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Atlanta, Georgia August A ls o in • t h is 1964 is s u e : ^fcGOTIABLE CD's: STILL NOT TOO POPULAR AT LARGE DISTRICT BANKS District Autos: The Guessing Game During the months of August and September, leaders of the auto industry appear, much like Old Testament prophets, uttering pronouncements about the future, in particular the future sales of the new car models. Although this annual exercise of prophetic expertise has not been noted for its extreme accuracy, the occasion does serve to focus attention on one of the strategic sectors of the District’s economy: The automobile market. Realizing that many auto dealers and consumer credit specialists are already indulging in the guessing game on the future sales of the new models in the District, this discussion on current new car sales, growth in the District’s stock of autos, and auto credit trends may serve as a possible aid for this season’s gamesmanship. A Review SIXTH DISTRICT STATISTICS DISTRICT BUSINESS CONDITIONS The present health of new car sales appears robust when measured by the daily average sales of new automobiles in the District states of Ala bama, Florida, Georgia, Louisiana, Mississippi, and Tennessee. As the chart’s solid line representing the four-month moving average discloses, new automobile sales in the District states started upward soon after the turnaround in general business activity in February 1961. The pace of new car sales rose sharply through late 1962, when unit sales of new cars topped the previous record set during the summer of 1955. Despite erratic movements since late 1962, new car buying has continued to New Car Sales in Sixth District States ffeetve jS lm ta Source: R. L. Polk and Co. Further use prohibited without Polk’s permission. Note: The shaded areas represent the recessions of 1953-54, 1957-58, and 1960-61. trend upward during 1963 and early 1964, and latest figures for May indicate a new record for that month. The behavior of new auto sales during the recent past is extraordinary in a sense because it is the first time the District states have been able to put two good sales years, 1962 and 1963, back-to-back. Furthermore, if calendar 1964 lives up to industry expectations, it will mark the third straight year of sales expansion. Is it a mere coincidence that the extended boom-level of auto sales of the past two and one-half years has coin cided with one of the largest peace-time business expan sions? Probably not. Auto buying is extremely sensitive to general business conditions and, because of their wide spread feedback effect on many industries and activities, auto sales and output have had an important influence on the course of total business activity, particularly in the short run. The recessions of 1957-58 and 1960-61, shown by the shaded portions of the chart, were accompanied by plum meting new car sales, while the expansions that followed were given a powerful assist by a strong upswing in auto spending. Although the cyclical performance of auto sales during the mid-Fifties does not parallel the business cycle turning points as well as it does in the later period, this may be explained in part by the extraordinarily high sales of 1955, when liberalization of credit terms coupled with intense industry competition may have “borrowed” sales from the next few years. Also, auto sales during the early Fifties were pinched by the credit restrictions of Regulation W, as well as by production restrictions neces sitated by the Korean War. While unit sales of new cars in the District states were almost 10 percent higher during the first five months of 1964 than in the same period a year ago, gains varied con siderably among states. For example, Alabama and Florida have registered year-to-year percentage gains exceeding 15 percent during the first five months of 1964, while sales in Louisiana during the same period have barely kept pace with last year’s volume. Diversity among District states is not just a recent phenomenon. At the beginning of the 1950’s, annual new car sales ranged between 50,000 for Mississippi and ap proximately 115,000 for Florida, Georgia, and Tennessee. Now, thirteen years later, new car sales in Florida have more than doubled, while sales in Louisiana and Georgia have advanced 35 and 31 percent, respectively. New car sales during this same period rose 28 percent in Alabama and 12 percent in Tennessee. Volume in Mississippi was only slightly higher in 1963 than in 1950. The faster growth of new auto sales in some District states during this thirteen-year period appears to be tied closely to their rates of growth in population and total personal income. For example, growth of new car sales in Florida during the 1950-63 period was accompanied by a population explosion that roughly doubled that state’s number of inhabitants and an increase in total personal in come that tripled the 1950 level. In contrast, the 3-per cent gain in new auto sales during 1950-63 in Mississippi was accompanied by a population rise of only 5 percent and the smallest percentage increase in total personal in come of all District states during this period. Auto Ow nership by Household, as a Percentage of All Households, 1960 None 1 auto available 2 autos available 3 or more autos available Total Ala. Fla. Gci. La. 28.3 50.8 18.5 18.7 57.7 21.0 25.8 51.9 19.8 29.7 50.4 17.7 2.4 100.0 2.6 100.0 2.5 100.0 2.2 100.0 Tenn. Six States 33.4 49.9 14.8 25.0 56.6 16.7 25.5 53.6 18.6 21.6 56.9 19.0 1.9 100.0 1.7 100.0 2.3 100.0 2.5 100.0 Six States U. S. 7.8 17.4 33.3 29.7 8.4 19.0 34.2 27.2 11.8 11.2 Miss. U. S. Source: U. S. Census of Housing, 1960. Age Distribution of Auto Stock A s o f J u ly Ala. 1 year-old cars 2-3 years 4-7 years 8-11 years 12 or more 6.7 14.8 31.5 33.3 13.7 Fla. 8.1 20.3 35.8 26.2 9.6 Ga. 8.3 17.2 31.6 30.2 12.7 1, 1963 La. Miss. Tenn. 8.1 6.6 8.1 17.9 35.4 28.1 10.5 14.7 30.8 34.4 13.5 16.0 31.9 31.2 12.8 Source: Federal Reserve Bank of Atlanta and R. L. Polk and Co. Further use prohibited without Polk’s permission. .2 • Luxury and Foreign Cars For those guessing ahead about the specialized auto mar kets, we have only to look at the recent sales of luxury cars to dispel the myth that the six-state area is largely the dumping ground for second-hand “junkers” and stripped-down versions of the new low-priced models. About 10 percent of the highest-priced domestic autos— Cadillacs, Imperials, and Lincolns— sold in the U. S. last year were bought by District residents. As a percentage of total new car sales in the District states, market penetra tion for these three makes was 2.6 percent, only frac tionally below the U. S. figure of 2.7 percent. Florida, however, was the only District state in which sales pene tration of these highest-priced autos was significantly higher than in the U. S. Another favorite of District auto buyers during recent years has been the foreign car. During 1962, 1963, and early 1964, residents of District states acquired about 12 percent of the total number of foreign cars sold in this country. Furthermore, foreign car sales accounted for al most 6 percent of all new cars sold in the six-state area but for only slightly more than 5 percent in the U. S. Residents of Florida and, to a lesser degree, of Georgia and Alabama have been buying proportionately more foreign cars than have U. S. residents. In Florida, for in stance, almost 8 percent of all new cars purchased during 1963 were foreign cars. Growth in Auto Stock The growth in the District’s total auto stock has been more rapid than that of the U. S. since the end of World War II. According to the U. S. Bureau of Public Roads, the number of passenger cars in the U. S: doubled during the 1948-62 period, rising from 33 million cars in 1948 to about 66 million cars in 1962. During this same period, total passenger registrations in the District states jumped from 2.7 million in 1948 to 7.5 million in 1962. This more rapid expansion in the total stock of pas senger cars has narrowed the gap between the U. S. and District states in cars per 1,000 population. In 1950, there were 204 passenger cars per 1,000 population in the District states and 263 cars in the U. S. By 1962, this difference had narrowed to 338 cars for the District states and 351 cars in the U. S. Thus, a gap of only 13 cars per 1,000 population remained in 1962. The growth and diffusion of District auto ownership are brought into focus by the 1960 Census of Housing. In the District states, 75 percent of all households, includ ing unmarried persons with separate living quarters, owned or leased at least one auto. About 21 percent of the house holds had two or more autos. This compares favorably with the U. S. figures of 78 percent and 21 percent, re spectively. Individual states offer sharp contrasts, however. Florida clearly is the most affluent auto market, with less than 19 percent of the state’s households having no auto available. It may surprise some persons that as many as 2.3 percent of the households in the District states own three or more autos, compared with 2.5 percent in the U. S. The breakdown on auto ownership for urban and rural households indicates that while somewhat fewer urban households in the six states own autos compared with U. S. urban households, it is the low rate of auto owner ship of the District’s rural households that pulls down the District states’ overall rate. About 35 percent of Mis sissippi’s rural households do not own an auto, com pared with 26 percent for the six states combined and 15 percent for the country as a whole. Only Florida among the District states has a rural auto ownership pattern that compares favorably with that of the U. S. Despite the area’s participation in the luxury and foreign car markets and the relatively close distribution of auto ownership for the combined six states, many may say that these figures overstate the affluence of the District’s auto market. Some believe, for example, that the District states have a disproportionate share of the older “junkers” and fewer of the new car models. There is some truth in this view— and considerable error also. The District does have fewer one-year-old models, as a percentage of its total stock of cars, than does the U. S., but the difference is less than one percent. Again, it is the close similarity between the age distribution of the Dis trict’s auto stock and that of the U. S. and the wide diver gency among the District states that stand out most prom inently. As before, Florida and Mississippi offer the sharp est contrasts as the states with the newest and oldest cars. Guessing and Credit At the beginning of the article it was noted that auto dealers were not the only group keenly interested in the future course of auto sales. District consumer credit specialists at commercial banks and consumer and sales finance companies also follow auto sales closely. This interest is readily understandable. Auto credit is not only affected by auto sales, but credit itself exerts an influence on auto spending through shifts in maximum allowable maturities of auto loans and down payment policies. Have there been any significant shifts in credit terms for new autos that would influence future auto sales as did the abrupt lengthening of maturities in 1955? Ap parently not as far as the District’s commercial banks are concerned. Thanks to the high level of used car prices, which permits a higher trade-in allowance, a larger pro portion of new cars have been financed with smaller loans, relative to the dealer cost of the auto, than at any time in recent years. As far as auto loan maturities are concerned, there has been no significant shift in either the average length of direct bank loans or of loans that banks purchased from car dealers. During 1962, District banks did sweeten the maturities of their direct buyer loans in the 31-36 month range, but this appears to have been* in response to the competition of sales and consumer finance companies. A spot check of District banks reveals delinquency of auto loans is at the lowest level in recent years. The accompanying chart showing the volume of new auto loans at District commercial banks and sales of new autos in the District states emphasizes that, regard less of which is the dominant influence, when auto sales and auto loans turn, they turn together. Thus, both have been subject to the same relative cyclical influences during (Continued on Page 6) •3 • Negotiable CD’s: Still Not Too Popular A t Large District Banks Negotiable time certificates of deposit issued by commer cial banks, or CD’s as they are popularly known, are a lively conversational gambit in financial circles. Some people are troubled by the rapidly growing use of this form of time deposit. What worries them is that some banks, in order to pay the relatively high rates on these certificates, might be tempted to put their funds into risky loans or nonliquid investments and then run into trouble. Other observers have endorsed the development of CD’s, partly because this device has helped banks com pete with other financial institutions for short-term funds. When knowledgeable people find themselves at op posite poles of an argument, as they have in this one, there is often more to the subject than meets the eye. This is no doubt true with respect to negotiable CD’s be cause they are still in their infancy and bank practices regarding them are still undergoing change. To learn first hand how District bankers handle CD’s, we have examined their statistical reports and have also contacted many of the larger banks— those that offer CD’s and those that do not— to determine their policies on them. Old Hat or New? Although heralded as an innovation, time certificates of deposit, which are essentially receipts for money left with a bank for a definite period of time at a specified interest rate, have been issued in small amounts by various banks in this and some other regions for many years. However, only recently have many become marketable. Now, the original holder can usually sell the larger CD denomina tions if he wants his money before maturity. Widespread issuance of CD’s in denominations large enough to be marketable began in 1961 when several New York banks started to issue CD’s to corporations and several Government securities dealers began buying and selling them. Heretofore, these banks had not ac cepted time deposits from corporate accounts. The result of these actions has been a dramatic increase in the total volume of negotiable certificates of deposit from about $1 billion at the end of 1960 to over $11 billion at the present time. Rapid Growth on the Surface . . . At first glance, the growth of CD’s in this District is just as impressive. By late 1962, certificates of District banks surveyed at that time had quadrupled in the short span of two years. In the last six months alone, those issued in denominations of $100,000 or more by banks in lead ing cities climbed nearly 50 percent. Furthermore, more and more District banks have shown an interest in CD’s. According to the same survey, it has been the larger rather than the smaller banks that have increased their CD’s at the fastest rate. In this respect, the regional and national trends are identical. . . . but Less Im pressive in Perspective It would be a mistake to exaggerate the importance of negotiable time CD’s in this District. Of the banks from which we receive statistical reports, the number issuing negotiable CD’s is still not large. In late 1962, the last complete survey of banks believed to engage in this activity turned up only 19. Even now, two-fifths of the 27 large weekly reporting banks in leading cities do not issue negotiable CD’s in denominations of $100,000 or over, and this group includes some of the very largest banks in this region. This number has remained almost unchanged for six months. While there are numerous smaller banks that offer CD’s, many of them are believed to be savingstype time deposits that are not marketable, even if negotiable in form. Even banks that are reasonably active in negotiable time CD’s have generally not gone into this field on a very large scale. At the banks in leading cities, the total amount of negotiable CD’s outstanding, which comes to almost $300 million, represents about 7 percent of the issuing banks’ deposits. This, of course, is an average figure that tends to obscure the much greater importance of CD’s at some institutions. Still, the total of CD’s issued by banks in leading District cities accounts for only 2 per cent of all CD’s outstanding in the nation, a much smaller proportion than their share of total deposits. Less Competition for Corporate Accounts Why have District banks moved more hesitantly into this field than has the banking industry at large? The answer, in part, is that they have attracted fewer corporate and other business purchasers, the group to which the largest banks, nationally, have issued most of their CD’s. This is not to imply that District banks have not issued CD’s to large national corporations. They have, but on a smaller scale than the very largest banks in New York and some other places. The reasons are these: First, some of the giant national companies apparently prefer CD’s from the very largest banks located in New York and several other cities. This is perhaps not so much related to different evaluations of bank soundness as it is to the greater marketability of certificates issued by the large banks. Willingness by smaller banks to pay a higher rate could overcome to some extent the more limited marketability of their certificates. But, since the rates paid by the very largest banks on all but short maturity CD’s are already at the ceiling permitted under Regulation Q, the smaller banks cannot compete on the rate beyond the shorter end. Nevertheless, many bankers questioned on this point doubted that it had been a significant factor in deterring the very large national corporations from giving them their CD money. Often paying the same rate as the New York banks, large District banks, with some exceptions, . 4 . Volume of Time Certificates of Deposit Millionsof Dollars Millionsof Dollars S in c e 1 9 6 1 , t h e a m o u n t o f n e g o t ia b le c e r t if ic a t e s o f d e p o s it is s u e d b y S i x t h D is t r ic t b a n k s h a s m u lt ip lie d s e v e r a l t im e s o v e r . Negotiable Time Certificates of Deposit* III! 1 , 1 9 6 4 have not aggressively solicited their business because most of these companies ordinarily do not keep large demand balances with them. To many District bankers, offering CD’s to these companies would run counter to the prin ciple of the old-fashioned, bank-customer relationship. Indeed, it is for these same considerations that various banks do not like their certificates traded in the secondary market and, through different devices, have actually dis couraged it in some instances. Although most of the District banks’ certificates are above the minimum trading unit of $100,000, not too many have actually been traded. Another principle a good many banks follow is to issue CD’s to customers only within their service areas. Also, a lot of them have not issued CD’s to correspondents and have not purchased them from other banks. Local and regionally-headquartered companies have been fairly important customers of District banks, but their most important ones have been state and local governments, and understandably so. Governmental units usually have a policy of keeping idle funds within the same city or state. Sometimes, they allocate this money among several local banks from which they might buy CD’s at a rate of so many basis points above the U. S. Treasury bill rate or on some other basis. Primarily, this CD money, like that issued to corpo rations, is of fairly short maturity. Close to three-fourths of the outstanding CD’s have maturities of five months or less, according to a survey of banks in leading cities made in May 1964. In this respect, practices in this region do not differ from those elsewhere. W hy Offer CD's A nyw ay? S t i l l , b a n k s in le a d in g c it ie s o f t h e A t l a n t a F e d e ra l R e s e r v e D is t r ic t a r e n o t a s d e e p ly c o m m it t e d t o t h e u s e o f c e r t i f i c a t e s a s t h o s e in m o s t o t h e r s e c t io n s o f t h e c o u n t r y . Holdings of Time Certificates of Deposit * District D ecem ber S , 1 9 (2 United States *lndenominationsof $100,000andover. T h e r e a s o n f o r t h is is t h a t D is t r ic t b a n k s h a v e b e e n le s s a g g r e s s i v e in o f f e r in g C D 's t o c o r p o r a t io n s , w h ic h h a v e b e e n b y f a r t h e c h ie f b u y e r s o f C D 's n a t i o n a l l y . What then has prompted many a District banker to offer CD’s? In some cases, it is to discourage his customers from withdrawing their demand balances or investing idle funds in short-term investments. CD’s have been a de fensive maneuver for many of them. However, some, including a very small number that have aggressively issued CD’s, claim they have received additional de posits this way. Others have regarded them as simply another service that they are able to render if their cus tomers are interested. Banks refusing to issue CD’s have generally done so only after giving the matter the most careful attention. Considering CD’s to be “hot money,” many of them think it is improper for banks to rely on this device as a source of funds. They believe that these funds cannot be profitably employed except in long-term loans and in vestments and that they might have difficulty selling additional CD’s or “rolling over” maturing ones if short term rates rise and the present maximum rates on time deposits were left unchanged. Many banks surveyed apparently pay close attention to the maturity of their certificates, often staggering them. However, even those banks that have made no attempt to stagger maturity dates, ordinarily set by the buyer, seem to have had no difficulty in replacing or renewing CD’s scheduled to mature. Contrary to occasional large CD runoffs in other areas of the country, the total amount outstanding at leading District banks has declined infre quently this year, and then only insignificantly. The issuing District banks surveyed have reported that • 5 • they have been able to earn money on CD’s without sacrificing good banking practices. Much of this money is said to have gone into construction loans, short-term municipals, and consumer loans. Yet there have been instances where banks, to get an adequate return on this money, sacrificed liquidity by investing it in long-term loans and securities. At this time, the facts presented fail to uncover serious problems with respect to CD’s in this District. The situa tion could change, however, if the region’s banks should decide to plunge headlong into this still untried money market instrument and put aside good banking practices. H arry B r a n d t DISTRICT AUTOS (Continued from Page 3) the 1950’s. Looking to the future, we see that with the exception of the dip in the third quarter of 1963, new car sales and bank auto loans have been trending upward steadily since the end of the 1960-61 recession. Will these parallel lines continue their upward movement throughout 1964 and 1965? Many District auto dealers and bank auto lenders think so. But this, of course, is the big question of the guessing game season of 1964. J ack l CoopER Bank Announcements On July 1, the C r y s t a l R i v e r B a n k , Crystal River, Florida, a n o n m e m b e r bank, began to rem it at p a r for checks draw n on it when received fr o m the F ederal R e serve Bank. Officers include G eo rg e H. Brannen, Presi dent; W . H a rvey E dwards, Vice President; Vinel S. Lewis, E xecu tive Vice President; and B row n D u m a s, Jr., Cashier. The F i r s t N a t i o n a l B a n k o f D e B a r y , DeBary, Florida, a newly organized m e m b e r bank, op en ed for business on July 1 and began to rem it at par. Officers are A lb e rt J. G ow an, Chairman of the Board; N e w e ll E. H awkins, President; M itch ell M o n r o e Morris, Vice Presi den t and Cashier; an d Samuel E. Faron, Jr., Vice Presi dent. Capital is $3 00 ,0 00 , and surplus and other capital funds, $1 50 ,00 0, as repo rted by the C o m p tro ller of C u r rency at the time the charter was granted. On July 1, the V o l u n t e e r -S t a t e B a n k , K n o x v ille , Tennessee, a new ly organized n o n m em b er bank, open ed fo r business and began to rem it at par. Officers include A sto n K en n ed y, President; L. B. H egidio and J. M . Stooksbury, Vice Presidents; and O. Earl K im se y , Jr., Cashier. Capital is $6 00 ,00 0, and surplus and un divided profits, $900,000. The F i r s t S t a t e B a n k , Wrens, Georgia, a new ly or ganized n o n m em b er bank, op en ed for business on July 6 and began to rem it at par. The C l e a r w a t e r B e a c h B a n k , Clearwater, Florida, a new ly organized n o n m em b er bank, o pen e d for business on July 8 and began to rem it at par. Officers are Joel R. Lane, President; Joseph F. Cornelius, E xecu tive Vice President; C. E. R enfroe, Jr., an d H arry W. Shepard, Vice Presidents; an d F. W. Killenberger, Cashier. Capital is $3 00,000, an d surplus and undivided profits, $1 35,000. On July 22, the V a l p a r a i s o S t a t e B a n k , Valparaiso, Florida, a n o n m em b er bank, began to rem it at par. O f ficers include C. W alter Ruckel, Chairman o f the Board; R andall P. R oberts, President; M . P. Ruckel, Vice Presi dent; H a r o ld J. Harrison, Cashier; a nd Joe M . Glenn, A uditor. Debits to Demand Deposit Accounts In s u r e d C o m m e r c ia l B a n k s in t h e S i x t h (In Thousands cf Dollars) D is t r ic t Percent Change Year-to-date 6 Months June 1964 from iq f ,4 May June from 1964 1963 1963 June 1964 May 1964 June 1963 STANDARD METROPOLITAN STATISTICAL AREASf Birmingham . . . 1,145.964 57,327 Gadsden . . . . 155,635 Huntsville . . . 399,311 Mobile . . . . 233,287 Montgomery . . . 77,566 Tuscaloosa . . . 1,096,793 56,386 134,932 393,586 240,446 73,673 988,387 50,526 125,150 351,379 211,186 62,374 +5 +2 +15 +1 —3 +5 + 16 +13 +24 +14 + 10 +24 + 10 + 10 +23 +7 +6 +8 397,339 1,093,233 1,569,550 462,327 149,980 358,452 944,393 1,410,304 415,831 134,041 —2 +7 + 0 +3 +9 +° +24 + 12 +14 +22 + 13 +15 +7 +10 + 12 Ft. LauderdaleHollywood . Jacksonville . . . . Orlando . . . . Pensacola . . . TampaSt. Petersburg . W. Palm Beach Albany Atlanta Augusta* Columbus Macon Savannah . . . . . . . . . . . . . . Baton Rouge Lafayette . Lake Charles New Orleans . Jackson . . . 390,327 1,170,386 1,573,560 474,761 163,404 999,693 296,867 971,352r 330,652 841,993 270,394 +3 — 10 +19 + 10 67,972 3,110,023 150,384r 157,399 181,119 217,861 60,334 2,845,426 138,923 135,240 159,434 180,975 323,156 76,666 82,091 1,628,233 +1 +5 +23 + 13 —4 +4 + 14 +15 +33 +32 +9 +25 +7 +3 —6 +7 + 13 + 10 +9 + 22 +10 + 10 +10 +7 +9 + 16 +8 + 11 +5 +9 +5 + 12 . . 68,770 3,269,880 184,358 178,496 174,131 225,938 . . . . . . . . 365,680 84,635 89,812 1,984,221 341,838 82,039 95,873 1,857,363 . . . . . . 426,784 423,105 408,005 353,779 1,038,374 + 1 +7 +6 —1 + 12 438,096 373,371 1,027,589 356,454 393,571 328,908 936,341 + 20 Chattanooga . . Knoxville . . . Nashville . . . . +11 + 14 + 10 +9 +8 +15 OTHER CENTERS Anniston . . . . Dothan . . . . S e lm a ......................... 51,892 44,883 34,018 51,410 45,696 37,047 47,396 39,505 28,570 +1 —2 —8 +9 + 14 + 19 +7 +7 + 15 26,878 54,303 184,599 71,411 28,260 46,348 155,425r 65,803 21,875 45,746 126,750 63,161 —5 + 17 + 19 + 9 + 23 + 19 + 46 + 13 + 12 +4 +33 +8 . 58,675 65,237 20,201 78,039 47,439 17,184 241,170 79,237 87,359 534,674 49,801 59,123 61,281 19,989 90,881 45,883 15,629 231,742r 86,256 87,242 519,596 49,755 50,080 59,744 17,216 78,375 42,488 14,618 204,391 79,515 75,786 446,093 38,820 —1 +6 +1 — 14 +3 + 10 +4 —8 + 0 + 3 +0 + 17 +9 + 17 —0 +12 + 18 + 18 —0 + 15 + 20 +28 +9 + 14 + 11 + 4 +5 +5 +9 +6 + 10 +10 +14 Athens . . . . Brunswick . . . Dalton . . . . Elberton . . . . Gainesville . . . Griffin . . . . LaGrange . . . . Newnan . . . . R o m e ......................... Valdosta . . . . 55,336 39,567 69,341 13,353 58,265 25,033 19,890 23,810 63,488 41,008 51,356 34,770 76,236 10,620 59,215 25,375 18,151 22,058 56,587 42,796 46,524 30,208 58,159 10,663 56,793 21,583 16,453 22,120 51,565 33,733 + 8 + 14 —9 +26 —2 —1 + 10 +8 t^ 4 + 19 +31 + 19 + 25 +3 + 16 + 21 +8 +23 +22 +10 + 10 + 22 + 10 +5 +9 + 12 +7 + 14 + 11 Abbeville . Alexandria Bunkie . Hammond New Iberia Plaquemine Thibodaux 9,164 96,887 5,125 26,487 29,079 8,241 19,440 7,665 87,844 4,765 31,360 35,826 7,459 17,265 7,081 85,235 4,657 23,428 22,903 6,676 15,572 +20 + 10 +8 — 16 -1 9+ 10 + 13 +29 +14 + 10 +13 +27 +23 +25 +9 + 11 +2 +8 + 21 + 17 +12 Bartow . . . Bradenton . Brevard County Daytona Beach Ft. MyersN. Ft. Myers Gainesville . Key West . Lakeland . . . St. Augustine St. Petersburg Sarasota . . . Tallahassee . Tampa . . . Winter Haven . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,972 41,593 31,303 55,045 29,482 66,247 41,001 29,920 55,143 30,595 65,063 37,331 27,199 46,659 27,360 + 16 + 1 +5 —0 —4 + 18 +11 + 15 +18 +8 +8 + 6 +9 + 2 + 12 . . . 46,514 30,913 24,448 44,795 27,190 22,993 35,463 23,427 23,050 +4 + 14 +6 +31 +32 +6 + 10 + 13 + 11 Bristol . . . . Johnson City . . Kingsport . . . 55,962 61,501 111,129 54,101 53,479 106,483 54,492 50,746 86,405 +3 +15 +4 +3 +21 + 29 —3 + 13 + 14 21,847,316r 19,586,346 +4 +16 + 10 2,646,812 6,039,000 4,766,336 2,787,840 866,096 2,480,262 +5 +2 +5 +6 +3 +3 +19 +14 + 16 + 19 + 19 +12 + 11 +9 +7 + 11 + 11 + 12 353,800,000 329,600,000r299,600,000 +7 + 18 +11 Biloxi-Gulfport Hattiesburg . Laurel . . . Meridian . . . Natchez . . . PascagoulaMoss Point Vicksburg . Yazoo City . . . . . . . SIXTH DISTRICT, Total 22,703,294 Alabamat . Floridat . . . Georgiat . . . Louisianaf** Mississippif** Tennessee*** U.S., 344 Cities . . . . . . . . . . . . 3,151,455 6,912,482 5,508,661 3,328,627 1,033,271 2,768,798 2,992,835 6,763,681r 5,241,352r 3,147,638 1,003,176 2,698,634 * Richmond County only. **Includes only banks in the Sixth District portion of the state. fPartially estimated. r Revised. •6 • S ix t h D is t r ic t S t a t is t ic s Seaso n ally Adjusted (All data are indexes, 1957-59 Latest Month (1964) One Month Ago Two Months Ago One Year Ago IX T H D IS T R IC T Latest Month (1964) One Month Ago Two Months Ago One Year Ago G E O R G IA \IC0ME AND SPENDING Personal Income, (M il. $, Annual Rate) . Manufacturing P a y r o lls ............................... Farm Cash R e c e ip t s ..................................... Crops .............................................................. Livestock ........................................................ Department Store Sales*/** . . . . Instalment Credit at Banks, * (Mi 1. $) New Loans........................................................ R epaym en ts.................................................. . . . PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................... M a n u fa ctu rin g ........................................... Apparel ........................................................ C h e m icals........................................................ Fabricated M e t a l s ..................................... Food .............................................................. Lbr., Wood Prod., Furn. & Fix. . . . P a p e r .............................................................. Primary M e t a ls ........................................... Textiles ........................................................ Transportation Equipment . . . . Nonmanufacturing........................................... Co n stru ction .................................................. Farm Employm ent.................................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Construction C o n tra c ts * ..................................... R e s id e n t ia l........................................................ All O t h e r .............................................................. Industrial Use of Electric Power . . . . Cotton Consimiption** ..................................... Petrol. Prod, in Coastal La. and Miss.** FINANCE AND BANKING Member Bank Loans* All B a n k s ........................................... Leading Cities ............................... Member Bank Deposits* All B a n k s ........................................... Leading Cities ............................... Bank D e b i t s * / * * ............................... 100, unless indicated otherwise.) . . . . . . May 43,977 143 May 126 May 146 108 July 135p June June June June June June June June June June June June June June June June June June June May June June July July 44,255r 142 156 207 116 144 43,581r 143 137 170 116 139 40,866 133 109 100 116 124 179 173 179 164 182 167 188 164 116 114 136 110 119 104 93 109 102 95 124 116 107 87 3.0 40.5 147 159 136 125 106 171 115 113 136 110 119 104 93 109 103 95 123r 116 107r 82 3.0 40.7 146 147 146 123 104 168 115 113 135 110 119 104 93 109 103 95 125 115 105 79 3.2 40.8 145 152 139 122 102 169 112 111 132 107 112 102 92 107 101 95 118 113 104 86 3.9 40.4 153 149 156 116 lO lr 166 177r 165 173 165 172 161 154 145 144r 132 149 141 136 152 139 133 149 133 125 142 7,721 130 128 124 RODUCTION AND EMPLOYMENT Nonfarm Employment........................................... M an u factu rin g ................................................. IMonmanufacturing........................................... Construction.................................................. Farm Employment.................................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June June June June June June June 117 113 119 124 81 2.1 40.1 117 113 119 122 74 2.2 40.l r 116 112 118 119 73 2.4 40.4 114 110 116 126 73 3.0 39.8 180 153 159 175 149 159 174 145 158 155 138 152 FINANCE AND BANKING Member Bank Loans . . . . Member Bank Deposits . . . Bank D e b i t s * * ............................... L O U IS IA N A INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Manufacturing P a y r o lls ..................................... Farm Cash R e c e ip t s ........................................... Department Store S a l e s * / * * ......................... May June May June 6,398 126 118 118 6,527r 128 153 118 6,406r 126 118 118 6,107 120 116 113 ’RODUCTION AND EMPLOYMENT Nonfarm Employment........................................... June M an u factu rin g ................................................. June Nonmanufacturing........................................... June C o nstruction................................................. June Farm Em ploym ent................................................. June Insured Unemployment, (Percentof Cov. Emp.) June Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June 104 100 104 89 87 3.3 41.1 104 100 105 89 90 3.6 42.1 104 100 104 88 80 3.7 41.8 102 98 103 87 93 4.3 41.9 June June June 165 126 142 159 125 140 158 124 137 147 121 131 : INANCE AND BANKING Member Bank L o a n s * ........................................... Member Bank D e p o s its *..................................... Bank D e b i t s * / * * .................................................. 3,388 153 146 109 3,371r 152 199 105 3,292r 148 130 103r 3,235 140 150 100 108 104 110 101 79 3.4 40.4 107 103 109 97 82 4.1 40.3 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................... M an u factu rin g ................................................. Nonmanufacturing........................................... C o nstruction................................................. Farm Employment.................................................. Insured .Unemployment, (Percent of Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June June June June June June June 118 121 116 118 89 3.4 40.3 118 121 116 118 74 3.7 40.4r 117 120 116 116 76 4.2 40.1 116 117 116 124 91 4.4 40.4 170 139 146 154 133 138 FINANCE AND BANKING Member Bank L o a n s * ........................................... Member Bank D e p o sits*..................................... Bank D e b i t s * / * * ................................................. June June June 195 159 153 194 156 156 198 153 152 172 150 142 5,948r 130 128 107r PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................... June M an u factu rin g ................................................. June Nonmanufacturing........................................... June C onstruction................................................. June Farm Employment................................................. June Insured Unemployment, (Percentof Cov. Emp.) June Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June 108 104 110 101 81 3.2 40.8 108 104 110 101 82 3.2 40.9 174 144 148 170 142 150 June June June F LO R ID A T EN N ESSEE May 12,921 June 171 May 136 June 181 RODUCTION AND EMPLOYMENT Nonfarm Employment........................................... June M an u fa ctu rin g .................................................. June Nonmanufacturing........................................... June C o n stru ction .................................................. June Farm Em ploym ent.................................................. June Insured Unemployment, (Percentof Cov. Emp.) June June Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June June June 12,864r 169 178 173r 12,527r 173 166 164r 11,533 158 88 162 INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Manufacturing P a y r o lls ..................................... Farm Cash R e c e ip t s ........................................... Department Store S a l e s * / * * ......................... May June May June 7,075 143 98 124 7,145r 142 r 123 125 7,139r 142 117 115 6,585 134 103 115 125 127 125 100 87 2.7 41.2 124 127 124 97 89 2.6 41.1 123 127 122 97 88 2.6 41.9 119 121 119 94 87 3.3 40.8 PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................... M an u factu rin g ................................................. Nonmanufacturing........................................... Construction................................................. Farm Em ploym ent.................................................. Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . June June June June June June June 116 119 115 143 93 3.3 40.1 116 118 115 146 89 3.5 40.5r 116 118 115 140 84 3.9 40.5 112 115 111 132 90 4.6 40.1 180 144 145 177 142 153 173 141 153 151 134 140 FINANCE AND BANKING Member Bank L o a n s * ........................................... Member Bank D e p o sits*..................................... Bank D e b i t s * / * * ................................................. June June June 176 145 147 174 142 155 173 141 154 159 136 146 *For Sixth District area only. Other totals for entire six states. **Daily average basis, Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. 8,269r 143 122 125 May June May June 6,056r 132 136 117r INANCE AND BANKING Member Bank L o a n s ........................................... Member Bank D e p o s it s ..................................... Bank D e b i t s * * ....................................................... 8,292r 140 116 132 INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Manufacturing P a y r o lls ..................................... Farm Cash R e c e ip t s ........................................... Department Store S a l e s * / * * ......................... 6,001 131 128 120 INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Manufacturing P a y r o lls ..................................... Farm Cash R e c e ip t s ........................................... Department Store S a l e s * * ............................... 8,194 142 113 142 5,685 125 127 112 May June May June FINANCE AND BANKING Member Bank L o a n s ........................................... Member Bank D e p o s it s ..................................... Bank D e b i t s * * ........................................................ May June May June M ISS IS S IP P I ALA BA M A INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Manufacturing P a y r o lls ..................................... Farm Cash R e c e i p t s ........................................... Department Store S a l e s * * ............................... INCOME AND SPENDING Personal Income, (M il. $, Annual Rate) . . Manufacturing P a y r o lls ..................................... Farm Cash R e c e ip t s ........................................... Department Store S a l e s * * ............................... r Revised. payrolls and prod., U. S. All indexes p Preliminary. hours, and un«mp., U. S. Dept, of Labor and cooperating state agencies; cotton Bureau of Mines; industrial use of elec. power, Fed. Power Comm.; farm cash calculated by this Bank. •7 • D IS T R IC T ......... 1........ — i -...................................... Billions of Dollars Annual Rate “Seas. Adj. B U S IN E S S C O N D IT IO N S n the midst of vacations, dog days, politicking, and internationar problem s, the District continues to push into new territory on the economic growth map. As a recognized "grow th region ", it is doing w hat comes n atu rally — adjusting to a slow er pace in some types of economic activity, consolidating gains in others, and reaching for new highs in still others. Strong to buoyant indicators in the a re a s of bank ing, em ploym ent, income, and spending confirm the economy's over all momentum. Vigorous construction activity is proceeding under an overall high volum e of contracts aw arded ea rlie r in the y e a r, w hile some local m arkets absorb the tem porary oversupply of housing and assim ilate other construction. 1^ Increases in Florida ta k e the spotlight in District em ploym ent. Higher construction activity and a less than usual June decline in trade and services employment were special elements of strength in the Sunshine State. Thanks to further total nonfarm employment gains, the insured unemployment rate was below 3.5 percent in each District state in J\me. Manufacturing employ ment was also up and contributed to gains in manufacturing payrolls, which rose in all District states except Alabama and Louisiana. Average weekly hours, though down a trifle, were still higher than during most periods of the current recovery. Industrial use of electric power maintains the steady up trend begun in 1963, while cotton consumption continues to show marked strength. Personal income gains, outpacing the nation's for the first five months of this y e a r, are supporting high-level retail spending. Both Cotton Consumption furniture and department store sales show continuing strength, and indirect financial measures, such as bank debits and the volume of instalment credit outstanding, confirm the consumer’s careful but willing mood. June data in dicate that the volume of new loan extensions remained level with that of the previous month, while repayments rose moderately. The farm sector is contributing its share to the economy's overall growth. Prices for livestock and poultry products have firmed in recent weeks, as marketings receded. Flue-cured tobacco growers were also encouraged when the market opened recently with prices higher than last year’s. Widespread and frequent rains, although interrupting some activities, have benefited cotton, .peanut, and late corn crops. Hay and forage crops also showed improvement. In recent weeks, farm employment has moved higher than it usually does at this time of year. IS' IX Banking activity m easures reflect the good y e a r that this region is enjoying. The strong upward trend of member bank loans of the past three years is being maintained, with the first half of 1964 showing the largest ex pansion of any similar period since 1959. Though more erratic on a monthto-month basis, total deposits have also shown marked growth, setting another new record as of the end of June. Viewing the current 41-month expansion as a whole, a pattern of increasingly creative and aggressive banking is suggested. The greater rate of growth in member bank loans than in deposits is partial evidence. The declining trend of excess reserves as a percentage of required reserves also lends support, while further evidence is to be found in the en hanced competitive position of the District’s banks in the savings market. Borrowings from F. R. Banks y AExcess Reserves .4L*r+ f?T . . 1 1 . r . . 7, .......... J 1962 1963 "Seas. adj. figure; not an index. 1964 N o t e : D a t a o n w h ic h s e a s o n a l in flu e n c e s. sta te m e n ts a re b a s e d h a v e b e e n a d ju ste d w h e n e v e r p o s s ib le to e lim in a t e
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