The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
IN THIS ISSUE: • District Egg Producers Crack U.S. Market •S easonal Income Patterns REVIEW in the South • District Business Conditions FEDERAL RESERVE BANK N O VEM BER OF A T LA N T A 1968 D is tric t E g g P r o d u c e r s C rack U. S. M a rke t Less than four blocks from Five Points in the heart of Atlanta there is a small retail store spe cializing in poultry products and fish. Eggs are displayed in three large bins, two containing white and one filled with brown shelled eggs. The consumer selects her own, placing them in a paper bag or carton she has brought from home. Cracked eggs are sold at a discount. Next to the eggs is an ice cooled display chest filled with two to three dozen whole chickens slaughtered earlier that day. If the consumer is not satisfied with this selection, she can go to a back room and choose a stewing hen or young fryer from that day’s supply of live chickens housed in small metal cages. Having finally se lected a chicken based on its conformation and general appearance, she then has an option of taking it home alive or having it dressed at a small processing center located right in the store. While this type of poultry retailing brings back childhood memories to many, it represents a dif ferent era than that typified by the skyscrapers, business, and commerce located so close by. Even if this small firm were located in the North Geor gia poultry region, it still would not be represen tative of the mainstream of poultry marketing or the poultry industry in general. Time and tech nology have brought about changes in production Monthly Review, Vol. LIII, No. 11. Free subscription and additional copies available upon request to the Research Department, Federal Reserve Bank of At lanta, Atlanta, Georgia 30303. 146 and marketing techniques, business methods, and consumer preferences. These changes have af fected the very structure of the industry and will continue to do so in the years ahead. The Old System In 1950, the small diversified farm, with its lim ited laying flock, was the counterpart of that small retail poultry market in Atlanta. These flocks usually numbered about 100 hens and pro vided meat and eggs for home use, plus a modest weekly income to apply against the grocery bill. Production varied sharply during the year, with March being the peak month and the lowest out put occurring in September. This very rhythmic production pattern developed because nearly all farmers bought or hatched replacement chicks in the spring after the temperature warmed; the hens then reached peak production the following March. The marketing system was also fragmented; most stores in rural areas bought poultry and eggs directly from farmers, while the stores in urban areas purchased from independent brokers in the area or from another state. In the early 1950’s, southeastern farmers produced fewer eggs than were consumed in the region, so the deficit was filled by shipping eggs in, usually from the Midwest. Change in the Fifties About this time, conditions for change were be coming apparent. In the early 1950’s, broiler proM O N T H L Y R E V IE W duction advanced sharply and prices trended downward. This development, plus continued re ductions in crop acreages, caused many broiler producers and crop farmers to switch to egg production. As these farmers expanded laying flocks into large commercial units, they desired contractual arrangements to guarantee that their entire output could be sold. Furthermore, many farmers began altering egg production patterns so that output could be maintained at high levels during periods of seasonally high prices. Meanwhile, firms with large investments in feed processing equipment and storage facilities be came more actively involved in poultry and egg production, as they sought to guarantee future sales of tiie products they sold. Although forms of participation by different feed companies and other farm supply firms have varied considerably, the net impact has been a closer coordination between the farm supply industry and the egg producers. In the marketing sector, wholesalers and retailers also sought to guarantee a uniform supply of high-quality eggs. They did not want to lose the newly cultivated and secured market outlets simply because seasonal production de clines in the mid- to late-summer months caused egg supplies to drop below consumer demand. Management control was often consolidated in order to achieve a greater degree of coordination between all phases of production and marketing. The industry thus attained a high degree of ver tical integration—the control of two or more successive stages in the production and marketing process by a single firm or jointly by several firms. By 1961, 134 of Georgia’s 211 egg market ing firms were “large integrated producers.” The rest of the firms were either independent receiv ers, egg contracting firms, or cooperating market ing associations. Many of these integrated pro ducers manage part or all of the total production cycle—from breeding flocks through a marketing system that sells eggs, often under their own brand names. Production and Marketing Share Gain This trend toward an integrated egg producing pattern has not progressed uniformly in all parts of the nation. At present, the egg industry in the Southeast is more highly integrated than in most other regions in the U.S. It was this development, plus milder climate (which reduced housing costs), improved disease control, and other forces that led to the South becoming the major egg producing region. Changes in production and marketing techniques have encouraged a rise in output and modified seasonal production patterns. These developments have contributed to lower prices and altered price patterns. Millions Pw Month 1200 N O V EM BER 1968 -11200 147 District egg producers have succeeded in cap turing a steadily increasing share of the U.S. egg market. From 1950 through 1967, annual egg produc tion in the District states rose from 3.9 to 14.1 billion eggs—a gain of 10.2 billion eggs. National output moved from 58.7 to 70.2 billion eggs an nually—a gain of only 11.5 billion. Hence, the advances in District production accounted for nearly all of the U.S. gain, and the region’s share of the national market jumped from 6 to 20 per cent. Other regions either cut production or ex panded much less rapidly than this District. Aggregate demand grew slowly throughout the period. Since 1950, annual per capita egg con sumption has fallen every year but two and dropped to 313 eggs in 1966—the lowest level since 1941. This trend in per capita consumption largely offset the impact of a 32-percent gain in the U.S. population. These combined forces of greater production and very slow growth in de mand caused prices received by farmers to trend downward throughout the period. Despite this trend, District egg producers consistently have received prices averaging above those of the na tion. The explanation for this phenomenal record is twofold. First, early in the 18-year period the expanding Since 1950 egg prices have trended downward, but average prices received by District producers have remained above those of the nation. 148 Cents Per Do2en production simply replaced eggs shipped in from other regions. Second, by the late 1950’s and early 1960’s, southeastern egg production exceeded the local market demand for table eggs. At that point these states became “exporters” of eggs, supply ing table eggs to neighboring states and the major population centers in eastern United States. By capturing the table egg market, the District pro ducers were not forced to sell large quantities of eggs in the lower return manufacturing egg mar ket. Securing the table egg market in other regions did not occur by chance. The advanced stage of the District’s vertically integrated production and marketing structure contributed much to this success. Large, well-managed, efficient laying flocks generated the constant supply of uniform high-quality fresh eggs required by consumers. In other regions, many eggs are still produced by relatively small farm flocks. Differences in rations, health care, and other management prac tices cause wide variations in egg quality. These conditions, plus broad seasonal swings in produc tion, lead to a much larger proportion allocated to manufacturing uses, hence farmers receive lower average prices. Although the vertical integration of southern egg production has contributed significantly to reducing seasonal variations in production and prices, cyclical variations still persist. For ex ample, in 1965 and 1966 prices for eggs were very strong in response to a small cutback in U.S. production and an unusually strong consumer demand. Many firms responded to the higher prices by expanding chick placements in 1966. This caused 1967 egg production to advance by 5.5 percent and drove prices to the lowest level in over 20 years. These lower prices ultimately caused producers to reduce chick placements, so replacement flocks in 1968 were generally smaller. As egg production declined in early- to mid-1968, prices strengthened, and the higher prices prob ably will continue into 1969. Future Outlook Good In the future, will the South be able to expand output continually, capture an ever increasing share of the U.S. egg market, and maintain prices above the national average? Production probably will continue to expand. M any of the conditions which led to the development of the southern egg industry are still present. The efficient processing and marketing systems, plus the expertise or managerial ability developed in the poultry pro ducing regions, will encourage further expansion. Moreover, reduced freight rates for shipping grain into the region, plus the rapid advance in south M O N T H L Y R E V IE W ern soybean production and processing, will allow feed to be acquired at relatively lower prices than in the past. If other areas, primarily the Midwest, increase production and recapture a larger segment of the eastern table egg market, then the supply of eggs would become excessive relative to demand. In this case, downward trends in prices would con tinue or be accentuated. But “catching up” will be difficult. Over the last 18 years, output de clined in 30 of the 48 contiguous states, and of the remaining states, none matched the 260-per cent gain recorded by farmers in the six District states. Additional advances in economies of pro duction through improved technology, manage ment, and marketing practices will make the South an even stronger competitor for the na tional market in the future. On the demand side, the downward trend in per capita egg consumption will also influence long-run price patterns. Currently, 90 percent of all eggs are consumed as table eggs, compared to nearly 94 percent in 1950. If there is further erosion of eggs allocated to this high-value use, average price levels could weaken. But further developments in various prepared food items may offset some loss in fresh egg consumption. Con tinued growth in the American consumers’ pref erences for easily prepared food items is ex pected. Such items as premixed cakes, noodles, frozen breakfasts, and other egg-using items will become more prominent. This trend may cause some increase in southeastern eggs allocated to these uses in the future, but the major marketing emphasis will remain on table eggs. R obert E. S w e e n e y B a n k A n n o u n c e m e n ts On October 1, three nonmember banks began to remit at par for checks drawn on them when received from the Federal Reserve Bank. They are Cawthon State Bank, DeFuniak Springs, Florida; Jeff Davis Bank, Hazlehurst, Georgia; and the Bank of Hazlehurst, Hazlehurst, Georgia. The Bank of Cookeville, Cookeville, Tennessee, a newly organized nonmember bank, opened on October 4 and began to remit at par. Charles Cowan is presi dent and Deryl E. Campbell is cashier. Capital is $450,000.00; surplus and other capital funds, $450,000.00. N O V EM BER 1968 Beach National Bank, Fort Myers Beach, Florida, opened for business as a member bank on October 21 and began to remit at par. Officers are Harry Fagan, president; Ralph D. Dandridge, vice president and cashier; and Edward M. Henry, vice president. Capital is $300,000.00; surplus and other capital funds, $300,000.00. The Hinesville Bank of Hinesville, Georgia, a non member bank, began to remit at par on November 1. 149 S e a s o n a l In c o m e in t h e S o u t h Unless economic conditions change drastically, Southerners1 can expect a jump in personal in come in December. Part of the gain will be offset in early 1969, when the South’s income is expect ed to fall to the lowest point of the year. Begin ning in the spring, however, the pattern probably will reverse and, except for a temporary summer lull, continue upward for the rest of the year. The rise from a February low to a December high should be about 10 percent, even if the longerterm upward trend in income levels off. Although not intended as an economic fore cast, the above description of the South’s income pattern in coming months is a fairly safe bet. Typically, Southerners experience a drop in per sonal income at the beginning of the year, fol lowed by an irregular rise to the December high. Since this same pattern occurs almost every year, another repeat performance is almost certain. Predictions of seasonal changes based on a re curring pattern year-after-year are much more reliable than forecasts of underlying trends and cyclical fluctuations. Generalizations about monthly income swings for the South, however, do not reflect accurately the pattern for the separate areas within the re gion. Although we can count on the low points in personal income occurring consistently in Feb ruary for all six District states, the upward paths and peak months differ significantly for each state. In Alabama, Louisiana, and Mississippi, the largest boost in personal income comes in October or November. On the other hand, Geor gia’s peak income month is typically August and in Florida and Tennessee it is December. Fluctu ations between the lowest and highest income months also vary among the states, reflecting differences in economic make-up and, therefore, sources of income. ^ h e South as used in this article embraces the Sixth Federal Reserve District states of Ala bama, Florida, Georgia, Louisiana, Mississippi, and Tennessee. 150 P a tte rn s Seasonal Economic Activity The experienced banker or businessman needs no reminder that economic activity follows a recur ring seasonal pattern during the year. The retail merchant, for example, knows that he likely will have an increased pace of business around Christ mas, and he must plan his purchasing and person nel changes accordingly; the contractor buys materials and hires additional workers for the spurt in construction activity that inevitably comes during the summer months; the farmer has unusually heavy expenditures in the spring as sociated with plantings, while most harvesting activity takes place in the fall. Bankers recognize these and other patterns of seasonal activity, and they plan for an uneven deposit inflow and de mand for loans during the year. At the same time, wage earners in industries with high de grees of dependence on seasonal activity realize that their incomes may not flow evenly during the year. Although the pattern may differ for each type of business or industry, the inherent intrayear fluctuations usually follow a systematic path from one year to the next. Economists take these recurring fluctuations into account by making ad justments in economic data to reflect the typical pattern. Procedures have been developed for measuring these systematic fluctuations, gener ally referred to as seasonal adjustment tech niques. M odem techniques of seasonally adjusting econamic data are highly sophisticated and refined. The overall approach still involves, in some man ner, a process for averaging the data for the same months over several years to arrive at a “typical” measure of activity for that month. The normal level of business activity being measured for each month is then considered in relation to the aver age monthly level for the entire year. If activity in a certain month is equal to the average month for the year, a value of 100 is assigned as that month’s seasonal factor. Values above 100 repreM O N T H L Y R E V IE W sent a seasonal increase and those below 100 a seasonal decrease. The degree of seasonal activity is therefore represented by the percentage amount each month’s seasonal factor exceeds or falls below 100. The resulting seasonal factors are then used to adjust economic data for normal seasonal activity in order to reveal the fundamental changes that are of concern to the economist and business analyst. The seasonal factors themselves, however, tell a story of their own. The seasonal index offers the analyst or businessman a convenient indicator of the normal level of activity during a certain month as well as the seasonal strength or weak ness compared to other months. Differences in business seasonal patterns, when one area is com pared to another, also mirror differences in the relative importance of business activities of a sea sonal nature between the areas. Personal incom e in the six D istrict states ex hib its varying se ason al patterns. An early down turn is com m on, but the upward paths and peak m onths are unique in a lm ost every state. Som e m inor sh ifts have occurred in recent years in the se ason al patterns. Percent Seasonal Income Activity Although each subsector of an area’s economy has a typical seasonal pattern, the focus of this article is seasonality in personal income. An area’s personal income—wages and salaries, prof its, rents, and transfer payments—is a major in dicator of general economic conditions, since the level or rate of change in business activity in many underlying sectors is reflected by the total income produced. Seasonal personal income indexes for the en tire District and each District state are shown on the accompanying chart. The extent of fluctua tions around the 100 percent norm gives us some idea of the amount of seasonal income variation. The range of seasonal swing and average deviaTable I Measures of Seasonal Sensitivity on Personal Income, 1966 A v erag e D ev iatio n 1 R elativ e R a n g e 2 P e rc e n t A la b am a T en n essee L o u isia n a G eorgia F lorida M ississip p i T o tal Six S ta te s 3.17 3.17 2.83 2.92 2 .42 9.08 2.83 14 14 12 13 15 33 11 iT h e a v e ra g e a b s o lu te a m o u n t by w h ic h th e m o n th ly s e a s o n a l f a c to r s d e v ia te fro m th e a v e ra g e fo r all 12 m o n th s of th e y e ar. S in c e th e n o rm a l m o n th th ro u g h o u t th e y e a r is re p re s e n te d by 100, th is m e a s u re re p r e s e n ts th e a v e ra g e m o n th ly d e v ia tio n , p e rc e n ta g e w is e , fro m th e y e a r’s a v e ra g e . T h e c lo s e r t h e a v e ra g e d e v ia tio n is to z ero , th e le s s s e a s o n a l v a ria tio n ; t h e a m o u n t by w h ic h it e x c e e d s z e ro is a n in d ic a tio n of th e d e g re e of s e a s o n a lity in in c o m e . 2T h e d iffe re n c e in th e h ig h a n d low v a lu e s fo r th e s e a s o n a l index, e x p re s s e d a s a p e rc e n ta g e of th e y e a r’s a v e ra g e . N O EM B ER 1968 DigitizedVfor FRASER 151 tion from the norm (Table I) provide summary measures of the seasonal variation. Taken to gether, these measures tell us that income in individual months will vary, on average, about 3 percent from the average for the year, and the variation will amount to about 15 percent between the high and low values. The major exception to this pattern is Mississippi, where the average monthly variation is approximately 9 percent and from the lowest to the highest points it is over 30 percent. Mississippi is unique among the District states in the unusually sharp upturn in its income in late summer and early fall. Each state has its own distinct seasonal income pattern, which is related to the sources of its in come. Within each state, the various income com ponents work together through their own unique seasonal patterns to shape the state’s overall sea sonal income oscillations. To a large extent, the seasonal effects offset each other, so that the over all seasonality pattern is an average of the sep arate influences. The range between high and low values of the seasonal income index for the District is smaller than for any of the individual states. Instead of the swings in income in each state moving to gether and accentuating the District’s fluctuation, the movements are oftentimes offsetting, thereby minimizing the volatility of the swings when the entire District is considered. In other words, the separate seasonal effects in the various states tend to cancel each other when combined. In order to look at these cancellation effects, we grouped the states according to their seasonal similarity to the District. The basis for our group ing was the number of months in which the state’s seasonal movement paralleled that of the District. If the state’s seasonal pattern moved in the same direction as the District’s, then the sea sonal patterns were similar. The order in which the states are listed in Table I is based on the Income Data The income data from which the seasonal fac tors were calculated were based on monthly in come estimates made by the Federal Reserve Bank of Atlanta for each District state. The year ly income totals derived from the monthly esti mates are adjusted each year to the annual estimates made by the U.S. Department of Com merce for these states. The seasonal factors shown in this article were derived from the Bank’s 1961-66 monthly estimates, after adjust ment to the Commerce Department’s annual estimates. 152 similarity of each state with the entire District, i.e., Alabama and Tennessee showed very similar patterns, moving in the same direction as the District during 11 months, and Mississippi showed the least similar pattern. Examining the chart on seasonal factors clearly shows the similarity of Alabama’s and Tennes see’s income patterns with those of the six states combined. Even in these two states, however, off setting patterns are apparent. The slight rise in October’s seasonal factor at the District level rep resents a type of weighted average between a de crease in Alabama’s income for that month and an increase in Tennessee’s. In the states with the least similarity to the District, the cancellation in income patterns is even more apparent. Economic Structure and Seasonality Dissimilar seasonal income patterns among the states is not unexpected. Differences in economic characteristics and sources of income result in a unique pattern for each state. Compare Missis sippi and Florida, for example: Mississippi’s in come pattern is influenced strongly by the agri cultural sector, while Florida relies heavily on income from trade and services. Generally, the more diversified the state’s economy and the less it depends on income from seasonal sources, the smoother is the seasonality of its overall in come pattern. Those states that depend more heavily on income from seasonal sources prob ably will also experience wider swings in their overall seasonal income patterns unless, of course, the seasonal fluctuations from various sources are offsetting. Some idea of each state’s underlying major in come sources is, therefore, an important element shaping its overall seasonal income pattern. In making monthly income estimates, the Federal Reserve Bank of Atlanta estimates the income in each of several major segments. Thus, we can use these components to establish the reasons for the varying seasonal patterns among states as well as within each state. The combined sectors that ac counted for over half of each state’s personal in come in 1967 are shown in Table II. Also shown, are the ranges from highest to lowest in the sea sonal index for each of these components. Taken together, they suggest the importance of the vari ous sectors in determining each state’s overall seasonal income pattern. Those sectors directly related to weather or climatic conditions — construction, agriculture, trade, and property — generally experience the most volatility in income during the year. In every state, agriculture is the most changeable. It ranges from 135 percent of the norm in Alabama M O N T H L Y R E V IE W T a b le II S h a r e s o f T o ta l P e r s o n a l In c o m e by S e le c t e d C o m p o n e n t s 1 a n d R a n g e o f S e a s o n a lit y , 2 S ix th D is t r ic t S t a t e s S ta te C om ponent M ississip p i T en n essee A lab am a F lo rid a G eorgia L o u isia n a M a n u fa c tu rin g % S h a re S e a s o n a l ra n g e 22 4 11 10 20 4 13 7 18 6 24 4 C o n stru c tio n % S h a re S e a so n a l ra n g e 4 24 5 14 4 30 7 17 4 30 4 32 A g ric u ltu re % S h a re S e a s o n a l ra n g e 4 135 3 142 4 173 4 136 11 214 3 137 T ra d e % S h a re S e a s o n a l ra n g e 10 5 13 15 12 7 11 7 9 5 11 8 S e rv ic e s % S h a re S e a s o n a l ra n g e 8 4 10 11 7 3 7 5 7 4 7 3 P ro p e rty % S h a re S e a s o n a l ra n g e 11 20 18 33 11 21 15 20 12 23 12 22 S h a r e s of to ta l in c o m e a r e b a s e d on U.S. C o m m e rc e D e p a r tm e n t’s a n n u a l fig u res fo r 1967. ^S e a so n a l ra n g e s w e re c a lc u la te d fro m th is B a n k ’s m o n th ly in c o m e e s tim a te s a n d th e ir c o m p o n e n ts fo r 1966. to 214 percent in Mississippi. The wide swing in agricultural income in Mississippi, however, is the major factor shaping that state’s overall sea sonal pattern because of its importance—10.6 percent of total personal income—in Mississippi’s economy. Although the seasonality of income from agriculture in the other states is also ap parent, it contributes less to the overall seasonal income pattern in those states, since agriculture accounts for a smaller share of their total in comes. Construction income is related to climatic con ditions as well and acts in the same manner on personal income as agriculture does in most of the states. Trade accounts for about 10 percent of most of the states’ income, with the seasonality of this sector being especially noticeable in Florida. Service income follows a pattern similar to trade income in Florida, as does property income. In the states other than Florida and Louisiana, manufacturing is the single major source of in come. However, since manufacturing is not as de pendent on climatic or other special seasonal in fluences, the seasonal swing for this component is less volatile for each state. Less Seasonality Although we found that seasonal swings in per sonal income follow a definite pattern, the pat terns have changed slightly over the years. This becomes evident as one compares the seasonal indexes for 1960 and 1966 for each of the states NOVEMBER 1968 in the chart. The chart also shows that seasonal swings in personal income have become smaller. Income sources that are light in seasonality have grown rapidly, and the behavior of tourist and other traditional seasonal activities has moderated. Smaller income swings are welcome since they contribute to a more stable income base and a more stable economy. An outstanding example is Florida, which has managed to attain greater seasonal balance by attracting a growing number of summer visitors to supplement her traditional surge of winter vacationers. Recognition of the “typical” patterns of busi ness activity is usually a first step in discovering ways of smoothing out the sharp seasonal fluctua tions in a state’s economy. The seasonal patterns of personal income can serve as a point of de parture for focusing attention on the magnitude and timing of reducing these seasonal imbalances. Recognition of the seasonal nature of economic activity is also of prime concern to the banking community. Commercial banks are faced with seasonal demands for credit, and these demands do not always coincide with seasonal swings in their deposits. Banks often find that the demands for their loans and deposits vary with changes in economic conditions in their communities. Some of the relationships between bank deposits and personal income, with special reference to the Southeast, will be discussed in a future Monthly Review article. J o e W. M c L eary 153 S ix t h D is tric t S ta tis tic s Seasonally Adjusted (All data are indexes, 1957-59 = IOO, unless indicated otherwise.) Latest Month (1968) One Month Ago Two Months; Ago One Year Ago SIXTH DISTRICT ....................... Manufacturing N o n m a n u fa ctu rin g.................... IN CO M E A N D SP EN D IN G Personal Income (Mil. $, Annual Rate) . Aug. 67,284 66,40 lr 65,945 r 60,565 Manufacturing P a y r o lls ................. . Sept. 233 231 229 208 Farm Cash R e c e i p t s ...................... . Aug. 121 159 102 161 C r o p s .................................... . Aug. 187 143 184 174 L iv e sto c k ................................. . Aug. 165 159 154 152 Instalment Credit at Banks* (Mil. $) 324 New Loans .............................. . Sept. 357 320 339 268 282 319 Repayments .......................... . Sept. 322 168 170 180 183* Retail S a l e s .............................. . June One Two Month Months Ago Ago One Year Ago 164 158 113 79 162 159 112 87 163 159 110 84 162 152 101 88 2.7 42.1 2.9 42.2 2.9 41.5 2.9 42.4 315 235 245 311 235 235 303 234 232 271 200 202 Latest Month (1968) . . . . Sept. Sept. Sept. Sept. Farm E m p lo y m e n t....................... Unemployment Rate (Percent of Work Force) . . . . . Sept. Avg. Weekly Hrs. in Mfg. (Hrs.) . . - Se p t . FINANCE AND BA N KING Member Bank L o a n s .................... Member Bank D e p o s it s ................. Bank D e b its * * .............................. . Sept. . Sept. . Sept. PRODUCTION AND EM PLOYM ENT Nonfarm E m p lo y m e n t ................. . Sept. Manufacturing ....................... . Sept. ................................. . Sept. Apparel C h e m i c a l s .............................. . Sept. Fabricated M e t a l s .................... . Sept. F o o d ........................................ . Sept. Lbr., Wood Prod., Furn. & Fix. . . . Sept. Paper .................................... . Sept. Primary M e t a l s ....................... . Sept. Textiles ................................. . Sept. Transportation Equipment . . . . Sept. N o n m a n u fa ctu rin g....................... . Sept. C o n s t r u c t i o n .......................... . Sept. Farm E m p lo y m e n t....................... . Sept. Unemployment Rate (Percent of Work F o r c e ) .............. Sept. Insured Unemployment (Percent of Cov. E m p . ) ............. .. . Sept. Avg. Weekly Hrs. in Mfg. (Hrs.) . . , Sept. . Construction C o n t r a c t s * ............. . Sept. R e s id e n t ia l.............................. . Sept. All O t h e r .................................... . Sept. Electric Power Production** . . . . Aug. Cotton C o n s u m p tio n **................. . Aug. Petrol. Prod, in Coastal La. and Miss.* *Sept. 142 141 174 136 155 114 106 124 129 110 187 142 129 51 142 140 172 135 159 114 106 124 129 110 185 142 128 63 141 140 172 135 159 114 104 123 125 110 182 142 127 66 138 138 169 132 152 112 104 122 130 108 180 139 124 54 4.0 3.9 3.8 4.1 2.0 41.4 172 198 150 146 102 257 2.0 40.8 244 217 268 146 104 264 1.9 41.2 197 213 183 150 107 262 2.4 41.4 157r 173r 144 146 107 253 FINANCE AND BAN KING All Member B a n k s ...................., . Large B a n k s .......................... , . Deposits* All Member B a n k s ....................... . Large B a n k s .......................... , . Bank D e b it s * / * * .......................... .. , Sept. Sept. 291 254 286 250 282 249 257 229 Sept. Sept. Sept. 215 187 240 215 186 233 214 186 235 193 172 207 8,623r 199 161 8,508r 200 150 ALABAMA IN CO M E Personal Income (Mil. $, Annual Rate) . Aug. 8,814 204 . Manufacturing P a y r o lls ................ , Sept. 144 Farm Cash R e c e i p t s ........................ Aug. 8,014 182 124 PRODUCTION A N D EM PLOYM ENT Nonfarm E m p lo y m e n t ................... . Manufacturing ....................... . N o n m a n u fa ctu rin g.................... .. . C o n s t r u c t io n ....................... .. . Farm E m p lo y m e n t.......................... . Unemployment Rate (Percent of Work F o r c e ) ............. . Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Sept. Sept. Sept. Sept. Sept. 127 126 127 117 52 127 126 127 116 68 127 125 127 114 74 126 124 126 117 55 Sept. Sept. 4.9 41.2 4.8 40.6 4.5 41.8 4.8 40.9 Member Bank L o a n s ........................ Sept. Member Bank D e p o s i t s ............. . Sept. Bank Debits** .......................... .. . Sept. 265 205 221 263 206 220 260 205 219 240 190 193 FLORIDA INCO M E Personal Income (Mil. $, Annual Rate) , Aug. 19,772 . Manufacturing P a y r o lls ..................... Sept. 297 Farm Cash R e c e ip t s ....................... . Aug. 172 19,535r 19,214r 17,414 291 285 268 182 180 160 PRODUCTION A N D EM PLOYM EN T 154 INCO M E Personal Income (Mil. $, Annual Rate) . Aug. 13,042 238 Manufacturing P a y r o lls ................. . $ept. 163 Farm Cash R e c e ip t s .................... . Aug. 12,937r 12,854r 11,707 234 210 238 158 170 159 PRODUCTION AND EM PLOYM ENT Nonfarm E m p lo y m e n t ................. Manufacturing ....................... N o n m a n u fa ctu rin g.................... C o n s t r u c t io n ....................... Farm E m p lo y m e n t....................... Unemployment Rate (Percent of Work Force) . . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . Sept. Sept. Sept. Sept. Sept. 143 136 146 146 48 143 136 146 144 61 142 135 146 145 58 138 132 141 139 50 . Sept. . Sept. 3.5 41.6 3.5 40.7 3.4 40.9 3.7 41.6 . Sept. . Sept. . Sept. 308 237 268 298 237 260 292 231 267 268 213 229 . . . . . FINA NC E AND BA N KIN G Member Bank L o a n s .................... Member Bank D e p o s it s ................. Bank D e b it s * * .............................. LOUISIANA INCO M E Personal Income (Mil. $, Annual Rate) . Aug. 10,145 Manufacturing P a y r o lls ................. . Sept. 209 Farm Cash R e c e ip t s .................... . Aug. 308 10,066r 201 170 9,994r 203 154 9,263 189 236 PRODUCTION AND EM PLOYM EN T Nonfarm E m p lo y m e n t ................. Manufacturing ....................... N o n m a n u fa ctu rin g.................... C o n s t r u c t io n ....................... Farm E m p lo y m e n t....................... Unemployment Rate (Percent of Work Force) . . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . . . . . . Sept. Sept. Sept. Sept. Sept. 132 123 134 138 51 131 121 134 137 58 131 121 133 137 61 129 120 131 132 55 . Sept. . Sept. 5.2 42.5 5.1 41.2 4.9 42.6 5.0 42.0 . Sept. . Sept. . Sept. 242 172 190 238 173 189 239 174 193 231 163 172 5,060r 268 175 5,163r 266 189 FINA NC E AND B A N KIN G Member Bank L o a n s * ................. Member Bank D e p o s i t s * ............. Bank D e b it s * / * * ........................... M IS S IS S IP P I IN CO M E Personal Income (Mil. $, Annual Rate) . Aug. 5,218 Manufacturing P a y r o lls ................. . Sept. 268 Farm Cash R e c e ip t s .................... . Aug. 191 4,696 232 156 PRODUCTION A N D EM PLO Y M EN T FINA NC E AND BA N KIN G Nonfarm E m p lo y m e n t ................... . Sept. GEORGIA 159 160 160 153 Nonfarm E m p lo y m e n t ................. Manufacturing ....................... N o n m a n u fa ctu rin g.................... C o n s t r u c t io n ....................... Farm E m p lo y m e n t....................... Unemployment Rate (Percent of Work Force) . . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . . . . . . Sept. Sept. Sept. Sept. Sept. 143 153 139 141 38 143 153 139 139 54 143 151 140 136 62 139 146 137 144 38 . Sept. . Sept. 5.2 40.9 4.6 40.8 4.5 41.0 5.3 40.8 . Sept. . Sept. 347 249 251 345 248 247 339 244 248 306 231 215 FINA NC E AND BA N KIN G Member Bank L o a n s * ................. Member Bank D e p o s it s * ............. Bank D e b it s * / * * ........................... M O N T H L Y R E V IE W Latest Month (1968) One Two Months Year Ago Ago One Month Ago 10,180r 10,212r 216 217 134 147 Two Months Ago One Year Ago 134 159 52 134 159 61 133 156 64 133 160 58 4.0 40.7 3.6 40.1 3.9 40.2 4.2 40.7 277 192 258 N o n m a n u fa ctu rin g................. C o n s t r u c t io n .................... Farm E m p lo ym e n t.................... . . Sept. Unemployment Rate (Percent of Work Force) . . . . . Sept. Avg. Weekly Hrs. in Mfg. (Hrs.) . . . Sept. E N N E SSE E NCOME Personal Income (Mil. $, Ann. Rate) Aug. 10,293 Manufacturing P a y r o lls ................. . Sept. 217 Farm Cash R e c e ip t s .................... . Aug. 139 One Month Ago 275 191 244 276 193 251 245 182 232 Latest Month (1968) 9,471 196 139 FINANCE AND BAN KING 'RODUCTION AND EM PLOYM ENT Nonfarm E m p lo y m e n t ................. . Sept. M a n u f a c t u r in g ....................... . Sept. 139 148 138 147 138 146 For Sixth District area only. Other totals for entire six states. 137 145 **Daily average basis. Member Bank L o a n s * ............. Member Bank Deposits* . . . . Bank D e b i t s * / * * .................... r-Revised. tEstimated. ources: 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 gencies; 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, ed. 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. D e b its to D e m a n d D e p o s it A c c o u n ts Insured Commercial Banks in the Sixth District (In Thousands of Dollars) Percent Change Sept. 1968 Aug. 1968 Percent Change Year-to-Date 9 months Sept., 1968 from 1968 Aug. Sept. from Sept. 1967 1968 1967 1967 Year-to-Date 9 months Sept., 1968 from 1968 Sept. Aug. Sept. from 1967 1968 1967 1967 TANDARD METROPOLITAN TATISTICAL A R EA Sf Birmingham . . . . Gadsden ............. Huntsville . . . . Mobile ............. Montgomery . . . Tuscaloosa . . . 1,793,079 60,255 181,898 501,169 325,725 113,411 1,797,325 63,523 194,251 545,925 336,423 117,659 l,507,988r 60,365 170,808 455,965 320,040 93,215 -0 -5 -6 -8 -3 -4 +19 -0 +6 +10 +2 +22 +10 +7 +5 +10 + 10 +11 710,471 1,626,748 2,827,429 616,020r 220,422 171,312 576,551 1,427,445 2,200,773 470,560 187,237 135,612 +6 +12 -4 -1 -3 + 14 +31 +27 +23 +30 +15 +9 +23 +10 +25 + 19 +10 +11 1,458,081 437,342 1,292,692 370,718 +4 +6 +28 +25 +18 +20 Albany ............. 103,257 Atlanta ............. . 5,799,193 A u g u s t a ............. 304,541 Colum bus . . . . 248,279 Macon ............. 263,671 Savannah . . . . 305,941 94,560 5,825,101 301,918 247,743 279,390 295,224 89,881 4,930,456r 275,339 221,362 252,432 250,426 +9 -0 +1 +0 -6 +4 + 15 +18 + 11 + 12 +4 +22 +15 +16 +8 +13 +11 + 13 Baton Rouge Lafayette . Lake Charles New Orleans 612,891 141,781 154,440 2,440,487 509,271 116,335 143,051 2,187,869 -7 -3 +4 +0 +11 +18 + 12 +12 + 13 +14 +9 +6 686,932 759,540 611,512 -1 0 +12 + 12 Chattanooga . . 621,296 Knoxville . . . . 519,417 Nashville . . . . . 1,853,413 637,067 553,362 1,889,292 574,023 451,055 1,619,786 -3 -6 -2 +8 +15 + 14 +9 + 12 +15 75,014 69,366 46,529 62,916 64,830 47,614 +0 +8 +1 +19 +15 -1 +4 +13 +2 31,042 75,747 226,630r 90,075 31,687 62,059 195,169 81,870 -4 -1 -2 +4 -6 +20 + 14 + 15 -1 + 17 + 10 +8 85,550 92,229 71,442 86,272 -5 +8 + 14 + 16 +27 +18 Ft. LauderdaleHollywood . . 753,354 Jacksonville . . . 1,815,989 Miami ............. . 2,713,647 Orlando . . . . 612,609 Pensacola . . . . 214,696 Tallahassee . . . 147,886 Tampa . St. Petersburg . . 1,468,059 W. Palm Beach . 464,141 Jackson . . . . . . 567,014 . . 136,895 . . 159,858 . . . 2,441,728 . . . . THER C E N T ERS Anniston . . . . Dothan ............. Selma ............. 75,086 74,784 46,935 Bartow ............. Bradenton . . . Brevard County Daytona Beach . . Ft. Myers— N. Ft. Myers . . Gainesville . . . 29,810 74,757 222,737 93,933 81,353 99,818 Includes only banks in the Sixth District portion of the state. N O V E M B E R 1968 tPartially estimated. Sept. 1968 Aug. 1968 Lakeland . . . . Monroe County . . ............. Ocala St. Augustine . . St. Petersburg . . Sarasota . . . . Tampa ............. Winter Haven . . 116,583 36,469 63,802 24,494 335,965 118,444 786,270 61,847 118,761 36,192 58,932 23,469 326,869 130,547 786,235 62,666 109,980 33,988 52,887 17,777 271,889r 93,204 705,458 53,029 -2 +1 +8 +4 +3 -9 +0 -1 +6 +7 +21 +38 +24 +27 +11 +17 +8 +9 +11 +14 +8 +28 +21 +17 Athens ............. Brunswick . . . Dalton ............. Elberton . . . . Gainesville . . . LaGrange . . . . Newnan . . . . Rome ............. Valdosta . . . . 82,426 45,637 116,375 16,580 72,949 38,065 24,479 25,329 82,148 59,525 86,046 47,481 106,060 14,527 72,100 35,291 23,515 25,723 81,952 65,980r 70,680 41,278 80,068 16,166 67,507 35,993 22,543 24,919 69,414 64,099 -4 -4 + 10 +14 +1 +8 +4 -2 +0 -1 0 +17 +11 +45 +3 +8 +6 +9 +2 +18 -7 +19 +13 +29 -5 +1 +10 +5 +5 +13 +6 Abbeville . . . . Alexandria . . . Bunkie ............. Hammond . . . New Iberia . . . Plaquemine . . . Thibodaux . . . 14,580 136,625 6,800 38,891 35,841 13,134 21,744 12,355 145,817 6,204 39,667 36,811 12,634 21,771 12,412 124,755 5,960 42,983 33,899 10,287 20,680 +18 -6 +10 -2 -3 +4 -0 +17 +10 +14 -1 0 +6 +28 +5 +9 +7 +2 +2 +4 +21 +7 Biloxi-Gulfport Hattiesburg . . . Laurel ............. Meridian . . . . Natchez . . . . Pascagoula— M oss Point . . . Vicksburg . . . . Yazoo City . . . 116,084 63,093 38,839 69,400 40,757 123,338 62,288 40,248 77,124 41,331 98,216 51,994 31,523 61,553 34,868 -6 +1 -4 -1 0 -1 +18 +21 +23 +13 +17 +14 +12 +21 +7 +10 75,140 38,190 50,522 67,534 40,972 32,338 53,668 39,543 25,402 +11 -7 +56 +40 -3 +99 +24 +3 +7 Bristol ............. Johnson City . . . Kingsport . . . . 82,433 85,013 166,558 83,860 81,426 159,261 76,336 72,112 141,548 -2 +4 +5 +9 +18 +18 +20 +9 +11 XTH DISTRICT, Total 33,867,021 34,378,071 29,116,351r -1 +16 +14 Alabama^ . . . . 4,446,648 Florida:]: ............. 10,322,716 8,957,521 Georgia^ . . . . Louisiana!* . . . . 4,151,924 1,564,140 M ississippit* . . . 4,424,072 Tennesseet* . . . 4,505,107 10,355,693 9,080,094 4,219,120 1,633,214 4,584,843 3,869,491 8,519,704 7,654,693r 3,756,983 1,336,346 3,979,134 -1 -0 -1 -2 -4 -4 +15 +21 +17 +11 +17 +11 +12 +18 +14 +8 +13 +12 ^Estimated. r-Revised. 155 D is tric t B u s in e s s C o n d itio n s T h e D is t r ic t e c o n o m y c o n t in u e s on its e x p a n siv e p a th . M a n u f a c t u r in g e m p lo y m e n t a d v a n c e d m o d e r a te ly in S e p te m b e r , c a u s i n g s tr e n g th in m a n u f a c t u r in g p a y r o lls . B u o y e d by h ig h e r p e r s o n a l in c o m e s a n d in c r e a s e s in in s t a lm e n t b o rro w in g, c o n s u m e r p u r c h a s e s r e m a in e d str o n g . T h r o u g h S e p te m b e r , a ll m a jo r c a t e g o r ie s o f c o n s tr u c t io n a c t iv it y sh o w e d s t r o n g g a i n s over y e a r-e a rlie r le v e ls. In O c to b e r, b a n k lo a n s a d v a n c e d fu rth e r. F a rm in c o m e a n d m o s t p r ic e s r e m a in a b o v e la s t y e a r ’s level, b u t c ro p p r o s p e c t s h a ve tu rn e d le s s fa v o ra b le . In S e p te m b e r , n o n fa r m e m p lo y m e n t c h a n g e d , w ith a m o d e ra te g a in w as un in m a n u f a c t u r in g b e in g ro u g h ly o ffse t by a d e c lin e in n o n m a n u f a c The overall unemployment rate registered a fractional increase. The strength in manufac turing employment was attributable to gains in apparel, chemicals, and transportation equip ment. This advance offset the effect of labor disputes in fabricated metal plants in Tennessee and Georgia. Both manufacturing payrolls and average workweek increased moderately. tu rin g . C o n s u m e r s p e n d in g c o n t in u e s str o n g , a s p er s o n a l in c o m e a n d in s ta lm e n t c re d it a d v a n c e . The District consumer, like his national counterpart, is definitely in a buying mood. Automobile sales and bank auto loans rose in September. Instal ment loan extensions at banks for other types of goods also advanced in September, suggesting further gains in nonauto sales. Decisions to spend more out of gains in personal income, supple mented by credit buying, have contributed to the continuing strength in the consumer sector. However, consum er borrow ing slowed down slightly in October. T h ro u g h th e first n in e m o n t h s o f 1 9 6 8 , a g g r e ga te c o n t r a c t s for a ll t y p e s o f c o n s tr u c t io n ran 16 p e rc e n t a b o v e la s t year, a n d r e s id e n tia l c o n t r a c ts w ere a lm o s t 2 2 p e rc e n t h igh e r. 156 Residential gains were almost wholly in the large metropoli tan areas, with five central and south Florida cities accounting for more than two-thirds of the District total. The advance was concentrated in multifamily apartments and hotels. Florida sav ings and loan associations reported strong in creases in net savings, thus obtaining the lion’s share of total net savings increases in the District. L o a n s c o n tin u e d to e x p a n d a t D is t r ic t b a n k s in Business lending was again strong at the large banks, with trade and service sectors the major borrowers. The amount outstanding of large negotiable certificates of deposit climbed rapidly. O c to b e r. Poor g r o w in g c o n d it io n s la te in th e se aso n c a u s e d c ro p p ro d u c t io n e s t im a t e s fo r 1 9 6 8 to be re v ise d d o w n w a rd fo r m o s t m a jo r D is t r ic t c ro p s. Because of small carryover stocks and cotton production that is expected to fall below domes tic and foreign utilization, cotton prices moved to levels well above a year ago. Florida’s orange crop is expected to exceed last year’s output by over 30 percent and may push prices well below last year’s inflated levels. Damage from Hurri cane Gladys was confined largely to some of Florida’s tender vegetable crops. NOTE: D ata on w h ic h s ta t e m e n ts a re 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 s ib le to e lim in a te s e a s o n a l in flu e n c e s. M O N T H L Y R E V IE W
@FedFRASER