Full text of National Economic Trends : September 2000
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September 2000 NationalEconomicTrends Online Taxation In a recent report, the Federal Trade Commission analyzed the economic implications of the Internet.* A major issue is online taxation. Currently, the Internet allows out-of-state vendors who do not pay sales tax to compete with local brick-and-mortar stores that are subject to sales taxes levied by local and state governments. It seems natural to call for a level playing field on equity and efficiency grounds. However, in this respect, it is not all that straightforward what a level playing field means. In the debate on online taxation, theoretical arguments and empirical evidence are brought forward on either side. The “infant industry” argument figures prominently. According to this reasoning, a developing industry should receive protection from competition until it is “mature” and able to compete on equal footing; otherwise, a market failure may result with the industry not being able to fully utilize its comparative advantages. E-commerce could be viewed as such an industry. Opponents of online taxation point to network externalities that deserve to be subsidized via tax exemption. Generally, a good possesses network externalities if it becomes more valuable to the consumer as the number of users increases. Thus, the marginal consumer generates benefits for all the existing consumers without being compensated. If e-commerce generates such an externality, a tax exemption on online purchases is a way to correct for it. Proponents of Internet taxation, however, point out that “infant industry” policies rarely produce the desired outcome. Once a developing industry enjoys protection, it has little incentive to become competitive. Empirical research in the area of e-commerce offers some insights into the pros and cons of online taxation. Current empirical evidence points out three key findings. The first is that consumers who live in areas with high sales taxes are more inclined to purchase online than consumers in areas where sales taxes are low. A sec- ond finding is that governments do not lose a sizeable portion of tax revenue through e-commerce due to the still relatively low volume of business-to-consumer Internet transactions. For 1998, it is estimated that the tax exemption amounted to $170-430 million based on a business-to-consumer Internet sales volume of $2.5-2.6 billion. Even a projected loss in sales taxes by the year 2002 of around $2.5 billion is less than two percent of projected sales tax revenue. The third finding concerns the burden that tax collection would represent to online retailers. Currently 46 states and almost 7,500 local governments impose sales taxes of various forms, differing across goods and jurisdictions. With online taxation, Internet retailers would have to determine which tax rate applies for every good and destination, and would be responsible for tax collection. A field study conducted by the Washington State Department of Revenue among brick-and-mortar retailers in Washington and Oregon indicates that the burden on online retailers for collecting and remitting sales taxes would be significant. This study estimated that the cost of tax collection and processing to retailers amounts to about 4.23% of total state and local sales taxes. Thus, the cost of compliance already is high, even though brick-and-mortar retailers only deal with one set of tax codes pertaining to their place of business. In summary, Internet taxation remains a challenging issue. Given the small volume of business-to-consumer transactions, the government is in no hurry to act. As the Internet grows in importance, however, the tax issue will not remain in the background. A uniform tax rate for online sales would help minimize the cost of compliance, but it might prove difficult for state and local governments to coordinate on this solution. * Alan E. Wiseman, July 2000, Economic Perspectives on the Internet, Federal Trade Commission. —Judith H. Hazen —Frank A. Schmid 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 09/05/00 Consumer Price Index Industrial Production Interest Rates Change in Nonfarm Payrolls Unemployment Rate Federal Reserve Bank of St. Louis NationalEconomicTrends 09/05/00 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 09/05/00 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 09/01/00 Contribution of Components to Real GDP Growth Contributions to Real GDP Growth Rate 1998 3rd 4th 1999 1st 2nd 3rd Federal Reserve Bank of St. Louis 4th 2000 1st 2nd NationalEconomicTrends 09/05/00 Interest Rates Treasury Yield Curve Standard and Poor’s 500 Index with Reinvested Dividends Federal Reserve Bank of St. Louis NationalEconomicTrends 09/01/00 NIPA Chain Price Indexes Consumer Price Index Producer Price Index, Finished Goods Employment Cost Index and Compensation per Hour Federal Reserve Bank of St. Louis NationalEconomicTrends NIPA Chain Price Indexes 09/05/00 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 09/01/00 Employment Unemployment, Labor Force Participation and Employment Rates Duration of Unemployment Federal Reserve Bank of St. Louis NationalEconomicTrends 09/01/00 Change in Nonfarm Payrolls Change in Manufacturing Payrolls Change in Household Employment Labor Force and Population Available Labor Supply and Components Unemployment Rate and Help-Wanted Advertising Index Federal Reserve Bank of St. Louis NationalEconomicTrends 09/01/00 Real Disposable Personal Income Real Consumption Retail Sales Household Debt Outstanding Federal Reserve Bank of St. Louis NationalEconomicTrends Real Disposable Personal Income 09/01/00 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 09/01/00 Real Investment Real Private Fixed Investment Real Nonresidential Fixed and Equipment & Software Investment Real Residential Fixed Investment Federal Reserve Bank of St. Louis NationalEconomicTrends 09/01/00 Gross Saving Rates and Net Foreign Investment Real Private Fixed Investment Nondefense Capital Goods Orders Real Equipment & Software Investment Real Nonresidential Fixed Investment Real Residential Fixed Investment Housing Starts and New Home Sales Federal Reserve Bank of St. Louis NationalEconomicTrends 09/01/00 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 09/01/00 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 09/01/00 Trade and Investment Income Balances Exchange Rates Goods Export Shares, 1999 UK 5.61% Goods Import Shares, 1999 Mexico 12.70% All Other 22.87% UK 3.8% China 7.9% China 1.92% Japan 8.40% Japan 12.7% All Other 24.8% Germany 3.92% France 2.76% Other OECD 17.49% Mexico 10.7% Germany 5.4% France 2.5% Canada 24.34% Other OECD 12.9% Federal Reserve Bank of St. Louis Canada 19.3% NationalEconomicTrends 09/01/00 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 09/01/00 Output per Hour and Capacity Utilization, Manufacturing Nonfarm Compensation per Hour Output per Hour, Nonfarm Business and Nonfarm, Nonfinancial Corporations Federal Reserve Bank of St. Louis NationalEconomicTrends 09/01/00 Nonfarm Output per Hour 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 os~i~oo NominalGDP Billions of $ 1996 1997 1998 1999 Real GDP Percent change Annual Year rate ago 7813.2 8318.4 8790.2 9299.2 Final Sales Percent change Annual Year rate ago Billions of 1996 $ 5.6 6.5 5.7 5.8 7813.170 8159.450 8515.652 8875.761 Billions of 1996 $ 3.6 4.4 4.4 4.2 7783.176 8095.204 8435.173 8826.900 Percent change Annual Year rate ago Change in Private lnvenlones Last qtr 3.6 4.0 4.2 4.6 Year/Year ago 29.994 63.757 80.169 45.287 1997 1 2 3 4 8124.2 8279.8 8390.9 8478.6 7.4 7.9 5.5 4.2 6.5 6.4 6.8 6.2 8016.391 8131.947 8216.564 8272.897 4.4 5.9 4.2 2.8 4.4 4.2 4.8 4.3 7966.392 8043.212 8164.863 8206.269 3.5 3.9 6.2 2.0 3.9 3.5 4.8 3.9 49.283 88.306 51 .336 66.102 40.919 55.429 55.452 63.757 1998 1 2 8634.7 7.6 6.3 8404.861 6.5 4.8 8722.0 8829.1 8974.9 4.1 5.0 6.8 5.3 5.2 5.9 8465.570 8537.607 8654.492 2.9 3.4 5.6 4.1 3.9 4.6 8289.394 8402.717 8463.426 8584.999 4.1 5.6 2.9 5.9 4.1 4.5 3.7 4.6 117.319 60.914 73.069 69.374 80.766 73.918 79.351 80.169 3 4 9104.5 9191.5 9340.9 9559.7 5.9 3.9 6.7 9.7 5.4 5.4 5.8 6.5 8729.967 8783.175 8905.764 9084.060 3.5 2.5 5.7 8.3 3.9 3.8 4.3 5.0 8680.265 8764.868 8861.769 9000.543 4.5 4.0 4.5 6.4 4.7 4.3 4.7 4.8 48.073 13.101 39.096 80.878 62.858 50.904 42.411 45.287 2000 1 2 9752.7 9942.9 8.3 8.0 7.1 8.2 9191.804 9311.502 4.8 5.3 5.3 6.0 9148.034 9227.266 6.7 3.5 5.4 5.3 36.634 79.272 42.427 58.970 3 4 1999 1 2 Consumption 1996 1997 1998 1999 1997 1 2 Durables Consump~on Billions of 1996 $ Percent change Annual Year rate ago Billions of 1996 $ 5237.499 5423.902 5678.654 5978.815 3.2 3.6 4.7 5.3 616.475 657.347 727.268 817.779 P~vateFixed Investment Percent change Annual Year rate ago Nonresidential Fixed Investment Billions of 1996 $ Percent change Annual Year rate ago Billions of 1996 $ Percent change Annual Year rate ago 5.6 6.6 10.6 12.4 1212.696 1328.630 1485.274 1621.375 9.3 9.6 11.8 9.2 899.433 1009.344 1140.256 1255.285 10.0 12.2 13.0 10.1 5350.681 5375.664 5462.083 5507.125 4.5 1.9 6.6 3.3 3.4 2.8 4.0 4.1 641.473 636.510 670.509 680.890 10.5 —3.1 23.1 6.3 6.6 2.6 8.5 8.8 1275.405 1311.094 1356.728 1371.305 8.3 11.7 14.7 4.4 9.5 8.9 10.2 9.7 960.756 992.659 1036.974 1046.985 10.9 14.0 19.1 3.9 11.5 12.1 13.4 11.8 5572.385 5651.576 5710.969 5779.790 4.8 5.8 4.3 4.9 4.1 5.1 4.6 5.0 696.376 719.352 726.670 766.673 9.4 13.9 4.1 23.9 8.6 13.0 8.4 12.6 1427.367 1477.585 1496.394 1539.748 17.4 14.8 5.2 12.1 11.9 12.7 10.3 12.3 1095.977 1136.398 1146.336 1182.332 20.1 15.6 3.5 13.2 14.1 14.5 10.5 12.9 4 5860.238 5940.214 6013.801 6101.005 5.7 5.6 5.0 5.9 5.2 5.1 5.3 5.6 782.677 810.480 826.150 851.802 8.6 15.0 8.0 13.0 12.4 12.7 13.7 11.1 1574.043 1607.125 1637.758 1666.560 9.2 8.7 7.8 7.2 10.3 8.8 9.4 8.2 1209.432 1237.494 1272.464 1301.758 9.5 9.6 11.8 9.5 10.4 8.9 11.0 10.1 2000 1 2 6213.455 6258.183 7.6 2.9 6.0 5.4 898.223 886.725 23.6 —5.0 14.8 9.4 1730.930 1776,418 16.4 10.9 10.0 10.5 1365.267 1412.631 21.0 14.6 12.9 14.2 3 4 1998 1 2 3 4 1999 1 2 3 Federal Reserve lank of St. Louis NationalEconomicTrends GDP Chain Price Index Index 1996 1997 1998 1999 1997 1 2 3 4 1998 1 2 3 4 1999 1 2 3 4 2000 1 2 Employment Cost Index Percent change Annual Year rate ago 100.000 101.950 103.230 104.770 O9~1~O Index 1.9 2.0 1.3 1.5 129.3 133.3 138.0 142.4 1999 1997 1 2 3 4 1998 1 2 3 4 1999 1 2 3 4 2000 1 2 ECI: Benefits Index Percent change Annual Year rate ago Index Percent change Annual Year rate ago 2.8 3.1 3.5 3.2 126.0 130.4 135.7 140.2 3.3 3.5 4.0 3.4 137.4 140.2 143.6 147.6 1.8 2.0 2.5 2.8 101.360 101.820 102.120 102.490 2.9 1.8 1.2 1.5 2.0 2.1 1.9 1.8 131.6 132.7 133.7 135.1 3.1 3.4 3.0 4.3 2.9 2.9 3.0 3.4 128.5 129.7 131.0 132.4 3.5 3.8 4.1 4.3 3.3 3.3 3.6 3.9 138.9 139.7 140.4 141.6 1.2 2.3 2.0 3.5 2.0 2.0 2.0 2.2 102.750 103.040 103.420 103.690 1.0 1.1 1.5 1.0 1.4 1.2 1.3 1.2 136.2 137.3 138.8 139.7 3.3 3.3 4.4 2.6 3.5 3.5 3.8 3.4 133.7 134.9 136.5 137.5 4.0 3.6 4.8 3.0 4.0 4.0 4.2 3.9 142.2 143.2 144.1 144.9 1.7 2.8 2.5 2.2 2.4 2.5 2.6 2.3 104.250 104.630 104.900 105.310 2.2 1.5 1.0 1.6 1.5 1.5 1.4 1.6 140.3 141.8 143.1 144.5 1.7 4.3 3.7 4.0 3.0 3.3 3.1 3.4 138.1 139.7 140.9 142.2 1.8 4.7 3.5 3.7 3.3 3.6 3.2 3.4 145.4 146.8 148.2 149.9 1.4 3.9 3.9 4.7 2.3 2.5 2.8 3.5 106.170 106.850 3.3 2.6 1.8 2.1 146.6 148.2 5.9 4.4 4.5 4.5 143.9 145.4 4.9 4.2 4.2 4.1 153.4 155.3 9.7 5.0 5.5 5.8 Expods 1996 1997 1998 ECI: ~Nages Percent change Annual Year rate ago lmpo~s Billions of 1996 $ Percent change Annual Year rate ago 874.163 981.458 1003.557 1032.963 Nonfarm Output per Hour Billions of 1996 $ Percent change Annual Year rate ago 8.2 12.3 2.3 2.9 963.128 1094.778 1224.579 1355.333 Nontarm Compensatioi~Hr Index Percent chanee Annual Year rate ago Index Percent change Annual Year rate ago 8.6 13.7 11.9 10.7 105.4 107.3 110.2 113.4 2.5 1.8 2.7 2.9 109.8 112.9 118.6 124.4 3.0 2.8 5.0 4.9 940.346 979.229 1004.186 1002.071 7.5 17.6 10.6 —0.8 11.1 13.9 15.8 8.5 1034.322 1079.801 1123.758 1141.230 15.3 18.8 17.3 6.4 12.3 13.6 14.3 14.3 106.1 107.1 108.0 108.1 0.8 3.8 3.4 0.4 1.4 1.4 2.4 2.1 111.7 112.0 113.0 114.7 2.2 1.1 3.6 6.2 3.0 2.4 2.4 3.2 1004.509 996.826 988.775 1024.117 1.0 —3.0 —3.2 15.1 6.8 1.8 —1.5 2.2 1179.803 1216.575 1232.900 1269.017 14.2 13.1 5.5 12.2 14.1 12.7 9.7 11.2 109.3 109.8 110.3 111.2 4.5 1.8 1.8 3.3 3.0 2.5 2.1 2.9 116.4 117.9 119.4 120.8 6.1 5.3 5.2 4.8 4.2 5.3 5.7 5.3 1003.277 1017.613 1042.588 1068.376 —7.9 5.8 10.2 10.3 —0.1 2.1 5.4 4.3 1283.060 1332.170 1385.190 1420.903 4.5 16.2 16.9 10.7 8.8 9.5 12.4 12.0 112.0 112.1 113.6 115.8 2.9 0.4 5.5 8.0 2.5 2.1 3.0 4.1 122.1 123.6 125.2 126.5 4.4 5.0 5.3 4.2 4.9 4.8 4.9 4.7 1084.819 1119.680 6.3 13.5 8.1 10.0 1461.653 1528.272 12.0 19.5 13.9 14.7 116.3 117.9 1.7 5.6 3.8 5.2 127.8 129.4 4.2 5.1 4.7 4.7 Federal Reserve E ink of St. Louis NationalEconomicTrends 1995 124748 125486 126180 126967 793 737 695 787 2.6 2.4 2.2 2.5 2.7 2.6 2.6 2.4 144.2 144.7 145.5 146.4 0.8 0.4 0.5 0.7 3.1 1.5 2.0 2.7 3,3 2.6 2.5 2.3 869 137 312 2.7 0.4 0.9 1.7 1.5 1.5 2.0 2.1 2.1 1.5 2.4 2.3 2.3 2.2 1.9 1.9 1.8 1.9 2.6 2.0 2.0 2.2 0.5 0.5 0.5 626 833 630 644 710 147.1 147.8 148.5 134153 127800 128430 129073 129783 149.6 0.7 2.9 2.1 1 135247 1095 3.3 1.6 130626 843 2.6 2.2 150.7 0.8 3.2 2.4 2 135200 —47 —0.1 1.5 131543 917 2.8 2.4 151.1 0.3 1.1 2.2 4 1999 1 2 3 4 2000 1998 133077 133214 133526 133.4 136.6 141.4 145.2 148.3 1.8 1.5 1.2 1.3 1 2 3 413 394 270 682 2.7 2.1 2.6 2.6 2.3 Year ago 1.3 1.2 0.8 2.1 1998 130861 131256 131526 132208 Index 3053 2409 3080 3168 2926 1999 1998 Thousands Change Perceotctian~ Monthly Annual rate rate 117188 119597 122677 125845 128772 1997 1837 1807 2850 1898 2030 Year ago Percent chance Annual Year rate ago 1.5 1.4 2.2 1.5 1.5 1996 124908 126715 129565 131463 133492 Nonfarm Aggregate Hours Nontarm Payr~IEmployment Household Survey Employment ~ntchane Annual Thousands Change rate 09101/00 2.7 2.4 3.5 2.7 2.1 Jul 131274 40 0.4 1.1 125847 99 0.9 2.5 145.2 0.2 2.5 2.5 Aug Sep 131381 131922 107 541 1.0 5.1 1.1 1.5 126225 126469 378 244 3.7 2.3 2.7 2.5 145.6 145.6 0.3 0.0 3.4 0.0 2.7 2.2 Oct Nov 131950 28 0.3 1.4 126677 208 2.0 2.4 146.2 0.4 5.1 2.4 132156 206 1.9 1.2 126939 262 2.5 2.4 146.3 0.1 0.8 2.2 Dec 132517 361 3.3 1.4 127286 347 3.3 2.4 146.8 0.3 4.2 2.4 1999 Jan 133225 133029 132976 708 —196 —53 6.6 —1.8 —0.5 1.8 1.6 1.6 127463 127883 128054 177 420 171 1.7 4.0 1.6 2.3 2.5 2.5 146.8 147.5 147.1 0.0 0.5 —0.3 0.0 5.9 —3.2 1.7 2.3 2.1 133054 133190 78 1.4 1.5 128282 128377 228 95 147.7 147.6 5.0 0.9 2.5 2.3 0.4 136 0.7 1.2 2.2 May —0.1 —0.8 2.4 1.7 Jun 133398 208 1.9 1.6 128630 253 2.4 2.3 148.2 0.4 5.0 2.3 Jul Aug Sep 133399 133530 133650 1 131 120 0.0 1.2 1.1 1.6 1.6 1.3 128898 129057 129265 268 159 208 2.5 1.5 2.0 2.4 2.2 2.2 148.5 148.4 148.6 0.2 —0.1 0.1 2.5 —0.8 1.6 2.3 1.9 2.1 2.1 Feb Mar Apr Oct 133940 290 2.6 1.5 129523 258 2.4 2.2 149.3 0.5 5.8 Nov 134098 158 1.4 1.5 129788 265 2.5 2.2 149.6 0.2 2.4 2.3 Dec 134420 322 2.9 1.4 130038 250 2.3 2.2 149.8 0.1 1.6 2.0 2000 Jan Feb 135221 135362 801 141 7.4 1.3 1.5 1.8 130387 130482 349 95 3.3 0.9 2.3 2.0 150.6 150.6 0.5 0.0 6.6 0.0 2.6 2.1 Mar 135159 —203 —1.8 1.6 131009 527 5.0 2.3 151.0 0.3 3.2 2.7 Apr May Jun 135706 134715 135179 547 —991 464 5.0 —8.4 4.2 2.0 1.1 1.3 131419 131590 131620 410 171 30 3.8 1.6 0.3 2.4 2.5 2.3 151.7 150.5 151.2 0.5 —0.8 0.5 5.7 —9.1 2.7 5.7 2.0 2.0 Jul 134749 —430 —3.8 1.0 131512 —108 —1.0 2.0 151.3 0.1 0.8 1.9 Federal Reserve Bank of St. Louis NationalEconomicTrends 09105100 Retail Sales Unempl~ Rate Billions of dollars 5.6 5.4 4.9 4.5 4.2 2361.343 2496.503 2612.931 2745.714 2994.017 4.7 4.4 4.5 4.4 668.657 684.020 686.919 706.118 0.9 2.3 0.4 2.8 4 4.3 4.3 4.2 4.1 723.050 739.876 757.015 774.076 1 2 4.1 4.0 1998 Aug 1995 Industrial Production Percent change Monthly! Annual Year quarterly rate ago Index Percent change Monthly! Annual Year quarterly rate ago Treasui’j Yields 3—mo 10—yr 4.9 4.4 6.3 4.3 3.5 5.49 5.01 5.06 4.78 4.64 6.58 6.44 6.35 5.26 5.64 5.1 5.7 4.7 5.1 9.0 114.418 119.445 126.953 132.365 136.980 3.8 9.5 1.7 11.7 3.4 6.1 4.2 6.6 130.897 131.856 132.811 133.895 0.6 0.7 0.7 0.8 2.4 3.0 2.9 3.3 5.7 4.8 3.8 2.9 5.05 4.98 4.82 4.26 5.59 5.60 5.20 4.67 2.4 2.3 2.3 2.3 9.9 9.6 9.6 9.3 8.1 8.2 10.2 9.6 134.569 136.109 137.721 139.521 0.5 1.1 1.2 1.3 2.0 4.7 4.8 5.3 2.8 3.2 3.7 4.2 4.41 4.45 4.65 5.04 4.98 5.54 5.88 6.14 799.014 803.087 3.2 0.5 13.5 2.1 10.5 8.5 141.724 144.248 1.6 1.8 6.5 7.3 5.3 6.0 5.52 5.71 6.48 6.18 4.5 4.5 228.078 230.610 —0.1 1.1 —0.8 14.2 3.6 4.7 133.593 133.548 1.8 —0.0 23.2 —0.4 4.4 3.7 4.90 4.61 5.34 4.81 Oct Nov Dec 4.5 4.4 233.751 235.251 1.4 0.6 17.6 8.0 6.3 6.5 0.8 9.9 6.9 5.1 —2.9 0.2 3.5 2.8 2.5 4.53 237.116 0.4 —0.2 0.0 3.96 4.4 134.108 133.777 133.801 4.42 4.39 4.83 4.64 1999 Jan Feb Mar 4.3 4.4 4.2 239.154 241.580 242.316 0.9 1.0 0.3 10.8 12.9 3.7 7.7 8.5 8.2 134.052 134.509 135.147 0.2 0.3 0.5 2.3 4.2 5.8 2.4 2.9 3.1 4.34 4.44 4.44 4.72 5.00 5.23 Apr May Jun 4.3 4.2 4.3 244.556 247.325 247.995 0.9 1.1 0.3 11.7 14.5 3.3 8.1 8.6 7.8 135.472 136.215 136.639 0.2 0.5 0.3 2.9 6.8 3.8 2.9 2.9 3.9 4.29 4.50 4.57 5.18 5.54 5.90 Jul Aug Sep 4.3 4.2 4.2 250.237 253.030 253.748 0.9 1.1 0.3 11.4 14.2 3.5 9.6 10.9 10.0 137.363 137.736 138.064 0.5 0.3 0.2 6.5 3.3 2.9 4.6 3.1 3.4 4.55 4.72 4.68 5.79 5.94 5.92 Oct 4.1 4.1 4.1 254.959 257.489 261.628 0.5 1.0 1.6 5.9 12.6 21.1 9.1 9.5 10.3 139.056 139.433 140.075 0.7 0.3 0.5 9.0 3.3 5.7 3.7 4.2 4.7 4.86 5.07 6.11 6.03 5.20 6.28 4.0 263.493 Mar 4.1 4.1 267.164 268.357 0.7 1.4 0.4 8.9 18.1 5.5 10.2 10.6 10.7 141.117 141.635 142.419 0.7 0.4 0.6 9.3 4.5 6.8 5.3 5.3 5.4 5.32 5.55 5.69 6.66 6.52 6.26 Apr May Jun 3.9 4.1 4.0 267.119 267.417 268.551 —0.5 0.1 0.4 —5.4 1.3 5.2 9.2 8.1 8.3 143.528 144.434 144.782 0.8 0.6 0.2 9.8 7.8 2.9 5.9 6.0 6.0 5.66 5.79 5.69 5.99 6.44 6.10 Jul Aug 4.0 270.552 0.7 9.3 8.1 145.319 0.4 4.5 5.8 5.96 6.09 6.05 5.83 1996 1997 1998 1999 1998 1 2 3 4 1999 1 2 3 2000 Sep Nov Dec 2000 Jan Feb Federal Reserve Bank of St. Louis NationalEconomicTrends 09101100 Consumer Price Index less Food and Energy Consumer Price Index Index 1995 1996 1997 1998 1999 1998 1 Percent change Monthly! Annual Year quarterly rate ago Year to date Index Percent chance Monthly! Annual Year quarterly rate ago 152.5 157.0 160.6 2.8 2.9 2.3 161.4 165.8 169.7 3.0 2.7 2.4 163.1 166.7 1.6 2.2 173.7 177.3 2.3 2.1 Producer Price Index Finished Goods Year to date Index Percgnt change Monthly! Annual Year quarterly rate ago 127.9 131.3 131.8 130.7 133.0 1.9 2.6 0.4 —0.9 1.8 162.1 162.8 163.5 164.2 0.2 0.4 0.4 0.4 1.0 1.7 1.7 1.7 1.5 1.6 1.6 1.5 1.0 1.3 1.5 1.5 172.2 173.2 174.2 175.1 0.7 0.6 0.5 0.5 2.7 2.5 2.2 2.1 2.3 2.2 2.4 2.4 2.7 2.6 2.5 2.4 130.6 130.5 130.6 131.0 —0.8 —0.0 0.1 0.3 —3.0 —0.1 0.2 1.1 —1.6 —0.7 —0.6 —0.5 4 164.9 166.2 167.2 168.4 0.4 0.8 0.6 0.7 1.7 3.3 2.5 2.9 1.7 2.1 2.3 2.6 1.7 2.5 2.5 2.6 175.9 176.8 177.7 178.7 0.5 0.5 0.5 0.6 1.9 2.1 1.9 2.3 2.2 2.1 2.0 2.1 1.9 2.0 2.0 2.1 131.4 132.3 133.6 134.7 0.4 0.7 1.0 0.8 1.4 2.7 4.0 3.4 0.7 1.4 2.3 2.9 1 2 170.1 171.6 1.0 0.9 4.0 3.6 3.2 3.2 4.0 3.8 179.7 180.9 0.6 0.7 2.3 2.8 2.1 2.3 2.3 2.5 136.3 137.6 1.2 0.9 4.8 3.7 3.7 4.0 1998 Jul 163.3 163.5 163.6 0.2 0.1 0.1 2.2 1.5 0.7 1.7 1.7 1.4 1.6 1.6 1.5 173.8 174.2 174.5 0.2 0.2 0.2 2.1 2.8 2.1 2.2 2.5 2.4 2.5 2.6 2.5 130.8 130.4 130.6 0.2 —0.3 0.2 2.8 —3.6 1.9 —0.2 —0.8 —0.9 163.9 164.2 164.4 0.2 0.2 0.1 2.2 2.2 1.5 1.4 1.5 1.6 1.6 1.6 1.6 174.7 175.0 175.5 0.1 0.2 0.3 1.4 2.1 3.5 2.3 2.3 2.5 2.4 2.4 2.5 131.0 130.8 131.1 0.3 —0.2 0.2 3.7 —1.8 2.8 —0.7 —0.6 —0.1 164.7 164.8 165.1 0.2 0.1 0.2 2.2 0.7 2.2 1.7 1.7 1.8 2.2 1.5 1.7 175.8 175.8 176.1 0.2 0.0 0.2 2.1 0.0 2.1 2.3 2.1 2.1 2.1 1.0 1.4 131.6 131.1 131.6 0.4 —0.4 0.4 4.7 —4.5 4.7 0.8 0.5 0.8 166.2 166.2 166.2 0.7 0.0 0.0 8.3 0.0 0.0 2.3 2.1 2.0 3.3 2.6 2.2 176.7 176.8 177.0 0.3 0.1 0.1 4.2 0.7 1.4 2.2 2.0 2.0 2.1 1.8 1.7 132.2 132.3 132.4 0.5 0.1 0.1 5.6 0.9 0.9 1.2 1.4 1.5 166.7 167.2 167.8 0.3 0.3 0.4 3.7 3.7 4.4 2.1 2.3 2.6 2.4 2.6 2.8 177.4 177.5 178.1 0.2 0.1 0.3 2.7 0.7 4.1 2.1 1.9 2.1 1.9 1.7 2.0 132.7 133.5 134.6 0.2 0.6 0.8 2.8 7.5 10.3 1.5 2.4 3.1 Nov 168.1 168.4 0.2 0.2 2.2 2.2 2.6 2.6 2.7 2.7 Dec 168.8 0.2 2.9 2.7 2.7 178.4 178.7 178.9 0.2 0.2 0.1 2.0 2.0 1.4 2.1 2.1 1.9 2.0 2.0 1.9 134.6 134.7 134.9 0.0 0.1 0.1 0.0 0.9 1.8 2.7 3.0 2.9 2000 Jan Feb Mar 169.1 170.0 171.2 0.2 0.5 0.7 2.2 6.6 8.8 2.7 3.2 3.7 2.2 4.3 5.8 179.2 179.5 180.3 0.2 0.2 0.4 2.0 2.0 5.5 1.9 2.1 2.4 2.0 2.0 3.2 135.0 136.5 137.5 0.1 1.1 0.7 0.9 14.2 9.2 2.6 4.1 4.5 Apr Jun 171.2 171.3 172.3 0.0 0.1 0.6 0.0 0.7 7.2 3.0 3.1 3.7 4.3 3.6 4.2 180.6 180.9 181.2 0.2 0.2 0.2 2.0 2.0 2.0 2.2 2.3 2.4 2.9 2.7 2.6 137.3 137.3 138.1 —0.1 0.0 0.6 —1.7 0.0 7.2 3.9 3.8 4.3 Jul 172.7 0.2 2.8 3.6 4.0 181.6 0.2 2.7 2.4 2.6 138.1 0.0 0.0 4.1 2 3 4 1999 1 2 3 2000 Aug Sep Oct Nov Dec 1999 Jan Feb Mar Apr May Jun Jul Aug Sep Oct May Federal Reserve Bank of St. Louis 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. 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: Beginning with the October 1999 comprehensive revision to the National Income and Product Accounts (NIPA), a new formula is used to calculate the contribution of a component to the overall GDP growth rate. The new formula produces estimates roughly equivalent to the old formula. For more information, see the October 1999 issue of the Survey of Current Business, p. 16. The sign is changed for imports. 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 2000 affect levels and growth rates of household survey employment, labor force and population. The unemployment rate and other series were 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 available labor supply is the sum of the unemployed and those persons not in the labor force but who want to work now. The household survey was significantly 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. 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 NIPAs. 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. Nonfarm business accounted for about 76 percent of the value of GDP in 1996, while nonfinancial corporations accounted for about 54 percent. 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)
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