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SURVEY OF CURRENT BUSINESS

November 1948

National Product and Income in the Third Quarter of 1948
1 HE market value of the Nation's output of goods and
services, as measured by gross national product, rose to an
annual rate of 256 billion dollars in the third quarter of 1948,
an increase of 6 billion over the second quarter. The national
income, which measures the Nation's output in terms of the
incomes accruing in production, showed a comparable increase, although precise figures cannot yet be given because
information on third-quarter corporate profits is not available.
Personal income rose by 5 billion dollars to an annual rate
of 214 billion. This third major indicator of national economic activity consists of the current income receipts of persons from all sources and differs from national income by
excluding incomes that are not distributed (such as undistributed corporate profits), and by including income receipts
that are not derived from current production (such as socialsecurity benefits and other transfers).
The third-quarter rise in the flow of incomes and of production was due to a continued increase in prices, as well as to
larger physical volume based mainly on higher employment
and some improvement in materials supplies.
Chart 3.—Gross National Product, by Major Components
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

300

300

250 -

~ 250

200 -

- 200

Three major developments that occurred at the turn of
the first quarter contributed to the resumption of inflationary
trends in the second: the reduction of individual income
taxes, the enactment of the Foreign Assistance Act, and the
prospect of increased military expenditures. Prices rose
from their February lows; consumer expenditures expanded;
Table 3.—National Income and Product, First Three Quarters of
1948 1
[Billions of dollars]
Seasonally adjusted,
at annual rates

Unadjusted
Item
I

II

III

I

II

III

53.2

55.5

(')

215.1

221.7

(2)

32.9 33.6
31.6 32.3
27.1 27.7
.9
.9
3.6 3.7
1.3 1.3

35.2
33.9
29.5
.9
3.6
1.3

133.7
128.8
111.1
3.5
14.2
4.9

134. 2
129.3
111.2
3.6
14.5
5.0

140.6
135. 6
116. 4
3.7
15.6
5.0

12.6
6.3
4.5

12.6
6.2
4.5

50.6
25.0
18.0

51.8
25.4
18.9

50.2
24.8
17. 9

7.8
(2)
8.4
(2)
3.3
(2)
5.1
(2)
—.6 -1.0

26.2
31.4
12.2
19.2
-5.3

30.9
33.4
13.0
20.4
-2.5

National income by distributive shares
National income
Compensation of employees
Wages and salaries
Private
Military
Government civilian
_
Supplements to wages and salaries
Proprietors' and rental income 3
Business and professional
Farm
_
Rental income of persons ....

_ _
__

Corporate profits and inventory valuation adjustment
6.5
7.8
Corporate profits before tax
__ _
Corporate profits tax liability
3.0
Corporate profits after tax
4.8
Inventory valuation adjustment
- -1.3
Net interest
__
Addendum: Compensation of general government employees

13.0
6.3
4.7

2
(2)
(2)
(2)
()
-3.9

1.2

1.2

1.2

4.6

4.7

4.8

4.2

4.3

4.1

16.5

16.9

17.8

59.6

61.0

64.2

244.9

250. 4

255. 9

41.1
4.8
23.8
-- __ 12.5

43.3
5.4
25.2
12.7

43.8
5.6
25.2
13.0

172.1
21.2
101.2
49.7

176.5
22.6
103.2
50.6

178. ,5
23. 6
102. 9
51.9

10.1
2.9
1.4
1.5
5.0
2.2
2.3

8.5
3.6
1.7
1.9
5.2
-.3

10.9
4.3
2.1
2.2
5.3
1.3
1.1

38.7
14.3
7.0
7.3
19.8
4.6
5.1

37.6
14.4
6.9
7.4
20.9
2.3
1.8

39. i)
14.8
7.1
7.7
21.4
2.8
1.8

1.0
7.5
4.4
.3
3.4

.7
8.5
4.8
.1
3.8

.2
9.3
5.7
.1
3.7

3.9
30.1
17.6
1.2
13.7

2.9
33.5
19.3
.5
14.7

.7
37.7
22.6
.4
15. 5

51.1
9.2
8.6
.6
41.8
41.1
.7

52.4
3.9
3.3
.6
48.5
43.3
5.2

53.2
4.3
3.8
.5
48.9
43.8
5.1

207.3
23.2
21.1
2.1
184.1
172.1
12.0

209.0
20.8
18.7
2.1
188.2
176.5
11.7

213. 9
20. 2
18.1
2.]
193. 7
178. 5
15. 2

59.6 61.0
3.6
3.5
4.9
4.7
.2
.2
-2.0 -3.1

64.2
3.6
5.1
.2
(2)

244.9
14.0
19.1
.6
-4.2

250.4
14.3
19.7
.6
-6.0

255. &
14.6
20.1
.6
(2)

Gross national product or expenditure
150 -

- 150

Gross national product

„_

Personal consumption expenditures
Durable goods
_Nondurable goods
Services _ _ - -- -Gross private domestic investment
New construction
Residential nonfarm
Other
_.
_
Producers' durable equipment
Change in business inventories, total
Nonfarm only

100 -

-50

1939 4O 41 42 43 44 45 46
YEARLY TOTALS «/

1947

1948

QUARTERLY TOTALS,
SEASONALLY ADJUSTED,
AT ANNUAL RATES

£/. 5. DEPARTHENT OF COMMENCE, OFFICE OF BUSINESS ECONOMICS.

1 Data are for goods and services.
2 "Gross National Product" for the years 1942-45 consists of the positive values shown on
the chart minus the negative values shown for "Net Foreign Investment."
Source of data: U. S. Department of Commerce, Office of Business Economics.

Aggregate Demand Continues Strong in Third Quarter

Third-quarter expansion was a continuation of secondquarter developments (discussed in the August issue of the
SURVEY). It was in contrast to the hesitancy of economic
activity which was noticeable in the first quarter (May
issue of the SURVEY). As will be recalled, this first-quarter
hesitancy was shown in the February break of farm prices
and a leveling-off in other prices. It was traceable also in a
large accumulation of inventories which, in part at least,
could be diagnosed as involuntary and resulting from lowerthan-anticipated purchases by consumers. The first-quarter
increase of these purchases was less than any prior quarterly
increase in the entire postwar period.



Net foreign investment.
__ _
Government purchases of goods and services
Federal
Less: Government sales.
.State and local
_ __

A

Disposition of personal income
Personal income
Less: Personal tax and nontax payments
Federal
State and local
. .
Equals' Disposable personal income
Less' Personal consumption expenditures
Equals* Personal saving
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 Government enterprises
__ .
Equals' National income
Less: Corporate profits and inventory valuation
ad j ustment
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 income
_
1
2
3

0
53.2

0
55.5

.1
(2)

-.2
215.1

-.1
221.7

.3
(2)

6.5
1.3
0
2.7
1.1
1.7
.2
51.1

7.8
1.3
0
2.7
1.4
1.7
.2
52.4

(2)
1.3
0
2.5
1.0
1.8
.2
53.2

26.2
5.0
0
10.9
4.6
7.3
.6
207.3

30.9
5.0
0
10.6
4.7
7.3
.6
209.0

(2)
5.2
-.1
10.2
4.8
7.7
.6
213.9

Detail will not necessarily add to totals because of rounding.
Not available.
Includes noncorporate inventory valuation adjustment.

Source: U. S. Department of Commerce, Office of Business Economics.

il/lontnlu

BUSINESS STATISTICS

J-HE DATA here are a continuation of the statistics published in the 1947 Statistical Supplement to the SURVEY OF CURRENT BUSINESS.
That volume contains monthly data for the years 1941 to 1946, 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 1941. Series added or revised since publication of the
1947 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 refer to adjustment of monthly
figures for seasonal variation.
Data subsequent to September for selected series will be found in the Weekly Supplement to the Survey.
Unless otherwise stated, statistics through
1946 and descriptive notes may be found in
the 1947 Supplement to the Survey

1948

1947

September

October

November

December

January

February

March

April

May

June

July

August

September

GENERAL BUSINESS INDICATORS
NATIONAL INCOME AND PRODUCTf
Seasonally adjusted quarterly totals at annual rates
National income, total
bil. of dol
Compensation of employees, total
do
Waees 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
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
Inventory valuation adjustment
do
Net interest
do

215.1
133.7
128.8
111.1

'
'
'
'

221. 7
134. 2
129. 3
111.2

200.6
127 6
122.5
105 3
3.7
13 5
5.1
44.4
23.0
14.3
7.1

212.8
132 2
127.1
109 §

7.4

50.6
25.0
18.0
75

24 3
29.1
11.4
17.7
-4.8
4.4

27 5
32.4
12.7
19.7
-4.9

26.2
31.4
12.2
19.2
-5.3

30.9
33.4
13.0
20.4
-2.5

4.5

4.6

4.7

Gross national product, total
do
Personal consumption expenditures,total do
Durable goods
do
Nondurable goods
do
Services
do
Gross private domestic investmentdo
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

227.9
165. 6
21.1
96.8
47.7
25.6
11.6
17.6
-3.5

243.8
171.1
22.1
100.2
48.8
35.4
14.0
18.9

Personal income, total
Less: Personal tax and nontax payments
Equals: Disposable personal income
Personal savings §

do
do
do
do

3.6

3.5

3.6

14.5
'5.0
'51.8
25.4
18.9

14.2

14 0

4.9

5.0

48.6
24.7
16 5

7.6

r

—3 9
4 8

r

244. 9
' 172. 1
'21.2
r

250. 4
' 176 5
'22.6
' 103. 2
' 50.6
' 37. 6
' 14.4
'20.9
2.3

255 9
178 5
23 6
102 9
51 9
39 0
14 8
21 4
2 8

'30.1
' 17.6
'13.7

'33.5
r
19.3
' 14.7

37 7
22 6
15 5

207.3
'23.2
' 184. 1
' 12.0

'209.0
'20.8
' 188. 2
' 11.7

213.9
20.2
193.7
15 2

101. 2

'49.7
'38.7
14.3
'19.8

8.4

2.5
8.2

4.6
3.9

28.3
15.7
12.6

29.0
15.5
13 5

196. 7
21.7
175.0

203.1
22.2
180.9

9,4

140 6
135 6
116 4
37
15 6
50
50 2
24 g
17 9
75

9.7

7

'2.9

PERSONAL INCOME BY SOURCE t
Seasonally adjusted, at annual rates:
Total personal income
bil. of dol
Wage and salary receipts, total _ _
do
Employer disbursements, total _
, do
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 nonagricultural income

_

do

206.2
121.9
123.9
55.4
36.0
15.2
17.3

200.0
122.7
124. 7
55.9
36.0
15.2
17.6

201.4
125.5
127.3
57.4
37 1
15.2
17. 6

207.7
127.4
129.4
59.2
37.4
15.2
17.6

209.4
127.5
129.7
59.3
37.5
15.3
17.6

200.8
126.9
128.9
58.0
37.8
15.4
17,7

205.6
125.7
127.8
57.0
37.5
15.4
17.9

207.4
125.0
127.0
56.3
37.2
15.6
17.9

207.2
126.8
128.8
57.2
37.9
15.6
18.1

212.3
129.7
131.9
59.6
38.2
15.8
18.3

212.9
131.8
134.0
60.0
39 0
16.2
18.8

' 214 6
' 134 3
' 136 5
'61.3
39 5
' 16 3
' 19 4

214 6
134.5
136.8
61.5
39 5
16.2
19 6

2.0
1.9
45.0
16.2
21.2

2.0
1.9
47.5
15.9
12.0

1.8
1.9
47. 1
16.1
10.8

2.0
1.9
51.3
16.2
10.9

2.2
1.9
52.4
16.5
11.1

2.0
2.0
50.0
16.6
11.3

2.1
1.9
49.3
16.6
12.1

2.0
2.0
51.9
16.7
11.8

2.0
2.0
50.7
16.8
10.9

2.2
2.0
52.8
16.8
11.1

2.2
2.1
51.0
17.0
11.0

2.2
2 1
' 50 0
'17.3
10 9

2. q
o

49 8
17.6
10 6

187.4

179.7

181.4

184.2

184.7

184.5

184.1

183.7

184.4

187.7

189.3

' 191 6

192 2

2 1

NEW PLANT AND EQUIPMENT EXPENDITURES
r 4 940
4,170
All industries, total
mil of dol
4 140
500
Electric and gas utilities
do
500
620
1,800
Manufacturing
do
2 290
1 870
180
Mining
do
180
210
270
r 300
Railroad
do
230
180
Other transportation
do
200
190
1,240
Commercial and miscellaneous
do
1,160
1,340
Revised,
i Estimated based on anticipated capital expenditures of business.
Personal sayings is excess of disposable income over personal consumption expenditures shown as a component of gross national product above.
Revised series. Estimates of national income, gross national product, and personal income have been revised beginning 1944; see pp. 27-29 of the
811275°—48
4




i 4 950
i 69Q
i 2 160
i 200
i <36o
i 170
1 1. 360

4 810
640

2 140
200
300
190

1,340

Ju] 1948 Survey for the revised figures.
ily

S-l

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