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Southern Income Growth and a Changed Economic Environment A review of income developments during 1961 in this part of the South demonstrates once again how closely they are tied to those throughout the United States. When early last year personal income in the nation began to recover from the effects of the 1960-61 recession, so did in come in this area. By the end of 1961, according to preliminary estimates, income in both the nation as a whole and in the six states served by the Federal Reserve Bank of Atlanta had increased enough to bring the year’s total to an amount greater than 1960’s. In the United States, personal income rose 3.6 percent; in District states, 3.9 percent. The resemblance between the pattern of income change in the nation and in the South is probably more significant than minor statistical differences. Minor differences could be accounted for solely by the na ture of the data. The figures are estimates and, like all estimates, are subject to some statistical variance. Moreover, both the state estimates for 1961 made by this Bank and the national ones made by the United States Department of Commerce are based on partial and pre liminary data and are subject to change when more comprehensive data become available. The similarity between the rate of income growth during 1961 in this part of the South and in the nation means, of course, that at best this area made no immediate progress in solving the long-range problem of raising its income to the national level. The preliminary estimates indicate that per capita personal income in District states in 1961 was 72.8 percent of the United States average, the same percent as in 1960, and a little lower than the figure for 1959. The District in the last two years, there fore, seems to have dropped back a little. Does this mean that the long period of improvement that raised per capita income in District states is over? Not necessarily. This is not the first time that per capita income has declined as a proportion of the national total. Between 1930, when Southern income was about 50 percent of the national average, and 1959 the ratio de clined eight times, and each time the drop was subsequently followed by a resumption of the “catching up” process. Personal Income, District States 1960-61 Billions of Dollars Billions of Dollars National Influence on Regional Change Soon afte r the first q uarter of 1961, personal income in each state began to increase and by the end of the y e a r had set a new record. Sources of Income, District States 1961 from 1960 2 Percent Chonge, 1961 from I960, Current Dollars - 0 + 2 4 6 8 10 '1 T T Agriculture ■MM Wages 8 Salaries Manufacturing i wm Mining (incl. Crude Oil) Construction Transportation, Communication, 8 Public Utilities Finance, insurance, 8 Reol Estate Government V////////////A Service Trade , HliHB| Other Income | ! , J ! , j .... Increased income from agriculture contributed to income growth in 1961, and the rate of increase exceeded that of total w ages and sa la rie s from nonfarm sources. Personal Income District States and United States 1961 from 1960 0 ■ ■■■ 1 Fercent increose, 1961 from I960, Current Dollars 2 3 4 5 ...... States 1 6 ■ 7..... 1.... T Mississippi Florida Tennessee Alabama Georgia Louisiana .. ___ L. — I - -- _ ..L ....... 1 ... J i — 1- L . .1 ......... i ... . . Because the economic structures of the states are different, the impact on income of general economic changes varied from state to state. Income developments in 1961 in this area are more the product of national economic changes than of any loss of the “magic touch” of economic growth. Because of the area’s economic structure, the impact of some of the na tional changes was probably greater here than elsewhere. Chiefly responsible for the failure of personal income to increase more than it did were an only moderate ex pansion in wages and salaries paid to manufacturing workers in 1961 and an actual decline in those paid to workers in the construction and mining industries (in cluding petroleum). Although manufacturing employment throughout the nation and in District states had picked up by the end of 1961, it had not reached its pre-recession level. Personal income from manufacturing payrolls was higher in 1961 than in 1960 only because the average of wages and salaries per worker was higher. Although employment in two of the District’s most important in dustries, textile and lumber manufacturing, recovered somewhat in 1961, it averaged less than in 1960. The decline in construction workers’ wages and salaries reflected chiefly the softened state of the home building industry, a situation that prevailed generally throughout the nation. For many years, construction had been the source of a greater share of personal income in this District, especially in Florida, than elsewhere. The slump, therefore, hit the area harder than it did some other parts of the country. More than offsetting these weaknesses were favorable income developments in 1961. The most important were increased wages and salaries from Government, trade, and services activities. Here too, District developments were following the national pattern. The District’s agriculture also contributed substantially to the slightly improved in come in 1961. Production of both crops and livestock was greater in 1961 than in 1960. Average prices re ceived by farmers were up slightly, and higher receipts were supplemented by somewhat greater Government pay ments for soil conservation and crop diversion programs. Consequently, no exotic “made in the South” explana tion is required to explain this area’s pattern of income growth in 1961. Standard economic analysis is adequate. Income developments here were influenced chiefly by the pattern of national change and the economic structure of District states. • 2 • The Process of Southern Economic Growth The pause in the “catching up” process is leading many Southerners to reexamine some of the general principles that have accounted for Southern income growth in the past. As they do, they are reminded that the success of the South in catching up with the rest of the nation so far as income is concerned depends chiefly on two things: how well the region’s economic structure fits into the pat tern of current national economic change, and whether or not the region has the ability to adapt itself to this pattern. During most of the postwar period, the pattern of na tional economic change was favorable to economic growth in the South, and the area succeeded in adapting to it. From the end of the war through 1951 and, to a lesser extent, through 1955, demands pressed heavily against capacity. The so-called “sellers market” resulted not only from ac cumulated demands at home, but from the inadequate productive capacity of a great part of the rest of the world. To meet these demands American producers in vested heavily in plants and equipment to increase output. The South was in an excellent position to capture a growing share of this industrial expansion. Sharply reduced requirements for farm labor provided a source for an expanded industrial labor force; in some cases the region had the natural resources that were needed in the ex pansion. As a result, a substantial portion of the nation’s industrial expansion took place here. The construction in volved raised incomes in many areas of the South, and when the new industrial plants were completed additional manufacturing jobs became available. The process of in come growth, of course, involved increased personal in come from many other sources. In most cases, however, the stimulus can be traced to the stepped-up markets of the postwar period for the natural resources and man power that the South possessed in ample abundance. The Changed Economic Environment But this economic environment, so favorable to the South, gradually changed. As capital investments were made, productive capacity began to catch up with demand. In dustrial capacity increased abroad, and productive effi ciency improved there. More and more, capital invest ment was aimed at improving productive efficiency rather than at expanding output. Although the United States’ manufacturing output continued to increase, except dur ing brief periods of recession, after 1953 this greater out put was produced with fewer workers. Economic expan sion continued, but it was of a different sort than in earlier postwar years. Is this different national pattern of economic change more or less favorable to economic growth in the South? To answer this question, some Southerners are beginning to look more closely into what the nation’s future pattern of growth is likely to be. New and better job opportunities will be required to achieve Southern economic growth. Judging by recent trends, there are likely to be more new job opportunities throughout the nation for those who work with their minds than for those who work solely with their hands. If the pattern of the immediate past continues, the greatest growth in employment will be among professional and technical workers and may take place outside manufactur ing itself. Within manufacturing, practically all the em ployment growth in the 1950’s occurred among non production workers, such as clerks, typists, technicians, accountants, managers, and scientists. For business, the changed economic environment means a sharpening of good old-fashioned competition. This in turn often means a shift in policies and an emphasis on cost-reducing practices. In some cases, attempts to get out from under the profit squeeze stimulate capital ex penditures, cause the closing of inefficient plants, and lead to plant consolidations. Sometimes these attempts arouse interest in plant relocation whenever this might result in cost savings. Under these circumstances, some communities find that job opportunities in manufacturing are increasing, despite the relative stability in the total number of manufacturing jobs. Southerners are discovering that since manufacturing employment is no longer expanding vigorously, communi ties all over the country are stepping up their activities to retain or capture whatever manufacturing expansion is taking place. Businessmen are found to be using different standards for plant location. Some Southern communities are discovering that the special inducements, such as tax concessions or provision of plants and other facilities financed through public credit, that once were enough to swing decisions in their favor are now being matched or bettered by similar offers from all over the country. If they are to obtain the kind of manufacturing plants they want, they also have to offer such inducements as high labor skills, research opportunities, and educational facili ties, in addition to the standard attractions of nearness to markets, good transportation, and a potentially large labor force. In this period of heightened competition for a share in the nation’s economic growth, Southerners are wondering what their region’s future will be. Many of them conclude that the area will have an increasing share only if it stands ready to accept the inevitable changes and prepares its labor force for the kind of economic environment that ap parently will be characteristic of the future. The South has demonstrated in the past that change is possible. Previous efforts toward improving education are beginning to appear in the form of a better trained labor force. With the renewed concern for improving the South’s educational systems, especially higher education, and an extension of technical and vocational training in many areas, the South is apparently preparing itself for what ever the future may bring. C h a r l e s T . T a y lo r The D e c em b e r 1961 R e v i e w con tain ed an a rticle en titled “Southern B anking A d a p ts to C hanges in P opu lation and In co m e.” D e ta ile d sta tistics relating to this article m a y be obta in ed upon requ est to the R esearch D ep a rtm en t, F ederal R eserve B ank o f A tla n ta , A tla n ta 3, G eorgia. These statistics include tables relating changes in p opu lation to changes in n u m ber o f bank offices and bank deposits, as w ell as tables show ing changes in the banking structure, 1 9 5 0 a n d 1960. • 3 • Financing Bank Loan Expansion Bank loan expansion may now be well underway after a slow start. Total loans at District member banks, sea sonally adjusted, did not begin to rise until August 1961, six months after the turn-around in total economic ac tivity. The pick-up in loans, moreover, came later in the current period of expansion than it did at the comparable stage of other postwar recoveries. Because of this, eco nomic and financial analysts last summer were asking, “When will loan demand rise?” Now they are asking, “How much will loans increase, and how will loan ex pansion be financed?” Bank Loans Expand Expansion in economic activity has been the major force underlying the rise in bank loans. According to prelimi nary figures, total personal income— the most compre hensive available measure of total economic activity— rose about 4.0 percent in the last ten months of 1961, and total loans at member banks increased 4.7 percent. During this period, the rate of loan expansion varied widely among District states, ranging from 2.6 percent in Florida to 12.8 percent in Mississippi. States experienc ing the sharpest loan increases were the ones that generally registered the greatest gains in income. Expanding economic activity does not, of course, have a uniform impact on the credit demands of all businesses and consumers. Some firms whose output or sales have risen sharply may require additional credit to finance in ventory accumulation and other operating activities. If these same firms have limited funds from internal sources and do not have access to the capital markets, they are likely to queue up at the bank. Other firms may require little or no additional credit, either because their volume of business has changed little or because their financing requirements have been satisfied without recourse to the banks. As the economy proceeds upward, however, businesses in general need additional credit. Growth in income, which accompanies increases in output and em ployment, also tends to increase the willingness of con sumers to incur debt for the purpose of purchasing auto mobiles and other durable goods. District businesses and consumers have only recently begun to appreciably step up their borrowing from banks. The upsurge in the credit demands of these two important sectors of the economy provided the big boost to loan expansion in November and December. Between July and October, a significant share of the moderate increase in total loans at member banks was accounted for by inter bank loans and loans secured by real estate. Loans in this latter category have continued to rise sharply in recent months. The trend in total loans has indeed been up. How far and how fast the rise will continue depends largely upon the strength and duration of economic expansion. Based on past patterns of expansion, the net increase in total loans at District member banks during 1962 could perhaps range from $500 to $700 million. We can only speculate about the future course of loans. We can say with some certainty, however, that banks in general have considerable resources with which to finance a further increase in loans in the months immediately ahead. Banks Are Currently Liquid The resources presently available to banks for financing loan expansion are mainly their excess reserves and their holdings of short-term U. S. Government Securities. When these two financial variables are at a high level, we sometimes say that banks are “liquid.” Excess reserves are a source of bank liquidity because they may be used to support further increases in deposits associated with loans or investment expansion. Large holdings of short term securities also provide banks with liquidity since they may be readily sold or allowed to “run-off.” In either case the funds obtained may be used to meet demand deposit drains or to satisfy an increase in the demand for bank loans. In attempting to measure liquidity statistically, short term securities— those maturing within a year— are gener ally related to deposits, and excess reserves are analyzed net of borrowings. When member bank borrowings from the Federal Reserve are subtracted from excess reserves, a concept known as free reserves emerges. Borrowings are subtracted in order to derive the net volume of excess re serves available to District member banks to finance credit expansion. Our inspection of these two measures of shortrun liquidity, free reserves and the ratio of Government securities under one year to total deposits, leads us to con clude that District banks in general are currently liquid. In December, ten months after the trough in economic activity, free reserves at member banks here totaled $45 million, $41 million more than for the comparable date following the economy’s low point in August 1954. In the 1958-59 period of expansion, moreover, member bank borrowings from the Atlanta Federal Reserve Bank exceeded excess reserves six months after the upturn in economic activity. The current high level of free reserves largely reflects Federal Reserve policy designed to main tain monetary ease in the upward phase of the cycle for a longer period than in the past. With strong inflationary pressures absent, monetary ease has been prolonged to help encourage sustainable economic expansion. These free reserve figures for all member banks obscure, as such figures always do, marked differences in reserve levels by class of bank. In December 1961, for example, free reserves of banks in District reserve cities— Atlanta, Birmingham, Jacksonville, Miami, Nashville, and New Orleans— amounted to $7 million, compared to $38 mil lion at banks outside reserve cities, sometimes referred to as country banks. The main reason for the lower level of free reserves at reserve city banks is that this class of bank tends to keep more fully invested than country banks. Their excess reserves, in turn, are maintained at a lower level. Thus, even when reserve city banks’ borrowing from the Atlanta Federal Reserve Bank is at a minimum, as it is now, their free reserve level tends to be rather low. We can see then why reserve city banks are quite • 4 • sensitive to changes in loan demand and credit market conditions. In 1959, for example, when loan demand rose sharply and credit market conditions tightened, reserve city banks responded by liquidating securities and borrow ing from the Federal Reserve at a much greater rate than did country banks. During 1960, when credit demands slackened and credit conditions turned easier, banks pur sued opposite courses of action. In the first half of that year, the initial response of both classes of banks was to reduce their borrowing from the Atlanta Federal Reserve Bank. In the second half, however, the increased supply of reserves associated with monetary ease was used by member banks largely to ac cumulate Government securities. Banks expanded their investments further in 1961, but the rate of increase slowed as loan demand picked up. Between mid-1960 and December 1961, reserve city banks increased their total investments 27 percent, about twice the rate of increase at country banks. This was partly because loan demand was more sluggish at banks in the former group than at those in the latter. Thus, in order for reserve city banks to keep excess reserves down to a reasonably low level and to expand earning assets, it was necessary for them to sharply step up their pur chases of securities. By December 1961 Government security holdings of District member banks were $527 million higher than in June 1960. Reserve city banks accounted for more than one-half of this increase, even though the dollar amount of Governments they own is only about one-half as large as that of country banks. The increase in member bank holdings of Government securities was accompanied by substantial shifts among maturity classes. These changes were the result of the types of securities offered by the Treasury, the passage of time, and the preference of banks for securities with short maturities. In the seventeen months ending Novem ber 1961, District member bank holdings of Treasury obligations maturing within a year rose $798 million. Issues with maturities of more than a year, however, de clined about $199 million. The overall effect of these maturity shifts was to reduce the average maturity of the banks’ Government securities portfolio and to increase bank liquidity. Last November, the ratio of member bank holdings of securities maturing within one year to total deposits was 9.6 percent. This ratio was sharply above the low of 4.4 percent in June 1960, and somewhat higher than the 8.6 percent level at the comparable stage of the 1958-59 period of expansion. Even if banks are reluctant to reduce this ratio to past low levels, they appear to be in a position to finance a sizable expansion in loans through the sale of securities. In the current period of expansion, total loans a t District m ember banks, sea so n ally adjusted, turned op la te r Mian in com parable p ostw ar periods of recovery. In the recent reces sions, m oreover, total loans declined slightly w hereas they rose in com parable past periods. Percent Percent Since mid-1961, total loans, seaso n ally adjusted, have e x panded a t m ember banks in a ll District states. In December, excess reserves w ere higher a t reserve city and country banks in the District than they w ere a t the com par ab le stage of other postw ar cycles. Member bank borrowings from the Atlanta Federal Reserve Bank rem ained a t a low level throughout 1961. Longer-Term Liquidity Has Also Improved How willing bankers may be to increase their loans in the months ahead will depend partly upon how they choose to allocate their resources between loans and investments. During the past fifteen years or so, loans have expanded relative to investments as banks helped supply the credit needs of a growing economy. The longer-term rise in the importance of loans in bank • 5 • portfolios may contribute in some degree toward reducing bank liquidity. This may occur unless offset by other de velopments because, unlike securities, loans cannot be disposed of to meet unforeseen contingencies, even at a loss. Changes in longer-term liquidity as well as shifts in the composition of assets are sometimes measured by changes in the ratio of total loans to total deposits. This ratio, along with other statistical measures, is helpful in making some judgment concerning the overall liquidity condition of banks at different points in time. The longer-term liquidity of District member banks, measured by the ratio of loans to deposits, has improved somewhat in the past eighteen months. Last December, for example, loans represented 47.3 percent of deposits, compared to a postwar high of 50.5 percent in April 1960. The December ratio, however, is far above the un usually low level of 18 percent that prevailed in the period immediately following World War II. The improvement in longer-term liquidity during the last recession, characterized by a decline in the loandeposit ratio at all member banks, was not shared equally by the different classes of banks. Since the spring of 1960, the ratio at banks in leading cities has declined somewhat more than at banks in smaller cities and towns, primarily because loans increased at a slower pace. Differences in recent rates of increase in loans and de posits in various geographic regions have also largely deter mined the nature of changes in loan-deposit ratios at banks in individual District states. The sharpest decline occurred in Florida, where deposits rose much more rapidly than loans. In Mississippi, however, loan expansion exceeded deposit growth, and the ratio reached a postwar high in December of 52.9 percent. A l f r e d P. J o h n s o n The table on D ep a rtm e n t S tore Sales an d In ven tories, w hich usually appears on this page o f the R e v i e w , is o m itte d this m onth. T he data show n on this table are in clu ded in statistical release G .7 .2 . A d d ress requ ests to R esearch D ep a rtm en t, F ederal R eserve B ank o f A tla n ta , A tla n ta 3, G eorgia. Bank Announcements On January 1, the nonmember Bank of Rockdale, Con yers, Georgia, began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers are J. P. Culpepper, Jr., President; M. H. Ivey, Vice President and Cashier; and R. R. McDonald and Olive C. Underwood, Assistant Cashiers. Capital totals $160,000, and surplus and undivided profits, $228,391. The Central Plaza Bank, St. Petersburg, Florida, a newly organized nonmember bank, opened for business on January 3 and began to remit at par. Officers in clude Hubert Rutland, President; Fred L. Wagner, Vice President; Charles G. Tobias, Assistant Vice Presi dent; Rutland Rowe, Cashier; and Addie M. Caverly, Jesse B. Hagewood, and Violette Rodrigue, Assistant Cashiers. Capital totals $700,000, and surplus and un divided profits, $300,000. Personal Income in Sixth District States (Seasonally Adjusted Annual Rates, in Millions of Dollars) N o v.1 1961 A l a b a m a ........................." 5 ,1 9 9 F l o r i d a ............................... 1 0 ,7 3 7 G e o r g i a ............................... 6 ,8 6 0 L o u i s i a n a ......................... 5 ,5 3 8 M i s s i s s i p p i ......................... 2 ,8 1 4 T e n n e s s e e ......................... 5 ,8 9 8 T o t a l ..................................... 3 7 ,0 4 6 ‘Preliminary. O ct.2 1961 5 ,1 2 1 0 ,6 0 6 ,7 6 5 ,5 3 2 ,8 4 5 ,7 6 3 6 ,6 3 1 2 2 6 3 8 2 Sept.1961 N ov. 1960 5 ,0 3 5 1 0 ,6 0 5 6 ,6 0 9 5 ,3 8 5 2 ,6 6 3 5 ,7 5 5 3 6 ,0 5 2 4 ,8 5 8 1 0 ,1 0 3 6 ,4 0 6 5 ,2 5 6 2 ,6 0 3 5 ,5 8 1 3 4 ,8 0 7 -Revised. Debits to Individual Demand Deposit Accounts (In Thousands of Dollars) ALABAMA Anniston . . . . Birmingham . . . Dothan . . . . Gadsden . . . . Huntsville* . . . Mobile . . . . Montgomery . . . Selma* . . . . Tuscaloosa* . . . Total Reporting Cities Other Citiesf . ■ . FLORIDA Daytona Beach* Fort Lauderdale* . Gainesville* . . . Jacksonville . . . Key West* . . . Lakeland* . . . Percent Change Year-to-date 12 Months Dec. 1961 from 1961 Dec. from Nov. 1960 1960 1961 Dec. 1961 Nov. 1961 Dec. 1960 45,031 863,575 40,401 37,185 83,368 301,911 176,957 29,393 60,391 1,638,212 752,794 44,909 920,556 39,995 37,731 90,800 305,998 184,269 30,669 65,543 1,720,470 775,398r 45,384 853,713 38,668 37,322 77,872 326,232 175,772 28,558 55,807 1,639,328 729,452 +0 —6 + 1 —1 —8 —1 ■ —4 —4 —8 —5 —3 —1 + 1 +4 —0 +7 —7 +1 +3 +8 —0 +3 +3 + 2 +7 —4 + 11 + 1 +5 + 1 +8 +3 +2 56,077 232,477 46,524 858,214 18,159 84,464 1,008,127 1,460,295 276,126 88,692 238,456 65,599 478,845 152,151 4,056,079 1,617,870 55,003 204,608 43,724 840,536 17,283 77,545 930,970 1,360,648 257,802 83,239 225,201 71,029 447,201 148,474 3,832,293 1,541,137 55,762 218,438 46,694 893,634 17,541 88,894 996,526 1,439,217 259,115 93,805 218,201 n.a. 458,598 139,027 3,928,926 1,711,422r +2 + 14 +6 +2 +5 +9 +8 +7 +7 +7 +6 —8 +7 +2 +6 +5 +1 +6 —0 —4 +4 —5 +1 + 1 +7 —5 +9 n.a. +4 +9 +3 —5 —3 +0 +4 +6 +8 —1 +8 +4 + 11 +2 + 2 + 16 + 12 + 14 + 18 —1 +4 +0 +7 +3 +7 +4 + 14 “h i +5 +5 —5 —2 —8 + 16 +3 +1 —2 +7 + 1 + 12 +2 +3 +5 +5 +2 + 11 +6 —6 +0 +2 — 15 +4 +4 +3 +0 —2 +2 +4 +5 —2 —1 +4 +0 +12 +9 + 1 +5 —3 +2 —5 +1 +1 —7 —1 —3 +3 —3 —1 —1 +0 +1 +3 —7 —1 —6 +1 —1 —5 +8 +6 —2 +5 —7 —0 —0 +5 +4 +6 +7 +0 +6 —1 + 1 —1 +6 +5 +1 +6 +3 +12 —5 +9 —3 +1 +2 +4 +4 +3 +4 +2 +6 +5 +9 + 0 + 12 +8 —1 +3 +5 —2 +5 +5 + 11 Greater Miami* Orlando . . . Pensacola . . . St. Petersburg . . Tallahassee* . . Tampa . . . . W. Palm-Palm Bch.* Total Reporting Cities Other Citiesf . . . GEORGIA Albany . . . . 62,572 60,354 58,660 45,156 Athens* . . . . 42,671 43,373 2,497,342 Atlanta . . . . 2,319,972 2,184,438 Augusta . . . . 122,398 123,189 120,743 Brunswick . . . 31,003 28,822 27,875 Columbus . . . . 120,642 115,895 115,392 Elberton . . . . 10,064 9,084 9,623 Gainesville* . . . 47,616 46,465 50,287 Griffin* . . . . 22,427 22,039 22,878 LaGrange* . . . 19,229 16,588 20,935 Macon . . . . 144,437 128,860 124,858 38,808 Marietta* . . . 34,119 37,829 Newnan . . . . 27,051 22,915 26,913 Rome* . . . . 51,609 52,139 52,583 185,824 Savannah . . . . 179,289 173,060 35,337 Valdosta . . . . 35,293 34,968 Total Reporting Cities 3,461,515 3,237,694 3,104,415 Other Citiesf . . . 1,063,381 1,030,613 1,043,654 LOUISIANA Alexandria* . . . 74,898 76,269 71,591 Baton Rouge . . . 267,925 271,573 276,174 Lafayette* . . . 69,380 66,973 68,042 Lake Charles . . 83,709 83,358 88,149r New Orleans . . . 1,474,329 1,316,851 1,453,053 1,970,241 Total Reporting Cities 1,815,024 1,957,009r Other Citiesf . . . 607,163 601,459 650,661r MISSISSIPPI Biloxi-Gulfport* 56,726 56,191 53,451 Hattiesburg . . . 38,813 37,759 39,688 Jackson . . . . 347,973 373,134 329,916 Laurel* . . . . 28,578 28,899 30,628 Meridian . . . . 44,491 47,294 44,590 Natchez* . . . . 24,488 24,342 24,521 Vicksburg . . . 23,247 23,537 22,051 Total Reporting Cities 564,316 591,156 544,845 Other Citiesf . . . 322,285 297,194 303,527r TENNESSEE Bristol* . . . . 53,741 50,824 52,432 Chattanooga . . . 355,821 345,450 337,025 Johnson City* . . 49,654 44,188 47,301 Kingsport* . . . 90,440 94,957 83,171 Knoxville . . . . 281,073 257,163 279,810 Nashville . . . . 837,428 864,117 746,225 Total Reporting Cities 1,668,157 1,656,699 1,545,964 Other Citiesf . . . 606,461 591,733 611,025r SIXTH DISTRICT . . 18,328,474 17,690,870r 17,770,228r Reporting Cities 13,358,520 12,853,336 12,720,487r Other Citiesf . . 4,969,954 4,837,534r 5,049,741r Total, 32 Cities . . 11,404,999 10,962,316 10,890,181r UNITED STATES 344 Cities . . . 286,258,000 272,541,000 256,905,000 + 11 + 0 +7 +0 +3 +3 +1 —3 —0 n.a. +2 + 11 + 2 +2 +8 +5 —1 +4 +5 +8 +6 +4 +3 +3 +2 +2 +9 *Not included in total for 32 cities that are part of the national debit series maintained by the Board of Governors. fEstimated. r Revised. n.a. Not Available. •6• Sixth District Indexes S easonally Adjusted (1947-49 = 100) I960 SIXTH DISTRICT Nonfarm Em ploym ent.......................... Manufacturing Employment . . . A p p a r e l....................................... C h e m ic a ls .................................. . Fabricated Metals ..................... F o o d ........................................ . . Lbr., Wood Prod., Fur. & Fix. Paper ........................................ . Primary Metals .................... . T e x t ile s ................................... Transportation Equipment . . . IMonmanufacturing Employment . . Manufacturing Payrolls.................... . Cotton Consumption**.................... . Electric Power Production** . . . . Petrol. Prod, in Coastal Louisiana & Mississippi** . . . . Construction Contracts* ..................... Residential................................... . All Other ....................................... Farm Cash R eceipts......................... . Crops ................................................. . . Department Store Sales*/** . . . . Department Store Stocks*..................... Furniture Store Sales*/** . . . . Member Bank Deposits* . . . . . Member Bank L o a n s * .................... ..... Bank D e b it s * ......................................... Turnover of Demand Deposits* . . . In Leading C it ie s ......................... . . Outside Leading Cities . . . . ALABAMA . Nonfarm Employment . . . . Manufacturing Employment . . . . Manufacturing Payrolls . . . . Department Store Sales** . . . . Furniture Store S a l e s ..................... Member Bank Deposits . . . Member Bank L o a n s .................... . Farm Cash R e ce ip ts.................... . Bank Debits .............................. . FLORIDA . Nonfarm Employment . . . . Manufacturing Employment . . . . Manufacturing Payrolls . . . . Department Store Sales** . . . . . Furniture Store Sales . . . . Member Bank L o a n s .................... Farm Cash R e ce ip ts.................... Bank Debits .............................. GEORGIA Nonfarm Employment . . . . Manufacturing Employment . . Manufacturing Payrolls . . . . Department Store Sales** . . . Furniture Store Sales . . . . Member Bank Deposits . . . • Member Bank L o a n s .................... Farm Cash R e ce ip ts.................... LOUISIANA Nonfarm Employment . . . . Manufacturing Employment . . Manufacturing Payrolls . . . . Department Store Sales*/** . . Furniture Store Sales* . . . . Member Bank Deposits* . . . Member Bank Loans* . . . . Farm Cash R e ce ip ts.................... Bank D e b it s * .............................. MISSISSIPPI Nonfarm Employment . . . . Manufacturing Employment . . Manufacturing Payrolls . . . . Department Store Sales*/** . . Furniture Store Sales* . . . . Member Bank Deposits* . . . Member Bank Loans* . . . . Farm Cash R eceipts.................... Bank D e b it s * .............................. TENNESSEE Nonfarm Employment . . . . Manufacturing Employment . . Manufacturing Payrolls . . . . Department Store Sales*/** . . Furniture Store Sales* . . . . Member Bank Deposits* . . . Member Bank Loans* . . . . Farm Cash R eceipts.................... Bank D e b it s * .............................. *For Sixth District area only. | 1961 NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. . 142 . 122 141 122 189 134 191 119 75 164 89 85 190 149 218 79 390 142 121 187 134 190 118 73 163 86 84 191 150 213 78 401 141 121 187 134 189 118 73 164 87 84 190 150 212 79 383 141 121 186 134 186 118 73 165 86 83 183 149 214 79 368 141 121 190 133 186 118 74 166 87 84 187 149 220 82 376 142 122 191 133 185 117 74 167 91 84 188 150 225 85 379 142 123 193 133 184 118 74 167 92 85 191 150 232 88 391 142 124 198 133 181 117 74 168 93 85 193 150 236 89 391 142 124 196 133 184 117 74 168 94 85 184 150 232 89 396 143 123 194 133 183 116 74 165 92 85 190 151 232 88 398 143 124 193 132 187 117 75 164 94 85 204 151 235 92 377 143 124 195r 133 190 117 75 165 92r 85 202r 151 239r 91 386 143 124 197 133 190 119 75 164 93 85 202 150 238 95 n.a. 250 288 304 276 132 94 199 187 237r 134 189 359 282 151 163 119 239 309 291 324 134 97 191 177 224 127 189 351 287 162 176 125 237 315 330 303 145 123 191 181 221 130 192 355 279 156 168 116 241 324 343 309 136 104 205 178 221 134 189 353 293 155 167 122 244 345 362 330 126 99 189 183 229 135 191 354 268 146 164 111 253 360 388 337 136 113 192 175 225 129 191 357 288 165 183 127 252 372 412 340 141 117 191 185 227 130 189 355 287 154 175 119 243 384 393 377 125 97 175 194 227 135 193 353 275 162 179 129 243 394 402 387 150 139 187 179 239 132 190 359 284 166 189 122 239 402 406 400 131 104 197 192 239 143 194 361 281 152 164 126 251 375 431 329 173 162 194 188 242 139 199 363 287 161 170 119 253 351 374 333 169 147 202 189 244r 138 197 365 302 161 170 117 267 n.a. n.a. n.a. n.a. n.a. n.a. 196 244 n.a. 200 372 291 162 172 123 124 102 175 166r 113 167 299 121 243 125 101 175 158 103 169 300 115 247 123 101 175 156 106 170 299 126 238 123 101 177 166 112 167 303 133 248 123 102 183 173 124 169 298 115 231 124 102 185 163 101 163 304 126 264 125 103 191 168 112 162 301 118 251 125 104 196 177 111 163 295 117 239 125 105 195 171 117 163 302 113 253 125 104 197 175 114 167 303 118 252 125 104 204 166 108 170 304 163 262 126 104 209r 163 120 168 309 155 266r 125 104 196 172 n.a. 172 314 n.a. 245 201 208 384 276 158 250 560 232 413 200 206 368 264 154 247 550 266 414 200 207 374 264 155 252 556 264 396 200 209 373 287 161 247 556 197 413 200 209 392 269 156 248 550 227 377 202 211 406 263 151 250 559 244 421 203 213 414 277 155 247 555 257 428 203 215 443 290 162 253 553 211 396 204 214 432 274 148 250 561 292 426 204 214 437 284 167 254 567 246 420 204 215 441 280 171 260 567 200 431 205r 216 428 288 155 260 568 215 445 205 216 428 296 170 263 570 n.a. 416 134 117 199 157 124 169 285 144 263 134 116 200 155 131 173 292 152 254 133 116 203 166 138 172 292 171 266 134 117 205 155 132 172 290 149 244 134 118 215 166 133 175 292 144 266 134 118 217 166 133 173 291 147 269 134 119 223 175 136 176 289 127 266 134 119 218 159 136 171 292 193 269 135 119 215 167 139 175 289 151 267 136 120 223 165 133 183 296 184 279 136 120 227r 168 128 180 300 156 282 136 119 224 175 n.a. 183 300 n.a. 279 . . . . . . 134 191 117 76 165 88 . . . . . 185 150 217 83 369 . 233 . 324 . 308 . . . . . . . . . . . . 156 131 201 182r 235 133 188 352 283 153 162 Ill . . . . . 125 103 183 155 Ill . 294 . 130 . 249 . . . . . 201 207 384 272 158 . . 551 . . 420 . . . . . . . . . . . . . . 291 . 120 . 257 134 119 205 163r 130 170 289 148 256 . . . . . . . . . . . . . . . . . . 128 93 175 155 166 166 331 113 234 129 92 177 151 163 165 319 93 210 129 91 173 151 152 167 322 103 207 128 92 177 155 147 163 314 104 234 128 91 180 149 158 169 331 98 213 129 91 179 149 165 166 324 105 230 128 90 179 157 159 167 326 112 246 127 90 178 157 164 172 327 104 218 127 90 177 152 159 169 331 112 230 127 89 175 148 185 171 337 109 228 127 90 179 144 177 174 335 130 224 127 90 181 147 186 173 331 137 229 127 91 181 158 196 174 346 n.a. 232 . . 135 . . 133 . . 239 . . 153 . . 99 . . 199 . . 433 . . 162 . . 258 134 131 240 165r 102 209 460 136 254 137 130 244 149 95 204 442 86 238 136 129 237 146 100 205 446 99 234 137 130 241 154 108 207 442 116 256 136 132 244 157 95 208 449 90 236 137 134 243 153 85 210 455 99 243 136 135 256 165 91 208 451 99 256 137 136 259 169 112 207 446 100 246 137 136 260 156 116 205 458 102 258 138 136 263 160 119 208 460 92 256 138 137 265 155 105 213 464 174 260 138 138 264r 165 110 215 477 181 282 137 139 265 171 103 221 502 n.a. 265 . . . . . . . . . 124 123 217 157 94 170 328 86 236 124 123 215 147 85 170 315 96 248 124 123 216 154 95 176 319 99 243 124 123 216 151 98 176 310 99 255 124 123 222 147 100 175 311 101 233 125 124 224 141 91 174 315 96 258 126 125 230 152 84 175 312 101 255 126 125 227 157 90 179 313 100 256 126 124 234 146 89 176 320 109 254 126 125 231 157 102 179 323 93 248 126 125 228 150 97 181 325 127 246 126 125 235r 154 101 180 326 132 263 125 126 239 158 n.a. 183 337 n.a. 249 . . . . . . . . . 134 118 205 158 131 128 93 168 140 160 164 323 137 225 125 124 218 156 100 169 314 143 247 Other totals for entire six states, n.a. Not Available. p Preliminary. r Revised. **Daily average basis. Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U.S. Bureau of Census, construction contracts, F. W. Dodge Corp.; petrol, prod., U.S. Bureau of Mines; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. • 7 • D I S 119 4 7 " 4 9 * 100 .......................................... 142 T R I C 1 ................................. M | I I M T B U S I N E S S C O N D I T I O N S I _____ *__________ _________________ _ Nonfarm Employment In Ja n u a ry most of the District's economic indicators, seaso n ally a d justed, w ere substantially above the February 1960 trough of the re cent recession. Farm output and prices of major farm products were higher than in early 1961. Consumer spending and bank lending were also higher. Personal income, the District’s most comprehensive measure of economic activi ty, was at or close to a record level. These indicators of output and income show that recovery has progressed reasonably well; but employment continues to be sluggish, and unutilized resources still exist. Labor and other economic re sources will be utilized more fully, however, if the optimistic forecasts for further economic expansion in the current year are realized. is* U* 126 ^ Mfg. Employment V Electric Power Production That general economic activity has risen further in recent months is indicated by the expansion of personal income. Reflecting income from Construction Contracts all sources, including wages and salaries from nonfarm employment, personal income reached a record high in November. Expanded incomes encouraged consumers to spend more freely in the latter part of last year than they did in the summer and early fall, according to seasonally adjusted measures. Depart ment store sales reached a record high in December but declined in January, according to preliminary figures. Sales of all stores with one to ten outlets, available only after a greater time lag, reached a record high in November. u* v* Nonfarm em ploym ent edged dow nw ard in December, after holding steady in the previous majith. Small declines occurred in all District states except Florida, where employment held steady for the third consecutive month. For District states as a group, manufacturing employment rose slightly further, but the average work week was shortened somewhat. Payrolls, as a result, were little changed. The gain in manufacturing employment largely reflected in creases in food, apparel, primary metals, and textile industries that were only partly offset by small employment declines in other manufacturing industries. Cotton consumption pushed upward strongly in December, more than recover ing a slight loss in November and indicating a further improvement in cotton textile activity. Construction employment, which had been steady for several months, declined in December. The latest three-month average of contracts for future construction, based partly on December data, also declined. u* l\r bank u e D it S i Dept Store Stocks Increasing strength has characterized the farm economy recently, although a cold w ave in m id-January w as harmful to some farm ers. Total livestock marketings in most areas held near recent high levels. The average of prices received by farmers increased as prices for vegetables, broilers, beef cattle, oranges, and tobacco rose. Cash receipts in November de clined only slightly from the high levels of October, and recent strength in prices for major products suggests that gains in cash receipts have been main tained. „ v* v0 Member Bank Loans The demand for bank loans has increased further in recent months. In December, total loans at member banks, seasonally adjusted, rose sharply as consumers and businesses stepped up their borrowing. The December rise marked the fifth consecutive month of increases. Loans at member banks in leading cities declined less in January than in the same month of most other recent years. Investments of all member banks in the District have increased only moderately over the period of general loan expansion. ^ )S __ o0(- Member Bank Deposits PERCENT OF REQUIRED RESERVES Borrowings from F. R. Bank jS Ii iiii 1959 Ii iiiiIii I960 Total member bank deposits, season ally adjusted, also rose in December, after a slight decline in Novem ber. Time deposits at banks in Excess Reserves I i m I"I "I ^"w*14 1961 iii 1962 leading cities increased much more than usual in January, following announce ments of increases in interest rates on time and savings deposits by a large number of banks.
@FedFRASER