The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
MONTHLY REVIEW ■■ - ' . , IN THIS ISSUE: •Milk Flows Where Population Goes • What’s Happening in Textiles? • District Business Conditions ■ F E D E R A L R E S E R V E B A N K OF A T LA N T A M AY 1970 Milk Flo w s W here Population Goes W a it in g u n til th e cow s com e hom e ta k e s le s s t im e in t h e S o u th e a s t t h e s e d a y s — a t le a s t if y o u a r e w a itin g p r o d u c in g ch an ges The fo r m ilk in d u s t r y w ith in c o lle c tiv e a cow s. has r e g i o n ’s u ndergone r e la tiv e ly d a ir y T h is herd, sh o rt cut Figure I m ilk fa r -r e a c h in g t im e by p e r io d . h a lf s in c e D istrict m ilk p ro du ction h a s generally m oved counter to the U .S. trend. BILLIONS OF LBS. 1 9 5 8 , is c o n t in u in g t o s h r in k w ith e a c h p a s s in g D ISTRIC T y e a r . T h e c o w s t h a t r e m a in a r e o f te n lo c a t e d in n e w a r e a s a d ja c e n t to g r o w in g u r b a n c o n c e n tr a - 8 . 0 tio n s . N e v e r th e le s s , a n n u a l m ilk p r o d u c tio n p e r c o w , o r y ie ld , h a s im p r o v e d r e m a r k a b ly . Total M ilk Produ ction - 7.6 I n t u n e w ith t h e d r o p in d a ir y c a t t le n u m b e r s, th e S o u t h e a s t ’s to ta l m ilk p r o d u c tio n d u r in g t h e f ir s t h a lf o f t h e s ix tie s d e c lin e d (F ig u r e I ) . P r o d u c tio n tu r n e d u p w a r d a g a in , h o w e v e r , d u r in g t h e la tte r h a lf o f t h e decade, even th o u g h t h e a g g r e g a t e d a i r y h e r d c o n t i n u e d t o s h r in k . I n 1 9 6 4 , D is t r ic t m ilk p r o d u c tio n w a s d o w n n e a r ly a b illio n p o u n d s fro m it s p e a k in 1 9 5 8 . B y 1 9 6 9 , p r o d u c tio n h a d in c r e a s e d fr o m t h e 1 9 6 4 le v e l b y .3 b i l l i o n p o u n d s . T o t a l U . S . p r o d u c t i o n , o n t h e o th e r h a n d , r e a c h e d a h ig h in 1 9 6 4 (th e y ea r of th e lo w p o in t in t h e r e g io n ) a n d h a s b e e n f a llin g o ff s h a r p ly m ilk each p r o d u c tio n y e a r s i n c e . T h u s , t h e r e g i o n ’s g e n e r a lly has b een m o v in g c o u n te r to th e U . S . tren d . M o n th ly R eview , Vol. L V , No. 5. Free subscription and additional copies available upon request to the Research Departm ent, Federal Reserve B a n k of Atlanta, A tlanta, G eorgia 30303. 62 '5 8 '6 0 '6 2 '6 4 '6 6 '6 8 M O N T H L Y R E V IE W Figure I I I P r o d u c t io n P e r C o w O n e o f t h e S o u t h e a s t ’s m o s t r e m a r k a b l e i m p r o v e D uring the p a s t decade, m ilk production m e n ts in a g r ic u lt u r e d u r in g t h e p a s t d e c a d e h a s shifted to n ew a re as in the Sixth District. been th e in c r e a s e in m ilk produced p er cow BILLIONS OF LBS. ( F ig u r e I I ) . I n 1 9 6 8 , t h e a v e r a g e m ilk c o w g a v e n e a r ly t w ic e a s m u c h m ilk a s s h e d id in 1958. ALABAMA Figure I I A n n u al produ ction o f m ilk per co w has increased rem arkab ly but w a s still only ab o u t th re e-fo u rths o f the U .S. level in 1968. THO USANDS OF LBS. _ FLORIDA ■1111n11 : ■•■FLA. ■■•■GA. — TENN.— LA. --ALA. --MISS. 1.3 1. 0 GEORGIA -1 .3 0.9 LOUISIANA 1. 2 A lth o u g h p r o d u c tio n p e r c o w in in d iv id u a l s t a t e s d e v ia t e d s o m e w h a t fr o m t h e r e g io n a l a v e r a g e , i t w a s u p in e a c h s t a t e w ith o u t e x c e p tio n , w ith t h e m o s t d r a m a tic im p r o v e m e n t o c c u r r in g in L o u is i a n a a n d F lo r id a . N o t u n til a fte r 1 9 6 4 w a s th e r e a n y m a jo r im p r o v e m e n t in o v e r a ll p r o d u c tio n e f fic ie n c y . D u r in g t h e p e r io d fr o m 1 9 5 9 -1 9 6 4 , T e n n e s s e e , G e o r g ia , a n d fo r th e A la b a m a , m a jo r ity th e of sta te s to ta l w h ic h D is tr ic t a cco u n ted TENNESSEE p r o d u c tio n , s h o w e d m u c h le s s g a in in e f fic ie n c y p e r c o w . B y c o m p a r is o n , t h e g r o w th in a v e r a g e p r o d u c tio n p e r c o w in t h e U . S . a s a w h o le w a s m u c h sm o o th e r fro m y e a r to y ea r . T h e a v e r a g e U . S . c o w a ls o o u tp e r fo r m e d h e r S ix th D is t r ic t c o u n te r p a r t, b u t th e gap grew p r o g r e s s iv e ly narrow er 58 '6 0 '6 2 '6 4 '6 6 68 d u r in g t h e t e n -y e a r p e r io d . D is t r ic t p r o d u c tio n M A Y 1 9 70 63 a n a , o n t h e o th e r h a n d , h a v e e x p e r ie n c e d r a p id p er c o w w a s s lig h tly le s s th a n 6 0 p e r c e n t o f th e U . S . a v e r a g e in 1 9 5 8 b u t h a d r e a c h e d 7 2 p e r c e n t g r o w th s in c e o f t h e U . S . fig u r e b y 1 9 6 8 . tu r n e d u pw ard T h e r a p id liq u id a t io n o f s m a ll in e f f ic ie n t d a ir y h erds (c o w s o f lo w h azard care) p r o d u c tiv ity 1958, and a fte r p r o d u c tio n 1964. M ilk in cow G e o r g ia n u m bers d e c lin e d le s s in F lo r id a a n d L o u is ia n a d u r in g t h e r e c e iv in g h a p p e r io d th a n in o th e r s t a te s . c o n tr ib u te d to c lo s in g t h e p r o d u c t iv it y g a p b e t w e e n D is t r i c t c o w s a n d o th e r m ilk V aryin g M ilk P ric e s c o w s in t h e U . S . T h e le v e l o f m a n a g e m e n t a s w e ll a s t h e q u a lity o f a n im a ls in t h e h e r d s t h a t C h a n g in g r e m a in h a v e b e e n im p r o v e d r e m a r k a b ly a n d t h a t p e a r e d t o b e p a r t ia lly im p r o v e m e n t c o n t in u e s . p r o d u c tio n le v e ls w ith in sta tes ap r e la te d to in te r s t a te d if f e r e n c e s in t h e p r ic e s t h a t fa r m e r s r e c e iv e d m ilk d u r in g t h e p a s t d e c a d e S h if tin g Produ ction A re as (F ig u r e I V ) . fo r For e x a m p le , p r o d u c tio n d e c r e a s e d in M is s is s ip p i a n d T h e a r e a s o f m ilk p r o d u c tio n a s r e p r e s e n te d b y T e n n e s s e e w h e r e p r ic e s w e r e lo w e s t a n d in c r e a s e d s t a t e t o ta ls h a v e a ls o b e e n u n d e r g o in g changes i n F lo r id a a n d L o u is ia n a w h e r e p r ic e s r e m a in e d A lth o u g h a b o v e t h e D is t r ic t a v e r a g e th r o u g h o u t t h e p e r io d . (see F ig u r e to ta l d a ir y III on cow p r e c e d in g n um bers p a g e). have d e c lin e d in T h e p a tte r n w a s n o t c o n s is t e n t in A la b a m a a n d a ll s t a t e s , o n ly A la b a m a , T e n n e s s e e , a n d M is s is s ip p i G e o r g ia , h o w e v e r , s u g g e s t in g h a v e s u s ta in e d h e a v y lo s s e s in t o ta l m ilk p r o d u c th a n p r ic e s a r e a ls o in flu e n t ia l. M ilk t io n d u r in g t h e l a s t t e n y e a r s . F lo r id a a n d L o u is i p r ic e s at th e fa rm th a t fa c to r s o th e r le v e l are ty p ic a lly Figure IV M ilk prices received by farm e rs have becom e more uniform th rou gh o u t the region. - . . i i 7 i D ISTR IC T i DISTRIC T i i _ '5 8 '6 0 '6 2 '6 4 '6 6 '6 8 64 5 $ PER CWT $ PER CWT $ PER CWT .i i i '5 8 '6 0 '6 2 - 7 - 6 -7 / i J D IS TR IC T i 6 4 '6 6 i _ 68 5 - I 58 I l i i 60 '6 2 '6 4 '6 6 l _ 5 '6 8 M O N TH LY R E V IE W d e t e r m in e d b y fo r m u la s a d m in is te r e d u n d e r F e d a l l s i x s t a t e s a r e d e f i c i t p r o d u c e r s o f m i lk . A p e r a l o r s t a t e m a r k e tin g o r d e r s . T h e m o r e u s u a l p a r e n tly t y p e o f fo r m u la , a p p lie d b y m a r k e t a r e a s w it h in fo r m ilk u s e d in m a n u fa c tu r e d p r o d u c ts d o n o t t h e D is t r ic t , b a s e s p r ic e s o n e n c o u r a g e s u f f ic ie n t lo c a l p r o d u c tio n to m e e t t h e t h e a v e r a g e p r ic e p a id p r o d u c e r s fo r m a n u fa c tu r in g g r a d e m ilk in th e to ta l d em a n d lo w e r p r ic e s th a t fa r m e r s r e c e iv e fo r a ll p r o d u c ts . M in n e s o t a a n d W is c o n s in p lu s a d iffe r e n tia l. T h e Po pu latio n C h a n ge s s iz e o f t h e d iffe r e n tia l b e a r s s o m e r e la tio n s h ip to t h e d is ta n c e o f a n e s o t a - W is c o n s in g iv e n m a r k e t fr o m area but a ls o th e M in o fte n in c lu d e s s p e c ia l p r e m iu m s t h a t m ig h t b e c o n s id e r e d n e c e s s a r y to in s u r e t h a t a n a d e q u a te s u p p ly o f fr e sh f lu id m ilk is p r o v id e d fo r t h e lo c a l m a r k e t. C h a n g e s a n d m o v e m e n t s i n t h e r e g i o n ’s p o p u l a tio n have a lly r e c e iv e is a ls o in flu e n c e d b y t h e p e r c e n ta g e u n d e r ly in g a n e t g r o w th in ( F ig u r e T h e a v e r a g e p r ic e p e r c w t t h a t fa r m e r s a c t u been fa c to r s in flu e n c in g m ilk p r o d u c tio n . A ll D is t r ic t s t a t e s e x p e r ie n c e d V ). The p o p u la t io n g rea test fr o m g ro w th 1960 to 1968 occu rred in Figure V o f th e ir m ilk s u p p ly u t iliz e d in t h e h ig h e r p r ic e d f lu id c a te g o r y ( C la s s I p r o d u c ts su c h a s h o m o g e n iz e d m ilk , m ilk ) a s o p p o se d to th a t u se d in m a n u fa c tu r e d p r o d u c ts, cream , s k im m ilk , and c h o c o la te ( e . g ., i c e c r e a m , c h e e s e , a n d b u t t e r ) . T h u s , in m a r k e ts w h e r e m o s t o f th e lo c a lly p ro duced m ilk average is p r ic e u sed fo r flu id r e c e iv e d by c o n s u m p tio n , p roducers is th e h ig h e r t h a n i n a n o t h e r m a r k e t w h e r e a la r g e r p e r c e n t a g e o f t h e s u p p ly is s o ld fo r m a n u fa c tu r in g u s e s . T h e s u p p ly in e x c e s s o f C la s s I n e e d s is s o ld a t t h e lo w e r m a n u fa c tu r in g grade p r ic e and, th u s, blend price lo w e r s t h e o v e r a ll a v e r a g e o r th a t p r o d u c e r s r e c e iv e . Produ ction C o m pared with C o n su m p tio n The r a th e r c o n s is te n tly h ig h e r m ilk p r ic e s in F lo r id a d u r in g t h e p a s t d e c a d e r e f le c t n o t o n ly a g re a te r d is ta n c e in g b a s e p o in t a ls o of th e area fr o m th e p r ic ( M in n e s o t a a n d W is c o n s in ) t h a t F lo r id a fa r m e r s s e ll a but la r g e r p o r tio n o f th e ir m ilk fo r C la s s I flu id u s e th a n d o fa r m e r s in o th e r D is tr ic t sta te s . O th e r s ta te s w h e r e to ta l a n n u a l m ilk ceed p r o d u c tio n e s tim a te d ty p ic a lly a n h u a l flu id a r e G e o r g ia , A la b a m a , a n d does m ilk n ot ex c o n s u m p tio n L o u is ia n a . B eca u se o f t h e s e a s o n a lit y o f p r o d u c tio n , h o w e v e r , lo c a l s u p p lie s h a v e e x c e e d e d flu id c o n s u m p tio n le v e ls a t t im e s d u r in g f lu s h p r o d u c tio n p e r io d s th r o u g h June) and m ilk is m a r k e te d (A p r il in lo w e r c la s s u s e s . A v e r a g e m ilk p r ic e s r e c e iv e d b y fa r m e r s w ith in th e s e th r e e s ta te s e x c e e d e d th e D is tr ic t a v e r a g e th r o u g h o u t th e d e c a d e . D a ir y m e n in M is s is s ip p i and T en n essee have m a in ta in e d d e c id e d s u r p lu s e s o f m ilk p r o d u c tio n o v e r th e ir e s tim a te d C la s s I c o n s u m p tio n , and average p r ic e s h a v e r e m a in e d c o n s is te n t ly b e lo w t h e D i s tr ic t a v e r a g e . C o n s id e r in g th e e s tim a te d m ilk e q u iv a le n t v o lu m e o f a ll d a ir y p r o d u c ts c o n s u m e d , h o w e v e r , M AY 1970 65 F lo r id a , G e o r g ia , and L o u is ia n a — t h e sta tes F u tu r e ru ral to u r b a n m ig r a tio n is lik e ly to w h e r e m ilk p r o d u c tio n h a s b e e n in c r e a s in g . F lo r i s lo w it s p a c e fr o m th a t o f t h e p a s t d e c a d e , h o w d a ’s p o p u l a t i o n g r o w t h e v e r , s im p ly b e c a u s e le s s p o te n tia l m ig r a n ts r e r e s u lte d p r im a r ily fr o m a n e t m ig r a tio n g a in , w h e r e a s o th e r s t a t e s g r e w m a in in r u r a l a r e a s . T h e n to o , m o r e m ig r a n ts w ill m o s t ly b e c a u s e o f t h e e x c e s s o f b ir th s o v e r d e a th s . p r o b a b ly b e r e m a in in g w it h in M is s is s ip p i e m p l o y m e n t o p p o r t u n i t i e s i n t h e D i s t r i c t ’s u r b a n and A la b a m a , th e sta tes su ffe r in g areas fr o m o t h e r s e c t io n s o f t h e c o u n t r y a r e a ls o l i k e l y p a st d ecad e. to c o n tin u e , r e s u ltin g in e v e n in g fr o m m ig r a tio n h a v e b e e n m o r e c lo s e ly as m ig r a tio n im p r o v e . th a n in P o p u la tio n if n o u n c e d d e c lin e s in to ta l m ilk p r o d u c tio n in th e fr o m to S o u th e a st n e t m ig r a tio n lo s s e s , e x p e r ie n c e d th e m o s t p r o T h u s , i t s e e m s t h a t p o p u la t io n c h a n g e s r e s u lt c o n tin u e th e th e in flo w s g r e a te r n e t g a in s p a st. A verage c o m e s w ill r is e a s w a g e e a r n e r s in lo w in in c o m e s o c ia te d w ith c h a n g in g m ilk p r o d u c tio n p a tte r n s fa m ilie s s e c u r e m o r e lu c r a t iv e e m p lo y m e n t . T h u s , th a n h a v e n a tu r a l p o p u la t io n th e c o m b in a tio n o f m o r e p e o p le w ith h ig h e r in in c r e a s e s . a r e u s u a lly e n c o u r a g e d to m o v e fr o m P e o p le o n e area to a n o th e r b y o p p o r tu n itie s fo r h ig h e r le v e ls o f in c o m e . T h u s, p e o p le m o v e to ta l in to p erson al an area. in c o m e N a tu r a l r is e s as A s lo n g a s i t r e m a in s m o r e e c o n o m ic a l a n d /o r p o p u la t io n d e s ir a b le to p r o d u c e m ilk a d ja c e n t t o c e n te r s o f immediate g a in s , o n t h e o th e r h a n d , r e s u lt in n o c o m e s is lik e ly to r e s u lt in a c o n t in u a l in c r e a s e in m ilk c o n s u m p tio n w it h in t h e r e g io n . in c r e a s e in p u r c h a s in g p o w er. c o n s u m p tio n th a n to tr a n sp o r t it lo n g d is ta n c e s , h u m a n m ig r a tio n p a tte r n s w ill p r o b a b ly s t ill a f I t is n o t s u r p r is in g , th e n , t h a t ( 1 ) M is s is s ip p i fe c t th e lo c a tio n s o f d a ir y fa rm s o f th e fu tu re. a n d A la b a m a r e a liz e d s m a lle r in c r e a s e s in t o ta l S m a lle r d a ir y h e r d s in r u r a l a r e a s w ill c o n t in u e p e r s o n a l in c o m e s in c e to b e r e p la c e d b y sta te s, and th a t (2 ) 1 9 5 8 th a n th e d id th e o th e r g r e a te s t in c o m e g a in o c c u r r e d in F lo r id a w h e r e t h e t o ta l in c r e a s e w a s la r g e -s c a le d a ir y fa r m s c lu s te r e d a r o u n d m e tr o p o lita n c e n te r s . M ilk p r o d u c tio n is u n lik e ly to grow in pro n e a r ly t w ic e a s la r g e a s t h e a v e r a g e g a in in t h e p o r tio n to t h e p o p u la t io n , h o w e v e r . F o r a n u m b e r r e g io n d u r in g t h e s a m e p e r io d . o f r e a s o n s, t h e tr e n d o f d e c lin in g p e r c a p ita m ilk c o n s u m p tio n Future T ren ds P o p u la tio n s h ifts are lik e ly to c o n tin u e s in c e m o r e p e o p le a r e b e in g a ttr a c te d a w a y fr o m r e la tiv e ly d isa d v a n ta g e d ru ral a r ea s o f th e S o u th e a s t b y g r e a te r o p p o r tu n it ie s in r a p id ly g r o w in g u r b a n c e n te r s . M a n y o f t h e m ig r a n ts o f t h e p a s t d e c a d e h a v e le f t th e a r e a e n tir e ly , w h ile o th e r s a r e s e ttlin g a r o u n d t h e la r g e r c i t i e s w i t h i n r e g io n . a d d itio n , In so m e of w ill p r o b a b ly be a c c e n tu a te d in t h e fu tu r e . A m o r e d ie t -c o n s c io u s p o p u la c e w ill th e th e S o u t h e a s t ’s m e tr o p o lit a n a r e a s h a v e a t tr a c te d la r g e n u m b e r s o f r e s id e n ts fr o m o th e r p a r ts o f t h e c o u n tr y d is c r im in a te m o r e a g a in s t r e la t iv e ly h ig h c a lo r ie fo o d s s u c h a s m ilk fa t. I n a d d itio n , a d e c lin in g b ir th r a t e w ill, in t im e , r e d u c e t h e p r o p o r tio n o f th e y o u n g er a g e grou p s ( t h e p r e p o n d e r a n t m ilk c o n s u m e r s ) in t h e t o ta l p o p u la t io n . M ilk -lik e s u b s titu te s , th o u g h im p o r ta n c e a t p r e s e n t, c o u ld o n ly g a in of m in o r a s ig n ific a n t s h a r e o f t h e m a r k e t in t h e fu tu r e if m ilk p r ic e s c o n tin u e th e ir u p w a r d tren d . to G e n e D . S u l l iv a n w o r k in r e la t iv e ly n e w in d u s tr ie s . B an k A n n o u n ce m e n ts On April 9, First National Bank of Doraville, Doraville, Georgia, opened for business as a newly organized member bank. Officers are L. Thomas Robinson, presi dent; and Wilbur Cohen, cashier. Capital is $300,000; surplus and other capital funds, $300,000. A newly organized nonmember bank, Barnett Bank of Anastasia Island, St. Augustine, Florida, opened for business on April 14. Officers are H. A. Meitin, chairman 66 of the board; W. B. Smith, president; and David Hal stead, cashier. Capital is $250,000; surplus and other capital funds, $125,000. On April 15, Normandy Atlantic Bank, Jacksonville, Florida, opened for business as a newly organized non member bank. Officers are William A. Bettes, chairman of the board; Keith S. Steen, president; and Jimmy Myers Brown, cashier. M O N T H L Y R E V IE W W hat's Happening in Textiles? D uring the past six months, Am erican business a ctivity simmered down, and te xtile producers in the Southeast (and elsewhere) found their fortunes inextricab ly woven into the national pattern. The demand for textiles in th is country is p rim arily a derived demand and fluctuates w ith the fortunes and m isfortunes of textile custom ers. And right now textile custom ers, in general, seem to be reluctant buyers. Auto demand has fallen off and has thus affected the need for tire cord and upholstery fab ric. Hom ebuilding has had its problems, too, and has in d irectly lim ited the de mand for carpets, draperies, and furniture fab rics. Defense spending is on the wane, thereby re ducing m ilita ry demand. And fin a lly , apparel m anufacturers, the biggest textile customers of a ll, have lost business as a result of faltering personal income. T e xtile producers spent a good part of 1969 adjusting inventories in an attem pt to m aintain them at an acceptable level. Production was cut back about m idyear, but inventories kept clim b ing right on into October when a tem porary but im pressive surge in sales reduced them to a hopefully more tenable level. A t this point, it appears that the •adjustm ent has larg ely been accom plished even though the inventory-sales ratio has s till not stabilized. And consistent w ith year-end inventory reduction, te xtile m ills have apparently reduced th eir borrowings at com m ercial banks. It is fortunate for the textile m ills that whole sale prices for textile goods have not declined but stabilized on a high plateau. P rice weakness M AY 1970 evident in the mini-slowdown of 1967 has not yet m aterialized in the current situation. T h is m ay be related to the growing im portance of manmades whose supply is of a stabler sort. As the demand for a p articular commodity abates, requirem ents to produce that commodity abate. Since m idyear, textile employment and working hours have both reflected this economic fact of life . Even a spurt of strength at year-end has been followed by more cutbacks and layoffs. If the Am erican textile industry is reflecting general economic conditions at the national level, the same is true for that portion of the Southeast that is circum scribed by the frontiers of the Sixth Federal Reserve D istric t. The action is found p rim arily in Georgia, Tennessee, and Alabam a where total te xtile employment is approxim ately 200,000. T h is is an im portant source of personal income for the region, since the industry ranks as the third most im portant m anufacturing em ployer. The textile slowdown in the Southeast closely resembles the national textile slowdown, which in turn reflects the somewhat sluggish nature of the U . S . economy. B y mid-1969 in the region, employment weak ness in textiles showed up in hours worked and in the large number of layo ffs. On the other hand, at the national level, employment fe ll off early in the year, and working hours held strong u n til early 1970. As in the nation, textile m ill borrow ing from large D istrict banks declined in early 1970. T h is reflects the abatement of financing needs, resulting from reduced inventories. Even though the U . S . economy has faltered for two consecutive quarters, there is widespread 67 e x p e c t a t io n o f r e n e w e d e c o n o m ic v ig o r la te r in t h e y e a r w h ic h s h o u ld b r ig h te n th e o u tlo o k fo r m ills announced in c r e a s e d c a p ita l s p e n d in g p la n s . T h is c a n b e ta k e n a s a v o t e o f c o n f id e n c e t e x tile s . R e n e w e d g ro w th o f th e U . S . e c o n o m y fo r w ill p r o b a b ly s t im u la t e a c t iv it y in a p p a r e l, a u to s , p a c it y , a lo n g w ith g e n e r a l e c o n o m ic a d v a n c e e x th e in d u s tr y . The r e s u ltin g new p la n t ca a n d c o n s tr u c tio n , a n d in d ir e c t ly in t e x tile s . O n e p e c t e d la te r in t h e y e a r , s h o u ld g e n e r a te d e m a n d r e m a in in g fo r b a n k lo a n s to f in a n c e p e r m a n e n t in c r e a s e s in w eak s p o t fo r te x tile s w ill lik e ly be m ilit a r y d e m a n d . le v e ls o f w o r k in g c a p it a l. R L o o k in g a t th e o th e r s id e o f t h e v a lle y , D is t r ic t obert E. W il l a r d 1963=100 U. S . Textile Sh ip m e n ts Textiles at a Glance - 138 - 126 - 114 t i l 1966 l 1968 1970 Sales have been sluggish since the record high in 1968; however, the contraction so far has been milder than in 1966. 1957-59=100 W ho le sa le Textile P rice s 1957-59=100 U. S . Textile Produ ction -1 5 0 - 1 -1 0 1 - -9 5 -1 3 7 i i 1966 i 1968 ■ P i 1970 Prices have also remained firmer than they were in 1966-67. 68 i 1966 I i 1968 I 1970 In response to lagging sales, manufacturers began to cut their output in mid-1969. M O N T H L Y R E V IE W T h e T e x t i l e I n d u s t r y S e e m s to R e f l e c t th e P erfo rm a n ce of th e E co n o m y . 1964=100 Loans to textile, apparel. end leather _ firms by large banks * _ 175 196 3 = 1 0 0 u. s. Textile Inventories U r 134 -145 - 121 U.S. -1 2 0 110 1 i 1966 l 1 l 1968 I I 1966 1970 1968 1970 Less demand for borrowed funds mirrored in ventory reductions. A t first, inventories rose but by late 1969, they too were cut back. 1957-59=100 Hoars - Textile Employment Weekly Hours, Textile Mfg. -120 District - -iio - -100 U.S. -39 l 1966 i i 1968 i i 1970 1966 1 1 1968 1 1970 A t the same time, manufacturers have shortened work hours and reduced their labor force. NOTE: All c h a r t d a ta h av e b e e n s e a s o n a lly a d ju s te d . M AY 1970 69 S ix t h D is t r ic t S t a t is t ic s S e a s o n a lly A d ju ste d (A ll d a ta a r e in d e x e s , 1 9 5 7 - 5 9 = Latest Month 1970 One Two Month Months Ago Ago I O O , u n le s s in d ic a te d o th e r w is e .) One Year Ago Latest Month 1970 SIXTH DISTRICT N.A. 253 180 177 189 N.A. 252 175 153 203 N.A. 250 150 122 202 68,701 238 177 190 172 326 296 311 276 305 289 293 294 152 149 174 142 177 120 108 129 131 114 199 153 141 57 152 149 174 144 177 121 109 129 133 115 200 154 145 60 153 150 176 143 179 118 109 130 135 116 211 153 146 60 148 149 174 142 175 115 109 129 131 116 210 147 136 59 4.0 3.8 3.5 3.5 2.3 40.4 204 247 166 165 103 277 2.3 40.3 246 246 246 166 103 273 2.3 40.3 439 318 542 167 103 270 1.8 40.9 182 207 161 159 102 257 PRODUCTION AND EMPLOYMENT* Nonfarm E m p lo y m e n tt............................ Mar. M anufacturing ......................................Mar. Apparel ....................................................Mar. C h e m i c a l s ............................................... Mar. F abricated M e t a l s .................................Mar. F o o d ............................................................. Mar. Lbr., Wood Prod., Furn. & Fix. . . . Mar. P a p e r .........................................................Mar. P rim ary M e t a l s ......................................Mar. Textiles ....................................................Mar. T ransportation E quipm ent . . . . Mar. N o n m a n u f a c t u r i n g t .................................Mar. C onstruction .......................................... Mar. Farm E m p lo y m e n t......................................Mar. U nem ploym ent Rate (P ercent of Work F o r c e J t ...................Mar. Insured U nem ploym ent (P ercent of Cov. E m p .)........................Mar. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Mar. C onstruction C o n t r a c t s * ........................Mar. R e s i d e n t i a l ............................................... Mar. All O t h e r ....................................................Mar. Electric Power Production** . . . . Feb. Cotton C o n s u m p tio n * * ............................ Feb. Petrol. Prod, in C oastal La. and Miss.**Apr. 177 176 139 77 179 177 142 85 178 175 138 91 177 167 131 83 Mar. Mar. 3.1 41.2 2.9 40.9 2.4 40.3 2.6 41.5 Mar. Mar. Mar. 391 260 279 384 258 287 386 258 294 347 253 251 Mar. Mar. Feb. N.A. 262 175 N.A. 258 201 N.A. 255 189 13,296 249 166 Mar. Mar. Mar. Mar. Mar. 153 142 158 146 50 153 141 158 150 52 154 145 159 155 56 150 145 153 150 52 Mar. Mar. 3.3 40.1 3.5 39.9 2.9 39.6 2.6 41.0 Mar. Mar. Bank D e b its**................................ Mar. 348 233 347 229 348 229 329 250 N.A. 196 196 N.A. 199 158 N.A. 199 136 9,961 186 197 Mar. Mar. Mar. Mar. Mar. 133 123 136 132 47 134 124 136 134 50 134 124 136 137 45 131 123 132 131 56 Mar. Mar. 6.0 41.0 5.5 41.4 5.2 42.5 5.1 41.4 Member Bank Loans* . . . . . Mar, Mar. Member Bank D e p o s it s * ................ . Mar. Bank D e b its*/** ................ 280 179 198 282 177 203 277 176 217 254 176 192 N.A. 275 189 N.A. 272 190 N.A. 274 118 5,249 261 214 Mar. Mar. Mar. Mar. Mar. 152 161 148 167 56 152 160 148 175 57 152 161 148 183 54 148 160 143 137 52 Mar. Mar. 4.7 40.0 4.3 40.1 3.9 40.9 3.7 40.7 Member Bank L o a n s * ................... Mar. Member Bank D e p o s it s * ................ Mar. Bank D e b its*/**.............................Mar. 422 275 291 416 271 298r 425 277 284 373 255 265 Unemployment Rate (Percent of Work Force)t . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . FINANCE AND BANKING Member Bank Loans . . . . . . Member Bank D eposits............. Bank D e b its**................... . GEORGIA t INCOME Personal Income (Mil. $, Annual Rate) . . . Manufacturing Payrolls . . . Farm Cash R e c e ip t s ............. PRODUCTION AND EMPLOYMENT Unemployment Rate (Percent of Work Force)t . . Avg. Weekly Hrs. in Mfg. (Hrs.) FINANCE AND BANKING LOUISIAN A4 INCOME FINANCE AND BANKING Loans* All M em ber B a n k s ................................. Mar. Large B a n k s .......................................... Mar. Deposits* All M em ber B a n k s .................................Mar. Large B a n k s .......................................... Mar. Bank D e b its* /* * .......................................... Mar. 345 287 342 287 342 289 313 268 228 187 279 225 185 280 225 186 276 225 189 253 ALABAMA t INCOME Personal Income (Mil. $, Annual R a t e ) ................Mar. Manufacturing P a y ro lls................... Mar. Farm Cash R e c e ip t s ...................... Feb. N.A. 217 187 N.A. 218 193 N.A. 218 143 8,497 202 159 133 134 133 121 55 134 136 133 123 61 134 137 133 127 60 131 133 130 119 62 4.3 40.5 4.0 40.5 3.8 40.5 3.8 41.2 311 216 253 311 213 249 306 210 248 278 212 231 N.A. 342 189 N.A. 344 172 N.A. 335 172 20,784 310 188 177 177 177 169 PRODUCTION AND EMPLOYMENT Nonfarm E m ploym en tt...................Mar. Manufacturing ......................... Mar. Nonmanufacturing ................... Mar. C o n s t r u c t io n ......................... Mar. Farm Em ploym ent......................... Mar. Unemployment Rate (Percent of Work Force)t.............Mar. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Mar. FINANCE AND BANKING Member Bank L o a n s...................... Mar. Member Bank D e p o s i t s ................Mar. Bank D e b i t s * * ............................ Mar. Personal Income (Mil. $, Annual R a t e ) ................ Mar . Mar. Manufacturing P a y r o lls ................... Farm Cash R e c e i p t s ................... Feb. PRODUCTION AND EMPLOYMENT Nonmanufacturing . . . . C o n s t r u c t io n ................ Farm Em ploym ent................ Unemployment Rate (Percent of Work Force)t . . Avg. Weekly Hrs. in Mfg. (Hrs.) FINANCE AND BANKING M IS S IS S IP P I* INCOME Personal Income (Mil. $, Annual R a t e ) ................ Mar. Manufacturing Payrolls................... . Mar. Farm Cash R e c e ip t s ...................... Feb. PRODUCTION AND EMPLOYMENT Nonfarm Employmentt . . . . Manufacturing ................ FLORIDA t INCOME Personal Income (Mil. $, Annual R a t e ) ................Mar. Manufacturing P a y r o l l s ................Mar. Farm Cash R e c e ip ts ...................... Feb. PRODUCTION AND EMPLOYMENT Nonfarm Employmentt One Year Ago Mar. Mar. Mar. Mar. INCOME AND SPENDING P ersonal Incom e (Mil. $, A nnual R a t e ) ........................Mar. M anufacturing P a y r o lls ............................ Mar. Farm C ash R e c e i p t s ................................. Feb. C r o p s .........................................................Feb. L iv e s to c k ....................................................Feb. In sta lm e n t C redit a t Banks* (Mil. $) New L o a n s ............................................... Mar. R epaym ents ...........................................Mar. One Two Month Months Ago Ago ................ Mar. 70 Unemployment Rate (Percent of Work ForceJt . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . FINANCE AND BANKING M O N T H L Y R E V IE W L a test Month 1970 O ne Two M onth M onths Ago Ago One Year Ago TENNESSEE * INCOME P ersonal Incom e (Mil. $, A nnual R a t e ) ........................Mar. M anufacturing P a y ro lls............................ Mar. Farm C ash R e c e i p t s ................................. Feb. N.A. 246 142 N.A. 245 121 N.A. 242 116 10,914 236 135 151 157 151 157 146 157 PRODUCTION AND EMPLOYMENT Nonfarm E m p lo y m e n tt............................ Mar. M anufacturing ......................................Mar. 150 156 *For Sixth D istrict are a only; o th e r to ta ls for e n tire six s ta te s **Daily av erag e b a s is ^ E m ploym ent fig u res for all s ta te s have been a d ju s te d to new b e n c h m ark data. L atest M onth 1970 Non m a n u f a c tu r in g .................................Mar. C o n s t r u c t i o n ......................................Mar. Farm E m p lo y m e n t......................................Mar. U nem ploym ent Rate (P ercent of Work F o r c e ) t................... Mar. Avg. W eekly Hours in Mfg. (Hrs.) . . Mar. O ne Two M onth M onths Ago Ago One Year Ago 147 162 58 148 170 63 147 175 62 141 155 61 4.0 39.8 3.7 39.7 3.9 39.9 3.1 40.3 332 208 294 325 203 273 325 203 262 300 193 302 FINANCE AND BANKING M em ber B ank L o a n s * ............................ Mar. M em ber Bank D e p o s i t s * ........................Mar. Bank D e b its * /* * .......................................... Mar. tP re lim in a ry d a ta r-Revised N.A. Not av ailab le Sources: P ersonal incom e e s tim a te d by th is Bank; nonfarm , mfg. a n d non mfg. e m p ., mfg. payrolls a n d hours, a n d u nem p., U.S. Dept, of Labor a n d c o o p e ra tin g s ta te a g en cies; co tto n c o n sum ption, U.S. B ureau of C ensus; co n stru c tio n c o n tra c ts, F. W. Dodge Div., McGraw-Hill Inform ation S y stem s Co.; petrol, prod., U.S. B ureau of M ines; in dustrial u se of elec. power, Fed. Power Comm.; farm c a sh rec e ip ts a n d farm em p., U.S.D.A. O ther in d ex es b a sed on d a ta co llected by th is Bank. All indexes c a lc u late d by th is Bank. D e b it s t o D e m a n d D e p o s it A c c o u n t s I n s u r e d C o m m e r c i a l B a n k s in t h e S i x t h D i s t r i c t (In T h o u s a n d s o f D o lla rs ) March 1970 February 1970 M arch 1969 Percent Change Percent change Year to M arch d a te 1970 3 m os. From 1970 Feb. Mar. from 1970 1969 1969 M arch 1970 From Feb. Mar. 1970 1969 STANDARD METROPOLITAN STATISTICAL AREASt Birm ingham . . . . 2,011,147 68,730 G adsden . . . . 219,690 H untsville . . . . 728,233 ................... Mobile 382,874 M ontgom ery . . . 127,080 Tuscaloosa . . . 1,875,881 65,731 214,847 574,749 336,355 115,338 1,732,225 65,583 194,417 542,122 348,954 113,036 + 7 + 5 + 2 +27 + 14 + 10 + 16 + 5 + 13 +34 + 10 Ft. L a u d e rd a le Hollywood . . . Jack so n ville . . . ................... Miami O r l a n d o ................... P en saco la . . . . T a lla h a sse e . . . T am pa—St. Pete. . W. Palm B each . 1,144,686 . 2,068,690 . 3,713,421 822,413 251,426 202,321 . 2,071,257 685,654 1,049,022 2,000,832 3,328,016 740,216 222,128 201,461 2,047,331 666,037 1,018,724 1,856,845 3,080,449 703,151 216,239 152,424 1,809,860 572,665 + 9 + 3 + 12 + 11 + 13 + 0 + 1 + 3 + 12 + 14 + 9 +21 +13 +15 126,231 ................... Albany A tlanta ................... . 7,964,260 316,129 A ugusta . . . . C olum bus . . . . 278,850 327,206 M acon ................... S av an n ah . . . . 349,278 106,361 7,445,020 292,470 247,922 282,392 270,277 105,429 5,956,181 276,151 275,814 287,405 297,576 +19 + 7 + 8 795,106 . . . 167,046 . . . 163,691 . . . . . . . 2,636,230 757,320 154,679 157,684 2,497,335 611,624 150,619 161,765 2,526,071 + + + + Baton R ouge L afayette . Lake C harles New O rleans Biloxi—G ulfport Jack so n ................... 168,205 830,940 C h attanooga . . . Knoxville . . . . N ashville . . . . 889,246 574,375 2,015,922 164,522 863,522r 760,908 504,657 1,777,274 +12 + 16 +29 5 8 4 6 +12 +17 + 16 +33 +14 +20 + 10 + 7 +17 +17 + 3 + 5 +10 +10 +19 + 17 +17 +20 +12 +34 +14 + 1 + 14 + 17 +26 + 9 + 0 + 6 + 5 +30 + 1 + 4 +2 7 + 5 + 1 + 7 +11 124,258 699,930 + 2 - 4 +35 + 19 +31 + 19 765,450 527,480 2,193,405 + 17 + 14 + 13 + 16 + 9 - 8 + 15 + 2 -1 8 OTHER CENTERS A nniston . . . . Dothan ................... Selm a ................... ................... Bartow Bradenton . . . . B revard County . . Daytona B each . . Ft. M yers— N. Ft. Myers . . 75,178 91,165 51,629 36,709 103,538 238,261 99,443 68,288 83,897 48,136 35,716 99,370 199,880 94,128 72,090 78,709 46,185 35,674 90,659 219,317 92,446 + 10 + 9 + 7 + 3 + 4 + 19 + 6 + 4 + 16 + 12 + 3 + 14 + 9 + 8 + 11 + 15 + 2 - 2 + 3 - 2 + 8 135,261 125,732 122,469 + 8 + 10 + 3 'Includes only banks in the Sixth District portion of the state M AY 1970 tPartially estimated M arch 1970 F ebruary 1970 March 1969 112,840 160,760 45,961 98,178 24,370 457,756 196,572 1,117,475 96,029 107,148 161,296 43,299 95,699 21,459 414,495 197,822 1,126,085 89,987 98,i536 152,454 38,698 87,221 25,965 408,096 142,623 959,724 75,379 + 5 - 0 + 6 + 3 +14 - 1 - 1 + 7 +38 +17 +27 A thens Brunswick Dalton Elberton G ainesville Griffin LaGrange Newnan Rome . . V aldosta 100,808 54,062 117,860 18,804 89,282 44,420 26,651 29,978 93,118 64,268 92,077 53,585 97,909 18,482 80,345 39,972 21,734 27,456 81,608 61,268 89,375 51,148 107,876 15,954 84,505 36,169 22,019 23,007 85,530 61,745 + 9 + 1 +13 + 6 + 9 +18 + 6 +23 Abbeville Alexandria B unkie H am m ond New Iberia P laquem ine Thibodaux 13,012 161,565 7,632 45,618 41,829 12,787 27,233 11,657 149,761 6,318 44,688 37,487 15,040 23,519 13,258 167,164 6,971 42,894 36,751 14,562 27,515 61,406 50,164 78,577 44,916 52,698 45,502 70,507 39,384 93,427 51,321 25,047 109,625 106,563 207,156 78,573 47,677 23,493 83,981 91,964 156,624 Gainesville Lakeland . . M onroe County Ocala . . . . St. A ugustine St. P e tersb u rg S a raso ta . . Tam pa . . . W inter Haven H attiesb u rg Laurel M eridian N atchez P a sc ag o u la — Moss Point V icksburg Yazoo City Bristol . . Jo h n so n City ................... Kingsport SIXTH DISTRICT, Total 42,652,745 A l a b a m a * ................... F l o r i d a * ........................ Georgia* ................... Louisiana}* . . . . M ississippi!* ■ . . T ennessee** . . . . 5,106,140 13,946,861 11,626,230 4,751,336 1,854,082 5,368,096 +14 + 5 +19 +13 - 6 +10 +12 +20 + 2 +11 +11 +23 + 9 +14 + 5 +12 + 8 +21 + 2 +12 +21 +30 + 9 + 7 - 2 - 3 + 9 + 6 +14 Year to d a te 3 m os. 197 fy frdm 1969 +13 +17 + 6 +24 - 7 + 8 +30 +22 +20 + 8 +11 - 3 +14 +20 +17 + 5 +21 + 9 + 7 + + + + + 0 4 3 8 4 5 0 -1 5 +16 -12 70,136 42,730 82,254 42,819 + 17 -12 -1 7 +17 - 4 + 5 +20 74,587 39,266 34,288 97,998 90,688 213,897 +19 + 8 + 7 +31 +16 +32 +10 + 11 +14 - 1 +25 +31 -2 7 +12 +18 - 3 + 1 + 2 +11 +19 -2 5 + 8 +14 - 6 39,400,302r 36,896,458 + 8 +16 +11 4,678,452 13,040,154 10,730,806 4,497,183 l,804,303r 4,649.404 + + + + + + +15 +17 +26 + 8 +15 + 2 + 9 +13 +19 + 8 +15 - 5 4,451,960 11,952,301 9,249,188 4,382,168 1,607,209 5,253,632 9 7 8 6 3 15 * Estimated 71 D is t r ic t B u s in e s s C o n d it io n s E c o n o m ic activity contin u ed to su b sid e , but price p re ssures lingered. Very large projects in a few s c a t tered m arkets continue to m a sk a constru ction slu m p in m any local m arkets. C o n su m e r activity gain e d little strength in M arch . W hile a n n o u n ce m e n ts of new and expanded p lan ts increased, e m ploym ent c o n tinued to decrease and u nem p loym en t rose. Farm prices reached the h igh e st level in six years. D e p o sit inflow s en abled b an ks to rebuild their depleted liquidity. B a n k le n d in g faile d to increase. The aw ards overall level of co nstru ctio n and n o n m a n u fa c tu r in g se c to r . W o r k in g the current levels of interest rates and the sh ort age of residential m ortgage fu n d s. H o w e v e r , r e s i u p w a r d — p r im a r ily b e c a u s e o f r is in g w a g e r a te s. th r o u g h high, tu r in g h o u r s in m a n u fa c tu r in g e d g e d u p a fte r d e c lin in g aw ards deceptively contract c o n sid e rin g d e n tia l contin u ed F ebruary w ere s lig h t ly fr o m a y e a r a g o , a n d o n ly T en n essee sh ow ed g a in s . D u r in g dow n F lo r id a a n d January and in th e p r e v io u s m o n th . P a y r o lls a ls o A n n o u n cem e n ts in c r e a s e d of s h a r p ly new in and th e c o n tin u e d exp an d ed fir st q u a r te r o f p la n ts 1970, r e v e r s in g t h e c o n tin u o u s d e c lin e o f t h e p r e v io u s F e b r u a r y , n o n r e s id e n tia l a w a r d s w e r e e x tr e m e ly th r e e q u a r te r s. h ig h in A la b a m a , T e n n e s s e e , a n d in s e c t io n s o f In M arch, prices received by farm e rs a ga in rose slightly, re a c h in g the h igh e st level sin c e the F lo r id a . S a v in g s a n d lo a n a s s o c ia t io n s in fiv e o f t h e D is t r ic t s t a t e s h a d s u b s ta n t ia l n e t o u tflo w s in s p rin g of 1964. R e c e n t p r i c e s t r e n g t h c a m e p r i January m a r ily th a t w ere not recouped in F eb ruary. O n ly F lo r id a h a d a n e t in flo w o f s a v in g s in b o th m o n th s . A c c o r d in g to p r e lim in a r y M arch d a ta , h o w e v e r , s a v in g s flo w s h a v e in c r e a s e d . th e in c r e a s in g M arch. T h e a m o u n t s o u t s t a n d i n g o f e a c h m a j o r e r s— fa r m w ere a y ea r ago. creased s lig h tly , fo r r e s u ltin g to ta l in co n su m er o n ly c r e d it. a f r a c t io n a l A u to s a le s se c to r , w here r is in g p r o d u c tio n in th e liv e s to c k s e c to r — p a r t ic u la r ly in t h e c a s e o f e g g s a n d b r o il t y p e o f c o n s u m e r lo a n a t c o m m e r c ia l b a n k s in in c r e a s e liv e s to c k p r ic e d e c lin e s fo r m ilk , h o g s , a n d e g g s . R e f le c t in g r a p id ly C o n su m e rs contin u ed to behave ca u tio u sly in fr o m p r ic e s fo r b r o ile r s , b e e f c a t t le , a n d c a lv e s o f f s e t cash r e c e ip t s w e r e h ig h e r th a n th e y M e m b e r b a n k s co n tin u ed to enjoy su b sta n tia l inflow s of d e p o sits in April. I t a p p e a r s t h a t b a n k s c o n tin u e d s lu g g is h . E s tim a t e s a r e t h a t p e r s o n a l a r e p la c in g m o r e e m p h a s is o n r e b u ild in g liq u id it y i n c o m e g r o w t h s l o w e d s u b s t a n t i a l l y f o r t h e f ir s t w h ic h w a s s h a r p ly d im in is h e d la s t y e a r . I n A p r il, th r e e m o n th s o f 1970. b a n k s d id n o t in c r e a s e lo a n s b u t a d d e d to th e ir Em p lo ym e n t slip p e d slig h tly in M arch, and the u nem p loym en t rate rose m odestly. D e c l i n e s in e m p lo y m e n t o c c u r r e d in n e a r ly e v e r y m a n u fa c in v e s tm e n t p o r tfo lio s — p u r c h a se s of m u n ic ip a l a n d sh o r t-te r m U .S . G o v e r n m e n t o b lig a tio n s w e r e a m o n g th e p r im e s e le c tio n s . NOTE: D ata on w h ic h s ta t e m e n ts a r e b a s e d h a v e b e e n a d ju s te d w h e n e v e r p o s sib le to e lim in a te s e a s o n a l in flu e n c e s . 72 MONTHLY REVIEW MAY 1970
@FedFRASER