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IN THIS ISSUE: MONTHLY REVIEW F E D E R A L R E S E R V E • What Kind of Economy Can the South Expect? • Louisiana: An Independent Economic Path? • District Business Conditions B A N K OF Se p tem b e r A T L A N T A 1967 W h a t C a n K i n d t h e E c o n o m S o u t h Looking ahead toward the turn of the century should not strain our imaginations too much. Looking backward, we can, of course, be im pressed by the many changes that have taken place in the South1 over the past three decades. In few other areas of the United States have as many social and economic changes occurred in so short a time. On the other hand, those of us who have studied the South’s economy cannot but be impressed by how much the area’s basic economic structure and the kinds of problems it faces now resemble those of 25 years ago. Of course, there have been major technological changes. Southerners make their livings in differ ent ways and places. In the process, they have raised their incomes and levels of living. Never theless, many aspects of the basic economic sys tem are, to a considerable extent, unaltered. Un less our economic system is subjected to a violent JT h e S o u th as u se d in th is a rticle em brace s the states of A la b a m a , A rk a n s a s , F lo rid a , G e o rg ia , K e n tu ck y, L o u isia n a , M is s is s ip p i, N o r t h C a ro lin a , S o u th C a ro lin a , T ennessee, a n d V ir g in ia . * T h i s a rticle is base d in p a rt on a p a p e r p resented a t the S o u th e r n R e g io n a l C on fe ren ce on U r b a n iz a tio n h e ld in A tla n ta , G e o rg ia , M a y 29, 1967. M o n t h ly R eview , V o l. L I I , N o . 9. F re e su b scrip tio n a n d a d d itio n a l copies a v a ila b le u p o n request to the R e se a rc h D e p a rtm e n t, F e d e ra l R e se rve B a n k of A tla n ta , A tla n ta , G e o rg ia 30303. 118 o f E y x p e c t ? * upheaval, a sudden change in its basic structure is very unlikely. The forces shaping the economy during the rest of this century will probably re semble very much those of the past. Knowing that our economic system is an or ganization of men and women and that their decisions in the long run tend generally to follow consistent patterns should give us some con fidence in our speculations about the future. But, first, we need to get clearly in mind the basic patterns about which we are talking. Our first task, then, will be to distinguish between those patterns that exemplify temporary behavior and those that do not. Basic Pattern of Southern Economic Change The South’s economy is closely tied to the na tion’s. In general, it is safe to say, “As the na tion goes, so goes the South.” This is not surpris ing, since a major part of the South’s output is sold in the national market and the area’s in come, therefore, depends to a great extent upon those market conditions. Furthermore, the ave nues for the flow of goods, people, and money between the South and the rest of the United States are many. The strength of the economic adjustment proc ess that took place through the market mechanism operating in a relatively free economy during the past 25 years was significant. There was a shift MONTHLY REVIEW in labor from low productivity sectors, especially agriculture, in the South, as well as other parts of the nation. Capital and labor were mutually attracted. One of these adjustments was the very rapid growth of the South’s major metropolitan areas. Capital was drawn to an area of economic opportunities—i.e., natural resources, the grow ing consumer market, and the labor supply. Through this adjustment process, our economy has changed considerably in 25 years. For one thing, we have a more diversified economy. A shift away from agriculture is a major cause, but diversification in manufacturing has increased in a similar fashion. Diversification in the South brought greater homogeneity between its economic structure and that of the United States and between Southern areas. Income differentials have been reduced; the urban-rural mix has become much more like that of the U. S. The employment mix has ap proached the nation’s, as has the cyclical be havior of the South’s economy. Important implications for the South’s eco nomic future stem from this tendency to become more like the U. S. The ebb and flow of the na tion’s economic fortunes will be more and more paralleled by the South’s economic fortunes. As these differences diminish, the adjustment will be slower. There are still enough significant dif ferences, however, for the economic adjustment process to continue. But its speed may be slower. The adjustment process also has had a differ ential impact on various areas of the South and upon different economic groups. This differential impact of economic adjustment is, of course, un derstandable in an economic society such as ours where, in the words of one writer, “There is a continuous reworking of the economic landscape.” An acceleration of the differential impact in the future would not be surprising. Technological de velopments may well alter considerably the com parative advantages that certain areas of the South now enjoy. Although the strength of the economic ad justment process made in response to market forces has been a major factor in southern eco nomic growth, a complete laissez-faire policy can not be relied upon as the sole source of eco nomic growth. Government intervention has a leading and perhaps crucial role in the successful functioning of the modern capitalistic system. The government may at times have to facilitate the economic adjustment process more and more. Possibly, government intervention may be neces SEPTEMBER 1967 sary if, for some reason or another, it is de termined desirable to prevent economic forces from bringing about certain results. Although the decisions are made by men and women, in many sectors of the economy the economic ad justment process is not directly in control. Citi zens express their preferences through their gov ernments. Such is the case with respect to public education and the provision of other govern mental services. Indeed, the activities of the Federal govern ment have in the past been one of the major economic forces in southern economic growth and have had a greater relative impact on this region’s economy than in most parts of the coun try. The shape of the South’s economy in the future is still going to be greatly influenced by governmental activities and expenditures, al though the future pattern may differ. The impact of most government activities in the past was largely fortuitous and not designed specifically to correct southern problems. If the program for improving the national society is to be meaning ful, much of it will have to be aimed specifically at the South. Another major force shaping the South’s economy is the changing pattern of consumer behavior. Most of us know that relatively steady growth has raised per capita income in the South to about 70 percent of the non-South’s, compared with one-half 30 years ago. In the meantime, in come has expanded generally throughout the country. Accepted economic theory predicts that with income growth will come a decrease in the proportion of income spent for current consump tion, an increase in the proportion of income saved, a greater equality in the distribution of income, and a shift in consumer spending from basic things such as food and clothing toward durable goods and what are sometimes called luxury goods and services. This has happened. Not only is the southern consumer market much bigger than 25 or 30 years ago; it has a different nature. As incomes grow, these changes should continue in the future. These major forces will likely shape the South’s economy. It will be an economy closely tied to the fortunes of the nation’s economy, one in which resources will be allocated primarily in response to market forces operating in the con text of a government devoted to increasing social overhead capital, welfare, and improvements in education. Under this economic adjustment pro cess, the South will continue to diversify its sources of income. 119 The South’s economy will become more like the nation’s. Economic change will have a dif ferential impact on the different areas of the South and industries, depending upon the com petitive strength of economic opportunities. The South’s economy will be shaped more and more by government. Federal programs more directly aimed at welfare are likely to have special im pact on the South. With greater affluence, the Southern consumer will increase his savings and change his spending pattern. Although the nature of the forces inducing change may be the same as in the past, the results obviously will be different in the future. Income in the Nation and the South W hat is likely to be the character of the nation’s economic growth, to which the economic fortunes of the South will be so closely tied? As many studies have indicated, the nation has a poten tial for continued economic growth stemming from a very rapid expansion in the labor force and the possibility of greater productivity result ing from high capital investment and technologi cal advances. The Joint Economic Committee recently re leased a study dealing with the potential eco nomic growth of the United States by 1975. A potential rate of expansion of between 4 and 4x/2 percent a year in the Gross National Product at constant prices was projected as one possibility. With a labor force growing to 93.6 million per sons by 1975— 14.7 million more than last year— and with an unemployment rate of 3 percent, the nation could have a Gross National Product about a third greater than last year, as measured in constant dollars. This would mean a Gross National Product of $986 billion in 1966 dollars. Last year it was about $740 billion. Should the price level continue to rise, therefore, it would not be long before the Gross National Product would add up to trillions instead of hundreds of billions of dollars. If prices should rise at 2 per cent a year, the total in 1975 would be $1.3 trillion. Over the 1950-65 period a 1-percent change in U. S. personal income was accompanied by a 1.23-percent increase in personal income in the Southeast. Should this relationship hold through 1975 and if the projection of the Joint Economic Committee is fulfilled, personal income in the Southeast will amount to a little less than $150 billion, measured in constant dollars of 1966 purchasing power. Last year it totaled $92.5 Digitized 120for FRASER billion, according to the U. S. Department of Commerce. This would mean that in 1975 per sonal income in the Southeast would be more than a third again as great as last year. Should prices rise, of course, the total would be even greater. No claim for any scientific exactitude am be made for this figure. It will be correct only if several assumptions are correct. Nevertheless, even though the exact figures may be questioned, they emphasize the size of the income growth that can occur in the Southeast if the United States grows as expected and if the Southeast maintains past relationships to that growth. In per capita terms, this could mean an increase of around $900, measured in 1966 dollars, from last year to 1975. But this projection of personal income in the Southeast by 1975 will be correct only if the entire nation’s grows as projected and the re lationship between southern and national growth continues exactly as in the past. An exact parallel is extremely unlikely. For one thing, de terring this growth may be a change in the character of national developments. National economic growth is going to reflect the growth of the nation’s labor force and how productively this labor force is put to work. If the national economic growth envisioned occurs, there must be a massive business capital investment to utilize the expanding labor force to meet the greater demands and to accept the challenge of the increasing pace of technological change. We shall also have to be wise in our policy decisions. We can expect the South to share in the na tion’s economic growth more than it has in the past only if (1) it retains an increasing share of the nation’s labor force, (2) it is able to in crease the productivity of its workers, and (3) it commands a greater share of capital invest ment. The Labor Force Under almost any conceivable set of conditions, we can expect the South’s population to grow. Today the population of the eleven southeastern states is about 41 million. The U. S. Bureau of the Census has provided us with projections, un der certain assumptions as to fertility and migra tion, that suggest a population of about 47 mil lion in 1975 and 56 million in 1985 for the Southeast. Through 1975, the growth rate would just about equal that of the United States, whereas through 1985 under different assump MONTHLY REVIEW tions of migration the rate of expansion would be slightly higher. But most of these people who will be added to the South’s population will not have entered the labor force by 1985, since most of them have not yet been bom. Additional entrants into the labor force within the next ten to twenty years must come essentially from those living today. In the past, the South has had a higher propor tion of population in the younger and unproduc tive age groups than other parts of the country. Population experts suggest that this will continue but to a lesser degree. We shall, along with the rest of the country, have a sharp increase in the proportion of the population 14-24 years of age. But of special significance is that by 1975 the proportion of the 25-64 age group in the South east will vary little from that characterizing the United States. In age distribution, as in other matters, the South’s structure will become in creasingly like the nation’s. But numbers alone do not tell the story. De spite the resources devoted to improving educa tion, the educational attainment of Southerners entering the labor force today is, on average, lower than in many parts of the United States. If education and productivity are related, these persons are potentially less able to contribute to economic expansion. In the immediate future, the productivity of the southern labor force can be improved by manpower training and retraining and, in the long run, by improving educational facilities. The impact of these policies cannot be as great in the immediate future as in the long run, how ever. Thus, although the South’s labor force will probably increase at a rate somewhat greater than previously and in the productive age groups, it may be handicapped in competing with other areas in an economy where increasing emphasis is being placed upon technology and skills. On the other hand, as the income differential be tween the South and the rest of the United States is reduced, we should expect the economic magnet that has drawn Southerners away from the region to lose some of its power. Capital Investment During the foreseeable future, all signs point to heavy demands for capital investment funds. In addition to the funds required by business, the nation will need increasing amounts of funds to finance residential construction. Not only will there be more people to house, but the number of SEPTEMBER 1967 household formations will upsurge strongly. One authority has estimated a need for 2y2 million new housing units each year by the 1970’s, com pared with a little over one million today. If our projection of the increasing role of the Federal government is correct, we are prob ably going to compete with the government for available long-term funds. State and local gov ernments—which normally finance their capital outlays by borrowing—will also be bidding for the nation’s savings to meet the cost of public facilities, especially in urban areas. Over the long run, these capital needs must be financed out of the nation’s financial savings. As income expands, we should expect some improvement in the nation’s rate of saving. Nevertheless, in the future, needs for funds will press hard against the funds available from the nation’s savings. Thus, the South is going to face an even fiercer competition for capital funds than in the past at the same time that it needs an increas ing share in order to attain a faster-than-national economic growth. Southerners should be saving more of their incomes in the future. Fi nancial savings in relation to per capita per sonal income have averaged around 60 percent of the national average in the South during the 1960’s. Possibly, as Southern incomes expand, the rate might increase to 70 or 75 percent of the national average by 1975. The South, however, will continue to need more funds than can be generated within the region, and it will get these funds only if the economic opportunities to use the funds in the South are as good or better than elsewhere. Capital investment funds will be attracted to the Southeast by three major forces, one of which is the continued growth of the southern market. Here the prospects are good because of income growth. A second force attracting capital investment is our labor supply, where the picture is some what less optimistic. We shall continue to have a source of labor for industry and nonfarm ac tivities because of declining needs for farm labor. The National Planning Association pro jects that the relative importance of agricultural employment in the Southeast will be only half as much in 1975 as it is today. But if the workers released from agriculture and the expected addi tions to the labor force are going to constitute an attraction to capital investment, Southerners will have to develop the skills that will be at a premium in the more technologically oriented processes. This goes beyond manufacturing, 121 since, according to expectations, employment in services, state and local governments, finance, in surance, and real estate, and construction— not manufacturing—is expected to experience the greatest expansion. The third major force that may attract capi tal investment is natural resources. In the post war period, the South’s petroleum resources, water supply, and fast-growing trees were re sponsible for attracting a major portion of capi tal investment funds. The South’s comparative advantage in respect to its natural resources in the future is hard to judge, but this force will be major in determining the success of the South in attracting capital investment. The Consumer By speculating about how the South will share in the nation’s economic growth, we are likely to forget that, even should the South share less in the nation’s growth than we might hope, income in the area is going to expand substantially. Moreover, we know that when consumers get more money they will spend it, and we can be fairly confident of a consistent pattern of con sumer behavior. There will be, if one Census projection is cor rect, about 6 million more consumers in the eleven Southeastern states in 1975 than ten years previously and 15.5 million more in 1985. Even if per capita income were to remain the same and the proportion of income saved and going for taxes is unchanged, we should expect an in crease in total consumer spending of 11.3 and 35.8 percent, respectively, from 1965 to 1975 and 1985. But per capita incomes are going to rise faster than population if the projections have any validity. Consumer spending could increase equivalently. As their incomes rise, consumers will probably save a little more. And if govern ment activity heightens, they may pay more in taxes. We may need to shade our expectations a little bit; but since it seems probable that a given dollar of additional income in the Southeast will continue to produce greater consumer spending than in the rest of the United States, the South east will remain one of the most rapidly expand ing consumer markets. But how will the Southern consumer spend his income? Because of growing income and reduced inequality of income, we should expect that the greatest growth in consumer spending will not be for what we now consider essentials but, rather, 122for FRASER Digitized for such items as automobiles, recreational equip ment, more expensive clothing, and services. This is the general pattern consumers follow when their incomes rise. We should expect a more rapid increase in the spending for services in the Southeast than has previously been the case. The general tendency for consumers to shift their patterns of spending away from basic neces sities as their incomes rise will be modified by the change in the age distribution of population and where Southerners will be living. Younger persons have different demands than older per sons; and, as earlier noted, there is going to tie a substantial shift in the age composition of our population in the next ten years or so. There :is likely to be a strong demand for the goods and services preferred by younger people and by those forming new families. Thus, housing and related commodities and services will be in high demand. These developments, of course, will have a differential impact in different areas of the South east, the greatest impact being associated with income differentials rather than population change. During the 1950’s the suburban markets gained a more-than-proportionate share of retail spending as measured by population growth be cause of the greater expansion in income than in either the central cities or non-metropolitan areas. This trend will probably continue. Continued Change Looking backward and comparing where we are now with where we were not too many years ago is satisfying to Southerners. We sometimes feel a little rosy glow when we note the accomplish ments measured in terms of economic welfare for the South since the end of World War II. It is especially reassuring to us because we have positive proof of progress. Looking ahead will not give us the same feeling of euphoria, since we can never be completely certain about what will happen. But looking backward will benefit us little unless it helps us meet future problems. The process that produced rising incomes in the South is one of change. These changes were not just exactly like many of us expected them to be 25 or 30 years ago. Neither will future changes be exactly as we predict today. One thing is certain: the economy will be a changing one. If the South retains its greatest asset, the ability to change, we can be confident about the future. C harles T. T aylor MONTHLY REVIEW L o u i s i a n a : A E c o n o m P a t h ? i c n I n d e p e n d e n t The economic performance of an area such as Louisiana reflects the interaction between eco nomic factors peculiar to itself and trends in the U. S. economy. In a highly integrated national economy, overall changes often dominate economic activity in individual areas. However, a particular economic structure, climate, strikes, etc., may im part to a certain area an individualistic economic pattern. During the last year and a half, Louisi ana’s economy has asserted its individualism by differing in timing and pace from the national patterns of change. Louisiana vs. the Nation Although expansion continued at a high level in both Louisiana and the United States during Personal Income Indices Louisiana and United States SEPTEMBER 1967 1966, Louisiana’s economy followed its own dis tinctive path. Personal income, an important indicator of economic growth, readily charac terizes the state’s behavior. During late 1966 and early 1967 personal income growth in Louisiana accelerated, while the national economy began experiencing some serious readjustments. Growth in Louisiana’s personal income topped the average U. S. rate both in calendar 1966 and for the first six months of 1967. Individual sectors have reflected patterns of growth very similar to that of personal income. Growth in manufacturing employment paralleled the uptrend in its national counterpart during most of 1966, but shot ahead at the turn of the year when U. S. manufacturing employment be gan to slacken. The advance in Louisiana’s manu facturing employment in the first half of 1967 came from major industries, such as lumber and furniture, transportation equipment, fabricated metals, chemical and allied products, and paper and related products. In contrast, for the country as a whole, employment in many manufacturing industries leveled off or declined. Nevertheless, by spring the number of jobs in this sector began to taper off, although remaining well above the national level. The buoyancy of manufacturing throughout the period overshadowed the decline of about 2,500 jobs at the Michoud facility in New Orleans which assembles Saturn booster rockets. This 123 facility, which at one time employed about 12,000 persons, has had a considerable impact on Louisi ana’s economy since its beginning in the early sixties. About 8,500 people work at the complex currently. Manufacturing payrolls generally confirm the picture depicted by employment. Payrolls surged upward during most of 1966, although dipping somewhat in November and December under the influence of work stoppages and a short season in the sugar refining industry. But, similar to employment, payrolls advanced in early 1967 and for the first half of the year displayed a healthy gain, while little change occurred in the nation. Nonmanufacturing employment in Louisiana (excluding agriculture) also outpaced national growth in 1966, but it failed to do as well in the first half of 1967. The number of manufac turing workers in the U. S. maintained a rather steady expansion. Construction, engaging about 10 percent of the nonmanufacturing workers in the Pelican state, climbed vigorously in 1966, despite a nationwide sag. The national problems of this industry gained notoriety last year. However, because construc tion had reached such boom levels by the turn of the year, it had little room for further expansion, especially during late spring when a seasonal rise usually occurs. Consequently, the prosperity of this sector, rather than any weakness in de mand for construction services, appears to ac count for the leveling off of construction employ ment for the first half of 1967. In early summer considerable labor difficulties constituted a sig nificant drag on this industry. Longer-Run Trends Although local factors may have determined the direction and pace of activity, Louisiana’s econ omy has not altogether escaped the impact of national trends. Thus, most major sectors reflect to some extent the impact of the general sluggish ness characterizing economic activity throughout the country during the first half of this year. As seen in the table, even manufacturing and non manufacturing employment, although indepen dent from their national counterparts, still reveal some easing in their expansion rates. Financial activity parallels the moderated growth evident in productive sectors of Louisi ana’s economy. A slower increase in bank loans suggests that individuals and businesses may not be buying and investing as strongly as in 1966, confirming the view that a more moderate pace of business activity has prevailed. Digitized 1 2 4for FRASER A closer examination of Standard Metropoli tan Statistical Areas (SMSA’s), however, re veals that considerable diversity exists in the level of economic activity within Louisiana, at least as represented by bank debits. For instance, while the Baton Rouge area had a debit growth of 17.5 percent and the Lake Charles area a growth of 36.3 percent during 1966, debits in the New Orleans SMS A fell by 6.1 percent. In con trast, for the first seven months of 1967 debits in Baton Rouge declined moderately, while the New Orleans and Lake Charles areas showed minor increases. Debits in the Lafayette area inched up slightly in 1966, but revealed a 16.5-percent in crease in the later period. Manufacturing Employment Louisiana and United States 1966 1967 Nonmanufacturing Employment Louisiana and United States 1966 1967 Percent Changes in Selected Louisiana Indicators Dec. 1 965Dec. 1 9 6 6 Dec. 1966J u ly 1967 (A n n u a l Rate) M a n u f a c t u r in g E m p lo y m e n t + 5.5 N o n m a n u f a c t u r in g E m p lo y m e n t + 5.5 + 0.9 M e m b e r B an k L o a n s* + 9.1 + 4.6 + 3.8 * ln c lu d e s o n ly th o se L o u is ia n a b a n k s w ith in the S ix t h F ed e ra l R e se rv e District. MONTHLY REVIEW Future Outlook Recent unofficial figures indicate no slackening in the dollar volume of new and expanded plant an nouncements in Louisiana through the first half of 1967. If this trend continues for the rest of the year, 1967 may equal the high levels of 1966 and 1965. Well over half the value of new investments announced since the end of 1965 was to flow into the petroleum refining and closely related chemi cal industries, with another substantial portion going into the manufacture of paper and paper products. Thus, natural resources, particularly the oil and timber resources upon which these industries are based, continue their dominant role in sparking Louisiana’s economic growth. A sustained high level of investment suggests that Louisiana’s short-run economic prospects remain bright, despite a more modest advance in the first half of 1967. J ohn E. Leimone B a n k A n n o u n c e m e n ts On August 1, four nonmember banks began to remit at par for checks drawn on them when received from the Federal Reserve Bank. They are the Farmers and Mer chants Bank, Ariton, Alabama; Bank of Madison, Madi son, Georgia; Bank of Jackson, Jackson, Louisiana; and Bank of Lobelville, LobelviIle, Tennessee. SEPTEMBER 1967 The First Farmers Bank, Athens, Tennessee, a non member bank, and its branch at Englewood, Tennessee, began to remit at par on August 4. The Town Creek Branch of the Bank of Moulton, Town Creek, Alabama, opened on August 21 as a non member bank and began to remit at par. 125 S i x t h D i s t r i c t S t a t i s t i c s Seasonally Adjusted (All data are indexes, 1957-59 = IOO, unless indicated otherwise.) Latest Month (1967) One Month Ago Two Months Ago One Year Ago SIXTH DISTRICT IN CO M E AND SP EN D IN G 56,673r 197r 132 119 140 o o UD in Personal Income (Mil. $, Ann. Rate) . June 57,815 199 Manufacturing P a y r o lls ................... . July 166 Farm Cash R e c e ip t s .................... . June 193 . June 149 . June Instalment Credit at Banks *(Mil. $) 268 New Loans .............................. . July 260 R e p a y m e n t s ........................... . July 194 134 115 143 53,191 190 151 134 160 308r 277 301 277 292 270 PRODUCTION AND EM PLOYM EN T Nonfarm E m p lo y m e n t ................. . July Manufacturing ....................... . July Apparel .............................. . July C h e m i c a l s .......................... . July Fabricated M e t a l s ................. . July F o o d .................................... . July Lbr., Wood Prod., Furn. & Fix. . . July Paper ................................. . July Primary M e t a l s .................... Textiles .............................. Transportation Equipment . . . July No n m an u factu rin g.................... C o n s t r u c t io n ....................... Farm E m p lo y m e n t....................... . July Unemployment Rate (Percent of Work Force) . . . . Insured Unemployment (Percent of Cov. E m p . ) ............. . July Avg. Weekly Hrs. in Mfg. (Hrs.) . . . July Construction C o n t r a c t s * ............. . July R e s id e n t ia l.............................. All O t h e r ....................... Electric Power Production** . . . . . June Cotton C o n s u m p t io n * * ................. . June Petrol. Prod, in Coastal La. and Miss.* * July 136 135 165 129 152 115 102 118 126 105 185 137 121 68 136 135 165 130 152 114 103 119 125 105 181 136 123 65 136 135 165 129 151 116 102 117 125 105 178 136 127 61 133 134 167 129 150 112 107 114 129 106 172 132 128 72 4.1 4.1 3.8 3.7 2.7 41 159 177 144 133 111 250 2.3r 41 174 178 171 143 113 223 2.2 41 158 175 143 N.A. 120 220 1.8 42 164 151 175 139 117 211 M a nu factu rin g..............................July N o n m an u factu rin g....................... July C o n s t r u c t i o n ...........................July Farm E m p lo y m e n t...........................July Unemployment Rate (Percent of Work F o r c e ) ............. July Avg. Weekly Hrs. in Mfg. (Hrs.) . . . July . Aug. . Aug. 256 226 256 228 251 225 240 221 . Aug. • Aug. . July 194 174 208 193 174 196r 189 169 195 180 168 193 Personal Income (Mil. $, Ann. Rate) . June Manufacturing P a y r o lls ................. . July Farm Cash R e c e i p t s .................... . June 7,552 179 151 7,503r 175 136 7,363 177 143 7,102 176 158 ALABAMA INCO M E 125 121 126 120 82 124 121 125 119 66 124 122 125 121 63 124 123 125 129 82 . July . July 4.3 41.1 4.6 40.9 4.4 41.1 4.3 41.7 . July 241 190 200 238 187 184 235 183 180 224 178 184 . July . July . July FINA NC E AND BA N KIN G Member Bank L o a n s .................... Member Bank D e p o s its ................. Bank D e b its ** .............................. INCO M E Personal Income (Mil. $, Ann. Rate) . June 16,970 245 Manufacturing P a y r o lls ................ Farm Cash R e c e i p t s .................... 175 16,333r 16,142 244r 237 128 125 15,226 226 124 EMPLOYM ENT 126 158 150 110 83 156 149 109 95 155 148 90 78 3.1 42.4 3.0 42.9 2.7 42.2 3.0 42.5 270 201 198 270 261 190r 191 245 181 184 111 152 142 110 Member Bank L o a n s ....................... Aug. Member Bank D e p o s it s .................... Aug. Bank D e b its * * ................................. July 202 1S8 GEORGIA INCO M E Personal Income (Mil. $, Ann. Rate) . June 11,156 Manufacturing P a y r o lls .................... July 202 Farm Cash R e c e i p t s ....................... June 151 10,949r 10,819r 10,391 189 198 194 156 133 139 EM PLOYM EN T Nonfarm E m p lo y m e n t .................... July M an u fa ctu rin g.............................. July N o n m an u factu rin g....................... July C o n s t r u c t i o n ...........................July Farm E m p lo y m e n t...........................July Unemployment Rate (Percent of Work F o r c e ) ............. July Avg. Weekly Hrs. in Mfg. (Hrs.) . . . July 135 131 137 124 63 135 131 137 128 59 134 130 136 127 49 132 130 133 130 63 3.5 40.7 3.8 40.5 34 40 3 3.8 41.0 265 212 223 263 210 217 260 203 209 252 196 8,474 176 150 7,819 168 147 FINANCE AND BA N KIN G Member Bank L o a n s ....................... Aug. Member Bank D e p o s it s .................... Aug. Bank D e b its * * ................................. July 210 LO U ISIA NA Personal Income (Mil. $, Ann. Rate) . June Manufacturing P a y r o lls .................... July Farm Cash R e c e i p t s ....................... June 8,554 180 155 8,500r 179 142 , July , July July 126 119 127 121 64 126 120 128 134 66 127 120 12:9 146 65 123 114 124 142 67 July July 5.5 42.4 4.8 42.0 4.5 41,8 4.4 42.6 . Aug. Aug. July 223 163 184 234 164 168r 22:4 160 173 225 156 184 . June . July June 4,491 211 210 4,384r 213r 139 4,314 209 135 4,091 207 180 EM PLOYM EN T July M a n u fa ctu rin g.................... N o n m a n u fa ctu rin g............. C o n s t r u c t io n ................. Farm E m p lo y m e n t................. Unemployment Rate (Percent of Work Force) . . Avg. Weekly Hrs. in Mfg. (Hrs.) FINANCE AND BAN KING Bank D e b its * / * * .................... M IS S IS S IP P I INCO M E Personal Income (Mil. $, Ann. R Manufacturing Payrolls . . . . Farm Cash R e c e ip t s ............. EM PLOYM EN T FLORIDA Nonfarm E m p lo y m e n t ................. One Year Ago FINANCE AND BA N KIN G EM PLOYM EN T Nonfarm E m p lo y m e n t ................ M a n u fa ctu rin g.......................... N o n m a n u fa ctu rin g.................... C o n s t r u c t io n ....................... Farm E m p lo y m e n t....................... Unemployment Rate (Percent of Work Force) . . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . One Two Month Months Ago Ago INCO M E FIN A N C E AND BA N KIN G Loans* All Member B a n k s .................... Large B a n k s .......................... Deposits* All Member B a n k s ............. Large Banks .................... Bank D e b it s * / * * ....................... Latest Month (1967) 151 150 149 144 Nonfarm Employment . . . . M an u fa ctu rin g.................... N o n m a n u fa ctu rin g............. C o n s t r u c t i o n ................. Farm E m p lo y m e n t................. Unemployment Rate (Percent of Work Force) . . Avg. Weekly Hrs. in Mfg. (Hrs.) July July July July July 137 143 135 128 58 136 143 134 126 56 137 142 134 133 45 137 147 133 146 . July . July 5.3 40.0 5.1 40.8 5.2 40.3 4.4 41.2 . Aug. . Aug. . July 310 231 202 309 232 203 298 22!2 207 283 228 195 . . . . . 68 FINANCE AND BAN KING Member Bank Loans* . . . . Member Bank Deposits* . . . Bank D e b its * / * * .................... MONTHLY REVIEW Latest Month (1967) One Month Ago Two Months Ago T E N N E S SE E 9,092 191 141 9,004r 188r 118 8,988 187 119 One Month Ago Two Months Ago One Year Ago 133 150 69 133 154 65 133 153 68 130 156 76 4.5 39.7 4.7 39.8 4.3 39.9 3.3 40.7 239 181 231 246 181 219 248 181 223 231 174 208 Latest Month (1967) N on m an u factu rin g................. C o n s t r u c t io n .................... Farm E m p lo y m e n t.................... . . July Unemployment Rate 8,562 (Percent of Work Force) . . . . . July 188 Avg. Weekly Hrs. in Mfg. (Hrs.) . . . July 148 INCO M E Personal Income (Mil. $, Ann. Rate) . June Manufacturing P a y r o lls ................ . July Farm Cash R e c e i p t s ........................ June One Year Ago FINA NC E AND BA N KIN G EM PLOYM EN T 136 142 . July . July Nonfarm E m p lo y m e n t ................ M an u fa ctu rin g.......................... 136 141 136 142 134 143 Member Bank L o a n s * ............. Member Bank Deposits* . . . . Bank D e b it s * / * * ....................... ‘ For Sixth District area only. Other totals for entire six states. **Daily average basis. r-Revised. N.A. Not Available. Sources: Personal income estimated by this Bank; nonfarm, mfg. and nonmfg. emp., mfg. payrolls and hours, and unemp., U. S. Dept, of Labor and cooperating state agencies; cotton consumption, U. S. Bureau of Census; construction contracts, F. W. Dodge Corp.; petrol, prod., U. S. Bureau of Mines; industrial use of elec. power, Fed. Power Comm.; farm cash receipts and farm emp., U.S.D.A. Other indexes based on data collected by this Bank. All indexes calculated by this Bank. D e b i t s t o D e m a n d D e p o s i t A c c o u n t s Insured Commercial Banks in the Sixth District (In Thousands of Dollars) July 1967 June 1967 Percent Change Percent Change Year-to-date 7 mos. July 1967 from 1967 July June July from 1966 1967 1966 1966 Year-to-date 7 mos. July 1967 from 1967 July from June July 1966 1966 1967 1966 STAN DA RD METROPOLITAN STATISTICAL A REA Sf Birmingham . . . . Gadsden ................ H u n t s v i l l e ............. Mobile ................ Montgomery . . . . T u s c a lo o s a ............. 1,477,655 57,809 176,276 490,263 282,629 97,380 1,497,687 60,567 180,861 474,758 297,788 95,342 l,365,037r 61,596r 170,809r 417,148r 273,340r 88,084 -1 -4 -2 +3 -5 +2 +8 -6 +3 + 18 +3 + 11 +8 -5 +1 +6 +2 +8 Ft. Lauderdale— Hollywood . . . . 602,758 Jacksonville . . . . 1,385,776 M i a m i .................... 2,195,213 O r l a n d o ................ 543,296 192,544 P e n s a c o l a ............. 138,785 Tallahassee . . . . Tampa— St. Petersburg 1,325,458 W. Palm Beach . . 376,481 619,595 1,540,194 2,215,493r 561,730 213,244 136,626 1,308,491 392,177 573,468r - 3 l,367,905r - 1 0 2,002,971 -1 483,072 -3 173,778r - 1 0 124,622 +2 l,140,564r + 1 373,876r - 4 +5 +1 +10 +12 + 11 + 11 + 16 +0 +7 +5 +9 +6 + 10 + 15 +9 +1 Albany ................ Atlanta ................ A u g u s t a ................ C o l u m b u s ............. Macon ................ Savannah ............. 84,382 4,463,065 284,733 207,550 244,073 258,680 84,381 4,610,398r 293,979 218,494 252,092 269,439 91,799 4,148,380r 269,886r 192,048r 227,637r 247,577r +0 -3 -3 -5 -3 -4 -8 +8 +6 +8 +7 +4 -3 +8 + 11 + 10 + 11 +9 Baton Rouge . . . . Lafayette ............. Lake Charles . . . . New Orleans . . . . 523,088 126,595 147,250 2,374,956 562,703 116,017 144,953 2,431,359 500,320r 130,244 132,473 2,370,145r -7 +9 +2 -2 +5 -3 + 11 +0 + 12 +4 + 14 +2 ................ 568,504 609,962 528,341r -7 +8 + 11 Chattanooga . . . . Knoxville ............. Nashville ............. 571,171 445,659 1,535,269 601,845 464,594 1,651,008 557,292r 435,792r l,358,893r -5 -4 -7 +2 +2 + 13 +7 +7 +21 Anniston ............. Dothan ................ S e l m a .................... 62,489 54,731 44,712 67,454 61,108 45,735 64,583 52,587 39,715 -7 -1 0 -2 -3 +4 + 13 +1 + 11 + 10 Bartow ................ B r a d e n t o n ............. Brevard County . . . Daytona Beach . . . Ft. M y e rsN. Ft. Myers . . . G a in e s v ille ............. 32,386 73,953 220,573 93,540 35,327 76,953 221,857 94,708 37,028 64,642 205,615 92,793 -8 -4 -1 -1 -1 3 + 14 +7 +1 -4 +26 +6 +8 75,254 75,593 79,596 84,423 67,122 69,989 -5 -1 0 + 12 +8 +7 +9 Jackson OTHER C E N T ERS ‘ Includes only banks in the Sixth District portion of the state. SEPTEMBER 1967 tPartially est July 1967 June 1967 123,027 32,089 56,128 19,786 326,136 101,273 684,706 54,014 122,566 33,977 55,784 19,862 313,140 96,769 683,107 57,545 106,887 31,490 58,761 22,048 286,264 96,276 585,377 49,984 +0 -6 +1 -0 +4 +5 +0 -6 + 15 +2 -4 -1 0 + 14 +5 + 17 +8 +4 +4 +4 +3 +11 +0 +7 +2 Athens ............. Brunswick . . . . Dalton ............. E lb e r t o n ............. Gainesville . . . . G r i f f i n ................ LaGrange . . . . Newnan ............. R o m e ................ V a ld o s t a ............. 73,804 43,879 76,871 14,269 71,210 34,264 20,766 24,778 68,016 53,327 72,170 43,538 78,741 17,041 76,151 32,279 22,627 24,299 71,011 53,896 68,201 42,202 78,506 17,764 69,302 35,347 20,927 23,601 69,255 46,769 +2 +1 -2 -1 6 -6 +6 -8 +2 -4 -1 +8 +4 -2 -2 0 +3 -3 -1 +5 -2 + 14 +8 +5 -5 +10 +6 +5 -4 +2 +1 + 13 Abbeville . . . . Alexandria . . . . Bunkie ............. Hammond . . . . New Iberia . . . . Plaquemine . . . Thibodaux . . . . 11,197 124,139 7,105 38,086 35,185 11,369 22,032 11,742 130,404 7,160 38,309 30,879 11,223 24,014 10,755 123,377 5,742 33,270 35,893 11,944 21,429 -5 -5 -1 -1 + 14 +1 -8 +4 +1 +24 + 14 -2 -5 +3 +3 +14 +25 +17 -2 +15 +2 Biloxi-Gulfport . . Hattiesburg . . . L a u r e l ................ Meridian . . . . N a t c h e z ............. Pascagoula— M oss Point . . . Vicksburg . . . . Yazoo City . . . . 106,117 56,191 31,544 65,816 34,953 100,794 54,361 36,133 63,030 37,355 95,855 69,401 36,288 65,141 36,596 +5 +3 -1 3 +4 -6 + 11 -1 9 -1 3 +1 -4 + 11 +2 -4 +4 +7 54,519 40,463 31,100 53,430 39,773 30,474 49,800 41,635 30,152 +2 +2 +2 +9 -3 +3 +9 +5 +4 Bristol ............. Johnson City . . . Kingsport . . . . 74,788 76,830 144,769 77,814 77,925 149,059 66,870 68,207 153,264 -4 -1 -3 +12 + 13 -6 +10 + 10 +6 29,199,538 29,945,392 27,413,611r -2 +7 +7 3,561,365r 8,085,601 6,873,382r 3,971,405r l,280,262r 3,641,596r -0 -4 -3 +1 -4 -2 +8 +7 +6 +0 +4 + 11 +6 +7 +8 +4 +9 +13 Lakeland . . . . Monroe County . . O c a l a ................ St. Augustine . . St. Petersburg . . Sarasota . . . . Tampa ............. Winter Haven . . IXTH DISTRICT, Total Alabam a! . . . . 3,866,655 F l o r i d a ! ................ 8,690,342 Georgia! ............. 7,304,565 Louisiana*! . . . . 3,972,865 M ississippi*! . . . 1,325,302 Tennessee*! . . . . 4,039,809 3,904,801 9,036,827r 7,556,947r 3,949,307r 1,373,539 4,123,971 ^Estimated. 127 D i s t r i c t B u s i n e s s C o n d i t i o n s Encouraging developments prevail in the District’s economy. In June and July personal income increased twice as fast as in the four previous months. Manufacturing jobs advanced in July for the first time this year. Construction activity extended its recovery. Business loans dropped moderately in August, but banks continued to expand their investment holdings. Lower prices accompanied the harvesting of many farm products. Final June and estimated July personal income showed a strong upsurge. The June advance was the largest monthly gain since February. Reflect ing the favorable expansion was a sharp increase in retail spending spurred by strong automobile sales. However, in July, automobile sales sagged, and early indications suggest a further drop in August. July marked the first increase in manufacturing jobs in six months. The largest gains occurred in the transportation equipment, food, and primary metals industries, despite declines in these indus tries nationally. Petroleum production was stim ulated by the Middle Eastern crisis in July and August, but permitted production has been cut for September and October. Even though the in direct effects of strikes curtailed jobs in some areas, the July unemployment rate remained at 4.1 percent. A reduced volume of nonresidential building and other nonbuilding construction contracts in July slowed recovery in the construction sector. Residential contract volume held at the advanced May and June levels, but total contract volume 128 receded about 15 index points below the unusu ally strong June performance. Mortgage costs increased somewhat further, emphasized by the price reduction for FHA and VA mortgages posted by the Federal National Mortgage Asso ciation in late August. Member banks concentrated on further expan sion of investment holdings in August. Gains re sulted largely from acquisitions of U. S. Govern ment securities. Business lending by banks in major cities remained slack; and outside these cities, where lending had previously been vig orous, the pace was reduced. Time-deposit in flows, though still rapid, dropped slightly toward the end of the month. Harvesting of 1967 farm crops has reached full swing. Total marketings of Georgia-Florida fluecured tobacco exceeded last year’s. In August, prices for many crops, as well as for hogs, broilers, and eggs, declined. Higher prices for cattle, milk, and top-grade cotton were an exception to this trend. N O T E : D ata on w h ic h s ta te m e n ts are b a se d have been a d ju ste d w h e n e v e r p o s sib le to e lim in a te s e a s o n a l in flu e n c e s. MONTHLY REVIEW
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