Full text of Review (Federal Reserve Bank of St. Louis) : December 1962

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Little Change in Business Activity
Employment in the St. Louis
Metropolitan Area, 1950-1962
Outlook for Farming in 1963
REVIEW Index -1962

Little Change in Business Activity
Introduction
B USINESS ACTIVITY during the autumn months
has remained on the plateau prevailing since spring,
although the most recent statistics indicate some
strengthening of activity. Auto production and sales
have risen markedly since the new model introduction
in September. Personal income from September to
October recorded its largest increase since April.
Price movements have been moderate, suggesting
little strain of demand for goods and services on total
capacity. Employment continues at about the 67.8
million level, showing little net gain since February.
From August to mid-November bank reserves and the
money supply expanded. During this period Treasury
and Federal Reserve operations gave consideration
to the level of domestic economic activity while at
the same time avoiding policies which would have
tended to worsen the United States balance-of-payments position.

Business Activity
Output of the nation’s mines, factories and utilities
has moved since May within a narrow range of 118.4
to 119.8 per cent of the 1957-59 average, increasing
on balance less than 1 per cent.1 Industrial activity

measure of industrial output virtually unchanged
from September to October.
Manufacturers’ durable goods orders rose 3 per cent
from September to October, after allowance for sea
sonal factors. The October total of $16.6 billion ex
ceeded for the first time the January total of $16.4
billion. Between January and September manufac
turers’ durable goods orders fluctuated about the
$16.0 billion level. The rise in orders in October was
widespread, with special strength in steel and autos.
Corporate profits, which tend to reflect movements
in total business activity, fell slightly in the third
quarter from the $50.9 billion annual rate of the sec
ond quarter according to preliminary data, but have
been substantially unchanged since the fourth quar
ter of last year. Such profits have averaged around
$50.5 billion during the last four quarters. The total
cash flow to corporations is estimated to have deviat
ed little from an annual rate of about $55 billion dur
ing the last year. This flow, which includes profits
after taxes plus depreciation allowances, is a meas
ure of business capacity to pay dividends to stock
holders and to finance investment internally.

Income
Industrial Production

R a tio S c a le

R a t io S c a le

1957-59=100____________________________________ 1957-59=100
S e a s o n a lly A d ju ste d

t II

1 II

1960

I I I .

l 1 I I I

1 l I

i i 1 i i 1 i i 1 i i

1961

1962

S ource: Board of G o ve rn o rs of the F e d e ra l Reserve System
Latest d a ta p lo tte d : N o v e m b e r estim ated

has remained so stable for as many as five months in
only one other period during the last decade, from
mid-1955 to mid-1957. Industrial production in Oc
tober was at 119.5 per cent of the 1957-59 average,
and preliminary data suggest that little change oc
curred in November. Increases slightly larger than
seasonal since September in automobile assemblies
and in steel output were offset by fractional cutbacks
in several other industries, yielding an aggregate
1 The Federal Reserve Board’s index of industrial production has
been revised and the base has been shifted from 1957 to 1957-59.
For an explanation of these changes, see “Industrial Production—
1957-59 Base” in the October Federal Reserve Bulletin.

Page 2

Personal income increased $2.1 billion from a $443.5
billion annual rate in September to a $445.6 billion
rate in October. This rise was in contrast to the pre
vious five months, in which no monthly gains had
exceeded $1.4 billion. Factory payrolls were unchanged
from September to October, but most other income
categories advanced, including dividends, Govern
ment transfer payments, and payrolls in merchandis
ing, service and transportation industries.

Employment and Unemployment
Total civilian employment has been about un
changed, averaging about 67.8 million since Febru
ary. The number of persons employed tends to vary
with changes in general business activity. During the
period since the May 1960 peak, however, total civil
ian employment has been quite stable, increasing
sharply only in late 1961 and early 1962.
Unemployment has also been fairly constant, aver
aging 3.9 million since early this year. As a conse
quence, the unemployment rate has fluctuated gener
ally within a fairly narrow range throughout 1962.
It was 5.8 per cent of the civilian labor force in
November.

Average hours of work per week in manufacturing
have on balance declined since spring. The work
week in October, at 40.1 hours, was 0.5 hours below
the 40.6 average of the spring months.

1 9 5 7 -5 9 = 1 0 0

Prices
Price movements from September to October were
moderate and continued as evidence that the econ
omy’s capacity to produce is not being strained by
excessive demand for goods and services. The con
sumer price index, which had risen from 105.5 per
cent of the 1957-59 average in August to 106.1 in
September, declined to 106.0 in October. A large part
of these movements were attributable to fluctuations
in meat prices as a consequence of farmers withhold
ing livestock from the market. The wholesale price
index also rose from August to September and de
clined in the following month, for largely the same
reasons.
Industrial commodity prices have on balance been
unaffected by the Cuban crisis. The weekly whole
sale price index for industrial commodities, at 100.7
per cent of the 1957-59 average in the week ending
November 20, has been unchanged since early Octo
ber and is slightly below the January average of 101.0.

Bank Reserves
Effective reserves of member banks increased mark
edly, at an annual rate of about 8 per cent, from
August to the month ending mid-November. This
rapid increase is in sharp contrast to the experience
from April to August of a 1.4 per cent per annum
growth in such reserves. During the month from the
Status of the N atio n al Labor Force

S ou rce : United States D e p a rtm e n t of L a b o r
Latest d a ta p lo tted : C o n su m e r, O c to b e r
W h o le s a le , N o v e m b e r p re lim in a ry

first half of October to the first half of November,
effective reserves changed only slightly. Within this
month the proportion of time and savings deposits
which member banks are required to hold as deposits
at Reserve Banks or as cash in vault was reduced from
5 per cent to 4 per cent.2 The impact of lower reserve
requirements was more than offset by other factors,
however, chiefly seasonal currency outflows.
The effective reserves series have been adjusted to
take account of the influence of reserve requirement
changes on historical comparisons of movements in
bank reserves.3 For example, total reserves prior to
the reserve requirement change have been recalcu
lated as the sum of (1) actual excess reserves and (2)
new figures for required reserves which reduce pre
vious required reserves by 1 per cent of time deposits.
As shown in the chart (page 4 ), movements in
total reserves adjusted in this manner more closely
correspond to movements in the money supply plus
time deposits in commercial banks.
Because of a buildup of average Treasury deposits
in commerical banks and the rapid growth of time
deposits not only since August but throughout this
year, only a part of total reserve growth has been
available to support private demand deposits. Re
serves available to support private demand deposits
rose an estimated 6.4 per cent per annum from August
to mid-November after having declined at a 2.9 per
cent rate from April to August. The recent growth in
member bank reserves, both total and those available
to support private demand deposits, parallels the
autumn experience of the past two years. During the
2 This action was announced by the Board of Governors of the
Federal Reserve System on October 8, and became effective on/
October 25 in the case of reserve city banks and on November 1
for all other member banks.

S ou rce : U nited States Bureau of L a b o r Statistics
Latest d a ta plo tted : N o v e m b e r p re lim in a ry

3 For a discussion of the relationship between reserves and money
see “Member Bank Reserves and the Money Supply,” in the
March 1962 issue of this Review. A semi-monthly release on
total reserves and money can be obtained from the Research
Department, Federal Reserve Bank of St. Louis.

Page 3

Total Reserves and Deposits

autumn months of 1960 and
1961 heavy seasonal credit de
mands made it possible for re
serves to be expanded sharply
without putting downward pres
sure on interest rates which
would have aggravated short
term capital outflows.
Excess reserves of member
banks, which had moved around
the $470 million dollar level dur
ing September and October, rose
sharply following the reduction
in reserve requirements for time
deposits and averaged $585 mil
lion in November. Member bank
borrowings from Reserve Banks
also increased, averaging $150
million in the first two weeks in
November after remaining gen
erally under $100 million during
September and October. During
the last two weeks of November,
borrowings declined to about
$95 million.

Bank Credit and Money
With a more rapid expansion
of bank reserves taking place
since August, commercial bank credit, seasonally ad
justed, has been rising at an estimated annual rate of
12 per cent, in contrast to a 7.3 per cent rate from
April to August. The greater part of the expansion in
bank credit since August has been in loans. Com
mercial bank investments have been about unchanged.
Bank credit also rose markedly during the autumn
months of the past two years.

Latest d a ta plotted) N o ve m b er p relim in ary

The money supply (demand deposits plus currency
outside banks) expanded at a 4.6 per cent annual
rate from August to the month ending in mid-November, following a 2 per cent rate of contraction in the
previous four months. Despite the recent rise, the
money supply in mid-November, at about $146.7
billion, was only 1.2 per cent above a year earlier.
Because of the sharp rise in time deposits throughout
this year, the money supply defined broadly to include
this liquid asset has increased steadily. Money plus
time deposits expanded at an annual rate of 8.5 per
cent from August to mid-November, and in the seven
months since April has grown 5.5 per cent per annum.

Interest Rates
Yields on short-term U. S. Government securities,
which had been drifting downward since mid-July,
Page 4

rose at the beginning of November. The three-month
Treasury bill rate averaged 2.83 per cent during
November and 2.85 per cent during the week end
ing December 7, after having been in the neighbor
hood of 2.75 per cent during most of September and
October. The Treasury’s issuing of short-term securi
ties in greater than normal amounts may have been a
major influence in the increase in short-term rates,
which was not paralleled in other maturity sectors of
the capital market. Intermediate- and long-term U. S.
Government securities yields changed little in Novem
ber from October levels.

Treasury Activities
The Bureau of the Budget recently has estimated
that the U. S. Government will experience a cash bud
get deficit of $6.3 billion for the fiscal year ending
June 30, 1963, slightly larger than the $5.7 billion
deficit of the previous fiscal year. When the cash
budget for fiscal year 1963 was first presented it was
expected that a small surplus would be realized. The
revision to an expected deficit is largely a conse
quence of rising Government expenditures and slug-

(Continued on Page 11)

Employment in the St. Louis Metropolitan Area
1950-1962
Introduction
St. Louis Labor Market
T h e NUMBER OF PEOPLE which a community
is able to employ provides sotfie measure of that com
munity’s economic vitality. Short-run changes in local
employment serve as one index of the tempo of cur
rent business activity. Longer run changes provide
clues to the underlying shifts in the economic growth
and structure of the area. Movements in total employ
ment as well as its major components in the St. Louis
Metropolitan Area from 1950 to the present constitute
the focus of this presentation. In addition, there is a
review of the significant changes during the past sev
eral years in the structure of employment in the St.
Louis labor market.

The Data
E stim a t es OF LOCAL EMPLOYMENT are made
monthly by local employment security agencies in co
operation with the United States Bureau of Labor
Statistics.1 The total employment data include both
persons employed by firms which are covered by state
unemployment insurance programs and persons who
are not covered by the unemployment insurance pro
grams. Estimates of “covered” employment are de
rived from a sample of monthly payroll repents to em
ployment security agencies. Under cooperative ar
rangements with these state agencies, responding firms
fill out a schedule which is later used for national em
ployment estimates by the Bureau of Labor Statistics.
A significant number of workers are not covered by
state employment security programs. Current estimates
of the number employed by railroads and by state and
local governments are secured from special monthly
reports to the local agencies. Others not covered by
the state programs include those who work for firms too
small to be covered by state unemployment programs,
those who work for nonprofit organizations, the selfemployed, unpaid family workers, and private household
workers. In some cases a local employment agency’s
sample of establishments includes small firms and non
profit organizations. In other agencies, estimates of
these ana other noncovered categories are made by
making adjustments based on national data. The pro
cedures for estimating noncovered categories are based
1 The basic data used in this article were prepared by the Missouri Division
of Employment Security. The seasonally adjusted data were prepared by
the Research Department of the Federal Reserve Bank of St. Louis.

Total employment in the St. Louis labor market
averaged 817 thousand during the first ten months
of 1962. Of this total, about 715 thousand were clas
sified as nonagricultural wage and salaried workers
(the total of manufacturing and nonmanufacturing
payroll employment). The remainder, about 102
thousand consisted of agricultural workers (approxi
mately 11 thousand), and an “all other” category
(about 91 thousand) which includes the self-employed, unpaid workers in family businesses and
paid domestic workers in private households.

on extensive studies conducted joindy by the Bureau
of Labor Statistics and local employment security agen
cies. These estimating procedures are employed uni
formly by the local employment security agencies.2
There is a considerable body of detailed employment
data for various components of the employed work
force in the St. Louis Metropolitan Area. Seasonally
adjusted data are available with respect to payroll
employment in manufacturing and in its major cate
gories covering the period from 1950 to the present. In
1954 coverage was expanded to include estimates of
nonmanufacturing payroll employment. The total of
manufacturing plus nonmanufacturing employment is
referred to as nonagricultural wage and salaried em
ployment, or payroll employment. These data are pre
sented on pages 8 and 9. Payroll employment excludes
proprietors, the self-employed and domestic servants.
Beginning in January 1960 the Missouri Division of
Employment Security began publishing monthly esti
mates of total employment8 in the St. Louis labor
market, including estimates of proprietors, the self-em
ployed, and domestic servants.4
2 These procedures are described in

H a n d b o o k o n E s t im a t in g A r e a E m
p lo y m e n t o f S e lf- E m p lo y e d ,
U n p a id
F a m ily , a n d P r iv a t e H o u s e h o ld
W o r k e r s — N o n a g r i c u l t u r a l T o t a l , U. S. Bureau of Employment Security,

1960.

3 Workers on strike are excluded from local estimates of employment and
unemployment but are included in estimates of the work force. In
national data workers on strike are included among the employed.
4 Prior to January I960 the Missouri Division of Employment Security
prepared bi-monthly estimates of total employment. Because the estimat
ing procedures were somewhat different from those currently in use, the
total employment data prior to I960 are not comparable to the series
since January I960.

Page 5

TABLE I

Composition of the St. Louis Job Market
in Nonfarm Establishments
Com pared with the N ation and Selected Cities

1961
Employment Categories

St. Louis

U. S.

M em phis

Little Rock

Louisville

C hicago

Cleveland

Detroit

As a Per Cent of Payroll Employment of Nonfarm Establishments
................ ..........
..........
..........
Nondurables ................................. ..........
Nonm anufacturing ............................ ..........
G o v e rn m e n t................................... ..........
Services and T r a d e ........................ ..........
Contract Const................................ ..........
O ther N o n m a n u fa c tu rin g ................ ..........

Total Nonfarm

100.0
34.8
19.8
15.0
65.2
11.1
34.7
4.9
14.5

Employment

100.0
30.1
16.7
13.4
69.9
16.3
34.9
5.1
13.6

100.0
22.8
9.6
13.2
77.2
16.5
41.8
5.3
13.6

100.0
18.7
n.a.
n.a.
81.3
19.8
36.9
6.7
17.9

100.0
34.3
17.5
16.8
65.7
11.1
35.0
5.3
14.3

100.0
34.0
21.3
12.7
66.0
10.1
36.9
4.5
14.5

100.0
39.9
33.1
6.8
60.1
12.0
33.5
3.9
10.7

100.0
38.7
28.5
10.2
61.3
10.8
34.5
4.4
11.6

n.a.— N ot available

The composition of the job market varies from area
to area, reflecting the economic structure of the local
ity. As Table I indicates, the manufacturing compo
nent in the St. Louis Area constitutes a greater pro
portion of nonfarm payroll employment than the
average for the nation as a whole. Moreover, the
durables component (generally regarded as cyclically
sensitive) is also relatively more important in the
St. Louis labor market than is true of the nation. The
government component and the services and trade
component constitute a lesser share of the St. Louis
labor market than for the nation.

a comparison with Detroit and Cleveland indicates
that in both of these cities manufacturing constitutes
a larger share of the total.

C yclical M ovem ents
An analysis of Chart 1 reveals a broad correspond
ence of changes in St. Louis payroll employment with
changes in national business activity. There were de
clines in employment during the 1953-54, 1957-58,
and 1960-61 recessions (see shaded areas of charts).
During the 1954-57 and 1958-60 periods of recovery
and expansion there were marked increases in em
ployment. Thus far during the 1961-62 expansion
period, however*, the net gains in St. Louis payroll
employment, as in the nation, have been quite mod
erate.

The relative importance of manufacturing in St.
Louis is highlighted even more distinctly in compar
ing the St. Louis job market with the structure of the
payroll employment job market in Memphis and
Little Rock, two other large cities in the Eighth Fed
During the 1953-54 recession manufacturing em
eral Reserve District. Manufacturing employment
ployment in the St. Louis Area declined 15 per cent
constitutes a small proportion of these labor markets.
compared with a 10 per cent decline for the nation as
In Memphis, there is a greater concentration in the
a whole (see Chart 2). Looking behind the movements
manufacturing of nondurables than in durables. In
in local manufacturing employment, it appears that
Louisville, another large city in the Eighth District,
manufacturing as a percentage of payroll employment
the major source of fluctuation is in the durables
is comparable to that in the
St. Louis Area; however, there
CHART 1
is less concentration in the
durables area in Louisville
Payroll Employment in Nonfarm Establishments
than in St. Louis.
St. Louis Metropolitan Area
T h ou sa n d s of P e rson s

It may be more relevant to
compare the St. Louis job
market with that of other
large midwestern cities. There
is striking similarity between
the composition of the St.
Louis and Chicago job mar
kets (see Table I). However,
Page 6

T h o u s a n d s o f P e rs o n s
760

720

— 720

680

U: '
19 5 4

195 5

1956

195 7

1958

1959

1960

1961

S o u r c e : M i s s o u r i D i v i s i o n o f E m p lo y m e n t S e c u r it y
’ Revision in sample. Jefferson County, M issouri, a d d e d to St. Louis Stan dard Metropolitan Statistical Area.
L a t e s t d a t a p lo t te d : O c t o b e r

1962

nounced reductions in employment in the transporta
tion equipment industry, iron and steel foundries, and
fabricated metal products. These layoffs accounted
for 37 per cent of the overall reduction. Employment
in the machinery-producing industries ( including
electrical machinery) was reduced from more than 39
thousand to about 33 thousand workers, a decline of
nearly 15 per cent.

sector. During the 1953-54 recession, employment in
durables manufacturing, seasonally adjusted, declined
21 per cent, from 176 thousand workers in July 1953
to 140 thousand in August 1954. With the termination
of hostilities in Korea there were cutbacks in the
production of military goods. Declines in employ
ment in ordnance and in transportation equipment
(which includes the aircraft industry) accounted for
about half of the overall reduction. Layoffs in ma
chinery-producing industries accounted for 23 per
cent of the reduction, and declining payrolls in iron
and steel foundries made up another 17 per cent.

Payroll employment in the St. Louis Area fell by
nearly 24 thousand workers, or 3.3 per cent, during
the 1960-61 recession. Layoffs in manufacturing ac
counted for 75 per cent of the total reduction, with
major weaknesses in transportation equipment indus
tries.

During the recession from July 1957 to April 1958
payroll employment in the St. Louis Area, seasonally
adjusted, fell 2.5 per cent, a loss of 18 thousand jobs.1
In comparison, national payroll employment declined
4 per cent. As in the previous recession the decline in
St. Louis employment was confined to the manufac
turing sector. During this period there were pro

On the basis of a review of the past twelve years it
seems clear that the primary sources of cyclical move
ments in local manufacturing employment are to be
found in the durables sector, with a major part of
the cyclical variation associated with employment
shifts in the iron and steel, machinery, and transporta
tion equipment industries.

1 In 1 9 5 8 Jefferson County, M issouri, was added to the St. Louis
Standard M etropolitan Statistical A rea. A com parison of total
payroll em ploym ent in 1 9 5 8 in the St. Louis A rea including Je ffe r
son County with the total exclud in g Jefferson C ounty indicates that
the change resulted in an increase of about 1 3 .6 thousand w orkers.
C om parisons of em ploym ent statistics prio r to 1 9 5 8 w ith those
of subsequent years will tend to understate declines and overstate
increases, but in the periods discussed in this article the m agnitude
of these biases is slight.

C h a n gin g T rends o f Em ploym ent
During the past twelve years there has been a
marked shift in the job structure of the manufactur( Continued on Page 10)

CHART

Manufacturing Employment-St. Louis Metropolitan Area
T h o u sa n d s of P e rson s

1950

1951

S o u rc e : M is s o u r i D iv isio n

T h o u s a n d s of P e rso n s

S e a s o n a lly A d ju ste d

320

1952

1953

1954

1955

1956

1957

320

1958

1959

1960

1961

1962

of E m p lo y m e n t S e c u r ity

’ Revision in sam ple. Jefferson C ounty , M isso u ri, a d d e d to St. Louis S t a n d a rd M e tro p o lita n Statistical A re a.
L a te st d a t a

p lo t te d : O c t o b e r

Page 7

PAYROLL EMPLOYMENT IN NONFARM ESTABLISHMENTS-1950-1962*
St. Louis Metropolitan Area
(in thousands)

Total________

____________________M anufacturing___________________
Total

Unadj.
Jan. 1950

Feb.
Mar.
Apr.
M ay
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan . 1951

Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan. 1952

Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan. 1953

Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan. 1954

Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan. 1955

Feb.
Mar.
Apr.
M ay
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
n.a.
*

Seas.

Adj.

Unadj.

Durables
Seas.

Adj.

N o n -M fg.

Non-Durables

Unadj.

Seas. Adj.

Unadj.

Seas. Adj.

Unadj.

n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.

245.9
247.2
250.6
253.0
254.8
257.1
260.8
267.0
270.3
273.3
271.3
273.5

247.1
247.7
249.9
252.0
254.8
257.1
262.1
265.1
269.0
273.6
272.9
274.0

119.2
120.5
123.4
125.8
128.8
131.1
132.1
135.9
139.4
141.3
140.7
143.2

120.2
121.0
123.0
125.1
128.0
130.2
133.7
136.0
138.8
140.7
141.5
142.9

126.7
126.7
127.2
127.2
126.0
126.0
128.7
131.1
130.9
132.0
130.6
130.8

127.0
126.7
126.8
126.9
126.8
126.9
128.4
129.1
130.1
132.8
131.4
131.1

n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.

275.1
276.3
277.1
277.4
276.3
277.5
274.9
277.1
274.9
269.7
270.8
272.7

276.5
276.6
276.3
276.0
276.3
277.2
276.6
275.2
273.5
270.2
272.2
273.2

143.6
144.8
145.3
145.8
145.9
147.1
144.2
145.3
145.1
145.2
144.6
145.7

144.6
145.1
144.7
144.8
145.2
146.1
146.2
145.4
144.5
144.8
145.3
145.6

131.5
131.5
131.8
131.6
130.4
130.4
130.7
131.8
129.8
124.5
126.2
127.0

131.9
131.5
131.6
131.2
131.1
131.1
130.3
129.7
129.0
125.5
126.8
127.7

n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.

272.0
273.3
275.5
277.7
277.2
279.1
272.7
283.1
287.5
290.1
292.2
294.6

273.1
273.6
274.4
276.3
277.5
278.8
274.9
281.4
285.8
290.7
293.1
294.9

145.0
146.4
148.2
150.4
151.8
152.8
145.7
154.7
159.1
161.7
163.9
166.2

145.7
146.4
147.5
149.1
151.3
151.9
148.2
154.9
158.3
162.0
164.4
166.0

127.0
126.9
127.3
127.3
125.4
126.3
127.0
128.4
128.4
128.4
128.3
128.4

127.4
127.2
126.9
127.3
126.1
126.9
126.7
126.6
127.5
128.7
128.7
128.9

n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.

294.0
298.3
302.0
303.5
301.9
302.5
300.3
304.4
302.4
296.6
287.2
286.9

294.9
298.0
300.5
302.0
302.8
302.8
303.0
302.6
300.6
297.8
287.5
286.6

167.2
170.9
173.7
176.0
175.1
174.8
172.8
175.7
175.1
169.8
162.0
162.8

167.5
170.2
172.7
174.4
174.9
174.5
176.1
175.9
174.2
171.2
162.0
162.3

126.8
127.4
128.3
127.5
126.8
127.7
127.5
128.7
127.3
126.8
125.2
124.1

127.4
127.8
127.8
127.6
127.9
128.4
126.9
126.7
126.4
126.6
125.5
124.3

n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.

713.1
707.4
705.0
703.0
698.1
698.5
694.5
694.1
693.7
691.7
698.3
714.2

719.6
716.0
710.7
705.1
700.9
696.4
694.5
693.4
691.6
692.4
694.8
698.1

285.1
280.6
276.1
271.5
265.1
262.8
259.9
259.9
257.8
254.2
260.3
262.2

285.4
279.8
274.7
270.7
266.4
263.6
262.0
258.6
256.8
255.7
260.0
261.4

160.7
156.8
152.4
149.6
145.7
143.8
139.4
139.6
139.0
135.6
141.8
143.8

160.5
155.7
151.3
148.4
146.0
143.8
142.0
139.9
138.7
137.4
141.2
143.1

124.4
123.8
123.7
121.9
119.4
119.0
120.5
120.3
118.8
118.6
118.5
118.4

124.8
124.1
123.4
122.3
120.4
119.8
120.0
118.7
118.1
118.3
118.8
118.3

428.0
426.8
428.9
431.5
433.0
435.7
434.6
434.2
435.9
437.5
438.0
452.0

434.2
436.2
436.0
434.4
434.5
432.8
432.5
434.8
434.9
436.7
434.8
436.7

691.0
694.4
701.6
709.3
712.6
720.9
720.3
725.8
730.3
730.0
733.8
746.0

698.7
703.5
706.5
712.1
714.7
718.0
719.6
725.1
727.4
729.3
730.1
730.7

263.1
267.2
269.1
269.1
270.0
272.0
270.9
275.8
277.2
274.0
275.9
276.7

262.8
266.1
267.5
269.4
271.9
273.1
272.5
275.0
276.4
275.7
275.3
275.6

144.6
148.6
150.2
150.4
151.0
152.9
150.1
154.5
156.0
153.9
157.3
156.1

144.3
147.3
148.9
149.8
151.9
153.2
152.5
154.8
155.8
155.8
156.2
155.2

118.5
118.6
118.9
118.7
119.0
119.1
120.8
121.3
121.2
120.1
118.6
120.6

118.5
118.9
118.6
119.6
120.0
119.9
120.0
120.2
120.5
119.9
119.1
120.4

427.9
427.2
432.5
440.2
442.6
448.9
449.4
450.0
453.1
456.0
457.9
469.3

435.8
437.4
439.1
442.8
442.8
444.9
447.0
450.1
451.0
453.6
454.8
455.1

Not avuiluule
Jefferson County, Missouri, added to St. Louis Standard Metropolitan Statistical Area in 1958.

Seas. Adj.

Total

M anufacturing
Total

Durables

N o n -M fg.
Non-Durables

Unadj.

Seas. Adj.

Unadj.

Jan. 1 95 6
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

719.6
717.2
724.1
726.0
726.3
731.9
730.2
728.1
731.9
731.1
733.4
747.4

727.6
726.6
729.2
729.6
728.5
728.3
728.7
727.4
727.5
728.9
729.8
733.5

274.6
274.3
274.7
272.7
268.5
269.3
271.5
272.9
272.0
272.4
274.7
276.3

274.1
273.2
273.1
273.8
271.2
270.4
272.3
272.4
271.5
273.8
274.2
274.4

154.0
154.4
155.0
154.7
150.7
151.6
152.3
153.9
153.9
154.9
157.3
158.6

153.7
153.3
153.5
154.7
152.2
151.9
153.7
154.1
153.9
156.1
156.2
157.8

120.6
119.9
119.7
118.0
117.8
117.7
119.2
119.0
118.1
117.5
117.4
117.7

120.4
119.9
119.6
119.1
119.0
118.5
118.6
118.3
117.6
117.6
117.9
116.6

445.0
442.9
449.4
453.3
457.8
462.6
458.7
455.2
459.9
458.7
458.7
471.1

453.6
453.4
456.1
455.9
457.3
457.9
456.4
455.0
456.1
455.1
455.6
459.1

Jan. 195 7
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

719.7
722.0
726.6
723.6
725.4
730.8
729.0
725.9
730.0
727.4
725.2
722.6

727.7
732.3
731.7
727.2
727.6
726.4
726.1
724.5
724.9
723.8
722.3
711.9

276.0
276.5
277.4
272.4
272.8
275.1
274.4
273.0
273.4
271.0
270.5
267.1

275.2
275.7
276.0
274.3
275.6
275.7
274.4
272.5
272.6
271.8
270.5
265.2

158.6
159.3
160.0
156.5
156.5
158.2
157.6
156.5
157.0
154.6
154.3
150.9

158.3
158.7
158.6
157.1
158.2
158.0
157.9
156.3
156.7
155.1
154.0
150.9

117.4
117.2
117.4
115.9
116.3
116.9
116.8
116.5
116.4
116.4
116.2
116.2

116.9
117.0
117.4
117.2
117.3
117.6
116.5
116.1
115.9
116.8
116.5
114.3

443.7
445.5
449.2
451.2
452.6
455.7
454.6
452.9
456.6
456.4
454.7
455.5

452.5
456.6
455.7
452.9
452.0
450.8
451.7
452.0
452.3
452.0
451.8
446.7

Jan. 1958
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

714.1
703.5
703.6
704.6
704.9
712.5
713.2
713.3
716.9
709.8
715.1
731.1

720.6
714.2
710.0
708.1
707.0
708.3
709.7
711.9
711.9
706.3
713.0
721.7

265.7
262.6
261.1
253.9
250.7
253.1
255.0
255.5
255.6
249.6
255.6
262.9

265.0
262.1
260.3
256.0
253.2
253.4
254.2
255.0
254.6
250.1
256.4
260.6

148.6
147.1
146.3
142.0
140.5
143.6
143.7
143.1
142.2
137.1
143.7
150.2

148.3
147.2
145.3
142.7
141.9
142.9
143.1
142.7
141.8
137.1
144.3
150.8

117.1
115.5
114.8
111.9
110.2
109.5
111.3
112.4
113.4
112.5
111.9
112.7

116.6
114.8
115.0
113.2
111.3
110.5
111.1
112.3
112.8
113.0
112.1
109.8

448.4
440.9
442.5
450.7
454.2
459.4
458.2
457.8
461.3
460.2
459.5
468.2

455.7
452.1
449.7
452.2
453.8
454.9
455.4
456.9
457.3
456.2
456.6
461.2

Jan. 1 95 9
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

709.4
704.8
716.5
724.8
728.2
734.7
733.5
730.0
731.9
731.1
725.9
731.9

715.8
716.3
724.5
727.7
729.7
728.9
729.1
728.5
726.8
726.7
724.5
723.2

260.4
257.4
263.3
263.9
266.4
267.7
267.9
266.6
267.6
266.1
261.7
259.8

259.6
257.4
263.3
266.3
268.0
267.2
266.8
266.3
266.5
265.8
262.8
258.0

148.1
147.6
151.1
152.7
153.2
155.2
154.4
154.4
156.8
155.4
149.7
147.5

148.0
148.6
150.5
153.6
154.0
153.8
153.5
154.2
156.2
154.6
150.6
148.4

112.3
109.8
112.2
111.2
113.2
112.5
113.5
112.2
110.8
110.7
112.0
112.3

111.7
108.8
112.8
112.7
114.0
113.4
113.4
112.1
110.4
111.2
112.1
109.6

449.0
447.4
453.2
460.9
461.8
467.0
465.6
463.4
464.3
465.0
464.2
472.1

456.2
458.9
461.2
461.4
461.7
461.7
462.3
462.2
460.3
460.9
461.7
465.2

Jan. 196 0
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

727.2
726.9
719.7
733.4
732.7
738.8
734.7
732.5
732.7
731.9
727.0
732.2

734.5
738.7
729.2
737.1
734.2
732.9
730.3
731.0
728.3
726.8
724.8
722.8

268.0
269.0
267.4
265.4
264.5
265.1
264.8
262.9
260.6
259.4
256.6
253.9

267.5
269.5
268.2
268.1
265.6
264.0
263.5
262.9
260.1
258.4
257.1
252.1

156.5
157.9
157.3
155.4
154.9
155.1
153.6
151.6
150.8
149.7
147.9
145.4

156.7
159.7
157.3
156.7
155.2
153.4
152.4
151.8
150.5
148.5
148.3
146.0

111.5
111.1
110.1
110.0
109.6
110.0
111.2
111.3
109.8
109.7
108.7
108.5

110.8
109.9
110.9
111.4
110.4
110.6
111.1
111.1
109.6
109.9
108.8
106.1

459.2
457.9
452.3
468.0
468.2
473.7
469.9
469.6
472.1
472.5
470.4
478.3

467.1
469.2
461.0
469.0
468.6
468.9
466.8
468.1
468.3
468.4
467.7
470.7

Jan. 1961
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

705.8
698.3
703.5
703.7
709.0
716.0
713.0
707.9
715.3
717.6
715.8
722.3

714.4
710.4
712.8
707.9
709.7
709.6
709.5
707.2
710.3
711.9
712.9
712.3

248.1
246.1
246.0
243.2
247.3
248.9
247.8
242.5
246.2
249.5
249.0
248.7

248.1
247.6
247.5
246.2
247.5
247.4
246.3
242.7
246.0
247.8
248.8
247.2

141.0
139.6
139.7
137.6
140.6
142.8
141.7
135.8
140.1
143.4
142.7
142.3

141.9
141.4
140.1
139.3
140.5
140.7
140.3
136.5
140.0
141.7
142.4
142.4

107.1
106.5
106.3
105.6
106.7
106.1
106.1
106.7
106.1
106.1
106.3
106.4

106.2
106.1
107.4
106.9
107.1
106.7
106.0
106.3
106.0
106.1
106.3
104.8

457.7
452.2
457.5
460.5
461.7
467.1
465.2
465.4
469.1
468.1
466.8
473.6

466.3
462.8
465.3
461.8
462.2
462.2
463.1
464.5
464.4
464.1
464.2
465.1

Jan. 1962
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

696.2
700.6
702.6
707.9
717.0
725.9
722.4
721.4
725.1
723.1

705.4
712.7
711.9
712.2
717.0
718.3
718.8
720.7
719.3
716.7

245.7
246.8
247.5
246.3
249.4
252.3
251.7
250.5
252.3
251.7

245.9
248.8
249.2
149.2
249.2
250.5
250.0
250.8
252.0
249.5

140.7
141.7
142.1
141.4
144.1
146.2
145.9
144.5
148.9
149.2

141.8
143.7
142.7
143.4
143.7
143.8
144.3
145.5
148.8
147.1

105.0
105.1
105.4
104.9
105.3
106.1
105.8
106.0
103.4
102.5

104.1
105.1
106.5
105.8
105.5
106.7
105.7
105.3
103.2
102.4

450.5
453.8
455.1
461.5
467.6
473.6
470.7
470.9
472.8
471.4

459.5
463.9
462.7
463.0
467.8
467.8
468.8
469.9
467.3
467.2

Unadj.

Seas.

Adj.

Unadj.

Seas.

Adj.

Unadj.

Source: M issouri Division of Employment Security. Seasonal Adjustments by Federal Reserve Bank of St. Louis.

Seas. Adj.

mg sector of the St. Louis labor market.2 In 1950
manufacturing employment totaled 260 thousand.
From early 1950 to mid-1953 (the peak of the 19491953 expansion in national business activity) employ
ment in manufacturing firms rose markedly, reaching
a total of 303 thousand in July 1953 (see Chart 2).
In large part this 1950-53 increase reflected an
expansion in productive activity associated with the
Korean War. Employment in ordnance rose from
less than 3 thousand workers in 1950 to about 16
thousand in 1953. Since that time, except for cyclical
upswings, manufacturing employment has trended
downward. In 1962 the number of workers employed
in manufacturing firms stood at 250 thousand (an
average of the first ten months), a decline of 16 per
cent from the 1953 level and a decline of 4 per cent
from the 1950 level. In comparison, manufacturing em
ployment in the nation has declined 4.5 per cent since
1953 but has increased 10 per cent on balance since
1950. Manufacturing as a per cent of total payroll
employment declined from 38 per cent in 1954, the
first year for which these data are available on a
monthly basis, to 34.9 per cent in 1962. Accordingly,
nonmanufacturing employment as a proportion of
total payroll employment increased from 62 per cent
in 1954 to 65.1 per cent in 1962.
The decline in manufacturing employment, both
in relative and absolute terms, has reflected a sharp
drop in the nondurables area which more than offset
moderately rising employment in the durable goods
sector. As Table II shows, employment in nondur
ables manufacturing declined from about 129 thous
and workers in 1950 to 105 thousand in 1962, an 18
per cent decrease. Over this same period nondurables
employment in the nation increased 2.4 per cent. In
1950 employment in St. Louis Area firms producing
nondurable goods nearly equaled that in durables,
constituting 49.4 per cent of the total. In 1962 non
durables manufacturing constituted only 42 per cent
of total payroll employment.
The declines in employment in the nondurables
area proceeded at a steady pace throughout the 19501962 period (see Chart 2 ), averaging a 1.5 per cent
decline per year or a total decline of 24 thousand jobs.
As shown in Table II, the declines centered in the
food, beverage, and clothing industries. From 1950 to
1962 there was a 37 per cent cutback in the meat prod
ucts industry which resulted in a loss of more than 4
thousand jobs. During this period there was a loss of
2 Because Jefferson County, M issouri, was added to the St. Louis
Standard M etrop olitan Statistical A rea in 1 9 5 8 the changes in em
ploym ent from 1 9 5 0 to 1 9 6 2 will tend to understate declines and
overstate increases. See footnote 1.

Page 10

TABLE M

Changes in Employment 1950-1962 in
Nondurable Manufactures
C h a n g e D u r in g the P e rio d
N u m b e r of
J o b s (th o u s a n d s )

1 9 50

1962*

M e a t P r o d u c t s ......................

11.8

7.4

—

4.4

— 37.3

B e ve rage

11.0

8.3

—

2.7

— 24 .6

T e xtile
O th e r

In d u s trie s

M ills ,

............

A p p are l

F in ish e d

P erC en t

and

T e x t i le . . .

24.7

14.2

— 10.5

— 4 2 .5

Leathe r a n d Leathe r P rod u cts

17.9

10.6

—

7.3

— 40 .8

A ll O t h e r N o n d u r a b le s

63.3

64 .5

1.3

128.7

105.0

....

— 23.6

2.1

— 18.4

* A v e r a g e o f first ten m on th s

10.5 thousand jobs in textiles and apparel and a
decline of 7 thousand jobs in leather and leather prod
ucts. These declines reflected a movement of pro
duction operations in the meat products, apparel and
shoe industries away from the St. Louis Area.
Employment in nonmanufacturing has grown mod
erately since 1954, the first year for which comparable
data are available (see Chart 3 ). There were 435
thousand persons employed in nonmanufacturing
firms in 1954. In the following eight years 31 thous
and additional jobs were created, an increase of 7
per cent compared with an 18 per cent increase in
the nation. The most rapid increases in nonmanu
facturing payroll employment occurred between 1954
and 1956 when more than 21 thousand jobs were
added. This increase resulted from marked expansion
in employment in retail trade establishments and
services coupled with moderate increases in most
other nonmanufacturing areas.
Total payroll employment of nonfarm establish
ments has increased only slightly on balance since
1954, rising from 701 thousand to 715 thousand in the
first ten months of 1962. This represents an increase
of 2.0 per cent, or less than a 0.3 annual rate of in
crease. In the nation, payroll employment has in
creased 13 per cent since 1954, or at an annual rate
of 1.6 per cent. The absence of growth in payroll
employment during the past eight years in the St.
Louis area reflects the fact that increases in non
manufacturing were nearly offset by declining pay
rolls in manufacturing.
The total employment series has been available on
a comparable basis only since I960.3 During this
three-year period total employment has edged down3 T hese data are included in "S elected Econ om ic In d icators,” a
m onthly release of the Federal R eserve Bank of St. Louis. T his
report is available w ithout charge. Requests should be directed to
the R esearch D ep artm en t.

ward. The decline during the
period from mid-1960 to early
1961 may have been associ
ated with the downturn in
national business. Since early
1961 total employment has
shown only nominal improve
ment. Total employment in
the nation has increased about
2.5 per cent since the begin
ning of 1960, with most of
the increase occurring since
mid-1961.

Conclusions

CHART 3

Employment in Nonfarm Establishments-St. Louis Metropolitan Area
T h o u sa n d s of P e rso n s
480

Iii-fa--N
o
n
m
a
n
u
i§
m cturlng^Y
M il
!
1
i
M
anufactoring
f
\,
*1E
%
_I E
Bp
1
S e a s o n a lly A d ju ste d

T h o u sa n d s of P e rso n s
480

The structure of the St.
Louis job market is similar
to that in other large Mid
1962
1954
1955
1956
1957
1958
1959
1960
1961
western cities. There is a fair
S o u r c e : M i s s o u r i D i v is io n o f E m p lo y m e n t S e c u r it y
‘ Revision in sample. Jefferson County, Missouri, added to St. Louis Stan d ard M etropolitan Statistical Area
ly high concentration of em
L a te st d a t a p lo t te d : O c t o b e r
ployment in manufacturing,
notably in the durable goods
these increases have been more than offset by steady
area. The number of persons employed in the St. Louis
work force varies closely with changes in national
declines in the nondurables area. The major declines
business activity. Most of the cyclical shifts in em
have occurred in the meat products, textiles, and
ployment have occurred in the durables manufactur
leather products industries. The number employed in
ing area.
the nonmanufacturing sector increased from 1954 to
After rising sharply from 1950 to 1953, the number
of workers employed by manufacturing firms declined
16 per cent from 1953 to 1962. Although there have
been gains in employment in durables manufacturing,

1962. Rising employment in this sector has about
offset the decreases in manufacturing employment.
As a result, total nonfarm payroll employment has
been virtually unchanged since 1954.

L ittle C hange in Business A c tiv ity
( Continued from Page 4)
gish economic expansion which has yielded tax re
ceipts lower than anticipated.
Despite the cash deficit being incurred in fiscal
year 1963, Treasury deposits at commercial banks
have been rising sharply in the last several months.
Treasury deposits in Tax and Loan Accounts in
creased from an average of around $4.8 billion in the
fourth quarter of 1961 to about $6 billion in the third
quarter of 1962. This increase has taken place large
ly since April, during the time of year when Treasury
balances normally decline as tax receipts decline.
Treasury debt management in recent months may
have helped to maintain short-term interest rates in
this country and thereby to mitigate the outward

movement of short-term funds. Short-term capital
movements from the U. S. in response to interest rate
differentials are one of the threats to the balance-ofpayments position of this country. At a time when
domestic credit demands have not been strong, the
Treasury has been selling securities, especially in
the short-term area, in larger amounts than needed to
cover its operating deficit. This may have been a
factor in the firming of short-term interest rates in
early November. In addition, marketable U. S. Gov
ernment securities maturing within one year in the
hands of the nonbank public have been increasing as
Treasury balances have expanded this year. During
the fourth quarter of 1961 such securities averaged
around $41 billion, but by the autumn months of this
year they averaged about $50 billion.
Page 11

u t l o o k

f o r

F a r m

i n g

i n

1 9 6 3

The outlook for agriculture in 1963 was presented by representatives of the United
States Department of Agriculture at the Annual National Agricultural Outlook Con
ference in N ovember 1962. A summary of the forecast of developments for the coming
year as presented at the conference follows.

ET FARM INCOME in 1963 will not change signifi
cantly from the $12.8 billion 1962 level. Gross income
will continue upward from the $40.3 billion level of 1962,
but the gains may be offset by rising costs. Cash receipts
from farm commodity sales may be about the same as in
1962. Government payments to farmers, primarily under
the feed grain and wheat programs, will be about $400
million higher, pushing total gross income upward. With
a continued decline in number of farms, operators' real
ized net income per farm should show a further gain.
Domestic demand for farm products will increase at
about the population growth rate of 1.5 per cent. Ex
ports may be maintained at the high levels of 1961-62.
Supplies of farm commodities will be up somewhat from
levels of the 1961-62 marketing year and prices received
by farmers may average slightly lower.
This general outlook for agriculture is predicated upon
no substantial change developing in international rela
tions. An increase in international tensions probably would
result in higher prices for many farm products and a tem
porary rise in net farm income. As prices return to normal,
however, after tensions ease, lagging costs will result in
lower profit margins.
The outlook for agriculture in the Eighth District is
about the same as that for the nation. The impact of
lower prices for most livestock marketings by district
farmers should offset an expected increase in volume. No
significant change is anticipated in prices and output of
major crops in the district.

INCOME
OF F A R M
OPERATORS

National Prospects
Farm Income
Net farm income1 in 1963 may continue at about the
1961 and 1962 levels of $12.8 billion, the highest level
reached since 1953. Gross income to operators has gen
erally trended upward for the past five years, but in 1962
increased expenses about offset the gains with no change
in net. Similar trends are projected for 1963.
Little change in cash receipts from 1962 levels is antic
ipated. The volume of crops marketed may be maintained
at about 1962 levels with little change in average prices
received. The volume of livestock and livestock products
marketed should be up and prices slightly lower. Gross
receipts from livestock and products, however, probably
will equal 1962 levels.
Government payments to farmers in 1963 may total
slightly more than in 1962, .accounting for most of the
gain in gross farm income. Government payments to farm
ers in 1962 were about $400 million more than in 1961
and further increases of about $400 million are looked for
in 1963 under the feed grain and wheat programs. Corn
producers diverting 20 per cent or more of their base
acreage will again receive payments for diverted acres.
In addition, they will receive an 18 cents per bushel pay
ment for “normal” output on the acres planted. Instead
of the price support loan of $1.20 per bushel as in the
past two years, however, the 1963 program provides for
a corn loan of only $1.02 per bushel. Wheat producers
also will be eligible for payment at the rate of 18 cents per
bushel for “normal” production on acres planted to wheat.
Payments to farmers under other Government programs,
such as the Soil Bank, Agricultural Conservation, and the
Sugar and Wool Acts, are not expected to show much
change from 1962 levels.
Farm production expenses will continue upward in
1963 but probably at a slower rate than in 1962. In the
first 9 months of 1962 farm expenses rose about $600
million from the same months a year earlier.
Higher prices of farm machinery are indicated, contin
uing the rising trend which began in the early forties,
but the increase in 1963 may be at a reduced rate. Prices

1935

1940

1945

1950

1955

1960

1965

^EXCLUDING INVENTORY CHANGE/ INCLUDING GOVERNMENT PAYMENTS

U S D A
U. S. DEPARTMENT OF AGRICULTURE

Page 12

P H O T O

1 Realized gross incom e to operators less production expenses.
No allowance is made in expenses for a return on owners' cap
ital or operators7 labor and management.

of building and fencing materials have held steady for
the past four years and probably will not change signifi
cantly. Fertilizer and feed grain prices have not increased
above the 1957-59 average and no substantial change is
anticipated during the coming year. Tax levies on farm
property were up in 1962 and may rise further in 1963.
Interest rates on farm loans were generally stable in 1962
and are expected to remain about unchanged in 1963.
Total interest costs, however, will be up with the increase
in outstanding debt. The total hired labor bill may not
increase, as a decline in number of hired workers may off
set the wage increases. Wage rates, which have risen
substantially, likely will continue to rise in 1963.

cent per year for the past 12 years. This general down
ward trend probably will continue in 1963.
The foregoing data represent only income per farm
worker from farming. Both farm operators and other
farm workers receive income from nonfarm sources, which
totals about 50 per cent of their income from farming.

Demand for Farm Products
Demand for farm products in 1963 will continue up
ward. Domestic demand should expand by about 1.5 per
cent, mainly as a result of population growth. This rise

Trends in Food Consumption - Per Capita Use*
Income Per Farm and Per Farm Worker

O F 1950

Operators’ realized net income per farm should con
tinue upward, reflecting a further decline in number of
farms in 1963 and stable total income. Net income per
farm, which averaged $3,360 in 1961, is estimated at
$3,471 in 1962 and may rise to about $3,600 in 1963.2
Net income per farm reached a post-World War II
low of $2,334 in 1950. It rose during the Korean conflict
but declined after the armistice, reaching a low point of
$2,465 in 1955 when the current upward trend began.
The gains in realized net per farm reflect primarily the
reduction in number of farms, as total realized net income
has not changed significantly over the period.
Average annual farm income per worker (family work
ers plus hired labor) in 1963 will continue its general up
ward trend of the past 12 years. Farm income per worker
Num ber of Farm W orkers and Income per W orker
1940-1962
M i ll io n s o f W o r k e r s

D o ll a r s

So u rce : U.S. D e p a r tm e n t o f A g r ic u lt u r e
Latest d a t a plotted : 1 9 6 2 e s tim a t e d

in 1961 was computed at $2,268 and, on the basis of pre
liminary farm employment and income estimates, will av
erage about $2,340 in 1962. A further gain is projected
for 1963. The income-per-worker rise resulted from rela
tively little change in aggregate net farm income and
a consistent decline in number of workers. Employment
in agriculture has declined steadily since the early 1920's,
but the downtrend has been more pronounced since
1950. Such employment declined from 13.4 million in
1920 to 9.9 million in 1950, an average annual rate of
less than one per cent. The 6.8 million farm workers in
1962, however, represent a decline of more than 2 per
- Computed on the basis of estimated realized net farm income
for the nation and the trend in number of farms.

1950

'60

1950

'55

'60

'65

♦civilian o n l y .

U S D A PHOTO
U
.S. D
EP
A
R
T
M
EN
TO
FA
G
R
IC
U
LT
U
R
E

in the domestic demand for farm products also assumes a
modest gain in general business activity and consumer
incomes. Exports may not change substantially from the
$5.1 billion level of 1961-62. Continued economic growth
in the more industrial nations of the world and record
holdings of gold and dollars in many of the principal
importing countries are factors in this optimistic forecast
for exports.
Exports have generally trended upward since fiscal
1953-54, and the 1961-62 total was about 60 per cent
greater than the average for the years 1954-56 inclusive.
A substantial portion of the gain is attributed to Govern
ment programs. Public Law 480 enacted in 1954 author
ized sales for foreign currencies, donations for relief and
emergency needs, and barter in exchange for strategic
goods. Exports outside Government programs have
accounted for 60 to 70 per cent of total agricultural ex
ports annually since 1954-55. However, 20 to 40 per cent
of these commercial sales received some form of Govern
ment assistance, such as payments by cash, in kind, or by
sales from CCC stocks at less than domestic market prices.
These programs for implementing exports will be con
tinued in 1963.
Policies of the European Economic Community (Com
mon Market) may have some adverse effects on exports,
particularly of wheat flour and poultry, during the com
ing year. A system of variable import levies designed to
offset the difference between world prices of commodities
and desired prices in the Common Market was put into
effect on July 30. It remains to be seen what impact
these levies will have on United States exports to the
area, which represented more than one-fifth of total
United States farm exports in fiscal 1961-62.
Page 13

Supply of Farm Products

Farm Commodity Prices

Total output for farm products, after holding relatively
steady for three years, may be up somewhat in 1963 from
1962 levels. Quantities of crops produced may be about
unchanged, but increases in livestock products are in
prospect. Output of all commodities in 1962 is estimated
at 107 per cent of the 1957-59 average. This compares
with an output of 92 per cent a decade earlier and 82 per
cent two decades earlier.

Prices for all farm commodities in 1963 may average
slightly below 1962 levels. Farm product prices in 1962
averaged about 1 per cent higher than in 1961 and well
above 1959-61 levels. While prices for crops should re
main at about their 1962 average in the coming year,
livestock prices are expected to be down a little, resulting
in slightly lower average prices for all commodities.

The projected 1963 crop output does not differ greatly
from the reduced levels of 1962, although weather, the
impact of Government programs, and other factors will,
to a great extent, determine yields and production. Stocks
of most crops are still abundant. Government stocks at
the end of the 1961-62 marketing year, however, were
generally down from year-earlier levels, with the smaller
output of food and feed grains. Total supplies of feed
grain (production plus carryover) in 1962-63 are almost
10 per cent less than a year earlier.
Livestock production is rising and should be up again
in 1963 from the record level of 1962. Meat production
may total 163.5 pounds per person, or about a pound
more than in 1962. Cattle and hog slaughter may each
total about 3 per cent more. Broiler production will also
be up, providing substantially more than the 25.9 pounds
per person consumed in 1962. Small reductions are
indicated for veal, lamb, and mutton.
Quantities of dairy products and eggs will rise in 1963,
although the increases in output probably will be less than
the rate of population growth. Milk production may total
127.5 billion pounds, or 1 billion above 1962 output, and
Government stocks are expected to increase sharply. Egg
production may exceed slightly the 175 million cases
estimated for 1962.

P ro sp e c ts

fo r

M a jo r

Major Eighth District Commodities
Cattle—Commercial cattle slaughter for the nation in
1963 is estimated at about 27 million head, up 3 to 4 per
cent from the 1962 level. Beef production may increase
similarly. The number of cattle on feed on January 1,
1963 may be 7 to 8 per cent greater than at the beginning of 1962, and carryover of cattle on feed from October

Prices of most major livestock products, with the excep
tion of dairy products, are not supported and reflect supply
and demand conditions in the market. The larger per
capita supplies of beef and pork in 1963 probably will be
marketed at average prices slightly lower than in 1962.
Reduced supplies should result in slightly higher prices
for lambs. Support prices for dairy products may average
somewhat lower in 1963, especially in the first half of
the year. Lower egg prices also may result from a small
increase in output and declining consumer demand. A
greater output of broilers may bring lower average prices.

E ig h th

The general outlook for agriculture in the Eighth Federal
Reserve District in 1963 is similar to that for the nation, on
the basis of the outlook for specific commodities. Realized
net income to farmers in the area should remain at about
1962 levels. The district has a wide diversity of farm commodities and no major changes are anticipated in returns
from any one commodity. Cotton sales amount to 22.0 per
cent of total marketings, cattle sales 18.4 per cent, and
soybeans and hog sales 12.0 and 11.5 per cent, respectively. Other products of major importance include: milk,
corn, tobacco, broilers, wheat, eggs, and rice. The prospects for these specific commodities, as reported in the
Outlook Conference, follow.

Page 14

Prices of most crops will be supported by Government
programs at near 1962 levels when special payments are
included. With the Government taking the surplus at
support prices, prices received by farmers will remain
relatively stable. Corn prices for those who participate
in the special conservation program will be supported at
$1.02 per bushel plus an 18 cent per bushel payment-inkind on “normal” production. Wheat producers who stay
within their allotments will be eligible for loans at $1.82
per bushel and those who participate in the diversion pro
gram will receive an 18 cent per bushel payment-in-kind
similar to that for corn. Programs like the one for corn
are available for grain sorghum and barley producers.
Tobacco price supports about 1 per cent higher than in
1962 are indicated on the basis of current supplies. Sup
port prices for the 1963 cotton crop have not been an
nounced.

D is tr ic t

C o m m o d itie s

Major Farm Products Marketed in Eighth
Federal Reserve District1
Per Cent of T?tal
Livesto ck

District Marketings

C a t t le ........................ .................. ......... 1

1 5

°^°

.............................................
Broilers

....................................... .........3.6

E g g s ......................................................2.3
O t h e r ........................................... .........2.2
4 5 .4 %

------e0*!?"
.................................................ioa ^°
Soybeans .................................... .........12.0
Corn ...........................................
Tobacco ......................................
W heat
........................................
Rice
2.2
Other

6.1
4.0
3.5
4.8

5 4 .6 %

1 0 0 .0 %

total

i Calculated from 1959 Census of Agriculture data.

These relationships

Large quantities of crops are consumed

1, 1962 to January 1 may be 15 to 17 per cent greater
than a year earlier. Numbers placed on feed in the
fourth quarter of 1962 probably will exceed those of the
fourth quarter last year, contributing to the large January
1 inventory.

Cattle Numbers and Beef Production

below 1962 levels. An uptrend in broiler production was
underway in the fourth quarter of 1962, and turkey grow
ers indicated plans to keep more breeder hens than a year
earlier.
Egg production for the entire year of 1963 may be up
slightly and average prices slightly lower. During the
early months of the year, however, reduced supplies are
indicated, and egg prices may average a little higher than
in the second half of the year. Per capita consumption of
eggs generally has declined since 1952.
Cotton—The 1962 cotton crop of 14.6 million bales ex
ceeded the 1961 crop by 2 per cent. Disappearance in
the 1962-63 marketing year is expected to be the smallest
since 1958. The smaller disappearance is attributed to a
decline in domestic mill consumption. Exports may total
about 5.0 million bales, the same as in 1961-62. Because
of the larger crop and anticipated smaller disappearance,
carryover at the end of the year probably will total around
9.0 million bales, the highest since 1957 but well below
the record 14.5 million bales in 1956.

* C
A
TTLE A
M
DCALVES O
NFAKMS JAM. 1.

The buildup in total cattle numbers, which began in
1958, probably will continue through 1963. The calf crop
and imports in 1962 will exceed slaughter and death
losses by about 2.5 million head. The calf crop was about
40.5 million head, and imports totaled 900 thousand head.
Cattle and calf slaughter was only about 35.8 million
head for the year. Cattle and calf numbers in the nation
on January 1, 1963 are projected at a record 102 million
head. This compares with 99.5 million a year earlier and
91.2 million in 1958 when the current upswing began.
Fed cattle prices may average slightly below 1962
levels in view of the outlook for a substantial increase in
beef supplies. Demand for beef has been rising in recent
years and should partially offset the impact on prices of
larger supplies. Average prices for beef cattle in 1962
were about the same as in 1958, although beef supplies
were 18 per cent greater. This upward trend in demand
is expected to continue in 1963 and average prices may be
only slightly below 1962 levels.
Hogs—Indicated fall and spring pig farrowings point to
a larger hog slaughter in 1963, and prices may average a
little lower than in 1962. The 1962 fall pig crop is esti
mated at 2 to 3 per cent larger than in 1961 and plans to
increase 1963 spring farrowings are reported. Feed grain
prices, however, are favorable for hog producers, and
profits may be only slightly less than in 1961 and 1962.
Dairy Products—Gross returns to farmers from market
ings of milk and cream in 1963 are likely to be some
what less than in 1962. The number of milk cows on
farms points to milk production of about 127.5 billion
pounds, 1 billion more than in 1962 and considerably
above estimated consumption. Per capita consumption of
milk in all forms has generally declined since 1955. Stocks
of dairy products held by the Commodity Credit Corpora
tion, which are already substantial, are expected to rise
further, provided no change is made in the Government
dairy program.
Poultry and Eggs—A large expansion in poultry output
is projected for 1963 and prices probably will average

Price supports, which determine, in large part, prices
received by farmers, have not been announced for the
1963 crop. The support price for the 1962 crop was 31.88
cents, the same as in 1961.
Soybeans—Soybean supplies in the 1962-63 marketing
season of 730 million bushels are more than 4 per cent
above levels of the previous year. Larger beginning stocks
on October 1, 1962 more than offset a 3.5 per cent de
cline in production. Demand for soybeans, both domestic
use and exports, has been rising consistently in recent
years, and carryover into 1963-64 may not exceed the 60
million bushels carried over into the 1962-63 marketing
year. Soybean crushings in 1962-63 are forecast at a
record 450 million bushels, up three per cent from the
previous year's level, and exports may total 175 million
bushels, an increase of about 12 per cent.
Other major oil and fat supplies, which compete with
soybean oil, are up only a small per cent from 1961-62
levels. Lard supplies will remain about the same, and
cottonseed and flaxseed oil supplies will be somewhat
higher.
The rising demand for high-protein feed points to slight
ly higher prices for soybean meal in 1962-63, despite the
outlook for larger supplies.
Feed Grains—Reduced supplies of feed grains for 196263 (7 per cent less than in 1961 and 9 per cent below the
record high of two years ago) are in prospect as a result
of a reduction in feed grain acreage. Such acreage in
1962 was down 4 per cent from that of 1961 and 18 per
cent from that harvested in 1959 and 1960, the base pe
riod for the Government Feed Grain Program. Most of
the reduction has been in corn and grain sorghums, al
though oats and barley acreages have also been reduced.
In spite of a continued increase in yields, the 1962 feed
grain crop was slightly below the 1961 crop and 11 per
cent under output in 1960. At 139 million tons, the crop
is expected to be short of domestic use and exports for the
second year in a row. As a result, carryover stocks at the
end of 1962-63 may be reduced another 14 million tons,
about the same as the reduction in 1961-62. Demand for
feed may exceed the high level of this past year, with the
Page 15

prospective increase in livestock production. Exports of
feed grains, however, are expected to be about 3 million
tons less than in 1961-62, partially offsetting the increase
in domestic consumption.
Wheat—The 1962 wheat crop of 1,095 million bushels,
together with a carryover of 1,304 million bushels last
July 1 and imports of 6 million bushels, has provided a
supply of 2,405 million bushels for the 1962-63 marketing
year. Domestic disappearance for the year is estimated at
a little over 600 million bushels, about the average for the
past six years. Exports estimated at about 600 million
bushels would be substantially below the levels of the
previous two years. Based on these estimates, a carry
over of about 1,200 million bushels is in prospect for
July 1, 1963.
The 1963 Government Wheat Program provides for the
voluntary diversion of allotted wheat acres and support
prices. Fanners participating are eligible for payments on
acres diverted and a payment of 18 cents per bushel on
the “normal” production of acres devoted to wheat. This
18 cents per bushel payment, plus the support price of
$1.82 per bushel, brings the support level to $2.00 per
bushel.
Rice—Production of rice in 1962 of 62.7 million hun
dredweight was about 20 per cent more than in 1961 and
25 per cent larger than the average for the twelve years

1950 through 1961. An expected 10 per cent rise in ex
ports in 1962-63 compared to a year earlier will more
than offset a slight decrease in domestic disappearance.
Carryover on August 1, 1963 probably will be up sharply
from the 1962 level, which was low for recent years. The
1961-62 average price received by farmers for rice is esti
mated at $5.02 per hundredweight, 31 cents above the
support rate of $4.71. Support prices for the 1963 crop
have not been announced.
Tobacco—Total supplies of burley tobacco, the major
type produced in the Eighth Federal Reserve District, are
about 2 per cent larger in 1962-63 than for 1961-62. Pro
duction in 1962 was about 4 per cent above a year earlier
and the largest in eight years. Disappearance of burley
tobacco may be about 3 per cent above that of a year
earlier. Domestic use of burley has increased for four
years in succession and, with a continued increase in
cigarette output, may gain further in 1962-63.
Some reduction in United States exports in the first
half of 1963 compared with a year earlier may result from
improved 1962 crops in several European countries. Ex
ports of burley tobacco in 1961-62 were the second high
est on record. Demand for United States tobacco is fav
ored by rising world cigarette consumption but this factor
will be offset in some degree by increasing competition
from foreign producing areas and trade restrictions of
importing countries.

REVIEW INDEX — 1 9 6 2
Month
of Issue

T itle of A rticle

Jan.

T he Economic Recovery o f 1961

Feb.

Business Expands and Bank Credit Rises
Review o f District Developments in 1961
Operations o f the Federal Reserve Bank o f St.
Louis in 1961—An Annual Report

Month
of Issue ____________ T itle of A rticle__________________________

July

Monetary Developments
District Business Activity
Budgets o f the Federal Government
Yields on Corporate Stocks
Residential Construction—M ajor District Cities

Aug.

Recent Monetary Developments
Seasonal Patterns o f Business Activity
International Comparisons
Map o f Cities in the Eighth District
Current Problems Facing the United States
Economy
Recent Developments in Government Foreign
Exchange Transaetions
Farm Income in the Eighth District
Eighth District Business Loans

March A Year o f Recovery
Recent District Banking Developments
Member Bank Reserves and the Money Supply
April

May

June

Earnings and Expenses of Eighth District
M ember Banks
D evelopments in the Structure o f Banking
Recent Growth o f Tim e Deposits
T he Business Expansion
Consumer Instalment Credit
Livestock Inventory—January 1, 1962
Check Payments—Large District Cities
Recent Financial Developments
Business Improves Moderately
District Developments
T he International Payments System
Prospective Crop Plantings— 1962
Farm Commodity Exports
Check Payments—Medium-sized District Cities
Monetary Developments
Changes in the Velocity o f Money, 1951-1962
Check Payments—Large District Cities

Page 16

Sept.

Oct.

Nov.

Dec.

Current Economic Trends
Revised Money Supply Series
Farm Capital Rose in 1961
Economic Indicators—M ajor District Cities
A Plateau in Economic Activity
Federal Reserve "Float”
A Change in Reserve Requirements
Labor Market Classifications in the Eighth
District
Federal Reserve System Actions
Little Change in Business Activity
St. Louis Area Employment, 1950-1962
Outlook fo r Farming in 1963

Full text of Review (Federal Reserve Bank of St. Louis) : December 1962

FRASER