Full text of Economic Report of the President : 1979
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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.. _ _ ___ _ _ _ _ Autos and trucks Other 1 -9.9 8.6 9.1 8.3 -7.2 -11.2 3.0 11.4 7.0 10.1 12.7 6.4 2.9 -14.8 21.5 8.3 27.0 4.2 11.0 4.5 Preliminary. Source: Department of Commerce, Bureau of Economic Analysis. 32 19781 1977 1976 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. White.. Both sexes 16-19 years Males 20 years and over... Females 20 years and over. Black and other.. Both sexes 16-19 years Males 20 years and over... Females 20 years and over. Employment Civilian labor force Percent change from 1977 IV to 1978 IV 2 5.8 3.6 2.8 5.1 3.2 2.5 14.0 3.5 5.0 1.8 2.1 5.2 11.5 7.0 2.0 1.4 4.4 5.2 35.3 8.3 10.2 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 Food 3 Energy _. All items less food and energy.. 4.8 6.8 9.0 .6 6.9 6.1 8.0 7.2 6.4 11.3 7.0 8.6 Producer price index for finished goods: All finished goods Consumer goods Foods All other.. Capital equipment.. Implicit price deflator for gross national product 4 . Food consumption Other goods and services.. 3.3 6.6 9.1 2.1 6.4 9.5 -2.5 4.9 6.6 6.1 11.9 8.3 6.4 7.2 8.0 4.7 6.1 8.3 .7 5.3 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 9.1 7.5 7.4 7.5 8.2 Union wage changes (total effective adjustment)' 7.0 9.4 8.7 8.1 8.0 7.5 8.2 10.9 8.6 8.5 7.6 9.8 10.0 .9 8.0 .6 7.7 .8 6.9 8.7 1.1 -3.4 4.4 2.6 1.3 .8 14.9 4.0 5.8 6.3 8.9 Private nonfarm business sector, all persons: Compensation per hour Contribution of: (44) () 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 All food Food away from home Food at home 3 Meats, poultry, fish, and eggs . Dairy products __ Fruits and vegetables Sugar and sweets.. 1 2 3 ._ _ __ _ Nov. 1977 to Nov. 19782 1 II 12.4 20.0 7.0 6.8 11.3 10.7 13.7 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 278-216 O - 79 - 4 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 All items Food Energy All items less food and energy. 100.0 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 Compensation per hour 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 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 unlike the earnings se series above it, excludes overtime pay in manufacturing and is adjusted his index, ndex, un he average hourly eanings shifts too eliminate the effects of interindustry employment oyment shifts. 4 g for 1976 and 1977 are measured s December to December; change for 1978 is from September 1977 to Changes from D September 1978; are within Data are not seasonally adjusted. S t b 1978 quarterly t l changes h ithi quarter. 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 to 1955 Private business econopiy. Nonfarm Manufacturing Nonmanufacturing. 3.4 2.7 3.3 2.4 1955 to 1965 1965 to 1973 3.1 2.6 2.3 2.9 2.4 2.4 1.7 2.0 1973 to 1977 1.0 .9 1.5 .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) 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. Benchmark unemployment rate (percent) 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. 278-216 O - 79 - 7 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.. Compensation per hour 2_. Output per hour 2 Level, fourth quarter: iy2 \*A to IK 4 to *y2 -W2 to - 9 ^ ^ t o IK 1% to IK IK to 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 Consumer prices. RealGNP Real disposable income.. Productivity1 3.0 7.5 6.4 5.2 4.1 2.2 3.2 4.6 4.6 4.2 2.8 2.3 4.4 4.4 4.0 .4 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: Federal State and local -6.7 13.0 -.5 -70.6 6.2 -4.6 .6 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 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 Water Solid waste 5.6 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 1[.231 ] 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 1976 3.6 5.7 5.8 CO Big Six 3 1975 CO United States 1960-74 average 5.4 1977 19781 1979 2 4.9 3.9 3.3 3.3 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 OPEC countries Non-oil developing countries 0.3 -19.0 -27.5 0.5 4.3 -3.7 -19.4 -15.3 13.5 -25.7 -17.0 33.5 -16.0 27.3 37.0 31.5 11.0 -38.5 -26.0 -24.0 -34.0 10.9 8.0 20.0 22.5 ... .. ... . 1978 2 18.4 -3.8 -14.3 OECD countries United States Big Six 3 and Switzerland OtherOECD 1977 1976 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 1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 11111111111111111111 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 _. 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 Oath of office date 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 278-216 O - 79 - 12 173 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 33.8 Percent change from preceding period, gross national product1 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 ProExports Farm ducers' 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 Final InvenFinal InvenFinal Inventory tory tory sales change sales change sales change Services Structures Auto output 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 TransTrans- PurnaInter- exclud- sump- saving fers, Equals: Total fers, chases tional or noning 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-4 mestic vest- paid to Less: Equals: Exest Net ings investment Imforports ports or of exment5 (-) eigners 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 . 6i 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 Nonfarm i Total :esidl 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- intersumpProfits est ation tion Total tax Undis- adadliabiljustTotal Divi- tribu- ment justity dends 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 i1 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 Nonfarm Total Nonfarm structures Farm structures 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. 23 Annual rates. 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 Farm Total Manufac- Wholesale turing trade Final sales > Retail trade Other Total Nonfarm 3 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 nMl 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 governindus- indusment 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 PerEquals: Per- Interest sonal 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- CorpoCorpoTotal 2 deacern- rate mand counts and rate ment fordesecu- eign equiposits ties* rities* bonds 6.3 - 1 . 5 3.4 1.6 2.2 1 3 2.6 1.8 InsurNonance Con- corpoand Non- sumer rate 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 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 2.5 2.5 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 M Way. ay.... June Civilian labor force participation rates 7.9 7.7 7.6 7.6 7.4 7.6 7.7 7.8 7.7 7.7 7.8 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 nsu data added about 600,000 to population and about 350,000 to labor l force,, total t employment, empyment, and agricultural employment. Beginning 1960, about l 9 inclusion of Alaska l k and d Hawaii H i i added d d d about b t 500,000 500000 to t population, lti b t 300,000 300000 to t labor lb 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 16-19 years Total 20 20 years and over 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 5percent 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 years 16-19 years Total 16-19 years Total 16-19 years and Total 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 1,295 997 980 1,973 1,513 969 1,044 990 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 1,128.9 805.4 753.9 706.7 663.8 771.5 595.6 597.4 189 187 200 340 236 208 215 218 304 226 227 270 369 277 331 350 302 T298 268 232 203 226 201 200 296 295 261 247 363 478 386 375 342 4*10 427 354 381 384 370 374 371 364 360 353 351 346 368 339 338 331 347 364 345 326 325 338 339 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. *7 For total unemployment only. 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- facturand nonag- factur- strucstrucand agririculretail retail 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 July Aug Sept Oct Nov. Dec . . 1978: Jan. Feb Mar May_"~.. June July Aug Sept Oct NOVP.... Dec* .335 .45 .52 .61 .65 Adjusted hourly earnings, total private nonagricultural 2 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 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 May 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. *1 Also includes defense and space equipment, not shown separately. 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 80.0 73.2 1950 1951 1952 1953 1954.... 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 Total manufacturing Nondurable goods Primaryprocessed goods Wharton series» Advanced processed goods 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 * Residentiall buildings Total Public construction Total * New housing units Total Commercial Industrial Other* Total Federal State and local* 2.3 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 283.0 257.4 338.7 471.5 590.8 108.4 450.0 Total One unit 2 to 4 units 5 units or more 1,208.3 938.3 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 1,123 101 107 127 117 112 156 393 470 483 466 427 542 192.3 190.9 181.1 192.1 157.7 120.5 2,119 2,025 2,075 2,106 2,155 2,125 1,453 1,440 1,463 1,455 1,558 1,533 101 79 126 142 89 148 135 139 111 139 156 133 531 446 501 512 441 459 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* 125 133 131 148 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 Inven- Ratio s Ratios Sales i tories ^ 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 55,925 102,!,622 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; 111,256 179,1,714 211,652 311,237 216, 210 313, 488 221,612 316,976 220,835 320, 0,273 — May~_~_II I I 221, 559 322, 2, 250 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 "~l, 545 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 — 371,479 Nov p . . . . 268,"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, 301 179, 840 44 114,342 114 117,938 179,714 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 -"', 327,639 225,305 330,1,345 228, 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, 536 172| 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 52, 364 177,,297 113,160 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,' 063126,176 735 126, 784 70, 292 60,3221194,735 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 51, 5641171,575 110,242 52, 662 172, 536 110, 579 52, 522 174,015 111,133 "",522 5 2,, "368 " 175, 716112,071 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 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 All items 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 Total i 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. A pr.... 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 Total i coolant, etc. 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-1 goods ment 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 tal Other ana Non- equip- goods feeds 2 feedTotal Durdurament 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 allied1 and products, and related and 1 products products power 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 equip-2 ment 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 . *2 Prices for some items in this grouping are lagged and refer to 1 month earlier than the index month. 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 Mar Apr May June July Aug Sept. Oct Nov Dec 1978: Jan Feb Mar Apr May 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 '.7 .8 .1 L4 -1.0 1.0 .5 .7 .9 .5 .5 0.6 .6 .6 .8 .5 .5 0.3 1.9 .9 1.0 2.0 -.8 .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 34.5 16.3 17.2 18.8 21.7 19.2 19.1 21.6 26.1 31.1 38.1 42.4 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 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. 278-216 O - 79 - 17 253 TABLE B-62.—Total funds raised in credit markets by nonfinancial sectors, 1970-78 [Billions of dollars] Item Total funds raised U.S. Government Treasury issues Agency issues and mortgages Foreign 1970 1971 1972 1973 1974 1975 1976 1977 100.6 153.5 176.0 203.8 188.8 208.1 272.5 340.5 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 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 Total funds raised U.S. Government Treasury securities.— Agency issues and mortgages III 80.2 95.4 87.7 380.4 362.4 355.7 20.8 2.6 15.1 66.1 51.5 59.3 21.1 -.3 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__ . . . . . . . . . . .. 1978: Jan Feb Mar Apr May June July Aug Sept Oct Nov .. . Dec p U.S. Government securities Member bank reserves Member bank borrowings Total Other 13 12 54 134 396 142 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 11,212 481 405 344 539 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 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, 430 446 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 62 558 874 118,598 115,227 114,848 116,784 119,603 121,992 108,195 106, 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 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 Mar 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 paper, by yields (Stand4-6 banks4 ard & (FHLBB) 3 months ( ) 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 efl 1.00 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 68 1.00 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 Total budget receipts Government contribution for employee retirement (grossing) Other netting and grossing Adjustment to accruals __ _ __ _. . ._ Other Federal sector, national income and product accounts, receipts 402.0 456 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 3 413.8 464.3 513.8 450.8 493.4 531 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 1976: 1 II IN ___ __ _-. IV 1977: 1 II III IV 1978: 1 ||_. _ III IV v Surplus or deficit <-), national income and product accounts Surplus or deficit Receipts 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 69.0 85.2 90.1 94.6 89.9 101.1 109.7 116.2 115.0 129.4 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 91.0 139.5 144.8 156.7 168.5 174.0 188.3 212.3 228.2 263.4 296.3 136.4 149.1 160.5 167.8 176.3 187.8 213.6 242.4 268.9 285.6 96.1 98.1 106.2 114.4 114.9 124.3 141.8 150.5 174.7 197.0 93.1 101.9 110.4 114.2 118.2 123.8 143.6 163.7 180.6 188.4 302.6 322.2 367.4 411.2 455.1 468.5 537.2 603.3 311.9 340.5 370.9 404.9 458.2 532.8 570.4 621.8 684.2 192.1 198.6 227.5 258.3 288.6 286.2 331.4 374.5 431.6 682.7 _ State and local government Federal Government 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 6.2 532.8 543.6 556.4 561.1 562.8 574.2 583.5 -44.9 -29.9 -30.6 -27.1 318.6 329.4 335.5 342.3 587.4 598.0 605.2 622.3 595.3 609.8 630.5 651.9 -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- busichases in-aid ness tax rate tax tributions of to State and profits and for goods and TotaP Total nonTo tax non- social To and local fortax acper- eigninsurserv- sons governre- cruals tax ance ices ments acers 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 Fedcurrent of payNet surplus eral tax for tax >rofits goods Total i nterest ments 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 All from net income income Federal others 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 government 2 account bonds series 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 . . . 1975 1976 1977 1978 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 Held Held by Federal , by Govern- Reserve Totah ment accounts Banks Totals Mutual savings State Miscelbanks Corpo- and Comlocal Indi- laneous mercial and in- rations 5 governviduals * invesbanks * surance ments • tors s. s companies 322.9 345.4 352.9 71.8 76.1 84.8 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 74.2 533.2 620.4 698.8 771.5 145.3 149.6 155.5 168.0 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 91.5 107.9 138.1 173.9 653.9 663.3 669.2 671.0 672.1 674.4 144.1 144.4 144.9 145.5 149.4 151.2 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 Total Total Total Financial 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 PetroElectric Motor quarter manuFood ChemPrimary Fabri- Machinicals leum and and ery, facturmetal and and cated elec- vehicles Other Total indus- metal except and Other ing Total kindred allied coal tronic prod- prod- prodtries products electriequip- 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 nanuPetroFood Chemacturicals leum Primary and ing Total kindred and metal and coal Other Total indusprod- allied prodtries products ucts ucts Electric Motor Fabri- Machinand ery cated elec- vehicles Other except tronic and metal electriroducts 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 Stock- Sales Stockholders' holders' Before After equity 2 (net) Before After equity 2 (net) Before After holders' equity > income income 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 1947 1948 1949 Durable Nondurable goods industries All manufacturing corporations Durable goods industries Nondurable goods industries 15.6 16.0 11.6 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. . || 111 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 EIxterna 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 workNotes rent Other Governand ing Invenand current ratios Cash* ment accounts tories current Total accounts liabil- capital securi- 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 Mar 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. «5 Includes 500 stocks. 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 _ . . . Mar 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 adjust-5 ment 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 population arm popula (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 Oct 177 Nov 178 181 Dec 1978:Jan 186 Feb 193 Mar 200 Apr 208 215 May June 217 July 215 Aug 210 Sept 215 Oct 217 Nov 215 Dec 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) C33) () 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 power chemiliveand stock cals 2 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 6.9 6.7 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. >3 Fertilizer, lime, and pesticides. 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 Live- chinTotal estate equip- posits stock i ery and Cropss ment and motor and curvehifurnish- rency cles ings Pro1 nvest- Total Real Other prietors' estate U.S. ments debt debt equisavings 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 Net 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) -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. Of which: Seasonal adjustment discrepancy 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] Item 1972 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 Developing countries.. 1,542 2,247 3,757 3,508 3,920 3,777 3,949 13, 917 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 Net international position of the United States. U.S. assets abroad U.S. official reserve assets. Gold Special drawing rights (SDR). Reserve position in the Irnternational Fund ( I M F ) . Foreign currency reserves. U.S. loans and other long-term assets _ U.S. short-term assets other than reserves. U.S. private assets. 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 Foreign assets in the United States. 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. 2 1974 1975 1976 1977 58.6 37.1 58.3 73.9 80.7 70.0 165.5 199.0 255.7 295.1 346.4 381.3 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 Other U.S. Government assets. 1 1972 32.1 36.1 38.4 41.8 46.0 49.6 29.7 2.5 34.1 2.0 36.3 2.1 39.8 2.0 44.1 1.9 47.8 1.8 118.8 149.7 201.5 237.1 281.7 312.4 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 21.8 106.8 161.8 197.4 221.2 265.7 311.3 26.1 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 £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 All countries. 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 .. Other less developed areas Other Western Hemisphere Other Middle East Other Asia _ 1962 1974 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 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 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 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 Total.net Investment in 6 international financial institutions 3 _. 1945-492 1950-54 1955-59 1960-64 1965-69 5,540 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 Developing countries,* net total Net new economic and technical aid grants Net new credits Other assistance (through net accumulation of foreign currency claims) Developed countries, 8 net total. Net new economic and technical aid grants Net new credits Other assistance (through net accumulation of foreign currency claims) 904 1,032 2,211 3,316 3,611 752 152 772 240 1,470 386 1,817 1,310 1,765 1,926 20 355 4,170 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 Total, net Investment in 6 international financial institutions 3 .. Under assistance programs, net 1975 1976 1977 P 7,146 8,671 332 654 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 21 138 182 214 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 Developing countries,* net total Net new economic and technical aid grants Net new credits Other assistance (through net accumulation of foreign currency claims) Developed countries,* net total.. Net new economic and technical aid grants Net new credits Other assistance (through net accumulation of foreign currency claims) 3,614 5,017 2,529 1,234 2,248 2,711 -149 58 -110 109 -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. «7 Includes North Korea, Vietnam, Albania, Cuba, Mongolia, and Yugoslavia, not shown separately. Asymmetries arise in global payments aggregations because of discrepancies in coverage, classification, timing, and valuation in the recording of transactions by the countries involved. 89 OECD basis. 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 _ _ _- - - 1975 1976 1977 -- 77.1 79.5 82.6 85.2 88.9 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 1960 1961 1962 1963 1964 _ 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 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 .__ United States Canada Japan.. European Community3 France West Germany Italy. _ _ United Kingdom Other OECD * Communist countries s U.S.S.R. Eastern Europe _ _ China .. 1974 1975 1976 1977 U.S. dollar value in 1977 (billions) 2 4.8 0.4 -0.6 5.2 3.7 3.5 4,917.8 3.9 5.4 10.5 -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 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 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 569.5 1,870.0 3.2 10.5 1,047.9 348.0 372.0 1,130.0 TOTAL 8 7,960.0 *2 Preliminary estimates. 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