Full text of National Economic Trends : November 1999

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November 1999

NationalEconomicTrends

Putting Business
Software Purchases into
the National Accounts
The U.S. economy is constantly evolving. New
technologies are continuously transforming the production and delivery of new and existing goods and
services. Business practices adapt just as readily to
changes in technology. Today, for example, the
scramble for market share and profitability forces
firms to find innovative ways to add value to their
firm’s products or services.
These innovations often require computer hardware
and software. In the past, when businesses generally
used mainframe computers, they acquired the hardware
and software as a bundle. With the advent of personal
computers and minicomputers, a greater percentage of
business software was purchased separately from hardware. Yet business software continued to count as an
investment in the National Income and Product Accounts
(NIPA) only when purchased as installed software on a
new computer. Software purchased separately was considered an intermediate input and did not count as capital
investment. Hence, the unbundling of computer hardware and software purchases led to the unintended consequence of classifying a considerable portion of business software expenditures as intermediate products.
Given the boom in computer purchases, and the fact
that computer software, like other capital expenditures,
provides a flow of services that lasts more than a year,
the Bureau of Economic Analysis (BEA) recognized
the need to address this issue, and did so in the Oct. 28
release of the advance third-quarter GDP report.
Accompanying the advance report was the 11th comprehensive revision of the NIPA. The BEA will now
treat business purchases of computer software and
“in-house” software production as fixed investments
to remedy the classification problem discussed above.

Adding business software purchases to the new
equipment and software (E&S) component of nonresidential fixed investment—formerly known as producers’ durable equipment (PDE)—raises the level of GDP.
In 1998, for example, the nominal value of software
investment totaled $123.4 billion, which was 15.1
percent of E&S investment and 1.4 percent of GDP.
A back-of-the-envelope calculation shows that reclassifying software purchases as fixed investment boosted
the growth of real GDP by about 0.1 percentage point
a year during this business expansion (first quarter of
1991 to second quarter of 1999). Moreover, with software prices falling much less than prices of computers
and peripheral equipment during this period (1.6 percent versus 19.3 percent), the inclusion of software
prices has had the effect of slowing the rate of decline
of prices of information processing equipment (computers, software and other equipment). This explains why
the growth of real information processing equipment
was revised down from 19.4 percent to 17.1 percent.
This comprehensive revision also reclassified
the counting of government employees’ pension
contributions as personal saving, not government
saving. Another significant change is the use of
the Bureau of Labor Statistics’ new CPI research
series using current methods to calculate real personal consumption expenditures (PCE). As discussed in the August 1999 issue of National
Economic Trends, this retrospective consumer
price index grew by about 0.3 percentage points
per year less than the currently published CPI
between 1983 and 1998, so the published figures
for real PCE growth should increase commensurately. Finally, the BEA introduced a new measure
of banking output that will strive to measure productivity gains in this industry more accurately.
The net result of the comprehensive revision was
to boost the average annual growth rate of real GDP
during this expansion from 3.1 percent to 3.5 percent.
—Kevin L. Kliesen

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

TableofContents
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

Conventions used in this publication:
1. Shaded areas indicate recessions, as determined by the National Bureau of Economic Research.
2. 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 t is:

100 x

[ ( XXt –1t )

4

–1

]

For monthly data replace 4 with 12.
3. 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.

NationalEconomicTrends

Real GDP Growth

11/03/99

Consumer Price Index

Industrial Production

Interest Rates

Change in Nonfarm Payrolls

Unemployment Rate

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Real Gross Domestic Product

Industrial Production and Purchasing Managers’ (NAPM) Indexes

Aggregate Private Nonfarm Hours

Real Change in Private Inventories

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Real Final Sales and GDP

Real GDP Revisions

Industrial Production and NAPM Index

Nominal Gross Domestic Product

Aggregate Private Nonfarm Hours

Average Weekly Private Nonfarm Hours

Real Change in Private Inventories

Inventory-Sales Ratio

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Contribution of Components to Real GDP Growth

Contributions to Real GDP Growth Rate
1997
4th

1998
1st

2nd

3rd

4th

Federal Reserve Bank of St. Louis

1999
1st

2nd

3rd

NationalEconomicTrends

11/03/99

Interest Rates

Treasury Yield Curve

Standard and Poor’s 500 Index with Reinvested Dividends

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

GDP Chain Price Index

Consumer Price Index

Producer Price Index, Finished Goods

Employment Cost Index and Compensation per Hour

Federal Reserve Bank of St. Louis

NationalEconomicTrends

GDP Chain Price Index

11/03/99

Crude Oil Price

Consumer Price Index

Consumption Chain Price Index

Producer Price Index, Finished Goods

Unit Labor Cost

Employment Cost Index

Compensation per Hour

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Employment

Unemployment, Labor Force Participation and Employment Rates

Duration of Unemployment

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Change in Nonfarm Payrolls

Change in Manufacturing Payrolls

Change in Household Employment

Labor Force and Population

Unemployment Rate

Help-Wanted Advertising

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Real Disposable Income

Real Consumption

Retail Sales

Household Debt Outstanding

Federal Reserve Bank of St. Louis

NationalEconomicTrends

Real Disposable Income

11/05/99

Personal Saving Rate

Real Consumption

Real Consumption

Retail Sales

Real Durables Consumption and Vehicle Sales

Consumer Sentiment (U. of Michigan)

Real Durables Consumption

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/05/99

Real Investment

Real Private Fixed Investment

Real Nonresidential and Equipment & Software Investment

Real Residential Investment

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/08/99

Gross Saving Rates and Net Foreign Investment

Real Private Fixed Investment

Nondefense Capital Goods Orders

Real Equipment & Software Investment

Real Nonresidential Investment

Real Residential Investment

Housing Starts

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/08/99

Govt. Consumption and Investment

Government Receipts and Outlays

Government Budgets
Unified Budget

National Income Accounts
State and Local
Receipts

Expenditures

Federal
Surplus or
Deficit(-)

Receipts

Expenditures

Federal
Surplus or
Deficit(-)

Federal Reserve Bank of St. Louis

Receipts

Outlays

Surplus or
Deficit(-)

NationalEconomicTrends

11/05/99

Federal Debt

Federal Deficit

Change in Federal Debt

Federal Deficit, Unified Basis

Federal Government Debt
Total
Public Debt

Held by
Agencies
and Trusts

Total

Federal
Reserve Banks

Federal Reserve Bank of St. Louis

Total

Foreign and
International

NationalEconomicTrends

11/03/99

Trade and Investment Income Balances

Exchange Rates

Goods Export Shares, 1998

Goods Import Shares, 1998
All Other
35.61%

All Other
29.78%

Mexico
11.75%

Mexico
10.32%

Canada
23.37%
Other OECD
14.03%

Canada
18.89%

Other OECD
10.04%
France
2.62%

Japan
8.63%

Germany
3.98%

UK
5.83%

France
2.65%

Japan
13.28%

Federal Reserve Bank of St. Louis

UK
3.80%

Germany
5.43%

NationalEconomicTrends

11/03/99

Trade Balance

Goods Trade

Current Account Balance

Services Trade

Real GDP Growth of Major Trading Partners
United Kingdom

Germany

Canada

France

Japan

Mexico

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Output per Hour and Manufacturing Capacity Utilization

Nonfarm Compensation per Hour

Output per Hour and Multifactor Productivity, Manufacturing

Federal Reserve Bank of St. Louis

NationalEconomicTrends

Nonfarm Output per Hour

11/03/99

Manufacturing Output per Hour

Selected Component Shares of National Income

Corporate Profits after Tax (with IVA and CCAdj)

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Nominal GDP
Billions
of $
1995
1996
1997
1998
1996 1
2

Real GDP

Percent change
Annual
Year
rate
ago

7400.5
7813.2
8300.8
8759.9

FinalSales

Percent chanQe
Annual
Year
rate
ago

Billions
of 1996 $

4.9
5.6
6.2
5.5

7537.100
7813.200
8165.100
8516.300

Billions
of 1996 $

2.7
3.7
4.5
4.3

7505.500
7783.200
8095.700
8441.300

Percent chancie
Annual
Year
rate
ago

Chanqe in
Private lnven~o~es
Billions of 1996 $
Last qtr YeariYear ago

3.2
3.7
4.0
4.3

30.400
30.000
69.100
74.300

7629.6
7782.7
7859.0
7981.4

5.4
8.3
4.0
6.4

4.6
6.0
5.7
6.0

7671.400
7800.500
7843.300
7937.500

2.9
6.9
2.2
4.9

2.6
4.1
3.8
4.2

7664.600
7770.900
7793.500
7903.700

3.6
5.7
1.2
5.8

3.3
4.1
3.3
4.0

5.600
30.300
51 .200
32.900

16.275
15.725
26.275
30.000

8125.9
8259.5
8364.5
8453.0

7.4
6.7
5.2
4.3

6.5
6.1
6.4
5.9

8033.400
8134.800
8214.800
8277.300

4.9
5.1
4.0
3.1

4.7
4.3
4.7
4.3

7981.100
8042.000
8155.300
8204.300

4.0
3.1
5.8
2.4

4.1
3.5
4.6
3.8

51.500
93.100
59.200
72.700

41.475
57.175
59.175
69.125

3

8610.6
8683.7
8797.9

7.7
3.4
5.4

6.0
5.1
5.2

4

8947.6

7.0

5.9

8412.700
8457.200
8536.000
8659.200

6.7
2.1
3.8
5.9

4.7
4.0
3.9
4.6

8307.000
8410.400
8459.600
8588.300

5.1
5.1
2.4
6.2

4.1
4.6
3.7
4.7

107.300
43.100
76.100
70.700

83.075
70.575
74.800
74.300

1999 1
2

9072.7
9146.2
9276.3

5.7
3.3
5.8

5.4
5.3
5.4

8737.900
8778.600
8882.600

3.7
1.9
4.8

3.9
3.8
4.1

8685.200
8757.900
8846.500

4.6
3.4
4.1

4.6
4.1
4.6

50.100
14.000
28.100

60.000
52.725
40.725

3
4
1997 1
2

3
4
1998 1
2

3

Consumption

1995
1996
1997
1998
1996 1
2

Durables Consumption

Private Rxed Investment

Billions
of 1996 $

Percent change
Annual
Year
rate
ago

3.1
3.3
3.7
4.9

583.500
616,500
657.400
731.500

Billions
of 1996 $

Percent change
Annual
Year
rate
ago

5070.100
5237.500
5433.700
5698.600

Nonresidential Investment

Billions
of 1996 $

Percent change
Annual
Year
rate
ago

Billions
of 1996 $

Percent chance
Annual
Year
rate
ago

4.6
5.7
6.6
11.3

1109.200
1212.700
1316.000
1471.800

6.1
9.3
8.5
11.8

817.500
899.400
995.700
1122.500

9.8
10.0
10.7
12.7

5170.300
5227.500
5255.400
5296.800

3.3
4.5
2.2
3.2

3.3
3.4
3.2
3.3

601.700
620.400
618.100
625.700

4.1
13.0
—1.5
5.0

5.5
7.4
4.6
5.0

1165.200
1203.700
1231.600
1250.200

12.0
13.9
9.6
6.2

5.7
9.9
11.2
10.4

861.600
885.600
914.300
936.200

13.1
11.6
13.6
9.9

6.8
9.1
12.0
12.1

5361.100
5385.100
5471.800
5517.100

4.9
1.8
6.6
3.4

3.7
3.0
4.1
4.2

642.100
639.700
669.700
678.000

10.9
—1.5
20.1
5.1

6.7
3.1
8.3
8.4

1274.100
1300.600
1337.900
1351.300

7.9
8.6
12.0
4.1

9.3
8.1
8.6
8.1

957.900
980.800
1018.000
1026.100

9.6
9.9
16.1
3.2

11.2
10.7
11.3
9.6

4

5592.300
5675.600
5730.700
5795.800

5.6
6.1
3.9
4.6

4.3
5.4
4.7
5.1

704.900
723.900
731.200
766.000

16.8
11.2
4.1
20.4

9.8
13.2
9.2
13.0

1424.200
1466.700
1474.000
1522.500

23.4
12.5
2.0
13.8

11.8
12.8
10.2
12.7

1088.600
1120.200
1120.300
1160.800

26.7
12.1
0.0
15.3

13.6
14.2
10.0
13.1

1999 1
2

5888.400
5961.800

6.5
5.1

5.3
5.0

788.800
806.100

12.4
9.1

11.9
11.4

1555.900
1581.000

9.1
6.6

9.2
7.8

1182.700
1202.900

7.8
7.0

8.6
7.4

3

6025.100

4.3

5.1

819.900

7.0

12.1

1615.400

9.0

9.6

1245.400

14.9

11.2

3
4
1997 1
2

3
4
1998 1

2
3

Federal Reserve lank of St. Louis

NationalEconomicTrends
GDP Chain Price Index
Index
1995

1996
1997
1998
1996 1
2

3
4
1997 1
2

3
4

1998 1
2

3
4
1999 1

2
3

Employment Cost Index

Percent change
Annual
Year
rate
ago

98.190
100.000
101.660
102.860

1996 1
2
3
4

1997 1
2
3
4

1998 1
2
3
4
1999 1

2
3

ECI: ~Yages

ECI: Benefits

Index

Percent change
Annual
Year
rate
ago

Index

Percent change
Annual
Year
rate
ago

2.8
2.8
3.1
3.5

121.9
126.0
130.4
135.6

2.9
3.3
3.5
4.0

135.0
137.4
140.2
143.7

2.2
1.8
2.0
2.5

Index

Percent change
Annual
Year
rate
ago

2.1
1.8
1.7
1.2

125.8
129.3
133.3
138.0

99.460
99.770
100.210
100.560

2.4
1.3
1.8
1.4

1.9
1.8
1.8
1.7

127.9
128.9
129.7
130.7

2.9
3.2
2.5
3.1

2.7
2.8
2.9
2.9

124.4
125.6
126.4
127,4

4.0
3.9
2.6
3.2

3.2
3.4
3.3
3.4

136.2
137.0
137.7
138.6

0.6
2.4
2.1
2.6

1.6
1.7
1.8
1.9

101.140
101.530
101.830
102.150

2.3
1.6
1.2
1.3

1.7
1.8
1.6
1.6

131.6
132.7
133.7
135.2

2.8
3.4
3.0
4.6

2.9
2.9
3.1
3.4

128.5
129.7
130.9
132.4

3.5
3.8
3.8
4.7

3.3
3.3
3.6
3.9

138.9
139.7
140.3
141.7

0.9
2.3
1.7
4.1

2.0
2.0
1.9
2.2

102.410
102.700
103.060
103.280

1.0
1.1
1.4
0.9

1.3
1.2
1.2
1.1

136.1
137.3
138.7
139.7

2.7
3.6
4.1
2.9

3.4
3.5
3.7
3.3

133.6
134.9
136.5
137.5

3.7
3.9
4.8
3.0

4.0
4.0
4.3
3.9

142.2
143.2
144.1
145.1

1.4
2.8
2.5
2.8

2.4
2.5
2.7
2.4

103.790
104.130
104.380

2.0
1.3
1.0

1.3
1.4
1.3

140.2
141.8
143.0

1.4
4.6
3.4

3.0
3.3
3.1

138.1
139.8
140.9

1.8
5.0
3.2

3.4
3.6
3.2

145.4
146.8
148.1

0.8
3.9
3.6

2.3
2.5
2.8

Expo~s

1995
1996
1997
1998

11/03/99

Nonfarm Output per Hour

Impo~s

Billions
of 1996 $

Percent change
Annual
Year
rate
ago

Billions
of 1996 $

Percent change
Annual
Year
rate
ago

807.400
874.200
985.400
1007.100

10.3
8.3
12.7
2.2

886.600
963.100
1095.200
1222.200

Nonfarm Compensatioi~Hr

Index

Percent change
Annual
Year
rate
ago

Index

Percent change
Annual
Year
rate
ago

8.2
8.6
13.7
11.6

101.2
103.7
104.9
107.2

0.6
2.5
1.2
2.2

106.7
110.4
114.3
119.1

2.4
3.5
3.5
4.2

845.600
859.800
867.100
924.200

2.3
6.9
3.4
29.1

8.5
9.1
5.6
9.9

921.100
950.400
982.900
998.100

10.8
13.3
14.4
6.3

5.5
7.2
10.5
11.2

103.1
103.8
103.8
104.1

4.4
2.7
0.0
1.2

2.4
2.9
2.4
2.1

108.7
110.1
111.0
111.9

2.6
5.3
3.3
3.3

2.9
3.7
3.7
3.6

943.900
979.900
1006.800
1011.200

8.8
16.2
11.4
1.8

11.6
14.0
16.1
9.4

1034.700
1080.800
1125.500
1139.900

15.5
19.0
17.6
5.2

12.3
13.7
14.5
14.2

104.1
104.5
105.4
105.7

0.0
1.5
3.5
1.1

1.0
0.7
1.5
1.5

112.9
113.6
114.6
116.0

3.6
2.5
3.6
5.0

3.9
3.2
3.2
3.7

1007.300
997.200
993.000
1030.800

—1.5
—4.0
—1.7
16.1

6.7
1.8
—1.4
1.9

1179.000
1215.600
1231.000
1263.100

14.4
13.0
5.2
10.8

13.9
12.5
9.4
10.8

106.5
106.6
107.3
108.4

3.1
0.4
2.7
4.2

2.3
2.0
1.8
2.6

117.4
118.5
119.7
120.8

4.9
3.8
4.1
3.7

4.0
4.3
4.5
4.1

1016.400
1026.400
1056.900

—5.5
4.0
12.4

0.9
2.9
6.4

1300.900
1345.400
1399.900

12.5
14.4
17.2

10.3
10.7
13.7

109.4
109.6

3.7
0.7

2.7
2.8

122.1
123.6

4.4
5.0

4.0
4.3

Federal Reserve E

nkof St. Louis

NationalEconomicTrends
Household Survey Employment

1998

1999

NonfarmAggregate Hours

Thousands

Change

123071
124906
126710
129559
131458

2813
1834
1805
2848
1899

2.3
1.5
1.4
2.2
1.5

114135
117189
119594
122673
125803

3443
3054
2405
3079
3130

1
2
3
4

128612
129355
129855
130413

829
743
500
558

2.6
2.3
1.6
1.7

2.4
2.4
2.1
2.1

121447
122294
123006
123946

779
847
712
940

2.6
2.8
2.4
3.1

2.5
2.5
2.5
2.7

139.7
140.9

0.9
0.9

3.7
3.7

3.9
3.4

141.9
143.2

0.7
0.9

2.8
3.6

3.3
3.4

1
2
3
4

130957
131288
131419
132166

544
330
132
746

1.7
1.0
0.4
2.3

1.8
1.5
1.2
1.3

124771
125462
126113
126865

825
691
651
752

2.7
2.2
2.1
2.4

2.7
2.6
2.5
2.4

144.2
144.7

0.7

3.0

3.3

145.3
146.2

0.3
0.4
0.7

1.3
1.6
2.7

2.7
2.4
2.1

1
2

133191
133242
133423

1025
51
181

3.1
0.2
0.5

1.7
1.5
1.5

127640
128246
128882

776
606
636

2.5
1.9
2.0

2.3
2.2
2.2

147.0
147.3
148.1

0.5
0.2
0.5

2.0
1.0
2.2

1.9
1.8
2.0

0.0

1.9

123302

408

4.1

2.6

142.4

0.4

4.3

3.2

3

1997 Sep

129911

1

1998

Nonfarm Payr~lEmployment

Percent change
Year
Annual
rate
ago

1994
1995
1996
1997
1998

1997

11/03/99

Thousands Change

P~rr’pntnh~rww~

Percent change
Year
Annual
rate
ago

Index

3.1
2.7
2.1
2.6
2.6

129.8
133.4
136.6
141.4
145.1

Monthly
rate

Annual
rate

Year
ago
4.2
2.7
2.4
3.5
2.6

Oct

130055

144

1.3

1.8

123626

324

3.2

2.7

Nov

130546

491

4.6

2.2

123949

323

3.2

2.7

142.7
143.3

0.2
0.4

2.6
5.2

3.5
3.6

Dec

130638

92

0.8

2.2

124263

314

3.1

2.8

143.5

0.1

1.7

3.2

Jan
Feb
Mar

130943

305

2.8

1.9

131021
130908

78
—113

0.7
—1.0

2.0
1.5

124580
124773
124961

317
193
188

3.1
1.9
1.8

2.8
2.8
2.6

144.3
144.3
144.1

0.6
0.0
—0.1

6.9
0.0
—1.7

4.0
3.3
2.5

Apr
May
Jun

131280
131330
131253

372
50
—77

3.5
0.5
—0.7

1.6
1.5
1.4

125220
125478
125689

259
258
211

2.5
2.5
2.0

2.6
2.6
2.6

144.3
145.0
144.8

0.1
0.5
—0.1

1.7
6.0
—1.6

2.6
2.7
2.8

Jul

131176

—77

—0.7

1.1

125808

119

1.1

2.4

145.2

0.3

3.4

2.7

Aug

131264

88

0.8

1.0

126170

362

3.5

2.7

145.5

0.2

2.5

2.5

Sep

131818

554

5.2

1.5

126361

191

1.8

2.5

145.1

—0.3

—3.2

1.9

Oct

131858

40

0.4

1.4

126567

206

2.0

2.4

146.0

0.6

7.7

2.3

Nov

132113

255

2.3

1.2

126841

274

2.6

2.3

146.1

0.1

0.8

2.0

Dec

132526

413

3.8

1.4

127186

345

3.3

2.4

146.6

0.3

4.2

2.2

1999 Jan

133396

870

8.2

1.9

127378

192

1.8

2.2

146.8

0.1

1.6

1.7

Feb
Mar

133144
133033

—252
—111

—2.2
—1.0

1.6
1.6

127730
127813

352
83

3.4
0.8

2.4
2.3

147.3
146.8

0.3
—0.3

4.2
—4.0

2.1
1.9

Apr
May
Jun

133069
133224
133432

36
155
208

0.3
1.4
1.9

1.4
1.4
1.7

128134
128162
128443

321
28
281

3.1
0.3
2.7

2.3
2.1
2.2

147.0
147.2
147.8

0.1
0.1
0.4

1.6
1.6
5.0

1.9
1.5
2.1

Jul
Aug
Sep

133307
133411
133550

—125
104
139

—1.1
0.9
1.3

1.6
1.6
1.3

128816
128919
128911

373
103
—8

3.5
1.0
—0.1

2.4
2.2
2.0

148.3
148.4
147.7

0.3
0.1
—0.5

4.1
0.8
—5.5

2.1
2.0
1.8

Federal Reserve Bank of St. Louis

NatIonalEconomicTrends

11/03/99

Retail Sales
Unempl.
Rate

Billions
of dollars

6.1
5.6
5.4
4.9
4.5

2247.847
2364.120
2500.076
2617.854
2746.067

5.2
5.0

650.319
645.245

2.0
—0.8

4.9
4.7

660.049
662.241

4

4.6
4.4
4.5
4.4

1
2
3

1994
1995
1996
1997
1998

Industrial Production

Percent change
Monthly! Annual
Year
quarterly rate
ago

Index

Percent chanae
Monthly! Annual
Year
quarterly rate
ago

T~sui’y
Yields
3—mo

10—yr

5.4
4.9
4.5
6.0
3.7

4.25

7.08

5.49
5.01
5.06
4.78

6.58
6.44
6.35
5.26

8.0
5.2
5.8
4.7
4.9

109.062
114.441
119.548
126.731
131.378

8.2
—3.1

6.2
3.5

2.3
0.3

9.5
1.3

5.3
3.9

123.746
125.564
127.773
129.840

1.6
1.5
1.8
1.6

6.6
6.0
7.2
6.6

6.3
5.4
5.8
6.6

5.06
5.05
5.05
5.09

6.56
6.70
6.24
5.90

671.704
685.168
685.526

1.4
2.0
0.1

5.8
8.3
0.2

3.3
6.2
3.9

130.368
131.278
131.569

0.4
0.7
0.2

1.6
2.8
0.9

5.4
4.6
3.0

703.669

2.6

11.0

6.3

132.295

0.6

2.2

1.9

5.05
4.98
4.82
4.26

5.59
5.60
5.20
4.67

4.3
4.3
4.2

726.609
739.004
756.035

3.3
1.7
2.3

13.7
7.0
9.5

8.2
7.9
10.3

132.709
133.954
135.172

0.3
0.9
0.9

1.3
3.8
3.7

1.8
2.0
2.7

4.41
4.45
4.65

4.98
5.54
5.88

1997 Oct

4.7

219.841

—0.3

—3.2

3.5

129.296

0.6

8.0

6.7

4.97

6.03

Nov

4.6

220.740

0.4

5.0

4.0

Dec

4.7

221.660

0.4

5.1

4.0

129.899
130.325

0.5
0.3

5.7
4.0

6.6
6.5

5.14
5.16

5.87
5.81

Jan
Feb
Mar

4.6
4.6

223.038
224.158

0.6
0.5

7.7
6.2

3.6
3.1

4.7

224.508

0.2

1.9

3.1

130.270
130.150
130.684

—0.0
—0.1
0.4

—0.5
—1.1
5.0

5.9
5.0
5.1

5.04
5.09
5.03

5.54
5.57
5.65

Apr
May
Jun

4.3
4.4
4.5

226.659
228.631
229.878

1.0
0.9
0.5

12.1
11.0
6.7

5.4
6.9
6.3

131.331
131.861
130.642

0.5
6.1
0.4
5.0
—0.9 —10.5

5.0
5.1
3.6

4.95
5.00
4.98

5.64
5.65
5.50

1997

1
2
3
4

1998

1

2
3
1999

1998

Jul

4.5

228.067

—0.8

—9.1

4.1

130.479

—0.1

—1.5

2.7

4.96

5.46

Aug

4.5

228.098

0.0

0.2

3.4

132.367

1.4

18.8

3.6

4.90

5.34

Sep

4.5

229.361

0.6

6.9

4.1

131.860

—0.4

—4.5

2.6

4.61

4.81

Oct
Dec

~.5
4.4
4.3

232.379
234.504
236.786

1.3
0.9
1.0

17.0
11.5
12.3

5.7
6.2
6.8

132.370
132.166
132.350

0.4
—0.2
0.1

4.7
—1.8
1.7

2.4
1.7
1.6

3.96
4.42
4.39

4.53
4.83
4.64

1999 Jan
Feb
Mar

4.3
4.4
4.2

239.595
243.619
243.395

1.2
1.7
—0.1

15.2
22.1

7.4
8.7

132.295

132.483

—0.0
0.1

—0.5
1.7

—1.1

8.4

133.348

0.7

8.1

1.6
1.8
2.0

4.34
4.44
4.44

4.72
5.00
5.23

Apr
May
Jun

4.3
4.2
4.3

244.748
247.228
247.028

0.6
1.0
—0.1

6.9
12.9
—1.0

8.0
8.1
7.5

133.700
133.959
134.202

0.3
0.2
0.2

3.2
2.3
2.2

1.8

4.29

5.18

1.6
2.7

4.50
4.57

5.54
5.90

Jul
Aug
Sep

4.3
4.2
4.2

249.468
253.136
253.431

1.0
1.5
0.1

12.5
19.1
1.4

9.4
11.0
10.5

134.991
135.482
135.043

0.6
0.4
—0.3

7.3
4.5
—3.8

3.5
2.4
2.4

4.55
4.72
4.68

5.79
5.94
5.92

4.86

6.11

Nov

Oct

Federal Reserve Bank of St. Louis

NationalEconomicTrends

11/03/99

Consumer Price Index
less Food and Energy

Consumer Price Index
Index

1997

1998

1999

Percent change
Monthly! Annual
Year
quarterly rate
ago

Year
to date

Index

Producer Price Index
Finished Goods

Percent change
Monthly! Annual
Year
quarterly rate
ago

Year
to date

Index

Percent change
Monthly! Annual
Year
quarterly rate
ago

1994

148.3

2.6

156.7

2.8

125.5

1995

152.5

2.8

161.4

3.0

127.9

0.6

1.9

1996
1997

157.0
160.6

2.9
2.3

165.8

2.7

169.7

2.4

131.3
131.8

2.6
0.4

1998

163.1

1.6

173.7

2.3

130.7

—0.9

1

159.7

0.6

2.5

2.9

2.5

168.3

0.5

2.2

2.5

2.2

132.7

0.1

0.4

2.1

2
3

160.2
160.9

0.3
0.5

1.2
1.9

2.3
2.2

1.9
1.9

4

161.7

0.5

1.8

1.9

1.9

169.5
170.1
171.1

0.7
0.4
0.5

2.8
1.6
2.2

2.5
2.3
2.2

2.5
2.2
2.2

131.6
131.3
131.6

—0.9
—0.2
0.2

—3.4
—0.8
0.7

0.4
—0.1
—0.8

1
2

162.1

0.2

1.0

1.5

1.0

172.1

0.6

2.4

2.3

2.4

130.5

—0.8

—3.1

—1.7

162.8

0.5

1.8

1.6

1.4

173.2

0.7

2.7

2.2

2.5

130.6

3
4

163.5

0.4

1.6

1.6

1.5

174.2

0.5

2.2

2.4

2.4

130.5

164.2

0.4

1.7

1.5

1.5

175.1

0.6

2.2

2.4

2.4

131.0

0.0
—0.0
0.4

0.1
—0.1
1.4

—0.8
—0.6
—0.4

1
2

164.8
166.2
167.3

0.4
0.9
0.6

1.5
3.5
2.6

1.7
2.1
2.3

1.5
2.5
2.5

175.8
176.9
177.6

0.4
0.6
0.4

1.6
2.4
1.7

2.2
2.1
2.0

1.6
2.0
1.9

131.4
132.3

0.3
0.7

1.3
2.7

0.7
1.3

133.5

0.9

3.8

2.3

161.3

0.2

3.0

2.2

1.8

170.4

0.2

2.9

2.2

2.2

131.7

0.3

3.7

0.0

2.0
1.9
1.7

1.8
1.8
1.7

170.8
171.0
171.4

0.2
0.1

2.9

2.2

2.2

2.2
2.2

2.1
2.2

131.8
131.5
131.4

0.1
—0.2

0.2

1.4
2.8

—0.1

0.9
—2.7
—0.9

—0.4
—0.8
—1.2

—0.6
—0.1
0.0

—7.1
—0.9
0.0

—1.8
—1.7
—1.5

3

1997 SO~
Oct

161.5

Nov

161.7

0.1
0.1

Dec

161.8

0.1

1.5
1.5
0.7

1998 Jan
Feb
Mar

162.0
162.1
162.1

0.1
0.1
0.0

1.5
0.7
0.0

1.6
1.4
1.4

1.5
1.1
0.7

171.7
172.2
172.4

0.2
0.3
0.1

2.1
3.6
1.4

2.3
2.3
2.2

2.1
2.8
2.4

130.6
130.5
130.5

Apr
May
Jun

162.5
162.9
163.0

0.2
0.2
0.1

3.0
3.0
0.7

1.5
1.7
1.7

1.3
1.6
1.5

172.9
173.3
173.5

0.3
0.2
0.1

3.5
2.8
1.4

2.2
2.2
2.2

2.6
2.7
2.5

130.7

0.2

1.9

—0,9

130.6
130.4

—0,1
—0.2

—0.9
—1.8

—0.8
—0.7

Jul
Aug

163.3
163.5
163.6

0.2
0.1
0.1

2.2
1.5
0.7

1.7
1.6
1.4

1.6
1.6
1.5

173.8
174.2
174.5

0.2
0.2
0.2

2.1

2.2

2.4

2.8
2.1

2.5
2.4

2.5
2.4

163.9

0.2

2.2

0.2
0.1

2.2
1.5

1.5
1.5
1.6

1.6
1.6
1.6

174.8
175.0
175.6

0.2
0.1
0.3

2.1
1.4
4.2

2.3
2.3

Dec

164.2
164.4

1999 Jan

164.6

0.1

1.5

1.6

1.5

175.7

0.1

Feb
Mar

164.7
165.0

0.1
0.2

0.7
2.2

1.6
1.8

1.1
1.5

175.8
176.0

0.1
0.1

Apr
May
Jun

166.2
166.2
166.2

0.7
0.0
0.0

9.1
0.0
0.0

2.3
2.0
2.0

3.3
2.6
2.2

176.7
176.9
177.0

Jul
Aug
Sep

166.7
167.2
167.9

0.3
0.3
0.4

3.7
3.7
5.1

2.1
2.3
2.6

2.4
2.6
2.8

177.3
177.5
178.1

Sep
Oct
Nov

0.2

2.8

—0.2

—3.6
2.8

—0.8

130.6

—0.3
0.2

131.0
130.7
131.3

0.3

2.5

2.4
2.3
2.5

—0.2
0.5

3.7
—2.7
5.7

—0.6
—0.6
—0.1

0.7

2.3

0.7

131.7

0.3

3.7

0.8

0.7
1.4

2.1
2.1

0.7
0.9

131.1
131.5

—0.5
0.3

—5.3
3.7

0.5
0,8

0.4
0.1
0.1

4.9
1.4
0.7

2.2
2.1
2.0

1.9
1.8
1.6

132.2
132.4
132.3

0.5
0.2
—0.1

6.6
1.8
—0.9

1.1
1.4
1.5

0.2
0.1
0.3

2.1
1.4
4.1

2.0
1.9
2.1

1.7
1.6
1.9

132.6
133.3
134.7

0.2
0.5
1.1

2.8
6.5
13.4

1.5
2.3
3.1

Federal Reserve Bank of St. Louis

130.7
130.3

—0.8

Notes
Pages 4, 5: Final sales is gross domestic product (GDP) minus change
in private 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 complete
information. Beginning with the comprehensive revision, which was
released with the advance third-quarter GDP report on Oct. 28, 1999,
real GDP is measured in 1996 dollars. The Purchasing Managers’
Index is a weighted average of diffusion indexes for new orders, production, supplier deliveries, inventories, and employment. The National Association of Purchasing Management (NAPM) surveys over
300 firms in 20 manufacturing industries, weighting responses by
industry share of GDP. Aggregate 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 Xt to the overall GDP
growth rate in quarter t is 100 × [(1 + (Xt - Xt-1)/GDPt-1)4 − 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 of 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. Standard and
Poor’s 500 Index with Reinvested Dividends shows the total return:
capital gains plus dividends.
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 private nonfarm employers. ECI compensation refers to a fixed sample
of jobs, while compensation per hour covers all workers in the nonfarm 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 excludes 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 provides estimates of civilian employment, unemployment rate, labor force
participation rate, and 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 uncertainty due to sample size. The household survey was changed in January 1994, so care should be exercised in making short-term comparisons around this date, particularly with the duration data shown on
page 10. Other changes in the survey are detailed in Bureau of Labor
Statistics, Employment and Earnings, Appendix A.
Pages 13: 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 of U.S. households.
Pages 14, 15: Overall gross saving includes government saving, which
is the sum of 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. The comprehensive revision introduced the equipment & software component of business investment.

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 transactions involving existing assets; (2) NIPA outlays exclude government
investment and include consumption of 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 NIPAs, except
as noted. Since 1977, the federal fiscal year starts on October 1.
Excluded agency debt was 0.6 percent of federal debt at the end of
fiscal 1997. Federal debt held by the public includes holdings of the
Federal Reserve System and excludes holdings of 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 of payments
basis) is the difference between exports and imports of goods (merchandise) and services. It is nearly identical in concept to the net exports 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 account 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 inflation. Multifactor productivity estimates changes in output that do not
correspond to changes in quantities of labor, capital, or intermediate
inputs. Inventory valuation adjustments (IVA) remove the effect of
changes in the value of existing inventories from corporate profits and
proprietors’ income. (This change in value does not correspond to
current production and therefore is not part of GDP). Capital consumption 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 income of persons and net interest.

Sources
Bureau of Economic Analysis (BEA), U.S. Dept. of Commerce
National income and product accounts, international trade and investment data (except by country), auto and light truck sales
Census Bureau, U.S. Dept. of Commerce
Inventory-sales ratios, retail sales, capital goods orders, housing
starts, exports and imports by country
Bureau of Labor Statistics (BLS), U.S. Dept. of Labor
All employment-related data, employment cost index, consumer and
producer price indexes, unit labor cost, output per hour, compensation per hour, multifactor productivity
United States Department of Treasury
Unified budget receipts, outlays, deficit, debt
Federal Reserve Board
Index of industrial production, treasury yields, exchange rates, capacity utilization, household debt
The Survey Research Center, The University of Michigan
Consumer sentiment index
The Conference Board
Help-wanted advertising index
Organization for Economic Cooperation and Development (OECD)
GDP for major trading partners (not available on FRED)