Full text of National Economic Trends : March 1998
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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 Federal Reserve Bank of St. Louis Post Office Box 442 St. Louis, Missouri 63166 Subscriber: Please include address label with subscription inquiries or address changes. 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