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Atlanta, Georgia August • 1962 Also in this issue: REVISIONS IN MEASURES OF DEPARTMENT STORE TRADE SIXTH DISTRICT STATISTICS DISTRICT BUSINESS CONDITIONS 3& eraf % sm j& fa ta Greater Competitive Thrust “The main concern of economics is . . . with human beings who are impelled, for good and evil, to change and progress.” So wrote Alfred Marshall, the famous English economist, more than forty years ago. Many forces impel human beings along the courses they follow, per haps without being clearly recognized. One economic force that currently seems to be felt with increasing thrust, as is appropriate in this day of guided missiles and moon projects, is competition. Ten years from now hindsight will tell us more about today’s increased competition, but even now enough features are discernible to help us explain its develop ment, recognize its symptoms, judge whether or not it’s here to stay, and plan accordingly. A word meaning different things to different specialists, competition is used here to refer to the contest for business in the market place, i.e., what the businessman usually thinks of as competition. We can per ceive increases or decreases in the competitive struggle for business by noting changes in the ease of buying or selling goods and services. To sellers, lack of competition is likely to mean that they have little or no difficulty in selling goods at prevailing or higher prices inasmuch as their productive facilities are probably being used to their limit. To buyers, this is likely to mean difficulty in obtaining the things wanted, limited selection of goods, few price alternatives, poor quality, or in different salesmanship. With increased competition, sellers, perhaps find ing some of their facilities idle, must intensify their efforts to obtain busi ness. Buyers will enjoy the likely effect of being able to obtain easily the things they want, of having a wide selection from which to choose, of paying less as a result of price concessions, or of obtaining goods and services of higher quality. A shift toward increased competition, it now appears, is what has been taking place in the postwar years. We see in this shift a reflection of fundamental changes in economic relationships that have been working themselves out over this period. In terms of that tried-and-true economic law of supply and demand, a greatly increased ability to supply goods and services is interacting with a demand that is less urgent now than in the early postwar years. Although this situation has evolved mainly from domestic changes, it also reflects the postwar rebuilding of economies abroad. A Gradual Change The economy of this country has always been a competitive one. Relatively speaking, however, business has become more competitive as the economic environment has changed over the past four to six years or so. The change has not been an abrupt one. Rather, it has taken place gradually as fundamental relationships between demands for goods and the ability of business to supply them have been altered. The change has occurred at different times for different businesses in different localities. In the automobile industry, for example, we can, perhaps, pinpoint a rather definite change that took place in 1955. Previ ously, automobile producers had, for the most part, been confronted with the problem of boosting output to meet a demand that seemed to them to be insatiable, even though prices were rising. Things changed markedly in 1955. True, it was the year in which more sales were made than ever before, but this was accomplished only by prodi gious selling efforts. Price discounting became widespread, credit terms were eased drastically to stimulate buying, and a major change in styling occurred. The days of so-called “wheeling and dealing” had indeed been ushered in. Severe competition has been characteristic of the automobile market ever since. Increasingly so, buyers have had no difficulty in obtaining a car to their liking from a wide variety of makes and models. W hy? The reason for the generally increased degree of competi tion now facing American businessmen is fundamentally very simple: Their ability to supply just about every kind of product has increased enormously, and at the same time, the public’s most urgent demands for goods and services at current prices have been satisfied. Now, in most lines, American businessmen are able to produce much more than is actually being sold at prevailing prices. Looking first for evidence of the easier supply situation, we find it in the charted figures on productive resources. Neither our labor force nor our industrial capacity (repre sented by factories and mines) is being fully utilized; hence, we could be producing much more than we are producing. Although the level of business activity is substantially higher now than at the low point of the recession ending in February 1961, labor continues to be in easy supply, as shown by the failure of the unem ployment rate to drop more than it has. The rate persisted at nearly 7 percent of the labor force through most of last year, in spite of general business expansion. It has dropped some since last October, but in July, the unem ployed still accounted for 5.3 percent of the total labor force. There are shortages of people with professional, technical, and skilled training, but the generally high unemployment rate does indicate that the total labor force is underutilized. Looking at our ability to produce a number of major, basic materials, such as steel, textiles, cement, and chemicals, you will find that approximately 24 percent of productive capacity is still unused, despite the higher level of business. Over the past six or seven years, both unemployment and unused productive capacity have shown a general upward trend. With the easing of the supply situation, businessmen have been able to obtain more rapid delivery of finished goods and materials, a development that has, in turn, reduced the need to build inventories. As is usually the case when sales expand, inventories have increased during the past seventeen months, but they have not increased as rapidly as previous postwar experience would have led one to expect. To find evidence of easing demand during a period when spending of most types has actually been increasing is difficult. It may even seem paradoxical to think it possible. To speak of an easing demand is not, however, necessarily to say that the amount of goods purchased is declining. Rather, the reference is to a change in the character of demand. Reflecting this change, consumers, though possi bly buying more goods than previously, feel less compul sion to buy and are, as a group, more responsive to price changes in determining the quantities of goods they pur chase. In relating consumption expenditures to personal dis posable income, we can see evidence of an easing of de mand in the contrast between developments in the early postwar years and those of more recent years. In the early years, consumers spent unusually large proportions of their income in satisfying pent-up demands for many goods that had been unavailable during the war. It was not until about 1952 that the proportion of income spent on consumer goods and services settled down to a rela tively stable level. Since then, the range of fluctuation has been between about 92 and 94 percent of con sumers’ income. The dollar amount spent for durable goods, such as automobiles, appliances, television sets, and furniture, has shown very little uptrend since 1955. The contrast this provides with an earlier strong uptrend suggests that there has been in recent years much less of a stimulus to business from such consumer spending than previously was the case. Undoubtedly, the large volume of purchases of durable goods through 1955 dulled consumers’ appetites for more of the same. Still, since about 1952 the consumer has continued to increase his total spending pretty much in line with his gains in income, as is indicated by the relative stability of the percentage of income devoted to spending. As the total amount of consumer spending has increased, how ever, it has been allocated in different ways than formerly. Generally speaking, consumers have been allocating a larger part for the purchase of services and a smaller part for the purchase of goods. Insofar as the satisfaction of demands for some goods leads consumers to spend in order to satisfy less urgent wants, this shift in the spend ing pattern also gives evidence of a gradual easing of demand over the years. . 2 • Shifting Consumption Patterns Source: Based on data published by U. S. Department of Commerce. The shift from goods to services has been occurring since World War II. Back in 1948, spending for goods took about sixty-eight cents out of every dollar spent by the consumer, whereas in the first quarter of this year, goods took only fifty-nine cents out of every dollar. In contrast, spending for services increased in relative im portance from thirty-two cents out of every dollar in 1948 to forty-one cents in the first quarter of this year. This includes such spending as that for telephone, gas, and electric services, medical care, and repair and financial services. The shifting of consumer demands has been even more complex than these general figures suggest. Sometimes the demand for some services simply grows faster than the demand for certain goods. Expenditures for medical serv ices, for example, have increased rapidly along with gains in income, whereas expenditures for food, more closely related to population gains, have increased more slowly. Sometimes, services substitute for goods. For example, the gas and electric services now used for heating and re frigeration substitute for the coal and ice formerly pur chased by individuals for those purposes. Sometimes goods substitute for services. Thus, enter tainment in the home provided by television sets, radios, and record players has been substituted, to a considerable extent, for entertainment in theaters, paid for as a service. Frequently, the purchase of goods has also caused in creases in service expenditures, thus bringing about com plementary gains in both goods and services. The rise in the number of automobiles on the road and of appliances in our homes, for example, has been followed by increased expenditures for repair services. Also, the use of credit in making purchases has brought increases in consumer expenditures for financial services. In the business sector, demands for new productive facilities have also eased in the past five or six years. Not since 1957 has business spending for new plant and equipment shown a general upward trend, whereas in the earlier years of the postwar period such an uptrend was evident. Undoubtedly, the satisfaction of urgent consumer demands and the relative shift away from spending for goods has been partly responsible. Also, as existing pro ductive capacity has tended, over the years, to be used less and less fully, there has been less and less incentive for businessmen to spend increasing amounts on productive capacity. Spending by Federal, state, and local governments as a group is a different matter, for it has resumed an upward movement since about mid-1956. Earlier in the 1950’s, Federal spending for military purposes first expanded sharply because of the Korean War and then declined in late 1953 and in 1954. Defense spending subsequently in creased to about the volume reached in mid-1953. Spend ing by state and local governments has, however, shown a persistent, strong uptrend. With recently increased Federal spending for national defense added to this strong uptrend, total government spending has provided a major addition to overall demands during about the last five years. While greater supply and less urgent private demands on the domestic scene have been primarily responsible for increased competition, developments on the international scene have also been responsible. Early in the period after World War II, this country had a virtual monopoly in supplying goods to the world market because productive capacity in much of the industrial world had been devas tated by the war. As this industrial capacity was rebuilt, foreign economies became better able both to supply goods for themselves and, eventually, to compete for sales in the world market. Now American businessmen find themselves competing more vigorously both here and abroad with foreign producers. In cases where newly in stalled industrial productive facilities abroad are more modern than their counterparts in this country, the com petitive position of foreign producers is enhanced. Even during this period of increasing world-wide com petition, however, purchases by foreigners have provided an enormous stimulus to some manufacturers in this country, as is shown by our sharply expanded exports. Amounting to a record total of over $20 million last year, total exports from the United States were nearly 45 percent greater than they were a decade earlier. The Symptoms We have seen a reflection of all these forces— the symp toms of increased competition—in the relative stability of the wholesale price index since early 1958. The effects of these forces have also been seen in greater efforts to pro vide high-quality services. The proliferation of models of many consumer goods is also a symptom of increased competition. Witness the variety of automobile models now available to satisfy the desires, even the whims, of American consumers, and the many-colored shapes and sizes of household appliances and television sets now on the market. Ignoring all the statistics that, at their best, give only an imprecise indication of increased competition, one waggish businessman expressed the situation rather effec tively when he said, “I no longer find it necessary to beat off customers with a club.” Further evidence of increased competition is apparent in the greater emphasis that manu facturers are now giving to modernizing their productive facilities to cut costs. All this reflects a change from the situation of the early postwar years, when many manufacturers could expand output with relatively little fear of being unable to sell at steadily increasing prices. There is no certainty now that . 3 . output can be sold without greater sales effort, which fre quently involves price competition. The question may well be asked, “Is all this increased competition good or bad?” Certainly it means that life is more difficult for the businessman. To maintain or expand profits, he must be constantly alert to discern changes in demand for goods and services, while at the same time seeking to expand the use of productive facilities and try ing to reduce costs. The effect has been felt in labor markets, where, generally speaking, recent wage gains have been smaller than those of earlier postwar years. Individuals as consumers, however, frequently discover that increased competition means they can find better goods more readily than before and often at better prices. Whatever the point of view, most observers would probably agree that competition is now more effectively providing economic discipline than was the case a few years ago. One way it does this is by providing a strong stimulus to more efficient production. Rising Production w ith Price Stability i i Industrial Production -------- -------- -------- ----- 1957 = IOO Wholesale Prices 1957 - 59 = 100 Will It Last? Whether or not increased competition is a phenomenon of indefinite duration remains to be seen. However, since it has become most apparent— in the past four or five years—it has not been transitory and related only to recession. This is evident from the chart showing industrial production and prices, that is if we can assume that the price stability since early 1958 reflects the more competi tive situation facing businessmen today. Since that time, this country has experienced two periods of sharp expansion in industrial production. In neither one did wholesale prices show any appreciable rise. In the most recent experience—that beginning in February 1961— expansion has been about as large as any previous postwar expan sion, but wholesale prices are now actually lower than they were a year ago. The evidence is less clear-cut when we look at consumer prices, but even here the upward trend of the average index of prices for all items has slowed considerably. This is especially true for commodities, which have shown little price change in the recent period of business expansion and, over the past four years, have shown a price rise of about 2 percent. Most of the upward pressure on the consumer price index for all items during this time has reflected a persistent uptrend in prices of services and rent. A highly competitive situation is, of course, normally expected in a time of recession, but it is significant that in recent years, business has continued to be highly com petitive even as economic activity has recovered from periods of recession. Consumer Prices 1957 - 59 = IOO All Items Commodities 9ol*u>--1-------- 1--------1-------- 1-------- 1--------1-------- 1—«a»J9o 1956 1957 1958 1959 I960 1961 1962 Sources: Industrial production: Board of Governors of the Federal Reserve System; Prices: Bureau of Labor Statistics, U. S. Department of Labor. It is impossible, of course, to determine the extent to which the long-run changes that have brought about this situation influence current business decisions. Undoubtedly because of this, most observers are now having unusual difficulty in judging what course economic activity is likely to take in the next few months. P h il ip M. W eb st e r Revisions in Measures of Department Store Trade The department store sales and stocks indexes published monthly by this Bank have been revised extensively from 1947 forward. Revisions include adjustment to the Census benchmark on the basis of 1958 data, recomputation of weights used in constructing indexes for the Sixth District and for the individual six states, a shift in the base period from the average of 1947-49 to the 1957-59 average, and a recalculation of seasonal adjustment factors. The indexes measure sales and stocks at retail stores that fall within the definition of department stores. Such . 4 . stores carry a broad line of merchandise, including apparel, furniture and appliances, and household linens and dry goods. The stores normally use a departmental accounting system and they employ twenty-five or more persons. Re tail stores specializing in a particular type of merchandise, such as apparel, are not considered department stores. Monthly indexes of sales and stocks are based on voluntary reports from a sample of department stores. The revised departm ent store sales index shows more rapid growth than the old index. Percent Percent The indexes based on the monthly sample were re vised to agree with the universe data for the year 1958. In this process, monthly indexes were revised from December 1954 to date. The indexes prior to that time had already been adjusted to the 1954 Census benchmark. The Census data for 1958 also showed that there had been a shift in the relative importance of sales and stocks in the different areas in the District. Most metro politan areas declined in relative importance and the “other cities” component tended to gain. This was especially marked in Florida. The District index and indexes for individual states are computed by applying the weights listed in the tables to indexes for individual areas. Previous weights were based on the relationship of areas for the 1947-49 period. The revised indexes were then recomputed using the new standard base of 1957-59 so that they would be comparable with other indexes. Neither the month-tomonth variation in the indexes nor the relationship among indexes was affected by this change. Finally, seasonal adjustment factors were recomputed for each of the sales indexes and for the index of stocks. The ratio-to-moving-average technique that has been in use within the Federal Reserve System for several decades was used in deriving the seasonal adjustment factors. The Estimated Annual Department Store Sales for the Sixth District, by A rea, 1957-59 (Thousands of Dollars) - — ■ V I I____ I____ I____ I____ I____ I____ I____ I____ I____ 1____J____ I____ I____ I___V 1948 1950 1952 1954 1956 1958 I960 1962 In 1958, the sample included 125 of the 269 depart ment stores in the District. Total sales of stores included in the sample comprised 82 percent of total department store sales during that year. In some areas the monthly sample included all department stores, whereas in others the coverage was less. Indexes for metropolitan areas are not computed unless the sales of the reporting stores are representative of the sales of all department stores. Data are not published for certain major cities or metropolitan areas either because the number of stores is too small to permit publication without disclosing individual store operations or because some stores have declined to participate in the series. This reporting arrangement does not allow us to reveal the names and the number of reporters, or their dollar sales. Since there is a sizable variation in sample coverage from area to area, the District and state indexes are con structed by applying weights to the area indexes. The weights are based on the sales of all department stores in each area as reported by the Bureau of the Census. The Census data also provide means of comparing sales estimated from the sample with actual sales of all department stores, i.e., “universe” sales. The latest Census data cover the year 1958. Sales estimated from monthly reports were found to be slightly lower than sales reported for all department stores in the District in the 1958 Census. Indexes for some metropolitan areas and parts of states differ from the universe data to a larger degree. Weights in District Index (Percent of District Total) 1957-59 1947-49 Area 1957-59 1947-49 A L A B A M A ....................... Birmingham . . . . Other Cities . . . . 125,565 58,353 67,212 73,591 39,462 34,129 12.5 5.8 6.7 13.8 7.4 6.4 FLORIDA ....................... Jacksonville . . . . 313,397 32,049 97,197 67,391 116,760 116,785 22,397 37,862 28,499 28,027 31.3 3.2 9.7 6.7 11.7 21.9 4.2 7.1 5.3 5.3 Other Cities . . . . 219,954 133,779 15,653 70,522 127,983 79,456 10,132 38,395 22.0 13.4 1.6 7.0 24.0 14.9 1.9 7.2 LOUISIANA....................... Baton Rouge . . . . New Orleans . . . . Other Cities . . . . 161,058 24,356 101,115 35,587 99,186 12,798 71,457 14,931 16.1 2.4 10.1 3.6 18.6 2.4 13.4 2.8 MISSISSIPPI . . . . J a c k s o n ....................... Other Cities . . . . 35,738 15,202 20,536 25,063 14,398 10,665 3.6 1.5 2.1 4.7 2.7 2.0 TENNESSEE . . . . Chattanooga . . . . Knoxville....................... Other Cities . . . . 145,990 26,304 46,507 73,179 90,655 15,998 26,130 48,527 14.5 2.6 4.6 7.3 17.0 3.0 4.9 9.1 . 1,001,702 533,263 100.0 100.0 Tampa-St. Petersburg Other Cities . . . . GEORGIA............................ A t l a n t a ....................... SIXTH DISTRICT . . . . . seasonal indexes for March and April include an allowance for the changing date of Easter. Historical data incorporating the above changes for the period 1947 to date are available upon request to the Research Department of this Bank. T h e total su p p ly o f m o n e y in the S ix th D istrict— ch eckin g d ep o sits a n d cu rrency h eld outside b a n ks— a m o u n te d in D ec em b er 1961 to a b o u t $ 1 0 .7 billion or ro ug h ly $ 6 0 0 p er D istrict resident. • 5 • Bank Announcements Debits to Individual Demand Deposit Accounts (In Thousands of Dollars) On July 1, the Merchants and Planters Bank, Montevallo, Alabama, a nonmember bank, began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers are James A. Kelley, President, and John P. Kelley, Vice President and Cashier. The First National Bank of Slidell, Slidell, Louisiana, a newly organized member bank, opened for business on July 2 and began to remit at par. Officers include R. M. Walmsley, III, President; E. E. Riffel, Executive Vice President and Cashier; and C. W. Schneider, Vice President. Capital totals $200,000, and surplus and un divided profits, $200,000. A newly organized nonmember bank, the Bank of Kendall, Miami, Kendall 56, Florida, opened for busi ness on July 12 and began to remit at par. Officers are H. T. Maroon, President; M. E. Stephens, Executive Vice President; Richard L. Rotroff and Howard F. Dale, Vice Presidents; and C. E. Douglas, Cashier. Capital totals $400,000, and surplus and undivided profits, $300,000. On July 20, the First State Bank of Lutz, Lutz, Florida, a newly organized nonmember bank, opened for business and began to remit at par. Officers include Ray Clements, President; Osier Adams, Executive Vice President; W. H. Greene, III, Vice President; and Donald Whitworth, Cashier. Capital totals $300,000, and surplus and undivided profits, $100,000. The First National Bank of Sebring, Sebring, Florida, a newly organized member bank, opened for business on July 30 and began to remit at par. Officers are Rex E. Bond, President, and Alfred W. Roepstorff, Vice President and Cashier. Capital totals $200,000, and surplus and undivided profits, $200,000. Departm ent Store S ales and Inventories* Percent Change Place Sales_______________ June 1962 from 6 Months May June 1962 from 1962 1961 1961 ALABAMA ............................. Birmingham....................... M obile.................................. Montgomery....................... FLORIDA ............................. Daytona Beach . . . . Jacksonville....................... Miami A r e a ....................... M ia m i............................. O rla n d o ............................. St. Ptrsbg-Tampa Area — 16 — 15 — 16 —16 —4 —3 —13 +2 —1 —5 —5 +12 —1 +5 +6 +6 + 66 +21 +1 —1 +5 +5 +12 +1 +4 +8 +5 +47 +21 — 16 —1 —5 —9 —7 +7 +9 +9 +8 +3 —3 +8 +11 +5 +3 +6 +2 LOUISIANA............................. — 12 Baton Rouge....................... —9 New O rleans....................... — 13 +2 +10 +0 GEORGIA ............................. Atlanta4* ....................... A u g u s ta ............................. M acon.................................. Rome** ............................. Savannah ............................. —3 —6 +0 +2 Inventories June 30,1962 from May 30, June 30, 1962 1961 —3 —2 +5 +5 — 10 +11 —2 +3 —7 + 20 —5 —5 —0 —0 —0 +14 +3 +11 +1 —2 —4 —2 +9 + 15 +8 +6 +8 —2 —1 +5 +5 M IS S IS S IP P I....................... Jackson ............................. — 10 — 14 TENNESSEE ....................... Bristol-KingsportJohnson City** . . . Bristol (Tenn. & Va.)** Chattanooga....................... Knoxville............................. —20 +6 +8 —3 +3 —3 +8 — 14 —5 — 18 — 22 —3 —3 +0 —4 +4 +3 +6 +3 —1 +7 ............................. —12 +4 +7 —6 DISTRICT +7 ♦Reporting stores account for over 80 percent of total District department store sales. **In order to permit publication of figures for this city, a special sample has been constructed that is not confined exclusively to department stores. Figures for non department stores, however, are not used in computing the District percent changes. Percent Change Year-to-date 6 months June 1962 from June May June from 1961 1962 1961 1961 June 1962 May 1962 46,855 900,857 39,446 37,438 82,344 295,028 180,519 27,508 60,822 1,670,817 848,297 47,844 954,329 42,251 39,646 86,361 312,802 210,989 28,968 67,008 1,790,198 907,635 45,325 849,177 38,678 35,487 69,754 314,553r 172,592 26,263 60,634 l,612,463r 768,230r —2 —6 —7 —6 —5 —6 — 14 —5 —9 —7 —7 +3 +6 +2 +5 + 18 —6 +5 +5 +0 +4 +10 +6 +8 +7 +3 +18 +2 +7 +8 + 10 +7 +9 50,460 57,374 206,362 48,980 824,453 15,179 84,909 961,671 1,399,464 267,603 89,264 215,484 79,128 65,886 440,503 154,065 3,999,114 1,723,415 n.a. 61,356 232,672 50,648 937,230 17,725 90,221 1,026,796 1,495,293 280,815 93,847 233,677 86,344 74,664 485,079 189,050 4,328,621 1,875,108 n.a. 53,114 200,569 43,019 833,396r 16,769 83,100 863,894r l,298,955r 253,640 87,810r 218,542 n.a. n.a. 427,790 143,747 3,660,451r l,748,848r n.a. —6 — 11 —3 — 12 — 14 —6 —6 —6 —5 —5 —8 —8 — 12 —9 —19 —8 —8 n.a. +8 +3 + 14 —1 —9 +2 +11 +8 +6 +2 —1 n.a. n.a. +3 +7 +9 —1 n.a. +6 +6 + 11 +5 +4 +2 +8 +6 +6 +3 +8 n.a. n.a. +7 + 18 +10 +6 57,694 44,178 2,445,592 126,448 31,171 118,268 52,922 12,254 53,836 21,219 17,866 139,389 36,345 22,460 48,584 179,977 31,759 3,439,962 932,033 61,238 48,756 2,561,870 129,308 34,718 129,690 56,% 0 10,025 60,046 21,723 16,510 145,344 37,412 18,831 53,132 189,631 36,878 3,612,072 994,408 52,343 45,879 2,186,671r 113,162 27,361 112,862 n.a. 8,829 50,343 19,963 17,180 126,664 34,765 21,878 47,331 158,977r 33,132 3,057,340r 955,421r —6 —9 —5 —2 — 10 —9 —7 + 22 — 10 —2 +8 —4 —3 + 19 —9 —5 — 14 —5 —6 + 10 —4 + 12 +12 + 14 +5 n.a. + 39 +7 +6 +4 + 10 +5 +3 +3 + 13 —4 + 13 —2 +12 +11 +16 + 14 +25 +11 n.a. +7 +9 +9 —3 +10 + 12 +9 +0 +9 +6 +15 +3 81,616 289,462 68,657 88,093 1,499,848 2,027,676 693,257 85,755 302,476 73,852 88,495 1,579,305 2,129,883 707,058 70,000 262,204 60,137 79,661 1,429,291 1,901,293 593,937r —5 —4 —7 —0 —5 —5 —2 +17 + 10 + 14 +11 +5 +7 + 17 + 18 +12 +11 +11 +7 +8 + 19 58,128 39,322 347,487 28,776 46,817 24,909 23,136 568,575 307,926 65,832 40,651 365,753 30,094 52,965 24,742 23,608 603,645 308,430 54,458 37,897 308,490 29,629 44,617 23,220 22,414 520,725 280,504r — 12 —3 —5 ■ —4 — 12 +1 —2 —6 —0 +7 +4 + 13 —3 +5 +7 +3 +9 +10 + 12 +6 +14 +2 +10 +7 +10 + 12 + 10 56,325 344,743 50,015 93,171 270,188 826,295 1,640,737 635,339 57,189 354,333 49,526 92,448 270,118 851,795 1,675,409 619,652 51,405 350,040 43,917 95,281 260,566 782,480 1,583,689 614,555r —2 —3 +1 +1 +0 —3 —2 +3 + 10 —2 +14 —2 +4 +6 +4 +3 + 10 +6 + 13 +10 +4 +8 +7 +3 18,487,148 13,346,881 5,140,267 11,239,524 19,552,119 14,139,828 5,412,291 11,912,337 17,297,456r 12,335,961r 4,961,495r 10,560,423r —5 —6 —5 —6 +7 +8 +4 +6 +9 +10 +7 +9 —1 +8 +11 ALABAMA Anniston . . . . Birmingham . . . Dothan . . . . Gadsden . . . . Huntsville* . . . Mobile . . . . Montgomery . . Selma* . . . . Tuscaloosa* . . . Total Reporting Cities Other Citiesf . . . FLORIDA Bradenton* . . . Daytona Beach* Fort Lauderdale* . Gainesville* . . Jacksonville . . Key West* . . . Lakeland* . . . Miami . . . . Greater Miami* Orlando . . . . Pensacola . . . St. Petersburg . . Sarasota* . . . Tallahassee* . . Tampa . . . . W. Palm-Palm Bch.* Total Reporting Cities Other Citiesf . . . GEORGIA Albany . . . . Athens* . . . . Atlanta . . . . Augusta . . . . Brunswick . . . Columbus . . . Dalton* . . . . Elberton . . . . Gainesville* . . . Griffin* . . . . LaGrange* . . . Macon . . . . Marietta* . . . Newnan . . . . Rome* . . . . Savannah . . . . Valdosta . . . . Total Reporting Cities Other Citiesf . . . LOUISIANA Alexandria* . . Baton Rouge . . Lafayette* . . . Lake Charles . . New Orleans . . Total Reporting Cities Other Citiesf . . . MISSISSIPPI Biloxi-Gulfport* . Hattiesburg . . . Jackson . . . . Laurel* . . . . Meridian . . . . Natchez* . . . Vicksburg . . . Total Reporting Cities Other Citiesf . . . TENNESSEE Bristol* . . . . Chattanooga . . . Johnson City* . . Kingsport* . . . Knoxville . . . . Nashville . . . . Total Reporting Cities Other Citiesf . . . SIXTH DISTRICT Reporting Cities Other Citiesf . Total, 32 Cities . . . UNITED STATES 344 Cities . . . 292,500,000 295,600,000 271,800,000 ♦Not included in total for 32 cities that are part of the national debit series maintained by the Board of Governors, fEstimated. r Revised. n.a. Not available. • 6 • S ix t h D is t r ic t S t a t is t ic s Seasonally Adjusted (All data are indexes, Latest Month (1962) One Month Ago 1957-59 = 100, Two Months Ago unless indicated otherwise.) One Year Ago Latest Month (1962) One Month Ago Two Months Ago One Year Ago May May June 7,009 107 105r 6,846r 99 106r 6,965r 114 103r 6,472r 103 106r June June June June June June June June 107 104 108 108 77 3.3 39.8 118 106 103 108r 109 80 3.0 40.0 118r 106 103 107 105 82 3.4 39.9 118 102 99 103 91 86 5.4 39.7 107 June June June 144 128 133 138 125 127 136 126 133 128 116 116 May May June 5,598 120 lOOr 5,558r 103 105r 5,611r 117 97r 5,376r 99 97r June June June June June June June June 98 93 99 72 101 4.7 41.2 107 98 94 99 73 91 4.8 41.2r 106 98 94 99 76 98 4.7 41.6 108 98 93 99 76 104 6.4 40.9 101 June June June 132 113 124 129 112 115 132 112 116 118 106 108 May May 2,923 126 97r 2,810r 86 102r 2,827r 110 lOOr 2,686r 92 92r 109 114 107 101 81 4.1 40.0 129 110 113 108 103 84 4.6 40.5 129r 109 112 107 102 93 4.6 40.2 126 105 105 105 98 77 7.2 39.8 112 152 130 137 151 130 131 150 129 138 134 117 117 G EO RG IA SIXTH DISTRICT INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . May Farm Cash R e c e ip t s ........................................May C r o p s ...............................................................May Livesto ck......................................................... May Department Store S a l e s * / * * ....................... July Department Store S t o c k s * .............................June Instalment Credit at Banks,* (Mil. $) New Loans......................................................... June Repayments....................................................June PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................ June Manufacturing..............................................June Apparel......................................................... June Chemicals................................................... June Fabricated M e t a ls .................................. June Food...............................................................June Lbr., Wood Prod., Furn. & Fix. . . . June P a p e r ......................................................... June Primary M e ta ls ........................................June Textiles ................................................... June Transportation Equipment . . . . June Nonmanufacturing........................................June Construction..............................................June Farm Employment..............................................June Insured Unemployment, (Percent of Cov. Emp.) June Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June Manufacturing P a y r o lls .................................. June Construction Contracts*.................................. May R e sid e n tia l................................................... May All O th e r.........................................................May Electric Power P ro d u ctio n **.......................May Cotton Consum ption**.................................. June Petrol. Prod, in Coastal La. and Miss.** . June FINANCE AND BANKING Member Bank Loans* All B a n k s.........................................................June Leading C i t i e s ..............................................July Member Bank Deposits* All B a n k s.........................................................June Leading C i t i e s ..............................................July Bank D e b it s * / * * ..............................................June 37,788 117 129 111 116p 115 36,961 r 102 105 104 113r 114 37,527r 35,343r 113 106 119 110 113 107 117r 109r 114 107 144 128 133 125 139 127 126 126 107 106 120 101 104 105 98 103 96 96 105 107 94 85 4.1 40.9 122 122 124 120 130 109 146 106 106 118 106 105 116 104 105 106r 98 103 97 96 103 106 94 85 4.0 41.Or 105 107 97 104 95 96 100 121 139 116 158 122 106 147 100 101 106 93 91 4.2 40.6 121 137 114 156 124 105 147 102 111 100 100 104 96 104 94 96 88 104 89 87 6.0 40.3 111 102 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) Farm Cash R e c e ip ts ............................. Department Store Sales** . . . . PRODUCTION AND EMPLOYMENT Avg. Weekly Hrs. in Mfg., (Hrs.) FINANCE AND BANKING LO U ISIAN A INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) PRODUCTION AND EMPLOYMENT 108 98 118 101 135 Avg. Weekly Hrs. in Mfg., (Hrs.) 136 136 133 136 134 133 124 124 122 122 129 120 121 111 120 123 119 127 FINANCE AND BANKING 114 115 MISSISSIPPI A LA BA M A INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) Farm Cash R e c e ip t s ............................. Department Store Sales** . . . . PRODUCTION AND EMPLOYMENT Nonfarm Employment............................. Manufacturing.................................. Nonmanufacturing............................. Construction.................................. Farm Employment.................................. Insured Unemployment, (Percent of Cov. E Avg. Weekly Hrs. in Mfg., (Hrs.) . . Manufacturing P a y r o lls ....................... . . May May . June >.) June . June 5,190 116 102r 5,074r 104 llO r 5,115r 112 98r 4,893r 105 106r 102 99 104 90 85 4.9 40.7 116 102 99 104 90 80 4.7 40.4r 116 101 98 103 91 85 4.6 40.2 114 102 96 105 93 85 6.3 39.4 102 136 121 126 132 119 122 133 119 124 126 109 114 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) Farm Cash R e c e ip ts ............................. . . PRODUCTION AND EMPLOYMENT Avg. Weekly Hrs. in Mfg., (Hrs.) ).) June . June FINANCE AND BANKING FINANCE AND BANKING TENNESSEE FLORIDA INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . May Farm Cash R e c e ip t s ........................................May Department Store S a l e s * * .............................June PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................June Manufacturing..............................................June Nonmanufacturing........................................June Construction..............................................June Farm Employment..............................................June Insured Unemployment, (Percent of Cov. Emp.) June Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June Manufacturing P a y ro lls .................................. June FINANCE AND BANKING Member Bank L o a n s ........................................June Member Bank D e p o s its .................................. June Bank D e b its * * ................................................... June *For Sixth District area only. . June 11,039 10,745r 10,938r 10,240r 115 115 121 133 137r 137r 124r 140r 115 122 114 94 84 3.3 41.6 150 131 122 128 114 121 113 92 105 3.2 41.4 148r 128 122 125 Other totals for entire six states. 113 120 112 93 94 3.3 41.4 147 130 123 129 110 115 109 88 82 4.8 41.0 135 120 111 115 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . May Farm Cash R e c e ip ts ........................................May Department Store S a l e s * / * * .......................June 6,029 87 99r PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................June Manufacturing..............................................June Nonmanufacturing........................................June Construction..............................................June Farm Employment..............................................June Insured Unemployment, (Percent of Cov. Emp.) June Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June Manufacturing P a y r o lls .................................. June 105 108 104 114 86 4.9 40.2 120 105 107 104 ll7 84 4.8 40.8r 120r 105 107 104 110 92 4.9 40.6 118 103 105 103 107 93 7.2 40.1 113 135 119 129 133 119 120 134 122 127 124 113 118 FINANCE AND BANKING Member Bank L o a n s*........................................June Member Bank Deposits*.................................. June Bank D e b it s * / * * ..............................................June p Preliminary. 5,928r 6,071r 110 95 109r 95r 5,676r 92 102r r Revised. **Daily average basis. Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U.S. Dept, of Labor and cooperating state agencies; cotton consumption, U.S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U.S. Bureau of Mines; elec. power prod., Fed. Power Comm.; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. • 7 • D I S T R I C T B U S I N E S S C O N D I T I O N S I t i i i i I i i i i i i i i i i i I i i i i i | i ii i i | i i i i i Billions of Dollars Annual Rate Personal Income^ T o ta l economic activity in the District has continued to expand in recent months, although all states have not been eq ually favored. The performance of key indicators has also been uneven. Employment, personal income, and consumer spending have continued to increase, but an accumula tion of evidence suggests that expansion has been less rapid recently than earlier this year. 1 9 5 7 -5 9 = 1 0 0 - Se as. Adj. In June, gains in nonfarm em ploym ent w ere concentrated in Florida and G eorgia. Employment declined in Mississippi and Louisiana and remained unchanged in Alabama and Tennessee. )S Activity in textiles and construction has continued at im proved levels. Construction Contracts 3 - mo. moving avg. * Cotton consumption, an important indicator of textile activity, increased suffi ciently further in June to recover almost the March level, the highest volume of the current period of business expansion. The latest three-month average of construction contracts declined as a drop in the nonresidential components more than offset a further rise in residential contracts. u* Electric Power Production In recent months, factory p ayrolls have contributed little to boosting personal income. In June, however, payrolls did inch up because a rise in the number of workers more than offset the effects of a decline in the average work week. Lately, total personal income appears to have expanded more slowly than earlier this year in all states except Mississippi. v* v* Cotton Consumption Spending, w hile at a high level, lacks the oomph it demonstrated last spring. Department store sales, according to preliminary figures, rose Dept. Store Sales during July but failed to regain the record high of March. Sales at furniture stores advanced slightly in June, but also remained below volumes reached earlier in the year. Sales at household appliance stores remained virtually unchanged. Bank debits, a measure of checkbook spending, recovered sharply from the previous month’s decline to a level somewhat above April’s. ^ Bank Debits Consumers continue to add to their debts as w ell as to their savings. In June, consumer credit outstanding at District commercial banks rose for the fifth consecutive month, reflecting increased borrowing for the purchase of automobiles and for personal use. The pace of consumer saving remained high. )S ]S The overall farm economy has recently been doing w ell, but inade quate rain in m any localities dims the outlook for crops. Higher prices Member Bank Loans Member Bank Deposits P E R C E N T O F R E Q U IR E D RESERVES Excess Reserves Borrowings from F. R. Bank i T*l rw f?T*? 1961 posted in July for beef, eggs, broilers, and hogs has probably lifted the index of prices received by farmers slightly. Meanwhile, farm marketings have picked up as harvests of tobacco and summer vegetables and some field crops have gathered headway. Livestock marketings have declined somewhat, however, as broiler shipments were curtailed. The hot, dry weather that prevailed in many localities in July has had an adverse effect on prospective crop yields. Loan expansion, which has been underw ay since m id-1961, resumed in June after a brief interruption in M ay. The rise was dominated by gains at banks in Florida. During July, however, loans at member banks in leading cities declined. Since April, the expansion in deposits at all mem ber banks has fallen short of the pace maintained in the first four months of the year, partly because time deposit expansion slowed. N o te: D ata on which statements are based have been adjusted to eliminate seasonal influences.
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