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q sn G n o Ini s issue: A la b a m a : A C lo s e -U p A n o th e r L o o k a t t h e S o u th e a s t's F e d F u n d s M a rk e t D is tric t B u sin e ss C o n d itio n s A la b a m a : A C lo s e - U p b y B rian D . D itte n h a f e r O n A la b a m a 's a u t o lic e n s e ta g s a p p e a r t h e w o r d s " H e a r t o f D i x i e , " c o n ju r i n g v i s io n s o f s t a t e ly c o t t o n p la n t a t io n s a n d a le i s u r e ly r u r a l li f e . Y o u c a n s t i ll f in d m o d e r n v e r s io n s o f t h is s o c i e t y t u c k e d a w a y in s o m e p a r t s o f t h e s t a t e , b u t f o r t h e m a j o r it y o f A la b a m i a n s , lif e is u r b a n , i n d u s t r ia l , a n d f a s t - p a c e d . W i t h o u t d e n y in g t h e a g r ic u lt u r a l s e c t o r 's im p o r t a n c e to t h e s t a t e 's e c o n o m y , w e c a n s a y t h a t , in r e c e n t y e a r s , t h e " H e a r t o f D i x i e " h a s g r o w n s t r o n g b e c a u s e o f h e r c i t ie s ' e x p a n d i n g in d u s t r ia l a n d c o m m e r c i a l e c o n o m ie s . A la b a m a 's c i t ie s — l i k e o t h e r c i t ie s — p r o v i d e s p e c i a l i z e d s e r v ic e s f o r s u r r o u n d in g a r e a s a s w e l l a s f o r t h e re s t o f t h e s t a t e . F o r e x a m p l e , M o b i le 's p o r t f a c il it i e s s e r v e t h e e n t ir e s t a t e o f A la b a m a a n d p a r t s o f F l o r i d a a n d M is s is s i p p i a s a c o n t a c t w it h t h e w o r l d o f f o r e ig n c o m m e r c e . T h e r e f o r e , b e f o r e a s s e s s in g t h e s t a t e 's e c o n o m y , it is h e lp f u l t o lo o k f ir s t a t t h e s t r u c t u r e a n d e c o n o m ic c o n d i t io n s o f e a c h o f A la b a m a 's m a j o r c i t ie s . B ir m i n g h a m A la b a m a 's la r g e s t m e t r o p o li t a n a r e a is B ir m i n g h a m . Its e c o n o m y w a s b u il t o n p r o d u c in g s t e e l a n d m in i n g c o a l a n d t o d a y h e a v y in d u s t r y s t i ll b u lk s la r g e . B u t d e s p it e its r e p u t a t io n a s a m a n u f a c t u r in g c e n t e r , a n in c r e a s in g p o r t io n o f its in c o m e is e a r n e d in its r o le o f c e n t e r f o r c o m m e r c e a n d in d u s t r y in t h e s t a t e . In 1 9 7 1 , p e r c a p it a w h o le s a l e s a le s in B ir m i n g h a m w e r e t h e h ig h e s t in th e s t a t e ; w h o l e s a l e a n d r e t a il t r a d e c o m b in e d p r o v i d e d 2 0 p e r c e n t o f p e r s o n a l in c o m e . B ir m in g h a m n o w s e r v e s a s t h e c e n t e r f o r w h o l e s a l e a c t i v i t y f o r m u c h o f A la b a m a . T h e s a m e c a n b e s a id f o r b u s in e s s s e r v ic e s , w h e r e B ir m in g h a m r a n k s f ir s t in t h e s t a t e in p o r t io n o f in c o m e e a r n e d . T h e c i t y is h o m e f o r A la b a m a 's la r g e s t b a n k in g in s t i t u t i o n s a n d a B r a n c h O f f ic e o f th e F e d e ra l R e s e rv e B a n k , b o th o f w h ic h c o n t r ib u t e to th e c i t y 's g r o w in g r o le a s a f in a n c ia l a n d b u s in e s s s e r v ic e c e n t e r . N o te : SM SA u n e m p lo y m e n t d a ta are n o t se a so n a lly a d ju s te d . As stu d e n ts e n te r th e in J u n e , t h e u n e m p l o y m e n t r a t e n o r m a l l y ris e s . w ork force M o n th ly R e v ie w , V o l. L V III, N o . 8. Free s u b s c rip tio n an d a d d itio n a l c o p ie s a v a ila b le u p o n re q u e st to th e R e se a rch D e p a rtm e n t, F e d e ra l R e se rv e B a n k o f A tla n ta , A tla n ta , G e o rg ia 3 0 30 3. 118 AUGUST 1973, MONTHLY REVIEW 1970 SMSADefinitions NewSMSA-November 1971 Additions-June 1973 A la b a m a S ta n d a rd M e tr o p o lita n T h is r e v i e w o f A la b a m a 's e c o n o m y f o c u s e s o n S ta tis tic a l A re a s th e O f f ic e o f M a n a g e m e n t a n d B u d g e t o f th e t h e c i t ie s a n d s u r r o u n d in g a r e a s w h i c h a r e E x e c u t i v e O f f i c e o f t h e P r e s id e n t a n n o u n c e d S t a n d a r d M e t r o p o li t a n S t a t is t ic a l A r e a s ( S M S A 's ) , t h r e e c h a n g e s in t h e A la b a m a S M S A d e f i n i t io n s . as d e f i n e d b y t h e U .S . O f f i c e o f M a n a g e m e n t T h e B ir m in g h a m S M S A w a s e x p a n d e d to in c l u d e a n d B u d g e t . T h e r e a r e s p e c i f i c c r i t e r ia b y w h i c h S t . C l a i r C o u n t y in a d d i t io n to J e f f e r s o n , W a l k e r , a n S M S A is d e f i n e d , b u t it c a n g e n e r a l ly b e a n d S h e lb y C o u n t i e s ; M a r s h a ll C o u n t y w a s a d d e d t h o u g h t o f a s a c o u n t y o r c o u n t i e s in w h i c h t h e to t h e H u n t s v il le S M S A , j o i n i n g M a d is o n a n d s u r r o u n d in g c o u n t r y s id e is e c o n o m i c a l l y a n d L im e s t o n e C o u n t ie s . T h e M o n t g o m e r y S M S A w a s s o c i a l l y in t e g r a t e d w it h a c e n t r a l, u r b a n iz e d a r e a . e x p a n d e d to i n c l u d e A u t a u g a C o u n t y a s w e l l a s F r o m t im e t o t i m e , c h a n g e s a r e m a d e in t h e E lm o r e a n d M o n t g o m e r y C o u n t ie s . T h e c h a n g e s c o u n t i e s in c l u d e d in a p a r t ic u la r S M S A a s t h e in d e f i n i t io n s a r e f u r t h e r r e c o g n it io n o f r e g io n a l u r b a n iz e d a r e a g r o w s a n d e c o n o m ic a n d s o c ia l g r o w t h a n d v i t a l i t y w h i c h t h is a r t i c le h ig h lig h t s . in t e r a c t io n s b e t w e e n t h e c e n t r a l c i t y a n d t h e H o w e v e r , t h e s e c h a n g e s c a m e t o o la t e to b e s u r r o u n d in g c o u n t r y s id e in c r e a s e . In J u n e 1 9 7 3 , in c l u d e d in t h e d a t a o n w h i c h t h is a r t i c le is b a s e d . FEDERAL RESERVE BANK OF ATLANTA 119 t o t a l in 1 9 7 1 . B u t it is a ls o a d iv e r s if ie d e c o n o m ic a r e a , s e r v in g s o u t h w e s t A la b a m a a s a c e n t e r f o r w h o le s a l e t r a d e a n d b u s in e s s a n d p e r s o n a l s e r v ic e s . R e t a il a n d w h o l e s a l e t r a d e a c t i v it y a c c o u n t e d f o r a lm o s t t w o - f if t h s o f in c o m e e a r n e d in 1 9 7 1 a n d b u s in e s s a n d p e r s o n a l s e r v ic e s c o n t r i b u t e d 2 2 p e r c e n t , t h e b u lk r e la t in g t o p o r t a c t i v it ie s . T h e g o v e rn m e n t s e c t o r c o n t r ib u t e d 1 5 p e r c e n t o f th e S M S A 's e a r n e d in c o m e a n d is b o o s t e d b y M o b i le ' s p o r t a n d A la b a m a 's s t a t e d o c k c o m p le x lo c a t e d th e re . S h ip b u il d i n g a n d r e p a ir w o r k f o r m a n im p o r t a n t p a r t o f m a n u f a c t u r in g , p r o v i d i n g n e a r ly 3 ,0 0 0 jo b s in m id - 1 9 7 3 . H o w e v e r , o n ly 2 0 p e r c e n t o f t h e t o t a l w o r k f o r c e is in m a n u f a c t u r in g , a n d n e a r ly t w o t h ir d s o f t h e s e jo b s a r e in n o n d u r a b l e g o o d s . M e a s u re d b y e m p lo y m e n t , p a p e r a n d p a p e r p r o d u c t s a r e t h e la r g e s t s in g le in d u s t r y , w it h 7 ,5 0 0 w o r k e r s . T h is in d u s t r y u n f o r t u n a t e ly h a s n o t p r o v i d e d a g r o w in g n u m b e r o f jo b s in r e c e n t y e a r s . A s in t h e n a t io n , t h e im p o r t a n c e o f m a n u f a c t u r in g h a s d e c li n e d in t h e p a s t t w e n t y y e a r s a n d s e r v ic e o r i e n t e d in d u s t r ie s e m p l o y a g r o w in g s h a r e o f th e c i t y 's w o r k f o r c e . I f t h is t r e n d c o n t in u e s , M o b ile B ir m in g h a m w i l l b e le s s v u ln e r a b le to t h e f o r c e s o f Thousands t h e n a t io n a l e c o n o m y t h a n in t h e p a s t . H o w e v e r , m a n u f a c t u r in g s t ill p r o v i d e s 3 0 p e r c e n t o f t h e in c o m e e a r n e d a n d e m p l o y s 2 5 p e r c e n t o f t h e w o r k f o r c e . T h e b u lk is in p r im a r y m e t a ls , s o t h a t , w h e n d u r a b le s a r e d o in g w e l l , B ir m i n g h a m 's u n e m p lo y m e n t r a t e f a ll s . T h e a c c o m p a n y i n g c h a r t s h o w s a d r o p in t h e u n e m p lo y m e n t ra t e a n d r is e in e m p l o y m e n t a s t h e r e c e n t n a t io n a l e c o n o m ic e x p a n s io n g r e a t ly in c r e a s e d d e m a n d s f o r s t e e l a n d o t h e r d u r a b le g o o d s . D e s p it e B ir m i n g h a m 's s t r o n g s h o w in g in d u r a b le g o o d s m a n u f a c t u r in g , it s la r g e s t jo b g a in s h a v e b e e n in s e r v ic e s , r e f le c t i n g t h e a r e a 's im p o r t a n c e a s a c e n t e r f o r t r a d e a n d c o m m u n i c a t i o n . G r o w t h in t h e s e in d u s t r ie s h a s h e lp e d B ir m in g h a m a d d 8 ,0 0 0 w o r k e r s to its p a y r o ll s d u r i n g t h e p a s t 1 2 m o n t h s , B u t it a n d M o b i le ' s o t h e r la r g e in d u s t r y , c h e m ic a l p u ll in g t h e n u m b e r o f u n e m p lo y e d d o w n to a b o u t p r o d u c t s , w e r e g o in g f u l l b la s t in m id - 1 9 7 3 , w it h 4 p e r c e n t o f th e w o r k fo rc e b y M a y 1 9 7 3 . w o r k e r s a v e r a g in g 4 3 - h o u r w o r k w e e k s . G r o w t h in in d u s t r y a n d t r a d e h a s c a u s e d t h e c i t y 's p e r s o n a l in c o m e to e x p a n d r a p id ly in r e c e n t H u n t s v il le y e a r s . P e r c a p it a p e r s o n a l in c o m e g r e w a t a n In 1 9 7 1 , g o v e r n m e n t jo b s d i r e c t l y s u p p li e d 4 3 a v e r a g e a n n u a l r a t e o f 8 .5 p e r c e n t f r o m 1 9 6 9 to p e r c e n t o f e a r n e d in c o m e in H u n t s v i l l e a n d 1 9 7 1 , a c c o r d i n g to U . S . D e p a r t m e n t o f C o m m e r c e c o n t r i b u t e d to m u c h o f its " s e r v i c e " s e c t o r . W h e n d a t a . T h e s t r o n g s h o w in g in e m p l o y m e n t g r o w t h , t h e 1 9 6 7 C e n s u s o f B u s in e s s w a s t a k e n , b u s in e s s a lo n g w it h c o n t in u e d r a p id w a g e g a in s , in d ic a t e s s e r v ic e r e c e ip t s p e r c a p it a w e r e $ 4 2 4 , f o u r t im e s t h a t p e r s o n a l in c o m e r o s e s u b s t a n t i a ll y d u r in g h ig h e r t h a n B ir m i n g h a m , its c l o s e s t A la b a m a r iv a l 1 9 7 2 a n d e a r l y 1 9 7 3 , a lt h o u g h p r e c is e f ig u r e s a r e in t h is r e g a r d . F ir m s s u p p ly in g s e r v ic e s t o N A S A a r e n o t y e t a v a il a b l e . c l a s s if i e d a s " M i s c e l l a n e o u s B u s in e s s S e r v i c e s " in C e n s u s a n d e m p l o y m e n t d a t a . In H u n t s v i l l e , t h is Mobile r e p r e s e n t s a e r o s p a c e r e s e a r c h , in c l u d i n g o f f ic e s A la b a m a 's s e c o n d la r g e s t m e t r o p o li t a n a r e a , a n d r e s e a r c h f a c i l i t i e s o f p r iv a t e c o n t r a c t o r s w h o s e M o b i le s e r v e s a s a n o u t le t to t h e s e a , a n d its m a n u f a c t u r in g f a c i l i t i e s a r e lo c a t e d in o t h e r p a r ts e c o n o m y is b a s e d o n a c t i v it y s u r r o u n d in g t h e p o r t . o f t h e c o u n t r y . T h u s , m a n y o f t h e in d u s t r ie s Its la r g e s t s h a r e o f e a r n e d in c o m e c o m e s f r o m c l a s s if i e d a s b u s in e s s s e r v ic e s a r e t ie d to t h e S M S A 's m a n u f a c t u r in g , a c c o u n t in g f o r 2 6 p e r c e n t o f th e s p a c e a c t i v it y . 120for FRASER Digitized AUGUST 1973, MONTHLY REVIEW a r e a o f A la b a m a a s a c e n t e r f o r w h o le s a l e d is t r i b u t io n a n d b o t h b u s in e s s a n d p e r s o n a l s e r v ic e s . A c c o r d i n g l y , t h e s e s e c t o r s c o m b in e d p r o v id e d 45 p e r c e n t o f t h e a r e a 's e a r n e d in c o m e in 1 9 7 1 — s u b s t a n t i a ll y m o r e t h a n t h e a v e r a g e U . S . m e t r o p o li t a n a r e a . M a n u f a c t u r in g p r o v i d e d o n ly 1 3 p e r c e n t o f M o n t g o m e r y 's in c o m e , w h i l e f a r m e a r n in g s c o n t r i b u t e d a s t ill s i g n if ic a n t 3 p e r c e n t . P e r s o n a l in c o m e g r e w a t a n a v e r a g e a n n u a l ra te o f 1 0 p e r c e n t f r o m 1 9 6 9 to 1 9 7 1 , s h o w in g v ig o r o u s g r o w t h e v e n d u r i n g t h e 1 9 7 0 r e c e s s io n w h e n o t h e r a r e a s o f t h e s t a t e h a d li t t l e o r n o g r o w t h a n d w e r e h it v e r y h a r d b y u n e m p lo y m e n t . M a n u f a c t u r in g , t h e s e c t o r m o s t s e n s it i v e to b u s in e s s r e c e s s io n s , is o f s m a ll im p o r t a n c e in M o n t g o m e r y a n d e x p l a in s t h e S M S A 's c o m p a r a t i v e ly g o o d s h o w in g d u r in g t h e r e c e s s io n . S i n c e t h e n , e m p l o y m e n t h a s g r o w n s t e a d il y , t h o u g h n o t s p e c t a c u l a r l y . F o r e x a m p l e , d u r in g t h e y e a r e n d i n g M a y 1 9 7 3 ,1 ,1 0 0 w o r k e r s w e r e a d d e d to a r e a p a y r o ll s , e x c e e d i n g la b o r f o r c e g r o w t h a n d C o n c e n t r a t i o n o f g o v e r n m e n t a n d s p a c e a c t i v it y in H u n t s v il le h a s b e e n b o t h b le s s in g a n d b a n e t o t h e lo c a l e c o n o m y . T h e d e v e lo p m e n t o f t h e t h e r e b y k e e p in g t h e u n e m p lo y m e n t ra te u n d e r 3 p e r c e n t . S e r v ic e a n d t r a d e e m p l o y m e n t h a s e x p a n d e d , b u t m a n u f a c t u r in g h a s s h o w n lit t le M a r s h a ll S p a c e F lig h t C e n t e r a n d t h e r a c e t o t h e m o o n d u r i n g t h e e a r l y 1 9 6 0 's r e d u c e d t h e f a r m e m p lo y m e n t c o m p o n e n t a n d c a u s e d n o n fa rm e m p l o y m e n t t o s u r g e to a p e a k in 1 9 6 6 . T h u s , g o v e r n m e n t - s p o n s o r e d r e s e a r c h w a s t h e d r iv in g f o r c e b e h in d g r o w t h in t h e la r g e r H u n t s v il le a r e a . S in c e c u t b a c k s in g o v e r n m e n t s p e n d in g b e g a n , H u n t s v il le h a s c o n s t a n t ly s t r u g g le d t o a t t r a c t t h e in d u s t r y n e c e s s a r y f o r e s t a b lis h in g a d iv e r s if ie d lo c a l e c o n o m y . H o w e v e r , o n ly in M a y 1 9 7 2 d id a r e a e m p l o y m e n t c l im b b a c k t o t h e 1 9 6 6 t o t a l. T h e p r o b le m is il lu s t r a t e d b y t h e b e h a v i o r o f g o v e r n m e n t a n d s e r v ic e s e c t o r s t a t is t ic s d u r in g t h e 1 2 m o n t h s e n d in g in M a y . W h i l e t o t a l n o n f a r m e m p l o y m e n t r e m a in e d r e l a t iv e ly s t a b le a t 8 1 ,0 0 0 , g o v e r n m e n t a n d b u s in e s s s e r v ic e s jo b s d e c li n e d b y 1 ,3 0 0 . G r o w t h in o t h e r s e c t o r s w a s n o t e n o u g h to o f f s e t t h is d e c li n e , r e s u lt in g in a n e t lo s s o v e r t h e p e r io d o f 2 0 0 jo b s . U n f o r t u n a t e l y , f u r t h e r c u t b a c k s in F e d e r a l G o v e r n m e n t e m p l o y m e n t a r e s c h e d u le d f o r t h e s e c o n d h a lf o f 1 9 7 3 . D e s p it e t h e s e p r o b l e m s , a r e a g r o w t h c o n t in u e s . F r o m 1 9 6 9 t o 1 9 7 1 , p e r s o n a l in c o m e g r e w a t a n a n n u a l ra te o f 7 .9 p e r c e n t , a f u l l p e r c e n t a g e p o in t h ig h e r t h a n t h e U . S . m e t r o p o li t a n a v e r a g e . T h e g r o w t h in r e c e n t y e a r s . S u r p r i s i n g ly , d u r in g a n e ra u n e m p lo y m e n t ra t e in M a y 1 9 7 3 w a s a r o u n d 4 o f g r o w in g g o v e r n m e n t , a r e a e m p l o y m e n t in t h is p e r c e n t , a s t h e a r e a s t r iv e s t o r e g a in it s g r o w t h s e c t o r h a s h o v e r e d in t h e n e ig h b o r h o o d o f 1 8 ,0 0 0 m o m e n t u m in t h e f a c e o f a d e c li n i n g g o v e r n m e n t a l f o r t h e p a s t f iv e y e a r s . s e c to r. In t h e y e a r e n d in g M a y 1 9 7 3 , jo b g r o w t h h a s o c c u r r e d in e v e r y s e c t o r e x c e p t a g r ic u lt u r e , w h ic h M o n tg o m e ry d e c li n e d b y 2 0 0 w o r k e r s . M a n u f a c t u r in g a d d e d 5 0 0 T h e s t a t e c a p it o l is M o n t g o m e r y , a n d , a s m ig h t b e w o r k e r s , p r im a r i ly in n o n d u r a b l e g o o d s , w h i l e 1 ,3 0 0 e x p e c t e d , d r a w s t h e la r g e s t p o r t io n o f its in c o m e — jo b s w e r e a d d e d in n o n m a n u f a c t u r i n g . D e s p it e a 31 p e r c e n t — f r o m t h e g o v e r n m e n t s e c t o r . 3 8 - p e r c e n t in c r e a s e in v a l u e o f c o n s t r u c t io n M o n tg o m e ry se rv e s th e s o u th e a s t a n d so u th c e n tra l c o n t r a c t s a w a r d e d d u r in g t h e f ir s t f iv e m o n t h s o f FEDERAL RESERVE BANK OF ATLANTA 121 1 9 7 3 , M a y 1 9 7 3 's c o n s t r u c t io n e m p l o y m e n t w a s n o d e c li n e o f 6 0 0 w o r k e r s in d u r a b le g o o d s d u r i n g t h e h ig h e r t h a n in M a y 1 9 7 2 . t w e l v e m o n t h s e n d i n g in M a y . In t h is s e c t o r , o n ly Florence jo b s . B e c a u s e o f a d r o p in t h e w o r k f o r c e , t h e R e la t i v e l y r a p id g r o w t h in p e r s o n a l in c o m e in r e c e n t u n e m p lo y m e n t r a t e t h is s p r in g h a s b e e n a b o u t 5 y e a r s — 9 .2 p e r c e n t a n n u a l l y f r o m 1 9 6 9 t o 1 9 7 1 — p e r c e n t a f t e r a v e r a g in g 5 .5 p e r c e n t d u r i n g 1 9 7 2 . p r im a r y m e t a ls , t h e a r e a 's la r g e s t in d u s t r y , in c r e a s e d s y m b o li z e s t h e o v e r a ll a d v a n c e o f t h e F l o r e n c e T u s c a lo o s a H o m e o f t h e U n i v e r s i t y o f A la b a m a , T u s c a l o o s a 's e c o n o m y r e f le c t s t h e U n i v e r s i t y ' s im p a c t . T h e g o v e r n m e n t s e c t o r p r o v id e s 2 8 p e r c e n t o f th e F lo r e n c e T h o u sa n d s c o u n t y 's e a r n e d in c o m e , p r i m a r i l y b e c a u s e U n iv e r s it y e m p l o y e e s a r e c l a s s if i e d a s g o v e r n m e n t N o t s e a s . adj. - 36.3 - w o r k e r s . M o r e t h a n 1 6 p e r c e n t o f t h e p o p u la t i o n a r e p r o f e s s io n a l o r t e c h n i c a l w o r k e r s o f h ig h s k i l l . Nonfarm Employment - - 34.9 R a p id e x p a n s io n o f t h e U n i v e r s i t y h e lp e d g iv e T u s c a l o o s a t h e h ig h e s t r a t e o f p e r s o n a l in c o m e B - - 33.5 - 32.1 g r o w t h in t h e s t a t e in r e c e n t y e a r s . T h e lo c a l e c o n o m y is d i v e r s i f i e d , w i t h 3 0 p e r c e n t o f in c o m e e a r n e d in m a n u f a c t u r in g a n d 1 2 p e r c e n t e a c h in _ Unemployment Rate /V /V > P e rc e n t V y s e r v ic e s a n d t r a d e . T h e 1 2 .2 - p e r c e n t a n n u a l in c r e a s e in p e r s o n a l in c o m e f r o m 1 9 6 9 t o 1 9 7 1 w a s n e a r ly d o u b le t h a t f o r m e t r o p o li t a n a r e a s in t h e U n it e d S t a t e s a n d e a s i ly e x c e e d e d M o n t g o m e r y 's , its A c lo s e s t A la b a m a r iv a l. M a n u f a c t u r in g e m p l o y s 2 3 p e r c e n t o f T u s c a l o o s a 's w o r k f o r c e . P r im a r y m e t a ls p r o v i d e t h e la r g e s t jo b 1971 1972 1973 s l i c e ; r u b b e r p r o d u c t s a r e a c l o s e s e c o n d . P r o c e s s in g lu m b e r a n d f o o d p r o d u c t s o f t h e g r e a t e r T u s c a l o o s a a g r ic u lt u r a l s e c t o r a ls o p r o v i d e s m a n y f a c t o r y jo b s . S t a t e g o v e r n m e n t h a s b e e n t h e f a s t e s t g r o w in g s e c t o r , b u t a ll h a v e c o n t r i b u t e d t o r e c e n t g r o w t h . a r e a e c o n o m y . U r b a n iz e d S h e f f ie l d , M u s c le S h o a ls , a n d T u s c u m b ia h a v e g r o w n t o g e t h e r a n d w h e n c o m b in e d w it h F l o r e n c e , t h e ir a c r o s s - t h e - r iv e r n e ig h b o r , t h e Q u a d C i t i e s m e e t t h e s i z e a n d o t h e r D u r in g t h e t w e l v e m o n t h s e n d i n g in M a y 1 9 7 3 , t o t a l jo b s r o s e n e a r ly 2 ,0 0 0 , s i g n i f i c a n t l y b o o s t in g t h e S M S A 's e c o n o m y a n d p u ll in g d o w n t h e u n e m p l o y m e n t r a te to 2 .4 p e r c e n t . T h e lo c a l e c o n o m y 's c r i t e r ia f o r d e s ig n a t io n a s a s t a n d a r d m e t r o p o lit a n s t a t is t ic a l a r e a . T h e r e f o r e , F l o r e n c e w a s s o d e s ig n a t e d in N o v e m b e r 1 9 7 1 . C o l b e r t a n d L a u d e r d a le C o u n t ie s , w h i c h c o m p r is e t h e S M S A as d e f in e d b y t h e F e d e r a l G o v e r n m e n t , h a d a p o p u la TUSCalOOSa t io n o f 1 1 7 ,0 0 0 in 1 9 7 0 . Thousands F a r m e a r n in g s s t i ll c o n s t it u t e 6 p e r c e n t o f t o t a l e a r n e d in c o m e , m o r e t h a n f o r a n y o t h e r S M S A in th e s t a t e . T h u s , a g r ic u lt u r e r e m a in s e x t r e m e ly im p o r t a n t to t h e a r e a . Y e t its m a j o r s o u r c e o f in c o m e is m a n u f a c t u r in g , w it h 3 7 p e r c e n t o f w a g e s a n d s a la r ie s o r i g i n a t in g in t h is s e c t o r . M o s t o f F l o r e n c e 's f a c t o r y jo b s a r e in a l u m i n u m o r r e la t e d p r o d u c t s , t ie d to t h e r e l a t iv e ly in e x p e n s iv e a n d p l e n t if u l e l e c t r i c i t y a v a il a b l e f r o m t h e T e n n e s s e e V a l l e y A u t h o r i t y . A l u m i n u m in g o t p r o d u c t i o n , w h i c h h a s a v o r a c io u s a p p e t it e f o r e l e c t r i c i t y , p r o v i d e s r a w m a t e r ia l f o r o t h e r p r o d u c t s r a n g in g Unemployment Rate f r o m w i r e to a u t o m o b ile e n g in e b l o c k s . D e s p it e t h is e m p h a s is o n h e a v y in d u s t r y , o n ly A ** Percent - 3 .5 n o n d u r a b l e g o o d s m a n u f a c t u r in g h a s s h o w n r e c e n t e m p l o y m e n t g r o w t h . T e x t il e s a n d a p p a r e l c o m m o d it i e s h a v e b e e n e s p e c ia l ly e x p a n s iv e t h is 1971 1972 1973 p a s t y e a r , b u t t h is h a s b e e n m o r e t h a n o f f s e t b y a 122for FRASER Digitized AUGUST 1973, MONTHLY REVIEW diversity played a major role in keeping the unemployment rate under 4 percent even during 1970's recession, a very strong performance for an area with a large manufacturing sector. G adsde n As it should be, Gadsden, too, is noted for its manufacturing; manufacturing provided 47 percent of income earned in 1971. Wholesale and retail trade provided the next largest portion— 14 percent — followed closely by services. A dependence on manufacturing makes Gadsden especially sensitive G ad sd e n A/ Thousand s m Unemployment Rate Per* steadily. The expansion in wholesale and retail trade, the largest employment category outside manufacturing, has been a bright spot, and the construction of new shopping facilities is expected to send retail employment even higher in the second half of this year. Putting It A ll Together Alabama's recent economic news has been mostly good. Nonfarm jobs have been growing steadily and at a pace fast enough to cause a decline in unemployment to under 5 percent of the work force during the first half of 1973. This is the first extended period since 1969 during which the rate has been under 5 percent. A soaring national economy has sent demand for Alabama's durable manufactured goods bounding upward with favorable employment results. While the civilian work force was growing by just 10,000 persons, nonfarm jobs grew by 41,000, or 3 percent, during the year ending May 1973. This employment gain was spread broadly, with nearly every industrial sector sharing in the advance. Largest gains have been in the transportation equipment industry, boosting durable goods employment by more than 6,000 workers. This is particularly notable, since this industry has been stagnating since 1969. Growth to swings in the national economy. Between 1969 and 1971, which includes the 1970 recession, total personal income grew at only a 5-percent annual rate. In contrast, from 1965 to 1969 when the national economy was booming, Gadsden's total personal income grew at an annual rate of 11 percent. Manufacturing jobs are concentrated in primary metals and rubber products, particularly tires and tubes. This dependence on heavy industry has meant a relatively high overall unemployment rate in recent years, averaging 7.2 percent in 1972. A booming national demand during the first half of 1973 finally caused manufacturing to expand enough to pull the unemployment rate below 5 percent in early spring. A drop in people seeking work has also been a contributing factor. Following a slight decline during the 1970 recession, nonmanufacturing jobs have grown FEDERAL BAN K OF A T IA N T A Digitized forRESERVE FRASER 123 in nondurable manufacturing has been less robust than in durables but still added more than 2,000 jobs in the past year. The gain in employed people and the higher rate at which they are paid boosted manufacturing payrolls by 13 percent between mid-1972 and mid1973 to an estimated $2.5 billion per month at an annual rate. Average weekly hours worked in manufacturing increased only a fraction, from 41.1 to 41.4, as employees apparently added workers to payrolls rather than schedule much additional overtime. In employment outside manufacturing, where more than half the gains took place, the only drop was in Federal Government jobs. Wholesale and re tail trade were particularly strong as workers made use of expanding income. Business and personal services, meanwhile, were in the vanguard of the economic advance, and contract construction employment made gains reflecting boom conditions in both residential and nonresidential building during 1972. Following the national pattern, the pace of Alabama's residential construction slowed during the first five months of 1973 when compared to the same period of 1972. Commercial and industrial construction, on the other hand, has surged and, in some parts of the state, appears to be rebounding from a rather slow 1972. The net result has been an increase of nearly 27 percent in the value of construction contract awards during the first five months of 1973, a slightly higher rate of gain than that for 1972. thing can be said for 1973. The impact from a booming national economy shows up in many sectors. With demand for Alabama's coal, oil, and gas growing even faster than the national economy, mining income jumped 60 percent during 1972. Durable goods manufacturing payrolls were up sharply, sending manufacturing income up accordingly. Serving more local needs and mirroring a 12-percent gain in manufacturing income, whole sale and retail trade and business and personal services incomes rose at an equal rate. Only the contract construction and government sectors, with personal income gains of 10 and 11 percent, respectively, were less expansive than maufacturing. Alabama farmers also had a good year as their 1972 realized net income increased by 9 percent. Cash receipts from livestock sales led the surge early in the year as prices advanced strongly. Later, crop receipts also joined the spurt, accompanying a substantial rise in cotton prices. In 1973, farmers Income growth is faster than the nation’s. 1967=100 Total Personal Income Sp e n d in g and In co m e s U p Sharply Stimulating the construction of commercial establishments were strongly performing retail sales all of last year and continuing into this one. According to University of Alabama estimates, retail sales for the first four months of 1973 have advanced at a rate in excess of 20 percent over the same period of last year, a pace nearly twice as fast as 1972's. Even drugstore sales, the slowest retail trade sector, rose more than 10 percent. Sales at eating places were up more than 30 percent, followed closely by sales at clothing stores and service stations. Even allowing for rapid price increases, these estimates indicate very impressive gains. This spurt in sales is undoubtedly a direct result of several years of rapidly rising income for Alabamians. For example, during 1972, total personal income increased by 11 percent, and even taking account of inflation, the real income gain undoubtedly exceeded 5 percent. Constituting more than two-thirds of Alabama's personal income, wages and salaries grew by 12 percent. Both of these growth rates are above the national figure for 1972 and, according to early indications, the same Digitized 124for FRASER 1970 1972 seem to be doing even better, since total cash receipts are up 63 percent during the first four months of 1973 from a year ago. Nationally, prices received by farmers jumped 33 percent during the 12 months ending May 1973. At the same time, prices paid by farmers went up less— 10 to 14 percent. Thus, if Alabama farmers follow the national income and cost trends, net farm income should again be up substantially in 1973. Banks Reflect G row th Judging by loan and deposit growth, Alabama member bankers have been enjoying the state's A U G U S T 1973, M O N T H L Y RE V IEW recent rapid gains. During 1972, loans grew by 22 percent and investments by about that much. Deposits were up 19 percent, with time deposits up slightly more than demand deposits. For the year ending in mid-1973, the story is much the same: Total deposits are up 17 percent; time deposits, 21 percent; demand deposits, 12 percent; and loans, 22 percent. Reflecting the high demand for loans and rising yields on business and commercial lending, investment growth is down. Summing Up Alabama's economic future is based on the growth of its cities. A review of the major urban areas' FEDERAL RESERVE BAN K O F ATLANTA economic performances shows growth through diversification. In the past, most Alabama metropolitan areas have been vulnerable to fluctuations in one or two major sectors, and an apparent movement away from such vulnerability is healthy. Employment growth has been steady for the state during the past two years, but erratic for some cities precisely because of changes in a few major industries. As national economic growth continues, Alabama is likely to have an opportunity to attract new industry. If recent trends continue, its urban areas will use the opportunity to diversify their economies and provide a wider base for future growth.* 125 Digitized 126 for FRASER A n t h e F e d by o t h S o e r u L t h F u n d s A r n o ld A. o o k a t e a s t 's M a r k e t D ill Previous studies in this Review have described how the Fed funds market functions in the Southeast. These studies show, in part, that: market participation of Sixth District member banks rose from 5 percent in 1958 to nearly 90 percent in 1972; profit opportunity is the main market lure; the larger the bank, the more likely it is a market participant and a net purchaser of funds; major banks in the ten or so largest cities often stand ready to buy and sell funds in order to accommodate the needs of their smaller correspondents; and District member banks in aggregate were usually in a net sell position but were often in a net buy position in 1966,1969, early 1970, and again after April 1972.1 Rather than comprehensively examining the District market, this note focuses on only a few aspects. Specifically, it provides an insight into the structure of the Fed funds market, measures the degree of market participation by individual banks, and describes this region's long-run and cyclical Fed funds pattern. Fed Funds Behavior To gain insight into the Fed funds market structure, we classified banks into six groups on the basis of market behavior for each year from 1969 through 1972. The first class includes banks that reported substantial transaction volumes and that both purchased (borrowed) and sold (lent) funds every week, or nearly every week of the year. The second consists of banks that both purchased and sold often during the year but on a smaller scale and less often than those in the first class. The third group includes banks that participated frequently in the market but mainly as sellers. The fourth contains banks that purchased frequently but seldom sold. The fifth class is occasional participants, those banks reporting transactions in fewer than twelve weeks a year. Nonparticipants make up the sixth grouping. As shown in Table 1, the majority of District member banks were pre dominantly sellers (class 3) each year, but the number of such banks declined in 1972. Banks in the first and second classes increased sharply between 1969 and 1972, while occasional and nonparticipants (classes 5 and 6) decreased. In recent years, many have entered the market first as sellers and then have begun buying funds with gradually increasing frequency. Very few were found to JFor a general description of how the funds market functions in the District, see Arnold Dill, "Liability Management Banking: Its Practice in the Sixth District," this Review, December 1971. For a detailed study of the structure and characteristics of the District market, see Harry Brandt and Paul A. Crowe, “The Fed Funds Market in the Southeast,” this Review, January 1968. A U G U ST 1973, M O N T H L Y REVIEW TA BLE 1 S ix th D is t r ic t M em ber B a n k P a rtic ip a tio n in th e Fed F u n d s M arket 1969 1970 1971 1972 *Class 1: Class 2: Class 3: Class 4: Class 5: Class 6: Class No. 15 23 24 34 1* % 2.8 4.2 4.3 5.9 Class No. 82 86 96 122 2 % 15.2 15.8 17.1 21.2 Class 3 No. % 282 52.4 361 66.1 374 66.5 365 63.5 Class No. 15 7 5 6 Class No. 86 36 41 39 4 % 2.8 1.3 0.9 1.0 Class 6 5 No. % 16.0 6.6 7.3 6.8 58 33 22 9 All Classc No. % 10.8 6.0 3.9 1.6 538 546 562 575 Purchasing and selling Fed funds in at least 47 weeks of the year and with weekly average purchases or sales of usually $10 million or more. Purchasing in at least 12 weeks of the year and selling in at least 12 weeks of the year (but not necessarily in the same week), but at a frequency or volume of transactions less than banks in Class 1. Selling more frequently than buying and reporting transactions in at least 12 weeks of the year but buying in less than 15 weeks. Purchasing more frequently than selling and reporting transactions in at least 12 weeks of the year but selling in less than 15 weeks. Reporting transactions in less than 12 weeks of the year. Reporting no transactions. be predominant buyers (class 4). Data for the first half of 1973 indicate that there has been a further increase in the number of banks in the first and second classes and a continued decline in oc casional participants. A surprisingly large number qualify as heavy buyers and sellers (class 1). In 1972, 34 banks in 15 large District cities both bought and sold substantial volumes of funds nearly every week, compared with only 15 in 7 cities in 1969. The number of banks, mostly moderately sized, that both purchase and sell funds frequently (class 2) is also large and growing— 122 banks in 1972 compared with 82 in 1969. This indicates that many turn to the market, at least temporarily, to purchase needed funds as well as to dispose of excess and that this number is expanding. However, over 60 percent of member banks were still predominant ly sellers in 1972, though this percentage may have peaked out. In that year, only nine did not participate in the market. M arke t Participation Relatively few banks rely continuously on the market to finance their asset positions. Only twenty have nearly always been in a net purchase position since weekly data began to be collected in early 1969. The number regularly in a net purchase position has been increasing, however; but few of these have relied heavily on the market as a source of funds. The degree of market participation was measured by finding the ratio of interest expenses on funds purchases— net of earnings on funds sales— to total operating expenses. Only a small number ever reported net funds expenses as more than 5 percent of total operating expenses. For example, even in 1969 when money was tight and Fed funds interest rates were high, only 12 did (see Table 2). However, the number reporting high ratios should jump in 1973 because of sharp increases in Fed funds rates FEDERAL RESERVE BANK O F ATLANTA TA BLE 2 Net Fed Funds Expenses as a Percent of Total Operating Expenses No. of Banks 1971 1969 1970 12% or more 10-11 8-9 6-7 4-5 2-3 0-1 3 2 2 5 10 13 20 2 2 2 2 8 6 21 1972 1 1 3 3 7 11 42 0 0 1 3 6 13 26 Note: Figures cover Sixth District member banks reporting positive ratios. Net Fed funds expenses are interest paid on Fed funds purchases minus interest earned on Fed funds sales. TA BLE 3 Earnings on Fed Funds Sales as a Percent of Total Operating Earnings No. of Banks 1969 1970 1971 20% or more 13 15 6 15-19 14 18 14 10-14 34 51 27 5-9 101 154 106 0-4 314 271 383 No earnings 62 37 26 1972 4 6 27 104 420 14 Note: Figures cover Sixth District member banks. and in the number of banks in a net purchase position. The highest ratio reported by an individual bank was, respectively, 28 percent in 1969, 22 percent in 1970, 9 percent in 1971, and 12 percent in 1972. Funds sales, on the other hand, have been an important source of interest income to many banks, especially in 1969 and 1970 when Fed funds rates were high. Sixty-one banks in 1969 and 84 in 1970 reported funds earnings equal to 10 percent or more of total operating earnings (see Table 3).2The 2ln each year, a few new banks that sold funds heavily in the months immediately after opening reported high ratios. 127 Federal Funds Transactions and Rate Bil. $ 2.0 1.0 0 % 10 • F ig u r e s co v e r S ix th D is t ric t m e m b e r b a n k s an d r e p re se n t w e e k ly a v e ra g e s of d a ily fig u re s. number in this category declined in 1971 and 1972, reflecting a decline in Fed funds rates. Because of sharp increases in rates, Fed funds income has become more important this year to those that are regular sellers. Trends and C yclical Behavior Both purchases and sales by District members trended up strongly between 1969 and 1972 (see chart). Gross purchases grew steadily in 1969 and early 1970, leveled off from April 1970 to August 1971, and then grew steadily again. Gross sales fluctuated around the $500-million level in the first eight months of 1969 and then climbed rapidly through April 1971. Since then, sales have been on an upward trend but shown wider swings 1 2 8 for FRASER Digitized than purchases. Sales, moreover, usually reach a low in late summer and a high around year-end or early in the year. In aggregate, District members were a net pur chaser of funds from the rest of the banking system in much of 1969 and in most of the period since April 1972, generally times of high or rising Fed funds interest rates. Conversely, District members were in a net sell position from early 1970 to April 1972 when Fed funds rates were generally low or falling. An earlier article found the District a net purchaser in 1966, a tight money year, and a net seller in the early 1960's, a period of easy money. Over the past ten years, therefore, the District has usually been in a net buy position when money was tight and in a net sell position when money was easy. ■ A U G U ST 1973, M O N T H L Y REVIEW July 9 ,1 9 7 3 E X C H A N G E STA TE B A N K B an k A n n o u n ce m e n ts June 15,197 3 S E C O N D N A T IO N A L B A N K O F H O M E S T E A D Homestead, Florida Opened for business as a member. Officers: Anthony P. Cassinelli, chairman; Paul Mansfield, ]r., president; Robert Swarthout, assistant vice president; George D. Munroe, cashier. Capital, $400,000; surplus and other funds, $600,000. Clinton, Mississippi Opened for business as a par-remitting nonmember. Officers: Edwin Faust, Jr., president; Odie Smith, Jr., vice president and cashier. Capital, $300,000; surplus and other funds, $450,000. July 10,197 3 FIRST S E C U R IT Y B A N K Bradenton, Florida Opened for business as a member. Officers: W. James Tyrrell, chairman; Samuel L. Bender, president; Glen C. Dimon, vice president and cashier; Genevieve C. Roak, assistant cashier. Capital, $600,000; surplus and other funds, $400,000. June 16,197 3 July 13,197 3 U N IT E D C IT IZ E N S B A N K O F CHEATHAM COUNTY A M E L IA IS L A N D B A N K Ashland City, Tennessee Opened for business as a par-remitting nonmember. Officers: Charley Ray Harris, president; Shelton Harrison, chairman. Capital, $200,000; surplus and other funds, $400,000. Fernandina Beach, Florida Opened for business as a par-remitting nonmember. Officers: A. B. Maxwell, Sr., president; Dale P. McKinney, vice president; James M. Horn, cashier. Capital, $400,000; surplus and other funds, $350,000. July 15,197 3 June 26,197 3 T H E W E S T S ID E B A N K O F V E R O B E A C H Vero Beach, Florida Opened for business as a par-remitting nonmember. Officers: Warren D. Haffield, president; Angelo J. Sanchez, vice president and cashier. Capital. $350,000; surplus and other funds, $262,000. T H E PER R Y C O U N T Y B A N K Marion, Alabama Opened for business as a par-remitting nonmember. Officers: Robert R. Frayne, president. Capital, $300,000; surplus and other funds, $300,000. July 17,1973 July 2 ,1 9 7 3 F IRST STATE B A N K O F A R C A D IA A U B U R N B A N K A N D TRU ST C O M P A N Y Arcadia, Florida Auburn, Alabama Opened for business as a par-remitting nonmember. Officers: Kermit Wilson, president; John F. Dunlap, Jr., cashier. Capital, $377,000; surplus and other funds, $377,000. Opened for business as a par-remitting nonmember. Officers: William J. Briscoe, president; James C. Kynett, vice president and cashier. Capital, $275,000; surplus and other funds, $275,000. July 19,1973 July 7, 1973 FENTRESS C O U N T Y B A N K Jamestown, Tennessee Opened for business as a par-remitting nonmember. Officers: Glen Massengill, president; Don Free, vice president and cashier. Capital, $300,000; surplus and other funds, $450,000. F IRST N A T IO N A L B A N K O F P O R T S A L E R N O Port Salerno, Florida Opened for business as a member. Officers: Duane K. Luce, chairman; Jack T. Williams, president and chief executive officer; Charles R. Harris, executive vice president; Mrs. Jean P. Sempey, cashier. Capital, $600,000; surplus and other funds, $400,000. July 9 ,1973 July 25,197 3 C E N T R A L B A N K O F M IS S IS S IP P I B IV E N S G A R D E N S B A N K Brandon, Mississippi Gainesville, Florida Opened for business as a par-remitting nonmember. Officers: Charles H. Griffin, president; James E. Huffstatler, vice president and cashier. Capital, $510,000; surplus and other funds, $510,000. Opened for business as a member. Officers: Robert F. Lanzillotti, chairman of the board; Robert L. Vasbinder, president; James L. Kaercher, vice president and cashier. Capital, $900,000; surplus and other funds, $270,000. FEDERAL RESERVE BAN K O F ATLANTA 129 S i x t h D i s t r i c t S t a t i s t i c s S e a s o n a l l y A d ju s t e d (A ll d a ta a re in d e x e s, u n le s s in d ic a t e d o th e r w is e .) Late st Month One Month Ago Two Months Ago One Y ea r Ago SIX T H D IS T R IC T Month Unem plo ym ent R ate (P erce n t of W ork F o r c e ) .................... Ju n e Avg. W eekly H rs. in Mfg. (H rs.) . . . Ju n e IN COM E AND SP EN D IN G . . C r o p s ............................................................, Live sto ck ................................................... In stalm e n t Cre d it at B a n k s* / 1 (Mil. $) . . Ju n e May May May 161 164 239 184 159 166 153 183 161 173 184 179 146 114 151 107 Ju ne Ju ne 632 547 679 563 684 562 614 502 One Month Ago TWo M onths Ago One Y ea r Ago 4.3 41.4 4.3 40.5 4.1 41.3 5.0 41.5 214 186 205 213 185 194 208 182 197 176 160 165 169 214 164 149 169 151 145 140 141 120 146 177 103 141 118 145 177 105 140 119 144 177 99 132 114 136 157 85 2.8 40.8 2.8 40.8 3.2 41.6 3.2 41.3 263 224 270 259 224 267 251 216 259 196 185 217 155 178 154 185 158 184 142 132 122 109 127 125 81 122 109 128 126 86 122 109 127 127 84 120 108 125 124 80 3.7 39.7 3.8 40.4 3.6 41.1 3.6 40.9 FIN A N C E AND BAN KIN G Mem ber B an k L o a n s ................................... Ju ne M em ber B an k D e p o s i t s .............................. Ju n e B an k D eb its** ............................................. Ju n e FLO RID A IN COM E EM P LO Y M E N T AND P R O D U CTIO N Nonfarm E m p l o y m e n t ...............................JuJu nn ee M anufacturin g ........................................ Ju ne . Ju ne Nondurable G o o d s ..............................June F o o d .......................................................Ju ne Ju ne T e x t i l e s ..............................................June Apparel .............................................Ju ne . Ju ne P a p e r ..................................................June . Ju ne P rinting and Pu b lish ing . Ju ne C h e m i c a l s ........................................June D urable G oods . . . . . Ju ne Lbr., Wood Prods., Furn . & Fix . Ju June ne Stone, C lay, and G la ss . Ju n e P rim ary M e t a l s .............................. Ju n e Fab ricate d M e t a l s ..........................JuJu nn ee M a c h i n e r y ........................................ June Transportation Equipm ent . Ju ne N onm anufacturing . . . . . Ju ne C o n s t r u c t i o n ...................................June . Ju ne Transportation ..............................June . Ju ne T r a d e ..................................................Ju ne F in ., in s., and real e st...................Ju ne . Ju ne S e r v i c e s ......................... Fed eral G o v e r n m e n t ....................June . Ju ne Sta te and Local Governm ent . Ju n e Farm E m p lo y m e n t ........................................Ju ne Unem ploym ent R ate (P ercent of Work F o r c e ) .....................JuJu ne ne Insured U nem ploym ent (P erce n t of Cov. E m p . ) ..........................JuJu nn ee Avg. W eekly H rs. in Mfg. (Hrs. . Ju n e . Ju ne C o n stru ctio n C o n tra cts* . . R e s i d e n t i a l ...................................................Ju Junne e All O t h e r .......................................................Ju nn ee . Ju E le ctric Pow er Pro d uctio n ** . Dec. Cotton C o n s u m p t i o n * * ...............................Apr Apr. Petroleum P ro d uctio n ** . . . Ju ly M anufacturing P r o d u c t i o n ....................Apr. . Apr. Apr. N ondurable G o o d s ....................................Apr. . Apr. Food .............................. . Apr. T e x tile s .............................................Apr, Apparel .............................................Apr . Apr. P a p e r ...................................................Apr, Apr. P rinting and Pu b lish in g . Apr. . Apr. C h e m i c a l s ........................................Apr. D urable G o o d s .........................................Apr. Apr. Lum b er and W o o d ....................Apr. . Apr. . Apr. Fu rn itu re and F ix tu re s . Apr. Stone, C lay, and G la s s P rim ary M e t a l s ......................... ..... Apr. Fab ricate d M e t a l s ..........................Apr. Apr. . Apr. N o n electrical M achinery . Apr. E le c tric a l M a c h i n e r y ....................Apr. . Apr. Transp o rtatio n Eq uipm ent 125 114 112 101 111 111 111 124 107 116 110 119 111 127 141 108 129 131 122 131 136 134 99 132 84 125 114 112 103 110 110 111 123 107 116 110 120 110 127 139 106 129 132 123 131 135 134 102 131 86 125 114 112 104 110 110 111 123 106 116 110 121 109 127 138 107 128 133 122 131 135 132 101 131 81 120 111 111 102 108 109 110 119 105 112 107 114 106 119 130 108 124 125 117 125 130 130 100 126 86 3.8 3.8 3.7 4.0 1.8 40.6 275 308 242 188 79 115 292 244 188 288 297 223 164 306 349 200 191 207 232 289 445 770 454 1.7 40.6 203 276 131 187 85 114 291 242 188 284 294 223 164 307 349 200 191 207 234 285 436 772 459 1.6 41.2 227 285 171 186 81 114 289 239 186 282 287 222 162 306 348 200 191 207 231 283 436 778 453 2.4 41.1 196 249 144 168 85 124 269 234 185 266 290 215 164 299 311 193 183 185 200 267 398 650 413 . Ju ne . Ju ne 234 221 231 216 226 214 181 167 . Ju ne . Ju ne 195 173 236 194 171 234 190 168 232 165 146 191 F IN A N C E AND B AN KIN G Lo an s* D ep o sits* M anufacturin g Pa yro lls ......................... Ju ne Farm C a sh R e c e i p t s ................................... May EM P LO YM EN T Nonfarm E m p l o y m e n t .............................. June M anufacturing ........................................ Ju ne N onm anufacturing .............................. Ju n e C o n s t r u c t i o n ........................................ Ju n e Farm E m p lo y m e n t ........................................ Ju ne Unem ploym ent Rate (P ercent of Work F o r c e ) .................... Ju n e Avg. W eekly H rs. in Mfg. (H rs.) . . . Ju n e F IN A N C E AND B AN KIN G M em ber B an k L o a n s ...................................Ju ne Member B an k D e p o s i t s ..............................Ju ne B an k D eb its** ............................................. Ju ne G EO R G IA IN CO M E M anufacturing P a y r o l l s .............................. Ju ne Farm C a sh R e c e i p t s ................................... May EM P LO YM EN T Nonfarm E m p l o y m e n t .............................. Ju n e ........................................ Ju n e M anufacturin g N o n m a n u f a c tu r in g ................................... Ju n e C o n s t r u c t i o n ........................................ Ju n e F arm E m p lo y m e n t ........................................ Ju n e Unem ploym ent R ate (P ercent of Work F o r c e ) .................... Ju ne Avg. W eekly H rs. in Mfg. (H rs.) . . . Ju n e F IN A N C E AND B AN KIN G M em ber B an k L o a n s ...................................June M em ber B an k D e p o s i t s ......................... Ju n e B an k D e b i t s * * ............................................. Ju n e 232 182 264 231r 183 261 233 179 283 179 148 203 148 234 147 143 148 143 136 106 112 104 114 93 76 114 105 115 97 76 114 105 115 100 73 111 104 113 95 75 6.1 41.4 6.0 41.4 5.4 4 1.9 5.7 42.5 214 173 187 211 169 175 197 166 172 159 153 161 175 118 171 205 174 245 163 140 121 126 119 109 81 122 126 120 113 82 122 126 120 114 64 118 123 116 112 88 LO UISIAN A JN CO M E M anufacturin g P a yro lls ......................... Ju n e F arm C a sh R e c e i p t s ...................................May EM P LO YM EN T Nonfarm E m p l o y m e n t .............................. Ju n e M anufacturin g ........................................ Ju ne N o n m a n u f a c tu rin g ...................................Ju ne C o n s t r u c t i o n ........................................ Ju ne Farm E m p lo y m e n t ........................................ Ju ne Unem ploym ent R ate (P ercent of Work F o r c e ) .................... Ju n e Avg. W eekly H rs. in Mfg. (H rs.) . . . Ju n e F IN A N C E AND B AN KIN G M em ber B an k L o a n s * .............................. Ju n e M em ber B an k D e p o s i t s * ......................... Ju n e B an k D e b its*/** ........................................ Ju n e M IS S IS S IP P I IN CO M E . Ju ne . May 158 224 153 209 155 200 142 62 . June 115 112 116 114 70 115 112 116 117 80 114 111 116 113 74 112 109 113 111 76 EM PLO YM EN T E M P LO Y M E N T M anufacturing 130for FRASER Digitized M anufacturing P a y r o l l s .............................. Ju n e Farm C a sh R e c e i p t s ................................... May Nonfarm E m p l o y m e n t .............................. Ju n e M anufacturin g ........................................ Ju n e N o n m a n u f a c tu r in g ................................... Ju n e C o n s t r u c t i o n ........................................ June Farm E m p lo y m e n t ........................................ Ju ne A U G U S T 1973, M O N T H L Y RE V IEW One Month Ago L ate st Month Tw o M onths Ago One Y ear Ago 4.2 40.7 4.3 40.9 Late st Month On* Month Ago Tw o M onths Ago On* Y ear Ago 124 116 128 124 115 129 123 83 119 EMPLOYMENT U n em ploym ent R ate (P ercent of Work F o r c e ) ....................Ju n e Avg. W eekly Hrs. in Mfg. (H rs.) . . . Ju n e 4.2 40.6 4.2 40.3 228 195 219 220 189 217 Nonfarm E m p l o y m e n t ..............................Ju n e M anufacturing ........................................Ju ne N o n m a n u f a c tu rin g ...................................Ju ne C o n s t r u c t i o n ........................................Ju n e Farm E m p lo y m e n t ........................................June U nem ploym ent Rate (P ercent of Work F o r c e ) ....................Ju n e Avg. W eekly H rs. in Mfg. (H rs.) . . . Ju n e F IN A N C E AND BAN KIN G Mem ber B an k L o a n s * ..............................Ju n e M em ber B an k D e p o s i t s * ......................... Ju ne B an k D e b its*/** ........................................Ju n e 212 183 221 183 168 193 124 116 128 121 93 122 84 3.0 40.5 112 123 120 92 40.9 40.5 213 177 188 179 158 173 TEN N ESSEE F IN A N C E AND B AN KIN G M anufacturing P a y r o l l s .........................June Farm C a sh R e c e i p t s ...................................May 165 252 166 159 166 175 *F o r Sixth D istrict area only; o ther to tals for e ntire six state s M em ber B an k L o a n s * ..............................Ju n e M em ber B an k D e p o s i t s * ......................... Ju n e B an k D e b it s * / * * .............................................Ju n e 149 106 **D a iIy average b a sis tP re lim in a ry data r-Revised 219 178 198 214 178 183 N.A. Not av a ilab le Note: Indexes for bank debits, construction contracts, cotton consumption, employment, farm cash receipts, loans, petroleum production, and payrolls: 1967 = 100. All other indexes: 1957-59=100. S o u rce s: M anufacturin g production e stim a ted by th is B an k; nonfarm , mfg. and non mfg. em p., mfg. p ayro lls an d hours, and unem p., U .S . Dept, of Lab or and cooperating state ag e n cie s; cotton con su m p tio n, U .S. B ureau of C e n s u s ; con stru ction co n tracts, F . W. Dodge Div., M cGraw-Hill Inform ation Sy ste m s Co.j petrol, prod., U .S . B u re au of M ines; in d u stria l u se of e le c. power, Fed. Power Com m .; farm ca sh receip ts and fa rm em p., U.S.D .A. O ther ind ex es based on data co llected by th is B an k. All indexes ca lcu la te d by th is B an k. ’ Data b enchm arked to Ju n e 1971 Report of Condition D e b i t s t o D e m a n d D e p o s i t A c c o u n t s In s u r e d C o m m e r c ia l B a n k s in th e S ix t h D is t r ic t (In T h o u s a n d s o f D o lla r s ) Ju ne 1973 May 1973 Ju ne 1972 Pe rce n t Shange P e rce n t Change Y ear to Ju n e date 1973 6 mos. From 1973 May Ju ne from 1973 1972 1972 Y ea r to d ate 6 m os. 1973 May Ju n e from 1973 1972 1972 STAN DARD M ETR O PO LITA N ST A T IS T IC A L A R E A S ** B irm in gham . . . . G ad sden . . . . H un tsville . . . . .................... Mobile Montgomery . . . T u scalo o sa . . . 3,251,777 98,600 305,283 1,056,940 619,006 217,036 2,749,881 90,002 263,750 864,642 508,634 157,648 + 2 + 2 + 8 - 2 —7 - 3 + 21 + 12 + 25 + 20 + 14 + 33 + 19 + 18 + 16 + 14 +21 + 26 716,103 347,569 748,261 362,849 601,134 306,412 - 4 —4 + 19 + 13 + 25 +21 1,776,008 308,846 241,649 3 ,641,502 1,778,040 320,666 241,844 3,688,497 1,621,908 220,637 214,393 3,325,793 —4 - 0 + 10 + 40 + 13 + 9 + 15 + 35 + 19 + 22 446,998 6,418,014 1,473,773 432,957 502,901 763,134 3,812,678 1,141,515 443,185 6,613,924 1,464,200 418,450 481,536 911,258 3,840,789 1,233,882 371,080 5,191,506 1,283,001 412,144 332,795 541,333 3,009,760 884,897 + 20 + 24 + 15 + 5 +51 +41 +27 + 29 + 27 + 26 + 21 + 10 + 47 + 45 +23 + 36 194,594 15,184,118 496,861 406,285 515,173 504,621 186,459 15,333,669 514,352 375,412 519,144 525,302 168,257 11,393,197 448,375 365,907 453,632 457,436r + 16 +33 + 11 + 11 + 14 + 10 + 20 +41 + 17 + 10 + 18 + 19 . . 225,932 1,295,321 254,304 212,866 4,086,837 235,908 1,242,160 266,460 220,726 4,156,968 203,518 1,103,748 222,816 203,892 3,625,015 4 + 4 — 5 - 4 - 2 + 11 + 17 + 14 + 4 + 13 + 18 + 10 +21 + 8 + 9 Biloxi-Gulfport . . Ja ckso n .................... 268,126 1,390,882 281,968 1,436,628 227,293 1,181,157 _ + 18 + 18 + 22 + 23 Chattanooga . . . K noxville . . . . N a shville . . . . 1,210,253 846,598 3,141,170 1,232,366 860,827 3,209,257 1,003,684 753,506 2,899,624 +21 + 12 + 8 + 19 + 19 + 20 Albany .................... A t l a n t a .................... A u g u s t a ................... Colum bus . . . . Macon .................... Sa van nah . . . . A lexandria . . Baton Rouge . Lafayette . . . . Lak e C h a rle s . New O rlea ns . . . O T H ER C E N T E R S Anniston . . . . Ju ne 1973 Dothan S elm a 3,323,085 100,427 330,191 1,035,244 577,406 210,117 Bartow -LakelandW inter Haven Daytona B ea ch . . Ft. LauderdaleHollywood . . . Ft. M yers . . . . G a in e sv ille . . . Ja ck so n v ille . . . M elbourneT itu sv ille C o co a . . . . .................... Miami O r l a n d o .................... P ensaco la . . . . Sa raso ta . . . . T a lla h a sse e . . . Tam pa-St. Pete W. Palm B ea ch Ju n e 1973 From 110,670 115,068 102,373 0 1 ■ 1 —3 + 1 + 3 + 4 16 - 1 - 7 + 4 —1 —3 + 8 — 1 - 4 _ 5 3 _ 2 —2 - 2 4 + 8 + 15 . . . . . . . . May 1973 Ju n e 1972 175,024 71,148 170,437 75,671 125,106 58,800 + 3 - 6 + 40 + 21 + 28 + 28 B radenton . . . Monroe County O c a l a .................... St. Augustine St. Petersb urg . 168,488 70,210 194,952 29,479 988,644 1,808,967 178,016 72,570 194,903 26,956 1,012,003 1,846,631 141,513 58,223 153,930 32,090 703,277 1,508,443 _ + 0 + 9 — 2 - 2 + 19 + 21 + 27 - £ + 41 + 20 + 29 + 25 + 32 -1 0 + 36 +19 A then s . . . . B ru n sw ick . . . Dalton . . . . Elberton . . . . G a in e sv ille . . Griffin . . . . LaG rang e . . . Newnan . . . . R o m e ................... Valdosta 162,051 95,591 179,908 22,667 126,714 65,919 47,522 67,223 139,004 94,583 153,196 101,606 182,160 21,787 133,617 70,621 37,807 65,846 135,697 96,493 158,144 80,801 164,367 25,568 106,878 64,442 33,332 52,104 124,304 84,361 + 6 — 5 1 • 4 - 5 — 7 + 26 + 2 + 2 - 2 + 2 +2C + S -1 1 + 19 + 2 + 43 +2S + 12 + 12 + 13 + 22 + 18 + 5 + 28 + 20 + 25 + 47 + 13 + 13 16,546 10,882 77,054 53,163 25,472 38,504 16,061 9,626 81,669 57,748 26,895 37,132 15,947 8,643 56,421 50,600 16,658 30,346 + 3 + 13 6 8 - 5 + 4 + 3 + 26 + 37 + 5 + 53 + 27 + 1 + 24 + 32 +11 + 54 + 12 133,233 67,402 113,730 51,280 125,723 72,984 120,384 51,664 108,457 59,442 104,376 59,506 + 6 — 8 — 6 — 1 + 23 + 13 + 9 -1 4 + 23 + 20 + 17 + 5 . . 139,563 67,691 38,019 152,649 65,622 39,456 153,635 59,516 36,515 9 + 3 - 4 - 9 + 14 + 4 + 20 + 23 + 3 B ristol . . . . Johnson City Kingsport . . . 114,982 166,638 254,935 111,779 175,303 261,944 128,246 154,704 226,784 + 3 — 5 - 3 -1 0 + 8 + 12 - 0 + 14 + 17 . . 71,483,057 72,258,607 59,459,567r - 1 + 20 + 25 Alabam a . . . Florida . . . . Georgia . . . . L o u isia n a ' . . M ississip p i1 . . T e n n e sse e 1 . . . 8,040,573 . 24,448,013 . 20,877,609 . 7,284,519 . 2,994,069 . 7,838,274 7,876,763 24,956,948 21,120,817 7,357,955 3,066,320 7,879,804 6,587,714 20,177,359r 16,506,218 6,421,404 2,667,168 7,099,704 _ 2 2 1 1 2 1 + 22 +21 + 26 + 13 + 12 + 10 + 19 + 25 + 34 + 21 + 19 + 18 A bbeville . B un kie . . . Ham mond . New Iberia P laquem ine Thibodaux . . . . . . . . H attiesburg . Laurel . . . . M eridian . . N atchez . . . . PascagoulaM oss Point Vicksb urg . . Yazoo City . strict Total . . . . . . . 5 — 3 _ — — — — - 1 District portion only r-Revised Fig ures for som e areas differ sligh tly from p relim inary figures published in “ Bank Debits and Deposit Turno ver” by Board of G overnors of the Federal R eserve System . ** Conform s to SM S d efinitions as of Decem ber 31, 1972. FEDERAL RESERVE BAN K OF ATLANTA 131 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 The lack of unused capacity is m oderating the Southeast's ec o n o m ic grow th this sum m er. Farm prices, incom es, and costs rose briskly, but livestock p ro du ction declined. T ight labor m arkets continue. Despite som e slow in g, consum e r sp e n d in g and b o rro w in g rem ain at a high level. Bank le n d in g contin u es strong but b e low the very rapid pace seen earlier this year. C onstru ction activity reb ou n d e d in June after tw o m onths o f decline. the farm sector confirm s the than in any m onth since July 1972. Loans to pu r current agricultural price pressures; farmers received M o s t news from chase n on au tom otive co nsum e r g o o d s and to repair higher prices in June, especially for grain. The price hom es grew less than in the average m onth of 1973. advance w as m ore m oderate in the livestock sector with cattle and calf prices registering slight declines from M a y 's levels. G ro w in g crops show ed good prospects for excellent yields, but pork, poultry, and Personal loans were the only strong c o nsum e r len d ing category in June. Sales at departm ent stores in m ajor m etropolitan areas continued to be w ell above last year's level. The fast pace o f District auto sales slow ed in June. e gg producers cut back production in response to rapidly rising costs. A verage June prices for livestock feed advanced 14 percent from M a y 's level. A large agricultural len ding agency in the District recently raised its interest rate on short-term loans to 8.25 percent; it was 5.75 percent at the be gin n in g of the year. Farm cash receipts continue to increase. A d w in d lin g sup ply o f u nem p loyed contributed to rapid pace o f spring. A lth o u gh deposit grow th w as strong, banks relied heavily on Federal funds pur chases and b o rrow in gs from the Federal Reserve. C o n su m e r loans and real estate loans contin u ed to increase at large banks, w hile business loans regis labor has a slo w in g o f em p loym en t Bank lending, w hile still registering strong gains, appears to have m oderated from the exceptionally gains. Sm all gains in m anufacturing jobs were offset by job losses in non m anu facturin g The u nem p loym en t rate rem ained u nchanged at 3.8 percent. Reflecting tight labor markets, all District states except Louisiana have u nem p loym en t rates belo w the U. S. average. The factory w orkw eek held steady, but m anufactur ing payrolls rose after d ip p in g the previous month. G row th in consum er credit continues to slow. In June, lending for auto purchases increased less tered o n ly m oderate gains. By late July, m ost District banks had increased their prim e rate for larger b u si ness custom ers to 83A percent. A b u n ch in g o f large contracts b o o ste d the value of construction contract aw ards in June. After tw o m onths of decline, both residential and n on residen tial aw ards regained their relatively high first quarter levels. Large contracts boosted both sectors. At thrift institutions, deposit inflow s and value of c o m m itm ents declined w hile len din g increased slightly. Residential m ortgage rates contin u ed to rise. Note: Data on which statements are based have been adjusted whenever possible to eliminate seasonal influences. 132 A U G U ST 1973, M O N T H L Y REVIEW
@FedFRASER