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Confidential (FR) Class III FOMC May 3, 2002 CURRENT ECONOMIC AND FINANCIAL CONDITIONS Supplemental Notes Prepared for the Federal Open Market Committee by the staff of the Board of Governors of the Federal Reserve System Contents Domestic Nonfinancial Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Labor Market Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Sales of Light Motor Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Manufacturer’s Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 House Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Tables Changes in Employment . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Selected Unemployment and Labor Force Participation Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Average Hourly Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Sales of Automobiles and Light Trucks . . . . . . . . . . . . . . . 6 Change in Manufacturing Inventories . . . . . . . . . . . . . . . . 8 Manufacturers’ Inventory-Shipments Ratios . . . . . . . . . . . 9 Equipment and Software Spending Indicators . . . . . . . . . 10 Chart Private Payroll Employment Growth . . . . . . . . . . . . . . . . . 2 Aggregate Hours of Production or Nonsupervisory Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Labor Force Participation Rate and Unemployment Rate . 3 Job Losers Unemployed for Less than 5 Weeks . . . . . . . . 3 Average Hourly Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Sales of Light Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Total Value of Incentives as a Share of Average Vehicle Price before Incentives . . . . . . . . . . . . . . . . . . . . . . 6 Fleet Sales of Light Vehicles . . . . . . . . . . . . . . . . . . . . . . 10 Net New Orders of Trucks . . . . . . . . . . . . . . . . . . . . . . . . 10 Recent Data on Orders and Shipments . . . . . . . . . . . . . . 11 Real House Price Indexes . . . . . . . . . . . . . . . . . . . . . . . . 12 Repeat Sales, Real Prices by Region . . . . . . . . . . . . . . . . 12 The Domestic Financial Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Tables Net Flows into Long-Term Mutual Funds . . . . . . . . . . . . 13 Commercial Bank Credit . . . . . . . . . . . . . . . . . . . . . . . . . 14 Selected Financial Market Quotations . . . . . . . . . . . . . . . 15 Chart Household Assets Relative to Disposable Income . . . . . . 13 Supplemental Notes The Domestic Nonfinancial Economy Labor Market Developments Although revised figures now indicate that employment was still contracting in March, rather than having turned up as indicated previously, the report for April shows some signs of improvement. Employment on private nonfarm payrolls posted a net gain of 41,000 in April; more industries added jobs last month than cut them, with the one-month diffusion index edging above 50 for the first time since March 2001. However, the average workweek declined a bit in April, leaving the index of aggregate hours of production or nonsupervisory workers just below the first-quarter average. Employment in the help-supply industry rose 66,000 in April, the second month in a row in which this industry has posted such a large gain. The strength of the help-supply industry is closely linked to demand for workers in the manufacturing sector to which it provides many workers. The job loss in manufacturing slowed further in April; the decline of only 19,000 was the smallest since the fall of 2000. Within manufacturing, fabricated metals and industrial machinery—two of the industries hardest hit in this downturn—reported their first solid gains in more than a year; employment in the electrical equipment industry was unchanged, after having declined in each month since December 2000. Transportation equipment, however, lost another 10,000 jobs, in part because of continued cutbacks in the aircraft industry. Elsewhere in the economy, services industries excluding help-supply added jobs for the second month in a row. The rise reflected a noticeable gain in engineering and management services and a further rise in employment in health services; these increases were offset in part by another drop in jobs in amusement and recreation services as firms appeared to cut back their usual spring hiring. Other industries increasing their payrolls included retail trade (23,000), led by increases in eating and drinking establishments, and finance, insurance, and real estate (18,000). On the downside, the construction industry posted its second large monthly decline (-79,000 on a seasonally adjusted basis) as hiring once again fell short of the seasonal norm. Losses were widespread, but were particularly large in special trade contractors, which shed 61,000 jobs. The average workweek of production or nonsupervisory workers on nonfarm payrolls ticked down 0.1 hour in April to 34.1 hours. However, the manufacturing workweek held steady at 41.0 hours, and factory overtime edged up further. Aggregate hours of production or nonsupervisory workers fell 0.2 percent in April, leaving the level of aggregate hours a shade below percent below the average last quarter. -2CHANGES IN EMPLOYMENT (Thousands of employees; based on seasonally adjusted data) 2000 2001 Q4 2001 2002 Q1 Feb. 2002 Mar. Apr. Nonfarm payroll employment1 Previous Private Mining Manufacturing Construction Transportation and utilities Retail trade Wholesale trade Finance, insurance, real estate Services Help supply services Total government --Average monthly change-167 -87 -303 -45 167 -87 -303 -18 149 -124 -330 -64 1 1 -2 -3 -12 -109 -136 -69 18 5 -7 -25 14 -16 -52 -11 26 -3 -57 29 8 -11 -17 -9 0 4 -0 -5 93 5 -59 31 -2 -43 -71 19 18 37 27 19 -4 -2 -19 -5 -54 28 -3 58 -16 -12 -15 10 15 -21 58 -55 -4 -38 -41 -14 -14 -6 -10 72 60 34 41 7 -19 -79 5 23 -1 18 87 66 2 Total employment (household survey) Nonagricultural 115 119 -153 -154 -316 -338 -54 -14 851 878 -425 -305 82 55 Memo: Aggregate hours of private production workers (percent change)1,2 1.1 Average workweek (hours)1 34.4 Manufacturing (hours) 41.6 -1.8 34.2 40.7 -3.8 34.1 40.5 -0.5 34.1 40.8 0.1 34.1 40.7 0.1 34.2 41.0 -0.2 34.1 41.0 43 Note. Average change from final month of preceding period to final month of period indicated. 1. Survey of establishments. 2. Annual data are percent changes from Q4 to Q4. Quarterly data are percent changes from preceding quarter at an annual rate. Monthly data are percent changes from preceding month. Private Payroll Employment Growth Aggregate Hours of Production or Nonsupervisory Workers (Strike-adjusted data) Thousands of employees 500 1-month 400 400 300 100 152 152 150 200 100 1982 = 100 154 300 200 154 150 500 0 Apr. 3-month moving average 0 Apr. 148 148 -100 -200 -400 144 142 140 140 -300 -400 144 -200 -300 146 142 -100 146 -500 1997 1998 1999 2000 2001 2002 -500 138 1997 1998 1999 2000 2001 2002 138 -3SELECTED UNEMPLOYMENT AND LABOR FORCE PARTICIPATION RATES (Percent; based on seasonally adjusted data, as published) 2000 Civilian unemployment rate (16 years and older) 2001 Q4 2001 2002 Q1 2002 Mar. Feb. Apr. 4.0 Teenagers 20-24 years old Men, 25 years and older Women, 25 years and older 5.6 5.5 5.7 6.0 14.7 8.3 3.6 3.7 15.8 9.5 4.4 4.4 16.0 9.8 4.5 4.4 15.6 9.5 4.4 4.6 16.4 10.3 4.5 4.4 16.8 10.0 4.8 5.0 67.2 66.9 66.9 66.5 66.7 66.6 66.8 52.2 77.9 76.0 59.7 Labor force participation rate 5.6 13.0 7.1 2.8 3.2 Teenagers 20-24 years old Men, 25 years and older Women, 25 years and older 4.8 49.9 77.2 75.9 59.7 49.1 76.9 75.9 59.6 48.2 76.3 75.6 59.6 47.8 76.6 75.7 59.8 48.9 76.4 75.6 59.5 47.7 76.2 75.9 59.9 Labor Force Participation Rate and Unemployment Rate Percent 67.5 Percent 10 Participation rate (left scale) 9 67.0 8 Apr. Apr. 66.5 7 6 5 66.0 Unemployment rate (right scale) 65.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 4 1999 2000 2001 2002 3 Job Losers Unemployed for Less Than 5 Weeks (Percentage of household employment) 1.4 Percent 1.4 1.3 1.3 1.2 1.2 1.1 Apr. 1.1 1.0 1.0 0.9 0.9 0.8 0.8 0.7 1994 1995 1996 1997 1998 1999 2000 2001 2002 0.7 -4- In the household survey, the unemployment rate rose 0.3 percentage point to 6.0 percent in April. The labor force participation rate moved up 0.2 percentage point to 66.8 percent in April. We believe that much of the increase in unemployment is the result of the federal Temporary Extended Unemployment Compensation program (TEUC). Our view is that the program likely spurred some workers to return to the labor force to renew their claims for benefits and reduced the incentives for others to leave the jobless rolls. Job losers unemployed less than five weeks as a percent of household employment—an indicator of the layoff rate—declined in again April. Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls edged up 0.1 percent in April. Over the twelve months ended in April, average hourly earnings increased 3.4 percent, nearly a percentage point less than the 4.3 percent rise in the previous twelve months. Sales of Light Motor Vehicles Sales of light motor vehicles rose in April to an annual rate of 17.1 million units—a stepup of almost 400,000 units from the March sales pace. Most of the over-the-month increase (300,000 units) was the result of higher fleet sales at General Motors; the company’s retail sales were flat last month.1 Sales at Ford edged up while sales at DaimlerChrysler ticked down. Among the major Japanese firms, sales firmed a little at Toyota and Honda, but sales at Nissan fell back to about its recent average rate after having run up the month before. Data from J.D. Power and confidential data from GM indicate that the overall level of incentives is currently at least as high as in October, and industry contacts report that there “has been no let up” in competitive pricing pressures. Despite the improvement in its sales last month, GM’s share of industry sales was still a bit below the company’s target of 30 percent, and Ford’s share was 2 percentage points below its average in the first half of 2001. Because these shares are probably below levels acceptable to company executives, incentives may remain high in the near term. Indeed, GM and Ford introduced new incentive packages to replace those that expired at the beginning of May. Manufacturers’ Inventories The book value of manufacturers’ inventories decreased at an annual rate of $33 billion in March, following a $27.6 billion liquidation in February. Shipments increased 0.7 percent in March, and the manufacturing inventoryshipments ratio declined to 1.36 months from 1.38 months. For the first 1. Information on the retail-fleet composition of sales is confidential. -5- AVERAGE HOURLY EARNINGS (Percent change; based on seasonally adjusted data) Percent change 12-month to Apr. 2002 percent change from month indicated Apr. Apr. Apr. Oct. Jan. 2000 2001 2002 2001 2002 Total private nonfarm Manufacturing ex overtime Percent change Mar. Apr. 2002 2002 - - - - - - - - -Annual rate- - - - - - - - 3.7 4.3 3.4 3.1 2.8 3.4 3.2 3.3 3.2 2.4 3.1 4.1 3.0 2.1 1.1 -Monthly rate0.3 0.1 0.1 0.1 -0.1 0.1 Construction Transportation and public utilities Finance, insurance, and real estate 4.5 2.1 3.3 4.1 4.6 0.6 0.3 3.4 3.8 4.2 4.1 2.1 0.2 0.1 2.7 4.6 3.7 2.1 2.8 0.4 0.1 Retail trade 4.2 3.7 3.2 2.8 2.4 0.2 0.2 Wholesale trade 3.9 4.5 2.2 2.5 1.0 0.1 -0.5 Services 3.7 5.2 4.0 3.4 3.8 0.3 0.3 Average Hourly Earnings (3-month moving average of 12-month change) 8 Percent 8 8 Percent 8 7 7 7 7 6 6 6 6 5 5 4 4 3 3 3 3 2 2 2 2 1 1 1 0 0 0 8 Percent 8 8 Percent 8 7 7 7 7 6 6 5 5 5 5 Total 4 Apr. Manufacturing 1990 1992 1994 1996 1998 2000 2002 6 Construction 1990 1992 1994 4 4 3 2 2 1 0 2002 1 0 Apr. Wholesale trade 1990 1992 1994 1996 1998 2000 2002 0 6 FIRE 5 1 0 2000 3 2 1998 4 3 1996 4 1 Transportation Retail trade 5 Apr. Apr. 4 3 Services 2 1 1990 1992 1994 1996 1998 2000 2002 0 -6- -7- quarter as a whole, manufacturers’ inventories fell at a $33.7 billion rate, after having declined at a $51.8 billion rate in the fourth quarter.2 Stocks held by manufacturers of durable goods declined in most categories in March. Aircraft manufacturers recorded an extraordinary drawdown ($22.5 billion), and sizable liquidations continued at manufacturers of computer and electronic products, primary metals, machinery, and electrical equipment. For the durable goods category as a whole, shipments were unchanged and the stock-to-shipments ratio declined to 1.56 months, toward the low end of readings in the last year. Nevertheless, the stock-to-shipments ratio remains above trend at manufacturers of electrical equipment. At producers of nondurables, inventory declines were widespread and generally small. Shipments of nondurable goods increased 1.6 percent, and the stock-to-shipments ratio declined to 1.12 months. Nonetheless, inventoryshipments ratios remained somewhat elevated for manufacturers of chemicals, beverage and tobacco, and leather and allied products. Revised data on orders and shipments of nondefense capital goods in March, which were released with report on manufacturers’ inventories, are summarized in updated versions of the table and chart that appeared on pages II-24 and II-25 of Greenbook, Part 2. House Prices Attached is an updated version of the chart on real house prices, which appeared on page II-22 of Greenbook, Part 2. It includes new data for the year-over-year change in the index of repeat-sales prices of existing homes through 2001:Q1; these data are confidential until they are publicly released on June 3. The Domestic Financial Economy Attached is a corrected version of the table, which appeared on page III-9 of Greenbook, Part 2, summarizing data on net flows into long-term mutual funds. 2. The decline in manufacturers’ inventories in March was about $13 billion less than the liquidation that the BEA assumed for the advance GDP release. However, the downward revision to February inventories implies only a small upward revision for the first quarter as a whole. -8- Change in Manufacturing Inventories (book value, billions of dollars at annual rate) 2001 Sector Total manufacturing Excl. aircraft Durable goods Lumber and wood prod. Nonmetalic minerals Primary metals Fabricated metals Machinery Computer and electronic prod. Electrical equip. Transportation equip. Motor vehicles Aircraft Furniture Other durables Nondurable goods Food Beverage and tobacco Textiles Textile products Apparel Leather and allied prod. Paper products Printing Chemicals Petroleum and coal Rubber and plastics Stage of Processing Materials and supplies Work in process Finished goods 2002 2001 2002 Q2 Q3 Q4 Q1 Dec. Jan. Feb. Mar. -34.3 -32.7 -42.5 -44.1 -51.8 -53.7 -33.7 -25.0 -48.2 -57.1 -40.6 -38.5 -27.6 -25.9 -33.0 -10.5 -25.1 .3 -.4 -3.8 -3.9 -3.0 -8.7 -2.4 -1.8 -.6 -1.6 -1.1 -.3 -32.7 -1.1 -1.0 -2.9 -2.1 -3.8 -16.0 -1.9 -1.6 -2.5 1.6 -1.5 -.9 -35.2 -2.5 -1.7 -2.5 -5.2 -6.0 -12.5 -1.4 -.6 -4.3 1.9 -2.2 -.4 -27.5 1.6 -1.1 -3.8 -1.9 -3.2 -5.3 -1.4 -11.5 -1.5 -8.7 -.6 -.4 -34.3 -2.7 -2.3 -3.1 -6.6 -6.0 -18.8 -2.1 9.5 -2.6 8.9 -3.3 1.0 -29.6 2.1 -2.0 -5.0 -2.6 -5.8 -3.0 -1.6 -9.3 -3.7 -2.0 -1.0 -1.5 -21.5 .6 -.9 -3.1 -3.0 -2.7 -8.5 -1.2 -2.0 -2.1 -1.6 -.8 .2 -31.6 2.1 -.3 -3.4 -.1 -1.1 -4.3 -1.4 -23.3 1.3 -22.5 .0 .3 -9.2 2.1 .4 -.7 -.9 -.8 -.3 -1.1 -.9 -4.0 -.5 -2.5 -9.8 -.9 .3 -.8 -.5 -2.2 .0 -.5 -1.0 -1.5 -1.5 -1.3 -16.6 .0 -.1 -1.5 -.3 -2.9 -.4 .0 -1.0 -4.3 -4.0 -2.2 -6.2 -.7 .5 -1.3 -.4 -2.0 -.3 -.6 -1.2 -1.2 1.4 -.3 -13.9 -.2 1.5 -1.8 -.3 -3.6 -.6 -1.2 -.9 -3.8 .0 -3.1 -11.0 1.0 .0 -2.6 -.5 -2.4 -.3 -1.1 .3 -.6 -3.6 -1.3 -6.1 -1.2 -.7 -.6 -.5 -2.1 -.4 -.6 -2.9 -.3 3.3 -.2 -1.4 -2.0 2.1 -.8 -.3 -1.5 -.3 .0 -1.0 -2.7 4.5 .7 -18.5 -12.1 -3.7 -21.3 -3.9 -17.3 -19.0 -16.6 -16.2 -7.1 -16.0 -10.6 -30.6 -6.8 -10.8 -15.1 -2.7 -22.7 -5.0 -9.6 -13.0 -1.2 -35.8 4.0 -9- Manufacturers’ Inventory-Shipments Ratios 2001 2002 2001 2002 Sector Q2 Q3 Q4 Q1 Dec. Jan. Feb. Mar. Total manufacturing Excl. aircraft 1.39 1.31 1.39 1.31 1.37 1.28 1.35 1.27 1.37 1.29 1.35 1.26 1.38 1.29 1.36 1.28 Durable goods Lumber and wood prod. Nonmetalic minerals Primary metals Fabricated metals Machinery Computer and electronic prod. Electrical equip. Transportation equip. Motor vehicles Aircraft Furniture Other durables 1.61 1.41 1.32 1.76 1.69 2.06 1.61 1.39 1.42 .59 3.84 1.42 1.89 1.61 1.36 1.31 1.73 1.67 2.09 1.64 1.46 1.42 .58 3.77 1.39 1.86 1.58 1.30 1.27 1.76 1.62 2.12 1.53 1.48 1.39 .55 3.80 1.33 1.89 1.54 1.35 1.23 1.68 1.61 2.05 1.50 1.50 1.33 .53 3.63 1.31 1.86 1.58 1.31 1.27 1.81 1.63 2.18 1.49 1.48 1.36 .54 3.78 1.34 1.90 1.54 1.31 1.22 1.70 1.60 2.05 1.51 1.51 1.32 .50 3.96 1.29 1.85 1.57 1.34 1.25 1.76 1.63 2.04 1.53 1.54 1.38 .53 3.78 1.33 1.86 1.56 1.36 1.23 1.67 1.62 2.07 1.52 1.50 1.35 .55 3.52 1.33 1.85 Nondurable goods Food Beverage and tobacco Textiles Textile products Apparel Leather and allied prod. Paper products Printing Chemicals Petroleum and coal Rubber and plastics 1.12 .78 1.42 1.68 1.68 1.93 1.96 1.18 .76 1.43 .68 1.22 1.12 .77 1.41 1.68 1.60 1.91 2.11 1.20 .75 1.46 .70 1.18 1.12 .77 1.41 1.66 1.56 1.74 2.01 1.23 .73 1.45 .72 1.16 1.12 .77 1.48 1.60 1.52 1.67 2.09 1.26 .71 1.48 .73 1.15 1.13 .77 1.40 1.69 1.57 1.70 2.06 1.26 .74 1.47 .72 1.16 1.12 .76 1.43 1.64 1.58 1.70 2.13 1.23 .74 1.46 .70 1.13 1.14 .77 1.52 1.61 1.50 1.71 2.11 1.29 .73 1.51 .74 1.16 1.12 .77 1.48 1.61 1.50 1.68 2.16 1.26 .70 1.50 .70 1.16 333.9 326.3 320.9 319.2 320.9 324.5 Memo: Manufacturing shipments (billions of dollars) 315.2 317.5 - 10 - - 11 - Recent Data on Orders and Shipments Computers and Peripherals Billions of dollars 13 13 12 Shipments Orders 12 11 11 10 10 9 9 8 8 Mar. 7 7 6 6 5 1995 1996 1997 1998 1999 2000 2001 2002 5 Communications Equipment 14 Billions of dollars 14 12 12 10 10 8 8 6 6 4 4 2 1995 1996 1997 1998 1999 2000 2001 2002 2 Other Equipment (Total Ex. Transportation, Computers, Communications) 48 Billions of dollars 48 46 46 44 44 42 42 40 40 38 38 36 36 34 1995 1996 1997 1998 1999 2000 2001 2002 34 - 12 - Real House Price Indexes* (Percent change from year earlier; prices adjusted by PCE deflator) Percent 8 8 6 Q1 Q1 Repeat sales, existing home 4 6 4 2 2 0 0 -2 -4 -6 -2 Constant quality, new home 1980 1982 1984 1986 1988 -4 1990 1992 1994 1996 1998 2000 2002 -6 Repeat Sales, Real Prices by Region* Midwest Northeast Percent 30 30 Percent 30 30 New England Middle Atlantic East North Central West North Central 20 20 20 20 10 10 10 10 0 0 0 0 -10 -10 1980 1985 1990 1995 -10 2000 1980 South 1985 1990 1995 2000 West Percent 30 30 East South Central West South Central South Atlantic 20 -10 Percent 30 30 Mountain Pacific 20 20 20 10 10 10 10 0 0 0 0 -10 -10 1980 1985 1990 1995 2000 -10 -10 1980 1985 * The repeat sales price indexes are confidential until publicly released on June 3rd. 1990 1995 2000 - 13 - Household Assets Household Assets Relative to Disposable Income Ratio 7.5 Quarterly, s.a.a.r. 7.0 Total assets 6.5 Q1 p 6.0 5.5 Total assets excluding equities 5.0 Q1 p 4.5 4.0 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 p. Staff projection. Net Flows into Long-Term Mutual Funds (Excluding reinvested dividends; billions of dollars, monthly rates) H1 2000 H2 H1 2001 H2 Q1 2002 Mar. Apr. e Assets Mar. Total long-term funds 23.8 13.1 15.2 6.5 30.6 39.5 22.4 4,817 Equity funds Domestic Capital appreciation Total return International 34.4 26.7 34.4 -7.6 7.7 15.9 15.7 16.7 -0.9 0.2 8.3 9.2 5.3 3.9 -0.8 -2.7 0.1 -2.2 2.2 -2.7 18.7 17.3 9.6 7.8 1.3 29.3 26.4 15.4 11.0 2.9 11.1 11.8 4.6 7.2 -0.7 3,499 3,056 1,820 1,236 443 Hybrid funds -4.0 -1.3 1.0 0.5 2.7 3.4 2.7 359 Bond funds International High-yield Other taxable Municipals -6.6 -0.2 -1.1 -2.8 -2.5 -1.5 -0.2 -0.9 -0.3 -0.0 5.9 0.0 0.9 4.2 0.8 8.7 -0.2 0.3 7.4 1.1 9.3 -0.0 1.8 6.3 1.2 6.8 -0.1 3.7 3.4 -0.1 8.5 0.1 1.8 5.9 0.7 959 19 100 540 299 e. Staff estimates based on confidential ICI weekly data. Source. Investment Company Institute (ICI). - 14 - Commercial Bank Credit (Percent change, annual rate, except as noted; seasonally adjusted) Type of credit Total 1. Adjusted1 2. Reported 3. 4. 5. 6. Securities Adjusted1 Reported Treasury & Agency Other2 Loans3 7. Total 8. Business 9. Real estate 10. Home equity 11. Other 12. 13. 14. Consumer Adjusted4 Other5 Level, Apr. 2002p ($ billions) 2001 Q4 2001 Q1 2002 Feb. 2002 Mar. 2002 Apr.p 2002 4.3 5.1 4.4 5.2 .8 -1.0 .6 .3 .8 -2.4 5.5 4.1 5,324 5,445 9.9 12.4 3.8 25.1 15.3 17.1 27.8 4.6 7.9 .4 .8 -.2 -5.2 -5.7 -11.7 2.0 10.2 -2.4 24.5 -35.2 18.3 12.3 29.5 -9.6 1,375 1,497 849 647 2.6 -3.8 7.1 18.4 6.2 .9 -8.6 11.7 31.1 10.0 -1.5 -5.2 3.3 26.7 1.1 2.6 9.0 3.8 25.2 1.7 -2.3 -2.3 -1.9 39.6 -6.0 1.1 -11.5 1.3 31.1 -1.8 3,949 1,021 1,788 170 1,617 4.2 7.6 .1 3.1 6.4 -15.0 4.0 4.6 -14.7 5.6 -1.1 -15.4 -4.5 -.9 -1.5 10.3 2.9 14.4 567 912 574 Note. All data are adjusted for breaks caused by reclassifications. Monthly levels are pro rata averages of weekly (Wednesday) levels. Quarterly levels (not shown) are simple averages of monthly levels. Annual levels (not shown) are levels for the fourth quarter. Growth rates are percentage changes in consecutive levels, annualized but not compounded. 1. Adjusted to remove effects of mark-to-market accounting rules (FIN 39 and FIN 115). 2. Includes private mortgage-backed securities, securities of corporations, state and local governments, and foreign governments and any trading account assets that are not Treasury or Agency securities, including revaluation gains on derivative contracts. 3. Excludes interbank loans. 4. Includes an estimate of outstanding loans securitized by commercial banks. 5. Includes security loans and loans to farmers, state and local governments, and all others not elsewhere classified. Also includes lease financing receivables. p Preliminary. - 15 - III-T-1 Selected Financial Market Quotations (One-day quotes in percent except as noted) 2000 2002 Change to May 2 from selected dates (percentage points) 2001 2002 June 26 Sept. 10 Mar. 18 May 2 2000 June 26 2001 Sept. 10 2002 Mar. 18 Short-term FOMC intended federal funds rate 6.50 3.50 1.75 1.75 -4.75 -1.75 .00 Treasury bills 1 3-month 6-month 5.66 5.94 3.19 3.13 1.85 2.09 1.74 1.87 -3.92 -4.07 -1.45 -1.26 -.11 -.22 Commercial paper (A1/P1 rates) 1-month 3-month 6.56 6.56 3.42 3.24 1.78 1.91 1.74 1.78 -4.82 -4.78 -1.68 -1.46 -.04 -.13 Large negotiable CDs 1 1-month 3-month 6-month 6.64 6.73 6.89 3.46 3.26 3.24 1.85 1.94 2.23 1.80 1.80 1.81 -4.84 -4.93 -5.08 -1.66 -1.46 -1.43 -.05 -.14 -.42 Eurodollar deposits 2 1-month 3-month 6.63 6.69 3.41 3.26 1.85 1.93 1.79 1.82 -4.84 -4.87 -1.62 -1.44 -.06 -.11 Bank prime rate 9.50 6.50 4.75 4.75 -4.75 -1.75 .00 Intermediate- and long-term U.S. Treasury3 2-year 10-year 30-year 6.54 6.35 6.22 3.59 5.14 5.55 3.60 5.63 5.95 3.24 5.38 5.76 -3.30 -.97 -.46 -.35 .24 .21 -.36 -.25 -.19 U.S. Treasury 10-year indexed note 4.09 3.26 3.38 3.09 -1.00 -.17 -.29 Municipal revenue (Bond Buyer) 4 5.99 5.25 5.63 5.52 -.47 .27 -.11 7.38 7.15 7.64 8.40 12.30 5.62 5.64 6.30 7.11 12.72 5.99 6.00 6.49 7.64 12.06 5.66 5.70 6.43 7.52 11.48 -1.72 -1.45 -1.21 -.88 -.82 .04 .06 .13 .41 -1.24 -.33 -.30 -.06 -.12 -.58 8.14 7.22 6.89 5.64 7.08 5.08 6.88 4.91 -1.26 -2.31 -.01 -.73 -.20 -.17 Instrument Private instruments 10-year swap 10-year FNMA 10-year AA 5 10-year BBB 5 High yield 6 Home mortgages (FHLMC survey rate) 7 30-year fixed 1-year adjustable Record high 2001 Change to May 2 from selected dates (percent) 2002 Stock exchange index Level Dow-Jones Industrial S&P 500 Composite Nasdaq (OTC) Russell 2000 Wilshire 5000 Date Sept. 10 Mar. 18 May 2 Record high 2001 Sept. 10 2002 Mar. 18 11,723 1,527 5,049 606 14,752 1-14-00 3-24-00 3-10-00 3-9-00 3-24-00 9,606 1,093 1,695 441 10,104 10,578 1,166 1,877 503 10,916 10,092 1,085 1,645 513 10,298 -13.91 -29.00 -67.42 -15.30 -30.19 5.06 -.73 -2.98 16.48 1.92 -4.59 -6.95 -12.37 2.10 -5.66 1. Secondary market. 2. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. 3. Derived from a smoothed Treasury yield curve estimated using off-the-run securities. 4. Most recent Thursday quote. 5. Derived from smoothed corporate yield curves estimated using Merrill Lynch bond data. 6. Merrill Lynch Master II high-yield bond. 7. For week ending Friday previous to date shown. _______________________________________________________________________ NOTES: June 26, 2000 is the day before the FOMC meeting that ended the most recent period of policy tightening. September 10, 2001 is the day before the terrorist attacks. March 18, 2002 is the day before the most recent FOMC meeting. _______________________________________________________________________ BA:DAM
@FedFRASER