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Review
Atlanta, Georgia
July
•
1966
Vol. LI, No. 7
Also in this issue:
DISTRICT FARM EMPLOYMENT
CONTINUES DECLINE
DIVERSIFICATION AIDS
ALABAMA’S GROWTH
TIME AND SAVINGS DEPOSITS
IN PERSPECTIVE
SIXTH DISTRICT
STATISTICS
DISTRICT BUSINESS
CONDITIONS
The Impact of Defense Spending
on the District Economy
The escalation of the Viet Nam conflict has reversed a decline in defense
purchases of goods and services. Moreover, in each of the last four
quarters, the increase was greater than that in the preceding quarter.
The change in defense purchases accounted for 18 percent of the gain
in gross national product in the first quarter of this year, which con
trasts sharply with 7 percent of GNP going for defense spending in
1965. What has this increase meant to the District economy?
The impact of defense spending on a region depends upon the com
position of national defense spending, the structure of the region’s
economy, and the additional spending resulting from the initial defense
expenditures in the area. The first two factors are principal determinants
of the amount and makeup of defense spending in the region, and for
convenience, can be referred to as the structural effect. The third factor
will be labeled the multiplier effect. A look at these three factors will
provide a basis for estimating the effect of increased national defense
spending on the District.
National Defense Spending
During the first half of 1965, defense spending remained essentially
unchanged, as stepped-up procurement, depicted by the rise in defense
shipments, was offset by a decline in the armed forces. While procure
ment continued upward, the armed forces expanded after June. A jump
in military payscales in September added $1 billion to personal income
at an annual rate. By April of this year, the number of armed forces
personnel passed the 3 million mark from a low of 2,680 thousand
only ten months earlier. Military wages and salaries advanced from
$11.8 billion in the second quarter of 1965 to $14.4 billion in the first
quarter of this year.
Defense spending will increase in the coming months. The third
chart on page 50 evidences a continued high level of military procure
ment. Although some decline occurred in the first-quarter 1966 contract
awards because of the bunching of orders in the previous four months,
the level remains considerably above the year-ago figure. Much of the
production generated by prime contracts in recent quarters will occur
only after a lag of several quarters. Department of Defense payrolls will
increase by 3.2 percent because of recent legislation raising military and
civilian payscales.
In view of the increases in military pay rates, it appears that a greater
proportion of the recent gain in defense spending went for wages and
salaries. According to the latest data available (1963), military and
civilian wages and salaries accounted for 35 percent of expenditures for
military services and foreign military assistance, and procurement ac
counted for the remaining 65 percent.
District Defense Employment
Both the higher level of defense spending and its emphasis on higher
wages and salaries have given a special push to the District economy.
Defense spending has increased sharply since mid-1965.
---- _ -----
1
--- 1
i------ ----------- r
U n it e d S t a t e s D e f e n s e P u r c h a s e s o f G o o d s a n d S e r v i c e s
— 1 95 7 -5 9 = 1 0 0 .
S e a s . A d j.
1962
1965
1963
1 9 5 fi
Both procurement and payrolls have shared in the gain.
U n it e d S t a t e s
1 95 7-5 9= 10 0
S e a s . A d j.
S h ip m e n ts o f D e fe n s e P r o d u c t s
M ilit a r y W a g e s a n d S a la r ie s
1
1
1964
1965
1Sli€
The upsurge in defense spending has taken place
within the District, as well as the nation.
P o rc e n l
M ilit a r y P r im e C o n t r a c t A w a r d s
195 7-5 9= 10 0
S e a s . A d j.
i —L i
1965
19S6
An important part of the $5.3-billion advance in District
personal income during the past 12 months came from
the increase in defense spending. For example, a speedup
in shipbuilding for the Navy in Louisiana and Mississippi
and expanded work on defense contracts by aircraft com
panies in Alabama, Florida, and Georgia have boosted
transportation equipment payrolls. In Tennessee, employ
ment at ordnance and control instrument industries has
jumped over 30 percent in the past year.
The large number of defense installations in our region
play an important role in the nation’s defense. As of June
30, 1965, the Department of Defense had total payrolls of
$1,960 million in the six states. These payrolls include
$1,211 million for military personnel and $748 million for
civilian personnel. With 9.1 percent of national personal
income, the District states account for 13.5 percent of
D.O.D. military and civilian payrolls.
Defense payrolls are considerably more important in
some District states than in others. Florida and Georgia
received over half of the six states’ total as of June 1965,
with D.O.D. payrolls of $620 million and $530 million,
respectively. D.O.D. payrolls in Alabama were $358 mil
lion; Louisiana, $172 million; Mississippi, $147 million;
and Tennessee, $135 million. Redstone Arsenal in Hunts
ville makes Alabama the only District state in which
D.O.D. civilian payrolls are greater than military payrolls.
•50*
District Defense Procurem ent
Although the District states have a higher percentage of
personal income coming from D.O.D. payrolls than the
nation, they have a smaller percentage of manufacturing
production in defense-oriented industries.1 The 1963
Census of Manufacturing credits the region with 8 percent
of value added in manufacturing, but only 4 percent of the
national value added in defense-oriented industries.
The lesser importance of defense-oriented industries to
the District is not surprising, as a smaller proportion of
District manufacturing is in durable goods industries than
is the case for the U.S. Yet the area plays a larger role
in defense procurement than is indicated by the figures
for defense-oriented industries. Last year, the District
states accounted for 8 percent of prime contract awards
over $10,000. The higher percentage of the national total
the region has in prime contract awards than in the
defense-oriented industries can be explained by the wider
coverage of prime contract awards and a larger number
of these contracts going to the District in 1965 than in
1963.
The table shows that the District has a relatively large
share of contracts in nondefense-oriented industries; the
area claims 23 percent of the textiles, clothing and equip
age, and construction contracts.
The high percentage of prime contracts for construction
and services going to the region reflects a large number of
military installations. The textile, apparel, and petroleum
refining industries in the District represent an important
part of their respective national markets, so these indus
tries account for a sizable share of defense contracts. Yet,
these industries are not “defense-oriented,” as only a
small proportion of their total output is for defense.
Florida and Georgia lead the District in the value of
prime contracts received, as is the case for D.O.D. pay
rolls. In the last calendar year, Florida received more
defense contracts than Georgia. The reverse was true in
1964.
A look at the types of procurements by states illustrates
the wide diversity of contracts received. No two District
states have the largest volume of contracts in the same
procurement category. Georgia received the majority of
her contracts for aircraft equipment. Florida’s largest
volume was for missile and space systems, although con
struction, services, and electronics and communications
equipment also accounted for a substantial volume of
contracts. Over half the contracts in Louisiana and Mis
sissippi went for petroleum products and ships, respec
tively. A considerable diversity in the contracts received
occurred in Alabama and Tennessee. Construction, the
leading procurement category in Alabama, accounted for
only 7 percent of the state’s total defense contracts. Am
munition led Tennessee prime contract awards, with 22
percent of the state’s total.
Defense prime contracts are indicative of defense pro
curement trends, even though the data has drawbacks.
First, there is a variable lag between the letting of the
contract and the production of goods and services. Second,
^ h e 30 defense-oriented industries surveyed in “ Special Report on DefenseOriented Industries” in the 1963 Census of M anufacturing account for
the major portion of government procurement, and approximately 62 percent
of their shipments go to the Federal Government.
M ONTHLY
R E V IE W
Defense spending in the District probably amounted to
over $4 billion last year. Although total national defense
purchases of goods and services amounted to $50 billion,
a sizable portion was spent abroad. According to Bolton,
defense spending abroad averaged about $7 billion. With
the conflict in Viet Nam, the figure would likely be higher,
and domestic defense spending would be around $40
billion.
extensive subcontracting by the prime contractors makes
the value of the production in the state less than the value
of the contract award. For many large contracts, over
half the work is subcontracted. Therefore, one needs to
know the relation between inflowing subcontracts and out
flowing ones.
There is reason to believe that the District’s inflow of
subcontracts is greater than its outflow. For establishments
with over $100,000 in defense shipments, the District’s
percentage of national shipments on subcontracts was
greater than the percentage of national shipments on prime
contracts in 1963.2 Moreover, many of the area’s defense
contracts are for construction, services, textiles, and fuels.
Subcontracting outside the area is probably small for these
categories.
This region’s defense production probably accounted
for about 8.5 percent of the national total last year. A
recent study entitled Defense Purchases and Regional
Growth by Roger E. Bolton estimated that about 60 per
cent of the total work on defense contracts occurred in the
year the contract was let; 30 percent, the following year;
and the remaining 10 percent in the third year. If this esti
mate is accurate, the region’s defense production last year
depended upon defense prime contracts issued in 1965,
1964, and 1963. Applying these timing adjustments to
defense prime contracts, we estimate area defense produc
tion as 8.5 percent of the national total. This figure would
be low if more subcontracts were flowing into the area
than were going out.
Weighting the defense production estimate for the
District and its share of D.O.D. payrolls by their re
spective shares of the national total would reveal that
the District’s proportion of total defense spending within
the United States is a little over 10 percent. Since 10 per
cent is greater than the District’s share of most other
national economic variables, defense spending is more
important to the area’s economy than to the nation as a
whole. Accordingly, the region’s economy may be shoul
dering more than its share of the recent buildup in the
nation’s defense.
Multiplier Effects
The $4 billion in District defense spending only tells part
of the story. The total effect on the area’s economy is
considerably greater. The local sector of the economy,
consisting of producers of goods for local consumption,
will expand their operations as outside sources of the
region’s income grow. Recipients of income earned in de
fense production will buy many locally produced goods.
The local producers will then spend the money for goods
and services, and the process will be repeated numerous
times. However, some of the spending goes for goods pro
duced outside the region, and insofar as this happens, the
total effect of the outside spending will be reduced.
With this model in mind, analysts often separate “exo
genous” income from total income. Exogenous income,
which comes from outside the region, generally includes
Federal Government spending and the region’s produc
tion for national markets. In studies of the relation be
tween exogenous income and total income, most analysts
have found that total income is two or three times as large
as the exogenous component, varying with the region and
the definition of exogenous income. These results would
indicate that defense spending in the District supported a
total personal income of $8 billion to $12 billion.
Studies of military spending indicate that the multiplier
effect is usually somewhat lower than that for exogenous
income from nonmilitary sources. Military personnel gen
erally spend a smaller proportion of their income within
the region than do area residents. Many of their purchases
are made at the military base, and in a number of in
‘■’■Ibid.
Department of Defense Prime Contract Awards, Fiscal Year 1965
(Millions of Dollars)
A labam a
Florida
Georgia
Louisiana
M ississippi
Tennessee
Six
States
Percent of
Six-State
Total
Six-State
Percent of
U.S.
T r a n s p o r t a t io n E q u ip m e n t
6 0 .1
5 2 .6
5 2 5 .3
8 6 .3
6 0 .8
8 .1
7 9 3 .3
3 8 .4
9 .4
C o n s t r u c t io n
2 4 .7
1 5 5 .6
6 0 .1
8 .6
5 9 .4
6 .9
3 1 5 .2
1 5 .3
2 3 .2
M a c h in e r y a n d
E q u ip m e n t
2 1 .1
2 0 6 .6
1 3 .2
.1
1 .9
6 5 .9
3 0 8 .8
1 4 .9
4 .1
S e r v ic e s
2 1 .2
1 6 3 .4
1 5 .9
2 0 .9
2 .8
1 8 .9
2 4 3 .1
1 1 .8
1 1 .6
4 .2
4 .8
1 .7
1 1 6 .3
6 .1
7 .3
1 4 0 .4
6 .8
1 7 .4
2 0 .4
5 .4
F u e ls
T e x t ile s , C lo t h in g , a n d
E q u ip a g e
2 0 .0
2 .1
7 .0
2 8 .2
8 3 .1
4 .0
2 2 .6
O rd n an ce
4 .0
7 .0
5 .6
8 .8
2 .2
4 6 .2
7 3 .8
3 .6
6 .9
O th e r
9 .4
3 8 .0
2 0 .6
1 2 .7
1 1 .9
1 5 .9
1 0 8 .5
5 .3
6 .7
1 6 5 .2
6 3 3 .3
6 6 2 .4
2 5 5 .8
1 5 2 .2
1 9 7 .3
2 ,0 6 6 .2
1 0 0 .0
8 .9
S ta te T o ta l a s P e rc e n t
o f D is t r ic t
8 .0
3 0 .7
3 2 .0
1 2 .4
7 .4
9 .5
1 0 0 .0
S ta te T o ta l a s P e rc e n t
o f U . S.
0 .7
2 .7
2 .8
1 .1
0 .7
0 .8
8 .9
T otal
♦The sum of the parts may not equal the total because of rounding.
JU LY 1966
• 51
•
stances, the family does not live in the local area. These
factors indicate that the estimate of the total impact might
be nearer the lower end of the range. But even if the total
impact were $8 billion, it constitutes a sizable proportion
of the Sixth District’s personal income, which was $48.6
billion last year.
With the recent increases in defense spending so pro
nounced and the structure of the District economy geared
more toward defense spending than the nation, there
can be little doubt that defense spending has contributed
to the faster pace of the area’s economy in the past year.
Further increases in defense spending would place addi
tional demands upon the resources of the region’s econ
omy, which is already utilizing a high proportion of its
capacity.
C. R i c h a r d L o n g
District Farm Employment Continues Decline
A steady downtrend in farm employment for the past 15
years, interrupted by seasonal changes in the number
of farm workers, raises many questions about the farm
labor market. How can the labor supply be so elastic that
labor is available during peak demand? Why does em
ployment change from month to month and year to
year? (Last year the farm labor force in Sixth District
states varied from 640,000 workers in January to 1.0 mil
lion and 1.2 million in May and September, respectively.)
Have seasonal patterns in farm employment changed in
recent years and will they be modified in the future? Will
the long-run trend for farm labor continue downward?
Composition of Labor Force
Much of the elasticity of the farm labor supply can be ex
plained by the composition of the labor force. According
to the United States Department of Agriculture, it is made
up of two basic components, family and hired workers.
“Family workers include farm operators who work on
their farms during the survey week and other family mem
bers doing 15 hours or more of farm work without re
ceiving cash wages.” As defined, the family labor force
tends to be quite broad and flexible. When the work load
increases, sons, daughters, and wives of operators expand
farm employment by working 15 hours or more per week.
As the work load declines, these family members leave
the labor force and cause farm employment to drop. In
1965, farm employment in the District dropped to
877,000 persons, or 9 percent below 1964 and 50 per
cent below 1950.
Although family labor varies considerably from month
to month, the basic level of family workers available
depends upon the farm population. In 1965, the farm
Total Farm Employment
Sixth District States
Family farm workers are leaving District farms at a faster rate
than hired laborers.
http://fraser.stlouisfed.org/
• 52 •
Federal Reserve Bank of St. Louis
population of the United States totaled 12.4 million per
sons, nearly 47 percent below the 1950 level. This sharp
decline in the farm population has reduced the number of
farm families, causing the farm component of the labor
force to decline steadily. Historically, family workers have
been the largest component of the total farm labor force,
and this trend continues in all District states except Flor
ida. However, the ratio of family-to-hired labor is declin
ing, since family labor is leaving the farm at a faster rate.
The hired labor component of the farm labor force “in
cludes all persons who work for pay at farm work during
designated survey weeks.” Like family labor, the num
ber of hired laborers varies from month to month. In
some District states, actual employment of hired workers
is as much as ten times higher in periods of peak demand
than in months of only limited farm work. In all District
states except Florida, the average number of hired em
ployees is also declining but not so rapidly as the family
labor component of the farm labor force.
In Florida, the hired labor force has been growing and
has been sufficient to more than offset the reduced number
of family workers, so that total farm employment is
actually increasing. The expanding production of labor in
tensive crops, such as citrus, sugarcane, and truck crops,
has increased demands for hired workers sharply. Now
the average number of hired employees is approximately
twice as large as family employment. Florida is the only
state that had more farm workers in 1965 than in 1950.
Seasonal Variations
Differences in the month-to-month seasonal changes in
farm employment are explained by the dominant type of
agriculture in different areas. In Alabama, Georgia, Louisi
ana, Mississippi, and Tennessee, most of the cropland is
planted in corn, cotton, soybeans, rice, and other crops
which require large amounts of labor in the spring and
fall. Farm employment expands through the spring and
peaks in May (June in Tennessee), as farmers prepare
fields, plant crops, and start weed control. By midyear,
only limited fieldwork is necessary and employment de
clines for two months. As crops start to mature, the de
mand for labor once more increases and employment
starts to rise. In September and October, when peak har
vesting activities are underway, farm employment reaches
its highest level but declines throughout the rest of the
year.
This seasonal pattern of farm employment is representa
tive of much of the cotton- and feed grain-producing
regions across the nation. However, seasonal farm emM ONTHLY
R E V IE W
Average Annual Farm Employment
Sixth District States
T h o u sa n d s of P e rso n s
Th o u sa n d s of P e rso n s
A la b a m a
F lo rid a
Since 1950, total farm employment has declined methodically
in all District states except Florida.
ployment patterns vary slightly from one region to another,
as different growing seasons modify the employment
somewhat.
Seasonal Patterns Change
In Florida, seasonal variations in farm employment have
been changing significantly and now differ considerably
from earlier patterns. In 1950, farm employment tended
to peak twice, with the first crest coming in March, two
months earlier than in other District states, and the other
in September. March recorded the highest level of farm
employment for the year.
The seasonal pattern for farm employment appeared to
be reflecting the demand for labor in two different sectors
of Florida’s farm economy in 1950. The first peak was
caused by the strong demand for labor to harvest citrus
and other early spring crops. Once these crops were har
vested, employment dropped sharply through July or
August. By September, the row crops associated with
traditional agriculture were maturing, causing farm em
ployment to expand once again. After this harvest season,
employment declined.
By 1965, however, the production of the crops that
require large amounts of labor during the spring had
expanded sharply. For example, the output of oranges
and other citrus crops had increased over 35 percent
since 1950. Likewise, the production of winter and early
spring vegetable crops expanded sharply across the entire
state, and in Southern Florida the 1965 production of
sugarcane was over five times larger than in 1950. Mean
while, the production of “traditional” row crops declined
steadily. Corn plantings showed the sharpest decline, with
a reduction of 166,000 acres in the 16-year period. Cotton
acreages dropped to 23,000 acres. By 1965, the fall peak
in farm employment no longer existed.
While seasonal variations in Florida’s hired labor force
vary considerably from other District states, the family
labor component moves similarly to states with “tradi
tional” crop-producing patterns. This seems to indicate
that in Florida the family labor market still reflects the
“classic” agriculture production pattern of relatively small
farms producing row crops with family labor. Meanwhile,
J U L Y 19 66
the hired worker of the total labor force is mainly em
ployed for the labor intensive crops of citrus, vegetables,
and sugarcane. Family labor is relatively unimportant in
the production of these crops.
The overall influence of livestock production on the
seasonal variation of farm labor is probably very small.
However, it may affect the absolute level of farm employ
ment. Generally, on most farms the livestock enterprise
tends to supplement or complement crop enterprises. For
example, many farmers across the District supplement
farm incomes with beef cattle herds. A herd of brood cows
may utilize fed from pasture and hay ground, as well as
graze timber lots and stubble fields after crops are har
vested. Farmers in North Central Florida complement their
crop enterprises by fertilizing shade tobacco land with
manure from feed lots used to fatten feeder cattle. In
these cases, family and hired labor are used more fully
when fieldwork is not pressing.
In some local areas, it might be possible for livestock
enterprises to dominate the seasonal characteristics of the
farm labor market. Month-to-month changes in employ
ment might be small in areas that had a very high con
centration of dairy or poultry operations and relatively
small crop acreages. However, for large regions such as
an entire state, monthly changes in farm employment
will be caused by crop production patterns.
Future Farm Employment
For most District states, main changes in farm labor
since 1950 have been the downtrend in average employ
ment and a slight reduction in the amplitude of the seas
onal variation. The continuous decline in farm employ
ment reflects, in part, the steady reduction in farm popu( c o n t in u e d o n p a g e 5 8 )
Seasonal Patterns of Farm Employment
• 53 •
Painted steel coils are ready for packaging and
shipment at this new coil painting facility.
A weaver in one of Alabama’s
textile mills creates a beauti
ful design with this loom.
Employees at this chemical plant play a
vital role in the production of nylon yarn.
An electric steelmaking furnace re
ceives a charge of molten iron from
blast furnaces.
Diversification Aids Alabama’s Growth
Now in the sixth year of expansion, Alabama’s economy
continues to exhibit strength. Overall gains in recent
months, which have about equaled those of earlier years
of the current upswing, reflect the growing diversification
of the state’s economy. In many cases, the segments which
formerly provided the bulwark of strength are now ad
vancing at a slower rate. Production of coal, coke, iron,
and steel actually declined last year. Offsetting these de
clines and boosting the general economy upward were
larger outputs of pulp and paper, textiles (as measured
by cotton consumption), and machinery.
Economic Activity Expands
Continuing expansion in Alabama’s economy is reflected
in employment gains and a reduction in the number of
unemployed workers. Nonagricultural industries added
about 29,000 workers between May 1965 and May 1966.
Although the large number of young people entering the
work force in May caused some increases in unemploy
ment, the rate still remained below a year earlier.
Increased levels of employment, accompanied by an
11-percent rise in manufacturing payrolls over the past
year, raised personal incomes. Last year’s record farm
income also contributed significantly to the gain. In 1965,
per capita personal income advanced by 8 percent to
$1,910, a level 70 percent as high as that for the entire
nation. It was only 66 percent as high in 1961. Estimates
prepared by this Bank show that personal incomes in
Alabama have continued to rise this year at a faster rate
than in the nation.
As incomes have risen, so has consumer spending. Sales
tax collections, an indicator of consumer spending, are
considerably above the year-ago level. Bank debits, another
measure of spending, have also risen. In most areas the
gain was close to the 10-percent increase for the state.
• 54 •
For the Gadsden area, however, the gain was considerably
higher at 16 percent, while in the Huntsville area the
advance was only 7 percent.
During the past year, Alabamians’ spending for auto
mobiles has been high. Banks have financed a large num
ber of these automobile purchases through the extension
of instalment credit. The expansion in automobile instal
ment loans and the increasing credit demands from other
sectors have resulted in a substantial increase in bank
lending activity in the past 12 months.
Loans and investments of member banks of the Sixth
Federal Reserve District in Alabama were 10 percent
higher than a year ago. Total deposits went up 11 percent,
with time deposits advancing by 14 percent.
In the Birmingham trade and banking area, the cen
ter of Alabama’s iron and steel industry, loans went up
7.1 percent and deposits 8.4 percent, both rising less
rapidly than in other areas of the state. The Dothan area,
primarily an agricultural region, experienced the sharpest
gain, with loans and deposits both advancing about 20
percent. In terms of dollar volume of loans and deposits,
however, this area represents the smallest of the state’s
five trade and banking areas. In the Anniston-Gadsden,
Mobile, and Montgomery areas, bank lending and deposit
growth advanced at a slightly faster pace than the state
average.
Sources of Strength
Although Alabama’s overall record of expansion has con
tinued, the sources of strength supporting her recent
growth have shifted. A more diversified industrial mixture,
and thus a wider range of job opportunities, have stimu
lated her economy.
A wide array of industrial firms, ranging from steel,
chemicals, pulp and paper, plastics, and electronics to
MONTHLY
R E V IE W
the space-related complex in northern Alabama, add
much diversity to the economy. This industrial base is
continuously being broadened. According to figures from
the Alabama State Planning and Industrial Development
Board, the volume of new and expanded industries during
1965 amounted to $623 million. Approximately 136 new
industries were announced in the state last year which will
provide over 10,000 job opportunities when completed.
An additional 18,000 jobs will be created with the ex
pansion of 224 Alabama industries.
On top of the list of growth industries are pulp and
paper. With the demand for pulp and paper products ex
panding rapidly, the abundant water and timber resources
in Alabama should continue to attract an increasing num
ber of forest-related industries.
In addition to new and expanded private industries, the
continuing expansion of educational and space-related
research activity adds further diversification to Alabama’s
economy. This broadened and more varied industrial base
is reflected in the shifting sources of employment gains
during the past year. As the accompanying table shows,
overall employment gains of 3.2 percent in the past year
have about matched the average percentage rise in earlier
years of the current expansion. This has occurred despite
some slowdown in the sectors which formerly provided
most of the strength.
Employment in seven manufacturing industries grew
less rapidly during the last twelve months than in the early
years of this expansion (see table). These industries,
which make up about one-half of the state’s 286,000 man
ufacturing jobs, accounted for a much smaller portion of
the increase during this period. In the previous four years,
these industries netted almost three-fourths of the manu
facturing job gains.
Employment in the primary metals industry was held
back by a declining output of iron and steel following the
strike threat last fall. Steel production also declined last
year, in line with the U. S. pattern. Actually, the 5-per
cent drop in Southern steel production, most of which is
located in Alabama, was greater than the national decline.
Increased imports of steel probably had a greater impact
on the smaller and less diversified mills in the South than
it did in other areas of the country. Installation of more
of the basic oxygen furnaces, such as the one at a Gads
den plant, and the expansion of facilities at other mills
for the production of a wider range of products could
eventually enhance Alabama’s relative share of the na
tional steel market.
A slower rate of employment increases in the transpor
tation equipment industry reflects continuing declines in
shipbuilding and repairs. Most of this decrease was local
ized in the Mobile area, where about nine-tenths of the
state’s employment in this segment is found. Other parts
of this industry— aircraft, automobiles, and railroad equip
ment— added jobs at about the same rate of earlier years.
In the Birmingham area, employment in this industry rose
by nearly 5 percent over the year, primarily reflecting
gains in railroad equipment.
Smaller employment gains in the apparel industry are
mainly the result of a growing shortage of workers. De
mand for apparel continues strong. A leveling off in the
number of jobs in agricultural chemicals contributed to a
J U L Y 1966
A la b a m a
E m p lo y m e n t T r e n d s , b y In d u s t r y C la s s if ic a t io n
May 1961 - May 1966
(Percent changes)
Change
M ay 1965M a y 1966
A verage
Annual
Change,
M ay 1961M ay 1965
N o n a g r ic u lt u r a l
3 .2
3 .7
M a n u fa c t u r in g
3 .9
5 .3
4 .2
5 .1
6 .7
5 .8
3 .2
3 .0
0 .4
4 .2
0 .1
3 .1
3 .1
2 .5
- 1 .2
0 .2
2 .9
4 .4
2 .8
1 1 .9
1 .6
2 .2
3 .3
2 7 .5
1 0 .9
6 .8
1 3 .1
2 .2
3 .2
5 .2
0 .8
2 .1
- 7 .6
5 .0
- 5 .5
7 .6
0 .6
2 .3
1 .4
2 .5
5 .7
2 .9
A dvancin g m ore rapidly in past year
L u m b e r a n d W o o d P ro d u cts
F a b r ic a t e d M e t a ls
T e x t ile M ill P r o d u c ts
P a p e r a n d A llie d P r o d u c ts
P r in t in g a n d P u b lis h in g
R u b b e r P ro d u cts
A dvancin g less rapidly in past year
S to n e , C la y , a n d G la s s P r o d u c t s
P r im a r y M e t a ls
T r a n s p o r t a t io n E q u ip m e n t
A p p a re l
C h e m ic a ls
M a c h in e r y , in c lu d in g e le c t r ic a l
F o o d a n d K in d r e d P r o d u c ts
N o n m a n u fa c t u r in g
A dvancin g m ore rapidly in past year
T r a n s p o r t a t io n , C o m m u n ic a t io n s
a n d U t ilit ie s
G o vern m e n t
A dvancin g less rapidly in past year
M in in g a n d Q u a r r y in g
C o n t r a c t C o n s t r u c t io n
F in a n c e , I n s u ra n c e , a n d
R e a l E sta te
S e r v ic e a n d M is c e lla n e o u s
T ra d e
Based on data collected by Alabama Department of Industrial Relations.
slower rate of overall gain for the chemical industry. Job
gains in industrial chemicals advanced by 8 percent be
tween May 1965 and May 1966. Near Mobile, where a
major portion of the state’s chemical complex is located,
job gains continued to show a rapid increase.
Within the nonmanufacturing sector—which accounts
for about two-thirds of Alabama’s nonfarm jobs— mining,
construction, finance, insurance and real estate, trade and
service-related industries grew less rapidly during the
twelve months ending with May. Representing over onehalf of total nonmanufacturing employment, these indus
tries accounted for less than one-third of the gain. In
earlier years of the expansion, these industries were re
sponsible for over two-fifths of the yearly increase. With
the exception of mining, however, each of these industries
expanded its employment. Mining employment, on the
decline throughout this expansion, dropped at a faster rate
in recent months.
Despite these recent slowdowns in several of Alabama’s
industries, others advanced sufficiently enough to keep the
uptrend in overall employment gains about in line with
previous years. The lumber and wood products and paper
and allied products industries alone, with employment ad
vancing by 4.2 percent and 5.8 percent, respectively, ac
counted for nearly one-fifth of the manufacturing job gains
during the past 12 months. Also, textiles, fabricated
metals, and rubber products advanced more rapidly, help
ing keep overall gains high.
• 55*
rate for another year? A declining pool of employable
workers could hamper future gains. However, a more
diversified economic base will definitely help sustain con
tinuing advances.
T
w
T
Rapid advances in transportation, communications,
utilities, and government employment aided the growth of
nonmanufacturing employment. Over one-half of the rise
came from the government segment, where state and local
government advanced the most rapidly and the Federal
component gained only moderately as a result of a de
cline in defense employment.
&
Jo e W . M c L ear y
This is one of a series in which economic developments in
each of the Sixth District states are discussed. Develop
ments in Florida’s economy were analyzed in the June
1966 R e v i e w , and a discussion of Louisiana’s economy
is scheduled for a forthcoming issue.
Continuing Advances
Can Alabama’s economy continue to grow at the same
Time and Savings Deposits in Perspective
ings deposits at District banks have increased rapidly in
recent years.
A comparison of deposit amounts, by type of inter
mediary claim, is also given in this table. Going on to
Table II, we see a percentage comparison of the relative
importance of time and savings deposits of individuals,
partnerships, and corporations and the change in these
relationships between December 3, 1965, and May 11,
1966.
Savings deposits, or passbook savings, were by far the
largest type of intermediary claim issued by banks in the
District and the United States on both dates. This type of
claim decreased somewhat in importance, but the District
decline in relative importance was considerably less than
the national decline. Thus, while total savings deposits
dropped $1,218 million at U. S. banks, District banks
actually rose $135 million between December and May.
Moreover, no state grouping showed an absolute decline
in amount of passbook savings, so that the decline in rela
tive importance was the result of a slowing in the rate of
gain of savings deposits.
In the nation, people shifted from savings deposits
Member banks in the Sixth District have been giving more
emphasis to consumer-type certificate savings, according
to a recent survey on time and savings deposits by the
Federal Reserve System.* The survey also shows that
these savings, rather than business-type savings, are more
important to District banks than to all-member banks in
the nation. District banks have been no more aggressive
as a group in attempting to attract deposits by paying
higher rates than other banks, although rate competition
has been intense in certain areas. Member banks were
asked to provide detailed information on their savings and
time deposits, types of instruments offered, rates paid, and
maturity structure on December 3, March 2, and May 11.
The survey provides more detail on time and savings
deposits in this District than has heretofore been available.
Table I compares Sixth District banks’ time and savings
deposits with those of all banks in the Federal Reserve
System. Such deposits now account for 39 percent of total
deposits at District banks. Although this percentage is less
than the 46 percent of banks in the nation, time and sav
*Hereafter in the text, all banks discussed are member banks.
T a b le
M e m b e r B a n k T im e
I
a n d
S a v in g s
D e p o s it s
May 11, 1966
Percent of Member Banks
Issuing Specified Instruments
United Sixth
States D istrict Ala.
Fla.
Ga.
I.a.'
Miss.' Term.1
Percent of Total Time and Savings
Deposits to Total Deposits . . . .
United
States
. . 46-
Sixth
D istrict
39
Ala.
Fla.
42
42
Ga.
36
L a.'
Miss.i Tenn.
33
35
42
303
132
918
132
40
18
53
21
96
54
**
**
35
39
**
26
**
**
0
6
**
(M illions of Dollars)
Total Time and Savings Deposits, IPC:l.
Banks Offering Savings Deposits
Consumer-Type Time Deposits
Savings Certificates
Savings Bonds
Other Nonnegotiable CD’s
Negotiable CD's under $100,000
Basiness-Type Time Deposits
Negotiable CD ’s $100,000 and over
Time Deposits, Open Accounts,
Christmas Savings, etc.
All Other
. 110,944
95
99
99
100
100
100
100
97
54
3
24
25
59
7
23
26
63
2
24
25
61
8
29
18
70
13
10
30
38
2
30
35
67
33
21
29
49
1
17
43
10
8
4
5
20
10
8
10
72,871
18,384
9,487
856
4,844
3,197
19,689
13,815
66
14
67
8
42
2
86
8
63
21
85
8
79
0
44
7
3,655
2,219
920
1,892
1,068
646
1,352
1,398
623
201
359
215
441
321
691
200
114
*
46
39
28
16
503
205
22
217
59
39
11
419
408
200
159
12
37
241
196
519
59
**
**
26
23
68
51
91
29
12
*
20
8
28
17
16
1
5,747
3,908
795
’Data are for District portions of these states only.
2As of May 11, 1966; data partly estimated. Percentages of District and six-state member banks as of May 11, 1966, computed from survey questionnaires.
■‘Individuals, partnerships, and corporations.
♦Less than $1 million.
**Withheld to prevent disclosure.
Source for Tables I, II, and III: Board of Governors, Press Release, June 27, 1966, for all-member banks. Data for Sixth District member banks computed from
survey questionnaires.
• 56 •
M ONTHLY
R E V IE W
Table II
Changing Importance of Member Bank Time and Savings Deposits
December 3, 1965, and May 11, 1966
U nited
States
D ec.
Sixth
D istrict
Dec.
M ay
Total Time and Savings Deposits, IPC
(Millions of Dollars)
105,372 110,944 5,325
Percentage Distribution of Total IPC
100
100
A labam a
M ississippi1
Tennessee1
D ec. M ay
Georgia
Dec.
M ay
Dec.
M ay
D ec.
M ay
1,892
964
1,068
609
646
255
303
902
918
100
100
100
100
100
100
100
100
100
76
71
43
39
81
80
47
44
84
87
Florida
M ay
D ec.
M ay
D ec.
M ay
5,747
870
920
1,726
100
100
100
100
75
100
Louisiana1
70
66
71
68
78
Consumer-Type Time Deposits
Savings Certificates
Savings Bonds
Other Nonnegotiable CD’s
Negotiable CD ’s under $100,000
12
(6)
(*)
(3)
(2)
17
(9)
(1)
(4)
(3)
22
(10)
(3)
(5)
(4)
24
(11)
(4)
(6)
(4)
20
(11)
(•)
(4)
(4)
22
(12)
(*)
(5)
(4)
22
(9)
(1)
(10)
(3)
26
(11)
(1)
(11)
(3)
36
(16)
(16)
(1)
(3)
38
(19)
(15)
(1)
(4)
9
(••)
(**)
(4)
(3)
9
(••)
(**)
(4)
(4)
40
(15)
(6)
(12)
(7)
43
(13)
(6)
(17)
(7)
13
(7)
( •* )
(••)
(5)
11
(6)
(••)
(••)
(4)
Business-type Time Deposits
Negotiable CD ’s $100,000
and over
Time Deposits, Open Accounts,
Christmas Savings, etc.
All Other
17
18
7
8
2
3
2
2
21
23
10
10
13
13
4
3
(13)
(13)
(6)
(6)
(1)
(2)
(1)
(1)
(18)
(18)
(9)
(8)
(**)
(**)
(••)
(••)
(3)
(2)
(3)
(2)
(1)
(1)
(2)
(1)
(1)
<•*)
(1)
(••)
(1)
(1)
(1)
(•)
(2)
(1)
(3)
(2)
(2)
(•)
(2)
(*)
(••)
(**)
(••)
(**)
(**)
(••)
(••)
(**)
Banks Offering Savings Deposits
JSee note 1, Table I.
♦Less than one percent.
** Withheld to prevent disclosure. Subgroups of percentages may not add to totals shown because of rounding.
to other types of consumer-oriented intermediary claims.
A similar but less pronounced shift occurred among Dis
trict banks. The four types of claims increased in relative
importance at all banks. Furthermore, savings certificates
grew in significance, both in amount and as a larger com
ponent of total time and savings deposits.
Growth in deposits represented by business-type claims
was less than consumer-type claims at all banks, although
both groups of banks showed gains. Well over half the Dis
trict’s total amount of business-type claims were issued by
banks in Georgia. Moreover, these banks held over threefifths of District time deposits represented by negotiable
certificates of deposits of $100,000 and over.
Table III compares Sixth District banks’ rate of de
posit gain or loss, by type of intermediary claim, with the
average of all banks. Banks in four states of the District
showed a greater percentage gain than the average for total
savings and time deposits of individuals, partnerships, and
Table III
Comparative Rates of Change
December 3, 1965, To May 11, 1966
Percent Change by M em ber Bank Groupings1
Type of D eposits, IPC
U nited
Sixth
States D istrict Ala. Fla. Ga. La. M iss.’Tenn.
5
8
6
10
11
6
19
2
-2
4
2
3
2
5
10
5
40
20
18
33
17
14
28 —15
40
113
44
26
21
13
28
12
17
-7
20
18
30
171
30
33
30
15
4 -1 5
1 -1
18
37
9 -1 0
13 27
68 - 0
13 - 2 6
Business-Type Time Deposits
8
Negotiable CD ’s $100,000 and over 5
Time Deposits, Open Accounts,
Christmas Savings, etc.
11
All Other
26
14
7
46
60
5
-9
20
15
7
-3
20 - 2 2
14 - 3 6
31
35
- 4 -2 1
49
57
64
5
Total
Savings Deposits
Consumer-Type Time Deposits
Savings Certificates
Savings Bonds
Other Nonnegotiable CD’s
Negotiable CD’s under $100,000
45
19
45
0
53
23
^ e e note 1, Table I.
2Growth rates for member banks in Mississippi were substantially affected
by mergers. After making allowance for the mergers, the growth rate in both
total IPC and savings deposits drops below the District average.
J U L Y 1 9 66
corporations. Tennessee banks, subject to state interest rate
ceilings, had a significantly smaller gain than did the
District group or the all-bank group. Mississippi banks,
also subject to rate ceilings, added sharply to their total
time and savings deposits. However, as noted in Table
III, most of the gains resulted from mergers, so that the
growth rate, when adjusted, was almost the same as that
of all banks.
Banks in the District responded to increased competi
tion for available savings flows in about the same way as
did all banks. In the December-May period, the percent
age of banks offering rates on savings deposits between
3.51 and 4 percent rose from 57 to 73. Both proportions
are somewhat higher than those of all banks. Georgia
banks had the lowest ratio of ceiling rate offerings, at 59
percent, while 84 percent of Tennessee banks offered be
tween 3.51 and 4 percent on passbook savings.
The number of banks paying higher rates on savings
certificates rose significantly between December and May.
The most common interest rate paid on these instruments
also increased, from 4 to 4.5 percent. Although 50 District
banks were paying more than 4.5 percent on this type in
strument on May 11, all but 6 of these were in Florida
and Georgia. This indicates that rates in excess of 4.5
percent were not widespread in the District. However, two
District states do not permit these higher rates.
Rate behavior in other consumer-type certificates gen
erally resembled that in savings certificates. Since the
survey, District banks in some areas have raised rates on
time deposits further.
▲
Interest Rates and the Demand for Credit
A recent MONTHLY REVIEW article considers this important
subject and points out the reason for the increase in interest
rates. Free upon request to the Research Department, Federal
Reserve Bank of Atlanta, Atlanta, Georgia 30303.
• 57*
F
a
r m
E
m
p
l o
y
m
e
n
t
Debits to Demand Deposit Accounts
(continued from page 53)
In su re d C o m m ercial B a n k s in th e S ix th D istrict
lation that has occurred since 1950. People will likely
continue to leave the farm in the future, as increases in
mechanization, combined with relatively low farm in
comes and good employment possibilities in the nonfarm sector, enhance migration from farms.
Long-run average employment trends may change in
Florida, however. Since 1950, average numbers of hired
labor have exhibited an uptrend, while family labor has
declined slightly. If present trends continue, family labor
will decline further, as nonfarm employment opportunities
draw these people away from farms.
What are the prospects for continued growth in the
hired labor market? In the past, part of the hired labor
force in Florida has been composed of foreign or offshore
workers. Many of these workers entered the state under
the authority of Public Law 78 of the 82nd Congress. This
legislation was originally enacted in 1951 as a temporary
two-year program but was extended periodically for thir
teen years until Congress permitted it to expire on De
cember 13, 1964. Its termination caused a reduction in the
available supply of foreign labor. During the harvest
season of 1965-66, however, when a severe freeze in late
January caused a critical labor shortage, the Secretary of
Labor did permit the use of offshore labor for the balance
of the harvest season. In future years, the success in se
curing domestic workers as substitutes for offshore labor
will have an important impact on aggregate hired farm
employment in Florida.
The success in developing new harvesting equipment for
the numerous fruit and vegetable crops grown in Florida
may also influence future employment levels. If these
ventures are successful and the harvesting of citrus and
winter vegetables and sugarcane is increasingly mecha
nized, the need for large amounts of hand labor may
diminish. Further moderation of the uptrend in the level
of hired labor employed may also occur if the output of
these labor intensive crops fails to grow at the same rates
experienced since 1950.
Despite the continued downtrends in the District’s total
employment and possible innovations in production pro
cesses that might reduce average employment even further,
the seasonal variations in farm employment will continue.
Even though rapid mechanization of crop production has
occurred already, the main effect on seasonal fluctuations
has been merely to reduce the amplitude of the variation.
A new machine may double or triple the productivity of a
farm worker, but he may still work more hours during
the planting and harvesting season than at other times.
R o b e r t E. S w e e n e y
B a n k A n n o u n c e m e n ts
L o c u s t G r o v e , G e o rg ia , a n o n m e m b e r
b a n k , b eg a n to r e m it a t p a r on Ju n e 1 f o r c h e c k s d ra w n on
it w h e n r e c e iv e d fr o m th e F e d e r a l R e s e r v e B an k.
T h e
F a rm e rs
B a n k ,
O n Ju n e 15, th e A m e r i c a n B a n k , W elsh , L o u isia n a ,
o p e n e d f o r b u sin ess as a n o n m e m b e r p a r-r e m ittin g b a n k .
U . J. P r e v o s t is P re sid e n t, a n d W a y f o r d H o llis, E x e c u tiv e
V ic e P re sid e n t. C a p ita l to ta ls $ 1 0 0 ,0 0 0 , a n d su rp lu s a n d
o th e r c a p ita l fu n d s, $ 1 5 0 ,0 0 0 .
• 58 •
(In Thousands of Dollars)
Percent Change
Year-to-Date
5 months
May 1966 from
1966
Apr.
May
from
1966
1965
1965
Apr.
1966
May
1965
l,4 3 8 ,1 5 6 r
60,077
166,282
502,260
280,437
85,263
1,226,447
55,094
159,645
405,997
269,212
77,090
—5
+ 7
+3
— 11
+5
+ 2
+8
+ 16
+7
+ 11
+ 10
+ 12
+ 14
+9
+ 2
+ 11
+ 11
+ 14
574,574
1,414,016
2,020,545
496,802
205,150
653,432
1,303,839
2,082,065r
464,808
198,716
456,315
1,190,501
1,676,648
418,471
184,820
— 12
+8
—3
+7
+3
+26
+ 19
+21
+ 19
+ 11
+ 17
+ 20
+ 14
+9
+5
1,151,051
445,445
1,192,960
510,615
1,006,054
337,355
—4
— 13
+ 14
+32
+ 11
+22
87,327
4,085,447
249,172
206,422
211,861
245,346
84,415
4 ,178,745r
235,365
189,314
215,457
245,249
84,122
3,593,980
1 94,903r
184,580
189,663
228,071
+4
+ 14
+27
+12
+ 12
+8
+6
+13
+24r
+6
+7
+ 12
.
.
.
.
473,260
116,723
130,571
2,484,408
481,918
111,304
137,754
2,286,063
402,832
98,596
107,925
2,053,227
547,402
483,712
+ 17
+18
+ 21
+21
+ 20
+ 17
+ 17
+ 15
+18
582,084
+3
—2
+5
+9
—2
+0
—2
+5
—5
+9
+6
Chattanooga . . .
Knoxville . . . .
Nashville . . . .
545,720
429,332
1,329,558
447,948
405,148
1,145,514
—1
+3
+8
+22
+6
+ 16
+17
+ 14
+8
+ 13
OTHER CENTERS
Anniston . . . .
Dothan
. . . .
S e lm a .....................
65,276
55,801
38,869
60,982
56,603
41,513
+7
—1
—6
+30
+ 12
+ 8
+ 16
+ 12
+18
43,300
48,784
210,534
80,141
40,110
57,340
204,024
87,896
50,120
49,667
35,858
30,552
46,091
199,940
73,726
+8
— 15
+3
—9
+42
+6
+5
+9
+ 16
+ 11
+ 13
+9
71,719
76,532
34,831
119,818
53,235
18,481
276,684
102,639
119,461
651,373
64,962
79,715
77,225
34,283
123,083
54,581
20,456
309,557
113,953
111,164
642,361
62,898
61,148
67,804
26,223
101,840
48,304
16,333
242,779
85,038
102,564
573,108
57,517
— 10
—1
+2
—3
—2
— 10
— 11
— 10
+7
+ 1
+ 3
+ 17
+ 13
+33
+ 18
+ 10
+ 13
+14
+21
+ 16
+14
+ 13
+ 14
+ 10
+ 18
+12
+ 11
+ 18
+14
+13
+ 14
+9
+8
68,985
38,387
85,708
12,720
70,969
32,712
25,603
27,012
71,691
47,233
10,604
114,075
5,609
39,368
34,811
9,827
20,987
66,070
37,347
80,178
14,570
73,245
30,722
22,530
28,816
66,068
46,882
59,321
35,898
76,563
14,718
63,637
27,265
18,642
23,884
61,073
43,023
9,995
107,820
5,718
34,662
33,678
9,751
22,636
8,827
104,553
5,482
32,800
30,317
8,543
18,943
+4
+3
+7
— 13
—3
+6
+ 14
—6
+9
+ 1
+6
+6
—2
+ 14
+3
+1
—7
+15
—1
—2
+7
+7
+ 16
+20
+9
+12
+9
+12
+9
+4
+9
+9
+ 15
+ 15
Biloxi-Gulfport . .
Hattiesburg . . .
L a u re l.....................
Meridian . . . .
Natchez . . . .
Pascagoula—
Moss Point . .
Vicksburg . . . .
Yazoo City . . .
92,555
49,060
32,169
61,365
33,846
91,327
50,483
34,402
63,890
35,741
77,381
44,499
34,688
58,156
33,471
+ 1
—3
—6
—4
—5
+16
+ 7
+12
— 14
+ 12
+ 20
+ 37
+ 13
+ 17
+ 10
+20
+9
+2
+20
+ 15
+ 15
+ 11
+ 20
+ 10
—7
+6
+1
+19
+ 14
+5
+8
+11
48,866
37,876
34,175
48,899
39,012
30,934
44,636
32,907
30,058
—0
—3
+ 10
+9
+ 15
+14
+15
+16
+ 19
Bristol
. . . .
Johnson City . . .
Kingsport . . . .
66,590
70,231
147,171
68,302
70,860
135 737
61,372
60,705
127,331
—3
—1
+8
+9
+ 16
+ 16
+ 12
+ 13
+13
2 7 ,4 2 8 ,276r 2 3,897,523
3,587,685r 3,161,255
8,640,127r 7,202,151
6 ,731,850r 5,940,605
3,750,206
3,351,435
1,234,614
1,088,584
3,483,794r 3,153,493
+0
—3
—2
—0
+6
+ 1
+3
+ 15
+10
+ 17
+13
+18
+14
+ 14
+
+
+
+
+
+
+
May
1966
STANDARD METR0P0LITAM
STATISTICAL AREASf
Birmingham . . .
1,368/875
64,165
Gadsden . . . .
171,146
Huntsville
. . .
449,424
Mobile
. . . .
Montgomery . . .
295,748
86,691
Tuscaloosa . . .
Ft. Lauderdale—
Hollywood
. .
Jacksonville . . .
M ia m i.....................
Orlando . . . .
Pensacola
. . .
Tampa—
St. Petersburg .
W. Palm Beach . .
Albany
. . . .
Atlanta . . . .
Augusta . . . .
Columbus . . . .
M acon.....................
Savannah . . . .
Baton Rouge
Lafayette
.
Lake Charles
New Orleans .
Jackson
.
.
.
.
. . . .
Bartow
. . . .
Bradenton
. .
Brevard County .
Daytona Beach .
Ft. Myers—
N. Ft. Myers
Gainesville . .
Monroe County .
Lakeland . . . .
.
.
.
.
.
St. Augustine . .
St. Petersburg . .
Sarasota . . . .
Tallahassee . . .
T am p a.....................
Winter Haven . .
Athens .....................
Brunswick
. . .
Dalton
. . . .
Elberton . . . .
Gainesville . . .
G riffin .....................
LaGrange . . . .
Newnan . . . .
R o m e .....................
Valdosta . . . .
Abbeville . . . .
Alexandria . . .
B unkie.....................
Hammond . . . .
New Iberia . . .
Plaquemine . . .
Thibodaux
. . .
SIXTH DISTRICT, Total 27,439,981
Alabama#
. . .
3.485,365
Florida# . . . .
8,437,171
Georgia# . . . .
6,704,718
Louisiana*-?- . . .
3,968,066
1,246,041
Mississippi*-}1 . .
3,598,620
Tennessee*t . . .
553,008
418,533r
1,230,926
13
11
13
12
16
16
12
♦Includes only banks in the Sixth District portion of the state.
•{•Partially estimated. ^Estimated. r-Revised.
M ONTHLY
R E V IE W
S ix t h
D
i s t r i c t
S t a t is t ic s
Seasonally Adjusted
( A ll d a t a
a re
Latest Month
(1966)
in d e x e s ,
One
Month
Ago
1 9 5 7 -5 9
Two
Months
Ago
=
100,
u n le s s
in d ic a t e d
o t h e r w is e .)
One
Year
Ago
Latest Month
(1966)
One
Month
Ago
Two
Months
Ago
SIXTH DISTRICT
GEORGIA
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate) . . Apr. 53,274
Manufacturing P a y r o l l s ................................ May
182
Farm Cash R e c e i p t s ..................................... Apr.
149
Crops
.......................................................... Apr.
146
Livestock ..................................................... Apr.
153
Instalment Credit at Banks, *(Mil. S)
New Loans ..................................................... May
263
R e p a y m e n ts ................................................ May
259
INCOME AMD SPENDING
Personal Income, (Mil. $, Annual Rate) . . Apr.
Manufacturing P a y r o l l s ................................May
Farm Cash Receipts
..................................... Apr.
10,167
183
150
10,043r
186r
150
PRODUCTION AND EMPLOYMENT
Nonfarm E m ploym ent..................................... May
M a n u f a c tu r in g .......................................... May
N o n m an u factu rin g ..................................... May
C o n s tru c tio n .......................................... May
Farm E m p lo y m e n t.......................................... May
Insured Unemployment, Percent cf Cov. Emp ) May
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
130
128
131
141
54
1.1
41.0
130
128r
132
142
58
4 1 .8r
1.3
41.3
247
197
194
247
191
200r
251
188
196
8,148
162
151
8,021r
165
137
PRODUCTION AND EMPLOYMENT
Nonfarm E m p lo y m en t.....................................
M a n u f a c tu r in g ...........................................
A p p a re l.....................................................
C h e m ic a ls ................................................
Fabricated M e t a l s ................................
F o o d ..........................................................
Lbr., Wood Prod., Furn. & Fix. . . .
P a p e r .....................................................
Primary M e t a l s .....................................
T e x tile s .....................................................
Transportation Equipment
. . . .
N o n m an u factu rin g .....................................
C o n s tru c tio n ...........................................
Farm E m p lo y m e n t..........................................
Insured Unemployment, (Percent of Cov. Emp.)
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
Construction Contracts* ................................
Residential
................................................
All O t h e r .....................................................
Electric Power P r o d u c t i o n * * .....................
Cotton Consumption**
................................
Petrol. Prod, in Coastal La. and Miss.**
52,821r
183r
150
158
152
287
249
52,420r
181
147
151
147
292
233
47,965
165
132
158
122
247
219
May
May
May
May
May
May
May
May
May
May
May
May
May
May
May
May
May
May
May
£pr.
May
May
130
130
160
124
143
111
103
112
114
104
168
130
127
69
1.6
41.6
159
163
156
140
118
201
130
130
160r
123
143
111
104
113
114
103
168
130
128
67
1.6
41.8r
152
164
143
134
118
191
130
130
159
123
143
113
104
111
113
103
168
130
132
71
1.8
41.8
170
184
157
134
119
198r
123
122
150
117
130
107
100
108
111
99
149
124
120
75
2.3
41.6
146
155
139
128
113
179
May
June
232
216
230
210
229
210
203
189
May
June
May
177
161
182
174
159
188
173
157
180
158
151
166
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate) . .
Manufacturing P a y r o l l s ................................
Farm Cash R e c e i p t s .....................................
Apr.
May
Apr.
7,184
168
150
7,156r
168
153
7,082r
169
154
PRODUCTION AND EMPLOYMENT
Nonfarm E m p lo y m en t.....................................
M a n u f a c tu r in g ...........................................
N o n m an u fac tu rin g .....................................
C o n s tr u c tio n ..........................................
Farm E m p lo y m e n t..........................................
Insured Unemployment. (Percent of Cov. Emp.)
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
May
May
May
May
May
May
121
120
122
130
67
1.9
41.5
120
119
121
128r
69
2.0
4 2 .Or
FINANCE AND BANKING
Member Bank L o a n s .....................................
Member Bank Deposits
................................
Bank D e b i t s * * ................................................
May
May
May
216
174
164
213
173
184
FINANCE AND BANKING
Member Bank Loans*
All B a n k s .....................................................
Leading C i t i e s ..........................................
Member Bank Deposits*
All B a n k s .....................................................
Leading C i t i e s ..........................................
Bank D e b i t s * / * * ...........................................
ALABAMA
FINANCE AND BANKING
Member Bank L o a n s ..................................... May
Member Bank Deposits
................................May
Bank D e b i t s * * ................................................May
1.1
9 ,946r
182
145
130
127
131
143
62
9,016
167
125
123
120
125
138
67
1.7
41.3
208
171
180r
LOUISIANA
INCOME AND SPENDING
Apr.
Personal Income, (Mil. $, Annual Rate)
May
Manufacturing P a y r o l l s .....................
Farm Cash Receipts
..................................... Apr.
Apr
7,970r
159
142
7,300
147
137
PRODUCTION AND EMPLOYMENT
Nonfarm E m p lo y m en t.....................................
M a n u f a c tu r in g ..........................................
N o n m an u factu rin g .....................................
C o n s tr u c tio n ...........................................
Farm E m p lo y m e n t..........................................
Insured Unemployment, (Percent of Cov. Emp.!
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
May
May
May
May
May
May
120
111
122
137
80
2.2
42.7
119
111
121
140
69
2.4
4 2 .4r
120
112
121
146
72
2.4
42.6
112
106
114
110
77
3.2
42.4
FINANCE AND BANKING.
Member Bank L o a n s * .....................................
Member Bank D e p o s its * ................................
Bank D e b i t s * / * * ..........................................
May
May
May
214
154
168
209
151
168
205
150
166
187
139
149
MISSISSIPPI
6,575
156
126
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate) . . Apr.
Manufacturing P a y r o l l s ................................May
Farm Cash Receipts
..................................... Apr.
4,135
203
150
4,032r
202
155
4,052r
200
168
3,725
181
121
121
120
121
126
66
2.2
42.1
117
115
118
123
77
2.3
41.3
PRODUCTION AND EMPLOYMENT
Nonfarm E m ploym ent..................................... May
M a n u f a c tu r in g .......................................... May
N o n m an u factu rin g ..................................... May
C o n s tru c tio n .......................................... May
Farm E m p lo y m e n t.......................................... May
Insured Unemployment (Percent of Cov. Emp.) May
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
131
143
126
132
59
1.7
41.7
131
142
126
140
59
1.7
41.7
131
143
126
139
64
2.2
41.7
126
133
122
129
68
2.4
41.5
218
173
169
197
157
155
FINANCE AND BANKING
Member Bank L o a n s * ..................................... May
Member Bank D e p o s its * ................................May
Bank D e b i t s * / * * .......................................... May
272
210
186
277
209
198
268
210
190
220
168
170
FLORIDA
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate) . .
Manufacturing P a y r o l l s ................................
Farm Cash Receipts
.....................................
TENNESSEE
pr. 15,126
May
209
Apr.
160
A
15,161r
206
161
15,020r
207
147
13,765
189
164
INCOME AND SPENDING
Personal Income, (Mil. $, Annual Rate) . . Apr.
Manufacturing P a y r o l l s ................................ May
Farm Cash Receipts
..................................... Apr.
8,514
182
127
8,408r
181r
136
8,350r
178
124
7,584
161
107
PRODUCTION AND EMPLOYMENT
Nonfarm E m p lo y m en t..................................... May
M a n u f a c tu r in g .......................................... May
N o n m an u factu rin g ..................................... May
C o n s tr u c tio n .......................................... May
Farm E m p lo y m e n t.......................................... May
Insured Unemployment (Percent of Cov. Emp.) May
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
132
139
128
153
74
1.7
41.3
131
138
128
154
70
1.9
41.3
131
138
127
156
78
2.2
41.5
123
127
121
140
80
2.6
41.4
231
172
197
228
171
201
225
168
196
203
159
181
PRODUCTION AND EMPLOYMENT
Nonfarm E m ploym ent.....................................
M a n u f a c tu r in g ..........................................
N on m an u factu rin g .....................................
C o n s tr u c tio n ..........................................
Farm E m p lo y m e n t..........................................
Insured Unemployment, (Percent of Cov. Emp.)
Avg. Weekly Hrs. in Mfg., (Hrs.) . . . .
May
May
May
May
May
May
May
141
141
141
109
96
1.4
42 4
140
140
140
109r
90
1.3
42.l r
141
142
140
115
90
1.3
42.4
134
134
135
110
87
2.1
42.1
FINANCE AND BANKING
Member Bank L o a n s .....................................
Member Bank Deposits
................................
Bank D e b i t s * * ................................................
May
May
May
234
176
182
232
174
184
228
173
174
206
158
162
FINANCE AND BANKING
Member Bank L o a n s * ..................................... May
Member Bank D e p o s its * ................................May
Bank D e b i t s * / * * .......................................... May
*For Sixth District area only. Other totals for entire six states. **Daily average basis. r-Revised.
Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U. S. Dept, of Labor and cooperating state agencies; cotton
consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; 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.
J U L Y 1966
• 5 9 *
DISTRICT BUSINESS CO N D ITIO N S
f V 'Y W ^
t
_lilliai>> of Dollori
T . ' r ' - t v ,• j-
1
1
P e r s o n a l In c o m a
N o n fa rm
E m p lo y m e n t
M fg . E m p lo y m e n t
A v e ra g e W e e k ly H o u r s ’
M fg . P a y r o lle
C o n s tr u c tio n C o n t r a c ts
5-mo.
m o vin g a v e r a g e
In d u s t r ia l U s e o f E le c t r ic P o w e r
_
Growth still marks the District’s economy, but the pace is less feverish
than in early 1966. Although unemployment rem ained low, employers
were able to add to the work force in May. Dollar volume of new construction contracts, including residential, was m aintained surprisingly well in
view of changed mortgage market conditions. In June, banks in leading
cities expanded both loans and investm ents. Consumer borrowing in
creased at these banks, as did finance company borrowing. Estim ates of
crop production for 1966 are now less optim istic because of the recent dry
weather in some areas.
D espite continued w orker scarcity, the num ber of nonfarm job holders
edged higher in May. T he insured unem ploym ent rate held at 1.6 percent.
M anufacturing jobs m oved up, largely on the im petus of expanded em ploy
m ent at chem ical and textile firms. Increased defense spending created m ore
em ploym ent in the defense-oriented transportation equipm ent industry than
was lost through layoffs by autom akers. Program s to m atch young people out
of school with jobs have already alleviated some w orker shortages.
Construction activity has not yet fully reflected the substantial cutback
in new mortgage comm itm ents by num erous lenders. R esidential construc
tion contract volume rem ained large through M ay, as did total contract volume.
A lthough this region is faring relatively better than m ost in construction ac
tivity, several lenders within the D istrict have felt reduced availability and
higher costs of m ortgage money.
IS
Lending activity at banks in leading cities advanced sharply in June,
C o t to n C o n s u m p t io n
S a n k D e b its
F a rm C a s h R e c e ip t s
6 -m o . m o vin g a v e r a g e
Me m bsr B an k Lo ans
following a tem porary slowdown in M ay. Business loans, norm ally rising
around the June tax and dividend period, increased m ore than usual. Loans
to finance com panies and consum ers also gained.
Interest charges on business loans were substantially higher in June than
three m onths ago, according to a survey of large D istrict banks in A tlanta and
New O rleans. T he advance reflected, in part, increases in the prim e rate in
M arch. F u rth er increases were announced by some D istrict banks in early
July in response to increases in other m ajor cities. T he B oard of G overnors
raised reserve requirem ents at m em ber banks, effective July 14 for reserve city
banks and July 21 for all other m em ber banks. R eserve requirem ents against
time deposits (o ther than passbook savings) beyond the first $5 m illion were
increased from 4 to 5 percent. This change will m ean larger required reserves
for about 100 D istrict banks.
u* u* u*
Consumer loans gained more than seasonally in June, following a slow
dow n in A pril and May. T he M ay decline in new loan volum e occurred m ainly
in the autom obile category, reflecting another m onth of decreasing sales. Only
repair and m odernization loans gained during M ay.
M sm b er B an k
Deposits^
^
U*
j>
Dry, cool weather has reduced crop prospects in some sections of the
Southeast. In recent weeks, cotton, corn, and soybean crops have been espe
P E R C E N T O F R E Q U IR E D R E S E R V E S
B o r r o w in g s fro m F . R . B a n k s
E x c e s s R e se rv e s
A)X
Seas. adj. figure; not an index.
cially retarded. Pasture conditions are very poor in m any parts of Tennessee.
Overall, the 1966 crop production is not expected to m atch last year’s level.
M eanwhile, both average crop prices and cash receipts are lower than a year
earlier. T he livestock sector continues strong. R educed milk production has
caused prices of m ost dairy products to stay well above last year’s levels.
N o t e : D a t a on w hich statem ents are b ased have been adjusted whenever p ossib le to elim inate se ason al
influences.
@FedFRASER