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August 1 5
90

SURVEY OF CURRENT BUSINESS

United States merchandise exports in the second quarter
increased, hut only to an extent roughly commensurate with
the concomitant rise in government grants under the European Recovery Program. Since such grants are included in
the Government purchases component of gross national
product, equivalent amounts of exports are excluded from the
international balance as measured by net foreign investment.
The change in nongovernment financed exports in the June
quarter was negligible.
Merchandise imports, after recovering from the mid-1949
low in response to expanding domestic industrial activity and
other factors, levelled off in the second quarter at a dollar
volume not far below that prevailing prior to the 1949 downturn. Changes in receipts and payments on service transactions were largely seasonal in character, and in combination
had little net effect upon the foreign balance.

Government purchases maintained
The share of the Nation's output bought by the Federal
and State and local governments held steady in the June
quarter at an annual rate of $41/<> billion. This figure was
moderately below the corresponding total a year earlier, but
remained larger than in any postwar quarter prior to 1949.
Declines in Government purchases of goods and services
since the middle of last year have been concentrated in a few
major Federal programs—notably foreign aid (including
civilian relief in occupied areas), military and stockpiling
activities, and farm price support. Trends in these programs
during the second quarter were mixed, but resulted, on
balance, in an arrest of the previous downdrift.
A slight further drop in military expenditures of the
Defense Department was offset only to a minor extent by a
small pickup in outlays for strategic and critical materials.
The outlook for these programs subsequent to the second
quarter, however, has of course been altered radically upward
by the United States response to the Korean hostilities.
Both procurement and military payrolls, as well as a wide
variety of supporting outlays, will mount rapidly as the
announced expansion of our military strength gets under way.
Farm price support expenditures also moved downward in
the second quarter, as the continuing recovery of agricultural
prices diminished dependence upon government support.
Difficulties of seasonal adjustment impair the precision of
quarterly data on this component of Federal purchases, but
the general declining trend is clear.
Offsetting the diminution of military and price-support
disbursements in the April-June period was an upswing in
expenditures for foreign aid, mainly under the European
Recovery Program. This rise was temporary, reflecting
chiefly the make-up of earlier lags behind original schedules
for fiscal 1950, and the rate of ERP payments is expected
to subside in coming months. Expenditures from the
Mutual Defense Assistance appropriation, on the other
hand, first appeared in more than nominal volume in the
second quarter, and will be a growing factor as the year
progresses. This rise will be very sharply reinforced, of
course, if the President's recommendation of an additional
$4 billion for this purpose is adopted.
The steady advance of State and local government purchases, which has persisted throughout the entire postwar
period, began to taper off somewhat last year. This tapering
off appeared to be confirmed in the second quarter, when
State and local outlays for goods and services showed no
further increase.

THE FLOW OF INCOME
Basic personal income flow higher
Personal income in the second quarter—other than the
special insurance dividend payments to veterans—was at an
annual rate of $213 billion;$5 billion above the March quarter.


89 7 3 3 5—5 0—2


9

Table 4.—National Income and Product, Fourth Quarter 1949 and
First two Quarters 1950 1
[Billions of dollars]
Season ally adjusted at
ar nual rates

Unadjusted
Item

1949

19 50

1949

19 50

IV

I

II

IV

I

54.1

53.8

(2)

214.2

217.2

(2)

Compensation of employees
Wages a n d salaries
_ _ _ _ _ _
Private
Military
Government civilian
Supplements to wages and salaries _ _

35. 6
34.0
28.6
1.2
4.3
1.6

35.0
33. 2
27.9
1. 1
4.2
1.8

36.9
35.0
29. 6
1.1
4.3
1.9

140.2
133. 6
112.7
4.6
16. 4
6.6

142.3
135.2
114.3
4.5
16.4
7.1

147.6
140. 2
119.2
4.5
16. 5
7.4

Proprietors' and rental income 3
Business and professional
Farm
Rental income of persons

10.2
5.1
3.2
1.8

10.4
5.4
3.2
1.8

10.3
5.6
3.0
1.8

40.7
20. 6
12.8
7.3

41.5
21.4
12.8
7.3

41.3
22.3
11.8
7.2

Corporate profits and inventory valuation adjustment
Corporate profits before tax
Corporate profits tax liability
Corporate profits after tax
_ __
Inventory valuation adjustment

7.1
6.9
2.7
4.2
.2

7.2
7.3
2.9
4.5
2

(2)
(2)
(2)
(2)
-.6

28.4
27.6
10.6
16.9
.8

28.4
29.2
11.4
17.8
— .7

(2)
(2)
(2)
(2)
-2.3

Net interest

1.2

1.2

1.3

4.8

5.0

5.0

NATIONAL INCOME BY
DISTRIBUTIVE SHARES
National income

II

Addendum: Compensation of general
government employees
GROSS NATIONAL PRODUCT OR
EXPENDITURE
Gross national product

5.1

5.1

5.1

20.0

19.7

19.8

67.2

63.1

65.7

253.8

262.5

269.9

Personal consumption expenditures- _ _
Durable goods .
Nondurable goods
Services
_ _

48.9
7.2
27 4
14.3

43.2
6.0
22 fj
14.6

45.7
6.5
24.4
14.8

180.6
25.3
97.9
57.4

182.4
26.9
97.5
58.0

184. 5
26.7
99.0
58.8

Gross private domestic investment- . _
7.7
New construction
4.7
Producers' durable equipment
4.7
Change in business inventories,
total
-1.7
Nonfarm only
-1.5

10.4
4.1
4.8

10.0
5.2
5.6

31.2
18.2
18.7

40.5
19.9
19.3

45.9
20.9
21.6

1.4
1.5

-.8
—.7

-5.7
-4.7

1.3
2.1

3.4
4.0

-.1

-.5

-.5

-.7

-1.9

-2.0

Net foreign investment
Government purchases of goods and
services
Federal
Less: Government sales
State and local
__
DISPOSITION OF PERSONAL
INCOME
Personal income

10.8
6.1
.1
4.7

10.1
5.7
.1
4.4

10.5
5.7
.1
4.9

42.8
24.6
.3
18.5

41.4
22.8
.3
18.9

41.4
22.8
2

52.6

53.4

53.8

205.4

216.4

214.7

Less: Personal tax and nontax payments
Federal
State and local

3.7
3.1
.5

6.8
6.0
.8

3.8
3.2

18.7
16.1
2.5

18.7
16.1
2.6

19.2
16.6
2.6

Equals: Disposable personal income

49.0

46.6

49.7

186.8

197.7

195.5

Less: Personal consumption expenditures

48.9

43.2

45.7

180.6

182.4

184.5

.1

3.4

4.0

6.2

15.3

11.0

67.2

63.1

65.7

253. 8

262. 5

269.9

4.8

4.9

5.1

19.3

19.7

20.4

5.5
2
2.6

5.3
.2
-1.0

5.6
.2
(2)

21.5

21.7
.7
3.4

Equals* Personal saving

is! 8

RELATION OF GROSS NATIONAL
PRODUCT, NATIONAL INCOME,
AND PERSONAL INCOME
Gross national product

Less: Capital consumption allowances. _
Indirect business tax and nontax liability
Business transfer payments
Statistical discrepancy
Plus: Subsidies less current surplus of
ETO vern men t, on terpri SPS
Equals: National income
Less: Corporate profits and inventory
valuation adjustment
Contributions for social insurance
Excess of wage accruals over disbursements
Plus: Government transfer payments- _ _
Net interest paid by government
Dividends
Business transfer payments
Equals: Personal income1
2

.0

.1

54.1

53. 8

.1

-L9
.0

.2

2

214.2

217.2

2

()
1.8

28.4
5. 7

28.4
6.7

22.7
.7

(2)

()

.5
2

()
(2)
6.9

7.1
1.3

7 2
1.8

.0

.0

.0

.0

.0

.0

3.0
1.3
2.5

5. 3
1. 1
1.9
.2

3.5
1.4
1.8
2

11.8
4.7
8.2

20.9
4.7
8.1

14.2
4.7
8.1

52.6

53.4

53. 6

295. 4

216.4

214.7

Detail will not necessarily add to totals because of rounding.
Not available.
s Includes noncorporate inventory valuation adjustment.
Source: U. S. Department of Commerce, Office of Business Economics.

* BUSINESS STATISTICS
JL HE DATA here are a continuation of the statistics published in the 1949 Statistical Supplement to the SURVEY OP CURRENT BUSINESS.
That volume (price $1.25) contains monthly data for the years 1945 to 1948, and monthly averages for earlier years back to 1935 insofar as available; it also provides a description of each series and references to sources of monthly figures prior to 1945. Series added or revised since publication of the 1949 Supplement are indicated by an asterisk (*) and a dagger (f), respectively, the accompanying footnote indicating where historical
data and a descriptive note may be found. The terms "unadjusted" and "adjusted" used to designate index numbers and dollar values refer to
adjustment of monthly figures for seasonal variation.
Monthly averages for 1949 are shown in the March 1950 issue of the Survey of Current Business.
selected series will be found in the Weekly Supplement to the Survey.
Unless otherwise stated, statistics through
1948 and descriptive notes are shown in the
1949 Statistical Supplement to the Survey

Data subsequent to June 1950 for

1950

1949

June

July

August

September

October

November

December

January

February

March

April

May

June

GENERAL BUSINESS INDICATORS
NATIONAL INCOME AND PRODUCT f
Seasonally adjusted quarterly totals at annual rates:
National income total
bil. of dol
Compensation of employees total
do
Wages and salaries, total
do
Private
do
Military
do
Government civilian
do
Supplements to wages and salaries
do
Proprietors' and rental income, total<? -do •
Business and professional c?
do
Farm
do
Rental income of persons
do
Corporate profits and inventory valuation adjustment total
bil of dol
Corporate profits before tax, total
do
Corporate profits tax liability
do
Corporate profits after tax
do
Tnven torv valuation adjustment
do
Net interest
do

217.8
HO. 5
134.2
114.0
4.2
16.1
6.3
42.2
21.1
13.7
7.4

216.7
140.0
133. 6
113.0
4.3
16 3
6.4
40.1
20.7
12.2
7.2

214.2
140 2
133.6
112 7
4.6
16 4
6.6
40.7
20 6
12.8
7 3

217.2
142 3
135.2
114 3
45
16 4
7.1
41.5
21 4
12.8
7 3

30.4
26.4
10.0
16.4
3.9
4.7

31.8
28.2
10.8
17.3
3.7
4.8

28 4
27.6
10 6
16.9
8
4.8

28 4
29.2
11 4
17.8
5.0

—2 3
50

Gross national product total
do
Personal consumption expenditures, total do
Durable goods
do
Nondurable goods
do
Services
do
Gross private domestic investment
do
New construction
do
Producers' durable equipment
do
Change in business inventories
do
Net foreign investment
do
Government purchases of goods and services,
total
bil. of dol
Federal (less Government sales)
do
State and local
do

255.2
178.4
23.0
99.2
56.2
31.3
16.8
19.8
-5.3
1.3

254.4
179.0
24.7
97.6
56.6
32.1
16.9
19.4
—4.2
.1

253.8
180.6
25 3
97.9
57.4
31.2
18 2
18.7
—5 7
-.7

262 5
182.4
26 9
97.5
58 0
40.5
19 9
19.3
13
—1.9

269 9
184.5
26 7
99.0
58 8
45.9
20 9
21.6
34
—2 0

44.3
26.6
17.7

43.2
25.1
18.2

42.8
24 3
18.5

41.4
22 6
18.9

41.4
22 6
18.8

Personal income total
Less* Personal tax and nontax payments
Equals* Disposable personal income
Personal saving§

206 8
18.7
188.2
9.8

203 8
18.7
185.1
6.2

205 4
18 7
186.8
6 2

216 4
18 7
197.7
15 3

214 7
19 2
195.5
11 0

do
do
do
do

147 6
140 2
119 2
4 5
16 5
7 4
41.3
22 3
11.8
7 2

PERSONAL INCOME, BY SOURCE f
Seasonally adjusted, at annual rates:
Total personal income
bil of dol
Wage and salary receipts, total
do
Employer disbursements, total .. _ _ d o
Commodity-producing industries
do
Distributive industries _ _ _
do
Service industries
do
Government
_. do__ _
Less employee contributions for social insurance
bil. of dol
Other labor income
_ _
__ do ___
Proprietors' and rental income
__do
Personal interest income and dividends. -do
Total transfer payments
do
Total n on agricultural income

do

205.9
131.6
133. 9
56.4
39.6
17.5
20.4

r

203. 5
131.4
133.5
56.0
39.4
17.4
20.7

r

204.3
131.3
133.5
56.3
39.4
17.3
20.5

203.4
131. 6
133.8
56.4
39.4
17.4
20.6

202.4
ir.O. 3
132. 5
54.8
39.0
17.8
20.9

205 7
131.3
133.4
55.5
39.0
17 8
21.1

208 4
132 9
135.1
57.0
39 3
17 8
21.0

214 6
132 2
135.0
56.7
39 5
17 9
20.9

215 4
131 5
134 2
55.8
39 3
18 1
21.0

219 3
133 6
136.4
57.7
39 6
18 1
21.0

213 8
135 3
138.1
59.1
39 7
18 2
21 1

2.3
2.9
42.2
16.8
12.4

2.1
2.9
40.2
16.6
12.4

2.2
2.9
40.7
16.8
12.6

2.2
3.0
39.2
17.0
12.6

2.2
3.0
39.8
17.2
12.1

21
3.1
41.7
17.2
12.4

22
3. 1
40 6
18.9
12.9

28
30
43 5
17.5
18.4

2 7
30
41 0
17.7
22.2

28
33
40 2
18.0
24 2

28
33
39 8
18.2
17.2

187.4

186.8

187.3

187.8

186.0

187.6

191 1

195 2

199 0

203 7

198 7

r 214 5

21.0

215 8
138 9
141.8
62.3
40 1
18 5
20.9

28
3 4
41 5
17.8
14 1

2 9
3 4
42 7
17.4
13.4

r igg 4

199 1

r
T

137 7
140. 5
r
T

60.9
40 1

r 18 5
71

r

NEW PLANT AND EQUIPMENT
EXPENDITURES
All industries, quarterly total
Manufacturing
Mining
Railroad
Other transportation
..
Electric and gas utilities
Commercial and miscellaneous

mil. of dol
__do
do
do
__do
do
do

4,660
1,880
190
380
140
780
1,290

4,370
1,690
180
310
140
790
1,260

4,630
],830
180
300
120
890
1,320

i 4 530
1
1 970
i igo
i 300
i 90
l 850
1
1. 170

3 700
1 520
150
230
80
650
1.060

r

Revised.
i Estimates based on anticipated capital expenditures of business; estimates for July-September 1950 are shown on p. 2 of the June 1950 SURVEY.
fRevised series. Quarterly estimates of national income, gross national product, and personal income and monthly estimates of personal income have been revised beginning 1946:
see pp. 28-35 of the July 1950 SURVEY for the revised figures,
cflncludes inventory valuation adjustment.
§Personal saving is excess of disposable income over personal consumption expenditures shown as a component of gross national product above.
897335—50

i




S-l


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102