.2
189.0

147.0
154.1
161.7

127.7
133.5
141.6

66.1
66.5
68.0

61.6
67.0
73.6

603.7
678.0
796.0

363.0
422.9
515.6

1950
1951
1952.
1953
1954.

.
. .

1955
1956
1957
1958.
1959
1960
1961
1962
1963
1964.

.

1975
1976
1977

818.4
840.5
865.6
889.2

52.2
53.8
55.5
57.0

766.2
786.7
810.2
832.2

503.3
519.8
538.8
556.5

101.8
102.9
103.9
104.5

161.2
164.0
167.5
171.2

148.3
150.5
150.8
154.1

129.1
131.2
131.2
133.5

66.2
67.1
66.4
66.5

62.9
64.1
64.8
67.0

617.9
636.2
659.4
678.0

374.2
388.6
407.6
422.9

1977:1
912.2
II
950.5
I I I . . . . 988.5
I V . . . . 1,023.4

59.2
61.9
64.0
65.7

853.0
888.6
924.5
957.7

573.7
603.2
632.7
657.2

105.3
107.6
109.5
111.5

174.0
177.8
182.3
189.0

155.7
158.7
161.6
161.7

134.9
137.4
139.9
141.6

66.9
67.8
67.9
68.0

68.0
69.6
71.9
73.6

697.3
730.0
763.0
796.0

438.7
465.9
492.8
515.6

1,050.2
1978:1
1,091.5
II
I I I . . - . 1,131.9

982.1
68.1
70.9 1,020.6
73.8 1,058.1

674.8
704.5
731.7

113.9
116.5
119.2

193.4
199.6
207.1

165.3
167.4
174.7

144.7
146.7
150.7

68.6
69.2
69.9

76.1
77.6
80.8

816.9
853.2
883.4

530.1
557.8
581.0

1976: 1
II
III.—
IV..._

» Includes negligible amount of farm loans held by savings and loan associations.
Includes FHA insured multifamily properties, not shown separately.
3 Derived figures. Total includes multifamily and commercial properties, not shown separately.
Source: Board of Governors of the Federal Reserve System, estimated and compiled from data supplied by various
Government and private organizations.
2




261

TABLE B-68.—Mortgage debt outstanding by holder, 1939-78
[Billions of dollars]
Major financial institutions
End of year
or quarter

Total
Total

Savings
and
loan
associations

Other holders

Mutual
savings
banks

Commercial
banks*

Life
Federal
insurance
and
comrelated
panies
agencies2

Individuals
and
others

1939

35.5

18.6

3.8

4.8

4.3

5.7

5.0

11.9

1940
1941
1942
1943
1944

36.5
37.6
36 7
35.3
34.7

19.5
20.7
20.7
20.2
20.2

4.1
4.6
4.6
4.6
4.8

4.9
4.8
4.6
4.4
4.3

4.6
4.9
4.7
4.5
4.4

6.0
6.4
6.7
6.7
6.7

4.9
4.7
4.3
3.6
3.0

12.0
12.2
11.7
11.5
11.5

1945
1946
1947
1948
1949

35.5
41 8
48 9
56.2
62.7

21.0
26 0
31.8
37.8
42.9

5.4
7.1
8.9
10.3
11.6

4.2
4.4
4.9
5.8
6.7

4.8
7.2
9.4
10.9
11.6

6.6
72
8.7
10.8
12.9

2.4
2.0
1.8
1.8
2.3

12-1
13.8
15.3
16.6
17.5

1950
1951
1952
1953
1954

72.8
82 3
91 4
101.3
113.7

51.7
59 5
66 9
75.1
85.7

13.7
15 6
18.4
22.0
26.1

8.3
99
11.4
12.9
15.0

13.7
14 7
15.9
16.9
18.6

16.1
19.3
21.3
23.3
26.0

2.8
3.5
4.1
4.6
4.8

18.4
19.3
20.4
21.7
23.2

1955
1956
1957
1958
1959

129.9
144 5
156 5
171 8
190.8

99.3
111 2
119 7
131.5
145.5

31.4
35 7
40 0
45.6
53.1

17.5
19 7
21.2
23.3
25.0

21.0
22 7
23.3
25.5
28.1

29.4
33 0
35.2
37.1
39.2

5.3
6.2
7.7
8.0
10.2

25.3
27.1
29.1
32.3
35.1

I960
1961
1962
1963
1964

207.5
228 0
251.4
278 5
305.9

157.6
172 6
192.5
217 1
241.0

60.1
68 8
78.8
90 9
101.3

26.9
29 1
32.3
36 2
40.6

28.8
30 4
34.5
39 4
44.0

41.8
44 2
46.9
50 5
55.2

11.5
12.2
12.6
11.8
12.2

38.4
43.1
46.3
49.5
52.7

1965
1966
1967
1968
1969

333 3
356.5
381.2
410.9
441.4

264 6
280.8
298.8
319.9
339.1

110 3
114 4
121.8
130.8
140.2

44 6
47 3
50.5
53.5
56.1

49 7
54.4
59.0
65.7
70.7

60.0
64.6
67.5
70.0
72.0

13.5
17.5
20.9
25.1
31.1

55.2
58.2
61.4
65.9
71.2

1970
1971
1972
1973
1974

474.2
526 5
603.4
682.3
742.5

355 9
394 2
450.0
505.4
542.6

150 3
174 3
206.2
231.7
249.3

57.9
62.0
67.6
73.2
74.9

73.3
82.5
99.3
119.1
132.1

74.4
75.5
76.9
81.4
86.2

38.3
46.4
54.6
64.8
82.1

79.9
85.9
98.9
112.2
117.8

1975
1976
1977

801.5
889.2
1, 023.4

581.2
647.5
745.0

278.6
323.0
381.2

77.2
81.6
88.1

136.2
151.3
179.0

89.2
91.6
96.8

101.0
116.6
140.3

119.3
125.1
138.1

818.4
840.5
865.6
889.2

593.2
611.5
630.0
647.5

286.3
299.2
311.8
323.0

77.9
78.8
80.2
81.6

139.6
143.7
147.8
151.3

89.4
89.7
90.2
91.6

105.0
107.3
112.3
116.6

120.2
121.8
123.4
125.1

1977: 1
_
II
III .
IV

912.2
950.5
988.5
1,023.4

662.8
690.5
717.9
745.0

333.6
350.6
366.6
381.2

82.3
84.1
86.1
88.1

155.2
163.0
171.2
179.0

91.8
92.9
S4.1
96.8

121.5
127.1
133.7
140.3

127.9
132.9
136.9
138.1

1978: 1
----||
III" . - „
-

1,050.2
1,091.5
1,131.9

764.6
794.0
822.2

392.4
408.0
421.0

89.8
91.5
93.4

184.4
194.5
205.4

98.0
100.0
102.4

146.1
152.6
160.8

139.5
144.9
148.9

1976: 1
II
III
IV

1 Includes loans held by nondeposit trust companies, but not by bank trust departments.
2 Includes former Federal National Mortgage Association (FNMA) and new Government National Mortgage Association
(GNMA), as well as Federal Housing Administration, Veterans Administration, Public Housing Administration, Farmers
Home Administration, and in earlier years Reconstruction Finance Corporation, Homeowners Loan Corporation, and
Federal Farm Mortgage Corporation. Also includes GNMA Pools and U.S.-sponsored agencies such as new FNMA, Federal
Land Banks, and Federal Home Loan Mortgage Corporation. Other U.S. agencies (amounts small or current separate data
not readily available) included with "individuals and others."
Source- Board of Governors of the Federal Reserve System, based on data from various Government and private
organizations.




262

GOVERNMENT FINANCE
TABLE B-69.—Federal budget receipts and outlays, fiscal years 1929-80
[Millions of dollars)

Receipts

Fiscal year

Outlays

Surplus or
deficit (-)

1929

3,862

3,127

734

1933

1,997

4,598

-2,602

1939

4,979

8,841

-3,862

1940
1941
1942
1943
1944

6,361
8,621
14 350
23,649
44,276

9,456
13,634
35 114
78, 533
91,280

-3,095
-5,013
- 2 0 764
-54,884
-47,004

1945
1946
1947
1948
1949

45,216
39,327
38, 394
41,774
39,437

92,690
55,183
34 532
29,773
38,834

-47,474
-15,856
3,862
12,001
603

39,485
51,646
66,204
69, 574
69,719

42, 597
45 546
67,721
76,107
70,890

-3,112
6,100
-1,517
-6, 533
-1,170

65,469
74,547
79,99&
79,636
79,249

68,509
70,460
76,741
82,575
92,104

-3,041
4,087
3,249
-2,939
-12,855

92,492
94,389
99,676
106,560
112,662

92,223
97,795
106,813
111,311
118,584

269
-3,406
- 7 137
-4,751
-5,922

116,833
130,856
149,552
153,671
187,784

118,430
134,652
158,254
178,833
184,548

-1,596
- 3 796
-8,702
-25,161
3,236

1970
1971
1972
1973
1974

193,743
188,392
208,649
232,225
264,932

196,588
211,425
232,021
247,074
269,620

-2,845
- 2 3 033
—23, 373
-14, 849
-4,688

1975
1976
Transition quarter
1977
1978
1979 i
19801

280, 997
300, 005
81, 773
357, 762
401,997
455,989
502,553

326,185
366,439
94, 729
402, 725
450,836
493,368
531,566

- 4 5 188
-66,434
-12,956
-44,963
-48,839
-37,379
-29,013

1950
1951
1952
1953
1954
1955
1956 .
1957
1958
1959

.
.

.. .

I960
1961
1962 .
1963.
1964
1965
1966
1967
1968
1969

. ..

.

... .

. .

i Estimates.
Note.—Under provisions of the Congressional Budget Act of 1974, the fiscal year for the Federal Government shifted
beginning with fiscal year 1977. Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October
1976 (fiscal year 1977), the fiscal year is on an October 1-September 30 basis. The 3-month period from July 1, 1976,
through September 30, 1976 is a separate fiscal period known as the transition quarter.
Data for 1929-39 are according to the administrative budget and those beginning 1940 according to the unified budget.
Refunds of receipts are excluded from receipts and outlays.
See "Budget of the United States Government, Fiscal Year 1980" for additional information.
Sources: Department of the Treasury and Office of Management and Budget.




263

TABLE B-70.—Federal budget receipts, outlays, and debt,fiscalyears 1970-80
[Millions of dollars; fiscal years]
Actual
Description
1970

1971

1972

1973

1974

1975

BUDGET RECEIPTS AND OUTLAYS:
Total receipts
Federal funds
Trust funds
Interfund transactions..
Total outlays.
Federal funds
Trust funds
Interfund transactions.
Total surplus or deficit ( — ) .
Federal funds.
Trust funds. _.

193,743

188, 392

208,649

232,225

264, 932

280,997

143,158
59, 362
-8,778

133,785
66,193
-11,586

148, 846
72,959
-13,156

161, 357
92,193
-21,325

181,219
104,846
-21,133

187, 505
118,590
-25,098

196, 588

211,425

232, 021

247,074

269,620

326,185

156, 300
49,066
-8,778

163,651
59, 360
- 1 1 , 586

178,110
67,067
-13,156

186,951
81,448
- 2 1 , 325

199,918
90, 835
-21,133

240,115
111,168
-25,098

- 2 , 845

-23,033

- 2 3 , 373

-14,849

- 4 , 688

-45,188

-13,142
10,296

- 2 9 , 866
6,833

- 2 9 , 264
5,892

- 2 5 , 594
10, 745

-18,699
14,011

-52,609
7,422

OUTSTANDING DEBT, END OF PERIOD:
382,603

409, 467

437, 329

468, 426

486, 247

544,131

Held by Government agencies.
Held by the public

97, 723
284,880

105,140
304, 328

113,559
323, 770

125,381
343, 045

140,194
346, 053

147,225
396,906

Federal Reserve System..
Other

57,714
227,166

65,518
238,810

71,426
252, 344

75,182
267, 863

80,649
265, 404

84,993
311,913

193,743

188, 392

208, 649

232, 225

264, 932

280,997

90, 412
32, 829
45, 298
15,705
3,644
2,430

86,230
26, 785
48, 578
16,614
3,735
2,591

94,737
32,166
53,914
15, 477
5,436
3,287

103,246
36,153
64, 542
16, 260
4,917
3,188

118,952
38,620
76, 780
16, 844
5,035
3,334

122,386
40,621
86,441
16, 551
4,611
3,676

3,266
158

3,533
325

3,252
381

3,495
426

4,845
524

5,777
934

196, 588

211,425

232,021

Gross Federal debt

BUDGET RECEIPTS.
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions...
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts:
Deposits of earnings by Federal Reserve System
Allother
BUDGET OUTLAYS.
National defense
International affairs
General science, space, and technology....
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and social
services
Health
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Interest
Allowances
Undistributed offsetting receipts
Composition of undistributed offsetting receipts:
Employer share, employee retirementInterest received by trust funds
Rents and royalties on the Outer Continental Shelf

247, 074

269, 620

326,185

78, 553
4,297
4,507
990
3,061
5,161
2,108
7,006
2,360

75, 808
4,097
4,180
1,031
3,909
4,288
2,358
8,050
2,833

76, 550
4,693
4,173
1,270
4,235
5,280
2,216
8,388
3,388

74, 541
4,066
4,030
1,179
4,763
4,852
924
9,065
4,537

77, 781
5,681
3,977
837
5,670
2,227
3,925
9,172
4,080

85, 552
6,922
3,989
2,170
7,335
1,659
5,607
10, 388
3,689

8,625
13, 051
43,073
8,677
952
1,888
536
18, 309

9,839
14, 716
55, 426
9,776
1,299
2,104
535
19, 602

12,519
17, 467
63, 913
10,730
1,650
2,449
673
20, 563

12,735
18, 832
72,965
12,013
2,131
2,626
7,351
22, 782

12, 344
22,073
84,437
13, 386
2,462
3,296
6,890
28,032

15, 870
27,648
108, 610
16, 597
2,942
3,182
7,187
30,911

- 6 , 567

- 8 , 427

-8,137

-12,318

-16,651

-14,075

-2,444
-3,936

-2,611
- 4 , 765

- 2 , 768
-5,089

- 2 , 927
-5,436

-3,319
- 6 , 583

-3,980
-7,667

-187

-1,051

-279

- 3 , 956

- 6 , 748

- 2 , 428

See next page for continuation of table.




264

TABLE B-70.—Federal budget receipts, outlays, and debt,fiscalyears 1970-80—Continued
[Millions of dollars; fiscal years]
Actual

Estimate

Description
1976
BUDGET RECEIPTS AND OUTLAYS:
Total receipts
Federal funds
Trust funds
Interfund transactions.

Transition
quarter

1977

1978

1979

1980

300,005

81, 773

357, 762

401, 997

455, 989

502, 553

201, 099
133, 695
- 3 4 , 789

54, 085
32, 071
- 4 , 383

241,312
152, 763
- 3 6 , 313

270, 484
168, 012
- 3 6 , 498

306,135
189, 496
- 3 9 , 641

332, 798
212, 208
- 4 2 , 452

366, 439

94, 729

402, 725

450, 836

493, 368

531,566

Federal funds
Trust funds
Interfund transactions.

269, 943
131, 286
- 3 4 , 789

65, 089
34,023
- 4 , 383

295, 772
143, 267
- 3 6 , 313

332, 016
155,318
- 3 6 , 498

361,315
171,694
- 3 9 , 641

381, 844
192,175
- 4 2 , 452

Total surplus or deficit (—).

-66,434

-12,956

- 4 4 , 963

- 4 8 , 839

- 3 7 , 379

- 2 9 , 013

Federal funds.
Trust funds
OUTSTANDING DEBT, END OF PERIOD:
Gross Federal debt

- 6 8 , 843
2,410

-11,004
-1,952

-54,459
9,496

-61,533
12,694

-55,180
17, 801

- 4 9 , 046
20, 033

631, 866

646, 379

709,138

780, 425

839,187

898,956

151,566
480, 300

148, 052
498, 327

157, 295
551, 843

169, 477
610, 948

188, 238
650, 948

209, 008
689, 948

94, 714
385, 586

96, 702
401, 625

105, 004
446, 839

114,965
495,983

BUDGET RECEIPTS
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions..
Excise taxes
Estate and gift taxes.
_
Customs duties...
Miscellaneous receipts:
Deposits of earnings by Federal Reserve
System..
All other.

300,005
131,603
41, 409
92,714
16,963
5,216
4,074

81, 773
38, 801
8,460
25, 760
4,473
1,455
1,212

357, 762
157, 626
54, 892
108,688
17,548
7,327
5,150

401, 997
180, 988
59, 952
123, 410
18, 376
5,285
6,573

455, 989
203,602
70, 307
141, 789
18, 395
5,686
7,517

502, 553
227, 322
70, 987
161,453
18, 455
6,011
8,447

5,451
2,575

1,500
112

5,908
622

6,641
772

7,600
1,093

8,600
1,278

BUDGET OUTLAYS
National defense
International affairs.__
General science, space, and technology
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and social
services
Health
Income security
Veterans benefits and services.
Administration of justice
General government
General purpose fiscal assistance
Interest
Allowances
Undistributed offsetting receipts..

366, 439
89, 430
5,552
4,370
3,127
8,124
2,504
3,792
13, 435
4,709

94, 729
22, 307
2,193
1,161
794
2,532
581
1,392
3,304
1,340

402, 725
97, 501
4,813
4,677
4,172
10, 000
5,532
-44
14, 636
6,286

450, 836
105,186
5,922
4,742
5,861
10,925
7,731
3,325
15, 444
11, 000

493, 368
114,503
7,312
5,226
8,630
11,207
6,224
2,968
17, 449
9,063

531, 566
125, 830
8,213
5,457
7,878
11,456
4,269
3,390
17, 609
7,281

18, 737
33, 448
127,412
18, 432
3,320
3,006
7,235
34,511

5,162
8,721
32, 797
3,962
859
883
2,092
7,216

20, 985
38, 785
137,915
18, 038
3,600
3,374
9,499
38, 009

26, 463
43,676
146, 212
18, 974
3,802
3,777
9,601
43, 966

30, 656
49,136
158, 867
20, 329
4,351
4,413
8,936
52, 766

30,210
53, 379
179,120
20,461
4,388
4,412
8,814
57, 022
1,398
-19,021

Total outlays.

Held by Government agencies.
Held by the public
Federal Reserve System.
Other

Composition of undistributed offsetting receipts:
Employer share, employee retirement..
Interest received by trust funds
Rents and royalties on the Outer Continental Shelf

-14,704

- 2 , 567

-15,053

-15,772

-18,670

- 4 , 242
- 7 , 800

-985
-270

- 4 , 548
-8,131

- 4 , 983
- 8 , 530

- 5 , 388
- 9 , 782

- 5 , 482
-10,940

-2,662

-1,311

- 2 , 374

- 2 , 259

- 3 , 500

-2,600

Note.—Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis. Beginning October 1976 (fiscal year 1977),
the fiscal year is on an October 1-September 30 basis. The period July 1, 1976 through September 30, 1976 is a separate
fiscal period known as the transition quarter.
See "Budget of the United States Government, Fiscal Year 1980" for additional information.
Sources: Department of the Treasury and Office of Management and Budget.




265

TABLE B-71.—Relation of Federal Government receipts and expenditures in the national income
and product accounts to the unified budget, 1978—80
[Billions of dollars; fiscal years]
Estimate

1978

Receipts and expenditures

1979

1980

RECEIPTS
402.0

Government contribution for employee retirement (grossing)
Other netting and grossing
Adjustment to accruals
__ _ __ _.
. ._
Other
Federal sector, national income and product accounts, receipts

456 0

502 6

7.1
3.0
2.8
-1.0

7.9
3.5
-1.9
-1 1

8.3
6.3
-2.0
—1 3

413.8

464.3

513.8

450.8

Total budget receipts

493.4

531 6

-8.4
7.1
3.0
2.7
1.2
-5.8

-5.2
7.9
3.5
1.5
2.2
-7.0

-3.7
8.3
6.3
1.8
1.1
-6 2

450.6

496.3

539.2

EXPENDITURES
Total budget outlays _ _ _ _ _

_

__.

Lending and financial transactions
-_
__
Government contribution for employee retirement (grossing)
Other netting and grossing
Defense timing adjustment _
.
__ __ _
Bonuses on Outer Continental Shelf land leases
Other
Federal sector, national income and product accounts, expenditures__.

Note—See Note, Table B-69.
See Special Analysis B, "Special Analyses, Budget of the United States Government, Fiscal Year 1980" for description
of these categories.
Sources: Department of Commerce (Bureau of Economic Analysis), Department of the Treasury, and Office of Management and Budget.




266

TABLE B-72.—Government receipts and expenditures, national income and product
accounts, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Total government

Calendar year or quarter

Receipts

Expenditures

1929

11.3

10.3

1933

9.3

10.7

1939

15.4

17.6

1940
1941.
1942
1943
1944.
1945..
1946
1947
1948.
1949

17.7
25.0
32.6
49.2
51.2
53.2
51.0
56.9
58.9
55.9

1950
1951
1952.
1953
1954.
1955. . .
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965.
1966
1967
1968.
1969

.

.

1970
1971
1972
1973
1974..
1975
1976
1977. . .
1978 v

Expenditures

1.0

3.8

2.6

-1.4

2.7

4.0

-2.2

6.7

8.9

18.4
28.8
64.0
93.3
103.0
92.7
45.6
42.5
50.5
59.3

-.7
-3.8
-31.4
-44.1
-51.8
-39.5
5.4
14.4
8.4
-3.4

8.6
15.4
22.9
39.3
41.0
42.5
39.1
43.2
43.2
38.7

10.0
20.5
56.1
85.8
95.5
84.6
35.6
29.8
34.9
41.3

61.0
79.2
93.9
101.6
97.0
98.0
104.5
115.3
127.6
131.0

8.0
6.1

-3.8
-6.9
-7.1
3.1
5.2
.9
-12.6
-1.6

50.0
64.3
67.3
70.0
63.7
72.6
78.0
81.9
78.7
89.8

40.8
57.8
71.1
77.1
69.8
68.1
71.9
79.6
88.9
91.0

136.4
149.1
160.5
167.8
176.3
187.8
213.6
242.4
268.9
285.6

96.1
98.1

106.2
114.4
114.9
124.3
141.8
150.5
174.7
197.0

93.1
101.9
110.4
114.2
118.2
123.8
143.6
163.7
180.6
188.4

311.9
340.5
370.9
404.9
458.2
532.8
570.4
621.8
684.2

192.1
198.6
227.5
258.3
288.6
286.2
331.4
374.5
431.6

682.7

3.1
-4.3
-3.8
.7
-2.3
.5

-1.3
-14.2
-5.5
10.7
-9.4
-18.3
-3.5
6.3

-3.2
-64.4
-33.2
-18.6
-1.5

(-),

Surplus or
deficit

(-),

Receipts

Expenditures

national
income
and
product accounts

1.2

7.6

7.8

-0.2

-1.3

7.2

7.2

-.1

-2.2

9.6

9.6

.0

-1.3
-5.1
-33.1
-46.6
-54.5
-42.1
3.5
13.4

10.0
10.4
10.6
10.9
11.1
11.6
13.0
15.4
17.7
19.5

9.3
9.1

.6
1.3
1.8
2.5
2.7
2.6
1.9
1.0
.1
-.7

national
income
and
product accounts

8.3

-2.6

. 8.8
8.4

8.5
9.0
11.1
14.4
17.6
20.2

21.3
23.4
25.4
27.4
29.0
31.7
35.0
38.5
42.0
46.4

22.5
23.9
25.5
27.3
30.2
32.9
35.9
39.8
44.3
46.9

49.9
54.0
58.5
63.2
69.5

-5.8

8.5

84.8
93.6
107.2
119.7

49.8
54.4
58.0
62.8
68.5
75.1
84.3
94.7
106.9
117.6

204.2
220.6
244.7
265.0
299.3
356.8
385.2
422.6
461.0

-12.1
-22.0
-17.3
-6.7
-10.7
-70.6
-53.8
-48.1
-29.4

134.9
152.6
177.4
193.5
210.4
236.9
266.9
296.2
327.7

132.2
148.9
163.7
180.5
202.8
230.6
246.3
266.6
299.8

20.7
29.6
27.8

376.3
375.8
387.5
401.4

-57.7
-46.4
-52.0
-59.1

256.4
262.6
268.6
280.2

243.6
246.2
247.2
248.2

12.8
16.4
21.4
32.0

9.2
6.5

-3.7
-7.1
-6.0

4.4
6.1

2.3

-10.3
-1.1

3.0

-3.9
-4.2
.3
-3.3
.5

-1.8

-13.2

75.1

-1.2
-.4

-.0
.1
-1.1
-1.3
-.9
-1.4
-2.4
-.4
.1
-.4

.5
.5
1.0
-.0
.5

-1.1

.3

2.1
2.8
3.7

13.7
13.0
7.6
6.2

___

__

_-.

1977: 1

II
III
IV
_

III
IV v

532.8
543.6
556.4

561.1
562.8
574.2
583.5

-44.9
-29.9
-30.6
-27.1

318.6
329.4
335.5
342.3

587.4
598.0
605.2
622.3

_

IV

1978: 1
||_.

Receipts

139.5
144.8
156.7
168.5
174.0
188.3
212.3
228.2
263.4
296.3

.

.

II
IN

Surplus or
deficit

302.6
322.2
367.4
411.2
455.1
468.5
537.2
603.3

.

1976: 1

Surplus or
deficit
<-),
national
income
and
product accounts

69.0
85.2
90.1
94.6
89.9
101.1
109.7
116.2
115.0
129.4

..

State and local
government

Federal Government

595.3
609.8
630.5
651.9

-7.8
-11.8
-25.2
-29.6

366.6
371.4
374.3
385.5

403.9
411.7
430.7
444.1

-37.3
-40.3
-56.4
-58.6

283.0
292.0
301.8
307.9

253.5
263.5
270.7
278.9

29.5
28.5
31.2
29.0

638.0
676.3
693.3

659.1
670.1
692.7
714.8

-21.1
6.2
.6

396.2
424.7
441.7

448.8
448.3
464.5
482.3

-52.6
-23.6
-22.8

315.7
327.4
329.2

284.2
297.7
305.8
311.6

31.5
29.8
23.4

516.1

Note.—Federal grants-in-aid to State and local governments are reflected in Federal expenditures and State and local
receipts. Total government receipts and expenditures have been adjusted to eliminate this duplication.
Source: Department of Commerce, Bureau of Economic Analysis.




267

T A B L E R-73.—Federal

Government receipts and expenditures, national income and product accounts

1952-80
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Expenditures

Receipts

Transfer
payments

Year or quarter

Fiscal year:
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966 . . 1967
1968
1969
1970
1971
1972
1973 . . .
1974
1975
1976
1977
1978

Indirect
PerConPurGrantssonal Corpo- busi- tribuchases
in-aid
ness
tax rate tax tions
of
to State
and
for TotaP goods To
and
Total non- profits and
To
tax non- social
and
local
tax
acper- forserv- sons eign- governtax insurre- cruals acance
ices
ments
ers
ceipts
cruals

65.2
69.4
65.8
67.4
76.3
81.0
78.1
85.4
94.8
95.0
104.0
110.0
115.6
120.0
132.7
146 0
160.0
190.1
194.9
192.5
213.5
240.5
271.8
283.5
313.9
365.3
413.8
464.3
513. 8

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
51.4
57.5
64.4
71.4
90.0
93.6
87.5
100.3
107.3
122.6
127.1
36.9
165.9
186.3
206.6
236.4

19.4
19.7
17.3
18.9
21.5
20.8
17.9
21.4
22.3
20.0
22.7
23.3
25.7
27.1
30.8
30 3
33.2
37.0
33.0
32.0
34.2
41.0
43.7
42.1
51.9
58.8
67.2
76.9
78.2

9.7
7.3
10.7
7.6
10.4
7.8
10.0
8.7
10.8 10.3
11.7 11.7
11.6 12.3
12.0 13.9
13.2 16.7
13.3 18.1
14.2 19.9
15.0 22.1
15.6 23.6
16.9 24.5
15.5 28.9
15.8 35.5
17.1 38.4
18.6 44.5
19.2 49.2
20.0 52.9
19.9 59.1
20.7 71.5
21.4 84.2
22.2 92.1
24.2 00.9
24.5 116.1
27.2 33.1
29.0 51.8
30.4 68.8

66.0
75.9
74.3
67.2
70.0
76.0
82.8
91.2
91.3
98.1
106.2
111.7
117.2
118.5
132.7
154.9
172.2
184.7
195.6
212.7
232.9
256.2
278.8
328.7
371.5
412.0
450.6
496.3
539.2

47.2
56.4
53.9
44.3
45.5
48.1
51.1
54.8
52.9
55.8
61.0
63.7
65.9
64.6
72.4
86.0
95.0
98.0
97.0
94.8
100.9
101.7
104.6
118.0
126.2
140.7
151.1
166.0
178.2

8.5
9.2
10.5
12.1
12.8
14.4
17.8
19.9
20.6
23.6
25.1
26.5
27.4
28.4
31.8
37.2
42.7
48.7
55.0
67.7
76.1
87.1
101.7
131.2
153.5
166.4
178.4
196.6
222.5

-0.8
-6.5
-8.5
.2
6.3
5.0
-4.7
-5.8
3.4
-3.1
-2.2
-1.7
-1.5
1.4
.0
-8.9
-12.2
5.4
-.6
-20.2
-19.5
-15.7
-7.0
-45.3
-57.6
-46.7
-36.8
-32.0
-25.4

2.6
8.8
2.1
4.5
71.1
52.4
.8
31.0 18.6 10.3 7.4
9.4
4.6
2.0
2.8
7.4
77.1
57.5
32.2 19.5 10.9
4.6
2.9
l'.O
69.8
47.9 11.5
1.8
29.0 16.9
8.2
9.7
4.6
3.1
68.1
1.5
2.0
31.4 21.1 10.7 9.4
44.5 12.4
3.3
2.4
5.1
71.9
45.9 13.4
1.9
35.2 20.9 11.2 10.6
2.4
4.2
5.5
37.4 20.4 11.8 12.3
79.6
50.0 15.7
1.8
5.6
5.2
2.8
88.9
53.9 19.6
1.8
36.8 18.0 11.5 12.4
6.2
91.0
2.1
6.8
39.9 22.5 12.5 14.9
53.9 20.1
1.8
6.8
93.1
2.6
6.5
43.6 21.4 13.4 17.6
53.7 21.6
1.9
6.2
4.0
7.2
44.7 21.5 13.6 18.3 101.9
57.4 25.0
2.1
6.8
4.2
8.0
48.6 22.5 14.6 20.5 110.4
63.7 25.6
2.2
9.1
7.3
3.9
64.6 27.0
2.2
51.5 24.6 15.3 23.1 114.2
10.4
8.0
27.9
4.5
48.6 26.1 16.2 24.0 118.2 65.2
2.2
53.9 28.9 16.5 25.0 123.8
67.3 30.3
4.6
2.2
11.1
8.4
14.4
9.2
5.5
2.3
61.7 31.4 15.6 33.1 143.6
78.8 33.5
90.9 40.1
4.7
2.2
15.9
9.8
67.5 30.0 16 3 36.7 163.7
11.4
46.0
18.6
2.1
79.6 36.3 18.0 40.8 180.6
98.0
4.5
12.9
20.3
2.1
94.8 36.2 19.0 47.0 188.4 97.5 50.6
5.2
14.3
24.4
2.2
92.2 30.8 19.3 49.7 204.2 95.6 61.3
6.3
14.0
29.0
2.6
89.9 33.5 20.4 54.9 220.6
96.2 72.7
6.2
14.6
37.5
2.7
108.2 36.6 20.0 62.8 244.7 102.1 80.5
7.8
18.2
8.2
40.6
2.6
114.6 43.0 21.2 79.4 265.0 102.2 93.2
20.9
5.3
43.9
3.2
131.1 45.9 21.7 89.9 299.3 111.1 114.4
23.2
6.8
3.1
54.6
125.4 42.8 23.9 94.2 356.8 123.1 146.0
26.8
5.8
61.1
3.2
146.8 54.8 23.4 106.4 385.2 129.9 158.4
67.4
8.3
29.1
169.4 61.3 25.0 118.7 422.6 145.1 169.5
3.2
76.6
35.5
9.6
3.5
193.2 71.7 27.9 138.7 461.0 154.0 181.8
6.7
3.0
62.1
28.1
1977: 1
168.3 58.4 24.4 115.5 403.9 138.3 165 6
II
3.0
65.4
28.8
6.4
167.0 61.8 24.8 117.7 411.7 142.9 165.2
28.9
8.4
70.9
3.7
III
167.6 62.0 25.4 119.3 430.7 146.8 172.0
30.7 11.8
71.1
3.4
IV
174.8 62.9 25.6 122.2 444.1 152.2 175.0
73.9
33.2 10.0
3.3
1978:1
176.8 59.6 26.5 133.3 448.8 151.5 176.9
II
186.7 72.6 27.9 137.6 448.3 147.2 177.0
3.7
75.9
34.6 10.0
III
3.4
77.5
36.3
8.0
199.7 73.6 28.2 140.1 464.5 154.0 185 5
IV V
209.7
3.6
79.1
37.9 10.5
29.0 144.0 482.3 163.4 187.8
1
1ncludes an item for the difference between wage accruals and disbursements, not shown separately.
3 Estimates.
Sources: Department of Commerce (Bureau of Economic Analysis) and Office of Management and Budget.

-3.7
-7.1
-6.0
4.4
6.1
2.3
-10.3
-1.1
3.0
-3.9
-4.2
.3
-3.3
.5
-1.8
-13.2
-5.8
8.5
-12.1
-22.0
-17.3
-6.7
-10.7
-70.6
-53.8
-48.1
-29.4
-37.3
-40.3
-56.4
-58.6
-52.6
-23.6
-22.8

Calendar year:
1952 .
.
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978 p

67.3
70.0
63.7
72.6
78.0
81.9
78 7
89.8
96.1
98.1
106.2
114.4
114.9
124.3
141.8
150 5
174.7
197.0
192.1
198.6
227.5
258.3
288.6
286.2
331.4
374.5
431.6
366.6
371.4
374.3
385.5
396.2
424.7
441.7




268

2.5
2.8
2.9
3.0
3.2
3.7
4.7
6.2
6.9
6.9
7.6
8.3
9.8
10.9
12.7
14.8
17.8
19.2
22.6
26.8
32.6
40.4
41.6
48.4
57.5
66.2
74.6
78.2
78.9

4.5
4.5
4.6
4.6
4.8
5.3
5.4
5.6
6.8
6.4
6.4
7.1
7.7
8.2
8.7
9.6
10.5
12.1
13.6
14.2
14.1
15.9
19.8
21.9
25.2
28.4
33.7
41.6
45.2

0.8
.9
.8
1.2
17
2.6
2.4
2.5
2.4
3.3
4.1
4.0
4.1
4.3
4.8
5.2
4.1
4.6
5.4
6.8
6.4
9.1
8.0
5.7
6.2
7.0
9.4
10.3
10.5

19792
19802

2.6
2.1
1.7
2.1
1.8
1.9
1.7
1.8
1.8
2.1
Z.I
2.1
2.2
2.2
2.3
2.2
2.1
2.2
2.0
2.3
2.8
2.7
3.0
3.1
3.0
3.2
3.4
3.6
3.9

Surplus
Subsior
dies
defiless
cit
cur- ( - ) ,
rent
Net
nasurintionterplus
al inest
of
come
paid
govand
ernprodment
uct
enteracprises counts

TABLE B-74.—State and local government receipts and expenditures, national income and product
accounts, 1946-78
Billions of dollars; quarterly data at seasonally adjusted annual rates]
Receipts

Calendar
year or
quarter

Total

Expenditures

Subsidies
Pur- Transndirect tontriPerless
busichases
Corfer
sonal porate ness
utions Fedof
payNet current
eral
tax
for
tax
>rofits
Total i goods ments nterest surplus
and
social rantsgovand
tax
and
paid ofernto
ontax ccruals ontax nsur- n-aid
servperceipts
ance
ment
ccruals
ices
sons
enterprises

Surplus
or
deficit
/ \
national
ncome
and
product accounts

1946
1947
1948
1949

13.0
15.4
17.7
19.5

1.5
1.7
2.1
2.4

0.5
.6
.7
.6

9.3
10.7
12.2
13.3

0.6

1.1
1.7
2.0
2.2

11.1
14.4
17.6
20.2

9.9
12.8
15.3
18.0

1.7
2.3
3.0
3.0

0.2

.8
.9

1950
1951 1952
1953
1954 .

21.3
23.4
25.4
27.4
29.0

2.5
2.8
3.0
3.2
3.5

.8
.9
.8
.8
.8

14.6
15.9
17.4
18.8
19.9

1.1
1.4
1.6
1.7
2.0

2.3
2.5
2.6
2.8
2.9

22.5
23.9
25.5
27.3
30.2

19.8
21.8
23.2
25.0
27.8

3.6
3.1
3.3
3.5
3.6

.1
.0
.0
.0
.1

1955
1956
1957
1958
1959

31.7
35.0
38.5
42.0
46.4

39
4.5
5.0
5.4
6.1

1.0
1.0
1.0
1.0
1.2

21.6
23.8
25.7
27.2
29.3

2.1
2.3
2.6
2.8
3.1

3.1
3.3
4.2
5.6
6.8

32.9
35.9
39.8
44.3
46.9

30.6
33.5
37.1
41.1
43.7

3.8
3.9
4.3
4.8
5.1

.1

1 5

.1

-1.7
—1 7
-2.0

13
9
-1.4
24
-.4

49.9
54.0
58.5
63.2
69.5

6.7
7.4
8.2
8.8
10.0

1.2
1.3
1.5
1.7
1.8

32.0
34.4
37.0
39.4
42.6

3.4
3.7
3.9
4.2
4.7

6.5
7.2
8.0
9.1
10.4

49.8
54.4
58.0
62.8
68.5

46.5
50.8
54.3
59.0
64.6

5.4
5.8
6.0
6.4
6.9

-.1

—2 2
-2.3
—2 5
—2 8
-2.8

'5
5
1.0

75.1
84.8
93.6
107.2
119.7

10.9
12.8
14.6
17.4
20.6

2.0
2.2
2.5
3.1
3.4

46.1
49.7
54.0
60.8
67.4

5.0
5.7
6.7
7.2
7.9

11.1
14.4
15.9
18.6
20.3

75.1
84.3
94.7
106.9
117.6

71.1
79.8
89.3
100.7
110.4

7.3
8.1
9.4
10.6
12.1

-.3
-.7
-.9
-1.2
-1.6

-3 0
-3.0
—3 1
-3.2
-3.3

— 0
.5
1 i
.3
2.1

134.9
152.6
177.4
193.5
210.4

23.1
26.4
33.0
36.1
39.2

3.7
4.2
5.0
5.7
6.5

74.7
83.1
91.0
99.0
106.9

9.0
9.9
10.8
12.1
13.9

24.4
29.0
37.5
40.6
43.9

132.2
148.9
163.7
180.5
202.8

123.2
137.5
151.0
167.3
191.5

14.6
17.2
18.9
20.3
20.5

-2.0
-1.8
-2.1
—2.9
-4.9

-3.6
-3.8
-4.2
-4 4
-4.3

2 8
3.7
13.7
13 0
7.6

1975
1976
1977
1978 p

236.9
266.9
296.2
327.7

43.4
49.7
56.6
62.9

7.1
9.4
10.5
12.3

115.4
128.0
140.0
150.3

16.4
18.7
21.7
25.5

54.6
61.1
67.4
76.6

230.6
246.3
266.6
299.8

215.4
229.6
248.9
280.2

24.5
27.2
29.7
33.5

-4.8
-5.4
-6.5
-7.9

-4.5
-5.1
-5.6
-5.9

6.2
20 7
29 6
27 8

1976: 1
II
III
IV

256.4
262.6
268.6
280.2

46.7
48.7
50.3
52.9

9.1
9.6
9.5
9.3

123.7
126.6
129.2
132.4

18.0
18.5
19.0
19.5

58.8
59.2
60.5
66.1

243.6
246.2
247.2
248.2

226.9
229.4
230.5
231.7

26.4
26.9
27.5
28.0

-4.9
-5.2
-5.7
-5.9

-4.9
-4.9
-5.1
-5.5

12.8
16.4
21.4
32.0

1977: 1
II
ill
IV.

283.0
292.0
301.8
307.9

54.5
56.2
57.0
58.5

9.9
10.6
10.7
10.9

135.9
138.5
141.2
144.6

20.5
21.4
22.0
22.8

62.1
65.4
70.9
71.1

253.5
263.5
270.7
278.9

236.7
245.9
252.7
260.3

28.6
29.3
30.1
30.9

-6.2
-6.4
-6.5
-6.8

-5.7
-5.3
-5.7
-5.5

29 5
28.5
31.2
29.0

1978: 1
II
ill

315.7
327.4
329.2

60.5
62.5
63.5
65.3

10.4
12.4
12.5

146.8
151.5
149.5
153.3

24.1
25.2
26.1
26.7

73.9
75.9
77.5
79.1

284.2
297.7
305.8
311.6

265.2
277.6
285.8
292.2

32.0
33.1
34.1
34.6

-7.1
-7.3
-8.2
-9.1

-6.0
-5.7
-5.9
-6.1

31 5
29.8
23.4

1960 .
1961
1962
1963 .
1964

.

1965 .
1966
1967
1968
1969
1970
1971
1972
1973
1974

. .

IVP____
1

.1
.1

-0.7
8
-.8
-.9
_ Q

n
1
L.2
L.3

Includes an item for the difference between wage accruals and disbursements, not shown separately.
Source: Department of Commerce, Bureau of Economic Analysis.




269

1.9
10
.1
-.7
-1.2
—0
.1
1 i

1

T A B L E B-75.—State and local government revenues and expenditures, selected fiscal years,

1927-77

[Millions of dollars]
General revenues by source 2
Fiscal year 1
Total

Property
taxes

Sales
and
gross
receipts
taxes

General expenditures by function 2

ReveIndi- Corponue
vidual ration from
All
net Federal others
income income
taxes taxes Government

Total

Education

Highways

Public
welfare

All
other <

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

4,487
4,076
4,093
4,440

752
1,008
1,484
1,794

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
1,069

3,269
2,952
3,215
3,547

1940...
1942...
1944...
1946..
1948..

9,609
10,418
10,908
12,356
17,250

4,430
4,537
4,604
4,986
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

3,737
4,591
7,170

1950..
1952..
1953..
1954..

20,911
25,181
27,307
29,012

7,349
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 7,177
26,098 8,318
27,910 9,390
30,701 10,557

3,803
4,650
4,987
5,527

2,940 8,867
2,788 10,342
2,914 10,619
3,060 11,557

1955..
1956-.
1957..
1958..
1959-

31,073
34,667
38,164
41,219
45,306

10,735 7,643
11,749 8,691
12,864 9,467
14,047 9,829
14,983 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 9,250
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

3,168
3,139
3,485
3,818
4,136

12,197
13,399
14,940
16,547
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
,266
,308
,505

6,974
7,131
7,871
8,722

51,876
56,201
60,206
64,816

18,719 9,428
20,574 9,844
22,216 10,357
23,776 11,136

4,404
4,720
5,084
5,481

19,325
21,063
22,549
24,423

1962-63 «_.
1963-64 5.
1964-65 6..

62,269 19,833 14,446
68,443 21,241 15,762
74,000 22,583 17,118

3,267
3,791
4,090

11,634
12,563
13,489
14,850

,505 8,663 14,556 63,977 23,729 11,150
,695 10,002 15,951 69,302 26,286 11,664
,929 11,029 17,250 74, 546 28, 563 12,221

1965-66 6..
1966-67 6..
1967-68 6..
1968-69 6.
1969-70 6.

83,036
91,197
101,264
114,550
130,756

24,670
26,047
27,747
30,673
34,054

19,085 4,760
20,530 5,826
22,911 7,308
26,519 8,908
30,322 10,812

2,038
2,227
2,518
3,180
3,738

13,214
15,370
17,181
19,153
21,857

19,269 82,843
21,197 . .
.
93,350
23,598 102,
02,411
26,118 116,728
29,971 131,332

33,287
37,919
41,158
47,238
52,718

1970-716.
1971-72 8.
1972-73 «_
1973-745..
1974-75 6..

144,927
166,352
190,214
207, 670
228,171

37,852
42,133
45,283
47,705
51,491

33,233
37,488
42,047
46,098
49,815

11,900
15,237
17,994
19,491
21,454

3,424
4,416
5,425
6,015
6,642

26,146
31,253
39,256
41, 820
47, 034

32,374 150,674
35,826 166,873
40,210 181,227
46,541 _ _
_,
198,959
51, 735 ~~~\,
230,

59,413
64,886
69,714
75, 833
721
87,858

1975-76 6..
1976-775..

256,176 57,001 54,54 24,575
285, 796 62, 535 60, 595 29,245

3,862

5,420 23,678
5,766 25,586
6,315 27,447

12,770 6,757 30,029
13,932 8,218 33,281
14,481 9,857 36,915
15,417 12,110 41,963
16,427 14,679 47, 508
18,095
19,010
18,615
19,946
22,528

18,226
21,070
23, 582
25,085
28,155

54,940
61,907
69,316
78,096
92,180

7,273 55,589 57,191 256,731 97,216 23,907 32,604 103,004
9,174 62,575 61,673 274, 388 102, 805 23,105 35,941 112,537

1 Fiscal years not the same for all governments. See footnote 5.
2 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 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 on general debt, and unallocable expenditures.
s 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 of fiscal years ended during the particular calendar year.
Note.—Data are not available for intervening years.
Source: Department of Commerce, Bureau of the Census.




270

TABLE B-76.—Interest-bearing public debt securities by kind of obligation, 1967-1S
[Millions of dollars]

End of year
or month

Fiscal year:
1967
1968
1969

Total
interestbearing
public
debt
securities

Marketable

Total

Bills

322,286 5 210,672 58,535
344,401 226,592 64,440
351,729 226,107 68,356

Non marketable

Treasury Treasury
notes bonds 1

49,108
71,073
78,946

Total

Foreign GovernU.S.
ment
savings govern- account
ment
bonds series2 series»

Other <

97,418 111,614
91,079 117,808
78,805 125,623

51,213
51,712
51,711

1,514
3,741
4,070

56,155
59,526
66,790

2,731
2,828
3,051

62,956
53,989
49,135
45,071
33,137

136,426
150,816
168,158
193,382
206,663

51,281
53,003
55,921
59,418
61,921

4,755
9,270
18,985
28, 524
25,011

76,323
82,784
89,598
101,738
115,442

4,068
5,759
3,654
3,701
4,289

1970
1971
1972
1973
1974

369,026
396,289
425,360
456,353
473,238

232,599 76,154 93,489
245,473 86,677 104,807
257,202 94,648 113,419
262,971 100,061 117,840
266,575 105,019 128,419

1975
1976
1977
1978

532,122
619, 254
697, 629
766,971

315,606
392,581
443, 508
485,155

128, 569
161,198
156, 091
160, 936

150,257 36,779 216, 516
191,758 39,626 226,673
241,692 45, 724 254,121
267, 865 56,355 281,816

65,482
69,733
75,411
79, 798

23,216
21, 500
21, 799
21,680

124,173
130,557
140,113
153, 271

3,644
4,883
16, 797
27,067

1977: Jan
Feb
Mar
Apr
May
June

652,980
662, 320
668,216
668, 509
670,958
673, 389

423,995
431,607
435, 379
434, 065
431, 447
431,149

164, 005
164,175
164,264
161, 977
157,931
155, C64

219, 474 40,516 228,985 72, 234
225, 856 41, 576 230, 714 72,640
229,625 41, 490 232,837 73,037
230,655 41, 433 234, 444 73, 457
230,230 43, 286 239,511 73,908
232, 885 43, 200 242, 240 74, 282

22, 209
22, 069
22, 078
21, 903
21, 831
21, 732

126, 810
127, 770
128,192
128, 992
133, 029
134, 754

7,731
8,235
9,529
10, 092
10,743
11,473

July
Aug
Sept
Oct
Nov
Dec

671,386
684, 081
697,629
696, 301
706,973
715, 227

430, 248
438,146
443,508
447,435
454, 862
459,927

154, 227
154, 283
156, 091
156,174
156,656
161, 081

231,371
238, 084
241,692
245, 587
251,104
251, 800

44,650
45, 778
45,724
45,674
47,102
47, 045

241,138
245,935
254,121
248, 866
252,111
255, 300

74, 803
75, 059
75,411
75, 816
76, 224
76, 602

21,545
21, 370
21, 799
21,123
21, 665
22,187

132,447
136, 329
140,113
136, 890
138, 580
139, 774

12, 342
13,176
16, 797
15, 039
15,642
16,737

720, 563
728, 474
736, 929
733,074
740, 579
748, 002

466,780
470, 766
478, 252
472,193
473, 684
477, 699

161,221
161,817
165, 652
159, 640
159, 391
159,757

257,077
258, 472
262,179
262,180
261, 612
265, 310

48, 483
50, 477
50, 420
50, 373
52, 681
52,632

253,783
257, 707
258, 677
260,881
266, 895
270, 303

76,987
77, 415
77, 804
78, 220
78, 645
78,965

22, 787
22, 597
23, 649
23, 433
22, 419
21, 460

136, 364
139,422
137,956
138, 833
144, 394
146, 448

17,644
18, 273
19,267
20,395
21, 436
23, 430

749,462
763,404
766,971
775,452
782,048
782, 371

481,041
485, 557
485,155
491, 651
493,337
487, 546

160,092
160, 615
160,936
161, 227
161, 548
161,747

266, 586
268, 531
267,865
272,610
271,663
265, 791

54, 363
56,410
56,355
57, 814
60,125
60, 007

268,420
277, 847
281,816
283,801
288,711
294,825

79,281
79, 543
79,7S8
80, 091
80, 331
80, 546

20, 813
22, 224
21,680
24,042
26,624
29, 593

144,665
149, 047
153,271
152,685
154, 812
157, 522

23,660
27,032
27,067
26,983
26, 944
27,164

1978: Jan
Feb
Mar
Apr
May.
June
July...
Aug.
Sept.
Oct.
Nov
Dec

1 Includes Treasury bonds and minor amounts of Panama Canal and postal savings bonds.
2 Nonmarketable certificates of indebtedness, notes, bonds, and bills in the Treasury foreign series and foreign-currencyseries issues.
* Includes Treasury deposit funds and some special issues formerly included in "Other."
* Includes depository bonds, retirement plan bonds, Rural Electrification Administration bonds, State and local bonds,
and special issues held only by U.S. Government agencies and trust funds and the Federal home loan banks.
*Includes $5,610 million in certificates not shown separately.
Note.—Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October 1976 (fiscal year 1977)'
the fiscal year is on an October 1-September 30 basis.
Source: Department of the Treasury.




271

TABLE B-77.— Estimated ownership of public debt securities, 1967-78
[Par values;1 billions of dollars]
Total public debt securities
Held by private investors
End of year or
month

Fiscal year:
1967
1968
1969
1970
1971
1972
1973
1974

Totals

Mutual
savings
State
Miscelbanks CorpoCommercial and in- rations 5 and local Indi- laneous
govern- viduals * invesbanks * surance
ments •
tors s. s
companies

. _- -.

_ _

July
Aug
Sept
Oct
Nov
Dec

46.7
52.2
54.1

204.4
217.0
214.0

55.5
59.7
55.3

13.2
12.5
11.6

11.0
12.0
11.1

23.6
25.1
26.4

70.4
74.2
77.3

30.7
33.4
32.3

370.1
397.3
426.4
457.3
474.2

95.2
102.9
111.5
123.4
138.2

57.7
65.5
71.4
75.0
80.5

217.2
228.9
243.6
258.9
255.6

52.6
61.0
60.9
58.8
53.2

10.4
10.3
10.2
9.6
8.5

8.5
7.4
9.3
9.8
10.8

29.0
25.9
26.9
28.8
28.3

81.8
75.4
73.2
75.9
80.7

35.0
49.1
63.2
76.0
74.2

145.3
149.6
155.5
168.0

84.7
94.4
104.7
115.3

303.2
376.4
438.6
488.3

69.0
92.5
99.8
95.3

10.6
16.0
20.5
20.5

13.2
24.3
23.3
21.5

31.7
39.3
53.0
67.8

87.1
96.4
103.9
109.3

91.5
107.9
138.1
173.9

653.9
663.3
669.2
671.0
672.1
674.4

. .

71.8
76.1
84.8

533.2
620.4
698.8
771.5

.

1977: Jan
Feb
Mar .
Apr
May
June

1978: Jan
Feb
Mar
Apr
May
June

Held by
Federal
, by
Govern- Reserve
Totah
ment
accounts Banks

322.9
345.4
352.9

1975
1976
1977
1978

July
Aug
Sept
Oct
Nov
Dec

Held

144.1
144.4
144.9
145.5
149.4
151.2

94.1
95.8
96.0
99.8
97.4
102.2

415.7
423.1
428.3
425.7
425.3
421.0

102.4
104.4
104.9
104.1
102.6
102.8

18.6
18.8
18.9
18.9
19.0
19.0

29.7
31.0
29.2
29.2
27.6
24.3

44.8
43.3
44.4
48.4
49.1
47.6

101.0
101.5
101.9
102.2
102.7
103.0

119.2
124.1
129.0
122.9
124.3
124.3

673.9
685.2
698.8
697.4
708.0
718.9

148.7
151.9
155.5
152.2
153.9
154.8

98.6
98.4
104.7
94.6
96.5
102.8

426.5
434.9
438.6
450.6
457.6
461.3

100.7
100.4
99.8
99.7
100.6
101.4

19.4
20.2
20.5
20.6
20.9
21.0

23.5
25.0
23.3
23.2
22.8
22.7

47.9
52.1
53.0
54.0
55.3
55.2

103.4
103.7
103.9
104.4
104.9
105.3

131.6
133.5
138.1
148.7
153.1
155.7

721.6
729.8
738.0
736.6
741.6
749.0

151.5
154.2
152.7
153.6
159.1
161.1

97.0
98.5
101.6
103.5
102.8
110.1

473.1
477.1
483.7
479.5
479.7
477.8

100.9
102.2
101.1
100.7
98.4
98.5

20.9
20.8
20.6
20.4
20.5
20.2

23.4
22.3
20.8
19.9
19.7
19.0

56.7
58.6
61.2
61.2
60.2
62.7

106.1
106.6
106.9
107.1
107.7
108.1

165.1
166.6
173.1
170.2
173.2
169.3

750.5
764.4
771.5
776.4
783.0
789.2

159.3
163.7
168.0
166.3
167.4
170.0

108.9
111.7
115.3
115.3
113.3
110.6

482.3
489.0
488.3
494.7
502.3
508.6

97.7
95.8
95.3
94.3
93.5

20.6
20.6
20.5
20.7
20.4

20.0
22.4
21.5
21.0
20.9

61.7
69.2
67.8
67.1
69.1

108.5
108.9
109.3
109.8
110.2

173.9
172.1
173,9
181.?
188.2

1

U.S. savings bonds, series A - F and J, and U.S. savings notes are included at current redemption value.
2 As of July 3 1 , 1974, public debt outstanding has been adjusted to exclude the notes of the International Monetary
Fund to conform with the Budget presentation. This adjustment applies to the 1967-78 data in this table.
s For comparability with 1975-78 published data, published data for 1967-74 have been adjusted to exclude notes of
the International Monetary Fund. These adjustments amounted to $3.3 billion in 1967, $2.2 billion in 1968, and $0.8 billion
in each year 1969 through 1974. These adjustments were necessary in order to add to the total public debt figures as
published by the Department of the Treasury.
4
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-60, which are based on book values and relate only to banks within the United States.
4
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.
7
Includes partnerships and personal trust accounts.
8
Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and brokers,
certain government deposit accounts and government-sponsored agencies, and investments of foreign balances and international accounts in the United States.
Note.—Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis; beginning October 1976 (fiscal year
1977), the fiscal year is on an October 1-September 30 basis.
Source: Department of the Treasury.




272

TABLE B-78.—Average length and maturity distribution of marketable interest-bearing public
debt securities held by private investors, 1967—78

End of year cr month

Maturity class

Amount
outstanding
privately
held

Within
1 year

Ito5
years

5 to 10
years

10 to 20
years

20 years
and over

Millions of dollars
Fiscal year:
1967
1968
1969

Years

1
5

4

2

3

8

3
2

1
11

4,611
6,652
10, 531
14, 805

2
2
2
3

g
7
11
3

7,342
7,291
7,236
7,172
7,180
7,092

8,208
8,860
8,803
8,709
9,746
9,598

2

9

2
2
2

9
9
11
10

32, 521
33, 260
33,067
35,913
32, 858
32,729

8,440
8,512
8,428
8,406
8,364
8,293

9,628
10, 616
10, 531
10,529
11,750
11,646

2

10

3
2

0
11

123,692
130,715
132, 501
130,884
135, 524
137, 543

32, 712
29,853
29,414
31, 816
31, 758
30,458

9,733
9,719
9,635
9,571
9,847
9,766

11,595
12,838
12,669
12,601
13,668
13, 360

2
3
2

11
0
11

3
3

1
1

139,017
136,462
132,993
136,064
133, 876
128,293

30,573
33,603
33, 500
33, 476
33, 695
33,604

11,512
11,407
11,383
12, 746
13, 879
13,833

13, 533
14, 936
14, 805
14, 820
15, 314
15,278

3

56,561
66,746
69,311

53,584
52,295
50,182

21,057
21,850
18,078

6,153
6,110
6,097

12,968
12,670
12,337

1970
1971
1972
1973
1974

157,910
161,863
165, 978
167,869
164, 862

76, 443
74, 803
79, 509
84,041
87,150

57,035
58, 557
57,157
54,139
50,103

8,286
14, 503
16, 033
16, 385
14,197

7,876
6,357
6,358
8,741
9,930

8,272
7,645
6,922
< 564
3,481

1975
1976
1977
1978

210, 382
279, 782
326,674
356, 501

115,677
151, 723
161, 329
163, 819

65,852
89,151
113,319
132, 993

15, 385
24,169
33,067
33, 500

8,857
8,087
8,428
11,383

313,497
319,982
323,604
318,699
318,619
313,485

162,633
165, 942
166,427
162,419
162,211
157, 353

101,626
106, 685
109,983
106, 929
106,823
107, 000

33,688
31,204
31,155
33,469
32,658
32,442

316,177
325,001
326,674
338, 290
343, 870
343, 019

160,332
161, 932
161, 329
167,699
169, 552
171,376

105, 255
110,681
113,319
115,744
121, 346
118,975

355,374
358,320
362,693
355,144
356, 892
353,660

177,642
175,195
178,474
170,272
166, 094
162, 533

358,255
359,919
356, 501
362,443
367, 256
365, 239

163,619
163, 512
163,819
165,337
170, 492
174,231

Feb

Mar.
Apr

_

May

June
July

Aug
Sept...

Oct

Nov.
Dec
1978: Jan

Feb

Mar

Apr

May
June
July
Aug
Sept
Oct.

Nov
Dec

_. .
_ _

Months

5
4

150,321
159,671
156, C08

1977: Jan

Average length

3
3

2

3
2
2

3

3
3
3

3
3

6
3

9

0
U
10

0

1

3
3
4
4

Note.—All issues classified to final maturity.
Through fiscal year 1976, the fiscal year was on a July 1-June 30 basis, beginning October 1976 (fiscal year 1977), the
fiscal year is on an October 1-September 30 basis.
Source: Department cf the Treasury.




273

CORPORATE PROFITS AND FINANCE
T A B L E B-79.—Corporate profits by industry, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits with inventory valuation adjustment and without capital consumption adjustment
Domestic industries
Financial'

Year or
quarter

Total

Total

Nonfinancial

Total

Federal
Reserve
banks

Other

Total

Manufacturing 2

Wholesale
and Utilities 3 Other
retail
trade

Rest
of the
world

1929

10.5

10.2

1.3

0.0

1.3

8.9

5.2

1.0

1.8

0.9

0.2

1933

-1.2

-1.2

.3

.0

.3

-1.5

-.4

-.5

.0

-.7

.0

1939

6.3

6.1

.8

.0

.8

5.3

3.3

.7

1.0

.3

.2

9.8
15.2
20.3
24.4
23.8
19.2
19.3
25.6
33.0
30.8

9.6
15.0
20.1
24.1
23.5
18.9
18.9
24.9
32.2
29.9

1.0
1.1
1.2
1.3
1.6
1.7
2.1
1.7
2.6
3.1

.0
.0
.0
.0
.1

.9
,0

5.5
9.5
11.8
13.8
13.2
9.7
9.0
13.6
17.6
16.2

1.2
1.4
2.2
3.0
3.2
3.3
3.8
4.6
5.5
4.5

1.3
2.0
3.4
4.4
3.9
2.7
1.8
2.2
3.0
3.0

.6
l.i
1.5
1.6
1.6
1.5
2.1
2.9
3.6
3.1

.2
.2

.3
6
1 6
2.0
1.6
2.3
2.9

8.6
14.0
18.9
22.8
21.9
17.3
16.8
23.2
29.6
26.8

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

37.6
42.7
39.8
39.5
37.8
46 7
45.9
45.4
40.8
51.2

36.7
41.5
38.7
38.4
36.4
45.1
44.1
43.5
39.1
49.4

3.1
3.6
4.0
4.5
4.6
4.8
5.0
5.2
5.7
6.8

.2
.3
.4
.4
.3
.5
.6
.6
.7

3.0
3.3
3.7
4.1
4.3
4.5
4.5
4.6
5.1
6.0

33.5
37.9
34.7
33.9
31.8
40.3
39.1
38.3
33.5
42.6

20.9
24.6
21.7
22.0
19.9
26.0
24.7
24.0
19.4
26.2

5.0
5.0
4.8
3.8
3.8
5.0
4.5
4.4
4.6
5.9

4.0
4.6
4.9
5.0
4.7
5.6
5.9
5.8
5.9
7.0

3.6
3.7
3.3
3.1
3.4
3.6
4.1
4.0
3.6
3.5

1.0
1.2
1.1
1.1
1.4
1.6
1.8
1.9
1.7
U

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

48.9
48.7
53.7
57.6
64.2
73.3
78.6
75.6
82.1
77.9

47.0
46.3
51.1
54.9
61.0
70.1
75.9
72.6
78.9
74.2

7.2
7.0
7.3
6.8
6.9
7.5
8.5
9.0
10.4
11.3

1.0
.8
.9
1.0
1.1
1.4
1.7
2.0
2.5
3.1

6.2
6.3
6.4
5.8
5.8
6.2
6.8
7.0
7.9
8.2

39.8
39.3
43.8
48.1
54.1
62.5
67.4
63.6
68.5
62.9

23.9
23.0
26.0
28.7
31.9
38.3
41.6
37.9
41.2
36.8

4.9
4.9
5.7
5.9
7.4
7.9
8.0
8.9
10.1
10.1

7.4
7.8
8.4
9.3
9.9
11.0
11.8
10.7
10.7
10.2

3.5
3.6
3.8
4.2
4.9
5.3
6.0
6.1
6.5
5.8

1.9
2.2
2.6
2.6
3.1
3.2
l.i
3.0
3.2
3.5

1970
1971
1972
1973
1974
1975
1976
1977.. _..
1978 P

66.4
76.9
89.6
97.2
86.5
107.9
141.4
159.1
178 1

62.6
72.4
84.7
90.4
76.9
101.8
133.2
149.5
168 1

12.6
14.1
15.4
16.2
14.4
13.0
17.5
20.9
25 4

3.6
3.3
3.4
4.5
5.7
5.7
6.0
6.2
76

9.0
10.8
12.1
11.7
8.7
7.3
11.6
14.6
17 8

50.1
58.2
69.3
74.1
62.5
88.9
115.6
128.6
142 8

27.1
32.4
40.6
44.1
36.6
48.3
65.6
74.7
84 7

9.4
11.7
13.3
14.7
12.9
20.7
24.0
24.0

8.2
8.3
9.0
8.3
5.6
9.2
13.7
16.1

5.3
5.8
6.4
7.0
7.4
10.7
12.4
13.8

3.8
4.6
4.1
6.(
9.6
6.1
8.2
9.6
10. (

1976: 1

141.2
143.0
144.5
137.0

132.3
135.4
136.3
128.7

15.8
17.0
18.3
19.1

6.0
5.9
6.0
6.1

9.9
11.1
12.3
13.0

116.4
118.4
118.0
109.7

67.0
67.5
65.9
61.9

25.5
24.5
24.5
21.4

12.4
14.3
14.9
13.3

11.5
12.2
12.7
13.0

8.9
7.6
8.2
8.2

144.5
158.5
169.9
163.5

134.8
148.1
159.5
155.6

19.7
19.9
21.9
21.9

6.0
6.2
6.2
6.4

13.7
13.7
15.7
15.5

115.1
128.1
137.6
133.7

66.4
77.4
74.7
80.2

20.6
22.8
30.6
22.1

15.4
14.5
17.5
17.1

12.7
13.5
14.7
14.3

9.7
10.4
10.3
7.9

148.7
180.6
184.5

139.2
168.9
175.4

22.7
24.3
26.0

6.9
7.3
8.0

15.7
17.0
18.0

116.6
144.6
149.4

69.8
87.8
87.1

16.7
22.0
25.8

17.3
19.3
20.7

12.8
15.4
15.8

9.4
11.7
9.1

1940
1941...
1942
1943...
1944
1945
1946
1947
1948
1949

_

llf—
IV....
1977: 1
llf—
IV....
1978: 1

.1
.2
.2

See next page for continuation of table.




274

.2
.3
.4
.7
.8
.8

TABLE B-79.—Corporate profits by industry, 1929-78—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits before deduction of capital consumption allowances, with inventory valuation adjustment
Domestic industries
1

Year or
quarter

Financial
Total

Total
Total

Nonfinancial

Federal
Reserve
banks

Other

Wholesale
and
retail
trade

Utilities 3

Other

Total

Manufacturing 2

Rest
of the
world

1929

14.7

14.4

1.4

0.0

1.4

13.0

7.1

1.3

2.9

1.7

0.2

1933

2.6

2.6

.4

.0

.4

2.2

1.3

-.2

1.1

.0

.0

1939

10.1

9.9

.9

.0

.9

9.0

4.9

1.0

2.0

1.1

.2

1940 . .
1941
1942
1943
1944
1945
1946
1947
1948
1949
..

13.6
19.5
25.4
29.7
29.9
25.5
24.0
31.4
40.0
38.7

13.4
19.3
25.2
29.5
29.6
25.3
23.6
30.7
39.2
37.9

1.1
1.2
1.3
1.4
1.7
1.7
2.2
1.8
2.7
3.3

.0
.0
.0
.0
.1
.1
.1
.1
.2

1.1
1.2
1.3
1.4
1.6
1.6
2.1
1.7
2.5
3.0

12.3
18.1
23.9
28.1
27.9
23.6
21.4
28.9
36.5
34.6

7.2
11.4
14.2
16.6
16.5
13.0
11.2
16.3
20.8
19.8

1.5
1.7
2.6
3.3
3.5
3.6
4.2
5.2
6.2
5.4

2.3
3.1
4.8
5.8
5.5
4.6
3.0
3.6
4.7
4.8

1.4
1.9
2.2
2.4
2.4
2.3
2.9
3.8
4.8
4.6

.2
.2
.2
.2
.3
.2
.4
.7
.8
.8

1950
1951
1952
1953
1954
1955
1956
1957
1958..
1959

46.5
53.0
51.3
52.7
52.8
64.1
64.9
66.3
62.9
74.8

45.5
51.8
50.2
51.6
51.4
62.6
63.1
64.4
61.2
73.0

3.3
3.8
4.2
4.8
4.9
5.2
5.4
5.7
6.1
7.3

.2
.3
.4
.4
.3
.3
.5
.6
.6
.7

3.1
3.5
3.9
4.4
4.6
4.8
4.9
5.0
5.5
6.5

42.2
48.0
46.0
46.8
46.5
57.4
57.7
58.7
55.0
65.7

24.9
29.1
26.9
28.3
27.1
34.3
33.6
33.9
29.8
37.1

6.0
6.2
6.1
5.1
5.2
6.7
6.3
6.5
6.6
8.0

6.1
7.1
7.6
8.1
8.2
9.8
10.3
10.5
10.9
12.5

5.2
5.6
5.4
5.3
5.9
6.6
7.4
7.8
7.6
8.0

1.0
1.2
1.1
1.1
1.4
1.6
1.8
1.9
1.7
1.8

74.1
75.3
84.2
90.0
98.7
110.8
119.3
119.7
130.2
130.9

72.2
72.9
81.5
87.4
95.6
107.5
116.5
116.7
127.0
127.2

7.8
7.7
8.0
7.6
7.9
8.5
9.6
10.2
11.8
13.0

1.0
.8
.9
1.0
1.2
1.4
1.7
2.0
2.5
3.1

6.8
6.9
7.1
6.6
6.7
7.2
7.9
8.2
9.3
9.9

64.4
65.3
73.6
79.8
87.7
99.0
106.9
106.5
115.1
114.2

35.5
35.2
40.2
43.9
48.0
55.9
60.5
58.7
63.9
61.5

7.3
7.4
8.4
8.7
10.4
11.1
11.5
12.7
14.3
14.9

13.3
14.0
15.4
16.8
17.9
19.6
21.3
21.0
21.9
22.4

8.4
8.8
9.6
10.4
11.4
12.3
13.6
14.1
15.0
15.4

1.9
2.3
2.6
2.6
3.1
3.3
2.8
3.0
3.2
3.7

1970
1971
1972
1973
1974
1975
1976
1977
1978 v

123.0
137.8
157.4
170.9
168.1
197.2
238.5
265.1
292 5

119.2
133.3
152.6
164.1
158.5
191.1
230.3
255.5
282.5

14.5
16.3
18.0
19.5
18.3
17.3
22.3
26.0
31 0

3.6
3.4
3.4
4.5
5.7
5.7
6.0
6.2
7.7

11.0
13.0
14.7
14.9
12.6
11.6
16.3
19.8
23 3

104.7
116.9
134.6
144.6
140.2
173.8
208.0
229.5
251 5

53.1
59.8
69.9
75.0
70.5
85.2
105.5
118.6
132.1

14.7
17.5
20.2
22.1
21.3
29.9
34.9
36.2

21.4
23.2
26.3
27.4
26.7
32.3
38.5
42.9

15.5
16.4
18.3
20.2
21.7
26.4
29.1
31.8

3.8
4.6
4.8
6.8
9.6
6.1
8.2
9.6
10. C

1976: 1
ll____
III...
IV....

235.1
238.9
242.6
237.5

226.2
231.3
234.4
229.2

20.4
21.7
23.1
24.0

6.0
5.9
6.0
6.1

14.4
15.8
17.1
17.9

205.8
209.6
211.3
205.3

105.7
106.6
106.3
103.4

35.8
35.3
35.7
32.9

36.4
38.9
39.9
38.8

27.9
28.8
29.5
30.2

8.9
7.6
8.2
8.2

1977: 1
IL___
III...
IV....

246.5
263.5
277.5
272.8

236.8
253.1
267.1
265.0

24.7
25.1
27.1
27.2

6.0
6.2
6.2
6.4

18.7
18.8
20.9
20.8

212.1
228.0
240.0
237.7

108.7
120.7
119.4
125.5

32.4
34.8
43.0
34.8

40.9
41.1
44.8
44.8

30.2
31.4
32.8
32.6

9.7
10.4
10.3
7.9

1978: 1
II-..
III...

260.0
294.0
299.9

250.6
282.2
290.8

28.1
29.8
31.6

7.0
7.3
8.0

21.1
22.5
23.6

222.5
252.4
259.2

116.0
134.8
134.9

29.8
35.5
39.7

45.3
47.7
49.5

31.4
34.4
35.0

9.4
11.7
9.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

..

1
Consists of the following industries: Banking; credit agencies other than banks; security and commodity brokers,
dealers, and services; insurance carriers; regulated investment companies; small business investment companies; and
real estate investment trusts.
2 See Table B-80 for industry detail.
3
Consists of transportation, communication, and electric, gas, and sanitary services.
Note.—The industry classification is on a company basis and is based on the 1972 Standard Industrial Classification
(SIC) beginning 1948, and on the 1942 SIC prior to 1948.

Source: Department of Commerce, Bureau of Economic Analysis.




275

TABLE B-80.—Corporate profits of manufacturing industries, 1929-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits with inventory valuation adjustment and without capital consumption adjustment
Nondurable goods

Durable goods

Year or Total
Electric Motor
quarter manuFood Chem- PetroPrimary Fabri- Machinicals
leum
and
and
ery,
facturand
and Other Total metal
cated
elec- vehicles Other
except
and
ing Total kindred allied
indus- metal electri- tronic
coal
prod- prod- prodtries products
equip- equipucts
cal
ment
ucts
ucts
ment
1929

5.2

2.6

2.6
-.4

1933

-.4

.0

1939

3.3

1.7

1.7

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

5.5
9.5
11.8
13.8
13.2
9.7
9.0
13.6
17.6
16.2

2.4
3.1
4.6
5.7
5.9
5.2
6.6
7.8
10.0
8.1

1.6
1.5

0.8
.7

1.2
1.3

0.7
.8

1.4
2.1

1.8
1.7

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

20.9
24.6
21.7
22.0
19.9
26.0
24.7
24.0
19.4
26.2

2.6
2.8
2.6
2.6
2.9
3.5
3.2
3.1
2.9
3.4

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

1.7
1.8

2.8
1.9

3.7
2.8

8.9
11.4
9.9
10.1
9.4
11.8
11.9
10.7
10.0
12.7

1.9
1.6
1.6
1.4
1.7
1.8
1.6
2.2
1.8
1.8
2.1
2.6

3.1
6.4
7.2
8.1
7.4
4.5
2.4
5.8
7.5
8.1

2.3
2.8
2.3
2.2
2.2
3.0
2.8
2.8
2.5
3.4

2.3
2.7
2.3
2.8
2.7
3.0
3.3
2.6
2.1
2.5

2.7
4.4
3.6
3.3
2.9
3.6
4.1
3.6
3.3
4.2

12.0
13.2
11.7
11.9
10.5
14.3
12.8
13.3
9.3
13.5

2.3
3.1
1.9
2.5
1.7
2.9
3.0
3.0
1.9
2.3

1.1
1.3
1.0
1.0
.9
1.0
1.1
1.1
.9
1.1

1.6
2.3
2.3
1.9
1.7
1.7
2.1
2.0
1.4
2.1

1.2
1.3
1.5
1.4

l'.5
1.3
1.7

3.1
2.4
2.4
2.6
2.1
4.1
2.2
2.6
.9
2.9

23.9
23.0
26.0
28.7
31.9
38.3
41.6
37.9
41.2
36.8

11.9
11.7
11.9
12.8
14.4
15.8
18.0
17.3
18.8
17.7

2.1
2.3
2.3
2.7
2.8
2.6
3.3
3.1
3.2
2.9

3.1
3.1
3.2
3.6
3.9
4.5
4.8
4.2
5.0
4.6

2.5
2.2
2.1
2.1
2.4
2.8
3.2
3.8
3.6
3.3

4.2
4.0
4.3
4.5
5.3
5.8
6.7
6.2
7.0
6.9

12.0
11.3
14.1
15.9
17.5
22.6
23.5
20.6
22.4
19.2

2.1
1.5
1.6
1.9
2.4
3.1
3.6
2.7
2.0
1.4

.9
1.0
1.2
1.2
1.4
2.0
2.4
2.4
2.4
2.0

1.8
1.8
2.3
2.4
3.1
3.8
4.4
4.0
4.1
3.6

1.3
1.3
1.5
1.5
1.6
2.5
3.0
2.9
2.8
2.2

3.0
2.5
4.0
4.9
4.7
6.1
5.1
3.9
5.5
4.8

2.9
3.1
3.5
3.9
4.2
5.0
5.1
4.7
5.7
5.2

1970
1971
1972
1973
1974
1975
1976
1977
1978 v

27.1
32.4
40.6
44.1
36.6
48.3
65.6
74.7
84.7

16.8
17.3
18.1
20.1
25.1
30.1
37.5
39.6
41.8

3.5
3.3
2.8
2.2
3.0
7.9
7.3
5.7

3.9
4.2
5.0
5.8
5.1
5.8
7.9
8.2

3.6
3.6
3.5
4.9
10.2
8.1
11.6
12.8

5.8
6.2
6.8
7.2
6.8
8.2
10.6
12.9

10.3
15.1
22.5
24.0
11.5
18.3
28.1
35.1
42.9

.9
.5
1.6
2.0
4.9
2.9
2.0
1.8

1.2
1.3
2.1
2.6
1.2
2.9
3.8
4.0

2.7
2.7
3.9
4.5
1.5
4.3
5.6
7.1

1.1
1.8
2.9
2.6
2.'l
2.7
3.9

1.4
4.9
5.9
5.8
.2
1.7
7.4
9.5

3.0
3.8
6.0
6.6
3.4
4.3
6.6
8.8

1976: 1 . . .
ll__
ML.
IV..

67.0
67.5
65.9
61.9

39.6
37.7
37.4
35.0

8.4
7.0
8.1
5.8

8.4
8.1
7.9
7.3

11.4
11.4
11.3
12.4

11.5
11.2
10.1
9.6

27.4
29.7
28.5
26.9

2.3
2.8
1.7
1.0

3.7
4.0
4.1
3.6

5.4
5.4
5.7
6.0

2.7
2.6
2.6
2.7

6.9
7.9
7.6
7.1

6.3
7.1
6.8
6.4

1977: 1 . . .
IL.
III..
IV..

66.4
77.4
74.7
80.2

36.4
40.2
40.6
41.1

4.5
5.7
7.0
5.7

8.2
8.5
7.9
8.2

11.8
13.4
12.3
13.8

12.0
12.6
13.4
13.4

29.9
37.2
34.2
39.1

1.0
2.9
.9
2.4

3.7
4.1
3.9
4.2

5.9
6.8
7.3
8.5

3.3
3.9
4.1
4.4

8.8
11.0
9.2
9.1

7.3
8.6
8.7
10.5

1978: 1 . . . 69.8
II.. 87.8
IIL- 87.1

37.0
41.7
42.5

4.3
5.4
6.6

8.1
8.3
8.2

10.4
14.4
14.6

14.3
13.7
13.2

32.8
46.1
44.6

1.2
5.1
5.0

3.2
4.3
4.7

6.4
9.2
7.4

4.3
4.8
5.8

7.9
10.8
10.2

9.7
11.9
11.7

See next page for continuation of table.




276

M

TABLE B-80.—Corporate profits of manufacturing industries, 1929-78—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits before deduction of capital consumption allowances, with Inventory valuation adjustment
Nondurable goods
Year or
quarter

Durable goods

Total
nanuFood Chem- Petroacturicals leum
Primary
and
ing Total kindred and
metal
and
coal Other Total indusprod- allied prodprodtries
ucts
ucts
ucts

Electric Motor
Fabri- Machinand
ery
cated
elec- vehicles Other
except
and
metal electri- tronic
roducts
equip- equipcal
ment
ment

1929

7.1

3.6

1933

1.3

1.1

.2

1939

4.9

2.6

2.3

1940
1941
1942
1943
1944..
1945
1946
1947
1948
1949

3.4
7.2
4.1
11.4
14.2
5.9
16 6 7 i
16.5
7.5
13.0
7.0
11.2
7.9
9.3
16.3
20.8 11.8
19.8 10.1

2.2
2.0

2.0
2.1

3.4
2.6

4.2
3.4

3.8
7.2
8.4
9.5
9.0
6.0
3.3
6.9
9.0
9.7

1.9
1.9

1.0
.9

1.5
1.6

0.8
.9

1.6
2.3

2.2
2.1

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

24.9
29.1
26.9
28.3
27.1
34.3
33.6
33.9
29.8
37.1

11.1
13.9
12.7
13.2
13.1
16.0
16.5
15.7
15.4
18.4

2.1
2.0
2.3
2.3
2.3
2.9
2.5
2.6
3.0
3.6

2.7
3.2
2.8
2.8
3.0
3.9
3.8
3.8
3.6
4.6

3.1
3.6
3.2
3.9
4.1
4.6
4.9
4.4
4.0
4.5

3.3
5.1
4.4
4.1
3.8
4.6
5.2
4.9
4.7
5.7

13.7
15.3
14.2
15.0
14.1
18.3
17.2
18.2
14.4
18.7

2.8
3.6
2.6
3.5
2.9
4.2
4.3
4.5
3.2
3.6

.3
.5
.3
.2
.2
.4
.4
.5
1.3
.5

1.9
2.6
2.7
2.3
2.2
2.3
2.8
2.7
2.2
2.9

1.4
1.5
1.7
1.6
1.5
1.5
1.6
2.0
1.8
2.2

3.3
2.7
2.7
3.0
2.5
4.6
2.9
3.3
1.6
3.7

3.0
3.3
3.3
3.3
3.7
4.4
4.2
4.2
4.2
4.8

1960
1961
1962
1963
1964
1965.....
1966
1967
1968
1969

35.5
35.2
40.2
43.9
48.0
55.9
60.5
58.7
63.9
61.5

17.8
18.0
19.1
20.5
22.6
24.4
27.2
27.1
29.3
29.2

3.2
3.4
3.6
4.0
4.2
4.0
4.9
4.7
4.9
4.8

4.4
4.5
4.8
5.3
5.7
6.5
6.8
6.3
7.3
7.1

4.5
4.3
4.4
4.7
5.1
5.8
6.3
7.2
7.3
7.1

5.8
5.7
6.2
6.5
7.5
8.1
9.2
8.9
9.9
10.2

17.7
17.2
21.1
23.3
25.5
31.4
33.3
31.6
34.6
32.3

3.4
2.9
3.3
3.7
4.3
5.1
5.7
5.0
4.5
4.0

1.4
L.5
L.8
1.9
2.1
2.7
3.1
3.3
3.4
3.0

2.7
2.8
3.4
3.5
4.3
5.2
5.8
5.7
6.0
5.7

1.8
1.9
2.1
2.2
2.3
3.3
3.9
3.9
4.1
3.7

4.0
3.5
5.2
6.3
6.3
8.0
7.5
6.4
8.1
7.5

4.4
4.6
5.3
5.7
6.2
7.1
7.3
7.3
8.6
8.4

1970
1971
1972
1973
1974
1975
1976
1977
1978 p

53.1
59.8
69.9
75.0
70.5
85.2
105.5
118.6
132.1

29.0
30.4
32.2
35.1
40.8
47.2
56.5
60.9
65.1

5.6
5.5
5.1
4.8
5.7
10.9
10.6
9.3

6.6
7.1
8.2
9.0
8.6
9.7
12.5
13.5

7.6
7.9
8.0
9.7
15.1
13.3
17.4
19.3

9.2
9.9
10.8
11.6
11.5
13.3
16.0
18.8

24.1
29.4
37.6
39.9
29.7
38.0
49.0
57.7
67 0

3.5
3.1
4.1
4.7
8.1
6.3
5.6
5.8

2.3
2.4
3.3
3.8
2.6
4.5
5.6
5.9

5.2
5.4
6.8
7.6
4.9
7.9
9.7
11.5

2.8
3.7
5.1
4.9
3.0
5.0
5.7
7.3

3.8
7.3
8.4
8.3
3.1
4.8
10.7
12.9

6.5
7.5
9.9
10.6
8.1
9.5
11.7
14.3

1976: L .
II.
III.
IV.

105.7
106.6
106.3
103.4

57.9
56.5
56.7
54.8

11.5
10.3
11.3
9.1

12.7
12.6
12.7
12.1

17.0
17.1
17.1
18.4

16.6
16.5
15.6
15.2

47.7
50.1
49.6
48.6

5.9
6.4
5.4
4.8

5.4
5.8
5.8
5.4

9.3
9.3
9.8
10.2

5.7
5.6
5.7
5.9

10.0
11.0
11.0
10.8

1977: L .
II.
III.
IV.

108.7
120.7
119.4
125.5

56.7
61.3
62.2
63.2

8.0
9.2
10.7
9.4

13.2
13.7
13.2
13.7

17.8
19.7
19.0
20.5

17.7
18.7
19.3
19.5

52.0
59.3
57.2
62.4

4.9
6.9
4.9
6.5

5.5
5.9
6.0
6.2

10.2
11.3
11.9
12.9

6.6
7.2
7.5
8.0

12.2
14.0
12.6
12.6

11.4
12.0
11.8
11.5
12.6
14.1
14.3
16.1

116.0
1978: 1
II. 134.8
Ill 134.9

59.6
64.8
66.1

8.1
9.2
10.6

13.7
14.2
14.2

17.2
21.4
21.7

20.6
20.0
19.6

56.4
70.0
68.8

5.4
9.4
9.3

5.3
6.4
6.8

11.1
14.0
12.3

7.9
8.4
9.4

11.3
14.2
13.6

15.4
17. 6
17.3

3.4

Note.—The industry classification is on a company basis and is based on the 1972 Standard Industrial Classification
(SIC) beginning 1948, and on the 1942 SIC prior to 1948.
Source: Department of Commerce, Bureau cf Economic Analysis.

277
278-216 O - 79 - 18




TABLE B-81.—Corporate profits with inventory valuation and capital consumption adjustments,
1946-78
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Profits after tax with inventory valuation
and capital consumption adjustments
Corporate
profits with
inventory
valuation
and capital
consumption
adjustments

Year or quarter

Corporate
profits
tax liability
Total

Dividends

Undistributed
profits with
inventory
valuation
and capital
consumption
adjustments

1946
1947...
1948
1949...

16.6
22.2
29.1
26.9

9.1
11.3
12.4
10.2

7.5
10.9
16.7
16.7

5 6
6.3
7.0
7.2

2 0
4.6
9.7
9.5

1950.
1951
1952
1953
1954

33.7
38.1
35.4
35.5
34.6

17.9
22.6
19.4
20.3
17.6

15.7
15.5
16.0
15.2
17.0

8.8
8.5
8.5
8.8
9.1

6.9
7.0
7.5
6.4
7.9

44.6
42.9
42.1
37.5
48.2

22.0
22.0
21.4
19.0
23.6

22.6
20.9
20.6
18.5
24.6

10.3
11.1
11.5
11.3
12.2

12.2
9.8
9.1
7.2
12.4

46.6
46 9
54.9
59.6
67.0

22.7
22 8
24.0
26.2
28.0

23.9
24 1
30.9
33.4
39.0

12.9
13.3
14.4
15.5
17.3

11.0
10.8
16.5
17.9
21.7

77.1
82.5
79.3
85 8
81.4

30.9
33.7
32.5
39 4
39.7

46.2
48.9
46.8
46 4
41.8

19.1
19.4
20.1
21.9
22.6

27.1
29.4
26.7
24.4
19.2

67.9
77.2
92.1
99.1
83.6

34.5
37.7
41.5
48.7
52.4

33.4
39.5
50.5
50.4
31.2

22.9
23.0
24.6
27.8
31.0

10.5
16.5
25.9
22.6
.2

95.9
127.0
144.2
160.0

49.8
64.3
71.8
84.1

46.1
62.7
72.3
76.0

31.9
37.9
43.7
49.3

14.2
24.8
28.7
26.7

126.8
128.6
130.0
122.5

63.6
66.3
64.7
62.4

63.3
62.3
65.3
60.1

34.5
37.2
38.4
41.4

28.7
25.1
26.9
18.7

129.9
143.7
154.8
148.2

68.3
72.3
72.8
73.9

61.6
71.4
82.1
74.3

41.5
42.7
44.1
46.3

20.1
28.7
38.0
28.0

132.6
163.4
165.2

70.0
85.0
86.2

62.6
78.4
79.0

47.0
48.1
50.1

15.6
30.3
29.0

..

1955
1956.
1957
1958
1959...
I960
1961
1962 . .
1963
1964

. . . .

1965
1966
1967
1968
1969 . .
1970
1971
1972
1973
1974
1975
1976
1977
1978

.
.

.

.

P

1976: 1

II

- -

-

-

III

IV
1977: 1

II
III
IV

1978: 1

||
III

. _
_

Source: Department of Commerce, Bureau of Economic Analysis.




278

TABLE B-82.—Sales, profits, and stockholders1 equity, all manufacturing corporations, 1947-78
[Billions of dollars]
All manufacturing
corporations
Year or
quarter

Nondurable goods
industries

Durable goods industries

Profits

Sales
(net)

Profits
Profits
Stock- Sales
StockStockholders' (net) Before After holders' Sales Before After holders'
Before After equity 2
equity 2 (net) income income equity >
income income
income income
taxes i taxes
taxes 1 taxes
taxes 1 taxes

1947
1948
1949

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

1950
1951
1952
1953.
1954

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

83.3
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
55
5.8
5.6

39.9
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
9.6

6.1
5.7
52
55
5.6

43.5
51.1
53 9
55.7
58.2

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
78
7.5
6.9
8.3

61.3
66 4
70.6
74.6
79.2

1960
1961.
1962
1963
1964.

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
15.1
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.
1966
1967
1968
1969..

492.2
554.2
575.4
631.9
694.6

46.5
51.8
47.8
55.4
58.1

27.5
30.9
29.0
32.1
33.2

211 7
230.3
247.6
265 9
289.9

257.0
291.7
300.6
335.5
366.5

26.2
29.2
25.7
30.6
31.5

14.5
16.4
14.6
16.5
16.9

105.4
115.2
125.0
135.6
147.6

235.2
262.4
274.8
296 4
328.1

20.3
22.6
22.0
24.8
26.6

13.0
14.6
14.4
15.5
16.4

106.3
115.1
122.6
130.3
142.3

708.8
751.4
849.5
1,017.2

48.1
53.2
63.2
81.4

28.6
31.3
36.5
48.1

306 8
320 9
343.4
374.1

363.1
382.5
435.8
527.3

23.0
26.5
33.6
43.6

12.9
14.5
18.4
24.8

155.1
160.6
171.4
188.7

345.7
368.9
413.7
489.9

25.2
26.7
29.6
37.8

15.7
16.7
18.0
23.3

151.7
160.3
172.0
185.4

275.1

21.4

13.0

386.4 140.1

10.8

6.3

194.7 135.0

10.6

6.7

191.7

1,060.6
1,065.2
1,203.2
1,328.1

92.1
79.9
104.9
115.1

58.7
49.1
64.5
70.4

395.0
423.4
462.7
496.7

529.0
521.1
589.6
657.3

41.1
35.3
50.7
57.9

24.7
21.4
30 8
34.8

531.6
544.1
613.7
670.8

51.0
44.6
54.3
57.2

34.1
27.7
33.7
35.5

199.0
215.3
238.4
256.8

1973:1V

236.6

20.6

13.2

368.0 122.7

10.1

6.2

185.8 113.9

10.5

7.0

182.1

1974:1
II
Ill
IV

242.0
269.4
272.1
277.0

21.2
25.9
25.0
20.1

13.5
16.3
15.5
13.4

379.0
389.9
402.7
408.4

120.3
136.8
134.8
137.1

9.5
12.6
10.5
8.6

5.7
7.6
6.2
5.2

189.4
194.1
199.9
200.8

121.7
132.6
137.3
140.0

11.7
13.3
14.5
11.5

7.8
8.7
9.4
8.2

189.6
195.8
202.8
207.6

1975: |
II
Ill
IV

247.1
265.8
271.0
281.3

15.4
20.2
21.7
22.6

9.3
12.4
13.2
14.2

410.7
420.2
427.4
435.5

121.3
132.4
131.0
136.3

7.0
9.3
9.1
10.0

4.1
5.7
5.5
6.2

201.7
207.3
209.7
213.7

125.8
133.3
140.0
145.0

8.4
10.9
12.7
12.6

5.2
6.8
7.7
8.1

209.0
212.9
217.6
221.8

1976: 1 „
||
III
IV..
1977: 1
II
III
IV

284.2
307.6
301.6
309.8

24.5
29.3
26.2
24.9

14.8
18 1
16.0
15.6

446.5
460 1
468.9
475.3

137.8
153.7
146.2
151.8

11.3
14.8
12.2
12.4

6.7
9.0
7.4
7.7

216.7
223.4
227.1
229.9

146.3
153.9
155.4
158.1

13.2
14.5
14.0
12.6

8.1
9.1
8.6
7.9

229.8
236.7
241.7
245.5

311.5
338.6
331.7
346.2

25.6
32.4
27.3
29.9

15.6
19.7
16.7
18.4

479.8
492.9
502.4
511.7

151.2
169.5
163.8
172.7

12.5
16.9
13.0
15.5

7.5
10.2
7.8
9.4

230.8
238.4
243.1
247.5

160.3
169.1
167.9
173.5

13.0
15.5
14.3
14.3

8.1
9.5
8.9
9.0

249.1
254.5
259.3
264.2

340.4
377.9
377.1

26.9
36.1
33.5

16.1
22.2
20.4

519.3 169.1
534.1 194.1
548.8 188.7

13.6
19.9
17.1

7.9
12.0
10.3

251.1 171.3
259.9 183.8
267.7 188.5

13.3
16.2
16.4

8.1
10.2
10.1

268.2
274.2
281.1

1955
1956.
1957..
1958
1959.

.

. .

1970..
19711972
1973

.

1973: IV
New series:
1974
1975
1976
1977. .

1978: 1
II
III

..

196.0
208.1
224.3
239.9

1
In the old series, "income taxes" refers to Federal income taxes only, as State and local income taxes had already
been deducted. In the new series, no income taxes have been deducted.
2
Annual data are average equity for the year (using four end-of-quarter figures).
Note.—Data are not necessarily comparable from one period to another due to changes in accounting procedures,
industry classifications, sampling procedures, etc. For explanatory notes concerning compilation of the series, see "Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations," Federal Trade Commission.
Source: Federal Trade Commission.




279

T A B L E B-83.—Relation of profits

after taxes to stockholders* equity and to sales, all
turing corporations,
1947-78

Ratio of profits after
income taxes (annual rate)
to stockholders' equity—percent»

manufac-

Profits after income taxes
per dollar of sales—cents

Year or quarter
All
manufacturing
corporations

Durable

Nondurable
goods
industries

All
manufacturing
corporations

Durable
goods
industries

Nondurable
goods
industries

15.6
16.0
11.6

1947
1948
1949

14.4
15.7
12.1

16.6
16.2
11.2

6.7
7.0
5.8

6.7
7.1
6.4

6.7
6.8
5.4

1950.
1951
1952
1953
1954

.

15.4
12.1
10.3
10.5
9.9

16.9
13.0
11 1
11.1
10.3

14.1
11.2
9.7
9.9
9.6

7.1
4.8
4.3
4.3
4.5

7.7
5.3
4.5
4.2
4.6

6.5
4.5
41
4.3
4.4

1955
1956
1957
1958
1959

.

12.6
12.3
10.9
8 6
10.4

13 8
12.8
11.3
8 0
10.4

11.4
11.8
10.6
9.2
10.4

5.4
5.3
4.8
4 2
4.8

5.7
5.2
4.8
3.9
4.8

5.1
5.3
4.9
4 4
4.9

9.2
8.9
9.8
10.3
11.6

8 5
8.1
9.6
10 1
11.7

9.8
9.6
9.9
10.4
11.5

4 4
4.3
4.5
4 7
5.2

4.0
3.9
4.4
4.5
5.1

4.8
4.7
4.7
4.9
5.4

13.0
13.4
11 7
12.1
11.5

13.8
14.2
11 7
12 2
11.4

12.2
12.7
11 8
11.9
11.5

5.6
5.6
5 0
5 1
4.8

5.7
5.6
4.8
4.9
4.6

5.5
5,6
5.3
5.2
5.0

9.3
9.7
10.6
12.8

8.3
9.0
10.8
13.1

10.3
10.3
10.5
12.6

4.0
4.1
4.3
4.7

3.5
3.8
4.2
4.7

4.5
4.5
4.4
4.8

13.4

12.9

14.0

4.7

4.5

5.0

14.9
11.6
13.9
14.2

12.6
10.3
13.7
14.5

17 1
12.9
14.2
13.8

5.5
4.6
5.4
5.3

4.7
4.1
5.2
5.3

6.4
5.1
5.5
5.3

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973

. .

. .

.

1973: IV
New series:
1974
1975
1976
1977

_.

1973: IV

14.3

13.3

15.3

5.6

5.0

6.1

1974: 1
II . .
Ill
IV

14.3
16.7
15 4
13.2

12.1
15.6
12.3
10.4

16.4
17.8
18.5
15.8

5.6
6.0
57
4.8

4.8
5.5
4.6
3.8

6.4
6.6
6.8
5.9

1975: 1
II
III
IV

9.0
11.8
12.4
13.1

8.1
10.9
10.5
11.6

10.0
12.8
14.1
14.5

3.7
4.7
4.9
5.1

3.4
4.3
4.2
4.5

4.1
5.1
5.5
5.6

1976: 1
II .
Ill
IV _

13.3
15.7
13.7
13.1

12.4
16.1
13 0
13.4

14.2
15.4
14 3
12.9

5.2
5.9
5.3
5.0

4.9
5.8
5 1
5.1

5.6
5.9
5.6
5.0

1977: 1. .
||
11
1
IV

13.0
16.0
13.3
14.4

13.0
17.1
12.9
15.1

13.0
15.0
13 7
13.7

5.0
5.8
5.0
5.3

5.0
6.0
4.8
5.4

5.0
5.6
5.3
5.2

12.4
16.6
14.9

12.7
18.5
15.4

12.1
14.8
14.4

4.7
5.9
5.4

4.7
6.2
5.5

4.7
5.5
5.4

1978: 1. _
II
Ill
.

_.

i Annual ratios based on average equity for the year (using four end-of-quarter figures). Quarterly ratios based on equity
at end of quarter only.
Note.—Based on data jn millions of dollars.
See Note, Table B-82.
Source: Federal Trade Commission.




280

TABLE B-84.—Relation of profits after taxes to stockholders' equity and to sales, all manufacturing corporations, by industry group, 1977-78
Ratio of profits after income
taxes (annual rate) to stockholders' equity—percent1

Profits after income taxes per
dollar of sales—cents

Industry
1978

1977

III

IV

13.3

14.4

12.9

15.1

17 5
-1.0

13.9
5.5

-4.1
4.9

1977

1978

III

IV

14.9

5.0

5.3

4.7

5.9

5.4

15.4

4.8

5.4

4.7

6.2

5.5

19.1
12.6

21.4
10.0

6.4
-.4

5.3
2.4

3.3
1.6

6.7
4.7

7.5
3.9

2.7
6.1

13.1
11.6

10.5
9.1

-1.7
2.5

2.5
2.1

1.1
2.9

4.6
5.0

3.9
3.9

15.1
17.8
16.9
16.6

12.5
14.4
14.8
16.0

19.6
20.3
17.6
19.6

16.4
16.1
17.6
12.8

4.7
7.5
5.2
3.9

4.6
8.0
5.8
4.7

4.0
6.7
5.2
4.7

5.6
8.6
5.9
5.2

4.8
7.1
6.1
4.0

11.3

18.1

17.0

22.1

11.0

3.8

5.2

5.1

6.0

3.6

14.7

15.0

14.4

18.0

17.6

4.3

4.1

4.2

5.0

5.1

Instruments and related products.. 17.2
Other durable manufacturing products
18.5

19.8

14.9

19.8

18.4

9.1

10.3

8.2

10.0

9.3

15.4

12.9

20.6

18.4

4.8

4.0

3.7

5.2

4.8

13.7

13.7

12.1

14.8

14.4

5.3

5.2

4.7

5.5

5.4

13.1
15.8
9.7
12.8
17.8
14.8

13.6
18.6
11.1
11.8
20.8
13.8

11.4
16.4
9.0
11.3
14.6
14.3

15.4
18.9
13.2
14.2
19.8
16.5

13.4
19.5
11.8
12.2
18.5
15.1

3.1
8.1
2.8
5.4
6.0
7.1

3.2
9.2
3.0
4.9
6.5
6.8

2.7
9.0
2.6
4.9
4.9
6.8

3.5
9.9
3.6
5.7
6.4
7.4

3.1
10.1
3.2
5.0
6.1
7.1

12.3
18.1

11.9
17.4

13.1
19.8

14.8
20.0

13.2
18.8

6.0
12.1

6.0
11.7

6.2
12.9

6.7
13.5

6.3
12.5

13.7

12.9

10.9

13.2

14.1

7.7

7.0

6.2

7.3

7.5

10.9

10.2

10.0

11.6

10.8

3.6

3.3

3.3

3.5

3.4

11.1

15.5

14.0

13.1

16.9

2.3

3.3

3.2

2.9

3.5

All manufacturing corporations
Durable goods industries
Stone, clay, and glass products
Primary metal industries
Iron and steel
Nonferrous metals..
Fabricated metal products
Machinery, except electrical
Electrical and electronic equipment.
Transportation equipment2
Motor vehicles and ei, .
Aircraft, guided missiles, and
parts

Nondurable goods industries..
Food and kindred products
Tobacco manufactures
Textile mill products
Paper and allied products
Printing and publishing
Chemicals and allied products2
Industrial chemicals and synthetics
Drugs
Petroleum and coal products
Rubber and miscellaneous plastics
products
Other nondurable manufacturing
products

II

III

12.4

16.6

12.7

18.5

7.6
3.9

6.1
4.4

15.3
16.3
14.9
12.2

1

Ratios based on equity at end of quarter.
Includes other industries not shown separately.
Source: Federal Trade Commission.

3




281

III

T A B L E B-85.—Sources and uses of funds, nonfarm nonfinancial corporate business,

1946-78

[Billions of dollars; quarterly data at seasonally adjusted annual rate?]
Sources

Uses
E
Ixterna

Year or quarter

Credit market funds

Total Internal1
Total

Total

Long- Shortterm 2 terms

Other

Total

Purchase
of
physical 4
assets

Increase
in
financial
assets

Discrepancy
(sources
less
uses)

18.4
26.7
28.5
19.7

7.8
12.6
18.8
19.3

10.6
14.1
9.8
.4

6.9
8.4
6.5
3.1

3.6
5.4
6.7
4.9

3.3
3.0
-.2
-1.8

3.7
5.8
3.3
-2.7

17.1
25.3
24.9
17.9

18.5
17.0
19.9
14.4

-1.4
8.4
5.0
3.5

1.3
1.4
3.6
1.9

41.8
35.9
29.2
27.3
29.1

17.8
19.7
21.2
21.1
23.5

24.0
16.2
8.0
6.1
5.7

8.1
10.6
9.5
5.7
6.4

4.2
6.4
8.0
6.0
6.7

3.9
4.1
1.4
-.3
-.3

15.9
5.6
-1.4
.5
-.8

39.9
37.2
29.1
27.7
27.7

23.6
29.8
24.5
25.4
22.8

16.4
7.4
4.6
23
4.9

1.9
-1.3
.1
-.5
1.4

1955
1956
1957
1958
1959

52.0
44.0
42.3
41.3
55.2

28.8
28.7
30.4
29.6
35.0

23.2
15.4
11.9
11.7
20.2

10.2
12.9
12.3
10.5
12.5

6.4
7.5
10.4
10.5
8.1

3.8
5.4
1.9
-.0
4.4

13.0
2.5
-.4
1.2
7.7

49.2
41.1
39 4
38.7
51.7

32.7
37.1
35.2
27.9
37.5

16.5
4.0
4.2
10.8
14.2

2.8
3.0
2.9
2.5
3.5

1960
1961
1962
1963
1964

47.6
54.3
58.8
66.0
72.3

34.7
35.3
41.6
44.5
50.1

12.9
19.1
17.2
21.4
22.2

11.9
12.4
12.3
12.5
14.7

7.5
10.8
9.4
8.4
8.8

4.5
1.6
3.0
4.0
5.9

1.0
67
4.9
9.0
7.4

40.6
50 4
54.9
59.1
64.1

38.0
37.2
43.8
44.9
50.7

2.7
13 2
11.1
14.2
13.4

7.0
39
3.9
6.9
8.2

90.9
96.9
93.7
114.5
118.4

56.1
60.5
61.3
62.3
61.7

34.9
36.4
32.4
52.1
56.7

20.5
25.5
29.3
31.8
38.2

9.3
15.9
21.6
18.8
20.7

11.2
9.6
7.8
13.0
17.6

14.4
10.9
3.1
20.3
18.5

82 2
90 5
87.5
105.3
113.1

62 0
75.7
73.0
77.2
84.3

20 2
14.8
14.5
28.2
28.8

8 8
6.4
6.2
9.1
5.3

104.3
127.1
161.7
199.8
190.8

58.9
68.6
80.8
83.8
75.7

45.5
58.5
80.9
115.9
115.1

40.7
44.5
58.3
72.7
81.8

32.1
40.6
40 6
37.0
39.1

86
3.9
17 6
35.7
42.6

48
14.1
22 7
43.3
33.4

95 9
119.6
145 8
185.6
179.0

80.3
86.0
100 3
123.3
134.7

15.6
33.6
45.6
62.3
44.4

8.4
7.5
15.9
14.2
11.8

143.8
205.0
239.0

106.8
124.7
135.3

37.0
80.3
103.6

37 0
58.2
78.7

49 3
48.8
46.2

-12 3
9.5
32.6

22.0
24.9

o

131 9
184.9
212.3

99 9
141.2
164.6

32 0
43.7
47.8

11 9
20.1
26.7

1977: 1
II...
Ill
IV

244.3
198.6
266.0
_ 247.1

123.8
134.9
145.5
137.3

120.5
63.7
120.6
109.9

75.9
63.7
80 1
95.2

34.4
35.3
53 5
61.5

41.6
28 5
26 6
33.7

44.6
— 0
40 5
14.7

214.6
177 3
234 6
222.7

152.5
162 4
175 2
168.0

62.1
14 9
59 4
54.7

29.6
21.3
31 4
24.4

1978: 1
II
III

283.9
_ 274.1
289.4

127.2
144.1
151.6

156.7
130.0
137.8

102.2
82.8
80.2

40.3
53.7
54.5

61.9
29.1
25.7

54.5
47.2
57.6

263.3
260.8
272.6

179.8
199.9
194.8

83.5
61.0
77.8

20.6
13.2
16.8

1946
1947
1948
1949

.

1950
1951
1952
1953
1954

1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977

.

.
...

.

.

* Undistributed profits (after inventory valuation and capital consumption adjustments), capital consumption allowances,
and foreign branch profits.
2
Stocks, bonds, and mortgages.
3 Bank loans, commercial paper, finance company loans, bankers' acceptances, and Government loans.
4
Plant and equipment, residential structures, inventory investment, and mineral rights from U.S. Government.
Source: Board of Governors of the Federal Reserve System.




282

TABLE B-86.— Current assets and liabilities of U.S. corporations, 1939-78
[Billions of dollars]
Current assets
End of year
or quarter

Total

Current liabilities

Net
CurU.S.
Notes
Other work- rent
Notes
Other
Governand
ing
Inven- current Total
and
current capital ratios
Cash* ment accounts tories
accounts liabilsecuri- receivassets
payable
ities
ties 2
able
All corporations4

SEC series: *
1939

54.5

10.8

2.2

22.1

18.0

1.4

30.0

21.9

8.1

24.5

1 817

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

60.3
72.9
83.6
93.8
97.2
97.4
108.1
123.6
133.0
133.1

13.1
13.9
17.6
21.6
21.6
21.7
22.8
25.0
25.3
26.5

2.0
4.0
10.1
16.4
20.9
21.1
15.3
14.1
14.8
16.8

24.0
28.0
27.3
26.9
26.5
25.9
30.7
38.3
42.4
43.0

19.8
25.6
27.3
27.6
26.8
26.3
37.6
44.6
48.9
45.3

1.5
4
3
3
4
> 4
7
6
6
4

32.8
40.7
47.3
51.6
51.7
45.8
51.9
61.5
64.4
60.7

23.2
26.4
26.0
26.3
26.8
25.7
31.6
37.6
39.3
37.5

9.6
14.3
21.3
25.3
24.9
20.1
20.3
23.9
25.0
23.3

27.5
32.3
36.3
42.1
45.6
51.6
56.2
62.1
68.6
72.4

1.838
1.791
1.767
1.818
1.880
2.127
2.083
2.010
2.065
2.193

1950
1951
1952
1953
1954
1955
1956
1957 _
1958
1959

161.5
179.1
186.2
190.6
194.6
224.0
237.9
244.7
255.3
277.3

28.1
30.0
30.8
31.1
33.4
34.6
34.8
34.9
37.4
36.3

19.7
20.7
19.9
21.5
19.2
23.5
19.1
18.6
18.8
22.8

56.8
61.5
67.4
68.5
73.6
88.9
97.7
102.2
109.7
120.6

55.1
64.9
65.8
67.2
65.3
72.8
80.4
82.2
81.9
88.4

1.7
2.1
2.4
2.4
3.1
4.2
5.9
6.7
7.5
9.1

79.8
92.6
96.1
98.9
99.7
121.0
130.5
133.1
136.6
153.1

48.3
54.9
59.3
59.5
61.7
76.1
83.9
86.6
90.4
101.0

31.6
37.8
36.8
39.4
38.0
45.0
46.6
46.5
46.2
52.0

81.6
86.5
90.1
91.8
94.9
103.0
107.4
111.6
118.7
124.2

2.024
1.934
1.938
1.927
1.952
1.851
1.823
1.838
1.869
1.811

1960
1961

289.0
306.8

37.2
41.1

20.1
20.0

129.2
139.2

91.8
95.2

10.6
11.4

160.4
171.2

106.8
114.6

53.6
56.6

128.6
135.6

1.802
1.792

___
__.

Nonfinancial corporations 6
SEC series:«
1961...
1962
1963
1964
1965
1966
1967
1968
1969

254.7
269.7
288.2
305.6
336.0
364.0
386.2
426.5
473.6

34.8
37.1
39.8
40.5
42.8
41.9
45.5
48.2
47.9

16.5
16.8
16.7
15.8
14.4
13.0
10.3
11.5
10.6

97.9
103.2
110.5
119.9
134.1
146.6
155.3
173.9
197.0

95.0
100.5
106.8
113.1
126.6
142.8
153.1
166.0
186.4

10.5
12.1
14.4
16.3
18.1
19.7
22.0
26.9
31.6

123.7
132.4
145.5
156.6
178.8
199.4
211.3
244.1
287.8

84.4
88.7
97.0
104.9
121.5
137.5
147.1
168.8
199.2

39.3
43.7
48.5
51.7
57.3
61.9
64.2
75.3
88.6

131.0
137.3
142.7
149.0
157.2
164.6
174.9
182.4
185.7

2.059
2.037
1.981
951
.879
8?f>
.878
747
.646

492.3
529.6
599.3
697.8
790.7

50.2
53.3
59.0
66.3
71.1

7.7
11.0
10.6
12.8
12.3

206.1
221.1
248.2
288.5
322.1

193.3
200.4
225.7
263.9
313.6

35.0
43.8
55.8
66.4
71.7

304.9
326.0
375.6
450.9
530.4

211.3
220.5
282.9
340.3
402.3

93.6
105.5
92.7
110.7
128.1

187.4
203.6
223.7
246.9
260.3

.615
6?S
595
L.548
491

734.6
756.3
823.1
900.1

73.0
80.0
86.8
94.2

11.3
19.6
26.0
20.9

265.5
272.1
292.4
325.7

318.9
314.7
341.4
375.0

65.9
69.9
76.4
84.3

451.8
446.9
487.5
543.2

272.3
261.2
273.2
306.8

179.5
185.7
214.2
236.3

282.8
309.5
335.6
357.0

.6?6
693
688
.657

1977- 1
IL.
Ill
IV.

842.0
856.4
880.3
900.1

80.8
83.1
83.4
94.2

26.8
22.1
21.5
20.9

304.1
312.8
326.9
325.7

352.1
358.8
367.5
375.0

78.3
79.6
81.0
84.3

502.6
509.5
528.9
543.2

280.2
286.8
297.8
306.8

222.4
222.7
231.1
236.3

339.5
346.9
351.4
357.0

675
.681
1.664
1.657

1978: 1
IL.

924.2
953.6

88.5
90.9

20.9
19.7

338.3
356.8

389.7
399.1

86.8
87.0

570.4
590.6

317.2
331.4

253.2
259.2

353.8
363.0

1.620
1.615

1970
1971
1972
1973
1974
FTC-FRB series: t
1974
1975 1976
1977

1
8
3

Includes time certificates of deposit.
Includes Federal agency issues.
Total current assets divided by total current liabilities.
« Excludes banks, savings and loan associations, and insurance companies.
5
Based on data from "Statistics of Income," Department of the Treasury.
6
Excludes banks, savings and loan associations, insurance companies, investment companies, finance companies
(personal and commercial), real estate companies, and security and commodity brokers, dealers, and exchanges.
7
Based on data from "Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations," Federal
Trade Commission. See "Federal Reserve Bulletin," July 1978, for details regarding the series.
Note.—SEC series not available after 1974.
Sources: Board of Governors of the Federal Reserve System, Federal Trade Commission, and Securities and Exchange
Commission.




283

T A B L E B-87.—State and municipal and corporate securities offered^ 1934—78
[Millions of dollars]
Corporate securities offered for cash

Year or quarter

State and
municipal
securities
offered
for cash
(principal
amounts)

Type of corporate security
Total
corporate
offerings

Common
stock

Preferred
stock

Bonds
and
notes

Industry of corporate issuer

Manufacturing!

Electric,
gas
and
water *

Transportation *

Communication

Other

1934..

939

397

19

372

67

133

176

1939..

1,128

2,164

87

98

1,979

604

1,271

186

103

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
163

183
167
112
124
369

2,386
2,389
917
990
2,670

992
848
539
510
1,061

1,203
1,357
472
477
1,422

324
366
48
161
609

159
96
4
21
109

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
891
779
614
736

758
1,127
762
492
425

4,855
4,882
5,036
5,973
4,890

2,026
3,701
2,742
2,226
1,414

2,319
2,158
3,257
2,187
2,320

1,454
711
286
755
800

902
571

211
329
293
1,008
946

1950..
1951.
1952..
1953.
1954..

3,532
3,189
4,401
5,558
6,969

6,362
7,741
9,534
8,898
9,516

811
1,212
1,369
1,326
1,213

£3
838
564
489
816

4,920
5,691
7,601
7,083
7,488

1,200
3,122
4,039
2,254
2,268

2,649
2,455
2,675
3,029
3,713

813
494
992
595
778

399
612
760
882
720

1,300
1,058
1,068
2,138
2,037

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

2,994
3,647
4,234
3,515
2,073

2,464
2,529
3,938
3,804
3,258

893
724
824
824
967

1,132
1,419
1,462
1,424
717

2,757
2,619
2,426
1,991
2,733

1960.
1961.
1962.
1963.
1964.

7,230
8,360
8,558
10,107
10, 544

10,154
13,165
10, 705
12,211
13,957

1,664
3,294
1,314
1,011
2,679

409
450
422
343
412

8,081
9,420
8,969
10, 856
10,865

2,152
4,077
3,249
3,514
3,046

2,851
3,032
2,825
2,677
2,760

718
694
567
957
982

1,050
1,834
1,303
1,105
2,189

3,383
3,527
2,761
3,957
4,980

1965.
1966.
1967.
1968.
1969..

11,148
11,089
14,288
16,374
11,460

14,782
17, 385
24,014
21,261
25,997

1,473
1,901
1,927
3,885
7,640

724
580
881
636
691

12, 585
14,904
21, 206
16,740
17,666

5,414
7,056
11,069
6,958
6,346

2,934
3,666
4,935
5,293
6,715

702
1,494
1,639
1,564
1,779

945
2,003
1,975
1,775
2,172

4,787
3,167
4,396
5,671
8,985

1970..
1971..
1972..
1973..
1974..

17,762
24, 370
22,941
22,953
22, 824

37,451
43,229
39,705
31,680
37, 729

7,037
9,485
10,707
7,642
3,979

1,390
3,683
3,371
3,341
2,253

29,023
30, 061
25,628
20, 700
31, 494

10,647
11,651
6,398
4,832
10, 408

11,009
11,721
11,314
10, 269
12, 837

1,253
1,148
860
811
1,005

5,291
5,840
4,836
4,872
3,930

9,252
12, 867
16,298
10,897
9,551

1975..
1976..
1977..

29, 326
33,845
45,060

52, 539
52, 290
52,062

7,414
8,304
8,135

3,459
2,803
3,878

41, 666
41,182
40,050

18, 651
15, 496
13,776

15, 894
14 414
13,711

2,635
3,626
1,802

4,464
3,562
4,442

10,895
15,190
18,333

1977: I...
II..
III.
IV..

10,533
13,353
10,891
10,283

12,636
13,021
11,408
14,997

1,866
2,167
1,026
3,076

840
707
1,189
1,142

9,930
10,148
9,194
10,778

3,030
3,439
3,252
4,055

3,048
4,126
2,626
3,911

388
405
502
507

1,419
1,060
643
1,320

4,753
3,990
4,388
5,202

1978: I...

10,316
12, 757
11,994

9,988
12,107
10,887

1,524
1,707
1,876

457
1,211
341

8,007
9,189
8,670

2,218
2,898
2,534

2,367
3,747
3,012

224
677
471

844
384
1,120

4,335
4,398
3,750

1
Prior to 1948, also includes extractive, radiobroadcasting, airline companies, commercial, and miscellaneous company
issues.
* Prior to 1948, also includes telephone, street railway, and bus company issues,
s Prior to 1948, includes railroad issues only.

Note.—Covers 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, and issues to be sold over an extended period, such as employee-purchase
plans. Closed-end investment company issues are included beginning 1973.
Sources: Securities and Exchange Commission, "The Commercial and Financial Chronicle" and " T h e Bond Buyer."




284

TABLE B-88.—Common stock prices and yields,

1949-78
Common stock yields
(percent) *

Common stock prices1
Year
or
quarter

New York Stock Exchange indexes
(December 31,1965=50)*
Composite

Industrial

Transportation

Utility

Finance

DowJones
ndustrial
average 3

Standard
& Poor's
omposite Dividendindex
price
1941-43=
ratio •
10)*

Earningsprice
ratio'

1949

9.02

179 48

15 23

6 59

15 48

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

10 87
13.08
13.81
13.67
16.19
21.54
24.40
23 67
24.56
30.73

216 31
257.64
270.76
275.97
333.94
442.72
493.01
475.71
491.66
632.12

18 40
22.34
24.50
24.73
29.69
40.49
46.62
44.38
46.24
57.38

6 57
6 13
5.80
5.80
4.95
4.08
4 09
4.35
3.97
3.23

13 99
11 82
9.47
10.26
8 57
7.95
7 55
7.89
6.23
5.78

1960
1961
1962
1963
1964
1965
1966. .
1967
1968
1969

30 01
35.37
33.49
37.51
43.76
47 39
46.15
50.77
55.37
54.67

46.18
51.97
58.00
57.44

50.26
53.51
50.58
46.96

45.41
45.43
44.19
42.80

44.45
49.82
65.85
70.49

618.04
691.55
639.76
714.81
834.05
910 88
873.60
879.12
906.00
876.72

55.85
66.27
62.38
69.87
81.37
88 17
85.26
91.93
98.70
97.84

3.47
2.98
3.37
3.17
3.01
3 00
3.40
3.20
3.07
3.24

5.90
4 62
5.82
5 50
5.32
5 59
6.63
5.73
5.67
6.08

1970
1971
1972
1973
1974
1975
1976
1977
1978

45.72
54.22
60.29
57.42
43.84
45.73
54.46
53.69
53.70

48.03
57.92
65.73
63 08
48.08
50.52
60.44
57.86
58.23

32.14
44.35
50.17
37.74
31.89
31.10
39.57
41.09
43.50

37.24
39.53
38.48
37.69
29.79
31.50
36.97
40.92
39.22

60.00
70.38
78.35
70.12
49.67
47.14
52.94
55.25
56.65

753.19
884.76
950.71
923.88
759.37
802.49
974.92
894.63
820.23

83.22
98.29
109.20
107.43
82.85
86.16
102.01
98.20
96.02

3.83
3.14
2.84
3.06
4.47
4.31
3.77
4.62
5.28

6.45
5.41
5.50
7.12
11.59
9.15
8.90
10.79

Mr
a

Apr
May
June

56.28
54.93
54.67
53.92
53.96
54.30

61 26
59.65
59 56
58.47
58 13
58.44

41.93
40.59
40.52
41.51
43.25
43.29

41.13
40.86
40.18
40.24
41.14
41.59

57.86
55.65
54.84
54.30
54.80
55.29

970.62
941.77
946 11
929.10
926 31
916.56

103.81
100.96
100.57
99.05
98.76
99.29

3.99
4.21
4.37
4.47
4.57
4.60

10.24

July
Aug
Sept
Oct
Nov
Dec

54.94
53.51
52.66
51.37
51.87
51.83

58.90
57.30
56.41
54.99
55.62
55.55

43.52
41.04
39.99
38.33
39.30
39.75

42.44
41.50
40.93
40.38
40.33
40.36

57.29
56.52
55.33
53.24
54.04
53.85

908.20
872.26
853.30
823.96
828.51
818.80

100.18
97.75
96.23
93.74
94.28
93.82

4.59
4.72
4.82
4.97
5.02
5.11

11.09

1978: Jan
Feb
Mar.
Apr
May
June

49.89
49.41
49.50
51.75
54.49
54.83

53.45
52.80
52.77
55.48
59.14
59.63

39.15
38.90
38.95
41.19
44.21
44.19

39.09
39.02
39.26
39.69
39.47
39.41

50.91
50.60
51.44
55.04
57.96
58.31

781.09
763.57
756.37
794.66
838.56
840.26

90.25
88.98
88.82
92.71
97.41
97.66

5.32
5.49
5.62
5.42
5.20
5.19

12.25

July
Aug
Sept
Oct
Nov
Dec

54.61
58.53
58.58
56.40
52.74
53.69

59.35
64.07
64.23
61.60
57.50
58.72

44.74
49.45
50.19
46.70
41.80
42.49

39.28
40.20
39.82
39.44
37.88
38.09

57.97
63.28
63.22
60.42
54.95
55.68

831.72
887.93
878.64
857.69
804.29
807.94

97.19
103.92
103.86
100.58
94.71
96.11

5.25
4.93
4.97
5.11
5.45
5.39

11.36

- .

1977: Jan
Feb

10.37

11.45

11.79

1
Averages of daily closing prices, except New York Stock Exchange data through May 1964, are averages of weekly closing
prices.
2
Includes all the stocks (more than 1,500) listed on the New York Stock Exchange.
3 Includes 30 stocks.
« Includes 500 stocks.
5
Standard & Poor's series, based on 500 stocks in the composite index.
6
Aggregate cash dividends (based on latest known annual rate) divided by aggregate market value based on Wednesday closing prices. Monthly data are averages of weekly figures; annual data are averages of monthly figures.
7 Ratio of quarterly earnings after taxes (seasonally adjusted annual rate) to price index for last day of quarter.
Annual ratios are averages of quarterly ratios.

Note.—All data relate to stocks listed on the New York Stock Exchange.
Sources: New York Stock Exchange, Dow-Jones & Co., Inc., and Standard & Poor's Corporation.




285

TABLE B-89.—Business formation and business failures,

1929-78

Business failures l
Index
of net
business
formation
(1967=100)

Year or month

1929
1933 3
1939 3
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
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977

rations
(number)

ness
failure
rates

.

112.6
87.8
93.1
93.3
98.2
94.4
91.3
99.1
95.2
90.4
89.5
96.8
92.4
88.3
90.7
93.3
97.2
98.6
98.2
100.0
109.8
116.2
108.0
111.0
117.9
117.9
112.4
108.9
117.6
127.4

.
. .

. .

. .
.

Amount of current
liabilities (millions
of dollars)

Number of failures

New
business

132.916
112,897
96,346
85,640
93,092
83,778
92,946
102,706
117,411
139,915
141,163
137,112
150,781
193,067
182,713
181,535
182,057
186,404
197,724
203,897
200,010
206,569
233,635
274,267
264,209
287,577
316,601
329,358
319,149
326, 345
375,766
436,170

Liability size
class
Total

Under $100,000
and
$100,000 over

Liability size
class
Total

Under $100,000
$100,000 and
over

103.9
100.3
69.6
63.0
54.4
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
49.0
38.6
37.3
43.8
41.7
38.3
36.4
38.4
42.6
34.8
28.4

22,909
19,859
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
12,364
9,636
9,154
10,748
10,326
9,566
9,345
9,915
11, 432
9,628
7,919

22,165
18,880
14,541
13,400
11,685
9,282
3,155
1,176
759
1,003
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
10,144
7,829
7,192
8,019
7,611
7,040
6,627
6,733
7,504
6,176
4,861

744
979
227
219
163
123
66
46
50
126
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
2,220
1,807
1,962
2,729
2,715
2,526
2,718
3,182
3,928
3,452
3,058

483.3
457.5
182.5
166.7
136.1
100.8
45.3
31.7
30.2
67.3
204.6
234.6
308.1
248.3
259.5
283.3
394.2
462.6
449.4
562.7
615.3
728.3
692.8
938.6
1,090.1
1,213.6
1,352.6
1,329.2
1,321.7
1,385.7
1,265.2
941.0
1,142.1
1,887.8
1,916.9
2.000.2
2,298.6
3,053.1
4,380.2
3,011.3
3, 095.3

261.5
215.5
132.9
119.9
100.7
80.3
30.2
14.5
11.4
15.7
63.7
93.9
161.4
151.2
131.6
131.9
167.5
211.4
206.4
239.8
267.1
297.6
278.9
327.2
370.1
346.5
321.0
313.6
321.7
321.5
297.9
241.1
231.3
269.3
271.3
258.8
235.6
256.9
298.6
257.8
208.3

221.8
242.0
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
413.9
611.4
720.0
867.1
1,031.6
1,015.6
1,000.0
1,064.1
967.3
699.9
910.8
1,618.4
1,645.6
1,741.5
2,063.0
2,796.3
4,081.6
2,753.4
2, 887.0

Seasonally adjusted
123.3
123.0
124.3
122.4
123.2
125.8
126.6
130.6
129.6
132.0
133.5
134.8

34,519
33,173
35, 300
33,394
34,442
37,229
35,749
39, 525
37,812
38, 943
38, 344
39,674

28.4
29.6
32.3
31.7
30.2
30.8
24.1
29.7
27.0
24.2
27.0
24.7

664
693
858
804
724
732
513
687
560
546
621
517

418
425
515
520
440
455
325
401
342
353
353
314

246
268
343
284
284
277
188
286
218
193
268
203

168.5
194.2
248.2
207.3
473.9
305.9
577.8
338.3
97.0
115.7
200.3
168.3

17.7
18.3
21.7
22.1
18.4
19.2
14.2
18.5
14.0
14.7
15.4
14.0

ISO. 9
175. S
226.5
185.2
455.4
286.7
563.6
319.7
83. C
100.9
184.8
154.3

Apr
May
June _ . . .

Mr
a

135.1
135.0
131.8
131.9
132.2
134.2

36, 547
39, 253
37,602
38,498
38, 320
39, 796

21.6
24.0
24.6
24.1
23.4
21.9

504
559
666
594
583
519

316
319
388
335
337
301

188
240
278
259
246
218

168.3
205.0
324.4
203.0
160.4
178.8

14.3
14.1
18.2
15.5
14.7
12.3

154.0
190.9
306.2
187.5
145.7
166.5

July
Aug
Sept
Oct

134.7
133.8
133.6
133.3

39, 403
42,605
41,827
41, 945

22.0
29.8

459
675

244
347

215
328

231.8
206.4

10.6
15.9

111.2
190.5

1977:Jan
Feb.
Mar
Apr
May.
June
July
Aug
Sept
Oct
Nov
Dec

.

.

1978:Jan
Feb

i 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 10,0001 sted enterprises.
3 Series revised; not strictly comparable with earlier data.
Sources: Department of Commerce (Bureau of Economic Analysis) and Dun & Bradstreet, Inc.




286

AGRICULTURE
TABLE B-90.—Income of farm people and farmers,
[Quarterly data at seasonally adjusted annual rates]

Income received from farming3
Personal income
received by total
farm population
Year or
quarter

1929-78

Gross income
before inventory
adjustment

From
From
From
nonall
Total *
farm 1 farm
sources sources sources2

Net to farm
operators

ProducCash tion exreceipts penses
from
marketings

Before
inventory
adjustment

After
inventory
adjustment5

Billions of dollars
1929
1933
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
1967
1968
1969
1970
1971
1972
1973
1974
1975...
1976
1977

Net income per
farm after
inventory
adjustment8
Current
dollars

1967
dollars 7

Dollars

13.9
7.1
10.6
11.1
13.9
18.8
23.4
24.4
25.8
29.5
34.1
34.7
31.6
32 3
37.1
36.8
35 1
33.7
33.3
34.4
34.2
38 1
37.9
38.5
40.2
41.7
42.7
43.1
45.5
50.6
49.9
51.7
56.3
58.6
60.6
70.1
95.5
100.0
96.9
104.1
108.1

11.3
5.3
7.9
8.4
11.1
15.6
19.6
20.5
21.7
24.8
29.6
30.2
27.8
28 5
32.9
32.5
31.0
29.8
29.5
30.4
29.7
33 5
33.6
34.2
35.2
36.5
37.5
37.3
39.4
43.4
42.8
44.2
48.2
50.5
52.9
61.2
87.1
92.4
88.2
94.5
96.1

7.7
4.4
6.3
6.9
7.8
10.0
11.6
12.3
13.1
14.5
17.0
18.8
18.0
19.5
22.3
22.8
21.5
21.8
22.2
22.7
23.7
25.8
27.2
27.4
28.6
30.3
31.6
31.8
33.7
36.5
38.2
39.5
42.1
44.4
47.4
52.3
65.6
72.2
75.9
83.0
88.0

6.3
2.7
4.3
4.2
6.1
8.8
11.8
12.1
12.8
15.0
17.1
15.9
13.6
12.8
14.8
14.0
13.6
11.9
11.1
11.7
10.5
12.3
10.7
11.1
11.6
11.4
11.1
11.3
11.9
14.0
11.7
12.2
14.2
14.1
13.2
17.8
29.9
27.7
21.1
21.1
20.1

6.2
26
4.4
45
6.5
9.9
11.7
11.7
12.3
15 1
15.4
17.7
12.8
13 6
15.9
15.0
13 0
12.4
11.3
11.3
11.1
13 2
10.7
11.5
12.0
12.1
11.8
10.5
12.9
14.0
12.3
12.3
14.3
14.2
14.6
18.7
33.3
26.1
24.5
18.8
20.5

945
379
685
706
1,031
1,588
1,927
1,950
2,063
2,543
2,615
3,044
2,233
2,417
2,936
2,878
2,604
2,579
2,429
2,493
2,536
3,111
2,615
2,907
3,126
3,267
3,295
3,035
3,843
4,286
3,903
4,013
4,764
4,799
5,042
6,526
11,813
9,349
8,845
6,848
7,592

1,646
1 681
2,338
3,254
3,720
3,700
3,827
4,347
3,909
4,222
3,127
3,352
3,774
3,620
3,251
3,204
3,029
3,063
3,008
3,592
2,995
3,277
3,489
3,606
3,593
3,267
4,067
4,409
3,903
3,851
4,339
4,126
4,157
5,208
8,875
6,330
5,487
4,016
4,183

1976: 1
__
IL_.
III
IV..

102.5
108.4
102.8
102.6

93.3
98.9
93.2
92.6

79.5
85.0
84.5
82.9

23.0
23.4
18.3
19.7

21.5
19.9
17.1
16.5

7,850
7,270
6,250
6,030

4,690
4,290
3,630
3,470

1977: 1
II _ .
ML.
IV

108.1
106.7
102.7
114.8

97.6
95.7
91.3
99.6

87.5
87.0
86.0
91.4

20.6
19.7
16.7
23.4

19.6
20.2
16.8
25.5

7,240
7,460
6,210
9,420

4,090
4,130
3.39C
5, 08C

1978: 1
II
III.

115.8
122.5
122.5

102.2
109.0
109.5

93.5
96.0
96.0

22.3
26.5
26.5

22.3
24.5
25.5

8,320
9,140
9,510

4,410
4,730
4,810

7.4
7.6
10.1
14.1
16.5
16.6
17.2
20.0
21.1
23.8
19.5
20 3
22.7
22.0
19 7
18.3
17.5
17 6
17.5
19 2
17 5
18.4
19.0
19.7
20.0
19.8
22.6
23.8
22.9
24.1
26.9
27.5
28.8
34.6
48.9
45.2
44.5
41.2
43.0

4.8
48
6.8
10.1
12 1
12.2
12.8
15 5
15.8
18.0
13.3
14 1
16 1
15.3
13 3
12 4
11.3
11 1
10.8
12 5
10 4
11 1
11.4
11.4
11.0
10.0
12.0
12.6
11.1
11.3
12 9
13.0
13.5
16.9
29.2
23.4
21.9
16 9
18.3

2.6
2.8
3.3
3.9
4.4
4.4
4.4
4.6
5.3
5.8
6.2
63
6.5
6.7
64
5.9
6.2
6.6
6.6
67
7.1
7.2
7.6
8.3
9.0
9.7
10.6
11.2
11.7
12.8
13.9
14.5
15.3
17.8
19.7
21.8
22.7
24.4
24.7

1 Net income to farm operators after inventory adjustment, less net income of nonresident operators, plus wages and
salaries and other labor income of farm resident workers, less contributions of farm resident operators and workers to
social insurance.
2 Estimated income of farm residents from nonfarm sources; based on survey benchmarks with extrapolations to current
year.
3 Includes government payments.
< Also includes government payments and nonmoney income and other farm income furnished by farms, not shown
separately.
«Includes net value of physical change in inventory of crops and livestock valued at average prices for the year.
«The 1969 farm definition is used.
7
Income in current dollars divided by the consumer price index (Department of Labor).
Source: Department of Agriculture, except as noted.




287

TABLE B-91.—Farm production indexes, 1929-78
[1967=100]
Crops 2
Year

1929...
1933....
1939...
1940...
1941...
1942...
1943...
1944_-

Farm
output i

53
51
58
60
62
70
69
71
70
71

Feed
Total » grains

Hay
and
forage

Livestock and products *

Food Vege- Fruits
and
grains tables nuts

Cotton

Meat
ToOil
anibacco crops Total * mals

Dairy Poultry
prod- and
ucts eggs

62

48

71

52

64

74

205

76

11

53

52

75

33

55
64
67
68
76

44

62

62

75

180

69

8

57

58

79

32

51

69

95

163

96

25

59

59

81

35

71
75

52
56
64
59
62

68
76
75
82
80
79
81
77
74

36
48
52
60
63
54
67

72
73
78
84
80

91
97
96
83
96

173
148
177
158
169

74
64
72
71
99

29
29
40
41
36

60
64
71
77
73

60
63
72
81
73

83
87
91
90
91

36
39
45
52
52

82
91
80
84
82

87
104
99
91
95

125
120
164
206
221

101
118
107
101
100

36
34
39
47
45

73
71
70
68
72

69
68
67
66
69

94
93
92
89
91

54
51
50
49
54

1945_..
1946...
1947 ...
1948...
1949 ...

69
76
74

73
77
73
83
79

60
65
50
72
63

74
73

70
72
85
81
70

1950...
1951...
1952...
1953...
1954...

74
76
79
79
80

76
78
81
81
79

64
59
63
61
64

78
81
79
81
81

65
64
83
76
67

83
78
79
82
81

96
98
95
96
97

138
209
209
227
188

103
119
115
105
114

46
47
46
47
49

75
78
78
79
82

73
79
79
78
81

92
90
91
95
97

57
59
60
61
64

1955...
1956...
1957...
1958...
1959...

82
82
81
87
88

82
82
80
89
89

68
68
74
80
84

86
82
89
89
85

63
66
62
91
73

84
89
86
89
87

93
97
88
96
98

203
184
151
157
200

112
111
85
88
91

53
60
58
69
64

84
84
83
84
88

85
83
80
81
87

98
100
100
99
98

63
69
70
74
76

1960...
1961...
1962...
1963...
1964...

91
91
92
96
95

93
91
92
96
93

87
78
79
86
75

90
90
93
93
94

87
80
74
77
86

89
94
92
92
89

94
98
98
96
97

196
196
205
211
209

99
105
118
119
113

68
77
78
81
81

87
91
92
95
97

85
88
90
95
97

100
102
103
102
104

76
82
82
84
87

1965...
1966...
1967...
1968...
1969...

98
95
100
102
102

99
95
100
103
104

88
89
100
95
99

98

88
88
100
106
98

96
97
100
104
101

100
98
100
98
116

205

97
100
99
100

94
96
100
87
91

95
97
100
114
116

95
97
100
100
101

92

130
100
148
137

96
100
101
102

104
101
100
99
98

90
96
100
98
100

1970...
1971...
1972...
1973...
1974...

101

no
no
112

89
116
112
115
93

100
105
104
109
104

91
107
102

106

100
112
113
119
110

98
98
99
100
102

110
118
106
126
128

139
145
187
175
158

97
86
88
88
101

117
121
131
155
127

105
106
107
105
106

108
109
109
108
110

99
101
102
98
99

105
106
109
106
106

1975...
1976...
1977...
1978 p..

114
117
121
122

121
121
130
131

114
120
126
135

108
102
109
115

101
101
102
107

137
136
139
133

112
142
193
146

108
97
102

no

153
132
175
180

101
105
106
108

102
105
105
107

98
103
105
105

103
110
111
117

114
120
142
141
131
124

i Farm output measures the annual volume of net farm production available for eventual human use through sales from
farms or consumption in farm households.
» Gross production.
3 Includes sugarcrops, hay seeds, pasture seeds, cover-crop seeds, and some miscellaneous crop production, notincluded
in groups shown.
,
< Includes clipped wool, mohair, and beginning 1950 honey and beeswax, rnot included in groups shown.
Source: Department of Agriculture.




288

TABLE B-92.—Farm population, employment, and productivity, 1929-78
Farm popula
arm population
(April 1)

Farm employme
ment
(thousands) 3

Farm output
Per hour of farm work

Year

Number
(thousands)

As percent of
total
population 2

Total

Hired
Family
workers workers

Per
unit of
total
input

Total

Crops

Livestock
and
products

Crop
production
per
acre *

Index, 1967=100

1929..

30, 580

25.1

12, 763

9,360

3,403

52

16

16

26

1933..

32,393

25.8

12,739

9,874

2,865

53

16

15

25

50

1939..

30, 840

23.5

11,338

8,611

2,727

59

19

20

27

60

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

60
62
68
66
67

20
21
24
24
24

21
23
25
24
25

27
28
30
31
30

62
63
70
64
68

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
10, 363
9,964

7,881
8,106
8,115
8,026
7,712

2,119
2,189
2,267
2,337
2,252

68
71
68
74
71

26
27
28
31
32

27
29
29
33
33

31
32
33
34
35

67
71
67
75
70

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

71
71
74
75
76

34
35
38
39
42

36
35
39
40
42

37
39
40
41
43

69
70
73
72
71

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

8,381
7,852
7,600
7,503
7,342

6,345
5,900
5,660
5,521
5,390

2,036
1,952
1,940
1,982
1,952

78
80
80
87
87

44
47
51
57
59

45
48
53
61
61

46
48
50
54
58

74
76
77
86
85

1960.
1961..
1962.
1963.
1964.

15, 635
14,803
14,313
13,367
12,954

8.7
8.1
7.7
7.1
6.8

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

90
91
92
96
95

65
67
71
77
81

66
68
72
77
79

62
66
71
77
82

89
92
95
97
95

1965.
1966..
1967.
1968.
1969.

12,363
11,595
10, 875
10, 454
10,307

6.4
5.9
5.5
5.2
5.1

5,610
5,214
4,903
4,749
4,596

4,128
3,854
3,650
3,535
3,419

1,482
1,360
1,253
1,213
1,176

100
97
100
102
103

89
92
100
106
110

90
94
100
106
108

86
93
100
105
112

100
97
100
105
106

1970.
1971..
1972.
1973.
1974.

9,712
9,425
9,610
9,472
9,264

4.7
4.6
4.6
4.5
4.4

4,523
4,436
4,373
4,337
4,389

3,348
3,275
3,228
3,169
3,075

1,175
1,161
1,146
1,168
1,314

102
110
110
111
106

115
128
136
130
136

111
126
135
138
128

121
128
137
144
156

104
112
115
116
104

1975.
1976 .
1977.
1978 i

8,864
8,253
7,806
8,000

4.2
3.8
3.6
3.7

4,342
4,374
4,152
3,922

3,026
2,997
2,856
2,672

1,317
1,377
1,296
1,250

115
115
118
120

152
162
173
174

142
146
157
160

160
178
189
193

112
111
116
121

56

* Farm population as defined by 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, including Armed Forces overseas.
3 Includes persons doing farmwork on all farms. These data, published by the Department of Agriculture, Statistical
Reporting Service, differ from those on agricultural employment by the Department of Labor (see Table B-29) because of
differences in the method of approach, in concepts of employment, and in time of month for which the data are collected.
See monthly report on "Farm Labor."
< Computed from variable weights for individual crops produced each year.
Sources: Department of Agriculture and Department of Commerce (Bureau of the Census).




289

TABLE B-93.—,Indexes of prices received and prices paid by farmers and selected farm resource
prices,

1929-78

[1967=100, except as noted)

Prices received by farmers

Year or month

All
farm
roducts

Crops

60
31
36
40
48
64
83
88
90
102
117
113
100
103
118
119
107
108
103
104
100
99
98
99
101
103
107
106
103
106
100
100
97
100
108
114
175
224
201
197
192
203
198
201
210
214
211
196
181
172
170
178
184
183
188
190
198
208
CMCM

CMCO

CN

CN

59
28
38
40
1
. .. 49
64
77
79
83
94
110
115
100
103
121
115
102
98
93
.
92
94
100
96
95
96
98
97
95
98
. ... 106
100
. -.
102
107
-. .. 110
113
125
179
. .
192
185
186
183
209
183
186
189
Mar
Apr
192
May ..
192
June
184
July
180
Aug
174
Sept
174
Ot
c
177
Nov
178
181
Dc
e
1978:Jan
186
Feb
193
Mar
200
Apr
208
215
May
June
217
July
215
Aug
210
Sept
215
Ot
c
217
Nov
215
Dc
e
221

1929
1933
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
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1977-Jan
Feb

Prices paid by farmers

All
items,
Live- nterest, Family
stock
taxes, living
and
and
items
roducts wage
rates

202
203
200
200
203

58
25
39
40
50
62
72
71
77
88
105
115
99
102
122
111
97
90
85
82
89
99
93
92
91
93
89
86
94
106
100
104
117
118
118
136
183
165
172
177
175
216
170
174
172
173
177
173
179
177
177
176
174
180
185
196
204
209
217
219
217
217
226
232
228
237

47
32
36
36
39
44
50
53
56
61
70
76
73
75
82
84
81
81
81
81
84
86
87
88
88
90
91
92
94
99
100
103
108
112
118
125
144
164
180
191
202
219
198
200
202
204
204
204
203
201
201
201
202
203
209
211
214
216
219
220
220
220
223
224
224
226

48
34
37
38
40
46
52
54
57
63
74
78
75
76
83
84
84
84
84
85
88
89
89
90
90
91
92
93
95
98
100
104
109
114
118
123
133
151
166
176

I
(3)
(3)

(3)

(3)

C3)
(3)

8

Selected resource prices

Tractors
and
Produc- selfprotion
pelled
items
machinery
51
34
42
43
45
52
57
60
61
67
78
87
83
86
95
95
89
89
87
87
90
92
93
92
93
94
95
94
96
100
100
100
104
108
113
121
146
166
182
193
200
216
196
199
201
204
205
203
201
198
197
198
199
199
203
206
211
214
217
218
218
217
220
222
223
225

92
96
100
104
111
116
122
128
137
161
195
217
238
259
224
224
233
233
233
241
241
241
245
245
245
245
245
245
251
251
251
260
260
260
272
272
272
272

Fertilizer

103
102
100
94
87
88
91
94
102
167
217
185
181
180
177
177
181
181
183
183
183
183
183
182
182
179
179
179
181
181
181
181
181
181
181
179
179
179

Average
hourly
wage
rate,
all
hired
farm 1
workers

Average
farm
real
estate
value
per
acre2

$0.73
.68
.69
.77
.81
.82
.81
.82
.86
.88
.92
.95
.97
.99
1.01
1.05
1.08
1-14
L 23
L.33
44
1.55
64
ft*
2.00
2.25
2.43
2.66
2.87

27
16
19
19
19
21
23
26
29
32
36
39
41
40
46
51
52
51
53
55
58
61
66
68
69
73
77
82
86
93
100
107
113
117
122
132
150
187
213
242
283
308

2.96
283
2.82
2.77
2.99
296
3.18
308
3.09
2.93
3.18
332

1
Without room or board.
2 Average for 48 States. Annual data are for March 1 of each year through 1975 and for February 1 beginning 1976.
Monthly data are for first of month.
3
Series discontinued. Consumer price index (Department of Labor) substituted in calculating total prices paid.
Source: Department of Agriculture.




290

TABLE B-94.—Selected measures offarm resources and inputs, 1929-78
Index numbers of inputs (1967=100)

Year

Crops
harvested
(millions
of
acres) i

Total
hours
of
farm
work
(billions)

Total

Farm
labor

Farm
real
estate

MeFeed,
chaniseed,
Agrical
and
cultural livepower chemiand
cals 2 stock
mapurchinery
chases3

Taxes Misceland
interest laneous

1929

365

23.2

102

329

103

38

10

31

73

86

1933

340

22.6

96

321

97

32

6

28

75

82

1939

331

20.7

98

294

102

40

11

41

72

78

1940
1941
1942
1943
1944

341
344
348
357
362

20.5
20.0
20.6
20.3
20.2

100
100
103
104
105

293
288
296
292
289

103
102
100
98
98

42
44
51
55
57

13
14
15
17
20

42
45
48
52
52

72
73
73
77
79

78
79
76
79
82

1945
1946
1947
1948
1949

354
352
355
356
360

18.8
18.1
17.2
16.8
16.2

103
101
101
103
105

271
260
246
240
231

98
102
103
103
104

58
57
64
72
80

20
21
23
25
27

54
53
55
56
61

80
81
81
79
82

80
81
83
87
91

1950
1951
1952
1953
1954

345
344
349
348
346

15.1
15.2
14.5
14.0
13.3

104
107
107
106
105

217
218
208
200
192

105
105
105
105
105

84
90
94
96
96

29
32
35
36
37

63
67
69
69
71

82
82
85
86
85

87
93
93
92
90

1955
1956
1957
1958 _
1959

340
324
324
324
324

12.8
12.0
11.1
10.5
10.3

105
103
101
100
102

185
174
162
156
151

105
102
102
100
101

97
98
97
97
98

39
41
41
43
49

72
75
74
79
84

88
87
86
87
93

94
90
94
98
103

1960
1961
1962
1963
1964

324
302
295
298
298

9.8
9.4
9.0
8.7
8.2

101
100
100
100
100

145
139
133
129
122

100
100
100
100
100

97
94
94
93
93

49
53
58
65
71

84
88
90
90
92

94
95
96
98
99

105
105
108
109
113

1965
1966
1967
1968
1969

298
294
306
300
290

7.3
69
.
67
.
6.4
6.2

98
98
100
100
99

110
103
100
97
93

99
99
100
99
98

94
96
100
101
101

75
85
100
105
111

93
97
100
97
101

100
100
100
101
100

109
104
100
106
105

1970
1971
1972
1973
1974

293
305
294
321
328

5.9
5.7
5.4
5.3
5.2

100
100
100
101
100

89
86
82
80
78

101
99
98
97
95

100
102
101
105
109

115
124
131
136
140

104
111
113
116
107

100
99
100
100
101

109
108
115
111
110

1975
1976..
1977
1978*

336
337
343
336

5.0
4.8
4.7
4.7

100
102
103
102

76
73
71
71

96
97
97
97

113
115
116
117

127
145
151
150

101
110
110
111

101
101
99
100

104
115
126
110

i Acreage harvested plus acreages in fruits, tree nuts, and farm gardens.
> Fertilizer, lime, and pesticides.
3
Nonfarm constant dollar value of feed, seed, and livestock purchases.
Source: Department of Agriculture.




291

TABLE E-95.—Balance sheet of the farming sector, 1929-79
[Billions of dollars]
Assets

Claims

Other physical assets
Beginning of
year

Financial assets

MaHousehold
DeReal LiveTotal estate stock i chinery
equip- posits
and Cropss ment
and
motor
and
curvehifurnish- rency
cles
ings

Pro1 nvest- Total Real Other prieestate debt tors'
U.S.
ments
equidebt
savings in coties
bonds operatives

1929

48.0

6.6

3.2

9.8

1933

30.8

3.0

2.5

8.5

1939

34.1

5.1

3.2

53.0
54.8
62.9
73.6
84.0

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
3.9
5.1
6.1

4.2
4.1
4.8
4.8
4.7

3.2
3.5
4.2
5.5
6.6

.3
.3
.5
1.1
2.2

.8
.9
.9
1.0
1.1

53.0
54.8
62.9
73.6
84.0

6.6
6.5
64
5.9
5.4

3.4
3.9
4.1
4.0
3.5

43 0
44.4
52 4
63 7
75.1

93.8
102 9
115.9
127.4
134.6

53.9
6L0
68.5
73.7
76.6

9.0
9.7
11.9
13.2
14.4

6.5
5.4
5.3
7.4
10.1

6.7
6.3
7.1
9.0
8.5

5.2
5.5
7.2
8.1
8.9

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

93.8
102.9
115.9
127.4
134.6

4.9
4 7
4.9
5.1
5.3

3.4
32
3.6
4.2
6.1

85.5
95 0
107.4
118.1
123.2

134.5 77.6
154.3 89.5
170.1 98.4
. 167.6 100.1
164.6 98.7

12.9
17.1
19.5
14.8
11.8

12.2
14.1
16.7
17.4
18.4

7.6
7.9
8.8
9.0
9.2

8.4
9.6
10.1
9.6
9.5

9.1
9.1
9.4
9.4
9.4

4.7
4.7
4.7
4.6
4.7

2.0
2.3
2.5
2.7
2.9

134.5
154.3
170.1
167.6
164.6

5.6
6.1
6.7
7.2
7.7

6.8
6.9
8.0
8.9
9.2

122.1
141.3
155.4
151.5
147.7

1940
1941
1942
1943
1944
1945
1946
1947
1948 . .
1949
1950
1951
1952
1953 . . .
1954

6.8

168.8
173.6
182.8
191.3
208.4

102.2
107.5
115.7
121.8
131.1

11.2
10.6
11.0
13.9
17.7

18.6
19.3
20.2
20.1
21.8

9.6
8.3
8.3
7.6
9.3

9.7
10.0
9.6
9.6
9.4

9.4
9.5
9.4
9.5
10.0

5.0
5.2
5.1
5.1
5.2

3.1
3.2
3.5
3.7
3.9

168.8
173.6
182.8
191.3
208.4

8.2
9.0
9.8
10.4
11.1

9.4
9.8
9.5
10.0
12.5

151.2
154.8
163.5
170.9
184.8

. . 210.2
210.8
219.3
227.7
235.8

137.2
138.5
144.5
150.2
158.6

15.3
15.6
16.4
17.3
15.9

22.7
22.2
22.5
23.5
23.9

7.7
8.0
8.8
9.3
9.8

9.2
8.7
8.9
8.8
8.8

9.2
8.7
8.8
9.2
9.2

4.7
4.6
4.5
4.4
4.2

4.2
4.5
4.9
5.0
5.4

210.2
210.8
219.3
227.7
235.8

12.0
12.8
13.8
15.1
16.8

12.8
13.4
14.7
16.3
17.6

185.4
184.6
190.8
196.3
201.4

243.8
- 260.8
274.2
288.0
302.8

167.5
179.2
189.1
199.7
209.2

14.5
17.6
19.0
18.9
20.2

24.8
26.0
27.4
29.8
31.3

9.2
9.7
10.0
9.6
10.6

8.4
8.4
8.3
8.8
9.4

9.6
10.0
10.3
10.9
11.5

4.2
4.0
3.9
3.8
3.8

5.6
5.9
6.2
6.5
6.8

?43.8
260.8
274.2
?88.0
302.8

18.9
21.2
23.1
25.1
27.4

17.9
19.5
21.0
22.3
23.1

207.0
220.1
230.1
240.6
252.3

1970
1971
1972
1973
1974

314.9
326.0
351.8
394.8
478.5

215.8
223.2
239.6
267.3
327.7

23.5
23.7
27.3
34.1
42.4

32.3
34.4
36.6
39.3
44.2

10.9
10.7
11.8
14.5
22.1

9.6
10.0
10.8
11.9
12.3

11.9
12.4
13.2
14.0
14.9

3.7
3.6
3.7
4.0
4.1

7.2
8.0
8.8
9.7
10.8

314.9
326.0
351.8
394.8
478.5

29.2
30.3
32.2
35.7
41.3

23.8
24.2
26.9
29.6
32.8

261.9
271.5
292.7
329.5
404.4

1975
1976
1977
1978

517.5
579.9
654.9
708.3

368.5
416.9
483.8
525.8

24.6
29.5
29.1
32.0

55.7
64.7
71.0
75.2

23.3
21.3
22.0
24.6

14.0
14.2
14.4
14.5

15.1
15.6
16.0
16.3

4.3
4.4
4.4
4.4

12.1
13.3
14.2
15.5

517.5
579.9
654.9
708.3

46.3
51.1
56.6
63.3

35.5
39.7
46.1
55.6

435.7
489.1
552.2
589.4

1979 p

790.1 588.9

790.1

72.2

63.7

654.2

1955
1956
1957
1958
1959
1960 _ 1961
1962
1963
1964
1965
1966
1967
1968
1969

_

163.4

16.7

21 1

* Beginning with 1961, horses and mules are excluded.
2 Includes all crops held on farms and crops held off farms by farmers as security for Commodity Credit Corporation
loans. The latter on January 1,1979 totaled approximately $2.1 billion.
Note.—Beginning 1960, data include Alaska and Hawaii.
Source: Department of Agriculture.




292

INTERNATIONAL STATISTICS
TABLE B-96.—Exchange rates, 1971-78
[Cents per unit of foreign currency, except as noted]
Belgian
franc

Year and month

Canadian
dollar

French
franc

German
mark

Italian
lira

Japanese
yen

March 1973 rate

2.5377

100.333

22.191

35.548

.17600

.38190

1971: Mar
June
Sept

2.0145
2.0109
2.0921
2.1986
2.2757
2.2758
2 2742
2.2670

99.367
97.913
98. 717
100.067
100.152
102.092
101 730
100.326

18.129
18.092
18.112
18.549
19.835
19.937
19 977
19.657

27.538
28.474
29.794
30.593
31.545
31.560
31 318
31.262

.16063
.16009
.16292
.16652
.17161
.17142
17199
.17146

.27971
.27979
.29583
.31249
. 33054
.33070
. 33209
.33196

2 5377
2.6643
2.7089
2.4726
2.5040
2 6366
2.5364
2. 7158

100 333
100.160
99.181
100.058
102.877
103 481
101.384
101.192

22.191
23.472
23.466
21.757
20.742
20 408
20.831
22.109

35 548
38. 786
41.246
37.629
38.211
39 603
37.580
40.816

. 17600
.16792
. 17691
.15458
.15687
15379
.15103
.15179

. 38190
. 37808
. 37668
. 35692
. 35454
. 35340
. 33439
. 33288

1975: Mar
June
Sept
Dec
1976: MarJune _
Sept
Dec ._

2.9083
2.8603
2.5485
2.5311
2.5480
2.5220
2 6046
2.7483

99.954
97.426
97.437
98.627
101.431
102.712
102.557
98.204

23.804
24.971
22.367
22.428
21.657
21.109
20.334
20.055

43.120
42 726
38.191
38.144
39.064
38.797
40.169
41.965

.15842
. 15982
.14740
.14645
.12113
. 11780
11837
.11521

.34731
.34077
.33345
.32715
.33276
.33424
.34800
. 33933

1977: Mar.
June
Sept
Dec
1978: Mar
June..
Sept
Dec

2.7258
2.7713
2.7910
2.9608
3 1589
3.0590
3.2207
3.3637

95.125
94.549
93 168
91.132
88 823
89.143
85.739
84. 763

20.075
20.240
20 314
20.844
21 256

41.812
42.453
43.034

.11276
.11295
.11318
.11416
11692
.11634
.12050
.11863

. 35687
.36652
. 37486
.41491
.43148
.46744
.52656
.51038

Dec
1972: Mar
June
Sept

Dec

1973: Mar
June
Sept

Dec
1974: Mar
June
Sept

Dec

:.::::

21.841
22.909
23.178

46.499
49.181
47.984
50.778
53.217

United States dollar
(March 1973=100)
Netherlands
guilder

Swedish
krona

Swiss
franc

United
Kingdom
pound

Multilateral
tradeweighted
average
100.0

Bilateral
tradeweighted
average

100.0

March 1973 rate

34.834

22.582

31.084

247.24

1971: Mar
June
Sept
Dec .
1972: Mar
June
Sept
Dec__.

27.816
28. 065
29.308
30. 503
31. 384
31.296
30.969
30.962

19. 369
19. 370
19. 732
20.434
20. 956
21.101
21.146
21. 080

23.254
24.409
25.118
25.615
25.974
26. 320
26.403
26.526

241. 87
241 87
246.94
252.66
261.81
256.91
244.10
234.48

120 2

119 3
115.8
112.3
108.4
108.2
109.1
110.1

114 6
114 8
111.8
108.7
106 0
105.2
105.8
106.9

1973: Mar
June
Sept
Dec
1974: Mar..
June..
Sept
Dec...

34.834
36. 582
38. 542
35.615
36. 354
37. 757
36.870
39. 331

22. 582
23. 746
23.769
22.026
21.915
22.885
22. 333
23.897

31.084
32.757
33.146
31.252
32.490
33.449
33. 371
38.442

247. 24
257.62
241.83
231.74
234.06
239.02
231.65
232.94

100.0
96.5
95.1
101.5
101.6
100.0
102.9
98.6

100 0
98.5
98.3
102.2
100.9
99.9
103.0
101.0

1975: Mar
June.
Sept.
Dec
1976: Mar.
June
Sept
Dec

42.124
41. 502
37.229
37.234
37.149
36.524
38.390
40.240

25.481
25. 532
22. 501
22.685
22. 702
22.475
22 998
24. 051

40.273
40.086
36.905
37.970
38. 980
40.484
40.431
40.823

241.80
228. 03
208.35
202.21
194.28
176.40
172.72
167.84

93.9
94.8
103.0
103.5
105.1
107.1
105.7

98.5
100.0
104.9
105.0
104.6
105.2
104.0
105.8

40.079
40.326
40.604
42.955
45.994
44.716
46.733
49.120

23.726
22.625
20.602
21.044
21.693
21.6S0
22.592
22. 808

39.209
40.170
42.115
48.168
52.693
53 046
63.765
59.703

171.74
171.91
174.31
185.46
190.55
183.72
195.95
198.61

1977: Mar
June..
Sept
Dec
1978: Mar
June
Sept
Dec

Source: Board of Governors of the Federal Reserve System.
278-216 O - 79 - 19




293

105.3
105.2
104.4
103.8
98.4
94.8
94.7
89.5
88.5

106.2
105.6
105.4
101.9
100.3
99.2
96.0
96.3

TABLE B-97.— U.S. international transactions, 7946-78
[Millions of dollars; quarterly data seasonally adjusted, except as noted]
Investment income 3

Merchandise i
Year
or
quarter

Exports

Imports

Net
balance

Net
military
transactions

Net
travel
Other
and
trans- services,
portanets
tion receipts

Receipts

Payments

772
6,697
10,124
5,708 l|921
5,339 1,831

-212
-245
-437
-476

560
85;
1,484
1, 35f

-493
-455
-799
-621

733
946
374
230

310
145
175
208

Nt
e

Balance
on
goods
and
services i «

Remittances,
pensions,
and
other
unilateral
transfers i
-2,922

Balance

on
current
account

4,885
8,992
2,417
873

1946..
1947..
1948..
1949..

11,764
16,097
13,265
12,213

-5,067
-5,973
- 7 , 557
-6,874

1950..
1951..
1952..
1953..
1954..

10, 203
14,243
13,449
12,412
12.929

-9,081
-11,176
-10,838
-10,975
-10,353

1,122
3,067
2,611
1,437
2,576

2,068
2,633
2,751
2,736
2,929

-559
-583
-555
-624
-582

1,509
2,050
2,196
2,112
2,347

-576
-1,270
-2,054
-2,423
-2,460

-120
298
83
-238
-269

24;
254
309
30;
305

2,177
4,399
3,145
1,195
2,499

- 4 , 01 —1 840
- 3 , 515
884
-2,531
614
-2,481 -1 286
- 2 , 280
219

1955..
1956..
1957..
1958..
1959..

14, 424
17,556
19, 562
16, 414
16,458

-11,527
-12,803
-13,291
-12,952
-15,310

2,897
4,753
6,271
3,462
1,148

3,406
-676
3,837
-735
-796
4,180
-825
3,790
4,132 - 1 , 0 6 1

2,730
3,102
3,384
2,965
3,071

-2, 701
-2, 788
-2, 841
-3,135
-2, 805

-297
-361
-189
-633
-821

299
447
482
486
573

2,928
5,153
7,107
3,145
1,166

- 2 , 498
430
-2,423 2 730
-2,345 4,762
-2,361
784
-2,448 -1, 282

I960..
1961..
1962..
1963..
1964..

19,650
20,108
20, 781
22, 272
25, 501

-14,758
-14,537
-16,260
-17, 048
-18,700

4,892
5,571
4,521
5,224
6,801

4,616
4,998
5,619
6,157
6,823

-1,237
-1,245
-1,324
-1,561
-1,784

3,379
3,753
4,295
4,596
5,039

-2,752
-2, 596
-2,449
-2,304
-2,133

-964
-978
,152
,309
,146

579
594
809
960
1,041

5,132
6,345
6,026
7,168
9,603

-2, 308
-2,524
-2, 638
-2,754
-2,781

2,824
3,821
3,388
4,414
6,822

1965.
1966.
1967 _
1968.
1969_

26, 461
29, 310
30, 666
33, 626
36, 414

-21,510
-25, 493
-26, 866
-32, 991
-35, 807

4,951
3,817
3,800
635
607

7,441
7,531
8,024
9,377
0,920

- 2 , 088
-2,481
- 2 , 747
-3,378
- 4 , 869

5,353
5,050
5,277
5,999
6,051

-2,122
,280 1,387
-2, 935
,331 1,365
-3, 226
,750 1,612
-3,143 -1,548 1,630
-3, 328 - 1 , 763 1,833

8,289
5,966
5,712
3,573
3,401

-2, 854
-2, 932
-3,125
-2, 952
-2, 994

5,435
3,034
2,587
621
406

1970.
1971..
1972_.
1973_.
1974..

42, 469
43, 319
49, 381
71,410
98, 306

-39, 866 2,603 1,751
-45, 579 - 2 , 2 6 0 2, 688
-55, 797 - 6 , 4 1 6 .4, 694
-70, 499
911 !1,697
-103,649 - 5 , 3 4 3 7, 541

-5,516
- 5 , 436
- 6 , 544
- 9 , 655
-12,084

6,235
7,252
8,150
2,042
.5, 457

-3, 354
-2, 893
-3,621
-2,287
-2, 080

1975..
1976..
1977..

107, 088 -98, 041
9,047 25, 359 -12, 564 2, 795
114,694 -124,047 - 9 , 353 29, 244 -13,311 .5,933
120, 576 -151,706 -31,130 32,100 -14, 593 .7, 507

- 2 , 023
-2,315
- 3 , 028
- 3 , 086
-3,105

11,617 -2,625
6,942 - 4 , 525
6,511 - 5 , 638

5,654
2,190
2,294
2,509
2,789 -2,125
10, 766
3,185
8,905
3,975

-3, 294 2,360
-3,701 -1,407
-3, 854 -5,979
-3, 881 6,885
-7,186 1,719

23, 060 -4,615 18, 445
-876 - 2 , 522 4,617
9,361 -5,022 4,339
312 - 2 , 245 4,714
1,334 - 3 , 044 4,749 -10,585 -4, 708 15, 292

1976:1....
II....
III...
IV._.

27,001
28, 380
29, 602
29, 711

-28,352
-29,963
-32,418
-33, 314

-1,351
-1,583
-2,816
- 3 , 603

7,027
7,369
7,428
7,420

- 3 , 405
- 3 , 332
- 3 , 293
- 3 , 281

3,622
4,037
4,135
4,139

-64
-30
237
169

-627
-399
-515
-704

1,151
1,156
1,186
1,222

2,731
3,181
2,227
1,223

1977: I
II
IV...

29, 477
30, 629
31, 009
29, 461

-36, 502
-37,263
-38, 277
-39, 664

-7,025
- 6 , 634
- 7 , 268
-10,203

7,796
8,088
8,220
7,997

-3,197
-3,60i
-3,610
-4,185

4,599
4,487
4,610
3,812

568
295
467
5

-907
-759
-677
-701

1,136
1,171
1,260
1,183

-1,630
-1,440
-1,609
-5,903

-1,126 -2,756
-1,243 - 2 , 683
-1,277 - 2 , 886
- 1 , 064 - 6 , 967

1978:1....
II....

30, 664 -41, 865 -11,201 9,381 - 4 , 503 4,878
35, 067 -42, 869 - 7 , 802 .0, 003 -5,420 4,583
36.930 -44,975 -8,045 9,946 -5,396 4,550

210
592
177

-823 1,361 - 5 , 576
-626 1,468 -1,785
-802 1,563 - 2 , 557

-1,282 - 6 , 858
-1,317 -3,102
-1,267 - 3 , 824

1
2

-1,028
-1,040
-1,908
-1,047

1,703
2,141
319
176

Excludes military grants.
Adjusted from Census data for differences in valuation, coverage, and timing.
Fees and royalties from U.S. direct investments abroad or from foreign direct investments in the United States are
excluded from investment income and included in other services, net.
4 In concept, the sum of balance on current account and allocations of special drawing rights is equal to net foreign
investment in the national income and product accounts, although the two may differ because of revisions, special handling
of certain items, etc.
3

(See next page for continuation of table.)




294

TABLE B-97.—U.S. international transactions, 1946-78—Continued
[Millions of dollars; quarterly data seasonally adjusted, except as noted]
U.S. assets abroad, net
(increase/capital outflow ( - ) l

Foreign assets in the U.S., net
[increase/capital inflow ( + ) ]
Foreign official
assets

Year or
quarter
Total

1946
1947.
1948
1949
1950
1951
1952
1953
1954

U.S.
official
reserve
assets 6

Other
U.S.
Government
assets

U.S.
private
assets

Total
Total

Statistical
discrepancy

Assets
of
foreign
official
reserve
agencies

Other
foreign
assets

Allocations of
Total
special (sum of
drawing
the
rights
items
(SDR)
with
sign
reversed)

Of
which:
Seasonal
adjustment
discrepancy

-623
-3,315
- 1 736
-266

.-_.-

1,758
-33
-415
1 256
480

-

1955
1956
1957
1958
1959

182
-869
- 1 165
2,292
1,035
2,145
606
1,533
377
171

-1,100
-910
-1,085
-1,662
-1,680

-5,144
-5,234
-4,624
-5,986
-8,049

1,258
741
1,118
1,558
1,363

821
1,939
641
1,231
1,983

-1,019
-988
-1,122
-360
-907

1965
1966
1967.
1968
1969.

- 5 , 718
1,222
-7,321
568
- 9 , 759
52
-10,987
-880
-11,593 -1,187

-1,605
-1,543
-2,423
-2,274
-2,200

67
740
132
-5,335
-787
-674
- 6 , 3 4 5 3,659
3,367
7,378
3,450
-7,387
-761
-776
- 7 , 8 3 3 9,927
- 8 , 2 0 6 12, 701 - 1 , 3 0 1 - 1 , 5 5 2

607
4,333
3,928
10,703
14,002

-457
628
-206
439
- 1 515

1970.
1971
1972..
1973
1974

-9,340
-12,475
-14,461
-22,823
-34,712

2,477
2,348
32
209
-1,434

-1,589 -10,228
-1,884 -12,939
-1,568 -12,925
- 2 , 6 4 4 - 2 0 , 388
5 366 - 3 3 , 6 4 3

-39,444
- -50,608
-34,650

-607

-4,099
-5,538
-4,177
-7,271
-9,559

1960
1961
1962
1963
1964

1975.
1976
1977.

1976: 1
II....
III...
IV

-12,365
-11,740
-10,269
-16,235

-1,334
1977: 1
I I . - -12,003
III... -6,615
IV.... - 1 4 , 7 0 0
1978: l_— - 1 5 , 0 3 6
II--.- -6,134
III p . . - 1 1 , 0 0 6

2,294
2,705
1,911
3 217
3,644

1,473
765
1,270
1,986
1,661

6,357
22,987
21,696
18,663
34,677

6,907
26,895
10, 705
6,299
10,981

-550
7,362
27,405 - 3 , 9 0 7
10, 322 10,991
5,145 12, 364
10,257 23,696

867
-244
717 - 9 , 8 2 2
710 - 1 , 9 6 6
-2,725
- 1 684

- 3 , 4 7 0 - 3 5 , 3 6 8 15, 550
- 4 , 2 1 3 - 4 3 , 8 6 5 36,969
- 3 , 6 7 9 - 3 0 , 740 50,869

6,907
18,073
37,124

5,259
13,080
35,480

8,643
18,897
13, 746

5,449
9,300
-927

- 1 0 , 8 3 0 7,590
- 9 , 2 3 0 7,914
- 8 , 522 8,932
- 1 5 , 2 8 3 12,534

3,819
4,017
3,070
7,166

2,323
3,351
1,320
6,086

3,771
3,897
5,862
5,367

3,073
1,685
1,018
3,525

688
215
-2,636
1,734

-388
2,490
-949
6
- 7 9 5 - 1 1 , 2 1 ' 14,064
151 - 1 , 0 9 8 - 5 , 6 6 8 14,251
- 8 3 8 - 1 3 , 8 6 2 20,065

5,451
7,884
8,246
15, 543

4,946 - 2 , 9 6 2
6,180
7,467
6,005
7,914
4,522
15,153

1,600
622
- 4 , 751
1,602

131
-179
-2,229
2,276

2,336
6,090
9,708

3,798
8,830
218

-2,411

-*s

-773
-762
-1,578
-932
- 4 0 7 - 1 , 340
228 - 1 , 1 8 0

246
-896 -14,386
329 - 1 , 1 7 6 - 5 , 2 8 7
180 - 1 , 4 9 4 - 9 , 6 9 2

18,095 15,760 14,956
406 - 5 , 6 8 5 - 5 , 3 7 3
14,612
4,904
4,554

160

s Includes extraordinary U.S. Government transactions with India.
«Consists of gold, special drawing rights, convertible currencies, and the U.S. reserve position in the International
Monetary Fund (IMF).
Note.—Quarterly data for changes in U.S. official reserve assets, U.S. private assets abroad, and foreign assets in the
United States are not seasonally adjusted.
Source: Department of Commerce, Bureau of Economic Analysis.




295

T A B L E B—98.—U.S. merchandise exports and imports by principal end-use categories, 1965—78
[Millions of dollars; quarterly data seasonally adjusted]
Imports

Exports
Nonagricultural

Year or quarter
Total

Agricultural

Non- petroleum
Total

Total

Capital
goods

Other
goods

Petroleum
and
products

Total

Industrial
supplies

Other
goods

1965
1966
1967
1968
1969

26,461
29, 310
30,666
33,626
36, 414

6,305
6,949
6,453
6,297
6,096

20,156
22,361
24,213
27, 329
30,318

8,052
8,907
9,934
11,111
12, 369

12,104
13,454
14,279
16, 218
17,949

21,510
25, 493
26,866
32,991
35, 807

2,034
2,078
2,091
2,384
2,649

19,476
23,415
24,775
30,607
33,158

9,123
10,235
9,956
12,027
11, 798

10,353
13,180
14,819
18, 580
21, 360

1970
1971
1972
1973
1974

42,469
43, 319
49, 381
71,410
98,306

7,374
7,831
9,513
17,978
22,412

35,095
35,488
39, 868
53,432
75, 894

14,659
15, 372
16,914
21,999
30,887

20,436
20,116
22,954
31,433
45,007

39,866
45, 579
55,797
70,499
103,649

2,930
3,650
4,650
8,415
26,589

36,936
41,929
51,147
62,084
77,060

12,467
13, 824
16, 349
19, 725
27,975

24,469
28,105
34,798
42, 359
49,085

107,088
114,694
120, 576

22, 242
23,381
24, 336

84,846
91,313
96, 240

36,659
39,065
39, 807

48,187
52,248
56, 433

98,041
124,047
151, 706

27,017
71,024
34,573 89,474
44,980 106,726

24,211
30,000
36, 070

46, 813
59,474
7C, 656

1977: 1
II
Ill
IV

29,477
30, 629
31, 009
29,461

6,219
6,480
5,974
5,663

23,258
24,149
25, 035
23, 798

9,584
9,852
10,286
10,085

13,674
14, 297
14, 749
13,713

36, 502
37,263
38, 277
39,664

11, 574
11,536
11,306
10, 564

24,928
25,727
26,971
29,100

8,095
9,142
9,182
9,651

16,833
16, 585
17, 789
19, 449

1978: 1
II
Ill »

30, 664
35, 067
36, 930

6,505
7,994
7,922

24,159
27, 073
29, 008

9,969
11,062
12,465

14,190
16, 011
16, 543

41, 865
42,869
44,975

9,945
10,807
10,823

31, 920
32,062
34,152

10, 710
11,170
10,916

21,210
20,892
23, 236

1975
1976
1977

.

_

Note.—Data are on an international transactions basis and exclude military shipments.
Source: Department of Commerce, Bureau of Economic Analysis.




296

TABLE B-99.—U.S. merchandise exports and imports by area, 1972-78
[Millions ot dollars]
1972

Item

1973

1974

1975

1976

1977

19781

49, 381

71,410

98, 306

107, 088

114,694

120, 576

136, 881

Developed countries.

34, 564

48, 529

64, 487

66, 496

72,339

76,712

84,427

Canada
Japan
Western Europe
Australia, New
South Africa

13,109
4,963
14, 950

16, 710
8,356
21, 216

21, 842
10, 724
28,164

23, 537
9,567
29, 884

26,336
10,196
31,887

28,293
10, 566
34, 076

30, 059
12,157
38,261

Exports

Zealand, and
1,542

2,247

3,757

3,508

3,920

3,777

3,949

13, 917

Developing countries..

20, 834

32, 082

37, 343

38,254

40, 952

48, 540

3,414

6,219
25, 863

9,956
27, 387

11,561
26,693

12, 878
28, 074

14, 779
33,761

2,912

4,467

2,551
11, 366

OPEC2.
Others.

17, 420
Eastern Europe

1,737

3,249

4,101

103,649

98, 041

U24,047

61, 092

55, 973

67,488

79, 247

97, 572

22, 392
12,414
24, 267

21,710
11,257
20, 764

26,475
15, 531
23,003

29,664
18, 565
28, 226

32, 875
24, 395
36,120

900
2,047

Imports

55, 797
70, 499

Developed countries.

40, 643

Canada
Japan
Western Europe
Australia, New
South Africa

14, 493
9,076
15, 661
Zealand, and

Developing countries..
OPEC 2_
Other 3_.
Easte rn Europe..

48, 985
17,694
9,665
19, 774

151, 706 U72,945

1,413

1,852

2,019

2,242

2,479

2,792

4,183

14, 791

20, 913

41, 580

41, 334

55, 375

70, 678

73, 737

2,974
11,817

5,097
15, 816

17, 234
24, 346

18, 897
22, 437

27,409
27,966

35, 778
34,900

33,163
40, 575

363

601

977

734

875

1,127

1,441

1
First 3 quarters at seasonally adjusted annual rate; preliminary. Detail will not add to totals because of seasonal
adjustment discrepancy and rounding.
2 Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates
and Venezuela.
3 Latin American Republics, otherWestern Hemisphere,and other countries in Asia and Africa,less petroleum exporting
countries and the International Monetary Fund.
4
Includes imports of nonmonetary gold from International Monetary Fund, not in area detail.

Note.—Data are on an international transactions basis and exclude military shipments.
Source: Department of Commerce, Bureau of Economic Analysis.




297

TABLE B-100.—International investment position of the United States at year-end, 1970-11
[Billions of dollars]

1970

Type of investment

1976

1977

37.1

58.3

73.9

80.7

70.0

199.0

255.7

295.1

346.4

381.3

14.5

13.2

15.9

16.2

18.7

19.3

11.1
.9

10.5
2.0

11.7
2.4

11.6
2.3

11.6
2.4

11.7
2.6

1.9
.6

.5
.2

1.9
.0

2.2
.1

4.4
.3

4.9
.0

Monetary

32.1

Foreign official assets
U.S. Government securities 1 .
Other U.S. Government liabilities
Liabilities reported by U.S. banks, not included elsewhere
_
Other official assets
Other foreign assets
Direct investments in the United States (book value)..
Liabilities reported by U.S. banks, not included elsewhere
_
U.S. Treasury securities
Other U.S. securities 2
Liabilities to unaffiliated foreigners reported by U.S.
nonbanks.

49.6

44.1
1.9

47.8
1.8

149.7

201.5

237.1

281.7

312.4

75.5
21.0

89.9
27.6

110.1
28.2

124.1
34.9

136.4
44.1

148.8
49.3

13.8

20.7

46.2

59.8

81.1

92.6

8.5

11.4

17.0

18.3

20.1

21.8

161.8

197.4

221.2

265.7

311.3

63.2

80.3

87.6

106.6

143.1

17.7
1.7

52.9
1.6

57.7
3.5

63.3
5.1

73.6
10.1

106.0
11.8

6.7
.0

8.5
.2

18.4
.6

16.3
2.9

17.2
5.6

18.0
7.2

80.7

Foreign assets in the United States.

46.0

39.8
2.0

26.1

Direct investments abroad (book value).
Foreign securities
Claims on foreigners reported by U.S. banks, not included elsewhere
Claims on unaffiliated foreigners reported by U.S.
nonbanks

41.8

36.3
2.1

106.8

U.S. private assets.

38.4

34.1
2.0

118.8

U.S. loans and other long-term assets
_
U.S. short-term assets other than reserves.

36.1

29.7
2.5

Other U.S. Government assets.

2

1975

58.6

U.S. official reserve assets.

1

1974

165.5

Net international position of the United States.
U.S. assets abroad

Gold
Special drawing rights (SDR).
nternational
Reserve position in the Ir
Fund ( I M F ) .
Foreign currency reserves.

1972

£8.7

117.1

133.6

159.1

168.2

13.3

14.9

25.1

27.7

30.8

34.1

22.7
1.2
34.7
8.8

21.2
1.2
50.7
10.7

41.8
1.7
34.9
13.6

42.5
4.2
45.3

53.5
7.0
54.8

60.2
7.6
53.1

13.9

13.0

13.3

Includes Treasury and agency issues of securities.
Corporate and other bonds and corporate stocks.

Note.—Gold is valued at SDR35 per ounce, throughout. The SDR value is converted to dollars at $1/SDR before December 1971, at $1.08571/SDR from December 1971 through January 1973, at $1.20635/SDR from February 1973 through
June 1974, and as measured by the basket valuation of the SDR beginning July 1974.
Source: Department of Commerce, Bureau of Economic Analysis.




298

TABLE B-101.—International reserves, 1952, 1962, and 1974-78
[Millions of dollars; end of period]

Area and country
1

1974

1962

1975
226,852
121,880

1978

1976

1977

257,402
131,849
18,320
5,843
16,605

347,874

5,636
12,993
4,230

317,847
169,356
19,392
4,608
23,261
4,244
5,761
10,194
39, 737
11,629
8,065
7,539
13,830
21,057

13,734

15,668

21, 296
4,018
59, 326

November

Industrialized countries 2 ..

United States.
Canada
Japan
Austria
Belgium
France
Germany
Italy
Netherlands
Scandinavian countries (Denmark, Norway, and Sweden).
Switzerland
United Kingdom
Other Europe

Australia, New Zealand, and South
Africa
Oil exporting countries.
Iran
Nigeria

Saudi Arabia 3 ..

49,187
36,773
24, 714
1,944
1,101
116
1,133
686
960
722
950

62,659
49, 254
17,220
2,561
2,021
1,081
1,753
4,049
6,957
4,068
1,944

219,799
119,908
16,058
5,825
13,519

817
1,667
1,956

1,362
2,919
3,308

4,600
9,011
6,939

1,559

All countries.

2,966

15,138

1,509
1,699
177
500

2,066

6,068

4,900

4,602

3,657

2,030

46,995
8,383
5,626
14,285
6,513
12,188
31,691
11,905

56,533
8,897
5,609
23,319
8,861
9,847

75,495

30,496
10, 021

65,233
8,833
5,203
27,025
8,578
15, 594
41, 983
15,215

4,754
12, 055
2,977

5,186
12, 513
2,777

5,778
17,912
3,078

443
579

Venezuela
Other*

Other less developed areas
Other Western Hemisphere
Other Middle East
Other Asia

Other Africa

1952

_

7,187
2,086
826
3,479
796

211
289
268
583
679
6,343
1,700
992
2,663

1
Includes
2
Includes
3

3,430
5 345
8,852
32,398
6,941
6,957

15,883
5,326
12,815
4,439
5,797
12, 593
31,034
4,774
7,109
6,191
10,428
5,459
13,046

4,410
5,206
9,728
34,801
6,654
7,387

12,266
4,259
30,034
8,214
20,722
53,670
20,296
7,472
22,141
3,763

198,808

18,605
4,487
32,730
5,345
5,820
13,319
52,301
14,123
6,930
9,955
18,381
16,770

1,619
19,761
6,526
64,427
26, 716
8,547.
25, 390
3,776

Cuba.
Luxembourg.
Data beginning April 1978 exclude the foreign exchange cover against the note issue.
* Algeria, Indonesia, Iraq, Kuwait, Libya, Oman, Qatar, and United Arab Emirates.
Note.—International reserves is comprised of monetary authorities' holdings of gold, special drawing rights (SDR),
reserve positions in the International Monetary Fund, and foreign exchange. Data exclude U.S.S.R., other Eastern European
countries, Mainland China, and Cuba (after 1960).
Source: International Monetary Fund, "International Financial Statistics."




299

TABLE B—102.—Summary of major U.S. Government net foreign assistance, July 1, 1945 to
' December 31. 1977
[Millions of dollars] >

Yearly average or calendar year
Type and geographic distribution

1945-492

Investment in 6 international financial institutions 3 _.

1955-59

1960-64

1965-69

5,540

Total.net

1950-54
5,059

4,772

4,664

5,899

141
5,399

Under assistance programs, net

325
340
15

Net new military grants
Gross new grants
Less: Reverse grants and returns
Other grants, credits, and other assistance (through net
accumulation of foreign currency claims), net

5,074

Net new economic and technical aid grants *
Gross new grants
Less: Reverse grants and returns

3,312
3,486
174

Net new credits < s
New credits
Less: Principal collections

1,762
1,986
224

Other assistance (through net accumulation of foreign
currency claims)«

7

5,059
2,462
2,494
32
2,597
2,406
2,512
106
148
544
396
42

124

81

4,764

4,540

5,818

2,438
2,451
14

1,594
1,629
35

2,190
2,196

2,327

2,946

3,628

1,710
1,759
48

1,850
1,872
22

1,776
1,780
4

210
827
617

871
1,843
972

1,950
3,082
1,132
-98

407

225

Currency claims acquired
Sales of farm products
Second-stage operations 7 .

965
963
2

1,230
1,186
44

Less: Currencies disbursed
Economic grants and credits to purchasing
country
Other uses

558

1,005

912

413
145

807
198

716
196

814
691
122

Geographic distribution of net nonmilitary assistance

904

Developing countries,* net total
Net new economic and technical aid grants
Net new credits
Other assistance (through net accumulation of foreign
currency claims)

1,032

2,211

3,316

3,611

752
152

772
240

1,470
386

1,817
1,310

1,765
1,926

Net new economic and technical aid grants
Net new credits
Other assistance (through net accumulation of foreign
currency claims)

20

355

4,170

Developed countries, 8 net total.

1,564

116

2,560
1,610

1,634
-92

240
-176

22

189
-371

17

32
-439

11
24

36

-18

1 Negative figures ( — ) occur when the total of grant returns, principal repayments, and/or foreign currencies disbursed
by the Government exceeds new grants and new credits utilized and/or acquisitions of foreign currencies through new sales
of farm products.
2 July 1,1945, through December 31,1949. Yearly average is for 4 ^ years.
s Includes paid-in capital subscriptions and contributions to the special funds of the African Development Fund, Asian
Development Bank, Inter-American Development Bank, International Bank for Reconstruction and Development, International Development Association, and International Finance Corporation.
4
Net new grants are not adjusted for settlements of postwar relief and other grants under agreements, and net new
credits exclude prior grants converted into credits. Repayments on these settlements are included in net new credits.
« Outstanding credits on December 3 1 , 1977, totaled $41,610 million, representing net credits extended since organization of Export-Import Bank, February 12, 1934, less chargeoffs and net adjustments due to exchange rates ($1,537
million), and excluding World War I debts. The amount repayable in dollars at U.S. Government option was $39,018 mill i o n ; the remainder was repayable in foreign currencies, commodities, or services, at the option of the borrowers.
(See next page for continuation of table.)




300

TABLE B-102.—Summary of major U.S. Government, net foreign assistance, July. /, 1945 to
December 31, 1977—Continued
[Millions of dollars] >
Yearly average or calendar year
Type and geographic distribution
1970-74

Under assistance programs, net

1977 P

8,671

332

Investment in 6 international financial institutions 3 ..

1976

7,146

Total, net

1975

654

7,930
1,102
6,828
1,339
1,342
3
5,488

6,723
870
5,853
757
760
3
5,096
2,275
2,275

6,814

8,017

Net new military grants
Gross new grants
Less: Reverse grants and returns

3,310
3,314
5

2,891
2,895
4

Other grants, credits, and other assistance (through net
accumulation of foreign currency claims), net

3,504

5,126

Net new economic and technical aid grants4
Gross new grants
Less: Reverse grants and returns

2,486
2,534
48

2,247
2,249
2

Net new credits 45
New credits
Less: Principal collections

1,190
3,836
2,646

2,849
5,293
2,444

Other assistance (through net accumulation of foreign
currency claims) 6

-171

30
189
5
184

-53
129

-39
175

159
21
138

182

24
1
16
198

Currency claims acquired
Sales of farm products 7
Second-stage operations

742
106
635

Less: Currencies disbursed
Economic grants and credits to purchasing
country
Other uses

913
709
204

2,266
2,272
6
3,275
5,837
2,563

42
140

2,860
5,546
2,686

Geographic distribution of net nonmilitary assistance
3,614

Developing countries,* net total
Net new economic and technical aid grants
Net new credits
Other assistance (through net accumulation of foreign
currency claims)

5,017

2,529
1,234

2,248
2,711

Net new economic and technical aid grants
Net new credits
Other assistance (through net accumulation of foreign
currency claims)

58

-110

Developed countries,* net total..

-149

109

-44
-44

-1
138

-22

-28

5,329
2,266
3,093
-30
158

ill
-23

5,284
2,273
3,017
-6
-188
2
-157
-33

e Equivalent value of currencies still available to be used, including some funds advanced from foreign governments and
after loss by exchange rate fluctuations ($1,962 million), was $555 million on December 31, 1977.
i Includes foreign currencies acquired from triangular trade operations and principal and interest collections on credits,
originally extended under Public Law 83-480, which—since enactment of Public Law 87-128—are available for the
same purposes as Public Law 83-480 currencies.
s Developed countries include Australia, Canada, Japan, New Zealand, Republic of South Africa, and all countries in
Europe except Cyprus. Gibraltar, Greece, Malta, Portugal, Spain, Turkey, and Yugoslavia. Developing countries include
all other countries. This classification is on the basis of the standard list of less developed countries used by the Development Assistance Committee of the Organization for Economic Cooperation and Development.
•Less than plus or minus $500,000.
Source: Department of Commerce, Bureau of Economic Analysis, based on information made available by operating
agencies.




301

TABLE B-103.—World trade: Exports and imports, 1965, 1970, and 1974-78
[Billions of U.S. dollars]
Area and country

1965

1970

1974

1975
Exports, f.a.s.

1976

1977

1978i

2

129.7

225.9

547.9

583.3

647.3

734.8

853.4

United States
Canada
Japan

27.5
8.5
8.5

43.2
16.7
19.3

98.5
34.5
55.6

107.6
34.1
55.8

115.0
40.5
67.3

121.2
43.4
81.1

140.2
47.5
99.9

European Community 4

64.8

113.0

276.9

298.4

328.8

382.0

444.0

10.2
17.9
7.2
13.8

18.1
34.2
13.2
19.6

46.3
89.3
30.5
39.4

53.1
90.2
34.8
44.5

57.2
102.2
37.3
46.7

65.0
118.1
45.0
58.2

79.5
142.1
52.5
71.2

20.4

33.6

82.4

87.4

95.7

107.1

121.8

35.2

54.3

216.8

203.7

248.6

283.3

296.1

10.7
24.5

17.6
36.7

120.5
96.3

111.5
92.2

135.3
113.3

147.6
135.7

145.0
151.1

23.2

34.7

75.5

90.4

99.1

115.8

133.3

8.2
11.8
2.0

12.8
18.2
2.1

27.4
37.6
6.7

33.4
45.3
7.2

37.3
49.5
7.3

45.2
56.9
7.9

52.9
63.8
9.9

188.1

314.9

840.2

877.4

995.0

1,133.9

Developed countries 3

France
West Germany
Italy
United Kingdom
Other developed countries
Developing countries
OPEC5
Other....
Communist countries 6
U.S.S.R
Eastern Europe
China
TOTAL

1, 282. 8

Imports, c.i.f. 7

136.7

235.3

608.6

610.9

701.5

793.3

889.2

United States
Canada
Japan.

23.2
8.7
8.2

42.4
14.3
18.9

108.0
34.4
62.1

103.4
36.2
57.9

129.6
40.3
64.9

157.6
42.1
71.3

184.0
45.8
80.2

European Community 4

69.3

116.9

295.9

301.9

345.6

389.7

440.9

France
West Germany
Italy
United Kingdom..

10.4
17.6
7.4
16.1

19.1
29.9
15.0
22.0

52.9
69.6
41.1
55.0

54.0
74.9
38.4
54.2

64.4
88.4
43.4
56.6

70.5
101.5
47.6
64 6

80.7
121.2
52.4
77.8

Other developed countries

27.3

43.0

108.2

111.5

121.2

132.7

138.2

37.0

56.6

163.3

189.5

207.2

249.1

291.3

6.5
30.5

10.0
46.6

33.4
129.9

52.7
136.8

64.1
143.1

87.5
161.6

104.1
187.2

22.6

34.2

79.2

100.8

105.1

115.3

133.5

8.1
11.6
1.8

11.7
18.5
2.2

24.9
42.3
7.4

37.1
51.3
7.4

38.2
55.6
6.0

40.9
61.7
6.9

49.0
67.7
10.1

196.3

326.1

851.1

901.1

1,013.8

1,157.7

1,314.0

Developed countries 3

Developing countries..
OPEC5
Other
Communist countries 6
U.S.S.R
Eastern Europe
China
TOTAL...

1 Preliminary estimates.
2
Free-alongside-ship value.
s Includes the OECD countries, South Africa, and non-OECD Europe.
4
Includes Belgium-Luxembourg, Denmark, Ireland, and the Netherlands, not shown separately,
s Includes Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Oman, Qatar, Saudi Arabia,
Arab Emirates, and Venezuela.
«Includes North Korea, Vietnam, Albania, Cuba, Mongolia, and Yugoslavia, not shown separately.
7
Cost, insurance, and freight value.

United

Sources: International Monetary Fund, Organization for Economic Cooperation and Development, and Council of
Economic Advisers.




302

TABLE B-104.—World trade balance and current account balances, 1965, 1970, and 1974-78
[Billions of U.S. dollars]
Area and country

1965

1974

1970

1975

1976

1977

1978i

World trade balances
Developed countries >.
United States.
Canada
Japan
European Community*.

-6.9

-9.6

-60.7

-27.6

-54.2

-58.5

-35.8

4.3

.8
2.5
.4

-9.5

-14.6

-6! 5

4.2
-2.1
-2.1

-36.3
1.3
9.8

-43.8
1.7
19.7

-4.5

-3.9

-19.0

-3.5

-16.8

-7.7

3.1

-.2
.3

-6.7
19.7
-10.6
-15.6

-.8
15.2
-3.6
-9.6

-7.2
13.7
-6.2
-9.9

-5.5
16.6
-2.5
-6.4

-1.3

-24.1

-25.5

-25.7

'.Z

2*. 4

France
West Germany...
Italy
United Kingdom..

-l!3

-1.0
4.3
-1.8
-2.4

Other developed countries

-6.8

-9.4

-25.8

-1.8

-2.3

53.4

14.3

41.3

34.2

4.2
-6.0

7.6
-9.9

87.0
-33.6

58.9
-44.6

71.2
-29.9

60.1
-25.9

4.8
40.9
-36.1

.5

.5

-3.7

-10.4

-6.0

.5

-.2

.1
.2
.2

1.1
-.4

2.5
-4.7

-3.7
-6.0

-.9
-6.1
1.3

4.3
-4.8
1.0

3.9
-3.9

-8.2

-11.4

-11.0

-23.7

-18.9

-23.8

-31.2

Developing countries
OPEC «_.
Other...
Communist countries *.
U.S.S.R
Eastern Europe..
China
TOTAL *

20.9
.2

-6.6
-16.4

Current account balances8
3.8

6.7

-25.3

0.3

-19.0

-27.5

0.5

5.4
-1.1
.9

2.4
1.1
2.0

1.7
-1.5
-4.7

18.4
-4.7
-.7

4.3
-3.8
3.7

-15.3
-3.9
10.9

-17.0
-4.0
20.0

.9

3.2

-12.4

.4

-6.6

.8

9.8

!9
1.1
1.8

-6.0
9.8
-8.0
-8.6

l!o

-.8
-4.1

-6.1
3.8
-2.8
-2.0

-3.3
3.7
2.3
.5

2.0
6.0
5.5
-.5

-8.5

34.8

-11.2

11.0

7.5

-23.0

-^8.'0

59.3
-24.5

27.3
-38.5

37.0
-26.0

31.5
-24.0

11.0
-34.0

Other i ° .

-2.8

-9.8

-18.5

-12.8

-10.0

-10.8

TOTAL..

-4.5

-.3

-29.5

-20.8

-30.0

-33.3

OECD.
United States.
Canada
Japan
European Community*
France
West Germany...
Italy
United Kingdom..
Developing countries..
OPEC »_.
Other...

-L6
_

2.2
i

* Preliminary estimates.
2 Exports f.a.s. (free alongside ship) less imports c.i.f. (cost, insurance, and freight),
s Includes the OECD countries, South Africa, and non-OECD Europe.
* Includes Belgium-Luxembourg, Denmark, Ireland, and the Netherlands, not shown separately.
«Includes Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Oman, Saudi Arabia, United Arab
Emirates, and Venezuela.
« Includes North Korea, Vietnam, Albania, Cuba, Mongolia, and Yugoslavia, not shown separately.
7
Asymmetries arise in global payments aggregations because of discrepancies in coverage, classification, timing, and
valuation in the recording of transactions by the countries involved.
8 OECD basis.
9
Consists of countries in footnote 4 plus Bahrain and Qatar.
10 Includes Communist countries and non-OECD developed countries.
Sources: International Monetary Fund, Organization for Economic Cooperation and Development, and Council of
Economic Advisers.




303

T A B L E B—105.—Consumer prices and hourly compensation, major industrial countries, 1960—78
[1967=100)
United
States

Year or quarter

Canada

Japan

France

West
Germany

Italy

United
Kingdom

Consumer prices
88.7
89.6
90.6
91.7
92.9

85.9
86.7
87.7
89.3
90.9

67.7
71.3
76.1
81.9
85.0

78.8
81.4
85.3
89.4
92.5

82.8
84.7
87.3
89.8
92.0

74.1
75.7
79.2
85.1
90.1

78.9
81.6
85.1
86.8
89.6

1965
1966
1967
1968 . .
1969

94.5
97.2
100.0
104.2
109.8

93.1
96.6
100.0
104.1
108.8

91.5
96.2
100.0
105.3
110.8

94.8
97.2
100.0
104.5
111.3

94.9
98.3
100.0
101.5
103.4

94.2
96.4
100.0
101.4
104.1

93.9
97.6
100.0
104.7
110.4

1970
1971
1972 1973
1974 .

116.3
121.3
125.3
133.1
147.7

112.4
115.6
121.2
130.3
144.5

119.3
126.5
132.3
147.9
184.0

117.1
123.5
131.1
140.7
160.0

107.1
112.7
119.0
127.2
136.1

109.2
114.4
121.0
134.0
159.7

117.4
128.5
137.7
150.2
174.3

1975
1976
1977

161.2
170.5
181.5

160.1
172.1
185.9

205.8
224.9
243.0

178.9
196.1
214.5

144.2
150.7
156. 6

186.8
218.1
255.2

216.5
252.4
292.4

1977: 1
II..
III
IV

176.9
180.7
183.3
185.3

179.7
183.9
188.0
192.0

237.3
243.7
244.4
246.5

205.6
211.9
216.9
221.1

154.8
156.9
157.3
157.6

242.9
252.1
258.5
267.2

279.7
292.1
296.8
301.1

1978" 1
II
III

188.5
193.4
197.9

195 6
200.3
205.4

247.5
252.6
254.3

224.6
230.9
237.1

159.6
161.1
161.0

274.1
282.6
289.3

306.2
314.6
320.0

1960
1961
1962
1963
1964

.. .
-

-.
- -

Hourly compensation'
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974

77.1
79.5
82.6
85.2
88.9

_

_

_-

-

-

1975
1976
1977

--

fO. 3
78.9
77 0
79.0
82.0

43.4
50.3
57.5
64.1
72.0

56 0
61.7
67 9
75.0
80.7

51.8
60.5
68 8
73.6
79.5

46 8
51.8
61 1
72.3
80.4

65.9
70.8
74.6
77.9
83.2

91.0
95.3
100.0
107.1
113.9

86.2
93.0
100 0
107.4
115.5

81.1
89.2
100.0
116.9
139.3

86.9
92.5
100 0
112.6
111.6

85.7
94.3
100.0
105.9
117.3

86.0
89.8
100 0
106.8
121.1

91.2
98.7
100.0
93.3
100.6

121.7
129.5
136.6
146.4
161.1

128.2
142.6
156.8
170.6
201.7

165.9
197.3
259.2
353.7
431.2

117.2
131.3
159.9
208.1
229.6

145.9
173.4
211.4
289.3
342.5

145.0
169.7
206.0
261.7
291.6

115.1
133.4
153.3
167.7
204.5

180.1
195 1
212.2

222.1
261 3
268.4

497.2
538.3
650.5

304.7
312 5
348.6

406.2
420 1
497.5

374.7
352 6
391.0

247.8
237.8
252.9

not compensation to employees, but are labor costs to employers.
Source: Department of Commerce (Bureau of International Economic Policy and Research) and Department of Labor
(Bureau of Labor Statistics).




304

TABLE B-106.—Industrial production and unemployment rate, major industrial countries91960-78
[Quarterly data seasonally adjusted]
United
States

Year or quarter

Canada

European
Community *

Japan

France

West
Germany

Italy

United

Kingdom

Industrial production (1967= 100)2
1960
1961
1962
1963
1964

66.2
66.7
72.2
76.5
81.7

63.0
65.6
71.1
75.7
82.6

43.0
51.3
55.4
61.7
71.4

74.7
78.1
81.3
84.8
91.0

71
75
79
83
90

77.6
82.0
86.4
89.4
96.6

60.0
65.7
71.9
77.9
79.1

84.0
84.0
84.8
88.4
95.0

1965
1966
1967
1968.
1969

89.8
97.8
100.0
106.3
111.1

89.6
96.3
100.0
106.4
113.7

74.2
83.9
100.0
115.2
133.4

94.7
98.4
100.0
107.4
117.6

93
98
100
104

102.1
103.0
100.0
109.2
123.1

83.0
92.3
100.0
106.4
110.5

97.7
99.2
100.0
106.8
110.3

1970
1971
1972
1973
1974

107.8
109.6
119.7
129.8
129.3

115.3
121.5
130.7
143.0
147.5

151.7
155.8
167.2
190.5
183.1

123.3
126.1
131.7
141.4
142.3

120

128
135
145
148

131.1
133.6
138.7
147.7
145.1

117.6
117.5
122.7
134.6
140.6

110.9
110.6
113.2
123.0
120.0

1975
1976
1977
1978 P

117.8
129.8
137.1
145.1

139.6
146.7
152.6

163.9
182.0
189.5

132.8
142.5
145.0

139
149
152

137.1
149.1
152.7

127.6
143.5
145.1

114.3
117.4
123.1

1977:1

133.6
137.0
138.4
139.3

151.4
151.7
152.7
154.8

189.2
188.9
188.7
191.2

149
147
144
144

153
152
151
149

153
151
152
153

154.5
143.6
142.5
139.5

123.2
123.0
123.6
122.3

1978:1
M

139.6
144.0
147.0
149.5

155.8
157.8
160.4

196.7
200.2
201.6

146
146

152
155
154

153
153
157

146.0
144.6
145.2

124.1
128.0
128.3

_

_

II
III
IV

III

IV v

114

Unemployment rate (percent) 3

_

1965
1966
1967
1968 .
1969.
1970...
1971
1972
1973.
1974

_.
.

._
„

_
__

1975.
1976
1977.
1978*
1977:1
II

..

Ill
IV

.

..

1978:1
| |

III
IV '

„

5.5
6.7
5.5
5.7
5.2

7.0
7.1
5.9
55
4.7

1.7
1.5
1.3
1.3
1.2

1.8
1.6
1.5
1.3
1.5

1.1
.6
.6
.5
.4

3.8
3.2
2.8
2.4
2.6

2.2
2.0
2.8
3.4
2.5

4.5
3.8
3.8
3.6
3.5

3.9
3.4
3.8
4.5
4.4

1.2
1.4
1.3
1.2
1.1

1.6
1.9
2.0
2.6
2.4

.3
.3
1.3
1.4
.9

3.5
3.8
3.4
3.4
3.3

2.2
2.3
3.4
3.3
3.0

4.9
5.9
5.6
4.9
5.6

5.7
6.2
6.2
5.6
5.4

1.2
1.3
1.4
1.3
1.4

2.6
2.8
2.9
2.7
3.0

.8
.8
.8
.8
1.7

3.1
3.1
3.6
3.4
2.8

3.1
3.7
4.1
2.9
2.9

8.5
7.7
7.0
6.0

1960
1961
1962
1963
1964

6.9
7.1
8.1
8.4

1.9
2.0
2.0
«2.3

4.3
4.7
5.1

<5.5

3.6
3.6
3.6
3.4

3.2
3.6
3.4
3.5

4.1
5.5
6.2
6.1

7.5
7.2
6.9
6.6

7.9
8.1
8.2
8.4

1.9
2.1
2.1
2.1

4.9
5.1
5.3
4.9

3.5
3.5
3.6
3.5

3.4
3.4
3.5
3.4

6.0
6.0
6.3
6.4

6.2
6.0
6.0
5.8

8.4
8.6
8.5
8.2

2.1
2.3
2.3

5.0
5.1
6.0

3.5
3.4
3.4
3.4

3.5
3.5
3.6
3.6

6.3
6.2
6.1
5.9

i Consists of Belgium-Luxembourg, Denmark, France, Ireland, Italy, Netherlands, United Kingdom, and West Germany.
* All data exclude construction.
> Unemployment rates adjusted to U.S. concepts. Data for United Kingdom exclude Northern Ireland.
< 11-month average, seasonally adjusted.
Sources: Department of Commerce (Bureau of International Economic Policy and Research) and Department of
Labor (Bureau of Labor Statistics).




305

TABLE B-107.—Growth rates in real gross national product, 1960-78
[Percent change]
1960-73
annual
average

Area and country

OECO countries

1976

1977

U.S. dollar
value in
1977
(billions) 2

0.4

-0.6

5.2

3.7

3.5

4,917.8

-1.4
3.5
-1.0

-1.3
1.2
2.4

5.7
5.8
6.0

4.9
2.7
5.2

3.9
3.5
5.8

1,887.2
197.6
690.5

4.7

1.7

-1.8

5.0

2.3

2.8

1,573.0

5.7
4.8
5.2
3.2

France
West Germany
Italy.
_ _
United Kingdom

2.6
19
-.6

-2.6
-3.5
-1.6

5.6
5.6
5.6
2.6

3.0
2.6
1.7
1.6

3.0
3.0
2.0
3.0

380.7
516.3
196.0
245.2

2.3

5.4

Other OECD *
..

3.6

.0

3.5

1.8

«5.3

4.6

3.7

3.4

4.6

«5.0
M.I
«6.2

3.8
4.7
3.7

1.9
4.1
6.9

4.3
4.3
.1

3.3
4.0
9.0

7 9.0
76.1

8.0
5.3

.1
4.1

12.9
4.8

6.3
4.9

Less developed countries..
OPEC
Other.

19781

3.9
5.4
10.5

European Community3

U.S.S.R.
Eastern Europe _ _
China

1975

4.8

.__

United States
Canada
Japan..

Communist countries s

1974

569.5
1,870.0

3.2
10.5

1,047.9
348.0
372.0
1,130.0

TOTAL

8 7,960.0

* Preliminary estimates.
2
Estimates based on conversion at average rates of exchange for 1977, except for those of the Communist countries,
which were converted at U.S. purchasing power equivalents.
3
Includes Belgium-Luxembourg, Denmark, Ireland, and the Netherlands, not shown separately.
* Growth rates are for OECD countries other than the Big Seven (United States, Canada, Japan, France, West Germany,
Italy, and the United Kingdom).
5 Includes North Korea, Vietnam, Albania, Cuba, Mongolia, and Yugoslavia, not shown separately.
«1961-73 annual average.
7
1967-73 annual average.
s Sum of OECD countries, Communist countries, and less developed countries plus a residual of $42.2 billion attributable to non-OECD developed countries.
Note.—For Italy and United Kingdom, data relate to real gross domestic product. For France, data relate to gross domestic product excluding nonmarket activity such as compensation of employees in the government sector.
Sources: Department of Commerce, International Monetary Fund, Organization for Economic Cooperation and Development (OECD), and Council of Economic Advisers.




306
U. S. GOVERNMENT PRINTING OFFICE : 1979 O - 278-216














Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102