The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
10 SURVEY OF CURRENT BUSINESS with the goods portion down and services up. Consumer prices moved up a little, with the overall movement the result of divergent tendencies again in the markets for commodities and services. Increases have continued in shelter outlays, coming from the improved supply of housing and the rise in rents, and in such associated items as telephone and utility services. Volume gains as well as some price advances have occurred in these areas of demand. quarter approximated a seasonally adjusted annual rate between $17 and $18 billion. This was a billion or two under the highs established in the first half of the year, which had owed something to the poststrike backlog of demand. The easing in sales of household durables since 1960 opened has been more noticeable in major appliances than in furniture. The course of demand in these markets is affected by changes in the rate at which new houses are being completed and occupied. Several of the principal shifts in consumer buying since midyear have been of types which are often accompanied b}^ short-run changes in the flow of saving. The decline in spending for durable goods was reflected in a slowing of consumer credit expansion and some lessening of pressure on the liquid asset position of consumers. Changes in bmung of items of longer life among the nondurables, such as clothing, probably have a similar though less marked effect; and on several occasions changes in food costs have also been associated with inverse movements in consumer saving. Lessened buying with income maintained resulted in an advanced rate of saving in the third quarter, though in relation to disposable income it is still Drop in durables Purchases of consumer durable goods were reduced by 4 percent, almost $2 billion at an annual rate, in the third quarter, as auto buying fell back from its poststrike peak while furniture and appliance sales moved downward for the third consecutive quarter. The decrease in purchasing of new cars was the major element in the lowering of durables spending. Allowances for seasonal variation cannot be precise, particularly as last summer's auto market was influenced by the unusually early changeover to the new models and by the prospect of additional lines of compact cars to be introduced in the fall. It appears, however, that consumer auto purchases in the third November 1060 not much higher than the average rates of 1951-53 and 1956-58. Fixed Investment and Inventories The largest change in the third quarter came from the shift in business inventory policy, with a resultant cessation of the earlier strong demand from this source. Producers' equipment outlays and private construction activit}^ were little changed. Residential building continued to move down. A moderate easing of interest rates has occurred, but lead series such as permits issued and applications for FHA and VA backing indicated little if any strengthening of demand. Outlays for current residential work are now off about one-tenth from the high reached in the spring of 1959, and the cut in the number of housing units started has been more pronounced. The decrease centered mainly in onefamily dwellings, as apartment-building activity has not declined so much and is strong in comparison with earlier postwar years. Fixed investment high Business fixed investment approached a seasonally adjusted annual rate of $50 billion in the third quarter. This important segment is $10 billion higher, Table 10.—Gross National Product In Current and Constant Dollars (1-3, 1-5) [Seasonally adjusted at annual rates] Billions of 1954 dollars Billions of current dollars 1959 1957 1958 1960 1957 1959 IV III I II III 1958 1959 1959 1960 III IV I III II Gross national product 442. 8 444.2 482. 1 481.4 486.4 501.3 505. 0 503.5 408.6 401.0 428.0 426.3 429.1 440.5 442.2 438.0 Personal consumption expenditures 285.2 293. 5 313.8 316.0 319.6 323. 3 329.0 328.3 271.2 273.6 289.4 290.8 292.8 294.8 298.3 296.9 40.4 137.7 107. 1 37.3 142. 0 114.2 43.4 147.6 122.8 44.0 148.0 124.1 43.5 149.6 126.6 44.2 150. 5 128.6 44.5 153. 5 130. 9 42.7 152.7 132.9 38.5 132.6 100.1 35.6 133.7 104.3 40.8 139.3 109.3 41.2 139.5 110.1 41.1 140.5 111.2 41.8 141.1 112.0 41.9 143.2 113.3 40.2 142.3 114.4 Durable goods Nondurable goods ^cr vices _. _. _ Gross private domestic investment New construction __ Residential nonfarm__ Other .. Producers' durable equipment Change in business inventories Nonfarni . - _ Government purchases of goods and services Federal _. National defense Or tier Less* Government sales State and local 56.0 72.0 67.5 70.8 79.3 75.5 70.8 58.1 48.3 60.9 56.7 59.4 66.2 62.8 58.6 35.4 40.3 41.1 39.4 40.8 40.7 40.5 31.8 31.0 34.4 35.0 33.4 34.0 33.8 33. 6 17.0 19.0 18.0 17.4 22.3 18.0 22.6 18.5 21.3 18.1 21.4 19.3 21.3 19.4 21.1 19.5 15.3 16.5 16.2 14.9 19,4 15.0 19.6 15.4 18.3 15.0 18.3 15.7 18.2 15.6 18.0 15.6 28.5 23.1 25.8 26.5 26.8 27. 1 29.5 29.7 24.6 19.4 21.3 21.7 22.2 22.4 24.2 24.4 -2.5 5.9 -.1 4.7 11.4 5.3 .6 1.6 -2.2 5.2 .0 3.8 9.8 4.8 .6 .3 .7 -3.1 4.9 -.1 4.0 9.4 4.5 .3 1.6 Net exports of goods and services Exports Imports 66.1 36.1 .8 -3.6 5.4 —.5 4.3 11.0 5.0 4.9 1.2 -1.0 2 -.4 1.2 2.0 3.7 3.8 -.2 -2.4 25.2 23.9 26.4 24.4 27.3 23.5 24.4 20.6 21.4 21.6 21.9 24.3 23.1 24.8 22.5 24.0 -1.7 -1.5 -.1 .7 2.2 23.8 24.0 25.2 24.5 25.8 23.6 26.2 21.3 22.7 21.5 22.9 23.8 24.0 24.2 23.5 23.9 86.5 93.5 97.1 98.1 96.4 97.5 98.6 100.7 75.5 79.3 80.2 80.5 78.5 79.6 80.3 80.3 49.7 52.6 53.3 53.6 52.5 51.8 51.7 52.7 43.2 44.5 43.6 43.5 42.3 41.8 41.8 41.2 44.4 5. 7 .4 44.8 8.3 .5 46.0 7.8 .5 46.1 8.0 .5 45.5 7.5 .5 44.9 7. 5 .5 44.7 7.6 .6 45.1 8 2 .6 36.8 40.8 43.9 44.5 43.9 45.7 46.9 48.0 32.2 34.8 36.6 37.0 36.2 37.8 38.6 39.1 SUKVEY OF CURRENT BUSINESS November 1960 was nearly, but not quite, offset by continued strong advances in consumer demand and in non-Federal Government buying. With Federal outlays turning up quickly and expansion continuing in other markets, new highs in total demand were soon being recorded. Construction demand strong Demand for construction has up to now mitigated the severity of the postwar business declines and spurred the recoveries, partly as a result of Gov- ernment actions. From early 1956 through early 1958 construction volume showed little change in total, and at the GNP trough it was slightly higher than it had been at the peak of general business 2 quarters earlier. It turned strongly upward in the middle of 1958, providing considerable support to the overall economic recovery, as direct governmental action in this field and the move of the Reserve authorities towards general credit ease combined to make effective a rise in real demand. 19 Government construction outlays increased throughout the period. Federal steps to make more housing credit available were quickly reflected in the pace of residential building, which had been tapering before the business downturn, but leveled thereafter and moved vigorously up in the summer of 1958. Business investment in construction declined moderately at the end of 1957 and then sharply during most of 1958; recovery did not get underway until 1959. Table 4.—Gross National Product By Major Type of Product, in Constant Dollars [Billions of 1954 dollars, seasonally adjusted, at annual rates] Goods output Total GNP Final sales Inventory change Total Final sales Inventory change Durable goods Total Nondurable goods Final sales Inventory change Total Services Final sales Inventory change Construction 1947: I II III IV 278.4 280. 4 282.9 287.2 277.8 280. 9 285. 4 285.2 0.6 -.5 -2.5 2.0 161. 3 163. 4 163. 2 165. 3 160. 7 163. 9 165. 7 163. 3 0.6 -.5 -2.5 2.0 54.5 55. 9 59.0 55.8 52.4 54.0 55.2 55.4 2.1 1.9 3.8 .3 106. 8 107.5 104. 2 109. 5 108.3 109.9 110.6 107.9 -1.5 -2.4 -6.3 1.6 94.2 94.5 95. 3 94. 9 22. 9 22.5 24.4 27.0 1948: I II III IV 286. 4 293.3 295. 6 297.3 283.7 288.4 289. 8 293.2 2.7 4.9 5.8 4.1 164.5 168. 0 169. 1 169.4 161. 8 163. 1 163.3 165. 4 2.7 4.9 5.8 4.1 54.1 55.5 55.8 56. 2 53.9 54.8 54.7 54.9 2 .7 1.2 1.3 110.4 112.5 113.2 113.3 107.9 108. 3 108. 6 110.5 2.5 4.3 4.7 2.8 95. 0 96. 8 97. 6 99.6 26. 9 28.5 28. 9 28. 2 1949: I II III IV 291.5 290.3 295.6 293.0 292.0 296. 3 297. 6 299.1 -.4 -6.0 -2.0 -6.0 164. 0 161. 4 163. 7 160.0 164. 5 167.4 165.7 166. 0 -.4 -6.0 -2.0 -6.0 52.5 50.0 55.3 49.5 52.0 54.9 55.5 54.7 .4 -4.8 111.6 111.4 108.4 110.5 112.5 112. 5 110.2 111.4 -.9 -1.2 -1.8 -.8 99.4 100. 3 101. 8 101.2 28.1 28.5 30.1 31.8 1950: I II III IV 302.7 312.0 325.6 331. 6 300.0 306. 6 320. 4 316.1 2.7 5.4 5.2 15.5 166. 7 173.1 183.9 186.9 164. 1 167. 7 178.7 171.4 2.7 5^4 5.2 15.5 53.8 62.0 71.3 74.9 54.5 57.8 68.5 63.4 -.8 4.2 2.8 11.6 113.0 111.1 112.6 111.9 109.5 109.9 110. 2 108.0 3.4 1.2 2.4 3.9 102.7 103. 7 105. 4 108.4 33.3 35.2 36. 2 36.3 1951: I II III IV 334.0 340.0 346. 3 346.9 324.0 325. 6 336.5 342. 4 10.0 14.5 9.8 4.5 187.2 190.1 194. 6 194.5 177.2 175. 6 184.8 190.0 10.0 14.5 9.8 4.5 71.5 75.3 77.4 74.1 66.3 64.5 68.2 70. 5 5.2 10.8 9.2 3.6 115. 7 114.8 117.3 120.4 110.9 111.1 116.6 119.4 4.8 3.6 6 .9 110.2 113 7 116.0 116.8 36. 6 36 2 35. 8 35.6 1952: I II III IV 349.6 349.3 352.6 362.3 345.0 352. 0 348.9 357.4 4.6 -2.7 3.8 4.9 194.4 192.3 196.0 204.5 189.8 195.0 192.2 199.6 4.6 -2.7 3.8 4.9 75.0 73.7 71.0 80.6 71. 7 75. 5 70.5 77.8 3.3 -1.8 .5 2.8 119.4 118.6 124.9 123.9 118. 1 119.5 121.7 121.8 1.3 -.9 3.2 2.1 118.9 120. 1 119.9 120. 3 30. 3 36.9 36. 8 37.5 1953: I II III IV 368. 9 373.2 370.2 363. 9 366. 4 370.0 369.4 368.5 2.6 3.2 .7 -4.6 208.6 211.7 208.5 202.1 206. 1 208.5 207.8 206. 6 2.6 3.2 .7 -4.6 82.7 83.0 83.3 74.4 79.2 80.7 80.9 78.7 3.5 2.2 2.4 -4.2 125. 9 128.7 125.2 127.6 126.9 127.7 126. 9 128.0 -1.0 1.0 -1.7 -.3 121. 5 122.9 123.0 122.7 38.8 38.7 38.7 39.1 1954: I II III IV 360. 4 359. 4 362. 1 370. 1 362.9 362.3 364. 1 369.2 -2.5 -2.9 -2.0 .8 197.8 194.9 195.7 201.1 200.4 197. 8 197.7 200.3 -2.5 -2.9 -2.0 .8 72.3 70.5 70.2 73.1 75.8 74.5 72.0 73.3 -3.5 -4.0 -2.5 -.2 125.5 124.4 125. 6 128.0 124.6 123.2 125.1 127.0 .9 1.2 .5 1.0 122.7 123.8 124. 2 125.5 39.9 40.7 42. 1 43.5 1955: I II III IV 382.2 389.5 397.5 401.1 377.5 383.0 391.5 394.0 4.7 6.5 6.0 7.1 208.1 214.4 220.8 224.2 203.4 207.8 214.8 217.1 4.7 6.5 6.0 7.1 78.7 82.9 84.8 85.9 76.8 78.7 82.6 82.4 1.9 4.2 2.2 3.5 129.4 131.4 136.0 138.3 126.6 129. 1 132.2 134.7 2.8 2.4 3.8 3.6 128.8 129.2 131.0 131. 6 45.3 45.9 45.7 45.3 1956: I II III IV 398.8 398.9 400.2 405.5 393.0 394.8 396.2 401.5 5.8 4.1 3.9 4.0 222.1 220. 9 219.5 223.2 216.3 216.8 215.6 219.2 5.8 4.1 3.9 4.0 87.1 84.3 82.7 85.6 82.3 82.0 81.9 82.8 4.8 2.3 .8 2.8 134.9 136.6 136.9 137.6 134.0 134.8 133.7 136.4 .9 1.8 3.2 1.2 132.8 133.7 136. 6 138.8 43.9 44.3 44.0 43.5 1957: I II III IV 409.6 410.0 411.0 403.8 407.1 407.2 408.7 404.8 2.5 2.8 2.3 -1.0 226.5 225.2 224.6 217.2 224.0 222.4 222.3 218.2 2.5 2.8 2.3 -1.0 86.6 87.6 87.3 80.3 85.4 85.5 85.2 81.9 1.2 2.0 2.2 -1.6 139.8 137.6 137.2 136.9 138.5 136.9 137.1 136.3 1.3 .7 .1 .6 138.9 140.8 142.7 142.4 44.2 43.9 43.8 44.2 1958: I II III IV 391.6 394.6 403.1 414.3 397.9 398.7 404.4 411.4 -6.2 -4.1 -1.3 2.9 205.5 207.1 212.7 219.5 211.7 211.2 214.0 216.6 -6.2 -4.1 -1.3 2.9 69.6 69.4 71.0 76.0 75.9 73.6 72.5 74.7 —6.3 -4.2 -1.5 1.3 135.9 137.7 141.7 143.5 135.8 137.7 141.5 141.9 .1 .1 .2 1.6 142.1 144.5 146.3 148.3 44.0 43.0 44.0 46.5 1959: I II III IV 422.9 434.2 426.3 429.1 416.1 424.1 426.3 425.3 6.8 10.1 -.0 3.8 225.4 233.7 225.2 228.8 218.6 223.6 225.2 225.0 6.8 10.1 -.0 3.8 81.7 87.1 78.5 81.2 76.9 80.2 81.1 79.8 4.9 6.9 -2.6 1.4 143.7 146.6 146.7 147.7 141.8 143.4 144.1 145.2 2.0 3.2 2.6 2.4 148.6 150.7 152.5 154.6 48.9 49.8 48.6 45.7 I960: I II III 440.5 442.2 438.0 430.7 437.4 437.4 9.8 4.8 .6 237. 5 237. 1 231.5 227.7 232.3 230.9 9.8 4.8 .6 88.7 85.3 81.4 80.4 82.6 81.5 8.3 2.7 -.1 148.8 151.8 150.1 147.3 149.6 149.4 1.5 2.2 .7 155.6 157.4 158.8 47.4 47.6 47.7 —.2 —5'. 2 SURVEY OF C U R R E N T BUSINESS Paralleling' the 1957 experience, consi ruction outlays were firm after the peak in general business in both 1948— 49 and 1953-54, total expenditures remaining about unchanged during the following half year it) each case. In the two earlier postwar recessions, construct.ion a c t i v i t y then rose rapidly and was a substantial expansionary element in the economy. As in the more recent period, its general strength reflected the basic November 1000 uptrend in government purchasing and firmness followed by rapid expansion in residential building as the Federal authorities took affirmative action. Earlier the backlog and legacy of the war had been factors. National Product and Income (Continued from pa-ye 12) The recent course of the various types of persona] income is traced in table 11, and quarterly changes so far t h i s year are summarized on a national income basis in the accompanying text table. Income from corporate business The production declines which took place were largely in areas such as manufacturing, metal mining, and rail t ra 11 sport a tio 11, w 11 ere the cor pora t e form of business organization is the rule. A number of the areas where expansion occurred, by c o n t r a s t , are largely or entirely outside the corporate sphere. Government, for example, provided much of the increase over the second q u a r t e r in total compensation of employees. This pattern of change in the industrial composition of the n a t i o n a l income was not favorable to corporate business, and meant more pressure 4 on profit margins, which moved lower. From present indications there was a substantial reduction in profits, though data are not available to measure its size. Marked declines in profits and margins are reported for primary metals, a u t o manufacturing and chemicals, among other industries. Pattern of pay re II rise Strength in the wage and salary component of n a t i o n a l income since midyear has been m a i n l y a reflection of developments in government and other lines which a.re more i n f l u e n c e d by the growth trend in the n a t i o n a l economy than by short-term market fluctuations. Underlying the $2-billion increase in the a n n u a l payroll rate for the summer q u a r t e r was a $1.-billion dip in m a n u f a c t u r i n g , m i n i n g , and railroads, more t h a n offset by increases of $3 billion elsewhere. Of the l a t t e r total, the Federal G o v e r n m e n t a c c o u n t e d for $1 billion mostly reflecting the recent pay i n c r e a s e - - - a n d State and local governments provided. $/•> billion. Most of the r e m a i n d e r came I r o m t r a d e , cons t r u c t i o n , and services, in roughly equal proportions; m i n o r advances also occurred in finance and c o m m u n i c a t i o n s . I n t h e m a j o r i t y o f these i n d u s t r i e s , t h e flow of labor income c o n t i n u e d strong from m o n t h t o m o n t h d u r i n g t h e t h i r d quarter. The decline in m a n u f a c t u r i n g was sharpest in those durables industries for which production cutbacks h a v e been noted in the analysis elsewhere in this issue. Among the nondarables, wage and salary payments reflected some tapering in employment and hours worked in food, textile and certain other lines. Table 17.—Changes in National Income, 1960 r I n _1 ' in (Billions o f i l o l l - t r s - National income, total.... 11.6 n. a The factors responsible for payroll change were somewhat different after midyear t h a n before. Overall -and in most of the individual industries for whirli d a t a are available--—shifts in employment and weekly hours played a neutral or negative role; expansion stemmed from pay increases. BUSINESS STATISTICS THE;1 STATISTICS here are a continuation of the data published in the 1959 edition of BUSINESS STATISTICS, biennial Statistical Supplement to the SURVEY OF CURRENT BUSINESS. That volume (price $2,25) contains monthly (or quarterly) data for the years 1955 through 1958 and monthly averages for all years back to 1929 insofar as available; it also provides a description of each series and references to sources of monthly figures prior to 1955. Series added or significantly revised since publication of the 1959 BUSINESS STATISTICS are indicated by an asterisk (*) and a dagger (f), respectively; certain revisions for 1958 issued too late for inclusion in the aforementioned volume appear in the monthly STHVEY beginning with the July 1959 issue. Except as otherwise stated, the terms "unadjusted" and "adjusted" refer to adjustment for seasonal variation. Statistics originating in Government agencies are not copyrighted and may be reprinted freely. Data from private sources are provided through the courtesy of the compilers, and are subject to their copyrights. 1959 Unless otherwise stated, statistics through 1958 and descriptive notes are shown in the 1959 edition of SeptemDecemBUSINESS STATISTICS October Noveinber ber ber i 1960 January Februarv March 1 April May June July | August Septem- October ber GENERAL "BUSINESS INDICATORS NATIONAL INCOME AND PRODUCT t Seasonally adjusted quarterly totals at annual rates: t National income, total bil. of doL 399. 4 402 8 414 4 41Q 4 279 5 259 7 214.2 9 9 35 7 19.8 281 201 215 9 30 20 (i 5 0 8 1 1 290 208 222 9 30) 2 7 1 9 7 295 0 273 1 Proprietors' income, totaled do. _ Business and professional d* do Farm -- do .. „ Ren til income of persons do Corporate profits and inventory valuation adjustment, total -_ - ^ bil. o f d o l . _ Corporate profits before tax, total _-do Corporate profits tax liability -- -do _ Corporate profits after tax do Inventory valuation adjustment do . - 40. 1 35 0 11. 1 12.4 40 35 11 12 3 I 2 5 40) 35 Ml 12 0 4 0 5 48 1 30 0 12 1 44.9 45.3 22.3 22.9 ^ 45. 5 44 8 22. 1 Xot Interest do 1 0. 5 - do Compensation of employees, total Wages and salaries, total Private .. _ _ ._ Military Oovernment civilian Supplements to wages and salaries do do do do do .. do 10 0 37 0 21.9 19 f> '•'97 9 974 9 220. 0 10 1 '•!X 8 22. 3 48 3 30 1 ]•> 0 ]'' f) » 4,x. 0 48 8 23 8 25 0 —.8 45 45 92 93 10 9 17 8 18 5 481.4 480 4 501 3 505 0 503 5 Personal consumption expenditures, total do Durable tioods - do _ . Nondurable goods - -do Services _ _ .. _ . _do_ 310.0 44. 0 ] 48. 0 J24. 1 319 0 43. 5 149 0 120.0 323 44 150 128 3 2 5 0 32<) 44 153 130 398 4'> 1 V> 13'} Cross private domestic investment, total _ . do_ New construction do Producers' durable equipment do Change in business inventories . _ . - ,do . . 07. 5 41. 1 20. 5 — .1 70 8 39 4 '>0 8 4. 7 79 40 97 11 3 8 i 4 40 7 24.0 24.2 — .4 23. 5 23. 9 1. 2 •?5 2 23 9 2 0 '">0 4 l) 4 4 Gross national product, total Net exports of goods and services ._ do.. Exports _ _ _ . _do _ Imports - -- . - - - - - d o ._ Government purchases of goods and services, total bil. o f d o l - . Federal (less Government sales) ... _ d o National defense 9 ... do State and local ..- - . - ..- - -do.. Personal in corn e, total . . Less: Personal tax and nontax payments Equals: Disposable personal income. Personal sa vine § - -.- _ do do do .... _do 3 7 3 4 0 5 5 9 ](l 1 3 7 7 9 70 8 40 5 'H) " 5 3 3 7 27 3 4> 3 5 98. 1 53. 0 40. 1 44. 5 90 4 51 8 44 9 45 7 98 51 44 40 0 7 7 9 100 7 45. 5 43. 9 384. 8 40. 3 338. 5 38*). 0 40. 5 342 4 390. 2 49. 2 347 0 404. 2 50. 0 354 1 408. (I 50. 5 357 5 22. 5 9 2S 25 2 45 i 48 i) <H) <> GNP in constant (1954) dollars Gross national product, total . ... .bil. ofdol - Personal consumption expenditures, total Durable goods.. Nondurable goods .. S er vi ces do _ .do.. do do Gross private domestic investment, total do New construction ._ . . . . _. .. do Producers' durable equipment do Change in business inventories do Net exports of goods and services ... do Government purchases of goods and services, total bil. ofdol.. Federal do State and local _ . . . . do 420. 3 429. 1 440 5 442 2 438 0 290.8 41.2 139.5 110.1 292. 8 41.1 140. 5 294 8 41 8 141 1 1 1 2. 0 298 41 143 113 3 9 2 3 9% 9 56. 7 35. 0 21.7 59. 4 33. 4 02 33 24 4 8 8 2 8 58 0 33 0 94 4 (1 .0 3.8 00 2 34 0 22 4 9.8 — 1.7 1.5 1 80. 5 43.5 37.0 78. 5 42.3 30. 2 79 0 41 8 37.8 "Revised. tRevised series. Estimates of national income and product and personal income have- been revised back to 1957; 1959 for personal income) appear on pp. 8 ft", of the July 1960 SURVEY. concludes i n v e n t o r y valuation adjustment. 9 Governm ^Personal saving is excess of disposable income over personal consumption expenditures shown as a component of gross national pi 40 9 142 3 114 4 2 2 80 3 41 8 38. 0 .0, 41 9 39. 1 visions prior t< .» the 2d quarter 1959 (and prior to May t sales arc not deducted. S-l
@FedFRASER