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M arch 1998

Deflation and
Economic Growth
With the consum er price index inflation rate
reaching relatively low levels in 1997, som e analysts
have begun d iscussin g the possibility o f deflation—
a sustained decline in the price lev el— as a realistic
prospect for the U .S. econom y. Forecasts o f a w id e­
spread price decline m ay be premature, since such
an event has not occurred in the United States for
many years and probably w ill not happen any time
soon. Even if it does occur, how ever, moderate defla­
tion need not be view ed in the negative light in w hich
it is often portrayed. The U .S. econ om y has experience
with sustained deflation, and that experience suggests
that the real econ om y can flourish against a backdrop
o f d eclin in g prices.
T he U .S . ex p erien ce w ith sustained deflation
stretches over a quarter century in the post-C ivil
War era, from 1875 to 1900. During this period, the
United States becam e an industrial giant and a world
power. W hile recessions did occur periodically, the
real eco n o m y performed w ell, on average. Part o f
the p olicy m ix that helped produce this outcom e w as
a g o ld standard, w h ich constrained the grow th o f
the U .S . m on ey su pp ly and led to a long period o f
d e c lin e s in the U .S. price level. Thus, the qualitative
story is that the last quarter o f the 19th century can
be characterized by relatively strong growth in real
output cou pled with deflation.
The chart displays data w hich corroborate this
qualitative story. Centered, three-year m oving aver­
ages o f real output growth rates and inflation rates
are pictured, based on estim ates o f real output and
price lev els from 1875 to 1900. The m oving aver­
ages sm ooth the data and help us to discern longerrun trends. S in ce this era is one in w hich national
accounts w ere not kept as they are today, these data
are crude estim ates, but the estim ates reflect the best

efforts o f econom ists w orking in this area. The average
rate o f change o f prices w as approximately negative 1
percent— a 1 percent rate o f deflation— w hile the aver­
age rate o f growth in real output w as just over 4 per­
cent. It seem s clear that the U.S. econom y was able to
grow and industrialize rapidly in an environment o f con ­
sistent price declines.
For m any eco n om ists, w orries about deflation
are associated with the exp erien ce during the Great
D ep ression , w hen a sharp deflation w as associated
with a catastrophic decline in real output. Few w ould
disagree that a large and unexpected deflation could
dam age econom ic performance, just as a large and
unexpected inflation could. But for smaller, less
volatile m ovem ents in the price level, the evidence
from the late 19th century suggests that w e should be
careful about assum ing that deflation p e r se has serious
detrimental effects on the real econom y. Instead, the
evidence seem s to suggest that strong econom ic perfor­
m ance and mild deflation are w h olly compatible.
-J a m es Bullard

Deflation and Economic G row th
Percent change, 3-year centered moving average

Source: G ordon, Robert

Macroeconomics-5lh ed., Scott, Foresman and Co.

Views expressed d o not necessarily reflect official positions of the Federal Reserve System



Tabi eofContents
Page
3

Economy at a glance

4

Output and growth

7

Interest rates

8

Inflation and prices

10

Labor markets

12

Consumer spending

14

Investment spending

16

Government revenues, spending, and debt

18

International trade

20

Productivity and profits

22

Quick reference tables

27

Notes and sources

Back by Popular Demand!
After the revision of NET in January 1997, many subscribers wrote to express their
dismay at the disappearance of the federal debt table. A new version of the table
returns on page 17 of this issue. The new table is not seasonally adjusted (the old
one was adjusted). Annual data on government outlays and receipts by function
displaced by this table can be found in the Survey of Current Business, tables 3.16
and 3.17 (tables last published October 1997).

Conventions used in this publication:
1. Charts and tables contain data that were current on March 3, 1998.
2. Shaded areas indicate recessions, as determined by the National Bureau of Economic Research.
3. Percent change refers to simple percent changes. Percent change from year ago refers to the percent change from the same
month or quarter in the previous year. The percent change at annual rate shows what the growth rate would be over an entire year
if the same simple percent change continued for four quarters or twelve months. The percent change at annual rate of X between
the previous quarter t-1 and the current quarter f is:

100 x

- 1

't-1

For monthly data replace 4 with 12.
4. All data with significant seasonal patterns are seasonally adjusted, unless labeled NSA.
National Economic Trends is published monthly by the Research Division of the Federal Reserve Bank of St. Louis. For more information on data, please call (314) 444-8573.
Single-copy subscriptions are available free of charge by writing to the Public Affairs Office, Federal Reserve Bank of St. Louis, Post Office Box 442, St. Louis, MO 63166-0442
or by calling (314) 444-8808 or (314) 444-8809. Information in this publication is also included on the Federal Reserve Economic Data (FRED) electronic bulletin board at
(314) 621-1824 or Internet World Wide Web server at http://www.stls.frb.org/fred.




UationalEconomicTrends

Real GDP Growth
Percent change at annual rate
6 - .....................................................................................

Percent change
0.5 - .....................

~ 1 1....................... r....................... I....................... I...............
1994

1995

1996

1997

Industrial Production

Interest Rates

Percent change

Percent

1.8

8

-

..........................................................

-

.........

4 “ I.................................. I...................................I...................................I......................

1995

1996

1997

1998

Change in Nortfarm Payrolls

1995

1996

1997

1998

Unemployment Rate

Thousands

Percent of iabor force

600 - ..............................................

1995




1996

6.0

1997

1998

-

40 1....................... 1....................... 1....................... 1...............
1995

1996

1997

1998

3

National Economic Trends

Real Gross Domestic Product
Percent change from year ago
10

-

~5 i

..1......1— T......I...... j...... I...... T...... f ...T...äST “ i...... I....... r

72

73

74

75

76

77

78

79

80

81

82

83

84

85

1...... 1...... 1.......1...... r...TT..... i...... i...... r
86

87

88

89

90

91

92

93

94

i

95

r

96

i

97

i

Industrial Production and Purchasing Managers’ (NAPM) Indexes
Percent change from year ago

Index

Aggregate Private Nonfarm Hours
Percent change from year ago
12

-

..........;

.
Vv

\
IÜ|
1

73

1

74

1

75

1

76

1

77

I

78

1

79

1

80

Real Change in Business Inventories
Percent of GDP
2

-

..............

mm


http://fraser.stlouisfed.org/
4
Federal Reserve Bank of St. Louis

H

81

82

I

j

I

I

83848586

I

87

1

f

1

8 8 899 0

91

1

92

T

93

1

94

I

95

1

96

I

97

1

98

National EconomicTrends

Real Final Sales and GDP

Real GDP Revisions

Percent change at annual rate

Percent change at annual rate

6

8 -1 —

Prelimlnary
Annual Revision

Advance

V7/////A Final
64

2

—

01995

1996

1997

96:4

Index

Percent change
-

97:2

-

....................................

68

-

..........................................................................................................

1996

Aggregate Private Nonfarm Hours

Average Weekly Private Nonfarm Hours

Percent change

Hours
35.0 -

-2

1997

1

1998

33.5

1996

Real Change in Business Inventories

Inventory-Sales Ratio

Billions of 1992 dollars
80

Manufacturing and trade
1.46 -




97:4

Percent change at annual rate
10

1995

1996

97:3

Nominal Gross Domestic Product

Industrial Production and NAPM Index
1.8

97:1

1.31

1995

1997

1996

1997

1998

1997

5

National EconomicTrends

Contribution of Components to Real GDP Growth
Percent change at annual rate
10 -- -------------------------------------

96Q1

96Q2

96Q3

96Q4

Consumption

Exports

Imports

Inventories

97Q1

97Q2

!

97Q3

97Q4
Real GDP

Government
Investment

Contributions to Real GDP Growth Rate
19«
1st

2nd

3rd

4th

! 1997
1st

2nd

3rd

4th

Real GDP

1.77

5.97

1.03

4.31

I

4.89

3.31

3.07

3.90

Final Sales

2.56

5.22

0.16

4.49

I

3.02

2.48

4.69

2.47

-0 .8 3

0.78

0.96

-0.29

j

1.76

0.79

-1 .6 7

1.47

Consumption

2.13

2.53

0.35

2.22

j

3.56

0.64

3.78

2.09

Fixed Investment
Nonresidential
Residential

1.49

2.02

1.46

0.45

S

0.59

1.84

2.13

-0 .0 0

1.19

1.34

1.72

0.66

j

0.47

1.59

2.1 1

-0 .4 3

0.31

0.66

-0 .1 8

-0 .1 7

|

0.13

0.28

0.10

0.36

Change in Inventory

Government
Federal
State and Local
Net Exports
Exports
Imports
Residual
Digitized
6 for FRASER


0.32

1.29

-0 .2 0

0.02

j

-0.08

0.54

0.19

0.07

0.49

0.58

-0.29

-0 .3 5

|

-0 .3 8

0.41

-0 .0 7

-0 .1 3

-0 .1 6

0.71

0.08

0.37

0.31

0.13

0.26

0.20

-1 .4 4

-0.69

-1 .5 1

1.93

-1.18

-0 .5 8

-1 .5 3

0.31

0.21

1.13

0.23

2.89

1.24

2.26

0.59

1.30

-1 .6 5

-1 .8 1

-1 .7 3

-0 .9 4

-2 .3 9

-2 .8 0

- 2 .1 1

-0 .9 8

-0 .0 3

-0 .0 8

-0 .1 0

11
j
j
j
i

0.20

0.02

0.14

-0 .0 0

0.1 1

National EconomicTrends

Interest Rates
Percent
18 -

Percent
7.5 - ....
7.0 —

5.0 4.5 4.0 -

3m

1y

2y

5y

7y

10y

30y

Total Return on Standard and Poor’s 500
Percent change from year ago
75

50

25

0

-2 5

-5 0




98

7

Nat iona IEconomic Tren ds

GDP Chain Price Index
Percent change from year ago

Percent change from year ago

Producer Price Index, Finished Goods
Percent change from year ago

Employment Cost Index and Compensation per Hour
Percent change from year ago
15-




National EconomicTrends

GDP Chain Price Index

Crude Oil Price

Percent change at annual rate

Dollars per barrel

4 - ......................................................

28 - ..........................

1996

1995

Consumer Price Index

1997

121

1993

1 1994

1 1995

1 1996

Percent change

Percent change at annual rate
4 - ..............................................................

Excl. Food & Energy

3 -

1995

Producer Price Index, Finished Goods

Unit Labor Cost

Percent change

Percent change at annual rate

PPI (bar)

Excl.
Food & Energy

6

Employment Cost Index

1995

Compensation perHour
Forcent change at annual rate

8

6 - ..........................................




1997

1996

1997

Nonfarm

F*ercent change from year ago
.................................................................

1996

- .......................................

“ 6T

-

1 1998

Consumption Chain Price Index

0.5 - ................. -....................

0.65 -

1 1997

NationalEconomicTrends

Employment
Percent change from year ago

6

4
2

0

-2

-4

.......I

98

Unemployment, Labor Force Participation and Employment Rates
Percent of labor force

Percent of population

15 Labor Force/Population
(— ►)

Duration of Unemployment
Percent of labor force

Weeks

4.50

16

3.75

14

3.00

12

2.25

10

1.50

8

0.75

6

0.00

4

Digitized
10 for FRASER


National EconomicTrends

Change in Nonfarm Payrolls

Change in Manufacturing Payrolls

Thousands
600 - ........................................

Thousands

60 - ..................................................

_ 6 ° 1............................. 1............................. 1..................
1996

1997

1998

1996

1997

1998

Labor Force and Population

Change in Household Employment
Thousands

Percent change from year ago

750 - ..................................................

2.5 - ........................................

2.0

1.5

1.0

0.5

-250 -,............................. I..............................I................
1996

1997

0.0

1998

Unemployment Rate

Help-Wanted Advertising

Percent

Index

6.0

95 - ..........................................................................................- 8.0

-

......................................................

Percent

40 1............................. 1..............................1..................
1996




1997

1998

1993

1994

1995

1996

1997

1998

11

National EconomicTrends

Real Disposable Income
Percent change from year ago, quarterly data

Real Consumption
Percent change from year ago

Percent change from year ago

Retail Sales
Percent change from year ago of quarterly average

Debt Service as Percent of Disposable Income
Percent
18

-


12


Percent
-

12

National EconomicTrends

Personal Saving Rate

Real Disposable Income

Percent

Percent change

8

-

..............

il. ImillI.illillll

0.00

-0.75

-1.00 -j
1997

1996

1993

1998

1 1994

Real Consumption

Real Consumption

Percent change

Percent change

8

-

1.6 -

.................................................

1.2

-

0.8

-

1 1995

' 1996

1 1997

1 1998

.................................................

II i
1ll 9. li1 » 1.Jill
0.0
Ml
-0.4 —
0 .4 -

- 0 .8 T

1995

1997

1996

1996

1997

1998

Retail Sales

Real Durables Consumption and Vehicle Sales

Percent change

Percent change

2.25 -

Millions of vehicles, annual rate

9 - ......... ........

- 16.0

Autos and light trucks

-6

T 13.5
1996

[

1997

Consumer Sentiment (U. of Michigan)

Real Durables Consumption

Index

Percent change

110 —•

20

[

1998

10 -

60 -,...............[.... — ......]............... i...............]............... t............
1 1993

1994




1995

1996

1997

'

1998

-10 -[...........— ;•..........i............................j...........— -1996

1997

1998

13

National EconomicTrends
Percent of GDP

Real Private Fixed Investment
Percent change from year ago

Real Nonresidential and Producers Durable Equipment Investment
Percent change from year ago

Real Residential Investment
Percent change from year ago
60

-

-

........




National EconomicTrends

Gross Saving Rates and Net Foreign Investment
Percent of GDP
10

Percent of GDP
24 -

__ -*«!•
....

101 .......1......T
72

73

74

— ------ y
r ......i...... i....... I.......r...... r ...r ^ 'T
75

76

77

78

79

80

81

82

~ ' NFl

............................ ............

"

(— ►
) ¡Ä

i.......i...... i.......i.......i.......i.......i...... ^... f ..... i....... i.......i.......r
83

84

85

86

87

88

89

90

91

92

93

94

Real Private Fixed Investment

Nondefense Capital Goods Orders

Percent change at annual rate

Percent change from year ago, excluding aircraft

15

30-

95

i

96

'

i

97

*

r ~4

-2 0 t
1995

1996

1997

Real Equipment Investment

1993

’

1994

1

1995

1996

[

1997

(

1998

1

Real Nonresidential Investment

Percent change at annual rate

Percent change at annual rate

25 - ...................................................

20

1995

1

1996

- ........................................ .........

1997

Housing Starts
Percent change at annual rate

Millions, annual rate

20

1.6

-

......................................... - ....................




-

..............................................

1.3
1996

1997

1998

15

tiationaìEconomicTrends

Govt. Consumption and Investment

Government Receipts and Outlays

Billions of 1992 dollars
1400

Percent of GDP
35

1200

800

600

Government Budgets
Billions of dollars

National Income Accounts

Unified Budget

Calendar Years

Fiscal Years

1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997

Expenditures

Receipts

Expenditures

Federal
Surplus or
Deficit!-)

Receipts

Outlays

81
'5

Receipts

Federal
Surplus or
Deiicit(-)

—

State and Local
225.6

198.0

27.6

297.4

371.3

-7 3 .9

279.1

332.3

-53 .2

253.9

217.9

36.0

343.1

400.3

-5 7 .2

298.1

371.8

-7 3 .7

281.9

237.1

44.8

389.6

435.9

-4 6 .3

355.6

409.2

-53 .7

309.3

256.7

52.6

446.5

478.1

-3 1 .6

399.6

458.7

-59 .2

330.6

278.3

52.3

511.1

529.5

-1 8 .4

463.3

504.0

-40 .7

361 .4

307.0

54.4

561.5

622.5

-6 1 .0

517.1

590.9

-7 3 .8

390.8

335.4

55.4

649.3

707.1

-5 7 .8

599.3

678.2

-7 9 .0

409.0

357.7

51.3

646.4

781.0

-1 3 4 .6

378.8

64.8

671.9

846.3

-1 7 4 .4

617.8
600.6

1 745.8
808.4

-1 2 8 .0

443.6
492.0

405.1

86.9

746.9

902.9

-1 5 6 .0

666.5

851.9

-1 8 5 .4

528.7

437.8

90.9

81 1.3

974.2

-1 6 2 .9

734.1

946.4

-2 1 2 .3

990.5

-2 2 1 .2

1004.1

-1 4 9 .8

-2 0 7 .8

570.6

475.7

94.9

850.1

1027.6

-1 7 7 .5

594.9

51 1.1

83.8

937.4

1066.3

-1 2 8 .9

769.2
854.4

631.4

545.5

85.9

997.2

-1 2 1 .3

909.3

1064.5

-1 5 5 .2

681.0

585.9

95.1

1079.3

1 1 18.5
1 192.7

- 1 13.4

991.2

1 143.7

-1 52 .5

728.9

648.8

80.1

1 129.8

1284.5

-1 5 4 .7

1032.0

1253.2

784.2

708.4

75.8

1 149.0

1345.0

-1 9 6 .0

1055.0

1324.4

-2 2 1 .2
-2 6 9 .4

844.3
894.4

758.0
807.0

86.3
87.4

1 198.5
1275.1

1479.4
1525.7

-2 8 0 .9
-2 5 0 .6

1091.3
1 154.4

1381.7
1409.4

-29 0 .4
-2 5 5 .0

949.2

852.3

96.9

1374.8

1561.4

-1 8 6 .6

1258.6

1461.7

-2 0 3 .1

999.0
1043.4

895.9

103.1

-1 7 4 .4

1-351.8

1515.7

- 1 63.9

105.4

1463.2
1587.6

1637.6

938.0

1698.1

- 1 10.5

1453.1

1560.5

-1 0 7 .5

NA

982.6

NA

NA

1752.2

NA

1579.3

1601.2

-2 1 .9


http://fraser.stlouisfed.org/
Federal16
Reserve Bank of St. Louis

NationalEconomicTrends

Federal Debt

Federal Deficit

Percent of GDP

Percent of GDP

Federal Deficit, Unified Basis

Change In Federal Debt

Billions of dollars, fiscal years

Percent of GDP

500-,.
lit

.......
1

■

250 -

-2 5 0
74

76

78

80

82

84

86

88

90

92

94

96

98

Federal Government Debt
Billions of dollars, end of month or fiscal year,
excluding agency-issued debt
Heldby
Agencies
Total
PublicDebt
andTrusts

Held by Public

Held by Private Investors

Total

Federal
ReserveBanks

Total

Foreignand
international
591.3

1993

4411.5

1116.7

3294.8

325.7

2 983.0

1994

4692.8

1213.1

3479.7

355.2

3127.8

655.8

1995

4974.0

1320.8

3653.2

374.1

3 279.5

848.4

1996

5224.8

1447.0

3777.8

390.9

3 386.2

1030.9

1997

5413.1

1598.5

3814.7

436.5

3388.9

1292.4

March

4864.1

1254.7

3609.5

369.3

3 239.2

729.2

June

4951.4

1316.6

3634.8

389.0

3245.0

784.2

Septem ber

4974.0

1320.8

3653.2

374.1

3 279.5

848.4

December

4988.7

1304.5

3684.2

391.0

3294.9

862.2

March

51 17.8

1353.8

3764.0

381.0

33 8 2 .8

931.5

June

5161.1

1422.4

3738.6

391.0

33 4 7 .3

959.8

Septem ber

5224.8

1447.0

3777.8

390.9

33 8 6 .2

1030.9

December

5323.2

1497.2

3826.0

410.9

341 1.2

1 131.8

1995

1996

1997

March

5380.9

1506.8

3874.1

405.6

34 5 1 .7

1215.4

June

5376.2

1571.6

3804.6

426.4

33 6 1 .7

1246.9

Septem ber

5413.1

1598.5

3814.7

436.5

3 388.9

1292.4

December

5502.4

NA

NA

NA

NA

NA




17

National EconomicTrends

Trade and Investment Income Balances
Billions of dollars
10

0

-1 0

-2 0

-3 0

-4 0

Exchange Rates

100 x (Deutsche mark/US$)
Yen/US$
- 450

Index, March 1973-100

160

- 375

140

- 300

120

- 225

100

- 150

80

Goods Export Shares, 1996

Goods Import Shares, 1996
All Other
36.60%

All Other
32.23%

Mexico
9.28%

Mexico
9.25%

Canada
21.93%
Other OECD
9.62%

Canada
19.41%

2.32%

Japan
11.05%


http://fraser.stlouisfed.org/
18
Federal Reserve Bank of St. Louis

Germany
3.84%

France
UK 2.36%
5.06%

Japan
14.34%

UK
3.61%

Germany
4.85%

National EconomicTrends

Goods Trade

Trade Balance

Percent change from year ago

Billions of dollars

0

25 - ....................................................

IIIIIIIIIIIV
Goods and Services

-5 -

-10

1996

1995

1997

“5T

1995

1997

1996

Current Account Balance
Percent change from year ago

Billions of dollars

0

2 5 .......................................................
20-

Exports

1995

1996

1997

Beal GDP Growth of Major Tlading Partners
Percent change at annual rate




United Kingdom

1995

1

1996

1

1997

Mexico

19

National EconomicTrends

Output per Hour and Manufacturing Capacity Utilization
Percent change from year ago

Percent

Nonfarm Compensation per Hour
Percent change from year ago

Output per Hour and Multifactor Productivity, Manufacturing
Percent change, annual data

7.5 -

50

52

54


http://fraser.stlouisfed.org/
Federal 20
Reserve Bank of St. Louis

56

58

60

62

64

66

68

70

72

74

76

78

80

82

84

86

88

90

92

94

National EconomicTrends

Nonfarm Output per Hour

Manufacturing Output per Hour
Percent change at annual rate
10 - ...........................................................................

Percent change at annual rate

5 - ............. .......- -------- --------

—5 T

1995

1996

—2 T

1997

1995

1997

1996

Selected Component Shares of National Income

5n

72

i..... T ^ t ..... i.......i...... i...... i...... f ...i... r
73

74

75

76

77

78

79

80

81

82

i...... i...... r......i...... i....... i...... i...... i...;i“T ......i...... i.......i......i....... i...... j.......r 67
83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

Corporate Profits after Tax (with IVA and CCAdj)
Percent change from year ago




21

NationalEconomicTrends
Percent chance
Billions
Annual Year
rate
of $
ago
1993
1994
1995
1996
1997
1994 1

Pinal Sales

Real GDP

Nominal GDP
Billions
of 1992 $

Percent change
Year
Annual
ago
rate

Billions
of 1992 $

Percent chanae
Year
Annua
rate
ago

Change in
Business Inventories
Billions of 1992 $
Last qtr Year/Year ago

6558.1

5.0

6389.563

2.3

6368.864

2.1

7.001

6947.0

5.9

6610.741

3.5

6551.247

2.9

22.102

7265.4

4.6

6742.062

2.0

6712.672

2.5

60.552

7636.0

5.1

6928.396

2.8

6900.980

2.8

27.341

8081.0

5.8

7189.648

3.8

7119.166

3.2

25.038

6794.3

5.5

5.4

6524.505

3.0

3.1

6473.029

1.2

2.8

53.061

32.301

2

691 1.4

7.1

6.2

6600.313

4.7

3.8

6526.671

3.4

2.9

75.896

16.644

3
4

6986.5

4.4

6.3

6629.474

1.8

3.7

6580.376

3.3

3.2

49.662

15.283

7095.7

6.4

5.8

6688.609

3.6

3.3

6624.848

2.7

2.7

63.590

24.179

1995 1

7168.9

4.2

5.5

6703.721

0.9

2.7

6654.289

1.8

2.8

48.479

53.061

2

7209.5

2.3

4.3

6708.841

0.3

1.6

6685.289

1.9

2.4

21.638

75.896

3
4

7301.3

5.2

4.5

6759.234

3.0

2.0

6739.306

3.3

2.4

17.023

49.662

7381.9

4.5

4.0

6796.513

2.2

1.6

6771.927

2.0

2.2

22.223

63.590

1

7467.5

4.7

4.2

6826.362

1.8

1.8

6814.966

2.6

2.4

8.039

48.479

2

7607.7

7.7

5.5

6926.023

6.0

3.2

6902.290

5.2

3.2

21 .288

21.638

3
4

7676.0

3.6

5.1

6943.820

1.0

2.7

6905.034

0.2

2.5

37.903

17.023

7792.9

6.2

5.6

7017.379

4.3

3.2

6981.692

4.5

3.1

32.922

22.223

1997 1

1996

7933.6

7.4

6.2

7101.617

4.9

4.0

7034.087

3.0

3.2

63.657

8.039

2

8034.3

5.2

5.6

7159.627

3.3

3.4

7077.749

2.5

2.5

77.603

21.288

3
4

8124.3

4.6

5.8

7214.017

3.1

3.9

7160.333

4.7

3.7

47.539

37.903

8231.8

5.4

5.6

7283.330

3.9

3.8

7204.494

2.5

3.2

73.978

32.922

Consumption

1993
1994
1995
1996
1997
1994 1

Durables Consumption

Billions
of 1992 $

Percent chanae
Annual Year
rate
ago

4343.563
4485.981
4595.273

Private Fixed Investment

Billions
of 1992 $

Percent chanae
Annual Year
rate
ago

2.9

523.841

3.3

561.189

2.4

583.598

4714.061

2.6

61 1.107

4869.3 07

3.3

645.456

Nonresidentiai investment

Billions
of 1992 $

Percent chanae
Annual Year
rate
ago

Billions
of 1992 $

Percent chanae
Annual Year
rate
ago

7.2

842.772

7.6

600.167

7.6

7.1

915.536

8.6

648.361

8.0

4.0

962.1 19

5.1

706.513

9.0

4.7

1041.699

8.3

771.683

9.2

5.6

1 122.232

7.7

846.763

9.7

4439.436

3.8

3.6

550.661

6.4

9.2

887.795

3.2

9.0

626.191

0.4

8.4

2

4 4 72.224

3.0

3.5

555.796

3.8

7.0

913.178

11.9

9.9

641.209

9.9

7.8

3
4

4498.218

2.3

3.0

561.741

4.3

6.0

922.712

4.2

9.3

653.153

7.7

8.5

4534.1 29

3.2

3.1

576.563

11.0

6.3

938.467

7.0

6.6

672.890

12.6

7.6

1995 1

4551.303

1.5

2.5

572.230

-3 .0

3.9

955.820

7.6

7.7

695.674

14.2

1 1.1

2

4583.4 5 8

2.9

2.5

577.706

3.9

3.9

954.034

-0 .7

4.5

705.353

5.7

10.0

3
4

4612.9 12

2.6

2.5

590.755

9.3

5.2

962.315

3.5

4.3

708.231

1.6

8.4

4633.4 63

1.8

2.2

593.701

2.0

3.0

976.315

5.9

4.0

716.800

4.9

6.5

4669.3 73

4.8

736.939

1 1.7

5.9

1996 1

600.662

1001.533

10.7

2.8

614.771

4.8
9.7

5.0

4712.2 0 4

3.1
3.7

2.6

2

6.4

1035.683

14.4

8.6

759.734

13.0

7.7

3
4

4718.196

0.5

2.3

61 1.864

-1 .9

3.6

1060.886

10.1

10.2

789.290

16.5

1 1.4

4756.427

3.3

2.7

617.131

3.5

3.9

1068.696

3.0

9.5

800.771

5.9

1 1.7

1997 1

4818.079

5.3

3.2

637.766

14.1

6.2

1079.006

3.9

7.7

808.932

4.1

9.8

2

4829.430

0.9

2.5

628.992

-5 .4

2.3

1 1 1 1.393

12.6

7.3

836.993

14.6

10.2

3
4

4896.187

5.6

3.8

656.140

18.4

7.2

1 149.303

14.4

8.3

874.482

19.2

10.8

3.1

3.7

658.924

1.7

6.8

1 149.225

-0 .0

7.5

866.644

-3 .5

8.2

4933.532



NationaìEconomicTrends
Percent change
Annual
Year
rate
ago

Index

102.643

2.6

105.088

2.4

Index
1993
1994
1995
1996
1997

ECI: Benefits

ECI: Wages

Employment Cost Index

GDP Chain Price Index

Percent change
Annual
Year
rate
ago

Percent chanqe
Annual
Year
rate
ago

Percent change
Annual
Year
rate
ago

Index

118.4

3.6

1 15.2

2.9

127.0

5.4

122.3

3.3

118.5

2.9

132.0

4.0
2.2

Index

107.763

2.5

125.6

2.8

121.9

2.9

135.0

1*10.224

2.3

129.2

2.8

125.9

3.3

137.4

1.8

1 12.449

2.0

133.2

3.1

130.4

3.6

140.2

2.1

1994 1
2
3
4

104.156

2.5

2.3

120.8

3.0

3.3

1 17.1

2.1

2.8

130.3

4.4

104.736

2.2

2.3

121.8

3.4

3.3

1 18.1

3.5

3.1

131.5

3.7

4.0

105.391

2.5

2.5

122.8

3.3

3.3

1 19.0

3.1

2.9

132.8

4.0

4.0

106.071

2.6

2.5

123.6

2.6

3.1

119.8

2.7

2.8

133.5

2.1

3.6

1995 1
2
3
4

106.933

3.3

2.7

124.4

2.6

3.0

120.6

2.7

3.0

133.9

1.2

2.8

1996 1
2
3
4
1997 1
2
3
4

107.485

2.1

2.6

125.2

2.6

2.8

121.5

3.0

2.9

134.6

2.1

2.4

108.031

2.0

2.5

126.0

2.6

2.6

122.4

3.0

2.9

135.3

2.1

1.9

108.603

2.1

2.4

126.9

2.9

2.7

123.2

2.6

2.8

136.0

2.1

1.9

109.349

2.8

2.3

127.7

2.5

2.7

124.4

4.0

3.2

136.0

0.0

1.6

109.857

1.9

2.2

128.8

3.5

2.9

125.5

3.6

3.3

137.0

3.0

1.8

1 10.588

2.7

2.4

129.7

2.8

2.9

126.4

2.9

3.3

137.7

2.1

1.8

1 1 1.103

1.9

2.3

130.6

2.8

2.9

127.4

3.2

3.4

138.7

2.9

2.0

1 1 1.775

2.4

2.2

131.4

2.5

2.9

128.5

3.5

3.3

138.7

0.0

2.0

1 12.272

1.8

2.2

132.5

3.4

2.9

129.7

3.8

3.3

139.7

2.9

2.0

1 12.673

1.4

1.9

133.6

3.4

3.0

130.9

3.8

3.6

140.4

2.0

2.0

1 13.078

1.4

1.8

135.2

4.9

3.5

132.5

5.0

4.0

141 .9

4.3

2.3

Exports

1993
1994
1995
1996
1997
1994 1
2
3
4
1995 1
2
3
4
1996 1
2
3
4

4.3

Imports

Billions
of 1992 $

Percent change
Annual
Year
rate
ago

Billions
of 1992 $

Nonfarm Output per Hour

Percent change
Annual
Year
rate
ago

Index

Nonfarm Compensation/Hr

Percent change
Annual
Year
rate
ago

Index

Percent change
Annual
Year
rate
ago

658.183

2.9

728.409

8.9

100.1

0.1

102.3

712.399

8.2

817.026

12.2

100.5

0.4

104.1

1.8

791.213

1 1.1

890.057

8.9

100.7

0.2

106.7

2.5

2.3

857.022

8.3

971.469

9.1

102.6

1.9

1 10.8

3.8

963.643

12.4

1 1 10.004

14.3

104.4

1.8

1 15.0

3.8

676.029

-1 .8

4.4

773.638

7.6

10.2

100.6

-1 .2

0.5

103.8

3.1

2.2

704.131

17.7

6.7

808.022

19.0

11.8

100.7

0.4

1.1

103.9

0.4

1.8

722.105

10.6

1 1.7

833.229

13.1

14.2

100.4

-1 .2

0.4

104.2

1.2

1.7

747.330

14.7

10.0

853.197

9.9

12.3

100.7

1.2

-0 .2

104.9

2.7

1.8

760.368

7.2

12.5

873.861

10.0

13.0

100.3

-1 .6

-0 .3

105.5

2.3

1.6

777.447

9.3

10.4

890.284

7.7

10.2

100.5

0.8

-0 .2

106.3

3.1

2.3

802.435

13.5

11.1

895.368

2.3

7.5

100.8

1.2

0.4

107.1

3.0

2.8

824.604

1 1.5

10.3

900.720

2.4

5.6

101.4

2.4

0.7

108.1

3.8

3.1

828.178

1.7

8.9

928.963

13.1

6.3

102.1

2.8

1.8

109.1

3.8

3.4

847.444

9.6

9.0

960.043

14.1

7.8

102.8

2.8

2.3

1 10.5

5.2

4.0

851.382

1.9

6.1

990.240

13.2

10.6

102.6

-0 .8

1 .8

1 1 1.4

3.3

4.0

901.071

25.5

9.3

1006.623

6.8

1 1.8

103.1

2.0

1.7

1 12.3

3.3

3.9

922.652

9.9

1 1.4

1048.941

17.9

12.9

103.4

1.2

1.3

1 13.5

4.3

4.0

962.500

18.4

13.6

1099.106

20.5

1 14.4

3.2

3.5

973.025

4.4

14.3

1 137.097

10.0
996.396



10.6

1 154.871

1997 1
2
3
4

14.5

104.0

2.3

1.2

14.6

14.8

104.9

3.5

2.2

1 15.5

3.9

3.7

6.4

14.7

105.4

1.9

2.2

1 16.9

4.9

4.1

23

National EconomicTrends
Nonfarm Payroll Employment

Household Survey Employment
Thousands Change
1993
1994
1995
1996
1997

120259
123069
124903
126708
129557

1771
2810
1834
1805
2849

1995

1
2
3
4

124897
124666
124843
125207

449
-2 3 2
177
365

1996

1
2
3
4

125656
126323
127067
127787

1997

1
2
3
4

Percent chanae
Year
Annual
rate
ago

Nonfarm Aggregate Hours

Percent chanae
Annual Year
rate
ago
Thousands Change

Index

Percent chanae
Monthly Annual
Year
rate
rate
ago

1.9
3.1
2.7
2.0
2.3

124.5
129.8
133.4
136.4
140.6

2.9
4.2
2.8
2.2
3.1

1.5
2.3
1.5
1.4
2.2

110707
114145
117195
119517
122264

21 16
3438
3051
2322
2746

1.5
-0 .7
0.6
1.2

2.4
1.7
1.3
0.6

116482
116937
117414
1 17949

873
455
478
534

3.1
1.6
1.6
1.8

3.4
2.9
2.4
2.0

133.0
132.9
133.6
134.2

0.8
-0.1
0.6
0.4

3.2
- 0 .4
2.3
1.7

4.3
2.7
2.5
1.7

449
667
744
720

1.4
2.1
2.4
2.3

0.6
1.3
1.8
2.1

1 18471
119248
1 19898
120452

522
778
649
555

1.8
2.7
2.2
1.9

1.7
2.0
2.1
2.1

134.3
136.1
137.0
138.1

0.1
1.3
0.7
0.8

0.4
5.5
2.7
3.1

1.0
2.5
2.5
2.9

128697
129387
129723
130421

910
690
336
698

2.9
2.2
1.0
2.2

2.4
2.4
2.1
2.1

121138
121854
122575
123487

686
715
721
913

2.3
2.4
2.4
3.0

2.3
2.2
2.2
2.5

139.5
140.1
140.6
142.2

1.0
0.4
0.4
1.1

4.1
1.7
1.6
4.5

3.8
2.9
2.6
3.0

1996 Jan
Feb
Mar

125246
125771
125951

130
525
180

1.3
5.1
1.7

0.4
0.6
0.8

1 18058
118550
1 18804

-6 2
492
254

-0 .6
5.1
2.6

1.6
1.7
1.8

132.5
135.1
135.4

- 1 .0
2.0
0.2

-1 1 .8
26.3
2.7

■0.8
1.9
2.0

Apr
May
Jun

126057
126321
126591

106
264
270

1.0
2.5
2.6

0.9
1.5
1.7

1 18966
119263
119516

162
297
253

1.6
3.0
2.6

1.8
2.1
2.1

135.1
135.7
137.6

- 0 .2
0.4
1.4

- 2 .6
5.5
18.2

1.0
2.9
3.5

Jul
Aug
Sep

126867
126995
127338

276

2.6

175

1.8

2.2

119983
120019

292
36

3.0
0.4

2.1
2.0

136.1
137.1
137.9

-1.1
0.7
0.6

-1 2 .3

1.2
3.3

1.7
1.8
1.9

119691

128
343

9.2
7.2

1.9
2.8
3.0

Oct
Nov
Dec

127715
127746
127899

377
31
153

3.6
0.3
1.4

1.9
2.0
2.2

120248
120450
120659

229
202
209

2.3
2.0
2.1

2.1
2.1
2.1

137.2
137.9
139.1

- 0 .5
0.5
0.9

-5 .9
6.3
1 1.0

2.1
2.7
3.9

1997 Jan
Feb
Mar

128541
128515
129035

642
-2 6
520

6.2
-0 .2
5.0

2.6
2.2
2.4

120909
121162
121344

250
253
182

2.5
2.5
1.8

2.4
2.2
2.1

138.2
140.0
140.2

-0 .6
1.3
0.1

-7 .5
16.8
1.7

4.3
3.6
3.5

Apr
May
Jun

129275
129494
129392

240
219
-1 0 2

2.3
2.1
-0 .9

2.6
2.5
2.2

121671
121834
122056

327
163
222

3.3
1.6
2.2

2.3
2.2
2.1

139.6
140.0
140.6

-0.4
0.3
0.4

-5 .0
3.5
5.3

3.3
3.2
2.2

Jul
Aug
Sep

129661
129747
129761

269
86
14

2.5
0.8
0.1

2.2
2.2
1.9

122440
122492
122792

384
52
300

3.8
0.5
3.0

2.3
2.1
2.3

140.2
140.8
140.9

-0 .3
0.4
0.1

-3.4
5.3
0.9

3.0
2.7
2.2

Oct
Nov
Dec

129910
130575
130777

149
665
202

1.4
6.3
1.9

1.7
2.2
2.3

123083
123512
123867

291
429
355

2.9
4.3
3.5

2.4
2.5
2.7

141.2
142.9

0.2

2.6
15.4

1998 Jan

131083

306

2.8

2.0

124225

358

3.5

2.7


http://fraser.stlouisfed.org/
Federal24
Reserve Bank of St. Louis

142.5

1.2
-0 .3

-3 .3

2.9
3.6
2.4

143.4

0.6

7.8

3.8

National EconomicTrends
Industrial Production

Retail Sales
Unempl.
Rate

Billions
of dollars

Percent chanae
Monthly/ Annual
Year
quarterly rate
ago

1993
1994
1995
1996
1997

6.9
6.1
5.6
5.4
5.0

2071.178
2224.913
2326.536
2440.312
2548.930

6.5
7.4
4.6
4.9
4.5

103.554
109.171
1 14.543
1 18.499
124.41 1

1
2
3
4

5.5
5.6
5.7
5.6

573.137
578.680
585.146
589.573

0.2
1.0
1.1
0.8

0.8
3.9
4.5
3.1

5.6
5.2
4.5
3.1

1 13.488
1 13.949
1 15.216
1 15.519

1.4
0.4
1.1
0.3

1996

1
2
3
4

5.6
5.4
5.3
5.3

600.484
609.371
61 1.126
619.331

1.9
1.5
0.3
1.3

7.6
6.1
1.2
5.5

4.8
5.3
4.4
5.0

1 16.105
1 18.228
1 19.270
120.393

1997

1
2
3
4

5.3
4.9
4.9
4.7

635.027
630.244
641.726
641.933

2.5
-0 .8
1.8
0.0

10.5
-3 .0
7.5
0.1

5.8
3.4
5.0
3.6

1996 Feb
Mar

5.5
5.5

201.085
201.685

1.7
0.3

22.5
3.6

Apr
May
Jun

5.5
5.5
5.3

202.496
204.177
202.698

0.4
0.8
-0 .7

Jul
Aug
Sep

5.5
5.2
5.2

203.090
203.087
204.949

Oct
Nov
Dec

5.3
5.4

206.693
205.966

5.3

1997 Jan
Feb
Mar

Index

Percent chanae
Monthly/ Annual
Year
quarterly rate
ago

Treasury
Yields
3 -m o

10-yr

3.00
4.25
5.49

3.6
5.4
4.9
3.5
5.0

5.01
5.06

5.86
7.08
6.58
6.44
6.35

5.9
1.6
4.5
1.1

6.5
5.1
4.9
3.3

5.74
5.60
5.37
5.26

7.48
6.62
6.32
5.89

0.5
1.8
0.9
0.9

2.0
7.5
3.6
3.8

2.3
3.8
3.5
4.2

4.93
5.02
5.10
4.98

5.91
6.72
6.78
6.34

121.940
123.312
125.1 19
127.275

1.3
1.1
1.5
1.7

5.2
4.6
6.0
7.1

5.0
4.3
4.9
5.7

5.06
5.05
5.05
5.09

6.56
6.70
6.24
5.90

6.1
5.6

1 16.725
1 16.288

1.2
-0 .4

15.9
-4 .4

2.9
2.4

4.83
4.96

5.81
6.27

4.9
10.4
-8 .4

6.0
5.8
4.2

1 17.530
1 18.257
1 18.897

1.1
0.6
0.5

13.6
7.7
6.7

3.5
3.8
4.0

4.95
5.02
5.09

6.51
6.74
6.91

0.2
-0 .0
0.9

2.3
-0 .0
1 1.6

4.5
3.7
5.1

1 18.943
1 19.253
1 19.613

0.0
0.3
0.3

0.5
3.2
3.7

4.1
3.3
3.2

5.15
5.05
5.09

6.87
6.64
6.83

10.7
-4.1

6.1
4.7
4.4

119.650
120.587

0.0
0.8

120.943

0.3

0.4
9.8
3.6

3.7
4.3
4.7

4.99
5.03
4.91

6.53
6.20

206.672

0.9
-0 .4
0.3

6.30

5.3
5.3
5.2

209.663
213.022
212.342

1.4
1.6
-0 .3

18.8
21.0
-3 .8

6.0
5.9

121.288
122.064

3.5

5.3

122.468

0.3
0.6
0.3

8.0
4.0

5.2
4.6
5.3

5.03
5.01
5.14

6.58
6.42
6.69

Apr
May
Jun

5.0
4.8
5.0

209.934

-1.1
-0 .3
0.7

-1 2 .8
-3 .2
9.4

3.7

209.370
210.940

2.5
4.1

123.073
123.316
123.546

0.5
0.2
0.2

6.1
2.4
2.3

4.7
4.3
3.9

5.16
5.05
4.93

6.89
6.71
6.49

Jul
Aug
Sep

4.9
4.9
4.9

213.549
214.372
213.805

1.2
0.4
-0 .3

15.9
4.7
-3.1

5.1
5.6
4.3

124.527
125.246
125.585

0.8
0.6
0.3

10.0
7.2
3.3

4.7
5.0
5.0

5.05
5.14
4.95

6.22
6.30
6.21

Oct
Nov
Dec

4.8
4.6
4.7

213.517
213.834
214.582

-0.1
0.1
0.3

-1 .6
1.8
4.3

3.3
3.8
3.8

126.550
127.378
127.896

0.8
0.7
0.4

9.6
8.1
5.0

5.8
5.6
5.7

4.97
5.14
5.16

6.03
5.87
5.81

1998 Jan
Feb

4.7

214.760

0.1

1.0

2.4

127.925

0.0

0.3

5.5

5.04
5.09

5.54
5.57

1995




4.2

25

National EconomicTrends
V/UIÖUIIKI DH« IIIUCA

Index

nuuuwmiwiinwA

less Food and Energy

Consumer Price Index
Percent chanae
Year
Monthly/ Annual
quarterly rate
ago

Year
to date

Index

Finished Goods

Percent chanae
Monthly/ Annual
Year
quarterly rate
ago

Year
to date

Index

Percent chanae
Monthly/ Annual
Year
quarterly rate
ago

1993
1994
1995
1996
1997

144.6
148.3
152.5
157.0
160.6

1995

1
2
3
4

150.9
152.2
153.0
153.9

0.6
0.8
0.5
0.6

2.6
3.4
2.1
2.5

2.8
3.0
2.6
2.6

2.6
3.0
2.7
2.6

159.6
160.9
162.0
163.2

.0.8
0.8
0.7
0.7

3.2
3.4
2.8
2.9

2.9
3.0
3.0
3.1

3.2
3.3
3.1
3.1

127.1
127.9
128.0
128.7

0.9
0.6
0.1
0.6

3.6
2.5
0.2
2.4

1.7
2.1
1.6
2.2

1996

1
2
3
4

155.1
156.5
157.5
158.8

0.8
0.9
0.6
0.8

3.2
3.7
2.4
3.3

2.8
2.9
2.9
3.2

3.2
3.5
3.1
3.2

164.2
165.2
166.3
167.4

0.7
0.6
0.7
0.6

2.6
2.5
2.7
2.6

2.9
2.7
2.7
2.6

2.6
2.5
2.6
2.6

129.9
131.1
131.5
132.6

0.9
0.9
0.3
0.8

3.8
3.7
1.2
3.3

2.2
2.5
2.8
3.0

1997

1
2
3
4

159.6
160.2
160.9
161.8

0.5
0.3
0.5
0.5

2.2
1.3
1.9
2.1

2.9
2.3
2.2
1.9

2.2
1.8
1.8
1.9

168.3
169.4
170.2
171.1

0.5
0.7
0.4
0.5

2.2
2.7
1.7
2.1

2.5
2.5
2.3
2.2

2.2
2.4
2.2
2.2

132.7
131.7
131.4
131.7

0.1
-0 .8
-0 .2
0.2

0.2
-3 .0
-0 .8
0.8

2.1
0.4
-0.1
-0 .7

1996 Jan
Feb
Mar

154.7
155.0
155.6

0.4
0.2
0.4

4.8
2.4
4.7

2.7
2.7
2.9

4.8
3.6
4.0

163.9
164.2
164.6

0.3
0.2
0.2

3.7
2.2
3.0

3.0
2.9
2.9

3.7
3.0
3.0

129.7
129.7
130.4

0.3
0.0
0.5

3.8
0.0
6.7

2.2
2.0
2.4

Apr
May
Jun

156.2
156.6
156.8

0.4
0.3
0.1

4.7
3.1
1.5

2.9
2.9
2.8

4.1
3.9
3.5

164.9
165.2
165.6

0.2
0.2
0.2

2.2
2.2
2.9

2.7
2.7
2.7

2.8
2.7
2.7

130.9
131.1
131.4

0.4
0.2
0.2

4.7
1.8
2.8

2.4
2.4
2.7

Jul
Aug
Sep

157.2
157.4
157.8

0.3
0.1
0.3

3.1
1.5
3.1

2.9
2.9
3.0

3.5
3.2
3.2

166.0
166.3
166.7

0.2
0.2
0.2

2.9
2.2
2.9

2.7
2.7
2.6

2.7
2.7
2.7

131.3
131.5
131.8

-0.1
0.2
0.2

-0 .9
1.8
2.8

2.6
2.9
2.9

Oct
Nov
Dec

158.3
158.8
159.2

0.3
0.3
0.3

3.9
3.9
3.1

3.0
3.2
3.3

3.3
3.3
3.3

167.1
167.4
167.7

0.2
0.2
0.2

2.9
2.2
2.2

2.6
2.6
2.6

2.7
2.7
2.6

132.3
132.5
133.0

0.4
0.2
0.4

4.6
1.8
4.6

3.1
3.0
2.9

1997 Jan
Feb
Mar

159.4
159.7
159.8

0.1
0.2
0.1

1.5
2.3
0.8

3.0
3.0
2.7

1.5
1.9
1.5

168.0
168.3
168.6

0.2
0.2
0.2

2.2
2.2
2.2

2.5
2.5
2.4

2.2
2.2
2.2

133.0
132.6
132.4

0.0
-0 .3
-0 .2

0.0
-3 .5
-1 .8

2.5
2.2
1.5

Apr
May
Jun

160.0
160.1
160.4

0.1
0.1
0.2

1.5
0.8
2.3

2.4
2.2
2.3

1.5
1.4
1.5

169.2
169.4
169.7

0.4
0.1
0.2

4.4
1.4
2.1

2.6
2.5
2.5

2.7
2.5
2.4

131.9
131.7
131.4

-0 .4
-0 .2
-0 .2

-4 .4
-1 .8
-2 .7

0.8
0.5
0.0

Jul
Aug
Sep

160.6
160.9
161.3

0.1
0.2
0.2

1.5
2.3
3.0

2.2
2.2
2.2

1.5
1.6
1.8

170.0
170.1
170.4

0.2
0.1
0.2

2.1
0.7
2.1

2.4
2.3
2.2

2.4
2.2
2.2*

131.1
131.3
131.8

-0 .2
0.2
0.4

-2 .7
1.8
4.7

-0 .2
-0 .2
0.0

Oct
Nov
Dec

161.6

0.2
0.1
0.1

2.3
1.5
0.7

2.1
1.9
1.7

1.8
1.8
1.7

170.8
171.0
171.4

0.2
0.1
0.2

2.9
1.4
2.8

2.2
2.2
2.2

2.2

161.8
161.9

2.1
2.2

131.9
131.7
131.4

0.1
-0 .2
-0 .2

0.9
-1 .8
-2 .7

-0 .3
-0 .6
-1 .2

1998 Jan

161.9

0.0

0.0

1.6

0.0

171.7

0.2

2.1

2.2

2.1

130.5

-0 .7

-7 .9

-1 .9


http://fraser.stlouisfed.org/
Federal 26
Reserve Bank of St. Louis

3.0
2.6
2.8
2.9
2.3

3.3
2.8
3.0
2.7
2.4

152.4
156.7
161.4
165.8
169.7

124.7
125.5
127.9
131.3
131.9

1.2
0.6
1.9
2.6
0.4

Nat iona IEconomic Trends
Notes
Pages 4, 5: Final sales is gross domestic product (GDP) minus change
in business inventories. Advance, preliminary, and final GDP
growth rates are released during the first, second, and third months of
the following quarter. Changes result from incorporation of more com­
plete information. The Purchasing Managers’ Index is a weighted
average o f diffusion indexes for new orders, production, supplier deliv­
eries, inventories, and employment. The National Association of Pur­
chasing Management (NAPM) surveys over 300 firms in 20 manufac­
turing industries, weighting responses by industry share of GDP. Ag­
gregate and average weekly hours are paid hours of production and
nonsupervisory employees. The inventory-sales ratio uses nominal
(current-dollar) inventory and sales data.
Page 6: The contribution of a component X, to the overall GDP
growth rate in quarter t is 100 x f(l + (X, - X,.i)IGDP,.i)*- 1], The sign
is changed for imports. This calculation forces components to add up
to the GDP growth rate before compounding and does not exactly
match Survey o f Current Business, Table 8.2. The residual line is
calculated using the finest level of detail in the table.
Page 7: Ten-year Treasury yields are adjusted to constant maturity.
Three-month yields are secondary market averages, but all rates used in
the yield curves are adjusted to constant maturity. The total return on
the Standard and Poor’s 500 is dividends as a percent of the value of
the index plus the percent change in the index.
Pages 8,9: Oil prices are monthly averages of daily spot prices for
West Texas intermediate crude ( Wall Street Journal). Consumer price
index is for all urban consumers. The consumption chain price index
is the index associated with the personal consumption expenditures
component of GDP. The Employment Cost Index (ECI) covers pri­
vate nonfarm employers. ECI compensation refers to a fixed sample
of jobs, while compensation per hour covers all workers in the non­
farm business sector in a given quarter. In both cases, compensation is
wages and salaries plus benefits.
Pages 10,11: Nonfarm payroll employment is counted in a survey of
about 390,000 establishments (Current Employment Survey). It ex­
cludes self-employed individuals and workers in private households,
but double-counts individuals with more than one job. The household
survey (Current Population Survey) of about 50,000 households pro­
vides estimates o f civilian employment, unemployment rate, labor force
participation rate, ^nd employment-population ratio. Population is
civilian, noninstitutional, 16 years and over. New population controls
introduced in January 1997 affect levels and growth rates of household
survey employment, labor force and population. The unemployment
rate and other ratios are minimally affected. 90 percent confidence
intervals for the unemployment rate (± 0.2 percentage points) and
change in household survey employment (± 376,000) measure uncer­
tainty due to sample size. The household survey was changed in Janu­
ary 1994, so care should be exercised in making short-term compari­
sons around this date, particularly with the duration data shown on
page 10. Other changes in the survey are detailed in Bureau of Labor
Statistics, Em ploym ent and Earnings, Appendix A.
Pages 12, 13: Debt service is an estimate of scheduled interest and
principal payments on outstanding debt. The Michigan consumer
sentiment index shows changes in a summary measure of consumers’
answers to five questions about their current and expected financial
situation, expectations about future economic conditions, and attitudes
about making large purchases. The survey is based on a representative
sample o f U.S. households.
Pages 14, 15: Overall gross saving includes government saving,
which is the sum o f the government surplus and capital consumption
(see notes for pages 16 and 17). Net foreign investment (NFI) is U.S.
investment abroad minus foreign investment in the U.S. Aside from a
statistical discrepancy, NFI also equals the difference between gross
domestic investment and saving.




Pages 16, 17: Government consumption and investment is current
expenditures on goods and services, including capital consumption
(depreciation) and gross investment, as reported in the National Income
and Product Accounts (NIPA). The unified federal budget deficit
differs from NIPA basis in four main ways: (1) NIPA excludes trans­
actions involving existing assets; (2) NIPA outlays exclude government
investment and include consumption o f government capital, while
unified budget outlays do the reverse; (3) NIPA accounts exclude
Puerto Rico and U.S. territories; and (4) various timing issues are
handled differently. Outlays and receipts are from the NIP As, except
as noted. Since 1977, the federal fiscal year starts on October 1.
Excluded agency debt was 0.6 percent o f federal debt at the end of
fiscal 1997. Federal debt held by the public includes holdings o f the
Federal Reserve System and excludes holdings o f the social security
and other federal trust funds. Federal grants in aid to state and local
governments appear in both state and local receipts and federal outlays.
Pages 18, 19: The trade balance (shown on a balance o f payments
basis) is the difference between exports and imports of goods (mer­
chandise) and services. It is nearly identical in concept to the net ex­
ports component of GDP, but differs slightly in accounting details.
The investment income balance equals income received from U.S.owned assets in other countries minus income paid on foreign-owned
assets in the U.S. The investment income balance is nearly identical in
concept to the difference between gross national product and gross
domestic product, but differs in accounting details. The current ac­
count balance is the trade balance plus the balance on investment
income plus net unilateral transfers to the U.S. from other countries.
Pages 20, 21: Output per hour (Y/H), unit labor cost (C/Y), and
compensation per hour (C/H) are indexes which approximately obey
the following relationship: %(Y/H) + %(C/Y) = %(C/H) with %()
meaning percent changes. Unit labor cost is shown on page 9. Real
compensation per hour uses the CPI to adjust for the effects of infla­
tion. Multifactor productivity estimates changes in output that do not
correspond to changes in quantities o f labor, capital, or intermediate
inputs. Inventory valuation adjustments (IVA) remove the effect of
changes in the value o f existing inventories from corporate profits and
proprietors’ income. (This change in value does not correspond to
current production and therefore is not part o f GDP). Capital con­
sumption adjustments (CCAdj) increase profits and proprietors’
income by the difference between estimates of economic depreciation
and depreciation allowed by the tax code. Components of national
income not shown are rental incom e o f persons and net interest.

Sources
Bureau o f Economic A nalysis (BEA), U.S. Dept, o f Comm erce
National income and product accounts, international trade and in­
vestment data (except by country), auto and light truck sales
Census Bureau, U.S. Dept, o f C om m erce
Inventory-sales ratios, retail sales, capital goods orders, housing
starts, exports and imports by country
Bureau o f Labor Statistics (B L S), U.S. Dept, o f Labor
All employment-related data, employment cost index, consumer and
producer price indexes, unit labor cost, output per hour, compensa­
tion per hour, total factor productivity
United States D epartm ent o f Treasury
Unified budget receipts, outlays, deficit, debt
Federal Reserve B oard
,t
Index of industrial production, treasury yields, exchange rates, capac­
ity utilization, consumer debt service
The Survey Research Center, The U niversity o f M ichigan
Consumer sentiment index
The Conference B oard
Help-wanted advertising index
Organization fo r E conom ic Cooperation and D evelopm ent (OECD)
GDP for major trading partners (not available on FRED)

27

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