Economic Indicators JANUARY Prepared for the Joint Economic Committee by the Council of Economic Advisers. 100th Congress, 1st Sessio

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1 th Congress, 1st Sessio Economic Indicators JANUARY 1987 Prepared for the Joint Economic Committee by the Council of Economic Advisers UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1987

2 JOINT ECONOMIC COMMITTEE (Created pursuant to Sec. 5(a) of Public Law 304, 79th Cong.) PAUL S. SARBANES, Maryl, Chairman LEE H. HAMILTON, Indiana, Vice Chairman SENATE WILLIAM PROXMIRE (Wisconsin) LLOYD BENTSEN (Texas) EDWARD M. KENNEDY (Massachusetts) JOHN MELCHER (Montana) JEFF BINGAMAN (New Mexico) WILLIAM V. ROTH, JR. (Delaware) STEVEN D. SYMMS (Idaho) ALFONSE M. D'AMATO (New York) PETE WILSON (California) HOUSE OF REPRESENTATES AUGUSTUS F. HAWKINS (California) DAVID R. OBEY (Wisconsin) JAMES H. SCHEUER (New York) FORTNEY H. (PETE) STARK (California) CHALMERS P. WYLIE (Ohio) OLYMPIA J. SNOWE (Maine) HAMILTON FISH, JR. (New York) J. ALEX McMILLAN, HI (North Carolina) JUDITH DAVISON, Executive Director COUNCIL OF ECONOMIC ADVISERS BERYL W. SPRINKEL, Chairman THOMAS G. MOORE, Member MICHAEL L. MUSSA, Member [PUBLIC LAW 10SlsT CONGRESS; CHAPTER 37IST SESSION] JOINT RESOLUTION [SJ. Res. 55] To print the monthly publication entitled "Economic Indicators" Resolved by the Senate House of Representatives of the United States of America in Congress assembled, That the Joint Economic Committee be authorized to issue a monthly publication entitled "Economic Indicators," that a sufficient quantity be printed to furnish one copy to each Member of Congress; the Secretary the Sergeant at Arms of the Senate; the Clerk, Sergeant at Arms, Doorkeeper of the House of Representatives; two copies to the libraries of the Senate House, the Congressional Library; seven hundred copies to the Joint Economic Committee; the required numbers of copies to the Superintendent of Documents for distribution to depository libraries; that the Superintendent of Documents be authorized to have copies printed for sale to the public. Approved June 3, Charts drawn by Art Production Branch, Office of the Secretary, Department of Commerce. Economic Indicators, published monthly, is available at $0 a single copy ($33 foreign), or by subscription at $7.00 per year ($335 for foreign mailing) from: SUPERINTENDENT OF DOCUMENTS GOVERNMENT PRINTING OFFICE WASHINGTON, D.C

3 TOTAL OUTPUT, INCOME, AND SPENDING GROSS NATIONAL PRODUCT According to preliminary estimates for the fourth quarter, current-dollar gross national product (GNP) rose.6 percent (annual rate) or $7 billion. Real GNP (GNP adjusted for price changes) rose 1 percent the implicit price deflator rose 1.0 percent. BILLIONS OF DOLLARS (RATIO SCALE) 4,400 SEASONALLY ADJUSTED ANNUAL RATES BILLIONS OF DOLLARS (RATIO SCALE) 4,400 4,000 4,000 3,600 3,600 3, 3,,800 GNP IN DOLLARS,800,400,400,000,000 1,600 I I I I I 1 I I 1 1,600 SOURCE DEPARTMENT OF COMMERCE [Billions of current dollars; quarterly data at seasonally adjusted annual rates] Gross national product Gross private domestic ment Exports imports of services Net exports Exports Imports Government purchases of services Federal National defense Personal consumption expenditures Nondefense State local Final sales * : IT - - I n m - I Ill - I nm,49,508.,73.0 3,05.6 3, ,405 3, ,998 4,08 3,1 3, , , ,799 3, ,909 3, ,030 4,087 4,149. 4, ,40 4,68 1,403 1,56 1,73.6 1,915,050,34,48.,600,76,117.0,315.8,363.8,416,445.6,487.,530.9,576.0,67,667.9,697.9,73.0,799.8, ,1.0,495.,740 3,08.6 3,190 3,4 3, , ,197 3,7 3, ,575 3, ,735 3, , , ,07 4, ,105 4,161. 4,45. 4,76 Source: Department of Commerce, Bureau of Economic An

4 GROSS NATIONAL PRODUCT IN DOLLARS [Billions of dollars; quarterly data at seasonally adjusted annual rates] Gross national product Personal consumption expenditures Nonresidential fixed Gross private domestic investment Residential fixed Net exports Exports of services Exports Imports Government purchases of services Federal National defense Change in business inventories Nondefense State local Final sales ' 3,115. 3,19 3,187 3,48.8 3, ,79 3, ,585. 3,676 1,961.0,004,000,04.,050,146.0,46,34, ,078 3,177 3, ,5.0 3,190 3,85 3,430 3,57 3,665-3,159, ,18.6-3,365, ,338 : I JI I 3,444 3,487 3,507 3,50,13.8,46,53, , , ,44 3,486 : I Ill 3, , , ,6,9,311.9,34.0, ,53.9 3,550. 3,603 3,67 - I Ill 3, ,661 3,686 3,70,37,408,448.0, ,616 3,646 3,686 3,713.9 Source: Department of Commerce, Bureau of Economic Analys IMPLICIT PRICE DEFLATORS FOR GROSS NATIONAL PRODUCT [ ; quarterly data are seasonally adjusted] Gross national product Personal consumption expenditures Durable Nondurable Services Gross private domestic investment Nonresidential fixed Residential fixed Exports imports of services Exports Imports Government purchases of services Federal National defense Nondefense State local " : I I I nill : I nm Source: Department of Commerce, Bureau of Economic Analysis. Digitized for FRASER

5 CHANGES IN GNP, PERSONAL CONSUMPTION EXPENDITURES, AND RELATED PRICE MEASURES [Percent change from previous period; quarterly data at seasonally adjusted annual rates] Gross national product Personal consumption expenditures Current dollars Constant () dollars Implicit price deflator Chain price index Fixedweighted price index ( weights) Current dollars Constant () dollars Implicit price deflator Chain price index Fixedweighted price index ( weights) * : - - I I - I m - I Ill _ Q NOTE.Annual changes are from previous year quarterly changes are from previous quarter. Source: Department of Commerce, Bureau of Economic Analysis. NONFINANCIAL CORPORATE BUSINESSOUTPUT, COSTS, AND PROFITS [Quarterly data at seasonally adjusted annual rates] Gross domestic product of nonfmancial corporate business (billions of dollars) Current dollars dollars cost profit Current-dollar cost profit per unit of output (dollars) 1 Indirect business taxes 3 Capital consumption allowances with capital consumption adjustment Compensation of employees Net interest Corporate profits with inventory valuation capital consumption adjustments Profits tax liability Profits after tax 4 Output per hour of all employees ( dollars) Compensation per hour of all employees (dollars) * I in - I in rv - I n HI 1, ,738 1,78. 1,914.,143,75,361 1,779,01,081,135.9,160,19,6.0,59,301,314,34,341, , ,837. 1,78. 1,866.0,030.8,105, ,760. 1,940 1,993.8,031.6,038,059,075,094,14.6,17,141.0,135, r 1838 ' ' Output is measured by gross domestic product of nonfinancial corporate business in dollars. This is equai to the deflator for gross domestic product of nonfinancial corporate business with the decimal point shifted two places to the left. 3 Indirect business tax nontax liability plus business transfer payments less subsidies. 4 With inventon- valuation capital consumption adjustments. Sources: Department of Commerce (Bureau of Economic Analysis) Department of Labor (Bureau of Labor Statistics).

6 NATIONAL INCOME [Billions of dollars; quarterly data at seasonally adjusted annual rates] National income Compensation of employees 1 Proprietors' income with inventory valuation capital consumption adjustments Farm Nonfarm Rental income of persons with capital consumption adjustment Corporate profits with inventory valuation capital consumption adjustments Profits with inventory valuation adjustment without capital consumption adjustment Profits before tax Inventory valuation adjustment Capital consumption adjustment Net interest " I. Ill - I I - I.. I.,443,518,719 3,03.0 3, 3,387,548.,851,963. 3,010 3,05 3,10.0 3, ,01 3,43 3,87 3,340 3,376 3,396 1,807 1,907.0,00,14,368.,498 1,931,09,153,195,34,75.0,316,35,380.9,4,461,480.,507, Includes employer contributions for social insurance. (See also p. 5.) Source: Department of Commerce, Bureau of Economic Analysis. PERSONAL CONSUMPTION EXPENDITURES [Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates] durable Durable Motor cles parts personal consumption expenditures Furniture household equipment Other nondurable Food Nondurable Clothing shoes Gasoline oil Other Retail sales of new passenger cars (millions of units) Services Domestics Imports.... p I Ill rv.. - I I - I HI 1,915,050,34,48.,600,76,117.0,315.8,363.8,416,445.6,487., ,67,667.9,697.9,73.0,799.8, ,07.0 1,18 1,7.0 1,336 1,441 1,066 1, , ,14 1,39.9 1,66 1,94.9 1,319 1,346 1,383. 1,407 1,49.8 1,45 1, Source: Department of Commerce, Bureau of Economic Analysis.

7 SOURCES OF PERSONAL INCOME Personal income rose $8. billion (annual rate) in December, following a rise of $7.8 billion in November. The increases were affected by two special factors: large increases in subsidy payments to farmers in December bonus payments to employees in the automobile industry in October. Excluding the effect of these factors, personal income rose $7.6 billion in December $16.6 billion in November. BILLIONS OF DOLLARS*(RATIO SCALE) 3,800 3, BILLIONS OF DOLLARS*(RATIO SCALE) 1 3,800 3, 1,600 1,600 WAGE AND SALARY DISBURSEMENTS OTHER INCOME 400 \ TRANSFER PAYMENTS 400 _L i Iii i ' i i i i i I i i in i i i i i I 700 COUNCIL OF ECONOMIC ADVISERS [Billions of dollars; monthly data at seasonally adjusted annual rates] personal income Wage salary disbursements Other labor income : Proprietors' income 3 Farm Nonfarm Rental income of persons 4 Personal dividend income Personal interest income Transfer payments 5 Less: Personal contributions for social insurance Nonfarm personal income 6 p : Dec ' Jan Feb Mar Apr May June July Aug Sept Get T.. Nov r Dec p,033.9,58,50.9,670.8, ,110. 3,314 3, , ,417 3,435 3,445 3,48 3,481 3, , , , , ,56.6 3, ,5 1,37.0 1,510 1,586 1, ,83 1,966,073.8,031,035,044.8,05,054.9,058,063.,07.0,083,088.0,10,11., ,983,15.8,465.6,618, ,05. 3,61.0 3, , ,371 3, ,399 3, ,40 3,431 3, , ,463 3, ,489 3,498.0 Source: Department of Commerce, Bureau of Economic Analysis

8 DISPOSITION OF PERSONAL INCOME Real per capita disposable personal income fell again in the fourth quarter of. BILLIONS Of DOLLARS * (RATIO SCALE) BILLIONS OF DOLLARS * (RATIO SCALE) 1,400 1,000 DOLLARS * (RATIO SCALE) 14,000 PER CAPITA DISPOSABLE PERSONAL INCOME 1,000 10,000 8,000 DOLLARS 1,000 DOLLARS * (RATIO SCALE) 14,000 1,000 10,000 8,000 6,000 6,000 4,000 I I I I I I I 4,000 * SEASONALLY ADJUSTED ANNUAL RATES SOURCE DEPARTMENT OF COMMERCE COUNCIL OF ECONOMIC ADVISERS Personal income Less: Personal tax nontax payments Equals: Disposable personal income Less: Personal outlays 1 Equals: Persona! saving Disposable persona! income in dollars (billions) Per capita disposable personal income Current dollars dollars Per capita personal consumption expenditures Current dollars dollars change in reai per capita disposable personal income Saving as percent of disposable personal income Population, including Armed Forces abroad (thouss) Billions of dollars Dollars Percent " 1,81,033.9,58,50.9,670.8, ,110. 3,314 3, ,551. 1,79 1,917.9,17.6,61,48,670.6,88.0,973 1,441 1,611 1,781 1,968,107,97,501.9,684, ,167,1.6,14,48.6,61,331.9,470.6,58.0,603 6,968 7,68 8,41 9,43 9,74 10,340 11,65 11,817 1,31 9,735 9,89 9,7 9,769 9,75 9,930 10,41 10,563 10,780 6,304 6,960 7,607 8,30 8,818 9,515 10,43 10,866 11,437 8,808 8,904 8,783 8,794 8,818 9,139 9,475 9,713 10, ,69 5,106 7,754 30,18 3,549 34,89 37,067 39,317 41,5 Seasonally adjusted annual rates : : : I Ill... : I I... : I m.....,79.,94 3,034. 3,077 3,139 3, ,53 3,98 3,33. 3,38.9 3,43.6 3,483 3, , ,318,57.9,61,646,693.8,79.6,755,84,83.0,88.,935,978, ,001.,174.9,38,433,488,50.9,564.6,611,658,71,756,789,85,895.8, ,76,39,446.9,460,481.9,493,495,550.8,54,540,581.,65.8,605,60 9,99 10,75 11,060 11,178 11,350 11,471 11,555 11,893 11,819 11, 99 1,193 1,348 1,34 1,38 9,749 10,151 10,358 10,39 10,457 10,477 10,466 10,674 10,537 10,577 10,73 10,886 10,776 10,737 9,068 9,85 10,007 10,06 10,304 r 10,453 10,613 10,779 10,964 11,107 11,08 11,36 r ll,579 11,634 8,904 9,99 9,37 9,488 9,494 9,547 9,613 9,674 9,774 9,790 9,857 r 9,985 10,15 10, ,466 35,707 36, 36,74 37,347 37,953 38,469 38,985 39,605 40,06 40,709 41,15 41,789 4,376 1 Includes personal consumption expenditures, interest paid by consumers to business, personal transfer payments to foreigners (net).

9 FARM INCOME In the third quarter of, according to current estimates, gross farm income fell $3 billion (annual rate) net farm income fell $1 billion, as Government payments fell sharply from their second quarter level. -^^\ r~~^ " ^' 1 T C ROSS FARM IS COME / ^ ^^ \ X _^x V -* \\ ;-^ ^ \ i ti \ i i 1 1 u u "\/ r N / ""-._ ; / ET FARM INCOME "\ V '' /" \,s \ x \.". i '^. \ / \' \,» 1 / X \ -, " v ' \ \y t l\ 1 \ i \ 1 \ \ I \ i' \ I I I I 1 1 1!! * SEASONALLY ADJUSTED ANNUAL RATES SOURCE: DEPARTMENT OF AGRICULTURE COUNCIL OF ECONOMIC ADVISERS [Billions of dollars; quarterly data at seasonally adjusted annual rates] Income of farm operators from farming ' Gross farm income Cash marketing receipts Livestock products Crops Value of inventory changes Production expenses Current dollars Net farm income dollars 3. - I Ill - I Ill - I HI - I in Income in current dollars divided by the GNP implicit price deflator (= ). NOTE.Data include net Commodity Corporation loans operator households. Sources: Department of Agriculture Department of Commerce.

10 CORPORATE PROFITS In the third quarter of, corporate profits before tax rose $1 billion (annual rate) after-tax profits rose $7 billion. BILLIONS OF DOLLARS 30 - SEASONALLY ADJUSTED ANNUAL RATES BILLIONS OF DOLLARS /I 40 _/" ~"V,~~~ fs r,"' / j """ / \ \ \ r 1 _---' SOURCE: DEPARTMEN OF COMMERCE. i i /, PROFITS BEFORE TAX ^ \ \ \/ \ ^ '-""""" \+" "\\.,-- ""^Vt-^ V--" 1 1 ±^ Z \ - N sx N ~--"'--_ 1 I 1 \ \» \ N TAX LIABILITY -s.---v... X \ \^ UNO STRIBUTED PR 3FITS ] 1 ^ /,,' / / / / PROF TS AFTER TAX,""''' A- ^-~\. / v "~v» K / i i [Billions of dollars; quarterly data at seasonally adjusted annual rates] "* s x..---\ 1 1 I \ --'*' - ^. I 1... L.. COUNCIL OF CONOMIC ADVISERS 80! Profits (before tax) with inventory valuation adjustment 1 Profits after tax Financial Domestic industries 3 Nonfinancial Manufacturing Wholesale retail trade Profits before tax Tax liability Dividends Undistributed profits Inventory valuation adjustment p I nm - I m rv - I m rv p See p. 4 for profits with inventory valuation capital consumption adjustments. Includes rest of the world, not shown separately. 3 Includes industries not shown separately. NOTE.Corporate profits related measures for the first 3 quartei ed to reflect retroactive provisions of the Tax Reform Act of. Source: Department of Commerce, Bureau, of Economic Analysis. of have been adjust-

11 --- GROSS PRATE DOMESTIC INVESTMENT According to preliminary estimates for the fourth quarter of, nonresidential fixed investment fell $0.9 billion (annual rate) from its third quarter level while residential investment outlays rose $3 billion. There was an $8 billion decrease in inventories following a decrease of $4 billion in the third quarter. BILLIC3NS OF DOLLARS 800 SEASONALLY ADJUSTED ANNUAL RATES BILLIONS OF DDL.ARS ~^n ---" ~. ~ - r"" """"" M--^. \ i i i GROSS PRATE DOMESTIC / INVESTMENT / r^i/ ^- - *'"\-""\,. NONRESIDENTIAL FIXED INVES MENT ^^ ^ CHf i,nge IN BUSIK INVENTORIES ""~Y i i i RESIDENTIAL FI <ED INVESTME MT \ ESS. 1 1! /X -^ 1 I 1 ^ ' "*** "~~"~^_ /N^ - 0 I I I OURCE: DEPARTMEN OF COMMERCE COUNCIL OF ECONOMIC ADVISERS [Billions of dollars; quarterly data at seasonally adjusted annual rates] Gross private domestic investment Fixed investment Nonresidential Structures Producers' durable equipment Residential Change in business inventories Nonfarm p I ni - I TJI rv - I TJ Ill rv Source: Department of Commerce, Bureau of Economic Analysis.

12 EXPENDITURES FOR NEW PLANT AND EQUIPMENT According to the Commerce Department October-November survey, business spending for new plant equipment for the year is expected to be 1 percent below the level, while spending in 1987 is expected to be 0.9 percent above the level. BILLIONS OF DOLLARS (RATIO SCALE) 600 BILLIONS OF DOLLARS (RATIO SCALE) ioo ;;;: _- "" _--- r^ H ^1 1 J Al I INDUSTRIES rr'" NOWMNUFACTURi ^^-~.-.-- go^7,-^~ -'-, - " x,'* "' AANUFACTURI I 1 1 I I I 1 I 1 J \ 1 1. / J/ 1987 _!/ SURVEYED QUARTERLY / SEE FOOTNOTE 4 BELOW SOURCE: DEPARTMENT OF COMMERCE: COUNCIL OF ECONOMIC ADVISERS [Billions of dollars; quarterly data at seasonally adjusted annual rates] Industries surveyed quarterly Addenda Manufacturing All industries Durable Nondurable 1 Mining Nonmanufacturing Public utilities Transportation Commercial other nonfarm business Nonmanufacturing Manufacturing Surveyed quarterly Surveyed annually 3 * ' I 11 I I Ill rv ' I 4 n Excludes forestry, fisheries, agricultural services; medical services; professional services; social services membership organizations; real estate, which, effective with the April-May survey, are no longer surveyed quarterly. See last column ("nonmanufacturing surveyed annually") for data for these industries. "All industries" plus the part of nonmanufacturing that is surveyed annually. 3 Consists of forestry, fisheries, agricultural services; medical sen-ices; professional services; social services membership organizations; real estate. 4 Planned capital expenditures as reported by business in October-November, corrected for biases. Source: Department of Commerce, Bureau of Economic Analysis. 10

13 EMPLOYMENT, UNEMPLOYMENT, AND WAGES STATUS OF THE LABOR FORCE In December, seasonally adjusted civilian employment rose 05,000 unemployment fell 94,000. MILLIONS OF PERSONS* 10 MILLIONS OF PERSONS* *16 YEARS OF AGE AND OVER SOURCE: DEPARTMENT OF LABOR COUNCIL OF ECONOMIC ADViSERS [Thouss of persons 16 years of age over, except as noted; monthly data seasonally adjusted except as noted by NSA] Noninstitutional population including resident Armed Forces NSA Resident Armed Forces NSA T H r f including resident Armed Forces Employment including resident Armed Forces Chilian labor force Civilian employment Nonagricultural Part-time for economic reasons : Unemployment 15 weeks over Labor force participation rate (percent) Agricultural Civilian 3... * : Dec r... : Jan* r.. Feb r... Mar "... Apr T... May r... June r.. July'.. Aug '... Sept '.. Oct \... Nov r... Dec 166, , , , , , ,91 18,93 180, , ,51 181, , ,998 18,183 18,354 18,55 18,713 18, , ,97 1,597 1,604 1,645 1,668 1,676 1,697 1,706 1,706 1,698 1,691 1,691 1,693 1,695 1,687 1,680 1,67 1,697 1,716 1,749 1,751 1, , , , ,87 113,6 115,41 117, , , , , , , ,74 119, , ,81 119,988 10,163 10,46 10,336,41,907 10,04 101,194 10, ,70 108, , , , ,48 110, , ,85 111,93 111, , , ,941 11,183 11, ,96 106, , ,04 111, , , , , , ,04 117, ,9 117, , , ,14 118,7 118, , ,586 98,84 99,303,397 99,56, , , , , ,89 108, , , , , , , , ,19 110,43 110,637 3,347 3,364 3,368 3,401 3,383 3,31 3,179 3,163 3,151 3,80 3,105 3,5 3,199 3,151 3,164 3,14 3,057 3,14 3,16 3,15 3,161 95,477 95,938 97,030 96,15 97, , , , , ,61 105,45 105, , , , , , , , ,17 107,476 3,373 4,064 4,499 5,85 5,997 5,51 5,334 5,345 5,9 5,97 5,14 5,95 5,567 5,569 5,3 5, 5,69 5,303 5,450 5,319 5,34 6,137 7,637 8,73 10,678 10,717 8,539 8,31 8,37 8,184 7,90 8,485 8,380 8,33 8,4 8,39 8,30 8,057 8,85 8, 8,43 7,949 1,41 1,871,85 3,485 4,10,737,305,3,09,117,33,43,130,3,99,50,7,373,168,17, Persons at work. Economic reasons include slack work, material shortages, inability to find fulltime work, etc. Labor force as percent of noninstitutional population (both including resident Armed Forces). 3 Civilian labor force as percent of civilian noninstitutional population. * Data beginning January not strictly comparable with earlier data because of change in estimation procedures. Note.Seasonally adjusted data revised beginning. Source: Department of Labor, Bureau of Labor Statistics. 11

14 SELECTED UNEMPLOYMENT RATES In December, the seasonally adjusted overall unemployment rate fell 0. percentage point to 6.6 percent; the civilian unemployment rate also fell 0. percentage point, to 6 percent. PERCENT* (SEASONALLY ADJUSTED) PERCENT* (SEASONALLY ADJUSTED) v,..a v \ UL BLACK 7 v v f N / v ' 0 A'" V '. <-( \ N TEENAGERS \ v (16-19) \ -v-vxa/ v A '"" x -v, BLACK AND OTHER f 'WHITE" ALL CILIAN WORKERS -\ <^L/ VVOME N 0 Y EARS AND OVER \ AAEN0YEAR AND OVER x=^_ s Illllllllll Illllllllll Illllllllll llinllllll Illllllllll 'UNEMPLOYMENT AS PERCENT OF CiVIUAN LABOR FORCE IN GROUP SPECIFIED. SOURCE: DEPARTMENT OF LABOR COUNCIL OF ECONOMIC ADVISERS [Monthly data seasonally adjusted] Unemployment rate, all workers ' Men 0 years over By sex age Women 0 years over Unemployment rate (percent of civilian labor force in group) Both sexes years White By race Black other Black Ail civilian workers Experienced wage salary workers Married men, spouse present By selected groups Women who maintain families Fulltime workers Parttime workers Labor force time lost (percent) : Dec r : Jan r... Feb r... Mar r... Apr r... May r... June ' '.. July r... Aug '... Sept r... Oct r... Nov r... Dec Note.Seasonally adjusted data r Source: Department of Labor, Bu: 1

15 SELECTED MEASURES OF UNEMPLOYMENT AND UNEMPLOYMENT INSURANCE PROGRAMS In December, the percentage of unemployed persons who 'iad been out of work for less than 5 weeks, for 15-6 weeks, for 7 weeks over rose while the percentage out of work for 5-14 weeks fell. The mean duration of unemployment the median rose. PERCENT DISTRIBUTION* PERCENT DISTRIBUTION* 70 REASON FOR UNEMPLOYMENT 50 JOB LOSERS REENTRANTS 0 0 NEW ENTRANTS 10 \ JOB LEAVERS 'SEASONALLY ADJUSTED SOURCE: DEPARTMENT OF LABOR COUNCIL OF ECONOMIC ADVfSERS [Monthly data seasonally adjusted, except as noted] Unemployment (thouss) Less than 5 weeks Duration of unemployment Percent distribution 5-14 weeks 15-6 weeks 7 weeks over Number of weeks Average (mean) Median Job losers Reason for unemployment: percent distribution Job leavers Reentrants New entrants State programs Insured unemployment Initial claims Insured unemployment, 'all regular programs (unadjusted) 1 Weekly average, thouss. 7,637 8,73 10,678 10,717 8,539 8,31 8, ,350 3,047 4,061 3,396,476 r, r 396 3,837 3,410 4,594 3,775,561,69 - Dec r 8, , ,884 - Jan ' Feb r. Mar ' May r July ' Sept r Oct ' Nov r Dec 7,90 8,485 8,380 8,33 8,4 8,39 8,30 8,057 8,85 8, 8,43 7, " - " " " ,583,59,630,598,655,678,699,713,707,61,565, ,370 3,95 3,144,799,556,474,63,483,335,96,478,841 Note.Seasonally adjusted data revised beginning. Souree: I)epartment of Labor (Bureau of Labor Statistics Employment Trail tralion). ng Adminis- 13

16 NONAGRICULTURAL EMPLOYMENT nonagricultural employment as measured by the payroll survey rose 69,000 in December. MILLIONS OF PERSONS MILLIONS OF PERSONS* (ENLARGED SCALE) 4 90 ALL NONAGRICULTURAL ESTABLISHMENTS SERVICE-PRODUCING INDUSTRIES GOODS-PRODUCING INDUSTRIES 0 ML "SEASONALLY ADJUSTED "SOURCE: DEPARTMENT OF LABOR COUNCIL OF ECONOMIC ADVISERS [Thouss of wage salary workers; l seasonally adjusted] nonagrieultural employment Goods-producing industries Manufacturing Durable Cnn onstruction Nondurable Transportation public utilities Wholesale trade Service-producing industries Retail trade Finance, insurance, real estate Services Government Federal p 90,406 91,156 89,566 90, 94,496 97,614,168 5,658 5,497 3,813 3,334 4,77 4,930 4,940 4,346 4,188 3,905 3,948 4,383 4,687 4,961 0,85 0,170 18,781 18,434 19,378 19,314 19,187 1,187 1,109 11,039 10,73 11,505 11,516 11,346 8,098 8,061 7,741 7,70 7,873 7,798 7,841 64,748 65,659 65,753 66,866 69,769 7,684 75,8 5,146 5,165 5,08 4,954 5,159 5,4 5,85 5,75 5,358 5,78 5,68 5,555 5,740 5,853 15,035 15,189 15,179 15,613 16,545 17,360 17,976 5,160 5,98 5,341 5,468 5,689 5,953 6,304 17,890 18,619 19,036 19,694 0,797 1,974 3,073 16,41 16,031 15,837 15,869 16,04 16,415 16,738,866,77,739,774,807,875,899 : Dec... 98,910 4,977 4,787 19,89 11,461 7,88 73,933 5,77 5,809 17,6 6,095,501 16,69,913 : Jan 99,96 Feb 99,49 Mar 99,484 Apr 99,783 May... 99,918 June.. 99,843 July...,105 Aug...,83 Sept...,560 Oct r..,86 Nov r. 101,065 Dec ".. 101,334 5,101 5,038 4,945 5,038 4,965 4,854 4,869 4,888 4,858 4,865 4,895 4,93 4,901 4,864 4,838 4,97 4,974 4,947 4,980 5,01 5,010 5,001 4,993 5,004 19,303 19,94 19,55 19,45 19,01 19,135 19,11 19,13 19,105 19,118 19,159 19,190 11,466 11,455 11,418 11,415 11,378 11,307 11,94 11,30 11,71 11,66 11,83 11,98 7,837 7,839 7,837 7,830 7,83 7,88 7,87 7,81 7,834 7,85 7,876 7,89 74,195 74,391 74,539 74,745 74,953 74,989 75,36 75,395 75,70 75,961 76,170 76,40 5,86 5,77 5,80 5,66 5,65 5,167 5,88 5,55 5,316 5,316 5,348 5,358 5,830 5,843 5,841 5,864 5,87 5,89 5,849 5,863 5,859 5,864 5,864 5,855 17,734 17,795 17,88 17,851 17,911 17,944 17,99 18,030 18,065 18,143 18,186 18,187 6,13 6,157 6,184 6,8 6,61 6,95 6,334 6,364 6,388 6,409 6,431 6,466,585,638,707,85,94 3,07 3,176 3,55 3,300 3,359 3,444 3,586 16,637 16,681 16,699 16,711 16,70 16,68 16,597 16,68 16,774 16,870 16,897 16,950,918,918,93,914,899,875,866,875,901,896,899,901 1 Includes all full- part-time wage salary workers in nonagricultural establishments who worked during or received pay for any part of the pay period which includes the 1th of the month. Excludes proprietors, self-employed persons, domestic servants, personnel of the Armed Forces. derived from this table not comparable with estimates of nonagricultural employment of the bad weather, etc., even if thev are not paid for the time off; which are based on a sample of the working-age population, whereas the estimates in this tahie Source: Department of Labor, Bureau of Labor Statistic; 14

17 AVERAGE WEEKLY HOURS AND HOURLY EARNINGS PRATE NONAGRICULTURAL INDUSTRIES [For production or nonsupervisory workers; monthly data seasonally adjusted, except as noted] Average weekly hours Average gross hourlv earnings Adjusted hourly earnings index total private nonagricultural private nonagricultural l Manufacturing Overtime private nonagrieultural ' Manufacturing Current dollars Ind 1977 ex, 1977 dollars 3 Percent change from a year earlier 4 5 Current dollars 1977 dollars.... p... : Dec ' Jan Feb. Mar May July Sept... Oct Nov r Dec p $ r $ ' AVERAGE WEEKLY EARNINGS PRATE NONAGRICULTURAL INDUSTRIES [For production or nonsupervisory workers; monthly data seasonally adjusted, except as noted] Current dollars private nonagricultural l 1977 dollars 3 Average gross weekly earnings Manufacturing Construction Current dollars Retail trade Percent change from a year earlier, total private nonagricultural 5 Current dollars 1977 dollars... p - Dec ' Jan Feb Mar May July Sept Oct r Nov T Dec p $ ' $ r $ $ $ Monthly changes based on indexes to two decimal places. 5 Based on seasonally unadjusted data. Source: Department of Labor, Bureau of Labor Statistics

18 PRODUCTITY AND RELATED DATA, BUSINESS SECTOR Output per hour of al] persons Business sector Nonfarm business seetor Business sector Output ' Nonfarm business sector Hours of all persons Business sector Nonfarm business sector Compensa ion per hm r 3 Business sector Nonfarm business sector Real compensation per lour 4 Business sector Nonfarm business sector Unit labor eosts Business sector Nonfarm business sector Implic t price defla or 5 Business sector Nonfarm business sector 1977; quarterly data seasonally adjusted " : : : I I I Ill , : I I r Percent change; quarterly data at seasonally adjusted annual rates p : : I Ill 4.6 ^ I 11 Ill : I Ill r Output refers to gross domestic product originating in the sector in dollars. Hours of a]l persons engaged in the sector, including hours of proprietors unpaid family workers. Estimates based primarily on establishment data. 3 Wages salaries of employees plus employers' contributions for social insurance private benefit plans. Also includes an estimate of wages, salaries, supplemental payments for the selfemployed. 4 Hourly compensation divided by the consumer price index for all urban consumers. 5 Current dollar gross domestic product divided bv constant dollar gross domestic product. NOTE.Data relate to all persons engaged in the sector. Percent changes are from preceding period are based on original data; thev therefore may differ slightly from percent changes based on indexes shown here. Source: Department of Labor, Bureau of Labor Statistics. 16

19 PRODUCTION AND BUSINESS ACTITY INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION Industrial production rose 0 percent in December, following a rise of 0.6 percent in November. The index for December was 0.9 percent above its year-earlier level. INDEX, 1977=* (RATIO SCALE) 140 _ TOTAL NDUSTRIA L PRODUCTION ^_ S" " p, -^ 1 in 1 1 [ 1 M! Mini. Ml, MANUFACTURING PRODUCTION 140 DURABLE ^^«<[ 1-10 r \ NONDURAB E "X/^ ^C^_ s ^ jii 1 1 ILL 1 f 1 1 1! 1 1 ^^ M I _ UTILITIES AND MINING PRODUCTION _ INDEX, 1977=* (RATIO SCALE) 0 FINAL PRODUCTS PEF uti-cnse AND SPACE.-"* x_ I I 1 V-1 ~s /"""""" ^~~ -~'\ ~" CONSUMER GOODS,,,,,,,,,,, -r""* EQUIPMENT _^_,,,,,!,,,,,,_.- ^ f,.-*,,,,,!,,,,, 90 _ MANUFACTURING CAPACITY UTILIZATION RATE_ 10 -\ M, nil, MI,A ^ f A^*<T3, M ^r- ["MINING liinliiin iimi iiin iinii ULMItb m.^i" ^ ^ 1 I M 1 1 I M 1 I I 1 1 M 1 1 I M I t 1 1 M 1 f 1 \ 1 M "SEASONALLY ADJUSTED SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM COUNCIL OF ECONOMIC ADVISERS [Monthly data seasonally adjusted] Index, 1977 = To al industrial production Percent change from year earlier Industry production indexes, 1977= Manufacturing Mining Durable Nondurable Utilities Capacity utilization rate, percent 1 Manufacturing Industrial materials.. P - Dec - Jan Feb Mar May Julv Sept r Oct r Nov r Dcc p Source: Board of Governors of the Federal Reserve System. 17

20 INDUSTRIAL PRODUCTIONMAJOR MARKET GROUPS AND SELECTED MANUFACTURES [1977 = ; monthly data seasonally adjusted] Products Materials Final products Intermediate products Consumer Durable Nondurable ' Equipment Business Defense space equipment Construction supplies Business supplies Energy 1977 proportion p - Dec - Jan Feb Mar Apr May June July... Aug Sept r Oct r Nov r Dec p : , Includes rigs prefabs, not shown separately. [1977 = ; monthly data seasonally adjusted] Durable manufactures Nondurable manufactures Primary metals Iron steel Fabricated metal products Nonelectrical machinery Transportation equipment Motor vehicles parts Lumber products Electrical machinery Apparel products Printing publishing cals products Foods 1977 proportion... p - Dec - Jan Feb Mar Apr June July Aue... Sept r Oct ' Nov r Dec p , Source: Board of Governors of the Federal Reserve Svstem 18

21 NEW CONSTRUCTION [Monthly data seasonally adjusted] Private Construction contracts 3 new construction expenditures ' Residential New housing units Commercial industrial z Other Federal, State, local value index (1977=) Commercial industrial floor space (millions of square feet) Billions of dollars " , ' 1, Annual rates Annual rates - Dec : Jan Feb Mar Apr June July r Aug r Sept T T Oct Nov" Dec" , , Includes the following categories of private construction not shown separately: residential improvements, railroads, electric light power, gas, petroleum pipelines, farm nonresidential. Includes hotels motels. 3 F. W. Dodge series. Sources: Department of Commerce (Burcai of the Census) McGraw-Hill Information Svstei Company, F. W. Dodge Division. NEW PRATE HOUSING AND VACANCY RATES [Thouss of units or homes, except as noted] New private housing units Units started, hy type of structure 1 unit -4 units 5 or more units Units authorized Units completed New private homes Homes sold Homes for sale at end of period ' Vacancy rate for rental housing units (percent) " 1,745 1,9. 1,084. 1,06. 1, ,749 1,74 1, , , ,084. 1,07 1, ,55 1, ,000 1,605. 1,68 1,733 1,761 1, , ,65 1,005 1,390 1,65. 1, Seasonally adjusted annual rates : Nov Dec : Jan Feb Mar May June July Sept Oct r Nov r Dec" 1,654 1,88,034,001 1,960,019 1,853 1,85 1,78 1,795 1,664 1,68 1,585 1,80 1,006 1,098 1,335 1,0 1,1 1,4 1,41 1,30 1,137 1,186 1,10 1,085 1,087 1, ,668 1,839 1,861 1,808 1,834 1,885 1,788 1,79 1,759 1,673 1,603 1,565 1,613 1,910 1,71 1,76 1,778 1,75 1,806 1,693 1,89 1,60 1,761 1,763 r 1,743 1,733 1, r r 35 r Seasonally adjusted. Quarterly" data entered in last month of quarter. Series beginning not strictly comparable with earlier data. 3 New series beginning March. NOTE.Beginning, units authorized are for 17,000 p data are for 16,000 places. Source: Department of Commerce, Bureau of the Census. Tmit-issuing places for

22 BUSINESS SALES AND INVENTORIESManufacturing Trade Manufacturing trade sales rose 0 percent in November inventories fell $1 billion. According to advance data, retail sales rose 4 percent in December after falling 0.6 percent in November. BULK5NS OF DOLLARS* (RATIO SCALE) ' ^ ^ - S\ 500 MANLJFACTURING AND 450 TRADE INVENTORIES r '-' /**' M; ~~\ 1 f \ ^NUFACTURING AN(D TRADE SA LES -**-,' "" - - BILLIONS OF DOLLARS* (RATIO SCALE) ^UU ,^~c. 160 _^ y..'^-' i g 1 ii i\ i _X XT"" \ s^ve AIL INVENTC3RIES -'"T" RETAIL SAlES _ -''--'' ^f ! 1 i 1 t 1 1 I RATIC>* 0 _ INVENTORY-SALES RATIO,-, \,_. - RETAIL MANUFACTURING AND TRADE ^*" % ~ r* X^_ I 1 1 I IMMI 1 1 p p t i 1 1 t 1 t SEASONALLY ADJ STED c OURCE: DEPARTM NT OF COMMERC COUNCIL OF ECONOMIC ADVISERS Manufacturing trade * Sales Inventories 3 Sales Wholesale Inventories 3 Sales Durable stores Nondurable stores Retail Inventories 3 Durable stores Nondurable stores Inventory-sales ratio 4 Manufacturing trade ' Retail Millions of dollars, seasonally adjusted.. 60,805 98,334 38, , , ,74 410,737 44, , , ,105 58, ,555 50,38 575, ,148 66,669 79,47 93,704 10,013 96,90,44 113, ,494 86,405 99,6 113, ,59 118,149 10,65 131, ,940 67,31 74,96 79,963 86,777 89,339 97, , ,495 3,368 5,59 4,914 7,089 8,059 33,041 38,817 4,851 43,863 49,397 55,049 59,688 61,79 64,817 68,939 71,645 10, , ,346 17,01 16, , , ,34 50,136 54,108 55,117 60,37 58,95 66,98 77,14 8,875 5,558 56,990 61,9 66,874 67,545 7,453 80,703 8, : Nov r Dec 431,01 r 43,679 58, , ,57 116,85 134,97 135, ,354 r 116,743 4,560 r 43,639 7,794 r 73, , ,34 83,38 8,875 8,549 8, r 1 - Jan Feb Apr May July Aug Sept Oct r Nov" Dec p 431,713 46,854 40,30 48,455 41,613 45,475 47,473 49,310 44,06 435, , , , , , ,77 588, , , , , , , ,380 11, , ,870 11, , ,48 117, , ,97 136,64 136, , , , , , ,74 139, ,11 138, , , 116, , , , ,804 11,53 18,331 11,655 T 10,937 16,55 44,187 43,949 43,79 44,874 45,554 45,596 46,31 47,91 54,617 47,679 T 46,706 51,447 73,16 73,51 73,405 7,841 73,11 73,364 73,49 73,611 73,714 73,976 r 74,31 74, , , ,551 17, , , ,59 17,96 171, , ,181 84,755 85,863 88,13 88,63 87,198 88,81 90,71 89,380 86,578 90,134 89,43 83,3 83,516 83,419 83,895 83,671 83,44 83,58 83,546 85,039 86,04 85, * See page 1 for manufacturing. Monthly average for year total for month. 3 Book value, end of period, seasonally adjusted. 0

23 MANUFACTURERS' SHIPMENTS, INVENTORIES, AND ORDERS In December, manufacturers' shipments new orders rose, while inventories unfilled orders fell. BILLIC)NS OF DOLLARS* (RATIO SCALE) BILLIC3NS OF DOLLARS* (RATIO SCALE) SHIPMENTS ~~" N! a"" 4 "' NO M NEW OT'P''^ '- ---x^' TOTAL ^DURABLE GOODS 1 M 1 1 _ ' "" ^-p-t~ JRABLE GOC ^H NON DURABLE G DODS 1 1 M 1 1 M ^s -.. I 1 M 1 ^. ^v '^-~-^- BILLICDNS OF DOLLARS* (RATIO SCALE) RATI INVEN TORIF^". - n 1 1 iln 1 il ii,,, 3* r^total -"X \ DURABLE GOO 3S --V NO ^DURABLE C OODS I 1 M INVENTORY-SHIPMENTS RATIO ^ -, h\ H 1 1 t 1 N It ^- ^ E 1 ii ii il, 1 1 ii ^-1 1 I I I 1 i t I ~ -^-X imil s SEASONALLY ADJU OURCE: DEPARTME STED NT OF COMMERCE COUNCIL OF ECC NOMIC ADVISERS Manufacturers' shipments 1 Durable Nondurable Manufacturers' inventories Durable Nondurable Manufacturers' new orders l Durable Capital industries, nondefense Nondurable Manufacturers' unfilled orders 3 Manufacturers' inventory shipments ratio 4 Millions of dollars, seasonally adjusted " - Dec - Jan Feb Mar May July Aug Sept Oct Nov" Dec p 143, , ,19 159,07 170, , ,10 195, , , ,74 191, ,13 193, ,64 193,94 193, ,81 196,0 197, 03,605 76,060 77,550 83,87 76,693 84,951 98,50 103, , , , ,545 10, ,59 103,67 104, , , ,07 107,443 r 106, ,631 67,876 76,841 84,57 8,334 85,491 91,076 91,45 89,891 93,307 93,085 90,79 88,358 89,540 89,396 89,089 88,314 89,151 90,54 88,759 90,553 91,974 41, 64,81 8,645 64,909 60,68 85,709 81,884 75,846 81,884 80,357 79,36 79,571 79,358 78,35 78,410 78,613 77,473 76,574 76,007 76,416 75, , ,60 186, , ,69 191, , ,8 189, , , , , , , , , ,10 185, , ,8 80,567 89,661 96,98 89,806 89,053 94,600 9,70 9,04 9,70 91,839 91,59 91,38 91,37 90,715 91,6 91,755 91,48 90,47 90,649 90,90 9,04 147, , ,75 157,55 173,59 191, , ,777 01,13 01, ,559 19, ,151 19,1 191, ,560 19, ,399 19,50 199,454 01,913 79,451 79,360 83,553 74,996 87,631, , , , , , ,68 103,747 10,64 10, ,0 103, ,73 103,569 r 108,86 109,838 3,31 3,59 4,050 0,681,764 7,017 7,15 7,179 30,566 4,88 8,637 6,540 6,179 6,145 6,41 7,387 6,35 8, 6,91 r 8,44 30,116 67,953 76,801 84,199 8,60 85,67 91,04 91,499 89,943 93,68 9,939 91,014 88,314 89,404 89,498 89,065 88,340 88,991 90,676 88,933 90,68 9,075 30,145 33, ,094 96, ,94 355, , , , ,6 368, , , ,59 364,68 365, , , , ,19 365, Monthly average for year total for month. Shipments are the same as sates. Book value, end of period. 3 End of period. 4 For annual periods, ratio of weighted average inventories to average monthly shipments; for monthly data, ratio of inventories at end of month to shipments for month. Souree: Department of Commerce, Bureau of the Census. 1

24 PRICES PRODUCER PRICES In December, the producer price index for all finished was unchanged, seasonally adjusted. The index for finished consumer foods fell 0 percent while the index for other finished consumer rose 0. percent. The index for capital equipment was unchanged. INDE, <, 1967 = (RATIO SCALE) INDEX, 1967= (RATIO SC FINISHED GOODS SEASONALLY ADJUSTED :ALEJ i r^a t rf /& W TOTAL FINISHED GOODS '//\ "CAPITAL EQ ^^,»*-' JIPMENT COr-JSUMEpyr LUDING FOOD5 GOOD S ^s~?l. \. *~*"~ r - '' ^*ap _- -~ pc-^"/^ DNSUMER FO( vrjc; V^: \-t>\ i i i M 1 1 I t 1 1!! i i t i i i i i M 1 1 I t 1 1 Mill I l I 1 1 i \ \ i 1 1 t I I l l 180 SOURCE; DEPARTMEN F OF LABOR COUNCIL OF ECONOMIC ADVISERS [1967 = ; monthly data seasonally adjusted] Finished Intermediate materials Crude materials finished Consumer foods Finished excluding consumer foods Consumer Durable Nondurable Capital equipment finished consumer Foods feeds ' Other Foodstuffs feedstuffs Other " : Dec - Jan Feb May July Aug T Sept Oct Dec Intermediate materials for food manufacturing feeds. Source: Department of Labor, Bureau of Labor Statistics.

25 CONSUMER PRICESALL URBAN CONSUMERS In December, the consumer price index for all urban consumers rose 0. percent, seasonally adjusted (0 percent not seasonally adjusted). The index was 1 percent above its year-earlier level. INDEX, 1967= (RATIO SCALE) 340 INDEX = (RATIO SCALE) ALL ITEMS i M i ill m; 180 SEE NOTE ON TABLE BELOW SOURCE: DEPARTMENT OF LABOR COUNCIL OF ECONOMIC ADVISERS [1967, except as noted; monthly data seasonally adjusted, except as noted by NSA] Housing Transportation All items l NSA Food ' Renters' = ) Shelter Homeowners' costs (Dec. =) Maintenance repairs NSA Fuel other utilities J New cars Motor fuel Medical care Apparupkeep Energy All items less food, energy, shelter Rel. imp. 3. : Dec : Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec NOTE.Data beginning incorporate a rental equivalence measure for homeownership costs therefore are not strictly comparable with figures for earlier periods. Source: Department of Labor, Bureau of Labor Statistics. 3

26 CHANGES IN PRODUCER PRICES FOR FINISHED GOODS I'eriod finished Change from preceding period Consumer Foods Excluding foods Capital equipment Change from :5 months earlier, amu al rate finished Consumer Foods Excluding foods Capital equipment Change from 6 months earlier, annual rate finished Consumer Foods Excluding foods Capital equipment Change from year earlier, total finished NSA Change, Dec. to Dec., NSA " Change, month to month : Dec : Jan Feb Mar May July Aug r Septr Oct Nov ' Dec j Source: Department of Labor, Bui CHANGES IN CONSUMER PRICESALL URBAN CONSUMERS [Percent change from preceding period; monthly data seasonally adjusted, except as noted by NSA] All items 1 Food ' ' Housing Shelter Renters' eosts Homeowners' costs ' Transportation New cars Motor fuel Fuel other utilities Appare! upkeep Medical care Energy All items less food, energy, shelter Addendum: All iterns, percent change (annua rate) From previous quarter 3 From 3 earlier From 6 months earlier From year earlier NSA Change, December to December, NSA Change, month to month : Dec : Jan Feb Mar Apr May June July Ang Sept Oct Nov Dec A o ' j Source: Department of Labor, Bui of Labor Statistics. 4

27 PRICES RECEED AND PAID BY FARMERS Prices received by farmers in January fell 1 percent from their December level. Prices paid by farmers in January rose 0.6 percent from their October level. INDEX, 1977= (RATIO SCALE) PRICES PAID INDEX, 1977 = (RATIO SCALE) PRICES RECEED " inn! mil RATIO-!' 140 linn iniiliiiii I I I I I I I I Illllllllll 60 RATION J/RATiO OF INDEX OF PRICES RECEED TO INDEX OF PRICES PAID- SOURCE: DEPARTMENT OF AGRICULTURE COUNCIL OF ECONOMIC ADVISERS [1977 = ] Prices received by farmers Prices paid by farmers All farm products Crops Livestock products All commodities, services, interest, taxes, wage rates l Production items, interest, taxes, wage rates Production items Ratio r r r r - Jan r Feb r Mar r Mav r July r Aug r Sept/ Oct r Nov r Dec Jan Source: Department of Agriculture. 5

28 MONEY, CREDIT, AND SECURITY MARKETS MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES In December, growth accelerated in Ml the broader aggregates. BILLIONS OF DOLLARS*(RATIO SCALE) 3,600 3,,300,400,000 -M3- BILLIONS OF DOLLARS*(RATIO SCALE) 3,600 3,,800,400,000 1,600 _M 1,600 1, 1, AVERAGES OF DAILY FIGURES; SEASONALLY ADJUSTED SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM COUNCIL OF ECONOMIC ADVISERS [Averages of daily figures, except as noted; billions of dollars, seasonally adjusted] Ml M MS L Debt Percent change from year or 6 months earlier Sum of currency, dem deposits, travelers' checks, other checkable deposits (OCDs) Ml plus overnight RPs Eurodollars, MMMF balances (general purpose broker/dealer), MMDAs, savings small time deposits M plus large time deposits, term RPs, term Eurodollars, institution-only MMMF balances M3 plus other liquid assets Debt of domestic nonfinancial sectors (monthly average) 1 Ml M M3 Debt ' Dec - Dec ' Dec - Dec ' Dec - Dec... ' Dec ' Jan Feb Mar.. Mav Julv Sept T Oct ' Nov r Dec " ,497 1,630 1,79.8 1,95.6,186.0,373.8,566,804,569.9,577,59,6.,649,670.8,699.,74,740.8,765.,781,804 1,803. 1,987,3,443,697,986 3,01. 3,488 3,4 3,41 '3,6.6 3,93 3,315 3, ,375 3,400 3,45.6 3,444 3,461 3,488,114.8,33,593,850 3,163 3,53 3,839 3,86. 3,881. '3,895 r 3,918.6 r 3,951.0 ' 3,973 r 4,003 T 4,03 1 4,059 4,08 4,11. 3,556 3, ,79. 4,661 5,10 5, , ,878 6,93 6,968,09 ',101 ',17. ',38 r,314.8,387. 7,444 7, r r!.0 10 r! Consists of outsting credit market debt of the U.S. Government, State local govei ments, private nonfinancial sectors; data from flow of funds accounts. Annual changes are from December to December monthly changes are from 6 months cr at a seasonally adjusted annual rate. NOTE.See p. 7 for components. Source: Board of Governors of the Federal Reserve System. 6

29 COMPONENTS OF MONEY STOCK AND LIQUID ASSETS [Averages of daily figures; billions of dollars, seasonally adjusted, exeept as noted hv XSA] Currencv Dem deposits Other checkable deposits (OCDs) Money market mutual fund balances Overnight repurchase agreements (RPs), net, plus overnight Eurodollars General purpose broker/ dealer Institution only Money market deposit accounts (MMDAs) Savings deposits Small denomination time deposits ' Large denomination time deposits 1 1 Term repurchase agreements (RPs) Term Eurodollars (net) Savings bonds Shortterm Treasury securities Bankers' acceptances Commercial paper NSA NSA NSA NSA NSA NSA : Dec : Dec : Dec : Dec : Dec : Dec : Dec : Dec ".. : Jan Feb Mar Apr May June July Aue& Sept r Oct r Nov r Dec p r r r 300 r 99 r 30 r 300. r 9 r r Small denomination large denomination deposits are those issued in amounts of less than $,000 more than $,000, respectively. NOTE.See note p. 6. Travelers checks are a component of money stock but are not shown hei Source: Board of Governors of the Federal Reserve Svstern. CONSUMER INSTALLMENT CREDIT [Millions of dollars; seasonally adjusted] Installment credit outsting (end of period) Automobile Revolving Mobile home Other Net change in installment credit outsting 1 Automobile Revolving Mobile home Other 1977: Dec - Dec : Dec - Dec - Dec... - Dec - Dec... - Dec - Dec - Nov Dec ' Jan Feb Mar... May June... July Sept... Oct r Nov p 1,475 61,976 96,483 97, ,31 37, ,39 453, ,098 58,61 535,098 54, ,85 550, ,810 56,67 r 567, ,16 r 576, , ,54 595,560 80,948 98,739 11,475 11,55 10,00 15, , ,1 06,48 03,766 06,48 10,661 13,34 14,361 15,814 18,965,606 r 6,34 r 8,814 r 36,80 40,548 41,39 36,689 45,0 53,357 54,894 60,750 66,007 78,369 98, ,96 117, ,96 119,68 10,74 1,131 13,44 14,545 r 14,70 15,577 15,915 16,01 16,514 18,10 16,36 16,91 18,07 19,119 0,38 0,998,194 4,184 5,461 5,315 5,461 5,371 5,573 5,584 5,513 r 5,560 r 5,479 5,398 5,15 4,958 4,994 5,09 87, ,114 11, , , ,799 19, , ,859 18, , , ,1 188, ,041 r!93, , , , , ,485 01,036 33,693 40,501 34,507 1,184 16,654 1,85 49,066 77,341 81,518 5,643 6,477 7,655 5,099 3,087 4,871 6,457 5,386 5,564 3,393 7,74 7,08 4,018 14,17 17,791 13, ,765 5,349 0,539 7,14 33,360 1,77,716 4,179,68 1,019 1,45 3,151 3,64 3,68,579 7,466 4, ,094 8,513 8,155 1,537 5,856 5,57 1,36 0,145 19,78 1,83 1,46 1,386 1,04 1,407 1,311 1, , , , ,196 1,990 1, ,15 13,638 11,330-1,045 1,770 1,630 14,969 7,99 7,099,044,369,180 1, ,178,155 1,650 1, ,401 1,551 1 For year-end data, change from preceding vear-end; for monthly data, change from preceding month. Source: Board of Governors of the Federal Reserve Svstem. 7

30 ' BANK LOANS AND SECURITIES, AND RESERVES Commercial industrial loans rose 3. percent in December. BILLION S OF DOLLARS * (RATIO SCALE),,000 1,800 1,600 1,400 1, 1, ALL COMMERCIAL BANKS r^---] ^^- ' ^^ I - r^ 1 JANS AND LEA -^^. -] BILLIONS OF DOLLARS * (RATIO SCALE) _,. _ *""",- ",,000 1,800 1,600 1,400 1, 1, =, - ; ^ =-' U.S. GC VERNMENT SECURITIES \ \ " r^. * --- -, \ 1 C JTHER SECURIT ES. ', -- x ' '" '' iimlinii [ 1 1 i 1 iiiniiiiii miilmn illlillllil nmlmii umlinii Illllllllll illllllllll 80 SEASONALLY ADJUSTED SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEW COUNCIL OF ECONOMIC ADVISERS [Billions of dollars, seasonally adjusted, except as noted] All commercial banks 1 Depository institutions 3 loans securities z Loans leases Commercial industrial loans U.S. Government securities Other securities Reserves adjusted for changes in reserve requirements Nonborrowed Required Borrowings (millions of dollars, unadjusted) Seasonal : Dec : Dec : Dec - Dec - Dec.. : Dec - Dec : Dec p - Jan Feb Mar Apr Mav July Aug Sept r Oct ' '. Nov" Dec p 1,13 1,40 1,308. 1,401 1,553 1,7.6 1,900,079 1, ,935 1, , ,957 1,963 1,985.0,007,09.6,034.0,049.0, , ,13 1,319 1,449 1, ,469 1,473 1,49 1, ,501 1,505 1,513 1,54 1,534 1,537 1,549 1, r r r ,473 1, ,186 1, , related institutions. Data beginning January are not strict!; 8

31 SOURCES AND USES OF FUNDS, NONFARM NONFINANCIAL CORPORATE BUSINESS [Billions of dollars; quarterly data at seasonally adjusted annual rates] Sources Uses Internal ' External Credit market funds Securities mortgages Loans short-term paper Other Capital expenditures 3 Increase in financial assets Discrepancy (sources less uses). r : I HI : I n m p ' 38 r T , r 33 r r r 61. r r r r r r r r Undistributed profits (after inventory valuation capital consumption adjustments), capital consumption allowances, foreign branch profits, dividends, subsidiaries' earnings retained abroad. * Consists of tax liabilities, trade debt, direct foreign investment m the L.S. 3 Plant equipment, residential structures, inventory investment, Government. Source: Board of Governors of the Federal Reserve Svstem. leral rights from U.S. CURRENT ASSETS AND LIABILITIES OF NONFINANCIAL CORPORATIONS [Billions of dollars, except as noted] End of period Cash U.S. Government securities Current assets Notes accounts receivable Inventories Other current assets Current liabilities Notes accounts payable Other current liabilities Net working capital Current ratio 1 QFR-FRB series: : - I m - I nm - I p 1,043 1,14.8 1,38 1, ,437 1, , , , ,619 1, , , ,7 1, , , , , ,16 1,3 1, ,093 1,16 1, ,16 1,174 1,18.9 1,11.9 1,3 1, the Department of Commerce, Bureau of the Census from the Federal Trade Commission. Sources: Board of Governors of the Federal Reserve System, Department of Commerce (Bureau of the Census), Federal Trade Commission. 9

32 INTEREST RATES AND BOND YIELDS Interest rates fell in January. PERCENT PER ANNUM 16 T PERCENT PER ANNUM COUNCIL OF ECONOMIC / [Percent per annum] 3-month hills (new issues) l U.S. Treasury security yields Constant maturities 3-year 10-year High-grade municipal bonds (Stard & Poor's) s Corporate Aaa bonds (Moody's) 4 Prime commercial paper, 6 months * Discount rate (N.Y. F.E. Bank) 5 Prime rate charged bv banks 5 Ne\v-home mortgage yields (FHLBB) C Jan Feb Mar Apr May July Sept Oct Nov.. Dec r Jan Week ended: 1987: Jan Feb Bank-discount basis, Yields on the more actively traded issues adjusted to constant i laturities bv the Treasurv Depart men t. 3 Weekly data are Wednesday figures, 4 Series'excludes public utility issues for January 17, through October 11, 1084 due to lack of appropriate issues. 5 Average effective rate for year; opening closing rate for month week. 6 Effective rate (in the primary market) on conventional mortgages, reflecting fees charges as well as contract rate assumed, on the average, repayment at end of 10 years. Sources: Department of the Treasury, Board of Governors of the Federal Reserve System, Federal Home Loan Bank Board, Moody's Investors Service, Stard & Poor's Corporation. 30

33 COMMON STOCK PRICES AND YIELDS Stock prices rose in January. INDEX, DEC. 31, 1965 = INDEX, DEC. 31, 1965 = COMPOSITE STOCK PRICE INDEX (NYSE) -V PERCENT 0 Illlll PERCENT EARNINGS-PRICE RATIO ON COMMON STOCKS (S&P) J I 1 SOURCES: NEW YORK STOCK EXCHANGE AND STANDARD & POOR'S CORPORATION COUNCIL OF ECONOMIC ADVISERS Composite New York Stock Exchange indexes (E Industrial Transportation Common stock prices 1 Utility 3) z Finance Dow-Jones industrial average 3 Stard & Poor's composite index ( =10) 4 Common stock yields (percent) 5 Dividendprice ratio Earningsprice ratio ' Jan Feb Mar Apr June July Sept Oct Nov Dee 1987* Tan , ,1904 1,1788 1,38.3 1,796 1, ,653 1,7575 1, ,800 1,8670 1, ,8435 1,8137 1, ,885 1,94.07, r 5.87 Week ended: 1987: Jan , ,989.65,040.95,109.65, York Stock Exchange, Dow-Jones & Company, Inc., Stard & Poor's Corprices. Earnings- 'rice ratios based on prices at end of quarter. NOTE.All data relate to stoeks listed on the New- York Stock Exchange (NYSE). 31

34 FEDERAL FINANCE FEDERAL RECEIPTS, OUTLAYS, AND DEBT In the first 3 months of fiscal 1987, there was a deficit of $64 billion compared with a deficit of $75 billion a year earlier. BILLIONS OF DOLLARS BILLIONS OF DOLLARS 1,, SURPLUS OF DEFICIT (-)L/ _ !/ INCLUDES ON-BUDGET AND OFF-BUDGET ITEMS. SOURCES: DEPARTMENT OF THE TREASURY AND OFFICE OF MANAGEMENT AND BUDGET FISCAL YEARS COUNCIL OF ECONOMIC ADVISERS [Billions of dollars] Fiscal year or period Receipts Outlays Surplus or deficit (-) Receipts On-budget Outlays Surplus or deficit (-) Receipts Off-budget Outlays Surplus or deficit (-) Gross Federal debt (end of period) Held by the public , , , , ,14 1, i , , ,87.,13.9,37,585 1, ,746 1,908,015 Cumulative total, first 3 months: Fiscal year Fiscal year ,950,18.9 1,600 1,814 1 Estimates from Budget of Ikr United States Gorernmeat, Fiscal Year 1988, January Sources: Department o the Treasury Office of Management Budget. 3

35 FEDERAL RECEIPTS BY SOURCE AND OUTLAYS BY FUNCTION In the first 3 months of fiscal 1987, receipts were $ billion higher than a year earlier outlays were $.0 billion higher. BILLIC NS OF DOLLARS 400 RECEIPTS!/ INDIDUAL INCOME TAXES "~ BILLIONS OF DOLLARS _ ' 7 " SOCIAL INSURANCE TAXES AND CONTRIBUTIONS ""CORPORATION INCOME TAXES / ^^r=^r. _. "I ~*^ OTHER RECEIPTS ' j! , OUTLAYS^. NONDEFENSE \ '" NATIONAL DEFENSE 300 _L/ INCLUDES ON-BUDGET AND OFF-BUDGET ITEMS. SOURCES: DEPARTMENT OF THE TREASURY AND OFFICE OF MANAGEMENT AND BUDGET FISCAL YEARS COUNCIL OF ECONOMIC ADVISERS [Billions of dollars] On-budget off-budget receipts On-budget off-budget outlays Fiscal year Individual income taxes Corporation income taxes Other National defense Social insurance taxes contributions Department of Defense, military International affairs Health Medicare Income security Social security Net interest Other ' 1988 ' ) , , Cumulative total, first 3 months: Fiscal year Sources: Department of the Treasury Office of Management Budget. 33

36 FEDERAL SECTOR, NATIONAL INCOME ACCOUNTS BASIS In the third quarter of, Federal receipts rose $19.6 billion (annual rate) expenditures fell $15. billion, yielding a deficit of $197 billion. In the fourth quarter, according to preliminary estimates, expenditures rose $1 billion; receipts data are incomplete. BILLIO JS OF DOLLARS 1, SEASONALLY ADJUSTED ANNUAL RATES BILLIONS OF DOLLARS 1, 1,000 1, _ - --^l r *^~~~~~~ '^^^ ^,,-,...,-;- S" EXPENDITURES V- \ ' " \ RECEIPTS -"' '"\^ s-~-^ ^ I '! 1 1 ~~-^_~ K i i i JS OR DEFICIT H i I I 1 1 I -_. 0 - CALENDAR YEARS SOURCE; DEPARTMENT OF COMMERCE COUNCIL OF ECONOMIC ADVISERS [Billions of dollars; quarterly data at seasonally adjusted annual rates] Federal Government receipts Personal tax nontax receipts Corporate profits tax accruals Indirect business tax nontax accruals Contributions for social Lnsurance Purchases of services Federal Government expenditures Transfer payments Grantsin-aid to State local governments Net interest paid Subsidies less current surplus of Government enterprises Less: Wage accruals less disbursements Surplus or deficit (-), national income product accounts Fiscal year:.. 198V 1 Calendar year: p - : - - I Ill - I Ill " ,05 1, , ,03 1,001 1,045 1,030 1, _^ Sources: Department of Commerce (Bum Budget. 34

37 INTERNATIONAL STATISTICS INDUSTRIAL PRODUCTION AND CONSUMER PRICESMAJOR INDUSTRIAL COUNTRIES United States Industrial production (1977=: seasonally adjusted) Canada Japan France Germany Italy United Kingdom United States 1 Canada Consumer prices (1967 = ) Japan France Germany Italy United Kingdom p : Dec : Jan Feb Mar May July Sept Oct Nov " Dec " ' 14.9 ' 15 ' r l!8 116 r l! ' r l! r l! Source: National source? as reported by Department of Commerce (Bureau of Economic Analysis International Trade Administration). U.S. MERCHANDISE EXPORTS AND IMPORTS [Millions of dollars; monthly data for statistical month, not seasonally adjusted*] Merchise exports : Merchise imports Merchise trade balance domestic foreign exports Domestic exports Food, beverages, tobacco Crude materials fuels Manufactured z Food, beverages, tobacco General imports 3 Crude materials fuels Manufactured (c.i.f. value) Exports (f.a.s.) less imports (customs value) Exports (f.a.s.) less imports (f.a.s.) Exports (f.a.s.) less imports (c.i.f.) F.a.s. value ,3 143, ,860 0, ,04 141,14 178,633 16,515 15,963 0,604 4,587 30,407 18,579 0,957 8, 33,719 80,151 94, , , , ,757 09,458 44,871 14,7 15,743 17,735 18,551 Customs value 53,554 51,901 71,390 93,973 76,554,317 11,6 15,1 160, ,045,8 56,984-9,158-31,076-7,599-4,41-39,179-4,364-40,368-36,354 * 1,193,486 17,865 13,146 17,304 07, ,917 1,034 06,95 06,376 6,977 6,979 7,31,6 0,3 33,518 9,555 31,48 8,344 6, ,716 13, ,14 145, ,690 43,95 58,048 35,76 345,76 369,961 17,817 18,819 1,66,376 4,669 74,404 68,037 7,758 64,981 48,57 144,0 163,449 1,515 46,778 8,11 54,885 69, , ,66 387,08-31,759-57,56-107,861-13,19-15,657-4,691-69,39-13,31-148, ,777 16,994 16,479 1,907,459 11,1 30,78,138 6,011 1,654 3,141-13,734-15,146 : Jan* Feb* Mar* Apr* May* June** July** Get* Noy* Dec* 17,006 17,735 18,913 17,965 17,431 19,070 17,707 17,604 17,518 19,330 18,595 18,431 16,501 17,164 18,349 17,376 16,691 16,47 15,911 16,831 16,860 18,594 17,895 17,777 1,797 1,689 1,706 1,475 1,395 1,438 1,648 1,814 1,67 1,866 1,863 1,861,467,367,349,436,8 1,776 1,764,035 1,988,87,339,419 11,393 1,18 13,35 1,615 1,74 1,98 11,63 1,04 1,53 13,367 1,755 1,564 3,005 8,895 31,97 8,76 30,7 31,764 34,11 9,476 8,695 30,018 36,187 7,795,15 1,908,,018,39 1,886,143 1,931 1,963 1,935,38 1,91 6,34 4,741 4,84 3,176 3,659 4,163 3,963 3,413 3,874 3,514 3,866 3,371,477 1,89 4,61,6 3,001 3,971 6,609 3,106 1,849 3,537 8,350 1,446 33,465 30,5 33,435 30,036 31,638 33,40 35,745 30,95 30,078 31,389 37,816 9,089-14,999-11,161-13,059-10,797-1,84-1,694-16,414-11,871 11,177-10,688-17,59-9,364-16,459-1,491-14,5-1,071-14,08-14,170-18,037-13,31-1,560-1,059-19,1-10,658 1 Department of Defense shipments of grant-aid military supplies equipment under the Military Assistance Program are excluded through included beginning. z includes commodities transactions not classified according to kind. 3 arrivals of imported other than intransit shipments. NOTE.Imports on c.i.f. basis beginning not strictly comparable with earlier periods. Data beginning include trade of t'he U.S. Virgin Isls, except that for Virgin Isls exports are reflected in the figures for domestic foreign exports combined trade balance. Source: Department of Commerce, Bureau of the Census. For further information for details regarding revised 35