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86th Congress, 2nd Session

1960

SUPPLEMENT TO

Economic Indicators
HISTORICAL AND DESCRIPTIVE
BACKGROUND

Prepared for the Joint Economic Committee
by the Committee Staff and the
Office of Statistical Standards, Bureau of the Budget

Printed for the use of the Joint Economic Committee

[JOINT COMMITTEE PRINT]

86th Congress, 2nd Session

1960

SUPPLEMENT TO

Economic Indicators
HISTORICAL AND DESCRIPTIVE
BACKGROUND

Prepared for the Joint Economic Committee
by the Committee Staff and the
Office of Statistical Standards, Bureau of the Budget

Printed for the use of the Joint Economic Committee
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1960
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington 25, D.C. - Price 60 cents

JOINT ECONOMIC COMMITTEE
(Created pursuant to Sec. 5(a) of Public Law 304, 79th Cong.)
PAUL H. DOUGLAS, Illinois, Chairman
WRIGHT PATMAN, Texas, Vice Chairman
SENATE

HOUSE OF REPRESENTATIVES

JOHN SPARKMAN (Alabama)
J. WILLIAM FULBRIGHT (Arkansas)
JOSEPH C. O'MAHONEY (Wyoming)
JOHN F. KENNEDY (Massachusetts)
PRESCOTT BUSH (Connecticut)
JOHN MARSHALL BUTLER (Maryland)
JACOB K. JAVITS (New York)

RICHARD BOLLING (Missouri)
HALE BOGGS (Louisiana)
HENRY S. REUSS (Wisconsin)
FRANK M. COFFIN (Maine)
THOMAS B. CURTIS (Missouri)
CLARENCE E. KILBURN (New York)
WILLIAM B. WIDNALL (New Jersey)

JOHN W. LEHMAN. Clerk and Acting Executive Director

Suggested Identification
U.S. Congress, Joint Economic Committee, 1960
Supplement to Economic Indicators,t Government

Printing Office, Washington 25, D.C., 1960.

Letters of Transmitted
DECEMBER 2,

1960.

To Members of the Joint Economic Committee:
For the information of the members of the Joint Economic Committee and others interested there is
transmitted herewith a fourth edition of the Supplement to the Committee's monthly publication Economic
Indicators, containing selected charts and historical tables of the various indicators which are published
monthly, and a description of the derivation, limitations, and uses of each indicator. These materials were
developed by the Committee staff and the Office of Statistical Standards, Bureau of the Budget, with the
cooperation of the agencies responsible for each series.
As you are undoubtedly aware, there has been continuing widespread interest in having this information
readily available. The historical and descriptive Supplement to Economic Indicators is used not only by
Members of Congress and other users of Economic Indicators, both within the Government and among the
nearly 9,500 private subscribers, but has become an important teaching aid in college courses in statistics.
It is believed that this new revision of the original publication will be especially helpful because of the
addition of selected historical charts.
PAUL H. DOUGLAS,

Chairman, Joint Economic Committee.
NOVEMBER 17,

1960.

The Honorable PAUL H. DOUGLAS,
Chairman, Joint Economic Committee,
United States Senate, Washington, D.C.
DEAR SENATOR DOUGLAS: Transmitted herewith is the 1960 Supplement to the Committee's monthly
publication Economic Indicators prepared in response to the Committee's instructions in its annual report
filed with the Congress February 29, 1960 (S. Report 1152, 86th Cong., 2d session).
A brief explanation of the purpose and content of the Supplement is presented in the foreword.
It might also be helpful to point out for the benefit of persons not familiar with the monthly Economic
Indicators that this is a regular publication printed by the Congress in accordance with Public Law 120,
81st Congress, 1st session, chapter 237. Economic Indicators was first published by the Joint Economic
Committee as a Committee Print in 1948 to provide its members with information on current economic
trends and developments in a concise and graphic form. Knowing that other Members of the Congress,
businessmen, farm leaders, labor organizations, and representatives of the press also sought such information, the Joint Committee at the same time sponsored legislation which later resulted in authorizing publication on a permanent basis. Economic Indicators is prepared each month for the Joint Economic Committee by the Council of Economic Advisers.
The monthly Indicators is used widely by schools and libraries as a reference source and has an extensive
circulation of foreign subscribers, covering all major nations of the world. The publication currently has a
list of nearly 9,500 paid subscribers. Economic Indicators is sold through the Superintendent of Documents,
United States Government Printing Office, Washington, D.C, price 20 cents per copy; $2 per year; $2.50
foreign.
The Joint Committee has always welcomed comments directed toward making Economic Indicators
and this Supplement more useful publications. Comments were especially solicited during a special review

iii

of the monthly Indicators this year. That publication, beginning with the November issue, and the 1960
Supplement take account of many of the suggestions made. It should be understood, of course, that the
materials included must be limited to those series most widely used by Members of Congress, executive
Government agencies, and others. The Committee policy has been to carry standard series and relationships without interpretation. Other publications of the Committee and the executive agencies are considered the medium for interpretations of the data.
The development and supervisory work on the first issue was done by the Committee staff, with
descriptions of the series written by members of the staff of the Office of Statistical Standards, Bureau
of the Budget, and tables prepared by Frances James of the Council of Economic Advisers and the
agencies compiling the original data. The 1960 /Supplement was prepared under the direction of
Kaymond T. Bowman, Assistant Director for Statistical Standards, Bureau of the Budget, by the staff
of the Office of Statistical Standards in consultation with the Council of Economic Advisers and with
the cooperation of the agencies compiling the data. The entire project was carried out in response to
requests directed to the Bureau of the Budget by the Subcommittee on Economic Statistics.
Respectfully submitted.
JOHN W. LEHMAN,

Clerk and Acting Executive Director.

Foreword
This is the fourth edition of the Supplement to Economic Indicators containing historical data and a
description of each series as well as references to additional technical publications. It shows annual data
for each series in the same tabular form as current data are published monthly in Economic Indicators. The
explanatory text accompanying each series is intended to meet the need for general information which cannot be repeated each month but which is essential for understanding and interpreting the significance of
the current data. The Supplement, along with the current issues of Economic Indicators, also meets a need
of teachers and students for a convenient source of information for keeping up with current economic
conditions and at the same time becoming familiar with basic sources and methods used to provide such
indicators.
The text accompanying each series provides in nontechnical language: a description of the series, an
explanation of how the data are obtained and the series derived, its relation to other series, and its principal
uses and limitations. References are also given to primary publications of the series, sources showing more
detailed data, and publications which contain more complete and technical explanations.
The Supplement was first published in December 1953. It was revised in November 1955 and again
in September 1957. As in the earlier editions, this revision brings both text and tables up to date. Minor
revisions in the tables in Economic Indicators were made from time to time since 1957 and some major changes
were introduced in the November 1960 issue. This issue of the Supplement reflects all of those changes.
The descriptive material gives the sources of data and statistical procedures now being used in compiling
the series. Brief explanations of the methods used in making seasonal adjustments are also provided.
A significant new feature in content of the present issue of the Supplement is the addition of charts.
The monthly issues of Economic Indicators have always included charts, showing seasonally adjusted data
where available, for a period of 5 or 6 years. Selected charts included in this issue of the Supplement show
a somewhat longer historical perspective of month-to-month or quarter-to-quarter changes from. 1947,
seasonally adjusted where available.
A more comprehensive guide to the organization of Federal statistics and the basic responsibilities of
the various Federal statistical agencies, as well as brief descriptions of the principal economic and social
statistics series collected by Government agencies, is contained in Statistical Services of the Federal Government, available from the Superintendent of Documents, Government Printing Office.

Gross National Product or Expenditure in 1959 Prices, 1929-59
(Annual data.

Gross Private Investment includes net exports of goods and services

Billions of Dollars
5001

400

300

GOVERNMENT PURCHASES), rBn<;Q DmuATIOF GOODS A P « : * : ? : * : * : : j * 6 R 0 S S PR|VATE
SERVICES j:j:

TOTAL GROSS
NATIONAL PRODUCT

200

PERSONAL CONSUMPTION EXPENDITURES
100

1929

1932

1935

1938

1941

1944

1947

1950

1953

1956

1959

SOURCE OF DATA: DEPARTMENT OF COMMERCE

Growth of the Labor Force, 1929-59
(Annual data)
Millions of Persons

TOTAL LABOR FORCE
CIVILIAN LABOR FORCE
CIVILIAN EMPLOYMENT

\£Qirill TIIDAI EMPLOYMENT
CMDIHYMPMT/X
AGRICULTURAL

1929

1932

1935

SOURCE OF DATA: DEPARTMENT OF LABOR

1938

1941

1944

1947

1950

1953

1956

1959

Contents
TOTAL OUTPUT, INCOME, AND SPENDING
The Nation's Income, Expenditure, and Saving
Gross National Product or Expenditure
National Income
Sources of Personal Income
Disposition of Personal Income
Farm Income
Corporate Profits
Gross Private Domestic Investment
Expenditures for New Plant and Equipment

Page

1
4
8
11
12
15
19
22
25

EMPLOYMENT, UNEMPLOYMENT, AND WAGES
Labor Force
Unemployment Insurance Programs
Nonagricultural Employment
Weekly Hours of Work
Average Hourly and Weekly Earnings—Selected Industries

29
34
38
42
45

PRODUCTION AND BUSINESS ACTIVITY
Industrial Production and Production of Selected Manufactures
Weekly Indicators of Production
New Construction
Housing Starts and Applications for Financing
Trade Sales and Inventories
Manufacturers' Sales, Inventories, and New Orders
Merchandise Exports and Imports
United States Balance of Payments

47
52
56
60
65
70
73
76

PRICES
Consumer Prices
Wholesale Prices
Prices Received and Paid by Farmers

80
83
87

MONEY, CREDIT, AND SECURITY MARKETS
Money Supply
Bank Loans, Investments, Debits, and Reserves
Consumer Credit
Bond Yields and Interest Rates
Stock Prices

92
94
98
101
104

FEDERAL FINANCE
Budget Receipts and Expenditures
Cash Receipts from and Payments to the Public

106
109

vii

Contents—Continued
List of Charts
Page

Gross National Product or Expenditure in 1959 Prices, 1929-1959
Growth of the Labor Force, 1929-1959
Gross National Product or Expenditure, 1947-1960
National Income, 1947-1960
Per Capita Disposable Income, 1947-1960
Farm Income, 1947-1960
Corporate Profits, 1947-1960
Gross Private Domestic Investment, 1947-1960
Expenditures for New Plant and Equipment, 1947-1960
Status of the Labor Force, 1947-1960
Rates of Insured Unemployment Under State Programs, U.S., 1949-1960
Employees in Nonagricultural Establishments, 1947-1960
Average Weekly Hours in Selected Industries, 1947-1960
Average Hourly Earnings in Selected Industries, 1947-1960
Industrial Production, 1947-1960
New Construction, 1947-1960
Nonfarm Private Housing Starts, 1947-1960
Retail Sales and Inventories, 1947-1960
Manufacturers' Sales, Inventories, and New Orders, 1947-1960
Balance of Payments, 1950-1960
Consumer Prices, 1947-1960
,
Wholesale Prices, 1947-1960
Prices Received and Paid by Farmers, 1947-1960
Loans and Investments at All Commercial Banks, 1947-1960
Consumer Credit Outstanding, 1947-1960
Bond Yields and Interest Rates, 1947-1960

viii

vi
vi
5
10
13
16
19
24
26
29
35
39
42
45
47
57
61
65
72
77
80
84
87
95
99
102

TOTAL OUTPUT, INCOME, AND SPENDING
THE NATION'S INCOME, EXPENDITURE, AND SAVING
Description of series.—The Nation's income, expenditure, and saving, representing a summary of the
Nation's economic accounts, are shown in the accompanying table for persons, business, international,
and government. The accounts shown here represent a statement of the gross national product in
terms of receipts and expenditures for these four categories; for every dollar of expenditure there must be
a dollar of receipts. Thus the combined receipts
(disposable personal income, gross retained earnings
of business, and government receipts) must equal the
combined expenditures (personal consumption expenditures, gross private domestic investment, net
foreign investment, and government expenditures).
It follows that for any period in which the receipts
for any of the four categories exceed expenditures,
the difference will be offset by an excess of expenditures over receipts in another category or categories.
The relationship of receipts to expenditures for each
of the four categories is shown in the first table in
Economic Indicators.
The exact balancing of the combined receipts and
expenditures reported for the four categories—persons, business, international, government—requires
recognition of a statistical discrepancy, since the estimating procedure involves somewhat independent
data on each side of the accounts and does not produce the identity w^hich is conceptually present. In
the accompanying table, the total of personal, business, foreign net transfers by government, and government receipts plus the statistical discrepancy
equals the total of personal and business expenditures, government purchases of goods and services
and net exports.
The personal account summarizes the more detailed statistics on personal income and consumption
shown elsewhere in Economic Indicators, particularly
in the table on Disposition of Personal Income (see
p. 14). It should be noted that, although the personal
income account includes the income of unincorpo-

rated businesses and farms, the consumer expenditure account includes only expenditures for consumption purposes. Investments of noncorporate as wTell
as corporate businesses are included in the business expenditure account. The actual or imputed
rent of dwellings is included in consumer expenditure; but residential construction, whether for owner
occupancy or for rental purposes, is included with
business investment.
In the business account, receipts or gross retained
earnings include the undistributed profits of corporations after adjustment for inventory valuation,
plus the capital consumption allowances of both
corporate and noncorporate enterprises and institutions, including residences. The capital consumption allowances must be added to receipts since investment is on a gross basis—i.e., before deduction for
depreciation, capital outlays charged to current expense, and accidental damage to fixed capital. Business investment includes additions to plant and
equipment and inventories of both corporate and
noncorporate enterprises, as well as residential construction. Because of conceptual difficulties and
limitations in the data which prevent differentiating
investment items in the present consumer and government accounts, as shown here business investment
constitutes the only current savings of the Nation
identified in real terms.
In the international account, the expenditures item
represents the difference between exports of goods
and services on the one hand, and imports of goods
and services on the other. The receipts item consists
solely of foreign net transfers by government. For
1929-45, foreign net transfers by government were
negligible. For that period, net exports of goods and
services have been equated with the excess of receipts
or expenditures for this sector.
The government account shows receipts and expenditures on an income and product account basis,
rather than on either a cash or a conventional budget

The Nation1 s Income, Expenditure, and Saving
[Billions of dollars]
Business

Persons

Year

Dispos- Personal Personal
able
conGross
saving
persump( + ) or retained
sonal
tion
earndisinexings 2
savl
come
pendi- ing ( —)
tures

International

Gross
private
domestic
investment

Excess
of investment

Foreign
net
transfers by
Government

Net exports of goods and
services

Net
exports

Excess of
transfers (-J-)
or of net
exports
Exports Imports
()3

1929.

83. 1

79.0

4. 2

11.5

16.2

-4. 7

0.8

7.0

6.3

1930.
1931.
1932.
1933.
1934.

74. 4
63. 8
48.7
45. 7
52.0

71.0
61.3
49.3
46.4
51.9

3.4
2. 5
-.6
-.6
.1

8.8
5.2
2.7
2. 6
4.9

10.3
5.5
.9
1. 4
2.9

-1.5
-. 3
1.8
1. 2
2.0

.7
.2
.2
.2
.4

5. 4
3. 6
2.5
2.4
3.0

4. 8
3. 4
2. 3
2.3
2.5

-.7
2
-.2
-.2

1935.
1936.
1937.
1938.
1939.

58.3
66.2
71.0
65. 7
70. 4

56.3
62. 6
67. 3
64. 6
67. 6

2.0
3. 6
3.7
1. 1
2.9

6.3
6. 5
7.8
7. 8
8.3

6.3
8.4
11.7
6. 7
9.3

. 1
-1.9
-4.0
1.2
-1.0

-. 1
-. 1
.1
1. 1
.9

3. 3
3. 5
4. 6
4.3
4.4

3. 3
3. 6
4. 5
3. 2
3.5

. 1
. 1
-. 1
-1. 1
-.9

1940.
1941.
1942.
1943.
1944.

76. 1
93.0
117. 5
133. 5
146.8

71.9
81.9
89. 7
100.5
109.8

4.2
11. 1
27.8
33.0
36.9

10.4
11. 5
14. 1
16.3
17. 2

13.2
18. 1
9. 9
5. 6
7. 1

-2.8
-6. 6
4. 3
10.7
10. 1

1. 5
1. 1
2
-2. 2
-2. 1

5.4
6.0
4.9
4.5
5.4

3.8
4.8
5. 1
6. 8
7. 5

-1. 5
-1. 1
.2
2. 2
2. 1

1945
1946
1947
1948
1949

150.4
160.6
170. 1
189. 3
189. 7

121. 7
147. 1
165. 4
178.3
181. 2

28.7
13.5
4. 7
11.0
8.5

15. 6
13. 1
18.9
26. 6
27. 6

10. 4
28. 1
31. 5
43. 1
33.0

5. 2
-15. 1
-12. 6
-16.5
-5.4

()
0.3
.1
1. 6
3.2

-1. 4
4.9
9. 0
3. 5
3.8

7.4
12.8
17.9
14. 5
14. 0

8. 8
7. 9
8. 9
11. 0
10. 2

1.4
-4. 6
-8.9
-1. 9
-. 5

1950
1951
1952
1953
1954

207.7
227.5
238. 7
252.5
256.9

195.0
209. 8
219. 8
232. 6
238.0

12. 6
17.7
18.9
19.8
18.9

27.7
31. 5
33.2
34.3
35.5

50. 0
56.3
49.9
50.3
48.9

-22.3
-24.8
-16. 6
-16.0
-13.4

2. 8
2. 1
1.5
1.6
1. 4

.6
2.4
1.3
-. 4
1.0

13. 1
17.9
17.4
16. 6
17. 5

12.5
15.5
16. 1
17.0
16. 5

2. 2
-. 2
.2
2.0
.4

1955
1956
1957
1958
1959

274. 4
292.9
308.8
317. 9
337.3

256.9
269.9
285. 2
293.5
313. 8

17. 5
23. 0
23. 6
24. 4
23.4

42. 1
43. 0
45. 6
44. 6
50.5

63. 8
67.4
66. 1
56. 0
72.0

-21.
-24.
-20.
-11.
-21.

1. 5
1. 5
1. 5
1. 3
1. 5

1. 1
2.9
4.9
1. 2
-1.0

19. 4
23. 1
26. 2
22. 7
22.9

18.3
20. 2
21.3
21.5
23. 8

.4
-1.5
-3.5
. 1
2. 5

8
3
5
4
6

-0.8

See footnotes at end of table on next page.

basis, to be consistent with the receipts and expenditures of consumers and business and with the gross
national product total. The government receipts include personal, corporate and indirect business taxes,
and contributions for social insurance. Government
interest charges and transfer payments, such as social
security and veterans' benefits and net transfers to
abroad, are not included in the gross national product, although some items are income to recipients.
They are therefore subtracted here from both receipts
and expenditures.

The government income and product accounts are
on a consolidated basis, just as the cash accounts are,
but they depart from the latter because of the timing
of the items included in each and because of conceptual differences. The income and product accounts
of the government are designed to be in accord with
the accrual records maintained by private business.
Thus, business taxes, especially those on corporate
profits, are recorded on an accrual rather than a collections basis, and government expenditures for goods
are corrected for the lag between deliveries and pay-

The Nation1 s Income, Expenditure, and Saving—Continued
[Billions of dollars]
Government
Surplus

Expenditures

Net receipts

( + ) or

Year
Tax and TransPurTransnontax
fers,
chases
Total
fers,
Net
receipts interest, of goods expendi- interest,
or
receipts
and sub- and
tures and subaccruals sidies 5 services
sidies 5
1929.

9. 5

11.3

1. 7

8.5

10.2

1. 7

1930_
1931_
1932.
1933_
1934_

8.9
6.4
6.4

10. 8
9. 5

9. 2
9. 2
8. 1
9. 8

11.0
12. 3
10. 6
10.7
12. 8

1. 8
3. 1

10.5

1. 8
3. 1
2. 5
2. 6
3. 1

1935.
1936.
1937_
1938_
1939_

8.0

3. 4
4. 1
3. 1
3. 8
4. 2

10.0
11. 8
11. 7
12. 8
13. 3

13. 3
15.9
14.8
16. 6
17.5

3.4

8. 9
12. 3
11. 2
11.2

11.4
12. 9
15. 4
15.0
15. 4

1940_
1941_
1942_
1943.
1944.

13. 3
21.0
28. 3
44. 4
44. 6

17. 7
25.0
32. 6
49. 2
51. 2

4.4
4.0

18. 5
28. 8
64.0
93. 4
103. 1

4.4
4.0
4.3

6. 5

14. 1
24. 8
59. 7
88. 6
96.5

1945_
1946_
1947_
1948.
1949_

43. 1
34. 6
41. 6
42. 8
37.0

53.2
51. 1
57. 1
59.2
56. 4

10. 1
16.5
15.4
16. 5
19. 4

82. 9
30.5
28. 4
34. 5
40.2

92.9
47.0
43.8
51.0
59.5

10. 1
16. 5
15. 4
16. 5
19.4

1950.
1951_
1952.
1953.
1954.

47. 2
66. 6
72. 2
75. 7
68.5

69.3
85. 5
90. 6
94. 9
90. 0

22. 1
18. 9
18.4
19. 2
21. 5

39.0
60. 5
76.0
82. 8
75. 3

61. 1
79. 4
94. 4
102.0
96. 7

22. 1
18. 9
18. 4
19. 2
21. 5

1955.
1956.
1957.
1958.
1959.

78.4
84. 2

101.4
109. 5
116. 3
115. 2
129. 1

23.0
25. 3

75. 6
79.0
86. 5
93. 5
97. 1

98. 6
104. 3
115.3
126. 6
131. 6

23.0
25. 3
28. 7
33. 1
34. 5

6. 7
7. 4

87.5

82. 1
94. 6

8.9
9.3

4. 3

4.8

28.7

33. 1
34. 5

8.0

2.5
2.6

3. 1
4. 1
3. 1
3. 8
4. 2

4. 8
6. 5

deficit
( - ) on
income

Statistical
or
discrepreceipts
ancy
Total
income

Gross
national
product or
expenditure

and

product
account
1.0

104.2

0.3

104.4

-.3

92. 1
75.4

-1.0

91. 1
76. 3
58.5
56.0
65.0

-2.8
-1.7
-1. 4
-2.4
-2.0
-3.0
.6
-1. 6
-2. 1
_. 7
-3! 8
-31.4
-44. 2
-51. 9

57.7
55.0
64.2
72.7
81.6
91.0
84.8
89.9

.8
.8
.9

.7
-.2
1. 1
-. 2
.5
1.2

72.5
82.7
90. 8
85.2
91. 1

99. 8
125.4
160. 0
194.2
208. 6

-1.7
2. 8

100. 6
125.8
159. 1
192. 5
211.4

-39. 7
4. 1
13.3
8.2

209. 1
208. 6
230.7
260.3
257.5

4.5
2. 1
3.5
-.8
.5

213. 6
210.7
234. 3
259. 4
258. 1

8.2

285.3
327.7
345. 6
364. 1
362.3

-.7

284. 6
329.0
347.0
365. 4
363. 1

0 1
O. JL

6. 1
-3.9
-7. 1
-6. 7
2.9

5. 2
1.0

-11.4
-2. 5

396.5
421. 6
443.4
445.9
483.9

-.8

1. 2
1.4
1.3
.9
1.0

-2. 4
-. 6
-1. 7
-1.8

397.5
419.2
442. 8
444.2
482. 1

1
2
3

Personal income less personal taxes and nontax payments (fines, penalties, etc.).
Undistributed corporate profits, corporate inventory valuation adjustment, capital consumption allowances, and excess of wage accruals over disbursements.
Net foreign investment with sign changed.
*5 For 1929-45, net exports of goods and services and net foreign investment have been equated.
Government transfer payments to persons, foreign net transfers by Government, net interest paid by Government, and subsidies less current surplus of Government enterprises.
Source: Department of Commerce.

ments therefor. Capital transactions, such as receipts from the sale of government property and
changes in loans and investments of government
credit agencies, are excluded from the income and
product accounts although such transactions are included in both the cash and conventional budgets.
Uses and limitations.—A set of economic accounts
for the Nation reduces the voluminous detail of eco-

nomic activity to understandable proportions by providing the factual background for seeing in perspective the operations of the major categories of the
economy—persons, business, international, and government—and the interrelationships or transactions
between and among them. A statement of these accounts serves a number of purposes:
(1) In summarizing the pattern of change in the

economy over recent periods, the statement indicates
what one should look for among the other charts and
tables included in Economic Indicators.
(2) The accounting methodology needed to prepare this statement helps to assure that the various
estimates, such as income, expenditures, savings, investment, in the other charts and tables are consistent.
(3) It is frequently necessary to project and evaluate the likely economic impact of public and private
programs on the economy. These accounts make possible the quantitative expression of the combination of
such public and private plans within a framework
of the flows of incomes and expenditures of various
groups in the economy so as to measure inconsistencies or imbalances between and among them, and
inconsistencies between and among the assumptions
upon which these plans are based.
Preparation of a Nation's economic budget for a
future period, using these accounts, is especially helpful when government programs are of such magnitude and importance that they dominate changes in
the economy; in other words, when government
spending and tax plans are the main forces making
for changes in the economy. At other times, its
main benefit is in identifying and measuring inflationary and deflationary programs of government
and private economic groups and in pointing out
areas in which adjustments are necessary to achieve
economic stability and growth.
(4) Another use, related to the preceding, is that
of enabling those who must make actual forecasts,
such as business firms, private economists, and others,
to check their forecasts as to consistency with past
patterns of fluctuations in activity in both the economy as a whole and in its various segments, and consistency among the various assumptions as to income,
savings, investment, prices, and employment that underlie the forecast.

Certain limitations must be recognized in using
these economic accounts. In the first place, the statistics do not throw light on all aspects of the economy
but only on broad summary categories; thus they
must be supplemented by the use of additional economic information, such as that contained in other
parts of Economic Indicators. Second, since the
data are national in coverage, their trends and
changes must be carefully interpreted and supplemented by other data for use in the analysis of regional or individual industry problems. Third, they
do not, of course, provide the assumptions or the
reasons which one should have for explaining or
projecting economic changes; they provide only the
relevant statistical background for intelligent reasoning and judgment. Finally, it must be recognized
that for some of these categories estimates for both
receipts and expenditures rest upon data collected
for other purposes, or upon indirect estimates in
cases where no direct survey is regularly conducted.
Thus there will be times when it will be difficult to
interpret the meaning of some of the changes in the
accounts if statistical discrepancies arising from
technical problems in estimating various items are so
large that they throw doubt on the importance of
movements in the accounts.
References.—The estimates included in the Nation's economic accounts are all taken from the national income and product statistics of the Department of Commerce: see references below, under National Income (p. 10).
See also Technical Notes on the Nation's Economic
Budget, Appendix A: Report of the Joint Committee on the Economic Re/port on the January 1952
Economic Report of the President^ Senate Report No.
1295, 82d Congress, 2d session, pages 99-105, and
statistical materials prepared by the Council of
Economic Advisers for inclusion with the Economic
Report of the President.

GROSS NATIONAL PRODUCT OR EXPENDITURE
Description of series.—Gross National Product
(often called GNP) represents the total national output of goods and services at current market prices.
It measures this output in terms of the expenditures
by which these goods are acquired. These expenditures are the sum of four major items: (1) personal consumption expenditures, (2) gross private
domestic investment, (3) net exports of goods and

services, and (4) government purchases of goods and
services. The goods and services included in the
GNP are for the most part those actually bought
for final use in legal markets. There are a number
of exceptions, the most important of which is the
rental value of owner-occupied dwellings.
The GNP series measures the product attributable
to the factors of production—labor and property—

production in the United States credited to foreignowned resources, and net private cash remittances to
abroad). The items are obtained from the official
balance of payments series; reconciliations of the
GNP measures with the balance of payments are
shown in U./S. Income and Output, Table IV-4 and
in the July issue of the /Survey of Current BunlneHH.
"Government purchases of goods and services" are
those made by Federal, State, and local governments. They include (1) net purchases of new goods
(such as school buildings and armaments), (2) payments for services (principally compensation for
government employees), (3) gross investment by
government enterprises, and (4) net government
purchases from abroad. Items which do not represent current productive activity—such as transfer
payments (e.g., social security, veterans' payments,
fdid net transfers to abroad), government interest,
subsidies, loans, and other financial transfers—are
excluded. The GNP series on government purchases
differs from expenditures shown in the Federal
Budget, which include many but not all of these
items. Differences may also arise because of varia-

supplied by residents of continental United States.
For the most part these factors are located in this
country, but the GNP total also includes earnings of
American employees of the United States Government stationed abroad, foreign interest and dividends received by Americans, and the profits from
foreign branches of American business.
"Personal consumption expenditures" measures
the sum of money and imputed expenditures made
by consumers (individuals, nonprofit institutions
such as hospitals, etc.) for goods and services. This
series is described below, in the section on Disposition of Personal Income.
"Gross private domestic investment'' consists of
new construction, producers' durable equipment, and
change in business inventories. This component of
GNP is described below, in a separate section (p.
22).
"Net exports of goods and services" measures the
excess of "exports" of goods and services (domestic
output sold abroad, and the production abroad
credited to United States-owned resources) over "imports" (United States purchases of foreign output,

Gross National Product or Expenditure, 1947-60
{Quarterly data in current prices.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
500

GROSS NATIONAL PRODUCT
400

PERSONAL CONSUMPTION EXPENDITURES
300

200

GOVERNMENT PURCHASES OF GOODS AND SERVICES
GROSS PRIVATE DOMESTIC INVESTMENT
100

NET EXPORTS OF GOODS AND SERVICES
,

1947

1948

1949

1950 1951

SOURCE OF DATA: DEPARTMENT OF COMMERCE

1952

1953

1954

1955

I ,.

• > • •'••

1956

.-.

1957

- •

1958

1959

I960

Gross National Product or Expenditure
[Billions of dollars, except last column]
Government purchases of goods and services
Year

Total
Net
Personal Gross
gross
private exports
Total
connational
sump- domestic of goods
gross
product national
investtion
and
in 1959 product expendment
l
prices
itures

1929.

203. 6

1930_
1931.
1932.
19331934.

184.
170.
144.
141.
155.

3
3
8
5
1

1935.
1936.
1937.
1938.
1939.

170.
194.
204.
195.
211.

3
5
7
3
6

1940.
1941.
1942.
1943.
1944.

229.
267.
305.
342.
367.

9
9
0
9
7

1945.
1946.
1947.
1948
1949.

Implicit
price
deflator
for total
GNP,
1959= 1004

Federal
Total
Total

National
defense 3

Other

State
and
local

79.0

16.2

0.8

8.5

1. 3

7.2

51. 3

91. 1
76. 3
58.5
56. 0
65. 0

71.
61.
49.
46.
51.

0
3
3
4
9

10. 3
5.5
.9
1. 4
2.9

.7
.2
.2
.2
.4

9. 2
9. 2
8. 1
8. 0
9. 8

1. 4
1. 5
1.5
2.0
3.0

7.8
7. 7
6. 6
6.0
6. 8

49.
44.
40.
39.
41.

72. 5
82. 7
90. 8
85.2
91. 1

56. 3
62. 6
67. 3
64.6
67. 6

6. 3
8. 4
11. 7
6. 7
9. 3

-. 1

10.0
11.8
11. 7
12.8
13. 3

2.9
4. 8
4. 6
5.3
5. 2

()
1.3

()
3. 9

7. 1
7.0
7.2
7. 5
8. 2

42. 6
42.5
44. 3
43. 6
43. 1

6
8
1
5
4

71. 9
81.9
89. 7
100. 5
109. 8

13.2
18. 1
9.9
5. 6
7. 1

1. 5
1. 1
-.2
-2.2
-2. 1

14.
24.
59.
88.
96.

1
8
7
6
5

6. 2
16. 9
52.0
81.2
89. 0

2. 2
13. 8
49. 6
80.4
88. 6

"4.
3.
2.
1.
1.

0
2
7
5
6

7. 9
7.8
7. 7
7. 4
7. 5

43.
47.
52.
56.
57.

8
0
2
1
5

361. 1
316. 2
315. 7
328.0
328. 4

213.6
210. 7
234. 3
259. 4
258. 1

121. 7
147. 1
165. 4
178. 3
181.2

10. 4
28. 1
31. 5
43. 1
33.0

-1. 4
4. 9
9. 0
3.5
3.8

82. 9
30.5
28. 4
34. 5
40. 2

74. 8
20. 6
15. 6
19. 3
22.2

75. 9
18. 8
11. 4
11. 6
13.6

1.0
4.5
5. 4
8. 2

8. 1
9. 9
12. 7
15. 2
17.9

59.
66.
74.
79.
78.

1
6
2
1
6

1950
1951
1952
1953.
1954.

356. 4
385. 3
399. 4
417. 6
409.2

284. 6
329. 0
347.0
365. 4
363. 1

195.0
209. 8
219. 8
232. 6
238.0

50.0
56. 3
49. 9
50. 3
48. 9

.6
2. 4
1. 3
-. 4
1. 0

39.0
60. 5
76. 0
82. 8
75. 3

19. 3
38. 8
52. 9
58.0
47.5

14. 3
33. 9
46. 4
49. 3
41.2

5. 2
5.2
6. 7
9. 0
6. 7

19.
21.
23.
24.
27.

7
7
2
9
7

79.
85.
86.
87.
88.

9
4
9
5
7

1955
1956
1957
1958
1959

441.
451.
459.
451.
482.

397.
419.
442.
444.
482.

256.
269.
285.
293.
313.

63.
67.
66.
56.
72.

1. 1
2. 9
4. 9
1.2
-1.0

75. 6
79.0
86. 5
93.5
97. 1

45.
45.
49.
52.
53.

39.
40.
44.
44.
46.

6. 6
5. 7
5. 7
8. 3
7. 8

30.
33.
36.
40.
43.

3
2
8
8
9

90. 0
92.9
96. 4
98.4
100. 0

9
2
5
3
1

104. 4

100.
125.
159.
192.
211.

5
2
8
2
1

9
9
2
5
8

8
4
1
0
0

.1
1. 1
.9

3
7
7
6
3

1
4
4
8
0

4
8
4
6
9

1
These estimates represent an approximate conversion of the Department of Commerce series in 1954 prices. See U.S. Income and Output, a Supplement to the
Survey
of Current Business, 1958.
2
Less
Government sales.
3
These expenditures correspond closely with the "major national security" category in The Budget of the United States Government for the Fiscal Year Ending
June4 30, 1961, shown on p. 31 of Economic Indicators.
Total gross national product in current prices divided by total gross national product in 1959 prices.
5
Not available.
Source: Department of Commerce.

tion in the time at which expenditures occur and are
recorded.
Statistical; procedures.—Hundreds of basic economic series are evaluated, adjusted, and combined
in the process of preparing the GNP estimates. For
example, consumer expenditures are estimated for
benchmark years primarily from data in the Censuses
of Business and Manufactures, reports of the Department of Agriculture, Internal Revenue Service,
and Interstate Commerce Commission, with current

annual and quarterly estimates carried forward by
using the Census Bureau's Annual Survey of Manufactures and Monthly Report on Retail Trade, and
data from other sources. Construction activity is
estimated as described below in the section on New
Construction (p. 56). Investment in producers' durable equipment is estimated for benchmark years
from Census of Manufactures and related data, with
current quarterly and annual totals estimated principally from sample surveys and construction data

of the Department of Commerce and financial reports to other agencies. For details of the methods
used, reference should be made to the comprehensive
studies by the Department of Commerce, e.g., the
1954 National Income Supplement to the Survey of
Current Business, and U.S. Income and Output,
1958.
The methods used to eliminate seasonal variation
differ with the particular series to be adjusted. For
most components the conventional ratio-to-movingaverage method has been employed. However, when
satisfactory results have not been obtained, resort has
been made to more refined methods. For further
information see the section "Measurements of Quarterly and Monthly Movements," U.S. Income and
Output, p. 95 ff.
The magnitude of the seasonal correction may be
illustrated by the accompanying comparison of the
GNP on an unadjusted and seasonally adjusted basis
for the year 1959. The corrections shown in the
table are computed values reflecting the net results
of many individually corrected components underlying the published series. It follows from this that
the magnitude of the correction will vary somewhat

from year to year as the result of shifts in the relative importance of the component series. The summary results may also be modified by changes in the
seasonal patterns of the individual component series,
which regularly come under review.
Relation to other series.—Two other series widely
used as indicators of the general level of economic
activity are national income and the Federal Reserve
index of industrial production. Gross national product and national income are compiled from the same
series of accounts, but whereas the former measures
the market value of total output, the latter measures
only the earnings of labor and property (net of capital consumption) which flow from that output. National income is smaller than the gross national product chiefly because the latter includes (1) allowance for depreciation and other capital consumption, and (2) indirect taxes (such as sales and excise
taxes).
The GNP measures total output, whereas the Federal Reserve index of industrial production covers
selected sections of the economy—manufactures, mining, electricity, and gas. The products in the GNP
series are final product, whereas the Federal Re-

Seasonal Correction, Gross National Product, 1959
[Billions of dollars]

Component

I
Gross national product

Gross private domestic investment-_
New construction
Producers' durable equipment-_
Change in business inventories. _
Net exports of goods and services
Exports.
Imports.
Government purchases of goods and
services
Federal
State and local.

III

118.3 122.0

120.4

78.4

79. 0

79. 9

73. 1

77. 3

10. 4
36.3
29. 8

11. 1
36.9
30. 4

11.0
37.0
31. 0

10. 9
37.4
31. 6

9. 4
33.6
30. 1

17. 7

19. 7

16. 9

17.7

9.8
6.0
1.9

10. 3
6.5
2.9

10. 3
6. 6
.0

-. 2

-. 6

5.5
5. 7

III

121. 6 113. 8 121. 0 119. 1 128. 1

4.5

1.3

6. 5

77.3

86. 1

3. 4

1. 7

6. 2

11. 2
35. 7
30. 5

10. 4
36.0
31. 0

12.4
42. 4
31. 3

1. 0
2. 7
-. 3

.6
1. 0
.0

1. 5
5.0
.3

17.5

19. 3

17. 5

17. 7

-. 6

9.8
6.7
1.2

8.3
5. 6
3. 6

10.3
7. 0
2. 1

11. 4
6.3
-. 2

10.3
1. 5
7.0
.4
. 4 -1. 7

-1. 1
.3
.2

-. 3
.8

-. 1

-. 4

-.5

5.5
6. 1

6.0
6.0

5.9
6.0

5.3
5. 5

5. 7
6.0

5. 7
6. 3

6.2
6.0

.2
.2

. 3
-.3

-. 3
.0

24.3

24. 4

24. 5

24. 1

23. 5

24. 7

24.8

24. 2

-. 3

-. 1

13. 3
11.0

13.4
1.1. 0

13.4
11. 1

13. 1
11. 0

13. 2
10. 3

13. 5
11. 2

13. 4
11. 3

13.0
11. 1

.0
-. 2

.1
-. 1

Personal consumption expenditures.. 76. 5
Durable goods
Nondurable goods.
Services

Correction, quarterly rates
(Seasonally adjusted
minus unadjusted)

Unadjusted quarterly
rates

Seasonally adjusted
quarterly rates

.1
.7

-.3

serve index includes both final and intermediate
product, and thus may show an increase or decrease
in activity to be reflected later or not at all in the
flow of final output. The GNP series in current
prices combines price and volume changes, whereas
the Federal Reserve index measures only physical
volume.
Uses and limitations.—The GNP total is the most
inclusive monetary measure of trends in the economy
as a whole which is currently estimated. It also has
high value as an analytic tool, since the movements
of many sectors of the economy, including the sales
of many industries and enterprises, are quite closely
related to changes in the level of GNP.
The GNP in current dollars combines the effects

of changes in both the price level and the physical
volume of output. Movements in the total from
quarter to quarter should not be interpreted as necessarily representing changes in the physical quantity
of goods and services produced by the economy.
GNP estimates corrected for price changes ("deflated GNP") show annual and quarterly changes in
the total volume of national output as well as in the
major components. One of the most important characteristics of the GNP is that changes in the total
can be analyzed by examination of changes in its
components, notably purchases by consumers, private
business investment, government expenditures, and
the movement of foreign trade.
References.—See below, under National Income.

NATIONAL INCOME
Description of series.—National Income is the aggregate of earnings by labor and property from the
current production of goods and services by the Nation's economy. It is the sum of five major items:
(1) compensation of employees, (2) proprietors' income, (3) rental income of persons, (4) net interest,
and (5) corporate profits and inventory valuation
adjustment.
"Compensation of employees" is the sum of wages,
salaries, and certain supplements, such as employer
contributions for social insurance.
"Proprietors' income" measures the monetary earnings and income in kind of sole proprietorships (including doctors, lawyers, and other self-employed),
partnerships and producers' cooperatives, exclusive
of capital gains or losses on inventory or other asset
holdings. The farm proprietors' income shown here
is conceptually the same as farm operators' net income including adjustment for inventory change, as
showTn below^ in the section on Farm Income. Some
variations between the two series prior to 1952 result
from differences in the timing of revisions. The
supplementary income which individuals obtain from
renting property does not appear here, but under
rental income of persons.
"Rental income of persons" consists of (1) net
money income from rental of real property, (2) estimated net rental value to homeowners of their homes,
and (3) royalties received from patents, copyrights,
and rights to natural resources.
"Net interest" measures both the money interest

and the imputed interest accruing to the Nation's
residents from private business and from abroad,
minus government interest disbursements to business
which appear as part of business incomes. Imputed
interest consists of the value of financial services
received by persons without explicit payment and
property income withheld by life insurance companies and mutual financial intermediaries on account of persons.
"Corporate profits" are the earnings of corporations organized for profit, measured before Federal
and State profit taxes, but without deduction of depletion charges and exclusive of capital gains and
losses. (For a more extended discussion, see section
on Corporate Profits below, p. 19.)
"Corporate inventory valuation adjustment"
measures the excess of the value of change in the
volume of corporate inventories (in terms of average
prices during the period) over the change in terms
of book values. This adjustment is required since,
as is customary in business accounting, corporate
profits are reported inclusive of inventory profits or
loss, whereas only the value of the real change in
inventories is counted as current output in the national product. A parallel adjustment is made to
"proprietors' income" for noncorporate inventories.
Statistical procedures.—The methods of estimation
employed in the very complex area of national income are described in detail in the 1954 National
Income Supplement to the Survey of Current Business. Further information is provided in U.S. In-

National Income
[Billions of dollars]
Corporate profits and inventory
valuation adjustment

Proprietors' income
Total
national
income

Year

Compensation
of employees l
Farm

Business
and professional

Rental income of
persons

Net interest

Profits
before
tax

Total

Inventory
valuation
adjustment

1929

87.8

51. 1

6. 0

8. 8

5.4

6.4

10. 1

9. 6

0. 5

1930
1931
1932_
1933___
1934___

75.7
59. 7
42. 5
40. 2
49.0

46.
39.
31.
29.
34.

8
7
1
5
3

4. 1
3. 2
1. 9
2. 4
2.4

7.
5.
3.
3.
4.

4
6
4
2
6

4.
3.
2.
2.
1.

8
8
7
0
7

6. 0
5. 8
5. 4
5. 0
4.9

6. 6
1. 6
-2. 0
-2. 0
1. 1

3.3
-.8
-3. 0
.2
1. 7

3.3
2.4
1. 0
-2. 1
-. 6

1935
1936
1937
1938
1939

57. 1
64. 9
73. 6
67. 6
72.8

37.3
42. 9
47. 9
45. 0
48. 1

5.0
4. 0
5. 6
4.3
4. 3

5. 4
6. 5
7. 1
6. 8
7. 3

1.
1.
2.
2.
2.

7
8
1
6
7

4.8
4. 7
4. 7
4. 6
4. 6

2.9
5.0
6. 2
4.3
5. 7

3. 1
5. 7
6. 2
3.3
6. 4

1940
1941
1942_
1943
1944

_•
_

1945. _
1946
1947
1948
1949
1950
1951
1952
1953
1954

_ _

___

1955
1956
1957
1958
1959

-. 2
-. 7

()
1.0
y

81.
104.
137.
170.
182.

6
7
7
3
6

52. 1
64.8
85. 3
109. 6
121. 3

4. 6
6. 5
10. 0
11. 4
11. 5

8.4
10. 9
13. 9
16. 8
18.0

2.9
3. 5
4. 5
&1
5. 4

4.5
4. 5
4.3
3. 7
3.3

9. 1
14.5
19. 7
23. 8
23. 0

9.3
17.0
20. 9
24. 6
23.3

-. 2
-2.5
-1. 2
-.8
-. 3

181.
180.
198.
223.
217.

2
9
2
5
7

123. 2
117. 7
128. 8
141. 0
140.8

11.8
15. 3
15. 5
17. 8
12. 9

19.0
21. 3
19. 9
22.4
22. 7

5.6
6. 2
6.5
7.3
8.3

3.2
3. 1
3.8
4. 2
4. 8

18.4
17.3
23. 6
30.8
28. 2

19. 0
22. 6
29. 5
33.0
26.4

-. 6
-5.3
-5.9
-2.2
1.9

241. 9
279. 3
292. 2
305. 6
301.8

154. 2
180. 3
195.0
208.8
207. 6

14. 0
16.3
15.3
13.3
12. 7

23. 5
26. 0
26.9
27. 4
27. 8

9.0
9. 4
10. 2
10. 5
10. 9

5.5
6.3
7. 1
8. 2
9. 1

35.
41.
37.
37.
33.

7
0
7
3
7

40. 6
42. 2
36. 7
38.3
34. 1

-5.0
-1. 2
1. 0
-1.0
-. 3

330.2
350.8
366. 9
367. 7
399. 6

223. 9
242. 5
255. 5
257.0
277.8

11.8
11. 6
11. 8
14. 0
11.8

30.
32.
32.
32.
34.

10.
10.
11.
12.
12.

43. 1
42. 0
41. 7
37.4
46. 6

44. 9
44. 7
43. 2
37. 7
47.0

-1. 7
-2.7
-1.5
2
-'.5

4
1
7
3
7

7
9
9
2
4

10.4
11. 7
13.4
14. 7
16. 4

Includes employer contributions for social insurance. (See also table on Sources of Personal Income).
Less than $50 million.
NOTE.—Quarterly data available beginning 1939; annual from 1929. Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.

come and Output, 1958, also issued as a supplement
to the Survey. The following indicate briefly the
types of estimating procedures used:
"Compensation of employees"—reliable data are
available each year from the social security system,
with current monthly estimates resting chiefly on
employer reports to the Bureau of Labor Statistics
on employment and earnings.
"Proprietors' income"—estimated from income tax
returns to the Internal Revenue Service, usually obtained every second year, with current quarterly data
derived from analysis of trends in noncorporate as
61731 O—60

well as corporate sales and corporate profits in individual industries.
"Rental income of persons"—estimated from a variety of Census Bureau, Internal Revenue Service,
Department of Agriculture, and BLS data on rents
paid and on the distribution of property ownership
and rental income between persons and business.
"Net interest"—estimated from reports to the Internal Revenue Service, Bureau of the Census, Board
of Governors of the Federal Reserve System, and
other agencies on interest and debt,
Seasonal adjustments are not available for the in-

National Income, 1947-60
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
400

TOTAL NATIONAL INCOME

300

COMPENSATION OF EMPLOYEES

\
200

CORPORATE PROFITS AND INVENTORY
VALUATION ADJUSTMENT
100

PROPRIETORS' AND RENTAL INCOME
\
H—^IET INTEREST
I

1947

1948

1949

1950

1951

1952

1953

1954 1955

1956

1957 1958

1959

I960

SOURCE OF DATA: DEPARTMENT OF COMMERCE

come components of the national accounts, with the
exception of corporation profits. This is so because
the basic data sources do not provide a completely
unadjusted monthly series for wages and salaries,
and because in the case of proprietors' income, actual
net income data are lacking altogether on a monthly
and quarterly basis.
Uses and limitations—The national income is a
useful measure of the rate of flow of earnings from
current output. By definition it excludes income
from the revaluation of past output—e.g., capital
gains and losses. The movements of this series correspond with movements in production. However,
the value of the national income series lies more in
the composition than in the total. It may mean little
to know that national income (unadjusted for price
changes) has gone up; but it may be very important
to know the relative contribution of wages and profits
to that increase.
The chief cautions for use result partly from the
definitions used, and partly from the nature of the

basic data. With respect to the first, care must be
taken not to interpret movements in the series as
measuring something other than they are intended
to measure. For example, variations in wages and
profits do not necessarily indicate changes in the
welfare of workers or in the ability of corporations
to provide new capital. For such purposes, these
variations must be considered in the light of other
factors such as the cost of living and the cost of new
plant and equipment. With respect to the second—
which is particularly applicable to the current data
on proprietors' income, rental income of persons, and
the corporate inventory valuation adjustment—it
should be recognized that many of the available data
permit only fair approximations of the phenomena
being measured, and therefore too great reliance
should not be placed on these statistics as instruments of precise measurement.
References.—The official quarterly estimates for
the series included in the national income and product accounts are published by the Office of Business

Economics, Department of Commerce, in the Survey
of Current Business: first quarter in the May issue,
second quarter in August, third quarter in November, and fourth quarter in the following February.
Preliminary quarterly estimates by the Council of
Economic Advisers appear in Economic Indicators
in the month following the end of each quarter.
Preliminary annual estimates are published by the
Office of Business Economics in the February issue
of the Survey, revised estimates in the July issue.
Complete annual and quarterly statistics for 192945, with and without seasonal adjustment, and a de-

tailed explanation of fundamental concepts and
underlying procedures are given in the 1954 National
Income Supplement to the Survey of Current Business. Further information and detailed statistics for
1946-55 are presented in U.S. Income and Output a
1958 supplement to the Survey. Annual and quarterly data for 1956-59 are published in the July 1960
Survey. For personal income, detailed State estimates are presented in Personal Income by States
Since 1929, issued as a supplement to the Survey in
1957. These statistical data are updated each year
in the August Survey.

SOURCES OF PERSONAL INCOME
Description of series.—"Personal income" is composed of income received currently by individuals,
unincorporated businesses, and nonprofit institutions
(including pension, trust, and welfare funds). This
income is divided into labor income, proprietors' income, rental income of persons, dividends, personal
interest, and transfer payments. Capital gains and
losses are excluded. Most of the income is in monetary form, but there are important exceptionsr—
chiefly rental value to owner-occupants of homes and
value of food produced and consumed on farms.
"Labor income" is principally wages and salaries.
It excludes employer contributions for social insurance. "Proprietors' income" and "Kental income
of persons" are defined above, in the section on National Income. "Dividends" are cash dividend disbursements by corporations organized for profit to
stockholders who are United States persons. "Personal interest income" is the "Net interest" component of National Income plus net interest paid by
Government. "Transfer payments" include payments not resulting from current production, such as
social security benefits, military pensions, corporate
gifts to nonprofit institutions, direct relief, and consumer bad debts. They do not include government
interest.
Seasonally adjusted data, preferred for most purposes, are derived directly from seasonally adjusted

national income data. Unadjusted data are not available (seep. 9).
Relation to other series.—Personal income differs
from national income by including transfer payments and government interest and by excluding contributions for social insurance (by employee and
employer), the corporate inventory valuation adjustment, and corporate profits tax liability and
undistributed corporate profits.
Uses and limitations.—The estimates for personal
income and components and for disposable income
measure trends in spending power of individuals.
The inclusion of substantial nonmonetary items—
imputed rent, interest, food, fuel—should be noted
but the effect of these items should not be overemphasized. They tend to make the income estimates
more stable, but have little effect on the ability of
the estimates to show when a change is occurring
and the direction of the shift.
Disposable personal income, discussed in the next
section, gives a more direct measure of income available for spending, since it approximates take-home
income, than does personal income. For measuring
changes, in real terms, i.e., in consumers' buying
power, the estimates of disposable income in constant
prices are to be preferred.
References.—See above under National Income.

Sources of Personal Income
[Billions of dollars]

Total
personal
income

Labor income (wage
and salary
disbursements and
other labor
income) 1

1929_

85. 8

51.0

6. 0

1930_
1932_.
1933_.
1934_.

76.
65.
50.
47.
53.

9
7
1
2
6

46.
39.
30.
29.
34.

7
6
9
4
1

4.
3.
1.
2.
2.

1
2
9
4
4

1935.
1936_
1937_
1938_
1939_

60. 2
68. 5
73.9
68. 6
72.9

37.
42.
46.
43.
46.

2
5
7
6
6

5.
4.
5.
4.
4.

1940_
1941 _
1942.
19431944_

78. 7
96.3

Proprietors' income

Nonagricultural
personal
income 2

Dividends

Personal
interest
income

Transfer payments

Less: Personal contributions
for social
insurance

5. 4

5.8

7. 4

1. 5

0. 1

77.7

7.4
5. 6
3. 4
3. 2
4. 6

4.
3.
2.
2.
1.

8
8
7
0
7

5.5
4. 1
2. 6
2. 1
2. 6

6.9
6. 9
6. 6
6. 2
6. 1

1.
2.
2.
2.
2.

5
7
2
1
2

1
2
2
2
2

70. 8
60.9
46.9
43. 6
49. 8

0
0
6
3
3

5. 4
6. 5
7. 1
6. 8
7. 3

1.
1.
2.
2.
2.

7
8
1
6
7

2.9
4. 5
4. 7
3. 2
3. 8

5.9
5.8
5.9
5. 8
5. 8

2.4
3. 5
2.4
2. 8
3. 0

2
2
6
6
6

53.9
63. 2
67. 0
62. 8
67. 1

4. 6
6. 5
10.0
11.4
11. 5

8.4
10.9
13.9
16. 8
18. 0

2.9
3. 5
4. 5
5. 1
5.4

4.0
4. 5
4.3
4. 5
4.7

5.8
5.8
5. 8
5.8
6.2

3.
3.
3.
3.
3.

123. 5
151. 4
165. 7

50. 5
62. 8
83.0
106.7
118.5

8
1. 2
1. 8
2 2

72. 6
88.0
111. 5
137. 6
151. 6

1945_
1946 _
1947_
1948_
1949_

171. 2
179. 3
191. 6
210.4
208. 3

119. 4
113. 8
125.2
137.9
137.4

11. 8
15.3
15. 5
17. 8
12.9

19.0
21. 3
19.9
22. 4
22. 7

5. 6
6. 2
6. 5
7. 3
8.3

4. 7
5. 7
6. *
7. 2
7. 5

6. 9
7. 6
8. 2
8. 7
9.4

6. 2
11. 4
11. 8
11.3
12.4

2.
2.
2.
2.
2.

3
0
1
2
2

156.8
161. 2
172. 8
189. 2
192. 1

1950_
1951 _
1952_
1953_
1954_

228. 5
256. 7
273. 1
288. 3
289. 8

150. 2
175. 5
190.2
204. 1
202. 5

14.0
16. 3
15.3
13.3
12. 7

23. 5
26. 0
26.9
27.4
27.8

9. 0
9.4
10. 2
10. 5
10.9

9. 2
9. 0
9. 0
9. 2
9. 8

10.3
11. 2
12. 1
13.4
14. 6

15. 1
12. 6
13. 2
14. 3
16.2

2. 9
3. 4
3. 8
3. 9
4. 6

211.3
237. 0
254. 3
271. 5
273. 8

1955_
1956_
1957_
1958_
1959_

310. 2
332.9
351.4
360. 3
383. 3

218. 0
235.7
247. 7
249. 1
268. 3

11.
11.
11.
14.
11.

30. 4
32. 1
32. 7
32.3
34. 7

10. 7
10. 9
11.9
12. 2
12. 4

11. 2
12. 1
12. 6
12.4
13. 4

17.
18.
21.
26.
27.

5.
5.
6.
6.
7.

Year

Business
and professional

Farm

8
6
8
0
8

Rental
income
of
persons

15.
17.
19.
20.
23.

8
5
6
8
5

1
1
1
0
6

5
8
9
4
0

2
8

7
8
8

295.
317.
336.
342.
367.

0
9
1
6
6

1 Compensation of employees (see national income table, p. 9) excluding employer contributions for social insurance and the excess of wage accruals over disbursements.
2
Personal income exclusive of net income of unincorporated farm enterprises, farm wages, agricultural net interest, and net dividends paid by agricultural corporations.
3 Includes $2.7 billion National Service Life Insurance dividend, most of which was paid in the first half of the year.
NOTE.—Quarterly data available beginning 1939; annual from 1929. Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.

DISPOSITION OF PERSONAL INCOME
Description of series.—"Disposable personal income" is equal to personal income less taxes on individuals (including income and other taxes not
deductible as business expense) and other general
government revenues received from individuals as
individuals.
"Personal consumption expenditures" is the sum of
money and imputed expenditures made by persons

(individuals, nonprofit institutions such as hospitals,
etc.) for goods and services. The expenditure total
covers total purchase cost to persons including general sales taxes. The full cost of automobiles, refrigerators, furniture, and the like is included in the
period when sold—quarter or year—regardless of
when payments are made or completed. The purchase of homes is not included as an expenditure:

instead the estimated rental value to the homeowner
is included if he occupies the home.
"Durable goods" are those items which generally
last three years or longer in use. "Nondurable
goods" are tangible commodities with a shorter life.
"Services" include housing, telephone, electricity,
shoe repair, gas and water, and also such items as the
expense of handling life insurance, and banking services furnished without payment (such as free checks
where a minimum balance is maintained).
"Personal saving" is equal to disposable personal
income less personal consumption expenditures. As
such, it conceptually includes not merely cash and
bank deposits but changes in reserves of life insurance companies, increase in equity of farmers (e.g.,
land, machinery), homeowners, etc.
"Per capita disposable personal income" is the disposable personal income series divided by the Census
Bureau estimate of total population for the middle
of the period covered.
Per capita disposable personal income in 1959
prices is obtained by dividing the current dollar

ceries by the implicit deflator for personal consumption expenditures on a 1959 base.
Statistical procedures.—Most personal consumption expenditures for goods are estimated for benchmark years from the value of the output of specified
items as reported in the Census of Manufactures,
less the portion of this output bought by business
and government or exported. To the consumer portion of manufactured products is added the value
of nonmanufactured consumer goods (for example,
nonprocessed foods) to derive producers' output for
consumers. Successive adjustments are added for
transportation, imports and exports, wholesale and
retail inventory changes, wholesale and retail markups, and sales taxes. Transportation charges are
computed from data on transportation compiled by
the Interstate Commerce Commission and other
sources. Wholesale and retail markups are derived
from Census of Business and Internal Revenue Service data. For service items a great variety of sources
and procedures are used.

Per Capita Disposable Income, 1947-60
{Quarterly data.

Seasonally adjusted annual r{ites)

DOLLARS
2,000

PER CAPITA DISPOSABLE
PERSONAL INCOME IN 1959 PRICES

1,800

^ ^ >
1,600

\
IN CURRE'SIT PRK ES

1,400

1,200

1,000

•1 i 1 1 1 1 1 I 1 ! 1 1 1 ! I i 1 1 M ! 1 1 I 1 1 1 1 1 1 I I 1 1 I I I 1 1 I 1 1 1 I 1 i I 1 I 1 1 I I
1947 1 9 4 8 1 9 4 9 1 9 5 0 1951 1 9 5 2 1 9 5 3 1 9 5 4 1 9 5 5 1 9 5 6 1 9 5 7 1 9 5 8 1 9 5 9 I 9 6 0
I i1

SOURCE OF DATA: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS

Disposition oj Personal Income

Year

Personal consumption
expenditures

Disposable
personal

Durable Nongoods durable Services
goods

Total

Personal
saving

Per capita disposable personal
income l

Saving as
•percent of
disposable
income
Current
prices

Billions of dollars

Population 3

19'59
prices 2

Dollars

Thousands

1929

83. 1

79. 0

9. 2

37. 7

32. 1

4. 2

5. 1

682

1, 199

121, 875

1930
1931
1932
1933
1934

74. 4
63. 8
48. 7
45. 7
52. 0

71. 0
61. 3
49. 3
46. 4
51. 9

7. 2
5. 5
3. 6
3. 5
4. 2

34. 0
28. 9
22. 8
22.3
26. 7

29. 8
26. 9
22.9
20. 7
21. 0

3. 4
2. 5
-. 6
-. 6
.1

4. 6
3. 9
-1. 2
-1. 3
. 2

604
514
390
364
411

1, 110
1,060
909
881
936

123,
124,
124,
125,
126,

188
149
949
690
485

1935
1936
1937
1938
1939

58. 3
66. 2
71.0
65. 7
70. 4

56. 3
62. 6
67. 3
64. 6
67. 6

5. 1

29. 3
32. 8
35. 2
34.0
35. 1

21. 9
23. 5
25. 1
25. 0
25. 8

2. 0
3. 6
3. 7
1. 1
2. 9

3. 4
5. 4
5. 2
1. 7
4. 1

458
516
551
506
537

1,020
1, 139
1, 172
1, 100
1, 180

127,
128,
128,
129,
131,

362
181
961
969
028

1940
1941
1942
1943
1944

76. 1
93.0
117. 5
133. 5
146. 8

71. 9
81. 9
89. 7
100. 5
109. 8

7.8

6. 6
6. 8

37. 2
43. 2
51. 3
59. 3
65. 4

26.9
29. 0
31. 5
34. 7
37. 7

4. 2
11. 1
27. 8
33.0
36. 9

5. 5
11. 9
23. 7
24. 7
25. 1

576
697
871
976
1,061

1,255
1, 420
1,584
1,627
1,676

132,
133,
134,
136,
138,

122
402
860
739
397

1945
1946
1947
1948
1949

150. 4
160. 6
170. 1
189.3
189. 7

121. 7
147. 1
165. 4
178.3
181. 2

8. 1
15. 9
20. 6
22. 7
24. 6

73. 2
84. 8
93. 4
98. 7
96. 6

40.4
46.4
51. 4
56. 9
60.0

28.7
13. 5
4.7
11.0
8. 5

19. 1
8.4
2. 8
5. 8
4. 5

1,075
1, 136
1, 180
1,291
1,272

1,639
1,607
1,511
1,561
1,553

139,
141,
144,
146,
149,

928
389
126
631
188

1950
1951
1952
1953
1954

207. 7
227. 5
238. 7
252. 5
256. 9

195. 0
209. 8
219. 8
232. 6
238. 0

30. 4
29. 5
29. 1
32. 9
32. 4

99.8
110. 1
115. 1
118. 0
119. 3

64.9
70. 2
75. 6
81. 8
86. 3

12. 6
17. 7
18. 9
19. 8
18. 9

6. 1
7. 8
7.9
7. 8
7. 4

1,369
1,474
1,520
1,582
1,582

1,647
1, 664
1,680
731
714

151,
154,
157,
159,
162,

683
360
028
636
417

1955
1956
1957
1958
1959

274. 4
292. 9
308. 8
317. 9
337. 3

256. 9
269. 9
285. 2
293. 5
313. 8

39. 6
38. 5
40. 4
37. 3
43. 4

124. 8
131. 4
137. 7
142. 0
147. 6

92. 5
100.0
107. 1
114. 2
122. 8

17. 5
23.0
23. 6
24. 4
23. 4

6. 4
7.9
7. 6
7. 7
6. 9

1, 660
742
804
826
1, 906

1, 791
1,847
1,860
1, 846
1,906

165,
168,
171,
174,
176,

270
176
198
054
947

!___

6.3

6. 9
5.7
6. 7
9. 7
7.0

^om^ption expenditures on a 1959 base.
L i t l V X l V/l \HXKJ

V,illl/VVA

kJ l/C* UV>w5 C*O \J 1~ */ KJLl.lf

A. y V ^ V J I U - V A I H ^

i l l t t O I » - U / Cii-I-AVl. -LA-Cb W Cl/XJ. y AiXC/XUvXCS diXlXXvivX IO^v^CS

d/UlOB>vl>

N O T E . --Quarterly

data available beginning 1939; annual from 1929. Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.

Estimates of consumption expenditures for years
between benchmarks and quarterly consumption expenditure estimates rest chiefly on the trends shown
by the Census Bureau's Annual Survey of Manufactures and retail sales figures by kind of store, Federal
Reserve Board data for department stores, State
sales tax reports, and other source data.
For information on seasonal adjustments, see discussion under Gross National Product or Expenditure, and National Income.

Relation to other series.—Estimates of personal
consumption expenditures will show much the same
trends from quarter to quarter as the figures for total
retail sales. However, personal consumption expenditures also include a wide variety of services and
such items as food produced and consumed on farms
which are outside of retail trade. Conversely, retail
trade includes some commodity items, such as building materials and trucks, which are not part of personal consumption expenditures.

The estimate of personal net saving and the net
claims estimate of the Securities and Exchange Commission differ in level and trend. The chief reason
for the difference is the inclusion in the personal saving series (and not in the net claims estimates) of net
purchases of nonf arm residences and net increases in
persons' equities in farms and other unincorporated
businesses. (For a detailed reconciliation of the two
series, see table V-9 in U.S. Income and Output,
which is carried forward each year in the July issue
of the Survey.)
Uses and limitations.—The estimates of personal
consumption expenditures represent a generally useful, reliable measure of trends in consumer purchases.
They may be used to study trends in the ratio of
wages, or more generally of income, to expenditure,

and to review the division of the national output between consumer takings, business capital formation,
and government defense or other expenditures.
The estimates of personal saving are among the
least satisfactory of the significant series which appear in the national income accounts. They are the
residual from two larger estimates. The errors and
limitations present in the hundreds of series, developed for other purposes, which must be used at
present in estimating the national income do not
completely cancel out. To this extent these errors
are transmitted into the saving estimate. Quarterto-quarter changes for recent periods are, however,
subject to revision as better data become available.
References.—See above, under National Income.

FARM INCOME
Description of series.—There are two major concepts of farm income. One relates to all the people
who live on farms and the incomes they receive from
nonfarm as well as farm sources. The other views
agriculture as a business and measures the gross and
net income received by farm operators from farming. The Agricultural Marketing Service of the Department of Agriculture prepares estimates relating
to both concepts.
Estimates of "income received by the total farm
population" are available only on an annual basis,
back to 1910 for income from agricultural sources,
but only to 1934 for income from nonagricultural
sources. Income of the farm population "from agricultural sources" covers the net income of farm operators from farming, including the inventory change,
plus farm wages received by farm resident workers.
Income "from nonagricultural sources" includes earnings from nonfarm employment plus interest, dividends, rents, and royalties from nonfarm investments. Transfer payments are excluded.
Farm operators' gross and net farm income and
farm production expenses are estimated annually
from 1910 and quarterly from 1929. "Eealized gross"
farm income of farm operators is the sum of (1)
cash receipts from farm marketings, (2) the value of
farm products consumed directly in farm households,
(3) gross rental value of farm dwellings, and (4)
Government payments to farmers. Farm "production expenses," w^hich now account for about two-

thirds of gross farm income, are the aggregate of
all current farm operating expenses and overhead
costs to farm operators. Farm operators' "Net income, excluding net change in inventories" is the
remainder of realized gross farm income after farm
production expenses have been deducted; and "Net
income, including net change in inventories" takes
into account changes in farmers' holdings of animals
and crops. The "Net income per farm including net
change in inventories" is calculated by dividing the
U.S. totals by estimated numbers of farms based on
the 1954 Census of Agriculture definition.
Statistical procedures.—Since the average farm
family receives about a third of its total net income
in the form of earnings from employment in nonagricultural occupations or as returns from investment in nonfarm property, the measurement of these
items is obviously important as a supplement to the
regular measures of farm income. Estimates of income received by the farm population from nonagricultural sources are tied to benchmark estimates obtained from sample surveys for several scattered
years, and are interpolated or extrapolated for other
years on the assumption that changes in the farm
population's share of total nonagricultural income
are proportionate to changes in the farm population as a percentage of the total population. Since
the first benchmark surveys were for the years 193436, the series starts there and does not extend back
to 1910 along with the series on farm income. Totals

Farm Income, 1947-60
(Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
40

REALIZED GROSS FARM INCOME

NET FARM INCOME (INCL.NET CHANGE IN INVENTORIES)
I

1947

i i

1948 1949

i i

1950 1951

i i

1952 1953 1954

i i

1955 1956 1957 1958 1959

I960

SOURCE OF DATA: DEPARTMENT OF AGRICULTURE

derived from various surveys covering the years 1941,
1946,1949,1950, and 1955 have also been used either as
benchmarks or as supplementary check data.
For the computation of gross farm income, the
estimates of cash receipts from marketings are based
on information collected by the Department of Agriculture on the quantity sold and average prices received by farmers for the various farm commodities.
The current estimates of monthly crop marketings are
based on estimated production, the normal percentage
of the crop sold, and the usual seasonal movement to
market, supplemented by available current data on
market receipts. For most of the important livestock
items, current reports on production or market receipts are available and are used to estimate current
livestock marketings. The estimates of cash receipts
from marketings are later revised as more complete
data on production, crop-year sales and monthly
marketings become available. The value of farm
products consumed directly in farm households is
estimated on the basis of information obtained from
farmers (annually for important products and less

frequently for other products) on the volume of home
consumption, valued at prices received by farmers
for the sale of similar products. The gross rental
value of farm dwellings is designed to represent the
amount which would have to be paid if the dwellings
were rented separately from the farms. Government
payments to farmers comprise all Federal payments
made directly to farmers in which a sale or title transfer to the Government is not involved—at the present time, Soil Bank, conservation, wool, and Sugar
Act payments. Net Commodity Credit Corporation
loans and purchase-agreement deliveries are included
in cash receipts from marketings.
The estimates of farm production expenses of farm
operators are based on about 40 separate series.
Some of the operating expense series are based on
data obtained in the Censuses of Agriculture, with
interpolations for intercensal years; others are based
on special surveys and trade information. Depreciation charges on building's, motor vehicles, and
other farm machinery and equipment are estimated
annually as the amount which farmers would have

Farm Income
Income received by total
farm population

Year

From
nonagricultural
sources

From
From agriculall
tural
sources sources 1

Income received by farm operators from farming

Realized gross

Total 2

Net income

ProducCash
tion
ExcludIncludreceipts expenses ing net
ing net
from
change in change in3
marketinventory inventory
ings

Net income per farm
including net change
in inventories 4
Current
prices

Billions of dollars

1959
prices 5

Dollars

1929

7.0

13.9

11. 3

7. 6

6. 3

6. 1

943

1,766

1930
1931
1932
1933
1934

5.3

5. 1
4.0
2. 5
3.0
3. 4

1. 9

11. 4
8. 4
6. 4
7. 1
8. 5

9. 1
6. 4
4. 7
5.3
6. 4

6. 9
5. 5
4. 4
4.3
4. 7

4.5
2.9
1. 9
2.8
3.9

4.3
3.3
2. 0
2. 6
2.9

650
506
305
382
434

1,303
1, 177
831
1,021
1, 026

1935
1936
1937
1938
1939

7. 9

5.9

2. 0
2.3

7. 1
8. 4

6. 8
5. 1
5. 2

2. 5
2.3
2.5

7. 7
7. 9

4. 6
5. 1
5. 2
4.3
4. 4

4.3

9. 3
7.4
7. 7

5. 1
5. 6
6. 1
5.8
6. 2

778

5.0

9. 7
10.7
11. 3
10. 1
10. 6

5. 3

7.3

643
911

675
697

1, 809
1,495
2, 056
1,596
1,675

1940
1941
1942
1943
1944

8.0
10. 6
14.9
17.4
17. 8

5.3
7. 5
11. 1
13.2
13. 4

2. 7
3. 1
3.8
4. 2
4. 4

11. 0
13. 8
18. 8
23. 4
24. 4

8.4
11. 1
15. 6
19. 6
20. 5

6. 7
7. 7
9.9
11. 5
12. 2

4.3
6.2
8.8.
11.9
12. 2

4. 6
6.6
9.9
11.8
11. 8

720
1,044
1,600
1,942
1, 967

1,714
2,320
3, 101
3,377
3, 246

1945 __ _
1946
1947
1948
1949

18. 2
21.4
22.4
24.9
19.9

14. 0
17. 1
17. 5
19.8
14. 7

25. 8
29. 7
34. 4
34. 9
31. 8

21. 7
24.8
29. 6
30. 2
27. 8

12. 9
14.5
17.0
18.9
18. 0

12. 9
15. 2
17. 3
16. 1
13. 8

12. 4
15. 3
15. 5
17. 8
12. 9

2,
2,
2,
3,
2,

3,
3,
3,
3,
2,

1950
1951
1952
1953
1954

21. 0
23. 7
23. 4
21. 1
20. 2

15. 7
18. 1
17.3
15. 1
14. 4

5.3

32. 5
37. 3
37.0
35.3
33. 9

28. 5
33.0
32. 6
31. 1
30. 0

19. 3
22. 2
22. 6
21.4
21. 7

13. 2
15. 2
14. 4
13. 9
12. 2

14. 0
16.3
15.3
13.3
12. 7

2, 479
2,951
2,829
2,502
2, 440

2, 916
3, 173
3,010
2,690
2, 596

. 19. 8
20. 1
20. 2
22. 2
20. 4

13. 5
13. 4
13. 6
15. 8
13. 6

6.3
6. 7
6. 6
6. 4

33. 3
34. 6
34. 4
38. 2
37. 5

29. 6
30. 6
29.8
33. 5
33. 1

21. 9
22. 6
23. 4
25. 2
26. 2

11. 5
12. 0
11. 0
13. 0
11. 3

11. 8
11. 6
11. 8
14. 0
11.8

2,313
2, 338
2, 426
2, 952
2,548

2,461
2, 461
2, 476
2, 952
2,548

1955
1956
1957
1958
1959

-_ _
_

4.3
4.9

5. 1
5. 2
5. 6
6. 1
6.0
5.8

6.8

8.9

6. 0
4.4
4.5

080
574
648
065
259

296
677
221
523
689

1
Including change in inventory of crops and livestock valued at the average price for the year. Net income of farm operators from farming and farm wages received
by farm resident workers.
2 Cash receipts from marketings, Government payments, and nonmoney income furnished by farms.
3 Data prior to 1946 differ from "Farm proprietors' income" on pages 9 and 12 because of revisions by the Department of Agriculture not yet incorporated into
the national
income accounts of the Department of Commerce.
4
The number of farms is based on the 1954 Census of Agriculture definition. The numbers (in millions) are 4.7 for 1958 and 4.6 for 1959.
5
Income
in current prices divided by the index of prices paid by farmers for items used in family living on a 1959 base.
6
Series on income from nonagricultural sources begins in 1934.
Source: Department of Agriculture.

had to pay if they had replaced, at prices prevailing
during the year, the amount of plant and equipment
used up during the year. Estimates are also made
for taxes on farm property, interest on outstanding
indebtedness, and net property-insurance premiums.
The net change in inventories reflects physical
changes in all livestock and crops on farms, except
crops under CCC loan, with the changes valued at
average prices for the year.
Annual estimates are made of the number of farms,
based on benchmark data from the Censuses of Agriculture adjusted for incompleteness. (In the 1954
Census of Agriculture the underenumeration was 8.1
percent for number of farms and 5.4 percent for land
in farms.) National estimates for intercensal years
are the sum of separate State estimates. They are
based on data which vary from State to State.
Estimates of cash receipts from farm marketings
are adjusted for seasonal variation and expanded to
an annual rate in one operation by the usual ratioto-moving-total method. The normal quarterly distribution of cash receipts in recent years has been
21 percent in the first quarter, 20 percent in the second quarter, 27 percent in the third quarter, and 32
percent in the fourth quarter—requiring some fairly
large seasonal adjustments.
Except for cash receipts, however, monthly or
quarterly information on farm income and expenses
is insufficient for the direct application of ordinary
methods of seasonal adjustment. Quarterly data are
generally available with respect to changes in the
price factors underlying both expenses and nonmoney income, but information on the quantities involved is available only on an annual basis. While
cash receipts can be seasonally adjusted in the usual
manner, therefore, the other quarterly estimates are
interpolated from annual data largely in terms of
price changes, with the quantity factors either held
constant throughout the year or varied in some reasonable manner.
Relation to other series.—The series on net income
of farm operators including net change in inventories
is conceptually the same as farm proprietors' income
in the national income series (see p. 9), although
some variations exist prior to 1946 because of differences in the timing of revisions.
The Department of Agriculture also publishes estimates of the net income originating in agriculture,
regardless of who receives it, of the net cash income

of farm operators and the farm population, omitting nonmoney income, and of the net income of
persons engaged in agriculture.
Uses and limitations.—The estimates of farm operators' realized gross farm income are for the most
part based on a comprehensive body of basic data
and are considered to be reasonably accurate. The
estimates of farm production expenses, however, are
based in part on incomplete data, less frequently collected, and may be subject to a fair-sized margin of
error. Any errors in the expense estimates are fully
reflected in the estimates of net income of farm operators.
Information on total farm income and on net income per farm and per capita is useful as a general
indicator of the economic well-being of a broad sector of the economy. Its usefulness is limited, however, because of a wide variation in type-of-farming
operations and in size of farms. Some segments of
the farm economy may prosper at the same time that
other segments are seriously distressed. In order to
supply more detailed data on how the different segments of the farm economy are affected by changing
prices of farm products and of farm production
items, the Agricultural Research Service has developed data on farm costs and returns for 32 of the
more important type-of-farming areas, and several
more are being developed. The Agricultural Marketing Service has also developed some preliminary
estimates of income for commercial and noncommercial farms separately.
References.—The basic release of the farm income
data is The Farm Income Situation, published four
times a year by the Agricultural Marketing Service.
The annual series are also published, with other principal series relating to agriculture, in the Department of Agriculture's annual Agricultural Statistics.
The methods used to estimate farm operators' income
are described in detail in Major Statistical Series of
the U.S. Department of Agriculture, Volume 3—•
Gross and Net Farm Income, published in 1957. The
methods used for the quarterly estimates of farm
operators' income in terms of seasonally adjusted annual rates are described in an article by Ernest W.
Grove in the July 1954 issue of Agricultural Economic Research, published by the Agricultural Marketing Service. The individual studies of commercial family-operated farms by type and location are
published annually by the Agricultural Research
Service in Farm Costs and Returns.

CORPORATE PROFITS
Description of series.—The corporate profits and
related series of the Office of Business Economics,
Department of Commerce, contains profits estimates
for past years and recent quarters for all United
States corporations organized for profit. Data are
shown for broad industry groups, and estimates are
made of the distribution of profits between dividends
and retained earnings, as well as corporate tax liability (Federal and State corporate income and excess profits taxes).
The national income concept of profit is used in
these series. Dividends received by corporations are
deducted from profits (and dividends) to obtain
unduplicated totals reflecting income originating in
United States corporations. Profits are calculated
inclusive of depletion, which is not considered an
element of capital consumption in the national income and product accounts. Capital gains and losses
are eliminated from profits because they do not measure gains or losses originating from current produc-

tion. Adjustments for international flows affecting
profits are made. In these respects the national income measure of profits differs from those commonly
used in company reports and shown in, for example,
the Internal Revenue Service tabulation of profits
and the financial report series of the Federal Trade
Commission and Securities and Exchange Commission.
A significant revision of the corporate profits series
was undertaken for the period 1948-1957. This involved a change in the data base used in evaluating
the effects of Internal Revenue Service audit on the
underlying income tax statistics, the inclusion of an
allowance for profits of speculative builders, and
certain minor statistical improvements.
Statistical procedures.—The annual data published
in. the corporate profits series are, except for the most
recent year or two, based upon tabulations by the
Internal Revenue Service of unaudited corporate income tax returns. The data in these tabulations are

Corporate Profits, 1947-60
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
60

PROFITS BEFORE TAXES
50

PROFITS AFTER TAXES

UNDISTRIBUTED PROFITS
1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 I960

SOURCE OF DATA: DEPARTMENT OF COMMERCE

Corporate Profits
[Billions of dollars]
Corporate profits (before taxes) and inventory valuation
adjustment l
Period

Manufacturing
All industries
Total

Durable
goods
industries

Nondurable goods
industries

Corporate profits after
taxes

Transportation, com- All other
munications, indusand public
tries
utilities

Corporate
Corporate
profits
Dividend Undisincome tax
before
liability
paytaxes
Total
tributed
ments
profits

1929

10. 1

5. 1

2. 6

2. 5

2. 0

1930
1931
1932
1933
1934

6. 6
1. 6
-2. 0
-2.0
1. 1

3. 9
1. 3
-. 6
-. 5
.9

1. 5
.0
-1. 1
-. 5
.2

2. 4
1. 3
.4
.0
.7

1. 2
.6
.2
.1
.4

1.
-.
-1.
-1.
-.

5
2
5
5
2

3. 3
-. 8
-3. 0
.2
1. 7

1935
1936
1937
1938
1939

2. 9
5.0
6. 2
4.3
5. 7

2.
3.
3.
2.
3.

0
1
6
2
2

.9
1. 7
1. 7
.7
1. 6

1. 1
1. 4
2. 0
1.4
1. 5

.5
.7
.8
.6
1. 0

.
1.
1.
1.
1.

5
2
8
5
5

3. 1
5. 7
6. 2
3.3
6.4

1940
1941
1942
1943
1944

9. 1
14. 5
19. 7
23. 8
23. 0

5. 4
9. 3
11. 7
13. 7
13.0

3. 0
6. 3
7. 1
8.0
7. 3

2.
3.
4.
5.
5.

1. 3
2.0
3. 5
4. 4
3. 9

2. 4
3. 2
4. 5
5. 7
6. 1

9. 3
17.0
20. 9
24. 6
23. 3

2.
7.
11.
14.
12.

1945
1946
1947
1948
1949

18.
17.
23.
30.
28.

9. 5
8. 4
12. 8
16. 8
15. 3

4. 5
2. 1
5. 3
7.4
7.9

5. 0
6. 3
7.4
9. 4
7. 4

2.
1.
2.
2.
2.

8
8
1
9
9

6. 1
7. 1
8. 7
11. 2
10. 1

1950
1951
1952
1953
1954

35. 7
41.0
37. 7
37. 3
33. 7

20.
24.
21.
21.
18.

4
4
1
4
4

12.0
13. 5
11. 8
12. 1
10. 1

8.4
10. 9
9. 3
9. 3
8. 3

4.
4.
4.
4.
4.

0
5
8
9
4

1955
1956
1957
1958
1959

43. 1
42. 0
41. 7
37.4
46. 6

25.
23.
22.
18.
24.

0
5
9
8
8

14. 2
12. 6
13. 1
9. 2
12. 8

10. 8
10.9
9. 8
9. 6
12. 0

5. 4
5. 6
5. 5
5. 4
6. 3

4
3
6
8
2

3
0
5
6
7

3. 0

9. 6

1.4

8.3

5.8

2. 4

2. 5
8
5 -1. 3
4 -3. 4
5 -. 4
7
1.0

5.
4.
2.
2.
2.

5
1
6
1
6

-3.0
-5. 4
-6. 0
-2. 4
-1. 6

2. 2
4. 3
4. 7
2. 3
5.0

2.
4.
4.
3.
3.

9
5
7
2
8

-. 7
-. 2
.0
-.9
1. 2

8
6
4
1
9

6. 5
9. 4
9. 5
10. 5
10. 4

4.
4.
4.
4.
4.

0
5
3
5
7

2. 4
4.9
5. 2
6.0
5. 7

19. 0
22. 6
29. 5
33.0
26. 4

10. 7
9. 1
11. 3
12. 5
10. 4

8.3
13. 4
18. 2
20. 5
16. 0

4. 7
5.8
6. 5
7. 2
7.5

3. 6
7. 6
11. 7
13. 3
8. 5

11.3
12.0
11. 8
11. 0
11. 0

40.6
42. 2
36. 7
38. 3
34. 1

17.
22.
19.
20.
17.

9
4
5
2
2

22. 8
19. 7

9. 2
9. 0
9.0
9. 2
9. 8

13. 6
10. 7
8.3
8. 9
7.0

12. 8
12.9
13. 3
13. 2
15. 5

44.
44.
43.
37.
47.

21.
21.
20.
18.
23.

8
2
9
6
2

23.
23.
22.
19.
23.

9
7
2
7
0

.
.
.
.
.

1. 0
1. 4
1. 5
1.0
1. 4

17. 2
18. 1
16. 8
0
5
3
1
8

11.
12.
12.
12.
13.

2
1
6
4
4

11. 8
11. 3
9. 7
6. 7
10. 5

See p. 9 for inventory valuation adjustment.
Source: Department of Commerce.

adjusted to make them comparable, statistically and
conceptually, with other entries in the national income accounts. The important conceptual accounting adjustments are suggested by the statement above
of differences between the conventional accounting
concept of profit and the national income concept.
Another important adjustment of the tabulations is
the audit adjustment which makes allowance for
additional profits disclosed by auditing of the income
tax returns by Internal Revenue. Mutual financial
intermediaries are not considered part of the corpo-

rate universe for national income purposes, and
profits of these companies are removed from the tax
return tabulations.
The estimates for the most recent year or two and
for quarters are made by extrapolating the benchmark estimates, i.e., the latest available estimates
based upon Internal Revenue tabulations of corporation tax returns. The extrapolators for manufacturing corporations are based upon the FTC-SEC
Quarterly Financial Report; those for Federally
regulated industries are obtained from reports to the

Federal regulatory agencies; and those for other industries are based upon nongovernmental surveys
and upon miscellaneous sources of varying reliability. When the Internal Revenue tabulations of tax
returns for a given year become available, the estimates for that year are revised to conform to the
Internal Revenue tabulations.
The adjustment of corporate profits estimates for
seasonal variation is difficult because of the volatility of profits. A diversity in seasonal patterns exists
among the various industries, so the adjustment is
made in considerable industry detail. While for most
industry components the ratio-to-moving-average
method has been used, a clearer seasonal pattern
has been obtained in certain industries by using
linear regressions of the unadjusted data for the
given quarter of each year against trend, plus cyclical values for the same period. The seasonal patterns in corporate profits have been subject to periodic revision as the postwar experience lengthened.
The correction for seasonal variation is made in terms
of the corporate profits share of national income (i.e.,
corporate profits before tax, plus inventory valuation
adjustment) which experience has shown to permit
a more meaningful basis of adjustment than profits
before taxes alone.
The magnitude of the corporate profits seasonal
correction may be seen in the comparison of unadjusted and seasonally adjusted quarterly data for the
year 1959 shown in the table at the bottom of this
page.
Corporate income tax liability estimates are derived by multiplying the quarterly estimates of profits before taxes by annual tax ratios. For current
quarters the ratios of taxes to profits before tax for
the latest full year are used with any necessary adjustments, such as to allow for new Federal tax legislation. Quarterly net corporate dividends are estimated from a sample of publicly reported dividends

which account for three-fourths of total dividend disbursements. Other profit components are estimated
as residuals: profits after tax being equal to profits
before tax less corporate income tax liability, and undistributed corporate profits being equal to profits
after tax less dividends.
Relation to other series.—The corporate profits
series is designed primarily to measure the contribution of corporate profits to the national income. It
is as consistent with the concepts of the national income accounts, and wTith other series which are a part
of those accounts, as the basic data permit, and can
be used in conjunction with the other national income series (e.g., net interest, proprietors' and rental
income, compensation of employees, etc.) with confidence in their conceptual comparability.
The corporate profits series is based upon reports
from companies rather than establishments. This results in some noncomparability with series based
upon reports from establishments. Furthermore,
surveys based upon the establishment unit of classification are not confined to establishments of corporations but include establishments of other forms
of organization as well. The corporate profits series,
or any other series based upon company reports, cannot safely be assumed to be directly comparable with
these establishment series unless the reports on the
different bases have been reconciled. These factors
are more important when series for specific industries are being compared, however, than when the
broad aggregates published in Economic Indicators
are compared.
The series on expenditures for new plant and
equipment (p. 25) and sales and inventories (p. 65 ff.)
are also based primarily upon company reports.
The plant and equipment expenditures and the sales
and inventories series, however, cover unincorporated
as well as incorporated businesses. These three series

Seasonal Correction, Corporate Profits and Inventory Valuation Adjustment, 1959
[Billions of dollars]
Quarters

I
II

III
IV

Seasonally adjusted
quarterly rates
11. 4
12. 6
11. 2
11. 4

Unadjusted quarterly
rates
10. 6
12. 8
11. 4
11. 7

Correction, quarterly
rates (seasonally adjusted minus unadjusted)
0. 8
-. 2
2
-. 3

cover closely related economic phenomena and can
be used to supplement one another analytically.
Uses and limitations,—The corporate profits series
is an important economic indicator, reflecting the
state of health of a substantial part of the Nation's
business community. Certain limitations of the
series require that it be used with caution, however.
(1) As its title indicates, the series measures only
the profits of corporations. It does not, therefore,
portray fully the profit position of all business.
(2) The corporate profits series contained in
Economic Indicators are rather broad aggregates
and need to be supplemented by data pertaining to
specific industries for some analytical uses.
(3) The quarterly corporate profits estimates are
less reliable than the annual estimates, especially the

annual estimates for periods more than two years
prior to the current year. There are two principal
reasons for this: (a) quarterly income statements,
upon which the quarterly series must be based, are
inherently less reliable than annual income statements ; and (b) wide gaps in the financial data available quarterly for some industries, such as trade and
services, make the underlying basis of the quarterly
estimates weaker than that of the annual estimates.
References.—See above under National Income. A
complete statement of the methods and the sources
of data used in preparing these estimates is presented
in pages 92-97 of the 1954 National Income Supplement to the Survey of Current Business, and pages
93-94,100-101, and 105 of U.S. Income and Output,
also a supplement to the Survey of Current Business.

GROSS PRIVATE DOMESTIC INVESTMENT
Description of series.—Gross Private Domestic In- ginning with 1946 are described in U.S. Income and
vestment is one of the major components of gross Output.
national product. The series measures gross fixed
The quarterly estimates of producers' durable
investment and net changes in business inventories. equipment and change in business inventories are reGross fixed investment (or gross fixed capital forma- vised annually to reflect more complete data than
tion) is defined as all newly produced durable goods were available when the initial estimates were made.
(i.e., those with an average life exceeding one year) The revisions in the "Change in business inventories"
acquired by their ultimate business users. New res- series have sometimes been quite sizable, and have
idential construction purchased by owner-occupants resulted primarily from revisions in the basic book
is also included because homeownership is treated as value inventory aggregates.
a business in the national accounts. The "Change
Statistical procedures.—The principal method of
in business inventories" series measures physical estimation used for the "Producers' durable equipchanges in business inventories valued at average ment" series has been the commodity-flow technique.
prices prevailing during the year.
In brief > this technique consists of (1) analyzing total
Separate statistical series are published for "Fixed manufacturing output to obtain an estimate of the
investment" (which in turn consists of separate series proportion that consisted of finished producers' durfor "New construction" and "Producers' durable able goods, (2) tracing the flow of those goods
equipment") and for "Change in business inven- through distribution channels, (3) measuring their
tories." The "New Construction" series used in com- distributive costs, and (4) adding the estimate of
puting gross private domestic investment is based those distributive costs to manufacturers' sales value
on the private construction component of the new to arrive at an estimate of the costs of those goods to
construction series described below, with the addi- their purchasers.
For the years 1929-39,1947, and, to a lesser extent,
tion of estimates for oil- and gas-well drilling.
A major revision of the "Producers' durable equip- 1954, data available from the manufacturers and
ment" series was undertaken in conjunction with the trade censuses made it possible to carry out the compreparation of the 1954 National Income Supple- modity-flow technique of estimating purchases of
ment to the Survey of Current Business. The esti- producers' durable equipment in greater detail than
mates were revised for the entire period since 1929. was possible in other years. New benchmark estiFurther significant revisions covering the period be- mates of producers' durable equipment for 1954 were

Gross Private Domestic

Investment

[Billions of dollars]
Fixed investment
Total
gross
private
domestic
investment

Year

Change in business
inventories

New construction 1
Total
Residential
nonfarm

Total

Other 2

Producers'
durable
equipment

Total

Nonfarm

1929

16. 2

14. 6

8.7

3. 6

5. 1

5.8

1930
1931
1932
1933
1934

10. 3
5. 5
.9
1. 4
2.9

10. 6
6. 8
3. 5
3. 0
4.0

6.2
4.0
1.9
1.4
1. 7

2. 1
1. 6
.6
.5
.6

4. 1
2. 4
1. 2
1.0
1. 1

4.5
2.8
1. 6
1. 6
2.3

-.
-1.
-2.
-1.
-1.

4
3
6
6
1

-. 1
-1. 6
-2.6
-1. 4
.2

6. 3
8. 4
11. 7
6. 7
9.3

5.4
7. 4
9. 5
7. 6
8.9

2. 3
3. 3
4. 4
4.0
4. 8

1. 0
1. 6
1. 9
2.0
2. 7

1.3
1. 7
2. 5
2.0
2. 1

3.
4.
5.
3.
4.

1
2
1
6
2

.9
1.0
2.2
g
'.
4

.4
2. 1
1. 7
-1. 0
.3

13. 2
18. 1
9.9
5. 6
7. 1

11.0
13. 6
8. 1
6.4
8. 2

5.5
6. 6
3. 7
2.3
2. 7

3.0
3. 5
1. 7
.9
.8

2. 5
3. 1
2.0
1. 4
1.9

5.5
6.9
4.3
4.0
5. 4

2. 2
4. 5
1.8
-. 8
-1.0

1. 9
4.0
.7
-. 6
-. 6

10. 4
28. 1
31. 5
43. 1
33.0

11. 5
21. 7
32. 0
38. 4
36.0

3.8
11.0
15. 3
19. 5
18. 8

1. 1
4.8
7. 5
10. 1
9. 6

2. 7
6. 3
7. 7
9.3
9. 2

7.7
10. 7
16. 7
18.9
17.2

-1. 1
6. 4
-. 5
4.7
-3. 1

-. 6
6. 4
1.3
3.0
-2. 2

50.0
56.3
49.9
50.3
48.9

43. 2
46. 1
46. 8
49.9
50. 5

24. 2
24.8
25. 5
27. 6
29. 7

14. 1
12. 5
12. 8
13.8
15. 4

10. 1
12.3
12.7
13.8
14.3

18.9
21. 3
21. 3
22. 3
20.8

6.8
10. 2
3. 1
.4
-1. 6

6.0
9. 1
2. 1
1. 1
-2. 1

63. 8
67. 4
66. 1
56.0

58.
62.
64.
58.
66.

34.9
35. 5
36. 1
35.4
40. 3

18. 7
17. 7
17.0
18.0
22.3

16. 2
17.8
19. 0
17.4
18.0

23.
27.
28.
23.
25.

5.8
4.7
1. 6
-2. 5
5.9

5.5
5. 1
.8
-3. 6
5.4

___

1935
1936
1937
1938
1939
1940
1941
1942
1943
1944

_ .

1945_
1946
_
1947_
1948__ _
1949
1950
1951.
1952
1953
1954_

_ _ _
_
_

_._ ._
__

1955
1956
1957
1958
1959

72.0

1
7
6
5
1

1
2
5
1
8

1.7

1.8

Revisions in the "New construction" series shown on p. 58 have not yet been incorporated into these accounts.
Includes petroleum and natural gas well drilling, which are excluded from "New construction" estimates on p. 58.
NOTE.—Quarterly data available beginning 1939; annual from 1929. Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
2

developed on the basis of Census data, and it has
been possible to develop annually for 1955-57 "secondary" benchmark estimates primarily from data
collected by the Bureau of the Census in its annual
sample surveys of manufacturers. Annual estimates
for the years 1955-57 take into account both the secondary benchmarks and the series used in making
the quarterly estimates. The quarterly estimates and
the annual estimates of producers' purchases of durable equipment for 1957 and later years are derived
largely by interpolation and extrapolation based on

the OBE-SEC Plant and Equipment Expenditures
Survey (see next section). The Survey results are
adjusted for comparability with estimates of producers' durable equipment, principally by the exclusion of expenditures on new plant, the inclusion of
expenditures on new farm equipment and the addition of expenditures for passenger cars to the extent
that they are not covered. The Plant and Equipment
Expenditures Survey has been used to estimate the
quarterly movement of producers' durable equipment
for the period 1947 to date. The quarterly estimates

Gross Private Domestic Investment, 1947-60
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS

GROSS PRIVATE DOMESTIC INVESTMENT

NEW CONSTRUCTION
\ J^

•

PRODUCERS DURABLE EQUIPMENT

CHANGE IN BUSINESS INVENTORIES
-20

1947

1948 1949 1950

1952

1953

1954 1955

1956 1957

1958 1959 I960

SOURCE OF DATA: DEPARTMENT OF COMMERCE

for earlier years are based mainly on selected industry sales data from the Department of Commerce
Monthly Industry Survey, except for the 1950-52
period when data from the National Production Authority were utilized.
The primary source for estimates of changes in
the nonfarm portion of business inventories is reported accounting data on the book value of inventories at the beginning and end of the period for
which the estimates are made. Because inventory
calculation by individual business firms varies widely
in method, numerous adjustments in the reported
data are necessary to arrive at an estimate consistent
with the basic concept. The principal adjustment is
that of removing the price-change element in the
reported figures and revaluing inventory change in
current dollars.
Relation to other series,—The relationship between the "Producers' durable equipment" series and
the estimated equipment series implied in Expenditures for New Plant and Equipment, to which it is
most closely related, is discussed in the following
section.

The "Change in business inventories" series is most
closely related-to the estimates of "Inventories," discussed on pages 65 to 72. A basic difference between
these series is that the series on business inventory
change, included here, measures changes in inventories over a period of time, whereas the inventories
series presented below measures the level of inventories at a given point in time. The series also differ
conceptually in their measurement of inventories:
the inventories series is based upon data as reported
by the reporting companies, whereas for the inventory-change series OBE adjusts the reported data
to reflect a uniform method of valuation.
The producers' durable equipment series and the
change in business inventories series are seasonally
adjusted primarily by use of the ratio-to-movingaverage method. Modifications in this seasonal adjustment method are made when appropriate, and
improvements in the seasonal adjustment factors are
instituted when experience suggests that they are
desirable. The magnitude of the gross private domestic investment seasonal correction may be seen in
the table on page 7.

Uses and limitations.—The gross private domestic
investment series measure an economic factor of crucial importance in business conditions.
Limitations in the "Fixed investment" series can
be traced to limitations in the data on which they
are based, especially in the data available for current quarters. The absence of reliable current data
on government purchases of producers' durable
equipment constitutes a special problem when the
commodity-flow method of estimation is used. The
limitations of the data on manufacturers' commodity
sales and on new plant and equipment expenditures
affect the current estimates of investment in producers' durable equipment. Nevertheless, the discrepancies between initial quarterly estimates and the
revised estimates based on more complete data have
generally not been great.
The figures on "Change in business inventories,"
although rough estimates to a considerable degree, are
useful indicators of the physical volume change in

inventories during the period under review. A serious limitation in the series is inherent in the basic
method of calculation that must be used. The estimates are calculated as the difference between large
and possibly volatile inventory totals at two points
in time. Even small errors in the estimates of total
inventories can lead to large relative errors in the estimates of inventory change. This limitation contributes appreciably to the difficulty of determining
seasonal patterns in the quarterly changes in business inventories. Because comprehensive accounting
data on inventories become available only after a lag
of about two years, current estimates of inventory
change are based upon less satisfactory data than
are the estimates for past years.
References.—See above, under National Income.
For a full discussion of the concepts and statistical
methods, see particularly pages 43-45 and 122-138
in the 195Jf National Income Supplement, and pages
82-85 and 97-98 of U.S. Income and Output.

EXPENDITURES FOR NEW PLANT AND EQUIPMENT
Description of series.—The series on expenditures
for new plant and equipment, published jointly by the
Office of Business Economics (Department of Commerce) and the Securities and Exchange Commission,
measures the expenditures by all private business
(except agriculture, real estate, professions, and institutions) for new plant, machinery, and equipment for which the reporting companies maintain depreciation accounts. Expenditures charged
off as current expense are excluded. Estimates are
made quarterly for actual plant and equipment expenditures and anticipated expenditures for the two
succeeding quarters and the calendar year. These
estimates are based upon information contained in
annual reports of all corporations registered with
SEC and quarterly reports from a group of registered corporations which make over 90 percent of the
capital expenditures by registered corporations; and
in annual and quarterly reports by a group of unregistered mining, manufacturing, distribution trade,
service, and construction companies to OBE and by
railroads, motor carriers, water carriers, and pipeline
companies to the Interstate Commerce Commission.
In 1960 a large expansion was made in the sample
of financial organizations.
The last major revision in the series was published

61731 O—60

in two parts, the revision for manufacturing industries in the December 1951 issue of the Survey of
Current Business and the revision for nonmanuf acturing industries in the August 1952 issue. The revision established a new set of benchmark data and
introduced improvements in the estimating procedures being used. For example, information contained in the annual mandatory financial reports
(Form 10K) to SEC was used for the first time and
adjustments were made for biases arising out of
changes in the business population.
Statistical procedures.—The benchmarks for the
estimates were developed by applying weights derived from reports to the Internal Revenue Service
for the tax year 1948 to sample expenditure figures
for the benchmark period (i.e., 1948). Actual plant
and equipment expenditures data were not available
for the universe of all firms, so it was necessary to
derive a benchmark by using pieces of related information wThich were complete—specifically, total
assets for corporations and total sales and operating
receipts for unincorporated business. Ratios of
plant and equipment expenditures to total assets or to
sales and operating receipts were computed from
the reporting sample and from other sources. These
ratios were multiplied by IRS universe assets, or

Expenditures for New Plant and Equipment, 1947-60
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
40

COMMERCIAL AND OTHER
PUBLIC UTILITIES
TRANSPORTATION
I

1947 1948 1949 1950 1951

I 1

1952 1953 1954 1955 1956 1957 1958 1959 I960

SOURCE OF DATA: SECURTIES AND EXCHANGE COMMISSION, AND DEPARTMENT OF COMMERCE

sales and operating receipts, to determine universe
estimates of plant and equipment expenditures in
1948.
The estimations of year-to-year and quarter-toquarter movements in these expenditures are made by
extrapolating the benchmark estimates on the basis of
the annual ajid quarterly reports received by SEC,
OBE and ICC. Essentially, the estimation procedure is as follows: given a universe estimate for a
specified period, the universe estimate for the next
period is derived by multiplying the given universe
estimate by a link relative which is derived from
aggregates for the given period and the period following for a matched sample of reporting companies. The group of reporting companies accounts
for at least two-thirds of aggregate investment in
plant and equipment, although the sample is not
randomly selected. Coverage varies considerably by
industry groups. Sample expenditures as percent of
estimated universe expenditures in the third quarter
of 1957 were as follows: manufacturing 79; mining

37; railroads 99; transport,, except railroads, 50; public utilities 82; communications 95; commercial 11;
and total 66.
The factors used for adjusting plant and equipment expenditures data due to seasonal fluctuations
are based on the ratio-to-moving-average technique.
These seasonal adjustment factors are applied to both
the estimates of anticipated expenditures for a given
quarter and the estimates of actual expenditures for
that quarter. The seasonally adjusted estimates of
anticipated expenditures are further adjusted for
the systematic biases of underestimation or overestimation that have been found in the reported data.
The seasonal adjustment factors and the bias adjustment factors have remained relatively stable for
any given quarter during recent years, but they are
modified as circumstances warrant. The bias adjustment factors are applied as multipliers; the seasonal adjustment factors are applied as divisors. The
magnitudes of the adjustments made in the 19531958 quarterly estimates are suggested by the aver-

ages of the adjustment factors used for those years
shown in the table below.
Relation to other series.—The OBE-SEC series on
actual plant and equipment expenditures utilizes the
same definitions of investment as those of the Census
of Manufactures, Census of Business, and the annual
survey of manufactures of the Bureau of the Census.
There are substantial differences between the Census
Bureau data on expenditures for plant and equipment and the OBE-SEC series. Most important, the
OBE-SEC series supplies both actual and anticipatory data on a quarterly and annual basis, whereas
the Census data relate only to annual expenditures
in past periods. In addition, the OBE-SEC series
obtains reports on companywide outlays, whereas
the Census Bureau obtains reports on outlays of
establishments. Thus, the Census Bureau's annual
series on manufacturers covers only establishments
whose primary activity is manufacturing, whereas
the OBE-SEC quarterly and annual manufacturing
series covers all activities, manufacturing as well as
nonmanufacturing, of companies whose primary activity is manufacturing; and excludes manufacturing activities of companies whose primary activity is
nonmanufacturing. Finally, the OBE-SEC estimates cover all industries except agriculture, professions and institutions, and real estate, whereas the
Census estimates cover only manufacturing, mining
(1954 and 1958) and the wholesale, retail and service
trades 1958).
The OBE-SEC series, covering all industries, differs somewhat in concept from the "Producers' durable equipment" and "New construction" components
of gross private domestic investment (see p. 22). Unlike the latter series the OBE-SEC series is confined
to nonagricultural industries, and excludes expenditures of institutions and professional persons and
plant and equipment outlays charged off as current

expenses; it is based on a survey requesting information on expenditures charged to capital account, for
which depreciation accounts are maintained. The
current estimates of investment in producers' durable
equipment are for the most part derived indirectly
by extrapolating benchmarks on the basis of percent-change estimates developed from the equipmentexpenditures portion of the OBE-SEC series; and
the estimates of new private construction are developed from both direct and indirect sources.
The OBE-SEC series on manufacturers' expenditures for new plant and equipment is directly comparable in classification and scope with the CensusOBE series on manufacturers' sales, new orders,
and inventories (see p. 70). It has a different scope
from the Federal Trade Commission-Securities and
Exchange Commission financial reports series in
manufacturing, mainly in that the FTC-SEC estimates of balance sheet and income statement items
cover only corporations, and a different degree of consolidation is involved.
Uses and limitations.—This series is one of the
very few economic series in which estimates of anticipated events as well as historical events are made.
The series measures economic phenomena of great
importance in the analysis of business conditions.
An estimate of anticipated expenditures for a period
can be different from actual expenditures for the
same period either because the estimating procedures
and statistical techniques employed are faulty or because the anticipated expenditures were in fact—for
any number of reasons—not made or were made in
greater amount. Except in a few periods in the past
when marked differences between anticipated and
actual expenditures for the same period have occurred as a result of unanticipated developments of
major importance, such as the outbreak of Korean
hostilities, both the annual data and the quarterly

Average Adjustment Factors, Expenditures for New Plant and Equipment, 1953-58
Bias Adjustment Factors
Quarter

First
Second
Third
Fourth

First anticipated expenditures estimate for
a given quarter

Second anticipated expenditures estimate for
the same quarter

0.98
1. 01
. 98
1.07

0. 94

93
1. 03

Seasonal adjustment factors for the same quarter

0. 90
1.03
. 99
1.07

Expenditures for New Plant and Equipment
[Billions of dollars]
Transportation

Manufacturing

Total

1939
1945
1946
1947
1948
1949

_
_ _

1950
1951
1952
1953
1954

. . . __

1955
1956
1957
1958
1959

_
_

Public
utilities

Mining

Total i

Year

Durable
goods

Nondurable goods

Railroads

Other

Commercial and
other 2

5.51

1.94

0.76

1. 19

0. 33

0.28

0.36

0.52

2.08

8. 69
14. 85
20. 61
22. 06
19. 28

3. 98
6. 79
8. 70
9. 13
7. 15

1. 59
3. 11
3. 41
3. 48
2.59

2. 39
3. 68
5. 30
5. 65
4.56

.38
.43
. 69
. 88
.79

.55
. 58
. 89
1. 32
1. 35

.57
. 92
1. 30
1. 28
.89

.50
. 79
1. 54
2. 54
3. 12

2.70
5. 33
7. 49
6. 90
5.98

20. 60
25. 64
26. 49
28.32
26. 83

7. 49
10.85
11.63
11.91
11.04

3. 14
5. 17
5.61
5. 65
5.09

4.36
5. 68
6.02
6. 26
5.95

. 71
. 93
.98
.99
.98

1. 11
1. 47
1.40
1. 31
.85

1. 21
1.49
1. 50
1.56
1.51

3. 31
3. 66
3.89
4.55
4. 22

6. 78
7. 24
7.09
8.00
8.23

28. 70
35.08
36.96
30.53
32. 54

11.44
14.95
15.96
11. 43
12. 07

5. 44
7. 62
8.02
5.47
5. 77

6.00
7.33
7.94
5.96
6. 29

.96
1. 24
1. 24
.94
. 99

.92
1. 23
1. 40
. 75
.92

1. 60
1. 71
1. 77
1. 50
2.02

4.31
4.90
6. 20
6.09
5. 67

9. 47
11.05
10. 40
9.81
10. 88

Excludes agriculture.
Includes trade, service,finance,communications, and construction.
NOTES.—Thesefiguresdo not agree precisely with the plant and equipment expenditures included in the gross national product estimates of the Department of
Commerce. The main difference lies in the inclusion in the gross national product of investment by farmers, professionals, and institutions, and of certain outlays
charged to current expense.
Detail will not necessarily add to totals because of rounding.
Data on expenditures for new plant and equipment are not available for the years prior to 1939 and for the years 1940-44.
Sources: Securities and Exchange Commission and Department of Commerce.
2

anticipatory data that have been adjusted for seasonal variations and systematic biases have proved a
reliable indicator of the overall trend of capital expenditures. The survey has generally reflected the
cyclical turning points in the postwar period.
There are two principal deficiencies in the statistical procedures employed in making the estimates of
expenditures for new plant and equipment. One of
these, mentioned above, is the inadequacy of the sample for some industries. Within the past few years,
however, the coverage in some of these industries—
notably: mining, finance, service, construction, trade,
and transportation other than rail and air—has been
strengthened considerably. The second deficiency is

that in several areas (e.g., trade, services and construction) the benchmark data are either out of date
or of limited reliability.
References.—These estimates are published quarterly in Department of Commerce and Securities and
Exchange Commission press releases and in the
Survey of Current Business. Annual data and quarterly data for the preceding four years are shown in
Business Statistics, the biennial statistical supplement to the Survey of Current Business. For a fuller
description of the methods employed in making the
estimates and of the latest revisions in the series, see
the December 1951 and August 1952 issues of the
Survey of Current Business.

EMPLOYMENT, UNEMPLOYMENT, AND WAGES
LABOR FORCE
Description of series.—Each month the Bureau of
Labor Statistics of the Department of Labor publishes estimates of the labor force and of total employment and unemployment. In addition to the
overall figures, detail is presented on the characteristics of employed and unemployed persons, such as
age, sex, color, marital status, and veteran status.
Employed persons are further subdivided into those
employed in agriculture and in nonagricultural pursuits, by class-of-worker (wage and salary workers,
self-employed, etc.), by broad occupation groups, by
hours worked during the survey week and by reasons
for part-time work. Duration of unemployment is
shown for the unemployed. Although most of the
statistics are presented for the United States as a

whole, an increasing amount of material is being published for major geographic regions.
The information is obtained from a sample survey
of households, conducted by the Bureau of the Census, which represents all persons in the United States
except those living in institutions (such as prisons
or homes for the aged). On the basis of responses to
interviewers, all persons 14 years and over in the
sample households are classified as employed, unemployed, or not in the labor force for the calendar
week containing the 12th of the month. Prior to
July 1955, the reference week was the calendar week
containing the 8th of the month; this change was
made to improve comparability with other series.
Counted as employed are all persons who, during

Status of the Labor Force, 1947-60
(Monthly data.
MILLIONS OF PERSONS
80

Seasonally adjusted)

TOTAL LABOR FORCE

CIVILIAN LABOR FORCE

NONAGRICULTURAL EMPLOYMENT
40

AGRICULTURAL EMPLOYMENT
UNEMPLOYED

I . . 1 .. I , , ! , , ! , . I , . I , . I

1947

I M I M I M I , i,, i . . i . i T M T M I , , lyTiTTi.717:VMI'MTI'X7>I..i,,i,• h • I,• i , . I , . i , . I , , i , , i • , i , , I , , 1 , , i , , i , , I , , i , , i . • i . , 1 , , i , , L . i , . I , . i , , i • . i •

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 I960

SOURCE OF DATA: DEPARTMENT OF LABOR

Status of the Labor Force

Year

Total labor
force (including
armed
forces) *

Civilian employment
Civilian
labor
force

Agricultural

Total

Unemployment

Nonagricultural

Number

Percent of
civilian
labor force

Thousands of persons 14 years of age and over
1,550

3.2

140
110
770
670
990

4,340
8,020
12, 060
12, 830
11, 340

8. 7
15. 9
23. 6
24. 9
21. 7

32,
34,
36,
34,
36,

150
410
480
530
140

10, 610
9,030
7,700
10, 390
9,480

20. 1
16.9
14.3
19.0
17.2

9, 540
9, 100
9,250
9,080
8, 950

37,
41,
44,
45,
45,

980
250
500
390
010

8, 120
5,560
2, 660
1,070

14. 6
9. 9
4. 7
1. 9
1. 2

820
250
812
117
423

8,580
8,320
8,256
7,960
8,017

44,
46,
49,
51,
50,

240
930
557
156
406

1,040
2,270
2, 356

2,325
3,682

1.9
3.9
3.9
3.8
5.9

59,
60,
61,
61,
60,

748
784
035
945
890

7, 497
7,048
6, 792
6,555
6,495

52,
53,
54,
55,
54,

251
736
243
390
395

3,351
2,099
1, 932
1,870
3,578

5. 3
3. 3
3. 1
2.9
5. 6

62,
64,
65,
63,
65,

944
708
011
966
581

6,718
6,572
6,222
5, 844
5,836

56,
58,
58,
58,
59,

225
135
789
122
745

2, 904
2,822
2,936
4,681
3,813

4. 4
4. 2
4.3
6.8
5. 5

1929

49, 440

49, 180

47, 630

10, 450

37, 180

1930___
1931___
1932___
1933
1934

50,
50,
51,
51,
52,

080
680
250
840
490

49,
50,
51,
51,
52,

820
420
000
590
230

45,
42,
38,
38,
40,

480
400
940
760
890

10, 340
10, 290
10, 170
10, 090
9, 900

35,
32,
28,
28,
30,

1935
1936
1937
1938
1939

_
_
_
__

53,
53,
54,
54,
55,

140
740
320
950
600

52,
53,
54,
54,
55,

870
440
000
610
230

42,
44,
46,
44,
45,

260
410
300
220
750

10, 110
10, 000
9,820
9,690
9,610

1940
1941
1942
1943 _
1944

56,
57,
60,
64,
66,

180
530
380
560
040

55,
55,
56,
55,
54,

640
910
410
540
630

47,
50,
53,
54,
53,

520
350
750
470
960

1945
1946
1947 _
1948
1949

65,
60,
61,
62,
63,

290
970
758
898
721

53,
57,
60,
61,
62,

860
520
168
442
105

52,
55,
57,
59,
58,

1950
1951
1952
1953
1954

64,
65,
66,
67,
67,

749
983
560
362
818

63,
62,
62,
63,
64,

099
884
966
815
468

1955
1956__1957
1958 __
1959

68,
70,
70,
71,
71,

896
387
744
284
946

65,
67,
67,
68,
69,

848
530
946
647
394

670

1
Data for 1940-52 revised to include about 150,000 members of the armed forces who were outside the United States in 1940 and therefore were not enumerated in
the 1940 census and were excluded from 1940-52 estimates.
NOTE.—Monthly labor force data available beginning March 1940. Annual data are averages of monthly figures. Data for 1947 forward adjusted to reflect new
definitions of employment and unemployment adopted in 1957.
Source: Department of Labor.

the survey week, were either (a) "At work"—those
who did any w^ork for pay or profit, or those who
worked without pay for 15 hours or more on a family
farm or business; or (b) "With a job but not at
work"—those who did not work and were not looking for work but had a job or business from which
they were temporarily absent because of vacation,
illness, industrial dispute, bad weather, or because
they were taking time off for various other reasons.
Prior to 1957, this group also included persons on layoff who had definite instructions to return to work

within 30 days of the date of layoff (now classified as
unemployed) and those waiting to start new wage
and salary jobs within 30 days (now classified either
as unemployed or, if currently in school, as not in
the labor force).
Included as unemployed are persons who did not
work at all during the survey week and were looking
for work. Also included as unemployed are those
who did not work at all during the survey week and
(a) were waiting to be called back to a job from
which they had been laid off; or (b) were waiting

to report to a new wage or salary job scheduled to
start within the following 30 days (and were not in
school during the survey week) ; or (c) would have
been looking for work except that they were temporarily ill or believed no work was available in their
line of work or in the community. Prior to 1957,
part of group (a) above (those whose layoffs were
for definite periods of less than 30 days) were classified as employed, "with a job but not at work," rather
than as unemployed, as were all of the persons in
group (b) above (waiting to start new jobs within
30 days).
The sum of the employed and the unemployed constitutes the civilian labor force. The total labor
force also includes members of the Armed Forces
stationed either in the United States or abroad. All
other civilians 14 years of age and over are classified
as "not in the labor force" (housewives, students, retired or disabled persons, those doing less than 15
hours of unpaid family work, and the voluntarily
idle).
The sample survey described above was started in
March 1940. Prior to that date there was no periodic
direct enumeration of the labor force. The estimates
shown for 1939 and earlier years were prepared by
the Bureau of Labor Statistics, using information
such as the 1930 and 1940 Censuses of Population,
and employment trends from BLS and Department
of Agriculture series for intervening years. The
techniques used in preparing the estimates for the
earlier years are described in "Labor Force, Employment, and Unemployment, 1929-39: Estimating
Methods," which appeared in the July 1948 issue of
the Labor Department's Monthly Labor Review.
The labor force survey, initiated by the WPA, was
conducted by the Bureau of the Census from 1942
through June 1959 as part of the Current Population
Survey. Since July 1959, the Bureau of Labor Statistics has been responsible for monthly statistics on
the labor force, with the Bureau of the Census acting
as collecting and compiling agent.
Statistical procedures.—Since the survey was instituted in 1940, there have been a number of revisions in the series. In November 1943 an improved
sample design was introduced and the estimates were
revised back to 1940 using the 1940 Census of Population figures as a benchmark for that date. Starting
in July 1945, a modified set of questions was used
which resulted in a more nearly complete count of
employed persons; the estimates were again revised

back to 1940 to take account of the improvement in
interviewing procedure. Beginning in 1953, 1950
population counts were introduced into the estimating procedure and no backward revisions were made.
The 1953 changes raised the levels of labor force,
total employment, and agricultural employment by
about 350,000, affecting primarily the figures for
totals and for males.
In January 1954 the sample was spread from 68
sample areas to 230 sample areas (although retaining
the overall size of about 21,000 interviewed households) in the interest of improving the reliability of
the estimates. The estimates for 1953, which were
deficient in certain respects, were revised to achieve
greater comparability with those from the new
sample. Estimates prior to 1953 are not exactly comparable with those from the expanded sample, although for most major items the series can be regarded as reasonably consistent.
Beginning in July 1955, survey data cover the calendar week containing the 12th of the month: previously the survey covered the week containing the
8th.
In May 1956, the sample was expanded from 230
to 330 sample areas and from 21,000 to 35,000 interviewed households, to improve further the reliability
of the statistics and to provide a basis for more detailed data for the Nation as a whole and for geographic regions. Full comparisons of the results
from tlie 230- and 330-area samples—available for
both April and May of 1956—showed only small differences either in major categories or in detailed
groups. For most purposes, therefore, the data from
the expanded sample since May 1956 can be used as
a continuous series with earlier statistics.
Starting in January 1957, certain limited changes
were made in the definitions of employment and unemployment, following a comprehensive interagency
review of concepts in this field. The changes involved primarily a transfer of two small groups from
the employed to the unemployed classification, as
described in the definitions given above. Statistics
for major categories on both the old and new bases
have been published by the Bureau of the Census for
1957 and adjustments carried back to 1947. Starting
in 1960, data include Alaska and Hawaii. This inclusion has resulted in an increase of about 300,000
in the labor force, four-fifths of this in nonagricultural employment. The levels of other labor force
categories were not changed appreciably.

A composite estimating procedure is used. This
method involves the preparation of two intermediate
estimates for a given item each month: (1) an estimate obtained by applying to the final estimate for
the preceding month an estimate of month-to-month
change based on those parts of the sample common to
the 2 months (roughly 75 percent of the sample
units) ; and (2) an estimate based on the data for the
current month only, inflated to independent estimates
of the population by age, sex, and color (previously the sole estimation procedure used). The final estimate is then obtained from a weighted average of the
intermediate estimates (1) and (2), achieving a substantial reduction in sampling variability for most
items.
The panel of respondents is rotated. A single
household is interviewed for four consecutive
months, dropped for eight months, and picked up
again for the next four months. Thus roughly threefourths of the sample is identical from one month to
the next, and one-fourth is added; and in any given
month about one-half the sample is identical with
that interviewed in the same month a year earlier.
The major labor force categories (using the definitions as revised in 1957) have been seasonally adjusted back to 1947 using a ratio-to-moving-average
method with a provision for "moving" adjustment
factors to take account of changing seasonal patterns.
The methods used are described in "New Seasonal
Adjustment Factors for Labor Force Components"
by Morton S. Kaff and Robert L. Stein in the August
1960 issue of the Monthly Labor Review. Factors in
use during 1960 for the years 1958, 1959, and 1960
indicate the range of magnitude of the seasonal fluctuations in the series. (See table on p. 33.)
Relation to other series.—The labor force estimates
of employment, obtained from a sample of households, differ in a number of respects from estimates
of employment prepared from reports of employing
establishments and based on payroll records, such
as the Bureau of Labor Statistics current nonagricultural employment series and the Department of
Agriculture estimates of farm employmemt. Because of these differences and variability in sampling
and response, changes in the various series may not
always be consistent. The labor force estimates provide information on the work status of the population : persons employed at more than one job, either
because they hold more than one job concurrently or
because they changed jobs during the survey week,

are counted only once and are classified according
to the job at which they work the greatest number
of hours during the week. Estimates based on reports from business establishments and farms, on the
other hand, count persons who work for more than
one establishment as many times as the number of
different payrolls on which their names appear. The
labor force estimates relate to all types of workers,
including domestic service workers, unpaid family
workers (working 15 hours or more during the week)
and self-employed persons, groups which are excluded from nonagricultural employment series based
on establishment reports. On the other hand, workers less than 14 years of age are excluded from the
labor force estimates whereas the payroll-based series
have no age exclusions. An additional difference
arises from the fact that some persons with a job but
not at work are likely to be included with the employed in the labor force estimates, whereas only part
of this group (those receiving pay while away from
work) are included in the payroll estimates.
For a number of reasons, the unemployment estimates are not directly comparable with statistics derived from unemployment insurance operations. In
the first place, some unemployed persons are not eligible for unemployment insurance, particularly
young persons looking for their first jobs, domestic
servants, most former State and local government
workers, agricultural workers, and persons who lost
their jobs in firms too small to be covered by the
various State unemployment insurance laws. Unemployed persons who have already received all of the
benefits to which they are currently entitled are not
included in the insured unemployment figures. Also,
the qualifications for drawing unemployment insurance differ from the definition of unemployment used
in the labor force series. For example, some persons
with a job but not at w^ork and persons working only
a few hours during the week are eligible for unemployment insurance, but are classified in the labor
force series as employed. Furthermore, some persons may be reported to the Census Bureau interviewers as not looking for work even though they
may be registered at public employment offices, consider themselves available for jobs and may be eligible for unemployment insurance.
Uses and limitations.—One of the chief advantages
of the household labor force, employment and unemployment estimates is that they provide the only
comprehensive figures covering the employment

Seasonal Adjustment Factors for the Labor Force and Major

Components, to be Used for the Period
Employment

Month

Civilian labor
force
Total

January
February
March
April
Mav
June
July
_
August
September
October
November
December

97. 7
98. 0
98. 4
99. 0
100. 1
102.4
102. 7
101. 8
100. 4
100. 6
100. 0
99. 1

96.9
97. 0
97. 7
98. 6
100. 1
101.8
102. 4
102. 3
101.2
101.8
100. 5
99.4

status of the whole population. The data are collected monthly and published promptly. The estimates of unemployment, in particular, are used as
a current indicator of the general health of the economy.
Another advantage of the household enumeration
method of obtaining labor force information is the
possibility of relating work status to other personal
and family characteristics. Classifications are made
not only by broad occupation and industry groups,
but also by sex, age, and color, by marital status and
number of children. For example, changes in the
employment of married women, and of married
women with small children, can be studied. By asking supplementary questions from time to time other
information concerning the family can be similarly
estimated, such as family incomes and the amount
of migration during the course of a year. All these
analyses throw light on the changing size and composition of the labor force.
It should be noted that in the classification used,
anyone who did any work for pay or in his own
business or profession during the survey wreek (or
did 15 or more hours of unpaid work in a family
enterprise) is counted as employed. Also counted
as employed are those who did not work nor look
for work but who had definite jobs from which they
were temporarily absent. (The numbers in these
groups are shown separately.) Thus the survey
indicates roughly the total demand for jobs: the
number of persons who have jobs (the employed) and
the number seeking jobs (the unemployed). To
understand current trends, the summary figures need
to be supplemented by the detailed data. The infor-

Agricultural

81.3
81. 8
86. 2
93. 6
106. 0
118.2
117.9
111. 1
109. 9
112. 0
97. 4
85.0

1958-60

Unemployment
Nonagricultural
98.6
98. 7
99. 0
99. 2
99. 5
100.0
100. 7
101. 3
100. 2
100.7
100. 9
101.0

Number

114.2
116. 3
111. 1
103. 1
99. 4
113. 2
105. 0
91. 2
83. 9
78.8
90. 0
93.5

Rate
116. 7
118. 6
112. 9
104. 1
99. 2
110.4
102. 3
89. 5
83. 5
78.2
89. 9
94.4

mation provided regularly on hours worked shows
the number of full-time and part-time employed.
Starting in May 1955, information is also provided
monthly on the extent of part-time employment, and
the amount of such part-time employment arising
from economic causes; these data were available only
quarterly or less frequently prior to that date.
Monthly data on changes in the duration of unemployment add meaning to the total count of unemployment.
Since the estimates are prepared from a relatively
small sample, the user should not attach significance
to very small changes. Estimates of sampling variability in the data are regularly published. The relative standard sampling error for the 330-area sample
is estimated at about 0.3 to 0.5 percent for summary
estimates of the civilian labor force, total employment, and nonagricultural employment; and roughly
2.5 to 3.5 percent for agricultural employment and
total unemployment.
The user should also keep in mind that the information is collected by personal interview, usually
with the housewife. She may not, in some cases, have
exact knowledge for all members of the household.
For this reason, as well as because of the relatively
small size of the sample, only broad occupational and
industry groupings of the data are published. Finally, the measurement of unemployment is in some
cases difficult, since it depends in part on the attitude of the person interviewed. The classification
of a person as unemployed has been made as objective as possible, by using the criterion of "looking for
work," but no method has been as yet developed

which will insure consistent reporting of activity
month after month. Some marginal (usually very
small) groups may be reported as unemployed in
some circumstances whereas they would be reported
as not in the labor force in others. Most of these
problems of measurement affect persons whose attachment to the labor force is casual or intermittent, especially married women and youths still in
school looking for part-time jobs.
References.—Monthly estimates are first released
by the Bureau of Labor Statistics in the Monthly
Report on the Labor Force which presents the household labor force series, the employer nonagricultural
employment series, and the insured unemployment
series in a combined release. The same labor force

data, together with additional details, are published
monthly in Employment and Earnings which also
includes explanatory notes describing the data and
the methodology, indicating the reliability of the estimates and summarizing the seasonal adjustments.
A more detailed technical note is available on request
to the BLS. Annual summaries and supplementary
information on work experience during the preceding
year, multiple jobholding, etc., are published by the
BLS in a series of "Special Labor Force Reports."
Related demographic data from the Current Population Survey are published by the Bureau of the
Census in special reports (Current Population Reports, Series P-60, Consumer Income; Series P-20,
Population Characteristics).

UNEMPLOYMENT INSURANCE PROGRAMS
Description of series.—Weekly data on claims for market areas are provided, including State programs,
benefits under employment security programs, ob- UCFE, and UCX.
tained as a byproduct of operations, represent a
Initial claims are notices of the beginning of a
measure of unemployment among workers covered by period of unemployment for which benefits may later
the programs. The series are compiled by the Bureau be claimed. These data are also available on a weekly
of Employment Security from reports from State basis for each State. This series provides a measure
employment security agencies covering State pro- of the volume of new unemployment emerging under
grams, the program of unemployment compensation the State, UCFE, and UCX programs. Data on infor Federal employees, and the ex-servicemen's un- itial claims are not added to the insured unemployemployment compensation program. Figures for ment count, however, since such claims do not certify
earlier years also include Korea veterans filing to completed weeks of unemployment.
under the Veterans' Readjustment Assistance Act of
Exhaustions are a count of the number of claim1952 and World War I I veterans who filed for bene- ants who have drawn the final weekly benefit payfits under the Servicemen's Readjustment Act of ment to which they are entitled in a given benefit
1944, but exclude claims filed under the temporary year under provisions of the State' unemployment
extension of unemployment compensation during the insurance laws.
1958 recession. The data for "all programs" also inCovered employment under all programs includes
clude in the "national totals the program of unem- the employment of workers covered by State proployment insurance administered by the Railroad grams, and the Railroad Retirement Board programs
Retirement Board. "State programs" exclude the from the beginning of the series, the employment of
Federal employee, servicemen, and railroad industry Federal government workers since 1955, and the
programs.
armed forces since 1958, when the UCX program
Insured unemployment represents the number of became operative. Although coverage of the Federal
covered workers totally or partially unemployed dur- and State unemployment insurance programs has exing a given week for which they have filed unemploy- panded until it now includes about 80 percent of all
ment insurance claims. Weekly insured unemploy- wage and salary workers in nonagricultural indusment figures are available for each State for the tries, certain groups of workers are excluded—
State, Federal employee (UCFE) and ex-service- namely, self-employed persons, unpaid family workmen's (UCX) programs. Weekly averages for the ers, and persons employed in specific industries, such
calendar month are also provided. In addition, for as agriculture, domestic service, many nonprofit orthe week ending nearest the fifteenth of each month, ganizations, and most State and local governments.
insured unemployment figures for 145 major labor Also, within the "covered" industries, employees of

firms below a specified size (fewer than four employees) are excluded in many States. Prior to 1958,
members of the armed forces are excluded from the
count of covered employment because it was impossible to estimate the numbers actually eligible in any
given year under the various programs which were
in effect beginning with World War II. Between
September 1940 and July 1947, an estimated 16.5
million different individuals served in the Armed
Forces. These persons, upon discharge, could have
drawn benefits under the Servicemen's Readjustment
Act between September 1944 arid September 1951 if
unemployed and otherwise eligible. Between June
1950 and January 1955, an estimated 6.8 million individuals served in the armed forces during the
Korean conflict. These individuals, upon discharge,
could have drawn benefits under the UCV program
(Unemployment Compensation for Veterans) beginning October 1952. The rights for most such veterans under this program were terminated in July
1958. However, a small number, depending upon

their discharge dates, were still eligible for UCV
benefits through January 1960. Persons eligible for
benefits under the UCX program include ex-servicemen who entered the armed forces after January
31,1955, as well as veterans who entered prior to that
date but were discharged after October 27,1958.
The annual covered employment series is the average of 12 mid-monthly employment figures for the
year. In 1959, workers covered by State programs
accounted for about 87 percent of the total. Insured
unemployment as a percent of covered employment
(shown here for the State programs only) relates
insured unemployment to the average covered employment for a preceding 12-month period, the period approximating the time when the wage credits
were earned on which benefits were based.
Under State programs, the average weekly check
is obtained by dividing the number of weeks of unemployment compensated for total unemployment
into the amount of benefits paid for total unemployment.

Rates of Insured Unemployment Under State Programs, U.S., 1949-60
(Monthly data.

Percent of covered employment)

PERCENT
10

SEASONALLY ADJUSTED

0 I •'I• • l•» I• •I• • I• • l••I• • I• 'I••l• • I» •I • • I••l •• IM IM 1 , •l, , I•,I , II. , [• •I ,, I ,II, , l••I ,• I . J , j , , I, J ,J ,j ,,I ,, I• , I,J , , [, J ,, I,

1949

1950

I95T

1952

1953

1954

1955

1956

l?571958

1959

I960

SOURCE OF DATA: DEPARTMENT OF LABOR

Unemployment Insurance Programs
State programs

All programs

Year

Insured
Covered unemployment
employ(weekly 2
ment *
averages)

Benefits
paid 2

Thousands

Mil. dol.
534.
358.
350.
80.
67.

Insured
unemployment

Initial
claims

Insured
unemployment
Exhaus- as percent of
covered emtions
ployment

Weekly average, thousands

Average
weekly
check

Total

Mil. dol. Dollars

1,282
814
649
147
105

214
164
122
36
29

50
30
21
4
2

5. 6
3.0
2. 2
. 5
.4

574. 9
878. 5
785. 0
328. 7
269. 8

589
1,295
1,009
1,002
1,979

116
189
187
210
322

5
38
24
20
37

2. 1 445. 9
4. 3 1, 094. 9
3. 1 775. 1
3.0
789.9
6. 2 1, 736. 0

18. 77
18. 50
17. 83
19.03
20. 48

1, 605
1,000
1,069
1, 065
2,048

1, 467. 6
862. 9
1, 043. 5
1, 050. 6
2, 291. 8

1,503
969
1,024
995
1,865

236
208
215
218
303

36
16
18
15
34

4. 6 1, 373. 1
2.8
840. 4
2. 9 998. 2
2. 8 962. 2
5.2 2, 026. 9

20. 76
21.09
22. 79
23.58
24. 93

1, 395
1,318
1,567
2,766
1,856

1,
1,
1,
3,
2,

1,254
1,212
1,450
2,509
1,682

226
226
268
370
281

25
20
23
50
33

3. 5 1, 350.
3.2 1, 380.
3. 6 1, 733.
6. 4 3, 512.
4. 4 2, 279.

25.
27.
28.
30.
30.

1940
1941
1942
1943
1944

24, 291
28, 136
30, 819
32, 419
31,714

1,331
842
661
149
111

1945
1946
1947
1948
1949

30,
31,
33,
34,
33,

087
856
876
646
098

720
2,804
1, 805
1,468
2,479

2,
1,
1,
2,

1950
1951
1952
1953
1954

34,
36,
37,
38,
36,

308
334
006
072
617

1955
1956
1957
1958
1959

40,
42,
43,
44,
45,

014
758
447
501
727

560.
540.
913.
892.
651.

7
8
4
5
2

Benefits paid

2
6
0
5
7

518.
344.
344.
79.
62.

7
3
1
6
4

3
7
9
7
0

10.
11.
12.
13.
15.

56
06
66
84
90

04
02
17
58
41

1
Includes workers under the State, UCFE (effective January 1955), and RR programs; beginning with calendar year 1958, also includes members of the armed
forces since such persons, upon discharge—if unemployed and otherwise qualified—are eligible for benefits under the program of Unemployment Compensation for
Ex-servicemen (UCX). This program became effective October 27,1958.
2 Includes State, TJCFE, RR, UCX, UCV, and SRA programs.
NOTE.—Includes Alaska and Hawaii for all years. Annual data start with 1940. Monthly and weekly data on insured unemployment available beginning July
1945.
Source: Department of Labor.

Statistical procedures.—The insured unemployment figures are complete counts of completed weeks
of unemployment for which benefits are claimed (by
the filing of continued claims). The BES sums the
data reported by the State employment security
agencies and the Eailroad Retirement Board to get
national totals weekly. Generally, a continued claim
filed in a given week certifies to unemployment in the
preceding week. Therefore, the weeks of unemployment claimed in a given week are assumed to represent insured unemployment in the preceding week,
i.e., the week in which the unemployment actually
occurred.
Insured unemployment as a percent of covered employment is seasonally adjusted by a ratio-to-movingaverage method, using the same techniques as are
used in the labor force and nonagricultural employees
series, noted above. The seasonal adjustment factors

for the rate of insured unemployment, State programs, for use with data for 1958,1959, and 1960 are:
Month

Factor

January
February
March
April
May
June

129. 2
130. 3
123. 3
116.1
104. 9
95.3

July
August
September
October
November
December

93.4
81. 9
75. 6
71.1
79. 0
100. 4

Relation to other series.—For a comparison with
total unemployment, see above, under Labor Force
(p.32).

Uses and limitations.—The BES series are derived from administrative records and provide complete counts of claims-taking transactions rapidly, on
a weekly basis. The insured unemployment figures
serve two purposes as economic indicators. First,
since they are available weekly they provide the most
up-to-date information on current trends in unemployment. Second, they provide geographic detail
for labor market areas as well as for States. In using
these figures as economic indicators, however, certain
inherent limitations must be kept in mind.
The limitations of the series, as well as their unique
advantages, stem from the fact that they are byproducts of administrative records. In the first place, as
described above, workers in certain industries and
in the very small firms are not covered, at least in
some States. In addition, some groups of covered
workers may not be included in the data on insured
unemployment because they are not eligible for benefits. These groups include unemployed workers
whose previous jobs were in covered industries but
who did not earn sufficient wage credits or were not
employed the required length of time; unemployed
covered workers who are disqualified for various reasons, such as voluntary quitting without good cause,
discharge for misconduct, refusal of suitable work,
or temporary illness; persons who are eligible to receive benefits but for one reason or another do not
apply; and finally, workers who have exhausted their
benefit rights. In a period when unemployment is
substantial and of long duration, the volume of exhaustions may have an important bearing on the
magnitude of the insured unemployment levels. Unlike total unemployment, the insured unemployment
series does not include new entrants into the labor
market, who are looking for, but have not yet found
work.
These limitations vary over time as well as between States. During the years since 1939, exclusions on account of "size-of-firm" provisions have declined. Originally, State unemployment insurance
programs excluded workers in firms with fewer than
eight employees. In January 1956, amendments to
the Social Security Act resulted in coverage of workers in firms employing four or more. In addition,
changes in many State laws during these years have
resulted in the coverage of workers in firms employing fewer than four. At the beginning of 1960, seventeen States had asize-of-firm" provisions of one or
more.

Weekly data are subject to some variation from
week to week as holidays call for a rescheduling of
the claimant's appearance at the local office. The
effects of this factor, however, have been reduced
considerably since 1959, when nearly all the States
adopted procedures for adjusting "weeks claimed"
totals affected by holidays. Monthly data are presented as "average weekly volume of insured unemployment" and are not significantly affected by holiday weeks. The monthly data, however, are influenced to some extent by administrative factors.
Forty-six States and the District of Columbia operate on an "individual benefit year" basis. In such
States a worker who previously had insufficient wage
credits may become eligible for benefits when the
earnings of a new quarter become a part of his base
period. This administrative factor exerts an upward
influence on both insured unemployment and initial
claims during the first month of each quarter in
most States. Similarly, four States which operate on
a "uniform benefit year" usually show an administrative rise in insured unemployment at the beginning
of the new benefit year.
Exhaustion of benefits reflects both economic conditions and duration provisions of the various State
unemployment insurance laws. While a count of
the number of claimants who have exhausted their
benefit rights is a useful economic indicator, it is difficult to determine how long unemployment continues after the claimant has exhausted his benefits.
It may be assumed that some exhaustees will find new
employment shortly after their benefits for a given
benefit year have been exhausted, while others will
remain unemployed for varying periods of time.
Consequently, a knowledge of the number of persons
who have exhausted benefits in the past gives no indication of the number who are still unemployed,
and hence does not provide an estimate which can
be added to insured unemployment to estimate a
total count of unemployment from covered industries. Furthermore, in interpreting monthly figures
on exhaustions, the usual seasonal increase in the late
winter months should be kept in mind.
References.—The basic release of the weekly data
is the BES Unemployment Insurance Claims, which
contains initial claims as w^ell as insured unemployment for the State, Federal employee and ex-servicemen programs by States, and nationally for the Kailroad Retirement Board program. Insured unemployment for the week ending nearest the 15th of

the month is included in The Monthly Report on the
Labor Force for the States and for major labor market areas. Weekly figures, monthly averages, and
actual and seasonally adjusted insured unemployment rates are also published in the BES monthly
periodical, The Labor Market and Employment Security. Weekly data back to July 1945 are available

upon request from the BES. A comprehensive summary of technical notes, "Insured Unemployment,
Employment, and Wage Statistics: Their Source,
Nature and Limitations," appears in the March 1960
issue of The Labor Market and Employment Security. Reprints of this summary of technical notes
are available upon request to the BES.

NONAGRICULTURAL EMPLOYMENT
Description of series.—Current monthly series on them when returned, before passing the information
employment in nonagricultural establishments, with on to the BLS. To eliminate duplicate reporting, the
related information on hours and earnings (see same establishment reports are used for preparing
below), are prepared by the Bureau of Labor Sta- State, area, and national estimates.
tistics. Employment estimates are published for
Durable goods manufacturing industries include:
about 230 separate industry groups and subgroups as ordnance and accessories, lumber and wood products,
well as 8 major industry divisions (manufacturing, furniture and fixtures, stone, clay and glass products,
mining, trade, etc.). Estimates of women employed primary metal industries, fabricated metal products,
in manufacturing industries are available quarterly. machinery, transportation equipment, instruments
Employment figures represent the total number of and miscellaneous manufacturing industries. All
persons employed in nonagricultural establishments other manufacturing industries are included in the
in the continental United States during a specified nondurable manufacturing estimates. Employees of
payroll period which (for all industries except Fed- government-operated manufacturing establishments,
eral Government) is that ending nearest the 15th such as ordnance plants and shipyards, are included
of the month. Employed persons include all those under government.
who worked during or received pay for any part of
Statistical procedures.—Current estimates depend
the payroll period, including part time as well as on monthly reports from a sample of employers. The
full time, temporary as well as permanent, em- sample of about 180,000 establishments is designed
ployees. Workers on an establishment's payroll who to obtain reports from most if not all the large
are on paid sick leave, paid holiday or paid vaca- establishments in each industry but the proportion
tion, or who work a part of a specified pay period of total employment covered varies considerably
and are unemployed or on strike during the other from industry to industry. It is high (69 percent)
part are considered employed. Persons on the pay- in manufacturing, for example, and much lower in
roll of more than one establishment during the pay wholesale and retail trade (20 percent) and service
period are counted each time reported. On the other industries.
hand, persons are not considered employed who are
In order to compute total employment from the
laid off, on leave without pay, or on strike for the sample reports, month-to-month changes in the samentire pay period. Proprietors, the self-employed ple establishments are applied to a total employment
and unpaid family workers, and domestic workers in figure (benchmark) separately for each industry.
households are not included. Government employ- The benchmark figures are obtained from sources
ment statistics refer to civilian employees only, but which, singly or in combination, insure either a cominclude employees of State and local governments as plete count of employment for the specified benchwell as Federal.
mark period, or an estimate of reasonable accuracy.
Information on employment, hours and earnings This method takes advantage of benchmark data
is collected each month from a sample of establish- which are byproducts of other governmental funcments under cooperative arrangements with State tions.
agencies (primarily State employment security agenSince 1939 the basic sources of benchmark inforcies affiliated with the Bureau of Employment Se- mation have been periodic tabulations of employcurity). The cooperating State agencies mail ques- ment data by industry compiled by State agencies
tionnaires to the reporting establishments and edit from reports of establishments covered under State

Employees in Nonagricultural Establishments, 1947-60
(Monthly data.

Seasonally adjusted)

MILLIONS OF PERSONS
14

WHOLESALE AND RETAIL TRADE
DURABLE GOODS MANUFACTURING
10

NONDURABLE GOODS MANUFACTURING
CONTRACT CONSTRUCTION

1111111.111

1947

. • 1 1 1 1 1 • i , i ., i , , I . . i . i . • 1 1 . 1 . , i . ,

1948 1949

1950

,. 1 1 1 1 , • 1 1 , t , i , , 1 , , i n ,, 1 1 , 1 , 1 1 , ,

1951

1952

1953

i , i • 1 1 , , i , , , , 11 • 1 1 , i , ,

i ,i,, 1,, i,,

1954 1955

1956

,, i , , 1 , . i . ,

., i , , I , . i , .

1957 1958

,, i , 1 1 , . i , , , • i , , 1 . ,

1959 I960

SOURCE OF DATA • DEPARTMENT OF LA30R

unemployment insurance laws. Employment in
small-size establishments exempt from State unemployment insurance laws is based on data obtained
from the United States Bureau of Old-Age and Survivors Insurance. For industries not covered by
either of the two programs, benchmarks are compiled
from other sources: for example, for interstate railroads, from information reported to the Interstate
Commerce Commission; for State and local government, from data reported to the Bureau of the
Census; for the Federal Government, from data
compiled by the Civil Service Commission. Establishments are classified into the same industrial
groupings for benchmark purposes as for monthly
reporting.
The most recent benchmark adjustment was to
data for the first quarter of 1957 (published in July
1958). These revisions were carried back to the first
quarter of 1956 where appropriate. The next revision will be to benchmark data for the first quarter of
1959, which will be published early in 1961. This
benchmark revision will also incorporate a revision

in the benchmark procedure whereby for selected industries the estimates will be stratified by size of
establishment.
Establishments reporting employment information are classified into industries on the basis of their
principal product or activity. Prior to publication
of State and area data for January 1959, all national,
State and area employment, hours, and earnings
series were classified in accordance with the following: (1) for manufacturing, the Standard Industrial
Classification, 1945, and (2) for nonmanufacturing,
the Industrial Classification Code, Social Security
Board, 1942. Beginning with January 1959 (with an
overlap for 1958), State and Area series are classified under the revised Standard Industrial Classification, 1957. The national industry statistics will be
converted to the 1957 SIC early in 1961, at the time
of the revision to 1959 benchmark information.
Comparable data will be available from at least January 1958, thus providing an overlap of more than
three years.
Seasonally adjusted employment aggregates are

Nonagricultural Employment
[Thousands of wage and salary workers l]
Manufacturing, private
Year

Total

Nonmanufacturing, private

Total

Durable
goods

Nondurable
goods

Government
(Federal,
State, and
local)

Contract
construction

Wholesale
and retail
trade

17, 441

1,497

6,401

1,078

3,066

6,064
5,531
4,907
4, 999
5,552

1,000
864
722
735
874

3, 149
3,264
3,225
3, 167
3,298

Total 3

Mining

1929.

31, 041

1930.
1931.
1932.
1933.
1934.

29,
26,
23,
23,
25,

143
383
377
466
699

9,401
8, 021
6,797
7,258
8,346

16,
15,
13,
13,
14,

593
098
355
041
055

1,372
1,214
970
809
862

1935.
1936.
1937.
1938
1939.

26, 792
28, 802
30, 718
28, 902
30,311

8,907
9,653
10, 606
9,253
10, 078

408
487
363
773
238

1,
1,
1,
1,

912
145
112
055
150

5,692
6,076
6,543
6,453
6, 612

888
937
1,006
882
845

3,477
3,662
3,749
3,876
3, 995

1940
1941
1942
1943
1944

32,
36,
39,
42,
41,

058
220
779
106
534

10,
12,
15,
17,
17,

1945
1946
1947
1948
1949

40,
41,
43,
44,
43,

037
287
462
448
315

1950
1951
1952
1953
1954

44,
47,
48,
49,
48,

1955
1956
1957
1958
1959

50,
51,
52,
50,
51,

10, 534

()
4,683

()
5,394

14,
15,
16,
15,
16,

780
974
051
381
111

5,337
6,945
8,804
11,077
10, 858

5,443
6,028
6, 247
6, 304
6,253

17,
18,
19,
18,
18,

076
586
245
645
380

1,294
1,790
2, 170
1,567
1,094

6,940
7, 416
7,333
7, 189
7,260

916
947
983
917
883

4, 202
4,660
5,483
6,080
6,043

15,
14,
15,
15,
14,

302
461
290
321
178

9,079
7,739
8,372
8,312
7,473

6,222
6,722
6,918
7,010
6,705

18,
21,
22,
23,
23,

791
231
698
477
281

1, 132
1,661
1,982
2, 169
2, 165

7,522
8,602
9, 196
9, 519
9, 513

826
852
943
982
918

5,944
5,595
5, 474
5,650
5,856

738
347
303
681
431

14,
16,
16,
17,
15,

967
104
334
238
995

8,085
9,080
9,340
10, 105
9, 122

6,882
7,024
6,994
7, 133
6,873

23,
24,
25,
25,
25,

745
854
360
798
685

2,333
2,603
2,634
2,622
2, 593

9,645
10, 012
10, 281
10, 527
10, 520

889
916
885
852
777

6,026
6,389
6,609
6,645
6, 751

056
766
162
543
975

16,
16,
16,
15,
16,

563
903
782
468
168

9, 549
9, 835
9, 821
8,743
9, 290

7,014
7,068
6,961
6, 725
6,878

26,
27,
27,
27,
27,

579
586
754
182
680

2, 759
2,929
2, 808
2,648
2, 767

10, 846
11,221
11,302
11, 141
11,385

777
807
809
721
676

6,914
7,277
7,626
7,893
8, 127

1
Includes all full- and part-time wage and salary workers in nonagricultural establishments who worked during or received pay for any part of the pay period
ending nearest the 15th of the month. Excludes proprietors, self-employed persons, domestic servants, unpaid family workers, and personnel of the armed forces.
Total derived from this table not comparable with estimates of nonagricuitural employment of the civilian labor force (p. 30) which include proprietors, self-employed
id family
f i l workers,
k
d domestic
dmestic servants,
servants which count persons as employed when they are not at work
wok because of industrial disputes,
disputes bad weather
persons, unpaid
and
weather,
etc., and which are based on a sample survey of households, whereas the estimates in this table are based on reports from employing establishments.
2 Excludes Alaska and Hawaii. Total for 1959 including Alaska and Hawaii is 52,205.
3
Also includes transportation and public utilities; finance, insurance, and real estate; and services and miscellaneous not shown separately here.
* Not available.
NOTE.—Monthly data available beginning January 1939; annual from 1919.
Source: Department of Labor.

prepared by a ratio-to-moving-average method. The Implicit Seasonal Adjustment Factors for Total NonagriculEmployment for 1959 by Months
seasonal factors, prepared for "two-digit" manufacturing industries and for the nonmanufacturing in- January
99. 6
98. 5 July
August
100.1
98. 3
dustry divisions, are available from the Bureau of February
September
•.
100. 9
98.9
Labor Statistics on request. The magnitudes of the March
October
101.1
April
99.1
adjustments may be judged from the implicit
November
101. 0
May
99. 7
seasonal adjustment factors for total nonagricultural June
December
102.1
I 100.3
employment for 1959. The adjusted series prepared
Relation to other series.—For a comparison with
by summing the aggregates of the seasonally adjusted components will give slightly different results. the nonagricultural employment estimates compiled

aS a part of the labor force series, see above (p. 32). pling rather than a probability design has been used,
In addition to total employment in each industry, it is not possible to calculate the sampling variability
BLS also prepares estimates of production worker of monthly estimates. Experience with the program
employment for mining and manufacturing indus- has shown that the monthly employment data in some
tries, for construction workers in contract construc- industries tend to have an increasing bias for the
tion, and for nonsupervisory workers in public utili- successive months between two benchmarks. Alties and trade. These estimates are comparable with though this error cannot be adjusted precisely on a
the average hours and earning series (see below) current basis, average adjustment is made through
which are prepared from information reported on the the use of bias adjustment factors before publication.
same questionnaires as the employment figures.
Appropriate changes in employment levels are also
In general, BLS employment estimates are com- made, when necessary, at the next revision to new
parable with other data collected from establish- benchmarks. The comparison made for the first 3
ments, such as employment, production, and similar months of 1957, the last benchmark adjustment, for
data obtained by the Census Bureau in the manufac- example, resulted in changes amounting to 0.5 perturing censuses and annual surveys. Some differ- cent of all nonagricultural employment. The changes
ences will be found, however, especially for indi- were less than 0.5 percent for three of the eight major
vidual industries, caused chiefly by differences in defi- industry divisions; under 2 percent for two other
nitions of the industries covered, in the business units divisions; and 3.2, 3.3, and 6.4 percent for the reconsidered parts of an establishment, and in the in- maining three divisions. One significant cause of
dustrial classification of establishments.
differences between the benchmarks and the estimates
More serious differences are found between the are the changes in industrial classifications of indiBLS establishment-based series and those based on vidual firms, which are usually not reflected in BLS
reports from companies, such as financial reports on estimates until they are adjusted to new benchmarks.
profits, because the industry totals that result when Other causes are sampling and response errors.
a single industry classification is assigned to an entire
References.—Monthly summary data first appear
company differ substantially from those in which in The Monthly Report vn the Labor Force. The
each establishment of the company has been assigned basic monthly release for the employment, hours, and
to the industry of its principal activity. (See Corearnings series is the BLS Employment and Earnporate Profits, above, p. 19.)
mgs,> which contains national, State, and area estiUses and limitations,—Current employment statismates and explanatory notes. The national employtics are widely used as a timely indicator of changes
ment, hours and earnings series for 13 months are
in economic activity in various sectors of the econalso reprinted in the Monthly Labor Review. Annual
omy. Comparable information for a large number
of detailed industries is provided within a few weeks. averages for the past 6 years are contained in an
Furthermore, because of the promptness with which Annual Supplement issue of Employment and Earn*
basic information is supplied in considerable indus- mgs published in the Spring of each year. More detry detail, these estimates are frequently incorporated tailed technical notes on "Measurement of Industrial
in other Federal statistical series, particularly in Employment" and "Hours and Earnings in Nonmaking current estimates of production, productivity, agricultural Establishments" appear in Techniques
of Preparing Major BLS Statistical Series (BLS
and national income.
The publication of comparable State and local Bulletin 1168), December 1954. Continuous data for
area estimates by the cooperating State agencies using the entire history of a series are provided by the BLS
the same concepts and methods provides a means on request. Also available are: Gudde to Employwhereby business trends can be followed for all ment Statistics of BLS (1954), Guide to State EmStates and the District of Columbia and for about ployment Statistics (1960), and Guide to Area Employment Statistics (1960), which list all series for
130 metropolitan areas.
The national estimates are not all of uniform qual- which employment, hours, and earnings data are
ity, however. In general, those for manufacturing available, with beginning dates and detailed indusindustries are most reliable. Since "cutoff" sam- try descriptions.

01731

WEEKLY HOURS OF WORK
Average Weekly Hours
Description of series.—With the employment figures for the specified payroll period, described in
the preceding section, BLS collects from the sample
establishments total man-hours for which pay is received by production or nonsupervisory workers, including hours paid for holidays, sick leave, and vacations taken. Data on average weekly hours, weekly
earnings and hourly earnings are regularly published
for about 350 individual industry groups and subgroups, as well as for mining, construction and manufacturing among the major industry divisions. Because of sample limitations, estimates are not
prepared for other industry divisions or for all nonagricultural industries combined. Overtime hours
(hours in excess of regular hours for which premium
payments were made) are estimated separately for
major industry groups in manufacturing.
Statistical procedures.—The average hours figures
are obtained by dividing the number of production

and related workers (or nonsupervisory workers in
industries other than mining and manufacturing)
into the total man-hours reported for each industry.
The average hours are normally less than scheduled
hours because of such factors as absenteeism, labor
turnover, part-time work, and stoppages.
Seasonally adjusted series are prepared in a manner similar to that for nonagricultural employment.
The magnitude of the seasonal adjustments is illustrated by the seasonal adjustment factors for average
hours of manufacturing production workers, which
are:
January
February
March
April
May
June

99. 7
99. 6
99. 6
99. 2
99. 5
100.2

July
August
September
October
November
December

99. 7
100. 2
100. 7
100. 5
100. 4
100. 9

Uses and limitations.—Changes in hours worked
supplement the information on employment, since
frequently hours worked are affected even before em-

Average Weekly Hours in Selected Industries, 1947-60
{Monthly data for production workers or nonsupervisory employees.

Seasonally

adjusted)

HOURS OF WORK

DURABLE GOODS MANUFACTURING

— NONDURABLE GOODS
* ' \ 'MANUFACTURING

RETAIL TRADE

BUILDING CONSTRUCTION

1947

1948

SOURCE OF DATA

1949 1950 1951

DEPARTMENT OF LABOR

1952 1953 1954 1955 1956 1957

1958

1959 I960

Weekly Hours of Work
Persons at work in nonagricultural industries
by hours worked per week 2

Average hours per week

Under 35 hours

Manufacturing
Year
Total

NonDurable durable
goods
goods

Building
construction

Retail
trade 3

Over 40
hours

35-40
hours

Part time for
economic reasons
Total

Usually
work full
time 4

Usually
work part
time 5

Millions of persons 14 years of age and over

Hours per week
1929

44.2

1930
1931
1932
1933
1934

42. 1
40. 5
38. 3
38. 1
34. 6

32. 6
34. 8
33. 9

41. 9
^0.0
^5. 1

1935
1936
1937
1938
1939

36.
39.
38.
35.
37.

6
2
6
6
7

37. 3
41.0
40.0
35. 0
38.0

36. 1
37. 7
37. 4
36. 1
37.4

1940.
1941.
1942.
1943.
1944.

38. 1
40. 6
42. 9
44. 9
45. 2

39. 3
42. 1
45. 1
46. 6
46. 6

37.
38.
40.
42.
43.

0
9
3
5
1

33. 1
34. 8
36. 4
38. 4
39. 6

42.
42.
41.
40.
40.

1945.
1946.
1947.
1948.
1949.

43.4
40.4
40.4
40. 1
39. 2

44.
40.
40.
40.
39.

1
2
6
5
5

42.
40.
40.
39.
38.

3
5
1
6
8

39. 0
38. 1
37. 6
37. 3
36. 7

40. 3
40. 7
40. 3
40. 3
40.4

1950.
1951.
1952.
1953.
1954.

40.
40.
40.
40.
39.

5
7
7
5
7

41.
41.
41.
41.
40.

2
6
5
3
2

39.
39.
39.
39.
39.

7
5
6
5
0

36.
37.
38.
37.
36.

3
2
1
0
2

1955.
1956.
1957.
1958.
1959.

40.
40.
39.
39.
40.

7
4
8
2
3

41.
41.
40.
39.
40.

4
1
3
5
8

39.
39.
39.
38.
39.

8
5
1
8
6

36.
36.
36.
35.
35.

2
4
1
7
8

()
28. 9
30. 1
32. 8
33. 4
32. 1
32. 6

()

42. 7

5
1
1
3
4

31.
35.
38.
39.
38.

5
2
2
7
1

5. 6
5. 2
5. 3
4. 6
5. 4
5.9
5.4
6.0
8. 5
9.9

40. 5
40. 2
39.9
39.2
39. 1

36. 5
21.4
18. 1
20. 3
21. 2
21.0
19. 4
20. 9
17. 6
22. 4
17.5
19.3
23. 3
19.4
25. 1
26. 3
18. 1
24. 4
15. 7

10. 2
8. 9
7. 3
8. 6
11. 8

39. 0
38. 6
38. 1
38. 1
38. 1

18. 0
18. 7
17. 6
16. 6
17. 3

27.0
27. 3
28. 6
28. 3
27. 7

8. 7
9. 4
9. 7
10. 4
11. 7

1. 1
1. 2
1. 6
1. 0

0. 9
1.0
1. 3
1. 3

1 For production workers or nonsupervisory employees.
2 Differs from total employed in nonagricultural industries which includes persons with jobs but not at work for such reasons as illness, vacation, bad weather,
and 3industrial disputes.
Excludes eating and drinking places.
4
Includes persons who worked part time because of slack work, material shortages or repairs, new job started, or job terminated.
5
Primarily includes persons who could find only part time work.
6
Not available.
7 Data beginning with January 1948 not strictly comparable with those for earlier years.
NOTE.—Monthly data on average weekly hours available beginning 1932 for manufacturing industries, 1934 for building construction, and 1939 for retail trade.
Annual data for total manufacturing industries available for years 1909 and 1914 and on continuous basis beginning with 1919. Monthly data on persons at work by
hours worked per week available monthly beginning 1940, and numbers classified by reason for part-time work available monthly beginning May 1955. Beginning
January 1960 data include Alaska and Hawaii.
Source: Department of Labor.

ployment by changes in economic activity. The hours
figures are used in compiling the average earnings
figures discussed below. They also serve as a basis
for current production estimates for some industries
(see description of the index of industrial production, p. 47).
Hours paid for as measured by these series differ
from hours worked, and from "plant man-hours,"
which do not include hours paid for vacation, sick
leave, or holidays.
In addition to gross hours for a large number of
industries, BLS also publishes monthly estimates of
average weekly overtime hours by major industry
group in manufacturing and indexes of aggregate
weekly man-hours in industrial and construction activities.
References.—See above, under Nonagricultural
Employment (p. 41).

Persons At Work, By Hours Worked
Description of series.—As part of the collection of
information on the labor force (see above, p. 29),
hours worked during the survey week at all jobs are
obtained. Those working less than 35 hours a week
are divided first into two groups, those who usually
work full time and those who usually work part time.
Each of these groups is then classified according to
whether the part-time work during the survey week
was the result of (1) "economic" reasons, such as
slack work, material shortages, plant or machine repairs, new job started during week, could find only
part-time work; or (2) other reasons, such as holidays, bad weather, own illness, vacation, participation in labor dispute, did not want full-time work,
etc.

The average hours worked per week by persons
working part time in nonagricultural industries for
economic reasons differ according to whether such
persons usually work full time or usually hold parttime jobs. Annual averages are available beginning
1956 and are:
1956
1957
1958
1959

Usually work
full time

Usually work
part time

24T5
24. 5
25. 2
23. 8

18T2
18. 3
18. 1
18. 3

Uses cmd limitations.—Changes in the number of
persons working part time for economic reasons may
reflect changes in economic conditions as soon as, or
even earlier than, the number of unemployed. Experience in interpreting the series on reasons for parttime employment has been limited, since the figures
have been available on a monthly basis only since
May 1955. Information on persons at work by hours
worked is also published, classified by broad industrial and occupational groups and by selected personal characteristics. This is the only source of
information oh hours covering all industries. In
analyzing these data, and comparing them with the
results of the establishment survey (see above), it
should be remembered that the labor force survey
includes hours worked at all jobs during the survey
week, and that the hours reported by the household
respondent may reflect in some cases scheduled hours
rather than actual hours worked. The establishment
survey, on the other hand, includes hours paid for but
not worked as well as hours worked, and the average is affected by turnover during the payroll period.
References.—See above, under Status of the Labor
Force (p. M).

AVERAGE HOURLY AND WEEKLY EARNINGS—SELECTED
Description of series.—The payroll figures on
which these averages are based are collected by BLS
with the employment and hours figures, described
above. They are reported before deductions for
taxes, social insurance, etc. They include pay for
sick leave, holidays, vacations, and overtime taken,
but exclude retroactive pay and bonuses, unless
earned and paid regularly each pay period. Earnings in 1959 prices are the average weekly earnings
figures adjusted for changes in purchasing power as
determined by the Consumer Price Index, with
1959=100.
Statistical proce&wres.—Average hourly earnings
are derived by dividing total payrolls by total manhours reported for each industry. Only the sample
data are used, since there are no benchmarks available for hours and earnings.
Average weekly earnings are obtained by multiplying average weekly hours and average hourly earnings for each industry.
Uses and limitations.—Average hourly earnings
figures are widely used in collective bargaining, in
"escalating" long-term sales contracts (such as labor
costs for equipment which takes a number of months

INDUSTRIES

or years to build) and in general economic analysis.
The hourly earnings figures reflect not only changes
in basic hourly and incentive wage rates, but also
such variable factors as premium pay for overtime
and late-shift work and changes in output of workers
paid on an incentive basis. The changing employment of workers as between relatively high-paid and
low-paid work, and relatively high-wage and lowwage industries, also affects the hourly earnings
averages.
Hourly earnings refer to the actual return to the
worker for a stated period of time, and should not
be confused with wage rates, which represent the
rates stipulated for a given unit of work or time.
Since certain types of payments (see above) as well
as payments to workers excluded from the production worker (or nonsupervisory employee) definition are not included, the earnings series should not
be taken to represent labor costs to the employer.
Average weekly earnings are affected by changes
in the length of the workweek as well as all of the
factors which affect average hourly earnings. They
come closer than the hourly earnings to measuring
what the worker has to spend. However, they do not

Average Hourly Earnings in Selected Industries, 1947-60
{Monthly data for production workers or nonsupervisory employees)
DOLLARS
4.00

3.50

CONTRACT CONSTRUCTION
DURABLE GOODS
MANUFACTURING

NONDURABLE GOODS MANUFACTURING

I, l u l u In

i i I ,,1 i i 1M

MIMI.IIM

MIMIMIM

.I I . II I . I .I MIULIM

MIJIIII,

, I I ., 1 I I I . . 1 I . I . • 1 • • I M M I M L I I M

MIMIMIM

ill nil

IIn

,JMLIIM

MIMIMIH

1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 I960
SOURCE OF DATA; DEPARTMENT OF LABOR

Average Hourly and Weekly Earnings—Selected Industries
[For production workers or nonsupervisory employees]
Average hourly earnings—current prices
Manufacturing industries

Year

All

1929

$0. 566

1930
1931
1932
1933
1934

. 552
.515
. 446
. 442
. 532

1935
1936
1937
1938
1939

.
.
.
.
.

550
556
624
627
633

Manufacturing industries

Building
Retail
Non- construc- trade l
Durable durable
tion
goods
goods

Building
Retail
Non- construc- trade l
Durable durable
tion
goods

All

$0. 497
. 472
. 556
.
.
.
.
.

577
586
674
686
698

$0. 420
. 427
. 515

$22. 93

$42. 57

77
28
21
43
87

21. 84
20. 50
17. 57
16. 89
18.05

$22. 97

40. 58
39. 98
36. 35
37.68
40.09

$27. 22

$0. 795

23.
20.
17.
16.
18.

25
87
05
73
40

24.
21.
16.
16.
18.

. 815
. 824
.903
.908
. 932

20.
21.
24.
22.
23.

13
78
05
30
86

21.
24.
26.
24.
26.

52
04
91
01
50

19. 11
19. 94
21. 53
21.05
21.78

24. 51
27.01
30. 14
29. 19
30. 39

553
580
626
679
731

25.20
29. 58
36. 65
43. 14
46. 08

28.
34.
42.
49.
52.

44
04
73
30
07

22.27
24.92
29. 13
34. 12
37. 12

31.
35.
41.
48.
52.

1940
1941
1942
1943
1944

. 661
. 729
. 853
. 961
1. 019

. 724
. 808
. 947
1. 059
1. 117

1945
1946
1947
1948
1949

1.023
1. 086
1. 237
1. 350
1.401

1. I l l
1. 156
1. 292
1. 410
1. 469

. 904
1. 015
1. 171
1. 278
1. 325

1950
1951
1952
1953
1954

1. 465
1. 59
1. 67
1. 77
1. 81

1. 537
1. 67
1. 77
1. 87
1. 92

1. 378
1. 48
1.54
1. 61
1. 66

2.
2.
2.
2.
2.

031
19
31
48
60

]L.
]L.
]L.
]L.
]L.

1955
1956
1957
1958
1959

1. 88
1. 98
2. 07
2. 13
2. 22

2. 01
2. 10
2. 20
2. 28
2. 38

1. 71
1. 80
1. 88
1. 94
2. 01

2.
2.
2.
3.
3.

66
80
96
10
22

]L.
]L.

$(). 542

. 958
1.010
1. 148
1. 252
1. 319
1. 379
1. 478
1. 681
1. 848
1. 935

. 783
. 893
]L. 009
]L 088
]L 137

44. 39
43. 82
49.97
54. 14
54. 92

49. 05
46. 49
52. 46
57. 11
58.03

176
26
32
40
45

59.
64.
67.
71.
71.

33
71
97
69
86

63.
69.
73.
77.
77.

50
57
L. 64
L. 70
L. 76X

76.
79.
82.
83.
89.

52
99
39
50
47

83.
86.
88.
90.
97.

.
.
.
.
.

Average
weekly
earnings,
all manufacturing
industries, 2
1959 prices

goods

$25. 03

. 530
. 529
. 577
. 584
. 582
. 602
.640
. 723
. 803
. 861

•__

Average weekly earnings—current prices

70
14
80
13
18

$23. 14

42.
45.
48.
46.
50.

74
76
78
07
02

23. 50
24. 42
25. 73
27. 36
29.53

52.
58.
65.
72.
76.

39
57
56
63
29

\41.
46.
50.
51.

14
96
61
41

53. 73
56. 24
63. 30
4
68. 85
70. 95

31.
36.
40.
43.
45.

55
35
66
85
93

71.
65.
65.
65.
67.

94
50
23
62
22

32
47
46
23
18

54.
58.
60.
63.
64.

71
46
98
60
74

73. 73
81. 47
88.01
91. 76
94. 12

47.
50.
52.
54.
56.

63
65
67
88
70

71.
72.
74.
78.
78.

92
63
61
09
02

21
31
66
06
10

68.
71.
73.
75.
79.

06
10
51
27
60

96. 29
101. 92
106. 86
110. 67
115. 28

38. 29

58. 50
60. 60
62. 48
64. 77
67.06

83. 26
85. 73
85. 38
84. 26
89. 47

1
2

Excludes eating and drinking places.
Earnings in current prices divided by Consumer Price Index on a 1959 base.
3 Not available.
* Data beginning with January 1948 not strictly comparable with those for earlier years.

represent take-home pay, since no deductions have
been made for income and social security taxes, group
insurance, occupational supplies, union dues, or other
payroll deductions.
The fact that large establishments predominate in
the BLS sample may affect somewhat the level of the
average earnings figures for some industries. The
stratification of the sample by size, which will be effective with the adjustment to 1959 benchmarks, is
expected to correct this situation. Since hours and

earnings data are not collected for all industries,
there are no summary series for average hourly or
weekly earnings in all nonagricultural establishments.
References.—See above, under Nonagricultural
Employment (p. 41). Estimates of hourly earnings
excluding overtime and of net spendable weekly
earnings in manufacturing and earnings in 1947-49
dollars for selected industries are also published in
Employment and Earnings.

PRODUCTION AND BUSINESS ACTIVITY
INDUSTRIAL PRODUCTION AND PRODUCTION OF SELECTED
MANUFACTURES
Description of series.—The index of industrial production is prepared monthly by the Board of Governors of the Federal Reserve System. It is designed
to measure changes in the physical volume or quantity of output of manufacturing and mining establishments and electric and gas utilities. The industries covered by the index produce about 35 percent
of the value of the total output of goods and services
in the United States.
The monthly indexes are based on figures compiled
by government agencies and by various trade organizations and publications. The component series are
selected to represent the industries, industry groups,

and other subdivisions in the index, and where necessary and possible they include adjustments for undercoverage or other deficiencies in the basic series. For
example, series based on shipments data are adjusted,
where feasible, for inventory changes; and those
based on man-hours data for estimated changes in
output per man-hour. In all, there are 207 monthly
series, combined according to relative value added
in 1957 for the period beginning in 1953.
The monthly series are adjusted periodically to
levels indicated by more reliable and comprehensive
annual indexes and, for manufactured goods, Census
benchmark indexes. The most recent benchmark

Industrial Production, 1947-60
{Monthly data.

Seasonally adjusted)

INDEX11957 = 100
130

NONDURABLE MANUFACTURING

DURABLE MANUFACTURING
TOTAL INOEX

..i..I..i.. ,.i..l..i.. ..i..I.,i.. ..i,.I.,i.. ..i..I..I,, ..i,.l,.i.. ..i..I..i.. 1 . 1 . . L . 1 . . ..i..l.ii.. 1.1,.I

1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 I960

SOURCE OF DATA: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Industrial Production
[1957=100, annual averages]
Market

Industry
Year

Total
industrial
production

Final products

Manufacturing
Total

Mining Utilities

NonDurable durable

Total

1929.

1930.
1931.
1932.
1933.
1934.

32
26
21
24
26

32
26
20
24

27
19
12
15
18

36
34
30
34
35

45
39
32
37
39

14
13
12
12
13

1935.
1936.
1937.
1938.
1939.

31
36
40
31
38

23
30
34
22
30

39
43
46
41
47

42
48
54
47
51

14
16
18
18
20

1940.
1941.
1942.
1943.
1944.

44
56
22 69
82
2 81

44
58
2 73
2 89
2 86

58
62
64
66
71

1945_
1946.
1947.
1948.
1949.

70
59
65
68
64

73
60
66
69
65

49
60
2 66
2 74
2
71
68
67
70
72
71

22
24
27
30
32

71
70
76
80
71

33
34
39
43
46

65
67
65

1950.
1951.
1952.
1953.
1954.

75
81
84
91
85

76
82
85
92
86

71
80
85
96
85

79
82
83
87
87

80
87
87
89
86

53
60
65
71
77

74
79
85
91
87

1955.
1956.
1957_
1958.
1959.

96
99
100
93
105

97
100
100
92
105

98
100
100
87
102

95
99
100
100
110

95
100
100
91
95

85
94
100
105
115

95
99
100
95
107

39
56
2 77
2 100
2 98
76
53
62
64
59

Consumer
goods

Equipment

S3
8

8
()P)
(•)
(•)

P)
()

0)
0)
0)
(')

W
W

0)
()

P)
(>)
(•)

Materials

0)
0)
0)

8
0)
0)
0)
0)
0)
0)
0)
0)
0)
0)
0)

82
81
83
88
87

)
53
56
50
54
75
90
96
85

75
82
83
91
84

97
99
100
99
110

91
99
100
87
100

97
100
100
91
104

70
72
71

66
69
64

i Not available.
> Indexes should be used with caution because of special conditions due to wartime activity.
Source: Board of Governors of the Federal Reserve System.

indexes were based on quantity and value data for
thousands of individual products covered in the
Censuses of Manufactures for 1947 and 1954, and
were first published in 1958. Annual indexes based
on more information than is available monthly but
generally less than is available at Census intervals
are also used to adjust many of the monthly series.
Most of the annual indexes (as of August 1960) have
been calculated through 1957.
The Census benchmark indexes were based very
largely on physical product data, and to a minor
degree on value data deflated by price indexes and

materials consumption data. The annual indexes
rely more heavily on deflated value data, although
they are still predominantly physical product measures. A little less than half of the monthly series
(measured by relative importance in the index in
1957) are based on physical product data, and about
half are based on man-hour data adjusted for estimated changes in output per man-hour. Man-hour
series are of very minor importance in the annual indexes, and were not used at all in the Census benchmark indexes.

INDUSTRY GROUPINGS

The 207 monthly series are grouped in two separate classifications, permitting two alternative ways
of accounting for changes in the total index. One of
the two, based largely on the 1957 edition of the
Standard Industrial Classification (SIC), has as its
principal categories durable manufactures, nondurable manufactures, mining, and utilities. Durable
manufactures include 11 of the SIC major groups—
primary metals; fabricated metal products; nonelectrical machinery; electrical machinery; transportation equipment; instruments; ordnance; stone, clay,
and glass; lumber; furniture; and miscellaneous
manufactures. It also includes measures of the
manufacturing activities of the Department of Defense. It accounted, in 1957, for 50 percent of the
weight of the total index.
Nondurable manufactures include 10 SIC major
groups—food and beverages, tobacco, textiles, apparel, paper, printing, chemicals, petroleum, rubber
and plastics, leather, and also includes representation
of the manufacturing establishments owned by the
Atomic Energy Conjtprission, It accounted, in 1957,
for 37 percent of tl&*total index. Mining activities,
accounting for 9 percent of the index in 1957, include
coal and metal mining, crude oil and natural gas extraction, oil and gas well drilling, and production of
sand, clay, and other nonmetallic minerals. Utility
output of electricity and gas includes both private-

and government-owned establishments, and accounted for 5 percent of tlie total index in 1957.
In the table "Production of Selected Manufactures" nine series selected from the component
group indexes are shown for the period 1947-1959.
These are among the major components of the index
of manufactures.
MARKET GROUPINGS

The second system of classification is based on type
of end-use, and has as its major categories consumer
goods, equipment, and materials. Each of the 207
monthly series is assigned to one of the market groupings as well as to an industry grouping. For example,
the auto production series is a component of consumer
goods in the market classification and of transportation equipment in the industry classification. Truck
production, which is also part of transportation
equipment in the industry grouping, is in equipment
in the market grouping.
The consumer goods grouping, accounting for 31
percent of the total index in 1957, is further subdivided into automotive products, home goods (including appliances, furniture, television, etc.), apparel, and consumer staples. The first two of these
categories, automotive and home goods, include the
series formerly published as a separate index of consumer durables output, and the combination of these
two is now published as a supplementary grouping

Production of Selected Manufactures
[1957=100, annual averages]
Nondurable manufactures

Durable manufactures
Year
Primary
metals

Fabricated
Transmetal
portation
produots Machinery equipment

Lumber
and
products

Textiles,
apparel
and
leather

Paper
and
printing

Chemicals, Foods,
petroleum beverages
and
and
rubber
tobacco

81
84
71

75
76
69

63
64
57

40
44
44

92
96
84

84
87
83

68
71
71

51
54
53

83
83
84

.
.--.--.

89
97
89
100
81

84
90
88
99
89

70
80
88
96
84

53
59
69
86
79

103
102
101
107
104

92
90
92
94
90

78
81
79
85
87

65
72
75
80
79

87
88
90
91
93

1955
1956.
...
1957-.-..--...-.
1958
1959
„..„.

106
104
100
78
90

97
97
100
92
104

93
103
100
85
103

96
92
100
84
98

114
110
100
100
113

98
101
100
99
115

95
99
100
99
108

92
96
100
99
113

96
100
100
102
107

1947
1948
1949
1950
1951
1952
1953
1954

Source; Board of Governor of the Federal Reserve System.

of the regular production index. Equipment series,
accounting for 16 percent of the total in 1957, are
further divided between business equipment and an
unpublished defense equipment category.
The materials component consists of two major
categories, durable goods materials and nondurable
materials. Durable goods materials, accounting for
28 percent of the 1957 total index, include all industries producing materials or components used primarily in the manufacture of finished durable goods;
they range from metal mining and logging to electronic tubes and original equipment auto tires. Nondurable materials, comprising 25 percent of the 1957
total index, include business fuel and powder, containers, and other business supplies as wrell as textiles,
paper, and other basic nondurable materials.
Statistical procedures.—The method used in combining the individual series is the weighted average
of relatives. This consists of (1) reducing each series
into relatives with the average for the base period,
1957, as 100; (2) multiplying each series of relatives
by a base-year weight factor; and (3) adding the
products (series of relatives multiplied by weights)
for any one month to obtain the index number for
the month. The weights used are percentage weight

factors, that is, percentage of the weight assigned to
each series to the total weight assigned to all series
in the base period. Since the total of the percentage
weight factors is equal to 100, the sum of the products
of all series for any one month (all series times their
respective weight factors) gives the index of industrial production for that month. The products of the
component series and their weights give the number
of points contributed to the index by individual
series. This method of computation facilitates analysis of the changes in the index. For example, it
makes it possible to observe the points contributed by
each series or group of series, and therefore to determine which series or group of series are responsible
for the month-to-month clmnges in the total index or
in the index for any group or subgroup of industries.
The weights used are based on value added—the
difference between the value of products and the cost
of materials or supplies consumed—in individual industries in 1957. The value-added data for mining
are based on the 1954 Census of Mineral Industries
and on Department of Commerce national income
estimates by industry for 1954 and 1957. The valueadded figures for manufacturing are obtained mainly
from the Census Bureau Annual Survey of Manu-

Relative Importance of Major Groupings in the Index of Industrial Production, 191fl-l$ and 1957
Relative weight
Industry group

Total index
Manufacturing, total
Durable
Nondurable
Mining
Utilities

1957

1947-49

100. 00

86.49
49. 66
36.83
8. 55
4.96

86. 40
42. 72
43. 68
9. 41
4. 19

7. 73
5.42
15. 31
10. 76
1. 65
8. 79

6. 65
5. 13
13. 20
7. 02
2. 91
7.81

Durable Manufactures
Primary metals
Fabricated metal products
Machinery
Transportation equipment
Lumber and products
Other durable manufactures
Nondurable Manufactures
Textiles, apparel, and leather
Paper and printing
Chemicals, petroleum, and rubber
Food, beverages, and tobacco

Relative weight
Market group
1957
Total index
Final products, total
Consumer goods
Equipment, including defense
Materials

13. 03
8. 30
9. 73
12. 62

100. 00

46. 75
31. 13
15. 62
53. 25

47.52
35. 87
11. 65
52. 48

3.35
4. 40
5. 20
18. 18

2.92
5.74
7.77
19. 44

12. 16
3.46

10.38
1. 27

27. 81
25. 44

24.37
28. 11

Consumer Goods
Automotive products
Home goods
Apparel, including knit goods and shoes
Consumer staples
Equipment
Business equipment
Defense equipment

7.32
7. 93
10. 94
10. 64

1947-49

Materials
Durable goods materials
Nondurable materials

factures for 1957. Weights for utility series are
derived from Federal Power Commission data. In
many cases, value-added data are available only for
groups of two or more individual series in the index;
the assumption usually made in these cases is that
value added is proportional to value of product
within each group. The 1947-49 and 1957 proportions (or the relative importance of the major groupings based on the 1947 and 1957 weights) shown here
for major groupings are given in detail in Industrial
Production 1959 Revision, Board of Governors of the
Federal Reserve System.
Components of the index are adjusted for two
kinds of short-time recurring fluctuations—differences in the number of working days from monthto-month and seasonal variations. The first adjustment is accomplished by reducing reported quantity
figures to average daily output in the month. For
this purpose, only regular weekend closings—where
in effect—are treated as nonworking days. No allowance is made for holiday shutdowns, whose effects
on production are adjusted by the seasonal variation
factors. The adjustment, in effect, leads to monthly
estimates of output on a daily-average basis. No
working day adjustment is needed for the man-hour
series which are reported in terms of weekly rates.
Adjustment for seasonal variation is made for 65
series or groupings of series, about half of them in
the industry classification and half in the market
classification. Seasonally adjusted indexes for larger
aggregates in both classifications and for total industrial production are weighted combinations of these
groupings. Seasonal factors have been developed by
the ratio-to-moving-average method described in
"Adjustment for Seasonal Variation," published in
the Federal Reserve Bulletin for June 1941. Use
has also been made of the Census Method I I program
for seasonal adjustment by electronic computer,
which is a mechanical version of the ratio-to-movingaverage technique. A description of the editing and
professional review which accompanies the mechanical procedure is described in Industrial Production
1959 Revision published by the Board of Governors
of the Federal Reserve System.
REVISION IN 195 9

Since its first publication in 1927, the index has
undergone several major revisions. The most recent
revision wTas completed in 1959, with revised indexes

and new groupings carried back to January 1947.
The principal changes were: (1) adjustment of individual monthly series to levels show^n by Census
of Manufactures and other data; (2) broadening
of coverage to include electric and gas utility output, and introduction of new component series in a
number of manufacturing and mining industries;
(3) introduction of new market groupings of production series described above; (4) selection of 1957
as weight year for the period beginning with January 1953, and as a new reference base period; the
old reference base of 1947-49 was continued in addition to the new one for major groupings of the index;
and (5) adoption of the latest (1957) version of the
standard industry classification, prepared under the
auspices of the U.S. Bureau of the Budget.
Relation to other series.—As an important general
economic indicator, the index of industrial production is related in varying degree to other general
economic indicators. Among the more important
series to which the index is closely related are those
on manufacturers' sales. It should be observed, however, that these are value or dollar-volume series, and
are therefore influenced by price as wTell as quantity
changes. The industrial production index, on the
other hand, being a measurement of physical volume,
registers quantity changes only. Differences in
movement between the production index for manufacturing and the shipment series for manufacturing are also possible for other reasons: production
differs from shipments because of changes in factory
inventories; the production index uses the establishment as the unit for the industry classification,
whereas the shipment series uses the company as the
unit; and the production index uses value added as
weights for the series, whereas the shipments series
implicitly uses value of shipments.
The "consumer" and "business equipment" market
groupings of industrial production refer to many
of the same goods as the consumer goods and producers' durable equipment categories of the gross
national product. Even after these gross national
product categories are deflated for price changes,
however, there are conceptual and statistical differences from the production series which should be
kept in mind in comparing the two. The production
series include production for inventory, for export,
and for government purchase as well as for domestic
business and consumers, and are weighted on the basis

of value added by industry in 1957. The deflated
consumer goods and equipment expenditure series
in the gross national product include imported goods
but not goods for export, inventory, or government
use. They are implicitly weighted on the basis of
final purchase price in 1954, including value added
by transportation, trade, and other sectors as well
as industry. The basic data used to calculate the expenditure series, furthermore, differ in concept and
coverage from the basic production data.
Uses and limitations.—The total index of industrial production is probably most widely used as a
business barometer. Both in whole and in detail it
is used with related data oh employment, inventories,
trade, prices, and other economic variables, in analyzing short- and long-run developments in the economy.
The component indexes are used to determine the
areas in which the occurrence of important changes
accounted for the observed changes in the total index. They are also used in analyses relating to individual industries. Many companies, for instance,
make continuing studies of their own output and
sales figures in relation to the output movements of
the industry. They also use the industry and prod-

uct series in studies of potential markets, and in other
types of research.
The coverage of the index is limited to manufacturing, mining, and electric and gas utilities. It should
not be used as a measure of total production, because
agriculture, construction activity, and the various
service sectors are not included. It might be noted,
however, that changes in the output of manufactures,
minerals, and utilities are especially significant, in
part because they account for such a large part of
variation in the total of all economic activity.
References.—The index of industrial production
is published monthly in the Business Indexes release,
available on request from the Division of Administrative Services, Board of Governors of the Federal
Eeserve System, Washington 25, D C . Each issue
shows all the groupings and individual indexes published on a 1957 base. Indexes on both a 1957 and a
1947-49 base for grouping's, but not for individual
series, are shown in the monthly Federal Reserve
Bulletin. A detailed description of the latest revision, including tables of revised individual indexes
and groupings, is provided in the volume, Industrial
Production, 1959 Revision.

WEEKLY INDICATORS OF PRODUCTION
The following brief descriptions relate to the
weekly series presented each month in Economic Indicators for a number of selected indicators—steel,
electric power, bituminous coal, freight, paperboard,
and cars and trucks. The series are useful as current
measures, available more promptly than monthly or
annual figures. They are subject, however, to erratic
movements not shown in comparable series covering longer time periods.
The historical table ^>f annual data presented here
is in terms of weekly averages, in order to facilitate
comparison of historic levels with the current series
in Economic Indicators. Weekly averages for years,
as shown in this table, are computed by dividing the
total annual figures by 52. Weekly averages for
months, as shown in current issues of Economic Indicators, are computed by assigning individual weeks
to the month in which a majority of the days fall.

Steel Produced
The weekly series on steel production is compiled
by the American Iron and Steel Institute. It includes steel for ingots and castings produced by openhearth, Bessemer, basic oxygen, and electric-furnace

processes, except for the small amount of steel for
castings produced in foundries operated by companies which do not produce ingots. The small quantity of crucible steel now produced is included with
the production of electric furnaces.
The series is based on current reports received from
more than 95 percent of the industry, giving actual
production for the preceding week and advance estimates of production for the coming week. The production for the 5 percent of the industry not reporting weekly is estimated on the basis of the reported
previous months' production of the companies included in this group.
The Institute publishes the weekly series each Monday, showing production for the preceding week and
estimated production for the coming week. It also
publishes each month detailed production of steel
by types of furnaces, whether ingots or castings, and
volume of alloy steel. Monthly production of blast
furnaces shows volume of pig iron and ferroalloys
produced. Both series are supplemented with statistics showing States in which the steel and iron were

Weekly Indicators of Production
[Weekly averages]
Steel produced l
Year

Thousands Index
of net
(1947tons
49=100)

Electric
power
distributed
(millions of
kilowatt
hours)

Bituminous
coal mined
(thousands
of short
tons) 2

Freight
loaded
(thousands
of cars)

Paperboard
produced
(thousands
of tons)

Cars and trucks assembled
(thousands) *
Total

Cars

Trucks

1929.

1,184

73. 7

1,733

1,740

1,016

103.0

88.2

14.8

1930.
1931.
1932.
1933.
1934.

855
549
289
493
560

53.2
34.2
18.0
30. 7
34.9

1, 714
1,646
1,488
1, 544
1,655

1,522
1,243
1,007
1,090
1,173

882
714
542
562
593

76
73
64
76
76

64.5
45.9
26.3
37.0
52.9

53. 5
37. 9
21.8
30.3
41. 8

11.0
8.0
4. 5
6.7
11. 1

1935.
1936.
1937.
1938.
1939.

732
1,023
1,086
609
1,013

45. 6
63. 7
67. 6
37.9
63. 1

1,793
2,037
2,256
2, 148
2,398

1,217
1,432
1,456
1, 139
1,293

606
694
724
586
652

88
103
107
95
114

75.9
85. 7
92.5
47.9
69.5

62.5
70.6
75.3
38. 5
55. 7

13.4
15. 1
17.2
9.4
13.8

1940.
1941.
1942.
1943.
1944.

1,281
1,589
1,650
1,704
1,715

79. 7
98.9
102. 7
106. 1
106.8

2,684
3,142
3,552
4,155
4,385

1, 503
1,695
1,909
1,907
2,009

699
814
823
816
835

122
152
138
147
153

86.8
93.4
20.8
14.5
15.2

71. 7
72.3
4.0

15. 1
21.0
16. 9
14.5
15. 2

1945.
1946.
1947.
1948.
1949

1,529
1,277
1,628
1,695
1,496

95.2
79.5
101.4
105. 5
93. 1

4,244
4,235
4,821
5,313
5,498

1,891
1,745
2,058
1,948
1,427

806
795
856
822
691

153
163
180
184
177

15. 1
59.6
92.2
101. 5
120.4

1. 6
41. 5
68.4
75.2
98. 6

13. 5
18. 1
23.8
26.3
21.8

1950
1951.
1952.
1953
1954

1,857
2,018
1,782
2, 141
1,694

115. 6
125.6
110.9
133.3
105.5

6, 183
6,958
7,455
8,246
8,883

1,687
1,772
1,548
1, 521
1,303

748
779
730
735
652

214
229
213
241
236

154.2
129.8
106.8
141. 1
125. 6

128.4
102. 7
83.4
118.0
106.0

25.9
27.2
23.4
23.2
19. 7

1955
1956
1957
1958
1959.

2,245
2,204
2, 162
1,635
1,792

139.8
137. 2
134. 6
101. 8
111. 6

10, 318
11,292
11,873
12, 076
13, 206

1,542
1,693
1,644
1,380
1,380

724
728
683
581
596

269
274
272
275
308

176. 7
132. 8
138.6
98.4
129.5

152. 7
111. 6
117.6
81. 6
107.6

24.0
21.2
21.0
16.8
21.9

1 Weekly capacities (net tons as of January 1 are: 2,455,300 (1956), 2,559,631 (1957), 2,699,320 (1958), 2,831,486 (1959).
2
Daily average.
3 Production figures for 1929-59.
* Less than 500.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: American Iron and Steel Institute, Edison Electric Institute, Department of the Interior, Association of American Railroads, National Paperboard
Association, and Ward's Automotive Reports.

produced, Annual statistics in similar detail are
presented in the Institute's Annual Statistical
Report.
With its weekly, monthly, and annual figures on
production, the Institute publishes a series^ on "Percent of theoretical capacity" and an "Index of ingot
production, 1947-49 = 100." The figures on percent
of capacity are the ratio of the weekly production to
average weekly capacity on the first of the year.
This series, which measures the operating rate in re-

lation to full capacity, is useful as an indicator of
the general economic level but cannot be used for
year-to-year comparisons of the volume of steel production. The index, on the other hand, provides an
accurate comparative measure of the volume of steel
production from one period to another, regardless of
changes in capacity.
The weekly series was initiated in October 1933.
Comparable annual data on steel production are
available from 1867.

Electric Power Distributed

and lignite, and is a very close approximation of total
production in the United States.
The weekly series on electric power distributed is
The figures are estimated on the basis of carloadcompiled by the Edison Electric Institute. It may
ings and river shipments. The method of estimabe defined as the energy sold to ultimate consumers
tion consists of raising the rail and river shipment
plus line losses and unaccounted for losses; or as net
figures by factors to represent the coal that is not
generation plus net import over international boundtransported by rail or river, such as truck shipments,
aries, less energy used by the producer and the
local sales, colliery fuel, and coal produced by small
distributor. It includes operations of all private,
mines for local use. The weekly estimates are admunicipal, cooperative, and governmental enterjusted annually by the actual figures on production
prises engaged in the production or distribution of
of coal and lignite collected each year from all proelectricity for the use of the public; it does not inducers by the Bureau of Mines. The correction is
clude energy generated by captive plants of indusnegligible—within less than one-half of 1 percent.
trial establishments.
The daily average for the week is obtained by dividThe weekly figures are collected by the Institute by
ing the weekly production by the maximum number
telegraph from approximately 105 reporting utilities
of working days (not days actually worked) in that
(either companies or groups of interconnected
week.
companies) representing about 95 percent of the total
Although bituminous coal is still an important inenergy available for public consumption. The
dustrial fuel, its importance has decreased in recent
estimated 100-percent production is obtained by
years. In 1920 it accounted for 67.4 percent of the
applying the ratio of the monthly output of all utilitotal supply of energy from mineral fuels, in 1940 for
ties as collected and presented by the Edison Electric
47.2 percent, and in 1959 for 22.4 percent. The
Institute for the previous month.
series on production of bituminous coal and lignite
The weekly series is useful in economic analysis, has other weaknesses as an indicator of industrial
because it is available promptly and is a reliable activity. Coal mines normally operate at a fraction
measure of net energy distribution to the public of their capacity—about 3 days a week—and the
supply. It is not a sensitive measure of important coal-using industries carry considerable stocks to
changes in industrial activity, however, since it in- allow for changes in industrial activity, with resultcludes energy used for nonindustrial purposes, such ant changes in coal consumption, without regard to
as air-conditioning loads, requirements of the Atomic the ups and downs in coal output. The figures on
Energy Commission, and sales to residential and coal production should therefore be analyzed in conrural consumers.
junction with related series, also compiled by the
The weekly series is issued each Wednesday by the Bureau of Mines, on the consumption of coal by inEdison Electric Institute. The Institute also pub- dustries and deliveries to retail dealers, and on stocks
lishes monthly research statistics, including addi- of coal held by industries and retail dealers.
tional data on source and disposal of energy, for
The weekly estimates of total production and averwhich the data on generation are obtained from the age production per working day and series on conFederal Power Commission. The Federal Power sumption and consumers' stocks are published in the
Commission issues a monthly bulletin on Elective Bureau of Mines multilithed Weekly Coal Report.
Power Statistics, with monthly and annual data on Detailed annual data and monthly data for the
production, fuel consumption, requirements, and current and preceding years, as well as a description
supply.
of the method used in making the estimates, are
The weekly series was initiated in 1928. Annual published in the Bureau of Mines Minerals Yearbook.
data on the production of electrical energy are avail- Prior to publication of the bound volumes of the
able from 1902.
Yearbook, this information is also available in the
annual Mineral Market Report on bituminous coal
Bituminous Coal Mined
and lignite, and in the "preprint" of the Yearbook
The series on production of bituminous coal is chapter distributed as a separate publication.
Weekly data on production of bituminous coal and
compiled weekly by the Bureau of Mines, Department of the Interior. It includes bituminous coal lignite are available from 1917, annual from 1807.

Freight Loaded
The weekly revenue freight loaded series, compiled by the Association of American Eailroads, was
initiated in 1919 as an operations report for railroad
officers. The published data are totals of weekly
reports received by the AAE from all class I railroads. Revisions in the data are necessary in only a
very few cases, usually when a preliminary estimate
is filed to meet the reporting deadline and then is
corrected when a final figure is available. The
weekly revenue freight loaded report to the AAR
contains information on revenue freight by eight
broad commodity groups and on total loads received
from connections by railroad geographical districts
and by individual class I railroads. Comparisons
are shown for the corresponding weeks of each of the
two preceding years.
The weekly revenue freight loaded series is widely
used by business analysts as one of the indicators of
general business activity. It should be remembered,
however, that long-term changes in the series inadequately reflect business activity, especially because
of the increased importance of competing means of
transportation (primarily truck).
The detailed freight loaded data are published by
the AAR in its CS-54A report, "Revenue Freight
Loaded and Received from Connections/' The report is published weekly on the Thursday following
the week to which the data relate.
The freight loaded data are available from 1919.

Paperboard Produced
The weekly series on production of paperboard,
compiled by the National Paperboard Association,
measures the production of container board, bending
board, nonbending board, special paperboard stock,
cardboard, and other miscellaneous types of paperboard. The data are obtained from weekly reports
which the Association collects from member companies, currently accounting for about 87 percent of
total production. The estimated 100 percent production is calculated on the basis of the ratio of the
annual production of the companies which submit
weekly reports to total production for the previous
year. The figures on total annual production are a
summation of annual data reported to the Association
by practically all mills. Because of the extensive use
of paperboard in the manufacture of containers and

boxes for packaging and shipping numerous products,
the production of paperboard moves closely with
general economic activity.
The wTeekly data are issued by the Association in
a one-page release on Wednesday of the wreek following that to which the figures relate. More detailed
statistics are presented in the Association's annual
Paperboard Industry Statistics. The Association
also publishes a series on "percent of activity" based
on industry reports of the time in use of the machines
on an inch-hour basis (1 inch of machine width
operated for 1 hour).
Comprehensive monthly and annual data on pulp,
paper, and paperboard are collected by the Bureau
of the Census and published in its Current Industrial
Reports series. The paperboard component of the
Census series is not completely comparable with the
Association series, though the differences are not
large.
The Association's weekly data on paperboard production were initiated in 1933. Comparable annual
data are available from 1925.

Cars and Trucks Assembled
The weekly series on output of cars and trucks is
compiled by Ward's Reports, Inc., and is based on
information received from each of the individual
producers in the United States. It is published each
Monday in Ward's Automotive Reports, wThich shows
a breakdown of the weekly total by cars and trucks
and by makes, current and cumulative monthly totals,
and corresponding figures for the previous year,
with similar data for Canada. Summary data are
presented in Ward's Automotive Yearbook.
Monthly and annual data on factory sales are compiled and published by the Automobile Manufacturers Association. The sales figures differ somewhat from the production figures, principally because
they include some units produced in earlier periods
and exclude some units produced in the current
month.
In the accompanying historical table, data for the
years 1929 through 1958 are average weekly production figures derived from annual totals in Ward's
yearbooks; and data for 1959 are derived from the
weekly reports.
The weekly production figures have been published
by Ward's since 1925. Annual data on factory sales
of cars and trucks are available from 1900.

NEW CONSTRUCTION

Value of New Construction Put-in-Place
Description of series.—The series on the value of
new construction put-in-place are compiled monthly
and represent estimates of the dollar value of construction work installed or erected on the site during
each month. Effective July 1959, responsibility for
compilation of new construction estimates was transferred from the Business and Defense Services Administration of the Department of Commerce and the
Bureau of Labor Statistics of the Department of
Labor to the Bureau of the Census of the Department
of Commerce. Pending revisions of concepts and
methods, the Bureau of the Census is continuing the
existing series. Annual data for recent years and
seasonally adjusted annual rat£s of the data for recent
months are published in currfent issues of Economic
Indicators.
New construction covers the erection or installation of, and additions and alterations to, immobile
buildings, structures, and utilities, together with the
necessary service facilities, such as plumbing, heating, and elevators. Construction also covers certain types of immobile equipment which are primarily assembled or erected on the site, such as blast
furnaces and fractionating towers. New construction does not include maintenance and repair, drilling of oil, gas, and-water wells, digging and shoring
of mines, and operations which are an integral part
of farming such as plowing, terracing, and digging
drainage ditches.
The distinction between private and public (Federal, State, and local) construction is made on the
basis of ownership, not source of funds. Residential construction includes housekeeping units and
nonhousekeeping facilities such as hotels, motels, and
dormitories.
HISTORICAL REVISIONS IN THE SERIES

Since the publication of the 1967 Historical and
Descriptive Supplement to Economic Indicators
there have been a number of revisions in the historical series on new construction. Revisions for some
series have been introduced only as far back as January 1959 and for other series the estimates have been
revised back to January 1946.
In May 1960, a new series on housing starts was
introduced beginning with January 1959, representing a more complete coverage of residential con-

struction in the 48 States plus the addition of
estimates for Alaska and Hawaii. To reflect this
new higher level of housing starts, the value put-inplace estimates for residential construction have been
revised back to January 1959. As a result of these
revisions, the 1959 value put-in-place estimates for
new private nonfarm dwelling units have been raised
by about 12 percent. The total of private residential
nonfarm construction, which includes—besides new
dwellings—additions and alterations and nonhousekeeping residential building, was thereby increased
by about 10 percent.
The surveys which resulted in the revised housing
starts series also yielded new information on farm
housing in all 50 States. Because of this information, the farm housing value put-in-place estimates
were revised back to January 1959. These new estimates reduced the level of total farm construction
expenditures in 1959 by about 23 percent.
Estimates for Alaska and Hawaii were also introduced in the value put-in-place series for all other
types of construction back to January 1959. This
resulted in increases of about one-half of one percent
over the original 1959 estimates.
In making comparisons of current data with those
for years prior to 1959, these revisions should be
taken into account. For a more complete discussion
of these revisions, see Technical Note in the Bureau
of the Census release, Construction Report C30-13.
The revisions which have been introduced back to
January 1946 involved the following categories of
construction: highways, office buildings, public hospitals, and petroleum pipelines. In addition, the
series on construction of military facilities was revised back through 1952.
Statistical procedures.—Three general methods
are used by the Bureau of the Census in making the
estimates of new construction activity, depending on
the kind of data available for the different types of
construction.
The first method.—This method is used for most
types of private and non-Federal public construction.
It involves the derivation of estimates of the value
of work started and the translation of these estimates
into value of work put-in-place by the application of
phasing patterns. Phasing patterns are estimates of
the monthly rate at which the total value of construction work is put-in-place from the start to the

New Construction, 1947-60
(Monthly data. Seasonally adjusted annual rates)
BILLIONS OF DOLLARS
60

TOTAL NEW CONSTRUCTION

PRIVATE RESIDENTIAL (NONFARM)

OTHER PRIVATE
. i l i . l . i l . . I..I..L. In . . I . . I . . I , . . . I . . I . . I n

1947

1948 . 1949

1950

..1..I..I

1951

Li.,

1952

1953

.id.Li.,

1954

niiil..!.. i.i..L.I.I ..I..Hi.. ..i..!,.i..

1955

1956

1957

1958

..i.iL.i..

..I..I..I,.

1959

I960

Source of data: Department of Commerce.

completion of construction. Separate patterns have
been developed which vary by type of construction,
project valuation, and month in which the work is
started. The estimates of value of work started are
derived by three separate procedures, as follows: (1)
For new housing units, an estimate of the value of
work started is obtained by multiplying the number
of units reported in the "new nonf arm housing starts
series" (p. 62) by average valuation figures derived
from building permit data and from surveys in nonpermit areas. The building permit valuations are
first adjusted to reflect the relationship between permit valuation figures and construction costs; (2)
The estimate of the value of work started on additions and alterations to private residential units is
derived from building permit data, adjusted for underreporting in permit areas, undervaluation, and for
work started in nonpermit areas; (3) For the remaining categories for which the first method is used,
data representing the value of contracts awarded in
the 37 Eastern States, are compiled by the F. W.
Dodge Corporation. Contract awards for State and
locally owned projects in the Western States, includ61781 O—60

ing Alaska and Hawaii, are compiled by the Bureau
of the Census from various construction publications. An estimate of the value of contracts awarded
for privately owned projects in the 13 Western
States is obtained by applying a factor derived from
building permit statistics to the Dodge contract
award data. The factor represents the ratio of the
value of building permits issued in the 37 States to
the valuation of permits issued in all 50 States, for
each of the major types of construction involved.
The sum of these data, which represents the estimated value of contracts awarded in the 50 States, is
adjusted for undercoverage—chiefly small projects
and work done by force account—and for architectural and engineering fees. The resulting adjusted
value of contracts awarded each month is assumed
to represent the value of work started in the following month.
The second method.—This method is used for most
Federally owned programs and for some public utility construction. The Census Bureau obtains monthly reports of construction expenditures made, or of
the estimated value of physical progress, oh Feder57

New Construction
Private expenditures

Year

Total new
construction expenditures Total

Residential nonfarm

Commercial and Other
industrial

Federal,
State,
and local
expenditures x

Construction contracts 2
Total value
Commercial
(index
and industrial
1947-49 = 100)
floor space
Millions of
square feet

Billions of dollars
8. 3

3. 6

2. 1

2. 6

2. 5

(3)

267

8. 7

5.9

3. 5
3. 7

1. 5

1. 4
.7
.3
.3
.4

2.9
2. 7
1.9
1.6
2. 2

(3)
(3)
(3)
(3)
(3)

145

3. 8
1. 7

2. 1
1. 6
.6
.5

2.4

6.4

1935
1936
1937
1938
1939

4. 2
6. 5
7.0
7.0
8. 2

2.0
3.0

1.0
1. 6
1. 9
2. 0
2. 7

.4
.6

.6
.9
1. 1
1. 1

2. 2
3.5
3. 1
3.4
3.8

(3)
(3)
(3)
(3)
(3)

56
97
123
67
93

1940
1941
1942
1943
1944

8.7
12.0
14. 1

5. 1

.8
1. 2
.5
.2
.3

1. 3

3. 6
5. 8

(3)
(3)
(3)
(3)
(3)

162
294
520
128
96

1.3
2.8
4.4

2.4
2.2
3.3
4. 7
6.3

(3)
(3)

221
354
243
211
147

1929

10. 8

1930
1931
1932
1933
1934

2.9

1.2

3. 9
3. 6
4. 4
6.2
3.4
2.0

_._

8.3
5.3

5.8

3.4

__.

12. 6
17.9
23. 2
24. 2

10. 4
14. 6
18. 5
17.9

1950
1951
1952
1953
1954

29. 9
32.7
34. 7
37.0
39.4

23. 1
23.4
23. 9
25. 8

1955
1956
1957
1958
1959 6
1959 (new series)

1945
1946
1947
1948
1949

3.0
3.5
1. 7

2. 2
1.3
4. 8
7. 5
10. 1
9. 6

.5
.5

2.8

2. 7
2. 8
2. 2
2. 5
3. 6

27.7

14. 1
12. 5
12.8
13. 8
15.4

44. 2
45. 8
47.8
48.9
54.3

32. 4
33. 1
33.8
33. 5
38. 1

56. 1

39. 8

1. 5
.7
.5
.5

1.2

1.5

1. 2
.9

1. 1

5. 6
6. 1
6. 5
7.3

7. 6

10. 7
6.3
3. 1

42
46

85. 7
103. 9
110. 4

6.9
9. 3
10. 8
11. 2
11. 7

155.0
160. 2
168. 8
175. 6
192.4
230.0
231. 3
235.4
256. 8
265. 4

3.5
4.0

8.0

4. 2

8. 1

18. 7
17. 7
17.0
18. 0
22. 3

5. 6
6. 7
7. 1
6. 0

8. 1
8. 7
9. 6
9. 5
9.8

11. 7
12. 7
14. 0
15. 4
16. 2

24. 5

6.0

9.3

16.3

6.0

70
33

4
4
4

237

225
197
235

238
5

298

436

421
356
439

12 Includes public residential construction.
Compiled by F. W. Dodge Corporation. Omits small contracts and covers rural areas less fully than urban.
34 Not available.
Excludes floor space of Atomic Energy Commission projects, because of security reasons. Valuation of projects for which floor space was omitted (in millions) *
1951,5 $980; 1952, $923; 1953, $479.
Revised series beginning January 1956; not comparable with earlier data.
• Old series, revised.
Source: Department of Commerce and F. W. Dodge Corporation.

ally owned construction from the Federal agencies
administering the various programs. Monthly estimates of construction by railroads are obtained from
the Interstate Commerce Commission. Monthly estimates of construction by telephone and telegraph
companies are obtained from the American Telephone and Telegraph Company and Western Union
Telegraph Company, respectively.

The third method.—This method is used for farm
service buildings, some highway construction, and
most public utility construction. As a first step, this
involves obtaining annual estimates and fitting a
trend line to the estimates of the value of construction expenditures in successive years. Monthly value
put-in-place estimates are then derived by applying
appropriate seasonal indexes to the monthly values

described by the annual trend line. The annual estimates for the current year are based on forecasts of
construction expenditures and are later revised to
reflect estimates of construction actually accomplished.
The annual forecasts and estimates are prepared
by: The U. S. Department of Agriculture for farm
service buildings construction; the Bureau of Public
Roads for highway construction; the Edison Electric Institute for electric light and power construction ; the American Gas Association for construction
of gas lines and gas plants; the Interstate Commerce
Commission for construction of interstate petroleum
pipelines, inflated to include an estimate for intrastate companies on the basis of data prepared by
the Chase Manhattan Bank, on the ratio of gross
investment in carrier properties by interstate companies to gross investment in all carrier properties.
Relation to other series.—The new construction activity series is one of the components in the gross national product series (see p. 4) and in the gross
private domestic investment series (see p. 22). The
series differ in one respect, however: gas and oil w^ell
drilling is included in the newT construction series
in the national accounts, but not in the series shown
here.
The definition of construction used in the new construction series is more inclusive than that in some of
the series pertaining to labor. The nonagricultural
employment series contains a component for employment in contract construction only, excluding employment on construction performed by force account.
(For a fuller discussion of noncomparability of these
data, see the Technical Note in the March 1955 issue
of Construction Review.) The series on average
weekly hours and average hourly and wyeekly earnings cover contract construction of buildings only.
Uses and limitations.—Although the new construction series indicates the current volume of this segment of economic activity, it does not serve the same
purpose as would a series on new work started. The
future trend in the series is determined to a considerable extent by past commitments made.
The new construction figures cannot be used as an
indicator of the physical volume of construction
without extensive adjustment for changes in price
and wage rates, technological advances, and other
relevant factors. Also, since the series does not include maintenance and repair, it cannot be related
directly to the total use of construction labor and

materials. Seasonally adjusted annual rates of new
construction in 1947-49 dollars, which reflect some
of these adjustments, are published monthly in Construction Report CSO and in Construction Review.
In addition, annual estimates of the value of maintenance and repairs are published in Construction Review.
While extensive adjustments are made for undercoverage of the source data now used, there is
no satisfactory factual basis for making these adjustments, and much reliance is placed on judgment
and opinion. The construction patterns used in
translating wTork started into work put-in-place may
be obsolete and do not reflect short-run changes due
to such factors as w7eather or the labor and materials
supply situation. The Bureau of the Census is developing plans for improvements in concepts and
methods for estimating the value put-in-place data.
Pending the introduction of such improvements, the
existing series are being continued.
Because of these limitations resulting from the
many different sources of data and the kinds of estimating procedures used, the error in the estimates
cannot be statistically measured. Caution should
be exercised in drawing conclusions from relatively
small month-to-month or year-to-year changes.
References.—Data on construction value put-inplace are published in more detail by type of construction and ownership in Construction Report
C30, Value of New Construction Put-in-Place, a
monthly publication of the Bureau of the Census.
This publication also presents data on a seasonally
adjusted annual rate basis, both in current dollars
and in constant (1947-49) dollars. Construction Review, a monthly publication of the Business and Defense Services Administration, U.S. Department of
Commerce, publishes value put-in-place data for new
public construction, by source of funds, in addition
to the value put-in-place data shown in Construction
Report CSO.

Historical monthly data for 1939-44 are published
in Construction Volume and Costs, 1915-1956, a
statistical supplement to Construction Review and
for 1945-57 in a pamphlet prepared jointly by the
U.S. Department of Commerce and the U.S. Department of Labor titled, Value of New Construction
Put-in-Place, 1943-58. The latter publication is
available upon request to the Bureau of the Census.
Data for 1958 and 1959 are published in Construction
Report CSO, issue numbers 4 and 13, respectively.

data for all other project types in the Dodge series
are based upon the Corporation's news reporting
service: interviews with architects, contractors,
owners, real estate brokers and others, to obtain inF. W. Dodge Construction Contracts Series formation on construction jobs being planned and
Description of series.—The total value index on the awarding of construction contracts. In the 11
construction contracts compiled by the F. W. Dodge Western States, the corresponding segment of the
Corporation covers private and public ownership series is based predominantly upon information from
for residential buildings, nonresidential buildings, building permits in a sample of geographic areas,
public works, and utilities construction. The series adjusted to reflect actual construction costs. This
includes additions and alterations, but not mainte- information is supplemented with data from secnance ancl repair. Coverage is not complete, par- ondary sources and field reports on public constructicularly for force-account work and smaller con- tion and on private construction in nonpermit
struction projects. Farm construction is excluded, portions of the sample areas.
and rural nonf arm construction is probably covered
In the series showing square feet of commercial
less fully than urban. Prior to 1956, Dodge con- and industrial construction, the Dodge category of
struction statistics covered only the 37 Eastern "Commercial" includes store buildings, restaurant
States. Beginning in January 1956, coverage was buildings, office and bank buildings, nonindustrial
expanded to 48 States and the value index, together warehouses and storage structures, and commercial
with its 1947-49 base, was adjusted back to 1947. garages and service stations. The category of "InCurrent issues of Economic Indicators show the dustrial" includes the manufacturing facilities (less
annual index for recent years and seasonally cost of processing equipment) and warehouses built
adjusted data for recent months.
by companies classified by the Bureau of the Budget
The major segments of the Dodge index of con- in their Standard Industrial Classification as "Manstruction contracts are compiled by several methods. ufacturing" and covered by the major group codes
Data on privately owned one-family houses are based 19 through 39.
upon a combination of building permits in the most
Data on construction contracts are available
active building permit areas and a sample in all other monthly in more detail by type of construction, geoareas. Permit costs are adjusted to reflect estimated graphic location, and ownership in F. W. Dodge
actual construction costs. In the 37 Eastern States, Corporation's several subscription statistical services.
More detailed descriptions of the sources of data and
the methods of compiling the estimates are published
in Construction Volume (md Costs, 1915-1956.

HOUSING STARTS AND APPLICATIONS FOR FINANCING
Description of series.—The "new series" of housing starts, containing data starting with January
1959, on both the total number and the number of
nonf arm new housing units on which construction is
started in the United States each month, with the
breakdown by public and private ownership, is compiled by the Bureau of the Census. The old series
was prepared by the BLS until June 1959 at which
time the Census Bureau assumed responsibility for
construction statistics, and continued the old series
until April 1960. Consequently, data are available
for both the old and new series for the 16-month
period January 1959 to April 1960, although the
Economic Indicators show the overlap only for 1959.
The description which follows refers to the new
series. Differences from the old series will be found
later. Independently of the Census (or BLS) com-

pilation, the Federal Housing Administration and
the Veterans' Administration provide reports on the
number of units involved in their respective
programs.
The new series is designed as a comprehensive
measure of the number of new housing units in
housekeeping residential buildings on which construction has started in the entire United States each
month. Start of construction is defined as the beginning of excavation for the foundation of the
building. A housing unit is defined as a single room
or group of rooms intended for occupancy as separate
living quarters by a family, a group of unrelated individuals living together, or by a person living alone.
A housekeeping residential building is a building
consisting primarily of housing units. Housing
starts exclude the construction of group quarters

(such as dormitories, fraternity houses, nurses'
homes, rooming houses, etc.), transient accommodations (such as transient hotels and motels) and units
in primarily nonresidential buildings. Also excluded is the production of mobile homes (or house
trailers) which is not classified as construction.
Housing units are classified as public or private
on the basis of ownership. They are classified as
farm or nonfarm on the basis of responses of the
builders, in a sample of units, to questions regarding
the intended use of the land on which the building is
located.
Statistical procedures.—Four steps are involved in
preparing the monthly estimates.
(a) Each month the Census Bureau mails a questionnaire to some 3,500 local government officials
who issue building permits for authorized construction in incorporated places or in counties and townships throughout the country. These 3,500 places are
a sample of the approximately 10,000 places identified in 1959 as issuing permits and account for over
90 percent of all permits issued. Information is requested, among other things, on the number of pri-

vately owned housing units authorized by building
permits issued during the month.
(b) The second step is to convert the permit estimates to starts. The information required for this
conversion is obtained through a continuing,
monthly, sample survey of building permits, conducted in a sample of about 225 places. In the first
half of 1960, the monthly sample ranged from 6,000
to 12,000 housing units for which permits were
issued. For each permit in the sample, information
is obtained on the month in which construction
started, establishing it as either prior to the month
the permit was issued, during the month of permit
issuance, the following month, the second following
month, etc. The number of starts in any given month
is then calculated by applying the proportion of
actual starts of units authorized during the month,
the proportion of units started during the given
month but authorized in the previous month, etc., to
the estimates of the total number of permits authorized during these months in all 10,000 places, as estimated from the 3,500 place sample. This is done
separately for each of the four major regions of the

Nonfarm Private Housing Starts, 1947-60
(Monthly data.

Annual rates)

THOUSANOS
2,000
_ N E W SERIES
BEGINS

NON-FARM PRIVATE HOUSING STARTS
(UNADJUSTED)
(SEASONALLY ADJUSTED)
1,500

1,000

STARTS UNDER FHA

500

1947

1948

1949

1950

1951

1952

1953

STARTS UNDER V A

1954

1955

1956

1957

1958

1959

I960

SOURCE OF DATA' DEPARTMENTS OF COMMERCE AND LABOR

Housing Starts and Applications for Financing
[Thousands of units]
Nonfarm housing starts

Private

Year
Total private and
public !

Government programs
Total
Total

1929

__ _

1930
1931
1932
1933
1934
1935
1936
1937
1938
1939

_
_

„_

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
._ _ _
1959 (old series)
1959 (new series) _« _

Proposed home2 construction

__
._

___

509. 0

330.
254
134.
93.
126.

0
0
0
0
0

FHA

Applications
for FHA
commitments

Requests
for VA
appraisals

0
0
0
0
0

221.0
319.0
336. 0
406.0
515. 0

215. 7
304. 2
332. 4
399.3
458. 4

14.0
49.4
60.0
118. 7
158. 1

20.6
47.8
49. 8
125. 1
167. 8

602. 6
706. 1
356. 0
191. 0
141. 8

529. 6
619 5
301.2
183. 7
138. 7

180.
220.
165.
146.
93.

1
4
7
2
3

217.9
277. 7
234.8
144. 4
62. 9

209. 3
670. 5
849.0
931. 6
1, 025. 1

208. 1
662. 5
845.6
913. 5
988.8

41. 2
69.0
229.0
294. 1
363.8

56. 6
121. 7
286. 4
293. 2
327.0

1, 396. 0
1, 091. 3
1, 127. 0
1, 103 8
1, 220. 4

1, 352. 2
1, 020. 1
1, 068. 5
1 068 3
1, 201. 7

686. 7
412. 2
421. 2
408. 6
583.3

486. 7
263. 5
279.9
252. 0
276. 3

^ 200. 0
148. 6
141. 3
156. 6
307. 0

1, 328. 9
1, 118. 1
1, 041. 9
1, 209. 4
1,378. 5

1, 309. 5
1, 093. 9
992.8
1, 141. 5
1, 342. 8

669.6
460.0
296. 7
397. 5
441. 8

276. 7
189. 3
168.4
295. 4
332. 5

392. 9
270.7
128.3
102. 1
109.3

306. 2
197. 7
198.8
341. 7
369. 7

620.8
401.5
159. 4
234. 2
234. 0

1, 531. 3

1, 494. 6

441. 8

332. 5

109.3

369. 7

234.0

1
4
7
2
3

397.
192.
267.
253.
338.

7
8
9
7
6

(3)
m
m
(3)
(3)

164. 4
226.3
251. 4
535. 4

1 Military housing starts, including those financed with mortgages insured by FHA under Section 803 of the National Housing Act, are included in publicly
financed
starts but excluded from the privately financed starts for FHA and Government programs.
2
Units in mortgage applications for new home construction.
-^
34 Not available.
Partly estimated.
NOTE.—Monthly data on new nonfarm housing starts available beginning 1939; annual from 1889. In May 1960 the Bureau of the Census issued a new housing
starts series which provided an overlap with the old series to January 1959. The new series is issued monthly and covers farm as well as nonfarm housing starts.
For the year 1959, according to the new series, total housing starts, farm and nonfarm, public and private, were 1,553,500, of which 1,516,800 were private.
«
Sources: Department of Labor prior to June, 1959, Department of, Commerce, Federal Housing Administration (FHA), Veterans' Administration (VA).

United States, and within each region by inside or
outside Standard Metropolitan Statistical Areas.
Finally, an adjustment is added to take account of the
estimated 4.7 percent of construction in permit areas
which is started without the issuance of a permit.
This factor is based primarily on information from

the 1956 National Housing Inventory and, if necessary, will be modified as current survey information
now being collected becomes available.
(c) Information on new private housing starts
in areas not covered by building permits is obtained
from field surveys in a sample of 56 large areas

"New nonfarm housing starts" are based on administrative reports of the number of units on which
first compliance inspections have been made by those
agencies. The first inspection is usually made after
the footings are in—normally only a slight lag from
the time construction is considered started in the
Census series. The FHA and VA figures for "Proposed home construction" are also based on administrative reports of the two agencies. The number of
units for which FHA has received applications is
limited to those for commitments on 1- to 4-family
home mortgages, thus making it more nearly comparable with the VA series since the VA program
covers only homes to be built for occupancy by
veteran owners.
Relation to other series.—The "new series" on housing starts is not directly comparable with the series
issued previously for several reasons. The major
definitional change is the inclusion of farm construction in the new series (although nonfarm figures are
shown separately, as well as total) whereas the old
series was intended to cover only nonfarm housing.
The new series also includes some seasonal, low-valued
and possibly temporary units, formerly excluded. In
addition, it includes data for Alaska and Hawaii not
covered by the old series. Another reason for the
difference in the level of the two series results from
the more nearly complete coverage of the new series,
arising mostly from the more intensive coverage of
new construction in areas formerly classified as nonpermit. There are also major differences between the
two series arising from the nature of the measurement
January
75. 4 July
112.6
' February
76. 9 August
114. 4 processes. Beginning with 1960, the new series unMarch
96.0 September
108. 2 dertakes to make direct measurements of housing
April
111.9 October
104.5 units started within each month. The old series repMay
114.6 November
90. 8 resented more nearly a measurement of the amount
June
112.5 December
79. 5 of construction which would have been started in a
A preliminary estimate is issued 15 to 20 days particular month if the time lag between permits and
following the end of the month. This preliminary the actual start of construction found in some past
estimate will differ somewhat from the final figures survey period had prevailed in the particular month.
The series on new housing starts has a limited
for the following reasons: (a) the estimate of the
number of housing units authorized by permits dur- relationship to Census of Housing figures. Units
ing the month is based on a smaller sample of about started should not be added to housing inventory
1,700 places; (i) not all the results of the field survey figures without an adjustment to allow- time for comused to convert permit authorizations to starts are pletion. Also, although new construction usually
received in time to be used; and (c) housing units accounts for the greater part of the difference in instarted prior to the issuance of permits may not be ventory reported in successive housing censuses, there
adequately accounted for. Final revisions are made are other changes too, such as demolition, disaster
losses, and additions and losses due to conversions or
within the next two months.
The figures for the FHA and VA programs under mergers. The magnitudes of these factors are in(Standard Metropolitan Statistical Areas, or individual counties or groups of counties). In the survey,
data on starts are first obtained through contacts with
previously identified individuals or organizations
familiar with construction activity in these areas.
This information is then checked by field visits to the
sites of reported construction. As a final step, estimates of starts not provided by the sources are prepared on the basis of an intensive canvass by enumerators of a subsample of land areas within the 56
primary areas. The separate estimates for permitissuing areas and for nonpermit areas are added to
produce the figures for privately-owned housing.
(d) Information on the number of public units
started is obtained directly from the sponsoring Federal, State, and local agencies. This figure, added to
the estimate for private units, gives the estimate of
the total number of housing units started each
month.
The seasonally adjusted annual rate of starts of
private units, published in current issues of Economic
Indicators, is based upon seasonal indexes calculated
from the prior BLS series for housing starts. It is
obtained by making a separate seasonal adjustment of
permit starts in each of the four regions using the
standard Census method (Univac No. II, see reference on p. 64) for seasonal adjustment, and of total
nonpermit starts and then adding the five individual
adjusted series. The implicit seasonal factors for
total private nonfarm housing starts for 1959 are as
follows:

dicated in the National Housing Inventory of 1956. nent financing after completion may not be underThe census also includes certain types of places written. Also, some applications for FHA commitwhere people live which are not counted in the new ments or requests for VA appraisals lapse. There
series, such as living quarters in institutions or pri- is some duplication of units in applications for FHA
marily nonresidential or transient structures.
commitments and requests for VA appraisals. In
The Census Bureau also publishes data on the cases where both agencies issue valuation commitnumber of housing units authorized by building per- ments, FHA makes the compliance inspection and
mits each month. These figures differ from housing the unit is reported as an FHA start, even though the
starts in that the units are reported in the month mortgage may finally be underwritten by VA or by
of permit issuance, rather than start, and that they neither agency. As mentioned above, the FHA series
exclude units in nonpermit areas.
on housing starts includes rental housing, whereas
Data compiled for the housing starts series are the FHA applications series covers only 1- to 4-famused in the preparation of estimates for the series on ily homes.
value of new construction put-in-place described in
References.—Monthly data on housing starts are
the preceding section.
published in somewhat greater detail in ConstrucUses and limitations,—The series on housing starts tion Reports, Housing Starts (Census series C-20).
serves as an important guide in the formulation of Related information on residential housing units aunational housing policy and as an indicator of resi- thorized by permits is published in Construction
dential building activity. The fact that current data Reports, Building Permits, New Residential Conare not directly comparable to those for years prior struction Authorized in Permit-Issuing Places (Cento 1959, for the reasons stated above, may limit their sus series C-J$). Much of this information is reusefulness in some circumstances. Statistics for 1959 printed in Construction Review published monthly
on both bases are published as a bridge between the by the Department of Commerce. Historical data
two series. In addition, the estimates for the new for 1899 to 1958 may be found in: Construction Durseries are subject to a number of factors affecting ing Five Decades, Historical Statistics 1907-1952
their quality. First, both the level of the estimates (BLS Bulletin UJfi); Trends in Building Permit
and the measures of month-to-month change are sub- Activity (BLS Bulletin 1%1$); Nonfarm Housing
ject to sampling error. Calculations of the sampling Starts 1889-1958 (BLS Bulletin 1260). A more devariability have not been completed; such estimates tailed technical description of the methods used to
will be published at a later date. Secondly, although prepare the new series of housing starts may be found
the new series is at a higher level than the old one, in the Census Report C-20 No. 11 (Supplement),
it is possible that there is still some understatement May 1960. A description of the old series is given
of starts, due to the difficulty of locating and iden- in Techniques of Preparing Major BLS Statistical
tifying construction projects in nonpermit areas. A Series (BLS Bulletin 1168), December 1954.
third limitation is in the seasonal adjustment facFor the government programs, monthly data from
tors which are based on the old series for which the 1952 on starts and on proposed home construction
seasonal movements may have been somewhat differ- are given in current issues of Housing Statistics, a
ent.
monthly publication of the Housing and Home FiThe FHA and VA series indicate the importance of nance Agency.
these government programs in the field of new home
For the Census Univac II method of seasonal
construction. Certain limitations in. these series
should be observed, however, particularly in their adjustment see Electronic Computers and Business
relation to other data. Although FHA and VA may Indicators by Julius Shiskin, published as Occasional
make inspections during construction and the units Paper No. 57 by the National Bureau of Economic
may be counted as FHA or VA "starts," the perma- Research, especially Appendix A.

TRADE SALES AND INVENTORIES
Wholesale Trade

tory estimates are based on the values carried on the
books of the reporting establishments, usually the
cost of merchandise on hand.
Both the sales and inventories series were revised
beginning with data for January 1948; these new
series are not comparable with the old series for the
period 1939 through 1948, primarily because the data
for the later years exclude wholesale establishments
with no paid employees. These establishments accounted for less than two percent of total wholesalers'
sales in 1948.
Statistical procedures.—The revised series which
begin with data for January 1948 were introduced
in August 1957. They incorporate benchmark data
from the 1954 Census of Business, with 1948 data
adjusted to the scope of the 1954 Census, e.g., to exclude data for establishments with no paid employees
and to take into account certain changes in classification. The current series are derived by extrapolating modified 1954 Census of Business data on the
basis of monthly reports to the Bureau of the Census.

Description of series.—The series on wholesale
sales and inventories represent sales and inventories
of all establishments classified in wholesale trade and
are based on the definitions and classifications of the
Standard Industrial Classification, which are used
in the Censuses of Business, except that: (1) operations of manufacturers' sales branches and offices
and marketing stations of petroleum refiners have
been excluded, since sales and inventories of these
establishments are covered in the manufacturing
series, and (2) sales of agents and brokers are included on the basis of actual receipts of the agents
and brokers rather than as the total value of goods
sold as reported in the Censuses of Business. The
term "sales" as used here signifies essentially sales or
shipments, although some respondents probably report orders (bookings) as sales. Sales are net, i.e.,
less discounts, returns and allowances, and include all
business receipts of the reporting establishments, not
just receipts from sales of merchandise. The inven-

Retail Sales and Inventories, 1947-60
{Monthly data.

Seasonally adjusted)

BILLIONS OF DOLLARS

INVENTORIES-NONDURABLE
INVENTORIES-DURABLE

RETAIL SALES-NONDURABLE
DETAIL SALES-DURABLE

.•..I..........I...

1947 1946

1949

1950 1951

1952

1953

1954 1955

1956

1957 1958

1959 I960

SOUftGC OP DATA • DEPARTMENT OF COMMERCE

Trade Sales and Inventories
Wholesale

Department stores

Retail
Inventories 2

Sales

Year
Sales :

Inventories 2
Total

Durable Nongoods durable
goods
stores
stores

Total

Durable Nongoods durable
goods
stores
stores

(4)

1. 3

2. 7

3. 5

2. 6

5. 5

2. 1

3. 9

1. 1
1. 4

2. 7

6. 1
7. 8

2. 5

2.2

3. 1

1940.
1941.
1942.
1943.
1944.

2.4
3.0
3.4

3. 8

3.
4.
3.
3.

3.9

5.3
5.9

1945.
1946
1947.
1948.
1949

4.5

4.6

6. 5

6. 0
7. 3
7. 5

6. 6
7. 6
7.9
7. 6

8.5

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

4.2

7.2

2
0
8
7

9. 7

9. 1
9. 7
10. 0
10. 5
10. 4

10. 6
11. 3
11.3
11. 1
12.3

11. 4
13.0
12. 7
12.0
12. 6

8.4
9.4

9. 6

9.8

4.6

4. 8

10. 0
10. 9
10.9
6

(4)

4. 0

1939.

12.0
13. 0
13. 5
14. 1
14. 1
15. 3
15. 8
16. 7
16. 7
18.0

3. 4

6
6
3
4
4

37
44
49
56
62

38
46
64
55
58

70
90
98
104
99

60
78
94
107
100

1
5
7
0
0

107
112
114
118
118

110
131
121
131
128

12. 7
13.2
13. 1
13. 2
13. 3

128
135
135
136
144

136
148
152
148
156

1.0
1.0
1.2

3. 7
4. 3
4. 7

8.0

2. 8

7. 6
7.6

2.2
2.2

3.
4.
5.
5.
5.

1.
2.
3.
3.
3.

3
3
1
5
7

5. 2
6. 2
6. 9
7. 4

7. 9
11. 8
14. 1
15. 8
15. 3

2. 4
3. 9
5. 5
6. 7
6. 4

5. 5
7.9
8.6
9. 1
8.9

4.
4.
4.
5.
4.

4
5
6
0
8

5.
5.
5.
5.

6
5
7
3

6.0

3.2

7.2

3.2

7. 6
8. 5
8. 9
9. 1
9. 2

19.9
21. 2
21. 6
22. 7
22. 1

9. 7
10. 3
11.0
11. 4

23.9
23. 9
24.5
24. 0
24.3

11. 2
10. 7
11. 4
10. 8
11.0

4.0

Inventories 3

Index, 1947-49=100

Billions of dollars
1929.

Sales

8. 8
9. 7
9. 9
10. 7
10. 1

11.
11.
11.
12.
12.

1
Monthly average for year.
23 Book value, end of period, seasonally adjusted.
Retail value, monthly average for year.
4
Not available.
s Data for wholesale trade sales and inventories for 1948 and later years are not strictly comparable with earlier data. The estimates were revised in 1957 to conform6 to the 1954 Census of WhDhsale Trade, with 1948 data adjusted to the scope of the 1954 Census.
In 1951, a basic change in the method of estimating retail sales directly from sample data (rather than linked to a Census of Retail Trade) was introduced. The
"new"
series is not comparable with the sales figures for earlier periods.
7
Retail inventory estimates beginning with the year-end 1950 utilize as benchmarks the 1952 Annual Survey of Retail Trade of the Bureau of the Census. The
"old" estimates for 1938 through 1950 are based on the Censuses of Business for 1939 and 1948 and are not comparable with the "new" series.
Source: Department of Commerce and Board of Governors of the Federal Reserve System.

Sales and inventories of merchant wholesalers are
compiled and released by the Bureau of the Census,
on the basis of dollar estimates reported monthly by
its probability sample of merchant wholesalers representing all kinds of business. Sales and stocks of
all other types of wholesalers, i.e., farm assemblers,
agents and brokers, and petroleum bulk stations
other than refiner-marketers, are derived by OBE by

extrapolating the sales reported by these segments in
the 1954 Census of Business on the basis of the current movements as reported to the Bureau of the
Census by the merchant wholesalers.
The sales and inventories data are seasonally adjusted by the Office of Business Economics, using the
ratio-to-moving-average method with appropriate
modifications. The magnitudes of the seasonal ad-

justments are suggested by the following comparisons of unadjusted and seasonally adjusted data for
1959.
Unadjusted
Sales

Jan
11. 1
Feb___ 10. 7
March- 11.9
April _ _ 12. 2
12. 3
May
12. 8
June
J u l y — 12. 7
Aug__- 12. 2
Sept___ 13.0
13. 0
Oct
Nov___ 12.5
Dec___ 13.0

Seasonally adjusted

Inventories
Sales
]inventories
[Billions of dollars]

11. 8
11. 9
12. 0
12.0
12. 2
12. 4
12. 4
12.4
12. 6
12. 8
12. 9
12. 6

11.8
11. 9
12. 2
12. 4
12.5
12. 6
12.5
12. 2
12. 5
12. 0
12. 3
12. 7

11. 9
11. 9
12. 0
12. 1
12. 2
12. 4
12. 5
12. 6
12.5
12. 5
12. 6
12. 6

Implicit seasonal
adjustment factors
Sales

94. 1
89. 9
97.5
98. 4
98.4
101. 6
101. 6
100.0
104.0
108. 3
101. 6
102. 4

Inventori

99. 2
100.0
100.0
99. 2
100.0
100.0
99. 2
98. 4
100. 8
102. 4
102. 4
100. C

Relation to other series.—The wholesale sales and
inventories series are most similar to, and are largely
based upon, the monthly merchant wholesale trade
series of the Bureau of the Census. They differ in
that the coverage of the series that appear in Economic Indicators is greater, including as they do
wholesalers other than merchant wholesalers. Because of the position of wholesale trade in the distribution system of our economy, wholesale sales and
inventories data are most meaningful when used together with similar data for manufacturing and retail trade. The wholesale, retail, and manufacturing
sales and inventories series can be summed to obtain
consistent aggregate series for total business, although there is a considerable amount of duplication
in the sales total.
Uses and limitations.—The monthly wholesale
trade series are important economic indicators which
reflect the level of economic activity at an intermediate stage of the distributive process. The importance of wholesalers in our economy varies by industry, and this fact should be recognized when using the data, especially since the operations of
manufacturers' sales branches and offices and marketing stations of petroleum refiners are excluded entirely from the estimates for wholesalers.
The monthly estimates of sales and inventories are
based upon a sample and are therefore subject to
sampling variability. In addition, they are subject
to nonsampling errors, such as the failure of respondents to submit reports in time for tabulation, to submit correct figures, or to respond at all. The estimates of sales are more accurate than the estimates of
inventories. The statistics on inventories are based
on estimates by respondents or imputations due to

nonresponse to a greater extent than are sales statistics, reflecting the fact that wholesalers do not
keep inventory records on a monthly basis to the
same extent that they keep monthly sales records.
Comparisons of the monthly estimates of both sales
and inventories with the Census of Wholesale Trade
when those data become available have shown the
monthly estimates to be well within acceptable standards of reliability. Those differences shown by such
comparisons that are statistically significant stem
from factors that are relatively constant over time
and, consequently, affect only to a slight degree the
reliability of the series as a measure of cyclical
change.
References.—Sales and inventories data for wholesale trade, seasonally adjusted as in current issues of
Economic Indicators, are issued first as monthly
press releases by OBE and are published shortly
thereafter in the Survey of Current Business. Comparable monthly data from 1948 are available on request to OBE. Unadjusted sales and inventories
data for merchant wholesalers are published by the
Census Bureau in the Monthly Wholesale Trade
Report.
More complete descriptions of these series have
been published in the following issues of the S'urvey
of Current Business: August 1948, October 1951,
October 1952, December 1953, and August 1957, and
in the biennial Business Statistics, a supplement to
the Survey. The Monthly Wholesale Trade Report
contains a detailed description of the Census Bureau's monthly series covering merchant wholesalers.

Retail Trade
Description of series.—The series on retail sales
and inventories represent sales and inventories of
all establishments classified in retail trade. Sales
are net, i.e., less discounts, returns and allowances,
and include all business receipts of the reporting
establishments, not just receipts from sales of merchandise, as well as sales and excise taxes. Inventories are valued at the cost of merchandise on hand.
The separation of estimates into "durable goods" and
"nondurable goods" is based upon classifications of
stores according to the durability of the commodities
accounting for the major portion of their sales.
In 1951 a basic change in the method of estimating retail sales was introduced. As a result, the

"new" series which starts in January 1951 is not
comparable with the sales figures for earlier periods.
In early 1957 the new series was again revised back
to January 1951 to exclude data for milk dealers
engaged in processing on the premises; this exclusion
conforms to a change made in the Standard Industrial Classification. A "new" series on inventories,
comparable in concept and coverage to the new series
on sales begins with December 1950. The new series
is not comparable with the series for earlier periods.
Statistical procedures.—Census of Bet-ail Trade
data for the years 1929, 1933, 1935, 1939, and 1948
were used as benchmarks for the sales series for the
period 1929-1951. Sales estimates for the intercensus years between 1935 and 1951 were based in large
part on changes in sales tax collections of 20 States,
whose sales accounted for 40 percent of total retail
sales, supplemented by data from special Internal
Bevenue Service tabulations, Federal Beserve System data on department stores and data on the taxable quantity and average price of gasoline. Monthly
estimates of sales were derived from data reported
to the Bureau of the Census by a constant sample of
large independent retailers and chain stores.
Beginning with January 1951 monthly estimates
have been prepared by the Census Bureau directly
from sample data. The new estimates are not linked
to a Census of Business benchmark, a factor that accounts for most of the difference in level between
the sales estimates for 1951 indicated by the old and
new series. The new estimates from the probability
sample of reporting firms are derived essentially by
weighting the reported sales of each firm or store in
the sample by a value dependent upon its probability
of selection.
The year-end estimates of inventories prior to 1950
were based on the Censuses of Retail Trade for 1939
and 1948, the Internal Bevenue Service's Statistics
of Income, Part 2, and Federal Beserve data on department store inventories. Betail inventories estimates beginning with December 1950 utilize as
benchmarks the data in the 1952 Annual Retail Trade
Report of the Bureau of the Census. Monthly estimates are made by the Office of Business Economics
and are based on sample data reported to the Bureau
of the Census and on the Federal Beserve System's
monthly data on inventories of department stores.
The sales and inventories data are seasonally adjusted by the Office of Business Economics, using the
ratio-to-moving-average method, modified where ap-

propriate. The magnitude of the seasonal adjustments are indicated by the following comparison of
unadjusted and seasonal^ adjusted data for 1959.
Unadjusted
Sales

Jan
Feb.__
MarchApril. _
May
June
July___
Aug—
Sept___
Oct
Nov
Dec___

16.2
15.017.2
17.6
18. 6
18.7
18.3
18. 1
17.6
19. 1
17.6
21.5

Seasonally
adjusted

Sales
][nrentories
[Billions of dollars]

23.4
24.0
24.7
25.3
25.0
24.6
24.6
24.5
24.3
25. 1
25.2
23.4

17. 5
17.6
17.9
18.0
18.2
18. 2
18.3
18. 1
17.8
18. 3
17.8
17. 5

1Inventories

24.2
24. 1
24.2
24.5
24.5
24.8
25. 1
24.8
24.8
24. 7
24.2
24.3

Implicit seasonal
adjustment factors
Sales

92.6
85.2
96. 1
97.8
102.2
102.7
100.0
100.0
98.9
104.4
98.9
122.9

Inventories

96.7
99.6
102. 1
103.3
102.0
99.2
98.0
98.8
98.0
101.6
104. 1
96.3

Relation to other series.—Retail sales data reflect
a substantial portion of personal consumption expenditures and are, therefore, related to the personal
consumption expenditure estimates that appear in the
national accounts. They are different from personal
consumption expenditures in that they include purchases by others than households and exclude such
major expenditures as household expenditures for
personal services, rent, medical services, etc. Retail
sales and inventories data are closely related to wholesale trade and manufacturers' sales and inventories
data, reflecting as they do the activities of the final
stage of distribution in our economy.
Uses and limitations.—The monthly retail trade
series reflect the trend of a major part of personal
consumption expenditures well in advance of the
availability of more comprehensive data. They and
the inventories series are useful indicators of probable
future economic activity at the manufacturing and
other earlier stages of production and distribution.
The monthly retail sales estimates are based on a
probability sample and are, therefore, subject to
sampling variability, as well as such biases as nonresponse or reporting errors. The monthly sales
estimates are compared with Census of Business
data, when those statistics become available. Although differences for individual kinds of business
occur reflecting, among other things, differences in
classification due to differences in data collection
methods, measures of total :petail sales from these two
sources have not differed significantly. To illustrate, the sum of the twelve monthly estimates of
total retail sales were within one-half of one percent
of the 1958 annual estimate of retail sales shown by
the 1958 Census of Business;.

The monthly retail inventories statistics are less the relationship of total department store sales or
accurate than the sales statistics. Fewer retailers inventories in the district to the total for the United
maintain monthly records of their inventories than States for the years 1947-49. The method of seasonal
monthly records of sales, and, consequently, the adjustment used is a variant of the ratio-to-movingsources of data on current inventories are not as good. average method. It allows for changes in the seaReferences.—Sales and inventories data for retail sonal pattern over time and relies less on mathetrade, seasonally adjusted as in current issues of Eco- matical formulae as the final determinants of the
nomic Indicators, are issued first as monthly press re- seasonal adjustment factors than do most other
leases by OBE and are published shortly thereafter methods.
Relation to other series.—The Federal Reserve inin the Survey of Current Business. Sales data are
also published by the Bureau of the Census in the dexes of department store sales and inventories and
Monthly Retail Trade Report. Advance estimates the Census-OBE dollar estimates of retail trade sales
are published ten days after the report month in and inventories, including the separate dollar estimates of department store sales and inventories, are
Advance Report of Retail Sales.
not
entirely comparable conceptually. The CensusMore complete descriptions of these series have
OBE
salos data include retail sales taxes and retail
been published in the following issues of the Survey
excise
taxes, whereas the Federal Reserve series exof Current Business: June 1948, October 1951, Sepclude
both.
Inventories are valued at cost for the
tember and November 1952, January 1954, and June
Census-OBE
series, at retail value in the Federal Re1957, and in the biennial Business Statistics, a suppleserve
series.
Both
the Census-OBE and the Federal
ment to the Survey. The Monthly Retail Trade ReReserve
monthly
series
are adjusted for seasonal
port contains a detailed description of the Census
variation
and,
in
the
case
of sales, for the number of
Bureau's monthly retail trade series. A description
of the sample and estimating procedure used for that trading days in the month. The latter adjustment
series and additional information on the reliability also is made in the unadjusted Federal Reserve series.
Uses and limitations.—Considerable use is made of
of the estimates are available in a Bureau of the Census pamphlet entitled Description of the Sample for the Federal Reserve indexes of department store sales
and inventories, especially at the local level. While
the Monthly Retail Trade Report.
they are valuable indicators of the relative sales and
Department Stores
inventory positions of this limited but important
Description of series.—Monthly indexes of depart- segment of retail trade, they do not reflect the charment store sales and inventories are prepared by the acteristics of all retail trade. The month-to-month
Board of Governors of the Federal Reserve System, changes in the "retail" and "department store" series
based on data collected and published by the twelve have on occasion moved in opposite directions, and
Federal Reserve Banks. The sales index relates to even when the movements have been in the same
the average daily sales of the department stores, in- direction the magnitudes of the changes may be
cluding sales of services as well as of merchandise. substantially different.
The inventory index relates to end-of-month invenReferences.—The indexes of department store sales
tories at retail value. The selection of the depart- and inventories for the United States and for each of
ment stores from which the data are collected is made the Federal Reserve districts are published monthly
by the individual district banks, in order to provide in the Federal Reserve Bulletin. Monthly data for
data for some cities or areas within the districts, as periods prior to those shown in Economic Indicators
well as an index for each district as a whole.
are available from the Board of Governors of the
Statistical procedures.—Reports from the individ- Federal Reserve System. A detailed description of
ual department stores are mailed directly to the ap- the series was presented in the December 1957 issue of
propriate district bank. The U.S. indexes of depart- the Bulletin. A description of the method of seasonal
ment store sales and inventories are computed by adjustment used by Federal Reserve was in the June
weighting each of the district indexes according to 1941 issue of the Bulletin.

MANUFACTURERS1 SALES, INVENTORIES, AND NEW ORDERS
Description of series.—Manufacturers' sales, inventories, and new orders are estimated monthly in
a program conducted jointly by the Office of Business
Economics and the Bureau of the Census. The term
"sales'7 as used here represents manufacturers' receipts, billings or the value of shipments to customers. Sales are net, i.e., less discounts, returns and
allowances, and were adjusted for renegotiation of
war contracts in the relevant years. In general, the
figures represent sales and receipts involved in any
activity of companies classified as manufacturers, including nonmanufacturing activities. Recently, efforts have been initiated to obtain "divisional" reports from large multi-industry firms in order to
produce, in time, more detailed industry statistics.
Sales for export as well as those for domestic use
are included. Sales of foreign subsidiaries are excluded, but sales to a foreign subsidiary by a domestic firm are included.
Inventory data are book values of stocks on hand
at the end of the period and include purchased materials, goods-in-process, and finished goods. All inventories owned by a company are covered, including
those in warehouses, manufacturers' sales branches,
etc., as well as in factories. In general, inventories
are valued at the lower of cost or market price.
About 15 percent of manufacturers' inventories are
valued on a last-in, first-out (LIFO) basis.
The new orders series represents new orders (net
of cancellations) received during the period.
Statistical procedures.—Current estimates of manufacturers' sales and inventories are made on the
basis of reports received in the Monthly Industry
Survey program, under which information on sales,
inventories, and new orders is collected from a sample of manufacturing companies. Collection and
tabulation of this survey were transferred in March
1957 from OBE to the Bureau of the Census, and
the sample design and other aspects of the survey are
being reviewed preparatory to some revision and expansion. The collection of "divisional" reports, referred to above, has already been initiated, as has
been expansion of the number of companies in the
sample. Information from the survey is used by
OBE to extrapolate benchmark estimates based on
annual corporate data through 1954 published by the
Internal Revenue Service in Statistics of Income,
Part 2, and on Internal Revenue Service noncorpo-

rate data for alternate years 1945 through 1953' and
1954.
New orders estimates are obtained indirectly.
Unfilled orders estimates as of the end of the years
1947, 1952, and 1954 were made, and movements
from these points were computed. To derive estimates of levels, the reporting sample was stratified
by industry and size; and in each stratum, the sample ratio of unfilled orders on December 31 to annual
sales was applied to total sales for that year. The
month-to-month percentage changes in unfilled orders shown by the sample are used to obtain the
monthly movements of total backlogs in each
stratum. Net new orders are then computed by
adding the estimated monthly sales to the change in
unfilled orders.
The series are seasonally adjusted by the Office of
Business Economics, using the ratio-to-movingaverage method, modified when necessary. The magnitudes of the seasonal adjustments are suggested by
the following comparison of unadjusted and adjusted
sales and inventories data for 1959.
Unadjusted
Sales

Jan__
27. 3
Feb___ 27. 5
March_ 30. 6
April _ _ 30.9
May _ _ 30. 7
June_ _ 32.0
July___ 29. 2
Aug
28. 6
Sept___ 30. 0
Oct
30. 8
Nov___ 28. 5
Dec___ 30. 6

Seasonally adjusted

Sales
Inventories
[Billions of dollars]

49. 8
50. 2
50. 6
51. 1
51. 4
52.0
51. 8
51. 5
51. 6
51.4
51. 8
52.9

28. 1
28. 5
29. 1
30. 3
30. 7
31. 2
30.9
29. 3
29. 8
29. 4
29. 0
30. 8

Implicit seasonal
ad jus-tment factors

:Inventories

Sales

Inventories

49. 5
49. 9
50. 5
51. 1
51. 6
52. 1
52. 2
52. 1
51.9
51. 5
51. 6
52. 4

97. 2
96. 5
105. 2
102. 0
100.0
102. 6
94. 5
97. 6
100. 7
104. 8
98.3
99.4

100. 6
100. 6
100. 2
100.0
99.6
99. 8
99. 2
98. 8
99.4
99. 8
100.4
101.0

Relation to other series.—The manufacturers' sales
and inventories series are closely related to the sales
and inventories series for wholesale trade and retail
trade. When summed these series constitute consistent series for total nonfarm business. The sales
and inventories series are similar to the sales and
inventories items in the FTC-SEC Quarterly Financial Report for Manufacturing Corporations. The
two series are not entirely comparable, especially for
specific industries, because of differences in coverage
(e.g., the Quarterly Financial Report covers only
corporations) and differences in consolidation of the
reporting units.
The inventories data are the basic data used in
computing estimates of changes in the book value of

Manufacturers'

Sales, Inventories, and New Orders
[Billions of dollars]

Sales l

]inventories

New orders, net*
Durable goods

Year
Total

Durable
goods

Nondurable goods

Total

Durable
goods

Nondurable goods

Total

Nondurable goods

Total

Machinery
and transportation
equipment

1929

5. 9

2. 3

3. 5

1930
1931
1932
1933_
1934

4.
3.
2.
2.
3.

8
6
6
9
6

1. 7
1. 1
.7
.8
1. 1

3. 1
2. 5
1.9
2. 1
2. 5

P)
P)
P)
P)
P)

1935
1936
1937
1938
1939

4. 2
5.0
5. 5
4. 5
5. 1

1. 4
1. 8
2. 1
1. 5
1. 9

2.8
3. 2
3.4
3.0
3.2

P)
P)
P)

10. 8
11. 5

P)
;P)
P)
P)

P)
P)
P)
P)

12.
17.
19.
20.
19.

5.0
5. 3

5. 7
6. 1

8
0
3
1
5

6. 3
8. 6
10. 4
11.2
10. 4

6. 5
8. 4
8. 8
8. 9
9. 1

5. 4

2. 2

1.0

3. 2

6.8
9. 8
13. 3
12. 7
11. 9

3.4
5. 3
8.0
6. 8
5. 5

1. 8
2. 9
5. 2
3.6
2. 9

3. 4
4. 5
5. 3
5. 9
6.4

3. 9
5. 9
6. 4
7. 5
6. 6

1. 3
2.7
2.9
3. 4
3. 1

6. 6
7. 8
9. 3
9. 9
9. 3

1940
1941
1942
1943
1944

5.
8
10.
12.
13.

9
2
4
8
8

2. 5
3 8
5. 2
6. 9
7. 3

3. 4
4 4
5. 3
6.0
6. 4

1945
1946
1947
1948
1949

12.
12.
15.
17.
16.

9
6
9
6
4

6 3
5. 0
6. 7
7 6
7. 1

6. 6
7. 6
9.2
10. 0
9. 3

18. 4
24.5
28. 9
31. 7
28. 9

8. 8
12.0
14. 3
15. 7
14. 0

9. 6
12. 5
14. 6
16. 0
14. 9

10.
13.
15.
17.
15.

5
7
6
4
9

1950
1951
1952
1953
1954

19.
22
22.
24.
23.

3
3
8
5
5

8. 8
10 4
10 9
12 4
11. 2

10.
11.
11.
12.
12.

5
9
9
1
3

34.
42.
43.
45.
43.

3
8
8
4
0

16.
22
24.
26.
24.

8
8
4
2
1

17.
20.
19.
19.
18.

5
0
4
2
9

21.
24.
23.
23.
22.

0
5
6
1
5

10.
12.
11.
11.
10.

3
7
7
0
2

5. 1
6. 9
6. 4
5. 6
5. 0

10.
11.
11.
12.
12.

26.
27.
28.
26.
29.

3
7
4
2
7

13.
13.
14.
12.
14.

13.
13.
14.
13.
15.

3
9
2
8
2

46. 4
52. 3
53. 5
49. 2
52.4

26.
30.
31.
27.
30.

7
7
1
9
1

19. 7
21. 6
22.4
21. 3
22. 3

27.
28.
27.
25.
30.

2
3
3
9
1

13.
14.
13.
12.
14.

9
4
1
0
9

7. 1
7. 5
6. 8
6. 3
7. 9

13. 3
13.9
14.2
13. 9
15.3

1955
1956
1957
1958
1959

1
8
2
4
5

7
8
9
1
3

1
2

Monthly average for year.
Book value, end of period, seasonally adjusted.
3 Not available.
Source: Department of Commerce.

business inventories, which reflect changes in replacement costs as well as changes in physical volume.
In measuring inventory investment as part of the
gross national product, the book value inventory
change data are adjusted to remove the effect of
changes in replacement costs.
The new orders estimates are most closely related
to the Census-OBE unfilled orders series, although
they are also akin to other anticipatory series, such

as new plant and equipment expenditures, construction contracts, etc.
Uses and limitations.—The manufacturers' sales,
inventories, and orders series reflect present and
prospective conditions in this vital sector of the
economy. The sales series reflect the demand for the
goods and services of manufacturers; trends in the
inventories and changes in inventories series reflect
the difference between production and shipments (or

Manufacturers' Sales, Inventories, and New Orders, 1947-60
(Monthly data.

Seasonally adjusted)

BILLIONS OF DOLLARS
60

1947 1948

1949

1950 1951

1952 1953

1954 1955

1956

1957

1958 1959 I960

SOURCE OF DATA: DEPARTMENT OF OOMMEROE

sales) of manufacturers; the new orders series indicates the probable course of manufacturers' sales in
some industries in the immediate future.
The estimates for such aggregates as total manufacturers' sales and inventories, and estimates for
many industry groups, have proved generally accurate when compared against more comprehensive
data available at a later time. Occasionally in the
past, preliminary estimates, especially for some of
the industries, have been changed appreciably by
later data. Improvements in the series will result
from improvements in the data collection procedures
that are introduced as conditions permit. For example, the industry estimates will be brought closer
to product measures as more and more "divisional"
reports are obtained from large, multi-industry
corporations that have reported aggregate data for
all their operations in the past.

Production on order is not characteristic of some
industries (especially some of the nondurable goods
industries), and the new orders series for them consists almost entirely of sales. Analysis on the unfilled orders series for those industries in which production on order is characteristic should, therefore,
be a useful supplement to analysis of the new orders
series published in Economic Indicators,
References.—Manufacturers' sales, inventories,
and orders series are published by OBE in the
monthly Industrial Survey and in the Survey of
Current Business. More complete descriptions of
these series are contained in the following issues of
the Survey of Current Business: October 1951, October 1952, December 1953, and May 1955, and in the
biennial Business Statistics, a supplement to the
Survey.

MERCHANDISE EXPORTS AND IMPORTS
Description of series.—The several export series
cover exports of merchandise (except in-transit merchandise) from the United States to foreign countries. The larger aggregate, total exports (including
re-exports), includes exports of domestic merchandise and re-exports of foreign merchandise, defined
to cover commodities of foreign origin which have
entered the United States as imports and which at
the time of exportation are in the same condition as
when imported. Imported foreign merchandise
which has undergone some change in form in the
United States is included under exports of domestic
merchandise. The smaller aggregate, for total exports of domestic merchandise, shown also by economic class, is exclusive of re-exports. Both series
as presented here are sometimes designated "commercial" because of the exclusion of data on Department of Defense shipments of grant-aid military
equipment and supplies under the Mutual Security
Program (referred to below as D.O.D. military aid
shipments), but are not strictly "commercial" because
they include other government sponsored shipments
as noted in the table. Shipments to United States
armed forces and diplomatic missions abroad for
their own use are also excluded.
Export series coyer all exports from within the
customs area of the United States, which includes
all of the States and Puerto Rico (and included the
Territories of Alaska and Hawaii prior to their admission to statehood). Other possessions are not
included in the customs area, nor are shipments between the United States and these possessions included in the export series.
Excluded are certain special types of shipments as
follows: gold and silver, oil and coal bunkers laden
in the United States on vessels engaged in foreign
trade, and some items of relatively small importance
such as low valued or noncommercial shipments by
mail and gifts valued at less than $100.
Export shipments are valued at the time and place
of export—that is actual selling price, or cost if not
sold, including inland freight, insurance, and other
charges to the place of export. Transportation and
other costs beyond the United States port of exportation are excluded.
Imports are shown on two bases, "general imports"
and "imports for consumption." Both series cover
merchandise which is released from customs custody
61731 O—60

immediately upon arrival. They differ in their treatment of merchandise which enters into customs
bonded warehouses. Such merchandise is included
in "general imports" when it enters such warehouses
on arrival. It enters into imports for consumption
only when withdrawn from the warehouse for consumption. Governmental imports are included. Import coverage is in terms of the customs area (as
explained above) and, as in the case of exports, intransit shipments, gold and silver, and items of small
importance are excluded.
Imports are valued in accordance with the Tariff
Act of 1930, as amended, which defines the value of
imports of merchandise generally as the market value
in the foreign country and should exclude United
States import duties, ocean freight, and marine insurance. In actual practice only the values reported
for imports subject to an ad valorem rate of duty
(a percentage of the value) will tend to conform precisely to the valuation definition. Imports subject to
an ad valorem rate of duty account for only 10-20
percent of the total value of imports. For merchandise not subject to an ad valorem rate of duty (80-90
percent of imports), the reported values may not be
in accordance wTith the above definition. For example, ocean freight may be included inadvertently in
the values, values for shipments between allied firms
may reflect arbitrary values, etc. In general, import
values approximate an f .o.b. exporting country basis.
Statistical procedures.—Export statistics (except
for D.O.D. military aid shipments, as explained below) are obtained from the Shipper's Export Declaration which exporters are required to file with the
collectors of customs, giving a description of the
merchandise, its classification under the prescribed
commodity classification for exports (Schedule B),
quantity, value, and other essential information.
These declarations, after a preliminary review for accuracy and completeness, are transmitted by the
Bureau of Customs to the Bureau of the Census,
where they are sorted and coded prior to further
processing. Data for smaller valued shipments,
accounting for a considerable proportion of the
volume of documents but a relatively small proportion of total value, are based on estimating procedures. Currently, shipments valued at from $100
to $499 are sampled at a ratio of 50 percent, except
for exports to Canada, which are sampled at a ratio

Merchandise Exports and Imports
[Monthly average, millions of dollars]
Exports excluding Mutual Security Program shipments

Year

Total (including
re-exports)

Imports

Domestic exports 2

Total

Imports for consumption

Foodstuffs

Industrial
materials

Finished
manufactures

General
imports

Total

Foodstuffs

Industrial
materials

Finished
manufactures

1929

437

430

156

211

367

204

1930
1931
1932
1933
1934

320
202

315
198

45
31

158
93

255
174

58
44

131

112
74
59

110

134
85

63
46

140
178

137
175

17
19

69
83

51
73

121
138

119
136

35
43

59
64

190
205
279
258

187
202
275
255

18
17
24
36

86
89
117
92

83
96
135
127

171
202
257
163

170
202
251
163

83
102
134
80

34
39
46
35

265

260

139

193

190

53
61
71
48
50

103

1940
1941
1942
1943
1944

335
429
673
1, 080
1, 188

328
418
667
1 070
1, 180

20
42
83

114
94
111

194
281
472

219
279
230

212
268
232

47
58
52

131
175
142

34
35
38

140

146

784

282

283

327

324

138

892

143

150

149

1945
1946
1947
1948
1949

817

799

143

138

518

347

342

176

812

792

1,203
1,054
1, 004

1, 188
1,044

184
192
219
187

193
276
238
261

415
719
587
546

412
480
594
552

402
472
591
549

110
139
167
173

222
251
315
273

71
82
109
104

116
190

251
345

455
616

738
914

729
901

221
258

383
485

125
158
174
183
183

1935
1936__
1937
1938
1939

1950
1951
1952
1953
1954

134

_ __
_

„_

1955
1956
1957
1958
1959

833

995
822

1, 164
1, 100
1, 022
1,071

1, 151
1,088
1,012
1,060

1, 191
1, 444
1, 625
1, 362
1, 362

1, 180
1, 432
1, 610
1, 349
1, 346

114

175
143
131

300
254
310

612
614
620

893
906
851

896
898
853

263
274
276

459
441
394

162

351

667
775
872
782
772

945
1,043
1,079
1,062
1,249

468

441
529
368
365

949
1,051
1,082
1,070
1,268

260

216
208
198
210

267
274
287
285

508
511
450
533

27
29

217
268
294
325
431

1
Starting with 1950, figures shown exclude Department of Defense shipments of grant-aid military equipment and supplies under the Mutual Security Program.
For 1941 and subsequent years, figures include shipments under special programs, including I.e.A. and predecessor programs, UNRKA, Lend-Lease (1941-1947),
Greek-Turkish Aid (1947-1952), interim aid (1947-1948), and United States foreign relief (1947-1948). Figures for 1948 and subsequent years also include Department
of the
Army civilian supply shipments.
2
The grant-aid military shipments excluded beginning with 1950 (see note 1 above) have been deducted entirely from " Finished manufactures." Private relief
shipments of foodstuffs are included in "Finished manufactures" prior to 1941 and in "Foodstuffs" thereafter.
3 "General imports" through 1932, "Imports for consumption" thereafter.
Source: Department of Commerce.

of 10 percent. Shipments valued at below $100, accounting in 1959 for about 1 percent of total exports
by value, are estimated as to value and shown in this
table under "finished manufactures."
For exports made by the Department of Defense
of grant-aid military equipment and supplies under
the Mutual Security Program (excluded from the
series in this table) and for other Department of Defense shipments such as those under the civilian

supply program, information is compiled by the
Bureau of the Census from the records of the Department of Defense. In most instances, these records show values f.o.b. point of origin. These are
adjusted to show value at the United States port of
exportation.
Import information is derived from the import
entry form prescribed by the Customs Bureau to be
filed by the importer for each shipment arriving in

Census export tables have emphasized military aid
shipments, which amounted to somewhat less than 7
percent of total exports in 1959. Thus, monthly
Census data for exports by economic classes
are for total exports of domestic merchandise, in contrast with the series shown here exclusive of D.O.D.
military aid shipments; however, this affects only the
category of "finished manufactures," since all
D.O.D. military aid shipments are allocated to this
class. The seasonally adjusted series is published
for the first time in 1960.
The economic classes as presented here are derived from the five Census classes of "crude foodstuffs" and "manufactured foodstuffs" (combined as
"foodstuffs"), "crude materials" and "semimanufactures" (combined as "industrial materials"), and
"finished manufactures." The indexes of quantum,
value, and unit value for foreign trade, prepared by
the Bureau of Foreign Commerce, Department of
Commerce, are available by economic class for exports
of domestic merchandise on the same basis as the
corresponding series shown here (i.e., net pi D.O.D.
military aid shipments) and for imports for consumption. The indexes are also available for total
domestic exports inclusive of such D.O.D. shipments.
Series for merchandise exports and imports appear
as major components of the balance of international
payments. They are combined with series covering
various other current transactions to form the larger
aggregates for exports and imports of "goods and
services." The merchandise series used are based on,
Exports
and roughly equivalent to, the series shown here for
excluding
Imports
MSP
total exports (including re-exports) net of D.O.D.
January
100. 4
95. 4
military aid shipments and for general imports. The
February
94. 5
92. 3
March
106. 4
108. 5
series are further adjusted by exclusion of other
April
98. 7
103. 2
military shipments and by other adjustments, with
May
102. 0
107. 4
June
100. 8
100. 4
respect to coverage, valuation, and timing, for conJuly__
97. 0
94. 2
sistency with balance of payments concepts. The
August
95.8
94.9
September
96. 5
93. 7
seasonally adjusted quarterly figures for merchanOctober
101. 4
102. 4
dise exports and imports will not necessarily agree
November
100. 1
102. 5
December
106. 2
105. 0
precisely with corresponding quarterly totals comRelation to other series.—Statistics of exports and piled from the seasonally adjusted monthly series
imports are available in Census and other govern- shown here because they differ in content and are
ment publications on bases varying with respect to the seasonally adjusted by a different procedure within
treatment of re-exports, of D.O.D. military aid ship- the context of the balance of payments.
ments, of goods entering into or withdrawn from
Uses and limitations.—These summary series proCustoms bonded warehouses and other matters, depending on the purpose of the presentation. The vide useful monthly indicators of the movement of
series here shown are among those presented in merchandise exports and imports. As a measure of
monthly Census releases, with certain qualifications. cyclical or long-term movement, monthly foreign

the United States, and on which importers report
value, country of origin, type of commodity, classified in accordance with the prescribed import commodity classification (Schedule A), and other essential information. After a preliminary review by
Customs, the statistical copy of the entry form is
transmitted to the Bureau of the Census, where it is
put through several sorting and coding operations
prior to further processing. Statistics covering low
valued import shipments have been estimated on the
basis of sampling. The sampling procedures have
varied. Currently a 1 percent sample is taken of all
imports valued at less than $100 on formal entries
and of all imports reported on informal entries
(which may include shipments valued at not more
than $250). Sampled shipments (estimated for
1959 at about 0.8 percent of total imports) are distributed by country and allocated to the commodity
class "finished manufactures."
With respect to both exports and imports, coverage
for a given calendar month approximates fairly
closely all shipments departing or entering during
the calendar month. Documents arriving too late
for inclusion, as well as those rejected for verification, are included in the total for a subsequent
month, usually the following month.
The seasonally adjusted series have been adjusted
for working days as well as seasonal variation. The
seasonal adjustment factors are derived by a ratioto-moving-average method. The seasonal adjustment factors for 1959 are:

trade data, even after seasonal adjustment, are
erratic. While these data will necessarily be followed
by users from month to month, judgments as to trend
are more properly based on derived series for longer
periods such as quarterly or three-month moving
totals.
Although merchandise trade bulks large among the
sources of international payments, the balance of payments can be comprehended only in terms of the full
range of merchandise, service, capital, unilateral and
other transactions. Undue importance should not be
attached to the trade figures alone or to the surplus
or deficit in merchandise trade.
Because of the variety of bases on which foreign
trade data are presented the user must be attentive
to the precise specifications of particular series,
especially when they are to be used with or compared
with other series. Similarly, when U.S. trade statistics are compared with those of other countries, special attention is due to the extent to which the series
differ as to valuation and coverage.
References.—Totals for exports of domestic and
foreign merchandise, general imports and imports
for consumption are published monthly in the Census
Bureau's United States Foreign Trade summary reports (FT 900E and I, 930E and I, 95OE and I, and
970E and I ) . These reports give monthly data for

the current and preceding years. Separate data on
Department of Defense shipments of grant-aid military equipment and supplies are provided monthly in
FT 900E, Total Export Trade. Cumulative totals
are provided in the Quarterly Summary of Foreign
Commerce of the United States, which also contains
index numbers for several export and import series.
Detailed commodity by country data are also published by the Census Bureau. A monthly pamphlet,
Foreign Trade Statistics Notes, contains supplementary information on such items as unusual transactions appearing in the statistics, changes in the types
of shipments included in the statistics, and special
problems of valuation, commodity classification, and
the like.
Summary explanations of the export and import
series appear in the introductory notes of Census
monthly bulletins FT 410 and 420 (exports) and FT
110 and 120 (imports). Detailed technical notes appear currently in Foreign Trade Statistics Notes.
The last comprehensive discussion of the series appeared in the 1946 edition of Foreign Commerce and
Navigation of the United States and is still generally
applicable. A complete list of all Census publications in the field of foreign trade is available in the
Catalog of United States Foreign Trade Statistical
Publications.

UNITED STATES BALANCE OF PAYMENTS
Description of series.—The balance of payments of
the United States is a summary of the economic
transactions between residents of the United States
and residents of the rest of the world. The table
here presented is derived from the more detailed
regular quarterly presentation published by the
Office of Business Economics, Department of Commerce.
All transactions known to the compilers through
reports or records, or capable of reasonable estimation on the basis of sample data, are summarized
under the general headings "U.S. receipts (recorded)," "U.S. payments (recorded)," and "Increase in foreign gold and recorded liquid dollar
assets through transactions with the U.S." The
above categories are so defined that if all transactions
could be accurately measured or estimated, the balance between recorded "receipts" and "payments"
would be exactly equal to the increase (or decrease)

in foreign gold and liquid dollar assets. Since this
is not possible, a discrepancy regularly appears,
which is designated "Unrecorded transactions (errors and omissions)."
Receipts due to exports of goods and services arise
mainly from merchandise trade but include also
receipts arising from transportation services, income
on United States investments abroad, travel expenditures of foreign visitors in the United States, certain military transactions, and miscellaneous private
and Governmental services. Payments due to imports of goods and services similarly arise mainly
from merchandise trade, but also from other categories of transactions analogous to those listed above.
Foreign long-term capital covers foreign investments in the United States with a maturity of one
year or more and includes investment in branches
and subsidiaries, securities (other than U.S. Government), and other credits., Movements of foreign

long-term capital are summarized here as a net figure
under "receipts;" in the past, they have usually resulted in net receipts, but do not necessarily do so.
U.S. Government grants and capital includes Government aid, other than military, under the various
aid programs, and the net outflow of long-term capital through various foreign lending programs. Direct private U.S. capital refers to investment in
foreign branches and subsidiaries. The aggregate
for total private capital includes also portfolio investments and short-term claims. The comprehensive total for U.S. capital and grants includes, in
addition to the above, the net outflow of private gifts
and other unilateral payments.
The increase in foreign gold and liquid dollar
holdings measures the net effect of recorded transactions in U.S. monetary gold and of changes in
liquid dollar holdings by foreign countries and international institutions in the form of deposits, U.S.
Government securities, bankers acceptances and commercial paper, and other short-term claims of the
United States.
Seasonally adjusted quarterly data are shown in

terms of annual rates. The underlying series for
U.S. capital and unilateral payments are adjusted
by the Office of Business Economics but not in such
a manner as to permit presentation of adjusted series
for the aggregates presented in this table. However
the adjusted capital series are the basis for the derivation of the adjusted series for the balance on recorded transactions and increase in foreign gold and
dollar assets.
Statistical procedures.—The preparation of the
balance of payments involves the bringing together,
and adjustment to balance of payments concepts, of
data from a variety of sources, including direct reports to the Office of Business Economics. The
largest components are those for merchandise imports and exports, as published by the Bureau of the
Census, subject to certain adjustments for coverage,
valuation, and timing. Other sources include quarterly reports by U.S. companies with branches or subsidiaries abroad and U.S. branches and subsidiaries
of foreign companies; occasional "benchmark" surveys of U.S. investments abroad and of foreign investments in the United States; reports from U.S.

Balance of Payments, 1950-60
{Quarterly data.

Seasonally adjusted)

BILLIONS OF DOLLARS

EXPORTS OF GOODS AND SERVICES
\
IMPORTS OF GOODS AND SERVICES

INCREASE IN FOREIGN GOLD AND LIQUID DOLLAR
ASSETS THROUGH TRANSACTIONS WITH THE U.S.

OTHER PAYMENTS
-+•

1950

1951

1952

1953

SOURCE OF DATA: DEPARTMENT OF COMMERCE

1954

1955

1956

1957

1958

1959

I960

' Including unrecorded transactions

United States Balance oj Payments
[Millions of dollars]
U.S. Receipts
(recorded)

Year

U.S. Payments (recorded)

Exports Foreign Imports
of goods long- of goods
term
and
and
services capital services
(net)

U.S. Grants anc capital (net)

Total i

U.S. Government
grants and
capital

Private capital
Total

Direct

Increase in
Balance on
foreign gold
recorded
Unrecorded and recorded
transactions transactions liquid dol[net pay(errors and
lar assets
ments ( —) omissions),
through
or receipts (net receipts) transactions
with the
( + )]
U.S.

1929____

7,034

358

5,886

1, 175

-38

836

602

331

-384

1930____
1931____
1932____
1933____
1934____

5, 448
3,641
2,474
2,402
2,975

66
66
-26
2
125
2
15

4, 416
3, 125
2,067
2,044
2,374

820
-451
-266
221
-112

-77
-14
-26
7
5

555
-756
-478
6
-289

294
222
16
-32
17

278
1,033
647
262
728

320
99
79
61
412

-598
- 1 , 132
-726
-323
- 1 , 140

1935____
1936____
1937____
1938____
1939____

3,265
3,539
4,553
4,336
4,432

320
600
245
57
-86

3, 137
3,424
4,256
3, 045
3,366

-362
-24
-86
115
-147

-1
-3
-2
9
14

-543
-229
-319
-76
-339

-34
12
-35
-16
-9

810
739
628
1,233
1, 127

364
157
425
249
788

- 1 , 174
-896
-1,053
-1,482
-1,915

1940____ 5, 355
1941_.._ 6,896
1942____ 11,769
1943____ 19, 134
1944__._ 21, 438

-90
-327
-84
-63
175

3,636
4,486
5,356
8,096
8,986

16
1,440
6,526
12, 988
14, 449

51
1,323
6,525
12, 847
14, 077

-245
-87
-31
-28
76

-32
-47
-19
-98
-71

1,613
643
-197
-2,013
- 1 , 822

1,277
476
-8
34
-37

- 2 , 890
- 1 , 119
205
1,979
1,859

7,561
4, 975
5, 804
4,918
5,649

550
413
987
906
553

100
230
749
721
660

- 2, 745
1,384
3, 925
-173
-564

8
195
936
1, 179
775

2,737
-1,579
-4,861
-1,006
-211

3,640
3, 191
2,380
2,055
1, 554

1,265
1,068
1, 158
369
1, 619

621
528
850
721
664

-3,572
-813
-1,597
- 2 , 398
-1,683

-30
470
505
296
167

3,602
343
1,092
2, 102
1, 516

2,211
2, 327
2, 574
2,587
3
1 , 981

1, 211
2, 990
3, 175
2, 844
2, 301

779
1, 859
2,058
1, 094
1,310

- 1 , 595
- 1 , 576
-280
-3,857
- 4 , 609

446
643
748
380
783

1, 149
933
-468
3,477
3,826

1945
1946____
1947____
1948_.._
1949____

16,
14,
19,
16,
15,

273
735
737
789
851

-104
-347
-98
-172
119

10, 232
6,991
8,208
10, 349
9,702

1950
1951
1952__._
1953____
1954

13, 901
18, 863
18, 105
17,081
17, 949

53
182
141
206
244

12, 098
15, 142
15, 760
16, 644
16, 088

1955
1956__._
1957
1958
1959____

20,
23,
26,
23,
23,

346
530
361
24
548

17, 937
19, 829
20, 923
21,053
23, 560

003
705
733
325
464

3
3

8,682
6, 013
7, 506
6,441
6,832

3
3

5,428
4, 716
4,083
3,041
3,788
4,007
5, 982
6, 451
6, 153
3
5, 061
3

1
2

Includes remittances and pensions not shown separately.
1933 figure includes a net outflow of $40 million and 1934, a net inflow of $30 million, representing the net transfer of funds in security arbitrage.
tions3 cannot be divided between domestic and foreign securities.
Excludes subscriptions to international financial institutions.
NOTE.—Military grants are excluded beginning with 1946.
Source: Department of Commerce.

Government agencies on their foreign transactions,
including grants, loans, and purchases and sales; reports from U.S. and foreign shipping lines and financial data from the Maritime Administration; reports
from U.S. travelers on their expenditures abroad and
from foreign travelers on their expenditures in the
U.S., together with travel statistics of the Immigration and Naturalization Service; reports to the Treas-

These transac-

ury Department on international claims and liabilities ; and a variety of other sources including Government administrative data, direct reports to the Office
of Business Economics and press reports.
Individual series of the more detailed balance of
payments statement are seasonally adjusted separately, according to varying techniques as deemed
appropriate. Major items, including merchandise

trade, are adjusted by means of a regression technique clusions as may be drawn by concentrating attention,
involving derivation of an equation expressing the for example, on merchandise exports and imports
relationship between quarterly aggregates and a alone, without attention to the "invisible" items of
trend line established on the basis of moving aver- trade. The interrelationships within the balance of
ages. The series for "errors and omissions" is in- payments are complex and no discussion of analytidependently adjusted, while the "adjusted" series for cal technique can be attempted here.
The balance of payments lends itself to more than
the balance on recorded transactions and for gold
one
form of presentation. The regular, and more
and foreign dollar reserves are both derived from the
other adjusted series. Individual series are balanced detailed, table of the quarterly presentation shows
a balance on account of goods and services, against
to annual totals.
The magnitude of the seasonal adjustments for dif- which can be offset the net financial results of uniferent series varies widely. The greatest range in lateral transactions, capital movements, and gold
recent years is from 1.48 for the first quarter to 0.685 transactions. The presentation in Economic Indicafor the third quarter of the series on travel expendi- tors balances all "recorded" receipts against all
"recorded" payments, other than those resulting from
tures.
Relation to other series.—Since the balance of pay- purchases or sales of gold or from changes in recorded
ments is a synthesis of data from a variety of sources, short-term and other liquid foreign assets in the U.S.
a close relationship exists between various compo- The net surplus or deficit measures the net change in
nents of the balance of payments and certain other foreign gold and recorded liquid dollar assets. Since
bodies of published data. Because of technical ad- this measure is arrived at independently also through
justments to balance of payments concepts, which reported data on gold and foreign assets, and since the
cannot be detailed here, the components will ordi- two results show a significant and fluctuating differnarily differ somewhat from the related sources. ence, some caution is needed in interpreting moveAmong the important bodies of related data are: data ments in the net figure, as indicated in the current
on merchandise exports and imports published by the textual discussions of the Office of Business EcoBureau of the Census (see p. 73) ; data on U.S. Gov- nomics. The reduction of the "errors and omissions"
ernment aid as published in the Office of Business through more complete reporting presents considerEconomics quarterly bulletin Foreign Grants and able difficulty because of the elusiveness of many
Credits of the United States; annual estimates of the international transactions.
international debtor-creditor position of the United
References.—The most complete discussion of balStates as published in the Survey of Current Busi- ance of payments concepts used and of statistical
ness; and data on international capital transactions sources and techniques is contained in the 1952 Supof the United States as published by the Treasury plement to the Survey of Current Business entitled
Department in the Treasury Bulletin. Balance of Balance of Payments of the United States: 19^9-51,
payments data are used as a component of the na- although there have been subsequent developments
tional income and products account, summarized un- in sources and technique. Later briefer statements
der the categories of exports and imports.
of sources may be found in Business Statistics 1959
The regular quarterly balance of payments pres- Edition, and in the Census publication Historical
entation in the Surrey of Current Business shows Statistics of the United States: Colonial Times to
transactions with major areas of the world, and gives 1957. A Balance of Payments Statistical Supplea more detailed classification of transactions by type. ment (to the Survey of Current Business) of 1958
Uses and limitations.—The balance of payments gives detailed global figures by quarters for the period
presents an integrated summary of international 1919-1956 and by areas for 1946-1956. Historical
transactions and their net effect on the international Statistics gives available, but fragmentary, data back
financial position of the United States. A major to 1790. The Survey of Current Business carries
contribution is to present individual components in balance of payments data regularly, with quarterly
their proper context, avoiding such misleading con- and annual detailed tables and explanatory text.

PRICES

CONSUMER PRICES

Description of series.—The Consumer Price Index,
compiled by the Bureau of Labor Statistics, is a
measure of changes in prices of goods and services
purchased by families of wage earners and salaried
clerical workers in cities. The goods and services included in the index are those required to maintain the
level of living characteristics of such families in
the year ending June 1952. These families represented about 64 percent of all people living in urban
places, and about 40 percent of the total United
States population in 1950.
The index is based upon prices collected on about
300 items in 46 cities. The 300 items were selected
by the BLS as representative of the thousands of
commodities and services purchased by families of

wage earners and salaried clerical workers, as reported in a survey conducted in 91 cities. Detailed
specifications are used for the 300 items so that, insofar as possible, prices are obtained for articles of the
same quality in successive price periods. Revisions
in the individual specifications are made from time
to time as descriptions become obsolete.
Current prices for the 300 items are collected regularly from a list of stores and service establishments
in the 46 cities. This list includes chain stores, independent stores, department stores, specialty stores,
and public utilities, selected by BLS as representative of the types of outlets in which wage-earner and
clerical-worker families make their purchases.
Prices are also collected on such items as physicians'

Consumer Prices, 1947-60
(Monthly data)

IN0EXJ947-49
155

COMMODITIES, LESS FOOD

1947

1948

1949

1950

SOURCE OF DATA; DEPARTMENT OF LABOR

1951

1952

1953

1954

1955

1956

1957

1958

1959

I960

Consumer Prices
[1947-49=100]
Commodities
All items

Year

1929
1930
1931
1932
1933
1934

Services

Commodities less food
All commodities

Food
All

Durable

Nondurable

65. 6

117.4

71.4
65.0
58. 4
55. 3
57.2

0)
P)
P)
P)
0)

62. 4
51.4
42.8
41. 6
46. 4

P)
P)
0)
P)
P)

P)
0)
0)
P)
P)

P)
P)
P)
P)
P)

114. 2
108.2
97. 1
83. 6
78.4

P)
P)
P)
P)
P)

58. 7
59. 3
61. 4
60.3
59. 4

52. 0
52. 7
54. 7
52. 7
51. 6

49. 7
50. 1
52. 1
48.4
47. 1

57. 3
57. 9
60.4
60.4
59. 4

53. 3
54. 1
57. 5
58. 5
57. 3

1940
1941
1942
1943
1944

59. 9
62. 9
69. 7
74. 0
75. 2

52. 1
55. 7
63. 8
69. 4
70. 2

47. 8
52. 2
61. 3
68. 3
67. 4

59.8
62. 7
69. 8
72. 7
76. 7

56. 8
60. 7
68. 9
71.2
77. 8

76. 9
83. 4
95. 5
102. 8
101. 8

72. 3
80. 1
96.3
103. 2
100. 6

68.9
79. 0
95. 9
104. 1
100. 0

79. 7
84. 7
95. 7
102. 9
101. 5

1950
1951
1952
1953
1954

102. 8
111. 0
113.5
114. 4
114.8

101. 2
110. 3
111. 7
111.3
110. 2

101. 2
112. 6
114. 6
112. 8
112. 6

1955
1956
1957
1958
1959

114. 5
116. 2
120. 2
123. 5
124. 6

109. 0
110. 1
113. 6
116. 3
116. 6

110. 9
111. 7
115. 4
120. 3
118. 3

1945
1946
1947 __ ___
1948
1949

Services
less rent

1935
1936
1937
1938
1939

Rent

73. 3

0)
P)
P)
0)
P)
57. 1
57.6
59. 9
59. 6
58. 7

_ _ .
_ ...

All services

75.6
76.4
78.7
80.3
80.4

78.2
80. 1
83.8
86. 5
86. 6

72. 6
72.2
72.9
73.5
73. 5

59. 3
61. 8
68.4
71. 3
74. 9

80.6
81. 6
84.2
85.8
87. 9

86. 9
88. 4
90.4
90. 3
90. 6

73. 6
74. 5
77.8
81. 3
85. 2

83. 7
87. 5
94. 9
101. 8
103.3

77. 6
83. 3
95. 7
103. 1
101. 1

89.0
90. 8
94. 5
100. 4
105. 1

90. 9
91. 4
94.4
100. 7
105. 0

87.0
90. 2
94. 7
100. 1
105. 2

101. 3
108.9
109. 8
110.0
108. 6

104. 4
112. 4
113. 8
112. 6
108. 3

100. 9
108. 5
109. 1
110. 1
110. 6

108. 5
114. 1
119. 3
124.2
127.5

108. 8
113. 1
117. 9
124. 1
128. 5

108. 1
114. 6
120. 1
124.6
127. 7

107. 5
108. 9
112. 3
113. 4
115. 1

105. 1
105. 1
108. 8
110. 5
113.0

110. 6
113.0
116. 1
116. 9
118. 3

129. 8
132. 6
137. 7
142.4
145. 8

130. 3
132. 7
135. 2
137. 7
139. 7

130. 1
133.0
138. 6
143. 8
147. 5

i Not available.
NOTE.—The "all items" and "food" indexes are available monthly from 1913; "rent," annually from 1913 through 1918, for varied intervals (generally semiannually
or quarterly) from 1919 through September 1940, monthly from October 1940 through September 1944, quarterly from December 1944 through January 1947, and
monthly from February 1947 to date; all other groups, selected months for 1935 and 1936, quarterly from 1937 through 1955, and monthly from 1956 to date.
Source: Department of Labor.

and dentists' fees, hospital rates, and beauty-parlor
services. Sales and excise taxes are included in the
retail prices for commodities on which they are imposed. Property taxes are included in the cost of
homeownership, and implicitly included in rental
costs. The index does not include income taxes or
social security taxes.
Prices are collected at intervals ranging from every
month to every third month. In the 5 largest cities
all goods and services are priced every month except
rent which is priced every second month. In the

remaining 41 cities prices for some goods and services—such as foods, fuels, used cars, streetcar and bus
fares and a few other important items—are collected
every month; for other goods and services prices are
collected every third month. Pricing of these goods
and services in the 41 cities is on a rotating cycle, so
that several cities of each size group are priced each
month. Between the periodic pricing periods in a
given city, the price change for unpriced groups of
items is estimated for use in the computation of the
monthly national index.

Prices for practically all of the commodities and
most of the services are collected by personal interview. A few prices (e.g., public utility rates and
fuel prices) are collected by mail.
In addition to the national index, separate indexes
are computed for the 20 largest of the 46 cities—
monthly for the 5 largest and quarterly for the
other 15.
A major revision of this series was introduced with
the release of the January 1953 index. The principal
changes from the old series were: (1) change in the
weighting pattern to reflect current purchasing
habits; (2) change in the list of items priced to reflect current purchasing habits; (3) increase in the
number of items priced from about 225 to about 300,
including for the first time used cars, home purchase
and maintenance, and restaurant meals; (4) revision
and expansion of the list of cities in which prices are
collected, to reflect price changes affecting wageearner and clerical-worker families in all urban
areas; and (5) change of the reference base period of
the index from 1935-39 to 1947-49.
For the years shown in the accompanying table,
for 1929 the weights used are averages representing
1917-19 and 1934-36 expenditures; for 1930-49 the
weights used are 1934-36 expenditures; for 1950-52,
estimates of 1950 expenditure patterns; and from
1953 to date, estimated expenditure patterns for the
year ending June 1952. With the introduction of the
1934-36 weighting pattern in 1940, a modified
weighting pattern was carried back to smooth the
transition, but this was not done when the 1950
weighting pattern was introduced in 1951 or when
the fiscal year 1952 weighting pattern was introduced
in January 1953. In these instances the new weights
were linked into the index as of a single month.
The relative importance of the various groups
shown in the table for January 1950 and for December 1959 can be seen in the following table:
Relative Importance of Specified Groups in the CPI, After
Adjustment, January 1950 and December 1959
Specified group
All items
All Commodities
All Food
All Commodities less food__
All durable Commodities.
All nondurable Commodities less food
All Services
Rent
Services less rent

Jan. 1950

Dec. 1959

100.0
68. 7
33. 3
35.4
10. 8

100.0
64. 1
28. 0
36. 1
13. 6

24. 6
31. 3
11. 6
19. 7

22. 5
35. 9
6. 2
29. 7

Statistical procedures.—The purpose of the index
is to show how much more or less it would cost to
purchase the same quantities and qualities of goods
and services in one period than in an earlier period.
The first step in the index computation is to calculate, for each city, a price relative for each item
by comparing the sum of the prices reported for that
particular item from the same retail outlets in the
current and preceding periods. This relative change
for the item is next multiplied by the estimated cost
in the preceding period for a fixed quantity of the
item. (The fixed quantity, or weight, for each item
is determined by the average annual quantities of that
item purchased by urban wage-earner and clericalworker families in the year ending June 1952, plus
the purchases of those unpriced commodities it represents in the index.) These calculations are then
totaled for all items in a group—all food items, for
example, are combined into a total showing the food
cost for the fixed quantities in the current period.
This total is compared with the food total for the
preceding period to give a measure of the average
price change for all foods, from which the index
number of food for each city is computed. Similar
calculations are made for apparel, rent, and all other
groups of items priced.
The national index is calculated by combining the
city totals, with weights based on the 1950 population of urban wage-earner and clerical-worker families. Two-fifths of the weight is carried by the 12
largest cities; one-fifth by the 9 cities selected to represent the 42 cities with populations of 240,000 to
1,000,000; one-fifth by the 9 cities selected to represent the 216 cities with populations of 30,500 to 240,000; and one-fifth by the 16 small cities selected to
represent the 2,527 towns with populations ranging
from 2,500 to 30,500.
Uses and limitations.—The index is designed to
measure only those changes in the spending of urban
families which result from changes in prices, not
those which result from changes in purchasing habits
or standards of living. Also, it measures price
changes for only a limited population group: the
families of wage earners and salaried clerical workers living in urban areas. Other qualities of commodities and weights would have to be used to
measure price changes for other groups, such as farm
families, single workers, retired people, etc. The
"fixed market basket" represents the average quantities bought by all wage-earner and clerical-worker

families, and is not necessarily representative of the
purchases made by any single family.
The city indexes indicate the difference in the rate
of price movement in the various cities, but should
not be used to compare price levels in one city with
those in another. For instance, if the index for city
A is 113 and that for city B is 115, it does not necessarily follow that prices are higher in city B than in
city A, since the base-period prices may have been
higher in city A. These indexes do show that prices
have increased more rapidly since the base period in
city B than in city A.
Although efforts are made to minimize the effects
of quality changes on the "fixed market basket," it is
impossible in any index to measure these effects very
accurately.
References.—The basic release of the index is the
report entitled "Consumer Price Index," issued by the
Bureau of Labor Statistics toward the end of the

month following the month to which the figures relate. The periodic indexes—semiannual, quarterly,
or monthly—for periods earlier than those shown in
current issues of Economic Indicators are available
from the Bureau of Labor Statistics upon request.
Quarterly indexes are available upon request for
selected groups of items and for individual commodities and services (except foods and fuels) ; monthly
indexes and average prices are available for individual food and fuel items. Descriptions of the procedures, uses, and limitations of the index are presented in varying degrees of technical detail in The
Consumer Price Index—A Layman!s Guide (BLS
Bulletin 1140) ; in Techniques of Prefaring Major
BLS Statistical Series (BLS Bulletin 1168); and in
an article in the February 1953 issue of the Monthly
Labor Review. Upon request, the Bureau of Labor
Statistics will furnish "The Consumer Price Index,
A Short Description."

WHOLESALE PRICES
Description of series.—The Wholesale Price Index, compiled by the Bureau of Labor Statistics, is
a measure of the general rate and direction of the
composite of price movements in primary markets,
and of the specific rates and directions of price movements for individual commodities and groups of
commodities.
The index is based on price quotations for approximately 2,000 commodities selected to represent all
commodities sold on primary markets in the United
States. All types of commodities, from raw materials to fabricated products, are included in the index. For commodities traded on organized exchanges, such as livestock and grains, the quotations
are furnished by the exchanges or Government agencies, or are taken from published sources. For some
standardized commodities, such as certain chemicals
and specified constructions of cotton gray goods,
quotations are taken from authoritative trade publications. For the majority of fabricated products,
prices are reported to the Bureau .of Labor Statistics
by producers.
Initial contacts with manufacturers to solicit
their cooperation in reporting prices on specified
commodities are made by personal interview; subsequent price reports are mailed to Washington by
the reporting firm.
Prices are quoted at the level of the first commercial transaction, and, for each commodity, the

reporter is requested to quote the price which he
charges to the channel of distribution to which he
sells the largest volume of this particular commodity.
The prices relate to a particular day of the month—
usually Tuesday of the week containing the 15th.
Insofar as possible, identical qualities of the commodities are priced from period to period so that the
index will measure only real price changes, not
changes due to differences in qualities or terms of
sales. When commodities of identical qualities are
not available for pricing in successive periods, it is
sometimes possible to obtain information on the cost
of the features added to or removed from the original
article. This can frequently be done, for example,
when new models of machinery are introduced. In
such cases it is possible to estimate the true price
change, excluding the effect of changes due to specification modifications. When adequate estimates of
the true price change cannot be made, the new commodity is substituted for the original in such a way
that the level of the index is not affected by the
difference in their prices. To the extent that identical
qualities are not available in successive periods and
no adjustment can be made, the index may not precisely measure price changes.
A major revision of this index was introduced with
release of the January 1952 index. The principal
changes from the old series were: (1) increase in the
number of items priced, from approximately 900 to

about 2,000; (2) change in the basis for weights
from average value of shipments for sale in 1929-31
to 1947 averages; (3) change of the base period from
1926 to 1947-49; and (4) modification of the classification system. Weights based upon the industrial
censuses for 1947 are used in the index from January
1947 through December 1954. Adjustments were
made in January 1955 to bring the major groups
weight totals into agreement with the 1952-53 average shipment values. New weights were introduced
in January 1958 based upon the industrial censuses
for 1954. Weights based upon the 1958 Censuses will
be introduced early in 1961.
The relative importance of the groups, subgroups,
and items in the index at any one period depends on
the relationship among value aggregates as of that
period. As of December 1954, using the 1952-53
weights, the relative importance of "Farm products"
was 10.8 percent, of "Processed foods" 13.7 percent,
and of "Other than farm products and foods" (machinery, nonmetallic minerals, fuels, etc.) 75.5 percent. Following introduction of the 1954 weights in
December 1957 the corresponding percents giving the

relative importance of the three groups named were
10.7,12.7, and 76.6 respectively.
The following table indicates the relative importance of the chief economic-sector components in
1947 and in December 1957, the effective date of the
most recent revision.
Relative Importance of Components of the Wholesale Price Index, 1947-49 and December 1957
1947-49
(1947
weights)

Commodity grouping
All commodities
Farm products
Processed foods1
All industrials .. _
Industrial crude materials
Industrial
intermediate materials 2
Producer finished goods
Consumer finished goods excluding food
Durables
Nondurables
__

December
1957 (1954
weights)

100. 00
14. 61
15.45
69.94
3. 88

100. 00
10.69
12. 73
76.58
2.96

35.30
8. 96

40.33
11. 23

20.71
6. 11
14. 60

21.35
7.69
13. 66

1
Excludes all farm products and foods; coverage of the subgroups does not
correspond
exactly to coverage of this index.
2
Excludes intermediate materials for food manufacturing and manufactured
animal feeds; includes, in part, grain products for further processing.

Wholesale Prices, 1947-60
(Monthly data)
INDEX: 1947-49=100
190

COMMODITIES OTHER THAN
FARM PROOUCTS AND FOODS

ALL COMMODITIES

120

100

,[,,Llu MIMIMIM

1947

1948

ulnlnh,

nlnLln

1949

1950

SOURCE OF DATA- DEPARTMENT OF LABOR

nli.Llil ,,1.,IMIM MIMIMIM

1951

1952

1953

M I U L I M

1954

,, 1, , 1 , , I „ 1 ,, 1 , ,1 , , I ,, 1 „ I , , 1 • , I , • 1 n 1 ,, 1 ,, I „ I , , 1, . I •. 1 •. 1, i I ,, 1 • • I .

1955

1956

1957

1958

1959

I960

Wholesale Prices
[1947-49 = 100]

Commodities other than farm products and foods (industrials)

Year

All commodities

Farm
products

Processed
foods

All industrials 1

Industrial
crude materials

Industrial
intermediate
materials 2

Producer
finished
goods

Consumer finished
goods excluding food

Durable

Nondurables

1929

61.9

58. 6

58. 5

65. 5

1930
1931
1932
1933
1934

56. 1
47.4
42. 1
42.8
48. 7

49. 3
36.2
26.9
28.7
36. 5

53. 3
44. 8
36.5
36. 3
42. 6

60. 9
53. 6
50.2
50.9
56. 0

1935
1936
1937
1938
1939

52.0
52.5
56. 1
51. 1
50. 1

44.
45.
48.
38.
36.

0
2
3
3
5

52. 1
50. 1
52. 4
45.6
43. 3

55. 7
56.9
61.0
58.4
58. 1

()

1940
1941
1942
1943
1944

51. 1
56.8
64. 2
67.0
67. 6

37. 8
46. 0
59. 2
68. 5
68.9

43.6
50.5
59. 1
61. 6
60.4

59. 4
63. 7
68.3
69. 3
70.4

()

1945
1946
1947
1948
1949

68.8
78. 7
96.4
104. 4
99. 2

71. 6
83.2
100.0
107. 3
92. 8

60.8
77. 6
98.2
106. 1
95. 7

71.3
78. 3
95. 3
103.4
101. 3

()
92. 9
108.5
98. 6

()
95. 3
103. 7
101.0

()
92.8
101. 1
106. 1

()
94.8
101. 3
104.0

97.4
103.5
99.2

1950
1951
1952
1953
1954

103. 1
114.8
111. 6
110. 1
110.3

97. 5
113.4
107.0
97.0
95. 6

99.8
111.4
108. 8
104. 6
105. 3

105.0
115.9
113.2
114.0
114. 5

109. 9
120.8
109. 3
108. 5
103. 3

105. 7
118. 5
114. 7
116.2
116. 7

108.
119.
121.
123.
124.

7
3
3
1
7

105.0
112. 1
113. 0
113. 8
114. 7

100.8
108.5
105. 9
106. 9
107. 2

1955
1956
1957
1958
1959

110. 7
114.3
117. 6
119.2
119. 5

89. 6
88.4
90.9
94.9
89. 1

101. 7
101. 7
105. 6
110.9
107. 0

117. 0
122. 2
125.6
126.0
128. 2

113. 4
120.0
118. 3
113. 7
120. 0

120. 1
126.0
129.3
129. 1
131.2

128.5
138. 1
146. 7
150. 3
153.2

115. 9
119. 7
123. 3
125.0
126.5

107.8
109.9
112. 4
111. 7
113. 4

()
(*)
)

()
(•)
(3)

o
(3)

1
2

Excludes all farm products and foods; coverage of the subgroups does not correspond exactly to coverage of this index.
Excludes intermediate materials for food manufacturing and manufactured animal feeds; includes, in part, grain products for further processing.
3 Not available for this classification prior to 1947.
NOTE.—Monthly indexes available for most groups from January 1926 on the 1947-49=100 base. Monthly indexes available for "all commodities" and major
groups from 1890 and for subgroups from 1913 on the 1926=100 base.
Source: Department of Labor.

In addition to the comprehensive index, BLS publishes a large number of subindexes in varying degrees of detail. One series (see table) describes price
changes at various stages of production. Commodities are first divided by stage of processing among
three categories: (1) crude materials for further
processing; (2) intermediate materials, supplies, and
components; and (3) finished goods. Each of these
is further subdivided according to end-use and dura-

bility. Another series consists of separate indexes
for durable and nondurable goods which are published each month for all commodities, total manufactures, and total raw or slightly processed goods.
Indexes by commodity groupings are given each
month for 15 major groups, such as farm products
and processed foods; 84 subgroups such as grains and
cotton products; 261 product classes; and many individual product series. In addition to the above,

indexes for 26 other special commodity groups are
regularly issued, including an index of prices of construction materials.
Statistical procedures.—Basically, the same statistical method is used in computing the Wholesale
Price Index and the Consumer Price Index. The
individual price series are combined into the index
by multiplying the value weight assigned each item
by its current price relative, and summing to obtain
the current aggregate. The current aggregates are
totaled by product classes, subgroups, groups, and
all commodities. The current index for each of these
is obtained by dividing the current aggregate by the
appropriate value weight in the base period.
Each commodity price series in the index, as representative of prices for a group of commodities, is
assigned its own direct weight (the value of the shipments for sale of that individual commodity), plus
the weight of other commodities it wTas selected to
represent in the index. Weights for commodities
not priced for the index are assigned to commodities
which are priced on the basis of available information on similarity of price movements. Statistical
studies and the advice of experts in industry and
elsewhere are utilized in niaking these determinations.
Relation to other series.—The BLS publishes a
weekly index of wholesale prices based on that week's
prices for a small sample (about 250) of the commodities included in the monthly index and an estimate of prices for all other commodities. The
weekly index is calculated as an estimated percentage
change from the latest published monthly comprehensive index. The weekly index is not maintained
as a continuous series.
Uses and limitations.—The index is based for the
most part on producers' prices; therefore, it should
not be used as a measure of price change at the wholesale market level. "Wholesale" as used in the title
of this index refers to sales in large lots, not to prices
paid or received by wholesalers, jobbers, or distributors.

A comparison of the movement of the subgroup indexes of the Wholesale Price Index and the Consumer
Price Index should not be used as a measure of the
change in retailers' margins for the specified groups
of commodities, mainly because the two indexes are
based on different weighting patterns and the lists of
commodities priced are not identical.
The index is designed to measure real price
changes, that is, changes which are not occasioned
by changes in quality, quantity, terms of sale, etc.
It is not designed to measure changes in manufacturers' average realized prices which are affected by
product mix and terms of sale as well as by price
movements.
References.—The basic release of the index is
the report entitled Wholesale (Primary Market)
Price Index, issued by the Bureau of Labor Statistics during the second week of the month following
the month to which the figures relate. Monthly indexes for periods earlier than those shown in current issues of Economic Indicators are available
from the Bureau of Labor Statistics upon request.
A detailed description of the index and its uses and
limitations is presented in the February 1952
Monthly Labor Review (Reprint No. E. 2067) and in
Techniques of Preparing Major BLS Statistical
Series (Bulletin 1168), December 1954. In addition,
statistical series and summaries as well as descriptions of the procedures, uses, and limitations of the
Wholesale Price Index and of the various special
indexes are in a series of annual bulletins Wholesale
Prices and Price Indexes.; 1951^-56 (Bulletin 1214)
which contains a description of the stage of processing series and the construction materials index,
Wholesale Prices and Price Indexes, 1957 (Bulletin
1235) which describes the indexes on durability of
product, and Wholesale Prices and Price Indexes,
1958 (Bulletin 1257) which supplies information on
the January 1958 revision of the weighting structure
and the most recent change in procedures for the
construction materials index.

PRICES RECEIVED AND PAID BY FARMERS
Prices Received by Farmers
Description of series.—The Index of Prices Received by Farmers is computed by the Agricultural
Marketing Service (AMS) of the Department of
Agriculture as a measure of the change from month
to month in average prices of farm products. It is
based on estimates of the average prices received for
all grades and qualities of the important agricultural
commodities at the point of first sale—generally the
local market—about the middle of the month.
The index is based on prices for 55 commodities
which accounted for about 93 percent of the total
cash receipts from marketings of all farm commodities in the years 1953-57. The price data are obtained chiefly by mail on a voluntary basis from
buyers of farm products (e.g., country elevators,
creameries and milk plants, cooperative marketing
organizations, and local dealers) and other persons
with a knowledge of farm product prices (for example, local bankers and farmers).

In addition to the index for "all farm products,"
indexes are prepared for "all crops," with 11 subgroups, and for "livestock and products," with 4 subgroups. Five of these subgroup indexes (fresh fruit;
fresh vegetables; potatoes, sweetpotatoes, and dry
edible beans; dairy products; and poultry and eggs)
are published also on a seasonally adjusted basis.
Statistical procedures.—Weights based on average
quantities sold during 1953-57 have been used since
September 1952 to combine the United States average prices for individual commodities into subgroup
indexes. In combining the subgroup indexes into
group and all-commodity indexes, the index numbers
are weighted by the percentages that cash receipts
from marketings for the particular commodity subgroups bear to total cash receipts for the same period—1953-57. The subgroups and group indexes
are then converted from the 1953-57 to a 1910-14 =
100 base for publication purposes, as required by law.

Prices Received and Paid by Farmers, 1947-60
{Monthly data)
INDEX: 1910-14 = 100
320

PRICES PAID FOR COMMODITIES,
-INTEREST, TAXES AND WAGE RATES-

300

280

260

240

PRICES RECEIVED FOR ALL FARM PRODUCTS
220

I
-V

200
,I..I.,T..I..I..I..T..I..I

1947

T.,I..I

1948 1949 1950 1951

T..1..1

i..i..r..i..i..i..T..i..i..i..T. .1..1..1..T..1..1

1952 1953

1954 1955

T.. •.. i . . •. . T . . •.. i . . . . -T I , . I .

1956 1957 1958 1959 I960

SOURCE OF DATA: DEPARTMENT OF AGRICULTURE

Prices Received and Paid by Farmers
Prices received by :'armers

Year
All farm
products

Crops

Prices paid by farmers

Livestock
and
products

All items,
interest,
taxes, and
wage rates
(parity
index)

Family
living
items

Production
items

Parity
ratio i

Index, 1910-14=100
1929

148

135

159

160

154

146

1930
1931
1932
1933
1934

125
87
65
70
90

115
75
57
71
98

134
98
72
70
81

151
130
112
109
120

144
124
106
108
122

135
113
99
99
114

83
67
58
64
75

1935
1936
1937
1938
1939

109
114
122
97
95

103
108
118
80
82

114
119
126
112
107

124
124
131
124
123

124
124
128
122
120

122
122
132
122
121

88
92
93
78
77

1940
1941
1942
1943
1944

100
124
159
193
197

90
108
145
187
199

109
138
171
198
196

124
133
152
171
182

121
130
149
166
175

123
130
148
164
173

81
93
105
113
108

207
236
276
287
250

202
228
263
255
224

2 211
2 242
288
315
272

190
208
240
260
251

182
202
237
251
243

176
191
224
250
238

109
113
115
110
100

1950
1951
1952
1953
1954

258
302
288
255
246

233
265
267
240
242

280
336
306
268
249

256
282
287
277
277

246
268
271
269
270

246
273
274
256
255

101
107
100
92
89

1955
1956
1957
1958
1959

232
230
235
250
240

231
235
225
223
221

234
226
244
273
256

276
278
286
293
297

270
274
282
287
288

251
250
257
264
266

84
83
82
85
81

1945
1946
1947
1948
1949

2
2
2
2

- --

2
2

1 Percentage ratio of Index of Prices Received by Farmers to Index of Prices Paid, Including Interest, Taxes, and Wage Rates.
2 Includes wartime subsidies paid on beef cattle, sheep, lambs, milk, and butterfat between October 1943 and June 1946.
NOTE.—For the Index of Prices Received by Farmers, monthly and annual data available from January 1910; for the Indexes of Prices Paid, annual data available
from 1910, quarterly from 1923, and monthly from January 1937.
Source: Department of Agriculture.

Revisions have been made in the index series from
time to time, mainly involving revisions in basic price
series or changes in weights. A major revision in
January 1950 put the index on a basis more consistent
with that of the Parity Index, improved the weighting structure, and made minor changes in commodity
coverage. Minor revisions in January 1954 incorporated revisions in component price series and reflected

some revisions in the 1937-41 weight data. The latest
major revision was made in January 1959 at which
time the weight base period was shifted from 193741 to 1953-57, and improvements were made in the
weighting and pricing system for vegetables and for
noncitrus fruits. The new weighting structure was
made effective as of September 1952. The following
table shows the percent weights for important cate-

gories for the three periods 1924-29, 1937-41, and
1953-57:
Relative Weights for Index of Prices Received by Farmers
Commodity group

All farm products
Crops
Food grains
Feed grains and hay
Cotton
Tobacco
Oil-bearing crops
Fruit
Commercial vegetables
Other vegetables
Livestock and products
Meat animals
Dairy products
Poultry and e^gs
Wool_~_
•_

1924-29

1937-41

1953-57

100.0

48.0
8.9
7.5
13. 9
2.6
2.3
6.0
3. 5
3. 3
52. 0
26.1
15.1
9. 9
.9

42.2
7.0
6.7
8. 3
3.7
3.1
5.8
4. 8
2. 8
57. 8
28.6
17.7
10. 2
1.3

45.2
7.9
9.1
8. 4
4.1
4.9
4.7
4. 2
1.9
54. 8
29.1
14.6
10. 7
.4

Relation to other series.—This index should not be
confused with the farm-product component of the
Wholesale Price Index. There are significant differences. The Index of Prices Received by Farmers
measures changes in prices at the point of first sale,
and is based on average prices for all grades of a
given commodity. The Wholesale Price Index, on
the other hand, in general measures prices in selected
central markets, and is based on prices of specific
grades or qualities. Finally, there are differences
in the weights and base periods used in the two
indexes.
Uses and limitations.—The index is widely used
as a measure of changes in average prices received by
farmers for commodities sold in local markets. It
is a close approximation to a measure of the price
component of receipts by farmers from the sale of
farm products. It is used in the computation of adjusted base-period prices, which are necessary for
calculating parity prices under the formula prescribed by the Agricultural Adjustment Act of 1938,
as amended.
The Index of Prices Received by Farmers is designed to measure the change in average prices for
all grades and qualities of the products sold by
farmers. Hence, the price changes it shows do not
result wholly from price changes for specific grades,
but may also reflect changes in the relative proportion of the various grades or qualities of commodities
sold.

61731 O—60

As noted above, the index is based on commodities
which account for about 93 percent of the total value
of farmers' sales. Adequate marketing and price
data are not available for most of the other 7 percent
(timber and other forest products, greenhouse products, and a number of miscellaneous and minor commodities) , but these omissions are probably not significant with respect to the index as a whole.
References.—See below, under Prices Paid by
Farmers.

Prices Paid by Farmers
Description of series.—The Index of Prices Paid
by Farmers for Commodities and Services, Including
Interest, Taxes, and Farm Wage Rates (commonly
called the Parity Index) is computed by the Agricultural Marketing Service (AMS) of the Department
of Agriculture. It is a measure of the changes in
prices paid by farm families for a list of commodities
and services used for family living and farm production.
The index is composed of five major groups: (1)
prices paid for items used in family living, (2) prices
for items used in farm production, (3) interest on
indebtedness secured by farm mortgages, (4) taxes
on farm real estate, and (5) rates of wages paid hired
farm labor. The percents of the total weight which
are accounted for by the groups and their principal
components at different periods are given in the following table. Those utilized in the indexes subsequent to September 1952 are shown in the last column
of the table.
The most recent revision of the index was in January 1959. The revised indexes are of the same general form as those of the preceding revision in 1950.
There were two major changes in the revised series:
(1) a weighting pattern based on farmers' expenditures during 1955 was adopted for the period subsequent to September 1952, in place of the previous
weighting pattern which related to 1937-41; and (2)
the commodity content of the various groups was
modernized and expanded. As of August 1960, the
index of prices paid for items used in family living
included price series for 227 commodities and services, and the index for items used in farm production
included 240, with 39 series being used in both
indexes.

Relative Weights for the Index of Prices Paid by Farmers,
Including Interest, Taxes, and Wage Rates
Weight base period
Item

Commodities, interest,
and cash wage rates

1924-29 1

1937-41 2

1955 3

100.0

100.00

41.2
14. 8
12.5
4. 5
3. 9
2. 4
3. 1
36.4
10.1
4.4
3. 9
3.9
3.4

44. 0
16. 7
8.6
6. 9
5. 9
4. 0
1. 9
41.2
10.2
5.3
5. 2
5.2
4. 5

39. 50
13. 40
6.34
5. 63
5. 77
3. 99
4. 37
50.90
12.80
4.60
8. 39
4.38
5. 21

3.7
2.7
3. 3
1.0
77. 6
5.7
6.5
10.2

2.7
3.1
3. 3
1.7
85. 2
3.8
3.0
8.0

5.20
4.11
3. 66
2.55
90. 40
2.04
.96
6.60

taxes,

Living
Food (including tobacco 4)___
Clothing
Autos and auto supplies
Household operations
Household furnishings
Building materials, house
Production
Feed
Livestock
Motor supplies
Motor vehicles
Farm machinery
Building and fencing materials
Fertilizer and lime
Equipment and supplies
Seeds
Total commodities
Taxes
Interest
Cash wage rates
1 1910 to March 1935.
23 March 1935 to September 1952, inclusive.
Subsequent to Seotember 1952.
4
June 1935 forward.

Statistical procedures.—The index of prices paid
by farmers for commodities and services is based
upon prices of commodities reported by chain and
independent stores and costs of electricity and telephone services reported by farmers. Beginning in
March 1953 the index has been based primarily on
price information collected monthly from chain
stores and quarterly from independent stores. Price
changes for the independent stores in interquarterly
months are estimated largely from changes in chain. store prices. Information on average costs of electricity and telephone services is obtained in an annual survey of about 25,000 farmers. The index base
period 1910-14 is set by law.
Price reports from independent dealers are received in the AMS State offices, where average prices
for the State are calculated for each item. Chain
store prices and farm utility costs are reported directly to the Washington office of AMS. Where appropriate, they are combined with State averages of
independent store prices. Final estimates by States
and commodities are combined into national averages
for each item by weighting each State price estimate
by an estimate of the amount of that commodity purchased by farmers in that State. These estimates of
purchases are based upon the distribution of farm

population, farm income, and other available
information.
From the national averages for each item the
AMS computes subgroup indexes for 15 types of expenditures. Six subgroup indexes (food and tobacco,
clothing, autos and auto supplies, household operations, household furnishings, and building materials
for farm homes) are combined into the index of
prices paid by farmers for items used in family living; and 9 subgroup indexes (feed, livestock, motor
supplies, motor vehicles, farm machinery, building
and fencing materials, fertilizer and lime, equipment
and supplies, and seed) are combined into the index
of prices paid for items used in farm production.
These two group indexes of prices paid for items
used in family living and farm production are then
combined with the indexes for interest, taxes, and
wage rates to form the Parity Index. The index of
interest charges is developed annually on the basis
of data obtained from lending agencies and special
surveys. The tax index is developed annually from
data obtained in special surveys. The wage-rate
index is based on information collected in a quarterly mail survey of farmers.
Relation to other series.—The Index of Prices Paid
by Farmers for family-living items is frequently used
with the Consumer Price Index (CPI) to compare
the movements of retail prices as they affect farmers
and urban workers, respectively. Even though in
some periods the movements of the two indexes have
been quite similar, there are important differences
between the two indexes which on occasion give rise
to differences in movements. Some of the principal
differences are:
1. The lists of commodities included in the two
indexes are not identical, and different weights are
used for individual commodities, since the CPI is
based on the purchasing habits of urban families
and the farm family-living index on those of farm
families.
2. Expenditures for all major commodity and service groups purchased by urban families are represented in the weights for the CPI. It has not been
possible to include in the family living component of
the Parity Index price series for certain types of
farm family-living expenditures. For example, medical care, utilities, public transportation, and personal care are directly represented in the CPI; but
of these only telephone nad electricity costs are rep-

resented in the farm family-living index. Since few
farmers rent homes other than those that are rented
with the farm, the farm family-living index does not
include residential rents. The CPI price series represent various costs of homeownership—purchase,
repairs and maintenance, and insurance; whereas the
prices of building materials for houses comprise the
only representation of this expenditure group which
it has been possible to include in the farm familyliving index.
3. Although both the CPI and the farm familyliving index are composed of a fixed list of items for
any two successive dates, the CPI measures price
changes in successive periods for narrowly specified
descriptions of the items, whereas the Index of Prices
Paid by Farmers is designed to measure average price
changes for those qualities of each item which are
currently purchased in greatest volume by farmers.
These qualities may change in response to (a)
changes, resulting from technological developments
and other causes, in the quality or types of commodity stocked by merchants, or (b) changing levels of
farm income.
Uses and limitations.—The Index of Prices Paid
by Farmers for Commodities and Services, including Interest, Taxes and Wage Rates is based for the
most part upon data relating to the middle of a given
month. For certain uses, in accordance with statutory formulae, it constitutes the Parity Index for
the following month; that is, the Index and parity
prices of individual commodities computed from it
are the legally applicable index and parity prices for
the month following that to which the prices-paid

data relate. Agricultural support programs are in
many cases based on these parity prices.
The Index of Prices Paid by Farmers including
Interest, Taxes and Wage Rates is a close approximation to a measure of the price component of aggregate expenditures by farmers for living and production purposes.
References.—The Parity Index and the Index of
Prices Received by Farmers are published monthly by
AMS in Agricultural Prices. Supplements to Agricultural Prices in January and February 1959 present
the revised Indexes of Prices Received by Farmers,
the Parity Index, and subgroup indexes for both
prices received and prices paid. A comprehensive
discussion of the January 1959 revision of the price
indexes is presented in the April-July 1959 issue of
Agricultural Economics Research. A detailed description of the price series is presented in The Agricultural Estimating and Reporting Services of the
United Slates Department of Agriculture (Miscellaneous publication No. 703 of the Department of
Agriculture).

Parity Ratio
The Parity Ratio is computed by dividing the
Index of Prices Received by Farmers by the Index
of Prices Paid, Including Interest, Taxes, and Farm
Wage Rates. It measures the extent to which prices
farmers receive for farm products are on the average
higher or lower in relation to the prices they pay for
goods and services than they were in the base period,
1910-14.

MONEY, CREDIT, AND SECURITY
MARKETS
MONEY SUPPLY
Description of series.—"Money supply" is shown
here as the total of the public's holdings of coin, currency, and demand deposits. The currency component is the total of coin and currency in circulation
outside the Treasury and Federal Reserve Banks,
from which has been deducted the vault cash holdings
of commercial banks (but not that of other financial
institutions). The deposit component includes demand deposit liabilities to nonbank financial institutions, mutual savings banks, foreign banks, and
State and local governments, but excludes those to
other commercial banks and to the Federal government.
Whereas the demand deposit component of the
money supply series relates to all commercial banks,
the demand deposit series for "member" banks excludes a fraction of the commercial banks, while including the time deposits of a small number of member mutual savings banks. (For a discussion of these
categories of banks see the section on bank loans and
investments, p. 94 ff.) The demand deposit series
for member banks is otherwise consistent with, and a
component of, the total demand deposit series, unadjusted.
All monthly data are showTn as averages of daily
figures while annual data are averages of daily figures for December. In general the series cover all
banks in the United States, with upward adjustments
(amounting to approximately $400 million for demand deposits) during 1959 for the admission of
Alaska and Hawaii to statehood.
Statistical procedures.—The total of demand deposits is derived, on the basis of daily figures reported by member banks, as follows: from the total
of reported demand deposits of member banks (excluding interbank deposits of domestic commercial
banks) are deducted cash items in process of collection and U.S. Government demand deposits. To
this is added an estimate of deposits in nonmember

banks based on reported daily figures from "country"
member banks (those outside the larger centers) in
conjunction with "call report" data from nonmember banks. From this aggregate is deducted the
Federal Eeserve float, the resulting figure being the
estimate for demand deposits. The member bank
series are based on daily figures reported by member
banks.
The component for currency is derived from daily
Treasury figures for money "in circulation" (i.e., outside Treasury and the Federal Reserve Banks) from
which is deducted an estimate of vault holdings of
commercial banks, based on reported member bank
data and an estimate for nonmember banks prepared
by a method similar to that for estimating deposits.
Seasonal adjustment is made separately for the
two components, on a semimonthly basis, using a
ratio-to-moving-average
procedure. Adjustment
factors applied to the 24 semimonthly periods for
1959 are as follows:
Seasonal Adjustment Factors for Money Supply Series: 1959
Deposit
Component

Period

Jan. 1
2
Feb. 1
2
Mar. 1
2
Apr. 1
2
May 1
2
June 1
2
July 1
2
Aug. 1
2
Sept. 1__
2
Oct. 1
2
Nov. 1
2
Dec. 1
2

___

_
___

103.3
102.5
100.9
99.4
99.6
98.8
99.3
100.6
99.1
97.9
98.9
98.8
98.4
99. 4
99.6
98.5
99.4
99.2
99.5
100.2
100.8
100.8
102. 1
103. 0

Currency
Component

100.7
98.8
99.1
98.5
99.0
98.7
99.3
98.6
99.2
99.2
100.2
99.7
101.1
100. 1
100.7
100.3
100.8
99.9
100.5
99.9
100.7
101.1
102. 0
102. 0

Money Supply
[Averages of daily figures, billions of dollars]
Money supply
Deposits at member
banks (unadjusted) 2

Unadjusted

Seasonally adjusted
Period
Total

Currency
outside
banks

Demand
deposits * 2

Total

Currency
outside
banks

Demand
deposits 12

Demand

Time

U.S.
Government

1947: December _
1948: December
1949: December

112. 3
110. 7
110. 1

26. 5
25. 9
25. 2

85. 9
84. 9
85.0

115. 0
113. 3
112. 7

26. 8
26. 1
25. 5

88. 2
87. 2
87. 3

74. 6
73. 9
74. 2

28. 2
28. 6
29. 1

0.8
1. 6
2. 5

1950:
1951:
1952:
1953:
1954:

December
December
December
December
December

115. 3
122. 0
126. 5
128. 2
131. 8

25. 0
26. 2
27. 4
27. 8
27. 4

90. 3
95. 8
99. 1
100. 4
104. 4

118. 1
125. 1
129. 8
131. 4
135. 0

25. 4
26. 6
27. 8
28. 2
27. 9

92. 7
98. 5
102.0
103. 2
107. 1

79.0
83. 6
86. 2
86. 9
90. 5

29. 4
30. 7
33. 1
35. 8
39. 1

2. 1
2. 5
4. 5
3. 5
4. 6

1955:
1956:
1957:
1958:
1959:

December
December
December
December
December

134. 7
136. 5
135. 5
140. 9
141. 5

27. 8
28. 3
28. 3
28. 7
28. 9

106. 9
108. 3
107. 2
112. 2
112. 6

137. 9
139. 7
138. 7
144. 3
144. 9

28. 3
28. 7
28. 9
29. 2
29. 5

109. 6
111. 0
109. 9
115. 1
115. 5

92. 4
93. 2
92. 1
96. 0
95. 7

40. 3
41. 7
45. 9
52. 7
53. 7

3. 0
3.0
3. 1
3. 4
4. 4

___

Demand deposits at all commercial banks (member and nonmember).
For definition of member banks, see text, p. 95.
Source: Board of Governors of the Federal Reserve System.
2

Relation to other series.—There is no single accepted definition of money supply. Since 1948, Federal Reserve has published monthly a "Consolidated
Condition Statement for Banks and the Monetary
System" showing various components of the total of
deposits and currency (including some not covered
by the definition of money supply explained above)
and alternative aggregates, allowing the analyst some
flexibility in his choice of data for monetary analysis.
The series here shown for money supply (first
published in October 1960) differ from the similar
aggregate shown in the consolidated statement for
"demand deposits and currency adjusted" as follows:
they are averages of daily figures, whereas the older
series is for the last Wednesday of the month or a
corresponding "call date''; the deduction of the Federal Reserve float has been introduced as a further
adjustment to eliminate double counting; and deposit balances due mutual savings banks and foreign
banks, previously deducted from commercial bank
demand deposits, are included in the current money
supply series. The new series is less erratic than the
old and is consistently higher. Thus the current

money supply figure seasonally adjusted for the last
half of June 1960, is $139.4 million; the corresponding figure in the consolidated statement for "demand
deposits adjusted and currency" is $138 million.
For the convenience of readers desiring a measure
of deposits and currency over a longer period, the
older comparable series for the total of demand deposits and currency, without seasonal adjustment, on
a year-end basis, is as follows:
[Billions of dollars]
1929-

26. 4

1930_
1931
1932
19331934_

24.
21.
20.
19.
23.

1935_
1936_
1937_
1938_
1939_

27.
31.
29.
31.
36.

1940_
1941.
1942_
1943_
1944_

42.
48.
62.
79.
90.

1945
1946
1947
1948
1949

6
9
4
8
1 1950
1951
0 1952
0 1953
6 1954
8
2 1955
1956
3 1957
6 1958
9 1959
6
4

102.
110.
113.
111.
111.

3
0
6
6
2

117.
124.
129.
130.
134.

7
5
0
5
4

138.
139.
138.
144.
144.

2
7
6
2
8

The measure of money supply presented here is to
be distinguished sharply from the well known Treasury figure for money "in circulation/' The latter is a
much smaller aggregate covering only paper money
and coin outside the Treasury and Federal Reserve
Banks, and does not include the much larger volume
of demand deposits as a component of the money
supply. Nor is the Treasury figure identical with
the currency component of the money supply figure,
since the latter excludes from the total "in circulation'' the relatively small amount held as vault
cash by commercial banks.
Uses and limitations.—Changes in the total of deposits and currency, whether regarded as causative
or symptomatic, are important factors in the analysis
of economic change and of monetary policy. The
definition of money supply here used has been chosen
from among alternative definitions as one closely related to the mechanism through which money is
created or extinguished. The money supply series
permit a reasonably adequate measurement of the
level and movement of this aggregate. They should
be considered in the light of changes in the use of

deposits as measured in the series on bank debits
shown in the table on p. 96.
For analytical uses requiring attention to a broader
group of highly liquid assets possessing some of the
attributes of money, the reader may turn to the memorandum items and to the consolidated statement,
still available monthly, for information on other
series not included in money supply including U.S.
Government deposits and time deposits.
References.—The new money supply series are
issued semimonthly by Federal Reserve, and appear
monthly in the Federal Reserve Bulletin. An article
in the October 1960 Bulletin presents semimonthly
figures beginning wTith 1947, with a technical discussion of the derivation of the series. The related Consolidated Condition Statement continues to appear in
the monthly release G.7 and in the Bulletin, with
data for most component series for selected years to
1929. Historical data on deposits and currency are
available in Banking and Monetary Statistics back to
1892 and in Historical Statistics of the United States
back to 1867.

BANK LOANS, INVESTMENTS, DEBITS, AND RESERVES
Description of series.—Major loan and investment
categories are shown for all commercial banks in the
United States. Commercial banks are in general distinguished from other lending institutions by the fact
that they accept deposits subject to check or withdrawal on demand. They number approximately
13,500. Mutual savings banks are not included, nor
are savings and loan associations or, in general, any
other "banking" institutions which do not receive demand deposits. The all commercial bank series has
been increased by the addition of banks in Alaska and
Hawaii in January, April, and August 1959, with an
increase in total loans and investments of approximately $659 million.
The "weekly reporting member banks" for which
"business loans" are shown comprise approximately
350 banks which are members of the Federal Reserve
System (see below) and are located in (or with head
offices in) approximately 100 cities. They account
currently for over half of the total commercial bank-

ing loans and investments.. The cities are the more
important banking centers within each Federal Reserve district, and within each city the reporting
banks constitute a voluntary sample, usually accounting for over 90 percent of member bank resources.
The weekly reporting member bank series has been
revised from time to time, most recently in July 1959,
with significant expansion in coverage.
The category of "business loans" is a major component of total loans. In general, it includes all commercial and industrial loans (and agricultural loans
prior to 1956) except those secured by real estate or
for the purpose of purchasing or carrying securities,
and loans to financial institutions. The exclusion of
the latter category was accomplished by the revision
of July 1959, when such loans were reclassified, with
a reduction of approximately 14 percent in the total
of commercial and industrial loans. Data prior to
July 1959 are not available on the revised basis.
Monthly estimates for "business loans" of all com-

mercial banks are not available, but the weekly reporting banks currently account for about 70 percent
of all such loans.
The series on bank debits outside New York City
covers debits to demand deposit accounts, except interbank and U.S. Government accounts. They are
aggregates for approximately 1,700 reporting banks
in the 343 leading centers and cover substantially all
debits in those centers.
Data on reserves and borrowings are reported for
all member banks of the Federal Eeserve System.
With few exceptions these are commercial banks, and
comprise approximately 4,600 nationally chartered
banks ("National banks") plus about 1,700 State
chartered banks which have chosen, and have been
found eligible, to join the Federal Eeserve System.
Member banks account currently for about 85 percent
of the total loans and investments and total deposits
of commercial banks. Required reserves are mini-

mum balances required to be maintained by member
banks pursuant to Federal Reserve regulations, measured as a percent of deposit liabilities and varying
with the type of deposits and the classification of the
bank; these reserve requirements vary from time to
time. Prior to December 1959, the only permissible
legal reserves were balances with the Federal Reserve
Banks; since then, the inclusion of vault cash has
been allowable at first in limited amounts, and beginning with November 24, 1960 all such cash. Excess
reserves are member bank balances of these types
maintained in excess of the required minimum.
Member bank figures have been affected as have those
for all commercial banks by the inclusion of banks
in Alaska and Hawaii.
Monthly figures shown for commercial banks and
weekly reporting member banks are as'of the last
Wednesday of the month, except that final December
figures for "all commercial banks" are as of the last

Loans and Investments at All Commercial Banks, 1947-60
(Monthly data)
BILLIONS OF DOLLARS
200

TOTAL LOANS AND INVESTMENTS

150

100

U.S. GOVERNMENT SECURITIES

OTHER SECURITIES
• I < r 1 1 1 1 1 . 1 • 11 • • I . • I • 1 1 1 1 1 . • I •. I . . I

1947

1948

1949

1950

,1,

I • H • • 1 1 . 1 . i i . 111 11 •. 1 . . I . . I , .1,. I . . ] . .

1951

1952

1953

1954

1955

1956

1957

1958

1959

I960

SOURCE OF OATA: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Bank Loans, Investments, Debits, and Reserves
Weekly
reporting
memberl
banks

All commercial banks

Year

Total
loans
and
investments

Investments
Loans

U.S. Government
securities

Other
securities

Business
loans

All member banks
Bank
debits
outside
New York
City 2

Reserves

Required

Millions of dollars

Billions of dollars
35. 7

4. 9

34.
29.
21.
16.
15.

5
2
8
3
7

4
4
4
4

5.
6.
6.
7.
* 10.

0
0
2
5
3

9. 4
9. 7
8. 1
6. 5
6. 7

1
6
4
7
7

15.
16.
17.
16.
17.

2
4
2
4
2

13.
15.
14.
15.
16.

8
3
2
1
3

7.
7.
7.
7.
7.

43.
50.
67.
85.
105.

9
7
4
1
5

18.'8
21. 7
19. 2
19. 1
21. 6

17.
21.
41.
59.
77.

8
8
4
8
6

7. 4
7. 2
6. 8
6. 1
6. 3

124.
114.
116.
114.
120.

0
0
3
3
2

90.
74.
69.
62.
67.

6
8
2
6
0

7. 3
8. 1
9. 0
9. 2
10. 2

126.
132.
141.
145.
155.

7
6
6
7
9

26. 1
31. 1
38. 1
42. 5
43. 0
52. 2
57. 7
64.2
67. 6
70. 6

62.
61.
63.
63.
69.

0
5
3
4
0

12.
13.
14.
14.
16.

4
3
1
7
3

160.
165.
170.
185.
190.

9
1
1
2
3

82. 6
90. 3
93. 9
98. 2
110. 8

61.
58.
58.
66.
58.

6
6
2
4
9

16.
16.
17.
20.
20.

7
3
9
6
5

1929_

1930
1931
1932
1933
1934

4
4
4
4
4

49. 4

48.
44.
36.
30.
32.

9
9
1
4
7

4
4
4
4
4

1935
1936
1937
1938
1939

36.
39.
38.
38.
40.

1940
194.1
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951--.
1952
1953
1954
1955
1956
1957_
1958.
1959-

.. _

;

379. 4

8. 7

1
9
0
2
1

Borrowings
at Federal
Reserve3
Banks

3
5
3
8
7

2, 342
2,009
1,909
7
1, 850
7
2, 289

218. 7
253.0
271. 6
237.2
252. 6

318.
251.
179.
6
154.
190.

()

4. 6
3. 8
4. 4

2,347

801

73
60
526
7
766
1, 748

337
763
281
95
10

2,733
4, 619
5, 808
5,519
6,462

2,983
2,046
1,071
3, 226
5,011

7, 403
9, 422
10, 776
11,701
" 12, 884

6,646
3, 390
2, 376
1,048
1,284

6
7
16
7
3
3
5
4
90
265

0
7
1
4
5

274.
339.
396.
8
476.
521.

3
6
1
3
1

7. 3
11. 3
14. 7
15. 6
13. 9

541.
610.
705.
784.
760.

7
3
3
3
1

14,
15,
16,
19,
15,

536
617
275
193
488

1,491
900
986
797
803

334
157
224
134
118

8
6
4
4
4

870. 8
998. 2
1, 045. 0
1, 126. 3
1, 148. 4

142
657
1, 593
441
246

1, 276. 7
1, 384. 8
1, 468. 3
1,481.0
1, 655. 6

364
484
457
227
576
646
883
843
383
450

1,027
826
723
693
703

26. 7
30. 8
31. 8
9
31. 7
10
30. 5

16,
19,
20,
19,
18,
18,
18,
18,
18,
18,

5.
6.
6.
6.
6.
9

17.
21.
23.
23.
22.

594
652
577
516
482

839
688
710
557
906

1
Weekly reporting banks include approximately 350 banks in leading cities. Business loans include commercial and industrial loans and, prior to 1956, agricultural2 loans. Series revised beginning July 1946, January 1952, July 1958, and July 1959.
Currently 343 centers reporting. This number has varied, beginning with 268 in 1929.
:i
Averages of daily figures on balances and borrowings during December.
4
June data. Complete end-of-year data are not available prior to 1935 for U.S. Government obligations and other securities.
5
Not available.
6
Figures for 11 months because of bank holiday in March.
?8 Data from March 1933 through April 1934 are for licensed banks only.
Revised
series beginning in 1943.
9
Series revised to extend coverage; previous figures not entirely comparable. Old series data are $10.3 billion for 1946, $23.2 billion for 1952, and $30.8 billion for 1958.
10
Series revised to exclude loans to nonbank financial institutions; previous figures not entirely comparable. Revised figure not available.
NOTE. — Between January and August 1959, these series (except that for weekly reporting member banks) were expanded to include data for all banks in Alaska
and Hawaii.
Source: Board of Governors of the Federal Reserve System.

day of the month. The same is true of final June
figures when a "call date" falls on or' near the last
day of June. Reserves and borrowings are shown
as averages of daily figures during the period.
96

Statistical procedures.—The "All commercial
banks" and "Weekly reporting member banks" series
are closely related. The weekly series is based on
weekly reports filed with Federal Reserve Banks and

compiled cooperatively by these banks and the Board
of Governors. Published figures are simple aggregates for the reporting banks. The monthly estimates for all commercial banks are prepared, also
by the Federal Reserve System, on the basis of the
weekly series, monthly reports from all other member banks, and other information. Estimates are
made for nonmember banks, accounting currently for
about 17 percent of commercial bank credit, on the
basis of the relationship between the movement of
"country" member banks (those outside the major
cities) and that of the nonmember banks, as determined semiannually when complete reports for the
banking system are available. The December (and
when appropriate the June) estimates are later replaced by "benchmark" figures for all commercial
banks. These benchmarks are compiled by the Federal Deposit Insurance Corporation on the basis of
compulsory "call reports" filed by all banks subject
to Federal supervision (national banks, State member banks, and nonmember insured banks) with one
or another of the Federal bank supervisory agencies,
and of information obtained from State banking authorities and other sources for the relatively few uninsured banks. Interim monthly estimates are revised only when some substantial error of estimate is
suggested by the benchmarks.
The debits series is a simple aggregate of the reports of reporting banks. Monthly data are seasonally adjusted by means of a modified ratio-to-movingaverage procedure. The series shown is a composite
of adjusted series derived separately for each of six
major centers and for the aggregate of the other
centers.
The series on required and excess reserves and
member bank borrowing is based on reports of deposits, reserves, and borrowing from all member
banks, filed biweekly or more frequently, depending
on the class of bank.
Relation to other series.—The Federal Government publishes a variety of statistical series covering all or part of the banking system. For purposes
of general analysis, these will not necessarily lead to
significantly different conclusions, but the differences
should be kept in mind. Thus, the all-commercialbank series should be distinguished from the somewhat larger "all-bank" series which includes some
500 mutual savings banks; and from smaller aggregates such as those for national banks and insured
commercial banks. The all-commercial-bank aggre61731 O—GO

gates here are for the United States, exclusive of possessions, and may differ slightly from totals which include banks in the possessions, published by the
Comptroller of the Currency and the FDIC.
The weekly series includes most of the larger banks
in larger cities and covers a substantial segment of
total commercial bank resources. Although the series
is not identical in coverage with any published call
report aggregate, it is similar in coverage to the aggregate for all member banks other than "country"
banks. The "business loans" series is shown in Federal Reserve publication as "commercial and industrial loans." A more recently developed Federal
Reserve series showing changes in commercial and
industrial loans by type of business of borrower,
weekly from 1951, is based on a subsample of the
weekly reporting banks and ties in with the aggregate
commercial and industrial loan figure.
The series on reserves and member bank borrowings, being averages of daily figures, are not directly
comparable with week-end or month-end member
bank or Reserve bank statistics.
Uses and limitations.—The all-commercial-bank
figures are useful indicators of business activity and
trends in bank credit use. Data for the weekly reporting member banks are more frequent and more
prompt than those for all commercial banks and
provide the more detailed category of "business
loans." The weekly series also is a more sensitive
indicator of developments in the short-term money
market, because it covers the larger banks in the more
important centers.
The series on reserves and borrowing are a partial
reflection of the credit potential of the banking system. Excess reserves are available, to the banks
holding them, for further credit expansion. Member
bank borrowing from the Reserve banks reflects the
extent to which some banks (not holding excess reserves) have borrowed temporarily to meet minimum
reserve requirements. A measure known as "free reserves" may be computed by subtracting borrowings
from excess reserves. The series on required and excess reserves forms an integral part of the significant
weekly and monthly Federal Reserve tabulation entitled "Member Bank Reserves, Reserve Bank Credit
and Related Items," which shows interrelationships
among various sources and uses of reserve funds.
Users should recognize that there is a seasonal movement in the data on loans and reserves.
References.—The monthly estimates for all com-

mercial banks appear initially about two weeks after
the last Wednesday of the month in a Federal Reserve release G.7, showing the major balance sheet
items and changes during the past month and year
for all banks, all commercial banks, and member
banks. The Federal Reserve Bulletin also carries the
estimates for recent months, with call report data for
selected years back to 1941. Historical data to 1914
and explanatory technical footnotes are presented in
Banking and Monetary Statistics.
The Wednesday data for the weekly reporting
member banks appear initially on the following
Wednesday in a Federal Reserve release (H. 4.2),
showing also changes in assets and liabilities over the
last week and year. The Federal Reserve Bulletin
carries the weekly data for the last two months and
for the comparable month a year ago. Historical
data from 1919 appear in Banking and Monetary
Statistics. The most recent revision of the weekly
series is discussed in the August 1959 Federal Reserve Bulletin.
Debits figures appear in an advance monthly release (G. 6), showing aggregates for all centers, for
Federal Reserve districts, and for individual centers,
and in an annual summary release, G.5. A sum-

mary table appears monthly in the Federal Reserve
Bulletin, with annual data for about eight years.
The last major revision of the debits series is discussed in the April 1953 Bulletin. Back data may be
traced in current and past issues of the Federal Reserve Bulletin, and historical data, though not wholly
comparable, are presented in Banking and Monetary
Statistics back to 1919.
Figures for member bank reserves and borrowings
appear first in the wreekly release H.4.1, showing
weekly averages of daily figures, available the day
following the end of the weekly period. The biweekly release J.I gives similar data for biweekly
periods (semimonthly periods prior to 1959) available with a lag of about twenty days. Weekly and
monthly data appear in the Bulletin, and back data
may be traced in current and past issues and in Banking and Monetary Statistics back to 1914.
Banking and Monetary Statistics, published by the
Federal Reserve Board in 1943, contains technical
discussions of the general banking series, the weekly
reporting member bank series, and the data on reserves. Historical Statistics of the United States,
Colonial Times to 1957 presents earlier banking series, in part back to 1834.

CONSUMER CREDIT
Description of series.—These series are estimates
of short- and intermediate-term consumer credit, in
total and for major types. "Consumer credit" is defined as all credit used to finance the purchase of
commodities and services for personal consumption
or to refinance debts originally incurred for such
purposes. Credit covers both loans and sales involving deferred payment. Personal consumption
is defined so as to exclude consumption not only by
businesses but by nonprofit organizations. The estimates exclude home mortgage credit, traditionally
considered separately.
Instalment credit, accounting for the bulk of consumer credit, is that scheduled to be repaid in two
or more payments. Instalment credit classified as
"Automobile paper" includes credit for the purchase
of automobiles regardless of whether originating as
loans or as credit sales, and regardless of whether the
paper is held by a merchant or a financial institution. Other components of total instalment credit are
"other consumer goods paper," defined analogously
to automobile paper; "repair and modernization
loans" held by financial institutions (but not those
98

held by retail outlets, which are included instead in
other consumer goods paper) ; and so-called "personal loans" comprising loans by financial institutions
for all other consumer purposes, such as to consolidate
debts, to pay medical expenses, or for education.
"Noninstalment credit" comprises three major types:
charge accounts (including service station and miscellaneous credit-card accounts and home heatingoil accounts) ; single-payment loans; and service
credit (including that extended by a variety of
creditors including hospitals, doctors, utilities, and
service establishments).
The above definition is followed generally but not
rigidly in the construction of the series. In the
absence of sufficiently refined data, certain arbitrary
decisions have been made. For example, all bank
credit to farmers is excluded even though an undetermined part is for consumption. All credit for
the purchase of passenger automobiles by individuals
is included even though an undetermined (but presumably very small) part of the use is for business
purposes.
The several series on instalment credit extended and

repaid measure the gross flows of lending and repayment which explain changes in the level of instalment
credit outstanding. The monthly series, as shown in
Economic Indicators, are adjusted for trading day
and seasonal variation.
Data for Alaska were added in January, and for
Hawaii in August, of 1959, with an increase in total
consumer credit of approximately $180 million.
Statistical procedures.—The several series are, in
general, aggregates of separate estimates of the
credit held (or extended and repaid) by various
types of creditors—financial institutions, retail and
service establishments, and others. The procedures
vary but in general involve estimates based on a
benchmark and moved by monthly sample data. The
1948 Census of Business and subsequent annual surveys provide benchmarks for credit held by the
various retail lines. For the more important creditgranting lines there are monthly and annual sample
data on receivables. For some lines monthly receivables are estimated on the basis of weight sales adjusted annually to survey benchmark data. Monthly
data on receivables are available from the more im-

portant financial institutions engaged in consumer
lending. Benchmarks for credit outstanding are
provided for certain holders by annual or more frequent reports with complete coverage, and for others
by occasional special surveys. In process, as of this
writing, is a benchmark survey of sales and consumer
finance companies (or finance companies) as of 1960,
to update the benchmark derived from a similar previous survey in 1955. Estimates of service credit
vary but in general must rely on less substantial data.
The largest component, medical debt, is based on
periodic (usually annual) data collected in a sample
survey of consumers and an estimated seasonal pattern. However, virtually complete reports on certain
utility receivables are available monthly or semiannually.
Estimates of instalment credit extended and repaid are derived from currently reporting samples of
lending and instalment-selling groups covering
either collections or credit extended. These data
as shown currently on a monthly basis have been adjusted by type of credit and major holder groups, for
both trading day and seasonal variation, by means of

Consumer Credit Outstanding, 1947-60
(Short- and intermediate-term.

End-of-month data)

BILLIONS OF DOLLARS
60

TOTAL CONSUMER CREDIT

AUTOMOBILE PAPER

NONINSTALMENT CREDIT
1947

1948 1949 1950

1951 1952 1953 1954 1955 1956 1957

1958 1959

I960

SOURCE OF OATA: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Consumer Credit
[Millions of dollars]
Consumer credit outstanding, end of year
Instalment

Year

Total

NoninAutomobile stalment
paper

Total
Total

Instalment credit extended and repaid

Extended

Automobile paper
Repaid

Extended

Repaid

6,444

3, 151

1,384

3,293

5,799

5,350

2,584

2,334

5, 767
4,760
3,567
3,482
3,904

2, 687
2,207
1,521
1,588
1,871

986
684
356
493
614

3, 080
2, 553
2,046
1,894
2,033

4,814
3,866
2,435
2,480
3, 125

5,278
4,346
3, 121
2, 413
2,842

1, 869
1, 282
640
817
1,039

2,267
1, 584
968
680
918

4, 911
6, 135
6, 689
6,338
7,222

2, 694
3, 623
4,015
3, 691
4, 503

992
1, 372
1,494
1, 099
1, 497

2,217
2, 512
2,674
2,647
2,719

4, 189
5,617
6,308
5, 406
6,872

3,366
4,688
5,916
5, 730
6,060

1,630
2,226
2,393
1,594
2,338

1,252
1,846
2,271
1,989
1,940

8,338
9, 172
5, 983
4,901
5, 111

5,514
6,085
3, 166
2, 136
2, 176

2,071
2,458
742
355
397

2,824
3,087
2,817
2,765
2,935

8,219
9, 425
5,239
4,587
4,894

7,208
8,854
8, 158
5,617
4,854

3, 086
3, 823
I, 022
762
930

2,512
3, 436
2, 738
1, 149
888

5, 665
8, 384
11,598
14, 447
17, 364

2,462
4, 172
6, 695
8,996
11,590

455
981
1,924
3, 018
4, 555

3, 203
4, 212
4,903
5, 451
5, 774

5,379
8,495
12, 713
15, 585
18, 108

5, 093
6, 785
10, 190
13, 284
15, 514

999
1,969
3,692
5,217
6,967

941
1,443
2, 749
4, 123
5,430

1950
1951
1952
1953
1954

21,
22,
27,
31,
32,

471
712
520
393
464

14,
15,
19,
23,
23,

703
294
403
005
568

6,074
5, 972
7,733
9,835
9, 809

6,768
7, 418
8, 117
8,388
8,896

21, 558
23, 576
29, 514
31, 558
31, 051

18,
22,
25,
27,
30,

445
985
405
956
488

8,530
8,956
11, 764
12, 981
11,807

7,011
9,058
10, 003
10, 879
11, 833

1955
1956
1957
1958
1959

38, 882
42,511
45, 286
45, 586
52, 046

28,
31,
34,
34,
39,

958
897
183
080
482

13, 472
14, 459
15, 409
14, 237
16, 590

9,924
10, 614
11, 103
11,506
12, 564

39, 039
40, 175
42, 545
40, 818
48, 476

33,
37,
40,
40,
43,

649
236
259
921
239

16,
15,
16,
14,
18,

13, 082
14, 576
15, 595
15, 488
15, 715

1929 ___
1930
1931 . . .
1932 ___
1933
1934

__.

_
.._

1935
1936
1937
1938
1939 _
1940 __
1941
1942
1943
1944 _
1945
1946
1947
1948
1949

_ ___ _ ___ _

_ __

_ _

__ _ _

_ __ _

745
563
545
316
001

NOTE.—Data for Alaska and Hawaii included beginning January and August 1959, respectively.
Source: Board of Governors of the Federal Reserve System.

a ratio-to-moving-average procedure. The imputed
adjustment factors for total instalment credit for the
12 months of 1959 are as follows:
Credit extended

January
February
March
April
May
June
July
August
September
October
November
December

100

87
85
101
102
100
111
104
102
97
99
96
116

Credit repaid

100
94
105
100
96
104
102
98
99
101
98
104

Relation to other series.—The series shown here
are selected from a more comprehensive body of consumer credit data prepared by Federal Reserve,
showing consumer credit outstanding by major types
in greater detail; instalment credit outstanding by
type of holder; and supplementary tabulations of
instalment credit of commercial banks, sales finance
companies, and other financial institutions, and of
noninstalment credit by t}^pe of holder. Instalment
credit extended and repaid for major types, with
changes in outstanding credit, are shown on both an
adjusted and an unadjusted basis. Related series

may also be found as components of the separate
statistics published for banks, and other financial
institutions.
Uses and limitations.—The widespread interest in
consumer credit is due in part to its importance as
a source of consumer purchasing power and especially its significance in the market for consumer
goods frequently bought on the instalment plan. In
part it is due to the fact that consumer credit reflects
one aspect of the financial position of consumers.
Consumer credit is also an important element in the
demand for funds in the financial community.
Because of the difficulty of adapting available data
to the precise definition of consumer credit adopted,
Federal Eeserve faces problems of both over- and
under-coverage, the net effect of which is probably
some understatement of the true total of consumer
credit outstanding.

References.—General discussions of concepts and
sources and estimating techniques appeared in the
Federal Reserve Bulletin for April 1953 and October
1956. A more complete treatment is available on
request from Federal Reserve. Consumer credit estimates appear originally in several monthly Federal
Reserve releases of which the basic one is "Consumer
Credit (Short and Intermediate Term)." Current
data with selected historical data appear in detail
in monthly issues of the Bulletin supplemented by
occasional comprehensive revisions. For consumer
credit outstanding the most recent revision, covering
1947-58, appeared in the November 1959 Bulletin.
The same issue contains revised data for credit extended and repaid for 1956-58, with references to
earlier revisions for previous years. Historical Statistics of the United States, Colonial Times to 1957
contains selected data back to 1929.

BOND YIELDS AND INTEREST RATES
callable after 15 years; April 1952 to March 1953,
bonds
due or callable after 12 years; and April 1953
Treasury bills are issued weekly. An average disto
date,
bonds due or callable after 10 years.
count rate is computed for each weekly issuance, on
In
December
1959 the series included the followthe basis of the varying prices at which portions of
ing
bonds:
3%
percent
of 1974, 3*4 percent of 1978the issue are awarded, in order, to the highest bidders.
The monthly series presented in Economic Indicators 83, 4 percent of 1980, 3% percent of 1985, 3y2 peris a simple average of the average rates for the 4 or 5 cent of 1990, and 3 percent of 1995. The maturity
distribution of the bonds entering into the computaissues during the month.
The series is useful as a measure of a short-term tion will vary with the passage of time and as
rate on relatively riskless borrowing. Issuance or new bonds are added or old bonds removed.
The series is based on daily closing-bid quotations
''auction" rates are related to but not typically
in
the over-the-counter market as reported to the Fedidentical with average "market" rates, also published
eral
Reserve Bank of New York by leading dealers
by Federal Reserve, which are averages based on
in
New
York City, for the period April 1953 to date.
daily trading quotations for the issue of longest
Prior
to
this period the yields were computed on the
maturity.
basis
of
the
mean of closing bid and ask quotations.
The monthly averages are issued in an advance
The
table
shows
averages of daily figures, each of
Federal Reserve release, G. 13, and are published in
which
is
an
unweighted
average of yields on the
the Federal Reserve Bulletin. Fuller information
individual
bonds.
on the individual issues appears in the Treasury
The series is published monthly in the Treasury
Bulletin. Textual discussion appears in Banking
and Monetary Statistics, with yield data back to Bulletin, A similar series is published in the Federal Reserve Bulletin, and in the Federal Reserve
1929.
release G. 13, Open Market Money Rates. The two seTaxable Bonds
ries differ only in that the series in the Treasury BulFully taxable bonds were first issued in 1941, and letin includes yields based on "when issued" prices for
the series on average yields on fully taxable long- new issues. The difference is generally very small
term bonds began in October 1941. The series in- and is limited to those months in which new secucludes, for October 1941 to March 1952, bonds due or rities appear in the market.

3-Month Treasury Bills

101

High-Grade Municipal Bonds

Corporate Aaa and Baa Bonds

This series, compiled by Standard & Poor's Corporation, is an arithmetic average of the yield to maturity of 15 high-grade domestic municipal bonds,
each with approximately 20 years to maturity. The
issues are selected on the basis of quality, trading
activity, and geographic representation. The yields
are based on Wednesday's closing prices, and the
monthly figures are averages of the four or five
weekly figures for the month. Prior to 1929 the
monthly figures were based on an average of the high
and low prices for the month. The series is available back to 1929 on a weekly, and 1900 on a monthly basis.
The series is published weekly in Standard & Poor's
Outlook and Bond Outlook. Monthly and annual
average figures back to 1900 and a description of the
series and list of the issues used appear in the 1960
edition of Standard & Poor's Security Price Index
Record.

These series measure the currently prevailing
maturity yields on long-term corporate bonds of the
highest quality and of "lower medium grade," as
reflected in the yields of selected bonds rated Aaa
and Baa by Moody's Investors Service. The series
shown here are 2 of a group of similar series computed by Moody's, covering bonds classified by 4
rating groups (Aaa, Aa, A, Baa) and by 3 industrial groups. The formula for these series was established in 1928 to include for each rating 10 industrial, 10 railroad, and 10 public utility bonds. Since
1935, however, there have not always been 10 suitable bonds for each classification. The Aaa series
currently includes 8 industrials, 7 railroads, and 10
public utilities; and the Baa 10 industrials, 10 railroads, and 10 public utilities.
The series were calculated on a monthly basis
from 1919 through 1931, and have been calculated
daily beginning in 1932. Weekly and monthly fig-

Bond Yields and Interest Rates, 1947-60
{Monthly data.

Percent per annum)

PERCENT
5

CORPORATE AAA BONDS
(MOODY'S)
TAXABLE GOVERNMENT BONDS

PRIME COMMERCIAL
PAPER

1947

1948

1949 1950

1951

1952

1953 1954

1955

1956 1957

1958 1959

SOURCE! MOODY'S INVESTORS SERVICE, BOARD OF SOVERNORS OF THE FEDERAL RESERVE SYSTEM, AND TREASURY DEPARTMENT

102

I960

Bond Yields and Interest Rates
[Percent per annum]
U.S. Government security
yields
Year
3-month
Treasury
bills i

Taxable
bonds 2

1929
1930
1931 _
1932_ _
1933.
1934_

1 402
879
515
. 256

High-grade
municipal
bonds
(Standard
& Poor's)

Corporate bonds
(Moody's)

Baa

Aaa

Prime commercial
paper, 4-6
months

4. 27

4. 73

5.90

5.85

4.
4.
4.
4.
4.

07
01
65
71
03

4. 55
4. 58
5. 01
4. 49
4.00

5.90
7. 62
9. 30
7. 76
6.32

3.
2.
2.
1.
1.

59
64
73
73
02

1935
1936
1937
1938
1939

. 137
. 143
447
. 053
. 023

3. 40
3.07
3. 10
2. 91
2. 76

3. 60
3. 24
3. 26
3. 19
3.01

5. 75
4. 77
5. 03
5.80
4.96

. 75
. 75
.94
. 81
. 59

1940
1941. __ .
1942
1943
1944 _

. 014
. 103
. 326
373
. 375

2. 46
2. 47
2. 48

2. 50
2. 10
2.36
2. 06
1. 86

2. 84
2. 77
2.83
2. 73
2. 72

4. 75
4.33
4. 28
3. 91
3. 61

. 56
. 53
. 66
. 69
. 73

2.
2.
2.
2.
2.

62
53
61
82
66

3. 29
3. 05
3. 24
3. 47
3.42

. 75
.81
1.03
1. 44
1. 49

1945
1946
1947
1948
1949

375
375
. 594
1. 040
1. 102

2.
2.
2.
2.
2.

37
19
25
44
31

1.
1.
2.
2.
2.

1950
1951
1952
1953
1954

1. 218
1. 552
1. 766
1. 931
. 953

2.
2.
2.
2.
2.

32
57
68
94
55

1.98
2. 00
2. 19
2. 72
2.37

2. 62
2. 86
2. 96
3.20
2.90

3. 24
3. 41
3.52
3. 74
3. 51

1. 45
2. 16
2. 33
2.52
1.58

1. 753
2. 658
3. 267
1. 839
3.405

2. 84
3. 08
3.47
3. 43
4.08

2. 53
2. 93
3.60
3. 56
3.95

3. 06
3. 36
3.89
3. 79
4. 38

3. 53
3.88
4. 71
4. 73
5.05

2.
3.
3.
2.
3.

1955
1956
1957
1958
1959

__ .

67
64
01
40
21

18
31
81
46
97

Rate on new issues within period.
Bonds in this classification were first issued in March 1941.
NOTE.—Monthly data available beginning 1931 (scattered issues beginning December 1929) for 3-month Treasury bills; 1941 for taxable bonds; 1900 for high-grade
municipal bonds (Standard & Poor's); 1929 for corporate Aaa and Baa bonds (Moody's); and 1890 for prime commercial paper, 4-6 months.
Sources: Board of Governors of the Federal Reserve System, Treasury Department, Standard & Poor's Corporation, Moody's Investors Service.
2

ures are averages of daily figures; annual figures are
averages of 12 monthly figures.
The daily yield for each selected bond is computed on the basis of closing price, as reported in
dealers' quotations. For each of the rating classifications the 10 (or fewer) individual yields for each
industrial group are averaged, without weighting;
and the corporate index is computed as the unweighted average of the 3 industrial-group averages.
Issues included in each average are selected to
represent typical long-term bonds in each rating

group. Occasional substitutions in the bond list
have been made when ratings have been changed,
when a bond has been called or sells too high above
its call price, or because of approaching maturity.
Suitable adjustments (usually small), which are
gradually amortized, are introduced to prevent such
substitutions from impairing the comparability of
the series.
These series are useful general indicators of the
level and movement of average yields of selected
bonds of the respective grades with sufficiently long
103

maturities and other features to afford adequate
measures of long-term interest rates. They are not
a measure of average yields of all Aaa or all Baa
bonds available to the investor; nor do they reflect
changes in qualitative terms of borrowing such as
call provisions.
The daily corporate bond yield averages are published weekly in Moody's Bond Survey, which includes from time to time the list of bonds. Historical
monthly data and annual averages for these two
series are available back to 1919, and are published
in Moody\ Industrial Manual,

Prime Commercial Paper
This series measures the prevailing rate on prime
4 to 6 months' commercial paper. It is useful as a
measure of the cost of open-market short-term credit

available to large business borrowers of the highest
credit standing.
The prevailing daily selling quotation is determined by the Federal Reserve Bank of New York on
the basis of information obtained through continuing contacts with New York City dealers handling
the bulk of the volume of commercial paper of the
inventory type, and less frequent reports concerning
rates outside New York. Monthly and weekly figures
are averages of daily prevailing rates.
Annual, monthly, and weekly figures for the period
since 1941 are available in the Federal Reserve Bulletin, and the most recent data are shown in the
advance Federal Reserve monthly release, G. 13.
Annual and monthly data, 1890-1941, and weekly
data, 1919-41, may be found in Banking and Monetary Statistics.

STOCK PRICES
Description of series.—These indexes measure average price movement of 300 of the more active common stocks listed on the New York Stock Exchange.
The indexes, as presently constituted, are based upon
the average weekly market prices in the years 19571959. The stocks, classified in Economic Indicators
only by broad categories, are also classified in the
basic releases under 32 selected industry groups.
These groups and the individual stocks in them were
selected on the basis of common stock trading activity on the Exchange in 1959. Each year the entire
common stock list is reviewed and newly active stocks
substituted for the less active issues in the indexes
when appropriate. The selected groups correspond in
general to classifications in the Standard Industrial
Classification. The stocks thus selected from a total
of approximately 1,100 listed common stocks accounted for about two-thirds of the value of common-stock trading activity on the New York Stock
Exchange in 1959.
The prices reflected in the indexes are for the last
sales of the respective stocks during the week as reported in the financial press. Monthly and annual
figures are averages of weekly figures.
Statistical procedures.—The index for each of the
32 industry groups measures the total current market
value of the included issues (i.e., number of shares
outstanding times price) as a percentage of their
average weekly total market value in the years 1957

104

through 1959. (The indexes were formerly related to
a 1939 base year but were revised to the present
1957-1959 base in October 1960.) Each industry is
weighted in the larger aggregates according to the
value of the selected issues, and not necessarily according to the value of all listed issues in the industry.
When the number of outstanding shares of an
issue is changed an adjustment of the index is made
only if such change involves a change in the invested
capital. The base value of the issue is then revised
in the ratio of the new to the old capitalization so that
the index will reflect only price movement.
Uses and limitations.—This is a moderately sensitive weekly index presented in terms of categories
comparable with the Standard Industrial Classification—a feature which facilitates use in conjunction
with other series so presented.
The indexes will not necessarily reflect weekly price
movements of stocks not listed on the New York Stock
Exchange, of the less active stocks so listed, or of
those from industries excluded from the sample because of low volume of trading activity. This selectivity of industries should be borne in mind when
using the indexes for the broader industrial categories
presented in Economic Indicators.
References.—The SEC data are first published in a
release issued each Monday entitled "SEC Indexes of
Weekly Closing Prices of Common Stocks on the New

Stock Prices
[Weekly average: 1957-59-100]
Manufacturing
Year

Composite
index 1

Nondurable goods

Durable
goods

Total

Transportation

Utilities

Trade,
finance and
service

Mining

1939 - _

26. 8

21. 2

22. 3

20. 3

33.8

55.4

29. 3

1940 _
1941 __
1942 __
1943
1944

25.
23.
20.
26.
29.

3
0
1
6
0

19.
18.
16.
21.
22.

8
0
0
0
7

20. 6
18.2
16.4
21. 1
23. 4

19. 1
17.9
15. 7
21. 0
22. 2

33.5
32. 6
30. 7
42. 3
47. 6

55.4
49. 4
38. 7
50. 2
54. 9

26.
24.
20.
29.
34.

5
1
9
6
4

22.
20.
17.
24.
27.

1
8
5
4
3

1945
1946
1947
1948
1949

35.
40.
35.
35.
34.

2
1
1
6
3

27.
31.
28.
29.
28.

4
1
1
1
1

28. 8
30.9
26.8
27. 7
25.9

26. 3
31.4
29. 4
30. 2
29.9

64.2
68.4
50. 4
53. 4
46. 0

62. 6
67. 1
58. 5
55. 0
54.4

43.
59.
47.
46.
47.

8
9
8
0
1

33.
36.
34.
38.
37.

5
7
3
9
9

41.
49.
52.
51.
61.

4
6
3
9
7

35.
43.
46.
46.
57.

2
9
8
7
6

33.
39.
42.
43.
54.

36.
47.
50.
49.
60.

54.
67.
74.
73.
78.

60.
62.
65.
67.
75.

53.
61.
60.
60.
69.

9
0
4
8
1

42.
60.
80.
70.
78.

0
0
7
4
2

81.
92.
89.
93.
116.

8
6
8
2
7

79.
93.
90.
92.
116.

5
2
7
5
5

1950
1951
1952
1953
1954
1955
1956
1957__
1958 __
1959-_-

5
8
1
0
7

78. 7
91. 5
88. 5
90.4
120.8

6
4
7
8
0

80. 1
94. 5
92.8
94. 4
112. 6

1
3
6
9
6

108. 2
110. 6
93. 2
91.0
115. 6

4
4
4
3
3

84. 8
86. 4
86.3
95. 8
117. 6

87. 1
89. 9
82.2
95. 1
122.3

91. 6
104. 6
107.2
97. 9
95.0

i Includes 300 common stocks; 108 for durable goods manufacturing, 85 for nondurable goods manufacturing, 18 for transportation, 34 for utilities, 45 for trade,
finance and service, and 10 for mining. Indexes are for weekly closing prices.
NOTE.—Monthly and weekly data available beginning with 1939.
Source: Securities and Exchange Commission.

York Stock Exchange," showing data for the 2 previous weeks, with percent change. The monthly SEC
Statistical Bulletin shows price and change data for
the 4 or 5 latest weeks. Data back to 1939 on a weekly

and monthly basis are available on request. A release entitled "Computation of SEC Index," which
includes a list of the selected stocks, may be obtained
from SEC.

105

FEDERAL FINANCE
BUDGET RECEIPTS AND EXPENDITURES
Description of series.—Budget receipts and expenditures measure the financial transactions of all
wholly-owned Government funds. Budget receipts
are derived mostly from various kinds of internal
revenue (taxes), but also from customs duties and
from miscellaneous sources such as rents, fines, fees,
sales of products and services, and collections on certain loans and investments. Budget expenditures
primarily include purchases of goods and services
(including capital outlays), transfer payments to
individuals, grants to States, loans, purchases of financial and other existing assets, and Government
contributions as employer to civilian retirement and
social security trust funds. Transactions of trust
funds, representing moneys held in trust by the Government for specific purposes, are excluded from
budget receipts and expenditures.
"Budget receipts" represent the total revenues collected for the general fund accounts and for special
funds whose receipts are earmarked under law for
specific purposes, less (a) refunds of receipts, (b)
transfers to trust fund receipts in those cases where
the law provides an indefinite appropriation to a
trust fund in an amount based on certain tax receipts, and (c) those general or special fund receipts
which are also expenditures of a Government-owned
fund. Budget receipts do not include money obtained from borrowing; nor do they include receipts
of public enterprise revolving funds (such as the
postal fund and most Government corporations) or
of intragovernmental revolving and management
funds, since these funds are included on a net basis
in the expenditure figures.
"Budget expenditures" cover Government-owned
funds; namely, the general fund, the special funds,
the public enterprise funds, and the intragovernmental revolving and management funds. Expenditures for the public enterprise funds and for the
intragovernmental funds are included in the totals
on a net basis—that is, their collections are deducted
from gross expenditures and the net results are the
106

budget expenditures. Certain interf und transactions
(namely, general or special fund receipts which are
also expenditures of a Government-owned fund) are
deducted to avoid double counting. Interest paid to
Treasury by such funds is the major category of this
kind. Payments to the general fund of earnings and
dividends on capital of revolving funds, and the return of such capital to the general fund, are also excluded to avoid double counting. Net budget expenditures do not include retirement of Government
debt, nor do they include investments of Government
enterprises in United States securities.
"Major national security" is a classification of
budget expenditures which is currently used in the
budget document. It comprises: (1) military activities of the Department of Defense including military
functions and the military assistance portion of the
Mutual SecurityxProgram; (2) development and
control of atomic energy; and (3) stockpiling and
defense production expansion.
"Budget surplus or deficit" represents the difference between budget receipts and budget expenditures.
The "public debt" figures shown consist of the outstanding gross borrowings of the United States
Treasury ("gross public debt") and also the guaranteed obligations of other Government agencies
held by other than the Treasury. The budget surplus
or deficit is not the only factor which affects the size
of the public debt, although it is generally the major
factor. The other factors affecting the size of the
debt are: (1) changes in Government cash balances;
(2) the results of trust fund transactions; (3) the
use of Government corporation borrowing directly
from the public as a means of financing the corporation's budget expenditures (or the utilization of their
net receipts to repay such borrowing) ; and (4)
changes in the amount of checks outstanding and
other items in the process of clearing through the
accounts.
/Statistical procedures.—Data on budget receipts

Budget Receipts and Expenditures
[Billions of dollars]

Net budget expenditures
Net budget
receipts

Fiscal year

Major national security 1

Total
Department
of Defense
military 2

Total
0. 7

0. 7

+ 0. 7

16. 9

3
6
7
6
7

.7
.7
.7

. 7
.7
.7
.6

+. 7

-.5
-2. 7
-2.6
-3. 6

16. 2
16.8
19. 5
22.5
27. 7

7
1
0
6
0

6. 5

-2. 8

6. 8
8. 9

. 7
.9
.9
1. 0
1. 1

.9
.9
1. 0
1. 1

-1.2
-3.9

32. 8
38.5
41. 1
42.0
45.9

5. 1
7 1
12 6
22 0
43. 6

9. 1
13. 3
34. 0
79. 4
95. 1

1. 5
6. 0
23. 9
63. 2
76.7

1.5
6. 0
23. 9
63.2
76. 7

-3. 9
-6. 2
-21.5
-57.4
-51.4

44
39.
39.
41.
37.

5
8
8
4
7

98.
60.
39.
33.
39.

4
4
0
0
5

81. 2
43. 2
14. 4
11.8
12.9

81. 2
43.2
14.2
11.2
12. 0

-53. 9
-20. 7

36.
47.
61.
64.
64

4
5
3
7
4

39.
44.
65.
74.
67.

5
0
3
1
5

13. 0
22. 4
44. 0
50.4
46. 9

12.0
20.8
41.3
47. 6
44. 0

-3. 1

60.
67.
70.
68.
67.

2
8
6
5
9

64.
66.
69.
71.
80.

4
2
0
4
3

40. 6
40. 6
43.3
44. 1
46. 4

37.8

76. 6

45.6

42.8

1929

3. 9

3. 1

1930
1931
1932 __
1933
1934

4.
3.
1
2
3.

1
1
9
0
1

3.
3.
4.
4.
6.

1935 __
1936
1937. _ .
1938
1939

3
4
5
5
5.

1940
1941
1942
1943
1944

1945
1946 . _
1947. __
19484
1949. .__ _
1950
1951
1952 __
1953
1954

._ _
_._ __

_ _

1955. _
1956 _
1957
1958____
1959
I960 5

Budget
Public debt
(end of
surplus ( + )
or deficit (—)
period) 3

77. 7

8. 5
7. 8

.6
.5

38.4
40.8
41.2
43. 6

-4. 4

-2.8

+ .8
+ 8.4
-1.8

+ 3.5

-4.0
-9.4
-3. 1
-4.2

48. 5
55. 3
77.0
140.8
202.6
259. 1
269.9
258.4
252.4
252.8
257.4
255.3
259.2
266. 1
271.3

+ 1. 6
+ 1. 6

274.4
272. 8
270.6
276.4
284.8

+ 1. 1

286.5

-2.8
-12.4

1 Includes military functions of Department of Defense, military assistance portion of the Mutual Security Program, Atomic Energy Commission, stockpiling
and defense production expansion. For 1942-46, also includes Coast Guard.
23 Military functions and military assistance.
Includes guaranteed securities held outside the Treasury. Not all of total shown is subject to statutory debt limitation.
*5 Starting in 1948, total budget receipts and expenditures have been adjusted to exclude certain intragovernmental transactions.
Preliminary.
NOTE.—Detail will not necessarily add to totals due to rounding.
Sources: Treasury Department and Bureau of the Budget.

and expenditures for actual past periods are derived
for the most part from accounting records rather
than statistical estimating procedures. Budget receipts and expenditures are published each month by
the Treasury Department in the Monthly Statement
of Receipts and Expenditures of the United States
Government.

Under a reporting procedure instituted in February 1954 (which also covers comparative data for
part of fiscal 1953), budget expenditures are reported
on the basis of checks issued by Government disbursing officers. Modifications in this basis are made
as follows: (a) where payment is made in cash instead of by check, the cash payment is an expendi-

107

ture; (b) where payment is made by the issuance of
bonds or by an increase in their redemption value,
instead of by the issuance of checks, such an issuance
or increase is an expenditure; and (c) since June
1955, interest on the public debt has been reported
on an accrual basis. Internal revenue and customs
receipts are stated on the basis of collections reported
by collecting officers. Other receipts are reported on
the basis of confirmed deposits.
Data for fiscal 1952 and earlier were reported on
a different basis under which receipt and expenditure totals were derived from a variety of sources
but primarily from daily telegraphic reports from
Federal Reserve Banks reporting deposits and withdrawals clearing through the accounts of the Treasurer of the United States.
The public debt is compiled daily from records of
the United States Treasury and is published in the
Daily Statement of the United States Treasury (with
details at the end of each month) as well as in the
Monthly Statement.
Relation to other series.—Budget receipts and expenditures are one of the five major series dealing
with Federal Government income and outgo. The
others are:
1. Federal Government receipts from and payments to the public.
2. Cash deposits in and withdrawals from the
Account of the Treasurer of the United States.
3. Federal receipts and expenditures in the
national income accounts.
4. Federal revenue and expenditures as reported by the Bureau of the Census.
The differences among these various measures are
mainly ones of coverage and timing. Significant
specific differences are:
COVERAGE

1. All four of the other measures are more comprehensive than budget receipts and expenditures,
since they encompass, in addition to budget amounts,
the very sizable transactions of the trust funds administered by the Federal Government (after eliminating transactions between the budget and trust
funds).
2. Transactions of four so-called Governmentsponsored enterprises not included in the budget are
included (on a net basis) in Federal Government
payments to the public and (to the extent such transactions affect the Treasurer's cash position) in cash
withdrawals.

108

3. Cash withdrawals, payments to the public, and
Federal expenditure as reported by the Census include actual disbursements for interest rather than
interest accruals.
4. Federal receipts and expenditures in the national income accounts and Federal revenue and expenditure as reported by Census exclude loans, loan
repayments, and related financial investments from
both receipts and expenditures.
5. Federal expenditures in the national income
accounts exclude purchases of existing physical
assets.
6. Census figures record transactions of some public enterprises such as the Post Office on a gross rather
than a net basis—that is, enterprise receipts are
counted in the total of Government revenue rather
than as offsets on the expenditure side.
TIMING

7. Federal receipts in the national income accounts
record tax revenues mainly on an accrual rather
than a cash basis.
8. Payments to the public and Treasury cash withdrawals are recorded on a checks paid basis, rather
than checks issued.
9. That portion of Federal expenditures in the national income accounts which consists of purchases of
goods and services is reported, to the maximum extent feasible, on the basis of time of delivery rather
than time of payment.
Uses and limitations.—The main use for data on
budget receipts and expenditures and the main reason for interest in these data as a time series is as an
indicator of executive and legislative budget and tax
policy. Budget receipts and expenditures figure prominently in the annual budget process, involving the
projection of fund requirements by Government
agencies, preparation of an integrated executive
budget including estimates under both existing law
and proposed changes in laws and programs, congressional review and enactment of annual appropriation bills, and agency financial management, and
also in the periodic consideration of tax legislation.
Moreover, the relationship between^ the totals of
budget receipts and budget expenditures usually
serves as the major determinant of increases or decreases in the public debt. Finally, since this series is
prepared in detail based on the Government's financial accounts, it is a basic source of data for various
other series on Federal financial transactions which
are more important for economic analysis.

For purposes of appraising the effect of Federal
financial transactions on the economy, however, this
series has important limitations. For example, business activity may be influenced by Government financial operations long before such operations are reflected in the figures on budget expenditures or receipts ; some of the economic impact is reflected at the
stage when contracts for goods and services are let,
i.e., when obligations are incurred, or when tax liabilities are changed by a new tax measure. Moreover,
Federal guaranties and insurance of private loans
also influence the economy, although they have a relatively minor effect on budget receipts or expenditures.
In addition, the operations of the trust funds and
Government-sponsored enterprises play an important role in the economy which is not reflected in the
budget figures.
References.—The basic release of the budget re-

ceipts and expenditures data is made in the Monthly
Statement of Receipts and Expenditures of the
United States Government issued by the Treasury
Department. A description of the basis for this
statement is summarized in current issues of the
Treasury Bulletin, page II. Annual data are available in the Budgets of the United States Government issued by the Bureau of the Budget, and are
also reported in the Combined Statement of Receipts,
Expenditures, and Balances of the United States
Government, issued by the Treasury Department.
Data beginning with 1789 are published in the
Annual Report of the Secretary of the Treasury on
the State of the Finances. For further detail on
the relation of Federal Government receipts and
expenditures in the national income accounts to the
Budget, see table 111-10 in the U.S. Income and
Output.

CASH RECEIPTS FROM AND PAYMENTS TO THE PUBLIC
Description of series.—This series presents information on the flow of money between the public and
the Federal Government as a whole, representing in
effect a consolidated cash statement of Federal transactions—other than borrowing—with the public.
The public is defined to include individuals, banks,
other private corporations and associations, unincorporated businesses, the Federal Reserve System,
the Postal Savings System, State and local governments, foreign governments, and international organizations.
Federal cash receipts from and payments to the
public include the transactions of trust and deposit
funds (which are not owned by the Federal Government) as well as the Federal funds included in budget
receipts and expenditures. They also include certain
transactions of Government-sponsored enterprises
which are not considered a part of the Government
in the conventional budget data—i.e., the Federal
Deposit Insurance Corporation, Federal land banks,
Federal home loan banks, banks for cooperatives, and
(after January 1, 1959) the Federal intermediate
credit banks. Major intragovernmental and noncash transactions are excluded in the consolidation
of Federal financial transactions.
The excess of Federal cash receipts or payments
is sometimes referred to as the cash surplus or
deficit.
Statistical procedures.—Annual totals and unad-

justed monthly and quarterly cash receipts and payments to the public are taken from accounting
records rather than statistical estimates. These series
are based on data published in the Daily Statement
of the United States Treasury and the Monthly Statement of Receipts and Expenditures of the United
States Government.
To derive the figures on Federal cash receipts
from and payments to the public, several adjustments
are made to budget receipts and expenditures. The
following items are added: (1) transactions of
trust and deposit funds; (2) net expenditures of
Government-sponsored enterprises as measured by
the sales and redemptions of their own obligations
and of the United States securities held by them;
and (3) changes in the clearing accounts of the
United States Treasurer to adjust for checks outstanding and other items. The following items are
eliminated: (1) intragovernmental transactions,
such as interest paid on securities held by trust funds
(which is both a budget expenditure and a trust receipt) ; (2) noncash expenditures in the form of
debt issuances or other increases in the public debt
which represent obligations of the Government to
make cash payments in the future— eliminated in the
year of the debt increase but added to expenditures
in subsequent years as actual cash payments are made
(for example, the semiannual increase in the redemption value of Series E savings bonds, which is
109

Cash Receipts from and Payments to the Public
[Billions of dollars]
Year

Fiscal year:
1929

Cash receipts
from the
public

Cash payments to
the public

Excess of
receipts ( + ) or
payments ( — )

3.8

2.9

+ 0. 8

4.0
3. 2
2.0
2. 1
3. 1

3. 1
4. 1
4.8
4. 7
6.4

— 10
-2. 7
-2. 6
3. 3

3.8
4.2
5. 6
7.0
6. 6

6. 3
7. 6
8.4
7.2
9.4

-2.4
-3.5
-2.8
-. 1
-2.9

6. 9
9.2
15. 1
25. 1
47.8

9. 6
14.0
34. 5
78.9
94.0

-2. 7
-4.8
-19. 4
-53. 8
-46. 1

50.2
43.5
43.5
45.4
41. 6

95.2
61. 7
36.9
36.5
40. 6

-45. 0
-18.2
+ 6.6
+ 8.9
+ 1.0

40.9
53. 4
68.0
71.5
71. 6

43. 1
45. 8
68.0
76. 8
71.9

-2.2
+ 7.6

1955
1956
1957
1958
1959 3
I960

67. 8
77. 1
82. 1
81.9
81. 7
95. 0

70. 5
72. 6
80. 0
83.4
94. 8
94. 3

-2. 7
+ 4.5
+ 2. 1
-1. 5
-13. 1

Calendar 4year:
1943
1944

37. 9
48. 1

89. 0
94. 8

-51. 1
-46. 7

1945
1946
1947
1948
1949

49.
41.
44.
44.
41.

4
4
3
9
3

86. 1
41. 4
38. 6
36.9
42. 6

1950
1951
1952
1953
1954

42.
59.
71.
70.
68.

4
3
3
2
6

42. 0
58.0
72. 0
77. 4
69. 7

+ 1.2
-. 6
-7. 2
-1. 1

1955
1956
1957
1958
1959

71.
80.
84.
81.
87.

4
3
5
7
6

72.2
74. 8
83.3
89.0
95.6

-. 7
+ 5. 5
+ 1.2
-7. 3
-8. 0

1930
1931
1932
1933
1934

_
__

1935
1936
1937
1938
1939
1940
1941
1942
1943
1944 i
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954

__
__. _

+ .9

-5. 3
.2

+ .7

-36. 7
(2)

+ 5. 7
+ 8.0
-1. 3

+. 5

1
Data for fiscal years prior to 1944 are not exactly comparable with those for later years in that only major intra?overnmental transactions have been eliminated
in the earlier years.
23 $50 million or less.
Preliminary.
4
First calendar year for which data are available.
NOTE.—Detail will not necessarily add to totals because of rounding.
Sources: Treasury Department and Bureau of the Budget.

a part of budget expenditures, is deducted, while interest actually paid to the public on savings bonds
redeemed during the year is added) ; and (3) receipts
of the Government from exercise of the monetary authority (currently consisting mostly of seigniorage
on silver).
Historical data have been adjusted wherever possible for conceptual and statistical revisions of this
series made in 1947 and for a few changes made since
then to reflect similar changes in the concept of
budget receipts and expenditures, such as the change
in reporting of tax refunds as offsets to receipts
rather than as expenditures. Data beginning with
fiscal year 1953 and calendar year 1954 are on the
reporting basis instituted in February 1954 and discussed on page — in connection with budget receipts
and expenditures.
Seasonally adjusted data published in Economic
Indicators have been seasonally adjusted by applying a variant of the Census Bureau's Univac I I
method to the two totals—cash receipts and cash payments. (See p. 64.) Experimental work is currently
underway to seasonally adjust major individual receipt and expenditure components separately, the aggregates of seasonally adjusted components giving
the seasonally adjusted totals.
Relation to other series.—The major differences
between "cash receipts and payments" and "budget
receipts and expenditures'' were enumerated above
under "Statistical procedures." This series, on the
other hand, is very similar in general concept to the
series on Treasury cash deposits and withdrawals
published in the Daily Statement of the United
States Treasury. The following are the significant
differences between the two: (1) receipts from the
exercise of monetary authority (mainly seigniorage
on coinage) are excluded from the cash receipts series since they do not represent "cash received from
the public," but are included in "Treasury cash deposits;" and (2) receipts from and payments to
include cash transactions from accounts which some
Government, agencies maintain directly with commercial banks as well as from the regular accounts
of the United States Treasurer, while Treasury cash
deposits and withdrawals record only the latter.
Both series and the reconciliation between the two
are published monthly in the Treasury Bulletin.
Principal differences between the cash receipts and
payments series and the other major series dealing

with overall Federal Government transactions are
as follows:
1. Federal Government receipts and expenditures
in the national income accounts as reported by the
Office of Business Economics, Department of Commerce, and Federal revenue and expenditure as reported by the Census exclude loans, loan repayments,
mortgage purchases, and similar financial investments.
2. That part of Federal expenditures in the national income accounts consisting of purchases of
goods and services is recorded to the maximum
extent possible on the basis of time of delivery rather
than time of payment.
3. Federal Government employer and employee
contributions to employee retirement funds are considered intragovernmental transactions and are deducted from both receipts and payments in arriving
at the consolidated cash totals, whereas in the national
income accounts, payments of both employers and
employees are counted both as receipts ("contributions for social insurance") and expenditures ("purchases of goods and services—compensation of employees"). In Federal revenue and expenditure as
recorded by the Census, the Federal Government's
contribution as employer is deducted as an intragovernmental transaction, but not employee contributions.
4. Enterprise transactions such as the Post Office
are recorded gross in the Census tabulation of Federal revenue and expenditure but net in Federal cash
receipts from and payments to the public.
Uses and limitations.—For purposes of economic
analysis, the series on receipts from and payments to
the public is a more complete measure of the impact
of Federal financial transactions on the economy than
the series on budget receipts and expenditures. However, any series on overall Government transactions
is necessarily an aggregation of many different kinds
of transactions with widely varying economic effects.
Government purchases of goods and services can
hardly be expected to have the same impact as an
equivalent sum expended for loans. Equivalent sums
collected from income taxes and estate taxes may also
be expected to vary in effect. In brief, details as well
as totals must be considered in making any economic
analysis. Further, it should be recognized that not
only cashflows,but also many other Federal financial
activities have important economic effects. For ex-

111

nual Midyear Review of the budget, prepared by the
Bureau of the Budget each summer or fall. The
closely related series on Treasury cash deposits and
withdrawals is published in the Daily Statement of
the United States Treasury, and monthly in the
Treasury Bulletin.
Adjustments made in data on budget receipts and
expenditures to arrive at Federal cash receipts from
and payments to the public on a monthly basis are
summarized in the Treasury Bulletin. The adjustments made in the annual figures are listed in detail
in a release of the Bureau of the Budget entitled
"Federal Government Receipts From and Payments
to the Public, Supporting Tables." This release is
issued in conjunction with the annual publication
of the Budget of the United States Government and
the Midyear Review. A summary reconciliation of
the differences between this series and the Treasury
cash deposits and withdrawals series is published
monthly in the Treasury Bulletin and annually in the
Budget of the United States Government. Further
details on the relation of Federal Government receipts and expenditures in the national income
accounts to cash receipts and expenditures are given
in table 111-10 in U.S. Income and Output.

ample, an expansion in new appropriations and in
Government orders can stimulate business activity before the authorized funds are paid to the public.
Likewise, the enactment of a tax measure may affect
business activity before the cash flows involved between the Federal Government and the public take
place. Federal guaranties and insurance of private
loans also influence the economy even though they
normally have little or no immediate impact on Federal receipts from and payments to the public. Aside
from the significance of interest payments to the
public, the management of the public debt is also a
factor which has particular impact in the money and
credit markets of the economy.
References,—Unadjusted monthly data on Federal
cash receipts from and payments to the public appear
in the Treasury Bulletin, and quarterly data in Economic Indicators. Seasonally adjusted quarterly
data also appear in Economic Indicators. Annual
data by fiscal years back to 1929 are published in the
Statistical Abstract. Starting with the 1944 budget
each year the Budget of the United States Government has also presented data for the most recent fiscal
year and estimates for the current and following fiscal
years. The data have also been included in the an-

112

Full text of Supplement to Economic Indicators : 1960

FRASER