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A New Look at Prices A ls o in t h is is s u e : I N D E X F O R T H E Y E A R 1964 S IX T H D IS T R IC T S T A T IS T IC S D IS T R IC T B U S IN E S S C O N D IT IO N S This December, the current expansion in economic activity enters its forty-sixth month. It thus exceeds in length the previous record postwar expansion of 1949-53. Of all the twenty-seven expansion periods re corded by the National Bureau of Economic Research since 1854, only two are longer—the fifty-month expansion of 1933-37 and the eighty-month period of 1938-45, spanning the Second World War. If our current upswing should last only five more months (until next May), it would then become the longest peacetime expansion period in our history. The present economic upswing is remarkable not only for its length, but for the absence of inflation. The wholesale price index is still slightly below its level of February 1961, when the economy began to revive from the 1960 recession. It is true that consumer prices have risen fairly steadily at a rate of about 1.2 percent each year, but this is a much slower rate than in earlier postwar cycles. This is not to say that all prices have remained dully static throughout this period. On the contrary, there has been a good bit of movement in various sectors of the economy, and an observer’s interest could always be maintained by the possibility that every fresh announcement of a price rise portended the onset ( “this time for sure” ) of a general inflation. But, many times, the announcements turned out to be only wishful thinking on the part of the company involved, and those changes that really stuck frequently turned out to be offsetting. The classic signs of inflation have been absent. Instead, we have had to contend with, at times, confusing crosscurrents. Wholesale prices of metal and metal products, for example, have risen since early 1963 and are now higher than their 1961 average. On the other hand, rubber and rubber product prices have moved down and Consumer and W holesale Prices 108 104 100 1961 1962 1963 1964 1965 Source: U. S. Bureau of Labor Statistics. S ine* th e en d of th® la s t rece ssio n , e a r ly in 1 961, w e h a v e had r e a so n a b le p rice s t a b ilit y . C o n su m er p rice s h a v e rise n s t e a d ily but not r a p id ly , w h ile w h o le s a le p rices h a v e b een r e m a r k a b ly s ta b le . are now lower than they were in 1961. This has happened in other industries as well so that, thus far, price declines in this expansion have been strong enough to neutralize price increases, at least at the wholesale level. FOOD111. 19PRICES 61-160 WHOLESALE PRICES __ 1M7.5!l=infl ! Farm Predicts Processed Foods - R atter t 1ubber Prodi id s - mi 1962 1961 1982 1963 1964 1965 1964 1963 Source: U. S. Bureau of Labor Statistics. Source tistics. 1961 1962 1963 1964 U. S. Bureau of Labor Sta W h o le sa le p rices h a v e re m a in e d sta b le p a rt ly b eca u se of o ffsetting p rice ch a n g es of v a rio u s co m m o dities. The n e a r e r the com m odity g ets to the u ltim a te co n sum er, h o w e v e r, the m o re lik e ly it is th a t its p rice w ill r ise , a s show n b y the b e h a v io r of food p rices. Prices also have behaved differently in different stages of production. This is nowhere better illustrated than by food price changes. Wholesale prices for farm products, of which food is the primary component, have declined since late 1962. By the time food has gone through the processing stage and then prepared for the retailer, how ever, the downward movement in farm product prices has been counterbalanced so that the wholesale price of processed food has hardly changed at all. Going one step further, the price of processed food after it has gone through the distributive process and is taken home by the housewife has drifted upward slightly. This step puts food in the hands of the consumer, and the price includes transportation and retail markups. Finally, we discover an even stronger upward price trend when food is prepared by a chef and mingled with soft music and candlelight or even when it is dished up by a short-order cook and served to the tune of a juke box. Thus, between the farmer and the restaurant, price trends for food show a distinct change—from a decline at the first stage to a fairly strong upward movement at the last. This brings us to the consumer price index, which has risen rather steadily. Part of the rise in consumer prices can be blamed on food, but not all of it by any means. Between January CONSUMER PRICES SERVICE PRICES Jan. 1961=100 Percent Increase : Services V / 7 / f : / ^ y ~ -r ' /y -J f m Items The C a u ses o f S ta b ility In the later stages of a period of rising business activity, unemployed resources— men and machines— become more and more scarce. As their employers bid against each other to obtain them, their prices and those of the goods they produce tend to rise more and more rapidly. Why has that not happened in this expansion period? The answer seems to be that the underlying forces of supply and demand have, at least until now, been different from those of the past. Unlike their behavior in previous periods of economic expansion, labor costs in manufacturing have not exerted any upward pressure on prices. Average hourly earnings, it is true, went up, but labor costs per unit of output declined because of productivity gains. MANUFACTURING CAPACITY LABOR COSTS IN MANUFACTURING 1957 58=10 t w a ( e Hourly Earnini s Labe Cost Per Unit tf Out 1961 j Medical // -j y 1961 and October 1964, the consumer price index for all items rose 4.2 percent, an average of 1.2 percent each year. During the same period, food price increases averaged 1.1 percent each year, while price increases for nonfood commodities averaged only .8 of one percent annually. The chief culprit behind the rise in consumer prices has been services. The price of services has climbed steadily throughout the expansion at an average rate of 1.9 percent annually. Services require more labor per dollar of final product than do manufactured goods and, therefore, their prices are more closely related to wage rates. Here also, however, the difficulties of making generalizations about price behavior are demonstrated by the divergence among some major components of the service trades. Between January 1961 and September 1964, rent increased only slightly. The increases in transportation and household services were larger but were exceeded by the costs of medical services— which include hospital charges, professional fees, and health insurance— and of other services, such as recreation and personal care. 1962 1963 1964 100 1965 Sources: U. S. Bureau of Labor Statistics and Board of Governors, Federal Reserve System. Other 1954 1956 1958 1960 1962 1964 Sources: U. S. Department of Commerce and Board of Governors, Fed eral Reserve System. L a b o r costs p e r u n it o f ou tp u t in m a n u fa ctu rin g h a v e not co n trib u ted to in fla tio n a ry p re ssu re s b e ca u se w a g e b oosts w e r e offset b y in cre a se d p ro d u ctiv ity . Much of th e in cre a se d p ro d u ctiv ity can be e x p la in e d b y v e r y la r g e e x p e n d itu re s on n ew p la n t a n d e q u ip m e n t b y b u sin e sse s. Transportation Household Rent y ■ i . . L. 1962 1 1963 1964 i ... .7 1965 Jauarjr 1961 Sept. 1964 Source: U. S. Bureau of Labor Sta- Source: U. S. Bureau of Labor Sta tistics. tistics. S e rv ic e s, p a rt ic u la r ly m ed ica l a n d p e rso n a l se rv ice s , accou n ted fo r much of th e rise in co n su m er p rices. have The continued existence of unused manufacturing capacity throughout the business expansion has also helped minimize price pressures. Nor has a shortage of workers crimped our capacity to produce. Since 1962, the civilian labor force has grown at about the same rate as civilian employment. As a result, the unemployment . 2 • rate, although falling sharply in 1961, has remained well above the 4-percent level widely considered consistent with full employment. Thus, there has been no price pressure fostered by a general labor bottleneck. When we have had price inflation in the past, it has been because demand outran the economy’s capacity to produce, so that the growth in gross national product was largely “fictional.” The period since early 1961 has been, of course, one of steadily growing demand. But the economy of the last few years has shown a capacity to satisfy this demand, with a minimum of price pressures. Then, too, this demand has not been reinforced by a large change in inventories, which has created infla tionary pressures in the past. So far in the current ex pansion beginning in 1961, the inventory buildup has proceeded more slowly than the growth in sales, as evidenced by a declining inventory-to-sales ratio. Again, although consumer demand has been the back bone of the present expansion, consumers have not in dulged in any wild spending orgy. Saving, as a percentage of disposable personal income, has not fallen to the levels of the 1955 or 1959-60 boom. Likewise, consumers have used the tax cut passed in March of this year quite soberly, as signified by the marked increase in the per centage of disposable income saved in the second quarter of 1964. Part of this money has gone to repay instalment debt. Instalment repayments, as a percentage of disposable income, reached 14 percent in the first half of 1964, a record level. CONSUMER SAVING AND BORROWING 1951 1966 1962 1984 STEEL PRICES & IMPORTS " Si a 17 $ 58 TS '60 '61 52 S3 'H ' Sources: U. S. Department of Com- Sources: U. S. Bureau of Labor Stamerce and Board of Governors, Fed- tistics and U. S. Department of Comeral Reserve System. merce. Co nsu m ers h a v e co n trib u ted to p rice s ta b ility b y sa v in g much of th e ir incom e. Fo reig n co m p etition h a s a lso co n trib u ted throu gh its effect on dom estic p ro d u ce rs. Foreign competition, too, has helped to hold U. S. prices down. Steel prices and imports, for example, show clearly the effect of foreign competition. In 1955 and 1956, the wholesale steel price rose rapidly in this country. This provided an incentive for steel users to look for alternative sources of supply. The steel strike in 1959, moreover, gave foreign producers an unexpected opportunity to supply the American market, and they have not been dislodged from their position since then. It is probably no coincidence that American steel prices gradually declined from 1959 through 1962 in the face of a continued high level of imports. The rise in 1963 and 1964 has been quite modest as well. Besides foreign competition, vigorous domestic com petition among products vying for the same uses has helped to keep prices from rising. Output of steel per unit of the principal products it is used to make has declined since World War II, while aluminum and other materials have captured part of steel’s market. Steel is in no im mediate danger of being replaced since, even today, nearly a ton of steel is produced for every thousand dollars worth of construction and durable goods production, while only forty pounds of aluminum is used, for example. To some extent, total steel tonnage has been held down by improve ments that permit the same strength with less weight. Nevertheless, competition between the two metals has certainly helped to hold down steel prices. C a n W e A v o i d I n fl a ti o n A l t o g e t h e r ? We have so far avoided inflation and, because there was no inflation, there was no mad scramble to procure goods to build up inventories in the fear that prices would go up further. Investment plans could be based on estimates of real demands, not on anticipated inflationary prospects. Absence of inflation avoided for some time the continual jockeying for position between labor and management that often occurs at the expense of the consumer during inflationary periods. In short, the absence of inflationary tendencies eliminated many of the things that can lead first to a boom and then to a bust economy. The current news, however, gives us more cause for concern about the future than about the present: (1) One indication of possible future trouble is the recent considerable improvement in the terms of trade of the primary producing countries. The prices of copper and other raw commodities have been rising on world markets. (2) There are increasing rumors of possible bottlenecks developing, particularly in steel, if auto makers and other producers build up their stockpiles as a hedge against a possible steel strike next year. (3) More and more frequently, there are reports of employment vacancies that cannot be filled, particularly in such highly skilled areas as machine tool production. (4) Competi tion, both domestic and foreign, has prevented price in creases that many firms would have liked to make. But it is not at all clear that the European anti-inflation pro grams will be completely successful. Inflation abroad would help our balance of payments, but it would elim inate one downward pressure on prices in this country. (5) The recent wage settlement in the automobile industry breached the Administration’s guidelines. The automobile companies have not raised prices, it is true, but other industries may not be able to absorb a settlement of similar size. Any check that the Federal Reserve System can im pose on price pressures must be chiefly exerted by limiting the lending and investment activities of member banks and raising the cost of credit to borrowers by decreasing the availability of member bank reserves. In this way policy can influence the level of effective demand. During the past several years, slight shifts in policy have been made, as reflected by the decline in the level of free reserves and in the moderate rise of short-term interest rates. These policy shifts, however, including the recent rise in the discount rate, were made largely because of balance-of-payments considerations, not because inflation was a real and present threat. But policy-makers must and will remain alert to symptoms of inflationary pressures. • 3 • Index for the Year 1964 MONTH MONTH PAG E PAGE Some Measures of the Quality of Credit in Agriculture Arthur H. K a n t n e r ................................. Apr. AGRICULTURE Farm Income Near Record High Arthur H. K a n t n e r .................................Oct. 1 4 Some Measures of the Quality of Credit in Agriculture Arthur H. K a n t n e r .................................Apr. DISTRICT BUSINESS CO N D ITIO N S 1 Jan.-Dec. 8 International Trade and District Ports Lawrence F. M a n sfield ........................... Sept. 1 DISTRICT PORTS AUTOM OBILE SALES District Autos: The Guessing Game Jack L. C o o p e r ...................................... Aug. BANK AN N OUN CEM EN TS 1 Jan.-Apr. May June-Dee. 6 4 6 BA N KIN G A Bank Examiner Looks at the Quality of Credit R. M. S tephenson ...................................... July 1 District Member Banks Still in Cost Squeeze W. M. D a v i s ............................................Apr. 5 Federal Reserve Bank Membership— Fifty Years in R e v i e w ........................... Oct. 1 From Panic to Prosperity— The South’s Economy and the Federal Reserve Robert M. Y o u n g ...................................... Nov. A Bank Examiner Looks at the Quality of Credit R. M. S tep h en so n .......................................July A New Look at P r ic e s ................................. Dec. 1 Growth of District Financial Institutions: 1957-62 Samuel L. S k o g s ta d .................................May Negotiable CD’s: Still Not Too Popular at Large District Banks Harry B r a n d t ............................................Aug. District Autos: The Guessing Game Jack L. C o o p e r ...................................... Aug. 1 Some Measures of the Quality of Credit in Agriculture Arthur H. K a n t n e r ................................. Apr. 1 The International Monetary System: As It Is Lawrence F. M a n s f ie ld ........................... Jan. 1 The International Monetary System: A s It Might Be Lawrence F. M a n s fie ld ........................... Feb. 1 ECO N OM IC CO N D IT IO N S, SIXTH DISTRICT STATES 4 1 CREDIT Q U A LITY A Bank Examiner Looks at the Quality of Credit R. M. Stephenson...................................... July 1 5 CONSUM ER CREDIT ECO N OM IC CO N D ITIO N S, GEN ERA L A Cure for the Blues: Louisiana Jack L. C o o p e r .......................................Jan. 4 A Diversity of Growth in Florida N. D. O’B a n n o n ...................................... June 4 Alabama’s Economy Exhibits Strength Arthur H. K a n t n e r ................................. July 3 Tennessee’s Growing Pains: Less Severe? Samuel L. S k o g sta d ................................. Mar. 4 ECON OM IC DEVELOPM ENT, SIXTH DISTRICT STATES 1 A New Look at Southern Economic G row th.......................................Mar. . 4 . 1 MONTH PAGE Farm Income Near Record High IN TERN ATION AL M O N ETARY SYSTEM Arthur H. K a n t n e r .................................Oct. 4 The International Monetary System: A s It Is From Panic to Prosperity— The South’s Econom y and the Federal Reserve Lawrence F. M a n s f ie ld ........................... Jan. Robert M. Y o u n g ...................................... Nov. 1 . 1 The International Monetary System: A s It Might Be Government Employment— A Growth Industry John Robert Cooper . MONTH PAGE Lawrence F. M a n s fie ld ........................... Feb. . . . . . June 1 1 Growth of D istrict Financial Institutions: 1957-62 M O N ETARY P O LICY Samuel L. S k o g s ta d .................................May Between the D evil and the Deep Blue Sea: Monetary Policy from 1960 to 1964 5 Lawrence F. M a n s f ie ld ........................... May 1 EM PLOYM ENT NEGOTIABLE TIME CERTIFICATES OF DEPOSIT Government Employment— A Growth Industry John Robert C o o p e r .................................June Negotiable C D ’s: Still Not Too Popular at Large D istrict Banks 1 Harry B r a n d t ............................................Aug. FEDERAL RESERVE SYSTEM O PERA TIN G RATIOS Between the D evil and the Deep Blue Sea: Monetary Policy from 1960 to 1964 District Mem ber Banks Still in Cost Squeeze W. M. D a v i s ............................................Apr. Lawrence F. M a n s f ie ld ........................... May Federal Reserve Bank Membership— F ifty Years in Review . . . . Robert M. Y o u n g ...................... PRICES Oct. 1 Nov. 1 A New L o o k at P r i c e s .................................. Dec. 1 SIXTH DISTRICT STATISTICS (Tables) FIN A N CIA L IN STITUTION S Growth of D istrict Financial Institutions: 1957-62 Samuel L. S k o g s ta d .................................May 5 FO REIG N TRADE International Trade and District Ports . . . . . . 5 1 From Panic to Prosperity— The South’s Econom y and the Federal Reserve Lawrence F. Mansfield 4 Sept. 1 The International Monetary System: A s It Is Lawrence F. M a n s fie ld ........................... Jan. 1 The International Monetary System: A s It M ight Be Lawrence F. M a n s fie ld ........................... Feb. 1 Average Weekly Hours in M anufacturing...................................... Jan.-Dee. Bank Debits Construction Contracts Cotton Consumption Department Store Sales Farm Cash Receipts Farm Employment Industrial Use of Electric Power Instalment Credit at Banks Insured Unemployment Manufacturing Employment Manufacturing Payrolls Member Bank Deposits Member Bank Loans Nonfarm Employment Nonmanufacturing Employment Personal Income Petroleum Production 7 INCOM E Farm Incom e Near R ecord High Arthur H. K a n t n e r .................................Oct. 4 Debits to Demand Deposit A c c o u n ts ............................................Feb.-Mar. May-Dee. •5 • 6 6 Debits to Demand Deposit Accounts Bank Announcements On O ctober 17, the H u b C i t y B a n k a n d T r u s t C o m p a n y , L afayette, Louisiana, a newly organized nonm em ber bank, opened for business and began to rem it at par fo r checks drawn on it when received from the Federal Reserve Bank. Officers are Byron Plauche, President; Pierre A . Primeaux, Vice President; and Shereld J. Bourg, Cashier. Capital is $370,000, and surplus and undivided profits, $185,000. The C a r i b b e a n S t a t e B a n k , Perrine, Florida, a newly organized nonm em ber bank, opened fo r business on O cto ber 29 and began to rem it at par. Officers include Paul L. E. Helliwell, Chairman of the Board; F. Eugene Poe, President; K arleton B. Wulf, Vice President; and William H. Losner, Cashier. C apital is $187,500, and surplus and undivided profits, $187,500. On N ovem ber 2, the F i r s t N a t i o n a l C o u n t y B a n k , S p r i n g C i t y , Spring City, Tennessee, a newly organized m em ber bank, opened fo r business and began to rem it at par. Officers are H arry T. Burn, Chairman of the Board; Glenn S. Barton, Senior Chairman; C. H. Shipley, Presi dent; and T. H. Stewart, Executive Vice President and Cashier. Capital is $120,000, and surplus and other capital funds, $180,000, as reported by the C om ptroller o f Cur rency at the tim e the charter was granted. The F i r s t B a n k a n d T r u s t C o m p a n y o f B o c a R a t o n , N a t i o n a l A s s o c i a t i o n , Boca Raton, Florida, a conversion of the First Bank and Trust C om pany o f Boca Raton, opened for business on N ovem b er 9 as a national bank. Officers include T. F. Fleming, Jr., Chairman of the Board; William M . Stowe, President; W. L. Felter, Sr., Vice President and Cashier; J. T. Johnson, Vice President and Trust Officer; and R. J. Chenoweth and S. P. Skogstad, Vice Presidents. C apital is $510,000, and surplus and un divided profits, $680,000, as reported by the C om ptroller of Currency at the time of the conversion. On N ovem ber 14, the A m e r i c a n B a n k & T r u s t C o m p a n y o f H o u m a , Houm a, Louisiana, a newly organized nonm em ber bank, opened fo r business and began to rem it at par. Officers are R. W . Wimbish, President; Jennings L. Courville, Executive Vice President and Cashier; and L. J. Folse, Leo Serber, L. E. Lapeyrouse, Lucas M . M arcello , and Sidney A . Pellegrin, Vice Presidents. Capital is $468,750, and surplus and undivided profits, $281,250. The S h o a l s N a t i o n a l B a n k o f F l o r e n c e , Florence, Alabam a, a newly organized m em ber bank, opened for business on N ovem ber 16 and began to rem it at par. Officers include H. E. Lamar, President and Chairman of the Board; G eorge D . Hicks, Jr., E xecutive Vice President, and Oscar F. Pitts, Vice President and Cashier. Capital is $300,000, and surplus and other capital funds, $450,000, as reported by the C om ptroller of Currency at the time the charter was granted. On N ovem ber 19, the S e c o n d C i t y N a t i o n a l B a n k a t C l e a r w a t e r , Clearwater, Florida, a newly organized m em ber bank, opened fo r business and began to rem it at par. Officers are A . A . W akeford, Chairman o f the Board; E. A . Branson, President; W. S. Zschach and P. W . C law son, Vice Presidents; and B. C. Rollins, Cashier. C apital is $200,000, and surplus and other capital funds, $300,000, as reported by the C om ptroller of Currency at the tim e the charter was granted. The T h i r d C i t y N a t i o n a l B a n k a t C l e a r w a t e r , Clearwater, Florida, a newly organized m em ber bank, opened for business on N ovem b er 19 and began to rem it at par. Officers include A . A . W akeford, Chairman o f the Board; John L. M artens, President; R aym on d H. Center and R obert E. Prentice, Vice Presidents; and M erwin P. Crandall, Cashier. C apital is $160,000, and surplus and other capital funds, $240,000, as reported by the C om p troller of Currency at the time the charter was granted. In su re d C o m m ercia l B an k s in th e S ix th D istrict (In Thousands of Dollars) Percent Change Year-to-date 10 Months Oct. 1964 from 1964 Oct. from Oct. Sept. 1963 1964 1963 1963 Oct. 1964 Sept. 1964 STANDARD METROPOLITAN STATISTICAL AREASf Birmingham . . . 1,201,831 Gadsden . . . . 61,070 Huntsville . . . 157,036 396,657 Mobile . . . . 243,204 Montgomery . . 80,327 Tuscaloosa . . . 1,171,211 57,460 150,966 395,025 256,148 76,359 1,098,374 57,296 157,987 417,676 296,629 79,925 +3 +6 +4 +0 —5 +5 +9 +7 —1 —5 — 18 + 1 + 10 + 10 + 17 +6 +3 +8 . 394,113 1,169,430 1,586,637 439,627 163,364 372,235 1,091,668 1,561,667 395,235 162,893 386,842 1,115,949 1,541,710 439,207 141,172 +6 +7 +2 + 11 +0 +2 +5 +3 +0 + 16 + 11 + 13 +7 +9 + 14 . . 998,185 294,746 966,134 265,979 970,738 274,703 +3 +7 +8 +9 . . . . . . . . . . . . . . . . . . . . . . 82,217 3,509,833 172,491 176,751 184,856 215,698 80,230 3,499,002 155,258 191,284 181,296 204,922 70,051 3,398,833 152,075 163,151 179,748 210,338 +3 + 11 +2 +0 + 11 —8 + 2 +5 + 17 +3 + 13 +8 +3 +3 + 12 +6 +9 + 18 +8 + 10 397,790 89,276 103,765 1,902,182 371,512 82,898 97,143 1,873,596 359,466 84,971 98,541 1,806,866 +7 +8 +7 + 2 + 11 +5 +5 +5 Ft. LauderdaleHollywood . Jacksonville . . Miami . . . . Orlando . . . . Pensacola . . TampaSt. Petersburg W. Palm Beach . Albany Atlanta Augusta* Columbus Macon Savannah Baton Rouge Lafayette . Lake Charles New Orleans Jackson . . . . . . . . . . 508,590 448,330 539,279 + 13 —6 +6 +9 +3 + 11 + 10 424,395 365,986 1,051,659 425,798 362,027 1,085,339 428,505 365,755 1,075,427 —0 + 1 —3 —1 +0 —2 +8 +6 + 10 55,210 53,399 41,207 53,606 52,255 37,096 54,999 50,194 37,341 +3 + 2 + 11 +0 +6 + 10 +6 +7 + 12 25,436 43,240 145,918 70,152 25,183 40,650 148,519 63,232 22,830 44,584 143,203 70,183 + 1 +6 —2 + 11 + 11 —3 + 2 —0 + 13 +3 + 23 +5 52,585 67,256 21,052 91,044 44,809 15,811 254,455 78,204 88,696 517,294 46,953 52,116 65,130 18,042 90,724 42,905 14,750 233,460 73,477 87,977 506,533 44,164 54,799 57,452 19,149 94,739 41,833 14,485 239,467 85,951 84,807 507,998 42,310 +1 +3 + 17 +0 +4 +7 +9 +6 +1 +2 +6 —4 + 17 + 10 +6 + 14 + 10 +4 +5 +4 +8 +3 + 12 +8 + 14 55,863 39,100 83,858 11,933 62,752 26,566 18,829 25,013 62,913 42,919 9,454 108,450 6,521 28,525 28,851 7,340 17,354 53,776 37,183 79,472 11,934 61,617 26,727 18,547 25,913 57,555 43,090 10,779 96.524 5,273 28,128 28,918 7,399 17,484 52,985 36,264 66,959 12,652 60,749 23,676 17,929 23,097 61,208 42,068 10,807 100,283 5,887 26,620 29,924 7,240 16.807 +4 +5 +6 —0 +2 —1 +2 —3 +9 —0 — 12 + 12 + 24 +1 —0 —1 —1 +5 +8 + 25 —6 +3 + 12 +5 +8 +3 + 2 — 13 +8 + 11 +7 75,184 44,027 32,021 58,751 31,099 70,707 41,268 30,747 53,416 31,217 71,522 41,118 32,928 56,974 31,547 +6 +7 -j-4 + 10 —0 +5 +7 —3 +3 —1 45,631 32,560 26,471 39,054 31,433 20,228 56,807 59,681 106,753 22,556,984 40,552 30,392 25,363 61,284 58,362 107,835 22,554,242 + 17 +4 + 31 +5 —3 +5 +3 + 13 +7 +4 —3 —1 +4 + 3 + 10 + 12 + 11 —1 + 11 + 12 3,222 117 3,165,144 3,123,239 6,841,847 6,559,777 6,707,462 5,834,855 5,788,547 5,641,406 . 3,289,544 3,193,732 3,108,333 . 1,155,684 1,037,418 1,129,440 2,778,618 2,844,362 2,812,366 . . 353,500,000 339,000,000r337,200,000 +2 +4 + 1 +3 + 11 —1 +4 +3 + 2 +3 +6 +2 —2 +5 + 10 +8 + 7 + 10 +9 +8 + 10 . . . . Chattanooga Knoxville . Nashville . . . . . . . OTHER CENTERS Anniston . . . . Dothan . . . . Selma . . . . Bartow . . . . Bradenton . . . Brevard County Daytona Beach . . Ft. MyersN. Ft. Myers Gainesville . . . Key West . . . Lakeland . . . . O c a la .................... St. Augustine . . St. Petersburg . . Sarasota . . . . Tallahassee . . . Tampa . . . . Winter Haven . . Athens . . . . Brunswick . . . Dalton . . . . Elberton . . . . Gainesville . . . Griffin . . . . LaGrange . . . Newnan . . . . R o m e.................... Valdosta . . . . Abbeville . . . Alexandria . . . Bunkie . . . . Hammond . . . New Iberia . . . Plaquemine . . . Thibodaux . . . Biloxi-Gulfport . . Hattiesburg . . . Meridian . . . . Natchez . . . . PascagoulaMoss Point . . Vicksburg . . . Yazoo City . . . Bristol . . . . Johnson City . . Kingsport . . . 59,610 57,639 112,575 SIXTH DISTRICT, Total 23,122,665 Alabamaf . . Floridaf . . . . Georgiaf . . . . Louisianaf** . Mississippif** . Tennesseet** . U.S., 344 Cities . . ♦Richmond County only. tPartially estimated. +7 +9 +6 —9 +5 +2 + 11 —A + 1 +3 + 10 +9 + 21 +9 +6 + 10 + 11 + 10 +10 + 11 +5 + 11 +3 +9 +14 +14 +8 +5 +6 +6 +3 +9 +8 **Includes only banks in the Sixth District portion of the state. r Revised. •6 • Sixth D istrict Statistics Seasonally Adjusted (All data are indexes, 1957-59 = Latest Month (1964) One Month Ago Two Months Ago One Year Ago S IX T H D IS T R IC T PRODUCTION AND EMPLOYMENT Nonfarm Employment........................................... Oct. M an u factu rin g ........................................... ...........Oct. Apparel ....................................................... Oct. Ch em icals....................................................... Oct. Fabricated M e t a l s ..................................... Oct. Food ..............................................................Oct. Lbr., Wood Prod., Furn. & Fix. . . . Oct. P a p e r ..............................................................Oct. Primary M e t a ls ........................................... Oct. Textiles ....................................................... Oct. Transportation Equipment . . . . Oct. Nonmanufacturing........................................... Oct. Construction................................................. Oct. Farm Employment................................................. Oct. Insured Unemployment, (Percentof Cov. Emp.) Oct. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Oct. Construction C o n tra c ts * ..................................... Oct. R e s id e n t ia l....................................................... Oct. All O t h e r ..............................................................Oct. Industrial Use of Electric Power . . . . Sept. Cotton C o n su m p tio n **..................................... Oct. Petrol. Prod, in Coastal La. and Miss.** . Oct. FINANCE AND BANKING Member Bank Loans* All B a n k s ............................................................. Oct. Leading C i t i e s ................................................. Nev. Member Bank Deposits* All B a n k s ..............................................................Oct. Leading C i t i e s ................................................. Nov. Bank D e b i t s * / * * ................................................. Oct. 44,096 146 123 141 115 136 44,121 146 115 99 136 42,209 140 133 135 118 131 178 183 174 190 157 150 117 115 136 112 124 107 94 110 105 95 120 118 108 80 2.8 41.2 150 156 146 122 96 174 117 115 136 112 123 108 93 HO r 105 95 131 117 107 75 2.8 40.5r 153 146 160 119 107 180 116 114 136 113 113 132 184 173 148 139 154 121 111 120 107 92 109 103 95 121 117 107 78 2.9 41.1 129 145 116 110 116 108 93 108 102 95 122 114 101 170r 80 3.4 41.0 156 165 149 119 97 160 183 170 180 170 161 155 148 136 152 144 140 153 135 127 144 121 110 One Month Ago Two Months Ago INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** . Sept. 8,302 Manufacturing P a y r o lls .............................. Oct. 144 Farm Cash R e c e ip t s ................................... Sept. 123 Department Store S a l e s * * ......................... Oct. 139 8,263 147 131 130 8,204 142 102 139 7,880 139 130 116 PRODUCTION AND EMPLOYMENT Nonfarm Employment...................................Oct. Manufacturing........................................Oct. Nonmanufacturing...................................Oct. Construction........................................Oct. Farm Employment........................................Oct. Insured Unemployment, (Percentof Cov. Emp.) Oct. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Oct. 117 112 120 126 82 2.4 40.6 118 114 120 125r 75 2.4 39.7r 117 111 120 129 83 2.6 40.8 117 118 75 40.7 188 152 163 183 154 165 183 148 163 168 138 151 6,392 134 113 112 6,403 133 131 115 6,424 129 113 125 6,142 124 130 101 106 103 106 93 84 3.0 42.0 105 102 106 90 80 3.0 42.1 104 101 105 90 89 3.3 41.7 103 99 103 83 86 3.6 41.9 167 135 141 167 134 139 162 129 141 146 123 128 One Year Ago FINANCE AND BANKING Member Bank L o a n s ...................................Oct. Member Bank D e p o s it s ..............................Oct. Bank D e b it s * * .............................................Oct. 115 111 2.8 LOUISIANA INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** Sept. Oct. Sept. Oct. PRODUCTION AND EMPLOYMENT Oct. Oct. Oct. Oct. Oct. Insured Unemployment, (Percentof Cov. Emp.) Oct. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Oct. FINANCE AND BANKING Bank Debits*/” Oct. Oct. Oct. MISSISSIPPI ALABAMA Sept. Oct. Sept. Oct. 5,940 138 136 111 5,843 136r 120 109 5,890 133 132 118 5,648 127 139 98 110 106 111 101 75 2.9 41.3 109 105 111 102r 74 2.8 41.2 109 104 111 102 69 3.0 41.5 107 103 109 100 79 4.2 40.5 178 147 151 180 149 150 176 145 158 159 134 141 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** 3,461 159 137 89 3,307 157r 124 96 3,371 157 121 108 3,309 145 143 83 119 124 117 124 70 3.2 40.4 119 124r 117 123 61 3.3 40.5 119 123 117 120 67 3.4 40.3 116 119 115 115 72 4.6 40.2 203 162 168 202 159 159 198 156 166 181 150 158 Sept. Oct. Sept. Oct. 7,060 148 105 118 7,079 146 109 118 7,085 146 113 122 6,689 141 116 105 Oct. Oct. Oct. Oct. Oct. Oct. Oct. 118 120 117 143 82 3.3 41.6 117 119 116 139 80 3.2 40-4r 117 120 115 139 83 3.3 40.7 114 116 112 133 83 3.9 41.7 Oct. Oct. Oct. 188 151 147 187 152 156 185 148 152 163 135 145 Sept. Oct. Sept. Oct. PRODUCTION AND EMPLOYMENT PRODUCTION AND EMPLOYMENT Oct. Oct. Oct. Oct. Oct. Insured Unemployment, (Percent of Cov. Emp.) Oct. Oct. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Oct. Oct. Oct. Oct. Oct. Insured Unemployment, (Percentof Cov. Emp.) Oct. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Oct. FINANCE AND BANKING FINANCE AND BANKING Bank Debits** Latest Month (1964) GEORGIA INCOME AND SPENDING Personal Income, (M il. $, Annual Rate)*** . Sept.44,403 148 Manufacturing P a y r o lls ..................................... Oct. Farm Cash R e c e ip t s ........................................... Sept. 126 C r o p s ....................................................................Sept. 120 L iv e s to c k ..............................................................Sept. 122 Department Store S a l e s * / * * .........................Nov. 142p Instalment Credit at Banks, *(M il. $) New Loans..............................................................Oct. 181 R epaym ents........................................................Oct. 167 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** 100, unless indicated otherwise.) Oct. Oct. Oct. Oct. Oct. Oct. FLORIDA TENNESSEE INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** . Sept. 13,248 Manufacturing P a y r o lls .............................. Oct. 175 Farm Cash R e c e ip t s ................................... Sept. 135 Department Store S a l e s * * ......................... Oct. 171 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate)*** PRODUCTION AND EMPLOYMENT Nonfarm Employment . ' . ......................... Oct. Manufacturing........................................Oct. Nonmanufacturing................................... Oct. Construction........................................ Oct. Farm Employment........................................ Oct. Insured Unemployment, (Percentof Cov. Emp.) Oct. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Oct. FINANCE AND BANKING Member Bank L o a n s ................................... Oct. Member Bank D e p o s it s .............................. Oct. Bank D e b it s * * .............................................Oct. 13,201 169r 122 175 13,147 176 113 179 12,541 170 137 153 127 130 127 99 91 2.6 40.l r 127 130 126 98 82 2.5 41.7 122 129 121 PRODUCTION AND EMPLOYMENT 127 130 127 98 91 2.4 41.5 92 95 2.9 41.1 Avg. Weekly Hrs. in Mfg., (Hrs.) FINANCE AND BANKING 189 150 155 189 149 148 183 146 149 161 138 146 *For Sixth District area only. Other totals for entire six states. **Daily average basis. ***Figures for personal income reflect revision of current monthly estimates to 1963 U. S. Department of Commerce benchmarks. r Revised. p Preliminary. Sources: Personal inccme estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U. S. Dept, of Labor and cooperating state agencies; cotton consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; industrial use of elec. power, Fed. Power Comm.; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. •7 • D IS T R IC T B U S IN E S S .................. ................... ......... 1........i— -BillionsofDollar» Annual Rate ”Saas. Adj. C O N D IT IO N S N o appreciable slackening is discernible in the region's prolonged economic advance. Although construction activity has slowed som e w hat, it is still providing a strongly positive influence on the economy. The latest a v a ilab le figures on em ploym ent suggest a further ex p a n sion in jobs in m any lines. Consumers' incomes and savings have ! risen further, w hile their spending rem ains at a high level. M eanw hile, favo rab le w eather, large m arketings, and only m oderate downtrends in prices for m ajor farm products have m aintained the farm econ omy's strength. The Federal Reserve Bank of Atlanta joined other Reserve Banks in raising the discount rate in Novem ber to defend the dollar. O v era ll, the construction of homes, roads, factories, and other structures rem ains a rela tiv ely bright elem ent in the econom y, a l though year-to-year comparisons reveal a further slowdown in build ing during October. Even so, total dwelling units and total dollar value of residential construction under contract through the third quarter this year were comfortably larger than they were for the first nine months of 1963. Non residential construction contract volume also continues to outpace the record total achieved in 1963. \S Nonfarm employment apparently expanded further in October. — C otton C onsu m p tio n — Strikes at auto plants in Georgia, which have recently been terminated, caused the state’s manufacturing employment to plummet, but employment gains were registered elsewhere. The rate of insured unemployment remained at the September low of 2.8 percent despite the strikes, partly because workers on strike do not qualify for unemployment benefits. Manufacturing payrolls in creased in October, as a lengthening of the workweek more than offset the decline in the number of workers on the job. Nonmanufacturing jobs increased further, especially in Tennessee. Heightened construction activity stood out as a strong factor in the employment expansion in Tennessee and Louisiana. v* v* Consumer spending, which had shown no upw ard momentum in recent months, accelerated sharply. Early reports indicate that depart ment store sales increased considerably in November. Moreover, furniture store sales in October reached a level exceeded only once before in 1956. Personal income continued to advance in September. Significantly, consumers have added even more to their long-term savings, with an unusually large gain occurring in September. ]S The farm economy is exhibiting strength and resiliency. Citrus and vegetable harvests now on the upswing in Florida are large, and the general crop season is drawing to a successful close elsewhere in this region. Although prices for important farm products are trending down, the declines have not been severe, and farm cash receipts have not fallen much below last year’s record totals. A long awaited rainfall, which benefited fall grain seedings and pastures, came as a boon to many farmers. B o r r o w i n g s f r o m F. R. B a n k s Bank lending continues strong. Member banks increased their loan volume further in October and, judging from reports of banks in leading cities, expanded their loan portfolios even more in November. Deposits and invest ments, on the other hand, moved irregularly. In response to the sharp rise in the British bank rate and the increase in the discount rate by several Federal Reserve Banks, the Federal Reserve Bank of Atlanta raised its discount rate from 3% percent to 4 percent effective November 25, 1964. N o t e : D ata o n w h ic h s ta te m e n ts a re b a s e d h a v e b e e n a d ju s t e d w h e n e v e r p o s s ib le t o e lim in a t e s e a s o n a l in flu e n c e s.
@FedFRASER