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MONTHLY REVIEW FED ER AL RESERVE B ANK OF A T LA N T A SEPTEM BER 1968 Monthly Review, Vol. LIII, No. 9. Free subscription and additional copies available upon request to the Research Department, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. W h a t 's H a p p e n e d t o P ric e s ? Last November, an article in this Review1 point ed out that consumer prices had recently begun to rise very rapidly and that wholesale prices, too, might take off. It was stated that spending in nearly all the major sectors of the economy was very likely to increase at an accelerating rate. The outlook, in short, was one of mounting inflationary pressures. In fact, this is exactly what happened and eight months of unchecked increases in wholesale prices are now on record. Fortunately, a decline in these prices occurred in August. Although consumer prices had begun to rise at an accelerated rate in June 1967, wholesale prices did not really start a sustained upward climb until December. In both cases, a large part of the explanation for the behavior of the overall indexes lies in food prices. Wholesale prices of farm products rose 7% percent between November 1967 and July 1968, or at an annual rate of 11% percent; and wholesale prices of processed foods and feeds increased 4y2 percent, or at an annual rate of 6% percent. Consumer food prices advanced ‘“What’s Happening to Prices?”, November 1967. Digitized S E P T E Mfor B EFRASER R 1968 nearly 4 percent, or a 5.7-percent annual rate of increase. Food was not the only culprit, how ever. Industrial wholesale prices, for example, began a sustained upward movement in August 1967. Moreover, the movement of overall in dexes, as usual, conceals wide differences in the behavior of individual prices. C o n su m e r P r ic e s Each of the five main components of the con sumer price index—-food, housing, apparel and upkeep, transportation, and health and recrea tion—has contributed to the rise in the overall index. Although food prices accelerated the most, housing costs contributed more than any other category to the total increase because of the large weight of this item in household budg ets. Table I shows the annual rates of change between November 1967 and July 1968 for these five categories, together with the percentage con tribution each made to the overall rise and its weight in the index. The most slowly rising component is trans portation. Unfortunately, it is not very signifi cant in household budgets and therefore did little 119 Table I Changes in Consumer Price Index Components N o v e m b er 1 9 67-July 1968 A n n u al R ate of C hange (P e rc e n t) C om ponent All ite m s P e rc e n ta g e C o n trib u tio n to O verall R ise1 R elativ e Im p o rta n c e in D e ce m b e r 19671 (P e rc e n t) 4.71 100.0 T ra n s p o rta tio n 1.91 5.6 13.80 A pparel a n d u p k e e p 3 .9 9 9.0 10.64 H e alth a n d re c re a tio n 4.76 20.1 19.85 H o using 5.19 36.1 32 .7 9 Food 5.72 27.4 22 .5 4 100.00 'D e ta ils do n o t a d d to 100 b e c a u s e m is c e lla n e o u s ite m s a re in c lu d e d in to ta l b u t n o t in c o m p o n e n ts . to hold down the overall increase. Public trans portation costs advanced fairly rapidly, at an annual rate of 4.3 percent, but private trans portation costs (including the price of automo biles, gas, oil, repair costs, etc.) rose much more slowly—1.8 percent—largely because automobile prices changed very little. Typically, new car prices change infrequently, most often at the start of a new model year (as occurred last fall). List prices may then be shaved by dealers in the late spring and summer, as they work off inven tory in preparation for the new models. Apparel and upkeep prices did not rise appre ciably until March, but since then, their in crease has been quite rapid. The biggest gains have come in footwear. Rising prices of textiles and hides, skins and leather products, and tex tile and apparel workers’ wage increases have no doubt raised apparel manufacturers’ costs, but T H E S U S T A IN E D R A PID UPW ARD M O VEM EN T OF C O N S U M E R P R IC E S C O N T IN U ED IN T H E F IR S T S E V E N M O N TH S O F 1 9 6 8 , W ITH A L L C O M P O N EN TS C O N T R IB U T IN G TO T H E G E N E R A L IN FL A T IO N . Percent 1966 'Seaso n ally adjusted by B IS . Digitized120 for FRASER 1967 1968 the rise in retail sales since last October (sparked by rapid growth in personal income) was im portant as well. The costs of medical care and reading and recreation (annual rates of increase of 5.8 and 4.8 percent, respectively) provided the major impetus for the substantial rise in the health and recreation category. Personal care (dry cleaning, barber, and beauty shops, etc.) also became more expensive. The prices of other goods and services as a group (tobacco, alcoholic bev erages, and funeral, legal, and bank service charges) advanced somewhat more slowly. Two items, homeownership and household furnishings and operating expense, bulk very large in total housing costs. Rising mortgage interest rates, property taxes, home insurance rates, and home repair costs have driven up the cost of home ownership at a 7.3-percent annual rate. Household furnishings and operation ex penses have risen at a 5.2-percent rate. Very small increases in gas and electricity prices (0.7-percent annual rate) and rent (2.5 per cent) were not able to prevent an advance in total housing costs of 5.2 percent. Food price rises showed considerable disper sion, with meat, poultry, and fish going up at a 3.5-percent annual rate, dairy products at a 4.1percent rate, and fruits and vegetables at an astonishing 19.9-percent rate. The movement in this last category is partly seasonal, but to a large extent reflects poor weather conditions last winter and spring in Florida, south Texas, and Mexico. The composition of the consumer’s “market basket” can be arranged another way; that is, divided into services and commodities. From this angle, it is apparent that services have been a major element in the jump in the cost of living. Service prices, on average, rose at a 5.7percent annual rate from November 1967 to June 1968. Food prices climbed at a 5.2-percent rate, while prices of nonfood commodities ad vanced at a rate of only 2.9 percent. It is not un usual for service prices to increase faster than others. Thus, in the most recent period of rea sonable price stability, 1961-64, when the overall index was advancing at a rate of about 1.2 per cent a year, service prices went up at a 1.9-per cent rate. Actually, commodity prices have risen more rapidly, relative to service prices, since November 1967, than they did in 1961-64. But this result is not surprising, considering that wholesale prices, which have no direct effect on services but do on consumer commodities, have been rising recently, whereas they were quite stable in the earlier period. M O N TH LY R E V IE W W h o le s a le P r ic e s FARM AND FOOD P R IC E IN C R E A S E S HAVE A LSO C O N T R IB U T E D S IG N IF IC A N T L Y TO T H E R IS E IN T H E W H O L E S A L E P R IC E IN D EX . IN D U S T R IA L P R IC E S , A F T E R N IN E M O N TH S O F R A PID R IS E , HAVE L E V E L E D O FF R E C E N T L Y . The wholesale price index has three main com ponents: farm products, processed foods and feeds, and industrial commodities. The indus trial commodities category is divided into 13 principal subcomponents. There is wide diver sity in the behavior of these categories, as can be seen in Table II. Again, it is clear that the sharp rises in food prices (which constitute the bulk of the farm products and processed foods and feeds cate gories) have contributed to the overall index far out of proportion to their weights.2 In particular, fruits and vegetables, live poultry, livestock, dairy products, and meat, poultry, and fish prod ucts have been the biggest contributors. Live poultry price rises seem to be almost wholly a seasonal recovery from unusually depressed levels. Livestock and meat prices have risen in response to a cutback in production of feeder cattle, which in turn was a response to low prices in 1967. Among industrial commodities, textile prod ucts and apparel, metals and products, machin ery and equipment, and lumber and wood prod ucts have contributed most to advancing whole- Parcant 110 110 105 110 105 105 115 115 105 105 95 95 1966 1967 1966 sale prices. The first three bear heavy weights; the last recorded very large price increases. If we had looked at the situation in March or April, metals prices would have shown a much more rapid rate of increase. This was because the long continued copper strike in this country reduced supplies of this metal to abnormally low levels and and forced reliance on higherpriced imports. Steel prices also firmed during the inventory build-up in anticipation of a steel ^The weights in the wholesale price index are based on the net selling value of commodities produced, processed, or imported into the U.S., as revealed in the industrial cen suses. For more detail, see “What’s Happening to Prices?”, Monthly Review, November 1967. Table II Changes in Wholesale Price Index Components N o v e m b er 1967-July 1968 C om ponent A n n u al R ate of C h an g e (P e rc e n t) P e rc e n ta g e C o n trib u tio n All c o m m o d itie s N o v e m b er 1967-A ugust 1968 (p relim in ary ) A nnual R ate of C h an g e (P e rc e n t) P e rc e n ta g e C o n trib u tio n R elativ e Im p o rta n c e (P e rc e n t) 4.10 100.0 3.13 100.0 100.000 11.67 29.6 7.05 23.6 10.637 P ro c e s s e d fo o d s a n d fe e d s 6.77 26.7 4.81 25.1 16.533 In d u s tria l c o m m o d itie s 2 .5 2 43.7 2.24 51.3 72.830 T e x tile p ro d u c ts a n d a p p a re l 4.08 6.9 7.149 H id es, s k in s, a n d le a th e r p ro d u c ts 5.33 1.6 1.264 F u e ls a n d re la te d p ro d u c ts a n d p ow er 0 .7 4 1.3 7.130 C h e m ic a ls a n d a llie d p ro d u c ts 0.00 0.0 6.378 R u b b e r a n d p ro d u c ts 2 .4 2 1.4 2 .339 17.58 10.2 2.418 0.44 0.5 4.877 F arm p ro d u c ts L u m b er a n d w ood p ro d u c ts P u lp , p a p e r, a n d a llie d p ro d u c ts M eta ls a n d p ro d u c ts 1.22 3.7 12.799 M ac h in e ry a n d e q u ip m e n t 3.47 10.0 12.110 F u rn itu re a n d h o u s e h o ld d u ra b le s 3 .0 9 2.6 3 .5 8 4 N o n m e ta llic m in e ra l p ro d u c ts 4.71 3 .4 3.040 T ra n s p o rta tio n e q u ip m e n t n.a. n .a. 7 .244 M isc e lla n e o u s 1.22 0.7 2.498 n .a. N ot a v a ila b le . Digitized forBER FRASER SEPTEM 1968 121 strike. Settlement of the copper strike produced a sharp price reversal, and steel prices had begun to soften even before a no-strike agreement was reached in that industry at the end of July. Re cently, however, most steel companies have an nounced price increases. Machinery and equipment prices have risen strongly almost across the board, but the biggest increases have come in construction machinery and equipment. Lumber and wood prices have risen phenomenally, at nearly a 17-percent an nual rate, partly because of a reduced supply of logs, stemming from drought last summer and a six-month strike in western Canada, and partly because of continued strong demand for lumber in housing construction. Elsewhere, hides and skins, leather products, furniture, prepared paint, and paper prices have advanced strongly. On the other hand, some prices have hardly changed, while others experienced actual declines. Tire and tube prices did not change at all after the increase announced last fall at the beginning of the new car season. In July, however, two companies announced price increases ranging from 3 percent to 5 percent. Industrial chemicals, drugs and pharmaceuticals, and home electronic equipment prices all declined slightly. Competi tion from imports no doubt played a role here. Gas fuels prices, however, fell at nearly a 14percent annual rate because of very rapid growth in production capacity for liquefied propane gas and a general world over-supply of residual fuels. The Outlook Prospects are good that both consumer and T H E B E H A V IO R OF M E T A L S AND L U M B E R AND WOOD P R O D U C T S P R IC E S IS P R IM A R IL Y T H E R E S U L T OF S T R IK E S AND S P E C IA L S U P P L Y C O N D I T IO N S , W H IL E T E X T IL E AND A P P A R E L P R IC E S HAVE R E S P O N D E D TO DEM AND F O R C E S AND C H E M IC A L P R IC E S HAVE R E M A IN E D Q U IT E S T A B L E . ____ P e rc e n t 120 110 100 105 95 1966 122 1967 1968 T H E P R IC E O F N O N F E R R O U S M E T A L S C U R V E D W ITH T H E C O P P E R S T R IK E AND IT S S E T T L E M E N T . P R IC E S FO R H E A T IN G E Q U IP M E N T R O S E . P e rc e n t wholesale prices will have slowed their rates of increase before the end of the year, but they will not have stopped. The extraordinary gain in food prices, which has fueled much of the inflation since last No vember, should top out soon. Indeed, consumer food prices, seasonally adjusted, declined slightly in June, although they jumped back up in July. But wholesale prices of both farm products and processed foods and feeds fell substantially in August. Harvests of vegetables in the northern growing areas and in California are expected to be above last year’s levels, resulting in abundant supplies in August and September. Larger mar ketings of cattle and greater shipments to feeder lots should satisfy a continued strong consumer demand at fairly stable prices. Poultry and egg prices may continue to rise from the unusually depressed levels that have discouraged many producers, but the pace of advance should slow. More generally, the passage of the tax bill will tend to bank the inflationary fires both because it will dampen the growth of consumers and corporations’ spendable income and because, under the terms of the bill, Federal government expenditures must be reduced below budgeted figures. The impact of the fiscal action should be greatest in those areas in which price pres sures have come mainly from rapidly grow ing demand rather than from restrictions of sup ply. Services and luxury goods most nearly fit this description. There are, however, no grounds for unbridled optimism. Wholesale industrial prices have gone, on average, practically nowhere since April; and with food prices probably due to level off, more M O N T H L Y R E V IE W or less, one might think that the wholesale price index would display considerable stability. But this would be to reckon without the lagged ef fect of prior price increases on wage demands and therefore on industrial costs. Union contracts are made for one, two, or three years. It some times happens that wage raises negotiated many months ago are outrun by advances in the cost of living; current negotiations, then, are designed to provide, not only for rises that would have been demanded in the absence of inflation, but for compensation for additional increases in the cost of living that have already occurred. The extent to which business management is willing to resist wage demands or, having granted them, is able to pass them on in the form of S E P Tfor E M FRASER B E R 1968 Digitized higher prices, depends largely on how actively consumers respond to price increases. The more slowly disposable income grows, the greater con sumer reaction, other things being equal. With rather restrictive fiscal policies, disposable in come—and therefore consumer spending—will undoubtedly grow more slowly in the second half of 1968 than it did in the first. But it is not to be expected that the change will be sufficient to stop inflation in its tracks. Recently, we have seen price rise announce ments hard on the heels of wage increases in both textiles and steel. There may be other, sim ilar cases. Inflation has a momentum that is hard to stop. But at least the brakes are on. L aw ren ce F. M a n sfie l d 123 Tennessee P a in ts A n A b s tra c t Pictures come in different sizes, shapes, and col ors. Pictures of economic conditions come in different degrees, directions, and frequencies. Tennessee has painted a bright economic picture for most of this decade. Although the picture dulled somewhat in 1967, it has taken on a slightly brighter hue this year. Income is probably one of the more glowing features of Tennessee’s economy. In terms of personal income, the state has increased at a seasonally adjusted annual rate of 23.3 percent from the end of 1967 through June, according to Bank estimates. The total gain for 1967 was 5.6 percent. The largest advances this year occurred in the first two months and were associated with more than seasonal changes in many sectors. The picture appears slightly different from the standpoint of employment. The seasonally ad justed annual rate of increase in total nonfarm jobs differed little from full year 1967. But a comparison of the first six months of 1968 with the same timespan of 1967 reveals wide variations in employment changes from industry to indus try and area to area. Overall, manufacturing jobs have improved in both the durable and nondurable areas. All of the major durable goods industries are faring better this year than during the comparable period last year except the combination of precision instru ments and ordnance. Employers in furniture and Digitized 124 for FRASER fixtures and fabricated metals have added work ers, thus making up for last year’s losses. Jobs in the electrical machinery industry declined less, percentagewise. Totals for nondurables showed an increase this year, compared with a decrease for last year. A look at some of the subsectors reveals less job gains in food products but an increase in ap parel jobs, compared with no change for the first six months of 1967. Employment in textile mills is advancing after suffering a loss last year, and chemicals are decreasing less. The three largest state employers—govern ment, retail trade, and services—are in non manufacturing. Both government and services have increased less than during the same 1967 period. Jobs in retail trade have declined more. Of the Standard Metropolitan Statistical Areas (SMSA’s) in Tennessee, Knoxville, Memphis, and Nashville have shared gains in nonagricul tural employment during the first half of 1968. Chattanooga is the only SMSA exhibiting a de cline, but it is less than that of the same period last year. In Chattanooga government and pri mary metals have played large roles in the drop, while construction has increased substantially. The construction sector has displayed significant strength in the state as a whole. Agriculture, on the other hand, has been a little less rosy. Total farm cash receipts (un M O N T H L Y R E V IE W adjusted for seasonal changes) from the end of 1967 through May 1968 were down slightly from the corresponding period last year. The break down of total farm cash receipts shows receipts for crops down and livestock up. The gain in livestock can be attributed mainly to price increases. The prices for milk, eggs, broilers, cattle, and calves have remained at, or above, last year’s levels, while the price of hogs has declined. The decrease in crops can also be explained by prices. Compared with the first half of last year, the prices of cottonseed, com, and soybeans were down. The price for cotton was lower than during the last few months of 1967 when it was above normal. The picture in banking is also quite mixed. The banking situation varies with location and depends on whether or not one looks at season ally adjusted figures. In the District portion of Tennessee seasonally adjusted loans at member banks are up considerably this year, whereas growth in deposits has been slightly less. Com paring each trad e and banking area (T&BA) within the District portion of the state during the first seven months of this year with the same period last year shows a different and very mixed picture. In the Chattanooga Trade and Banking Area, demand deposits (other than bank) have increased more this year and time deposits have increased less, while loans have increased more. In Knoxville (T&BA) demand deposits have increased, time deposits have gained less, and loans have remained the same. In Nashville (T&BA) demand deposits have dropped, time deposits have advanced less, and TENNESSEE PAINTS AN ABSTRACT IN EMPLOYMENT P ercentage C hange Dec. 1966Dec. 1967 Farm Nonfarm M anufacturing N onm anufacturing Annual Rate Through Ju n e 1968 -2 1 .1 - 2 5 .4 1.5 1.4 1.4 1.5 0 1.4 IN INCOME P ercentage Change Personal Income Dec. 1966Dec. 1967 Annual Rate Through May 1968 5.6 23.3 IN BANKING P ercentage Change Dec. 1966Dec. 1967 Annual Rate Through July 1968 M ember Bank Loans* 7.3 18.3 M ember Bank Deposits* 8.2 7.7 *For Sixth D istrict area only. O ther figures a re for en tire state. Seasonally ad ju sted d ata. Sources: T ennessee D epartm ent of Em ployment and Federal Reserve Bank of Atlanta. loans have risen more. In Tri-Cities (T&BA) demand deposits and loans have decreased less, but time deposits have increased more. Thus, the banking picture is abstract, as is that of the state’s economy. Whether the abstract will re main depends heavily on national developments. C. W i l l i a m S c h l e i c h e r , J r. This is one of a series of articles in which economic developments in each of the Sixth District states are discussed. B a n k A n n o u n c e m e n ts The State Bank of Arlington, Jacksonville, Florida, a newly organized nonmember bank, opened on August 9 and began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers are R. H. Norton, president; W. H. Doeschler, vice president; and Mrs. Laverne A. Thomas, cashier. Capital is $250,000; surplus and other capital funds, $150,000. The First Bank of Deltona, Deltona, Florida, opened on August 15 as a newly organized nonmember bank and Digitized S E P Tfor E M FRASER B E R 1968 began to remit at par. Officers are Charles S. John son, president; Neil E. Bahr, vice president; and Dewey Kern, cashier. Capital is $280,000; surplus and other capital funds, $120,000. The Bank of Griffin, Griffin, Georgia, also a newly organized nonmember bank, opened on August 25 and began to remit at par. J. L. Savage is president, and A. M. Stewart, cashier. Capital is $250,000; surplus and other capital funds, $250,000. 125 S ix t h D is tric t S ta tis tic s Seasonally Adjusted (All data are indexes, 1957-59 = IOO, unless indicated otherwise.) Latest Month (1968) One Two Monthi Months Ago Ago One Year Ago SIXTH DISTRICT Latest Month (1968) One Two Month Months Ago Ago One Year Ago July July July July 163 159 110 84 164 157 108 91 160 156 107 88 159 152 104 83 (Percent of Work Force) . . . . . July Avg. Weekly Hrs. in Mfg. (Hrs.) . . -. July 2.9 41.4 2.8 41.9 2.6 41.5 3.1 42.3 303 234 232 295 227 241 289 223 222 270 202 197 ....................... Manufacturing N on m an u factu rin g.................... INCOME AND SPEN DIN G Personal Income (Mil. $, Annual Rate) . June 65,623 64,771r 64,01 lr 60,091 Manufacturing P a y r o lls .................... July 229 229 224 205 Farm Cash R e c e ip t s ....................... June 121 148 166 135 C r o p s ....................................... - June 193 184 170 152 L iv e sto c k ...................................., June 149 154 154 151 Instalment Credit at Banks* (Mil. $) New Loans ................................ , July 317 316 327 315 281 Repayments ............................. . July 278 270 319 170 183r 180 168 Retail S a l e s ............................. Farm E m p loy m e n t....................... . . . . FINANCE AND BANKING Member Bank L o a n s ........................ July Member Bank D e p o s it s ................ .. . July Bank D e b its * * .............................. . July PRODUCTION AND EM PLOYM ENT 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 July Paper ....................................... , July Primary M e t a l s .......................... , June Textiles ..................................... July Transportation Equipment . . . ,. July N o nm anufacturing.......................... , July C o n s t r u c t io n ............................. . July Farm E m p lo y m e n t.......................... July Unemployment Rate (Percent of Work F o r c e ) ............. July 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............................. .. . July All O t h e r .................................... July Electric Power Production** . . . ., June Cotton C o n s u m p tio n * * ................... . July Petrol. Prod, in Coastal La. and Miss.* * Aug. 141 140 172 136 158 114 105 123 125 110 182 142 127 66 141 140 172 134 159 116 104 123 126 110 185 141 127 62 141 140 172 133 156 114 104 122 131 109 181 141 129 62 138 137 170 130 153 114 104 120 130 107 185 138 120 68 3.8 3.9 3.7 4.1 1.9 41.1 197 213 183 150 131 233 1.8 41.3 194 202 187 153 107 230 1.8 41.1 207 240 180 151 107 225 2.5 40.7 166 193 144 145 110 270 FINANCE AND BA NKING All Member B a n k s ....................... July Large B a n k s ............................. . July Deposits* All Member B a n k s ....................... July Large B a n k s ............................. July Bank D e b its * / * * ............................. July 282 249 276 242 273 241 256 228 214 186 235 208 178 238 208 181 223 193 174 208 8,454r 198 132 8,400r 199 144 127 125 127 115 74 126 125 126 114 64 127 128 126 115 66 126 125 126 116 82 4.5 41.7 4.8 41.7 4.6 40.7 4.3 40.7 260 205 219 256 197 213 251 199 202 238 187 200 ALABAMA INCOME Personal Income (Mil. $, Annual Rate) . June Manufacturing P a y r o lls .................... July Farm Cash R e c e ip t s ....................... June 8,505 200 150 7,952 180 151 PRODUCTION AND EM PLOYM ENT Nonfarm E m p lo y m e n t .................... July Manufacturing .......................... , July N o nm an ufacturin g......................., July C o n s t r u c t io 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 FLORIDA INCOME Personal Income (Mil. $, Annual Rate) . June 19,118 Manufacturing P a y r o lls .................... July 287 Farm Cash R e c e ip t s ....................... June 180 18,697r 18,274r 17,085 277 261 286 188 165 175 PRODUCTION AND EM PLOYM ENT Nonfarm E m p lo y m e n t .................... July 126 INCOM E Personal Income (Mil. $, Annual Rate) . June 12,782 234 Manufacturing P a y r o lls................ . July 159 Farm Cash R e c e ip t s .................... . June 12,638r 12,507r 11,668 308 234 229 152 151 145 PRODUCTION AND EMPLOYMENT July July July July July 142 136 146 144 58 142 135 145 145 52 141 134 144 143 52 138 134 140 135 63 . July ,. July 3.4 41.2 3.9 41.1 3.3 40.8 3.5 40.4 Member Bank L o a n s .................... . July Member Bank D e p o s it s................ . July Bank D e b its * * .............................. July 292 231 267 288 225 274 284 227 251 263 210 235 9,950r 203 155 9,956r 201 170 Nonfarm E m p lo y m e n t ................ Manufacturing ....................... N o n m an u factu rin g.................... C o n s t r u c t io n ....................... Farm E m p loy m e n t....................... Unemployment Rate (Percent of Work Force) . . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . . . . . . FINANCE AND BA NKING LOUISIANA INCOM E Personal Income (Mil. $, Annual Rate) . June Manufacturing P a y r o lls................ . July Farm Cash R e c e ip t s .................... . June 9,936 198 154 9,231 189 155 PRODUCTION AND EM PLOYM ENT Nonfarm E m p lo y m e n t ................ Manufacturing ....................... N o n m an ufactu 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.) . . . . . . . July July July July July 131 121 133 137 61 130 122 132 138 62 131 121 133 149 64 128 118 130 121 64 . July . July 4.9 41.8 4.9 42.4 4.7 42.6 5.5 42.6 . July . July . July 239 174 193 233 170 192 232 169 182 234 164 184 5,042r 265 153 5,014r 260 146 FINANCE AND BAN KING Member Bank L o a n s * ................ Member Bank D e p o s i t s * ............. Bank D e b it s * / * * .......................... M IS S IS S IP P I INCO M E Personal Income (Mil. $, Annual Rate) . June Manufacturing P a y r o lls................ . July Farm Cash R e c e ip t s ...................... . June 5,140 267 189 4,768 225 210 PRODUCTION AND EM PLOYM EN T FINANCE AND BAN KING Member Bank L o a n s ....................... July Member Bank D e p o s i t s ................ . July Bank Debits** ............................. July GEORGIA 159 158 156 153 Nonfarm E m p lo y m e n t ................ Manufacturing ....................... N o 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....................... Unemployment Rate (Percent of Work Force) . . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . . July July July July July 143 151 140 136 62 142 152 138 134 53 142 151 138 141 49 140 146 137 140 58 ,. July ,. July 4.5 41.1 4.8 41.2 4.7 40.8 5.3 39.9 . July . July . July 339 244 248 328 239 235 327 240 211 309 232 202 . . . . . FINANCE AND BAN KING Member Bank L o a n s * ................ Member Bank D e p o s it s * ............. Bank D e b it s * / * * .......................... M O N T H L Y R E V IE W Latest Month (1968) One Month Ago Two Months Ago One Year Ago Latest Month (1968) T E N N ES SEE N o n m an u factu rin g................ C o n s t r u c t io n .................... Farm E m ploy m en t.................... Unemployment Rate (Percent of Work Force) . . . Avg. Weekly Hrs. in Mfg. (Hrs.) . INCO M E Personal Income (Mil. $, Ann. Rate) June 10,142 Manufacturing P a y r o lls ................ . July 217 Farm Cash R e c e ip t s .................... . June 147 9,990r 219 124 9,860r 216 131 9,387 193 141 One Month Ago Two Months Ago One Year Ago . . July . . July . . July 133 155 64 134 161 62 134 164 66 132 153 69 . . July . . July 3.9 40.1 3.8 40.6 3.6 40.7 4.5 39.7 Member Bank L o a n s * ............. . . July Member Bank Deposits* . . . . . . July Bank D e b i t s * / * * .................... 276 193 251 272 191 253 271 194 252 246 187 231 FINANCE AND BANKING PRODUCTION AND EMPLOYMENT Nonfarm E m p lo y m e n t ................ Manufacturing ....................... . July . July 137 146 139 148 139 140 *For Sixth District area only. Other totals for entire six states. 138 137 **Daily average basis. r-Revised. p-Preliminary estimate. D e b its to D e m a n d D e p o s it A c c o u n ts Insured Commercial Banks in the Sixth District (In Thousands of Dollars) July 1968 June 1968 July 1967 Percent Change Percent Change Year-to-Date 7 months July 1968 from 1968 June July from 1968 1967 1967 Year-to-Date 7 months July 1968 from 1968 June July from 1968 1967 1967 STAN DARD METROPOLITAN STATISTICAL A R EA Sf Birmingham . . . . Gadsden ............. Huntsville . . . . Mobile ............. Montgomery . . . Tuscaloosa . . . . 1,851,431 68,399 198,356 548,876 354,520 111,948 1,628,938 66,728 182,980 494,140 293,039 97,071 l,540,886r 57,809 176,276 490,263 282,629 97,380 + 14 +3 +8 +11 +21 + 15 +20 + 18 + 13 +12 +25 + 15 +9 +9 +5 + 10 +12 +9 Ft. Lauderdale— 793,654 Hollywood . . . Jacksonville . . . . 1,712,873 M i a m i ................ . 2,985,304 731,518 O r l a n d o ............. Pensacola . . . . 225,062 158,217 Tallahassee . . . Tampa— St. Petersburg . . 1,632,781 505,513 W. Palm Beach . . 775,910 1,556,183 2,767,338 611,588 207,983 150,213 602,758 1,385,776 2,159,795 543,296 192,544 138,785 +2 +10 +8 +20 +8 +5 +32 +24 +38 +35 + 17 +14 +23 +9 +25 + 17 +9 + 11 1,461,115 485,686 1,326,006 376,481 + 12 +4 +23 +34 + 19 +21 ............. 105,822 Albany Atlanta ............. . 6,177,709 326,621 A u g u s t a ............. 269,242 Columbus . . . . Macon ............. 287,017 333,257 Savannah . . . . 97,782 5,530,541 295,369 235,089 261,417 281,397 84,382 4,740,804r 284,733 207,550 244,073 258,680 +8 + 12 + 11 + 15 + 10 + 18 +25 +30 + 15 +30 + 18 +29 + 15 + 15 + 10 + 14 + 12 +13 678,904 . . 144,868 . . 177,104 . . . . . 2,668,445 610,404 132,758 141,977 2,389,935 523,088 126,595 147,250 2,374,956 + 11 +9 +25 + 12 +30 + 14 +20 + 12 +12 +13 + 10 +6 Baton Rouge Lafayette . Lake Charles New Orleans . . . . 701,776 663,706 568,504 +6 +23 +11 695,729 547,073 1,954,351 624,345 482,369 1,707,472 571,171 445,659 1,535,269 +11 + 13 +14 +22 +23 +27 +10 +11 + 14 Anniston . . . . Dothan ............. S e l m a ................ 75,833 73,424 45,862 70,059 63,598 45,777 62,489 55,861 44,712 +8 + 15 +0 +21 +31 +3 + 14 +12 +6 ............. Bartow Bradenton . . . . Brevard County . . Daytona Beach . . Ft. Myers— N. Ft. Myers . . Gainesville . . . . 36,333 94,032 242,472 112,601 34,265 74,306 230,704 91,129 32,386 73,953 221,452 93,540 +6 +27 +5 +24 + 12 +27 +9 +20 -1 + 16 +8 +9 94,363 104,511 95,091 94,124 75,254 74,639 -1 +11 +25 +40 +30 +18 Jackson ............. Chattanooga . . . Knoxville . . . . Nashville . . . . . )THER CEN T ERS S E P T E M B E R 1968 July 1968 June 1968 July 1967 Lakeland . . . . Monroe County . . O c a l a ................ St. Augustine . . St. Petersburg . . S a r a s o t a ............. Tampa ............. Winter Haven . . 152,281 39,025 68,149 26,310 379,961 152,778 854,300 69,291 118,870 36,593 60,658 22,267 322,810 109,941 r 779,164 65,886 123,027 32,089 56,128 21,798 310,438r 101,273 685,195 54,014 +28 +7 +12 +18 + 18 +39 +10 +72 +24 +22 +21 +21 +22 +51 +25 +28 +8 +9 +11 +11 +5 +28 +23 +25 Brunswick . . . . Dalton ............. E lb e r t o n ............. Gainesville . . . . G r i f f i n ................ LaGrange . . . . N e w n a n ............. R o m e ................ V a ld o s t a ............. 95,030 53,475 106,425 16,290 83,231 38,332 26,320 25,240 89,603 60,949 84,794 44,177 100,488 15,098 68,325 35,181 22,832 25,171 77,051 62,765 73,804 43,879 76,871 14,269 71,210 34,264 20,766 24,778 68,016 53,327 + 12 +21 +6 +8 +22 +9 + 15 +0 +16 -3 +29 +22 +38 + 14 + 17 + 12 +27 +2 +32 +14 +19 +13 +27 -4 +1 +7 +3 +6 + 13 +10 Abbeville . . . . Alexandria . . . . Bunkie ............. Hammond . . . . New Iberia . . . . Plaquemine . . . Thibodaux . . . . 12,275 153,312 7,536 43,926 41,124 14,137 26,148 11,414 141,819 6,267 35,653 33,053 11,941 22,312 11,197 127,738 7,105 38,086 35,185 11,369 22,032 +8 +8 +20 +23 +24 + 18 +17 +10 +20 +6 +15 +17 +24 +19 +8 +7 +3 +2 +6 +22 +8 Biloxi-Gulfport . . Hattiesburg . . . L a u r e l ................ Meridian . . . . N a t c h e z ............. Pascagoula— M oss Point . . Vicksburg . . . . Yazoo City . . . . 137,905 66,457 45,604 72,578 48,224 108,011 61,906 37,933 66,384 36,422 106,117 56,191 31,544 65,816 34,953 +28 +7 +20 +9 +32 +30 +18 +45 +10 +38 +15 +11 +20 +5 +10 72,020 44,914 32,360 60,774 38,529 29,736 54,519 40,463 31,100 +19 +17 +9 +32 +11 +4 +21 +5 +6 Bristol ............. Johnson City . . . Kingsport . . . . 84,881 91,096 180,337 77,529 77,952 148,708 74,788 76,830 144,769 +9 +17 +21 +13 +19 +25 +24 +8 +11 XTH DISTRICT, Total 36,650,697 33,069,072 29,450,131r +11 +24 +14 Alabama^ . . . . F l o r i d a ^ ............. G eorgia:):............. Louisiana*f . . . M ississippi*t . . . Tennessee*t . . . 4,631,509 11,179,400 9,634,720 4,582,026 1,792,291 4,830,751 4,120,519 10,419,807 8,652,483 4,102,433 1,443,927 4,329,933r +20 +29 +27 +15 +35 +20 +12 +18 +14 +8 +13 +12 3,865,263 8,661,157r 7,585,735r 3,792,865 1,325,302 4,039,809 + 12 +7 + 11 +12 +24 +12 127 D is t ric t B u s in e s s C o n d it io n s T h e b u r g e o n in g D is t r ic t e c o n o m y s h o w s little s i g n s o f s u m m e r d o ld r u m s . In J u ly c o n s u m e r s p e n d in g sp u rte d u p w a rd c o n c o m it a n t ly w ith d e p o s it s a n d lo a n s a t D is t r ic t b a n k s . A d ro p in th e u n e m p lo y m e n t rate a n d a m a rk e d in c r e a se in n o n m a n u f a c t u r in g j o b s c o u n t e r b a la n c e d s o m e fa ll-o ff in m a n u f a c t u r in g jo b s. T h e c o n s tr u c t io n a n d a g r ic u lt u r a l s e c t o r s r e m a in e d stro n g , a s b u ild in g a c tiv ity a n d a g r ic u lt u r a l c a s h r e c e ip ts c o n tin u e d c lim b in g . R e ta il s a le s ro se s h a r p ly in July, w ith a u to m o b ile s a le s e s p e c ia lly h ig h , even a s w it h h o ld in g s u n d e r th e new su r ta x in c r e a s e d d u r in g the latter p art o f the m o n th . New instalment loans at Dis trict banks also rose substantially from the June level, sparked by advances in automobile loans and credit-card and check-credit loans. N o n m a n u f a c t u r in g e m p lo y m e n t c o n tin u e d its u p tre n d in July, a c c o m p a n ie d by a m o d e ra te d e c lin e in the u n e m p lo y m e n t rate. The automobile model changeover and the near-term steel con tract deadline were primarily responsible for the decline in manufacturing jobs and the average workweek. Crude petroleum production increased in August, but allowable production has been lowered for September. D e p o s it s ro se s u b s t a n t ia lly in A u g u s t , w ith la rge d e n o m in a tio n c e r tific a te s o f d e p o s it a c c o u n t in g Business loans were stronger than usual for August, despite a sharp drop in the final week of the month. Consumer and real estate loans also increased. Investment portfolios declined, as banks reduced their holdings of Government and other securi ties. The discount rate of the Federal Reserve fo r m o s t o f the gro w th a t la rge b a n k s . 128 Bank of Atlanta was lowered from 5J/2 to 5^4 percent, effective August 30, 1968. T h ro u g h th e first s ix m o n t h s o f 1 9 6 8 c a s h re c e ip t s fro m fa r m m a r k e t in g s w ere w ell a b o v e yeara g o le v e ls, r e fle c tin g str e n g th in bo th liv e s to c k s e c to r s. Income from current c ro p and flue-cured tobacco sales in Florida and Georgia lag behind 1967 receipts, however. The August 1 estimates of 1968 crop production indicate that corn and peanuts output will drop below 1967 levels, but increased acreages of soybeans, rice, cotton and burley tobacco will enhance production gains. Prices for most crops continue below year-earlier levels, with the expectation of higher livestock prices. A h ig h level o f a c t iv it y in r e s id e n tia l b u ild in g , w h ic h h a s b o o ste d the c o n s t r u c t io n s e c t o r in the first h a lf o f 1 9 6 8 , sh o w e d n o s i g n s o f s lo w in g in July. Apartment building has boomed, particular ly in the Miami-Fort Lauderdale-Hollywood area. N onresidential construction rem ains robust throughout the District except for Mississippi. NOTE: D ata on w h ic h s ta t e m e n ts a re b a s e d h a v e b e e n a d ju s te d w h e n e v e r p o s s ib le to e lim in a te s e a s o n a l in flu e n c e s. M O N T H L Y R E V IE W
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