The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
M IQM 'irin] 1EBAL RESERVE BANK OF Pi o W O d W AN ECONOM IC S U R V E Y Federal Reserve Bank of Atlanta April 1 9 7 7 Theof the Federal Southeastern Duringthe Recovery District Business Conditions Federal Reserve Bank of Atlanta Federal Reserve Station Atlanta, Georgia 30303 Bulk Rate U S. Postage Address Correction Requested Atlanta, Ga. Permit 292 PAID FEATURES: The South’s Share of the Federal P ie An examination of federal expenditures provides no clear-cut proof that the Sunbelt states draw dis p r o p o r t i o n a t e l y large sums of U. S. government monies. Southeastern Banking During the Recovery . . . . update — A New Periodical This is the last issue in which Sixth District Statis tics, Debits to Demand Deposit Accounts and Dis trict Business Conditions will appear. These three features will now be carried in update, a new monthly publication. To receive up date, fill in the card insert between pages 52 and 53 of this issue. . 54 The improvement in Dis trict banking that began in 1975 resulted in a mod erate but solid recovery during 1976, and the pros pects for further improve ment in 1977 are encour aging. District Business C o n d itio n s..................... 60 Business activity has re covered from the adverse effects of cold weather and associated fuel short ages. Director of Research: Harry Brandt Editor: Teresa Wright Wiggins Graphics: Susan F. Pope, Eddie Lee, Jr. M onthly R eview , V o l. LX II, No. 4. Free subscription and additional copies available upon request to the Research Departm ent, Federal Reserve Bank o f Atlanta, Atlanta, Georgia 30303. M aterial herein may be reprinted or abstracted, provided this Review , the Bank and the author are credited. Please provide this Bank's Research Department w ith a copy of any publication in w h ich such material is reprinted. THE SOUTH’S SHARE OF THE FEDERAL PIE by William D. Tool The Sunbelt had caught the public's fancy even before Jimmy Carter's rise to prominence. Economists, too, have joined the throng of curious investigators to see just what's going on there. Facts show that this region, stretch ing from Atlantic to Pacific, has paced the nation's growth for the last 15 years. As a re sult, the South, which is a sizable part of the Sunbelt, no longer holds the distinction of being the number one economic problem of the United States. There are many hypotheses offered for the Sunbelt's growth surge, but one of the most often cited is that the alleged net inflow of federal funds has spurred an economic boom. Take the following quote from the popular book, Power Shift, as an example: “ Thus it can be said that the basis for the Southern Rim's sweeping economic develop ment— the cement under the pillars, if you w ill— is the huge federal treasury, a source of capital unlike that of any known previous ly in the w o rld ."1 The Sixth Federal Reserve District, comprised of all or parts of Alabama, Florida, Georgia, ’ Kirkpatrick Sale, Power Shift, (New Y o rk : Random House, 1975) Louisiana, Mississippi and Tennessee, lies in the southeastern corner of the Sunbelt, and rapid economic growth has been a characteristic here, too, over the past 15 to 20 years. This study concentrates on the Sixth District and explores the importance of federal government spending there. The basic question we ask is "D o Sixth District states receive more or less than their share of federal government ex penditures?" The basic data we used come from special tabulations of federal government outlays by states developed by the Community Services Administration of the Executive Office of the President.2 Several warnings are necessary about these data. They are not uniformly ad justed to measure the incidence of the ex penditure; in other words, these data do not always reflect the place where the final eco nomic impact of the federal government spending occurs. A notable example is the subcontracting of federal projects by the major prime contract recipient. Also, these data are ^Federal Outlays in Summary, 1973, 1974, 1975, and 1976, Executive O ffice of the President, Com m unity Service Adm inistration and O ffice of Econom ic O pportunity. UNCLE SAM’S EXPENDITURES AND TAX RECEIPTS T H E S O U T H E A S T ’S SH A R E TENN ESSEE MISSISSIPPI LOUISIANA U. S. Average Per Capita Federal Outlays or Tax Payments *Per $1 of Per Capita Federal Government Outlays and Taxes Fiscal Year 1974 GEORGIA FLORIDA Per Capita Outlays Per Capita Tax Payments Source: Office of Economic Opportunity, National Tax Foundation not, in every case, “ hard." That is, in some cases, outlays have been allocated to states and regions by some subjective standard when ac tual outlays by states or regions were unavail able. But, while the data must be used cau tiously, they do provide a relatively clear in dication of the geographic dispersion of federal funds. Chart 1 compares the federal taxes paid by the average resident of Sixth District states in fiscal year 1974 and what he or she received back in federal expenditures with payments and receipts of the average U. S. citizen.8 The average resident of each District state except Florida paid out less in federal taxes than he received back in federal expenditures. This resulted in a net inflow of federal funds, or a net surplus for these five Sixth District states. This pattern of net surpluses is also characteris tic of most other Sunbelt states. Thus, there is a net inflow of federal budget dollars into the Sunbelt and, more specifically, into the Sixth District states. The Sunbelt economies, ap parently, are on a net basis benefiting from the federal treasury, a finding that is not at all surprising or unexpected. With a progressive federal personal income tax and lower-thannational per capita incomes in Sixth District states, per capita federal tax payments would necessarily be lower than in other parts of the country.4 So it is the tax side, then, that makes the Sixth District states net gainers of federal funds. This, however, is an automatic means of distributing federal funds and is not discre tionary, as some analysts of the Sunbelt econ omy imply. Tax payments aside, what about federal spending in Sixth District states? Flow large are these expenditures? Do these states get their share of these outlays? After all, it is the ex penditures side of the federal budget where the discretionary decisions on geographic dis- ^Fiscal year 1974 was used here instead of more recent years because it was the latest fiscal year for w hich tax burden data were available. JThe co rrelation between state per capita personal income and per capita federal tax receipts is very high (.98). \ TA B LE 2 Location Quotients TA BLE 1 Federal Government Expenditures* Fiscal Years 1975 1974 1976 Alabama Florida Georgia Louisiana Mississippi Tennessee U. S. Alabama Florida Georgia Louisiana Mississippi Tennessee $5.5 13.0 7.2 4.9 4.1 6.7 358.9 1.5 3.6 2.0 1.3 1.1 1.8 $5.1 11.7 7.0 4.8 3.9 5.6 326.7 $4.4 9.5 5.6 3.9 3.7 4.8 281.5 Percent of Total Federal Government Expenditures 1.5 1.5 3.5 3.3 2.1 1.9 1.4 1.3 1.1 1.3 1.7 1.7 1973 $3.9 8.4 5.2 3.5 2.7 4.3 260.6 1:4 3.2 1.9 1.3 1.0 1.6 *The data reported here are slightly less than reported in the U. S. budget itself. Source: Community Services Administration V_________________________ J persion of federal funds are made. Table 1 shows the approximate size of federal expendi tures, in each of the Sixth District states for fiscal years 1973 through 1976, both absolutely and as a share of total federal expenditures. No District state earns over four percent of U. S. government expenditures, and except for Florida, the shares are generally two percent or less. These percentages have remained fairly steady in recent years. Per Capita Expenditures. One question immediately arises — "how do we define a state's fair share of federal expendi tures?" The simplest measure is to adjust fed eral outlays by a state's or region's population. In other words, we will consider federal expen ditures on a per capita basis. If these per capita figures are below the national average, we will say that the state does not receive its share. This method may be somewhat biased since the national average includes the extremely high level of per capita federal expenditures oc curring in the District of Columbia. Conse quently, we also rank each of the U. S. states by per capita outlays to examine where in the hierarchy of states the Sixth District states lie. Table 2 shows location quotients of per capita outlays for the fiscal years 1973-1976 for each of the Sixth District states. These location quotients measure the per capita federal ex penditures in a state relative to per capita fed eral expenditures for the entire nation. A loca- Alabama Florida Georgia Louisiana Mississippi Tennessee Per Capita Federal Government Outlays Fiscal Years Average 1974 1976 1975 1973 1973-76 .900 .898 .913 .896 .895 .902 .927 .881 .874 .925 .887 .934 .861 .876 .876 .781 .767 .824 .780 .755 1.062 .954 1.078 1.183 1.033 .867 .858 .851 .880 .943 Alabama Florida Georgia Louisiana Mississippi Tennessee Federal Outlays Per$1 of Personal Income 1.164 1.142 1.175 1.166 1.175 .954 .886 .926 .973 .890 1.078 .983 .996 1.016 1.009 1.001 .976 .965 .923 .960 1.352 1.438 .149 1.540 1.671 1.136 1.046 1.035 1.031 1.062 tion quotient of less than one indicates that per capita expenditures are below the national average. In other words, based on its popula tion size, that state is not getting its share of federal disbursements. The table indicates that in each of the past four fiscal years the average resident of each District state except Mississippi received an amount well below the national average of federal expenditures. Mississippi's quotient was above one in fiscal 1974, 1975 and 1976. But in 1973, per capita federal expenditures in Mississippi also fell below the U. S. average. According to this measure, five of the Sixth District States are not receiving their share of federal funds from the more discretionary expenditure side of the federal budget. Federal Expenditures and State Personal In come. Another measure of the impact of federal expenditures on a state is the relation ship of this spending to personal income. The bottom portion of Table 2 compares federal outlays per one dollar of state personal income. By this measure, only Mississippi has a location quotient substantially above one. Alabama and Tennessee also show federal outlays per dollar of state personal income slightly above the na tional average. This comparison shows four of the six Sixth District states in fiscal years 1973 through 1976 on average received their share or more than their share of federal expendi tures. The discrepancy between the per capita and personal income measures of federal out lays stems from the South's lower per capita incomes, particularly in Sixth District states. Per capita incomes range from 68.5 percent of U. S. per capita income in Mississippi to 95.5 percent in Florida. Because of lower per capita incomes, this second measure of federal ex penditures gives a biased view of the shares going to District states. It shows that Alabama, Georgia and Tennessee are receiving their shares of federal outlays when, on a per capita basis, they are not.5 State Rankings. Another way of looking at the dispersion of federal government expenditures is to examine the rankings of per capita spend ing for the fifty states and the District of Co lumbia, as Table 3 shows. Only one Sunbelt state is among the top 10 states in this listing— New Mexico. On the other hand, and not sur prisingly, the District of Columbia and the neighboring states of Maryland and Virginia rank in the top 10. New York and Connecticut, as well as the outliers, Hawaii and Alaska, also are in this group. None of the Sixth District states rank in the top 10 in per capita federal government expenditures. But Mississippi comes the closest, ranking 15th over fiscal years 1973 through 1976. The other five District states ranked in the lower half of states. Louisiana was lowest of the District states, finishing 45th. These state rankings of per capita federal out lays again confirm that Sixth District states, with the exception of Mississippi, are missing out on their share (based on population) of federal expenditures. The Midwestern states apparently received the smallest per capita federal government outlays. Just why do Sixth District states receive less than the national average in per capita federal expenditures? Certainly, we would not expect 'T h e extent of federal outlays or expenditures in a state, of course, does not necessarily coincide w ith the extent of federal government em ploym ent or federal government wage and salary income in a state. Federal outlays for salaries of government employees are only a fraction of total federal outlays (about 17 percent); a much larger portion of expenditures is not related at all to federal government employment (e.g ., government purchases, transfer payments, grants-in-aid to state and local governments, and interest on the p ublic debt). Therefore, looking at federal em ploym ent and income by states gives an incomplete picture of the impact of the federal government sector on a region or state. For exam ple, federal government em ploym ent per capita is higher than the national average in Alabama, Georgia and Tennessee. Per capita federal wage and salary income is above the national average in Alabama and Georgia. But none of these three states received the national average in per capita federal government expenditures, according to Table 2. A lso, M ississippi, w hich does receive above the national average in per capita federal expenditures, does not have (on a per capita basis) its share of federal employment or wage and salary incom e. It is apparent that the federal government expenditures data give us a much broader measure of the impact of the federal sector on regions and states than does federal employment or income inform ation. Furtherm ore, this more inclusive measure does not indicate the same impact of the federal sector on regions and states since much of federal government outlays is not connected w ith federal em ployment and salaries. TABLE 3 Ranking of Per Capita Federal Expenditures by State (Average Fiscal Years 1973-76) 1. 2. 3. 4. 5. 6. 7. 8. 9* 10. 11. 12. 13. 14. *15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. *27. *28. 29. *30. 31. *32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. *45. 46. 47. 48. 49. 50. 51. District of Columbia Alaska Hawaii New York New Mexico Maryland Washington Virginia Wyoming Connecticut North Dakota California Colorado Missouri Mississippi Utah Arizona New Jersey Montana Nevada South Dakota Massachusetts Oklahoma Kansas Rhode Island Idaho Alabama Florida New Hampshire Georgia Kentucky Tennessee Texas Vermont Maine South Carolina Oregon Pennsylvania Nebraska West Virginia Arkansas Delaware Illinois Minnesota Louisiana North Carolina Iowa Ohio Indiana Michigan Wisconsin $13,563 3,678 2,260 1,958 1,942 1,842 1,834 1,785 1,784 1,674 1,667 1,657 1,624 1,562 1,548 1,536 1,530 1,521 1,508 1,501 1,459 1,440 1,435 1,355 1,332 1,321 1,319 1,317 1,303 1,293 1,291 1,287 1,284 1,265 1,252 1,220 1,220 1,218 1,212 1,210 1,197 1,172 1,171 1,145 1,140 1,092 1,057 1,005 1,000 975 959 Source: Community Services Administration *Sixth District states them to rank with the District of Columbia and surrounding states. The states of Hawaii and Alaska also would be expected to have large per capita spending ratios because of the ex tensive federal and defense installations there. But it is surprising that five of the six District states are in the bottom half of states by the above measure. After all, the Southeast contains a larger-than-average number of military bases and is the center of the nation's aerospace TA B LE 4 Location Quotients of Per Capita Federal Outlays by Departments and Selected Agencies (Average Fiscal Years 1972-75) DEPARTMENTS Total Agri. Com merce Labor State Trans. Alabama .908 1.027 .646 .935 .946 1.118 .288 .745 .704 .015 .982 .404 Florida .906 .486 .439 .951 1.129 .720 .188 .958 .526 .112 .818 .369 Georgia .900 1.263 .338 1.119 .850 1.194 .308 1.071 .696 .024 1,268 .467 Louisiana .774 1.248 3.345 .724 .831 .642 .244 .875 .824 .009 .986 .477 Mississippi 1.062 2.150 1.307 1.466 1.061 .729 .528 .601 .789 .004 .704 .536 Tennessee .864 1.536 .293 .520 .841 .970 .214 .515 .678 .007 .760 .467 OEO & CSA EPA Gen’l Ser. NASA Post’l Ser.** RR Retire. Board .935 .313 .590 4.091 .677 .865 De fense HEW HUD In terior Jus tice Treas. AGEN CIES Internat’l Dev. Atom. Energy* Civil Ser. Alabama .553 .001 .787 Florida .274 .230 1.316 .551 .670 .236 2.214 .799 Georgia .351 .016 .727 1.185 .975 1.049 .072 .832 1.643 .005 .414 .981 .350 .345 .926 Mississippi .594 .002 .559 1.506 .328 .426 Tennessee .521 6.518 .479 .824 .681 .392 Louisiana TVA VA 5.452 1.124 1.140 .019 1.170 .833 2.049 1.008 .683 .736 .343 .958 .429 .641 .820 .365 1.061 .031 .848 1.041 15.656 1.079 ♦Average of 1972, 1973, and 1974 **Average of 1973, 1974, and 1975 Code: HEW— Health, Education, and Welfare HUD— Housing, Urban Development OEO— Office of Economic Opportunity CSA— Community Services Administration EPA— Environmental Protection Agency NASA— National Aeronautics and Space Administration TVA— Tennessee Valley Authority VA— Veterans Administration Source: Community Services Administration program. This may be the chief reason writers concerned with regional growth and the Sun belt economy continue to point out the im portance of the federal government in this surge. But, at least on the expenditure side, our findings suggest that this is a misconception. Federal Expenditures by Departments and Agencies. We can draw some general conclu sions about why five of the six Sixth District states receive less than the national average in per capita federal expenditures and why Missis sippi receives above the national average by examining individual federal department and agencies spending. Table 4 gives location quotients of per capita outlays (average of fiscal years 1972-75) for 11 major federal depart ments and for 11 of the 36 major federal agencies.6 The three federal departments spending far "M ore detailed inform ation and location quotients for each of the fiscal years 1972-75 are available from the author upon request. below the national average per capita levels in Sixth District states are the Departments of State, Interior, and Treasury, ranking last, seventh and second, respectively, in terms of their overall importance in expenditures of the 11 departments in the U. S. budget. Most of the State Department's functions take place in the Washington, D. C., area, so spend ing by this department in Sixth District states is generally a very small fraction (about one percent in each District state except Florida) of the national per capita average. Per capita spending by the Interior Department in Sixth District states ranges from about 20 to 50 per cent of the national average. Much of what this department spends goes for the open areas and national lands in the West. The second largest federal department, the U. S. Treasury, spends, on a per capita basis, approximately 35 to 55 percent of the national average in this District's states. The largest single expenditure of this department goes toward interest on the public debt. As may be expected, most of these monies go initially to financial centers, New York in particular. In fiscal 1975, approximate ly one-half of the $21.5 billion in interest pay ments of the federal debt was recorded as paid initially in New York State. Much of this amount probably was quickly dispersed from these financial centers. However, these federal outlays data measure only the initial location of the federal monies. As such, this may over state the impact of the federal treasury and fed eral government in general on New York State and understate it for other areas. However, re moving Treasury Department outlays from total federal expenditures only slightly im proves Sixth District states' rankings. But re moval of treasury expenditures does drop New York State from the fourth largest recipient of per capita federal government expenditures to the 25th position. The more people-oriented departments, Labor, Health, Education and Welfare, and Housing and Urban Development, also general ly spend less per capita in Sixth District states than they do nationally on average. Table 4 shows that the Labor Department, the sixth largest federal department in dollar outlays, spends on a per capita basis well below the na tional average in each District state. Expendi tures by the mammoth Health, Education and Welfare, the federal government's largest de partment, are below the national average (per capita) in four of the six District states. How ever, they are slightly above national average levels in Florida and Mississippi. Per capita spending by HUD (the eighth largest gov ernment department) is well below the na tional average in Florida, Louisiana and Missis sippi, slightly below in Tennessee but some what above the national average in Alabama and Georgia. Per capita spending by the Department of justice (10th largest), Transportation (fifth) and Commerce (ninth), shows considerable variation among Sixth District states, but in general, these states receive slightly less per capita from these departments. The Transpor tation Department's per capita expenditures are above the national average in only one Sixth District state, Georgia. This reflects work on the state's interstate highway system, as well as construction of a rapid transit system in At lanta. Four of the six District states receive far less than the national average in per capita out lays from the Commerce Department. How ever, as Table 4 shows, in Louisiana this de partment spends considerable sums of money on subsidies for ship construction and opera tion. In Mississippi, the Commerce Depart ment's Economic Development Administration (EDA) and National Oceanic and Atmospheric Administration maintain sizable programs. W hile we think of the Southeast as a center of government defense spending, four of the Sixth District states actually receive below the national average in per capita expenditures from the Defense Department, the second larg est federal department in terms of money spent. Louisiana and Tennessee are way below the national average in this regard. Only Geor gia and Mississippi among District states rank above the national average in per capita ex penditures from this department. Sixth District states are most favored by the Department of Agriculture (the fourth largest department). Only Florida receives less than the national average in per capita expenditures from it. Several federal subsidy programs relate specifically to crops grown in the Dis trict, such as cotton and peanuts. Per capita spending by the Agriculture Department is especially large in Mississippi (over twice the national average) and is a major reason why that state is the only Sixth District state where total per capita federal expenditures are above the national average. None of the 11 federal agencies shown in Table 4 (the larger agencies in terms of total outlays) appear to spend significantly more per capita in Sixth District states than they do nationally. Only the Veterans Administration, the largest of these agencies in terms of money spent, allocates slightly more per capita than the national average in most District states. The VA's spending is spread quite evenly across most states of the nation. Disbursements by other agencies vary considerably from one Dis trict state to another. Naturally, spending by the Tennessee Valley Authority is centered in Tennessee (about one-fourth of the authority's nearly $2-billion disbursement), but Alabama and Georgia also receive large shares of TVA money. Tennessee, the home of Oak Ridge Laboratories, is the only Sixth District state to receive a large share of money spent by the A PRIL 1977, M O N THLY R EV IEW Atomic Energy Commission. Spending by the National Aeronautics and Space Administration (NASA) is, on a per capita basis, well above the national average in only two District states, Alabama and Florida, and approximately matches the national average in Louisiana. These three states each have large aerospace complexes. Greater-than-national average per capita outlays in Florida by the Civil Service Commission, the third largest agency, and the Railroad Retirement Board, stem from the large number of retirees in that state. Per capita ex penditures by the Postal Service, the second largest federal agency in terms of expenditures, fall well below the national average in each Sixth District state. In general, we find that per capita spending by the various departments and agencies of the federal government varies considerably among Sixth District states. However, only Mississippi captures enough federal dollars from the Departments of Agriculture, Commerce, and Defense to obtain total per capita federal spending above the national average. Growth in Federal Expenditures Among the States. Another measure of the importance of federal expenditures in states is the growth of these outlays. In other words, even if spending is below national levels in Sixth District states, the growth of these amounts may have helped spark the region's rapid economic advance. Unfortunately, there are little consistent past data to examine the long-term growth in federal outlays. Table 5 shows percent changes in some data (roughly adjusted for definitional and conceptual differences) on both a total and per capita basis, covering fiscal years 1968 to 1975. It is clear, based on these statistics, that the growth in federal expenditures was not consistently above the national average growth in the Sixth District states. Only in Florida and Mississippi did total federal outlays outpace the national average percentage gains. (On a per capita basis, growth in federal outlays was above the national average in Alabama, Florida and Mississippi). The growth in federal outlays (either total or per capita) was lowest in Geor gia among the Sixth District states. In fact, in fiscal year 1968, per capita federal spending was 14 percent above the national average in Georgia, but by fiscal year 1973 it had shrunk to slightly over six below the national average because of its much slower growth in the state. Summary and Conclusion. The basic \ T A B LE 5 Percent Change in Federal Government Outlays (Fiscal Years 1968-1975) Total (percent change) Per Capita (percent change) Alabama 83.1% 92.7% Florida 143.5 84.7 Georgia 84.6 65.6 Louisiana 77.1 68.8 Mississippi 130.7 116.7 Tennessee 94.0 78.5 U. S. 94.4 79.6 Source: Unpublished data provided by Lillian Rymaronicz of the Library of Congress, Congressional Re search Service V______________________ J conclusion of this study is at odds with much of today's popular conception of the Sunbelt's economy. W hile on a net basis, five of the six District states do receive more from the federal treasury than they pay in, this is simply the result of lower per capita incomes in the District and, therefore, lower-than-national per capita tax payments. On the discretionary-spending side, we find that five of the six Sixth District states receive less than their share of federal spending (based on popula tion). We find that only the U. S. Department of Agriculture consistently spends more on a per capita basis in the District than it does nation ally. When we examined the growth in federal expenditures, once again we could find no clear-cut proof that the rise in federal expendi tures has been centered at all in Sixth District states. The picture we draw from this analysis runs counter to current explanations of the Sunbelt's economy. At least for the Sixth Federal Reserve District, there is no "Second War Between the States" over the U. S. Treasury's sources of funds.7 It would be incorrect to conclude that political power has drawn into this District dis proportionately large sums of federal monies. Rather, the economic boom of the Sunbelt, par ticularly the Sixth Federal Reserve District, is a result of natural forces at work there— the abundance of resources and the growth of regional markets. ■ 7"T h e Second W ar Between the States," Business W eek, May 17, 1976, pp. 92-95. SOUTHEASTERN BANKING DURING THE RECOVERY by John M . G odfrey During the last two years, Southeastern banks experienced one of their worst years on record— 1975— followed by a moderate but solid recovery in 1976. In 1975, District mem ber banks suffered record loan losses, strained liquidity positions, a drop in overall lending and a reduction in earnings of almost 40 percent. The banking environment improved greatly in 1976, as loan demand picked up and deposits flowed in from more traditional and stable sources, liquidity positions improved markedly and loan losses were reduced. Earnings at most banks appear now to have rebounded. Compared to the more halcyon years of 1972 and 1973 when loans were advancing nearly 25 percent a year, 1976 seems bland. However, after the extremely dismal year of 1975, last year was quite an improvement. The extent of this recovery in banking and the prospects for 1977 are the subject of this article. Stronger Deposit Gains. During 1976, total member bank deposits increased slightly more than $2.5 billion, up nearly seven percent. This growth contrasts with only a 4.7-percent rise the previous year. Deposit gains were strongest in Alabama and the District portion of Mississippi, where re covery has generally been the strongest. And through early 1977, deposit inflows have continued. Demand deposits, net of interbank deposits, advanced more in 1976, rising nearly six per cent, almost twice the 1975 rate. Renewed demand deposit inflows have enabled banks to reduce their dependency upon expensive borrowed funds. Time and savings deposit gains also strengthened in the past year, as consumers and businesses added to such deposits. Pass book savings deposits rose nearly $2 billion, a 25-percent advance, which has resulted in a nearly 50-percent increase in the last two years. Several special situations, however, accounted for last year's exceptionally strong growth. In late 1975, profit-making businesses were allowed to hold savings accounts at banks; this probably accounted for about $300 mil lion of the increase. Also, in June and July, many Mississippi banks had savings funds flow to their institutions as a result of publicity as sociated with problems at a large state savings and loan association. Both factors were Figure 2 DEPOSIT GAINS I-------1 1975 — TIME DEPOSIT CHANGES BIL. $ - 2.0 - 0.5 1976 Note: Year ago figures for Sixth District member banks. transitory and are not likely to occur again this year, although savings deposit gains con tinue to be strong. Time deposits other than the money market CDs advanced moderately again during 1976. During the last two years, however, there has been a decided shift in the composition of these "other" time deposits. These time de posits maturing in under four years have declined, while those maturing in over four years have nearly doubled. Longer maturing deposits generally return in excess of seven percent and, therefore, have put pressure on banks to add earning assets. The larger banks, however, let nearly $900 million in large-denomination CDs run off as a result of a generally weak loan demand and strong deposit gains from other sources. Since late 1974, these banks have reduced the volume of CDs outstanding by about one-third and have thereby vastly improved their strained liquidity positions. Deposit inflows from more traditional and stable sources have enabled banks to reduce greatly their use of borrowed funds during the last two years. Bank Lending Recovery. After having posted a small decline in outstanding loans in 1975, District bank loans advanced about $1.5 billion in 1976. W hile last year's five-percent loan advance was modest compared to the nearly 25-percent jump recorded in both 1972 and 1973, it does mark a decided recovery in bank lending from the overall decline of the previous year. Loans had begun rising at small- and medium-sized banks in the spring of 1975, but sustained lending did not develop at larger banks until mid-1976. Most of the strength in bank lending last year centered around consumer, real estate and business loans. Large District and national firms have probably continued to pay down their bank lines. Since late last summer, business firms have stepped up their borrowing at the District's LOANS REBOUND BIL. $ largest banks. This trend has continued through early 1977. Business loans rose nearly $120 mil lion in 1976, compared to a net reduction of nearly $300 million in the previous year. Most of the increase has centered around loans to wholesale and retail trade firms and textile and apparel goods manufacturers. Loans to mining firms and other extractive industries continued to rise, as did loans to foreign business firms. Firms in the service industries which had repaid large amounts of loans in 1975 increased their borrowing slightly in 1976. Loans to construction firms, transportation, communica tion and other public utilities, and durable goods manufacturers continued to decline through 1976. Securities Portfolios Add Income and Liquid ity. With weak loan demand and strong inter est-bearing deposit gains, District banks have purchased considerable amounts of U.S. Trea sury securities in order to generate taxable in come and rebuild liquidity. During the last two SECURITIES years, District banks have more than doubled their holdings of government securities. In 1975, they added $1.8 billion and in 1976, $1.4 bil lion. In 1975, nearly 60 percent of their increase came in short-maturities issues— Treasury bills and notes maturing in less than a year. These holdings vastly improved the liquidity position of the banks. Last year, however, they stepped up their purchases of longer-dated notes and bonds in an attempt to increase earnings, since rates on short-maturity issues were low. As loan demand strengthens, they will be able to reduce these Treasury holdings and obtain the funds to lend to their traditional customers: business firms, consumers and real estate mortgage customers. ' Table 1 BUSINESS LOANS RECOVER 32 LARGE SIXTH DISTRICT BANKS Million $ Cumm. 1975 (1/75-12/75) Durable Goods Manufacturing Nondurable Goods Manufacturing Mining Wholesale and Retail Trade Transportation, Communication and Other Public Utilities Construction Firms Service F: -ms Foreign Businesses Cumm. 1976 (1/76-12/76) — 17 —50 — 6 + 29 +55 +30 — 96 +82 — 58 —113 —127 + 25 —53 —53 +10 +42 Up until 1975, District banks had been sub stantial purchasers of "other" (mostly munic ipal) securities, which had provided them with considerable tax-exempt income. However, with sharply higher provisions for loan losses developing in 1975 and early 1976, the banks had less use for nontaxable income and, there fore, cut back or even reduced their municipal holdings. This was especially true in Georgia and Florida. Since mid-1976, the loan loss situation has improved for many banks so that they have again begun building up their municipal holdings to once again take maxi mum advantage of tax-exempt earnings. Prospects. As bank deposit inflows con tinue to be strong and with bank liquidity posi tions vastly improved, District banks are in a good position to meet increased loan demand. They have curtailed their use of expensive and interest-sensitive borrowed funds and have ac quired sizable securities portfolios that can be reduced when they are able to add new loans. Since most banks appear to have made ade quate provisions for most identified problem loans, earnings should rise as the expense of providing for loan losses declines. And since making loans is usually more profitable than holding securities, a higher loan demand will boost earnings even if lending margins come under pressure because of increasing costs of funds during the year. The improvement in District banking that began during 1975 should continue in 1977 with more and more banks sharing its benefits. ■ SIXTH DISTRICT STATISTICS Seasonally Adjusted (All data are indexes, unless indicated otherwise.) L a te s t M onth O ne M onth Ago Tw o M o n th s Ago One Year Ago S IX T H D IS T R IC T L a te s t M o nth U n e m p lo y m e n t R a te (P e rc e n t of W ork F o rc e )* * * . . . . Ja n . A ve rag e W e e k ly H o u rs in M fg. (H rs .) . Ja n . IN C O M E A N D S P E N D IN G M a n u fa c tu rin g I n c o m e - ............................... Ja n . F a rm C a sh R e c e i p t s ............................................ Nov. C r o p s ........................................................................... Nov. L iv e s to c k ...............................................................Nov. In s t a lm e n t C re d it a t B a n k s 1 (M il. $) . N ew L o a n s ...............................................................D ec. R e p a y m e n ts .........................................................Dec. R e ta il S a l e s .........................................................D ec. 147.3 229 .7 2 63 .7 2 06 .6 146 .4 2 2 9 .6 2 1 9 .4 198 .0 144.5 190.7 172 .8 2 18 .5 212.6 915 804 157 .5 875 767 155 .0 840 753 149 .2 855 788 137.1 135 .5 186 .9 124.4 One M o n th Ago Tw o M o n th s Ago O ne Year Ago 6.3 3 9.7 6 .4 4 0 .3 317 256 349 318 252 376 309 251 359 278 231 302 157 .2 243 .1 152 .0 3 1 8 .2 149.8 2 6 3 .6 1 37 .0 2 2 8 .5 111 .0 101.8 112 .5 6 3.9 7 4.7 110 .3 100 .2 1 11 .9 6 2 .8 7 3.3 109.7 9 9 .8 1 11 .3 6 2 .9 7 6 .6 110 .5 9 7 .2 112 .7 7 0.5 8 5 .8 7 .6 4 2 .0 7 .9 4 0 .9 9 .4 4 0.7 1 0.6 4 1 .4 308 270 3 96 302 2 69 417 306 268 385 285 247 321 1 35 .4 2 8 8 .9 134 .6 3 1 0 .2 1 3 5 .8 2 08 .1 1 3 0 .0 2 8 8 .7 104 .7 9 8 .2 107 .2 7 5 .5 5 8.4 103 .4 9 6 .5 106.1 74.1 5 6 .4 1 03 .3 9 6.0 106.1 7 4.2 5 1 .4 103 .2 9 6 .2 105 .9 77.1 6 5 .2 7.0 3 9 .7 7 .2 4 0.3 6 .3 4 0.5 8 .8 4 1.1 264 207 431 259 204 430 257 211 4 46 2 48 189 380 NA 189.2 NA 188 .2 1 58 .2 163 .5 1 49 .5 2 1 7 .6 1 0 7 .4 103 .0 108.3 112.1 6 2 .5 106 .3 101 .6 107 .2 105.1 5 7.3 106 .2 100 .9 107 .2 104 .4 5 2 .2 1 07 .2 1 01 .6 108 .3 112 .5 5 6 .6 7.2 NA 6 .7 NA 8 .2 4 1.1 6 .6 4 1 .9 260 228 291 2 68 233 307 255 229 294 244 2 14 263 157.1 192.9 154.1 161.1 142 .9 138 .3 1 39 .6 7 3 .3 109 .2 101.1 113.1 1 10 .0 4 2.1 1 07 .8 100 .0 111 .6 1 0 6 .4 4 4 .3 107.1 9 9 .3 1 10 .9 102 .2 4 6 .3 1 07 .3 100 .1 1 10 .8 106.1 5 1 .8 7 .0 4 0 .8 F IN A N C E A N D B A N K IN G M em b er B a n k L o a n s ............................................ Ja n . M em b er B a n k D e p o s i t s ......................................Ja n . B a n k D e b i t s * * .........................................................J a n . F L O R ID A IN C O M E E M P L O Y M E N T AN D P R O D U C T IO N N o n fa rm E m p l o y m e n t ................................ ............................................ M a n u fa c tu rin g N o n d u ra b le G o o d s ...................................... F o o d ............................................................... T e x t ile s .................................................. A p p a re l ......................................................... Paper ......................................................... P r in tin g a n d P u b lis h in g . . C h e m i c a l s ............................................ D u ra b le G o o d s ...................................... L b r ., W oods P ro d s ., F u rn . & F ix . S to n e , C la y , a n d G la s s . . . P rim a ry M e t a l s ................................ F a b ric a te d M e t a l s ......................... M a c h i n e r y ............................................ T ra n s p o rta tio n E q u ip m e n t N o n m a n u f a c t u r in g ...................................... C o n s tru c tio n ...................................... T ra n s p o rta tio n ................................ T r a d e ........................................................ F in ., in s ., an d re a l e s t. . . S e r v i c e s .................................................. F e d e ra l G o v e rn m e n t . . . . S ta te an d L o c a l G o v e rn m e n t F a rm E m p l o y m e n t ............................................ U n e m p lo y m e n t R a te (P e rc e n t of W o rk F o rc e ) . . . . In su re d U n e m p lo y m e n t (P e rc e n t of C ov. E m p . ) ......................... A ve rag e W e e k ly H o u rs in M fg. (H rs .) C o n s tru c tio n C o n t r a c t s * ......................... R e s i d e n t i a l ......................................................... A ll O t h e r ............................................................... C otto n C o n s u m p t i o n * * ............................... P e tro le u m P r o d u c tio n * / * * . . . . M a n u fa c tu rin g P ro d u c tio n . . . . N o n d u ra b le G o o d s ...................................... Food ......................................................... T e x tile s .................................................. A p p a re l .................................................. Paper ......................................................... P r in tin g a n d P u b lis h in g . . C h e m i c a l s ............................................ D u ra b le G o o d s ............................................ Lu m b e r and W o o d ......................... F u rn itu r e an d F ix t u r e s . . . . S to n e , C la y , a n d G la s s . . P r im a ry M e t a l s ............................... F a b ric a te d M e t a l s ......................... N o n e le c tric a l M a c h in e ry . . E le c tr ic a l M a c h in e ry . . . T ra n s p o rta tio n E q u ip m e n t Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Ja n . Dec. 110.1 100.1 9 9.9 100 .4 9 7.2 9 7.4 9 8.7 108 .8 105.5 100.3 9 1.8 95.1 101.0 9 9.7 111.7 98.7 113.3 90.1 106 .9 1 10 .4 115 .4 122 .9 104 .9 106.5 6 0.9 109.2 9 9.5 100 .0 9 8.8 9 6 .9 9 6.5 9 8 .4 108.1 105 .9 9 8 .9 9 0.8 9 4.5 100.5 9 8.1 110.8 9 6.3 112.2 8 7.9 107 .0 108 .9 114.9 122.2 107.3 106.5 5 7.8 107.1 9 7.8 9 8.3 9 7.5 9 5.7 94.1 9 9.3 106.6 102.3 9 7 .0 8 9.0 9 0.5 9 7.7 103.3 108 .9 9 5.7 110 .0 8 1 .9 105 .2 107.8 1 14 .4 1 18.0 1 07 .4 119.1 55.8 107 .4 9 7 .9 9 9 .8 9 8.6 9 6.8 9 8.3 9 7.5 105.1 103.6 95.5 89.3 9 1.8 93.1 9 6.2 105 .9 9 4 .0 110.5 88.7 104.1 108.3 1 14.0 117 .8 106 .8 117 .8 5 0 .8r Ja n . 6.8 7 .0 7 .6 8.3 Ja n . Ja n . Ja n . Ja n . Ja n . Dec. Feb. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. 3 .8 4 0.3 208 220 196 7 0.9 8 3.6 149 .9 149.1 133.0 148 .4 1 22 .9 147.6 129.0 163.2 151.9 169.2 133.1 139.1 105.3 107.9 167.5 2 5 6 .8 1 47 .9 3 .9 4 0.5 203 194 212 65.9 8 3.6 149.5 148.1 132.0 145.1 1 21.3 1 48 .6 126.8 1 64 .0 152.3 1 68 .0 132.6 1 38.5 1 06 .0 107 .2 166.1 2 6 2 .4 148 .4 4.1 4 0.6 174 205 144 7 3.1 8 5.3 149.1 1 47 .9 130.3 143.8 121.1 1 48.2 1 29.3 165.1 1 51.4 1 66 .4 1 34.5 1 34 .9 104 .8 107 .4 166.1 2 62 .6 147.3 4 .2 4 0.2 163 137 189 7 5.6 8 7.3 1 47 .4 1 49.9 1 34.0 146.8 134 .4 144.6 132.1 160 .6 143.4 145.7 138.8 141.3 102.9 113 .4 150.5 2 27 .3 139 .8 a n k s ......................................Ja n . ........................................................ Ja n . 287 228 287 226 284 224 268 224 a n k s ......................................Ja n . ........................................................ Ja n . ..................................................Ja n . 242 203 372 243 202 385 243 204 370 225 191 315 F IN A N C E A N D B A N K IN G Lo a n s* A ll M e m b er B La rg e B a n k s D e p o sits* A ll M em b er B L a rg e B a n k s B a n k D e b its * / * * M a n u fa c tu rin g I n c o m e - ................................J a n . F a rm C a sh R e c e i p t s ............................................Nov. EM PLO YM EN T N o n fa rm E m p l o y m e n t ......................................J a n . M a n u fa c tu rin g .................................................. Ja n . N o n m a n u f a c t u r in g ............................................ J a n . C o n s t r u c t i o n .................................................. J a n . F a rm E m p l o y m e n t .................................................. Dec. U n e m p lo y m e n t R a te (P e rc e n t of W ork F o rc e )* * * . . . . Ja n . A ve rag e W e e k ly H o u rs in M fg. (H r s .) . Ja n . F IN A N C E A N D B A N K IN G M em b er B a n k L o a n s ............................................ Ja n . M em b er B a n k D e p o s i t s ................................Ja n . B a n k D e b i t s * * .........................................................J a n . G E O R G IA IN C O M E M a n u fa c tu rin g I n c o m e - ................................Ja n . F a rm C a sh R e c e i p t s ............................................ Nov. EM P LO YM EN T N o n fa rm E m p l o y m e n t ......................................J a n . M a n u fa c tu rin g .................................................. j a n . N o n m a n u f a c t u r i n g ...........................................j a n . C o n s t r u c t i o n .................................................. j a n. F a rm E m p lo y m e n t ............................................D ec. U n e m p lo y m e n t R a te (P e rc e n t o f W ork F o r c e ) ......................... Ja n . A ve rag e W e e k ly H o u rs in M fg. (H rs .) . Ja n . F IN A N C E A N D B A N K IN G M em b er B a n k L o a n s ............................................Ja n . M em b er B a n k D e p o s i t s ................................J a n . B a n k D e b i t s * * .........................................................J a n . LO U IS IA N A IN C O M E M a n u fa c tu rin g I n c o m e - ................................J a n . F a rm C a sh R e c e i p t s ............................................Nov. EM P LO YM EN T N o n fa rm E m p l o y m e n t ......................................J a n . M a n u fa c tu rin g .................................................. Ja n . N o n m a n u f a c t u r i n g ...........................................Ja n . C o n s t r u c t i o n .................................................. Ja n . F a rm E m p lo y m e n t ............................................ D ec. U n e m p lo y m e n t R a te (P e rc e n t o f W o rk F o rc e )* * * . . . . J a n . A verag e W e e k ly H o u rs in M fg. (H rs .) . Ja n . F IN A N C E AN D B A N K IN G M em b er B a n k L o a n s * ......................................J a n . M em b er B a n k D e p o s i t s * ................................J a n . B a n k D e b its * / * * ...................................................J a n . A LA B A M A M IS S IS S IP P I IN C O M E IN C O M E M a n u fa c tu rin g I n c o m e - ............................... Ja n . F a rm C a sh R e c e i p t s ............................................Nov. 148.1 2 6 9 .9 148.3 216 .1 148.8 207 .1 137.6 162.9 111 .9 101.2 116.6 121 .9 5 8.4 111 .2 100.8 115 .8 121.0 5 5.8 110 .9 100.2 115.6 121.7 53.5 109.7 100.0 114.1 123.1 6 3 .6 EM P LO YM EN T N o n fa rm E m p lo y m e n t . . . M a n u fa c tu rin g ......................... N o n m a n u fa c tu rin g . . . C o n s t r u c t i o n ......................... M a n u fa c tu rin g In c o m e 2 ................................Ja n . F a rm C a sh R e c e i p t s ............................................ Nov. EM P LO YM EN T . . . . . Ja n . Ja n . Ja n . Ja n . Dec. N o n fa rm E m p l o y m e n t ......................................J a n . M a n u fa c tu rin g .................................................. J a n . N o n m a n u f a c t u r i n g ...........................................J a n . C o n s t r u c t i o n ...................................................J a n . F a rm E m p lo y m e n t ............................................ D ec. O ne M onth Ago L a t e s t M onth U n e m p lo y m e n t R a te (P e rc e n t o f W o rk F o rc e )* * * . . . A verag e W eek ly H o u rs in M fg. (H rs .) Tw o M o nth s Ago One Year Ago O ne M o nth Ago Tw o M o nth s Ago 1 06.0 9 4.0 112.1 8 3 .2 6 1 .4 105 .4 9 5.8 110.3 8 4.8 58.9 104 .8 9 4.7 1 09 .9 8 2.9 5 9 .8 105 .7 9 6.3 110.6 9 6 .6 6 2.9 5.7 4 0.3 5 .7 6 .9 4 0 .6 4 1 .2 267 220 3 48 280 235 324 281 2 34 321 279 228 274 L a t e s t M onth O ne Year Ago EM P LO YM EN T Ja n . Ja n . 6.2 4 0 .0 N o n fa rm E m p l o y m e n t ......................................J a n . M a n u fa c tu rin g .................................................. J a n . N o n m a n u f a c t u r i n g ...........................................J a n . C o n s t r u c t i o n ...................................................J a n . F a rm E m p lo y m e n t ............................................ D ec. U n e m p lo y m e n t R a te (P e rc e n t of W ork F o r c e ) ......................... J a n . A ve rag e W eek ly H o u rs in M fg. (H rs .) . J a n . F IN A N C E AN D B A N K IN G M em b er B a n k L o a n s * ................................ M em b er B a n k D e p o s i t s * ............................... B a n k D e b its * / * * ............................................ ..... 305 256 324 296 250 315 290 251 306 264 229 296 6.6 TEN N ESSEE F IN A N C E A N D B A N K IN G IN C O M E M a n u fa c tu rin g In co m e* F a rm C a sh R e c e ip ts . Ja n . Nov. 141.5 2 43 .5 143.5 1 68 .8 * F o r S ix th D is t ric t are a o n ly ; o th e r to ta ls fo r e n tire s ix sta te s •♦‘ S e a s o n a lly a d ju ste d d a ta su p p lie d by sta te a g e n c ie s . Note: M em b er B a n k L o a n s * ...................................... Ja n . M em b er B a n k D e p o s i t s * ................................J a n . B a n k D e b its * / * * ...................................................J a n . 130.1 153.2 * * D a ily a ve ra g e b a sis f P r e lim in a r y data ■-Revised N .A. Not a v a ila b le All indexes: 1967 = 100, except mfg. income, employment, and retail sales, 1972 = 100. S o u rc e s : M a n u fa c tu rin g p ro d u ctio n e stim a te d by th is B a n k ; n o n fa rm . m fg. an d non m fg. e m p .. m fg. in co m e an d h o u rs, and u n e m p .. U .S . Dept, o f La b o r and c o o p e ra tin g sta te a g e n c ie s ; cotto n c o n su m p tio n . U .S . B u re a u of C e n s u s ; c o n stru c tio n c o n tra c ts . F . W. Dodge D iv.. M cG ra w -H ill In fo rm a tio n S y s te m s C o .; pet. p ro d ., U .S . B u re a u of M in e s; fa rm c a s h re c e ip ts an d fa rm e m p ., U .S .D .A . O tn er in d e x e s b ased o n ‘ d a ta c o lle c te d by th is B a n k . A ll in d e x e s c a lc u la t e d by t h is B a n k . ‘ Data h a ve been b e n ch m arke d an d new tra d in g d a y fa c to rs an d se a so n a l fa c to rs c o m p u te d u sin g D ec e m b e r 3 1 , 1974 a n d Ju n e 3 0, 1975 R e p o rt of C o n d itio n d a ta a s b a se s. ♦ P a rtia lly e stim a te d M a n u f a c t u r in g In co m e d a ta h a s been re b e n c h m a rk e d to th e m ost re c e n t U .S . D ept, of C o m m e rce m a n u fa c tu rin g in co m e se r ie s . T h is is th e la s t tim e th is fe a tu re w ill a p p e a r in th e M O N T H L Y R E V IE W . S e e ca rd in s e rt in t h is is s u e fo r d e t a ils . DEBITS TO DEMAND DEPOSIT ACCOUNTS Insured Commercial Banks in the Sixth District (In Thousands of Dollars) Ja n u a ry 1977 Ja n u a ry 1976 P e rc e n t C h a n g e P e rc e n t C h a n g e J a n u a ry 1977 Fro m D ec. Ja n . 1976 1976 J a n u a ry 1977 F ro m Ja n . D ec. 197 6 1976 S T A N D A R D M E T R O P O L IT A N S T A T IS T IC A L A R E A S 2 i r m i n g h a m ......................... G a d sd e n .............................. H u n t s v i l l e ......................... M o b i l e .................................... M o ntg o m ery . . . . T u s c a l o o s a ........................ B a rto w -La k e la n d W in te r H a ve n . . . D ayto n a B e a c h . . . F t. L a u d e rd a le H o llyw o od . . . . F t. M y e r s ......................... G a i n e s v i l l e ........................ J a c k s o n v ille . . . . M elb ou rne T itu s v ille - C o c o a M i a m i .................................... O r l a n d o .............................. P e n s a c o l a ........................ S a r a s o t a .............................. T a lla h a s s e e . . . . T a m p a - S t. P e te . . W . P a lm B e a c h . . . A lb a n y ................................ A tla n ta ............................... A u g u s t a .............................. C o l u m b u s ......................... M acon .................................... Savannah ......................... . . 6 ,1 2 1 ,1 9 3 125 ,9 93 4 9 6 ,4 8 0 1 ,5 3 4 ,5 1 2 1,2 38 ,3 61 3 1 1 ,1 3 3 6 ,8 8 5 ,5 5 8 1 38 ,7 07 5 5 0 ,7 9 8 l,7 1 7 ,0 8 0 r 1 ,3 7 0 ,1 0 7 3 4 7 ,2 8 6 5 ,4 0 0 ,8 3 8 1 1 8 ,5 60 4 6 4 ,0 3 6 1 ,4 96 ,5 84 1 ,0 23 ,0 06 3 0 6 ,5 01 -11 - 9 -1 0 -11 -1 0 -1 0 + 13 + 6 + 7 + 3 + 21 + 2 1 ,0 88 ,5 31 5 2 6 ,9 0 7 1,1 38 ,4 51 5 7 2 ,8 9 6 1 ,0 34 ,0 53 5 1 5 ,0 1 3 - 4 8 + 5 + 2 3 ,2 0 1 ,8 4 5 5 8 0 ,8 68 3 3 4 ,1 1 0 8 ,0 0 6 ,3 0 5 3 ,4 6 4 ,5 8 6 515 ,2 21 3 5 2 ,8 5 3 7 ,5 3 9 ,4 1 6 2 .9 3 5 ,7 4 2 4 8 8 ,8 9 4 2 9 1 ,7 2 4 5 ,1 7 9 ,7 4 8 + + 8 13 5 6 + 9 + 19 + 15 +55 4 8 4 ,0 4 2 1 1 ,0 6 4 ,0 8 3 2 ,2 3 2 ,4 2 7 7 2 8 ,6 7 3 6 4 3 ,0 8 6 9 4 6 ,0 25 4 ,8 6 3 ,9 8 2 1 ,6 9 5 ,9 5 9 5 3 6 ,1 6 0 1 3 ,1 0 8 ,4 5 2 2 ,4 0 4 ,5 7 7 84 7 ,3 8 7 6 3 6 ,2 6 7 9 2 0 ,8 6 2 5 ,7 8 3 ,9 7 2 r 1 ,6 4 2 ,7 8 0 4 5 4 ,1 4 7 8 ,6 9 2 ,1 2 8 1 ,9 47 ,9 11 7 8 7 ,3 06 5 17 ,6 25 8 4 5 ,3 73 5 ,0 3 4 ,9 2 5 1 ,3 75 ,4 50 -1 0 -1 6 - 7 -1 4 + 1 + 3 -1 6 + 3 + 7 + 27 + 15 - 7 + 24 + 12 - 3 + 23 2 5 8 ,6 3 8 2 4 ,5 0 8 ,3 1 7 9 1 4 ,3 7 3 5 6 3 ,6 5 2 8 7 2 ,0 3 3 1 ,3 1 3 ,4 9 4 2 5 9 ,3 5 8 2 1 5 ,6 40 2 7 ,0 6 3 ,162 r 2 2 ,1 8 8 ,0 0 5 9 7 0 ,7 1 4 6 0 0 ,9 24 6 4 8 ,9 1 7 5 34,407 9 6 9 ,6 4 2 8 9 1 ,7 20 1 ,5 2 6 ,5 9 0 1 ,2 35 ,5 32 - 0 - 9 - 6 -1 3 -1 0 -1 4 + 20 + 10 + 52 + 5 - 2 + 6 - A l e x a n d r i a ........................ B a to n R o u ge . . . . L a fa y e tte ......................... L a k e C h a r le s . . . . N ew O rle a n s . . . . 3 9 3 ,1 5 9 2 ,4 1 6 ,7 0 6 5 5 9 ,6 2 4 4 7 0 ,6 4 5 6 ,2 6 5 ,6 2 4 4 0 2 ,0 1 2 2 ,4 6 0 ,7 0 4 5 5 6 ,9 6 7 4 6 2 ,7 4 5 6 ,9 0 8 ,7 3 5 3 47 ,4 33 2 ,0 6 3 ,1 5 3 4 7 5 ,1 33 3 5 7 ,5 02 6 ,1 99 ,0 11 2 2 + 0 + 2 - 9 + 13 + 17 + 18 +32 + 1 B ilo x i- G u lfp o rt . . . Ja c k s o n .............................. 4 0 2 ,9 7 2 2 ,2 2 1 ,7 7 8 4 2 3 ,0 2 8 2 ,4 0 9 ,103r 3 0 4 ,6 0 4 2 ,1 1 2 ,9 7 2 - 5 8 + 32 + 5 C h atta n o o g a . . . . K n o x v ille ......................... N a s h v ille ......................... 1 ,5 5 3 ,7 7 8 1 ,7 9 2 ,8 2 6 5 ,9 3 7 ,8 0 0 1 ,5 74 ,7 71 1 ,9 9 6 ,0 8 0 6 ,3 0 8 ,4 8 6 1 ,2 39 ,6 01 1 ,5 49 ,6 41 4 ,7 7 4 ,0 1 1 - 1 -10 - 6 + 25 + 16 + 24 1 5 1 ,7 64 1 8 1 ,6 8 4 137,266 -1 6 + 11 TH ER C EN TER S A n n isto n ......................... ‘ D is t r ic t po rtio n o n ly . 2C o n fo rm s to S M S A d e fin itio n s a s o f D e c e m b e r 3 1, 1972. J a n u a ry 1977 D ecem ber 1 97 6 2 9 8 ,9 7 9 1 1 8 ,4 7 2 2 2 3 ,9 2 5 9 8,75 1 - 8 -1 5 + 23 + 2 2 4 6 ,1 5 0 1 0 2 ,4 60 2 3 0 ,7 5 8 4 3 ,4 2 6 1 ,1 7 8 ,8 7 7 2 ,6 4 0 ,9 8 7 -1 0 -1 1 - 8 -1 3 - 3 -1 7 + + - 1 9 8 ,7 77 1 49 ,9 64 1 9 3 ,1 4 8 3 1 ,7 1 9 2 0 4 ,7 1 6 8 3 ,8 8 0 4 6 ,8 2 1 5 1 ,4 1 0 2 7 5 ,8 6 1 120 ,8 43 -1 4 - 4 -20 -1 2 - 3 - 6 - 2' -2 4 -1 6 - 3 - 5 -1 2 + 8 + 8 + 8 + 12 + 11 + 1 -3 8 + 18 2 7 ,8 3 6 2 2 ,4 0 7 r 1 03 ,5 02 112 ,8 36 3 4,55 5 7 2 ,2 5 8 2 2 ,9 1 5 18,09 3 9 3 ,8 1 6 1 0 2 ,6 1 9 2 6 ,3 6 6 7 5 ,2 1 7 -2 0 +23 - 8 - 3 + 7 + 2 - 3 + 53 + 2 + 6 + 41 - 2 + + + + D o than . . . S e lm a . . . . . . . . . . 2 7 5 ,2 5 6 1 0 0 ,4 25 B ra d e n to n . . M onroe C o u n ty O ca la . . . . S t. A u g u stin e S t. P e te rs b u rg Tam pa . . . . . . . . . . . . . . . . . . . . . . 2 5 1 ,6 0 3 1 03 ,0 29 2 2 6 ,8 71 5 0 ,3 2 8 1 ,3 4 9 ,8 1 8 2 ,4 3 0 ,2 2 6 A th e n s . . . B ru n s w ic k . . D alto n . . . . E lb e rto n . . . G a in e s v ille . . G riffin . . . . L a G ra n g e . . N ew n a n . . . R o m e ........................ V a ld o sta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8 8 ,6 38 132 ,2 93 2 0 7 ,9 5 6 3 4 ,3 9 0 2 2 0 ,1 0 6 9 3 ,6 7 7 5 1 ,9 0 9 5 1 ,6 8 3 1 7 1 ,3 26 1 4 3 ,1 85 2 1 9 ,5 4 3 138 ,4 77 2 5 9 ,7 7 5 3 9 ,0 8 2 2 2 5 ,8 5 3 9 9 ,6 1 0 5 2 ,8 1 6 6 7 ,7 0 4 2 0 2 ,9 4 6 1 4 7 ,3 3 8 A b b e v ille . B u n k ie . . H am m ond . . N ew Ib e ria P la q u e m in e T h ib o d a u x . . . . . . . . . . . . . . . . . . . 2 2 ,3 3 2 2 7 ,6 5 0 9 5 ,6 3 3 1 0 9 ,2 36 3 7 ,0 5 7 7 3 ,4 4 4 . . . . . . . . . . Ja n u a ry 1976 28 0 ,9 5 3 115 ,1 86 2 4 7 ,5 4 5 5 7 ,7 6 2 l,3 9 4 ,0 9 8 r 2 ,9 1 3 ,8 9 8 H a ttie sb u rg . . L a u r e l ........................ M e rid ia n . . . . N a tch e z . . . . P a sca g o u la M o ss P o in t . . V ic k s b u rg . . . Y a zo o C ity . . . . . . . . . . . . . . . 1 8 4 ,7 1 0 9 1 ,0 8 4 144 ,3 63 7 7 ,1 4 7 1 80,731 9 6 ,4 5 8 1 5 7 ,1 43 7 0 ,5 7 3 1 7 6 ,7 77 8 8 ,9 0 9 141 ,9 09 7 1 ,1 7 4 + + . . . . . . . . . 1 4 8 ,7 67 103 ,8 25 6 7 ,7 2 7 1 7 4 ,4 65 1 0 3 ,9 85 6 3 ,2 2 3 159 ,0 22 1 0 6 ,1 0 9 6 4 ,6 0 7 -1 5 - 0 + 7 - 6 - 2 + 5 B ris to l . . . . Jo h n so n C ity . . K in g sp o rt . . . . . . . . . . . . 2 8 3 ,4 1 9 1 6 3 ,6 4 6 3 9 7 ,2 11 3 0 5 ,2 4 0 1 7 6 ,1 54 4 75 ,4 51 2 0 7 ,3 3 9 1 8 5 ,1 7 4 3 5 5 ,7 8 8 - 7 - 7 -1 6 + 37 -1 2 + 12 . . . 1 1 7 ,9 1 7 ,5 4 5 1 2 7 ,0 2 2 ,8 8 7 r 1 0 2 ,4 1 2 ,8 3 l r D IS T R IC T T O T A L . A la b a m a . . . . . . . .................... . . . F lo rid a G eo rg ia . . . . . . . L o u is ia n a ' . . . . . . M is s is s ip p i’ . . . . . T e n n e s s e e 1. . . . . . 1 4 ,0 8 1 ,4 1 3 3 9 ,5 5 9 ,9 7 5 3 3 ,4 7 7 ,1 4 1 1 2 ,2 1 5 ,4 9 3 4 ,4 8 5 ,0 9 1 1 4 ,0 9 8 ,4 3 2 1 5 ,7 2 2 ,6 6 9 r 4 2 ,2 8 2 ,7 4 2 r 3 6 ,8 5 0 ,6 4 6 r 1 2 ,9 6 0 ,7 3 4 r 4 ,7 9 5 ,0 9 7 r 1 4 ,4 1 0 ,9 9 9 12 ,3 4 3 ,3 5 1 3 2 ,7 8 9 ,0 4 7 3 0 ,4 0 0 ,152r 1 1 ,3 0 7 ,2 5 6 4 ,2 0 4 ,6 9 7 1 1 ,3 6 8 ,3 2 8 - 2 6 8 9 + 2 + 1 2 16 15 8 4 2 2 8 7 + 15 -1 0 - 6 - 9 - 6 - 6 - 2 -1 4 +21 + 10 + 8 + 7 + 24 is fe a tu re w ill a p p e a r in th e M O N T H LY R E V IE W . S e e ca rd d e ta ils . DISTRICT BUSINESS CONDITIONS 1 9 72 -10 0 — Seas. Adj. Mfg. Income — 1967=100 / v Seas. Ad|. 1974 Farm Cash Receipts 1975 1976 * S e a s . a d j. fig u re ; not an in d ex L a te s t p lo ttin g : J a n u a ry , e xce p t m fg . p ro d ., an d re ta il s a le s , D e ce m b e r, an d fa rm c a s h re c e ip ts , N o vem b e r. Although the Southeast was adversely affected by cold weather and associated fuel shortages, business activity has now largely recovered. Weather-related weaknesses temporarily slowed consumer spending and construction activity. Farmers suffered considerable crop damage from the severe cold; as a result, agricultural prices rose sharply. Bank lending continues to advance. Manufacturing income and consumer spending rebounded after the severe weather. Prior to the cold snap, manufacturing income growth had slowed. Led by substantial increases in auto and bank credit card loans, bank consumer installment credit extensions rose rapidly in late 1976. Auto registrations jumped 10 percent in December. Fol lowing a very large gain during November, total retail sales increased moderately. Although bad weather depressed construction activity and employment in late January and early February, there were signs of underlying strength in the industry. The value of construction contracts rose in January because of a sharp increase in re sidential contracts, especially in Florida and Louis iana. The value of nonresidential contracts declined. Deposit inflows at savings and loan associations in January were strong, although below rates of a year ago. Prices received by farmers rose abruptly in Jan uary and showed a strong upward trend in Feb ruary. Prices for broilers, hogs, feeder calves and most grains continued to rise. They were joined by brisk advances for citrus fruit and vegetables, re flecting the impact of subfreezing temperatures in Florida. An unusually harsh winter nationwide has Note: increased livestock feed demands and boosted prices of hay and other feed ingredients, resulting in some forced livestock marketings. Projected farm cash receipts have risen above the year-ago pace, reflecting the combination of improved prices and more marketings in the livestock sector. Bank lending is advancing briskly. Commercial and industrial customers of the larger banks in creased their borrowing during February. The largest loan take-downs were from retail trade and construction firms and durable goods manufac turers. Deposit inflows remain strong, especially household and business savings. Bank holdings of Treasury securities have increased during the last two months after declining in December. Total nonfarm jobs in the region as a whole rose in early January. Job gains in the construction sec tor boosted nonmanufacturing employment. Even though employment in nondurables slowed some what, large employment gains in the durable in dustries led the manufacturing sector to moderate job growth. Reflecting plant closings during low natural gas supplies, factory hours and earnings declined. Labor market conditions weakened in the latter half of January but have improved with better weather and more plentiful fuel supplies. Data on which statements are based have been adjusted whenever possible to eliminate seasonal influences. This is the last time this feature will appear in the MONTHLY REVIEW. See card insert in this issue for details.