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Postwar Business Cycles in the Sixth District Atlanta, Georgia October • 1963 Also in this issue: DISTRICT TRENDS IN CORPORATE FINANCING SIXTH DISTRICT STATISTICS OSTRICT BUSINESS CONDITIONS “Business cycles are a type of fluctuation found in the aggregate eco nomic activity of nations that organize their work mainly in business enterprises: A cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general reces sions. . . .” This is the way Wesley C. Mitchell and Arthur F. Burns defined the business cycle in 1946, and it is a good working definition. But, the business cycle, as they would be the first to point out, is not the same at all times and places. As a matter of fact, the picture of the U. S. business cycle that Burns and Mitchell and many other investiga tors have laboriously put together over many years is an abstraction, a composite of many individual fluctuations. Some of these, in particular, those in widely diffused industries, such as automobiles, steel, and aluminum, do occur all over the nation at the same time. Other fluctua tions, however, are the result of decisions made by local businesses in response to local conditions in their regions, states, or even counties. We know that business cycles differ in different countries, and we know that the economic characteristics of the various parts of the United States differ from one another. It is, therefore, reasonable to assume that business cycles in the Sixth Federal Reserve District will differ from those in the rest of the country. This is an attempt to explain how and, if possible, why these cyclical patterns differ. Manufacturing Employment S ix th D istrict an d U nited S tates P e rce n t P e rce n t S & eraf C yclical movem ents in the District, a s illustrated by m anufacturing em ploym ent, h ave been quite sim ilar to those in the U. S., but a rap id rate o f grow th has caused the im pact of recessions to be less severe in the District. The Evidence of the Numbers In order to compare the District and the nation, we need statistical series that: (1) display cyclical movements (farm employment, for example, apparently does not); (2) are continuous for the whole of the postwar period; (3) have the same coverage in the two areas; and (4) de scribe fairly large aggregates of economic activity. This last criterion is necessary so that our conclusions will not be unduly influenced by events in one particular in dustry, such as textiles or construction. To some extent, these criteria conflict, and compromises have been necessary. Ideally, for example, we should like to use the Gross National Product because it is the most comprehensive indicator available, but there is no com parable District series. There is also no District industrial production series, but we have substituted an index of electric power consumption by industrial establishments. Again, unemployment figures as a percentage of the labor force were unavailable for the District, so the insured un employment rate was used instead for both areas. This process of elimination left seven series: 1. Average weekly hours worked in manufacturing es tablishments. 2. Industrial production. a. For the U. S., the Federal Reserve Board index of industrial production. b. For the District, an index of the total of: (1) Sales of electricity to ultimate industrial users and (2) Production of electric energy by industrial establishments. 3. Employment in manufacturing industries. 4. Income from payrolls of manufacturing establish ments. Employment in nonmanufacturing industries (ex cluding agriculture). 6. Employment in all nonfarm activities. 7. Unemployment as a percentage of all employees covered by state unemployment insurance programs. Initially, all the series were adjusted for seasonal varia tion and converted to indexes with a base period of 1957-59, so that the U. S. and District could be more easily compared. There have been four recessions and four recoveries in the United States since World War II. The latest recov ery period has not ended yet, so far as we know, but that does not matter for our purposes because we are pri marily concerned with the turning points. That is, we shall be looking at the times at which the various economic indicators changed their direction of movement, either upward from a recession trough or downward from an expansion peak. The indicators did not all change direc tion at the same time, however. Since we wanted to com pare the timing of the various series, one with another, and also the timing of each series in the U. S. and District, some fixed reference points seemed necessary. Such ref erence dates have been estimated by the National Bureau of Economic Research and identified as the turning points in “general business activity”. By no means does every one agree with these dates; but whether they are “correct” or not is of no importance in this connection because they are only being used as reference points to compare the relative positions of the individual series. The first table Number of Months by Which Cyclical Reversals in the United States and Sixth District States Occurred Later or Earlier than Reference Dates (M inus sig n s in d ica te r e v e r s a ls occu rred e a r lie r .) ECONOMIC S ER IES 1. Average Weekly Hours U .S . District States 2. Insured Unemployment U. S. District States 3. Industrial Output U. District States s. 4. Manufacturing Emp. U. District States s. 5. Manufacturing Income U. District States 6. Nonfarm Employment U. District States 7. Nonmanufacturing Emp. U. District States s. s. s. Oct. 1949 UPTURNS Apr. Aug. 1954 1958 Feb. 1961 Nov. 1948 DOWNTURNS July July 1957 1953 May 1960 n.a. n.a. —4 —3 0 0 —2 —1 n.a. n.a. —3 —8 — 20 — 23 — 12 — 13 0 0 + 1 —2 0 +1 —2 +3 n.a. n.a. —8 —1 — 20 — 18 — 11 — 11 0 0 —5 —8 0 +1 —2 —1 —4 + 2 0 +3 —5 —3 —4 —3 0 —3 0 —1 +1 +1 0 +1 — 10 —4 —2 + 1 —4 —3 —3 —1 n.a. n.a. 0 —2 0 +1 0 —1 n.a. n.a. 0 +1 0 +1 —4 —4 0 0 0 —2 0 +1 0 +2 —4 —4 —2 +1 —4 +1 —1 —1 —2 —5 0 —2 0 +2 +1 +3 +3 +3 +2 +2 —1 —1 +4 0 shows the comparisons thus obtained. A minus sign indi cates that the series in question turned up from a trough or down from a peak before the National Bureau refer ence date; a plus sign signifies that it turned after that date. Only two of our seven indicators, average weekly hours and the insured unemployment rate, consistently turned down from peaks in both areas before the other series did. They tend, in other words, to be “leading indicators.” They did not, however, always lead on the upturn in either area. Even the extent to which they led the other series down was not very consistent, but at least the degree of inconsistency was about the same in the U. S. and Dis trict. Furthermore, the relation between the U. S. and District series for these “leading indicators” remained about the same for the whole period studied. This was not true, however, for the other series, the “roughly co incident indicators.” A distinct tendency may be discerned for these other five series to turn down from the cyclical peaks of 1948 and 1953 later in the District than in the nation, whereas in 1960 this lag had almost disappeared. And, in the recovery phase, the District indicators had shown a tendency to turn up from the 1949 and 1954 cyclical troughs before the national indicators did. In Percentage Rise and Fall in Economic Series During Recessions and Expansions U n ited S ta te s a n d S ix th D istrict S ta te s DOWNTURNS UPTURNS ECONOMIC S E R IE S 1. Average Weekly Hours u. s . District States Insured Unemployment U. S. District States Industrial Output U. S. District States Manufacturing Emp. U. S. District States Manufacturing Income U. S. District States 6 Nonfarm Employment U .S . District States 7. Nonmanufacturing Emp. U .S . District States 2. 3. 4. 5. . 1949 1954 1958 1961 1948 1953 1957 1960 —4 —6 —5 4 5 6 n.a. 5 n.a. —6 —6 —5 4 6 138 130 84 —69 —46 —50 —41 n.a. 118 92 57 —60 —44 —40 —39 n.a. 21 27 17 —10 —10 —14 —7 50 94 68 14 12 —10 —2 — 4 —7 28 9 6 —12 —10 —10 —6 9 —5 — 5 ■— 4 11 8 —12 26 10 n.a. 26 19 18 n.a. —9 —8 — 6 n.a. 34 21 22 n.a. —5 —5 — 4 18 8 7 —5 —3 —4 — 2 9 21 —1 —2 —1 8 6 —4 15 14 7 10 7 —3 — 1 — 2 — 1 16 8 6 —1 —1 20 0* — 1 n.a. n.a. ‘ Less than 0.5 percent. . 2 . 1958 and 1961, however, District recovery seemed to show signs of lagging behind that of the nation. The second table on the opposite page compares the size of the cyclical swings in the District and nation, that is, the percentage change from peak to trough and from trough to succeeding peak in each successive cycle. With few exceptions, the decline from prosperity to recession was less pronounced in the District than in the nation, and the following recovery was stronger in the District than in the nation. Even the exceptions do not, for the most part, contradict this impression. The District unemploy ment rate in every case has declined less during recovery than its national counterpart, but this is understandable because it also rose considerably less during recessions. In other words, it had less ground to recover. In the latest recovery, however, not only did the improvement in the District’s unemployment rate lag behind the nation’s, but four of the other six indicators have also been less buoy ant in the District than in the nation. All this seems to add up to the following broad pat tern: In the early postwar period, the District did not feel the effect of recessions until they had been under way nationwide for some time. When the effects were felt, they were less severe. Furthermore, they did not last as long, for recovery began earlier in the District. More re cently, the District seems to have been affected by reces sion about as soon and about as much as the nation and to have recovered not much more quickly. Total Employment P e rc e n t o f Total E m p lo y m e n t 20 30 40 O 10 20 30 Dram atic changes in the District's economic structure h a ve : (1) in creased the im portance of m anufacturing; and (2) heightened the District's sim ilarity to the U. S. Manufacturing Employment P e rc e n t o f M a n u fa c t u rin g E m p lo y m e n t O F u r n ., L b r ., Sc 10 20 30 40 T-----1tcLdn I----- r O 10 20 30 W o o d P ro d . T e x t i l e M il ls F o o d & K in d re d P r o d u c ts P rim a ry & . F a b . M e ta ls O th e r N o n d u ra b le s W hy the Difference? A p p arel There are two possible explanations for the differences we have observed between our two areas. They are not rival explanations, however, since they reinforce each other. The first is the simplest: The District, throughout most of the postwar period, has grown more rapidly than the nation; and cycles in a rapidly growing area are almost certain to be less severe than in an area of slower growth. To put it more technically, if trends are fitted to time series that are otherwise similar, the series with the steep est upward trend will show smaller and shorter recessions. The amount of decline from peak to trough will be less; the subsequent expansion will be greater; and the time between peak and trough will be shorter for the series with the larger rate of growth. This explanation certainly fits our evidence. Even the tendency we have observed for the District’s behavior to become more similar to the nation’s in the latest cycle can be explained by the observation that the rate of growth in most District indicators has slowed down since 1960 and is now little different from that of the nation as a whole.1 The second possible explanation concerns the different economic structures of the District and the nation. Since various types of activity respond differently to cyclical forces, we would certainly not expect two areas with different activity “mixes” to behave in the same way. The 1 In order to measure the effect of trend on cyclical behavior, a least squares trend fitted to the logarithms of the data was constructed for each series in each area for the period July 1953-May 1960. This period runs from the first post-Korean W ar peak to the latest known peak and, thus, eliminates as much cyclical influence on the trend as possible. Deviations from these trends were then computed. In all of the employment series and the electric power series, the amplitude of recessions was found to be considerably larger than before the removal of trend; recessions were longer; and expansions were not so large. In general, all of the cycles conformed more closely to the national pattern than they did before trend elimination, and the tendency for this conformity to increase over time was considerably weakened. C h e m ic a ls O th e r D u ra b le s P rin tin g & . P u b lis h in g M a c h . «St E l e c . M a c h . M o to r V e h . & T r a n s . E q u ip . Much g reater diversity characterizes District m anufacturing activity; although still not larg e by U. S. stan d ard s, the m achinery industries h ave grow n most rap id ly. charts above compare employment patterns in the Dis trict states and the U. S. The first thing to notice is that the two areas are, indeed, different. The right-hand panel of the top chart shows that manufacturing, for example, accounted in 1960 for a considerably larger percentage of total employment in the nation (27 percent) than in the District (21 percent). Trade and service occupations, agriculture, and construction, on the other hand, were rela tively more important in the District. Typically, manu facturing activity and employment fluctuate more widely than nonmanufacturing. Since manufacturing accounts for a smaller percentage of income and employment in the District than in the nation, one may presume that cyclical swings in the District should be smaller and of shorter duration than in the country as a whole. Another fact pointing in the same direction is the District’s concentra tion, within the manufacturing category, on nondurable goods. The right-hand panel of the lower chart demon strates that the District is relatively more important in the production of textiles, food, apparel, and chemicals. It is •3 • less important in the production of hard goods, such as metals, machinery, and motor vehicles. Since demand for nondurables is less sensitive to fluctuations in income than durables (it is easier to postpone the purchase of a new refrigerator than it is this week’s grocery shopping), the District’s concentration in this field should also dampen cyclical swings somewhat. Our two charts give us additional information, how ever. The left-hand panel of each of them shows the U. S.District comparison in 1940, twenty years earlier. At that time, the differences between the two areas were much greater. Since 1940, however, the rapid growth of fabri cated metals, electrical machinery, and transportation equipment plants has caused the District’s economy to be come: (1) more diversified and (2) more like the rest of the country. This should mean that, relative to the U. S., recessions in the District are longer and deeper and ex pansions shorter and smaller now than at the beginning of the period. To put it another way, the District’s busi ness cycle of 1960-63 should be more like that of the nation as a whole than were earlier cycles. Will the Pattern Change? If the economic structure of the District continues to change in the future as it has in the past, the District is likely to become more sensitive to cyclical forces than formerly. Agriculture tends to be a stabilizing factor, be cause price supports act to prevent wide swings in farm ers’ incomes. But if agriculture continues to decline in importance, this factor will diminish. To some extent, growth in the trade and service occupations may take its place; but increased reliance on manufacturing should work in the opposite direction, particularly if durable goods production continues to gain in importance. Four out of the five District manufacturing industries that grew most rapidly between 1947 and 1958— electrical machin ery, transportation equipment, stone, clay, and glass prod ucts, and fabricated metals— were durable goods indus tries. The growth of such industries will tend to raise in comes, as they usually pay higher wages, and they may also help to absorb labor released from those industries in which employment has been declining, such as textiles, lumber, and primary metals. Unfortunately, the durable goods industries are the most unstable cyclically because both their employment and output tend to decline further during recessions than is true of nondurables. A rapid overall rate of growth, such as the District experienced in the mid-fifties, would tend to cushion the effect of re cessions, however. If we continue to grow industrially and to develop the heavier, more unstable industries, mainte nance of a high rate of growth will become all the more important. L a w r e n c e F . M a n sfie l d J ack L. C o o per District Trends in Corporate Financing Security issues registered with the Securities and Exchange Commission by corporations headquartered in the Sixth Federal Reserve District declined $100 million in 1962 from their 1961-dollar volume. This drop followed a de cline of more than $146 million in dollar volume between 1960 and 1961. Data for the first half of this year suggest a further decline in 1963. Moreover, actual sales of such securities by District businesses declined sharply relative to total corporate issues sold by all American firms. The issue and sale of corporate securities is an im portant means of mobilizing a region’s savings and of importing outside funds for private business use. Changes of this magnitude are, thus, of considerable interest to those persons concerned with the availability of investment capital in this area. Total Volume of Securities Issued, 1959 to M id-1963 During this period, the District’s local businesses filed reg istration statements for securities amounting to over $2 billion. Regular issues to be offered publicly, as distin guished from small issues exempt from registration under SEC’s Regulation A, accounted for 97 percent of the total. As shown in the table on the right, 89 percent of the total dollar volume of securities registered were sold. However, there was a striking disparity between the ratio of success in marketing larger “public” issues and in marketing the smaller “Regulation A” issues. While 91 percent of the former offerings were sold during this period, only 46 per cent of Regulation A issues were sold. Corporate Securities Issues by Business Firms H eadquartered in the Sixth Federal Reserve District J a n u a r y 1 9 5 9 - J u n e 1963 Year Total Registered with SEC (Millions of $) All Public Reg. A 1959 495.1 1960 599.7 453.4 1961 1962 353.7 132.7 1963 (6 Mos.) Total 2,034.6 Percentage Distri bution 100.0 Percent of Filings Actually Sold All Total U.S. Total Sold* Issues Sold Ratio of (Millions of $) (Billions District Reg. A Public of $) to U.S. 471.1 5.1 5.5 9.8 10.2 5.9 564.2 10.8 3.5 366.4 13.1 11.3 3.3 4.0 10.8 262.0 6.3 2.1 123.8 .8 484.8 579.1 430.9 340.2 129.4 10.3 20.6 22.5 13.5 3.3 476.6 575.0 377.7 266.0 124.6 1,964.4 70.2 1,819.9 96.6 3.4 100.0 98.2 1.8 89.5 91.0 46.2 1,787.5 32.4 50.2 4.1 *A11 sales recorded in year filed, even though partial sales occurred in subsequent years. Sources: Tabulated from data supplied by SEC, Investment Bankers’ Asso ciation, M oody’s In dustrial M anual, M oody’s B ank and F inance M anual, and The C om m ercial a nd F inancial C hronicle. The table also reveals that changes in the annual vol ume of securities sales by businesses in this District dif fered significantly from the total volume of U. S. corporate securities sold between January 1959 and June 1963. Such sales by District businesses reached a peak of $600 mil lion in 1960, after which annual volume declined sharply. In contrast, 1961 was the peak sales year for total cor porate issues in the nation as a whole. Moreover, while . 4 . sales of total corporate issues for the U. S. dropped sharply in 1962 from the 1961 peak, figures through June 1963 indicate substantial recovery has taken place. In contrast, the annual sales volume of District private corporate issues continues to decline. The extent of this decline is pointed up by comparing the volume of District security issues sold with the U. S. total: This ratio fell from a high of 6 percent in 1960 to 2 percent for the first half of 1963. Does this mean that businesses in the Sixth District no longer require as much outside capital? Have they been willing but unable to sell additional securities? What kinds of securities have sold best in recent months? What kinds of businesses have found it most difficult to raise equity capital since the stock market stringencies of 1962? Analy sis of the types of issues offered and the timing of such offerings provides some clues to the answers. Types of Issues Over six-tenths of the total dollar volume of securities issues registered by District businesses since 1959 has consisted of bonds and notes. The bulk of these offerings was made by public utilities whose investment programs were at a peak in 1959-60. In the latter year, filings of debt securities accounted for $431 million of the $575 million of securities sold. Since 1960, however, the annual total of such debt securities sales has steadily declined. Thus, a significant part of the overall decline in District securities sales may be ascribed to reduced need for cor porate funds, since there is no question about the ability of public utilities to sell their debt securities. Common stock issues registered during the period January 1959 to June 1963 totaled $667 million and ac counted for one-third of the aggregate value of securities registered. The peak year in this category was 1959, when the volume filed was $207 million. Registrations of com mon stock in 1960 and 1961 were somewhat reduced, although still above $150 million in each year. It was in 1962, however, that volume of these marketings slumped sharply, falling from $162 million in 1961 to $104 mil lion in 1962. Volume in the first half of 1963 was reduced still further, amounting to only $36 million. W hy the Decline? One of the most widely appreciated facts of the current recovery is the high-level flow of internal funds generated by the corporate business sector. Does this mean that Sixth District businesses, like many giant national corporations, have found themselves with ample cash and no longer wish to sell securities? The table showing ratios of securi ties sold to those registered for sale indicates otherwise. It also indicates that small businesses, those most likely to attempt to raise capital through small securities issues under Regulation A, were most severely penalized. This was particularly evident in 1962, when the severe stock market slump occurred in May and June. So far in 1963, it also appears to be true when the ratios for larger public issues and Regulation A issues are compared. The ratio of sold-to-registered securities of the former recov ered from 75 to 94 percent between 1962 and first-half 1963, while the ratio for Regulation A issues declined from 30 percent to 24 percent. From these comparisons Sales of Corporate Securities as a Percentage of Registrations, by Y e a r and by Type of Filing S ix th F e d e ra l R e se rv e D istrict Year All Issues 1959 1960 1961 1962 1963 (6 Mos.) 96.3 95.9 83.3 75.2 93.9 Exempt, Regulation A Issues 53.2 52.3 50.3 29.9 24.3 Regular Public Issues 97.2 97.4 85.0 77.0 95.8 Sources: Tabulated from data supplied by SEC, Investment Bankers’ Asso ciation, M oody’s In dustrial M anual, M oody’s B ank a nd F inance M anual, and The C om m ercial and F inancial C hronicle. it would appear that in 1962 and so far in 1963 many Dis trict businesses attempted to raise additional capital through securities sales but were unable to do so. It would also appear that very small businesses were most severely inhibited in raising desired capital. Types of Security Issuers In addition to issuing the bulk of debt securities within this District, public utilities also account for a sizable share of equity issues. Typically, these are public offer ings of preferred stocks of operating companies and sales of additional common stock to holding company parents, the latter of which are not included in this review. Over the period 1959 to mid-1963, public utilities offered some 68 percent of the total dollar volume of such securities registered for public sale; the annual ratio ranged from 59 percent of total dollar volume in 1961 to 76 percent in the first half of 1963. Issues registered by manufacturing concerns head quartered in the Sixth District, which consisted mostly of common stocks, reached their peak for the period in 1961, when a total of $52 million was filed. The market break of May-June 1962 affected this type of security issue severely, so that, for the full year 1962, volume was re duced to $18 million. Further reduction to $7 million occurred in the first half of 1963. Moreover, the length of time between filing and sale increased, and the ratio of withdrawals to filings rose. Securities registered by Sixth District businesses other than public utilities and manufacturing reached a peak in 1961, when filings amounted to $133 million. Real estate and financial firms dominated this “other” category, rang ing in annual volume from $125 million in 1960 to a mere $22 million in first-half 1963. Reaction to the equitymarket disruption of 1962 has especially inhibited securi ties sales of this type. Weathering the Storm Both debt and equity securities of established, appraisable manufacturing concerns are once more being well received by the market, although the latter may often be a relatively costly means of raising funds. Speculative issues, involving mostly services, real estate, or financial enterprises, con tinue to have little market success. However, some revival appears in the offing for public utilities issues. On balance, the District’s economy as a whole has weathered a severe equity-market disruption rather well. H i r a m J. H o n e a •5 • B a n k A n n o u n c e m e n ts On September 9, the First National Bank of Riviera Beach, Riviera Beach, Florida, a newly organized mem ber bank, opened for business and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers include Stanley H. Oenbrink, Chairman of the Board; James F. Hunt, President; and Jack D. W ebb, Cashier. Capital is $600,000, and surplus and other capital funds, $420,000, as reported by the Comptroller of Currency at the time the charter was granted. The Inter National Bank of Miami, Miami, Florida, a newly organized member bank, opened for business on September 9 and began to remit at par. Officers are George Coury, Chairman of the Board; William L. Pallot, President; and R. C. Nahm, Executive Vice Presi dent and Cashier. Capital is $750,000, and surplus and other capital funds, $525,000, as reported by the Comp troller of Currency at the time the charter was granted. On September 16, the Commercial National Bank of Broward County, Fort Lauderdale, Florida, a newly or ganized member bank, opened for business and began to remit at par. Officers include Richard B. Wiggins, Chairman of the Board; T. G. Williamson, President; John S. Fox, Executive Vice President; and James E. King, Jr., Cashier. Capital is $600,000, and surplus and other capital funds, $400,000, as reported by the Comptroller of Currency at the time the charter was granted. The Bank of Florida, Fort Lauderdale, Florida, a newly organized nonmember bank, opened for busi ness on September 17 and began to remit at par. Offi cers are James S. Hunt, Sr., President and Chairman of the Board; J. Brunton, Executive Vice President; and John J. Hotaling, Cashier. Capital is $400,000, and surplus and undivided profits, $150,000. On September 19, the Citizens Bank of Broward County, West Hollywood, Florida, converted into a national banking association under the title of Citizens National Bank of West Hollywood. Officers include H. D. Perry, Chairman of the Board; C. W. Lantz, Presi dent and Chief Executive Officer; W. L. Paul, S. P. Lewis, G. T. Simpson, D. M. Jordan, and J. S. Portu, Vice Presidents; and Loretta S. Pennell, Cashier. Cap ital is $948,660, and surplus and undivided profits, $574,586, as reported by the Comptroller of Currency at the time the conversion was approved. Debits to Individual Demand Deposit Accounts In su re d C o m m e rcia l B a n k s in th e S ix th D istrict (In Thousands of Dollars) Percent Change Year-to-date 8 months Aug. 1963 from 1963 July Aug. from 1963 1962 1962 Aug. 1963 July 1963 Aug. 1962 2,784,907 48,727 1,017,022 42,508 43,146 113,229 320,989 234,414 30,892 71,191 2,869,298 51,864 1,068,340 40,245 43,732 114,247 330,551 232,255 28,998 71,222 2,509,138 47,555 918,731 38,780 36,948 84,703 303,360 205,616 26,901 70,651 —3 —6 —5 +6 —1 —1 —3 +1 +7 —0 + 11 +2 +11 + 10 + 17 + 34 +6 + 14 + 15 +1 +11 +5 +10 +7 + 11 + 29 + 10 — 21 + 10 +7 6,034,169 20,162 41,922 134,857 63,567 65,036 17,693 201,034 6,642,900 22,913 48,193 136,314 74,438 77,334 26,842 227,118 5,667,716 n.a. 44,452 n.a. n.a. 58,960 n.a. 196,404 —9 — 12 — 13 —1 — 15 — 16 — 34 — 11 +7 n.a. —6 n.a. n.a. + 10 n.a. +2 +9 n.a. n.a. n.a. n.a. + 11 n.a. +3 46,648 53,346 928,057 17,287 81,440 909,088 1,360,512 43,534 267,558 100,021 14,887 215,989 72,084 77,443 469,623 138,769 38,131 56,736 56,532 982,764 18,942 85,988 1,022,247 1,542,655 45,004 305,532 97,781 17,640 245,975 85,381 79,865 481,505 163,722 40,494 n.a. 52,584 939,932 16,846 80,150 958,231 1,368,903 n.a. 262,264 87,178 n.a. 198,814 72,771 74,506 422,844 149,868 n.a. — 18 —6 —6 —9 —5 — 11 — 12 —3 — 12 +2 — 16 — 12 — 16 —3 —2 — 15 —6 n.a. +1 —1 +3 +2 —5 —1 n.a. +2 +15 n.a. +9 —1 +4 + 11 —7 n.a. n.a. + 13 +2 +2 +5 +3 +5 n.a. + 10 +9 n.a. —1 + 12 +9 +6 —1 n.a. GEORGIA, Totalt . . Albany . . . . Athens* . . . . Atlanta . . . . Augusta . . . . Brunswick . . . Columbus . . . . Dalton* . . . . Elberton . . . . Gainesville* . . . Griffin* . . . . LaGrange* . . . M acon...................... Marietta* . . . Newnan . . . . Rome* . . . . Savannah . . . . Valdosta . . . . 5,823,543 60,541 48,848 3,394,562 143,122 33,536 138,354 59,402 12,314 60,558 22,449 16,254 151,767 46,758 23,599 52,879 201,675 44,566 5,463,801 64,226 51,812 3,104,386 158,524 39,841 134,213 55,027 8,890 59,997 23,985 16,544 161,639 43,916 22,045 56,621 192,323 38,882 4,643,972 59,511 44,808 2,570,304 127,155 34,367 129,700 54,734 8,807 55,047 21,744 17,060 145,646 37,122 24,655 49,421 184,485 45,672 +7 —6 —6 +9 — 10 — 16 +3 +8 + 39 +1 —6 —2 —6 +6 +7 —7 +5 +15 +25 +2 +9 +32 + 13 —2 +7 +9 +40 +10 +3 —5 +4 +26 —4 +7 +9 —2 + 14 +5 +3 + 18 +13 +5 +4 n.a. +5 +7 +5 —4 +8 +19 +0 +4 +6 +1 LOUISIANA, T o talt** Abbeville* . . . Alexandria* . . . Baton Rouge . . . Bunkie* . . . . Hammond* . . . Lafayette* . . . Lake Charles . . New Iberia* . . . New Orleans . . . Plaquemine* . . Thibodaux* . . . 2,839,023 8,182 91,429 301,091 4,681 24,194 80,557 86,316 25,057 1,535,875 6,692 14,495 3,138,498 8,067 92,286 359,362 4,460 25,709 85,938 88,320 28,225 1,690,989 7,436 16,169 2,630,699 n.a. 85,058 309,721 4,981 n.a. 73,521 83,611 n.a. 1,463,900 6,383 14,475 — 10 + 1 —1 — 16 +5 —6 —6 —2 — 11 —9 — 10 — 10 +8 n.a. +7 —3 —6 n.a. + 10 +3 n.a. +5 +5 +0 +10 n.a. +6 + 10 n.a. n.a. + 13 +1 n.a. +5 n.a. n.a. 985,230 71,786 40,007 393,193 30,835 50,434 28,547 994,039 75,322 39,712 411,352 30,499 55,294 28,475 888,201 62,674 40,703 371,915 30,529 50,088 26,198 —1 —5 +1 —4 +1 —9 +0 + 11 + 15 —2 +6 + 1 +1 +9 +8 + 11 —2 +6 +2 +8 + 10 43,081 25,902 37,994 39,944 28,097 19,258 n.a. 22,929 n.a. +8 —8 + 97 n.a. + 13 n.a. n.a. + 10 n.a. 2,627,662 52,197 378,660 51,420 95,481 287,561 984,483 2 ,6 % ,0 1 2 61,695 392,484 55,137 104,404 290,343 993,965 2,458,254 53,497 369,442 48,208 92,254 264,752 913,180 —3 — 15 —4 —7 —9 —1 —1 +7 —2 +2 +7 +3 +9 +8 +8 +5 +7 +9 +1 +6 +8 SIXTH DISTRICT, Total 21,094,534 Total, 32 Cities 12,884,700 21,804,548 13,177,681 18,797,980 11,640,796 —3 —2 + 12 + 11 + 10 +9 ;3 00,500,000 320,700,000r 281,000,000 —6 +7 +9 ALABAMA, To talt Anniston . . . . Birmingham . . Dothan . . . . Gadsden . . . . Huntsville* . . Mobile . . . . Montgomery . . Selma* . . . . Tuscaloosa* . . . . . . . FLORIDA, Totalt . . Bartow* . . . . Bradenton* . . . Brevard County* Clearwater* . . . Daytona Beach* Delray Beach* . . Ft. Lauderdale* Ft. MyersNorth Ft. Myers* Gainesville* . . . Jacksonville . . . Key West* . . . Lakeland* . . . Greater Miami* Oca!a* . . . . Orlando . . . . Pensacola . . . St. Augustine* . . St. Petersburg . . Sarasota* . . . Tallahassee* . . Tampa . . . . W. Palm-Palm Bch.* Winter Haven* . . M IS SIS S IP P I, To talt** Biloxi-Gulfport* Hattiesburg . . . Jackson . . . . Laurel* . . . . Meridian . . . . Natchez* . . . . Pa'caqoulaMoss Point* . . Vicksburg . . . Yazoo City* . . . TEN N ESSEE, T o talt** Bristol* . . . . Chattanooga . . Johnson City* . . Kingsport* . . . Knoxville . . . . Nashville . . . . UNITED STATES 344 Cities . . . *N o t included in total for 3 2 cities that are part of the national debit series main tained by the Board of Governors. tP a rtly estimated. n.a. Not available. **In clu de s only banks in the Sixth District portion of the state. r Revised. •6 • Sixth District Statistics Seasonally Adjusted ( A ll d a t a a r e in d e x e s , 1 9 5 7 - 5 9 = Latest Month (1963) One Month Ago Two Months Ago One Year Ago SIXTH DISTRICT INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Farm Cash R e c e i p t s ....................................... C r o p s ............................................................ Livestock ....................................................... Department Store S a l e s * / * * ...................... Department Store S t o c k s * ............................ Instalment Credit at Banks, *(M il. $) New Lo a n s....................................................... R e p a y m e n ts.................................................. 39,726r 107 95 114 129 128r 39,975r 109 100 116 124 127 37,482 114 116 112 121 116r Aug. Aug. 150 154 160 155 165 151 146 141 Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. July Aug. Aug. 111 109 130 105 113 104 93 106 99 94 111 112 98 87 3.7 40.4 132 122 141 107 142 99 167 111 110 132 105r 113 103r 93 107 99 94 115 112 100 92 3.7 41. l r 132r 122 140 106 143 107 167 111 109 131 104 112 102 93 106 98 94 114 112 102 87 3.9 40.7 131 153 149 156 136 99 164 109 107 127 103 102 103 93 105 94 96 111 110 98 90 4.5 40.3 126 104 107 101 136 102 147 Aug. Sept. 154 150 153 144 154 145 138 134 Member Bank Deposits* All B a n k s ....................................................... Leading C i t i e s ............................................ Bank D e b i t s * / * * ............................................ Aug. Sept. Aug. 131 127 143 131 124 141 133 125 143 123 119 122 July July Aug. 5,587 119 107 5,450r 118 105 5,513r 127 113 Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. 106 102 108 94 74 3.9 41.0 121 107 102r 109 93 95 4.0 40.4r 121 107 102 109 94 82 4.1 40.3 121 105 100 107 94 86 5.0 40.8 116 Aug. Aug. Aug. 154 131 137 153 133 135 154 133 139 137 122 118 5,065 110 107 7,487r 117 114 7,537r 128 123 113 107 115 113 90 3.1 40.0 128 113 108 115 116r 97 3.0 39.7 128 108 115 114 72 3.0 39.8 128 115 85 3.2 40.2 123 158 133 168 156 137 153 155 138 152 145 126 128 7,041 116 110 PRODUCTION AND EMPLOYMENT Nonfarm Employm ent.......................................Aug. M an u fa ctu rin g ............................................ Aug. Nonmanufacturing.......................................Aug. C o n stru ctio n ............................................ Aug. Farm Em ploym ent............................................ Aug. Insured Unemployment, (Percentof Cov. Emp.) Aug. Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Aug. Manufacturing P a y r o l l s ................................. Aug. 112 110 106 112 FINANCE AND BANKING Member Bank L o a n s ...................................... Aug. Member Bank D e p o s i t s ................................. Aug. Bank D e b i t s * * ..................................................Aug. LOUISIANA INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) Department Store S a le s*/** July July Aug. 6,073 109 113 6,009r 112 111 6,014r 116 113 Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. 102 98 103 91 98 4.0 42.2 123 102 99 103 94 96 4.1 42.1 124 102 99 103 95 96 4.3 41.9 122 101 96 102 85 95 4.5 42.2 116 Aug. Aug. Aug. 141 120 125 145 119 132 147 121 134 131 115 111 July July Aug. 3,064 119 109 3,042r 121 97 3,171r 127 107 Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. 114 117 112 107 69 4.4 40.6 140 115r 117 113 112 78 4.8 40.4 139 114 116 113 117 77 4.0 40.4 135 111 113 111 102 84 4.7 40.1 130 Aug. Aug. Aug. 175 142 151 169 143 139 172 150 142 154 131 130 July July Aug. 6,570 105 115 6,461r 103 106 6,458r 103 114 Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. 111 112 111 121 96 4.1 40.7 130 111 112r 110 122 98 4.8 41 .l r 131 r 111 112 110 125 95 4.6 40.1 130 109 110 108 122 94 5.3 40.5 123 Aug. Aug. Aug. 157 132 140 154 135 141 159 136 147 139 123 126 5,571 107 106 PRODUCTION AND EMPLOYMENT Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. FINANCE AND BANKING Personal Income, (Mil. $, Annual Rate) Farm Cash R e c e i p t s ............................ Department Store S a le s*/** . . . 2,839 140 105 PRODUCTION AND EMPLOYMENT PRODUCTION AND EMPLOYMENT Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. FINANCE AND BANKING FINANCE AND BANKING FLORIDA Bank Debits*/’ TENNESSEE INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) . . Farm Cash R e c e i p t s ....................................... Department Store S a l e s * * ............................ July 11,628 124 July Aug. 161 PRODUCTION AND EMPLOYMENT Nonfarm Em ploym ent....................................... M a n u fa c tu rin g ............................................ Nonmanufacturing....................................... C o n stru ctio n ............................................ Farm Em ploym ent............................................ Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. Aug. Aug. Aug. Aug. Aug. Aug. Aug. Aug. 118 123 117 90 108 3.0 41.2 162 118 123 117 91 110 3.0 41.2 160 117 119 117 93 127 3.3 40.8 157 116 121 115 92 107 4.2 41.0 155 Aug. Aug. Aug. 154 134 137 153 129 138 151 134 141 135 125 123 ll,2 7 7 r 83 157 ll,2 8 2 r 88 160 10,894 131 143 INCOME AND SPENDING Personal Income, (Mil. $, Annual Rate) Farm Cash R e c e i p t s ............................ Department Store S a le s*/** . . . 6,072 103 103 PRODUCTION AND EMPLOYMENT FINANCE AND BANKING Farm Em ploym ent............................................ Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. FINANCE AND BANKING •For Sixth District area only. Other totals for entire six states. **Daily average basis. Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes Personal Income, (Mil. $, Annual Rate) . . July Farm Cash R e c e i p t s .......................................July Department Store S a l e s * * ............................Aug. INCOME AND SPENDING INCOME AND SPENDING Member Bank L o a n s ....................................... Member Bank D e p o s i t s ................................. Bank D e b i t s * * .................................................. 7,646 135 122 One Year Ago MISSISSIPPI ALABAMA Insured Unemployment, (Percentof Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. Two Months Ago INCOME AND SPENDING July 40,568 July 122 July 122 July 120 Sept. 128p Aug. 124p FINANCE AND BANKING Member Bank Loans* All B a n k s ....................................................... Leading C i t i e s ............................................ Personal Income, (Mil. %, Annual Rate) One Month Aga Latest Month (1963) GEORGIA PRODUCTION AND EMPLOYMENT Nonfarm Em ploym ent....................................... M a n u fa ctu rin 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 . . . . Nonmanufacturing...................................... C o n stru c tio n ............................................ Farm Em ploym ent............................................ Insured Unemployment, (Percent of Cov. Emp.) Avg. Weekly Hrs. in Mfg., (Hrs.) . . . . Manufacturing P a y r o l l s ................................. Construction C o n t r a c t s * ................................. Residential .................................................. All O t h e r ....................................................... Electric Power P r o d u c t io n * * ...................... Cotton Consumption** ................................. Petrol. Prod, in Coastal La. and Miss.** 1 0 0 , u n le s s in d ic a t e d o t h e r w is e .) Bank Debits*/** p Preliminary. r Revised. payrolls and hours, and unemp., U. S. Dept, of Labor and cooperating state agencies; cotton prod., U. S. Bureau of Mines; elec. power prod., Fed. Power Comm.; farm cash receipts and calculated by this Bank. •7 • D I S T R I C B illio n s of D o lla rs A n n u a l R a te S e a s . Adj. Personal Income Nonfarm Employment Mfg. Employment Average Weekly Hours W o rk e d in M fg ft Construction j I AContracts \ T B U S I N E S S C O N D I T I O N S W d e s p r e o d strength continues to highlight the District's economy. Farm income, boosted by substantial crop and livestock m arketings, climbed higher. Although sales of new autom obiles slackened, retail spending, supported by higher departm ent store sales, advanced further. Gains in personal income have continued, and bank credit, sustained by stronger commercial and industrial loan dem and, is still expanding. Employment rem ained unchanged, w ith increases outside m anufacturing balancing a slight decline in some types of factory em ploym ent. \S Farm income pushed to a higher level, with both crop and livestock m arketings exceeding the usual seasonal gains. Excellent cotton and pea nut yields boosted incomes, especially in Alabama and Georgia. Louisiana’s rice crop, granted a last-minute reprieve from hurricane Cindy, also yielded well. A large burley tobacco crop has been harvested by Tennessee farmers, and soybean and corn output is sharply higher than last year in most of the District’s producing areas. Cattle forage has been ample, except on farms in Alabama and in parts of Louisiana and Mississippi. Hogs, broilers, and eggs have been moving to market at greater than seasonal rates in recent weeks, and prices received for important farm products have held relatively stable. U* IS Total retail spending, boosted by a rise in departm ent store sales, expanded further during August, but the month-to-month gain w as dampened som ew hat by few er new-car purchases. New automobile loans Electric Powei Production at District banks were lower than in July, and the volume of personal loans also declined. Banks thus encountered their first decline in outstanding con sumer debt since September of last year. Department store sales in August showed widespread gains, with most of the District’s cities sharing in the uptrend. Furniture store sales are still exhibiting some weakness. On the whole, however, consumer spending, as measured by District bank debits, showed con tinued gains through August. Personal income expanded sharply in July, with all District states sharing in the increase. Cumulative gains in District states through July continue to outstrip those of the nation, with Mississippi, Georgia, and Alabama leading in rate of gain. ^ Cotton Consumption District member banks continued to expand total bank credit in Septem ber. In spite of some weakening in volume of consumer lending, total bank loans at weekly reporting member banks expanded. Investments were somewhat reduced as a consequence of accommodating this stronger loan demand, and the level of excess reserves declined. Some shifting in investments also occurred, as these banks added to holdings of U. S. Governments maturing after five years and reduced their holdings of municipal securities. A substantial increase in deposits at leading member banks reflects primarily an increase in U. S. Government demand deposits. Time deposits increased, but at a noticeably lower rate than in most other months of this year. ^ Member Bank Loans Employment gains w ere m aintained but not further augmented in August. Adjustments to automobile model changeover and to reduced steel Member Bank Deposits _ P E R C E N T O F R E Q U IR E D R E S E R V E S 1961 1962 •Seas. adj. figure; not an index. 1963 output placed some downward pressure on total manufacturing employment, as did small declines in chemical and paper employment. Construction employ ment volume was also somewhat lower in all states except Alabama. Petroleum production remained steady, while cotton consumption receded from the un usually sharp increase registered in July. In spite of these crosscurrents, insured unemployment did not rise and total manufacturing payrolls increased, as longer workweeks offset small declines in total employment. Preliminary data for September indicate a strong employment recovery in auto assemblies, and highlevel construction contracts in August imply an early pickup in construction employment. N o t e : D ata o n w h ic h s ta te m e n ts a re b a s e d h a v e b e e n a d ju ste d t o e lim in a t e s e a s o n a l in flu e n c e s.
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