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Atlanta, Georgia September • 1960 Also in this issue: SEASONAL ADJUSTMENT SIXTH DISTRICT BUSINESS HIGHLIGHTS SIXTH DISTRICT STATISTICS SIXTH DISTRICT INDEXES Consumption, Saving, and Southern Economic Growth How well it satisfies the wants of consumers is the final test of the success of any economic system. Factories, farms, transportation facili ties, mines, and all other parts of the productive apparatus are merely means to an end. If this is so, the success of economic growth in the South can be determined by ascertaining how much better consumer wants are satisfied now than they were before the growth. By this test, the economy of the Sixth Federal Reserve District was doing a much better job of satisfying the wants of consumers at the end of the 1 9 5 0 ’s than at the beginning. Data used as the basis for this judgment cover those states that lie wholly or partly in the Sixth District—Alabama, Florida, Georgia, Louisiana, Mississippi, and Ten nessee. On a per capita basis, consumers in District states were spending $35 7 more at retail stores in 1959 than they were ten years earlier. Even though those dollars bought less in 1959, the rise in real terms was substantial— $ 2 1 4 measured in constant dollars of 1959 purchasing power. For the average family, this meant $ 7 0 6 of addi tional purchases at the retail level, about a fourth more than in 1950. Along with this increase in goods buying were similar ones in pur chases of services and housing and in other consumption expenditures. Per capita expenditures at service establishments, for example, were $ 5 6 greater in dollars of 1959 purchasing power in 1958 than in 1948. Per Capita Income and Retail Sales S ix th D istrict S ta te s, 1948-59 l-70° r ------- 1-------- 1-------- 1-------- 1-------- 1-------- 1-------- 1-------- 1-------- 1-------- 1-------- 1-------1 1-700 1959 Dollars Sfetferaf B u ff jS fa n ta 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 Incom e gro w th in D istrict sta te s d u ring the 1950's w a s accom p an ied by g ro w th in co nsum er b uyin g a t r e ta il sto res. Becau se re ta il s a le s in crea se d a t a g r e a te r ra te in th is D istrict than in the U nited S ta tes, p er ca p ita r e ta il s a le s in the D istrict d re w clo ser to the U nited S tates a v e ra g e , risin g from 73 p ercen t in 1948 to an e stim a ted 86 p ercen t in 1959. An improvement in the level of living, as measured by additional goods and services consumed, characterized the whole American economy during the 1 9 5 0 ’s. What distinguishes the improvement in the Southeast is that it was greater, measured either by percentage rate of in crease or by actual dollar expenditures. Per capita retail sales, in dollars of constant purchasing power, increased 2 6 percent in District states from 195 0 to 1959; per capita sales throughout the United States increased 6 percent. The increase in per capita sales, measured in dollars of constant purchasing power, in the same period in the District was much greater than the figure of $ 66 for the nation. Clearly, the South, if the Sixth District is typical, was one of the most rapidly growing markets for consumer goods in the country. There are two basic reasons for this “explosion” in spending. The first is that income grew at a rapid rate in the South, which has been discussed in earlier issues of this year’s Review. The second was that Southern con sumers went out and spent more of their additional in come than consumers elsewhere. For each dollar increase in per capita income in District states between 1950 and 1959, per capita retail sales increased 62 cents; for each dollar increase in United States per capita income, per capita retail sales increased 41 cents. Propensity to Consume Economists have coined the term “propensity to con sume” to describe the way consumers tend to divide their incomes between spending and saving. They use “marginal propensity to consume” to describe the way consumers spend additions to their income. On the basis of these definitions and our spending and savings data, the average consumer in the District had a higher marginal propensity to consume during the 1 9 5 0 ’s than other American con sumers. This tendency varies from state to state, accord ing to data for 1948 and 1958, years for which state data on sales are available. The other side of the picture, of course, is the mar ginal propensity to save. This, we would expect from what we have learned about spending, to be lower in the South than throughout the nation, and available savings data support this conclusion. We get a fairly good picture of the changes in total savings by looking at changes in certain forms of long term savings— time deposits at commercial banks, savings and loan shares, life insurance equities, United States savings bonds, and postal savings deposits. The total of these long-term savings, on a per capita basis, increased in District states from $ 5 4 9 in 195 0 to $97 8 in 1959. The dollar increase for District states of $ 4 2 9 , as we would expect, was lower than the national one of $513. Were measures of other types of savings available, they would probably show similar relationships. Why did Southerners spend such a large share of their increased income? Economists and other scholars have devoted years of concentrated effort trying to answer that question as it applies to consumers in general. They have found that like answers to other economic questions, the answer is extremely complex. In general, however, they Retail Sales and Savings as Percent of Income D istrict S ta te s a n d U n ited S ta te s, 1948 a n d 1958 40 Retail Sales, Percent of Income (Per Capita) 50 60 70 40 Savings, Percept of Income (Per Capita) 50 60 70 80 C o n su m er sp en d in g in D istrict s ta te s , a s in m ost p a rts of th e Sou th, te n d s to b e h ig h e r in re la tio n to in com e th a n e ls e w h e r e in th e n a tio n , an d sa v in g s in re la tio n to incom e a r e lo w e r. As in com e in th e D istrict h a s in c re a se d , h o w e v e r , th e ra tio of sp en d in g to incom e h a s d e clin e d , a n d the ra tio of sa v in g s to incom e h a s in cre a se d . conclude that “other things being equal” the lower the income, the greater the proportion of the income spent and the smaller the proportion saved. It follows that a larger share of added income will be spent by those with lower incomes than by those with higher incomes. At the beginning of the 1 9 5 0 ’s, per capita personal income in the District was much higher than it had been during preceding years, but it was still only 67 percent of the national average. True to the theory, spending in 1950, as measured by per capita retail sales, was higher in relation to per capita income than in the nation, 68 percent compared with about 6 4 percent. Yet, we cannot explain the state-to-state differences in spending rates solely by differences in income. These differences are also explained by such factors as average family size, age dis tribution, proportion of urban or rural population and so on, all of which influence consumer spending habits. In general, the changes in these factors that accom panied economic growth in the 1 9 5 0 ’s were the kinds that encouraged spending. Among these was the shift from the farm to the city. As a rule, persons living in urban areas tend to spend more of their incomes for consumer goods than those living on farms. Thus, since the number of persons living in metropolitan areas in the District in creased from 39 percent of total proportion in 195 0 to 47 percent in 1960, there was a continued stimulus to a higher rate of spending from the greater urbanization. Another change was the out-migration from the South, which left the area with a higher proportion of its popula tion in the non-productive age groups, the young and the old, than was true of the United States. Spending in relation to income is generally high when an area’s popu lation is heavily concentrated in these age groups. Since the number of persons less than 21 years of age and over 65 increased from 48 percent of the area’s total popula tion in 195 0 to 51 percent in 1958, some stimulus to spending may have come from this development. •2 • A Rapidly Expanding Consumer M arket Reasons for the higher propensity to consume in this part of the South could be explored further. The important thing for businessmen, who are seldom interested in finely spun theories, however, was the rising demands for goods and services. These demands created a better market. To meet these new demands, retail establishments added more workers; some of them refurbished and enlarged their stores. National chains, always on the lookout for new opportunities to sell, opened outlets in the area; sales managers of firms with nationwide distribution, after see ing rising sales curves for their Southern territories, found it worthwhile to establish distribution centers and area offices and to send experienced personnel from other parts of the country into the South. Some manufacturers, who had formerly met the demands for their products exclu sively from factories outside the South, opened branch plants to supply the Southern market. Bankers found the new high incomes of Southern consumers a sound basis for increased consumer credit. So intertwined is our distribution system with other types of economic activity that it is impossible to measure exactly the impact of increased consumer spending upon the structure of the area’s economy. The number of per sons employed in retail and wholesale establishments is about the best measure available. Between 195 0 and 1959, some 2 3 7 ,0 0 0 workers were added to the payrolls of retail stores and wholesalers in District states. Service employment increased 9 9 ,0 0 0 . For the entire District, the increase in trade employment was far greater than that in factory employment. Wage and salary income from trade in the six states in 1959, making up 19 percent of total wage and salary payments, was $2 billion greater than it was in 1950. These figures are inflated to some extent by the tre mendous growth in Florida, where satisfying the needs of tourists is such an important activity. Nevertheless, the growth of employment in trade was greater than in manu facturing in each District state except Mississippi and Tennessee; in these two states the gain in trade employ ment was not far behind that in manufacturing. Thus, the growing consumer market has been a strong induce ment on willingness to invest in manufacturing plants, although it cannot be measured statistically. Stimulus or Drag to Economic Growth? Not everyone has been happy about this upsurge of spend ing and the tendency of Southerners to spend rather than to save out of their larger incomes. Some economists, as well as others interested in economic development in the South, have wondered if this high rate of spending has hampered income growth. Consumption, they argue, is the result and not the cause of income growth. The growth in trade employment, they point out, merely paralleled the income growth; it did not cause it. Income, they say, can grow in the South only if the South’s economy be comes more productive and if higher productivity results largely from more capital investment. Investment must be financed out of savings, they argue, and in the final analysis savings consist of spending for investments rather than for consumption. If Southerners insist on spending Retail Sales and Trade Employment D istrict S ta te s an d U n ited S ta te s P e rce n t In c re a se , 1948-58 Percent Increase, 1958 from 1948 40_______ 60_______80 United States Retail Sales* ’Trade Employment Sixth District States Florida Georgia Louisiana Mississippi Tennessee *1959 Dollars The g ro w th in em p lo y m e n t a t w h o le sa le an d r e t a il tra d e e s ta b lish m e n ts in the D istrict acco m p an ie d th e g ro w th in b u yin g a t r e t a il sto res. so much, Where are the investment funds to come from? they ask. Anyone taking the trouble can show, for example, that if the increase in per capita long-term savings in the Dis trict between 195 0 and 1959 had borne the same relation to the increase in per capita income there that it did in the United States, per capita savings in the District in 1959 would have been $1,0 2 5 instead of $ 9 7 8 . Would this have meant more capital available for investment and hence greater income growth? Were the South a separate country with legal and other barriers preventing access to capital investment funds from other areas, as is sometimes the case in underdevel oped areas in many other parts of the world, it would be easy to see that Southerners’ high propensity to con sume had hampered economic growth. But the South is not a separate country; it is part of a nation where invest ment funds are free to flow to wherever economic oppor tunity beckons. Fortunately for its economic growth, the South did not have to rely entirely upon resources made available by its own savers. The substantial flow of investment funds into the area has been described from time to time in this Review (See Readings in Southern Finance No. 1, Sources and Uses of Investment Funds in the Southeast). Yet some types of enterprises, such as those started and carried on by small businessmen, do not always have easy access to funds outside the South, and it is possible that the con tribution to income growth from expansion in these types of businesses may have been limited by inadequate local savings. The inducement to make investments to satisfy a growing consumer market in the area, however, may have compensated for this by attracting investment funds into the area. Certainly the record shows a tremendous expan sion of capital investment in the Southeast despite the high rate of consumption. Even if consumers in the area had spent less and saved more, local savings would have been inadequate to finance the investment that occurred. •3 • Future Income, Spending, and Saving The tremendous upsurge in consumer spending during the 1 9 5 0 ’s has been explained by the high rate of income growth and the propensity of Sixth District consumers to spend a substantial share of their increased incomes. Thus, the future trend of spending in this part of the Southeast depends upon answers to two questions: Will income con tinue to grow? Will Southerners continue to spend a larger share of this increased income than consumers elsewhere? Earlier articles in this series on income growth have indicated that the future of the Southern economy is tied closely to that of the nation. If we assume that this na tion’s economic growth will continue, we may also con clude, on the basis of experience, that the South will con tinue to increase its share of expanding income. Under these conditions, consumer spending will continue to grow somewhat more rapidly in this area than elsewhere. As incomes increase, however, and the average income in the South more closely approaches that in the nation, the strength of factors that brought about a tendency for Southerners to spend more of their incomes tends to diminish. As his income has increased, the Southern con sumer has become more like the average American con sumer. He saves more and spends less. Indeed, this has been going on ever since the South began to catch up in income. Nevertheless, an elimination of the still existing differential between the District and the United States in the immediate future seems unlikely. In 1959, per capita retail sales in the District were still 65 percent of per capita income, compared with 57 percent for the United States. The 1 9 6 0 ’s, therefore, are likely to see the South con tinue as one of the nation’s most rapidly growing con sumer markets in relation to income growth. The pace of activity, in terms of rates of growth, may be a little slower than it has in the past because Southerners may be ex pected to more nearly approach the savings habits of the nation. If a shortage of local savings has indeed ham pered economic growth, the growth in savings accom panying income expansion may help solve the problem. In the 1 9 6 0 ’s, the South will probably continue to be a very attractive market for consumer goods, but it will also offer an improved opportunity for savings institutions to attract a greater part of Southerners’ income. In any event, the Southern consumer should be better off. C h a r l e s T . T ay lor Seasonal Adjustment An Aid to Economic Understanding Scattered throughout the Monthly Review, frequently making up a part of the labeling for the charts, you will see statistical series described as “seasonally adjusted.” Sometimes, to vary the reference, economists and statisti cians speak of changes “after allowance for seasonal variations,” or “after adjustment for seasonal influences.” Whatever the form of expression, it is clear that some thing has been done to the basic data. To those unfamiliar with the terms, however, it may not be clear just what has been done and why and how. The sceptic might con sider seasonal adjustment a deliberate effort to confuse the interpretation of economic developments. In reality, however, it is an effort to clarify them. What The accompanying chart showing changes in department store sales is used here to illustrate what we mean by “seasonal adjustment.” The line portraying changes in the actual dollar volume of department store sales before ad justment reveals what every shopper knows from her own experience with the changing size of shopping crowds: The department store business typically booms with the approach of Easter in either March or April and really zooms with the approach of Christmas. These changes, because they repeat themselves in more or less the same pattern every twelve months, are called seasonal varia tions. The adjusted line in the chart differs from the unad justed in that these seasonal variations have been removed. In other words, the figures have been “seasonally adjusted.” Swings in consumer demand associated with holidays explain the major seasonal changes in department store sales, but department store owners will tell you that changes in the weather also have a strong influence on the demand for their goods. This is particularly true of specific items such as air conditioners and refrigerators, which sell in largest volume during warm weather. Most types of business activity experience similar swings in demand associated with calendar dates and the weather. In the automobile industry, for example, such swings are related to good driving weather and to the introduction of new models each autumn. Similarly, the advent of cold weather brings an increase in the demand for fuels. Seasonal variations in the supply of goods are also important in many types of business activity. A good example of this is the seasonal increase in farm income associated with the harvesting of crops. Seasonal changes are important not only in agriculture but also in other outdoor activities such as construction work. W hy Although the term “seasonal adjustment” may have seemed confusing, you now undoubtedly recognize sea sonal variations as a phenomenon with which you have been familiar in many phases of your everyday life. You will also recognize that you have made allowances for, or adjustments to, these seasonal variations in planning activities that might be affected by them. The shopper knows when to expect crowds in department stores and so plans to either avoid them or brave them. Your own •4 • experience, therefore, gives a clue to one reason why seasonal variations in economic series are studied— so that they may be identified and taken into account for planning purposes. The chart of department store sales suggests that a major task of a department store manager is to plan for seasonal swings in the volume of his business, building up inventories of goods in anticipation of periods of high sales activity and providing for adequate sales personnel. Businessmen in other lines of activity study seasonal variations in order to improve efficiency or possibly to smooth out seasonal swings by diversifying their opera tions. Government officials, too, must plan for seasonal swings of various kinds. Postal officials, for example, anticipate the inevitable rush to mail gifts as Christmas approaches. The difficulties they face at this season are responsible for the constant urging to shop and mail early, which advice would undoubtedly ease the last minute rush if it were followed. Seasonal movements, then, are frequently important in and of themselves. In many cases, however, a more important reason for studying seasonal movements is the desirability of elimi nating their influence on statistical series. While business and government officials must plan for seasonal ups and downs in activity, it is frequently important to focus atten tion on more fundamental changes taking place in a particular business or in the economy as a whole. For the man looking to the needs of his business five or ten years hence, the question becomes, “What has been the long-run trend in my firm’s operations?” To the man whose business is subject to alternating periods of high and low activity during a period spanning several years, the question is, “In what direction has my business been heading over the last few months?” To the Federal Reserve authorities, responsible as they are for setting monetary and credit policies appropriate to the economic environment, it is a matter of extreme importance to dis cern as quickly as possible fundamental changes in busi ness activity. Frequently, however, they are obscured by seasonal movements. The identification of seasonal move ments is therefore essential so that they may be eliminated and thus allow the more fundamental changes to be more clearly discerned. Seasonal Adjustment of Department Store Sales S ix th D istrict, 1955-59 This problem, too, is illustrated by the chart. The predominant movement in department store sales, shown by the unadjusted line, is the wide variation from the Jan uary low to the December peak of each year. It is only after these seasonal swings have been eliminated that we can see more clearly the underlying trends of sales. We see, for example, the effects on department store sales of the general business recession in late 1957 and early 1958 and of the subsequent recovery. We also see more clearly the long-run upward trend of department store sales. When studying seasonal variations for their own sakes or when seeking to eliminate them and so to uncover more fundamental changes, businessmen, economists, and government officials are really searching for causes of fluctuations in business activity in order to improve the decision-making process. How Realizing that seasonal variations can be thought of sim ply as the typical manner in which an economic series fluctuates each year, you may have anticipated that the adjustment is made by finding the average pattern and eliminating it. In principle, the procedure is just that sim ple. Difficulties usually arise, however, in determining the average behavior, because seasonal changes are but one of several broad types of change affecting economic data. They are generally superimposed upon a long-run up ward or downward trend and are complicated by alternat ing periods of prosperity and recession, as well as by irregular fluctuations. Much study, therefore, was needed to develop methods designed to isolate seasonal move ments from these other types of changes. Various methods are used to seasonally adjust statisti cal data, ranging from those giving only rough approxi mations to those yielding more refined results. Some averaging procedure is usually used. The more refined methods involve a large number of tedious calculations to obtain first approximations of desired results, followed by repetitions of the procedure and careful reviews of the re sults to obtain the desired answers. The details involved in these methods need not concern us here. Suffice it to say that the process yields a figure for each month, which, divided into the observed data, eliminates the seasonal movement and so gives the more fundamental changes that are of greater concern. For the charted series on de-* partment store sales, this has meant lowering the observed figures for November and December and raising those for other months. Like most other phenomena in a dynamic economy, seasonal patterns change from time to time. The increased use of air conditioning in recent years, for example, has helped to smooth the seasonal fluctuations in the sales of electricity. Seasonal adjustment factors must therefore be reviewed periodically to detect any changes in the sea sonal patterns. Fortunately for those who must seasonally adjust sta tistical series and review them periodically, methods have been adapted for processing by electronic com puters, which eliminates the necessity for many tedious manual calculations. With the possibility of this type of statistical analysis thus greatly broadened, the term “sea sonal adjustment” is bound to be encountered more and more frequently. P h i l i p M. W e b s t e r •5 • Statistics on Commercial Banks Debits to Individual Demand Deposit Accounts (In Thousands of Dollars) Sixth District, 1950-59 A compilation of monthly, quarterly, and semi annual data for commercial banks on loans, deposits, and investments, classified by states, and by reserve city and country banks for the years 1950-59 may be obtained from the Re search Department of this Bank upon request. Percent Change 7 Months July 1960 from 1960 from June July 1959 1960 1959 July I960 June 1960 July 1959 42,305 826,752 33,104 35,979 279,471 59,015 149,997 21,994 52,034 1,500,651 697,297 42,279 838,242 34,315 37,700 308,479 62,516 161,180 25,425 52,534 1,562,670 740,545 45,728 875,180 32,280 40,183 283,841 61,418 172,451 23,636 54,592 1,589,309 740,607 +0 —1 —4 —5 —9 —6 —7 — 14 —1 59,630 187,810 43,462 783,739 14,300 71,392 833,401 1,236,037 237,163 84,322 211,036 384,284 117,589 3,430,764 1,609,869 57,815 203,602 43,819 885,307 16,145 80,309 897,275 1,314,965 262,923 92,131 210,931 435,222 133,273 3,736,442 1,701,670 50,955 40,651 2,018,820 109,182 24,713 103,255 10,698 50,262 17,377 21,198 119,024 32,694 18,961 47,813 191,308 34,121 2,891,032 975,894 LOUISIANA Alexandria* . . . Baton Rouge . . Lafayette* . . . Lake Charles . . New Orleans . . . Total Reporting Cities Other Citiesf . . . August 15: The Bank of Georgia, Atlanta, Georgia. Officers are Joseph Earle Birnie, President; Rowland A . Radford, Senior Vice President and Cashier; R. W. Schilling, Senior Vice President; R oy Collier, Jr., James H. Dickson, Jr., Hugh W. Haynes, Charles B. Turner, Vice Presidents; James C. Hughes, L. D. Jolley, Jr., Assistant Vice Presidents; J. Herbert Bolton, Robert E. Campbell, Charles M. Reagin, Richard E. Sterne, A s sistant Cashiers; and A. M. Stewart, Auditor. Capital stock totals $1,000,000 and surplus and other capital funds exceed $1,650,000. August 19: The Commercial National Bank of Pensa cola, Pensacola, Florida. This was formerly the Indus trial & Savings Bank of Pensacola. Officers are W. A. Leonard, Chairman of the Board and President; Jack McCormack, Vice President; Volney K. Day, Vice President and Cashier; and Robert L. Sanders, Jr., A s sistant Cashier. Capital stock totals $400,000 and sur plus and other capital funds total $268,000. Bank Announcements On August 1, the University City Bank, Gainesville, Florida, a nonmember bank, formerly operated as the Industrial Savings Bank of Gainesville, began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers are John E. Pierson, President; Gerald Green, Executive Vice President; F. A. Canova, W. H. Chandler, P. A . Johnson, Vice Presidents; and Charles D. Mier, Cashier. Capital totals $150,000 and surplus and undivided profits $150,000. The Federal Reserve Bank of Atlanta is pleased to wel come the following four banks to membership in the Federal Reserve System: August 10: The Granite City Bank, Elberton, Georgia. Officers are A. D. Wilburn, President; Frank S. Fortson, Vice President; James M. Cleveland, Vice Presi dent and Cashier; Mrs. Dorothy M. Gaines and Thompson Holloman, Assistant Cashiers. Capital totals $150,000 and surplus and other capital funds total $244,000. August 15: The National Bank of Albany, Albany, Georgia. J. W. Toney is Chairman of the Board; E. C. Lancaster, President; Hal B. Brimberry, Vice President, and W. W. Jordan, Vice President and Cashier. Cap ital stock totals $500,000 and surplus and other capital funds total $250,000. This is a new bank. ALABAMA Anniston . . . . Birmingham . . . Dothan . . . . Gadsden . . . . Mobile . . . . Huntsville* . . . Montgomery . . . Selma* . . . . Tuscaloosa* . . . Total Reporting Cities Other Citiesf . . . —6 —7 —6 +3 —10 —2 —4 — 13 —7 —5 —6 —6 +2 +1 +7 —2 +4 —2 —2 +6 +6 +1 +3 67,198 211,851 39,682 800,767 16,211 76,154 906,210 1,355,280 256,297 98,451 245,894 428,901 134,967 3,731,653 1,690,469 +3 —8 —1 — 11 —11 — 11 —7 —6 — 10 —8 +0 — 12 — 12 —8 —5 — 11 — 11 + 10 —2 — 12 —6 —8 —9 —7 — 14 — 14 — 10 — 13 —8 —5 —3 +3 +11 +5 —3 +6 +3 +1 +6 +1 —1 +2 —3 +2 +6 51,501 41,382 2,152,688 109,344 23,508 105,617 10,260 50,548 20,072 19,031 122,952 32 652 19,894 48,683 206,731 33,901 3,048,764 984,042 53,844 40,730 2,052,331 109,678 24,616 109,155 9,073 49,898 18,855 20,818 124,417 31,746 18,732 45,640 206,954 41,464 2,957,951 943,632 —1 —2 —6 —0 +5 —2 +4 —1 — 13 + 11 —3 +0 —5 —2 —7 +1 —5 —1 —5 —0 —2 —0 +0 —5 + 18 +1 —8 +2 —4 +3 +1 +5 —8 — 18 —2 +3 +8 +6 +6 +6 +3 +3 +9 —3 +3 —3 +2 +4 + 14 + 13 —1 —1 +5 +9 71,566 265,618 59,733 75,331 1,307,356 1,779,604 597,075 75,879 273,117 61,015 78,510 1,399,825 1,888,346 617,277 74,671 274,908 67,883 88,379 1,391,667 1,897,508 604,520 —6 —3 —2 —4 —7 —6 —3 —4 —3 —12 — 15 —6 —6 —1 +1 +4 —4 —9 +3 +2 +2 MISSISSIPPI Biloxi-Gulfport* . Hattiesburg . . . Jackson . . . . Laurel* . . . . Meridian* . . . Natchez* . . . . Vicksburg . . . Total Reporting Cities Other Citiesf . . . 49,978 38,876 323,673 26,393 42,067 21,820 19,306 522,113 265,576 50,599 38 388 286,680 27,900 44,951 22,575 20,311 491,404 278,524 51,563 38,537 295,947 28,796 46,286 22,831 19,946 503,906 280,121 —1 +1 +13 —5 —6 —3 —5 +6 —5 —3 +1 +9 —8 —9 —4 —3 +4 —5 +3 +6 +4 +6 —1 +3 +4 +4 +5 TENNESSEE Bristol* . . . . Chattanooga . . . Johnson City* . . Kingsport* . . . Knoxville . . . . Nashville . . . . 46,632 304,902 43,225 86,911 238,413 706,915 48,113 345,699 44,817 84,848 248,799 723,820 46,159 362,906 43,553 89,649 246,300 717,699 —3 —12 —4 +2 +1 —16 —1 —3 —3 —2 +2 +0 +4 +5 +4 +1 Total Reporting Cities Other Cities . . . SIXTH DISTRICT Reporting Cities . Other Citiesf . . 1,426,998 593,176 16,290,049 11,551,162 4,738,887 1,496,096 579,467 17,125,247 12,223,722 4,901,525 1,506,266 588,126 17,034,068 12,186,593 4,847,475 —5 +2 —5 —6 —3 —5 +1 —5 —2 +2 +4 +3 +3 +5 9,905,047 10,502,480 10,419,022 Total, 32 Cities . . UNITED STATES 344 Cities . . . 223,608,000 250,837,000 235,637,000 —6 —5 +3 —7 —1 +6 FLORIDA Daytona Beach* Fort Lauderdale* . Gainesville* . . . Jacksonville . . . Key West* . . . Lakeland* . . . Greater Miami* Orlando . . . . Pensacola . . . St. Petersburg . . W. Palm-Palm Bch* Total Reporting Cities Other Citiesf . . . GEORGIA Albany . . . . Athens* . . . . Atlanta . . . . Augusta . . . . Brunswick . . . . Columbus . . . Elberton . . . . Gainesville* . . . Griffin* . . . LaGrange* . . . Macon....................... Marietta* . . . Newnan . . . . Rome* . . . . Savannah . . . . Valdosta . . . . Total Reporting Cities Other Citiesf . . . —2 —4, *Not included in total for 32 cities that are part of the national bank debit series. tEstimated. •6 • Sixth District Indexes Seasonally Adjusted (1947-49 — 100) 1959 SIXTH DISTRICT | i% o JUNE JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY Nonfarm Employment.................................. 141 Manufacturing Employment . . . . 125 A p p a re l................................................... 187 C h e m ic a ls..............................................134 Fabricated Metals .............................192 F o o d ............................. . . . . 114 Lbr., Wood Prod., Fur. & Fix. . . 81 Paper & Allied Products . . . . 164 Primary M e t a l s .................................. 104 T e x tile s ................................................... ..89 Transportation Equipment . . . . 210 Nonmanufacturing Employment . . . 148 Manufacturing Payrolls......................................223 Cotton Consumption**.................................. 90r Electric Power Production**....................... ...357 Petrol. Prod, in Coastal Louisiana & M ississippi**.........................200 Construction C o n tra c ts * .............................411 Residential................................................... ..433 All O t h e r ................................................... ..393 Farm Cash Receipts........................................136r Crops...............................................................l l l r Livestock ................................................... 188r Department Store S a le s * / * * .......................180 Department Store Stocks*................................204 Furniture Store S a l e s * / * * .......................148 Member Bank D e p o s its * ................................183 Member Bank L o a n s * ......................................321 Bank D e b its*................................................... ...279 Turnover of Demand Deposits* . . . . 152 In Leading C itie s ........................................174 Outside Leading C i t i e s .............................117 ALABAMA Nonfarm Em ploym ent.............................125 Manufacturing Employment . . . . 109 Manufacturing Payrolls ..........................200 Department Store S ale s.............................163r Furniture Store S a l e s .............................134 Member Bank Deposits.............................159r Member Bank L o a n s.................................. ..266 Farm Cash R eceip ts.................................. 119r Bank Debits ................................................248 FLORIDA Nonfarm Em ploym ent................................196 Manufacturing Employment . . . . 202 Manufacturing Payrolls ..........................358 Department Store Sales................................245 Furniture Store S a l e s .............................175 Member Bank Deposits...............................243 Member Bank Lo a n s.................................. ..534 Farm Cash R eceip ts.................................. ..238r Bank Debits ................................................426 GEORGIA Nonfarm Em ploym ent.............................134 Manufacturing Employment . . . . 122 Manufacturing Payrolls ..........................220 Department Store Sales.............................166 Furniture Store S a l e s .............................139 Member Bank Deposits.............................159 Member Bank Lo a n s.................................. ..250 Farm Cash R eceip ts.................................. 134r Bank Debits .................................................252 LOUISIANA Nonfarm Em ploym ent.............................130 Manufacturing Employment . . . . 96 Manufacturing Payrolls .......................174 Department Store Sales................................162 Furniture Store S a le s * .............................177 Member Bank Deposits* .......................165 Member Bank L o a n s * ............................ ...295 Farm Cash Receipts.................................. 128r Bank D e b its * ............................................. ...244 MISSISSIPPI Nonfarm Em ploym ent............................ 133 Manufacturing Employment . . . . 132 Manufacturing Payrolls ..........................246 Department Store Sales............................ 178 Furniture Store S a le s * .............................132 Member Bank Deposits* .......................195 Member Bank L o a n s * ............................ ...398 Farm Cash R eceip ts..................................98r Bank D e b its * ............................................. ..246 TENNESSEE Nonfarm Em ploym ent............................ 125 Manufacturing Employment . . . . 123 Manufacturing Payrolls .......................211 Department Store Sales............................ 157 Furniture Store S a le s * .............................116 Member Bank Deposits* .......................164 Member Bank L o a n s * ............................ ...283 Farm Cash Receipts.................................. lO lr Bank D e b its * .................................................241 142 126 191 134 191 114 81 166 104 89 216 149 228 110 359 141 123 190 135 184 113 81 164 79 88 215 149 220 94 359 141 122 190 131 186 114 80 166 79 89 214 149 216 93 351 142 122 190 130 182 115 81 164 79 88 221 150 214 93 350 142 123 189 130 183 116 80 161 97 87 195 150 215 91 346 142 123 191 132 185 113 80 160 103 87 199 149 220 91 345 142 124 192 132 191 117 8P 16% 101 87 209 150 222 95 358 142 124 190 133 193 117 80 165 100 87 208 150 218 95 375 142 125 191 132 190 115 79 164 95 88 206 149 214 94 387 143 125 194 135 188 116 79 166 98 87 210 151 223 95 363 143 126 195 135 192 117 79 167 99 87 211 150 227 94 366 143 125 195 136r 194 116 79r 165 99r 87 206 150 230r 93 375 143 125 196 135 194 116 78 166 97 88 200 150 234 93 n.a. 195 416 425 410 142 122r 188r 185 214r 158 180r 329 283 162 179 124 203 440 444 436 123 95 r 179 184 219 161 183 330 259 154 174 115 207 380 440 331 153r 140r 187r 186 222 149 183 331 281 150 164 118 215 350 441 276 160r 149r 179r 188 225 158 182 331 271 147 153 109 214 302 373 245 142r 120r 185r 189 223 163 184 332r 270 150 160 109 231 302 367 249 133r 99r 184r 185 225 151 181 335 286 154 166 121 227 328 351 309 124r 93r 169r 180 225 166 182 337 275 154 166 119 226 345 366 327 124r 96r 176r 175 223 143 181r 340 294 156 168 120 228 333 360 311 121 95 r 179 162 225 129 180 344r 288 153 167 119 224 333 356 315 126 100 188 192 223 149 178 347 278 148 167 114 222r 351 384 325 132 111 185 176 223 145 180 350r 277 163 181 126 224 372 387 360 132 98 192 183r 227r 142 181r 351 288 159 183 119 227 n.a. n.a. n.a. n.a. 194p 223p 147 181 354 271 162 179 129 126 111 204 168r 139 160 275 122r 248 122 103 179 177 143 160 269 121r 221 122 102 172 167 139 160 270 154r 243 122 100 173 172 138 159 272 159r 236 125 107 188 162 134 159 272r 112r 224 125 108 194 163 128 158 273r 112r 247 126 108 198 165 148 159 279 113r 236 125 107 192 158 133 158 283 122r 245 124 106 190 156 112 160r 284r 125r 244 125 108 195 176 127 157r 296 122 240 126 109 198 162 128 159 300 131 240 126 109r 201r 171 r 127r 160r 292 123 245 126 109 201 178 124 162 299 n.a. 234 200 206 372 249r 178 239r 544 239r 429 200 206 378 263 212 246 548 210r 395 200 206 377 252 177 247 550 248r 437 200 206 377 248 180 245 546r 202r 422 199 203 371 264 203 245 547 190r 414 197 201 374 257 195 241 548r 201r 424 197 204 366 250 189 242 546 231 r 391 197 204 364 240 174 237 550r 206r 423 197 202 352 245 157 234 546r 171 r 410 199 205 372 274 181 230 553 217 387 201 209 389 260 175 235r 554 225 404 202 211 392 264 167 238 559 187r 443 204 213 406 277 167 239 563 n.a. 399 136 124 225 172 159 157 256 159r 261 135 122 221 170 163 162 260 133 239 136 123 213 170 144 160 259r 151r 258 136 123 216 175 159 160 261 155r 249 136 120 208 176 157 163 266 134r 244 136 121 210 172 150 158 267r 153r 261 137 122 216 172 149 161 269 130r 254 136 122 211 164 127 161r 271 134r 265 135 122 205 156 120 158 268r 146 254 138 122 215 170 142 157 271 153 254 137 122 223 169 132 161 275r 144 257 136 122 221 164 135r 160 277 150 269 135 121 227 175 135 157 278 n.a. 258 130 95 175 156r 193 160 302 107r 236 129 94 175 160 178 160 299 95 r 227 130 94 175 153 193 160 304 117r 252 130 95 167 154 171 157 307 123r 229 130 94 168 158 195 160 309 127r 216 130 93 168 155 184 158 311 112r 238 131 94 173 155 188 161r 312r 90r 207 131 95 173 150 192 159 316 90r 224 130 95 176 147 172 160r 335 94 r 244 131 95 179 156 176 163r 332r 89 233 131 95 178 152 175 161 338 101 233 130 95 178r 161 184r 161 333 119 253 130 95 178 159 203 160 334 n.a. 225 134 133 250 176 115 197 402r 108r 240 133 133 250 171 129 194 402r llO r 230 135 134 251 161 95 195 411 134r 242 135 134 239 172 83 202 392 147r 234 136 134 242 160 117 204 392 145r 237 135 135 244 169 133 208 403 128r 252 138 135 253 161 106 200 414 92r 226 137 134 247 154 99 202r 422r 91 r 244 136 133 254 155 94 205r 418 115r 246 137 134 249 169 100 199 422 101 236 137 135 244 154 113 198 433 105 222 136r 134 256r 175 107 195 438 97 r 243 136 133 253 175 113 196 449 n.a. 241 125 124 216 165 105 165 288r 112r 244 124 123 220 155 122 165 287 lllr 226 124 123 215 158 109 166 288 124r 233 124 122 212 161 108 167 292r 135r 228 124 123 212 164 102 167 292r 119r 237 124 123 214 157 109 164 296 116r 232 124 124 219 154 104 166 296 88r 235 124 123 219 145 95 161 300r 90 r 252 123 123 208 137 98 161 303 86r 242 126 124 225 159 103 163 304 100 236 125 124 223 146 111 165 310 95 247 125 124r 223r 155r 107r 167 313 102 245 125 125 226 167p 93 169 316 n.a. 236 *For Sixth District area only. Other totals for entire six states. n.a. Not Available. p Preliminary. JUNE JULY n.a. n.a. r Revised. * * Daily average basis. Sources: Nonfarm and mfg. emp. and payrolls, state depts. of labor; cotton consumption, U. S. Bureau Census; construction contracts, F. W. Dcdge Corp.; petrol, prod., U. S. Bureau of Mines; elec. power prod., Fed. Power Comm. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. •7 • S IX T H D IS T R IC T Nonfarm Employment Mfg. Employment Nonfarm em ploym ent continued unchanged in July, after allowance for seasonal variation. Although stability was the rule, Florida, with a further slight rise, and Georgia, with a further slight decline, provided exceptions. Manufacturing em ploym ent remained the same, reflecting small offsetting movements among major types of activity. Payrolls, seasonally adjusted, rose to a new record, however, because of a gain in average weekly earnings. E le c tric Power Production r Construction Contracts Construction contracts rose further in June after seasonal adjustment, as indicated by the latest three-month average of data through July. Construction employment increased slightly in July. Cotton consumption, a measure of cotton textile activity, was maintained near the relatively high average of recent months. Crude oil production in Coastal Louisiana and Mississippi rose, but remained somewhat below the previous record. Steel mill opera tions remained at a low volume in July and August. 3-mo moving ov Cotton Consumption Department store sales, seasonally adjusted, hit a new record in July, reflecting greater strength than was indicated by preliminary estimates. Early estimates for August, however, show a downturn in that month. July gains were especially noticeable in Florida cities and Macon, but sales in most areas in Louisiana and Mississippi continued to lag. Furniture store sales in July rebounded from the relatively low June volume but remained well below a year ago. Household appliance store sales rose somewhat more than they usually do. Farm Cash Receipts Bank Debits Dept Store Stocks Member bank deposits, seasonally adjusted, changed little in July because slight increases in Alabama, Florida, Mississippi, and Tennessee were almost offset by decreases in Georgia and Louisiana. Member bank loans, however, rose slightly more than seasonally in all District states. Investments also rose as banks added to their holdings of U. S. Government securities. In August, loans outstanding at banks in leading cities declined slightly in contrast with increases during the same month of other recent years. Member bank borrowings from the Federal Reserve Bank of A tlanta declined. Effective August 16, the Federal Reserve Bank of Atlanta reduced the discount rate from 3.5 to 3 .0 percent. Member Bank Deposits R A T IO TO R EQ U IR ED R E S E R V E S Borrowings from F. R Bank E x c e s s R eserves 1959 Consumer saving in the form of savings and loan sh ares declined sub stantially in July, more than offsetting larger-than-seasonal increases in time deposits at commercial banks. Consumer instalm ent credit outstanding at District banks did not show its usual gain for July, largely as a result of the relatively small increase in credit for consumer goods. Credit balances at con sumer finance companies and Federal credit unions increased more than they usually do in July. Rains in most places in recent weeks favored growing crops and pastures. The new citrus crop also is developing well. Meanwhile, farm output in June was lower than May, principally because fewer crops were marketed. Farm em ploym ent, seasonally adjusted, increased from June to July, principally because gains were large in Georgia and Tennessee. Total receipts from farm m arketings, seasonally adjusted, did not change from May to June although farmers obtained more income from sales of livestock and poultry products. Member Bank Loans 1958 H IG H L IG H T S I ^ e c e n t d i v e r s e m o v e m e n t s in a number of economic indi cators have been reflected in stable nonfarm employment at the advanced level reached several months ago. Consumers increased their spending somewhat and reduced their rate of saving. Farm emloyment increased slightly; crop growth in most places was favored with beneficial rains. Member bank loans rose and deposits remained virtually unchanged. Borrowings by member banks from the Federal Reserve Bank of Atlanta declined. Mfg. Payro lls B U S IN E S S I9 6 0
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