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88th Congress, 2d Session

1964

SUPPLEMENT TO

Economic Indicators
HISTORICAL AND DESCRIPTIVE
BACKGROUND

Prepared for the Subcommittee on Economic Statistics of 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]

88th Congress, 2d Session

1964

SUPPLEMENT TO

Economic Indicators
HISTORICAL AND DESCRIPTIVE
BACKGROUND

Prepared for the Subcommittee on Economic Statistics of 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

U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1964
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington D.C., 20402 • Price 65 cents

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

HOUSE OF REPRESENTATIVES

JOHN SPARKMAN (Alabama)
J. W. FULBRIGHT (Arkansas)
WILLIAM PROXMIRE (Wisconsin)
CLAIBORNE PELL (Rhode Island)
JACOB K. JAVITS (New York)
JACK MILLER (Iowa)
LEN B. JORDAN (Idaho)

WRIGHT PATMAN (Texas)
HALE BOGGS (Louisiana)
HENRY S. REUSS (Wisconsin)
MARTHA W. GRIFFITHS (Michigan)
THOMAS B. CURTIS (Missouri)
CLARENCE E. KILBURN (New York)
WILLIAM B. WIDNALL (New Jersey)
JAMES W. KNOWLES, Executive Director
MARIAN T. TRACY, Financial Clerk
HAMILTON D. GEWEHR, Administrative Clerk

ECONOMISTS
WILLIAM H. MOORE

THOMAS H. BOGGS, Jr.

GERALD A. POLLACK

ALAN P. MURRAY

DONALD A. WEBSTER (Minority)

Subcommittee on Economic Statistics
PAUL H. DOUGLAS, Illinois
J. W. FULBRIGHT, Arkansas
JACK MILLER, Iowa

WILLIAM PROXMIRE, Wisconsin, Chairman
RICHARD BOLLING, Missouri
THOMAS B. CURTIS, Missouri

Suggested Identification
U.S. Congress, Joint Economic Committee,
7964 Supplement to Economic Indicators,

Government Printing Office, Washington, D.C., 20260

LETTERS OF TRANSMITTAL
DECEMBER 28,

1964.

To Members oj the Joint Economic Committee:
For information of the members of the Joint Economic Committee and others interested there is transmitted herewith a sixth edition of the Supplement to the Committee's monthly publication Economic Indicators, containing selected charts and historical tables of the indicator series which are published monthly,
along with 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.
There has been continuing widespread interest in having this information 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 9,200 private subscribers, but
has also become an important teaching aid in college courses in statistics.
PAUL H. DOUGLAS,

Chairman, Joint Economic Committee.
DECEMBER 21,

1964.

The Honorable PAUL H. DOUGLAS,
Chairman, Joint Economic Committee,
U.S. Senate, Washington, D.C.
DEAR MR. CHAIRMAN: Transmitted herewith is the 1961+ Supplement to the Committee's monthly
publication Economic Indicators prepared in response to the Committee's instructions to the Subcommittee
on Economic Statistics.
A brief explanation of the purpose and content of the Supplement is presented in the Foreword. It might
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
distribution of approximately 10,000. Economic Indicators is available at 25 cents a single copy or by
subscription at $2.50 per year (foreign, $3.50), from the Superintendent of Documents, Government Printing
Office, Washington, D.C, 20402. The domestic airmail subscription price is $5.40 per year.
Over the years the Joint Committee has welcomed comments directed toward making Economic Indicators and the Supplement more useful publications. Comments were solicited during a special review of the
monthly Indicators this year and many suggestions were received and considered. Beginning with the
November issue of Economic Indicators, a few changes were made which this 1964 Supplement reflects. Of
necessity, materials included have to be limited to those series most widely used by Members of Congress,

iii

executive Government agencies, and others. The Committee policy has been to publish these data without
interpreting them. Interpretations of the data often appear in other publications of the Committee and
Executive agencies.
The development and supervisory work on the first issue of the Supplement 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 1964 Supplement was prepared under the direction of Raymond
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.
I wish to express the appreciation of the Subcommittee to the Council of Economic Advisers, the Bureau
of the Budget, and other Government agencies and their staffs who have cooperated so ably and wholeheartedly with the Subcommittee over the years in the development of both Economic Indicators and this
Supplement. Their cooperation has been a source of great satisfaction to each Member of the Committee.
The monthly Economic Indicators and the biennial Supplement continue to give outstanding testimony to the
benefits of this interagency collaboration.
Sincerely,
WILLIAM PROXMIRE,

Chairman, Subcommittee on Economic Statistics.

Foreword
This is the sixth 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
tables showing these data are numbered to correspond to the pages in the monthly publication. 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 Ecomomic 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, in September 1957, in December 1960, and again in December 1962. In the November 1964 issue of the Economic
Indicators, a few changes were made. This issue of the Supplement reflects these changes. Both text and
tables are brought up to date. 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 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, prepared by the Bureau of the Budget and available from the Superintendent of Documents,
Government Printing Office for $1 a copy.

Gross National Product or Expenditure in 1963 Prices, 1929-63
(Annual data.

Gross private investment includes net exports of goods and services)

BILLIONS OF DOLLARS
600

500

400

300

200

1929

1932

1935

1941

1938

1944

1947

1950

1953

1956

1959

1962

SOURCE OF DATA: DEPARTMENT OF COMMERCE

Growth of the Labor Force, 1929-63
(Annual data)

MILLIONS OF PERSONS
80

TOTAL LABOR FORCE

CIVILIAN LABOR FORCE
CIVILIAN EMPLOYMENT

f PlAGJCULTUplMPUlYMENT]
30

AGRICULTURAL EMPLOYMENT
W/M//WW//M//MM/MM
1929

1932

1935

SOURCE OF DATA: DEPARTMENT OF LABOR

1938

1959

1962

Contents
TOTAL OUTPUT, INCOME, AND SPENDING
1. The Nation's Income, Expenditure, and Saving
2. Gross National Product or Expenditure
._
3. National Income
4. Sources of Personal Income__
5. Disposition of Personal Income
-6. Farm Income
7. Corporate Profits
8. Gross Private Domestic Investment
9. Expenditures for New Plant and Equipment
EMPLOYMENT, UNEMPLOYMENT, AND WAGES
10. Status of the Labor Force
11. Selected Measures of Unemployment and Part-Time Employment
12. Unemployment Insurance Programs
13. Nonagricultural Employment
14. Weekly Hours of Work-—Selected Industries
15. Average Hourly and Weekly Earnings-—Selected Industries
PRODUCTION AND BUSINESS ACTIVITY
16 and 17. Industrial Production and Production of Selected Manufactures
18. Weekly Indicators of Production
19. New Construction
20. New Housing Starts and Applications for Financing
21. Business Sales and Inventories—Total and Trade
22. Manufacturers' Shipments, Inventories, and New Orders
23. Merchandise Exports and Imports
24 and 25. U.S. Balance of International Payments
PRICES
26. Consumer Prices
27. Wholesale Prices
28. Prices Received and Paid by Farmers
MONEY, CREDIT, AND SECURITY MARKETS
29. Money Supply
30. Selected Liquid Assets Held by the Public
31. Bank Loans, Investments, Debits, and Reserves
32. Consumer and Real Estate Credit
33. Bond Yields and Interest Rates
34. Common Stock Prices, Yields, and Earnings
FEDERAL FINANCE
35. Federal Administrative Budget Receipts and Expenditures
36. Federal Cash Receipts from and Payments to the Public
37. Federal Budget, National Income Accounts Basis

1
5
9
12
14
16
20
23
27
31
36
38
42
47
49
52
58
61
66
72
76
80
84
90
93
97
103
105
107
111
115
118
120
123
126

vii

List of Charts
Page

Gross National Product or Expenditure in 1963 Prices, 1929-1963
Growth of the Labor Force, 1929-1963
Gross National Product or Expenditure, 1947-1964
National Income, 1947-1964
Per Capita Disposable Income, 1947-1964
Farm Income, 1947-1964
Corporate Profits, 1947-1964
Gross Private Domestic Investment, 1947-1964
Expenditures for New Plant and Equipment, 1947-1964
Status of the Labor Force, 1947-1964,

vi
vi
5
10
14
17
21
24
27
31

Rates of Insured Unemployment under State Programs, U.S., 1949-1964
Employees in Nonagricultural Establishments, 1947-1964
Average Weekly Hours in Selected Industries, 1947-64.
Average Hourly Earnings in Selected Industries, 1947-1964
Industrial Production, 1947-1964

40
43
47
49
53

New Construction, 1947-1964
Nonfarm Private Housing Starts, 1947-1964
Retail Sales and Inventories, 1948-1964
Manufacturers' Shipments, Inventories and New Orders, 1947-1964
Merchandise Exports and Imports, 1947-1964

62
67
75
77
80

U.S. Exports and Imports of Goods and Services, 1947-1964
U.S. Balance of International Payments, 1950-1964
Consumer Prices, 1947-1964
Wholesale Prices, 1947-1964
Prices Received and Paid by Farmers, 1947-1964

84
86
90
94
99

Loans and Investments at All Commercial Banks, 1948-1964 _.
Consumer Credit Outstanding, 1947-1964
Bond Yields and Interest Rates, 1947-1964
Cash Receipts From and Payments to the Public, 1947-1964
Federal Expenditures, National Income Ace ounts Basis, 1947-1964
Federal Receipts, National Income Accounts Basis, 1947-1964

VUl

108
112
115
124
127
128

TOTAL OUTPUT, INCOME, AND SPENDING
1. 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
the following sectors: persons, business, international,
and government. The accounts shown here represent a statement of the national economy in terms of
receipts and expenditures for these four categories.
The combined receipts (disposable personal income,
gross retained earnings of business, and government
receipts) equal the combined expenditures (personal
consumption expenditures, gross private domestic
investment, net exports, 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. Important expenditure components in terms of 1963 prices are
shown in the first chart in this volume.
The balancing of the combined receipts and
expenditures reported for the four categories—persons, business, international, government—is conceptually exact. However, since the estimating
procedure involves independent data sources for
receipts and expenditures it does not produce the
identity which is conceptually present. This requires
a balancing "error" item or statistical discrepancy.
In the accompanying table, the total of personal and
business receipts, 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. It should be noted that although personal
income includes the income of unincorporated
businesses and farms, consumer expenditure includes
only expenditures for consumption purposes. Investments of noncorporate as well as corporate
businesses are included in the business 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 are added to net receipts since investment
is on a gross basis. Business investment includes
additions to plant, equipment, and inventories of
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 business investment is the only investment item shown as such in
this table.
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
basis, to be consistent with the receipts and expenditures of consumers and business and with the gross
national product total. The government receipts

TABLE

1.—The Nation7s Income, Expenditure, and Saving
[Billions of dollars]

Persons

Year

International

Business

Dispos- Personal Personal
able
conGross
saving
persumpretained
or
sonal
tion
earndisinexings 2
savx
come
pendi- ing ( - )
tures

Gross
private
domestic
investment 3

Excess
of investment

and
Foreign Net exports of goods
services 4
net
transfers by
Net
Govexports Exports Imports
ernment

Excess of
transfers
or of net
exports
( ) 5

1929.

83. 1

79. 0

4. 2

11. 5

16. 2

-4. 7

0. 8

7. 0

6. 3

1930_
1931.
193219331934_

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

19351936.
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

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

-0. 8
-.
-.
-.
-.
-.

7
2
2
2
4

1940_
1941.
1942.
1943.
1944.

76.
93.
117.
133.
146.

1
0
5
5
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

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
8.0
11. 0
10. 2

1.4
-4. 6
-8. 9
-1. 9
-. 5

195019511952.
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

19551956.
1957.
19581959.

274.4
292. 9
308. 8
317.9
337. 1

256.9
269. 9
285.2
293. 2
313.5

17.5
23.0
23.6
24.7
23. 6

42. 1
43. 0
45. 6
44. 8
51. 3

63.8
67.4
66. 1
56.6
72. 7

-21.8
-24.3
-20.5
-11.9
-21.4

1.5
1. 5
1.5
1.3
1.5

1. 1
2.9
4. 9
1.2

19. 4
23. 1
26.2
22. 7
22. 9

18.3
20.2
21.3
21.5
23.6

.4
-1. 5
-3.5
.1
2. 3

1960_

349. 9
364. 7
384.6
402. 5
431.8

328. 2
337.3
356. 8
375.0
399.3

21. 7
27. 3
27.8
27. 5
32. 5

50. 7
51.2
57.5
59. 1
65.0

71. 8
68.8
79. 1
82.0
87.7

-21. 1
-17. 6
— 21. 7
-22.9
-22.6

1. 6
1.6
1. 6
1. 6
1.8

3.0
4. 6
4. 0
4.4
7.0

26. 3
27. 6
29. 2
30.7
35.2

23. 3
23.0
25.2
26.3
28.2

— 1. 4
-3. 0
-2.4
-2.8
-5.3

1962__
1963__
1964 7_

See footnotes next page.

include personal, corporate and indirect business
taxes and nontaxes, 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

TABLE

1.—The Nation's Income, Expenditure, and Saving—Continued
[Billions of dollars]
Government
Net receipts

Year

Surplus

Expenditures

Tax and TransPurTransNet
nontax
fers,
chases
Total
fers,
receipts receipts interest, of goods expendi- interest,
or
and
and subtures and subaccruals sidies 6 services
sidies 6
1929_

9. 5

11.3

1930.
1931_
1932.
1933_
1934_

8.9
6.4
6.4
6.7
7.4

1935.
1936_
1937_
1938-.
1939_.

8.0
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
4.3
4.8

1945.
1946-.
1947 _
19481949_

43. 1
34.6
41. 6
42.8
37.0

1950_
1951.
1952.
1953_.
1954_

1.7

8.5

10.2

10. 8

1.8

9.5
8.9
9.3

3. 1

9.2
9.2

2.5
2.6

8. 1

10.5

3. 1

8.0
9.8

11.0
12.3
10.6
10.7
12.8

10.0
11.8
11.7
12. 8
13.3

13.3
15.9
14.8
16. 6
17.5
18. 5
28.8
64.0
93. 4
103. 1

4.4
4.0
4.3
4.8

6. 5

14. 1
24.8
59.7
88.6
96.5

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

47.2
66.6
72. 2
75.7
68. 5

69.3
85. 4
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

1955.
1956-.
1957_
1958_
1959.

78. 4
84.2
87. 5
82.0
95.7

101.4
109.5
116.3
115. 1
130.2

23. 0
25.3
28. 7
33. 1
34.4

I960..
1961_.
1962_.
1963.7
1964

103.5
103. 8
114.4
123. 4
125.7

140.6
145.6
157. 8
168.9
173.3

37. 1
41. 8
43.4
45.4
47.6

3.4

4. 1
3. 1
3.8
4.2

1.7

deficit
(-)on
income

1.0
-.3

-2.8
-1.7
-1. 4
-2.4

104.2

0.3

92. 1
75.4
57.7
55.0
64.2

-1.0

-1.6
-2. 1

72.7
81.6
91.0
84.8
89.9

-.7
-3.8
-31. 4
-44.2
-51.9

99.8
125. 4
160. 0
194 2
208. 6

10. 1
16. 5
15.4
16. 5
19.4

-39.7
4. 1
13.3

209. 1
208. 6
230.7
260.3
257. 5

61. 1
79.4
94.4
102.0
96. 7

22. 1
18.9
18.4
19. 2
21.5

8.2

75. 6
79.0
86.5
93.5
97.2

98. 6
104.3
115. 3
126.6
131. 6

23. 0
25.3
28. 7
33. 1
34. 4

99. 6
108. 0
116.3
122. 6
128.6

136. 7
149. 8
159. 8
168.0
176.2

37. 1
41. 8
43.4
45. 4
47.6

3.4

4. 1
3. 1
3.8

4. 2

6. 5

Gross
national
product or
expenditure

and

1.8

3. 1

Statistical
or
discrepreceipts
ancy

product
account

3. 1

2.5
2.6

Total
income

-2.0
-3.0

8.2

-3. 1
6. 1
-3.9
-7. 1
-6. 7
2.9
5.2

1. 0
-11.4
-1. 5
3.9

-4.2
-1.9

-2.9

.8
.8
.9

.7
2
1.' 1
-. 2
.5
1.2
.8

.4
o

-L7
2.8
4.5

2. 1
3.5
-.8

.5
>j

104.4
91. 1
76.3
58. 5
56.0
65. 0
72. 5
82. 7
90.8
85.2
91. 1
100.6
125. 8
159. 1
192.5
211. 4
213. 6
210. 7
234.3
259.4
258. 1

285.3
327.7
345. 6
364. 1
362.3

1.3
.9

1. 4

284.6
329.0
347.0
365. 4
363. 1

396. 5
421.6
443. 4
446.0
485. 7

1. 0
-2.4
-. 6
-1.5
-3.0

397. 5
419.2
442. 8
444. 5
482.7

505. 6
521.2
558.0
586.7
624.4

-3.0
-2.6
-1.8
-2.7
-1.7

502.6
518. 7
556.2
583.9
622.3

1 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.
Private business investment, purchases of capital goods by private nonprofit institutions, and residential housing.
For 1929^45, net exports of goods and services and net foreign investment have been equated.
Net foreign investment with sign changed.
« Government transfer payments to persons, foreign net transfers by Government, net interest paid by Government, and subsidies less current surplus of Government7 enterprises.
Preliminary.
2
3
4
5

NOTE.—Data for Hawaii and Alaska introduced in 1960.
Source: Department of Commerce.

profits, are recorded on an accrual rather than a collections basis, and government expenditures for goods
are corrected for the lag between deliveries and payments therefor. Capital transactions, such as re-

ceipts 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 in-

eluded in both the cash and conventional budgets.
USES AND LIMITATIONS

A set of economic accounts for the Nation reduces
the voluminous detail of economic 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 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 inflationary and deflationary programs of government and private
economic groups.
(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 for 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 changss 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.
See also Technical Notes on the Nation's Economic
Budget, Appendix A: Report of the Joint Committee
on the Economic Report 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.

2. 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 export of goods and services, and (4) government purchases of goods and services. The total
and its major components are charted below for the
period 1947-64. 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 imputed rental value of owner-occupied
dwellings.
The GNP series measures the product attributable
to the factors of production—labor and property—
supplied by residents of the Nation. 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.
The national income and product estimates beginning 1960 are defined to include Alaska and
Hawaii; those for prior years do not. This does
not significantly affect the comparability of the data
for most purposes. The gross product of the two
new States amounted to roughly $2% billion in 1960
(their income originating to $2)i billion and personal
income to $2 billion). But about one-half billion
dollars of these aggregates was already included in
the previous figures for the continental United
States since the series were defined to include contributions of Federal Government employees and other
residents working temporarily in Alaska and Hawaii
Further, the GNP total included another $1 billion
of Alaskan and Hawaiian product because the

Gross National Product or Expenditure, 1947-64
(Quarterly data in current prices.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
600

500

400

PERSONAL CONSUMPTION EXPENDITURES

300

200

GOVERNMENT PURCHASES OF GOODS AND SERVICES
GROSS PRIVATE DOMESTIC INVESTMENT

100

I
I
NET EXPORTS OF GOODS AND SERVICES
1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

SOURCE OF DATA: DEPARTMENT OF COMMERCE

1964

statistics had not been sufficiently refined to exclude
it.
On balance, the explicit additions to GNP that
were made in order to cover the two new States
amounted to about $1 billion in 1960, or only about
0.2 percent of the total. Half of this was in consumption, about $0.3 billion in State and local
government purchases, and about $0.2 billion in
construction. About $1.5 billion had to be explicitly
added to the income series, largely to the labor
component.
"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 (p. 14).
"Gross private domestic investment" consists of
new construction, purchases of producers7 durable
equipment, and the change in business inventories.
This component of GNP is described below, in a
separate section (p. 23).
"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,
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, A Supplement to
the Survey oj Current Business (1958), Table IV-4
and in the July issue of the Survey oj Current Business. See also the sections of this report dealing
with the U.S. Exports and Imports of Goods and
Services and the U.S. Balance of Payments (p. 84).
"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,
and 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 variation in the time at which expenditures occur and are
recorded. For a more extended discussion, see the
section below, "Federal Budget, National Income
Accounts Basis" (p. 126).
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. 61). 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. Revisions currently
underway will not be published until 1965.
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 1963. 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

TABLE 2.—Gross National Product or Expenditure
Government purchases of goods and services
Year

Total
Net
Personal Gross
gross
Total
private exports
connational
gross
sump- domestic of goods
product national
investtion
and
in 1963 product expendment
services
prices
itures

Federal
Total
Total i

National
defense 2

Other

State
and
local

Implicit
price
deflator
for total
GNP,
1963= 1003

Billions of dollars
1929_

214. 1

104. 4

79.0

16.2

0.8

8. 5

1.3

7. 2

48. 8

1930.
1931_
1932_
1933_
1934.

194.6
180.3
153.8
150.0
164.3

91. 1
76.3
58.5
56.0
65.0

71.0
61.3
49. 3
46. 4
51.9

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

46.8
42. 3
38.0
37.3
39. 5

1935_
1936_
1937_.
1938_.
1939..

179.9
205.0
215.7
206.3
223.2

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
.1
1. 1
.9

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

40.3
40.4
42. 1
41.3
40. 8

1940_.
1941.
1942_.
1943_.
1944_.

242.0
281.6
322. 6
363.6
390. 1

100.6
125.8
159. 1
192.5
211. 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. 1
24.8
59.7
88.6
96.5

6.2
16.9
52. 0
81.2
89.0

2.2
13.8
49.6
80.4
88.6

4.0
3.2
2.7
1. 5
1.6

7.9
7.8
7.7
7.4
7. 5

41.6
44.7
49. 3
53.0
54. 2

1945_.
1946..
1947..
1948..
1949_.

382.4
331. 8
331. 1
344. 2
345.3

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

55.9
63. 5
70.8
75. 4
74. 7

1950_.
1951..
1952_.
1953-.
1954..

373.
404.
420.
439.
431.

9
6
4
6
0

284.
329.
347.
365.
363.

6
0
0
4
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.

76.
81.
82.
83.
84.

1955..
1956..
1957_.
1958..
1959_.

464.5
474. 4
483. 6
476. 4
508.2

397.
419.
442.
444.
482.

5
2
8
5
7

256.
269.
285.
293.
313.

9
9
2
2
5

63. 8
67. 4
66. 1
56.6
72. 7

1. 1
2.9
4. 9
1.2

75.
79.
86.
93.
97.

6
0
5
5
2

45.3
45.7
49. 7
52. 6
53. 6

39.
40.
44.
44.
46.

1
4
4
8
2

6.6
5.7
5.7
8.3
7. 9

30.3
33.2
36. 8
40. 8
43. 6

85. 6
88.4
91. 6
93.3
95. 0

I960..
19611962_.
19631964 5

521. 1
531. 2
564. 7
583. 9
610.6

502. 6
518. 7
556. 2
583. 9
622.6

328. 2
337.3
356. 8
375. 0
399.3

71. 8
68. 8
79. 1
82. 0
87.7

3. 0
4. 6
4. 0
4.4
7.0

99. 6
108. 0
116. 3
122.6
128. 6

53. 1
57.4
62. 9
64. 7
65.5

45. 7
49.0
53. 6
55. 2
55.4

8.0
8. 9
10. 2
10. 3
11.2

46. 5
50. 6
53. 5
57. 9
63.0

96. 5
97.6
98. 5
100. 0
101.9

7
7
2
9
7

1
3
5
1
2

Less Government sales.
. ,
,
2 These expenditures correspond closely with budget expenditures for national defense, shown in table 35 on Federal Administrative Budget Receipts and
Expenditures
on
p.
121.
3
Gross national product in current prices divided by gross national product in 1963 prices.
* Not available.
5
Preliminary.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce.

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. (See table,
"Seasonal Correction, GNP 1963/' p. 8.)

The GNP is also "deflated" or expressed in dollars
of constant purchasing power. The procedure in
general is to divide components of the current dollar
GNP by appropriate price indexes, utilizing as fine a
product breakdown as possible, and then to sum the
components to obtain the constant dollar GNP.

The price information, which in most cases is available in greater detail than the current dollar estimates, is combined into composite indexes applicable
to the various current dollar series. The deflation
makes use of price indexes and other information
from such sources as the Bureau of Labor Statistics,
Agricultural Marketing Service, Interstate Commerce Commission, etc.
Weights for constructing the composites, approximating expenditures for the products represented by
the price series, have been obtained from the detailed
industrial censuses. Expenditure weights in some
instances have been broken down between urban
and rural areas in order to incorporate price data of
the agricultural marketing service. Quantity data
also are utilized in lieu of price deflation in a number
of instances, most notably in the case of government
employment (man-hours, to the extent available).
The GNP implicit deflator is an index of price changes
in the GNP, and is computed by dividing the deflated estimates into the corresponding current dollar
estimates.
The basic work in deflating the GNP converted the
current dollar series to 1954 prices; 1954 prices are
used in presenting the constant dollar GNP in "U.S.

Income and Output" and other publications of the
Department of Commerce. For convenience in current business analysis, the GNP has been converted
to 1963 dollars in Economic Indicators.
In shifting from a 1954 price base to a 1963 base
a short-cut procedure is used. The major components of the GNP are shifted from 1954 to 1963
prices separately and then summed to obtain an
estimate of the GNP in 1963 prices. This is believed
to give a close approximation to the results which
would be obtained if each sub-component of the GNP
used in the deflation to 1954 prices were shifted
individually.
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

Seasonal Correction, Gross National Product, 1963
[Billions of dollars]

II
Gross national product

III

Corrections, quarterly rates
(seasonally adjusted
minus unadjusted)

Unadjusted

Seasonally adjusted

III

142. 9 144. 3 146.8 149.8 137.4 144. 0 143. 6 158.9

Personal consumption expenditures __ 92.3

IV
5. 5

93. 0

94. 3

95.3

87.9

92. 1

91. 5 103.4

4.4

12.8
41. 5
38.0

12. 9
41.6
38. 5

13. 1
42. 1
39. 1

13. 4
42.2
39. 7

11. 4
38.0
38. 5

12. 9
40.9
38.4

11. 6
40.7
39. 1

16.2
47.9
39.3

1. 4
3. 5

Gross private domestic investment. _ 19. 5

20. 1

20. 7

21.8

19.2

20.7

21.0

21. 1

11. 2
7.4
.9

11.5
7. 7
.9

11.8
7.8
1.0

12. 1
8. 1
1. 6

9.4
6.7
3. 1

11.7
8.2
.8

13.0

7. 5
. 5

12.6
8.6
0

1. 1

1.4

1. 1

1.3

1.8

7.2
6.3

7.6
6. 6

7. 7
6.7

8.2
6.7

7.0
6.0

7.9
6.6

7.3
7.0

30.4

30. 2

30. 7

31. 2

29.2

29. 9

16.3
14. 1

16. 1
14. 2

16. 1
14. 6

16.2
15.0

15.9
13.3

15.6
14.3

Durable goods
Nondurable goods
Services

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

-. 5
.3

.7
.1
-.6

III

3.2

-9. 1

2.8

-8. 1

1. 5
1. 4
0

-2. 8
-5. 7

-.3

- . 2 -1.2
.3
-. 5
.5
.1

.4
. 7
-. 5
-. 5
1.6

8. 5
6.7

1.8
.7
-2.2
-.3
.2
.3

-.3
0

.4
-.3

30.9

32. 6

1. 2

-1. 4

16.0
14.9

17. 2
15. 5

.4
.8

.5
-. 1

.1
3

-1.0
-. 5

-. 2

-.3
0

smaller than the gross national product chiefly because the former is a "net" estimate excluding (1)
allowances 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
Reserve 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 in-

dustries 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. The accompanying table shows
the trend in GNP in terms of 1961 prices since 1929,
and the implicit deflator. 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. It thus provides a useful framework for economic projections.
REFERENCES

See p. 12, under National Income.

3. 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
shown 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
40-752 0—65

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 United States
persons and governments from private business and
from abroad, minus government interest disbursements. Imputed interest consists of the value of
financial services received by persons without
explicit payment, and of property income withheld
by life insurance companies and mutual financial
intermediaries for the account of persons.
"Corporate profits" are the earnings of corporations organized for profit which accrue to residents
of this Nation 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. 20.)

"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.
The accompanying chart shows the movements of
the national income by these major components
since 1947.

available each year from the unemployment insurance system, with current monthly estimates resting
chiefly on employer reports on employment and
earnings to the Bureau of Labor Statistics.
"Proprietors* income"—estimated from income tax
returns to the Internal Revenue Service with current quarterly data derived from analysis of trends
in noncorporate as well as corporate sales and corporate profits in individual industries.
"Rental income of persons" is 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
STATISTICAL PROCEDURES
and rental income between persons and business.
"Net interest" is estimated from reports to the
The methods of estimation employed in the very
complex area of national income are described in Internal Revenue Service, Bureau of the Census,
detail in the 1954 National Income Supplement to Board of Governors of the Federal Reserve System,
the Survey of Current Business. Further informa- and other agencies on interest and debt.
tion is provided in U.S. Income and Output, 1958,
Seasonal adjustments are not available for the inalso issued as a supplement to the Survey. The come components of the national accounts, with the
following indicates briefly the types of estimating exception of corporation profits. This is so because
procedures used:
the basic data sources do not provide a completely
" Compensation of employees"—reliable data are unadjusted monthly series for wages and salaries,
National Income, 1947-64
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
500

400

TOTAL NATIONAL INCOME
300

COMPENSATION OF EMPLOYEES

200

100

CORPORATE PROFITS AND INVENTORY VALUATION ADUSTMENT
PROPRIETORS' AND RENTAL INCOME
NET INTEREST v
1947

.............1

I I I IIIII II I

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

SOURCE OF DATA. DEPARTMENT OF COMMERCE

1964

TABLE

3.—National Income

[Billions of dollars]

Total
national
income

Year

Compensation
of em- 1
ployees

Proprietors' income

Farm

Business
and professional

Rental income of
persons

Net interest 2

Corporate profits and inventory
valuation adjustment

Total

Profits
before

tax

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. 8
39.7
31. 1
29. 5
34.3

4. 1
3.2
1.9
2. 4
2.4

7. 4
5.6
3.4
3. 2
4.6

4. 8
3.8
2.7
2.0
1.7

6.0

6.6

5.8
5.4
5.0
4.9

1.6
-2.0
-2.0
1. 1

3. 3
-.8
-3.0
.2
1.7

3.3

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. 7
1. 8
2. 1
2. 6
2. 7

4. 8
4. 7

2.9

3. 1
5. 7

1940
1941
1942
1943
1944

81. 6
104. 7
137.7
170.3
182.6

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

1945
1946
1947
1948
1949

181. 2
180. 9
198.2
223.5
217.7

123. 2
117. 7
128.8
141.0
140.8

11. 8
15. 3
15.5
17.8
12.9

241.9
279. 3
292. 2
305.6
301. 8

154.2
180. 3
195. 0
208. 8
207. 6

330.2
350.8
366. 9
367. 4
400. 5
414.5
426. 9
455. 6
478. 5
509.8

1950__
1951
1952
1953_
1954

. __-

._ _

1955_ __-.
1956___ _
1957
1958
1959
1960
1961
1963__
1964 4

_-_
__

-. 2

4.7

5.0
6.2

4. 6
4. 6

4. 3
5. 7

3. 3
6. 4

2. 9
3. 5
4.5
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

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

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

35.7
41. 0
37. 7
37.3
33. 7

40.6
42. 2
36. 7
38.3
34. 1

-5.0

223.9
242.5
255. 5
257. 1
278. 5

11.8
11.6
11. 8
13. 5
11. 4

30.4
32. 1
32.7
32. 5
35. 1

10.7
10.9
11. 9
12. 2
11. 9

10.4
11. 7
13.4
14. 8
16. 4

43. 1
42. 0
41. 7
37. 2
47. 2

44.9
44. 7
43. 2
37. 4
47. 7

-1.
-2.
-1.
-.

293.6
302. 2
323. 1
340.3
361.7

12. 0
12.9
13. 2
13.0
12.7

34. 2
35.3
36. 6
37.6
39.3

12. 1
12. 2
12. 2
12.3
12.4

18.0
20. 1
22. 1
24. 4
26.8

44. 5
44. 1
48. 4
50. 8
57.0

44.3
44. 2
48. 2
51. 3
57.2

1
2

6.2

Includes employer contributions for social insurance. (See also table 4 on Sources of Personal Income on p. 13.)
For explanation, see page 9. Does not include interest payments by governments or interest payments to financial institutions and corporations.
paid3 for 1963 was $76.2 billion as aggregated from National Income accounts, table 71, "Survey of Current Business," July 1964.
Less than $50 million.
* Preliminary.
NOTE.—Quarterly data available beginning 1939; annual from 1929. Data for Alaska and Hawaii included beginning 1960.
SOURCE: Department of Commerce.

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

2.4
1.0
-2. 1
-.6

()

1. 0
-. 7

— 1. 2
1. 0
-1. 0
7
7
5
3

.2
—. 1
. 3
-.4
2
Gross interest

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: a preliminary estimate is published in the

Survey in the first month after the close of the
quarter; revised figures for each quarter are shown
in a subsequent issue of the Survey. The figures
also appear in Economic Indicators. Preliminary
annual estimates are published by the Office of
Business Economics in the January issue of the
Survey, revised estimates in the July issue. Complete annual and quarterly statistics for 1929-45,
with and without seasonal adjustment, and a detailed 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 1956-58 are published in the
July 1962 Survey. Similar data for the 1959-63
period may be found in the July 1964 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.
A statistical evaluation report, "Revisions of First
Estimates of Quarter-to-Quarter Movement in National Income Series, 1947-1958" is available from
the Office of Statistical Standards, Bureau of the
Budget.

4. 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 exceptions—chiefly the net rental value
of owner-occupied 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 "Rental 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.
Seasonally adjusted data, preferred for most purposes, are derived directly from seasonally adjusted
source materials for some national income components. Unadjusted data are not available for
personal incomes or for national income.
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.

TABLE 4.—Sources of Personal Income
[Billions of dollars]

Total
personal
income

Year

Wage
and
salary
Other
labor
disburse- income 2
ments *

Proprietors'
income

Farm

Rental

income
of
Business persons
and professional

Dividends

Personal
Transinterest3 fer payincome ments

Less:
Personal
contributions
for
social
insurance

Nonagricultural
personal
income 4

1929

85. 8

50. 4

0. 6

6.0

8. 8

5. 4

5.8

7. 4

1. 5

0. 1

77. 7

1930
1931
1932
1933
1934

76. 9
65. 7
50. 1
47. 2
53. 6

46. 2
39. 1
30. 5
29.0
33. 7

.6
.5
.5
.4
.4

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

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

4. 8
3. 8
2. 7
2. 0
1. 7

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

6. 9
6. 9
6.6

1. 5
2. 7
2. 2
2. 1
2. 2

.1
.2
.2
.2
.2

70. 8
60. 9
46. 9
43. 6
49. 8

1935
1936
1937
1938
1939

60. 2
68. 5
73. 9
68. 6
72. 9

36. 7
41. 9
46. 1
43. 0
45. 9

.5
.6
.6
.6
.6

5. 0
4. 0
5. 6

1. 7
1. 8
2. 1
2. 6
2. 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

4.3
4.3

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

3. 0

.2
.2
.6
.6
.6

53. 9
63. 2
67. 0
62. 8
67. 1

1940
1941
1942
1943
1944

78. 7
96. 3
123. 5
- - 151. 4
_ _ 165. 7

49. 8
62. 1
82. 1
105. 6
117. 0

.7
.7
.9
1. 1
1. 5

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

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. 1
3. 1
3. 1
3. 0
3. 6

.7
.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

117. 6
111. 9
122. 8
135.2
134. 4

1. 8
1. 9
2. 3
2. 7
3. 0

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. 8
6. 5
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. 3
2. 0
2. 1
2. 2
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

146. 4
170. 7
184. 9
198. 1
196. 3

3. 8
4. 8
5. 3
6.0
6. 2

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
383.9

210. 9
227. 6
238. 5
239..8
258. 5

7. 1
8. 1
9. 1
9.4
10.4

11. 8
11. 6
11. 8
13. 5
11.4

30. 4
32. 1
32. 7
32. 5
35. 1

10. 7
10. 9
11. 9
12. 2
11.9

11. 2
12. 1
12. 6
12. 4
13.7

15. 8
17. 5
19. 6
21. 0
23. 5

17. 5
18. 8
21. 9
26.3
27. 5

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

295 0
317. 9
336. 1
343. 0
368. 6

401. 3
417. 6
442. 4
464. 1
491.4

271. 3
278. 8
297. 1
312. 1
331.6

11. 0
11. 6
12. 3
13. 1
14. 1

12. 0
12. 9
13. 2
13. 0
12.7

34. 2
35. 3
36. 6
37. 6
39.3

12. 1
12. 2
12. 2
12. 3
12.4

14. 5
15. 2
16. 5
18. 0
19.8

25. 8
27. 5
30.0
32. 9
36.0

29. 5
33. 6
34. 7
36 7
38.2

9. 2
9. 6
10. 3
11. 8
12.7

385. 1
400. 4
424. 9
446 6
474.2

1960
1961
1962
1963 6
1964

. _ _

__.

___

7.3
8.4

6. 2
6. 1

2.4
2.8

1
2
3
4
8

Compensation of employees (see table, p. 11) excluding employer contributions for social insurance and the excess of wage accruals over disbursements.
Employer contributions to private pension, health, and welfare funds: Compensation for injuries; directors' fees; military reserve pay; and a few other minor items.
For explanation, see page 12 and footnote 2, table 3. Does not include interest payments to financial institutions and corporations.
Personal income less net income of unincorporated farm enterprises, farm wages, agricultural net interest, and net dividends paid by agricultural corporations.
Includes $2.7 billion National Service Life Insurance dividend, most of which was paid in the first half of the year. « Preliminary.
NOTE.—Quarterly data available beginning 1939; annual from 1929. Data for Hawaii and Alaska included beginning 1960.
Source: Department of Commerce.

on the ability of the estimates to show when a
change
is occurring and the direction of the shift.
The estimates for personal income and components
Disposable
personal income, discussed in the next
and for disposable income measure trends in spending
power of individuals. The inclusion of substantial section, is often used as a measure of income available
nonmonetary items—imputed rent, interest, food, for spending. For measuring changes, in real terms,
fuel—should be noted but the effect of these items i.e., in consumers' buying power, the estimates of
should not be overemphasized. They tend to make disposable income in constant prices are to be
income estimates more stable, but have little effect preferred.
USES AND LIMITATIONS

TABLE

Equals:
DisposLess:
Year Personal Personal
able
l
income taxes personal
income

5.—Disposition oj Personal Income

Less : PersonaI consumption
expenditures

Total

Per capita disEquals posable personal
Perincome
sonal
saving
Durable NonCurrent
1963
goods durable Services
prices prices 2
goods

Billions of dollars

Dollars

Percent

1929-.

85. 8

2.6

83. 1

79. 0

9. 2

37. 7

32. 1

4. 2

682

1,256

1930-.
1931-1932__
1933-1934_.

76.9
65.7
50. 1
47. 2
53. 6

2. 5
1. 9
1. 5
1. 5
1. 6

74.4
63. 8
48. 7
45.7
52. 0

71. 0
61.3
49.3
46.4
51. 9

7. 2
5. 5

34. 0
28. 9
22. 8
22.3
26.7

29. 8
26. 9
22. 9
20.7
21. 0

3.4

604
514
390
364
411

1935-.
1936__
1937__
1938_.
1939--

60. 2
68.5
73. 9
68. 6
72. 9

1.9
2.3

58.3
66. 2
71.0
65. 7
70. 4

56.3
62. 6
67.3
64. 6
67. 6

5. 1
6. 3
6. 9

29.3
32. 8
35. 2
34. 0
35. 1

21. 9
23.5
25. 1
25. 0
25. 8

1940._
1941__
1942_.
1943-.
1944._

78. 7
96.3
123. 5
151.4
165.7

71.9
81. 9
89.7
100. 5
109. 8

7. 8
9. 7

17.8
18. 9

76. 1
93.0
117.5
133. 5
146. 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

1945-.
1946-_
1947__
1948-.
1949--

171. 2
179.3
191. 6
210.4
208. 3

20. 9
18. 7
21.5
21. 1
18.7

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

1950__
1951__
1952._
1953__
1954__

228.5
256.7
273. 1
288.3
289.8

20.8
29.2
34. 4
35.8
32.9

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

1955__
1956__
1957..
1958._
1959_.

310.2
332.9
351.4

274.4
292.9
308.8
317.9
337. 1

256.9
269.9
285.2
293.2
313.5

39.6
38.5
40. 4

383. 9

35.7
40.0
42.6
42.3
46. 8

1960__
1961__
1962_.
1963._
1964 4 .

401.3
417. 6
442. 4
464. 1
491.4

51. 4
52. 9
57.9
61. 6
59.5

349.9
364.7
384. 6
402. 5
431.8

328.2
337.3
356. 8
375.0
399.3

360.3

2. 9
2. 9
2.4

2.6
3.3
6.0

Saving as
percent of
disposable
income

Population

Thousands

5. 1

121, 875

1, 164
1, 110

4. 6
3. 9
-1.2
-1.3
.2

123, 188
124, 149
124, 949
125, 690
126, 485

458
516
551
506
537

1,070
1, 194
1,227
1, 150
1,237

3.4
5.4

127, 362
128, 181
128, 961
129, 969
131, 028

576
697
871
976

1,061

1,312
1,486
1,659
1,705
1,755

5. 5
11.9
23. 7
24. 7
25. 1

132,
133,
134,
136,
138,

1,717
1,680
1,578
1,632
1,621

19. 1

8.5

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

139, 928
141, 389
144, 126
146, 631
149, 188

64.9
70.2
75. 6
81.8
86.3

12.6
17.7
18.9
19. 8
18.9

1,369
1,475
1,521
1,582
1, 582

1,720
1,738
1, 756
1,808
1,792

6. 1
7. 8

92.5
100.0
107. 1
114. 3
122. 8

17. 5
23.0
23.6

1,661
1, 741
1,803
1,826
1,904

1,870
1,930
1,943
1,930
1,987

6.4
7.9
7.6

43. 6

124. 8
131. 4
137. 7
141.6
147. 1

44. 9
43. 7
48.4
52. 1
57.0

151.8
155. 4
162.0
167. 5
177.3

131. 5
138.3
146. 4
155.3
165. 1

1,936
1,985
2,060
2, 125
2,248

1,994
2,028
2,087
2, 125
2,217

6.2
7.5

3.6

3. 5
4. 2

5.7

6. 7

7.0

37.3

2. 5
-. 6

-.6

.1
2.0
3.6
3.7

1. 1

2.9
4.2

11. 1
27. 8
33. 0
36. 9

4.7

11.0

24.7
23.6
21.7
27.3
27. 8
27.5
32.5

951
924
981

5. 2
1. 7
4. 1

8.4

2. 8
5. 8

4.5

7.9
7.8
7.4

7.8
7. 0

7. 2

6.8
7.5

122
402
860
739
397

151, 689
154, 283
156, 947
159, 559
162, 388
165, 276
168, 225
171, 278
174, 154
177, 080
180, 684
183, 756
186, 656
189, 375
192, 072

1
2
3

Includes also such items as fines and penalties.
Income in current prices divided by the implicit price deflator for personal consumption expenditures on a 1961 base.
Population of the United States as of July 1, excluding Alaska and Hawaii prior to 1960; includes armed forces abroad.
* Preliminary.
NOTE.—Quarterly data available beginning 1939; annual from 1929.
Source: Department of Commerce.

STATISTICAL PROCEDURES

Most personal consumption expenditures for goods
are estimated for benchmark years from the \ alue 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.
Estimates of consumption expenditures for years
between benchmarks and quarterly consumption expenditures 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 the
discussion in the sections on Gross National Product
or Expenditure, and National Income.
RELATION TO OTHER SERIES

Estimates of personal consumption expenditures
will show much the same movements 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 Com-

mission differ in level and trend. The chief reason
for the difference is the inclusion in the personal savings series (and not in the net claims estimates) of net
purchases of nonfarm 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.

6. FARM INCOME
contributions to social insurance. It includes Government payments and makes an allowance for the
There are two major concepts of farm income. net value of physical changes in farm inventories of
One, a personal income concept, relates to all the crops and livestock. Personal income from nonfarm
people who live on farms and the incomes they receive sources includes salaries and wages, interest, divifrom nonfarm as well as farm sources. The other dends, rents, royalties, and transfer payments, such
views agriculture as a business and measures the as unemployment compensation and veterans'
gross and net income received from farming. The benefits.
Economic Research Service of the Department of
Gross and net farm income from farming and farm
Agriculture prepares estimates relating to both production expenses are estimated annually from
concepts.
1910 and quarterly at seasonally adjusted annual
Estimates of the personal income received by the rates, from 1929. Realized gross income from farmtotal farm population are available only on an annual ing is the sum of (1) cash receipts from farm marketbasis back to 1934. The personal income of the ings, (2) the value of farm products consumed
farm population from farm sources covers the net directly in farm households, (3) the imputed gross
income of resident farm operators from farming plus rental value of farm dwellings, and (4) Government
farm wages received by farm resident workers less payments to farmers. Farm production expenses,
DESCRIPTION OF SERIES

Farm Income, 1947-64
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
50

REALIZED GROSS FARM INCOME

1947

NET FARM INCOME (INCL. NET CHANGE IN INVENTORIES)

i i

1948 1949 1950

1951
1952

1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE OF DATA: DEPARTMENT OF AGRICULTURE

which now offset about 70 percent of realized gross mark estimates from sample surveys for several
farm income, are the aggregate of all current farm scattered years and interpolated or extrapolated for
operating expenses and overhead costs. Farm other years. Since the first benchmark surveys were
operators' net income excluding the net change in for the years 1934-36, the series starts there and does
inventories is the remainder of realized gross farm not extend back to 1910 along with many other
income after farm production expenses have been series on farm income. Totals derived from various
deducted. Farm operators' net income including surveys covering the years 1946, 1950, 1955 and
net change in inventories takes into account changes 1960 have been used as benchmarks or as supplein farmers' holdings of livestock and crops, as shown mentary check data.
on the accompanying chart. Net income per farm
For the computation of gross farm income, the
is calculated by dividing the U.S. income totals by estimates of cash receipts from marketings are based
the Department of Agriculture series on estimated on information collected by the Department of Agrinumbers of farms.
culture on the quantity sold and average prices
received
by farmers for the various farm comSTATISTICAL PROCEDURES
modities. The current estimates of monthly crop
Since the average farm family receives about a marketings are based on estimated production, the
third of its total personal income in the form of normal percentage of the crop sold, and the usual
earnings from employment in nonfarm occupations seasonal movement to market, supplemented by
or as returns from investments in nonfarm property, available current data on market receipts and Comthe measurement of these items is obviously impor- modity Credit Corporation loan activity. Formost
tant as a supplement to the regular measures of farm of the important livestock items, current reports on
income. Estimates of income received by the farm production or market receipts are available and are
population from nonfarm sources are tied to bench- used to estimate current livestock marketings. The

estimates of cash receipts from marketings are later
revised as more complete data on production, cropyear 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, Feed Grain and
Wheat Programs, 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 are
based on about 40 separate series. Annual survey
data are available only for replacement and feeder
livestock and taxes on farm real estate. Some of the
operating expenses 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 buildings, motor vehicles, and other farm machinery and equipment are estimated annually as
the amount which farmers would have 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 underenumeration and
some of the Soil Bank farms excluded in the Census.
National estimates for intercensal years utilize June
Enumerative Surveys of the Statistical Reporting
Service based on an area probability sample.
Quarterly estimates of cash receipts from farm
marketings are expanded to a seasonally adjusted
annual rate. The normal quarterly distribution of

cash receipts in recent years has been 22 percent in
the first quarter, 19 percent in the second quarter,
26 percent in the third quarter, and 33 percent in
the fourth quarter—requiring some fairly large
seasonal adjustments.
Except for cash receipts, however, monthly or
quarterly information on components of farm income and expense is insufficient for the direct application of ordinary methods of seasonal adjustment.
While cash receipts can be seasonally adjusted in
the usual manner, 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, although some variations exist prior
to 1946 because of differences in the timing of
revisions.
The Department of Agriculture also publishes other
estimates such as the net cash income of farm operators, the income of farm workers, farm capital
expenditures, and related series,
USES AND LIMITATIONS

These estimates of 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 chang-

TABLE

6.—Farm Income
Income received by farm operators from farming

Personal income received
by total farm population

Realized net

Realized gross

Year

From
all
sources

From
farm
sources

From
nonfarm
sources
Total

Cash
receipts
from
marketings

Production expenses

Excluding
net inventory
change

Net income per farm
including net inventory change 3

Including
net inventory
change 2

Billions of dollars

Current
prices

1963
prices 4

Dollars

1929_.

(5)

13.9

11.3

7.6

6.3

6. 1

943

1,813

1930..
1931-.
1932_.
1933_.
1934.

(5)
(5)
(5)
(5)
5.4

(5)
(5)
(5)
(5)
3.2

(5)
(5)
(5)
(5)
2.2

11.4
8.4
6.4
7. 1
8. 6

9.0
6.4
4.8
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

1,354
1,234
847
1,032
1,059

1935.
1936.
1937.
1938.
1939.

7.7
7.2
9.0
7.2
7.4

5.4
4.6
6.3
4.7
4.8

2. 3
2. 6
2. 7
2.5
2. 6

9. 7
10. 7
11.3
10. 1
10. 6

7. 1
8. 4
8.9
7. 7
7.9

5. 1
5.6
6. 1
5.8
6.2

4. 6
5. 1
5.2
4.3
4.4

5.3
4.3
6.0
4. 4
4.5

778
643
911
675
697

1,898
1,568
2, 119
1,646
1,742

1940.
1941 _
1942_
1943.
1944.

7.
10.
14.
16.
16.

6
1
0
3
5

4.9
6.9
10.2
12.2
12. 3

2. 7
3.2
3.8
4. 1
4. 2

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

1.800
2,428
3,200
3,468
3,334

1945.
19461947.
19481949-

17. 1
20. 1
21. 0
23. 5
19.0

12. 9
15. 7
16. 0
18. 1
13. 5

4.2
4. 4
5.0
5.4
5.5

25. 8
29. 7
34.3
34.9
31.8

21. 7
24.8
29. 6
30.2
27. 8

12. 9
14.5
17.0
18.8
18. 0

12. 8
15. 2
17.3
16. 1
13. 8

12.4
15.3
15.5
17.8
12.9

2,080
2,574
2,648
3,065
2,259

3, 355
3,785
3, 310
3,606
2,755

1950.
1951-.
1952_
1953 _
1954.

20.4
22.8
22.3
20. 0
19. 0

14.3
16. 5
15.7
13.8
13.2

6. 1
6.3
6. 6
6.3
5.8

32. 5
37.4
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
3,009
2, 951
2, 664
2,645

2,987
3, 343
3, 243
2, 960
2,939

1955_
1956.
1957_
1958.
1959 _

18. 3
18. 6
18. 8
20.5
19. 0

12. 2
12. 0
12.2
13. 8
11.8

6. 1
6. 6
6.6
6.7
7. 1

33. 3
34. 6
34. 4
37.9
37. 5

29. 6
30. 6
29. 8
33.4
33. 5

21. 9
22.6
23. 4
25.3
26. 2

11. 5
12. 0
11.0
12. 6
11. 3

11.8
11.6
11.8
13. 5
11. 4

2,529
2, 574
2,695
3, 201
2,775

2,779
2,798
2,837
3,334
2,861

1960.
1961_
1962.
1963.
1964 6

19.6
20. 1
20.4
19. 9
19.6

12. 3
13. 1
13.3
13.0
12.7

7. 2
7.0
7. 1
6.8
6.9

37. 9
39. 6
40.9
41.7
42.0

34.0
34. 9
36. 1
36. 9
36.7

26. 2
27. 0
28.3
29. 2
29.4

11. 7
12.6
12. 6
12. 5
12.6

12. 0
12.9
13. 2
13.0
12.7

3,044
3, 389
3,581
3, 643
3,656

3, 106
3,458
3,617
3, 643
3,620

1
2

Cash receipts from marketings, Government payments, and nonmoney income furnished by farms.
Data prior to 1946 differ from "Farm proprietors' income" in the table "Sources of Personal Income" because of revisions by the Deoartment of Agriculture
not yet incorDorated into the national income accounts of the Department of Commerce. Inventory of crops and livsstock valued at the average price for the year.
3 Based on the 1960 Census of Agriculture definition of a farm. The numbers of farms (in millions) are 3.6 for 1963 and 3.5 for 1964.
* Income in current prices divided by the index of prices paid by farmers for items used in family living on a 1963 base.
5
Series on personal income begins in 1934.
6 Preliminary.
Source: Department of Agriculture.

ing prices of farm products and of farm production
items, the Economic Research Services has developed
data on farm costs and returns for 40 of the more
important type-of-farming areas. The Economic

Research Service has also developed some preliminary estimates of income for commercial and for noncommercial farms and some distributions of farm
income by value of sales classes for 1959-63.

REFERENCES

The basic release of the farm income data is The
Farm Income Situation, published four times a year
by the Economic Research Service. The annual
series are also published, with other principal series
relating to agriculture, in the Department of Agriculture's annual Agriculture 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
(now published by the Economic Research Service).
The individual studies of commercial family-operated
farms by types and location are published annually
by the Economic Research Service in Farm Costs
and Returns.

7. CORPORATE PROFITS
DESCRIPTION OF SERIES

Adjustments for international flows affecting profits
are made. In these respects the national income
measure of profits differs from those shown in the
Internal Revenue Service tabulations of tax returns.
The national income profits measure also differs from
those commonly shown in company reports and from
the financial reports series of the Federal Trade Commission and Securities and Exchange Commission.

The corporate profits and related series of the
Office of Business Economics, Department of Commerce, pertain to all United States corporations
organized for profit. Data are shown for broad
industry groups, and estimates are made of the distribution of profits between corporate tax liability,
dividends, and retained earnings. Corporate capital
consumption allowances and corporate cash flow (i.e.,
STATISTICAL PROCEDURES
corporate profits after taxes plus capital consumption
allowances) are also shown. Capital consumption
The annual data published in the corporate profits
allowances consist of depreciation, capital outlays series are, except for the most recent year or two,
charged to current expense, and accidental damage based upon tabulations by the Internal Revenue
to fixed capital.
Service of unaudited corporate income tax returns.
The national income concept of profit is used in The data in these tabulations are adjusted to make
these series. Dividends received by corporations are them comparable, statistically and conceptually,
deducted from profits (and dividends) to obtain with other entries in the national income accounts.
unduplicated totals reflecting income originating in The important conceptual accounting adjustments
the United States corporations. Profits are calcu- are suggested by the statement above of differences
lated inclusive of depletion, which is not considered between the tax-return concept of profit and the
an element ot capital consumption in the national national income concept. In addition, the tax-return
income and product accounts. (Depletion allow- figures are augmented by the audit adjustment, which
ances are not included in the capital consumption makes allowance for additional profit disclosed by
allowance estimates.) Capital gains and losses are auditing of the income tax returns by Internal
eliminated from profits because they do not measure Revenue. Mutual financial intermediaries are not
gains or losses originating from current production. considered part of the corporate universe for national
Seasonal Correction, Corporate Profits and Inventory Valuation Adjustment, 1963
[Billions of dollars]
Quarters
I
II
HI
IV

_
. .

Seasonally adjusted
quarterly rates
12.3
12.5
12.8
13. 3

Unadjusted quarterly
rates
11.5
12.9
12.6
13. 8

Correction, quarterly rates
(seasonally adjusted
minus unadjusted)
0.8
-.4
.2
. 0

Corporate Profits, 1947-64
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
60

1964
SOURCE OF DATA: DEPARTMENT OF COMMERCE

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 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).
The magnitude of the corporate profits seasonal
correction may be seen in the comparison of unadjusted and seasonally adjusted quarterly data for the
year 1963 shown in the table.
Quarterly 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.
In general, the valuation of the capital consumption allowance charges reflects the type of accounting
practices followed in arriving at the corporate profits reported to the Internal Revenue Service. Tabu-

TABLE 7.—Corporate Profits
[Billions of dollars]
Corporate profits (before taxes) and inventory
valuation adjustment 1

Corporate ]profits
i ifter taxes
Corporate
profits
before
taxes

Manufacturing
Period

Transportation,
induscommuDurable Nontries
goods durable nications,
Total indusgoods and public
utilities
industries
tries
All

All

other
industries

1929

10. 1

5. 1

2. 6

2. 5

2.0

3.0

1930
1931
1932
1933
1934

6.6

3.9
1.3
-.6

1.5

2.4
1.3
.4
.0

1.2
.6

-.2

.9
1.7

1. 1
1. 4
2. 0

.5
.7
.8

1. 6
-2.0
-2.0
1. 1

.o
.9

1935
1936
1937
1938
1939

2.9

2.0

5. 0

3. 1

1940
1941
1942
1943
1944

9. 1
14.5
19.7
23.8
23. 0
18.4
17.3
23.6
30.8
28.2
35.7
41.0
37.7
37.3

1945
1946
1947
1948
1949

6.2
4.3

5.7

.0
-1. 1
-. 5

-1.5
-1.5
-. 2

1.4
1.5

.6
1. 0

.5
1.2
1.8
1.5
1.5

1.3
2.0
3.5

2.4
3.2
4.5

8.0
7.3

2.3
3.0
4.5
5.6
5.7

4. 4

5.7
6. 1

9.5
8.4

4.5

5. 0

2. 8

2. 1

6.3

1.8

12. 8
16. 8
15.3

5.3

6. 1
7. 1

7. 4

7. 4
9. 4

12.0
13.5
11.8
12. 1
10. 1

3.6
2.2
3.2

1. 7
.7
1. 6

5.4
9.3

3.0
6.3

11. 7
13.7
13.. 0

7. 1

7.9

33.7

20.4
24. 4
21. 1
21.4
18.4

1955
1956
1957
1958
1959

43. 1
42. 0
41.7
37.2
47.2

25.0
23.5
22. 9
18. 3
25. 4

14.2
12.6
13. 1

1960
1961
1962
1963
19644___

44.5
44. 1
48.4
50.8
57.0

23.0
21.7
24. 7
26. 7
30.7

1950
1951
1952
1953
1954

.2
.1

1. 5

7.4
8.4

10. 9

3.9

Corporate
income
tax

liability Total

Divi- Undisdend tributed
pay- profits
ments

9.6

1. 4

3.3

-. 8
-3.0
.2

.8
.5
.4
.5

1. 7

1. 0

3. 1

1.0
1.4
1.5
1.0

2.2
4.3
4.7
2.3
5.0

2.9
4.5
4.7
3.2

6.5
9.4
9.5

4. 0

5.7
6.2
3.3
6.4

1. 4

2.4

4. 4

12.7

2.5

5.5

4. 1

-3. 0
-5.4
-6.0
-2. 4
-1. 6

4. 4

-1.3
-3.4

6. 9
3. 0
.6

-.4

2.6

2. 1
2. 6

3. 8

-. 7
-. 2
.0

3.9

8.9

4.0

10. 5
13.9
14. 6
16. 0
16.7

7. 6
11. 4
14. 1
12. 9

8.3
10.7
9. 1 13.4
11. 3 18.2
12.5 20.5
10.4 16. 0

4.7

3.6

5. 8

7. 7
11.7
13.3
8. 5

6. 0
5. 7

11.2
10. 1

4.0
4.5

11.3
12.0
11. 8
11.0
11.0

40. 6
42.2
36. 7
38.3
34. 1

17.9
22.4
19. 5
20. 2
17.2

22. 8
19. 7
17. 2
18. 1
16. 8

9. 2
9.2
9.8

8. 9
7. 0

12. 8
12. 9
13.3
13. 3
15. 1

44. 9
44. 7
43. 2
37.4

23. 0
23.5
22. 3
18. 8
24.5

11. 2
12. 1
12. 6
12.4
13. 7

11.8
11.3
9. 7

47.7

21. 8
21.2
20.9
18. 6
23.2

14. 4
15. 1
15.7
15. 7
17.4

44. 3
44.2
48. 2
51.3
57.2

22. 3
22. 3
23.2
24. 6
25.6

22.0
21. 9
25.0
26. 7
31.6

14. 5
15.2
16. 5
18. 0
19.8

9.3
9.3
8.3

4. 8
4. 9

10.8
10.9

5.4
5.6
5.5

4.4

9.0

9.8
9.3

13.4

11.9

6.7

11. 6
10.9
13. 2
14. 4
16.5

11. 4
10.8
11.5
12.3
14.2

7. 0

5. 6

7.3
8.0
8.4
8.9

6.5
7.2
7.5
9.0

9. 0

3. 7

2.4
4.9
5.2

17.0
20.9
24. 6
23.3

4. 3
4. 5
4. 7

4. 6

3. 8

2.8

10.5
10. 4

3.4

3. 6

-.9
1.2

9.3

4.5

4.3
4.0
3.8

5. 9
8. 0
8. 5
6. 1

2.9
2.9

8.7

Profits
plus
capital
consumption
allow-3
ances

5. 8

8.3

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

2. 1

Corporate
capital
consumption
allow-2
ances

13. 6
10. 7
8.3

6.4

10. 8
7. 5
6.7

8. 5
8. 7
11.8

3.7
3.8

4. 5
5. 1
5. 5
6.3

7. 7
8. 5

15.0
18.6
24.5
28. 2
24.5

9. 4
11.0
12. 3
14. 1
15. 8

32.2
30. 7
29. 6
32. 2
32. 7

18.4
20.0
21. 8
22. 7
24. 3

41. 4
43. 5
44. 1
41. 4
48. 7

25. 6
26.9
30.5
31. 8
33.7

47.6
48. 8
55. 5
58. 5
65.3

6.7
5.2
6.3

1 See table 3 Cp. 11) on National Income for the inventory valuation adjustment.
2 Includes depreciation, capital outlays charged to current accounts and accidental damages.
» Corporate profits after taxes plus corporate capital consumption allowances.
* Preliminary.
NOTE.—Data for Alaska and Hawaii included beginning 1960.
Source: Department of Commerce.

lations of Federal income tax returns data are the
primary source of the estimates of depreciation,
which account for about 90 percent of corporate
capital consumption allowances. Pending the availability of tax return data for the latest two years,

the same sources used to estimate corporate profits
are used to estimate depreciation charges. Estimates of capital outlays charged to current expense
are prepared in two parts: drilling and development
costs of oil and gas wells, which are included in the

new construction component of gross private domestic investment; and purchases of producers' durable
goods charged to current account, of which hand tools
are an example. Estimates of accidental damage to
fixed capital are compiled from fire loss, accident loss
and other relevant loss reports.
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 with
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
limits the industrial comparability of profits 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 and sales and inventories 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 business. These three series 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.

8. GROSS PRIVATE DOMESTIC INVESTMENT
DESCRIPTION OF SERIES

Gross Private Domestic Investment is one of the
major components of gross national product. The
series measures gross fixed investment and net
changes in business inventories, as shown in the
accompanying chart. Gross fixed investment (or
gross fixed capital formation) is defined as all newly
produced durable goods (i.e., those with an average
life exceeding one year) acquired by their ultimate

business users. New residential construction purchased by owner-occupants is also included because
homeownership is treated as a business in the national
accounts. The "Change in business inventories"
series measures physical changes in business inventories valued at current replacement cost.
Separate statistical series are published for "Fixed
investment" (which in turn consists of separate series
for "New construction" and "Producers' durable

equipment") and for "Change in business inventories." The "New Construction" series used in
computing gross private domestic investment is
based on the private construction component of the
new construction series described below, w4th the
addition of estimates for oil- and gas-well drilling.
A major revision of the "Producers' durable equipment" series was undertaken in conjunction with the
preparation of the 1954 National Income Supplement to the Survey of Current Business. The estimates were revised for the entire period since 1929.
Further significant revisions covering the period beginning with 1946 are described in U.S. Income and
Output.
The quarterly estimates of producers' durable
equipment and change in business inventories are revised annually to reflect more complete data than
were available when the initial estimates were made.
The revisions in the "Change in business inventories"
series have sometimes been quite sizable, and have
resulted primarily from revisions in the basic book
value inventory aggregates.

STATISTICAL PROCEDURES

The principal method of estimation used for the
"Producers' durable equipment" series is the commodity-flow technique. In brief, this technique
consists of (1) analyzing total manufacturing output
to obtain an estimate of the proportion that consisted
of finished producers' durable goods, (2) tracing the
flow of those goods through distribution channels,
(3) measuring their distributive costs, and (4) adding
the estimate of those distributive costs to manufacturers' sales value to arrive at an estimate of the
costs of those goods to their purchasers.
For the years 1929-39, 1947, and, to a lesser extent,
1954, data available from the manufacturers and
trade censuses made it possible to carry out the commodity-flow technique of estimating purchases of
producers' durable equipment in greater detail than
was possible in other years. New benchmark estimates of producers' durable equipment for 1954 were
developed on the basis of Census data, and it has
been possible to develop annually for 1955-57 "secondary" benchmark estimates primarily from data

Gross Private Domestic Investment, 1947-64
(Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
100

GROSS PRIVATE DOMESTIC INVESTMENT

NEW CONSTRUCTION
\
PRODUCERS' DURABLE EQUIPMENT

I \
CHANGE IN BUSINESS INVENTORIES
1947

1941 1949 1950 1951 1952 1953 1954 1955 1958 1957 1951 1959 I960

SOURCE OF DATA: DEPARTMENT OF COMMERCE

1961 1962 1963

1964

TABLE 8.-—Gross Private Domestic Investment
[Billions of dollars]

Change in business
inventories

Fixed investment

Year

Total
gross
private
domestic
investment

Producers' durable
equipment

New construction

Total

Total
Residential
nonfarm

Total

Other

Nonfarm

Total

1929

16.2

14. 6

8. 7

3.6

5. 1

5. 8

5.2

1. 7

1.8

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

4.5
2.8
1.6
1.6
2.3

4.0
2.6
1. 4
1.5
2. 1

- . 4
-1.3
-2.6
-1. 6
-1. 1

- . 1
-1.6
-2.6
-1.4
. 2

1935
1936
1937
1938
1939

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. 1
4.2
5. 1
3.6
4.2

2.7
3.6
4. 5
3. 1
3.7

.9
1.0
2.2
-.9
. 4

. 4
2. 1
1.7
-1.0
.3

1940
1941
1942
1943
1944

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

2.5
3. 1
2.0
1.4
1.9

5.5
6.9
4.3
4.0
5.4

4. 9
6. 1
3.7
3.5
4.7

2.2
4.5
1.8
-.8
-1.0

1.9
4.0
. 7
- . 6
-.6

1945
1946
1947
1948
1949

10. 4
28. 1
31.5
43. 1
33.0

11.5
21.7
32.0
39.4
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

6.9
9.8
14. 9
16.4
14. 4

-.5
4.7
-3. 1

-2.2

1950
1951
1952
1953
1954

50. 0
56. 3
49.9
50. 3
48. 9

43.2
46. 1
46. 8
49. 9
50. 5

24.
24.
25.
27.
29.

2
8
5
6
7

14.
12.
12.
13.
15.

1
5
8
8
4

10. 1
12.3
12. 7
13. 8
14.3

18. 9
21.3
21.3
22.3
20. 8

16. 2
18.4
18.6
19. 5
18. 5

6.
10.
3.
.
-1.

8
2
1
4
6

6.
9.
2.
1.
-2.

0
1
1
1
1

1955
1956
1957
1958
1959

63. 8
67.4
66. 1
56. 6
72. 7

58. 1
62. 7
64.6
58. 6
66. 2

34. 9
35. 5
36. 1
35. 5
40.2

18.
17.
17.
18.
22.

7
7
0
0
3

16.2
17. 8
19.0
17.4
17. 9

23.
27.
28.
23.
25.

1
2
5
1
9

20. 6
25.0
26. 2
20. 3
23. 1

5. 8
4. 7
1. 6
— 2. 0
6.6

5.
5.
.
-2.
6.

5
1
8
9
5

I960
1961
1962
1963
1964

71.8
68. 8
79. 1
82. 0
87.7

68.3
66. 9
73.3
77. 6
84.0

40.
41.
44.
46.
48.

21. 1
21. 1
23.6
25. 2
26. 0

19. 7
19. 8
20. 6
21. 3
22.9

27.
25.
29.
31.
35.

6
9
0
0
1

25. 1
23. 3
26.3
27. 9
31.5

3. 5
1. 9
5. 9
4.4
3.7

7
0
2
6
9

- . 6
6.4
1. 3
3.0

3. 2
1. 5
5. 3
3. 9
3.6

Revisions in the "New construction" series shown in table "New Construction" (p. 65) have not yet been incorporated into these accounts.
Includes petroleum and natural gas well drilling, which are excluded from "New construction" estimates.
Preliminary estimates.
NOTE.—Quarterly data available beginning 1939; annual from 1929. Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
2

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
40-752 0—65

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 to make them comparable with estimates
of producers' durable equipment, principally by ex-

eluding expenditures on new plant, including expenditures on new farm equipment and adding an estimate
of expenditures for business 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 for earlier years, except for the
1950-52 period when data from the National Production Authority were utilized, are based mainly on
selected industry sales data from the Department of
Commerce Monthly Industry Survey series (which
has been revamped and is now identified as the
Manufacturers' Shipment, Inventories, and Orders
series).
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 "Business Inventories," discussed later. 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 in the inventory-change series in the income accounts a uniform
method of valuation is used.
The producers' durable equipment series and the
change in business inventories series are seasonally
adjusted primarily by use of the ratiu-to-moving-

average 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 accompanying table on page 8.
USES AND LIMITATIONS

Changes in business investment are a major—if not
the major—factor determining business conditions.
Unfortunately, there are many shortcomings in
the data on which both fixed investment and inventory changes are based, especially for current
quarters.
The absence of reliable current data on government purchases of producers' durable equipment
constitutes a special problem. 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. The rate of investment in construction
is also subject to many data inadequacies, requiring
the use of "phasing patterns" and other synthetic
statistical techniques.
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. Estimates of current 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
1954 National Income Supplement, and pages 82-85
and 97-98 of U.S. Income and Output.

Expenditures for New Plant and Equipment, 1947-64
(Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS

501

TOTAL
30

1947

1948

1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE OF DATA: SECURTIES AND EXCHANGE COMMISSION, AND DEP/

9. EXPENDITURES FOR NEW PLANT AND EQUIPMENT
corporations; in annual and quarterly reports by a
group
of unregistered mining, manufacturing, trade,
The series on expenditures for new plant and
service, and construction companies to OBE, and by
equipment, published jointly by the Office of Business
regulated railroads, motor carriers, water carriers,
Economics (Department of Commerce) and the
and pipeline companies to the Interstate Commerce
Securities and Exchange Commission, measures the
Commission. In 1960 a large expansion was made
expenditures by all private business (except farming,
in the sample of financial organizations.
real estate, the professions, and non-profit and other
The last major revision in the series was published
institutions) for new plant, machinery, and equip- in two parts, the revision for manufacturing indusment for which depreciation accounts are maintained. tries in the December 1951 issue of the Survey oj
Expenditures charged off as current expense are Current Business and the revision for nonmanufacexcluded. Estimates are made quarterly for actual turing industries in the August 1952 issue. The replant and equipment expenditures and for anticipated vision established a new set of benchmark data and
expenditures for two succeeding quarters and the introduced improvements in the estimating procecalendar year. These estimates are based upon in- dures being used. For example, information conformation contained in annual reports of all corpora- tained in the annual mandatory financial reports
tions registered with SEC and quarterly reports from (Form 10K) to SEC was used for the first time and
a group of registered corporations which make over adjustments were made for biases arising out of
90 percent of the capital expenditures by registered changes in the business population.
DESCRIPTION OF SERIES

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 which 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 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 and quarterly reports received by SEC,
OBE and ICC. Essentially, the estimation procedure is as follows: given a universe estimate for one
period, the universe estimate for the next period is
derived by multiplying the first given universe
estimate by a link relative which is derived from
aggregates for the first 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 a 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 for seasonal fluctuations are
derived from the X-9 version of the Census method
adjustment program. These seasonal adjustment
factors are applied both to the estimates of anticipated expenditures for a given quarter and to 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 seasonal and bias adjustments
made in the 1961 quarterly estimates are suggested
by the implicit adjustment factors 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, however. 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

Implicit Adjustment Factors, Expenditures for New Plant and Equipment, 1963
Bias Adjustment Factors
Quarter

First _ _ _
Second _
Third
Fourth.- ___

First a n t i c i p a t e d expenditures estimate for
a given quarter

Second anticipated expenditures estimate for
the same quarter

0.96
.98
. 99
1.06

0.91
.96
. 92
1. 01

Seasonal adjustment factors for the same quarter

0.89
1.02
1.01
1.08

TABLE

9.—Expenditures jor New Plant and Equipment
[Billions of dollars]
Transportation

Manufacturing
Year

Total

Durable
goods

Nondurable goods

Mining

Railroads

Other

Public
utilities

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

1950.
1951
1952
1953
1954_

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

1955
1956
1957 __
1958
1959

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
9.82
10.88

1960
1961
_ -_
1962
1963
1964 (anticipated) 3-__

35. 68
34.37
37.31
39. 22
44.66

14. 48
13. 68
14.68
15.69
18. 51

7. 18
6.27
7.03
7.85
9.35

7.30
7.40
7.65
7.84
9. 16

.99
.98
1. 08
1.04
1. 18

1.03
.67
.85
1. 10
1.46

1.94
1.85
2.07
1.92
2.31

5.68
5. 52
5.48
5.65
6. 14

11. 57
11. 68
13. 15
13.82
15. 06

1939
1945
1946
1947
1948
1949

-_ _
___

Excludes agriculture.
Includes trade, service, finance, communications, and construction.
3 Estimates based on anticipated capital expenditures as reported by business in November 1964. Includes adjustments when necessary for systematic tendencies in anticipatory data.
NOTE.—These figures do 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.
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

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, the
professions and nonprofit and other 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. Unlike the latter, 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
equipment expenditures 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, although the comparability will diminish somewhat as the sales, orders and inventories
survey reports for large multi-industry firms are
shifted from a company to a divisional basis. Then

OBE series has a different scope from the Federal
Trade Commission-Securities and Exchange Commission manufacturing, financial reports series,
mainly in that the FTC-SEC estimates of balance
sheet and income statement items covers 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. Anticipated capital outlays, especially for the coming year, are of great
importance in the analysis of business conditions.
Anticipated expenditures for a period differ from
actual expenditures for the same period for a number
of reasons. Nevertheless, except in a few periods in
the past when unanticipated developments of major
importance have occurred, such as the outbreak of
Korean hostilities, both the annual data and the
quarterly anticipatory data 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 sam-

ple for some industries. This is so despite the fact
that within the past few years 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,
especially 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 oj 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. Further elaboration on the methods employed and a qualitative evaluation of the
series for the years 1948-1958 is contained in Statistical Evaluation Reports, Report No. 1, "An Appraisal of OBE-SEC Estimates of Plant and Equipment Expenditures, 1947-1958/' published by the
Office of Statistical Standards, Bureau of the Budget.

EMPLOYMENT, UNEMPLOYMENT, AND WAGES
10. STATUS OF THE 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
or in other pursuits, and into wage and salary
workers, or the self-employed. Workers are also
classified 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.

The information is obtained from a monthly 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
the survey week, were either (a) "At work"—those
who did any work for pay or profit, or those who
worked without pay for 15 hours or more on a family

Status of the Labor Force, 1947-64
(Monthly data.

Seasonally adjusted)

MILLIONS OF PERSONS

TOTAL LABOR FORCE
CIVILIAN LABOR FORGE

NONAGRICULTURAL EMPLOYM

AGRICULTURAL EMPLOYMENT

1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE OF DATA: DEPARTMENT OF LABOR

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 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 after 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 (6) 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.
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 smarted 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 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.
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 limited data
for broad geographic regions. Full comparisons of
the results from the 230- and 330-area supplies—
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

TABLE
Total labor
force (including
armed
forces) 1

Year

10.—Employment Status of the Labor Force
Civilian employment

Civilian
labor
force
Total

Agricultural

Unemployment

Nonagricultural

Number

Thousands of persons 14 years of age and over

Percent of
civilian
labor force

Labor
force
participation
rate 2

Percent

49, 440

49, 180

47, 630

10, 450

37, 180

1,550

3.2

(3)

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, 140
32,110
28, 770
28, 670
30, 990

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

8. 7
15.9
23.6
24.9
21. 7

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

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

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

194019411942
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

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
670

14.6
9.9
4.7
1. 9
1. 2

56.0
56.7
58. 8
62. 3
63. 1

1945
1946
1947
1948
1949

65,
60,
61,
62,
63,

300
970
758
898
721

53,
57,
60,
61,
62,

860
520
168
442
105

52,
55,
57,
59,
58,

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

61.9
57.2
57.4
57.9
58. 0

1950
1951
1952
1953 4
1954

64,
65,
66,
67,
67,

749
983
560
362
818

63,
62,
62,
63,
64,

099
884
966
815
468

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

58.4
58. 9
58. 8
58. 5
58. 4

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

62, 944
64, 708
65,011
63, 966
65, 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

58. 7
59.3
58. 7
58.5
58.3

I960 5
1961
1962 6
1963
1964

73,
74,
74,
75,
76,

126
175
681
712
971

70,
71,
71,
72,
74,

612
603
854
975
233

66,
66,
67,
68,
70,

5,723
5,463
5,190
4,946
4,761

60, 958
61,333
62, 657
63, 863
65, 596

3,931
4,806
4,007
4,166
3,876

5.6
6.7
5.6
5. 7
5. 2

58.3
58.0
57.4
57.3
57. 4

1929

. .

681
796
846
809
357

(1)

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

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.
2
Total labor force as percent of noninstitutional population 14 years of age and over.
3
Not
available.
4
Beginning 1953, labor force and employment figures are not strictly comparable with previous years as a result of the introduction of material from the 1950 Census
into the estimating procedure. Population levels were raised by about 600,000; labor force, total employment, and agricultural employment by about 350,000, primarily affecting the figures for total and males. Other categories were relatively unaffected.
s Data for 1960 include Alaska and Hawaii and are therefore not strictly comparable with previous years. This inclusion has resulted in an increase of about half
a million in the noninstitutional population 14 years of age and over, and about 300,000 in the labor force, four-fifths of this in nonagricultural employment. The
levels of other labor force categories were not appreciably changed.
• Beginning in 1962, comparability with previous years is affected somewhat by the introduction of material from the 1960 census into the estimating procedure.
The level of labor force and employment was lowered by about 150,000.
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.

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 increasing
the number of sample areas to 333. 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.
In December 1961 a modification of the CPS
sample design was begun to gradually incorporate
information obtained from the 1960 Decennial
Census. The transition was completed in March
1963. The number of households interviewed each
month remains at approximately 35,000 but the
number of geographical areas sampled was increased
from 333 to 357. The sampling areas continue to
be stratified according to the following criteria:
(1) Standard Metropolitan Statistical Area or not;
(2) Rate of population change; (3) Percent of population living in urban areas; (4) Percent of population
in manufacturing; (5) Principal industries; (6) Average value of retail trade; (7) Proportion of nonwhite
population. (For further information, see the 1962
Report of the President's Committee to Appraise
Employment and Unemployment Statistics: Measuring Employment and Unemployment, Appendix E:
"Revision of the CPS Sample 1961-1963.")
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 three-fourths
Seasonal Adjustment

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.
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 (prior to 1954
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 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 method used is described in "The BLS Seasonal
Factor Method (1964)," available upon request to
the Division of Statistical Standards, Bureau of
Labor Statistics, Washington, D.C. Factors in use
during 1964 for the years 1963 and 1964 indicate
the range of magnitude of the seasonal fluctuations
in the series.

Factors for the Labor Force and Major Components To Be Used jor the Period 1963-64

Month

January__.
February..
March
April
May
June
July
August
September
October. __
November
December.

Male

Female

Male

Age
14 to
19

Age
20 and
over

Age
14 to
19

Age
20 and

Age
14 to
19

Age
20 and
over

59.8
61. 8
73.2
85.0

91.5
92. 6
96.6
99.6
103.3
106. 6
105. 3
103. 1
103.7
103. 8
100. 8
92.9

25.3
29. 6
29.6
43.9
80.3
212. 2
205. 1
190. 3
145.5
136.7
66.5
35.0

62.0
61. 8
74.6
81. 8
111.6
139.0
129.8
113. 5
132. 0
130. 7
99.0
64. 3

85.2
88.4
85.0
90. 1
98. 8
118. 9
131. 9
130.4
95.8
93. 5
91. 2
90.9

98.4
98.6
98. 8
99.5
100. 1
100.8
100.6
100.9
100.9
101.0
100.6
100.0

94. 7

163. 1
166.4
149. 7
102. 6
98. 4
82.4
62.9

Unemployment

No nagricultural

Agriculture

Female

Male

Female

Age
14 to
19

Age
20 and
over

Age
14 to
19

Age
20 and
over

Age
14 to
19

90.2

99. 1
100.4
101.6
101.5
101.7
98. 4
96.6
97. 1
99. 6
101.0
101.3
101.8

87.9
96.0
93.5
90.3
96.5
182.0
133. 3
98.4
78. 8
78.4
77.4
87.4

127.0
128.6
123.6
105. 2
91. 1
90.2
90. 8
90.6
79.4
78.8
88.8
106.0

75.9
78.3
79.5
81.4
108.0
203.7
143.7
97. 4
88.4
79.2
89.3
75. 1

90. 9

92. 1
89.7
92.3
103.5
122.0
121. 6
94. 8
99. 3
97. 5

106. 1

Age
20 and
over
109. 2
107.9
103. 4
96. 3
93. 8
101. 1
100.7
100. 2
101.0
96.7
99. 9
89. 7

included in the insured unemployment figures. Also,
the qualifications for drawing unemployment insurThe labor force estimates of employment, ob- ance differ from the definition of unemployment used
tained from a sample of households, differ in a in the labor force series. For example, some persons
number of respects from estimates of employment with a job but not at work and persons working only
prepared from reports of employing establishments a few hours during the week are eligible for unemand based on payroll records, such as the Bureau of ployment insurance, but are classified in the labor
Labor Statistics current nonagricultural employment force series as employed. Furthermore, some perseries and the Department of Agriculture estimates sons may be reported to the Census Bureau interof farm employment. Because of these differences viewers as not looking for work even though they
and variability in sampling and response, changes in may be registered at public employment offices,
the various series may not always be consistent. consider themselves available for jobs and may be
The labor force estimates provide information on the eligible for unemployment insurance.
work status of the population: persons employed at
The effect of differences in these series is analyzed
more than one job either because they hold more in Chapter IV, A Comparison of Estimates from the
than one job concurrently or because they changed Different Sources, in Measuring Employment and
jobs during the survey week, are counted only once Unemployment.
and are classified according to the job at which they
USES AND LIMITATIONS
work the greatest number of hours during the week.
Estimates based on reports from business establishOne of the chief advantages of the household
ments and farms, on the other hand, count persons labor force, employment and unemployment estiwho work for more than one establishment as many mates is that they provide the only comprehensive
times as the number of different payrolls on which figures covering the employment status of the whole
their names appear. The labor force estimates relate population. The data are collected monthly and
to all types of workers, including domestic service published promptly. The estimates of unemployworkers, unpaid family workers (working 15 hours ment, in particular, are used as a current indicator
or more during the week) and self-employed persons, of the general health of the economy.
groups which are excluded from nonagricultural emAnother advantage of the household enumeration
ployment series based on establishment reports. On
method of obtaining labor force information is the
the other hand, workers less than 14 years of age
possibility of relating work status to other personal
are excluded from the labor force estimates, whereas
and family characteristics. Classifications are made
the payroll-based series have no age exclusions. An
not only by broad occupation and industry groups,
additional difference arises from the fact that cerbut also by sex, age, and color, by marital status and
tain persons with a job but not at work are included
number of children. For example, changes in the
with the employed in the labor force estimates,
employment of married women, and of married
whereas only part of this group (those receiving pay
women with small children, can be studied. By askwhile away from work) are included in the payroll
ing supplementary questions from time to time other
estimates.
information concerning the family can be similarly
For a number of reasons, the unemployment esti- estimated, such as family incomes and the amount
mates are not directly comparable with statistics of migration during the course of a year. All these
derived from unemployment insurance operations. analyses throw light on the changing size and comIn the first place, some unemployed persons are not position of the labor force.
eligible for unemployment insurance, particularly
Since the estimates are prepared from a relatively
young persons looking for thpir first jobs, domestic small sample, the user should not attach significance
servants, most former State and local government to very small changes. Estimates of sampling variaworkers, agricultural workers, and persons who lost bility in the data are regularly published. The relatheir jobs in firms too small to be covered by the tive standard sampling error for the 333-area sample
various State unemployment insurance laws. Unem- is estimated at about 0.3 to 0.5 percent for summary
ployed persons who have already received all of the estimates of the civilian labor force, total employbenefits to which they are currently entitled are not ment, and nonagricultural employment; and roughly
RELATION TO OTHER SERIES

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 where 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

Summary employment and unemployment figures
are released near the first of the month for the
preceding month by the Bureau of Labor Statistics.
More detailed estimates are available a week or so
later 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) .

11. SELECTED MEASURES OF UNEMPLOYMENT AND PART-TIME EMPLOYMENT
Unemployment Rates
In addition to unemployment rates for all workers,
it is often useful to have rates computed for specific
groups. The rate for experienced wage and salary
workers excludes unemployed new entrants into the
labor force, the self-employed and unpaid family
workers. This rate tends to be about the same as the
overall unemployment rate. The unemployment
rate for married men is sometimes considered to
better indicate "hardship" or "need" than the overall
rate but has many deficiencies for the purpose. For
example, widowers with family responsibilities and
women heads of households are not represented.
Other unemployment ratios for selected groups are
published in Employment and Earnings.

Labor Force Time Lost
This is a measure of productive hours lost to the
economy. Total labor force time lost is computed
on the assumption that those working part time for
"economic" reasons—i.e. reasons aside from personal

preference (see below)—lost the difference between
their average hours and 37.5 hours per week, that
those seeking full-time jobs lost the full 37.5 hours per
week, and that persons seeking part-time work lost
the average hours worked by the voluntary part-time
employed. "Time lost" is derived by subtraction of
time worked from total labor time potentially available. Data are available to compute this measure
only since May 1955. However, data regarding persons seeking part-time work were not available on a
monthly basis until January 1963. This refinement
in the measurement of labor force time lost reduced
the rate an average of .3-. 5 percentage points each
month.

Persons at Work, by Hours Worked
DESCRIPTION OF SERIES

As part of the collection of information on the labor
force, 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

TABLE

11.—Selected Measures oi Unemployment and Part-time Employment
Persons at work in nonagricultural industries
by hours worked per week4

Unemployment rate

Year
All
workers

Experienced
wage and
salary
workers 1

Labor force
time lost
through unemployment
and parttime work 3

Married
men 2

Under 35 hours

Over 40
hours

Part time for
economic reasons

35-40
hours
Total

Usually
work full
time 5

Millions of persons 14 years of age and over

Percent

1940.
1941_
1942_
1943.
1944.

14.6
9.9
4. 7
1. 9
1.2

1945.
1946.
1947.
1948.
1949.

1.9
3.9
3.9
3. 8
5.9

1950_
1951.
1952.
1953.
1954.

Usually
work part
time 6

5. 6
5.2
5.3
4.6
5. 4

31. 5
35.2
38.2
39. 7
38. 1

5. 9

4.2
6.7

36 5
21.4
18. 1
21.2
20.3
19.4
21.0
17. 6
20. 9

5.4
6.0
8. 5
9. 9

6.0
3.7
3.3
3.2
6.0

17. 5
19. 3
19. 4
18. 1
15.7

22.4
23.3
25. 1
26. 3
24. 4

10.2
8.9
7.3
8. 6
11.8

1955.
1956.
1957.
1958.
1959.

5.3
3. 3
3. 1
2. 9
5.6
4. 4
4.2
4. 3
6. 8
5. 5

4.8
4.4
4. 5
7.2
5. 6

2.
2.
2.
5.
3.

4. 8
5. 1
5. 3
8. 1
6.6

18.
18.
17.
16.
17.

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

1960^
1961 _
1962_
1963 _
1964.

5. 6
6. 7
5. 6
5. 7
5.2

5. 7
6.8
5. 5
5. 5
5.0

3. 7
4.6
3. 6
3.4
2.8

6. 7
8. 0
6. 7
6. 4
5.8

17. 7
18. 2
19. 0
19.3
19.3

28.
29.
28.
29.
29.

11.5
11. 1
11. 7
11.9
13.9

1. 2
1. 3
1. 0
1. 1
1.0

. 3
. 5
. 3
. 2
.2

5
3
8
1
6

0
7
6
6
3

7
0
9
4
1

1
2
3

Includes all persons who have worked at a job two weeks or more.
Data for 1955 and 1956 have not been adjusted to reflect changes in the definition of employment and unemployment adopted in January 1960.
This ratio relates man-hours lost to man-hours which would have been worked had there been no unemployment and no involuntary part-time employment.
It isi assumed that the unemployed and part-time workers would have worked 37.5 hours per week.
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 5industrial disputes.
Includes
persons who worked part time because of slack work, material shortages or repairs, new job started, or job terminated.
6
Primarily includes persons who could find only part-time work.
7
Not
available.
8
Average of 8 months (May-December).
9
Data include Alaska and Hawaii beginning 1960 and are therefore not strictly comparable with previous years. This inclusion has resulted in an increase of
about half a million in the noninstitutional population 14 years of age and over, and about 300,000 in the labor force, four-fifths of this in nonagricultural employment.
The 10levels of other labor force categories were not appreciably changed.
If data had not been available as to whether unemployed persons sought full- or part-time work, the rate would have been 6.8 percent in 1963. (See discussion
on p. 36.)
NOTE.—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.
Source: Department of Labor.

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.
37

The average hours worked per week by persons
working part time in n on agricultural industries for
economic reasons differ according to whether such
persons usually work full time or usually hold parttime jobs. Annual averages are available since 1956:
Usually work
full time
24. 0
24. 5
25. 2
23. 8
24. 7
24. 2
23. 6
23. 6

1956
1957
1958
1959
1960
1961
1962
1963

Usually work
part time
18. 2
18. 3
18. 1
18. 3
18. 2
18. 1
17. 3
17. 5

USES AND 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 part-time employ-

ment 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.
The monthly labor force survey is the only source
of information on hours covering all industries. In
analyzing these data, and comparing them with the
results of the establishment survey, 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 page 36 above, under Status of the Labor Force.

12. UNEMPLOYMENT INSURANCE PROGRAMS
ment figures are available for each State for the
State, Federal employee (UCFE), and ex-serviceWeekly data on claims for benefits under employ- men's (UCX) programs. Weekly averages for the
ment security programs, obtained as a byproduct of calendar month are also provided. In addition, for
operations, represent a measure of unemployment the week ending nearest the fifteenth of each month,
among workers covered by the programs. The insured unemployment figures for 145 major labor
series are compiled by the Bureau of Employment market areas are provided, including State programs,
Security from reports from State employment se- UCFE, and UCX.
curity agencies covering State programs, the proInitial claims are notices of the beginning of a
gram of unemployment compensation for Federal period of unemployment for which benefits may later
employees, and the ex-servicemen's unemployment be claimed. These data are also available on a
compensation program. Figures also include World weekly basis for each State. This series provides a
War II veterans who filed for benefits under the measure of the volume of new unemployment emergServicemen's Readjustment Act of 1944, Korean War ing under the State, UCFE, and UCX programs.
veterans filing under the Veterans' Readjustment Data on initial claims are not added to the insured
Assistance Act of 1952, and claimants under the unemployment count, however, since such claims do
Federal and State programs for temporary extension not certify to completed weeks of unemployment.
of unemployment compensation. The data for "all
Exhaustions are a count of the number of claimprograms" also include in the national totals the ants who have drawn the final weekly benefit payprogram of unemployment insurance administered ment to which they are entitled in a given benefit
by the Railroad Retirement Board. "State pro- year under provisions of the State unemployment
grams" exclude the Federal employee, servicemen, insurance laws.
and railroad industry programs.
Covered employment under all programs includes
Insured unemployment represents the number of the employment of workers covered by State procovered workers totally or partially unemployed dur- grams, and the Railroad Retirement Board programs
ing a given week for which they have filed unemploy- from the beginning of the series, the employment of
ment insurance claims. Weekly insured unemploy- Federal government workers since 1955, and the
DESCRIPTION OF SERIES

TABLE

12.— Unemployment Insurance Programs
State programs

All programs

Year

Covered
employment 1

Insured
unemployment
(weekly 2
averages)

Thousands

Insured
unemployment

Benefits
paid 2

Weekly average, thousands

Mil. dol.

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

1950
1951
1952
1953
1954

34,
36,
37,
38,
36,

308
334
006
072
622

720
2,804
1,805
1, 468
2, 479
1,605
1,000
1,069
1,065
2, 048

1955
1956
1957
1958
1959

40,
42,
43,
44,
45,

018
633
436
412
728

1960
1961
1962
1963
1964

46,
46,
47,
48,
49,

334
264
766
435
295

Initial
claims

Insured
unemployment
Exhaus- as percent of
covered emtions
ployment

Percent

Benefits paid

Total

Average
weekly
check

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

518. 7
344.3
344. 1
79. 6
62. 4

10. 56
11. 06
12. 66
13. 84
15. 90

574. 9
2, 878. 5
1, 785. 0
1, 328. 7
2, 269. 8

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

116
189
187
210
322

5
38
24
20
37

2. 1
4.3
3. 1
3. 0
6. 2

445.9
1,094. 9
775. 1
789. 9
1,736. 0

18. 77
18. 50
17. 83
19. 03
20. 48

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

1,373.
840.
998.
962.
2, 026.

1
4
2
2
9

20. 76
21. 09
22. 79
23. 58
24. 93

1,395
1,318
1,567
3,269
2,099

1,
1,
1,
4,
2,

560.
540.
913.
209.
803.

2
6
0
2
0

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

226
226
268
370
281

25
20
23
50
33

4.0
2.8
2. 9
2. 8
5. 2
3. 5
3. 2
3. 6
6. 4
4. 4

1,350.
1,380.
733.
3!512.
2, 279.

3
7
9
7
0

25. 04
27. 02
28. 17
30. 58
30. 41

2,067
2, 994
1, 924
1, 973
1,753

3,
4,
3,
3,
2,

022.
358.
160.
025.
749.

7
1
0
9
2

1,906
2,290
1, 783
1, 806
1, 605

331
350
302
294
268

31
46
32
30
26

4. 8
5. 6
4. 4
4. 3
3.8

2, 726. 7
3,422. 7
2, 675. 4
2, 774. 7
2, 522.4

32. 87
33. 80
34. 56
35. 27
35. 96

534.7
358. 8
350. 4
80. 5
67. 2

For definitions of persons covered under various programs, see accompanying text.
Includes among others, persons covered by Federal and State programs for temporary extension of benefits from June 1958 through June 1962.
Source: Department of Labor.

armed forces since 1958, when the UCX program
became operative. Although coverage of the Federal
and State unemployment insurance programs has expanded until it now includes about 80 percent of all
wage and salary workers in nonagricultural industries, certain groups of workers are excluded—
namely, self-employed persons, unpaid family workers, and persons employed in specific industries, such
as agriculture, domestic service, many nonprofit organizations, and most State and local governments.
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 were 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 and
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 1962, 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 compensated for total unemployment into the amount
of benefits paid for total unemployment.

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-tomoving-average 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 1963
and 1964 are:
January

132.6

February
March
April
May
June

133.4
128. 1
110.4
94. 2
85. 5

July
August
September
October

75. 8

November
December

87. 0
108.3

RELATION TO OTHER SERIES

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 Railroad
Retirement Board to get national totals weekly.
Generally, a continued claim filed in a given week
certifies to unemployment in the preceding week.

For a comparison with total unemployment, see
above, under Status of the Labor Force (p. 35).
USES AND LIMITATIONS

The BES series are derived from administrative
records and provide complete counts of claims-taking
transactions, on a weekly basis and with minimum
delay. The insured unemployment figures serve

Rates of Insured Unemployment Under State Programs, U.S., 1949-64
(Monthly data.

1953
SOURCE O f DATA: DEPARTMENT OF LABOR

1954

87.4
81. 9
75. 2

Percent of covered employment)

1955 1956

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 by-products 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 were disqualified for various reasons, such as voluntary quitting without good cause,
discharge for misconduct, refusal of suitable work,
or temporary illness; persons who were eligible to receive benefits but for one reason or another did 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 level. 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 due to "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 audition,
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 1964,
twenty States had "size-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
40-752 O—65

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, Puerto Rico, 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 well as insured unemployment for
the State, Federal employee and ex-servicemen
programs by States, and nationally for the Railroad
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,
Unemployment Insurance Review. Weekly data back
to July 1945 are available upon request from the
BES. A comprehensive summary of technical notes,
"Insured Unemployment 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.

13. NONAGRICULTURAL EMPLOYMENT
DESCRIPTION OF SERIES

agencies (primarily State employment security
agencies affiliated with the Bureau of Employment
Security). The cooperating State agencies mail
questionnaires to the reporting establishments and
edit them when returned, before passing the information on to the BLS. To eliminate duplicate
reporting, ^the same establishment reports are used
for preparing State, area, and national estimates.
Durable goods manufacturing industries include:
ordnance and accessories, lumber and wood products,
furniture and fixtures, stone, clay and glass products,
primary metal industries, fabricated metal products,
machinery, electrical equipment and supplies, transportation equipment, instruments, and miscellaneous
manufacturing industries. All other manufacturing
industries are included in the nondurable manufacturing estimates. Employees of government-operated
manufacturing establishments, such as ordnance
plants and shipyards, are included under government.

Current monthly series on employment in nonagricultural establishments, with related information
on hours and earnings (see below), are prepared by
the Bureau of Labor Statistics. Employment estimates are published for about 365 separate industry
groups and subgroups as well as 8 major industry
divisions (manufacturing, mining, trade, etc.). Annual average data for all the major industry divisions
are available on a comparable basis back to 1919.
For the 21 major groups in manufacturing, all series
go back to 1947 and for most groups to 1939. Estimates of women employed in manufacturing industries and selected jionmanufacturing industries are
available quarterly.
Employment figures represent the total number of
persons employed in nonagricultural establishments
in the United States during a specified payroll period
which, for all industries except Federal Government
STATISTICAL PROCEDURES
is that including the 12th of the month. Employed
persons include all those who worked during or reCurrent estimates depend on monthly reports from
ceived pay for any part of the payroll period, includ- a sample of employers. The sample of establishing part time as well as full time, temporary as well ments employing collectively about 25,000,000 workas permanent, employees. Workers on an establish- ers, is designed to obtain reports from most if not all
ment's payroll who are on paid sick leave, paid the large establishments in each industry but the
holiday or paid vacation, or who work a part of a proportion of total employment covered varies
specified pay period and are unemployed or on strike considerably from industry to industry. It is high
during the other part are considered employed. (65 percent) in manufacturing, for example, and
Persons on the payroll of more than one establish- much lower in wholesale and retail trade (20 percent)
ment during the pay period are counted each time and service industries (18 percent).
reported. On the other hand, persons are not conIn order to compute total employment from the
sidered employed who are laid off, on leave without sample reports, month-to-month changes in the
pay, or on strike for the entire pay period. Pro- sample establishments are applied to a total employprietors, the self-employed and unpaid family work- ment figure (benchmark) separately for each indusers, and domestic workers in households are not try. The benchmark figures are obtained from
included. Government employment statistics refer sources which, singly or in combination, insure either
to civilian employees only, but include employees of a complete count of employment for the specified
State and local governments as well as Federal.
benchmark period, or an estimate of reasonable
Information on employment, hours and earnings accuracy. This method takes advantage of benchis collected each month from a sample of establish- mark data which are byproducts of other governments under cooperative arrangements with State mental functions.

Employees in Nonagricultural Establishments, 1947-64
(Monthly data.

Seasonally adjusted)

MILLIONS OF PERSONS
14

WHOLESALE AND RETAIL TRADE
DURABLE GOODS MANUFACTURING

NONDURABLE GOODS MANUFACTURING

^r,

1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE OF DATA! DEPARTMENT OF LABOR

Since 1939 the basic sources of benchmark information have been periodic tabulations of employment data by industry compiled by State agencies
from reports of establishments covered under State
unemployment insurance laws. Employment in
small-size establishments exempt from State unemployment insurance laws is based on data obtained
from the Social Security Administration. For industries which are not covered or are largely exempted
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; for private hospitals, American Hospital Association data;
for private schools, colleges, and universities, data
from the U.S. Office of Education and from the
National Catholic Welfare Conference. For charitable and certain other types of nonprofit organizations, benchmarks are derived from statistics on
employment in organizations which elect voluntary
coverage under the Old-Age and Survivors' and Disability Insurance program (OASDI) and from various
studies and surveys. Establishments are classified
into the same industrial groupings for benchmark

purposes as for monthly reporting. The tnos
recent benchmark adjustment was to data fo
March 1962 (published in September 1963).
The sample design used in the BLS establishment
employment statistics program is that of a modified
cutoff sample. In a cutoff design, all establishments
in a category are listed in sequence by number of
employees. A cutoff point is selected in terms of the
number of employees in an establishment, and only
establishments above the cutoff point are included in
the design. At present, sample selection is made by
the cooperating State agencies at the area level
with supplementation for establishments in sections
of the State lying outside of the defined areas. The
national sample therefore is then the sum of all the
State samples.
In cutoff sampling, the general objective is to
obtain a sample comprising a large enough proportion of universe employment so that satisfactory
estimates can be prepared. Since employer participation in the BLS programs is voluntary, some
establishments above the cutoff may decline to
report. To replace these in the design, reports are
solicited from the next largest establishments below
the cutoff until the desired employment coverage is
attained. In addition, to meet the needs of preparing estimates of weekly hours and hourly earnings,

procedures were introduced to secure representation
of the smaller establishments in each industry.
Because of this procedure, and also because sampling
takes place primarily at the level of the metropolitan
areas, which vary greatly in size, the sample includes
a considerable number of small establishments,
together with a very substantial proportion of the
larger establishments in American industry.
In the context of the BLS employment and labor
turnover statistics program, with their emphasis on
producing timely data at minimum cost, a sample
must be obtained which will provide coverage of a
sufficiently large segment of the universe to provide
reasonably reliable estimates that can be published
promptly and regularly. The present sample meets
these specifications for most industries. With its
use, the BLS is able to produce preliminary estimates
each month for many industries and for many geographic levels within a few weeks after reports are
mailed by respondents, and at a somewhat later date,
statistics in considerably greater industrial detail.
Frequent revisions to benchmark estimates prevent
possible biases in the system from cumulating over
an extended period of time. The system works well
for the many important industries which are characterized by large establishments, less well for those
industries composed of large numbers of very small
establishments.
Experience with the program has shown that the
monthly employment data in some industries tend
to have an increasing bias for the successive months
between two benchmarks. Although this error
cannot be adjusted precisely on a current basis,
average adjustment is made through the use of small
bias adjustment factors before publication. Appropriate changes in employment levels are also made,
when necessary, at the next revision to new benchmarks.
Since "cut-off" sampling rather than a probability
design has been used, it is not possible to calculate
the sampling variability of the monthly estimates.
The size of the revision to benchmarks provides a
rough basis for measuring the accuracy of the original
estimates. The comparison made for March 1962,
the last benchmark date, indicated that the estimate
was within 0.7 percent of the benchmark. For
manufacturing, the discrepancy was 0.6 percent; in
other industry divisions the discrepancy was ]. 0
percent or less, except for contract construction,
which was 6.1 percent, and services and miscellane-

ous, which was 2.0 percent. These differences, which
developed over a three-year interval, reflect sampling
errors, response errors, and changes in the industrial
classification of individual firms, which are not incorporated into employment levels until the benchmarks are revised. Changes in industrial classification of firms affect primarily the detailed industry
estimates.
The foregoing description depicts the sampling
procedure upon which historical statistics are based.
In 1964, however, the Bureau of Labor Statistics
adopted a new sample design for its establishment
employment statistics program, stratified for each
industry by size of establishment and based on the
principle of optimum allocation. The new design
incorporates the existing sample but provides for
the selection of additional reports by random methods. For manufacturing industries, the two designs
are approximately equivalent, but for nonmanufacturing industries, particularly for trade and service
industries the implementation of the new design
should ultimately result in improved quality of the
estimates and an expansion of the publication detail.
The new plan will be put into effect as rapidly as
resources permit. The development of a new sampling design became possible because tabulations of
employment data by size of reporting unit covered by
the State Unemployment Insurance programs became available on a regular basis starting in 1959.
The national industry statistics were converted
to the 1957 SIC late in 1961, at the time of the
revision to 1959 benchmark information.
Since 1959, data include estimates for Hawaii and
Alaska.
The seasonal adjustment method used for these
series is an adaptation of the standard ratio-tomoving average method, with a provision for "moving" adjustment factors to take account of changing
seasonal patterns. The seasonal factors, prepared
for "two-digit" manufacturing industries and for the
nonmanufacturing industry divisions, are available
from the Bureau of Labor Statistics on request.
The magnitudes of the adjustments may be judged
from the implicit seasonal adjustment factors for
total nonagricultural employment for 1963. The
adjusted series prepared by summing the aggregates
of the seasonally adjusted components will give
slightly different results from that which might be
obtained from an independent seasonal adjustment
of the total nonagricultural series.

TABLE

13.—Nonagricultural Employment

[Thousands of wage and salary workers]
Nonmanufacturing, private

Manufacturing, private
Year

Total
Total

Durable
goods

Nondurable
goods

Total

Government

Trans- Whole- Finance, Service
Contract porta- sale and insur- and misMining construc- tion and retail
ance,
cellane- Federal
tion
public
trade
ous
and real
utilities
estate

State
and
local

1929

31,339 10, 702

(2)

17, 572

1,087

1,497

3,916

6, 123

1,509

3,440

533

2,532

1930
1931
1932
1933
1934

29, 424
26, 649
23, 628
23,711
25, 953

9,562
8, 170
6,931
7,397
8,501

(2)
(2)
(2)
(2)
(2)

16, 714
15,215
13, 472
13, 148
14, 153

1,009
873
731
744
883

1,372
1,214
970
809
862

3,685
3,254
2,816
2, 672
2,750

5,797
5,284
4,683
4,755
5,281

1,475
1,407
1,341
1,295
1,319

3,376
3,183
2,931
2,873
3, 058

526
560
559
565
652

2,622
2,704
2,666
2,601
2,647

1935
1936
1937
1938
1939

27, 053 9,069
29, 082 9,827
31, 026 10, 794
29, 209 9,440
30, 618 10, 278

(2)
(2)
(2)
(2)
4,715

(2)
(2)
(2)
(2)
5, 564

14,
15,
16,
15,
16,

503
587
476
886
345

897
946
1,015
891
854

1,
1,
1,
1,

912
145
112
055
150

2,786
2,973
3, 134
2,863
2,936

5,431
5,809
6, 265
6, 179
6,426

1,335
1,388
1,432
1,425
1, 462

3, 142
3.326
3,518
3,473
3,517

753
826
823
829
905

2,728
2,842
2,923
3,054
3,090

1940
1941
1942
1943
1944

32, 376 10,
36, 554 13,
40, 125 15,
42, 452 17,
41, 883 17,

985 5,363
192 6,968
280 8, 823
062 11,084
328 10, 856

5, 622
6, 225
6,458
6,518
6,472

17, 189
18, 702
19, 452
18, 771
18,511

925
957
992
925
892

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

3, 038
3,274
3,460
3, 647
3,829

6,750
7,210
7, 118
6,982
7,058

1,502
1,549
1,538
1,502
1,476

3,681
3, 921
4,084
4, 148
4,163

996
1,340
2,213
2,905
2,928

3,206
3,320
3,270
3, 174
3, 116

1945
1946
1947
1948
1949

40, 394 15,
41, 674 14,
43, 881 15,
44; 891 15,
43, 778 14,

524
703
545
582
441

9,074
7,742
8,385
8,326
7,489

6,450
6, 962
7, 159
7,256
6, 953

18, 925
21, 376
22, 862
23, 659
23, 481

836
862
955
994
930

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

3,906
4,061
4, 166
4, 189
4, 001

7,314
8,376
8,955
9,272
9,264

1,497
1,697
1,754
1,829
1,857

4, 241
4,719
5,050
5,206
5,264

2,808
2, 254
1,892
1,863
1,908

3, 137
3,341
3,582
3,787
3,948

1950
1951
1952
1953
1954

45,
47,
48,
50,
49,

8,094
15,241
16,393 9,089
16, 632 9,349
17, 549 10, 110
16,314 9,129

7,147
7,304
7,284
7,438
7, 185

23,
25,
25,
30,
25,

955
067
585
648
957

901
929
898
866
791

2,333
2,603
2,634
2,623
2,612

4,034
4,226
4,248
4,290
4,084

9,386
9,742
10, 004
10, 247
10, 235

1,919
1,991
2,069
2, 146
2,234

5,382
5,576
5,730
5,867
6,002

1,928
2,302
2,420
2,305
2, 188

4,098
4,087
4, 188
4,340
4,563

1955
1956 3
1957 ___
19583___
195934__

50, 675 16,882
52, 408 17, 243
52, 894 17, 174
51,368 15,945
53, 297 16, 675

9,541
9,834
9,856
8,830
9,373

7,340
7,409
7,319
7, 116
7,303

26,
27,
28,
27,
28,

879
887
104
584
539

792
822
828
751
732

2,802
2,999
2,923
2,778
2,960

4, 141
4,244
4,241
3,976
4,011

10, 535
10, 858
10, 886
10, 750
11,127

2,335
2,429
2,477
2,519
2,594

6,274
6,536
6,749
6,811
7, 115

2,187
2,209
2,217
2, 191
2,233

4,727
5,069
5,399
5,648
5,850

19603___
196133 __1962 ___
1963 3 _-_
1964 3 5__

54, 203 16, 796
53, 989 16, 326
55, 515 16, 853
56, 643 17,005
58, 178 17, 301

9,459
9,070
9,481
9,625
9,848

7,336
7,256
7,372
7,380
7,454

29, 054
29, 069
29, 772
30, 439
31, 376

712
672
650
635
636

2,885
2,816
2,902
2, 983
3, 105

4,004
3,903
3,906
3, 914
3,974

11,391
11,337
11,566
11,803
12, 184

2,669
2,731
2,800
2,873
2,945

7,392
7,610
7,947
8,230
8, 532

2,270
2,279
2,340
2,358
2, 348

6,083
6,315
6,550
6,841
7, 153

222
849
825
232
022

1
Includes all full- and part-time wage and salary workers in nonagricultural establishments who worked during or received pay for any ^
Jr_.tf
including the 12th 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 nonagricultural employment of the civilian labor force which include proprietors, self-employed persons,
unpaid family workers, and domestic servants, which count persons as employed when they are not at work because of industrial disputes, bad 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
Not available.
3
State
and local government and total series revised in December 1964.
4
Data include Alaska and Hawaii beginning 1959. This inclusion has resulted in an increase of 212,000 (0.4 percent) in the nonagricultural total for the March
19595benchmark month.
Preliminary.

NOTE.—Monthly data available beginning January 1939 and annual from 1919 for all major industry divisions.
Source: Department of Labor.

JS'{rMon?L^Ona^CW^ra/pany
January
February
March
April
May
June

98. 4 July
98. 1 August
98. 3 September
99. 3 October
99. 8 November
100. 7 December
RELATION TO OTHER SERIES

differ

substantially from those in which each

establishment ot the company has been assigned to
100. 1
the
industry of its principal activity. (See Corporate
100. 6
Profits,
above, p. 20.)
101.3
101.3
101.1
101. 5

USES AND LIMITATIONS

Current employment statistics are widely used as
a timely indicator of changes in economic activity
in various sectors of the economy. Comparable information for a large number of detailed industries
is provided within a few weeks. Furthermore, because of the promptness with which basic information is supplied in considerable industry detail, these
estimates are frequently incorporated in other Federal statistical series, particularly in making current
estimates of production, productivity, and national
income.
The publication of comparable State and local area
estimates by the cooperating State agencies using
the same concepts and methods provides a means
whereby business trends can be followed for all
States and the District of Columbia and for 151
labor market areas.
The employment estimates are not all of uniform
quality, however, either on a national or a local area
basis. In general, those for manufacturing industries
are most reliable and extensive industry detail is
shown. For certain nonmanufacturing industries,
especially in the services sector, the estimates are
less reliable and little industry detail is presented.

A comparison between the series discussed above
and the nonagricultural employment estimates compiled as a part of the labor force series can be found
in the section on Employment Status of the Labor
Force, see above (p. 35).
In addition to total employment in each industry,
BLS also prepares estimates of production worker
employment for mining and manufacturing industries
for construction workers in contract construction,
and for nonsupervisory workers in some or all industry components of the other nonmanufacturing
divisions except government. These estimates are
comparable with the average hours and earnings
series (see below) which are prepared from information reported on the same questionnaires as the employment figures.
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:
REFERENCES
(1) for manufacturing, the Standard Industrial Classification, 1945, and (2) for nonmanufacturing, the
Monthly summary data first appear in The
Industrial Classification Code, Social Security Board, Monthly Report on the Labor Force. The basic
1942. Beginning with January 1958, national, State monthly release for the employment, hours, and
and area series are classified under the revised Stand- earnings series is the Employment and Earnings,
ard Industrial Classification, 1957.
which contains national, State, and area estimates
In general, BLS employment estimates are com- and explanatory notes. The national employment,
parable with other data collected from establish- hours and earnings series for 13 months are also
ments, such as employment, production, and similar reprinted in the Monthly Labor Review. Continuous
data obtained by the Census Bureau in the manu- data for the entire history of the national series prior
facturing censuses and annual surveys. Some differ- to June 1963 are available in Employment and Earnences will be found, however, especially for individual ings Statistics for the United States, 1909-62, BLS
industries, caused chiefly by differences in definitions Bulletin 1312-1. This is the second of a series of
of the industries covered, in the business units con- annual compendium volumes. More detailed techsidered parts of an establishment, and in the indus- nical notes are available on "Measurement of
trial classification of some establishments.
of Employment, Hours, and Earnings in NonThe BLS establishment-based series are not com- agricultural Industries." A Guide to Employment
parable with those based on reports from companies Statistics oj BLS (1961) is also available upon
because the industry totals that result when a single request. The Guide shows the beginning date of
industry classification is assigned to an entire com- each industry series published on a national basis

and gives each industry definition, both on the 1957
Standard Industrial Classification and on the
classification structure used prior to conversion to
the 1957 SIC.
Historical State and area data from the earliest
date of availability for all industry series published
by cooperating State agencies are available in

14.

Employment and Earnings Statistics for States and
Areas 1939-63, BLS Bulletin 1370-1. This is the
second of a series of annual publications presenting
State and area data, and it contains more than 6,000
series on payroll employment by industry and over
3,000 series of hours and earnings of production
workers by industry.

WEEKLY HOURS OF WORK—SELECTED INDUSTRIES

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 manhours for which pay is received by production or nonsupervisory workers, including hours for holidays,
vacation time, or other employer-paid leave. Data
on average weekly hours, weekly earnings and hourly
earnings are regularly published for 21 major manufacturing groups and about 240 manufacturing
industries, as well .as about 65 nonmanufacturing
groups and divisions. Many of the nonmanufacturing industries for which estimates are not prepared
are characterized by small establishments, creating

special collection problems; for other industries, such
as insurance and real estate, collection presents
difficult problems as to definition. For overtime
hours (hours in excess of regular hours and for which
premium payments were made) series are prepared
for 143 manufacturing industries.
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.

Average Weekly Hours in Selected Industries, 1947-64
(Monthly data for production workers or nonsupervisory employees.

Seasonally adjusted)

HOURS OF WORK
44

DURABLE GOODS MANUFACTURING
NONDURABLE GOODS MANUFACTURING

1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE OF DATA: DEPARTMENT OF LABOR

TABLE

14.—Weekly Hours of Work in Selected Industries

[Hours per week]
Manufacturing
Year

Total

-__

_ _ _ _ _ _ _ _ _ _

1935
1936
1937
1938
1939

- ______
_____
_ _
--_

1940
1941
1942
1943
1944

1945
1946
1947
1948
1949
1950
1951
1952
1953
1954

Nondurable
goods

(3)

44. 2

1929
1930 _
1931
1932
1933
1934

Durable goods

_ .

_ _ _ _ _ _ _ _
_ _
- _
_ __
_

_ _
_ _ _

_ __
- _
__

1955
1956

1957
1958 4
1959

_ _

1960
1961
1962
1963 5
1964

________

Contract construction

Retail trade 2

42. 1
40. 5
38.3
38. 1
34. 6

32. 5
34.7
33. 8

41. 9
40.0
35. 1

36. 6
39. 2
38. 6
35. 6
37. 7

37. 2
40. 9
39. 9
34. 9
37. 9

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

38. 1
40. 6
43. 1
45.0
45. 2

39.2
42.0
45.0
46. 5
46. 5

37.0
38.9
40.3
42. 5
43. 1

43.2
42. 8
41. 8
40. 9
41.0

43. 5
40. 3
40. 4
40. 0
39. 1

44. 0
40. 4
40. 5
40. 4
39. 4

42. 3
40. 5
40. 2
39. 6
38. 9

38. 2
38. 1
37. 7

40. 9
41.3
41 0
40 9
41. 0

40.
40.
40.
40.
39.

41.
41.
41.
41.
40.

1
5
5
2
1

39. 7
39. 5
39. 7
39. 6
39. 0

37. 4
38. 1
38. 9
37. 9
37. 2

41
40.
40.
39
39.

1
9
5
8
7

40. 7
40. 4
39. 8
39. 2
40. 3

41. 3
41. 0
40. 3
39. 5
40. 7

39. 9
39. 6
39. 2
38. 8
39. 7

37. 1
37. 5
37.0
36. 9
37.0

39.
39
38.
38.
38.

6
1
7
7
7

39. 7
39. 8
40. 4
40. 5
40. 7

40. 1
40. 3
40. 9
41. 1
41. 4

39. 2
39. 3
39. 6
39. 6
39. 7

36. 7
36. 9
37.0
37. 3
37. 1

38. 5
38. 1
37. 9
37. 8
37.4

5
6
7
5
6

/3\
/3\
/3N

/g\
/3\
/3\

43. 4

1 For manufacturing, data relate to production and related workers; for contract construction, to construction workers, and for retail trade to nonsupervisory
workers.
Hours are hours paid for including paid holiday, vacation, and sick-leave hours.
2
Data exclude eating and drinking places.
s Not available.
* Data include Alaska and Hawaii beginning 1959. This inclusion has not significantly affected these weekly hours series.
s Preliminary.
NOTE.—Monthly data on average weekly hours available beginning 1932 for manufacturing industries, 1947 for contract 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.
Source: Department of Labor.

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:

Average Weekly Hours—Seasonal Adjustment Factors
January
February
March
April
May
June

99. 2
99. 2
99. 3
99. 4
100. 1
100.7

July
August
September
October
November
December

100. 3
100. 5
100. 1
100.3
100.1
100.8

USES AND LIMITATIONS

Changes in hours worked supplement the information on employment, since frequently hours worked
are affected even before employment by changes in
economic activity. Hours in manufacturing are an
important leading indicator. 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. 52).
Important limitations of the average hours series
are (1) that the figures refer only to production or
nonsupervisory workers and (2) that summary series

are not available for all nonagricultural workers because data are not collected for a number of important industries.
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 average gross hours and average
overtime hours for a large number of industries,
BLS also publishes indexes of aggregate weekly
man-hours in industrial and construction activities.
REFERENCES

See page 46, under Nonagricultural Employment.

15. AVERAGE HOURLY AND WEEKLY EARNINGS—SELECTED INDUSTRIES
DESCRIPTION OF SERIES

STATISTICAL PROCEDURES

The payroll figures on which these averages are
based are collected by BLS from employers on the
same form with the employment and hours figures,
described above. They are reported before deductions for taxes, social insurance, etc. They
include pay for overtime, holidays, vacations, and
sick leave paid directly by the firm but exclude
retroactive pay and bonuses, unless earned and paid
regularly each pay period.

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.
The series "adjusted hourly earnings" is constructed to show the relation between straight-time

Average Hourly Earnings in Selected Industries, 1947-64
(Monthly data for production workers or nonsupervisory employees)

2.50

DURABLE GOODS MANUFACTURING
2.00

1.50

NONDURABLE GOODS MANUFACTURING
1.00

1947

1948 1949 1951 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE OF DATA: DEPARTMENT OF LABOR

TABLE

15.—Average Hourly and Weekly Earnings—Selected Industries

Average hourly earnings—current prices

Manufacturing industries

Manufacturing industries
Year
All

1929

$0. 560

1930
1931
1932
1933
1934

.546
. 509
. 441
.437
. 526

1935
1936
1937
1938
1939

.
.
.
.
.

Average weekly earnings—current prices

Contract
conRetail
Durable
Nonstruc- trade 2
goods durable
tion
goods

All

Contract
conRetail
Durable
Nonstruc- trade 2
goods durable
tion
goods

$24. 76

$26. 84

$22. 47

23.00
20. 64
16. 89
16. 65
18.20

21.42
20. 98
15. 99
16.20
18. 59

21.40
20.09
17. 26
16. 76
17. 73

19. 91
21. 56
23. 82
22.07
23. 64

21.24
23. 72
26. 61
23.70
26. 19

18.
19.
21.
20.
21.

494
518
559
606
653

24. 96
29.48
36. 68
43. 07
45. 70

(•)

(5)

$0. 492
.467
. 550

$0. 412
.419
. 505

(5)
(5)

(5)

(5)
(5)

(5)

77
57
17
65
36

28.07
33. 56
42. 17
48. 73
51. 38

21. 83
24. 39
28.57
33.45
36. 38

(5)

44. 20
43. 32
49. 17
53. 12
53. 88

48. 36
46. 22
51. 76
56.36
57. 25

37.48
40. 30
46.03
49. 50
50. 38

. 571
. 580
.. 667
. 679
. 691

.
.
.
.
.

520
519
566
572
571

(5)

1940
1941
1942
1943
1944

. 655
. 726
. 851
. 957
1.011

. 716
. 799
. 937
1.048
1. 105

.
.
.
.
.

590
627
709
787
844

(5)

1945
1946
1947
1948
1949

1.016
1. 075
1. 217
1. 328
1. 378

1,099
1. 144
1. 278
1.398
1. 453

. 886
. 995
1. 145
1. 250
1. 295

(5)

$1. 541
1. 713
1. 792

. 699
. 797
. 901
. 972
1. 015

1950
1051
1952
1953
1954

1. 440
1. 56
1. 65
1. 74
1. 78

1. 519
1. 65
1. 75
1. 86
1. 90

1. 347
1. 44
1. 51
1. 58
1. 62

1. 863
2. 02
2. 13
2. 28
2.39

1. 050
1. 13
1. 18
1. 25
1. 29

58.
63.
67.
70.
70.

32
34
16
47
49

62.
68.
72.
76.
76.

43
48
63
63
19

53.
56.
59.
62.
63.

48
88
95
57
18

1955
1956
1957
1958
1959 6 --.

1. 86
1. 95
2.05
2. 11
2. 19

1.99
2. 08
2. 19
2. 26
2.36

1. 67
1. 77
1. 85
1. 91
1. 98

2.
2.
2.
2.
2.

45
57
71
82
93

1. 34
1. 40
1.47
1. 52
1. 57

75.
78.
81.
82.
88.

70
78
59
71
26

82.
85.
88.
89.
96.

19
28
26
27
05

1960
1961
1962
1963
19647___

2. 26
2.32
2. 39
2. 46
2. 54

2. 43
2.49
2.56
2. 64
2. 71

2.
2.
2.
2.
2.

3. 08
3. 20
3. 31
3.41
3. 55

1. 62
1. 68
1. 74
1. 80
1.87

89.
92.
96.
99.
103.

72
34
56
63
38

97.44
100. 35
104. 70
108. 50
112. 19

05
11
17
22
29

(5)
(5)
(5)
(5)

(5)

$0. 484
.
.
.
.
.

Index of
adjusted
hourly
earnings,
1957-59
=
100 3

544
550
617
620
627

(5)

Manufacturing
industries
Average
weekly
earnings,
1963
prices 4

$44. 21

(5)

()
(5)
(5)
(5)
(5)

42.
41.
37.
39.
41.

(5)

44. 44
47. 59
50. 79
47. 98
52.07

(5)

$21.01
21.
22.
23.
24.
26.

34
17
37
79
77

32. 2

20
53
87
36
65

33. 4
37. 5
40. 8
43.7

54. 62
61. 29
68. 95
76.23
79.48

28. 59
32. 92
36. 94
39. 75
41.62

45. 5
50.4
57. 8
63. 2
66. 1

75. 17
68. 01
67. 45
67.67
69. 25

69. 68
76. 96
82. 86
86.41
88.91

43.
46.
47.
49.
51.

16
22
79
75
21

68.
73.
77.
81.
84.

2
6
4
6
3

74.
74.
77.
80.
80.

29
69
46
72
38

66. 63
70.09
72. 52
74. 11
78. 61

90.90
96. 38
100. 27
103. 78
108. 41

53.
54.
56.
58.
60.

06
74
89
82
76

86.
91.
96.
100.
103.

9
5
2
2
5

86.
88.
88.
87.
92.

61
72
88
62
81

80.36
82. 92
85. 93
87. 91
90. 91

113. 04
118.08
122. 47
127. 19
131. 71

62. 37
64.01
65. 95
68. 04
69. 94

106.
109.
112.
115.
118.

8
8
5
4
4

92.
94.
97.
99.
102.

88
51
73
63
00

(5)
(5)
(5)
(5)
(5)
(5)

$58. 87
65. 27
67. 56

(5)

1
For manufacturing, data relates to production and related workers; for contract construction, to construction workers; and for retail trade to nonsupervisory
workers.
2
Excludes eating and drinking places.
3 Earnings in current prices, adjusted to exclude overtime and interindustry shifts (April used for 1941-46).
4
Earnings in current prices divided by consumer price index on a 1961 base.
5
Not available.
67 Data include Alaska and Hawaii beginning 1959. This inclusion has not significantly affected these earnings series.
Preliminary.
NOTE.—Average hourly earnings monthly data available beginning 1932 for manufacturing industries, 1947 for contract 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.
Average weekly earnings monthlv data available beginning June 1914 for all manufacturing industries, 1923 for durable and nondurable goods manufacturing,
1947 for building construction, and 1939 for retail trade. Annual data for all manufacturing industries also available for the years 1909 and 1914.

Source: Department of Labor.

hourly earnings in the base period, 1957-59, and
other years on the assumption that the proportion
of workers in each industry remains unchanged.
The object is to show changes in pay scales unaffected
by such factors as variations in the amount of overtime pay or shifts of workers into higher (or lower)
paying industries.
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 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. While they
represent what the worker has earned for the week,
they do not represent take-home pay, since they are
subject to deductions for income and social security
taxes, group insurance, occupational supplies, union
dues, or other items.
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. 46). Estimates of hourly earnings excluding
overtime and of net spendable weekly earnings in
manufacturing and earnings in 1957-59 dollars for
selected industries are also published in Employment
and Earnings.

PRODUCTION AND BUSINESS ACTIVITY
16 and 17. INDUSTRIAL PRODUCTION AND PRODUCTION OF
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 adjusted to 1957-59 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
indexes were based on quantity and value data for
thousands of individual products covered in the
Censuses of Manufactures for 1947 and 1954.
Benchmark indexes 1954 to 1958 based on the 1958
Census of Manufactures are now being calculated.
Annual indexes which are 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.
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 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, nonduable 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 the 1957-59 base period,
for 48 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 Commission. It accounted, in the
1957-59 base period, for 38 percent of the total
index. Mining activities, accounting for 8 percent
of the index in this same period, include coal and
metal mining, crude oil and natural gas extraction,
oil and gas well drilling, and production of sand,

equipment in the industry grouping, is in equipment
in the market grouping.
The consumer goods grouping, accounting for 32
percent of the total index in the 1957-59 period,
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 which comprised the consumer durables sector of the index previous to the
1959 Revision and the combination of these two is now
published as a supplementary grouping of the regular
production index. The equipment series, accounting
for 15 percent of the total in 1957-59, 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
27 percent of the total index in 1957-59, include all
industries producing materials or components used

clay, and other nonmetallic minerals. Utility output of electricity and gas includes both private- and
government-owned establishments, and accounted
for 5 percent of the total index in the 1957-59 base
period.
In the table "Production of Selected Manufactures" nine series selected from the component
group indexes are shown for the period 1947-1961.
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
Industrial Production, 1947--64
(Monthly data.

Seasonally adjusted)

INDEX: 1957-59 = 100
140
130

120

100

NONDURABLE MANUFACTURING

DURABLE MANUFACTURING

.1I..I..I1.

..lulnl.i

i.hih.l..

nliiliiin

1947

1948

1949

1956

iil.il.ilit

,. l i l l n l . . i i l i i l i i l l l

1951 1952

1953

.iliiliilil

1954

i t l . i 1 1 1 1 . 1 1 1 I 1 1 I 1 1 I 1 1 i l l . . 11 i t 11 , . I n t n l . ,

1955

1956

MIIII.III.

.. f . . I • 1 1 > . .,! i . 1 1 . 1 . .

n l . i L l . r

,,l..l,.l..

1957 1958 1959 1966 1961 1962 1963

..I..I..I

1964

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

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 26 percent of the
total in 1957-59, include business fuel and power,
containers, and other business supplies as well as
textiles, industrial chemicals, 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, 1957-59, 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 indi-

vidual 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
is responsible for the month-to-month changes 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 production and the
cost of materials or supplies consumed—in individual
industries in 1957 adjusted to 1957-59. The valueadded 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 value-added figures for manufacturing were obtained mainly from the Census Bureau
Annual Survey of Manufactures for 1957. Weights
for utility series were 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 1957-59
proportions (or the relative importance of the major
groupings based on the 1957 weights) shown here
for major groupings are given in detail in Industrial
Production—1957-59 Base, Board of Governors of
the Federal Reserve System.

Relative Importance of Major Groupings in the Index of Industrial Production—1957-59 Comparison Basis
Industry group

Total index
Manufacturing, total
Durable
Nondurable
Mining
Utilities

1957-59 base
period proportion
100. 00
86.45
48.07
38.38
8.23
5.32

Market group

Total index. _.
Final products, total
Consumer goods
Equipment, including defense
Materials

1957-59 base
period proportion
100.00
47.35
32.31
15.04
52.65

Consumer Goods
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

6.95
5.37
14. 80
10. 19
1.73
9.03

Automotive products
Home goods
Apparel, including knit goods and shoes
Consumer staples

3.21
4. 59
5.41
19. 10

Equipment
Business equipment

Defense equipment
7.60
Materials
8. 17
11. 54
11. 07 Durable goods materials
Nondurable materials

11.63
3.41

26.97
25. 23

16.—Industrial Production

TABLE

[1957-59=100]
Market groupings

Industry groupings

Year

Total
industrial
production

Final products

Manufacturing

Materials

Mining Utilities
Total

Durable

Nondurable

Total

1929_

1930_
1931.
1932_
1933.
1934.

32
27
21
24
27

32
26
20
24
26

28
20
12
16
19

35
33
29
33
34

47
40
34
39
40

13
13
12
12
12

1935_
1936_
1937_
1938.
1939.

31
36
40
31
38

31
26
40
31
38

24
31
35
23
31

37
42
44
39
45

44
50
57
49
54

13
15
16
17
18

1940_
1941_
1942_
1943_
1944_

44
56
69
83
82

47
58
64

60
65
67
69
74

20
23
26
28
30

1945_
1946_
1947_
19481949_

71
60
66
68
65

73
60
66
69
65

78
55
64
67
61

66
65
67
70
68

73
72
80
84
75

31
32
37
41
43

1950_
19511952.
1953_
1954.

75
81
84
91
86

76
82
85
93
86

74
84
89
100

76
79
80
84
84

83
91
91
93
90

50
56
61
67
72

1955.
19561957.
1958_
1959_

97
100
101
94
106

97
100
101
93
106

102
104
104
90
106

92
95
97
97
107

99
105
105
96
100

19601961_
1962_
1963.
1964_

109
110
118
124
132

109
110
119
125
133

109
107
118
125
133

110
113
120
125
132

102
103
105
108
111

2
2
2

44
58
73
89
86

40
58
80
103
101

2
2
2

2 7!

P)
P)
0)
0)
P)
P)
p)
p)
p)
P)
P)
P)
P)
P)
P)
P)
P)
P)

Consumer
goods

P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P) 67

Equipment

P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)
P)

69
69

55
68
52

67
70
65

73
79
84
90
86

79
78
80
85
84

56
78
94
101
89

77
84
84
93
86

80
88
94
98
108

94
98
99
95
106

93
96
97
96
107

95
104
105
91
104

102
102
93
105

116
122
131
140
150

110
111
120
125
132

111
113
120
125
131

108
108
120
124
132

108
108
117
124
132

64
67
65

1
Not available.
2 Indexes should be used with caution because of special conditions due to wartime activity.
Source: 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 month-to-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 76
series or groupings of series, about half of them in
the industry classification and half in the market
classification. Seasonally adjusted indexes for larger
55

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
been made of variations of the Census Method II
programs for seasonal adjustment by electronic computer, which are a mechanical version of the ratio-tomoving-average 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.

index, and since these changes were largely offsetting, the total index and its major divisions of market
and industry groupings were not generally affected.
Seasonal adjustment factors were revised generally
beginning in 1959 and through 1961, though in a few
series some revisions were carried back to 1957 and
1958 as well. This resulted in substantially modified cyclical patterns for some of the component
indexes and a slight raising of the first quarter and
a slight lowering of the third quarter in the total
index.
RELATION TO OTHER SERIES

As an important general economic indicator, the
index of industrial production is related in varying
degrees to other general economic indicators. Among
REVISIONS IN THE INDEX
the more important series to which the index is closely
related
are those on manufacturers' sales. It should
Since its first publication in 1927, the index has
be
observed,
however, that these are value or dollarundergone several major revisions. A major revision
volume
series,
and are therefore influenced by price
was completed in 1959, with revised indexes and new
as
well
as
quantity
changes. The industrial producgroupings carried back to January 1947. The printion
index,
on
the
other
hand, being a measurement of
cipal changes were: (1) adjustment of individual
physical
volume,
registers
quantity changes only.
monthly series to levels shown by Census of ManuDifferences
in
movement
between
the production
factures and other data; (2) broadening of coverage
index
for
manufacturing
and
the
shipment
series for
to include electric and gas utility output, and intromanufacturing
are
also
possible
for
other
reasons:
duction of new component series in a number of
production
differs
from
shipments
because
of
changes
manufacturing and mining industries; (3) introducin
factory
inventories;
the
production
index
uses
the
tion of new market groupings of production series
establishment
as
the
unit
for
the
industry
classificadescribed above; (4) selection of 1957 as weight year
for the period beginning with January 1953, and as tion, whereas the shipment series uses the company
a new reference base period; the old reference base division as the unit; and the production index uses
of 1947-49 was continued through October 1962 in value added as weights for the series, whereas the
addition to the new one for major groupings of the shipments series implicitly uses value of shipments.
index; and (5) adoption of the latest (1957) version
The "consumer" and "business equipment" market
of the Standard Industry Classification, prepared groupings of industrial production refer to many
under the auspices of the U.S. Bureau of the Budget. of the same goods as the consumer goods and proThe 1962 revision of the index of industrial pro- ducers' durable equipment categories of the gross
duction shifted the comparison base from 1957 to an national product. Even after these gross national
average of the years 1957-59. At the same time product categories are deflated for price changes,
the index was updated for the period 1957 to 1961 however, there are conceptual and statistical differby a general revision in seasonal factors and interim ences from the production series which should be
adjustments in the levels of eight series (see Federal kept in mind in comparing the two. The production
Reserve Bulletin, October 1962). The 1957 value series include production for inventory, for export,
added continues to be the basis for the weights. and for government purchase as well as for domestic
Shifting the comparison base has raised the total business and consumers, and are weighted on the basis
index by less than 1 percent. The annual levels of of value added by industry in 1957. The deflated
eight series in the apparel, food, and chemical groups consumer goods and equipment expenditure series
were revised since 1957 to take account of addi- in the gross national product include imported goods
tional information based on more comprehensive but not goods for export, inventory, or government
annual data. These eight series of the 207 com- use. They are implicitly weighted on the basis of
ponent series account for about 5 percent of the total final purchase price in 1954, including value added

TABLE

17.—Production of Selected Manufactures
[1957-59=100]

Durable manufactures

Year

Primary
metals

Nondurable manufactures

Fabricated
Transportation
metal
Machinery
equipproducts
ment

Lumber
and
products

Textiles,
apparel,
and
leather

Paper
and
printing

Chemicals, Foods,
petroleum, beverages,
and
and
tobacco
rubber

1947
__
1948 . . _
1949 _

91
94
79

76
77
70

65
67
59

43
47
47

88
92
81

81
85
81

67
69
69

48
51
49

81
80
81

1950
1951
1952
1953 _ _
1954 _._ .

100
109
99
113
91

85
91
89
100
90

73
83
92
101
88

56
63
73
92
84

98
98
97
102
100

89
87
90
91
87

77
79
78
83
85

61
67
70
75
75

84
85
87
88
90

1955
1956 _
1957
1958
1959

118
116
112
88
100

98
99
102
93
106

97
107
104
89
107

102
97
106
90
104

110
105
96
96
109

96
98
97
95
108

93
97
98
97
105

87
91
96
96
109

93
97
97
99
104

1960 __

101
99
105
113
128

108
107
117
123
133

111
110
124
129
141

108
104
118
127
131

102
101
106
109
113

108
108
115
119
125

109
112
117
120
128

114
119
131
142
152

107
110
113
117
120

1962
1963
1964

Source: Board of Governors of the Federal Reserve Systetn.

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 on
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 product
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 Reserve
System, Washington, D.C., 20551. Each issue
shows all the groupings and individual indexes published on a 1957-59 base. Indexes on a 1957-59
base for groupings, but not for individual series, are
shown in the monthly Federal Reserve Bulletin. A
detailed description, including historical tables for
the revised indexes on the new base from January
1947 through December 1961 is found in a Federal
Reserve Board publication, Industrial Production—
1957-59 Base.

57
40-752 0—65

18. WEEKLY INDICATORS OF PRODUCTION
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 97 percent of the industry, giving actual
production for the preceding week.
The Institute publishes the weekly series each
Monday, showing production for the preceding week,
year to date, and preceding year to date. Also
issued are indexes for each of the 11 steelmaking
districts, but only for the previous week's production.
The Institute also publishes each month detailed production of steel by types of furnaces, whether ingots
or castings, and volume of carbon alloy and stainless
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 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 an "Index of
Ingot Production, 1957-59 = 100." The index provides an accurate comparative measure of the volume of steel production from one period to another.
The weekly series was initiated in October 1933.
Comparable annual data on steel production are
available from 1867.

Electric Power Distributed
The weekly series on electric power distributed is
compiled by the Edison Electric Institute. It may
be defined as the energy sold to ultimate consumers
plus energy lost, including unaccounted-for losses; or
as net generation by the total electric utility industry
plus net import over international boundaries plus
purchases from industrial sources. It includes operations of all private, municipal, cooperative, and
governmental enterprises engaged in the production

or distribution of electricity for the use of the public;
it does not include energy generated by captive
plants of industrial establishments.
The weekly figures are collected by the Institute
by telegraph from approximately 110 reporting utilities (either companies or groups of interconnected
companies) representing about 95 percent of the
total energy available for public consumption. The
estimated 100-percent production is obtained by
applying to the summarized reported data an adjustment factor derived from the ratio of the monthly
output of both companies reporting for the week to
the output of all utilities as collected and presented by
the Edison Electric Institute for the previous month.
The weekly series is useful in economic analysis,
because it is available promptly and is a reliable
measure of net energy distribution to the public
supply. It is not a sensitive measure of important
changes in industrial activity, however, since it includes energy used for nonindustrial purposes, such
as air-conditioning loads, requirements of the Atomic
Energy Commission, and sales to residential consumers.
The weekly series is issued each Wednesday by
the Edison Electric Institute. The Institute also
publishes monthly research statistics, including additional data on source and disposal of energy, for
which the data on generation are obtained from the
Federal Power Commission. The Federal Power
Commission issues a monthly bulletin on Electric
Power Statistics, with monthly and annual data on
production, fuel consumption, requirements, and
supply.
The weekly series was initiated in 1928. Annual
data on the production of electrical energy are
available from 1902.

Bituminous Coal Mined
The series on production of bituminous coal is
compiled weekly by the Bureau of Mines, Department of the Interior. It includes bituminous coal
and lignite, and is a very close approximation of total
production in the United States.
The figures are estimated on the basis of carloadings and river shipments. The method of estimation consists of raising the rail and river shipment
figures by factors to represent the coal that is not
transported by rail or river, such as truck shipments,

TABLE

18.—Weekly Indicators oj Production
[Weekly Averages]

Steel produced

Year

Electric
power
distributed
(millions of
Thousands Index
of net
(1957-59 kilowatthours)
tons
= 100)

Cars and trucks assembled
(thousands) 2

Bituminous
coal mined
(thousands
of short
tons) 1

Freight
loaded
(thousands
of cars)

Paperboard
produced
(thousands
of tons)

1,016

103.0

88.2

14. 8

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

62.
70.
75.
38.
55.

5
6
3
5
7

13.4
15. 1
17.2
9. 4
13. 8

Total

Cars

Trucks

1929.

1, 184

63.5

1,733

1,740

1930
1931
1932
1933
1934

855
549
289
493
560

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

1935
1936
1937
1938
1939

1,023
1,086

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

101
107
95
114

75.
85.
92.
47.
69.

1940
1941
1942
1943
1944

1,281
1,589
1.650
1,704
1,715

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

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
177
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
2,016
1,782
2, 141
1,694

6, 183
6,958
7,450
8,237
8,859

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

748
779
730
735
652

214
229
212
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

724
728
683
581
596

270
276
273
274
307

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

1,899
1, 880
1,886
2,096
2, 428

10, 315
11,292
11,873
12, 082
13, 297
14, 42*4
15, 139
16, 325
17, 490
18, 728

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

1960
1961
1962
1963
1964

45. 9
29. 5
15. 5
26. 5
30. 1
39. 3
54.9
58. 3
32.7
54.4
68. 8
85. 3
88. 6
91.5
92.0
82.0
68. 6
87.4
91.0
80.3
99. 7
108.3
95.7
114. 9
90.9
120.5
118.3
116.0
87.8
96.2
101.9
100. 9
101.2
112. 5
130.3

1,390
1,353
1,414
1,535
1, 607

585
550
552
555
566

306
322
343
358
383

151.8
127. 9
157. 5
175. 0
178.8

128.8
106. 1
133. 4
146. 9
148.8

23.0
21. 8
24. 1
28. 1
30.0

732
609

1,013

9
7
5
9
5

1
2

Daily average. Includes data for Alaska.
Production figures for 1929-63.
3 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.

local sales, colliery fuel, and coal produced by small
mines for local use. The weekly estimates are adjusted annually by the actual figures on production
of coal and lignite collected each year from all producers. The correction is negligible—within less
than one-half of 1 percent. The daily average for
the week is obtained by dividing the weekly production by the maximum number of working days (not
days actually worked) in that week.

Although bituminous coal is still an important industrial fuel, its importance has decreased in recent
years. In 1920 it accounted for 67.4 percent of the
total supply of energy from mineral fuels, in 1940 for
47.2 percent, and in 1959 for 22.4 percent. The
series on production of bituminous coal and lignite
has other weaknesses as an indicator of industrial
activity. Coal mines normally operate at a fraction
of their capacity—about 3 days a week—and the

coal-using industries carry considerable stocks to
allow for changes in industrial activity, with resultant changes in coal consumption, without regard to
the ups and downs in coal output. The figures on
coal production should therefore be analyzed in conjunction with related series, also compiled by the
Bureau of Mines, on the consumption of coal by
industries and deliveries to retail dealers, and on
stocks of coal held by industries and retail dealers.
The weekly estimates of total production and average production per working day and series on consumption and consumer's stocks are published in the
Bureau of Mines multilithed Weekly Coal Report.
Detailed annual data and monthly data for the
current and preceding years, as well as a description
of the method used in making the estimates, are
published in the Bureau of Mines Minerals Yearbook.
Prior to publication of the bound volumes of the
Yearbook, this information is also available in the
"preprint" of the Yearbook chapter distributed as a
separate publication.
Weekly data on production of bituminous coal and
lignite are available from 1917, annually from 1807.

Freight Loaded
The weekly revenue freight cars loaded series, compiled by the Association of American Railroads, was
initiated in 1919 as an operations report for railroad
officers. The published data are totals of weekly
reports received by the AAR 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 carloads of 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 week
of the preceding year.
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 data are published by the AAR in its
CS-54A report, "Revenue Freight Loaded and Re-

ceived 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.

Paper board Produced
The weekly series on production of paperboard,
compiled by the National Paperboard Association,
measures the production of container board, folding,
set-up, special food board, special paperboard, 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 paperboakrd
in the manufacture of containers and boxes for
packaging and shipping numerous products, the production of paperboard moves closely with general
economic activity.
The weekly data are issued by the Association in
a one-page release on Wednesday of the week 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, which shows

a breakdown of the weekly total by cars and trucks
and by mak£s, 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 1963 are average weekly production figures derived from annual totals in Ward's
yearbooks; and data for 1964 are taken 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.

19. 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 rates of the data for recent months are published in current issues of Economic Indicators.
New construction covers the erection or installation of, and additions and alterations to 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 and gas
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.

REVISIONS IN THE HISTORICAL SERIES

Since the publication of the 1962 Historical and
Descriptive Supplement to Economic Indicators
several major revisions have been made in the series
on new construction. Previously, major revisions
had been made in a number of the component series
back only to January 1959 and those revisions caused
a break in comparability with the historical series for
prior years. However, the Census Bureau's publication of revised estimates back to January 1946, in
Construction Report C30-61 {Supplement), re-established comparability back to that date with one
minor exception—estimates for Alaska and Hawaii
(about one-half of one percent of the 50 States' total)
are included only from 1959.
The major elements in the historical revision of the
value in place series were:
(1) The introduction in July 1961 of a new, higher
level series of estimates for new private nonfarm
housing units back to January 1959 and in August
1964 with data back to January 1946. These revisions resulted from the introduction in May 1960 of
a new higher level series of housing starts estimates
back to January 1959 in Construction Report C20-11
{Supplement) and the introduction in June 1964 of
comparably revised housing starts estimates for the
period back to January 1945, in Construction Report
C20-60.
(2) The introduction in July 1961 of a new series
of estimates of the value of private residential additions and alterations, beginning with data for
January 1959, in Construction Report C30-25 {Supplement). This new series was based on data compiled by the Census Bureau in a new quarterly survey
(beginning in the first quarter of 1960) of Residential

Additions, Alterations and Repairs—see Construction
Report C50-1. Comparable data for earlier years
were estimated by linking the 1960 survey estimates
to the original estimates for 1950, the previous base
year, and published in Construction Report C30-61
(Supplement).
(3) The introduction of a new, lower level series
of estimates for farm housing construction expenditures in August 1960, with estimates back to January 1959, in Construction Report C80-13. The
revisions of the original Department of Agriculture
estimates were based largely on information obtained
by the Bureau in its monthly housing starts survey.
The Department of Agriculture, as a result of a reexamination of its farm construction expenditure
estimates, particularly expenditures for farm housing
revised its earlier estimates. The revised data back
to 1946 were introduced by the Census Bureau in
August 1964 in Construction Report C30-61 (Supplement) .
(4) A detailed review of the public utility construction expenditure data resulted in revisions of the
Census Bureau's estimates of construction by electric light and power, gas and petroleum pipeline com-

panies back to 1946 and the elimination of estimates
for local transit companies beginning in 1959. Revised estimates for the 1959-1963 period were released in December 1963 in Construction Report C3053 (Supplement), Revised monthly estimates from
January 1946 were released in August 1964 in Construction Report C30-61 (Supplement).
In addition to these major revisions, estimates for
Alaska and Hawaii were introduced in the value put
in place series for all types of construction back to
January 1959. This resulted in increases of about
one-half of one percent over the original 1959 estimates. Finally, the estimates for recent years for
a number of component series were revised to incorporate the latest available revisions in basic source
data.
For a more complete discussion of these revisions,
see the introductory text in the Bureau of the Census
August 1964 release, Construction Report C30-61
(Supplement).
STATISTICAL PROCEDURES

Three general methods are used by the Bureau of
the Census in making the final estimates of new construc-

New Construction, 1947-64
(Monthly data revised in 1964. Seasonally adjusted annual rates)
BILLIONS OF DOLLARS
70

PRIVATE RESIDENTIAL (NONFARMj

1947

,, . . I , , . , I , ,

, , ,. I I I M U ! , ,

M I , ,

,,1,,

,.!,,,,!.,

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

SOURCE OF DATA: DEPARTMENT OF COMMERCE

. , ! . , , . I

1964

tion activity, depending on the kind of data available
for the different types of construction. In some
instances, a preliminary projection is made based on
related data or normal seasonal changes, pending
receipt of data required for the final estimates.
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 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 two 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 nonfarm
housing starts series (p. 69) by average valuation
figures derived from building permit data. The
building permit valuations are first adjusted to reflect the relationship between permit valuation
figures and construction costs. (2) 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, including
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 on
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, on Federally
owned construction from the Federal agencies administering the various programs. Monthly estimates of construction by telephone and telegraph
companies are obtained from the American Telephone and Telegraph Company and the 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 based on
data 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 Class I line-haul railroads, adjusted to an estimate
for all railroads on the basis of Interstate Commerce
Commission data on the value of gross investment in
railroad property by each class of railroad; and, 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 and
in the gross private domestic investment series.
The series differ in one respect, however: gas and
oil well drilling is included in the new 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 weekly 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 1957-59 dollars, which reflect some
of these adjustments, are published monthly in Construction Report C30 and in Construction Review.
In addition, annual estimates of the value of maintenance and repairs are published in Construction

REFERENCES

Data on construction value put in place are
published in more detail by type of construction
and ownership in Cohstruction 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
(1957-59) 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 C30.
Historical monthly data for 1939-45 are published
in Construction Volume and Costs, 1915-1956, a
statistical supplement to Construction Review and
for 1945-63 in Construction Report C30-61 Supplement. These publications may be purchased from
the U.S. Government Printing Office.
More detailed descriptions of the sources of data
and the methods of compiling the estimates are also
published in Construction Report C30-61 Supplement.

F. W. Dodge Construction Contracts Series
DESCRIPTION OF SERIES

The total value index on construction contracts
compiled by the F. W. Dodge Company covers private and public ownership for residential buildings,
Review.
nonresidential buildings, public works, and utilities
While extensive adjustments are made for under- construction. The series includes additions and
coverage of the source data now used, there is alterations, but not maintenance and repair. Coverno satisfactory factual basis for making these ad- age is not complete, particularly for force-account
justments, and much reliance is placed on judgment work and smaller construction projects. Farm conand opinion. The construction patterns used in struction is excluded, and rural nonfarm construction
translating work started into work put in place may is probably covered less fully than urban. Prior to
be obsolete and do not reflect short-run changes due 1956, Dodge construction statistics covered only the
to such factors as weather or the labor and materials 37 Eastern States. Beginning in January 1956,
supply situation. The Bureau of the Census is de- coverage was expanded to 48 States and the value
veloping plans for improvements in concepts and index, together with its 1947-49 base, was adjusted
methods for estimating the value put in place data. back to 1947. Current issues of Economic Indicators
Pending the introduction of such improvements, the show the annual index for recent years and seasonally
adjusted data for recent months.
existing series are being continued.
The major segments of the Dodge series on conBecause of these limitations resulting from the
many different sources of data and the kinds of esti- struction contracts are compiled by several methods.
mating procedures used, the error in the estimates Data on privately owned one-family houses are based
cannot be statistically measured. Caution should upon a combination of building permits in the most
be exercised in drawing conclusions from relatively active building permit areas and a sample in all other
areas. Permit costs are adjusted to reflect estimated
small month-to-month or year-to-year changes.

TABLE

19.—New Construction
Construction contract 3

Private expenditures

Year

Total
expend- Total
itures

Residential non-farm

Total

Commercial and
New Additions industrial
housing
and
units
alterations

Other

Federal,
State,
and local
expenditures 2

Billions of dollars

1929

10.8

Total value

Commercial
and industrial floor
space

(Index 195759=100)

Millions of
square feet

8. 3

3.6

3. 0

0.3

2. 1

2. 6

2. 5

267

2. 1
1. 6

1.6
1.3

.3
.2

1.4
.7
.3

2. 4

2.9
2.7
1.9
1.6
2. 2

145
70
33
42
46

2.2
3.5
3. 1
3.4
3.8

56
97
123
67
93

3.6
5.8
10. 7
6. 3
3. 1

162
294
520
128
96

2.4
2.2
3.3
4. 7
6.3

33.9
41. 1
43. 7

221
354
243
211
147

6.9
9.2
10.8
11.2
11. 7

61. 4
63. 4
66.8
69.5
76.2

11.7
12. 7
14.0
15. 5
16.0
16. 1

91. 1
91. 6
93. 2
101.7
105. 1

15. 9
17. 1
17.8
18.7
20.0

105.2
107. 6
119. 7
132. 0
137. 0

1930
1931
1932
1933
1934

8.7
6.4
3.5
2. 9
3.7

5. 9
1. 2
1. 5

.5
.6

1935
1936
1937
1938
1939

4.2
6.5
7. 0
7.0
8.2

2. 0
3. 0

1. 0

4. 4

2. 0
2. 7

1.6
2.3

.3
.3

1940
1941
1942
1943
1944

8. 7
12. 0
14. 1
8.3
5.3

5. 1
6. 2

3. 0
3. 5

2.6

3. 0

2. 0

1.7
.9
.8

.4
.2
.2

1945
1946
1947
1948
1949

5.8
14.3
20.2
26. 1
26. 7

12. 1
16.7
21.4
20.4

13. 1
12.4

7.8
10.5
10.0

1950
1951
1952
1953
1954

33. 6
35. 4
36.8
39. 1
41. 4

26. 7
26.2
26.0
27. 9
29. 7

18. 1
15.9
15.8
16.6
18.2

1955
1956
1957
1958
195977
1959

46. 5
47. 6
49. 1
50.2
55. 0
55. 3

34. 8
34. 9
35. 1
34.7
39. 0
39. 2

1960
1961
1962
1963 8
1964

53. 9
55. 4
59. 5
62. 5
66.0

38. 1
38. 3
41.7
43.8
46.0

3.8
1.7

3.9
3.6

3.4

2.2

3.4

1.6
1.9

1.3
6.2
9.9

.5
.3

.1
.1
.2

.7
1. 2
1. 5

.2
.3
.3

1.4

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

.5
.8
1.2

.2
.3

.5
1.3
2.0

.8
2.8
2. 7

4.8

1.5
.7
.5
.5
.6
.9

1. 1
1. 1
1.2
1.3

1. 5
1. 2
.9

1. 1
1.3

3. 1
4. 1

2. 5

2.8
2.2

15.6
13.2
12.9
13.4
14.9

2.4
2.5
2.8
2.9
3.0

2. 5

6. 1

3.6

6.7
6.7
7.3
7.3

21. 9
20. 2
19. 0
19.8
24. 1
24. 3

18. 2
16. 1
14.7
15.4
19. 1
19. 2

3.3

5. 6

3. 6

6.7

7.3
8.0

3. 7

7. 1
6. 0

9. 0
8. 9

6. 0

8.9
8.9

21. 7
21. 7
24. 3
25. 8
26.6

16. 4
16. 2
18. 6
20. 1
20.7

2.2

3.8

4.2
4.3
(4)
(4)
(4)
(4)
(4)

3.5
4.0
4.2

6.0

7. 0
7. 5
7. 9
8. 2
9. 0

5.5
5.8

9.3

9. 2
9. 5
9.8

10.4

5
5
5

237
225
197
235
238
298
436
421
359
440
461
443
500
534
598

1
2
3
4
5

Includes nonhousekeeping residential buildings not shown separately.
Includes public residential construction.
Compiled by F. W. Dodge Corporation. Omits small contracts and covers rural areas less fully than urban.
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):
1951,6 $930; 1952, $923; 1953, $479.
Revised series beginning January 1956; not comparable with earlier data.
7
Alaska and Hawaii included beginning 1959. Comparative data, exclusive of Alaska and Hawaii, also shown.
8
Preliminary.
Source: New construction expenditures by U.S. Department of Commerce; construction contracts by F. W. Dodge Corporation.

actual construction costs. In the 37 Eastern States,
data for all other project types in the Dodge series
are based upon the Company's news reporting
service: interviews with architects, contractors,
owners, real estate brokers and others, to obtain information on construction jobs being planned and
the awarding of construction contracts. In the 11
Western States, the corresponding segment of the
series is based predominantly upon information from
building permits in a sample of geographic areas,
adjusted to reflect actual construction costs. This
information is supplemented with data from secondary sources and field reports on public construction and on private construction in nonpermit
portions of the sample areas.

In the series showing square feet of commercial
and industrial construction, the Dodge category of
"Commercial" includes store buildings, restaurant
buildings, office and bank buildings, nonindustrial
warehouses and storage structures, and commercial
garages and service stations. The category of "Industrial" includes the manufacturing facilities (less
cost of processing equipment) and warehouses built
by companies classified by the Bureau of the Budget
in their Standard Industrial Classification as "Manufacturing" and covered by the major group codes
19 through 39.
Data on construction contracts are available
monthly in more detail by type of construction, geographic location, and ownership in F. W. Dodge
Company's several subscription statistical services.

20. NEW HOUSING STARTS AND APPLICATIONS FOR FINANCING HOUSING STARTS
DESCRIPTION OF SERIES

The current series of housing starts is compiled
by the Bureau of the Census. The series contains
data on the number of housing units on which construction is started in the United States. Until 1959
the data cover only nonfarm units. Beginning with
January 1959, the coverage of the series extends to
all new housing units including not only farm housing
but also seasonal, low-value, and possibly temporary
units. Breakdowns by public and private ownership
are provided.
The table shows an old series and a new series.
The old series covering the years through 1945 is
presented as originally compiled (see BLS Bulletin
No. 1260). The new series covering the years from
1945 through 1963 consists of two parts. The data
beginning with 1959 are based on a technique of
direct measurements described below. The estimates for the period from 1945 to 1958 reflect the
old series adjusted to provide comparability with the
data for the subsequent years (see Census Bureau
Construction Report, Series C20-60).
Independently of the Census (or BLS) compilation, the Federal Housing Administration and the
Veterans' Administration provide reports on the
number of units involved in their respective programs.
The description which follows refers to the procedures used in deriving the current estimates of new
housing starts.
The current series is a comprehensive measure
of the number of new housing units in housekeeping

residential buildings on which construction has
started in the United States each month. Start of
construction is defined as the beginning of excavation
for the footings or foundation of the building. A
housing unit is defined as a room or group of rooms
intended for occupancy as separate living quarters
by a family, by a group of unrelated persons living
together, or by a person living alone. A housekeeping residential building is a building consisting
primarily of housing units.
The housing starts series exclude group quarters
(such as dormitories, fraternity houses, nurses'
homes, etc.), transient accomodations (such as
transient hotels and motels) and units in primarily
nonresidential buildings. Also excluded is the manufacture of mobile homes or house trailers.
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 builders of
a sample of units to questions regarding the intended
use of the land on which the building is located.
STATISTICAL PROCEDURE

Four steps are involved in preparing the monthly
estimates.
(a) Each month the Census Bureau mails questionnaires to some 4,000 local government officials
who issue building permits in incorporated places or
in counties and townships throughout the country.
Of these places, 3,500 account for approximately
90 percent of housing units authorized, the remaining
500 represent a sample of the approximately 8,500
other permit-issuing places accounting for the re-

Nonfarm Private Housing Starts, 1947-64
(Monthly data revised in 1964. Annual rates)

NON-FARM PRIVATE HOUSING STARTS
(UNADJUSTED]
(SEASONALLY ADJUSTED)

fl-lnlnliilJiilnLlliLlJ

1947

1 ,, I , • I , 11,, 1.. ! ., 1 .. I , , 1 i , I • , 1 ,, I • ,1 n I , , 1 •• I , i 1 n 1 •• I , i 1 1 , 1 1 , 1 • , 1 , i I ,, I , , 11 , 1 1 11 i 11 11 I i i 1 1 1 1 1 , 1 1 ,1, , 1,, I , .1, ,1,, 1 , 11 • • 11 • 1 , i 1 11 1 , , 1 1 . 1 •• 1111 i l l • i I n 1 • . 1. • 11. 1 1 , 1 • . I • • I • . I . • 1 •. I • ,

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE OF DATA: DEPARTMENT OF COMMERCE

maining 10 percent. Information is requested,
among other things, on the number of privately
owned housing units authorized by building permits
issued during the month.
(6) The second step is to convert the permit authorizations 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 570 places. In 1964, the average
monthly sample was approximately 18,000 housing
units for which permits were issued. For each
housing unit 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, 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
housing units authorized during these months in all
12,000 places, as estimated from the 4,000 place

sample. This is done separately for each of four
major regions (North East, North Central, South,
and West) of the United States, and within each
region by inside or outside Standard Metropolitan
Statistical Areas. Finally, an adjustment of 4.8
percent is added to take account of the estimated
number of housing units started without permit
authorization. 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 122 primary sampling units comprising (1) all or part of Standard
Metropolitan Statistical Areas, (2) individual counties, or (3) 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 or by telephone

calls to the owner or builder. As a final step, estimates of starts not provided by the sources are
prepared on the basis of an intensive canvass by
interviewers of a subsample of 313 land areas within
the 122 primary areas.
The separate estimates for permit-issuing 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 on four years of unadjusted data
for starts in permit-issuing places (May 1959- April
1963), and six years of data* (1957-1962) for starts
in nonpermit areas. The rate is obtained by making
separate seasonal adjustments of housing units
started in permit-issuing places in each of the four
regions using the standard Univac No. II Census
method 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 1963 are as
follows :
January
February
March
April__
May
June
July
August
September
OctoberNovember
December

Within permit
places
77. 2
76. 3
97. 7
117.9
121. 6
116. 3
111. 9
115. 0
99. 4
107. 3
90. 8
74. 7

Within nonpermit areas
49. 6
70. 5
83. 0
114.2
133. 3
120. 7
121. 4
140. 5
107. 2
100. 2
97. 6
60. 2

A preliminary estimate is issued 15 to 20 days
following the end of the month. The preliminary
estimate differs somewhat from the final figures for
the following reasons: (a) it is based on a sample of
about 1,900 permit-issuing places; (6) not all the
results of the field survey used to convert housing
unit authorizations to starts are received in time to
be used; and (c) housing units started prior to the
issuance of permits may not be adequately accounted
for. Final revisions are made within the next two
months.
The figures for the FHA and VA programs 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 cons true tion" are
also based on administrative reports of the two
agencies. The number of units for which FHA has
received applications is limited to those on l-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 series on new housing starts has a limited
relationship to Census of Housing figures. Units
started should not be added to housing inventory
figures without an adjustment to allow time for completion. Also, although new construction usually
accounts for the greater part of the difference in
inventory reported in successive housing censuses,
there are other changes, too, such as demolitions,
disaster losses, and additions and losses due to conversions or mergers. The magnitudes of these factors
are indicated in the National Housing Inventory of
1956. The Census of Housing also includes certain
types of residences which are not counted in the new
housing starts series, such as living quarters in
trailers or mobile homes and in institutions or primarily nonresidential or transient structures.
The Census Bureau also publishes data on the
number of housing units authorized by building permits each month. These figures differ from housing
starts in that the units are reported in the month of
permit issuance rather than in the month of start of
construction and they exclude units in nonpermit
areas.
Data compiled for the housing starts series are
used in the preparation of estimates for the series
on value of new construction put in place described
in the preceding section.
USES AND LIMITATIONS

The series on housing starts serves as an important
guide in the formulation of national housing policy
and as an indicator of residential building activity.
It must be recognized that the current estimates
have a number of limitations: First, both the level
of the estimates and the measures of month-tomonth change are subject to sampling error. The

TABLE

20.—New Housing Starts and Applications for Financing
[Thousands of units]
Housing starts
Private nonfarrri

1946
1947
1948
1949 _

_
__

. _._

1950
19511952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
___ _
1963
1964 (preliminary)

Total
private
and
public
(including
farm) l

Total
private
(including
farm)

(3)

?)(3)
?!3
(0)

(»)
(3)

?!3
(•)( )
(3)

Government
programs

Total

1, 015. 2
1, 265. 1
1, 344. 0
1, 429. 8
1, 908. 1
1,419.8
1, 445. 4
1, 402. 1
1, 531. 8

1-family

(3)

i?(3)
(*)
(3)
o

2 or
more
family

(3)
(3)

?!3
((3))
?!

FHA
(1-4
family
units)

67. 1
178.3
216. 4
252. 6

91. 8
160.3
71. 1
90.8

328.2
186.9
229. 1
216. 5
250.9

191.2
148.6
141. 3
156. 5
307.0

1, 553. 5

1,516.8

1, 626. 6
1, 324. 9
1, 174. 8
1, 314. 2
1, 494. 6

1,211.7

282.9

268. 7
183.4
150. 1
270. 3
307. 0

1, 296. 0
1, 365. 0
1, 492. 4
1, 640. 9
1, 575. 7

1, 252. 1
1, 313. 0
1, 462. 8
1, 609. 2
1, 543. 9

1, 230. 1
1, 284. 8
1, 439. 1
1, 581. 7
1, 516. 9

972.3
946. 4
967.8
993. 2
945. 9

257. 8
338.4
471.3
588. 5
571. 0

225. 7
198. 8
197.3
166. 2
154. 0

New
private
housing
units
authorized by
building
permits

(3)

Proposed home
construction

Applications for
FHA
commitments 2

121. 7
286.4
293. 2
327. 0

Requests
for VA
appraisals 2

(3)

f3)
(3)
(3)

(?!3)
?i3
()
l, 056. 5

397.7
192.8
267. 9
253. 7
338.6

(3)

392. 9
270. 7
128. 3
102. 1
109.3

1, 152. 6
921. 9
820. 3
950. 8
4
1, 208. 3

306. 2
197. 7
198.8
341. 7
369.7

620. 8
401. 5
159. 4
234. 2
234. 0

74. 6
83. 3
77.8
71. 0
59.2

998. 0
1, 064. 2
1, 186. 6
4
1, 334. 7
1, 273. 8

242.4
243. 8
221. 1
190. 2
182. 1

142.9
177. 8
171. 2
139. 3
113.6

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.
3
Not
available.
4
For 1954-58, coverage limited to 6,600 places; 1959-62, 10,000 places; and for 1963 and 1964, 12,000 places.
NOTE.—Monthly data on new nonfarm housing starts available beginning 1939, annual from 1889. Revised series, beginning with 1945, includes Alaska and
Hawaii, and beginning with 1959, includes farm as well as nonfarm housing starts.

Sources: Department of Labor prior to 1946, Department of Commerce, Federal Housing Administration (FHA), Veterans' Administration (VA).

standard error for the monthly estimate of total
housing is between 3 and 4 percent. Secondly, it is
possible that there is still some understatement of
starts due to the difficulty of locating and identifying
construction projects in nonpermit areas. Another
limitation is in the seasonal adjustment factors which
of necessity are based on a relatively small number
of years; after sufficient time has elapsed the seasonal
factors will be based on a number of years sufficient
to yield sounder seasonal indexes.
The FHA and VA series indicate the importance
of these government programs in the field of new
home construction. Certain limitations in these
series should be observed, however, particularly in
their relation to other data. Although FHA and
VA may make inspections during construction and

the units may be counted as FHA or VA "starts"
the permanent financing after completion may not be
underwritten. Also, some applications for FHA
commitments or requests for VA appraisals lapse.
There is some duplication of units in application for
FHA commitments and requests for VA appraisals.
In cases where both agencies issue valuation commitments, FHA makes the compliance inspection and
the unit is reported as an FHA start, even though
the mortgage may finally be underwritten by VA or
by neither agency. The FHA series on housing
starts includes units in buildings with 5 or more
housing units as well as those in buildings with
1-4 housing units, whereas the FHA applications
series covers only l-to-4-family homes.

3.9 percent greater than the number in the 10,000
places.
The procedure followed in arriving at the
Monthly data on housing starts are published in
monthly
building permit authorization totals insomewhat greater detail in Construction Reports,
volves
the
cumulating of monthly data from all
Housing Starts (Census Series C20). Related inforpermit-issuing
places that authorized 50 or more housmation on residential housing units authorized by
ing
units
(20
or
more in some States) in a recent year
building permits is published in Construction Reports,
with
estimates
for
the less active places based on a
Housing Authorized in Permit-Issuing Places: Sumstratified
probability
sample of these places. Annual
mary Statistics (Census Series C42). Much of this
totals
are
based
on
reports
from all 12,000 permitinformation is reprinted in Construction Review
issuing
places.
This
12,000
place universe accounts
published monthly by the Department of Commerce.
for
a
major
portion
but
not
all
of residential building
Historical data for 1889 to 1958 may be found in:
in
the
United
States.
About
83 percent of all priConstruction During Five Decades, Historical Statistics
vate
housing
in
1963
was
constructed
within these
1907-1952 (BLS Bulletin 1146); Trends in Building
12,000
permit-issuing
places.
Permit Activity (BLS Bulletin 124S); Nonjarm HousThese figures relate to new building intended for
ing Starts 1889-1958 (BLS Bulletin 1260). A more
occupancy
on a housekeeping basis. They do not
detailed technical description of the methods used
include
hotels,
motels, and other structures for
to prepare the new series of housing starts may be
transient
accommodation
or group residential buildfound in the Census Report C20-11 (Supplement),
ings
such
as
nurses'
homes
and college dormitories.
May 1960. A description of the old series is given
They
also
exclude
additions,
alterations, and repairs
in Techniques of Preparing Major BLS Statistical
to
existing
buildings,
as
well
as
conversions.
Series (BLS Bulletin 1168), December 1954. A
The
building
permit
data
are
adjusted
for seasonal
series on Sales oj New One-Family Homes (Censusvariation
by
the
use
of
moving
seasonal
indexes
HHFA Report Series C25) was initiated in 1962.
(derived
by
the
X-9
version
of
the
Census
Method
For the government programs, monthly data from
1952 on starts and on proposed home construction II, based on data from January 1954-June 1964).
are given in current issues of Housing Statistics, a Before calculation of the seasonal factors, the data
monthly publication of the Housing and Home for 1954-1959 were adjusted upward (by type of
structure and region) on the basis of the overlaps of
Finance Agency.
For the Census Univac II method of seasonal the two series in the first four months of 1960. It
adjustment see Electronic Computers and Business is assumed that the 12,000 permit-issuing place
Indicators by Julius Shishkin, published as Occa- universe has seasonal movements which are very
sional Paper No. 57 by the National Bureau of little different (if different at all) from those that
apply to the 10,000 place universe, since the addiEconomic Research, especially Appendix A.
tional places added about 4 percent to the units
reported by the 10,000 places.
New Private Housing Units Authorized
Building permit seasonal adjustments take account
in Permit Places
of the varying number of working days per month.
DESCRIPTION OF SERIES
Working days are defined as the days from Monday
A revised monthly series on the number of new through Friday, excluding eight major holidays
private housing units authorized by local building (New Year's, Washington's Birthday, Memorial
permits, unadjusted and seasonally adjusted by Day, Independence Day, Labor Day, Veterans
region and by type of structure, was introduced by Day, Thanksgiving, and Christmas). Each reported
the Bureau of the Census in January 1964, presenting monthly permit total is divided by the number of
data from January 1963. The new series pertains to working days in the month to arrive at a daily
all of the approximately 12,000 places in the United average for that month. The seasonal adjustment
States which were identified in 1962 as having local indexes are then applied to the daily average and
building permit systems. For earlier years, back to the results multiplied by the number of working
1959, the series relates to the 10,000 places identified days in the year.
as permit-issuing in 1959. For 1954-59, available
Building permit data are also presented in condata relate to only 6,600 places. In 1963, the number siderable geographic detail not available for the
of housing units authorized in the 12,000 places was housing starts series.
REFERENCES

Number of new private housing units authorized by local building permits in 10,000 and 12,000 permit-issuing places:
Unadjusted and seasonally adjusted annual rates, 1959-64
In thousands of units

Period
Unadjusted

Seasonally
adjusted
annual rate

10,000 permit-issuing places
Annual totals:
1959
1960
1961
1962
1963
Monthly:
1963—January
February
March
April
May
June
,
July
August
September
October
November
December

1, 208. 3
998. 0
1, 064. 2
1, 186. 6
1, 285. 0
81.4
76.2
104.5
125.8
133. 8
113. 9
116. 7
110.0
110.8
123. 2
95. 0
93. 7

217
187
229
233
309
300
266
234
322
351
309
359

12,000 permit-issuing places
Annual totals:
1962
1963
Monthly:
1963—January
February
March
April
May
June
July
August
September
October
November
December
1964—January
February
March
April
May
June
July

1, 229. 5
1, 334. 7
84. 4
78.7
108.8
131. 5
138. 7
118. 7
121.9
115.0
114. 7
127.8
98.6
96. 1
85.5
90.0
119. 8
127. 7
122. 0
123. 7
118. 1

1,267
1,226
1,279
1,287
1,360
1, 352
1,320
1,286
1, 371
1,401
1,359
1,402
1,333
1,404
1, 377
1, 280
1, 271
1,306
1, 242

LIMITATIONS OF DATA

The portion of residential construction measurable
from building records is inherently limited, since
such records obviously do not reflect construction
activity outside of areas subject to local permit
requirements. During 1963 about 17 percent of the
housing units in the United States were constructed

in areas not requiring building permits. However,
this proportion varies from State to State and among
the metropolitan areas. The reported statistics are
also influenced by the following factors:
1. Some new residential construction in building permit jurisdictions excapes recording. A
current measure of such incomplete filing is not
presently available.
2. Changes in boundaries of localities due to
annexation, new incorporations, etc., result in
problems in comparability over time, even for
the same places.
To the extent that these limiting factors apply
rather consistently over an extended period, they
may not seriously impair the usefulness of building
permit statistics as indicators of trends in residential
construction activity, although even in this connection the geographical limitations of the data
need to be kept in mind.
REFERENCES

Monthly data are published in Construction
Reports, Series C20, "Housing Starts." Building
permit authorizations by type of structure, and
covering the numbers of units as reported by individual permit-issuing places, appear in the Annual
C40 reports of the Bureau of the Census, Housing
Authorized in Individual Permit-Issuing Places.
Data showing authorizations by type of structure
and covering both numbers of units and permit valuations, for States and selected metropolitan statistical areas (based on 3,014 places), appear each
month in the C42 series of reports, Housing Authorized in Permit-Issuing Places: Summary Statistics.
Similar data covering all SMSA's and States, and
based on approximately all of the 12,000 permitissuing places in the United States, appear in the
annual summaries of the C42 series of reports,
Housing Authorized in Permit-Issuing Places: Summary Statistics.
Related Construction Data Reports
Construction Reports, Series C25: Sales of New
One-Family Homes (monthly)
Construction Reports, Series C30: Value of New
Construction Put in Place (monthly)
Construction Reports, Series C41: Authorized
Construction, Washington, D.C. Area (monthly)

2 1 . BUSINESS SALES AND INVENTORIES—TOTAL AND TRADE
Total Business
For convenience in summarizing business trends,
total business sales and inventories as shown here
combine wholesale, retail, and manufacturers' data.
The series included are described in the individual
presentations which follow. It should be noted that
these data, when compared with the nonfarm business
statistics used in gross national product computations and elsewhere, are smaller, since they do not
include construction, utilities, or other nonindustrial
sectors.

Wholesale Trade
DESCRIPTION OF SERIES

Census of Business universe and supplemented by
a sample of new businesses obtained from Social
Security Administration lists. Data prior to I960,
based on samples selected from the 1954 and 1948
Censuses of Business, have been adjusted by the
Office of the Business Economics to the level of the
sample selected from the 1958 Census.
The sales and inventory data are adjusted for
seasonal variation and, in the case of sales, also for
trading day differences using the X-9 version of the
Census Method II seasonal adjustment program.
The magnitude of these adjustments is suggested
by the following comparison of unadjusted and adjusted data for 1963 for merchant wholesalers, all
trades combined.

[Dollar figures in billions]
The series on wholesale sales and inventories is
limited to merchant wholesalers as information on
Unadjusted
Seasonally adjusted
Implicit seasonal
adjustment factors
other types of wholesalers is not available except for
years when the Census of Business is taken. The
InvenInvenInvenSales
tories
Sales *
tories
Sales i
tories
1958 Census of Business indicated that merchant
14. 5
12. 1
14. 6
94. 5 99.5
11. 5
wholesalers accounted for 43 percent of the sales and Jan
11.3
14. 5
12. 5
14. 6
90.0
99. 6
75 percent of the inventories of all wholesale estab- Feb___
Mar
12. 3
14. 7
12. 5
14. 6
98.3 100.2
lishments. The areas of wholesale trade not covered Apr
12. 6
14. 6
12. 6
14.8
100. 3
98. 8
May___ 13.0
14. 7
12. 5
14. 8
103. 7
99. 4
in this series include manufacturers sales offices and Jun
12.2
14. 8
12. 6
14. 9
97.4
99. 5
branches, agents and brokers, petroleum bulk stations Jul
13. 0
14. 9
12. 9
15.0
101.0
99.3
13. 1
15. 1
12. 8
15. 1
102. 2
99.8
and terminals and assemblers of farm products. Aug___
Sept___ 12. 8
15.3
12.9
15. 3
99. 4 100. 3
The wholesale series shown in issues of this report Oct
14. 3
15. 8
13. 0
15. 5
110.4 101.9
Nov __ 13. 0
15. 9
12. 8
15. 5
101.8 102.4
prior to December 1963 included information for Dec-___
13.2
15. 5
13. 0
15. 6
101. 3
99.6
some types of nonmerchant wholesalers but this
i Includes adjustments for trading day differences.
series has been discontinued. The revised series,
beginning with data for 1948 and limited to merchant
USES AND LIMITATIONS
wholesalers was issued in December 1963.
The term "sales" as used here includes sale of
The monthly wholesale trade series are important
merchandise, after deducting returns, allowances, economic indicators which reflect the level of ecoand discounts, and receipts from repairs or other nomic activity at an intermediate stage of the distribservices to customers. Inventories represent stocks,
utive process. The wholesale data are also used
at cost, of all merchandise owned by wholesalers and
together writh similar data for manufacturing and
available for sale. They do not include goods held
on a consignment basis nor do they include such items retail trade to provide a consistent aggregate series
as fixtures, equipment and supplies not held for sale. for total business.
The monthly estimates of sales and inventories
are based upon a sample and are therefore subject
STATISTICAL PROCEDURES
to sampling variability. In addition, they are
Sales and inventories of merchant wholesalers are
subject
to nonsampling errors, such as the failure of
compiled and released by the Bureau of the Census,
respondents
to submit reports in time for tabulation,
on the basis of dollar estimates reported monthly by
to
submit
correct
figures, or to respond at all. The
a probability sample of merchant wholesalers representing all kinds of business. The data from 1960 estimates of sales are more accurate than the estito date are based on a sample selected from the 1958 mates of inventories. The statistics on inventories

TABLE

21.—Business Sales and Inventories—Total and Trade
[Billions of dollars]

Total business *

Wholesale 4

Retail 5
Sales 2

Inventories

Period
Sales 2

Inventories 3

Sales 2

Inventories 3
Total

(6)

)

1929
1939

_ -_
(*\
(6)
(6)

1940
1941
1942
1943
1944

(6)

(&)

(6)

_
_

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

1955
1956
1957
1958
1959

_
_

_ __
_

__
__

1960
1961
1962
1963
1964 9

Total

NonDurable durable
goods
goods
stores
stores

4. 04

1. 30

2. 74

3. 50

0. 94

2. 56

5. 53

2. 09

3 45

3. 86
4. 61
4. 77
5. 27
5.85

1.
1.
1.
1.
1.

2.
3.
3.
4.
4.

73
17
74
25
69

6. 12
7. 78
8. 02
7.56
7. 64

2.
3.
2.
2.
2.

3.
4.
5.
5.
5.

13
43
03
02
16

47
18
75
21
24

6.50
7 8. 73
10. 20
11. 14
11. 15

1. 34
7 2. 35
3. 13
3.57
3. 75

5. 17
7 6.38
7.07
7. 56
7. 40

7. 95
s 12. 06
14. 24
16. 01
15. 47

2.43
8 3. 85
'5. 35
6. 57
6. 26

28
89
21
69
64

12.27
13. 05
13. 53
14.09
14. 10

4. 52
4. 54
4. 61
5.03
4. 85

7. 75
8. 51
8. 92
9. 06
9. 25

19. 46
21. 05
21. 03
21.49
20.93

8. 29
9. 63
9. 49
9. 78
9. 27

NonDurable durable
goods
goods
stores
stores

35.99
33. 79

52. 51
49. 50

6. 81
6. 51

38. 60
43. 36
44. 84
47.99
46. 44

59.
70.
72.
76.
73.

82
24
38
12
18

7. 70
8. 60
8. 78
9.05
8.99

51.
54.
55.
54.
59.

79. 52
87.30
89.05
86. 92
91.96

9. 89
10. 51
10.48
10. 26
11.41

11. 68
13. 26
12. 73
12. 74
13.95

15.32
15.81
16. 67
16. 70
17.95

5. 58
5.48
5. 70
5. 28
5.97

9. 74
10.33
10.97
11.41
11.98

22. 77
23.40
24. 45
24. 11
25. 31

10.
10.
11.
10.
11.

11. 44
11. 63
12. 16
12. 69
13.72

13. 98
14. 25
14. 58
15. 60
16.40

18. 29
18. 23
19. 61
20.54
21.79

5. 89
5. 61
6. 25
6. 68
7.09

12. 40
12. 63
13.37
13. 86
14.71

26. 81
26. 24
27. 94
29. 38
29.59

11. 95
11.02
11. 73
12. 51
12. 17

69
06
88
23
58

60. 53
60. 75
65.08
68.00
72.63

1
2 The term "business" here includes wholesale,
3 Monthly average for year and total for month.
4 Book value, end of period, seasonally adjusted.

94.
95.
100.
105.
108.

61
58
27
13
76

7. 96
7. 71
9.
9.
10.
10.
10.

53
50
28
53
04

65
60
27
35
40

5. 52
8. 21
8. 90
9.44
9. 21

11. 17
11. 42
11. 54
11. 71
11. 66
12.
12.
13.
13.
14.

24
91
17
59
26

14. 86
15. 22
16. 21
16. 87
17.43

retail, and manufacturing trade (see page 72).

Merchant wholesalers. Beginning January 1961, data include Alaska and Hawaii.
« Beginning January 1960, data include Alaska and Hawaii.
« Not available.
i 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"
8 series, which begins with data for 1946, is not comparable with sales figures for earlier periods.
Retail inventory estimates beginning with year-end 1946 utilize as benchmarks the Retail Trade Annual Reports of the Bureau of the Census* are based on the
latest (1957) Standard Industrial Classification, and include data for Alaska and Hawaii. The "old" estimates for 1939 through 1945 are based on the Censuses of
Business
for 1939 and 1948 and are not comparable with the "new" series.
8
Preliminary.
Source: Department of Commerce.

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 with the
Census of Business data indicate that the monthly
estimates are subject to some undercoverage due
primarily to the time lag in representing births in the
monthly survey. This undercoverage, however, is
40-752 0—65

not considered sufficiently serious to affect the reliability of short term trend comparisons made from
these data.
REFERENCES

Sales and inventory data for merchant wholesalers, both unadjusted and adjusted, are published
in greater detail by kind of business by the Bureau
of the Census in its Monthly Wholesale Trade Report which also includes a detailed description of the

sample, estimation procedures and reliability of the
data. The data for the summary trade groups are
also published by the Office of Business Economics
in its Business News Reports series and in the Survey
of Current Business. Data from 1960 to date are
available from the Bureau of the Census; data from
1948 to 1959 are available from the Office of Business
Economics.
Additional information on the seasonal adjustment
of these series may be found in the references to the
retail trade section, page 76.

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
taxes and excises. 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. The "new"
series, which started in January 1951, was not comparable with the sales figures for earlier periods. In
early 1957 the new series was 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. Estimates of retail sales in Alaska and
Hawaii are included beginning with data for 1960.
In mid-1961 the sales data for 1946-50 were revised
for comparability with the latest revised series. A
"new" series on inventories, comparable in concept
and coverage to the latest series on sales begins with
January 1946. The new series is not comparable
with the series for years prior to 1946.
STATISTICAL PROCEDURES

Census of Retail 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 Revenue Service tabu74

lations, Federal Reserve System data on department
stores, and data on the taxable quantity and average
price of gasoline. In developing these estimates,
use was also made of monthly estimates of sales
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 probability sample data. Estimates comparable in concept and coverage were prepared by the
Office of Business Economics back to January 1946.
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 1946
were based on the Censuses of Retail Trade for 1939
and 1948, the Internal Revenue Service's Statistics
of Income, Part 2, and Federal Reserve data on department store inventories. Retail inventories estimates beginning with December 1946 utilize as
benchmarks the data in the Annual Retail Trade
Reports of the Bureau of the Census. Monthly estimates are made by the Office of Business Economics
and are based primarily on sample data reported to
the Bureau of the Census.
The sales and inventories data are adjusted for
seasonal variation and, in the case of sales, also for
holidays and trading day differences, using the X-9
version of the Census Method II seasonal adjustment
program. The magnitude of the seasonal adjustments is indicated by the following comparison of
unadjusted and seasonally adjusted data for 1963.
[Dollar figures in billions]
Unadjusted

Jan
Feb____
Mar_._
Apr
May___
June
July__.
Aug___
Sept___
Oct
Nov___
Dec___
l

Seasonally adjusted

Sales

Inventories

Sales i

Inventories

18. 3
17. 1
19. 7
20. 5
21.2
20. 7
20. 5
21. 0
19. 3
21. 5
21. 5
25. 1

27. 0
27. 7
28.6
28. 6
28.4
28. 0
28. 0
27. 6
27. 9
29. 1
30. 0
27. 8

20.4
20.4
20.4
20.3
20.2
20. 5
20. 7
20. 7
20. 4
20. 7
20. 6
21. 0

28.0
28. 0
28. 1
28. 1
28. 1
28. 1
28. 3
28. 1
28. 1
28.4
28. 7
28. 7

Implicit seasonal
adjustment factors
Sales *

89.6
83. 9
96.6
101. 2
105. 1
101.2
99. 1
101.7
94. 3
103.9
104.6
119. 4

. Includes adjustments for holidays and trading day differences.

Inventories

96.4
99. 0
101.8
102. 1
101. 3
99.7
98.9
98. 0
99. 1
102. 7
104. 7
97. 0

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.

Since the monthly retail sales estimates are based
on a probability sample, they are 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
retail 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 retail sales shown
by the 1958 Census of Business.
The monthly retail inventories statistics are believed to be less accurate than the sales statistics,
since fewer retailers maintain monthly records of
their inventories than monthly records of sales.
Even so, the monthly series estimate for December
1963 was within two percent of the Annual Retail
Trade Survey estimate for the same date.

Retail Sales and Inventories, 1948-64
{Monthly data.

Seasonally adjusted)

BILLIONS OF DOLLARS
18

1948

1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE OF DATA: DEPARTMENT OF COMMERCE

biennial Business Statistics, a supplement to the
Survey. The Monthly Retail Trade Report contains
Sales and inventories data for retail trade, sea- a detailed description of the Census Bureau's monthly
sonally adjusted as in current issues of Economic retail trade series. A description of the sample and
Indicators, are issued as monthly press releases by estimating procedure used for that series and addithe Office of Business Economics and are published tional information on the reliability of the estimates
shortly thereafter in the Survey of Current Business. are available in a Bureau of the Census pamphlet
Sales data are also published by the Bureau of the entitled "Description of the Sample for the Monthly
Census in the Monthly Retail Trade Report. Advance Retail Trade Report."
estimates are published ten days after the report
Additional information on the seasonal adjustment
month in the Advance Monthly Retail Sales Report. of sales, including specifications for the X-9 seasonal
Beginning with data for January 1962, estimates of adjustment program are available from the Chief
weekly sales of retail stores are issued as a weekly Economic Statistician, Bureau of the Census.
report, generally on Thursday following the week Adjustments for trading day differences are similar
covered.
to that described in "Census Trading-Day AdjustMore complete descriptions of these series have ment Method", published in the May 1964 issue of
been published in the following issues of the Survey Business Cycle Developments. A description of the
of Current Business: June 1948, October 1951, retail sales series and seasonal adjustment techniques
September and November 1952, January 1954, June is also provided in the September 1964 issue of
1957, December 1961, December 1963, and in the Business Cycle Developments.
REFERENCES

22. MANUFACTURERS' SHIPMENTS, INVENTORIES, AND NEW ORDERS
DESCRIPTION OF SERIES

Manufacturers' shipments, inventories, new orders,
and unfilled orders are estimated monthly by the
Bureau of the Census. In several respects, these
series are conceptually different from the monthly
"Industry Survey/' formerly published by the Office
of Business Economics, from which they were
evolved. The changes from the earlier series are
explained in detail in the Bureau of the Census comprehensive report, "Manufacturers' Shipments, Inventories, and Orders: 1947-1963 Revised." They
include: introduction of the Annual Survey of
Manufactures as a new benchmark level, broadened
coverage, revision of the sample design, refinement of
industry reporting, expansion in the number of
industry groups published, revision of seasonal
factors, and introduction of market groupings.
Totals for all manufacturing, durable goods industries, and nondurable goods industries, have been
carried back to 1947, while figures for detailed industry and market categories are shown back to
1953.
The term "shipments" as used here represents
manufacturers' receipts, billings, or the value of
products shipped, less discounts, returns, and allowances. Shipments for export as well as those for
domestic use are included. Shipments of foreign

subsidiaries are excluded, but shipments to a foreign
subsidiary by a domestic firm are included. The
shipment figures from the Annual Survey of Manufactures to which the current series is benchmarked,
include interplant transfers as well as commercial
sales. The new orders series represents new orders
net of cancellations received during the period.
Inventory data are book values of stocks on hand
at the end of the period, seasonally adjusted, and
include materials and supplies, goods-in-process, and
finished goods. Inventories associated with the nonmanufacturing activities of the company are excluded
from the benchmark in the revised series. In
general, inventories are valued at the lower of cost or
market price.
STATISTICAL PROCEDURES

Current estimates of manufacturers7 shipments,
inventories, and orders are made on the basis of
reports received in the monthly manufactures program. The sample is defined as a subsample of the
1959 Annual Survey of Manufactures and was designed to provide estimates for approximately 55
detailed industry categories and to permit supplementary presentations of the data such as by market
groupings. As in the Annual Survey, all companies
engaged in manufacturing constituted the sampling

Manufacturers' Shipments, Inventories, and New Orders, 1947-64
(Monthly data.

Seasonally adjusted)

BILLIONS OF DOLLARS
70

INVENTORIES
\
.

•'—1

SHIP MENTS
NEW ORDERS

/-20

/ '
10

Ml.

1947

,!..!,,

llM,l..l..

<,JNI..I..

, . i M l , l l l P nlnlnl,

1948 1949 1950 1951 1952 1953 1954 1155 1956 1957 1956 1959 I960

1961

19621963 1964

SOURCE OF DATA: DEPARTMENT OF COMMERCE

units. All manufacturing companies with 1,000 or detailed category. Net new orders estimates are
more employees were included with certainty, while derived by adding the change in unfilled orders to the
smaller companies were sampled with probabilities shipments estimate.
proportional to their employment size within each
All the component series were seasonally adjusted
industry category stratum. Approximately 7,500 by the Bureau of the Census using the X-9 and X-10
versions of Census Method II. In addition, the
companies were thus drawn for the sample.
Estimates of shipments, inventories, and unfilled series on shipments and new orders were adjusted
orders are obtained for each detailed category by for the number of trading days and length of calendar
multiplying the estimate for the preceding month by month prior to seasonal adjustment. The magnithe link relatives based on a matched sample of tude of the seasonal adjustments are suggested by
reporting companies. The data for each company the comparison of shipments, orders, and inventories
are inflated by their sampling weights before being data with and without seasonal adjustment for 1963
summarized. Estimates for higher levels (subtotals on the next page.
and totals) are obtained by aggregating the related
RELATION TO OTHER SERIES
component categories within the series.
The revised shipments and inventories series are
The shipments and inventory estimates are
adjusted annually to the benchmark levels from the coordinated with a large number of monthly, quarAnnual Survey of Manufactures.. Since comparable terly, and annual surveys which are also conducted
universe data are not available for new and unfilled by the Bureau of the Census on a product-oriented
orders, a level for unfilled orders was established as basis. The shipments series is, in general, more
of August 1964 by relating a modified ratio of un- nearly comparable than before with the manufacturfilled orders to shipments obtained from the sample ing component of the Federal Reserve Board's index
to the August 1962 shipments estimates by each of industrial production.

TABLE
Shipments

22.—Manufacturers' Shipments, Inventories, and New. Orders

Inventories

New orders, net 1

Durable goods
Year

Total

NonD u r a b l e durable
goods
goods

Total

NonDurable durable
goods
goods

Total

Machinery
and
equipment

6, 388
8, 126
6,633

(44)
(4)
()

Nondurable
goods

Manufacturers'
inventory—3
sales ratio

Millions of dollars
25, 897
28, 543
26, 321

13, 061
14, 662
13, 960

12, 836
13, 884
13, 261

15, 256
17, 692
15, 614

9,785
11,219
11,243
11,488
11,524

31,
39,
41,
43,
41,

078
306
136
948
612

15,
20,
23,
25,
23,

539
991
731
878
710

15, 539
18,315
17, 405
18, 070
17, 902

20,
23,
23,
23,
22,

110
907
203
533
313

10,
12,
12,
12,
10,

165
841
061
105
743

080
715
237
572
544

12, 406
13, 025
13, 499
13, 708
14, 675

45, 069
50, 642
51, 872
.50, 070
52, 707

26,
30,
31,
30,
31,

405
447
728
095
839

18,
20,
20,
19,
20,

664
195
143
975
868

27, 423
28, 383
27, 514
26, 901
30, 679

41,
15,
14,
13,
15,

15,817
15, 532
17, 184
18, 071
19, 232

14, 979
15, 352
16, 124
16, 704
17, 892

53,
55,
57,
60,
62,

32,
32,
34,
36,
38,

360
646
326
028
311

21,
22,
23,
24,
24,

454
441
427
119
453

30,
31,
33,
35,
37,

15,
15,
17,
18,
19,

6,683
8,337
7, 167

8,817
9,768
8,925

620
702
581
823
351

8,835
10, 483
11,338
13, 335
11,827

26,
27,
28,
27,
30,

486
740
736
280
219

14,
14,
15,
13,
15,

30,
30,
33,
34,
37,

796
884
308
774
124

1947
1948
1949

15, 500
18, 105
16, 092

1950
1951
1952
1953
1954

18,
21,
22,
24,
23,

1955
1956
1957
1958
1959
1960
1961
1962
1963
1964 5____

814
087
753
147
764

115
061
167
036
682

8,868
9,566
8,981

1. 58
1.50
1. 75

(44)
()
(4)
2,084
1,770

9,945
11,066
11, 142
11,428
11,570

1.48
1.66
1.78
1.76
1.81

954
381
073
170
951

2,499
2,870
2,566
2,354
2,878

12, 469
13, 002
13, 441
13, 731
14, 728

1.62
1. 73
1.80
1. 84
1. 70

223
664
085
300
797

2,791
2,854
3,090
3,326
3,700

14, 892
15, 397
16, 082
16, 736
17, 886

1.76
1.74
1.70
1. 69
1. 64

1
Monthly average for the year.
2 Book value, end of year, seasonally adjusted.
Ratio of weighted average inventories to average monthly shipments.
45 Not available.
Preliminary.
Source: Department of Commerce.
3

The manufacturers' shipments and inventories
series are closely related to the sales and inventories
series for merchant wholesalers and retail trade. The
shipments and inventories series are not entirely
comparable to the sales and inventories series which
are compiled on a company-oriented basis, particularly the FTC-SEC "Quarterly Financial Report
for Manufacturing Corporations'' and Internal Revenue Service, "Statistics of Income, Corporation
Income Tax Returns/'
The manufacturers' inventory data, together with
inventory data for retailers and merchant wholesalers, are the basic data used in computing estimates
of the "change in business inventories" component
of Gross Private Domestic Investment. In measuring the change in business inventories, the book
value inventory change data are adjusted to remove
the etfect of changes in replacement costs.
The new orders estimates are most closely related
to the Census unfilled orders series, although they

Comparison of Shipments, Inventories, and Orders Data With
and Without Seasonal Adjustments, 1963
[Dollar figures in billions]

Jan
Feb___
Mar
Apr
May
June
July__.
Aug___
Sept___
Oct
Nov__.
Dec___
1

Without seasonal
adjustment

Seasonally adjusted

Shipments x

Inventories

Shipments l

Inventories

Shipments

Inventories

58.0
58. 4
58. 4
58.6
58.9
59.0
58.6
58.7
58.8
59. 0
59.4
59.7

33. 5
34. 1
34. 2
34.6
34.8
34.9
35.6

57.9
58.0
58. 1
58.3
58.5
58.7

93. 1
101.8
102.4
102.5
100. 5
104.5
91. 9
97.2
103.9
104. 6
101. 1
96. 0

100. 2
100. 6
100.5
100.4
100.7
100. 5
99.5
99.6
99.6
99.5
99.4
99.3

31. 2
34. 7
35. 1
35.4
35. 0
36. 5
32.7
32.8
36. 0
36. 8
35.4
34. 6

34.7
34.7
35. 2
35.0
36. 0

58. 9
58.9
59. 1
59.3
59.8
60. 1

Implicit seasonal
adjustment factors

Adjusted for trading-day and calendar-month variation.

are also akin to other anticipatory series such as new
plant and equipment expenditures, construction
contracts, etc.

Although the objectives of the Bureau ultimately
are to publish detail and samoling errors for approxiThe manufacturers shipments, inventories, and
mately 55 industry categories and 12 market grouporders series reflect present and prospective condiings, data are currently shown separately for only 14
tions in this vital sector of the economy. The
two-digit major industry groupings, 16 detailed
shipments series reflect the demand for the goods and
industry categories, 6 market categories and 3
services of manufacturers; trends in the inventories
supplementary series. The current response rate
and changes in inventories series reflect the difference
precludes the publication of sampling errors or
between production and shipments of manufactures;
additional detail at this time, particularly in inthe new orders series indicates the probable course of
dustries which are predominantly comprised of small
manufacturers' activity in some industries in the
firms such as apparel, lumber, and furniture. In
immediate future. Study of the chart showing
addition, there are a few industry categories for
seasonally adjusted shipments, inventories, and new
which the inclusion of secondary activities is conorders will reveal the tendency of new orders to lead
sidered to be too high and for which additional
shipments over the business cycle.
divisional reporting is necessary. The Bureau of the
The market groupings provide a breakdown Census in studying various approaches to these
between final products and materials and a further problems which would permit a gradual increase in
division of final products between consumer goods published data until the long-range goals are
and equipment for business and government use. achieved.
Subtotals are shown for home goods and apparel and
REFERENCES
for consumer staples within the consumer goods
division, while materials, including supplies and
Detailed data for manufacturers' shipments,
intermediate products are subdivided into construc- inventories, and orders are published by the Bureau
tion materials and all other. Such economic time of the Census in its Current Industrial Report M3-1,
series provide useful measures for isolating the "Manufacturers' Shipments, Inventories, and
impact of changes in demand in various sectors of the Orders." Selected series are published by the Office
economy and facilitate analysis of cyclical and growth of Business Economics in the Survey oj Current
developments.
Business and by the Census Bureau in Business
The user should keep in mind the conceptual Cycle Developments. A detailed explanation of the
differences between the new series and the old revisions made to the survey as well as revised
monthly Industry Survey series. In summary, the historical data are published in the background
7
new series (1) reflects only manufacturing activities report, Manufacturers Shipments, Inventories, and
from its Annual Survey benchmark basis, (2) is Orders: 1947-1963 Revised. A supplementary chartbased on the 1957 SIC system, (3) excludes significant book shows seasonally adjusted data for each of the
nonmanufacturing activities of companies, and (4) series published in its monthly M-3 survey, "Manuincludes interplant as well as intercompany sales. facturers' Shipments, Inventories, and Orders" for
Although the two series exhibited similar cyclical the years 1953-1963. Charts are provided for inmovements and approximate the same levels on an dustry groupings, market groupings, and suppleoverall basis, the component series differed rather mentary series such as machinery and equipment
industries, consumer durables, and defense products.
substantially, particularly with regard to level.
USES AND LIMITATIONS

23. 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 reexports. Both series as presented here are sometimes
designated "commercial" because of the exclusion of
data on Department of Defense shipments of grantaid 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. Ship-

ments to United States armed forces and diplomatic
missions abroad for their own use are also excluded.
Export series covers all exports from within the
customs area of the United States, which includes
all of the States and Puerto Rico (and inducted 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 at actual selling price, or at 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

Merchandise Exports and Imports, 1947-64
(Monthly data.

Seasonally adjusted)

BILLIONS OF DOLLARS
2.5
SEASONALLY ADJUSTED

2.0

MERCHANDISE EXPORTS"'
1.5

1.0 —

ftV
V

IMI.I

1948

lll"ln|n

1949 1950

MIMI,,IM

1951

J
^

GENERAL IMPOR rs

nl,,

..1.,l..l.. I I I . ' I ' H H

1952

1953

1954

SOURCE OF DATA: DEPARTMENT OF COMMERCE. AND DEPARTMENT OF DEFENSE.
i / S E E NOTE I ON TABLE.

19551956

1957

UIM

,,l,,l,,lM

1958 1959

Ml,,l,,l,,

19601961

..IMIMIM

1962

1963

1964

cover merchandise which is released from customs
custody 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, in-transit 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. Prior to January 1962, in actual practice
only the values reported for imports subject to an ad
valorem rate of duty (a percentage of the value)
tended to conform precisely to the valuation definition.
For merchandise not subject to an ad valorem rate
of duty (80-90 percent of imports), the reported
values prior to 1962 may not be in accordance with
the market value in the foreign country. For
example, ocean freight may be included inadvertently
in the values, data for shipments between allied
firms may reflect arbitrary values, etc. Beginning
January 1962, procedures were inaugurated for the
verification by Customs examiners of statistical
factors on import entries, and close conformity with
the Tariff Act value definition is expected regardless
of whether the item involved is dutiable at an ad
valorem rate. 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, 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 to Canada valued at
$100-$l,999 are sampled at a ratio of 10 percent
while shipments to countries other than Canada
valued at $100-$499 are sampled at a ratio of 50
percent. The value of shipments valued at below
$100, accounting in 1963 for a little less than 1 percent of total exports by value, is estimated 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
the United States, and on which importers report
value, country of origin, type of commodity, classified in accordance with the prescribed import commodity classification, and other essential information.
After a review by Customs, the statistical copy of the
entry form is transmitted to the Bureau of the
Census. Statistics covering low valued import shipments are estimated on the basis of a sample. The
sampling procedures have varied. Currently a one
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 1963 at about 1 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 ratio-

to-moving-average method. The seasonal adjustment factors used in 1964 are:
January
February
March
April
May
June
July
August
September
October
November
December

Imports

Exports
excluding
MSP

97. 0
100. 6
102. 4
100. 6
98. 0
103. 8
96. 7
96. 3
99. 1
103. 5
101. 2
N.A.

95. 3
103. 6
102. 7
105.0
105. 1
103. 3
92. 6
91. 8
92. 8
101. 6
104. 0
N.A.

N.A. = Not available.

RELATION TO OTHER SERIES

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,
and roughly equivalent to, the series shown here for
total exports (including re-exports) net of D.O.D.
military aid shipments and for general imports. The
series are further adjusted by exclusion of other
military shipments and by other adjustments with
respect to coverage, valuation, and timing, for consistency with balance of payments concepts. The
seasonally adjusted quarterly figures for merchandise exports and imports will not necessarily agree
precisely with corresponding quarterly totals compiled from the seasonally adjusted monthly series
in the balance of payments because they differ in
content. (See discussion in Balance of Payments
Section which follows.)

Statistics of exports and imports are available in
Census and other Government publications on bases
varying with respect to the treatment of re-exports,
of D.O.D. military aid shipments, of goods entering
USES AND LIMITATIONS
into or withdrawn from Customs bonded warehouses
These summary series provide useful monthly
and other matters, depending on the purpose of the
indicators
of the movement of merchandise exports
presentation. The series here shown are among
and
imports.
As a measure of cyclical or long-term
those presented in monthly Census releases, with
movement,
monthly
foreign trade data, even after
certain qualifications.
seasonal
adjustment,
are erratic. While these data
Thus, monthly Census data for exports by ecowill
necessarily
be
followed
by users from month to
nomic classes are for total exports of domestic
month,
judgments
as
to
trend
are more properly
merchandise, in contrast with the series shown here
based
on
derived
series
for
longer
periods such as
exclusive of D.O.D. military aid shipments; howquarterly
or
three-month
moving
totals.
ever, this affects only the category of "finished
Although merchandise trade bulks large among the
manufactures," since all D.O.D. military aid shipments are allocated to this class (military aid sources of international payments, the balance of payshipments amounting to about 4 percent of total ments can be comprehended only in terms of the full
exports in 1963). The seasonally adjusted series range of merchandise, service, capital, unilateral and
other transactions. Undue importance should not be
was published for the first time in 1960.
The economic classes as presented here are derived attached to the trade figures alone or to the surplus
from the five Census classes of "crude foodstuffs'7 or deficit in merchandise trade.
Because of the variety of bases on which foreign
and "manufactured foodstuffs" (combined as "foodstuffs"), "crude materials" and "semimanufactures" trade data are presented the user must be attentive
(combined as "industrial materials") and "finished to the precise specifications of particular series,
manufactures." The indexes of quantum, value, especially when they are to be used with or compared
and unit value for foreign trade, prepared by the with other series. Similarly, when U.S. trade statisBureau of International Commerce, Department of tics are compared with those of other countries, speCommerce, are available by economic class for cial attention is due to the extent to which the series
exports of domestic merchandise on the same basis differ as to valuation and coverage.
as the corresponding series shown here (i.e., net of
REFERENCES
D.O.D. military aid shipments) and for imports for
consumption. The indexes are also available for
Totals for exports of domestic and foreign mertotal domestic exports inclusive of such D.O.D. chandise, general imports and imports for consumpshipments.
tion are published monthly in the Census Bureau's
Series for merchandise exports and imports appear United States Foreign Trade summary reports (FT
as major components of the balance of international 900 E and I, 930 E and I, 950 E and I, and 970 E and

TABLE

23.—Merchandise Exports and Imports
[Millions of dollars monthly average]
Merchandise imports

Merchandise exports

Year

Imports for consumption

Domestic exports

Total
(including1
re-exports)
Total i

Foodstuffs 2

Indus- Finished
trial
manufacmaterial! tures l

General
imports

Total 3

Foodstuffs

Merchandise trade
surplus

Indus- Finished
trial
manufacmaterials
tures

1929

437

430

156

211

367

204

1930.
1931 _
1932.
1933 _
1934_

320
202
134
140
178

315
198
131
137
175

45
31
20
17
19

112
74
59
69
83

158
93
52
51
73

255
174
110
121
138

255
174
110
119
136

58
44
34
35
43

134
85
48
59
64

63
46
28
27
29

65
28
24
19
40

1935.
1936_
1937 _
1938.
1939.

190
205
279
258
265

187
202
275
255
260

18
17
24
36
26

86
89
117
92
95

83
96
135
127
139

171
202
257
163
193

170
202
251
163
190

53
61
71
48
50

83
102
134
80
103

34
39
46
35
37

19
3
22
95
72

1940
1941
1942
1943
1944

335
429
673
1,080
1, 188

328
418
667
1,070
1, 180

20
42
83
140
150

114
94
111
146
138

194
281
472
784
892

219
279
230
282
327

212
268
232
283
324

47
58
52
84
114

131
175
142
143
149

34
35
38
56
62

116
150
443
798
861

1945
1946
1947
1948
1949

817
812
1, 278
1,054
1, 004

799
792
1,263
1,044
995

143
184
263
219
187

138
193
282
238
261

518
415
719
587
546

347
412
481
594
553

342
402
474
593
551

96
110
139
167
173

176
222
252
317
274

69
71
82
109
104

470
400
797
460
451

1950
1951.
1952
1953
1954

833
1, 164
1, 100
1,022
1, 071

822
1, 151
1,088
1, 012
1, 060

116
190
175
143
131

251
345
300
254
310

455
616
612
614
620

740
917
896
910
858

730
904
899
902
860

221
258
263
274
276

384
488
462
444
400

125
158
174
183
183

93
247
204
112
213

1955
1956
1957
1958
1959

1, 191
1, 154
1,625
1, 364
1,366

1, 180
1, 432
1,611
1, 351
1, 352

162
216
208
198
210

351
441
530
368
366

667
775
872
784
776

954
056
102
101
284

260
267
274
288
285

477
521
534
489
569

217
268
294
326
431

233
380
520
259
64

1960.
1961.
1962.
1963
1964.

1, 633
1, 679
1, 745
1,869
2, 135

1,
1,
1,
1,
2,

230
254
281
314
348

510
486
440
494
566

251
221
354
417
550

274
277
297
310
316

539
522
561
574
615

438
423
496
532
605

382
453
379
440
578

617
659
723
845
106

877
919
1,002
1, 031
1, 150

958
1, 064
1, 105
1 105
1, 302
1,251
1, 226
1, 366
1, 428
1,557

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.C.A. and predecessor programs, UNRRA, 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.

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. Detailed commodity by country data are also published by the Census Bureau.
Supplementary information is available 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. This information, formerly published in a monthly pamphlet
Foreign Trade Statistics Notes, has been carried since
January 1961 in the statistical reports themselves.

Indexes of foreign trade (quantity, unit value, and
value) are computed by the Bureau of International
Commerce of the Department of Commerce in its
Overseas Business Reports.
Summary explanations of the export and import
series appear in the introductory notes of Census
monthly bulletins FT 410 and 420 (exports) and FT
125 (imports). The last comprehensive discussion
of the series appeared in the 1946 edition of Foreign
Commerce and Navigation of the United States (issued
in 1950) and is still generally applicable. A complete list of all Census publications in the field of
foreign trade is available in the Bureau of the Census
Catalog.

24 and 25. UNITED STATES BALANCE OF INTERNATIONAL PAYMENTS
All reported or recorded foreign transactions or
those which can be estimated on the basis of sample
data are summarized under general categories shown
in the balance of payments. Since not all transactions can be accurately measured or estimated, a
discrepancy between total payments and total
receipts regularly appears which is designated
"errors and unrecorded transactions."

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 tables here presented are
derived from the more detailed regular quarterly
presentation published by the Office of Business
Economics, Department of Commerce.

U.S. Exports and Imports of Goods and Services, 1947-64
(Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
50
SEASONALLY ADJUSTED ANNUAL RATES

EXPORTS OF GOODS AND SERVICES
20

IMPORTS OF GOODS AND SERVICES
1950

1951

1952

SOURCE: DEPARTMENT OF COMMERCE

1954

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

TABLE

24.—U.S. Exports and Imports oj Goods and Services
[Millions of dollars]
Addendum:
goods and
services financed by
Government
Other
grants and
services
capital

Exports3 of goods and services

Period
Total

Merchandise 1

Military
sales

Income on
investments

Imports of goods and services

Total

Merchandise x

Private Government
(8)

5,886

4,463

1,373

1,148

479
381
280
229
300

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

4,416
3,125
2,067
2,044
2,374

3,104
2,120
1,343
1,510
1,763

49
48

1,263

1,032

957

677

516
407
358
601

340
380
525
508
544

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

3,137
3,424
4,256
3,045
3,366

2,462
2,546
3,181

667

1,009
2,068
3,510
3,896

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

3,636
4,486
5,356
8,096
8,986

2,698
3,416
3,499
4,599
5,043

1, 036
1,238
1, 297

17
21
66
102
98

3,211
2,256
*2, 620
2, 256
2, 226

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

10, 232
6,991
8,208
10, 349
9,621

5,245
5,073
5, 979
7,563
6,879

182-

1,484
1,684
1,624
1,658
1, 955

109
198
204
252
272

2,097
2,739
2,845
2,564
2, 551

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

12, 028
15, 073
15, 766
16, 561
15, 931

9, 108
11,202
10, 838
10, 990
10, 354

14, 280
17, 379
19, 390
16, 264
16, 282

200
161
375
300
302

2, 170
2,468
2,612
2,538
2,694

274
194
205
307
349

2,880
3,393
3, 899
3, 658
3,849

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

17, 795
19, 628
20, 752
20, 861
23, 342

19, 459
19,913
20, 576
21, 989

335
402
656
659

2,911
3,464
3, 850
3, 969

349
380
471
498

3,
4,
4,
4,

23,
22,
25,
26,

5,347

(2)

1930___
1931.-.
1932___
1933_1934___

5,448
3,641
2,474
2,402
2,975

3,929
2,494
1,667
1,736
2,238

()
(2)
(2)
(2)

1935
1936—
1937—
1938__.
1939___

3,265
3,539
4,553
4,336
4,432

2,404

(2)

1940___ 5,355
1941___ 6,896
1942
11,769
1943___ 19,134
1944_._ 21,438

4,124
5,343
9,187
15,115
16,969

1945___
1946___
1947___
1948__.
1949__.

16,
14,
19,
16,
15,

273
735
737
789
770

12, 472
11, 707
16, 015
13, 193
12, 149

1950___
1951___
1952___
1953___
1954___

13, 807
18, 744
17, 992
16, 947
17, 759

10, 117
14, 123
13, 319
12, 281
12, 799

1955.__
1956___
1957___
1958___
1958...

19, 804
23, 595
26, 481
23, 067
23, 476

I960—
1961___
1962___
1963___

27,
28,
30,
32,

044
438
084
020

Miliand
tary ex- Other
pendi- services services
tures

548

7,034

1929___

Balance on
goods

2,590
3,451
3,243
3,347

(2)

( )

982
876
674
460
417
437
521
567

157
164
92
67
20

2
1

(2)

576
583

(2)

539

561
535
496
497
556

3
9
18"
12
17

(2)

(2)
(2)
(2)
'(2)

(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)

192

572
751

990
279
531
905

2, 239
2,687
2, 908
3,338

193
852
021
335

41
34

493
577
634
840

128
115
297

41
41
46

1,034

831
911

1,291
1,066

61
162
953

877
908
904

1,763
1,982

1,734
1,961

1,719
2,410
6,413
11,038
12,452

2,434

2,553
1,425
1,774
1,987
2, 121

6,041
7,744
11, 529
6,440
6, 149

1,270
2,054
2,615
2, 642

2,344
2, 601
2,874
2,956
2,935

1, 779
3,671
2, 226

11, 527
12, 804
13, 291
12, 952
15, 310

2,901
2, 949
3,216r
3, 43 )
3, 107

3,367
3, 875
4, 245
4,474
4, 925

2, 009
3,967
5,729
2,206

14, 723
14, 497
16, 134
16, 996

3, 048
2, 954
3,044
2, 897

5,422
5, 401
5, 843
6,442

3,851
5, 586
5,063
5,685

2,173
2,409

493
455
799
621
576

386

1,828

134

1
2
3

Adjusted from Customs data for differences in timinf? and coverage.
Military transactions for cash and credit prior to 1953 are included in "Merchandise" and in "Other Services". Prior to 1941 there were no such transactions.
Not available. Estimates of this type have not been carried back beyond 1960.
Source: Department of Commerce.

In the Office of Business Economics presentation
a balance is struck in such a way as to emphasize the
effect of these transactions on the international
liquidity position of the United States. The OBE
does this in more than one wa}r. It presents in its
regular releases an overall balance, which is the
algebraic sum of all transactions other than those

which specifically measure changes in official reserve
assets (gold, convertible currencies, and the gold
tranche position in the International Monetary Fund)
and in liquid liabilities to foreigners. It also presents a balance on "regular transactions", from which
are excluded certain Government transactions which
are affected by wide variations or are limited in

U.S.

Balance of International Payments, 1950-64
(Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
SEASONALLY ADJUSTED ANNUAL RATES
10

BALANCE ON GOODS AND SERVICES

BALANCE ON OTHER REGULAR TRANSACTIONS

-10

I I 1 IIII I

-20

I I I1 II[I III I1 1I 1 III 1II 1I II I III II1I I I I III II 1I I I I

OVERALL

BALANCE (Surplus or Deficit (-)

yy
-10

jUU
LJ

"HF

I I I

1950 1 9 5 1

1952

i i i

1953

1 i

1 1

nil

I I

ULI

L1U1J1JLJU U """ M
I I I 1 I l 1

1 9 5 4 1 9 5 5 1 9 5 6 1 9 5 7 1 9 5 8 1 9 5 9 1 9 6 0 1961 1 9 6 2 1 9 6 3

1964

SOURCE: DEPARTMENT OF COMMERCE

amount and duration. The major types of such
"special" transactions are advance repayment of
foreign loans, advances on military sales contracts,
and Government borrowing abroad through the sale
of medium-term nonmarketable securities. While
conceding that these receipts do improve the overall
balance, the compilers regard the balance on "regular" transactions, which excludes them, as a better
indication of the longer run balance of payments
problem. Data on special Government transactions
were not separated from other transactions prior to
1959.
Table 25 shows only the balance on regular
transactions. This is the algebraic sum of all payments and receipts as summarized under major
categories in the columns to the left of this balance,
and in the "balance on goods and services" (the final
column in table 24 on "U.S. Exports and Imports of
Goods and Services"), and of certain other transactions (notably remittances and pensions resulting in
recent years in net payments of between $700 and
$900 million per year), which are not shown separately but are included in the total. For the balance and for all columns to the left, net receipts are
shown as without sign and net payments as (—);
for the columns to the right, unsigned numbers mean

a decrease in liquidity while increases in liquidity are
designated (—).
Transactions reflected in the "Balance on goods
and services" are shown in more detail and on a
gross basis in the table 24. They include mainly
merchandise trade, but also military sales and purchases, income on investments, both private and
governmental, transportation services, travel expenditures, and miscellaneous transactions.
"Goods and services financed by Government
grants and capital" represents an estimate of payments by the Government itself to U.S. suppliers,
and of reimbursements to foreign buyers for amounts
they paid to U.S. suppliers under specific purchase
authorizations under foreign assistance programs.
The figures do not include the use by foreign Governments or other foreign residents for purchases in
the United States of funds originally provided to
them under assistance programs if such purchases are
not specified in the assistance agreements.
The figures do not purport to measure the actual
net effect of foreign assistance programs on exports
of goods or services. This would involve assumptions concerning the amount of exports that would
have occurred in the absence of the assistance
programs to the country receiving the assistance and
to other countries which may be affected indirectly.

TABLE

25.—United States Balance of International Payments
[Millions of dollars]
Chariges in selected
liabilities
(decrease ( — )) 6

U.S. private capital, net

Period

Changes in
gold convertible

Government
grants
and

capital,
net1

Direct
invest-

ment

Longterm
port-2
folio

Errors
Foreign and uncapital recorded
net 3
transShortactions
term

Selected To foreign official
Balance special
holders 7
currencies,
on reg- Governand IMF,
ular
ment
gold
trans- 4 trans- 5 Special
To other tranche
actions actions
nonforeign
position.
marketholders 8 (increase
able
Other
(-))

convert-

ible
bonds
and notes
1929—

-602

-34

-200

358

-384

1930___
1931___
1932___
1933___
1934___

-294
-222
-16
32
-17

-70
350
267
-80
202

-191

14
26
-7
-5

66
66
-26
125
15

320
99
79
61
412

1935___
1936___
1937___
1938___
1939_._

1
3
2
-9
-14

34
-12
35
16
9

82
189
241
24
104

427
52
43
36
226

320
600
245
-86

364
157
425
249
788

1940___
1941___
1942___
1943___
1944___

1,277

177
21
96
-12
-85

-90

-1,323
- 6 , 525
- 1 2 , 847
- 1 4 , 077

36
19
-84
-58
-62

1945___
1946___
1947___
1948___
1949—

-7,561
-5,293
- 6 , 121
- 4 , 918
-5,649

-100
-230
-749
-721
-660

-354

-96

127
-49
-69
-80

-310
-189
-116

1950__1951___
1952___
1953___
1954___

-3,640
- 3 , 191
- 2 , 380
- 2 , 055
- 1 , 554

-621
-508
-852
-735
-667

-495
-437
-214

-149
-103

185

-94
167

-320

-635

1955___
1956___
1957___
1958___
1959___

-2,211
- 2 , 362
-2,574
-2,587
-2,421

-823
- 1 , 951
- 2 , 442
- 1 , 181
-1,372

-241
-603
-859
-1,444
-926

-191
-517
-276
-311

1960___
1961___
1962___
1963 —

-2,781
-3,396
- 3 , 547
- 3 , 785

- 1 , 674
-863 -1,348
-1,599 -1,025 -1,556
- 1 , 654 - 1 , 2 2 7
-553
- 1 , 8 8 8 - 1 , 685
-734

19
98
71

628
227
42
104

187

-77

-53

(9)

(10)

196

-143

598

(9)
(9)
(9)
(9)
(9)

(10)
(10)
(10)
(10)
(10)

-288
- 1 , 265
-673
-454

-310

(9)
(9)
(9)
(9)
(9)

(10)
(10)
(10)
(10)
(10)

648
376
311
317

1, 132
726
323

1, 140
1, 174
896

1,053
1,482
1,915

2,890
476
1, 119
-8
-205
34 - 1 , 9 7 9
- 3 7 - 1 , 859

()
(9)
(9)
(9)
(9)

(10)
(10)
(10)
(10)
(10)

8 -2,737
195
1,261
936
4,567
175

(9)
(9)
(9)
(9)
(9)

(10)
(10)
(10)
(10)
(10)

90
243
212
178
240

- 2 1 -3,580
477
-305
601 - 1 , 046
339 - 2 , 152
173 - 1 , 5 5 0

(9)
(99)
()
(9)
(9)

(10)
(10)
(10)
(10)
(10)

394
653
487
22
863

503 - 1 , 145
543
-935
520
1, 157
488 - 3 , 529
412 - 4 , 178

()
(9)
(9)
(9)
435

(10)
(10)
(10)
(10)
(10)

37
701

(10)
(10)
(10)

-327

-84
-63
175

-104
-347
-75

-173
83

1, 179
775

-772
341
622
-998
162 - 1 , 111
311
-339

1,005

-3,918
- 3 , 071
- 3 , 605
- 3 , 261

1,402

617

702

133
-53
131

126

- 1 , 266
- 1 , 822
-1,272
-1,364
-1,799
- 3 , 174
-4,243

1,259
1,353
-400

-719
23
757
1,350

182

1,222

509

2, 189
-638
- 1 , 252

548

-623
- 3 , 315
- 1 , 736
-266

731
91

1, 554
-505
1,237
848

1,043

268

1,758

843
224
48
27

-415
1,256

1, 130
20
735

404
674
625
502

1, 248

559

-33
480
182

1,460

-869
- 1 , 165
2, 292
1, 035

1,449

289

2, 143

681
457
970

1,083

213
594

606

1,533
378

1
2
3
4

Includes associated Govt. liabilities and scheduled loan repayments.
Includes banking claims.
Other than liquid funds; includes miscellaneous Govt. nonliquid liabilities.
Includes balance on goods and services as well as net pensions and remittance payments ($826 million in 1963). Prior to 1959 this is referred as the overall
balance.
5
Includes official debt prepayment, advances on military exports, and net sales of those nonmarketable, medium-term, nonconvertible securities not included
under
foreign capital.
6
Includes
short-term official and banking liabilities and foreign holdings of U.S. Govt. bonds and notes (other than nonmarketable, nonconvertible).
7
Central banks and governments.
8
Private holders; includes banks and international and regional organizations. Excludes liabilities to I M F relevant to U.S. gold tranche position. Data were not
collected
separately for liabilities to foreign officials and to other holders prior to 1950.
9
This category of transaction first distinguished in 1959. No comparable transactions of consequence have been identified for prior years.
10
No such transactions prior to 1963.
NOTE.—Data exclude military grant aid and U.S. subscriptions to I M F .
Source: Department of Commerce.

Such assumptions would have to vary from country abroad and from foreign travelers on their expendito country and from one time period to another.
tures in the United States, together with travel
The item "Government grants and capital'' statistics of the Immigration and Naturalization
includes Government grants other than military Service; reports to the Treasury Department on interunder the various aid programs, and the net outflow national claims and liabilities; and a variety of other
of long-term capital through various foreign lending sources including Government administrative data,
programs. ''U.S. private capital" refers to invest- and questionnaire surveys of the Office of Business
ment of U.S. capital abroad, and is classified as: Economics.
(a) "direct investment/7 which includes investments
Balance of payments series manifesting seasonal
in foreign branches and subsidiaries; or (6) "long- variation are separately adjusted, including the
term portfolio", which includes long-term security in- unrecorded items, and the resultant effect of these
vestments not entailing effective control; or (c) "short- adjustments becomes the seasonal adjustment for
term" investment—i.e., in loans or instruments with the balance, whether computed on an overall basis
an original maturity of one year or less. "Foreign or for "regular" transactions. Series shown to the
capital" includes corresponding foreign investments right of the balance are not individually adjusted,
in the United States exclusive of certain liquid and are shown as unadjusted in the monthly Econinvestments which are, as explained below, accounted nomic Indicators.
for as a component of the surplus or deficit. Foreign
RELATION TO OTHER SERIES
capital movements have usually resulted in the past
in net "receipts," but do not necessarily do so.
Since the balance of payments is a synthesis of
The "balance" is equal to the algebraic sum (with data from a variety of sources, a close relationship
sign reversed) of the columns to the right, which exists between various components of the balance
summarize the special Government transactions, of payments and certain other bodies of published
changes in official reserve assets, and changes in data. Because of technical adjustments to balance
liquid liabilities to foreigners and international or- of payments concepts, which cannot be detailed
ganizations in the form of deposits, U.S. Govern- here, the components will ordinarily differ somewhat
ment securities, bankers acceptances, commercial from the related sources. Among the important
paper, and certain other short-term liabilities of the bodies of related data are; data on merchandise
United States.
exports and imports published by the Bureau of
the Census; data on U.S. Government aid as pubSTATISTICAL PROCEDURES
lished in the Office of Business Economics semiThe preparation of the balance of payments in- annual bulletin Foreign Grants and Credits oj the
volves the bringing together, and the adjustment to United States; annual estimates of the international
balance of payments concepts, of data from a variety debtor-creditor position of the United States as
of sources, including direct reports to the Office of^ published in the Survey of Current Business; and
Business Economics. The largest components are data on international capital transactions of the
those for' merchandise imports and exports, as pub- United States as published by the Treasury Departlished by the Bureau of the Census, subject to certain ment in the Treasury Bulletin. Balance of payadjustments for coverage, valuation, and timing. ments data with certain further adjustments are
Other sources include quarterly reports by U.S. used as a component of the national income and
companies with branches or subsidiaries abroad and products accounts, summarized under the categories
by branches and subsidiaries of foreign companies of exports and imports. However, the concepts
in the United States; occasional "benchmark" in the national income accounts for imports and
surveys of U.S. investments abroad and of foreign exports of goods and services are not in complete
investments in the United States; reports from U.S. agreement with those used here.
Government agencies on their foreign transactions,
The regular quarterly balance of payments presenincluding grants, loans, and purchases and sales; tation in the Survey of Current Business shows
reports from U.S. and foreign shipping lines and transactions with major areas of the world, and
financial data from the Maritime Administration; gives a more detailed classification of transactions
reports from U.S. travelers on their expenditures by type.

USES AND LIMITATIONS

REFERENCES

The balance of payments presents an integrated
summary of international transactions and their
relation to the international financial position of
the United States. A major contribution is the
presentation of individual components in their proper
context in the total flow of international transactions.
The interrelationships within the balance of payments are complex and no discussion of analytical
technique can be attempted here.
The balance of payments lends itself to more than
one form of presentation, and variations from the
form here used may be found in the regular quarterly
articles of the Survey of Current Business.
The "unrecorded transactions" reflect a significant
and fluctuating difference between the net surplus
or deficit figure arrived at independently by (a)
netting all measured payments and receipts on account of gold, convertible currencies and liquid
liabilities to foreigners, and (b) netting all other
measured payments and receipts. The reduction of
the errors and omissions through more complete
reporting presents considerable difficulty because of
the elusiveness of many international transactions
and some caution is indicated in the interpretation
of the balance of payments and its components.

The most complete discussion of balance of payments concepts used and of statistical sources and
techniques is contained in the 1952 Supplement to
the Survey of Current Business entitled Balance of
Payments of the United States: 1949-51, although
there have been subsequent developments in sources
and technique. Later briefer statements of sources
may be found in Business Statistics, 1959 Edition, and
in the Census publication, Historical Statistics of the
United States: Colonial Times to 1957. A Balance of
Payments Statistical Supplement (to the Survey of
Current Business) of 1958 gives detailed global
figures by quarters for the period 1919-1956 and by
areas for 1946-1956. Historical Statistics gives available, but fragmentary, data back to 1790. The
Survey of Current Business carries balance of payments data regularly, with quarterly and annual
detailed tables and explanatory text, as well as
regular articles detailing developments in major
components of balance of payments accounts.
Note: As this is written, the Review Committee
for Balance of Payments Statistics—a group of nongovernmental experts appointed in 1963 to appraise
the balance of payments statistics and to make
recommendations for their improvement—is preparing a report to the Bureau of the Budget on
these data which is expected to be published in
early 1965.

40-752 0—65

PRICES
26. CONSUMER PRICES
furnishings, household supplies, fuel, drugs, and
recreational
goods; fees to doctors, lawyers, beauty
The Consumer Price Index compiled by the Bushops,
rent,
repair
costs, transportation fares, public
reau of Labor Statistics, is a measure of changes in
utility
rates,
etc.
It deals with prices actually
prices of goods and services purchased by urban
charged
to
consumers,
including sales and excise
wage earners and clerical workers. The index is
taxes.
It
also
includes
real
estate taxes on owned
often called the "cost-of-living" index, but its official
homes,
but
it
does
not
include
income or social
name is Consumer Price Index for Urban Wage
security
taxes.
Earners and Clerical Workers. Prior to January 1964
The index is based upon prices of about 400 items
a complete name for the index was "Index of Change
collected
in 50 cities. The 400 items were selected
in Prices of Goods and Services Purchased by City
by
the
BLS
as representative of the thousands of
Wage-Earner and Clerical-Worker Families to Maincommodities
and
services purchased by wage earners
tain Their Level of Living." Through December
1963, the index applied only to families of two or more and salaried clerical workers, as reported in a survey
persons. With the January 1964 index, the coverage conducted in 66 cities. Detailed specifications are
was extended to include single workers living alone. used to identify each of the 400 items so that, insofar
The index covers prices of everything people buy as possible, prices are obtained for articles of the
for living—food, clothing, automobiles, homes, house- same quality in successive periods. Revisions in the
DESCRIPTION OF SERIES

Consumer Prices, 1947-64
(Monthly data)
INDEX: 1957-59 = 100
125

105

1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

SOURCE OF DATA: DEPARTMENT OF LABOR

1964

TABLE

26.—Consumer Prices
[1957-59=100]

Commodities
Year

All items

Services

Commodities less food
All commodities :

Food

All

Durable

All
services

Nondurable

Rent

Services
less rent 2

1929

59. 7

55. 6

85.4

1930
1931
1932
1933
1934

58. 2
53. 0
47. 6
45. 1
46. 6

52. 9
43. 6
36.3
35. 3
39. 3

83. 1
78. 7
70. 6
60. 8
57. 0

1935
1936
1937
1938
1939

47. 8
48.3
50. 0
49. 1
48. 4

45. 0
45. 6
47.4
45. 6
44. 7

42. 1
42. 5
44. 2
41. 0
39.9

50.3
50.9
53.1
53.1
52.2

47.1
47.8
50.8
51.7
50.6

48.8
49.2
51.2
50.9
50. 1

52.3
52.9
54.5
55.5
55.6

56.9
58.3
60.9
62.9
63.0

49.5
49.2
49.7
50.1
50.1

1940
1941
1942.
1943.
1944.

48. 8
51.3
56. 8
60. 3
61. 3

45.
48.
55.
60.
60.

1
2
2
1
8

40. 5
44. 2
51. 9
57. 9
57. 1

52.5
55. 1
61.3
63.9
67.4

50.2
53.7
60.9
63.0
68.7

50.6
52.8
58.4
60.9
64.0

55.8
56.5
58.3
59.4
60.8

63.2
64.3
65.7
65.7
65.9

50.2
50.7
53.0
55.3
58.1

1945.
1946.
1947.
1948.
1949.

62. 7
68.0
77. 8
83. 8
83. 0

62. 6
69. 4
83. 4
89. 4
87. 1

58. 4
66. 9
81.3
88. 2
84. 7

70.1
74.4
84.0
90.4
89. 1

73.9
77.4
83.8
90.0
91.3

66.3
71.1
81.7
88.0
86.3

61.6
62.8
65.4
69.5
72.7

66.1
66.5
68.7
73.2
76.4

59.2
61.4
64.5
68.2
71.6

1950.
1951.
1952.
1953.
1954.

83.8
90.5
92.5
93.2
93.6

87.6
95.5
96. 7
96.4
95.4

85. 8
95. 4
97. 1
95.6
95.4

89.0
95.7
96.5
96.6
95.6

92.3
99.3
100.6
99.5
97.1

86.2
92.7
93.2
94.0
94.4

75.1
79.0
82.6
86.0
88.7

79.1
82.3
85.7
90.3
93.5

73.6
78.1
81.8
84.9
87.4

1955.
1956.
1957.
1958.
1959.

93.3
94. 7
98.0
100. 7
101.5

94. 6
95. &
98.5
100. 8
100. 9

94. 0
94. 7

97. 8
101.9
100. 3

94.9
95.9
98.8
99.9
101. 2

95.3
95.4
98.5
100.0
101.5

94.4
96. 5
99. 1
99. 8
101. 0

90.5
92.8
96.6
100.3
103.2

89.4
91.9
96. 1
100.2
103.6

1960.
1961.
1962.
1963.
1964_

103. 1
104.2
105. 4
106.7
108. 1

101. 7
102. 3
103.2
104. 1
105.2

101.4
102. 6
103.6
105. 1
106.4

101.7
102. 0
102.8
103.5
104.4

100.9
100.8
101. 8
102. 1
103.0

102.6
103.2
103. 8
104. 8
105.7

106.6
108.8
110.9
113. 0
115.2

94.8
96.5
98.3
100. 1
101. 6
103. 1
104. 4
105.7
106. 8
107.8

107.4
110.0
112. 1
114.5
117.0

1 Beginning in January 1964, the index structure has been revised. The Bureau of Labor Statistics converted the Consumer Price Index series from a 1947-49
= 100 base to a 1957-59=100 as of January 1962. Index users who desire to maintain previous index series on a 1947-49 base may obtain such indexes from the
Bureau, upon request.
2 Not comparable to previously published (old series) indexes; home purchase included as a durable commodity in new series, previously included in services.
3 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.

specifications are made from time to time as production changes and descriptions become obsolete.
PRICING PROCEDURES

Current prices for the 400 items are collected regularly from a list of stores and service establishments

in the 50 cities. This list includes chain stores, independent stores, department stores, specialty stores,
and public utilities which have been selected by
BLS as representative of the types of outlets in
which wage-earner and clerical-workers make their
purchases. Prices are also collected on the services

of physicians and dentists, hospitals and beauty
parlors, repairmen and service contractors.
Prices for most items are collected at intervals
ranging from every month to every third month.
A few items are priced semiannually or annually.
Food pricing is conducted each month in all cities.
In the five largest cities most goods and services are
priced every month. Rent in these five cities is
priced every second month and some items such as
medical care, alcoholic beverages, tobacco and certain services are priced quarterly or semiannually.
In the remaining 45 cities prices for foods and some
other goods and services, such as fuels, used cars,
streetcar and bus fares, and a few other important
items, are collected each month. For most of the
remaining items prices are collected every third
month. Pricing in these 45 cities is on a rotating
cycle, so that several cities of each size group are
priced each month. Prices for unpriced items are
held constant between the scheduled pricing periods
in a given city 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.
STATISTICAL PROCEDURES

The purpose of the index is to measure price
change, i.e. 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 prices reported for that
particular item by the same retail outlets as in the
preceding period. 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 quantity of that
item purchased by urban wage-earner and clericalworker families in the years 1960-61, 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 estimated
1960 population of urban wage earner and clerical
workers. Two-fifths of the weight is carried by the
12 largest cities; more than one-fourth by the 11
cities selected to represent the 56 cities with populations of 250,000 to 1,400,000; nearly 15 percent by
the 10 cities selected to represent the 145 cities
with populations of 50,000 to 250,000; and one-fifth
by the 17 cities selected to represent the over 3,000
towns with populations ranging from 2,500 to 50,000.
HISTORICAL SERIES

In addition to the national index, separate indexes
are computed for 17 of the 50 cities—monthly for
the 5 largest and quarterly for the other 12.
Beginning with the January 1962 index, the
Consumer Price Index was converted to the standard
reference base period of 1957-59 — 100 from the
former base 1947-49 = 100. No other aspects of
the index, such as weight structure, and city and
item samples, were changed in connection with the
rebasing. Historical tables of monthly and annual
price indexes on the 1957-59 base are available upon
request to the Bureau of Labor Statistics. As a
convenience to users of the index, the all items and
group indexes will continue to be published on the
1947-49 = 100 base indefinitely.
National indexes are shown for all items and for
major commodities and. services groupings back to
1935 in the accompanying table.
Over this period major revisions, incorporating
expenditure patterns for 1934-36 and 1950 and
other changes were introduced by linking—in 1940
and 1953 respectively; other minor revisions were
introduced at other points in the series. A third
major revision was completed with the release of the
January 1964 index; this incorporated a new weight
structure, and updated city, commodity and outlet
samples and certain improvements in statistical
procedures, such as greater use of probability
sampling and more flexible use of specification
pricing.
The relative importance of the various groups
shown in the table of indexes can be seen in the

following table which compares relative importances
in the old and new series for December 1963:
Relative Importance of Specified Groups in the CPI, December
1963, Old and New Series
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. _

New
series

Old
series

100. 00
65. 97
22.43
43.54
18. 78

100. 00
67. 73
28. 18
39. 55
17. 53

24. 76
34.03
5.50
28. 53

22. 02
32. 27
6. 16
26. 11

USES AND LIMITATIONS

The index is designed to measure only changes in
prices, not expenditures resulting from changes in
purchasing habits or standards of living. Also, it
measures price changes for only a limited population
group: 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,
retired people, etc. The fixed market basket represents the average quantities bought by all wage
earner and clerical workers and is not necessarily
representative of the purchases made by any single
family or individual consumer.
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 has not been possible thus far to adjust completely for these effects.
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—semiannually, 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. Monthly indexes and average prices are
available for individual food and fuel items; quarterly indexes are available upon request for selected
groups of items and for individual commodities and
services other than foods and fuels. Descriptions
of the procedures, uses, and limitations of the index
are presented in varying degrees of technical detail
in "The Consumer Price Index as Revised, January
1964—A Short Description," in Techniques of
Preparing Major BLS Statistical Series (BLS Bulletin 1168), in "Consumer Price Indexes in the United
States, 1953-58 (BLS Bulletin 1256)," and in various
articles, such as the "Statistical Structure of the
Revised Consumer Price Index," in the July 1964
issue of the Monthly Labor Review.

27. 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 2,200 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 ex-

changes, 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.
93

Prices are quoted at the level of the first significant
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
quantity of shipments for sale in 1929-31 to 1947
average value of shipments for sale; (c) 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 were
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 were introduced early in 1961. Data from Alaska and Hawaii
were included in this last weight revision.
With release of data for January 1962, the indexes
were shifted to a new base (1957-59=100). Data
which had previously been available for each series
on the 1947-49 base are available on the new base
from the earliest date for which they were published
on the former base.
The relative importance of the groups, subgroups,
and items in the index at any one period depends on

Wholesale Prices, 1947-64
(Monthly data)
INDEX: 1957-59=100
130

115

100

/—COMMODITIES OTHER THAN FARM PRODUCTS AND FOODS

'' ALL COMMODITIES
70

• 1..L1.
illll
lulu
1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

nlii IN1II1IIIII1IIIII1II1I[|IIIM1NIMI

1947

nlii

SOURCE OF DATA: DEPARTMENT OF LABOR

iliilnlilllilnlll

1964

TABLE

27.—Wholesale Prices
[1957-59 = 100]
Commodities other than farm products and foods (industrial)

Year

All commodities

Farm
products

Processed
foods

Industrial' Industrial
intermedicrude
All indusmaterials ate matetrials !
rials 2

1929

52. 1

63. 9

54. 3

51. 7

1930
1931
1932
1933
1934

47.3
39. 9
35. 6
36. 1
41. 0

54.0
39. 6
29. 4
31. 3
39. 9

49. 5
41. 6
33. 9
33. 7
39. 6

48.
42.
39.
40.
44.

1
4
7
2
2

1935
1936
1937
1938
1939

43.8
44. 2
47. 2
43. 0
42. 2

48.
49.
52.
41.
39.

0
4
7
9
9

48. 3
46. 4
48. 6
42.3
40. 2

44.
44.
48.
46.
46.

0
9
1
1
0

1940
1941
1942
1943
1944

43.0
47. 8
54.0
56. 5
56. 9

41.
50.
64.
74.
75.

3
1
6
8
3

40. 4
46. 7
54. 8
57. 2
56.0

46.8
50. 3
53. 9
54. 7
55. 6

1945
1946
1947
1948
1949

57. 9
66. 1
81. 2
87.9
83. 5

78.3
90. 6
109. 1
117. 1
101. 3

56.4
71. 7
91. 1
98.4
88. 8

56.3
61. 7
75. 3
81. 7
80. 0

()
79. 2
92. 5
84.0

1950
1951
1952
1953
1954

86.8
96. 7
94.0
92. 7
92.9

106.4
123.8
116. 8
105. 9
104.4

92.6
103.3
100. 9
97.0
97. 6

82.9
91.5
89. 4
90. 1
90.4

93.6
102.9
93. 1
92. 4
88.0

1955
1956
1957
1958
1959

93.2
96.2
99.0
100. 4
100.6

97. 9
96.6
99.2
103. 6
97.2

94.3
94.3
97.9
102. 9
99.2

92.4
96.5
99.2
99. 5
101.3

96.6
102.3
100.9
96. 9
102.3

1960
1961
1962
1963
1964

100.7
100. 3
100. 6
100. 3
100.5

96.9
96. 0
97. 7
95. 7
94.3

100.0
100.7
101. 2
101. 1
101.0

101. 3
100. 8
100. 8
100. 7
101.2

98.3
97.2
95. 6
94. 3
97.1

Producer
finished
goods

Consumer finished
goods excluding food
Durable

Nondurable

()
61.8
67.4

70. 7

()
75. 9
81. 1
83. 2

86. 5
92. 0
88. 2

72.4
79.5
80.8
82. 1
83. 1

84. 1
89.7
90.4
91. 1
91.8

89.6
96.5
94. 1
95. 0
95.3

92.5
97. 0
99.6

85.6
92.0
97.7
100. 2
102. 1

92. 8
95.9
98.7
100. 1
101.3

95.8
97.7
99.9
99. 3
100.8

101.4
100. 1
99.9

102.3
102.5
102. 9
103. 1
104. 1

100. 9
100.5
100. 0
99. 5
99.9

101. 5
101.5
101. 6
101. 9
101.6

()

73.4
79. 8
77.8
81.4
91. 2
88.3
89.4

99. 4
101. 0

99. 6

100.2

1 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.
Not available for this classification prior to 1947.
Preliminary.
NOTE.—Monthly indexes available for some groups from January 1926 on the 1957-5( = 100 base and on the 1947-49=100 base through 1961. Monthly indexes
available for "all commodities" from 1890 through 1951 on the 1926=100 base.
Source: Department of Labor.
2
3
4

the relationship among value aggregates as of that
period. As of December 1957, using the 1954
weights, the relative importance of "Farm Products"
was 10.7 percent, of "Processed foods," 12.7 percent
and of "Other than Farm Products and Foods"

(machinery, nonmetallic minerals, fuels, etc.) 76.6
percent. Following introduction of the 1958 weights
the corresponding percents giving the relative importance of the three groups named, for December
1960, were 10.6, 14.0, and 75.4 respectively.

The following table indicates the relative importance of the chief economic-sector components in
December 1957, and in December 1960.
Relative Importance of Components of the Wholesale Price
Index, December 1957 and December 1960

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 December
1960 (1958 1957 (1954
weights)
weights)
100. 00
10. 59
14.04
75. 37
2. 77

100. 00
10. 69
12. 73
76. 58
2.96

38. 86
11.09

40. 33
11. 23

21. 31
7. 14
14. 17

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.

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 durability. 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; 85 subgroups such as grains
and cotton products; 284 product classes; and many
individual product series. In addition to the above,
indexes for 27 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 its 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 was 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 manufacturing process and
price movements. Statistical studies and the advice
of experts in industry and elsewhere are utilized in
making 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 260) of the commodities included in the
monthly index and an estimate of prices for all other
commodities. The w&ekly 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.

tion concerning the latest reweighting of the WPI and
the effect that it has on the index. The detailed reThe basic release of the index is the report entitled port for January 1962 contains information explainWholesale (Primary Market) Price Index, usually ing the rebasing of the index to 1957-59 = 100 and also
issued by the Bureau of Labor Statistics during the a table showing the conversion factors that are to be
second week of the month following the month to used when converting a particular index from a
which the figures relate. This release contains in- 1947-49 = 100 base to the base of 1957-59 = 100 or
dexes for groups and subgroups.
vice versa. In addition, statistical series and sumA more detailed report containing figures for all maries as well as descriptions of the procedures, uses,
levels of the index plus a review of the month's price and limitations of the Wholesale Price Index and of
changes and special indexes is issued about two weeks the various special indexes are in a series of annual
after the press release.
bulletins Wholesale Prices and Price Indexes, 1954-56
Monthly indexes for periods earlier than those (Bulletin 1214) which contains a description of the
shown in current issues of Economic Indicators are stage of processing series and the construction
available from the Bureau of Labor Statistics upon materials index, Wholesale Prices and Price Indexes,
request. A detailed description of the index and its 1957 (Bulletin 1235) which describes the indexes on
uses and limitations is presented in the February 1952 durability of product, Wholesale Prices and Price
Monthly Labor Review (Reprint No. R. 2067) and in Indexes, 1958 (Bulletin 1257) which supplies informaTechniques oj Preparing Major BLS Statistical Series, tion on the most recent change in procedures for the
Chapter 10 of BLS Bulletin 1168, December 1954. construction materials index, Wholesale Prices and
An article in the February 1962 Monthly Labor Price Indexes, 1959 (Bulletin 1295), Wholesale Prices
Review (Reprint No. 2384) and one of the detailed and Price Indexes, 1960 (Bulletin 1376) and Wholemonthly reports (January-May 1961) gives informa- sale Prices and Price Indexes 1961 (Bulletin 1382).
REFERENCES

28. PRICES RECEIVED AND PAID BY FARMERS
Prices Received by Farmers
DESCRIPTION OF SERIES

The Index of Prices Received by Farmers is computed by the Statistical Reporting Service (SRS) of
the Department of Agriculture as a measure of the
change from month to month in average prices of
farm products. For most commodities, it is based
on estimates of the average prices received for all
grades and qualities at the point of first sale—generally the local market—about the middle of the
month. For apples, peaches, pears, citrus, potatoes,
tobacco, wholesale milk, broilers, and wool, monthly
average prices rather than midmonth prices are used
in computing the index.
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/ 7
indexes are prepared for "all crops," with 11 subgroups, and for "livestock and products/ 7 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 allcommodity 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.
For the official index the subgroups and group indexes
are then converted from the 1953-57 to a 1910-14 =
100 base, the base period prescribed by law.

USES AND LIMITATIONS
The accompanying tables show the Index converted to 1957-59 = 100 to facilitate comparison with
The index is widely used as a measure of changes
other indexes.
in average prices received by farmers for commodities
Revisions have been made in the index series from sold in local markets. It is a close approximation
time to time, mainly involving revisions in basic price to a measure of the price component of receipts by
series or changes in weights. A major revision in farmers from the sale of farm products. It is used
January 1950 put the index on a basis more consistent in computation of adjusted base-period prices, which
with that of the Parity Index, improved the weight- are necessary for calculating parity prices under the
ing structure, and made minor changes in commodity formula prescribed by the Agricultural Adjustment
coverage. Minor revisions in January 1954 incorpo- Act of 1938, as amended.
rated revisions in component price series and reflected
The Index of Prices Received by Farmers is desome revisions in the 1937-41 weight data. The signed to measure the change in average prices for
latest major revision was made in January 1959 at all grades and qualities of the products sold by
which time the weight base period was shifted from farmers. Hence, the price changes it shows do not
1937-41 to 1953-57, and improvements were made in result wholly from price changes for specific grades,
the weighting and pricing system for vegetables and but may also reflect changes in the relative proporfor noncitrus fruits. The new weighting structure tion of the various grades or qualities of commodities
was made effective as of September 1952. The fol- sold.
lowing table shows the percent weights for important
As noted above, the index is based on commodities
categories for the three periods 1924-29, 1937-41, which account for about 93 percent of the total value
and 1953-57:
of farmers' sales. Adequate marketing and price
data
are not available for most of the other 7 percent
Relative Weights for Index of Prices Received by Farmers
(timber and other forest products, greenhouse prodCommodity group
1924-29
1937-41
1953-57
ucts, and a number of miscellaneous and minor comAll farm products
100.0
100.0
100.0 modities), but these omissions are probably not sigCrops
48.0
42.2
45.2 nificant with respect to the index as a whole.

Food grains
Feed grains and hay
Cotton
Tobacco
Oil-bearing crops
Fruit
Commercial vegetables
Potatoes, sweetpotatoes, and
dry edible beans
Livestock and products
Meat animals
Dairy products
Poultry and eggs
Wool

8.9
7. 5
13.9
2.6
2. 3
6.0
3.5

7.0
6. 7
8.3
3.7
3. 1
5.8
4.8

7.9
9. 1
8.4
4.1
4. 9
4.7
4.2

3.3
52.0
26.1
15.1
9. 9
.9

2.8
57.8
28.6
17.7
10. 2
1.3

1.9
54.8
29.1
14.6
10. 7
.4

RELATION TO OTHER SERIES

This index should not be confused with the farmproduct 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.

REFERENCES

See below, under Prices Paid by Farmers.

Prices Paid by Fanners
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 Statistical Reporting
Service (SRS) 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 fol-

lowing table. Those utilized in the indexes subsequent to September 1952 are shown in the last column
of the table.
Relative Weights for the Index of Prices Paid by Farmers,
Including Interest, Taxes, and Farm Wage Rates
item
Commodities, interest, taxes,

and cash wage rates
Living
Food (includingtobacco*).
Clothing
Autos and auto supplies__

iousehow2SS2SJ-:::
Building materials, house.

Production

weight base period
1924-291

1937-412

^lOOjO

_KXU)

^lOCUH)

41.2
14.8
12.5
4. 5

44.0
16.7
8.6
6. 9

39.50
13.40
6.34
5. 63

i1. t9

I:II
4. 37

5. 3

i. 60

3. 1
36.4

Livestock III1111111" 11

Motor supplies
Motor vehicles
Farm machinery

41.2

19553

50.90

3.9
3.9
3. 4

5.2
5.2
4. 5

Terials_^n___ en _ Cing _ ma "
Fertilizer and lime
Equipment and supplies—
Seeds.
._
Total commodities
Taxes

3. 7
2. 7
3. 3
1.0
77.6
5 7

2. 7
3. 1
3. 3
1.7
85.2
3 8

5. 20
4. 11
3. 66
2. 55
90.40
2 04

Cash wage rates

10. 2

8. 0

6. 60

InterestllllllllllllllHII

6.5

2March i935to September 1952,inclusive,

3! 0

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 ma or
i changes in the revised series:
(l) 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 June 1963, the
index ot prices paid lor items used m lamily living
include
* P r i c e s e r i e s f o r 2 4 2 «***>&&» a n d ^ ices, and the index for items used in farm production
m c m d e d 244, with 42 series being used in both
indexes.

8.39
4.38
5. 21

! 96

STATISTICAL PROCEDURES

^he Index of Prices Paid by Farmers for commodities and services is based upon prices of commodities
reported by cnam 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

Prices Received and Paid by Farmers, 1947-64
(Monthly data)
INDEX: 1957-59=100
130

120

110 -,

100

.i..[..i..i..i..L].j..i.J»i»iMi.jMii.L..i.Li..i..i..I..i..i..i..[.i..»..t..T..i..i..i..l..i..i..i.Y

1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964

SOURCE OF DATA: DEPARTMENT OF AGRICULTURE

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 20,000
farmers. The index base period 1910-14 is set by
law. As in the case of the Index of Prices Received
by Farmers, the Parity Index also is shown in the
table on a 1957-59 = 100 base to facilitate comparisons with other indexes.
Price reports for independent dealers are received
in the SRS 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 SRS. 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, farm expenditures and
other available information.
From the national averages for each item the
SRS 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.

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 and electricity costs are represented 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.

RELATION TO OTHER SERIES

The Index of Prices Paid by Farmers for Commodities and Services, including interest, taxes, and
farm 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,

The Index of Prices Paid by Farmers for familyliving items is frequently used with the Consumer
Price Index (CPI) to compare the movements of
retail prices a,s they affect farmers and urban workers,

100

USES AND LIMITATIONS

TABLE

28.—Prices Received and Paid by Farmers
Prices paid by farmers

Prices received by farmers

Year

All farm
products

Crops

Livestock
and
products

All items,
interest,
taxes, and
wage rates
(parity
index)

Family
living
items

Production
items

Parity
ratio '

1957-59=100
1929.

1930.
1931.
1932.
1933.
1934.

52
36
27
29
37

52
34
26
32
44

52
38
28
27
32

52
44
38
37
41

51
43
37
38
42

52
43
38
38
44

83
67
58
64
75

1935.
1936.
1937.
1938.
1939.

45
47
51
40
39

46
49
53
36
37

44
46
49
43
41

42
42
45
42
42

43
44
45
42
42

46
46
50
47
46

92
93
78
77

1940.
1941.
1942.
1943.
1944.

41
48
65
84
89

42
53
66
2
77
2
76

42
45
52
58
62

42
46
52
58
61

47
50
57
63
66

81
93
105
113
108

1945.
1946.
1947.
1948.
1949.

42
51
66
2
80
2
82
2
86
2
98
114
119
103

91
102
118
114
100

22 82
94
111
122
106

65
71
82
89
86

64
70
83
88
85

67
73
85
95
91

109
113
115
110
100

1950
1951
1952
1953
1954

107
125
119
105
102

104
119
120
108
108

108
130
119
104
97

88
96
98
95
95

86
94
95
94
95

94
104
104
97
97

101
107
100
92
89

1955.
1956.
1957.
1958.
1959.

95
97
104
99

104
105
101
100
99

90
88
94
106
100

94
95
98
100
102

95
96
99
100
101

96
95
98
100
102

84
83
82
85
81

1960
1961
1962
1963
1964

99
101
100

99
102
104
106
106

98
98
99
95
91

102
103
105
106
107

102
102
103
104
105

101
101
103
104
103

80
79
79
78
75

Percentage ratio of Index of Prices Received by Farmers to Index of Prices Paid, including interest, taxes, and wage rates on 1910-14 base.
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.
The official indexes are published on a 1910-14 = 100 base as required by law. The indexes have been converted to 1957-59=100 for the above tables to facilitate
comparisons with other indexes.
Source: Department of Agriculture.
2

101

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 farm 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 SRS in
Agricultural Prices. Revisions of the Parity Index
are published in "Agricultural Prices" in September
of each year; revised indexes of Prices Received by

102

Farmers, in May. A comprehensive discussion of the
January 1959 revision of the price indexes is presented in the April-July 1959 issue of Agricultural
Economic Research. A detailed description of the
price series is presented in the Statistical Reporting
Service of the U.S. Department of Agriculture—
Scope and Methods (Miscellaneous Publication No.
967 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
29. MONEY SUPPLY
DESCRIPTION OF SERIES

"Money supply" is defined 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 commercial bank
demand deposit liabilities to nonbank financial institutions, mutual savings banks, foreign banks, and
TABLE

State and local governments, but excludes those to
other commercial banks (with minor exceptions) and
to the Federal government (these being shown as a
separate series). Foreign balances with Federal
Reserve banks also are included in the deposit
component.
Time deposits are not included in the "money
supply" but are nevertheless closely related because
of their high liquidity. They consist of savings
accounts of individuals and nonprofit organizations,
and other time deposits held by individuals, partnerships, corporations, states and political subdivisions,

29.—Money supply

[Averages of daily figures, billions of dollars]
Money supply

Money supply

End of year
Total

Currency
outside
banks

Demand
deposits

Time
deposits :

Total

Seasonally adjusted

Currency
outside
banks

Demand
deposits

Time
deposits 2

U.S.
Government
demand
deposits 2

Unadjusted

1947
1948
1949

113. 1
111. 5
111. 2

26. 4
25. 8
25. 1

86. 7
85. 8
86.0

35.4
36. 0
36. 4

115. 9
114. 3
113. 9

26.8
26. 2
25. 5

89. 1
88. 1
88.4

35. 1
35. 7
36. 1

1. 0
1. 8
2. 8

1950
1951
1952
1953
1954

116. 2
122. 7
127. 4
128.8
132.3

25.0
26. 1
27. 3
27.7
27.4

91.2
96.5
100. 1
101. 1
104. 9

36. 7
38.2
41. 1
44. 5
48.3

119.2
125. 8
130. 8
132. 1
135. 6

25.4
26. 6
27. 8
28.2
27. 9

93. 8
99. 2
103.0
103.9
107. 7

36.4
38.0
40. 9
44. 2
48.0

2. 4
2.7
4. 9
3.8
5.0

1955
1956
1957
1958
1959

135.2
136. 9
135. 9
141. 1
142. 1

27.
28.
28.
28.
28.

8
2
3
6
9

107.4
108.7
107. 6
112. 6
113. 2

50.0
51. 9
57.4
65. 4
67.4

138.6
140.3
139.3
144. 7
145. 6

28. 4
28. 8
28.9
29. 2
29. 5

110.2
111. 5
110. 4
115. 5
116. 1

49. 6
51.4
56. 7
64.6
66.6

3.4
3.4
3. 5
3. 9
4. 9

1960
1961
1962
1963
1964
(preliminary)

141. 1
145. 5
147. 6
153.2

28. 9
29.6
30. 6
32. 4

112. 1
116.0
117. 1
120. 7

72.9
82. 8
97. 9
112. 3

144.7
149.4
151. 6
157. 2

29. 6
30.2
31.2
33. 1

115.2
119.2
120. 3
124. 1

72.
81.
96.
111.

1
8
7
d

4. 7
4. 9
5. 6
5.2

159.4

34. 2

125.2

126.5

163. 6

34.9

128.7

125. 0

5.5

Averages of daily December figures.
Deposits at all commercial banks.
Source: Board of Governors of the Federal Reserve System.

103

and foreign central governments and official institutions. Certificates of deposit are redeemable after
30 days7 notice, and prior notification of up to 30
days may also be required for withdrawals from
savings accounts. Banks may pay interest on time
deposits but not on demand deposits. The published series cover deposits at all commercial banks.
All monthly and semi-monthly data are shown as
averages of daily figures while annual data are represented by 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) cash items in process of
collection and U.S. Government demand deposits are
deducted. An estimate of deposits in nonmember
banks based on reported daily figures from "country"
member banks (those outside the larger centers) in
conjunction with quarterly "call report" data from
non-member banks is added. From this aggregate
is deducted the Federal Reserve "float", the resulting
figure being the estimate for commercial bank
demand deposits. Foreign balances with Federal
Reserve Banks are added to the commercial bank
demand deposits.
"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 vault cash holdings of non-member
banks prepared by a method similar to that for
estimating deposits.
Seasonal adjustment is made separately for the
two components, using a ratio-to-moving-average
procedure. Adjustment factors applied to the 24
semimonthly periods for 1961 are shown in the table
at the top of the next column.
Estimates for time deposits and U.S. government
deposits, also shown in the table on page 103, are
arrived at in a similar manner.

104

Seasonal Adjustment Factors for Money Supply Series: 1961
Period

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

1
2
1
2
1
2
1
2
1
2
1
2
1
2
1
2
1
2
1
2
1
2
1
2

Deposit
Component

Currency
Component

104.0
102.8
101.5
99.1
99.6
98.9
100.0
101.4
99.6
97.5
98.9
98.1
98.1
99.0
99.0
97.4
99.2
99.0
99.4
100.7
101.1
100.5
102.2
103.4

100.6
98.6
99.0
98.5
99.3
98.8
99.8
98.6
99.5
98.9
99.9
99.5
101.2
100.0
100.7
99.9
100.8
99.6
100.7
99.9
100.9
101.1
101.9
102.3

RELATION TO OTHER SERIES

The measure of "money sapply" 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. 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 of vault cash held by commercial banks.
The money supply series here presented differs
also from certain other similar data on deposits and
currency, also published by the Federal Reserve.
Thus, as part of its Consolidated Condition Statement for Banks and the Monetary System, the Federal Reserve presents money supply estimates as of
the last Wednesday of each month which differ in
certain technical respects from the series shown here.
However, this older series provides a measure of
deposits and currency over a much longer time
period.
As part of the Flow of Funds accounts published
in the Federal Reserve Bulletin, quarterly figures on
changes in demand deposits and currency are presented, again with certain technical differences from
the series here presented.
The series on money supply in its present form
appeared first in 1962, with revised back data to
1947. It is similar to the series on deposits and

currency shown in the table on page 107 as one of the
components of "Selected Liquid Assets Held by the
Public." However, the latter is net of deposits held
by mutual savings banks and savings and loan
associations.

attributes of money, the reader may turn to the table
on liquid assets held by the public.
REFERENCES

The money supply series are issued semimonthly
by Federal Reserve, and appear monthly in the
USES AND LIMITATIONS
Federal Reserve Bulletin. An article in the August,
Changes in the total of deposits and currency, 1962 Bulletin presents a technical discussion of the
whether regarded as causative or symptomatic, are derivation of the series and a comparison with similar
important factors in the analysis of economic change series. Semimonthly and monthly average data for
and of monetary policy. The definition of money money supply, time deposits, and U.S. Government
supply here used has been chosen from among alter- demand deposits were most recently revised in June
native definitions as one closely related to the 1964, and the data for the period 1947 to June 1964
mechanism through which money is created or ex- appear in the Federal Reserve Bulletin for June 1964.
tinguished. The money supply series permit a The related Consolidated Condition Statement conreasonably adequate measurement of the level and tinues to appear in the monthly release J. 4 and in
movement of this aggregate. They should be con- the Bulletin, with data for most component series
sidered in the light of changes in the use of deposits for selected years back to 1929. Historical data on
deposits and currency are available in Banking and
as measured in the series on bank debits.
Monetary
Statistics from 1892 and in Historical
For analytical uses requiring attention to a broader
Statistics
oj
the United States from 1867.
group of highly liquid assets possessing some of the

30. SELECTED LIQUID ASSETS HELD BY THE PUBLIC
DESCRIPTION OF SERIES

The accompanying table shows public holdings of
major types of liquid assets—that is, cash or assets
readily convertible into cash with minimum risk of
loss. In addition to currency and demand deposits,
the table includes time deposits in commercial and
mutual savings banks and the Postal Savings System,
savings and loan shares, savings bonds, and shortterm U.S. Government securities. Certain other
assets ordinarily regarded as important liquidity instruments, particularly prime commercial paper,
bankers acceptances, and credit union shares, have
been omitted because adequate data are not available. However, these assets would add less than 3
per cent to the existing total.
For purposes of this table, public holdings include
all holdings except those of the United States
Government, Government agencies and trust funds,
Federal Reserve Banks, and domestic commercial
banks. The principal holders are individuals, partnerships, and nonbank corporations, State and local
governments, corporate pension funds, non-profit
institutions, and foreign holders, including foreign
banks, Governments, and international institutions.

40-752O—65

There are substantial differences in the ownership
characteristics of the various types of assets. Deposits in mutual savings banks and the Postal
Savings System, savings and loan shares, and savings
bonds are almost entirely personal savings of individuals, while short-term U.S. Government securities
are held mainly as liquidity reserves by financial and
nonfinancial businesses. Although the bulk of
commercial bank time deposits are savings accounts
of individuals, substantial amounts of other time
deposits are also held by businesses, State and local
governments, and foreign banks and international
institutions.
All of the series were adjusted for seasonal variation by the X-9 variant of Method II developed by
the Bureau of the Census. Demand deposits and
currency were independently adjusted for seasonal
variation and then combined into a single seasonally
adjusted series. For these two series special adjustments were made for those months in which the
seasonal movement is greatly affected by the date on
which the last Wednesday falls. The rationale
for these adjustments is contained in an article in
the Federal Reserve Bulletin for February 1960,
page 133.

105

Demand Deposits and Currency
The figures are a combination of two series—
"demand deposits adjusted" and "currency outside
banks."
By "demand deposits adyusted" is meant total
demand deposits at commercial banks in the United
States less demand deposits due to the U.S. Government, to other domestic commercial banks, to mutual
savings banks, or to savings and loan associations.
Demand deposits held by mutual savings banks and
savings and loan associations are deducted to avoid
double counting, since liquid assets held by the
public in these two types of institutions are shown
separately. Cash items reported as in process of
collection and Federal Reserve float have been
eliminated. The series differs in concept from that
shown under "Money Supply" above only in the
deduction of deposits of mutual savings banks and
savings and loan associations.
"Currency outside banks" is again consistent in
concept with that shown under "Money Supply"
except that it excludes cash in the vaults of mutual
savings banks as well as commercial banks in the
United States.
Demand deposits and currency are as of the close
of business of the last Wednesday of the month and
are available in the Federal Reserve J-4 release and
the Federal Reserve Bulletin.

Time Deposits

with some subsequent adjustment of commercial
bank time deposits by the Federal Reserve.

Postal Saving System
Data are end-of-month totals for savings accounts,
obtained from the Post Office Department.

Savings and Loan Shares
Data are end-of-month figures compiled by the
Federal Savings and Loan Insurance Corporation
and are published in the Federal Reserve Bulletin,
except that prior to 1955 data are Federal Reserve
estimates based on monthly figures of inflow of new
savings and withdrawal of savings capital compiled
by the Federal Home Loan Bank Board.

United States Savings Bonds
Figures include all types of savings bonds held by
investors other than domestic commercial banks and
United States Government agencies and trust funds.
To avoid double counting, holdings of mutual savings
banks are excluded throughout and holdings of
savings and loan associations beginning February
1960. Figures show par value and are partly estimated. They are as of the end-of-month and are
obtained from the United States Treasury Department's survey of ownership of U.S. Government
securities.

United States Government Securities
Maturing Within One Year

Beginning December 1950 figures include Treasury
Time deposits at commercial banks are roughly
the same in concept as shown in the "Money Sup- marketable securities and Federal agency securities
ply" table, but do exclude postal savings redeposited maturing within one year, except holdings of domestic
in commercial banks. Figures are as of the last commercial, mutual savings, and Federal Reserve
Wednesday of each month, except that June 30 and Banks, Government agencies and trust funds, and
December 31 call report data were used when avail- beginning February 1960, savings and loan associaable or Federal Reserve estimates were made for tions. Figures show par value and are partly estimated. They have been adjusted to include partially
those dates.
Deposits at mutual savings banks are as of the tax-exempt securities 12 months prior to first call
end of the month and are supplied to the Federal date, and, prior to 1956, nonmarketable Treasury
Reserve by the National Association of Mutual savings notes with maturities up to 36 months.
Savings Banks. They include a small amount of Prior to December 1950, figures for marketable issues
include securities callable within one year. Figures
demand deposits.
Figures for both commercial and mutual savings are as of the end of the month and are obtained from
banks are included in the Federal Reserve J-4 release the U.S. Treasury's survey of ownership of U.S
and are published in the Federal Reserve Bulletin, Government securities.

106

30.—Selected Liquid Assets Held by the Public

TABLE

[Amounts in billions of dollars, seasonally adjusted]
Total
selected
liquid
assets

End of year

Time deposits
Demand
deposits
and currency 1

Mutual
savings
banks

Commercial
banks

Postal
Savings
System

Savings
and loan
shares

U.S. GovU.S. Gov- ernment
securities
ernment
maturing
savings
within one
bonds
year

1946
1947
1948
1949

239.
246.
254.
262.

1
2
1
1

108. 5
112. 4
110. 5
110. 4

33. 9
35. 3
35.9
36. 3

16. 9
17. 8
18. 4
19. 3

3. 3
3.4
3. 3
3. 2

8. 5
9. 7
11. 0
12. 5

48. 6
50.9
53. 4
55.0

19. 4
16. 6
21. 6
25. 5

1950 _
1951 _ _
1952
1953

271.
281.
296.
311.

4
0
0
5

115. 5
120. 9
125. 5
127. 3

36. 6
38.2
41. 2
44. 6

20. 1
20.9
22. 6
24. 4

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

14. 0
16. 1
19. 2
22. 8

55.
55.
55.
55.

26. 4
26.8
29.3
34. 4

1954
1955
1956
1957

320. 3
332. 5
343. 2
356. 0

130. 2
133. 3
134. 6
133. 5

48. 2
49. 7
52. 0
57. 5

26. 3
28. 1
30. 0
31. 6

2. 1
1. 9
1. 6
1. 3

27.2
32. 0
37.0
41. 7

55. 6
55. 9
54. 8
51. 6

30.
31.
33.
38.

373. 1
393. 9
399. 2
424. 6

138. 8
139. 7
138. 4
142. 6

65. 4
67. 4
73. 1
82. 5

33. 9
34. 9
36. 2
38. 3

1. 1
.9
.8
.6

47. 7
54. 3
61. 8
70. 5

50. 5
47. 9
47. 0
47. 4

35. 6
48. 8
41. 9
42. 6

459. 0
495. 3
529. 9

144. 8
149. 6
156. 1

98. 1
112. 9
126.9

41. 4
44. 5
48. 8

.5
.5
.4

79. 8
90. 7
101.4

47. 6
49. 0
49. 9

46. 8
48. 1
46.4

1958
1959
1960
1961

_ ___

1962
1963
1964 (preliminary)

8
4
7
6

6
6
2
8

1
Agrees in concept with money supply, except for deduction of demand deposits held by mutual savings banks and savings and loan associations. Data for last
Wednesday of month.
Source: Board of Governors of the Federal Reserve System.

31. 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 banks" 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 $650
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,
and in April, 1961, with significant expansion in coverage and with more detailed classifications of loans,
investments, and deposits (see page 654 of the June
1961 Federal Reserve Bulletin).

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

107

of commercial and industrial loans. Data prior to
July 1959 are not available on the revised basis.
The weekly reporting banks currently account for
about 70 percent of business loans at all commercial
banks.
The series on bank debits outside New York City
covers debits to demand deposit accounts except interbank and U.S. Government accounts. Figures 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 and free reserves
are reported for all member banks of the Federal
Reserve System. With few exceptions these are
commercial banks and comprise approximately 4,500
nationally chartered banks ("National banks") plus
about 1,500 State chartered banks which have
chosen, and have been found eligible, to join the
Federal Reserve System. Member banks account
currently for about 85 percent of the total loans and
investments and total deposits of commercial banks.
Required reserves are minimum 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 only limited amounts could be
included, but since November 24, 1960, all vault cash
has been allowed as reserves. Excess reserves are
member bank balances of these types maintained in
excess of the required minimum.
Member bank reserves have been affected by the
inclusion of banks in Alaska and Hawaii—as have
those for all commercial banks.
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 always as of
the last day of the month, and are estimated for those
years when call report data were not available for
December 31 (1962 and 1963). The same is true of
final June figures except that last Wednesday data

Loans and Investments at All Commercial Banks, 1948-64
(Monthly data, seasonally adjusted)
BILLIONS OF DOLLARS
300

250

200

TOTAL LOANS AND INVESTMENTS
150

100

7 T T . . i > T i . . t . . i . , h . i . . 1 . . i . . 1..i.ili.t.ili111.11.1.11..i.< . . 1 1 1 l u i i i l i j i . . h t ! u L i i i 1 1 . . 1.

1948

1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

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

108

1964

Investments , Debits, and Reserves

TABLE 31.—Bank Loans,

Weekly
reporting
member
banks

All commercial banks
(seasonally adjusted data)
End of period

Total
Investments
loans
Loans,
excluding
and
U.S. Gov- Other
interinvesternment
securibank
ments
securities
ties

Business
loans 2

All member b a n k s 1 4
Bank
debits
outside
New York
City (343
centers) 3

Total
reserves

Borrowings at
Excess Federal
reserves Reserve
Banks

Free
reserves

Millions of dollars

Billions of dollars
1948_
1949

113. 0
118. 7

41. 5
42. 0

62. 3
66.4

9. 2
10.3

15. 6
13. 9

784
760

19,990
16,291

797
803

134
118

663
685

1950
1951
1952
1953.
1954

124. 7
130.2
139. 1
143. 1
153. 1

51.
56.
62.
66.
69.

1
5
8
1
0

61. 2
60. 3
62. 1
62. 3
67. 7

12. 4
13.4
14. 2
14. 7
16. 4

17. 9
21. 6
23.4
23. 4
22. 4

871
998
1,045
1,126
1,148

17,391
20,310
21,180
19,920
19,279

1,027
826
723
693
703

142
657
1,593
441
246

885
169
-870
252
457

157. 6
161. 6
166. 4
181. 2
185.9

80. 5
88. 0
91. 4
95. 6
107.6

60. 3
57. 3
57. 1
65. 1
57.8

16.
16.
17.
20.
20.

26. 7
30. 8
31. 8
2
31. 7
2
30.7

1,277
1,385
1,468
1,481
1,656

19,240
19,535
19,420
18,899
18,932

594
652
577
516
482

839
688
710
557
906

-245
-36
— 133
— 41
-424

194.
209.
228.
246.
266.

113.
120.
133.
149.
166.

59. 9
65. 4
65. 2
62. 1
60.9

20. 8
23. 9
29. 2
35.0
38.4

32.2
32.9
35.2
38. 8
42. 1

1,736
1,832
2,021
2,199
2,405

19,283
20,118
20,040
20,746
21,615

756
568
572
536
414

87
149
304
327
243

669
419
268
209
171

1955
1956.
1957
1958
1959

_ __ -_

1960
1961 _ _ _1962 _ _
1963
1964 (preliminary)-

5
8
3
5
0

8
5
9
4
7

8
3
9
5
5

1 Member banks are all national banks and those State banks which have taken membership in the Federal Reserve System.
2 Commercial and industrial loans and prior to 1956 agricultural loans. Series revised beginning October 1955, July 1958, July 1959, and April 1961.
34 Debits during period to demand deposit accounts except interbank and U.S. Government. Prior to 1955, relates to 344 centers outside New York City.
Data are daily averages for December.
NOTE.—Between January and August 1959, series for all commercial banks expanded to include data for all banks in Alaska and Hawaii. Data for all member
banks include Alaska and Hawaii beginning 1954 and 1959, respectively.
Source: Board of Governors of the Federal Reserve System.

were used in years when June 30 call report data
were not available. Beginning in 1948, seasonally
adjusted monthly data for loans and investments at
all commercial banks are available. Reserves and
borrowings are shown as averages of daily figures
during the period.
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 June estimates are
later replaced by "benchmark" figures, if available,
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
for the relatively few uninsured banks. Interim
monthly estimates are revised semiannually to bring
them into line with the "call report" benchmarks.
The debits series is a simple aggregate of the reports of reporting banks. Monthly data are season -

109

ally 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 total 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. "Free reserves" for the member banks as
a group are computed by netting total borrowings
at Federal Reserve Banks against excess reserves.
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 may conform closely in trend
and lead to similar 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 aggregates 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 publications 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. "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 commercial banks
appear initially about two weeks after the last
Wednesday of the month in a Federal Reserve
release J.4, 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. A Supplement to
Banking and Monetary Statistics, Section 1 Banks
and the Monetary System, published in 1962, contains
a tabulation of recent data.
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 revisions of the weekly
series are discussed in the August 1959 and June 1961
issues of the 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 summary 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 weekly release H.4.1, showing
weekly averages of daily figures, available the day
following the end of the weekly period. The bi-

weekly 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. A Supplement to Banking and Monetary Statistics, Section 10,
Member Bank Reserves and Related Items, published
in 1962, contains a tabulation of recent data.
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 oj the United States,
Colonial Times to 1957 presents earlier banking
series, in part back to 1834.

32. CONSUMER AND REAL ESTATE CREDIT
home heating-oil accounts); single-payment loans;
and service credit extended by a variety of creditors
"Consumer credit" is defined as short- and inter- including hospitals, doctors, utilities, and service
mediate-term credit used to finance the purchase of establishments.
commodities and services for personal consumption
The above definition is followed generally but not
or to refinance debts originally incurred for such rigidly in the construction of the series. In the
purposes. Credit covers both loans and sales in- absence of sufficiently refined data, certain arbitrary
volving deferred payment. Personal consumption decisions have been made. For example, all bank
is defined to exclude consumption by businesses and credit to farmers is excluded even though an undeby nonprofit organizations. The estimates of con- termined part is for consumption. Credit for the
sumer credit are made in total and for major types purchase of passenger automobiles by individuals
of credit. They exclude home mortgage credit, which probably includes a relatively small amount of
is shown separately for one-to-four family homes in credit on vehicles that are used for business purposes.
the last column on the accompanying table.
The several series on instalment credit extended
Instalment credit, accounting for the bulk of con- and repaid measure the gross flows of lending and
sumer credit, is that scheduled to be repaid in two repayment which determine changes in the level of
or more payments. Instalment credit classified as instalment credit outstanding. The monthly series
"automobile paper" includes credit for the purchase for extensions and repayments, as shown in Economic
of automobiles regardless of whether originating as Indicators, are adjusted for trading day and seasonal
loans or as credit sales, and regardless of whether the variation.
paper is held by a dealer or a financial institution.
Data for Alaska were added in January, and for
Other components of total instalment credit are Hawaii in August, of 1959, with an increase in total
"other consumer goods paper," defined analogously consumer credit of approximately $180 million.
to automobile paper; "repair and modernization
STATISTICAL PROCEDURES
loans," representing debt owed to financial institutions for repair and modernization of owner-occupied
The several series are aggregates of separate estihomes; and "personal loans," comprising loans by mates of credit held (or extended and repaid) by
financial institutions for all other consumer purposes, various types of creditors—financial institutions, resuch as to consolidate debts, to pay medical expenses, tail and service establishments, and others. The
or for education. "Noninstalment credit" comprises procedures vary but in general involve estimates
three major types: charge accounts (including service based on a benchmark and moved by monthly samstation and miscellaneous credit-card accounts and ple data. The 1948 Census of Business and subseDESCRIPTION OF SERIES

111

quent annual surveys provide benchmarks for credit
held by the various retail lines. For the more important credit-granting lines there are monthly and
annual sample data on receivables. For some lines
monthly receivables are estimated on the basis of
weighted sales adjusted annually to survey benchmark data. Monthly data on receivables are available from reporting samples of 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.
For example, a benchmark survey of sales and consumer finance companies (or finance companies) was
held as of June, 1960, to update the benchmark
derived from a similar survey in 1955. Estimates
of service credit vary but in general are based on
less substantial data. The largest component, medical debt, is based on periodic data collected in a
sample survey of consumers and an estimated seasonal pattern. On the other hand, virtually com-

plete 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 are
shown currently on a monthly basis by type of
credit and major holder group. The imputed factors for seasonal and trading day adjustment of
total instalment credit for the 12 months of 1963
are as follows:
January
February __
March
April
May
June
July
August
September.
October
November.
December..

Credit extended

Credit repaid

90
82
95
106
106
103
105
103
93
103
100
113

102
93
100
103
102
96
104
100
96
104
99
102

Consumer Credit Outstanding, 1947-64
(Short- and intermediate-term.

End-of-month data)

BILLIONS OF DOLLARS
80

1947

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

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

112

1964

TABLE

32.—Consumer and Real Estate Credit
[Billions of dollars]

Consumer credit outstanding

Consumer instalment credit extended
and repaid

Total

Instalmen
Year
Total
Total 2

Automobile
paper

Personal
loans

Noninstal-3
ment

Automobile
paper

Extended

Repaid

Extended

Repaid

Mortgage
debt on
l-to4family
homes l

7. 1
6.4
5.3
4.0
3.9
4.2

3.5
3.0
2.5
1.7
1.7
2.0

1.4
1. 0
.7
.4
.5
.6

0. 6
.6
.5
.5
.4
.5

3.6
3.3
2.9
2. 4
2. 2
2. 2

(44)
(4)
(4)
(4)
()
(4)

(4)
(4)
(4)
(4)
(4)
(4)

(44)
(4)
(4)
(4)
(4)
()

(4)
(4)
(4)
(4)
(4)
(4)

18. 9
18. 9
18. 1
16. 7
15.4
15. 6

5. 2
6.4
6.9
6.4
7. 2

2.8
3.7
4. 1
3.7
4. 5

1. 0
1.4
1. 5
1. 1
1. 5

.6
.7
.9
.9
1. 1

2.4
2. 6
2. 8
2. 7
2. 7

(44)
(4)
(4)
(4)
()

(4)
(4)
(4)
(4)
(4)

(44)
(4)
(4)
(4)
()

(4)
(4)
(4)
(4)
(4)

15.4
15. 4
15. 5
15. 8
16. 3

8. 3
9.2
6. 0
4. 9
5. 1

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

2. 1
2.5
0. 7
.4
.4

1. 2
1. 3
1. 0
.8
.9

2. 8
3. 1
2.8
2. 8
2. 9

8. 2
9.4
5.2
4. 6
4. 9

3. 1
3.8
1. 0
.8
.9

2. 5

8.9
8.2
5. 6
4. 9

3.4
2.7
1. 1
.9

17. 4
18. 4
18. 2
17. 8
17. 9

1945
1946
1947
1948
1949

5.7
8.4
11. 6
14. 4
17. 4

2. 5
4. 2
6 7
9. 0
11. 6

.5
1. 0
1. 9
3. 0
4. 6

1. 0
1.5
1. 9
2. 2
2. 4

3.2
4.2
4. 9
5. 5
5. 8

5.4
8. 5
12. 7
15. 6
18. 1

5. 1
6.8
10. 2
13. 3
15. 5

1.0
2.0
3. 7
5. 2
7. 0

.9
1. 4
2. 7
4. 1
5. 4

18.6
23.0
28. 2
33. 3
37. 6

1950
1951
1952
1953
1954

21. 5
22.7
27. 5
31. 4
32.5

14.7
15.3
19. 4
23. 0
23.6

6. 1
6. 0
7. 7
9. 8
9.8

2.8
3.4
4. 1
4. 8
5. 4

6.8
7.4
8. 1
8. 4
8.9

21.6
23. 6
29. 5
31. 6
31. 1

18.4
23. 0
25. 4
28. 0
30. 5

8.5
9.0
11. 8
13. 0
11.8

7.0
9. 1
10. 0
10. 9
11.8

45.2
51. 7
58. 5
66. 1
75. 7

_ __

38.8
42. 3
45. 0
45. 1
51. 5

28.9
31. 7
33. 9
33.6
39.2

13. 5
14. 4
15. 3
14. 2
16. 4

6. 1
6.8
7. 6
8. 1
9.4

9.9
10.6
11. 1
11. 5
12. 3

39. 0
39.9
42. 0
40. 1
48. 1

33.6
37. 1
39. 9
40.3
42.6

16. 7
15. 5
16. 5
14. 2
17.8

13. 1
14.6
15. 5
15. 4
15. 6

88. 2
99. 0
107. 6
117. 7
130. 9

I960. _
_ _
1961
1962_ .
1963
1964 (preliminary) __

56.0
57. 7
63. 2
69. 9
76.8

42. 8
43. 5
48. 0
53. 7
59.4

17. 7
17.2
19. 5
22. 2
24. 5

10. 5
11.3
12. 6
14.4
16. 1

13.2
14.2
15. 1
16. 1
17.4

49. 6
48.4
55. 1
60. 8
66. 1

46. 0
47.7
50.6
55. 1
60.4

17.7
16.0
19. 8
22.0
23.6

16.4
16. 5
17. 5
19.4
21.2

141.3
153. 1
166. 5
182.2
197.9

1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939

__ _

_ _ _

_ _

1940.
1941
1942
1943
1944.

1955
1956
1957
1958
1959-

_
_

7. 2

1
End of period, unadjusted.
2
Also includes other consumer goods paper, and repair and modernization loans, not shown separately.
3
Consists of single-payment loans, charge accounts, and service credit.
* Not available.
NOTE.—Data for Alaska and Hawaii included beginning January and August 1959, respectively.
Source: Board of Governors of the Federal Reserve System and Federal Home Loan Bank Board.

outstanding by major types in greater detail; instalment credit outstanding by type of holder; and supThe series shown here are selected from a more plementary tabulations of instalment credit of comcomprehensive body of consumer credit data pre- mercial banks, sales finance companies, and other
pared by Federal Reserve, showing consumer credit financial institutions, and of noninstalment credit
RELATION TO OTHER SERIES

113

by type 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.

prepared by the Federal Home Loan Bank Board in
cooperation with the Federal Reserve Board. Quarterly estimates from 1949 to 1957 are available from
the Federal Reserve Board.
The major holders of mortgage debt are the saving
and loan associations, commercial banks, mutual savings banks, and insurance companies. Estimates
USES AND LIMITATIONS
of the volume of mortgage debt held by these institutions rest on firm data, although the proportion
The widespread interest in consumer credit is due
of debt on one-to-four-family properties to debt on
in part to its importance as a source of consumer
all residential properties is not a matter of record in
purchasing power and especially its significance in
most cases and must be imputed from related
the market for consumer goods frequently bought
information.
on the instalment plan. In part it is due to the
Data on mortgage holdings by savings and loan
fact that consumer credit reflects one aspect of the
associations
are compiled from reports of the associfinancial position of consumers. Consumer credit
ations
to
the
FHLBB or to State supervisory authoris also an important element in the demand for
ities;
mortgage
holdings of life insurance companies
funds in the financial community.
(which include all legal reserve companies) are based
Because of the difficulty of adapting available data
on direct reports from such companies to the FHLBB
to the precise definition of consumer credit adopted,
and the Institute of Life Insurance. Home mortgage
Federal Reserve faces problems of both over- and
debt held by commercial banks (including nondeposit
under-coverage, the net effect of which is probably
trust companies) are estimated by the Federal Resome understatement of the true total of consumer
serve Board from related call report figures compiled
credit outstanding.
by the Federal Reserve Board, the Federal Deposit
Insurance Corporation and the Comptroller of the
REFERENCES
Currency. Estimates for mutual savings banks are
General discussions of concepts and sources and compiled from FDIC call reports.
estimating techniques appeared in the Federal ReThe mortgage debt series also covers holdings
serve Bulletin for April 1953 and for October 1956. recorded by the various Government agencies,
Consumer credit estimates appear originally in sev- including the Federal National Mortgage Associeral monthly Federal Reserve releases of which ation, the Federal Housing Administration, the
the basic one is "Consumer Credit." Current data Veterans Administration, and the Home Owners'
with selected historical data appear in detail in Loan Corporation (for the period 1935-50).
monthly issues of the Bulletin supplemented by
The volume of mortgages held by real estate and
periodic revisions. The data are revised regularly mortgage companies, trust departments of commerin the fourth quarter of each year for the preceding cial banks, pension funds, philanthropic institutions,
year or two. A more comprehensive revision based fraternal organizations, casualty and fire insurance
on the survey of finance companies in mid-1960 was companies and individuals is more difficult to
published in the December 1961 Bulletin. A Fed- determine with certainty. Estimates for this misceleral Reserve pamphlet Consumer Credit Statistics, laneous group are based on the 1950 Census Bureau
February, 1963, contains selected data back to 1919. Survey of Residential Financing, updated by estimates of nonfarm mortgage recordings and related
Mortage Debt Outstanding on Nonfarm One- information.
to-Four Family Properties
The FHLBB publishes estimates of home mortgage
Estimates of mortgage debt on one-to-four family debt in a quarterly release, "Estimated Home Mortnonfarm homes are available for the end of each gage Debt and Financing Activity," and the Federal
year since 1925. The present series of quarterly Reserve Board publishes estimates of various cateestimates, dating from the first quarter of 1949, are gories of real estate debt regularly in the Bulletin.

114

33. BOND YIELDS AND INTEREST RATES
Taxable Bonds

3-Month Treasury Bills
Treasury bills are issued weekly. An average discount rate is computed for each weekly issuance, on
the basis of the varying prices at which portions of
the issue are awarded, in order, to the highest bidders.
The monthly series presented in Economic Indicators
is a simple average of the average rates for the 4 or 5
issues during the month.
The series is useful as a measure of a short-term
rate on relatively riskless borrowing. Issuance or
"auction" rates are related to but not typically
identical with average "market" rates, also published
by Federal Reserve, which are averages based on
daily trading quotations for the issue closest in
maturity to 3 months.
The monthly averages are issued in an advance
Federal Reserve release, G. 13, and are published in
the Federal Reserve Bulletin. Fuller information
on the individual issues appears in th§ Treasury
Bulletin. Textual discussion appears in Banking
and Monetary Statistics, with yield data back to 1929.

TREASURY NOTES AND BONDS

Two series of market yields on longer-term Treasury obligations are computed—3-5 year issues and
long-term bonds. The series covering 3-5 year issues
includes both notes and bonds and in July 1964
was composed of six issues. On the same date, the
series on long-term bonds comprised twelve issues,
all due or callable in more than 10 years. Prior to
April 1953 this series incorporated bonds due or
callable after 12 years and prior to April 1952 bonds
due or callable after 15 years.
Since 1942 both series have included fully taxable
issues. The maturity distribution of the obligations
entering into the averages varies with the passage of
time and as new issues are added or old issues
removed.
Both series are based on daily closing-bid quotations in the over-the-counter market as reported to
the Federal Reserve Bank of New York by leading
dealers in New York City. Prior to April 1953 the

Bond Yields and Interest Rates, 1947-64
(Monthly data.

Percent per annum)

PERCENT
5

CORPORATE AAA BONDS
(MOODY S)
TAXABLE GOVERNMENT BONDS

l.ilnln

1947

,,li,Inln

nlnlnlii

nlnlnln

n l n l n l n

nliiliiln

nhil

,lnLl, , 1 1 , 1 , , ! , ,

..Inlnln

|,,|,

lu.diLiliil..iJ..I

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

1964

SOURCE! MOOOY'S fNVESTORS SERVICE, BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. AND TREASURY DEPARTMENT

115

yields were computed on the basis of the mean of
closing bid and ask quotations. The table shows
averages of daily figures, each of which is an unweighted average of yields on the individual bonds.
The long-term series is published monthly in the
Treasury Bulletin. A similar series is published in the
Federal Reserve Bulletin, and in the Federal Reserve
release G. 13, Open Market Money Rates and Bond
Prices. The two series differ only in that the series in
the Treasury Bulletin includes yields based on "when
issued" prices for new issues. The difference is
generally very small and is limited to those months in
which new securities appear in the market. The 3-5
year series is published in the Federal Reserve Bulletin
and the G. 13 release.

High-Grade Municipal Bonds
This series, compiled by Standard & Poor's
Corporation, is an arithmetic average of the yield to
maturity of 15 high-grade tax-exempt, general obligation 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 bonds vary in
quality, however, as is indicated by the fact that the
yield sometimes exceeds that of U.S. taxable bonds.
The yields are based on Wednesday's closing bid
quotation, 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 from 1929 on a weekly, and from 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 1964 edition of Standard & Poor's Security
Price Index Record.

Corporate Aaa and Baa Bonds
These series measure the currently prevailing
maturity yields on seasoned 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

116

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 7 industrials, 6 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 figures 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 the
dealers' asked quotation, adjusted as necessary for
occasional abnormally wide spreads between the bid
and asked quotation or for other temporarily distorting factors. 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
seasoned bonds of the respective grades with sufficiently long 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, particularly those
on new offerings; nor do they reflect changes in qualitative terms of borrowing such as call provisions.
The daily corporate bond yield averages are published weekly in MoodyJs 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 Moody1 s Industrial Manual.

TABLE

33.—Bond Yields and Interest Rates
[Percent per annum]

U.S. Government
security yields

High-grade
municipal
bonds
(Standard
& Poor's)

Year
3-month
Treasury
bills 1

3-5 year
issues2

Taxable
bonds 3

1929
1930
1931
1932
1933
1934

Corporate bonds
(Moody's)

Aaa

Baa

4. 27

4.73

5.90

5.85

(5)

4.07
4.01
4.65

4.55
4. 58
5.01
4. 49
4.00

5.90
7.62
9.30
7.76
6.32

3.59
2.64
2.73
1.73
1.02

(6)
(66)
( 5)
()

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

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

(6)
(6)
(6)
/6\

.75
. 81
1.03
1.44
1. 49

(5)
(5)
(5)

1.402
.879
. 515
.256

2.66
2. 12

4. 71
4.03

1935
1936
1937
1938
1939

. 137
. 143
.447
.053
.023

1.29
1. 11
1. 40
.83
. 59

3.40

1940
1941
1942
1943
1944

.014
. 103
. 326
.373
. 375

.50
.76
1. 13
1.34
1.33

2.50
2. 46
2.47
2. 48

2. 36
2.06
1.86

.375
. 375
. 594
1. 040
1. 102

1. 18
1. 16
1.32
1.62
1. 43

2.37
2. 19
2. 25
2. 44
2. 31

1. 67
1. 64
2.01
2. 40
2. 21

2. 62
2. 53
2. 61
2.82
2. 66

3.29
3. 05
3. 24
3.47
3. 42

1. 218
1. 552
1. 766
1. 931
. 953

1.
1.
2.
2.
1.

2.
2.
2.
2.
2.

1.98
2. 00
2. 19
2. 72
2. 37

2.
2.
2.
3.
2.

62
86
96
20
90

3.24
3. 41
3. 52
3. 74
3. 51

1. 753
2. 658
3. 267
1. 839
3.405

2. 50
3. 12
3. 62
2. 90
4.33

2. 84
3.08
3.47
3.43
4.08

2.
2.
3.
3.
3.

53
93
60
56
95

3. 06
3.36
3. 89
3. 79
4. 38

3. 53
3.88

2. 928
2.378
2. 778
3. 157
3.549

3.99
3. 60
3. 57
3. 72
4.06

4.02
3. 90
3. 95
4.00
4. 15

3. 73
3. 46
3. 18
3. 23
3.22

4.41
4. 35
4. 33
4. 26
4. 40

5. 19
5.08
5.02
4.86
4.83

1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964

_ _

_
-_
_

_ __
.- -

_ _ _. ._
_ __ _ . _ _
- -

__ _______

_ _

_ _ _ _ _

50
93
13
56
82

3. 07
3. 10
2.91
2. 76
2. 10

32
57
68
94
55

Prime com- F H A new
mercial
home
paper, 4-6 mortgage
months
yields 4

4. 71

4. 73
5.05

(5)
(6)

4. 34

1.45

4. 15

2. 16

4.
4.
4.
4.

2. 33
2. 52
1. 58

23
30
65
60

3. 81
2.46
3.97

4. 65
4.80
5.44
5.49
5.77

3.85

6. 16

2. 97
3.26
3. 55
3. 97

5. 78
5. 60
5.46
5. 45

2. 18

3. 31

1
2
3

Rate on new issues within period.
Selected note and bond issues. Prior to 1941 these were tax-exempt issues.
Series includes: April 1963 to date, bonds due or callable 10 years and after; April 1952-March 1953, bonds due or callable after 12 years; October 1941-March 1952,
bonds
due or callable after 15 years.
4
Based on the maximum permissible interest rate (5H% since May 1961), and 25-year mortgages paid in 12 years, until 1962. From 1962,30-year mortgage paid in
15 years.
«Not available.
Sources: Treasury Department, Board of Governors of the Federal Reserve System, Federal Housing Administration, Standard & Poor's Corporation, and
Moody's Investors Service.

Prime Commercial Paper
This series measures the prevailing rate on prime
4 to 6 months7 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 deter-

mined 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.

117

areas of insuring office cities as of the first of each
month.
Transactions are for immediate delivery of home
mortgages in the secondary market and exclude
seasoned mortgages or deliveries to Federal National
Mortgage Association. Average prices are net after
discounts, commitment fees, or other charges.
FHA New Home Mortgage Yields
Price quotations prior to January 1956 represent
Yields on mortgages on new homes insured by the typical transactions; after that date, they represent
Federal Housing Administration are computed from new-home mortgages with a 10 percent downpaya national average of secondary market prices. ment and a 25-year maturity. Prior to March 1956,
Mortgages in this series carry FHA's maximum per- the national average prices were unweighted; submissible interest rate, and, until 1961, a maturity of sequently, data have been weighted to reflect the
25 years, and the assumption is made that they will probable volume of transactions in the various insurbe prepaid at the end of 12 years. From 1962 the ing office areas. After a regulatory change in FHA's
series is based on 30-year mortgages that will be maximum permissible interest rate, generally a lapse
prepaid at the end of 15 years. Data on prices per of about two months is required before a national
$100 of mortgage loan amount are based on FHA average price can be computed on a firm basis for
field office opinion reports on transactions in market mortgages bearing the new interest rate.
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.

34. COMMON STOCK PRICES, YIELD, AND EARNINGS
Price Indexes
The Standard and Poor's composite price index
measures the average price movement of a sample of
common stocks listed on the New York Stock
Exchange. The sample, selected from the more
actively traded shares, currently includes 500 stocks,
accounting for about 85% of the total market value
of all common stocks listed on the Exchange. The
base of the index is the aggregate value of the shares
of these securities in the period 1941-43, considered
as equal to 10. Weekly figures shown in the monthly
Economic Indicators are averages of daily figures
(except that for the capital and consumer goods
series Wednesday figures are used). Monthly figures
are averages of daily figures, and annual figures are
averages of the twelve monthly indexes.
The index is shown in Economic Indicators for three
main subgroups: industrials (with further classification into capital goods and consumers' goods groups),
railroads, and public utilities.
The index measures fluctuations in current market
values of the sample. Each component stock is
weighted according to the number of shares outstanding at the time of observations. Appropriate
adjustments in these weights and/or base period
values are made on the occasion of stock dividends,
split-ups, consolidations or similar events, to insure
that the index will reflect only price movement.

118

The Standard & Poor's Corporation also provides
readings of the composite 500-stock index and of the
three main sub-categories hourly, with closing and
high and low values for the day.
It should be noted that this series covers active
listed stocks on the New York Stock Exchange only,
and may not reflect price movements on other exchanges or in over-the-counter issues.
Price-Earnings Ratios and Dividend Yields
The price-earnings ratio compares the aggregate
value of the stocks in the index as of the last day of
the quarter with the latest available quarterly earnings, adjusted for seasonal influences and converted
to an annual rate. Since 1935, annual data are
averages of the four quarterly ratios. Prior to that
time, annual data were based on annual earnings and
end of year prices.
Dividend yield, or dividend-price ratio, is the ratio
of the current annual rate of cash aggregate dividends
to aggregate market value based on Wednesday closing prices. Monthly yield figures are averages of the
four or five weekly figures. Annual data are averages of the 12 monthly figures.
Standard & Poor's Stock Price Indexes are privately
published. Indexes for the main groups appear
hourly and daily on the tickers of stock exchanges
and are also sent over the wires of news services.

TABLE

34.—Common Stock Prices, Yield, and Earnings
Price index

Period

Industrials
Total

Total

Capital
goods

Public
utilities
Consumers'
goods

Dividend
yield 2
(percent)

Price/
earnings
ratios 3

Railroads

1941-43=10
1929

26. 02

21.35

21.48

22.49

59.33

46. 15

3.47

13.32

1930
1931
1932
1933.
1934

21.03
13. 66
6.93
8.96
9.84

16.42
10. 51
5.37
7.61
9. 00

16.24
8.81
3.99
6.33
7.62

15.67
11. 41
6. 19
8.27
9. 85

53. 24
37. 18
20. 65
19.72
15. 79

39.62
23. 72
8.75
12. 75
14. 05

4.51
6. 15
7.43
4.21
3.72

15.81
13.31
16. 80
22. 95
19.39

1935
1936
1937
1938
1939

10.60
15.47
15.41
11. 49
12. 06

10. 13
14.69
14.97
11.39
11.77

8.91
13.96
15.34
11.26
11.91

11. 18
14.90
13.81
10.77
11.88

15. 15
22.47
19.07
14. 17
16.34

11.78
17.71
16.86

3.82
3.44
4.86

9. 15
9.82

5. 18
4.05

14. 18
15. 44
12.38
18.38
13.80

1940.
1941.
1942.
1943.
1944.

11. 02
9.82
8.67
11.50
12.47

10.69
9.72
8.78
11.49
12.34

11.07
10.21
8.93
10.87
11. 23

11. 34
9.80
8.56
11.65
13.43

15. 05
10.93
7. 74
11. 34
12.81

9. 41
9.39
8.81
11. 81
13.47

5.59
6.82
7.24

4. 93
4.86

10.24
8.26
8.80
12. 84
13.66

1945.
1946.
1947.
1948.
1949

15. 16
17.08
15. 17
15.53
15. 23

14. 72
16.48
14.85
15.34
15. 00

13.66
15.86
14.27
14. 67
14. 14

16.46
19. 22
16.38
15.75
15. 76

16.84
20. 76
18. 01
16. 77
17.87

18.21

19. 09
14. 02
15.27
12. 83

4. 17
3.85
4.93
5. 54
6. 59

16.33
17.69
9. 36
6.90
6.64

1950
1951
1952
1953
1954

18.40
22. 34
24. 50
24. 73
29.69

18.33
22.68
24. 78
24.84
30. 25

18.07
22. 54
23.04
23.46
29.93

18. 97
20. 99
21.40
21. 91
24.85

19. 96
20. 59
22.86
24.03
27. 57

15. 53
19.91
22.49
22.60
23. 96

6. 57
6. 13
5.80
5.80
4. 95

6.63
9.27
10.47
9.69
11. 25

1955
1956
1957
1958
1959

40. 49
46.62
44.38
46. 24
57. 38

42.40
49.80
47.63
49. 36
61. 45

42.55
48.79
47. 01
47.93
63.93

32.28
34.55
32.48
36.33
47. 35

31.37
32.25
32. 19
37.22
44. 15

32.94
33.65
28. 11
27.05
35. 09

4. 08
4.09
4.35
3.97
3.23

11. 50
14.05
12.89
16. 64
17.05

1960
1961
1962
1963
1964

55. 85
66.27
62. 38
69.87
81.37

59. 43
69.99
65.54
73.39
86. 19

59. 75
67.33
58. 15
63.30
76.32

47. 21
57.01
54.96
62. 28
73.83

46.86
60. 20
59. 16
64.99
69. 91

30.31
32. 83
30.56
37.58
45. 46

3.47
2.97
3.37
3. 17
3.01

17. 09
21.06
16.68
17.62

1
Includes 500 common stock, 425 are industrials; 50 are public utilities; and 25 are railroads.
2 Aggregate cash dividends (based on latest known annual rate) divided by the aggregate monthly market value of the stocks in the group. Annual yields are
averages
of monthly data. .Weekly data are Wednesday figures.
3
Ratio of price index for last day in quarter to quarterly earnings (seasonally adjusted annual rate). Annual ratios are averages of quarterly data.
Source: Standard and Poor's Corporation.

119

FEDERAL FINANCE
35. FEDERAL ADMINISTRATIVE BUDGET RECEIPTS AND EXPENDITURES
DESCRIPTION OF SERIES

Budget receipts and expenditures are frequently
referred to as the conventional or administrative
budget, to distinguish them from other budget
concepts. They measure the financial transactions
of all federally owned Government funds. Budget
receipts are derived mainly from individual and
corporate income taxes, but also from excise taxes,
estate and gift taxes, 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 outlays for goods and services, transfer
payments to individuals, aids 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 monies held in
trust by the Government for specific purposes, are
excluded from both budget receipts and expenditures.
"Net budget receipts/' as shown in the table on the
following page, represent the total revenues collected
for the general fund and for special federally owned
funds whose receipts are earmarked under law for
specific purposes, less (a) refunds of receipts, (b)
transfers of receipts to trust funds in those cases
where the law provides an indefinite appropriation
to a trust fund in an amount based on certain tax
receipts, and (c) certain interfund transactions,
namely 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 expenditure
basis in budget expenditures figures.
"Net budget expenditures" cover Governmentowned funds; namely, the general fund, the special

120

funds, the public enterprise revolving 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
budget expenditures. 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 excluded to avoid double counting. Certain interfund 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 the Treasury by
such funds is the major category of this kind.
Net budget expenditures do not include retirement
of Government debt, nor do they include investments
of Gbvernment enterprises in United States securities.
"National defense," shown in the table, is a major
classification of budget expenditures which is currently used in the budget. It comprises: (1) Department of Defense military functions; (2) military
assistance to other nations; (3) development and
control of atomic energy; and (4) stockpiling and
certain other defense-related activities.
The "budget surplus or deficit'7 represents the
difference between budget receipts and budget
expenditures.
The "public debt" figures shown consist of all
securities issued or guaranteed by the U.S. Government, excluding guaranteed securities held by 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) trust fund transactions ; (3) the use of Government corporation borrowing directly from the public or the utilization of
their net receipts to repay such borrowing; and
(4) changes in the amount of checks outstanding.

TABLE 35.—Federal Administrative Budget Receipts and Expenditures
[Billions of dollars]
Net budget expenditures
National defense ]

Fiscal year
Net budget
receipts

Department
of Defense,
military
functions

Total
Total

1929 _

3. 9

3. 1

0. 7

1930_
1932 _
1933__
1934__

4. 1
3. 1
1. 9
2.0
3.0

3.3
3.6
4. 7
4. 6
6.6

.7
.7
. 7
. 6
. 5

. 7
.7
. 7
. 6
.5

1935.
1936.
1937.
1938_
1939_

3. 7
4.0
5.0
5. 6
5. 0

6. 5
8.4
7.7
6.8
8.8

. 7
. 9
.9
1.0
1. 1

.7
.9
.9
1.0
1. 1

1940.
1941.
1942.
1943.
1944.

5. 1
7. 1
12. 5
21.9
43. 6

9. 1
13.3
34.0
79. 4
95.0

1.
6.
24.
63.
76.

1945.
1946_
1947_
1948.
1949.

44.4
39.6
39.7
41.4
37.7

98.3
60.3
38.9
33.0
39.5

19501951.
1952.
1953.
1954.

36.4
47.5
61.3
64.7
64.4

1955.
1956.
1957.
1958.
1959.
1960.
1961.
1962_
1963.
1964.

Budget
surplus or
deficit ( - )

Public debt
(end of
period) 3

Military
assistance 2

0.7

0. 7

16.9

. 7
. o

-2.7
-2.6
-3.6

16. 2
16. 8
19.5
22.5
27. 7

-2.8
-4. 4
-2.8
-1. 2
-3.9

32.8
38. 5
41. 1
42.0
45. 9

0.4
. 5
. 9

-3.9
-6.2
-21.5
-57.4
-51.4

48. 5
55.3
77.0
140.8
202.6

80.0
42.0
13.8
10. 9
11.6

1.2
1. 1
.3
.3
.4

-53.9
-20.7
.8
8.4
-1.8

259. 1
269.9
258.4
252.4
252.8

13.0
22.5
44.0
50.4
47.0

11.9
19.8
38.9
43.6
40.3

. 1
1.0
2.4
4.0
3.6

-3. 1
3.5
-4. 0
-9.4
-3. 1

257.4
255.3
259.2
266. 1
271.3

64.4
66.2
69.0
71.4
80.3

40.7
40.7
43. 4
44.2
46. 5

35.5
35. 8
38. 4
39. 1
41. 2

2.3
2.6
2.4
2.2
2.3

-4.2
1.6
1.6
-2.8
-12.4

274.4
272.8
270.6
276.4
284. 8

76.5
81.5
87.8
92.6
97.7

45.7
47.5
51. 1
52.8
54.2

41.2
43.2
46.8
48.3
49. 8

1.6
1.4
1. 4
1.7
1.5

1.2
-3.9
-6.4
-6.3
-8.2

286.5
289.2
298.6
306.5
312. 5

1.5
6.0
23.6
62.7
75.8

81.3
43.2
14.4
11.8
12.9

39.5
44.0
65.3
74. 1
67.5

60.2
67.8
70.6
68.6
67. 9
77.8
77.7
81.4
86.4
89. 5

5
1
0
2
8

1
Includes military functions of Department of Defense, military assistance, Atomic Energy Commission, stockpiling, defense production expansion, and certain
other
defense-related activities. For 1942-46, also includes Coast Guard.
2
Expenditures for 1941 through 1946 represent the part of defense aid (lend-lease) classified as military.
3
Includes guaranteed securities held outside the Treasury. Not all of total shown is subject to statutory debt limitation.
* Beginning in 1932, total budget receipts and expenditures have been adjusted to exclude certain intragovemmental transactions.
a Loss than $50 million.

40-752O—65

121

3. Cash withdrawals, payments to the public, and
Federal expenditures as reported by the Census
Data on budget receipts and expenditures for include actual disbursements for interest rather than
actual past periods are derived for the most part interest accruals.
from accounting records rather than statistical esti4. Federal receipts and expenditures in the
mating procedures. Budget receipts and expendi- national income accounts and Federal revenues and
tures are published each month by the Treasury expenditures as reported by Census exclude loans,
Department in the Monthly Statement of Receipts and loan repayments, and related financial investments
Expenditures of the United States Government.
from both receipts and expenditures.
Under a reporting procedure instituted in February
5. Federal expenditures in the national income
1954 (which also covers comparative data for part of accounts exclude purchases of existing physical
fiscal 1953), budget expenditures are reported on the assets.
basis of checks issued or cash payments made by
6. Census figures record transactions of some
Government disbursing officers, except that since public enterprises such as the Post Office on a gross
June 1955, interest on the public debt has been rather than a net basis—that is, postal receipts
reported on an accrual basis.
are counted as revenue rather than as an offset to
Data for fiscal 1952 and earlier were reported on a expenditures.
different basis under which receipt and expenditure
totals were derived primarily from daily telegraphic (b) Timing
7. Budget receipts as well as cash receipts are
reports from Federal Reserve Banks reporting deposits and withdrawals clearing through the accounts by-and-large on a cash basis, whereas Federal receipts
in the national income accounts record tax revenues
of the Treasurer of the United States.
Data on the public debt are published in the mainly on an accrual basis.
8. Budget expenditures are on a checks-issued
Daily Statement of the United States Treasury (with
details at the end of each month) as well as in the basis whereas payments to the public and Treasury
cash withdrawals are recorded on a checks-paid basis.
Monthly Statement.
9. Budget expenditures are largely measured at
RELATION TO OTHER SERIES
the time of payment, whereas that portion of Federal
expenditures in the national income accounts which
Budget receipts and expenditures are one of the consists of purchases of goods and services is reported
five major series dealing with Federal Government at the time of delivery.
income and outgo. The others are:
1. Cash receipts from and payments to the public.
USES AND LIMITATIONS
2. Cash deposits in and withdrawals from the
The main use for budget receipts and expenditures
Account of the Treasurer of the United States.
is
as a guide to executive and legislative budget and
3. Federal receipts and expenditures in the natax
policy. Budget receipts and expenditures figure
tional income accounts.
prominently
in the annual budget process, involving
4. Federal revenue and expenditures as reported
the
projection
of fund requirements by Government
by the Bureau of the Census.
agencies, and preparation of an integrated executive
The differences among these various measures are budget including estimates under both existing law
mainly ones of coverage and timing. Significant and under proposed changes in laws and programs.
specific differences are:
The administrative budget also is the vehicle for
(a) Coverage
congressional review and enactment of annual appro1. All four of the other measures encompass, in priation bills, agency financial management, and it
addition to budget amounts, the very sizable trans- also is a prime consideration in changes in tax legislation. Moreover, the relationship between the totals
actions of Federal trust funds with the puBlic.
2. Transactions of five Government-sponsored of budget receipts and budget expenditures usually
enterprises not included in the budget are included serves as the major determinant of increases or
(on a net basis) in cash payments to the public and decreases in the public debt. Finally, since this
(to the extent such transactions affect the Treasurer's series is prepared in detail based on the Government's
financial accounts, it is a basic source of data for
cash position) in cash withdrawals.
STATISTICAL PROCEDURES

122

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, the
operations of the trust funds and Governmentsponsored enterprises play an important role in the
economy which is not reflected in the budget figures.
Moreover, 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 accrue. In addition,
Federal guaranties and insurance of private loans
also influence the economy, although they have a
relatively minor effect on budget receipts or
expenditures.
REFERENCES

The basic release of the budget receipts 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
III-10 in the U.S. Income and Output and Part 6,
Special Analysis A, "Three Measures of Federal
Financial Transactions/' in the Budget of the United
States Government for fiscal 1966.

36. FEDERAL CASH RECEIPTS FROM AND PAYMENTS TO THE PUBLIC
DESCRIPTION OF SERIES

These series, often referred to as the consolidated
cash statement, present information on the cash
flows between the public and the Federal Government as a whole. They represent, in effect, a consolidated statement of Federal cash transactions
with the public—other than borrowing. 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.
The Government includes, in addition to the Federal
funds comprising budget receipts and expenditures,
the transactions of trust and (on a net basis) of
deposit funds and Government-sponsored enterprises.
STATISTICAL PROCEDURES

Annual totals and unadjusted monthly and
quarterly cash receipts from and payments to the
public are taken from accounting records rather
than statistical estimates. These series are based
on data published in the Monthly Statement of
Receipts and Expenditures of the United States

Government and the Daily Statement of the United
States Treasury.
The figures on Federal cash receipts from and payments to the public are derived from the conventional
budget data by making three basic adjustments: (1)
adding receipts and expenditures of Federal trust and
deposit funds, and certain net transactions of Government-sponsored enterprises which are not considered a part of the Government in the conventional
budget figures (the enterprises are 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); (2) eliminating intragovernmental
transactions which do not involve any flow of money
with the public; and (3) shifting to a cash basis (i.e.,
a checks-paid basis) certain noncash transactions
recorded as receipts or expenditures in the budget
and trust accounts. For example, the semiannual
increase in the redemption value of Series E savings
bonds, although a part of budget expenditures, is deducted from cash payments while interest actually
paid in cash to the public on savings bonds redeemed
during the years is added. Receipts of the Government from exercise of the monetary authority—

123

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 have been
discussed in the section on the administrative budget
and are as follows:
1. Federal Government receipts and expenditures
in the national income accounts 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 for goods and
services in the national income accounts consisting of
purchases of goods and services are recorded to the
maximum extent possible on the basis of time of delivery rather than time of payment.
RELATION TO OTHER SERIES
3. Federal Government employer and employee
The major differences between "cash receipts and contributions to employee retirement funds are conexpenditures" and "budget receipts and expendi- sidered intragovernmental transactions and are detures" were enumerated above. The cash series are ducted from both receipts and payments in arriving
very similar in general concept to the series on Treas- at the consolidated cash totals, whereas in the naury cash deposits and withdrawals published in the tional income accounts, payments of both employers
Daily Statement oj the United States Treasury. Both and employees are counted both as receipts ("con-

seigniorage on silver—are subtracted as are payments
to certain international organizations made in the
form of notes. When the notes are redeemed, this
constitutes a cash outflow and a cash payment.
Historical data have been adjusted wherever possible for conceptual and statistical revisions of this
series. Data beginning with fiscal year 1953 and
calendar year 1954 are on the reporting basis instituted in February 1954.
Seasonally adjusted data published in Economic
Indicators have been derived by applying the Census
Bureau's Univac X-9 method to the two totals—cash
receipts and cash payments. Quarterly data from
1947 to date are adjusted using this Univac method,
a variant of the Univac II method.

Cash Receipts From and Payments to the Public, 1947-64
(Quarterly data.

Seasonally adjusted)

BILLIONS OF DOLLARS
35

EXCESS OF RECEIPTS OR PAYMENTS

-5

1947

i I i I

i I

i i

i I i

I i 1 i

i I i I

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

SOURCE OF DATA: BUREAU OF THE BUDGET

124

1964

TABLE

36.—Federal Cash Receipts from and Payments to the Public
[Billions of dollars]

Cash
receipts
from the
public

Cash
payments
to the
public

3.8

2.9

0.8

1930
1931
1932
1933
1934

4.0
3.2
2. 0
2. 1
3. 1

3. 1
4. 1
4. 8
4.7
6.4

.9
-1.0
-2. 7
-2.6
-3.3

1935
1936
1937
1938
1939

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

1940
1941
1942
1943 J
1944

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

1945
1946
1947
1948
1949

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

67. 8
77. 1

70. 5
72. 5

-2.7
4.5

Year

Fiscal year:
1929

1950
1951
1952
1953
1954

_ -_ _ _

__ __ __

1955
1956

Cash
receipts
from the
public

Cash
payments
to the
public

1957
1958
1959
1960
1961
1962

82. 1
81.9
81.7
95. 1
97.2
101. 9

80.0
83. 5
94.8
94.3
99.5
107, 7

2. 1
-1.6
-13. 1
.8
-2.3
— 5. 8

1963
1964
Calendar 3year:
1943
1944

109.7
115. 5

113,. 8
120.. 3

-4.0
— 4. 8

37.9
48. 1

89., 0
94,8

-51. 1
-46.7

1945 .
1946 _.
1947
1948
1949

49. 4
41.4
44.3
44.9
41.3

86. 1
41. 4
38. 6
36.9
42. 6

-36. 7

1950
1951 _
1952
1953
1954

42.4
59. 3
71. 3
70.2
68.6

42.0
58. 0
72. 0
77. 4
69. 7

.5
1. 2
-. 6
-7.2
-1. 1

71. 4
80.3
84. 5
81. 7
87.6
98.3
97.9
106. 2
112. 6
115.0

72. 2
74.7
83. 4
89. 0
95.6
94.7
104.7
111. 9
117. 2
120.9

-. 7
5.6
1. 1
-7. 2
-8.0
3.6
-6.8
-5.7
-4. 6
-5.8

Excess of
receipts
or payments ( —)

-5.3
-.2

Year

1955
1956
1957
1958
1959
1960
1961
1962
1963 .
1964

___

Excess of
receipts
or payments (—)

5.7
8.0
-1.3

1
Data for fiscal years prior to 1944
are not exactly comparable with those3for later years in that only major intragovernmental transactions have been eliminated
2
in the earlier years.
Less than $50 million.
First calendar year for which data are available.
Sources: Treasury Department and Bureau of the Budget.

tributions 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. Transactions of public enterprises 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

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
budget receipts and expenditures. Moreover, since
it furnishes comprehensive totals of cash transactions,
the consolidated cash series is valuable for determining Government financing and net borrowing requirements and for analyzing the financial impact of the
Government's overall program. Nevertheless, for
purposes of economic analysis the cash receipts and
payments series has certain shortcomings.
Any series on overall Government transactions is
necessarily an aggregation of many different kinds
of transactions with widely varying economic effects.
Government loans and purchases of existing assets in
most cases do not have the same impact as an equivalent sum expended for Government purchases of
currently produced goods and services. Equivalent

125

sums collected from income taxes or estate taxes
may also be expected to vary in effect. The date of
accrual of tax liabilities may have a more important
impact on the economy than the actual tax payment.
Other steps in the Federal financial process may be
important indicators of economic impact. 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.
Finally, other financial activities have important
economic effects. For example, Federal guaranties
and insurance of private loans 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 a factor which has particular impact in the money and credit markets of the economy.

Annual data by fiscal years back to 1929 are published in the Historical Statistics of the United States?
Colonial Times to 1957. 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 annual Budget Review, when prepared
by the Bureau of the Budget in the 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 the 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 Monthly Statement of Receipts
and Expenditures of the United States Government and
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 "Receipts From and
Payments To the Public, Supporting Tables and
REFERENCES
Supplementary Information." This release is issued
Unadjusted monthly data on Federal cash receipts in conjunction with the annual publication of the
from and payments to the public appear in the Budget of the United States Government. A summary
Monthy Statement of Receipts and Expenditures of the reconciliation of the differences between this series
United States Government, Treasury Bulletin, and the and the Treasury cash deposits and withdrawals
Federal Reserve Bulletin, and quarterly data in series is published monthly in the Treasury Bulletin
Economic Indicators and the Federal Reserve Bulletin. and annually in "Receipts From and Payments To
Seasonally adjusted quarterly data also appear in the Public, Supporting Tables and Supplementary
Economic Indicators and the Federal Reserve Bulletin. Information."

37. FEDERAL BUDGET, NATIONAL INCOME ACCOUNTS BASIS
DESCRIPTION OF SERIES

This series reports Federal transactions as they
are recorded in the U.S. income and output accounts.
The Federal sector data are designed to measure the
purchases of current output by the Federal Government and the relationship of Federal receipts and
other Federal expenditures to national, personal, and
disposable personal income. (See descriptions of
these concepts in prior sections of this Supplement.)
The Federal sector is recorded in a manner consistent
with the conceptual treatment of the personal,
business, and State and local government sectors in
the national income and output accounts.
Federal purchases of goods and services are measured, insofar as is possible, on a delivery basis
rather than on an obligation, checks-issued, or pay-

126

ments basis. This timing of purchases corresponds
more closely to current production. Receipts, by
and large, are on an accrual basis. For example,
corporate profits taxes are included as liabilities when
incurred, rather than when collected. There may
be a substantial lag between the accrual of a liability
and its collection.
As shown in the table, expenditures in the Federal
sector account are presented in a 5-way classification:
Federal purchases of goods and services is the only
category of Federal spending which is included in the
gross national product (GNP). These purchases
represent the value of the Nation's currently produced output bought directly by the Federal Government. They include the pay of military and
civilian employees of the Federal Government, outlays on equipment and supplies for defense and other

Federal Expenditures, National Income Accounts Basis, 1947-64
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
120

GRANTS TO STATE & LOCAL GOVERNMENT
1

r-»

I ... I ... I .......
1947

1948

1949

1950

1951

80URCE OF DATA'. DEPARTMENT OF COMMERCE

programs, new construction, and the capital formation of Government enterprises.
Transfer payments and net interest paid by the
Federal Government are outlays in return for which
no current service is deemed to be obtained; the
most important transfer payments include such items
as old-age and survivors' insurance benefits, unemployment compensation, and military and veterans
pensions. Although such transfer payments are not
included in GNP, they do enter into the income
stream and have an impact on national output; they
are reflected in the GNP in another sector of the
accounts when respent by the recipients.
Federal grants-in-aid to State and local governments,
like transfer payments and net interest paid, have
their impact on GNP when respent by the recipient
governmental unit. Most grants are for highways,
public assistance, and public health.
Private incomes are also affected by Federal
subsidies and by the net surplus of Government
enterprises in their operations with the public.
These subsidies less current surplus of Government
enterprises reflect mainly Government payments to
farmers, certain outlays for the export and disposal
of surplus agricultural commodities, shipping subsidies, payments to air carriers, and the current

operating deficit of the Post Office and Government
enterprises.
The receipts of the Federal sector account are
shown in a 4-way classification: (1) Personal tax and
nontax receipts consist mostly of individual income
taxes, estate and gift taxes, and certain charges for
Government services, fines, and penalties; (2) corporate profits tax accruals represent the Federal tax
liability incurred and accrued by resident corporations on their corporate earnings during the specific
year or period; (3) indirect business tax and nontax
accruals primarily include liquor, tobacco, and other
excise taxes, and customs duties; (4) contributions
for social insurance are composed chiefly of employment taxes, contributions to the retirement funds
for Government employees, and deposits by the
States to the unemployment trust fund.
STATISTICAL PROCEDURES

Data for the Federal sector account are based on
the Budget of the United States Government, reports
of various agencies (particularly the Internal Revenue
Service), and (unlike other records of Federal transactions) to a large extent, on estimates made by the
Department of Commerce. Thus, the results are
to be regarded as statistical estimates, rather than
as accounting totals in the ordinary sense.

127

Data are available quarterly and annually for both
As to netting and consolidation, the national income
the fiscal and calendar years. The quarterly figures accounts record both interest paid by the Governare published in seasonally adjusted as well as in ment and Government purchases on a net basis.
unadjusted form. Both expenditures and receipts Accordingly, interest received by the Government is
are seasonally adjusted by applying the adjustments excluded from receipts and subtracted from Federal
individually to their many components having interest payments; and receipts from sales of Govmarked seasonal variation. The seasonally adjusted ernment products are similarly subtracted from
total is the sum of the several separately adjusted Government purchases. Neither adjustment affects
components. Many statistical adjustment tech- the surplus or deficit, for, in effect, both receipts and
niques are used including the moving average and expenditures are decreased by the same amount.
least squares methods. The deficit or surplus is not
Adjustments for consolidation are needed to reflect
seasonally adjusted separately. The seasonally ad- in the Federal sector account a few transactions such
justed deficit or surplus is the difference between as employer and employee contributions to Federal
seasonally adjusted receipts and expenditures.
employees' retirement funds. These contributions
are part of the total compensation of Government
RELATION TO OTHEE MEASURES
employees, but are excluded from the consolidated
The Federal sector account differs from the budget cash statement. Again, the deficit or surplus is
receipts and expenditures series and the consolidated unaffected by the adjustment, since total receipts
cash series in several major respects: (1) coverage, and expenditures are both increased by the same
(2) netting and consolidation, (3) timing, and (4) amount.
the exclusion of capital transactions.
With respect to timing, business taxes are recorded
With respect to coverage, the Federal sector ac- in the national income accounts as they are accrued
count, unlike the administrative budget, includes by the private sector, rather than when they are
the trust and deposit funds. It omits the revenues collected by the Government. The accrued liability
and expenditures of the District of Columbia, which is more likely to coincide with the effects of corporate
are classified by the Department of Commerce in taxes on corporate spending decisions than are the
collections. The principal timing adjustments for
the State and local government sector.
Federal Receipts, National Income Accounts Basis, 1947-64
{Quarterly data.

Seasonally adjusted annual rates)

BILLIONS OF DOLLARS
120

CORPORATE PROFITS TAX ACCRUALS

CONTRIBUTIONS TO SOCIAL INSURANCE
i

1947

1948 1949 1950 1951 1952 1953 1954 1955 1956

SOURCE OF DATA: DEPARTMENT OF COMMERCE

128

1957 1958 1959 1960 1961 1962

1963

1964

TABLE

37.—Federal Budget, National Income Accounts Basis
[Billions of dollars]
Federal Government (expenditures

Federal Government receipts

Calendar
year

Total

Personal
tax and
nontax
receipts

Corporate
profits
tax
accruals

Indirect Contribusiness butions
tax and to social
nontax insurance
accruals

Total

Subsidies
PurGrants
less
chases Transfer to State
Net
current Surplus
payof goods
and
interest surplus
or
and
local
paid
ments
of Gov- deficit
services
governernment
ments
enterprises

1929

3. 8

1. 3

1. 2

0. 1

2. 6

1. 3

0. 7

0. 1

0. 4

0. 1

1. 2

1930
1931
1932. _
1933--.
1934

3. 0
2. 0
1. 7
2. 7
3.5

1. 1
.6
.3
.5
.6

.7
.4
.3
.5
.6

1. 0
.9
.9
1.6
2.2

.1
.1
.1
.1
.1

2. 8
4. 2
3.2
4.0
6.4

1. 4
1. 5
1.5
2.0
3.0

.7
1. 7
.9
.7
.6

.1
.3
.1
.5
1.6

.4
.4
.5
.5
.6

.1
.2
.2
.3
.6

.3
-2. 1
-1.5
-1.3
-2.9

1935
1936
1937
1938
1939

4.0
5.0
7.0
6.5
6. 7

.8
1. 1
1.7
1.6
1. 2

.8
1.3
1.3
.9
1. 3

2.2
2.3
2.4
2.2
2. 3

.1
.4
1.6
1.7
1. 9

6.5
8.5
7.2
8.5
9. 0

2.9
4.8
4.6
5.3
5. 2

.6
2. 1
.8
1.2
1. 2

1.7
.7
.8
.8
1. 0

.5
.5
.6
.6
.6

.7
.4
.5
.6
.9

-2.6
-3.5
-.2
-2.0
-2. 2

1940
1941
1942
1943 _1944 __

8. 6
15. 4
22. 9
39. 3
41. 0

1. 4
2. 0
4. 7
16. 5
17.5

2. 6
7. 3
11. 1
13. 6
12. 5

2. 6
3. 6
4. 0
4. 9
6.2

2. 0
2. 5
3. 2
4. 2
4.8

10. 1
20. 5
56. 1
86. 0
95.6

6.2

16. 9
52. 0
81. 2
89.0

1. 4
1. 4
1. 4
1. 2
1.8

.9
.8
.9
.9
.9

.7
.8
1. 0
1. 7
2.4

.9
.7
.8
.9
1.4

— 1. 4
— 5. 1
—33. 2
-46. 7
-54.6

1945
1946
1947
1948
1949

42. 5
39.2
43.3
43.4
39. 1

19. 4
17.2
19. 7
19.0
16.2

10. 2
8. 6
10. 7
11.8
9.8

7. 1
7.9
7.9
8. 1
8.2

5. 8
5.5
5. 1
4. 5
4.9

84. 8
37.0
31. 1
35.4
41.6

74. 8
20.6
15.6
19.3
22.2

4. 3
9.5
9.0
9.2
12.0

.9
1. 1
1.7
2.0
2.2

3. 3
4. 2
4. 2
4.3
4.4

1. 5
1.6
.6
.6
.7

— 42. 3
2.2
12.2

1950
1951
1952
1953
1954

50.2
64. 5
67.7
70.3
63.8

18.2
26.3
31.2
32.4
29.2

17. 1
21.6
18.6
19.4
16. 5

9. 0
9.5
10.5
11.2
10. 1

5.9
7. 1
7.4
7.4
8. 1

41.0
58. 0
71.6
77.7
69.6

19. 3
38.8
52.9
58.0
47.5

13.7
10. 8
10.4
11.3
13.0

2.3
2.5
2.6
2. 8
2.9

4.5
4. 7
4.7
4.8
5.0

1.2
1.3
1.0
.8
1.2

1955
1956 _
1957
1958
1959 ___

72. 8
77. 5
81.7
78. 5
90.3

31. 5
35.2
37.3
36. 6
40.4

20. 9
20. 2
19. 9
17. 7
22. 0

11. 0
11. 6
12.2
11. 9
13. 0

9. 3
10. 6
12. 2
12. 4
14.9

68. 9
71. 8
79. 7
87.9
91.4

45. 3
45. 7
49.7
52. 6
53.6

14. 0
14. 9
17.4
21. 3
22.2

3. 0
3. 3
4. 1
5. 4
6.7

4. 9
5. 2
5.7
5. 6
6.4

1. 6
2. 7
2.8
3. 0
2.5

9.2
6.4
-3.9
-7.4
-5.8
3. 8
5. 7
2. 0

96.6
98.3
106. 4
113.6
113.9

44. 0
45. 1
49. 1
51. 9
49.0

21.0
20.9
21. 8
23.0
24.0

14.0
14. 1
15. 1
15.6
16.4

17.6
18. 2
20. 5
23.0
24. 5

93. 1
102. 6
110. 4
115.2
119. 2

53. 1
57.4
62. 9
64.7
65.6

23.8
27.4
28. 3
29.9
31. 1

6.3
7.2
8. 0
9. 1
10. 4

7. 1
6.7
7. 1
7.7
8. 4

2.8
3. 9
4. 2
3.8
3.8

1960
1961
1962
1963

8.0
-2.5

— 9. 4
-1. 1

3.5
-4.3
— 4. 1
-1.5
-5.3

Preliminary estimate.
Source: Department of Commerce.

129

expenditures are: (1) The Federal sector account
records Federal purchases in terms of the delivery
of goods and services to the Government, whereas
cash payments for these deliveries may precede or
follow; (2) the account also records as purchases
loans by the Commodity Credit Corporation at the
time the loans are made, rather than when the collateral is surrendered, (3) interest on savings bonds
and Treasury bills is treated as an expenditure by
the Government when the interest is accrued, rather
than when it is actually paid out in cash; and (4) certain foreign currency activities of the Commodity
Credit Corporation require an adjustment. The
Corporation facilitates exports of surplus agricultural commodities by paying dollars to exporters,
in exchange for foreign currencies received for the
exports. Expenditures in the Federal sector account
are recorded only at the time these foreign currencies
are subsequently used for Government programs.
The consolidated cash statement, on the other hand,
includes the dollar payments to exporters but excludes both the receipt and the subsequent expenditure of a large part of these foreign currencies.
Many capital transactions of a financial nature
which are included in budget receipts and expenditures and cash receipts and payments are excluded
from the Federal sector. These items are primarily
loans, mortgages, other financial claims, and subscriptions to international lending institutions. Also
excluded are purchases and sales of existing assets,
such as land and secondhand property. These exclusions neither represent the production of current
output nor do they offset that income.
USES AND LIMITATIONS

Each of the three major series on Federal finance—
the administrative budget, consolidated cash, and
the Federal sector account—is useful for specific
kinds of analysis, and the selection of which to use
should be determined by the problem at hand. The
Federal sector account is especially suited for an
analysis of fiscal policy. It was specifically designed
to complement the data on private expenditures and

130

incomes contained in the national income accounts.
The accounts, however, exclude a substantial volume
of financial transactions through which the Federal
Government significantly affects the capital and
credit markets. As a result, for purposes of analysis
of the Federal impact on such markets, the consolidated cash statement may be more useful than the
national income accounts.
For certain types of problems, no overall measure
of receipts and expenditures will serve adequately.
Since the various receipt and expenditure transactions have different economic effects, a given aggregate will have an economic impact which depends
largely on the composition of the total. In addition,
many Government activities besides receipts and
expenditures affect the economy. For example, a
rapid expansion in new appropriations and in Government orders could stimulate a rise in business
activity well before either the delivery of goods, the
performance of services, or the payment for them.
The management of the public debt is a further factor
which has a significant impact on the money and
credit markets of the economy. Consequently, in
evaluating the economic impact of Federal Government activities, there is no substitute for complete
and detailed analysis of the Government program in
all its aspects.
REFERENCES

Current estimates by quarters on both seasonally
unadjusted and adjusted bases are published regularly by the Department of Commerce in the Survey
oj Current Business. Revised estimates for previous
years are generally published in the July issue. The
July 1964 issue contains statistics for the years 1959
through 1963 on a quarterly and annual basis, and
the July 1962 issue contains these statistics for 1956
to 1958. Estimates from 1946 through 1955 may be
found in U.S. Income and Output (1958); estimates for
prior years may be found in National Income (1954).
These latter two publications were prepared by the
Department of Commerce, as supplements to the
Survey of Current Business.

U.S. GOVERNMENT PRINTING OFFICE : 196? 0 — 4 0 - 7 5 2

Full text of Supplement to Economic Indicators : 1964

FRASER